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U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2004

Commission file number 0-28191


eSpeed, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 13-4063515
(State or Other Jurisdiction of
Incorporation or
Organization)		 (I.R.S. Employer
Identification
No.)
135 East 57th Street
(Address of Principal Executive Offices)
New York, New York 10022
(City, State, Zip Code)
(212) 938-5000
(Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X]     No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes [X]    No [ ]

As of July 29, 2004, the registrant had 30,688,085 shares of Class A common stock, $0.01 par value, and 23,889,270 shares of Class B common stock, $0.01 par value, outstanding.



eSpeed, Inc. and Subsidiaries
Quarterly Report on Form 10-Q

TABLE OF CONTENTS

PART I. - FINANCIAL INFORMATION


ITEM 1.    Financial Statements   Page  
Condensed Consolidated Statements of Financial Condition:
June 30, 2004 (unaudited) and December 31, 2003		   1  
Condensed Consolidated Statements of Income (unaudited):
Three Months Ended June 30, 2004 and June 30, 2003		   2  
Condensed Consolidated Statements of Income (unaudited):
Six Months Ended June 30, 2004 and June 30, 2003		   3  
Condensed Consolidated Statements of Cash Flows (unaudited):
Six Months Ended June 30, 2004 and June 30, 2003		   4  
Notes to Condensed Consolidated Financial Statements (unaudited)   5  
ITEM 2.    Management's Discussion and Analysis of Financial Condition
and Results of Operations		   15  
ITEM 3.    Quantitative and Qualitative Disclosures about Market Risk   25  
ITEM 4.    Controls and Procedures   25  
PART II. - OTHER INFORMATION      
ITEM 2.    Changes in Securities and Use of Proceedsand Issuer Purchases of Equity Securities   26  
ITEM 6.    Exhibits and Reports on Form 8-K   26  
Signatures   27  
Exhibit Index   28  


PART I. - FINANCIAL INFORMATION

ITEM 1.    Financial Statements

eSpeed, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share data)


  June 30, 2004 December 31, 2003
  (Unaudited)  
Assets            
Cash & cash equivalents $ 34,115   $ 55,318  
Reverse repurchase agreements with related parties   205,483     173,182  
Total cash and cash equivalents   239,598     228,500  
Fixed assets, net   44,012     34,467  
Investments   12,355     11,449  
Intangible assets, net   18,821     18,927  
Receivable from related parties   1,125     1,518  
Other assets   2,687     2,707  
Total assets $ 318,598   $ 297,568  
Liabilities and Stockholders' Equity            
Liabilities:            
Payable to related parties $ 3,557   $ 6,323  
Accounts payable and accrued liabilities   20,282     19,560  
Total liabilities   23,839     25,883  
Commitments and contingencies (Note 11)            
Stockholders' Equity:            
Preferred stock, par value $0.01 per share; 50,000,000 shares authorized, 600 and 8,000,600 shares issued and outstanding at June 30, 2004 and December 31, 2003, respectively   —     80  
Class A common stock, par value $.01 per share; 200,000,000 shares authorized; 32,471,603 and 30,953,867 shares issued at June 30, 2004 and December 31, 2003, respectively   324     310  
Class B common stock, par value $.01 per share; 100,000,000 shares authorized; 23,889,270 and 25,139,270 shares issued and outstanding at June 30, 2004 and December 31, 2003, respectively   239     251  
Additional paid-in capital   290,420     287,593  
Unamortized expense of business partner and non-employee securities   (606 )    (1,192 ) 
Treasury stock, at cost: 186,399 shares of Class A common stock at June 30, 2004 and December 31, 2003, respectively   (2,094 )    (2,094 ) 
Retained earnings (accumulated deficit)   6,476     (13,263 ) 
Total stockholders' equity   294,759     271,685  
Total liabilities and stockholders' equity $ 318,598   $ 297,568  

See notes to the condensed consolidated financial statements.

1



eSpeed, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in thousands, except per share data)


  Three Months Ended June 30,
  2004 2003
Revenues:            
Transaction revenues with related parties            
Fully electronic transactions $ 29,154   $ 27,538  
Voice-assisted brokerage transactions   5,190     4,645  
Screen-assisted open outcry transactions   158     243  
Total transaction revenues with related parties   34,502     32,426  
Software Solutions fees from related parties   4,475     3,881  
Software Solutions and licensing fees from unrelated parties   3,107     2,209  
Interest income   761     563  
Total revenues   42,845     39,079  
Expenses:            
Compensation and employee benefits   9,768     9,239  
Occupancy and equipment            
Amortization of software development costs   2,396     1,832  
Other occupancy and equipment costs   6,073     5,739  
Professional and consulting fees   865     863  
Communications and client networks   1,595     1,714  
Marketing   379     408  
Administrative fees to related parties   3,212     2,590  
Amortization of business partner and non-employee securities   142     362  
Other   3,569     2,830  
Total expenses   27,999     25,577  
Income before income tax provision   14,846     13,502  
Income tax provision