Q2 2026 BGC Group Inc Earnings Call

July 30, 2026

Speaker #1: for standing by. Today's presentation will begin Thank you momentarily.

Speaker #2: Greetings, and welcome to the BGC Group Second Quarter 2026 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

Speaker #2: If anyone is to require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Jason Chryssicas, Head of Investor Relations.

Speaker #2: Please go ahead.

Speaker #3: Hello, everyone. This morning we issued BGC's financial results, which can be found at ir.bgcg.com. Any historical results provided on today's call compare only the current period with the prior-year period, unless otherwise specified.

Jason Chryssicas: Hello, everyone. This morning, we issued BGC's financial results, which can be found at ir.bgcg.com. Any historical results provided on today's call compare only the current period with the prior year period, unless otherwise specified. All references on today's call to record or all-time high results are to BGC standalone financial results, excluding Newmark, prior to the spin-off in November 2018. We'll be referring to our results on a non-GAAP basis, which include the terms adjusted EBITDA and adjusted earnings. Please refer to today's investor materials on our website for additional details on our financial results, relevant economic and industry statistics, and for the complete and updated definitions of any non-GAAP terms, reconciliations of these items to corresponding GAAP results, and how, when, and why management uses them. The outlook discussed today assumes no material acquisitions or dispositions.

Speaker #3: All references on today's call to record or all-time high results are to BGC standalone financial results, excluding new market prior to the spin-off in November 2018.

Speaker #3: We will be referring to our results on a non-GAAP basis, which include the terms adjusted EBITDA and adjusted earnings. Please refer to today's investor materials on our website for additional details on our financial results.

Speaker #3: Relevant economic and industry statistics and for the complete and updated definitions of any non-GAAP terms reconciliations of these items with corresponding GAAP results and how, when, and why management uses them.

Speaker #3: The outlook discussed today assumes no material acquisitions or dispositions or expectations are subject to change based on various macroeconomic, social, political, and/or other factors.

Jason Chryssicas: Our expectations are subject to change based on various macroeconomic, social, political, and/or other factors. Information on this call contains forward-looking statements, including, without limitation, statements about our economic outlook and business. These statements are subject to risks and uncertainties which could cause our actual results to differ from expectations. Except as required by law, we undertake no obligation to update any forward-looking statements. For information on factors that could cause actual results to differ from forward-looking statements and a complete discussion of the risks and other factors that may impact these forward-looking statements, see our SEC filings, including, but not limited to, the risk factors and disclosures within these documents. With that, I am now happy to turn the call over to Sean Windeatt, Co-Chief Executive Officer of BGC Group.

Speaker #3: Information on this call contains forward-looking statements including without limitation statements about our economic outlook and business. These statements are subject to risks and uncertainties which could cause our actual results to differ from expectations.

Speaker #3: Except as required by law, we undertake no obligation to update any forward-looking statements. For information on factors that could cause actual results to differ from forward-looking statements, and for a complete discussion of the risks and other factors that may impact these forward-looking statements, see our SEC filings, including but not limited to the risk factors and disclosures within these documents.

Speaker #3: With that, I am now happy to turn the call over to Sean Windeatt, Co-Chief Executive Officer of BGC Group.

Speaker #4: Thank you, Jason. Good morning and welcome to our second quarter 2026 conference call. With me today are my fellow Co-Chief Executive Officers John Abularrage and JP O'Bannon.

Sean Windeatt: Thank you, Jason. Good morning, and welcome to our Q2 2026 conference call. With me today are my fellow Co-Chief Executive Officers, John Abularrage and JP Aubin, along with our Chief Financial Officer, Jason Hauf. We produced revenues of $846 million, a second quarter record, up 8% versus last year. This growth was broad-based across every asset class, reflecting the durability, diversification, and the strength of our global platform. Our revenues for H1 2026 were up more than 24% to $1.8 billion, the highest ever through the first two quarters of the year. Since 2022 and the return of interest rates, we have grown our revenues double digits every year since. Our half year revenues in 2026 were greater than our full year revenues of just three years ago. FMX once again saw market share gains across its cash US Treasury and futures businesses.

Speaker #4: Along with our Chief Financial Officer Jason Hauf. We produced revenues of $846 million a second quarter record, up 8% versus last year. This growth was broad-based across every asset class, reflecting the durability, diversification, and the strength of our global platform.

Speaker #4: Our revenues for the first half of 2026 were up more than 24% to $1.8 billion—the highest ever through the first two quarters of the year.

Speaker #4: Since 2022 and the return of interest rates, we have grown our revenues double digits every year since, and our half-year revenues in 2026 were greater than our full-year revenues of just three years ago.

Speaker #4: FMX once again saw market share gains across its cash US Treasury and futures businesses. FMX UST market share grew to 42%, a new all-time high, and FMX SOFRA and US Treasury futures also reached new market share highs for the month of June.

Sean Windeatt: FMX UST market share grew to 42%, a new all-time high, and FMX SOFR and US Treasury futures also reached new market share highs for the month of June. With that, I'd like to turn the call over to John to discuss our exciting new partnership with Fanatics and the quarterly results of the business in more detail.

Speaker #4: With that, I'd like to turn the call over to John to discuss our exciting new partnership with Fanatics and the quarterly results of the business in more detail.

Speaker #5: Thank you, Sean. Earlier this week, we announced our partnership with Fanatics, a global sports platform. To build a prediction market ecosystem that serves both retail and institutional participants, combining BGC's extensive client network and Fanatics database of over 100 million customers.

John Abularrage: Thank you, Sean. Earlier this week, we announced our partnership with Fanatics, a global sports platform, to build a prediction market ecosystem that serves both retail and institutional participants, combining BGC's extensive client network and Fanatics' database of over 100 million customers. Together, BGC and Fanatics will also deliver unique market data in this innovative and rapidly growing asset class. This partnership brings together BGC's established market data and analytics capabilities to enable the development of new data products. Prediction markets are a gauge of sentiment which predict outcomes, as opposed to our traditional data, which reflects past events. Merging these two together will allow us to offer new and exciting data sets to our clients. As part of this agreement, BGC will receive upfront consideration and a performance-based earn-out, as well as the license to the exchange's data.

Speaker #5: Together, BGC and Fanatics will also deliver unique market data in this innovative and rapidly growing asset class. This partnership brings together BGC's established market data and analytics capabilities to enable the development of new data products.

Speaker #5: Prediction markets are a gauge of sentiment, which predict outcomes as opposed to our traditional data, which reflects past events. Merging these two together will allow us to offer new and exciting datasets to our clients.

Speaker #5: As part of this agreement, BGC will receive upfront consideration and a performance-based earn-out, as well as a license to the exchange's data. This is entirely separate from FMX's CFTC registered DCM, which BGC continues to own and control.

John Abularrage: This is entirely separate from FMX's CFTC-registered DCM, which BGC continues to own and control. Similar to the sale of Case and Capitalab, this transaction once again underscores the tremendous value of the assets that BGC owns, assets that we believe are worth significantly more than what is currently reflected in the market. Turning to our Q2 results. We delivered record Q2 revenues of $845.5 million, a 7.8% increase versus last year. Our total brokerage revenues grew by 7.2% to $771.4 million, driven by growth across all asset classes. ECS revenues grew by 5.3% to $275.5 million, driven by strong growth across our shipping, environmental, and commodities businesses, partially offset by lower oil and refined product volumes due to disruptions caused by the Strait of Hormuz closure.

Speaker #5: Similar to the sale of CASE and Capital Labs, this transaction once again underscores the tremendous value of the assets that BGC owns—assets that we believe are worth significantly more than what is currently reflected in the market.

Speaker #5: Now turning to our second quarter results. We delivered record second quarter revenues of $845.5 million. A 7.8% increase versus last year. Our total brokerage revenues grew by 7.2% to $771.4 million.

Speaker #5: Driven by growth across all asset classes. ECS revenues grew by 5.3% to $275.5 million. Driven by strong growth across our shipping, environmental, and commodities businesses, partially offset by lower oil and refined product volumes due to disruptions caused by the Strait of Hormuz closure.

Speaker #5: Additionally, we announced the launch of BGC Compute Infrastructure Markets during the second quarter, a logical extension of our existing power business. This is a new business focused on developing the secondary market for compute and memory capacity.

John Abularrage: We announced the launch of BGC Compute Infrastructure Markets during Q2, a logical extension of our existing power business. This is a new business focused on developing the secondary market for compute and memory capacity. Rates revenues increased by 10.6% to $221.9 million, reflecting higher volumes across all major rates products during Q2. Foreign exchange revenues were up 9.4% to $118.7 million, primarily due to strong volume growth in emerging market and G10 products, and precious metals. Credit revenues increased by 5.4% to $79.3 million, driven by PortfolioMatch, along with higher European and emerging market credit volumes. Equities grew by 2.8% to $76 million, reflecting strong US equity volumes, partially offset by lower European equity derivative activity. Data, network, and post-trade revenues grew by 18.6% to $36.7 million, excluding Case, which we sold in Q4 2025. Turning to Fenics.

Speaker #5: Rates revenues increased by 10.6% to $221.9 million, reflecting higher volumes across all major rates products during the quarter. Foreign exchange revenues were up 9.4% to $118.7 million.

Speaker #5: Primarily due to strong volume growth in emerging market and G10 products and precious metals. Credit revenues increased by 5.4% to $79.3 million. Driven by portfolio match along with higher European and emerging market credit volumes.

Speaker #5: Equities grew by 2.8% to $76 million. Reflecting strong US equity volumes partially offset by lower European equity derivative activity. Data network and post-trade revenues grew by 18.6% to $36.7 million.

Speaker #5: Excluding CASE, which we sold in the fourth quarter of 2025. Now turning to FENIX. FENIX revenues increased by 14.3% to a second quarter record of $186.2 million.

John Abularrage: Fenics revenues increased by 14.3% to a Q2 record of $186.2 million. Fenics Markets generated revenues of $152.8 million, an increase of 16.5%, excluding Case. This growth was driven by higher electronic trading volumes across rates, credit, foreign exchange, and increased Fenics market data revenues. Fenics Growth Platforms revenues grew to $33.4 million, a 22.9% increase, primarily driven by FMX, PortfolioMatch, and Lucera. FMX UST generated record Q2 ADV of $79.4 billion, 17% higher compared to last year. FMX UST continued to grow its market share to 42% in Q2, up from 41% last Q and 35% a year ago. FMX Futures Exchange delivered another quarter of significant growth, with Q2 ADV of approximately 54,000 contracts, more than 16-fold higher than a year ago. SOFR ADV rebounded strongly in June following reduced Iran-driven volatility, achieving a monthly record of more than 59,000 contracts.

Speaker #5: Fenix markets generated revenues of $152.8 million. An increase of 16.5% excluding case. This growth was driven by higher electronic trading volumes across rates, credit, foreign exchange, and increased Fenix market data revenues.

Speaker #5: Fenix growth platforms revenues grew to $33.4 million, a 22.9% increase primarily driven by FMX portfolio match and Lucera. FMX UST generated record second quarter ADV of $79.4 billion.

Speaker #5: 17% higher compared to last year. FMX UST continued to grow its market share to 42% in the second quarter, up from 41% last quarter and 35% a year ago.

Speaker #5: FMX futures exchange delivered another quarter of significant growth with second quarter ADV of approximately $54,000 contracts, more than 16-fold higher than a year ago.

Speaker #5: SOFRA ADV rebounded strongly in June following reduced Iran-driven volatility, achieving a monthly record of more than 59,000 contracts. US Treasury futures continued to scale in the second quarter, averaging more than 15,000 contracts per day, and total open interest ended at more than $140,000 contracts, up from approximately $22,000 contracts a year ago.

John Abularrage: US Treasury futures continued to scale in Q2, averaging more than 15,000 contracts per day, and total open interest ended at more than 140,000 contracts, up from approximately 22,000 contracts a year ago. As you know, we currently list only the two and five-year US Treasury future contracts. We'll be listing the remaining tenors across the full curve on 03 August 2026, supporting further growth in trading volumes and open interest on the exchange. FMX FX average daily volumes increased by 16% to $18 billion, driven by continued growth across Spot FX and NDF volumes, resulting in continued market share gains. PortfolioMatch ADV grew 82% to a new quarterly record of $431 million, significantly outpacing the broader credit market. Lucera, Fenics' network business providing real-time trading infrastructure to the capital markets, grew its revenues by 15%.

Speaker #5: As you know, we currently list only the two and five-year US Treasury future contracts, but will be listing the remaining tenors across the full curve on August 3rd, 2026, supporting further growth in trading volumes and open interest on the exchange.

Speaker #5: FMX FX averaged daily volumes increased by 16% to $18 billion. Driven by continued growth across spot FX and NDF volumes, resulting in continued market share gains.

Speaker #5: Portfolio match ADV grew 82% to a new quarterly record of $431 million. Significantly outpacing the broader credit market. Lucera, Fenix network business providing real-time trading infrastructure to the capital markets, grew its revenues by 15%.

Speaker #5: And with that, I would now like to turn the call over to Jason.

John Abularrage: With that, I would now like to turn the call over to Jason.

Speaker #4: Thank you, John. And hello, everyone. BGC generated revenues of $845.5 million during the second quarter. EMEA and Americas grew revenues by 11.2% and 6.1%, respectively, while Asia Pacific revenues decreased by 2.9%.

Jason Hauf: Thank you, John, hello, everyone. BGC generated revenues of $845.5 million during the Q2. EMEA and Americas grew revenues by 11.2% and 6.1% respectively, while Asia Pacific revenues decreased by 2.9%. Turning to expenses. Compensation and employee benefits for adjusted earnings increased by 7.7%. The increase was related to higher commissionable revenues during the period. Non-compensation expenses for adjusted earnings increased by 5.2%, primarily due to increased selling and promotion, along with commissions and floor brokerage expenses related to higher client activity. Moving on to our record Q2 adjusted earnings. Our pre-tax adjusted earnings grew by 11.1% to $192.9 million, representing a pre-tax incremental margin of 31.3%. Post-tax adjusted earnings increased by 11.2% to $171 million, resulting in a post-tax adjusted earnings per share of $0.35, 12.9% higher versus last year. Adjusted EBITDA increased by 7.2% to $228.7 million. Turning to share count.

Speaker #4: Turning to expenses. Compensation and employee benefits for adjusted earnings increased by 7.7%. The increase was related to higher commissionable revenues during the period. Non-compensation expenses for adjusted earnings increased by 5.2%, primarily due to increased selling and promotion, along with commissions and floor brokerage expenses related to higher client activity.

Speaker #4: Moving on to our record second quarter adjusted earnings. Our pre-tax adjusted earnings grew by 11.1% to $192.9 million, representing a pre-tax incremental margin of 31.3%.

Speaker #4: Post-tax adjusted earnings increased by 11.2% to $171 million resulting in a post-tax adjusted earnings per share of $0.35, 12.9% higher versus last year. Adjusted EBITDA increased by 7.2% to $228.7 million.

Speaker #4: Turning to share count. BGC's fully diluted weighted average share count for adjusted earnings was 495.4 million shares during the period, approximately flat compared to last quarter, and a 1% decrease compared to last year.

Jason Hauf: BGC's fully diluted weighted average share count for adjusted earnings was 495.4 million shares during the period, approximately flat compared to last quarter, and a 1% decrease compared to last year. As of 30 June, our liquidity was $861.4 million, compared with $979.1 million as of year-end 2025. We recently received upgraded credit ratings from both Kroll and JCRA to BBB+ and A- respectively, due to the continued strong performance of our business. With that, I'd like to turn the call back to Sean to go over our Q3 outlook.

Speaker #4: As of June 30th, our liquidity was $861.4 million compared with $979.1 million as of year-end 2025. We recently received upgraded credit ratings from both Kroll and JCRA to BBB Plus and A-minus respectively, due to the continued strong performance of our business.

Speaker #4: With that, I'd like to turn the call back to Sean to go over our third quarter outlook.

Speaker #2: Thank you, Jason. I'm pleased to provide the following guidance for the third quarter of 2026. We expect to generate revenues of between $775 and $835 million compared to $736.8 million in the third quarter of 2025, which at the midpoint of our guidance would represent just over 9% revenue growth for the third quarter, and 19% revenue growth for the first nine months of the year.

Sean Windeatt: Thank you, Jason. I'm pleased to provide the following guidance for the Q3 2026. We expect to generate revenues of between $775 to 835 million, compared to $736.8 million in the Q3 2025, which at the midpoint of our guidance, would represent just over 9% revenue growth for the Q3 and 19% revenue growth for the first nine months of the year. We anticipate pre-tax adjusted earnings to be in the range of $172 to 190 million versus $155.1 million last year, which at the midpoint of guidance, would represent 17% earnings growth for the Q3 and 24% earnings growth for the first nine months of the year. We expect our adjusted earnings tax rate to be between 11% and 14% for the full year 2026.

Speaker #2: We anticipate pre-tax adjusted earnings to be in the range of $172 to $190 million versus $155.1 million last year, which at the midpoint of guidance would represent 17% earnings growth for the third quarter, and 24% earnings growth for the first nine months of the year.

Speaker #2: We expect our adjusted earnings tax rate to be between 11 and 14% for the full year 2026. Before we open the call for questions, I'm excited to announce that we will be hosting our first-ever FMX Investor Day on October 13th.

Sean Windeatt: Before we open the call for questions, I'm excited to announce that we will be hosting our first ever FMX Investor Day on 13 October, with further details to follow. I'm also excited to share that our keynote speaker will be Geoffrey Hinton, the godfather of AI, who won the 2024 Nobel Prize and the 2018 Turing Award for his work with artificial and deep neural networks. With that, operator, we'd now like to open the call for questions.

Speaker #2: With further details to follow. I'm also excited to share that our keynote speaker will be Jeffrey Hinton, the godfather of AI, who won the 2024 Nobel Prize and the 2018 Turing Award for his work with artificial and deep neural networks.

Speaker #2: And with that, operator, we'd now like to open the call for questions.

Speaker #1: We'll now be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Operator: We'll now be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment, please, while we poll for questions. Our first question is from Patrick Moley with Piper Sandler.

Speaker #1: You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys.

Speaker #1: One moment, please, while we pull for questions. Our first question is from Patrick Moly with Piper Sandler.

Speaker #5: Yeah, good morning, gentlemen. I want to start off with a question on the BGC Compute Infrastructure Markets. You launched that in June. I know this is being positioned by yourselves and others in the industry as kind of a compute memory capacity being an emerging commodity market.

Patrick Moley: Good morning, gentlemen. I want to start off with a question on the BGC Compute Infrastructure Markets. You launched that in June. I know this is being positioned by yourselves and others in the industry as kind of a compute memory capacity being an emerging commodity market. I was hoping you could maybe just walk us through the growth opportunity there and the monetization model. Is this primarily a brokerage of OTC blocks between some of the participants in the AI ecosystem? Is there a market data or benchmarking opportunity? Ultimately, I guess, how are you thinking about the maturity curve here? When should we expect revenues, I guess, from this business to maybe be reflected in the financials? Then I have a follow-up. Thanks.

Speaker #5: So I was hoping you could maybe just walk us through the growth opportunity there, and the monetization model is this primarily a brokerage of OTC blocks between some of the participants in the AI ecosystem?

Speaker #5: Is there a market data or benchmarking opportunity? And then ultimately, I guess, how are you thinking about the maturity curve here? When should we expect revenues, I guess, from this business to maybe be reflected in the financials?

Speaker #5: And then I have a follow-up. Thanks.

Speaker #4: Hey, Patrick. It's John. That was a bunch of questions, so I'll do my best, but remind me if I skip one. I mean, the obvious point is CapEx is going to be close to a trillion dollars globally.

John Abularrage: Hey, Patrick, it's John. That was a bunch of questions, I'll do my best, remind me if I skip one. The obvious point is CapEx is going to be close to $1 trillion globally. We obviously look at it and think there hasn't been an effective market that's formed to hedge risk. The focus so far has been on clearing futures. I think for BGC, the real opportunity is going to be on the OTC market, cash-settled derivatives to hedge exposure and OTC-delivered trades when counterparties want actual physical delivery. We're number 1 in ECS. I think it's a natural extension of our power markets. Where we're going with it is to drive standardization across what is a highly fragmented market and needs a broker in it.

Speaker #4: We obviously look at it and think there hasn't been an effective market that's formed to hedge risk. And so the focus so far has been on cleared futures.

Speaker #4: But I think for BGC, the real opportunity is going to be on the OTC market. So, cash-settled derivatives to hedge exposure, and OTC-delivered trades when counterparties want actual physical delivery.

Speaker #4: So we're number one in ECS. I think it's a natural extension of our power markets. Where we're going with it is to drive standardization across what is a highly fragmented market and needs a broker in it.

Speaker #4: And so when we see revenues, I would assume we'll start to trade relatively soon, but it's too early and too nascent a market for us to give financial guidance at the moment.

John Abularrage: When we see revenues, I would assume we'll start to trade relatively soon, but it's early and too nascent a market for us to give financial guidance at the moment. I think we have a group of some of our best ECS brokers who are doing this. I think we have connectivity to the hyperscalers, the NEOs, and the traditional client base. I think we're uniquely positioned to enter the market and help standardize things. On the back of that, I think we're very excited about the potential opportunity. I hope that answers the question.

Speaker #4: But I think we have a group of some of our best ECS brokers who are doing this. I think we have connectivity to the hyperscalers, the NEOs, and the traditional client base.

Speaker #4: So I think we're uniquely positioned to enter the market and help standardize things and on the back of that, I think we'll we're very excited about the potential opportunity.

Speaker #4: So, I hope that answers the question.

Speaker #5: No, definitely. Thanks for that. And then just to follow up on the three Q guidance and margins, I think pretty impressive revenue guide on the margin side.

Patrick Moley: No, definitely. Thanks for that. Just to follow up on the Q3 guidance and margins, I think pretty impressive revenue guide on the margin side this quarter, I think it was up 100 basis points year-over-year, pre-tax adjusted margin. I think that's going to accelerate this quarter based on the midpoint of the guide to maybe 150 basis point step-up year-over-year. Could you maybe just talk about the longer-term, realistic multi-year margin destination, how you're thinking about that today, and what's really driving that incremental margin step-up year-over-year? Thanks.

Speaker #5: This quarter, I think it was up 100 basis points year over year on pre-tax adjusted margin. I think that's going to accelerate this quarter, based on the midpoint of the guide, to maybe 150 basis points.

Speaker #5: Step up year over year. So could you maybe just talk about the longer-term realistic multi-year margin destination, how you're thinking about that today, and what's really driving that incremental margin step up year over year?

Speaker #5: Thanks.

Speaker #3: Yeah, certainly, Patrick. It's Sean here. I think you've actually framed it quite correctly. What you're seeing is the gearing that we've always spoken about.

Sean Windeatt: Yes, certainly, Patrick, it's Sean here. I think you frame it quite correctly. What you're seeing is the gearing that we've always spoken about, and that's why in the prepared notes, we didn't just point out the quarter, but pointed out the 9 months, assuming the midpoint. What you're seeing is you're seeing that in that guidance for Q3, you're seeing the flow-through of just under 40 percentage points. That's a mixture, of course, the incremental business, the incremental growth, and the cost savings that we've identified and executed on during the year. I think, as you quite rightly say, look, we're incredibly excited going forward because what you have is we have a model where the gearing is in place. Even on the sort of 22-ish% margin, you're seeing that, but on incremental, it's well in excess of 30%.

Sean Windeatt: Yes, certainly, Patrick, it's Sean here. I think you frame it quite correctly. What you're seeing is the gearing that we've always spoken about, and that's why in the prepared notes, we didn't just point out the quarter, but pointed out the nine months, assuming the midpoint. What you're seeing is you're seeing that in that guidance for Q3, you're seeing the flow-through of just under 40 percentage points. That's a mixture, of course, the incremental business, the incremental growth, and the cost savings that we've identified and executed on during the year. I think, as you quite rightly say, look, we're incredibly excited going forward because what you have is we have a model where the gearing is in place. Even on the sort of 22-ish% margin, you're seeing that, but on incremental, it's well in excess of 30%.

Speaker #3: And that's why in the prepared notes, we didn't just point out the quarter, but pointed out the nine months assuming the midpoint. What you're seeing is you're seeing that in that guidance for Q3, you're seeing the flow through just under 40 percentage points.

Speaker #3: And that's a mixture of, of course, the incremental business, the incremental growth, and the cost savings that we've identified and executed on during the year.

Speaker #3: I think, as you quite rightly say, look, we're incredibly excited going forward, because what you have is, we have a model where the gearing is in place.

Speaker #3: You're seeing even on the sort of 22-ish percent margin, you're seeing that, but on incremental, it's well in excess of 30. And of course, leading into 2027 and beyond, we still have our electronic platforms and our FMX business, which will, of course, once up to full speed, dwarf the margins of our existing business.

Sean Windeatt: Of course, leading into 2027 and beyond, we still have our electronic platforms and our FMX business, which will, of course, once up to full speed, dwarf the margins of our existing business. I think our runway remains incredibly positive.

Speaker #3: And so I think our runway remains incredibly positive.

Speaker #5: All right, thank you all. That's it for me.

Patrick Moley: All right. Thank you all. That's it for me.

Speaker #1: As a reminder, if you'd like to ask a question, please press star one. Our next question is from Eli Abud with Bank of America.

Operator: As a reminder, if you'd like to ask a question, please press *1. Our next question is from Eli Abboud with Bank of America.

Operator: As a reminder, if you'd like to ask a question, please press star one. Our next question is from Eli Abboud with Bank of America.

Speaker #6: Good morning, everyone. Thanks for taking the question. I wanted to ask if you were seeing any impacts downstream from the SLR reforms, which took place or took effect at certain banks earlier this year.

Eli Abboud: Good morning, everyone. Thanks for taking the question. I wanted to ask if you were seeing any impacts downstream from the SLR reforms, which took effect at certain banks earlier this year. I appreciate that your rates revenue is broadly strong here, up 19% in aggregate in H1. Are you seeing any outsized contribution coming from the bank channel that's worth calling out?

Speaker #6: I appreciate that your rates were up 19% in aggregate in the first half, but are you seeing any outsized contribution coming from the bank channel that's worth calling out?

Speaker #3: Hello, Eli. JP here. Yes, it's early stage, but we did notice a stronger activity from the banks. Linked to the SLR. So yes, it's positive, definitely.

JP Aubin: Hello, Eli. JP here. Yes. It's early stage, but we did notice stronger activity from the banks linked to the SLR. Yes, it's positive, definitely. A strong market share with the top banks provide us the ability to notice on the various underlyings the positive aspect of the SLR.

Speaker #3: A strong market share with the subbanks providers the ability to notice on various underlyings the positive aspect of the SLR.

Speaker #6: Got it. And I have a couple here for you on FMX as well. Can you talk about how the progress is coming and hooking up the buy-side clients?

Eli Abboud: Got it. I have a couple here for you on FMX as well. Can you talk about how the progress is coming in hooking up the buy-side clients? To the extent that you've seen obstacles there, can you give us any details into what pushback you guys are getting from that client channel?

Speaker #6: And I mean, to the extent that you've seen obstacles there, can you give us any details into what pushback you guys are getting from that client channel?

Speaker #4: Sure, Eli. It's John. I would say that the onboarding of the buy side is accelerating. I would say that we're happy with the progress. I would say that the pipeline of buy-side participants and new participants that are coming on the exchange is happening at least as fast as we had hoped.

John Abularrage: Sure, Eli. It's John. I would say that the onboarding of the buy-side is accelerating. I would say that we're happy with the progress. I would say that the pipeline of buy-side participants and new participants that are coming on the exchange is happening at least as fast as we had hoped, and the new participants certainly will drive the number of contracts going forward. I don't think we've had a problem at all. I think it was, as we told you before, kind of going into the progression in year three of FMX. The buy-side is taking notice and starting to trade more actively. We're pretty happy with where we are.

Speaker #4: And the new participants certainly will drive the number of contracts going forward. So I don't think we've had a problem at all. I think it was, as we told you before, kind of going into the progression in year three of FMX, the buy side is taking notice and starting to trade more actively.

Speaker #4: So we're pretty happy with where we are.

Speaker #6: Got it. And just bigger picture on FMX for a second. I know year three was kind of always framed as all about market share.

Eli Abboud: Got it. Just bigger picture on FMX for a second. I know year three was kind of always framed as all about market share. That's when the big market share push was going to be. I guess as we come across the three-year anniversary very shortly here, what should our expectations be? Where do you expect to end year three in terms of market share? Can you just give us a baseline expectation?

Speaker #6: That's when the big market share push was going to be. So, I guess as we come across that three-year anniversary very shortly here, what should our expectations be?

Speaker #6: Where do you expect to end year three in terms of market share? Can you just give us a baseline expectation?

Speaker #4: "Higher would be the answer. So, as you know, we've avoided giving direct targets because it's a new exchange, and we're constantly in building mode."

John Abularrage: Higher would be the answer. We've avoided, as you know, giving direct targets because it's a new exchange and we're constantly in building mode. We're not going to change that now in terms of giving an exact number. I am pretty confident that the number going into year three and at the end of year three would be higher than where you see our averages now.

Speaker #4: So we're not going to change that now in terms of giving an exact number. But I am pretty confident that the number going into year three and at the end of year three would be higher than where you see our averages now.

Speaker #6: Got it. And then just last one for me here. Can you walk us through some of the assumptions that you were baking into that Q3 2026 revenue guide?

Eli Abboud: Got it. Just last one for me here. Can you walk us through some of the assumptions that you were baking into that Q3 2026 revenue guide? It looks like listed energy futures volumes are up quarter to date versus Q2. Energy is your largest segment, so I would've anticipated that your revenue would also be headed higher sequentially. Is there maybe some conservatism baked into that guide, or is maybe some softer areas in other asset classes? Any detail there would be helpful.

Speaker #6: It looks like listed energy futures volumes are up quarter to date versus 2Q. Energy is your largest segment, so I would have anticipated that your revenue would also be headed higher sequentially.

Speaker #6: So, is there maybe some conservatism baked into that guide, or maybe some softer areas in other asset classes? Any detail there would be helpful.

Speaker #3: Sure. So look, I mean, as you know, Eli, we always we guide what we see, right? And I think we've been fairly consistent that we would have expected sort of the circa the 10% for this year.

Sean Windeatt: Sure. Look, as you know, Eli, we guide what we see, right? I think we've been fairly consistent that we would've expected sort of the circa the 10% for this year. Obviously, we've exceeded that. Q3 is always an interesting one to guide for because you have the summer months of July and August, and the biggest month of this quarter is, of course, September. That's why we give a range. You're right to say that the biggest asset class we have is ECS, right about 36%, but we have others. There's nothing that we are seeing to cause any concern whatsoever. Look, I think with the sustained geopolitical tensions that exist, I think that's why we've given the range. No, certainly no challenges.

Speaker #3: Obviously, we've exceeded that. Q3 is always an interesting one to guide for, because you have the summer months of July and August, and the biggest month of the year—the biggest month of this quarter—is, of course, September.

Speaker #3: And that's why we give a range. You're right to say that the biggest asset class we have is ECS, at around 36%, but we have others.

Speaker #3: There's nothing that we're seeing to cause any concern whatsoever. But look, I think with the sustained geopolitical tensions that exist, I think that's why we've given the range, but certainly no challenges.

Speaker #3: I think a mid guide of a mid guide at sort of just under 10% and a higher end of 13.5 seems pretty good to us.

Sean Windeatt: I think a mid guide at sort of just under 10% and a higher end of 13.5% seems pretty good to us.

Speaker #6: Got it. Thanks, everyone.

Eli Abboud: Got it. Thanks, everyone.

Speaker #1: Thank you.

John Abularrage: Thank you.

Speaker #3: Thank you.

Sean Windeatt: Thank you.

Speaker #1: Our next question is from Patrick Molly with Piper Sandler.

Operator: Our next question is from Patrick Moloney with Piper Sandler.

Operator: Our next question is from Patrick Moley with Piper Sandler.

Speaker #5: Yeah, thanks for taking the follow-up. Maybe just a broad one on the Fanatics partnership. Could you maybe just elaborate on how that came together?

Patrick Moley: Yeah. Thanks for taking the follow-up. Maybe just a broad one on the Fanatics partnership. Could you maybe just elaborate on how that came together? Maybe just some of the nuances of the partnership in terms of the revenue share, what you're getting out of that, and then why do you think Fanatics was the right partner for you? I know that they're, I think, more of a sports-oriented platform. I would think your customers are maybe more focused on economic indicators and maybe interest rate prediction markets and things like that. How do you kind of marry that and any kind of color you can just give on how that came together. Thanks.

Speaker #5: Maybe just some of the nuances of the partnership in terms of the revenue share, what you're getting out of that. And then why do you think fanatics was the right partner for you?

Speaker #5: I know that they're I think more of a sports-oriented platform. I would think your customers are maybe more focused on economic indicators and maybe interest rate prediction markets and things like that.

Speaker #5: So, how do you kind of marry that? And yeah, any kind of color you can just give on how that came together? Thanks.

Speaker #4: Sure. I think the genesis of it was that we had a DCO in the DCO was kind of active by a few trades a year.

John Abularrage: Sure. I think the genesis of it was that we had a DCO, and the DCO was kind of kept active by a few trades a year. We knew we had that asset. When these things started trading in the market, we looked at how we would best capitalize that. I think we've shown from our prior acquisitions and disposal that our focus is on maximizing shareholder value. The conversation happened internally about what to do with the DCO. Our general counsel introduced me to a gentleman who is an expert in the field, and we talked about what to do with it. We thought the real value was in applying for a DCM and putting the two of them together.

Speaker #4: So we knew we had that asset, and when these things started trading in the market, we looked at how we would best capitalize on that.

Speaker #4: So, I think we've shown from our prior acquisitions and disposals that our focus is on maximizing shareholder value. So, the conversation happened internally about what to do with the DCO.

Speaker #4: Then our General Counsel introduced me to a gentleman who is an expert in the field, and we talked about what to do with it.

Speaker #4: And we thought the real value was in applying for a DCM and putting the two of them together. So we did that, started that process.

John Abularrage: We did that, started that process, and then I fortuitously got introduced to a great partner named Matt King, who runs the Fanatics Sports and Exchange business. From the beginning of that, I think we thought this was a perfect marriage. To your last question, yes, currently Fanatics is a sports-related business, but their reach in terms of consumers and retail is over 100 million customers in their database. That is something that, since I've come into this industry, has been a relative criticism where we have no reach into retail. We've solved that problem by partnering with Fanatics. I think that all you need to do in terms of realizing that this is the right partner to get our shareholders long-term great shareholder value is attend Fanatics Fest, which is mind-boggling in terms of its reach and the people that are there.

Speaker #4: And then I fortuitously got introduced to a great partner named Matt King, who runs the Fanatics sports and exchange business. And from the beginning of that, I think we thought this was a perfect marriage.

Speaker #4: So to your last question, yes, currently fanatics is a sports-related business, but their reach in terms of consumers and retail is over 100 million customers in their database.

Speaker #4: That is something that, since I've come into this industry, has been a relative criticism—where we have no reach into retail. So, we've solved that problem.

Speaker #4: By partnering with Fanatics, I think that all you need to do in terms of realizing that this is the right partner to get our shareholders long-term, great shareholder value is attend Fanatics Fest, which is mind-boggling in terms of its reach and the people that are there.

Speaker #4: And I think we're incredibly excited about this partnership. And of course, fanatics does more at the moment than sports in terms of their current listing, but we will be helping bring the institutional market.

John Abularrage: I think we're incredibly excited about this partnership. Of course, Fanatics does more at the moment in sports in terms of their current listing, but we will be helping bring the institutional market that BGC is known for to that retail market. Combining those two things on contracts that you quite rightly point out our client base will be more interested in, will take prediction markets where it needs to go. On the back of that, you will see predictive data. As we said in the opening remarks, the vast majority of the data that we currently sell is backward-looking. Now you get predictive data, and you will get all new client interest in new data sets. For us, partnering with Michael Rubin, Matt King, Glenn Schiffman, and the team over at Fanatics is an absolute grand slam for us.

Speaker #4: That BGC is known for to that retail market and combining those two things. On contracts that you quite rightly point out, our client base will be more interested in will take prediction markets where it needs to go.

Speaker #4: And on the back of that, you will see predictive data. So as we said in the opening remarks, the vast majority of the data that we currently sell is backward-looking.

Speaker #4: And now you get predictive data, and you will get all new client interest in new data sets. And so for us, partnering with Michael Rubin, Matt King, Glenn Schiffman, and the team over at Fanatics is an absolute grand slam.

Speaker #4: For us, and we're incredibly happy about it. And we will do our very best to deliver shareholder value, as we always do.

John Abularrage: We're incredibly happy about it, and we will do our very best to deliver shareholder value as we always do.

Speaker #5: Okay. And then I apologize if I missed it. We've been juggling a few calls this morning, so it might be in the deck. But is there anything you've disclosed, or are willing to disclose, on the economics of that partnership?

Patrick Moley: Okay. I apologize if I missed it. We've been juggling a few calls this morning, so it might be in the deck, but anything you've disclosed or are willing to disclose on the economics of that partnership?

Speaker #4: Not yet. I mean, I think what we said was that there is upfront consideration, which again, we're always focused on delivering shareholder value. There is an earn-out associated with the exchange volume, and finally, there is a true partnership on the data side.

John Abularrage: Not yet. I think what we said was that there is upfront consideration. Again, we're always focused on delivering shareholder value. There is an earn-out associated with the exchange volume, and finally, there is a true partnership on the data side. There's a gentleman called Aaron Rausell on our side. He's running the project for us. We will endeavor to, again, build the right shareholder value through that.

Speaker #4: So, where we are, there's a gentleman called Aaron Rousel on our side. He's running the project for us, and we will endeavor to, again, deliver the right shareholder value through that.

Speaker #5: All right. Great, John. Thanks for that color. And I look forward to your October FMX analyst day. It is a day after my wedding anniversary, but I'm going to try to make it work.

Patrick Moley: All right. Great, John. Thanks for that color, and I look forward to your October FMX Analyst Day. It is the day after my wedding anniversary, but I'm going to try to make it work. I'll see you guys soon.

Speaker #5: So I'll see you guys soon.

John Abularrage: We can extend an extra invitation to your wife.

Speaker #4: We can extend an extra invitation to your wife.

Speaker #5: Have a good one, guys. Thanks.

Patrick Moley: Have a good one, guys. Thanks.

Speaker #1: Thank you. There are no further questions at this time. I would like to hand the floor back over to Mr. Windeatt for any closing remarks.

Operator: Thank you. There are no further questions at this time. I would like to hand the floor back over to Mr. Windeatt for any closing remarks. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

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