ANNUAL REPORT
2024
“2024 WAS ANOTHER
RECORD-SETTING YEAR
FOR BGC, WITH STRONG
DOUBLE-DIGIT GROWTH
IN REVENUE AND PROFIT.
WE EXECUTED NUMEROUS
INITIATIVES THAT LAID
THE FOUNDATION FOR
LONG-TERM SUCCESS AND
SHAREHOLDER VALUE
CREATION.”
2024
For more than 20 years, BGC has led the wholesale brokerage industry with a relentless
focus on innovation and client service. As we enter a new era of leadership, our mission
remains clear: put clients first by delivering world-class service and continue driving
technological advancement to meet the evolving needs of the global capital markets.
In February 2025, Howard W. Lutnick was confirmed by the United States Senate as the
41st Secretary of Commerce and stepped down as Chairman of the Board and from his
executive positions at the Company. Howard was a visionary leader who transformed the
wholesale capital markets for more than 40 years, consistently positioning BGC ahead of
industry trends. We are grateful for his decades of leadership and his pivotal role in
shaping BGC into the global leader it is today.
Our executive leadership team includes John Abularrage, JP Aubin, and Sean Windeatt
serving as Co-Chief Executive Officers, along with Stephen Merkel as Executive Vice
President and General Counsel, and Jason Hauf as Chief Financial Officer. While this
executive leadership team is new in structure, together we bring over 80 years of
experience at BGC and a shared commitment to our firm’s values.
2024: ANOTHER RECORD YEAR IN REVIEW
In 2024, BGC achieved record revenues of $2.3 billion, a 12 percent increase from 2023. Our pre-
tax Adjusted Earnings rose by 17 percent to a record $517 million1, highlighting the strength of our
business model and its operational efficiencies. We continue to demonstrate consistent, strong
growth which has been driven by our largest asset classes — Rates, Energy, Commodities, and
Shipping (“ECS”), and Foreign Exchange:
Our Rates and Foreign Exchange businesses generated 2024 revenue growth of 12 percent and 14
percent, respectively, reflecting strong market share gains and improving trading conditions. ECS
revenues grew by 25 percent driven by increased global energy demand and geopolitical tensions.
Fenics – our higher margin, technology driven businesses – delivered record revenues of $571
million in 2024, highlighted by our Fenics Growth Platforms, which grew by more than 26 percent.
Fenics Growth Platforms represent our newer, standalone fully electronic trading platforms that are
transforming the wholesale capital markets.
In addition to producing record financial results in 2024, we also executed key strategic initiatives and
achieved major milestones that delivered significant value for our shareholders:
TO OUR FELLOW
STOCKHOLDERS
3
BGC Group Annual Report 2024
JANUARY 2024 – Received CFTC approval to operate
our FMX Futures Exchange for U.S. Treasury and SOFR
futures.
MARCH 2024 – BGC was added to the S&P SmallCap
600 Index.
APRIL 2024 – FMX received a $172 million investment
from ten of the world’s leading investment banks and
market making firms at a post-money valuation of $667
million.
SEPTEMBER 2024 – Successfully launched FMX Futures
Exchange, listing SOFR futures contracts for trading.
OCTOBER 2024 – BGC completed its acquisition of Sage
Energy Partners and announced an agreement to acquire
OTC Global Holdings, collectively adding more than $450
million of pro-forma revenue and creating the world’s
largest ECS broker.
DECEMBER 2024 – BGC sold its Capitalab rates
compression business for $46 million at a 7.5-times
revenue multiple.
FMX: EXECUTING THE LARGEST VALUE
OPPORTUNITY IN BGC’S HISTORY
FMX represents the greatest value-creation opportunity
in our Company’s history, which we expect will deliver
significant shareholder value over time.
In April 2024, Bank of America, Barclays, Citadel
Securities, Citi, Goldman Sachs, J.P. Morgan, Jump Trading
Group, Morgan Stanley, Tower Research Capital, and
Wells Fargo collectively contributed $172 million of
primary capital to become equity investors in FMX.
These partners represent 10 of the largest global
investment banks and market making firms supporting
the growth of all of our FMX businesses.
FMX competes directly with CME which has a current
market capitalization of nearly $100 billion –
approximately 20-times larger than BGC’s market
capitalization today.2 Since acquiring the Chicago Board
of Trade in 2007, CME has maintained nearly 100
percent market share in U.S. Treasury and SOFR futures
products. With the world’s most widely traded futures
products now trading on our platform, FMX will not only
fundamentally transform the U.S. interest rate futures
market, but also enhance BGC’s economic profile and
our Company’s core value proposition.
FMX is challenging CME across three distinct product
areas:
1. U.S. Treasuries
FMX UST has been the fastest growing U.S. Treasury
platform since its inception. We re-entered this market
in 2018, following the sale of our former U.S. Treasury
platform, eSpeed in 2013. We seized an opportunity to
bring our expertise back to a market that had shifted
from a duopoly to a CME-controlled monopoly. We
approached this opportunity with a deep understanding
of the U.S. Treasury market that allowed us to bring
innovation to an established electronic marketplace. We
developed our platform to price the tightest tick sizes in
the market. We empowered our clients with the choice
of how to trade, and with whom to trade. And these
features were embedded into a trading platform that is
among the fastest in the world. This approach
resonated with clients and fueled the success of what is
now called, FMX UST.
FMX UST’s success was not immediate – and early gains
were gradual, with market share reaching just one percent
by our first anniversary. By the end of 2024, FMX UST
surpassed 30 percent market share, climbing to more than
35 percent during the second quarter of 2025.3 Liquidity
begets liquidity; gaining the first one percent of market
share was the hardest, but each incremental point of
market share becomes easier to attain.
We see strong parallels between our new FMX Futures
Exchange and the trajectory of FMX UST. We are
progressing toward our first point of market share in
SOFR futures – the first product we launched on the
platform in September 2024 – which is slightly ahead of
where we were with cash U.S. Treasuries at the same
time post-launch.
2. U.S. Treasury and SOFR futures
Our three-year plan for our FMX Futures Exchange is
advancing as expected:
• Year One – Focus on connectivity, onboarding key
Futures Commission Merchants (“FCMs”) and
obtaining the necessary compliance approvals with
our equity partners and other clients.
• Year Two – Deepen client connectivity while
growing our average daily volumes (“ADV”), open
interest (“OI”), and market share.
• Year Three – Full-on competition for market share
in the U.S. interest rate futures market.
The LCH Advantage: FMX has a clear and competitive
advantage through its clearing partnership with LCH,
the world’s largest clearinghouse for interest rate swaps.
Our partnership provides clients with a superior
clearing and cross-margining model, offering efficiencies
that were previously unattainable at scale. Historically,
CME and LCH have held dominant positions in clearing
U.S. interest rate futures and interest rate swaps,
respectively, limiting clients’ ability to realize significant
capital savings through cross-margining. Our partnership
with LCH aims to unlock substantial capital savings for
customers by consolidating U.S. interest rate futures
and interest rate swaps within LCH’s interest rate swap
clearing ecosystem.
Innovative Trading Solution: Our state-of-the-art
trading system enhances the speed of execution and
provides seamless trading of both futures and cash
1%
6%
12%
19%
19%
24%
29%
35%
2018
2019
2020
2021
2022
2023
2024
Q2 2025
FMX UST MARKET SHARE3
Treasury products on the same platform. Our exchange
also allows clients to trade at the tightest price
increments in the market that we expect to lead to
meaningful savings for FMX exchange participants. We
will be launching additional features in 2025 and 2026
that we expect to drive further interest and client
volumes to our exchange.
We are making good progress on our three-year plan
to establish FMX Futures Exchange as a major force in
the U.S. interest rate futures market. Since our
September 2024 launch, ADV and OI have steadily
increased – accelerating throughout 2025 – and we
expect this momentum to continue.
3. Foreign Exchange
FMX competes in the highly fragmented, multi-trillion-
dollar foreign exchange market. FMX FX, our spot
foreign exchange business, has been one of the fastest
growing platforms since its launch. Like our other FMX
businesses, this platform has seen tremendous support
from our equity partners, with growth meaningfully
accelerating since we completed the FMX transaction in
April 2024. In just one year following our FMX
partnership, ADV has doubled, quickly establishing the
platform as one of the leading foreign exchange venues
in the market.
We expect continued growth for FMX FX, as liquidity
levels on the platform have reached critical thresholds
and as new products are launched. With our leading
technology and strong client relationships, FMX FX is
well positioned to become the platform of choice in a
competitive market – representing a material
opportunity to deliver tremendous value.
INVESTING IN GROWTH
Energy, Commodities, and Shipping Acquisitions
We completed two accretive acquisitions that
significantly strengthened our Energy, Commodities, and
Shipping franchise and aligned with our goal to become
the world’s leading ECS broker:
• Sage Energy Partners (“Sage”) – Acquired in
October 2024, Sage expands our capabilities in oil
and refined products, the largest sector of the global
energy market.
• OTC Global Holdings (“OTC”) – Acquired in April
2025, OTC was the largest, independent ECS broker
generating more than $400 million in annual revenue.
The business adds substantial scale in oil and refined
products and complements our market-leading
position in environment and energy transition
products.
Together, these acquisitions add more than $450 million
in annualized pro-forma revenue, resulting in ECS
becoming our largest asset class, representing more than
one-third of total revenues. BGC is now the world’s
largest ECS broker and the only “one-stop shop” for
clients’ comprehensive needs. We have a proven track
record of successful, accretive acquisitions executed at
5
BGC Group Annual Report 2024
attractive valuations. BGC’s global platform enables us to
seamlessly integrate new businesses, unlock synergies
that drive revenues higher and costs lower, which we
expect to deliver significant value to shareholders.
Investing in Talent & Technology
We continue to invest in growth through our investments
in technology and people. The ongoing development and
implementation of our leading technology across the
business has driven our average revenue per front-office
employee (“productivity”) to all-time highs. For 2024, our
productivity exceeded $1 million per front-office employee,
a nearly 40 percent improvement over the last five years.4
Increased productivity through expanded use of technology
drove our revenues to another record in 2024. We also
continue to succeed in the competition for talent, attracting
and retaining the industry’s top producers, reinforcing our
position as the destination for the world’s best talent.
CONTINUATION OF THE STRONG
MACRO ENVIRONMENT
Wholesale Financial Business
We continue to operate in a macro environment that is
supportive of sustained growth. Interest rates in the U.S.
and most G10 countries have exhibited more
normalized levels of volatility, as homogeneous central
bank policies from 2008 to 2022 have transitioned to
more diverse monetary policies globally.
Volatility and issuance are key drivers of our Rates and
Credit businesses, as well as our Foreign Exchange
business, which benefits from the interconnectedness of
interest rates and exchange rates. As market participants
formulate views on future central bank monetary
policies and as issuance remains at record levels, we
expect continued tailwinds for these businesses.
Further, as bank regulation reform is pursued and
potentially enacted, we would anticipate additional
momentum across our businesses. For example, recent
proposals by the U.S. Federal Reserve to relax
Supplementary Leverage Ratio (“SLR”) requirements for
U.S. Treasury holdings would, if enacted, be expected to
increase industry-wide trading volumes and benefit
leading platforms like FMX UST along with other parts
of our business.
Energy, Commodities, and Shipping Business
In recent years, global energy demand has surged due to
a combination of global GDP growth, technological
advancements, and shifts in consumption patterns. The
$736
$750
+40%
$811
FY 2019
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
$861
$957
$1,018
RECORD FRONT-OFFICE
PRODUCTIVITY4
(USD 000s)
electrification of transportation, the expansion of data
centers, and AI proliferation have all contributed to
elevated power consumption and diversified energy
demand. Global energy demand increased by 2.2
percent in 2024 according to the International Energy
Agency (“IEA”), significantly higher than the annual
average growth rate of 1.3 percent between 2013 and
20235. These trends in global energy demand are
expected to perpetuate as global GDP grows and new
technologies drive increased demand for power and
energy.
As a leader in Environmental and Energy Transition
products – the largest drivers of global energy demand
growth – we remain strategically positioned as a market
leader in the fastest growing part of the energy market
and expect to benefit from the continued shifts toward
lower carbon emitting fuels.
Prior to our acquisition of OTC in April 2025, we were
historically undersized in oil and refined products – the
largest segment of the global energy market. Following
our acquisition of OTC, we are now positioned as a
market-leading oil brokerage firm, enabling us to
capitalize on this enormous market opportunity.
2025: A NEW YEAR AND NEW RECORDS
2025 is off to a historic start with our revenues
increasing by more than 28 percent through the first half
of the year, driven by strong organic growth and the
addition of OTC in the second quarter. We have seen
broad-based growth with revenues increasing across
every one of our asset classes. We continue to gain
market share across the wholesale financial and ECS
markets as clients increasingly rely on our execution,
data, and network services to power the secondary
capital markets.
On May 19, 2025, we announced the repurchase of
more than 16.1 million of our Class A shares from
BGC’s former Chairman and CEO, Howard W. Lutnick.
Given our record results and the anticipated strong free
cash flow generation in 2025, buying back our shares in
this highly efficient manner was an excellent use of our
capital. This corporate action also reflects our
confidence in the company’s long-term growth potential
and our commitment to shareholder capital return.
FMX Futures Exchange will mark its one-year
anniversary in September 2025. Our first year focused
on establishing connectivity, where we have made
significant progress thus far. In our second year we will
focus on increasing volumes, open interest, and market
share.
The integration of OTC is progressing well, with front-,
middle-, and back-office functions being incorporated
into BGC’s global platform. We announced a cost
reduction program which we expect to complete by the
end of 2025. These savings will enhance profitability and
drive profit margins higher, which we expect will deliver
long-term shareholder value.
7
BGC Group Annual Report 2024
IN CONCLUSION
2024 was another record-setting year for BGC, with strong double-digit growth in revenue and profit. We executed
numerous initiatives that laid the foundation for long-term success and shareholder value creation.
2025 is also off to another historic start and we expect to deliver another year of record results. Our focus remains on
growth, enhancing profitability, and expanding our profit margins. As we look toward the future, we are excited about the
opportunities ahead. We will continue to leverage our advanced technologies across the firm, explore new markets, and
expand our service offerings across both the Wholesale Financial and ECS markets.
We have a clear, strategic vision that is focused on executing the key opportunities before us and creating significant value for
our shareholders. Together, we are continuing Howard’s vision while navigating evolving market opportunities to position our
Company for continued and lasting success. We appreciate your continued support and confidence in BGC.
Sincerely,
JOHN ABULARRAGE, JP AUBIN, AND SEAN WINDEATT
CO-CHIEF EXECUTIVE OFFICERS
1 On a GAAP basis, income from operations before income taxes increased by 200.0% percent to $173.1 million in 2024. A reconciliation of GAAP income (loss) from
operations before income taxes to Adjusted Earnings is provided in the “Non-GAAP Financial Measures” section of this document.
2 Source: Bloomberg as of 09/04/2025.
3 Source: Coalition Greenwich MarketView; Central Limit Order Book (“CLOB”) market share quoted.
4 Front office productivity is an annual figure and is calculated using brokerage revenues and revenues from data, network and post-trade, divided by the average number
of producers for the period.
5 Source: IEA “Global Energy Review 2025”
Note: U.S. Generally Accepted Accounting Principles is referred to as “GAAP”. This document contains non-GAAP financial measures that differ from the most directly
comparable measures calculated and presented in accordance with GAAP. “GAAP income before income taxes and noncontrolling interests” and “Adjusted Earnings
before noncontrolling interests and taxes” may be used interchangeably with “GAAP pre-tax income” and “pre-tax Adjusted Earnings”, respectively.
See the sections of this document including “Non-GAAP Financial Measures”, “Adjusted Earnings Defined”, “Management Rationale for Using Adjusted Earnings”,
“Adjusted EBITDA defined”, “Timing of Outlook for Certain GAAP and Non-GAAP items”, “Liquidity Defined”, “Constant Currency Defined”, “Reconciliation of GAAP Income
(Loss) from Operations before Income Taxes to Adjusted Earnings and GAAP Fully Diluted EPS to Post-Tax Adjusted EPS”, “Fully Diluted Weighted-Average Share Count
under GAAP and for Adjusted Earnings”, “Liquidity Analysis”, “Reconciliation of GAAP Net Income (Loss) Available to Common Stockholders to Adjusted EBITDA”,
“Consolidated Revenues in Constant Currency”, and, “Fenics Revenues in Constant Currency” including any footnotes to these sections, for the complete and updated
definitions of these non-GAAP terms and how, when, and why management uses them, as well as for the differences between results under GAAP and non-GAAP for the
periods discussed herein.
This letter was finalized on September 4, 2025. Any forward-looking statements made in this document are only as of this date, unless otherwise stated. Please see the
section in the enclosed Form 10-K titled “Special Note on Forward-Looking Information.”
9
BGC Group Annual Report 2024
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________
FORM 10-K
_______________________________________________
FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-35591
_______________________________________________
BGC Group, Inc.
(Exact Name of Registrant as Specified in Its Charter)
_______________________________________________
Delaware
86-3748217
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
499 Park Avenue , New York , NY
10022
(Address of Principal Executive Offices)
(Zip Code)
(212) 610-2200
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Class A Common Stock, $0.01 par value
BGC
The Nasdaq Stock Market, LLC
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or
an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth
company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
☒
Accelerated Filer
☐
Non-accelerated Filer
☐
Smaller Reporting Company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in
the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of voting common equity held by non-affiliates of the registrant, based upon the closing price of the Class A common
stock on June 30, 2024 as reported on Nasdaq, was approximately $4,622,726,641.
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
On February 27, 2025, the registrant had 373,430,578 shares of Class A common stock, $0.01 par value, and 109,452,953 shares of Class B
common stock, $0.01 par value, outstanding.
_______________________________________________
DOCUMENTS INCORPORATED BY REFERENCE.
Portions of the registrant’s definitive proxy statement for its 2025 annual meeting of stockholders (the “2025 Proxy Statement”) are
incorporated by reference in Part III of this Annual Report on Form 10-K. We anticipate that we will file the 2025 Proxy Statement with the SEC on
or before April 30, 2025.
BGC Group, Inc.
2024 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
Page
Glossary of Terms, Abbreviations and Acronyms
4
Special Note on Forward-Looking Information
13
Risk Factor Summary
13
PART I
ITEM 1.
Business
15
ITEM 1A.
Risk Factors
38
ITEM 1B.
Unresolved Staff Comments
71
ITEM 1C.
Cybersecurity
71
ITEM 2.
Properties
73
ITEM 3.
Legal Proceedings
73
ITEM 4.
Mine Safety Disclosures
73
PART II
ITEM 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
74
ITEM 6.
[Reserved]
76
ITEM 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
76
ITEM 7A.
Quantitative and Qualitative Disclosures About Market Risk
121
ITEM 8.
Financial Statements and Supplementary Data
124
ITEM 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
201
ITEM 9A.
Controls and Procedures
201
ITEM 9B.
Other Information
201
ITEM 9C.
Disclosure Regarding Foreign Jurisdictions That Prevent Inspections
201
PART III
ITEM 10.
Directors, Executive Officers and Corporate Governance
202
ITEM 11.
Executive Compensation
202
ITEM 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
202
ITEM 13.
Certain Relationships and Related Transactions, and Director Independence
202
ITEM 14.
Principal Accountant Fees and Services
202
PART IV
ITEM 15.
Exhibits and Financial Statement Schedules
203
ITEM 16.
Form 10-K Summary
208
Except as otherwise indicated or the context otherwise requires, as used herein, the terms “BGC,” the “Company,”
“we,” “our,” and “us” refer to: (i) following the closing of the Corporate Conversion, effective July 1, 2023, BGC Group and its
consolidated subsidiaries, including BGC Partners; and (ii) prior to the effective time of the Corporate Conversion, BGC
Partners and its consolidated subsidiaries. See Note 1—“Organization and Basis of Presentation” to the Consolidated Financial
Statements herein for more information regarding the Corporate Conversion, and refer to the “Glossary of Terms,
Abbreviations and Acronyms” for the definitions of terms used above and throughout the remainder of this Annual Report on
Form 10-K.
GLOSSARY OF TERMS, ABBREVIATIONS AND ACRONYMS
The following terms, abbreviations and acronyms are used to identify frequently used terms and phrases that may be
used in this report:
2019 Form S-4 Registration
Statement
On September 13, 2019, BGC filed a registration statement on Form S-4 with respect to the offer and sale
of up to 20.0 million shares of BGC Class A common stock in connection with business combination
transactions, including acquisition of other businesses, assets, properties or securities
2023 Deed of Amendment
On July 12, 2023, Sean Windeatt executed a Deed of Amendment amending his existing Deed of
Adherence with the U.K. Partnership regarding his employment
ACER
Agency for the Cooperation of Energy Regulators
Adjusted Earnings
A non-GAAP financial measure used by the Company to evaluate financial performance, which primarily
excludes (i) certain non-cash items and other expenses that generally do not involve the receipt or outlay
of cash and do not dilute existing stockholders, and (ii) certain gains and charges that management
believes do not best reflect the ordinary results of BGC
ADV
Average daily volume
Americas
United States and other countries included in North America and South America
APAC
Asia-Pacific
API
Application Programming Interface
April 2008 distribution rights
shares
Cantor’s deferred stock distribution rights provided to current and former Cantor partners on April 1, 2008
Aqua
Aqua Securities L.P., an alternative electronic trading platform, which offers new pools of block liquidity
to the global equities markets and is a 49%-owned equity method investment of the Company and 51%
owned by Cantor
ASC
Accounting Standards Codification
ASU
Accounting Standards Update
Audit Committee
Audit Committee of the Board
August 2022 Sales Agreement
CEO Program sales agreement, by and between the Company and CF&Co, dated August 12, 2022,
pursuant to which the Company could offer and sell up to an aggregate of $300.0 million of shares of BGC
Class A common stock
Aurel
The Company’s French subsidiary, Aurel BGC SAS
Besso
Besso Insurance Group Limited, formerly a wholly owned subsidiary of the Company, acquired on
February 28, 2017. Sold to The Ardonagh Group on November 1, 2021 as part of the Insurance Business
Disposition
BGC
(i) Following the closing of the Corporate Conversion, BGC Group and, where applicable, its consolidated
subsidiaries, including BGC Partners, and (ii) prior to the closing of the Corporate Conversion, BGC
Partners and, where applicable, its consolidated subsidiaries
BGC Class A common stock or
our Class A common stock
BGC Class A common stock, par value $0.01 per share
BGC Class B common stock or
our Class B common stock
BGC Class B common stock, par value $0.01 per share
TERM
DEFINITION
2
BGC Credit Agreement
Agreement between BGC Partners and Cantor, dated March 19, 2018, that permits each party or its
subsidiaries to borrow up to $250.0 million, as amended on August 6, 2018, assumed by BGC Group on
October 6, 2023, and further amended March 8, 2024, to increase the facility to $400.0 million at a rate
equal to 25 basis points less than the applicable borrower’s borrowing rate under such borrower’s
revolving credit agreement with unaffiliated third parties as administrative agent and lenders as may be in
effect from time to time. On June 7, 2024, the agreement was amended a third time to permit BGC Group
and its subsidiaries and Cantor and its subsidiaries to borrow from each other up to $400.0 million
pursuant to a new category of “FICC-GSD Margin Loans”
BGC Derivative Markets
BGC Derivative Markets L.P.
BGC Entity Group
BGC Partners, BGC Holdings, BGC U.S. OpCo and their respective subsidiaries (other than, prior to the
Spin-Off, the Newmark Group), collectively, and in each case as such entities existed prior to the
Corporate Conversion
BGCF
BGC Financial, L.P.
BGC Global OpCo
BGC Global Holdings, L.P., an operating partnership, which holds the non-U.S. businesses of BGC and
which is indirectly wholly owned, following the closing of the Corporate Conversion, by BGC Group
BGC Group
BGC Group, Inc., and where applicable its consolidated subsidiaries
BGC Group 3.750% Senior
Notes
$255.5 million principal amount of 3.750% senior notes which matured on October 1, 2024 and were
issued on October 6, 2023 in connection with the Exchange Offer
BGC Group 4.375% Senior
Notes
$288.2 million principal amount of 4.375% senior notes maturing on December 15, 2025 and issued on
October 6, 2023 in connection with the Exchange Offer
BGC Group 6.600% Senior
Notes
$500.0 million principal amount of 6.600% senior notes maturing on June 10, 2029 and issued on June 10,
2024
BGC Group 8.000% Senior
Notes
$347.2 million principal amount of 8.000% senior notes maturing on May 25, 2028 and issued on October
6, 2023 in connection with the Exchange Offer
BGC Group Equity Plan
BGC Partners Equity Plan, as amended and restated and renamed the “BGC Group, Inc. Long Term
Incentive Plan” and assumed by BGC Group in connection with the Corporate Conversion
BGC Group Incentive Plan
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 assumed by BGC
Group in connection with the Corporate Conversion
BGC Group Notes
BGC Group 3.750% Senior Notes, BGC Group 4.375% Senior Notes, BGC Group 6.600% Senior Notes
and BGC Group 8.000% Senior Notes issued by BGC Group
BGC Holdings
BGC Holdings, L.P., an entity which, prior to the Corporate Conversion, was owned by Cantor, Founding
Partners, BGC employee partners and, after the Separation, Newmark employee partners
BGC Holdings Distribution
Pro-rata distribution, pursuant to the Separation and Distribution Agreement, by BGC Holdings to its
partners of all of the exchangeable limited partnership interests of Newmark Holdings owned by BGC
Holdings immediately prior to the distribution, completed on the Distribution Date
BGC Holdings Limited
Partnership Agreement
Second Amended and Restated BGC Holdings Limited Partnership Agreement
BGC OpCos
BGC U.S. OpCo and BGC Global OpCo, collectively
BGC Partners
BGC Partners, Inc. and, where applicable, its consolidated subsidiaries
BGC Partners 3.750% Senior
Notes
$300.0 million principal amount of 3.750% senior notes which matured on October 1, 2024 and were
issued on September 27, 2019. Following the Exchange Offer on October 6, 2023, $44.5 million aggregate
principal amount of the BGC Partners 3.750% Senior Notes remained outstanding
BGC Partners 4.375% Senior
Notes
$300.0 million principal amount of 4.375% senior notes maturing on December 15, 2025 and issued on
July 10, 2020. Following the Exchange Offer on October 6, 2023 $11.8 million aggregate principal
amount of the BGC Partners 4.375% Senior Notes remain outstanding
TERM
DEFINITION
3
BGC Partners 5.375% Senior
Notes
$450.0 million principal amount of 5.375% senior notes which matured on July 24, 2023 and were issued
on July 24, 2018
BGC Partners 8.000% Senior
Notes
$350.0 million principal amount of 8.000% senior notes maturing on May 25, 2028 and issued on May 25,
2023. Following the Exchange Offer on October 6, 2023, $2.8 million aggregate principal amount of the
BGC Partners 8.000% Senior Notes remained outstanding
BGC Partners Equity Plan
Eighth Amended and Restated Long Term Incentive Plan, approved by BGC Partners’ stockholders at the
annual meeting of stockholders on November 22, 2021
BGC Partners Incentive Plan
BGC Partners’ Second Amended and Restated Incentive Bonus Compensation Plan, approved by BGC
Partners’ stockholders at the annual meeting of stockholders on June 6, 2017
BGC Partners Notes
BGC Partners 3.750% Senior Notes, BGC Partners 4.375% Senior Notes, BGC Partners 5.375% Senior
Notes and BGC Partners 8.000% Senior Notes issued by BGC Partners
BGC U.S. OpCo
BGC Partners, L.P., an operating partnership, which holds the U.S. businesses of BGC and which is
indirectly wholly owned, following the closing of the Corporate Conversion, by BGC Group
Board
Board of Directors of the Company
Brexit
Exit of the U.K. from the EU
Cantor
Cantor Fitzgerald, L.P. and, where applicable, its consolidated subsidiaries
Cantor group
Cantor and its subsidiaries other than BGC, including Newmark
Cantor units
Limited partnership interests, prior to the Corporate Conversion, of BGC Holdings, held by the Cantor
group, which BGC Holdings units were exchangeable into shares of BGC Class A common stock or BGC
Class B common stock, as applicable
Capitalab
Capitalab Limited, which was part of the Company’s post-trade business. On December 3, 2024, the
Company announced the sale of Capitalab Limited to Capitolis
CCRE
Cantor Commercial Real Estate Company, L.P.
CECL
Current Expected Credit Losses
CEO Program
Controlled equity offering program
CF&Co
Cantor Fitzgerald & Co., a wholly owned broker-dealer subsidiary of Cantor
CFGM
CF Group Management, Inc., the general partner of Cantor
CFTC
Commodity Futures Trading Commission
Charity Day
BGC’s annual event held on September 11th where employees of the Company raise proceeds for charity
CIO
Chief Information Officer
CISO
Chief Information Security Officer
Clawback Policy
Compensation recovery policy
Clearing Capital Agreement
Agreement dated November 5, 2008, between BGC Partners and Cantor regarding clearing capital, as
amended from time to time and assumed by BGC Group on June 7, 2024. On June 7, 2024, the agreement
was amended to modify the rate charged by Cantor for posting margin in respect of trades cleared on
behalf of the Company to a rate equal to Cantor’s cost of funding such margin through a draw on a third
party credit facility provided to Cantor for which the use of proceeds is to finance clearinghouse margin
deposits and related transactions
TERM
DEFINITION
4
Clearing Services Agreement
Agreement dated May 9, 2006, between CF&Co and BGCF pursuant to which certain clearing services are
provided to BGC and its subsidiaries from Cantor and its subsidiaries, in exchange for payment by BGC
and its subsidiaries of third-party clearing costs and allocated costs. On June 7, 2024, the agreement was
amended to modify the rate charged by CF&Co for posting margin in respect of trades cleared on behalf of
BGCF to a rate equal to CF&Co’s cost of funding such margin through a draw on a third party credit
facility provided to CF&Co for which the use of proceeds is to finance clearinghouse margin deposits and
related transactions
CME
CME Group Inc. a leading derivatives marketplace, made up of four exchanges: CME, CBOT, NYMEX
and COMEX
Company
Refers to (i) from after the effective time of the Corporate Conversion, BGC Group and its consolidated
subsidiaries, including BGC Partners; and (ii) prior to the effective time of the Corporate Conversion,
BGC Partners and its consolidated subsidiaries
Company Debt Securities
The BGC Group Notes, the BGC Partners Notes and any future debt securities issued by the Company or
its subsidiaries
Company Equity Securities
BGC Group stock or other equity securities
Compensation Committee
Compensation Committee of the Board
ContiCap
ContiCap SA, a wholly owned subsidiary of the Company, acquired on November 1, 2023
Contribution Ratio
Equal to a BGC Holdings limited partnership interest multiplied by one, divided by 2.2 (or 0.4545)
Corporate Conversion
A series of mergers and related transactions pursuant to which, effective at 12:02 AM Eastern Time on
July 1, 2023, BGC Partners and BGC Holdings became wholly owned subsidiaries of BGC Group,
transforming the organizational structure of the BGC businesses from an “Up-C” structure to a simplified
“Full C-Corporation” structure
Corporate Conversion
Agreement
The Corporate Conversion Agreement entered into on November 15, 2022, and as amended on March 29,
2023, by and among BGC Partners, BGC Holdings, BGC Group and other affiliated entities, and, solely
for the purposes of certain provisions therein, Cantor, that provides for the Corporate Conversion of the
BGC businesses
Corporate Conversion Mergers
The Holdings Reorganization Merger, the Corporate Merger, and the Holdings Merger, collectively
Corporate Merger
The merger of Merger Sub 1 with and into BGC Partners on July 1, 2023
COVID-19
Coronavirus Disease 2019
Credit Facility
A $150.0 million credit facility between BGC Group and an affiliate of Cantor entered into on April 21,
2017, which was terminated on March 19, 2018
DCM
Designated Contract Market
DCO
Derivatives Clearing Organization
Deed
Mr. Windeatt’s Deed of Adherence, as amended, with the U.K. Partnership regarding the terms of
employment
DGCL
Delaware General Corporation Law
Distribution Date
November 30, 2018, the date that BGC Partners and BGC Holdings completed the Spin-Off and the BGC
Holdings Distribution, respectively
Dodd-Frank Act
Dodd-Frank Wall Street Reform and Consumer Protection Act
DRIP
Dividend Reinvestment and Stock Purchase Plan
DRIP Registration Statement
Registration statement on Form S-3 with respect to the offer and sale of up to 10.0 million shares of BGC
Class A common stock under the DRIP
DTCC
Depository Trust & Clearing Corporation
TERM
DEFINITION
5
ECB
European Central Bank
ECS
Energy, Commodities, and Shipping
Ed Broking
Ed Broking Group Limited, formerly a wholly owned subsidiary of the Company, acquired on January 31,
2019 and sold to The Ardonagh Group on November 1, 2021 as part of the Insurance Business Disposition
EMEA
Europe, Middle East, and Africa
EMIR
European Market Infrastructure Regulation
EPS
Earnings Per Share
ESG
Environmental, Social and Governance, including sustainability or similar items
ESG Committee
Environmental, Social and Governance Committee of the Board
eSpeed
Various assets comprising the Fully Electronic portion of the Company’s former benchmark on-the-run
U.S. Treasury brokerage, market data and co-location service businesses, sold to Nasdaq on June 28, 2013
EU
European Union
Exchange Act
Securities Exchange Act of 1934, as amended
Exchange Agreement
A letter agreement by and between BGC Partners, Cantor and CFGM, dated June 5, 2015, that, prior to the
Corporate Conversion, granted Cantor and CFGM the right to exchange shares of BGC Class A common
stock into shares of BGC Class B common stock on a one-to-one basis up to the limits described therein,
which agreement was terminated in connection with the Corporate Conversion
Exchange Offer
Consent solicitations and offers to exchange the BGC Partners 3.750% Senior Notes, BGC Partners
4.375% Senior Notes and BGC Partners 8.000% Senior Notes issued by BGC Partners for the BGC Group
3.750% Senior Notes, BGC Group 4.375% Senior Notes and BGC Group 8.000% Senior Notes issued by
BGC Group, in each case with substantially similar terms to the corresponding series of BGC Partners
Notes, completed on October 6, 2023
Exchange Ratio
Ratio by which a Newmark Holdings limited partnership interest can be exchanged for shares of Newmark
Class A or Class B common stock
FASB
Financial Accounting Standards Board
FCA
Financial Conduct Authority of the U.K.
FCM
Futures Commission Merchant
FDIC
Federal Deposit Insurance Corporation
February 2012 distribution
rights shares
Cantor’s deferred stock distribution rights provided to current and former Cantor partners on February 14,
2012
Fenics
BGC’s group of electronic brands, offering a number of market infrastructure and connectivity services,
Fully Electronic marketplaces, and the Fully Electronic brokerage of certain products that also may trade
via Voice and Hybrid execution, including market data and related information services, Fully Electronic
brokerage, connectivity software, compression and other post-trade services, analytics related to financial
instruments and markets, and other financial technology solutions; includes Fenics Growth Platforms and
Fenics Markets
Fenics Growth Platforms
Consists of FMX UST, Fenics GO, Lucera, FMX FX and other newer standalone platforms, including
FMX Futures Exchange
Fenics Integrated
Represents Fenics businesses that utilize sufficient levels of technology such that significant amounts of
their transactions can be, or are, executed without broker intervention and have expected pre-tax margins
of at least 25%
Fenics Markets
Consists of the Fully Electronic portions of BGC’s brokerage businesses, data, network and post-trade
revenues that are unrelated to Fenics Growth Platforms, as well as Fenics Integrated revenues
TERM
DEFINITION
6
FICC
Fixed Income Clearing Corporation
FICC-GSD Margin Loans
Loans made by a party under the BGC Credit Agreement, the use of proceeds of which will be to directly
or indirectly (i) post margin at any clearinghouse, including without limitation the Government Securities
Division of the FICC, (ii) keep funds available for the purpose of posting such margin or (iii) otherwise
facilitate the clearing and settlement of trades
FINRA
Financial Industry Regulatory Authority
FMX
Fenics Markets Exchange, LLC, which holds BGC’s business of providing a fully electronic neutral forum
in which all participants enter into electronic transactions with respect to U.S. Treasuries, U.S. treasury
futures, U.S. SOFR futures and other select products
FMX Equity Partners
Bank of America, Barclays, Citadel Securities, Citi, Goldman Sachs, J.P. Morgan, Jump Trading Group,
Morgan Stanley, Tower Research Capital, and Wells Fargo, being the banks which contributed $172
million between April 23, 2024 and April 24, 2024 into FMX in exchange for a 25.75% ownership interest
in FMX at a post-money equity valuation of $667 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
FMX Futures Exchange, L.P., which is wholly owned by FMX, and received approval from the CFTC to
operate an exchange for U.S. treasury futures and U.S. SOFR futures
FMX Separation
On April 23, 2024, BGC and FMX entered into a separation agreement pursuant to which BGC
contributed the assets and liabilities related to FMX’s business to FMX, and pursuant to which BGC and
FMX agreed to certain restrictions in the operations of their respective businesses
Founding Partners
Individuals who became limited partners of BGC Holdings in the mandatory redemption of interests in
Cantor in connection with the 2008 separation and merger of Cantor’s BGC division with eSpeed, Inc.
(provided that members of the Cantor group and Howard W. Lutnick (including any entity directly or
indirectly controlled by Mr. Lutnick or any trust with respect to which he is a grantor, trustee or
beneficiary) are not founding partners) and became limited partners of Newmark Holdings in the
Separation
Founding/Working Partners
Holders of FPUs
FPUs
Founding/Working Partners units, in BGC Holdings, prior to the Corporate Conversion, or Newmark
Holdings, generally redeemed upon termination of employment
Freedom
Freedom International Brokerage Company, a 45% voting interest ownership equity method investment of
the Company
FTP
File Transfer Protocol
Fully Electronic
Broking transactions intermediated on a solely electronic basis rather than by Voice or Hybrid broking
Futures Exchange Group
A wholly owned subsidiary of the Company made up of the following entities: CFLP CX Futures
Exchange Holdings, LLC, CFLP CX Futures Exchange Holdings, L.P., CX Futures Exchange Holdings,
LLC, CX Clearinghouse Holdings, LLC, FMX Futures Exchange and CX Clearinghouse, L.P.
FX
Foreign exchange
G20
A forum for the world’s major economies to discuss economic, social, and development issues
GDPR
General Data Protection Regulation
GFI
GFI Group Inc., a wholly owned subsidiary of the Company, acquired on January 12, 2016
GILTI
Global Intangible Low-Taxed Income
Ginga Petroleum
Ginga Petroleum (Singapore) Pte Ltd, a wholly owned subsidiary of the Company, acquired on March 12,
2019
GSD
Government Securities Division
TERM
DEFINITION
7
GUI
Graphical User Interface
HDUs
LPUs with capital accounts, which were liability awards recorded in “Accrued compensation” in the
Company’s Consolidated Statements of Financial Condition
Holdings Merger
The merger of Merger Sub 2 with and into Holdings Merger Sub
Holdings Merger Sub
BGC Holdings Merger Sub, LLC, a Delaware limited liability company, wholly owned subsidiary of the
Company, and successor to BGC Holdings
Holdings Reorganization
Merger
The reorganization of BGC Holdings from a Delaware limited partnership into a Delaware limited liability
company through a merger with and into Holdings Merger Sub
Hybrid
Broking transactions executed by brokers and involving some element of Voice broking and electronic
trading
ICAP
ICAP plc, a part of TP ICAP group, and a leading markets operator and provider of execution and
information services
ICE
Intercontinental Exchange
Incentive-Based Compensation
Compensation received by the Company’s executive officers that results from the attainment of a financial
reporting measure based on or derived from financial information
Insurance brokerage business
The insurance brokerage business of BGC, including Corant, Ed Broking, Besso, Piiq Risk Partners,
Junge, Cooper Gay, Global Underwriting and Epsilon, which business was sold to The Ardonagh Group
on November 1, 2021
Insurance Business Disposition
The sale of the Insurance brokerage business for $534.9 million in gross cash proceeds after closing
adjustments, subject to limited post-closing adjustments, completed on November 1, 2021
Investment Company Act
Investment Company Act of 1940, as amended
IR Act
Inflation Reduction Act of 2022
July 2023 Sales Agreement
CEO Program sales agreement, by and between the Company and CF&Co, dated July 3, 2023, pursuant to
which the Company can offer and sell up to an aggregate of $300.0 million of shares of BGC Class A
common stock
LCH
London Clearing House
LGD
Loss Given Default
LIBOR
London Interbank Offering Rate
Liquidity
A non-GAAP financial measure, comprised of the sum of Cash and cash equivalents, Reverse Repurchase
Agreements, and Financial instruments owned, at fair value, less Securities loaned and Repurchase
Agreements
LPUs
Certain limited partnership units of BGC Holdings prior to the Corporate Conversion, or Newmark
Holdings, held by certain employees of BGC and Newmark and other persons who have provided services
to BGC or Newmark, which units may include APSIs, APSUs, AREUs, ARPSUs, HDUs, U.K. LPUs, N
Units, PLPUs, PPSIs, PPSUs, PSEs, PSIs, PSUs, REUs, and RPUs, along with future types of limited
partnership units in Newmark Holdings
LSEG
London Stock Exchange Group
Lucera
A wholly owned subsidiary of the Company, also known as “LFI Holdings, LLC” or “LFI,” which is a
software defined network offering the trading community direct connectivity
March 2021 Form S-3
Registration Statement
CEO Program shelf Registration Statement on Form S-3 filed on March 8, 2021
MarketAxess
MarketAxess Holdings Inc.
TERM
DEFINITION
8
Merger Sub 1
BGC Partners II, Inc., a Delaware corporation and wholly owned subsidiary of BGC Group
Merger Sub 2
BGC Partners II, LLC, a Delaware limited liability company and wholly owned subsidiary of BGC Group
MiFID II
Markets in Financial Instruments Directive II, a legislative framework instituted by the EU
to regulate financial markets and improve protections for investors by increasing transparency and
standardizing regulatory disclosures
Mint Brokers
A wholly owned subsidiary of the Company, acquired on August 19, 2010, registered as an FCM with
both the CFTC and the NFA
Nasdaq
Nasdaq, Inc., formerly known as NASDAQ OMX Group, Inc.
NDF
Non-deliverable forwards
Newmark
Newmark Group, Inc. (Nasdaq symbol: NMRK), a publicly traded and former majority-owned subsidiary
of BGC Partners until the Distribution Date, and, where applicable, its consolidated subsidiaries
Newmark Class A common
stock
Newmark Class A common stock, par value $0.01 per share
Newmark Class B common
stock
Newmark Class B common stock, par value $0.01 per share
Newmark Group
Newmark, Newmark Holdings, and Newmark OpCo and their respective consolidated subsidiaries,
collectively
Newmark Holdings
Newmark Holdings, L.P.
Newmark IPO
Initial public offering of 23 million shares of Newmark Class A common stock by Newmark at a price of
$14.00 per share in December 2017
Newmark OpCo
Newmark Partners, L.P., an operating partnership, which is owned jointly by Newmark and Newmark
Holdings and holds the businesses of Newmark
NFA
National Futures Association
Non-GAAP
A financial measure that differs from the most directly comparable measure calculated and presented in
accordance with U.S. GAAP, such as Adjusted Earnings and Liquidity
N Units
Non-distributing partnership units, of BGC Holdings, prior to the Corporate Conversion, or Newmark
Holdings, that may not be allocated any item of profit or loss, and may not be made exchangeable into
shares of Class A common stock, including NREUs, NPREUs, NLPUs, NPLPUs, NPSUs, and NPPSUs
OCC
Options Clearing Corporation
Open Energy Group
Open Energy Group Inc., a wholly owned subsidiary of the Company, acquired on November 1, 2023
OTC
Over-the-counter
OTC Global
OTC Global Holdings, LP
OTF
Organized Trading Facility, a regulated execution venue category introduced by MiFID II
PD
Probability of default
Period Cost Method
Treatment of taxes associated with the GILTI provision as a current period expense when incurred rather
than recording deferred taxes for basis differences
Peer Group
BGC’s peer group for purposes of Item 201(e) of Regulation S-K, which consists of Compagnie
Financière Tradition SA and TP ICAP plc
TERM
DEFINITION
9
Poten & Partners
Poten & Partners Group, Inc., a wholly owned subsidiary of the Company, acquired on November 15,
2018
Predecessor
Refers to BGC Partners Inc. being the parent company prior to the Corporate Conversion.
Preferred Distribution
Allocation of net profits of BGC Holdings (prior to the Corporate Conversion) or Newmark Holdings to
holders of Preferred Units, at a rate of either 0.6875% (i.e., 2.75% per calendar year) or such other amount
as set forth in the award documentation
Preferred Return
The lesser of the two-year treasury bond rate or 2.75% annually, as calculated on the determination
amount applicable to certain RSU Tax Account awards, which may be adjusted or otherwise determined
by management from time to time
Preferred Units
Preferred partnership units of BGC Holdings, prior to the Corporate Conversion, or Newmark Holdings,
such as PPSUs, which are settled for cash, rather than made exchangeable into shares of Class A common
stock, are only entitled to a Preferred Distribution, and are not included in BGC’s or Newmark’s fully
diluted share count
Quantile
Quantile Group Limited
Real GDP
Real Gross Domestic Product is a macroeconomic measure of the value of economic output adjusted for
price changes (i.e., inflation or deflation), which transforms the money-value measure, nominal GDP, into
an index for quantity of total output
Record Date
Close of business on November 23, 2018, in connection with the Spin-Off
REMIT
Regulation on Wholesale Energy Markets Integrity and Transparency
Repurchase Agreements
Securities sold under agreements to repurchase that are recorded at contractual amounts, including interest,
and accounted for as collateralized financing transactions
Reverse Repurchase
Agreements
Agreements to resell securities, with such securities recorded at the contractual amount, including accrued
interest, for which the securities will be resold, and accounted for as collateralized financing transactions
Revolving Credit Agreement
BGC Group’s unsecured senior revolving credit agreement with Bank of America, N.A., as administrative
agent, and a syndicate of lenders, dated as of November 28, 2018 and most recently amended and restated
on April 26, 2024 and amended on December 6, 2024. The Revolving Credit Agreement provides for a
maximum revolving loan balance of $700.0 million bearing interest at either SOFR or a defined base rate
plus additional margin, and has a maturity date of April 26, 2027
ROU
Right-of-use
RSUs
BGC or Newmark restricted stock units, payable in shares of BGC Class A common stock or Newmark
Class A common stock, respectively, held by certain employees of BGC or Newmark and other persons
who have provided services to BGC or Newmark, or issued in connection with certain acquisitions
RSU Tax Account
RSU Tax Accounts were issued by BGC in connection with the Corporate Conversion in the place of
certain non-exchangeable Preferred Units. The RSU Tax Accounts are settled for cash, rather than vesting
into shares of Class A common stock, may be entitled to a Preferred Return, and are not included in
BGC’s fully diluted share count. The RSU Tax Accounts were issued in connection with RSUs and are to
cover any withholding taxes to be paid when the RSUs vest into shares of BGC Class A common stock
Russia’s Invasion of Ukraine
Russia’s invasion of Ukraine, which led to imposed sanctions by the U.S., U.K., EU, and other countries
on Russian counterparties
Sage
Sage Energy Partners, LP, an energy and environmental brokerage firm that the Company announced
acquired on October 10, 2024
SBSEF
Security-based Swap Execution Facility
SEC
U.S. Securities and Exchange Commission
Securities Act
Securities Act of 1933, as amended
TERM
DEFINITION
10
SEF
Swap Execution Facility
Separation
Principal corporate transactions pursuant to the Separation and Distribution Agreement, by which BGC
Partners, BGC Holdings and BGC U.S. OpCo and their respective subsidiaries (other than the Newmark
Group) transferred to Newmark, Newmark Holdings and Newmark OpCo and their respective subsidiaries
the assets and liabilities of the BGC Entity Group relating to BGC’s real estate services business, and
related transactions, including the distribution of Newmark Holdings units to holders of units in BGC
Holdings and the assumption and repayment of certain BGC indebtedness by Newmark
Separation and Distribution
Agreement
Separation and Distribution Agreement, by and among the BGC Entity Group, the Newmark Group,
Cantor and BGC Global OpCo, originally entered into on December 13, 2017, as amended on November
8, 2018 and amended and restated on November 23, 2018
SMCR
Senior Managers Certification Regime
SOFR
Secured Overnight Financing Rate
SPAC
Special Purpose Acquisition Company
SPAC Investment Banking
Activities
Aurel’s investment banking activities with respect to SPACs
Spin-Off
Pro-rata distribution, pursuant to the Separation and Distribution Agreement, by BGC to its stockholders
of all the shares of common stock of Newmark owned by BGC Partners immediately prior to the
Distribution Date, with shares of Newmark Class A common stock distributed to the holders of shares of
BGC Class A common stock (including directors and executive officers of BGC Partners) of record on the
Record Date, and shares of Newmark Class B common stock distributed to the holders of shares of BGC
Class B common stock (Cantor and CFGM) of record on the Record Date, completed on the Distribution
Date
Standing Policy
In December 2010, as amended in 2013 and in 2017 and adopted by BGC Group in connection with the
Corporate Conversion, the Audit Committee and the Compensation Committee approved Mr. Lutnick’s
right, subject to certain conditions, to accept or waive opportunities offered to other executive officers to
monetize or otherwise provide liquidity with respect to some or all of their limited partnership units of
BGC Holdings or to accelerate the lapse of or eliminate any restrictions on equity awards
STP
Straight-Through Processing
Successor
Referring to BGC Group as the parent company for the period following the Corporate Conversion
Tax Act
Tax Cuts and Jobs Act enacted on December 22, 2017
TDRs
Troubled Debt Restructurings
The Ardonagh Group
The Ardonagh Group Limited; the U.K.’s largest independent insurance broker and purchaser of BGC’s
Insurance brokerage business completed on November 1, 2021
Tower Bridge
Tower Bridge International Services L.P., a subsidiary of the Company, which is 52%-owned by the
Company and 48%-owned by Cantor
TP ICAP
TP ICAP plc, an entity formed in December 2016, formerly known as Tullett
Tradeweb
Tradeweb Markets, Inc.
Tradition
Compagnie Financière Tradition SA, a Swiss based inter-dealer broker
Trident
Trident Brokerage Service LLC, a wholly owned subsidiary of the Company, acquired on February 28,
2023
Tullett
Tullett Prebon plc, a part of TP ICAP group and an interdealer broker, primarily operating as an
intermediary in the wholesale financial and energy sectors
U.K.
United Kingdom
TERM
DEFINITION
11
U.K. Partnership
BGC Services (Holdings) LLP, a wholly owned subsidiary of the Company
U.S. GAAP or GAAP
Generally Accepted Accounting Principles in the United States of America
UBT
Unincorporated Business Tax
VIE
Variable Interest Entity
Voice
Voice-only broking transactions executed by brokers over the telephone
TERM
DEFINITION
12
SPECIAL NOTE ON FORWARD-LOOKING INFORMATION
This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act. Any statements contained herein that are not statements of historical fact
may be deemed to be forward-looking statements. For example, words such as “may,” “will,” “should,” “estimates,” “predicts,”
“possible,” “potential,” “continue,” “strategy,” “believes,” “anticipates,” “plans,” “expects,” “intends,” and similar expressions
are intended to identify forward-looking statements. The information included herein is given as of the filing date of this
Annual Report on Form 10-K with the SEC, and future results or events could differ significantly from these forward-looking
statements. Such statements are based upon current expectations that involve risks and uncertainties. Factors that could cause
future results or events to differ from those expressed in these forward-looking statements include, but are not limited to, the
risks and uncertainties described or referenced in this Form 10-K under the headings “Item 1A—Risk Factors,” “Item 7—
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Forward-Looking Cautionary
Statements” and “Item 7A—Quantitative and Qualitative Disclosures About Market Risk.” Except to the extent required by
applicable law or regulation, the Company does not undertake to publicly update or revise any forward-looking statements,
whether as a result of new information, future events, or otherwise.
RISK FACTOR SUMMARY
The following is a summary of material risks that could affect our business, each of which may have a material adverse
effect on our business, financial condition, results of operations and prospects. This summary may not contain all of our
material risks, and it is qualified in its entirety by the more detailed risk factors set forth in Item 1A “Risk Factors.”
•
Our business, financial condition, results of operations and prospects have been and may continue to be affected both
positively and negatively by conditions in the global economy and financial markets generally.
•
Actions taken by central banks in major global economies, including with regards to interest rates, may have a material
negative impact on our businesses.
•
We may pursue opportunities including new business initiatives, strategic alliances, acquisitions, mergers, investments,
dispositions, joint ventures or other growth opportunities or transformational transactions (including hiring new
brokers and salespeople), which could present unforeseen integration obstacles or costs and could dilute our
stockholders. We may also face competition in our acquisition strategy or new business plans, and such competition
may limit such opportunities.
•
We are subject to certain risks relating to our indebtedness, including constraints on our ability to raise additional
capital, declines in our credit ratings and limitations on our financial flexibility to react to changes in the economy or
the financial services industry. We may need to incur additional indebtedness to finance our growth strategy, including
in connection with the re-positioning of aspects of our business to adapt to changes in market conditions in the
financial services industry.
•
We may not be able to protect our intellectual property rights or may be prevented from using intellectual property
necessary for our business.
•
Malicious cyber-attacks and other adverse events affecting our operational systems or infrastructure, or those of third
parties, could disrupt our business, result in the disclosure of confidential information, damage our reputation and
cause losses or regulatory penalties.
•
We may use artificial intelligence in our business, and challenges with properly managing its use could result in
competitive harm, regulatory action, legal liability and brand or reputational harm.
•
Leadership changes and the resulting transition following Howard Lutnick’s confirmation as the U.S. Secretary of
Commerce could have an adverse effect on our business.
•
The loss of one or more of our key executives, the development of future talent and the ability of certain key
employees to devote adequate time and attention to us are a key part of the success of our businesses, and failure to
continue to employ and have the benefit of these executives, may adversely affect our businesses and prospects.
13
•
If we fail to implement and maintain an effective internal control environment, our operations, reputation, and stock
price could suffer, we may need to restate our financial statements, and we may be delayed or prevented from
accessing the capital markets.
•
The financial services industry in general faces potential regulatory, litigation and/or criminal risks that may result in
damages or fines or other penalties as well as costs, and we may face damage to our professional reputation and legal
liability if our products and services are not regarded as satisfactory, our employees do not adhere to all applicable
legal and professional standards, or for other reasons, all of which could have a material adverse effect on our
businesses, financial condition, results of operations and prospects.
•
Because competition for the services of brokers, salespeople, managers, technology professionals and other front-
office personnel, in the financial services industry is intense, it could affect our ability to attract and retain a sufficient
number of highly skilled brokers or other professional services personnel, in turn adversely impacting our revenues,
resulting in a material adverse effect on our businesses, financial condition, results of operations and prospects.
•
Consolidation and concentration of market share in the banking, brokerage, exchange and financial services industries
could materially adversely affect our business, financial condition, results of operations and prospects because we may
not be able to compete successfully.
•
We are subject to risks inherent in doing business in international financial markets, international expansion and
international operations, including regulatory risks, political risks, and foreign currency risks.
•
Our activities are subject to credit and performance risks, which could result in us incurring significant losses that
could materially adversely affect our business, financial condition, results of operations and prospects.
•
If we were deemed an “investment company” under the Investment Company Act, the Investment Company Act’s
restrictions could make it impractical for us to continue our business.
•
We are a holding company, and accordingly are dependent upon distributions from BGC U.S. OpCo and BGC Global
OpCo to pay dividends, taxes and indebtedness and other expenses and to make repurchases.
•
In connection with his confirmation as U.S. Secretary of Commerce, Mr. Howard Lutnick has stated his intention to
divest his interests in us, Cantor and CFGM to comply with U.S. government ethics rules. We cannot predict the
consequences of this divestiture.
•
Our Class B common stock is held by Cantor and CFGM, whose interests may conflict with ours, and may exercise
their control in a way that favors their interests to our detriment, including in competition with us for acquisitions or
other business opportunities.
•
Purchasers, as well as existing stockholders, may experience significant dilution as a result of offerings of shares of
our Class A common stock. Our management will have broad discretion as to the timing and amount of sales of our
Class A common stock, as well as the application of the net proceeds of any such sales.
•
Ongoing scrutiny and changing expectations from stockholders, clients and customers with respect to the Company’s
corporate responsibility or ESG practices may result in additional costs or risks.
14
PART I
ITEM 1.
BUSINESS
Throughout this document, the terms the “Company,” “BGC,” “we,” “our,” and “us,” refer to: (i) following the
closing of the Corporate Conversion, effective at 12:02 am Eastern Time on July 1, 2023, BGC Group, Inc. and its consolidated
subsidiaries, including BGC Partners, Inc.; and (ii) prior to the closing of the Corporate Conversion, BGC Partners, Inc. and
its consolidated subsidiaries.
Our Business
We are a leading global marketplace, data, and financial technology company that 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 foreign exchange, energy, commodities, shipping, equities, and futures and options. Our business also provides network
and connectivity solutions, market data and related information services, and post-trade services.
Our integrated platform is designed to provide flexibility to customers with regard to price discovery, trade execution
and transaction processing, as well as accessing liquidity through our platforms, for transactions executed either OTC or
through an exchange. Through our electronic brands, we offer several trade execution, market infrastructure and connectivity
services, as well as post-trade services.
Our clients include many of the world’s largest banks, broker-dealers, trading firms, hedge funds, governments,
corporations, investment firms, commodity trading firms and end users, such as producers and consumers. BGC is a global
operation with offices across all major geographies, including New York and London, as well as in Bahrain, Beijing, Bogota,
Brisbane, Cape Town, Chicago, Copenhagen, Dubai, Dublin, Frankfurt, Geneva, Hong Kong, Houston, Johannesburg, Madrid,
Manila, Melbourne, Mexico City, Miami, Milan, Monaco, Nyon, Paris, Perth, Rio de Janeiro, Santiago, São Paulo, Seoul,
Shanghai, Singapore, Sydney, Tel Aviv, Tokyo, Toronto, Wellington and Zurich.
As of December 31, 2024, we had 2,161 brokers, salespeople, managers, technology professionals and other front-
office personnel across our businesses.
Our History
Our business originated from Cantor, one of the oldest and most established inter-dealer and wholesale brokerage
franchises in the financial intermediary industry. Cantor started our wholesale intermediary brokerage operations in 1972. In
1996, Cantor launched its eSpeed system, which revolutionized the way government bonds are traded in the inter-dealer market
by providing a Fully Electronic trading marketplace. eSpeed completed an initial public offering and began trading on Nasdaq
in 1999.
Cantor subsequently continued to operate its inter-dealer Voice and Hybrid brokerage businesses separately from
eSpeed.
Prior to the events of September 11, 2001, our financial brokerage business was widely recognized as one of the
leading full-service wholesale financial brokers in the world, with a rich history of developing innovative technological and
financial solutions.
After September 11, 2001, and the loss of the majority of our U.S.-based employees, our Voice financial brokerage
business operated primarily in Europe.
In August 2004, Cantor announced the reorganization and separation of its inter-dealer Voice and Hybrid brokerage
businesses into a subsidiary called “BGC,” in honor of B. Gerald Cantor, the pioneer in screen brokerage services and fixed
income market data products.
In April 2008, BGC and certain other Cantor assets merged with and into eSpeed, and the combined company began
operating under the name “BGC Partners, Inc.” In June 2013, we sold certain assets relating to our U.S. Treasury benchmark
business and the name “eSpeed” to Nasdaq. In 2011, we also acquired and built up a commercial real estate services business
called “Newmark,” which we spun-off to BGC’s stockholders in November 2018. In addition, we acquired and built-up an
insurance brokerage business, which we sold in November 2021. We also acquired the Futures Exchange Group from Cantor in
July 2021, which represents our futures exchange and related clearinghouse.
15
We have rebuilt our U.S. presence and have continued to expand our global footprint through the acquisition and
integration of established brokerage companies and the hiring of experienced brokers. Through these actions, we have been able
to expand our presence in key markets and position our business for sustained growth. Since 2015, our acquisitions have
included GFI, Sunrise Brokers, Poten & Partners, Ginga Petroleum, the Futures Exchange Group, Trident, ContiCap, and Sage.
Since the founding of eSpeed, we have continued to pioneer advances in electronic trading, market data, network and
post-trade services across the wholesale capital markets. Fenics, BGC’s higher-margin technology-driven business, has grown
significantly, supported by our investment in new trading technologies and platforms, as well as from trends of proliferating
electronic execution across the capital markets and the demand for data services.
Fenics is the foundation for our Fully Electronic and associated Hybrid transactions across all asset classes. Fenics’
offerings include Fully Electronic brokerage products and services, as well as offerings in data, network and post-trade services
across the Company. Our Fully Electronic standalone platforms include FMX UST, FMX FX, PortfolioMatch, and Fenics GO,
among others. Going forward, we expect Fenics to become an even more valuable part of BGC as it continues to grow.
On November 3, 2021, we announced FMX, which combined Fenics’ U.S. Treasury business with a state-of-the-art
U.S. Rates futures platform. On January 22, 2024, FMX received CFTC approval to operate an exchange for U.S. Treasury and
SOFR futures. On April 25, 2024, we announced that Bank of America, Barclays, Citi, Goldman Sachs, J.P. Morgan, Jump
Trading Group, Morgan Stanley, Tower Research Capital, and Wells Fargo became minority equity owners of FMX and
collectively invested $171.7 million 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. On September 23, 2024, FMX Futures Exchange launched the
trading of SOFR futures, the largest notional futures contract in the world.
Corporate Conversion
On July 1, 2023, BGC Partners completed its conversion from an Umbrella Partnership C-Corporation to a Full C-
Corporation in order to reorganize and simplify its organizational structure. As a result of the Corporate Conversion, BGC
Group became the public holding company for, and successor to, BGC Partners, and its Class A common stock began trading
on Nasdaq under the ticker symbol “BGC” in place of BGC Partners’ Class A common stock. Upon completion of the
Corporate Conversion, the former stockholders of BGC Partners and the former limited partners of BGC Holdings now
participate in the economics of the BGC businesses through BGC Group. The Corporate Conversion was intended to improve
transparency and reduce operational complexity across our business.
As a result of the Corporate Conversion, BGC Partners became a wholly owned subsidiary of BGC Group and BGC
Holdings reorganized from a Delaware limited partnership into a Delaware limited liability company through a merger with and
into Holdings Merger Sub, with Holdings Merger Sub continuing as a wholly owned subsidiary of BGC Group. Each
outstanding share of BGC Partners Class A common stock and BGC Partners Class B common stock was converted into one
share of BGC Group Class A common stock and BGC Group Class B common stock, respectively. Non-exchangeable limited
partnership units of BGC Holdings were converted into equity awards denominated in cash, restricted stock and/or RSUs of
BGC Group. Exchangeable limited partnership units of BGC Holdings were exchanged for shares of BGC Partners Class A
common stock prior to the Corporate Conversion and were converted into shares of BGC Group Class A common stock at the
closing of the Corporate Conversion. 64.0 million Cantor units were converted into shares of BGC Group Class B common
stock, subject to the terms and conditions of the Corporate Conversion Agreement, provided that a portion of the 64.0 million
shares of BGC Group Class B common stock issued to Cantor will exchange into BGC Group Class A common stock in the
event that BGC Group does not issue at least $75,000,000 in shares of BGC Group Class A common stock or BGC Group Class
B common stock in connection with certain acquisition transactions prior to the seventh anniversary of the Corporate
Conversion. BGC Group assumed all BGC Partners RSUs, RSU Tax Accounts or restricted stock awards outstanding as of June
30, 2023.
Please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Overview
and Business Overview—Corporate Conversion” for more information regarding the Corporate Conversion.
16
Recent Board of Directors and Executive Officers Changes
On February 18, 2025, Howard W. Lutnick was confirmed by the United States Senate as the 41st Secretary of
Commerce. Following his confirmation, on February 18, 2025, Mr. Howard Lutnick stepped down as Chairman of the Board
and Chief Executive Officer of the Company. On February 18, 2025, the Company appointed Brandon Lutnick, son of Mr.
Howard Lutnick, to serve as a member of the Board. Additionally, on February 18, 2025, the Company appointed Mr. Merkel
to serve as a member of the Board and as Chairman of the Board. On February 18, 2025, the Company appointed John A.
Abularrage, JP Aubin, and Sean A. Windeatt as Co-Chief Executive Officers of the Company and as the Principal Executive
Officers of the Company. Mr. Howard Lutnick has agreed to divest his interests in BGC to comply with U.S. government ethics
rules, which is expected to occur within 90 days following his confirmation, and does not expect any arrangement which
involves selling shares on the open market.
Recent Developments
On March 18, 2024, the Company joined the S&P SmallCap 600 Index. The S&P SmallCap 600 is designed to track
the performance of the small-cap sector of the U.S. stock market.
Overview of Our Products and Services
Financial Brokerage
While Voice and Hybrid brokerage revenues still represent the majority of BGC’s overall revenues, we continue to
convert our Voice and Hybrid brokerage business to our higher margin, technology-driven Fenics business, which has grown to
represent 25% of total BGC revenues during the fourth quarter and the year ended 2024. Over the past several years, we have
invested in, and developed, new state-of-the-art trading platforms, including FMX UST, FMX FX, FMX Futures Exchange,
PortfolioMatch, and Fenics GO, across Rates, FX, Equities, and Credit, respectively. We have also invested in, and deployed,
trading technology solutions across our entire business, including our Voice and Hybrid brokerage desks, with an aim to
increase our broker productivity and to accelerate trends of electronic conversion. Underpinning our efforts to automate and
electronify our overall brokerage business are macro trends across the capital markets, where the adoption of electronic trading
has accelerated in recent years.
We categorize our Fenics business as Fenics Markets and Fenics Growth Platforms as follows:
•
Fenics Markets includes the Fully Electronic portion of BGC’s brokerage business, data, network and post-
trade revenues that are unrelated to Fenics Growth Platforms, as well as Fenics Integrated revenues. Fenics
Integrated seamlessly integrates hybrid liquidity with customer electronic orders either by GUI and/or API.
Desks are categorized as “Fenics Integrated” if they utilize sufficient levels of technology such that
significant amounts of their transactions can be or are executed without broker intervention and have expected
pre-tax margins of at least 25%.
•
Fenics Growth Platforms includes FMX UST, FMX FX, FMX Futures Exchange, Lucera, PortfolioMatch,
Fenics GO, and our other newer standalone platforms. Revenues generated from data, network and post-trade
attributable to Fenics Growth Platforms are included within their related businesses.
We leverage our platforms to provide real-time product and price discovery information and straight-through
processing to our customers for an increasing number of products. Our end-to-end solution includes real-time and auction-based
transaction processing, credit and risk management tools, and back-end processing and billing systems. Customers can access
our trading application through our privately managed global high speed data network, over the Internet, or through third-party
communication networks.
FMX provides fully electronic trading in cash treasuries, foreign exchange and U.S. interest rate futures by combining
FMX’s U.S. Treasury business with our state-of-the-art FMX Futures Exchange. For more information about FMX, see “Item 7
—Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview and Business
Environment.”
17
ECS Brokerage
We provide brokerage services for most widely traded energy and commodities products, including futures and OTC
products covering refined and crude oil, power and electricity, natural gas, liquefied natural gas, environmental and emissions
products, weather derivatives, base metals, coal and soft commodities. We also provide brokerage services associated with the
shipping of certain energy and commodities products.
Over the past few years, we have expanded our ECS business through strategic acquisitions, hires, and organic growth.
In March 2019, we acquired Ginga Petroleum, which provides a comprehensive range of brokerage services for
physical and derivative energy products including naphtha, liquefied petroleum gas, fuel oil, biofuels, middle distillates,
petrochemicals and gasoline.
In November 2019, we expanded our shipping brokerage services through our acquisition of Poten & Partners, a
leading shipping brokerage, consulting and business intelligence firm specializing in liquefied natural gas, tanker and liquefied
petroleum gas markets. Founded over 80 years ago and with 160 employees worldwide, Poten & Partners provides its clients
with valuable insight into the international oil, gas and shipping markets.
In February 2023, we acquired Trident, which specializes in environmental products and OTC and exchange traded
energy products. Trident bolsters our leading environmental brokerage business and complements our existing energy
brokerage offerings.
In 2023, we announced the launch of our Weather Derivatives business, expanding BGC’s brokerage business into the
weather and climate space. The Weather Derivatives business helps market participants analyze climate-related risks and
mitigate their financial exposure. We are providing liquidity to these increasingly important markets as the role of weather and
climate change impacts the way risk is managed. The launch of this business highlights BGC’s commitment to expand and
explore new opportunities across the global energy and commodities space.
In October 2024, we acquired Sage, an energy and environmental brokerage firm, and announced we entered into a
definitive agreement to acquire OTC Global, the largest global independent institutional energy and commodities brokerage
firm.
Brokerage Categories
The following table identifies some of the key products that we broker, inclusive of those discussed above:
Category
Product Type
Rates
Interest Rate Swaps, Interest Rate Options, Listed Rates Products, U.S. Treasuries,
European Government Bonds, Other Global Government Bonds, Repurchase Agreements,
Money Markets, Agency Fixed Income
Credit
Corporate Bonds, High Yield Bonds, Emerging Market Bonds, Index CDS, Single Name
CDS, Exotic Credit Derivatives, Asset-Backed Securities, Loans, Structured Products
Foreign Exchange
Foreign Exchange Options, Spot FX, FX Forward, Non-Deliverable Forwards, Precious
Metals
ECS
Environmental/Emission Products, Weather Derivatives, Energy & Petrochemical
Consulting, Shipping Brokerage, Power, Liquefied Natural Gas, Natural Gas, Base Metals,
Dry Bulk (Coal & Iron Ore), Oil, Soft & Agricultural Products
Equities
OTC Equity Derivatives, Listed Equity Futures & Options, Delta One Product,
Convertibles, Cash Equities
Certain trades in these key product types settle for clearing purposes with CF&Co, one of our affiliates. CF&Co is a
member of FINRA and the FICC, a subsidiary of the DTCC. In addition, certain affiliated entities are subject to regulation by
the CFTC, including CF&Co and BGCF. For certain products, we, BGCF and other affiliates act in a matched principal or
principal capacity in markets by posting and/or acting upon quotes for our account. Such activity is intended, among other
things, to assist us and other affiliates in managing proprietary positions (including, but not limited to, those established as a
result of combination of trades and errors), facilitating transactions, framing markets, adding liquidity, increasing commissions
and attracting order flow.
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Technology Offerings
Our data, network and post-trade offerings provide a range of trade lifecycle services which include market data and
analytics services, infrastructure and connectivity solutions, and post-trade services, such as risk mitigation, matching, and other
data, network and post-trade optimization services. These businesses have highly recurring and compounding revenue bases,
which are reported within our Fenics business.
Fenics Market Data™ is a supplier of real-time, tradable, indicative, end-of-day and historical market data. Our market
data product suite includes fixed income, interest rate derivatives, credit derivatives, foreign exchange and money markets,
energy and commodities, equity derivatives and regulatory solution market data products and services. The data is sourced from
the Voice, Hybrid and Fully Electronic brokerage operations and made available to financial professionals, research analysts,
compliance and surveillance departments, and other market participants via direct data feeds and BGC-hosted FTP
environments, as well as via information platforms such as Bloomberg, LSEG Data & Analytics, ICE Data Services and other
select specialist vendors.
Through our network business, we provide customized screen-based market solutions to both related and unrelated
parties. Our clients are able to develop a marketplace, trade with their customers and access our network and our intellectual
property. We can add advanced functionality to enable our customers to distribute branded products to their customers through
online offerings and auctions, including private and reverse auctions, via our trading platform and global network.
As part of our network business, our Lucera® brand delivers high-performance technology solutions designed to be
secure and scalable and to power demanding financial applications across several offerings: LumeFX® (distributed FX
platform with managed infrastructure and software stack), LumeMarkets™ (multi-asset class aggregation platform), Connect™
(global SDN for rapid provisioning of connectivity to counter-parties), and Compute™ (on-demand, co-located compute
services in key financial data centers).
Through kACE2, our analytics brand, we offer derivative price discovery, pricing analysis, risk management and
trading software used by approximately 227 client sites in over 23 countries. Our clients include mid-tier banks, financial
institutions and corporate clients. Our Gateway module links our client base with their counterparties, trading venues and
regulators, and provides automated order flow, straight through processing, data distribution and regulatory reporting.
Our post-trade services include post-trade risk mitigation services that are designed to bring greater capital and
operational efficiency to the global derivatives market. Our post-trade services assist clients in managing the growing cost of
holding derivatives, while helping them to meet their regulatory mandates and promote sustainable growth and lower systemic
risk and to improve resiliency in the industry.
Industry Recognition
Our businesses have consistently won global industry awards and accolades in recognition of their performance and
achievements. Recent examples include:
• Fenics Market Data named Americas Data and Analytics Vendor of the Year at the GlobalCapital Americas
Derivatives Awards 2024
• Fenics Market Data named Best Provider of Broker Market Data at the TradingTech Insight Awards Europe and USA
2024 for the second consecutive year
• Fenics Market Data named Best Market Data Provider (Broker) at the Inside Market Data & Inside Reference Data
Awards 2024 for the third year in a row
• Fenics Market Data named Best Market Data Provider at the FX Markets Asia Awards 2024
• Fenics GO named OTC Trading Venue of the Year at the GlobalCapital Americas Derivatives Awards 2024
• Fenics GO named OTC Trading Venue of the Year at the Global and Americas Derivatives Awards 2024
• BGC Group named OTC Trading Venue of the Year at the GlobalCapital Americas Derivatives Awards 2024
• BGC Group named Interdealer Broker of the Year Europe and Asia at Global and Americas Derivatives Awards 2024
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Customers and Clients
We primarily serve the wholesale financial and energy, commodity, and shipping markets, with clients including many
of the world’s largest banks, brokerage houses, investment firms, hedge funds, investment banks, commodity trading firms and
end users, such as producers and consumers. Customers using our products and services also include professional trading firms,
futures commission merchants, and other professional market participants and financial institutions. Our market data products
and services are available through many platforms and are available to a wide variety of capital market participants, including
banks, brokerage firms, asset managers, hedge funds, investment analysts, compliance and surveillance professionals and
financial advisors. For the year ended December 31, 2024, our top ten customers, collectively, accounted for approximately
27.1% of our total revenue on a consolidated basis, and our largest customer accounted for approximately 4.8% of our total
revenue on a consolidated basis.
Sales and Marketing
Our brokers and salespeople are our primary marketing and sales resources, and utilize a combination of sales,
marketing and co-marketing/co-branding campaigns. Our sales and marketing programs are aimed at enhancing the ability of
our brokers to cross-sell effectively in addition to informing our customers about our product and service offerings. We
leverage our customer relationships through a variety of direct marketing and sales initiatives and build and enhance our brand
image through marketing and communications campaigns targeted at a diverse audience, including traders, potential partners
and the investor and media communities.
Our brokerage product team is composed of product managers who are each responsible for a specific part of our
brokerage business. The product managers seek to ensure that our brokers, across all regions, have access to technical expertise,
support and multiple execution methods to grow and market their business.
Our team of business development professionals is responsible for growing our global footprint through raising
awareness of our products and services. The business development team markets our products and services to new and existing
customers. As part of this process, they analyze existing levels of business with these entities in order to identify potential areas
of growth and also to cross-sell our multiple offerings.
Our Trading Technology
Pre-Trade Technology. Our financial brokers use a suite of pricing and analytical tools that have been developed both
in-house and in cooperation with specialist software suppliers. The pre-trade software suite combines proprietary market data,
pricing and calculation libraries, together with those outsourced from external providers. The tools in turn publish to a
normalized, global market data distribution platform, allowing prices and rates to be distributed to our proprietary network, data
vendor pages, secure websites and trading applications as indicative pricing.
Inter-Dealer and Wholesale Trading Technology. We utilize sophisticated proprietary electronic trading platforms to
provide execution and market data services to our customers. The services are available through our proprietary API, FIX and a
multi-asset proprietary trading platforms, operating under brands including BGC Trader™, CreditMatch®, Fenics®, FMX™,
GFI ForexMatch®, BGCForex™, BGCCredit™, BGCRates™, FMX FX™, FMX UST™, FMX NDF™, FMX Repo™,
FenicsDirect™, Fenics GO®, MidFX™, and GBX®. These platforms support a wide and constantly expanding range of
products and services, which include U.S. Treasuries and other government bonds, Repos, OTC interest rate derivatives in
multiple currencies, spot FX, NDFs, FX options, corporate bonds, credit derivatives and other products. Every product on the
platforms is supported in either view-only, Hybrid/managed or Fully Electronic mode, and can be transitioned from one mode
to the next in response to market demands. The flexible BGC technology stack is designed to support feature-rich workflows
required by the Hybrid mode as well as delivering high throughput and low transaction latency required by the Fully Electronic
mode. Trades executed by our customers in any mode are, when applicable, eligible for immediate electronic confirmation
through direct STP links as well as STP hubs. The BGC trading platform services are operated out of several globally
distributed data centers and delivered to customers over BGC’s global private network, third-party connectivity providers as
well as the Internet. BGC’s proprietary graphical user interfaces and the API/FIX connectivity are deployed at hundreds of
major banks and institutions and service thousands of users.
Post-Trade Straight Through Processing Technology. Our platform automates transaction processing, confirmation
and other functions, substantially improving and reducing the cost of many of our customers’ back offices and enabling STP. In
addition to our own system, confirmation and trade processing is also available through third-party hubs, including
MarkitWIRE, ICElink, Reuters RTNS, and STP in FIX for various banks.
20
We have electronic connections to most mainstream clearinghouses, including DTCC, CLS Group, Euroclear,
Clearstream, Monte Titoli, LCH, Eurex Clearing, CME Clearing and the OCC. As more products become centrally cleared, and
as our customers request that we use a particular venue, we expect to expand the number of clearinghouses to which we connect
in the future.
Systems Architecture. Our systems consist of layered components, which provide matching, credit management,
market data distribution, position reporting, customer display and customer integration. The private network currently operates
from six concurrent core data centers (three of which are in the U.K., and one each in Trumbull, Connecticut, Weehawken, New
Jersey and Secaucus, New Jersey) and many hub cities throughout the world acting as distribution points for all private network
customers. The redundant structure of our system provides multiple backup paths and re-routing of data transmission in the
event of failure.
In addition to our own network system, we also receive and distribute secure trading information from customers using
the services of multiple, major Internet service providers throughout the world. These connections enable us to offer our
products and services via the Internet to our global customers.
Software Development
We devote substantial efforts to the development and improvement of our Hybrid and Fully Electronic marketplaces
and licensed software products and services. We work with our customers to identify their specific requirements and make
modifications to our software, network distribution systems and technologies that are responsive to those needs. Our efforts
focus on internal development, strategic partnering, acquisitions and licensing.
Our Intellectual Property
We regard our technology and intellectual property rights as a critical part of our business. We hold various
trademarks, trade dress and trade names and rely on a combination of patent, copyright, trademark, service mark and trade
secret laws, as well as contractual restrictions, to establish and protect our intellectual property rights. We own numerous
domain names and have registered numerous trademarks and/or service marks in the United States and foreign countries. Our
trademark registrations must be renewed periodically, and, in most jurisdictions, every 10 years.
We have adopted a comprehensive intellectual property program to protect our proprietary technology and
innovations. We currently have licenses covering various patents from related parties. We also have agreements to license
technology that may be covered by several pending and/or issued U.S. patent applications, including relating to various aspects
of our electronic trading systems, both functional and design aspects. We have filed a number of patent applications to further
protect our proprietary technology and innovations and have received patents for some of those applications. We will continue
to file additional patent applications on new inventions, as appropriate, demonstrating our commitment to technology and
innovation.
Our patent portfolio continues to grow, and we continue to look for opportunities to license and/or otherwise monetize
the patents in our portfolio.
Competition
We encounter competition in all aspects of our business. Our existing and potential competitors include other
wholesale financial brokerage and inter-dealer brokerage firms, energy, commodity and shipping brokerage firms, multi-dealer
trading companies, financial technology companies, market data and information vendors, securities and futures exchanges,
electronic communications networks, crossing systems, software companies, financial trading consortia, as well as business-to-
business marketplace infrastructure companies. We compete primarily with other inter-dealer or wholesale financial brokers
and energy, commodity and shipping brokers for market share, brokers, salespeople and suitable acquisition candidates.
Inter-Dealer and Wholesale Financial Brokers
We primarily compete with two publicly traded, diversified inter-dealer and wholesale financial brokers, TP ICAP and
Tradition. Other competitors include Dealerweb, an inter-dealer and wholesale financial brokerage business within Tradeweb,
Marex Group, which focuses on energy and commodities brokerage, and a number of private firms that tend to specialize in
specific product areas or geographies.
21
Demand for wholesale brokerage services is directly affected by the overall level of economic activity, international
and domestic economic and political conditions, including central bank policies, broad trends in business and finance, including
employment levels, the level and volatility of interest rates, changes in and uncertainty regarding tax laws and substantial
fluctuations in the volume and price levels of securities transactions. Other significant factors affecting competition in the
brokerage industry are the quality and ability of professional personnel, the depth and pricing efficiency of the markets in which
the brokers transact, the strength of the technology used to service and execute on those markets and the relative prices of
products and services offered by the brokers and by competing markets and trading processes.
Market Data and Information
The majority of our large inter-dealer and wholesale financial broker competitors also sell proprietary market data and
information, which competes with our market data offerings. In addition to direct sales, we resell market data through large
market data and information providers. These companies have established significant presences on the vast majority of trading
desks across our industry. Some of these market data and information providers, such as Bloomberg L.P. and LSEG Data &
Analytics, include in their product mix electronic trading and execution of both OTC and listed products in addition to their
traditional market data offerings.
Growth in new trading venues has led to fragmentation of liquidity across the financial markets. Our network solutions
business helps aggregate liquidity and connect counterparties across these marketplaces. We compete with other market
infrastructure and connectivity providers, such as Pico, ION Group and Bloomberg.
Exchanges and Other Trading Platforms
Although our business will often use exchanges to execute and clear transactions brokered in both listed and OTC
markets, we believe that exchanges have sought and will seek to migrate products traditionally traded in OTC markets by inter-
dealer and wholesale financial brokers to exchanges. However, we believe that when a product goes from OTC to exchange-
traded, the underlying or related OTC market often continues to experience growth in line with the growth of the exchange-
traded contract. In addition, ICE operates both regulated exchanges and OTC execution services, and in the latter, it competes
directly with inter-dealer and wholesale financial brokers in energy, commodities, and credit products. ICE entered these OTC
markets primarily by acquiring independent OTC brokers. We also compete with CME across U.S. interest rates products,
including our FMX UST platform and FMX Futures Exchange as well as in foreign exchange products. We believe that it is
likely ICE, CME, or other exchange operators may seek to compete with us in the future by acquiring other such brokers, by
creating listed products designed to mimic OTC products, or through other means.
In addition to exchanges, other electronic trading platforms which primarily operate in the dealer-to-client markets,
including those run by MarketAxess and Tradeweb, now compete with us in the inter-dealer markets. At the same time, we
have begun to offer an increasing number of our products and services to the customers of firms like MarketAxess and
Tradeweb.
Banks and Broker-Dealers
Banks and broker-dealers have in the past created and/or funded consortia to compete with exchanges and inter-dealer
brokers. For example, CME’s wholesale businesses for fully electronic trading of U.S. Treasuries and spot foreign exchange
both began as dealer-owned consortia before being acquired by ICAP. An example of a current and similar consortium is
Tradeweb. Several large banks continue to hold public equity stakes in Tradeweb. LSEG is Tradeweb’s single largest
shareholder. Although Tradeweb operates primarily as a dealer to customer platform, some of its offerings include a voice and
electronic inter-dealer platform. Tradeweb’s management has previously said that it would like to further expand into other
inter-dealer markets, and in June 2021, it acquired Nasdaq’s U.S. fixed income electronic trading platform, formerly known as
eSpeed. In 2013, BGC sold the eSpeed platform to Nasdaq, and subsequently launched a competing platform, FMX UST.
In addition, certain investment management firms that traditionally deal with banks and broker-dealers have expressed
a desire to have direct access to certain parts of the wholesale financial markets via firms such as ours. We believe that over
time, interdealer-brokers will therefore gain a growing percentage of the sales and trading market currently dominated by banks
and broker-dealers. Since their collective revenues are many times those of the global inter-dealer market, we believe that
gaining even a small share of banks and broker-dealers’ revenues could lead to a meaningful increase in our revenues.
Additionally, wholesale financial brokers have aimed to grow their agency brokerage businesses, which typically serve a
broader client set, including banks, broker-dealers, and institutional clients, such as TP ICAP’s acquisition of Liquidnet in
March 2021.
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Seasonality
Traditionally, the financial markets around the world generally experience lower volume during the late summer and
toward the end of the year due to a slowdown in the business environment around holiday seasons. Therefore, our revenues tend
to be strongest in the first quarter and lowest in the second half of the year. For the year 2024, we earned approximately 25.6%
of our revenues in the first quarter, while in 2023 we earned 26.4% of our revenues in the first quarter.
Regulation
U.S. Regulation
The financial services industry in the United States is subject to extensive regulation under both federal and state laws.
As registered broker-dealers, introducing brokers and FCMs, and other types of regulated entities as described below, certain of
our subsidiaries are subject to laws and regulations which cover all aspects of financial services, including sales methods, trade
practices, use and safekeeping of customers’ funds and securities, minimum capital requirements, recordkeeping, business
practices, securities lending and financing of securities purchases and the conduct of associated persons. We and our
subsidiaries also are subject to the various anti-fraud provisions of the Securities Act, the Exchange Act, the Commodity
Exchange Act, certain state securities laws and the rules and regulations thereunder. We also may be subject to vicarious and
controlling person liability for the activities of our subsidiaries and our officers, employees and affiliated persons.
The SEC is the federal agency primarily responsible for the administration of federal securities laws, including
adopting rules and regulations applicable to broker-dealers (other than government securities broker-dealers) and enforcing both
its rules regarding broker-dealers and the Treasury’s rules regarding government securities broker-dealers. In addition, we
operate a number of platforms that are governed pursuant to SEC Regulation ATS. Broker-dealers are also subject to regulation
by state securities administrators in those states in which they conduct business or have registered to do business. In addition,
Treasury rules relating to trading government securities apply to such activities when engaged in by broker-dealers. The CFTC
is the federal agency primarily responsible for the administration of federal commodities future laws and other acts, including
the adoption of rules applicable to FCMs, DCMs and SEFs such as BGC Derivative Markets and GFI Swaps Exchange LLC.
Much of the regulation of broker-dealers’ operations in the United States has been delegated to self-regulatory
organizations. These self-regulatory organizations adopt rules (which are subject to approval by the SEC) that govern the
operations of broker-dealers and government securities broker-dealers and conduct periodic inspections and examinations of
their operations. In the case of our U.S. broker-dealer subsidiaries, the principal self-regulatory organization is FINRA. FINRA
was formed from the consolidation of the National Association of Securities Dealers’ member regulation operations and the
regulatory arm of the NYSE Group to act as the self-regulatory organization for all broker-dealers doing business within the
United States. Accordingly, our U.S. broker-dealer subsidiaries are subject to both scheduled and unscheduled examinations by
the SEC and FINRA. In our futures-related activities, our subsidiaries are also subject to the rules of the CFTC, futures
exchanges of which they are members and the NFA, a futures self-regulatory organization.
The changing regulatory environment, new laws that may be passed by Congress, and rules that may be promulgated
by the SEC, the Treasury, the Federal Reserve Bank of New York, the CFTC, the NFA, FINRA and other self-regulatory
organizations, or changes in the interpretation or enforcement of existing laws and rules, if adopted, may directly affect our
operations and profitability and those of our competitors and customers and of the securities markets in which we participate in
a way that could adversely affect our business.
The SEC, self-regulatory organizations and state securities administrators conduct informal and formal investigations
of possible improprieties or illegal action by broker-dealers and their “associated persons,” which could be followed by the
institution of administrative, civil and/or criminal proceedings against broker-dealers and/or “associated persons.” Among the
sanctions that may result if administrative, civil or criminal proceedings were ever instituted against us or our “associated
persons” are injunctions, censure, fines, penalties, the issuance of cease-and-desist orders or suspension or expulsion from the
industry and, in rare instances, even imprisonment. The principal purpose of regulating and disciplining broker-dealers is to
protect customers and the securities markets, rather than to protect broker-dealers or their creditors or equity holders. From time
to time, our “associated persons” have been and are subject to routine investigations, none of which to date have had a material
adverse effect on our business, financial condition, results of operations or prospects.
Regulators and legislators in the U.S. and EU continue to craft new laws and regulations for the global OTC
derivatives markets. The Dodd-Frank Act mandates or encourages several reforms regarding derivatives, including new
regulations for swaps markets creating impartiality considerations, additional pre- and post-trade transparency requirements,
and heightened collateral or capital standards, as well as recommendations for the obligatory use of central clearing for most
standardized derivatives. The law also requires that standardized OTC derivatives be traded in an open and non-exclusionary
manner on a DCM or a SEF.
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BGC Derivative Markets and GFI Swaps Exchange LLC, our subsidiaries, operate as SEFs. Mandatory Dodd-Frank
Act compliant execution on SEFs by eligible U.S. persons for “made available to trade” products and a wide range of other
rules relating to the execution and clearing of derivative products have been implemented. We also own ELX, which became a
dormant contract market on July 1, 2017, and in July 2021, we completed the purchase of the CX Futures Exchange (now FMX
Futures Exchange) from Cantor, which represents our futures exchange and related clearinghouse. These rules require
authorized execution facilities to maintain robust front-end and back-office IT capabilities and to make large and ongoing
technology investments. These execution facilities may be supported by a variety of Voice and auction-based execution
methodologies, and our Hybrid and Fully Electronic trading capability have performed strongly in this regulatory environment.
On June 25, 2020, the CFTC approved a final rule prohibiting post-trade name give-up for swaps executed,
prearranged or pre-negotiated anonymously on or pursuant to the rules of a SEF and intended to be cleared. The rule provides
exemptions for package transactions that include a component transaction that is not a swap that is intended to be cleared. The
rule went into effect on November 1, 2020 for swaps subject to the trade execution requirement under the Commodity
Exchange Act Section 2(h)(8) and July 5, 2021 for swaps not subject to the trade execution requirement but intended to be
cleared.
On November 2, 2023, the SEC adopted Regulation SE under the Exchange Act to create a regime for the registration
and regulation of SBSEFs. The SEC rules regarding the over-the-counter derivatives market seek to harmonize as closely as
practicable with parallel rules of the CFTC that govern SEFs and swap execution generally. Among other things, Regulation SE
under the Exchange Act made changes to implement the Exchange Act’s trade execution requirement for security-based swaps
and address the cross-border application of that requirement; implement Section 765 of the Dodd-Frank Act to mitigate
conflicts of interest at SBSEFs and national securities exchanges that trade security-based swaps; and promote consistency
between proposed Regulation SE and existing rules under the Exchange Act. Any entity that meets the definition of a SBSEF
must file an application to register with the SEC within 180 days of the effective date of February 13, 2024.
In August 2024, GFI Swaps Exchange LLC submitted an application to the SEC to become an SEC registered SEF.
On January 29, 2025 the SEC approved GFI Swaps Exchange LLC’s application to be an SEC registered SEF which will be
effective on February 28, 2025. In addition, on behalf of a number of our foreign platforms, we have requested an exemption
from registration as an SEC SEF. The exemptive relief is pending approval by the SEC.
The SEC also adopted final rules on December 13, 2023 regarding central clearing of certain secondary market
repurchase and reverse repurchase transactions and secondary market purchase and sale transactions involving U.S. Treasury
securities. The central clearing mandate will impact certain market participants who do not clear today, and some have
expressed concerns about the potential impact of additional clearing costs that may impact liquidity. The full impact of this
change, and what effect it will have, whether positive or negative, on our industry, our clients or us is unknown at this time.
On February 6, 2024, the SEC adopted Exchange Act Rules 3a5-4 and 3a44-2, which expanded the definitions of
“dealer” and “government securities dealer” under the Exchange Act to cover additional market participants engaged in
liquidity-providing activities. The final rules were published in the Federal Register on February 29, 2024, and were effective as
of April 29, 2024 with a compliance deadline one year later on April 29, 2025. These rules provide a new standard for
determining what it means for a person’s securities activities to be conducted “as a part of a regular business” within the
definitions of “dealer” and “government securities dealer,” essentially capturing market participants who regularly express
trading interest on both sides of the market and earn revenue primarily from bid-ask spreads. This new standard requires such
market participants to register as dealers if they meet the criteria. This may have an impact on some of our clients; however, it is
not expected to materially affect us or our operational workflows.
On October 25, 2024, the SEC adopted rule amendments and a new rule to improve the resilience and recovery and
wind-down planning of covered clearing agencies. The rule amendments establish new requirements regarding a covered
clearing agency’s collection of intraday margin as well as a covered clearing agency’s reliance on substantive inputs to its risk-
based margin model. The new rule prescribes requirements for the contents of a covered clearing agency’s recovery and wind-
down plan. The full impact of this change, whether positive or negative, on our industry, our clients or us is unknown at this
time.
In addition, several state laws that have recently come into effect, and may come into effect in the future, have created
and will create new compliance obligations in relation to personal data.
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U.K. Regulation
The FCA is the relevant statutory regulator for the United Kingdom financial services industry. The FCA’s objectives
are to protect customers and financial markets, protect and enhance the integrity of the United Kingdom financial system and
promote competition between financial services providers. It has broad rule-making, investigative and enforcement powers
derived from the Financial Services and Markets Act 2000 and subsequent and derivative legislation and regulations. The
FCA’s recent focus has been on financial and operational resilience, and promoting market integrity. Currently, we have
subsidiaries regulated by the FCA (some include BGC Brokers L.P., GFI Securities Limited, and GFI Brokers Limited).
From time to time, we have been and are subject to periodic examinations, inspections and investigations, including
periodic risk assessment and related reviews of our U.K. group. As a result of such reviews, we may be required to include or
enhance certain regulatory structures and frameworks in our operating procedures, systems and controls. When acquiring
control of regulated entities, we may be required to obtain the consent of their applicable regulator.
The FCA has in the past developed a practice of requiring senior officers of regulated firms to provide individual
attestations or undertakings as to the status of a firm’s control environment, compliance with specific rules and regulations, or
the completion of required tasks. Officers of BGC Brokers L.P. and GFI Brokers Limited have previously given such
attestations or undertakings and may do so again in the future. Similarly, the FCA can seek a voluntary requirement notice,
which is a voluntary undertaking on behalf of a firm that is made publicly available on the FCA’s website. The SMCR came
into effect in the U.K. on December 9, 2019 for FCA solo-regulated firms. Personal accountability requirements fall on senior
managers, and a wider population of U.K. staff are subject to certification requirements and conduct rules. SMCR has increased
the cost of compliance and will potentially increase financial penalties for non-compliance.
European Regulation
The EMIR Directive on OTC derivatives, central counterparties and trade repositories was adopted in July 2012.
EMIR fulfills several of the EU’s G20 commitments to reform OTC derivatives markets. The reforms are designed to reduce
systemic risk and bring more transparency to both OTC and listed derivatives markets.
Along with the implementation of EMIR reporting requirements, the REMIT Implementation Acts became effective
on January 7, 2015. The REMIT Implementation Acts developed by the European Commission define the details of reporting
under REMIT, drawing up the list of reportable contracts and derivatives; defining details, timing and form of reporting, and
establishing harmonized rules to report that information to the ACER. They enable ACER to collect information in relation to
wholesale energy market transactions and fundamentals through the Agency’s REMIT Information System (ARIS), to analyze
this data to detect market abuse and to report suspicious events to the National Competent Authorities, which are responsible
for investigating these matters further, and if required, imposing sanctions. Market participants and third parties reporting on
their behalf have had to: (i) report transactions executed at organized marketplaces and fundamental data from the central
information transparency platforms; and (ii) report transactions in the remaining wholesale energy contracts (OTC standard and
non-standard supply contracts, transportation contracts) and additional fundamental data.
To achieve a high level of harmonization and convergence in regular supervisory reporting requirements, the
Committee of European Banking Supervisors issued guidelines on prudential reporting with the aim of developing a
supervisory reporting framework based on common formats, known as COREP. COREP has become part of European Banking
Authorities’ implementing technical standards on reporting under Basel III. Basel III (or the Third Basel Accord) is a global
regulatory standard on bank capital adequacy, stress testing and market liquidity risk introduced by bank regulators in most, if
not all, of the world’s major economies. Basel III is designed to strengthen bank capital requirements and introduces new
regulatory requirements on bank liquidity and bank leverage. The ongoing adoption of these rules could restrict the ability of
our large bank and broker-dealer customers to operate proprietary trading businesses and to maintain current capital market
exposures under the present structure of their balance sheets, and will cause these entities to need to raise additional capital in
order to stay active in our marketplaces. Meanwhile, global “Basel IV” standards are expected be adopted in the years to come.
Much of our global derivatives volumes continue to be executed by non-U.S. based clients outside the United States
and subject to local prudential regulations. As such, we will continue to operate a number of European regulated venues in
accordance with EU or U.K. legislation and licensed by EU-based national supervisors or the FCA. These venues are also
operated for non-derivative instruments for these clients. MiFID II was published by the European Securities and Markets
Authority in September 2015 and implemented in January 2018 and introduced important infrastructural changes.
MiFID II requires a significant part of the market in these instruments to trade on trading venues subject to
transparency regimes, not only in pre- and post-trade prices, but also in fee structures and access. In addition, it has impacted a
number of key areas, including corporate governance, transaction reporting, pre- and post-trade transparency, technology
synchronization, best execution and investor protection.
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MiFID II was intended to help improve the functioning of the EU single market by achieving a greater consistency of
regulatory standards. By design, therefore, it was intended that EU member states should have very similar regulatory regimes
in relation to the matters addressed to MiFID. MiFID II has also introduced a new regulated execution venue category called an
OTF that captures much of the voice-and hybrid-oriented trading in the EU. Much of our existing EU derivatives and fixed
income execution business now take place on OTFs. Further to its decision to leave the EU, the U.K. has implemented MIFID
II’s requirements into its own domestic legislation. Brexit may impact future market structures and MiFID II rulemaking and
implementation due to potential changes in mutual passporting and equivalence arrangements between the U.K. and EU
member states. See “— Brexit” below.
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 Capital Requirements Directive 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 was September 30, 2024 for the U.K. We are in compliance with the reporting enhancements. These
rules 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.
At the end of 2024, a new European Commission took office which may, over the course of its five-year mandate,
introduce new legislative proposals for the financial services sector that could change the Brexit landscape for EU and U.K.
financial firms alike. We are unable to predict how any of these potential new laws and proposed rules and regulations in the
U.S., the EU or the U.K. will be implemented or in what form, or whether any additional or similar changes to existing statutes,
rules and regulations, including the interpretation or implementation thereof or a relaxation or other amendment of existing
rules and regulations, will occur in the future.
Rights in relation to an individual’s personal data in the EU and U.K. are governed respectively by the GDPR in the
EU and the equivalent Data Protection Act 2018 in the U.K. Since May 25, 2018, when these two pieces of legislation came
into effect, we have been subject to new compliance obligations in relation to such personal data and the possibility of
significant financial penalties for non-compliance.
The FCA introduced the “Consumer Duty” in July 2023. The purpose of this regulation is to enhance the protection of
retail consumers in financial markets. Some other relatively minor divergence of U.K. regulation from EU regulation has
occurred since the implementation of Brexit. While we generally believe the net impact of the rules and regulations are positive
for our business, it is possible that unintended consequences of the rules and regulations may materially adversely affect us in
ways yet to be determined.
The Digital Operational Resilience Act (“DORA”) became effective as of January 17, 2025. It is an EU Regulation
that establishes an information and communication technology, or ICT, risk management framework for the EU financial
sector. DORA establishes technical standards that EU financial entities must implement by January 2025 and imposes
requirements relating to risk management, reporting, and information and communications technology service provider
oversight. The implementation of DORA in January 2025 represents a key delivery of the EU’s strategic initiatives and
supervisors will assess compliance with DORA as part of their efforts to achieve the Union Strategic Supervisory Priorities
(“USSPs”) broader strategic goals. For the rest of 2025 and into 2026, we expect National Competent Authorities (“NCAs”)
will continue to implement and monitor the focus areas outlined in the USSPs, adjusting their supervisory approaches as
necessary to address emerging risks and developments.
Brexit
On January 1, 2021, the U.K. formally left the EU and U.K.-EU trade became subject to a new agreement that was
concluded in December of 2020. Financial services fall outside of the scope of this trade agreement. At the time the relationship
was expected to be determined by a series of “equivalence decisions,” each of which would grant mutual market access for a
limited subset of financial services where either party finds the other party has a regulatory regime that achieves similar
outcomes to its own. In March 2021, the U.K. and EU agreed on a Memorandum of Understanding on Financial Services
Regulatory Cooperation which creates a structure for dialogue but does not include commitments on equivalence.
We implemented plans to ensure continuity of service in Europe and continue to have regulated offices in place in
many of the major European markets. As part of our ongoing Brexit strategy, ownership of BGC Madrid, Copenhagen and
Frankfurt and GFI Paris, Madrid and Dublin branches was transferred to Aurel BGC SAS (a French-based operation and
therefore based in the EU) in July 2020. We have been generally increasing our footprint in the EU which includes the
establishment of a new branch office of Aurel BGC SAS in Milan and an office in Monaco under a local Monaco subsidiary.
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Regardless of these and other mitigating measures, our European headquarters and largest operations are in London,
and market access risks and uncertainties have had and could continue to have a material adverse effect on our customers,
counterparties, business, prospects, financial condition and results of operations. Furthermore, in the future, the U.K. and EU’s
regulation may diverge, which could disrupt and increase the costs of our operations, and result in a loss of existing levels of
cross-border market access.
Other Regulation
Our subsidiaries that have foreign operations are subject to regulation by the relevant regulatory authorities and self-
regulatory organizations in the countries in which they do business. The following table sets forth certain jurisdictions, other
than the U.S., in which we do business and the applicable regulatory authority or authorities of each such jurisdiction:
Jurisdiction
Regulatory Authorities/Self-Regulatory
Organizations
Argentina
Comisión Nacional de Valores
Australia
Australian Securities and Investments Commission and Australian Securities Exchange
Bahrain
The Central Bank of Bahrain
Brazil
Brazilian Securities and Exchange Commission, the Central Bank of Brazil, BM&F
BOVESPA and Superintendencia de Seguros Privados
Canada
Ontario Securities Commission, Autorite des Marches Financiers (Quebec), Investment
Industry Regulatory Organization of Canada (IIROC)
Chile
Superintendencia de Valores y Seguros
China
China Banking Regulatory Commission, State Administration of Foreign Exchange
Colombia
Superintendencia Financiera de Colombia
Denmark
Finanstilsynet
Dubai International Financial
Centre
Dubai Financial Supervisory Authority
France
ACPR (L’Autorité de Contrôle Prudentiel et de Résolution), AMF (Autorité des Marchés
Financiers)
Germany
Bundesanstalt für Finanzdienstleistungsaufsicht (BAFIN)
Hong Kong
Hong Kong Securities and Futures Commission and The Hong Kong Monetary Authority
Ireland
Central Bank of Ireland
Israel
Israel Securities Authority
Italy
Commissione Nazionale Per Le Societa E La Borsa (CONSOB)
Japan
Japanese Financial Services Agency, Japan Securities Dealers Association and the
Securities and Exchange Surveillance Commission
Mexico
Banking and Securities National Commission, Comision Nacional Bancaria y de Valores
(CNBV)
Monaco
Commission for the Control of Financial Affairs (CCAF)
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Peru
Ministerio de Economica y Finanzas
Philippines
Securities and Exchange Commission
Russia
Federal Service for Financial Markets
Singapore
Monetary Authority of Singapore
South Africa
Johannesburg Stock Exchange
South Korea
Financial Services Commission
Spain
Comision Nacional del Mercado de Valores (CNMV)
Switzerland
Financial Markets Supervisory Authority (FINMA), Swiss Federal Banking Commission
United Kingdom
Financial Conduct Authority
While we continue to have a compliance framework in place to comply with both existing and proposed rules and
regulations, it is possible that the existing regulatory framework may be amended, which amendments could have a positive or
negative impact on our business, financial condition, results of operations and prospects.
Capital Requirements
U.S.
Every U.S.-registered broker-dealer is subject to the Uniform Net Capital Requirements. FCMs, such as our
subsidiary, Mint Brokers, are also subject to CFTC capital requirements. These requirements are designed to ensure financial
soundness and liquidity by prohibiting a broker or dealer from engaging in business at a time when it does not satisfy minimum
net capital requirements.
In the United States, net capital is essentially defined as net worth (assets minus liabilities), plus qualifying
subordinated borrowings and less certain mandatory deductions that result from excluding assets that are not readily convertible
into cash and from conservatively valuing certain other assets, such as a firm’s positions in securities. Among these deductions
are adjustments, commonly referred to as “haircuts,” to the market value of securities positions to reflect the market risk of such
positions prior to their liquidation or disposition. The Uniform Net Capital Requirements also impose a minimum ratio of debt
to equity, which may include qualified subordinated borrowings.
Regulations have been adopted by the SEC that prohibit the withdrawal of equity capital of a broker-dealer, restrict the
ability of a broker-dealer to distribute or engage in any transaction with a parent company or an affiliate that results in a
reduction of equity capital or to provide an unsecured loan or advance against equity capital for the direct or indirect benefit of
certain persons related to the broker-dealer (including partners and affiliates) if the broker-dealer’s net capital is, or would be as
a result of such withdrawal, distribution, reductions, loan or advance, below specified thresholds of excess net capital. In
addition, the SEC’s regulations require certain notifications to be provided in advance of such withdrawals, distributions,
reductions, loans and advances that exceed, in the aggregate, 30% of excess net capital within any 30-day period. The SEC has
the authority to restrict, for up to 20 business days, such withdrawal, distribution or reduction of capital if the SEC concludes
that it may be detrimental to the financial integrity of the broker-dealer or may expose its customers or creditors to loss. Notice
is required following any such withdrawal, distribution, reduction, loan or advance that exceeds, in the aggregate, 20% of
excess net capital within any 30-day period. The SEC’s regulations limiting withdrawals of excess net capital do not preclude
the payment to employees of “reasonable compensation.”
Four of our subsidiaries, BGCF, GFI Securities LLC, FMX Execution, LLC and Mint Brokers, are registered with the
SEC and are subject to the Uniform Net Capital Requirements. As an FCM, Mint Brokers is also subject to CFTC minimum
capital requirements. BGCF, GFI Securities LLC, FMX Execution, LLC, Amerex Brokers LLC, Sage Refined Products,
Liquidity Partners, IVG Energy Ltd. and Trident Brokerage Services LLC are registered as Introducing Brokers with the NFA.
BGCF is also a member of the FICC, which imposes capital requirements on its members.
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In addition, our SEFs, BGC Derivative Markets and GFI Swaps Exchange LLC are required to maintain financial
resources to cover operating costs for at least one year, keeping at least enough cash or highly liquid securities to cover six
months’ operating costs. The Company also operates a DCM, FMX Futures Exchange, and DCO, CX Clearinghouse, L.P.,
through the Futures Exchange Group, which are required to maintain financial resources to cover operating costs for at least one
year, keeping at least enough cash or highly liquid securities to cover six months’ operating costs. Compliance with the
Uniform Net Capital Requirements may limit the extent and nature of our operations requiring the use of our registered broker-
dealer subsidiaries’ capital, and could also restrict or preclude our ability to withdraw capital from our broker-dealer
subsidiaries or SEFs.
Non-U.S.
Our international operations are also subject to capital requirements in their local jurisdiction. BGC Brokers L.P., GFI
Brokers Limited, and GFI Securities Limited, which are based in the U.K., are currently subject to solo capital requirements
established by the FCA’s Investment Firm Prudential Regime. In addition, BGC European Holdings LP is subject to the FCA’s
consolidated capital requirements. The capital requirements of our French entities (and their EU branches) are predominantly
set by ACPR and AMF. U.K. and EU authorities apply stringent provisions with respect to capital applicable to the operation of
these brokerage firms, which vary depending upon the nature and extent of their activities.
In addition, the majority of our other foreign subsidiaries are subject to similar regulation by the relevant authorities in
the countries in which they do business. Additionally, certain other of our foreign subsidiaries are required to maintain non-U.S.
net capital requirements. For example, in Hong Kong, BGC Securities (Hong Kong), LLC, GFI (HK) Securities LLC and
Sunrise Brokers (Hong Kong) Limited are regulated by the Securities and Futures Commission. BGC Capital Markets (Hong
Kong) Limited and GFI (HK) Brokers Ltd are regulated by The Hong Kong Monetary Authority. All are subject to Hong Kong
net capital requirements. In France, Aurel BGC SAS and BGC France Holdings; in Australia, Fixed Income Solutions Pty Ltd
and BGC Partners (Australia) Pty Limited; in Japan, BGC Shoken Kaisha Limited’s Tokyo branch and BGC Capital Markets
Japan LLC’s Tokyo Branch; in Singapore, BGC Partners (Singapore) Limited, GFI Group Pte Ltd and Ginga Global Market Pte
Ltd; in South Korea, BGC Capital Markets & Foreign Exchange Broker (Korea) Limited and GFI Korea Money Brokerage
Limited; in the Philippines, GFI Group (Philippines) Inc., all have net capital requirements imposed upon them by local
regulators. In addition, the LCH (London International Financial Futures and Options Exchange/London Metal Exchange)
clearing organization, of which BGC Brokers L.P. is a member, also imposes minimum capital requirements. In Latin America,
BGC Liquidez Distribuidora De Titulos E Valores Mobiliarios Ltda. (Brazil) has net capital requirements imposed upon it by
local regulators.
We had net assets in our regulated subsidiaries of $751.0 million and $734.1 million for the years ended December 31,
2024 and 2023, respectively.
Human Capital Management
Unless the context indicates otherwise, references in this Human Capital Management section to our “employees”
include our professionals who are independent contractors.
Our Fundamental Values
BGC is an organization built on strong values, employee engagement and ownership. At our core, we are committed to
our employees by providing an opportunity to participate in our success. We believe that by cultivating a dynamic mix of
people and ideas, we enrich the performance of our business, the experience of our employee base and the dynamism of the
communities in which we operate. We value hard work, innovation, superior client service, strong ethics and governance, equal
opportunities, and philanthropy. These values are woven into our corporate culture. We believe these values foster sustainable,
profitable growth. We strive to be exemplary corporate citizens and honor high ethical principles in our interactions with other
businesses, our employees and the communities in which we live and work.
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Workforce
As of December 31, 2024, we employed approximately 4,011 employees in 27 countries spread across five continents.
Within this total, 99% of our employee base was comprised of full-time employees. Brokers, salespeople, managers, technology
professionals and other front-office personnel across our business comprise approximately 2,161 employees, representing
53.9% of the total workforce. Approximately 29.8% of our brokers, salespeople, managers, technology professionals and other
front-office personnel were based in the Americas, and approximately 50.1% were based in Europe, the Middle East and Africa,
with the remaining approximately 20.0% based in the Asia-Pacific region. Various of our employees also work for Cantor and
its affiliates and provide services to us pursuant to the Administrative Services Agreement and devote only a portion of their
time to our business, and therefore have not been included in the counts above. Generally, our employees are not subject to any
collective bargaining agreements, except for certain of our employees based in our Latin American and European offices that
are covered by the national, industry-wide collective bargaining agreements relevant to the countries in which they work.
We have invested significantly in our human capital resources through acquisitions, and the hiring of new brokers,
salespeople, managers, technology professionals and other front-office personnel. The business climate for these acquisitions
and recruitment has been competitive, and it is expected that these conditions will persist for the foreseeable future. We have
been able to attract businesses and brokers, salespeople, managers, technology professionals and other front-office personnel to
our platform as we believe they recognize that we have the scale, technology, experience and expertise to succeed.
Human Capital Measures and Objectives
In operating our business, we focus on certain human capital measures and objectives that are key drivers of our
revenues and margins. We continually work to expand our trading across more products and geographical regions and to grow
our Fully Electronic business while seeking to manage our human capital resources to maximize our profitability in the face of
shifting demands and conditions.
Our key human capital measures and objectives include front-office employee headcount (described above) and
average revenue per front-office employee. As we continue to deepen the integration of Fenics technology solutions into our
workflows, and convert more of our Voice and Hybrid businesses to our Fenics businesses, we expect our average revenue per
front-office employee to continue to improve. As of December 31, 2024, our front-office revenue-generating headcount was
approximately 2,161, up 2.7% from 2,104 a year ago due to acquisitions and investments made to broaden our existing product
offerings. Compared to the prior year period, average revenue per front-office employee for the year ended December 31, 2024,
increased by 6.3% to approximately $1.0 million, an all-time record. We constantly manage our cost-base and may engage in
cost-savings initiatives and restructurings in order to improve our margins.
We invest heavily in developing our technology and new products and services in order to drive increased front-office
productivity and generate higher margins, in particular with respect to our Fenics businesses. For example, converting Voice
and Hybrid trading to Fully Electronic trading generally improves our margins as automated and electronic trading allows the
same number of employees to manage a greater volume of trades resulting in a decrease in the marginal cost of trading. As our
overall business becomes more electronic, we expect our average front office productivity to increase as technology is
leveraged across the business.
Human Capital and Social Policies and Practices
We are committed to our people, our stockholders and the community as a whole. We have a variety of programs to
incentivize and support our employees, from employee ownership to comprehensive benefits and training. We have a
passionate commitment to charity.
Attracting and Retaining the Best Talent
Our recruitment, promotion and compensation processes are designed to enable us to treat employees fairly with
respect to pay and opportunity and our compensation decisions are differentiated based on performance. Our success depends
on our ability to attract and retain talented, productive and skilled brokers and technologists and other employees to transact
with our customers in a challenging and regulated environment that is experiencing ever-increasing competition for talent. We
are investing in creating an inclusive and incentivized work environment where our people can deliver their best work every
day.
Talent remains at the core of who we are as a company, and we remain committed to having a culture built around
equal employment opportunity. We continue to work to enhance our ability to attract, develop and retain top talent with a range
of backgrounds, experiences, and perspectives, encompassing people early in their careers and experienced personnel, and
hiring, retention, and development initiatives.
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Retention Measures
To facilitate the retention of our employees, we have maintained some flexible work arrangements, where appropriate,
made compensation adjustments, and provided additional benefits, including a 401(k) match for many of our U.S. support
employees.
We have taken significant measures to develop a safe work environment for all employees, which is conducive to work
in our office locations, particularly for front-office brokers and revenue generating employees, subject to applicable state and
local regulatory requirements. We have established a more flexible hybrid approach in many instances for non-revenue
generating roles or for roles which are not office dependent, where appropriate. We continue to offer employee assistance
programs and additional avenues for mental health consultation and wellness.
Performance-Based and Highly Retentive Compensation Structure
Many of our key brokers, salespeople, managers, technology professionals and other front office professionals have a
substantial amount of their own capital invested in our business, aligning their interests with our stockholders. We believe that
our emphasis on equity-based compensation promotes alignment of interest with shareholders, recruitment, and motivation of
our brokers and employees. Virtually all of our executives and front-office employees have equity stakes in the Company and
generally receive grants of deferred equity as part of their compensation. We believe that having investments in us, our
executives and key brokers and other employees feel a sense of responsibility for the health and performance of our business
and have a strong incentive to maximize our revenues and profitability. As of December 31, 2024, our employees, executive
officers and directors individually owned approximately 12% of our equity, on a fully diluted basis.
We currently issue RSUs, as well as other forms of equity-based compensation, to provide liquidity to our employees,
to align the interests of our employees and management with those of common stockholders, to help motivate and retain key
employees, and to encourage a collaborative culture that drives cross-selling and revenue growth. These awards contain vesting
schedules which we consider to be highly retentive, that vary based upon compensation level and role, and in most cases are
largely dependent upon continued service.
We also enter into various agreements with certain of our employees whereby these individuals receive loans which
may be either wholly or in part repaid from proceeds of the sales of the employees’ shares of BGC Class A common stock or
may be forgiven over a period of time. We believe that these loans incentivize and promote retention of our employees. From
time to time, the Company may also enter into agreements with employees to grant bonus and salary advances or other types of
loans. These advances and loans are payable in the timeframes outlined in the underlying agreements.
Retentive Nature of Equity Awards
We consider our RSUs and restricted stock awards to be highly retentive due to the vesting and forfeiture provisions
relating to these awards, which have long-term vesting provisions conditioned upon, among other things, continued service
through the vesting date.
Compensation Recovery/Clawback Policy
The Company has adopted a Clawback Policy for its executive officers, effective as of December 1, 2023, with
retroactive applicability to October 2, 2023. The Clawback Policy applies to Incentive-Based Compensation. The Clawback
Policy provides for recovery of Incentive-Based Compensation received by a covered person in the event of an accounting
restatement due to material noncompliance with financial reporting requirements that is in excess of the Incentive-Based
Compensation that such person would have received based upon the restated financial reporting measure. The Clawback Policy
only applies to Incentive-Based Compensation and does not apply to compensation that is purely discretionary or purely based
on subjective goals or goals unrelated to financial reporting measures.
Equal Employment Opportunity
We believe that by cultivating a fair and inclusive work environment, we improve the performance of our business and
enrich the experience of our employees. We are committed to equal employment opportunity and other policies and practices
that seek to further our development of a productive and motivated workplace. We also participate in job fairs, college
recruitment initiatives and job boards that are focused on reaching a broad applicant pool of qualified applicants with a range of
backgrounds, perspectives and experiences.
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We consider all qualified applicants for job openings and promotions without regard to race, color, religion or belief,
sex, sexual orientation, gender, national origin or ancestry, age, disability, service in the armed forces, pregnancy or maternity,
familial status, marriage and civil partnership, genetic information or any other protected characteristic. We continue to develop
initiatives to support these values.
Employee Resource Groups
In order to incentivize and enable our employees to grow both professionally and personally, we build employee
resource groups, which are open to all employees. A number of initiatives across our geographic regions are in place to promote
our corporate values and foster greater inclusion and belonging. Examples include a range of career-oriented work experiences
and internship programs, mentorship programs, and leadership development programs that are open to all.
For example, the Rising Professionals League (“RPL”) was introduced to build upon the legacy of Cantor Fitzgerald
by inspiring career growth professionally and socially while promoting a cohesive environment and positively impacting the
community. RPL strives to instill a strong sense of inclusion and belonging for rising professionals through a variety of
opportunities that promote professional development and support the community through acts of thoughtful service.
Employee Engagement, Communication, Career Management and Training and Development
We invest in our employees’ long-term development and engagement, by delivering training and development
programs and fostering a culture where our people can thrive and maximize their potential. We require annual regulatory and
mandatory training on various topics, including anti-money laundering and anti-crime, global sanctions, ethics, cyber-security
and anti-harassment and anti-discrimination, among other topics. We also provide or support periodic job-specific and other
developmental training for our employees so they can maximize their potential, as well as a tuition reimbursement program for
eligible employees.
We provide virtual and in-person leadership training to managers on topics including management effectiveness,
communication skills, interview skills and delivering effective performance evaluations, managing teams with a range of
backgrounds and experiences, and other topics. This training is supplemented by a library of online training courses that
managers and employees have access to on a number of topics to assist them in their career development and, if applicable,
management skills. Our individual business lines offer ongoing learning and development opportunities tied to deepening the
understanding of the subject matter expertise of their professionals. We also have intern and early career programs throughout
the year in various parts of our business.
Our success depends on our employees’ understanding of how their work and engagement contribute to our strategy,
culture, values, and regulatory environment. We use various channels to facilitate open and direct communication, including
internal calls and meetings with employees, training and policy updates, employee resource groups, and social outings and
events. We have also rolled out organizational Core Values (Integrity, Commitment and Opportunity), appointed Culture
Champions in our London office and implemented other initiatives which seek to embed these values and drive an enhanced
culture across our workforce.
Succession Planning
From time to time, the Board discusses succession planning, including our consideration of succession strategy, the
impact of any potential absence due to illness or leave of certain key executive officers or employees, as well as competing
demands on the time of certain of our executive officers who also provide services to Cantor, Newmark, and various other
ventures and investments sponsored by Cantor. Our Board also discusses from time to time, as part of its succession planning,
engagement and encouragement of future business leaders and the process of introducing directors to leaders in our business
lines, including discussing business strategies and challenges with our existing senior business leaders. The Board may also
discuss short-term succession in the event that certain of the senior executive officers should, on an interim or unexpected basis,
become temporarily unable to fulfill their duties. The Board also considers hiring and retention of leaders required for the
changing business landscape and to lead future business lines. At the business and departmental levels, managers discuss and
identify potential talent, opportunities for employee growth, successors, and future leaders.
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Our succession discussions were particularly relevant in 2024, as in November 2024, Mr. Lutnick, our Chief Executive
Officer, was nominated as the 41st U.S. Secretary of Commerce. Mr. Lutnick was confirmed by the U.S. Senate on February
18, 2025 and stepped down from all of his positions with BGC and as Chairman of the Board. Our Board has elected Brandon
Lutnick and Stephen Merkel, our General Counsel, to join our Board of Directors and Mr. Merkel to serve as Chairman of the
Board. Mr. Windeatt, our Chief Operating Officer, became Co-CEO along with Mr. John Abularrage and Mr. JP Aubin, our
former Co-Heads of Brokerage. Messrs. Windeatt, Abularrage and Aubin will also serve as Co-Principal Executive Officers.
See “Item 1—Business—Recent Board of Directors and Executive Officers Changes.”
Corporate Responsibility, Environmental, Social and Governance Initiatives and Sustainability
We believe that our business-focused corporate responsibility, governance, ESG and related policies and practices will
create sustainable long-term value for BGC, our stockholders and other stakeholders, our clients and our employees while also
helping us mitigate risks, reduce costs, protect brand value, and identify market opportunities.
Our Board-level ESG Committee provides oversight with respect to our ESG, corporate responsibility sustainability
policies and practices. The ESG Committee charter may be found on our website at www.bgcg.com/esg/governance under the
heading “Independent Environmental, Social and Governance Committee.” With the Board’s and the ESG Committee’s
oversight, we are embedding social and human capital, employment, environmental, sustainability, charitable and corporate
governance policies and practices into our corporate strategy, compensation, disclosure, and goals to maintain and advance
long-term stockholder value.
For more information about these topics, initiatives and specific examples of policies and practices, see our website at
www.bgcg.com/esg.
Our Environmental Focus, Workplace Strategies and Sustainable Business Practices
As a responsible business operating within financial services, we are aware of climate change and other major issues
affecting the environment. Our philosophy is that long-term change in the way in which we use energy, and our collective
impact on the environment, cannot happen without the involvement of the world’s capital markets.
Sustainable Business Practices
We aim to be a leading broker for the green economy, and we believe our Energy, Commodities and Shipping business
is a world leader in the environmental and energy transition markets. Our Energy, Commodities and Shipping business provides
expert innovative carbon offset solutions and advice to the world’s green energy markets, from transactions and financing to
technology and consulting. For decades, we have helped clients worldwide navigate complex financial requirements in order to
achieve their environmental initiatives, thereby supporting our clients’ efforts to meet their emission reduction goals through the
provision of brokerage services.
In 2023, we announced the launch of our Weather Derivatives business, expanding BGC’s brokerage business into the
weather and climate space. The Weather Derivatives business helps market participants analyze climate-related risks and
mitigate their financial exposure. We are providing liquidity to these increasingly important markets as the role of weather and
climate change impacts the way risk is managed. The launch of this business highlights BGC’s commitment to expand and
explore new opportunities across the global energy and commodities space.
For more information on BGC Environmental Brokerage Services, please visit www.bgcebs.com.
Workplace Strategies
In our workplaces, we are studying how to make our own contribution to state, national and global environmental
initiatives and consider vendors and suppliers when doing business with us. As part of this, we are considering how to minimize
our future carbon footprint when planning office renovations and will continue to focus our attention in the near term on
methods of reducing our greenhouse gas emissions, increasing use of renewable energy, conserving water, and reducing waste
generation.
BGC supports sustainable business practices and is focused on the steps necessary to continue developing our
sustainability program internally as we focus on our own energy usage. We believe it is our responsibility to improve energy
efficiency and reduce energy consumption to protect the environment through continuous improvement of our energy use
practices and increased scrutiny on the energy efficiency of the buildings we utilize for our space. We intend to continue to
work on these initiatives.
For more information about these initiatives as they evolve, visit our website at www.bgcg.com/esg/environmental.
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You may also find our Corporate Governance Guidelines, Code of Ethics, the charters of the committees of our Board
of Directors, Hedging Policy, information about our charitable initiatives, employee resources, learning and development
programs, and other corporate responsibility, governance, and sustainability policies and practices on our website. This
information contained on, or that may be accessed through our websites or other websites referenced herein, is not part of, and
not incorporated into, this document.
OUR ORGANIZATIONAL STRUCTURE
Dual Class Equity Structure of BGC Group, Inc. We have a dual class equity structure, consisting of shares of BGC
Class A common stock and BGC Class B common stock. We expect to retain and have no plans to change our dual class
structure.
BGC Class A common stock. Each share of BGC Class A common stock is generally entitled to one vote on matters
submitted to a vote of our stockholders. As of December 31, 2024, there were 424.4 million shares of BGC Class A common
stock issued and 374.3 million shares outstanding. On June 21, 2017, Cantor pledged 10.0 million shares of BGC Class A
common stock in connection with a partner loan program. On November 23, 2018, those shares of BGC Class A common stock
were converted into 10.0 million shares of BGC Class B common stock and remain pledged in connection with the partner loan
program, as amended and restated effective as of October 5, 2023 with such modifications thereto as necessary to reflect the
Corporate Conversion.
From time to time, we may actively continue to repurchase shares of our Class A common stock including from
Cantor, Newmark, our executive officers, other employees, partners and others.
BGC Class B common stock. Each share of BGC Class B common stock is generally entitled to the same rights as a
share of BGC Class A common stock, except that, on matters submitted to a vote of our stockholders, each share of BGC Class
B common stock is entitled to 10 votes. The BGC Class B common stock generally votes together with the BGC Class A
common stock on all matters submitted to a vote of our stockholders. As of December 31, 2024, Cantor and CFGM held an
aggregate of 96.3 million shares of BGC Class B common stock, representing 88% of the outstanding shares of BGC Class B
common stock and approximately 65.6% of our total voting power. As of December 31, 2024, Mr. Lutnick and individuals
related to Mr. Lutnick owned 13.1 million shares of our outstanding Class B common stock, representing 12% of the
outstanding shares of BGC Class B common stock and approximately 8.9% of our total voting power. Together, Cantor,
CFGM, Mr. Lutnick and individuals related to Mr. Lutnick owned 100.0% of the outstanding shares of BGC Class B common
stock and approximately 75.8% of our total voting power.
Shares of BGC Class B common stock are convertible into shares of BGC Class A common stock at any time in the
discretion of the holder on a one-for-one basis. Accordingly, if Cantor, CFGM, Mr. Lutnick and individuals related to Mr.
Lutnick converted all of their BGC Class B common stock into BGC Class A common stock on December 31, 2024, Cantor
would have held 19.3% of the voting power of our outstanding capital stock, CFGM would have held 0.6% of the voting power,
Mr. Lutnick and individuals related to Mr. Lutnick would have held 6.6% of the voting power, and the public stockholders
would have held 73.5% of the voting power of our outstanding capital stock (and Cantor and CFGM’s indirect economic
interests in BGC U.S. and BGC Global would remain unchanged).
As a result of the Corporate Conversion, 64.0 million Cantor units, including 5.7 million purchased on June 30, 2023,
were converted into shares of BGC Group Class B common stock, subject to the terms and conditions of the Corporate
Conversion Agreement, provided that a portion of the 64.0 million shares of BGC Group Class B common stock issued to
Cantor will exchange into BGC Group Class A common stock in the event that BGC Group does not issue at least $75,000,000
in shares of BGC Group Class A or B common stock in connection with certain acquisition transactions prior to July 1, 2030,
the seventh anniversary of the Corporate Conversion. As of February 27, 2025, the Company has issued approximately $14.3
million of BGC Group Class A common stock in connection with acquisitions since the Corporate Conversion.
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Classes of Founding/Working Partner Interests and Limited Partnership Units Prior to the Corporate Conversion
Prior to the Corporate Conversion, our executives and front-office employees held partnership stakes in us and our
subsidiaries and generally received their equity compensation through LPUs. Upon the closing of the Corporate Conversion, the
BGC Holdings Limited Partnership Agreement was terminated, and the former stockholders of BGC Partners and former
limited partners of BGC Holdings now participate in the economics of the BGC businesses through BGC Group. Following the
Corporate Conversion, the equity portion of our compensation structure is no longer based upon the issuance of partnership
units but instead based upon the use of equity awards, such as RSUs, issued under the BGC Group Equity Plan in order to
incentivize and retain our employees, executive officers, and directors.
Prior to the Corporate Conversion, while BGC Holdings limited partnership interests generally entitled our partners to
participate in distributions of income from the operations of our business, upon leaving BGC Holdings (or upon any other
redemption or purchase of such limited partnership interests as described below) any such partners were only entitled to receive
over time, and provided he or she did not violate certain partner obligations, an amount for his or her BGC Holdings limited
partnership interests that reflected such partner’s capital account or compensatory grant awards, excluding any goodwill or
going concern value of our business, unless Cantor, in the case of the Founding Partners, and we, as the general partner of BGC
Holdings at that time, otherwise determined. Prior to the Corporate Conversion, we also had the right to effect redemptions of
BGC Holdings LPUs and FPUs and concurrently grant shares of our Class A common stock, or to grant our partners the right to
exchange their BGC Holdings limited partnership interests for shares of our Class A common stock (if, in the case of Founding
Partners, Cantor so determined and, in the case of working partners and limited partnership unit holders, if we, as the BGC
Holdings general partner at that time, with Cantor’s consent, determined otherwise) and thereby allowed them to realize any
higher value associated with our Class A common stock. Similar provisions with respect to Newmark Holdings limited
partnership interests are contained in the Newmark Holdings limited partnership agreement.
Limited partnership interests in BGC Holdings (prior to the Corporate Conversion) and Newmark Holdings (received
in connection with the Spin-Off) consist of: (i) “founding/working partner units” held by limited partners who are employees of
the relevant company; (ii) “limited partnership units,” which consist of a variety of units that are generally held by employees
such as REUs, RPUs, PSUs, PSIs, PSEs, HDUs, U.K. LPUs, APSUs, APSIs, APSEs, AREUs, ARPUs and N Units; (iii)
“Cantor units” which are the exchangeable limited partnership interests held by Cantor entities; and (iv) Preferred Units, which
are working partner units that may be awarded to holders of, or contemporaneous with, the grant of certain limited partnership
units. These Preferred Units carried the same name as the underlying unit, with the insertion of an additional “P” to designate
them as Preferred Units. Such Preferred Units could not be made exchangeable into BGC Class A common stock and
accordingly were not included in the fully diluted share count. Each quarter, the net profits of BGC Holdings were allocated to
such Preferred Units at a rate of either 0.6875% (which is 2.75% per calendar year) of the allocation amount assigned to them
based on their award price, or such other amount as set forth in the award documentation, before calculation and distribution of
the quarterly BGC Holdings distribution for the remaining BGC Holdings units. The Preferred Units were not entitled to
participate in BGC Holdings distributions other than with respect to the Preferred Distribution.
Non-distributing partnership units, or N Units, carried the same name as the underlying unit with the insertion of an
additional “N” to designate them as the N Unit type and were designated as NREUs, NPREUs, NLPUs, NPLPUs and NPPSUs.
The N Units were not entitled to participate in BGC Holdings distributions, were not allocated any items of profit or loss and
were not made exchangeable into shares of BGC Class A common stock. Subject to the approval of the Compensation
Committee or its designee, certain N Units may have been converted into the underlying unit type (i.e., an NREU could be
converted into an REU) and could then participate in BGC Holdings distributions, subject to terms and conditions determined
by us as the general partner of BGC Holdings, in our sole discretion, including that the recipient continue to provide substantial
services to us and comply with his or her partnership obligations.
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BGC OpCos Partnership Structures
We are a holding company with no direct operations, and our business is operated through two operating partnerships,
BGC U.S. OpCo, which holds our U.S. businesses, and BGC Global OpCo, which holds our non-U.S. businesses.
Prior to the Corporate Conversion, the limited partnership interests of the two operating partnerships were held by us
and BGC Holdings, and the limited partnership interests of BGC Holdings were held by LPU holders, Founding Partners, and
Cantor. We held the BGC Holdings general partnership interest and the BGC Holdings special voting limited partnership
interest, which entitled us to remove and appoint the general partner of BGC Holdings, and served as the general partner of
BGC Holdings, which entitled us to control BGC Holdings. BGC Holdings, in turn, held the BGC U.S. OpCo general
partnership interest and the BGC U.S. OpCo special voting limited partnership interest, which entitled the holder thereof to
remove and appoint the general partner of BGC U.S. OpCo, and the BGC Global OpCo general partnership interest and the
BGC Global OpCo special voting limited partnership interest, which entitled the holder thereof to remove and appoint the
general partner of BGC Global OpCo, and served as the general partner of BGC U.S. OpCo and BGC Global OpCo, all of
which entitled BGC Holdings (and thereby us) to control each of BGC U.S. OpCo and BGC Global OpCo.
Since BGC Holdings held BGC U.S. OpCo limited partnership interests and BGC Global OpCo limited partnership
interests, LPU holders, Founding Partners, and Cantor indirectly had interests in BGC U.S. OpCo limited partnership interests
and BGC Global OpCo limited partnership interests. Further, in connection with the Separation and Distribution Agreement,
limited partnership interests in Newmark Holdings were distributed to the holders of limited partnership interests in BGC
Holdings, whereby each holder of BGC Holdings limited partnership interests who at that time held a BGC Holdings limited
partnership interest received corresponding Newmark Holdings limited partnership interests equal in number to such holder’s
BGC Holdings limited partnership interests divided by 2.2 (i.e., 0.4545 of a unit in Newmark Holdings). Accordingly, existing
partners at the time of the Separation in BGC Holdings became partners in Newmark Holdings and received corresponding
units issued at the applicable ratio. Thus, such partners received an indirect interest in Newmark OpCo.
As a result of a series of transactions prior to and in anticipation of the Corporate Conversion, all BGC Holdings units
held by Newmark employees were redeemed or exchanged, in each case, for shares of BGC Class A common stock or cash.
Upon the closing of the Corporate Conversion, the BGC Holdings Limited Partnership Agreement was terminated, we became
the owner of all of the limited partnership interests of the two BGC operating partnerships, and the former stockholders of BGC
Partners and former limited partners of BGC Holdings now participate in the economics of the BGC businesses through BGC
Group.
Current Structure of BGC Group, Inc. as of December 31, 2024
The following diagram illustrates our organizational structure as of December 31, 2024. The diagram does not reflect
the various subsidiaries of BGC Partners, BGC U.S. OpCo, BGC Global OpCo, or Cantor, or the noncontrolling interests in our
consolidated subsidiaries. The diagram also does not reflect certain ownership of BGC Group as follows: (a) for purposes of
economic percentages, 6.7 million shares of BGC Group Class A restricted common stock as these are not entitled to receive
any dividends (however, these shares of BGC Group Class restricted common stock are included for voting power of BGC
Group); (b) 6.5 million assumed RSUs; (c) 30.4 million RSUs converted from former partners’ units in BGC Holdings; (d)
35.5 million RSUs issued in relation to employee compensation; (e) 4.4 million contingent shares to be issued to terminated
employees per their respective separation agreements; and (f) 0.4 million contingent shares issued in exchange for acquisition
units.
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1 For the purposes of this diagram, Cantor includes Cantor Fitzgerald, L.P. and CFGM. Cantor Fitzgerald, L.P. owns 19.6% of
the economics and 63.5% of the voting power in BGC Group. CFGM owns 0.6% of the economics and 2.0% of the voting
power in BGC Group.
2 Percentage includes restricted shares issued in exchange for former partners’ units in BGC Holdings.
3 Public Stockholders includes unrestricted shares of our Class A common stock owned by employees, executives, and directors
due to an inability to track such shares once they leave the Company’s transfer agent.
4 BGC Partners is a wholly owned subsidiary of BGC Group and consolidated with other wholly and non wholly-owned
subsidiaries.
The diagram reflects the following activity of BGC Class A common stock from January 1, 2024 through
December 31, 2024 as: (a) the restrictions released on 19.9 million shares of BGC Class A common stock; (b) 36.2 million
shares of BGC Class A common stock repurchased by us; (c) 10.0 million shares of BGC Class A common stock issued for
vested RSUs; (d) 0.5 million shares of BGC Class A common stock issued for contingent shares issued in exchange for
acquisition units; (e) 0.1 million shares of BGC Class A common stock issued for contingent shares from acquisitions; (f) 0.5
million shares of BGC Class A common stock issued for consideration for acquisitions in fiscal year 2024; (g) 1.8 million
shares of BGC Class A common stock issued for contingent shares issued in exchange for former partners’ units in BGC
Holdings; (h) 2.4 million shares of BGC Class A restricted common stock forfeited by former partners and employees; and (i)
9.0 million shares of BGC Class A common stock issued for compensation. 1.1 million shares of Class A common stock were
issued by us under our acquisition shelf 2019 Form S-4 Registration Statement (Registration No. 333-233761) between
January 1, 2024 and December 31, 2024; 16.6 million of such shares remain available for issuance by us under such
Registration Statement. Also, an immaterial number of shares of Class A common stock were issued by us under our DRIP
Registration Statement (Registration No. 333-173109) between January 1, 2024 and December 31, 2024; 9.2 million of such
shares remain available for issuance by us under the DRIP Registration Statement.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC. These filings are
available to the public from the SEC’s website at www.sec.gov.
Our website address is www.bgcg.com. Through our website, we make available, free of charge, the following
documents as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC: our Annual
Reports on Form 10-K; our proxy statements for our annual and special stockholder meetings; our Quarterly Reports on Form
10-Q; our Current Reports on Form 8-K; Forms 3, 4 and 5 and Schedules 13D with respect to our securities filed on behalf of
Cantor, CFGM, our directors and our executive officers; and amendments to those documents. Our website also contains
additional information with respect to our industry and business. The information contained on, or that may be accessed
through, our website is not part of, and is not incorporated into, this Annual Report on Form 10-K.
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ITEM 1A.
RISK FACTORS
An investment in shares of our Class A common stock, the BGC Group Notes, the BGC Partners Notes, or our other
securities or those of BGC Partners involves risks and uncertainties, including the potential loss of all or a part of your
investment. The following are important risks and uncertainties that could affect our business, but we do not ascribe any
particular likelihood or probability to them unless specifically indicated. Before making an investment decision to purchase our
securities or those of BGC Partners, you should carefully read and consider all of the risks and uncertainties described below,
as well as other information included in this Annual Report on Form 10-K, including Part II, Item 7, Management’s Discussion
and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and related notes
included herein. The occurrence of any of the following risks or additional risks and uncertainties that are currently immaterial
or unknown could materially and adversely affect our business, financial condition, liquidity, result of operations, cash flows or
prospects.
RISKS RELATED TO OUR BUSINESS
Risks Related to Global Economic and Market Conditions
Our business, financial condition, results of operations and prospects have been and may continue to be affected
both positively and negatively by conditions in the global economy and financial markets generally.
Uncertain market, economic, and geopolitical conditions have in the past adversely affected, and may in the future
adversely affect, our business. Such conditions and uncertainties include varying levels of economic output, fluctuating interest
rates and the impact on trading volumes, volatile inflation rates, employment levels, consumer confidence levels, and fiscal and
monetary policy. The legislative priorities and economic policies of the current presidential administration and Congress,
including potential changes in interest rates and existing tax rates, may further change the regulatory and economic landscape.
These conditions may directly and indirectly impact a number of factors in the global markets that may have a positive or
negative effect on our operating results, including the levels of trading, investing, and origination activity in the financial
markets, the valuations of financial instruments, changes in interest rates, changes in benchmarks, changes in and uncertainty
regarding laws and regulations, substantial fluctuations in volume and commissions on securities and derivatives transactions,
the absolute and relative level of currency rates and the actual and the perceived quality of issuers, borrowers and investors. In
addition, changes in monetary policy may affect the credit quality of our customers. Changes in domestic and international
monetary policy are beyond our control and difficult to predict.
Our revenues and profitability have historically declined and are likely to decline significantly during past and future
periods of low trading volume in the financial markets in which we offer our products and services.
The global financial services markets are, by their nature, risky and volatile and are directly affected by many national
and international factors that are beyond our control. Although we believe that meaningful interest rates may continue to
positively impact trading volumes in many of our product offerings, any one of the following factors have caused and may in
the future cause substantial changes in the U.S. and global financial markets, resulting in positive or negative impacts on
transactional volume and profitability for our business. These factors include:
•
volatile global interest rates;
•
the impact of elections and changes in government administrations or other political events, both in the U.S.
and globally, including resulting changes in government policies;
•
economic and geopolitical conditions and uncertainties in the United States, Europe, Asia and elsewhere in
the world, including government deficits, debt and possible defaults, austerity measures, tariffs and changes
in central bank and/or fiscal policies, including the level and timing of government debt issuances, purchases
and outstanding amounts;
•
possible political turmoil with respect to the U.S. government, the U.K., the EU and/or its member states,
Hong Kong, China, Latin America or other major economies around the world;
•
the effect of Federal Reserve Board and other central banks’ monetary policies, increased capital
requirements for banks and other financial institutions, and other regulatory requirements;
•
terrorism, war and other armed hostilities, including the conflict between Ukraine and Russia, conflicts in the
Middle East and other ongoing or new conflicts in those or other regions, and measures taken in response
thereto, including sanctions imposed by governments and related countersanctions;
•
inflation and wavering institutional and consumer confidence levels in the economy;
38
•
new or increased tariffs imposed by the U.S. and foreign governments and other factors driving trade
uncertainty and inflationary pressures;
•
changes to trade or immigration policies in the U.S. and globally;
•
disagreement over the federal budget, which has caused the U.S. federal government to shut down or reduce
funding for various initiatives for periods of time in recent years, and recent initiatives to reduce federal
spending and headcount;
•
pandemics and other international health emergencies;
•
the availability of capital for borrowings and investments by our clients and their customers;
•
the level and volatility of foreign currency exchange rates and trading in certain equity, debt and commodity
markets;
•
changes in regulations relating to margin and clearing capital requirements;
•
the level and volatility of the difference between the yields on corporate securities and those on related
benchmark securities; and
•
margin requirements, capital requirements, credit availability, global supply chain issues and other liquidity
concerns.
Low transaction volumes for any of our brokerage asset classes generally result in reduced revenues. Under these
conditions, our profitability is adversely affected. In addition, although less common, some of our transaction revenues are
determined on the basis of the value of transactions or on spreads. For these reasons, substantial decreases in trading volume,
declining prices, and/or reduced spreads could have material adverse effects on our business, financial condition, results of
operations and prospects.
Actions taken by central banks in major global economies, including with regards to interest rates, may have a
material negative impact on our businesses.
In 2022 and 2023, in response to significant inflationary pressures and inflation rates in the U.S. as well as in other
countries in which we operate, the Federal Reserve in the U.S. and other central banks in various countries raised interest rates,
which, coupled with reduced government spending and volatility in financial markets, had the effect of further increasing
economic uncertainty and heightening related risks, including global currency fluctuations. While higher interest rates have had
and are expected to continue to have a positive impact on our revenues, currency fluctuations have affected, and may continue
to affect, the reported value of our assets, liabilities, and cash flows. In 2024, the Federal Reserve in the U.S. and other central
banks began lowering interest rates and may continue to do so in the future. If interest rates continue to lower, global FX
volumes may slow or become muted, largely because low interest rates in most major economies may make carry-trade
strategies less appealing for FX market participants, which may have a negative impact on our business.
Downgrades of sovereign credit ratings, sovereign debt crises, or a decrease in the integrity of capital markets
may have material adverse effects on the financial markets and general economic conditions, as well as our businesses,
financial condition, cash flows, results of operations and prospects.
Any downgrades of the U.S. sovereign credit rating by one or more major credit rating agencies could have material
adverse effects on financial markets and economic conditions in the U.S. and throughout the world. This in turn could have a
material adverse impact on our business, financial condition, cash flows, results of operations, and prospects. The ultimate
impacts of negative credit rating actions with respect to U.S. government obligations, on global financial markets and our
business, financial condition, cash flows, results of operations, and prospects are unpredictable and may not be immediately
apparent. Additionally, the negative impact on economic conditions and global financial markets from further sovereign debt
matters with respect to the U.K., the EU and/or its member states, Japan, China or other major economies could further
adversely affect our businesses, financial condition, cash flows, results of operations and prospects. Concerns about the
sovereign debt of certain major economies have caused uncertainty and disruption for financial markets globally, and continued
uncertainties loom over the outcome of various governments’ financial support programs and the possibility that EU member
states or other major economies may experience similar financial troubles. Any downgrades of the long-term sovereign credit
rating of the U.S. or additional sovereign debt crises in major economies could cause disruption and volatility of financial
markets globally and have material adverse effects on our business, financial condition, results of operations and prospects.
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Risks Related to New Opportunities/Possible Transactions and Hires
If we are unable to identify and successfully exploit new product, service and market opportunities, including
through hiring new brokers, salespeople, managers, technology professionals and other front-office personnel, our
business, financial condition, results of operations, cash flows and prospects could be materially adversely affected.
Because of significant competition in our markets, our strategy is to execute more transactions, increase our share of
existing markets and seek out new clients and markets through competitive or innovative new product offerings. We may face
enhanced risks as these efforts to expand our business result in transacting with a broader array of clients and expose us to new
products, services and markets. Pursuing this strategy may also require significant management attention, hiring expenses and
potential costs and liabilities in any litigation or arbitration that may result. We may not be able to attract new clients or brokers,
salespeople, managers, technology professionals or other front-office personnel or successfully enter new markets. If we are
unable to identify and successfully exploit new product, service and market opportunities, our business, financial condition,
results of operations and prospects could be materially adversely affected.
We may pursue opportunities including new business initiatives, strategic alliances, acquisitions, mergers,
investments, dispositions, joint ventures or other growth opportunities or transformational transactions (including
hiring new brokers and salespeople), which could present unforeseen integration obstacles or costs and could dilute our
stockholders. We may also face competition in our acquisition strategy or new business plans, and such competition may
limit such opportunities.
We have explored and continue to explore a wide range of new business initiatives, mergers, investments, acquisitions
and joint ventures with other financial services or other companies that have interests in related businesses or other strategic
opportunities. Such transactions may be necessary in order for us to enter into or develop new products or services or markets,
as well as to strengthen our current ones.
These opportunities and activities involve a number of risks and challenges, including:
•
potential disruption of our ongoing businesses and product, service and market development and distraction
of management;
•
regulatory, financial, and operational risks associated with the launch of new initiatives which could impact
the timeline, launch and operation of such initiatives, or which could require significant capital and significant
efforts by management, including engaging partners on satisfactory terms and long lead times in order to
scale a successful venture;
•
the expansion of our cybersecurity processes to include new businesses, or the integration of the cybersecurity
processes of acquired businesses, including internationally;
•
increased focus on our Energy, Commodities and Shipping business, including regulatory, financial, and
operational risks associated with these initiatives;
•
potential unfavorable reactions to our strategy by our customers, counterparties, employees and investors, or
challenges to our strategy by our competitors;
•
hiring, retaining and integrating personnel in the increasingly competitive marketplace for the most talented
producers and managers;
•
integrating administrative, operational, financial reporting, internal control, compliance, technology and other
systems;
•
increased scope, geographic diversity and complexity of our operations and, to the extent that we pursue
opportunities internationally, exposure to political, economic, legal, regulatory, operational and other risks
that are inherent in operating in a foreign country, including risks of possible nationalization and/or foreign
ownership restrictions, expropriation, price controls, capital controls, foreign currency fluctuations, regulatory
and tax requirements, economic and/or political instability, geographic, time zone, language and cultural
differences among personnel in different areas of the world, exchange controls and other restrictive
government actions;
•
integrating accounting and financial systems and accounting policies and the related risk of having to restate
our historical financial statements;
•
potential dependence upon, and exposure to liability, loss or reputational damage relating to systems, controls
and personnel that are not under our control;
40
•
addition of business lines in which we have not previously engaged and which we do not have experience
operating;
•
the upfront costs of building technology and establishing infrastructure to establish new business ventures;
•
conflicts or disagreements between any strategic alliance or joint venture partner and us;
•
exposure to potential unknown liabilities of any acquired business, strategic alliance or joint venture that are
significantly larger than we anticipate at the time of acquisition, and unforeseen increased expenses or delays
associated with acquisitions, including costs in excess of the cash transition costs that we estimate at the
outset of a transaction;
•
reduction in availability of financing due to credit ratings downgrades or defaults by us, in connection with
these activities;
•
a significant increase in the level of our indebtedness in order to generate, and adverse effects on our liquidity
upon the deployment of, cash resources that may be required to effect acquisitions;
•
dilution resulting from any issuances of shares of our Class A common stock in connection with these
activities;
•
a reduction of the diversification of our business resulting from any dispositions;
•
the cost of rebranding and the impact on our market awareness of dispositions;
•
litigation or regulatory scrutiny with respect to any such transactions, including any related party aspects of
any proposed arrangements;
•
the impact of any reduction in our asset base resulting from dispositions on our ability to obtain financing or
the terms thereof;
•
additional taxes or other fees or expenses associated with the risks described above; and
•
a lag in the realization of financial benefits from these transactions and arrangements.
We face competition for acquisition targets, which may limit our number of acquisition and growth opportunities and
may lead to higher acquisition prices or other less favorable terms. As we grow internationally, we may experience additional
expenses or obstacles. There can be no assurance that we will be able to identify, acquire or profitably manage additional
businesses or integrate successfully any acquired businesses without substantial costs, delays or other operational or financial
difficulties.
In addition, the acquisition of regulated firms generally requires the consent of the home jurisdiction regulator in
which the target and regulated subsidiaries are domiciled. In certain circumstances, one or more of these regulators may
withhold their consent, impose restrictions or make their consent subject to conditions which may result in increased costs or
delays.
Any future growth will be partially dependent upon the continued availability of suitable transactional candidates, at
favorable prices and valuations and upon advantageous terms and conditions, which may not be available to us, as well as
sufficient liquidity to fund these transactions. Future transactions and any necessary related financings also may involve
significant transaction-related expenses, which include payment of break-up fees, assumption of liabilities, including
compensation, severance, lease termination and other restructuring costs, and transaction and deferred financing costs, among
others. In addition, there can be no assurance that such transactions will be accretive or generate favorable operating margins.
The success of these transactions will also be determined in part by the ongoing performance of the acquired companies and the
acceptance of acquired employees of our equity-based compensation structure and other variables which may be different from
the existing industry standards or practices at the acquired companies.
41
We will need to successfully manage the integration of recent and future acquisitions and future growth opportunities
effectively. Such integration and additional growth may place a significant strain upon our management, administrative,
operational, financial reporting, internal control and compliance infrastructure. Our ability to grow depends upon our ability to
successfully hire, train, supervise and manage additional employees, expand our management, administrative, operational,
financial reporting, compliance and other control systems effectively, allocate our human resources optimally, maintain clear
lines of communication between our transactional and management functions and our finance and accounting functions, and
manage the pressure on our management, administrative, operational, financial reporting, compliance and other control
infrastructure. Additionally, managing future growth due to new geographic locations, markets and business lines may be
difficult. We may not realize, or it may take an extended period of time to realize, the full benefits that we anticipate from
strategic alliances, acquisitions, joint ventures or other growth opportunities. There can be no assurance that we will be able to
accurately anticipate and respond to the changing demands we will face as we integrate recent or future acquisitions and
continue to expand our operations, and we may not be able to manage growth effectively or to achieve growth at all.
From time to time, we may also seek to dispose of portions of our businesses, or otherwise reduce our ownership, each
of which could materially affect our cash flows and results of operations. Dispositions involve significant risks and
uncertainties, such as the ability to sell such businesses at satisfactory prices and terms and in a timely manner (including long
and costly sales processes and the possibility of lengthy and potentially unsuccessful attempts by a buyer to receive required
regulatory approvals,) or at all, disruption to other parts of the business and distraction of management, loss of key employees
or customers, and exposure to unanticipated liabilities or ongoing obligations to support the business following such
dispositions. In addition, if such dispositions are not completed for any reason, the market price of our Class A common stock
may reflect a market assumption that such transactions will occur, and a failure to complete such transactions could result in a
decline in the market price of our Class A common stock. Any of these factors could have a material adverse effect on our
business, financial condition, results of operations and prospects.
While we have limited offerings linked to cryptocurrencies, such offerings or any future expansion of such
business could expose us to technology, regulatory and financial risks.
While we currently have limited offerings linked to cryptocurrencies in certain jurisdictions, we may expand the types
of these offerings, the associated types of cryptocurrencies and the jurisdictions in which these offerings are offered.
Specifically, BGC provides its cryptocurrency offerings through Lucera by providing connectivity, hosting and trading
platforms and through kACE2, its analytics, pricing and distribution software.
The technology underlying cryptocurrencies and other similar digital assets is evolving at a rapid pace and may be
vulnerable to cyberattacks or have other inherent weaknesses that are not yet apparent. There is a high degree of fraud, theft,
cyberattacks and other forms of risk in the cryptocurrency space.
In addition, cryptocurrency markets experienced significant price fluctuations in recent years, and may continue to
experience periods of extreme volatility again in the future. Historically, several entities in the digital asset industry have been,
and may continue to be negatively affected, by such extreme volatility, including to the point of insolvency. If such events
impact our cryptocurrency offerings, we may experience material adverse effects on our business, financial condition, results of
operations and prospects in the future.
In the U.S., the SEC, CFTC, state and federal agencies are reviewing virtual currency businesses and have or may
enact regulations that restrict business activities and or require additional licenses to conduct certain businesses, and these
regulations may be further affected by the policies of the current U.S. presidential administration. Domestically and
internationally, existing and future regulations may negatively impact our ability to offer different products in different regions
and/or negatively impact our ability to deal with certain customers depending on where they are located. If further or new
licenses are required, it may take a considerable amount of time to obtain the necessary approvals from the respective regimes.
Any of these factors could have a material adverse effect on our business, financial condition, results of operations and
prospects in the future.
Risks Related to Liquidity, Funding and Indebtedness
We have debt, which could adversely affect our ability to raise additional capital and obtain or maintain
favorable credit ratings, limit our ability to react to changes in the economy or our business, expose us to interest rate
risk, and prevent us from meeting our obligations under our indebtedness.
Our indebtedness, which on December 31, 2024 was $1,337.5 million may have important, adverse consequences to us
and our investors, including:
•
it may limit our ability to borrow money, dispose of assets or sell equity to fund our working capital, capital
expenditures, dividend payments, debt service, strategic initiatives or other obligations or purposes;
42
•
it may limit our flexibility in planning for, or reacting to, changes in the economy, the markets, regulatory
requirements, our operations or business;
•
our financial leverage may be higher than some of our competitors, which may place us at a competitive
disadvantage;
•
it may make us more vulnerable to downturns in the economy or our business;
•
it may require a substantial portion of our cash flow from operations to make interest payments;
•
it may make it more difficult for us to satisfy other obligations;
•
it may increase the risk of a future downgrade of our credit ratings or otherwise impact our ability to obtain or
maintain investment-grade credit ratings, which could increase future debt costs and limit the future
availability of debt financing;
•
we may not be able to borrow additional funds or refinance existing debt as needed or take advantage of
business opportunities as they arise, pay cash dividends or repurchase shares of our Class A common stock;
and
•
there would be a material adverse effect on our business, financial condition, results of operations and
prospects if we are unable to service our indebtedness or obtain additional financing or refinance our existing
debt on terms acceptable to us.
To the extent that we incur additional indebtedness or seek to refinance our existing debt, the risks described above
could increase. In addition, our actual cash requirements in the future may be greater than expected and may impact the rate at
which we make payments of obligations or incur additional obligations. Our cash flow from operations may not be sufficient to
service our outstanding debt or to repay outstanding debt as it becomes due, and we may not be able to borrow money, dispose
of assets or otherwise raise funds on acceptable terms, or at all, to service or refinance our debt.
Some of our borrowings have variable interest rates. As a result, increases in market interest rates have had and may
continue to have a material adverse effect on our interest expense.
A continued rise in interest rates could further increase our cost of funds, which could reduce our net income. In an
effort to limit our exposure to interest rate fluctuations, we may rely on interest rate hedging or other interest rate risk
management activities. These activities may limit our ability to participate in the benefits of lower interest rates with respect to
the hedged borrowings. Adverse developments resulting from changes in interest rates or hedging transactions could have a
material adverse effect on our business, financial condition, results of operations and prospects.
Some of our borrowings will mature in the near future. The BGC Group 4.375% Senior Notes and BGC Partners
4.375% Senior Notes each mature on December 15, 2025, and collectively have an outstanding aggregate principal amount of
$300.0 million; the BGC Group 8.000% Senior Notes and the BGC Partners 8.000% Senior Notes each mature on May 25,
2028, and collectively have an outstanding aggregate principal amount of $350.0 million; and the BGC Group 6.600% Senior
Notes mature on June 10, 2029, and have an outstanding aggregate principal amount of $500.0 million. Our ability to meet our
payment and other obligations under our debt depends on our ability to generate and maintain significant cash flow in the near
future or to access alternate sources of liquidity. This, to some extent, is subject to general economic, financial, competitive,
legislative and regulatory factors as well as other factors that are beyond our control. We cannot assure you that our business
will generate cash flow from operations, or that additional capital will be available to us, in an amount sufficient to enable us to
meet our payment obligations under our borrowings and to fund other liquidity needs. If we are not able to generate sufficient
cash flow to service our debt obligations and our unable to refinance our obligations on terms or at interest rates acceptable to
us at all, we may need to sell assets, reduce or delay capital investments, or seek to raise additional capital. If we are unable to
implement one or more of these alternatives, our cash flow may be significantly reduced, which could have a material adverse
effect on our business, financial condition, results of operations and prospects.
43
We are dependent upon the availability of adequate funding and liquidity to meet our clearing margin requirements,
among other financial needs. Clearing margin is the amount of cash, guarantees or similar collateral that we must provide or
deposit with our third-party clearing organizations in support of our obligations under contractual clearing arrangements with
these organizations. Historically, these needs have been satisfied from internally generated funds and proceeds from debt and
equity financings. We have also relied on arrangements with Cantor to clear certain of our transactions under the clearing
agreement we entered into with Cantor in November 2008, which was amended in June 2024. Although we have historically
been able to raise debt on acceptable terms, deterioration of the world’s credit markets could make it more difficult for us to
refinance or replace such indebtedness in a timely manner or on acceptable terms. Further, if for any reason we need to raise
additional funds, including in order to meet regulatory capital requirements and/or clearing margin requirements arising from
growth in our brokerage business, to complete acquisitions or otherwise, we may not be able to obtain additional financing
when needed. If we cannot raise additional funds on acceptable terms, we may not be able to develop or enhance our business,
take advantage of future growth opportunities or respond to competitive pressure or unanticipated requirements.
Our Revolving Credit Agreement contains restrictions that may limit our flexibility in operating our business.
Our Revolving Credit Agreement contains covenants that could impose operating and financial restrictions on us,
including restrictions on our ability to, among other things and subject to certain exceptions:
•
create liens on certain assets;
•
incur additional debt;
•
make significant investments and acquisitions;
•
consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;
•
dispose of certain assets;
•
pay additional dividends on or make additional distributions in respect of our capital stock or make restricted
payments;
•
repurchase shares of our Class A common stock;
•
enter into certain transactions with our affiliates; and
•
place restrictions on certain distributions from subsidiaries.
Indebtedness that we may enter into in the future, if any, could also contain similar or additional covenants or
restrictions. Any of these restrictions could limit our ability to adequately plan for or react to market conditions and could
otherwise restrict certain of our corporate activities. Any material failure to comply with these covenants could result in a
default under the Revolving Credit Agreement as well as instruments governing our future indebtedness. Upon a material
default, unless such default were cured by us or waived by lenders in accordance with the Revolving Credit Agreement, the
lenders under such agreement could elect to invoke various remedies under the agreement, including potentially accelerating the
payment of unpaid principal and interest, terminating their commitments or, however unlikely, potentially forcing us into
bankruptcy or liquidation. In addition, a default or acceleration under such agreement could trigger a cross default under other
agreements, including potential future debt arrangements or the BGC Group Notes and BGC Partners Notes. No assurance can
be given that our operating results will be sufficient to service our indebtedness or to fund all of our other expenditures or to
obtain additional or replacement financing on a timely basis and on reasonable terms in order to meet these requirements when
due.
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Credit ratings downgrades could adversely affect our cost of capital and the availability of debt financing.
Our credit ratings and associated outlooks are critical to our reputation and operational and financial success. Our
credit ratings and associated outlooks are influenced by a number of factors, including: operating environment, regulatory
environment, earnings and profitability trends, the rating agencies’ view of our funding and liquidity management practices,
balance sheet size/composition and resulting leverage, cash flow coverage of interest, composition and size of the capital base,
available liquidity, outstanding borrowing levels, our competitive position in the industry, our relationships in the industry, our
relationship with Cantor, acquisitions or dispositions of assets and other matters. A credit rating and/or the associated outlook
can be revised upward or downward at any time by a rating agency if such rating agency decides that circumstances of that
company or related companies warrant such a change. Any adverse ratings change or a downgrade in the credit ratings of BGC,
Cantor or any of their other affiliates, and/or the associated ratings outlooks could adversely affect the availability of debt
financing to us on acceptable terms, as well as the cost and other terms upon which we may obtain any such financing. In
addition, our credit ratings and associated outlooks may be important to clients of ours in certain markets and in certain
transactions. A company’s contractual counterparties may, in certain circumstances, demand collateral in the event of a credit
ratings or outlook downgrade of that company. Further, interest rates payable on our future or our and BGC Partners’ currently
outstanding debt may increase in the event that our ratings decline; for example, under the terms of our and BGC Partners’
outstanding senior notes, a downgrade in our credit ratings by both Fitch Ratings Inc. and Standard & Poor’s would lead to an
increase in the interest rates payable on those notes.
As of December 31, 2024, BGC Group’s public long-term credit ratings were BBB- from Fitch Ratings Inc. and S&P
Global Ratings, BBB from Kroll Bond Rating Agency and BBB+ from Japan Credit Rating Agency, Ltd. and the associated
outlooks on all the ratings were stable. No assurance can be given that the credit ratings will remain unchanged in the future.
Any negative change to our credit ratings and associated outlooks may restrict our ability to raise additional capital or refinance
debt on favorable terms, and any resulting impacts on our funding access, liquidity or perceived creditworthiness among our
clients, counterparties, lenders, investors or other market participants could have a material adverse effect on our business,
financial condition, results of operations and prospects. See “—Credit Risk— Credit ratings downgrades or defaults by us,
Cantor or another large financial institution could adversely affect us or financial markets generally.”
Our acquisitions may require significant cash resources and may lead to a significant increase in the level of our
indebtedness.
Future or pending acquisitions may require significant cash resources and lead to a significant increase in the level of
our indebtedness. We may enter into short- or long-term financing arrangements in connection with acquisitions which may
occur from time to time. In addition, we may incur substantial non-recurring transaction costs, including break-up fees, and
assume new liabilities and expenses. The increased level of our consolidated indebtedness in connection with potential
acquisitions may restrict our ability to raise additional capital on favorable terms, and such leverage, and any resulting liquidity
or credit issues, could have a material adverse effect on our business, financial condition, results of operations and prospects.
We may incur substantially more debt or take other actions which would intensify the risks discussed herein.
We may incur substantial additional debt in the future, some of which may be secured debt. Under the terms of our
existing debt, we are permitted under certain circumstances to incur additional debt, grant liens on our assets to secure existing
or future debt, recapitalize our debt or take a number of other actions that could have the effect of diminishing our ability to
make payments on our debt when due. To the extent that we borrow additional funds, the terms of such borrowings may include
higher interest rates, more stringent financial covenants, change of control provisions, make-whole provisions or other terms
that could have a material adverse effect on our business, financial condition, results of operations and prospects.
45
Risks Related to Our Senior Notes
We may not have the funds necessary to repurchase the BGC Group 4.375% Senior Notes, the BGC Group
8.000% Senior Notes, the BGC Group 6.600% Senior Notes, or the outstanding BGC Partners Notes upon a change of
control triggering event as required by the indentures governing these notes.
Upon the occurrence of a “change of control triggering event” (as defined in the indentures governing the BGC Group
4.375% Senior Notes, the BGC Group 8.000% Senior Notes, the BGC Group 6.600% Senior Notes, and the outstanding BGC
Partners Notes), unless we have exercised our right to redeem such notes, holders of the notes will have the right to require us
to repurchase all or any part of their notes at a price in cash equal to 101% of the then-outstanding aggregate principal amount
of the notes repurchased plus accrued and unpaid interest, if any. There can be no assurance that we would have sufficient,
readily available financial resources, or would be able to arrange financing, to repurchase the BGC Group 4.375% Senior
Notes, the BGC Group 8.000% Senior Notes, the BGC Group 6.600% Senior Notes, or the BGC Partners senior notes upon a
“change of control triggering event.” A failure by us to repurchase the notes when required would result in an event of default
with respect to the notes. In addition, such failure may also constitute an event of default and result in the effective acceleration
of the maturity of our other then-existing indebtedness.
The requirement to offer to repurchase the BGC Group 4.375% Senior Notes, the BGC Group 8.000% Senior
Notes, the BGC Group 6.600% Senior Notes, or the BGC Partners senior notes upon a “change of control triggering
event” may delay or prevent an otherwise beneficial takeover attempt of us.
The requirement to offer to repurchase the BGC Group 4.375% Senior Notes, the BGC Group 8.000% Senior Notes,
the BGC Group 6.600% Senior Notes, or the BGC Partners senior notes upon a “change of control triggering event” may in
certain circumstances delay or prevent a takeover of us and/or the removal of incumbent management that might otherwise be
beneficial to investors in our Class A common stock.
Risks Related to the Geographic Locations of Our Business
Our business is geographically concentrated and could be significantly affected by any adverse change in the
regions in which we operate.
Historically, our business operations have been substantially located in the U.S. and the U.K. While we are expanding
our business to new geographic areas, we are still highly concentrated in these areas. Because we derived approximately 34.5%
and approximately 33.3% of our total revenues on a consolidated basis for the year ended December 31, 2024 from our
operations in the U.K. and the U.S., respectively, our business is exposed particularly to adverse regulatory and competitive
changes, economic downturns and changes in political conditions in these countries. If we are unable to identify and
successfully manage or mitigate these risks, our business, financial condition, results of operations and prospects could be
materially adversely affected.
The U.K. exit from the EU could materially adversely impact our customers, counterparties, business, financial
condition, results of operations and prospects.
On January 1, 2021, the U.K. formally left the EU and U.K.-EU trade became subject to a new agreement that was
concluded in December of 2020. The exit from the EU is commonly referred to as Brexit. Financial services fall outside of the
scope of this trade agreement. Instead, the relationship will largely be determined by a series of “equivalence decisions,” each
of which would grant mutual market access for a limited subset of financial services where either party finds the other party has
a regulatory regime that achieves similar outcomes to its own. It is currently unknown if or when equivalence decisions will be
taken. In March 2021, the U.K. and EU agreed a Memorandum of Understanding on Financial Services Regulatory Cooperation
which creates a structure for dialogue but does not include commitments on equivalence.
We implemented plans to ensure continuity of service in Europe and continue to have regulated offices in place in
many of the major European markets. As part of our ongoing Brexit strategy, ownership of BGC Madrid, Copenhagen and
Frankfurt & GFI Paris, Madrid and Dublin branches was transferred to Aurel BGC SAS (a French-based operation and
therefore based in the EU) in July 2020. We have been generally increasing our footprint in the EU which includes the
establishment of a branch office of Aurel BGC SAS in Milan and an office in Monaco under a local Monaco subsidiary.
Regardless of these and other mitigating measures, our European headquarters and largest operations are in London,
and market access risks and uncertainties have had and could continue to have a material adverse effect on our customers,
counterparties, business, financial condition, results of operations and prospects. Furthermore, in the future the U.K. and EU’s
regulation may diverge, which could disrupt and increase the costs of our operations, and result in a loss of existing levels of
cross-border market access.
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Risks Related to Our Intellectual Property
We may not be able to protect our intellectual property rights or may be prevented from using intellectual
property necessary for our business.
Our success is dependent, in part, upon our intellectual property, including our proprietary technology. We rely
primarily on trade secret, contract, patent, copyright, and trademark law in the U.S. and other jurisdictions, as well as
confidentiality procedures and contractual provisions to establish and protect our intellectual property rights to proprietary
technologies, products, services or methods, and our brands. For example, we regularly file patent applications to protect
inventions arising from our research and development, and we are currently pursuing patent applications around the world. We
also control access to our proprietary technology and enter into confidentiality and invention assignment agreements with our
employees and consultants and confidentiality agreements with other third parties. Protecting our intellectual property rights is
costly and time consuming, and our business may be materially adversely affected by resources and management attention
expended on pursuing such protections.
Unauthorized use of our intellectual property could make it more expensive to do business and harm our operating
results. We cannot ensure that our intellectual property rights are sufficient to protect our competitive advantages or that any
particular patent, copyright or trademark is valid and enforceable, and all patents ultimately expire. We also cannot ensure that
all intellectual property rights are registrable in the U.S. or elsewhere. In addition, the laws of some foreign jurisdictions may
not protect our intellectual property rights to the same extent as the laws in the United States, or at all. We may also utilize
third-party software licensed under “open source” licenses from time-to-time in connection with our business or product or
service offerings. Although we have taken steps to protect ourselves, use of such third-party software may restrict how we use
or distribute our products or services, subject us to claims, or impair our intellectual property rights. Any significant impairment
of our intellectual property rights could harm our business or our ability to compete.
Many companies, including those in the computer and financial services industries own large numbers of patents,
copyrights, and trademarks and sometimes file lawsuits based on allegations of infringement or other violations of intellectual
property rights. In addition, there has been a proliferation of patents applicable to these industries and a substantial increase in
the number of such patent applications filed. Under current law, U.S. patent applications typically remain secret for 18 months
or, in some cases, until a patent is issued. Because of technological changes in these industries, patent coverage, and the
issuance of new patents, it is possible certain components of our products and services may unknowingly infringe existing
patents or other intellectual property rights of others. Although we have taken steps to protect ourselves, there can be no
assurance that we will be aware of all patents, copyrights or trademarks that may pose a risk of infringement by our products
and services. Generally, it is not economically practicable to determine in advance whether our products or services may
infringe the present or future rights of others.
Accordingly, we may face claims of infringement or other violations of intellectual property rights that could interfere
with our ability to use intellectual property or technology that is material to our business. In addition, restrictions on the
distribution of some of the market data generated by our brokerage desks could limit the comprehensiveness and quality of the
data we are able to distribute or sell. The number of such third-party claims may grow. Our technologies may not be able to
withstand such third-party claims or rights against their use.
We may have to rely on litigation or other adversarial proceedings to secure, defend or enforce our intellectual
property rights, protect our trade secrets, determine the validity and scope of the rights of others or defend against claims of
infringement or invalidity. Additionally, third parties may claim that we have infringed upon their intellectual property rights.
Any such claims, proceedings or litigation, whether successful or unsuccessful, could result in substantial costs to us, and the
diversion of resources and the attention of management, any of which could materially negatively affect our business. Such
claims, proceedings or litigation could also require us to enter into settlement, royalty or licensing agreements (including with
third parties claiming such infringement), stop selling or redesign affected products or services, rebrand or restrict our products
or services, pay damages or satisfy indemnification commitments with our customers. Such settlement, royalty or licensing
agreements, if any, may not be available on terms acceptable to us, and may negatively affect our business, financial condition,
results of operations and prospects.
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If our software licenses or services from third parties are terminated or adversely changed or amended or
contain material defects or errors, or if any of these third parties were to cease doing business or if products or services
offered by third parties that we rely upon were to contain material defects or errors, our ability to operate our business
may be materially adversely affected.
We license databases, software and services from third parties, much of which is integral to our systems and our
business. The licenses are terminable if we breach or have been perceived to have breached our obligations under the license
agreements. If any material licenses were terminated or adversely changed or amended, if any of these third parties were to
cease doing business or if any licensed software or databases licensed by these third parties were to contain material defects or
errors, we may be forced to spend significant time and money to replace the licensed software and databases, and our ability to
operate our business may be materially adversely affected. Further, any errors or defects in third-party services or products
(including hardware, software, databases, cloud computing and other platforms and systems) or in services or products that we
develop ourselves, could result in errors in, or a failure of our services or products, which could harm our business. Although
we take steps to locate replacements, there can be no assurance that the necessary replacements will be available on acceptable
terms, if at all. There can be no assurance that we will have an ongoing license to use all intellectual property which our systems
require, the failure of which could have a material adverse effect on our business, financial condition, results of operations and
prospects.
Risks Related to Our IT Systems and Cybersecurity
Defects or disruptions in our technology or services could diminish demand for our products and services and
subject us to liability.
Because our technology, products and services are complex and use or incorporate a variety of computer hardware,
software and databases, both developed in-house and acquired from third party vendors, our technology, products and services
may have errors or defects. Errors and defects could result in unanticipated downtime or failure and could cause financial loss
and harm to our reputation and our business. We have from time to time found defects and errors in our technology, products
and service and defects and errors in our technology, products or services may be detected in the future. In addition, our
customers may use our technology, products and services in unanticipated ways that may cause a disruption for other
customers. As we acquire companies, we may encounter difficulty in integrating the acquired technologies, products and
services, and maintaining the quality standards that are consistent with our technology, products and services. Since our
customers use our technology, products and services for important aspects of their business and for financial transactions, any
errors, defects, or disruptions in such technology, products and services or other performance problems with our technology,
products and services could subject our customers to harm and hurt our reputation.
Malicious cyber-attacks and other adverse events that affected our operational systems or infrastructure, or
those of third parties, could disrupt our business, result in the disclosure of confidential information, damage our
reputation and cause losses or regulatory penalties.
While we view cybersecurity as a top priority, developing and maintaining our operational systems and infrastructure
is challenging, particularly as a result of rapidly evolving legal and regulatory requirements and technological shifts. Our
businesses require us to process and monitor, on a daily basis, a very large number of transactions, many of which are highly
complex, across numerous and diverse markets and in many currencies. Developing and maintaining our operational systems
and infrastructure are challenging, particularly as a result of us and our clients entering into new businesses, jurisdictions and
regulatory regimes, rapidly evolving legal and regulatory requirements and technological shifts. Our financial, accounting, data
processing or other operating and compliance systems and facilities may fail to operate properly or become disabled as a result
of events that are wholly or partially beyond our control, including malicious cyber-attacks or other adverse events, which may
adversely affect our ability to process these transactions or provide services or products.
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In addition, our operations rely on the secure processing, storage and transmission of confidential and other
information on our computer systems and networks. Although we take protective measures, such as software programs,
firewalls and similar technology, to maintain the confidentiality, integrity and availability of our and our customers’
information, and endeavor to modify these protective measures as circumstances warrant, the nature of cyber threats continues
to evolve. As a result, our computer systems, software and networks may be vulnerable to unauthorized access, loss or
destruction of data (including confidential customer information), account takeovers, unavailability or disruption of services,
computer viruses, acts of vandalism, or other malicious code, ransomware, hacking, phishing and other cyber-attacks and other
adverse events that could have an adverse security impact. Additionally, we may be vulnerable to cybersecurity attacks utilizing
emerging technologies, such as artificial intelligence. Despite the defensive measures we have taken, these threats may come
from external forces, such as governments, nation-state actors, organized crime, hackers, and other third parties or may
originate internally from within our business. Given the high volume of transactions involved in our business, certain errors
may be repeated or compounded before they are discovered and rectified.
We also face the risk of operational disruption, failure, termination or capacity constraints of any of the third parties
that facilitate our business activities, including vendors, customers, counterparties, exchanges, clearing agents, clearinghouses
or other financial intermediaries. Such parties could also be the source of a cyber-attack on or breach of our operational
systems, network, data or infrastructure. Malicious actors may also attempt to compromise or induce our employees, clients or
other users of our systems to disclose sensitive information or provide access to our data, and these types of risks may be
difficult to detect or prevent.
Our financial, accounting, data processing or other operating and compliance systems and facilities may fail to operate
properly or become disabled as a result of events that are wholly or partially beyond our control, such as a malicious cyber-
attack or other adverse events, which may adversely affect our ability to provide services. Any such cyber incidents involving
our computer systems and networks, or those of third parties important to our business, could have a material adverse effect on
our business, financial condition, results of operations and prospects.
There have been an increasing number of ransomware, hacking, phishing and other cyber-attacks in recent years in
various industries, including ours, and cybersecurity risk management has been the subject of increasing focus by our
regulators. Like other companies, we have on occasion experienced, and may continue to experience, threats to our systems,
including viruses, phishing and other cyber-attacks. The number and complexity of these threats continue to increase over time.
The techniques used in these attacks are increasingly sophisticated, change frequently and are often not recognized until
launched. If one or more cyber-attacks occur, it could potentially jeopardize the confidential, proprietary and other information
processed and stored in, and transmitted through, our computer systems and networks, or otherwise cause interruptions or
malfunctions in our, as well as our customers’ or other third parties’ operations, which could result in reputational damage,
financial losses, customer dissatisfaction and/or regulatory penalties, which may not in all cases be covered by insurance. If an
actual, threatened or perceived cyber-attack or breach of our security occurs, our clients could lose confidence in our platforms
and solutions, security measures and reliability, which would materially harm our ability to retain existing clients and gain new
clients. As a result of any such attack or breach, we may be required to expend significant resources to repair system, network
or infrastructure damage and to protect against the threat of future cyber-attacks or security breaches. We could also face
litigation or other claims from impacted individuals as well as substantial regulatory sanctions or fines.
The extent of a particular cyber-attack and the steps that we may need to take to investigate the attack may not be
immediately clear, and it may take a significant amount of time before such an investigation can be completed and full and
reliable information about the attack is known. While such an investigation is ongoing, we may not necessarily know the full
extent of the harm caused by the cyber-attack, and any resulting damage may continue to spread. Furthermore, it may not be
clear how best to contain and remediate the harm caused by the cyber-attack, and certain errors or actions could be repeated or
compounded before they are discovered and remediated. Any or all of these factors could further increase the costs and
consequences of a cyber-attack.
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Our regulators in recent years have increased their examination and enforcement focus on all matters of our business,
especially matters relating to cybersecurity threats, including the assessment of firms’ vulnerability to cyber-attacks. In
particular, regulatory concerns have been raised about firms establishing effective cybersecurity governance and risk
management policies, practices and procedures that enable the identification of risks, testing and monitoring of the effectiveness
of such procedures and adaptation to address any weaknesses; protecting firm networks and information; data loss prevention,
identifying and addressing risk associated with remote access to client information and fund transfer requests; identifying and
addressing risks associated with customers’ business partners, counterparties, vendors, and other third parties, including
exchanges and clearing organizations; preventing and detecting unauthorized access or activities; adopting effective mitigation
and business continuity plans to timely and effectively address the impact of cybersecurity breaches; and establishing protocols
for reporting cybersecurity incidents. As we enter new jurisdictions or different product area verticals, we may be subject to
new areas of risk or to cyber-attacks in areas in which we have less familiarity and tools. A technological breakdown could also
interfere with our ability to comply with financial reporting requirements. While any insurance that we may have that covers a
specific cybersecurity incident may help to prevent the realization of a significant loss from the incident, it would not protect us
from the effects of adverse regulatory actions that may result from the incident or a finding that we had inadequate
cybersecurity controls, including the reputational harm that could result from such regulatory actions.
Additionally, data privacy is subject to frequently changing rules and regulations in countries where we do business.
Rights in relation to an individual’s personal data in the EU and U.K. are governed, respectively, by the GDPR in the EU and
the equivalent Data Protection Act 2018 in the U.K. We are subject to compliance obligations in relation to such personal data
and the possibility of significant financial penalties for non-compliance. We are also subject to certain U.S. federal and state
laws governing the protection of personal data. These laws and regulations are increasing in complexity and number. In
addition to the increased cost of compliance, our failure to successfully implement or comply with appropriate processes to
adhere to the GDPR and other laws and regulations relating to personal data could result in substantial financial penalties for
non-compliance, expose us to litigation risk and harm our reputation.
We and our competitors may use artificial intelligence in our businesses, and challenges with properly
managing its use could result in competitive harm, regulatory action, legal liability and brand or reputational harm.
We are developing and may use AI, including, without limitation, machine learning and generative AI in our business
and integrate AI into our platforms, products, offerings and services. Such use may present legal, regulatory and other
challenges that could subject us to competitive harm, regulatory action, legal liability and brand or reputational harm. Our
efforts to utilize these technological advancements may not be successful, may result in substantial integration and maintenance
costs, and may expose us to additional risks. If the output of any AI integrated into our platforms, products, offerings or
services are or are alleged to be deficient, inaccurate, infringing, violative of third-party rights or biased, our business, financial
condition, and results of operations may be adversely affected. The content, analyses, or recommendations generated by AI
programs, if deficient, inaccurate, or biased, could adversely impact our business, financial condition, and operational results, as
well as our reputation. Moreover, ethical concerns associated with AI could lead to brand damage, competitive disadvantages,
or legal repercussions. Any problems with our implementation or use of AI or other technological advancements could
negatively impact our business or results of our operations.
Our success and ability to remain competitive in the industry in which we operate requires adapting to technological
developments and evolving industry standards, including in the field of AI. Our competitors or other third parties may
incorporate AI into their products or services more quickly or more successfully than us, which could make our products and
services obsolete, impair our ability to compete effectively and adversely affect our business. Moreover, use of third-party AI
tools could lead to the inadvertent disclosure of confidential and proprietary information, which could put us at a competitive
disadvantage and adversely affect our proprietary rights, business and financial condition and expose us to reputational harm
and liability.
As AI capabilities improve and are increasingly adopted, we may also become more vulnerable to cybersecurity
attacks that use AI. Such cybersecurity attacks could compromise our intellectual property and other sensitive information, be
costly to remediate and cause significant damage to our business, reputation and operations. Our vendors and third-party
partners may incorporate AI without disclosing this use to us, and the providers may not meet existing or rapidly evolving
regulatory or industry standards with respect to privacy and data protection and may inhibit our or our vendors’ ability to
maintain an adequate level of service and experience further exposing us to cybersecurity attacks and the loss of valuable
property and information as well as adversely impact the public perception of the effectiveness of our security measures.
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Risks Relating to Our Key Personnel and Employee Turnover
Leadership changes and the resulting transition following Howard Lutnick’s confirmation as the U.S. Secretary
of Commerce could have an adverse effect on our business.
On February 18, 2025, Howard Lutnick was confirmed by the United States Senate as the 41st Secretary of
Commerce. Following his confirmation, Howard Lutnick stepped down as our Chairman of the Board and Chief Executive
Officer, positions he has served in since 1999, and our Board appointed John Abularrage, JP Aubin, and Sean Windeatt as our
Co-Chief Executive Officers.
While we have full confidence in our proven senior management team including our three Co-Chief Executive
Officers, which are long-term and respected industry veterans, the loss of Howard Lutnick, as well as his deep institutional
knowledge and industry relationships, as Chief Executive Officer and the resulting transition may be inherently difficult to
manage and may hamper our ability to meet our financial and operational goals as we adapt to these changes, particularly in the
short term. Such changes may also result in added costs. While we believe our new Co-CEOs have significant skills and
longevity in the industry that will provide a strong transition, the loss of Howard Lutnick could result in initial disruptions to
our operations and impact our ability to execute on our current strategy and pursue new strategic initiatives, which in turn could
have an adverse effect on our business.
The loss of key employees or the failure to hire and retain highly skilled and other key personnel could
negatively affect our business.
Our people are our most important resource. We must retain the services of our key employees and strategically recruit
and hire new talented employees to attract customer transactions. Further, as we diversify into future business lines or
geographic regions, hiring and engagement of effective management in these areas will impact our success. See “Item 1-
Business-Human Capital Management.” If our retention efforts are not successful or our turnover rate increases in the future,
our business, results of operations and financial condition could be materially adversely affected.
Effective succession planning is also important to our long-term success. Failure to smoothly navigate current and
future transitions among our senior management or to effectively transfer knowledge to future executive officers and key
employees could hinder our strategic planning and execution. From time to time, members of senior management, directors or
other key employees may leave our Company or be absent due to illness or other factors. While we strive to retain our key
employees and to reduce the negative impact of such changes when they occur, losing certain key employees could result in
significant disruptions to our operations, adversely impact employee retention, and seriously harm our business. Similarly,
hiring, training, and successfully integrating replacements for critical personnel is time consuming and, if unsuccessful, could
disrupt our operations, and as a result could materially adversely affect our business, financial condition, results of operations
and prospects.
The ability of key employees to devote adequate time and attention to us are a key part of the success of our
business, and failure to continue to employ and have the benefit of these persons may adversely affect our business and
prospects.
Certain officers and other key employees have positions with and obligations to Cantor, Newmark, or their respective
affiliates, and may dedicate only a portion of their professional efforts to our business and operations. There may be no
contractual obligation for them to spend a specific amount of their time with us, Newmark or Cantor and their respective
affiliates.
For example, Mr. Merkel, the Chairman of our Board and our Executive Vice President and General Counsel, is
employed as Executive Vice Chairman, Executive Managing Director, General Counsel and Secretary of Cantor and Executive
Vice President and Chief Legal Officer of Newmark as well as Chairman of Newmark’s board of directors. In addition, Mr.
Merkel also holds offices at various other affiliates of Cantor. Mr. Merkel is not subject to employment agreements with us or
any of our subsidiaries.
In 2024, Mr. Merkel spent approximately 35% of his working time on our matters. Mr. Merkel expects to spend
approximately 35% of his working time on our matters in 2025. This percentage may vary depending on business
developments, strategic initiatives or acquisition activity at us or Newmark or Cantor or any of our or their other affiliates,
including SPACs.
Mr. Merkel or certain other of our officers or key employees who have positions with and obligations to other entities
may not be able to dedicate adequate time and attention to our business and operations, may be subject to conflicts of interest
with us due to their other positions and obligations, and we could experience an adverse effect on our operations due to the
demands placed on these persons by their other professional obligations.
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We may be unable to enforce post-employment restrictive covenants applicable to our employees.
Certain of our key employees and officers are subject to post-employment restrictive covenants, including non-
competition agreements, in connection with their employment agreements. Should any of our key employees join an existing
competitor, form a competing company, offer services to Cantor or any affiliates that compete with our products, services or
otherwise leave us, some of our customers could choose to use the services of that competitor or another competitor instead of
our services, which could adversely affect our revenues and as a result could materially adversely affect our business, financial
condition, results of operations and prospects.
While we have had success in responding to challenges to certain of our non-compete provisions, there can be no
assurance that our non-competition agreements will be found enforceable if challenged in certain states, including states that
generally do not enforce post-employment restrictive covenants. In 2024, the Federal Trade Commission enacted a rule, which
is currently under legal challenge, that would render non-competition clauses unenforceable in certain situations. If such a rule
is upheld (in any form) by the courts, it could have a material adverse impact on any applicable post-employment restrictive
covenants currently in place.
Risks Related to Internal Controls
If we fail to implement and maintain an effective internal control environment, our operations, reputation and
stock price could suffer, we may need to restate our financial statements, and we may be delayed in or prevented from
accessing the capital markets.
As a public company, we are required, under Section 404 of the Sarbanes-Oxley Act, to furnish a report by
management on, among other things, the effectiveness of our internal control over financial reporting. This assessment is
required to include disclosure of any material weaknesses identified by our management in our key internal controls over
financial reporting. A material weakness is a control deficiency or combination of control deficiencies that results in more than
a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected. To
ensure compliance with Section 404, we will continue to evaluate our key internal controls over financial reporting, including
with respect to acquisitions.
Internal controls over financial reporting, no matter how well designed, have inherent limitations. Therefore, internal
controls determined to be effective can provide only reasonable assurance with respect to financial statement preparation and
may not prevent or detect all misstatements. Due to the inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or
mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people
or by management override of the controls. Moreover, projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate due to changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate. As such, we could lose investor confidence in the accuracy and completeness of our
financial reports, which may have a material adverse effect on our reputation and stock price.
Our ability to identify and remediate any material weaknesses in our internal controls over financial reporting could
affect our ability to prepare financial reports in a timely manner, control our policies, procedures, operations and assets, assess
and manage our operational, regulatory and financial risks, and integrate our acquired businesses. Similarly, we need to
effectively manage any growth that we achieve in such a way as to ensure continuing compliance with all applicable control,
financial reporting and legal and regulatory requirements. Any material failure to ensure full compliance with control and
financial reporting requirements, including as a result of acquisitions, could result in restatement of our financial statements,
delay or prevent us from accessing the capital markets and harm our reputation and/or the market price for our Class A common
stock.
Risks Related to Seasonality
The financial markets in which we operate are generally affected by seasonality, which could have a material
adverse effect on our results of operations in a given period.
Traditionally, the financial markets around the world experience lower volume during the summer and at the end of the
year, due to a general slowdown in the business environment around holiday seasons, and, therefore, our transaction volume
levels may decrease during those periods. The timing of local holidays also affects transaction volumes. These factors could
have a material effect on our results of operations in any given period.
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The seasonality of our business makes it difficult to determine during the course of the year whether planned results
will be achieved and to adjust to changes in expectations. To the extent that we are not able to identify and adjust for changes in
expectations or we are confronted with negative conditions that inordinately impact seasonal norms, our business, financial
condition, results of operations and prospects could be materially adversely affected.
Risks Related to Regulatory and Legal Compliance
The financial services industry in general faces potential regulatory, litigation and/or criminal risks that may
result in damages or fines or other penalties as well as costs, and we may face damage to our professional reputation and
legal liability if our products and services are not regarded as satisfactory, our employees do not adhere to all applicable
legal and professional standards, or for other reasons, all of which could have a material adverse effect on our business,
financial condition, results of operations and prospects.
Many aspects of our business involve substantial risks of liability. In the normal course of business, we have been a
party to investigations, administrative proceedings, lawsuits, arbitrations and other actions involving primarily claims for
damages. In certain circumstances, we could also face potential criminal investigations, enforcement actions or liability,
including fines or other penalties. Examinations, inspections, regulatory inquiries and subpoenas or other requests for
information or testimony may cause us to incur significant expenses, including fees for legal representation and other
professional advisors and costs. Such regulatory, legal, or other actions may also be directed at certain executives or employees
who may be critical to our business or to particular brokerage desks. The risks associated with such matters often may be
difficult to assess or quantify, and their existence and magnitude often remain unknown for substantial periods of time. The
expansion of our businesses, including into new areas, imposes additional risks of liability.
A settlement of, or judgment related to, any such matters could result in regulatory, civil or criminal liability, fines,
penalties, restrictions or limitations on our operations and activities and other sanctions and could otherwise have a material
adverse effect on our business, results of operations, financial condition and prospects. Any such action could also cause us
significant reputational harm, which, in turn, could seriously harm our business. In addition, regardless of the outcome of such
matters, we may incur significant legal and other costs, including substantial management time, dealing with such matters, even
if we are not a party to the litigation or a target of the inquiry.
We depend to a large extent on our relationships with our customers and our reputation for integrity and high-caliber
professional services to attract and retain customers. We are subject to the risk of failure of our employees to comply with
applicable laws, rules and regulations or to be adequately supervised by their managers, and to the extent that such individuals
do not meet these requirements, we may be subject to the risk of fines or other penalties as well as reputational risk. It is not
always possible to deter and detect employee misconduct or fraud. While we have various supervisory systems and compliance
processes and procedures in place, and seek to mitigate applicable risks, the precautions we take to deter, detect and prevent this
activity may not be effective in all cases. As a result, if our customers are not satisfied with our products or services, or our
employees do not adhere to all applicable legal and professional standards, such matters may be more damaging to our business
than to other types of businesses. Significant regulatory action or substantial legal liability against us could have a material
adverse effect on our business, financial condition, results of operations and prospects, or cause significant reputational damage
to us, which could seriously harm us.
We are subject to regulatory capital requirements on our regulated business, and a significant operating loss or
any extraordinary charge against capital could materially adversely affect our ability to expand or, depending upon the
magnitude of the loss or charge, even to maintain the current level of our business.
Many aspects of our business, like those of other financial services firms, are subject to significant capital
requirements. In the U.S., the SEC, FINRA, the CFTC, the NFA and various other regulatory bodies have stringent provisions
with respect to capital applicable to the operation of brokerage firms, which vary depending upon the nature and extent of these
entities’ activities. Four of our subsidiaries, BGCF, GFI Securities LLC, FMX Execution LLC, and Mint Brokers are registered
with the SEC and subject to the Uniform Net Capital Requirements. As an FCM, Mint Brokers is also subject to CFTC capital
requirements. BGCF is also a member of the FICC, which imposes capital requirements on its members. These entities are
subject to SEC, FINRA, CFTC and NFA net capital requirements. In addition, our SEFs, BGC Derivative Markets and GFI
Swaps Exchange LLC, are required to maintain financial resources to cover operating costs for at least one year, keeping at
least enough cash or highly liquid securities to cover six months’ operating costs.
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On January 22, 2024, FMX received approval from the CFTC to operate an exchange for U.S. Treasury and SOFR
futures. On September 23, 2024, FMX Futures Exchange launched the trading of SOFR futures. The ongoing operation of FMX
may require further regulatory approval and be subject to regulatory oversight, which could subject us to additional costs or
obstacles. The failure of FMX to receive any required regulatory approvals to operate may adversely affect our business.
Our international operations are also subject to capital requirements in their local jurisdiction. BGC Brokers L.P., GFI
Brokers Limited, and GFI Securities Limited, which are based in the U.K., are currently subject to solo capital requirements
established by the FCA’s Investment Firm Prudential Regime. In addition, BGC European Holdings L.P. is subject to the
FCA’s consolidated capital requirements. The capital requirements of our French entities (and their EU branches) are
predominantly set by the ACPR and AMF. U.K. and EU authorities apply stringent provisions with respect to capital applicable
to the operation of these brokerage firms, which vary depending upon the nature and extent of their activities.
In addition, the majority of our other foreign subsidiaries are subject to similar regulation by the relevant authorities in
the jurisdictions in which they do business, such as Australia, Hong Kong and Singapore. These regulations often include
minimum capital requirements, which are subject to change. Further, we may become subject to capital requirements in other
foreign jurisdictions in which we currently operate or in which we may enter.
We expect to continue to maintain levels of capital in excess of regulatory minimums. Should we fail to maintain the
required capital, we may be required to reduce or suspend our brokerage operations during the period that we are not in
compliance with capital requirements and may be subject to suspension or revocation of registration or withdrawal of
authorization or other disciplinary action from domestic and international regulators, which would have a material adverse
effect on us. In addition, should we fail to maintain the capital required by clearing organizations of which we are a member,
our ability to clear through those clearing organizations may be impaired, which may materially adversely affect our ability to
process trades.
If the capital rules are changed or expanded, or if there is an unusually large charge against capital, our operations that
require the intensive use of capital would be limited. Our ability to withdraw capital from our regulated subsidiaries is subject to
restrictions, which, in turn, could limit our ability to pay our indebtedness, other expenses, and dividends on our Class A
common stock, to repurchase shares of our Class A common stock or to pursue strategic acquisitions or other growth
opportunities. It is possible that capital requirements may also be relaxed as a result of future changes in U.S. regulation,
although no assurance can be given that such changes will occur. We cannot predict our future capital needs or our ability to
obtain additional financing. No assurance can be given that required capital levels will remain stable or that we will not incur
substantial expenses in connection with maintaining current or increased capital levels or engaging in business restructurings or
other activities in response to these requirements.
In addition, financial services firms such as ours are subject to numerous conflicts of interests or perceived conflicts,
including principal trading and trading to make markets. We have adopted various policies, controls, and procedures to address
or limit actual or perceived conflicts, and we will regularly seek to review and update our policies, controls and procedures.
However, these policies, controls and procedures may result in increased costs and additional operational personnel. Failure to
adhere to these policies, controls and procedures may result in regulatory sanctions or customer claims.
Even after the award of permanent registration status to our SEFs, we will incur significant additional costs
operating certain of our swap execution facilities, our revenues may be lower than in the past and our financial
condition and results of operations may be materially adversely affected by future events.
The Dodd-Frank Act mandated that certain cleared swaps (subject to an exemption from the clearing requirement)
trade on either a SEF or DCM. SEF and DCM core principles relate to trading and product requirements, compliance and audit-
trail obligations, governance and disciplinary requirements, operational capabilities, surveillance obligations and financial
information and resource requirements. While these principles may or may not be permanently enforced, we do know that we
will be subject to a more complex regulatory framework going forward, and that there will be significant costs to prepare for
and to comply with these ongoing regulatory requirements and potential amendments. We will incur increased legal fees,
personnel expenses, and other costs, as we work to analyze and implement the necessary legal structure for full compliance with
all applicable regulations. There will also be significant costs related to the development, operation and enhancement of our
technology relating to trade execution, trade reporting, surveillance, compliance and back-up and disaster recovery plans
designed to meet the requirements of the regulators.
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On November 2, 2023, the SEC passed rules for the registration and regulation of security-based swap execution
facilities. New Regulation SE under the Exchange Act creates a regime for the registration and regulation of security-based
SEFs. The new regulatory framework was one of the major reforms required under Title VII of the Dodd-Frank Act relating to
the over-the-counter derivatives market. In developing this proposal, the SEC sought to harmonize as closely as practicable
with parallel rules of the CFTC that govern SEFs and swap execution generally. Regulation SE implements the Exchange Act’s
trade execution requirement for security-based swaps and address the cross-border application of that requirement; implement
Section 765 of the Dodd-Frank Act to mitigate conflicts of interest at security-based SEFs and national securities exchanges
that trade security-based swaps; and promote consistency between proposed Regulation SE and existing rules under the
Exchange Act. In August 2024, GFI Swaps Exchange LLC submitted an application to the SEC to become an SEC registered
SEF. In addition, on behalf of a number of our foreign platforms, we have requested an exemption from registration as an SEC
SEF. The exemptive relief is pending approval by the SEC. On January 29, 2025 the SEC approved GFI Swaps Exchange
LLC’s application and the firm’s registration is effective on February 28, 2025.
While we continue to have a compliance framework in place to comply with both CFTC and SEC rules and
regulations, it is possible that the existing regulatory framework may be amended, which amendments could have a positive or
negative impact on our business, financial condition, results of operations and prospects.
Certain banks and other institutions may continue to be limited in their conduct of proprietary trading and may be
further limited from trading in certain derivatives. The new rules, including the proprietary trading restrictions for certain banks
and other institutions, could materially impact transaction volumes and liquidity in these markets and our business, financial
condition, results of operations and prospects could be materially adversely impacted as a result.
If we fail to continue to qualify as a SEF under any of these conditions, we may be unable to maintain our position as a
provider of execution and brokerage services in the markets for many of the OTC products for which we have traditionally
acted as an intermediary. This would have a broad impact on us and could have a material adverse effect on our business’
financial condition, results operations, and prospects.
Our energy, commodities and shipping activities, including those related to environmental and emission, power,
oil, and natural gas products, subject us to extensive regulation, potential catastrophic events and other risks that may
result in our incurring significant costs and liabilities.
We engage in the brokerage of a wide range of energy and commodities products, including environmental and
emission, power, oil, and natural gas products. We also provide brokerage services associated with the shipping of certain
energy and commodities products. These activities subject us and our customers to extensive regulatory oversight, involving
federal, state, and local and foreign commodities, energy, environmental, and other governmental laws, and regulations and
may result in significant costs and liabilities.
We or our clients may incur substantial costs in complying with current or future laws and regulations relating to our
energy and commodities-related activities. New regulation of OTC derivatives markets in the U.S. and similar legislation
proposed or adopted abroad could impose significant costs and new requirements on the commodities derivatives activities of
us and our customers. Therefore, the overall reputation of us or our customers may be adversely affected by the current or
future regulatory environment. Failure to comply with these laws and regulations may result in substantial civil and criminal
penalties and fines for market participants.
The commodities-related activities of us and our customers are also subject to the risk of unforeseen catastrophic
events, many of which are outside of our control, which could result in significant liabilities for us or our customers. We may
not be able to obtain insurance to cover these risks, and the insurance that we have may be inadequate to cover our liabilities.
The occurrence of any of such events may prevent us from performing under our agreements with customers, may impair our
operations, and may result in litigation, regulatory action, negative publicity or other reputational harm, which could have a
material negative effect on our business, financial condition, results of operations and prospects.
Our business, financial condition, results of operations and prospects could be materially adversely affected by
new laws, rules, or regulations, by changes in existing law, rules or regulations or the application thereof or by
disagreements with regulatory agencies regarding the application of such laws, rules or regulations.
The financial services industry, in general, is heavily regulated. Proposals for additional legislation further regulating
the financial services industry are periodically introduced in the U.S., the U.K., the EU, and other geographic areas. Moreover,
the agencies regulating the financial services industry also periodically adopt changes to their rules and regulations, particularly
as these agencies have increased the focus and intensity of their regulation of the financial services industry.
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Changes in legislation and in the rules and regulations promulgated by the SEC, FINRA, the CFTC, the NFA, the U.S.
Treasury, the FCA, the European Commission, ESMA and other domestic and international regulators and self-regulatory
organizations, as well as changes in the interpretation or enforcement of existing laws and rules, often directly affect the method
of operation and profitability of brokerages and could result in restrictions in the way we conduct our business. For example,
the U.S. Congress, the U.S. Treasury, the Board of Governors of the Federal Reserve System, the SEC and the CFTC are
continuing to review the nature and scope of their regulation and oversight of the government securities markets and U.S.
securities and derivative markets. Furthermore, in Europe, MiFID II was implemented in January 2018. MiFID II requires a
significant part of the market in these instruments to trade on trading venues subject to pre- and post-trade transparency regimes
and non-discriminatory fee structures and access. In addition, it has had a particularly significant impact in several key areas,
including corporate governance, transaction reporting, technology synchronization, best execution and investor protection.
MiFID II also introduced a new regulated execution venue category to accompany the existing Multilateral Trading Facility
regime. The new venue category is known as an OTF, and it captures much of the voice and hybrid trading in EU. Certain of
our existing EU derivatives and fixed income execution business now take place on OTFs, and we currently operate one OTF
for each of the U.K.-regulated entities, one in France at Aurel BGC and one MTF under GFI Securities Limited.
In the U.S., the SEC has proposed rules to expand Regulation ATS to cover ATS trading government securities. In
addition, the proposed rules extend Regulation SCI to ATS trading government securities.
While we continue to have a compliance framework in place to comply with both existing and proposed rules and
regulations, it is possible that the existing regulatory framework may be amended, which amendments could have a positive or
negative impact on our business, financial condition, results of operations and prospects.
We believe that uncertainty and potential delays around the final form that such new laws and regulations might take
may negatively impact trading volumes in certain markets in which we transact. Increased capital requirements may also
diminish transaction velocity. We believe that it remains premature to know conclusively the specific aspects of the U.S., U.K.
and EU proposals which may directly impact our business as some proposals have not yet been finalized and others which have
been proposed remain subject to further debate. Additionally, unintended consequences of the laws, rules and regulations may
adversely affect us in ways yet to be determined. We are unable to predict how any of these new laws, rules, regulations and
proposals will be implemented or in what form, or whether any additional or similar changes to laws, rules or regulations,
including the interpretation or implementation thereof, will occur in the future. Any such action could affect us in substantial
and unpredictable ways and could have a material adverse effect on our businesses, financial condition, results of operations
and prospects.
Changes in our tax rates, unavailability of certain tax credits or reliefs, exposure to additional tax liabilities or
assessments or challenges to our tax positions or interpretations could adversely affect our results of operations and
financial condition.
We are subject to tax risks inherent in operating a global business in various jurisdictions, including increased taxes
and levies and future changes in income tax regulations. The authorities of countries in which we have offices or do business
may from time-to-time institute changes to tax law that, if applicable to us, could have a material adverse effect on our business,
financial condition, results of operations and prospects. Similarly, the current presidential administration has outlined a series of
proposed changes to U.S. tax law, some of which could apply to us. It is not possible to predict if any of these new provisions
will be enacted or, if they are, what form they may take. It is possible that one or more of such provisions could negatively
impact our costs and our effective tax rate, which would affect our after-tax earnings. If any of such changes to tax law were
implemented and/or deemed to apply to us, they could have a material adverse effect on our business, financial condition,
results of operations and prospects, including on our ability to attract, compensate and retain brokers, salespeople, managers,
technology professionals and other front-office personnel. Similarly, our tax positions and interpretations of the application of
tax laws, including to our business and to our structure and those of our subsidiaries, have been challenged in the past and may
be challenged in the future. If we are unable to successfully address any such challenge, it could have a material adverse effect
on our business, financial condition, results of operations and prospects.
Extensive regulation of our business restricts and limits our operations and activities and results in ongoing
exposure to potential significant costs and penalties, including fines, sanctions, enhanced oversight, increased financial
and capital requirements, and additional restrictions or limitations on our ability to conduct or grow our business.
The financial services industry, including our business, is subject to extensive regulation, which is very costly. The
requirements imposed by regulators are designed to ensure the integrity of the financial markets and to protect customers and
other third parties who deal with us and are not designed to protect the holders of our stock, notes or other securities. These
regulations will often serve to restrict or limit our operations and activities, including through capital, customer protection and
market conduct requirements.
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Our business is subject to regulation by governmental and self-regulatory organizations in the jurisdictions in which
we operate around the world. Many of these regulators, including U.S. and non-U.S. government agencies and self-regulatory
organizations, as well as state securities commissions in the U.S., are empowered to bring enforcement actions and to conduct
administrative proceedings and examinations, inspections, and investigations, which may result in costs, penalties, fines,
enhanced oversight, increased financial and capital requirements, restrictions or limitations, and censure, suspension or
expulsion. Self-regulatory organizations, such as FINRA and the NFA, along with statutory bodies such as the SEC and the
CFTC, and the FCA and other international regulators, require strict compliance with their rules and regulations.
Firms in the financial services industry, including us, have experienced increased scrutiny in recent years, and
penalties, fines and other sanctions sought by regulatory authorities, including the SEC, the CFTC, FINRA, the NFA, state
securities commissions and state attorneys general in the U.S., and the FCA in the U.K. and other international regulators have
increased accordingly. This trend toward a heightened regulatory and enforcement environment can be expected to continue for
the foreseeable future, and this environment may create uncertainty. From time-to-time, we have been and are subject to
periodic examinations, inspections and investigations, including periodic risk assessment and related reviews of our U.K. group.
As a result of such reviews, we have been and may in the future be subject to increased monitoring (including in relation to
matters unrelated to our activities in the financial services industry) and be required to include or enhance certain regulatory
structures and frameworks in our operating procedures, systems, and controls.
Increasingly, the FCA has developed a practice of requiring senior officers of regulated firms to provide individual
attestations or undertakings as to the status of the firm’s control environment, compliance with specific rules and regulations or
the completion of required tasks. Officers of BGC Brokers L.P. and GFI Brokers Limited have given such attestations or
undertakings in the past and may do so again in the future. Similarly, the FCA can seek a voluntary requirement notice, which
is a voluntary undertaking on behalf of a firm that is made publicly available on the FCA’s website. The SMCR came into
effect in the U.K. on December 9, 2019. Accountability requirements now fall on senior managers, and a wider population of
U.K. staff are subject to certification requirements. SMCR has increased the cost of compliance and will potentially increase
financial penalties for non-compliance. Disciplinary actions by the SEC, the CFTC, the FCA, self-regulatory organizations and
state securities administrators have impacted, and may impact in the future, our acquisitions of regulated businesses or entry
into new business lines, and have resulted, and may result in the future, in significant costs and remediation expenses.
Risks Related to Competition
Because competition for the services of brokers, salespeople, managers, technology professionals and other
front-office personnel in the financial services industry is intense, it could affect our ability to attract and retain a
sufficient number of highly skilled brokers or other professional services personnel, in turn adversely impacting our
revenues, resulting in a material adverse effect on our business, financial condition, results of operations and prospects.
Our ability to provide high-quality brokerage and other professional services and maintain long-term relationships with
our customers depends, in large part, upon our brokers, salespeople, managers, technology professionals and other front-office
personnel. As a result, we must attract and retain highly qualified personnel.
Competition for talent is intense, especially for brokers with experience in the specialized businesses in which we
participate or may seek to enter. If we are unable to hire or retain highly qualified professionals, including retaining those
employed by businesses we acquire in the future, we may not be able to enter new brokerage markets or develop new products
or services or adequately service our existing clients and product sets. If we lose key brokers in a particular market in which we
participate, our revenues may decrease, and we may lose market share.
In addition, recruitment and retention of qualified professionals could result in substantial additional costs, including
costs and management time associated with litigation, arbitration or other claims related to employee hires and/or departures.
If we fail to attract new personnel, or fail to retain and motivate our current personnel, or if we incur increased costs or
restrictions associated with attracting and retaining personnel (such as lawsuits, arbitrations, sign-on or guaranteed bonuses or
forgivable loans), our business, financial condition, results of operations and prospects could be materially and adversely
affected.
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We face strong competition from brokerages, trading platforms, exchanges, and other financial services firms,
many of which have greater market presence, marketing capabilities and financial, technological and personnel
resources than we have, which could lead to pricing pressures that could adversely impact our revenues and as a result
could materially adversely affect our business, financial condition, results of operations and prospects.
The financial services industry is intensely competitive and is expected to remain so. We primarily compete with two
major, diversified inter-dealer brokers and financial intermediaries: TP ICAP and Tradition. TP ICAP and Tradition are
currently publicly traded companies. Other inter-dealer broker and financial intermediary competitors include a number of
smaller, privately held firms that tend to specialize in specific products and services or geographic areas.
We also compete with companies that provide alternative products and services, such as contracts traded on futures
exchanges, and trading processes, such as the direct dealer-to-dealer market for government securities and exchange markets for
corporate equities, debt and other securities. We increasingly compete, directly or indirectly, with exchanges for the execution
of trades in certain products, mainly in fixed income products and derivatives, such as futures, swaps, options, and options on
futures, such as the platforms operated by the CME Group. We also directly compete with the CME Group through our FMX
Futures Exchange. Certain exchanges have made and will likely continue to make attempts to move certain OTC-traded
products to exchange-based execution, or to create listed derivatives products that mimic the qualities of similar OTC-traded
products. We also compete with consortia, which are created or funded from time to time by banks, broker-dealers and other
companies involved in financial services to compete in various markets with exchanges and inter-dealer brokers. We may
compete in OTC-traded products with platforms, such as those owned by MarketAxess Holdings Inc. and Tradeweb Markets, in
fixed income products or various OTC FX platforms owned by exchanges such as CME, CBOE and Deutsche Börse. In
addition, financial data and information firms such as LSEG Data & Analytics and Bloomberg L.P. operate trading platforms
for both OTC and listed products and may attempt to compete with us for trade execution in the future. We also increasingly
compete with a number of ECS brokerage firms, such as Marex Group PLC, as we continue to invest in the growth of this asset
class.
Some of our competitors have greater market presence, marketing capabilities and financial, technological and
personnel resources than we have and, as a result, our competitors may be able to:
•
develop and expand their network infrastructures and product and service offerings more efficiently or more
quickly than we can;
•
adapt more swiftly to new or emerging technologies and changes in customer requirements;
•
identify and consummate acquisitions and other opportunities more effectively than we can;
•
hire our brokers, salespeople, managers, technology professionals and other front-office personnel;
•
devote greater resources to the marketing and sale of their products and services;
•
more effectively leverage existing relationships with customers and strategic partners or exploit more
recognized brand names to market and sell their products and services;
•
provide a lower cost structure and lower commissions and fees;
•
provide access to trading in products or a range of products that at any particular time we do not offer; and
•
develop services that are preferred by our customers.
In addition, new competitors may emerge, and our product and service lines may be threatened by new technologies or
market trends that reduce the value of our existing product and service lines or we may enter new businesses, including crypto-
currency and similar opportunities, for which there are high barriers to entry or for which we may be regulated. If we are not
able to compete successfully in the future, our revenues could be adversely impacted, and as a result our business, financial
condition, results of operations and prospects could be materially adversely affected.
Competition for financial brokerage transactions also has resulted in substantial commission discounting by brokers
that compete with us for business. Further discounting could adversely impact our revenues and margins and, as a result, could
materially adversely affect our business, financial condition, results of operations and prospects.
Our operations also include the sale of pricing and transactional data and information produced by our brokerage
operations to securities information processors and/or vendors. There is a high degree of competition in pricing and transaction
reporting products and services, and such businesses may become more competitive in the future. Competitors and customers of
our financial brokerage business have together and individually offered market data and information products and services in
competition with those offered and expected to be offered by us.
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Consolidation and concentration of market share in the banking, brokerage, exchange and financial services
industries could materially adversely affect our business, financial condition, results of operations and prospects because
we may not be able to compete successfully.
Over time, there has been substantial consolidation and concentration of market share among companies in the
banking, brokerage, exchange, and financial services industries, resulting in increasingly large existing and potential
competitors, and increased concentration in markets dominated by some of our largest customers. In addition, some of our large
broker-dealer customers have reduced their sales and trading business in fixed income, currency, and commodities.
The combination of this consolidation and concentration of market share and the reduction by large customers of
certain businesses may lead to increased concentration among our brokerage customers, which may reduce our ability to
negotiate pricing and other matters with our customers and lower volumes. Additionally, the sales and trading global revenue
market share has generally become more concentrated over the past several years among the top investment banks across
equities, fixed income, currencies, and commodities.
We also face existing and potential competition from large exchanges, which seek or may seek to migrate trading from
the inter-dealer market to their own platform. Consolidation and concentration of market share are occurring in this area as well.
Consolidation among exchanges may increase their financial resources and ability to compete with us.
Continued consolidation and concentration of market share in the financial services industry and especially among our
customers could lead to the exertion of additional pricing pressure by our customers, impacting the commissions and spreads
we generate from our brokerage services. Further, the consolidation and concentration among exchanges, and expansion by
these exchanges into derivative and other non-equity trading markets, will increase competition for customer trades and place
additional pricing pressure on commissions and spreads. These developments have increased competition from firms with
potentially greater access to capital resources than we have. Finally, consolidation among our competitors, other than
exchanges, could result in increased resources and product or service offerings for our competitors. If we are not able to
compete successfully in the future, our business, financial condition, results of operations and prospects could be materially
adversely affected.
Risks Related to Our International Operations
We are subject to various risks inherent in doing business in the international financial markets, in addition to
those unique to the regulated brokerage industry.
We currently provide products and services to customers in many foreign countries, and may seek to expand our
operations into additional jurisdictions. On a consolidated basis, revenues from foreign countries were approximately
$1.5 billion, or approximately 67% of total revenues, for the year ended December 31, 2024. In many countries, the laws, rules
and regulations applicable to the financial services industry are uncertain and evolving, and it may be difficult for us to
determine the exact requirements of local regulations in every jurisdiction. Our inability to remain in compliance with local
laws, rules and regulations in a particular foreign jurisdiction could have a significant and negative effect not only on our
business in that market, but on our reputation generally. If we are unable to manage any of these risks effectively, our business,
financial condition, results of operations and prospects could be adversely affected.
Our international activities are subject to a number of laws generally, including laws that prohibit corruption, anti-
bribery laws, import and export control law, and economic and trade sanctions programs. We may not be successful in
complying with these laws in all situations and violations may result in material monetary fines, penalties, and other costs or
sanctions against us.
There are also certain additional political, economic, legal, operational, and other risks inherent in doing business in
international financial markets, particularly in the regulated financial services industry. These risks include:
•
less developed automation in exchanges, depositories and national clearing systems;
•
additional or unexpected changes in regulatory requirements, capital requirements, tariffs and other trade
barriers;
•
the impact of the laws, rules and regulations of foreign governmental and regulatory authorities of each
country in which we conduct business;
•
possible nationalization, expropriation and regulatory, political and price controls;
•
difficulties in staffing and managing international operations;
•
capital controls, exchange controls and other restrictive governmental actions;
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•
failure to develop effective compliance and reporting systems, which could result in regulatory penalties in
the applicable jurisdiction;
•
fluctuations in currency exchange rates;
•
reduced protections for intellectual property rights;
•
adverse labor and employment laws, including those related to compensation, tax, health insurance and
benefits, and social security;
•
the outbreak of hostilities, mass demonstrations, pandemics, or other global events; and
•
potentially adverse tax consequences arising from compliance with foreign laws, rules, and regulations to
which our international businesses are subject and the repatriation of overseas earnings.
Credit Risk
Credit ratings downgrades or defaults by us, Cantor or another large financial institution could adversely affect
us or financial markets generally.
The commercial soundness of many financial institutions may be closely interrelated as a result of interconnectedness
arising from credit, trading, clearing or other relationships between the institutions. A default by one of our customers could
lead to liquidity concerns in our business and, to the extent that Cantor or another entity that clears for us has difficulty meeting
capital requirements or otherwise meeting its obligations, we may need to provide our own liquidity.
As a result, concerns about, or a default or threatened default by, one institution could lead to significant market-wide
liquidity problems, losses, or defaults by other institutions. This is sometimes referred to as “systemic risk” and may adversely
affect financial intermediaries, such as clearing agencies, clearing houses, banks, securities firms and exchanges, with which we
transact on a regular basis, and therefore could adversely affect us. Similarly, our vendors, including insurance companies and
other providers, are subject to normal business risks as well as risks related to changes in U.S. and international economic and
market conditions. Failure of any of these vendor institutions could also materially adversely affect us.
Our credit ratings and associated outlooks are critical to our reputation and operational and financial success. Our
credit ratings and associated outlooks are influenced by a number of factors, including: operating environment, regulatory
environment, earnings and profitability trends the rating agencies’ view of our funding and liquidity management practices,
balance sheet size/composition and resulting leverage, cash flow coverage of interest, composition and size of the capital base,
available liquidity, outstanding borrowing levels, our competitive position in the industry, our relationships in the industry,
including with Cantor, acquisitions or dispositions of assets and other matters. Our credit ratings and/or the associated rating
outlooks can be revised upward or downward at any time by a rating agency if such rating agency decides the circumstances of
BGC or related companies warrant such a change. Any negative change or a downgrade in credit ratings and/or the associated
ratings outlooks could adversely affect the availability of debt financing on acceptable terms, as well as the cost and other terms
upon which any such financing can be obtained. See “—Risks Related to Liquidity, Funding and Indebtedness—Credit ratings
downgrades could adversely affect our cost of capital and the availability of debt financing.” In addition, credit ratings and
associated outlooks may be important to customers or counterparties in certain markets and in certain transactions. Additional
collateral may be required in the event of a negative change in credit ratings or rating outlooks.
Our activities are subject to credit and performance risks, which could result in us incurring significant losses
that could materially adversely affect us.
Our activities are subject to credit and performance risks. For example, our customers and counterparties may not
deliver securities to one of our operating subsidiaries which has sold those securities to another customer. If the securities due
to be delivered have increased in value, there is a risk that we may have to expend our own funds in connection with the
purchase of other securities to consummate the transaction. While we will take steps to ensure that our customers and
counterparties have high credit standings and that financing transactions are adequately collateralized, the large dollar amounts
that may be involved in our broker-dealer and financing transactions could subject us to significant losses if, as a result of
customer or counterparty failures to meet commitments, we were to incur significant costs in liquidating or covering our
positions in the open market.
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We have adopted policies and procedures to identify, monitor and manage credit and market risks, in both agency and
principal transactions, leveraging risk reporting and control procedures and by monitoring credit standards applicable to our
customers and counterparties. These policies and procedures, however, may not be fully effective, particularly against fraud,
unauthorized trading, and similar incidents. Some of these risk management methods depend upon the evaluation of
information regarding markets, customers, counterparties, or other matters that are publicly available or otherwise accessible by
us. That information may not, in all cases, be accurate, complete, up-to-date, or properly evaluated. If our policies and
procedures are not fully effective or we are not always successful in monitoring or evaluating the risks to which we are, or may
be, exposed, our business, financial condition, results of operations and prospects could be materially adversely affected. In
addition, our insurance policies do not provide coverage for these risks.
Transactions executed on a matched principal basis where the instrument has the same or similar characteristics to the
counterparty may expose us to correlation risk. In this case, the counterparty’s inability to meet its obligations will also result in
the value of the instrument declining. For example, if we were to enter into a transaction to sell to a customer a bond or
structured note where the issuer or credit support provider was such customer’s affiliate, the value of the instrument would
decline in value in tandem with the default. This correlation has the potential effect of magnifying the credit loss.
We are subject to financing risk because, if a transaction does not settle on a timely basis, the resulting unmatched
position may need to be financed, either directly by us or through one of the clearing organizations, at our expense. These
charges may be recoverable from the failing counterparty, but sometimes they are not. In addition, in instances where the
unmatched position or failure to deliver is prolonged or widespread due to rapid or widespread declines in liquidity for an
instrument, there may also be regulatory capital charges required to be taken by us, which, depending on their size and duration,
could limit our business flexibility or even force the curtailment of those portions of our business requiring higher levels of
capital. Credit or settlement losses of this nature could materially adversely affect our business, financial condition, results of
operations and prospects.
Disruptions in the financial markets have also led to the exposure of several cases of financial fraud. If we were to
have trading activity on an agency or principal basis with an entity engaged in defrauding investors or counterparties, we could
bear the risk that the counterparty would not have the financial resources to meet their obligations, resulting in a credit loss.
Similarly, we may engage in financial transactions with third parties that have been victims of financial fraud and, therefore,
may not have the financial resources to meet their obligations to us.
In agency transactions, we charge a commission for connecting buyers and sellers and assisting in the negotiation of
the price and other material terms of the transaction. After all material terms of a transaction are agreed upon, we identify the
buyer and seller to each other and leave them to settle the trade directly. We are exposed to credit risk for commissions, as we
bill customers for our agency brokerage services. Our customers may default on their obligations to us due to disputes,
bankruptcy, lack of liquidity, operational failure, or other reasons. Any losses arising from such defaults could materially
adversely affect our business, financial condition, results of operations and prospects.
In emerging market countries, we primarily conduct our business on an agency and matched principal basis,
where the risk of counterparty default, inconvertibility events and sovereign default is greater than in more developed
countries.
We enter transactions in cash and derivative instruments primarily on an agency and matched principal basis with
counterparties domiciled in countries in Latin America, Eastern Europe and Asia. Transactions with these counterparties are
generally in instruments or contracts of sovereign or corporate issuers located in the same country as the counterparty. This
exposes us to a higher degree of sovereign or convertibility risk than in more developed countries. In addition, these risks may
entail correlated risks. A correlated risk arises when the counterparty’s inability to meet its obligations also corresponds to a
decline in the value of the instrument traded. In the case of a sovereign convertibility event or outright default, the counterparty
to the trade may be unable to pay or transfer payment of an instrument purchased out of the country when the value of the
instrument has declined due to the default or convertibility event. The global financial crisis of recent years has heightened the
risk of sovereign or convertibility events in emerging markets similar to the events that occurred in previous financial
downturns. Our risk management function monitors the creditworthiness of emerging countries and counterparties on an
ongoing basis and, when the risk of inconvertibility or sovereign default is deemed to be too great, correlated transactions or all
transactions may be restricted or suspended. However, there can be no assurance that these procedures will be effective in
controlling these risks.
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Concentration and Market Risk
The rates business is and has historically been our largest product category, and we could be significantly
affected by any downturn in the rates product market.
We offer our brokerage services in five broad product categories: Rates, Credit, FX, Energy and Commodities, and
Equities. Our brokerage revenues are and have been historically largest in our Rates asset class, which accounted for
approximately 33.7% of our total brokerage revenues on a consolidated basis for the year ended December 31, 2024. While we
focus on expanding and have successfully diversified our product offerings, including through recent acquisitions in our
Energy, Commodities, and Shipping business, we may currently be exposed to any adverse change or condition affecting the
interest rates market. Accordingly, the concentration of our brokerage business on rates products subjects our results to a greater
market risk than if we had more diversified product offerings.
Due to our current customer concentration, a loss of one or more of our significant customers could materially
harm our business, financial condition, results of operations and prospects.
For the year ended December 31, 2024, on a consolidated basis, our top ten customers, collectively, accounted for
approximately 27.1% of our total revenues. We have limited long-term contracts with certain of these customers. If we were to
lose one or more of these significant customers for any reason, including as a result of further consolidation and concentration
in the financial services industry, and not be compensated for such loss by doing additional business with other customers or by
adding new customers, our revenues would decline significantly and our business, financial condition, results of operations and
prospects would materially suffer.
Our revenues and profitability could be reduced or otherwise materially adversely affected by pricing plans
relating to commissions and fees on our trading platform.
We negotiate from time to time with certain customers (including many of our largest customers) to enter into
customized volume discount pricing plans. While the pricing plans are designed to encourage customers to drive higher
volumes across our business and to be more active on our Fully Electronic trade execution platform, they reduce the amount of
commissions and fees payable to us by certain of our most active customers for certain products, which could reduce our
revenues and constrain our profitability. From time to time, these pricing plans come up for renewal. Failure of a number of our
larger customers to enter into renewed agreements, or agreements on terms as favorable as existing agreements, could have a
material adverse effect on volumes on our Fully Electronic trade execution platform, the commissions payable to us, our
revenues and our profitability.
Reduced spreads in pricing, levels of trading activity and trading through market makers and/or specialists
could materially adversely affect our business, financial condition, results of operations and prospects.
Computer-generated buy/sell programs and other technological advances, including AI, and regulatory changes in the
marketplace may continue to tighten securities spreads. In addition, new and enhanced alternative trading systems, such as
electronic communications networks, have emerged as alternatives for individual and institutional investors, as well as
brokerage firms. As such systems do not direct trades through market makers, their use could result in reduced revenues for us
or for our customers. In addition, reduced trading levels could lead to lower revenues which could materially adversely affect
our businesses, financial condition, results of operations and prospects.
We have market risk exposure from unmatched principal transactions entered into by some of our desks, which
could result in losses that could have a material adverse effect on our business, financial condition, results of operations,
and prospects for any particular reporting period. In addition, financial fraud or unauthorized trading activity could
also adversely impact our business, financial condition, results of operations and prospects.
On a limited basis, our desks enter into unmatched principal transactions in the ordinary course of business to facilitate
transactions, add liquidity, improve customer satisfaction, increase revenue opportunities and attract additional order flow or, in
certain instances, as the result of an error. As a result, we have market risk exposure on these unmatched principal transactions.
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Market risk refers to the risk that a change in the level of one or more market prices, rates, indices or other factors will
result in losses for a specified position. We may allow certain of our desks to enter into unmatched principal transactions in the
ordinary course of business and hold long and short inventory positions. These transactions are primarily for the purpose of
managing proprietary positions, facilitating customer execution needs, adding liquidity to a market or attracting additional order
flow. As a result, we may have market risk exposure on these transactions. Our exposure varies based on the size of the overall
position, the terms and liquidity of the instruments brokered and the amount of time the position is held before we dispose of
the position. Although we have limited ability to track our exposure to market risk and unmatched positions on an intra-day
basis, we attempt to mitigate market risk on these positions by imposing strict risk limits, extremely limited holding periods and
active risk management, including hedging our exposure. These positions are intended to be held short term, and generally to
facilitate customer transactions. However, due to a number of factors, including the nature of the position and access to the
market on which it trades, we may not be able to unwind the position and we may be forced to hold the position for a longer
period than anticipated. All positions held longer than intra-day are marked to market.
Certain categories of trades settle for clearing purposes with CF&Co, one of our affiliates. CF&Co is a member of
FINRA and the FICC, a subsidiary of the Depository Trust & Clearing Corporation. In addition, certain affiliated entities are
subject to regulation by the CFTC, including CF&Co and BGC Financial. In certain products, we, BGC Financial and other
affiliates act in a matched principal or principal capacity in markets by posting and/or acting upon quotes for our account. Such
activity is intended, among other things, to assist us and other affiliates in managing proprietary positions (including, but not
limited to, those established as a result of combination trades and errors), facilitating transactions, framing markets, adding
liquidity, increasing commissions and attracting order flow.
From a risk management perspective, we monitor risk daily, on an end-of-day basis, and desk managers generally
monitor such exposure on a continuous basis. Any unmatched positions are intended to be disposed of in the short term.
However, due to a number of factors, including the nature of the position and access to the markets on which we trade, we may
not be able to match the position or effectively hedge its exposure and often may be forced to hold a position overnight that has
not been hedged. To the extent these unmatched positions are not disposed of intra-day, we mark these positions to market.
Adverse movements in the market values of assets or other reference benchmarks underlying these positions or a downturn or
disruption in the markets for these positions could result in a loss. In the event of any unauthorized trading activity or financial
fraud that is not detected by management, it is possible that these unmatched positions could be outstanding for a long period.
At the time of any sales and settlements of these positions, the price we ultimately realize will depend on the demand and
liquidity in the market at that time and may be materially lower than their current fair values. In addition, our estimates or
determinations of the values of our various positions, assets or business are subject to the accuracy of our assumptions and the
valuation models or multiples used. Any principal losses and gains resulting from these positions could on occasion have
disproportionate effects, negative or positive, on our business, financial condition, results of operations and prospects for any
particular reporting period.
In addition, in recent years we have had and may again have considerable holdings of marketable securities received
by us as consideration for the sale of certain businesses. We may seek to manage the market risk exposure inherent in such
holdings by minimizing the effect of price changes on a portion of such holdings, including through the use of derivative
contracts. There can, however, be no assurance that our hedging activities will be adequate to protect us against price risks
associated with these holdings, or that the costs of such hedging activities will not be significant. Further, any such hedging
activities and other risk management techniques may not be fully effective in mitigating our risk exposure in all market
environments or against all types of risk, including unpredicted price movements, counterparty defaults or other risks that are
unidentified or unanticipated. Any such events could have a material adverse effect on our business, financial condition, results
of operations and prospects.
We may have equity investments or profit sharing interests in entities whose primary business is proprietary
trading. These investments could expose us to losses that could adversely affect our net income and the value of our
assets.
We may have equity investments or profit sharing interests in entities whose primary business is proprietary trading.
The accounting treatment applied for these investments varies depending on a number of factors, including, but not limited to,
our percentage ownership or profit share and whether we have any influence or control over the relevant entity. Under certain
accounting standards, any losses experienced by these entities on their investment activities could adversely impact our net
income and the value of our assets. In addition, if these entities were to fail and cease operations, we could lose the entire value
of our investment and the stream of any shared profits from trading.
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RISKS RELATED TO OUR CORPORATE STRUCTURE
Because our voting control is concentrated among the holders of our Class B common stock, the market price of
our Class A common stock may be materially adversely affected by its disparate voting rights.
The holders of our Class A common stock and Class B common stock have substantially identical rights, except that
holders of Class A common stock are entitled to one vote per share, while holders of Class B common stock are entitled to 10
votes per share on all matters to be voted on by stockholders in general.
As long as Cantor beneficially owns a majority of our total voting power, it will have the ability, without the consent
of the other holders of our Class A common stock, to elect all of the members of our Board and to control our management and
affairs. In addition, it will be able to determine the outcome of matters submitted to a vote of our stockholders for approval and
will be able to cause or prevent a change of control of us. In certain circumstances, such as when transferred to an entity
controlled by Cantor and/or the Lutnick Family, the shares of our Class B common stock issued to Cantor may be transferred
without conversion to our Class A common stock.
BGC Class B common stock is controlled by Cantor and is not subject to conversion or termination by our Board or
any committee thereof, or any other stockholder or third party. This differential in the voting rights of our Class B common
stock could adversely affect the market price of our Class A common stock.
Delaware law may protect decisions of our Board that have a different effect on holders of our Class A common
stock and Class B common stock.
Stockholders may not be able to challenge decisions that have an adverse effect upon holders of our Class A common
stock compared to holders of our Class B common stock if our Board acts in a disinterested, informed manner with respect to
these decisions, in good faith and in the belief that it is acting in the best interests of our stockholders. Delaware law generally
provides that a Board owes an equal duty to all stockholders, regardless of class or series, and does not have separate or
additional duties to different groups of stockholders, subject to applicable provisions set forth in a corporation’s certificate of
incorporation and general principles of corporate law and fiduciary duties.
Delaware law, our corporate organizational documents and other requirements may impose various
impediments to the ability of a third party to acquire control of us, which could deprive investors in our Class A
common stock of the opportunity to receive a premium for their shares.
We are a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the
ability of a third party to acquire control of us, even if a change of control would be beneficial to our Class A stockholders.
Some provisions of the DGCL, our amended and restated certificate of incorporation, and our amended and restated bylaws
could make the following more difficult:
•
acquisition of us by means of a tender offer;
•
acquiring control of our Board by means of a proxy contest or otherwise; or
•
removal of our incumbent officers and directors.
These provisions, summarized below, may discourage coercive takeover practices and inadequate takeover bids. These
provisions may also encourage persons seeking to acquire control of us to first negotiate with our Board. We believe that the
benefits of increased protection give us the potential ability to negotiate with the initiator of an unfriendly or unsolicited
proposal to acquire or restructure us and outweigh the disadvantages of discouraging those proposals because negotiation of
them could result in an improvement of their terms.
Our bylaws provide that special meetings of stockholders may be called only by the Chairman of our Board, or in the
event the Chairman of our Board is unavailable, by any Chief Executive Officer or by the holders of a majority of the voting
power of our Class B common stock, which is held by Cantor. In addition, our restated certificate of incorporation permits us to
issue “blank check” preferred stock.
Our bylaws require advance written notice prior to a meeting of our stockholders of a proposal or director nomination
which a stockholder desires to present at such a meeting, which generally must be received by our Secretary not later than 120
days prior to the first anniversary of the date of our proxy statement for the preceding year’s annual meeting. In the event that
the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the
stockholder to be timely must be so delivered not later than the close of business on the later of the 120th day prior to the date
of such proxy statement or the tenth day following the day on which public announcement of the date of such meeting is first
made by us. Our bylaws provide that all amendments to our bylaws must be approved by either the holders of a majority of the
voting power of all of our outstanding capital stock entitled to vote or by a majority of our Board.
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We are subject to Section 203 of the DGCL. In general, Section 203 of the DGCL prohibits a publicly held Delaware
corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years following
the date the person became an interested stockholder, unless the “business combination” or the transaction in which the person
became an “interested stockholder” is approved in a prescribed manner. Generally, a “business combination” includes a merger,
asset or stock sale or other transaction resulting in a financial benefit to the “interested stockholder.” An “interested
stockholder” is a person who, together with affiliates and associates, owns 15% or more of a corporation’s outstanding voting
stock, or was the owner of 15% or more of a corporation’s outstanding voting stock at any time within the prior three years,
other than “interested stockholders” prior to the time our Class A common stock was traded on Nasdaq. The existence of this
provision would be expected to have an anti-takeover effect with respect to transactions not approved in advance by our Board,
including discouraging takeover attempts that might result in a premium over the market price for shares of our Class A
common stock.
In addition, our brokerage business is heavily regulated and some of our regulators require that they approve
transactions which could result in a change of control, as defined by the then-applicable rules of our regulators. The
requirement that this approval be obtained may prevent or delay transactions that would result in a change of control.
Further, certain of the awards under the BGC Group Equity Plan contain provisions pursuant to which grants that are
unexercisable or unvested may automatically become exercisable or vested as of the date immediately prior to certain change of
control events. Additionally, change in control and employment agreements between us and our named executive officers also
provide for certain grants, payments, and grants of exchangeability, and exercisability in the event of certain change of control
events.
The foregoing factors, as well as the significant common stock ownership by Cantor, including shares of our Class B
common stock, and the provisions of any debt agreements, could impede a merger, takeover or other business combination or
discourage a potential investor from making a tender offer for our Class A common stock that could result in a premium over
the market price for shares of Class A common stock.
The dual class structure of our common stock may adversely affect the trading market for our Class A common
stock.
S&P Dow Jones Indices and FTSE Russell have previously excluded companies with multiple classes of shares of
common stock from being added to their indices or limited their inclusion in them. In addition, several shareholder advisory
firms have announced their opposition to the use of multiple class structures. It is possible that the dual class structure of our
common stock may prevent the inclusion of our Class A common stock in such indices and may cause shareholder advisory
firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our
capital structure. Any such exclusion from indices could result in a less active trading market for our Class A common stock.
Any actions or publications by shareholder advisory firms critical of our corporate governance practices or capital structure
could also adversely affect the value of our Class A common stock.
We are a holding company and, accordingly are dependent upon distributions from BGC U.S. OpCo and BGC
Global OpCo to pay dividends, taxes and indebtedness and other expenses and to make repurchases of our Class A
common stock. There can be no assurance that future dividends will be paid, that dividend amounts will be maintained
or that repurchases will be made at current or future levels.
We are a holding company with no direct operations and will be able to pay dividends, taxes and other expenses, and
to make repurchases of shares our Class A common stock or other equity interests in us or in our subsidiaries, only from our
available cash on hand and funds received from distributions, loans or other payments, from our operating subsidiaries. As
discussed above, regulatory, tax restrictions or elections, and other legal or contractual restrictions may limit our ability to
transfer funds freely from our subsidiaries. In addition, any unanticipated accounting, tax or other charges against net income
could adversely affect our ability to pay dividends and to make repurchases of our Class A common stock.
While our quarterly dividends paid per share increased by $0.01 per share in 2024, we plan to continue to prioritize
share repurchases over dividends and distributions. The Inflation Reduction Act of 2022 provides for a new U.S. federal 1%
excise tax on stock repurchases, which has been in effect since January 1, 2023. We continue to analyze the impacts of the IR
Act and related regulatory developments.
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Any dividends, if and when declared by our Board, will be paid on a quarterly basis. No assurance can be made,
however, that a dividend will be paid each quarter. The declaration, payment, timing, and amount of any future dividends
payable by us will be at the sole discretion of our Board. Our ability to pay dividends may also be limited by regulatory
considerations as well as by covenants contained in financing or other agreements. In addition, under Delaware law, dividends
may be payable only out of surplus, which is our net assets minus our capital (as defined under Delaware law), or, if we have no
surplus, out of our net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. Accordingly,
any unanticipated accounting, tax, regulatory or other charges against net income may adversely affect our ability to declare and
pay dividends. While we intend to declare and pay dividends quarterly, there can be no assurance that our Board will declare
dividends at all or on a regular basis or that the amount of our dividends will not change.
Our Board and our Audit Committee have authorized repurchases of shares of BGC Class A common stock or other
equity interests in us or in subsidiaries, from Cantor, our executive officers, other employees, and others. On October 30, 2024,
the BGC Group Board and Audit Committee re-authorized our share repurchase authorization in an amount up to
$400.0 million, which may include purchases from Cantor, its partners or employees or other affiliated persons or entities. As
of December 31, 2024, we had approximately $350.0 million remaining under this authorization and may continue to actively
make repurchases or purchases, or cease to make such repurchases or purchases, from time to time. In addition, from time to
time, we may reinvest all or a portion of the distributions we receive from our operating subsidiaries in our business.
Accordingly, there can be no assurance that future dividends will be paid or that dividend amounts will be maintained or that
repurchases and purchases will be made at current or future levels.
If we were deemed an “investment company” under the Investment Company Act, the Investment Company
Act’s restrictions could make it impractical for us to continue our business.
Generally, an entity is deemed an “investment company” under Section 3(a)(1)(A) of the Investment Company Act if
it is primarily engaged in the business of investing, reinvesting, or trading in securities, and is deemed an “investment
company” under Section 3(a)(1)(C) of the Investment Company Act if it owns “investment securities” having a value exceeding
40% of the value of its total assets (exclusive of U.S. Government Securities and cash items) on an unconsolidated basis. We
believe that we should not be deemed an “investment company” as defined under Section 3(a)(1)(A) because we are not
primarily engaged in the business of investing, reinvesting, or trading in securities. Rather, through our operating subsidiaries,
we are primarily engaged in the operation of various types of brokerage businesses as described in this Annual Report on Form
10-K. We are not an “investment company” under Section 3(a)(1)(C) because more than 60% of the value of our total assets on
an unconsolidated basis are interests in majority-owned subsidiaries that are not themselves “investment companies.” In
particular, our brokerage subsidiaries are entitled to rely on, among other things, the broker-dealer/market intermediary
exemption in Section 3(c)(2) of the Investment Company Act.
To ensure that we are not deemed an “investment company” under the Investment Company Act, we need to be
primarily engaged, directly or indirectly, in the non-investment company businesses of our operating subsidiaries. If we were to
cease participation in the management of our operating subsidiaries, that would increase the possibility that we could be deemed
an “investment company.” Further, if we were deemed not to have a majority of the voting power of our operating subsidiaries,
that would increase the possibility that we could be deemed an “investment company,” our interests in our operating
subsidiaries could be deemed “investment securities,” and we could be deemed an “investment company.”
We expect to take all legally permissible action to ensure that we are not deemed an investment company under the
Investment Company Act, but no assurance can be given that this will not occur.
The Investment Company Act and the rules thereunder contain detailed prescriptions for the organization and
operations of investment companies. Among other things, the Investment Company Act and the rules thereunder limit or
prohibit transactions with affiliates, limit the issuance of debt and equity securities, prohibit the issuance of stock options, and
impose certain governance requirements. If anything were to happen that would cause us to be deemed to be an “investment
company” under the Investment Company Act, the Investment Company Act would limit our or its capital structure, ability to
transact business with affiliates, and ability to compensate key employees. Therefore, if we became subject to the Investment
Company Act, it could make it impractical to continue our business in this structure, impair agreements and arrangements, and
impair the transactions contemplated by those agreements and arrangements, between and among us and our operating
subsidiaries, or any combination thereof, and materially adversely affect our business, financial condition, results of operations,
and prospects.
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Risks Related to Our Relationship with Cantor and its Affiliates
In connection with his confirmation as the 41st Secretary of Commerce, Howard Lutnick has stated his
intention to divest his interests in our company to comply with U.S. government ethics rules. We cannot predict the
consequences of this divestiture.
In addition to the risks described under “—Risks Relating to Our Key Personnel and Employee Turnover,” there are
various risks associated with Howard Lutnick’s intended upcoming divestment of his interests in our company, Cantor and
CFGM. The consequences of these divestments will depend upon the manner in which they are accomplished, and we do not
currently expect such divestments to trigger “change of control” provisions under any material agreements. That expectation
may change and it may be difficult to predict the full consequences of such divestments, and there can be no assurance that
these divestments will not trigger such “change of control” provisions.
Our Class B common stock is held by Cantor and CFGM, whose interests may conflict with ours and may
exercise their control in a way that favors their interests to our detriment.
Since our inception, we have been controlled directly by Cantor, and indirectly by Howard Lutnick through his control
of Cantor. Cantor exercises control over our management and affairs and all matters requiring stockholder approval, including
the election of our directors and determinations with respect to acquisitions and dispositions, as well as material expansions or
contractions of our business, entry into new lines of business and borrowings and issuances of our Class A common stock and
Class B common stock or other securities. This control is subject to the approval of our Audit Committee on those matters
requiring such approval. Cantor’s voting power may also have the effect of delaying or preventing a change of control of us.
Further changes in Cantor’s management may occur pursuant to Howard Lutnick’s divestiture of his interests, which
may impact Cantor’s control over and relationship with us in ways that we cannot currently predict.
As of December 31, 2024, Cantor (including CFGM) beneficially owned 96.3 million shares of our Class B common
stock, representing 88% of our outstanding Class B common stock and approximately 65.6% of our total voting power. As of
December 31, 2024, Howard Lutnick and individuals related to him (the “Lutnick Family”) owned 13.1 million shares of our
outstanding Class B common stock, representing 12% of the outstanding shares of BGC Class B common stock and
approximately 8.9% of our total voting power. Together, as of December 31, 2024, Cantor, CFGM, Howard Lutnick and
individuals related to him owned 100.0% of the outstanding shares of BGC Class B common stock and approximately 75.8% of
our total voting power. Additionally, on February 18, 2025, Brandon Lutnick was appointed as Chief Executive Officer and
Chairman of Cantor, as Chief Executive Officer of CFGM, and as a member of our Board of Directors, and Kyle Lutnick was
appointed as Executive Vice Chairman of Cantor and President of CFGM.
Cantor’s and/or members of the Lutnick Family’s ability to exercise control over us could create or appear to create
potential conflicts of interest. Conflicts of interest may arise between us and Cantor in a number of areas relating to our past and
ongoing relationships, including:
•
potential acquisitions and dispositions of businesses, mergers, joint ventures, investments or similar
transactions;
•
the issuance, acquisition or disposition of securities by us;
•
the election of new or additional directors to our Board;
•
the payment of dividends by us (if any), and repurchases of shares of our Class A common stock or other
equity interests in our subsidiaries, including from Cantor, our executive officers, other employees, and
others;
•
any loans to or from us or Cantor, or any financings or credit arrangements that relate to or depend on our
relationship with Cantor or its relationship with us;
•
business operations or business opportunities of ours and Cantor’s that would compete with the other party’s
business opportunities, including Cantor’s and our brokerage and financial services;
•
intellectual property matters;
•
business combinations involving us;
•
conflicts between our agency trading for primary and secondary bond sales and Cantor’s investment banking
bond origination business;
•
competition between our and Cantor’s other equity derivatives and cash equity inter-dealer brokerage
businesses;
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•
the nature, quality and pricing of administrative services to be provided to or by Cantor and/or Tower Bridge;
•
provision of clearing capital pursuant to the Clearing Agreement and potential and existing loan
arrangements; and
•
any positions by members of the Lutnick Family’s with us and our affiliates, Newmark Group and/or Cantor
and their ownership of any such equity or the equity of any of Cantor’s other affiliates.
Potential conflicts of interest could also arise if we decide to enter into any new commercial arrangements with Cantor
in the future or in connection with Cantor’s desire to enter into new commercial arrangements with third parties. Further,
potential allegations of conflicts or reputational impacts could occur, which may have an adverse effect on our business.
Members of the Lutnick family have been, and may be, periodically employed by and/or involved in the management of our
and our affiliate’s businesses.
We expect Cantor to manage its continued ownership of us so that it will not be deemed to be an investment company
under the Investment Company Act, including by maintaining its voting power in us above a majority absent an applicable
exemption from the Investment Company Act. This may result in conflicts with us, including those relating to acquisitions or
offerings by us involving issuances of shares of our Class A common stock, or securities convertible or exchangeable into
shares of our Class A common stock, which would dilute Cantor’s voting power in us. See “–General Risks—If we were
deemed an “investment company” under the Investment Company Act, the Investment Company Act’s restrictions could make
it impractical for us to continue our business.”
In addition, Cantor has from time to time in the past and may in the future consider possible strategic realignments of
its own business and/or of the relationships that exist between and among Cantor and its other affiliates and us. Any related-
party transaction or arrangement between Cantor and its other affiliates and us is subject to the prior approval by our Audit
Committee, but generally does not require the separate approval of our stockholders, and if such stockholder approval is
required, Cantor may retain sufficient voting power to provide any such requisite approval without the affirmative consent of
our other stockholders. There is no assurance that such restructuring would not result in a material expense or disruption to our
business.
Our agreements and other arrangements with Newmark and Cantor may be amended upon agreement of the parties to
those agreements and approval of our Audit Committee. We may not be able to resolve potential conflicts, and, even if we do,
the resolution may be less favorable to us than if we were dealing with an unaffiliated party.
To address potential conflicts of interest between Cantor and its representatives and us, our restated certificate of
incorporation contains provisions regulating and defining the conduct of our affairs as they may involve Cantor and its
representatives, and our powers, rights, duties and liabilities and those of our representatives in connection with our relationship
with Cantor and its affiliates, officers, directors, general partners or employees. Our restated certificate of incorporation
provides that no Cantor Company, as defined in our restated certificate of incorporation, or any of the representatives, as
defined in our restated certificate of incorporation, of a Cantor Company will owe any fiduciary duty to, nor will any Cantor
Company or any of their respective representatives be liable for breach of fiduciary duty to, us or any of our stockholders,
including with respect to corporate opportunities. In addition, Cantor and its respective representatives have no duty to refrain
from engaging in the same or similar activities or lines of business as us or doing business with any of our customers. The
corporate opportunity policy that is included in our restated certificate of incorporation is designed to resolve potential conflicts
of interest between us and Cantor and its representatives.
If any Cantor Company or any of its representatives acquires knowledge of a potential transaction or matter that may
be a corporate opportunity (as defined in our restated certificate of incorporation) for any such person, on the one hand, and us
or any of our representatives, on the other hand, such person will have no duty to communicate or offer such corporate
opportunity to us or any of our representatives, and will not be liable to us, any of our stockholders or any of our representatives
for breach of any fiduciary duty by reason of the fact that they pursue or acquire such corporate opportunity for themselves,
direct such corporate opportunity to another person or do not present such corporate opportunity to us or any of our
representatives, subject to the requirement described in the following sentence. If a third party presents a corporate opportunity
to a person who is both our representative and a representative of a Cantor Company, expressly and solely in such person’s
capacity as our representative, and such person acts in good faith in a manner consistent with the policy that such corporate
opportunity belongs to us, then such person will be deemed to have fully satisfied and fulfilled any fiduciary duty that such
person has to us as our representative with respect to such corporate opportunity, provided that any Cantor Company or any of
its representatives may pursue such corporate opportunity if we decide not to pursue such corporate opportunity.
This policy could make it easier for Cantor to compete with us. If Cantor competes with us, it could materially harm
our business, financial condition, results of operations and prospects.
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Agreements between us and Cantor and/or its affiliates are between related parties, and the terms of these
agreements may be less favorable to us than those that we could negotiate with third parties and may subject us to
litigation.
Our relationship with Cantor and/or its affiliates may result in agreements with Cantor and/or its affiliates that are
between related parties. For example, we provide to and receive from Cantor and/or its affiliates various administrative
services, including investment banking services. As a result, the prices charged to us or by us for services provided under any
agreements with such entities may be higher or lower than prices that may be charged by third parties, and the terms of these
agreements may be less favorable to us than those that we could have negotiated with third parties. In addition, Cantor has an
unlimited right to internally use market data from us without any cost. Any related-party transactions or arrangements between
us and such parties is subject to the prior approval by our Audit Committee, but generally do not otherwise require the separate
approval of our stockholders, and if such stockholder approval were required, Cantor may retain sufficient voting power to
provide any such requisite approval without the affirmative consent of the other stockholders. These related-party relationships
may from time to time subject us to litigation. For example, on February 16, 2024, an alleged Company shareholder, Martin J.
Siegel, filed a putative class action lawsuit against Cantor Fitzgerald, LP and Howard W. Lutnick in the Delaware Court of
Chancery, asserting that the Corporate Conversion was unfair to Class A shareholders of BGC Partners, Inc. because it
increased Cantor’s percentage voting control over the Company. The suit is captioned Martin J. Siegel v. Cantor Fitzgerald, LP,
C.A. 2024-0146-LWW. Defendants moved to dismiss the case and argument on that motion was heard on January 9, 2025, with
a decision from the court expected in the coming months. While the lawsuit is in its early stages and does not name the
Company as a party, the Company believes the action lacks merit.
RISKS RELATED TO OUR CLASS A COMMON STOCK
Purchasers of our Class A common stock, as well as existing stockholders, may experience significant dilution as
a result of offerings of shares of our Class A common stock by us, and the perception that such sales could occur may
adversely affect prevailing market prices for our stock.
We may sell shares of our Class A common stock from time to time. As a well-known seasoned issuer, we may file an
automatic shelf registration statement and commence a registered offering, including of our Class A common stock,
immediately thereafter.
We have an effective registration statement on Form S-3 filed and a Controlled Equity OfferingSM sales agreement
with CF&Co with respect to the offer and sale of up to 300.0 million shares of BGC Class A common stock from time to time
on a delayed or continuous basis pursuant to a CEO program. As of December 31, 2024, we have not issued any shares of BGC
Class A common stock under the current CEO Program.
We also have an effective registration statement on Form S-4 with respect to the offer and sale of up to 20 million
shares of BGC Class A common stock from time to time in connection with business combination transactions, including
acquisitions of other businesses, assets, properties or securities. As of December 31, 2024, we have issued an aggregate of
3.4 million shares of BGC Class A common stock under the 2019 Form S-4 Registration Statement. We also have an effective
shelf Registration Statement on Form S-3 pursuant to which we can offer and sell up to 10 million shares of BGC Class A
common stock under the BGC Group, Inc. DRIP. As of December 31, 2024, we have issued 0.8 million shares of BGC Class A
common stock under the DRIP. We have filed a number of registration statements on Form S-8 pursuant to which we have
registered the shares underlying the BGC Group Equity Plan. As of December 31, 2024, there were 440.8 million shares
remaining for sale under such registration statements.
Our management will have broad discretion as to the timing and amount of sales of our Class A common stock in any
offering by us, as well as the application of the net proceeds of any such sales. Accordingly, purchasers in any such offering
will be relying on the judgment of our management with regard to the use of such net proceeds, and purchasers will not have
the opportunity, as part of their investment decision, to assess whether the proceeds are being used appropriately. It is possible
that the proceeds will be invested in a way that does not yield a favorable, or any, return for us and cause the price of our
Class A common stock to decline.
We cannot predict the effect, if any, of future sales of our Class A common stock, or the availability of shares for
future sales, on the market price of our Class A common stock. Sales of substantial amounts of our Class A common stock, or
the perception that such sales could occur, could dilute existing holders of our Class A common stock and may adversely affect
prevailing market prices for our Class A common stock.
69
Because future sales of our Class A common stock may be made in the markets at prevailing market prices or at prices
related to such prevailing market prices, the prices at which these shares have been sold and may be sold in the future will vary,
and these variations may be significant. Purchasers of these shares may suffer significant dilution if the price they pay is higher
than the price paid by other purchasers of shares of our Class A common stock in any future offerings of shares of our Class A
common stock. In addition, the sale by us of any shares of our Class A common stock may decrease our existing Class A
common stockholders’ proportionate ownership interest in us, reduce the amount of cash available per share for dividends
payable on shares of our Class A common stock and diminish the relative voting strength of each previously outstanding share
of our Class A common stock.
We may use the net proceeds from future offerings of our Class A common stock to repurchase shares from
Cantor, our executive officers, other employees and others, which may render the proceeds unavailable for other
purposes.
Because we may use the net proceeds from future offerings of our Class A common stock, including pursuant to our
CEO program for general corporate purposes, which, among other things, may include repurchases of shares of our Class A
common stock or other equity interests in us or in our subsidiaries from Cantor, our executive officers, other employees, and
others, and/or to replace cash used to effect such repurchases and purchases, investors should be aware that such net proceeds
may not be available for other corporate purposes. Depending upon the timing and prices of such repurchases of shares and of
the sales of our shares in future offerings and the liquidity and depth of our market, we may sell a greater aggregate number of
shares, at a lower average price per share in future offerings than the number of shares repurchased or purchased, thereby
increasing the aggregate number of shares outstanding and potentially decreasing our EPS.
From January 1, 2024 to December 31, 2024, we repurchased an aggregate of 31.6 million shares of our Class A
common stock at an aggregate purchase price of approximately $261.9 million, with a weighted-average repurchase price of
$8.30 per share. In the future, we may continue to repurchase shares of our Class A common stock from Cantor, our executive
officers, other employees, and others, and these repurchases may be significant.
While we believe that we can successfully manage our issuance and repurchase strategy, and that our share price may
in fact increase as we increase the amount of cash available for dividends and share repurchases by paying an increasing portion
of the compensation of our employees in the form of restricted stock, gradually lowering our compensation expenses for
purposes of Adjusted Earnings, and lowering our long-term effective tax rate for Adjusted Earnings, there can be no assurance
that our strategy will be successful or that we can achieve any or all of such objectives.
General Risks
Our operations are global and exchange rate fluctuations and international market events could materially and
adversely impact our business, financial condition, results of operations and prospects.
Because our operations are global, we are exposed to risks associated with changes in FX rates. Changes in foreign
currency rates create volatility in the U.S. dollar equivalent of revenues and expenses which may result in higher or lower
values than in an otherwise constant currency exchange rate environment, in particular with regard to British Pounds and Euros.
In addition, changes in the remeasurement of our foreign currency denominated net assets are recorded as part of our results of
operations and fluctuate with changes in foreign currency rates. We monitor our net exposure to foreign currencies on a daily
basis and we may hedge our exposure as deemed appropriate with major financial institutions. However, potential movements
in the U.S. dollar against other currencies in which we earn revenues have in the past and may in the future materially and
adversely affect our financial results.
Furthermore, our revenues derived from non-U.S. operations are subject to risk of loss from social or political
instability, changes in government policies or policies of central banks, downgrades in the credit ratings of sovereign countries,
expropriation, nationalization, confiscation of assets and unfavorable legislative, political developments, and other events in
such non-U.S. jurisdictions. Revenues from the trading of non-U.S. securities may be subject to negative fluctuations as a result
of the above factors. The impact of these fluctuations on our results could be magnified because non-U.S. trading markets,
particularly in emerging market countries, are smaller, less liquid, and more volatile than U.S. trading markets.
70
Employee error or miscommunication could impair our ability to attract and retain customers and subject us to
significant financial losses, legal liability, regulatory sanctions and penalties, and reputational harm; moreover,
misconduct is difficult to detect and deter, and error is difficult to prevent.
Employee error and miscommunication, including mistakes in executing, recording or processing transactions for
customers, could cause us to suffer liability, loss, sanction and/or reputational harm, which could expose us to the risk of
material losses even if the error and miscommunication are detected and the transactions are unwound or reversed. If our
customers are not able to settle their transactions on a timely basis, the time in which employee error and miscommunication are
detected may be increased and our risk of material loss could be increased. The risk of employee error and miscommunication
may be greater for products or services that are new or have non-standardized terms.
Ongoing scrutiny and changing expectations from stockholders, clients and customers with respect to the
Company’s corporate responsibility or ESG practices may result in additional costs or risks.
Companies across our industry are facing continuing scrutiny related to their corporate responsibility or ESG practices
and related demographic disclosures. Investor advocacy groups, certain institutional investors, investment funds and other
influential investors are also focused on such practices and related demographic disclosures and, in recent years, have placed
increasing importance on the non-financial impacts of their investments. Further, customer bids, requests for proposals and
other customer arrangements or opportunities may require disclosure of or improvements in ESG metrics in order to compete
for business. While we are focused on these efforts and disclosures, if our practices and disclosure of specific metrics do not
meet customer, investor or other industry participant expectations, which continue to evolve, we may not win or may lose
customers, or may incur additional costs and our business, financial condition, results of operations and prospects could be
materially adversely affected.
ITEM 1B.
UNRESOLVED STAFF COMMENTS
Not Applicable
ITEM 1C.
CYBERSECURITY
We are committed to combating the threat of cyber-attacks and to securing our business through our information
security programs and developing a deep understanding of cybersecurity risks, vulnerabilities, mitigations, and threats. We have
a global cybersecurity process applicable to all subsidiaries and business lines.
Risk Management and Strategy
Our global cybersecurity processes form the comprehensive framework we utilize for planning, performing, managing,
assessing, and improving our security controls as they relate to cybersecurity, and form part of our overall risk management
system. We aim to conduct our cybersecurity program in accordance with current recognized global policies and standards for
cybersecurity and information technology. These processes are managed by our cybersecurity team headed by our CISO and
CIO and supported by our business continuity teams.
We conduct periodic internal and external vulnerability audits and assessments and penetration testing and provide
periodic cybersecurity training to employees. These measures include regular phishing simulations, annual general
cybersecurity awareness training and data protection training. We also participate in industry-specific cybersecurity roundtables
and professional groups to ensure we remain abreast of industry-wide cybersecurity developments and best practices and
thereby enhance our threat identification processes and responses as necessary. Additionally, when engaging with and utilizing
third-party vendors and partners for our business, we conduct various oversight assessments, including due diligence and
periodic monitoring to identify potential cybersecurity threats associated with our conducting business with such vendors and
partners and to ensure any corresponding risk exposure aligns with our business requirements and risk tolerances.
71
We maintain an incident reporting and escalation process in the event of any observed, detected, or suspected events
that we believe may qualify as a cybersecurity incident. Risks are identified based on a four-tier system, and tiers are assigned
based on the service impact, user impact, financial impact, and security impact that a threat may pose. Our processes include
steps to recover our systems and information through established and tested system recovery plans and business continuity
plans, each based on the appropriate response associated with the corresponding tier of the identified threat. Our incident
response process includes steps to notify key incident management team members who are responsible for communicating with
regulatory and other governmental authorities about cybersecurity events as applicable and as required by law. We determine
the materiality of such incidents based upon a number of factors including if the incident had or may have a material impact on
our business strategy, results of operations, or financial condition. This process involves a review of the nature of the incident
by our cybersecurity team as well as other members of management and employees with specialized technology or financial
knowledge, including our CISO, CIO, and CFO, as applicable. In the event of a material breach, we have a process for
escalation to appropriate members of our senior management, and, where appropriate, to our Board and Audit Committee.
These groups also collaborate in determining the appropriate response to such events and disclosure of any material breach.
We engage third parties from time to time that assist us in the identification, assessment, and management of
cybersecurity risks. We also engage cybersecurity specialists to complete assessments of our cybersecurity processes, program
and practices, including our data protection practices, as well as to conduct targeted attack simulations. The feedback from these
assessments and guidance from external specialists informs our overall risk management system and the development and
improvement of our processes to mitigate cybersecurity risks throughout the Company.
Board Governance and Management
Our global cybersecurity processes are managed primarily by our CISO, whose experience includes approximately 20
years of service in roles relating to assessing, managing and providing oversight for cybersecurity risks at public and private
entities, our CIO, whose experience includes managing the technology professionals and processes at public and private
financial services companies, beginning in December 2024, our global CIO, whose experience includes approximately 40 years
of service in financial services and technology, and our CFO, whose experience includes risk management and specialized
financial knowledge.
Pursuant to the Audit Committee charter, the Audit Committee oversees the management of the Company’s risk
management process, including the identification, prioritization, assessment and management of risks related to cybersecurity.
While our Board and Audit Committee members have broad experience in risk management and in some cases technological
expertise relating to cybersecurity, our CISO and CIO and management teams handle cybersecurity threat management. The
CISO and CIO provide the Board and Audit Committee periodic reports regarding the Company’s cybersecurity risks and
threats, the status of projects to strengthen our information security systems, assessments of our information security program,
and any issues associated with the emerging threat landscape. In addition, the CISO provides periodic reports to our executive
officers, members of the boards of certain of our regulated entities internationally and other members of our senior management
as appropriate. Material events and updates are reported to the full Board and Audit Committee annually and on an ad hoc basis
where warranted based on the level of materiality of any such incidents as determined by the incident reporting and escalation
process led by our CISO and CIO. Our processes are regularly evaluated by internal and external experts, with the results of
those reviews reported to senior management and, where appropriate, the Board and Audit Committee.
Although we believe risks from cybersecurity threats have not materially affected our business strategy, results of
operations, or financial condition to date, they may in the future, and we continue to closely monitor risks from cybersecurity
threats. For additional information on the impact of cybersecurity matters on us, see “Item 1A — Risk Factors — Risks Related
to Our IT Systems and Cybersecurity.”
Disaster Recovery
Our processes address disaster recovery concerns. We operate most of our technology from U.S. and U.K. primary
data centers. Either site alone is typically capable of running all of our essential systems. Replicated instances of this technology
are maintained in our redundant data centers. Our data centers are generally built and equipped to best-practice standards of
physical security with appropriate environmental monitoring and safeguards.
We conduct annual disaster recovery training exercises for each primary data center where failover procedures are
tested against defined Recovery Time Objectives (RTOs).
72
ITEM 2.
PROPERTIES
We have offices in the United States, Canada, Europe, United Kingdom, Latin America, Asia, Australasia, Africa and
the Middle East. Our principal executive offices are located at 499 Park Avenue, New York, New York. We also occupy space
at 199 Water Street, New York, New York and space at 55 Water Street, New York, New York. Under the Administrative
Services Agreement with Cantor, we are obligated to Cantor for our pro rata portion (based on square footage used) of rental
expense during the terms of the leases for such spaces.
Our largest presence outside of the New York metropolitan area is in London, located at Five Churchill Place, London,
E14 5RD.
We currently occupy concurrent computing centers in Weehawken, New Jersey, Secaucus, New Jersey and Trumbull,
Connecticut. In addition, we occupy two data centers in the United Kingdom located in Canary Wharf and Romford, and two
data centers in Asia located in Hong Kong and Singapore. Our U.S. operations also have office space in Iselin, New Jersey,
Palm Beach Gardens, Florida, Garden City, New York, Sugar Land, Texas, Louisville, Kentucky and Chicago, Illinois.
ITEM 3.
LEGAL PROCEEDINGS
See Note 19—“Commitments, Contingencies and Guarantees” to the Company’s consolidated financial statements
included in Part II, Item 8 of this Annual Report on Form 10-K and the information under the heading “Legal Proceedings”
included in Part I, Item 7 of this Annual Report on Form 10-K, “Management’s Discussion and Analysis of Financial Condition
and Results of Operations,” for a description of our legal proceedings, which are incorporated by reference herein.
ITEM 4.
MINE SAFETY DISCLOSURES
Not Applicable.
73
PART II
ITEM 5.
MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our Class A common stock is traded on the Nasdaq Global Select Market under the symbol “BGC.” There is no public
trading market for our Class B common stock, which is held by Cantor, CFGM, Mr. Lutnick, and relatives of Mr. Lutnick.
As of February 27, 2025, there were 1,031 holders of record of our Class A common stock and 7 holders of record of
our Class B common stock.
Our Board of Directors and our Audit Committee have authorized repurchases of our Class A common stock and
redemptions of equity interests in our subsidiaries, including from Cantor, our executive officers, other employees, and others,
including Cantor employees and partners. On July 1, 2023, the BGC Group Board and Audit Committee approved BGC
Group’s repurchase authorization in an amount up to $400.0 million. On October 30, 2024, the BGC Group Board and Audit
Committee re-approved BGC Group’s share repurchase authorization in an amount up to $400.0 million. As of December 31,
2024 we had approximately $350.0 million remaining under this authorization and may continue to actively make repurchases
or purchases, or cease to make such repurchases or purchases, from time to time.
The table below sets forth certain information regarding BGC’s repurchases of its common stock during the fiscal
quarter ended December 31, 2024 (in thousands, except for price paid per share):
Period
Total Number
of Shares
Repurchased
Weighted-
Average Price
Paid per Share
Total Number
of Shares
Repurchased
Under Publicly
Announced
Program
Approximate
Dollar Value
of Shares That May
Yet Be
Repurchased
Under the Program2
October 1, 2024—October 31, 20241
6,369
$
9.45
5,309
November 1, 2024—November 30, 2024
—
—
—
December 1, 2024—December 31, 2024
—
—
—
Total Repurchases
6,369
$
9.45
5,309
$
350,000
____________________________________
1
Includes an aggregate of $1.1 million shares withheld to satisfy tax liabilities due upon the vesting of restricted stock. The fair value
of restricted shares vested but withheld to satisfy tax liabilities was $10.2 million at a weighted-average price of $9.62 per share.
The average price paid per share for such share withholdings is based on the closing price per share on the vesting date of the
restricted stock or, if such date is not a trading day, the trading day immediately prior to such vesting date.
2
Represents amount available under a repurchase program authorized by the Board and Audit Committee on October 30, 2024 up to
an amount of $400.0 million for which there is no expiration date.
Capital Deployment Priorities, Dividend Policy and Repurchase Program
BGC’s current capital allocation priorities are to use our liquidity to return capital to stockholders and to continue
investing in the growth of our business. We have repurchased 36.2 million shares during the year ended December 31, 2024.
Any dividends, if and when declared by our Board, will be paid on a quarterly basis. The dividend to our common
stockholders is expected to be calculated based on a number of factors. No assurance can be made, however, that a dividend
will be paid each quarter. The declaration, payment, timing, and amount of any future dividends payable by us will be at the
sole discretion of our Board using the fully diluted share count.
We are a holding company, with no direct operations, and therefore we are able to pay dividends only from our
available cash on hand and funds received from distributions from BGC U.S. OpCo and BGC Global OpCo. Our ability to pay
dividends may also be limited by regulatory considerations as well as by covenants contained in financing or other agreements.
In addition, under Delaware law, dividends may be payable only out of surplus, which is our net assets minus our capital (as
defined under Delaware law), or, if we have no surplus, out of our net profits for the fiscal year in which the dividend is
declared and/or the preceding fiscal year. Accordingly, any unanticipated accounting, tax, regulatory or other charges against
net income may adversely affect our ability to declare and pay dividends. While we intend to declare and pay dividends
quarterly, there can be no assurance that our Board will declare dividends at all or on a regular basis or that the amount of our
dividends will not change.
74
Performance Graph
On July 1, 2023, BGC completed its Corporate Conversion to a Full C-Corporation in order to reorganize and simplify
its organizational structure. As a result of the Corporate Conversion, BGC Group became the public holding company for, and
successor to, BGC Partners, and each share of BGC Partners Class A common stock trading on Nasdaq under the ticker
“BGCP” was converted into one share of BGC Group Class A common stock trading on Nasdaq under the ticker “BGC.”
The performance graph below shows a comparison of the cumulative total stockholder return of $100 invested in
shares of the Company (identified as shares of BGC Partners, Inc. prior to July 1, 2023 and BGC Group, Inc. on July 1, 2023
and following) on December 31, 2019, measured on December 31, 2020, December 31, 2021, December 31, 2022, December
31, 2023, and December 31, 2024. The returns of the Peer Group have been weighted at the beginning of the period according
to their U.S. dollar stock market capitalizations for purposes of arriving at a Peer Group average.
Total returns are shown on a “net dividend” basis, which reflects tax effects on dividend reinvestments from
companies operating under certain U.K. and European tax jurisdictions, according to local tax laws.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among BGC Group, Inc., Russell 2000, S&P 500 Index, and Peer Group**
BGC Group, Inc.
Russell 2000
S&P 500
Peer Group
12/31/19
12/31/20
12/31/21
12/31/22
12/31/23
12/31/24
$0
$50
$100
$150
$200
$250
*
The above chart reflects $100 invested on 12/31/19 in stock or index, including reinvestment of dividends.
**
Peer group indices use beginning of period market capitalization weighting. The above graph was prepared by Zacks Investment Research, Inc. and
used with its permission. All rights reserved. Copyright 1980-2024. Index data provided by Copyright Standard and Poor’s Inc. and Copyright Russell
Investments. Used with permission. All rights reserved.
In addition to the foregoing five-year returns, the 10-year total returns on $100 calculated using the same methodology
described above are as follows:
•
The 10-year total return for the Company from December 31, 2014 through December 31, 2024 would have
resulted in approximately $234.
•
In comparison, the 10-year total return for $100 invested in the Peer Group, Russell 2000 Index, and S&P 500
Index from December 31, 2014 through December 31, 2024 would have resulted in approximately in $223,
$212, and $343, respectively.
75
[RESERVED]
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion of our financial condition and results of operations should be read together with our
Consolidated Financial Statements and notes to those statements, as well as the “Special Note on Forward-Looking
Information” relating to forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E
of the Exchange Act included elsewhere in this Annual Report on Form 10-K and the cautionary statements relating to forward-
looking statements below.
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
years ended December 31, 2024, 2023, and 2022.
FORWARD-LOOKING CAUTIONARY STATEMENTS
Our actual results and the outcome and timing of certain events may differ significantly from the expectations
discussed in the forward-looking statements. Factors that might cause or contribute to such a discrepancy include, but are not
limited to, the factors set forth below:
•
macroeconomic and other challenges and uncertainties, including those resulting from the conflict between
Ukraine and Russia, conflicts in the Middle East and other ongoing or new conflicts in those or other regions
or jurisdictions, downgrades of U.S. Treasuries, fluctuating global interest rates, inflation and the Federal
Reserve’s responses thereto, fluctuations in the value of global currencies, including the U.S. dollar, liquidity
concerns regarding and changes in capital requirements for banking and financial institutions, changes in the
U.S. and global economies and financial markets, including economic activity, employment levels, new or
increased tariffs imposed by the U.S. and foreign governments and other factors driving trade uncertainty,
reductions in government spending, recession fears, infrastructure spending, supply chain issues, market
liquidity, and energy costs, as well as the various actions taken in response to these challenges and
uncertainties by governments, central banks and others, including consumers and corporate clients and
customers, as well as potential changes in these factors as a result of the new U.S. presidential administration;
•
market conditions and volatility, including fluctuations in interest rates and trading volume, the level of
worldwide governmental debt issuances, austerity programs, government stimulus packages, increases or
decreases in deficits and the impact of changing government tax rates, interpretations of tax law and policy,
repatriation rules, deductibility of interest, and other changes or potential changes to monetary policy,
changing regulatory requirements or changes in legislation, regulations and priorities, possible turmoil across
regional banks and certain global investment banks, volatility in the demand for the products and services we
provide, possible disruptions in trading, potential deterioration of equity and debt capital markets and
cryptocurrency markets, and potential economic downturns, including recessions, and similar effects, which
may not be predictable in future periods;
•
our ability to access the capital markets as needed or on reasonable terms and conditions;
•
our ability to enter new markets or develop new products, offerings, trade desks, marketplaces, or services for
existing or new clients and, to pursue new operations and business initiatives, including our ability to develop
new Fenics platforms and products, to successfully launch new initiatives which could require significant
capital and significant efforts by management, including engaging partners on satisfactory terms, to manage
long lead times to scale a successful venture, efforts to convert certain existing products to a Fully Electronic
trade execution, any efforts to incorporate artificial intelligence into our products and any efforts by our
competitors to do the same, and efforts to induce such clients to use these products, trading desks,
marketplaces, or services and to secure and maintain market share, and our ability to manage the risks
inherent in operating our cryptocurrency business and in safekeeping cryptocurrency assets;
•
pricing, commissions and fees, and market position with respect to any of our products and services and those
of our competitors;
•
the effect of industry concentration and reorganization, reduction of customers, and consolidation;
•
liquidity, regulatory, cash and clearing capital requirements;
ITEM 6.
ITEM 7.
76
•
our relationships and transactions with Cantor and its affiliates, including CF&Co, and CCRE, our structure,
the timing and impact of any actual or future changes to our organization or structure, any related party
transactions, any challenges to our interpretation or application of complex tax laws to our structure, conflicts
of interest or litigation, including with respect to executive compensation matters or other transactions with
our current and former executive officers, any impact of Cantor’s results on our credit ratings and associated
outlooks, any clearing capital agreements, clearing services agreements, Repurchase Agreements or Reverse
Repurchase Agreements with or loans to or from us or Cantor, including the balances and interest rates
thereof from time to time and any convertible or equity features of any such financing transactions, CF&Co’s
acting as our sales agent or underwriter under our CEO Program or other offerings, Cantor’s holdings of the
Company Debt Securities, CF&Co’s acting as a market maker in the Company Debt Securities, CF&Co’s
acting as our financial advisor in connection with certain capital markets transactions and potential
acquisitions, dispositions, divestitures or other transactions, and our participation in various investments,
stock loans or cash management vehicles placed by or recommended by CF&Co;
•
the ongoing integration of acquired businesses and their operations and back office functions with our other
businesses and uncertainties related to the timing of the closing of such acquisitions, synergies, and revenue
growth generated from such acquired or to be acquired businesses;
•
the rebranding or repositioning of certain aspects of our current businesses to adapt to and better address the
needs of our clients or risks related to any potential dispositions of all or any portion of our existing or
acquired businesses;
•
pandemics and other international health incidents or emergencies, and the impact of natural disasters or
weather-related or similar events, including hurricanes and heat waves as well as power failures,
communication and transportation disruptions, and other interruptions of utilities or other essential services;
•
risks inherent in doing business in international markets or with international partners, and any failure to
identify and manage those risks, including economic or geopolitical conditions or uncertainties, the actions of
governments or central banks, including the pursuit of trade, border control or other related policies by the
U.S. and/or other countries (including U.S.-China trade relations), economic and political volatility in the
U.K. and Europe, rising political and other tensions between the U.S. and China, the conflict between Ukraine
and Russia, conflicts in the Middle East, other ongoing or new conflicts in those or other regions or
jurisdictions and additional sanctions and regulations imposed by governments and related counter-sanctions
as well as potential changes in these factors as a result of the new U.S. presidential administration;
•
the impact of U.S. government shutdowns, other political developments, or reduced government staffing,
including uncertainties regarding the debt ceiling, the federal budget and the deployment of federal funds,
elections, political protests or unrest, boycotts, demonstrations, stalemates or other social and political
developments, such as terrorist acts, acts of war or other violence, and potential changes in these factors as a
result of the new U.S. presidential administration;
•
the effect on our businesses, our clients, the markets in which we operate and the economy in general of
changes in U.S. and foreign tax and other laws, including changes in tax rates, interpretations of tax law,
repatriation rules, and deductibility of interest, potential policy and regulatory changes in other countries,
sequestrations, responses to global inflation rates, and other potential changes to tax and other policies
resulting from elections and changes in governments;
•
the effect on our business of leadership changes and the resulting transition following the confirmation of
Howard W. Lutnick, our former Chief Executive Officer and Chairman of the Board, as U.S. Secretary of
Commerce, the appointment of our three Co-Chief Executive Officers to replace Mr. Lutnick, our dependence
upon our key employees, as well as the competing demands on the time of certain of our key employees who
also provide services to Cantor, Newmark and various other ventures and investments sponsored by Cantor or
otherwise, our ability to build out successful succession plans, the impact of absence due to illness or leave of
certain officers or employees and our ability to attract, retain, motivate and integrate new employees, and our
ability to enforce post-employment restrictive covenants on awards previously granted to certain of our key
employees and future awards or otherwise, and the Federal Trade Commission’s ban on non-compete
provisions (which has been set aside pending appeal), which may impact our employment arrangements and
awards if such ban ultimately comes into effect;
•
the effects on our business of Howard W. Lutnick’s intended divestiture of his interests in us, Cantor and
CFGM;
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•
extensive regulation of our businesses and customers, the timing of regulatory approvals, changes in
regulations relating to financial services companies and other industries, and risks relating to U.S. and foreign
tax and compliance matters, including regulatory examinations, inspections, audits, investigations and
enforcement actions, unavailability of certain tax credits or reliefs or additional tax liabilities or assessments,
and any resulting costs, increased financial and capital requirements, enhanced oversight, remediation, fines,
penalties, sanctions, and changes to or restrictions or limitations on specific activities, including potential
delays in accessing markets, including due to our regulatory status and actions, operations, and compensatory
arrangements, and growth opportunities, including acquisitions, hiring, and new businesses, products, or
services, as well as risks related to our taking actions to ensure that we and our subsidiaries are not deemed
investment companies under the Investment Company Act;
•
factors related to specific transactions or series of transactions, including credit, performance, and principal
risk, trade failures, potential counterparty failures, and the impact of fraud and unauthorized trading;
•
costs and expenses of developing, maintaining, and protecting our intellectual property, utilizing third-party
software licensed under “open source” licenses, as well as employment, regulatory, and other litigation and
proceedings, and their related costs, including costs and expenses related to acquisitions and other matters,
including judgments, indemnities, fines, or settlements paid, reputational risk, requirements that we stop
selling or redesign affected products or services, rebrand or restrict our products or services or pay damages
to satisfy indemnification commitments with our customers, and the impact thereof on our financial results
and cash flows in any given period;
•
certain other financial risks, including the possibility of future losses, indemnification obligations, assumed
liabilities, reduced cash flows from operations, increased leverage, reduced availability under our credit
agreements, and the need for short- or long-term borrowings, including from Cantor, our ability to refinance
our indebtedness, including in the credit markets, on acceptable terms and rates, and changes to interest rates
and market liquidity or our access to other sources of cash relating to acquisitions, dispositions, or other
matters, potential liquidity and other risks relating to our ability to maintain continued access to credit and the
availability of financing necessary to support our ongoing business needs, on terms acceptable to us, if at all,
and risks associated with the resulting leverage, including potentially causing a reduction in our credit ratings
and associated outlooks and increased borrowing costs as well as interest rate and foreign currency exchange
rate fluctuations;
•
risks associated with the temporary or longer-term investment of our available cash, including in the BGC
OpCos, defaults or impairments on our investments (including investments in non-marketable securities),
joint venture interests, stock loans or cash management vehicles and collectability of loan balances owed to us
by employees, the BGC OpCos or others;
•
the impact of any restructuring or similar other transformative transactions, acquisitions, or divestitures on
our ability to enter into marketing and strategic alliances or business combinations and attract investors or
partners or engage in restructuring, rebranding or other transactions in the financial services and other
industries, including acquisitions, divestitures, tender offers, exchange offers, dispositions, reorganizations,
partnering opportunities and joint ventures, the failure to realize the anticipated benefits of any such
transactions, relationships or growth, and the future impact of any such transactions, relationships or growth
on our other businesses and our financial results for current or future periods, the integration of any
completed acquisitions and the use of proceeds of any completed dispositions or divestitures, the impact of
amendments and/or terminations of any strategic arrangements, and the value of and any hedging entered into
in connection with consideration received or to be received in connection with such dispositions and any
transfers thereof;
•
our estimates or determinations of potential value with respect to various assets or portions of our businesses,
including Fenics, FMX and other businesses;
•
our ability to manage turnover and hire, train, integrate and retain personnel, including brokers, salespeople,
managers, technology professionals and other front-office personnel, back-office and support services and
personnel, and departures of senior personnel;
•
our ability to expand the use of technology and maintain access to the intellectual property of others for
Hybrid and Fully Electronic trade execution in our product and service offerings, and otherwise;
•
the impact of artificial intelligence on the economy, our industry, our business and the businesses of our
clients and vendors;
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•
our ability to effectively manage any growth that may be achieved, including outside the U.S., while ensuring
compliance with all applicable financial reporting, internal control, legal compliance, and regulatory
requirements;
•
our ability to identify and remediate any material weaknesses or significant deficiencies in our internal
controls which could affect our ability to properly maintain books and records, prepare financial statements
and reports in a timely manner, control our policies, practices and procedures, operations and assets, assess
and manage our operational, regulatory and financial risks, and integrate our acquired businesses and brokers,
salespeople, managers, technology professionals and other front-office personnel;
•
the impact of unexpected market moves and similar events;
•
information technology risks, including capacity constraints, failures, or disruptions in our operational
systems or infrastructure, or those of our clients, counterparties, exchanges, clearing facilities, or other parties
with which we interact, including increased demands on such systems and on the telecommunications
infrastructure from remote working, cybersecurity risks and incidents, compliance with regulations requiring
data minimization and protection and preservation of records of access and transfers of data, privacy risk and
exposure to potential liability and regulatory focus;
•
the expansion of our cybersecurity processes to include new businesses, or the integration of the cybersecurity
processes of acquired businesses;
•
the effectiveness of our governance, risk management, and oversight procedures and the impact of any
potential transactions or relationships with related parties;
•
the impact of our ESG or “sustainability” ratings on the decisions by clients, investors, ratings agencies,
potential clients and other parties with respect to our businesses, investments in us, our borrowing
opportunities or the market for and trading price of BGC Class A common stock, Company Debt Securities,
or other matters, as well as the impact and potential cost to us of any policies, legislation, or initiatives in
opposition to our ESG or “sustainability” policies;
•
the fact that the prices at which shares of our Class A common stock are or may be sold in offerings,
acquisitions, or other transactions may vary significantly, and purchasers of shares in such offerings or other
transactions, as well as existing stockholders, may suffer significant dilution if the price they paid for their
shares is higher than the price paid by other purchasers in such offerings or transactions;
•
the impact of any potential future changes in our capital deployment priorities or any future reductions to our
dividends and the timing and amounts of any future dividends, including on our stock price and on our ability
to meet expectations with respect to payments of dividends and repurchases of shares of our Class A common
stock, or other equity interests in us or any of our other subsidiaries, including from Cantor, our executive
officers, other employees, and others, and our ability to pay any excise tax that may be imposed on the
repurchase of shares; and
•
the effect on the markets for and trading prices of our Class A common stock and Company Debt Securities
of various offerings and other transactions, including offerings of our Class A common stock and convertible
or exchangeable debt or other securities, our repurchases of shares of our Class A common stock or other
equity interests in us or in our subsidiaries, our payment of dividends on our Class A common stock,
convertible arbitrage, hedging, and other transactions engaged in by us or holders of our outstanding shares,
Company Debt Securities or other securities, share sales and stock pledges, stock loans, and other financing
transactions by holders of our shares (including by Cantor or others), including of shares acquired pursuant to
our employee benefit plans, corporate restructurings, acquisitions, conversions of shares of our Class B
common stock and our other convertible securities into shares of our Class A common stock, and distributions
of our Class A common stock by Cantor to its partners.
The foregoing risks and uncertainties, as well as those risks and uncertainties discussed under the headings “Item 1A—
Risk Factors,” and “Item 7A—Quantitative and Qualitative Disclosures About Market Risk” and elsewhere in this Annual
Report on Form 10-K, may cause actual results and events to differ materially from the forward-looking statements.
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OVERVIEW AND BUSINESS ENVIRONMENT
We are a leading global marketplace, data, and financial technology company that 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 foreign exchange, energy, commodities, shipping, equities, and futures and options. Our business also provides network
and connectivity solutions, market data and related information services, and post-trade services.
Our integrated platform is designed to provide flexibility to customers with regard to price discovery, trade execution
and transaction processing, as well as accessing liquidity through our platforms, for transactions executed either OTC or
through an exchange. Through our electronic brands, we offer several trade execution, market infrastructure and connectivity
services, as well as post-trade services.
Our clients include many of the world’s largest banks, broker-dealers, trading firms, hedge funds, governments,
corporations, investment firms, commodity trading firms and end users, such as producers and consumers. BGC is a global
operation with offices across all major geographies, including New York and London, as well as in Bahrain, Beijing, Bogota,
Brisbane, Cape Town, Chicago, Copenhagen, Dubai, Dublin, Frankfurt, Geneva, Hong Kong, Houston, Johannesburg, Madrid,
Manila, Melbourne, Mexico City, Miami, Milan, Monaco, Nyon, Paris, Perth, Rio de Janeiro, Santiago, São Paulo, Seoul,
Shanghai, Singapore, Sydney, Tel Aviv, Tokyo, Toronto, Wellington and Zurich.
As of December 31, 2024, we had 2,161 brokers, salespeople, managers, technology professionals and other front-
office personnel across our businesses.
Corporate Conversion
Effective as of 12:01 a.m., Eastern Time, on July 1, 2023, BGC Holdings reorganized from a Delaware limited
partnership into a Delaware limited liability company through a merger with and into Holdings Merger Sub, with Holdings
Merger Sub continuing as a direct subsidiary of BGC Partners. Effective as of 12:02 a.m., Eastern Time, on July 1, 2023,
Merger Sub 1 merged with and into BGC Partners, with BGC Partners continuing as a direct subsidiary of BGC Group. At the
same time, Merger Sub 2 merged with and into Holdings Merger Sub, with Holdings Merger Sub continuing as a subsidiary of
BGC Group. As a result of the Corporate Conversion Mergers, BGC Partners and BGC Holdings became wholly owned
subsidiaries of BGC Group.
In the Holdings Reorganization Merger, each unit of BGC Holdings outstanding as of immediately prior to the
Holdings Reorganization Merger was converted into a substantially equivalent equity interest in Holdings Merger Sub.
In the Corporate Merger, each share of Class A common stock, par value $0.01 per share, of BGC Partners and each
share of Class B common stock, par value $0.01 per share, of BGC Partners outstanding was converted into one share of Class
A common stock, par value $0.01 per share, of BGC Group and one share of Class B common stock, par value $0.01 per share,
of BGC Group, respectively.
In connection with, but prior to, the Corporate Conversion, the Company completed various transactions which
included:
•
the redemption of certain non-exchangeable limited partnership units in connection with the issuance of shares of BGC
Partners Class A common stock and the accompanying tax payments, which led to an equity-based compensation
charge of $60.9 million;
•
the exchange of the remaining 1.5 million exchangeable limited partnership units of BGC Holdings held by employees
on June 30, 2023, for 1.0 million shares, after tax withholding, of BGC Partners Class A common stock;
•
the redemption of certain non-exchangeable limited partnership units of BGC Holdings held by employees and
issuance of 16.9 million BGC Partners RSUs on a one-for-one basis on June 30, 2023;
•
the redemption of certain non-exchangeable Preferred Units of BGC Holdings held by employees and issuance of
$49.2 million of BGC Partners RSU Tax Accounts on June 30, 2023, based on the fixed cash value of the Preferred
Units redeemed;
•
the redemption of the remaining 5.6 million non-exchangeable FPUs and issuances of BGC Partners RSUs on a one-
for-one basis on June 30, 2023, which in turn reduced the “Redeemable Partnership Interest” to zero with an offsetting
impact to “Total equity” in the Company’s Consolidated Statements of Financial Condition as of June 30, 2023; and
•
the purchase on June 30, 2023 by Cantor from BGC Holdings of an aggregate of 5,425,209 Cantor units for an
aggregate consideration of $9,715,772 as a result of the redemption of 5,425,209 FPUs, and 324,223 Cantor units for
an aggregate consideration of $598,712 as a result of the exchange of 324,223 FPUs.
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As a result of the Corporate Conversion:
•
64.0 million Cantor units, including 5.7 million purchased on June 30, 2023, were converted into shares of BGC
Group Class B common stock, subject to the terms and conditions of the Corporate Conversion Agreement, provided
that a portion of the 64.0 million shares of BGC Group Class B common stock issued to Cantor will exchange into
BGC Group Class A common stock in the event that BGC Group does not issue at least $75,000,000 in shares of BGC
Group Class A or B common stock in connection with certain acquisition transactions prior to July 1, 2030, the
seventh anniversary of the Corporate Conversion;
•
BGC Group assumed all BGC Partners RSUs, RSU Tax Accounts or restricted stock awards outstanding as of June 30,
2023; and
•
non-exchangeable limited partnership units of BGC Holdings were converted into equity awards denominated in cash,
restricted stock and/or RSUs of BGC Group, each as further set forth in the Corporate Conversion Agreement. BGC
Group granted 38.6 million restricted stock awards, 25.3 million RSUs, and $74.0 million of RSU Tax Accounts upon
the conversion of the non-exchangeable shares of Holdings Merger Sub.
There were no limited partnership units of BGC Holdings remaining after the Corporate Conversion was completed.
In connection with the Corporate Conversion on July 1, 2023, the BGC Group Board and the Board of Directors of
BGC Partners authorized the assumption of all agreements and arrangements between BGC Partners and any executive officer,
director or affiliate of BGC Partners, with such modifications necessary to reflect the Corporate Conversion. Pursuant to the
foregoing authorization, any existing agreements and arrangements between BGC Partners and any executive officer, director
or affiliate of BGC Partners, were generally assumed unchanged other than making BGC Group a party thereto.
In connection with the Corporate Conversion on July 1, 2023, the Board and Audit Committee of BGC Group
approved the authorized repurchases of Company Equity Securities from any holder of Company Equity Securities, including
our directors, officers, and employees, of up to $400.0 million.
In connection with the Corporate Conversion on July 1, 2023, the Board and Audit Committee of BGC Group
approved the authorized repurchases of Company Debt Securities from any holder of Company Debt Securities, including our
directors, officers, and employees, of up to $50.0 million.
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.
In connection with the Corporate Conversion on July 1, 2023, the BGC Holdings Limited Partnership Agreement was
terminated, and the BGC Holdings, L.P. Participation Plan was terminated.
In connection with the Corporate Conversion on July 1, 2023, BGC Group amended and restated its certificate of
incorporation to reflect an increase in the authorized shares of BGC Group Class A common stock to 1,500,000,000; an
increase in the authorized shares of BGC Group Class B common stock to 300,000,000; and a provision providing for
exculpation to officers of BGC Group pursuant to Section 102(b)(7) of the DGCL. Additionally, BGC Group amended and
restated its bylaws to adopt a provision providing that Delaware courts shall be the exclusive forum for certain matters.
In connection with the Corporate Conversion on July 1, 2023, the Exchange Agreement with Cantor terminated based
on its own terms.
In connection with the Corporate Conversion on July 1, 2023, BGC Group, Cantor and certain affiliates of Cantor
entered into an Amended and Restated U.S. Master Administrative Services Agreement and an Amended and Restated U.K.
Master Administrative Services Agreement.
FMX
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 newly launched 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.
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In January 2024, FMX received CFTC approval to operate an exchange for U.S. interest rate futures products, the most
widely traded futures contracts in the world.
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.
On September 23, 2024 FMX Futures Exchange launched the trading of SOFR futures, the largest notional futures
contract in the world. The FMX Futures Exchange launched with five FCMs, Goldman Sachs, J.P. Morgan, Marex, RBC, and
Wells Fargo. FMX expects to have at least 10 FCMs connected before the launch of U.S. Treasury futures around the end of the
first quarter of 2025.
Fenics
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.
Historically, technology-based product growth has led to higher margins and greater profits over time for exchanges
and wholesale financial intermediaries alike, even if overall Company revenues remain consistent. This is largely because
automated and electronic trading efficiency allows the same number of employees to manage a greater volume of trades as the
marginal cost of incremental trading activity falls. Over time, the conversion of exchange-traded and OTC markets to fully
electronic trading has also typically led to an increase in volumes which offset lower commissions, and often lead to similar or
higher overall revenues. We have been a pioneer in creating and encouraging hybrid and fully electronic execution, and we
continually work with our customers to expand such trading across more asset classes and geographies.
Over the past decade, electronic markets for OTC products have grown as a percentage of overall industry volumes as
firms like ours have invested in the kinds of technology favored by our customers. Regulation across banking, capital markets,
and OTC derivatives has accelerated the adoption of fully electronic execution, and we expect this demand to continue. We also
believe that new clients, beyond our large bank customer base, will primarily transact electronically across our Fenics
platforms.
The combination of wider adoption of hybrid and fully electronic execution and our competitive advantage in terms of
technology and experience has contributed to our strong growth in electronically traded products. We continue to invest in our
high-growth, high-margin, technology-driven businesses, including our standalone fully electronic Fenics Growth Platforms.
Fenics has exhibited strong growth over the past several years, and we believe that this growth has outpaced the wholesale
brokerage industry. We expect this trend to continue as we continue to convert more of our Voice/Hybrid execution into higher-
margin, technology-driven execution and continue to grow our Fenics Growth Platforms.
We expect to benefit from the trend towards electronic trading, increased demand for market data, and the need for
increased connectivity, automation, and post-trade services. We continue to onboard new customers as the opportunities created
by electronic and algorithmic trading continue to transform our industry. We continue to roll out our next-generation Fenics
execution platforms across more products and geographies with the goal of seamlessly integrating the liquidity of voice
transactions with customer electronic orders either by a GUI, API, or web-based interface.
Revenues in our Fenics businesses increased 8.6% to $142.1 million in the fourth quarter of 2024 and 9.4% to $570.8
million for the year ended December 31, 2024, in each case compared to the prior year period.
Within our Fenics businesses, Fenics Markets revenue grew 6.4% to $116.7 million in the fourth quarter of 2024 and
6.6% to $476.0 million for the year ended December 31, 2024, in each case compared to the prior year period. Fenics Markets
growth was driven by higher electronic volumes across Rates and Foreign Exchange, as well as higher market data revenues,
partially offset by lower credit volumes.
Fenics Growth Platforms revenue grew 20.2% to $25.5 million in the fourth quarter of 2024 and 26.3% to $94.8
million for the year ended December 31, 2024, in each case compared to the prior year period. Collectively, our newer Fenics
Growth Platform offerings are not yet fully up to scale, but continue to grow at a leading rate. Over time, the Company expects
these new products and services to become profitable, high-margin businesses as their scale and revenues increase, all else
equal.
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The Company continues to invest in our Fenics Growth Platforms, and notable highlights for the fourth quarter of
2024 compared to the prior year period include:
•
FMX UST generated ADV of over $52 billion for the fourth quarter, up 28% compared to last year. This translated to
over 30% market share for the fourth quarter, up from 29% last quarter and 26% a year ago.
•
FMX FX volumes improved by approximately 80% compared to last year on record ADV of more than $11 billion.
FMX FX continues to expand its market share in the enormous global foreign exchange market.
•
FMX Futures Exchange continues to connect the world’s largest FCMs, recently onboarding FMX’s partners, Bank of
America, Barclays and Citi. FMX expects to have at least 10 FCMs connected before the launch of U.S. Treasury
futures around the end of the first quarter 2025. As FMX continues to connect and integrate more FCMs, ADV and
open interest on the FMX Futures Exchange are expected to meaningfully accelerate.
•
PortfolioMatch ADV increased more than 150% due to strong growth across both U.S. and European credit volumes.
•
Lucera, Fenics’ network business that provides critical real-time trading infrastructure to the capital markets, grew its
revenue by over 33% and continues to expand its revenue pipeline.
Total revenues from our high-margin Data, network and post-trade business, which is predominately comprised of
recurring revenue, were up 10.3% to $32.6 million in the fourth quarter of 2024 and 13.9% to $127.0 million for the year ended
December 31, 2024, in each case over the prior year period.
Data, network and post-trade revenues increased by 10.3% to $32.6 million. This growth was primarily driven by
strong subscription-based revenue growth across Fenics Market Data and Lucera, partially offset by lower post-trade revenues
due to the sale of BGC’s Capitalab business in the fourth quarter. Revenues for Data, network and post-trade, excluding the
impact of Capitalab, grew by more than 20% year-over-year.
Fenics brokerage revenues increased by 8.2% to $109.5 million in the fourth quarter of 2024 and 8.2% to $443.7
million for the year ended December 31, 2024, in each case over the prior year period.
Fenics’ revenue growth was led by Fenics Rates, Credit and Data, network and post-trade businesses. Fenics
represented 24.8% of BGC’s overall revenue in the fourth quarter of 2024 compared to 24.8% in the fourth quarter of 2023, and
25.2% for the year ended December 31, 2024 compared to 25.2% in the year ended December 31, 2023.
Acquisitions
On October 22, 2024, the Company announced that it had executed a definitive agreement to acquire OTC Global. The
closing of the proposed acquisition of OTC Global, which is expected to be a substantially all cash transaction, is subject to
customary closing conditions, including the receipt of applicable regulatory approvals.
On October 1, 2024, the Company completed the acquisition of Sage, an energy and environmental brokerage firm.
This acquisition will expand BGC’s energy brokerage services in the U.S. and support BGC’s global growth efforts across
ECS.
Both the Sage acquisition at the beginning of the fourth quarter of 2024 and the anticipated acquisition of OTC Global
are expected to be immediately accretive.
On November 1, 2023, the Company completed the acquisition of ContiCap, an independent financial product
intermediary specializing in emerging markets.
On November 1, 2023, the Company completed the acquisition of Open Energy Group, a technology-driven
marketplace and brokerage for renewable energy asset sales and project finance.
On February 28, 2023, the Company completed the acquisition of Trident, primarily operating as a commodity
brokerage and research company, offering OTC and exchange traded energy and environmental products.
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Divestitures
On December 3, 2024, the Company announced the sale of Capitalab, which was part of its post-trade business, to
Capitolis. BGC will retain its high-growth, post-trade foreign exchange risk reduction business, which was previously included
under the Capitalab brand and will be renamed Fenics NDF Match.
As a result of this sale, the Company recognized a $39.0 million gain, net of banking fees, other professional fees, and
compensation expenses, which is included in “Gains (losses) on divestitures and sale of investments” in the Company’s
Consolidated Statements of Operations during the year ended December 31, 2024. The Company had no gains or losses from
divestitures or sales of investments during the years ended December 31, 2023 and 2022.
Brands and Trademarks
Amerex, Aurel, Aurel BGC, Caventor, CBID, Conticap, CreditMatch, BGC, BGC Group, BGC Partners, BGC Trader,
ELX, Euro Brokers, Fenics, Fenics.com, Fenics Markets Xchange, Fenics Digital, FMX UST, FMX FX, 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, FMX NDF, GFI, GFI Ginga, kACE2, Lake Securities, Latium Capital, LumeFX, LumeMarkets,
Lucera, Martin Brokers, Maxcor, Matchbox, Mint, MIS Brokers, Open Energy, Perimeter Markets Inc., Poten & Partners, RP
Martin, Tower Bridge, Sage, Sunrise Brokers, 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.
Other Matters
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 years ended December 31, 2024 and 2023, the Company reserved $4.0 million
and $9.0 million, respectively, in connection with unsettled trades and receivables with sanctioned Russian entities.
Tax Policy Changes
Pillar 2 is part of the Organization for Economic Co-Operation and Development/G20 Inclusive Framework on Base
Erosion and Profit Shifting, which is part of a global initiative to address tax avoidance and ensure that multinational enterprises
pay their fair share of taxes. The Pillar 2 framework introduces a global minimum tax rate of 15% for multinational companies.
In December 2022, the Council of the EU unanimously adopted the EU Minimum Tax Directive, which would require member
states to implement these rules. In the UK, Pillar 2 was adopted after royal assent was given in July 2023.
Management performed Pillar 2 calculations for the necessary jurisdictions for the 2024 fiscal year and determined
that the minimum global effective tax did not have a material impact on our 2024 tax rate.
Financial Services Industry
The financial services industry has grown historically due to several factors. One factor was the increasing use of
derivatives to manage risk or to take advantage of the anticipated direction of a market by allowing users to protect gains and/or
guard against losses in the price of underlying assets without having to buy or sell the underlying assets. Derivatives are often
used to mitigate the risks associated with interest rates, equity ownership, changes in the value of FX, credit defaults by
corporate and sovereign debtors, and changes in the prices of commodity products. Over this same timeframe, demand from
financial institutions, large corporations, and other end-users of financial products have increased volumes in the wholesale
derivatives market, thereby increasing the business opportunity for financial intermediaries.
Another key factor in the historical growth of the financial services industry has been the increase in the number of
new financial products. As market participants and their customers strive to mitigate risk, new types of equity and fixed income
securities, futures, options and other financial instruments have been developed. Most of these new securities and derivatives
were not immediately ready for more liquid and standardized electronic markets, and generally increased the need for trading
and required broker-assisted execution.
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Due largely to the impacts of the global financial crisis of 2008-2009, our businesses had faced more challenging
market conditions from 2009 until the second half of 2016. Accommodative monetary policies were enacted by several major
central banks, including the Federal Reserve, Bank of England, Bank of Japan and the ECB, in response to the global financial
crises. These policies resulted in historically low levels of volatility and interest rates across many of the financial markets in
which we operate. The global credit markets also faced structural issues, such as increased bank capital requirements under
Basel III. Consequently, these factors contributed to lower trading volumes in our Rates and Credit asset classes across most
geographies in which we operated.
From mid-2016 until the first quarter of 2020, the overall financial services industry benefited from sustained
economic growth, lower unemployment rates in most major economies, higher consumer spending, the modification or repeal
of certain U.S. regulations, and higher overall corporate profitability. The trend towards digitization and electronification within
the industry contributed to higher overall volumes and transaction count in fully electronic execution. From the second quarter
of 2020 onward, concerns about the future trade relationship between the U.K. and the EU after Brexit, a slowdown in global
growth driven by the outbreak of COVID-19, and an increase in trade protectionism were tempered by monetary and fiscal
stimulus. During 2021, as the global economy recovered from the COVID-19 pandemic, higher inflation across the U.S. and
other G8 countries led many central banks to begin and/or announce tapering and unwinding of asset purchases under
quantitative easing programs, as well as implement multiple interest rate hikes.
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 recent 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.
Industry Consolidation
Over the past decade, there has been significant consolidation among the interdealer-brokers and wholesale brokers
with which we compete. We continue to compete with the electronic markets and market data businesses of the CME, primarily
through our FMX businesses where we compete in U.S. Treasuries, U.S. interest rate futures, and foreign exchange products.
We also continue to compete with TP ICAP and Tradition across various Voice/Hybrid brokerage marketplaces as well as via
Fenics.
Additional strategic acquisitions of OTC trading platforms by exchanges and electronic marketplaces include ICE
buying BondPoint and TMC Bonds, Deutsche Börse buying 360T, CBOE buying Hotspot, MarketAxess buying LiquidityEdge,
Tradeweb buying Nasdaq’s U.S. Fixed Income Electronic Trading Platform, r8fin and ICD, LSEG acquiring Quantile, etc. We
view the consolidation in the industry favorably, as we expect it to provide additional operating leverage to our businesses in
the future.
Growth Drivers
As a wholesale intermediary in the financial services industry, our businesses are driven primarily by secondary
trading volumes in the markets in which we broker, the size and productivity of our front-office personnel, regulatory issues,
and the percentage of our revenues we are able to generate by Fully Electronic means. BGC’s revenues tend to have low
correlation in the short- and medium-term with global bank and broker-dealer sales and trading revenues, which reflect bid-ask
spreads and mark-to-market movements, as well as industry volumes in both the primary and secondary markets.
Below is a brief analysis of the market and industry volumes for some of our products, including our overall Voice/
Hybrid and Fully Electronic execution activities.
Overall Market Volumes and Volatility
Volume is driven by a number of factors, including the level of issuance for financial instruments, price volatility of
financial instruments, central bank policies, macro-economic conditions, creation and adoption of new products, regulatory
environment, and the introduction and adoption of new trading technologies. Historically, increased price volatility has often
increased the demand for hedging instruments, including many of the cash and derivative products that we broker.
85
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.
Additional factors have weighed on market volumes in the products we broker. For example, the Basel III accord,
implemented in late 2010 by the G-20 central banks, is a global regulatory framework on bank capital adequacy, stress testing
and market liquidity risk that was developed with the intention of making banks more stable in the wake of the financial crisis
by increasing bank liquidity and reducing bank leverage. The accord, which took effect on January 1, 2023, requires most large
banks in G-20 nations to hold approximately three times as much Tier 1 capital as was required under the previous set of rules.
These capital rules have made it more expensive for banks to hold non-sovereign debt assets on their balance sheets, and as a
result, analysts say that banks have reduced their proprietary trading activity in corporate and asset-backed fixed income
securities as well as in various other OTC cash and derivative instruments. We believe that this has further reduced overall
market exposure and industry volumes in many of the products we broker, particularly in Credit.
During the year ended December 31, 2024, industry volumes were higher across Rates, ECS, FX, and Credit compared
to the prior year period, while volumes were generally mixed across Equities. BGC’s brokerage revenues were up by 11.2%
year-on-year, reflecting broad-based growth across all geographies and strong double-digit revenue growth across BGC’s three
largest asset classes, Rates, ECS and FX.
Below is an expanded discussion of the volume and growth drivers of our various brokerage product categories.
Rates Volumes and Volatility
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, and recent and potential future monetary policy changes by major central banks
have given rise to higher levels of interest rate trading activity and are expected to provide continued tailwinds to our Rates
business.
The level of secondary trading and related hedging activity was higher during 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 16%. Over the same time period, listed products on CME were up 10%, and OTC interest rate
derivative volumes traded on SEF were up 27% compared to 2023, according to Clarus. In comparison, our overall Rates
revenues were up 12.2% as compared to a year earlier to $685.0 million.
Our Rates revenues, like the revenues for most of our products, are not fully dependent on market volumes and,
therefore, do not always fluctuate consistently with industry metrics. This is largely because our Voice, Hybrid, and Fully
Electronic Rates desks often have volume discounts built into their price structure, which results in our Rates revenues being
less volatile than the overall industry volumes.
ECS Volumes
ECS volumes were higher during 2024 compared to the prior year period. CME and ICE energy futures and options
volumes were up 17% and 24%, respectively. In comparison, BGC’s ECS revenues increased by 25.1% to $483.2 million.
Foreign Exchange Volumes and Volatility
Global foreign exchange volumes were higher during 2024 compared to the prior year period. Volumes for CME FX
futures and options and CME EBS spot FX were up 8%, and 5%, respectively, and Cboe FX was up 4%. In comparison, our
overall FX revenues increased by 14.0% to $358.7 million.
86
Credit Volumes
Our Credit business is impacted by the level of global corporate bond issuance and interest rates. Credit volumes were
higher during 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 by 14% according to Bloomberg. In comparison, our overall Credit revenues increased by
0.9% to $287.4 million.
Equities Volumes
Global equity volumes were generally mixed during 2024. According to the Securities Industry and Financial Markets
Association, or SIFMA, the average daily volume of U.S. cash equities was up 10%, as compared to a year earlier. Over the
same timeframe, Eurex average daily volumes of equity and equity index derivatives were down 4% and Euronext equity
derivative index volumes were down 10%. However, according to the OCC, the average daily volume of U.S. options was up
10%. Our Equities business primarily consists of equity derivatives and, our overall revenues from Equities increased by 5.3%
to $223.9 million.
FINANCIAL OVERVIEW
Revenues
Our revenues are derived primarily from brokerage commissions charged for either agency or matched principal
transactions, fees charged for data, network and post-trade products, fees from related parties and interest income.
Brokerage
We earn revenues from our brokerage services on both an agency and matched principal basis. In agency transactions,
we charge a commission for connecting buyers and sellers and assisting in the negotiation of the price and other material terms
of the transaction. After all material terms of a transaction are agreed upon, we identify the buyer and seller to each other and
leave them to settle the trade directly. Principal transaction revenues are primarily derived from matched principal transactions,
whereby revenues are earned on the spread between the buy and the sell price of the brokered security, commodity or
derivative. Customers either see the buy or sell price on a screen or are given this information over the phone. The brokerage
fee is then added to the buy or sell price, which represents the spread we earn as principal transactions revenues. On a limited
basis, we enter into unmatched principal transactions to facilitate a customer’s execution needs for transactions initiated by such
customers. We also provide market data products for selected financial institutions.
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We offer our brokerage services in five broad product categories: Rates, ECS, FX, Credit, and Equities. The chart
below details brokerage revenues by product category and by Voice/Hybrid versus Fully Electronic (in thousands):
For the Year Ended December 31,
2024
2023
2022
Brokerage revenue by product:
Rates
$
685,032
$
610,451
$
549,503
ECS
483,232
386,206
291,665
FX
358,693
314,706
299,721
Credit
287,377
284,744
271,419
Equities
223,912
236,517
234,493
Total brokerage revenues
$ 2,038,246
$ 1,832,624
$ 1,646,801
Brokerage revenue by product (percentage):
Rates
33.6 %
33.3 %
33.4 %
ECS
23.7
21.1
17.7
FX
17.6
17.2
18.2
Credit
14.1
15.5
16.5
Equities
11.0
12.9
14.2
Total brokerage revenues
100.0 %
100.0 %
100.0 %
Brokerage revenue by type:
Voice/Hybrid
$ 1,594,506
$ 1,422,541
$ 1,293,929
Fully Electronic1
443,740
410,083
352,872
Total brokerage revenues
$ 2,038,246
$ 1,832,624
$ 1,646,801
Brokerage revenue by type (percentage):
Voice/Hybrid
78.2 %
77.6 %
78.6 %
Fully Electronic1
21.8
22.4
21.4
Total brokerage revenues
100.0 %
100.0 %
100.0 %
____________________________________
1
Includes Fenics Integrated.
Our position as a leading wholesale financial broker is enhanced by our Hybrid brokerage platform. We believe that
the more complex, less liquid markets on which we focus often require significant amounts of personal and attentive service
from our brokers. In more mature markets, we offer Fully Electronic execution capabilities to our customers through our
platforms, including Fenics and BGC Trader. Our Hybrid platform allows our customers to trade on a Voice, Hybrid or Fully
Electronic basis, regardless of whether the trade is OTC or exchange-based, and to benefit from the experience and market
intelligence of our worldwide brokerage network. Our electronic capabilities include clearing, settlement, post-trade, and other
back-office services as well as straight-through processing for our customers across several products. Furthermore, we benefit
from the operational leverage in our Fully Electronic platform. We believe our Voice/Hybrid brokerage approach provides a
competitive advantage over competitors who do not offer this full range of technology. We continue to experience strong
growth in our Fully Electronic business and we expect this trend to continue; however, the composition of our Fully Electronic
business, as a percentage of our overall revenues, may fluctuate due to acquisitions, dispositions, changes in business mix and/
or periods of heightened market volatility.
Rates
Our Rates business is focused on government debt, listed and OTC interest rate derivatives, and other interest rate
products, which are globally among the largest and most actively traded markets. The main drivers of these markets are global
macroeconomic forces such as new issuances, inflation, and government budget and central bank policies.
Energy, Commodities, and Shipping
We provide brokerage services for most widely traded energy and commodities products, including futures and OTC
products covering refined and crude oil, power and electricity, natural gas, liquefied natural gas, environmental and emissions
products, weather derivatives, base metals, coal and soft commodities. We also provide brokerage services associated with the
shipping of certain energy and commodities products.
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Foreign Exchange
The foreign exchange market is one of the largest financial markets in the world. Foreign exchange transactions can
either be undertaken in the spot market or derivatives market. Our Foreign Exchange business is focused on providing
execution services in most major currencies across all foreign exchange products, including spot FX, options, forwards and
NDFs.
Credit
We provide our brokerage services in a wide range of credit instruments, including corporate bonds, emerging market
bonds, credit default swaps, exotic credit derivatives, asset-back securities, and structured products.
Equities
We provide brokerage services in a range of markets for equity products, including cash equities, equity derivatives
(both listed and OTC), equity index futures and options on equity products.
Data, network and post-trade
Fenics Market Data is a supplier of real-time, tradable, indicative, end-of-day and historical market data. Our market
data product suite includes fixed income, interest rate derivatives, credit derivatives, FX, FX options, money markets, energy
and equity derivatives and structured market data products and services. The data are sourced from our Voice/Hybrid and fully
electronic execution operations and made available to financial professionals, research analysts, compliance and surveillance
departments, and other market participants via direct data feeds and BGC-hosted FTP environments, as well as via information
platforms such as Bloomberg, LSEG Data & Analytics, ICE Data Services, and other select specialist vendors.
Through our network business, we provide customized screen-based market solutions to both related and unrelated
parties. Our clients are able to develop a marketplace, trade with their customers and access our network and our intellectual
property. We can add advanced functionality to enable our customers to distribute branded products to their customers through
online offerings and auctions, including private and reverse auctions, via our trading platform and global network.
As part of our network business, our Lucera® brand delivers high-performance technology solutions designed to be
secure and scalable and to power demanding financial applications across several offerings: LumeFX® (distributed FX
platform with managed infrastructure and software stack), LumeMarkets™ (multi-asset class aggregation platform), Connect™
(global SDN for rapid provisioning of connectivity to counter-parties), and Compute™ (on-demand, co-located compute
services in key financial data centers).
Through kACE2, our analytics brand, we offer derivative price discovery, pricing analysis, risk management and
trading software used by approximately 227 client sites in over 23 countries. Our clients include mid-tier banks, financial
institutions and corporate clients. Our Gateway module links our client base with their counterparties, trading venues and
regulators, and provides automated order flow, straight through processing, data distribution and regulatory reporting.
Our post-trade Fenics NDF Match business is an advanced matching platform that helps clients offset their fixing risk
in non-deliverable forward portfolios and simplifies the complexities of managing large quantities of derivatives, to help
promote sustainable growth, lower systemic risk and improve resiliency in the industry.
Other Revenues
We earn other revenues from various sources, including underwriting and advisory fees, and the sources described
below.
Interest Income
We generate interest income primarily from the investment of our daily cash balances, interest earned on securities
owned and Reverse Repurchase Agreements. These investments and transactions are generally short-term in nature. We also
earn interest income from employee loans, and we earn dividend income on certain marketable securities.
89
Fees from Related Parties
We earn fees from related parties for technology services and software licenses and for certain administrative and
back-office services we provide to affiliates, particularly from Cantor. These administrative and back-office services include
office space, utilization of fixed assets, accounting services, operational support, human resources, legal services and
information technology.
Expenses
Compensation and Employee Benefits
The majority of our operating costs consist of cash and non-cash compensation expenses, which include base salaries,
broker bonuses based on broker production, guaranteed bonuses, other discretionary bonuses, and all related employee benefits
and taxes. Our employees consist of brokers, salespeople, executives and other administrative support. The majority of our
brokers receive a base salary and a formula bonus based primarily on a pool of brokers’ production for a particular product or
sales desk, as well as on the individual broker’s performance. Members of our sales force receive either a base salary or a draw
on commissions. Less experienced salespeople typically receive base salaries and bonuses.
In addition, we currently issue RSUs, as well as other forms of equity-based compensation, to provide liquidity to our
employees, to align the interests of our employees and management with those of common stockholders, to help motivate and
retain key employees, and to encourage a collaborative culture that drives cross-selling and revenue growth. These awards
contain extended vesting schedules which we consider to be highly retentive and that vary based upon compensation level and
role (typically three-to-seven-year ratable vesting), which in most cases are largely dependent upon continued service.
Prior to the Corporate Conversion, we issued limited partnership units, as well as other forms of unit-based
compensation, including grants of exchangeability of limited partnership units into shares of BGC Class A common stock and
grants of shares of our restricted stock, to motivate and retain key employees. These limited partnership units, which could be
redeemed at any time for zero, were subject to forfeiture if the non-compete, confidentiality or non-solicit provisions of the
BGC Holdings Limited Partnership Agreement related to these awards were violated, were also extremely retentive. In addition,
prior to the Corporate Conversion, we paid amounts due to a partner upon termination of service over a number of years in
order to ensure compliance with partner obligations
We also enter into various agreements with certain of our 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 our 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 believe that these loans incentivize and promote retention of our employees.
In addition, we also enter into deferred compensation agreements with employees providing services to us. The costs
associated with such plans are generally amortized over the period in which they vest.
See Note 18—“Compensation” to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on
Form 10-K for more information.
Other Operating Expenses
We have various other operating expenses. We incur leasing, equipment and maintenance expenses for our businesses
worldwide. We also incur selling and promotion expenses, which include entertainment, marketing and travel-related expenses.
We incur communication expenses for voice and data connections with our clients, clearing agents and general usage;
professional and consulting fees for legal, audit and other special projects; and interest expense related to short-term operational
funding needs, and notes payable and collateralized borrowings.
90
Primarily in the U.S., we pay fees to Cantor for performing certain administrative and other support services, including
charges for occupancy of office space, utilization of fixed assets and accounting, operations, human resources, legal services
and technology infrastructure support. Management believes that these charges are a reasonable reflection of the utilization of
services rendered. However, the expenses for these services are not necessarily indicative of the expenses that would have been
incurred if we had not obtained these services from Cantor. In addition, these charges may not reflect the costs of services we
may receive from Cantor in the future. We incur commissions and floor brokerage fees for clearing, brokerage and other
transactional expenses for clearing and settlement services. We also incur various other normal operating expenses.
Other Income (Losses), Net
Gain (Loss) on Divestiture and Sale of Investments
Gain (loss) on divestiture and sale of investments represents the gain or loss we recognize for the divestiture or sale of
our investments.
Gains (Losses) on Equity Method Investments
Gains (losses) on equity method investments represent our pro-rata share of the net gains (losses) on investments over
which we have significant influence but which we do not control.
Other Income (Loss)
Other Income (loss) is comprised of gains or losses related to fair value adjustments on investments carried under the
alternative method. Other Income (loss) also includes realized and unrealized gains or losses related to sales and mark-to-
market adjustments on Marketable securities and any related hedging transactions when applicable. Acquisition-related fair
value adjustments of contingent consideration and miscellaneous recoveries are also included in Other Income (loss).
Provision (Benefit) for Income Taxes
We incur income tax expenses or benefit based on the location, legal structure and jurisdictional taxing authorities of
each of our subsidiaries. Certain of the Company’s entities are taxed as U.S. partnerships and are subject to the UBT in New
York City. U.S. federal and state income tax liability or benefit related to the partnership income or loss, with the exception of
UBT, rests with the partners (see Note 2—“Limited Partnership Interests in BGC Holdings and Newmark Holdings” in Part II,
Item 8 of this Annual Report on Form 10-K for discussion of partnership interests), rather than the partnership entity. The
Company’s consolidated financial statements include U.S. federal, state and local income taxes on the Company’s allocable
share of the U.S. results of operations. Outside of the U.S., we operate principally through subsidiary corporations subject to
local income taxes.
REGULATORY ENVIRONMENT
See “Regulation” in Part I, Item 1 of this Annual Report on Form 10-K for information related to our regulatory
environment.
HIRING
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.
We have invested significantly through acquisitions and the hiring of new brokers, salespeople, managers, technology
professionals and other front-office personnel. The business climate for these acquisitions has been competitive, and it is
expected that these conditions will persist for the foreseeable future. We have been able to attract businesses and brokers,
salespeople, managers, technology professionals and other front-office personnel to our platform as we believe they recognize
that we have the scale, technology, experience and expertise to succeed.
As of December 31, 2024, our front-office headcount was 2,161 brokers, salespeople, managers, technology
professionals and other front-office personnel, up 2.7% from 2,104 a year ago. Compared to the prior year, average revenue per
front-office employee for the year ended December 31, 2024 increased by 6.3% to $1.0 million from $958 thousand.
91
FINANCIAL HIGHLIGHTS
Full year 2024 compared to full year 2023:
Income from operations before income taxes was $173.1 million compared to $57.7 million in the prior year period.
Total revenues increased $237.4 million, or 11.7%, to $2,262.8 million, largely due to overall growth of 11.2% in our
brokerage revenues:
•
ECS increased $97.0 million, or 25.1%,
•
Rates increased $74.6 million, or 12.2%;
•
FX increased $44.0 million, or 14.0%;
•
Credit increased $2.6 million, or 0.9%; and
•
Equities decreased $12.6 million, or 5.3%.
In addition, there was an increase of $10.8 million in Interest and dividend income, primarily driven by income earned
on bank deposits and money market funds. Further, there was an increase of $15.5 million in Data, network and post-trade
revenues, primarily driven by strong revenue growth due to FX co-location services and higher volume of contracts.
Total expenses increased $189.4 million, or 9.5%, to $2,182.3 million compared to the prior year period, primarily
driven by an increase in total compensation and employee benefits expenses of $144.9 million. The increase in compensation
and employee benefits was primarily due to higher commissionable revenues during the period. The $44.5 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 25, 2023, the BGC Group 8.000% Senior Notes issued October 6, 2023 as part of the Exchange Offer, the
BGC Group 6.600% Senior Notes issued June 10, 2024, and higher 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 and the BGC Group 3.750% Senior Notes and the BGC Partners
3.750% Senior Notes on October 1, 2024. Non-compensation expenses also increased year over year due to higher
Commissions and floor brokerage, Selling and promotion and Communication costs which were primarily driven by higher
revenues.
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RESULTS OF OPERATIONS
The following table sets forth our Consolidated Statements of Operations data expressed as a percentage of total
revenues for the periods indicated (in thousands):
Year Ended December 31,
2024
2023
2022
Actual
Results
Percentage
of Total
Revenues
Actual
Results
Percentage
of Total
Revenues
Actual
Results
Percentage
of Total
Revenues
Revenues:
Commissions
$
1,648,817
72.9 %
$
1,464,524
72.3 %
$
1,281,294
71.4 %
Principal transactions
389,429
17.2
368,100
18.2
365,507
20.3
Total brokerage revenues
2,038,246
90.1
1,832,624
90.5
1,646,801
91.7
Fees from related parties
20,728
0.9
15,968
0.8
14,734
0.8
Data, network and post-trade
126,963
5.6
111,470
5.5
96,389
5.4
Interest and dividend income
56,223
2.5
45,422
2.2
21,007
1.2
Other revenues
20,658
0.9
19,917
1.0
16,371
0.9
Total revenues
2,262,818
100.0
2,025,401
100.0
1,795,302
100.0
Expenses:
Compensation and employee benefits
1,123,747
49.7
992,603
49.1
853,165
47.5
Equity-based compensation and allocations of
net income to limited partnership units and
FPUs¹
369,143
16.3
355,378
17.5
251,071
14.0
Total compensation and employee benefits
1,492,890
66.0
1,347,981
66.6
1,104,236
61.5
Occupancy and equipment
169,238
7.5
162,743
8.0
157,491
8.8
Fees to related parties
32,529
1.5
32,649
1.6
25,662
1.4
Professional and consulting fees
64,949
2.9
60,398
3.0
68,775
3.8
Communications
120,624
5.3
114,143
5.6
108,096
6.0
Selling and promotion
70,466
3.1
61,884
3.1
49,215
2.7
Commissions and floor brokerage
70,798
3.1
61,523
3.0
58,277
3.3
Interest expense
91,075
4.0
77,231
3.8
57,932
3.2
Other expenses
69,694
3.1
74,278
3.7
87,431
4.9
Total expenses
2,182,263
96.5
1,992,830
98.4
1,717,115
95.6
Other income (losses), net:
Gains (losses) on divestitures and
sale of investments
38,769
1.7
—
0.0
(1,029)
(0.1)
Gains (losses) on equity method investments
8,430
0.4
9,152
0.5
10,920
0.7
Other income (loss)
45,389
2.0
15,986
0.7
9,373
0.5
Total other income (losses), net
92,588
4.1
25,138
1.2
19,264
1.1
Income (loss) from operations before income
taxes
173,143
7.6
57,709
2.8
97,451
5.5
Provision (benefit) for income taxes
49,915
2.2
18,934
0.9
38,584
2.2
Consolidated net income (loss)
$
123,228
5.4 %
$
38,775
1.9 %
$
58,867
3.3 %
Less: Net income (loss) from operations
attributable to noncontrolling interest in
subsidiaries
(3,760)
(0.2)
2,510
0.1
10,155
0.6
Net income (loss) available to common
stockholders
$
126,988
5.6 %
$
36,265
1.8 %
$
48,712
2.7 %
________________________
1
The components of Equity-based compensation and allocations of net income to limited partnership units and FPUs are as follows
(in thousands):
93
Year Ended December 31,
2024
2023
2022
Actual
Results
Percentage
of Total
Revenues
Actual
Results
Percentage
of Total
Revenues
Actual
Results
Percentage
of Total
Revenues
Issuance of common stock and grants of
exchangeability
$
184,667
8.1 % $
171,646
8.5 % $
147,480
8.2 %
Allocations of net income and dividend
equivalents
4,196
0.2
6,302
0.3
13,298
0.8
LPU amortization
—
—
40,878
2.0
73,734
4.1
RSU, RSU Tax Account, and restricted
stock amortization
180,280
8.0
136,552
6.7
16,559
0.9
Equity-based compensation and
allocations of net income to limited
partnership units and FPUs
$
369,143
16.3 % $
355,378
17.5 % $
251,071
14.0 %
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
Revenues
Brokerage Revenues
Total brokerage revenues increased by $205.6 million, or 11.2%, to $2,038.2 million for the year ended December 31,
2024 as compared to the year ended December 31, 2023. Commission revenues increased by $184.3 million, or 12.6%, to
$1,648.8 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. Principal
transactions revenues increased by $21.3 million, or 5.8%, to $389.4 million for the year ended December 31, 2024 as
compared to the year ended December 31, 2023.
Our brokerage revenues from ECS increased by $97.0 million, or 25.1%, to $483.2 million for the year ended
December 31, 2024, as compared to the year ended December 31, 2023, which was primarily driven by strong revenue growth
across our energy complex, environmental products, and the acquisition of Sage in the fourth quarter.
Our brokerage revenues from Rates increased by $74.6 million, or 12.2%, to $685.0 million for the year ended
December 31, 2024, as compared to the year ended December 31, 2023, reflecting higher volumes across the business including
interest rate derivative and listed products.
Our FX revenues increased by $44.0 million, or 14.0%, to $358.7 million for the year ended December 31, 2024, as
compared to the year ended December 31, 2023, which was primarily driven by emerging market products and higher FX
options volumes.
Our Credit revenues increased by $2.6 million, or 0.9%, to $287.4 million for the year ended December 31, 2024, as
compared to the year ended December 31, 2023, which was primarily driven by higher trading volumes across emerging market
and European credit products, offset by lower Asian credit activity.
Our brokerage revenues from Equities decreased by $12.6 million, or 5.3%, to $223.9 million for the year ended
December 31, 2024, as compared to the year ended December 31, 2023, primarily due to lower equity derivative trading
volumes, partially offset by higher European and U.S. cash equity activity.
Fees from Related Parties
Fees from related parties increased by $4.8 million, or 29.8% to $20.7 million for the year ended December 31, 2024
as compared to the year ended December 31, 2023, which was primarily driven by an increase in revenues in connection with
accounting, occupancy and legal services provided to Cantor.
Data, Network and Post-Trade
Data, network and post-trade revenues increased by $15.5 million, or 13.9%, to $127.0 million for the year ended
December 31, 2024 as compared to the year ended December 31, 2023. This increase was primarily driven by strong
subscription-based revenue growth across Lucera and Fenics Market Data, as a result of expanding both our client base and our
offerings. Revenue growth was partially offset by lower post-trade revenues due to the sale of Capitalab in the fourth quarter of
2024.
94
Interest and Dividend Income
Interest and dividend income increased by $10.8 million, or 23.8%, to $56.2 million for the year ended December 31,
2024 as compared to the year ended December 31, 2023. This was primarily driven by an increase in interest income on bank
deposits and money market funds, borrowings by Cantor under the BGC Credit Agreement, which were primarily driven by
changing interest rates and larger balances.
Other Revenues
Other revenues increased by $0.7 million, or 3.7% to $20.7 million for the year ended December 31, 2024 as compared
to the year ended December 31, 2023, primarily driven by an increase in dividend income on investments and consulting
income.
Expenses
Compensation and Employee Benefits
Compensation and employee benefits expense increased by $131.1 million, or 13.2%, to $1,123.7 million for the
year ended December 31, 2024 as compared to the year ended December 31, 2023. The primary driver of the increase was
higher commissionable revenues.
Equity-Based Compensation and Allocations of Net Income to Limited Partnership Units and FPUs
Equity-based compensation and allocations of net income to limited partnership units and FPUs increased by
$13.8 million, or 3.9%, to $369.1 million for the year ended December 31, 2024 as compared to the year ended December 31,
2023. For the year ended December 31, 2024, the Company incurred compensation charges of $27.1 million and $54.4 million,
respectively, for the acceleration of restricted stock awards and redemption of Newmark Holdings LPUs held by a former BGC
executive officer, who is still employed by the Company. The year over year increase was partially offset by the issuance of
common stock and grants of exchangeability, which included, for the year ended December 31, 2023, a $60.9 million charge for
the redemption of certain non-exchangeable limited partnership units in connection with the issuance of shares of BGC Class A
common stock and the accompanying tax payments related to the Corporate Conversion in the year ended December 31, 2023.
Occupancy and Equipment
Occupancy and equipment expense increased by $6.5 million, or 4.0%, to $169.2 million for the year ended
December 31, 2024 as compared to the year ended December 31, 2023. This increase was primarily driven by an increase in
software licenses and costs for consolidating BGC’s London office space.
Fees to Related Parties
Fees to related parties decreased by $0.1 million, or 0.4%, to $32.5 million for the year ended December 31, 2024 as
compared to the year ended December 31, 2023. Fees to related parties are allocations paid to Cantor for administrative and
support services, such as accounting, occupancy, and legal.
Professional and Consulting Fees
Professional and consulting fees increased by $4.6 million, or 7.5%, to $64.9 million for the year ended December 31,
2024 as compared to the year ended December 31, 2023, primarily driven by an increase in consulting and other professional
services and fees.
Communications
Communications expense increased by $6.5 million, or 5.7%, to $120.6 million for the year ended December 31, 2024
as compared to the year ended December 31, 2023, which was primarily driven by increases in various terminal and line service
costs across market data and communications.
95
Selling and Promotion
Selling and promotion expense increased by $8.6 million, or 13.9%, to $70.5 million for the year ended December 31,
2024 as compared to the year ended December 31, 2023, which was primarily driven by an increase in business related travel
and client entertainment.
Commissions and Floor Brokerage
Commissions and floor brokerage expense increased by $9.3 million, or 15.1%, to $70.8 million for the year ended
December 31, 2024 as compared to the year ended December 31, 2023, primarily driven by a higher number of trades in the
year ended December 31, 2024.
Interest Expense
Interest expense increased by $13.8 million, or 17.9%, to $91.1 million for the year ended December 31, 2024 as
compared to the year ended December 31, 2023, primarily driven by interest expense related to the BGC Partners 8.000%
Senior Notes issued on May 25, 2023 and the BGC Group 8.000% Senior Notes issued October 6, 2023 as part of the Exchange
Offer, the BGC Group 6.600% Senior Notes issued on June 10, 2024, and higher borrowings on both the Revolving Credit
Agreement and BGC Credit Agreement, partially offset by a decrease in interest expense related to the BGC Partners 3.750%
Senior Notes and BGC Group 3.750% Senior Notes due to repayment in full on October 1, 2024.
Other Expenses
Other expenses decreased by $4.6 million, or 6.2%, to $69.7 million for the year ended December 31, 2024 as
compared to the year ended December 31, 2023, which was primarily due to a decrease in reserves related to potential losses
associated with Russia’s Invasion of Ukraine and other provisions, partially offset by an increase in revaluation expense and
Charity Day contributions.
Other Income (Losses), Net
Gains (Losses) on Divestitures and Sale of Investments
Gains (losses) on divestitures and sale of investments increased by $38.8 million, to a gain of $38.8 million, for the
year ended December 31, 2024 as compared to no gain for the year ended December 31, 2023, primarily as a result of the sale
of Capitalab in October 2024.
Gains (Losses) on Equity Method Investments
Gains (losses) on equity method investments decreased by $0.7 million, or 7.9%, to a gain of $8.4 million due to the
results of our equity method investees, for the year ended December 31, 2024 as compared to a gain of $9.2 million for the
year ended December 31, 2023.
Other Income (Loss)
Other income (loss) increased by $29.4 million, or 183.9%, to $45.4 million for the year ended December 31, 2024 as
compared to the year ended December 31, 2023, primarily driven by a $36.6 million unrealized gain recorded related to fair
value adjustments on investments carried under the measurement alternative offset by a decrease in other recoveries.
Provision (Benefit) for Income Taxes
Provision (benefit) for income taxes increased by $31.0 million, or 163.6%, to $49.9 million for the year ended
December 31, 2024 as compared to the year ended December 31, 2023. The increase was primarily driven by an increase in
2024 pretax earnings, 2023 one-time benefit in revaluation of deferred tax balances due to ownership interest change, as a result
of the Corporate Conversion, and a change in the geographical and business mix of earnings, which can impact our
consolidated effective tax rate from period-to-period.
96
Net Income (Loss) Attributable to Noncontrolling Interest in Subsidiaries
Net income (loss) attributable to noncontrolling interest in subsidiaries decreased by $6.3 million, or 249.8%, to a loss
of $3.8 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023 as a result of losses
recognized by non-controlling interest compared to the prior year.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022
Revenues
Brokerage Revenues
Total brokerage revenues increased by $185.8 million, or 11.3%, to $1,832.6 million for the year ended December 31,
2023 as compared to the year ended December 31, 2022. Commission revenues increased by $183.2 million, or 14.3%, to
$1,464.5 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022. Principal
transactions revenues increased by $2.6 million, or 0.7%, to $368.1 million for the year ended December 31, 2023 as compared
to the year ended December 31, 2022.
Our brokerage revenues from Energy and Commodities increased by $94.5 million, or 32.4%, to $386.2 million for the
year ended December 31, 2023, as compared to the year ended December 31, 2022, which was primarily driven by strong
double-digit growth across our energy complex and our environmental products, as well as our shipping broking business.
Our brokerage revenues from Rates increased by $60.9 million, or 11.1%, to $610.5 million for the year ended
December 31, 2023, as compared to the year ended December 31, 2022, reflecting broad-based growth across interest rate
derivative and cash products.
Our FX revenues increased by $15.0 million, or 5.0%, to $314.7 million for the year ended December 31, 2023, as
compared to the year ended December 31, 2022, which was primarily driven by higher volumes across emerging markets
currencies.
Our Credit revenues increased by $13.3 million, or 4.9%, to $284.7 million for the year ended December 31, 2023, as
compared to the year ended December 31, 2022, which was primarily driven by higher volumes across emerging market and
European credit products, as well as credit derivatives.
Our brokerage revenues from Equities increased by $2.0 million, or 0.9%, to $236.5 million for the year ended
December 31, 2023, as compared to the year ended December 31, 2022, primarily driven by higher volumes across U.S. equity
derivatives.
Fees from Related Parties
Fees from related parties increased by $1.2 million, or 8.4% to $16.0 million for the year ended December 31, 2023 as
compared to the year ended December 31, 2022, which was primarily driven by an increase in revenues in connection with
services provided to Cantor.
Data, Network and Post-Trade
Data, network and post-trade revenues increased by $15.1 million, or 15.6%, to $111.5 million for the year ended
December 31, 2023 as compared to the year ended December 31, 2022. This increase was primarily driven by strong double-
digit revenue growth across Lucera, Fenics Market Data, and our Capitalab post-trade business, as a result of expanding both
our client base and our offerings.
Interest and Dividend Income
Interest and dividend income increased by $24.4 million, or 116.2%, to $45.4 million for the year ended December 31,
2023 as compared to the year ended December 31, 2022. This was primarily driven by an increase in interest income on bank
deposits and money market funds, which were primarily driven by changing interest rates and larger balances.
Other Revenues
Other revenues increased by $3.5 million, or 21.7%, to $19.9 million for the year ended December 31, 2023 as
compared to the year ended December 31, 2022, primarily driven by an increase in dividend income on investments and
consulting income.
97
Expenses
Compensation and Employee Benefits
Compensation and employee benefits expense increased by $139.4 million, or 16.3%, to $992.6 million for the
year ended December 31, 2023 as compared to the year ended December 31, 2022. The primary driver of the increase was
higher commission revenues on variable compensation.
Equity-Based Compensation and Allocations of Net Income to Limited Partnership Units and FPUs
Equity-based compensation and allocations of net income to limited partnership units and FPUs increased by
$104.3 million, or 41.5%, to $355.4 million for the year ended December 31, 2023 as compared to the year ended December 31,
2022. This was primarily driven by an increase in issuance of common stock and grants of exchangeability, which included a
$60.9 million charge for the redemption of certain non-exchangeable limited partnership units in connection with the issuance
of shares of BGC Class A common stock and the accompanying tax payments related to the Corporate Conversion. The
increase was also due to an increase in RSU, RSU Tax Account, and restricted stock amortization expenses, partially offset by a
cessation of LPU amortization expense, related to the Corporate Conversion.
Occupancy and Equipment
Occupancy and equipment expense increased by $5.3 million, or 3.3%, to $162.7 million for the year ended December
31, 2023 as compared to the year ended December 31, 2022. This increase was primarily driven by an increase in amortization
expense on developed software and other rent and occupancy expenses, partially offset by a decrease in fixed asset impairment.
Fees to Related Parties
Fees to related parties increased by $7.0 million, or 27.2%, to $32.6 million for the year ended December 31, 2023 as
compared to the year ended December 31, 2022. Fees to related parties are allocations paid to Cantor for administrative and
support services, such as accounting, occupancy, and legal.
Professional and Consulting Fees
Professional and consulting fees decreased by $8.4 million, or 12.2%, to $60.4 million for the year ended December
31, 2023 as compared to the year ended December 31, 2022, primarily driven by a decrease in consulting and other professional
fees.
Communications
Communications expense increased by $6.0 million, or 5.6%, to $114.1 million for the year ended December 31, 2023
as compared to the year ended December 31, 2022, which was primarily driven by increases in various terminal and line service
costs across market data and communications.
Selling and Promotion
Selling and promotion expense increased by $12.7 million, or 25.7%, to $61.9 million for the year ended December
31, 2023 as compared to the year ended December 31, 2022, which was primarily driven by an increase in business related
travel and client entertainment as COVID-19 restrictions have relaxed across many of the major geographies in which BGC
operates.
Commissions and Floor Brokerage
Commissions and floor brokerage expense increased by $3.2 million, or 5.6%, to $61.5 million for the year ended
December 31, 2023 as compared to the year ended December 31, 2022, primarily driven by a higher number of trades in the
year ended December 31, 2023 and an increase in commission expense.
98
Interest Expense
Interest expense increased by $19.3 million, or 33.3%, to $77.2 million for the year ended December 31, 2023 as
compared to the year ended December 31, 2022, primarily driven by interest expense related to the BGC Partners 8.000%
Senior Notes issued on May 25, 2023 and the BGC Group 8.000% Senior Notes issued October 6, 2023 as part of the Exchange
Offer, and higher interest expense related to borrowings on the Revolving Credit Agreement, partially offset by a decrease in
interest expense related to the BGC Partners 5.375% Senior Notes due to repayment in full on July 24, 2023.
Other Expenses
Other expenses decreased by $13.2 million, or 15.0%, to $74.3 million for the year ended December 31, 2023 as
compared to the year ended December 31, 2022, which was primarily due to a decrease in litigation settlements and reserves,
and a decrease in reserves related to potential losses associated with Russia’s Invasion of Ukraine, partially offset by an
increase in other provisions.
Other Income (Losses), Net
Gains (Losses) on Equity Method Investments
Gains (losses) on equity method investments decreased by $1.8 million, or 16.2%, to $9.2 million due to the results of
our equity method investees, for the year ended December 31, 2023 as compared to a gain of $10.9 million for the year ended
December 31, 2022.
Other Income (Loss)
Other income (loss) increased by $6.6 million, or 70.6%, to $16.0 million for the year ended December 31, 2023 as
compared to the year ended December 31, 2022, primarily driven by an increase related to mark-to-market movements on other
assets and an increase in other recoveries.
Provision (Benefit) for Income Taxes
Provision (benefit) for income taxes decreased by $19.7 million, or 50.9%, to $18.9 million for the year ended
December 31, 2023 as compared to the year ended December 31, 2022. The decrease was primarily driven by a decrease in
pretax earnings, a one-time benefit in revaluation of deferred tax balances due to ownership interest change, as a result of the
Corporate Conversion, and a change in the geographical and business mix of earnings, which can impact our consolidated
effective tax rate from period-to-period.
Net Income (Loss) Attributable to Noncontrolling Interest in Subsidiaries
Net income (loss) attributable to noncontrolling interest in subsidiaries decreased by $7.6 million, or 75.3%, to
$2.5 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022, which was primarily
driven by a decrease in earnings and no longer reflecting net income (loss) attributable to noncontrolling interest in subsidiaries
related to BGC Holdings as a result of the Corporate Conversion.
99
QUARTERLY RESULTS OF OPERATIONS
The following table sets forth our unaudited quarterly results of operations for the indicated periods (in thousands).
Results of any period are not necessarily indicative of results for a full year and may, in certain periods, be affected by seasonal
fluctuations in our business. Certain reclassifications have been made to prior period amounts to conform to the current period’s
presentation.
December
31, 2024
September
30, 2024
June 30,
2024
March 31,
2024
December
31, 2023
September
30, 2023
June 30,
2023
March 31,
2023
Revenues:
Commissions
$ 431,469
$ 407,095
$ 395,081
$ 415,172
$ 388,211
$ 350,305
$ 348,720
$ 377,288
Principal transactions
84,590
93,551
98,439
112,849
73,563
84,725
94,883
114,929
Fees from related parties
6,558
5,106
4,643
4,421
4,226
3,723
4,062
3,957
Data, network and post-trade
32,587
32,661
30,812
30,903
29,551
27,797
27,000
27,122
Interest and dividend income
12,370
16,944
17,145
9,764
16,586
10,150
13,371
5,315
Other revenues
4,758
5,754
4,641
5,505
4,623
5,994
5,044
4,256
Total revenues
572,332
561,111
550,761
578,614
516,760
482,694
493,080
532,867
Expenses:
Compensation and employee
benefits
289,608
271,307
271,990
290,842
248,915
233,087
243,387
267,214
Equity-based compensation and
allocations of net income to
limited partnership units and
FPUs
121,165
85,690
66,207
96,081
78,093
69,268
126,644
81,373
Total compensation and
employee benefits
410,773
356,997
338,197
386,923
327,008
302,355
370,031
348,587
Occupancy and equipment
42,278
45,195
40,959
40,806
41,062
40,028
40,488
41,165
Fees to related parties
9,054
8,251
8,009
7,215
9,172
7,046
7,991
8,440
Professional and consulting fees
17,701
20,184
12,805
14,259
16,144
13,734
14,819
15,701
Communications
30,028
30,416
30,172
30,008
29,169
29,222
27,813
27,939
Selling and promotion
18,605
17,376
17,714
16,771
17,009
14,939
15,320
14,616
Commissions and floor
brokerage
18,453
17,539
17,414
17,392
15,342
14,755
16,161
15,265
Interest expense
24,263
25,125
21,551
20,136
20,795
20,780
19,914
15,742
Other expenses
14,847
26,955
13,334
14,558
26,519
22,030
13,221
12,508
Total expenses
586,002
548,038
500,155
548,068
502,220
464,889
525,758
499,963
Other income (losses), net:
Gain (loss) on divestiture and
sale of investments
38,769
—
—
—
—
—
—
—
Gains (losses) on equity method
investments
1,536
2,360
2,744
1,790
2,584
2,094
2,412
2,062
Other income (loss)
537
4,276
1,814
38,762
14,765
3,967
(1,011)
(1,735)
Total other income (losses),
net
40,842
6,636
4,558
40,552
17,349
6,061
1,401
327
Income (loss) from operations
before income taxes
27,172
19,709
55,164
71,098
31,889
23,866
(31,277)
33,231
Provision (benefit) for income
taxes
3,873
5,996
17,989
22,057
10,626
5,314
(9,067)
12,061
Consolidated net income (loss) $ 23,299
$ 13,713
$ 37,175
$ 49,041
$ 21,263
$ 18,552
$ (22,210) $ 21,170
Less: Net income (loss)
attributable to noncontrolling
interest in subsidiaries
(1,904)
(1,034)
(653)
(169)
1,318
1,506
(2,506)
2,192
Net income (loss) available to
common stockholders
$ 25,203
$ 14,747
$ 37,828
$ 49,210
$ 19,945
$ 17,046
$ (19,704) $ 18,978
100
The table below details our brokerage revenues by product category for the indicated periods (dollar amounts in
thousands):
December
31, 2024
September
30, 2024
June 30,
2024
March 31,
2024
December
31, 2023
September
30, 2023
June 30,
2023
March 31,
2023
Brokerage revenue by
product:
Rates
$ 169,591
$ 174,313
$ 166,044
$ 175,085
$ 155,802
$ 145,703
$ 144,209
$ 164,737
FX
93,648
92,076
88,946
84,023
77,226
79,795
77,527
80,158
ECS
134,104
112,921
117,743
118,464
104,739
93,120
98,688
89,659
Credit
62,404
68,000
69,381
87,592
65,642
63,747
65,806
89,549
Equities
56,313
53,336
51,406
62,857
58,365
52,665
57,373
68,114
Total brokerage revenues
$ 516,060
$ 500,646
$ 493,520
$ 528,021
$ 461,774
$ 435,030
$ 443,603
$ 492,217
Brokerage revenue by
product (percentage):
Rates
32.9 %
34.7 %
33.6 %
33.2 %
33.8 %
33.5 %
32.5 %
33.5 %
FX
18.1
18.4
18.0
15.9
16.7
18.3
17.5
16.3
ECS
26.0
22.6
23.9
22.4
22.7
21.4
22.2
18.2
Credit
12.1
13.6
14.1
16.6
14.2
14.7
14.8
18.2
Equities
10.9
10.7
10.4
11.9
12.6
12.1
13.0
13.8
Total brokerage
revenues
100.0 %
100.0 %
100.0 %
100.0 %
100.0 %
100.0 %
100.0 %
100.0 %
Brokerage revenue by
type:
Voice/Hybrid
$ 406,545
$ 391,264
$ 387,101
$ 409,597
$ 360,536
$ 337,522
$ 345,478
$ 379,005
Fully Electronic1
109,515
109,382
106,419
118,424
101,238
97,508
98,125
113,212
Total brokerage
revenues
$ 516,060
$ 500,646
$ 493,520
$ 528,021
$ 461,774
$ 435,030
$ 443,603
$ 492,217
Brokerage revenue by
type (percentage):
Voice/Hybrid
78.8 %
78.2 %
78.4 %
77.6 %
78.1 %
77.6 %
77.9 %
77.0 %
Fully Electronic1
21.2
21.8
21.6
22.4
21.9
22.4
22.1
23.0
Total brokerage
revenues
100.0 %
100.0 %
100.0 %
100.0 %
100.0 %
100.0 %
100.0 %
100.0 %
____________________________
1
Includes Fenics Integrated.
LIQUIDITY AND CAPITAL RESOURCES
Balance Sheet
Our balance sheet and business model are not capital intensive. Our assets consist largely of Cash and cash
equivalents, collateralized and uncollateralized short-dated receivables and less liquid assets needed to support our business.
Longer-term capital (equity and notes payable) is held to support the less liquid assets and potential capital investment
opportunities. Total assets as of December 31, 2024 were $3.6 billion, an increase of 13.1% as compared to December 31,
2023. The increase in total assets was driven primarily by an increase in Cash and cash equivalents, Loans, forgivable loans and
other receivables from employees and partners, net, Goodwill, Other intangible assets, net and Accrued commissions and other
receivables, net. We maintain a significant portion of our assets in Cash and cash equivalents and Financial instruments owned,
at fair value, with Cash and cash equivalents as of December 31, 2024 of $711.6 million, and our Liquidity as of December 31,
2024 of $897.8 million. See “Liquidity Analysis” below for a further discussion of our Liquidity and a reconciliation to the
most comparable GAAP financial measure. Our Financial instruments owned, at fair value, were $186.2 million as of
December 31, 2024, compared to $45.8 million as of December 31, 2023.
As part of our cash management process, we may enter into Reverse Repurchase Agreements and other short-term
investments, some of which may be with Cantor. As of both December 31, 2024 and 2023, there were no Reverse Repurchase
Agreements outstanding. As of both December 31, 2024 and 2023, there were no Repurchase Agreements outstanding. As of
both December 31, 2024 and 2023, there were no securities loaned outstanding.
101
At December 31, 2019, the Company completed the calculation of the one-time transition tax on the deemed
repatriation of foreign subsidiaries’ earnings pursuant to the Tax Act and previously recorded a net cumulative tax expense of
$28.6 million, net of foreign tax credits. During the second quarter of 2024, the Company settled its 2017 audit with the Internal
Revenue Service which included the transition tax. The revised net cumulative transition tax expense is $25.3 million, net of
foreign tax credits, resulting in a net adjustment of the payable balance by $3.3 million. An installment election can be made to
pay the taxes over eight years with 40% paid in equal installments over the first five years and the remaining 60% to be paid in
installments of 15%, 20% and 25% in years six, seven and eight, respectively. The cumulative remaining balance as of
December 31, 2024 was $11.4 million.
Additionally, in August 2013, the Audit Committee authorized us to invest up to $350.0 million in an asset-backed
commercial paper program for which certain Cantor entities serve as placement agent and referral agent. The program issues
short-term notes to money market investors and is expected to be used from time to time as a liquidity management vehicle.
The notes are backed by assets of highly rated banks. We are entitled to invest in the program so long as the program meets
investment policy guidelines, including policies relating to ratings. Cantor will earn a spread between the rate it receives from
the short-term note issuer and the rate it pays to us on any investments in this program. This spread will be no greater than the
spread earned by Cantor for placement of any other commercial paper note in the program. As of both December 31, 2024 and
2023, we did not have any investments in the program.
Funding
Our funding base consists of longer-term capital (equity and notes payable), collateralized financings and shorter-term
liabilities incurred through the normal course of business. We have limited need for short-term unsecured funding in our
regulated entities for their brokerage business. Contingent liquidity needs are largely limited to potential cash collateral that
may be needed to meet clearing bank, clearinghouse, and exchange margins and/or to fund fails. Current cash and cash
equivalent balances exceed our potential normal course contingent liquidity needs. We believe that cash and cash equivalents in
and available to our largest regulated entities, inclusive of financing provided by clearing banks and cash segregated under
regulatory requirements, is adequate for potential cash demands of normal operations, such as margin or financing of fails. We
expect our operating activities going forward to generate adequate cash flows to fund normal operations, share repurchases, and
any dividends paid pursuant to our dividend policy. However, we continually evaluate opportunities for growth and to further
enhance our strategic position, including, among other things, acquisitions, strategic alliances and joint ventures potentially
involving all types and combinations of equity, debt and acquisition alternatives. As a result, we may need to raise additional
funds to:
•
increase the regulatory net capital necessary to support operations;
•
support continued growth in our businesses;
•
effect acquisitions, strategic alliances, joint ventures and other transactions;
•
develop new or enhanced products, services and markets; and
•
respond to competitive pressures.
Acquisitions and financial reporting obligations related thereto may impact our ability to access longer term capital
markets funding on a timely basis and may necessitate greater short-term borrowings in the interim. This may impact our credit
rating or our costs of borrowing. We may need to access short-term capital sources to meet business needs from time to time,
including, but not limited to, conducting operations; hiring or retaining brokers, salespeople, managers, technology
professionals and other front-office personnel; financing acquisitions; and providing liquidity, including in situations where we
may not be able to access the capital markets in a timely manner when desired by us. Accordingly, we cannot guarantee that we
will be able to obtain additional financing when needed on terms that are acceptable to us, if at all.
As discussed below, our Liquidity remained strong at $897.8 million as of December 31, 2024, which can be used for
share repurchases, dividends, acquisitions, new hires, tax payments, ordinary movements in working capital, and our continued
investment in Fenics Growth Platforms. During the twelve months ended December 31, 2024, we repurchased 31.6 million
shares of BGC Class A common stock for aggregate consideration of $261.9 million, representing a weighted-average price per
share of $8.30.
As of February 27, 2025, we have repurchased an additional 2.4 million shares of BGC Class A common stock during
the first quarter for aggregate consideration of $23.0 million, representing a weighted-average price per share of $9.45.
On February 14, 2025, our Board declared a $0.02 dividend for the fourth quarter of 2024. Our current capital
allocation priorities are to return capital to stockholders and to continue investing in the growth of our business.
Between April 23, 2024 and April 24, 2024, the FMX Equity Partners contributed $171.7 million into FMX.
102
Notes Payable and Other Borrowings
Unsecured Senior Revolving Credit Agreement
On March 12, 2024, the Company repaid in full the $240.0 million of borrowings then-outstanding under the
Revolving Credit Agreement, which had been borrowed in 2023. On April 1, 2024, we 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. On June 10, 2024, we
repaid in full the $275.0 million of borrowings outstanding under the Revolving Credit Agreement. On October 1, 2024, we
borrowed $200.0 million under the Revolving Credit Agreement and used the proceeds from such borrowing, along with cash
on hand, to repay the principal and interest on the $255.5 million aggregate outstanding principal amount of BGC Group
3.750% Senior Notes and $44.5 million aggregate outstanding principal amount of BGC Partners 3.750% Senior Notes.
On April 26, 2024, the Company amended and restated the Revolving Credit Agreement, to, among other things,
extend the maturity date to April 26, 2027, and provide the Company with the right to increase the facility up to $475.0 million,
subject to certain conditions being met. The borrowing rates and financial covenants under the amended and restated Revolving
Credit Agreement were substantially unchanged.
On December 6, 2024, the Company amended the amended and restated Revolving Credit Agreement to increase the
size of the credit facility to $700.0 million. The borrowing rates and financial covenants under the amended and restated
Revolving Credit Agreement, as amended, are unchanged.
As of December 31, 2024 and 2023, there were $200.0 million and $240.0 million, respectively, of borrowings
outstanding under the Revolving Credit Agreement. During the years ended December 31, 2024 and 2023, the Company
recorded interest expense related to the Revolving Credit Agreement of $12.2 million and $4.4 million, respectively. BGC
Partners did not record any interest expense related to the Revolving Credit Agreement for the year ended December 31, 2024.
BGC Partners recorded interest expense related to the Revolving Credit Agreement of $6.9 million and $2.3 million for the
years ended December 31, 2023 and 2022, respectively.
See Note 17—“Notes Payable and Other Borrowings” to our Consolidated Financial Statements in Part II, Item 8 of
this Annual Report on Form 10-K for information regarding our Revolving Credit Agreement.
BGC Credit Agreement with Cantor
On March 8, 2024, the Company entered into a second amendment to the BGC Credit Agreement which amends the
BGC Credit Agreement to provide that the parties and their respective subsidiaries may borrow up to an aggregate principal
amount of $400.0 million from each other from time to time at an interest rate equal to 25 basis points less than the interest rate
on the respective borrower’s short-term borrowings rate then in effect. On June 7, 2024, the Company entered into a third
amendment to the BGC Credit Agreement. The third amendment provides that the parties and their respective subsidiaries may
borrow up to the total available aggregate principal amount of $400.0 million pursuant to a new category of “FICC-GSD
Margin Loans.” All other terms of the BGC Credit Agreement, including terms applicable to loans made thereunder that are not
FICC-GSD Margin Loans, remain the same.
On March 12, 2024, the Company borrowed $275.0 million from Cantor under the BGC Credit Agreement and used
the proceeds from such borrowing to repay the principal and interest related to all of the $240.0 million of borrowings
outstanding under the Revolving Credit Agreement. On April 1, 2024, we repaid in full the principal and interest related to the
$275.0 million of borrowings outstanding under the BGC Credit Agreement. As of December 31, 2024, there were no
borrowings by the Company outstanding under the BGC Credit Agreement. The Company recorded $1.1 million of interest
expense related to the BGC Credit Agreement for the year ended December 31, 2024. As of December 31, 2023, there were no
borrowings by BGC Partners or Cantor outstanding under this agreement. The Company did not record any interest expense
related to the BGC Credit Agreement for the years ended December 31, 2023 and 2022. See “Liquidity and Capital Resources
—Balance Sheet” herein, Note 13—“Related Party Transactions,” and Note 17—“Notes Payable and Other Borrowings” to our
Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding our BGC
Credit Agreement with Cantor.
103
On June 10, 2024, Cantor borrowed $180.0 million from the Company under the BGC Credit Agreement. On July 31,
2024, Cantor made a partial repayment of $18.0 million to the Company of the $180.0 million borrowed from the Company
under the BGC Credit Agreement. On September 25, 2024, Cantor made an additional partial repayment of $12.0 million to the
Company of the initial $180.0 million borrowed from the Company under the BGC Credit Agreement. On October 1, 2024,
Cantor repaid in full the remaining $150.0 million of borrowings outstanding to the Company under the BGC Credit
Agreement, plus accrued interest; therefore, there were no borrowings outstanding from the Company under the BGC Credit
Agreement as of December 31, 2024. The Company recorded interest income related to the BGC Credit Agreement of
$3.8 million for the year ended December 31, 2024. The Company did not record any interest income related to the BGC Credit
Agreement for the years ended December 31, 2023 and 2022, respectively. See Note 13—“Related Party Transactions” and
Note 17—“Notes Payable and Other Borrowings” to our Consolidated Financial Statements in Part II, Item 8 of this Annual
Report on Form 10-K for information regarding our BGC Credit Agreement with Cantor.
5.375% Senior Notes due July 24, 2023
On July 24, 2018, BGC Partners issued an aggregate of $450.0 million principal amount of BGC Partners 5.375%
Senior Notes. The BGC Partners 5.375% Senior Notes were general senior unsecured obligations of BGC Partners. On July 24,
2023, BGC Partners repaid the $450.0 million principal amount plus accrued interest on the BGC Partners 5.375% Senior Notes
using the proceeds from the issuance of the BGC Partners 8.000% Senior Notes, cash on hand and borrowings under the
Revolving Credit Agreement. BGC Partners recorded interest expense related to the BGC Partners 5.375% Senior Notes of
$14.5 million and $25.5 million during the years ended December 31, 2023 and 2022, respectively.
See Note 13—“Related Party Transactions” and Note 17—“Notes Payable and Other Borrowings” to our Consolidated
Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding our 5.375% Senior Notes.
Exchange Offer and Market-Making Registration Statement
On October 6, 2023, we completed the Exchange Offer, in which we exchanged BGC Partners Notes for new notes
issued by BGC Group with the same respective interest rates, maturity dates and substantially identical terms as the tendered
notes, and cash. In connection with the Exchange Offer, and on behalf of BGC Partners, we also solicited consents from (i)
holders of the BGC Partners Notes to certain proposed amendments to the indenture and supplemental indentures pursuant to
which such BGC Partners Notes were issued to, among other things, eliminate certain affirmative and restrictive covenants and
events of default, including the “Change of Control” provisions, which had applied to each series of the BGC Partners Notes,
and (ii) holders of the BGC Partners 8.000% Senior Notes to amend the registration rights agreement relating thereto to
terminate such agreement.
On October 19, 2023, we filed a resale registration statement on Form S-3 pursuant to which CF&Co could make
offers and sales of the BGC Group Notes in connection with ongoing market-making transactions which could occur from time
to time. Market-making transactions pursuant to this resale registration statement were terminated on November 8, 2024 in
connection with the filing of the replacement market-making resale registration statement described under “— 6.600% Senior
Notes due June 10, 2029” below.
See Note 17—“Notes Payable and Other Borrowings” to our Consolidated Financial Statements in Part II, Item 8 of
this Annual Report on Form 10-K for information regarding our Exchange Offer.
3.750% Senior Notes due October 1, 2024
On October 11, 2019, BGC Partners filed a Registration Statement on Form S-4, which was declared effective by the
SEC on October 24, 2019. On October 28, 2019, BGC Partners launched an exchange offer in which holders of the BGC
Partners 3.750% Senior Notes, issued in a private placement on September 27, 2019, could exchange such notes for new
registered notes with substantially identical terms. The exchange offer expired on December 9, 2019, and the tendered BGC
Partners 3.750% Senior Notes were exchanged for new registered notes with substantially identical terms.
The BGC Group 3.750% Senior Notes and the BGC Partners 3.750% Senior Notes matured on October 1, 2024. On
October 1, 2024, the Company repaid the $255.5 million aggregate principal amount outstanding plus accrued interest on the
BGC Group 3.750% Senior Notes and the $44.5 million aggregate principal amount outstanding plus accrued interest on the
BGC Partners 3.750% Senior Notes using cash on hand and borrowings under the Revolving Credit Agreement.
The outstanding aggregate principal amount of BGC Group 3.750% Senior Notes, which are general senior unsecured
obligations of BGC Group, was $255.5 million as of December 31, 2023. BGC Group recorded interest expense related to the
BGC Group 3.750% Senior Notes of $7.9 million and $2.6 million and during the years ended December 31, 2024 and 2023,
respectively. BGC Group did not record interest expense related to the BGC Group 3.750% Senior Notes for the year ended
December 31, 2022.
104
The outstanding aggregate principal amount of BGC Partners 3.750% Senior Notes, which are general senior
unsecured obligations of BGC Partners, was $44.5 million, as of December 31, 2023. BGC Partners recorded interest expense
related to the BGC Partners 3.750% Senior Notes of $1.3 million, $9.5 million and $12.1 million during the years ended
December 31, 2024, 2023 and 2022, respectively.
See Note 13—“Related Party Transactions,” Note 17—“Notes Payable and Other Borrowings,” to our Consolidated
Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding our 3.750% Senior Notes.
4.375% Senior Notes due December 15, 2025
On August 28, 2020, BGC Partners filed a Registration Statement on Form S-4, which was declared effective by the
SEC on September 8, 2020. On September 9, 2020, BGC Partners launched an exchange offer in which holders of the BGC
Partners 4.375% Senior Notes, issued in a private placement on July 10, 2020, could exchange such notes for new registered
notes with substantially identical terms. The exchange offer expired on October 14, 2020, and the tendered BGC Partners
4.375% Senior Notes were exchanged for new registered notes with substantially identical terms.
The outstanding aggregate principal amount of BGC Group 4.375% Senior Notes, which are general senior unsecured
obligations of BGC Group, was $288.2 million as of both December 31, 2024 and 2023. BGC Group recorded interest expense
related to the BGC Group 4.375% Senior Notes of $13.3 million and $3.3 million during the years ended December 31, 2024
and 2023, respectively. BGC Group did not record interest expense related to the BGC Group 4.375% Senior Notes for the year
ended December 31, 2022.
The outstanding aggregate principal amount of BGC Partners 4.375% Senior Notes, which are general senior
unsecured obligations of BGC Partners, was $11.8 million as of both December 31, 2024 and 2023. BGC Partners recorded
interest expense related to the BGC Partners 4.375% Senior Notes of $0.5 million, $10.5 million and $13.8 million during the
years ended December 31, 2024, 2023 and 2022, respectively.
See Note 13—“Related Party Transactions,” Note 17—“Notes Payable and Other Borrowings,” to our Consolidated
Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding our 4.375% Senior Notes.
8.000% Senior Notes due May 25, 2028
The outstanding aggregate principal amount of BGC Group 8.000% Senior Notes, which are general senior unsecured
obligations of BGC Group, was $347.2 million as of both December 31, 2024 and 2023. BGC Group recorded interest expense
related to the BGC Group 8.000% Senior Notes of $28.5 million and $7.1 million during the years ended December 31, 2024
and 2023, respectively. BGC Group did not record interest expense related to the BGC Group 8.000% Senior Notes for the year
ended December 31, 2022.
On August 21, 2024, the Company repurchased $0.5 million of outstanding aggregate principal amount, plus accrued
interest, of BGC Partners 8.000% Senior Notes for $0.5 million. The outstanding aggregate principal amount of BGC Partners
8.000% Senior Notes, which are general senior unsecured obligations of BGC Partners, was $2.3 million and $2.7 million as of
December 31, 2024 and 2023, respectively. BGC Partners recorded interest expense related to the BGC Partners 8.000% Senior
Notes of $0.2 million and $10.0 million, during the years ended December 31, 2024 and 2023, respectively. BGC Partners did
not record interest expense related to the BGC Partners 8.000% Senior Notes for the year ended December 31, 2022.
See Note 13—“Related Party Transactions,” Note 17—“Notes Payable and Other Borrowings,” to our Consolidated
Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding our 8.000% Senior Notes.
6.600% Senior Notes due June 10, 2029
On August 8, 2024, the Company filed a Registration Statement on Form S-4, which was declared effective by the
SEC on August 23, 2024. On August 26, 2024, the Company launched an exchange offer in which holders of the BGC Group
6.600% Senior Notes, issued in a private placement on June 10, 2024, could exchange such notes for new registered notes with
substantially identical terms. The exchange offer expired on September 27, 2024, and the tendered BGC Group 6.600% Senior
Notes were exchanged for new registered notes with substantially identical terms. On November 8, 2024, the Company filed a
resale registration statement on Form S-3 pursuant to which CF&Co may make offers and sales of the BGC Group 4.375%
Senior Notes, BGC Group 8.000% Senior Notes and BGC Group 6.600% Senior Notes in connection with ongoing market
making transactions which may occur from time to time. Such market-making transactions in these securities may occur in the
open market or may be privately negotiated at prevailing market prices at the time of resale or at related or negotiated prices.
Neither CF&Co, nor any other of our affiliates, has any obligation to make a market in our securities, and CF&Co or any such
other affiliate may discontinue market-making activities at any time without notice.
105
The outstanding aggregate principal amount of BGC Group 6.600% Senior Notes, which are general senior unsecured
obligations of BGC Group, was $500.0 million as of December 31, 2024. There were no BGC Group 6.600% Senior Notes
outstanding as of December 31, 2023. BGC Group recorded interest expense related to the BGC Group 6.600% Senior Notes of
$18.9 million during the year ended December 31, 2024. BGC Group did not record interest expense related to the BGC Group
6.600% Senior Notes for the years ended December 31, 2023 and 2022.
See Note 13—“Related Party Transactions,” and Note 17—“Notes Payable and Other Borrowings,” to our
Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding our 6.600%
Senior Notes.
Collateralized Borrowing
On April 8, 2019, BGC Partners entered into a $15.0 million secured loan arrangement, under which it pledged certain
fixed assets as security for a loan. This arrangement incurred interest at a fixed rate of 3.77% and matured on April 8, 2023, at
which point the loan was repaid in full; therefore, there were no borrowings as of December 31, 2024 and 2023. BGC Partners
did not record any interest expense related to this secured loan arrangement for the year ended December 31, 2024. BGC
Partners recorded interest expense related to this secured loan arrangement of nil and $0.1 million for the years ended
December 31, 2023 and 2022, respectively.
On April 19, 2019, BGC Partners entered into a $10.0 million secured loan arrangement, under which it pledged
certain fixed assets as security for a loan. This arrangement incurred interest at a fixed rate of 3.89% and matured on April 19,
2023, at which point the loan was repaid in full; therefore, there were no borrowings as of December 31, 2024 and 2023. BGC
Partners did not record any interest expense related to this secured loan arrangement for the year ended December 31, 2024.
BGC Partners recorded interest expense related to this secured loan arrangement of nil and $0.1 million for the years ended
December 31, 2023 and 2022, respectively.
Weighted-average Interest Rate
For the years ended December 31, 2024 and 2023, the weighted-average interest rate of our total Notes payable and
other borrowings, which include our Revolving Credit Agreement, Company Debt Securities, BGC Credit Agreement and
collateralized borrowings, was 5.50% and 5.82%, respectively.
See Note 17—“Notes Payable and Other Borrowings” to our Consolidated Financial Statements in Part II, Item 8 of
this Annual Report on Form 10-K for information regarding our collateralized borrowings.
Short-term Borrowings
On August 22, 2017, BGC Partners entered into a committed unsecured loan agreement with Itau Unibanco S.A. The
agreement provided for short-term loans of up to $4.0 million (BRL 20.0 million). Borrowings under this agreement bore
interest at the Brazilian Interbank offering rate plus 3.20%. During June 2023, the borrowings under this agreement were repaid
in full, and the loan was terminated. As of both December 31, 2024 and 2023, there were no borrowings outstanding under the
agreement. BGC Partners did not record any interest expense related to the agreement for the year ended December 31, 2024.
BGC Partners recorded interest expense related to the agreement of $0.2 million and $0.3 million for the years ended
December 31, 2023 and 2022, respectively.
On August 23, 2017, BGC Partners entered into a committed unsecured credit agreement with Itau Unibanco S.A. The
agreement provided for an intra-day overdraft credit line up to $8.1 million (BRL 50.0 million). On August 20, 2021, the
agreement was renegotiated, increasing the credit line to $9.7 million (BRL 60.0 million). On May 22, 2023 the agreement was
renegotiated, increasing the credit line to $11.3 million (BRL 70.0 million). The maturity date of the agreement is renewable
every 90 days. This agreement bears a fee of 1.32% per year. As of December 31, 2024 and 2023, there were no borrowings
outstanding under this agreement. The bank fees related to the agreement were $0.2 million, $0.2 million and $0.2 million for
the years ended December 31, 2024, 2023 and 2022, respectively.
On January 25, 2021, BGC Partners entered into a committed unsecured loan agreement with Banco Daycoval S.A.,
which provided for short-term loans of up to $2.0 million (BRL 10.0 million) and was renegotiated on June 1, 2021. The
amended agreement provided for short-term loans of up to $4.0 million (BRL 20.0 million). During September 2022, the
borrowings under this agreement were repaid in full, and the loan was terminated on September 27, 2022.
See Note 17—“Notes Payable and Other Borrowings” to our Consolidated Financial Statements in Part II, Item 8 of
this Annual Report on Form 10-K for information regarding our short-term borrowings.
106
DEBT REPURCHASE PROGRAM
See Note 13—“Related Party Transactions” to our Consolidated Financial Statements in Part II, Item 8 of this Annual
Report on Form 10-K under the heading “CEO Program and Other Transactions with CF&Co” for information about our
Board-authorized debt repurchase program.
LIQUIDITY ANALYSIS
We consider our Liquidity, a non-GAAP financial measure, to be comprised of the sum of Cash and cash equivalents,
Reverse Repurchase Agreements, and Financial instruments owned, at fair value, less Securities loaned and Repurchase
Agreements. We consider liquidity to be an important metric for determining the amount of cash that is available or that could
be readily available to the Company on short notice. The discussion below describes the key components of our Liquidity
analysis. We believe our cash, cash flows, and financing arrangements are sufficient to support our cash requirements for the
next twelve months and beyond.
We consider the following in analyzing changes in our Liquidity:
• Our Liquidity analysis includes a comparison of our Consolidated net income (loss) adjusted for certain non-
cash items (e.g., Equity-based compensation) as presented on the cash flow statement. Dividends are
payments made to our holders of common shares and are related to earnings from prior periods. These timing
differences will impact our cash flows in a given period;
• Our investing and funding activities represent a combination of our capital raising activities, including short-
term borrowings and repayments, BGC Class A common stock repurchases and, previously, partnership unit
redemptions, purchases and sales of securities, dispositions, and other investments (e.g., acquisitions,
forgivable loans to new brokers and capital expenditures—all net of depreciation and amortization);
• Our securities settlement activities primarily represent deposits with clearing organizations;
• Other changes in working capital represent changes primarily in receivables and payables and accrued
liabilities that impact our Liquidity; and
• Changes in Reverse Repurchase Agreements and Financial instruments owned, at fair value may result from
additional cash investments or sales, which will be offset by a corresponding change in Cash and cash
equivalents and, accordingly, will not result in a change in our Liquidity. Conversely, changes in the market
value of such securities are reflected in our earnings or other comprehensive income (loss) and will result in
changes in our Liquidity.
Discussion of the year ended December 31, 2024
The table below presents our Liquidity Analysis as of December 31, 2024 and December 31, 2023:
December 31, 2024
December 31, 2023
(in thousands)
Cash and cash equivalents
$
711,584 $
655,641
Financial instruments owned, at fair value
186,197
45,792
Total
$
897,781 $
701,433
The $196.3 million increase in our Liquidity position from $701.4 million as of December 31, 2023 to $897.8 million
as of December 31, 2024 was primarily related to a $140.4 million increase in Financial instruments owned, at fair value due to
the Company purchasing treasury bills that mature on April 8, 2025. Furthermore, Cash and cash equivalents increased by
$55.9 million. The Company received $171.7 million of contributions from the FMX Equity Partners, issued $500.0 million
principal amount of BGC Group 6.600% Senior Notes and received $45.7 million of proceeds from the sale of Capitalab. The
cash increases were partially offset by the repayment of the combined $300.0 million aggregate principal amount of, plus
accrued interest on, the BGC Group 3.750% Senior Notes and BGC Partners 3.750% Senior Notes, share repurchases of $262.2
million, cash used in the acquisition of Sage, net of cash acquired, of $64.2 million and the payment of dividends to
stockholders of $34.1 million.
107
Discussion of the year ended December 31, 2023
The table below presents our Liquidity Analysis as of December 31, 2023 and December 31, 2022:
December 31, 2023
December 31, 2022
(in thousands)
Cash and cash equivalents
$
655,641 $
484,989
Financial instruments owned, at fair value
45,792
39,319
Total
$
701,433 $
524,308
The $177.1 million increase in our Liquidity position from $524.3 million as of December 31, 2022 to $701.4 million
as of December 31, 2023 was primarily related to the issuance of $350.0 million principal amount of BGC Partners 8.000%
Senior Notes, $240.0 million of borrowings from the Revolving Credit Agreement, and cash flow from operations, partially
offset by the repayment of the $450.0 million principal amount of, plus accrued interest on, the BGC Partners 5.375% Senior
Notes, ordinary movements in working capital, the acquisitions of Trident, ContiCap, as well as Open Energy Group, tax
payments, dividends and distributions, share repurchases, and our continued investments in Fenics Growth Platforms.
CREDIT RATINGS
As of December 31, 2024, our public long-term credit ratings and associated outlooks were as follows:
Rating
Outlook
Fitch Ratings Inc.
BBB-
Stable
Standard & Poor’s
BBB-
Stable
Japan Credit Rating Agency, Ltd.
BBB+
Stable
Kroll Bond Rating Agency
BBB
Stable
Credit ratings and associated outlooks are influenced by a number of factors, including, but not limited to: operating
environment, earnings and profitability trends, the prudence of funding and liquidity management practices, balance sheet size/
composition and resulting leverage, cash flow coverage of interest, composition and size of the capital base, available liquidity,
outstanding borrowing levels and the firm’s competitive position in the industry. A credit rating and/or the associated outlook
can be revised upward or downward at any time by a rating agency if such rating agency decides that circumstances warrant
such a change. Any downgrade in our credit ratings and/or the associated outlooks could adversely affect the availability of debt
financing on terms acceptable to us, as well as the cost and other terms upon which we are able to obtain any such financing. In
addition, credit ratings and associated outlooks may be important to customers or counterparties when we compete in certain
markets and when we seek to engage in certain transactions. In connection with certain agreements, we may be required to
provide additional collateral in the event of a credit ratings downgrade.
CLEARING CAPITAL
In November 2008, we entered into the Clearing Capital Agreement with Cantor to clear U.S. Treasury and U.S.
government agency securities transactions on our behalf. In June 2020, the Clearing Capital Agreement was amended to cover
Cantor providing clearing services in all eligible financial products to us and not just U.S. Treasury and U.S. government
agency securities. Pursuant to the terms of this agreement, so long as Cantor is providing clearing services to us, Cantor shall be
entitled to request from us cash or other collateral acceptable to Cantor in the amount reasonably requested by Cantor under the
Clearing Capital Agreement or Cantor will post cash or other collateral on our behalf for a commercially reasonable charge. On
June 7, 2024, we amended the Clearing Capital Agreement to modify the rate charged by Cantor for posting margin in respect
of trades cleared on behalf of the Company to a rate equal to Cantor’s cost of funding such margin through a draw on a third
party credit facility provided to Cantor for which the use of proceeds is to finance clearinghouse margin deposits and related
transactions. The Clearing Capital Agreement amendment also assigned BGC Partners’ rights and obligations thereunder to
BGC Group.
During the years ended December 31, 2024, 2023 and 2022, the Company was charged $4.4 million, $2.2 million and
$0.8 million, respectively, by Cantor for the cash or other collateral posted by Cantor on BGC’s behalf. Cantor held cash or
other property from the Company as collateral as of December 31, 2024 at a fair value of $124.6 million.
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REGULATORY REQUIREMENTS
Our Liquidity and available cash resources are restricted by regulatory requirements applicable to our operating
subsidiaries. Many of these regulators, including U.S. and non-U.S. government agencies and self-regulatory organizations, as
well as state securities commissions in the U.S., are empowered to conduct administrative proceedings that can result in civil
and criminal judgments, settlements, fines, penalties, injunctions, enhanced oversight, remediation, or other relief.
In addition, self-regulatory organizations, such as FINRA and the NFA, along with statutory bodies such as the FCA,
the SEC, and the CFTC, require strict compliance with their rules and regulations. The requirements imposed by regulators are
designed to ensure the integrity of the financial markets and to protect customers and other third parties who deal with broker-
dealers and are not designed to specifically protect stockholders. These regulations often serve to limit our activities, including
through net capital, customer protection and market conduct requirements.
The final phase of Basel III (unofficially called “Basel IV”) is a global prudential regulatory standard designed to
make banks more resilient and increase confidence in the banking system. Its wide scope includes reviewing market, credit and
operational risk along with targeted changes to leverage ratios. Basel IV includes updates to the calculation of bank capital
requirements with the aim of making outcomes more comparable across banks globally.
The FCA is the relevant statutory regulator in the U.K. The FCA’s objectives are to protect customers, maintain the
stability of the financial services industry and promote competition between financial services providers. It has broad rule-
making, investigative and enforcement powers derived from the Financial Services and Markets Act 2000 and subsequent and
derivative legislation and regulations.
In January 2022, the FCA introduced a new Internal Capital and Risk Assessment (ICARA) process as a replacement
for the Internal Capital Adequacy Assessment Process (ICAAP). The ICARA process incorporates business model assessment,
forecasting and stress testing, recovery planning and wind-down planning. All firms were required to submit their proposed
ICARA documentation by March 31, 2023, and then review its adequacy on an annual basis thereafter, after which the FCA
provide feedback that may require further documentation and may lead to a change in capital requirements. The adoption of
these proposed rules could restrict the ability of our large bank and broker-dealer customers to operate trading businesses and to
maintain current capital market exposures under the present structure of their balance sheets, and will cause these entities to
need to raise additional capital in order to stay active in our marketplaces.
In July 2023, the FCA further ensured that Consumer Duty is at the heart of every financial institution by rolling out
Principle 12 specifically related to Consumer Duty, where a firm must act to deliver good outcomes for retail customers. This
initiative is poised to redefine the relationship between consumers and financial institutions, where the FCA has demanded
financial institutions foster a culture of trust, transparency, and accountability. Under Consumer Duty, the onus has shifted to
financial institutions to prioritize their customers’ best interest in every consideration made by the financial institution (the
entire customer life cycle) including demonstration and evidence that the product/service/action is in the best interest of the
customer. Although not immediately applicable to our business as we do not conduct business directly with the retail sector, we
are conscious of the impact that this will have on underlying clients who have obligations to fulfil. In so doing, they may
require our firm to provide additional reporting in order to help them evidence their obligations.
In addition, the majority of our other foreign subsidiaries are subject to similar regulation by the relevant authorities in
the countries in which they do business. Certain other of our foreign subsidiaries are required to maintain non-U.S. net capital
requirements. For example, in Hong Kong, BGC Securities (Hong Kong), LLC, GFI (HK) Securities LLC and Sunrise Brokers
(Hong Kong) Limited are regulated by the Securities and Futures Commission. BGC Capital Markets (Hong Kong), Limited
and GFI (HK) Brokers Ltd are regulated by The Hong Kong Monetary Authority. All are subject to Hong Kong net capital
requirements. In France, Aurel BGC and BGC France Holdings; in Australia, BGC Partners (Australia) Pty Limited and Fixed
Income Solutions Pty Limited; in Japan, BGC Shoken Kaisha Limited’s Tokyo branch; in Singapore, BGC Partners (Singapore)
Limited, GFI Group Pte Ltd and Ginga Global Markets Pte Ltd; in Korea, BGC Capital Markets & Foreign Exchange Broker
(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.
These subsidiaries may also be prohibited from repaying the borrowings of their parents or affiliates, paying cash
dividends, making loans to their parent or affiliates or otherwise entering into transactions, in each case, which may result in a
significant reduction in their regulatory capital position without prior notification or approval from their principal regulator. See
Note 21—“Regulatory Requirements” to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on
Form 10-K for further details on our regulatory requirements.
As of December 31, 2024, $751.0 million of net assets were held by regulated subsidiaries. As of December 31, 2024,
these subsidiaries had aggregate regulatory net capital, as defined, in excess of the aggregate regulatory requirements, as
defined, of $432.3 million.
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See “Regulation” included in Part I, Item 1 of this Annual Report on Form 10-K for additional information related to
our regulatory environment.
EQUITY
As of December 31, 2024, we have 374.3 million shares of BGC Class A common stock and 109.5 million shares of
BGC Class B common stock outstanding. Additional disclosures regarding our accounting for stock transactions and unit
redemptions are provided in Note 7—“Stock Transactions and Unit Redemptions” to the Company’s consolidated financial
statements included in Part II, Item 8 of this Annual Report on Form 10-K.
The weighted-average share counts, including securities that were anti-dilutive for our earnings per share calculations,
for the three months and year ended December 31, 2024 were as follows (in thousands):
Three Months Ended
December 31, 2024
Year Ended
December 31, 2024
Common stock outstanding1
474,326
473,390
RSUs and restricted stock (Treasury stock method)2
16,393
16,057
Other
4,762
5,752
Total
495,481
495,199
__________________________
1
Common stock consisted of shares of BGC Class A common stock, shares of BGC Class B common stock and contingent shares of
our Class A common stock for which all necessary conditions have been satisfied except for the passage of time. For the quarter
ended December 31, 2024, the weighted-average number of shares of BGC Class A common stock was 364.9 million and Class B
shares was 109.5 million. For the year ended December 31, 2024, the weighted-average number of shares of BGC Class A common
stock was 363.9 million and Class B shares was 109.5 million.
2
For the quarter ended December 31, 2024, 16.4 million potentially dilutive securities were not included in the computation of fully
diluted EPS because their effect would have been anti-dilutive. Anti-dilutive securities for the quarter ended December 31, 2024,
included 16.0 million participating RSUs and 0.4 million participating restricted shares of BGC Class A common stock. For the
year ended December 31, 2024, 16.0 million potentially dilutive securities were not included in the computation of fully diluted
EPS because their effect would have been anti-dilutive. Anti-dilutive securities for the year ended December 31, 2024, included
$15.6 million participating RSUs and $0.4 million participating restricted shares of BGC Class A common stock. As of
December 31, 2024, 59.6 million shares of contingent BGC Class A common stock, non-participating RSUs, and non-participating
restricted shares of BGC Class A common stock were excluded from fully diluted EPS computations because the conditions for
issuance had not been met by the end of the period. The contingent BGC Class A common stock is recorded as a liability and
included in “Accounts payable, accrued and other liabilities” in our Consolidated Statements of Financial Condition as of
December 31, 2024.
Registration Statements
Our effective March 2021 Form S-3 Registration Statement was originally filed on March 8, 2021, with respect to the
issuance and sale of up to an aggregate of $300.0 million of shares of BGC Class A common stock from time to time on a
delayed or continuous basis. As of December 31, 2024, 2024, the Company had not issued shares of BGC Class A common stock
under the March 2021 Form S-3. We also entered into the July 2023 Sales Agreement, under which, we agreed to pay CF&Co
2% of the gross proceeds from the sale of shares. CF&Co is a wholly owned subsidiary of Cantor and an affiliate of BGC. For
additional information on our CEO Program sales agreement, see Note 13—“Related Party Transactions” to the Consolidated
Financial Statements of this Annual Report on Form 10-K. We intend to use the net proceeds of any shares of BGC Class A
common stock sold under our CEO Program for general corporate purposes, including for potential acquisitions, repurchases of
shares of BGC Class A common stock from executive officers and other employees of ours or our subsidiaries and of Cantor
and its affiliates. Prior to the Corporate Conversion, we also used the net proceeds for redemption of LPUs and FPUs in BGC
Holdings. Certain of such executive officers and other employees of ours or our subsidiaries and of Cantor and its affiliates will
be expected to use the proceeds from such sales to repay outstanding loans issued by, or credit enhanced by, Cantor or BGC.
Our effective 2019 Form S-4 Registration Statement was originally filed on September 13, 2019, with respect to the
offer and sale of up to 20 million shares of BGC Class A common stock from time to time in connection with business
combination transactions, including acquisitions of other businesses, assets, properties or securities. As of December 31, 2024,
the Company had issued an aggregate of 3.4 million shares of BGC Class A common stock under the 2019 Form S-4
Registration Statement.
110
Our effective DRIP Registration Statement was originally filed on June 24, 2011, with respect to the offer and sale of
up to 10 million shares of BGC Class A common stock under the DRIP. As of December 31, 2024, the Company had issued
0.8 million shares of BGC Class A common stock under the DRIP.
Our effective Registration Statement on Form S-8 was originally filed on July 3, 2023, with respect to the offer and
sale of up to 600 million shares of BGC Class A common stock under the BGC Group Equity Plan. 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 BGC Group Equity Plan. As of December 31, 2024, the limit
on the aggregate number of shares authorized to be delivered under the BGC Group Equity Plan allowed for the grant of future
awards relating to 440.8 million shares of BGC Class A common stock.
CONTINGENT PAYMENTS RELATED TO ACQUISITIONS
Since 2016, the Company has completed acquisitions whose purchase price included an aggregate of approximately
4.9 million shares of the BGC Class A common stock (with an acquisition date fair value of approximately $22.5 million),
0.1 million LPUs (with an acquisition date fair value of approximately $0.2 million), 0.2 million RSUs (with an acquisition date
fair value of approximately $1.2 million) and $68.0 million in cash that may be issued contingent on certain targets being met
through 2029.
As of December 31, 2024, the Company has issued 2.0 million shares of BGC Class A common stock, 0.2 million of
RSUs and paid $54.4 million in cash related to such contingent payments.
As of December 31, 2024, there are 0.4 million shares of BGC Class A common stock, including contingent shares for
which all necessary conditions have been satisfied except for the passage of time and which are included in our computation of
basic EPS, as well as 2.2 million shares of BGC Class A common stock which will be issued if related targets are met and
$7.1 million in cash which will be issued if related targets are met, net of forfeitures and other adjustments.
LEGAL PROCEEDINGS
On March 9, 2023, a purported class action complaint was filed against Cantor, BGC Holdings, and Newmark
Holdings in the U.S. District Court for the District of Delaware (Civil Action No. 1:23-cv-00265). The collective action, which
was filed by seven former limited partners of the defendants on their own behalf and on behalf of other similarly situated
limited partners, alleges a claim for breach of contract against all defendants on the basis that the defendants failed to make
payments due under the relevant partnership agreements. Specifically, the plaintiffs allege that the non-compete and economic
forfeiture provisions upon which the defendants relied to deny payment are unenforceable under Delaware law. The plaintiffs
allege a second claim against Cantor and BGC Holdings for antitrust violations under the Sherman Act on the basis that the
Cantor and BGC Holdings partnership agreements constitute unreasonable restraints of trade. In that regard, the plaintiffs allege
that the non-compete and economic forfeiture provisions of the Cantor and BGC Holdings partnership agreements, as well as
restrictive covenants included in partner separation agreements, cause anticompetitive effects in the labor market, insulate
Cantor and BGC Holdings from competition, and limit innovation. The plaintiffs seek a determination that the case may be
maintained as a class action, an injunction prohibiting the allegedly anticompetitive conduct, and monetary damages of at least
$5.0 million. On April 28, 2023, defendants filed a motion to dismiss the complaint. In response, the plaintiffs filed an amended
complaint. On July 14, 2023, defendants filed a motion to dismiss the amended complaint. The plaintiffs then filed a second
amended complaint in March 2024. On December 2, 2024, the Court granted defendants’ motion to dismiss the second
amended complaint in its entirety. On December 16, 2024, plaintiffs filed a notice of appeal to the Third Circuit Court of
Appeals. The Company believes the lawsuit has no merit. However, as with any litigation, the outcome cannot be determined
with certainty.
Other legal proceedings
On February 16, 2024, an alleged Company shareholder, Martin J. Siegel, filed a putative class action lawsuit against
Cantor Fitzgerald, LP and Howard W. Lutnick in the Delaware Court of Chancery, asserting that the Corporate Conversion was
unfair to Class A shareholders of BGC Partners, Inc. because it increased Cantor’s percentage voting control over the
Company. The suit is captioned Martin J. Siegel v. Cantor Fitzgerald, LP, C.A. 2024-0146-LWW. Defendants moved to
dismiss the complaint on April 22, 2024. The motion was argued at a hearing on January 9, 2025, after which the Court took the
matter under advisement. While the lawsuit is in its early stages and does not name the Company as a party, the Company
believes the action lacks merit.
111
CERTAIN RELATED PARTY TRANSACTIONS
Transactions with Executive Officers and Directors
On February 5, 2025, the Company accelerated the vesting of 1,304,864 of Howard Lutnick’s RSUs granted under the
BGC Group Equity Plan, which each represented a contingent right to receive one share of Class A Common Stock, delivered
less 721,590 shares withheld by the Company for taxes at $9.38 per share, in the amount of 583,274 net shares. The
acceleration of the vesting of the RSUs and the withholding of shares for taxes was approved by the Compensation Committee
of the Company.
On October 7, 2024, the Compensation Committee approved the redemption of 327,127 non-exchangeable Newmark
Holdings LPUs and 30,285 non-exchangeable Newmark Holdings PLPUs with a determination amount of $278,258, held by
Mr. Windeatt. In connection with this redemption, Mr. Windeatt received 271,362 shares of Newmark Class A common stock
(239,428 Newmark Holdings LPUs multiplied by the then-current Exchange Ratio) and a cash payment of $251,128 (27,332
Newmark Holdings PLPUs). The remaining 31,700 of Newmark Holdings LPUs and 2,953 Newmark Holdings PLPUs with a
determination amount of $27,130, were redeemed for zero in connection with Mr. Windeatt’s LLP status.
On August 8, 2024, Mr. Richards, a member of our Board, sold 13,063 shares of Class A common stock to the
Company. The sale price per share of $9.11 was the closing price of a share of Class A common stock on August 8, 2024. The
transaction was approved by the Audit Committee of the Board and was made pursuant to the Company’s stock buyback
authorization.
On January 2, 2024, Mr. Merkel sold 136,891 shares of Class A common stock to the Company. The sale price per
share of $6.98 was the closing price of a share of Class A common stock on January 2, 2024. The transaction was approved by
the Audit and Compensation Committees of the Board and was made pursuant to the Company’s stock buyback authorization.
On September 21, 2023, Mr. Windeatt sold 474,808 shares of Class A common stock to the Company. The sale price
per share of $5.29 was the closing price of a share of Class A common stock on September 21, 2023. The transaction was
approved by the Audit Committee and the Compensation Committee of the Board and was made pursuant to the Company’s
stock buyback authorization.
On June 8, 2023, the Company repurchased all of Mr. Windeatt’s 128,279 exchangeable BGC Holdings LPUs at a
price of $4.79 per unit, which was the closing price of a share of Class A common stock on June 8, 2023. The Compensation
Committee granted Mr. Windeatt 128,279 non-exchangeable BGC Holdings LPUs on April 1, 2021. Pursuant to the exchange
rights schedule of the grant, on April 1, 2023, the 128,279 non-exchangeable BGC Holdings LPUs became immediately
exchangeable.
In connection with the Corporate Conversion, on June 2, 2023 Mr. Merkel sold 150,000 shares of Class A common
stock to BGC Partners at $4.21 per share, the closing price of a share of Class A common stock on June 2, 2023. The
transaction was approved by the Audit and Compensation Committees of the Board of BGC Partners and was made pursuant to
BGC Partners’ stock buyback authorization.
In connection with the Corporate Conversion, on May 18, 2023, the BGC Partners Compensation Committee approved
the redemption of all of the non-exchangeable BGC Holdings units held by Mr. Merkel at that time. On May 18, 2023, Mr.
Merkel’s 148,146 NPSU-CVs, 33,585 PSU-CVs, and 74,896 PSUs were redeemed for zero and an aggregate of 256,627 shares
of Class A common stock were granted to Mr. Merkel, and 148,146 NPPSU-CVs with a total determination amount of
$681,250 and 33,585 PPSU-CVs with a total determination amount of $162,500 were redeemed for an aggregate cash payment
of $843,750. After deduction of shares of BGC Class A common stock to satisfy applicable tax withholding through the
surrender of shares of BGC Class A common stock valued at $4.61 per share, Mr. Merkel received 196,525 net shares of Class
A common stock.
Since Mr. Lutnick had previously repeatedly waived his rights under the Standing Policy, as of May 18, 2023 his
rights had accumulated for 7,879,736 non-exchangeable PSUs, and 103,763 non-exchangeable PPSUs with a determination
amount of $474,195. Due to the May 18, 2023 monetization of all of Mr. Merkel’s then-remaining non-exchangeable BGC
Holdings units, on such date Mr. Lutnick received additional incremental monetization rights for his then-remaining 3,452,991
non-exchangeable PSUs, and 1,348,042 non-exchangeable PPSUs with a determination amount of $6,175,805.
In connection with the Corporate Conversion and as a result of the monetization event for Mr. Merkel, on May 18,
2023 Mr. Lutnick elected to exercise in full his monetization rights under the Standing Policy, which he had previously waived
in prior years. All of the non-exchangeable BGC Holdings units that Mr. Lutnick held at that time were monetized as follows:
11,332,727 PSUs were redeemed for zero and 11,332,727 shares of Class A common stock were granted to Mr. Lutnick, and
1,451,805 PPSUs with an aggregate determination amount of $6,650,000 were redeemed for an aggregate cash payment of
$6,650,000. After deduction of applicable tax withholding through the surrender of shares of BGC Class A common stock
valued at $4.61 per share, Mr. Lutnick received 5,710,534 net shares of Class A common stock.
112
On May 18, 2023, Mr. Lutnick also exchanged his then-remaining 520,380 exchangeable PSUs for 520,380 shares of
Class A common stock. After deduction of applicable tax withholding through the surrender of shares of BGC Class A common
stock valued at $4.61 per share, Mr. Lutnick received 232,610 net shares of Class A common stock. In addition, on May 18,
2023, Mr. Lutnick’s then-remaining 1,474,930 non-exchangeable HDUs were redeemed for a cash capital account payment of
$9,148,000, $2.1 million of which was paid by BGC with the remainder paid by Newmark. As a result of the various
transactions on May 18, 2023 described above, on May 18, 2023, Mr. Lutnick no longer held any limited partnership units of
BGC Holdings.
On April 18, 2023, Dr. Bell, a member of our Board, sold 21,786 shares of Class A common stock to the Company.
The sale price per share of $4.59 was the closing price of a share of Class A common stock on April 18, 2023. The transaction
was approved by the Audit Committee and the Compensation Committee of the Board and was made pursuant to the
Company’s stock buyback authorization.
On March 14, 2022, the Compensation Committee approved the grant of exchange rights to Mr. Windeatt with respect
to 135,514 non-exchangeable BGC Holdings LPU-NEWs and 27,826 non-exchangeable PLPU-NEWs (at the average
determination price of $4.84 per unit). On August 11, 2022, the Company repurchased 135,514 exchangeable BGC Holdings
LPU-NEWs held by Mr. Windeatt at the price of $4.08 per unit, which was the closing price of the BGC Class A common stock
on August 11, 2022, and redeemed 27,826 exchangeable PLPU-NEWs held by Mr. Windeatt for $134,678, less applicable taxes
and withholdings.
John Abularrage Agreements
Abularrage Employment Agreement
On February 18, 2025, BGC Financial, L.P. (“BGC Financial”), a subsidiary of the Company, entered into an amended
and restated employment agreement with John Abularrage, effective as of February 18, 2025 (the “Abularrage Employment
Agreement”). Pursuant to the terms of the Abularrage Employment Agreement, Mr. Abularrage will receive a base salary of
$750,000 (“Base Salary”) per year and an annual bonus of $2,500,000 (with the Base Salary, the “Guaranteed Total
Compensation”) provided that Mr. Abularrage remains in Good Standing (as defined in the Abularrage Employment
Agreement) as described therein. Pursuant to the terms of the Abularrage Employment Agreement, up to twenty-five percent
(25%) of Mr. Abularrage’s annual Guaranteed Total Compensation may be awarded in the form of an equity award of restricted
stock units (“RSUs”) containing ratable 5-year vesting periods, as determined annually by the Compensation Committee of the
Company.
The Abularrage Employment Agreement provides for a term through at least December 31, 2034 (the “Abularrage
Employment Term”) except the Company may terminate the Abularrage Employment Term by written notice (i) in the case of
disability, 150 days in any period of 285 consecutive days, or (ii) for Cause (as defined therein). Mr. Abularrage shall remain an
employee of the Company following the termination of the Abularrage Employment Term except in the case that either party
provides at least (i) thirty-six (36) months’ written notice (the “Termination Notice”) to voluntarily terminate his employment
following the Abularrage Employment Term. If the Abularrage Employment Term is terminated via the Termination Notice,
any of Mr. Abularrage’s RSUs granted under the Abularrage Employment Agreement shall continue to vest for a period of one
(1) year following the termination of the Abularrage Employment Term, or two (2) years following the termination of the
Abularrage Employment Term if Mr. Abularrage was paid $3,250,000 in excess of his Guaranteed Total Compensation,
including any signing bonus previously distributed pursuant to Mr. Abularrage’s prior employment agreement, during the
Abularrage Employment Term, provided that in each case Mr. Abularrage has not materially breached any of the provisions of
the Abularrage Employment Agreement during the Abularrage Employment Term and complies with the non-competition and
non-solicitation provisions as described below.
113
The Abularrage Employment Agreement provides for customary confidentiality provisions. Pursuant to the Abularrage
Employment Agreement, Mr. Abularrage is subject to (i) a non-competition provision during the Term and for a period of one
(1) year following the termination of the Abularrage Employment Term and relating to any business activity that is in
competition with, or otherwise related to or arises from, the then current or contemplated business of BGC or any affiliate, or
two (2) years in the case that Mr. Abularrage was paid $3,250,000 in excess of his Guaranteed Total Compensation, including
any signing bonus previously distributed pursuant to Mr. Abularrage’s prior employment agreement, during the Abularrage
Employment Term (the “Restrictive Period”), (ii) a non-solicitation provision relating to the Company’s clients (as described
therein) for a period of one (1) year following the termination of the Abularrage Employment Term, or two (2) years in the case
that Mr. Abularrage was paid $3,250,000 in excess of his Guaranteed Total Compensation, including any signing bonus
previously distributed pursuant to Mr. Abularrage’s prior employment agreement, during the Abularrage Employment Term,
and (iii) a non-solicitation provision relating to the Company’s employees for a period of three (3) years following the
termination of the Abularrage Employment Term During the Restrictive Period. Mr. Abularrage shall be paid monthly an
amount equal to one-twelfth (1/12th) of his annualized salary at the time of the termination of the Abularrage Employment
Term, provided that Mr. Abularrage is in compliance with all restrictive covenants related to the Restrictive Period as described
in the Abularrage Employment Agreement.
Abularrage Bonus Pool Letter
On February 18, 2025, BGC Financial entered into an amended and restated bonus pool letter with John Abularrage,
effective as of February 18, 2025 (the “Abularrage Bonus Letter”). Under the terms of the Abularrage Bonus Letter, Mr.
Abularrage is eligible for a seventy-five percent (75%) allocation (“Pool Allocation”) of an incentive bonus pool (the “Bonus
Pool”) relating to the Profit Before Tax (“PBT”) of the Core Business, Americas Acquisitions, and Portfolio Match businesses
of the Company, each as described therein, during the Abularrage Employment Term. The Compensation Committee of the
Company shall determine the Bonus Pool annually and make all final determinations on a calendar year basis. Pursuant to the
terms of the Abularrage Bonus Letter, up to twenty-five percent (25%) of Mr. Abularrage’s bonus compensation under the
Abularrage Bonus Letter may be awarded in the form of an equity award of RSUs containing ratable 5-year vesting periods, as
determined annually by the Compensation Committee of the Company.
With respect to each calendar year of the Abularrage Employment, the Bonus Pool shall be calculated as: (1) the
applicable Bonus Pool Payout Rate (as defined in the Abularrage Bonus Letter) multiplied by the Bonus PBT (as defined in the
Abularrage Bonus Letter) plus (2) five percent (5%) of the incremental Portfolio Match PBT (as defined in the Abularrage
Bonus Letter), if any, above fifteen million dollars ($15,000,000) (“Bonus PM PBT”), provided that Mr. Abularrage shall only
be eligible for Pool Allocation based on a Bonus PM PBT to the extent he has not met his Total Contractual Compensation (as
defined in the Abularrage Bonus Letter) cap of $15,000,000 with respect to the same calendar year. If the Bonus PBT is a
negative number (the “Bonus PBT Deficit”), then that Bonus PBT Deficit shall be carried forward year to year and offset on a
dollar-for-dollar basis as part of the calculation of the Bonus Pool in each subsequent calculation period until such Bonus PBT
Deficit has been fully offset.
Additionally, Mr. Abularrage will be eligible to receive discretionary incentive bonus awards under the BGC Group,
Inc. Incentive Bonus Compensation Plan and BGC Group, Inc. Long Term Incentive Plan. To be eligible to receive bonuses
under the Abularrage Bonus Letter, Mr. Abularrage must remain in Good Standing (as defined therein) as of the applicable
award or grant date of any bonus awards.
JP Aubin Agreements
Aubin Employment Agreement
On February 18, 2025, BGC Brokers LP (“BGC Brokers”), a subsidiary of the Company, entered into an amended and
restated employment agreement with JP Aubin, effective as of February 18, 2025 (the “Aubin Employment Agreement”).
Pursuant to the terms of the Aubin Employment Agreement, Mr. Aubin will receive a base salary of €705,000 per year
(approximately $739,439 per year as of February 18, 2025) and additional benefits as described therein, including an annual
housing allowance and company car. Additionally, Mr. Aubin will be eligible to receive discretionary incentive bonus awards
under the BGC Group, Inc. Incentive Bonus Compensation Plan and BGC Group, Inc. Long Term Incentive Plan.
The Aubin Employment Agreement provides for a term through at least December 31, 2029 (the “Aubin Employment
Term”), except in the case that either party provides at least (i) two (2) years’ notice to voluntarily terminate the Aubin
Employment Term, (ii) three (3) months’ notice to terminate the Aubin Employment Term in the case of injury or sickness for
six (6) consecutive months in any period of twelve (12) months, or (iii) for cause.
114
The Aubin Employment Agreement provides for customary confidentiality provisions. Pursuant to the Aubin
Employment Agreement, Mr. Aubin is subject to (i) a non-competition provision during the Aubin Employment Term and for a
period of two (2) years following the termination of the Aubin Employment Term and relating to Restricted Business (as
defined therein) and (ii) a non-solicitation provision relating to the Company’s clients (as described therein) for a period of
twelve (12) months and employees for a period of thirty-six (36) months following the termination of the Aubin Employment
Term.
Aubin Consultancy Agreement
On February 18, 2025, BGC Services (Holdings) LLP (the “U.K. Partnership”) entered into a consultancy contract
with JP Aubin, effective as of February 18, 2025 (the “Aubin Consultancy Agreement”). Pursuant to the terms of the Aubin
Consultancy Agreement, Mr. Aubin will receive a consultancy fee of €100,000 per year (approximately $104,885 per year as of
February 17, 2025). The Aubin Consultancy Agreement provides for a term commencing on the earlier of the termination date
of the Aubin Employment Agreement and the Aubin Employment Term, and provides for a term of up to three (3) years
following the commencement date, unless otherwise terminated by Mr. Aubin at an earlier date (the “Consultancy Term”).
The Aubin Consultancy Agreement provides for customary confidentiality provisions. Pursuant to the Aubin
Consultancy Agreement, Mr. Aubin is subject to (i) a non-competition provision during the Consultancy Term and for a period
of twelve (12) months following the termination of the Consultancy Term and relating to Restricted Business (as defined
therein) and (ii) a non-solicitation provision relating to the Company’s clients and employees (as described therein) for a period
of twelve (12) months following the termination of the Consultancy Term.
Sean Windeatt Amended Deed of Adherence
On February 18, 2025, Sean Windeatt and the U.K. Partnership executed a Deed of Amendment (the “2025 Deed of
Amendment”), which amends the Deed of Adherence, dated January 22, 2014, between Mr. Windeatt and the U.K. Partnership
and the Deeds of Amendment, dated February 24, 2017, November 5, 2020 and July 12, 2023, between Mr. Windeatt and the
U.K. Partnership (as amended, the “Deed”).
Pursuant to the 2025 Deed of Amendment, Mr. Windeatt’s membership in the U.K. Partnership was extended to a
minimum initial period of up to and including June 30, 2034 (the “Initial Period”). In addition, under the 2025 Deed of
Amendment, commencing July 1, 2032, either party may terminate the Deed by giving written notice to the other party at least
24 months prior to the expiration of the Initial Period. Mr. Windeatt’s membership, unless terminated earlier in accordance with
the terms of the Deed, will continue following June 30, 2034 on the same terms and conditions set forth in the Deed until
written notice to terminate is provided and the 24-month notice period expires.
Pursuant to the 2025 Deed of Amendment, Mr. Windeatt is also entitled to an increase in drawings from an aggregate
amount of £700,000 per year (£58,333 per month) (approximately $881,615 per year or $73,467 per month as of February 18,
2025) to an aggregate amount of £750,000 per year (£62,500 per month) (approximately $944,587 per year or $78,716 per
month as of February 18, 2025) effective January 1, 2025, which shall be reviewed by the Compensation Committee of the
Company annually. Additionally, in connection with the execution of the 2025 Deed of Amendment, Mr. Windeatt will be
awarded a one-time allocation of profit in the sum of $460,000 (less applicable income tax deductions and insurance
contributions).
The 2025 Deed of Amendment extends Mr. Windeatt’s employee non-solicitation provision duration to thirty-six (36)
months. All other terms and conditions of Mr. Windeatt’s membership in the U.K. Partnership are unaffected by the 2025 Deed
of Amendment.
Mr. Windeatt 2023 Deed of Amendment
On July 12, 2023, Mr. Windeatt executed the 2023 Deed of Amendment with the U.K. Partnership which amends his
prior executed Deed of Adherence with the U.K. Partnership regarding the terms of his employment. Under the 2023 Deed of
Amendment, the initial period of Mr. Windeatt’s membership in the U.K. Partnership was extended from September 30, 2025
to December 31, 2028. In addition, under the 2023 Deed of Amendment, commencing January 1, 2027, either party may
terminate the Deed by giving written notice to the other party at least 24 months prior to the expiration of the initial period. Mr.
Windeatt’s membership, unless terminated earlier in accordance with the terms of the Deed, will continue following December
31, 2028 on the same terms and conditions set forth in the Deed until written notice to terminate is provided and the 24 month
notice period expires.
115
Pursuant to the 2023 Deed of Amendment, Mr. Windeatt is also entitled to an increase in drawings from an aggregate
amount of £600,000 per year to an aggregate amount of £700,000 per year effective January 1, 2023, which shall be reviewed
by the Compensation Committee annually. Mr. Windeatt is also eligible for additional allocations of the U.K. Partnership’s
profits, subject to the approval of the Compensation Committee.
In connection and in consideration for Mr. Windeatt’s execution of the 2023 Deed of Amendment, on July 10, 2023
the Company approved accelerating the vesting of 720,509 of the Company’s RSUs held by Mr. Windeatt (calculated based
upon the closing price of the Company’s Class A common stock on July 10, 2023 which was $4.45) and the vesting of
$780,333 of the RSU Tax Account held by Mr. Windeatt. Such RSUs and RSU Tax Account amount vested on July 12, 2023,
and the total value of this transaction was approximately $3,986,600.
Other Related Party Transactions
Cantor Referral Fee
On October 30, 2024, the Audit Committee approved the receipt of a referral fee of $1.5 million paid to the Company
by an affiliate of Cantor in connection with the introduction by certain of the Company’s brokers of a Cantor client to a Cantor
affiliate. Additionally, the Audit Committee approved attributing the entire referral fee to the individual brokers in the form of
an award of the Company’s RSUs.
MARKET SUMMARY
The following table provides certain volume and transaction count information for the quarterly periods indicated:
December 31,
2024
September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
Notional Volume (in billions)
Total Fully Electronic volume1
$
15,537 $
16,474 $
14,494 $
15,926 $
14,157
Total Hybrid volume
67,355
69,426
70,400
65,806
78,272
Total Fully Electronic and Hybrid
volume
$
82,892 $
85,900 $
84,894 $
81,732 $
92,429
Transaction Count (in thousands,
except for days)
Total Fully Electronic transactions1
5,750
4,955
4,381
4,639
4,316
Total Hybrid transactions
1,542
1,518
1,573
1,620
1,473
Total Fully Electronic and Hybrid
transactions
7,292
6,473
5,954
6,259
5,789
Trading days
62
63
63
63
63
____________________________
1.
Includes Fenics Integrated.
Note: Certain information may have been recast with current estimates to reflect changes in reporting methodology. Such revisions have no
impact on the Company’s revenues or earnings.
Fully Electronic volume, including new products, was $62.4 trillion for the year ended December 31, 2024, compared
to $55.5 trillion for the year ended December 31, 2023. Our Hybrid volume for the year ended December 31, 2024 was $273.0
trillion, compared to $293.8 trillion for the year ended December 31, 2023.
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CONTRACTUAL OBLIGATIONS AND COMMITMENTS
The following table summarizes certain of our contractual obligations at December 31, 2024 (in thousands):
Total
Less Than
1 Year
1-3 Years
3-5 Years
More Than
5 Years
Debt and collateralized borrowings1
$
1,349,500 $
500,000 $
— $
849,500 $
—
Operating leases2
172,607
29,722
46,821
28,895
67,169
Finance leases2
3,437
1,520
1,917
—
—
Interest on debt and collateralized
borrowings3
257,435
74,750
123,757
58,928
—
Interest on Short-term borrowings
55
55
—
—
—
One-time transition tax4
11,382
6,962
4,420
—
—
Other5
13,242
13,242
—
—
—
Total contractual obligations
$
1,807,658 $
626,251 $
176,915 $
937,323 $
67,169
_________________________________
1
Debt and collateralized borrowings reflects $200.0 million of borrowings by the Company, which includes deferred financing costs
of $4.2 million, outstanding under the Revolving Credit Agreement as of December 31, 2024; $288.2 million of BGC Group
4.375% Senior Notes (the $288.2 million represents the principal amount of the debt; the carrying value of the BGC Group 4.375%
Senior Notes as of December 31, 2024 was approximately $287.5 million); $347.2 million of BGC Group 8.000% Senior Notes (the
$347.2 million represents the principal amount of the debt; the carrying value of the BGC Group 8.000% Senior Notes as of
December 31, 2024 was approximately $344.6 million) and $500.0 million of BGC Group 6.600% Senior Notes (the $500.0 million
represents the principal amount of the debt; the carrying value of the BGC Group 6.600% Senior Notes as of December 31, 2024
was approximately $495.5 million). Debt and collateralized borrowings reflects $11.8 million of BGC Partners 4.375% Senior
Notes (the $11.8 million represents the principal amount of the debt; the carrying value of the BGC Partners 4.375% Senior Notes
as of December 31, 2024 was approximately $11.8 million) and $2.3 million of BGC Partners 8.000% Senior Notes (the
$2.3 million represents the principal amount of the debt; the carrying value of the BGC Partners 8.000% Senior Notes as of
December 31, 2024 was approximately $2.3 million). See Note 17—“Notes Payable and Other Borrowings” for more information
regarding these obligations, including timing of payments and compliance with debt covenants.
2
Operating leases and finance leases are related to rental payments under various non-cancelable leases, principally for office space,
data centers and office equipment are presented net of sublease payments to be received. As of December 31, 2024, there were no
sublease payments to be received over the life of the agreements.
3
Interest on debt and collateralized borrowings reflects a total of $3.2 million of interest expense associated with the
Company's borrowings under the Revolving Credit Agreement; $11.9 million of interest expense associated with the BGC
Group 4.375% Senior Notes, $0.5 million of interest expense associated with the BGC Partners 4.375% Senior Notes, $94.5 million
of interest expense associated with the BGC Group 8.000% Senior Notes, $0.6 million of interest expense associated with the BGC
Partners 8.000% Senior Notes, and $146.7 million of interest expense associated with the BGC Group 6.600% Senior Notes.
Interest on debt and collateralized borrowings also includes interest on the undrawn portion of the committed unsecured senior
Revolving Credit Agreement which was calculated through the maturity date of the facility, which is April 26, 2027. As of
December 31, 2024, the undrawn portion of the committed unsecured Revolving Credit Agreement was $500.0 million.
4
The Company completed the calculation of the one-time transition tax on the deemed repatriation of foreign subsidiaries’ earnings
pursuant to the Tax Act and previously recorded a net cumulative tax expense of $28.6 million, net of foreign tax credits. During the
second quarter of 2024, the Company settled its 2017 audit with the IRS which included the transition tax. The revised net
cumulative transition tax expense is $25.3 million, net of foreign tax credits, resulting in a net adjustment of the payable balance by
$3.3 million. The Company made an election to pay the taxes over eight years with 40% to be paid in equal installments over the
first five years and the remaining 60% to be paid in installments of 15%, 20% and 25% in years six, seven and eight, respectively.
The cumulative remaining balance as of December 31, 2024 is $11.4 million.
5
Other contractual obligations reflect commitments of $13.2 million to make charitable contributions, which are recorded as part of
“Accounts payable, accrued and other liabilities” in the Company’s Consolidated Statements of Financial Condition. The amount
payable each year reflects an estimate of future Charity Day obligations.
OFF-BALANCE SHEET ARRANGEMENTS
In the ordinary course of business, we enter into arrangements with unconsolidated entities, including variable interest
entities. See Note 14—“Investments” to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form
10-K for additional information related to our investments in unconsolidated entities.
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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of our Consolidated Financial Statements in conformity with U.S. GAAP requires management to
make estimates and assumptions that affect the reported amounts of the assets and liabilities, revenues and expenses, and the
disclosure of contingent assets and liabilities in our Consolidated Financial Statements. These accounting estimates require the
use of assumptions about matters, some of which are highly uncertain at the time of estimation. Management bases its estimates
on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of
which form the basis for making judgments, and we evaluate these estimates on an ongoing basis. To the extent actual
experience differs from the assumptions used, our Consolidated Statements of Financial Condition, Consolidated Statements of
Operations and Consolidated Statements of Cash Flows could be materially affected. We believe that the following accounting
policies involve a higher degree of judgment and complexity.
Revenue Recognition
We derive our revenues primarily through commissions from brokerage services, the spread between the buy and sell
prices on matched principal transactions, fees from related parties, data, network and post-trade services, and other revenues.
See Note 3—“Summary of Significant Accounting Policies” to our consolidated financial statements in Part II, Item 8 of this
Annual Report on Form 10-K for further information regarding revenue recognition.
Equity-Based and Other Compensation
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.
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.
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.
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.
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 Consolidated Statements of Operations.
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 Consolidated Statements of Operations.
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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 Consolidated
Statements of Operations.
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 the Company’s
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 Consolidated Statements of Operations.
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 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
Consolidated Statements of Operations as part of “Equity-based compensation and allocations of net income to limited
partnership units and FPUs.”
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
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 years ended December 31, 2024, 2023 and 2022, we incurred equity-based compensation expense of $184.7 million,
$171.6 million and $147.5 million, respectively, related to LPUs and issuance of common stock.
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 years ended December 31, 2023 and 2022, we incurred equity-based
compensation expense related to these LPUs of $40.9 million and $73.7 million, respectively. This expense is included in
“Equity-based compensation and allocations of net income to limited partnership units and FPUs” in our Consolidated
Statements of Operations.
119
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.
As of December 31, 2024 and 2023, the aggregate balance of employee loans, net of reserve, was $360.1 million and
$367.8 million, respectively, and is included as “Loans, forgivable loans and other receivables from employees and partners,
net” in our Consolidated Statements of Financial Condition. Compensation expense (benefit) for the above-mentioned
employee loans for the years ended December 31, 2024, 2023 and 2022 was $59.4 million, $51.3 million and $49.5 million,
respectively. The compensation expense related to these loans was included as part of “Compensation and employee benefits”
in our Consolidated Statements of Operations.
Goodwill
Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in a business
combination. As prescribed in U.S. GAAP guidance, Intangibles – Goodwill and Other, goodwill is not amortized, but instead
is periodically tested for impairment. We review goodwill for impairment on an annual basis during the fourth quarter of each
fiscal year or whenever an event occurs or circumstances change that could reduce the fair value of a reporting unit below its
carrying amount.
When reviewing goodwill for impairment, we first assess qualitative factors to determine whether it is more likely than
not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If the results of the qualitative
assessment indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or if we
choose to bypass the qualitative assessment, we perform a quantitative goodwill impairment analysis as follows.
The quantitative goodwill impairment test, used to identify both the existence of impairment and the amount of
impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying
amount of a reporting unit exceeds its fair value, an impairment loss should be recognized in an amount equal to that excess,
limited to the total amount of goodwill allocated to that reporting unit. If the estimated fair value of a reporting unit exceeds its
carrying value, goodwill is deemed not to be impaired. To estimate the fair value of the reporting unit, we use a discounted cash
flow model and data regarding market comparables. The valuation process requires significant judgment and involves the use of
significant estimates and assumptions. These assumptions include cash flow projections, estimated cost of capital and the
selection of peer companies and relevant multiples. Because assumptions and estimates are used in projecting future cash flows,
choosing peer companies and selecting relevant multiples, actual results may differ from our estimates under different
assumptions or conditions; and changes to these estimates and assumptions, as a result of changing economic and competitive
conditions, could materially affect the determination of fair value and/or impairment.
CECL
We present financial assets that are measured at amortized cost net of an allowance for credit losses, which represents
the amount expected to be collected over their estimated life. Expected credit losses for newly recognized financial assets
carried at amortized cost, as well as changes to expected lifetime credit losses during the period, are recognized in earnings. In
accordance with the U.S. GAAP guidance, Financial Instruments—Credit Losses, the CECL methodology’s impact on
expected credit losses, among other things, reflects the Company’s view of the current state of the economy, forecasted
macroeconomic conditions and BGC’s portfolios. The amount of the allowance is based on significant estimates and the
ultimate losses may vary from such estimates as more information becomes available or conditions change. Additional
disclosures regarding our accounting for CECL are provided in Note 25—“Current Expected Credit Losses (CECL)” to our
consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
120
Income Taxes
We account for income taxes using the asset and liability method as prescribed in U.S. GAAP guidance, Income Taxes.
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to basis differences between the
Consolidated Financial Statement carrying amounts of existing assets and liabilities and their respective tax basis. Certain of
our entities are taxed as U.S. partnerships and are primarily subject to UBT in the City of New York. Therefore, the tax liability
or benefit related to the partnership income or loss except for UBT rests with the partners rather than the partnership entity (see
Note 2—“Limited Partnership Interests in BGC Holdings and Newmark Holdings” to our Consolidated Financial Statements in
Part II, Item 8 of this Annual Report on Form 10-K for a discussion of partnership interests). As such, the partners’ tax liability
or benefit is not reflected in our Consolidated Financial Statements. The tax-related assets, liabilities, provisions or benefits
included in our consolidated financial statements also reflect the results of the entities that are taxed as corporations, either in
the U.S. or in foreign jurisdictions.
We provide for uncertain tax positions based upon management’s assessment of whether a tax benefit is more likely
than not to be sustained upon examination by tax authorities. Management is required to determine whether a tax position is
more likely than not to be sustained upon examination by tax authorities, including resolution of any related appeals or
litigation processes, based on the technical merits of the position. Because significant assumptions are used in determining
whether a tax benefit is more likely than not to be sustained upon examination by tax authorities, actual results may differ from
our estimates under different assumptions or conditions. We recognize interest and penalties related to income tax matters in
“Provision for income taxes” in our Consolidated Statements of Operations.
A valuation allowance is recorded against deferred tax assets if it is deemed more likely than not that those assets will
not be realized. In assessing the need for a valuation allowance, we consider all available evidence, including past operating
results, the existence of cumulative losses in the most recent fiscal years, estimates of future taxable income and the feasibility
of tax planning strategies.
The measurement of current and deferred income tax assets and liabilities is based on provisions of enacted tax laws
and involves uncertainties in the application of tax regulations in the U.S. and other tax jurisdictions. Because our interpretation
of complex tax law may impact the measurement of current and deferred income taxes, actual results may differ from these
estimates under different assumptions regarding the application of tax law.
The Tax Act includes the global intangible low-taxed income, GILTI, provision. This provision requires inclusion in
the Company’s U.S. income tax return the earnings of certain foreign subsidiaries. The Company has elected to treat taxes
associated with the GILTI provision using the Period Cost Method and thus has not recorded deferred taxes for basis
differences under this regime.
Additional disclosures regarding our accounting for income taxes are provided in Note 20—“Income Taxes” to our
consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
See Note 3—“Summary of Significant Accounting Policies” to our consolidated financial statements in Part II, Item 8
of this Annual Report on Form 10-K for additional information regarding these critical accounting policies and other significant
accounting policies.
There have been no other significant changes to the Company’s critical accounting policies and estimates during fiscal
year 2024.
RECENT ACCOUNTING PRONOUNCEMENTS
See Note 1—“Organization and Basis of Presentation” to our Consolidated Financial Statements in Part II, Item 8 of
this Annual Report on Form 10-K for information regarding recent accounting pronouncements.
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Credit Risk
Credit risk arises from potential non-performance by counterparties and customers. BGC has established policies and
procedures to manage its exposure to credit risk. BGC maintains a thorough credit approval process to limit exposure to
counterparty risk and employs monitoring to control the counterparty risk from its matched principal and agency businesses.
BGC’s account opening and counterparty approval process includes verification of key customer identification, anti-money
laundering verification checks and a credit review of financial and operating data. The credit review process includes
establishing an internal credit rating and any other information deemed necessary to make an informed credit decision, which
may include correspondence, due diligence calls and a visit to the entity’s premises, as necessary.
121
Credit approval is granted subject to certain trading limits and may be subject to additional conditions, such as the
receipt of collateral or other credit support. Ongoing credit monitoring procedures include reviewing periodic financial
statements and publicly available information on the client and collecting data from credit rating agencies, where available, to
assess the ongoing financial condition of the client.
In addition, BGC incurs limited credit risk related to certain brokerage activities. This counterparty risk relates to the
collectability of the outstanding brokerage fee receivables. The review process includes monitoring both the clients and the
related brokerage receivables. The review includes an evaluation of the ongoing collection process and an aging analysis of the
brokerage receivables.
Principal Transaction Risk
Through its subsidiaries, BGC executes matched principal transactions in which it acts as a “middleman” by serving as
counterparty to both a buyer and a seller in matching back-to-back trades. These transactions are then settled through a
recognized settlement system or third-party clearing organization. Settlement typically occurs within one to three business days
after the trade date. Cash settlement of the transaction occurs upon receipt or delivery of the underlying instrument that was
traded. BGC generally avoids settlement of principal transactions on a free-of-payment basis or by physical delivery of the
underlying instrument. However, free-of-payment transactions may occur on a very limited basis.
The number of matched principal trades BGC executes has continued to grow as compared to prior years. Receivables
from broker-dealers, clearing organizations, customers and affiliated broker-dealers and Payables to broker-dealers, clearing
organizations, customers and related broker-dealers on the Company’s Consolidated Statements of Financial Condition
primarily represent the simultaneous purchase and sale of the securities associated with those matched principal transactions
that have not settled as of their stated settlement dates. BGC’s experience has been that substantially all of these transactions
ultimately settle at the contracted amounts, however, the ability to settle has the potential to be impacted by unforeseen
circumstances.
Market Risk
Market risk refers to the risk that a change in the level of one or more market prices, rates, indices or other factors will
result in losses for a specified position. BGC may allow certain of its desks to enter into unmatched principal transactions in the
ordinary course of business and hold long and short inventory positions. These transactions are primarily for the purpose of
facilitating clients’ execution needs, adding liquidity to a market or attracting additional order flow. As a result, BGC may have
market risk exposure on these transactions. BGC’s exposure varies based on the size of its overall positions, the risk
characteristics of the instruments held and the amount of time the positions are held before they are disposed of. BGC has
limited ability to track its exposure to market risk and unmatched positions on an intra-day basis; however, it attempts to
mitigate its market risk on these positions by strict risk limits, extremely limited holding periods and hedging its exposure.
These positions are intended to be held short term to facilitate customer transactions. However, due to a number of factors,
including the nature of the position and access to the market on which it trades, BGC may not be able to unwind the position
and it may be forced to hold the position for a longer period than anticipated. All positions held longer than intra-day are
marked to market.
We also had Financial instruments owned, at fair value, of $186.2 million as of December 31, 2024. These include
investments in equity securities, which are publicly-traded. Investments in equity securities carry a degree of risk, as there can
be no assurance that the equity securities will not lose value and, in general, securities markets can be volatile and
unpredictable. As a result of these different market risks, our holdings of equity securities could be materially and adversely
affected. We may seek to minimize the effect of price changes on a portion of our investments in equity securities through the
use of derivative contracts. However, there can be no assurance that our hedging activities will be adequate to protect us against
price risks associated with our investments in equity securities. See Note 11—“Derivatives” and Note 12—“Fair Value of
Financial Assets and Liabilities” to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form
10-K for further information regarding these investments and related hedging activities.
Our risk management procedures and limits are designed to monitor and limit the risk of unintended loss and have
been effective in the past. However, there is no assurance that these procedures and limits will be effective at limiting
unanticipated losses in the future. Adverse movements in the securities positions or a downturn or disruption in the markets for
these positions could result in a substantial loss. In addition, principal gains and losses resulting from these positions could on
occasion have a disproportionate effect, positive or negative, on BGC’s consolidated financial condition and results of
operations for any particular reporting period.
122
Operational Risk
Our businesses are highly dependent on our ability to process a large number of transactions across numerous and
diverse markets in many currencies on a daily basis. If any of our data processing systems do not operate properly or are
disabled or if there are other shortcomings or failures in our internal processes, people or systems, we could suffer impairment
to our liquidity, financial loss, a disruption of our businesses, liability to clients, regulatory intervention or reputational damage.
These systems may fail to operate properly or become disabled as a result of events that are wholly or partially beyond our
control, including cybersecurity incidents, a disruption of electrical or communications services or our inability to occupy one
or more of our buildings. The inability of our systems to accommodate an increasing volume of transactions could also
constrain our ability to expand our businesses.
In addition, despite our contingency plans, our ability to conduct business may be adversely impacted by a disruption
in the infrastructure that supports our businesses and the communities in which they are located. This may include a disruption
involving electrical, communications, transportation or other services used by us or third parties with whom we conduct
business.
Further, our operations rely on the secure processing, storage and transmission of confidential and other information
on our computer systems and networks. Although we take protective measures such as software programs, firewalls and similar
technology to maintain the confidentiality, integrity and availability of our and our clients’ information, the nature of the threats
continue to evolve. As a result, our computer systems, software and networks may be vulnerable to unauthorized access, loss or
destruction of data (including confidential client information), account takeovers, unavailability or disruption of service,
computer viruses, acts of vandalism, or other malicious code, cyber-attacks and other events that could have an adverse security
impact. There have also been an increasing number of malicious cyber incidents in recent years in various industries, including
ours. Any such cyber incidents involving our computer systems and networks, or those of third parties important to our
businesses, could present risks to our operations.
Foreign Currency Risk
BGC is exposed to risks associated with changes in FX rates. Changes in FX rates create volatility in the U.S. dollar
equivalent of the Company’s revenues and expenses. In addition, changes in the remeasurement of BGC’s foreign currency
denominated financial assets and liabilities are recorded as part of its results of operations and fluctuate with changes in foreign
currency rates. BGC monitors the net exposure in foreign currencies on a daily basis and hedges its exposure as deemed
appropriate with highly rated major financial institutions.
The majority of the Company’s foreign currency exposure is related to the U.S. dollar versus the pound sterling and
the euro. For the financial assets and liabilities denominated in the pound sterling and euro, including foreign currency hedge
positions related to these currencies, we evaluated the effects of a 10% shift in exchange rates between those currencies and the
U.S. dollar, holding all other assumptions constant. The analysis used the stress-tested scenario as the U.S. dollar strengthening
against both the euro and against the pound sterling. If as of December 31, 2024, the U.S. dollar had strengthened against both
the euro and the pound sterling by 10%, the currency movements would have had an aggregate negative impact on our net
income of approximately $0.9 million.
Interest Rate Risk
BGC had $1,149.5 million in fixed-rate debt outstanding as of December 31, 2024. These debt obligations are not
currently subject to fluctuations in interest rates, although in the event of refinancing or issuance of new debt, such debt could
be subject to changes in interest rates. In addition, as of December 31, 2024, BGC had $200.0 million borrowings outstanding
under its Revolving Credit Agreement. The Revolving Credit Agreement interest rate on borrowings is based on SOFR or a
defined base rate plus additional margin.
As of December 31, 2024, BGC did not have any borrowings outstanding under its BGC Credit Agreement.
Borrowings under the BGC Credit Agreement bear interest at a rate equal to 25 basis points less than the applicable borrower’s
borrowing rate under its revolving credit agreement with third party banks, or if FICC-GSD Margin Loans, at a rate equal to the
overnight interest rate actually earned by the borrower or its affiliates on borrowings under the applicable FICC-GSD Margin
Loan that are posted to clearinghouses or kept available for posting at clearinghouses. To assess exposure to interest rate risk,
we evaluated the effect of a 1% shift in interest rates, holding all other assumptions constant. The analysis indicated that our
consolidated net earnings in fiscal year 2024 would have declined by $1.7 million if interest rates increased by an additional
1%.
123
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
BGC Group, Inc. and Subsidiaries
Consolidated Financial Statements for the years ended December 31, 2024, 2023 and 2022
Reports of Independent Registered Public Accounting Firm (PCAOB ID 42)
125
Consolidated Financial Statements—
Consolidated Statements of Financial Condition
128
Consolidated Statements of Operations
129
Consolidated Statements of Comprehensive Income (Loss)
130
Consolidated Statements of Cash Flows
131
Consolidated Statements of Changes in Equity
133
Notes to Consolidated Financial Statements
136
124
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of BGC Group, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial condition of BGC Group, Inc. (the Company) as of
December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), cash flows and
changes in equity for each of the three years in the period ended December 31, 2024, and the related notes and the financial
statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In
our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company
at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period
ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in
Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(2013 framework) and our report dated March 3, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The
communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken
as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit
matter or on the accounts or disclosures to which it relates.
125
Accounting for Income Taxes
Description of the Matter
As discussed in Notes 3 and 20 to the consolidated financial statements, the Company is subject to
income taxes in the U.S. and numerous foreign jurisdictions, which affect the Company’s
provision for income taxes. The provision for income taxes is an estimate based on management’s
understanding of current enacted tax laws and tax rates of each tax jurisdiction. For the year-ended
December 31, 2024, the Company recognized a consolidated provision for income taxes of $49.9
million.
Auditing management’s calculation of the provision for income taxes was complex because the
Company’s global structure required an assessment of the Company’s application of tax laws in
multiple jurisdictions including the income tax impact of the legal entity ownership structure. The
assessment of tax positions involves the evaluation and application of complex statutes and
regulations which are subject to legal and factual interpretation. Our audit procedures required
significant audit effort including the use of our tax professionals to assist in evaluating the
provision for income taxes.
How We Addressed the
Matter in Our Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of the
Company’s controls related to the Company’s global tax structure. For example, we tested
management’s controls over the completeness and accuracy of the data utilized, the effective tax
rate reconciliation and the evaluation of permanent and temporary differences within various
jurisdictions.
To test the Company’s provision for income taxes and to address the risks associated with the
complexity of the Company’s global tax structure, we performed audit procedures that included,
among others, evaluating the income tax impact of the Company’s structure and operations and
considered the impact of any changes in the current year. We used our tax professionals with
specialized skill and knowledge to assist in evaluating the provision for income taxes including the
application of relevant local and foreign tax laws to management’s calculation methodologies and
tax positions. Additionally, we tested the related effective tax rate reconciliation, evaluated the tax
impact of permanent and temporary differences, and tested the application of authoritative
guidance.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2008.
New York, New York
March 3, 2025
126
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of BGC Group, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited BGC Group, Inc.’s internal control over financial reporting as of December 31, 2024, based on criteria
established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (2013 framework) (the COSO criteria). In our opinion, BGC Group, Inc. (the Company) maintained, in all
material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.
As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s
assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal
controls of Sage Energy Partners, LP which is included in the 2024 consolidated financial statements of the Company and
constituted 0.5% of total assets, and 0.6% of net assets as of December 31, 2024, and 0.7% of revenues for the year then ended.
Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control
over financial reporting of Sage Energy Partners, LP.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated statements of financial condition of the Company as of December 31, 2024 and 2023, the related
consolidated statements of operations, comprehensive income (loss), cash flows and changes in equity for each of the three
years in the period ended December 31, 2024, and the related notes and the financial statement schedule listed in the Index at
Item 15(a)(2) and our report dated March 3, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report
on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control
over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
New York, New York
March 3, 2025
127
BGC GROUP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except per share data and numbers of shares)
December 31,
2024
December 31,
2023
Assets
Cash and cash equivalents
$
711,584
$
655,641
Cash segregated under regulatory requirements
21,689
17,255
Financial instruments owned, at fair value
186,197
45,792
Receivables from broker-dealers, clearing organizations, customers and related broker-dealers
365,490
350,036
Accrued commissions and other receivables, net
324,213
305,793
Loans, forgivable loans and other receivables from employees and partners, net
360,060
367,805
Fixed assets, net
190,012
178,300
Investments
39,267
38,314
Goodwill
540,290
506,344
Other intangible assets, net
240,910
211,285
Receivables from related parties
7,323
2,717
Other assets
604,932
496,655
Total assets
$
3,591,967
$
3,175,937
Liabilities, Redeemable Partnership Interest, and Equity
Accrued compensation
227,869
206,364
Payables to broker-dealers, clearing organizations, customers and related broker-dealers
225,377
202,266
Payables to related parties
28,960
17,456
Accounts payable, accrued and other liabilities
692,982
668,189
Notes payable and other borrowings
1,337,540
1,183,506
Total liabilities
2,512,728
2,277,781
Commitments, contingencies and guarantees (Note 19)
Equity
Stockholders’ equity:
Class A common stock, par value $0.01 per share; 1,500,000,000 shares authorized at
December 31, 2024 and December 31, 2023, respectively; 424,361,066 and 403,574,835 shares
issued at December 31, 2024 and December 31, 2023, respectively; and 374,296,914 and
390,094,988 shares outstanding at December 31, 2024 and December 31, 2023, respectively
4,244
4,036
Class B common stock, par value $0.01 per share; 300,000,000 shares authorized at December 31,
2024 and December 31, 2023, respectively; 109,452,953 issued and outstanding at December 31,
2024 and December 31, 2023, respectively, convertible into Class A common stock
1,095
1,095
Additional paid-in capital
2,311,104
2,105,130
Treasury stock, at cost: 50,064,152 and 13,479,847 shares of Class A common stock at
December 31, 2024 and December 31, 2023, respectively
(331,728)
(67,414)
Retained deficit
(1,026,359)
(1,119,182)
Accumulated other comprehensive income (loss)
(59,849)
(38,582)
Total stockholders’ equity
898,507
885,083
Noncontrolling interest in subsidiaries
180,732
13,073
Total equity
1,079,239
898,156
Total liabilities, redeemable partnership interest, and equity
$
3,591,967
$
3,175,937
The accompanying Notes to the Consolidated Financial Statements are an integral part of these financial statements.
128
BGC GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Year Ended December 31,
2024
2023
2022
Revenues:
Commissions
$
1,648,817
$
1,464,524
$
1,281,294
Principal transactions
389,429
368,100
365,507
Fees from related parties
20,728
15,968
14,734
Data, network and post-trade
126,963
111,470
96,389
Interest and dividend income
56,223
45,422
21,007
Other revenues
20,658
19,917
16,371
Total revenues
2,262,818
2,025,401
1,795,302
Expenses:
Compensation and employee benefits
1,123,747
992,603
853,165
Equity-based compensation and allocations of net income to limited partnership
units and FPUs
369,143
355,378
251,071
Total compensation and employee benefits
1,492,890
1,347,981
1,104,236
Occupancy and equipment
169,238
162,743
157,491
Fees to related parties
32,529
32,649
25,662
Professional and consulting fees
64,949
60,398
68,775
Communications
120,624
114,143
108,096
Selling and promotion
70,466
61,884
49,215
Commissions and floor brokerage
70,798
61,523
58,277
Interest expense
91,075
77,231
57,932
Other expenses
69,694
74,278
87,431
Total expenses
2,182,263
1,992,830
1,717,115
Other income (losses), net:
Gains (losses) on divestitures and sale of investments
38,769
—
(1,029)
Gains (losses) on equity method investments
8,430
9,152
10,920
Other income (loss)
45,389
15,986
9,373
Total other income (losses), net
92,588
25,138
19,264
Income (loss) from operations before income taxes
173,143
57,709
97,451
Provision (benefit) for income taxes
49,915
18,934
38,584
Consolidated net income (loss)
$
123,228
$
38,775
$
58,867
Less: Net income (loss) attributable to noncontrolling interest in subsidiaries
(3,760)
2,510
10,155
Net income (loss) available to common stockholders
$
126,988
$
36,265
$
48,712
Per share data (Note 6):
Basic earnings (loss) per share
Net income (loss) attributable to common stockholders
$
121,215
$
34,070
$
48,712
Basic earnings (loss) per share
$
0.26
$
0.08
$
0.13
Basic weighted-average shares of common stock outstanding
473,390
426,436
371,561
Fully diluted earnings (loss) per share
Net income (loss) for fully diluted shares
$
121,268
$
33,943
$
63,479
Fully diluted earnings (loss) per share
$
0.25
$
0.07
$
0.13
Fully diluted weighted-average shares of common stock outstanding
479,142
489,989
499,414
The accompanying Notes to the Consolidated Financial Statements are an integral part of these financial statements.
129
BGC GROUP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
Year Ended December 31,
2024
2023
2022
Consolidated net income (loss)
$
123,228 $
38,775 $
58,867
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments
(21,515)
7,607
(5,668)
Total other comprehensive income (loss), net of tax
(21,515)
7,607
(5,668)
Comprehensive income (loss)
101,713
46,382
53,199
Less: Comprehensive income (loss) attributable to noncontrolling interest
in subsidiaries, net of tax
(4,008)
3,268
9,370
Comprehensive income (loss) attributable to common stockholders
$
105,721 $
43,114 $
43,829
The accompanying Notes to the Consolidated Financial Statements are an integral part of these financial statements.
130
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income (loss)
$
123,228
$
38,775
$
58,867
Adjustments to reconcile consolidated net income (loss) to net cash provided by (used
in) operating activities:
Fixed asset depreciation and intangible asset amortization
81,434
80,417
75,054
Employee loan amortization and reserves on employee loans
59,413
51,313
49,533
Equity-based compensation and allocations of net income to limited partnership units
and FPUs
369,143
355,378
251,071
Deferred compensation expense
51
54
(542)
Losses (gains) on equity method investments
(8,430)
(9,152)
(10,920)
Unrealized/realized losses (gains) on financial instruments owned, at fair value and
other investments
(38,577)
(4,406)
1,208
Amortization of discount (premium) on notes payable
1,286
3,662
2,801
Impairment of fixed assets, intangible assets and investments
746
3,144
6,139
Deferred tax provision (benefit)
(69,754)
(60,556)
(14,628)
Change in estimated acquisition earn-out payables
1,146
1,442
1,034
Forfeitures of Class A common stock
(1,065)
(1,190)
(263)
Loss (gain) on divestiture
(39,019)
—
1,029
Other
10,663
—
(1,914)
Consolidated net income (loss), adjusted for non-cash and non-operating
items
490,265
458,881
418,469
Decrease (increase) in operating assets:
Financial instruments owned, at fair value
(143,433)
(5,475)
2,383
Receivables from broker-dealers, clearing organizations, customers and related
broker-dealers
(21,584)
212,490
222,567
Accrued commissions receivable, net
(20,803)
(5,750)
6,287
Loans, forgivable loans and other receivables from employees and partners, net
(20,057)
(77,464)
(61,205)
Receivables from related parties
(3,890)
(1,380)
3,621
Other assets
(10,674)
19,803
(8,469)
Increase (decrease) in operating liabilities:
Accrued compensation
19,603
18,450
(25,178)
Payables to broker-dealers, clearing organizations, customers and related broker-
dealers
23,319
(203,902)
(252,490)
Payables to related parties
11,504
24,145
(43,782)
Accounts payable, accrued and other liabilities
(8,900)
(34,595)
(37,841)
Net cash provided by (used in) operating activities
$
315,350
$
405,203
$
224,362
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of subsidiary
45,741
—
512
Purchases of fixed assets
(29,624)
(14,924)
(10,591)
Capitalization of software development costs
(42,431)
(44,974)
(48,169)
Purchase of equity method investments
(1,750)
—
(588)
Proceeds from equity method investments
9,026
9,421
6,118
Payments for acquisitions, net of cash acquired
(64,174)
(39,755)
—
Purchase of investment carried under measurement alternative
(13,155)
—
—
Loan to related parties
(180,000)
—
—
Repayment of loan to related parties
180,000
—
—
Purchase of other assets
(627)
(475)
(612)
Net cash provided by (used in) investing activities
$
(96,994) $
(90,707) $
(53,330)
Year Ended December 31,
2024
2023
2022
BGC GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
131
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt borrowings
$
(815,000) $
(623,251) $
(6,391)
Issuance of long-term debt, net of deferred issuance costs
965,057
754,321
(75)
Repayment of short-term borrowings from related parties
(275,000)
—
—
Issuance of short term borrowings from related parties
275,000
—
—
Earnings distributions to limited partnership interests and other noncontrolling interests
(7,805)
(19,041)
(28,877)
Redemption and repurchase of equity awards
(138,894)
(117,867)
(76,219)
Dividends to stockholders
(34,165)
(17,381)
(14,859)
Repurchase of Class A common stock
(262,211)
(114,580)
(103,888)
Proceeds from sale of Cantor units in BGC Holdings
—
11,539
1,487
Short term borrowings, net of repayments
—
(1,917)
—
Proceeds from non-controlling interests
171,667
—
—
Payments on acquisition earn-outs
(1,000)
(18,703)
(4,384)
Other
(26,667)
—
—
Net cash provided by (used in) financing activities
$
(149,018) $
(146,880) $
(233,206)
Effect of exchange rate changes on Cash and cash equivalents, and Cash segregated
under regulatory requirements
(8,961)
3,270
(2,615)
Net increase (decrease) in Cash and cash equivalents, and Cash segregated under
regulatory requirements including Cash and Cash segregated under regulatory
requirements classified within assets held for sale
60,377
170,886
(64,789)
Less: net increase (decrease) in cash classified within assets held for sale
—
—
—
Net increase (decrease) in Cash and cash equivalents, and Cash segregated under
regulatory requirements
60,377
170,886
(64,789)
Cash and cash equivalents, and Cash segregated under regulatory requirements at
beginning of period
672,896
502,010
566,799
Cash and cash equivalents, and Cash segregated under regulatory requirements at
end of period
$
733,273
$
672,896
$
502,010
Supplemental cash information:
Cash paid during the period for taxes
$
103,524
$
70,718
$
35,782
Cash paid during the period for interest
88,392
80,664
53,655
Supplemental non-cash information:
Issuance of Class A common stock upon exchange of limited partnership interests
$
—
$
45,868
$
34,889
Issuance of Class A and contingent Class A common stock and limited partnership
interests for acquisitions
8,520
7,275
2,710
ROU assets and liabilities
20,109
27,201
44,123
Year Ended December 31,
2024
2023
2022
The accompanying Notes to the Consolidated Financial Statements are an integral part of these financial statements.
BGC GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS—(Continued)
(in thousands)
132
BGC GROUP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Year Ended December 31, 2022
(in thousands, except share amounts)
BGC Group, Inc. Stockholders
Class A
Common
Stock
Class B
Common
Stock
Additional
Paid-in
Capital
Treasury
Stock
Retained
Deficit
Accumulated
Other
Comprehensive
Income (Loss)
Noncontrolling
Interest in
Subsidiaries
Total
Balance, January 1, 2022
$
4,359
$
459
$
2,451,135
$
(623,734) $
(1,171,919) $
(40,548) $
43,563
$
663,315
Consolidated net income (loss)
—
—
—
—
48,712
—
10,155
58,867
Other comprehensive gain, net of tax
—
—
—
—
—
(4,883)
(785)
(5,668)
Equity-based compensation, 3,284,120 shares
33
—
10,599
—
—
—
3,314
13,946
Dividends to common stockholders
—
—
—
—
(14,859)
—
—
(14,859)
Earnings distributions to limited partnership interests
and other noncontrolling interests
—
—
—
—
—
—
(7,598)
(7,598)
Grant of exchangeability and redemption of limited
partnership interests, issuance of 30,998,136 shares
310
—
92,245
—
—
—
30,286
122,841
Issuance of Class A common stock (net of costs),
500,697 shares
5
—
3,780
—
—
—
17
3,802
Redemption of FPUs, 113,203 units
—
—
—
—
—
—
(249)
(249)
Repurchase of Class A common stock, 27,086,884
shares
—
—
—
(87,507)
—
—
(16,381)
(103,888)
Forfeiture of Class A common stock, 66,693 shares
—
—
(8)
(213)
—
—
(41)
(262)
Contributions of capital to and from Cantor for equity-
based compensation
—
—
(1,946)
—
—
—
(624)
(2,570)
Grant of exchangeability, redemption of limited
partnership interests and issuance of Class A common
stock and RSUs for acquisitions, 1,205,767 shares
12
—
2,279
—
—
—
419
2,710
Cantor purchase of Cantor units from BGC Holdings
upon redemption of FPUs, 833,515 units
—
—
—
—
—
—
1,487
1,487
Other
—
—
1,334
—
—
—
—
1,334
Balance, December 31, 2022
$
4,719
$
459
$
2,559,418
$
(711,454) $
(1,138,066) $
(45,431) $
63,563
$
733,208
The accompanying Notes to the Consolidated Financial Statements are an integral part of these financial statements.
133
BGC GROUP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Year Ended December 31, 2023
(in thousands, except share amounts)
BGC Group, Inc. Stockholders
Class A
Common
Stock
Class B
Common
Stock
Additional
Paid-in
Capital
Treasury
Stock
Retained
Deficit
Accumulated
Other
Comprehensive
Income (Loss)
Noncontrolling
Interest in
Subsidiaries
Total
Balance, January 1, 2023
$
4,719
$
459
$
2,559,418
$
(711,454) $
(1,138,066) $
(45,431) $
63,563
$
733,208
Consolidated net income (loss)
—
—
—
—
36,265
—
2,510
38,775
Other comprehensive income (loss), net of tax
—
—
—
—
—
6,849
758
7,607
Equity-based compensation, 14,758,605 shares
139
—
124,825
8
—
—
1,766
126,738
Dividends to common stockholders and participating
RSU holders
—
—
—
—
(17,381)
—
—
(17,381)
Earnings distributions to limited partnership interests
and other noncontrolling interests
—
—
(16,652)
—
—
—
(12,294)
(28,946)
Grant of exchangeability and redemption of limited
partnership interests, issuance of 29,118,664 shares
291
—
86,505
—
—
—
26,405
113,201
Issuance of Class A common stock (net of costs),
518,191 shares
5
—
195
—
—
—
14
214
Redemption of FPUs, 184,990 units
—
—
(155)
—
—
—
(547)
(702)
Repurchase of Class A common stock, 23,250,551
shares
—
—
—
(107,889)
—
—
(6,691)
(114,580)
Forfeiture of Class A common stock, 1,428,363 shares
—
—
331
(1,410)
—
—
(111)
(1,190)
Contributions of capital to and from Cantor for equity-
based compensation
—
—
2,666
—
—
—
116
2,782
Grant of exchangeability, redemption of limited
partnership interests and issuance of Class A common
stock and RSUs for acquisitions, 5,504,698 shares
55
—
6,843
—
—
—
377
7,275
Cantor purchase of Cantor units from BGC Holdings
upon redemption of FPUs, 6,368,964 units
—
—
—
—
—
—
11,539
11,539
Redemption of FPUs and issuance of RSUs due to the
Corporate Conversion
—
—
12,410
—
—
—
2,096
14,506
Cantor units converted into shares of BGC Group Class
B common stock due to the Corporate Conversion,
63,974,374 shares
—
640
75,788
—
—
—
(76,428)
—
Restricted stock awards granted upon conversion of
limited partnership interests due to the Corporate
Conversion, 38,610,233 shares
386
—
(386)
—
—
—
—
—
Conversion of Class B common stock to Class A
common stock, 405,801 shares
4
(4)
—
—
—
—
—
—
Cancellation of BGC Partners Inc. Treasury Stock due
to Corporate Conversion, 156,386,616 shares
(1,563)
—
(751,768)
753,331
—
—
—
—
Other
—
—
5,110
—
—
—
—
5,110
Balance, December 31, 2023
$
4,036
$
1,095
$
2,105,130
$
(67,414) $
(1,119,182) $
(38,582) $
13,073
$
898,156
The accompanying Notes to the Consolidated Financial Statements are an integral part of these financial statements.
134
BGC GROUP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Year Ended December 31, 2024
(in thousands, except share amounts)
BGC Group, Inc. Stockholders
Class A
Common
Stock
Class B
Common
Stock
Additional
Paid-in
Capital
Treasury
Stock
Retained
Deficit
Accumulated
Other
Comprehensive
Income (Loss)
Noncontrolling
Interest in
Subsidiaries
Total
Balance, January 1, 2024
$
4,036
$
1,095
$
2,105,130
$
(67,414) $
(1,119,182) $
(38,582) $
13,073
$
898,156
Consolidated net income (loss)
—
—
—
—
126,988
—
(3,760)
123,228
Other comprehensive income (loss), net of tax
—
—
—
—
—
(21,267)
(248)
(21,515)
Equity-based compensation, 15,838,276 shares
194
—
170,731
(36)
—
—
—
170,889
Dividends to common stockholders and participating
RSU holders
—
—
—
—
(34,165)
—
—
(34,165)
Issuance of Class A common stock (net of costs),
314,591 shares
3
—
(1,242)
—
—
—
—
(1,239)
Repurchase of Class A common stock, 31,573,031
shares
—
—
—
(262,211)
—
—
—
(262,211)
Forfeiture of Class A common stock, 1,439,575 shares
—
—
1,001
(2,067)
—
—
—
(1,066)
Contributions of capital to and from Cantor for equity-
based compensation
—
—
51,462
—
—
—
—
51,462
Issuance of Class A common stock and RSUs for
acquisition 1,061,665 shares
11
—
8,509
—
—
—
—
8,520
Contributions from FMX Equity Partners
—
—
—
—
—
—
171,667
171,667
Other
—
—
(24,487)
—
—
—
—
(24,487)
Balance, December 31, 2024
$
4,244
$
1,095
$
2,311,104
$
(331,728) $
(1,026,359) $
(59,849) $
180,732
$
1,079,239
For the Year Ended December 31,
2024
2023
2022
Dividends declared per share of common stock
$
0.07
$
0.04
$
0.04
Dividends declared and paid per share of common stock
$
0.07
$
0.04
$
0.04
The accompanying Notes to the Consolidated Financial Statements are an integral part of these financial statements.
135
BGC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Note 1
Organization and Basis of Presentation
137
Note 2
Limited Partnership Interests in BGC Holdings and Newmark Holdings
141
Note 3
Summary of Significant Accounting Policies
144
Note 4
Acquisitions
152
Note 5
Divestitures
153
Note 6
Earnings Per Share
153
Note 7
Stock Transactions and Unit Redemptions
155
Note 8
Financial Instruments Owned, at Fair Value
158
Note 9
Collateralized Transactions
158
Note 10
Receivables from and Payables to Broker-Dealers, Clearing Organizations, Customers and Related
Broker-Dealers
158
Note 11
Derivatives
159
Note 12
Fair Value of Financial Assets and Liabilities
160
Note 13
Related Party Transactions
163
Note 14
Investments
173
Note 15
Fixed Assets, Net
175
Note 16
Goodwill and Other Intangible Assets, Net
175
Note 17
Notes Payable and Other Borrowings
177
Note 18
Compensation
182
Note 19
Commitments, Contingencies and Guarantees
187
Note 20
Income Taxes
190
Note 21
Regulatory Requirements
193
Note 22
Segment, Geographic and Product Information
194
Note 23
Revenues from Contracts with Customers
196
Note 24
Leases
197
Note 25
Current Expected Credit Losses (CECL)
199
Note 26
Supplemental Balance Sheet Information
200
Note 27
Subsequent Events
200
136
1.
Organization and Basis of Presentation
Business Overview
BGC is a leading global marketplace, data, and financial technology company that 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, the Company provides brokerage
services across foreign exchange, energy, commodities, shipping, equities, and futures and options. The Company also provides
network and connectivity solutions, market data and related information services, and post-trade services.
BGC’s integrated platform is designed to provide flexibility to customers with regard to price discovery, trade
execution and transaction processing, as well as accessing liquidity through our platforms, for transactions executed either OTC
or through an exchange. Through the Company’s electronic brands, BGC Group offers several trade execution, market
infrastructure and connectivity services, as well as post-trade services.
The Company’s clients include many of the world’s largest banks, broker-dealers, trading firms, hedge funds,
governments, corporations, investment firms, commodity trading firms and end users, such as producers and consumers. BGC
is a global operation with offices across all major geographies, including New York and London, as well as in Bahrain, Beijing,
Bogota, Brisbane, Cape Town, Chicago, Copenhagen, Dubai, Dublin, Frankfurt, Geneva, Hong Kong, Houston, Johannesburg,
Madrid, Manila, Melbourne, Mexico City, Miami, Milan, Monaco, Nyon, Paris, Perth, Rio de Janeiro, Santiago, São Paulo,
Seoul, Shanghai, Singapore, Sydney, Tel Aviv, Tokyo, Toronto, Wellington and Zurich.
Corporate Conversion
Effective as of 12:01 a.m., Eastern Time, on July 1, 2023, BGC Holdings reorganized from a Delaware limited
partnership into a Delaware limited liability company through a merger with and into Holdings Merger Sub, with Holdings
Merger Sub continuing as a direct subsidiary of BGC Partners. Effective as of 12:02 a.m., Eastern Time, on July 1, 2023,
Merger Sub 1 merged with and into BGC Partners, with BGC Partners continuing as a direct subsidiary of BGC Group. At the
same time, Merger Sub 2 merged with and into Holdings Merger Sub, with Holdings Merger Sub continuing as a subsidiary of
BGC Group. As a result of the Corporate Conversion Mergers, BGC Partners and BGC Holdings became wholly owned
subsidiaries of BGC Group.
In the Holdings Reorganization Merger, each unit of BGC Holdings outstanding as of immediately prior to the
Holdings Reorganization Merger was converted into a substantially equivalent equity interest in Holdings Merger Sub.
In the Corporate Merger, each share of Class A common stock, par value $0.01 per share, of BGC Partners and each
share of Class B common stock, par value $0.01 per share, of BGC Partners outstanding was converted into one share of Class
A common stock, par value $0.01 per share, of BGC Group and one share of Class B common stock, par value $0.01 per share,
of BGC Group, respectively.
In connection with, but prior to, the Corporate Conversion, the Company completed various transactions which
included:
•
the redemption of certain non-exchangeable limited partnership units in connection with the issuance of shares of BGC
Partners Class A common stock and the accompanying tax payments, which led to an equity-based compensation
charge of $60.9 million;
•
the exchange of the remaining 1.5 million exchangeable limited partnership units of BGC Holdings held by employees
on June 30, 2023, for 1.0 million shares, after tax withholding, of BGC Partners Class A common stock;
•
the redemption of certain non-exchangeable limited partnership units of BGC Holdings held by employees and
issuance of 16.9 million BGC Partners RSUs on a one-for-one basis on June 30, 2023;
•
the redemption of certain non-exchangeable Preferred Units of BGC Holdings held by employees and issuance of
$49.2 million of BGC Partners RSU Tax Accounts on June 30, 2023, based on the fixed cash value of the Preferred
Units redeemed;
•
the redemption of the remaining 5.6 million non-exchangeable FPUs and issuances of BGC Partners RSUs on a one-
for-one basis on June 30, 2023, which in turn reduced the “Redeemable Partnership Interest” to zero with an offsetting
impact to “Total equity” in the Company’s Consolidated Statements of Financial Condition as of June 30, 2023; and
•
the purchase on June 30, 2023 by Cantor from BGC Holdings of an aggregate of 5,425,209 Cantor units for an
aggregate consideration of $9,715,772 as a result of the redemption of 5,425,209 FPUs, and 324,223 Cantor units for
an aggregate consideration of $598,712 as a result of the exchange of 324,223 FPUs.
137
As a result of the Corporate Conversion:
•
64.0 million Cantor units, including 5.7 million purchased on June 30, 2023, were converted into shares of BGC
Group Class B common stock, subject to the terms and conditions of the Corporate Conversion Agreement, provided
that a portion of the 64.0 million shares of BGC Group Class B common stock issued to Cantor will exchange into
BGC Group Class A common stock in the event that BGC Group does not issue at least $75,000,000 in shares of BGC
Group Class A or B common stock in connection with certain acquisition transactions prior to July 1, 2030, the
seventh anniversary of the Corporate Conversion;
•
BGC Group assumed all BGC Partners RSUs, RSU Tax Accounts or restricted stock awards outstanding as of June 30,
2023; and
•
non-exchangeable limited partnership units of BGC Holdings were converted into equity awards denominated in cash,
restricted stock and/or RSUs of BGC Group, each as further set forth in the Corporate Conversion Agreement. BGC
Group granted 38.6 million restricted stock awards, 25.3 million RSUs, and $74.0 million of RSU Tax Accounts upon
the conversion of the non-exchangeable shares of Holdings Merger Sub.
There were no limited partnership units of BGC Holdings remaining after the Corporate Conversion was completed.
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.
In connection with the Corporate Conversion on July 1, 2023, the BGC Holdings Limited Partnership Agreement was
terminated, and the BGC Holdings, L.P. Participation Plan was terminated.
In connection with the Corporate Conversion on July 1, 2023, BGC Group amended and restated its certificate of
incorporation to reflect an increase in the authorized shares of BGC Group Class A common stock to 1,500,000,000; an
increase in the authorized shares of BGC Group Class B common stock to 300,000,000; and a provision providing for
exculpation to officers of BGC Group pursuant to Section 102(b)(7) of the DGCL. Additionally, BGC Group amended and
restated its bylaws to adopt a provision providing that Delaware courts shall be the exclusive forum for certain matters.
Basis of Presentation
The Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements have been
prepared pursuant to the rules and regulations of the SEC and in conformity with U.S. GAAP. The Company’s Consolidated
Financial Statements include the Company’s accounts and all subsidiaries in which the Company has a controlling interest.
Intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to
previously reported amounts to conform to the current presentation.
During the first quarter of 2022, the Company changed the name of the brokerage product line formerly labeled as
“Equity derivatives and cash equity” to “Equities” to better align the caption with the underlying activity. The change did not
result in any reclassification of revenues and had no impact on the Company’s Total brokerage revenues for the year ended
December 31, 2022.
During the second quarter of 2022, the Company combined “Realized losses (gains) on marketable securities,”
“Unrealized losses (gains) on marketable securities,” and “Losses (gains) on other investments” on the unaudited Condensed
Consolidated Statements of Cash Flows into “Losses (gains) on marketable securities and other investments.” The recognition
of gains and losses related to these investments were similar in nature and were immaterial to the financial statements for the
year ended December 31, 2022.
During the third quarter of 2022, the Company renamed “Securities owned” as “Financial instruments owned, at fair
value” and combined it with “Marketable securities” on the unaudited Condensed Consolidated Statements of Financial
Condition. In addition, “Losses (gains) on marketable securities and other investments” was renamed as “Unrealized/realized
losses (gains) on financial instruments owned, at fair value and other investments” on the unaudited Condensed Consolidated
Statements of Cash Flows.
During the second quarter of 2023, the Company renamed “Data, software and post-trade” as “Data, network and post-
trade” on the unaudited Condensed Consolidated Statements of Operations.
138
During the third quarter of 2023, the Company renamed “Net income (loss) available to common stockholders” as
“Net income (loss) attributable to common stockholders” under the Basic earnings (loss) per share calculation on the unaudited
Condensed Consolidated Statements of Operations.
During the first quarter of 2024, the Company changed the name of the brokerage product line formerly labeled as
“Energy and Commodities” to “Energy, Commodities, and Shipping” to better reflect the integrated operations of these
businesses. The change did not result in any change in the classification of revenues and had no impact on the Company’s Total
brokerage revenues. See Note 22—“Segment and Geographic Information.”
The Consolidated Financial Statements contain all adjustments (consisting only of normal and recurring adjustments)
that, in the opinion of management, are necessary for a fair presentation of the Consolidated Statements of Financial Condition,
the Consolidated Statements of Operations, the Consolidated Statements of Comprehensive Income (Loss), the Consolidated
Statements of Cash Flows and the Consolidated Statements of Changes in Equity of the Company for the periods presented.
Recently Adopted Accounting Pronouncements
In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract
Assets and Contract Liabilities from Contracts with Customers. The standard improves the accounting for acquired revenue
contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the
recognition of an acquired contract liability, as well as payment terms and their effect on subsequent revenue recognized by the
acquirer. The ASU requires companies to apply guidance in ASC 606, Revenue from Contracts with Customers, to recognize
and measure contract assets and contract liabilities from contracts with customers acquired in a business combination, and, thus,
creates an exception to the general recognition and measurement principle in ASC 805, Business Combinations. BGC adopted
the standard on the required effective date beginning January 1, 2023 using a prospective transition method for business
combinations occurring on or after the effective date. The adoption of this guidance did not have a material impact on the
Company’s Consolidated Financial Statements.
In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled
Debt Restructurings and Vintage Disclosures. The guidance is intended to improve the decision usefulness of information
provided to investors about certain loan refinancings, restructurings, and write-offs. The standard eliminates the recognition and
measurement guidance on TDRs for creditors that have adopted ASC 326, Financial Instruments—Credit Losses and requires
them to make enhanced disclosures about loan modifications for borrowers experiencing financial difficulty. The new guidance
also requires public business entities to present current-period gross write-offs (on a current year-to-date basis for interim-
period disclosures) by year of origination in their vintage disclosures. BGC adopted the standard on the required effective date
beginning January 1, 2023. The guidance for recognition and measurement of TDRs was applied using a prospective transition
method, and the amendments related to disclosures will be applied prospectively. The adoption of this guidance did not have a
material impact on the Company’s Consolidated Financial Statements.
In September 2022, the FASB issued ASU No. 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50):
Debt Restructurings Disclosure of Supplier Finance Program Obligations. The guidance requires entities to disclose the key
terms of supplier finance programs they use in connection with the purchase of goods and services along with information
about their obligations under these programs, including a rollforward of those obligations. BGC adopted the standard on the
required effective date beginning on January 1, 2023, except for the rollforward requirement, which became effective for the
Company beginning on January 1, 2024. The guidance was adopted using a retrospective application to all periods in which a
balance sheet is presented, and the rollforward disclosure requirement will be applied prospectively. The adoption of the
guidance that was effective beginning January 1, 2023 did not have a material impact on the Company’s Consolidated Financial
Statements. The rollforward disclosure requirement did not have a material impact on the Company’s Consolidated Financial
statements.
In December 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset
Date of Topic 848. ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform
on Financial Reporting provided optional guidance to ease the potential burden in accounting for (or recognizing the effects of)
reference rate reform on financial reporting. The ASU was effective upon issuance and generally could be applied through
December 31, 2022. Because the relief in ASC 848, Reference Rate Reform may not cover a period of time during which a
significant number of modifications may take place, the amendments in ASU No. 2022-06 deferred the sunset date from
December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in ASC 848. The
ASU was effective upon issuance. The adoption of this guidance did not have an impact on the Company’s Consolidated
Financial Statements.
139
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable
Segment Disclosures. The guidance was issued in response to requests from investors for companies to disclose more
information about their financial performance at the segment level. The ASU does not change how a public entity identifies its
operating segments, aggregates them or applies the quantitative thresholds to determine its reportable segments. The standard
requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis, and to
provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that were previously required
annually. Public entities with a single reportable segment are required to provide the new disclosures and all the disclosures
previously required under ASC 280. BGC adopted the standard on the required effective date for the Company’s financial
statements issued for the annual reporting periods beginning on January 1, 2024 and will apply the guidance for the interim
periods beginning on January 1, 2025. Refer to Note 22—“Segment and Geographic Information.” The adoption of the new
guidance did not have an impact on the Company’s Consolidated Financial Statements.
New Accounting Pronouncements
In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements—Codification Amendments in
Response to the SEC’s Disclosure Update and Simplification Initiative. The standard is expected to clarify or improve
disclosure and presentation requirements of a variety of ASC topics, allow users to more easily compare entities subject to the
SEC’s existing disclosure requirements with those entities that were not previously subject to the requirements, and align the
requirements in the Codification with the SEC’s regulations. The effective date for the guidance will be the date on which the
SEC’s removal of the related disclosure from Regulation S-X or Regulation S-K becomes effective. If by June 30, 2027 the
SEC has not removed the applicable requirements from Regulation S-X or Regulation S-K, the pending content of the related
amendment will be removed from the Codification and will not become effective for any entity. Management is currently
evaluating the impact of the new standard on the Company’s Consolidated Financial Statements.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax
Disclosures. The standard improves the transparency of income tax disclosures by requiring consistent categories and greater
disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. The ASU also
includes certain other amendments to improve the effectiveness of income tax disclosures. The new guidance will become
effective for the Company’s financial statements issued for annual reporting periods beginning on January 1, 2025, will require
prospective presentation with an option for entities to apply it retrospectively for each period presented, and early adoption is
permitted. Management is currently evaluating the impact of the new standard on the Company’s Consolidated Financial
Statements.
In March 2024, the FASB issued ASU No. 2024-01, Compensation—Stock Compensation (Topic 718): Scope
Application of Profits Interest and Similar Awards. The standard is intended to reduce the complexity in determining whether
profits interests and similar awards are in the scope of ASC 718 and to reduce diversity in practice. The new guidance applies to
all reporting entities that grant profits interest awards or similar awards to employees or nonemployees in exchange for goods or
services. The ASU adds an example to ASC 718 that illustrates how to apply the scope guidance to determine whether a profits
interest award should be accounted for as a share-based payment arrangement under ASC 718 or another accounting standard.
The new guidance became effective for the Company beginning on January 1, 2025 and will be applied prospectively to profits
interest awards granted or modified on or after the adoption date. The adoption of the new guidance is not expected to have a
material impact on the Company’s Consolidated Financial Statements.
In March 2024, the FASB issued ASU No. 2024-02, Codification Improvements—Amendments to Remove References
to the Concepts Statements. The Conceptual Framework establishes concepts that the Board considers in developing standards.
The ASU was issued to remove references to the Conceptual Framework in the Codification. The FASB noted that references to
the Concepts Statements in the Codification could have implied that the Concepts Statements are authoritative. Also, some of
the references removed were to Concepts Statements that are superseded. The new guidance became effective for the Company
beginning on January 1, 2025 and will be applied prospectively to all new transactions recognized on or after the adoption date.
The adoption of the new guidance is not expected to have a material impact on the Company’s Consolidated Financial
Statements.
140
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—
Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The standard improves
financial reporting and responds to investor input that additional expense detail is fundamental to understanding the
performance of an entity, assessing its prospects for future cash flows, and comparing its performance over time and with that
of other companies. The new guidance requires public business entities to disclose in the notes to financial statements specified
information about certain costs and expenses at each interim and annual reporting period, including the amounts of employee
compensation, depreciation, and intangible asset amortization for each income statement line item that contains those expenses.
Specified expenses, gains or losses that are already disclosed under existing U.S. GAAP will be required by the ASU to be
included in the disaggregated income statement expense line item disclosures, and any remaining amounts will need to be
described qualitatively. Separate disclosures of total selling expenses and an entity’s definition of those expenses will also be
required. The new guidance will become effective for the Company’s financial statements issued for annual reporting periods
beginning on January 1, 2027 and interim reporting periods beginning on January 1, 2028, will require either prospective or
retrospective presentation, and early adoption is permitted. Management is currently evaluating the impact of the new standard
on the Company’s Consolidated Financial Statements.
SEC Rule on Climate-Related Disclosures
On March 6, 2024 the SEC adopted the final rules, The Enhancement and Standardization of Climate-Related
Disclosures for Investors, that would require registrants to provide climate-related disclosures in a note to the audited financial
statements. The disclosures would include certain effects of severe weather events and other natural conditions, including the
aggregate amounts and where in the financial statements they are presented. If carbon offsets or renewable energy credits or
certificates (RECs) are deemed a material component of the registrant’s plans to achieve its disclosed climate-related targets,
registrants would be required to disclose information about the offsets and RECs. Registrants would also be required to disclose
whether and how (1) exposures to risks and uncertainties associated with, or known impacts from, severe weather events and
other natural conditions and (2) any disclosed climate-related targets or transition plans materially impacted the estimates and
assumptions used in preparing the financial statements. Finally, registrants would be required to disclose additional contextual
information about the above disclosures, including how each financial statement effect was derived and the accounting policy
decisions made to calculate the effects, for the most recently completed fiscal year and, if previously disclosed or required to be
disclosed, for the historical fiscal year for which audited consolidated financial statements are included in the filing. Subsequent
to the issuance, the SEC has released an order staying the final rules pending judicial review of all of the petitions challenging
the rules. Absent the stay, the rules would have been effective for the Company on May 28, 2024 and phased in starting in
2025. Management is currently monitoring the developments pertaining to the rules and any resulting potential impacts on the
Company’s Consolidated Financial Statements.
2.
Limited Partnership Interests in BGC Holdings and Newmark Holdings
Prior to the Corporate Conversion, BGC Partners was a holding company with no direct operations which conducted
substantially all of its operations through its operating subsidiaries. Virtually all of BGC Partners’ consolidated assets and net
income were those of consolidated variable interest entities. BGC Holdings was a consolidated subsidiary of BGC Partners for
which BGC Partners was the general partner. BGC Partners and BGC Holdings jointly owned BGC U.S. OpCo and BGC
Global OpCo, the two operating partnerships of the Company. In addition, Newmark Holdings is a consolidated subsidiary of
Newmark for which Newmark is the general partner. Newmark and Newmark Holdings jointly own Newmark OpCo, the
operating partnership. Listed below are the limited partnership interests in BGC Holdings, prior to the Corporate Conversion,
and Newmark Holdings. The FPUs, LPUs and limited partnership interests held by Cantor, each as described below,
collectively represent all of the limited partnership interests in BGC Holdings, prior to the Corporate Conversion, and Newmark
Holdings. The Corporate Conversion had no impact on Newmark and its organizational structure, nor any limited partnership
interests, described below, held by BGC employees in Newmark Holdings.
As a result of the Separation, limited partnership interests in Newmark Holdings were distributed to the holders of
limited partnership interests in BGC Holdings, whereby each holder of BGC Holdings limited partnership interests at that time
who held a BGC Holdings limited partnership interest received a corresponding Newmark Holdings limited partnership interest,
determined by the Contribution Ratio, which was equal to a BGC Holdings limited partnership interest multiplied by one
divided by 2.2, divided by the Exchange Ratio. Initially, the Exchange Ratio equaled one, so that each Newmark Holdings
limited partnership interest was exchangeable for one share of Newmark Class A common stock. For reinvestment, acquisition
or other purposes, Newmark may determine on a quarterly basis to distribute to its stockholders a smaller percentage than
Newmark Holdings distributes to its equity holders (excluding tax distributions from Newmark Holdings) of cash that it
received from Newmark OpCo. In such circumstances, the Separation and Distribution Agreement provides that the Exchange
Ratio will be reduced to reflect the amount of additional cash retained by Newmark as a result of the distribution of such
smaller percentage, after the payment of taxes. The Exchange Ratio as of December 31, 2024 equaled 0.9279.
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Founding/Working Partner Units
Founding/Working Partners had FPUs in BGC Holdings and have FPUs in Newmark Holdings. As of June 30, 2023,
in connection with the Corporate Conversion, all FPUs in BGC Holdings were redeemed or exchanged. The Corporate
Conversion had no impact on FPUs held by partners of Newmark Holdings. Prior to the Corporate Conversion, BGC Partners
accounted for FPUs outside of permanent capital, as “Redeemable partnership interest,” in the Company’s Consolidated
Statements of Financial Condition. This classification was applicable to Founding/Working Partner units because these units
were redeemable upon termination of a partner, including a termination of employment, which could be at the option of the
partner and not within the control of the issuer. The BGC RSUs issued for the redemption of non-exchangeable FPUs in BGC
Holdings, in connection with the Corporate Conversion, are now accounted for as a part of permanent capital.
FPUs were held by limited partners who were employees and generally received quarterly allocations of net income.
Upon termination of employment or otherwise ceasing to provide substantive services, the FPUs were generally redeemed, and
the unit holders were no longer entitled to participate in the quarterly allocations of net income. Since these allocations of net
income were cash distributed on a quarterly basis and were contingent upon services being provided by the unit holder, they
were reflected as a component of compensation expense under “Equity-based compensation and allocations of net income to
limited partnership units and FPUs” in the Company’s Consolidated Statements of Operations.
Limited Partnership Units
Certain BGC employees held LPUs in BGC Holdings and hold LPUs in Newmark Holdings (e.g., REUs, RPUs, PSUs,
and PSIs). Prior to the Separation, certain employees of both BGC and Newmark received LPUs in BGC Holdings. As a result
of the Separation, these employees were distributed LPUs in Newmark Holdings equal to a BGC Holdings LPU multiplied by
the Contribution Ratio. Subsequent to the Separation, BGC employees were only granted LPUs in BGC Holdings, and
Newmark employees are only granted LPUs in Newmark Holdings. In connection with, or as a result of, the Corporate
Conversion, certain LPUs in BGC Holdings were redeemed/converted into BGC restricted stock awards or RSUs, and upon
completion of the Corporate Conversion, there were no LPUs of BGC Holdings remaining. The Corporate Conversion had no
impact on the LPUs in Newmark Holdings held by BGC employees.
Generally, LPUs received quarterly allocations of net income, which were cash distributed and generally were
contingent upon services being provided by the unit holder. As prescribed in U.S. GAAP guidance, following the Spin-Off, 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 the Company’s 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 the Company’s Consolidated Statements of Operations. Quarterly allocations of net income on
BGC Holdings LPUs held by Newmark employees were reflected as a component of “Net income (loss) attributable to
noncontrolling interest in subsidiaries” in the Company’s Consolidated Statements of Operations, prior to the Corporate
Conversion. From time to time, the Company also issued BGC LPUs as part of the consideration for acquisitions.
Certain of these LPUs in BGC Holdings and Newmark Holdings, such as REUs, entitle the holders to receive post-
termination payments equal to the notional amount of the units 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 held by BGC
employees are accounted for as post-termination liability awards, and in accordance with U.S. GAAP guidance, the Company
records compensation expense for the awards based on the change in value at each reporting date in the Company’s
Consolidated Statements of Operations as part of “Equity-based compensation and allocations of net income to limited
partnership units and FPUs.”
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Certain BGC employees held Preferred Units in BGC Holdings and hold Preferred Units in Newmark Holdings. In
connection with, or as a result of, the Corporate Conversion, certain Preferred Units in BGC Holdings were redeemed/converted
into BGC restricted stock awards or RSU Tax Accounts, and upon completion of the Corporate Conversion, there were no
Preferred Units of BGC Holdings remaining. The Corporate Conversion had no impact on Preferred Units in Newmark
Holdings held by BGC employees. The following description of LPUs and Preferred Units in BGC Holdings is only applicable
for the period prior to the Corporate Conversion, and for LPUs and Preferred Units held by BGC employees in Newmark
Holdings is applicable to before and after the Corporate Conversion. Each quarter, the net profits of BGC Holdings and
Newmark Holdings are allocated to such units at a rate of either 0.6875% (which is 2.75% per calendar year) or such other
amount as set forth in the award documentation. These allocations are deducted before the calculation and distribution of the
quarterly partnership distribution for the remaining partnership interests and are generally contingent upon services being
provided by the unit holder. The Preferred Units are not entitled to participate in partnership distributions other than with
respect to the Preferred Distribution. Preferred Units may not be made exchangeable into Class A common stock, and are only
entitled to the Preferred Distribution; accordingly, they are not included in the fully diluted share count. The quarterly
allocations of net income on Preferred Units are reflected the same as those of the LPUs described above in the Company’s
Consolidated Statements of Operations. After deduction of the Preferred Distribution, the remaining partnership units generally
received quarterly allocations of net income based on their weighted-average pro rata share of economic ownership of the
operating subsidiaries. Preferred Units are granted in connection with the grant of certain LPUs, such as PSUs, which may be
granted exchangeability or redeemed in connection with the issuance of shares of common stock to cover the withholding taxes
owed by the unit holder, rather than issuing the gross amount of shares to employees, subject to cashless withholding of shares
to pay applicable withholding taxes.
Cantor Units
Prior to the Corporate Conversion, Cantor held limited partnership interests in BGC Holdings. Cantor units were
reflected as a component of “Noncontrolling interest in subsidiaries” in the Company’s Consolidated Statements of Financial
Condition. Cantor received allocations of net income (loss), which were cash distributed on a quarterly basis and were reflected
as a component of “Net income (loss) attributable to noncontrolling interest in subsidiaries” in the Company’s Consolidated
Statements of Operations. As a result of the Corporate Conversion, 64.0 million Cantor units were converted into shares of
BGC Group Class B common stock, subject to the terms and conditions of the Corporate Conversion Agreement, provided that
a portion of the 64.0 million shares of BGC Group Class B common stock issued to Cantor will exchange into BGC Group
Class A common stock in the event that BGC Group does not issue at least $75,000,000 in shares of BGC Group Class A or B
common stock in connection with certain acquisition transactions prior to the seventh anniversary of the Corporate Conversion.
General
Certain of the limited partnership interests, described above, were granted exchangeability into shares of BGC Class A
common stock, prior to the Corporate Conversion, or shares of Newmark Class A common stock, and additional limited
partnership interests could become exchangeable into shares of Newmark Class A common stock. In addition, prior to the
Corporate Conversion, certain limited partnership interests were granted the right to exchange into or were exchanged into a
partnership unit with a capital account, such as HDUs. HDUs had a stated capital account which was initially based on the
closing trading price of Class A common stock at the time the HDU was granted. HDUs participated in quarterly partnership
distributions and were generally not exchangeable into shares of Class A common stock.
Subsequent to the Spin-Off and prior to the Corporate Conversion, limited partnership interests in BGC Holdings held
by a partner or Cantor could become exchangeable for BGC Class A or BGC Class B common stock on a one-for-one basis. In
addition, subsequent to the Spin-Off, limited partnership interests in Newmark Holdings held by a partner or Cantor may
become exchangeable for a number of shares of Newmark Class A or Newmark Class B common stock equal to the number of
limited partnership interests multiplied by the then-current Exchange Ratio. Because limited partnership interests were included
in the Company’s fully diluted share count, if dilutive, prior to the Corporate Conversion, any previous exchanges of limited
partnership interests into shares of BGC Class A or BGC Class B common stock did not impact the fully diluted number of
shares and units outstanding. Because these limited partnership interests generally received quarterly allocations of net income,
such exchanges had no significant impact on the cash flows or equity of BGC Partners, prior to the Corporate Conversion.
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Prior to the Corporate Conversion, each quarter, net income (loss) was allocated between the limited partnership
interests and BGC Partners’ common stockholders. In quarterly periods in which BGC Partners had a net loss, the loss
allocation for FPUs, LPUs and Cantor units in BGC Holdings was allocated to Cantor and reflected as a component of “Net
income (loss) attributable to noncontrolling interest in subsidiaries” in the Company’s Consolidated Statements of Operations.
In subsequent quarters in which BGC Partners had net income, the initial allocation of income to the limited partnership
interests in BGC Holdings was to Cantor and was recorded as “Net income (loss) attributable to noncontrolling interests in
subsidiaries,” to recover any losses taken in earlier quarters, with the remaining income allocated to the limited partnership
interests. This income (loss) allocation process had no impact on the net income (loss) allocated to common stockholders.
3.
Summary of Significant Accounting Policies
Use of Estimates:
The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires
management to make estimates and assumptions that affect the reported amounts of the assets and liabilities, revenues and
expenses, and the disclosure of contingent assets and liabilities in these consolidated financial statements. Management believes
that the estimates utilized in preparing these consolidated financial statements are reasonable. Estimates, by their nature, are
based on judgment and available information. Actual results could differ materially from the estimates included in the
Company’s consolidated financial statements. Certain reclassifications have been made to previously reported amounts to
conform to the current period presentation.
Revenue Recognition:
BGC derives its revenues primarily through commissions from brokerage services, the spread between the buy and sell
prices on matched principal transactions, fees from related parties, data, network and post-trade services, and other revenues.
Commissions:
The Company derives its commission revenues from securities and commodities, whereby the Company connects
buyers and sellers in the OTC and exchange markets and assists in the negotiation of the price and other material terms. These
transactions result from the provision of service related to executing, settling and clearing transactions for customers. Trade
execution and clearing services, when provided together, represent a single performance obligation as the services are not
separately identifiable in the context of the contract. Commission revenues are recognized at a point in time on the trade-date,
when the customer obtains control of the service and can direct the use of, and obtain substantially all of the remaining benefits
from the asset. The Company records a receivable between the trade-date and settlement date when payment is received.
Principal Transactions:
Principal transaction revenues are primarily derived from matched principal transactions, whereby the Company
simultaneously agrees to buy securities from one customer and sell them to another customer. A very limited number of trading
businesses are allowed to enter into unmatched principal transactions to facilitate a customer’s execution needs for transactions
initiated by such customers. Revenues earned from principal transactions represent the spread between the buy and sell price of
the brokered security, commodity or derivative. Principal transaction revenues and related expenses are recognized on a trade-
date basis. Positions held as part of a principal transaction are marked-to-market on a daily basis.
Fees from Related Parties:
Fees from related parties consist of charges for back-office services provided to Cantor and its affiliates, including
occupancy of office space, utilization of fixed assets, accounting, operations, human resources and legal services, and
information technology. The services are satisfied over time and measured using a time-elapsed measure of progress as the
customer receives the benefits of the services evenly throughout the term of the contract. The transaction price is considered
variable consideration as the level and type of services fluctuate from period to period and revenues are recognized only to the
extent it is probable that a significant reversal in the amount of cumulative revenues recognized will not occur when the
uncertainty is resolved. Fees from related parties are determined based on the cost incurred by the Company to perform or
provide the service as evidenced by an allocation of employee expenses or a third-party invoice. Net cash settlements between
affiliates are generally performed on a monthly basis.
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Data, Network and Post-trade:
Data revenues primarily consist of subscription fees and fees from customized one-time sales provided to customers
either directly or through third-party vendors. Regarding this revenue stream, the Company determined that software
implementation, license usage, and related support services represent a single-performance obligation because the combination
of these deliverables is necessary for the customer to derive benefit from the data. As such, once implementation is complete,
monthly subscription fees are billed in advance and recognized on a straight-line basis over the life of the license period.
The Company also provides software customization services contracted through work orders that each represent a
separate performance obligation. Revenue is recognized over time using an output method as a measure of progress. As
circumstances change over time, the Company updates its measure of progress to reflect any changes in the outcome of the
performance obligation. Such updates are accounted for as a change in accounting estimate. As a practical expedient, when the
work-order period is less than 12 months, the Company recognizes revenue upon acceptance from the customer after work is
completed. The contract price is fixed and billed to the customer as combination of an upfront fee, progress fees, and a post-
delivery fee.
Other Revenues:
Other revenues are earned from various sources, including consulting income for Poten & Partners, underwriting and
advisory fees.
Other Income (Losses), Net:
Gains (Losses) on Divestitures and Sale of Investments:
Gains (losses) on divestitures and sale of investments is comprised of gains and losses recorded in connection with the
divestiture of certain businesses or sale of investments (see Note 5—“Divestitures”).
Gains (Losses) on Equity Method Investments:
Gains (losses) on equity method investments represent the Company’s pro-rata share of the net gains and losses on
investments over which the Company has significant influence but which it does not control.
Other Income (Loss):
Other income (loss) is primarily comprised of miscellaneous recoveries and gains and losses associated with the
movements related to the changes in fair value and/or hedges of Financial instruments owned, at fair value equity securities and
investments carried under the measurement alternative (see Note 8—“Financial Instruments Owned, at Fair Value” and Note 14
—“Investments”).
Segments:
The Company has one reportable segment (see Note 22—“Segment and Geographic Information”).
Cash and Cash Equivalents:
The Company considers all highly liquid investments with maturities of 90 days or less at the date of acquisition that
are not segregated under regulatory requirements, other than those used for trading purposes, to be cash equivalents. Cash and
cash equivalents include money market funds, deposits with banks, certificates of deposit, commercial paper, and U.S. Treasury
securities.
Cash Segregated Under Regulatory Requirements:
Cash segregated under regulatory requirements represents funds received in connection with customer activities that
the Company is obligated to segregate or set aside to comply with regulations mandated by authorities such as the SEC and
FINRA in the U.S. and the FCA in the U.K. that have been promulgated to protect customer assets.
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Financial Instruments Owned, at Fair Value:
Financial instruments owned, at fair value primarily consist of unencumbered U.S. Treasury bills held for liquidity
purposes as well as equity securities with readily determinable fair value, foreign government bonds, and corporate bonds. Debt
securities presented within Financial instruments owned, at fair value are classified as trading and marked-to-market daily based
on current listed market prices (or, when applicable, broker or dealer quotes), with the resulting gains and losses included in
operating income in the current period. Unrealized and realized gains and losses from changes in fair value of these debt
securities are included as part of “Principal transactions” in the Company’s Consolidated Statements of Operations. In
accordance with the guidance on recognition and measurement of equity investments with readily determinable fair value, the
Company carries these equity securities at fair value and recognizes any changes in fair value currently within “Other income
(loss)” in the Company’s Consolidated Statements of Operations. See Note 8—“Financial Instruments Owned, at Fair Value”
for additional information.
Fair Value:
U.S. GAAP defines fair value as the price received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date and further expands disclosures about such fair value
measurements.
The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair
value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities
(Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair
value hierarchy are as follows:
Level 1 measurements – Unadjusted quoted prices in active markets that are accessible at the measurement date for
identical assets or liabilities.
Level 2 measurements – Quoted prices in markets that are not active or financial instruments for which all significant
inputs are observable, either directly or indirectly.
Level 3 measurements – Prices or valuations that require inputs that are both significant to the fair value measurement
and unobservable.
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant
to the fair value measurement.
In determining fair value, the Company separates financial instruments owned and financial instruments sold, but not
yet purchased into two categories: cash instruments and derivative contracts.
Cash Instruments – Cash instruments are generally classified within Level 1 or Level 2. The types of instruments
generally classified within Level 1 include most U.S. government securities, certain sovereign government obligations, and
actively traded listed equities. The Company does not adjust the quoted price for such instruments. The types of instruments
generally classified within Level 2 include agency securities, most investment-grade and high-yield corporate bonds, certain
sovereign government obligations, money market securities, and less liquid listed equities, and state, municipal and provincial
obligations.
Derivative Contracts – Derivative contracts can be exchange-traded or OTC. Exchange-traded derivatives typically fall
within Level 1 or Level 2 of the fair value hierarchy depending on whether they are deemed to be actively traded or not. The
Company generally values exchange-traded derivatives using the closing price of the exchange-traded derivatives. OTC
derivatives are valued using market transactions and other market evidence whenever possible, including market-based inputs
to models, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. For OTC
derivatives that trade in liquid markets, such as generic forwards, swaps and options, model inputs can generally be verified and
model selection does not involve significant management judgment. Such instruments are typically classified within Level 2 of
the fair value hierarchy.
See Note 12—“Fair Value of Financial Assets and Liabilities” for more information on the fair value of financial
assets and liabilities.
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Receivables from and Payables to Broker-Dealers, Clearing Organizations, Customers and Related Broker-Dealers:
Receivables from and payables to broker-dealers, clearing organizations, customers and related broker-dealers
primarily represent principal transactions for which the stated settlement dates have not yet been reached and principal
transactions which have not settled as of their stated settlement dates, cash held at clearing organizations and exchanges to
facilitate settlement and clearance of matched principal transactions, and spreads on matched principal transactions that have
not yet been remitted from/to clearing organizations and exchanges. Also included are amounts related to open derivative
contracts, which are generally executed on behalf of the Company’s customers. A portion of the unsettled principal transactions
and open derivative contracts that constitute receivables from and payables to broker-dealers, clearing organizations, customers
and related broker-dealers are with related parties (see Note 13—“Related Party Transactions” for more information regarding
these receivables and payables).
Current Expected Credit Losses:
In accordance with U.S. GAAP guidance, Financial Instruments—Credit Losses, the Company presents its financial
assets that are measured at amortized cost, net of an allowance for credit losses, which represents the amount expected to be
collected over their estimated life. Expected credit losses for newly recognized financial assets carried at amortized cost, as well
as changes to expected lifetime credit losses during the period, are recognized in earnings. The CECL methodology’s impact on
expected credit losses, among other things, reflects the Company’s view of the current state of the economy, forecasted
macroeconomic conditions and the Company’s portfolios. Refer to Note 25—“Current Expected Credit Losses (CECL)” for
additional information.
Accrued Commissions and Other Receivables, Net:
The Company has accrued commissions receivable from securities and commodities transactions. Accrued
commissions receivable are presented net of allowance for credit losses of approximately $23.3 million and $20.9 million as of
December 31, 2024 and 2023, respectively. The allowance is based on management’s estimate and reviewed periodically based
on the facts and circumstances of each outstanding receivable.
The Company’s CECL methodology for Accrued commissions receivable follows a PD/LGD framework with
adjustments for the macroeconomic outlook, with the calculation performed at a counterparty level. The receivable balance for
each counterparty is the outstanding receivable amount adjusted for any volume discounts. Accrued commissions receivable are
not subject to an interest income accrual. The Company writes off a receivable in the period in which such balance is deemed
uncollectible.
The PD rate is sourced from Moody’s Annual Default Study for Corporates and it corresponds to the 1983-2023
average 1-year default rate by rating. The Moody’s quarterly updated data is used as well, if deemed appropriate. A significant
number of the Company’s counterparties are publicly rated, and, therefore, the Moody’s PD rate is used as a proxy based on the
counterparty’s external rating. In addition, the Company maintains internal obligor ratings that map to Moody’s long-term
ratings.
The LGD rate is derived from the Basel Committee’s June 2004 Second Basel Accord on international banking laws
and regulations. The Company understands that the LGD assumption is a well-known industry benchmark for unsecured
credits, which aligns with the unsecured nature of these receivables. Management considered that historically the Company has
collected on substantially all its receivables, and, therefore, the LGD assumption is a reasonable benchmark in absence of
internal data from which to develop an LGD measure.
The macroeconomic adjustment is based on an average of the outlook scenarios for changes in the Real GDP growth
rate for advanced economies over the next year. Historical and forecast data for this metric is obtained from the International
Monetary Fund’s World Economic Outlook database. The Company believes that changes in expected credit losses for its
counterparties are impacted by changes in broad economic activity and, therefore, determined that the Real GDP growth rate
was a reasonable metric to evaluate for macroeconomic adjustments. Further, given that the Company’s receivables are related
to counterparties with global operations, management sourced the data for this metric as applicable to advanced economies. The
Company notes that, given the short-term nature of these receivables, a forecast beyond 1 year is neither required nor
appropriate, and, therefore, the adjustment also covers the approximated life of these assets with no need for reversion.
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Loans, Forgivable Loans, and Other Receivables from Employees and Partners, Net:
The Company has 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 not included in the
Company’s estimate of expected credit losses when employees meet the conditions for forgiveness through their continued
employment over the specified time period, and is recognized as compensation expense over the life of the loan. The amounts
due from terminated employees that the Company does not expect to collect are included in the allowance for credit losses.
From time to time, the Company 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. The
Company reviews loan balances each reporting period for collectability. If the Company determines that the collectability of a
portion of the loan balances is not expected, the Company recognizes a reserve against the loan balances as compensation
expense.
Fixed Assets, Net:
Fixed assets are carried at cost net of accumulated depreciation and amortization. Depreciation is calculated on a
straight-line basis over the estimated useful lives of the assets. Depending on the type, internal and external direct costs of
developing applications and obtaining software for internal use are capitalized and amortized over either three years or seven
years on a straight-line basis. Computer equipment is depreciated over three to five years. Leasehold improvements are
depreciated over the shorter of their estimated economic useful lives or the remaining lease term. Routine repairs and
maintenance are expensed as incurred. When fixed assets are retired or otherwise disposed of, the related gain or loss is
included in operating income. The Company has asset retirement obligations related to certain of its leasehold improvements,
which it accounts for in accordance with U.S. GAAP guidance, Asset Retirement Obligations. The guidance requires that the
fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable
estimate of fair value can be made. The associated asset retirement cost is capitalized as part of the carrying amount of the long-
lived asset. The liability is discounted and accretion expense is recognized using the credit-adjusted risk-free interest rate in
effect when the liability was initially recognized.
Investments:
The Company’s investments in which it has a significant influence but not a controlling financial interest and of which
it is not the primary beneficiary are accounted for under the equity method.
In accordance with the guidance on recognition and measurement of equity investments, the Company has elected to
use a measurement alternative for its equity investments without a readily determinable fair value, pursuant to which these
investments are initially recognized at cost and remeasured through earnings when there is an observable transaction involving
the same or similar investment of the same issuer, or due to an impairment. The Company evaluates potential impairment of
equity method investments when a change in circumstances occurs, by applying U.S. GAAP guidance, Equity Method and Joint
Ventures, and assessing whether the carrying amount can be recovered. See Note 12—“Fair Value of Financial Assets and
Liabilities” and Note 14—“Investments” for additional information.
The Company’s consolidated financial statements include the accounts of the Company and its wholly owned and
majority-owned subsidiaries. The Company’s policy is to consolidate all entities of which it owns more than 50% unless it does
not have control over the entity. In accordance with U.S. GAAP guidance, Consolidation of Variable Interest Entities, the
Company also consolidates any VIE of which it is the primary beneficiary.
Long-Lived Assets:
The Company periodically evaluates potential impairment of long-lived assets and amortizable intangibles, when a
change in circumstances occurs, by applying U.S. GAAP guidance, Impairment or Disposal of Long-Lived Assets, and
assessing whether the unamortized carrying amount can be recovered over the remaining life through undiscounted future
expected cash flows generated by the underlying assets. If the undiscounted future cash flows were less than the carrying value
of the asset, an impairment charge would be recorded. The impairment charge would be measured as the excess of the carrying
value of the asset over the present value of estimated expected future cash flows using a discount rate commensurate with the
risks involved.
148
The Company accounts for income taxes using the asset and liability method as prescribed in U.S. GAAP guidance,
Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences
between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax basis.
Certain of the Company’s entities are taxed as U.S. partnerships and are subject to the UBT in New York City. Therefore, the
tax liability or benefit related to the partnership income or loss except for UBT rests with the partners (see Note 2—“Limited
Partnership Interests in BGC Holdings and Newmark Holdings” for a discussion of partnership interests), rather than the
partnership entity. As such, the partners’ tax liability or benefit is not reflected in the Company’s consolidated financial
statements. The tax-related assets, liabilities, provisions or benefits included in the Company’s consolidated financial statements
also reflect the results of the entities that are taxed as corporations, either in the U.S. or in foreign jurisdictions. The Company
provides for uncertain tax positions based upon management’s assessment of whether a tax benefit is more likely than not to be
sustained upon examination by tax authorities. The Company recognizes interest and penalties related to income tax matters in
“Provision (benefit) for income taxes” in the Company’s Consolidated Statements of Operations.
The Company files income tax returns in the United States federal jurisdiction and various states, local and foreign
jurisdictions. The Company is currently open to income tax examination by tax authorities in United States federal, state and
local jurisdictions, and certain non-U.S. jurisdictions for tax years beginning 2021, 2011, and 2017, respectively. The Company
does not believe that the amounts of unrecognized tax benefits will materially change over the next 12 months.
The Company has finalized its accounting policy with respect to taxes on GILTI and has elected to treat taxes
associated with the GILTI provision using the Period Cost Method and thus has not recorded deferred taxes for basis
differences under this regime.
Leases:
The Company enters into leasing arrangements in the ordinary course of business as a lessee of office space, data
centers and office equipment.
BGC determines whether an arrangement is a lease at inception. ROU lease assets represent the Company’s right to
use an underlying asset for the lease term, and lease liabilities represent BGC’s obligation to make lease payments arising from
the lease. Other than for leases with an initial term of twelve months or less, ROU lease assets and liabilities are recognized at
commencement date based on the present value of lease payments over the lease term. As most leases do not provide an
implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in
determining the present value of lease payments. The ROU lease asset also includes any lease payments made and excludes
lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the
Company will exercise those options. Lease expense pertaining to leases is recognized on a straight-line basis over the lease
term. Interest expense on finance leases is recognized using the effective interest method over the lease term. Refer to Note 24
—“Leases” for additional information.
Goodwill and Other Intangible Assets, Net:
Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in a business
combination. As prescribed in U.S. GAAP guidance, Intangibles—Goodwill and Other, goodwill and other indefinite-lived
intangible assets are not amortized, but instead are periodically tested for impairment. The Company reviews goodwill and
other indefinite-lived intangible assets for impairment on an annual basis during the fourth quarter of each fiscal year or
whenever an event occurs or circumstances change that could reduce the fair value of a reporting unit below its carrying
amount. When reviewing goodwill for impairment, BGC first assesses qualitative factors to determine whether it is more likely
than not that the fair value of a reporting unit is less than its carrying amount, including goodwill.
Intangible assets with definite lives are amortized on a straight-line basis over their estimated useful lives. Definite-
lived intangible assets arising from business combinations include customer relationships, internally developed software, and
covenants not to compete. Also included in the definite-lived intangible assets are purchased patents. The costs of acquired
patents are amortized over a period not to exceed the legal life or the remaining useful life of the patent, whichever is shorter,
using the straight-line method.
Income Taxes:
149
Discretionary Bonus:
A portion of our compensation and employee benefits expense is comprised of discretionary bonuses, which may be
paid in cash, equity 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.
Equity-Based Compensation:
The Company accounts for equity-based compensation awards using the guidance in ASC 718, Compensation—Stock
Compensation. Equity-based compensation expense recognized during the period, for equity-based awards with a stated vesting
schedule, is based on the value of the portion of equity-based payment awards that is ultimately expected to vest. The grant-date
fair value of equity-based awards with a stated vesting schedule is amortized to expense ratably over the awards’ vesting
periods. As this equity-based compensation expense recognized in the Company’s Consolidated Statements of Operations is
based on awards ultimately expected to vest, it has been reviewed for estimated forfeitures. Further, forfeitures are estimated at
the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. In addition,
equity-based compensation for LPU awards with no stated vesting schedule is recognized at fair value on the date the award is
granted exchangeability or is redeemed in connection with the issuance of shares of common stock.
Restricted Stock Units:
RSUs provided to certain employees are accounted for as equity awards, and in accordance with U.S. GAAP, the
Company is 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.
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, the Company has granted both participating RSUs, which receive dividends, or
nonparticipating RSUs. For non-participating RSUs, which do not receive dividend equivalents, the Company adjusts the fair
value of the RSUs for the present value of expected forgone dividends, which requires the Company 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.
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, the Company does 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. For RSUs with graded vesting features, the Company has 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 the Company’s Consolidated Statements of Operations.
Restricted Stock:
Restricted stock provided to certain employees is accounted for as an equity award, and as per U.S. GAAP guidance,
the Company is required to record an expense for the portion of the restricted stock that is ultimately expected to vest.
The Company has granted restricted stock, prior to the Corporate Conversion, that is not subject to continued
employment or service; however, transferability is subject to compliance with BGC’s and its affiliates’ customary noncompete
obligations. Such shares of restricted stock are generally salable by their holders 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 the Company’s Consolidated Statements of Operations.
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 discussed 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 compensation expense is
reflected as a component of “Equity-based compensation and allocations of net income to limited partnership units and FPUs”
in the Company’s Consolidated Statements of Operations.
150
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 a distribution at a rate of either 0.6875% (which is 2.75% per calendar year) or such
other amount as set forth in the award documentation.
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 the Company’s 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 the Company’s Consolidated Statements of Operations.
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 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. The Company amortizes 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 the
Company’s Consolidated Statements of Operations as part of “Equity-based compensation and allocations of net income to
limited partnership units and FPUs.”
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; 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 the grant date, which was included in
“Equity-based compensation and allocations of net income to limited partnership units and FPUs” in our 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.
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 vested between two and five years from the grant date. This expense is included in “Equity-based compensation and
allocations of net income to limited partnership units and FPUs” in our Consolidated Statements of Operations.
For additional information, see Note 2—“Limited Partnership Interests in BGC Holdings and Newmark Holdings.”
Redeemable Partnership Interest:
Prior to the Corporate Conversion, redeemable partnership interest represented limited partnership interests in BGC
Holdings held by Founding/Working Partners. See Note 2—“Limited Partnership Interests in BGC Holdings and Newmark
Holdings” for additional information related to the FPUs.
Contingent Class A Common Stock:
In connection with certain acquisitions, the Company committed to issue shares of the Company’s Class A common
stock upon the achievement of certain performance targets. The contingent shares met the criteria for liability classification, are
measured at fair value on a recurring basis and presented in “Accounts payable, accrued and other liabilities” in the Company’s
Consolidated Statements of Financial Condition. Realized and unrealized gains (losses) resulting from changes in fair value are
reported in “Other income (loss)” in the Company’s Consolidated Statements of Operations.
151
Noncontrolling Interest in Subsidiaries:
Noncontrolling interest in subsidiaries represents equity interests in consolidated subsidiaries that are not attributable
to the Company, such as the noncontrolling interest holders’ proportionate share of the profit or loss associated with joint
ownership of the Company’s administrative services company in the U.K. (Tower Bridge).
Foreign Currency Transactions and Translation:
Assets and liabilities denominated in nonfunctional currencies are converted at rates of exchange prevailing on the date
of the Company’s Consolidated Statements of Financial Condition, and revenues and expenses are converted at average rates of
exchange for the period. Gains and losses on remeasurement of foreign currency transactions denominated in nonfunctional
currencies are recognized within “Other expenses” in the Company’s Consolidated Statements of Operations. Gains and losses
on translation of the financial statements of non-U.S. operations into U.S. dollar reporting currency of the Company are
presented as foreign currency translation adjustments within “Other comprehensive income (loss), net of tax” in the Company’s
Consolidated Statements of Comprehensive Income and as part of “Accumulated other comprehensive income (loss)” in the
Company’s Consolidated Statements of Financial Condition.
Derivative Financial Instruments:
Derivative contracts are instruments, such as futures, forwards, options or swaps contracts, which derive their value
from underlying assets, indices, reference rates or a combination of these factors. Derivative instruments may be listed and
traded on an exchange, or they may be privately negotiated contracts, which are often referred to as OTC derivatives.
Derivatives may involve future commitments to purchase or sell financial instruments or commodities, or to exchange currency
or interest payment streams. The amounts exchanged are based on the specific terms of the contract with reference to specified
rates, securities, commodities, currencies or indices.
The Company does not designate any derivative contracts as hedges for accounting purposes. U.S. GAAP requires that
an entity recognize all derivative contracts as either assets or liabilities in the Consolidated Statements of Financial Condition
and measure those instruments at fair value. The fair value of all derivative contracts is recorded on a net-by-counterparty basis
where a legal right of offset exists under an enforceable netting agreement. Derivative contracts are recorded as part of
receivables from or payables to broker-dealers, clearing organizations, customers and related broker-dealers in the Company’s
Consolidated Statements of Financial Condition.
Earnings Per Share:
The Company computes basic and fully diluted EPS in accordance with ASC 260, Earnings Per Share, utilizing the
two-class method, “if-converted” method, or treasury stock method, as applicable. For additional information, see Note 6
—“Earnings Per Share.”
4.
Acquisitions
OTC Global
On October 22, 2024, the Company announced that it had executed a definitive agreement to acquire OTC Global. The
closing of the proposed acquisition of OTC Global is subject to customary closing conditions, including the receipt of
applicable regulatory approvals.
Sage
On October 1, 2024, the Company completed the acquisition of Sage, an energy and environmental brokerage firm.
ContiCap
On November 1, 2023, the Company completed the acquisition of ContiCap, an independent financial product
intermediary specializing in emerging markets.
Open Energy Group
On November 1, 2023, the Company completed the acquisition of Open Energy Group, a technology-driven
marketplace and brokerage for renewable energy asset sales and project finance.
152
Total Consideration
The total consideration for all acquisitions during the years ended December 31, 2024 and 2023 were approximately
$87.2 million and $71.0 million, respectively, subject to post-closing adjustments, which includes cash, restricted shares of
BGC Class A common stock, and an earn-out payable in cash and restricted shares of BGC Class A common stock. The excess
of the consideration over the fair value of the net assets acquired has been recorded as goodwill totaling $35.5 million and $19.1
million, respectively.
Except where otherwise noted, the results of operations of the Company’s acquisitions have been included in the
Company’s consolidated financial statements subsequent to their respective dates of acquisition. The Company has made
preliminary allocations of the consideration to the assets acquired and liabilities assumed for Sage, as of the acquisition date,
and expects to finalize its analysis with respect to the acquisition within the first year after the completion of the transaction.
Therefore, adjustments to preliminary allocations may occur.
5.
Divestitures
On December 3, 2024, the Company announced the sale of Capitalab, which was part of its post-trade business, to
Capitolis. As a result of this sale, the Company recognized a $39.0 million gain, net of banking fees, other professional fees,
and compensation expenses, which is included in “Gains (losses) on divestitures and sale of investments” in the Company’s
Consolidated Statements of Operations during the year ended December 31, 2024. The Company had no gains or losses from
divestitures or sales of investments during the years ended December 31, 2023 and 2022.
6.
Earnings Per Share
Basic Earnings Per Share:
The following is the calculation of the Company’s basic EPS (in thousands, except per share data):
Year Ended December 31,
2024
2023
2022
Basic earnings (loss) per share:
Net income (loss) available to common stockholders
$
126,988 $
36,265 $
48,712
Less: Dividends declared and allocation of undistributed earnings to
participating securities
(5,773)
(2,195)
—
Net income (loss) attributable to common stockholders
121,215
34,070
48,712
Basic weighted-average shares of common stock outstanding
473,390
426,436
371,561
Basic earnings (loss) per share
$
0.26 $
0.08 $
0.13
Trident
On February 28, 2023, the Company completed the acquisition of Trident, primarily operating as a commodity
brokerage and research company, offering OTC and exchange traded energy and environmental products.
153
Fully Diluted Earnings Per Share:
The following is the calculation of the Company’s fully diluted EPS (in thousands, except per share data):
Year Ended December 31,
2024
2023
2022
Fully diluted earnings (loss) per share:
Net income (loss) attributable to common stockholders
$
121,215 $
34,070 $
48,712
Add back: Allocations of net income (loss) to limited partnership interests,
net of tax
—
(156)
14,767
Add back: Allocations of undistributed earnings to participating securities
4,620
1,731
—
Less: Reallocation of undistributed earnings to participating securities
(4,567)
(1,702)
—
Net income (loss) for fully diluted shares
$
121,268 $
33,943 $
63,479
Weighted-average shares:
Common stock outstanding
473,390
426,436
371,561
Partnership units¹
—
57,239
124,738
Non-participating RSUs
—
1,406
1,913
Other2
5,752
4,908
1,202
Fully diluted weighted-average shares of common stock outstanding
479,142
489,989
499,414
Fully diluted earnings (loss) per share
$
0.25 $
0.07 $
0.13
____________________________________
1
Partnership units collectively include FPUs, LPUs, and Cantor units (see Note 2—“Limited Partnership Interests in BGC Holdings
and Newmark Holdings” for more information).
2
Primarily consists of contracts to issue shares of BGC common stock.
For the years ended December 31, 2024, 2023 and 2022, approximately 16.0 million, 14.3 million and 0.5 million of
potentially dilutive securities, respectively, were excluded from the computation of fully diluted EPS because their effect would
have been anti-dilutive. Anti-dilutive securities for the year ended December 31, 2024, included 15.6 million participating
RSUs and 0.4 million participating restricted stock awards. Anti-dilutive securities for the year ended December 31, 2023
included 12.7 million participating RSUs and 1.6 million participating restricted stock awards. Anti-dilutive securities for the
year ended December 31, 2022 included 0.5 million RSUs.
As of December 31, 2024 and 2023, approximately 59.6 million and 63.3 million, respectively, contingent shares of
BGC Class A common stock, non-participating RSUs, and non-participating restricted stock awards were excluded from the
fully diluted EPS computations because the conditions for issuance had not been met by the end of the period. As of
December 31, 2022, 50.2 million contingent shares of BGC Class A common stock, N Units, RSUs, and LPUs were excluded
from the fully diluted EPS computations because the conditions for issuance had not been met by the end of the respective
periods.
Contingent shares excluded from the calculation of EPS included: shares promised in connection with acquisition
earnout consideration whereby the acquired entity or entities are required to achieve a stated performance target defined in their
respective acquisition agreements; other contingent share obligations which include agreements with terminated employees to
deliver shares BGC Class A common stock over a set period of time post-termination in accordance with their respective
partnership separation agreements; and non-participating RSUs and non-participating restricted stock awards which contain
service conditions and/or performance conditions which have not been met during the period. When the service condition and/
or performance condition has been met in the period, the securities are included in diluted EPS on the first day of the quarter in
which the contingency was met.
154
7.
Stock Transactions and Unit Redemptions
Class A Common Stock
Changes in shares of BGC Class A common stock outstanding for the years ended December 31, 2024 and 2023 were
as follows (in thousands):
Year Ended December 31,
2024
2023
Shares outstanding at beginning of period
390,095
325,858
Share issuances:
Redemptions/exchanges of limited partnership interests and contingent share obligations¹
1,756
30,754
Vesting of RSUs
9,996
13,009
Acquisitions
1,062
4,566
Other issuances of BGC Class A common stock
9,028
2,946
Restricted stock awards2
—
38,610
Restricted stock forfeitures
(1,440)
(1,428)
Treasury stock repurchases3
(36,200)
(24,220)
Shares outstanding at end of period
374,297
390,095
____________________________________
1
Contingent share obligations include shares of BGC Class A common stock issued to terminated employees per their respective
separation agreements. Included in redemptions/exchanges of limited partnership interests and contingent share obligations for the
year ended December 31, 2024 are 1.8 million shares of BGC Class A common stock granted in connection with 1.8 million
contingent share obligations. Included in redemption/exchanges of limited partnership interests and contingent share obligations for
the year ended December 31, 2023, are 20.5 million shares of BGC Class A common stock granted in connection with the
cancellation of 26.4 million LPUs and settlements of 0.4 million contingent share obligations. Because LPUs are included in the
Company’s fully diluted share count, if dilutive, redemptions/exchanges in connection with the issuance of BGC Class A common
stock would not impact the fully diluted number of shares outstanding.
2
Shares outstanding at the end of the year ended December 31, 2024, includes 6.7 million shares of certain restricted stock awards
that do not receive dividends until their respective vesting and contingent conditions are met. These restricted stock awards do have
voting rights.
3
Treasury stock repurchases includes shares withheld for taxes on restricted stock vesting. See Note 7—“Stock Transactions and
Unit Redemptions”
Class B Common Stock
The Company did not issue any shares of BGC Class B common stock during the year ended December 31, 2024. The
Company issued 64.0 million shares of BGC Class B common stock during the year ended December 31, 2023 due to the
Corporate Conversion. Following the Corporate Conversion, Cantor satisfied its obligation to its holders of April 2008
distribution rights shares and February 2012 distribution rights shares through the distribution of 15.8 million shares of BGC
Class B common stock to such shareholders. 0.4 million shares of BGC Class B common stock were distributed by Cantor to
recipients in whose hands the shares converted into shares of BGC Class A common stock pursuant to the terms of the
Company’s Amended and Restated Certificate of Incorporation, which resulted in an increase of 0.4 million shares of BGC
Class A common stock outstanding and a decrease of 0.4 million shares of BGC Class B common stock outstanding. As of both
December 31, 2024 and 2023, there were 109.5 million shares of BGC Class B common stock outstanding.
155
CEO Program
On March 8, 2021, the Company filed a new CEO Program Shelf Registration Statement on Form S-3 with respect to
the issuance and sale of up to an aggregate of $300.0 million of shares of BGC Class A common stock from time to time on a
delayed or continuous basis. On July 8, 2022, the Company filed an amendment to the March 2021 Form S-3 Registration
Statement. On August 3, 2022, the March 2021 Form S-3 Registration Statement was declared effective by the SEC, and the
Company entered into the August 2022 Sales Agreement on August 12, 2022. The Company did not sell any shares under the
August 2022 Sales Agreement. On July 3, 2023, in connection with the Corporate Conversion, BGC Group filed a post-
effective amendment to the March 2021 Form S-3 Registration Statement, pursuant to which it adopted the March 2021 Form
S-3 Registration Statement as its own registration statement. Also on July 3, 2023, BGC Group assumed the August 2022 Sales
Agreement, as amended and restated to replace references to BGC Partners with references to BGC Group and to make other
ministerial changes. BGC Group may sell up to an aggregate of $300.0 million of shares of BGC Class A common stock
pursuant to the terms of the July 2023 Sales Agreement. Under the July 2023 Sales Agreement, the Company agreed to pay
CF&Co 2% of the gross proceeds from the sale of shares. As of December 31, 2024 the Company had not sold any shares of
BGC Class A common stock or paid any commission to CF&Co under the July 2023 Sales Agreement. For additional
information on the Company’s CEO Program sales agreements, see Note 13—“Related Party Transactions.”
Unit Redemptions and Share Repurchase Program
The Company’s Board and Audit Committee have authorized repurchases of BGC Class A common stock and
redemptions of limited partnership interests or other equity interests in the Company’s subsidiaries. On November 4, 2022, the
Board and Audit Committee increased the BGC Partners share repurchase and unit redemption authorization to $400.0 million,
which could have included purchases from Cantor, its partners or employees or other affiliated persons or entities. On July 1,
2023, the BGC Group Board and Audit Committee approved BGC Group’s share repurchase authorization in an amount up to
$400.0 million, which may include purchases from Cantor, its partners or employees or other affiliated persons or entities. On
October 30, 2024, the BGC Group Board and Audit Committee re-approved BGC Group’s share repurchase authorization in an
amount up to $400.0 million, which may include purchases from Cantor, its partners or employees or other affiliated persons or
entities. As of December 31, 2024, the Company had $350.0 million remaining from its share repurchase authorization. From
time to time, the Company may actively continue to repurchase shares.
The tables below represent the units redeemed and/or the shares repurchased for cash or withheld to satisfy tax
liabilities due upon the vesting of restricted stock and do not include units redeemed/cancelled in connection with the grant of
shares of BGC Class A common stock nor the limited partnership interests exchanged for shares of BGC Class A common
stock. The share repurchases of BGC Class A common stock during the year ended December 31, 2024 were as follows (in
thousands, except for weighted-average price data):
Period
Total Number
of Shares
Repurchased
Weighted-
Average Price
Paid per Share
Approximate
Dollar Value
of
Shares That Could Be
Repurchased
Under the Program at
December 31, 2024
Repurchases1, 2
January 1, 2024—March 31, 2024
11,250 $
7.11
April 1, 2024—June 30, 2024
10,688
8.32
July 1, 2024—September 30, 2024
7,893
9.05
October 1, 2024—October 31, 2024
6,369
9.45
November 1, 2024—November 30, 2024
—
—
December 1, 2024—December 31, 2024
—
—
Total Repurchases
36,200
8.30 $
350,000
____________________________________
1
During the year ended December 31, 2024, the Company repurchased 36.2 million shares of BGC Class A common stock at an
aggregate price of $300.5 million for a weighted-average price of $8.30 per share. These repurchases include 4.6 million restricted
shares vested but withheld described in the following footnote.
2
Include 4.6 million shares withheld to satisfy tax liabilities due upon the vesting of restricted stock. The fair value of restricted
shares vested, withheld to satisfy tax liabilities was $38.4 million at a weighted-average price of $8.35 per share. The average price
paid per share for such share withholdings is based on the closing price per share on the vesting date of the restricted stock or, if
such date is not a trading day, the trading day immediately prior to such vesting date.
156
The gross unit redemptions and share repurchases of BGC Class A common stock during the year ended December 31,
2023 were as follows (in thousands, except for weighted-average price data):
Period
Total Number
of Units
Redeemed
or Shares
Repurchased
Weighted-
Average Price
Paid per Unit
or Share
Approximate
Dollar Value
of
Units and Shares
That Could Be
Redeemed/
Repurchased
Under the Program at
December 31, 2023
Redemptions1
January 1, 2023—March 31, 2023
23 $
3.90
April 1, 2023—June 30, 2023
422
4.91
July 1, 2023—September 30, 2023
—
—
October 1, 2023—December 31, 2023
—
—
Total Redemptions
445 $
4.85
Repurchases2, 3
January 1, 2023—March 31, 2023
846 $
4.97
April 1, 2023—June 30, 2023
9,814
4.44
July 1, 2023—September 30, 2023
8,087
4.99
October 1, 2023—December 31, 2023
5,473
$
5.74
Total Repurchases
24,220
4.94
Total Redemptions and Repurchases
24,665 $
4.93 $
333,113
____________________________________
1
During the year ended December 31, 2023, the Company redeemed 0.3 million LPUs at an aggregate redemption price of $1.4
million for a weighted-average price of $4.71 per unit and 0.2 million FPUs at an aggregate redemption price of $0.8 million for a
weighted-average price of $5.11 per unit. The table above does not include units redeemed/cancelled in connection with the grant of
20.5 million shares of BGC Class A common stock during the year ended December 31, 2023, nor the limited partnership interests
exchanged for 13.6 million shares of BGC Class A common stock during the year ended December 31, 2023.
2
During the year ended December 31, 2023, the Company repurchased 24.2 million shares of BGC Class A common stock at an
aggregate price of $119.6 million for a weighted-average price of $4.94 per share. These repurchases includes 1.0 million restricted
shares vested but withheld described in the following footnote.
3
Includes 1.0 million shares withheld to satisfy tax liabilities due upon the vesting of restricted stock. The fair value of restricted
shares vested, withheld to satisfy tax liabilities was $5.0 million at a weighted-average price of $5.21 per share. The average price
paid per share for such share withholdings is based on the closing price per share on the vesting date of the restricted stock or, if
such date is not a trading day, the trading day immediately prior to such vesting date.
Redeemable Partnership Interest
The changes in the carrying amount of FPUs for the year ended December 31, 2023 were as follows (in thousands):
Year Ended
December 31,
2023
Balance at beginning of period
$
15,519
Consolidated net income allocated to FPUs
236
Earnings distributions
(236)
FPUs exchanged
(1,301)
FPUs redeemed
288
Corporate conversion
(14,506)
Balance at end of period
$
—
As a result of the Corporate Conversion, there were no redeemable partnership interests outstanding as of
December 31, 2024 and 2023.
157
8.
Financial Instruments Owned, at Fair Value
Financial instruments owned, at fair value primarily consist of unencumbered U.S. Treasury bills held for liquidity
purposes. Total Financial instruments owned, at fair value were $186.2 million and $45.8 million as of December 31, 2024 and
2023, respectively. For additional information, see Note 12—“Fair Value of Financial Assets and Liabilities.”
These instruments are measured at fair value, with any changes in fair value recognized in earnings in the Company’s
Consolidated Statements of Operations. The Company recognized unrealized net gains of $0.1 million, $0.1 million and
unrealized net losses of $0.1 million as of December 31, 2024, 2023, and 2022 respectively, related to the mark-to-market
adjustments on such instruments.
9.
Collateralized Transactions
Repurchase Agreements
Securities sold under Repurchase Agreements are accounted for as collateralized financing transactions, recorded at
the contractual amount for which the securities will be repurchased, including accrued interest, and recorded as “Repurchase
Agreements” on the Company’s Consolidated Statements of Financial Condition. As of both December 31, 2024 and 2023, the
Company had no Repurchase Agreements.
Reverse Repurchase Agreements
Securities purchased under Reverse Repurchase Agreements are accounted for as collateralized financing transactions
and are recorded at the contractual amount for which the securities will be resold, including accrued interest.
For Reverse Repurchase Agreements, it is the Company’s policy to obtain possession of collateral with a market value
equal to or in excess of the principal amount loaned under Reverse Repurchase Agreements. Collateral is valued daily and the
Company may require counterparties to deposit additional collateral or return collateral pledged when appropriate.
As of both December 31, 2024 and 2023, the Company had no Reverse Repurchase Agreements.
10.
Receivables from and Payables to Broker-Dealers, Clearing Organizations, Customers and Related Broker-
Dealers
Receivables from and payables to broker-dealers, clearing organizations, customers and related broker-dealers
primarily represent amounts due for undelivered securities, cash held at clearing organizations and exchanges to facilitate
settlement and clearance of matched principal transactions, spreads on matched principal transactions that have not yet been
remitted from/to clearing organizations and exchanges and amounts related to open derivative contracts (see Note 11
—“Derivatives”). As of December 31, 2024 and December 31, 2023, Receivables from and payables to broker-dealers, clearing
organizations, customers and related broker-dealers consisted of the following (in thousands):
December 31,
2024
December 31,
2023
Receivables from broker-dealers, clearing organizations, customers and related broker-
dealers1
Contract values of fails to deliver
$
213,409 $
182,094
Receivables from clearing organizations
118,473
135,789
Other receivables from broker-dealers and customers
26,859
28,546
Net pending trades
1,365
—
Open derivative contracts
5,384
3,607
Total
$
365,490 $
350,036
Payables to broker-dealers, clearing organizations, customers and related broker-dealers1
Contract values of fails to receive
$
201,301 $
172,231
Payables to clearing organizations
5,643
10,846
Other payables to broker-dealers and customers
14,003
13,357
Net pending trades
—
76
Open derivative contracts
4,430
5,756
Total
$
225,377 $
202,266
____________________________
158
1
Includes receivables and payables with Cantor. See Note 13—“Related Party Transactions” for additional information.
Substantially all open fails to deliver, open fails to receive and pending trade transactions as of December 31, 2024
have subsequently settled at the contracted amounts.
11.
Derivatives
In the normal course of operations, the Company enters into derivative contracts to facilitate client transactions, hedge
principal positions and facilitate hedging activities of affiliated companies. These derivative contracts primarily consist of FX
swaps, FX/commodities options, futures, forwards and interest rate swaps.
The fair value of derivative contracts, presented in accordance with the Company’s netting policy, is set forth below
(in thousands):
December 31, 2024
December 31, 2023
Derivative contract
Assets
Liabilities
Notional
Amounts1
Assets
Liabilities
Notional
Amounts1
FX swaps
$
4,810 $
3,679 $
635,790 $
2,674 $
5,119 $
545,669
Forwards
409
751
185,821
805
609
310,880
Futures
165
—
8,758,848
—
28
6,703,624
Interest rate swaps
—
—
534,085
128
—
34,272,592
Total
$
5,384 $
4,430 $ 10,114,544 $
3,607 $
5,756 $ 41,832,765
____________________________________
1
Notional amounts represent the sum of gross long and short derivative contracts, an indication of the volume of the Company’s
derivative activity, and do not represent anticipated losses.
Certain of the Company’s FX swaps are with Cantor. See Note 13—“Related Party Transactions” for additional
information related to these transactions.
The replacement costs of contracts in a gain position were $5.4 million and $3.6 million, as of December 31, 2024 and
2023, respectively.
The following tables present information about the offsetting of derivative instruments as of December 31, 2024 and
2023 (in thousands):
December 31, 2024
Gross Amounts
Gross Amounts
Offset
Net Amounts
Presented in the
Statements of
Financial
Condition
Assets
FX swaps
$
5,993 $
(1,183) $
4,810
Forwards
465
(56)
409
Futures
37,083
(36,918)
165
Interest rate swaps
132
(132)
—
Total derivative assets
$
43,673 $
(38,289) $
5,384
Liabilities
FX swaps
$
4,862 $
(1,183) $
3,679
Forwards
807
(56)
751
Futures
36,918
(36,918)
—
Interest rate swaps
132
(132)
—
Total derivative liabilities
$
42,719 $
(38,289) $
4,430
159
December 31, 2023
Gross Amounts
Gross Amounts
Offset
Net Amounts
Presented in the
Statements of
Financial
Condition
Assets
FX swaps
$
3,467 $
(793) $
2,674
Forwards
855
(50)
805
Interest rate swaps
12,310
(12,182)
128
Futures
62,693
(62,693)
—
Total derivative assets
$
79,325 $
(75,718) $
3,607
Liabilities
FX swaps
$
5,912 $
(793) $
5,119
Forwards
659
(50)
609
Futures
62,721
(62,693)
28
Interest rate swaps
12,182
(12,182)
—
Total derivative liabilities
$
81,474 $
(75,718) $
5,756
There were no additional balances in gross amounts not offset as of either December 31, 2024 or 2023.
The change in fair value of derivative contracts is reported as part of “Principal transactions” in the Company’s
Consolidated Statements of Operations.
The table below summarizes gains and (losses) on derivative contracts for the years ended December 31, 2024, 2023
and 2022 (in thousands):
Year Ended December 31,
Derivative contract
2024
2023
2022
Futures
$
12,371 $
13,139 $
16,388
Interest rate swaps
6,965
3,454
25
FX swaps
2,581
2,619
2,466
FX/commodities options
317
230
331
Gains, net
$
22,234 $
19,442 $
19,210
12.
Fair Value of Financial Assets and Liabilities
Fair Value Measurements on a Recurring Basis
The following tables set forth by level within the fair value hierarchy financial assets and liabilities accounted for at
fair value under U.S. GAAP guidance (in thousands):
Assets at Fair Value at December 31, 2024
Level 1
Level 2
Level 3
Netting and
Collateral
Total
Financial instruments owned, at fair value—
Domestic government debt
$
170,381 $
— $
— $
— $
170,381
Financial instruments owned, at fair value—
Foreign government debt
—
14,827
—
—
14,827
Financial instruments owned, at fair value—
Equities
989
—
—
—
989
FX swaps
—
5,993
—
(1,183)
4,810
Forwards
—
465
—
(56)
409
Interest rate swaps
—
132
—
(132)
—
Futures
37,083
—
—
(36,918)
165
Total
$
208,453 $
21,417 $
— $
(38,289) $
191,581
160
Liabilities at Fair Value at December 31, 2024
Level 1
Level 2
Level 3
Netting and
Collateral
Total
FX swaps
$
— $
4,862 $
— $
(1,183) $
3,679
Forwards
—
807
—
(56)
751
Futures
36,918
—
—
(36,918)
—
Interest rate swaps
—
132
—
(132)
—
Contingent consideration
—
—
21,768
—
21,768
Total
$
36,918 $
5,801 $
21,768 $
(38,289) $
26,198
Assets at Fair Value at December 31, 2023
Level 1
Level 2
Level 3
Netting and
Collateral
Total
Financial instruments owned, at fair value—
Domestic government debt
$
31,141 $
— $
— $
— $
31,141
Financial instruments owned, at fair value—
Foreign government debt
—
14,164
—
—
14,164
Financial instruments owned, at fair value—
Equities
487
—
—
—
487
FX swaps
—
3,467
—
(793)
2,674
Forwards
—
855
—
(50)
805
Interest rate swaps
—
12,310
—
(12,182)
128
Futures
—
62,693
—
(62,693)
—
Total
$
31,628 $
93,489 $
— $
(75,718) $
49,399
Liabilities at Fair Value at December 31, 2023
Level 1
Level 2
Level 3
Netting and
Collateral
Total
FX swaps
$
— $
5,912 $
— $
(793) $
5,119
Futures
—
659
—
(50)
609
Forwards
—
62,721
—
(62,693)
28
Interest rate swaps
—
12,182
—
(12,182)
—
Contingent consideration
—
—
11,929
—
11,929
Total
$
— $
81,474 $
11,929 $
(75,718) $
17,685
Level 3 Financial Liabilities
Changes in Level 3 liabilities measured at fair value on a recurring basis for the year ended December 31, 2024 were
as follows (in thousands):
Unrealized (gains) losses for the
period included in:
Opening
Balance as of
January 1,
2024
Total
realized and
unrealized
(gains) losses
included in
Net income
(loss)1
Purchases/
Issuances
Sales/
Settlements
Closing
Balance at
December
31, 2024
Net income
(loss) on Level
3 Assets /
Liabilities
Outstanding at
December 31,
2024
Other
comprehensive
income (loss)
on Level 3
Assets /
Liabilities
Outstanding at
December 31,
2024
Liabilities
Accounts payable, accrued and other
liabilities:
Contingent consideration
$
11,929 $
1,146 $ 12,333 $ (3,640) $ 21,768 $
1,146 $
—
_______________________________________
1
Realized and unrealized gains (losses) are reported in “Other income (loss),” in the Company’s Consolidated Statements of
Operations.
161
Changes in Level 3 liabilities measured at fair value on a recurring basis for the year ended December 31, 2023 were
as follows (in thousands):
Unrealized (gains) Losses for the
period included in:
Opening
Balance as of
January 1,
2023
Total
realized and
unrealized
(gains) losses
included in
Net income
(loss)1
Purchases/
Issuances2
Sales/
Settlements
Closing
Balance at
December
31, 2023
Net income
(loss) on Level
3 Assets /
Liabilities
Outstanding at
December 31,
2023
Other
comprehensive
income (loss)
on Level 3
Assets /
Liabilities
Outstanding
at December
31, 2023
Liabilities
Accounts payable, accrued and other
liabilities:
Contingent consideration
$
24,279 $
1,442 $ 7,710 $ (21,502) $ 11,929 $
835 $
—
_______________________________________
1
Realized and unrealized gains (losses) are reported in “Other income (loss),” as applicable, in the Company’s Consolidated
Statements of Operations.
2
“Purchases/Issuances” includes a $2.2 million measurement period adjustment relating to the Trident Acquisition (see Note 16
—“Goodwill and Other Intangible Assets, Net” for additional information).
Quantitative Information About Level 3 Fair Value Measurements on a Recurring Basis
The following tables present quantitative information about the significant unobservable inputs utilized by the
Company in the fair value measurement of Level 3 liabilities measured at fair value on a recurring basis (in thousands):
Fair Value as of December 31, 2024
Assets
Liabilities
Valuation
Technique
Unobservable Inputs
Range
Weighted
Average
Discount rate1
9.1%-9.2%
9.1%
Contingent consideration $
—
$
21,768
Present value of
expected payments
Probability of meeting
earnout and
contingencies
20%-100%
81.9%2
_______________________________________
1
The discount rate is based on the Company’s calculated weighted-average cost of capital.
2
The probability of meeting the earnout targets was based on the acquirees’ projected future financial performance, including
revenues.
Fair Value as of December 31, 2023
Assets
Liabilities
Valuation
Technique
Unobservable Inputs
Range
Weighted
Average
Discount rate1
7.2%-9.2%
8.6%
Contingent consideration $
—
$
11,929
Present value of
expected payments
Probability of meeting
earnout and
contingencies
20%-100%
86.5%2
_______________________________________
1
The discount rate is based on the Company’s calculated weighted-average cost of capital.
2
The probability of meeting the earnout targets was based on the acquirees’ projected future financial performance, including
revenues.
Information About Uncertainty of Level 3 Fair Value Measurements
The significant unobservable inputs used in the fair value of the Company’s contingent consideration are the discount
rate and forecasted financial information. Significant increases (decreases) in the discount rate would have resulted in a
significantly lower (higher) fair value measurement. Significant increases (decreases) in the forecasted financial information
would have resulted in a significantly higher (lower) fair value measurement. As of December 31, 2024 and 2023, the present
value of expected payments related to the Company’s contingent consideration was $21.8 million and $11.9 million,
respectively. The undiscounted value of the payments, assuming that all contingencies are met, would be $30.4 million and
$18.6 million as of December 31, 2024 and 2023, respectively.
162
Fair Value Measurements on a Non-Recurring Basis
Pursuant to the recognition and measurement guidance for equity investments, equity investments carried under the
measurement alternative are remeasured at fair value on a non-recurring basis to reflect observable transactions which occurred
during the period. The Company applied the measurement alternative to equity securities with the fair value of approximately
$136.1 million and $85.8 million, which were included in “Other assets” in the Company’s Consolidated Statements of
Financial Condition as of December 31, 2024 and 2023, respectively. These investments are classified within Level 2 in the fair
value hierarchy, because their estimated fair value is based on valuation methods using the observable transaction price at the
transaction date.
13.
Related Party Transactions
In connection with the Corporate Conversion on July 1, 2023, the BGC Group Board and the Board of Directors of
BGC Partners authorized the assumption of all agreements and arrangements between BGC Partners and any executive officer,
director or affiliate of BGC Partners, with such modifications necessary to reflect the Corporate Conversion. Pursuant to the
foregoing authorization, any existing agreements and arrangements between BGC Partners and any executive officer, director
or affiliate of BGC Partners, were generally assumed unchanged other than making BGC Group a party thereto.
Service Agreements
Throughout Europe and Asia, the Company provides Cantor with administrative services, technology services and
other support, for which it charges Cantor based on the cost of providing such services plus a mark-up, generally 7.5%. In the
U.K., the Company provides these services to Cantor through Tower Bridge. The Company owns 52% of Tower Bridge and
consolidates it, and Cantor owns 48%. Cantor’s interest in Tower Bridge is reflected as a component of “Noncontrolling interest
in subsidiaries” in the Company’s Consolidated Statements of Financial Condition, and the portion of Tower Bridge’s income
attributable to Cantor is included as part of “Net income (loss) attributable to noncontrolling interest in subsidiaries” in the
Company’s Consolidated Statements of Operations. In the U.S., the Company provides Cantor with technology services for
which it charges Cantor based on the cost of providing such services.
The administrative services agreement provides that direct costs incurred are charged back to the service recipient.
Additionally, the service recipient generally indemnifies the service provider for liabilities that it incurs arising from the
provision of services, other than liabilities arising from fraud or willful misconduct of the service provider. In accordance with
the administrative service agreement, the Company has not recognized any liabilities related to services provided to affiliates.
For the years ended December 31, 2024, 2023 and 2022, Cantor’s share of the net profit (loss) in Tower Bridge was
$2.2 million, $2.8 million and $0.7 million, respectively. This net profit or loss is included as part of “Net income (loss)
attributable to noncontrolling interest in subsidiaries” in the Company’s Consolidated Statements of Operations.
On September 21, 2018, the Company entered into agreements to provide a guarantee and related obligation to Tower
Bridge in connection with an office lease for the Company’s headquarters in London. The Company is obligated to guarantee
the obligations of Tower Bridge in the event of certain defaults under the applicable lease and ancillary arrangements. In July
2018, the Audit Committee also authorized management of the Company to enter into similar guarantees or provide other forms
of credit support to Tower Bridge or other affiliates of the Company from time to time in the future in similar circumstances
and on similar terms and conditions.
For the years ended December 31, 2024, 2023 and 2022, the Company recognized related party revenues of $20.7
million, $16.0 million and $14.7 million, respectively, for the services provided to Cantor. These revenues are included as part
of “Fees from related parties” in the Company’s Consolidated Statements of Operations.
In the U.S., Cantor and its affiliates provide the Company with administrative services and other support for which
Cantor charges the Company based on the cost of providing such services. In connection with the services Cantor provides, the
Company and Cantor entered into an administrative services agreement whereby certain employees of Cantor are deemed
leased employees of the Company.
163
For the years ended December 31, 2024, 2023 and 2022, the Company was charged $107.6 million, $97.4 million and
$84.9 million, respectively, for the services provided by Cantor and its affiliates, of which $75.1 million, $64.7 million and
$59.2 million, respectively, were to cover compensation to leased employees for these periods. The fees charged by Cantor for
administrative and support services, other than those to cover the compensation costs of leased employees, are included as part
of “Fees to related parties” in the Company’s Consolidated Statements of Operations. The fees charged by Cantor to cover the
compensation costs of leased employees are included as part of “Compensation and employee benefits” in the Company’s
Consolidated Statements of Operations.
In connection with the Corporate Conversion on July 1, 2023, BGC Group, Cantor and certain affiliates of Cantor
entered into an Amended and Restated U.S. Master Administrative Services Agreement and an Amended and Restated U.K.
Master Administrative Services Agreement.
FMX Administrative Services Agreement
In connection with the FMX Separation, on April 23, 2024, Tower Bridge and FMX entered into an Administrative
Services Agreement, pursuant to which Tower Bridge would provide certain administrative services and technology services to
FMX.
Clearing Agreements with Cantor
The Company and its subsidiaries receive certain clearing services from Cantor and its subsidiaries pursuant to several
clearing agreements, including the Clearing Services Agreement. These clearing services are provided in exchange for payment
by the Company and its subsidiaries for certain clearing costs and allocated costs. The costs associated with these payments are
included as part of “Fees to related parties” in the Company’s Consolidated Statements of Operations. The costs for these
services are included as part of the charges to BGC for services provided by Cantor and its affiliates as discussed in “Service
Agreements” above.
On June 7, 2024, the Company amended the Clearing Services Agreement to modify the rate charged by CF&Co for
posting margin in respect of trades cleared on behalf of BGCF to a rate equal to CF&Co’s cost of funding such margin through
a draw on a third party credit facility provided to CF&Co for which the use of proceeds is to finance clearinghouse margin
deposits and related transactions.
Clearing Capital Agreement with Cantor
In November 2008, the Company entered into the Clearing Capital Agreement with Cantor to clear U.S. Treasury and
U.S. government agency securities transactions on the Company’s behalf. In June 2020, the Clearing Capital Agreement was
amended to cover Cantor providing clearing services in all eligible financial products to the Company and not just U.S.
Treasury and U.S. government agency securities. Pursuant to the terms of this agreement, so long as Cantor is providing
clearing services to BGC, Cantor shall be entitled to request from the Company cash or other collateral acceptable to Cantor in
the amount reasonably requested by Cantor under the Clearing Capital Agreement or Cantor will post cash or other collateral on
BGC’s behalf for a commercially reasonable charge. On June 7, 2024, the Company amended the Clearing Capital Agreement
to modify the rate charged by Cantor for posting margin in respect of trades cleared on behalf of the Company to a rate equal to
Cantor’s cost of funding such margin through a draw on a third party credit facility provided to Cantor for which the use of
proceeds is to finance clearinghouse margin deposits and related transactions. The Clearing Capital Agreement amendment also
assigned BGC Partners’ rights and obligations thereunder to BGC Group.
During the years ended December 31, 2024, 2023 and 2022, the Company was charged $4.4 million, $2.2 million and
$0.8 million, respectively, by Cantor for the cash or other collateral posted by Cantor on BGC’s behalf. Cantor held cash or
other property from the Company as collateral as of December 31, 2024 at a fair value of $124.6 million.
Non-Conforming Subordination Agreements
On June 26, 2024, the Audit Committee of BGC approved the entry into one or more non-conforming subordination
agreements by BGC or its subsidiaries, including FMX, with CF&Co (or its affiliates). Pursuant to any non-conforming
subordination agreement, the BGC party would acknowledge that its brokerage account(s) held at CF&Co are not “customers”
of CF&Co and would agree to subordinate its right to receive securities or funds held in such accounts to the claims of Cantor’s
customers. This acknowledgment and agreement by the relevant BGC party enables CF&Co to receive such securities or funds
from the BGC party and post them with the FICC without requiring that they be segregated.
164
Purchase of Futures Exchange Group
On July 30, 2021, the Company completed the purchase of the Futures Exchange Group for a purchase price of
$4.9 million at closing, plus the cash held at closing by the Futures Exchange Group, and an earn-out, only payable out of the
Company’s portion of the profits of the Futures Exchange Group, capped at the amount Cantor contributed to the Futures
Exchange Group prior to closing. The transaction has been accounted for as a transaction between entities under common
control.
As part of the purchase of the Futures Exchange Group, Cantor has agreed to indemnify the Company for certain
expenses arising at the Futures Exchange Group up to a maximum of $1.0 million. As of both December 31, 2024 and 2023, the
Company had recorded assets of $1.0 million in the Company’s Consolidated Statements of Financial Condition for this
indemnity.
Newmark Spin-Off
The Separation and Distribution Agreement sets forth certain agreements among BGC, Cantor, Newmark and their
respective subsidiaries.
As a result of the Separation, the limited partnership interests in Newmark Holdings were distributed to the holders of
limited partnership interests in BGC Holdings, including Cantor, whereby each holder of BGC Holdings limited partnership
interests at that time held a BGC Holdings limited partnership interest and a corresponding Newmark Holdings limited
partnership interest, which is equal to a BGC Holdings limited partnership interest multiplied by the Contribution Ratio, divided
by the Exchange Ratio. For additional information, see Note 2—“Limited Partnership Interests in BGC Holdings and Newmark
Holdings.”
Subsequent to the Spin-Off, there were remaining partners who held limited partnership interests in BGC Holdings
who are Newmark employees, and there are remaining partners who hold limited partnership interests in Newmark Holdings
who are BGC employees. These limited partnership interests represent interests that were held prior to the Newmark IPO or
were distributed in connection with the Separation. Following the Newmark IPO, employees of BGC and Newmark only
receive limited partnership interests in BGC Holdings and Newmark Holdings, respectively. As a result of the Spin-Off, as the
previous limited partnership interests in BGC Holdings held by Newmark employees and the existing limited partnership
interests in Newmark Holdings held by BGC employees were/are exchanged/redeemed, the related capital is contributed to and
from Cantor, respectively.
On November 30, 2018, BGC Partners caused its subsidiary, BGC Holdings, to distribute in the BGC Holdings
Distribution pro rata all of the 1.5 million exchangeable interests of Newmark Holdings held by BGC Holdings immediately
prior to the effective time of the BGC Holdings Distribution Date to its limited partners entitled to receive distributions on their
BGC Holdings units who were holders of record of such units as of the Record Date (including Cantor and executive officers of
BGC). The Newmark Holdings interests distributed to BGC Holdings partners in the BGC Holdings Distribution are
exchangeable for shares of Newmark Class A common stock, and, in the case of the 0.4 million Newmark Holdings interests
received by Cantor, also into shares of Newmark Class B common stock, at the current Exchange Ratio of 0.9279 shares of
Newmark common stock per Newmark Holdings interest (subject to adjustment).
Prior to the Corporate Conversion, all BGC Holdings units held by employees of Newmark were redeemed or
exchanged, in each case, for shares of BGC Class A common stock.
BGC Credit Agreement
On March 19, 2018, BGC Partners entered into the BGC Credit Agreement with Cantor. The BGC Credit Agreement
provides for each party and certain of its subsidiaries to issue loans to the other party or any of its subsidiaries at the lender’s
discretion in an aggregate principal amount up to $250.0 million outstanding at any time. The BGC Credit Agreement replaced
the previous Credit Facility between BGC Partners and an affiliate of Cantor. On August 6, 2018, BGC Partners entered into an
amendment to the BGC Credit Agreement, which increased the aggregate principal amount that could be loaned to the other
party or any of its subsidiaries from $250.0 million to $400.0 million that can be outstanding at any time. On October 6, 2023,
BGC Group assumed all rights and obligations of BGC Partners under the BGC Credit Agreement.
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On March 8, 2024, the Company entered into a second amendment to the BGC Credit Agreement. The second
amendment provides that the parties and their respective subsidiaries may borrow up to an aggregate principal amount of
$400.0 million from each other from time to time at an interest rate equal to 25 basis points less than the interest rate on the
respective borrower’s short-term borrowing rate then in effect. Previously, the parties and their respective subsidiaries could
borrow up to an aggregate principal amount of $400.0 million from each other from time to time at an interest rate equal to
1.00% higher than the higher of Cantor’s or BGC’s short-term borrowing rate then in effect. The BGC Credit Agreement will
mature on the earlier to occur of (a) if prior written notice of non-extension is given by a lending party to a borrowing party at
least six months in advance thereof, March 19, 2025, and if such notice is not timely given, then the maturity date of the BGC
Credit Agreement will continue to be extended for additional successive one-year periods unless prior written notice of non-
extension is given by a lending party to a borrowing party at least six months in advance of such renewal date and (b) the
termination of the BGC Credit Agreement by either party pursuant to its terms.
On June 7, 2024, the Company entered into a third amendment to the BGC Credit Agreement. The third amendment
provides that the parties and their respective subsidiaries may borrow up to an aggregate principal amount of $400.0 million
pursuant to a new category of “FICC-GSD Margin Loans.” FICC-GSD Margin Loans will bear interest at a rate equal to the
overnight interest rate actually earned by the borrower or its affiliates on borrowings under the applicable FICC-GSD Margin
Loan that are posted to clearinghouses or kept available for posting at clearinghouses. The maturity date in respect of FICC-
GSD Margin Loans will not exceed 35 days from the date the loan is made, unless otherwise agreed by the parties. All other
terms of the BGC Credit Agreement, including terms applicable to loans made thereunder that are not FICC-GSD Margin
Loans, remain the same.
On March 12, 2024, the Company borrowed $275.0 million from Cantor under the BGC Credit Agreement and used
the proceeds from such borrowing to repay the principal and interest related to all of the $240.0 million of borrowings
outstanding under the Revolving Credit Agreement. The interest rate on this facility was 6.92%. On April 1, 2024, the
Company repaid in full the $275.0 million of principal and interest amounts outstanding from the BGC Credit Agreement. As
of December 31, 2024, there were no borrowings by the Company outstanding under the BGC Credit Agreement. As of
December 31, 2023, there were no borrowings by BGC Partners or Cantor outstanding under this agreement. The Company
recorded interest expense related to the BGC Credit Agreement of $1.1 million for the year ended December 31, 2024. The
Company did not record any interest expense related to the BGC Credit Agreement for the year ended December 31, 2023.
On June 10, 2024, Cantor borrowed $180.0 million from the Company under the BGC Credit Agreement. Cantor
partially repaid the Company $18.0 million on July 31, 2024, and $12.0 million on September 25, 2024. On October 1, 2024,
Cantor repaid in full to the Company the outstanding principal of $150.0 million borrowed from the Company under the BGC
Credit Agreement. As of December 31, 2024, there were no borrowings by Cantor outstanding under the BGC Credit
Agreement. These borrowings are not considered FICC-GSD Margin Loans. The average interest rate on borrowings under this
facility was 7.13% for the year ended December 31, 2024. The Company recorded interest income related to the BGC Credit
Agreement of $3.8 million for the year ended December 31, 2024. The Company did not record any interest income related to
the BGC Credit Agreement for the year ended December 31, 2023.
Other Agreements with Cantor
The Company is authorized to enter into short-term arrangements with Cantor to cover any delivery failures in
connection with U.S. Treasury securities transactions and to share equally in any net income resulting from such transactions,
as well as any similar clearing and settlement issues. As of both December 31, 2024 and December 31, 2023, there were no
Repurchase Agreements between the Company and Cantor.
As part of the Company’s cash management process, the Company may enter into tri-party Reverse Repurchase
Agreements and other short-term investments, some of which may be with Cantor. As of December 31, 2024 and 2023, there
were no Reverse Repurchase Agreements between the Company and Cantor.
To more effectively manage the Company’s exposure to changes in FX rates, the Company and Cantor have agreed to
jointly manage the exposure. As a result, the Company is authorized to divide the quarterly allocation of any profit or loss
relating to FX currency hedging between the Company and Cantor. The amount allocated to each party is based on the total net
exposure for the Company and Cantor. The ratio of gross exposures of the Company and Cantor is utilized to determine the
shares of profit or loss allocated to each for the period. During the years ended December 31, 2024, 2023 and 2022, the
Company recognized its share of FX loss of $4.1 million, gain of $1.6 million and loss of $0.1 million, respectively. These
gains and losses are included as part of “Other expenses” in the Company’s Consolidated Statements of Operations.
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Pursuant to the separation agreement relating to the Company’s acquisition of certain BGC businesses from Cantor in
2008, Cantor has a right, subject to certain conditions, to be the Company’s customer and to pay the lowest commissions paid
by any other customer, whether by volume, dollar or other applicable measure. In addition, Cantor has an unlimited right to
internally use the Company’s market data without any cost but Cantor does not have the right to furnish such data to any third
party. Any future related party transactions or arrangements between the Company and Cantor are subject to prior approval by
the Audit Committee. During each of the years ended December 31, 2024, 2023 and 2022, the Company recorded revenues
from Cantor entities of $0.3 million related to commissions paid to the Company by Cantor. These revenues are included as part
of “Commissions” in the Company’s Consolidated Statements of Operations.
The Company and Cantor are authorized to utilize each other’s brokers to provide brokerage services for securities not
brokered by such entity, so long as, unless otherwise agreed, such brokerage services were provided in the ordinary course and
on terms no less favorable to the receiving party than such services are provided to typical third-party customers.
In August 2013, the Audit Committee authorized the Company to invest up to $350.0 million in an asset-backed
commercial paper program for which certain Cantor entities serve as placement agent and referral agent. The program issues
short-term notes to money market investors and is expected to be used by the Company from time to time as a liquidity
management vehicle. The notes are backed by assets of highly rated banks. The Company is entitled to invest in the program so
long as the program meets investment policy guidelines, including policies related to ratings. Cantor will earn a spread between
the rate it receives from the short-term note issuer and the rate it pays to the Company on any investments in this program. This
spread will be no greater than the spread earned by Cantor for placement of any other commercial paper note in the program. As
of both December 31, 2024 and December 31, 2023, the Company did not have any investments in the program.
On June 5, 2015, BGC Partners entered into the Exchange Agreement with Cantor providing Cantor, CFGM and other
Cantor affiliates entitled to hold BGC Partners Class B common stock the right to exchange BGC Partners Class A common
stock into shares of BGC Partners Class B common stock from time to time, on a one-to-one basis, subject to adjustment, up to
an aggregate of 34.6 million shares of BGC Class A common stock then owned or subsequently acquired by such Cantor
entities for up to an aggregate of 34.6 million shares of BGC Class B common stock. The Exchange Agreement enabled the
Cantor entities to acquire the same number of shares of BGC Class B common stock that they were entitled to acquire, prior to
the Corporate Conversion, without having to exchange Cantor units in BGC Holdings. In connection with the Corporate
Conversion on July 1, 2023, the Exchange Agreement with Cantor terminated based on its own terms.
On July 1, 2023 as a result of the Corporate Conversion, the total outstanding 64.0 million Cantor units were converted
into shares of BGC Class B common stock, subject to the terms and conditions of the Corporate Conversion Agreement,
provided that a portion of the 64.0 million shares of BGC Class B common stock issued to Cantor will convert into BGC Class
A common stock in the event that BGC Group does not issue at least $75.0 million in shares of BGC Class A or B common
stock in connection with certain acquisition transactions prior to the seventh anniversary of the Corporate Conversion.
As of December 31, 2024, Cantor and CFGM did not own any shares of BGC Class A common stock. As of
December 31, 2024, Cantor and CFGM owned 93.3 million and 3.0 million shares of BGC Class B common stock,
respectively.
Receivables from and Payables to Related Broker-Dealers
Amounts due to or from Cantor and Freedom, one of the Company’s equity method investments, are for transactional
revenues under a technology and services agreement with Freedom, as well as for open derivative contracts. These are included
as part of “Receivables from broker-dealers, clearing organizations, customers and related broker-dealers” or “Payables to
broker-dealers, clearing organizations, customers and related broker-dealers” in the Company’s Consolidated Statements of
Financial Condition. As of December 31, 2024 and 2023, the Company had receivables from Freedom of $1.3 million and $1.4
million, respectively. As of December 31, 2024 and 2023, the Company had $4.8 million and $2.7 million, respectively, in
receivables from Cantor related to open derivative contracts. As of December 31, 2024 and 2023, the Company had $4.0
million and $4.9 million, respectively, in payables to Cantor related to open derivative contracts. As of December 31, 2024 and
2023, the Company had $0.1 million and $0.8 million in receivables from Cantor related to fails and pending trades.
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Loans, Forgivable Loans and Other Receivables from Employees and Partners, Net
The Company has entered into various agreements with certain BGC 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, the Company 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 the
timeframes outlined in the underlying agreements.
As of December 31, 2024 and 2023, the aggregate balance of employee loans, net, was $360.1 million and $367.8
million, respectively, and is included as “Loans, forgivable loans and other receivables from employees and partners, net” in the
Company’s Consolidated Statements of Financial Condition. Compensation expense for the above-mentioned employee loans
for the years ended December 31, 2024, 2023 and 2022 was $59.4 million, $51.3 million and $49.5 million, respectively. The
compensation expense related to these employee loans is included as part of “Compensation and employee benefits” in the
Company’s Consolidated Statements of Operations.
Interest income on the above-mentioned employee loans for the years ended December 31, 2024, 2023 and 2022 was
$13.8 million, $15.1 million and $7.5 million, respectively. The interest income related to these employee loans is included as
part of “Interest and dividend income” in the Company’s Consolidated Statements of Operations.
CEO Program and Other Transactions with CF&Co
As discussed in Note 7—“Stock Transactions and Unit Redemptions,” BGC Partners entered into the August 2022
Sales Agreement, and after the Corporate Conversion, BGC Group entered into the July 2023 Sales Agreement with CF&Co as
the Company’s sales agent under the CEO Program. During both the years ended December 31, 2024 and 2023, the Company
did not sell any shares of Class A common stock under its CEO Program. For the years ended December 31, 2024, 2023 and
2022, the Company was not charged for services provided by CF&Co related to the CEO Program with CF&Co. The net
proceeds of any shares sold would be included as part of “Additional paid-in capital” in the Company’s Consolidated
Statements of Financial Condition.
The Company has engaged CF&Co and its affiliates to act as financial advisors in connection with one or more third-
party business combination transactions as requested by the Company on behalf of its affiliates from time to time on specified
terms, conditions and fees. The Company may pay finders’, investment banking or financial advisory fees to broker-dealers,
including, but not limited to, CF&Co and its affiliates, from time to time in connection with certain business combination
transactions, and, in some cases, the Company may issue shares of BGC Class A common stock in full or partial payment of
such fees.
On October 3, 2014, management was granted approval by the Board and Audit Committee to enter into stock loan
transactions with CF&Co utilizing equities securities. Such stock loan transactions will bear market terms and rates. As of
December 31, 2024 and 2023, the Company did not have any securities loaned transactions with CF&Co.
On July 24, 2018, the Company issued an aggregate of $450.0 million principal amount of BGC Partners 5.375%
Senior Notes. The BGC Partners 5.375% Senior Notes were general senior unsecured obligations of the Company. In
connection with this issuance of the BGC Partners 5.375% Senior Notes, the Company recorded approximately $0.3 million in
underwriting fees payable to CF&Co. The Company also paid CF&Co an advisory fee of $0.2 million in connection with the
issuance. These fees were recorded as a direct reduction from the Notes payable and other borrowings in the Company’s
Consolidated Statements of Financial Condition and were amortized as interest expense over the term of the notes. The BGC
Partners 5.375% Senior Notes matured on July 24, 2023.
On September 27, 2019, the Company issued an aggregate of $300.0 million principal amount of BGC Partners
3.750% Senior Notes. In connection with this issuance of BGC Partners 3.750% Senior Notes, the Company recorded $0.2
million in underwriting fees payable to CF&Co. These fees were recorded as a direct reduction from the Notes payable and
other borrowings in the Company’s Consolidated Statements of Financial Condition and are amortized as interest expense over
the term of the notes.
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On June 11, 2020, BGC Partners’ Board of Directors and its Audit Committee authorized a debt repurchase program
for the repurchase by the Company of up to $50.0 million of Company Debt Securities, and on July 1, 2023, BGC Group’s
Board of Directors and its Audit Committee authorized a debt repurchase program for the repurchase by the Company of up to
$50.0 million of Company Debt Securities. Repurchases of Company Debt Securities, if any, are expected to reduce future cash
interest payments, as well as future amounts due at maturity or upon redemption. Under the authorization, the Company may
make repurchases of Company Debt Securities for cash from time to time in the open market or in privately negotiated
transactions upon such terms and at such prices as management may determine. Additionally, the Company is authorized to
make any such repurchases of Company Debt Securities through CF&Co (or its affiliates), in its capacity as agent or principal,
or such other broker-dealers as management shall determine to utilize from time to time, and such repurchases shall be subject
to brokerage commissions which are no higher than standard market commission rates. On August 21, 2024, the Company
repurchased $0.5 million of outstanding aggregate principal amount, plus accrued interest, of BGC Partners 8.000% Senior
Notes for $0.5 million. As of December 31, 2024, the Company had $49.5 million remaining under its debt repurchase
authorization. For additional information, see Note 17—“Notes Payable and Other Borrowings.”
On July 10, 2020, the Company issued an aggregate of $300.0 million principal amount of the BGC Partners 4.375%
Senior Notes. In connection with this issuance of BGC Partners 4.375% Senior Notes, the Company recorded $0.2 million in
underwriting fees payable to CF&Co. These fees were recorded as a direct reduction from the Notes payable and other
borrowings in the Company’s Consolidated Statements of Financial Condition and are amortized as interest expense over the
term of the notes. Cantor purchased $14.5 million of such senior notes and tendered such notes in the Exchange Offer in
exchange for an equivalent amount of BGC Group 4.375% Senior Notes. Cantor holds such BGC Group 4.375% Senior Notes
as of December 31, 2024.
On May 25, 2023, the Company issued an aggregate of $350.0 million principal amount of the BGC Partners 8.000%
Senior Notes. In connection with this issuance of BGC Partners 8.000% Senior Notes, the Company paid $0.2 million in
underwriting fees to CF&Co. These fees were recorded as a direct reduction from the Notes payable and other borrowings in
the Company’s Consolidated Statements of Financial Condition and are amortized as interest expense over the term of the
notes.
On June 10, 2024, the Company issued an aggregate of $500.0 million principal amount of the BGC Group 6.600%
Senior Notes. In connection with this issuance of BGC Group 6.600% Senior Notes, the Company paid $0.4 million in
underwriting fees to CF&Co. These fees were recorded as a direct reduction from the Notes payable and other borrowings in
the Company’s Consolidated Statements of Financial Condition and are amortized as interest expense over the term of the
notes.
In connection with the issuance of the BGC Group 6.600% Senior Notes, on June 10, 2024, the Company entered into
a Registration Rights Agreement with the initial purchasers in the offering of the BGC Group 6.600% Senior Notes, including
CF&Co, pursuant to which the Company was obligated to file a registration statement with the SEC with respect to an offer to
exchange the BGC Group 6.600% Notes for a substantially identical issue of notes registered under the Securities Act and to
complete such exchange offer prior to 365 days after June 10, 2024. The exchange offer expired on September 27, 2024, and
the tendered BGC Group 6.600% Senior Notes were exchanged for new registered notes with substantially identical terms.
Cantor Rights to Purchase Cantor Units from BGC Holdings
Prior to the Corporate Conversion, Cantor had the right to purchase Cantor units from BGC Holdings upon redemption
of non-exchangeable FPUs redeemed by BGC Holdings upon termination or bankruptcy of the Founding/Working Partner. In
addition, where current, terminating, or terminated partners were permitted by the Company to exchange any portion of their
FPUs and Cantor consented to such exchangeability, the Company would offer to Cantor the opportunity for Cantor to purchase
the same number of Cantor units in BGC Holdings at the price that Cantor would have paid for Cantor units had the Company
redeemed the FPUs. If Cantor acquired any Cantor units as a result of the purchase or redemption by BGC Holdings of any
FPUs, Cantor would be entitled to the benefits (including distributions) of such units it acquired from the date of termination or
bankruptcy of the applicable Founding/Working Partner.
On May 17, 2022, Cantor purchased from BGC Holdings an aggregate of 427,494 Cantor units for an aggregate
consideration of $841,010 as a result of the redemption of 427,494 FPUs, and 52,681 Cantor units for an aggregate
consideration of $105,867 as a result of the exchange of 52,681 FPUs.
On October 25, 2022, Cantor purchased from BGC Holdings an aggregate of 275,833 Cantor units for an aggregate
consideration of $397,196 as a result of the redemption of 275,833 FPUs, and 77,507 Cantor units for aggregate consideration
of $142,613 as a result of the exchange of 77,507 FPUs.
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On April 16, 2023, Cantor purchased from BGC Holdings an aggregate of 533,757 Cantor units for an aggregate
consideration of $1,051,080 as a result of the redemption of 533,757 FPUs, and 85,775 Cantor units for an aggregate
consideration of $173,154 as a result of the exchange of 85,775 FPUs.
On June 30, 2023, Cantor purchased from BGC Holdings an aggregate of 5,425,209 Cantor units for an aggregate
consideration of $9,715,772 as a result of the redemption of 5,425,209 FPUs, and 324,223 Cantor units for an aggregate
consideration of $598,712 as a result of the exchange of 324,223 FPUs.
As of December 31, 2024, there were no FPUs in BGC Holdings remaining.
Cantor Aurel Revenue Sharing Agreement
On June 24, 2021, the Board and Audit Committee authorized the Company’s French subsidiary, Aurel BGC SAS, to
enter into a revenue sharing agreement pursuant to which Cantor would provide services to Aurel to support Aurel’s investment
banking activities with respect to special purpose acquisition companies. The services provided by Cantor to Aurel in support of
such SPAC Investment Banking Activities would include referral of clients, structuring advice, financial advisory services,
referral of investors, deal execution services, and other advisory services in support of Aurel’s SPAC Investment Banking
Activities pursuant to its French investment services license. As compensation, Cantor would receive a revenue share of 80% of
Aurel’s net revenue attributable to SPAC Investment Banking Activities. The term of the revenue sharing agreement was for an
initial period of 12 months, which automatically renewed each year unless either party provided a notice of termination at least
three months prior to the anniversary. Aurel was also authorized to serve as bookrunner, underwriter or advisor in connection
with French SPACs which are sponsored by Cantor at market rates for such services. On December 12, 2024, Aurel and Cantor
mutually terminated the revenue sharing agreement. For the years ended December 31, 2024, 2023 and 2022, Aurel had no
revenue or fees payable to Cantor attributable to SPAC Investment Banking Activities. Any revenue or fees payable to Cantor
attributable to SPAC Investment Banking Activities would be included as part of “Other revenues” and “Fees to related
parties,” respectively, in the Company’s Consolidated Statements of Operations.
Transactions with Executive Officers and Directors
On October 7, 2024, the Compensation Committee approved the redemption of 327,127 non-exchangeable Newmark
Holdings LPUs and 30,285 non-exchangeable Newmark Holdings PLPUs with a determination amount of $278,258, held by
Mr. Windeatt. In connection with this redemption, Mr. Windeatt received 271,362 shares of Newmark Class A common stock
(239,428 Newmark Holdings LPUs multiplied by the then-current Exchange Ratio) and a cash payment of $251,128 (27,332
Newmark Holdings PLPUs). The remaining 31,700 of Newmark Holdings LPUs and 2,953 Newmark Holdings PLPUs with a
determination amount of $27,130, were redeemed for zero in connection with Mr. Windeatt’s LLP status.
On August 8, 2024, Mr. Richards, a member of our Board, sold 13,063 shares of Class A common stock to the
Company. The sale price per share of $9.11 was the closing price of a share of Class A common stock on August 8, 2024. The
transaction was approved by the Audit and Compensation Committees of the Board and was made pursuant to the Company’s
stock buyback authorization.
On January 2, 2024, Mr. Merkel, our Executive Vice President and General Counsel, sold 136,891 shares of Class A
common stock to the Company. The sale price per share of $6.98 was the closing price of a share of Class A common stock on
January 2, 2024. The transaction was approved by the Audit and Compensation Committees of the Board and was made
pursuant to the Company’s stock buyback authorization.
On September 21, 2023, Mr. Windeatt sold 474,808 shares of BGC Class A common stock to the Company. The sale
price per share of $5.29 was the closing price of a share of BGC Class A common stock on September 21, 2023. The
transaction was approved by the Audit Committee and the Compensation Committee of the Board and was made pursuant to
the Company’s stock buyback authorization.
On June 8, 2023, the Company repurchased all of Mr. Windeatt’s 128,279 exchangeable BGC Holdings LPUs at a
price of $4.79 per unit, which was the closing price of a share of our Class A common stock on June 8, 2023. The
Compensation Committee granted Mr. Windeatt 128,279 non-exchangeable BGC Holdings LPUs on April 1, 2021. Pursuant to
the exchange rights schedule of the grant, on April 1, 2023, the 128,279 non-exchangeable BGC Holdings LPUs became
immediately exchangeable.
In connection with the Corporate Conversion, on June 2, 2023 Mr. Merkel sold 150,000 shares of Class A common
stock to BGC Partners at $4.21 per share, the closing price of a share of Class A common stock on June 2, 2023. The
transaction was approved by the Audit and Compensation Committees of the Board of BGC Partners and was made pursuant to
BGC Partners’ stock buyback authorization.
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In connection with the Corporate Conversion, on May 18, 2023, the BGC Partners Compensation Committee approved
the redemption of all of the non-exchangeable BGC Holdings units held by Mr. Merkel at that time. On May 18, 2023, Mr.
Merkel’s 148,146 NPSU-CVs, 33,585 PSU-CVs, and 74,896 PSUs were redeemed for zero and an aggregate of 256,627 shares
of Class A common stock were granted to Mr. Merkel, and 148,146 NPPSU-CVs with a total determination amount of
$681,250 and 33,585 PPSU-CVs with a total determination amount of $162,500 were redeemed for an aggregate cash payment
of $843,750. After deduction of shares of BGC Class A common stock to satisfy applicable tax withholding through the
surrender of shares of BGC Class A common stock valued at $4.61 per share, Mr. Merkel received 196,525 net shares of Class
A common stock.
Since Mr. Lutnick had previously repeatedly waived his rights under the Standing Policy, as of May 18, 2023 his
rights had accumulated for 7,879,736 non-exchangeable PSUs, and 103,763 non-exchangeable PPSUs with a determination
amount of $474,195. Due to the May 18, 2023 monetization of all of Mr. Merkel’s then-remaining non-exchangeable BGC
Holdings units, on such date Mr. Lutnick received additional incremental monetization rights for his then-remaining 3,452,991
non-exchangeable PSUs, and 1,348,042 non-exchangeable PPSUs with a determination amount of $6,175,805.
In connection with the Corporate Conversion and as a result of the monetization event for Mr. Merkel, on May 18,
2023 Mr. Lutnick elected to exercise in full his monetization rights under the Standing Policy, which he had previously waived
in prior years. All of the non-exchangeable BGC Holdings units that Mr. Lutnick held at that time were monetized as follows:
11,332,727 PSUs were redeemed for zero and 11,332,727 shares of Class A common stock were granted to Mr. Lutnick, and
1,451,805 PPSUs with an aggregate determination amount of $6,650,000 were redeemed for an aggregate cash payment of
$6,650,000. After deduction of applicable tax withholding through the surrender of shares of BGC Class A common stock
valued at $4.61 per share, Mr. Lutnick received 5,710,534 net shares of Class A common stock.
On May 18, 2023, Mr. Lutnick also exchanged his then-remaining 520,380 exchangeable PSUs for 520,380 shares of
Class A common stock. After deduction of applicable tax withholding through the surrender of shares of Class A common stock
valued at $4.61 per share, Mr. Lutnick received 232,610 net shares of Class A common stock. In addition, on May 18, 2023,
Mr. Lutnick’s then-remaining 1,474,930 non-exchangeable HDUs were redeemed for a cash capital account payment of
$9,148,000, $2.1 million of which was paid by BGC Partners with the remainder paid by Newmark. As a result of the various
transactions on May 18, 2023 described above, on May 18, 2023, Mr. Lutnick no longer held any limited partnership units of
BGC Holdings.
On April 18, 2023, Dr. Bell, a member of our Board, sold 21,786 shares of Class A common stock to the Company.
The sale price per share of $4.59 was the closing price of a share of Class A common stock on April 18, 2023. The transaction
was approved by the Audit Committee and the Compensation Committee of the Board and was made pursuant to the
Company’s stock buyback authorization.
On March 14, 2022, the Compensation Committee of BGC Partners approved the grant of exchange rights to Mr.
Windeatt with respect to 135,514 non-exchangeable BGC Holdings LPU-NEWs and 27,826 non-exchangeable PLPU-NEWs
(at the average determination price of $4.84 per unit). On August 11, 2022, the Company repurchased 135,514 exchangeable
BGC Holdings LPU-NEWs held by Mr. Windeatt at the price of $4.08 per unit, which was the closing price of the BGC Class
A common stock on August 11, 2022, and redeemed 27,826 exchangeable PLPU-NEWs held by Mr. Windeatt for $134,678,
less applicable taxes and withholdings.
Mr. Windeatt 2023 Deed of Amendment
On July 12, 2023, Mr. Windeatt executed the 2023 Deed of Amendment with the U.K. Partnership which amends his
prior executed Deed of Adherence with the U.K. Partnership regarding the terms of his employment. Under the 2023 Deed of
Amendment, the initial period of Mr. Windeatt’s membership in the U.K. Partnership was extended from September 30, 2025
to December 31, 2028. In addition, under the 2023 Deed of Amendment, commencing January 1, 2027, either party may
terminate the Deed by giving written notice to the other party at least 24 months prior to the expiration of the initial period. Mr.
Windeatt’s membership, unless terminated earlier in accordance with the terms of the Deed, will continue following December
31, 2028 on the same terms and conditions set forth in the Deed until written notice to terminate is provided and the 24-month
notice period expires.
Pursuant to the 2023 Deed of Amendment, Mr. Windeatt is also entitled to an increase in drawings from an aggregate
amount of £600,000 per year to an aggregate amount of £700,000 per year effective January 1, 2023, which shall be reviewed
by the Compensation Committee annually. Mr. Windeatt is also eligible for additional allocations of the U.K. Partnership’s
profits, subject to the approval of the Compensation Committee.
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In connection and in consideration for Mr. Windeatt’s execution of the 2023 Deed of Amendment, on July 10, 2023
the Company approved accelerating the vesting of 720,509 of the Company’s RSUs held by Mr. Windeatt (calculated based
upon the closing price of the Company’s Class A common stock on July 10, 2023 which was $4.45) and the vesting of
$780,333 of the RSU Tax Account held by Mr. Windeatt. Such RSUs and RSU Tax Account amount vested on July 12, 2023,
and the total value of this transaction was approximately $3,986,600.
Cantor Referral Fee
On October 30, 2024, the Audit Committee approved the receipt of a referral fee of $1.5 million paid to the Company
by an affiliate of Cantor in connection with the introduction by certain of the Company’s brokers of a Cantor client to a Cantor
affiliate. Additionally, the Audit Committee approved attributing the entire referral fee to the individual brokers in the form of
an award of the Company’s RSUs.
Transactions with the Relief Fund
During the year ended December 31, 2015, the Company committed to make charitable contributions to the Cantor
Fitzgerald Relief Fund in the amount of $40.0 million, which was included in “Other expenses” in the Company’s Consolidated
Statements of Operations for the year ended December 31, 2015 and “Accounts payable, accrued and other liabilities” in the
Company’s Consolidated Statements of Financial Condition. The Company fully paid the $40.0 million commitment during the
third quarter of 2022.
As of December 31, 2024 and 2023, the Company had an additional liability to the Cantor Fitzgerald Relief Fund and
The Cantor Foundation (UK) for $13.2 million and $12.7 million, respectively, which included $9.5 million and $6.7 million of
additional expense taken in September 2024 and 2023, respectively, above the original $40.0 million commitment.
Other Transactions
The Company was authorized to enter into loans, investments or other credit support arrangements for Aqua, an
alternative electronic trading platform that offered new pools of block liquidity to the global equities markets; such
arrangements were proportionally and on the same terms as similar arrangements between Aqua and Cantor. On each of
February 15, 2022 and February 25, 2021, the Board and Audit Committee increased the authorized amount by an additional
$1.0 million, to an aggregate of $21.2 million. The Company had been further authorized to provide counterparty or similar
guarantees on behalf of Aqua from time to time, provided that liability for any such guarantees, as well as similar guarantees
provided by Cantor, would be shared proportionally with Cantor. Aqua was 51% owned by Cantor and 49% owned by the
Company.
The Company had also entered into a subordinated loan agreement with Aqua, whereby the Company loaned Aqua the
principal sum of $1.0 million, and was recorded as part of “Receivables from related parties” in the Company’s Consolidated
Statements of Financial Condition. The scheduled maturity date on the subordinated loan was September 1, 2024. The
Company did not recognize any interest income on the subordinated loan subsequent to it being designated as a non-accrual
loan in November 2022. As of December 31, 2022, the Company wrote off $0.6 million of the subordinated loan, which was
recorded as part of “Other expenses” on the Company’s Consolidated Statements of Operations. During the fourth quarter of
2023, the Company received cash payment fully satisfying the remaining subordinated loan receivable of $0.4 million.
The Company periodically acts as an intermediary to administer payments on behalf of related parties.
172
14.
Investments
Equity Method Investments and Investments Carried Under the Measurement Alternative
(in thousands)
Percent
Ownership1
December 31,
2024
December 31,
2023
Advanced Markets Holdings
25%
$
3,772 $
4,481
China Credit BGC Money Broking Company Limited
33%
23,242
21,277
Freedom International Brokerage
45%
9,637
9,507
Other
2,424
2,857
Equity method investments
$
39,075 $
38,122
Investments carried under measurement alternative
192
192
Total equity method and investments carried under measurement
alternative
$
39,267 $
38,314
_______________________________________
1
Represents the Company’s voting interest in the equity method investment as of December 31, 2024 and 2023.
The carrying value of the Company’s equity method investments was $39.1 million and $38.1 million as of
December 31, 2024 and 2023, respectively, and is included in “Investments” in the Company’s Consolidated Statements of
Financial Condition.
The Company recognized gains of $8.4 million, $9.2 million and $10.9 million related to its equity method
investments for the years ended December 31, 2024, 2023 and 2022, respectively. The Company’s share of the net gains or
losses is reflected in “Gains (losses) on equity method investments” in the Company’s Consolidated Statements of Operations.
For the years ended December 31, 2024, 2023 and 2022, the Company did not recognize impairment charges of
existing equity method investments, however, it wrote off a portion of a subordinated loan to an equity method investee in the
year ended December 31, 2022 (see “Investments in VIEs” within this note for more information). During the years ended
December 31, 2024, 2023 and 2022, the Company did not sell any equity method investments.
Summarized financial information for the Company’s equity method investments is as follows (in thousands):
Year Ended December 31,
2024
2023
2022
Statements of operations:
Total revenues
$
134,232 $
111,242 $
125,405
Total expenses
89,127
84,216
88,050
Income before income taxes
$
45,105 $
27,026 $
37,355
December 31,
2024
2023
Statements of financial condition:
Cash and cash equivalents
$
73,519 $
79,440
Fixed assets, net
2,168
1,900
Other assets
59,068
51,336
Total assets
$
134,755 $
132,676
Other liabilities
71,222
81,898
Total partners’ capital
63,533
50,779
Total liabilities and partners’ capital
$
134,755 $
132,677
See Note 13—“Related Party Transactions” for information regarding related party transactions with unconsolidated
entities included in the Company’s Consolidated Financial Statements.
173
Investments Carried Under Measurement Alternative
The Company has acquired equity investments for which it did not have the ability to exert significant influence over
operating and financial policies of the investees. These investments are accounted for using the measurement alternative in
accordance with the guidance on recognition and measurement.
The carrying value of these investments as of both December 31, 2024 and 2023 was $0.2 million, and they are
included in “Investments” in the Company’s Consolidated Statements of Financial Condition. The Company did not recognize
any gains, losses, or impairments relating to investments carried under the measurement alternative for the years ended
December 31, 2024, 2023 and 2022.
In addition, as of December 31, 2024 and 2023, the Company owns membership shares, which are included in “Other
assets” in the Company’s Consolidated Statements of Financial Condition. These equity investments are accounted for using
the measurement alternative in accordance with the guidance on recognition and measurement. These investments, which do
not have a readily determinable fair value, are initially recognized at cost and remeasured through earnings when there is an
observable transaction involving the same or similar investment of the same issuer, or due to an impairment. The Company
recorded $37.2 million of unrealized gains, $1.9 million of unrealized gains, and $1.8 million of unrealized gains to reflect
observable transactions for these shares during the years ended December 31, 2024, 2023, and 2022, respectively. The
unrealized gains (losses) are reflected in “Other income (loss)” in the Company’s Consolidated Statements of Operations.
Investments in VIEs
Unconsolidated VIE
One of the Company’s equity method investments is considered a VIE, as defined under the accounting guidance for
consolidation. The Company is not considered the primary beneficiary of and therefore does not consolidate the VIE. The
Company’s involvement with the VIE is in the form of direct equity interest. The Company’s maximum exposure to loss with
respect to the VIE is its investment.
The following table sets forth the Company’s investment in its unconsolidated VIE and the maximum exposure to loss
(in thousands).
December 31, 2024
December 31, 2023
Investment
Maximum
Exposure to Loss
Investment
Maximum
Exposure to Loss
Variable interest entity1
$
674 $
674 $
2,857 $
2,857
__________________
1
The Company’s maximum exposure to loss with respect to its unconsolidated VIE includes the sum of its equity investments. The
Company has entered into a subordinated loan agreement with Aqua, whereby the Company agreed to lend the principal sum of
$1.0 million. The Company did not recognize any interest income on the subordinated loan subsequent to being designated as a
non-accrual loan in November 2022. As of December 31, 2022, the Company had written off $0.6 million of the subordinated loan,
which was recorded as part of “Other expenses” on the Company’s Consolidated Statements of Operations. As of December 31,
2023, the Company had received cash payment fully satisfying the remaining subordinated loan receivable of $0.4 million.
Consolidated VIE
The Company also invested in a limited liability company that is focused on developing a proprietary trading
technology. The limited liability company is a VIE, and it was determined that the Company is the primary beneficiary of this
VIE because the Company was the provider of the majority of this VIE’s start-up capital and has the power to direct the
activities of this VIE that most significantly impact its economic performance, primarily through its voting percentage and
consent rights on the activities that would most significantly influence the entity. The consolidated VIE had total assets of $5.3
million and $9.5 million as of December 31, 2024 and 2023, respectively, which primarily consisted of clearing margin. There
were no material restrictions on the consolidated VIE’s assets. The consolidated VIE had total liabilities of $1.2 million and
$1.2 million as of December 31, 2024 and 2023, respectively. The Company’s exposure to economic loss on this VIE was $1.3
million and $5.7 million as of December 31, 2024 and 2023, respectively.
174
15.
Fixed Assets, Net
Fixed assets, net consisted of the following (in thousands):
December 31,
2024
December 31,
2023
Computer and communications equipment
$
112,463 $
103,621
Software, including software development costs
401,040
360,047
Leasehold improvements and other fixed assets
108,303
99,034
621,806
562,702
Less: accumulated depreciation and amortization
(431,794)
(384,402)
Fixed assets, net
$
190,012 $
178,300
Depreciation expense was $21.9 million, $21.0 million and $22.3 million for the years ended December 31, 2024,
2023 and 2022, respectively. Depreciation is included as part of “Occupancy and equipment” in the Company’s Consolidated
Statements of Operations.
The Company has approximately $4.6 million and $5.9 million of asset retirement obligations related to certain of its
leasehold improvements as of December 31, 2024 and 2023, respectively. The associated asset retirement cost is capitalized as
part of the carrying amount of the long-lived asset. The liability is discounted and accretion expense is recognized using the
credit adjusted risk-free interest rate in effect when the liability was initially recognized.
For the years ended December 31, 2024, 2023 and 2022 software development costs totaling $42.4 million, $45.0
million, and $48.2 million, respectively, were capitalized. Amortization of software development costs totaled $40.1 million,
$43.3 million and $37.1 million for the years ended December 31, 2024, 2023 and 2022, respectively. Amortization of software
development costs is included as part of “Occupancy and equipment” in the Company’s Consolidated Statements of Operations.
Impairment charges of $0.7 million, $3.1 million and $6.1 million were recorded for the years ended December 31,
2024, 2023 and 2022, respectively, related to the evaluation of capitalized software projects for future benefit and for fixed
assets no longer in service. Impairment charges related to capitalized software and fixed assets are reflected in “Occupancy and
equipment” in the Company’s Consolidated Statements of Operations.
16.
Goodwill and Other Intangible Assets, Net
The changes in the carrying amount of goodwill for the years ended December 31, 2024 and 2023 were as follows (in
thousands):
Goodwill
Balance at December 31, 2022
$
486,585
Acquisitions
19,901
Measurement period adjustments
(1,493)
Cumulative translation adjustment
1,351
Balance at December 31, 2023
$
506,344
Acquisitions
35,466
Measurement period adjustments
707
Cumulative translation adjustment
(2,227)
Balance at December 31, 2024
$
540,290
For additional information on Goodwill, see Note 4—“Acquisitions.”
The Company completed its annual goodwill impairment testing during the fourth quarters of 2024 and 2023,
respectively, which did not result in any goodwill impairment. See Note 3—“Summary of Significant Accounting Policies” for
more information.
175
Other intangible assets consisted of the following (in thousands, except weighted-average remaining life):
December 31, 2024
Gross Amount
Accumulated
Amortization
Net Carrying
Amount
Weighted-
Average
Remaining Life
(Years)
Definite life intangible assets:
Customer-related
$
256,374 $
113,590 $
142,784
10.8
Technology
23,997
23,997
—
N/A
Noncompete agreements
21,815
20,621
1,194
1.5
Patents
12,577
11,102
1,475
2.7
All other
19,937
6,711
13,226
12.1
Total definite life intangible assets
334,700
176,021
158,679
Indefinite life intangible assets:
Trade names
79,570
—
79,570
N/A
Licenses
2,207
—
2,207
N/A
Domain name
454
—
454
N/A
Total indefinite life intangible assets
82,231
—
82,231
N/A
Total
$
416,931 $
176,021 $
240,910
December 31, 2023
Gross Amount
Accumulated
Amortization
Net Carrying
Amount
Weighted-
Average
Remaining Life
(Years)
Definite life intangible assets:
Customer-related
$
210,655 $
97,401 $
113,254
9.7
Technology
23,997
23,997
—
N/A
Noncompete agreements
20,892
19,322
1,570
2.2
Patents
11,950
10,703
1,247
2.9
All other
20,325
7,364
12,961
10.3
Total definite life intangible assets
287,819
158,787
129,032
9.6
Indefinite life intangible assets:
Trade names
79,570
—
79,570
N/A
Licenses
2,229
—
2,229
N/A
Domain name
454
—
454
N/A
Total indefinite life intangible assets
82,253
—
82,253
N/A
Total
$
370,072 $
158,787 $
211,285
Intangible amortization expense was $19.6 million, $16.0 million and $15.7 million for the years ended December 31,
2024, 2023 and 2022, respectively. Intangible amortization is included as part of “Other expenses” in the Company’s
Consolidated Statements of Operations.
The Company completed its annual intangible impairment testing during the fourth quarter of 2024. There were no
impairment charges for the Company’s definite and indefinite life intangibles for the years ended December 31, 2024, 2023 and
2022. See Note 3—“Summary of Significant Accounting Policies” for more information.
176
The estimated future amortization expense of definite life intangible assets as of December 31, 2024 is as follows (in
millions):
2025
$
21.2
2026
20.2
2027
15.9
2028
15.1
2029
11.4
2030 and thereafter
74.9
Total
$
158.7
17.
Notes Payable and Other Borrowings
Notes payable and other borrowings consisted of the following (in thousands):
December 31,
2024
December 31,
2023
Unsecured senior revolving credit agreement
$
195,831 $
239,180
BGC Group 3.750% Senior Notes due October 1, 2024
—
254,814
BGC Partners 3.750% Senior Notes due October 1, 2024
—
44,383
BGC Group 4.375% Senior Notes due December 15, 2025
287,462
286,729
BGC Partners 4.375% Senior Notes due December 15, 2025
11,824
11,800
BGC Group 8.000% Senior Notes due May 25, 2028
344,620
343,852
BGC Partners 8.000% Senior Notes due May 25, 2028
2,257
2,748
BGC Group 6.600% Senior Notes due June 10, 2029
495,546
—
Total Notes payable and other borrowings1, 2
$
1,337,540 $
1,183,506
______________________________________
1
The Company was in compliance with all debt covenants, as applicable, as of December 31, 2024 and December 31, 2023.
2
Presented net of deferred financing costs, which are recorded in the Company’s Consolidated Statements of Financial Condition as
a direct reduction of the Notes payable and other borrowings. As of December 31, 2024 and 2023, total deferred financing costs
were $12.0 million and $6.5 million, respectively.
Exchange Offer
On October 6, 2023, BGC Group completed the Exchange Offer, in which BGC Group offered to exchange the BGC
Partners Notes for new notes to be issued by BGC Group with the same respective interest rates, maturity dates and
substantially identical terms as the tendered notes, and cash. In connection with the Exchange Offer, and on behalf of BGC
Partners, BGC Group also solicited consents from (i) holders of the BGC Partners Notes to certain proposed amendments to the
indenture and supplemental indentures pursuant to which such BGC Partners Notes were issued to, among other things,
eliminate certain affirmative and restrictive covenants and events of default, including the “Change of Control” provisions
described below, which had applied to each series of the BGC Partners Notes, and (ii) holders of the BGC Partners 8.000%
Senior Notes to amend the registration rights agreement relating thereto to terminate such agreement. As of September 19,
2023, the requisite note holder consents were received to adopt the proposed indenture amendments and terminate the
registration rights agreement relating to the BGC Partners 8.000% Senior Notes. In connection with the October 6, 2023 closing
of the Exchange Offer, (i) $255.5 million aggregate principal amount of BGC Partners 3.750% Senior Notes were exchanged
for BGC Group 3.750% Senior Notes and subsequently cancelled, $288.2 million aggregate principal amount of BGC Partners
4.375% Senior Notes were exchanged for BGC Group 4.375% Senior Notes and subsequently cancelled, $347.2 million
aggregate principal amount of BGC Partners 8.000% Senior Notes were exchanged for BGC Group 8.000% Senior Notes and
subsequently cancelled, and equivalent aggregate principal amounts of BGC Group 3.750% Senior Notes, BGC Group 4.375%
Senior Notes and BGC Group 8.000% Senior Notes, respectively, were issued; (ii) the indenture and supplemental indentures
relating to the BGC Partners 3.750% Senior Notes, the BGC Partners 4.375% Senior Notes and the BGC Partners 8.000%
Senior Notes were amended as proposed; and (iii) the registration rights agreement relating to the BGC Partners 8.000% Senior
Notes was terminated. Issuance costs related to the Exchange Offer of $0.9 million are amortized as interest expense and the
carrying value of the BGC Group 3.750% Senior Notes, the BGC Group 4.375% Senior Notes, and the BGC Group 8.000%
Senior Notes will accrete up to the face amount over the term of the notes.
177
On October 19, 2023, the Company filed a resale registration statement on Form S-3 pursuant to which CF&Co could
make offers and sales of the BGC Group 3.750% Senior Notes, the BGC Group 4.375% Senior Notes and the BGC Group
8.000% Senior Notes in connection with ongoing market-making transactions which could occur from time to time. Market-
making transactions pursuant to this resale registration statement were terminated on November 8, 2024 in connection with the
filing of the replacement market-making resale registration statement described under “—6.600% Senior Notes” below.
Unsecured Senior Revolving Credit Agreement
On November 28, 2018, BGC Partners entered into the Revolving Credit Agreement with Bank of America, N.A., as
administrative agent, and a syndicate of lenders, which replaced the previously existing committed unsecured senior revolving
credit agreement. The maturity date of the Revolving Credit Agreement was November 28, 2020, and the maximum revolving
loan balance was $350.0 million. Borrowings under this Revolving Credit Agreement bore interest at either LIBOR or a defined
base rate plus additional margin. On December 11, 2019, BGC Partners entered into an amendment to the Revolving Credit
Agreement. Pursuant to the amendment, the maturity date was extended to February 26, 2021. On February 26, 2020, BGC
Partners entered into a second amendment to the Revolving Credit Agreement, pursuant to which, the maturity date was
extended by two years to February 26, 2023. There was no change to the interest rate or the maximum revolving loan balance.
On March 10, 2022, BGC Partners entered into an amendment and restatement of the senior unsecured revolving credit
agreement, pursuant to which the maturity date was extended to March 10, 2025, the size of the credit facility was increased to
$375.0 million, and borrowings under this agreement bear interest based on either SOFR or a defined base rate plus additional
margin. On October 6, 2023, the Revolving Credit Agreement was amended to exclude the BGC Partners Notes from the
restrictive covenant in the Revolving Credit Agreement limiting the indebtedness of subsidiaries, and BGC Group assumed all
of the rights and obligations of BGC Partners under the Revolving Credit Agreement and has become the borrower thereunder.
On April 26, 2024, the Company amended and restated the Revolving Credit Agreement to, among other things, extend the
maturity date to April 26, 2027, and provide the Company with the right to increase the facility up to $475.0 million, subject to
certain conditions being met. On December 6, 2024, the Company amended the amended and restated Revolving Credit
Agreement to increase the size of the credit facility to $700.0 million. The borrowing rates and financial covenants under the
amended and restated Revolving Credit Agreement, as amended, are substantially unchanged.
As of December 31, 2024, there were $195.8 million borrowings outstanding, net of deferred financing costs of $4.2
million under the Revolving Credit Agreement. As of December 31, 2023, there were $239.2 million of borrowings
outstanding, net of deferred financing costs of $0.8 million under the Revolving Credit Agreement. The average interest rate on
the outstanding borrowings for the years ended December 31, 2024 and 2023 was 6.99% and 7.07%, respectively. BGC Group
recorded $12.2 million and $4.4 million of interest expense related to the Revolving Credit Agreement for the years ended
December 31, 2024 and 2023, respectively. BGC Group did not record any interest expense related to the Revolving Credit
Agreement for the year ended December 31, 2022.
BGC Partners did not record any interest expense related to the Revolving Credit Agreement for the year ended
December 31, 2024. BGC Partners recorded interest expense related to the Revolving Credit Agreement of $6.9 million and
$2.3 million for the years ended December 31, 2023 and 2022, respectively.
Senior Notes
The BGC Group Notes and BGC Partners Notes are recorded at amortized cost. The carrying amounts and estimated
fair values of the BGC Group Notes and BGC Partners Notes were as follows (in thousands):
December 31, 2024
December 31, 2023
Carrying
Amount
Fair Value
Carrying
Amount
Fair Value
BGC Group 3.750% Senior Notes due October 1, 2024
—
—
254,814
249,722
BGC Partners 3.750% Senior Notes due October 1, 2024
—
—
44,383
43,464
BGC Group 4.375% Senior Notes due December 15, 2025
287,462
285,556
286,729
276,569
BGC Partners 4.375% Senior Notes due December 15, 2025
11,824
11,740
11,800
11,371
BGC Group 8.000% Senior Notes due May 25, 2028
344,620
369,065
343,852
363,274
BGC Partners 8.000% Senior Notes due May 25, 2028
2,257
2,416
2,748
2,901
BGC Group 6.600% Senior Notes due June 10, 2029
495,546
513,366
—
—
Total
$
1,141,709 $
1,182,143 $
944,326 $
947,301
178
The fair values of the BGC Group Notes and BGC Partners Notes were determined using observable market prices as
these securities are traded, and based on whether they are deemed to be actively traded, the BGC Partners 5.375% Senior Notes,
the BGC Group 3.750% Senior Notes, the BGC Partners 3.750% Senior Notes, the BGC Group 4.375% Senior Notes, the BGC
Partners 4.375% Senior Notes, the BGC Group 8.000% Senior Notes, the BGC Partners 8.000% Senior Notes, and the BGC
Group 6.600% Senior Notes are considered Level 2 within the fair value hierarchy.
5.375% Senior Notes
On July 24, 2018, BGC Partners issued an aggregate of $450.0 million principal amount of BGC Partners 5.375%
Senior Notes. The BGC Partners 5.375% Senior Notes were general senior unsecured obligations of BGC Partners. The BGC
Partners 5.375% Senior Notes bore interest at a rate of 5.375% per year, payable in cash on January 24 and July 24 of each
year, commencing January 24, 2019. The BGC Partners 5.375% Senior Notes matured on July 24, 2023. Prior to maturity, BGC
Partners was able to redeem some or all of the BGC Partners 5.375% Senior Notes at any time or from time to time for cash at
certain “make-whole” redemption prices (as set forth in the supplemental indenture related to the BGC Partners 5.375% Senior
Notes). If a “Change of Control Triggering Event” (as defined in the supplemental indenture governing the BGC Partners
5.375% Senior Notes) occurred, holders could have required BGC Partners to purchase all or a portion of their notes for cash at
a price equal to 101% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but
excluding, the purchase date. The initial carrying value of the BGC Partners 5.375% Senior Notes was $444.2 million, net of
discount and debt issuance costs of $5.8 million. The issuance costs were amortized as interest expense and the carrying value
of the BGC Partners 5.375% Senior Notes accreted up to the face amount over the term of the notes. On July 24, 2023, BGC
Partners repaid the principal plus accrued interest on the BGC Partners 5.375% Senior Notes. BGC Partners recorded interest
expense related to the BGC Partners 5.375% Senior Notes of $14.5 million and $25.5 million for the years ended December 31,
2023 and 2022, respectively.
3.750% Senior Notes
On September 27, 2019, BGC Partners issued an aggregate of $300.0 million principal amount of BGC Partners
3.750% Senior Notes. The BGC Partners 3.750% Senior Notes are general unsecured obligations of BGC Partners. The BGC
Partners 3.750% Senior Notes bore interest at a rate of 3.750% per year, payable in cash on April 1 and October 1 of each year,
commencing April 1, 2020. The BGC Partners 3.750% Senior Notes matured on October 1, 2024. BGC Partners was able to
redeem some or all of the BGC Partners 3.750% Senior Notes at any time or from time to time for cash at certain “make-whole”
redemption prices (as set forth in the supplemental indenture governing the BGC Partners 3.750% Senior Notes). The initial
carrying value of the BGC Partners 3.750% Senior Notes was $296.1 million, net of discount and debt issuance costs of $3.9
million. The issuance costs were amortized as interest expense and the carrying value of the BGC Partners 3.750% Senior
Notes accreted up to the face amount over the term of the notes.
As discussed above, on October 6, 2023, pursuant to the Exchange Offer, $255.5 million aggregate principal amount
of BGC Partners 3.750% Senior Notes were exchanged for BGC Group 3.750% Senior Notes and subsequently cancelled, and
certain amendments to the indenture and supplemental indenture governing the BGC Partners 3.750% Senior Notes became
effective. The BGC Group 3.750% Senior Notes matured on October 1, 2024 and bore interest at a rate of 3.750% per year,
payable in cash on April 1 and October 1 of each year, commencing April 1, 2024. BGC Group was able to redeem some or all
of the BGC Group 3.750% Senior Notes at any time or from time to time for cash at certain “make-whole” redemption prices
(as set forth in the supplemental indenture related to the BGC Group 3.750% Senior Notes). If a “Change of Control Triggering
Event” (as defined in the supplemental indenture related to the BGC Group 3.750% Senior Notes) occurred, holders could have
required BGC Group to purchase all or a portion of their notes for cash at a price equal to 101% of the principal amount of the
notes to be purchased plus any accrued and unpaid interest to, but excluding, the purchase date.
Following the closing of the Exchange Offer, $44.5 million aggregate principal amount of BGC Partners 3.750%
Senior Notes remained outstanding.
On October 1, 2024, BGC Group repaid the principal plus accrued interest on the BGC Group 3.750% Senior Notes.
BGC Group recorded interest expense related to the BGC Group 3.750% Senior Notes of $7.9 million and $2.6 million for the
years ended December 31, 2024 and 2023. BGC Group did not record interest expense related to the BGC Group 3.750%
Senior Notes for the year ended December 31, 2022. On October 1, 2024, BGC Partners repaid the principal plus accrued
interest on the BGC Partners 3.750% Senior Notes. BGC Partners recorded interest expense related to the BGC Partners
3.750% Senior Notes of $1.3 million, $9.5 million and $12.1 million for the years ended December 31, 2024, 2023 and 2022,
respectively.
179
4.375% Senior Notes
On July 10, 2020, BGC Partners issued an aggregate of $300.0 million principal amount of BGC Partners 4.375%
Senior Notes. The BGC Partners 4.375% Senior Notes are general unsecured obligations of BGC Partners. The BGC Partners
4.375% Senior Notes bear interest at a rate of 4.375% per year, payable in cash on June 15 and December 15 of each year,
commencing December 15, 2020. The BGC Partners 4.375% Senior Notes will mature on December 15, 2025. BGC Partners
may redeem some or all of the BGC Partners 4.375% Senior Notes at any time or from time to time for cash at certain “make-
whole” redemption prices (as set forth in the supplemental indenture governing the BGC Partners 4.375% Senior Notes). The
initial carrying value of the BGC Partners 4.375% Senior Notes was $296.8 million, net of discount and debt issuance costs of
$3.2 million. The issuance costs are amortized as interest expense and the carrying value of the BGC Partners 4.375% Senior
Notes will accrete up to the face amount over the term of the notes.
As discussed above, on October 6, 2023, pursuant to the Exchange Offer, $288.2 million aggregate principal amount
of BGC Partners 4.375% Senior Notes were exchanged for BGC Group 4.375% Senior Notes and subsequently cancelled, and
certain amendments to the indenture and supplemental indenture governing the BGC Partners 4.375% Senior Notes became
effective. The BGC Group 4.375% Senior Notes will mature on December 15, 2025 and bear interest at a rate of 4.375% per
year, payable in cash on June 15 and December 15 of each year, commencing December 15, 2023. BGC Group may redeem
some or all of the BGC Group 4.375% Senior Notes at any time or from time to time for cash at certain “make-whole”
redemption prices (as set forth in the supplemental indenture related to the BGC Group 4.375% Senior Notes). If a “Change of
Control Triggering Event” (as defined in the supplemental indenture related to the BGC Group 4.375% Senior Notes) occurs,
holders may require BGC Group to purchase all or a portion of their notes for cash at a price equal to 101% of the principal
amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the purchase date.
Following the closing of the Exchange Offer, $11.8 million aggregate principal amount of BGC Partners 4.375%
Senior Notes remained outstanding. Cantor participated in the Exchange Offer, and currently holds $14.5 million aggregate
principal amount of BGC Group 4.375% Senior Notes.
The carrying value of the BGC Group 4.375% Senior Notes was $287.5 million as of December 31, 2024. BGC Group
recorded interest expense related to the BGC Group 4.375% Senior Notes of $13.3 million and $3.3 million for the years ended
December 31, 2024 and 2023. BGC Group did not record interest expense related to the BGC Group 4.375% Senior Notes for
the year ended December 31, 2022. The carrying value of the BGC Partners 4.375% Senior Notes was $11.8 million as
of December 31, 2024. BGC Partners recorded interest expense related to the BGC Partners 4.375% Senior Notes of $0.5
million, $10.5 million and $13.8 million for the years ended December 31, 2024, 2023 and 2022, respectively.
8.000% Senior Notes
On May 25, 2023, BGC Partners issued an aggregate of $350.0 million principal amount of BGC Partners 8.000%
Senior Notes. The BGC Partners 8.000% Senior Notes are general unsecured obligations of BGC Partners. The BGC Partners
8.000% Senior Notes bear interest at a rate of 8.000% per year, payable in cash on May 25 and November 25 of each year,
commencing November 25, 2023. The BGC Partners 8.000% Senior Notes will mature on May 25, 2028. BGC Partners may
redeem some or all of the BGC Partners 8.000% Senior Notes at any time or from time to time for cash at certain “make-whole”
redemption prices (as set forth in the supplemental indenture governing the BGC Partners 8.000% Senior Notes). The initial
carrying value of the BGC Partners 8.000% Senior Notes was $346.6 million, net of discount and debt issuance costs of
$3.4 million. The issuance costs are amortized as interest expense and the carrying value of the BGC Partners 8.000% Senior
Notes will accrete up to the face amount over the term of the notes.
On October 6, 2023, pursuant to the Exchange Offer, $347.2 million aggregate principal amount of BGC Partners
8.000% Senior Notes were exchanged for BGC Group 8.000% Senior Notes and subsequently cancelled, and certain
amendments to the indenture and supplemental indenture governing the BGC Partners 8.000% Senior Notes became effective.
The BGC Group 8.000% Senior Notes will mature on May 25, 2028 and bear interest at a rate of 8.000% per year, payable in
cash on May 25 and November 25 of each year, commencing November 25, 2023. BGC Group may redeem some or all of the
BGC Group 8.000% Senior Notes at any time or from time to time for cash at certain “make-whole” redemption prices (as set
forth in the supplemental indenture related to the BGC Group 8.000% Senior Notes). If a “Change of Control Triggering
Event” (as defined in the supplemental indenture related to the BGC Group 8.000% Senior Notes) occurs, holders may require
BGC Group to purchase all or a portion of their notes for cash at a price equal to 101% of the principal amount of the notes to
be purchased plus any accrued and unpaid interest to, but excluding, the purchase date.
180
Following closing of the Exchange Offer, $2.8 million aggregate principal amount of the BGC Partners 8.000% Senior
Notes remained outstanding. In connection with the issuance of the BGC Partners 8.000% Senior Notes, BGC Partners entered
into a registration rights agreement providing for a future registered exchange offer by May 25, 2024 in which holders of the
BGC Partners 8.000% Senior Notes, issued in a private placement on May 25, 2023, could exchange such notes for new
registered notes with substantially identical terms. Such registration rights agreement was terminated in connection with the
closing of the Exchange Offer.
The carrying value of the BGC Group 8.000% Senior Notes was $344.6 million as of December 31, 2024. BGC Group
recorded interest expense related to the BGC Group 8.000% Senior Notes of $28.5 million and $7.1 million for the years ended
December 31, 2024 and 2023, respectively.
On August 21, 2024, the Company repurchased $0.5 million of outstanding aggregate principal amount, plus accrued
interest, of BGC Partners 8.000% Senior Notes for $0.5 million. The carrying value of the BGC Partners 8.000% Senior Notes
was $2.3 million as of December 31, 2024. BGC Partners recorded interest expense related to the BGC Partners 8.000% Senior
Notes of $0.2 million and $10.0 million for the years ended December 31, 2024 and 2023.
6.600% Senior Notes
On June 10, 2024, the Company issued an aggregate of $500.0 million principal amount of BGC Group 6.600% Senior
Notes. The BGC Group 6.600% Senior Notes are general unsecured obligations of BGC Group. The BGC Group 6.600%
Senior Notes bear interest at a rate of 6.600% per year, payable in cash on June 10 and December 10 of each year, commencing
December 10, 2024. The BGC Group 6.600% Senior Notes will mature on June 10, 2029. The Company may redeem some or
all of the BGC Group 6.600% Senior Notes at any time or from time to time for cash at certain “make-whole” redemption
prices (as set forth in the supplemental indenture governing the BGC Group 6.600% Senior Notes). The initial carrying value of
the BGC Group 6.600% Senior Notes was $495.0 million, net of discount and debt issuance costs of $5.0 million. The issuance
costs are amortized as interest expense and the carrying value of the BGC Group 6.600% Senior Notes will accrete up to the
face amount over the term of the notes.
On November 8, 2024, the Company filed a resale registration statement on Form S-3 pursuant to which CF&Co may
make offers and sales of the BGC Group 4.375% Senior Notes, BGC Group 8.000% Senior Notes and BGC Group 6.600%
Senior Notes in connection with ongoing market-making transactions which may occur from time to time. Such market-making
transactions in these securities may occur in the open market or may be privately negotiated at prevailing market prices at the
time of resale or at related or negotiated prices. Neither CF&Co, nor any other of the Company’s other affiliates, has any
obligation to make a market in our securities, and CF&Co or any such other affiliate may discontinue market-making activities
at any time without notice.
The carrying value of the BGC Group 6.600% Senior Notes was $495.5 million as of December 31, 2024. BGC Group
recorded interest expense related to the BGC Group 6.600% Senior Notes of $18.9 million for the year ended December 31,
2024.
Collateralized Borrowings
On April 8, 2019, BGC Partners entered into a $15.0 million secured loan arrangement, under which it pledged certain
fixed assets as security for a loan. This arrangement incurred interest at a fixed rate of 3.77% and matured on April 8, 2023, at
which point the loan was repaid in full; therefore, there were no borrowings as of December 31, 2024 and 2023. BGC Partners
did not record any interest expense related to this secured loan arrangement for the year ended December 31, 2024. BGC
Partners recorded interest expense related to this secured loan arrangement of nil and $0.1 million for the years ended
December 31, 2023 and 2022, respectively.
On April 19, 2019, BGC Partners entered into a $10.0 million secured loan arrangement, under which it pledged
certain fixed assets as security for a loan. This arrangement incurred interest at a fixed rate of 3.89% and matured on April 19,
2023, at which point the loan was repaid in full; therefore, there were no borrowings as of December 31, 2024. BGC Partners
did not record any interest expense related to this secured loan arrangement for the year ended December 31, 2024. BGC
Partners recorded interest expense related to this secured loan arrangement of nil and $0.1 million for the years ended
December 31, 2023 and 2022, respectively.
181
Short-Term Borrowings
On August 22, 2017, BGC Partners entered into a committed unsecured loan agreement with Itau Unibanco S.A. The
agreement provided for short-term loans of up to $4.0 million (BRL 20.0 million). Borrowings under this agreement bore
interest at the Brazilian Interbank offering rate plus 3.20%. In 2021, this agreement was paid in full and BGC Partners entered
into a new committed unsecured loan agreement which provided for short-term loans of up to $1.6 million (BRL 10.0 million).
During June 2023, the borrowings under this agreement were repaid in full, and the loan was terminated. As of both
December 31, 2024 and 2023, there were no borrowings outstanding under the agreement. BGC Partners did not record any
interest expense related to the agreement during the year ended December 31, 2024. BGC Partners recorded interest expense
related to the agreement of $0.2 million and $0.3 million for the years ended December 31, 2023, and 2022, respectively.
On August 23, 2017, BGC Partners entered into a committed unsecured credit agreement with Itau Unibanco S.A. The
agreement provided for an intra-day overdraft credit line up to $8.1 million (BRL 50.0 million). On August 20, 2021, the
agreement was renegotiated, increasing the credit line to $9.7 million (BRL 60.0 million). On May 22, 2023 the agreement was
renegotiated, increasing the credit line to $11.3 million (BRL 70.0 million). This agreement is renewable every 90 days and the
next maturity date is February 17, 2025. The agreement bears a fee of 1.32% per year. As of December 31, 2024 and 2023,
there were no borrowings outstanding under this agreement. BGC Partners recorded bank fees related to the agreement of $0.2
million, $0.2 million, and $0.2 million for each of the years ended December 31, 2024, 2023 and 2022, respectively.
On January 25, 2021, BGC Partners entered into a committed unsecured loan agreement with Banco Daycoval S.A.,
which provided for short-term loans of up to $2.0 million (BRL 10.0 million) and was renegotiated on June 1, 2021. The
amended agreement provided for short-term loans of up to $4.0 million (BRL 20.0 million). During September 2022, the
borrowings under this agreement were repaid in full, and the loan was terminated on September 27, 2022. As of December 31,
2024 and 2023, there were no borrowings outstanding under the agreement. Borrowings under this agreement bore interest at
the Brazilian Interbank offering rate plus 3.66%. BGC Partners recorded interest expense related to the agreement of $0.2
million for the year ended December 31, 2022.
BGC Credit Agreement with Cantor
On March 12, 2024, the Company borrowed $275.0 million from Cantor under the BGC Credit Agreement. On April
1, 2024, the outstanding balance of $275.0 million was repaid in its entirety. There were no borrowings by the Company under
the BGC Credit Agreement as of December 31, 2024. The Company recorded $1.1 million of interest expense related to the
BGC Credit Agreement for the year ended December 31, 2024. The Company did not record any interest expense related to the
BGC Credit Agreement during the years ended December 31, 2023 and 2022. See Note 13—“Related Party Transactions” for
additional information related to these transactions.
18.
Compensation
The Compensation Committee may grant various equity-based awards, including RSUs, restricted stock, stock options,
LPUs (prior to the Corporate Conversion) and shares of BGC Class A common stock. Upon vesting of RSUs, issuance of
restricted stock, exercise of stock options and redemption/exchange of LPUs (prior to the Corporate Conversion), the Company
generally issues new shares of BGC Class A common stock.
On November 22, 2021, at the annual meeting of stockholders, the stockholders approved amendments to the BGC
Partners Equity Plan to increase from 400.0 million to 500.0 million the aggregate number of shares of BGC Class A common
stock that may be delivered or cash-settled pursuant to awards granted during the life of the BGC Partners Equity Plan.
In connection with the Corporate Conversion on July 1, 2023, BGC Group assumed and adopted the BGC Partners
Equity Plan, as amended and restated as the BGC Group Equity Plan. The BGC Group Equity Plan provides for a maximum of
600.0 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. As of December 31, 2024, the limit on the aggregate number of shares authorized to be
delivered allowed for the grant of future awards relating to 440.8 million shares.
In connection with the Corporate Conversion, on June 30, 2023, the Company issued 22.5 million RSUs for the
redemption of 16.9 million non-exchangeable LPUs and 5.6 million non-exchangeable FPUs in BGC Holdings, and issued
$49.2 million of RSU Tax Accounts for the redemption of 10.6 million non-exchangeable Preferred Units in BGC Holdings,
based on their fixed cash value. As a result of the Corporate Conversion, on July 1, 2023, the Company issued 38.6 million
restricted stock awards and 25.3 million RSUs for the redemption of 54.0 million non-exchangeable LPUs and 9.9 million non-
exchangeable Preferred Units in BGC Holdings, and granted $74.0 million of RSU Tax Accounts for the redemption of
16.3 million non-exchangeable Preferred Units in BGC Holdings, based on their fixed cash value.
182
The Company incurred compensation expense related to Class A common stock, LPUs (prior to the Corporate
Conversion) and RSUs held by BGC employees as follows (in thousands):
Year Ended December 31,
2024
2023
2022
Issuance of common stock and grants of exchangeability
$
184,667 $
171,646 $
147,480
Allocations of net income and dividend equivalents1
4,196
6,302
13,298
LPU amortization
—
40,878
73,734
RSU, RSU Tax Account, and restricted stock amortization
180,280
136,552
16,559
Equity-based compensation and allocations of net income to limited
partnership units and FPUs
$
369,143 $
355,378 $
251,071
_______________________________________
1
Prior to the Corporate Conversion, certain LPUs generally received quarterly allocations of net income, including the Preferred
Distribution, and were generally contingent upon services being provided by the unit holders. Subsequent to the Corporate
Conversion, this includes dividend equivalents on participating securities, the Preferred Return on certain RSU Tax Accounts, and
quarterly allocations of net income, including the Preferred Distribution to LPUs held by BGC employees in Newmark Holdings.
Limited Partnership Units
A summary of the activity associated with LPUs held by BGC employees is as follows (in thousands):
BGC
LPUs
Newmark
LPUs
Balance at December 31, 2021
112,115
11,051
Granted
27,968
—
Redeemed/exchanged units
(24,623)
(1,636)
Forfeited units
(5,112)
(64)
Balance at December 31, 2022
110,348
9,351
Granted
9,688
—
Redeemed/exchanged units
(119,812)
(572)
Forfeited units
(224)
—
Balance at December 31, 2023
—
8,779
Granted
—
—
Redeemed/exchanged units
—
(5,342)
Forfeited units
—
(501)
Balance at December 31, 2024
—
2,936
The LPUs table above includes both regular and Preferred Units. Preferred Units are not entitled to participate in
partnership distributions other than with respect to the Preferred Distribution (see Note 2—“Limited Partnership Interests in
BGC Holdings and Newmark Holdings” for further information on Preferred Units). Subsequent to the Corporate Conversion,
there are still BGC employees who hold limited partnership interests in Newmark Holdings. These limited partnership interests
represent interests that were held prior to the Newmark IPO and were distributed in connection with the Separation. Following
the Newmark IPO, employees of BGC and Newmark only received limited partnership interests in BGC Holdings (prior to the
Corporate Conversion) and Newmark Holdings, respectively. As a result of the Spin-Off, as the previous limited partnership
interests in BGC Holdings held by Newmark employees and the existing limited partnership interests in Newmark Holdings
held by BGC employees were/are exchanged/redeemed, the related capital was contributed to and from Cantor, respectively.
The compensation expenses under GAAP related to the limited partnership interests are based on the company where the
partner is employed. Therefore, compensation expenses related to the limited partnership interests of both BGC Holdings and
Newmark Holdings that are held by BGC employees are recognized by BGC. The BGC Holdings limited partnership interests
held by Newmark employees could have been included in the BGC share count and the Newmark Holdings limited partnership
interests held by BGC employees may be included in the Newmark share count, if applicable. There were no limited partnership
interests in BGC Holdings remaining upon the completion of the Corporate Conversion, and therefore, there was no
compensation expense related to limited partnership interest in BGC Holdings recognized by BGC subsequent to the Corporate
Conversion.
183
A summary of Newmark Holdings LPUs held by BGC employees is as follows (in thousands):
Newmark
LPUs
Regular Units
2,036
Preferred Units
900
Balance at December 31, 2024
2,936
Issuance of Common Stock and Grants of Exchangeability
Compensation expense related to the issuance of BGC or Newmark Class A common stock and grants of
exchangeability on BGC Holdings (prior to the Corporate Conversion) and Newmark Holdings LPUs held by BGC employees
is as follows (in thousands):
Year Ended December 31,
2024
2023
2022
Issuance of common stock and grants of exchangeability
$
184,667 $
171,646 $
147,480
Prior to the Corporate Conversion, BGC LPUs held by BGC employees had become exchangeable or were redeemed
for BGC Class A common stock on a one-for-one basis.
Newmark LPUs held by BGC employees may become exchangeable or redeemed for a number of shares of Newmark
Class A common stock equal to the number of limited partnership interests multiplied by the current Exchange Ratio. As of
December 31, 2024, the Exchange Ratio was 0.9279.
A summary of the LPUs redeemed in connection with the issuance of BGC Class A common stock or Newmark Class
A common stock (at the then-current Exchange Ratio) or granted exchangeability for BGC Class A common stock or Newmark
Class A common stock (at the then-current Exchange Ratio) held by BGC employees is as follows (in thousands):
Year Ended December 31,
2024
2023
2022
BGC Holdings LPUs
—
25,711
29,363
Newmark Holdings LPUs
4,919
301
596
Total
4,919
26,012
29,959
The compensation expense related to the issuance of common stock includes a redemption of 4.2 million Newmark
Holdings LPUs for which 3.3 million shares of Newmark Class A common stock were issued to a former BGC executive
officer, who is still employed by the Company. This resulted in a $54.4 million compensation expense for year ended
December 31, 2024.
As of December 31, 2024 and 2023, there were no BGC Holdings LPUs remaining as a result of the Corporate
Conversion. As of December 31, 2024 and 2023, the number of Newmark Holdings LPUs exchangeable into shares of
Newmark Class A common stock at the discretion of the unit holder held by BGC employees (at the then-current Exchange
Ratio) was 0.3 million and 0.2 million, respectively.
Subsequent to the Corporate Conversion, BGC may issue BGC Class A common stock and record compensation
expense for the grant date fair value of the shares issued. For the years ended December 31, 2024 and 2023, BGC issued
8.7 million and 2.2 million of net shares of BGC Class A common stock to BGC employees, and withheld shares of BGC Class
A common stock valued at $41.0 million and $3.9 million to pay taxes due at the time of issuance, respectively.
LPU Amortization
Compensation expense related to the amortization of LPUs held by BGC is as follows (in thousands):
Year Ended December 31,
2024
2023
2022
Stated vesting schedule
$
— $
40,848 $
74,561
Post-termination payout
—
30
(827)
LPU amortization
$
— $
40,878 $
73,734
184
Prior to the Corporate Conversion, there were certain LPUs that had a stated vesting schedule and did not receive
quarterly allocations of net income. These LPUs generally vested between two and five years from the date of grant. The fair
value was based on the market value of an equivalent share of BGC or Newmark Class A common stock (adjusted if
appropriate based upon the award’s eligibility to receive quarterly allocations of net income) on the grant date, and is
recognized as compensation expense, net of the effect of estimated forfeitures, ratably over the vesting period.
As of both December 31, 2024 and 2023, there were no outstanding LPUs held by BGC employees with a stated
vesting schedule that did not receive quarterly allocations of net income.
Compensation expense related to LPUs held by BGC employees with a post-termination pay-out amount, such as
REUs, and/or a stated vesting schedule was recognized over the stated service period. These LPUs generally vested between
two and five years from the date of grant. As of December 31, 2024, there were no outstanding BGC Holdings LPUs with a
post-termination payout, and there were 0.1 million outstanding Newmark Holdings LPUs with a post-termination payout held
by BGC employees with a notional value of approximately $0.5 million and an aggregate estimated fair value of $0.2 million.
As of December 31, 2023, there were no outstanding BGC Holdings LPUs with a post-termination payout, and there were 0.1
million outstanding Newmark Holdings LPUs with a post-termination payout held by BGC employees, with a notional value of
approximately $0.7 million and an aggregate estimated fair value of $0.3 million.
Restricted Stock Units
Compensation expense related to RSUs held by BGC employees is as follows (in thousands):
Year Ended December 31,
2024
2023
2022
RSU amortization
$
101,673 $
79,960 $
16,559
A summary of the activity associated with RSUs held by BGC employees and directors is as follows (RSUs and fair
value amount in thousands):
RSUs
Weighted-
Average Grant
Date Fair Value
Fair Value
Amount
Weighted-
Average
Remaining
Contractual
Term (Years)
Balance at December 31, 2021
11,034 $
3.87 $
42,756
2.27
Granted
7,125
4.27
30,406
Delivered
(4,858)
3.86
(18,743)
Forfeited
(1,255)
3.93
(4,933)
Balance at December 31, 2022
12,046 $
4.11 $
49,486
2.42
Granted
68,732
4.12
283,418
Delivered
(15,078)
4.14
(62,494)
Forfeited
(758)
4.48
(3,395)
Balance at December 31, 2023
64,942 $
4.11 $
267,015
5.96
Granted
22,533
7.82
176,141
Delivered
(13,142)
4.05
(53,185)
Forfeited
(1,835)
5.45
(9,997)
Balance at December 31, 2024
72,498 $
5.24 $
379,974
4.58
The fair value of RSUs held by BGC employees and directors is based on the market value of BGC Class A common
stock on the grant date and adjusted as appropriate based upon the award’s ineligibility to receive dividends. As of
December 31, 2024 and 2023, 22.9 million and 26.3 million RSUs of the total outstanding were eligible to receive dividends.
The compensation expense is recognized ratably over the vesting period, taking into effect estimated forfeitures or accelerations
of vestings. The Company uses historical data, including historical forfeitures and turnover rates, to estimate expected forfeiture
rates for both employee and director RSUs. Each RSU is settled in one share of Class A common stock upon completion of the
vesting period and conditions.
185
For the RSUs that vested during the years ended December 31, 2024 and 2023, the Company withheld shares of BGC
Class A common stock valued at $27.8 million and $11.5 million, respectively, to pay taxes due at the time of vesting. As of
December 31, 2024 and 2023, there was approximately $230.1 million and $161.0 million, respectively, of total unrecognized
compensation expense related to unvested RSUs held by BGC employees and directors that is expected to be recognized over a
weighted-average period of 4.58 years and 5.96 years, respectively.
In relation to the Corporate Conversion, the Company granted in total $123.1 million of RSU Tax Accounts. During
the years ended December 31, 2024 and 2023, $17.6 million and $27.7 million, respectively, of RSU Tax Accounts vested to
pay taxes due at the time for certain related RSU vestings. As of December 31, 2024 and 2023, there was approximately
$70.0 million and $92.7 million of total unrecognized compensation expense related to unvested RSU Tax Accounts held by
BGC employees that is expected to be recognized over a weighted-average period of 7.98 years and 8.82 years, respectively.
The compensation expense related to the RSU Tax Accounts amortization held by BGC employees was $21.6 million and
$31.9 million for the years ended December 31, 2024 and 2023, respectively.
Acquisitions
In connection with certain of its acquisitions, the Company has granted certain contingent share obligations and RSUs,
and other deferred compensation awards. As of December 31, 2024 and 2023, the aggregate estimated fair value of acquisition-
related contingent share obligations and RSUs was $14.7 million and $7.4 million, respectively. As of December 31, 2024 and
2023, the aggregate estimated fair value of the deferred compensation awards was nil and $0.6 million, respectively. The
liability for such acquisition-related contingent share obligations and RSUs is included in “Accounts payable, accrued and other
liabilities” on the Company’s Consolidated Statements of Financial Condition.
Restricted Stock
BGC employees hold shares of BGC and Newmark restricted stock. Such restricted shares are generally salable by
employees in five to ten years. Transferability of the restricted shares of stock issued prior to the Corporate Conversion, is not
subject to continued employment or service with the Company or any affiliate or subsidiary of the Company; however,
transferability is subject to compliance with BGC and its affiliates’ customary noncompete obligations.
During the years ended December 31, 2024 and 2023, approximately 0.3 million and 1.4 million, respectively, BGC or
Newmark restricted shares held by BGC employees were forfeited in connection with this provision.
During the years ended December 31, 2024 and 2023, the Company released the restrictions with respect to nil and 2.3
million, respectively, of such BGC shares held by BGC employees. As of December 31, 2024 and 2023, there were nil and 0.1
million, respectively, of such restricted BGC shares held by BGC employees outstanding, respectively. During the years ended
December 31, 2024 and 2023, Newmark released the restrictions with respect to nil and 1.0 million, respectively, of restricted
Newmark shares held by BGC employees. As of both December 31, 2024 and 2023, there were no restricted Newmark shares
held by BGC employees outstanding.
In addition, as a result of the Corporate Conversion, on July 1, 2023, the Company granted 38.6 million restricted
stock awards, 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 and adjusted as appropriate based upon the award’s ineligibility to receive dividends. As of
December 31, 2024, 0.6 million of the total 7.3 million restricted stock awards outstanding were eligible to receive dividends.
The compensation expense is recognized ratably over the vesting period, taking into effect estimated forfeitures or accelerations
of vestings. The Company uses historical data, including historical forfeitures and turnover rates, to estimate expected forfeiture
rates for employee restricted stock awards. Each restricted stock award is settled in one share of Class A common stock upon
completion of the vesting period and conditions. The compensation expense related to the restricted stock amortization on these
awards held by BGC employees was $57.0 million and $24.7 million for the years ended December 31, 2024 and 2023,
respectively. The compensation expense related to restricted stock includes the acceleration of approximately 4.5 million
restricted stock awards of a former BGC executive officer, who is still employed by the Company, which resulted in a
$27.1 million compensation expense for the year ended 2024.
For the restricted stock awards that vested during the years ended December 31, 2024 and 2023, the Company
withheld 4.6 million and 1.0 million shares of BGC Class A common stock to pay taxes due at the time of vesting, respectively.
As of December 31, 2024 and 2023, there was approximately $5.8 million and $49.9 million of total unrecognized
compensation expense related to unvested restricted stock awards held by BGC employees that is expected to be recognized
over a weighted-average period of 0.59 years and 2.55 years, respectively.
186
A summary of the activity associated with these restricted stock awards held by BGC employees is as follows (shares
of restricted stock and dollars in thousands):
Restricted Stock
Weighted-
Average
Grant
Date Fair
Value
Fair Value
Amount
Weighted-
Average
Remaining
Contractual
Term (Years)
Balance at December 31, 2022
— $
— $
—
N/A
Granted
38,610
4.37
168,716
Delivered
(9,329)
5.12
(47,763)
Forfeited
(1,328)
2.62
(3,485)
Balance at December 31, 2023
27,953 $
4.20 $
117,468
2.55
Granted
—
—
—
Delivered
(19,920)
3.99
(79,551)
Forfeited
(729)
3.84
(2,798)
Balance at December 31, 2024
7,304 $
4.81 $
35,119
0.59
19.
Commitments, Contingencies and Guarantees
Contractual Obligations and Commitments
The following table summarizes certain of the Company’s contractual obligations at December 31, 2024 (in
thousands):
Total
Less Than 1
Year
1-3 Years
3-5 Years
More Than 5
Years
Debt and collateralized borrowings1
$ 1,349,500 $
500,000 $
— $
849,500 $
—
Operating leases2
172,607
29,722
46,821
28,895
67,169
Finance leases2
3,437
1,520
1,917
—
—
Interest on debt and collateralized borrowings3
257,435
74,750
123,757
58,928
—
Interest on Short-term borrowings
55
55
—
—
—
One-time transition tax4
11,382
6,962
4,420
—
—
Other5
13,242
13,242
—
—
—
Total contractual obligations
$ 1,807,658 $
626,251 $
176,915 $
937,323 $
67,169
_______________________________________
1
Debt and collateralized borrowings reflects $200.0 million of borrowings by the Company, which includes deferred financing costs
of $4.2 million, outstanding under the Revolving Credit Agreement as of December 31, 2024; $288.2 million of BGC Group
4.375% Senior Notes (the $288.2 million represents the principal amount of the debt; the carrying value of the BGC Group 4.375%
Senior Notes as of December 31, 2024 was approximately $287.5 million); $347.2 million of BGC Group 8.000% Senior Notes (the
$347.2 million represents the principal amount of the debt; the carrying value of the BGC Group 8.000% Senior Notes as of
December 31, 2024 was approximately $344.6 million) and $500.0 million of BGC Group 6.600% Senior Notes (the $500.0 million
represents the principal amount of the debt; the carrying value of the BGC Group 6.600% Senior Notes as of December 31, 2024
was approximately $495.5 million). Debt and collateralized borrowings reflects $11.8 million of BGC Partners 4.375% Senior
Notes (the $11.8 million represents the principal amount of the debt; the carrying value of the BGC Partners 4.375% Senior Notes
as of December 31, 2024 was approximately $11.8 million) and $2.3 million of BGC Partners 8.000% Senior Notes (the $2.3
million represents the principal amount of the debt; the carrying value of the BGC Partners 8.000% Senior Notes as of
December 31, 2024 was approximately $2.3 million). See Note 17—“Notes Payable and Other Borrowings” for more information
regarding these obligations, including timing of payments and compliance with debt covenants.
2
Operating leases and finance leases are related to rental payments under various non-cancelable leases, principally for office space,
data centers and office equipment and are presented net of sublease payments to be received. As of December 31, 2024, there were
no sublease payments to be received over the life of the agreements.
187
3
Interest on debt and collateralized borrowings reflects a total of $3.2 million of interest expense associated with the
Company's borrowings under the Revolving Credit Agreement; $11.9 million of interest expense associated with the BGC
Group 4.375% Senior Notes, $0.5 million of interest expense associated with the BGC Partners 4.375% Senior Notes, $94.5
million of interest expense associated with the BGC Group 8.000% Senior Notes, $0.6 million of interest expense associated
with the BGC Partners 8.000% Senior Notes, and $146.7 million of interest expense associated with the BGC Group 6.600%
Senior Notes. Interest on debt and collateralized borrowings also includes interest on the undrawn portion of the committed
unsecured senior Revolving Credit Agreement which was calculated through the maturity date of the facility, which is April 26,
2027. As of December 31, 2024, the undrawn portion of the committed unsecured Revolving Credit Agreement was $500.0 million.
4
The Company completed the calculation of the one-time transition tax on the deemed repatriation of foreign subsidiaries’ earnings
pursuant to the Tax Act and previously recorded a net cumulative tax expense of $28.6 million, net of foreign tax credits. During the
second quarter of 2024, the Company settled its 2017 audit with the IRS which included the transition tax. The revised net
cumulative transition tax expense is $25.3 million, net of foreign tax credits, resulting in a net adjustment of the payable balance by
$3.3 million. The Company made an election to pay the taxes over eight years with 40% to be paid in equal installments over the
first five years and the remaining 60% to be paid in installments of 15%, 20% and 25% in years six, seven and eight, respectively.
The cumulative remaining balance as of December 31, 2024 is $11.4 million.
5
Other contractual obligations reflect commitments of $13.2 million to make charitable contributions, which are recorded as part of
“Accounts payable, accrued and other liabilities” in the Company’s Consolidated Statements of Financial Condition. The amount
payable each year reflects an estimate of future Charity Day obligations.
The Company is obligated for minimum rental payments under various non-cancelable operating leases, principally for
office space, expiring at various dates through 2039. Certain of the leases contain escalation clauses that require payment of
additional rent to the extent of increases in certain operating or other costs.
As of December 31, 2024, minimum lease payments under these arrangements are as follows (in thousands):
Net Lease Commitment
Operating leases
Finance leases
2025
$
29,722 $
1,520
2026
24,078
1,290
2027
22,743
627
2028
16,390
—
2029
12,505
—
2030 and thereafter
67,169
—
Total
$
172,607 $
3,437
The lease obligations shown above are presented net of payments to be received under a non-cancelable sublease.
There are no sublease payments to be received over the life of the agreement.
In addition to the above obligations under non-cancelable operating leases, the Company is also obligated to Cantor for
rental payments under Cantor’s various non-cancelable leases with third parties, principally for office space and computer
equipment, expiring at various dates through 2039. Certain of these leases have renewal terms at the Company’s option and/or
escalation clauses (primarily based on the Consumer Price Index). Cantor allocates a portion of the rental payments to the
Company based on square footage used.
The Company also allocates a portion of the rental payments for which it is obligated under non-cancelable operating
leases to Cantor and its affiliates. These allocations are based on square footage used (see Note 13—“Related Party
Transactions” for more information).
Rent expense for the years ended December 31, 2024, 2023 and 2022 was $38.7 million, 41.5 million and $40.2
million, respectively. Rent expense is included as part of “Occupancy and equipment” in the Company’s Consolidated
Statements of Operations.
In the event the Company anticipates incurring costs under any of its leases that exceed anticipated sublease revenues,
it recognizes a loss and records a liability for the present value of the excess lease obligations over the estimated sublease rental
income. There was no liability for future lease payments associated with vacant space as of December 31, 2024, 2023 and 2022.
188
Contingent Payments Related to Acquisitions
Since 2016, the Company has completed acquisitions whose purchase price included an aggregate of approximately
4.9 million shares of the Company’s Class A common stock (with an acquisition date fair value of approximately
$22.5 million), 0.1 million LPUs (with an acquisition date fair value of approximately $0.2 million), 0.2 million RSUs (with an
acquisition date fair value of approximately $1.2 million) and $68.0 million in cash that may be issued contingent on certain
targets being met through 2029.
The Company issued 1.6 million contingent shares of BGC Class A common stock and $5.0 million for acquisitions
during 2024. The Company issued 1.2 million contingent shares of BGC Class A common stock and $8.0 million for
acquisitions during 2023.
During the year ended December 31, 2024, the contingent cash consideration increased by approximately $0.2 million
to $15.3 million in cash that may be paid due to an increase in probability of payout. During the year ended December 31, 2023,
the contingent cash consideration increased by approximately $0.6 million to $15.1 million in cash that may be paid due to an
increase in probability of payout.
As of December 31, 2024, the Company has issued 2.0 million shares of its Class A common stock, 0.2 million RSUs
and paid $54.4 million in cash related to contingent payments for acquisitions completed since 2016.
As of December 31, 2024, 2.6 million shares of the Company’s Class A common stock remain to be issued, and
$7.1 million in cash remains to be paid, net of forfeitures and other adjustments, if the targets are met.
The Company’s contingent considerations are classified as Level 3 liabilities. See Note 12—“Fair Value of Financial
Assets and Liabilities” for additional information.
Contingencies
In the ordinary course of business, various legal actions are brought and are pending against the Company and its
subsidiaries in the U.S. and internationally. In some of these actions, substantial amounts are claimed. The Company is also
involved, from time to time, in reviews, examinations, investigations and proceedings by governmental and self-regulatory
agencies (both formal and informal) regarding the Company’s businesses, operations, reporting or other matters, which may
result in regulatory, civil and criminal judgments, settlements, fines, penalties, injunctions, enhanced oversight, remediation, or
other relief. The following generally does not include matters that the Company has pending against other parties which, if
successful, would result in awards in favor of the Company or its subsidiaries.
Employment, Competitor-Related and Other Litigation
From time to time, the Company and its subsidiaries are involved in litigation, claims and arbitrations in the U.S. and
internationally, relating to, inter alia, various employment matters, including with respect to termination of employment, hiring
of employees currently or previously employed by competitors, terms and conditions of employment and other matters. In light
of the competitive nature of the brokerage industry, litigation, claims and arbitration between competitors regarding employee
hiring are not uncommon. The Company is also involved, from time to time, in other reviews, investigations and proceedings
by governmental and self-regulatory agencies (both formal and informal) regarding the Company’s businesses. Any such
actions may result in regulatory, civil or criminal judgments, settlements, fines, penalties, injunctions, enhanced oversight,
remediation, or other relief.
Legal reserves are established in accordance with U.S. GAAP guidance on Accounting for Contingencies when a
material legal liability is both probable and reasonably estimable. Once established, reserves are adjusted when there is more
information available or when an event occurs requiring a change. The outcome of such items cannot be determined with
certainty. The Company is unable to estimate a possible loss or range of loss in connection with specific matters beyond its
current accruals and any other amounts disclosed. Management believes that, based on currently available information, the final
outcome of these current pending matters will not have a material adverse effect on the Company’s financial condition, results
of operations, or cash flows.
Letter of Credit Agreements
The Company has irrevocable uncollateralized letters of credit with various banks, where the beneficiaries are clearing
organizations through which it transacts, that are used in lieu of margin and deposits with those clearing organizations. As of
December 31, 2024 and 2023, the Company was contingently liable for $1.3 million and $1.4 million, respectively, under these
letters of credit.
189
Risk and Uncertainties
The Company generates revenues by providing financial intermediary and brokerage activities to institutional
customers and by executing and, in some cases, clearing transactions for institutional counterparties. Revenues for these
services are transaction-based. As a result, revenues could vary based on the transaction volume of global financial markets.
Additionally, financing is sensitive to interest rate fluctuations, which could have an impact on the Company’s overall
profitability.
Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a
financial institution which, at times, may exceed the FDIC maximum coverage limit of $250,000. Any loss incurred or a lack of
access to such funds could have a significant adverse impact on the Company’s Consolidated Financial Statements. For the
years ended December 31, 2024 and 2023, the Company did not incur losses on any FDIC insured cash accounts.
During the years ended December 31, 2024 and 2023, the Company reserved $4.0 million and $9.0 million,
respectively, in connection with potential losses associated with Russia’s Invasion of Ukraine, which is included in “Other
expenses” in the Company’s Consolidated Statements of Operations, and which was recorded as part of the CECL reserve (see
Note 25—“Current Expected Credit Losses (CECL)” for additional information).
Insurance
The Company is self-insured for health care claims, up to a stop-loss amount for eligible participating employees and
qualified dependents in the U.S., subject to deductibles and limitations. The Company’s liability for claims incurred but not
reported is determined based on an estimate of the ultimate aggregate liability for claims incurred. The estimate is calculated
from actual claim rates and adjusted periodically as necessary. The Company has accrued $2.8 million and $3.7 million in
health care claims as of December 31, 2024 and 2023, respectively. The Company does not expect health care claims to have a
material impact on its financial condition, results of operations, or cash flows.
Guarantees
The Company provides guarantees to securities clearinghouses and exchanges which meet the definition of a guarantee
under FASB interpretations. Under these standard securities clearinghouse and exchange membership agreements, members are
required to guarantee, collectively, the performance of other members and, accordingly, if another member becomes unable to
satisfy its obligations to the clearinghouse or exchange, all other members would be required to meet the shortfall. In the
opinion of management, the Company’s liability under these agreements is not quantifiable and could exceed the cash and
securities it has posted as collateral. However, the potential of being required to make payments under these arrangements is
remote. Accordingly, no contingent liability has been recorded in the Company’s Consolidated Statements of Financial
Condition for these agreements.
20.
Income Taxes
The Company’s Consolidated Financial Statements include U.S. federal, state and local income taxes on the
Company’s allocable share of the U.S. results of operations, as well as taxes payable to jurisdictions outside the U.S. In
addition, certain of the Company’s entities are taxed as U.S. partnerships and are primarily subject to the UBT in New York
City. Therefore, the tax liability or benefit related to the partnership income or loss, except for UBT, rests with the partners
rather than the partnership entity (see Note 2—“Limited Partnership Interests in BGC Holdings and Newmark Holdings” for
discussion of partnership interests).
190
The provision for income taxes consisted of the following (in thousands):
Year Ended December 31,
2024
2023
2022
Current:
U.S. federal
$
19,459 $
19,297 $
12,949
U.S. state and local
5,061
5,033
6,147
Foreign
95,149
54,787
34,506
UBT
—
373
(390)
119,669
79,490
53,212
Deferred:
U.S. federal
(58,127)
(41,491)
(17,083)
U.S. state and local
(9,568)
(14,989)
(1,596)
Foreign
(2,059)
(5,914)
3,971
UBT
—
1,838
80
(69,754)
(60,556)
(14,628)
Provision for income taxes
$
49,915 $
18,934 $
38,584
The Company had pre-tax income (loss) of $173.1 million, $57.7 million and $97.5 million for the years ended
December 31, 2024, 2023 and 2022, respectively.
The Company had pre-tax income (loss) from domestic operations of $(143.2) million, $(383.9) million and $(286.8)
million for the years ended December 31, 2024, 2023 and 2022, respectively. The Company had pre-tax income (loss) from
foreign operations of $316.3 million, $441.6 million and $384.3 million for the years ended December 31, 2024, 2023 and
2022, respectively.
Differences between the Company’s actual income tax expense and the amount calculated utilizing the U.S. federal
statutory rates were as follows (in thousands):
Year Ended December 31,
2024
2023
2022
Tax expense at federal statutory rate
$
36,360 $
12,207 $
20,584
Non-controlling interest
1,295
1,982
2,366
Incremental impact of foreign taxes compared to federal tax rate
5,847
3,838
8,122
Other permanent differences
(2,153)
3,054
(10,105)
U.S. state and local taxes, net of U.S. federal benefit
(4,408)
(4,778)
(876)
New York City UBT
—
—
(1,071)
Other rate changes
1,503
(862)
153
Impact of Corporate Conversion
—
(12,446)
—
Uncertain tax positions
304
(797)
3,496
U.S. tax on foreign earnings, net of tax credits
(4,413)
12,388
4,808
Prior year adjustments
5,811
4,078
4,189
Valuation allowance
(2,402)
(4,190)
(4,670)
Meals and Entertainment
7,450
6,182
12,681
Impact of RSU Windfall
(4,433)
(1,700)
(289)
AFS MTM — U.S. GAAP Adjustment1
9,154
—
—
Other
—
(22)
(804)
Provision for income taxes
$
49,915 $
18,934 $
38,584
_______________________________________
1
Available for sale securities mark-to-market — U.S. GAAP Adjustment
191
As of December 31, 2024, the Company’s intention is to permanently reinvest undistributed foreign pre-tax earnings in
the Company’s foreign operations. While the one-time transition tax eliminated most of the income tax effects of repatriating
the undistributed earnings, there could still be foreign and state and local tax effects on the distribution. Accordingly, no
provision has been recorded on foreign and state and local taxes that would be applicable upon distribution of such earnings to
the U.S. Further, determination of an estimate of deferred tax liability associated with the distribution of foreign earnings is not
practicable.
The Company has elected to treat taxes associated with the GILTI provision using the Period Cost Method and thus
has not recorded deferred taxes for basis differences under this regime as of December 31, 2024.
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the
consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded against deferred
tax assets if it is deemed more likely than not that those assets will not be realized.
Significant components of the Company’s deferred tax asset and liability consisted of the following (in thousands):
Year Ended December 31,
2024
2023
Deferred tax asset
Basis difference of investments
$
10,403 $
23,522
Deferred compensation
114,680
90,270
Excess interest expense
90,404
55,040
Other deferred and accrued expenses
10,659
17,625
Depreciation and amortization
790
—
Net operating loss and credit carry-forwards
58,084
43,426
Total deferred tax asset1
285,020
229,883
Valuation allowance
(24,422)
(27,813)
Deferred tax asset, net of valuation allowance
260,598
202,070
Deferred tax liability
Depreciation and amortization
—
10,618
Total deferred tax liability1
—
10,618
Net deferred tax asset
$
260,598 $
191,452
_______________________________________
1
Before netting within tax jurisdictions.
The Company has deferred tax assets associated with net operating losses in U.S. federal, state and local, and non-U.S.
jurisdictions of $2.5 million, $5.4 million and $28.4 million, respectively. These losses will begin to expire for state and local
and non-U.S. jurisdictions in 2036 and 2025, respectively. The Company has deferred tax assets associated with tax credits in
the U.S. of $33.7 million, which will begin to expire in 2030. Management continuously assesses the available positive and
negative evidence to determine whether existing deferred tax assets will be realized. Accordingly, substantially all of the total
valuation allowance of $24.4 million relates to non-US net operating losses and other deferred tax assets for the year ended
December 31, 2024. The Company’s net deferred tax asset and liability are included in the Company’s Consolidated Statements
of Financial Condition as components of “Other assets” and “Accounts payable, accrued and other liabilities,” respectively.
Pursuant to U.S. GAAP guidance, Accounting for Uncertainty in Income Taxes, the Company provides for uncertain
tax positions as a component of income tax expense based upon management’s assessment of whether a tax benefit is more
likely than not to be sustained upon examination by tax authorities.
192
A reconciliation of the beginning to the ending amounts of gross unrecognized tax benefits for the years ended
December 31, 2024 and 2023 is as follows (in thousands):
Balance, December 31, 2022
$
7,553
Increases for prior year tax positions
—
Decreases for prior year tax positions
(884)
Increases for current year tax positions
—
Decreases related to settlements with taxing authorities
—
Decreases related to a lapse of applicable statute of limitations
—
Balance, December 31, 2023
$
6,669
Increases for prior year tax positions
—
Decreases for prior year tax positions
—
Increases for current year tax positions
—
Decreases related to settlements with taxing authorities
—
Decreases related to a lapse of applicable statute of limitations
(2,025)
Balance, December 31, 2024
$
4,644
As of December 31, 2024, the Company’s unrecognized tax benefits, excluding related interest and penalties, were
$4.6 million, of which $3.7 million, if recognized, would affect the effective tax rate. The Company is currently under income
tax examination by tax authorities in U.S. federal, state and local jurisdictions and certain non-U.S. jurisdictions for tax years
beginning 2021, 2011 and 2017, respectively. The Company does not believe that the amounts of unrecognized tax benefits will
materially change over the next 12 months.
The Company recognizes interest and penalties related to unrecognized tax benefits in “Provision (benefit) for income
taxes” in the Company’s Consolidated Statements of Operations. As of December 31, 2024, the Company had accrued $4.3
million for income tax-related interest and penalties of which $0.9 million was accrued during 2024.
21.
Regulatory Requirements
Many of the Company’s businesses are subject to regulatory restrictions and minimum capital requirements. These
regulatory restrictions and capital requirements may restrict the Company’s ability to withdraw capital from its subsidiaries.
Certain U.S. subsidiaries of the Company are registered as U.S. broker-dealers or FCMs subject to Rule 15c3-1 of the
SEC and Rule 1.17 of the CFTC, which specify uniform minimum net capital requirements, as defined, for their registrants, and
also require a significant part of the registrants’ assets be kept in relatively liquid form. As of December 31, 2024, the
Company’s U.S. subsidiaries had net capital in excess of their minimum capital requirements.
Certain U.K. and European subsidiaries of the Company are regulated by their national regulators, which include the
FCA and L’Autorité des Marchés Financiers and must maintain financial resources (as defined by their national regulators) in
excess of the total financial requirement (as defined by their national regulators). As of December 31, 2024, the U.K. and
European subsidiaries had financial resources in excess of their requirements.
Certain other subsidiaries of the Company are subject to regulatory and other requirements of the jurisdictions in
which they operate.
Certain BGC subsidiaries also operate as DCMs and DCOs which are required to maintain financial resources to cover
operating costs for at least one year, keeping at least enough cash or highly liquid securities to cover six months’ operating
costs. In addition, BGC subsidiaries operate as SEFs which are required to maintain financial resources to cover operating costs
for at least one year, keeping at least enough cash or highly liquid securities to cover the greater of three months of projected
operating costs, or the projected costs needed to wind down the swap execution facility’s operations.
The regulatory requirements referred to above may restrict the Company’s ability to withdraw capital from its
regulated subsidiaries. As of December 31, 2024, the Company’s regulated subsidiaries held $751.0 million of net capital.
These subsidiaries had aggregate regulatory net capital, as defined, in excess of the aggregate regulatory requirements, as
defined, of $432.3 million.
193
22.
Segment and Geographic Information
Segment Information
The Company currently operates in one reportable segment, brokerage services, which is managed on a consolidated
basis. The Company provides brokerage services to the financial markets, through integrated Voice, Hybrid and Fully
Electronic brokerage in a broad range of products, including fixed income (Rates and Credit), FX, Equities, ECS, and Futures
and Options. BGC also delivers a wide range of services, including trade execution, brokerage, clearing, post-trade,
information, consulting, and other back-office services to a broad range of financial and non-financial institutions.
As of December 31, 2024, the Company has identified the Chairman of the Board and Chief Executive Officer as the
Chief Operating Decision Maker (“CODM”). Consolidated net income (loss) is the measure of segment profit (loss) most
consistent with U.S. GAAP that is regularly reviewed by the CODM. The Company’s business is based on the products and
services provided and reflects the manner in which financial information is evaluated by the CODM.
Significant expense categories included in Consolidated net income (loss) that are regularly provided to the CODM
include Compensation and employee benefits expense and Equity-based compensation and allocations of net income to limited
partnership units and FPUs expense. Refer to the Company’s Consolidated Statements of Operations for additional information.
Information regarding revenues from external customers, other revenues, significant segment expenses, other segment
items and Consolidated net income (loss) is as follows:
Year Ended December 31,
2024
2023
2022
Revenues:
Rates
$
686,342 $
610,451 $
549,503
ECS
483,232
386,206
291,665
FX
355,833
314,706
299,721
Credit
287,812
284,744
271,419
Equities
225,027
236,517
234,493
Total brokerage revenues
2,038,246
1,832,624
1,646,801
Fees from related parties
20,728
15,968
14,734
Data, software and post-trade
126,963
111,470
96,389
Interest and dividend income1
56,223
45,422
21,007
Other revenues
20,658
19,917
16,371
Total other revenues
224,572
192,777
148,501
Total revenues
2,262,818
2,025,401
1,795,302
Expenses:
Compensation and employee benefits
1,123,747
992,603
853,165
Equity-based compensation and allocations of net income to limited
partnership units and FPUs
369,143
355,378
251,071
Total compensation and employee benefits
1,492,890
1,347,981
1,104,236
Other segment items2
646,700
638,645
632,199
Consolidated net income (loss)
$
123,228 $
38,775 $
58,867
_______________________________________
1
For the years ended December 31, 2024, 2023, and 2022, Interest income was $49.5 million, $40.2 million and $15.5 million,
respectively.
2
Other segment items include Occupancy and equipment expense, Fees to related parties expense, Professional and consulting fees
expense, Communications expense, Selling and promotion expense, Commissions and floor brokerage expense, Interest expense,
Other expenses, Gains (losses) on divestitures and sales of investments, Gains (losses) on equity method investments, Other income
(loss), and Provision (benefit) for income taxes, each of which are presented on the Company’s Consolidated Statements of
Operations. Also included in Other segment items is Fixed asset depreciation and intangible asset amortization. For the years ended
December 31, 2024, 2023, and 2022, Fixed asset depreciation and intangible asset amortization was $81.4 million, $80.4 million
and $75.1 million, respectively.
194
Refer to the Company’s Consolidated Statements of Financial Condition for the segment’s total assets. Refer to Note
14—“Investments” for the Company’s investment in equity method investees. Total expenditures for additions to long-lived
assets are reported on the Company’s Consolidated Statements of Cash Flows.
Geographic Information
The Company offers products and services in EMEA, the Americas and APAC. Revenues and long-lived assets are
attributed to geographic areas based on the location of the particular subsidiary. Information regarding revenues is as follows
(in thousands):
Year Ended December 31,
2024
2023
2022
Revenues:
EMEA1
$
1,146,602 $
1,022,988 $
912,941
Americas2
820,608
727,204
610,683
APAC
295,608
275,209
271,678
Total revenues
$
2,262,818 $
2,025,401 $
1,795,302
_______________________________________
1
For the years ended December 31, 2024, 2023, and 2022, the U.K. accounted for 10% or more of total revenues. U.K. revenues for
the years ended December 31, 2024, 2023, and 2022 were $780.2 million, $730.8 million, and $647.9 million, respectively.
2
For the years ended December 31, 2024, 2023, and 2022, the U.S. accounted for 10% or more of total revenues. U.S. revenues for
the years ended December 31, 2024, 2023, and 2022 were $752.6 million, $652.9 million, and $542.7 million, respectively.
Information regarding long-lived assets (defined as loans, forgivable loans and other receivables from employees and
partners, net; fixed assets, net; ROU assets; certain other investments; rent and other deposits; excluding goodwill and other
intangible assets, net) in the applicable geographic area is as follows (in thousands):
December 31,
2024
December 31,
2023
Long-lived assets:
EMEA1
$
346,198 $
385,210
Americas2
261,297
225,950
APAC
81,276
75,496
Total long-lived assets
$
688,771 $
686,656
_______________________________________
1
As of December 31, 2024 and 2023, the U.K. accounted for 10% or more of total long-lived assets. U.K. long-lived assets as of
December 31, 2024 and 2023 were $251.9 million and $306.1 million, respectively.
2
As of December 31, 2024 and 2023, the U.S. accounted for 10% or more of total long-lived assets. U.S. long-lived assets as of
December 31, 2024 and 2023 were $255.5 million and $220.1 million, respectively.
195
23.
Revenues from Contracts with Customers
The following table presents the Company’s total revenues separated between revenues from contracts with customers
and other sources of revenues (in thousands):
Year Ended December 31,
2024
2023
2022
Revenues from contracts with customers:
Commissions
$
1,648,817 $
1,464,524 $
1,281,294
Data, network and post-trade
126,963
111,470
96,389
Fees from related parties
20,728
15,968
14,734
Other revenues
16,104
15,417
14,275
Total revenues from contracts with customers
1,812,612
1,607,379
1,406,692
Other sources of revenues:
Principal transactions
389,429
368,100
365,507
Interest and dividend income
56,223
45,422
21,007
Other revenues
4,554
4,500
2,096
Total revenues
$
2,262,818 $
2,025,401 $
1,795,302
See Note 3—“Summary of Significant Accounting Policies” for detailed information on the recognition of the
Company’s revenues from contracts with customers.
Disaggregation of Revenue
See Note 22—“Segment and Geographic Information” for a further discussion on the allocation of revenues to
geographic regions.
Contract Balances
The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. The
Company records a receivable when revenue is recognized prior to payment and the Company has an unconditional right to
payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue
until the performance obligations are satisfied.
The Company had receivables related to revenues from contracts with customers of $324.2 million and $314.8 million
at December 31, 2024 and December 31, 2023, respectively. The Company had no impairments related to these receivables
during the years ended December 31, 2024 and 2023.
The Company’s deferred revenue primarily relates to customers paying in advance or billed in advance where the
performance obligation has not yet been satisfied. Deferred revenue at December 31, 2024 and 2023 was $20.0 million and
$14.7 million, respectively. During the years ended December 31, 2024 and 2023, the Company recognized revenue of $12.9
million and $11.0 million, respectively, that was recorded as deferred revenue at the beginning of the period.
Contract Costs
The Company capitalizes costs to fulfill contracts associated with different lines of its business where the revenue is
recognized at a point in time and the costs are determined to be recoverable. Capitalized costs to fulfill a contract are recognized
at the point in time that the related revenue is recognized. The Company did not have any capitalized costs to fulfill a contract
as of December 31, 2024 and 2023.
196
24.
Leases
The Company, acting as a lessee, has operating leases and finance leases primarily relating to office space, data centers
and office equipment. The leases have remaining lease terms of 0.3 years to 14.6 years, some of which include options to
extend the leases in 0.1 to 10 year increments for up to 15 years. Renewal periods are included in the lease term only when
renewal is reasonably certain, which is a high threshold and requires management to apply judgment to determine the
appropriate lease term. Certain leases also include periods covered by an option to terminate the lease if the Company is
reasonably certain not to exercise the termination option. The Company measures its lease payments by including fixed rental
payments and, where relevant, variable rental payments tied to an index, such as the Consumer Price Index. Payments for leases
in place before the date of adoption of ASC 842, Leases were determined based on previous leases guidance. The Company
recognizes lease expense for its operating leases on a straight-line basis over the lease term and variable lease expense not
included in the lease payment measurement is recognized as incurred. Interest expense on finance leases is recognized using the
effective interest method over the lease term.
Pursuant to the accounting policy election, leases with an initial term of twelve months or less are not recognized on
the balance sheet. The short-term lease expense over the period reasonably reflects the Company’s short-term lease
commitments.
ASC 842 requires the Company to make certain assumptions and judgments in applying the guidance, including
determining whether an arrangement includes a lease, determining the term of a lease when the contract has renewal or
cancellation provisions, and determining the discount rate.
The Company determines whether an arrangement is a lease or includes a lease at the contract inception by evaluating
whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. If the Company has the right to obtain substantially all of the economic benefits from, and can direct the use of,
the identified asset for a period of time, the Company accounts for the identified asset as a lease. The Company has elected the
practical expedient to not separate lease and non-lease components for all leases other than real estate leases. The primary non-
lease component that is combined with a lease component represents operating expenses, such as utilities, maintenance or
management fees.
As the rate implicit in the lease is not usually available, the Company used an incremental borrowing rate based on the
information available at the adoption of ASC 842 in determining the present value of lease payments for existing leases. The
Company has elected to use a portfolio approach for the incremental borrowing rate, applying corporate bond rates to the
leases. The Company calculated the appropriate rates with reference to the lease term and lease currency. The Company uses
information available at the lease commencement date to determine the incremental borrowing rate for any new leases.
The Company subleases certain real estate to its affiliates and to third parties. The value of these commitments is not
material to the Company’s Consolidated Financial Statements.
As of December 31, 2024, the Company did not have any leases that have not yet commenced but that create
significant rights and obligations.
After evaluating the Company’s leases, the Company determined that the carrying value of a certain asset was no
longer recoverable and in fact was impaired. The fair value of the asset was based on expected future cash flows under ASC
842, and approximately $1.4 million of impairment charges were booked for the year ended December 31, 2024. Impairment
charges are included in Occupancy and equipment in the Company’s Consolidated Statements of Operations.
Supplemental information related to the Company’s operating and financing leases is as follows (in thousands):
Classification in Consolidated Statements
of Financial Condition
December 31, 2024
December 31, 2023
Assets
Operating lease ROU assets
Other assets
$
114,456 $
124,165
Finance lease ROU assets
Fixed assets, net
$
2,959 $
4,264
Liabilities
Operating lease liabilities
Accounts payable, accrued and other liabilities
$
135,825 $
149,640
Finance lease liabilities
Accounts payable, accrued and other liabilities
$
3,249 $
4,721
197
December 31, 2024
December 31, 2023
Weighted-average remaining lease term
Operating leases (years)
6.8
7.3
Finance leases (years)
2.4
3.4
Weighted-average discount rate
Operating leases
5.5 %
5.0 %
Finance leases
4.4 %
4.3 %
The components of lease expense are as follows (in thousands):
Year Ended December 31,
Classification in Consolidated Statements
of Operations
2024
2023
2022
Operating lease cost1
Occupancy and equipment
$
33,884 $
35,894 $ 36,894
Finance lease cost
Amortization on ROU assets
Occupancy and equipment
$
1,305 $
1,305 $
753
Interest on lease liabilities
Interest expense
$
168 $
219 $
116
____________________________________
1
Short-term lease expense was not material for the years ended December 31, 2024, 2023 and 2022.
The following table shows the Company’s maturity analysis of its lease liabilities as of December 31, 2024 (in
thousands):
December 31, 2024
Operating leases
Finance leases
2025
$
29,722 $
1,520
2026
24,078
1,290
2027
22,743
627
2028
16,390
—
2029
12,505
—
2030 and thereafter
67,169
—
Total
$
172,607 $
3,437
Interest
(36,782)
(188)
Total
$
135,825 $
3,249
The following table shows cash flow information related to lease liabilities (in thousands):
Year Ended December 31,
Cash paid for amounts included in the measurement of lease liabilities
2024
2023
Operating cash flows from operating lease liabilities
$
36,420 $
37,008
Operating cash flows from finance lease liabilities
$
168 $
219
Financing cash flows from finance lease liabilities
$
1,280 $
1,228
198
25.
Current Expected Credit Losses (CECL)
The allowance for credit losses reflects management’s current estimate of potential credit losses related to the
receivable balances included in the Company’s Consolidated Statements of Financial Condition. See Note 3—“Summary of
Significant Accounting Policies” for further discussion of the CECL reserve methodology.
As required, any subsequent changes to the allowance for credit losses are recognized in “Other expenses” in the Company’s
Consolidated Statements of Operations. During the years ended December 31, 2024, 2023 and 2022, the Company recorded
changes in the allowance for credit losses as follows (in millions):
Accrued
commissions
and other
receivables, net
Loans, forgivable
loans and other
receivables from
employees and
partners, net
Receivables from
broker-dealers,
clearing
organizations,
customers and
related broker-
dealers
Total
Beginning Balance, January 1, 2022
$
0.7 $
1.7 $
— $
2.4
Current-period provision for expected credit losses
4.7
0.8
7.0
12.5
Ending Balance, December 31, 2022
5.4
2.5
7.0
14.9
Current-period provision for expected credit losses
(0.4)
(0.2)
11.9
11.3
Ending Balance, December 31, 2023
5.0
2.3
18.9
26.2
Current-period provision for expected credit losses
1.2
—
2.1
3.3
Release of allowance for expected credit losses
—
(2.3)
—
(2.3)
Ending Balance, December 31, 2024
$
6.2 $
— $
21.0 $
27.2
For the year ended December 31, 2024, there was an increase of $1.2 million in the allowance for credit losses against
“Accrued commissions and other receivables, net” due to the updated macroeconomic assumptions, bringing the allowance for
credit losses recorded pertaining to “Accrued commissions and other receivables, net” to $6.2 million as of December 31, 2024.
For the year ended December 31, 2023, there was a decrease of $0.4 million in the allowance for credit losses against “Accrued
commissions and other receivables, net.” For the year ended December 31, 2022, there was an increase of $4.7 million in the
allowance for credit losses against “Accrued commissions and other receivables, net.”
For the year ended December 31, 2024, there was a decrease of $2.3 million in the allowance for credit losses
pertaining to “Loans, forgivable loans and other receivables from employees and partners, net” as a result of the release of
allowance for expected credit losses. For the year ended December 31, 2023 there was a decrease of $0.2 million in the CECL
reserve pertaining to “Loans, forgivable loans and other receivables from employees and partners, net” as a result of employee
collections. For the year ended December 31, 2022, there was an increase of $0.8 million, in the allowance for credit losses
against “Loans, forgivable loans and other receivables from employees and partners, net.”
For the year ended December 31, 2024, there was an increase of $2.1 million in the allowance for credit losses against
“Receivables from broker-dealers, clearing organizations, customers and related broker-dealers” which reflected the downward
credit rating migration of certain unsettled trades related to Russia’s Invasion of Ukraine, bringing the allowance for credit
losses recorded pertaining to “Receivables from broker-dealers, clearing organizations, customers and related broker-dealers” to
$21.0 million as of December 31, 2024. For the years ended December 31, 2023 and 2022, there were increases of $11.9
million and $7.0 million, respectively, in the CECL reserve against “Receivables from broker-dealers, clearing organizations,
customers and related broker-dealers” which reflected the downward credit rating migration of certain unsettled trades related
to Russia’s Invasion of Ukraine.
199
26.
Supplemental Balance Sheet Information
The components of certain balance sheet accounts are as follows (in thousands):
Year Ended December 31,
2024
2023
Other assets:
Deferred tax asset
$
273,299 $
215,537
Operating lease ROU assets
114,456
124,165
Equity securities carried under measurement alternative
135,835
85,561
Other taxes
36,218
20,969
Prepaid expenses
20,186
17,003
Rent and other deposits
12,299
13,395
Other
12,639
20,025
Total other assets
$
604,932 $
496,655
Year Ended December 31,
2024
2023
Accounts payable, accrued and other liabilities:
Taxes payable
$
351,154 $
293,525
Accrued expenses and other liabilities
176,811
182,388
Lease liabilities
139,074
154,361
Deferred tax liability
12,701
25,171
Charitable contribution liability
13,242
12,744
Total accounts payable, accrued and other liabilities
$
692,982 $
668,189
27.
Subsequent Events
Fourth Quarter 2024 Dividend
On February 14, 2025, the Company’s Board declared a quarterly cash dividend of $0.02 per share for the fourth
quarter of 2024, payable on March 20, 2024 to BGC Class A and Class B common stockholders of record as of March 6, 2024.
Recent Board of Directors and Executive Officers Changes
On February 18, 2025, Howard W. Lutnick was confirmed by the United States Senate as the 41st Secretary of
Commerce. Following his confirmation, on February 18, 2025, Mr. Howard Lutnick stepped down as Chairman of the Board
and Chief Executive Officer of the Company. On February 18, 2025, the Company appointed Brandon Lutnick, son of Mr.
Howard Lutnick, to serve as a member of the Board. Additionally, on February 18, 2025 the Company appointed Mr. Merkel to
serve as a member of the Board and as Chairman of the Board. On February 18, 2025, the Company appointed John A.
Abularrage, JP Aubin, and Sean A. Windeatt as Co-Chief Executive Officers of the Company and as the Principal Executive
Officers of the Company. Mr. Howard Lutnick has agreed to divest his interests in BGC to comply with U.S. government ethics
rules, which is expected to occur within 90 days following his confirmation, and does not expect any arrangement which
involves selling shares on the open market.
Transactions with Executive Officers and Directors
On February 5, 2025, the Company accelerated the vesting of 1,304,864 of Howard Lutnick’s RSUs granted under the
BGC Group Equity Plan, which each represented a contingent right to receive one share of Class A Common Stock, delivered
less 721,590 shares withheld by the Company for taxes at $9.38 per share, in the amount of 583,274 net shares. The
acceleration of the vesting of the RSUs and the withholding of shares for taxes was approved by the Compensation Committee
of the Company.
200
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A.
CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
BGC Group maintains disclosure controls and procedures that are designed to ensure that information required to be
disclosed by BGC Group is recorded, processed, accumulated, summarized and communicated to its management, including its
Co-Chief Executive Officers and its Chief Financial Officer, to allow timely decisions regarding required disclosures, and
reported within the time periods specified in the SEC’s rules and forms. The Co-Chief Executive Officers and the Chief
Financial Officer have performed an evaluation of the effectiveness of the design and operation of BGC Group’s disclosure
controls and procedures as of December 31, 2024. Based on that evaluation, the Co-Chief Executive Officers and the Chief
Financial Officer concluded that BGC Group’s disclosure controls and procedures were effective as of December 31, 2024.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as
such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our
management, including our Co-Chief Executive Officers and our Chief Financial Officer, we conducted an evaluation of the
effectiveness of our internal controls over financial reporting as of December 31, 2024 based upon criteria set forth in the
Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(2013 framework) (COSO). Our internal controls over financial reporting include policies and procedures that are intended to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external reporting purposes in accordance with U.S. GAAP.
Based on the results of our 2024 evaluation, our management concluded that our internal controls over financial
reporting were effective as of December 31, 2024.
Management has excluded BGC Group’s acquisition of Sage as the acquisition was completed in fiscal year 2024, and
did not have a material effect on our financial condition, results of operations or cash flows in 2024. However, we do anticipate
that the acquisition will be included in management’s assessment of internal control over financial reporting and our audit of
internal controls over financial reporting for 2025. Sage is included in our 2024 consolidated financial statements and
constituted 0.5% of total assets, 0.6% of net assets, as of December 31, 2024, and 0.7% of revenues for the year then ended.
The effectiveness of our internal controls over financial reporting as of December 31, 2024 has been audited by Ernst
& Young LLP, an independent registered public accounting firm, as stated in their report, which is included in this Annual
Report on Form 10-K. Such report expresses an unqualified opinion on the effectiveness of the Company’s internal controls
over financial reporting as of December 31, 2024.
We reviewed management’s conclusions on internal controls and the report of Ernst & Young LLP with our Audit
Committee.
Changes in Internal Control over Financial Reporting
During the year ended December 31, 2024, there were no changes in our internal controls over financial reporting that
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B.
OTHER INFORMATION
10b5-1 Trading Arrangements
During the quarter ended December 31, 2024, none of the Company’s directors or officers (as defined in Rule 16a-1(f)
of the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,”
as those terms are defined in Item 408 of Regulation S-K.
ITEM 9C.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not Applicable
201
PART III
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information appearing under “Election of Directors,” “Information about our Executive Officers,” and “Insider
Trading Policy, Code of Ethics and Whistleblower Procedures” in the 2025 Proxy Statement is hereby incorporated by
reference in response to this Item 10.
ITEM 11.
EXECUTIVE COMPENSATION
The information appearing under “Compensation Discussion and Analysis,” “Compensation Committee Report,”
“Executive Compensation” and “Compensation Committee Interlocks and Insider Participation” in the 2025 Proxy Statement is
hereby incorporated by reference in response to this Item 11.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information appearing under “Security Ownership of Certain Beneficial Owners and Management” and “Equity
Compensation Plan Information as of December 31, 2024” in the 2025 Proxy Statement is hereby incorporated by reference in
response to this Item 12.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
The information appearing under “Certain Relationships and Related Transactions and Director Independence” and
“Election of Directors—Independence of Directors” in the 2025 Proxy Statement is hereby incorporated by reference in
response to this Item 13.
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information appearing under “Independent Registered Public Accounting Firm Fees” and “Audit Committee Pre-
Approval Policies and Procedures” in the 2025 Proxy Statement is hereby incorporated by reference in response to this Item 14.
202
PART IV
ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) (1) Financial Statements. The consolidated financial statements required to be filed in this Annual Report on Form
10-K are included in Part II, Item 8 hereof.
(a) (2) Schedule I, Parent Company Only Financial Statements. All other schedules are omitted because they are not
applicable or not required, or the required information is in the financial statements or the notes thereto.
(a) (3) The Exhibit Index set forth below is incorporated by reference in response to this Item 15.
The following exhibits are filed as part of this Annual Report on Form 10-K as required by Regulation S-K. The
exhibits designated by a dagger (†) are management contracts and compensation plans and arrangements required to be filed as
exhibits to this Annual Report on Form 10-K. Certain schedules and exhibits designated by one asterisk (*) have been omitted
pursuant to Item 601(a)(5) of Regulation S-K promulgated by the SEC. Certain schedules and exhibits designated by two
asterisks (**) have been omitted pursuant to Item 601(b)(2) of Regulation S-K promulgated by the SEC. The Company agrees
to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.
EXHIBIT INDEX
1.1
Amended and Restated Controlled Equity OfferingSM Sales Agreement, dated as of July 3, 2023, between BGC
Group, Inc. and Cantor Fitzgerald & Co. (incorporated by reference to Exhibit 1.1 to BGC Group, Inc.’s Post-
Effective Amendment No. 1 to BGC Partners, Inc.’s Registration Statement on Form S-3 filed with the SEC on
July 3, 2023)
2.1
Agreement and Plan of Merger, dated as of May 29, 2007, by and among eSpeed, Inc., BGC Partners, Inc.,
Cantor Fitzgerald, L.P., BGC Partners, L.P., BGC Global Holdings, L.P. and BGC Holdings, L.P. (incorporated
by reference to BGC Partners, Inc.’s. Definitive Proxy Statement on Schedule 14A filed with the SEC on
February 11, 2008)
2.2
Amendment No. 1, dated as of November 5, 2007, to the Agreement and Plan of Merger, dated as of May 29,
2007, by and among eSpeed, Inc., BGC Partners, Inc., Cantor Fitzgerald, L.P., BGC Partners, L.P., BGC Global
Holdings, L.P. and BGC Holdings, L.P. (incorporated by reference to BGC Partners, Inc.’s. Definitive Proxy
Statement on Schedule 14A filed with the SEC on February 11, 2008)
2.3
Amendment No. 2, dated as of February 1, 2008, to the Agreement and Plan of Merger, dated as of May 29,
2007, by and among eSpeed, Inc., BGC Partners, Inc., Cantor Fitzgerald, L.P., BGC Partners, L.P., BGC Global
Holdings, L.P. and BGC Holdings, L.P. (incorporated by reference to BGC Partners, Inc.’s. Definitive Proxy
Statement on Schedule 14A filed with the SEC on February 11, 2008)
2.4**
Separation Agreement, dated as of March 31, 2008, by and among Cantor Fitzgerald, L.P., BGC Partners, LLC,
BGC Partners, L.P., BGC Global Holdings, L.P. and BGC Holdings, L.P. (incorporated by reference to Exhibit
2.4 to BGC Partners, Inc.’s. Current Report on Form 8-K filed with the SEC on April 7, 2008)
2.5**
Purchase Agreement, dated as of April 1, 2013, by and among BGC Partners, Inc., BGC Partners, L.P., The
NASDAQ OMX Group, Inc., and for certain limited purposes, Cantor Fitzgerald, L.P. (incorporated by
reference to Exhibit 2.1 to BGC Partners, Inc.’s. Quarterly Report on Form 10-Q filed with the SEC on
August 8, 2013)
2.6**
Tender Offer Agreement executed by BGC Partners, Inc., BGC Partners, L.P. and GFI Group Inc., dated
February 19, 2015 (incorporated by reference to Exhibit 2.1 to BGC Partners, Inc.’s. Current Report on Form 8-
K filed with the SEC on February 25, 2015)
2.7
Stock Purchase Agreement by and among GFINet, Inc., GFI TP Holdings Pte Ltd, Intercontinental Exchange,
Inc., and, solely for the purposes set forth therein, GFI Group Inc. and BGC Partners, Inc. (incorporated by
reference to Exhibit 10.1 to BGC Partners, Inc.’s. Current Report on Form 8-K filed with the SEC on
November 18, 2015)
2.8**
Agreement and Plan of Merger, dated December 22, 2015, by and among BGC Partners, Inc., JPI Merger Sub 1,
Inc., JPI Merger Sub 2, LLC, Jersey Partners Inc., New JP Inc., Michael Gooch and Colin Heffron (incorporated
by reference to Exhibit 2.1 to BGC Partners, Inc.’s. Current Report on Form 8-K filed with the SEC on
December 23, 2015)
Exhibit
Number
Exhibit Title
203
2.9**
Transaction Agreement, dated as of July 17, 2017, by and among BGC Partners, Inc. BGC Partners, L.P., Cantor
Fitzgerald, L.P., Cantor Commercial Real Estate Company, L.P., Cantor Sponsor, L.P., CF Real Estate Finance
Holdings, L.P. and CF Real Estate Finance Holdings GP, LLC (incorporated by reference to Exhibit 2.1 to BGC
Partners, Inc.’s. Current Report on Form 8-K filed with the SEC on July 21, 2017)
2.10**
Amended and Restated Separation and Distribution Agreement, dated as of November 23, 2018, by and among
Cantor Fitzgerald, L.P., BGC Partners, Inc., BGC Holdings, L.P., BGC Partners, L.P., BGC Global Holdings,
L.P., Newmark Group, Inc., Newmark Holdings, L.P. and Newmark Partners, L.P. (incorporated by reference to
Exhibit 2.1 to BGC Partners, Inc.’s Current Report on Form 8-K filed on November 27, 2018)
2.11
Agreement for the Sale and Purchase of the Share Capital of Ed Broking Group Limited and Besso Insurance
Group Limited, Dated May 26, 2021, by and Among Tower Bridge (One) Limited, Ardonagh Specialty
Holdings 2 Limited, The Ardonagh Group Limited and BGC Partners, Inc. (incorporated by reference to Exhibit
2.1 to BGC Partners, Inc.’s. Quarterly Report on Form 10-Q filed with the SEC on August 6, 2021)
2.12
Deed of Variation in Respect of the Agreement for the Sale and Purchase of the Share Capital of Ed Broking
Group Limited and Besso Insurance Group Limited, dated August 25, 2021, by and among Tower Bridge (One)
Limited, Ardonagh Specialty Holdings 2 Limited, The Ardonagh Group Limited and BGC Partners, Inc.
(incorporated by reference to Exhibit 2.2 to BGC Partners, Inc. Quarterly Report on Form 10-Q filed with the
SEC on November 8, 2021)
2.13
Deed of Variation in Respect of the Agreement for the Sale and Purchase of the Share Capital of Ed Broking
Group Limited and Besso Insurance Group Limited, dated October 31, 2021, by and among Tower Bridge (One)
Limited, Ardonagh Specialty Holdings 2 Limited, The Ardonagh Group Limited and BGC Partners, Inc.
(incorporated by reference to Exhibit 2.3 to BGC Partners, Inc.’s. Quarterly Report on Form 10-Q filed with the
SEC on November 8, 2021)
2.14*
Corporate Conversion Agreement, dated as of November 15, 2022, by and among BGC Partners, Inc., BGC
Group, Inc., BGC Holdings, L.P., BGC GP, LLC, BGC Partners II, Inc., BGC Partners II, LLC, BGC Holdings
Merger Sub, LLC and, solely for the purposes of certain provisions therein, Cantor Fitzgerald, L.P. (incorporated
by reference to Exhibit 2.1 to BGC Partners, Inc.’s Current Report on Form 8-K filed with the SEC on
November 16, 2022)
2.15
Amendment to the Corporate Conversion Agreement, dated as of March 29, 2023, by and among BGC Partners,
Inc., BGC Group, Inc., BGC Holdings, L.P., BGC GP, LLC, BGC Partners II, Inc., BGC Partners II, LLC, BGC
Holdings Merger Sub, LLC and, solely for the purposes of certain provisions therein, Cantor Fitzgerald, L.P.
(incorporated by reference to Exhibit 2.15 to BGC Partners, Inc.’s Annual Report on Form 10-K/A filed with the
SEC on April 28, 2023)
3.1
Amended and Restated Certificate of Incorporation of BGC Group, Inc. (incorporated by reference to Exhibit 3.1
to BGC Group, Inc.’s. Current Report on Form 8-K12B filed with the SEC on July 3, 2023)
3.2
Amended and Restated Bylaws of BGC Group, Inc. (incorporated by reference to Exhibit 3.2 to BGC Group,
Inc.’s Current Report on Form 8-K12B filed with the SEC on July 3, 2023)
4.1
Description of BGC Group, Inc.’s Securities Registered under Section 12 of the Securities Exchange Act of
1934, as amended
4.2
Indenture, dated as of September 27, 2019, between BGC Partners, Inc. and Wells Fargo Bank, National
Association, as trustee (incorporated by reference to Exhibit 4.1 to BGC Partners, Inc.’s Form 8-K filed with the
SEC on September 30, 2019)
4.3
Second Supplemental Indenture, dated as of July 10, 2020, between BGC Partners, Inc. and Wells Fargo Bank,
National Association, as trustee (incorporated by reference to Exhibit 4.2 to BGC Partners, Inc.’s Current Report
on Form 8-K filed with the SEC on July 14, 2020)
4.4
Form of BGC Partners, Inc. 4.375% Senior Notes due 2025 (incorporated by reference to Exhibit 4.2 to BGC
Partners, Inc.’s Current Report on Form 8-K filed with the SEC on July 14, 2020)
4.5
Third Supplemental Indenture, dated as of May 25, 2023, between BGC Partners, Inc. and Computershare Trust
Company, N.A. as successor to Wells Fargo Bank, National Association, as trustee (incorporated by reference to
Exhibit 4.2 to BGC Partners, Inc.’s Current Report on Form 8-K filed with the SEC on May 25, 2023)
4.6
Form of BGC Partners, Inc. 8.000% Senior Notes due 2028 (incorporated by reference to Exhibit 4.3 to BGC
Partners, Inc.’s Current Report on Form 8-K filed with the SEC on May 25, 2023)
4.7
Fourth Supplemental Indenture, dated as of September 19, 2023, between BGC Partners, Inc. and
Computershare Trust Company, National Association, as successor to Wells Fargo Bank, National Association,
as trustee (incorporated by reference to Exhibit 4.1 of BGC Group, Inc.’s Current Report on Form 8-K filed with
the SEC on October 6, 2023)
Exhibit
Number
Exhibit Title
204
4.8
Indenture, dated as of October 6, 2023, between BGC Group, Inc. and UMB Bank, N.A., as trustee (incorporated
by reference to Exhibit 4.2 of BGC Group, Inc.’s Current Report on Form 8-K filed with the SEC on October 6,
2023)
4.9
First Supplemental Indenture, dated as of October 6, 2023, between BGC Group, Inc. and UMB Bank, N.A., as
trustee (incorporated by reference to Exhibit 4.3 of BGC Group, Inc.’s Current Report on Form 8-K filed with
the SEC on October 6, 2023)
4.10
Second Supplemental Indenture, dated as of October 6, 2023, between BGC Group, Inc. and UMB Bank, N.A.,
as trustee (incorporated by reference to Exhibit 4.4 of BGC Group, Inc.’s Current Report on Form 8-K filed with
the SEC on October 6, 2023)
4.11
Form of BGC Group, Inc.’s 4.375% Senior Notes due 2025 (incorporated by reference to Exhibit 4.4 of BGC
Group, Inc.’s Current Report on Form 8-K filed with the SEC on October 6, 2023)
4.12
Third Supplemental Indenture, dated as of October 6, 2023, between BGC Group, Inc. and UMB Bank, N.A., as
trustee (incorporated by reference to Exhibit 4.5 of BGC Group, Inc.’s Current Report on Form 8-K filed with
the SEC on October 6, 2023)
4.13
Form of BGC Group, Inc.’s 8.000% Senior Notes due 2028 (incorporated by reference to Exhibit 4.5 of BGC
Group, Inc.’s Current Report on Form 8-K filed with the SEC on October 6, 2023)
4.14
Indenture, dated as of June 10, 2024, between BGC Group, Inc. and Wilmington Trust, National Association, as
trustee (incorporated by reference to Exhibit 4.1 to BGC Group, Inc.’s Current Report on Form 8-K filed with
the SEC on June 10, 2024)
4.15
First Supplemental Indenture, dated as of June 10, 2024, between BGC Group, Inc. and Wilmington Trust,
National Association, as trustee (incorporated by reference to Exhibit 4.2 to BGC Group, Inc.’s Current Report
on Form 8-K filed with the SEC on June 10, 2024)
4.16
Form of BGC Group, Inc. 6.600% Senior Notes due 2029 (incorporated by reference to Exhibit 4.2 to BGC
Group, Inc’s Current Report on Form 8-K filed with the SEC on June 10, 2024)
10.1
Amended, Restated and Consolidated Registration Rights Agreement, dated as of July 1, 2023, by and between
BGC Group, Inc. and Cantor Fitzgerald, L.P. (incorporated by reference to Exhibit 10.3 to BGC Group, Inc.’s
Current Report on Form 8-K12B filed with the SEC on July 3, 2023)
10.2
Amended and Restated Administrative Services Agreement, dated as of July 1, 2023, by and between Cantor
Fitzgerald, L.P. and BGC Group, Inc. (incorporated by reference to Exhibit 10.4 to BGC Group, Inc.’s Current
Report on Form 8-K12B filed with the SEC on July 3, 2023)
10.3
Amended and Restated Administrative Services Agreement, dated as of July 1, 2023, by and among Tower
Bridge International Services L.P. and BGC Group, Inc. (incorporated by reference to Exhibit 10.5 to BGC
Group, Inc.’s Current Report on Form 8-K12B filed with the SEC on July 3, 2023)
10.4
Form of Regulated Entity Administrative Services Agreement (incorporated by reference to Exhibit 10.6 to BGC
Group, Inc.’s Current Report on Form 8-K12B filed with the SEC on July 3, 2023)
10.5
License Agreement, dated as of April 1, 2008, by and between BGC Partners, Inc. and Cantor Fitzgerald, L.P.
(incorporated by reference to Exhibit 10.10 to BGC Partners, Inc.’s Current Report on Form 8-K filed with the
SEC on April 7, 2008)
10.6
Clearing Services Agreement, dated May 9, 2006, between Cantor Fitzgerald & Co. and BGC Financial, Inc.
(incorporated by reference to Exhibit 10.1 to BGC Partners Inc.’s Quarterly Report on Form 10-Q filed with the
SEC on November 10, 2008)
10.7
Amendment to Clearing Services Agreement, dated November 7, 2008, between Cantor Fitzgerald & Co. and
BGC Financial, Inc. (incorporated by reference to Exhibit 10.2 to BGC Partners, Inc.’s Quarterly Report on
Form 10-Q filed with the SEC on November 10, 2008)
10.8
Second Amendment, dated August 16, 2010, to the Clearing Services Agreement, dated May 9, 2006, between
Cantor Fitzgerald & Co. and BGC Financial, Inc. (incorporated by reference to Exhibit 10.3 to BGC Partners,
Inc.’s Quarterly Report on Form 10-Q filed with the SEC on August 7, 2020)
10.9
Third Amendment, dated June 16, 2020, to the Clearing Services Agreement, dated May 9, 2006, between
Cantor Fitzgerald & Co. and BGC Financial, Inc. (incorporated by reference to Exhibit 10.4 to BGC Partners,
Inc.’s Quarterly Report on Form 10-Q filed with the SEC on August 7, 2020)
10.10
Fourth Amendment, dated as of June 7, 2024, to the Clearing Services Agreement, dated May 9, 2006, between
Cantor Fitzgerald & Co. and BGC Financial, Inc. (incorporated by reference to Exhibit 10.3 to BGC Group,
Inc.’s Current Report on Form 8-K filed with the SEC on June 10, 2024)
Exhibit
Number
Exhibit Title
205
10.11
Agreement dated November 5, 2008 between BGC Partners, Inc. and Cantor Fitzgerald, L.P. regarding clearing
capital (incorporated by reference to Exhibit 10.3 to BGC Partners, Inc.’s Quarterly Report on Form 10-Q filed
with the SEC on November 10, 2008)
10.12
First Amendment, dated June 16, 2020, to the Agreement between BGC Partners, Inc. and Cantor Fitzgerald,
L.P. regarding clearing capital, dated November 5, 2008 (incorporated by reference to Exhibit 10.5 to BGC
Partners, Inc.’s Quarterly Report on Form 10-Q filed with the SEC on August 7, 2020)
10.13
Assignment, Assumption and Second Amendment, dated as of June 7, 2024, by and between BGC Group, Inc.,
BGC Partners, Inc., and Cantor Fitzgerald, L.P., to the Clearing Capital Agreement, dated November 5, 2008,
between BGC Partners, Inc. and Cantor Fitzgerald, L.P. (incorporated by reference to Exhibit 10.4 to BGC
Group, Inc.’s Current Report on Form 8-K filed with the SEC on June 10, 2024)
10.14†
Amended and Restated Change in Control Agreement dated August 3, 2011 between Howard W. Lutnick and
BGC Partners, Inc. (incorporated by reference to Exhibit 10.1 to BGC Partners, Inc.’s Quarterly Report on Form
10-Q filed with the SEC on August 8, 2011)
10.15†
Amended and Restated Change in Control Agreement dated August 3, 2011 between Stephen M. Merkel and
BGC Partners, Inc. (incorporated by reference to Exhibit 10.2 to BGC Partners, Inc.’s Quarterly Report on Form
10-Q filed with the SEC on August 8, 2011)
10.16†
Amended and Restated Deed of Adherence, dated as of January 22, 2014, between Sean Windeatt and BGC
Services (Holdings) LLP (incorporated by reference to Exhibit 10.1 to BGC Partners, Inc.’s Current Report on
Form 8-K filed with the SEC on January 28, 2014)
10.17†
Deed of Amendment, dated February 24, 2017, to the Amended and Restated Deed of Adherence, between Sean
A. Windeatt and BGC Services (Holdings) LLP (incorporated by reference to Exhibit 10.86 to BGC Partners,
Inc.’s Annual Report on Form 10-K filed with the SEC on February 28, 2017)
10.18†
Deed of Amendment, dated November 5, 2020, to the Amended and Restated Deed of Adherence, between Sean
A. Windeatt and BGC Services (Holdings) LLP (incorporated by reference to Exhibit 10.2 to BGC Partners,
Inc.’s Quarterly Report on Form 10-Q filed with the SEC on November 6, 2020)
10.19†
Consultancy Agreement, dated February 24, 2017, between Sean A. Windeatt and BGC Services (Holdings)
LLP (incorporated by reference to Exhibit 10.87 to BGC Partners, Inc.’s Annual Report on Form 10-K filed with
the SEC on February 28, 2017)
10.20†
Amendment, dated November 5, 2020, to the Consultancy Agreement, dated February 24, 2017, between Sean
A. Windeatt and BGC Services (Holdings) LLP (incorporated by reference to Exhibit 10.3 to BGC Partners,
Inc.’s Quarterly Report on Form 10-Q filed with the SEC on November 6, 2020)
10.21†
Deed of Amendment, dated July 12, 2023, to the Amended and Restated Deed of Adherence, between Sean A.
Windeatt and BGC Services (Holdings) LLP (incorporated by reference to Exhibit 10.1 to BGC Group, Inc.’s
Current Report on Form 8-K filed with the SEC on July 13, 2023)
10.22
Letter Agreement, dated as of August 24, 2015, among BGC Partners, Inc., BGC Partners, L.P. and GFI Group
Inc., relating to shareholder litigation and the Tender Offer Agreement (incorporated by reference to Exhibit 10.1
to BGC Partners, Inc.’s Quarterly Report on Form 10-Q filed with the SEC on November 9, 2015)
10.23†
BGC Group, Inc. Long Term Incentive Plan (incorporated by reference to Exhibit 10.1 to BGC Group, Inc.’s
Current Report on Form 8-K12B filed with the SEC on July 3, 2023)
10.24†
BGC Group, Inc. Incentive Bonus Compensation Plan (incorporated by reference to Exhibit 10.2 to BGC Group,
Inc.’s Current Report on Form 8-K12B filed with the SEC on July 3, 2023)
10.25
Amended and Restated Agreement of Limited Partnership of CF Real Estate Finance Holdings, L.P., dated as of
September 8, 2017 (incorporated by reference to Exhibit 10.1 to BGC Partners, Inc.’s Current Report on Form 8-
K filed with the SEC on September 8, 2017)
10.26**
Second Amended and Restated Agreement of Limited Partnership of BGC Holdings, L.P., dated as of December
13, 2017 (incorporated by reference to Exhibit 10.1 to BGC Partners, Inc.’s Current Report on Form 8-K filed
with the SEC on December 19, 2017)
10.27
Amendment No. 1, dated November 8, 2018, to the Second Amended and Restated Agreement of Limited
Partnership of BGC Holdings, L.P. (incorporated by reference to Exhibit 10.6 to BGC Partners, Inc.’s Quarterly
Report on Form 10-Q filed with the SEC on November 8, 2018)
10.28**
Second Amended and Restated Agreement of Limited Partnership of BGC Partners, L.P., dated as of December
13, 2017 (incorporated by reference to Exhibit 10.4 to BGC Partners, Inc.’s Current Report on Form 8-K filed
with the SEC on December 19, 2017)
Exhibit
Number
Exhibit Title
206
10.29**
Second Amended and Restated Agreement of Limited Partnership of BGC Global Holdings, L.P., dated as of
December 13, 2017 (incorporated by reference to Exhibit 10.5 to BGC Partners, Inc.’s Current Report on Form
8-K filed with the SEC on December 19, 2017)
10.30
Second Amendment, dated as of March 10, 2023, to the Second Amended and Restated Agreement of Limited
Partnership of BGC Holdings, L.P., dated as of December 13, 2017 (incorporated by reference to Exhibit 10.1 to
BGC Partners, Inc.’s Current Report on Form 8-K filed with the SEC on March 14, 2023)
10.31
Tax Matters Agreement, dated as of December 13, 2017, by and among BGC Partners, Inc., BGC Holdings,
L.P., BGC Partners, L.P., Newmark Group, Inc., Newmark Holdings, L.P. and Newmark Partners, L.P.
(incorporated by reference to Exhibit 10.8 to BGC Partners, Inc.’s Current Report on Form 8-K filed with the
SEC on December 19, 2017)
10.32
Credit Agreement, dated as of March 19, 2018, by and between BGC Partners, Inc. and Cantor Fitzgerald, L.P.
(incorporated by reference to Exhibit 10.1 to BGC Partners, Inc.’s Current Report on Form 8-K filed with the
SEC on March 23, 2018)
10.33
Amendment, dated August 6, 2018, to the Credit Agreement, dated as of March 19, 2018, by and between BGC
Partners, Inc. and Cantor Fitzgerald, L.P. (incorporated by reference to Exhibit 10.1 to BGC Partners, Inc.’s
Current Report on Form 8-K filed with the SEC on August 7, 2018)
10.34
Second Amendment, dated as of March 8, 2024, to the Credit Agreement, dated as of March 19, 2018, as
amended as of August 6, 2018 and as assumed by BGC Group, Inc. as of October 6, 2023, by and between BGC
Partners, Inc. and Cantor Fitzgerald, L.P. (incorporated by reference to Exhibit 10.1 to BGC Group, Inc.’s
Current Report on Form 8-K filed with the SEC on March 12, 2024)
10.35
Third Amendment, dated as of June 7, 2024, by and between BGC Group, Inc. and Cantor Fitzgerald, L.P., to
the Credit Agreement, by and between BGC Partners, Inc. and Cantor Fitzgerald, L.P., dated as of March 19,
2018, as amended as of August 16, 2018, assumed by BGC Group, Inc. as of October 6, 2023, and amended as
of March 8, 2024 (incorporated by reference to Exhibit 10.2 BGC Group, Inc.’s Current Report on Form 8-K
filed with the SEC on June 10, 2024)
10.36
Amended and Restated Credit Agreement, dated as of March 19, 2018, by and between BGC Partners, Inc. and
Newmark Group, Inc. (incorporated by reference to Exhibit 10.2 to BGC Partners, Inc.’s Current Report on
Form 8-K filed with the SEC on March 23, 2018)
10.37
Credit Agreement, dated as of November 28, 2018, by and among BGC Partners, Inc., as the Borrower, certain
subsidiaries of the Borrower, as Guarantors, the several financial institutions from time to time as parties thereto,
as Lenders, and Bank of America, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to
BGC Partners, Inc.’s Current Report on Form 8-K filed with the SEC on November 30, 2018)
10.38
First Amendment, dated December 11, 2019, to the Credit Agreement, dated as of November 28, 2018, by and
among BGC Partners, Inc., as the Borrower, certain subsidiaries of the Borrower, as Guarantors, the several
financial institutions from time to time as parties thereto, as Lenders, and Bank of America, N.A., as
Administrative Agent (incorporated by reference to Exhibit 10.1 to BGC Partners, Inc.’s Current Report on Form
8-K filed with the SEC on December 13, 2019)
10.39
Second Amendment, dated February 26, 2020, to the Credit Agreement, dated as of November 28, 2018, by and
among BGC Partners, Inc., as the Borrower, certain subsidiaries of the Borrower, as Guarantors, the several
financial institutions from time to time as parties thereto, as Lenders, and Bank of America, N.A., as the
Administrative Agent. (incorporated by reference to Exhibit 10.47 to BGC Partners, Inc.’s Annual Report on
Form 10-K filed with the SEC on March 1, 2021)
10.40
Assignment and Assumption Agreement, dated as of October 6, 2023, by and between BGC Group, Inc., BGC
Partners, Inc., and Cantor Fitzgerald, L.P., relating to the Credit Agreement, dated as of March 19, 2018, as
amended as of August 6, 2018, by and between BGC Partners, Inc. and Cantor Fitzgerald, L.P. (incorporated by
reference to Exhibit 10.3 to BGC Group, Inc.’s Current Report on Form 8-K filed with the SEC on October 6,
2023)
10.41*
Support Agreement, dated as of November 15, 2022, by and among BGC Partners, Inc. and Cantor Fitzgerald,
L.P. (incorporated by reference to Exhibit 10.1 to BGC Partners, Inc.’s Current Report on Form 8-K filed with
the SEC on November 16, 2022)
10.42
Second Amended and Restated Credit Agreement, dated as of April 26, 2024, by and among BGC Group, Inc.,
as the Borrower, certain subsidiaries of the Borrower, as Guarantors, the several financial institutions from time
to time as parties thereto, as Lenders, and Bank of America, N.A., as Administrative Agent (incorporated by
reference to Exhibit 10.1 to BGC Group, Inc.’s Current Report on Form 8-K filed with the SEC on April 30,
2024)
Exhibit
Number
Exhibit Title
207
10.43
First Amendment to Second Amended and Restated Credit Agreement, dated as of December 6, 2024, by and
among BGC Group, Inc., as the Borrower, the several financial institutions from time to time as parties thereto,
as Lenders, and Bank of America, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to
BGC Group, Inc.’s Current Report on Form 8-K filed with the SEC on December 6, 2024)
10.44†
Amended and Restated Employment Agreement dated February 18, 2025, by and between John Abularrage and
BGC Financial, L.P. (incorporated by reference to Exhibit 10.1 to BGC Group, Inc.'s Current Report on Form 8-
K filed with the SEC on February 19, 2025)
10.45†
Amended and Restated Bonus Letter, dated February 18, 2025, by and between John Abularrage and BGC
Financial, L.P. (incorporated by reference to Exhibit 10.2 to BGC Group, Inc.’s Current Report on Form 8-K
filed with the SEC on February 19, 2025)
10.46†
Amended and Restated Employment Agreement, dated February 18, 2025, by and between JP Aubin and BGC
Brokers L.P. (incorporated by reference to Exhibit 10.3 to BGC Group, Inc.'s Current Report on Form 8-K filed
with the SEC on February 19, 2025)
10.47†
Amended and Restated Consultancy Contract, dated February 18, 2025, by and between JP Aubin and BGC
Services (Holdings) LLP (incorporated by reference to Exhibit 10.4 to BGC Group, Inc.’s Current Report on
Form 8-K filed with the SEC on February 19, 2025)
10.48†
Deed of Amendment, dated February 18, 2025, to the Amended and Restated Deed of Adherence, between Sean
A. Windeatt and BGC Services (Holdings) LLP (incorporated by reference to Exhibit 10.5 to BGC Group, Inc.’s
Current Report on Form 8-K filed with the SEC on February 19, 2025)
19.1
BGC Group, Inc. Insider Trading Policy
21.1
List of subsidiaries of BGC Group, Inc.
23.1
Consent of Ernst & Young LLP
31.1
Certification of Co-Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
Certification of Co-Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3
Certification of Co-Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.4
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
Certification by the Principal Executive Officers and Principal Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
97.1
BGC Group, Inc. Compensation Recovery Policy (incorporated by reference to Exhibit 97.1 to BGC Group,
Inc.’s Annual Report on Form 10-K filed with the SEC on February 29, 2024)
101
The following materials from BGC Group, Inc.’s Annual Report on Form 10-K for the period ended
December 31, 2024 are formatted in inline eXtensible Business Reporting Language (iXBRL): (i) the
Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Operations, (iii) the
Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statements of Cash Flows,
(v) the Consolidated Statements of Changes in Equity, (vi) Notes to the Consolidated Financial Statements, and
(vii) Schedule I, Parent Company Only Financial Statements. The XBRL Instance document does not appear in
the Interactive Data File because its XBRL tags are embedded within the iXBRL document
104
The cover page from this Annual Report on Form 10-K, formatted in inline XBRL (included in Exhibit 101)
Exhibit
Number
Exhibit Title
ITEM 16.
FORM 10-K SUMMARY
Not Applicable
208
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this Annual Report on Form 10-K for the fiscal year ended December 31, 2024 to be signed on its behalf by the
undersigned, thereunto duly authorized, on the 3rd day of March, 2025.
BGC Group, Inc.
By:
/S/ SEAN A. WINDEATT
Name:
Sean A. Windeatt
Title:
Co-Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been
signed below by the following persons on behalf of the registrant, BGC Group, Inc., in the capacities and on the date indicated.
Signature
Capacity in Which Signed
Date
/S/ SEAN A. WINDEATT
Co-Chief Executive Officer
March 3, 2025
Sean A. Windeatt
( Co-Principal Executive Officer)
/S/ JOHN J. ABULARRAGE
Co-Chief Executive Officer
March 3, 2025
John J. Abularrage
( Co-Principal Executive Officer)
/S/ JP AUBIN
Co-Chief Executive Officer
March 3, 2025
JP Aubin
( Co-Principal Executive Officer)
/S/ JASON W. HAUF
Chief Financial Officer
March 3, 2025
Jason W. Hauf
(Principal Financial and Accounting Officer)
/S/ STEPHEN M. MERKEL
Chairman of the Board of Directors
March 3, 2025
Stephen M. Merkel
/S/ BRANDON LUTNICK
Director
March 3, 2025
Brandon Lutnick
/S/ LINDA A. BELL
Director
March 3, 2025
Linda A. Bell
/S/ WILLIAM D. ADDAS
Director
March 3, 2025
William D. Addas
/S/ DAVID P. RICHARDS
Director
March 3, 2025
David P. Richards
/S/ ARTHUR U. MBANEFO
Director
March 3, 2025
Arthur U. Mbanefo
[Signature page to the Annual Report on Form 10-K for the period ended December 31, 2024 dated March 3, 2025.]
209
BGC GROUP, INC.
(Parent Company Only)
STATEMENTS OF FINANCIAL CONDITION
(in thousands, except share and per share data)
December 31, 2024
December 31, 2023
Assets
Cash and cash equivalents
$
70 $
29
Investments in subsidiaries
643,778
753,357
Receivables from related parties
13,242
12,744
Notes receivable from related parties
1,323,458
1,124,589
Other assets
255,085
139,140
Total assets
$
2,235,633 $
2,029,859
Liabilities and Stockholders’ Equity
Accounts payable, accrued and other liabilities
$
13,668 $
20,187
Notes payable and other borrowings
1,323,458
1,124,589
Total liabilities
1,337,126
1,144,776
Commitments, contingencies and guarantees (Note 2)
Total stockholders’ equity
898,507
885,083
Total liabilities and stockholders’ equity
$
2,235,633 $
2,029,859
See accompanying Notes to Financial Statements.
210
BGC GROUP, INC.
(Parent Company Only)
STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Successor
Predecessor
Year Ended
December 31,
2024
Six Months
Ended December
31, 2023
Six Months
Ended June 30,
2023
Year Ended
December 31,
2022
Revenues:
Other revenues
$
1,062 $
394
$
797 $
263
Interest and dividend income
81,066
17,528
30,700
53,652
Total revenue
82,128
17,922
31,497
53,915
Expenses:
Interest expense
81,066
17,528
30,700
53,652
Total expenses
81,066
17,528
30,700
53,652
Income from operations before income taxes
1,062
394
797
263
Equity income (loss) of subsidiaries
58,426
(6,397)
(9,767)
42,207
Provision (benefit) for income taxes
(67,500)
(42,994)
(8,244)
(6,242)
Net income (loss) available to common stockholders
$
126,988 $
36,991
$
(726) $
48,712
Per share data:
Basic earnings (loss) per share
Net income (loss) attributable to common
stockholders
$
121,215 $
34,796
$
(726) $
48,712
Basic earnings (loss) per share
$
0.26 $
0.08
$
0.00 $
0.13
Basic weighted-average shares of common stock
outstanding
473,390
426,436
383,528
371,561
Fully diluted earnings (loss) per share
Net income (loss) for fully diluted shares
$
121,268 $
34,669
$
(726) $
63,479
Fully diluted earnings (loss) per share
$
0.25 $
0.07
$
0.00 $
0.13
Fully diluted weighted-average shares of common
stock outstanding
479,142
489,989
383,528
499,414
See accompanying Notes to Financial Statements.
211
BGC GROUP, INC.
(Parent Company Only)
STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
Successor
Predecessor
Year Ended
December 31,
2024
Six Months
Ended December
31, 2023
Six Months
Ended June 30,
2023
Year Ended
December 31,
2022
Net income (loss) available to common stockholders
$
126,988 $
36,991
$
(726) $
48,712
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments
(21,267)
2,546
4,303
(4,883)
Total other comprehensive (loss) income, net of tax
(21,267)
2,546
4,303
(4,883)
Comprehensive income attributable to common
stockholders
$
105,721 $
39,537
$
3,577 $
43,829
See accompanying Notes to Financial Statements.
212
BGC GROUP, INC.
(Parent Company Only)
STATEMENTS OF CASH FLOWS
(in thousands)
Successor
Predecessor
Year Ended
December 31,
2024
Six Months
Ended
December 31,
2023
Six Months
Ended June
30, 2023
Year Ended
December 31,
2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) available to common stockholders
$
126,988 $
36,991
$
(726) $
48,712
Adjustments to reconcile net income (loss) to net cash used
in operating activities:
Amortization of deferred financing costs
1,166
774
1,461
2,801
Equity (income) loss of subsidiaries
(126,988)
(36,991)
726
(48,712)
Deferred tax (benefit) expense
(67,500)
(51,527)
—
(20,341)
Decrease (increase) in operating assets:
Investments in subsidiaries
384,934
207,931
(552)
55,706
Receivables from related parties
(498)
(12,744)
253
878
Notes receivable from related party
(196,192)
(1,124,589)
(348,040)
(2,801)
Other assets
(48,445)
(87,613)
3,836
(1,052)
(Decrease) increase in operating liabilities:
Accounts payable, accrued and other liabilities
(6,517)
20,191
3,568
(5,750)
Net cash provided by (used in) operating activities
66,948
(1,047,577)
(339,474)
29,441
CASH FLOWS FROM INVESTING ACTIVITIES:
Loan to related parties
(180,000)
—
—
—
Repayment of loan to related parties
180,000
—
—
—
Net cash provided by (used in) investing activities
—
—
—
—
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends to stockholders
(33,800)
(9,360)
(7,558)
(14,859)
Repurchase of Class A common stock
(262,211)
(66,778)
(46,481)
(103,888)
Issuance of senior notes, net of deferred issuance costs
494,989
884,781
346,579
—
Redemption of equity awards
—
(155)
(1,043)
—
Repayments of senior notes
(255,526)
—
—
—
Unsecured revolving credit agreement borrowings
470,564
239,033
—
—
Unsecured revolving credit agreement repayments
(515,000)
—
—
—
Repayment of short-term borrowings from related parties
(275,000)
—
—
—
Issuance of short term borrowings from related parties
275,000
—
—
—
Distributions from subsidiaries
33,800
—
47,861
89,234
Proceeds from dividend reinvestment plan
277
85
84
90
Net cash provided by (used in) financing activities
(66,907)
1,047,606
339,442
(29,423)
Net increase (decrease) in cash and cash equivalents
41
29
(32)
18
Cash and cash equivalents at beginning of period
29
—
49
31
Cash and cash equivalents at end of period
$
70 $
29
$
17
$
49
Supplemental cash information:
Cash paid (refund) during the period for taxes
$
(5) $
—
$
9,581
$
5,269
Cash paid during the period for interest
78,448
10,702
26,404
49,375
Supplemental non-cash information:
Issuance of Class A common stock upon exchange of
limited partnership interests
$
— $
—
$
45,868
$
34,889
Issuance of Class A and contingent Class A common stock
and limited partnership interests for acquisitions
8,519
4,514
2,761
2,710
See accompanying Notes to Financial Statements.
213
BGC GROUP, INC.
(Parent Company Only)
NOTES TO FINANCIAL STATEMENTS
1.
Organization and Basis of Presentation
On July 1, 2023, the Company completed its Corporate Conversion to a Full C-Corporation in order to reorganize and
simplify its organizational structure. As a result of the Corporate Conversion, BGC Group, Inc.(Successor) became the public
holding company for, and successor to, BGC Partners, Inc. (Predecessor), and its Class A common stock began trading on
Nasdaq, in place of BGC Partners’ Class A common stock, under the ticker symbol “BGC.” The accompanying Parent
Company Only Financial Statements of BGC Group, Inc. should be read in conjunction with the Consolidated Financial
Statements of BGC Group, Inc. and subsidiaries and the notes thereto.
For the year ended December 31, 2024, the Company declared and paid cash dividends of $0.07 per share to BGC
Class A and Class B common stockholders. For both years ended December 31, 2023 and 2022, the comparable cash dividend
amounts were $0.04 per share.
2.
Commitments, Contingencies and Guarantees
On April 8, 2019, the Company entered into a $15.0 million secured loan arrangement, under which it pledged certain
fixed assets as security for a loan. This arrangement was guaranteed by the Parent Company and incurred interest at a fixed rate
of 3.77% and matured on April 8, 2023, at which point the loan was repaid in full; therefore, there were no borrowings as of
December 31, 2024. As of December 31, 2023, BGC Partners had no borrowings related to this secured loan arrangement. The
book value of the fixed assets pledged as of December 31, 2023 was nil. BGC Partners recorded interest expense related to this
secured loan arrangement of nil, nil and $0.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.
On April 19, 2019, the Company entered into a $10.0 million secured loan arrangement, under which it pledged certain
fixed assets as security for a loan. This arrangement was guaranteed by the Parent Company and incurred interest at a fixed rate
of 3.89% and matured on April 19, 2023, at which point the loan was repaid in full; therefore, there were no borrowings as of
December 31, 2024. As of December 31, 2023, BGC Partners had no borrowings related to this secured loan arrangement. The
book value of the fixed assets pledged as of December 31, 2023 was $0.3 million. BGC Partners recorded interest expense
related to this secured loan arrangement of nil, nil and $0.1 million for the years ended December 31, 2024, 2023 and 2022,
respectively.
3.
Notes Payable and Other Borrowings
Exchange Offer
On October 6, 2023, BGC Group completed the Exchange Offer, in which BGC Group offered to exchange the BGC
Partners Notes for new notes to be issued by BGC Group with the same respective interest rates, maturity dates and
substantially identical terms as the tendered notes, and cash. In connection with the Exchange Offer, and on behalf of BGC
Partners, BGC Group also solicited consents from (i) holders of the BGC Partners Notes to certain proposed amendments to the
indenture and supplemental indentures pursuant to which such BGC Partners Notes were issued to, among other things,
eliminate certain affirmative and restrictive covenants and events of default, including the “Change of Control” provisions
described below, which had applied to each series of the BGC Partners Notes, and (ii) holders of the BGC Partners 8.000%
Senior Notes to amend the registration rights agreement relating thereto to terminate such agreement. As of September 19,
2023, the requisite note holder consents were received to adopt the proposed indenture amendments and terminate the
registration rights agreement relating to the BGC Partners 8.000% Senior Notes. In connection with the October 6, 2023 closing
of the Exchange Offer, (i) $255.5 million aggregate principal amount of BGC Partners 3.750% Senior Notes were exchanged
for BGC Group 3.750% Senior Notes and subsequently cancelled, $288.2 million aggregate principal amount of BGC Partners
4.375% Senior Notes were exchanged for BGC Group 4.375% Senior Notes and subsequently cancelled, $347.2 million
aggregate principal amount of BGC Partners 8.000% Senior Notes were exchanged for BGC Group 8.000% Senior Notes and
subsequently cancelled, and equivalent aggregate principal amounts of BGC Group 3.750% Senior Notes, BGC Group 4.375%
Senior Notes and BGC Group 8.000% Senior Notes, respectively, were issued; (ii) the indenture and supplemental indentures
relating to the BGC Partners 3.750% Senior Notes, the BGC Partners 4.375% Senior Notes and the BGC Partners 8.000%
Senior Notes were amended as proposed; and (iii) the registration rights agreement relating to the BGC Partners 8.000% Senior
Notes was terminated. Issuance costs related to the Exchange Offer of $0.9 million are amortized as interest expense and the
carrying value of the BGC Group 3.750% Senior Notes, the BGC Group 4.375% Senior Notes, and the BGC Group 8.000%
Senior Notes will accrete up to the face amount over the term of the notes.
214
On October 19, 2023, the Company filed a resale registration statement on Form S-3 pursuant to which CF&Co could
make offers and sales of the BGC Group 3.750% Senior Notes, the BGC Group 4.375% Senior Notes and the BGC Group
8.000% Senior Notes in connection with ongoing market-making transactions which could occur from time to time. Market-
making transactions pursuant to this resale registration statement were terminated on November 8, 2024 in connection with the
filing of the replacement market-making resale registration statement described under “—6.600% Senior Notes” below.
Unsecured Senior Revolving Credit Agreement
On November 28, 2018, BGC Partners entered into the Revolving Credit Agreement with Bank of America, N.A., as
administrative agent, and a syndicate of lenders, which replaced the previously existing committed unsecured senior revolving
credit agreement. The maturity date of the Revolving Credit Agreement was November 28, 2020, and the maximum revolving
loan balance was $350.0 million. Borrowings under this Revolving Credit Agreement bore interest at either LIBOR or a defined
base rate plus additional margin. On December 11, 2019, BGC Partners entered into an amendment to the Revolving Credit
Agreement. Pursuant to the amendment, the maturity date was extended to February 26, 2021. On February 26, 2020, BGC
Partners entered into a second amendment to the Revolving Credit Agreement, pursuant to which, the maturity date was
extended by two years to February 26, 2023. There was no change to the interest rate or the maximum revolving loan balance.
On March 10, 2022, BGC Partners entered into an amendment and restatement of the senior unsecured revolving credit
agreement, pursuant to which the maturity date was extended to March 10, 2025, the size of the credit facility was increased to
$375.0 million, and borrowings under this agreement bear interest based on either SOFR or a defined base rate plus additional
margin. On October 6, 2023, the Revolving Credit Agreement was amended to exclude the BGC Partners Notes from the
restrictive covenant in the Revolving Credit Agreement limiting the indebtedness of subsidiaries, and BGC Group assumed all
of the rights and obligations of BGC Partners under the Revolving Credit Agreement and has become the borrower thereunder.
On April 26, 2024, the Company amended and restated the Revolving Credit Agreement to, among other things, extend the
maturity date to April 26, 2027, and provide the Company with the right to increase the facility up to $475.0 million, subject to
certain conditions being met. On December 6, 2024, the Company amended the amended and restated Revolving Credit
Agreement to increase the size of the credit facility to $700.0 million. The borrowing rates and financial covenants under the
amended and restated Revolving Credit Agreement, as amended, are substantially unchanged.
As of December 31, 2024, there were $195.8 million borrowings outstanding, net of deferred financing costs of $4.2
million under the Revolving Credit Agreement. As of December 31, 2023, there were $239.2 million of borrowings
outstanding, net of deferred financing costs of $0.8 million under the Revolving Credit Agreement. The average interest rate on
the outstanding borrowings for the years ended December 31, 2024 and 2023 was 6.99% and 7.07%, respectively. BGC Group
recorded interest expense of $12.2 million and $4.4 million related to the Revolving Credit Agreement for the years ended
December 31, 2024 and 2023, respectively. BGC Group did not record any interest expense related to the Revolving Credit
Agreement for the year ended December 31, 2022.
BGC Partners did not record any interest expense related to the Revolving Credit Agreement for the year ended
December 31, 2024. BGC Partners recorded interest expense related to the Revolving Credit Agreement of $6.9 million and
$2.3 million for the years ended December 31, 2023 and 2022, respectively.
5.375% Senior Notes
On July 24, 2018, BGC Partners issued an aggregate of $450.0 million principal amount of BGC Partners 5.375%
Senior Notes. The BGC Partners 5.375% Senior Notes were general senior unsecured obligations of BGC Partners. The BGC
Partners 5.375% Senior Notes bore interest at a rate of 5.375% per year, payable in cash on January 24 and July 24 of each
year, commencing January 24, 2019. The BGC Partners 5.375% Senior Notes matured on July 24, 2023. Prior to maturity, BGC
Partners was able to redeem some or all of the BGC Partners 5.375% Senior Notes at any time or from time to time for cash at
certain “make-whole” redemption prices (as set forth in the supplemental indenture related to the BGC Partners 5.375% Senior
Notes). If a “Change of Control Triggering Event” (as defined in the supplemental indenture governing the BGC Partners
5.375% Senior Notes) occurred, holders could have required BGC Partners to purchase all or a portion of their notes for cash at
a price equal to 101% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but
excluding, the purchase date. The initial carrying value of the BGC Partners 5.375% Senior Notes was $444.2 million, net of
discount and debt issuance costs of $5.8 million. The issuance costs were amortized as interest expense and the carrying value
of the BGC Partners 5.375% Senior Notes accreted up to the face amount over the term of the notes. On July 24, 2023, BGC
Partners repaid the principal plus accrued interest on the BGC Partners 5.375% Senior Notes. BGC Partners recorded interest
expense related to the BGC Partners 5.375% Senior Notes of $14.5 million and $25.5 million for the years ended December 31,
2023 and 2022, respectively.
215
3.750% Senior Notes
On September 27, 2019, BGC Partners issued an aggregate of $300.0 million principal amount of BGC Partners
3.750% Senior Notes. The BGC Partners 3.750% Senior Notes are general unsecured obligations of BGC Partners. The BGC
Partners 3.750% Senior Notes bore interest at a rate of 3.750% per year, payable in cash on April 1 and October 1 of each year,
commencing April 1, 2020. The BGC Partners 3.750% Senior Notes matured on October 1, 2024. BGC Partners was able to
redeem some or all of the BGC Partners 3.750% Senior Notes at any time or from time to time for cash at certain “make-whole”
redemption prices (as set forth in the supplemental indenture governing the BGC Partners 3.750% Senior Notes). The initial
carrying value of the BGC Partners 3.750% Senior Notes was $296.1 million, net of discount and debt issuance costs of $3.9
million. The issuance costs were amortized as interest expense and the carrying value of the BGC Partners 3.750% Senior
Notes accreted up to the face amount over the term of the notes.
As discussed above, on October 6, 2023, pursuant to the Exchange Offer, $255.5 million aggregate principal amount
of BGC Partners 3.750% Senior Notes were exchanged for BGC Group 3.750% Senior Notes and subsequently cancelled, and
certain amendments to the indenture and supplemental indenture governing the BGC Partners 3.750% Senior Notes became
effective. The BGC Group 3.750% Senior Notes matured on October 1, 2024 and bore interest at a rate of 3.750% per year,
payable in cash on April 1 and October 1 of each year, commencing April 1, 2024. BGC Group was able to redeem some or all
of the BGC Group 3.750% Senior Notes at any time or from time to time for cash at certain “make-whole” redemption prices
(as set forth in the supplemental indenture related to the BGC Group 3.750% Senior Notes). If a “Change of Control Triggering
Event” (as defined in the supplemental indenture related to the BGC Group 3.750% Senior Notes) occurred, holders could have
required BGC Group to purchase all or a portion of their notes for cash at a price equal to 101% of the principal amount of the
notes to be purchased plus any accrued and unpaid interest to, but excluding, the purchase date.
Following the closing of the Exchange Offer, $44.5 million aggregate principal amount of BGC Partners 3.750%
Senior Notes remained outstanding.
On October 1, 2024, BGC Group repaid the principal plus accrued interest on the BGC Group 3.750% Senior Notes.
BGC Group recorded interest expense related to the BGC Group 3.750% Senior Notes of $7.9 million and $2.6 million for the
years ended December 31, 2024 and 2023. BGC Group did not record interest expense related to the BGC Group 3.750%
Senior Notes for the year ended December 31, 2022. BGC Partners recorded interest expense related to the BGC Partners
3.750% Senior Notes of $9.5 million and $12.1 million for the years ended December 31, 2023 and 2022, respectively.
4.375% Senior Notes
On July 10, 2020, BGC Partners issued an aggregate of $300.0 million principal amount of BGC Partners 4.375%
Senior Notes. The BGC Partners 4.375% Senior Notes are general unsecured obligations of BGC Partners. The BGC Partners
4.375% Senior Notes bear interest at a rate of 4.375% per year, payable in cash on June 15 and December 15 of each year,
commencing December 15, 2020. The BGC Partners 4.375% Senior Notes will mature on December 15, 2025. BGC Partners
may redeem some or all of the BGC Partners 4.375% Senior Notes at any time or from time to time for cash at certain “make-
whole” redemption prices (as set forth in the supplemental indenture governing the BGC Partners 4.375% Senior Notes). The
initial carrying value of the BGC Partners 4.375% Senior Notes was $296.8 million, net of discount and debt issuance costs of
$3.2 million. The issuance costs are amortized as interest expense and the carrying value of the BGC Partners 4.375% Senior
Notes will accrete up to the face amount over the term of the notes.
As discussed above, on October 6, 2023, pursuant to the Exchange Offer, $288.2 million aggregate principal amount
of BGC Partners 4.375% Senior Notes were exchanged for BGC Group 4.375% Senior Notes and subsequently cancelled, and
certain amendments to the indenture and supplemental indenture governing the BGC Partners 4.375% Senior Notes became
effective. The BGC Group 4.375% Senior Notes will mature on December 15, 2025 and bear interest at a rate of 4.375% per
year, payable in cash on June 15 and December 15 of each year, commencing December 15, 2023. BGC Group may redeem
some or all of the BGC Group 4.375% Senior Notes at any time or from time to time for cash at certain “make-whole”
redemption prices (as set forth in the supplemental indenture related to the BGC Group 4.375% Senior Notes). If a “Change of
Control Triggering Event” (as defined in the supplemental indenture related to the BGC Group 4.375% Senior Notes) occurs,
holders may require BGC Group to purchase all or a portion of their notes for cash at a price equal to 101% of the principal
amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the purchase date.
Following the closing of the Exchange Offer, $11.8 million aggregate principal amount of BGC Partners 4.375%
Senior Notes remained outstanding. Cantor participated in the Exchange Offer, and currently holds $14.5 million aggregate
principal amount of BGC Group 4.375% Senior Notes.
216
The carrying value of the BGC Group 4.375% Senior Notes was $287.5 million as of December 31, 2024. BGC Group
recorded interest expense related to the BGC Group 4.375% Senior Notes of $13.3 million and $3.3 million for the years ended
December 31, 2024 and 2023. BGC Group did not record interest expense related to the BGC Group 4.375% Senior Notes for
the year ended December 31, 2022. The carrying value of the BGC Partners 4.375% Senior Notes was $11.8 million as
of December 31, 2024. BGC Partners recorded interest expense related to the BGC Partners 4.375% Senior Notes of $10.5
million and $13.8 million for the years ended December 31, 2023 and 2022, respectively.
8.000% Senior Notes
On May 25, 2023, BGC Partners issued an aggregate of $350.0 million principal amount of BGC Partners 8.000%
Senior Notes. The BGC Partners 8.000% Senior Notes are general unsecured obligations of BGC Partners. The BGC Partners
8.000% Senior Notes bear interest at a rate of 8.000% per year, payable in cash on May 25 and November 25 of each year,
commencing November 25, 2023. The BGC Partners 8.000% Senior Notes will mature on May 25, 2028. BGC Partners may
redeem some or all of the BGC Partners 8.000% Senior Notes at any time or from time to time for cash at certain “make-whole”
redemption prices (as set forth in the supplemental indenture governing the BGC Partners 8.000% Senior Notes). The initial
carrying value of the BGC Partners 8.000% Senior Notes was $346.6 million, net of discount and debt issuance costs of
$3.4 million. The issuance costs are amortized as interest expense and the carrying value of the BGC Partners 8.000% Senior
Notes will accrete up to the face amount over the term of the notes.
On October 6, 2023, pursuant to the Exchange Offer, $347.2 million aggregate principal amount of BGC Partners
8.000% Senior Notes were exchanged for BGC Group 8.000% Senior Notes and subsequently cancelled, and certain
amendments to the indenture and supplemental indenture governing the BGC Partners 8.000% Senior Notes became effective.
The BGC Group 8.000% Senior Notes will mature on May 25, 2028 and bear interest at a rate of 8.000% per year, payable in
cash on May 25 and November 25 of each year, commencing November 25, 2023. BGC Group may redeem some or all of the
BGC Group 8.000% Senior Notes at any time or from time to time for cash at certain “make-whole” redemption prices (as set
forth in the supplemental indenture related to the BGC Group 8.000% Senior Notes). If a “Change of Control Triggering
Event” (as defined in the supplemental indenture related to the BGC Group 8.000% Senior Notes) occurs, holders may require
BGC Group to purchase all or a portion of their notes for cash at a price equal to 101% of the principal amount of the notes to
be purchased plus any accrued and unpaid interest to, but excluding, the purchase date.
Following closing of the Exchange Offer, $2.8 million aggregate principal amount of the BGC Partners 8.000% Senior
Notes remained outstanding. In connection with the issuance of the BGC Partners 8.000% Senior Notes, BGC Partners entered
into a registration rights agreement providing for a future registered exchange offer by May 25, 2024 in which holders of the
BGC Partners 8.000% Senior Notes, issued in a private placement on May 25, 2023, could exchange such notes for new
registered notes with substantially identical terms. Such registration rights agreement was terminated in connection with the
closing of the Exchange Offer.
The carrying value of the BGC Group 8.000% Senior Notes was $344.6 million as of December 31, 2024. BGC Group
recorded interest expense related to the BGC Group 8.000% Senior Notes of $28.5 million and $7.1 million for the years ended
December 31, 2024 and 2023, respectively. The carrying value of the BGC Partners 8.000% Senior Notes was $2.3 million as
of December 31, 2024. BGC Partners recorded interest expense related to the BGC Partners 8.000% Senior Notes of $10.0
million for the year ended December 31, 2023.
6.600% Senior Notes
On June 10, 2024, the Company issued an aggregate of $500.0 million principal amount of BGC Group 6.600% Senior
Notes. The BGC Group 6.600% Senior Notes are general unsecured obligations of BGC Group. The BGC Group 6.600%
Senior Notes bear interest at a rate of 6.600% per year, payable in cash on June 10 and December 10 of each year, commencing
December 10, 2024. The BGC Group 6.600% Senior Notes will mature on June 10, 2029. The Company may redeem some or
all of the BGC Group 6.600% Senior Notes at any time or from time to time for cash at certain “make-whole” redemption
prices (as set forth in the supplemental indenture governing the BGC Group 6.600% Senior Notes). The initial carrying value of
the BGC Group 6.600% Senior Notes was $495.0 million, net of discount and debt issuance costs of $5.0 million. The issuance
costs are amortized as interest expense and the carrying value of the BGC Group 6.600% Senior Notes will accrete up to the
face amount over the term of the notes.
217
On November 8, 2024, the Company filed a resale registration statement on Form S-3 pursuant to which CF&Co may
make offers and sales of the BGC Group 4.375% Senior Notes, BGC Group 8.000% Senior Notes and BGC Group 6.600%
Senior Notes in connection with ongoing market-making transactions which may occur from time to time. Such market-making
transactions in these securities may occur in the open market or may be privately negotiated at prevailing market prices at the
time of resale or at related or negotiated prices. Neither CF&Co, nor any other of the Company’s other affiliates, has any
obligation to make a market in our securities, and CF&Co or any such other affiliate may discontinue market-making activities
at any time without notice.
The carrying value of the BGC Group 6.600% Senior Notes was $495.5 million as of December 31, 2024. BGC Group
recorded interest expense related to the BGC Group 6.600% Senior Notes of $18.9 million for the year ended December 31,
2024.
BGC Credit Agreement with Cantor
On March 12, 2024, the Company borrowed $275.0 million from Cantor under the BGC Credit Agreement. On April
1, 2024, the outstanding balance of $275.0 million was repaid in its entirety. There were no borrowings by the Company under
the BGC Credit Agreement as of December 31, 2024. The Company recorded $1.1 million of interest expense related to the
BGC Credit Agreement for the year ended December 31, 2024. The Company did not record any interest expense related to the
BGC Credit Agreement during the years ended December 31, 2023 and 2022. See “Item 7—Management’s Discussion and
Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” included in Part I, Item 7 of this
Annual Report on Form 10-K for additional information related to these transactions.
218
219
THE EXHIBITS LISTED UNDER “ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES” ARE
AVAILABLE IN BGC’S STAND-ALONE FORM 10-K, WHICH IS AVAILABLE ON OUR WEBSITE.
220
Non-GAAP Financial Measures
The non-GAAP definitions below include references to certain equity-based compensation instruments, such as restricted stock
awards and/or restricted stock units (“RSUs”), that the Company has issued and outstanding following its corporate conversion
on July 1, 2023. Although BGC is retaining certain defined terms and references, including references to partnerships or
partnership units, for purposes of comparability before and after the corporate conversion, such references may not be
applicable following the period ended June 30, 2023.
This document contains non-GAAP financial measures that differ from the most directly comparable measures calculated and
presented in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”). Non-GAAP financial
measures used by the Company include “Adjusted Earnings before noncontrolling interests and taxes”, which is used
interchangeably with “pre-tax Adjusted Earnings”; “Post-tax Adjusted Earnings to fully diluted shareholders”, which is used
interchangeably with “post-tax Adjusted Earnings”; “Adjusted EBITDA”; “Liquidity”; and “Constant Currency”. The
definitions of these terms are below.
Adjusted Earnings Defined
BGC uses non-GAAP financial measures, including “Adjusted Earnings before noncontrolling interests and taxes” and “Post-
tax Adjusted Earnings to fully diluted shareholders”, which are supplemental measures of operating results used by
management to evaluate the financial performance of the Company and its consolidated subsidiaries. BGC believes that
Adjusted Earnings best reflect the operating earnings generated by the Company on a consolidated basis and are one of the
financial metrics that management considers when managing its business.
As compared with “Income (loss) from operations before income taxes” and “Net income (loss) for fully diluted shares”, both
prepared in accordance with GAAP, Adjusted Earnings calculations primarily exclude certain non-cash items and other
expenses that generally do not involve the receipt or outlay of cash by the Company and/or which do not dilute existing
stockholders. In addition, Adjusted Earnings calculations exclude certain gains and charges that management believes do not
best reflect the underlying operating performance of BGC. Adjusted Earnings is calculated by taking the most comparable
GAAP measures and adjusting for certain items with respect to compensation expenses, non-compensation expenses, and other
income, as discussed below.
Calculations of Compensation Adjustments for Adjusted Earnings and Adjusted EBITDA
Treatment of Equity-Based Compensation Line Item for Adjusted Earnings and Adjusted EBITDA
The Company’s Adjusted Earnings and Adjusted EBITDA measures exclude all GAAP charges included in the line item
“Equity-based compensation and allocations of net income to limited partnership units and FPUs” (or “equity-based
compensation” for purposes of defining the Company’s non-GAAP results) as recorded on the Company’s GAAP
Consolidated Statements of Operations and GAAP Consolidated Statements of Cash Flows. These GAAP equity-based
compensation charges reflect the following items:
•
Charges related to amortization of RSUs, restricted stock awards, other equity-based awards, and limited
partnership units;
•
Charges with respect to grants of exchangeability, which reflect the right of holders of limited partnership units
with no capital accounts, such as LPUs and PSUs, to exchange these units into shares of common stock, or into
partnership units with capital accounts, such as HDUs, as well as cash paid with respect to taxes withheld or
expected to be owed by the unit holder upon such exchange. The withholding taxes related to the exchange of
certain non-exchangeable units without a capital account into either common shares or units with a capital account
may be funded by the redemption of preferred units such as PPSUs;
•
Charges with respect to preferred units and RSU tax accounts. Any preferred units and RSU tax accounts would
not be included in the Company’s fully diluted share count because they cannot be made exchangeable into shares
of common stock and are entitled only to a fixed distribution or dividend. Preferred units are granted in
connection with the grant of certain limited partnership units that may be granted exchangeability or redeemed in
connection with the grant of shares of common stock, and RSU tax accounts are granted in connection with the
grant of RSUs. The preferred units and RSU tax accounts are granted at ratios designed to cover any withholding
taxes expected to be paid. This is an alternative to the common practice among public companies of issuing the
221
gross amount of shares to employees, subject to cashless withholding of shares, to pay applicable withholding
taxes;
•
GAAP equity-based compensation charges with respect to the grant of an offsetting amount of common stock or
partnership units with capital accounts in connection with the redemption of non-exchangeable units, including
PSUs and LPUs;
•
Charges related to grants of equity awards, including common stock, RSUs, restricted stock awards or partnership
units with capital accounts;
•
Allocations of net income to limited partnership units and FPUs. Such allocations represent the pro-rata portion of
post-tax GAAP earnings available to such unit holders; and
•
Charges related to dividend equivalents earned on RSUs and any preferred returns on RSU tax accounts.
The amounts of certain quarterly equity-based compensation charges are based upon the Company’s estimate of such
expected charges during the annual period, as described further below under “Methodology for Calculating Adjusted
Earnings Taxes.”
Virtually all of BGC’s key executives and producers have equity stakes in the Company and its subsidiaries and generally
receive deferred equity as part of their compensation. A significant percentage of BGC’s fully diluted shares are owned by
its executives, partners and employees. The Company issues RSUs, restricted stock, limited partnership units (prior to July
1, 2023) as well as other forms of equity-based compensation, including grants of exchangeability into shares of common
stock (prior to July 1, 2023), to provide liquidity to its employees, to align the interests of its employees and management
with those of common stockholders, to help motivate and retain key employees, and to encourage a collaborative culture
that drives cross-selling and revenue growth.
All share equivalents that are part of the Company’s equity-based compensation program, including REUs, PSUs, LPUs,
HDUs, and other units that may be made exchangeable into common stock, as well as RSUs (which are recorded using the
treasury stock method), are included in the fully diluted share count when issued or at the beginning of the subsequent
quarter after the date of grant.
Compensation charges are also adjusted for certain other cash and non-cash items.
Certain Other Compensation-Related Adjustments for Adjusted Earnings
BGC also excludes various other GAAP items that management views as not reflective of the Company’s underlying
performance in a given period from its calculation of Adjusted Earnings. These may include compensation-related items
with respect to cost-saving initiatives, such as severance charges incurred in connection with headcount reductions as part of
broad restructuring and/or cost savings plans.
Calculation of Non-Compensation Adjustments for Adjusted Earnings
Adjusted Earnings calculations may also exclude items such as:
•
Non-cash GAAP charges related to the amortization of intangibles with respect to acquisitions;
•
Acquisition related costs;
•
Non-cash GAAP asset impairment charges;
•
Resolutions of litigation, disputes, investigations, or enforcement matters that are generally non-recurring, exceptional,
or unusual, or similar items that management believes do not best reflect BGC’s underlying operating performance,
including related unaffiliated third-party professional fees and expenses; and
•
Various other GAAP items that management views as not reflective of the Company’s underlying performance in a
given period, including non-compensation-related charges incurred as part of broad restructuring and/or cost savings
plans. Such GAAP items may include charges for professional fees and expenses, exiting leases and/or other long-term
contracts as part of cost-saving initiatives, as well as non-cash impairment charges related to assets, goodwill and/or
intangible assets created from acquisitions.
222
Calculation of Adjustments for Other (income) losses for Adjusted Earnings
Adjusted Earnings calculations also exclude gains from litigation resolution and certain other non-cash, non-dilutive, and/or
non-economic items, which may, in some periods, include:
•
Gains or losses on divestitures;
•
Fair value adjustment of investments;
•
Certain other GAAP items, including gains or losses related to BGC's investments accounted for under the equity
method; and
•
Any unusual, non-ordinary, or non-recurring gains or losses.
Methodology for Calculating Adjusted Earnings Taxes
Although Adjusted Earnings are calculated on a pre-tax basis, BGC also reports post-tax Adjusted Earnings to fully diluted
shareholders. The Company defines post-tax Adjusted Earnings to fully diluted shareholders as pre-tax Adjusted Earnings
reduced by the non-GAAP tax provision described below and net income (loss) attributable to noncontrolling interest for
Adjusted Earnings.
The Company calculates its tax provision for post-tax Adjusted Earnings using an annual estimate similar to how it accounts for
its income tax provision under GAAP. To calculate the quarterly tax provision under GAAP, BGC estimates its full fiscal year
GAAP income (loss) from operations before income taxes and noncontrolling interests in subsidiaries and the expected
inclusions and deductions for income tax purposes, including expected equity-based compensation during the annual period.
The resulting annualized tax rate is applied to BGC’s quarterly GAAP income (loss) from operations before income taxes and
noncontrolling interests in subsidiaries. At the end of the annual period, the Company updates its estimate to reflect the actual
tax amounts owed for the period.
To determine the non-GAAP tax provision, BGC first adjusts pre-tax Adjusted Earnings by recognizing any, and only, amounts
for which a tax deduction applies under applicable law. The amounts include charges with respect to equity-based
compensation; certain charges related to employee loan forgiveness; certain net operating loss carryforwards when taken for
statutory purposes; and certain charges related to tax goodwill amortization. These adjustments may also reflect timing and
measurement differences, including treatment of employee loans; changes in the value of units between the dates of grants of
exchangeability and the date of actual unit exchange; changes in the value of RSUs and/or restricted stock awards between the
date of grant and the date the award vests; variations in the value of certain deferred tax assets; and liabilities and the different
timing of permitted deductions for tax under GAAP and statutory tax requirements.
After application of these adjustments, the result is the Company’s taxable income for its pre-tax Adjusted Earnings, to which
BGC then applies the statutory tax rates to determine its non-GAAP tax provision. BGC views the effective tax rate on pre-tax
Adjusted Earnings as equal to the amount of its non-GAAP tax provision divided by the amount of pre-tax Adjusted Earnings.
Generally, the most significant factor affecting this non-GAAP tax provision is the amount of charges relating to equity-based
compensation. Because the charges relating to equity-based compensation are deductible in accordance with applicable tax
laws, increases in such charges have the effect of lowering the Company’s non-GAAP effective tax rate and thereby increasing
its post-tax Adjusted Earnings.
BGC incurs income tax expenses based on the location, legal structure and jurisdictional taxing authorities of each of its
subsidiaries. Certain of the Company’s entities are taxed as U.S. partnerships and are subject to the Unincorporated Business
Tax (“UBT”) in New York City. Any U.S. federal and state income tax liability or benefit related to the partnership income or
loss, with the exception of UBT, rests with the unit holders rather than with the partnership entity. The Company’s consolidated
financial statements include U.S. federal, state, and local income taxes on the Company’s allocable share of the U.S. results of
operations. Outside of the U.S., BGC operates principally through subsidiary corporations subject to local income taxes. For
these reasons, taxes for Adjusted Earnings are expected to be presented to show the tax provision the consolidated Company
would expect to pay if 100% of earnings were taxed at global corporate rates.
223
Calculations of Pre- and Post-Tax Adjusted Earnings per Share
BGC’s pre- and post-tax Adjusted Earnings per share calculations assume either that:
•
The fully diluted share count includes the shares related to any dilutive instruments, but excludes the associated
expense, net of tax, when the impact would be dilutive; or
•
The fully diluted share count excludes the shares related to these instruments, but includes the associated expense, net
of tax, when the impact would be anti-dilutive.
The share count for Adjusted Earnings excludes certain shares and share equivalents expected to be issued in future periods but
not yet eligible to receive dividends and/or distributions. Each quarter, the dividend payable to BGC’s stockholders, if any, is
expected to be determined by the Company’s Board of Directors with reference to a number of factors. The declaration,
payment, timing, and amount of any future dividends payable by the Company will be at the discretion of its Board of Directors
using the fully diluted share count. For more information on any share count adjustments, see the table titled “Fully Diluted
Weighted-Average Share Count under GAAP and for Adjusted Earnings” in the Company’s most recent financial results press
release.
Management Rationale for Using Adjusted Earnings
BGC’s calculation of Adjusted Earnings excludes the items discussed above because they are either non-cash in nature, because
the anticipated benefits from the expenditures are not expected to be fully realized until future periods, or because the Company
views results excluding these items as a better reflection of the underlying performance of BGC’s ongoing operations.
Management uses Adjusted Earnings and other financial metrics in part to help it evaluate, among other things, the overall
performance of the Company’s business and to make decisions with respect to the Company’s operations. The term “Adjusted
Earnings” should not be considered in isolation or as an alternative to GAAP net income (loss). The Company views Adjusted
Earnings as a metric that is not indicative of liquidity, or the cash available to fund its operations, but rather as a performance
measure. Pre- and post-tax Adjusted Earnings, as well as related measures, are not intended to replace the Company’s
presentation of its GAAP financial results. However, management believes that these measures help provide investors with a
clearer understanding of BGC’s financial performance and offer useful information to both management and investors
regarding certain financial and business trends related to the Company’s financial condition and results of operations.
Management believes that the GAAP and Adjusted Earnings measures of financial performance should be considered together.
For more information regarding Adjusted Earnings, see the sections of this document and/or in the Company’s most recent
financial results press release titled “Reconciliation of GAAP Income (Loss) from Operations before Income Taxes to Adjusted
Earnings and GAAP Fully Diluted EPS to Post-Tax Adjusted EPS”, including the related footnotes, for details about how
BGC’s non-GAAP results are reconciled to those under GAAP.
Adjusted EBITDA Defined
BGC also provides an additional non-GAAP financial performance measure, “Adjusted EBITDA”, which it defines as GAAP
“Net income (loss) available to common stockholders”, adjusted to add back the following items:
•
Provision (benefit) for income taxes;
•
Net income (loss) attributable to noncontrolling interest in subsidiaries;
•
Interest expense;
•
Fixed asset depreciation and intangible asset amortization;
•
Equity-based compensation, dividend equivalents and allocations of net income to limited partnership units and FPUs;
•
Impairment of long-lived assets;
•
(Gains) losses on equity method investments; and
•
Certain other non-cash GAAP items, such as non-cash charges of amortized rents.
The Company’s management believes that its Adjusted EBITDA measure is useful in evaluating BGC’s operating performance,
because the calculation of this measure generally eliminates the effects of financing and income taxes and the accounting
224
effects of capital spending and acquisitions, which would include impairment charges of goodwill and intangibles created from
acquisitions. Such items may vary for different companies for reasons unrelated to overall operating performance. As a result,
the Company’s management uses this measure and other financial metrics to evaluate operating performance and for other
discretionary purposes. BGC believes that Adjusted EBITDA is useful to investors to assist them in getting a more complete
picture of the Company’s financial results and operations.
Since BGC’s Adjusted EBITDA is not a recognized measurement under GAAP, investors should use this measure in addition to
GAAP measures of net income when analyzing BGC’s operating performance. Because not all companies use identical
EBITDA calculations, the Company’s presentation of Adjusted EBITDA may not be comparable to similarly titled measures of
other companies. Furthermore, Adjusted EBITDA is not intended to be a measure of free cash flow or GAAP cash flow from
operations because the Company’s Adjusted EBITDA does not consider certain cash requirements, such as tax and debt service
payments.
For more information regarding Adjusted EBITDA, see the section of this document and/or in the Company’s most recent
financial results press release titled “Reconciliation of GAAP Net Income (Loss) Available to Common Stockholders to
Adjusted EBITDA”, including the footnotes to the same, for details about how BGC’s non-GAAP results are reconciled to
those under GAAP.
Timing of Outlook for Certain GAAP and Non-GAAP Items
BGC anticipates providing forward-looking guidance for GAAP revenues and for certain non-GAAP measures from time to
time. However, the Company does not anticipate providing an outlook for other GAAP results. This is because certain GAAP
items, which are excluded from Adjusted Earnings and/or Adjusted EBITDA, are difficult to forecast with precision before the
end of each period. The Company therefore believes that it is not possible for it to have the required information necessary to
forecast GAAP results or to quantitatively reconcile GAAP forecasts to non-GAAP forecasts with sufficient precision without
unreasonable efforts. For the same reasons, the Company is unable to address the probable significance of the unavailable
information. The relevant items that are difficult to predict on a quarterly and/or annual basis with precision and may materially
impact the Company’s GAAP results include, but are not limited, to the following:
•
Certain equity-based compensation charges that may be determined at the discretion of management throughout and
up to the period-end;
•
Unusual, non-ordinary, or non-recurring items;
•
The impact of gains or losses on certain marketable securities, as well as any gains or losses related to associated
mark-to- market movements and/or hedging. These items are calculated using period-end closing prices;
•
Non-cash asset impairment charges, which are calculated and analyzed based on the period-end values of the
underlying assets. These amounts may not be known until after period-end; and
•
Acquisitions, dispositions, and/or resolutions of litigation, disputes, investigations, or enforcement matters, or similar
items, which are fluid and unpredictable in nature.
Liquidity Defined
BGC may also use a non-GAAP measure called “liquidity”. The Company considers liquidity to be comprised of the sum of
cash and cash equivalents, reverse repurchase agreements (if any), financial instruments owned, at fair value, less securities lent
out in securities loaned transactions and repurchase agreements (if any). The Company considers liquidity to be an important
metric for determining the amount of cash that is available or that could be readily available to the Company on short notice.
For more information regarding Liquidity, see the section of this document and/or in the Company’s most recent financial
results press release titled “Liquidity Analysis”, including any footnotes to the same, for details about how BGC’s non-GAAP
results are reconciled to those under GAAP.
Constant Currency Defined
BGC generates a significant amount of its revenues in non-U.S. dollar denominated currencies, particularly in the euro and
pound sterling. In order to present a better comparison of the Company's revenues during the period, which exhibited highly
volatile foreign exchange movements, BGC provides revenues year-over-year comparisons on a “Constant Currency” basis.
BGC uses a Constant Currency financial metric to provide a better comparison of the Company's underlying operating
225
performance by eliminating the impacts of foreign currency fluctuations between comparative periods. Since BGC's
consolidated financial statements are presented in U.S. dollars, fluctuations in non-U.S. dollar denominated currencies have an
impact on the Company's GAAP results. The Company's Constant Currency metric, which is a non-GAAP financial measure,
assumes the foreign exchange rates used to determine the Company's comparative prior period revenues, apply to the current
period revenues. Constant Currency revenue percentage change is calculated by determining the change in current quarter non-
GAAP Constant Currency revenues over prior period revenues. Non-GAAP Constant Currency revenues are total revenues
excluding the effect of foreign exchange rate movements and are calculated by remeasuring and/or translating current quarter
revenues using prior period exchange rates. BGC presents certain non-GAAP Constant Currency percentage changes in
Constant Currency revenues as a supplementary measure because it facilitates the comparison of the Company's core operating
results. This information should be considered in addition to, and not as a substitute for, results reported in accordance with
GAAP.
226
BGC GROUP, INC.
RECONCILIATION OF GAAP INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES TO ADJUSTED
EARNINGS AND GAAP FULLY DILUTED EPS TO POST-TAX ADJUSTED EPS
(in thousands, except per share data)
(unaudited)
FY 2024
FY 2023
GAAP income (loss) from operations before income taxes
$
173,143
$
57,709
Pre-tax adjustments:
Compensation adjustments:
Equity-based compensation and allocations of net income to limited partnership units
and FPUs (1)
369,143
355,378
Other Compensation charges (2)
5,469
3,004
Total Compensation adjustments
374,612
358,382
Non-Compensation adjustments:
Amortization of intangibles (3)
19,566
16,037
Impairment charges
746
3,144
Other (4)
38,629
30,254
Total Non-Compensation adjustments
58,941
49,435
Other income (losses), net adjustments:
Losses (gains) on divestitures (5)
(38,769)
—
Fair value adjustment of investments (6)
(37,119)
(1,928)
Other net (gains) losses (7)
(13,417)
(20,726)
Total other income (losses), net adjustments
(89,305)
(22,654)
Total pre-tax adjustments
344,248
385,163
Adjusted Earnings before noncontrolling interest in subsidiaries and taxes
$
517,391
$
442,872
GAAP net income (loss) available to common stockholders
$
126,988
$
36,265
Allocation of net income (loss) to noncontrolling interest in subsidiaries
—
(565)
Total pre-tax adjustments (from above)
344,248
385,163
Income tax adjustment to reflect adjusted earnings taxes (8)
16,803
(9,853)
Post-tax adjusted earnings
$
488,039
$
411,010
Per Share Data
GAAP fully diluted earnings (loss) per share
$
0.25
$
0.07
Total pre-tax adjustments (from above)
0.70
0.76
Income tax adjustment to reflect adjusted earnings taxes
0.03
(0.02)
Post-tax adjusted earnings per share
$
0.99
$
0.82
Fully diluted weighted-average shares of common stock outstanding
495,199
503,842
Dividends declared per share of common stock
$
0.07
$
0.04
Dividends declared and paid per share of common stock
$
0.07
$
0.04
Please see footnotes to this table on the next page.
227
(1) The components of equity-based compensation and allocations of net income to limited partnership units and FPUs are as
follows (in thousands):
FY 2024
FY 2023
Issuance of common stock and grants of exchangeability
$
184,667
$
171,646
Allocations of net income and dividend equivalents
4,196
6,302
LPU amortization
—
40,878
RSU, RSU Tax Account, and restricted stock amortization
180,280
136,552
Equity-based compensation and allocations of net income to limited partnership units
and FPUs
$
369,143
$
355,378
(2) GAAP Expenses in the full year of 2024 included certain acquisition-related expenses and other compensation related
adjustments. GAAP expenses in the full year of 2023 included certain loan impairments and other compensation related
adjustments.
(3) Includes non-cash GAAP charges related to the amortization of intangibles with respect to acquisitions.
(4) GAAP expenses in the full year of 2024 and 2023 included resolutions of litigation and other matters, including their related
professional fees, as well as certain other professional fees, of $14.2 million and $9.3 million, respectively, as well as various
other GAAP items. GAAP expenses in the full year of 2024 and 2023, included reserves in connection with unsettled trades and
receivables with sanctioned Russian entities, of $4.0 million and $9.0 million, respectively. GAAP expenses for the full years
2024 and 2023 also included Charity Day Contributions of $9.5 million and $6.7 million, respectively. GAAP expenses for the
full year of 2024 also included $3.2 million of non-cash charges incurred by the Company for exiting a lease. The above-
referenced items are consistent with BGC’s normal practice of excluding certain GAAP gains and charges from Adjusted
Earnings that management believes do not best reflect the ordinary results of the Company, including with respect to certain
non-recurring or unusual gains or losses, as well as resolutions of litigation.
(5) The full year of 2024 included a gain of $39.0 million associated with the sale of Capitalab.
(6) The full year of 2024 and 2023 included a non-cash gain of $37.1 million and $1.9 million, respectively, related to fair value
adjustments of investments held by BGC.
(7) The full year of 2024 and 2023 included non-cash gains of $8.4 million and $9.2 million, respectively, related to BGC’s
investments accounted for under the equity method. The full year of 2024 and 2023 also included net gains of $5.0 million and
$11.6 million, respectively, related to other recoveries and various other GAAP items.
(8) BGC’s GAAP provision (benefit) for income taxes is calculated based on an annualized methodology. The Company’s
GAAP provision (benefit) for income taxes was $49.9 million and $18.9 million for the full year of 2024 and 2023,
respectively. The Company includes additional tax-deductible items when calculating the provision for taxes with respect to
Adjusted Earnings using an annualized methodology. These include tax-deductions related to equity-based compensation,
employee loan amortization, and certain net-operating loss carryforwards. The non-GAAP provision for income taxes was
adjusted by $16.8 million and ($9.9) million for the full year of 2024 and 2023, respectively. As a result, the provision (benefit)
for income taxes with respect to Adjusted Earnings was $33.1 million and $28.8 million for the full year of 2024 and 2023,
respectively.
Note: Certain numbers may not add due to rounding.
228
BGC GROUP, INC.
FULLY DILUTED WEIGHTED-AVERAGE SHARE COUNT
UNDER GAAP AND FOR ADJUSTED EARNINGS
(in thousands)
(unaudited)
FY 2024
FY 2023
Common stock outstanding
473,390
426,436
Limited partnership units
—
25,111
Cantor units
—
28,711
Founding partner units
—
3,417
RSUs
—
1,406
Other (1)
5,752
4,908
Fully diluted weighted-average share count under GAAP
479,142
489,989
Non-GAAP Adjustments:
RSUs
15,648
12,337
Restricted Stock
409
1,516
Fully diluted weighted-average share count for Adjusted Earnings
495,199
503,842
(1) Primarily consists of contracts to issue shares of BGC common stock.
Note: BGC’s fully diluted weighted-average share count under GAAP may differ from the fully diluted weighted-average share
count for Adjusted Earnings in order to avoid anti-dilution in certain periods.
BGC GROUP, INC.
LIQUIDITY ANALYSIS
(in thousands)
(unaudited)
December 31,
2024
December 31,
2023
Cash and cash equivalents
$
711,584
$
655,641
Financial instruments owned, at fair value
186,197
45,792
Total Liquidity
$
897,781
$
701,433
229
BGC GROUP, INC.
RECONCILIATION OF GAAP NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS TO
ADJUSTED EBITDA
(in thousands)
(unaudited)
FY 2024
FY 2023
GAAP net income (loss) available to common stockholders
$ 126,988
$
36,265
Add back:
Provision for income taxes
49,915
18,934
Net income (loss) attributable to noncontrolling interest in subsidiaries
(3,760)
2,510
Interest expense
91,075
77,231
Fixed asset depreciation and intangible asset amortization
81,434
80,417
Impairment of long-lived assets
746
3,144
Equity-based compensation and allocations of net income to limited partnership
units and FPUs (1)
369,143
355,378
(Gains) losses on equity method investments (2)
(8,430)
(9,152)
Other non-cash GAAP expenses (3)
7,162
9,000
Adjusted EBITDA
$ 714,273
$ 573,727
(1) Represents BGC employees' pro-rata portion of net income and non-cash and non-dilutive charges relating to equity-based
compensation. See Footnote 1 to the table titled “Reconciliation of GAAP Income (Loss) from Operations before Income Taxes
to Adjusted Earnings and GAAP Fully Diluted EPS to Post-Tax Adjusted EPS” for more information.
(2) The full year 2024 and 2023 included non-cash gains of $8.4 million and $9.2 million, respectively, related to BGC's
investments accounted for under the equity method.
(3) The full year 2024 and 2023 included $4.0 million and $9.0 million, respectively, of non-cash reserves in connection with
unsettled trades and receivables with sanctioned Russian entities. The full year 2024 also included $3.2 million of non-cash
charges incurred by the Company for exiting a lease.
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BGC GROUP, INC.
BOARD OF DIRECTORS
Stephen M. Merkel
Chairman of the Board of Directors,
Executive Vice President and General Counsel
Brandon G. Lutnick
Director
William D. Addas
Director
Linda A. Bell
Director
Arthur U. Mbanefo
Director
David P. Richards
Director
BGC GROUP, INC.
MANAGEMENT
John J. Abularrage
Co-Chief Executive Officer
JP Aubin
Co-Chief Executive Officer
Sean A. Windeatt
Co-Chief Executive Officer and
Chief Operating Officer
Stephen M. Merkel
Chairman of the Board of Directors,
Executive Vice President and General Counsel
Jason W. Hauf
Chief Financial Officer
Caroline Aiken Koster
General Counsel, Corporate Responsibility,
Chief Counsel, Securities & Corporate
Governance, Senior Managing Director, and
Corporate Secretary
CORPORATE HEADQUARTERS
499 Park Avenue
New York, NY 10022
T: +1 646 346 7000
INTERNATIONAL HEADQUARTERS
Five Churchill Place
Canary Wharf
London E14 5HU
United Kingdom
T: +44 20 7894 7700
INVESTOR RELATIONS &
REQUESTS FOR ANNUAL REPORT
ON FORM 10-K
Jason Chryssicas
Head of Investor Relations
Copies of the Company’s Annual Report
on Form 10-K, along with news releases,
other recent SEC filings, and general stock
information are available without charge
by going to ir.bgcg.com, or by calling
Investor Relations at +1 212 610 2426, or
by writing to Investor Relations at BGC
Group’s corporate headquarters.
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178-0060
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
One Manhattan West
New York, NY 10001
STOCK LISTING
NASDAQ: BGC
TRANSFER AGENT
Equiniti Trust Company, LLC (“EQ”)
28 Liberty Street, Floor 53
New York, NY 10005
T: +1 800 468 9716
www.equiniti.com
ABOUT BGC GROUP, INC.
BGC Group, Inc. (Nasdaq: BGC) is a
leading global marketplace, data, and
financial technology services company for
a broad range of products, including fixed
income, foreign exchange, energy,
commodities, shipping, equities, and now
includes the FMX Futures Exchange.
BGC’s clients are many of the world’s
largest banks, broker-dealers, investment
banks, trading firms, hedge funds,
governments, corporations, and investment
firms.
BGC and leading global investment banks
and market making firms have partnered
to create FMX, part of the BGC Group of
companies, which includes a U.S. interest
rate futures exchange, spot foreign
exchange platform and the world’s fastest
growing U.S. cash treasuries platform.
For more information about BGC, please
visit https://bgcg.com.
CORPORATE INFORMATION
© 2025 BGC Group, Inc. All rights reserved.
bgcg.com