Welcome to the BGC Group, Inc Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a 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 your speaker for today, Jason Chryssicas, Head of Investor Relations. Thank you, and please go ahead.
Good morning, everyone. Today, we issued BGC's Third Quarter 2022 Financial Results press release and the presentation summarizing these results prior to the market open. 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 third quarter of 2022 with the prior year period and compare revenue excluding insurance due to its sale on November 1, 2021. We'll 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 loans and repurchase agreements.
We define total capital as redeemable partnership interest, total stockholders' equity, and non-controlling interest in subsidiaries. BGC generates a significant amount of its revenue in non-U.S. dollar-denominated currencies, particularly in the Euro and pound sterling. BGC presents revenue comparisons on a constant currency basis 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 applied to the current period revenues. Please see today's press release for results under generally accepted accounting principles or GAAP. Please also see the relevant sections at the back of today's press release for 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 information regarding our business on today's call that are not historical are forward-looking statements. These include statements about the effects of COVID-19 pandemic on the company's business results, financial position, liquidity, and outlook, and any forward-looking statements involve risks and uncertainties. Except as required by law, BGC undertakes no obligation to update any forward-looking statements. Any outlook and targets discussed in 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 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 Group.
Thank you, Jason. Good morning, and thank you for joining us for our Third Quarter 2022 Conference Call. With me today are BGC's Chief Operating Officer, Sean Windeatt, and our Chief Financial Officer, Jason Hauf. Our pre-tax adjusted earnings margin expanded by over 300 basis points. This represents the 8th consecutive quarter of adjusted earnings margin improvement, driven by our high-margin electronic Fenics business, which now represents over a quarter of our total revenue. For more than 14 years, BGC and the entire financial service industry's trading volumes have been constrained by ultra-low interest rates and quantitative easing. For example, in the U.S. credit markets, issuance is up over 2.5x , and trading volumes are half of what they were in 2008. Over the same period, U.S. Treasury issuance is up 5 x, and trading volumes are flat to 2008.
You can see this on page five of our Investor Presentation, which you can get to at ir.bgcpartners.com. Throughout this period, we've worked to automate our business and improve our margins. We expect the return of interest rates to restore trading volumes to their historical correlation with issuance over time. This dramatic increase in trading volumes will drive our revenue growth for the foreseeable future. Coupled with our improved margins, we expect BGC to produce record levels of profitability. With that, I'd like to turn the call over to Jason.
Thank you, Howard, and hello, everyone. BGC generated total revenue of $416.6 million, a decline of 1.3% as compared to last year. On a constant currency basis, our revenue was up 4.1% versus a year ago. During the quarter, the U.S. dollar continued to appreciate against the euro and pound sterling, both of which were approximately 15% lower. Total revenue would have been $23 million higher on a constant currency basis. By asset class, rates increased by 1.1% and 10.2% on a constant currency basis. FX increased by 0.7% and 2.4% in constant currency. Credit decreased by 1.3%, but increased by 6.4% in constant currency.
Energy and commodities decreased by 7.2% and 5.5% in constant currency. Equities decreased by 11.6%, but only 5.1% in constant currency. By geography, and excluding insurance, Americas revenue increased by 9.3%. While Europe, Middle East and Africa and Asia Pacific revenues decreased by 5.4% and 8.5% primarily related to FX headwinds. Fenics, BGC's higher margin technology-driven business represented 25.4% of total revenue, its highest mark ever, and grew at a market-leading rate of 10.8% to $105.6 million or 17.7% growth on a constant currency basis. Automation has been key to driving the company's margins higher.
Adjusted earnings margins and average front office productivity both improved year over year for the eighth consecutive quarter. Fenics Growth Platforms recorded revenue of $12.7 million, an improvement of 19.4% or 21.5% on a constant currency basis. Our Fenics Markets business generated revenue of $92.9 million, an increase of 9.7% or 17.2% on a constant currency basis, and had a pre-tax adjusted earnings margin of 30.8%, an expansion of 107 basis points. Moving on to expenses. Our compensation and employee benefits under both GAAP and adjusted earnings decreased by 21.4% and 20.6% respectively, due to increased automation, the sale of our insurance brokerage business, and the positive FX impact on the company's U.K. and European expenses.
Our adjusted earnings compensation as a percentage of total revenue was 48%, which was over 500 basis points lower versus a year ago. Our non-compensation expenses under GAAP and adjusted earnings decreased by 11.3% and 8.8% respectively, driven by lower occupancy and equipment expense due to the sale of our insurance brokerage business, as well as lower commissions and floor brokerage, communication, interest and other 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 $82.8 million, with 318 basis point margin expansion to 19.9%.
We recorded post-tax adjusted earnings of $77.5 million and generated third quarter adjusted EBITDA of $107 million. Turning to share count. Our weighted average share count decreased 2% sequentially and 6.3% year over year to 497 million shares. Our fully diluted spot share count as of September thirtieth decreased by 6 million shares or 1.2% sequentially to 494.7 million shares, reflecting 12.6 million share unit repurchase in the quarter. Compared to a year ago, BGC's fully diluted spot share count has decreased by 22.5 million shares or 4.3%. As of September thirtieth, our liquidity was $510.8 million, compared with $594.8 million as of year-end 2021.
The change in our liquidity reflects payments for share and unit repurchases and redemptions, dividends and distributions and new hires. Cash and cash equivalents were $473.3 million as of September 30 versus $553.6 million as of December 31, 2021. Notes payable and other borrowings were $1.0501 billion, compared with $1.0528 billion at year-end. Total capital was $727.3 million, compared with $682.1 million as of year-end 2021. The joint committee of our independent directors of the board has agreed to pursue and move forward with a conversion to a full C corporation. The conversion would occur pursuant to definitive agreements, which the company expects to execute prior to the end of this year.
The conversion to a simpler, more transparent corporate structure aims to improve operational efficiencies and provide investors with an easier-to-understand organizational structure. Following execution of the agreement and prior to the closing of the corporate conversion, details related to the conversion will be publicly filed with the SEC and distributed to BGC stockholders. We continue to work through identifying operational synergies, which we expect to significantly offset the increase in our corporate tax rate. We expect to provide this detail update prior to the end of the year. With that, I'm happy to turn the call over to Sean.
Thanks, Jason, and good day, everyone. Fenics, our technology-driven higher margin business, generated record third quarter revenue of $105.6 million, growing at a market-leading pace of 10.8% or 17.7% on a constant currency basis. Fenics represented 25.4% of our overall revenue and is expected to become an ever larger part of BGC's overall business going forward. Looking at Fenics in more detail. Our Fenics Growth Platforms revenue improved 19.4% or 21.5% on a constant currency basis, driven by growth across Fenics U.S. Treasuries, Lucera, Fenics FX, Fenics GO, and PortfolioMatch, partially offset by compression in Algomi. Fenics U.S. Treasuries revenues increased over 24%, driven by ADV growth of 14%. CLOB market share was 18% during the quarter.
Fenics UST saw significant growth in its streaming offering, which reached record levels in the third quarter. Streaming earned significantly higher fee capture. Fenics UST's T-bill offering continued to scale with ADV growth of 266% compared to a year ago. Fenics UST recently launched its automated off-the-run spread facility. This technology enhances trading volumes, Fenics Market Data, and will create trading synergies across FMX interest rate futures. Lucera, our infrastructure and software business, had a record quarter, generating strong double-digit revenue growth of 30% versus last year. Lucera saw an increase in clients trading both cryptocurrencies and fixed-income products through its LumeMarkets platform. Additionally, in the third quarter, Lucera launched a cryptocurrency hosting offering for exchanges and traders. Fenics FX, our ultra-low latency electronic FX trading platform, generated volume growth of 44%.
Fenics FX continues to win market share, onboard leading market participants, and has grown at market-leading levels throughout 2022. Fenics GO, our global options electronic trading platform, saw strong volume growth across its Asian business, where HSCEI, KOSPI, and MSCI index option volumes were up 4.7 x versus a year ago. Additionally, Fenics GO saw volume growth of over 120% across its EURO STOXX 50 index options offering. PortfolioMatch, our credit matching platform, continued to scale during the quarter. Nearly 70% of total PortfolioMatch volumes were executed via algorithmic trading during the quarter. PortfolioMatch supports U.S. and European investment-grade and high-yield credit. The platform onboarded numerous new clients, and this momentum has carried forward into the fourth quarter, setting new records across volumes and trading participants. Looking at Fenics Markets.
Revenues improved by 9.7% or 17.2% on a constant currency basis, driven by FX, credit, and market data. Fenics Market Data signed 48 new contracts during the third quarter and grew revenue over 18% year-over-year. FMD continues to see strong demand for its interest rates, inflation, and FX data packages. Fenics Direct, our web-delivered multi-dealer FX options platform, more than doubled its ADV in the quarter. Fenics MID-FX, the leading wholesale FX hedging platform, had its second-highest quarter on record, surpassed only by the seasonally busier first quarter of 2022. Fenics MID-FX Asian NDF ADV improved by 63% and is fast becoming the preferred platform for Asian NDF hedging as clients seek the same highly efficient, risk-neutral qualities the platform offers for spot FX.
FMX, which combines Fenics U.S. Treasuries business with our state-of-the-art U.S. interest rate futures platform, continues to make significant progress. With required regulatory approvals now expected in the first quarter of 2023, FMX is targeting its launch in the second quarter. We will announce the names of the strategic investors prior to the launch. FMX will offer an alternative U.S. rates futures platform for U.S. Treasury, Eurodollar, and SOFR futures products. Our voice hybrid business generated revenues of $311 million, down 4.9% or up 0.1% on a constant currency basis. The overall macro trading environment improved during the quarter. This improvement continued to be uneven across products and geographies. For instance, we saw significant revenue growth in areas such as European government bonds, interest rate options, credit derivatives, corporate bonds, and G10 spot foreign exchange.
These gains were offset by challenging market conditions in areas such as oil, U.K. and European power, and European and Asian equity derivatives. Additionally, the company saw strong performance during the quarter from Poten's charter shipping and consultancy business. BGC is the market leader in global LNG shipping and charter, which has seen significant demand and pricing driven by geopolitical conflicts and energy disruptions across Europe. Going into 2023, we expect broad-based growth across the majority of our products and asset classes. The current macro environment of rapidly rising interest rates and divergent central banks and monetary policy has led to very high levels of volatility. This has caused some market participants to transact less.
As this extreme volatility dissipates, we expect higher levels of trading activity beginning in 2023 and growing from there. Now turning to our fourth quarter 2022 outlook. BGC's revenues were approximately 7% lower or flat on a constant currency basis for the first 21 trading days of the fourth quarter when compared to the same period last year, excluding insurance. Therefore, we expect to generate total revenue of between $390 million and $440 million as compared to $441.7 million last year, which excludes $19.9 million of insurance revenue. Revenue guidance would be approximately $20 million higher on a constant currency basis. We anticipate pre-tax adjusted earnings to be in the range of $71 million to $91 million versus $86.5 million.
We anticipate our full year 2022 adjusted earnings tax rate to be in the range of 7%-9% versus 6.4% for the full year 2021. With that, operator, we'd like to open the call to questions.
Thank you. As a reminder, if you'd like to ask a question, you can press star one on your telephone keypad. If you'd like to withdraw your question, you may press star two. Please ensure you're unmuted locally when asking your question. Our first question for today comes from Gautam Sawant from Credit Suisse. The line is now open. Please go ahead.
Hey, good morning, and thank you for taking my questions. Can you please share your perspective on what gets you comfortable with the updated timelines for FMX? Can you give us the nature of the types of regulatory approvals that might still be pending and if there's any factors that could push out the timeline further from this point?
We are awaiting approval for our new products. The exchange that was operated was primarily doing weather futures for the past number of years. Now that we are converting upon BGC's acquisition to interest rate futures required an application to get that approved. That is what we are waiting on. You know, we expect that in large part. Our expectation is that we are confident that that will be received in the first quarter. L ook, this process just takes more time than it used to take. I think you all understand that the way things are working in the world these days just take more time.
W e have that expectation, and we don't have any reason to believe that it would last, it'd be pushed further out than the first quarter of 2023.
When you're going to announce the partners, how should we think about the timeline about the partner launch? Does that come after the regulatory approval and then before the 2Q 2023 platform launch?
I think that's a discussion with the partners, but we would expect it for sure before launch, and it may coincide with the regulatory approvals and our launch date opening. M y thinking would be you wanna create the most excitement when you have an opening day. T o announce that Rihanna and George Clooney are attending the opening of your restaurant, but you have no idea when it's going to open, it's just not as much fun as when you say we're gonna open on X date. I think we're going to have great partners. That's our expectation, and we want to announce them when we have our opening date so people can get excited about meeting that date as opposed to just generally we're gonna open someday.
Okay. Understood. I wanted to stay on the FMX topic. The CLOB market share for the UST platform, it's declined to 18% relative to 19% in the last quarter, and in the same quarter of 2021. Are there any factors that are impacting the market share right now?
This was really the first period that BrokerTec picked up a little market share. That stems back from the extreme volatility that was in the marketplace. I've been in this business a long time, and when we were operating long, long ago, the busier the market, the stronger the leader is in extreme volatility. This was an example of this extreme volatility, our growth. You know, while we continued to grow in volume, market share went to the larger player. That's just during this extreme volatility. I think as that dissipates, the extremes dissipate, I think you'll see our growth continue.
Obviously, as we announce the partners and they join, we think we will see a material improvement in our market share thereafter.
Okay. Just last question for me here on timelines. Can you provide us an update on your digital asset or cryptocurrency initiatives and if the timeline for those platforms has changed?
Sure. In Lucera, we are connecting market participants to exchanges. We are also hosting exchanges as well. Our team that builds exchanges obviously is very, very focused on FMX and making every i dot and t cross to make sure our system is as good as it possibly can be and covers as many idiosyncratic nuances that futures traders want to use in their system. We are focused on that, and once FMX is launched, we will turn our attention to building the exchange for crypto. The timing for an exchange for crypto we are trying to meet is when the large traditional finance banks and trading firms decide to get into that space.
We are connected to all the banks and all the trading firms of the world, and we want to go into that business when our key clients around the world are starting to trade crypto. They think about it. They have the right to do it. There's a little bit of announcements you've seen here and there, and now there's a few firms willing to custody it. You know, this is all beginning. We're trying to meet that timing, so I think we are not racing towards it. I think we are doing FMX first, and then crypto and digital will be second. But I think what the key for us is we're trying to time it to be ready, open, and available, and rocking when the large banks of the world decide that they're going to start trading.
That's our special sauce, if you will.
Got it. Thank you for taking my questions.
If you think about it, these big banks, would they rather trade on FMX and BGC in the place where they're comfortable, or would they rather trade with Binance? I just think, we seem pretty the right choice.
Thank you. As a reminder, if you'd like to ask a question, that's star one on your telephone keypad. As a final reminder, to ask a question, that's star one on your telephone keypad. Okay. We currently don't have any further questions, so I'll hand back to Howard Lutnick for any further remarks.
Like our margins improving, we're getting more efficient on our conference calls. Thanks for spending the half hour with us, and we look forward to seeing you again and updating you on the corporate conversion, updating you on FMX, and we look forward to speaking over the quarter. Thanks, everybody.
Thank you for joining today's call. You may now disconnect.