BGC Group (BGC) Q3 2026 Earnings Call Transcript

DATE

Thursday, Nov. 5, 2026

CALL PARTICIPANTS

• Head of Investor Relations - Jason Chryssicas
• Co-Chief Executive Officer - John Abularrage
• Co-Chief Executive Officer - Sean Windeatt
• Chief Financial Officer - Jason Hauf
• Co-Chief Executive Officer - JP Aubin

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TAKEAWAYS

• Revenue -- $832.6 million, increasing 13% year over year driven by double-digit growth in ECS, rates, foreign exchange, and equities.
• Post-tax Adjusted Earnings -- $165.9 million, or $0.34 per share, representing a 17.2% increase from $0.29 per share in the prior year.
• Adjusted EBITDA -- $249.5 million, growing 48.9% year over year.
• ECS Revenue -- $287.1 million, a 18.8% increase driven by shipping, environmental, and crude oil businesses.
• Rates Revenue -- $219.6 million, rising 12.4% due to higher volumes across G10 government bonds, inflation products, and emerging market rates.
• Foreign Exchange Revenue -- $121.5 million, up 13.9% primarily due to volume growth in emerging markets and G10 forwards.
• Equities Revenue -- $77.3 million, a 28% increase reflecting growth across U.S. and European equities and private markets.
• Credit Revenue -- $67.4 million, decreasing 2.5% reflecting lower emerging market and European credit volumes.
• Fenics Revenue -- $181.3 million, representing a third-quarter record and a 13.3% increase.
• Fenics Growth Platforms Revenue -- $36.2 million, growing 39.8% driven by the expansion of FMX, PortfolioMatch, and Lucera.
• FMX UST ADV -- $83 billion, a 40% increase that outpaced primary dealer Treasury volume growth.
• FMX Futures Exchange ADV -- 80,000 contracts, nearly sevenfold higher than the prior year following the August listing of the full U.S. Treasury futures curve.
• FMX FX ADV -- $18.7 billion, increasing 43% driven by gains in spot foreign exchange and non-deliverable forwards.
• PortfolioMatch ADV -- $419 million, a third-quarter record and a 34% increase.
• Lucera Revenue -- Grew 28% year over year, driven by foreign exchange and fixed income infrastructure offerings.
• Data, Network, and Post-trade Revenue -- $36.1 million, a 21.2% increase when excluding the sold kACE business.
• Q4 Revenue Guidance -- $805 million to $865 million, representing 10% growth at the midpoint.
• Q4 Pre-tax Adjusted Earnings Guidance -- $178 million to $196 million.
• Liquidity -- $917.3 million as of Sept. 30, 2026, compared to $979.1 million at year-end 2025.
• Fully Diluted Share Count -- 492.2 million shares for Adjusted Earnings, a 0.6% reduction from the prior quarter.
• Interest and Other Revenue -- $23.6 million, a 19.7% decrease reflecting the wind-down of a noncore logistics business.
• Adjusted Earnings Tax Rate -- Expected to be between 11% and 14% for the full year 2026.

SUMMARY

BGC Group, Inc. (NASDAQ:BGC) reported record third-quarter revenue and earnings, supported by double-digit growth across most brokerage segments and the ongoing expansion of its electronic platforms. Management highlighted the rapid scaling of the FMX platform, particularly in Treasury futures following the August listing of the full curve, and reported a significant increase in market share. The company executed its first fully automated institutional trade using artificial intelligence, signaling a broader strategy to integrate AI across all asset classes. Financial results were further bolstered by diverse energy and shipping businesses, which offset slight volume declines in credit and refined products. The company also announced a leadership transition and confirmed its 2026 guidance, expecting continued top-line and earnings growth through the end of the year.

• The company completed its first fully AI-brokered institutional trade in listed equity derivatives, managing the workflow from price discovery through execution.
• Management identified compute derivatives as a nascent market and confirmed it is working with hyperscalers and neoclouds to develop connectivity and products for this asset class.
• JP Aubin will transition to Vice Chairman at year-end, stating, "I'm certainly not retiring, as I'm sure you saw from the filing earlier this week."
• FMX Treasury central limit order book market share reached 42% in the third quarter, up from 37% a year ago.
• Co-CEO John Abularrage noted that FMX futures volumes accelerated through September, reaching an average of 112,000 contracts per day.
• The company received credit rating upgrades from Kroll and JCRA to BBB+ and A-, respectively, during the period.
• Management stated that artificial intelligence represents an industry revolution that the company expects to eventually influence every part of the trading business.

INDUSTRY GLOSSARY

• ADV: Average Daily Volume, a measure of trading activity over a specific period.
• CDS: Credit Default Swaps, financial derivatives that allow an investor to swap or offset their credit risk with that of another investor.
• ECS: Energy, Commodities, and Shipping, a business segment within BGC Group.
• FMX: A BGC platform that includes a U.S. interest rate futures exchange and a cash treasury platform.
• G10: Group of Ten, the major industrialized countries whose currencies are among the most traded in the world.
• kACE: A software business specializing in foreign exchange and derivatives that BGC sold in late 2025.
• Lucera: BGC's network business providing real-time trading infrastructure and connectivity.
• NDF: Non-deliverable forwards, cash-settled short-term forward contracts on thinly traded or non-convertible foreign currencies.
• OTC: Over-the-counter, referring to trades conducted directly between two parties without the supervision of an exchange.
• PortfolioMatch: A Fenics electronic trading platform for the credit markets.

Full Conference Call Transcript

Operator: Ladies and gentlemen, thank you for standing by. BGC Group will begin shortly. Once again, we thank you for your patience. BGC Group's conference call will begin shortly. Greetings, and welcome to the BGC Group Inc. Third Quarter 2026 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. I will now turn the conference over to your host, Jason Chryssicas, Head of Investor Relations. Thank you. You may begin.

Jason Chryssicas: Hello, everyone. 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 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, relevant economic and industry statistics, 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. 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 documents. With that, I am now happy to turn the call over to John Abularrage, Co-Chief Executive Officer of BGC Group.

John Abularrage: Thank you, Jason. Good morning, and welcome to our third quarter 2026 conference call. With me today is my fellow Co-Chief Executive Officer, Sean Windeatt, along with our Chief Financial Officer, Jason Hauf. We delivered record third quarter revenues of $833 million, up 13%, led by double-digit growth in ECS, rates, foreign exchange, and equities. This strong growth drove both GAAP and adjusted earnings to all-time highs for the third quarter and for the first nine months of the year. In addition to our record financial performance, we continue to develop technology that we believe will shape the future of our markets, from our first fully AI-brokered institutional trade to our prediction market partnership with Fanatics.

In August, FMX listed the full U.S. Treasury futures curve, which drove volumes to new all-time highs in September. Last month, we hosted our first-ever FMX Investor Day. We showcased FMX's growth strategy and the strength of its platform through panels with FMX leadership, market participants, and regulators. For those of you who could not join us, a replay is available online on our investor relations website, ir.bgcg.com. As we announced earlier this week, JP Aubin will become Vice Chairman and will step down as Co-Chief Executive Officer at year-end. I would like to take a moment to personally thank JP.

As Vice Chairman, we will continue to benefit from his experience as we drive the next phase of BGC's growth. With that, I'd like to turn the call over to Sean to walk through our quarterly results in more detail.

Sean Windeatt: Thank you, John. We delivered record third quarter revenues of $832.6 million, a 13% increase versus last year, with total brokerage revenues growing 14.8% to $772.8 million. ECS revenues grew by 18.8% to $287.1 million, driven by strong growth across our shipping, environmental, and crude oil businesses, partially offset by lower refined product volumes. Rates revenues increased 12.4% to $219.6 million, reflecting higher volumes across G10 government bonds, inflation products, and emerging market rates. Foreign exchange revenues were up 13.9% to $121.5 million, primarily due to strong volume growth in emerging markets, G10 forwards, and our Macro Hive business. Equities revenues grew by 28% to $77.3 million, reflecting strong growth across U.S. and European equities and private markets.

In September, we completed our first-ever AI-brokered institutional trade in listed equity derivatives, using autonomous AI-powered systems to manage the trading workflow from price discovery through execution. Credit revenues decreased by 2.5% to $67.4 million due to lower emerging market and European credit volumes, partially offset by strong CDS activity. Data, network, and post-trade revenues grew by 21.2% to $36.1 million, excluding KACE, which we sold in the fourth quarter of 2025. Interest and dividend income, fees from related parties, and other revenues decreased by 19.7% to $23.6 million due to the wind-down of a non-core logistics business acquired as part of OTC and lower interest income. Now turning to Fenics.

Fenics revenues increased by 13.3% to a third-quarter record of $181.3 million. Fenics Markets generated revenues of $145.1 million, an increase of 11.9%, excluding KACE. This growth was driven by higher electronic trading volumes across rates and credit and increased Fenics Market data revenues. Fenics Growth Platforms revenues grew by 39.8% to $36.2 million, primarily driven by FMX, PortfolioMatch, and Lucera. FMX revenues increased by more than 35% to $30.5 million in the third quarter, driven by rates, FX, and market data. FMX UST generated record third-quarter ADV of $83 billion, 40% higher than last year, and grew at more than double the rate of primary dealer Treasury volumes.

FMX UST's third-quarter market share was 42%, up from 37% a year ago. FMX Futures Exchange delivered a record quarter with ADV of more than 80,000 contracts, nearly sevenfold higher than a year ago. Volumes accelerated through the third quarter, reaching an average of 112,000 contracts per day in September, driven by increased client adoption and the listing of the full U.S. Treasury futures curve in August. FMX FX average daily volume increased by 43% to $18.7 billion, driven by spot FX and NDFs, resulting in continued market share gains. PortfolioMatch ADV grew 34% to a third-quarter record of $419 million, outpacing the broader credit market and resulting in another quarter of market share gains.

Lucera, Fenics' network business providing real-time trading infrastructure to the capital markets, generated record revenues, which grew by 28% in the third quarter, driven by its foreign exchange and fixed income offerings. With that, I would now like to turn the call over to Jason.

Jason Hauf: Thank you, Sean, and hello, everyone. Turning to expenses. Compensation and employee benefits for Adjusted Earnings increased by 14.7%, reflecting higher commissionable revenues and product mix during the period. Non-compensation expenses for Adjusted Earnings increased by 4.3%, primarily due to increased selling and promotion and commissions and floor brokerage expenses related to higher client activity. Moving on to our record third-quarter Adjusted Earnings. Our pre-tax Adjusted Earnings grew by 20.9% to $187.5 million, representing a pre-tax incremental margin of 33.9%. Post-tax Adjusted Earnings increased by 17.5% to $165.9 million, resulting in post-tax Adjusted Earnings per share of $0.34, 17.2% higher than last year. Adjusted EBITDA increased by 48.9% to $249.5 million. Turning to share count.

BGC's fully diluted weighted average share count for Adjusted Earnings was 492.2 million shares during the period, 0.6% lower than last quarter. As of September 30th, our liquidity was $917.3 million, compared with $979.1 million as of year-end 2025. During the quarter, we 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 would like to turn the call back to John to go over our fourth quarter outlook.

John Abularrage: Thank you, Jason. I am pleased to provide the following guidance for the fourth quarter and full year 2026. We expect to generate revenues of between $805 million and $865 million, compared to $756.4 million in the fourth quarter of 2025, which at the midpoint of our guidance would represent 10% revenue growth for the fourth quarter and 18% revenue growth for the full year. We anticipate pre-tax Adjusted Earnings to be in the range of $178 million-$196 million, versus $161.3 million last year, which at the midpoint of guidance would represent 16% earnings growth for the fourth quarter and 23% earnings growth for the full year.

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.

Operator: Thank you. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Patrick Moley with Piper Sandler. Please proceed with your question.

Patrick Moley: Yes, good morning, guys. Thanks for taking the question. I wanted to start on the leadership announcement from earlier this week, with JP moving to vice chairman at year-end. Was hoping you could walk us through how his responsibilities are going to be divided between the other co-CEOs, and then what is his day-to-day role going to look like going forward, particularly with the European dealer and client relationships that I know he's been very close to? Bigger picture, and this one might be a little harder to answer, but you've run with three co-CEOs now since 2025.

Do you think this is the right long-term structure from here with the two co-CEOs, or should we think about this as a step towards maybe a broader succession plan? Thanks.

Sean Windeatt: Hey, Patrick, it's Sean. Well, look, I think it's interesting, right? It's been pointed out to us on numerous occasions over the last few years that the three co-CEO construct was perhaps a little unusual. But despite that, I think our record results over the last two years speak for themselves. It's really business as usual for John and myself going forward. And look, as we mentioned in the release, JP's new role as vice chairman will allow him to spend time on the markets and regions that he knows best, which is exactly what he's been doing in the day-to-day already. I mean, actually, JP's actually sitting here opposite.

I don't know if you wanted to say a couple of words, JP.

JP Aubin: Sure. Thank you, Sean. Hey, Patrick, how are you? Yeah, I feel privileged, Patrick, that I will assume the role of vice chairman. It's an honor. I look forward to working with Sean and John in my new role, helping to drive growth. You know, Patrick, one point, I'm certainly not retiring, as I'm sure you saw from the filing earlier this week.

Sean Windeatt: Patrick, I think, on the last point, which John and I, it tickled us as we're looking across the room, as we started, the co-CEO construct has worked incredibly well for us. As you also know, the firm has really two big features of the business. It has the FMX business and the future and all of the new markets, which, as you know, John focuses a lot of time on. Then you have outside of the U.S., in Europe and Asia, which I focus on. Actually, the co-CEO model has worked incredibly well for us, hence our record results.

Patrick Moley: Yeah, no, thanks for that, and I would agree. Maybe just switching gears, on ECS, it looks like growth reaccelerated to 19% or so, and I know you're following up on the tough comp from the second quarter. Sounds like crude came back with refined products being a drag. Could you help us think about how much of that reacceleration in growth is from just market normalization versus share gains and the OTC integration? Then with the moves that we've seen in crude here more recently, what are you seeing in the fourth quarter so far, if you can share, and what is baked into the guide in terms of ECS growth in the fourth quarter? Thank you.

Sean Windeatt: Why don't I start that, and then John will take over. Look, I think you remember, you're quite right that in Q2, it was an incredibly tough comp, right? But in Q3, what you saw was the strength of the breadth of our ECS business. So, you saw excellent business in our shipping business, and a good growth there, offset slightly by weaker growth or by weaker performance in the refined products. But I think overall, what that shows you is that the breadth and scale of our ECS business puts us in a great position to win in multiple market conditions. That's what you saw in Q3. I mean, maybe John for Q4?

John Abularrage: No, I would just reiterate what Sean has said. We are so diverse in the ECS offering now that one of the main drivers in Q3 was actually our biodiesel and our fats and greases business. So, obviously, Sean and I saw that coming, so it was a nice surprise for us. As for Q4, we benefit from uncertainty. So, with the uncertainty in the market now, we would expect to go from strength to strength in the ECS business, and see no reason to change that opinion, Patrick.

Patrick Moley: All right, that's great color. If I could just sneak one last one in here. You mentioned the first fully AI-brokered trade in equity derivatives that you did in September. I am curious how you are just thinking about scaling that. Which asset classes could come next? How did your brokers and clients respond to it? Then over time, what could this mean for maybe just compensation ratio and the mix between voice and electronic? Thanks.

John Abularrage: Sure. The way that Sean and I try to think about AI in general is not so much that it is another technology advancement that is going to change our business, but rather, more along the lines of an AI revolution. We think it is going to affect every part of our business. We think that the fully brokered AI trade, as you know, was in SWISSY. It is kind of who knew it would happen in listed products. But our view is it is going to affect every part of our business going forward. We are spending time and money leaning into AI.

When you ask what asset class would be next, the answer is all asset classes will be next. We will continue to push in this direction, and we fully believe that is a conversation to be had with our clients on a daily basis in terms of their adoption and where they are thinking about it. The only thing I will say, as a last point on that, is we are also spending an incredible amount of time making sure that we do it safely for our clients and our investors.

Sean Windeatt: Maybe, Patrick, just to add to your last point in terms of compensation. Look, as markets become electronic, by definition, over time, compensation does reduce, but that is not the importance, I don't think, here today. What is important today is getting the adoption of AI into our marketplace, which, as John said, I think will significantly increase the volumes of our business over time.

Patrick Moley: Okay, great. Thanks again, guys, and congrats on the quarter.

John Abularrage: Thanks.

Sean Windeatt: Thank you.

Operator: Thank you. Once again, as a reminder, if you would like to join the question queue, please press star one on your telephone keypad. Our next question comes from the line of Eli Abboud with Bank of America. Please proceed with your question.

Eli Abboud: Good morning. Thank you for taking my question. I wanted to start on the geopolitical backdrop. If the Iran war concludes soon, how do you anticipate that would affect activity levels in your ECS complex? I know there will likely be an immediate sugar high in volumes on the back of any news flow, but I am more interested in whether you think the war concluding could create a more durable tailwind or headwind that could move the needle on 2027 ECS results.

Sean Windeatt: Look, I think what you've seen, and really it extends on from the question that Patrick asked, what you've seen, because of the diverse nature of our ECS business, you've seen increased business in shipping, slightly decreased volumes in refined products. One would assume that upon conclusion of the conflict, that could reverse. The answer being, we are well-positioned for either solution. I don't think the continuation or the resolution changes necessarily the performance of our ECS business.

Eli Abboud: Got it. Then switching gears to the AI infrastructure ecosystem. Are you seeing new logos connect and trade with BGC for the first time from the likes of the hyperscalers, the neoclouds, and other firms in the AI ecosystem? To the extent that you are they trading power, natural gas, and your existing product lineup, or are you already seeing uptake for compute derivatives?

John Abularrage: What I would say is that we're certainly seeing more interest and more connectivity in this space, Eli. It is not a meaningful part of our business yet, but as you know, we view the compute opportunity as tremendous, so we are onboarding and starting to work more and more with the neoclouds and the hyperscalers. We expect that to continue. In terms of compute specifically, this is a nascent market. We are at the forefront of developing this market. We think we're an early mover. We think the connectivity that we have, both on the market-making side and the corporate side, puts us right at the center of where this market should go.

My guess is it becomes an important asset class to us over the next few years. But at the moment, it's just the beginning of this journey.

Eli Abboud: Got it. Do you have any sense on whether the compute asset class eventually becomes a listed market? In your early conversations with hyperscalers and the neoclouds, does it seem like they're more interested in over-the-counter products, vehicles for trading compute?

John Abularrage: My guess, and this is just my guess, is that it starts OTC and then you see it move along. But we're exploring both avenues in terms of servicing these clients. But yeah, I think it'll start OTC and then we'll see it move to listed futures.

Eli Abboud: Got it. Thank you.

Operator: Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. Abularrage for any final comments.

John Abularrage: Thanks very much. We appreciate all your time, and we'll see you again in a quarter. Thank you.

Sean Windeatt: Thank you.

Operator: Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

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