Q1 2025 Forge Global Holdings Inc Earnings Call
Carly: Good morning, my name is Carly and I will be your conference operator today.
Carly: At this time, I would like to welcome everyone to the 4th, 1st quarter fiscal 2025 financial results conference call
On today's 4th global call will be Kelly Rodriques, CEO .
James Nevin, DFO [inaudible]
Carly: Lindsay Riddell, Executive Vice President of Corporate Marketing and Communications and Dominic Paschel, SVP of Finance and Investor Relations
Speaker Change: All lines have been placed on mute to prevent any background noise [inaudible]
Speaker Change: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again.
Speaker Change: And now I would like to turn the call over to the Lindsay Riddell, Ms. Riddell, he may begin.
Lindsay Riddell: Thank you, Carly. And thank you all for joining us today for Ford's first quarter of 2025 earnings call. Earlier this morning, we issued a press release announcing Ford's first quarter of 2025 financial results. A discussion of our results today complements the press release which is available on our investor relations page.
Speaker Change: This conference call is being webcast and will show slides during this presentation.
Speaker Change: The replay of the webcast, as well as the slides, will be available via the IR page of our website shortly after the conclusion of this call.
Speaker Change: We will also post to that page our prepared remarks and investor supplemental document which consolidates some relevant metrics.
Speaker Change: During this conference call, we may make forward-looking statements based on current expectations forecast and projections as of today's date.
Speaker Change: Any forward looking statements that we make are subject to various risks and uncertainties and are important factors that could cause these actual outcomes to materially defer from those included in these statements.
Speaker Change: We discuss these factors in our SEC filing, including our quarterly report on Form 10Q, which will be found on the IR page of our website after it's filed.
Speaker Change: As a reminder, we are not required to update our forward-looking statements [inaudible]
Speaker Change: In our presentation today, unless otherwise noted, we will be discussing adjusted financial measures, which are non-GAT measures that we believe are meaningful when evaluating the company's performance.
Speaker Change: For detailed disclosures on these measures and the gap reconciliation, you should refer to the financial data contained within our press release, which is also posted to the IR page.
Speaker Change: Today's discussion will focus on the first quarter of 2025 results. As always, we encourage you to evaluate both annual and quarterly results for a full picture of forges performance which can be affected by unexpected events that are outside of our control. Thank you very much.
with that, I'll turn it over to Kelly, our CEO .
Kelly: Thank you Lindsay and Dominic, thank you for joining us today.
Kelly: We're pleased to report our full Q1 financial results following a preliminary release of earnings on April 10th.
Forch has been building momentum.
Kelly: Long-term strategic investments we've made in our technology, in the breadth of clients we serve, and in the diversity of investment opportunities we offer are gaining traction.
Kelly: We'll review some of the announcements we've made over the last month shortly.
Driven largely by an improvement in our marketplace revenue.
Revenue for the Quarter Total 25.1 Million.
Kelly: While marketplace revenue contributed 15.8 million on trading volume of nearly 700 million.
Kelly: The increase in revenue and volume was fueled by improved post-election market dynamics that drove a diversity of new and re-engage interest in our platform, as well as several large institutional block trades that closed in the quarter.
Kelly: We're encouraged by the continued momentum of the private market, even amid macroeconomic volatility affecting the public market and exit environment.
Kelly: With the volatility and an unclear IPO outlook, the importance of the private market in providing liquidity for the expanding pool of long-time private companies.
Kelly: and in providing access to a broad set of investors is only growing.
Speaker Change: In his annual letter to shareholders, BlackRock CEO Larry Fink said more Americans need access to private assets and that he envisions a future where private assets, including shares of private companies, make up 20% of every portfolio.
We're building the ecosystem that enables that future.
Speaker Change: and we've announced several new initiatives in the last few weeks that we believe reinforce our leadership position in that future.
in the last month.
Speaker Change: We launched a long in the works Yahoo Finance partnership to deliver private market pricing information to tens of millions of monthly Yahoo visitors.
Speaker Change: Yahoo Finance now displays forage price performance charts on more than 100 companies and features the forage private market index as the benchmark for private market performance.
Speaker Change: We additionally announced an agreement with Intercontinental Exchange or ICE through which Ford's price, our novel proprietary pricing data set for private companies, will be distributed with ICE's suite of data offerings to its institutional client base.
Speaker Change: Both the ICE agreement and the Yahoo Finance partnership, our validation of the integrity of our data and its relevancy to opening access to the full spectrum of participants in this market. From retail investors to large, complex institutions.
Speaker Change: And we expect both to deliver more clients into the platform, whether as purchases of our data or as participants in private market transactions large and small.
as our RIA grows beyond a hundred billion [inaudible]
Speaker Change: Beyond 1 billion in AUM, we're actively expanding our wealth management capabilities, both organically and through M&A.
Speaker Change: While laying the groundwork to deliver new financial innovations, including multi-asset funds and passive investing opportunities to this market.
Speaker Change: With that in mind, we also announced our intent to acquire Equity Capital Management.
A Specialized
Speaker Change: Asset Management firm focused on private investing, which would accelerate our expansion in the asset management.
Speaker Change: Equity manages the Megacorn Fund, the first institutionally managed index fund that seeks to provide exposure to private late-stage companies by seeking to replicate the performance of the Ford Equity Private Market Index.
Speaker Change: The Megacorn Fund has recently filed an application with the SEC to register as an interval fund that would allow access to a diversified fund of private stocks by a broader investor
Speaker Change: We're already working with liquidity as a partner and believe the ability of their business to contribute recurring revenue to complement what we're already building is compelling.
Speaker Change: We believe the role we are playing is critical to the private market's evolution into expanding broad participation globally.
Speaker Change: and given our momentum we're optimistic about the path ahead. Now I'll turn it over to James to dive deeper into our financial performance for the court.
Thanks, Kelly.
James: As we noted in our pre-release, improving market dynamics, post-selection further, further the carried into the start of the year and several large institutional block trades contributed to our best revenue quarter as a public company.
I don't know what you're talking about. I don't know what you're talking about. I don't know what you're talking about.
James: Strong marketplace revenue, more than offset the expected decline in custodial administration fees, demonstrating the benefits of our diverse revenue model.
James: And as we noted on our last call, we experienced the full impact of the fourth quarter, 2024 rate cuts in the first quarter, contributing to the expected decline in custodial administration fees.
I'm sorry. I'm sorry. I'm sorry. I'm sorry.
James: Focus on our costs remains a key priority for 2025, whilst balancing selective investment into our key strategic initiatives, including continuing to roll out enhancements to the forge next generation platform.
James: We'll go into more detail about the higher quarter-over-quarter operating expenses in the moment but after taking into account higher variable expenses directly linked to revenue growth and CFO transition costs are core operating expenses declined compared to the last quarter. We'll go into more detail about the higher quarter-over-quarter operating expenses.
James: We encourage to see a continuing uptick in forge managed SBV volume during the quarter, reinforcing the value of our RIA business and supporting the strategic rationale behind the potential equity acquisition.
James: As well as being strategically compelling, if completed, we believe the acquisition would be a creative to EPS and transformational to forges revenue streams by adding new recurring revenue.
James: After the end of the quarter-close, we also completed the planned 15-for-1 reverse stock split and have commenced our short-share re-buyback program.
James: Whilst announced tariffs and escalating trade tensions, don't have a direct impact on us.
James: The volatility in the public markets and heightened concerns about a potential recession are contributing to an unpredictable economic landscape, making business forecasting and decision-making
James: However, our strong deal pipeline persists as we progress through the second quarter and we continue to perform in line with our expectations.
Now moving to our performance for the first quarter
James: This was our best revenue quarter as a public company with total revenue reaching 25.3 million, up 36% from the last quarter.
James: Fewer marketplace revenues were 16 million, up 85% from the last quarter.
James: Trading volume increased 132 per cent from 299 million to 692 million quarter over quarter with an increased proportion of SBV volume including several large block trades.
James: SBB Trays, Jeremy Clow's quicker, increased liquidity in the markets, and have the potential to produce stickier revenue for Forge as investors trade in and out of those fund vehicles.
James: Net Tigrate declined from 2.8% to 2.3% in the quarter. The decline is primarily attributable to the rate achieved on the several large SBB block trades during the quarter.
James: The impact of these factors on the quarter quarter marketplace revenues are shown in the waterfall graph on the top right of the slide.
James: Castorial administration fees totaled $9.3 million, a 7% decline from the last quarter.
James: As expected, we experienced the full impact of the 2024 rate cuts in the quarter
James: Castodial Klein Cash balances total 460 million at the end of the first quarter, down from the 483 million at year end.
James: The impact of these factors on the quarter-quarter custodial revenues are shown in the water graph on the bottom right of the slide.
I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry.
James: Our first quarter operating expenses increased to 41.6 million from 37 million.
James: Looking at the waterfall chart on the bottom of the slide, you'll see the quarter over quarter changes in operating expenses.
including a 2.9 million increased related to revenue generation.
A 2.3 million cost for CFO transition.
James: and an increase of 0.5 million related to our continued investment in our technology.
James: Court operating expenses are fleas items to climb 1.1 million, with quarter-overquarter savings for our disciplined approach to spending and a realization of the full impact of the cost actions we took in the second half of last year.
with regard to technology spend, as we have previously noted.
James: We started to utilize offshore locations with some temporary increases in cost as we run parallel across locations to ensure operational stability.
James: Savings in this area are expected to start towards the end of this year as we progress towards profitability in 2026.
James: Our 16.2 first quarter net loss was basically flat on the 16 million net loss in the previous quarter.
James: Higher revenue net of transaction-based expenses were offset by higher operating expenses.
James: In the first quarter of 25, adjust the EBITDA loss was 8.9 million compared to a loss of 10.9 million in the prior quarter
James: Excluding the cash component of CFO transition costs, adjusted EBIDAR would have been 7.5 million in the first quarter.
I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry.
James: Netcash using operating activities was 12.8 million in the current quarter compared to 7.9 million last quarter. The increase was primarily attributable to changes in working capital, the largest of which is the change in accrued compensation.
James: During the first quarter we initiated an investment program with 21.5 million invested in the portfolio of governments, agency and corporate securities at the quarter ends.
James: Our investment programme is focused on maximising return in line with the preservation of capital and support for our liquidity environments.
James: We invest in highly rated debt securities with an average credit rating of double A.
James: Back quarter end, the average duration in the portfolio was less than three months and the maximum of maturity was six months.
James: Combined liquidity, including the short-term investments we have made, was 93.1 million at March 31, compared to 106.3 million at December 31. Cash, cash equivalence and restricted cash, ended the quarter at 71.6 million.
We have commenced repurchases under our previous Announce, Share Repurchase Program.
James: As a market close on May 6th, we repurchase approximately 315,000 shares and an average price of $13.15 per share.
James: This strategic action reflects our belief that Forge Stock continues to be significantly undervalued and opportunistically buying back stock represents a compelling opportunity for the company to increase shareholder value while maintaining the strength of balance sheets positioning forward for future growth.
James: Finally, we are pleased to announce the completion of our previously approved Reverse Stocks Returning Fortune Blinds with Naisie Listing Fanderts
James: You can see the before and after effect of the wristlet on our reported EPS and weighted average shares outstanding on the slide.
James: We have also provided estimated 2nd quarter and 4th year 25 weighted average basic common shares for EPS modelling purposes.
Kelly: I'll hand it back to Kelly before we go to questions.
Thanks James.
Speaker Change: As James noted, and as many companies have reported, it's difficult to predict how the impact of tariffs will shape the economy going forward.
What we know today is that forges pipeline remain strong.
Speaker Change: However, we are remaining cautious until we have more certainty about the impact tariffs.
Speaker Change: In terms of market outlook, we're observing mixed signals since the start of the quarter.
Speaker Change: A number of companies reportedly paused plans for IPOs in the past several weeks, including Clarner, StubHub and Chime.
Speaker Change: And we've seen some softening in terms of buy side demand and valuations with the forged private market index down 1.9% in April .
Speaker Change: However, we've noted the less liquid nature of private markets tends to smooth the volatility and you don't see the huge day-to-day swings of the public markets that certainly remain true over the past five weeks.
Speaker Change: We're also recognizing a growing acceptance among private market stakeholders that as IPOs get pushed farther and farther out, the private market can offer liquidity to bridge the gap for companies and their investors and state and shareholders.
as the man for liquidity intensifies, and even as volatility persists. [inaudible]
Speaker Change: We're preparing in coming months to launch key parts of our fully automated experience which will drive more efficiency into this market.
Speaker Change: to give private companies more visibility into and control of primary capital and liquidity options as they navigate an uncertain macro environment.
With that, thank you for joining us.
and we'll open it up to questions.
I'm sorry, I'm sorry, I'm sorry, I'm sorry
Speaker Change: At this time I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster.
Your first question comes from Owen Lau, the Oppenheimer [inaudible]
[inaudible]
Speaker Change: Hi, this is Guru on for Owen and thanks a lot for taking our question. I want to start with the equity acquisition. Can you maybe just walk us through the rationale there, what opportunities you're seeing, and what the long-term playbook looks like with equity, and specifically can you maybe just touch on the role and drive and record and revenue. Thanks.
Speaker Change: Yeah, Guru Elf Sarton, James, you can add to it as we've been reporting.
Speaker Change: We've recognized for the last couple years that a bigger piece of the market.
was trading with less friction through our SPV fun structures.
Speaker Change: And we started reporting the expansion of that AUM last year. And as we've reported most recently, where about a billion of AUM in the background?
We've been looking at the relationship between...
Interest in a broader set of participants looking at
Speaker Change: buying into the market through a basket of either active or passive fund structures.
Speaker Change: and we've been working with liquidity over the last year to 18 months in supporting the rolling out of their mega corn fund and using our index to track it.
Through passive, data-driven funds.
Speaker Change: was going to be a big part of how the market evolved.
Speaker Change: And Ford's believes there's a unique opportunity given our background, our history, the fact that we've got a custodial asset.
to start to bring... [inaudible]
Speaker Change: An innovative set of products to market that could be packaged with custody.
and distributed through to wealth complexes around the world.
Speaker Change: This is incredibly strategic because the underlying expansion of the AUM of single name SPVs as well as the scalability of a passive fund led by the leadership of equity.
Speaker Change: really looked like a strategic opportunity for us to not just build and expand our AUM dramatically.
Let have a bigger relationship with companies that make up.
The Forge Private Market Index
Speaker Change: and drive the underlying asset and data aspects of our business by acquiring more of the underlying shares required.
Speaker Change: to feed that fund. And we believe not unlike the public markets.
Speaker Change: where you see ETFs and passive indexes really being the majority of what trades now. We saw that as a really important strategic part of our future. When you look at the revenue composition and the model itself,
You're looking at very attractive, high margin and recurring revenue.
Lines for Us
Speaker Change: and there's more to come. We haven't fully announced the impact of this because we haven't closed the deal yet, but we just believe that the relationship between that and the platform and data itself is a really natural and strategic relationship. We're really excited about it.
Speaker Change: Yeah, and I think you just sat down on the revenue side, Guru, thanks for the question. I think there are two elements first.
Speaker Change: Only a suite of fund structures, whether they're single name SVDs, baskets or fund, like the mega-continent.
Speaker Change: Produces a sticky flow of revenue into the platform as people need to trade in now for those vehicles but also the flow of the comes from people having to invest in that and the fun game those underlying liquidity.
Speaker Change: That part of the business will start to look more like a traditional asset manager and as you know kind of those fees are recurring man in the fees in nature and as the AUMs continue to grow, we'll continue to get a benefit of that kind of growing recurring remedy stream.
Got it. Thanks a lot.
Your next question comes from Devin Ryan with Citizens in the end.
Great morning everyone, how are you?
Right.
Get on.
Speaker Change: Good. Good. Welcome back to start on the SPV and maybe approach it from a different angle. What did maybe just talk about the considerations of setting one up for a specific company?
Look, what are the considerations, and how many more single name SPVs?
Speaker Change: Can you imagine over the next couple of years that are being traded on the platform relative to what you're seeing today?
Speaker Change: and then interrelated, you know, how are you feeling about distribution right now? What steps are you taking to expand relationships and provide access and drive more liquidity, whether that be partnerships with brokerages or RIAs or any institutional platforms, going to where you from a distribution perspective for these things? Thanks.
Thank you.
Speaker Change: As usual, great questions, Devin. Thank you. On the first one, the SPV structure itself.
Speaker Change: and the considerations around it are pretty straightforward. We believe that any company...
that becomes interesting and big enough and mature enough.
To Draw [inaudible]
Either liquidity interest or interest from investors
should have an SPV on their cap structure.
Speaker Change: and we've got about 100 of them now and we envision there to be several hundreds in the coming years.
Part of the consideration is that it's given the way [inaudible]
Speaker Change: Company bylaws and private companies operate in terms of getting in and off from a cap table. It's just way more efficient.
for these structures to exist. [inaudible]
Speaker Change: to allow investors or existing shareholders to come in and out of the company with less friction. The requirements to the Board of Directors to the C-suite just makes it more efficient. And so part of our technology consideration.
Speaker Change: is to build sort of a multi-structure approach to how liquidity, including primary capital, comes in and out of a company. And so we believe that these SPV structures are really meant to provide a more efficient way to get in and out.
Speaker Change: Now that's on the single name side. When you start getting into large investment instruments that have multiple names.
Speaker Change: Then you start addressing some of the issues of, I think, distribution. We already have RIAs and institutional investors trading in and out of our SPV structures.
as
Speaker Change: James's comments indicated in addition to having large block trades in Q1, many of those were in SPV structures.
So, institutions are participating in these...
Speaker Change: that liquidity has announced. Now, that could allow a broader set of American investors to participate in the private markets through a passive instrument. And so the implication there for distribution is quite significant.
the track record of the guys at Acquittity.
Speaker Change: Given their history at fidelity, and their understanding of broad-based distribution gets us really excited about the scalability factor of what that could mean, and so there's a really interesting dynamic relationship between having to run a large
Speaker Change: Multicompanie Basket Fund and its ability to get in and out of positions through SPVs that sit in single name companies that are also part of the index.
Speaker Change: So that's what makes this really interesting and strategic for us, and I'll let James you add anything if you'd like.
[inaudible]
Keller: Okay, that's great color, Kelly. Thank you. And then just another follow up. It's also kind of multi part here, but you appreciate it.
Speaker Change: Warren in uncertain environment right now, but would be great to just get a little more characterization around what you saw kind of through the first quarter and customers kind of re-engaging a prior to maybe the paraphernalism and just curious whether it's [inaudible]
Speaker Change: You've brought based or are there certain sectors or types of investors that are re-engaging the pipeline that you're talking about, is that more seller showing up or buying appetite?
Speaker Change: So I'm kind of just digging a little bit around that characterization and then the large institutional block trade that you guys cited curious if that was just episodic or if that's also a condition of just the market's improving and so is that the market's.
Speaker Change: Hopefully get better from here. That will just be a condition that probably we see living for here that could be some chunky revenues moving forward. Thank you
I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry.
Well, so I think you won.
as everyone observed.
was a moment
Speaker Change: Where I think there was a tremendous amount of optimism that we were finally going to see macroeconomic conditions turn to a more open IPO market.
Speaker Change: Individuals, you know, and company-based programs kind of across the board.
Speaker Change: I'd say that AI is still a driving theme, and probably the biggest sector in the market right now, and that trend will continue as far as we can see forward.
I'd say really the only significant change in observation.
Speaker Change: is around uncertainty around tariffs. I think that came at a point where people were optimistic, there were IPOs planning and others were talking about it and so we tracked not only publicly filed.
Speaker Change: Intentions to go public or go IPO as well as we just sort of listen to the market so I think we're really in a period of uncertainty now as James pointed out the pipeline continues. [inaudible]
to be really favorable.
So, what we're sitting here in a moment,
Speaker Change: Trying to communicate a combination of optimism and the fact that there's a lot of good news happening at Forge and in the private market at the same time the backdrop is pretty unpredictable. So we really can't give...
Any further?
Speaker Change: You know, response to that, I think we're all just waiting to see what happens, but we continue to hold firm in terms of our optimism towards achieving what our view of Q2 is going to look like and what the guidance. [inaudible]
Speaker Change: or at least the consensus that's out there would say so we'll wait and see.
Speaker Change: Twenty-second question, Devin, around the large block trade. I mean, I think that is—
Speaker Change: We've had those in history, we've had a number of them through last year and prior periods.
Speaker Change: I think those will continue to be a factor now whether they happen every quarter or happen to a quarter of the year. I think that that is a little unpredictable but I think as the
Speaker Change: As the market grows and continues to see more volumes coming through our platform business
Speaker Change: through to much smaller trades. And as we talked about in terms of the various funds they'll be coming on to the platform with the equity de-acquisition. So those potentially have much smaller check sizes. So I think the range of trades you want to see how the platform is only going to increase.
Yep. Okay. That's great. Thank you all. Appreciate it.
Thanks, David, it's time.
Your next question comes from Ken Worthington with J.P. Morgan .
Speaker Change: Hi, good morning, guys. This is Michael Cho, and for Ken. I just wanted to touch on the couple of other announcements you made during the Quarters. Nice to see the Yahoo, and nice announcements for us.
Speaker Change: for pricing data. I realized there's a number of priorities around impacts and private market data that you've been initiating, but I was hoping you could provide enough data on the broader forage data business, you know, just in terms of how it's
Speaker Change: Things have been trending in terms of signing new clients and maybe the trajectory of revenues just given the various efforts around building out this business.
Thank you.
Yeah, sure.
So, I think part of what we see in 2025.
Speaker Change: is an evolution and maturing of our business model. And I think, you know, I'll just make the commitment now. You know, James and I have been working together now for four or five
and we really want to start.
Speaker Change: to deliver a clearer and deeper understanding of all of the things that contribute to forges revenue, including the data.
What I believe these announcements most recently reflect .
is a strategy that we started last year.
Speaker Change: And that was really about having forge and forges branded data be everywhere.
and so the Yahoo deal.
and the fact that CNBC now uses us...
Speaker Change: as a core part of their editorial on the private markets and the ICE distribution arrangement really underlies that the phase one of our strategy, which is getforges
Speaker Change: Data Everywhere and Brand Reliability of Price Discovery Around Forge There's a bunch of little companies trying to spin up data offerings and we think that
Speaker Change: that Ford needs to bring the integrity and reliability across a range of participants. So we care more about that right now.
and dominating that.
Speaker Change: Then we care about the quarter-over-quarter revenue contribution from data on a subscription basis. That having been said.
I'm sorry, I'm sorry, I'm sorry, I'm sorry, I'm sorry
We believe that the ice deal...
Speaker Change: which is being sold by a sales force that's bigger and bolder than just about anybody out there.
Speaker Change: is really targeting more institutions and more revenue generation on a going forward basis. Like a lot of other people, we started selling direct into the market.
Speaker Change: and we've got a number of our distinct clients using either Forge Price or Forge Pro, but until we get a steady and predictable stream of revenue from data, we will likely not report on data revenue separately.
But believe me.
Speaker Change: Our view of the future of our marketplace, the platform with data.
Speaker Change: and the revenue generation that's highly technology enabled and with higher margin, we look forward to talking about in future earnings calls. But today, we want Ford's price to be everywhere.
Speaker Change: because that's what leads people to say, OK, if I want to sell it, if I want to buy it, I'm going to go there. And if you click on that icon on Yahoo Finance.
Speaker Change: You're going to get dropped right into a qualifying page, and you're going to be able to drop right into a company that you want to get information on to see whether or not you want to buy it or sell it. So, right now that's where our focus is. I don't know if you'd like to. Anything to that, Jim.
No, I think that's it
Speaker Change: Great, now thanks for all the color. And if I can just ask the follow-up, Nate found on just like a science and take rates. I mean, as you call that, you know, 700.
Speaker Change: I'm still in a volume, I mean, I don't think that's something we've seen since maybe 2021.
Speaker Change: But if I compare today versus then, you know, take my star are considerably different and I was hoping maybe you could talk through maybe the differences and that volume mix you've seen in forge over the years that's impacting that take rate and and maybe given the increasing usage of SPV and maybe more institutional.
Speaker Change: You know, mix from here. How do you think take grace kind of trend going forward?
Thank you. Bye. Bye.
Speaker Change: Yeah, thanks Mike. I mean, I think over time, if you were comparing back to several years ago, I think there has been a...
Speaker Change: SBBs and fund structures, and those structures, whether there are or are third party structures, do have fees and bedrooms, so they traditionally, we charge a lower rate on those for trading, so that that makes.
Speaker Change: is pushing down the rate a bit, as well as the, as I said, the significantly large trades, those due to ends come at a lower rate. So in the quarters where we have kind of those big blocks like we had in Q1, that does affect it too.
I think over time with a-
Speaker Change: Maturing of the markets and an increase in liquidity generally. I think the trend we've seen over the last few years, I would anticipate that trend kind of slowly continues in that right direction.
Speaker Change: But I'd also refer back to the comment I made to Devin's question. I think we're going to see an increasing diversity in the types of liquidity through the platform from large to very small.
Speaker Change: and within that mix we'll have a big diversity in the commission rates that we charge for those different participants. So I think this will continue to be a...
Speaker Change: A mixed question called us quarter and month to month, but overall as the market matures and liquidity continues to grow, I think we'll see a small decline over time. Look, I just add one comment to this and that is, I think...
Beyond the Diversity [inaudible]
Speaker Change: of participants. And I would say the quarter over quarter shifts and take great.
Speaker Change: in the recent year or two have really been indicative of in what quarter do we have relatively more institutional block trades versus less so a lot of what you see quarter to quarter is explained by that.
I think longer term . .
Speaker Change: The vision of Forge is to bring an incredible level of technical efficiency to this marketplace and in any marketplace prior to Forge, if you look at the fixed income marketplace, you'll see what's happened there to fee structures.
Speaker Change: and you're going to see that over the long haul here. But if you watch the trend intake rates over time, particularly as we roll out some of the things that are coming,
Speaker Change: It's just natural that as we start auto matching as we start really getting into making it more efficient that you're going to see the impact of that on take rate.
Speaker Change: And as this market grows and gains momentum and as you see products like the one we're talking about with liquidity come to market
Speaker Change: You're going to see a natural reduction in the cost to participate in this market.
Speaker Change: And we expect to lead that and drive that and not be the...
Speaker Change: The people impacted by it, but be the people causing it. And that to me is part of what the leadership position is going to look like in this market over the next two to three years.
Great, thanks guys, appreciate it. I'll call it.
Your final question comes from Patrick Moley with Piper Sandler
Patrick Moley: Thank you. Good morning, guys. So I just had one on regulation. There's been a big regulatory push recently to try to make it easier for retail to access private markets. I would love to just get kind of your thoughts on the regulatory backdrop. What it means for you guys and any kind of expectations or milestones that you expect to see here on the regulatory front in the coming months. Thanks. Thank you.
Speaker Change: Patrick, how are you? Great question. I just published an op-ed this week on the subject. And we see this.
Speaker Change: and I've seen this for a decade as an issue. Our visits to Capitol Hill and to the SEC, there's a lot of interest within the regulators about how to balance the protections of...
Speaker Change: of individual investors and retail investors, while also giving them access.
Speaker Change: to really exciting and high-performing asset class. And so we believe that there's a lot of attention right now on rewriting some of the rules around accredited investors.
Speaker Change: and that's going to take whatever path it takes through the political and policy makers offices in Washington.
Speaker Change: But we really felt like, and this is teeing up the whole liquidity rationale, we wanted to get in the market with products that people could access now.
and so our view is...
You know Yahoo's got something like 80 million
You know, Yahoo Finance!
Speaker Change: Visitors and when they show up to forge many of them don't understand that as a non-accredited investor, they can't buy a single name stock. [inaudible]
Speaker Change: and so our view is let's continue to support the market efforts.
To rewrite some of these rules to give access to this.
Speaker Change: to a broader set of investors. And we're working with policymakers on this now. We think it's really important. And there's a number of people in that coalition that believe the same thing, including BlackRock, some of the people that we've mentioned in this sum.
Speaker Change: in this announcement. But between now and then, our view is let's give the market products.
Speaker Change: that allow them to participate before those changes happen. But I think you're seeing that come from a lot of different sources, including many of the people in Washington across the aisle are looking at this and saying, you know, there's private companies.
Speaker Change: are such a big part of our economy and the growth of those private companies and the ability to invest in them should be accessible by a broader set of Americans. So we continue to be super supportive of policies to do that, and that's one of the reasons why we put that op-ed out most recently, but thank you for the question.
Speaker Change: Okay, great color, thanks. And then we're balancing a couple of learnings this morning, so I apologize if I missed it in your prepared remarks. But could you give any color just on your expectations around cash burn for the rest of this year and going forward? Thanks.
Speaker Change: Yeah, Patrick, we haven't given out any specific guidance around Cashburn and Wounds, but we remain on track.
to head off and break even points in 2026.
Speaker Change: So we're expecting a cash burn in 25 that we less than previous years.
Speaker Change: As a reminder, Q1 is our highest cash burn quarter, mainly as the result of like paying out annual bonuses and the like, which is why you've seen the change in accrued conversation being the biggest driver of a cash change corner over quarter.
Speaker Change: but where we continue to be confident on track to that kind of eve-a-daw, adjust eve-a-daw break even in 2026 which kind of basically is kind of cash neutral kind of position.
Thank you.
All right, great. That's it for me. Thanks
Thanks, Patrick.
Speaker Change: Thanks, Patrick. Carly, unless we have any other questions, I think we'll conclude today's conference call.
Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.
Goodbye.