BGC Group earned $0.28 a share in Q2, beating its own forecasts. FMX generated first revenue, and the SEC's T+1 plan could widen BGC's moat, Windeatt said. Dividend raised 6%.
BGC Group posted a record second quarter on Tuesday. Revenue rose 13% to $579 million, and adjusted earnings came in at $0.28 a share, up from $0.23 a year earlier. The brokerage firm beat its own internal forecasts even as industry volumes in its core rates and credit markets declined.
Sean Windeatt, BGC's COO and co-CEO, said on the call that the all-time record revenue came despite a drop in rates and credit volumes. Commodities, energy and foreign exchange desks filled the gap, he said.
The FMX Futures exchange, launched last year to take on CME Group in U.S. Treasury futures, generated revenue for the first time. The platform now has 50 market-making firms trading on it. Daily average volume in U.S. Treasury futures reached about 30,000 contracts in June, up from roughly 15,000 in March.
“We are seeing the early signs of network effects,” Windeatt said. “The more liquidity we add, the more firms want to trade.”
BGC raised its quarterly dividend 6% to $0.19 a share. Adjusted EBITDA rose 21% to $136 million. Operating expenses increased 11%, below the revenue growth rate.
The company signaled that a regulatory shift could widen its competitive moat. The SEC has proposed moving to a T+1 settlement cycle for U.S. Treasuries, compressing the time between trade and settlement. Windeatt said the shorter timeline makes electronic matching more valuable. The proposal is not yet final. Implementation could come in 2028.
Jason Hauf, BGC's CFO, said the firm's cost discipline remains in place. Net debt stood at $1.1 billion, flat with the prior quarter. The company continues to invest in FMX and its technology platform without taking on leverage, he said.
BGC expects FMX to reach profitability by the end of 2027. The company did not provide formal guidance for the third quarter, a standard practice. Management said the current quarter should build on the first half's momentum, with particular strength in commodities and post-trade segments.
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