BGC - NASDAQ

Greetings, and welcome to the BGC Group, Inc Fourth Quarter and Full Year 2025 Earnings Call. All participants at this time are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jason Chryssicas, Head of Investor Relations. Thank you. You may begin. Hello, everyone.

Good morning. We issued BGC Group, Inc’s fourth quarter and full year 2025 financial results, which can be found at ir.bgcg.com. Any historical results provided on today's call compare only the 2025 with the prior year period, unless otherwise stated. All references to record and/or strongest results are compared to BGC Group, Inc’s stand-alone financial results excluding Newmark prior to the spin-off in November 2018. We will be referring to our results on a non-GAAP basis, which include the terms adjusted earnings and adjusted EBITDA. Please refer to today's investor materials on our website for additional details on our financial results and for complete and updated definitions of any non-GAAP terms, reconciliations of these items to the corresponding GAAP results, and how, when, and why management uses them, as well as relevant industry and economic statistics. The outlook discussed today assumes no material acquisitions or dispositions. Our expectations are subject to change based on various macroeconomic, social, political, and/or other factors. Information on this call contains forward-looking statements including, without limitation, statements about our economic outlook and business. These statements are subject to risks and uncertainties, which could cause our actual results to differ from expectations. Except as required by law, we undertake no obligation to update any forward-looking statements. For information on factors that could cause actual results to differ from forward-looking statements, and a complete discussion of risks and other factors that may impact these forward-looking statements, see our SEC filings, including, but not limited to, the risk factors and disclosures within these SEC documents. With that, I am now happy to turn the call over to Sean A. Windeatt, Co-Chief Executive Officer of BGC Group, Inc.

Thank you, Jason.

Good morning, and welcome to our fourth quarter and full year 2025 conference call. With me today are my fellow Co-Chief Executive Officers, John Joseph Abularrage and Jean-Pierre Aubin, along with our Chief Financial Officer, Jason Williams Hauf. BGC delivered record-breaking revenues in both fourth quarter and full year 2025, with increases of 32% and 30%, respectively. This strong growth extended across all asset classes and geographies, driven by double-digit organic growth and our acquisition of OTC. We achieved the strongest annual results in our history, with revenues approaching $3,000,000,000 and EPS growing by 24% under GAAP and 19% for adjusted earnings. We significantly expanded our market share, completed our second largest acquisition, and became the world's largest energy broker. We completed the first phase of our cost reduction program that will realize $25,000,000 of annualized savings in 2026, with further cost savings targeted throughout the year. FMX produced another record year with our FMX UST business ending 2025 with a 40% market share. Our FMX futures exchange continued its rapid growth with SOFR futures average daily volumes and open interest increasing 8% and 297%, respectively, from the previous quarter. This strong momentum has continued into 2026 with volumes, open interest, and market share all setting new daily highs. Three years ago, on our fourth quarter 2022 earnings call, we declared BGC a growth company once again. Since then, we produced 13% revenue growth in 2023, 12% in 2024, 30% in 2025, and have now guided 34% growth for 2026 at the midpoint of guidance. Our revenues have increased from $1,800,000,000 in 2022 to nearly $3,000,000,000 this year. Over the same period, our adjusted EPS has risen by 71% to $1.18 per share. We have become the largest ECS broker globally, diversified our customer base, and introduced competition to the U.S. interest rate futures market. We believe our company is stronger than ever and perfectly positioned for continued success as we move into 2026, with the year already off to a record-breaking start.

With that, I would like to turn the call over to John to go over the quarterly results of the business in more detail.

Thank you, Sean.

We delivered record fourth quarter revenues of $756,400,000, a 32.2% increase versus last year.

Excluding our acquisition of OTC, revenues were $641,900,000, up 12.2%, which also would have been a fourth quarter record. Our total brokerage revenues grew by 34.6% to $694,600,000, driven by growth across all asset classes. Our ECS revenues grew by 92% to $257,500,000, driven by OTC and strong organic growth across the broader energy complex and our shipping business. Excluding OTC, ECS revenues grew by 10% versus last year. Rates revenues increased 16.4% to $197,400,000, reflecting strong double-digit growth in G10 interest rate products, emerging market and repo products. Foreign exchange revenues were up 9.8% to $102,800,000, primarily due to strong growth in emerging market currencies and G10 FX forward volumes. Credit revenues increased by 3% to $64,300,000, driven by higher emerging market and European credit volumes. Equities grew by 29% to $72,700,000, reflecting global equity volatility and strong market share gains. Data, network and post-trade revenues grew by 14.2% to $36,700,000 excluding Capitalab, which we sold in 2024. This growth was driven by Lucera and Fenics market data. Including Capitalab, data, network and post-trade revenues grew by 12.5%. Now turning to Fenics. In the fourth quarter, Fenics revenues increased by 15.4% to a fourth quarter record of $163,900,000. Fenics Markets generated revenues of about $136,700,000, an increase of 15.1%. This growth was primarily driven by higher electronic volumes across rates products, and increased Fenics market data revenues. On 12/31/2025, we sold our KACE business for up to $119,000,000, or 28 times post-tax profits. Fenics Growth Platform's revenues grew to $27,200,000, an 18.9% increase excluding Capitalab, driven by strong revenue growth in FMX and Lucera. Including Capitalab, which we sold in the fourth quarter last year, Fenics Growth Platform's revenues increased by 16.5%. FMX UST generated record fourth quarter average daily volume of $58,700,000,000, more than 12% higher compared to last year and outpacing all electronic U.S. Treasury platforms. This strong growth drove market share to a record 39% for the fourth quarter, up from 37% last quarter and 30% a year ago. FMX UST market share has increased sequentially in 12 of the last 13 quarters, more than doubling over the same period. FMX futures exchange saw record volumes and open interest in the fourth quarter, with ADV and open interest increasing 8% and 297%, respectively, versus the third quarter. This momentum has carried into 2026, where ADV was approximately 40,000 contracts in January, exceeding 1% market share for the first time, and open interest ended with approximately 200,000 contracts, an all-time record. We remain ahead of where we were with our FMX UST platform, which today has approximately 40% market share. In our experience, achieving the first 1% market share is the hardest. We are increasingly excited about the progress we are seeing with our FMX futures exchange. FMX FX ADV increased by 40% to a fourth quarter record $15,500,000,000, driven by strong growth across spot FX and non-deliverable forward volumes. The benefits of having 10 world-class partners in FMX are demonstrated by ADV more than doubling since the completion of the FMX transaction. Portfolio Match ADV grew by 68%, driven by stronger U.S. and European credit activity, greater adoption of algorithmic trading, and larger average trade size. Our Portfolio Match business has seen tremendous growth since its launch, and today, we estimate it represents nearly 20% of the credit sweep market in the United States. Lucera, Fenics’ network business, providing critical real-time trading infrastructure to the capital markets, grew its revenues by 24.1%. This strong growth was driven by increased demand for Lucera's FX and rates solutions, continued international expansion, and onboarding of new clients. Lucera's client pipeline continues to expand and we plan to launch additional fixed income products in 2026. And with that, I would now like to turn the call over to Jason. Thank you, John, and hello, everyone. BGC generated record fourth quarter revenues of $756,400,000, reflecting growth across all of our geographies. EMEA revenue increased by 39.2%, Americas revenues increased by 25.7%, and Asia-Pacific revenues increased by 24.2%.

Turning to expenses.

Compensation and employee benefits under GAAP and for adjusted earnings increased by 71.8% and 40.1%, respectively. The increase in compensation and employee benefits under GAAP was related to charges due to the cost reduction program, the acquisition of OTC, higher commissionable revenues, loan forgiveness, and the weaker U.S. dollar. The increase in compensation and employee benefits for adjusted earnings was driven by OTC, higher commissionable revenues, and the weaker U.S. dollar. Charges related to the cost reduction program and loan forgiveness are excluded from adjusted earnings. Non-compensation expenses under GAAP and for adjusted earnings increased by 25.5% and 27.1%, respectively, primarily driven by the acquisition of OTC. Excluding OTC, non-compensation expenses under GAAP and for adjusted earnings increased by 13.5% and 14.7%, respectively. We completed the first phase of our cost reduction program during the fourth quarter, which will realize $25,000,000 of annualized cost savings in 2026. Further cost efficiencies are expected to be realized throughout the year.

Moving on to our record fourth quarter adjusted earnings.

Our pretax adjusted earnings grew by 24.5% to $161,300,000, representing a pretax margin of 21.3%. Excluding the impact of OTC, our pretax margin would have been 23.2%. And excluding both OTC and the weaker U.S. dollar, our pretax adjusted earnings margin would have been approximately 23.7%. Post-tax adjusted earnings increased by 21.1% to $149,600,000, resulting in a post-tax adjusted earnings per share of $0.31. Our adjusted EBITDA decreased by 0.8% to $190,600,000 due to charges related to the execution of the cost reduction program. GAAP income from operations before income taxes decreased 8% to $25,000,000. This included $54,800,000 of charges from the cost reduction program, the cash impact of which was $28,100,000.

Turning to share count.

BGC's fully diluted weighted average share count for adjusted earnings was 490,400,000 shares during the period, a 0.8% decrease compared to 2025 and a 1% decrease compared to a year ago. As of December 31, our liquidity was $979,100,000 compared with $897,800,000 as of year-end 2024. With that, I would like to turn the call back over to Sean to go over our first quarter outlook.

Thank you, Jason. I am pleased to provide the following guidance for 2026. We expect to generate revenues of between $860,000,000 and $920,000,000, as compared to $664,200,000 in 2025. The midpoint of our guidance would represent approximately 34% revenue growth. Excluding OTC, we expect our first quarter revenues to grow around 15% at the midpoint. We anticipate pretax adjusted earnings to be in the range of $202,000,000 to $222,000,000 versus $160,200,000 last year, which at the midpoint of guidance would represent over 32% earnings growth. We expect our adjusted earnings tax rate to be between 11% and 14% for the full year 2026. With that, operator, we would like to open the call for questions.

Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from the line of Patrick Malcolm Moley with Piper Sandler. Please proceed with your question.

Yes. Good morning. Thanks for taking the question. Wanted to ask about the first quarter guide. It came in much better than we were expecting, and it appears like the organic revenue growth is stepping up there. So I was hoping you could dissect that a little more for us. How much of the step-up in growth is driven by just a strong trading environment year-to-date versus maybe some more sustainable fundamental growth drivers across the business? Thanks.

Thanks, Patrick. Sean here. Look. I think as I said in the prepared remarks, we have grown our core revenue, if you like, our same-store revenue 13%, 12%, 15% each year. And in the implied guidance, it is 15% again. You will remember that we said with the introduction of interest rates, the market itself was regrowing again. And you have seen that for the past three years, and now you are seeing it in our guidance this time.

It is driven not just in ECS, but where we have gained market share, and I think we also have the benefit of becoming the number one player within that business. And then we have also had strong growth and strong market share gains due to the various hirings that we have done over the past year or so in both rates and in foreign exchange. And you have also seen across the board, you have seen that in FX and equities as well.

Okay. Great. Thanks for that. And then a follow-up. You sold KACE. Just wondering how you are thinking about the portfolio of businesses today within Fenics. What drove the decision to sell that business? Was it just opportunistic, or should we maybe expect future divestitures? Thanks.

Look. I think we have sold two businesses that were sitting within Fenics now. In the last year, they had revenues of around about $27,000,000, and we sold those for just under $165,000,000. And our view has always been the same, which is it is all about shareholder value. And if someone is prepared to pay something that is an appropriate value for our shareholders, then that is great. Both of those businesses were lower-growth businesses for us. I think they will do fantastically well in the hands of their new owners. And what it allows us to do is to focus on those higher-growth things that you mentioned within the Fenics portfolio. I mean, you saw, I think, in John’s prepared remarks, he said that Lucera grew 24% again this quarter. Our Portfolio Match business growing again at strong double digits. So the answer is we always remain open for if it is not getting the value within our company, but it is all about shareholder value.

Okay.

Thanks, Sean.

Thank you. Our next question comes from the line of Elias Noah Abboud with Bank of America. Please proceed with your question. Good morning. Thanks for taking the question.

I wanted to follow up on

Patrick’s energy segment question and still trying to unpack, I guess, what is structural from what is cyclical growth here. And to that end, could you maybe talk about the extent to which you are seeing new logo growth in the energy space? Or are there firms who maybe two years ago did not think it was necessary to hedge their energy exposure, but now with all of this volatility are revisiting that decision and maybe becoming clients of BGC Group, Inc’s ECS segment for the first time.

Hey. Morning, Eli. It is John. So, yes, the answer is that in the ECS business, there is a proliferation of new players in that asset class, both when you talk about hedging, what is real risk, and new players who are entering on the traditional buy side. So we are definitely seeing the benefit of that. Of course, there is some cyclical growth, but I think if you look at our market share and where I would say we are outperforming the market, those are based mainly on areas where we chose to invest and to enter into those markets over the last couple of years. So we are seeing across the board good performance in our ECS business. At the moment, you are seeing really great performance from the biggest asset classes that we have invested in, so oil, refined products, power, natural gas, and, of course, our shipping business. So the market environment is good, but I would say we continue to expand our client base and continue to gain market share.

Got it. And has your ECS market share yet exceeded the, I guess, the combined market share BGC Group, Inc and OTC Global as stand-alone entities? I know you had in the past couple of calls said there would be situations where maybe one plus one equals three as you go to integrate those businesses. Are there any proof points, any evidence yet of that that you can share with us?

So I am not—we do not think we are breaking it out, but what I will say is without question, the answer to that is yes. So the benefits of acquiring OTC have become evident in the products that I just mentioned. So our number one positioning in oil, in gas, in refined products has been augmented certainly in a greater way than just one plus one. And so we are seeing the benefits of that. And we are also seeing strong benefits where we have combined parts of the traditional BGC business with the existing OTC business to create, as you know, Elias, you and I have discussed historically, very, very strong global brands under the BGC umbrella.

Got it. And I think to some extent, the pushback that we hear from investors is does your over-the-counter, your block, like, bread and butter, does that grow structurally slower than listed energy volumes? So I think maybe it would be helpful, like, if we kind of take as a given that listed energy volumes grow, let us just say, 15% per year over the next five years, does BGC Group, Inc’s volumes grow more, the same, less? How should we think about the delta?

Hey, Eli. JP here. So the block business is a growing part. Right. And we have a very—as you know, 2025, the markets were very volatile. The beginning of 2026 is no different.

So one, volatility remains the best friend of BGC business.

Second, we are the largest listed broker in the world. And the block part, the OTC part of that business is growing, and BGC is benefiting largely. I would like to mention something. We are a client of multiple exchanges. As an example, we are one of the CME’s biggest clients. So we noticed exchanges’ share price are always up in very volatile days. We should not be different. We benefit from that extra business, and we are the client of the exchanges. So we feed them in a way every day. So we consider we definitely benefit from volatility and the extra blocking business.

Got it. And maybe for my last one here, I know we actually have not hit on FMX futures yet. So now that market share is picking up and you guys have some momentum, what is the timetable for recognizing some revenue related to FMX futures? I think there were some fee holidays maybe in the past couple of quarters. Is there any timeline for those rolling off? And then just a follow-up, any update on Treasury futures? I think open interest there is still de minimis, and maybe that has been on the back burner. When is that going to move to the front burner for you guys?

Yes. So the changes in the fee structure happened two years after the deal was signed. So that is kind of the beginning of this summer when you will see the change for the early adopters—change the fee structures. I think we have said before for the futures businesses, and in general comment, we will continue to consider where that stands to make sure that it is more than competitive in the marketplace. So that was the first part of your question, and the second part of your question was on Treasury futures. And Treasury futures will come on the back of success of SOFR, meaning that we are at 1%, and we do not take the 1% lightly. But we are still on that journey, and we believe very strongly that focusing on SOFR at the moment is the right thing to do, both for building that marketplace, but also in conjunction with daily conversations with our partners. That is how we make those decisions. So the launch of Treasury futures will follow shortly behind where we get to the end of our journey in onboarding and getting SOFR to where we need it to be. Got it. Thanks, guys. That is it for me. Thanks, Eli.

Thanks, Eli.

Thank you. Our next question comes from the line of Patrick Malcolm Moley with Piper Sandler. Please proceed with your question.

Yes. Thanks for taking the follow-up. I wanted to hit on something you said in your prepared remarks about launching additional fixed income products in 2026 within Lucera. Could you maybe just help us and get us a better sense for what those could be and how additive it could be to overall growth within Fenics.

Yes. Sure. So Lucera has got a dominant position in the FX market, as you would imagine, because that is where it started. They then rolled into rates, and you are seeing the benefits of Lucera’s fantastic position in that market and the service that they provide for clients, both in the robustness of what they do on the electronic side. And now they are moving into credit markets to bring that connectivity into an increasingly electronic world in credit. So hard to define in terms of a number because it is nascent. It is just starting. But one would guess that if they are successful in credit as they have been in the first two asset classes, that over a period of time, hopefully, it will represent a third of their revenue.

Okay.

Great. Thanks again, guys.

Thank you.

Thank you. And we have reached the end of the question-and-answer session. I would like to turn the floor back to Mr. Sean A. Windeatt for closing remarks.

Thank you very much. And just to say thanks for joining us today on our fourth quarter and full year 2025 conference call. Look forward to speaking to you soon. Have a great day.