Welcome to the BGC Partners, Inc. Fourth Quarter and Full Year 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference call is being recorded. I would now like to hand over the conference to your speaker today, Jason Chryssicas, Head of Investor Relations. Thank you, and please go ahead.

Good morning, everyone. We issued BGC's fourth-quarter and full-year 2021 financial results, press release, and presentation summarizing these results earlier this morning. You can find these at ir.bgcpartners.com. Please note you can find additional details on our quarterly results in today's press release and investor presentation. Unless otherwise stated, the results provided on today's call compare only the fourth quarter of 2021 with the prior-year period, and compare revenue excluding insurance due to its sale on November 1, 2021. We will be referring to our results on this call only on an adjusted earnings basis unless otherwise stated. We may also refer to adjusted EBITDA. We may refer to our liquidity, which we define as cash and cash equivalents plus marketable securities that have not been financed, reverse repurchase agreements and securities owned, less loaned and repurchase agreements. We define total capital as redeemable partnership interest, total stockholders’ equity, and non-controlling interest in subsidiaries. Please see today's press release for results under generally accepted accounting principles or GAAP. Please also see the relevant sections in the back of today's press release for the complete and updated definitions of any non-GAAP terms, reconciliations of these items to the corresponding GAAP results, and how, when, and why management uses such terms. Additional information with respect to our GAAP and non-GAAP results mentioned on today's call is available on our website at ir.bgcpartners.com and in our investor presentation. We refer to the company's technology-driven businesses as Fenics. Fenics offerings include Fenics Markets and Fenics Growth Platforms. I also remind you that the information regarding our business on today's call that are not historical are forward-looking statements. These include statements about the effects of the COVID-19 pandemic on the company's business results, financial position, liquidity, and outlook. Any forward-looking statements involve risks and uncertainties. And except as required by law, BGC undertakes no obligation to update any forward-looking statements, any outlook and targets discussed on this call, assume no material acquisitions, buybacks, extraordinary transactions or meaningful changes to the company's stock price. For discussion of additional risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements see BGC's SEC filings, including but not limited to the risk factors and special note on forward-looking information set forth in these filings and any updates to such risk factors and special note on forward-looking information contained in the subsequent reports on Form 10-K, Form 10-Q or Form 8-K. With that, I'm now happy to turn the call over to Howard Lutnick, Chairman of the Board and CEO of BGC Partners.

Thank you, Jason. Good morning and thank you for joining us for our fourth quarter and full year 2021 conference call. With me today are BGC's Chief Financial Officer, Steve Bisgay and our Chief Operating Officer, Sean Windeatt. BGC improved profitability across all metrics in 2021. Additionally, we executed numerous value-enhancing initiatives including selling our insurance brokerage business for $535 million, reducing our share count by over 10% and expanding Fenics UST's market share by nearly 600 basis points to over 20%. Leveraging Fenics UST's success, after consulting with our global clients and strategic partners, we're pleased to announce the expansion of the scope of FMX Futures to cover the entire U.S. Rates Futures complex. U.S. Treasury futures, Eurodollars, and SOFR futures were launched concurrently. We recently launched a number of crypto products and expect to have a comprehensive offering by the end of this year. Our crypto platform is powered by our multibillion-dollar global infrastructure and state-of-the-art Fenics trading technologies. Our futures exchange was amongst the first exchanges permitted to list crypto derivatives, an advantage we plan to leverage as we scale our cryptocurrency offerings. As you know, we completed the sale of our insurance brokerage business on November 1st, bringing in gross proceeds of $535 million. Since we announced the sale on May 26th we have repurchased and redeemed 71.5 million shares and units, reducing our fully diluted share count by over 10%. We continue to grow our technology-driven higher-margin Fenics business at an industry-leading pace of 26% to over $400 million for the full year 2021. For the fourth quarter, Fenics net revenue improved by 20% compared to the prior year, which represents a record 23% of BGC's total revenue, excluding insurance. We expect Fenics to exceed a quarter of BGC total revenues in 2022. Fenics revenue growth was a key factor in driving front-office productivity, which was 10% higher during the quarter, improving post-tax adjusted earnings by 20% and expanding margins by 370 basis points. I'd like to take a moment to update you on my health. As many of you know, I was diagnosed in the fall with non-Hodgkin's lymphoma. I'm happy to report that I have completed chemotherapy on January 31. In mid-December, I had a very positive PET scan where the cancer was 95% resolved and it made my doctors and me very, very happy. I have a final PET scan scheduled in March, and I look forward to updating you then. If you'd like more details, my most recent video update is provided both on our website, on Rumble, and on YouTube. With that, I'd like to turn the call over to Steve Bisgay.

Thank you, Howard and hello everyone. BGC generated total revenue of $461.6 million, which included $19.9 million of insurance revenue. Excluding insurance brokerage, our total revenue was $441.7 million, an improvement of 2.7% versus the fourth quarter a year ago. Shorter volumes seen in the first half of the quarter softened as surges in global COVID-19 cases plus market-wide dislocations, particularly across the voice/hybrid business in December. Overall, industry-wide secondary trading volumes were mixed during the fourth quarter with solid activity across rates and energy products, while credit and European equity-driven volumes were challenged. By geography and excluding insurance, the Americas increased by 6.1%. Europe, Middle East, and Africa revenues increased by 2.2%, while Asia Pacific revenues decreased by 2.2%. By asset class, rates increased by 5.8%, while credit, FX, energy and commodities, and equity-driven and cash equities decreased by 4.2%, 1.5%, 0.2% and 3.2% respectively. Deeper integration of Fenics technology solutions across the entire business has driven front-office productivity 10.4% higher during the fourth quarter. For the full year, average front-office productivity increased 8.1% to $811,000, the second highest ever mark, behind only 2008 when the global financial crisis drove volumes and volatility to record levels. As we continue to automate our business, we expect productivity and profitability to increase. Turning to Fenics quarterly performance. Fenics generated net revenue of $101.4 million, an improvement of 20.2%. Fenics Growth Platforms recorded revenue of $13.7 million, an improvement of 89.3%, and Fenics Markets generated revenue of $87.7 million, an increase of 13.7% and had a pre-tax adjusted earnings margin of 30.7%. Moving on to expenses, our compensation and employee benefits under GAAP increased in the fourth quarter of 2021 due to the sale of the Insurance Brokerage business, which included one-off compensation charges and sale-related expenses totaling $168.6 million, the majority of which were non-cash. Our non-compensation expenses under GAAP and adjusted earnings decreased by 3.9% and 5.4% respectively, primarily due to lower interest expense, professional and consulting fees, and other expenses. These expense reductions were partially offset by the higher selling and promotion charges as COVID-19 restrictions have relaxed across many of the major geographies in which we operate. Moving onto our adjusted earnings. Our pretax income was $86.5 million, an increase of 9.2% and represents a 221-basis point margin expansion from last year. We recorded post-tax adjusted earnings of $87.9 million, an increase of 19.5% and 370 basis point margin expansion. We generated fourth quarter adjusted EBITDA of $230.3 million, an improvement of 114.4%. Turning to share count. Our weighted average share count decreased 4% sequentially and 8% year-over-year to 509.2 million. Our fully diluted spot share count as of December 31st decreased by 19.7 million shares, or 3.8% sequentially to 497.5 million shares, which reflected $26.3 million Class A common shares repurchased during the quarter. Compared to a year ago, BGC's fully diluted spot share count decreased by 55.7 million shares or 10.1%, which reflected the repurchase and redemption of 72.9 million shares and units during the year. As of December 31st, our liquidity was $594.8 million compared with $655.2 million as of year-end 2020. The change in our liquidity reflected $457 million in share and unit repurchases and dividend and distribution payments, as well as a reduction in notes payable and other borrowings of $263.1 million compared to last year. Cash and cash equivalents were $553.6 million versus $596.3 million as of December 31st, 2020. Notes payable and other borrowings were $1.0528 billion compared with $1.315 billion and total capital was $682.1 million compared with $832 million. And with that, I'm happy to turn the call over to Sean.

Thanks, Steve, and good day, everyone. Fenics, our technology-driven higher-margin business, continued to grow at a market-leading rate. Fenics strategy is focused on converting its $1.4 billion voice hybrid revenue base into higher-margin technology-driven Fenics Market revenue, while concurrently scaling its state-of-the-art fully-electronic Fenics Growth Platforms, including FMX and cryptocurrencies. Looking at Fenics in more detail. Our Fenics Growth Platforms revenue improved 89.3% from a year ago, driven by growth across Fenics UST, Lucera, Fenics FX, and Fenics GO. Fenics U.S. Treasury revenues increased nearly sixfold, driven by market-leading ADV growth, new product offerings, and more traders using the platform. During the fourth quarter, Fenics UST had ADV growth of over 65%, significantly outperforming the overall market. Fenics UST CLOB market share increased nearly 600 basis points to 21% in December. Additionally, Fenics FX Treasury saw robust demand for its new electronic T-bills offering with a five-fold increase in ADV quarter-over-quarter, and captured an estimated 15% of the electronic U.S. Treasury bill market. Lucera, our infrastructure and software business, saw accelerated revenue growth of its highly recurring and compounding subscription revenue base of 72% in the fourth quarter as it onboarded new institutional and large bank clients, including in Lucera's cryptocurrency infrastructure business, which launched in the third quarter. Lucera is providing connectivity to the world's deepest crypto liquidity pools as well as world-class infrastructure. Fenics FX, our ultra-low-latency electronic FX trading platform, generated strong double-digit revenue and volume growth during the quarter that outpaced its FX ECN peers and the overall market. Fenics GO, our global options electronic trading platform saw revenue increase nearly threefold from a year ago, driven by the integration of MatchBox, Fenics' equity platform that automates the trading, booking, and lifecycle management of global equity derivative contracts, creating a comprehensive electronic options solution. Additionally, Fenics GO launched new MSCI index options products in January 2022 and expects to launch new cryptocurrency options later in the year. Looking at Fenics Markets, revenues improved by 13.7% driven by strong growth across rates, FX, and market data. Fenics MIDFX, the leading wholesale FX hedging platform continued to generate strong volumes across Spot FX and Asian NDF, driving revenue 20% higher versus last year. Fenics MID technology provides a highly efficient, fully electronic platform to large global banks to hedge risks in a neutral environment. Fenics Market Data signed over 40 new contracts during the fourth quarter and more than doubled the total contracted value versus a year ago. Fenics Market Data has seen continued success in its new regulatory services offering with a robust pipeline leading into 2022. Fenics Market Data, which has a highly recurring and compounding subscription revenue model, continues to grow at a solid double-digit pace. Fenics Direct, our web-delivered multi-dealer FX options platform, saw ADV and revenue both double in the fourth quarter versus the prior year period. Capitalab, NDF match business, our advanced web-based matching platform that helps clients reduce foreign exchange exposure, had double-digit volume and revenue growth versus a year ago. Intercompany technology services generated revenue of $14.9 million for the quarter. This represents internal charges to BGC's voice hybrid businesses by Fenics for its technology, and is therefore eliminated in the company's consolidated financial results. As we continue to convert our voice hybrid business into Fenics Markets revenue, intercompany technology service revenues will naturally decline, while Fenics Markets revenues will increase at a far superior rate. Going forward, we will no longer report this intercompany charge. Our voice hybrid business generated revenues of $340.3 million, down 1.6% from last year due to the continued conversion of voice hybrid to Fenics revenue. We continue to focus on automating our $1.4 billion voice hybrid revenue base to our higher-margin Fenics business. Our rates businesses grew 5.8% with particular strength across U.S. government bonds, inflation products, listed rates, and emerging markets. This improvement across rates brokerage more than offset declines across other brokerage asset classes, excluding insurance. Expectations of rising interest rates and associated volatility, along with the end of quantitative easing in the U.S., are expected to provide tailwinds to our leading rates business in the latter part of 2022. Now turning to first quarter outlook for 2022, BGC's revenues were approximately 2% lower for the first 28 trading days of the first quarter when compared to the same period last year, excluding insurance. We expect to generate total revenue of between $490 million and $540 million as compared to $515.1 million last year, which excludes $52.4 million of insurance revenue. We anticipate pre-tax adjusted earnings to be in the range of $105 million to $125 million versus $113.9 million. And we anticipate our full year 2022 adjusted earnings tax rate to be in the range of 8% to 10% versus 6.4% for full year 2021. And with that, I'd like to turn back to Howard for closing remarks.

Thank you, Sean. We're proud of what we have accomplished in 2021, including returning over $457 million to shareholders in the way of buybacks, dividends, and distributions. We also lowered our debt by over $250 million all while growing Fenics to over $400 million of top-line revenue and improving BGC's profitability across all metrics. As of yesterday, BGC's 2022 price to earnings ratio was 6.4 times, as compared with Fenics' peers at 38.4 times earnings. This is a fundamental reason why we prioritize buybacks over dividends and distributions. With that, Operator, we'd like to open the call for questions.

Operator: Our first question comes from Richard Repetto of Piper Sandler. Your line is open, please go ahead.

Good morning, Howard and the team. First, we're very happy that everything's going well on the health front, Howard.

Thank you.

Question is on the brokerage. You're welcome. The first question on the brokerage business, just taking a look at some of the asset classes. If you look at energy, energy was the lowest brokerage revenue going back to the fourth quarter of 2018. I'm just trying to see the benchmarks were pretty flat to up. But anyway, the question is, is anything special going on in energy as well as in rates? I know the rates did grow year-over-year and quarter-to-quarter, but fourth quarter seemed to see increased volatility; it was pretty special at the CME and other benchmarks that trade rates and energy. Any more color you can give us?

I think if I take energy — start you out on energy, I think nothing is special. It has always been a growth area and continues to be a growth area for us in energy commodities. I think it was flat on the quarter and up fractionally on the overall year. But I mean, nothing specific in terms of energy and commodities, just an area that we continue to build and grow, also not just in the U.S. but both Europe and Asia as well. And from a rates perspective, I think here we have a big rates franchise. The rates were up, as we said, 5.8% in the quarter. I think I singled out a couple of key driving factors there in our inflation business and emerging market rates and really for us, the performance of our rates business is driven by the fact that we have both a broad spectrum of products in rates and in geography as well.

Got it. Okay. Next question is on the futures exchange. Could you push back the launch so you can launch all the great products at the same time? I'm asking in regards to partners — do we need to wait until the fourth quarter to hear who's in the partnership or who might be investing in the exchange as well?

We would expect to announce our strategic partners before the fourth quarter. So that should be coming sooner than our opening for sure. And you're right — what happened is in time with our strategic partners and clients, they wanted a complete offering. And so, we decided to list them all. So, we will do Eurodollars, we will do SOFR contracts, and we will do U.S. Treasury futures, all on the platform. And I think we have gotten just an incredible amount of positive feedback from our client base and our strategic partners that that is the model that they want and we have the capacity to do it. We have the technology to do it. We have the connectivity to do it. And I think we're really the only game in town to create a competitor to the Chicago Mercantile Exchange.

And last question is on your comments on crypto and FMX being approved. Can you give us a little bit more background on that? Was this an approval from way back or was it more recent that you got the approval? I'm just trying to get to understand what the crypto offering is and how you got the approval, what could have led to adjusting.

Sure. FMX and its predecessor Xchange and our DCO and clearer were approved to do crypto derivatives, and that was a while back. The application was years in the making. And that's just an asset that we have that we can extend at scale and compete with the Chicago Mercantile Exchange again on another front. When you have a multibillion-dollar electronic trading system globally connected with futures infrastructure and regulatory approvals all set up in front of us, it just creates a powerful competitor to the Chicago Mercantile Exchange. Working with the LCH in the rates franchise has been incredibly exciting, and I think it has really motivated our clients and our potential strategic partners to deeply engage with us. You're watching our treasury business grow its market share and that is just a concurrent rates business to U.S. Treasury futures and Eurodollars. We really feel excited about it. We can compete with the Chicago Mercantile Exchange on those product categories, and then we can extend those product categories across the crypto space if our clients and the market want us to. It seems exciting to pursue. So, we have the infrastructure for it. We have the regulatory framework for it. And I think it's pretty incredibly exciting for us.

Got it. Thank you. And look forward to getting together soon Howard. Take care.

Our next question comes from Andrew Gutman of Credit Suisse. Your line is open, please go ahead.

Good morning. This is Andrew Gutman with Credit Suisse and Howard, glad to hear the update on your health.

Thanks so much.

Can you please expand on some of the potential revenue opportunities in 2022?

Specifically, on how much revenue growth will come from fee holiday roll-offs? Will it be a step-up in 1Q 2022 or a rollout throughout the year? And how does the overall revenue mix of Fenics at roughly 25% of the revenues impact the overall margin profile?

So, with respect to our treasury business, if you had expiring fee holidays that roll off over the next two quarters, you should expect over the next two quarters our revenue opportunity across the treasury business will improve. Additionally, we are talking to our strategic partners and clients now about their rate cards in Futures and how that will work. If we had launched this Futures business in 2018, people would not have been so confident that we could go from the beginning to over 20% market share in three years. The whole market has watched us, and without strategic partners coming forward, as you saw, in December we had 21% market share and a relentless move upward. Imagine we launched Treasury bills and we gained 15% market share in sequential quarters. So, I think the excitement for us to go into the futures space is palpable. I just don't think the timing of what we would say these fee holidays will be will be as long as they need to be in U.S. Treasuries when we get to futures. And I just think there's a path to revenues and material improvements.

Thanks. And just as my follow-up here, can you expand on how you're growing with this large market data opportunity? You signed 42 new contracts and 40 in 2021. How will that send into revenue growth? Is that a large step up in the first quarter?

What happens is you sign long-term contracts and then those contracts pay out over time. Let's say it's a four-year contract or a one- to four-year contract. So, we have just begun to sell our treasury data. Futures data is in the offering, and people are discussing with us now to include that in a package. And so, I think what you'll see is accelerating growth rates, as that's been key to the compounding subscription model. As you get these compounding revenues, they just keep growing — every new contract adds three or four years of revenue on top of your existing revenue base. So, I think we'll just see accelerating growth rates. If we had growth in the 20s, you'll see growth exceed the 30s, then exceed the 40s. And so, I think over the next couple of years, you're going to see an accelerating growth rate in market data. They will get larger and larger. I think that is one of the biggest opportunities we have. Our expectation is the market data line could be three times the size of what it is now. Therefore, I don't think there's much in the way of our accelerating growth rates over the next two years.

The next question comes from Patrick O'Shaughnessy of Raymond James. Your line is open. Please go ahead. Patrick, your line is open. Please ensure you're not muted locally. Unfortunately, we're not getting any connection from Patrick's line, so I'll hand back over to the team to conclude.

Thank you all for joining us today. I'm very proud of what BGC accomplished; we showed that the drive of Fenics will drive all of our metrics better. The conversion of our voice hybrid business to Fenics Markets will continue to drive margin. Our growth platforms will continue to grow and the new inclusion of us building both futures and then a broad spectrum across the rates complex and cryptocurrency — 2.5 trillion of outstanding instruments to trade is really just an incredible opportunity for someone on the scale of BGC. So, we're very excited about our future. As we said, we're going to prioritize buybacks over dividends and distributions. And we look forward to talking to you all next quarter. Thanks for your time and thanks for your good wishes. I look forward to giving you a very, very positive, cancer-free update in a couple of weeks. My doctors are supremely confident. They've made me very happy and confident. My family can't wait for the scan, so I look forward to telling you all in a couple of weeks. Have a great day.

This concludes today's call. Thank you for joining. You may now disconnect your lines.