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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 March 31, 2005

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.)

110 East 59th 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 April 27, 2005, the registrant had 29,047,428 shares of Class A common stock, $0.01 par value, and 22,139,270 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:
March 31, 2005 (unaudited) and December 31, 2004		 3
Condensed Consolidated Statements of Income (unaudited):
Three Months Ended March 31, 2005 and March 31, 2004		 4
Condensed Consolidated Statements of Cash Flows (unaudited):
Three Months Ended March 31, 2005 and March 31, 2004		 5
Notes to Condensed Consolidated Financial Statements (unaudited) 6
ITEM 2.    Management's Discussion and Analysis of Financial Condition and
Results of Operation		 20
ITEM 3.    Quantitative and Qualitative Disclosures about Market Risk 28
ITEM 4.    Controls and Procedures 29
PART II. — OTHER INFORMATION  
ITEM 1.    Legal Proceedings 30
ITEM 2.    Unregistered Sales of Equity Securities and Use of Proceeds 31
ITEM 6.    Exhibits and Reports on Form 8-K 32
  Signatures 33
  Exhibit Index 34



PART I. - FINANCIAL INFORMATION
ITEM 1. Financial Statements

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


  March 31, 2005 December 31, 2004
  (Unaudited)
Assets
Cash and cash equivalents $ 12,960   $ 19,884  
Reverse repurchase agreements with related parties   176,704     189,804  
Total cash and cash equivalents   189,664     209,688  
Fixed assets, net   54,380     50,605  
Investments   12,673     12,709  
Goodwill   11,968     11,949  
Other intangible assets, net   14,922     16,097  
Receivables from related parties   —     1,630  
Other assets   8,373     7,455  
Total assets $ 291,980   $ 310,133  
Liabilities and Stockholders' Equity
Liabilities:            
Payables to related parties $ 2,292   $ 7,113  
Accounts payable and accrued liabilities   21,019     24,795  
Total current liabilities   23,311     31,908  
Deferred income   7,906     8,011  
Total liabilities   31,217     39,919  
Commitments and contingencies (Note 11)
Stockholders' Equity:
Preferred stock, par value $0.01 per share; 50,000,000 shares authorized, 0 shares issued and outstanding at March 31, 2005 and December 31, 2004   —     —  
Class A common stock, par value $.01 per share; 200,000,000 shares authorized; 34,309,572 and 34,289,773 shares issued at March 31, 2005 and December 31, 2004, respectively   343     343  
Class B common stock, par value $.01 per share; 100,000,000 shares authorized; 22,139,270 shares issued and outstanding at March 31, 2005 and December 31, 2004   221     221  
Additional paid-in capital   294,281     294,115  
Unearned stock-based compensation   (2,427 )    (3,080 ) 
Treasury stock, at cost: 4,436,315 and 3,082,815 shares of Class A common stock at March 31, 2005 and December 31, 2004, respectively   (45,582 )    (33,972 ) 
Retained earnings   13,927     12,587  
Total stockholders' equity   260,763     270,214  
Total liabilities and stockholders' equity $ 291,980   $ 310,133  

See notes to the condensed consolidated financial statements.

3



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


  Three Months Ended March 31,
  2005 2004
Revenues:
Transaction revenues with related parties
Fully electronic transactions $ 20,437   $ 30,527  
Voice-assisted brokerage transactions   6,494     6,026  
Screen-assisted open outcry transactions   407     231  
Total transaction revenues with related parties   27,338     36,784  
Software Solutions fees from related parties   6,104     4,112  
Software Solutions and licensing fees from unrelated parties   4,177     2,998  
Interest income   1,285     744  
Total revenues   38,904     44,638  
Expenses:
Compensation and employee benefits   13,051     9,315  
Amortization of software development costs and other intangibles   4,666     3,664  
Occupancy and equipment   7,409     6,242  
Professional and consulting fees   2,941     933  
Communications and client networks   1,756     1,613  
Marketing   493     386  
Administrative fees to related parties   3,877     2,957  
Amortization of business partner and non-employee securities   117     444  
Other   2,491     1,523  
Total operating expenses   36,801     27,077  
Income before income taxes   2,103     17,561  
Income tax provision   764     6,866  
Net income $ 1,339   $ 10,695  
Per share data:
Basic earnings per share $ 0.03   $ 0.19  
Diluted earnings per share $ 0.02   $ 0.18  
Basic weighted average shares of common stock outstanding   53,141     56,074  
Diluted weighted average shares of common stock outstanding   54,095     58,253