BGC Group, Inc Q2 FY2025 earnings call

• Delivered historic results with record revenues of $784 million, 42% increase vs last year; excluding OTC, up 21%.
• Continues to gain market share in ECS and financial markets with strong growth across all asset classes and geographies; BGC is world's largest ECS broker.
• FMX had best ever quarter with record volumes and market share on UST and FX platforms.
• Total Fenics revenues grew 19%, Fenics Growth Platforms up 30% driven by FMX, portfolio match and Lucera.
• Launched cost reduction program post-acquisition, expected to be completed by year-end, delivering at least $25 million annualized savings through expense synergies to enhance profitability and margins.

BGC Group generated record quarterly revenues of $784 million, a 42% increase vs last year. Excluding OTC revenues grew by 21%. ECS revenues grew by 122.2% to $261.6 million (record), excluding OTC up 27%. Rates revenues up 20.8% to $200.6 million. Foreign exchange revenues up 21.9% to $108.5 million. Credit revenues up 8.5% to $75.3 million. Equities revenues up 43.8% to $73.9 million. Data network and post-trade revenues up 15.1% to $35.5 million, excluding Capitalab up over 20%. Fenics revenues grew by 19% to $162.9 million, Fenics Growth Platforms up 30% driven by FMX, portfolio match and Lucera. FMX had best ever quarter with record volumes and market share across FMX UST and FX platforms. EMEA revenues up 50.3%, Americas up 40.3%, Asia Pacific up 17.4%.

• Third quarter 2025 expected total revenues between $715 million and $765 million, midpoint representing ~32% revenue growth; excluding OTC, expected to grow ~12% at midpoint.
• Pretax adjusted earnings expected in range of $150 million to $165 million vs $126.7 million last year, midpoint representing ~24% earnings growth.
• Adjusted earnings tax rate expected to be between 10% and 12% for full year 2025.

• Expectations subject to change based on macroeconomic, social, political and other factors.
• Information contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ from expectations; see SEC filings for factors causing actual results to differ from forward-looking statements and other impact factors.

Q: Congrats on a strong quarter. Revenue growth, pretty impressive over 21% year-over-year organic. How to view the growth algorithm from here and margin trajectory?

A: Sean Windeatt said acquired OTC with low teens margin; cost reduction program to finish by year-end, $25 million annual savings to bridge gap between OTC's low teens margin and BGC's margin. John Abularrage added on SCMs and FCMs timeline.

Q: It seems like the ramp of the 2- and 5-year treasury features has been tracking a little bit slower than the ramp for SOFR back September. Any additional complexities or challenges of treasury futures?

A: John Abularrage said no additional impediments or speed bumps, U.S. treasury futures expected to follow success of SOFR; Elias Abboud's follow-up on FCMs connected and active trading, John Abularrage said can assume nearly all are there with open interest and no holdup, just growing forward.

Q: Sticking on FX business, voice portion outperformed electronic recently, long-term vision for higher electronic revenues. Explain recent trends?

A: Sean Windeatt said clients choose to trade voice or electronic; during significant growth period, clients opted more voice due to returning to normal volatility, but expect trend to go more electronic as market stabilizes