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NEW YORK - BGC Group, Inc. (NASDAQ: BGC), a prominent global marketplace and financial technology services company with a market capitalization of $4.76 billion and impressive revenue growth of 11.5% over the last twelve months, has reaffirmed its financial outlook for the first quarter ending March 31, 2025. According to InvestingPro data, analysts maintain a Strong Buy consensus on the stock, though current valuations suggest the stock may be trading above its Fair Value. The company’s projections, which include revenue and pre-tax adjusted earnings, remain consistent with the forecast range provided in its February 14, 2025, financial results announcement.
The company continues to employ non-GAAP financial measures for a more nuanced understanding of its performance, excluding certain non-cash items, equity-based compensation, and other expenses that do not involve cash transactions. InvestingPro analysis reveals BGC maintains a robust financial health score of 2.66 (rated as GOOD), with particularly strong metrics including an impressive 89.69% gross profit margin and a healthy current ratio of 1.56. Discover more detailed insights and over 30 key financial metrics with InvestingPro’s comprehensive research report. BGC believes these adjusted figures, such as "Adjusted Earnings before noncontrolling interests and taxes" and "Post-tax Adjusted Earnings to fully diluted shareholders," offer a clearer picture of the company’s operational earnings.
BGC’s adjusted earnings calculations factor out various charges, including those related to equity-based compensation such as restricted stock units and limited partnership units, which the company uses to align employee interests with those of common stockholders. These adjustments are intended to exclude items that management deems not indicative of BGC’s core business performance.
The company’s methodology for calculating adjusted earnings involves an annual estimate of the non-GAAP tax provision, similar to the approach for GAAP income tax provision. BGC applies statutory tax rates to its taxable income derived from pre-tax adjusted earnings, which is significantly influenced by equity-based compensation charges.
Furthermore, BGC provides an additional non-GAAP financial performance measure called "Adjusted EBITDA," which adds back items such as taxes, interest expense, and certain non-cash charges to GAAP net income available to common stockholders. This measure is utilized by management to assess the company’s operating performance, excluding the effects of financing, income taxes, and capital spending.
BGC’s liquidity, another non-GAAP metric, is calculated as the sum of cash and cash equivalents, reverse repurchase agreements, financial instruments owned, less securities lent out in securities loaned transactions and repurchase agreements. This measure helps determine the cash available to the company on short notice.
The company also presents revenue comparisons on a "Constant Currency" basis to eliminate the impact of foreign currency fluctuations, providing a more consistent comparison of its revenues across periods.
The information provided is based on a press release statement from BGC Group, Inc. and remains subject to verification and should be considered alongside GAAP financial results. BGC’s use of non-GAAP measures is intended to supplement GAAP reporting and provide additional insight into the company’s financial performance. Investors should note that BGC’s next earnings report is scheduled for April 30, 2025, which will provide updated insights into the company’s financial trajectory. For comprehensive analysis and real-time updates, access BGC’s full financial health report on InvestingPro, which includes exclusive ProTips and advanced valuation metrics.
In other recent news, BGC Group has reaffirmed its financial outlook for the fourth quarter ending December 31, 2024, maintaining its previous revenue and pre-tax Adjusted Earnings guidance. The company utilizes non-GAAP financial measures, such as Adjusted Earnings and Adjusted EBITDA, to assess business performance, excluding non-cash items and certain expenses that do not impact cash flow. In a strategic move, BGC Group has acquired OTC Global Holdings, positioning itself as the world’s largest energy and commodities broker, which is expected to enhance its market presence.
Piper Sandler has maintained an Overweight rating for BGC Group, setting a price target of $12.00, reflecting optimism about the company’s future under new co-CEOs Sean Windeatt and John Abularrage. The management expressed confidence in navigating the current economic landscape, which is considered favorable for BGC’s brokerage business. Piper Sandler also highlighted a positive outlook for BGC’s fourth-quarter 2024 earnings, driven by a robust trading environment linked to the U.S. Presidential Election, which resulted in record derivative volumes.
The departure of Chairman & CEO Howard Lutnick in early 2025 to become Commerce Secretary has raised some concerns, but Piper Sandler remains optimistic about BGC’s prospects. The firm anticipates increased activity on FMX following the launch of UST futures, which could alleviate worries regarding Lutnick’s exit. These developments underscore BGC Group’s strategic efforts to strengthen its brokerage capabilities and maintain stability in its financial performance.
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