NEW YORK - BGC Group, Inc. (NASDAQ:BGC), a leading global marketplace and financial technology services company, today announced that it expects its third-quarter revenue and pre-tax adjusted earnings for 2024 to be at the high end of its previously stated outlook ranges. This forecast aligns with the company's outlook provided in its financial results press release on July 30, 2024.
The updated outlook is based on non-GAAP financial measures, which BGC uses to evaluate its financial performance. These measures, including pre-tax adjusted earnings and post-tax adjusted earnings to fully diluted shareholders, are intended to provide a clearer understanding of the company's operating earnings and financial condition.
BGC's non-GAAP financial measures exclude certain items such as non-cash equity-based compensation charges, charges related to amortization of intangibles from acquisitions, and other items that management believes do not reflect the company's underlying business performance. The company believes that adjusted earnings more accurately represent the operating earnings generated on a consolidated basis and are the earnings considered by management in conducting its business.
The company's equity-based compensation program is designed to align the interests of employees and management with those of common stockholders and to motivate key employees. BGC's fully diluted share count for adjusted earnings includes all share equivalents that are part of the equity-based compensation program.
BGC also uses adjusted EBITDA, another non-GAAP financial measure, to evaluate its operating performance. This measure adds back items such as income taxes, interest expense, and depreciation, which can vary significantly between companies and can obscure underlying operating performance.
The announcement today is based on a press release statement and includes forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially. BGC undertakes no obligation to update these forward-looking statements except as required by law. Investors and stakeholders are advised to consult BGC's SEC filings for further details on risk factors.
BGC Group operates globally, offering a range of products and services including fixed income, foreign exchange, commodities, and equities, and has recently expanded to include the FMX Futures Exchange. The company's clients include some of the world's largest financial institutions and investment firms.
In other recent news, BGC Group has reported a 12% increase in revenue and a 19% rise in earnings in its second-quarter earnings call. The company's FMX platform saw substantial volume growth in US treasuries and foreign exchange trading. BGC Group is preparing to launch SOFR futures in September and UST futures in the first quarter of 2025, signaling a strategic move to compete with CME Group (NASDAQ:CME) in the interest rate futures market.
The company confirmed the re-election of its five-member board of directors and the approval of executive compensation at its annual stockholders' meeting. Ernst & Young LLP was ratified as the company's independent auditor for the fiscal year ending December 31, 2024.
Piper Sandler has shown confidence in BGC Group, raising its price target on the company's stock to $11.50 from $10.00, while maintaining an Overweight rating. This upgrade followed BGC Group's Chairman and CEO, Howard Lutnick's announcement of the upcoming product launches and competitive strategy.
BGC Group has initiated an exchange offer for its 6.6% Senior Notes due 2029. This offer, which is not a new financing transaction, allows holders of the outstanding "Old Notes" to exchange them for an equal amount of newly registered 6.6% Senior Notes due 2029. BGC Group also provided Q3 guidance with total revenue expected to be between $505 million and $555 million, and pretax adjusted earnings ranging from $110 million to $127 million. These are recent developments in the company's financial and strategic positioning.
InvestingPro Insights
BGC Group's positive outlook for its third-quarter revenue and pre-tax adjusted earnings aligns with its strong financial performance in recent quarters. According to InvestingPro data, BGC has demonstrated impressive revenue growth, with a 12.76% increase over the last twelve months as of Q2 2024. This growth trend is further supported by a robust quarterly revenue growth of 11.84% in Q2 2024.
The company's financial health is reflected in its market capitalization of $4.47 billion, indicating substantial investor confidence. BGC's gross profit margin stands at an impressive 89.49%, showcasing its ability to maintain profitability in its operations.
InvestingPro Tips highlight BGC's strong performance, noting that the company has demonstrated consistent revenue growth over the past year. This trend aligns with the optimistic outlook provided in the company's recent announcement. Additionally, BGC's stock has outperformed the market over the past year, with a remarkable 77.25% price total return, suggesting investor recognition of the company's solid financial performance and growth prospects.
For investors seeking a more comprehensive analysis, InvestingPro offers 14 additional tips for BGC Group, providing deeper insights into the company's financial health and market position.
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