Forge Global (FRGE) 9 May 232023 Q1 Earnings call transcript

Company Profile

Participants

Dominic Paschel	IR
Kelly Rodrigues	CEO
Mark Lee	CFO
Mike Falco	JMP Securities
Rich Repetto	Piper Sandler
Owen Lau	Oppenheimer
Michael Cho	JP Morgan

Call transcript

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Operator

Hello. My name is Mallory, and I will be your conference operator today. At this time, I would like to welcome everyone to the Forge Global First Quarter 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 session. Instructions]. [Operator

would Head turn go of I to conference ahead. like Paschel, Dominic Investor now you. the to over Thank Relations. Please

Dominic Paschel

us Awesome. all quarter and Marie, earnings today joining XXXX Thank first for thank call. Forge's you, for you,

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

replay. A release discussion the available Just page our release, XXXX today, announcing press Forge's live conference This closed a year press first our is market of is after financial on today being and issued results. of results the for Relations complementary webcast fiscal quarter be we will website. call the to Investor is which available

accompanying on also presentation is IR our There an page. investor

may to important there the conference Any today's of differ make statements, projections statements. based forecasts, outcomes included actual we risks, date. subject materially and could various this and expectations, from to call, in are make forward-looking those on and factors current During that are cause as these that forward-looking statements we uncertainties,

discuss factors We filings, Form XX-Q, our including which these we SEC recently. published report quarterly also our in on

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

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

which our release, the you page. refer should press financial also the and contained reconciliations, these GAAP detailed measures within on For disclosures to the posted data IR is on

on quarter results. which the Today's helpful understand posted have business. first we supplemental our XXXX focus believe will we first is information Additionally, quarter discussion to the

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

that, me to it let Kelly. turn over With

Kelly Rodrigues

of months start back financial we market insights for with by data. the confident and highlights I'll XXXX, of some news I'll that markets and Despite that quarter. seeing rebound. for some eventual for come detailed the an overview first turning Forbes well-positioned the it in And to challenges then from close our continued over remain brief we are posed few Mark market Thanks, first the the before is Tom.

platform, of Forge's improving. jump QX, buy-side and XX% interest and indications interest grew QX. the is remains Buy-side On XX% strong, interest sell-side sell-side of interest indications from in

in also a companies, broader of QX. XX% observed over a QX interest buy increase number We in

and in and reflected While revenue. there of and is market buy improving banking continued health which affected industry, the volumes volumes outlook the the on interest sell QX participants impacted uncertainty the both of economic total the side. quarter about the

We up did XX% to the quarter. fee quarter, up revenue and grew compared X% custodial million, quarter X.X%, rate reaching over take QX total administration over $XX.X normalized quarter to see

million, increased accounts for X% investors remained We're custodial total the quarter-over-quarter them million us to our data cautious to addition, this to help $X.XX that while by unique increase. navigate encouraged In a downturn, have $X.XX insights are moment. and from turning they the proprietary throughout fact

trade price into ROFR including compared and of round, to their watching first spread, bid, in the discounts entry which right ask exercise or or at data, time market. Forge’s rate private last are signals their to Investors companies market reentry refusal unique funding the this

have the traded for Private designed Forge We Index Private companies. Index, benchmark We May on first Forge the actively index, to are Market about the preeminent our Market be X. also private of the excited launched launch we which

measure stage performance are established rely asset classes. or tool in attribute market public used a asset traded returns to track market asset markets on this Now, portfolio companies data a just believe, venture-backed can we activity, and reflects actively class in It's other fund that performance often that benchmarks that stale or target other level late the or index secondary funding private recent and performance marks, like the be other private while market. against Ford's the classes, pricing

us we first speaks participate the completely to of this drive transparent, and to access to financial all products The liquid and in And of a types open stone and the a private and leap in need forward market a investors. necessary drive to index we view where development asset passively believe settlement. fully liquidity as leap derived increased pivotal an a solutions future to front foundational efficient, index new marks that investors it to forward accessible in opportunity this class. solutions see We stepping managed a other of market the

for now I'll our Mark QX review of detailed more hand a it over to financials.

Mark Lee

Thanks, Kelly.

performance to continue given the as unique in business last on to more first time. discussion the meaningful quarter, comparison focus our our quarter, will to the compared benchmark environment believe remarks Forge’s this we to and play prior a at it's in quarter We economic

Forge’s revenue, less expenses million expenses transaction-based totaled the $XX.X revenues the total $XX.X quarter transaction-based to XXXX, from million In witnessed due volatility continuing $X.X $X.X million we from Total quarter. last the last of fee placement last first reached in quarter quarter. million

par from that the for X.X% upon, in QX, historical X.X% which transaction last volume conditions is to in million Kelly our the our norms. take while to $XXX.X with more overall touched rate QX, quarter Due quarter on market decreased increased to

at totaled decline cash of $XXX $XXX from end transfers. balances, driven the a million quarter. largely in was cash million spike QX, last down of by custodial The Forge

cash in slowed are spike, this there that have QX quarter significantly. However, following the indications early transfers

in funds last $X.X last assets rising up million QX, fees accounts cash under Ford's the Total the in last from were billion administration QX continued resulting billion essentially Fed from $X.X $XX.X offset versus of did quarter, quarter, custodial than total flat. in million to While more $XX.X X% at flat million balances in custody quarter. totaled custody decrease dropped, rate, increase was custody the by QX $XX.X the end

March. to of headcount decreased XXX end Total at the

last a compensation expense, proactive compared was million other improvement largely with million of $XX.X loss EBITDA decline reduction as in first quarter, net revenues. driven the quarter, $XX This expense in quarter to quarter. in loss cost slight saves. last million a quarter stop million $XX.X along than In compared the First by was adjusted improved the savings more to to offset $XX.X the loss

bonuses was the of last million we $X in cash quarter, to by quarter. in year-end, operating the had million due This of part Net net roughly last previewed $XX.X in activities activities for in million compared used the call. as cash to increase used was operating $X our annual after payment most

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

For we XXXX, quarter million modeling the estimate purposes. XXX EPS weighted second common for average of basic shares

state are and our markets we summary, the manage to cost of continuing the In monitor structure.

overall capital. Forge and to lowering to XXXX, committed is burn stewards of our in our being good

Kelly it brief hand we before for back I'll overview over questions. turn a market to it for

Kelly Rodrigues

Mark. Thanks,

strategic and goal. moving of the Chief insights, consumer know with and forward makes Technology Before asset to across private Ford world-class for services, technology, plan her continue further to Debra’s class to We joined market working financial for recently expertise addition the market experience I wanted leveraging the Board. look a and Officer Board. Deborah valuable extensive companies our leadership future. the we to Debra's our of strategic as our scale Toast to body initiatives long-term execute

to market moving on Now insights.

recessionary and collapse to by As did to in disruption published the QX Bank from investors other quarter investors in some both private fears, the avoided bank cascaded we stem swift an and the understand dislocation noted many as over government scenarios. a well the additional continued as was by interest possible the banking their cause and and Silicon SVB first closed exposure. temporary as the effects banking market signs Valley of seems in fallout of ripple price The The remained April ongoing as of our crisis showing activities action private update, some distraction concerns and that trading resilience. markets have increases to public worst-case despite issues But rate scrambled cautious. companies, regulators collapses,

we We're also may give that lag believe in since of to generally data noted we market started the any and publishing markets market markets. market Private has participants' the indications private added forges be signals update. signs bottom Forge could unique public monitoring the As ability of private rebound. identify to a

year. from XX% a held QX, market a last to valuation on As XX% of we quarters. private in both in the in and QX about XXXX closed April at down round from quarters spread to primary prices from steady several update, We published ‘XX slight bid-ask of QX, we narrowing our peak XX% the of trades the August end declines discount observed last of of down noted a after through steep averaging

first And back the in of two which rate at its saw refusal noted right last QX, we I to in years, the are the top to of level buy place shares highest as a breadth companies reach at investors compared in issuers QX in and increase the IOI activity which the Forge call, platform QX we on the of bids. the witnessed XX% in exercising

on and what interest far encouraged based see the in activity the about quarter. feel platform we we So, can on the so

the those can quarter exceed like expect the up in second We We market market sentiment QX. sum to results of this.

find the following night, market private private pick next to returns. optimistic we've investors do but public what said it first this We're investors insights catch market. but with market to position investors investors, they data helping this to market to market the their prepare inevitably want like be that before, when and need comes Just for we're want the And into about our with up. actionable reentry don't

capital to and prudent assets, this to cycle. momentum our continue leverage strongest management of team, technology, and we Forge, our our through build our manage At

come progress increasingly this While ahead, continue taken private we are control, solutions, access that market. many Thank factors of we macro-economic as that recognize data all to and our have of insights, competitive to trading and leverage the to you. and to navigate can capabilities participants business make and measured out support institutional advantage out a there will and our steps market investors deliver period

please to open can questions? Valerie, we

Operator

[Operator Instructions].

Your Devin comes first question JMP with Securities. from Ryan

Mike Falco

I fees Michael believe nice start But was in business. Obviously, the and Mark, This for number Good accounts on of to Devin. Falco step-up up. Hi. is took also afternoon. the on custodial provide another dynamics Wanted spike the Can custodial quarter just we spike you point and cash forward? cash sorting you how in bit drove what mentioned insight a of about be a little should this on thinking maybe in from that transfers maybe transfers. custody

Kelly Rodrigues

I let Devin. said platform meant we is, to Hey, answer witnessed in Kelly. question QX. to I'm cash, but the Forge's the I going to clarify What activity that I compared IOI one that is I QX wanted QX. say, made Mark point to comments. This about compared prepared in to on

for QX, the of reference you that, who those QX was So, to comparing QX. heard QX to not

in was that make XX% to just QX breadth crystal in of so a issuers QX increase And that over clear. the

was sorry, I'm this so, Mike or And Devin?

Mike Falco

This Mike. yes, is But, ahead. go

Kelly Rodrigues

right. All Mike. Go Okay. ahead,

Kelly Rodrigues

was press company, Mike, movements question in so terms of correct? just for of the your further the at looking cash detail

Mike Falco

That's correct.

Kelly Rodrigues

destination. if I transfers specifically out we I literally opposed I at trust component, to would we and end cash-burning financial as And other of institutions, investing is see Mike, but that from higher-yielding looking cash cash-in in during sorting, as cash increase specifically our out to because we equities. as transfers, referred So, see major didn't and see securities to know flows, and the going is what speculate those was We going we in be our simply the to cash cash-out perspective, a call company. we the flows that the don't is specifically don't think it visibility, QX,

ultimately actually moving the We of cash. where customers don't kind know their are

of and movement And we some month as is why to we that April. the I see limiting an toward of earlier, we end started QX. to noted think, net transfer, are is that's year, cash out completed as the we increase a in But saw description have there we transfers a did a significant of the So I in off so, this kind have our number right? see, drop

Mike Falco

the And factors helpful. a bit little the gears during I are little maybe That's on heading operating mentioned into sounds you positive And the to of that the Kelly, indicating Sure. banking it volumes maybe believe like stabilizing turmoil a several some bit industry there then that environment maybe XQ. that just shift is quarter. backdrop. impacted

may activity quantitative what of things activity are Is on through indicators can quarter. insights XQ halfway would kind underlie We key to here, about that in you provide that on is? progress any from rebound broader the are And should the watching trading date? a there the we I that be that how guess platform

Kelly Rodrigues

Yes.

or specific So, we KPIs metrics providing here. not are

right end, what we QX said, we towards a a on will than view little based that I see do QX. do have bit the As now

before. reference signals did three talked and we've I different Now, about these

And closed pricing just the or through spread so, beginning the of discounted really of seeing them from QX reiterate for bid-ask that the the end to six of last the narrowing being combination and QX. months, consistent

indicate does the market. flattening discounting that in So a of

those, one popped, year seen years. but these at highest. finally, then And XX% cause at in last those had numbers, the they numbers mentioned we the point, two We've roper coming is it in roper

I averaging around X%. somewhere in XXXX it think was

is make ones on signal us. of So, the this we're but the signals do that we at optimistically. we fact and those But are too. at say look insiders where clients customers at market, and forge that another interesting rate I'd calls the to our are a closely companies them buying the are those tracking sort back for But three we're relative are letting looking

Operator

question Repetto Your Piper Sandler. Rich from next with comes

Rich Repetto

it take why difficult Because and what Good having certainly, and changed the was, you to And but question that quarter, guess up. quarter do Kelly have is about guess that and talked I liquidity the right I I on where Is quarter third the in rebounded didn't the to morning, Kelly how seek was, Mark. or that it get liquidity from the that seen changed? a on take we've with is last was, Mark, I quarter fourth to it first this rate question guess volume what you first rebounded reason the parties. guess

Mark Lee

is Mark. Hi, Rich. This

on traits large So, we yes, external I a and normalized the out parties transactions. normally can were number the that revenues to, you Forge number we splitting QX norm to on and sellers head. happened basically on QX internally And we're mean, where was in called kind in transactions of hit it working buyers we increase looking the what What cross nor and the always there was of third network. out between in those that trades with complete

we trade partner activity the third from levels outside use we'll customers. in And time, in return parties time of kind complete unusual to QX And saw the of QX our in of third for benefit with to outside our parties of an to was a a and normalized increase more trades.

Rich Repetto

assuming going address that could guess itself could forward, I if Okay. I'm -- And you that will -- likely maintain

Mark Lee

Rich, up and pretty and that We down we trading quarter or prior are of raising XXXX Yeah. year, the we are a the had would buying not situational blip. on going overall relatively rate interest change over we're and of see suggesting XXXX, looked year I given various speaking, And rates kind in you any blended selling would name. the kind that a a common when in not X.X% out and particular pretty say for based of it take prices. the so right at year random, and any you looked year it's that it's one of consistent was broadly names at we quarters,

dropping not are prices. We

the oriented, we and actual the in And of retail that a oriented, as the use of said business more will given third take parties. we're of quarter before, rate and institutional more be doing, mix blend be whether or block any

the are quarter, any drive terms take our trying take can relatively that given variables multiple limit in is that I of but view stable. is think there rates overall we So, rate share in to

Rich Repetto

whether crisis predict capital now, have the in metrics the you the the maybe even are sort -- I'm like that though like, imply about, then on the how Was how quarter. headwind did of sort is And take of tied follow-up one the metrics, do things industry-wide Thank that And, the quick when through correlated Kelly. Okay. they of you to soon turn? activity. you. did And markets how just long these I quarter? are trying sort volumes, banking it's sort they, but see to did some does it's is, talking in the last healed with you progressed you turn, fighting it banking how that are an And of guess, how see that impact improvements

Kelly Rodrigues

that me The and and into But we we delayed things time. watching pipeline with quarter, was, which based the they to it's and do and ultimately pipeline disrupted, let question, in happened came hard banking QX impact for installed-trades, just So, the start quantify that. period in way some close. on we the activity emerge it know to of first the the continue really of half second

affected. exact was were what could that period We state didn't there it. for or the checking whether was number be to don't had to at an it money prepare looking a and the of where there and certainly everybody they much move, how But going brakes move

So, there were kind everybody were are well. everybody we right bank, a we as feel good about But watching right like We there of day-to-day. that else, the factors sector number now. it watching of is like bank where pretty else now regional broader

in long it Now of for takes some metrics deliver. how of terms these to

We seeing correlation tough have is waters discounts the to that a since months probably a to all predict And it's market. the sustained a for right price in going have given right on are public now, to the really it. the and few are factors kind the indication this, little market will positive I reached years say close get six discounts a of bit that now, seen because disrupted. it's we uncharted been,

believe some them we say, that, so, markets. will up to now. similarly I'd we markets for It the fully caught react And time. public private I'd while takes a we said say, just the

should in. watching everybody else come people And back so, would macroeconomic which other like indicate factors, that, we are

want know that company, just double-click bit that's of that point other the on the performance one volume. little performance more data I interesting and on the says is roper numbers, because the the And buyers numbers. ultimate you Because detailed people really Roper companies more data But that, trigger more a who to indications of else. the the look, see who for more information I'd than say liquidity is in anybody have here

that elevated QX. encouraging. of that one fact XX% be buybacks to those need seen buying keep that since watching company We coming and they're report and rich we'll that at buybacks come the this is haven't like XXXX. to on back out sure And to But we levels

watching carefully. it we're So,

Kelly Rodrigues

I Rich. I mean, public year. thus also, volatile choppy And markets the have lows you and far right? markets, add process more of off Hey, in the as their XXXX integrating it's or would if talk somewhat come difficult of liquid less and private end price at look is we from takes the the just markets public about markets. perhaps towards of alternative information longer, it in assets That discovery kind

But their that improve. that indication the stabilization the we're to private hopefully, will provides markets started off perhaps bottoms seeing that hopefully that the the markets sign in trade the an come things public and valuations have of

Rich Repetto

thank Thanks, very Very much. you. it. Got helpful,

Operator

question comes Owen Lau from next Your with Oppenheimer.

Owen Lau

kind Good this think helpful. about Do the Thanks. thank still you Could be on give this my be headcount more XXX afternoon, Any would please expect year? expectation talk us taking an and color employees? I or from, for flat question. you to of you update

Mark Lee

in we're going and see to with kind headcount happening a goal overall under Look, the question. we're of there's posture. to freeze. of we headcount our flat. attrition, our still volume maintaining Thanks, revenues. what but that backfilling, at and maintain how we're operating the a operating there's continue are count point, But to we still still Hi, Owen. this year Obviously, Obviously, evolves for credit flathead overall, terms monitor

Owen Lau

rate different, other it. index, manager or thanks? private market role it a to there? say Got And to from monetize early helpful. the this have to, licensing on of it's then how market competing product private any down you creating plan like to as index index, still too an out That’s exchange is Do

Kelly Rodrigues

the at very jump let start Forge. Well, and I'll have strategic based most priority He is here I'm and of And last on and significant to years, as -- this, last announced which I are start in. I'll and for market a start me others close the Kelly. sat let us couple back funding this saying that largely rounds. launches I'll for Mark these by private to indexes, watched let both differentiator we been going

fundamentally put lag ones companies a the that in and by value out points, as I reflecting in believed particularly data that particularly of it volatility goes ourselves those funds true in seen backgrounds and are We space. both Mark have marks kind particularly And are effect these at, asset have does most stale the what participants the of what and have it's terms demonstrated. fund management does trade demonstrates of have are market and the traded this that down

are So, and in excited we about the that the U.S. data companies the represent marks filling really around gap most actively-traded

we So, stack up competitively. we about, good really feel how

going the our relates jump want and future, here views forward. you it As in options to Mark, might to about

Mark Lee

thanks the Owen, for question.

said, both Kelly are about. super that is an this we excited As just area

I is with Forge $XX a very domestic in indices are really quick numbers XX% There passive lead that managed public for product. There the the I background, market being position which really in unique with some indices And over context, employ are market, think of just about a in public familiar people trillion being to used. think is is equity XXXX strategy. markets. funds, money this of

and know major NASDAQ, familiar know the the FTSE so to how public we side. and are Russell, are So, I important they markets all we S&P like on think we indices XXX the with and

are that on there. based I are on said, you Kelly are some that indices how mean, mean, there are that last funding the mentioned indices there As round. -- based are out ones I

index, XX you you the compose by names at look them. and look supported if that And index, at market our

the that is less of names how months the or of a information, versus three at underlying on information of longer and dated information less, calculate returns, are we XX in that our XXX% information XX% and months If terms on or based or index data is to the relevant look you are less. is all months using based the the construct XX

at XX the the have and names round, look using funding you or a on year. funding positive it almost indices are they round names If those in of returns you wasn't then one and XX% to funding data, that of of same excess know And when round move showed in you And other looked case at you XXXX. just the XXXX. some that base

and are your the and takeaway important mean, So, we think to And most the mean, a trying I think Forge point different I I out to of we the of the the stress second is index index products. value property just market intellectual massive is. right? relevant question, how it's private putting opportunity, part

think guys of kind large more are very familiar companies. of these some the I of familiar very profitability you index with

a highly high-margin, tremendous there business. is We So, opportunity. scalable it's think

private I of and market think advantage door in how the are Kelly the made to a we take think point managed well-positioned of we space, passively that. talking I this about funds to opens think

And and so, more point we in any Owen. time, time. at we really excited the have place in we don't right this are provide at we right think But the are details to

Operator

Worthington Your comes next with JP Morgan. from question Ken

Michael Cho

in competitive of seeing seeing, or rollouts you of to if and Are your and Mark, for investments some it's of area to, then Michael volatility any also which well, I Cho perspective? are on going changes Thanks. in mean, afternoon. given you Kelly, volumes and time kind you is uncomfortable point there that be in kind a on aggressive from and hiring fact on would a as I for one, an two, be, are be that well? a, trough we from now? maybe Good unfreezing giving just products touch, or volumes. transaction Ken. just been into you This ongoing competition would Forge And terms of press guess passing look I is beyond? QX as would more wanted and terms comments I guess, just at

Kelly Rodrigues

competitors viewed with as say our stage the talked difficulty market me We've let clearly our of challenged this monitoring competition. terms anybody, required to of moment a start kind capital I'd previously for we've to the think think is of we we as own market in global Well, our are invest in at private clearly Okay. raise market. capital We're this strategy. that part the and of about important competition the raising

around we're infrastructure and looking competitors. looking at our So, at investments our

will seen announcements seen And recently, our current that while concerns making we data prevail. and we us some capital in capital us space. this time difficult We in custody have come expect of participants broader that times investments consolidation out scale believe and help just sheet haven't we're for a the few market anything do We and and the the during because matter. institutions infrastructure It's overly. natural market balance

So, we feel like we're in a really good place there.

is market data. needs focused just that really terms the announcement of We expand. benefit facet one the on think would that We index the the data. other future we're around liquidity would and and investments, of In data market think

next the bore, investment transparency asking and years in that underway, thought more to people gotten XXXX were would and me when were you liquidity of the more now. market. full the fact, tech I that key creating more right down Had then liquid of see we're we standardization looked times and seeing like market three In that a in was to what we five said information about

So, you're of right still now a information. and for effect market seeing need illiquid more an the

own tech allow more at infrastructure data investment to and markets. that us continued globally we're the of our into to composition. think revenue participants standardization in a in participate looking is I translates And for what private around with that,

component data recurring data us. subscriptions important to of and The really are

that institutional into coming now. it wanting focused institutions previously investors to here up. roadshow, enter on stay in on disruption seen We've to and the for very time. going weren't half where first to the are I we're continue some that prices So, are market up and private year everyone's the ago, mentioned this a lining space see the that a the end where on to

and looking probably out signals and in continued But point I'd data are infrastructure more really on aggressive the sit technology so, right I'd distribution building now. say, we data say, for And the our about being and going excited where for institutions forward, back globally. data we our platform, to of standardizing

Michael Cho

our to [indiscernible] Thank quit And switch of of that, anything adjusted That's just in terms of just is to then expenses. is first outside color. terms kind comp And then total in just is I normalized the and out is, And I maybe anything great. comp? you to guess, guess of on we expenses well. a at one that want saw head there gears have number should Okay, for in quickly call one .com? as Thanks. great. quarter we

Mark Lee

Hold on.

your you think first part of you if What repeat but did first comp the it the expenses, I question was through part. part didn't it. the do comp with not question? It your think could had I to say come of before

Michael Cho

So, stock just about normalized comp I as and was referenced comp, I had asking normalized well.

adjusted in comp well. then stock Thanks. number total same kind normalized So as with and should of of normalized XQ expense have is we a comp kind

Kelly Rodrigues

Okay.

in Mark I'm going had mentioned that we bonus comp the gonna annual number So, let he'd address number. QX QX. to that I'm I our know

if improvement volumes change our on in other a And we market the just be that get staffing. want pipeline, I we and that's what to headcount the make at any So, would was to I headcount turn in the say, that that around was our I'll the one before I'd point would that. platform. were over. to to it going asked signals question direction? the clearly, go of our show are watching let it him you in what But into recovery cause translating from sustained And make and end direction the previous

discipline a is here, on we we to had XXXX. things There the in seek around have practice do ton really headcount focused and we to we need that can achieve that really the build burn being to and with

that come unless see that not So, going is position we pipeline our improving. real, are indications sustained we off to in

to gets heard comp relating everybody Mark. turn So, and I want on to make sure I'll the over call question by that QX the to

Mark Lee

Hey, Michael.

stock exclude if compensation, represents look it salaries comp number. incentive and good and fairly you normalized is at compensation benefits, you exclude a baseline. mean, baseline QX So you and a wages if I

small announced we making we the took year. end QX, the in strategic some of reserve recall at that that reductions we for you As a were

we a baseline. benefits sense, so, those is in And And QX. QX good that realized in

I and and though tech in of thing communications technology is caution area, and and up our our one wages particularly employ technology a the employees the salaries. from separate consultants our in mix we Now that, and contractors show would line, consultant contractors,

we contractors think baseline rows more consultants, operating consultants So, some If interplay you of forth a might to add and those the tech at good we of or including in for then income and employees right? to contractors expenses. people versa, related have employees you across less two in see flip than were might QX to at total an a and two I of yes, of times back by think probably are If increase And see --or line, our comp XX% decrease rows. But and you. between vice expense is offset about were the costs different right? more those wages add or statement, there I comps stock the that, is

represents, more part Now, that yes, And is the was stock answer the your a question rate. compensation. second normalized QX run of about

back about one in the had That one forward this in and related If fact that you in in XXXX, because started month month we go-public to QX. and QX, RSU retention had three compensation had of explained, amortization. transaction months QX, had recall provided stock accelerated to we amortize in guidance

that first of fully used now accelerated tranches now portion two all retention the been So, of that amortized. has that orders the have all

for new what left approve changes company. now grants QX that grant absent from new would grants recapture runway from or compensation, really in you're the stock a rate our either so or stock with people any is terminated who normalized are leave And stock

Michael Cho

Okay. Great. much. Thank you, so

Operator

no There time. questions at are further this

Kelly Rodrigues

time Thank over the We next the all on appreciate forward look of Mallory. you, months road. your we to and coming the conversations of couple

Mark Lee

Thank you, Mallory.

end can call. You the

Operator

for you joining. Thank call. conference today's concludes that gentlemen, and Ladies

now disconnect. You may

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