BGC Group Inc
For the period ended Jun 30, 2024. Filed Aug 8, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 8, 2024
BGC$10.48+0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-09.
0001628280-24-022251
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0001628280-24-035883
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 380 previous paragraphs and 429 current paragraphs.
238 unchanged; 103 reworded; 78 added; 33 removed; 6 previous and 10 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (78)
Current report
FMX Futures will compete in the world’s most valuable and widely traded market -- U.S. interest rate futures. FMX is scheduled to launch SOFR futures in September 2024 with U.S. treasury futures launching in early 2025.
Current report
FMX Futures will provide clients with significant capital savings through its clearing partnership with LCH. LCH is a fully approved CFTC Derivatives Clearing Organization and is the world’s largest clearer of interest rate swaps, with approximately 98 percent market share of cleared U.S. dollar interest rate swaps.1
Current report
FMX clients will receive cross-margin capital savings on both their FMX futures positions and the $225 billion 1 of LCH cleared interest rate swap collateral supporting $53.3 trillion of US dollar swaps cleared by LCH in the second quarter. SOFR futures are near-perfect offsets for interest rate swaps and FMX SOFR futures will produce enormous cross-margin efficiencies, against the much larger LCH collateral pool, to which its peer does not have access. FMX expects its cross-margin efficiencies to be many multiples of what is available at the competing offering today.
Current report
1 Source: Clarus Financial Technology. Cleared interest rate swap collateral data as of 3/29/2024.
Current report
•Lucera revenues grew by 16 percent — its 18th consecutive quarter of double-digit year-over-year revenue growth. Lucera continues to expand its customer base and deepen its existing customer agreements adding to its recurring revenue base.
Current report
•FMX UST produced record central limit order book market share of 30 percent for the second quarter, up from 28 percent last quarter, and 23 percent a year ago, according to Coalition Greenwich. FMX UST ADV improved by 37 percent versus the prior year period, achieving new record ADV of $47 billion for the second quarter. This translated to revenue growth of 34 percent.
Current report
•FMX FX average daily volumes improved by over 30 percent versus the prior year period on record ADV of $8.1 billion. FMX FX continues to grow faster than the overall market and is expected to significantly grow its market share in the enormous global foreign exchange market.
Current report
Fenics brokerage revenues increased by 8.5%, to $106.4 million, and by 6.4%, to $224.8 million, for the three and six months ended June 30, 2024, as compared to the prior year periods.
Current report
Tax Policy Changes
Current report
Recent Developments
Current report
ECS Volumes
Current report
Foreign Exchange Volumes and Volatility
Current report
•Rates increased $21.8 million, or 15.1%;
Current report
•ECS increased $19.1 million, or 19.3%;
Current report
•FX increased $11.4 million, or 14.7%;
Current report
•Credit increased $3.6 million, or 5.4%; and
Current report
•Equities decreased $6.0 million, or 10.4%.
Current report
For the six months ended June 30, 2024 compared to the six months ended June 30, 2023:
Current report
Total revenues increased $103.4 million, or 10.1%, to $1,129.4 million, largely due to growth of 9.2% in our brokerage revenues:
Current report
•ECS increased $47.9 million, or 25.4%,
Current report
•Rates increased $32.2 million, or 10.4%;
Current report
•FX increased $15.3 million, or 9.7%;
Current report
•Credit increased $1.6 million, or 1.0%; and
Current report
•Equities decreased $11.2 million, or 8.9%.
Current report
Our brokerage revenues from ECS increased by $19.1 million, or 19.3%, to $117.7 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, which was primarily driven by strong organic growth across the business.
Current report
Our FX revenues increased by $11.4 million, or 14.7%, to $88.9 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, which was primarily driven by emerging markets products and G10 options volumes.
Current report
Our Credit revenues increased by $3.6 million, or 5.4%, to $69.4 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, which was primarily driven by higher trading volumes across European, emerging market, and U.S. credit products, partially offset by lower Asian credit activity.
Current report
Our brokerage revenues from Equities decreased by $6.0 million, or 10.4%, to $51.4 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, which was primarily due to lower equity derivative trading volumes, partially offset by higher cash equity activity.
Current report
Occupancy and equipment expense increased by $0.5 million, or 1.2%, to $41.0 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.
Current report
Fees to related parties remained flat at $8.0 million for both the three months ended June 30, 2024 and June 30, 2023. Fees to related parties are primarily allocations paid to Cantor for administrative and support services.
Current report
Other expenses remained flat at $13.3 million for both the three months ended June 30, 2024 and 2023.
Current report
Other income (loss) increased by $2.8 million to a gain of $1.8 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, which was primarily driven by an increase in other recoveries for the three months ended June 30, 2024, and losses recognized on litigation resolutions in the three months ended June 30, 2023.
Current report
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Current report
Revenues
Current report
Brokerage Revenues
Current report
Total brokerage revenues increased by $85.7 million, or 9.2%, to $1,021.5 million for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. Commission revenues increased by $84.2 million, or 11.6%, to $810.3 million for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. Principal transactions revenues increased by $1.5 million, or 0.7%, to $211.3 million for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.
Current report
Our Rates revenues increased by $32.2 million, or 10.4%, to $341.1 million for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, reflecting higher volumes across interest rate derivatives.
Current report
Our FX revenues increased by $15.3 million, or 9.7%, to $173.0 million for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, which was primarily driven by emerging market products and G10 options volumes.
Current report
Our Credit revenues increased by $1.6 million, or 1.0%, to $157.0 million for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. This increase was primarily driven by higher trading volumes across European and emerging markets credit products, offset by lower Asian credit activity.
Current report
Our brokerage revenues from Equities decreased by $11.2 million, or 8.9%, to $114.3 million for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, which was primarily due to lower equity derivative trading volumes, partially offset by higher cash equity activity.
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Removed paragraphs (33)
Previous report
FMX, our electronic U.S. Treasury, Rates futures and Spot FX platform represents the unique opportunity to reshape the U.S. interest rate cash and futures market.
Previous report
FMX UST revenue increased by over 33.0% in the first quarter of 2024 compared to the first quarter of 2023, on a 21.0% improvement in average daily volume. FMX UST grew its central limit order book market share to 28.0% for the first quarter, up from 26.0% in the fourth quarter of 2023, and 21.0% a year ago.
Previous report
•FMX UST revenue increased by over 33% on a 21% improvement in average daily volume.
Previous report
•Lucera, our network business, revenues grew by 36%, primarily driven by new clients and expansion of existing client agreements. Lucera’s subscription based revenues have consistently grown by strong double-digits.
Previous report
•Capitalab, our post-trade business, generated revenue growth of 40%, driven by higher interest rate compression.
Previous report
Fenics brokerage revenues increased by 4.6% to $118.4 million for the three months ended March 31, 2024, as compared to the prior year period.
Previous report
Recent Developments / Tax Policy Changes
Previous report
Energy, Commodities, and Shipping Volumes
Previous report
FX Volumes and Volatility
Previous report
•Energy, Commodities, and Shipping increased $28.8 million, or 32.1%;
Previous report
•Rates increased $10.3 million, or 6.3%;
Previous report
•FX increased $3.9 million, or 4.8%;
Previous report
•Credit decreased $2.0 million, or 2.2%; and
Previous report
•Equities decreased $5.3 million, or 7.7%.
Previous report
Our FX revenues increased by $3.9 million, or 4.8%, to $84.0 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, which was primarily driven by higher volumes across emerging markets currencies and options.
Previous report
Our Credit revenues decreased by $2.0 million, or 2.2%, to $87.6 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily driven by lower trading volumes in Asian credit, partially offset by strong European credit activity.
Previous report
Our brokerage revenues from Equities decreased by $5.3 million, or 7.7%, to $62.9 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily driven by lower secondary trading volumes in equity derivative products, partially offset by higher cash equity volumes consistent with industry-wide volumes.
Previous report
The $85.7 million decrease in our Liquidity position from $701.4 million as of December 31, 2023 to $615.7 million as of March 31, 2024 was primarily related to share repurchases of $68.6 million, ordinary movements in working capital, capitalized expenditures, tax payments, dividends and distributions, and our continued investment in Fenics Growth Platforms, partially offset by borrowings of $275.0 million principal amount on the BGC Credit Agreement, net of repayment of the $240.0 million of borrowings on the Revolving Credit Agreement, and cash flows from operations.
Previous report
In April 2013, the Board and Audit Committee authorized management to enter into indemnification agreements with Cantor and its affiliates with respect to the provision of any guarantees provided by Cantor and its affiliates from time to time as required by regulators. These services may be provided from time to time at a reasonable and customary fee. In 2020, the introducing broker guarantees were moved from CF&Co to Mint Brokers for the firm’s stand alone and foreign NFA registered introducing brokers.
Previous report
Equity-Based and Other Compensation
Previous report
Discretionary Bonus: A portion of our compensation and employee benefits expense is comprised of discretionary bonuses, which may be paid in cash, equity, partnership awards or a combination thereof. We accrue expense in a period based on revenues in that period and on the expected combination of cash, equity and, prior to the Corporate Conversion, partnership units. Given the assumptions used in estimating discretionary bonuses, actual results may differ.
Previous report
Restricted Stock Units: We account for equity-based compensation awards using the guidance in ASC 718, Compensation—Stock Compensation. RSUs provided to certain employees are accounted for as equity awards, and in accordance with U.S. GAAP, we are required to record an expense for the portion of the RSUs that is ultimately expected to vest. Further, forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Because assumptions are used in estimating employee turnover and associated forfeiture rates, actual results may differ from our estimates under different assumptions or conditions.
Previous report
The fair value of RSU awards to employees is based on the market value of the BGC Class A common stock on the grant date. As part of employee compensation, we have granted both participating RSUs, which receive dividends, or non-participating RSUs. For non-participating RSUs, which do not receive dividend equivalents, we adjust the fair value of the RSUs for the present value of expected forgone dividends, which requires us to include an estimate of expected dividends as a valuation input. This grant-date fair value is amortized to expense ratably over the awards’ vesting periods.
Previous report
For participating RSUs where dividends are paid during the vesting period or accumulated and paid to the employee upon vesting, the grant-date fair value of the award should not be reduced. As such, we do not adjust the fair value of the RSUs for the present value of expected forgone dividends. This grant-date fair value is amortized to expense ratably over the awards’ vesting periods.
Previous report
For RSUs with graded vesting features, we have made an accounting policy election to recognize compensation cost on a straight-line basis. The amortization is reflected as part of “Equity-based compensation and allocations of net income to limited partnership units and FPUs” in our unaudited Condensed Consolidated Statements of Operations.
Previous report
Restricted Stock: Restricted stock provided to certain employees is accounted for as an equity award, and as per U.S. GAAP guidance, we are required to record an expense for the portion of the restricted stock that is ultimately expected to vest. We have granted restricted stock prior to the Corporate Conversion that is not subject to continued employment or service; however, transferability is subject to compliance with our and our affiliates’ customary noncompete obligations. Such shares of restricted stock are generally salable by partners in five to ten years. Because the restricted stock is not subject to continued employment or service, the grant-date fair value of the restricted stock is expensed on the date of grant. The non-cash equity-based compensation expense is reflected as part of “Equity-based compensation and allocations of net income to limited partnership units and FPUs” in our unaudited Condensed Consolidated Statements of Operations.
Previous report
As a result of the Corporate Conversion, the Company has also granted shares of unvested restricted stock, which are subject to continued employment or service with the Company or any affiliate or subsidiary of the company. The fair value of these restricted stock awards held by BGC employees is based on the market value of BGC Class A common stock on the grant date, adjusted as appropriate based upon the award’s ineligibility to receive dividends, as not all of these awards participate in receiving dividends, similar to the RSUs above. The grant-date fair value of the restricted stock is amortized to expense ratably over the awards’ expected vesting periods. The non-cash equity-based amortization expense is reflected as a component of “Equity-based compensation and allocations of net income to limited partnership units and FPUs” in our unaudited Condensed Consolidated Statements of Operations.
Previous report
Limited Partnership Units: Certain BGC employees held LPUs in BGC Holdings and hold LPUs in Newmark Holdings. Generally, such units received quarterly allocations of net income, which were cash distributed on a quarterly basis and generally contingent upon services being provided by the unit holders. In addition, Preferred Units were granted in connection with the grant of certain LPUs, such as PSUs, which may be granted exchangeability or redeemed in connection with the grant of shares of common stock to cover the withholding taxes owed by the unit holder upon such exchange or grant. This was an acceptable alternative to the common practice among public companies of issuing the gross amount of shares to employees, subject to cashless withholding of shares to pay applicable withholding taxes. Preferred Units were not entitled to participate in partnership distributions other than with respect to the Preferred Distribution. There were none of these LPUs or Preferred Units in BGC Holdings remaining after the Corporate Conversion was completed, while these LPUs and Preferred Units in Newmark Holdings held by BGC employees were not impacted by the Corporate Conversion. The quarterly allocations of net income on BGC Holdings LPUs held by BGC employees were reflected as a component of compensation expense under “Equity-based compensation and allocations of net income to limited partnership units and FPUs” in our unaudited Condensed Consolidated Statements of Operations prior to the Corporate Conversion, and quarterly allocations of net income on Newmark Holdings LPUs held by BGC employees, which were not impacted by the Corporate Conversion, are reflected as a component of compensation expense under “Equity-based compensation and allocations of net income to limited partnership units and FPUs” in our unaudited Condensed Consolidated Statements of Operations.
Previous report
Certain of these LPUs entitle the holders to receive post-termination payments equal to the notional amount, generally in four equal yearly installments after the holder’s termination. There were none of these LPUs in BGC Holdings remaining after the Corporate Conversion was completed, while these LPUs in Newmark Holdings held by BGC employees were not impacted by the Corporate Conversion. These LPUs are accounted for as post-termination liability awards under U.S. GAAP. Accordingly, we recognize a liability for these units on our unaudited Condensed Consolidated Statements of Financial Condition as part of “Accrued compensation” for the amortized portion of the post-termination payment amount, based on the current fair value of the expected future cash payout. We amortize the post-termination payment amount, less an expected forfeiture rate, over the vesting period, and record an expense for such awards based on the change in value at each reporting period in our unaudited Condensed Consolidated Statements of Operations as part of “Equity-based compensation and allocations of net income to limited partnership units and FPUs.”
Previous report
Certain LPUs were granted exchangeability into shares of BGC or Newmark Class A common stock or were redeemed in connection with the grant of BGC or Newmark Class A common stock issued; BGC Class A common stock was issued on a one-for-one basis, and Newmark Class A common stock is issued based on the number of LPUs exchanged or redeemed multiplied by the then-current Exchange Ratio. At the time exchangeability was granted or shares of BGC or Newmark Class A common stock were issued, we recognized an expense based on the fair value of the award on that grant date, which was included in “Equity-based compensation and allocations of net income to limited partnership units and FPUs” in our unaudited Condensed Consolidated Statements of Operations. There were no LPUs in BGC Holdings remaining after the Corporate Conversion was completed, while LPUs in Newmark Holdings held by BGC employees were not impacted by the Corporate Conversion. During the three months ended March 31, 2024 and 2023, we incurred equity-based compensation expense of $33.8 million and $52.0 million, respectively, related to LPUs and issuance of common stock.
Previous report
Prior to the Corporate Conversion, certain LPUs had a stated vesting schedule and did not receive quarterly allocations of net income. Compensation expense related to these LPUs was recognized over the stated service period, and these units generally vest between two and five years. During the three months ended March 31, 2023, we incurred equity-based compensation expense related to these LPUs of $21.4 million. This expense is included in “Equity-based compensation and allocations of net income to limited partnership units and FPUs” in our unaudited Condensed Consolidated Statements of Operations.
Previous report
Employee Loans: We have entered into various agreements with certain employees, and prior to the Corporate Conversion, partners whereby these individuals receive loans which may be either wholly or in part repaid from the distributions that the individuals receive on some or all of their LPUs in BGC Holdings and Newmark Holdings, prior to the Corporate Conversion, and by distributions that the individuals receive on some or all of their LPUs in Newmark Holdings and any dividends paid on participating RSUs and restricted stock awards, subsequent to the Corporate Conversion. Certain of these loans also may be either wholly or in part repaid from the proceeds of the sale of the BGC employees’ shares of BGC Class A common stock. In addition, certain loans may be forgiven over a period of time. The forgivable portion of these loans is recognized as compensation expense over the life of the loan. From time to time, we may also enter into agreements with employees to grant bonus and salary advances or other types of loans. These advances and loans are repayable in timeframes outlined in the underlying agreements. We review the loan balances each reporting period for collectability. If we determine that the collectability of a portion of the loan balances is not expected, we recognize a reserve against the loan balances. Actual collectability of loan balances may differ from our estimates.
Previous report
As of March 31, 2024 and December 31, 2023, the aggregate balance of employee loans, net of reserve, was $396.1 million and $367.8 million, respectively, and is included as “Loans, forgivable loans and other receivables from employees and partners, net” in our unaudited Condensed Consolidated Statements of Financial Condition. Compensation expense (benefit) for the above-mentioned employee loans for the three months ended March 31, 2024 and 2023 was $14.8 million and $13.9 million, respectively. The compensation expense related to these loans was included as part of “Compensation and employee benefits” in our unaudited Condensed Consolidated Statements of Operations.
Reworded paragraphs (103)
Previous wording
The objective of this Management’s Discussion and Analysis is to allow investors to view the Company from management’s perspective, considering items that have had and could have a material impact on future operations. This discussion summarizes the significant factors affecting our results of operations and financial condition as of and during the three months ended March 31, 2024 and 2023. This discussion is provided to increase the understanding of, and should be read in conjunction with, our unaudited Condensed Consolidated Financial Statements and the notes thereto included elsewhere in this report.
Current wording
The objective of this Management’s Discussion and Analysis is to allow investors to view the Company from management’s perspective, considering items that have had and could have a material impact on future operations. This discussion summarizes the significant factors affecting our results of operations and financial condition as of and during the three and six months ended June 30, 2024 and 2023. This discussion is provided to increase the understanding of, and should be read in conjunction with, our unaudited Condensed Consolidated Financial Statements and the notes thereto included elsewhere in this report.
Previous wording
BGC, through its affiliates, specializes in the trade execution of a broad range of products, including fixed income securities such as government bonds, corporate bonds, and other debt instruments, as well as related interest rate derivatives and credit derivatives. Additionally, we provide brokerage services across FX, Equities, Energy, Commodities, and Shipping, and Futures and Options. Our businesses also provide connectivity and network solutions, clearing, market data and network connectivity products, trade compression and other post-trade services, market data and related information services and other back-office services to a broad assortment of financial and non-financial institutions.
Current wording
BGC, through its affiliates, specializes in the trade execution of a broad range of products, including fixed income securities such as government bonds, corporate bonds, and other debt instruments, as well as related interest rate derivatives and credit derivatives. Additionally, we provide brokerage services across FX, Equities, ECS, and Futures and Options. Our businesses also provide connectivity and network solutions, clearing, market data and network connectivity products, trade compression and other post-trade services, market data and related information services and other back-office services to a broad assortment of financial and non-financial institutions.
Previous wording
As of March 31, 2024, we had 2,119 brokers, salespeople, managers, technology professionals and other front-office personnel across our businesses.
Current wording
As of June 30, 2024, we had 2,122 brokers, salespeople, managers, technology professionals and other front-office personnel across our businesses.
Previous wording
Deferral Plan for Employees of BGC Partners, Inc., Cantor Fitzgerald, L.P. and Their Affiliates, as amended and restated as the BGC Group, Inc. Deferral Plan for Employees of BGC Group, Inc., Cantor Fitzgerald, L.P. and Their Affiliates. The BGC Group Equity Plan provides for a maximum of 600 million shares of BGC Class A common stock that may be delivered or cash settled pursuant to the exercise or settlement of awards granted under the plan.
Current wording
In connection with the Corporate Conversion on July 1, 2023, BGC Group assumed and adopted: the Eighth Amended and Restated BGC Partners, Inc. Long-Term Incentive Plan, as amended and restated as the BGC Group, Inc. Long Term Incentive Plan; the BGC Partners Second Amended and Restated BGC Partners Incentive Bonus Compensation Plan, as amended and restated, and renamed the BGC Group, Inc. Incentive Bonus Compensation Plan; and the BGC Partners, Inc. Deferral Plan for Employees of BGC Partners, Inc., Cantor Fitzgerald, L.P. and Their Affiliates, as amended and restated as the BGC Group, Inc. Deferral Plan for Employees of BGC Group, Inc., Cantor Fitzgerald, L.P. and Their Affiliates. The BGC Group Equity Plan provides for a maximum of 600 million shares of BGC Class A common stock that may be delivered or cash settled pursuant to the exercise or settlement of awards granted under the plan.
Previous wording
FMX combines the world’s fastest growing cash U.S. Treasuries platform with its spot Foreign Exchange business, along with its U.S. interest rate futures exchange. FMX’s cash U.S. Treasuries platform, formerly known as Fenics UST, has been renamed FMX UST. FMX’s spot Foreign Exchange business, formerly known as Fenics FX, has been renamed FMX FX.
Current wording
FMX includes the world’s fastest growing cash U.S. Treasuries marketplace, FMX UST, and its spot Foreign Exchange platform, FMX FX, along with its fully approved U.S. interest rate futures exchange. FMX is challenging the CME’s leading position in U.S. interest rate futures, cash U.S. Treasuries and spot Foreign Exchange.
Previous wording
The FMX Equity Partners contributed $171.7 million between April 23, 2024 and April 24, 2024 into FMX in exchange for a 25.75% ownership interest at a post-money equity valuation of $666.7 million. The FMX Equity Partners received an additional 10.3% of equity ownership subject to driving trading volumes and meeting certain volume targets across the FMX ecosystem. FMX Futures Exchange is expected to launch in September 2024.
Current wording
The FMX Equity Partners contributed $171.7 million between April 23, 2024 and April 24, 2024 into FMX in exchange for a 25.75% ownership interest at a post-money equity valuation of $666.7 million. The FMX Equity Partners received an additional 10.3% of equity ownership subject to driving trading volumes and meeting certain volume targets across the FMX ecosystem.
Previous wording
For the purposes of this document and subsequent SEC filings, all of our higher margin, technology-driven businesses are referred to as Fenics. We categorize our Fenics businesses as Fenics Markets and Fenics Growth Platforms. Fenics Markets includes the fully electronic portion of BGC’s brokerage businesses, data, network and post-trade revenues that are unrelated to Fenics Growth Platforms, as well as Fenics Integrated revenues. Fenics Growth Platforms includes FMX UST, Fenics GO, Lucera, FMX FX, PortfolioMatch and other newer standalone platforms. Revenue generated from data, network and post-trade attributable to Fenics Growth Platforms are included within their related businesses.
Current wording
For the purposes of this document and subsequent SEC filings, all of our higher margin, technology-driven businesses are referred to as Fenics. We categorize our Fenics businesses as Fenics Markets and Fenics Growth Platforms. Fenics Markets includes the Fully Electronic portion of BGC’s brokerage businesses, data, network and post-trade revenues that are unrelated to Fenics Growth Platforms, as well as Fenics Integrated revenues. Fenics Growth Platforms includes FMX UST, Fenics GO, Lucera, FMX FX, PortfolioMatch and other newer standalone platforms. Revenues generated from data, network and post-trade attributable to Fenics Growth Platforms are included within their related businesses.
Previous wording
Revenues in our Fenics businesses increased 6.4%, to a record $149.3 million for the three months ended March 31, 2024, as compared to the prior year period.
Current wording
Revenues in our Fenics businesses increased 9.7%, to $137.3 million, and 8.0%, to $286.6 million, for the three and six months ended June 30, 2024, respectively, as compared to the prior year periods.
Previous wording
Within our Fenics businesses, Fenics Markets revenue grew 3.6% to $127.4 million in the first quarter of 2024 as compared to the prior year period. Fenics Markets growth was driven by higher electronic Rates and Credit volumes, along with strong Fenics Market Data subscription revenues.
Current wording
Within our Fenics businesses, Fenics Markets revenue grew 7.5%, to $115.1 million, in the second quarter of 2024 as compared to the prior year period. Fenics Markets growth was driven by strong electronic FX, Credit and Rates volumes, along with higher Fenics Market Data revenues. BGC's rapidly growing ECS business is expected to provide future electronic growth opportunities for our Fenics Markets business.
Previous wording
Fenics Growth Platforms revenue grew 26.2% to $21.9 million in the first quarter of 2024, as compared to the prior year period, primarily driven by FMX UST, PortfolioMatch, Lucera, and Capitalab. Collectively, our newer Fenics Growth Platform offerings are not yet fully up to scale, but continue to grow at a leading rate. Over time, we expect these new products and services to become profitable, high-margin businesses as their scale and revenues increase, all else equal.
Current wording
Fenics Growth Platforms revenue grew 22.4%, to $22.2 million, in the second quarter of 2024, as compared to the prior year period, primarily driven by PortfolioMatch, Lucera, and FMX. Collectively, our newer Fenics Growth Platform offerings are not yet fully up to scale, but continue to grow at a leading rate compared with other electronic trading platforms. Over time, we expect these new products and services to become profitable, high-margin businesses as their scale and revenues increase, all else equal.
Previous wording
We continue to invest in our Fenics Growth Platforms, and notable highlights for the first quarter of 2024 include:
Current wording
We continue to invest in our Fenics Growth Platforms, and notable highlights for the second quarter of 2024 include:
Previous wording
•PortfolioMatch more than doubled its U.S. credit volumes year-over-year. These record volumes drove revenues 87% higher. PortfolioMatch continues to onboard new accounts and increase its market share in its rapidly growing segment of the market.
Current wording
•PortfolioMatch more than doubled its U.S. credit volumes year-over-year and increased its European volumes by nearly five-fold.
Previous wording
Total revenues from our high-margin Data, network and post-trade business, which is predominately comprised of recurring revenue, increased by 13.9%, to $30.9 million, for the three months ended March 31, 2024, as compared to the prior year period.
Current wording
Total revenues from our high-margin Data, network and post-trade business, which is predominately comprised of recurring revenue, increased by 14.1%, to $30.8 million, and increased by 14.0%, to $61.7 million, for the three and six months ended June 30, 2024, respectively, as compared to the prior year periods.
Previous wording
Data, network and post-trade revenue growth for the first quarter of 2024 was driven by broad based revenue growth across Fenics Market Data, Lucera, and Capitalab.
Current wording
Data, network and post-trade revenue growth for the second quarter of 2024 was driven by broad based revenue growth across Fenics Market Data, Lucera, and Capitalab.
Previous wording
Fenics’ revenue growth was led by Fenics Rates, Credit and Data, network and post-trade businesses, and Fenics represented 25.8% of BGC’s overall revenue in the first quarter of 2024.
Current wording
Fenics’ revenue growth was led by Fenics’ FX, Credit, Rates and Data, network and post-trade businesses in the second quarter of 2024.
Previous wording
The trademarks/service marks and/or registered trademarks/service marks of BGC Group and/or its affiliates in the U.S. and/or other jurisdictions are Amerex, Aurel, Aurel BGC, Capitalab, Caventor, CBID, Conticap, CreditMatch, BGC, BGC Group, BGC Partners, BGC Trader, ELX, Euro Brokers, Fenics, Fenics.com, Fenics Markets Xchange, Fenics Digital, Fenics UST, Fenics FX, Fenics Repo, Fenics Direct, Fenics MID, Fenics MD, Fenics Market Data, Fenics GO, Fenics PortfolioMatch, FMX, FMX Futures, FMX Markets Xchange, FMX UST, FMX FX, FMX Repo, GFI, GFI Ginga, kACE2, Lake Securities, Latium Capital, LumeFX, LumeMarkets, Lucera, Martin Brokers, Maxcor, Matchbox, Mint, MIS Brokers, Perimeter Markets Inc., Poten & Partners, RP Martin, Tower Bridge, Sunrise Brokers, Swaptioniser and VolumeMatch.
Current wording
Amerex, Aurel, Aurel BGC, Capitalab, Caventor, CBID, Conticap, CreditMatch, BGC, BGC Group, BGC Partners, BGC Trader, ELX, Euro Brokers, Fenics, Fenics.com, Fenics Markets Xchange, Fenics Digital, Fenics UST, Fenics FX, Fenics Repo, Fenics Direct, Fenics MID, Fenics MD, Fenics Market Data, Fenics GO, Fenics PortfolioMatch, FMX, FMX Futures, FMX Markets Xchange, FMX UST, FMX FX, FMX Repo, GFI, GFI Ginga, kACE2, Lake Securities, Latium Capital, LumeFX, LumeMarkets, Lucera, Martin Brokers, Maxcor, Matchbox, Mint, MIS Brokers, Perimeter Markets Inc., Poten & Partners, RP Martin, Tower Bridge, Sunrise Brokers, Swaptioniser and VolumeMatch are among the trademarks/service marks and/or registered trademarks/service marks of BGC Group and/or its affiliates in the U.S. and/or other jurisdictions.
Previous wording
In February 2022, the U.S., U.K., EU, and other countries imposed sanctions on Russian counterparties, and as a result BGC has ceased trading with those clients. The Company derived less than 1% of total revenue from its Moscow branch and sanctioned Russian counterparties. During the three months ended March 31, 2024 and 2023, the Company reserved $2.0 million and $2.0 million, respectively, in connection with unsettled trades and receivables with sanctioned Russian entities.
Current wording
In February 2022, the U.S., U.K., EU, and other countries imposed sanctions on Russian counterparties, and as a result BGC has ceased trading with those clients. The Company derived less than 1% of total revenue from its Moscow branch and sanctioned Russian counterparties. During both the three and six months ended June 30, 2024 and 2023, the Company reserved $2.0 million and $4.0 million, respectively, in connection with unsettled trades and receivables with sanctioned Russian entities.
Previous wording
During the fourteen years between 2008 and 2022, BGC and the entire financial service industry’s trading volumes were constrained by low interest rates and quantitative easing. Manufactured zero and near-zero interest rates caused the breakdown and disappearance of the historic correlation between issuance and trading volume growth. The change in central bank monetary policies away from zero interest rates, following the highest inflation in decades, together with rising interest rates set the stage for a resurgence in secondary market trading volumes for rates, credit and foreign exchange. We believe the return of this strong positive correlation in the current macro trading environment, which has meaningful interest rates and issuance that is multiples above 2008 levels, positions BGC to benefit and drive its trading volumes, revenue and profitability higher for the foreseeable future.
Current wording
During the fourteen years between 2008 and 2022, BGC and the entire financial service industry’s trading volumes were constrained by low interest rates and quantitative easing. Manufactured zero and near-zero interest rates caused the breakdown and disappearance of the historic correlation between issuance and trading volume growth. The change in central bank monetary policies away from zero interest rates, following the highest inflation in decades, together with meaningful interest rates set the stage for a resurgence in secondary market trading volumes for rates, credit and foreign exchange. We believe the return of this strong positive correlation in the current macro trading environment, which has meaningful interest rates and issuance that is multiples above 2008 levels, positions BGC to benefit and drive its trading volumes, revenue and profitability higher for the foreseeable future.
Previous wording
On March 4, 2024, our company made the announcement that it would be joining the S&P SmallCap 600 Index, with the inclusion taking effect before trading commenced on March 18, 2024. The S&P SmallCap 600 is designed to track the performance of the small-cap sector of the U.S. stock market.
Current wording
On March 4, 2024, the Company announced that it would be joining the S&P SmallCap 600 Index, with the inclusion taking effect before trading commenced on March 18, 2024. The S&P SmallCap 600 is designed to track the performance of the small-cap sector of the U.S. stock market.
Previous wording
In addition to regulations in the U.S., legislators and regulators in Europe have crafted similar rules: MiFID II, which made sweeping changes to market infrastructure, European Market Infrastructure Regulation, which focused specifically on derivatives, and Capital Requirements Directive IV for prudential standards. Over the past few years, European policymakers have launched various reviews of post-financial crisis legislation, leading to legislative updates such as EMIR Regulatory Fitness and Performance and CRD V. In May 2019, the European Securities Market Authority produced a report on proposals to further enhance the harmonization and standardization of derivatives reporting under EMIR, known as EMIR Refit. These proposals will require significant changes to the content and format of trade and transaction reporting systems across the industry. The current go-live dates for these changes are April 29, 2024 for Europe and September 30, 2024 for the U.K. We remain on track to be in compliance with the reporting enhancements. Furthermore, they introduced a new prudential regime tailored specifically to investment firms such as our firm – the Investment Firm Review. As all these rules take effect, they will continue to alter the environment in which we operate. We note that various internal and external factors have made the EU more rigid in its regulatory approach to non-EU countries, which could impact the ease with which the global financial system is connected.
Current wording
In addition to regulations in the U.S., legislators and regulators in Europe have crafted similar rules: MiFID II, which made sweeping changes to market infrastructure, European Market Infrastructure Regulation, which focused specifically on derivatives, and Capital Requirements Directive IV for prudential standards. Over the past few years, European policymakers have launched various reviews of post-financial crisis legislation, leading to legislative updates such as EMIR Regulatory Fitness and Performance and CRD V. In May 2019, the European Securities Market Authority produced a report on proposals to further enhance the harmonization and standardization of derivatives reporting under EMIR, known as EMIR Refit. These proposals require significant changes to the content and format of trade and transaction reporting systems across the industry. The go-live date for these changes was April 29, 2024 for Europe and is September 30, 2024 for the U.K. We remain on track to be in compliance with the reporting enhancements. Furthermore, regulators have introduced a new prudential regime tailored specifically to investment firms such as our firm – the Investment Firm Review. As all these rules take effect, they will continue to alter the environment in which we operate. We note that various internal and external factors have made the EU more rigid in its regulatory approach to non-EU countries, which could impact the ease with which the global financial system is connected.
Previous wording
Rates volumes in particular are influenced by market volumes and, in certain instances, volatility. Historically low and negative interest rates, as well as central bank quantitative easing programs, across the globe significantly reduced the overall trading appetite for rates products. Such programs depressed rates volumes because they entail central banks buying government securities or other securities in the open market in an effort to promote increased lending and liquidity and bring down long-term interest rates. When central banks hold these instruments, they tend not to trade or hedge, thus lowering rates volumes across cash and derivatives markets industry-wide. Following the market dislocation and pandemic, major central banks such as the U.S. Federal Reserve, ECB, Bank of Japan, Bank of England, and Swiss National Bank restarted quantitative easing programs in 2020. Beginning in 2022 inflationary concerns have resulted in rising interest rates and tapering and/or unwinding of central bank asset purchases.
Current wording
Rates volumes in particular are influenced by market volumes and, in certain instances, volatility. Historically low and negative interest rates, as well as central bank quantitative easing programs, across the globe significantly reduced the overall trading appetite for rates products. Such programs depressed rates volumes because they entail central banks buying government securities or other securities in the open market in an effort to promote increased lending and liquidity and bring down long-term interest rates. When central banks hold these instruments, they tend not to trade or hedge, thus lowering rates volumes across cash and derivatives markets industry-wide. Following the market dislocation and pandemic, major central banks such as the U.S. Federal Reserve, ECB, Bank of Japan, Bank of England, and Swiss National Bank restarted quantitative easing programs in 2020. Beginning in 2022 inflationary concerns have resulted in rising interest rates and tapering and/or unwinding of central bank asset purchases. The return of interest rates has led to improved macro trading conditions which has benefited BGC. This improved backdrop is expected to support both BGC’s Fenics and Voice/Hybrid businesses for the foreseeable future.
Previous wording
During the three months ended March 31, 2024, industry volumes were generally higher across Rates, Credit and Energy, Commodities, and Shipping compared to the prior year period. Secondary trading volumes were mixed across FX, while volumes were generally lower across Equities compared to the prior year period. BGC’s brokerage revenues were up by 7.3% year-on-year in the quarter, driven by strong performance across Energy, Commodities, and Shipping, Rates, and Foreign Exchange.
Current wording
During the three months ended June 30, 2024, industry volumes were higher across Rates, ECS, Foreign Exchange, Credit, and Equities compared to the prior year period. BGC’s brokerage revenues were up by 11.3% year-on-year in the quarter, reflecting broad-based growth across all geographies and strong double-digit revenue growth across BGC’s three largest asset classes, Rates, ECS and Foreign Exchange.
Previous wording
Our Rates business is influenced by a number of factors, including global sovereign issuances, interest rates, central bank policies, secondary trading and the hedging of these sovereign debt instruments. The amount of global sovereign debt outstanding remains at historically high levels; the level of secondary trading and related hedging activity was generally higher during the first quarter of 2024 compared to the prior year period. According to Bloomberg and the Federal Reserve Bank of New York, the average daily volume of U.S. Government Securities was up 12% compared to the prior year period. Over the same time period, listed products on CME were down 4%, while interest rate swap volumes traded on SEF were up 24% compared to the first quarter of 2023, according to Clarus. In comparison, our overall Rates revenues were up 6.3%, as compared to a year earlier, to $175.1 million.
Current wording
Our Rates business is influenced by a number of factors, including global sovereign issuances, interest rates, central bank policies, secondary trading and the hedging of these sovereign debt instruments. The amount of global sovereign debt outstanding remains at historically high levels; the level of secondary trading and related hedging activity was higher during the second quarter of 2024 compared to the prior year period. According to Bloomberg and the Federal Reserve Bank of New York, the Primary Dealer average daily volume of U.S. Government Securities was up 15% compared to the prior year period. Over the same time period, listed products on CME were up 14%, while OTC interest rate derivative volumes traded on SEF were up 40% compared to the second quarter of 2023, according to Clarus Financial Technology. In comparison, our overall Rates revenues were up 15.1%, as compared to a year earlier, to $166.0 million.
Previous wording
Overall, analysts and economists expect the absolute level of sovereign debt outstanding to remain at elevated levels for the foreseeable future as governments finance their future deficits and roll over their sizable existing debt. Additionally, yields on government bonds have steadily increased over the course of 2022 and 2023, which has given rise to increased volatility and higher demand to hedge interest rate exposure. The tapering and/or unwinding of asset purchases by central banks and, interest rate hikes, along with elevated levels of government debt issuance, are expected to provide tailwinds to our Rates business.
Current wording
Overall, analysts and economists expect the absolute level of sovereign debt outstanding to remain at elevated levels for the foreseeable future as governments finance their future deficits and roll over their sizable existing debt. Additionally, yields on government bonds have steadily increased since 2022, which gave rise to increased volatility and higher demand to hedge interest rate exposure. Expectations around potential future rate cuts by major Central Banks has also given rise to higher levels of interest rate trading activity through the first half of 2024. The tapering and/or unwinding of asset purchases by central banks and, meaningful interest rates, along with elevated levels of government debt issuance, are expected to provide continued tailwinds to our Rates business.
Previous wording
Energy, Commodities, and Shipping volumes were higher during the first quarter of 2024 compared to the prior year period. CME and ICE energy futures and options volumes were up 16% and 27%, respectively, compared to the prior year period. In comparison, BGC’s Energy, Commodities, and Shipping revenues increased 32.1%, compared to the prior year period, to $118.5 million.
Current wording
ECS volumes were higher during the second quarter of 2024 compared to the prior year period. CME and ICE energy futures and options volumes were up 16% and 31%, respectively, compared to the prior year period. In comparison, BGC’s ECS revenues increased 19.3%, compared to the prior year period, to $117.7 million.
Previous wording
Global FX volumes were mixed during the first quarter of 2024. Volumes for CME EBS spot FX was down 19%, while Euronext FX was up 18%, during the quarter compared to the prior year period. In comparison, our overall FX revenues increased by 4.8%, compared to the prior year period, to $84.0 million.
Current wording
Global FX volumes were higher during the second quarter of 2024. Volumes for CME EBS spot FX was up 5%, while Euronext FX was up 27%, during the quarter compared to the prior year period. In comparison, our overall FX revenues increased by 14.7%, compared to the prior year period, to $88.9 million.
Previous wording
Our Credit business is impacted by the level of global corporate bond issuance, and interest rates. Credit volumes were generally higher during the first quarter of 2024 compared to the prior year period. FINRA TRACE average daily volume for U.S. Investment Grade was up 19% and U.S. High Yield was up 9% according to Bloomberg and the Federal Reserve Bank of New York, respectively. In comparison, our overall Credit revenues decreased by 2.2%, compared to the prior year period, to $87.6 million.
Current wording
Our Credit business is impacted by the level of global corporate bond issuance, and interest rates. Credit volumes were higher during the second quarter of 2024 compared to the prior year period. FINRA TRACE average daily volume for U.S. Investment Grade was up 24% and U.S. High Yield was up 19% according to Bloomberg and the Federal Reserve Bank of New York, respectively. In comparison, our overall Credit revenues increased by 5.4%, compared to the prior year period, to $69.4 million.
Previous wording
Global equity volumes were generally lower during the first quarter of 2024 compared to the prior year period. According to the Securities Industry and Financial Markets Association, or SIFMA, the average daily volume of U.S. cash equities traded was flat as compared to a year earlier. Over the same timeframe, Eurex average daily volumes of equity and equity index derivatives were down 19% while Euronext equity derivative index volumes were down 18%. However, according to the OCC, the average daily volume of U.S. options was up 3%. BGC’s equity business primarily consists of equity derivatives, particularly European equity derivatives. Our overall revenues from Equities decreased by 7.7%, compared to the prior year period, to $62.9 million.
Current wording
Global equity volumes were generally higher during the second quarter of 2024 compared to the prior year period. According to the Securities Industry and Financial Markets Association, or SIFMA, the average daily volume of U.S. cash equities traded was up 9% as compared to a year earlier. Over the same timeframe, Eurex average daily volumes of equity and equity index derivatives were up 9%, Euronext equity derivative index volumes were up 11%, and according to the OCC, the average daily volume of U.S. options was up 7%. BGC’s equity business primarily consists of equity derivatives, particularly European equity derivatives. Our overall revenues from Equities decreased by 10.4%, compared to the prior year period, to $51.4 million.
Previous wording
See “Regulation” in Part I, Item 1 of our Annual Report on Form 10-K for additional information related to our regulatory environment.
Current wording
See “Regulation” in Part I, Item 1 of our Annual Report on Form 10-K for the year ended December 31, 2023 for additional information related to our regulatory environment.
Previous wording
Key drivers of our revenue are front-office producer headcount and average revenue per producer. We believe that our strong technology platform and unique compensation structure have enabled us to use both acquisitions and recruiting to uniquely position us to be able out perform our peer group.
Current wording
Key drivers of our revenue are front-office producer headcount and average revenue per producer. We believe that our strong technology platform and unique compensation structure have enabled us to use both acquisitions and recruiting to uniquely position us to be able to outperform our peer group.
Previous wording
As of March 31, 2024, our front-office headcount was 2,119 brokers, salespeople, managers, technology professionals and other front-office personnel, up 5.3% from 2,012 a year ago. Compared to the prior year, average revenue per front-office employee for the three months ended March 31, 2024, increased by 1.3% to $0.3 million.
Current wording
As of June 30, 2024, our front-office headcount was 2,122 brokers, salespeople, managers, technology professionals and other front-office personnel, up 4.7% from 2,024 a year ago. Compared to the prior year, average revenue per front-office employee for the three months ended June 30, 2024, increased by 6.0%, to $0.2 million.
Previous wording
Total revenues increased $45.7 million compared to the prior year period, or 8.6%, to $578.6 million, largely due to growth of 7.3% in our brokerage revenues, driven by strong growth across most of our asset classes:
Current wording
Total revenues increased $57.7 million compared to the prior year period, or 11.7%, to $550.8 million, largely due to growth of 11.3% in our brokerage revenues, driven by strong growth across most of our asset classes:
Previous wording
Total expenses increased $48.1 million, or 9.6%, to $548.1 million. There was a $38.3 million increase in total compensation expenses primarily driven by higher commission revenues on variable compensation and an increase in equity-based compensation. The $9.8 million increase in non-compensation expenses was primarily driven by an increase in Interest expense related to the BGC Partners 8.000% Senior Notes issued on May 24, 2023 and borrowings on both the Revolving Credit Agreement and BGC Credit Agreement. These higher interest expenses were partially offset by lower interest due to the repayment in full of the BGC Partners 5.375% Senior Notes on July 24, 2023.
Current wording
Total expenses decreased $25.6 million, or 4.9%, to $500.2 million. There was a $31.8 million decrease in total compensation expenses primarily driven by a decrease in equity-based compensation, partially offset by higher commission revenues on variable compensation. The $6.2 million increase in non-compensation expenses was primarily driven by increases in Interest expense related to the BGC Partners 8.000% Senior Notes issued on May 24, 2023, the BGC Group 6.600% Senior Notes issued June 10, 2024, and borrowings on the Revolving Credit Agreement. These higher interest expenses were partially offset by lower interest due to the repayment in full of the BGC Partners 5.375% Senior Notes on July 24, 2023.
Previous wording
Income from operations before income taxes was $71.1 million compared to $33.2 million in the prior year period.
Current wording
Income from operations before income taxes of $126.3 million compared to $2.0 million for the same period in the prior year.
Previous wording
In addition, there was an increase of $4.4 million in Interest and dividend income, primarily driven by income earned on money market funds. Further, there was an increase of $3.8 million in Data, network and post-trade revenues, primarily driven by strong revenue growth across Fenics Market Data, our Lucera network business and our Capitalab post-trade business, as a result of expanding both our client base and our offerings.
Current wording
In addition, there was an increase of $7.6 million in Data, network and post-trade revenues, primarily driven by strong revenue growth across Fenics Market Data, our Lucera network business and our Capitalab post-trade business, as a result of expanding both our client base and our offerings. Furthermore, there was an increase of $8.2 million in Interest and dividend income, primarily driven by income earned on money market funds and employee loans.
Previous wording
Total other income (losses), net increased $40.2 million, to $40.6 million, largely driven by a $36.6 million unrealized gain recorded in the three months ended March 31, 2024 related to fair value adjustments on investments carried under the measurement alternative.
Current wording
Total other income (losses), net increased $43.4 million, to $45.1 million, which was largely driven by a $36.6 million unrealized gain recorded in the six months ended June 30, 2024 related to fair value adjustments on investments carried under the measurement alternative.
Previous wording
Total brokerage revenues increased by $35.8 million, or 7.3%, to $528.0 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. Commission revenues increased by $37.9 million, or 10.0%, to $415.2 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. Principal transactions revenues decreased by $2.1 million, or 1.8%, to $112.8 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.
Current wording
Total brokerage revenues increased by $49.9 million, or 11.3%, to $493.5 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. Commission revenues increased by $46.4 million, or 13.3%, to $395.1 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. Principal transactions revenues increased by $3.6 million, or 3.7%, to $98.4 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.
Previous wording
Our brokerage revenues from Rates increased by $10.3 million, or 6.3%, to $175.1 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, reflecting strong growth across interest rate derivatives, government bonds, and emerging market rates products.
Current wording
Our brokerage revenues from Rates increased by $21.8 million, or 15.1%, to $166.0 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, reflecting higher volumes across interest rate derivatives, including our Euro, U.S. Dollar and new Yen rates businesses.
Previous wording
Fees from related parties increased by $0.5 million, or 11.7%, to $4.4 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. This was primarily driven by an increase in revenues in connection with services provided to Cantor.
Current wording
Fees from related parties increased by $0.6 million, or 14.3%, to $4.6 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. This was primarily driven by an increase in revenues in connection with services provided to Cantor.
Previous wording
Data, network and post-trade revenues increased by $3.8 million, or 13.9%, to $30.9 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. This increase was primarily driven by strong revenue growth across Fenics Market Data, Lucera, our network business and Capitalab, our post-trade business, as a result of expanding both our client base and our offerings.
Current wording
Data, network and post-trade revenues increased by $3.8 million, or 14.1%, to $30.8 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. This increase was primarily driven by strong revenue growth across Fenics Market Data, Lucera, our network business and Capitalab, our post-trade business, as a result of expanding both our client base and our offerings.
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Rearranged current paragraphs (10)
Current report — wording carried from elsewhere
Income from operations before income taxes was $55.2 million compared to loss from operations before income taxes of $31.3 million in the prior year period.
Current report — wording carried from elsewhere
In addition, there was an increase of $3.8 million in Data, network and post-trade revenues, primarily driven by broad-based revenue growth across Fenics Market Data, our Lucera network business and our Capitalab post-trade business, as a result of expanding both our client base and our offerings. Furthermore, there was an increase of $3.8 million in Interest and dividend income, primarily driven by income earned on money market funds. The increase in BGC revenues also reflects broad-based growth across all geographies - EMEA, Americas, and APAC grew by 14.4%, 9.5%, and 7.9%, respectively.
Current report — wording carried from elsewhere
Total expenses increased $22.5 million, or 2.2%, to $1,048.2 million. There was a $6.5 million increase in total compensation expenses, which was primarily driven by higher commission revenues on variable compensation, and an increase in headcount. These higher compensation expenses were partially offset by a $45.7 million decrease in equity-based compensation, which was primarily a result of a $60.9 million charge for the redemption of certain non-exchangeable limited partnership units in connection with the issuance of shares of BGC Group Class A common stock and the accompanying tax payments related to the Corporate Conversion in the six months ended June 30, 2023. The $16.0 million increase in non-compensation expenses was primarily driven by increases in Interest expense related to the BGC Partners 8.000% Senior Notes issued on May 24, 2023, the BGC Group 6.600% Senior Notes issued June 10, 2024, and borrowings on both the Revolving Credit Agreement and BGC Credit Agreement. These higher interest expenses were partially offset by lower interest due to the repayment in full of the BGC Partners 5.375% Senior Notes on July 24, 2023.
Current report — wording carried from elsewhere
Equity-Based Compensation and Allocations of Net Income to Limited Partnership Units and FPUs
Current report — wording carried from elsewhere
Gains (Losses) on Equity Method Investments
Current report — wording carried from elsewhere
Provision (benefit) for income taxes increased by $37.1 million, to $40.0 million for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. This increase was primarily driven by an increase in pretax earnings and a change in the geographical and business mix of earnings, which can impact our consolidated effective tax rate from period-to-period.
Current report — wording carried from elsewhere
Net Income (Loss) Attributable to Noncontrolling Interest in Subsidiaries
Current report — wording carried from elsewhere
Net income (loss) attributable to noncontrolling interest in subsidiaries decreased by $0.5 million, or 161.8%, to a loss of $0.8 million for the six months ended June 30, 2024 as compared to a loss of $0.3 million for the six months ended June 30, 2023, primarily due to no longer reflecting net income (loss) attributable to noncontrolling interest in subsidiaries related to BGC Holdings as a result of the Corporate Conversion.
Current report — wording carried from elsewhere
Between April 23, 2024 and April 24, 2024, the FMX Equity Partners contributed $171.7 million into FMX.
Current report — wording carried from elsewhere
During the three months ended June 30, 2024 and 2023, the Company was charged $0.9 million and $0.5 million, respectively, by Cantor for the cash or other collateral posted by Cantor on BGC’s behalf. During the six months ended June 30, 2024 and 2023, the Company was charged $1.9 million and $0.8 million, respectively, by Cantor for the cash or other collateral posted by Cantor on BGC’s behalf. Cantor had not requested any cash or other property from the Company as collateral as of June 30, 2024.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
In connection with the Corporate Conversion on July 1, 2023, BGC Group assumed and adopted: the Eighth Amended and Restated BGC Partners, Inc. Long-Term Incentive Plan, as amended and restated as the BGC Group, Inc. Long Term Incentive Plan; the BGC Partners Second Amended and Restated BGC Partners Incentive Bonus Compensation Plan, as amended and restated, and renamed the BGC Group, Inc. Incentive Bonus Compensation Plan; and the BGC Partners, Inc.
Previous report — wording carried elsewhere
The return of interest rates has led to improved macro trading conditions which has benefited BGC. This improved backdrop is expected to support both BGC’s Fenics and Voice/Hybrid businesses for the foreseeable future.
Previous report — wording carried elsewhere
On April 1, 2024, the Company borrowed $275.0 million under the Revolving Credit Agreement, and used the proceeds from such borrowing, along with cash on hand, to repay the principal and interest related to all of the $275.0 million of borrowings outstanding under the BGC Credit Agreement. See Note 13—“Related Party Transactions” and Note 17—“Notes Payable and Other Borrowings” to our unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for information regarding our BGC Credit Agreement with Cantor.
Previous report — wording carried elsewhere
Discussion of the three months ended March 31, 2024
Previous report — wording carried elsewhere
Discussion of the three months ended March 31, 2023
Previous report — wording carried elsewhere
(Korea) Limited and GFI Korea Money Brokerage Limited; in Philippines, GFI Group (Philippines) Inc. and in Brazil, BGC Liquidez Distribuidora De Titulos E Valores Mobiliarios Ltda., all have net capital requirements imposed upon them by local regulators.