BGC Group Inc.
03/02/2026 | Press release | Distributed by Public on 03/02/2026 14:53
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of our financial condition and results of operations should be read together with our Consolidated Financial Statements and notes to those statements, as well as the "Special Note on Forward-Looking Information" relating to forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act included elsewhere in this Annual Report on Form 10-K and the cautionary statements relating to forward-looking statements below.
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 years ended December 31, 2025, 2024, and 2023.
FORWARD-LOOKING CAUTIONARY STATEMENTS
Our actual results and the outcome and timing of certain events may differ significantly from the expectations discussed in the forward-looking statements. Factors that might cause or contribute to such a discrepancy include, but are not limited to, the factors set forth below:
•macroeconomic and other challenges and uncertainties, including those resulting from the conflict between Ukraine and Russia, conflicts in the Middle East, Latin America and other ongoing or new conflicts in those or other regions or jurisdictions, downgrades of U.S. Treasuries, fluctuating global interest rates, current or expected inflation rates and the Federal Reserve's responses thereto, stagflation, fluctuations in the value of global currencies, including the U.S. dollar, liquidity concerns regarding and changes in capital requirements for banking and financial institutions, changes in the U.S. and global economies and financial markets, including economic activity, employment levels, global trade relations, volatility in tariffs imposed by the U.S. and foreign governments and other factors driving trade uncertainty, reductions in government spending, recession fears, infrastructure spending, supply chain issues and increased technology costs, market liquidity, and energy costs, as well as the various actions taken in response to these challenges and uncertainties by governments, central banks and others, including consumers and corporate clients and customers, as well as potential changes in these factors;
•market conditions and volatility, including fluctuations in interest rates and trading volumes, the level of worldwide governmental debt issuances, austerity programs, government stimulus packages, increases or decreases in deficits and the impact of changing government tax rates, interpretations of tax law and policy, repatriation rules, deductibility of interest, and other changes or potential changes to monetary policy, changing regulatory requirements or changes in legislation, regulations and priorities, possible turmoil across regional banks and certain global investment banks, volatility in the demand for the products and services we provide, possible disruptions in trading, potential deterioration of equity and debt capital markets and cryptocurrency markets, and potential economic downturns, including recessions, and similar effects, which may not be predictable in future periods;
•our ability to access the capital markets as needed or on reasonable terms and conditions;
•our ability to enter and succeed in new markets or develop new products, offerings, trade desks, marketplaces, or services for existing or new clients and, to pursue new operations and business initiatives, including our ability to develop new Fenics platforms and products, to successfully launch new initiatives which could require significant capital and significant efforts by management, including engaging partners on satisfactory terms, to manage long lead times to scale a successful venture, to convert certain existing products to a Fully Electronic trade execution, to successfully incorporate internally generated, acquired or third-party artificial intelligence into our products and any efforts by our competitors to do the same, and efforts to induce such clients to use these products, trading desks, marketplaces, or services and to secure and maintain market share, and our ability to manage the risks inherent in operating our cryptocurrency business and in safekeeping cryptocurrency assets;
•pricing, commissions and fees, and market position with respect to any of our products and services and those of our competitors;
•the effect of industry concentration and reorganization, reduction of customers, and consolidation;
•liquidity, regulatory, cash and clearing capital requirements;
•our relationships and transactions with Cantor and its affiliates, including CF&Co, and CCRE, our structure, the timing and impact of any actual or future changes to our organization or structure, any related party transactions, any challenges to our interpretation or application of complex tax laws to our structure, conflicts of interest or litigation, including with respect to executive compensation matters or other transactions with our current and former executive officers, and with the U.S. government or governmental entities, any impact of Cantor's results on our credit ratings and associated outlooks, any clearing capital agreements, clearing services agreements, Repurchase Agreements or Reverse Repurchase Agreements with or loans to or from us or Cantor, including the balances and interest rates thereof from time to time and any convertible or equity features of any such financing transactions, CF&Co's acting as our sales agent or underwriter from time to time, Cantor's holdings of Company Debt Securities, CF&Co's acting as a market maker in Company Debt Securities, CF&Co's acting as our financial advisor in connection with certain capital markets transactions and potential acquisitions, dispositions, divestitures or other transactions, and our participation in various investments, stock loans or cash management vehicles placed by or recommended by CF&Co;
•the ongoing integration of acquired and new businesses, their technology, personnel and their operations and back-office functions with our other businesses and uncertainties related to the timing of the closing of such acquisitions, synergies, and revenue growth generated from such new, acquired or to be acquired businesses, as well as increased costs resulting from such businesses and our ability to control those and related costs, including with respect to the OTC Global acquisition;
•the rebranding or repositioning of certain aspects of our current businesses to adapt to and better address the needs of our clients or risks related to any potential dispositions of all or any portion of our existing or acquired businesses;
•pandemics and other international health incidents or emergencies, and the impact of natural disasters or weather-related or similar events, including hurricanes and heat waves as well as power failures, communication and transportation disruptions, and other interruptions of utilities or other essential services;
•risks inherent in doing business in international markets or with international partners, and any failure to identify and manage those risks, including economic or geopolitical conditions or uncertainties, the actions of governments or central banks, including the pursuit of trade, border control or other related policies by the U.S. and/or other countries, economic and political volatility in the U.K. and Europe, political and other tensions between the U.S. and China, the conflict between Ukraine and Russia, conflicts in the Middle East, Latin America, other ongoing or new conflicts or other international tensions, hostilities and instability in those or other regions or jurisdictions, additional sanctions and regulations imposed by governments and related counter-sanctions and impacts to cross-border trade and travel as well as potential changes in these factors;
•the impact of any full or partial U.S. government shutdowns, other political developments, or reduced government staffing, including uncertainties regarding the debt ceiling, the federal budget and the deployment of federal funds, immigration policy, elections, political protests or unrest, boycotts, demonstrations, stalemates or other social and political developments, such as terrorist acts, acts of war or other violence, and potential changes in these factors;
•the effect on our businesses, our clients, the markets in which we operate and the economy in general of changes in U.S. and foreign tax and other laws, including but not limited to the OBBBA, changes in tax rates, interpretations of tax law, the impact of potential changes in U.K. tax rates and amendments to the application of National Insurance rules which impact our U.K. Partnership and its members, repatriation rules, and deductibility of interest, potential policy and regulatory changes in other countries, sequestrations, responses to global inflation rates, and other potential changes to tax and other policies resulting from elections and changes in governments;
•the effect on our business of leadership changes and the resulting transition following the confirmation of Mr. Howard Lutnick, our former Chief Executive Officer and Chairman of the Board, as U.S. Secretary of Commerce, the appointment of our three Co-Chief Executive Officers to replace Mr. Howard Lutnick, our dependence upon our key employees, as well as the competing demands on the time of certain of our key employees who also provide services to Cantor, Newmark and various other ventures and investments sponsored by Cantor or otherwise, our ability to build out successful succession plans, the impact of absence due to illness or leave of certain officers or employees and our ability to attract, retain, motivate and integrate new employees, and our ability to enforce post-employment restrictive covenants on awards previously granted to certain of our key employees and future awards or otherwise;
•extensive regulation of our businesses and customers, the timing of regulatory approvals, changes in regulations relating to financial services companies and other industries, and risks relating to U.S. and foreign tax and compliance matters, including regulatory examinations, inspections, audits, investigations and enforcement actions, unavailability of certain tax credits or reliefs or additional tax liabilities or assessments, and any resulting costs, increased financial and capital requirements, enhanced oversight, remediation, fines, penalties, sanctions, and changes to or restrictions or limitations on specific activities, including potential delays in accessing markets, including due to our regulatory status and actions, operations, and compensatory arrangements, and growth opportunities, including acquisitions, hiring, and new businesses, products, or services, as well as risks related to our taking actions to ensure that we and our subsidiaries are not deemed investment companies under the Investment Company Act;
•factors related to specific transactions or series of transactions, including credit, performance, and principal risk, trade failures, potential counterparty failures, and the impact of fraud and unauthorized trading;
•costs and expenses of developing, maintaining, and protecting our intellectual property, utilizing third-party software licensed under "open source" licenses, as well as employment, regulatory, and other litigation and proceedings, and their related costs, including costs and expenses related to acquisitions and other matters, including judgments, indemnities, fines, or settlements paid, reputational risk, requirements that we stop selling or redesign affected products or services, rebrand or restrict our products or services or pay damages to satisfy indemnification commitments with our customers, and the impact thereof on our financial results and cash flows in any given period;
•certain other financial risks, including the possibility of future losses, indemnification obligations, assumed liabilities, reduced cash flows from operations, increased leverage, reduced availability under our credit agreements, and the need for short- or long-term borrowings, including from Cantor, our ability to refinance our indebtedness, including in the credit markets, on acceptable terms and rates, and changes to interest rates and market liquidity or our access to other sources of cash relating to acquisitions, dispositions, or other matters, potential liquidity and other risks relating to our ability to maintain continued access to credit and the availability of financing necessary to support our ongoing business needs, on terms acceptable to us, if at all, and risks associated with the resulting leverage, including potentially causing a reduction in our credit ratings and associated outlooks and increased borrowing costs as well as interest rate and foreign currency exchange rate fluctuations;
•risks associated with the temporary or longer-term investment of our available cash, including in the BGC OpCos, defaults or impairments on our investments (including investments in non-marketable securities), joint venture interests, stock loans or cash management vehicles, costs associated with alterations to and collectability of loan balances owed to us by employees, the BGC OpCos or others;
•the impact of any restructuring or similar other transformative transactions, acquisitions, or divestitures on our ability to enter into marketing and strategic alliances or business combinations and attract investors or partners or engage in restructuring, rebranding or other transactions in the financial services and other industries, including acquisitions, divestitures, tender offers, exchange offers, dispositions, reorganizations, partnering opportunities and joint ventures, the failure to realize the anticipated benefits of any such transactions, relationships or growth, and the future impact of any such transactions, relationships or growth on our other businesses and our financial results for current or future periods, the integration of any completed acquisitions and the use of proceeds of any completed dispositions or divestitures, the impact of amendments and/or terminations of any strategic arrangements, and the value of and any hedging entered into in connection with consideration received or to be received in connection with such dispositions and any transfers thereof;
•our estimates or determinations of potential value with respect to various assets or portions of our businesses, including Fenics, FMX and other businesses;
•the timing of completion of or impacts of our current cost reduction program on our ability to enhance profitability and margins, the impacts of any related short-term increases to our compensation and employee benefits expenses, and our ability to realize the anticipated cost savings from such programs;
•our ability to manage turnover and hire, train, integrate and retain personnel, including brokers, salespeople, managers, and other front-office personnel, technology professionals, back-office and support services and personnel, and departures of senior personnel;
•our ability to expand the use of technology and maintain access to the intellectual property of others for Hybrid and Fully Electronic trade execution in our product and service offerings, and otherwise;
•the impact of artificial intelligence on the economy, our industry, our products and business, and the businesses of our clients and vendors;
•our ability to effectively manage any growth that may be achieved, including outside the U.S., while ensuring compliance with all applicable financial reporting, internal control, legal compliance, and regulatory requirements;
•our ability to identify and remediate any material weaknesses or significant deficiencies in our internal controls which could affect our ability to properly maintain books and records, prepare financial statements and reports in a timely manner, control our policies, practices and procedures, operations and assets, assess and manage our operational, regulatory and financial risks, and integrate our acquired businesses and brokers, salespeople, managers, and other front-office personnel and technology professionals;
•the impact of unexpected market moves and similar events;
•information technology risks, including capacity constraints, failures, or disruptions in our operational systems or infrastructure, or those of our clients, counterparties, exchanges, clearing facilities, or other parties with which we interact, including increased demands on such systems and on the telecommunications infrastructure from remote working, cybersecurity risks and incidents, compliance with regulations requiring data minimization and protection and preservation of records of access and transfers of data, privacy risk and exposure to potential liability and regulatory focus;
•the expansion of our cybersecurity and AI processes to include new businesses, or the integration of the cybersecurity and AI processes of acquired businesses;
•the effectiveness of our governance, risk management, and oversight procedures and the impact of any potential transactions or relationships with related parties;
•the impact of our Corporate Responsibility or "sustainability" ratings on the decisions by clients, investors, ratings agencies, potential clients and other parties with respect to our businesses, investments in us, our borrowing opportunities or the market for and trading price of BGC Class A common stock, Company Debt Securities, or other matters, as well as the impact and potential cost to us of any policies, legislation, or initiatives in opposition to our Corporate Responsibility or "sustainability" policies;
•the fact that the prices at which shares of our Class A common stock are or may be sold in offerings, acquisitions, or other transactions may vary significantly, and purchasers of shares in such offerings or other transactions, as well as existing stockholders, may suffer significant dilution if the price they paid for their shares is higher than the price paid by other purchasers in such offerings or transactions;
•the impact of any potential future changes in our capital deployment priorities or any future reductions to our dividends and the timing and amounts of any future dividends, including on our stock price and on our ability to meet expectations with respect to payments of dividends and repurchases of shares of our Class A common stock, or other equity interests in us or any of our other subsidiaries, including from Cantor, our executive officers, other employees, and others, and our ability to pay any excise tax that may be imposed on the repurchase of shares; and
•the effect on the markets for and trading prices of our Class A common stock and Company Debt Securities of various offerings and other transactions, including offerings of our Class A common stock and convertible or exchangeable debt or other securities, our repurchases of shares of our Class A common stock or other equity interests in us or in our subsidiaries, our payment of dividends on our Class A common stock, convertible arbitrage, hedging, and other transactions engaged in by us or holders of our outstanding shares, Company Debt Securities or other securities, share sales and stock pledges, stock loans, and other financing transactions by holders of our shares (including by Cantor or others), including of shares acquired pursuant to our employee benefit plans, corporate restructurings, acquisitions, conversions of shares of our Class B common stock and our other convertible securities into shares of our Class A common stock, and distributions of our Class A common stock by Cantor to its partners.
The foregoing risks and uncertainties, as well as those risks and uncertainties discussed under the headings Part I, "Item 1A-Risk Factors," and Part II, "Item 7A-Quantitative and Qualitative Disclosures About Market Risk" and elsewhere in this Annual Report on Form 10-K, may cause actual results and events to differ materially from the forward-looking statements.
OVERVIEW AND BUSINESS ENVIRONMENT
We are a leading global marketplace, data, and financial technology company across the ECS and financial markets. We specialize in the brokerage and trade execution of a broad range of ECS products, including listed derivatives and physical commodities in the oil and refined, and environmental and energy transition, markets, as well as ship chartering. Additionally, we provide brokerage services across fixed income securities such as government bonds and corporate bonds, as well as interest rate derivatives and credit derivatives, foreign exchange, 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 data and information services, market infrastructure and connectivity services, as well as post-trade services.
BGC and leading global investment banks and market making firms have partnered to create FMX, part of the BGC Group of companies, which includes a U.S. interest rate futures exchange, a cash U.S. Treasuries platform and spot foreign exchange platform.
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 December 31, 2025, we had 2,510 brokers, salespeople, managers, and other front-office personnel across our businesses.
Corporate Conversion
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.
In connection with, but prior to, the Corporate Conversion, the Company completed various transactions which included:
•the redemption of certain non-exchangeable limited partnership units in connection with the issuance of shares of BGC Partners Class A common stock and the accompanying tax payments, which led to an equity-based compensation charge of $60.9 million;
•the exchange of the remaining 1.5 million exchangeable limited partnership units of BGC Holdings held by employees on June 30, 2023, for 1.0 million shares, after tax withholding, of BGC Partners Class A common stock;
•the redemption of certain non-exchangeable limited partnership units of BGC Holdings held by employees and issuance of 16.9 million BGC Partners RSUs on a one-for-one basis on June 30, 2023;
•the redemption of certain non-exchangeable Preferred Units of BGC Holdings held by employees and issuance of $49.2 million of BGC Partners RSU Tax Accounts on June 30, 2023, based on the fixed cash value of the Preferred Units redeemed;
•the redemption of the remaining 5.6 million non-exchangeable FPUs and issuances of BGC Partners RSUs on a one-for-one basis on June 30, 2023, which in turn reduced the "Redeemable Partnership Interest" to zero with an offsetting impact to "Total equity" in the Company's Consolidated Statements of Financial Condition as of June 30, 2023; and
•the purchase on June 30, 2023 by Cantor from BGC Holdings of an aggregate of 5,425,209 Cantor units for an aggregate consideration of $9,715,772 as a result of the redemption of 5,425,209 FPUs, and 324,223 Cantor units for an aggregate consideration of $598,712 as a result of the exchange of 324,223 FPUs.
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 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 Class B common stock issued to Cantor will exchange into BGC Class A common stock in the event that BGC does not issue at least $75,000,000 in shares of BGC 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 February 27, 2026 we have issued approximately $19.4 million of BGC 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. BGC Group granted 38.6 million restricted stock awards, 25.3 million RSUs, and $74.0 million of RSU Tax Accounts upon the conversion of the non-exchangeable shares of Holdings Merger Sub.
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.
In connection with the Corporate Conversion on July 1, 2023, the BGC Group Board and the Board of Directors of BGC Partners authorized the assumption of all agreements and arrangements between BGC Partners and any executive officer, director or affiliate of BGC Partners, with such modifications necessary to reflect the Corporate Conversion. Pursuant to the foregoing authorization, any existing agreements and arrangements between BGC Partners and any executive officer, director or affiliate of BGC Partners, were generally assumed unchanged other than making BGC Group a party thereto.
In connection with the Corporate Conversion on July 1, 2023, the Board and Audit Committee of BGC Group approved the authorized repurchases of Company Equity Securities from any holder of Company Equity Securities, including our directors, officers, and employees, of up to $400.0 million.
In connection with the Corporate Conversion on July 1, 2023, the Board and Audit Committee of BGC Group approved the authorized repurchases of Company Debt Securities from any holder of Company Debt Securities, including our directors, officers, and employees, of up to $50.0 million.
In connection with the Corporate Conversion on July 1, 2023, BGC Group assumed and adopted: the Eighth Amended and Restated BGC Partners, Inc. Long-Term Incentive Plan, as amended and restated as the BGC Group, Inc. Long Term Incentive Plan; the BGC Partners Second Amended and Restated BGC Partners Incentive Bonus Compensation Plan, as amended and restated, and renamed the BGC Group, Inc. Incentive Bonus Compensation Plan; and the BGC Partners, Inc. Deferral Plan for Employees of BGC Partners, Inc., Cantor Fitzgerald, L.P. and Their Affiliates, as amended and restated as the BGC Group, Inc. Deferral Plan for Employees of BGC Group, Inc., Cantor Fitzgerald, L.P. and Their Affiliates. 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 plan.
In connection with the Corporate Conversion on July 1, 2023, the BGC Holdings Limited Partnership Agreement was terminated, and the BGC Holdings, L.P. Participation Plan was terminated.
In connection with the Corporate Conversion on July 1, 2023, BGC Group amended and restated its certificate of incorporation to reflect an increase in the authorized shares of BGC Group Class A common stock to 1,500,000,000; an increase in the authorized shares of BGC Group Class B common stock to 300,000,000; and a provision providing for exculpation to officers of BGC Group pursuant to Section 102(b)(7) of the DGCL. Additionally, BGC Group amended and restated its bylaws to adopt a provision providing that Delaware courts shall be the exclusive forum for certain matters.
In connection with the Corporate Conversion on July 1, 2023, the Exchange Agreement with Cantor terminated based on its own terms.
In connection with the Corporate Conversion on July 1, 2023, BGC Group, Cantor and certain affiliates of Cantor entered into an Amended and Restated U.S. Master Administrative Services Agreement and an Amended and Restated U.K. Master Administrative Services Agreement.
2025 Board of Directors and Executive Officers Changes and Mr. Howard Lutnick Divestiture
On February 18, 2025, Mr. Howard Lutnick was confirmed by the United States Senate as the 41st Secretary of Commerce. Following his confirmation, on February 18, 2025, Mr. Howard Lutnick stepped down as Chairman of the Board and Chief Executive Officer of the Company. On February 18, 2025, the Company appointed Mr. Brandon Lutnick, son of Mr. Howard 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 Messrs. John Abularrage, JP Aubin, and Sean Windeatt as Co-Chief Executive Officers of the Company and as the Co-Principal Executive Officers of the Company.
On October 6, 2025, Mr. Howard Lutnick completed the divestiture of his holdings in the Company, Cantor and CFGM in compliance with U.S. government ethics rules, including through the sale of all of the voting shares of CFGM and outstanding equity interests in various entities and family trusts that hold the Company's common stock to trusts controlled by Mr. Brandon Lutnick, and the sale of all of BGC Class B common stock held directly by him to Cantor. See Part I, "Item 1-Our Organizational Structure-2025 Mr. Howard Lutnick Divestiture Events and Lutnick Family Voting and Transfer Agreement" for more information.
FMX
FMX includes FMX UST, the world's fastest growing cash U.S. Treasuries marketplace, FMX Futures Exchange, a U.S. interest rate future exchange, and FMX FX, a spot foreign exchange platform. 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. On May 18, 2025, FMX Futures Exchange also launched the trading of U.S. Treasury futures contracts, initially with 2-year and 5-year contracts.
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 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 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, but we will ultimately defer to client preference on execution method.
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 innovative technology. 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 15.4% to $163.9 million in the fourth quarter of 2025 and 15.5% to $659.5 million for the year ended December 31, 2025, as compared to the prior year periods.
Within our Fenics businesses, Fenics Markets revenue grew to $136.7 million in the fourth quarter of 2025 and to $553.4 million for the year ended December 31, 2025, respectively, primarily driven by higher electronic trading volumes across Rates products and increased Fenics Market Data revenues.
Fenics Growth Platforms revenue grew to $27.2 million in the fourth quarter of 2025 and to $106.1 million for the year ended December 31, 2025, primarily driven by FMX and Lucera, partially offset by lower post-trade revenues due to the sale of our Capitalab business in the fourth quarter of 2024.
We continue to invest in our Fenics Growth Platforms, and notable highlights for the fourth quarter of 2025 compared to the prior year period include:
•FMX UST generated record fourth quarter ADV of $58.7 billion, more than 12% higher compared to the prior year period. FMX UST grew its fourth-quarter central limit order book market share to 39%, up from 37% in the third quarter of 2025 and 30% from a year ago. FMX UST central limit order book market share has increased sequentially in 12 of the last 13 quarters, more than doubling over the same period.
•FMX Futures Exchange saw record volumes and open interest in the fourth quarter with ADV and open interest increasing 82% and 97%, respectively, versus the third quarter of 2025.
•FMX FX ADV increased by 40% to a fourth quarter record of $15.5 billion driven by strong growth across spot FX and non-deliverable forward volumes.
•PortfolioMatch ADV grew by 68% in the fourth quarter of 2025 compared to the prior year period, driven by stronger U.S. and European credit activity, greater adoption of algorithmic trading, and larger average trade size.
•Lucera, Fenics' network business providing critical real-time trading infrastructure to the capital markets, grew its revenues by 24.1% in the fourth quarter of 2025 compared to the prior year period. This strong growth was driven by increased demand for Lucera's FX and Rates solutions, continued international expansion, and onboarding new clients. Lucera's client pipeline continues to expand and the business plans to launch additional fixed income products in 2026.
Data, network and post-trade revenues increased by 12.5% to $36.7 million. This growth was primarily driven by Lucera and Fenics Market Data, partially offset by lower post-trade revenues due to the sale of our Capitalab business in the fourth quarter of 2024. Excluding Capitalab, data, network, and post-trade revenues grew by 14.2%.
Fenics brokerage revenues increased by 16.2% to $127.2 million in the fourth quarter of 2025 and 17.3% to $520.4 million for the year ended December 31, 2025, over the respective prior year periods.
Acquisitions
On December 31, 2025, we completed the acquisition of AMCOM which specializes in the trading of agricultural commodities associated with food and alternative fuel feedstocks. The acquisition further rounded out our biofuel business.
On October 1, 2025, the Company completed the acquisition of Macro Hive, a provider of global macro market analytics and strategy. The acquisition of Macro Hive expands BGC's growing agency business that services institutional clients by integrating Macro Hive's artificial intelligence-driven technology across our Rates and FX markets within our global broking and execution platform.
On April 1, 2025, we completed the acquisition of OTC Global. OTC Global 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 Global's complementary product suite, ECS became our largest asset class. The amounts of revenue and pre-tax income from OTC Global included in our Consolidated Statements of Operations from April 1, 2025 to the period ending December 31, 2025 are $341.7 million and $32.9 million, respectively. This positions us as the world's largest ECS broker by revenue as of December 31, 2025, making BGC a more comprehensive and diversified company. Furthermore, the OTC Global acquisition was accretive to our earnings per share on a year-over-year basis.
On October 1, 2024, we completed the acquisition of Sage, an energy and environmental brokerage firm. This acquisition expanded our energy brokerage services in the U.S. and supported our global growth efforts across ECS.
On November 1, 2023, we completed the acquisition of ContiCap, an independent financial product intermediary specializing in emerging markets.
On November 1, 2023, we completed the acquisition of Open Energy Group, a technology-driven marketplace and brokerage for renewable energy asset sales and project finance.
On February 28, 2023, we completed the acquisition of Trident, primarily operating as a commodity brokerage and research company, offering OTC and exchange traded energy and environmental products.
See Note 4-"Acquisitions" to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information related to these transactions.
Divestitures
On December 31, 2025, we sold kACE, a leading provider of real-time pricing and advanced analytics platforms for complex FX derivatives, to smartTrade. smartTrade acquired kACE for up to $119.0 million, subject to limited post-closing adjustments. This includes initial consideration of $80.0 million, with up to an additional $39.0 million in contingent cash consideration. The $39.0 million in contingent cash consideration was excluded from the initial gain on the divestiture and will be recognized in income when it is realized and earned. As a result of this sale, we recognized a $66.7 million gain, which is included in "Gains (losses) on divestitures and sales of investments" in our Consolidated Statements of Operations during the year ended December 31, 2025.
On December 3, 2024, we sold Capitalab, which was part of our post-trade business, to Capitolis. As a result of this sale, we recognized a $39.0 million gain, which is included in "Gains (losses) on divestitures and sale of investments" in our Consolidated Statements of Operations during the year ended December 31, 2024.
We had no gains or losses from divestitures or sales of investments during the year ended 2023.
Cost Reduction Program
We completed the first phase of our current cost reduction program, which we expect will realize $25.0 million of annualized savings in 2026, with more savings targeted throughout the year. These expected savings are subject to risks and uncertainties, and actual results may differ. We will continue to monitor the impact of this program on our financial position and results of operations. In connection with the cost reduction program, the Company recorded compensation charges of $54.8 million and $64.2 million for the three and twelve months ended December 31, 2025, respectively. These charges primarily relate to the termination or modification of certain employment contracts and the accelerated expense recognition of certain employee loans. These charges are reflected in "Compensation and employee benefits" in our Consolidated Statements of Operations during the year ended December 31, 2025. As of December 31, 2025, the Company has made cash payments totaling $31.6 million in connection with the cost reduction program.
Brands and Trademarks
AMCOM, Amerex, American Commodities, 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 PortfolioMatch, FMX, FMX Futures, FMX Markets Xchange, FMX UST, FMX FX, FMX Repo, FMX NDF, GFI, GFI Ginga, Lake Securities, Latium Capital, LumeFX, LumeMarkets, Lucera, Macro Hive, 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 we ceased trading with those clients. We derived less than 1% of total revenue from our Moscow branch and sanctioned Russian counterparties. During the years ended December 31, 2025 and 2024, we released a reserve of $4.4 million and recorded reserves of $4.0 million, respectively, in connection with potential losses associated with Russia's Invasion of Ukraine.
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 2025 fiscal year and determined that the minimum global effective tax did not have a material impact on our 2025 tax rate.
On July 4, 2025, President Trump signed the OBBBA into law, which, among other things, introduced a broad range of changes to existing tax rules, including significant modifications to certain incentives previously introduced or expanded by the Inflation Reduction Act of 2022, as well as extensions and modifications of certain provisions of the Tax Act of 2017.
The OBBBA did not have a material impact on our Consolidated Statements of Financial Condition as of, or results of operations or cash flows for the year ended, December 31, 2025. Management will continue to assess the potential impact the OBBBA may have on our future financial condition, results of operations or liquidity.
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 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, imposition and impact of volatile or 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 Annual Report on Form 10-K.
Industry Landscape
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 Group PLC, StoneX Group, and Clarksons PLC.
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 COVID-19 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 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 year ended December 31, 2025, industry volumes were higher across ECS, Rates, FX, and Credit compared to the prior year period. Secondary market trading volumes were generally mixed across Equities. BGC's brokerage revenues were up by 32.4% year-on-year, reflecting growth across all asset classes and geographies.
Below is an expanded discussion of the market volumes and growth drivers of our various asset class categories.
ECS Volumes
ECS volumes were higher during 2025 compared to the prior year period. CME and ICE energy futures and options volumes were up 8% and 15%, respectively, compared to the prior year period. In comparison, BGC's ECS revenues increased by 88.4%, compared to the prior year period, to $910.7 million, driven by OTC Global and strong organic growth across the broader energy complex. Excluding OTC Global, ECS revenues grew by 20.9% compared to the prior year period.
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.
Rates volumes were higher during 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 6% compared to the prior year period. Over the same time period, listed products on CME were up 4%, and OTC interest rate derivative volumes traded on SEF were up 8% compared to 2024, according to Clarus. In comparison, our overall Rates revenues were up 15.9% as compared to a year earlier, to $794.2 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 desks often have volume discounts built into their price structure, which results in our revenues being less volatile than the overall industry volumes.
Foreign Exchange Volumes and Volatility
Global foreign exchange volumes were higher during 2025 compared to the prior year period. Volumes for CME EBS spot FX and Cboe FX were up 7% and 10%, respectively, compared to the prior year period. Volumes for FX Options were up 14% compared to the prior year period, according to Clarus. In comparison, our overall FX revenues increased by 19.3%, compared to the prior year period, to $428.0 million.
Credit Volumes
Our Credit business is impacted by the level of global corporate bond issuance and interest rates. Credit volumes were higher during 2025 compared to the prior year period. FINRA TRACE average daily volume for U.S. Investment Grade was up 10% and U.S. High Yield was up by 13% according to Bloomberg, compared to the prior year period. In comparison, our overall Credit revenues increased by 2.9%, compared to the prior year period, to $295.6 million.
Equities Volumes
Global equity volumes were mixed during 2025 compared to the prior year period. According to the Securities Industry and Financial Markets Association, the average daily volume of U.S. cash equities was up 45%, as compared to a year earlier. Over the same timeframe, the average daily volume of U.S. options was up 25%, according to the OCC, however, Eurex average daily volumes of equity and equity index derivatives were down 7%. Our Equities business primarily consists of equity derivatives and our overall revenues from Equities increased by 20.6%, compared to the prior year period, to $269.9 million.
FINANCIAL OVERVIEW
Revenues
Our revenues are derived primarily from brokerage commissions charged for either agency or matched principal transactions, fees charged for data, network and post-trade products, fees from related parties and interest income.
Brokerage
We earn revenues from our brokerage services on both an agency and matched principal basis. In agency transactions, we charge a commission for connecting buyers and sellers and assisting in the negotiation of the price and other material terms of the transaction. After all material terms of a transaction are agreed upon, we identify the buyer and seller to each other and leave them to settle the trade directly. Principal transaction revenues are primarily derived from matched principal transactions, whereby revenues are earned on the spread between the buy and the sell price of the brokered security, commodity or derivative. Customers either see the buy or sell price on a screen or are given this information over the phone. The brokerage fee is then added to the buy or sell price, which represents the spread we earn as principal transactions revenues. On a limited basis, we enter into unmatched principal transactions to facilitate a customer's execution needs for transactions initiated by such customers. We also provide market data products for selected financial institutions.
We offer our brokerage services in five broad product categories: ECS, Rates, FX, Credit, and Equities. The chart below details brokerage revenues by product category and by Voice/Hybrid versus Fully Electronic (in thousands):
| For the Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Brokerage revenue by product: | |||||||||||||||||
|
ECS
|
$ | 910,650 | $ | 483,232 | $ | 386,206 | |||||||||||
| Rates | 794,204 | 685,032 | 610,451 | ||||||||||||||
| FX | 428,000 | 358,693 | 314,706 | ||||||||||||||
|
Credit
|
295,587 | 287,377 | 284,744 | ||||||||||||||
| Equities | 269,942 | 223,912 | 236,517 | ||||||||||||||
| Total brokerage revenues | $ | 2,698,383 | $ | 2,038,246 | $ | 1,832,624 | |||||||||||
| Brokerage revenue by product (percentage): | |||||||||||||||||
|
ECS
|
33.7 | % | 23.7 | % | 21.1 | % | |||||||||||
| Rates | 29.4 | 33.6 | 33.3 | ||||||||||||||
| FX | 15.9 | 17.6 | 17.2 | ||||||||||||||
| Credit | 11.0 | 14.1 | 15.5 | ||||||||||||||
| Equities | 10.0 | 11.0 | 12.9 | ||||||||||||||
| Total brokerage revenues | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
| Brokerage revenue by type: | |||||||||||||||||
| Voice/Hybrid | $ | 2,177,992 | $ | 1,594,506 | $ | 1,422,541 | |||||||||||
|
Fully Electronic1
|
520,391 | 443,740 | 410,083 | ||||||||||||||
| Total brokerage revenues | $ | 2,698,383 | $ | 2,038,246 | $ | 1,832,624 | |||||||||||
____________________________________
1Includes Fenics Integrated.
Our position as a leading wholesale financial broker is enhanced by our Hybrid brokerage platform. We believe that the more complex, less liquid markets on which we focus often require significant amounts of personal and attentive service from our brokers. In more mature markets, we offer Fully Electronic execution capabilities to our customers through our platforms, including Fenics and BGC Trader. Our Hybrid platform allows our customers to trade on a Voice, Hybrid or Fully Electronic basis, regardless of whether the trade is OTC or exchange-based, and to benefit from the experience and market intelligence of our worldwide brokerage network. Our electronic capabilities include clearing, settlement, post-trade, and other back-office services as well as straight-through processing for our customers across several products. Furthermore, we benefit from the operational leverage in our Fully Electronic platform. We believe our Voice/Hybrid brokerage approach provides a competitive advantage over competitors who do not offer this full range of technology. We continue to experience strong growth in our Fully Electronic business and we expect this trend to continue; however, the composition of our Fully Electronic business, as a percentage of our overall revenues, may fluctuate due to acquisitions, dispositions, changes in business mix and/or periods of heightened market volatility.
Energy, Commodities, and Shipping
We provide brokerage services for most widely traded energy and commodities products, including futures and OTC products covering refined and crude oil, power and electricity, natural gas, liquefied natural gas, environmental and emissions products, weather derivatives, base metals, coal and soft commodities. We also provide brokerage services associated with the shipping of certain energy and commodities products.
Rates
Our Rates business is focused on government debt, listed and OTC interest rate derivatives, and other interest rate products, which are globally among the largest and most actively traded markets. The main drivers of these markets are global macroeconomic forces such as new issuances, inflation, and government budget and central bank policies.
Foreign Exchange
The foreign exchange market is one of the largest financial markets in the world. Foreign exchange transactions can either be undertaken in the spot market or derivatives market. Our Foreign Exchange business is focused on providing execution services in most major currencies across all foreign exchange products, including spot FX, options, forwards and NDFs.
Credit
We provide our brokerage services in a wide range of credit instruments, including corporate bonds, emerging market bonds, credit default swaps, exotic credit derivatives, asset-back securities, and structured products.
Equities
We provide brokerage services in a range of markets for equity products, including cash equities, equity derivatives (both listed and OTC), equity index futures and options on equity products.
Data, network and post-trade
Fenics Market Data is a supplier of real-time, tradable, indicative, end-of-day and historical market data. Our market data product suite includes fixed income, interest rate derivatives, credit derivatives, FX, FX options, money markets, energy and equity derivatives and structured market data products and services. The data are sourced from our Voice/Hybrid and fully electronic execution operations and made available to financial professionals, research analysts, compliance and surveillance departments, and other market participants via direct data feeds and BGC-hosted FTP environments, as well as via information platforms such as Bloomberg, LSEG Data & Analytics, ICE Data Services, and other select specialist vendors.
Through our network business, we provide customized screen-based market solutions to both related and unrelated parties. Our clients are able to develop a marketplace, trade with their customers and access our network and our intellectual property. We can add advanced functionality to enable our customers to distribute branded products to their customers through online offerings and auctions, including private and reverse auctions, via our trading platform and global network.
As part of our network business, our Lucera® brand delivers high-performance technology solutions designed to be secure and scalable and to power demanding financial applications across several offerings: LumeFX® (distributed FX platform with managed infrastructure and software stack), LumeMarkets™ (multi-asset class aggregation platform), Connect™ (global SDN for rapid provisioning of connectivity to counter-parties), and Compute™ (on-demand, co-located compute services in key financial data centers).
Our post-trade Fenics NDF Match business is an advanced matching platform that helps clients offset their fixing risk in non-deliverable forward portfolios and simplifies the complexities of managing large quantities of derivatives, to help promote sustainable growth, lower systemic risk and improve resiliency in the industry.
On December 31, 2025, we sold our analytics brand, kACE,to smartTrade.
Other Revenues
We earn other revenues from various sources, including underwriting and advisory fees, and the sources described below.
Interest and Dividend Income
We generate interest income primarily from the investment of our daily cash balances, interest earned on securities owned and Reverse Repurchase Agreements. These investments and transactions are generally short-term in nature. We also earn interest income from employee loans, and we earn dividend income on certain marketable securities.
Fees from Related Parties
We earn fees from related parties for technology services and software licenses and for certain administrative and back-office services we provide to affiliates, particularly from Cantor. These administrative and back-office services include office space, utilization of fixed assets, accounting services, operational support, human resources, legal services and information technology.
Expenses
Compensation and Employee Benefits
The majority of our operating costs consist of cash and non-cash compensation expenses, which include base salaries, broker bonuses based on broker production, guaranteed bonuses, other discretionary bonuses, and all related employee benefits and taxes. Our employees consist of brokers, salespeople, executives and other administrative support. The majority of our brokers receive a base salary and a formula bonus based primarily on a pool of brokers' production for a particular product or sales desk, as well as on the individual broker's performance. Members of our sales force receive either a base salary or a draw on commissions. Less experienced salespeople typically receive base salaries and bonuses.
In addition, we currently issue RSUs, as well as other forms of equity-based compensation, to provide liquidity to our employees, to align the interests of our employees and management with those of common stockholders, to help motivate and retain key employees, and to encourage a collaborative culture that drives cross-selling and revenue growth. These awards contain extended vesting schedules which we consider to be highly retentive and that vary based upon compensation level and role (typically three-to-seven-year ratable vesting), which in most cases are largely dependent upon continued service.
Prior to the Corporate Conversion, we issued limited partnership units, as well as other forms of unit-based compensation, including grants of exchangeability of limited partnership units into shares of BGC Class A common stock and grants of shares of our restricted stock, to motivate and retain key employees. These limited partnership units, which could be redeemed at any time for zero, were subject to forfeiture if the non-compete, confidentiality or non-solicit provisions of the BGC Holdings Limited Partnership Agreement related to these awards were violated, were also extremely retentive. In addition, prior to the Corporate Conversion, we paid amounts due to a partner upon termination of service over a number of years in order to ensure compliance with partner obligations.
We also enter into various agreements with certain of our employees, and prior to the Corporate Conversion, partners whereby these individuals receive loans which may be either wholly or in part repaid from the distributions that the individuals receive on some or all of their LPUs in BGC Holdings and Newmark Holdings, prior to the Corporate Conversion, and by distributions that the individuals receive on some or all of their LPUs in Newmark Holdings and any dividends paid on participating RSUs and restricted stock awards, subsequent to the Corporate Conversion. Certain of these loans also may be either wholly or in part repaid from the proceeds of the sale of our employees' shares of BGC Class A common stock. In addition, certain loans may be forgiven over a period of time. The forgivable portion of these loans is recognized as compensation expense over the life of the loan. From time to time, we may also enter into agreements with employees to grant bonus and salary advances or other types of loans. These advances and loans are repayable in timeframes outlined in the underlying agreements. We believe that these loans incentivize and promote retention of our employees.
In addition, we also enter into deferred compensation agreements with employees providing services to us. The costs associated with such plans are generally amortized over the period in which they vest.
See Note 18-"Compensation" to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for more information.
Other Operating Expenses
We have various other operating expenses. We incur leasing, equipment and maintenance expenses for our businesses worldwide. We also incur selling and promotion expenses, which include entertainment, marketing and travel-related expenses. We incur communication expenses for voice and data connections with our clients, clearing agents and general usage; professional and consulting fees for legal, audit and other special projects; and interest expense related to short-term operational funding needs, and notes payable and other borrowings.
Primarily in the U.S., we pay fees to Cantor for performing certain administrative and other support services, including charges for occupancy of office space, utilization of fixed assets and accounting, operations, human resources, legal services and technology infrastructure support. Management believes that these charges are a reasonable reflection of the utilization of services rendered. However, the expenses for these services are not necessarily indicative of the expenses that would have been incurred if we had not obtained these services from Cantor. In addition, these charges may not reflect the costs of services we may receive from Cantor in the future. We incur commissions and floor brokerage fees for clearing, brokerage and other transactional expenses for clearing and settlement services. We also incur various other normal operating expenses.
Other Income (Losses), Net
Gain (Loss) on Divestiture and Sale of Investments
Gain (loss) on divestiture and sale of investments represents the gain or loss we recognize for the divestiture or sale of our investments.
Gains (Losses) on Equity Method Investments
Gains (losses) on equity method investments represent our pro-rata share of the net gains (losses) on investments over which we have significant influence but which we do not control.
Other Income (Loss)
Other Income (loss) is comprised of gains or losses related to fair value adjustments on investments carried under the alternative method. Other Income (loss) also includes realized and unrealized gains or losses related to sales and mark-to-market adjustments on marketable securities and any related hedging transactions when applicable. Acquisition-related fair value adjustments of contingent consideration and miscellaneous recoveries are also included in Other Income (loss).
Provision (Benefit) for Income Taxes
We incur income tax expenses or benefit based on the location, legal structure and jurisdictional taxing authorities of each of our subsidiaries. Certain of our entities are taxed as U.S. partnerships and are subject to the UBT in New York City. U.S. federal and state income tax liability or benefit related to the partnership income or loss, with the exception of UBT, rests with the partners (see Note 2-"Limited Partnership Interests in BGC Holdings and Newmark Holdings" in Part II, Item 8 of this Annual Report on Form 10-K for discussion of partnership interests), rather than the partnership entity. Our Consolidated Financial Statements include U.S. federal, state and local income taxes on our allocable share of the U.S. results of operations. Outside of the U.S., we operate principally through subsidiary corporations subject to local income taxes.
REGULATORY ENVIRONMENT
See "Regulation" in Part I, Item 1 of this Annual Report on Form 10-K for information related to our regulatory environment.
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, 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, 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 December 31, 2025, our front-office headcount was 2,510 brokers, salespeople, managers, and other front-office personnel, up 16.1% from 2,161 a year ago, primarily due to the acquisition of OTC Global. Compared to the prior year, average revenue per front-office employee for the year ended December 31, 2025 increased by 16.4% to $1.2 million from $1.0 million.
FINANCIAL HIGHLIGHTS
Full year 2025 compared to full year 2024:
Income from operations before income taxes was $213.7 million compared to $173.1 million in the prior year period.
Total revenues increased $678.6 million compared to the prior year period, or 30.0%, to $2,941.5 million. Excluding OTC Global, revenues grew $337.0 million, or 14.9%. Brokerage revenues increased by $660.1 million, or 32.4%, due to overall growth across all asset classes:
•ECS increased $427.4 million, or 88.4%, driven by the operations of OTC Global. Excluding OTC Global, ECS grew by $100.9 million, or 20.9%;
•Rates increased $109.2 million, or 15.9%;
•FX increased $69.3 million, or 19.3%;
•Credit increased $8.2 million, or 2.9%; and
•Equities increased $46.0 million, or 20.6%.
There was an increase of $12.0 million, or 9.5% in Data, network and post-trade revenues, primarily driven by Lucera and Fenics Market Data and OTC Global, partially offset by lower post-trade revenues due to the sale of BGC's Capitalab business in the fourth quarter of 2024. Excluding Capitalab, Data, network and post-trade revenues grew by $17.0 million, or 13.9%. There was an increase of $10.9 million, or 52.8%, in Other revenues, primarily driven by the operations of OTC Global and increased consulting income. There was a decrease of $2.4 million, or 4.3% in Interest and dividend income, primarily due to lower dividend amounts received from our equity securities, which are included in "Other assets" in our Consolidated Statements of Financial Condition, offset by higher balances earning interest.
Total expenses increased $634.9 million, or 29.1%, to $2,817.2 million compared to the prior year period, primarily driven by the operations of OTC Global, which we acquired on April 1, 2025. We recorded total expenses of $308.8 million for the year ended December 31, 2025 related to the operations of OTC Global. Total compensation and employee benefits expenses increased by $492.7 million, which was primarily due to the operations of OTC Global, higher commissionable revenues, expenses related to our current cost reduction program, costs associated with the acceleration of certain employee loans, and the weaker U.S. Dollar during the period. The $142.2 million increase in non-compensation expenses was primarily driven by the operations of OTC Global and an increase in Interest expense related to the BGC Group 6.150% Senior Notes issued in April 2025, and the BGC Group 6.600% Senior Notes issued in June 2024. The increase in Interest expense was partially offset by a reduction of interest expense due to the repayments in full of the $255.5 million aggregate principal amount of BGC Group 3.750% Senior Notes and the $44.5 million aggregate principal amount of BGC Partners 3.750% Senior Notes on October 1, 2024. Non-compensation expenses also increased year over year, primarily due to higher Selling and promotion and Communication costs which were primarily driven by the operations of OTC Global.
Total other income (losses), net decreased $3.1 million, or 3.4% to $89.5 million, which was largely driven by a $38.8 million gain on the sale of Capitalab and $36.6 million unrealized gain recorded for the year ended December 31, 2024 related to fair value adjustments on investments carried under the measurement alternative, offset by a $66.7 million gain on the sale of kACE recorded for the year ended December 31, 2025.
RESULTS OF OPERATIONS
The following table sets forth our Consolidated Statements of Operations data expressed as a percentage of total revenues for the periods indicated (in thousands):
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
|
Actual Results |
Percentage of Total Revenues |
Actual Results |
Percentage of Total Revenues |
Actual Results |
Percentage of Total Revenues |
||||||||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||||||||
| Commissions | $ | 2,257,553 | 76.7 | % | $ | 1,648,817 | 72.9 | % | $ | 1,464,524 | 72.3 | % | |||||||||||||||||||||||
| Principal transactions | 440,830 | 15.0 | 389,429 | 17.2 | 368,100 | 18.2 | |||||||||||||||||||||||||||||
| Total brokerage revenues | 2,698,383 | 91.7 | 2,038,246 | 90.1 | 1,832,624 | 90.5 | |||||||||||||||||||||||||||||
| Fees from related parties | 18,713 | 0.6 | 20,728 | 0.9 | 15,968 | 0.8 | |||||||||||||||||||||||||||||
|
Data, network and post-trade
|
138,980 | 4.7 | 126,963 | 5.6 | 111,470 | 5.5 | |||||||||||||||||||||||||||||
| Interest and dividend income | 53,825 | 1.8 | 56,223 | 2.5 | 45,422 | 2.2 | |||||||||||||||||||||||||||||
| Other revenues | 31,559 | 1.2 | 20,658 | 0.9 | 19,917 | 1.0 | |||||||||||||||||||||||||||||
| Total revenues | 2,941,460 | 100.0 | 2,262,818 | 100.0 | 2,025,401 | 100.0 | |||||||||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||||||||||||||
| Compensation and employee benefits | 1,656,011 | 56.3 | 1,123,747 | 49.7 | 992,603 | 49.1 | |||||||||||||||||||||||||||||
| Equity-based compensation and allocations of net income to limited partnership units and FPUs¹ | 329,588 | 11.2 | 369,143 | 16.3 | 355,378 | 17.5 | |||||||||||||||||||||||||||||
| Total compensation and employee benefits | 1,985,599 | 67.5 | 1,492,890 | 66.0 | 1,347,981 | 66.6 | |||||||||||||||||||||||||||||
| Occupancy and equipment | 184,210 | 6.3 | 169,238 | 7.5 | 162,743 | 8.0 | |||||||||||||||||||||||||||||
| Fees to related parties | 38,296 | 1.3 | 32,529 | 1.5 | 32,649 | 1.6 | |||||||||||||||||||||||||||||
| Professional and consulting fees | 67,037 | 2.3 | 64,949 | 2.9 | 60,398 | 3.0 | |||||||||||||||||||||||||||||
| Communications | 136,433 | 4.5 | 120,624 | 5.3 | 114,143 | 5.6 | |||||||||||||||||||||||||||||
| Selling and promotion | 105,237 | 3.6 | 70,466 | 3.1 | 61,884 | 3.1 | |||||||||||||||||||||||||||||
| Commissions and floor brokerage | 70,259 | 2.4 | 70,798 | 3.1 | 61,523 | 3.0 | |||||||||||||||||||||||||||||
| Interest expense | 125,318 | 4.3 | 91,075 | 4.0 | 77,231 | 3.8 | |||||||||||||||||||||||||||||
| Other expenses | 104,782 | 3.6 | 69,694 | 3.1 | 74,278 | 3.7 | |||||||||||||||||||||||||||||
| Total expenses | 2,817,171 | 95.8 | 2,182,263 | 96.5 | 1,992,830 | 98.4 | |||||||||||||||||||||||||||||
| Other income (losses), net: | |||||||||||||||||||||||||||||||||||
|
Gains (losses) on divestitures and sale of investments |
66,718 | 2.3 | 38,769 | 1.7 | - | - | |||||||||||||||||||||||||||||
| Gains (losses) on equity method investments | 8,328 | 0.3 | 8,430 | 0.4 | 9,152 | 0.5 | |||||||||||||||||||||||||||||
| Other income (loss) | 14,412 | 0.4 | 45,389 | 2.0 | 15,986 | 0.7 | |||||||||||||||||||||||||||||
| Total other income (losses), net | 89,458 | 3.0 | 92,588 | 4.1 | 25,138 | 1.2 | |||||||||||||||||||||||||||||
| Income (loss) from operations before income taxes | 213,747 | 7.2 | 173,143 | 7.6 | 57,709 | 2.8 | |||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 67,208 | 2.2 | 49,915 | 2.2 | 18,934 | 0.9 | |||||||||||||||||||||||||||||
| Consolidated net income (loss) | $ | 146,539 | 5.0 | % | $ | 123,228 | 5.4 | % | $ | 38,775 | 1.9 | % | |||||||||||||||||||||||
|
Less: Net income (loss) from operations attributable to noncontrolling interest in subsidiaries
|
(8,423) | (0.3) | (3,760) | (0.2) | 2,510 | 0.1 | |||||||||||||||||||||||||||||
| Net income (loss) available to common stockholders | $ | 154,962 | 5.3 | % | $ | 126,988 | 5.6 | % | $ | 36,265 | 1.8 | % | |||||||||||||||||||||||
________________________
1The components of Equity-based compensation and allocations of net income to limited partnership units and FPUs are as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
|
Actual Results |
Percentage of Total Revenues |
Actual Results |
Percentage of Total Revenues |
Actual Results |
Percentage of Total Revenues |
||||||||||||||||||||||||||||||
|
Issuance of common stock and grants of exchangeability
|
$ | 143,329 | 4.9 | % | $ | 184,667 | 8.1 | % | $ | 171,646 | 8.5 | % | |||||||||||||||||||||||
|
Allocations of net income and dividend equivalents
|
2,517 | 0.1 | 4,196 | 0.2 | 6,302 | 0.3 | |||||||||||||||||||||||||||||
| LPU amortization | - | - | - | - | 40,878 | 2.0 | |||||||||||||||||||||||||||||
|
RSU, RSU Tax Account, and restricted stock amortization
|
183,742 | 6.2 | 180,280 | 8.0 | 136,552 | 6.7 | |||||||||||||||||||||||||||||
| Equity-based compensation and allocations of net income to limited partnership units and FPUs | $ | 329,588 | 11.2 | % | $ | 369,143 | 16.3 | % | $ | 355,378 | 17.5 | % | |||||||||||||||||||||||
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Revenues
Brokerage Revenues
Total brokerage revenues increased by $660.1 million, or 32.4%, to $2,698.4 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024. Commissions revenues increased by $608.7 million, or 36.9%, to $2,257.6 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024. Principal transactions revenues increased by $51.4 million, or 13.2%, to $440.8 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024.
Our ECS revenues increased by $427.4 million, or 88.4%, to $910.7 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024, which was primarily driven by OTC Global and strong organic growth across the broader energy complex and our shipping business. Excluding OTC Global, ECS revenues grew by 20.9% for the year ended December 31, 2025 as compared to the year ended December 31, 2024.
Our Rates revenues increased by $109.2 million, or 15.9%, to $794.2 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024, reflecting higher volumes across all major interest rate products, including strong double-digit growth in G10 interest rate products, emerging market products and repo products.
Our FX revenues increased by $69.3 million, or 19.3%, to $428.0 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024, which was primarily due to strong growth in emerging market currencies and G10 FX Options volumes.
Our Credit revenues increased by $8.2 million, or 2.9%, to $295.6 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024, which was primarily driven by higher emerging market, European credit and credit derivatives volumes.
Our Equities revenues increased by $46.0 million, or 20.6%, to $269.9 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024, which was primarily due to global equity volatility and strong market share gains.
Fees from Related Parties
Fees from related parties decreased by $2.0 million, or 9.7% to $18.7 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024, which was primarily driven by a decrease in revenues in connection with services provided to Cantor, such as accounting, occupancy, and legal.
Data, Network and Post-Trade
Data, network and post-trade revenues increased by $12.0 million, or 9.5%, to $139.0 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024. This increase was primarily driven by strong revenue growth across Lucera and Fenics Market Data and the operations of OTC Global, 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 13.9% year-over-year.
Interest and Dividend Income
Interest and dividend income decreased by $2.4 million, or 4.3%, to $53.8 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024. This was primarily driven by a decrease in dividend income from the Company's equity interests that are recorded under the measurement alternative guidance and a decrease in borrowings from Cantor under the BGC Credit Agreement, partially offset by higher interest income driven by increased interest-earning balances.
Other Revenues
Other revenues increased by $10.9 million, or 52.8%, to $31.6 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily driven by the operations of OTC Global and an increase in consulting income.
Expenses
Compensation and Employee Benefits
Compensation and employee benefits expense increased by $532.3 million, or 47.4%, to $1,656.0 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024. The increase was primarily attributable to the operations of OTC Global, with additional increases from higher commissionable revenues, cost reduction charges, the acceleration of certain employee loans and the weakening of the U.S. Dollar.
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 $39.6 million, or 10.7%, to $329.6 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024 primarily due to a $54.4 million charge for the redemption of Newmark Holdings LPUs, held by a former BGC executive officer who was still employed by the Company, in the year ended December 31, 2024. This was partially offset by an increase in issuance of common stock.
Occupancy and Equipment
Occupancy and equipment expense increased by $15.0 million, or 8.8%, to $184.2 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024. This increase was primarily driven by the operations of OTC Global and an increase in software licenses.
Fees to Related Parties
Fees to related parties increased by $5.8 million, or 17.7%, to $38.3 million for the year ended December 31, 2025 as compared to the year ended December 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 $2.1 million, or 3.2%, to $67.0 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024, which was primarily driven by the operations of OTC Global and increases in audit, tax, consulting charges and regulatory fees.
Communications
Communications expense increased by $15.8 million, or 13.1%, to $136.4 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024, which was primarily driven by the operations of OTC Global and increases in various terminal and line service costs across market data and communications.
Selling and Promotion
Selling and promotion expense increased by $34.8 million, or 49.3%, to $105.2 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024, which was primarily driven by the operations of OTC Global and an increase in business related travel and client entertainment.
Commissions and Floor Brokerage
Commissions and floor brokerage expense decreased by $0.5 million, or 0.8%, to $70.3 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024, which was primarily driven by volume and composition of trades in the year ended December 31, 2025.
Interest Expense
Interest expense increased by $34.2 million, or 37.6%, to $125.3 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024, which was primarily driven by the issuance of the BGC Group 6.150% Senior Notes in April 2025 and the BGC Group 6.600% Senior Notes in June 2024, partially offset by a reduction of interest expense due to the repayments in full of 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 increased by $35.1 million, or 50.3%, to $104.8 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024, which was primarily due to the operations of OTC Global, as well as higher amortization expense related to the acquisitions of OTC Global and Sage. Additionally, there were increases in reserves for certain audit and litigation matters.
Other Income (Losses), Net
Gains (Losses) on Divestitures and Sale of Investments
Gains (losses) on divestitures and sale of investments increased by $27.9 million, or 72.1%, to $66.7 million, for the year ended December 31, 2025 as compared to the year ended December 31, 2024. The increase was driven by the gain recognized on the sale of kACE in December 2025 for $66.7 million. By comparison, for the year ended December 31, 2024, the Company recorded a gain of $38.8 million related to the sale of Capitalab in October 2024.
Gains (Losses) on Equity Method Investments
Gains (losses) on equity method investments decreased by $0.1 million, or 1.2%, to a gain of $8.3 million due to the results of our equity method investees, for the year ended December 31, 2025 as compared to a gain of $8.4 million for the year ended December 31, 2024.
Other Income (Loss)
Other income (loss) decreased by $31.0 million, or 68.2%, to $14.4 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024, which was primarily driven by a $36.6 million unrealized gain for the year ended December 31, 2024 compared to $7.1 million unrealized gain for the year ended December 31, 2025 related to fair value adjustments on investments carried under the measurement alternative.
Provision (Benefit) for Income Taxes
Provision (benefit) for income taxes increased by $17.3 million, or 34.6%, to $67.2 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024. The increase was primarily driven by a change in the geographical and business mix of earnings, which can impact 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 $4.7 million, or 124.0%, to a loss of $8.4 million for the year ended December 31, 2025 as compared to a loss of $3.8 million for the year ended December 31, 2024.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
Revenues
Brokerage Revenues
Total brokerage revenues increased by $205.6 million, or 11.2%, to $2,038.2 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. Commission revenues increased by $184.3 million, or 12.6%, to $1,648.8 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. Principal transactions revenues increased by $21.3 million, or 5.8%, to $389.4 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Our brokerage revenues from ECS increased by $97.0 million, or 25.1%, to $483.2 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, which was primarily driven by strong revenue growth across our energy complex, environmental products, and the acquisition of Sage in the fourth quarter.
Our brokerage revenues from Rates increased by $74.6 million, or 12.2%, to $685.0 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, reflecting higher volumes across the business including interest rate derivative and listed products.
Our FX revenues increased by $44.0 million, or 14.0%, to $358.7 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, which was primarily driven by emerging market products and higher FX options volumes.
Our Credit revenues increased by $2.6 million, or 0.9%, to $287.4 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, which was primarily driven by higher trading volumes across emerging market and European credit products, partially offset by lower Asian credit activity.
Our brokerage revenues from Equities decreased by $12.6 million, or 5.3%, to $223.9 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to lower equity derivative trading volumes, partially offset by higher European and U.S. cash equity activity.
Fees from Related Parties
Fees from related parties increased by $4.8 million, or 29.8%, to $20.7 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, which was primarily driven by an increase in revenues in connection with accounting, occupancy and legal services provided to Cantor.
Data, Network and Post-Trade
Data, network and post-trade revenues increased by $15.5 million, or 13.9%, to $127.0 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. This increase was primarily driven by strong subscription-based revenue growth across Lucera and Fenics Market Data, as a result of expanding both our client base and our offerings. Revenue growth was partially offset by lower post-trade revenues due to the sale of Capitalab in the fourth quarter of 2024.
Interest and Dividend Income
Interest and dividend income increased by $10.8 million, or 23.8%, to $56.2 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. This was primarily driven by an increase in interest income on bank deposits and money market funds, borrowings by Cantor under the BGC Credit Agreement, which were primarily driven by changing interest rates and larger balances.
Other Revenues
Other revenues increased by $0.7 million, or 3.7%, to $20.7 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily driven by an increase in dividend income on investments and consulting income.
Expenses
Compensation and Employee Benefits
Compensation and employee benefits expense increased by $131.1 million, or 13.2%, to $1,123.7 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. 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 increased by $13.8 million, or 3.9%, to $369.1 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. For the year ended December 31, 2024, the Company incurred compensation charges of $27.1 million and $54.4 million, for the acceleration of restricted stock awards and redemption of Newmark Holdings LPUs, respectively, held by a former BGC executive officer who was still employed by the Company. The year over year increase was partially offset by the issuance of common stock and grants of exchangeability, which included, for the year ended December 31, 2023, a $60.9 million charge for the redemption of certain non-exchangeable limited partnership units in connection with the issuance of shares of BGC Class A common stock and the accompanying tax payments related to the Corporate Conversion in the year ended December 31, 2023.
Occupancy and Equipment
Occupancy and equipment expense increased by $6.5 million, or 4.0%, to $169.2 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. This increase was primarily driven by an increase in software licenses and costs for consolidating BGC's London office space.
Fees to Related Parties
Fees to related parties decreased by $0.1 million, or 0.4%, to $32.5 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. Fees to related parties are 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 $4.6 million, or 7.5%, to $64.9 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily driven by an increase in consulting and other professional services and fees.
Communications
Communications expense increased by $6.5 million, or 5.7%, to $120.6 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, which was primarily driven by increases in various terminal and line service costs across market data and communications.
Selling and Promotion
Selling and promotion expense increased by $8.6 million, or 13.9%, to $70.5 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, 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 $9.3 million, or 15.1%, to $70.8 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily driven by a higher number of trades in the year ended December 31, 2024.
Interest Expense
Interest expense increased by $13.8 million, or 17.9%, to $91.1 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily driven by interest expense related to the BGC Partners 8.000% Senior Notes issued on May 25, 2023 and the BGC Group 8.000% Senior Notes issued October 6, 2023 as part of the Exchange Offer, the BGC Group 6.600% Senior Notes issued on June 10, 2024, and higher borrowings on both the Revolving Credit Agreement and BGC Credit Agreement, partially offset by a decrease in interest expense related to the BGC Partners 3.750% Senior Notes and BGC Group 3.750% Senior Notes due to repayment in full on October 1, 2024.
Other Expenses
Other expenses decreased by $4.6 million, or 6.2%, to $69.7 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, which was primarily due to a decrease in reserves related to potential losses associated with Russia's Invasion of Ukraine and other provisions, partially offset by an increase in revaluation expense and Charity Day contributions.
Other Income (Losses), Net
Gains (Losses) on Divestitures and Sale of Investments
Gains (losses) on divestitures and sale of investments increased by $38.8 million, to a gain of $38.8 million, for the year ended December 31, 2024 as compared to no gain for the year ended December 31, 2023, primarily as a result of the sale of Capitalab in October 2024.
Gains (Losses) on Equity Method Investments
Gains (losses) on equity method investments decreased by $0.7 million, or 7.9%, to a gain of $8.4 million due to the results of our equity method investees, for the year ended December 31, 2024 as compared to a gain of $9.2 million for the year ended December 31, 2023.
Other Income (Loss)
Other income (loss) increased by $29.4 million, or 183.9%, to $45.4 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily driven by a $36.6 million unrealized gain recorded related to fair value adjustments on investments carried under the measurement alternative offset by a decrease in other recoveries.
Provision (Benefit) for Income Taxes
Provision (benefit) for income taxes increased by $31.0 million, or 163.6%, to $49.9 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. The increase was primarily driven by an increase in 2024 pretax earnings, 2023 one-time benefit in revaluation of deferred tax balances due to ownership interest change, as a result of the Corporate Conversion, and a change in the geographical and business mix of earnings, which can impact 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 $6.3 million, or 249.8%, to a loss of $3.8 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023 as a result of losses recognized by non-controlling interest compared to the prior year.
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.
|
December 31, 2025 |
September 30, 2025 |
June 30, 2025 |
March 31, 2025 |
December 31, 2024 |
September 30, 2024 |
June 30, 2024 |
March 31, 2024 |
||||||||||||||||||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
| Commissions | $ | 590,187 | $ | 573,159 | $ | 599,496 | $ | 494,711 | $ | 431,469 | $ | 407,095 | $ | 395,081 | $ | 415,172 | |||||||||||||||||||||||||||||||
| Principal transactions | 104,398 | 99,951 | 120,403 | 116,078 | 84,590 | 93,551 | 98,439 | 112,849 | |||||||||||||||||||||||||||||||||||||||
| Fees from related parties | 4,597 | 4,453 | 5,241 | 4,422 | 6,558 | 5,106 | 4,643 | 4,421 | |||||||||||||||||||||||||||||||||||||||
| Data, network and post-trade | 36,669 | 34,349 | 35,462 | 32,500 | 32,587 | 32,661 | 30,812 | 30,903 | |||||||||||||||||||||||||||||||||||||||
| Interest and dividend income | 12,889 | 14,039 | 15,268 | 11,629 | 12,370 | 16,944 | 17,145 | 9,764 | |||||||||||||||||||||||||||||||||||||||
| Other revenues | 7,627 | 10,898 | 8,134 | 4,900 | 4,758 | 5,754 | 4,641 | 5,505 | |||||||||||||||||||||||||||||||||||||||
| Total revenues | 756,367 | 736,849 | 784,004 | 664,240 | 572,332 | 561,111 | 550,761 | 578,614 | |||||||||||||||||||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
| Compensation and employee benefits | 497,638 | 400,262 | 416,463 | 341,648 | 289,608 | 271,307 | 271,990 | 290,842 | |||||||||||||||||||||||||||||||||||||||
| Equity-based compensation and allocations of net income to limited partnership units and FPUs | 95,892 | 74,447 | 83,926 | 75,323 | 121,165 | 85,690 | 66,207 | 96,081 | |||||||||||||||||||||||||||||||||||||||
| Total compensation and employee benefits | 593,530 | 474,709 | 500,389 | 416,971 | 410,773 | 356,997 | 338,197 | 386,923 | |||||||||||||||||||||||||||||||||||||||
| Occupancy and equipment | 47,549 | 47,614 | 46,478 | 42,569 | 42,278 | 45,195 | 40,959 | 40,806 | |||||||||||||||||||||||||||||||||||||||
| Fees to related parties | 10,191 | 9,346 | 10,409 | 8,350 | 9,054 | 8,251 | 8,009 | 7,215 | |||||||||||||||||||||||||||||||||||||||
| Professional and consulting fees | 17,269 | 18,303 | 15,796 | 15,669 | 17,701 | 20,184 | 12,805 | 14,259 | |||||||||||||||||||||||||||||||||||||||
| Communications | 35,517 | 35,628 | 34,659 | 30,629 | 30,028 | 30,416 | 30,172 | 30,008 | |||||||||||||||||||||||||||||||||||||||
| Selling and promotion | 30,525 | 26,461 | 28,810 | 19,441 | 18,605 | 17,376 | 17,714 | 16,771 | |||||||||||||||||||||||||||||||||||||||
| Commissions and floor brokerage | 18,737 | 17,340 | 16,690 | 17,492 | 18,453 | 17,539 | 17,414 | 17,392 | |||||||||||||||||||||||||||||||||||||||
| Interest expense | 33,040 | 33,823 | 33,801 | 24,654 | 24,263 | 25,125 | 21,551 | 20,136 | |||||||||||||||||||||||||||||||||||||||
| Other expenses | 26,997 | 42,384 | 24,654 | 10,747 | 14,847 | 26,955 | 13,334 | 14,558 | |||||||||||||||||||||||||||||||||||||||
| Total expenses | 813,355 | 705,608 | 711,686 | 586,522 | 586,002 | 548,038 | 500,155 | 548,068 | |||||||||||||||||||||||||||||||||||||||
| Other income (losses), net: | |||||||||||||||||||||||||||||||||||||||||||||||
| Gain (loss) on divestiture and sale of investments | 66,718 | - | - | - | 38,769 | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Gains (losses) on equity method investments | 1,301 | 2,290 | 2,379 | 2,358 | 1,536 | 2,360 | 2,744 | 1,790 | |||||||||||||||||||||||||||||||||||||||
| Other income (loss) | 13,964 | (35) | 581 | (98) | 537 | 4,276 | 1,814 | 38,762 | |||||||||||||||||||||||||||||||||||||||
| Total other income (losses), net | 81,983 | 2,255 | 2,960 | 2,260 | 40,842 | 6,636 | 4,558 | 40,552 | |||||||||||||||||||||||||||||||||||||||
| Income (loss) from operations before income taxes | 24,995 | 33,496 | 75,278 | 79,978 | 27,172 | 19,709 | 55,164 | 71,098 | |||||||||||||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 14,162 | 7,434 | 19,063 | 26,549 | 3,873 | 5,996 | 17,989 | 22,057 | |||||||||||||||||||||||||||||||||||||||
| Consolidated net income (loss) | $ | 10,833 | $ | 26,062 | $ | 56,215 | $ | 53,429 | $ | 23,299 | $ | 13,713 | $ | 37,175 | $ | 49,041 | |||||||||||||||||||||||||||||||
| Less: Net income (loss) attributable to noncontrolling interest in subsidiaries | (3,538) | (1,820) | (1,330) | (1,735) | (1,904) | (1,034) | (653) | (169) | |||||||||||||||||||||||||||||||||||||||
| Net income (loss) available to common stockholders | $ | 14,371 | $ | 27,882 | $ | 57,545 | $ | 55,164 | $ | 25,203 | $ | 14,747 | $ | 37,828 | $ | 49,210 | |||||||||||||||||||||||||||||||
The table below details our brokerage revenues by product category for the indicated periods (dollar amounts in thousands):
|
December 31, 2025 |
September 30, 2025 |
June 30, 2025 |
March 31, 2025 |
December 31, 2024 |
September 30, 2024 |
June 30, 2024 |
March 31, 2024 |
||||||||||||||||||||||||||||||||||||||||
| Brokerage revenue by product: | |||||||||||||||||||||||||||||||||||||||||||||||
|
ECS
|
$ | 257,451 | $ | 241,622 | $ | 261,640 | $ | 149,937 | $ | 134,104 | $ | 112,921 | $ | 117,743 | $ | 118,464 | |||||||||||||||||||||||||||||||
| Rates | 197,352 | 195,328 | 200,579 | 200,945 | 169,591 | 174,313 | 166,044 | 175,085 | |||||||||||||||||||||||||||||||||||||||
| FX | 102,841 | 106,672 | 108,452 | 110,035 | 93,648 | 92,076 | 88,946 | 84,023 | |||||||||||||||||||||||||||||||||||||||
| Credit | 64,284 | 69,085 | 75,282 | 86,936 | 62,404 | 68,000 | 69,381 | 87,592 | |||||||||||||||||||||||||||||||||||||||
| Equities | 72,657 | 60,403 | 73,946 | 62,936 | 56,313 | 53,336 | 51,406 | 62,857 | |||||||||||||||||||||||||||||||||||||||
| Total brokerage revenues | $ | 694,585 | $ | 673,110 | $ | 719,899 | $ | 610,789 | $ | 516,060 | $ | 500,646 | $ | 493,520 | $ | 528,021 | |||||||||||||||||||||||||||||||
|
Brokerage revenue by
product (percentage):
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
ECS
|
37.1 | % | 35.9 | % | 36.3 | % | 24.5 | % | 26.0 | % | 22.6 | % | 23.9 | % | 22.4 | % | |||||||||||||||||||||||||||||||
| Rates | 28.4 | 29.0 | 27.9 | 33.0 | 32.9 | 34.7 | 33.6 | 33.2 | |||||||||||||||||||||||||||||||||||||||
| FX | 14.8 | 15.8 | 15.1 | 18.0 | 18.1 | 18.4 | 18.0 | 15.9 | |||||||||||||||||||||||||||||||||||||||
| Credit | 9.3 | 10.3 | 10.5 | 14.2 | 12.1 | 13.6 | 14.1 | 16.6 | |||||||||||||||||||||||||||||||||||||||
| Equities | 10.5 | 9.0 | 10.3 | 10.3 | 10.9 | 10.7 | 10.4 | 11.9 | |||||||||||||||||||||||||||||||||||||||
| Total brokerage revenues | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||||||||||||||||||
| Brokerage revenue by type: | |||||||||||||||||||||||||||||||||||||||||||||||
| Voice/Hybrid | $ | 567,360 | $ | 547,434 | $ | 592,534 | $ | 470,664 | $ | 406,545 | $ | 391,264 | $ | 387,101 | $ | 409,597 | |||||||||||||||||||||||||||||||
|
Fully Electronic1
|
127,225 | 125,676 | 127,365 | 140,125 | 109,515 | 109,382 | 106,419 | 118,424 | |||||||||||||||||||||||||||||||||||||||
| Total brokerage revenues | $ | 694,585 | $ | 673,110 | $ | 719,899 | $ | 610,789 | $ | 516,060 | $ | 500,646 | $ | 493,520 | $ | 528,021 | |||||||||||||||||||||||||||||||
____________________________
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 December 31, 2025 were $4.4 billion, an increase of 22.8% as compared to December 31, 2024. The increase in total assets was driven primarily by the acquisition of OTC Global, an increase in Receivables from broker-dealers, clearing organizations, customers and related broker-dealers, Accrued commissions and other receivables, net, Loans, forgivable loans and other receivables from employees and partners, net, and Cash and cash equivalents. 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 December 31, 2025 of $851.5 million, and our Liquidity as of December 31, 2025 of $979.1 million. See "-Liquidity Analysis" below for a further discussion of our Liquidity and a reconciliation to the most comparable GAAP financial measure. Our Financial instruments owned, at fair value, were $127.6 million as of December 31, 2025, compared to $186.2 million as of December 31, 2024.
Funding
Our funding base consists of longer-term capital (equity and notes payable) 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 $979.1 million as of December 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 twelve months ended December 31, 2025, we repurchased 30.2 million shares of BGC Class A common stock for aggregate consideration of $281.5 million, representing a weighted-average price per share of $9.32.
Our current capital allocation priorities are to return capital to stockholders and to continue investing in the growth of our business. While we paid quarterly dividends of $0.02 per share in 2025, and on February 11, 2026, when our Board declared a $0.02 per share dividend for the fourth quarter of 2025, we plan to continue to prioritize share repurchases over dividends and distributions. As of February 27, 2026, we have repurchased an additional 0.2 million shares of BGC Class A common stock during the first quarter for aggregate consideration of $2.3 million, representing a weighted-average price per share of $9.17.
Notes Payable and Other Borrowings
Unsecured Senior Revolving Credit Agreement
On March 12, 2024, we 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 3, 2025, we repaid in full the $550.0 million of borrowings outstanding under the Revolving Credit Agreement. On May 13, 2025, we borrowed $140.0 million under the Revolving Credit Agreement, and on June 13, 2025, we borrowed an additional $15.0 million, for general corporate purposes. On June 30, 2025, we repaid $70.0 million of borrowings outstanding under the Revolving Credit Agreement. On September 30, 2025, we repaid in full the $85.0 million of borrowings outstanding under the Revolving Credit Agreement. On December 12, 2025, we borrowed $240.0 million under the Revolving Credit Agreement.
On April 26, 2024, we amended and restated the Revolving Credit Agreement, to, among other things, extend the maturity date to April 26, 2027, and provide us 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, we 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 December 31, 2025 and 2024, there were $240.0 million and $200.0 million, respectively, of borrowings outstanding under the Revolving Credit Agreement. During the years ended December 31, 2025, 2024, and 2023, we recorded interest expense related to the Revolving Credit Agreement of $10.2 million, $12.2 million and $4.4 million, respectively. BGC Partners did not record any interest expense related to the Revolving Credit Agreement for the years ended December 31, 2025 and 2024. BGC Partners recorded interest expense related to the Revolving Credit Agreement of $6.9 million for the year ended December 31, 2023.
See Note 17-"Notes Payable and Other Borrowings" to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding our Revolving Credit Agreement.
BGC Credit Agreement with Cantor
On March 8, 2024, we 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, we 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, we 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. The average interest rate on borrowings under this facility was 6.92% for the year ended December 31, 2024. As of both December 31, 2024 and 2023, there were no borrowings by us outstanding under the BGC Credit Agreement. We recorded $1.1 million of interest expense related to the BGC Credit Agreement for the year ended December 31, 2024. We did not record any interest expense related to the BGC Credit Agreement for the year ended December 31, 2023.
On June 10, 2024, Cantor borrowed $180.0 million from us under the BGC Credit Agreement. On July 31, 2024, Cantor made a partial repayment of $18.0 million to us of the $180.0 million borrowed from us under the BGC Credit Agreement. On September 25, 2024, Cantor made an additional partial repayment of $12.0 million to us of the initial $180.0 million borrowed from us under the BGC Credit Agreement. On October 1, 2024, Cantor repaid in full the remaining $150.0 million of borrowings outstanding to us under the BGC Credit Agreement, plus accrued interest. As of both December 31, 2024 and 2023, there were no borrowings outstanding by Cantor under the BGC Credit Agreement. The average interest rate on borrowings under this facility was 7.13% for the year ended December 31, 2024. We recorded interest income related to the BGC Credit Agreement of $3.8 million for the year ended December 31, 2024. We did not record any interest income related to the BGC Credit Agreement for the year ended December 31, 2023.
On April 4, 2025, Cantor borrowed $120.0 million from us under the BGC Credit Agreement. Cantor partially repaid us $15.0 million on April 14, 2025 and $28.0 million on June 5, 2025. On June 30, 2025, Cantor repaid in full to us the outstanding principal of $77.0 million borrowed from us under the BGC Credit Agreement, plus accrued interest. These borrowings were not considered FICC-GSD Margin Loans. As of December 31, 2025, there were no borrowings outstanding by Cantor under the BGC Credit Agreement. The average interest rate on borrowings under this facility was 6.17% for the year ended December 31, 2025. We recorded interest income related to the BGC Credit Agreement of $1.5 million for the year ended December 31, 2025.
On November 12, 2025, we borrowed $20.0 million from Cantor under the BGC Credit Agreement for general corporate purposes. As of December 31, 2025, we had $20.0 million outstanding under the BGC Credit Agreement. We recorded $0.2 million of interest expense related to the BGC Credit Agreement during the year ended December 31, 2025. The average interest rate on borrowings under this facility was 5.45% for the year ended December 31, 2025. On January 9, 2026, we repaid in full the principal and interest related to the $20.0 million of borrowings outstanding under the BGC Credit Agreement.
See "-Liquidity and Capital Resources-Balance Sheet" herein, and Note 13-"Related Party Transactions" and Note 17-"Notes Payable and Other Borrowings" to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding our BGC Credit Agreement with Cantor.
5.375% Senior Notes due July 24, 2023
On July 24, 2023, BGC Partners repaid the $450.0 million principal amount plus accrued interest on the BGC Partners 5.375% Senior Notes using the proceeds from the issuance of the BGC Partners 8.000% Senior Notes, cash on hand and borrowings under the Revolving Credit Agreement. BGC Partners recorded interest expense related to the BGC Partners 5.375% Senior Notes of $14.5 million during the year ended December 31, 2023.
Exchange Offer
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.
See Note 17-"Notes Payable and Other Borrowings" to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K 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, we 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.
BGC Group recorded interest expense related to the BGC Group 3.750% Senior Notes of $7.9 million and $2.6 million during the years ended December 31, 2024 and 2023, respectively. BGC Partners recorded interest expense related to the BGC Partners 3.750% Senior Notes of $1.3 million and $9.5 million during the years ended December 31, 2024 and 2023, respectively.
4.375% Senior Notes due December 15, 2025
The BGC Group 4.375% Senior Notes and the BGC Partners 4.375% Senior Notes matured on December 15, 2025. On December 15, 2025, we repaid the $288.2 million aggregate principal amount outstanding plus accrued interest on the BGC Group 4.375% Senior Notes and the $11.8 million aggregate principal amount outstanding plus accrued interest on the BGC Partners 4.375% Senior Notes using cash on hand and borrowings under the Revolving Credit Agreement.
BGC Group recorded interest expense related to the BGC Group 4.375% Senior Notes of $12.8 million, $13.3 million and $3.3 million during the years ended December 31, 2025, 2024 and 2023, respectively. BGC Partners recorded interest expense related to the BGC Partners 4.375% Senior Notes of $0.5 million, $0.5 million and $10.5 million during the years ended December 31, 2025, 2024 and 2023, 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 December 31, 2025 and 2024. BGC Group recorded interest expense related to the BGC Group 8.000% Senior Notes of $28.5 million, $28.5 million and $7.1 million during the years ended December 31, 2025, 2024 and 2023, respectively.
On August 21, 2024, we repurchased $0.5 million of outstanding aggregate principal amount, 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 December 31, 2025 and 2024, respectively. BGC Partners recorded interest expense related to the BGC Partners 8.000% Senior Notes of $0.2 million, $0.2 million and $10.0 million, during the years ended December 31, 2025, 2024 and 2023, 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 December 31, 2025 and 2024. BGC Group recorded interest expense related to the BGC Group 6.600% Senior Notes of $34.0 million and $18.9 million the years ended December 31, 2025 and 2024. BGC Group did not record interest expense related to the BGC Group 6.600% Senior Notes for the year ended December 31, 2023.
6.150% Senior Notes due April 2, 2030
The outstanding aggregate principal amount of BGC Group 6.150% Senior Notes, which are general senior unsecured obligations of BGC Group, was $700.0 million as of December 31, 2025. We recorded interest expense related to the BGC Group 6.150% Senior Notes of $33.2 million for the year ended December 31, 2025.
See Note 13-"Related Party Transactions" and Note 17-"Notes Payable and Other Borrowings" to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding our senior notes.
Collateralized Borrowing
On April 8, 2019, BGC Partners entered into a $15.0 million secured loan arrangement, under which it pledged certain fixed assets as security for a loan. This arrangement incurred interest at a fixed rate of 3.77% and matured on April 8, 2023, at which point the loan was repaid in full; therefore, there were no borrowings as of December 31, 2025 and 2024. BGC Partners did not record any interest expense related to this secured loan arrangement for the years ended December 31, 2025 and 2024. BGC Partners recorded interest expense related to this secured loan arrangement of nil for the year ended December 31, 2023.
On April 19, 2019, BGC Partners entered into a $10.0 million secured loan arrangement, under which it pledged certain fixed assets as security for a loan. This arrangement incurred interest at a fixed rate of 3.89% and matured on April 19, 2023, at which point the loan was repaid in full; therefore, there were no borrowings as of December 31, 2025 and 2024. BGC Partners did not record any interest expense related to this secured loan arrangement for the years ended December 31, 2025 and 2024. BGC Partners recorded interest expense related to this secured loan arrangement of nil for the year ended December 31, 2023.
Weighted-average Interest Rate
For the years ended December 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, and BGC Credit Agreement, was 6.57% and 5.50%, respectively.
See Note 17-"Notes Payable and Other Borrowings" to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding our collateralized borrowings.
Short-term Borrowings
On August 22, 2017, BGC Partners entered into a committed unsecured loan agreement with Itau Unibanco S.A. The agreement provided for short-term loans of up to $4.0 million (BRL 20.0 million). Borrowings under this agreement bore interest at the Brazilian Interbank offering rate plus 3.20%. During June 2023, the borrowings under this agreement were repaid in full, and the loan was terminated. As of both December 31, 2025 and 2024, there were no borrowings outstanding under the agreement. BGC Partners did not record any interest expense related to the agreement for the years ended December 31, 2025 and 2024. BGC Partners recorded interest expense related to the agreement of $0.2 million for the year ended December 31, 2023.
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 $9.1 million (BRL 50.0 million). On August 20, 2021, the agreement was renegotiated, increasing the credit line to $10.9 million (BRL 60.0 million). On May 22, 2023 the agreement was renegotiated, increasing the credit line to $12.7 million (BRL 70.0 million). The maturity date of the agreement is renewable every 90 days and the next maturity date is April 30, 2026. This agreement bears a fee of 1.32% per year. As of December 31, 2025 and 2024, there were no borrowings outstanding under this agreement. The bank fees related to the agreement were $0.2 million, $0.2 million and $0.2 million for the years ended December 31, 2025, 2024 and 2023, respectively.
See Note 17-"Notes Payable and Other Borrowings" to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding our short-term borrowings.
Market-Making Registration Statements
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 3.750% Senior Notes, BGC Group 4.375% Senior Notes, and BGC Group 8.000% Senior 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 a replacement market-making resale registration statement.
On November 8, 2024, we filed a resale registration statement on Form S-3 pursuant to which CF&Co could 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 could occur from time to time. Market-making transactions pursuant to this resale registration statement were terminated on November 10, 2025 in connection with the filing of a replacement market-making resale registration statement.
On November 10, 2025, we 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, BGC Group 6.600% Senior Notes, and BGC Group 6.150% 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 Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K 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 us 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 year ended December 31, 2025
The table below presents our Liquidity Analysis as of December 31, 2025 and December 31, 2024:
| December 31, 2025 | December 31, 2024 | ||||||||||
| (in thousands) | |||||||||||
| Cash and cash equivalents | $ | 851,502 | $ | 711,584 | |||||||
| Financial instruments owned, at fair value | 127,614 | 186,197 | |||||||||
| Total | $ | 979,116 | $ | 897,781 | |||||||
Liquidity increased by $81.3 million, from $897.8 million as of December 31, 2024 to $979.1 million as of December 31, 2025. This increase was driven primarily by financing and investing activities, including the issuance of $700.0 million aggregate principal amount of BGC Group 6.150% Senior Notes, a $40.0 million increase in borrowings under the Revolving Credit Agreement, a $20.0 million increase in borrowings under the BGC Credit Agreement, and $77.9 million of proceeds from the sale of kACE.
These cash inflows were partially offset by repayments of an aggregate of $300.0 million of BGC Group 4.3750% Senior Notes and BGC Partners 4.375% Senior Notes, $278.6 million of cash payments related to the acquisition of OTC Global, net of cash acquired, and $21.0 million related to additional purchases of equity securities in existing investments carried under the measurement alternative. Additional uses of cash during the period included share repurchases of $281.5 million, payments of $109.2 million for tax obligations related to equity awards (included in redemption and repurchase of equity awards in the Consolidated Statements of Cash Flows), dividends to stockholders of $39.0 million, and capitalized expenditures of $66.0 million.
The remaining movement in cash and cash equivalents was primarily attributable to net cash provided by operating activities of $394.4 million during the year ended December 31, 2025. Net cash provided by operating activities was driven by $637.1 million of net income adjusted for non-cash items, reflecting higher earnings from increased revenues, partially offset by net working capital cash outflows of $242.7 million.
Working capital cash outflows were primarily related to accrued commissions receivable, net, of $65.8 million, and loans, forgivable loans, and other receivables from employees and partners of $153.8 million, reflecting higher revenues, increased loan activity, and the timing of collections and issuances.
Financial instruments owned at fair value decreased from $186.2 million as of December 31, 2024 to $127.6 million as of December 31, 2025, primarily due to the sale of treasury bills during the year.
Discussion of the year ended December 31, 2024
The table below presents our Liquidity Analysis as of December 31, 2024 and December 31, 2023:
| December 31, 2024 | December 31, 2023 | ||||||||||
| (in thousands) | |||||||||||
| Cash and cash equivalents | $ | 711,584 | $ | 655,641 | |||||||
| Financial instruments owned, at fair value | 186,197 | 45,792 | |||||||||
| Total | $ | 897,781 | $ | 701,433 | |||||||
The $196.3 million increase in our Liquidity position from $701.4 million as of December 31, 2023 to $897.8 million as of December 31, 2024 was primarily related to a $140.4 million increase in Financial instruments owned, at fair value due to our purchase of treasury bills. Furthermore, Cash and cash equivalents increased by $55.9 million. We received $171.7 million of contributions from the FMX Equity Partners, issued $500.0 million principal amount of BGC Group 6.600% Senior Notes and received $45.7 million of proceeds from the sale of Capitalab. The cash increases were partially offset by the repayment of the combined $300.0 million aggregate principal amount of, plus accrued interest on, the BGC Group 3.750% Senior Notes and BGC Partners 3.750% Senior Notes, share repurchases of $262.2 million, cash used in the acquisition of Sage, net of cash acquired, of $64.2 million and the payment of dividends to stockholders of $34.1 million.
CREDIT RATINGS
As of December 31, 2025, our public long-term credit ratings and associated outlooks were as follows:
| Rating | Outlook | ||||||||||
| Fitch Ratings Inc. | BBB- | Stable | |||||||||
| Standard & Poor's | BBB- | Stable | |||||||||
| Japan Credit Rating Agency, Ltd. | BBB+ | Stable | |||||||||
| Kroll Bond Rating Agency | BBB | Positive | |||||||||
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 years ended December 31, 2025, 2024 and 2023, we were charged $4.0 million, $4.4 million and $2.2 million, respectively, by Cantor for the cash or other collateral posted by Cantor on BGC's behalf. Cantor held cash or other property from us as collateral as of December 31, 2025 at a fair value of $67.6 million.
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.
In addition, self-regulatory organizations, such as FINRA and the NFA, along with statutory bodies such as the FCA, the SEC, and the CFTC, require strict compliance with their rules and regulations. The requirements imposed by regulators are designed to ensure the integrity of the financial markets and to protect customers and other third parties who deal with broker-dealers and are not designed to specifically protect stockholders. These regulations often serve to limit our activities, including through net capital, customer protection and market conduct requirements.
The final phase of Basel III (unofficially called "Basel IV") is a global prudential regulatory standard designed to make banks more resilient and increase confidence in the banking system. Its wide scope includes reviewing market, credit and operational risk along with targeted changes to leverage ratios. Basel IV includes updates to the calculation of bank capital requirements with the aim of making outcomes more comparable across banks globally.
The FCA is the relevant statutory regulator in the U.K. The FCA's objectives are to protect customers, maintain the stability of the financial services industry and promote competition between financial services providers. It has broad rule-making, investigative and enforcement powers derived from the Financial Services and Markets Act 2000 and subsequent and derivative legislation and regulations.
In January 2022, the FCA introduced a new Internal Capital and Risk Assessment (ICARA) process as a replacement for the Internal Capital Adequacy Assessment Process (ICAAP). The ICARA process incorporates business model assessment, forecasting and stress testing, recovery planning and wind-down planning. All firms were required to submit their proposed ICARA documentation by March 31, 2023, and then review its adequacy on an annual basis thereafter, after which the FCA provide feedback that may require further documentation and may lead to a change in capital requirements. The adoption of these proposed rules could restrict the ability of our large bank and broker-dealer customers to operate trading businesses and to maintain current capital market exposures under the present structure of their balance sheets, and will cause these entities to need to raise additional capital in order to stay active in our marketplaces.
In July 2023, the FCA further ensured that Consumer Duty is at the heart of every financial institution by rolling out Principle 12 specifically related to Consumer Duty, where a firm must act to deliver good outcomes for retail customers. This initiative is poised to redefine the relationship between consumers and financial institutions, where the FCA has demanded financial institutions foster a culture of trust, transparency, and accountability. Under Consumer Duty, the onus has shifted to financial institutions to prioritize their customers' best interest in every consideration made by the financial institution (the entire customer life cycle) including demonstration and evidence that the product/service/action is in the best interest of the customer. Although not immediately applicable to our business as we do not conduct business directly with the retail sector, we are conscious of the impact that this will have on underlying clients who have obligations to fulfil. In so doing, they may require our firm to provide additional reporting in order to help them evidence their obligations.
In addition, the majority of our other foreign subsidiaries are subject to similar regulation by the relevant authorities in the countries in which they do business. Certain other of our foreign subsidiaries are required to maintain non-U.S. net capital requirements. For example, in Hong Kong, BGC Securities (Hong Kong), LLC, GFI (HK) Securities LLC and Sunrise Brokers (Hong Kong) Limited are regulated by the Securities and Futures Commission. BGC Capital Markets (Hong Kong), Limited and GFI (HK) Brokers Ltd are regulated by The Hong Kong Monetary Authority. All are subject to Hong Kong net capital requirements. In France, Aurel BGC and BGC France Holdings; in Australia, BGC Partners (Australia) Pty Limited and Fixed Income Solutions Pty Limited; in Japan, BGC Shoken Kaisha Limited's Tokyo branch; in Singapore, BGC Partners (Singapore) Limited, GFI Group Pte Ltd and Ginga Global Markets Pte Ltd; in South Korea, BGC Capital Markets & Foreign Exchange Broker (Korea) Limited and GFI Korea Money Brokerage Limited; in Philippines, GFI Group (Philippines) Inc.; and in Brazil, BGC Liquidez Distribuidora De Titulos E Valores Mobiliarios Ltda., all have net capital requirements imposed upon them by local regulators.
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 Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for further details on our regulatory requirements.
As of December 31, 2025, $871.9 million of net assets were held by regulated subsidiaries. As of December 31, 2025, these subsidiaries had aggregate regulatory net capital, as defined, in excess of the aggregate regulatory requirements, as defined, of $508.2 million.
See "Regulation" included in Part I, Item 1 of this Annual Report on Form 10-K for additional information related to our regulatory environment.
EQUITY
As of December 31, 2025, we had 363.2 million shares of BGC Class A common stock and 109.5 million shares of BGC Class B common stock outstanding. Disclosures regarding our accounting for stock transactions are provided in Note 7-"Stock Transactions and Unit Redemptions" to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
The weighted-average share counts, including securities that were anti-dilutive for our earnings per share calculations, for the three months and year ended December 31, 2025 were as follows (in thousands):
| Three Months Ended December 31, 2025 | Year Ended December 31, 2025 | ||||||||||
|
Common stock outstanding1
|
471,612 | 476,364 | |||||||||
|
RSUs and restricted stock (Treasury stock method)2
|
15,122 | 15,521 | |||||||||
| Other | 3,665 | 4,586 | |||||||||
|
Total
|
490,399 | 496,471 | |||||||||
__________________________
1Common stock consisted of shares of BGC Class A common stock and 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 December 31, 2025, the weighted-average number of shares of BGC Class A common stock was 361.8 million and Class B shares 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 0.4 million. For the year ended December 31, 2025, the weighted-average number of shares of BGC Class A common stock was 366.8 million and Class B shares 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 December 31, 2025, 15.1 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 December 31, 2025, included 15.0 million of participating RSUs and 0.1 million of participating restricted shares of BGC Class A common stock. For the year ended December 31, 2025, 15.5 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 year ended December 31, 2025, included 15.3 million of participating RSUs and 0.2 million of participating restricted shares of BGC Class A common stock. Also as of December 31, 2025, 59.1 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 Consolidated Statements of Financial Condition as of December 31, 2025.
Registration Statements
Our 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 pursuant to the CEO Program. 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 pursuant to the CEO Program. 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 the Consolidated Financial Statements of this Annual Report on Form 10-K. The March 2021 Form S-3 Registration Statement and the July 2023 Sales Agreement related to the CEO Program both expired on August 2, 2025. As of December 31, 2025, we had not issued shares of BGC Class A common stock under the March 2021 Form S-3 Registration Statement.
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 December 31, 2025, we had issued an aggregate of 4.1 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 December 31, 2025, we 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 December 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 405.7 million shares of BGC Class A common stock.
CONTINGENT PAYMENTS RELATED TO ACQUISITIONS
Since 2016, we have completed acquisitions whose purchase price included an aggregate of approximately 4.9 million shares of 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 December 31, 2025, we have issued 2.4 million shares of BGC Class A common stock, 0.2 million of RSUs and paid $56.4 million in cash related to such contingent payments.
As of December 31, 2025, there are 2.1 million shares of BGC Class A common stock, including 0.4 million 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 1.8 million shares of BGC Class A common stock which will be issued if related targets are met and $7.0 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, followed by full briefing by the parties. The Third Circuit Court of Appeals heard argument on September 17, 2025. On December 15, 2025, the Third Circuit affirmed the District Court's judgment dismissing the case.
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 Lutnick in the Delaware Court of Chancery, asserting that the Corporate Conversion was unfair to Class A stockholders 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. Plaintiff did not appeal the court's ruling and the judgment dismissing the matter is now final.
CERTAIN RELATED PARTY TRANSACTIONS
See Note 13-"Related Party Transactions" and Note 27-"Subsequent Events" to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding certain related party transactions.
CONTRACTUAL OBLIGATIONS AND COMMITMENTS
The following table summarizes certain of our contractual obligations at December 31, 2025 (in thousands):
| Total |
Less Than 1 Year |
1-3 Years | 3-5 Years |
More Than 5 Years |
|||||||||||||||||||||||||
|
Notes payable and other borrowings1
|
$ | 1,789,500 | $ | 240,000 | $ | - | $ | 1,549,500 | $ | - | |||||||||||||||||||
|
Operating leases2
|
257,975 | 34,679 | 59,393 | 39,689 | 124,214 | ||||||||||||||||||||||||
|
Finance leases2
|
2,021 | 1,394 | 627 | - | - | ||||||||||||||||||||||||
|
Interest on Notes payable and other borrowings3
|
365,754 | 105,293 | 191,743 | 68,718 | - | ||||||||||||||||||||||||
|
Short-term borrowings from related parties4
|
20,000 | 20,000 | - | - | - | ||||||||||||||||||||||||
|
Interest on Short-term borrowings5
|
206 | 206 | - | - | - | ||||||||||||||||||||||||
|
One-time transition tax6
|
4,421 | 4,421 | - | - | - | ||||||||||||||||||||||||
|
Other7
|
17,330 | 17,330 | - | - | - | ||||||||||||||||||||||||
| Total contractual obligations | $ | 2,457,207 | $ | 423,323 | $ | 251,763 | $ | 1,657,907 | $ | 124,214 | |||||||||||||||||||
_________________________________
1Notes payable and other borrowings reflects $240.0 million of borrowings by the Company, which includes deferred financing costs of $2.4 million, outstanding under the Revolving Credit Agreement as of December 31, 2025; $347.2 million of BGC Group 8.000% Senior Notes (the $347.2 million represents the principal amount of the debt; the carrying value of the BGC Group 8.000% Senior Notes as of December 31, 2025 was approximately $345.4 million), $500.0 million of BGC Group 6.600% Senior Notes (the $500.0 million represents the principal amount of the debt; the carrying value of the BGC Group 6.600% Senior Notes as of December 31, 2025 was approximately $496.5 million), and $700.0 million of BGC Group 6.150% Senior Notes (the $700.0 million represents the principal amount of the debt; the carrying value of the BGC Group 6.150% Senior Notes as of December 31, 2025 was approximately $693.8 million). Notes payable and other borrowings also reflects $2.3 million of BGC Partners 8.000% Senior Notes (the $2.3 million represents both the principal amount and carrying value of the BGC Partners 8.000% Senior Notes as of December 31, 2025). See Note 17-"Notes Payable and Other Borrowings" for more information regarding these obligations, including timing of payments and compliance with debt covenants.
2Operating leases and finance leases are related to rental payments under various non-cancelable leases, principally for office space, data centers and office equipment, and are presented net of sublease payments to be received. The Company subleases certain real estate to its affiliates and to third parties. The value of these commitments is not material to the Company's Consolidated Financial Statements.
3Interest on notes payable and other borrowings reflects a total of $1.7 million of interest expense associated with the Company's borrowings under the Revolving Credit Agreement; $66.7 million of interest expense associated with the BGC Group 8.000% Senior Notes, $0.4 million of interest expense associated with the BGC Partners 8.000% Senior Notes, $113.7 million of interest expense associated with the BGC Group 6.600% Senior Notes, and $183.2 million of interest expense associated with the BGC Group 6.150% Senior Notes. Interest on notes payable and other borrowings also includes interest on the undrawn portion of the committed unsecured senior Revolving Credit Agreement which was calculated through the maturity date of the facility, which is April 26, 2027. As of December 31, 2025, the undrawn portion of the committed unsecured Revolving Credit Agreement was $460.0 million.
4Short-term borrowings from related parties reflects $20.0 million the Company borrowed from Cantor under the BGC Credit Agreement on November 12, 2025.
5The average interest rate on the outstanding short-term borrowings from related parties for the year ended December 31, 2025 was 5.45%.
6The 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 IRS 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. The Company made an election to pay the taxes over eight years with 40% to be 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 December 31, 2025 is $4.4 million.
7Other contractual obligations reflect commitments of $17.3 million to make charitable contributions, which are recorded as part of "Accounts payable, accrued and other liabilities" in the Company's Consolidated Statements of Financial Condition. The amount payable each year reflects an estimate of future Charity Day obligations.
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 Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information related to our investments in unconsolidated entities.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of our Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in our Consolidated Financial Statements. These accounting estimates require the use of assumptions about matters, some of which are highly uncertain at the time of estimation. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments, and we evaluate these estimates on an ongoing basis. To the extent actual experience differs from the assumptions used, our Consolidated Statements of Financial Condition, Consolidated Statements of Operations and Consolidated Statements of Cash Flows could be materially affected. We believe that the following accounting policies involve a higher degree of judgment and complexity.
Revenue Recognition
We derive our revenues primarily through commissions from brokerage services, the spread between the buy and sell prices on matched principal transactions, fees from related parties, data, network and post-trade services, and other revenues. See Note 3-"Summary of Significant Accounting Policies" to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for further information regarding revenue recognition.
Equity-Based and Other Compensation
Discretionary Bonus: A portion of our compensation and employee benefits expense is comprised of discretionary bonuses, which may be paid in cash, equity, partnership awards or a combination thereof. We accrue expense in a period based on revenues in that period and on the expected combination of cash, equity and, prior to the Corporate Conversion, partnership units. Given the assumptions used in estimating discretionary bonuses, actual results may differ.
Restricted Stock Units: We account for equity-based compensation awards using the guidance in ASC 718, Compensation-Stock Compensation. RSUs provided to certain employees are accounted for as equity awards, and in accordance with U.S. GAAP, we are required to record an expense for the portion of the RSUs that is ultimately expected to vest. Further, forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Because assumptions are used in estimating employee turnover and associated forfeiture rates, actual results may differ from our estimates under different assumptions or conditions.
The fair value of RSU awards to employees is based on the market value of the BGC Class A common stock on the grant date. As part of employee compensation, we have granted both participating RSUs, which receive dividends, or non-participating RSUs. For non-participating RSUs, which do not receive dividend equivalents, we adjust the fair value of the RSUs for the present value of expected forgone dividends, which requires us to include an estimate of expected dividends as a valuation input. This grant-date fair value is amortized to expense ratably over the awards' vesting periods.
For participating RSUs where dividends are paid during the vesting period or accumulated and paid to the employee upon vesting, the grant-date fair value of the award should not be reduced. As such, we do not adjust the fair value of the RSUs for the present value of expected forgone dividends. This grant-date fair value is amortized to expense ratably over the awards' vesting periods.
For RSUs with graded vesting features, we have made an accounting policy election to recognize compensation cost on a straight-line basis. The amortization is reflected as part of "Equity-based compensation and allocations of net income to limited partnership units and FPUs" in our Consolidated Statements of Operations.
Restricted Stock: Restricted stock provided to certain employees is accounted for as an equity award, and as per U.S. GAAP guidance, we are required to record an expense for the portion of the restricted stock that is ultimately expected to vest. We have granted restricted stock, prior to the Corporate Conversion, that is not subject to continued employment or service; however, transferability is subject to compliance with our and our affiliates' customary noncompete obligations. Such shares of restricted stock are generally salable by partners in five to ten years. Because the restricted stock is not subject to continued employment or service, the grant-date fair value of the restricted stock is expensed on the date of grant. The non-cash equity based compensation expense is reflected as part of "Equity-based compensation and allocations of net income to limited partnership units and FPUs" in our Consolidated Statements of Operations.
As a result of the Corporate Conversion, the Company has also granted shares of unvested restricted stock, which are subject to continued employment or service with the Company or any affiliate or subsidiary of the company. The fair value of these restricted stock awards held by BGC employees is based on the market value of BGC Class A common stock on the grant date, adjusted as appropriate based upon the award's ineligibility to receive dividends, as not all of these awards participate in receiving dividends, similar to the RSUs above. The grant-date fair value of the restricted stock is amortized to expense ratably over the awards' expected vesting periods. The non-cash equity-based amortization expense is reflected as a component of "Equity-based compensation and allocations of net income to limited partnership units and FPUs" in our Consolidated Statements of Operations.
Limited Partnership Units: Certain BGC employees held LPUs in BGC Holdings and hold LPUs in Newmark Holdings. Generally, such units received quarterly allocations of net income, which were cash distributed on a quarterly basis and generally contingent upon services being provided by the unit holders. In addition, Preferred Units were granted in connection with the grant of certain LPUs, such as PSUs, which may be granted exchangeability or redeemed in connection with the grant of shares of common stock to cover the withholding taxes owed by the unit holder upon such exchange or grant. This was an acceptable alternative to the common practice among public companies of issuing the gross amount of shares to employees, subject to cashless withholding of shares to pay applicable withholding taxes. Preferred Units were not entitled to participate in partnership distributions other than with respect to the Preferred Distribution. There were none of these LPUs or Preferred Units in BGC Holdings remaining after the Corporate Conversion was completed, while these LPUs and Preferred Units in Newmark Holdings held by BGC employees were not impacted by the Corporate Conversion. The quarterly allocations of net income on BGC Holdings LPUs held by BGC employees were reflected as a component of compensation expense under "Equity-based compensation and allocations of net income to limited partnership units and FPUs" in the Company's Consolidated Statements of Operations prior to the Corporate Conversion, and quarterly allocations of net income on Newmark Holdings LPUs held by BGC employees, which were not impacted by the Corporate Conversion, are reflected as a component of compensation expense under "Equity-based compensation and allocations of net income to limited partnership units and FPUs" in our Consolidated Statements of Operations.
Certain of these LPUs entitle the holders to receive post-termination payments equal to the notional amount, generally in four equal yearly installments after the holder's termination. There were none of these LPUs in BGC Holdings remaining after the Corporate Conversion was completed, while these LPUs in Newmark Holdings held by BGC employees were not impacted by the Corporate Conversion. These LPUs are accounted for as post-termination liability awards under U.S. GAAP. Accordingly, we recognize a liability for these units on our Consolidated Statements of Financial Condition as part of "Accrued compensation" for the amortized portion of the post-termination payment amount, based on the current fair value of the expected future cash payout. We amortize the post-termination payment amount, less an expected forfeiture rate, over the vesting period, and record an expense for such awards based on the change in value at each reporting period in our Consolidated Statements of Operations as part of "Equity-based compensation and allocations of net income to limited partnership units and FPUs."
Certain LPUs were granted exchangeability into shares of BGC or Newmark Class A common stock or were redeemed in connection with the grant of BGC or Newmark Class A common stock issued; BGC Class A common stock was issued on a one-for-one basis, and Newmark Class A common stock is issued based on the number of LPUs exchanged or redeemed multiplied by the then-current Exchange Ratio. At the time exchangeability was granted or shares of BGC or Newmark Class A common stock were issued, we recognized an expense based on the fair value of the award on that grant date, which was included in "Equity-based compensation and allocations of net income to limited partnership units and FPUs" in our Consolidated Statements of Operations. There were no LPUs in BGC Holdings remaining after the Corporate Conversion was completed, while LPUs in Newmark Holdings held by BGC employees were not impacted by the Corporate Conversion. During the years ended December 31, 2025, 2024 and 2023, we incurred equity-based compensation expense of $143.3 million, $184.7 million and $171.6 million, respectively, related to LPUs and issuance of common stock.
Prior to the Corporate Conversion, certain LPUs had a stated vesting schedule and did not receive quarterly allocations of net income. Compensation expense related to these LPUs was recognized over the stated service period, and these units generally vest between two and five years. During the year ended December 31, 2023, we incurred equity-based compensation expense related to these LPUs of $40.9 million. This expense is included in "Equity-based compensation and allocations of net income to limited partnership units and FPUs" in our Consolidated Statements of Operations.
Employee Loans: We have entered into various agreements with certain BGC employees and, prior to the Corporate Conversion, partners whereby these individuals receive loans which may be either wholly or in part repaid from the distributions that the individuals receive on some or all of their LPUs in BGC Holdings and Newmark Holdings, prior to the Corporate Conversion, and by distributions that the individuals receive on some or all of their LPUs in Newmark Holdings and any dividends paid on participating RSUs and restricted stock awards, subsequent to the Corporate Conversion. Certain of these loans also may be either wholly or in part repaid from the proceeds of the sale of the BGC employees' shares of BGC Class A common stock. In addition, certain loans may be forgiven over a period of time. The forgivable portion of these loans is recognized as compensation expense over the life of the loan. From time to time, we may also enter into agreements with employees to grant bonus and salary advances or other types of loans. These advances and loans are repayable in timeframes outlined in the underlying agreements. We review the loan balances each reporting period for collectability. If we determine that the collectability of a portion of the loan balances is not expected, we recognize a reserve against the loan balances. Actual collectability of loan balances may differ from our estimates.
As of December 31, 2025 and 2024, the aggregate balance of employee loans, net, was $436.1 million and $360.1 million, respectively, and is included as "Loans, forgivable loans and other receivables from employees and partners, net" in our Consolidated Statements of Financial Condition. Compensation expense for the above-mentioned employee loans for the years ended December 31, 2025, 2024 and 2023 was $140.3 million, $59.4 million and $51.3 million, respectively. The compensation expense related to these loans is included as part of "Compensation and employee benefits" in our Consolidated Statements of Operations.
Goodwill
Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination. As prescribed in U.S. GAAP guidance, Intangibles - Goodwill and Other, goodwill is not amortized, but instead is periodically tested for impairment. We review goodwill for impairment on an annual basis during the fourth quarter of each fiscal year or whenever an event occurs or circumstances change that could reduce the fair value of a reporting unit below its carrying amount.
When reviewing goodwill for impairment, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If the results of the qualitative assessment indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or if we choose to bypass the qualitative assessment, we perform a quantitative goodwill impairment analysis as follows.
The quantitative goodwill impairment test, used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss should be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill is deemed not to be impaired. To estimate the fair value of the reporting unit, we use a discounted cash flow model and data regarding market comparables. The valuation process requires significant judgment and involves the use of significant estimates and assumptions. These assumptions include cash flow projections, estimated cost of capital and the selection of peer companies and relevant multiples. Because assumptions and estimates are used in projecting future cash flows, choosing peer companies and selecting relevant multiples, actual results may differ from our estimates under different assumptions or conditions; and changes to these estimates and assumptions, as a result of changing economic and competitive conditions, could materially affect the determination of fair value and/or impairment.
CECL
We present financial assets that are measured at amortized cost net of an allowance for credit losses, which represents the amount expected to be collected over their estimated life. Expected credit losses for newly recognized financial assets carried at amortized cost, as well as changes to expected lifetime credit losses during the period, are recognized in earnings. In accordance with the U.S. GAAP guidance, Financial Instruments-Credit Losses, the CECL methodology's impact on expected credit losses, among other things, reflects our view of the current state of the economy, forecasted macroeconomic conditions and BGC's portfolios. The amount of the allowance is based on significant estimates and the ultimate losses may vary from such estimates as more information becomes available or conditions change. Additional disclosures regarding our accounting for CECL are provided in Note 25-"Current Expected Credit Losses (CECL)" to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.
Income Taxes
We account for income taxes using the asset and liability method as prescribed in U.S. GAAP guidance, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to basis differences between the Consolidated Financial Statement carrying amounts of existing assets and liabilities and their respective tax basis. Certain of our entities are taxed as U.S. partnerships and are primarily subject to UBT in the City of New York. Therefore, the tax liability or benefit related to the partnership income or loss except for UBT rests with the partners rather than the partnership entity (see Note 2-"Limited Partnership Interests in BGC Holdings and Newmark Holdings" to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for a discussion of partnership interests). As such, the partners' tax liability or benefit is not reflected in our Consolidated Financial Statements. The tax-related assets, liabilities, provisions or benefits included in our Consolidated Financial Statements also reflect the results of the entities that are taxed as corporations, either in the U.S. or in foreign jurisdictions.
We provide for uncertain tax positions based upon management's assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. Management is required to determine whether a tax position is more likely than not to be sustained upon examination by tax authorities, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Because significant assumptions are used in determining whether a tax benefit is more likely than not to be sustained upon examination by tax authorities, actual results may differ from our estimates under different assumptions or conditions. We recognize interest and penalties related to income tax matters in "Provision for income taxes" in our Consolidated Statements of Operations.
A valuation allowance is recorded against deferred tax assets if it is deemed more likely than not that those assets will not be realized. In assessing the need for a valuation allowance, we consider all available evidence, including past operating results, the existence of cumulative losses in the most recent fiscal years, estimates of future taxable income and the feasibility of tax planning strategies.
The measurement of current and deferred income tax assets and liabilities is based on provisions of enacted tax laws and involves uncertainties in the application of tax regulations in the U.S. and other tax jurisdictions. Because our interpretation of complex tax law may impact the measurement of current and deferred income taxes, actual results may differ from these estimates under different assumptions regarding the application of tax law.
The Tax Act includes the global intangible low-taxed income, GILTI, provision. This provision requires inclusion in our U.S. income tax return the earnings of certain foreign subsidiaries. We have elected to treat taxes associated with the GILTI provision using the Period Cost Method and thus have not recorded deferred taxes for basis differences under this regime.
Additional disclosures regarding our accounting for income taxes are provided in Note 20-"Income Taxes" to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.
There have been no significant changes to critical accounting policies and estimates during fiscal year 2025 other than updates to the revenue recognition policy resulting from the acquisition of OTC Global. See Note 3-"Summary of Significant Accounting Policies" to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information regarding these critical accounting policies and other significant accounting policies.
RECENT ACCOUNTING PRONOUNCEMENTS
See Note 1-"Organization and Basis of Presentation" to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding recent accounting pronouncements.
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