Forge Global Holdings, Inc. Q2 FY2025 earnings call

• Private market dynamics: Private companies stay private longer, IPO window narrow, demand for capital/liquidity solutions grows; institutional/individual investors allocate more to alternatives. • Forge's strategy: Focus across 4 verticals (Trading, Data, Custody, Wealth). Launched next-generation marketplace, Forge Price as pricing standard, developing investment vehicles, building custody solutions. • Priorities for second half 2025: Open market to new participants, expand technology-enabled competitive edge, execute with discipline to reach adjusted EBITDA breakeven in 2026.

In Q2 2025, revenue reached $27.6 million, a 10% increase. Market-based revenues were $18.6 million, up 16% from Q1. Trading volume increased 9% quarter-over-quarter to $756 million, with first half 2025 trading volume of $1.4 billion exceeding full year 2024's $1.3 billion. Custodial administration fees totaled $9.1 million, broadly flat from the prior quarter. Custodial client cash balances were $440 million at quarter end. Adjusted EBITDA improved to a $5.4 million loss from an $8.9 million loss in the prior quarter.

• Expect continued progress on growth and profitability initiatives in second half 2025, remaining on track for adjusted EBITDA breakeven in 2026. • Second half year-over-year organic revenue and adjusted EBITDA growth rates expected to continue in line with first half. • Q3 is seasonally quieter, reflected in guidance. • Liquidity expected to grow and provide small positive adjusted EBITDA contribution in first 6 months of ownership, exiting 2025 with clear trajectory to adjusted EBITDA breakeven in 2026.

• Forward-looking statements are subject to various risks and uncertainties, with actual outcomes potentially materially differing from projections. These factors are discussed in SEC filings, including the quarterly report on Form 10-Q.

Q: How is the U.S. IPO market turning back on influencing activity on the platform and volumes?

A: Kelly A. Rodriques noted that a healthy IPO window is correlated with volume, but there's still uncertainty, so they are cautiously optimistic and will continue to watch.

Q: Talk about the competitive landscape when launching the first registered fund later this year and access to the 401(k) market?

A: Kelly A. Rodriques said Forge's fund has unique coverage, cost structure, and names related to underlying securities. For 401(k) market, they hope to partner with those offering products to retirement accounts, seeing it as an extension of their access strategy.

Q: Update on potential timing of reaching adjusted EBITDA breakeven next year and enhancing features of the next-generation platform?

A: James Nevin said they're increasingly confident in reaching breakeven in 2026, with platform scalability, liquidity, and offshoring of technology development contributing. Kelly A. Rodriques mentioned the next-generation platform has an automated negotiation process and is working to represent all trade structures, with a rolling release of features.