BGC Group 2026 Q2 Earnings Call

This morning we issued BGC's financial results, which can be found at ir.bgcg.com. Any historical results provided on today's call compare only the current period with the prior year period, unless otherwise specified. All references on today's call to record or all-time high results are to BGC standalone financial results, excluding Newmark, prior to the spin-off in November 2018. We'll be referring to our results on a non-GAAP basis, which include the terms adjusted EBITDA and adjusted earnings. Please refer to today's investor materials on our website for additional details on our financial results, relevant economic and industry statistics, and for the complete and updated definitions of any non-GAAP terms, reconciliations of these items to corresponding GAAP results, and how, when, and why management uses them. 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 the 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 documents. With that, I am now happy to turn the call over to Sean Windeatt, Co-Chief Executive Officer of BGC Group.

Thank you, Jason. Good morning, and welcome to our second quarter 2026 conference call. With me today are my fellow Co-Chief Executive Officers, John Abularrage and JP Aubin, along with our Chief Financial Officer, Jason Hauf. We produced revenues of $846 million, a second quarter record, up 8% versus last year. This growth was broad-based across every asset class, reflecting the durability, diversification, and the strength of our global platform. Our revenues for the first half of 2026 were up more than 24% to $1.8 billion, the highest ever through the first two quarters of the year. Since 2022 and the return of interest rates, we have grown our revenues double digits every year since. Our half-year revenues in 2026 were greater than our full-year revenues of just three years ago. FMX once again saw market share gains across its cash, U.S. Treasury, and futures businesses. FMX U.S.

Treasury market share grew to 42%, a new all-time high. FMX SOFR and U.S. Treasury futures also reached new market share highs for the month of June. With that, I'd like to turn the call over to John to discuss our exciting new partnership with Fanatics and the quarterly results of the business in more detail.

Thank you, Sean. Earlier this week, we announced our partnership with Fanatics, a global sports platform, to build a prediction market ecosystem that serves both retail and institutional participants, combining BGC's extensive client network and Fanatics' database of over 100 million customers. Together, BGC and Fanatics will also deliver unique market data in this innovative and rapidly growing asset class. This partnership brings together BGC's established market data and analytics capabilities to enable the development of new data products. Prediction markets are a gauge of sentiment which predict outcomes as opposed to our traditional data, which reflects past events. Merging these two together will allow us to offer new and exciting data sets to our clients. As part of this agreement, BGC will receive upfront consideration and a performance-based earn-out, as well as the license to the exchange's data.

This is entirely separate from FMX's CFTC-registered DCM, which BGC continues to own and control. Similar to the sale of kACE and Capitalab, this transaction once again underscores the tremendous value of the assets that BGC owns, assets that we believe are worth significantly more than what is currently reflected in the market. Now turning to our second quarter results. We delivered record second-quarter revenues of $845.5 million, a 7.8% increase versus last year. Our total brokerage revenues grew by 7.2% to $771.4 million, driven by growth across all asset classes. ECS revenues grew by 5.3% to $275.5 million, driven by strong growth across our shipping, environmental, and commodities businesses, partially offset by lower oil and refined product volumes due to disruptions caused by the Strait of Hormuz closure.

Additionally, we announced the launch of BGC Compute Infrastructure Markets during the second quarter, a logical extension of our existing power business. This is a new business focused on developing the secondary market for compute and memory capacity. Rates revenues increased by 10.6% to $221.9 million, reflecting higher volumes across all major rates products during the quarter. Foreign exchange revenues were up 9.4% to $118.7 million, primarily due to strong volume growth in emerging market and G10 products and precious metals. Credit revenues increased by 5.4% to $79.3 million, driven by PortfolioMatch, along with higher European and emerging market credit volumes. Equities grew by 2.8% to $76 million, reflecting strong U.S. equity volumes, partially offset by lower European equity derivative activity. Data, network, and post-trade revenues grew by 18.6% to $36.7 million, excluding kACE, which we sold in the fourth quarter of 2025. Now turning to Fenics. FENICS revenues increased by 14.3% to a second-quarter record of $186.2 million.

FENICS Markets generated revenues of $152.8 million, an increase of 16.5%, excluding kACE. This growth was driven by higher electronic trading volumes across rates, credit, foreign exchange, and increased FENICS market data revenues. FENICS Growth Platforms revenues grew to $33.4 million, a 22.9% increase, primarily driven by FMX, PortfolioMatch, and Lucera. FMX UST generated record second-quarter ADV of $79.4 billion, 17% higher compared to last year. FMX UST continued to grow its market share to 42% in the second quarter, up from 41% last quarter and 35% a year ago. FMX Futures Exchange delivered another quarter of significant growth, with second-quarter ADV of approximately 54,000 contracts, more than sixteenfold higher than a year ago. SOFR ADV rebounded strongly in June following reduced Iran-driven volatility, achieving a monthly record of more than 59,000 contracts.

U.S. Treasury futures continued to scale in the second quarter, averaging more than 15,000 contracts per day, and total open interest ended at more than 140,000 contracts, up from approximately 22,000 contracts a year ago. As you know, we currently list only the two and five-year U.S. Treasury future contracts, but we will be listing the remaining tenors across the full curve on August 3, 2026, supporting further growth in trading volumes and open interest on the exchange. FMX FX average daily volumes increased by 16% to $18 billion, driven by continued growth across spot FX and NDF volumes, resulting in continued market share gains. PortfolioMatch ADV grew 82% to a new quarterly record of $431 million, significantly outpacing the broader credit market. Lucera, FENICS network business providing real-time trading infrastructure to the capital markets, grew its revenues by 15%.

With that, I would now like to turn the call over to Jason.

Thank you, John, and hello, everyone. BGC generated revenues of $845.5 million during the second quarter. EMEA and Americas grew revenues by 11.2% and 6.1% respectively, while Asia-Pacific revenues decreased by 2.9%. Turning to expenses. Compensation and employee benefits for adjusted earnings increased by 7.7%. The increase was related to higher commissionable revenues during the period. Non-compensation expenses for adjusted earnings increased by 5.2%, primarily due to increased selling and promotion, along with commissions and floor brokerage expenses related to higher client activity. Moving on to our record second-quarter adjusted earnings. Our pre-tax adjusted earnings grew by 11.1% to $192.9 million, representing a pre-tax incremental margin of 31.3%.

Post-tax adjusted earnings increased by 11.2% to $171 million, resulting in a post-tax adjusted earnings per share of $0.35, 12.9% higher versus last year. Adjusted EBITDA increased by 7.2% to $228.7 million. Turning to share count. BGC's fully diluted weighted average share count for adjusted earnings was 495.4 million shares during the period, approximately flat compared to last quarter, and a 1% decrease compared to last year. As of June 30th, our liquidity was $861.4 million, compared with $979.1 million as of year-end 2025. We recently received upgraded credit ratings from both Kroll and JCRA to BBB+ and A- respectively, due to the continued strong performance of our business. With that, I'd like to turn the call back to Sean to go over our third quarter outlook.

Thank you, Jason. I'm pleased to provide the following guidance for the third quarter of 2026. We expect to generate revenues of between $775 and $835 million, compared to $736.8 million in the third quarter of 2025, which at the midpoint of our guidance would represent just over 9% revenue growth for the third quarter and 19% revenue growth for the first nine months of the year. We anticipate pre-tax adjusted earnings to be in the range of $172 million-$190 million versus $155.1 million last year, which, at the midpoint of guidance, would represent 17% earnings growth for the third quarter and 24% earnings growth for the first nine months of the year. We expect our adjusted earnings tax rate to be between 11% and 14% for the full year 2026.