BGC Group, Inc.: Form 10-Q for the period ended Mar 31, 2025

The following discussion of our financial condition and results of operations should be read together with our unaudited Condensed Consolidated Financial Statements and notes to those statements, as well as the cautionary statements relating to forward-looking statements included in this report.

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 three months ended March 31, 2025 and 2024. This discussion is provided to increase the understanding of, and should be read in conjunction with, our unaudited Condensed Consolidated Financial Statements and the notes thereto included elsewhere in this report.

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 multiple 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 Beijing, Bogota, Brisbane, Cape Town, Chicago, Copenhagen, Dubai, Dublin, Frankfurt, Geneva, Hong Kong, Houston, Johannesburg, Madrid, Manila, Melbourne, Mexico City, Miami, Milan, Monaco, Nyon, Palm Beach, Paris, Perth, Rio de Janeiro, Santiago, São Paulo, Seoul, Shanghai, Singapore, Sydney, Tel Aviv, Tokyo, Toronto, Wellington and Zurich.

As of March 31, 2025, we had 2,165 brokers, salespeople, managers, and other front-office personnel across our businesses.

Corporate Conversion

On July 1, 2023, pursuant to the Corporate Conversion Agreement, BGC Partners completed the Corporate 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, in place of BGC Partners’ Class A common stock, under the ticker symbol “BGC.” 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 made pursuant to the Corporate Conversion Agreement which was approved by the Board of Directors of BGC Partners, at the recommendation of the Joint Committee, composed of the Audit Committee and Compensation Committee sitting jointly. The Joint Committee was advised by independent financial and legal advisors selected by the Joint Committee. Houlihan Lokey, Inc., as financial advisor, provided a fairness opinion to the Joint Committee.

The Corporate Conversion was effected pursuant to the terms of the Corporate Conversion Agreement dated as of November 15, 2022 by and among BGC Group, BGC Partners, BGC Holdings, BGC GP, LLC, a Delaware limited liability company and general partner of BGC Holdings, BGC Partners II, Inc., a Delaware corporation and wholly owned subsidiary of BGC Group (“Merger Sub 1”), BGC Partners II, LLC, a Delaware limited liability company and wholly owned subsidiary of BGC Group (“Merger Sub 2”), BGC Holdings Merger Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of BGC Holdings (“Holdings Merger Sub”), and, solely for the purposes of certain provisions therein, Cantor.

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.

As a result of the Corporate Conversion, on July 1, 2023:

• 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 May 9, 2025, the Company has issued approximately $16.8 million of BGC Group Class A common stock in connection with acquisitions since 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.

In connection with the Corporate Conversion on July 1, 2023, the BGC Holdings limited partnership agreement was terminated. There were no limited partnership units of BGC Holdings remaining after the Corporate Conversion was completed.

Recent Board of Directors and Executive Officers Changes

On February 18, 2025, Mr. 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 W. 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 W. Lutnick, to serve as a member of the Board. Additionally, on February 18, 2025 the Company appointed Mr. Stephen 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 W. 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.

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.

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. FMX Futures Exchange launched with five FCMs, Goldman Sachs, J.P. Morgan, Marex, RBC, and Wells Fargo.

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, FMX FX, FMX Futures Exchange, Lucera, PortfolioMatch, Fenics GO, 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 15.6%, to $172.7 million in the first quarter of 2025, as compared to the prior year period.

Within our Fenics businesses, Fenics Markets revenue grew 14.2%, to $145.5 million, in the first quarter of 2025 as compared to the prior year period. Fenics Markets growth was primarily driven by electronic volumes across Rates and Foreign Exchange.

Fenics Growth Platforms revenue grew 23.7%, to $27.1 million, in the first quarter of 2025, as compared to the prior year period, primarily driven by FMX, PortfolioMatch, and Lucera, partially offset by the sale of Capitalab. Excluding Capitalab, Fenics Growth Platforms revenues grew by approximately 30% year-over-year. 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.

The Company continues to invest in our Fenics Growth Platforms, and notable highlights for the first quarter of 2025 compared to the prior year period include:

• FMX UST generated ADV exceeding $60 billion in the first quarter, a 33% increase compared to the prior year period. This growth was driven by strong support from FMX’s Equity Partners, which drove market share to approximately 33% for the first quarter, up from 30% last quarter and 28% a year ago. Notably, FMX daily volume exceeded $100 billion for the first time on February 28th, 2025.
• FMX FX more than doubled its ADV to $14.5 billion in the first quarter, driven by deepening support from FMX’s Equity Partners, as well as onboarding new participants onto the platform.
• FMX Futures Exchange continued to make progress connecting new, large FCMs, while preparing for the launch of U.S. Treasury futures, which following the extreme volatility in April, is scheduled for May 2025. As FMX continues to integrate more FCMs, ADV and open interest on the Exchange are expected to meaningfully accelerate.
• PortfolioMatch ADV doubled due to strong growth across both U.S. and European credit volumes. PortfolioMatch continues to capture market share in this rapidly growing segment of the credit market.
• Lucera, Fenics’ network business providing critical real-time trading infrastructure to the capital markets, increased its revenue by more than 15% and grew its client pipeline for sustained future growth. Lucera plans to launch new Foreign Exchange and Rates products throughout 2025, which are expected to drive new growth opportunities.

Data, network and post-trade revenues increased by 5.2% to $32.5 million. This growth was primarily driven by 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 of 2024. Excluding Capitalab, revenues grew by circa 10% year-over-year.

Fenics brokerage revenues increased by 18.3% to $140.1 million in the first quarter of 2025 over the prior year period.

Fenics’ revenue growth was led by Fenics Rates. Fenics represented 26.0% of BGC’s overall revenue in the first quarter of 2025 compared to 25.8% in the first quarter of 2024.

Acquisitions

On April 1, 2025, the Company completed its acquisition of OTC Global. The Company acquired 100% of the equity in OTC Global and its subsidiaries for total consideration of $325.0 million, which included $322.5 million in cash and $2.5 million of restricted shares of BGC Class A common stock. OTC generated revenues of over $400 million for the year ended December 31, 2024, representing an acquisition multiple of approximately 0.75 times revenue. With the integration of OTC’s complementary product suite, we expect that ECS will become BGC’s largest asset class. This positions us as the world’s largest ECS broker by revenue as of the date of acquisition, making BGC a more comprehensive and diversified company.

On October 1, 2024, the Company completed the acquisition of Sage, an energy and environmental brokerage firm. This acquisition expanded BGC’s energy brokerage services in the U.S. and supported BGC’s global growth efforts across ECS.

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 both the three months ended March 31, 2025 and 2024.

Brands and Trademarks

Amerex, Aurel, Aurel BGC, Caventor, CBID, Conticap, CreditMatch, BGC, BGC Group, BGC Partners, BGC Trader, ELX, EOXLive, Euro Brokers, Fenics, Fenics.com, Fenics Markets Xchange, Fenics Digital, 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, OTC Global Holdings, 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 three months ended March 31, 2025 and 2024, the Company reserved nil and $2.0 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 U.K., Pillar 2 was adopted after royal assent was given in July 2023.

Management performed Pillar 2 calculations for the necessary jurisdictions for the first quarter of 2025 and determined that the minimum global effective tax did not have a material impact on our first quarter 2025 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.

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.

Several factors could influence the financial service industry and our business performance, including general economic conditions, the geopolitical environment, current or expected inflation, interest rate fluctuations, the threat or imposition of broad-based tariffs, market volatility, changes in investment patterns and priorities, regulatory changes, and other factors that are generally beyond our control. Generally, volatility benefits BGC by increasing secondary trading volumes, as market participants seek to hedge their risk or capitalize on price fluctuations. We believe that these activities are most efficiently executed in our wholesale markets, known for their depth and liquidity. Rates of inflation may affect our expenses such as employee compensation and benefits, technology and communication expenses and occupancy costs. We believe any effects of inflation on our results of operations and financial condition have not been significant during any of the periods presented in this Quarterly Report on Form 10-Q.

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 TP ICAP and Tradition across various Voice/Hybrid brokerage marketplaces as well as via Fenics. We also 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. Additionally, we have significantly grown our presence in the energy, commodities and shipping markets, and are competing more with ECS brokers such as Marex, StoneX and Clarksons.

Additionally, there has been an increase in strategic acquisitions of OTC trading platforms by exchanges and electronic marketplaces including 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, government and 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.

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 three months ended March 31, 2025, industry volumes were higher across Rates, ECS, FX, Credit, and Equities compared to the prior year period. BGC’s brokerage revenues were up by 15.7% year-over-year in the quarter, reflecting 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, government and 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 the first quarter of 2025 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 7% compared to the prior year period. Over the same time period, listed products on CME were up 9%, and OTC interest rate derivative volumes traded on SEF were up 10% compared to the first quarter of 2024, according to Clarus. In comparison, our overall Rates revenues were up 14.8%, as compared to a year earlier, to $200.9 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 the first quarter of 2025 compared to the prior year period. CME and ICE energy futures and options volumes were up 20% and 24%, respectively, compared to the prior year period. In comparison, BGC’s ECS revenues increased 26.6%, compared to the prior year period, to $149.9 million.

Foreign Exchange Volumes and Volatility

Global foreign exchange volumes were higher during the first quarter of 2025 compared to the prior year period. Volumes for CME FX futures and options and CME EBS spot FX were up 17%, and 36% respectively, and Cboe FX was up 12%. In comparison, our overall FX revenues increased by 31.0%, compared to the prior year period, to $110.0 million.

Credit Volumes

Our Credit business is impacted by the level of global corporate bond issuance and interest rates. Credit volumes were higher during the first quarter of 2025 compared to the prior year period. FINRA TRACE average daily volume for U.S. Investment Grade was up 11% and U.S. High Yield was up 7% according to Bloomberg. In comparison, our overall Credit revenues decreased by 0.7%, compared to the prior year period, to $86.9 million.

Equities Volumes

Global equity volumes were generally higher during the first quarter of 2025 compared to the prior year period. According to the Securities Industry and Financial Markets Association, or SIFMA, the average daily volume of U.S. cash equities was up 33% as compared to a year earlier. Over the same timeframe, Eurex average daily volumes of equity and equity index derivatives were up 14%, and, according to the OCC, the average daily volume of U.S. options was up 23%. Our Equities business primarily consists of equity derivatives and our overall revenues from Equities increased by 0.1%, compared to the prior year period, to $62.9 million.

LIQUIDITY

See “Liquidity and Capital Resources” herein for information related to our Liquidity and capital resources.

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 March 31, 2025, our front-office headcount was 2,165 brokers, salespeople, managers, and other front-office personnel, up 2.2% from 2,119 a year ago. Compared to the prior year, average revenue per front-office employee for the three months ended March 31, 2025, increased by 12.4%, to $0.3 million.

FINANCIAL HIGHLIGHTS

For the three months ended March 31, 2025 compared to the three months ended March 31, 2024

Income from operations before income taxes was $80.0 million compared to $71.1 million in the prior year period.

Total revenues increased $85.6 million compared to the prior year period, or 14.8%, to $664.2 million, largely due to overall growth of 15.7% in our brokerage revenues:

• ECS increased $31.5 million, or 26.6%;
• Rates increased $25.9 million, or 14.8%;
• FX increased $26.0 million, or 31.0%;
• Credit decreased $0.7 million, or 0.7%; and
• Equities increased $0.1 million, or 0.1%.

In addition, there was an increase of $1.9 million in Interest and dividend income, primarily driven by income earned on bank deposits and money market funds. Further, there was an increase of $1.6 million, or 5.2%, in Data, network and post-trade revenues, primarily driven by 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 of 2024. Revenues for Data, Network and Post-trade, excluding the impact of Capitalab, revenues grew by circa 10% year-over-year.

Total expenses increased $38.5 million, or 7.0%, to $586.5 million compared to the prior year period, primarily driven by an increase in total compensation and employee benefits expenses of $30.0 million. The increase in compensation and employee benefits was primarily due to higher commissionable revenues during the period. The $8.4 million increase in non-compensation expenses was primarily driven by an increase in interest expense related to the BGC Group 6.600% Senior Notes issued in June 2024. The increase in Interest expense was partially offset due to the repayments in full of the $275.0 million of principal amount outstanding under the BGC Credit Agreement on April 1, 2024, as well as the $255.5 million outstanding aggregate principal amount of BGC Group 3.750% Senior Notes and the $44.5 million outstanding aggregate principal amount of BGC Partners 3.750% Senior Notes on October 1, 2024. Non-compensation expenses also increased period over period due to higher Selling and promotion, Commissions and floor brokerage, and Communication costs which were primarily driven by higher revenues.

RESULTS OF OPERATIONS

The following table sets forth our unaudited Condensed Consolidated Statements of Operations data expressed as a percentage of total revenues for the periods indicated (in thousands):

1The components of Equity-based compensation and allocations of net income to limited partnership units and FPUs are as follows (in thousands):

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Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Revenues

Brokerage Revenues

Total brokerage revenues increased by $82.8 million, or 15.7%, to $610.8 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. Commission revenues increased by $79.5 million, or 19.2%, to $494.7 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. Principal transactions revenues increased by $3.2 million, or 2.9%, to $116.1 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Our Rates revenues increased by $25.9 million, or 14.8%, to $200.9 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, reflecting higher volumes across all major interest rate products.

Our ECS revenues increased by $31.5 million, or 26.6%, to $149.9 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, driven by strong growth across environmental and energy transition products, as well as oil and refined products.

Our FX revenues increased by $26.0 million, or 31.0%, to $110.0 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, reflecting broad-based growth across all FX products.

Our Credit revenues decreased by $0.7 million, or 0.7%, to $86.9 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, due to lower Emerging Market and European credit volumes, partially offset by PortfolioMatch volumes and strong U.S. credit activity.

Our Equities revenues increased by $0.1 million, or 0.1%, to $62.9 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, as a result of higher European and U.S. equity volumes being offset by lower Asian equity derivatives volumes.

Fees from Related Parties

Fees from related parties remained flat at $4.4 million for the three months ended March 31, 2025 and 2024.

Data, Network and Post-Trade

Data, network and post-trade revenues increased by $1.6 million, or 5.2%, to $32.5 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. This growth was primarily driven by 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 of 2024. Excluding the impact of Capitalab, revenues grew by circa 10% year-over-year.

Interest and Dividend Income

Interest and dividend income increased by $1.9 million, or 19.1%, to $11.6 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. This was primarily driven by an increase in interest income on government bonds and money market funds versus the year ago period, which were primarily driven by changing interest rates and larger balances.

Other Revenues

Other revenues decreased by $0.6 million, or 11.0% to $4.9 for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily driven by a decrease in consulting income.

Expenses

Compensation and Employee Benefits

Compensation and employee benefits expense increased by $50.8 million, or 17.5%, to $341.6 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. 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 decreased by $20.8 million, or 21.6%, to $75.3 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. For the three months ended March 31, 2025 and 2024, the Company incurred compensation charges of $9.0 million and $25.4 million, respectively, for the acceleration of RSUs and restricted stock awards, respectively, held by former BGC executive officers.

Occupancy and Equipment

Occupancy and equipment expense increased by $1.8 million, or 4.3%, to $42.6 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. This increase was primarily driven by an increase in software licenses and maintenance costs, offset by cost savings for consolidating BGC’s London office space in the third quarter of 2024.

Fees to Related Parties

Fees to related parties increased by $1.1 million, or 15.7%, to $8.4 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. Fees to related parties are primarily 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 $1.4 million, or 9.9%, to $15.7 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, which was primarily driven by an increase in consulting and other professional services and fees.

Communications

Communications expense increased by $0.6 million, or 2.1%, to $30.6 million for the three months ended March 31, 2025 as compared to three months ended March 31, 2024, which was primarily driven by an increase in various terminal and line service costs across market data and communications.

Selling and Promotion

Selling and promotion expense increased by $2.7 million, or 15.9%, to $19.4 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, 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 $0.1 million, or 0.6%, to $17.5 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, which was primarily driven by a higher number of trades in the three months ended March 31, 2025.

Interest Expense

Interest expense increased by $4.5 million, or 22.4%, to $24.7 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, which was primarily driven by BGC 6.600% Senior Notes issued in June 2024. The higher interest expense was partially offset by lower interest due to the repayments in full of the $275.0 million of principal amount outstanding from the BGC Credit Agreement on April 1, 2024, as well as the $255.5 million outstanding aggregate principal amount of BGC Group 3.750% Senior Notes and the $44.5 million outstanding aggregate principal amount of BGC Partners 3.750% Senior Notes on October 1, 2024.

Other Expenses

Other expenses decreased by $3.8 million, or 26.2%, to $10.7 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, which was primarily due to a decrease in reserves related to potential losses associated with Russia’s Invasion of Ukraine.

Other Income (Losses), Net

Gains (Losses) on Equity Method Investments

Gains (losses) on equity method investments increased by $0.6 million, or 31.7%, to $2.4 million for the three months ended March 31, 2025 as compared to a gain of $1.8 million for the three months ended March 31, 2024.

Other Income (Loss)

Other income (loss) decreased by $38.9 million, or 100.3%, to $0.1 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, which was primarily driven by a $36.6 million unrealized gain for the three months ended March 31, 2024 related to fair value adjustments on investments carried under the measurement alternative.

Provision (Benefit) for Income Taxes

Provision (benefit) for income taxes increased by $4.5 million, or 20.4%, to $26.5 million of tax expense for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The increase was primarily driven by a change in executive officers compensation expenses disallowed from a U.S. tax perspective, as well as change in the level, geographical, and business mix of earnings, which impacts 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 $1.6 million, or 926.6%, to a loss of $1.7 million for the three months ended March 31, 2025 as compared to a loss of $0.2 million for the three months ended March 31, 2024.

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.

81

The table below details our brokerage revenues by product category for the indicated periods (dollar amounts in thousands):

1Includes 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 March 31, 2025 were $4.9 billion, an increase of 36.0% as compared to December 31, 2024. The increase in total assets was driven primarily by an increase in Receivables from broker-dealers, clearing organizations, customers and related broker-dealers, Cash and cash equivalents, Accrued commissions and other receivables, net, Loans, forgivable loans and other receivables from employees and partners, 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 March 31, 2025 of $966.4 million, and our Liquidity as of March 31, 2025 of $1,146.1 million. See “Liquidity Analysis” below for a further discussion of our Liquidity and a reconciliation to the most comparable GAAP financial measure and discussion of changes in our Liquidity from March 31, 2025 to May 9, 2025. Our Financial instruments owned, at fair value, were $179.7 million as of March 31, 2025, compared to $186.2 million as of December 31, 2024.

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 March 31, 2025 and December 31, 2024, there were no Reverse Repurchase Agreements outstanding. As of both March 31, 2025 and December 31, 2024 there were no securities loaned outstanding.

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 March 31, 2025 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 March 31, 2025 and December 31, 2024, 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 $1,146.1 million as of March 31, 2025, 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 three months ended March 31, 2025, we repurchased 2.4 million shares of BGC Class A common stock for aggregate consideration of $23.1 million, representing a weighted-average price per share of $9.45.

On May 6, 2025, our Board declared a $0.02 dividend for the first quarter of 2025. Our current capital allocation priorities are to return capital to stockholders and to continue investing in the growth of our business.

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 March 12, 2025, we borrowed $25.0 million under the Revolving Credit Agreement for general corporate purposes, and on March 31, 2025, we borrowed $325.0 million under the Revolving Credit Agreement and used a portion of the proceeds from such borrowing to acquire OTC Global.

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 the 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 March 31, 2025 and December 31, 2024, there were $550.0 million and $200.0 million, respectively, of borrowings outstanding under the Revolving Credit Agreement. During the three months ended March 31, 2025 and 2024, the Company recorded interest expense related to the Revolving Credit Agreement of $4.0 million and $3.7 million, respectively.

On April 3, 2025, the Company repaid in full the $550.0 million of borrowings outstanding under the Revolving Credit Agreement.

See Note 17—“Notes Payable and Other Borrowings” to our unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q 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 both March 31, 2025 and 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 three months ended March 31, 2024. See Note 13—“Related Party Transactions,” and Note 17—“Notes Payable and Other Borrowings” to our unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for information regarding our BGC Credit Agreement with Cantor.

On April 4, 2025, Cantor borrowed $120.0 million from the Company under the BGC Credit Agreement. On April 14, 2025, Cantor made a partial repayment of $15.0 million to the Company of the $120.0 million borrowed from the Company under the BGC Credit Agreement. As of May 9, 2025, $105.0 million of borrowings remained outstanding under the BGC Credit Agreement. The borrowing rate as of May 9, 2025 was 6.18%.

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 “Market-Making Registration Statement” below.

See Note 17—“Notes Payable and Other Borrowings” to our unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for information regarding our Exchange Offer.

3.750% Senior Notes due October 1, 2024

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 were general senior unsecured obligations of BGC Group, was $255.5 million as of March 31, 2024. BGC Group recorded interest expense related to the BGC Group 3.750% Senior Notes of $2.6 million during the three months ended March 31, 2024.

The outstanding aggregate principal amount of BGC Partners 3.750% Senior Notes, which were general senior unsecured obligations of BGC Partners, was $44.5 million as of March 31, 2024. BGC Partners recorded interest expense related to the BGC Partners 3.750% Senior Notes of $0.4 million during the three months ended March 31, 2024.

4.375% Senior Notes due December 15, 2025

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 March 31, 2025 and December 31, 2024. BGC Group recorded interest expense related to the BGC Group 4.375% Senior Notes of $3.3 million and $3.3 million, respectively, for the three months ended March 31, 2025 and 2024.

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 March 31, 2025 and December 31, 2024. BGC Partners recorded interest expense related to the BGC Partners 4.375% Senior Notes of $0.1 million and $0.1 million, for the three months ended March 31, 2025 and 2024, respectively.

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 March 31, 2025 and December 31, 2024. BGC Group recorded interest expense related to the BGC Group 8.000% Senior Notes of $7.1 million for both the three months ended March 31, 2025 and 2024, respectively.

On August 21, 2024, the Company repurchased $0.5 million of outstanding principal, 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 as of both March 31, 2025 and December 31, 2024. BGC Partners recorded interest expense related to the BGC Partners 8.000% Senior Notes of nil and $0.1 million, for the three months ended March 31, 2025 and 2024, respectively.

6.600% Senior Notes due June 10, 2029

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 both March 31, 2025 and December 31, 2024. BGC Group recorded interest expense related to the BGC Group 6.600% Senior Notes of $8.5 million for the three months ended March 31, 2025.

See Note 13—“Related Party Transactions” and Note 17—“Notes Payable and Other Borrowings” to our unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for information regarding our 3.750% Senior Notes, 4.375% Senior Notes, 8.000% Senior Notes, and BGC Group 6.600% Senior Notes.

6.150% Senior Notes due April 2, 2030

On April 2, 2025, we issued an aggregate of $700.0 million principal amount of BGC Group 6.150% Senior Notes. The BGC Group 6.150% Senior Notes are general senior unsecured obligations of the Company. The BGC Group 6.150% Senior Notes bear interest at a rate of 6.150% per year, payable in cash on April 2 and October 2 of each year, commencing October 2, 2025. The BGC Group 6.150% Senior Notes will mature on April 2, 2030. We may redeem some or all of the notes at any time or from time to time for cash at certain “make-whole” redemption prices (as set forth in the indenture related to the BGC Group 6.150% Senior Notes). If a “Change of Control Triggering Event” (as defined in the indenture related to the BGC Group 6.150% Senior Notes) occurs, holders may require the Company 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 not excluding, the purchase date. The initial carrying value of the BGC Group 6.150% Senior Notes was $692.8 million, net of discount and debt issuance costs of $7.2 million, of which $0.4 million were underwriting fees payable to CF&Co. The Company intends to use the net proceeds to repurchase, redeem and/or repay at maturity all $288.2 million outstanding aggregate principal amount of BGC Partners 4.375% Senior Notes and all $11.8 million outstanding aggregate principal amount of the BGC Partners 4.375% Senior Notes, in each case including to pay any applicable redemption premium.

In connection with the issuance of the BGC Group 6.150% Senior Notes, on April 2, 2025, we entered into a Registration Rights Agreement with the initial purchasers in the offering of the BGC Group 6.150% Senior Notes, including CF&Co, pursuant to which we are obligated to file a registration statement with the SEC with respect to an offer to exchange the BGC Group 6.150% Notes for a substantially identical issue of notes registered under the Securities Act and to complete such exchange offer prior to 365 days after April 2, 2025.

Weighted-average Interest Rate

For the three months ended March 31, 2025 and 2024, 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 6.35% and 5.51%, respectively.

Short-term Borrowings

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 $8.7 million (BRL 50.0 million). On August 20, 2021, the agreement was renegotiated, increasing the credit line to $10.4 million (BRL 60.0 million). On May 22, 2023 the agreement was renegotiated, increasing the credit line to $12.2 million (BRL 70.0 million). This agreement is renewable every 90 days and the next maturity date is August 7, 2025. The agreement bears a fee of 1.32% per year. As of both March 31, 2025 and December 31, 2024, there were no borrowings outstanding under this agreement. The bank fees related to the agreement were nil for each of the three months ended March 31, 2025 and 2024.

See Note 17—“Notes Payable and Other Borrowings” to our unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for information regarding our short-term borrowings.

Market-Making Registration Statement

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 of our 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.

DEBT REPURCHASE PROGRAM

See Note 13—“Related Party Transactions” to our unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q 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 three months ended March 31, 2025

The table below presents our Liquidity Analysis as of March 31, 2025 and December 31, 2024:

(in thousands)

The $248.3 million increase in our Liquidity position from $897.8 million as of December 31, 2024 to $1,146.1 million as of March 31, 2025 was primarily related to the draw down of $350.0 million under the Revolving Credit Agreement. The remaining movement in Cash and cash equivalents balance is primarily due to share repurchases of $23.1 million, capitalized expenditures of $15.5 million, dividends to stock-holders of $9.9 million, tax payments and ordinary movements in working capital. Financial instruments owned at fair value decreased from $186.2 million as of December 31, 2024 to $179.7 million as of March 31, 2025 due to the sale of treasury bills during the three months ended March 31, 2025.

Material movements in the Company’s Liquidity position from April 1, 2025 through May 9, 2025 included the following:

• $692.8 million net proceeds received from the issuance of the BGC Group 6.150% Senior Notes
• $550.0 million full repayment of the borrowings outstanding under the Revolving Credit Agreement
• $318.9 million of cash payments related to the acquisition of OTC Global, which had a total consideration of $325.0 million composed of $322.5 million in cash and $2.5 million in restricted shares of BGC Class A common stock
• $120.0 million loan to Cantor under the BGC Credit Agreement of which Cantor partially repaid $15.0 million

CREDIT RATINGS

As of March 31, 2025, our public long-term credit ratings and associated outlooks were as follows:

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 three months ended March 31, 2025 and 2024, the Company was charged $0.9 million and $1.0 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 March 31, 2025 and December 31, 2024 at a fair value of $115.9 million and $124.6 million, respectively.

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.

The majority of our foreign subsidiaries are subject to regulation by the relevant authorities in the countries in which they do business. 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 unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details on our regulatory requirements.

As of March 31, 2025, $763.7 million of net assets were held by regulated subsidiaries. As of March 31, 2025, these subsidiaries had aggregate regulatory net capital, as defined, in excess of the aggregate regulatory requirements, as defined, of $437.3 million.

See “Regulation” included in Part I, Item 1 of our Annual Report on Form 10-K for the year ended December 31, 2024 for additional information related to our regulatory environment.

EQUITY

As of March 31, 2025, we had 378.1 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 unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

The weighted-average share counts, including securities that were anti-dilutive for our earnings per share calculations, for the three months ended March 31, 2025 were as follows (in thousands):

1Common 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 three months ended March 31, 2025, the weighted-average number of shares of BGC Class A common stock was 369.6 million, the weighted-average number of shares of BGC Class B common stock was 109.5 million, and the weighted-average number of contingent shares of our Class A common stock for which all necessary conditions have been satisfied except for the passage of time was 0.1 million.

2For the three months ended March 31, 2025, 16.0 million of 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 three months ended March 31, 2025 included 15.6 million of participating RSUs and 0.4 million of participating restricted shares of BGC Class A common stock. Also as of March 31, 2025, 53.3 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 unaudited Condensed Consolidated Statements of Financial Condition as of March 31, 2025.

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 March 31, 2025, 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 our unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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 and 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 March 31, 2025, the Company had issued an aggregate of 3.7 million shares of BGC Class A common stock under the 2019 Form S-4 Registration Statement.

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 March 31, 2025, the Company had issued 0.9 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 March 31, 2025, 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 434.2 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 $46.4 million in cash that may be issued contingent on certain targets being met through 2029.

As of March 31, 2025, the Company has issued 2.3 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 March 31, 2025, there are 0.1 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 2.0 million shares of BGC Class A common stock which will be issued if related targets are met and $7.6 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, the defendants filed a motion to dismiss the complaint. In response, the plaintiffs filed an amended complaint. On July 14, 2023, the 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 the defendants’ motion to dismiss the second amended complaint in its entirety. On December 16, 2024, the 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 stockholder, Martin J. Siegel, filed a putative class action lawsuit against Cantor Fitzgerald, L.P. and Mr. Howard W. Lutnick in the Delaware Court of Chancery, asserting that the Corporate Conversion was unfair to Class A stockholder 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. The defendants moved to dismiss the complaint on April 22, 2024. The motion was argued at a hearing on January 9, 2025. On April 10, 2025, the court issued its decision dismissing the complaint in full on the grounds that the plaintiff’s claim is derivative in nature and the plaintiff failed to make a demand on the Board or plead that such a demand was futile. While the plaintiff may appeal the court’s decision, the Company believes any such appeal would lack merit.

CERTAIN RELATED PARTY TRANSACTIONS

On April 4, 2025, Cantor borrowed $120.0 million from us under the BGC Credit Agreement. The borrowing rate as of April 4, 2025 was 6.17%. Cantor partially repaid us $15.0 million on April 14, 2025.

On April 2, 2025, BGC Group issued an aggregate of $700.0 million principal amount of BGC Group 6.150% Senior Notes. $0.4 million of underwriting fees were payable to CF&Co.

For additional information on our related party transactions, see Note 13—“Related Party Transactions” to our unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

MARKET SUMMARY

The following table provides certain volume and transaction count information for the quarterly periods indicated:

1Includes 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 $15.9 trillion for the three months ended March 31, 2025, compared to $15.9 trillion for the three months ended March 31, 2024. Our Hybrid volume for the three months ended March 31, 2025 was $65.8 trillion, compared to $65.8 trillion for the three months ended March 31, 2024.

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 unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information related to our investments in unconsolidated entities.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

A summary of our “Critical Accounting Policies and Estimates” is included in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2024. There were no significant changes made to the Company’s critical accounting policies from those reported in our Annual Report on Form 10-K for the year ended December 31, 2024.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 1—“Organization and Basis of Presentation” to our unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for information regarding recent accounting pronouncements.

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 3.2 million shares during the three months ended March 31, 2025.

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.

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 March 31, 2025, there were 431.4 million shares of BGC Class A common stock issued and 378.1 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 March 31, 2025, Cantor and CFGM held an aggregate of 96.3 million shares of BGC Class B common stock, representing 88.0% of the outstanding shares of BGC Class B common stock and approximately 65.4% of our total voting power. As of March 31, 2025, Mr. Howard W. Lutnick and individuals related to Mr. Howard W. Lutnick owned 13.1 million shares of our outstanding Class B common stock, representing 12.0% of the outstanding shares of BGC Class B common stock and approximately 8.9% of our total voting power. Together, Cantor, CFGM, Mr. Howard W. Lutnick and individuals related to Mr. Howard W. Lutnick owned 109.5 million of the outstanding shares of BGC Class B common stock, representing 100% of the outstanding shares of BGC Class B common stock and approximately 74.3% 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. Howard W. Lutnick and individuals related to Mr. Howard W. Lutnick converted all of their BGC Class B common stock into BGC Class A common stock on March 31, 2025, Cantor would have held 19.1% of the voting power of our outstanding capital stock, CFGM would have held 0.6% of the voting power, Mr. Howard W. Lutnick and individuals related to Mr. Howard W. Lutnick would have held 6.3% of the voting power, and the public stockholders would have held 74.0% of the voting power of our outstanding capital stock (and Cantor and CFGM’s indirect economic interests in BGC U.S. OpCo and BGC Global OpCo 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 May 9, 2025, the Company has issued approximately $16.8 million of BGC Group Class A common stock in connection with acquisitions since the Corporate Conversion.

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.

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.

Corporate Conversion

See “Overview and Business Environment” herein for information related to Corporate Conversion.

Structure of BGC Group, Inc. as of March 31, 2025

The following diagram illustrates our organizational structure as of March 31, 2025. 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, 3.5 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) 4.1 million assumed RSUs; (c) 32.0 million RSUs converted from former partners’ units in BGC Holdings; (d) 32.7 million RSUs issued in relation to employee compensation; (e) 4.1 million contingent shares to be issued to terminated employees per their respective separation agreements; and (f) 0.1 million contingent shares issued in exchange for acquisition units.

1 Percentage includes restricted shares issued in exchange for former partners’ units in BGC Holdings.

2 BGC Partners is a wholly owned subsidiary of BGC Group and consolidated with other wholly and non wholly-owned subsidiaries.

3 Public Stockholders includes unrestricted shares of our Class A common stock owned by current employees due to an inability to track such shares once they leave the Company’s transfer agent, as well as the holdings of our former Chief Executive Officer, Mr. Howard W. Lutnick, as he has stepped down from his positions with the Company.

4 For the purposes of this diagram, Cantor includes Cantor Fitzgerald, L.P. and CFGM. Cantor Fitzgerald, L.P. owns 19.3% of the economics and 63.4% of the voting power in BGC Group. CFGM owns 0.6% of the economics and 2.0% of the voting power in BGC Group.

The diagram reflects the following activity of BGC Class A common stock from December 31, 2024 through March 31, 2025 as: (a) the restrictions released on 3.0 million shares of BGC Class A common stock; (b) 3.2 million shares of BGC Class A common stock repurchased by us; (c) 4.8 million shares of BGC Class A common stock issued for vested RSUs; (d) 0.4 million shares of BGC Class A common stock issued for contingent shares issued in exchange for acquisition units; (e) 0.2 million shares of BGC Class A common stock issued for contingent shares issued in exchange for former partners’ units in BGC Holdings; (f) 0.3 million shares of BGC Class A restricted common stock forfeited by former partners and employees; and (g) 1.9 million shares of BGC Class A common stock issued for compensation. 0.4 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 December 31, 2024 and March 31, 2025; 16.3 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 December 31, 2024 and March 31, 2025; 9.1 million of such shares remain available for issuance by us under the DRIP Registration Statement.

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.

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 unaudited Condensed 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 $179.7 million as of March 31, 2025. 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 unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q 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 unaudited Condensed Consolidated Financial Condition and Results of Operations for any particular reporting period.

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 or other failures of our or third party information technology systems, 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 March 31, 2025, 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 $4.8 million.

Interest Rate Risk

BGC had $1,149.5 million in fixed-rate debt outstanding as of March 31, 2025. 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. As of March 31, 2025, BGC had $550.0 million of 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 March 31, 2025, 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 for the three months ended March 31, 2025 would have declined by $0.5 million if interest rates increased by an additional 1%.

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 March 31, 2025. 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 March 31, 2025.

Changes in Internal Control over Financial Reporting

During the three months ended March 31, 2025, 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.

There have been no material changes to the risk factors previously disclosed under Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 3, 2025.