NEW YORK - BGC Group, Inc. (NASDAQ:BGC), a leading global marketplace and financial technology services company with a market capitalization of $4.28 billion, reaffirmed its financial outlook for the fourth quarter ending December 31, 2024, today. The company has demonstrated strong performance this year, with a 24.5% year-to-date return and impressive revenue growth of 13.1%. InvestingPro subscribers have access to over 30 additional key metrics and exclusive insights about BGC's performance and outlook. The company reiterated the revenue and pre-tax Adjusted Earnings guidance previously stated in its October 31, 2024, financial results press release.
BGC uses non-GAAP financial measures, such as Adjusted Earnings and Adjusted EBITDA, to evaluate its business performance, which exclude certain non-cash items and other expenses that do not involve cash transactions. The company maintains a robust financial position with a "GOOD" overall Financial Health Score according to InvestingPro analysis, supported by an impressive gross profit margin of 89.6%. These measures also adjust for certain gains and charges that management believes do not reflect the company's core operating performance.
The non-GAAP measures exclude equity-based compensation charges, such as the amortization of restricted stock units, restricted stock awards, and other equity-based awards. BGC believes that excluding these items provides a clearer understanding of the company's financial performance and is a better reflection of its ongoing operations.
Adjusted Earnings, in particular, is a metric BGC considers when managing its business, as it excludes non-cash items and expenses that do not dilute existing shareholders. Adjusted Earnings is calculated by taking the most comparable GAAP measures and adjusting for compensation and non-compensation expenses, as well as other income.
The company also provided a rationale for using Adjusted Earnings, highlighting that these figures exclude items that are non-cash in nature, associated with future benefits, or not reflective of BGC's ongoing operations.
BGC's Adjusted EBITDA is another non-GAAP measure provided by the company, which adds back items such as taxes, interest expense, and depreciation to Net income (loss) available to common stockholders. This measure is intended to eliminate the effects of financing, income taxes, and capital spending from the company's operating performance evaluation.
The reaffirmation of the fourth quarter outlook indicates stability in BGC's financial expectations, despite the complexity of forecasting certain GAAP items with precision. The company has not provided specific guidance for other GAAP results, citing the difficulty of accurately predicting equity-based compensation charges and other non-recurring items before the end of each period.
This announcement is based on a press release statement and aims to provide investors with insights into BGC's financial measures and management's approach to evaluating the company's performance. Analysts maintain a positive outlook on BGC, with a consensus price target of $12.00, suggesting potential upside from the current price of $8.92. For comprehensive analysis and detailed valuation metrics, investors can access BGC's full Research Report, one of 1,400+ company reports available exclusively on InvestingPro.
In other recent news, BGC Group reported a record Q3 revenue of $561 million, a 16% increase from the previous year, along with a substantial 24% increase in pre-tax adjusted earnings, which amounted to $126.7 million. These gains are attributed to strategic acquisitions and the successful launch of the FMX Futures Exchange. The company has completed the acquisitions of OTC Global Holdings and Sage (LON:SGE) Energy Partners, projected to add over $450 million in annual revenues. For Q4, BGC anticipates revenues to fall between $545 million and $595 million, with pre-tax adjusted earnings estimated at $122 million to $138 million.
In a move to bolster its financial flexibility, BGC Group has amended its existing credit agreement, increasing its revolving credit commitments to a total of $700 million. This strategic financial maneuver is expected to provide the company with increased liquidity to support its ongoing and future initiatives.
In addition, BGC Group announced that Mike Whitaker has been appointed as Global Chief Information Officer (CIO). Whitaker, with over four decades of experience in financial services and technology, is expected to foster innovation and drive company growth. These are the recent developments for BGC Group.
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