Forge(FRGE)2024-11-07 06:22Financial Data and Key Metrics Changes - In Q3 2024, total revenue less transaction-based expenses was 22 million in Q2 2024 but up from 11.4 million from 18.8 million, up from 8.6 million, down from 338 million, a decrease from 1 billion [20] - Total custodial administration fees were $10.5 million, roughly flat compared to the prior quarter [23] Market Data and Key Metrics Changes - Median valuations for companies trading on the Forge Platform are trending up, with median discounts improving to -8% and -12% to the last funding round in the last two months of the quarter [30] - The bid-ask spread decreased to 5.5% in September, better than the long-term average of 11.3% [42] Company Strategy and Development Direction - The company aims to reach breakeven adjusted EBITDA by 2026 and is taking actions to narrow adjusted EBITDA losses in the coming quarters [15][29] - Continued investment in the Forge Next Generation Platform is expected to enhance pricing data exposure and improve client experience [13][14] - The introduction of Forge Price aims to provide pricing transparency and insights into private market performance [11][12] Management's Comments on Operating Environment and Future Outlook - Management noted that the upcoming U.S. presidential election and geopolitical instability have weighed on investor sentiment, but they expect improved conditions post-election [18][36] - The company anticipates that the resolution of the election will lead to increased investor confidence and a recovery in primary funding and IPO markets in 2025 [31][36] Other Important Information - The company has over 20,000 institutions registered on its platform, with institutional investors accounting for at least two-thirds of buyside volume annually since 2021 [10] - The company is focusing on maintaining cost discipline while balancing investment opportunities with strong ROI [29] Q&A Session Summary Question: Expectations for marketplace revenues in Q4 - Management indicated that Q4 has historically been the biggest quarter and they are optimistic about returning to normalized activity levels post-election [40][41] Question: Reception of Forge Price and potential partnerships - Management highlighted that Forge Price is part of a broader data strategy and is expected to generate revenue through licensing and enablement opportunities [46][47] Question: Engagement trends with Forge Pro - Management noted that Forge Pro is expected to enhance client engagement and is seeing increased adoption among institutional investors [50][54] Question: Impact of new administration on regulations - Management expressed optimism about a lighter regulatory touch and is actively engaging with regulators to promote access to private markets [56][60] Question: Updates on cost-cutting initiatives - Management confirmed ongoing cost-cutting measures and investments in offshore technology capabilities to improve efficiency [65] Question: Competitive landscape and Nasdaq Private Markets - Management remains confident in their market position, emphasizing their established network and the challenges new entrants face in gaining traction [67][69]