BGC Group, Inc. (NASDAQ: BGC) has updated its outlook for the quarter ending June 30, 2024, reaffirming previously stated outlook ranges for revenue and pre-tax adjusted earnings. The company's outlook was initially contained in its financial results press release issued on April 30, 2024.
Key metrics and financial measures: BGC uses non-GAAP financial measures, including "adjusted earnings before noncontrolling interests and taxes" and "post-tax adjusted earnings to fully diluted shareholders," which are supplemental measures of operating results used by management to evaluate the financial performance of the company and its consolidated subsidiaries. Adjusted earnings primarily exclude certain non-cash items and other expenses that generally do not involve the receipt or outlay of cash by the company and/or do not dilute existing stockholders. Adjusted earnings calculations exclude certain gains and charges that management believes do not best reflect the underlying operating performance of BGC. The company's adjusted earnings and adjusted EBITDA measures exclude all GAAP charges included in the line item "equity-based compensation and allocations of net income to limited partnership units and FPUs" as recorded on the company's GAAP consolidated statements of operations and GAAP consolidated statements of cash flows.
Equity-based compensation: Virtually all of BGC's key executives and producers have equity stakes in the company and its subsidiaries and generally receive deferred equity as part of their compensation. The company issues restricted stock units (RSUs), restricted stock, limited partnership units, and other forms of equity-based compensation to provide liquidity to its employees and align the interests of its employees and management with those of common stockholders.
Tax provision for adjusted earnings: BGC calculates its tax provision for post-tax adjusted earnings using an annual estimate similar to how it accounts for its income tax provision under GAAP. The company updates its estimate at the end of the annual period to reflect the actual tax amounts owed for the period. The company views the effective tax rate on pre-tax adjusted earnings as equal to the amount of its non-GAAP tax provision divided by the amount of pre-tax adjusted earnings.
Adjusted earnings per share: BGC's pre and post-tax adjusted earnings per share calculations assume that the fully diluted share count includes the shares related to any dilutive instruments but excludes the associated expense, net of tax, when the impact would be dilutive.
The market has reacted to these announcements by moving the company's shares 1.0% to a price of $8.28. For more information, read the company's full 8-K submission here.
