BGC Group, Inc. (BGC) Earnings Call Transcript & Summary

All right. Good morning, everyone. Welcome to our -- 1 of our first morning sessions at our Financial Services Conference. I'm Ben Budish, Barclays analyst covering the brokers, asset managers and exchanges. And for our first session, we have Howard Lutnick, Chairman and CEO of BGC Group. Howard, thank you so much for being here. Welcome.

Thanks, Ben.

Maybe just to start with some high-level commentary on the business, BGC has got a pretty long complicated history. Talk a little bit about that history, and give us a brief overview of what the company looks like today.

Okay. So BGC is the world's most valuable wholesale financial services company. So when JPMorgan, Barclays, Goldman, Morgan Stanley, doesn't matter, when they wake up in the morning, their client calls them, who do they call, right? And they call BGC Group, which is the largest wholesaler but valuable wholesaler in the world. So wherever Barclays goes, we're going to follow you like a puppy, right? So if you want to trade x, we're there as your wholesaler because when you buy it from a client, we can sell it to them. So that theoretical, that business is a growth business because it's in bonds, it's in equities and in commodities. So as long as global trading rises, our business had a core tailwind behind it. That changed in 2008, when interest rates went to 0, right? So we had a beautiful growth company for decades upon decades and then interest rates went to 0, and that broke the relationship between issuance, and secondly, market trading volume because like you learned in Japan, if interest rates are 0, it's kind of boring. So volume declined because 0 interest rates are just boring. Now that they're back, there's a core structural understanding, which is if issuance grows, secondary market trading volume tends to grow 60%. So what happened from 2008 to 2022, people forgot about us as a company because we were in 0 interest rate environment. And therefore, we had instead of a tailwind, we had this sort of boring headwind, like literally boring. You call a client up and say, "Do you want to sell Coca-Cola and buy Pepsi?" They said, "Pick up some yield, where we pick up." I said, "2 basis points." You will n0ot forget it. It's just too boring, but that's changed, and that's back. So we have a core growth rate of 10% going forward. That was my view. I said it in June of '22. It worked with '23. It's working so far for '24. It is -- we have that tailwind, and we have a strong tailwind. How about that since 2008, rates issuance is up 5x, and volumes are up like 12%. You'd say, well, if there was the 60% correlation, does that mean it's going to triple? And the answer is, God love me that much. So it's not tripling on Thursday. So what I think is going to happen is we're going to have 10% growth for the rest of my life as long as there's real interest rates. Credit up 3x and volumes flat. And you said that can't -- that scale of issuance can continue. So BGC's core business is in fantastic shape, going to grow relentlessly for the long, long future as a relationship between issuance and secondary market trading volume repairs itself, okay? Just -- it's going to continue to grow. I used to say our business is like -- remember, Gillette used to say that their business is great because every night, half the population of the world goes to bed and comes up needing a razor, right? Not for me necessarily, but most people. The bond business is a spectacular business, the equity business, the commodity business. The global scale of trading on the Earth is going to grow. We are the biggest wholesaler in the world. And that relationship is back with real interest rates. Do I care if they're 5.25%, 4.25%, 3.25%, 7.25%? No, just no 0.25%, okay, that's just not a thing. But provided we have real rates, the core business of BGC's rock.

Great. Well, you answered a lot of my second question about what does it take to get the bond market kind of going again. But maybe if you could unpack that just a little bit more. You kind of mentioned it hasn't happened yet, and it's going to grow for a long time. What underlies that? Is it just banks over time allocating more capital because there's more out there? We need to put more traders in seats? You indicated 10% growth for the next 5 to 10 years. Like how does it happen? Is it more turnover? Is it more seats, people trading? What are the pieces we kind of be looking for or keeping track of?

So the core relationship and the 0 interest rates is buy and hold, right? If you decide to buy something, you buy it, there's no reason to sell it to pick up the yield because there's no yield to pick up. That's why I gave that example, Coke versus Pepsi, pick up 2 basis points. Why? So what happened is now the relationship is juicy again, right? If I can sell Coke and buy Pepsi and pick up 50 basis points, hey, that's worth talking about. So what's happening is the banks, right, are starting to build back that model, build back the model of talking about secondary market trading, right? We went back into Japan. We pretty much pulled virtually everything out of Japan because it was going to be 20 years of boredom. 20 years of basically no trading. And now rates are back, not quarter basis point. But in Japan, a quarter, it's basically a 4x. So 25 basis points in Japan is like 100 basis points here. So that business has started again. And it started growing again because there's reasons to trade. That is, what you are going to see across America and the Western world is that the banks are going to grow, bank's earnings are going to grow from the trading side demonstrably and clearly going to grow. You've seen them growing lately, and they're going to continue to grow. So that whole ecosystem is growing, and we are a beneficiary of that ecosystem. So it's simply a matter of the relationship between bonds, the relationship of equities and the relationship of commodities. All means that it's worth trading against them because there's value to create. Smart people at banks are going to advise clients. Those clients are going to do more business. It's worth it for their banks to invest in that space. You're seeing your bank is investing in that space and making money on it. All the big banks are investing in that space and making money. And that means it's coming, the secondary market trading volume is coming. You feel it all the time. It's just volume-based number. We don't make money. We're in marketplace. We're in exchange for everything that doesn't trade on an exchange, and this month, we're opening our futures exchange. Right? So if you sat next to me at a dinner party and I explained what I did and you stayed awake, but if you explain what I did, you'd say, well, then, if you're exchange for everything in the world that doesn't trade on an exchange, why did you become an exchange? Well, FMX, which we'll get to, is opening this month. But the idea is we don't make money when the market is going up. We don't lose any money when markets go down. We are built and based on volume, and we are the best in the world and built and based on volume. By being the best in the world means our revenues grew 10%. Our earnings grew 18%. And all of our competitors grew at best, 3% or 5% or 6% revenue. So they all demonstrably less than us, demonstrably less returns than us, demonstrably less performance than us. Their stocks don't do as well as us. We are a better company, we're smarter, better technology, and we're winning in the space. But the space is finally -- thank God, finally coming towards us because we have rates. We have a huge tailwind behind us, and BGC has the biggest sale in the business. So when you finally have a tailwind -- you know when there's a headwind and you have big sales, who cares? You are not going anywhere. When you finally have a tailwind and you get to put up your big sales, you rock and the company rock.

Awesome. Well, let's talk a little bit about your treasury business before we pivot into FMX. And so -- you originally sold your treasury business to, I think, NASDAQ in 2013, restarted it about 6 years ago. What's been happening over the last 6 years, you've taken meaningful market share. I guess why the decision to restart then, why have you been successful since then?

So you all now understand why I sold -- we had the dominant business in treasuries, right? There was a duopoly, us and Brokertec. We had in the high 50s. They had in the low 40s. It was just the two of us. My view is that interest rates were going to be 0 for like so long and become boring. And so you can't really invest in the business because it's going to become boring, volumes can be boring, and we could sell it at a very high price. So we sold our eSpeed electronic business, our treasuries to NASDAQ for the market cap of BGC at that time. We sold less than 10% of our revenues for the market cap of the company at that time. Right? That relationship is still true. Our electronics business is worth the market cap of this company, okay? And people just don't understand the value of our electronic assets are so great. And that's why I come to a conference with you, Ben, to try to tell people to understand the assets of this company are so great that when our stock goes far, far higher, there's a reason for it, okay? So 2013, we sold our business to NASDAQ because we thought rates were going to be low for a long time, and it wouldn't be fun, okay? We got a high price, we then took the money, invested in a commercial real estate brokerage business because that is the largest asset class that likes low interest rates for long periods of time. That company is called Newmark. It's currently worth about $3.5 billion, and we spun it off to our BGC shareholders. Right? We created the company, we invested the money from NASDAQ, built a commercial real estate broker. You sort of get the idea. I don't like to make money when it goes up, to lose when it goes down, I'm in the business of markets. And we built that -- and that business is on fire, stock's up over 100% in the last year. And commercial real estate brokers, which we spun off to our shareholders. 2018, I start to get the sense that rates are going to come back. So it's time to go back in, and you have to go back in early because you have to build it. So we built a new system and we built the fastest trading system with the tightest spread, the ability to change the spreads on the fly and have it completely sort of integrated with all the banks of the world and all the trading firms in the world and brought new ideas to the market. One of the ideas which we'll talk about because remember, we're a marketplace for treasuries -- was that if a trading firm is having a lousy experience with another trading firm. Example, Citadel is making prices. Jump is making prices, right? They want to trade with the banks who are underwriting corporate bonds. They don't want to trade with each other. That's like an unattractive relationship. So we can mark out trading with each other, meaning Jump will never see Citadel's prices and Citadel will never see Jump's prices. And what that did is it created comfort that Citadel could put larger size in because they weren't worried about getting picked off by one of their brethren. And so what happened is our volume started to grow because people were comfortable. So the CME lets everybody trade with everybody. And they have shark tank. And that shark tank of Jump trading with Citadel is 30% of the volume. We have 30% market share, but we've created 5% proprietary volume of Citadel putting in a larger size trade because they're not afraid. So they only put 1 over there, but they're willing to put, as an example, 5s with us because they're not afraid. So when we get to 50% market share, they'll have 15 points of proprietary volume of shark tank. And we will have 15 points of proprietary volume based on better markets, and more comfort. And which would do better, right? So that's -- our treasury business has grown 1 or 2 points market share against the CME sequentially every quarter for 15 quarters, 1 or 2 points of market share, 15 quarters in a row now at 30% market share. It is a steamroller going down a hill. People who say you can't make a glove on champ are just not paying attention. That's what the CME would say, pay no attention to the man behind the curtain, pay no attention to cash U.S. treasuries, which we paid $5.5 billion for it. Ignore that because they're ripping us. I think that's unusual to say.

Well, that's a good pivot into FMX. So I've heard you say it before, you want to take points off the champ. Futures are different from the cash business. So what gives you the confidence and sort of what's the impetus behind starting this exchange? You're traditionally an interdealer broker, why go for -- go after this opportunity? And again, why do you think you can be as successful in futures as you have been on the cash side?

Okay. So we are the market for everything in the world that doesn't trade on an exchange, right? And now we're going to go into the exchange business called FMX. And we are opening in futures in the month of September 2024, which we are in. So that means it can't be more than 3 weeks from today. And say, why have -- why don't you just announce the day you're going to open? And I'll tell you why. Because the way futures work, is there are things called FCMs, okay? They are the intermediary between the client and the exchange. So someone has to provide your margins for you and do that work, and they are called an FCM, right? So if one of our FCMs thinks it will be ready on Thursday and we were planning on opening on Monday, we'll open on Thursday. That's all. Now if they said, I'll open on Thursday in October, then the answer is, I'll see in October, but we're opening in September. So the date we're going to open is we will only have between 3 and 5 of the biggest FCMs connected when we open, right? So we're only opening -- it's what we would call a soft opening, which is we're opening, but our first year objective is to get all of the firms integrated and open. They all have our systems. So it's not a systems integration. They all have our system. I just need to get on the FCMs into their back office process and get them using it and that will take us. There are 50 FCMs. There are the top 10. We will have the top 10. We will have the top 20. We will have the top 30, but it may take us all year to have all 50. So let's say, 1 year from today, we'll have all 50. Then the second year, we'll have all clients. And my view is that the growth rate of this company -- remember we already have a system installed. So there are 2 things you need to be successful in futures. We need a rocking front-end system already installed in everyone in the world matters. Because I can't call Barclays up and say, I have a new system, will you install it? Because I will get in line, you might take 3 months, some of that might say a year and 3 months. And while I'm waiting, we're going to go broken down. Our system is already installed, and you just heard it say, it's got 30% market share in treasuries, and one of our products is going to be treasury futures. We do an interest -- U.S. dollar interest rate futures. So for futures, which are a swap and treasury derivatives and treasury futures, those 2 products. Those are, of course, really, the #1 and #2 products in the world. Why did you pick them, Howard? Let me give you a hint. The #1 and #2 products in the world. If you wanted to guess what our next one will be, let me give you a hint. It's probably the third biggest in the world. This is the genius I bring to this business. Really, I am just -- you can't even keep it in a jar. It's so brilliant. It picks 1, 2 and 3. And by the way, like people ask me, why did you do a real estate brokerage business? I say, well, the biggest business in the world that pays commissions is bonds, we do that. Second is equity, we do that. You know which is third largest fee-paying business in the world, is that like low interest rates. And it's the third largest in the world? Real estate. This guy's a genius. I tell you, he can count all the way to 3. And so that's the model we are going to come with interest rate futures, and we are going to do it because we have a rocking front-end system. And here is the second thing. You need to do cross margin. You can't have a system where you're long at to see me. And instead of -- and we have a really good price. And so you want to sell with us. And then you have to post new margin on the new exchange and you don't take off your own margin at the old exchange. That's a nonstarter for capital. So what we are going to do is we have a partnership with the LCH, which is the unique clearer of interest rate swaps, dollar-based interest rate swaps in the world. They have $225 billion of margin underlying $50-plus trillion of swaps, $225 billion of beautiful non-cross margined margin sitting there. And we are uniquely opening to cross-margin against it. So if you're long at the CME and you decide to take the trade-off and short with FMX, netting the 2, because it's the same exact contract, your cross margining will then net against your swap position, and you will actually save margin. You will save margins. And then you might say, well, then maybe you should pick your first trade on. That is why we are confident that we are going to succeed because we have the front-end system already connected anywhere in the world. And number two, we have cross margining with the LCH, which is unique, which is an asset of ours that breaks the moat of the CME. And this has unhinged the CME. They speak about really things that are illogical and impractical that is holding us back in a month, we're opening. And we are fully approved by the CFTC. Fully, fully approved, and we are opening this month. And the reason we're waiting a date is I told you, it's -- I just want to make sure that someone is not able to open on Thursday when we're opening on Wednesday. We'll just wait a day. So I'll announce today, it'll probably be towards the end of the month to give people the couple of days to figure it out, but it will be in the month of September, which we are in.

Great. And for anybody who's unfamiliar, I should disclose Barclays is an equity investor in FMX. That's all quite public, but I just want to make sure I've said it here.

So we have 10 investors, right? So we built our treasury system. Everyone knows we built our treasury system in the marketplace. So then we invited 10 of the largest trading firms in the world to be partners in FMX because I didn't want it to take 5 years. I wanted it to take 3. And so it is Barclays, JPMorgan, Bank of America, Citi, Wells Fargo, Morgan Stanley, Goldman Sachs, Citadel, Jump and Tower. If you don't know Jump and Tower, they're the largest futures traders in the world. And so those 10 invested $172 million for a 25% stake in the company. And they are partners with us in this pursuit. So it is exciting to have the system in place. The partners are the best trading firms in the world. And together, we're going to compete with -- remember, we are just below a $5 billion market cap company. With the business which I described that's growing 10% a year top line and 18% bottom line. And we have a futures exchange, which is going to compete with the Chicago Mercantile Exchange as top products, and the CME is worth $70 billion. And another one of your peers just wrote and underperformed on them because of us. And I think our ability to double the stock and double it again is out there. So that's why I come to hang out with you to talk about it.

All right. Well, let's -- maybe let's unpack some of these competitive differentiators. So maybe on the cross margin side. So you're offering cross margin at futures against swaps. Your competitor has many other products against which they can cross-margin futures, including swaps, although in a much smaller scale than LCH. So how do you think about the trade-offs between the sort of plethora of opportunities to cross margin your competitor versus what you're offering? And do you see over the next several years, an opportunity to offer cross margin -- or portfolio margining in additional products? What does that path look like?

All right. So the CME says they save $20 billion in margin efficiency. Primarily, that's their SOFR futures against treasury futures, right? It's futures against features, which is -- most of it is about $12 billion of the savings is futures against futures. $7 billion, right, is against swaps; $7 billion against swaps, but $5 billion of the $7 billion, I think most of it is against LatAm swaps because they don't have many dollar-based swaps. They have about $12 billion of dollar-based swap margin, and the LCH has $200-plus billion of dollar-based swap bonds. So it's not even close, right? And then they gave $1 billion against -- with the deal with 2 pots with the FICC. 2 pots mean the FICC holds collateral and I hold collateral and have to stare at you. I know the client has an offsetting position with you, but what if you don't give me the money in hell? Then I'll give you a little discount, but I'm not going to -- I can't take too much risk. If I have your long and you're short, we're cool, I'll just give you a basis margin of 3% and call it a day. So they say $20 billion. We had $225 billion of swap collateral with the LCH; 10% is $22 billion, 20% is $40 billion. It is so large. It is pulverizing to the CME to think about. So they can't think about it. The margin efficiency we will bring is so vast than what you're going to see. And I'll tell you right now, and I'll come back in a year, okay? FMX will have the largest open interest of any new exchange ever at the end of its first year. And by the end of the first year I told you we're going to sign up all the firms. You have to get them all on. But you imagine at the end of the day, Barclays has got its positions. It's trading. It's trading. At the end of the day, a computer, you guys have computers, too, it's amazing, they use their computer and they calculate that if the positions are at the LCH, they'll save $1 billion in margin. So they'll sell the CME positions, they'll buy FMX positions and they'll do their margin favorability. And that's called open interest. The next morning, Barclays has its positions at FMX, sleeping with LCH. It's going to take it off. And so will everybody else. So when will our best volume be? In the morning, and when else will our best volume be? In the afternoon. So you'll see in the morning and the afternoon, FMX will have strong volume. This is in the very beginning. And then it will start leaking towards the middle. First year, we'll get everyone signed up. Second year, we'll get all the clients to use it and the third year, every quarter we will have a heavyweight championship bout with the belt on the side of the ring. And eventually FMX, because of this cross margining advantage and Barclays need to move over at night to save $1 billion in capital, it is the reason why our open interest will be the largest ever. And eventually, we will have 50% market share of a $70 billion company when our market cap starts today, just below 5. I mean I just think we have so much runway. It will be really cool.

I want to ask you about maybe 2 other kind of competitive differentiators. But just since you mentioned it a couple of times, year 1, you get the FCMs on, year 2, the clients. How do we -- for us, how do we going to track your progress here? I'm sure we'll get press releases, but are we going to get -- and maybe this is [ adjacent too ], but are we going to get like daily volumes? Are we going to see open interest? What's the barometer in 6 months, 6 months from now, next September when maybe you come back and talk again, how do we know he's on track, they're doing better than expected? I should be more worried, less worried? What are like the key things to look for over, say, the first year?

Everyone is going to look, okay, the day you open, what happened that Tuesday, right? And the answer is we're going to trade some, but it's not -- we're in the marathon, okay? And it's a 3-year marathon for the heavyweight championship belt. Okay? We're going into training right now. And we matter and we're available. So you'll see our volumes and you'll see our open interest. And at the end of the first quarter, we'll probably have somewhere between 5 and 7 of the biggest FCMs in the world on our system; the next quarter, 10 to 15; the next quarter, 25, like that, all the way and at the end of the first year, all 50. So by definition at the end of the first quarter, if we have 7 of the top 50, we are less than perfect. But we're in the process of growing and building. So what you'll see is nice volume and surprisingly nice open interest. Surprisingly growing open interest every single quarter because the math for Barclays is compelling to Barclays. And the math is compelling to JPMorgan. And in fact, the math is compelling to everyone because it's compelling math. Why keep a position there that does not offset your margin there if I move to my position to FMX, which, by the way, selling 1 futures product to buy another futures product is nothing. Everybody has computers now, they do it really fast. It's like a thing. I think everybody understands that now, these whole computer things, they're amazing. You don't even need to plug them in now. They like to carry a phone around. So I mean this is so simple. The volume is going to move, and the open interest is going to sit there, and that's what you're going to judge us with. Judge us against the comparative open interest with any new product ever, and it will shock you how well we do, shock you.

Okay. So maybe 1 other question in terms of the performance of the exchange. So you've talked about a different pricing model, narrower tick sizes. So I think a reason that might be suggested for why a trader might put volume on CME is they have more confidence in liquidity, maybe volatility is low when they put the trade on, but they're worried that what is in the future, I want to sell that position, volatility is high. What if there's not enough on FMX, I can't get out. What would your response to that be?

The reason I have 10 partners is to make that go away. I mean the business of Citadel, Jump and Tower is they are market makers. If there's volume on the CME, at the exact same contract, there will be volume on FMX. If there's a 10-bit there, putting a 10-bit here for those 3 firms is literally their business. So you will find a mirrored market on each one. And that's why I said, we will -- our markets will light up like a Christmas tree. It's not because I'm such a clever guy, it's because that's the business of the market makers to do exactly that, right? They buy at 10, sell at 10; buy at 10, sell at 10, buy at 10, it ticked up to 11. Wait a second, sell it at 11, do it again, do it again, do it again, do it again, do it infinite amounts of times. They'll make the prices the same. So this concept of you won't have the liquidity on your new exchange is a statement from another decade, maybe 2 decades. Okay? But it's just wrong, intellectually wrong. There's a reason why when we turn on, we will have lovely markets, and it's because computers are driving Citadel, Jump and Tower, not the leach of which, there's HRT, there's 20 other firms that are great at this. Virtu, we all know, they do it as well, right? I'm just naming the 3 partners, but the others do it for money, and they're all going to do it. So we will have liquidity. We have a faster system. It's technically newer, more modern and faster. We will have a lesser tick size. So they will have a quarter spread, we'll have an 8 spread. If they -- so we will just be smaller. So our treasury business, 50% of all the trades and treasuries on our system are at a price superior the price on CME. Because if you think about it, if they are 10th to the quarter and we're an eighth to the quarter, right, and half the trades traded in 8th, right? The computer clears ours first and goes to theirs. Okay? That's going to happen naturally. So I think our volumes will be okay. We're not looking to make a grand entrance. We are going, but the place to rate us will be an open interest, where the volume sleeps at night. Because that means every morning, they've got proprietary volume that's there to begin with. And I think that, that will differentiate us from every new futures contract ever. And the last futures contract that had record open interest ever was the Bund futures contract, which the CME hates to discuss because the [ Life ] had 100%, and then the Deutsche Borse got 100% because they had better cross margining to the cash business. We have a better model, mathematically. It is superior. It will carry the day. I'm saying it before I'm open, but you will see it. Just look at the end of every quarter, and where our open interest is growing relentlessly. Every quarter, you'll know the math is coming our way.

Very comprehensive. I have plenty of other questions here, but given the interest in FMX, maybe we pause if there are any audience questions? Okay. Shy group. Maybe one last question then on the topic. Just in terms of other products, options and futures, the potential for cross margining agreement with the FICC like CME has. What are your thoughts there? Are those priorities? Or is it more about SOFR treasuries, building liquidity in those products, getting everybody on board?

So of the $20 billion in savings the CME offers, $1 billion is cross-margining with the FICC, okay? They do not have a proprietary relationship with the FICC. We will have a similar relationship with the FICC. When that is, maybe it will take a year, maybe it will take 2 years. But it will happen. Have we approached them already? Of course. Have we spoken to their senior management? Of course. Who are the primary owners of the FICC? My bank partners. You -- so I think that's a natural -- but it's not a rush. Will we do it? Of course. Will it happen within 2 years? Sure. Will it happen in a year? Maybe. Does it matter? Eventually, a little bit. $225 billion matters the most, okay? $1 billion is nice. It's nice. So FICC, will we do options? Of course, right? Will we extend to other products? Of course. Why are you picking interest rate futures as your first 2 SOFR futures to start? That's a swap derivative against interest rate swap cash. Why? Because there's 80% -- between 75% and 80% efficiency when you're long one and short the other. It's so huge from a margin efficiency standpoint that that's what the banks want to do. They want to save that margin, okay, then treasuries against swaps, huge, huge, plus 50%. Again, these are great mathematical models. Then what would you do? I said I do the third largest exchange product in the world. What's that? It's foreign exchange. You have -- and then you would say, well, don't you have a cash foreign exchange business? Yes. How is that growing? I don't know, 30% last quarter, 50% last quarter, which one? 35% last quarter. But foreign exchange. When you'll do foreign exchange futures? When is that? Later, later. How about you dominate 1 and 2 and win the heavyweight championship of the world in 1 and 2 and then open 3? It just seems smart. So we have the partners. We have the system. We are going to relentlessly compete with the CME, which is worth $70 billion. And then we will extend to other markets around the world. We have the greatest partners in the world. And the greatest clearing model in the world. You just keep going. So I think just long, long lead. Yes. Yes. It's on.

Great. Thank you for your comments. I just wanted to ask you how you thought the CME might respond. If I'm not mistaken, when this was tried by Deutsche Borse like a long time ago, I think they might have cut price at the time. But even if they didn't, I know that it has been speculated, I think, in the other sell-sider that published a note about this that, maybe they try to at least do something on the pricing side to try to forestall your progress? What sort of response do you think they're going to have? And then what would be your response to that, if you can anticipate anything?

So as a monopoly, they've been able to put up their price every year at Christmas. They used to call. 10 years ago, they would call you guys and tell you they were putting up the price and then send you the letter. And then over the last 10 years, they just send the letter, putting Congratulations, it's Christmas, your price is going up 10%. So this year, for the first time, they did not put up their price on race because rates they felt that competition was coming. So they started by not putting up their price. Do I think they're going to cut their price? They would likely -- my guess is what they will do is they're going to call my bank partners and offer them a special deal, which basically is, "I will pay you to do business with me so that you don't do business with them." so that we've seen stillborn and that we won't get the energy in the beginning. Now that paymental bribe will just be inefficient and unacceptable to someone like yourselves who has got a long view of things. One quarters worth of payments is not going to make a darn bit of difference to Barclays. So I think it's going to fall on deaf ears. But that's my guess. That's what they're out doing. I mean, they're out talking to banks saying, "I pay you to do business with me, meaning don't charge or pay you." will you do it? And the answer would be, "Sure if you pay it me for a decade." That they'd say, "No, no, no. I want to pay you for like a month or two." So I think cutting their price a little if I couldn't matter since all my big banks have subscription, and we are available, by the way, to do subscription with clients. So clients want to do volume-based business with us and they want to sign a subscription model, pay a fixed fee and do unlimited volume? That truly works for us because we're trying to build market share. So to us -- and let's be clear, we're not going to charge any money in the first year. Right? Our objective is to have a low price model to build market share, which makes sense because BGC has got this tailwind anyway, right? So we were plus 10% revenues, plus 18% profits, counting the fact that we have a fully approved futures exchange that wasn't open yet, all expenses in the numbers not open. And we're still growing 18%. When our futures exchange starts to charge, our growth rate is going to be awesome, but that's not this year. Wait a year and grow. Remember, Meta didn't go out and try to monetize their eyeballs for a while. Grow the eyeballs, grow your business, then grow your revenues, but you all know it's coming. You all know, it's coming.

Well, with that, we are just about out of time. Howard, thank you so much for coming. It has been a pleasure to have you.

Thanks for being here. I appreciate everybody.