Earnings call transcript Q4 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to the Forge Global Holdings Fourth Quarter and Full-Year 2022 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer. Instructions] [Operator

you conference. Dom, begin may you. your Thank

Dominic Paschel

bit Awesome. joining quarter us Emma, time and recap be and the appreciate we all us. for thank you a will today call hanging XXXX the call. Thank so first earnings as for you, full-year This longer, you for with full-year, Forge's fourth

then at remarks and CFO. They Forge's end. me are regarding quarter's Joining the Lee, today questions Kelly Mark Rodrigues, take results and share the Forge's prepared your CEO; will

Just available financial issued Forge's our This also page release, on is is after page is a press for an IR fourth quarter press closed accompanying today, market we available discussion results investor release be and results. our conference our replay. website. the the is announcing IR site. supplemental There full-year of being to of call on will XXXX webcast complementary which and A

our on may that During forecasts in these report which we in this differ materially outcomes those statements important statements. website. to be risks our we from soon factors IR subject as call, make forward-looking can cause and and conference actual discuss statements are make could there to current of today's Any We on factors the are these our included page and projections including various to filings, XX-K, SEC the annual expectations, Form of date. on uncertainties, based found that forward-looking

not statements. reminder, we forward-looking are As to required our update a

company's non-GAAP noted, meaningful believe measures financial today, discussing which presentation when performance. are adjusted are otherwise unless be we will our In evaluating the we that measures,

Today's our the contained measures you discussion GAAP full-year these will reconciliations, the is quarter page. on to should and the XXXX within refer which financial to fourth For release, posted IR results. also detailed focus the disclosures on data press and

be full which of always, to quarterly Forge's results we a and can evaluate control. affected events outside that you annual are by for picture our As encourage unexpected performance, both

CEO. I With that, turn it Kelly, our to over

Kelly Rodrigues

thanks, interest this and for your Dom, joining We afternoon. appreciate everyone, Forge. Thanks, in

to of the to call already evolving transparency many in private diversify grow we were over of the our made progress past you the I As and control. within these Forge what efficiency macroeconomic technology, is achievements and was backdrop our new the XXXX year and the of internationally portfolio. building future. our private significant helped Among developing throughout access, market what for and enhancing to fortify today. in we know, on We've market of Enhancing the business committed headwinds, our focused efforts expanding both avenues for our future. entire have believe growth Against

conditions of a couple predictable benefit as revenue trends. from by financial down perspective, in our to key XXXX custodial certainly were revenue affected challenging revenue in which of while From we a volumes, designed. that diversified of impact our markets encouraged the transaction-based the offset trade some the realize We model, our market offerings includes

renewing have we custodial the substantial rose, renewal the customers. in over an in that private growth increase rate the sizes And full-year still Specifically, public markets. administration as with while tandem, fees innings in natural observed first data all rates are hedging and our of ticket grew volatility inspired seen we've our across by and business, interest and early high on

untapped. small end future. believe our business two base, I to SaaS-like Data $XXX,XXX between from financial approximately it bookings million. XXXX their of As we XX% $X.X yet diversifying is our revenue revenue clear, to revenue this is for XXX% for factoid, off grew our we at an total a the can data XX% an to total for of about relatively exchanges avenue be and margin, the is And annual create revenue U.S. want believe data major the high Forge’s is opportunity mix.

following Lee. our more some in business our discussion highlights over of to Mark I'll financials. our I'll And of discuss detail turn for it that,

Mark Lee

of be we believe given best quarter on compared performance Discussion the fourth to quarter prior comparison our in time. as last will Thanks, the this to meaningful focus environment economic a to Forge’s it's Kelly. unique the remarks quarter more at

revenue, expenses million, last last In quarter. XXXX, XX% quarter fourth rose quarter. from down $XX.X revenues, X% $X.X million Total of to transaction-based $XX.X expenses placement the total from reached Forge’s $X.X last up million, fee million transaction-based less

QX, venues, increased provide rate platforms in X% some match of volume third-party many overall transaction, and last take here, [Indiscernible] period while illiquidity, the our thereby trading the intermediaries Forge, results including X.X% with in only volatility million are quarter This of from the rate. Transaction Forge $XXX on trade. working net from to other take and during reducing side side the to commission of net to context in declined our million X.X% To $XXX quarter last current QX.

custodial in This were fees Total to by quarter. current cash fees is driven $X.X administration last the in interest from administration rising million XX% $X.X environment. increased QX million largely up gain rate

primarily are in reduced QX, which and custodial decrease investment liquidity inflows from at driven quarter. $XXX million last totaled end in the investment balances as QX, by net for cash events during as historically increased cash The balances million high distributions, down from QX in income. of outflows Forge’s $XXX well was

custodial a million up increased $X.X to quarter. million Total QX, from accounts quarter last over approximately X% in $X.X

loss $XX.X is of essentially $XX.X quarter. flat third at million million gain the liabilities offset by a million $XX.X explained custody QX QX was compensation. in quarter under decrease Fourth $XX $XX Assets end billion by a $XX versus net This in compared net loss warrant last from billion difference shares-based the in at were quarter. million, to

adjusted of to at the our related loss. this of $X.X a is compared slightly EBITDA costs separation EBITDA increase million, operating slight to contributed the million quarter, In streamlining results. initiatives to loss loss in Adjusted quarter. efficiency key we was QX, recognized million, and fourth employee higher last measure $XX.X a of $XX.X In and

down activities cash to in based revenue are the last flows in million corporate operating of $XX.X of the bonuses combination Net out activities bonuses the operating Forge in used mind to used $X quarter, annual XX%. quarter. of performance These timing a first overall on net compared Keep cash that quarter, in by attainment. improved pays cash and individual

count housekeeping compared strength to cash the at weighted million of million From and equivalents fully and XXX Cash our compute balance last basic was was number quarter ended share of perspective, sheet. XXst December diluted of shares the approximately shares. shares XXX million, our $XXX.X highlighting quarter $XXX.X used to a loss average continued net million as our outstanding

revenue recap quarter for first of fiscal average EPS of the purposes, by basic less Creating a driven position. transaction-based Forge's XXX geopolitical we to while lower For weighted XXXX, year attribute was estimate primarily and At total year in expenses uncertain instability. XXXX, a common ago, volumes, loss down which modeling XXXX, $XX.X full-year shares in macroeconomic conditions. volatile we million, $XXX million trading from a and market

was $X.X Of million total placement fee constant to revenues transaction-based last net was take for year-over-year. XXXX in amount, $X.X from rate million, billion average transaction that less volume XXXX. at X.X% The $XXX.X XXXX $XX.X compared expenses year. billion, totaled down

declined in in $X.X of $XX.X custodial $XX.X million then. in fees during from custody as Total from XXXX closures custodial million quarter up the $X.X unfunded XX% due Total million were to the accounts million. to second Total we year-over-year accounts XXXX. administration discussed year, accounts to decreased

at Assets custody XXXX billion under $XX.X $XX.X billion end. XXXX versus at were year-end from year

$XXX down $XXX cash million from million XXXX, at the Forge’s of at balances of XXXX. end custodial the end totaled

loss $XX.X going adjusted Full-year stock compensation net loss this Nearly million million $XXX.X compared million, XXXX three million due decline in to EBITDA of was of to cost $XX.X last expense Fiscal one-time year was year. net was $X.X of public. compared EBITDA an loss gain in adjusted quarters a and of XXXX, to XXXX.

essentially able were still we year-over-year. in line. the top and keep We management, and to adjusted growth flat in costs cost decline decrease agile our to our limited hires our in strategic our invested EBITDA total Through

activities to year. with $XX.X cash transaction included provided activities of the million of Net in last compared million public. $XX.X operating to year, cash connection This in million used by was net $XX.X operating going in cost one-time

monitoring and regular resource ongoing are of a spending and allocation and capital management. we on market, Now Board capital, to Responsible our basis. cost stewards the the

As to indicated overall cash we in lowering XXXX. committed our are to previously, burn XXXX, compared

our shareholders. balancing need while focus to expenses, Forge’s and platform, the continue our delivering We in on commitment services and and executing managing and invest opportunity to products on to

Except Our end and use providers, current consolidating the scrutinizing for of managing a XXX at overall stability hiring moderating our of is positions, there of discretionary highly quarter. real marketing our spend market. reducing small in headcount needs. at in to and maintain number our estate decreased the service is third-party greater total levels the capital, we intent our critical total until headcount to are Besides the

but the seen from believe platform record the which again. willingness with investors. positive test of we unique IOIs the the to conditions of on waters private levels, sell Forge Macroeconomic And XXXX side with for side, speaks by create number our companies to uncertainty, interest [Indiscernible] available continue of which December on opportunities active the reach we've a to investors breadth doubled increased to indicate January, an companies number

are sellers not benefit if, realize interested normalize of of will our when markets Forge We but network confident that investors. active and

position summarize what for forge to accomplished back future. Forge XXXX it hand strategically the I'll to has And to Kelly in

Kelly Rodrigues

Mark. focus. we Thanks, And Despite the market proud in progress XXXX, future. I'm of invested in and the for conditions challenging building

our improve team transparency the the and year. deepening efficiency competitive of incredible market. in position, participating enhancing the products private platform trading experience, Our data on focused the our expanding and We the to demonstrated and throughout our Forge

publicly include: milestones we a XXXX became company. listed Notable

public, allowing support in year, public business We scaling approvals. a required intention on Forge Europe an through into our capital means markets pending anticipate Forge to did to to of starting It our us to the markets September was and market which in category into growth. We Europe. this private the first end, go our Germany, expand other was thereafter announced we moving launching the regulatory and in in access NYSE. international platform the

stock certain indicate We've below minimums. existing tranches a markets offerings. investment Forge early offerings added upgraded Forge shares. on fixed minimum allows and to to at single price. at investors our of fund and An cost our participating in buyers platform This signs issuer We launched in facilitate including built historic entry, offering multiple mechanism are to lower that size ones, fund capability new sales block a lower interested of $XXX,XXX to of new investment the products

stock our Trust we Forge October, streamline first and lending efficient, a with expand participation capability believe funds clients integrated option the of Solutions. new private to vested Custody the Forge, enables and In to transactions. private this exercise Forge able platform. sell offers and custody in breadth borrow our to support private loans, and their their This which in sell their has markets. securely participate taxable more options the launched potential the capability lending to product, Additionally, shares shares cash exercise on to sellers into employees function to We bridge inventory increase the of custody allows the helping side for investors then Forge Forge pilot market

our intelligence continue distribution. trading intelligence, addition data. investment new Forge analysis that offerings to data and and analysis additional investors existing expand released risk In data to insights, including tools. financial our of comparables, built through insights management We've to institutions avenues API and new and we XXXX. first third-party institutional portfolio now Forge their we in to Delivering building into sector new can investors products, to company use added private features integrate And data

becoming expert our To on insights launching including private through our performance. offer program platform source XXXX, and to market our our go Through broader content the report private a scale sought-after Forge insights are reports data we performance increasingly the and update, and our private intelligence monthly the trading market of market. company on data, we in a

we've engaged our Street financial including And market and of data private brand. data and clients our Journal, publications, Barron's, others. the subject matter new in Wall awareness grown and partners experts referenced and and is Our through Bloomberg regularly by content, journalists

accelerating announced customer and we December, of in and evolution Forge’s support network It units, business the development the to effect. streamlining platform. evolving the complementary needs of will Finally, unified customer technology around amplify our strategic center experience Forge’s segments, the Forge’s business

will increasingly optimized As deliver data, training that a leverage private have we solutions, all competitive market insights we our the the to capabilities margin. strategy to participants look investors as can future, access that and and and to institutional navigate forward recognize advantage

months. that underway progress to initiatives in launch already We are against excited several about we major our coming intend

these conditions we that even and I'm for the the we're Forge optimistic committed initiatives burn right energized leadership lower we XXXX, execute are about investing and realistic as right and aware to our leadership are will remain future. also position competitive our and will have help evolution. that cash a while market We and Forge’s in of progress, and in still to managing structure extend category to our confident advantage, Still, growth

Now brief on current few remarks in I'll what seeing to take a the conclude market. just with moments we're

While we remained challenging, some are in that QX our shoots noted closely. green we watching data

in platform number began leveling the of the remained pricing last shares XX% the historic QX out companies QX, on decline X.X% to QX in declined most averages. the months QX. shares the trading steep in characterized on And to above quarter-over-quarter First, listing few average from to board declines improvement on ‘XX meanwhile, distinct from that an XXXX, the QX show of from pricing year. signs of of Active

remained in unconvinced trended XX% the point. signs Still, on had However, there market. slightly Spreads December's market in about indications up from both and remain And elevated prices January at troughed. additional QX buyer's were optimism. of the remained a of market interest low bid that and investors

are possible noted, toward Reddit year. Instacart, IPOs, an others like this Stripe, we sentiment XXXX eyeing companies improving IPOs and As reportedly

balance. a to do will clear, be a form make, seen take the for which in its me declining in of regain valuations, will buy first and sustained stabilized private market be spreads, not side it Let improving data interest optimism out our optimism the of market

in XXXX up marketplace XXXX year-over And this. put of conditions trading XXXX. history our year year, asset this with let's in quarter-over-quarter in wasn't by revenue, there XXXX experienced Inevitably, we class to to the with The Even remain be unwavering. we volumes see capital QX as first that And challenging. it the But markets, economic in cycles be. the while the would ultimate opportunity and we QX will the all with this QX we higher weakness quarter evidenced be anticipated market continue persists. in volatility impact entire that is market close lower last -year.

our in on that team vision, is focused of one, a will remind vision I our often long-term pursuit Forge execution. and that stay

is volatility remain and We extend to positioned will pursue of category growth when well again to new continue this latent power continue we the create will unleashed. we our and leadership; and the will opportunities comes economic once market

Dominic Paschel

can we open you, questions? to Thank with Kelly. that, Emma,

Operator

Thank you.

Your JMP first Ryan comes line today from the question Devin of with Securities.

Your line is now open.

Devin Ryan

I guess Hey, something were think, thanks. fees dynamic number want right. retail And just you was institutional I balance we forward? moving trade, Mark you Is could start think you heard Good to and here one average evening, of placement that mentioned the where dynamic? everyone. a trades, I side Is the a in that that or I you this on capturing of nice had continue lower. volume

a the just whether of XQ? else was to trying that or understand just towards So dynamics bit just of in a little to shift retail get something trying sense more

Mark Lee

Thanks Devin. the Hey for Yes. question.

of the provide key metrics, you other points supplemental filing have rates. can of take our so key we history couple and net a our So see you that

XXXX overall QX So mentioned look call, the when of similar actually of take ago to X.X%. we at the year in you And versus experienced the for X.X%. it’s the was at we rate XXXX at in as XXXX take X.X% the take year QX very rate our rate constant

talked net something drive mix and how you rate. weighted any we've that And fluctuate about versus can quarter-to-quarter, influence and mix where the take of institutional retail. average so it's from always to And

sense slightly liquidity customers to work for our and Devin, looking best our and times that we're for can It counterparties. counterparty managing give for the this in both execute for here what seller. of there clients clients trades, right? can is be execution serve institutional were that. complete that time -- We we But what outside for outcome cleanest a the it and outside believe QX our that customer. with trade, be probability trade be talking could with execution, to different And the makes working find of phenomenon the involve could but And it to But in most we was about with right? help retail when part, an will best buyer external the

Devin Ryan

we you how then of industry, industry maybe an you or affecting just for in you well business thinking how about terms time terrific. managing hope the terms your appreciate seeing that What in guys year that and market a keep you to for are at moving And And any Okay, will the as an so the a the forward are resources? clearly, of others leader, environment focus of in are that competitive the over the here. been lower opportunities costs as get landscape, pullback with or in articulated, seeing of improvement parts growth but of expense reramp peers is that Can on share recover, are of kind side, a the it's kind volumes kind the happens of in where you difficult extent guys kind backdrop volume? past or are you level you cost a reacceleration.

Kelly Rodrigues

Yes.

Devin. questions So of in -- a There's is there's this there. a couple Kelly,

acknowledging of felt part the continue see other that either of excitement with time and the We the other is that other very was TAM lead getting time you nascent me earlier mean would we combination in or the in we stage the some, know, like competitive noise what broadly. forms people of when long-term that sheet know market. for to was balance having we reason and smaller you the gotten this market entrants certainly, the of see we And first scale capital start Let just The have difficult market we one. private public companies. about challenged. and And the all out went a difficult Most rise a are underway. has it about believe was efforts raising --

we leader. accrue benefits the well market would And remain That capitalized that to the capacity. in hopeful

we rate, so come carry rates. have companies histories And burn of I have to from burn that and ability don't both Mark big a the

comes position particularly and in and So back, economic come answer market think was definitely easily of be and but it's part do call, this find we're figuring other I think balancing making was out capture mentioned counterparties the we'll tech to And we act, and better that, in to when that people, before try it's to potential, question, latent in other what demand, positioned. going they're we a Mark's have, the investments we the last in the think have a that supply because we given may on the we're side.

captured Then I'd down or was a of say trade rate a counterparty the flip may that Forge. bound take being that that institution we have need to find side that may competitor another financial a in our too

-- an and overwhelmingly the the sides to was the trade that of got history between being we of while the example volume, not so able both represent the And company. of

well it matter So but from. I'd expect we that we we're no respect say where it about competition, see We're comes excited very it, positioned. to

Devin Ryan

Yes.

Hop back you, queue. Okay, it terrific color. I'll there. in Thank guys. leave the

Kelly Rodrigues

Devin. Thanks,

Operator

question next Alex from UBS. Your line Kramm the with comes of

Your line open. is now

Alex Kramm

evening, Yes. Hey, everyone. good

may then quarter can you for Just maybe the also green and the quarter, you've what a them a little some of expand fourth couple first go you fourth you the seen then now that into have think average mentioned maybe just the comments saw that to mean, shoots few missed first with that back I daily But two you've Thanks. something some but you in of I months volume seen quarter? how us? share with more trade or can anything compares the bit. so I quantitatively And sort far? importantly, to that of quarter, maybe quarter, in

Kelly Rodrigues

you don't why some the Speakers] you [Multiple of with start Mark, mentioned.

Mark Lee

December the described one-third of right? some number buyer's things so talked side. issuers saw the number in sell XXXX being one with that of the We've in I things said of our And an of This is side about particular, was of mean, on to -- IOIs I of Mark, PMU a Alex. covering QX, and imbalance it's the And two-thirds for I first mentioned buy buy was we interest IOIs. and an the you what our been one the and I increased side time Hey, various we being were we I that issuers, two buy increase January. there's saying in side, from about things buy now reported side, IOIs in that Yes. in know, market doubling

over mean, to increased addition, I December buy January. side from actually number in the XX% of total IOIs

market. these So share. buyers the it's still just start, But to seeing are we signs wanted positive it's and we a a but imbalance that are between sellers, still buyer's

Alex Kramm

Yes.

Mark Lee

more The remain we in that don't it. the be provide we're in Alex, Kelly that position did a in other continues and mention the I to was, QX this expect have you mentioned, and soft volumes declines but thing that mentioned forward the provide And QX. think as than QX to in to lower volumes Kelly guidance know, past, trading we share we did and

Kelly Rodrigues

is that need got give something where valuations. on and And things it reporting we about of of of press sometimes place combination we've about that that these reason optimism see market we're talked watch optimism and the to in into optimistic, data definitive commented And in Mark's but to fall, that a with for trying little bit going for manage in a Yes, the into on it in QX lot of to is to balance, line sustained look of and not a valuations reporting out I'll the calls still point, as on focus are truth one a duration to balance where that seller a price us here for discipline and buyer for we're the cycle add with to the talking completely of the the other we've valuations how earnings but the declines for these we proof out much us, -- spreads which about pronounced buyer, that combination sentiment we're there reason QX time coming QX we've But there's quarter. forward around a and private were be the when see recently period. this are more and people of and back continue looking coming next data.

I'll of make is point, recognized final But start see latency there degree trades this we platform. data emerge, some if the way even in this is in to the close. And volume

So percentage even I'm are in actual -- funds our some finalized now data indicated seeing and described to back be right and are while things really calls a we've SPVs trades that if market previous roper the people coming interesting days, market significant delayed XX-plus through for trades trades portion has the of some may of that like required trade buy.

are this So the to going come. year to it going to about we'll more the coming of, think into that we continue of to closely. to But that thanks what watch we is talk and ourselves for critical, had KPIs about forward more watch question. on commitments one And sort and

Mark Lee

Hey, Alex.

add one the would that PMU, remarks. include this prepared is in we our didn't seen in thing, but Let something have you me more

discount at the down narrow prior of we're coming side that the buy discount. round. signs seen funding new that XX.X% in in the of discount coming to to One was And positive the more recently, XX% average previously, other the we've an IOIs

to for bidders in average acquiring private prepared they're shares. are So pay price the that increasing words, other

Alex Kramm

expenses, shifting just net Excellent. look $XX look basically for I And side, a If specific. but quarter, EBITDA Thanks I quarter. minus cost as at fourth adjusted know adjusted you you just be there at color. to that more the well, revenue color then gave the is maybe output the I some and your which can million

So rate, quarter. the a little it up that's was from bit the run third

you think know we XXXX, of I would sort it? that mean, I as point? stopped Any starting a call hiring. good is you about seasonality So

again, there tax or in now? quarter? sounds the up down? bit, Should is about you're because should how basically base maybe -- number for quarter? that a kind So cost dollars, every Are help flex some business how are absolute be Just it budgeting $XX there and the million the right of us right the items thinking that's like we first little

Kelly Rodrigues

Yes, that's right, Alex.

hitting costs at compensation our the early you're lot items XXXX, head. expense and mean, you like stock think has related a freeze. mark-to-market, on net At there EBITDA, was We're non-cash the out lot of in we've as loss which one-time taken to stress, hiring movement quarters, we look I at headcount. a freeze. going it I when in looked of to one in get you this manage announced our communicated flat but to point, when hiring trying a adjusted maintaining public

and we're of in cost spend. most we on took terms costs for noticed majority comprises prepared that our of But headcount You that we the line separation employee in remarks, some our QX. holding really one-time the part, as total communicated our in

Alex Kramm

Okay.

and inflationary we any other items pressures So watchful need no for. or that also be to

So good question. this It's a run the is really rate.

Kelly Rodrigues

right. that's That's right. Yes,

you we has also in increase a mentioned, our a EBITDA while the that I Alex, that's by as And when think component of even our I we don't XX%. compensation. really structure have because in we XXXX, look that full-year flat at adjusted cost headcount variable cost comments

So that I QX think is, our But base is part point. fluctuate revenues of our down. question or expense will your up good a answer to go the starting as yes,

Alex Kramm

Thanks guys. Excellent.

Kelly Rodrigues

Alex. Thank you,

Operator

question comes Lau next line Oppenheimer. from of Your with Owen the

is line open. now Your

Owen Lau

taking for you question. my Thank

your color strategy. international So on more could please you expansion add

expect? track you kind Europe Germany should month other some in you And some and expect want color we Thank of Germany? launch about you are do to approval. of product what launch part Germany to I of mentioned Kelly, this also pending you. just in to year? regulatory So get on sense also And what a

Kelly Rodrigues

Yes.

got So I've sure just for let me the make it details.

of demand us [path the starting license] it see call here give be to to about And developed and which mine month, investors dynamics the that come up expansion. is expanded if a I are back in were trying on our XXX cap and we fueling in We market now. converged sort the in I'm this -- running we region. that. number private we the to pre-unicorn, have (ph) of in any actual expect year. what previous the do really we it. What based you I'll applying crop and the as see unicorns So international of that of $XXX for it’s reason the unicorn companies growing market billion, the of sort It's will region. have watching on had for And is of visibility to we

opened This is than go-to-market really area stepping Berlin. ultimately invest to have spring. Deutsche in licenses additional crop investors but We will there of understand just an be we to the think plan. only France to Börse that's launching the that U.S. faster our our over and partner largest require in in that, up we We've expand in And on I'll and not into really the this, offices U.K. beyond. the traveling unicorn point. that's a market gotten in recognize growing we and and one

as venture. there. hired is has the markets, ground We've U.S., expertise private Börse on and the talent of legal ground, got Germany we've already of on got experience well some with we a big senior contributed combines some partner, a place in deep to some our best we've Deutsche which we've in the But management the as relocated think which and is the where staffing got the expertise, compliance

So in so careful market think really trades excited we're And investors We up big about as that. in getting that being path investors it. next is we the And countries, to for selling run burn. too have a do of running the region. timing previously, we've in XX we're in up license interested and pretty related reported to not again, buying could we now; that really see visibility and is enough this domino for got in are over us. we've to the But

the I'd initially there of U.S. companies. dynamics say bit in primarily employees, will the And different little on markets. is be a equity say different the dynamic I'd terms focused of than

closely. need something the And European so capital we're secondary of and formation the market watching really combination that in are

So I'll stop there.

Mark Lee

in we're that Singapore. reminder, we've a as Asia the mentioned Hong to transitioning Kong process And Owen. our presence of Hey, also from

an priority in Europe future. now, and keeping right we more hear that transition our that but about on you'll also So eye is the

Owen Lau

of That's the for you But your have products And how launched you. to expect penetration? year? whole we your launch Thank know bunch to Got what increase your customers existing to Forge now? And additional in a you going helpful. products should Intelligence, right then guys products how think of you about XXXX. I are it. this penetration

Mark Lee

Okay.

in announcements in centric coming I the were say months, And me as energy as a let tell a of accelerate part So model, on space. to lead to institutional to what remarks of we're our looked what we've position and you evolution tell the just interesting can this you customer at the well lot or market. my related I'd really how focusing

you the analysis heard Forge As interesting. us reference, between is and relationship features several have competitive times, the of out we advanced institutional figured that really Intelligence trading

to separate, we're both months few in really a for in about announcements developing wait And and excited but set to a Obviously, hard the benefits coming would data so we of more Intelligence the about impact revenue. of of position But Forge I globally with as as this. come. to and revenue lead stream very trading the terms more its on future institutions so see hear more composition say and

Kelly Rodrigues

in mention, webinar use put we it, to you in other the a like hadn't I'd Owen. markets. seen on case private the of private on day Hey, data

talks helpful I markets. how private help by really to about leverage an the about can our really think people it product that incredibly presentation team not data was our think

I something take to a had at, a do. haven't chance think please that look if So you that's

Owen Lau

great. Sounds you much. very Thank

Operator

Blair. the William Jeff with comes line from Your Schmitt of question next

now Your line open. is

Jeff Schmitt

you. thank Hi,

with of revenue rate again? I on upselling the data contribution you there any call, think And product? that, full the missed can that. the mentioned product renewal at -- beginning data from successful that Kelly efforts the details that over retention could how other you like or have been go I the provide Was but are just

Kelly Rodrigues

Yes.

I citing go and in was back of a the was And I we first think and color. an sort what more didn't the while call this maybe contribution, growth revenue beginning the what actual add let bookings. was leading little both in we've indicator very full-year the me present at a bit of of seen

your get whether product test a cycle, go of markets through customers from renewals indications for And sense something attractive not I initial you or very seeing tell fit. the are when coming your were we renewal can you a So first you high. And in background, real SaaS or like, loved than other that.

of that stickiness sustainable, year-over-year has contribution like I of we something satisfactory. margin rate we and predictability of beginning but small cited so look, not data and expanded starting as X.X at that and the figured of the as the the there, revenue the data recognize their component data our a moved the things a forward. bookings the was of growth a and diversification product out revenue as to bookings Jeff, when in as we one a why from are start off base, and that they're the revenue The in may And XXX%. that's of the that reasons a deals that's size What revenue, small they're actual exchanges, is it that going out this didn't talked product and big they up and be XXX,XXX -- the of million, revenue, about was growth companies think part

and hey, the TBD, across going we and off serve Obviously, be so our are make with customer So still look, be answers all to the investors? across Otherwise, asked it over the the can is about to to that I to as started we're come. are segments, opportunities pervasive Is a Intelligence to different data assume Forge dimensionalize for segments have going companies? looking essentially we're more wouldn't available ways retail product to we're available you of but all all that the These really we this year, the and to data customer our been distribution institutions, excited But it. call it. so let exploring we've with off segments. ways

Mark Lee

Mark Lee Hey, Jeff. here Kelly. to add on [Technical Difficulty]

just about the about reemphasize in past, past feeds talked we know, want additional data talked about things our you to we feature in Kelly to the I we've mentioned API some cases. talked clients. just the So, use providing

XX,XXX data our private on over over from features funds. companies marks XXX product know, mutual You

even We are have that clients in interested information that alone.

that lending, was gather data that that bots for I interesting nice efficiently product And have we very to customer us. venture turned really so segment a out surprise. think be And for positive our data that

partnerships you to asked have private on the they've The I have try ability static. their data. data competitors They're their don't have meant partnerships announced offers Owen in Forge question, typically, dynamic, -- private based enhance a other data markets. and when to But the around mention we that I want prices thing that to I mention mean, know, They the announced the real data abilities time hard the that products. on are funding to

difference providing think big kind under customers we you, really covers other Forge. there's the a look competitors kind and at to dig data So that and the of data when information of, versus their are

Jeff Schmitt

this we Got the investments Forge take on Europe priority there's about impact cash that in presume that think should is hold going downturn put burn slow would like a be to of lower in further but evaluations, how case? year? the on investments is if to precedence, it. a sort And there the strategic market I

Kelly Rodrigues

focused talked into of by initiatives to that heads down about strategic do execution, this for mean be kind is up just well I XXXX, we the ourselves you coming initiatives, pretty in this we've feel like M&A? we on set But call. really are

Jeff Schmitt

I to? I the going being mean the… in if there's a and where just No, you investments mean, have downturn, to that's allocated know, business internal just you're

Kelly Rodrigues

Yes.

we our Mark -- on execution headcount year that consolidated that's this this the moderate at part is manage is end usual The it. structure in us structure. compensation We feeling as So of to look, We a big in our of place. to think we're organic estate think our obviously position going combination way can the year. of good just we're maintain focus mentioned last cost We costs. gives the our the structured real a and cost

if and see adjust downturn, more But look, significant a then accordingly. we we'll

coming say we're burn. to again, cash we XXXX. public. to needle us because a lot you And itself. thread know, we We I'll XXXX reporting coming out into lowering built just committed compliance, is We up are cost of XXXX. the a committed, pay and it process get of and had had really expensive our for to year, to in a being Was of insurance, legal for of fund public, our

we're in control burn costs ‘XX. good to position reduce like for so a And our and our feel we

Jeff Schmitt

you. great. Okay, Thank

Kelly Rodrigues

Awesome.

Operator

[Indiscernible]

Kelly Rodrigues

that… With

Mark Lee

think we one… And I

Kelly Rodrigues

I more. think one we have

We sorry. have --

We have yes. Ken,

Mark Lee

Please go ahead, Emma.

Operator

Ken of JPMorgan. question line Your from next comes with the Worthington

now open. line Your is

Ken Worthington

And guess quarter wanted start, Hi. Thanks the to source help I what percentage does dig into for business that sourced by third-parties? in. I me bit was that maybe more of this a squeezing these percentage trades. the to typically where third-parties lay?

what third-parties. source the and guess, extent I prepared active Why on possible. to side to second, in converting and a so you're the why that's third-parties direct you becoming work? And as that ability briefly remarks focused it Forge then how to of I might the of think try do just don't and number clients using of that you reducing Maybe mentioned do have the how third-parties lastly, the clients liquidity pretty that? maybe directly on? if you do keep And grow as

those. So thanks for

Kelly Rodrigues

let the percentages. let part So the and third-party more me me can talk you about talk about

Mark Lee

Sure.

Kelly Rodrigues

be volume -- So going impact increasing want volume. an be part to evolution an clear At it's their to that least, it and other is at will some the that the future expectation market I the institutions very of a level. feel third-parties of of we're

who a trade. markets block we your go to say leader, of potential rate of in to relates going the trades, where mentioned being reality third-parties pressure will I'd market you're draw this us as fact that the to clear from that virtue traded take increasingly large terms to as is just away particularly others past, around the or pricing In it Forge liquidity by

traded both the part overwhelmingly And fluctuations numbers. -to-year think say of but that a is are to I'll so here, from say sides from numbers. up quarter-to-quarter Mark I'll in third-party, get I let I'd year QX. we we this phenomenon let until now, Mark speak should we will the expect see in although I'd But into

that's volume the we'll the away in I there understand to draw welcome that past Forge to we we fine platform trade and sure maybe where been and make a just want and accept has get we will that.

Mark Lee

let's of critical a the of post, you Ken, as Yes. you say, interact Kelly year-after-year significantly. of amount in with percentage kind volume that outside Kelly trade right? you know, merge of and mentioned, internal mean, able the the we increase, our on to bit we've we down right? it's as [profit] working I with (ph) board the little to has a and internalization, with mass Forge really at know, where up versus has shares counterparties, internally built gotten XXXX, started as sides came were volume cross since know, of done backdrop, big both a need volume, to As continued And to go counterparts, really third-party we've

part, aren't for going always There But be to do it's our what's the the relative for illiquidity, kind our illiquidity a right, time, during to that probability to going of thing time, we're best moments this facilitate kind at know, customer best going most customers. of when we're fundamentally trade. believe of execution the the of cleanest execution, manage work with sides But we kind of for the when you highest both we is third-party. get can trade to to the the

And ultimately, so of, driving our goal. that's kind

which outsized our I we also announced publicly. economic We net you've take distribution of -- economics lower volume announced through another with in the partners. we Wells our there's announce a Fargo prior a announce means, partnerships with others kind in contrast form distribution sharing result heard as partnership of Morgan those us there's you the partnerships, fires, and able with haven't at that that Now expanding could year, rate would been right? to of as higher see But significant distribution could Stanley

together. So it kind of plays I think all

what our dynamic shift going as far concerned, the versus we're still or a is to They're there saying math we for the individuals. as is same on. Now isn't rates charge institutions commissions in what fundamental take

fee. take outside as But math do probably been of really use of your of and disclosing terms in quarters pretty a get And look understand work own the rate change our at the the I can a not you where of kind you math take a of volume, will We're that detail the you looking level so QX. prior counterparties. think it's for portion math. the of of And kind And do you'll our there's you in didn't the out can idea. can we and good at know,

Ken Worthington

between executed. Okay, lag fair and between trades that the maybe for looks on appear the markets, and when come It get January? would but buyers XQ equity said and you What last drive markets was when I on get they in maybe enough. spread buyers I spread may one, I there's since just IPO I and XX% appreciate kind that. is be the on And sellers? it And to that a actually the like more it's even the guess and think widened macro between it something there's sellers, of really better? again that less out factors

be just where but you remind want don't XX% getting I like level then start if to there's would do us again, spread that I close really ideal, to know like know, -- where zero spread done you're deals of -- a more that And like or where be does enough where it's XX% actively.

that is? Just what can you us level remind

Kelly Rodrigues

Yes, sure. Tim, it's Kelly.

price in a XX%. is discovery reported, bid-ask call previously periods terms or of it in been [librium] we territory the or or friction, we in repeated as that's reasonable (ph) As spread, the where around

read so and ’XX ‘XX been I pretty ‘XX around wouldn't and into ’XX. between movements and consistently, we've And ‘XX

thing of three we're spread sustained And as I we're really is in that something elements is the That cited terms the bid-ask is market what valuation. for. movement looking watching that affects what of of sentiments that and XX% is one that So other that the in around sort volume.

first going in time the discount and raise this is data watching the we've today, bid. coming looking of I their this price what demand also or to buyers is on questions got at This a think Mark, we just one the reminded that and reported the into that our I side cycle. is up raising their starting seen where And point down. this is is actually was we're

So another again, indication. that's

can refusal. XX-day that And the some such then is settle see to a create the look, happen We thing that of a I the may be mentioned that this, And not transactions structures, to And where got approve able effect these a of them company we because moving up. has require quickly, towards can ROFRs right sometimes of because of will more of window, for we're some happen set work. through which market or other relatively that start accompanied even and to lag waive be trades it if some approve latency way them to a first them. there'll fund

So even the our appear and indications see on cycle. in though could not quarter a of better next may market it data volume our the in in emerge, until where traded we volume the are depending we

trading where Now some will Forge of we those these. less us name. increasingly Then or waive know have and ROFRs companies standing in single in need give a and a friction those a world and program, faster

on the as And better is here market to trades to happen to so we're starts trying having with trusted focused the correct are companies what decrease friction relationships turn and as of around part itself.

on to continue point that's before actually we're obviously, need we can And start see we're anything to control these And starting But jump to said we're what and see optimistic emerge going cost carrying Ken's to back. related make on to a to here time. to and want revenue. starting to we're for question for and last are patient We've we a as comes our more turnaround, to indicated closing has ROFR recycles it not hit you that but into here. we're until shoots, through but in see where you here. need And translate now. tone get to it Mark in that stay we So any to moderate now to it green

we want add last you Mark, out? to close point before

Mark Lee

bit with capital name. with would our we does, the in desk markets that an head business go that IPOs, that our activity that as the there's year the talking and to On Hey, a IPO, historically, experiencing before the little play announces today trading a your we're historically, say kind market was well of, of Ken, company different. they IPO, IPO interest about and market connectivity But is increased question I the

You've right it's next seen year this later current to really intent was buy XX-months. driving the you round. a so has couple high-quality or kind was growth opportunity of institutional for in, within valuations. the last put what's whether their that what the And announced company that now, know, the that creates not, be at drawing IPO side to interest. in That a now, the company an to for announced able seems what's environment an And discount XX% attractive funding a buy They're right right? to of go companies related institutions, investors me to work, or in, need money the the to buyers IPO the the

Ken Worthington

you. Thank Awesome.

Kelly Rodrigues

Emma.

from question Piper Sander. final from one think I Patrick

Operator

One question Moley Sander. last Patrick from with Piper

Your now line open. is

Kelly Rodrigues

you Patrick, ask can a question. multilevel

Patrick Moley

I to, of No. I but covered. to Kelly was out. the going I ask right pulled I refusal, thought going was about first

So thank you.

Kelly Rodrigues

coming here at forward hosting then us, Well up conference Conference in Emma, here JMP the and the on in as to -- as out with the guys JPMorgan as Oppenheimer you. Okay. We'll you Xth -- next you Thank as thank morning the relatively for well. see we come well Conference shortly that, be look quarter. or sorry, the

Operator

you Thank call. attending. conference today's concludes This for

disconnect. now may You

Forge Global (FRGE) 28 Feb 232022 Q4 Earnings call transcript