Today, BGC Group, Inc. (Nasdaq: BGC), announced that it has updated its outlook and provided an update on the expected timing of the upcoming FMX announcements for the quarter ending December 31, 2023.
A revised outlook for BGC in the fourth quarter of 2023 is expected to be at the high end of the previously stated ranges for revenue and pre-tax Adjusted Earnings. The Company's outlook was included in the BGC's financial results press release issued on October 30, 2023, which is available on the company's website at http://ir.bgcg.com.
According to Howard W. Lutnick, Chairman and CEO of BGC Group, a leading global broker and financial technology firm, "The company's performance throughout the fourth quarter was strong." The company expects to report double-digit revenue and pre-tax Adjusted Earnings growth for both the fourth quarter and for the entire year 2023."
According to Howard W. Lutnick, we've made significant progress with FMX on multiple fronts throughout the quarter and we expect to have CFTC regulatory approval and announce our strategic partners during the first quarter of 2024.
A description of non-GAAP financial measures is provided below. These definitions include references to certain equity-based compensation instruments, including restricted stock awards and/or restricted stock units ("RSUs"), which the Company issued and outstanding following its corporate conversion on July 1, 2023.. In spite of the fact that BGC is maintaining certain defined terms and references, including references to partnerships or partnership units, for the purposes of comparability before and after the corporate conversion, such references may not be relevant once the period ended June 30, 2023 has ended.
In spite of the fact that BGC is maintaining certain defined terms and references, including references to partnerships or partnership units, for the purposes of comparability before and after the corporate conversion, such references may not be relevant once the period ended June 30, 2023 has ended.
There has been a clarification of the Company's practice in the form of an updated definition of its "Calculation of Non-Compensation Adjustments for Adjusted Earnings". BGC has not made any modifications to prior period non-GAAP measures as a result of this clarification.
In this document, we present non-GAAP financial measures that are not comparable to the most directly comparable measures calculated and presented in accordance with Generally Accepted Accounting Principles in the United States ("GAAP").. Non-GAAP financial measures that the Company uses include "Adjusted Earnings before noncontrolling interests and taxes", which is interchangeable with "pre-tax adjusted earnings"; "Adjusted EBITDA"; "Liquidity"; "Constant Currency"; and "Post-tax Adjusted Earnings to fully diluted shareholders", both of which can be interchangeable with "post-tax Adjusted Earnings"; and "Post-tax Adjusted Earnings to fully diluted shareholders".. In the following section, you will find a definition of each of these terms
In the following section, you will find a definition of each of these terms
The Adjusted Earnings Defined section of BGC's financial statement uses non-GAAP financial measures, such as "Adjusted Earnings before non-controlling interests and taxes" as well as "Post-tax Adjusted Earnings to fully diluted shareholders", which are used in the evaluation of the financial performance of the Company and its consolidated subsidiaries as supplemental measures of operating results.. The Company believes that Adjusted Earnings are the most accurate indicator of the operating earnings generated by the Company based on a consolidated basis, and are the earnings that management considers when deciding how to manage its business.
The Company believes that Adjusted Earnings are the most accurate indicator of the operating earnings generated by the Company based on a consolidated basis, and are the earnings that management considers when deciding how to manage its business.
According to GAAP, "Income (loss) from operations before income taxes" and "Net income (loss) for fully diluted shares," both are prepared in accordance with GAAP, respectively. In order to calculate Adjusted Earnings, certain non-cash items and other expenses are excluded that are generally not the result of the Company receiving or outlaying cash and/or do not dilute existing stockholders.. Additionally, Adjusted Earnings calculations exclude certain gains and charges that management believes do not accurately reflect the underlying operating performance of BGC as a whole.. A company's Adjusted Earnings are calculated by taking the most comparable GAAP measures and adjusting them for certain items related to compensation expenses, non-compensation expenses, and other income, as will be discussed below, in addition to GAAP measures.
A company's Adjusted Earnings are calculated by taking the most comparable GAAP measures and adjusting them for certain items related to compensation expenses, non-compensation expenses, and other income, as will be discussed below, in addition to GAAP measures.
Calculation of the Compensation Adjustments for Adjusted Earnings and Adjusted EBITDA based on Adjusted Earnings
Treatment of Equity-Based Compensation Line Item for Adjusted Earnings and Adjusted EBITDAThe Company's Adjusted Earnings and Adjusted EBITDA measures exclude all GAAP charges included in the line item "Equity-based compensation, dividend equivalents and allocations of net income to limited partnership units and FPUs" (or "equity-based compensation" for purposes of defining the Company's non-GAAP results) as recorded on the Company's GAAP Consolidated Statements of Operations and GAAP Consolidated Statements of Cash Flows. As a result of these GAAP equity-based compensation charges, the following items have been taken into account:
As a result of these GAAP equity-based compensation charges, the following items have been taken into account:
It is important to note that the amounts of certain quarterly equity-based compensation charges are based on the Company's estimate of such expected charges for the following year, as described further below under the heading "Methodology for Calculating Adjusted Earnings Taxes.".
The majority of BGC's key executives and producers own equity stakes in the Company and its subsidiaries, and as part of their annual compensation, they generally receive deferred equity in the Company and its subsidiaries.. It should be noted that many of BGC's fully diluted shares are owned by the company's executives, partners, and employees. There are several forms of equity-based compensation that are issued by the Company, including RSUs, restricted stock, limited partnership units (prior to July 1, 2023) and grants of exchangeability into common stock (prior to July 1, 2023). To provide liquidity to employees, to align the interests of its employees and management with the interests of its stockholders, to help motivate and retain key employees, and to foster an environment that encourages cross-selling and revenue growth by encouraging a collaborative culture.
There are several forms of equity-based compensation that are issued by the Company, including RSUs, restricted stock, limited partnership units (prior to July 1, 2023) and grants of exchangeability into common stock (prior to July 1, 2023). To provide liquidity to employees, to align the interests of its employees and management with the interests of its stockholders, to help motivate and retain key employees, and to foster an environment that encourages cross-selling and revenue growth by encouraging a collaborative culture.
As part of the equity-based compensation program of the Company, all share equivalents that can be exchanged for common stock, including REUs, PSUs, LPUs, HDUs, and other units that may be exchanged, are included in the fully diluted share count when issued or at the beginning of the following quarter after the date of grant. RSUs (which are recorded using the treasury stock method) are included in the fully diluted share count as soon as they are issued or as soon as they are granted.
In addition to the compensation charges, certain other cash and non-cash items are also adjusted.
For Adjusted Earnings, certain other compensation-related adjustments may be taken into account. BGC also excludes a number of other GAAP items that management believes do not accurately reflect the performance of the Company over a particular period when calculating Adjusted Earnings. A number of these items may be related to compensation-related cost-saving initiatives, such as severance charges that may be incurred as a result of headcount reductions as part of a broad restructuring or cost-saving plan. 
Calculation of Non-Compensation Adjustments for Adjusted Earnings It is also possible for Adjusted Earnings calculations to exclude items such as:
Adjustments for Other (income) Losses for Adjusted Earnings In addition to the adjustments for other (income) losses, Adjusted Earnings calculations also exclude the gains from litigation resolutions and other noncash, non-dilutive, and/or non-economic items, which may, in some periods, include:
There is a method for calculating Adjusted Earnings Taxes, even though they are calculated on a pre-tax basis. However, BGC also reports the Adjusted Earnings to fully diluted shareholders after taxes are deducted. Post-tax Adjusted Earnings to fully diluted shareholders are defined as pre-tax Adjusted Earnings reduced by the non-GAAP tax provision described below, and net income (loss) attributable to noncontrolling interests as a portion of Adjusted Earnings.
According to GAAP, the Company calculates its tax provision for post-tax Adjusted Earnings using an annual estimate that is similar to the method it uses to calculate its income tax provision under GAAP.. BGC calculates its quarterly tax provision under GAAP by estimating the full fiscal year GAAP income (loss) from operations before income taxes, noncontrolling interests in subsidiaries, as well as the expected inclusions and deductions for tax purposes, including the anticipated equity-based compensation that will be paid during the period of year.. The annualized tax rate resulting from this calculation is applied to BGC's quarterly GAAP profit (loss) before income taxes and noncontrolling interests in subsidiaries before income taxes. As soon as the end of the annual period approaches, the Company updates its estimate so that it reflects the actual tax amounts that are due for the year
As soon as the end of the annual period approaches, the Company updates its estimate so that it reflects the actual tax amounts that are due for the year
Accordingly, to determine the non-GAAP tax provision, BGC first adjusts the pre-tax Adjusted Earnings by recognizing any, and only those, amounts for which a tax deduction is available under the applicable law in order to determine the non-GAAP tax provision. This amount includes charges related to equity-based compensation and certain charges related to employee loan forgiveness, as well as certain net operating loss carryforwards when taken for statutory purposes, as well as certain charges related to tax goodwill amortization.. These adjustments may also reflect timing and measurement differences, including treatment of employee loans; changes in the value of units between the dates of grants of exchangeability and the date of actual unit exchange; changes in the value of RSUs and/or restricted stock awards between the date of grant and the date the award vests; variations in the value of certain deferred tax assets; and liabilities and the different timing of permitted deductions for tax under GAAP and statutory tax requirements
These adjustments may also reflect timing and measurement differences, including treatment of employee loans; changes in the value of units between the dates of grants of exchangeability and the date of actual unit exchange; changes in the value of RSUs and/or restricted stock awards between the date of grant and the date the award vests; variations in the value of certain deferred tax assets; and liabilities and the different timing of permitted deductions for tax under GAAP and statutory tax requirements
In the end, these adjustments result in the Company's taxable income for its pre-tax Adjusted Earnings, and BGC then applies the statutory tax rates to determine the Company's non-GAAP tax provision based on the taxable income. According to BGC, the effective tax rate for pre-tax Adjusted Earnings is equal to the number of non-GAAP tax provisions divided by the number of pre-tax Adjusted Earnings.
It is generally considered that the amount of charge related to equity-based compensation has the most significant influence on this non-GAAP tax provision. The company's non-GAAP effective tax rate is lowered by increasing these charges, which in turn results in an increase in post-tax Adjusted Earnings for the Company, because equity-based compensation charges are deductible based on applicable tax laws.
Each of BGC's subsidiaries incurs its own income tax expenses as a result of the location, legal structure, and jurisdictional taxing authorities of the subsidiary in question. A number of the Company's entities are subject to U.S. taxation. In New York City, unincorporated businesses are subject to the Unincorporated Business Tax ("UBT") in the form of partnerships. Are there any of you?. The federal and state income tax liability or benefit on the partnership income or loss, with the exception of UBT, rests with the holders of the partnership units rather than with the partnership entity itself.. It is important to note that the Company's consolidated financial statements include U.S.. As a result of the Company's allocable share of the U.S. equity, federal, state, and local income taxes are due.. The results of the operations carried out. Outside of the United States.The primary means by which BGC operates is through subsidiaries that are subject to local income taxes. In view of these reasons, it is expected that taxes related to Adjusted Earnings should be presented so as to demonstrate the amount of tax that the consolidated Company would expect to pay if 100% of earnings were taxed at global corporate rates.
In view of these reasons, it is expected that taxes related to Adjusted Earnings should be presented so as to demonstrate the amount of tax that the consolidated Company would expect to pay if 100% of earnings were taxed at global corporate rates.
Earnings Per Share Calculations for Pre- and Post-Tax Adjusted Earnings BGC's pre- and post-tax adjusted earnings per share calculations are based on either of the following assumptions:
The share count for Adjusted Earnings excludes certain shares and share equivalents that will be issued in future periods but are not yet eligible to receive dividends and/or distributions from the company.. During each quarter, the dividend paid to BGC's stockholders, if any, will be determined by the Company's Board of Directors based on a number of factors that will be taken into consideration by the Board. Any future dividends that are declared, paid, the timing, and amount of any future dividends payable by the Company will be determined by the Board of Directors, based on the fully diluted share count of the Company.. It is recommended that you review the table titled "Fully Diluted Weighted-Average Share Count under GAAP and for Adjusted Earnings" found in the Company's most recent press release for more information regarding any share count adjustments.
It is recommended that you review the table titled "Fully Diluted Weighted-Average Share Count under GAAP and for Adjusted Earnings" found in the Company's most recent press release for more information regarding any share count adjustments.
The management rationale for utilizing Adjusted Earnings is based upon the fact that BGC excluded the above items from its calculation of Adjusted Earnings because these items were either non-cash in nature, the anticipated benefits from these expenditures were not fully realized until future periods, or the Company believes that results excluding these items provide a more accurate reflection of the ongoing operations of BGC.. An Adjusted Earnings measure is one of the tools that management uses in order to evaluate, among other things, the overall performance of the Company's business and to make operational decisions related to that business.
An Adjusted Earnings measure is one of the tools that management uses in order to evaluate, among other things, the overall performance of the Company's business and to make operational decisions related to that business.
In addition, it is important to note that the term "Adjusted Earnings" is not to be considered in isolation or as an alternative to GAAP net income (loss).. This Company views Adjusted Earnings as a performance measure that is not indicative of liquidity, or the amount of cash available to fund its operations, but rather as a measure of the company's performance.. We do not intend that Adjusted Earnings, as well as other related measures, will replace the Company's presentation of its GAAP financial results in the future.. The management of BGC believes that these measures assist investors in gaining a better understanding of the Company's financial performance and provide useful information to both management and investors in regard to certain financial and business trends regarding BGC's financial position and results of operations.. We believe that GAAP and Adjusted Earnings measures of financial performance should be considered in conjunction with one another
We believe that GAAP and Adjusted Earnings measures of financial performance should be considered in conjunction with one another
Detailed information about Adjusted Earnings can be found in the sections of this document as well as in the company's most recent financial results press release titled "Reconciliation of GAAP Income (Loss) from Operations before Income Taxes to Adjusted Earnings and GAAP Fully Diluted EPS to Post-Tax Adjusted EPS" and its footnotes. BGC provides detailed explanations of how non-GAAP results are reconciled to GAAP results, as well as footnotes.
The company also provides a non-GAAP financial performance measure, "Adjusted EBITDA", which translates to GAAP "Net income (loss) available to common stockholders", adjusted to remove the following items from GAAP "Net income (loss) available to common stockholders:
The Company's management believes that its Adjusted EBITDA measure is useful in evaluating BGC's operating performance because, in the calculation of the Adjusted EBITDA measure, the effects of financing and income taxes as well as the accounting effects of capital spending and acquisitions are generally eliminated. These impairment charges would be for goodwill and intangibles that were acquired as part of the acquisitions.. In some cases, these items can differ for different companies for reasons that are unrelated to their overall operating performance. Due to this, the Company's management uses this measure to evaluate the operating performance of the Company and for other discretionary purposes as well. BG Capital believes that Adjusted EBITDA is a valuable tool for investors to assist them in getting a better understanding of the financial results and operating results of the Company.
BG Capital believes that Adjusted EBITDA is a valuable tool for investors to assist them in getting a better understanding of the financial results and operating results of the Company.
When analyzing the operating performance of BGC, investors should use Adjusted EBITDA, which is a non-GAAP based measure of BGC's operating performance, in addition to GAAP measures of net income as a measure of BGC's performance.. It should be noted that not all companies use the same EBITDA calculation as the Company, so the adjusted EBITDA presented by the Company may not be comparable to similarly titled measures presented by other companies. The Company's Adjusted EBITDA is not intended to be a measure of free cash flow or GAAP cash flow from operations as the Company's Adjusted EBITDA does not take certain cash requirements into account, such as taxes and debt service payments.
The Company's Adjusted EBITDA is not intended to be a measure of free cash flow or GAAP cash flow from operations as the Company's Adjusted EBITDA does not take certain cash requirements into account, such as taxes and debt service payments.
It is important to note that for more information regarding Adjusted EBITDA, you can refer to the section on this page as well as the Company's most recent financial results press release titled "Reconciliation of GAAP Net Income (Loss) Available to Common Stockholders to Adjusted EBITDA" as well as the footnotes to the same, in which it is explained how BGC's non-GAAP results are reconciled to those under GAAP.
BGC anticipates that it will provide forward-looking guidance on a number of GAAP and non-GAAP items from time to time, including guidance regarding GAAP revenues and certain non-GAAP measures. There is, however, no expectation that the Company will provide an outlook for other GAAP results in the near future. There is a reason for this, as certain GAAP items, which are excluded from Adjusted Earnings and/or Adjusted EBITDA, can be difficult to predict with precision before the end of each period.. Thus, the Company believes that in order to forecast GAAP results or to quantitatively reconcile GAAP forecasts with non-GAAP forecasts with sufficient precision, it would not be feasible for it to have the required information without unreasonable efforts.. In the same way, the Company is unable to address the probable significance of the information that is unavailable due to the same reasons. There are a number of relevant items that are difficult to predict on a quarterly and/or annual basis with precision and which may have a material impact on the Company's GAAP results, including, but not limited to:
There are a number of relevant items that are difficult to predict on a quarterly and/or annual basis with precision and which may have a material impact on the Company's GAAP results, including, but not limited to:
An alternative measure of liquidity that may be used by BGC is a non-GAAP measure called "liquidity".. According to the Company, liquidity is comprised of the sum of cash and cash equivalents, reverse repurchase agreements (if any), and financial instruments owned, at fair value, less securities lent out in securities loaned transactions and repurchase agreements (if any).. The Company considers liquidity to be an important metric in determining the amount of cash that is readily available or that could be readily available to it on short notice in the event of an emergency.
The Company considers liquidity to be an important metric in determining the amount of cash that is readily available or that could be readily available to it on short notice in the event of an emergency.
Please refer to the section of this document and/or the Company's most recent financial results press release entitled "Liquidity Analysis" for additional information on how BGC's non-GAAP results are reconciled to those under GAAP in order to gain a better understanding of how the non-GAAP results are reconciled.
BGC generates a significant amount of its revenues in non-U.S. dollars through its Constant Currency Defined business. There are a number of currencies denominated in dollars, particularly the euro and pound sterling. BGC provides revenue year-over-year comparisons on a "Constant Currency" basis when comparing revenues throughout the period, which was characterized by highly volatile foreign exchange movements, in order to present a better picture of the Company's revenues during the period.. The Constant Currency financial metric is used by BGC in order to provide a better comparison of the Company's underlying operational performance by eliminating the effects of foreign currency fluctuations between comparative periods, thus allowing us to provide a more accurate analysis.. Due to the fact that BGC's consolidated financial statements are presented in U.S. dollars. Dollars, fluctuations in non-U.S. currencies. The Company's GAAP results are impacted by the impact of currencies denominated in dollars. In order to calculate the Company's Constant Currency metric, which is a non-GAAP financial measure, the Company assumes that the foreign exchange rates used to determine the Company's comparative prior period revenues will be applied to the revenues for the current period. It is calculated by comparing the non-GAAP Constant Currency revenues for the current quarter to the non-GAAP Constant Currency revenues for the previous quarter in order to obtain the percentage change in revenue. It is important to understand that the non-GAAP Constant Currency revenues are total revenues excluding the effect of foreign exchange rate movements, and they are calculated by reassessing and/or translating current quarter revenues using exchange rates from prior quarters.. This is because the Company presents certain non-GAAP Constant Currency percentage changes in Constant Currency revenues as a supplementary measure in order to facilitate the comparison of the Company's core operating results with those of its competitors. I recommend that you consider this information in addition to, and not in place of, results reported in accordance with GAAP, and not as a substitute for them
I recommend that you consider this information in addition to, and not in place of, results reported in accordance with GAAP, and not as a substitute for them
BGC Group, Inc. is a company that specializes in.The BGC Group, Inc. is a company based in California. The BGC Group ("BGC") is one of the world's leading providers of financial technology and brokerage services. A number of BGC's affiliated companies specialize in the brokerage of a broad range of financial products, including Fixed Income (Rates and Credit), Foreign Exchange, Equities, Energy and Commodities, Shipping, and Futures.. It is also through its affiliates that BGC provides a wide range of back-office services to a wide range of financial and non-financial institutions, including: trade execution, brokerage, clearing, trade compression, post-trade, information, and other back-office services to a large number of financial and non-financial institutions.. It has a range of brands, including Fenics®, FMXTM, FMX Futures ExchangeTM, Fenics Markets XchangeTM, Fenics DigitalTM, Fenics USTTM, Fenics FXTM, Fenics RepoTM, Fenics DirectTM, Fenics MIDTM, Fenics Market DataTM, Fenics GOTM, Fenics PortfolioMatchTM, and BGC®, BGC TraderTM, kACE2TM, and Lucera®, all of which offer financial technology solutions, market data, and analytics across a wide range of financial instruments and markets.. Aspects of the BGC Group, BGC Partners, BGC Trader, GFI, GFI Ginga, CreditMatch, Fenics, Fenics.In addition to BGC and/or its affiliates, the names BGC, FMX, Sunrise Brokers, Poten & Partners, RP Martin, Capitalab, Swaptioniser, CBID, Caventor, LumeMarkets, and Lucera are trademarks/service marks and/or registered trademarks/service marks of BGC and/or its affiliates.
In addition to BGC and/or its affiliates, the names BGC, FMX, Sunrise Brokers, Poten & Partners, RP Martin, Capitalab, Swaptioniser, CBID, Caventor, LumeMarkets, and Lucera are trademarks/service marks and/or registered trademarks/service marks of BGC and/or its affiliates.
A number of the world's largest banks, brokers, investment banks, trading firms, hedge funds, governments, corporations, and investment firms are among the customers of BGC.. It is worth noting that BGC's Class A common stock is listed on the Nasdaq Global Select Market under the ticker symbol "BGC".. Howard W. Benson, Chairman of the Board of Directors and Chief Executive Officer of BGC, is the company's leader. The Lutnicks. If you would like more information, please visit http://www..The BGCG.com. BGC can also be followed on Twitter at https://twitter.com/BGC.com/bgcgroupinc, and https://www.bgcgroupinc.com.On LinkedIn.Please refer to http://www.bgcgroup.com/company/bgc_group and/or http://ir.bgcgroup.com.The BGCG.The Com is
The Com is
Discussion of Forward-Looking Statements about BGC The statements contained in this document regarding BGC that are not historical facts are considered "forward-looking statements". These statements involve risks and uncertainties that could cause actual results to differ from the results that are stated in the forward-looking statements.. The Company's forward-looking statements may include information about its business, results, financial position, liquidity, and outlook, and these statements may constitute forward-looking statements, and there is a risk that the actual impact may differ from what is currently anticipated, possibly materially.. BGC undertakes no obligation to update any forward-looking statements, except to the extent required by law. The Securities and Exchange Commission ("SEC") has published BGC's Securities and Exchange Commission ("SEC") filings concerning additional risks and uncertainties, which may cause actual results to differ from those contained in forward-looking statements. The risk factors and Special Note on Forward-Looking Information in these filings, as well as any updates to such risk factors and Special Note on Forward-Looking Information that may be included in future reports on Form 10-K, Form 10-Q or Form 8-K, are outlined in this section.
The Securities and Exchange Commission ("SEC") has published BGC's Securities and Exchange Commission ("SEC") filings concerning additional risks and uncertainties, which may cause actual results to differ from those contained in forward-looking statements. The risk factors and Special Note on Forward-Looking Information in these filings, as well as any updates to such risk factors and Special Note on Forward-Looking Information that may be included in future reports on Form 10-K, Form 10-Q or Form 8-K, are outlined in this section.
The media contact for this event is Jason Angrisani at +1 212-915-1224
Contact Information for Investors: Jason Chryssicas+1 212-610-2426
BGC Partners, Inc. logo - https://mma.prnewswire.com/media/136112/4473007/bgc_partners_inc_logo.jpg
In a press release dated today, BGC Group, Inc. (Nasdaq: BGC) has announced that it has updated its outlook for the quarter ending December 31, 2023 and provided an update to the outlook for...
The Poten Group ("Poten"), a subsidiary of BGC Group, Inc. (Nasdaq: BGC) ("BGC Group" or "BGC" or "Company"), is an integrated energy advisory and consulting firm...
Get PRN's top stories and curated news delivered straight to your inbox each week by signing up to receive them.

Source prnewswire