Welcome to the BGC Partners, Inc second quarter 2022 earnings conference call. At this time, all participants are in listen only mode. After the speaker presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to the speaker today, Jason Chryssicas, Head of Investor Relations. Thank you, and please go ahead.
Good morning, everyone. We issued BGC's second quarter 2022 financial results press release and presentation summarizing these results 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 second quarter of 2022 with the prior year period and compare revenue excluding insurance due to its sale on November 1st, 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 securities loaned and repurchase agreements.
We define total capital as redeemable partnership interest, total stockholders' equity, and non-controlling interest in subsidiaries. This quarter, BGC is providing revenue year-over-year comparisons on a constant currency basis. BGC generates a significant amount of its revenue in non-U.S. dollar-denominated currencies, particularly in the euro and pound sterling. In order to present a better comparison of the company's revenues during the period, which exhibited volatile foreign exchange movements. BGC's constant currency movements assume foreign exchange rates used to determine the company's prior period revenues apply to the current period revenues. Please also 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 business as Fenics. Fenics offerings include Fenics Markets and Fenics Growth Platforms. I also remind you that 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 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 a 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 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 second quarter 2022 conference call. With me today are BGC's Chief Operating Officer, Sean Windeatt, and our new Chief Financial Officer, Jason Hauf. I would like to start by welcoming Jason to BGC and welcoming him to his first BGC conference call as our new CFO. I am pleased to announce that the joint committee of our independent directors of the board, which was constituted to consider the conversion to a corporate structure, has agreed to pursue and move forward with the corporate conversion subject to documentation. This conversion is intended to be effective January 1st, 2023, subject to the regulatory process. We believe this change will improve operational efficiencies and benefit our shareholders and stakeholders by implementing a more simple, transparent corporate structure.
BGC's adjusted earnings margin continued to improve, representing the seventh consecutive quarter of year-over-year margin expansion. Our sustained margin improvement reflects higher levels of automation and digitization across our overall business. Fenics registered another quarter of double-digit revenue growth, outpacing the industry and our overall business. Fenics now represents over 25% of our overall revenues, its highest mark ever. We continue to make progress developing our comprehensive cryptocurrency offering, which includes the expansion of Lucera's infrastructure across the cryptocurrency ecosystem, as well as the recently announced plans for our cryptocurrency exchange, which we anticipate will be launched late in the fourth quarter or early in the first. Additionally, BGC arranged the first intermediated block trade of CME Bitcoin options in Asia in July. With that, I'll turn the call over to Jason.
Thank you, Howard, and hello, everyone. It is a pleasure to speak here today and join BGC at such an interesting time in the company's journey of digitizing the wholesale capital markets. BGC generated total revenue of $435.8 million, a decline of 4.9% as compared to last year. On a constant currency basis, we were virtually flat, excluding insurance. Total revenue would have been $19.9 million higher and in line with the year-ago period, but for the strengthening of the U.S. dollar. By asset class, FX and rates increased by 2.1% and 0.5% respectively. Equities, energy and commodities and credit decreased by 4.2%, 10.8%, and 15.6% respectively.
On a constant currency basis, rates, FX, and equities increased by 7.3%, 3.4%, and 1.4% respectively. By geography and excluding insurance, Americas revenue increased by 4.5%, while Europe, Middle East and Africa, and Asia Pacific revenues both decreased by 8.9% and 9.8% respectively compared to last year. The company continues to make progress in automating its overall business. Fenics, BGC's higher margin, technology-driven business, now represents for the first time over 25% of BGC's total revenue and grew at a strong pace of 13% or 18.1% on a constant currency basis. The company remains focused on converting its large Voice Hybrid revenue base to Fenics revenue, driving margins higher. Adjusted earnings margins and average front-office productivity both improved year-over-year for the seventh consecutive quarter.
Fenics generated record second quarter revenue of $109.6 million, an improvement of 13% or 18.1% on a constant currency basis. Fenics Growth Platforms recorded revenue of $12.4 million, an improvement of 16.9% or 18.6% on a constant currency basis. Fenics Markets generated revenue of $97.2 million, an increase of 12.5% or 18% on a constant currency basis, and had a pre-tax adjusted earnings margin of 32.2%, an improvement of 243 basis points. Moving on to expenses.
Our compensation and employee benefits under both GAAP and adjusted earnings decreased in the second quarter of 2022 due to increased automation, the sale of the insurance brokerage business, lower commissionable revenues, and the FX impact on the company's U.K. and European operations. Our adjusted earnings compensation as a percentage of total revenue was 48.4%, which was over 400 basis points lower versus a year ago. Our non-compensation expenses under GAAP and adjusted earnings decreased by 10.1% and 10.4% respectively, driven by lower occupancy and equipment expense due to the sale of our insurance brokerage business, as well as lower professional and consulting fees, interest and communication expenses.
These expense reductions were partially offset by higher selling and promotion charges as COVID-19 restrictions have relaxed across many of the major geographies in which we operate. Moving on to our adjusted earnings. Our pre-tax income was $90.2 million, with a 168-point margin expansion up to 20.7%. We recorded post-tax adjusted earnings of $84.7 million, and it generated a second quarter adjusted EBITDA of $113.9 million. Turning to share count. Our weighted average share count increased 0.8% sequentially to 507 million, down 10.1% year-over-year. Our fully diluted spot share count as of June thirtieth decreased 0.4% sequentially to 500.7 million.
Compared to a year ago, BGC's fully diluted shares outstanding has decreased by 38.6 million shares or by 7.2%. During the second quarter, we repurchased and redeemed 9.7 million Class A common shares and units. The majority of this activity occurred in the latter part of the period, and thus is not fully reflected in the fully diluted weighted average share count under both GAAP and adjusted earnings. Share and unit issuance has typically been the greatest in the second quarter due to the timing of year-end bonus awards. As of June 30th, our liquidity was $535 million, compared with $594.8 million as of year-end 2021. The change in our liquidity reflects payments for year-end bonuses, tax payments, acquisitions, new hires, and share and unit repurchases and redemptions.
Cash and cash equivalents were $496.5 million versus $553.6 million as of December 31, 2021. Notes payable and other borrowings were $1,051 million, compared with $1,052.8 million at year-end. Total capital was $747.1 million, compared with $682.1 million as of year-end 2021. In addition, we currently expect to provide more information on estimated tax rate, synergies, and other efficiencies related to our intended corporate conversion on our next earnings call. With that, I am happy to turn the call over to Sean.
Thanks, Jason, and good day, everyone. Fenics, our technology-driven, higher margin business, continued to grow strongly. Our Fenics strategy remains focused on converting the company's $1.4 billion Voice Hybrid revenue base into higher margin technology-driven Fenics Markets revenues, while concurrently scaling its state-of-the-art, fully electronic Fenics Growth Platforms, including FMX and electronic cryptocurrency offerings. Looking at Fenics in more detail. Our Fenics Growth Platforms revenue improved 16.9% or 18.6% on a constant currency basis from a year ago, driven by growth across Fenics UST, Lucera, Fenics FX, Fenics GO, and PortfolioMatch. Fenics UST revenues increased over 30%, driven by ADV growth of 22%, new product offerings, and more traders using the platform. Fenics U.S. Treasury club market share increased 162 basis points year-over-year to 19% in the second quarter.
Fenics UST's newer T-bill offerings gained traction during the quarter, with ADV exceeding $1 billion for the month of June and reaching $3 billion on certain days. Lucera, our infrastructure and software business, once again generated strong double-digit revenue growth, with its revenue improving 25% year-over-year. This growth was driven by new clients, the expansion of existing relationships, and adding new cryptocurrency clients. Lucera is providing connectivity to 30 of the world's deepest crypto liquidity pools via its world-class infrastructure with a growing pipeline. Fenics FX, our ultra-low latency electronic FX trading platform, had another record quarter, generating strong volume growth of 47%, outpacing other FX platforms and the overall market. Fenics FX has developed leading transaction cost, liquidity, and market impact tools, providing clients with critical information unique to the platform.
These trading tools, along with its leading Lucera-supported technology, has accelerated Fenics FX's market share gains and led to consistent strong double-digit volume growth throughout the course of the year. Fenics GO, our global options electronic trading platform, grew its market share, primarily driven by strong growth across its Asian index business. For the first six months of 2022, Fenics GO's revenue and volumes have already well exceeded its full year 2021 performance. PortfolioMatch, our session-based credit matching platform, continued to gain traction during the quarter, with revenue more than doubling from a year ago. PortfolioMatch currently supports U.S. and European investment-grade credit and European high yield. The platform continues to scale its client base as it rolls out new technology to fully automate the entire credit trading process. Looking at Fenics Markets.
Revenues improved by 12.5% or 18% on a constant currency basis, driven by strong growth across FX credit and market data. Fenics Market Data signed 60 new contracts during the second quarter, with total contracted value increasing 27% versus a year ago. Fenics Market Data continues to see strong demand for its regulatory, interest rate, inflation, and FX data packages, with additional products to be added throughout the year. Fenics Market Data, which has a highly recurring and compounding subscription revenue model, grew over 17% year-over-year. Fenics Direct, our web-delivered multi-dealer FX options platform grew ADV by 95% in the second quarter versus the prior year period. Fenics Direct grew its volume by over four-fold since the second quarter of 2020, driven by onboarding new clients as well as evolving client demand to trade FX options electronically.
Fenics MID FX, the leading wholesale FX hedging platform, continued to see strong client demand for the platform during the second quarter. Its Asian NDF offering saw a 54% increase in ADV. Clients seek the same highly efficient risk management qualities the platform offers for spot FX. Our Voice Hybrid business generated revenues of $326.2 million, down 9.7% or 5.5% on a constant currency basis excluding insurance due to the continued conversion of Voice Hybrid to Fenics Markets revenue. The recent change in central bank monetary policies away from zero interest rates following the highest inflation in decades has set the stage beginning in 2023 for a resurgence of secondary market trading volumes in rates, credit, and foreign exchange, where we are market leaders.
We expect the current rising interest rate environment to create over the next two or three quarters an uneven market for the industry, with some product categories increasing dramatically while others face short-term challenges as their key market participants deal with the difficulty of trading through rising interest rates. During the quarter, we experienced this performance across a number of asset classes. For example, we generated strong growth in short-term interest rate products, government bonds, interest rate options, U.S. investment-grade credit, spot FX, and LATAM FX. While the current rising interest rate environment created near-term challenges for businesses, including longer-dated interest rate swaps, European credit, G10 FX forwards, Central European FX options, and even inflation products, all of which we expect to rebound strongly next year. Now turning to our third quarter 2022 outlook.
BGC's revenues were approximately 1.8% lower for the first 20 trading days of the third quarter when compared to the same period last year, excluding insurance. We expect to generate total revenue of between $395 million and $445 million, or $412 million-$462 million on a constant currency basis as compared to $422.1 million last year, which excludes $51.6 million of insurance revenue. This guidance reflects the continuing FX headwinds for the euro and pound sterling. Quarter to date, the euro and pound sterling are both tracking over 13% lower versus the U.S. dollar compared to the year-ago period. We anticipate pre-tax adjusted earnings to be in the range of $73 million-$93 million versus $79.1 million.
We anticipate our full year 2022 adjusted earnings tax rate to be in the range of 8%-10% versus 6.4% for the full year 2021. With that, I'd like to turn back to Howard for closing remarks.
Thank you, Sean. We are in deep discussions with our bank and trading partners for our FMX business. We look forward to announcing their investment before we open in the fourth quarter of 2022. We are proud that Fenics now represents over 25% of our overall revenue, enabling us to expand our margins and productivity for seven consecutive quarters, a trend we expect to continue. With that, operator, we're happy to open the call for questions.
Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. Our first question today comes from the line of Gautam Sawant from Credit Suisse. Please go ahead. Your line is now open.
Good morning. Thank you for taking my question, and congratulations on the C Corp conversion announcement. I wanted to know if you could potentially expand on the FMX platform launch with the two new additions to the board there, and how you think about which partners are going to come on board to help build treasury volumes and interest rate derivative volumes? Thank you.
Sure. We added two extremely experienced professionals to the board as we prepare the process of opening our futures initiative at the end of this year. We are talking to a number of banks and there are more than five banks and a few high-frequency trading firms, and our objective would be in the range of more than five and less than 10 partners as we go into this opening. Our expectation is we will have more than five and a maximum of 10 partners. But we are talking to basically those who trade the most and those who are most committed to our platform. You know, this is very exciting since the fourth quarter is not that far away.
Since we're already in the third quarter, we're heading to its conclusion. We're working on the details with the CFTC. We're working through the details with LCH. This is connecting and making sure we're connecting all of the trading firms. You know, the fact is our treasury system is connected to virtually everybody. It's not everybody. You know, we're on the path. We're very excited about the prospects and really dotting I's and crossing T's towards its opening.
Got it. Thank you. Can you just provide an update on your economic outlook and how you see, I guess, inflation trending and potentially what kind of volumes or trading the Treasury market should, I guess, be pursuing over the next six to 12 months with quantitative tightening starting? Is that going to be happening more on coupon bonds or Treasury bills?
Zero interest rates created an odd market environment. With that, finally being in our rearview mirror, we expect the volumes across the rates, and credit and foreign exchange, product categories to start to grow materially and consistently going forward. The process to get from here to there, over the next two or three quarters, as we said in our prepared remarks, might be uneven for certain product categories. For example, the fact that, inflation-related bond volumes were lower this quarter, you would say, "Oh, come on. I mean, how could inflation be lower?" The fact is, it's idiosyncratic to the violent swings that have happened in inflationary expectations, and some market participants have not done as well as others, and therefore that creates sort of unusual short-term volume swings.
Our expectation, of course, is that inflation-based products will have a dramatic and exciting growth prospects, going forward, as I think what everybody would agree. I think we think coupons will be dramatically continuing to grow. We like, benchmarks, which will continue to grow and issuance will continue to grow. We like trading on those products. Treasury bills going from five basis points to 285 basis points. I mean, now you have a reason to trade treasury bills. When they were five basis points, really, what was the volume reason to trade treasury bills? There was no reason. Just as a simple example for you, in 2007, the volume of corporate bonds traded was 2.5x larger in 2007 than it was in 2021.
That is a factor of low interest rates just reducing volumes, because just the reason to trade is lower. As those reasons dissipate because rates come back into our world, I think you're going to see an improved outlook for our business in general, rates in particular, credit in particular, and foreign exchange in particular. You're going to see those businesses improve starting in 2023 in a more smooth way and thereafter.
Got it. Thank you.
Thank you. As a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad. The next question today comes from the line of Rich Repetto from Piper Sandler. Please go ahead, your line is now open.
Howard and team, I apologize, I got on late, but I guess the first question I have is on the corporate conversion. Again, I apologize if you covered this, but are there offsets? I know you expect synergies, but could you go through the balance of the synergies versus what could be a more normalized tax rate?
Yeah. We will do that in with more precision on the next quarter call with, you know, with more detail. Effectively, we have corporations from the acquisitions we've made that reside within partnerships, which create really inefficient capital structures and significant amounts of work, audit work, and other sort of accounting and finance inefficiencies across the platform. Our expectation is the simplification will create synergies and capital efficiencies that we should be able to take advantage of, and that will mitigate somewhat. I don't think it will mitigate entirely, but it will mitigate somewhat the increase in our tax rate. We think there will be offsetting synergies from simplification and from capital efficiency substantially offsetting the tax rate, but not completely.
Understood. That's helpful, Howard. I guess the other question is, you go through, the profitability of Fenics Markets, and I believe it's in the 30% pre-tax margin, a bit higher. I'm just trying to see, I know the growth platforms, you know, you're still making investments there. Could you talk about you know, I guess, the trajectory of the margins there? I know you had to invest more, you know, with crypto, into the growth platform, but any idea when the growth platforms will be breakeven? Are they breakeven, or when they'll be breakeven?
Well, as an example, we have both our futures initiative, which is not yet open, so we are spending money obviously on our futures initiative that's not yet open, and our crypto exchange initiative, which is not yet open. Those two would create, you know, just simply we're spending money on our growth platform category. Our expectation is that profit margins and growth will be in excess of 50%. Our expectation is these are fully electronic markets, the technology and sales is the primary and clearing of the costs. We would expect, as you would have seen in other comparative fully electronic platforms, we would expect profit margins in excess of 50% for that product category.
Get it. Okay. One last one. On FMX or the futures exchange, you know, could you talk about more of it. You know, you're adding people or there is a, you know, a board being put together, but still the ownership. I know you'd wanna announce that, in one, I guess maybe one announcement when it all comes together. But any more insight will you have, just sort of a makeup of the investors that could be in FMX since you are out there now with announcing board members?
We are in deep discussions with the most important trading banks in the rates complex. We are also in conversation with a number of the highest volume, high frequency trading firms. Those conversations are deep and ongoing, and our expectation is they will be completed and announced prior to our opening of the business. It does not, in terms of the highest volume trading banks, exclude any of them from top to bottom, from those that are the most active in that space. They are, as a group, engaged and interested. While I cannot promise what the outcome will be, it sure feels good, and that's why we're talking about it in this way.
Understood. Thank you very much, Howard.
Thank you. That concludes today's question and answer session. I would now like to pass the conference back over to Mr. Lutnick for closing remarks.
Well, we appreciate you joining us. We look forward to updating you further on our corporate conversion next quarter with more details. We look forward to the announcement of our partners in FMX between now and the end of the year. We look forward to an ever-improving underlying set of economic conditions for this company as rates have come back in. Imagine 15 years of zero interest rates finally being behind us, and now we will have an ordinary set of markets starting in 2023 in which to perform our services. If you want to look back at who we were before interest rates went to zero in the whole Lehman Brothers world, you will see a much larger company, because volumes were just much bigger back then.
It will raise all boats, but BGC has great businesses and rates, credit and foreign exchange, and we expect to be a wonderful beneficiary of those sets of changes. We look forward to speaking to you next quarter and updating you along the way. Thank you, everybody.
This concludes today's conference call. Thank you all for your participation. You may now disconnect.