BGC Group's Quarterly Profit More Than Doubles on Record Revenue and Fanatics Sale
BGC Group's third-quarter net income more than doubled, driven by record revenue and a $35 million gain from selling two prediction-market units to Fanatics.
Record revenue and a one-off gain from selling two prediction-market units to Fanatics lifted BGC Group's third-quarter net income more than double to $68.7 million.
The New York-based interdealer broker reported a $35 million gain on the sale of Water Street Labs and CX Clearinghouse to Fanatics, alongside a 13% rise in total revenue to $832.6 million.
Adjusted earnings before tax rose 20.9% to $187.5 million, excluding the one-time Fanatics gain, while total GAAP expenses grew 11% to $783.5 million.
Fastest-Growing Currency Venue
Foreign exchange brokerage revenue increased 13.9% to $121.5 million, with BGC's electronic currency venue FMX FX driving the growth.
Average daily volume on FMX FX jumped 43% to $18.7 billion in the three months to September 30, outpacing larger rivals like Cboe FX and Euronext FX.
Spot FX and non-deliverable forwards were the primary drivers of the surge, with FMX FX's 43% growth rate about twice that of Cboe FX, which averaged $56.8 billion a day.
Co-Chief Executive Officer John Abularrage pointed to BGC's technology bets, "from our first fully AI-brokered institutional trade to our prediction markets partnership with Fanatics."
Treasury Futures Surge
Revenue from FMX, BGC's Treasury cash platform, grew more than 35% to $30.5 million, with average daily volume reaching $83.0 billion, up 40%.
The platform's share of the central limit order book market rose to 42% from 37%, and its US Treasury cash platform averaged $83.0 billion a day, up 40%.
The FMX Futures Exchange, which won CFTC approval for Treasury and SOFR futures, averaged more than 80,000 contracts a day, nearly seven times the level a year earlier.
September averaged 112,000 contracts a day after FMX listed the full Treasury futures curve in August, with its electronic business Fenics growing revenue 13.3% to $181.3 million.
Leadership Changes and Outlook
JP Aubin will step down as co-chief executive at the end of the year, leaving John Abularrage and Sean Windeatt as the sole co-CEOs.
For the fourth quarter, BGC forecasts revenue of $805 million to $865 million, against $756.4 million a year earlier, and pre-tax adjusted earnings of $178 million to $196 million.
The board declared a quarterly dividend of $0.02 per share, payable on December 9 to shareholders of record on November 25.
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