Forge Global Holdings, Inc. Q1 FY2025 earnings call

• Forge achieved its best revenue quarter as a public company, driven by improved marketplace revenue and trading volume.
• Announced partnerships with Yahoo Finance and Intercontinental Exchange (ICE) to distribute private market pricing data, validating the integrity of Forge's data.
• Intends to acquire Accuidity Capital Management to expand asset management capabilities and drive recurring revenue.
• Continues to invest in technology, with core operating expenses declining despite higher operating expenses in Q1.
• Commenced a share repurchase program, believing Forge stock is undervalued.

Forge's first quarter 2025 was its best revenue quarter as a public company. Total revenue reached $25.3 million, up 36% from the previous quarter. Marketplace revenues were $16 million, up 85% from the last quarter, with trading volume increasing 132% to $692 million quarter-over-quarter. Custodial administration fees totaled $9.3 million, a 7% decline from the last quarter due to the impact of 2024 rate cuts. Marketplace revenue contributed significantly, with trading volume including large block trades and increased SPV volume.

• Aim to achieve adjusted EBITDA breakeven by 2026.
• Q1 2025 was the highest cash burn quarter, but on track to improve with lower cash burn in 2025 compared to prior years.
• Share repurchase program reflects the belief that Forge stock is significantly undervalued.

• Macroeconomic volatility affecting public markets and IPO outlook.
• Unpredictable economic landscape due to tariffs and potential recession, making business forecasting difficult.
• Volatility in private markets and uncertainties in regulatory changes related to access for retail investors to private markets.

Q: Can you walk us through the rationale for the Accuidity acquisition and its role in driving recurring revenue?

A: The acquisition of Accuidity is strategic as it accelerates expansion into asset management, with Accuidity's Megacorn fund and its focus on passive investing aligning with Forge's goals. It brings recurring revenue from managed funds and expanded AUM.

Q: What are the considerations for setting up single name SPVs and how many more can be expected?

A: SPV structures are efficient for companies to allow investor in/out with less friction. Forge envisions several hundreds of single name SPVs in the coming years, with institutions already participating in SPV trades.

Q: What's the regulatory backdrop for retail access to private markets and expectations?

A: There's a regulatory push to balance investor protection and access. Forge supports policies to broaden access, and is working with policymakers. Also, believes in providing products for participation before regulatory changes are fully implemented.