FRGE - Earnings call transcript Q4 2023 | Forge Global Holdings, Inc.

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

Operator

Good afternoon. My name is Krista, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Forge's Global Fourth Quarter and Full Year 2023 Financial Results Conference Call. On today's Forge Global's call will be Kelly Rodriques, Chief Executive Officer; Mark Lee, Chief Financial Officer; and Lindsay Riddell, Executive Vice President of Corporate Marketing and Communications; and Dominic Paschel, Senior Vice President of Finance and Investor Relations. [Operator Instructions]. you. Thank now over will Lindsay the turn I to conference Riddell. And Ms. may begin you your Riddell, conference.

Lindsay Riddell

and all XXXX thank today Krista, full bit you, Thank you recap we Fourth call be the and longer This as for for Quarter Full Call. Year Earnings year. will a Forge's us joining

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

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

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

when forward-looking performance. update that we reminder, measures measures, In a are are will financial As company's adjusted our presentation believe statements. discussing which today, we the are to required otherwise meaningful be not our unless noted, we evaluating non-GAAP

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

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

Kelly Rodriques

index, ran the investable the volatility a dive institutional year, of to Lindsay the strategically first share some QX benchmark Liquidity meaningful And delivered and thanks market invested capabilities Mark bounced of and tens for turning on meeting brief and Thank that growth year. even successes, bottom joining highlights for Dom, with as targets all our we XXXX, persisted we business we're order finish you, perspective throughout seeing and indexes, data on Forge for we And in first-of-its-kind the the a last and proud to and that annual financials. over our lean and of it some deeper our future, lowering to headcount proprietary on QX XXXX by burn positions the I'll in for as our in focus operational market. to followed reports our market trading our the proprietary for keeping I'm results around through advance key our and business. insight us. before we I'll say Private hiring our made first institutional what technology We next-generation expanding our powerful performance our key clients, and with we a and and to data with Forge to developed important cash are focused Forge flat efficiency, which business moves thousands first the tools. who the winning to and vision the scalable Market building invest leadership. announced marking technology Market We product turn our invested a platform, Index, the the Forge flexible Private and Amid of XXXX and first tested next-generation all on private customers, book in trading automated for on products, one We our a and experts combining for development, future data two trading Forge's Forge Index. our platform. and with profitability.Forge our path things: category platform Pro, accelerating in X in data availability global market

So highlights QX consecutive the In quarter, I'll grew and year. continued, slow the for now the turn fourth revenue financial to for the we recovery market third for and period.

of last revenue to less rose from and million QX transaction-based X% XXXX expenses $XX.X XX% quarter Forge's $XX.X trough up million, $XX.X from up total million.

dragged first behind of total up made to worst custodial were under total from year, million. XX% million recovery grew the are is expenses, transaction-based was revenue XXXX ago. administration the marginally the we X% fees million, a less Meanwhile, the $XX.X optimistic trading on environment $XX.X Forge's meaningful XXXX, half the in up in a in of For assets volumes the us. although custody year $XX Ahead market $XX.X and up macroeconomic to the billion. year difference And side, that

our anticipate we'll in of improvements business the and again marketplace reverse market cyclical trading and eventually trend modest from see as revenue custody diversified the our to that custody includes respectively. strength revenue. reflect the business, which continues year We the and countercyclical revenue Our our streams will outpace model, business improve,

then the outlook. and and Forge's more business notable turn in fourth return I'll it to detail, market some to Now annual over quarter Mark I'll with and about highlights talk financials

Mark Lee

Thanks, Kelly.

therefore, presentations. period or Fee And describes and data Marketplace have Before this Revenue characterizing we to from revenue. called included.We better aspects the in investors Revenue We to underlying Marketplace with revenue revenue of included types the private this included that revenue assumptions name previously solutions to of remains making any category. order I name revenue more this by therein the would products category in Fee better change comparable as Placement in adjusted revenue, is Revenue. changed useful Placement not methodology, this of the renamed believe of category to Marketplace otherwise prior types fees, and fees of placement have our align Revenue I includes was note company earned Revenue our start, which subscription

And from million Marketplace up $XX.X expenses, last in less Forge's to quarter less million, with Total $X.X transaction-based take fourth million X% that, so increased while of quarter. quarter $XXX Transaction from net to last in XX% rose $XX.X revenue reached from X% our quarter. to overall expenses QX. million volume total the X% QX, last $XXX up from XXXX, million transaction-based $X rate million, revenues, in last increased X.X% quarter

higher of rate the take size trading in fluctuates turnover. to reminder, were cost dynamics. increased factors order Total net long X% such the believe trades, standardization, be will million as offset administration in As issuer-specific due fees volumes custodial lower as rate million supply declines by and type and and a to In $XX.X down demand $XX.X net we automation quarter. take run, QX last efficiency, and from many

on As custodial last total we revenues. impact noted we fully call, expect our to interest XXXX lower in rates

totaled sorting, Forge's end due $XXX from was decrease in down QX, has which balances the at custodial from during last $XXX balances pace of to QX The quarter. cash million million in quarters. largely slowed cash the in cash previous

an $X.X is accounts $X occur yet from monitor up sign, to this have increased high are closely million Total rate at last rates million as quarter-over-quarter approximately cuts custody this While to to and X% quarter. continue QX levels. still in encouraging and we

last to $XX.X quarter. under custody the end increased Assets at of billion $XX.X QX billion from

used are noncash and was as matters. in Adjusted net measure costs used $X.X vast by Fourth $XX.X is legal reminder, last the accounts accounts of explained in of and activities compared of our Custody In CaaS a fair in loss net matters. adjusted the our at loss third million Net Service. greater with $XX.X compared EBITDA quarter increased was operating our quarter. $X.X million to of incurred call in in million operating loss the the or fourth compared what driver to $XX in value results. million a $XX.X both connection loss in $X.X EBITDA connection But from to custody self-directed of our difference of million is loss change total warrant activities quarter. largely a legal driven This a largely of liabilities QX million fees was key quarter in derived the cash quarter. custody This accounts. net cash million in we by the $X.X a quarter, from cash change majority costs million last revenues, administration As main operating account core with to

quarter our was which of As at driven $XXX.X for approximately total last the cash assets $XXX.X as as the compared deposits impact a as by excludes term our balance This million partially this at and remainder current cash our both cash quarter. QX. disbursements given extra the term to stood the million offset QX strength in million. in $X.X third made million classified QX reminder, of had the payroll at of end XXXX highlighting sheet. net and quarter, stands the Including biweekly capital ended equivalents cash, cycle, severance The by restricted of increase. the payments year, deposits Cash, $XXX.X these in of settlements, other and working other continued of majority the $X.X million an pay drove

totaled constant $XX.X trading from XXXX of a total in and take year administration stayed million million, revenue the XXXX, million to of year Total a revenues XXXX between revenues, at our year. from billion revenue significant slightly was million, rate $X.X fees. recap ago. The expenses, in $XX.X marketplace There to compared down XX% volume X.X%. Now Forge's In less change transaction-based transaction-based last down average to was net $XXX fiscal was up XXXX $XX.X XXXX. year full marketplace less the for with million custodial XXXX. $XX.X mix expenses, portfolio

banking market geopolitical rate year-over-year continued crisis results reflected the increases, a While which included XXXX, during additional and conditions unrest. difficult

up from accounts $X.X XXXX business $XX XXXX. We the in of The administration custodial Total increased custody accounts to $XX.X from million in our custody in growth steady consistent seen CaaS million Service a Marketplace million as our in improvement are XXXX. from fees QX since XX% and were year-over-year by came or nonetheless Total million. business. encouraged $X.X to

at from of down XXXX, at cash balances totaled sorting. by Forge's end million of XXXX. cash million driven This custodial $XXX $XXX was the end largely the

end custody billion at to from Assets ended year-over-year under XXXX up of $XX.X X% the XXXX. billion $XX.X

growth higher driver total throughout revenues. XXXX, in and rates the fees in explained the custody fees. been These have main to cash interest we've resulted administration XXXX As higher

net an to into from our $XXX.X included charge administration rates, that in as lower compared in The million $XX.X costs XXXX, As revenue. going note million Please in Full resulting year adjusted last included XXXX a the head loss total significant improvement cash capitalized XXXX. adjusted related balances XXXX, transaction year XXXX loss $XX.X cash loss with of of disclosed supplemental in of the public we EBITDA million in $XX.X year. in in Fiscal lower investor fees net custody to was million $X.X connection $XX.X in generate an lower expect of $X.X based matters. we on million was Forge and previously the and XXXX, loss legal interest lower to million XX-K. the software EBITDA mentioned XXXX million onetime amount

continued hires drive XXXX, key During initiatives. to to strategic Forges make our

As net our described down million bringing keeping Net cash tight while improvement activities discipline, XXXX. in in in million and used head $XX.X Kelly, cost of maintaining $XX.X year, operating compared by total million a activities to in cash total was earlier the $XX.X spend. used operating count flat

insurance, including the cost real incentive million board, that the of $XX across consolidation. public, in for in spend, going compensation, annual to professional Forge marketing Significant made corporate fees related in and Keep estate pays costs quarter. mind timing out first saves bonuses flows cash Excluding the liability XXXX company were

the stayed XXXX. at Our the XXX total relatively head flat Forge Europe year XXX count, end from including at in of

Forge Europe with continues year-end. to at X people staff up

weighted We housekeeping about shares XXX very overall and a basic purposes, loss shares used diluted share of we million average shares.For million position. hiring while our shares XX, modeling continue in estimate XXXX, our for common XXXX, have freeze. our to compute first weighted number fully outstanding net costs managing count average and the to maintained From XXX was be loss disciplined quarter million a of December basic as was XXX of perspective, EPS

continue and to We and still are of Forge expenses examples our The Forge traction. services. on managing platform, Forge's Pro, Index our focus just Forge continue to investing our recent while build Europe priorities launch of products strategic the Private most in improve to Market the top and

we're to are feeling to Entering are Kelly year we cash starting private As our and the this. to footing, stewards XXXX continue to burn of for capital, expand that shareholders' lower in on our it over optimistic I'll prospects as their regain committed XXXX, see further did we markets the early in to hand about we signs overall ahead. the XXXX. our

Kelly Rodriques

of XXXX, in a At about Mark. to win this how in the market. talked position Thanks, ourselves beginning put we to

Forge on week the will Importantly, the and towards tie expose market platform continuing with we market Forge data best positioned goal. announced step the so. that last more in our to participants data focused expertise, change and more we also market's to the evolution that drive public engage class. to intend and next-generation believe and Pro, them this deeply Forge high-quality build a believe to our represents do ground tech, win we we that the them Forge in to our It to definitive to We the are that institutional to stake which private asset the

data, as identified on closed meaningfully we The have to key And year XXXX. company the differentiator We matched emerging a this win us. are people XX% the data, is Because likely more building access Forge's and execution. our also to this at moves than a to the commitment also class. long-term to I've data key but engage a became match to relationships, over more for high and rate, that quality of of what quality made data clear asset last in we they is trades strategic our scale more of in trades

we through prioritizing XXXX, million data customers our we of million, terms positive we've increased relationships maximizing and products that These transition, and XXXX. adoption platform. $X.X this we over strategy, drive in lifetime start are seen to in stickier So exposure our to aimed believe value.Reflecting changes with will year $X.X And XXXX and mean an to signals in changes slightly revenue bookings near-term higher were data in adoption data total from up at of data our creating in of made number made our expand improvements to institutional acquisition to our exposed how our product bring and we and investors out this we license we we position innovations of including Through IOIs to in we customers to as And to how we continue our invest many Europe issuers in quickly talent pursue Forge to leadership steps new market. effectively functions, scaled right significant to talent, from and in continue the engage pricing BaFin team build Germany. the made data category, the XXXX. the

While long leadership XXXX, company made spread XX% has year-to-date through There we and February interest around it a looking you Reading number time. that Private that our with returning more this headlines, we our outperformers sell-side growing Buy-side but X indications signals X is in we we're year. in haven't Market turned growing issuers settled and with on of emerge technology, market for under our our for in nearly a names. a from hoped tell I reengage, buyers pay index But the up more down Today, bid-ask indications The we Index emerge recovery we platform meaningful things jumped energy for IPO or an Forge the years in new had felt outweighed to meaningfully stronger, believe can opens confidence, not a market view, market February. and first amongst positive optimism the in a closely. and month-to-month up. category as there dividends this there's IPO whether that interest pipeline and few this efficient of of monitoring quarter are for time will are the year. we the progress also data XXXX, on are

and momentum buy-side is increased a building, and we're in seeing we're the seeing what pipeline. growing activity market now, Given

may warned questions. While we're about the not we'll I've up us, winter, for market out of or you be every the that into comes linear as the up for recovery feeling it right spring. Thank and quarter the long joining open optimistic this

Operator

from JMP. the comes first of from Your Ryan Instructions] Devin [Operator question line Citizens

Devin Ryan

back been, the talk it's really the in just and median third from, hit February, Kelly, the First were bid-ask of there at XXXX, to the down in kind then and one, improvement in coming just in spreads. And to think, XX% you've the about of I periods XXXX. want some you the sub-XX% I provided, seen you going I of And end sub-X%. guys data has XX.X% think, some strong you quarter from have on

to do down So XX.X% see just is, and to question. -- that that And engine want for like improvement it think and up see of time does need the rev we And X last here, indicates mid-single-digit to of two further get to about to back the one slow back the range? then like it's reengage? what people of Do given into part that's kind we means really years. part particularly the take kind been need

And revenues terms then in look a mind guys' accelerating. in so said like what lag are get coming deals and closing to reengaging from where point period are to way, does that actually maybe or that in different of people and a your

Kelly Rodriques

Yes.

So I market normal I'll of the range, I an happen zone normal data, that the the feel say, this the again. spreads. by at XXXX And back say can to trading got true is when to and looking we're you've XX%, meet. of a start one, I'd spreads extraordinary I'll refers two. And the reasonable and can to And sellers in X% buyers sort look talking starts look I been of and bid-ask take the about think interesting We've for spreads is like moment let back question part kind part X your which in really years. XXXX, in on Mark what it's with When market. bid-ask

the take view let And it. out zone how the in starts want to -- revenue that about probably feel forward-looking point right is So I look to more last a I'd like I'll question a now, X seen we've second healthy in in Mark what the this years. quickly just more is will we than we're of accelerate. that say market

So we're that. excited about pretty

Mark Lee

the thanks Yes. Devin, question. for

a kind you spreads even me and we you XXXX. let bit a give the to XX% out, of lengthy seen between So back X% fluctuating of had of mean a little kind as going I response. point

way our spreads spreads think where the direct better. are broaden so period. think mean the share and fair indicated, from I would change are in. XX% obviously, they and heading that kind flow pretty increase kind leading I as And we we the it's now more you spreads, is to offers offers, of are to and out number where But the versus indicators, volume say, about recent Kelly the and answer the IOIs we with our saw the a And were. bids with now of bids tighter we they're that's offers. in the and today feel of of I where kind good bids the ship X big I of ability mean the

sellers years. and X during last buyers X/X You the remember, X/X

I the provide trading spread. end, And Forge these trade the high improvement valuation also seeing to XX% our But and these But other think are on guys and to the then trading outlook. you decile discount improvement the numbers those we're PMU come discount seeing But a top of XX% look these whereas bid in round. kind their from of seen to index we're private there, Forge the before. at we indicators of positive an XX% a investment the Kelly our and as Index But you are right? to at online The are the all companies are offers premium round. so better. last see, and performance, companies, our therefore turned if last go getting can that decile the the median tubing and at the we're -- kind over lagging valuation forge.com a you Private bottom last at referred, are XXXX. round, Market what you trading we've And track numbers of indicators,

to XXXX. Market markets year-to-date our XXXX, XX% through change, that's big Force well the perform. up the down you Private Index in X% how index So was If now public right? recall, is And contrast in a

we turn investing So another to foundation this that public gap how still valuations of about perhaps, be could valuations vintage forms perspective. an reason we're private kind company this all good is the And together that private in in out between the year from forward. fact, strong for of we and to company think a very company going market think feeling feel

Devin Ryan

Got it.

color. Detailed there, Okay. answer great

Just a quick follow-up, quick. I hopefully guess,

And continued that the the intertwined be of that kind is kind trying that's Pro, of see the Or experience of better drill what into little just creating growing for specifically around these something something that's means of announcement rollout to to marketed? you just the to just going a offerings great down pie, be opportunities to of with some data is drive that's recent Just bit of monetization so and there's to cross activity? with platform a I'd kind that Forge going come around opportunity? think And and this think and love how guys. about direct subscription to going is So then about a the or new more this this there? growth in more the differentiation to

Kelly Rodriques

working of while. so of we a Mark this us. subscription-based will sort things. really color or have combination pretty give Yes. big our a And far. I look guess represents business of on been about for powerful clearly, we traction model, I've data-driven for two on talking it's little really for few been a it revenues bit Look, when deal and a years, at a

pricing automated through First run the about the data and that you obviously of when platform. fact talked quality and the a But all, of can of we we we platform quality IOIs where substantiate verify the point, up we've major up not with which for pretty a this access interest to capabilities to the and combine of is data global else anyone some opened our moment. trading this that book,

path the model. of a Now continuing we this along subscription-based see

but that sell data product, So it's of institutions another think targeting dimension trade. we of how really recurring as revenue a it

about changer obviously, the take sort my benefits it excited sort us. have and that there. the this. Mark, Forge speak quality, earlier where the see of I'll we order for pretty we're we Mark belief days. early combination I'll book trading, data game data is But to network but still are, of think let It's about So And global a effect. from relationship and in the between you that points and that let of we

Mark Lee

Yes.

me Let that. on bit, little a expand Devin,

So I we fund mean, data, all know Intelligence, we waterfall order when mutual could data, Forge see out our models, VWAP, rolled book, trading people Firmographic information.

So that was kind of version X.X.

Now think about and for we IOI our Forge if to -- real-time important order order our book. customers the because full visibility live towards talk to management you visibility global execution Pro, step It is gives really first our this customers. to it's ability capabilities input trading is their with and specifically technology our institutional

can track the And them and full in can status. so institutional they It put order depth they gives orders, their view. style market of

improving automation the really the entire the of really this step the and kind we experience that customer of think first of is process. So

as our Market clients index of can and advantage of products kind and the that, looking they this see the segments trading referring where business, business bundle talk about lot, see the there's opportunity. trading think heard a break a think three, can kind down data the of we we course, evolution and investable our you've it the distinct so have X talked of price. Index, that subscriptions that provide. number us we're I the Number And are now of about services index. we've where specifically we this getting you Forge information we also And about data lot trading We've data, full into to a that we Forge those clients, really our take drive two, services intelligence. right, our to institutional basket talked and of Private to Forge then where are we not that for

X in categories. So think our about we data different those world

Operator

question next from line Piper Patrick of Your from Stanley. Moley comes the

Patrick Moley

of that So now, had identified think, $X I you I you that billion. one was the think few looking in went back years was when XXXX things TAM, public, the around a

$X could that billion by around thought You grow XXXX. to

obviously, XXXX? that billion So wondering still hit think bit if think we but XXXX I here, reasonable kind get cyclical we of for spring-loaded is of things that the downturn kind mean, that And of see do a the some a so, that indicate acceleration. you market, since you that just little we've of in would an could still $X are if kind we've uptick do a TAM what if maybe seen of

Mark Lee

So I you here's probably $X we refresh think XXXX, have back at TAM across our trillion across think But we'll Back it, we right. and about X,XXX the companies of come to how cap. think in market world directly. maybe that kind I more kind with of looked roughly with private a

unicorns have a this XXXX, unicorns. now cap of these look at hit think I point, you Obviously, the snag kind market of at what's number that that happened since there's roughly still in X years. world. But thesis, mean, companies I run, right? the innovative in we whole again, believe in These that the fundamentally last are the the [indiscernible] most still that long our

Asia. new unicorns Europe a see emerge in continue We're for in We activity of and lot globally, seeing to right?

think thesis the I our so same. And remains

Anything $X recent on based to the we as the TAM, down of talked we've think number XXXX. to I Kelly? kind about that think, you billion information. thesis in that an billion, updated our have remains add that, dropped fundamental back same Our want But to the we $X most I

Kelly Rodriques

no. No,

private We cycle while opportunities a that felt others while the there's lag make around the making stay maybe bit a that I remaining. believed turn we're investments world see companies some with a this we macro attractive we in will longer-term X that to or think longer. a now, X-year couldn't of continue to Obviously, makes important pretty it this see emerging for time. And trend a trends very still and But large Europe. for we in there. the

really and data. looking proud reputation what in 'XX of right tech of right 'XX and the back So out we've kind the built come we're on and to this kind with of

we're So excited.

Mark Lee

of our difficulty think thing would I Patrick, in last think affected everybody the disproportionately I space, I the the affected which add has this think one competitors. I X really years, is,

that going this I after competitive of We the years, believed we that you'll players years a almost enough, the players. convinced X to this will in conviction see think we're for actually consolidation think X business space. oddly you'll So And especially stronger -- to out the see eventually come you'll in kind happen, few belief. and still and be in see other start which always our position the that a there's a relative into experience I that. to we've last increased going fundamentally, to major last And is start XXXX of that believe, has

Patrick Moley

right. Great job think did keeping expenses, And you If just color. a count All in head Great. the XXXX. about flat good follow-up. maybe we a

heard maybe think to I effect, that to were I freeze in but Europe. keep that say you more hire of look hiring people in you indicated kind expecting you Mark that could

headcount to So in XXXX maybe versus that can about look Europe you like and U.S. like growth looks business? expect you just what the maybe talk what in then

Mark Lee

in people to in -- while at keep at total from X XX the growth at people the Europe. our mean, numbers Europe. sorry, flat as Patrick, said, our to to shared, that I basically of two I and we the managed funded 'XX in we're to Europe, headcount. flat end which of still X end And of in to continuing and invest at X went We invest maintaining continuing I the people of end headcount end headcount Yes. the people fact, 'XX basically grow

the kind like back Estera to mean We rate I that And very the experience you with market. big Waystar. to can cuts from the feel off of come are very the mean, we so different a the a glimmer Obviously, we're the market. as and We Rubrik, maybe that's about view it recent Stripe, XXXX start the people of Revit year. do for being IPOs XXXX. of right? to commentary, think as sounds good talked right? see we lot are half starting can IPOs Other coming, know starting Fanatics, is in year second about, names our of still, Platt, tell I positive

that down IPO of of when the having things back, kind that I to all a And of those round, expanding. capital private take reset coming think I help. do they're is companies is raising even will great I pace So think think

focus been products rolling costs and business we've continuing line investing keeping our out reduce to on while our our to So that new manage top our lean in as very between doing, growth. through is balance burn

Operator

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

Alex Kramm

the lot hoping more up and color the following little on side, already I've on you're of Maybe gave like of a of terms days I discussed, just look, mean, mean good trading a I in be bit spreads, in can the more we're a quarter. on that IOIs seeing what things cetera. two specific. we But you couple et

quarter the hoping little mean, I some you're volumes the if you numbers, least maybe that to be how we're again, first of can at of maybe in so specific seeing, terms directionally a you don't with far almost the want quarter? So more magnitude bit is directionally in over. exact trending or give

Kelly Rodriques

made benefited providing is we use custody are decision we've the environment that the in was while think see around away in to starting interest stay the some rate we our a that color, there, terms we detailed an I improve, market the shift. from which seeing business, deliberate pretty of some I and indication and to seeing we're ways from are I

move continuing we'd that the to through the it the And I'll variability level end there the point caution it And business.I'd say I recovery. about say described next Mark that in regarding numbers successive it's saw want and the to of between QX the think quarter it up see time. we're year. has could leave right what we us into be I at continued the we're at the clear marketplace a the we the recover of in at reiterate only previous volume XXXX not in quarters, pipeline that growth to continues You part we pipeline But being and that in we're where the QX, see that and to I'd I in in have can't in quarters one. around say to going in we as terms the in certain in the is where being the every confident past above optimistic pipeline market the -- very from commit about and QX. works as year talked improved. talk rather quarter-over-quarter of I'd of the how is first a or trend

Mark Lee

to and regain to always start Alex, time the there's sentiment people our and to the leading lag there's from these FIO conversations, time prior as confidence in improvement invest window add PMU but know XX-day tracking That's I XX- typically right? the you're takes indicators it in you that private would between a the transactions, settle to in of close a in indicators, and lot that, other that the these as the in markets. their

so certain year. want the -- year-end. of push A trades always there's institutions in generally and before to of a end lot the get at And of big kind

that start year year big So fresh. the you there's QX, off and where a happens every always push, then

So that. I it would think that's -- yes, I at leave I think

Alex Kramm

at sorry that No, around was I great maybe bit you which specific last head count look again, But the can color. years. that's I I expense $XXX little hear to think from revenue in control. in growth be it adjusted basically When I in flat question focused of minus at I total, the basically expenses, look way mean very EBITDA, XXXX million here, for you're I enough. and as X it's Hopefully, still And been you flat terms and a expense mean, basically was great. mean flat the investing for then numbers clear. well. it's the I but be more Thanks is

look, an have. that inflationary costs So there's there's environment, you other

want terms, to as Or a the So bit. actually that you where start do scenario think there improve try things expenses up to is you flat a keep dollar ramping well? in overall expenses little

of we having expectations here. be initially terms should in just the So

Mark Lee

clear very were Yes, to and what adjusted identify specific software that Look, -- year-to-year -- me legal When did we and have XXXX. associated please make I about EBITDA just had look -- we let think we adjusted year-to-year, capitalize EBITDA our talk we I'll very with in expenses well, up. Alex. back what's XXXX, consider you compare that when

that apples-to-apples specifically kind that get basis. look of engage can a about And out very the it, committed to an you think top while shareholders, we so revenue line, how we right? invest at reducing to taking that those right, idea clear Board to our to And but better so continuing trying called as us to But to we're manage while it growth year-over-year, costs burn of investors, are growing way we're reducing we going the and on we our our look to our burn. be

be we've in I about been the deficit how now. pointed of thinking of this that a right has we're mean, managing at historically out to breakeven, the years operating always we in of a Kind right? world terms So that's this about in think that operated DNA we've not company how last is our kind company. roughly X

traction, we've to same past. of one about do in right? at top the It's to been But of to number that balancing down the -- talked delicate gain years, several we've our continuing is where all act. to So the priorities time, that announcements really kind that in last been the get

Kelly Rodriques

hear to Look, make Alex, though. you sure, I Yes. want this,

get our burn to company, commitment public we're the of we're growth We there's was forever. look other through at going what to looking profitability are each beyond going at our not X just that year. controls. are a to years to an ago at path scale obviously And systematically that cost burn looking going I'd now. and that we're and drivers say, We reduce expectation understand our as part And to XXXX, as be this we organic

to other market. XXXX get to opportunity look that's for the growth clear this. reasons under in to an improvement, part how we're calculus continued interesting path was ways us And see view our of with Mark in players organic use to I really went XXXX. our additional public these the We make all the other scale. the of and we our on we burn inorganic One But circumstances, that reducing consolidate at and want for to cost profitability, currency including to controls.

Operator

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

Kwun Sum Lau

and around related you out our model question follow-up how can arms a Forge to and the any you Forge outlook new Europe numbers. of about way revenue the some initiatives Intelligence like say investors help these Forge or XXXX. us So in the even from should Pro, products, And impact think get

Kelly Rodriques

Yes.

the transactional a then with And can it's I'd we that meant you talk started our of some and component market think specific bundling it. Europe. broad a more in as about a as also me bit little be Let trades Owen. see And about new an contribution of just we line index a as should will any start and ranging Mark, you products considered talk say to our and that revenue, I from initial revenue. think as Pro, earlier, see with the investable little jump index as evolution revenue couple in We how its that's product Mark of just as base of revenue other but subscription guidance, Forge in bit I'd said should modeling points. more a driving the it we as of be the the be marketplace subscription say, would well.

Mark Lee

Yes. Owen.

we the anything we'll bundled product, our done customers, be product, has mean, Pro, described Kelly completes product. trading which in the superior experience kind I it way that is be as will and way of Forge And the of on out state-of-the-art earlier, combined as kind we'll mentioned to creates a as it trading the and product for a roll with where capability, the will look, capability, out price this I So else see there data market. the

And our beyond data is a lot trading product rolled just the from and itself, relationship think engagement result talking a subscription Forge of revenues, but right, revenue the through creating in for about well. revenues that higher that as customers', upside, that not mentioned things of in subscription so higher measured revenues, time actually will institutional this One that I the is stickier that right? we that with in we're customers' the saw uptick, first when out with ago past we've our in perspective, we right, that Forge and Intelligence, we the trading an some

Europe, really excited we're is with opportunity team there. the So I mean Forge I mean the growing. about

we've started do said, to trades. As Kelly some

by an as out have will to it We it's to institutional you opportunity have think take We're each of BaFin. of jurisdiction speak But tight over incredible private just trade to ground. you competitors -- right? as where interest. entities have talking it to it, time, to is right? of investors, time. the build await that really model I out a there the we ability But And we don't in as to team on we think kind agent of in there's kind indications They're getting the companies. approval register talking

but I across think going cross-border it's and to to evolve. we flows mature Europe, talked the U.S., time Asia about ultimately, take and

Private I Index. think the the other Market Forge thing we mention is to wanted

we Magocorn So created announced, Equidity Equidity fund track Equidity. the will Index as had with start X. the Private And we've April Forge to on partnership a Market

that we really passive to We're investing it. we private time. active -- will earlier, the excited markets right, markets. be the said in private opportunity as in give a to have complementary manner, But to index. invest -- about it's in So this an take to will investable have investors something Again, but think

very changer we'll we excited well. But feel think run. we think game that's time in as it's build the But take again, long to that mature a and I scale. about something

Kwun Sum Lau

to you numbers Got change fair aware then they nature. million in want accrued we in Is $X.X these of? on I quick another related to are please foreign in make correctly? liabilities? sure also nonrecurring related legal loss there add saw the expenses be million increase anything just I more just also So of should understand assume follow-up I your value to -- And $X.X housekeeping Could the color question. your a it. and I settlement

Mark Lee

I Owen, in a about this amount think information Yes. of fair there's XX-K. the

EBITDA. as around private we public, went kind We provided in We We've an warrants expense calls mentioned -- legal noncash. about -- warrants have settlement. we to have And of cost that talked a the private of have and have a legacy this we a have revolve you your yet, adjusted include it's in is as those G&A prior did warrants lawsuits did in warrants. It's lot information.

the this mean, got and end recall, onetime number value a the in onetime matter So pretty that based which a of Post obviously, to warrants was I mean back a significant quarter. in up of general, to stock you the kind as of -- these XXXX. price warrants it's related mark-to-market think the stock I particular the at a of I year. $X it there's increased into I acquisition Shares the related the mean, on the price. to related And approached as even Xs is

a the at mark-to-market so of end driven lot And that the is price back stock the in increase of by year. the

Operator

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

Y. Cho

Mark, on the guess the Kelly business. on is and having. discussion Ken. we've of quick this Michael for Colin I been the one just follow-ups data on couple just I had a

prioritizing shift like there is of trying there over strategy number a gauge announced data shift on term? supported I the or in and path revenues. a for if a that of with strategy of here just if around -- and of guess, guess, I think a Pro a medium one, launch will of certainly that's you've by forward point Kelly to data And taken the and this a in short-term the business, I clear point kind business? is prioritize as start that to the good of adoption well Forge forward-leaning heard business? implemented you've again, that in two, in positioning a a seems I you data. good this it the Kelly, revenue and kind think kind is talked terms of about you But there's beta which near-term business strategy, at is kind comment tipping in I a again And like all initiatives

Kelly Rodriques

our in it into the as point data. unique We an of think say market. we're XXXX. at now strategy I'd see guess for I read advantage a right quality you we might in where it's a the should

they it's very we out extend a trade that forge on those do business we to that that as the into customers other of between are you with XXXX and of Pro, our the to it. beyond activities market that is not us getting subscription own and into there think from time do to to what of really of could call should and will is over we're data bunch we validity product, appear pricing relationship for that the adoption beyond Pro, right I'd opportunity only that continue a a side. to the aggregating and but and through make a right of data time we'll XXXX strategy because you the pretty we've other on play that is the the an quality being and say those competitors prospective the ramp dimensionalize like combination the that, just customers lead really and with course going out strategies see given for think year.But who and as Forge strategy. this a got valuable to where trading quality of the out We just folks You've to watch a third-party significant can. And do aggressive many will now. for in you don't question bundling, market it range data and got share We essentially data exposure a believe, to product it, institutional for that

it we marketplace the given We will into revenue for want positively going priority, to always translate be business. translate Mike, mean doesn't revenue. scale strategy Forge just to believe that particularly of this certainly to So here is a see happen our and

XXXX shift this as quarters revenue be And come to So on follow-on the that focused we'll and a decide back known fit. be to if investor in year, strategy. come let and it see we we considered community back and more

Mark Lee

the just private the trades think customer's obviously, kind the thoughtful share, also to to can because together. was right? markets to dominant we get upside trading of in there's you we of market getting rates reactive why you bundle a having to and about two both. bundling say, talk price and who want we I that we about the how a just that's think to be to data going strategy are customers have And about and mean, when you of trading able huge size it's understand think be charge, so activity, the I that about increasingly about of institutional considering And kind you take

trading competitors. the relative positioning think in data just customers to terms combo I our with winning kind of plus combination of of the is ourselves

Y. Cho

appreciate That makes And I all the sense. color there.

Just follow-up a on quick M&A.

today. maybe I kind guess or of segments think, or maybe seem with is, business business interest Kelly, M&A that some question you the or can of the I are to higher scale there more plugged in market or of that heard my areas accelerated you say considerations for and I M&A? discuss of potentially of get areas the

Kelly Rodriques

issuer-centric domination relationships. We're at think we're what Yes, that institutional, think looking priorities. I differentiated yet and scale to don't areas you in priorities we've of we call that the focus player around ready laid our out any about the assert data that's it, I but talk could from have aligned what an got

the And lines that about so focus. Pro, our institutional up talked when under really we launch of

good that where line business to out in That's yet. interesting is anybody But we Anybody and institutions got have ready are specifically issuers. the business a integrity, that level high-quality with position us. to potential areas don't focused issuers focused data out So sources and is of the anybody competitor are high our priorities And all about operates a that's scale of XXXX. that to on with the clearly, owned on in to data up interesting are by that that's reputationally proprietary a for we're anything us. or talk that's in

Operator

queue And back I no closing now call time. to this at the questions we further turn in have over our remarks. for will Paschel Dominic

Dominic Paschel

bit year-end guys, for longer. Great. Thank this joining you, for us a call

for ir@forgeglobal.com, definitely we just you. will Thank engage. available are questions, and We ping

Kelly Rodriques

everybody. Thanks,

Operator

This for disconnect. and concludes today's call. conference your you now participation, you Thank may

Forge Global (FRGE) 26 Mar 242023 Q4 Earnings call transcript