BGC Partner Sees 11.6% YoY Drop in FX Revenues in Q1 2021

BGC Partners, Inc., the leading brokerage and financial technology company, released its financial results for Q1 ended March 31, 2021.

BGC reported revenue of $567.6 million, 5.9% down from $603.2 million in the same period in 2020. In particular, the company posted foreign exchange of $83.4 million, 11.6% lower than the result of $94.4 million reported for the equivalent quarter in 2020.

Revenues and performance across the business was as follows: Voice / Hybrid, including other revenues and excluding Corant, generated revenues of $409.5 million with a pre-tax Adjusted Earnings margin of approximately 22 percent in the first quarter of 2021. Fenics reported record net revenues of $105.6 million, an improvement of 40.0 percent, with a pre-tax Adjusted Earnings margin of 30.2 percent in its Fenics Markets business. Corant also generated record revenues during the first quarter of $52.4 million, up 16.8 percent.

BGC recorded its second highest ever quarterly Rates brokerage revenues, second only to the year ago period. BGC had strong growth across U.S. and European rates, including inflation products and European government bonds. This growth was offset by lower activity across Sterling rates products. The first quarter of 2021 provided a favorable trading environment across many of the Rates products BGC brokers. Increasing U.S. interest rates, particularly in longer dated benchmarks, drove volatility higher and supported global Rates trading volumes. We expect record levels of global debt issuance and increasing interest rate volatility to provide long term tailwinds to the overall Rates asset class.

Corant’s record performance was driven by improved productivity from recently hired brokers and hardening insurance pricing trends.

Fenics GO volumes increased by more than 300% in the first quarter, primarily driven by Euro Stoxx 50 and Nikkei 225 index options, along with recent launches of additional Asian and European index products. Estimated block-sized market share in front-month Euro Stoxx 50 and Nikkei 225 index options increased by 490 and 1,290 basis points to 5.7 percent and 13.0 percent, respectively.

Fenics brokerage revenues increased by 49.2% to $83.7 million, while Data, Software, and Post-trade revenues increased by 13.3% to $22.0 million.

Apart from the results of revenues, for the first quarter of 2021, GAAP income from operations before income taxes was $74.1 million, up 138.6% compared to the result last year. The company sees a 24.1% rise from $118.9 million to $147.5 million in adjusted EBITDA. In addition, the post-tax adjusted earnings reached $101.6 million, 1.8% higher than the result of $99.8 million reported for the equivalent quarter in 2020.

“BGC’s margins improved across nearly all measures, driven by record Fenics and Corant revenues. Fenics growth accelerated during the first quarter, with net revenues increasing by 40 percent and represented over 20 percent of our total revenues, excluding insurance – its highest ever contribution. The growth in our Fenics platforms continued to significantly outpace the overall business as we added new clients and expanded our product offerings. As we continue to grow our higher margin businesses, we are well positioned for increased profitability”, Howard W. Lutnick, Chairman and CEO of BGC Partners said.