Good afternoon. My name is Emma. I will be your conference operator today. At this time, I would like to welcome everyone to the Forge Global Holdings fourth quarter and full year 2022 financial results conference call. All lines have been placed on mute to prevent any background noise. After the 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 one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Thank you. Dom, you may begin your conference. Awesome. Thank you, Emma. Thank you all for joining us today for Forge's fourth quarter and full year 2022 earnings call. This call will be a bit longer, as we, for the first time, recap the full year, appreciate you hanging in there with us. Joining me today are Kelly Rodriques, Forge's CEO, and Mark Lee, Forge's CFO. They will share prepared remarks regarding the quarter's results then take your questions at the end. Just after market close today, we issued a press release announcing Forge's fourth quarter and full year 2022 financial results. A discussion of our results is complementary to the press release, which is available on the IR page of our website. This conference call is being webcast will be available for replay. There is also an accompanying investor supplemental page on our IR site. During this conference call, we may make forward-looking statements based on current expectations, forecasts, and projections as of today's date. Any forward-looking statements that we make are subject to various risks and uncertainty, and there are important factors that could cause these actual outcomes to materially differ from those included in the statements. We discuss these factors in our SEC filings, including our annual report on Form 10-K, which can soon be found on the IR page of our website. As a reminder, we are not required to update our forward-looking statements. In our presentation today, unless otherwise noted, we will be discussing adjusted financial measures, which are non-GAAP measures that we believe are meaningful when evaluating company's performance. For detailed disclosures on these measures and the GAAP reconciliations, you should refer to the financial data contained within our press release, which is also posted to the IR page. Today's discussion will focus on the fourth quarter and full year 2022 results. As always, we encourage you to evaluate both annual and quarterly results for a full picture of Forge's performance, which can be affected by unexpected events that are outside our control. With that, I turn it over to Kelly, our CEO. Thanks, Dom. Thanks everyone for joining this afternoon. We appreciate your interest in Forge. As many of you already know, Forge is committed to building what we call the private market of the future. We've made significant progress over the past year in enhancing and evolving access, transparency, and efficiency in the private market of today. Against the backdrop of macroeconomic headwinds, we were focused throughout 2022 on what was within our control, enhancing our technology, expanding internationally, and developing new avenues for growth to diversify our entire portfolio. Among these efforts are achievements I believe have helped to both fortify and grow our business for the future. From a financial perspective, while the challenging market conditions of 2022 certainly affected our trade volumes, we were encouraged by a couple of key trends. We realized the benefit of our diversified revenue model, which includes predictable revenue from our custodial offerings that offset some of the impact to transaction-based revenue in down markets as designed. Specifically, as interest rates rose, our custodial administration fees grew in tandem, hedging the natural volatility that we have all observed across public and private markets. While still in early innings with our data business, we've seen substantial growth over the first full year and are inspired by the high rate of renewal and an increase in ticket sizes on renewing customers. As an annual factoid, our data bookings at the end of 2022 grew approximately 392% from $244,000 to about $1.2 million. I wanna be clear, this is off a small base, yet our data business is diversifying our total revenue mix, and we believe it can create an avenue for high-margin SaaS-like revenue for the future. Data revenue for the two major U.S. financial exchanges is between 35%-40% of their total revenue, and we believe Forge's opportunity is relatively untapped. For that, I'll turn it over to Mark Lee. Thanks, Kelly. Discussion of Forge's performance in the fourth quarter will be compared to last quarter, as we believe it's more meaningful to focus our remarks on a comparison to the prior quarter given the unique economic environment at this time. In the fourth quarter of 2022, Forge's total revenue less transaction-based expenses rose to $16.7 million, up 6% from $15.8 million last quarter. Total placement fee revenues less transaction-based expenses reached $6.8 million, down 16% from $8.1 million last quarter. Transaction volume increased 9% from $226 million last quarter to $247 million in Q4, while our overall net take rate declined from 3.6% last quarter to 2.8% in Q4. To provide some context here, during the current period of volatility and illiquidity, many trading platforms and venues, including Forge, are working with third-party intermediaries to match the other side of the trade. This results in Forge collecting commission on only one side of the transaction, thereby reducing our net take rate. Total custodial administration fees were up 29% in Q4 to $9.9 million from $7.7 million last quarter. This gain is largely driven by increased cash administration fees in the current rising interest rate environment. Forge's custodial cash balances totaled $635 million in Q4, down from $685 million at the end of last quarter. The decrease in cash balances during Q4 was primarily driven by increased outflows for distributions, which are historically high in Q4, as well as reduced net inflows from investment liquidity events and investment income. Total custody accounts increased approximately 3% quarter-over-quarter to $1.9 million in Q4, up from $1.8 million last quarter. Assets under custody were essentially flat at $14.9 billion at the end of Q4 versus $15 billion last quarter. Fourth quarter net loss was $26.2 million compared to $16.2 million net loss in the third quarter. This difference is explained by a $25 million gain in Q3 from warrant liabilities offset by a $15 million decrease in shares-based compensation. Adjusted EBITDA is the key measure of our operating results. In the fourth quarter, Adjusted EBITDA loss was slightly higher at $14.3 million compared to a loss of $13.3 million last quarter. In Q4, we recognized employee separation costs of $2.2 million related to streamlining and efficiency initiatives, and this contributed to the slight increase in loss. Net cash used in operating activities improved to $9 million in a quarter compared to net cash used by operating activities of $11.4 million last quarter, down 21%. Keep in mind for the timing of cash flows that Forge pays out annual corporate bonuses in the first quarter. These bonuses are based on a combination of individual performance and overall revenue attainment. Cash and cash equivalents ended the quarter at approximately $193.1 million compared to $202.6 million last quarter, highlighting the continued strength of our balance sheet. From a housekeeping perspective, our weighted average basic number of shares used to compute net loss was 171 million shares, and our fully diluted outstanding share count as of December 31st was 189 million shares. For the first quarter of 2023, we estimate 172 million weighted average basic common shares for EPS modeling purposes while in a loss position. To recap the full year of 2022. In fiscal year 2022, Forge's total revenue less transaction-based expenses was $68.9 million, down from $125 million a year ago, driven by lower trading volumes, which we primarily attribute to macroeconomic and geopolitical instability, creating uncertain and volatile market conditions. Of that amount, total placement fee revenues less transaction-based expenses totaled $40.2 million, down from $104.7 million last year. 2022 transaction volume was $1.2 billion compared to $3.2 billion in 2021. The average net take rate for 2022 was constant at 3.3% year-over-year. Total custodial administration fees were up 41% in 2022 to $28.7 million from $20.3 million in 2021. Total custody accounts decreased year-over-year to 1.9 million from 2.1 million. Total custodial accounts declined during the year due to closures of unfunded accounts in the second quarter, as we discussed then. Assets under custody were $14.9 billion at 2022 year-end versus $14.3 billion at 2021 year-end. Forge's custodial cash balances totaled $635 million at the end of 2022, down from $687 million at the end of 2021. Full year net loss was $111.9 million in 2022, compared to a net loss of $18.5 million last year. Nearly three-quarters of this decline was due to stock compensation expense and one-time cost of going public. Fiscal year 2022 Adjusted EBITDA loss was $46.9 million, compared to an Adjusted EBITDA gain of $8.8 million in 2021. Through our agile cost management, we were able to keep our total costs essentially flat year-over-year. We still invested in growth and strategic hires and limited our decrease in Adjusted EBITDA to the decline in our top line. Net cash used in operating activities was $68.8 million in the year, compared to net cash provided by operating activities of $10.9 million last year. This included one-time transaction costs of $13.2 million in connection with going public. To cost management. Responsible stewards of capital, we and the board are monitoring the market, our resource allocation, and capital spending on a regular and ongoing basis. As indicated previously, we are committed to lowering our overall cash burn in 2023 compared to 2022. We continue to focus on managing our expenses while balancing the need and opportunity to invest in Forge's platform, products, and services, and delivering and executing on our commitment to shareholders. Our total head count decreased to 349 at the end of the quarter. Except for a small number of critical positions, our intent is to maintain total head count at current levels until there is greater stability in the overall market. Besides tightly managing our hiring and human capital, we are scrutinizing and reducing the use of third-party service providers, moderating our discretionary marketing spend, and consolidating our real estate needs. Macroeconomic conditions continue to create uncertainty. On the positive side, we've seen the number of unique private companies with sell-side IOIs on the Forge platform reach record levels, which speaks to the breadth of opportunities available for our investors. The number of companies with active bid interest doubled from December 2022 to January, which we believe indicates an increased willingness by investors to test the waters again. We are confident that not if, but when markets normalize, Forge will realize the benefit of our active network of interested sellers and investors. I'll hand it back to Kelly to summarize what Forge has accomplished in 2022 to strategically position Forge for the future. Thanks, Mark. Despite challenging market conditions in 2022, we invested in building for the future. I'm proud of the progress and focus our incredible team demonstrated throughout the year. We focused on deepening and expanding our competitive position, enhancing our Forge trading platform and our data products to improve the experience, the transparency, and the efficiency of participating in the private market. Notable 2022 milestones include we became a publicly listed company. Forge was the first private market platform in our category to go public, which we did on the NYSE. It was a means to an end, allowing us to access the public capital markets in support of scaling our business and international growth. We announced in September our intention to expand into Europe through Forge Europe. We anticipate launching this year, starting in Germany, moving into other markets thereafter, pending the required regulatory approvals. We added new products and upgraded existing ones, including Forge Offerings. We built and launched a fund offering capability through our markets platform to facilitate block sales of single issuer stock to multiple buyers at a fixed price. This new mechanism allows Forge to lower the cost of entry below our $100,000 historic minimum investment size on certain tranches of shares. Early signs indicate that investors are interested in participating in fund offerings at lower investment minimums. Additionally, we integrated a taxable custody capability into the Forge Trust custody solution. This new function allows Forge clients to securely custody their cash and private shares with Forge, helping to support more efficient and streamlined participation in private market transactions. In October, Forge launched the pilot of our first lending product, which offers stock option exercise bridge loans. This enables employees to borrow funds to exercise their vested options and then sell their shares on the Forge platform. We believe our lending capability has the potential to expand sell side inventory for investors and increase the breadth of sellers able to participate in the private market. In addition to building new products, we continue to expand our data offerings in 2022, delivering new insights and analysis to institutional investors through additional avenues of distribution. We've added new features to Forge Intelligence, including sector insights, private company comparables, and third-party trading data. We built our now released first data API that investors and financial institutions can use to integrate Forge Intelligence data into their existing investment portfolio management and risk analysis tools. We scaled our content program in 2022, including launching our Private Market Update, a monthly insights report on private market performance. Through our trading data, our reports, and company data and insights we offer through our Forge Intelligence platform, we are increasingly becoming a sought-after expert and go-to source on the performance of the broader private market. Our private market data is regularly referenced by journalists and subject matter experts in financial publications, including Barron's, The Wall Street Journal, Bloomberg, and others. Through our data and content, we've engaged new partners and clients and grown awareness of our brand. Finally, in December, we announced our strategic evolution to center the business around the evolving needs of customer segments, streamlining Forge's complementary business units and accelerating the development of Forge's technology platform. It will support a unified customer experience and amplify Forge's network effect. As we look forward to the future, we have optimized our strategy to deliver solutions, data, insights, and trading capabilities that institutional investors will increasingly recognize as a competitive advantage and that all market participants can leverage to access and navigate the private market. We are excited about our progress against several major initiatives already underway that we intend to launch in coming months. We are optimistic that these initiatives will help extend our category leadership position and our competitive advantage. I am confident that we have the right structure and right leadership to execute for the future. Even as we're energized about Forge's progress, we also are realistic and aware of market conditions and will remain committed to managing Forge to a lower cash burn in 2023 while still investing in our growth and evolution. Now, I'll take just a few moments to conclude with brief remarks on what we're seeing in the current market. While Q4 remained challenging, we noted some green shoots in our data that we are watching closely. First, in Q4, the steep quarter-over-quarter pricing declines that characterized most of 2022 began to show signs of leveling out in the last few months of the year. Existing shares trading on Forge declined 8.8% on average from Q3 to Q4 2022, an improvement from the 22% decline in pricing from Q2 to Q3. Meanwhile, the number of distinct companies listing shares on the platform remained above historic averages. However, the market remained a buyer's market. Spreads remained elevated at about 23%, and investors in Q4 remained unconvinced that the market had troughed. Still, prices on both bid and ask indications of interest trended up slightly in January from December's low point. There were additional signs of optimism as we noted an improving sentiment toward possible 2023 IPOs. Companies like Stripe, Instacart, Reddit, and others are reportedly eyeing IPOs this year. Let me be clear, sprouts of optimism do not a market make. It will take a sustained optimism in the form of declining spreads, improving buy-side interest, and stabilized valuations, which will be seen in our data first for the private market to regain its balance. I'd like to close with this. 2022 wasn't the year we all anticipated it would be. Even while we put up a Q4 with higher revenue than Q3 last year, we continue to see weakness in our marketplace first quarter 2023, with trading volumes to be lower than Q4 2022. The market conditions remain challenging, and the volatility that we experienced in 2022 persists. Inevitably, as evidenced by the entire history of capital markets, there will be economic cycles that impact this asset class quarter-over-quarter and year-over-year. The ultimate opportunity in this market is unwavering. I remind our team often that our vision is a long-term one, and in pursuit of that vision, Forge will stay focused on execution. We will continue to extend our category leadership, we will continue to create and pursue new growth opportunities, and we will remain well-positioned when the volatility calms and the latent economic power of this market is once again unleashed. Thank you, Kelly. Emma, with that, can we open to questions? Thank you. Your first question today comes from the line of Devin Ryan with JMP Securities. Your line is now open. Hey, thanks. Good evening, everyone. I guess I just wanna start on placement fees, and I think, Mark, you mentioned this dynamic where you were capturing one side of the trade. I think I heard you right. Is that a retail or institutional dynamic? You know, is that something that we could continue here, moving forward? And you had a nice balance in the number of trades. The average volume was lower, so just trying to get a little bit of sense of whether that was just a shift towards more retail, or something else. Just trying to understand the dynamics for 4Q. Yeah. Hey, Devin. thanks for the question. a couple of key points. and you have our supplemental filing, that we provide other key metrics, so you can see the history of our net take rates. when you look at our Q4 take rate of 2.8%, it's actually very similar to the take rate we experienced a year ago in Q4 of 2021, at 2.9%. as we mentioned, you know, in the call, the overall take rate for the year, 2021 versus 2022, was constant at 3.3%. It's something where, you know, from any quarter to quarter, we've always talked to you about mix of institutional versus retail and how that mix can influence and fluctuate and drive the weighted average net take rate. What we were talking about here for Q4 was a slightly different, you know, phenomena. In this time of illiquidity, you know, looking to find, you know, the best outcome for our customers and that can involve working with outside external counterparties. It could be for retail trades, Devin, it could be for institutional trades, right? What we believe is that, for the most part, right, we can execute and give clients, our clients the cleanest execution with the best probability of execution when we're managing both buyer and seller. There will be times, when it makes sense to work with an outside counterparty to help complete that trade and serve our customer. Terrific. Then just in terms of the competitive landscape, clearly, you know, as you guys articulated, it's been a difficult backdrop for the past year or so here. What are you seeing in terms of others that are in the industry-- you guys are an industry leader, but are you seeing peers pull back resources? And, you know, how is that maybe, you know, affecting any parts of the business or opportunities for market share over time? And appreciate the cost focus on your side as well. You know, if to the extent volumes recover, how are you thinking about managing costs moving forward, in kind of a growth environment that we hope happens where you get kind of a re-acceleration? Can you keep kind of the expense and, at a lower level or will that re-ramp with kind of an improvement in volume? This is Kelly, Devin. There's a couple of questions in there. Let me start with the first one. you know, the TAM of the private market and the excitement we have about the long term has gotten out. Other people know about other companies and certainly we, like you, see other entrants and some, you know, competitive noise continue to rise in all forms in the market. most of what we see are smaller either earlier stage or nascent efforts just getting underway. We believe that part of the reason we went public, acknowledging it was a difficult time, was we felt that having combination of a balance sheet and scale lead would mean that when the market was challenged, and this is a very difficult time for capital raising broadly, that the benefits would accrue to the well-capitalized market leader. We remain hopeful in that capacity. We have the ability to carry a burn rate. Both Mark and I come from histories of companies that don't have big burn rates, so it's definitely a balancing act. We do have, and we mentioned the latent economic potential easily in the call because we think we're in a position to capture that, particularly given the investments we're making in tech and in people. When this market comes back, we think we'll be better positioned. I think part of what Mark's answer was on the last question was figuring out that other counterparties that may have supply and demand, they're gonna come to Forge to try and find the other side. I'd say, you know, the flip side of our take rate being down was that, you know, we may have captured a trade that a competitor or another financial institution needed to find a counterparty to, and they found that in Forge. While we got the volume, you know, that was an example of not being able to represent both sides of the trade, which we've overwhelmingly done in the history of the company. You know, I'd say that we're very well-positioned. We're excited about it, but we expect to see competition. We respect it no matter where it comes from. Yep. Okay. terrific color. I'll leave it there. Hop back in the queue. Thank you, guys. Emma. Your next question comes from the line of Alex Kramm with UBS. Your line is now open. Yeah. Hey, good evening, everyone. Just you mentioned a few green shoots that you saw in the fourth quarter. Also I think couple of comments that some of them I may have missed for the first quarter. You know, maybe you can just go back to what you've seen in the first quarter, maybe expand a little bit. More importantly, anything quantitatively that you can share with us. I mean, we're two months into the quarter, maybe some sort of average daily trade volume or something you've seen so far, and how that compares to the fourth quarter. Thanks. Mark, why don't you start with some of the green shoots that you mentioned? Yeah. Hey, hey, Alex Kramm. This is Mark Lee. I mean, two of the things that I mentioned were, you know, one of the first things I said was about the increased interest on the buy side, right? We've been saying for some time now in 2022 that it's a buyer's market, and there's an imbalance with 2/3 of our IOIs being sell side and 1/3 being buy side. What we reported in our PMU, and I described was that in Q1, we saw an increase in buy side IOIs. In particular, we talked about the number of issuers. The number of buy side IOIs covering various issuers doubling from December to January. I mean, in addition, the total number of buy side IOIs actually increased over 60% from December to January. You know, it's just a start. We still are seeing the imbalance between buyers and sellers, it's still a buyer's market. These are positive signs that we wanted to share. Yeah. The other thing that Kelly mentioned, Alex, I don't think we're in a position to provide more information than this, was, you know, Kelly did mention. As you know, we have declined to provide forward guidance in the past, but we did share that the volumes and the Q1 continues to remain soft. We expect trading volumes to be lower in Q1 than in Q4. Yeah. I'll add one other point, which is the... These are, you know, a reason for optimism for us, but we're trying to manage that optimism with a little bit of discipline around how much and duration of time these earnings calls sometimes fall, you know, not completely in line with the cycle where we've got a definitive proof in the data. The combination of the buyer sentiment data that Mark's reporting on and the price declines that were pronounced, you know, coming out of Q4, give us reason to be optimistic, but we need to see it for a sustained period. There's a lot of things out there in the press about valuations, and we've talked about this, and we've commented recently that the private market is still a place where, you know, people are looking for truth in valuations. We see that combination of buyer-seller balance spreads and valuations coming into focus as something we're going to continue to watch for the balance of Q1 into Q2, and look forward to reporting on it and talking more about that when we're back here on the next quarter. I'll make this final point. Even if we see this data start to emerge, there is some degree of latency in the way trades close and volume is recognized in the platform. If I'm seeing really interesting things right now, and we've described in previous calls that some percentage of our trades are ROFR-required trades and some trade through funds like SPVs, that a significant portion of actual finalized trades may be delayed for 30-plus days even if the market data is indicating that people are coming back to buy. We'll continue to watch it closely. You know, one of the commitments that we had to ourselves coming into this year is to think more about what critical sort of KPIs are we going to watch and talk about going forward, and more on that to come. Thanks for the question. Hey, hey, Alex. Let me add one more thing. This is something that you would have seen in the PMU, but we didn't include in our prepared remarks. You know, one of the other positive signs was that the new IOIs coming in on the buy side. You know, previously we're coming in at an average 50.5% discount, you know, to the prior funding round. And more recently, we've seen that discount narrow down to 39% of a discount. In other words, bidders are increasing the average price that they're prepared to pay for acquiring private shares. Excellent. Thanks for that color. Then just shifting to the cost side, and I know you gave some outlook color there as well, but maybe you can be even more specific. If I look at the fourth quarter, I look at your ex-Adjusted expenses, which is basically just net revenue minus the Adjusted EBITDA at $31 million a quarter. That's the run rate. It was up a little bit from the third quarter. As we think about 2023, is that a good starting point? Any sort of seasonality would you call out? I mean, I know you stopped hiring, so is 31 the right number for every quarter? Should that flex up or down? Are there, again, are there some tax items maybe in the first quarter? Just help us a little bit at how we should be thinking about the cost base and, in kind of absolute dollars, 'cause it sounds like that's how you're basically budgeting the business right now. Yeah, that's right, Alex. I think you're hitting it on the head. I mean, when you looked at 2022, there was a lot of, you know, one-time costs related to going public in the early quarters. You know, net loss has a lot of movement in non-cash items like stock compensation expense and warrant mark-to-market, which get taken out when you look at Adjusted EBITDA. As we've communicated and stressed, you know, trying to manage to a flat headcount, you know, at this point. We announced our hiring freeze, we're maintaining our hiring freeze. You know, you noticed that we took some, you know, one-time costs in terms of employee separation costs in Q4. For the most part, you know, as we, as we communicated in our prepared remarks, we're holding the line, on our headcount, and that really comprises the majority of our total spend. Okay, no other items or any inflationary pressures that we need to be watchful for. This is a good run rate, is really the question. Yeah, that's right. That's right. I think as I mentioned, Alex, in the full year comments that, you know, when you looked at Adjusted EBITDA in 2022, we held costs flat even while we increased our headcount by 16%. That's really because we have a cost structure that also has a variable component of our compensation. You know, that part of our expense base will fluctuate, you know, as our revenues go up, you know, or down. Yeah, I think, the answer to your question is Q4 is a good starting point. Excellent. Thanks, guys. Thank you, Alex. Your next question comes... Emma? Your n- Go ahead, Emma. Sorry. Sorry. Oh, no worries. Thank you. Your next question comes from the line of Owen Lau with Oppenheimer. Your line is now open. Thank you for taking my question. Could you please add more color on your international expansion strategy? Kelly, you mentioned some color about Germany and also some other part of Europe pending regulatory approval. I just wanna get a sense of, are you on track to launch in Germany this year, and what month should we expect? What kind of product do you expect to launch in Germany? Thank you. Let me just make sure I've got a couple of the details. We are applying for our BaFin license now, and we do expect to be up and running this year. I'm trying to see if we had any previous visibility on the actual month. I'll come back to that. What I will give you is sort of the dynamics of the market as we see it. It's really the reason it converged to have us starting here in our international expansion. We were watching the number of private unicorns that have developed and expanded in the region. Based on sort of the unicorn crop and what we call pre-unicorn, it's about 650 companies with a combined market cap of $620 billion, which is fueling the growing demand for investors in that region. This is an area that's growing faster than the U.S. unicorn crop. We have one of our largest investors in Deutsche Börse really stepping up not only to invest in this, but to partner on a go-to-market plan. We've just gotten our offices opened in Berlin. I'll be traveling over there in the spring. We think that that's really the launching point. We understand and recognize that we will require additional licenses to expand into the U.K. market and ultimately in France and beyond. We think Germany is a place where we've got a big partner, we've got expertise, we've already got some of the staffing on the ground, which combines some of our best talent in the U.S., which is relocated there. We've hired some senior management with deep experience in the private markets, as well as legal and compliance on the ground. Deutsche Börse has contributed expertise to the venture. We're, we're pretty excited about it. Again, we're being careful not to run up, you know, too big of a bird. We think that, you know, the timing for really getting up and running in market is related to BaFin. We can do trades now. We have enough visibility to see investors that are interested in buying and selling in the region. As we've reported previously, we've got investors in over 70 countries. Really this BaFin license is the next domino for us. We'll primarily initially be focused on companies. I'd say the dynamic there is a little bit different in terms of the equity dynamics of employees. I'd say different than the U.S. markets. The combination of capital formation and secondary needs in the European market are something that we're watching really closely. I'll stop there. Hey, hey, Owen. As a reminder, we've also mentioned that we're in the process of transitioning our Asia presence from Hong Kong to Singapore. Europe is our priority right now, but we also are keeping our eye on that transition, and you'll hear more about that in the future. Got it. That's helpful. Then for Forge Intelligence, what additional products you expect to launch this year? I know you guys have launched a whole bunch of products in 2022, how should we think about the penetration of the existing products to your customers right now, and how are you going to increase your penetration? Thank you. Let me tell you what I can tell you. I'd say part of what my remarks were related to interesting announcements in the coming months, as well as the evolution to a customer-centric model. We've really looked at how to accelerate Forge's lead position in this space, and we're focusing a lot of our energy on the institutional market. As you heard us reference institutional competitive analysis several times, we have figured out that the relationship between the advanced features of Forge Intelligence and trading is really interesting. I would say wait for announcements in the coming few months to hear more about this. We're really excited about the future of Forge Intelligence and its impact on both the revenue stream and composition of revenue, obviously, but more in terms of developing a lead position globally with institutions as we see data and trading as a very hard set of benefits to separate. More to come. Hey, hey, Owen. I'd like to mention, in case you hadn't seen it, we put on a webinar the other day on the use of private data in private markets. I think it was an incredibly helpful presentation by our team that really talked about, you know, how people can really leverage our data product to help think about the private markets. I think that that's something if you haven't had a chance to take a look at, please do. Sounds great. Thank you very much. Your next question comes from the line of Jeff Schmitt with William Blair. Your line is now open. Hi. Thank you. I think Kelly mentioned the revenue contribution from data product at the beginning of the call, but I missed that. Could you go over that again? Are there any other details you could provide on that, like the renewal retention rate or just how successful upselling efforts have been with the data product? Yeah. I think what I was citing at the very beginning of the call was the growth in bookings. This was sort of a leading indicator of both what we've seen in the first full year. While we didn't present, you know, an actual revenue contribution, let me go back and maybe add a little bit more color. We are seeing very attractive indications of product market fit. Coming from a SaaS background, I can tell you when you go through your first renewal cycle, you get a real sense for whether or not your initial test customers liked, loved, or, you know, in something other than that. The renewals were high. The revenue contribution and the bookings growth and size of deals as the data product has expanded is satisfactory. What I talked about at the beginning there, Jeff Schmitt, was that we moved from $244,000 in bookings to $1.2 million. A year-over-year growth rate of 392%. Look, we recognize that when things are starting off, and they're small and they're off a small base, that may not be something that's sustainable. We think that the diversification of the revenue, the actual margin in a product like this, and the stickiness and predictability of it as a component of our revenue, that's one of the reasons why I cited the exchanges. They didn't start out as data companies and figured out that data was a big part of their revenue going forward. Look, we're really excited about it, otherwise I wouldn't have led the call off with it. We're still exploring all the different distribution opportunities and all the ways to dimensionalize data as a product across our customer segments. Obviously, we started off with institutions. We've been asked over the year, "Hey, is this gonna be available to retail investors? Is it going to be available to companies?" These are the segments that we serve. The answers are TBD. You can assume that we're looking for ways to essentially make data and Forge Intelligence pervasive across all of our customer segments. More to come. Hey, hey, Jeff. Mark Lee here to add on with Kelly. You know, we just talked about the API feature. In the past, we talked about providing data feeds to our clients. I just wanna reemphasize some things we've mentioned in the past. Kelly talked about additional use cases. You know, our data product features over 18,000 marks on private companies from over 150 mutual funds. We have clients that are even interested in that information alone. We have bots that gather that data very efficiently for us. Venture lending has turned out to be a really interesting customer segment for our data product that I think, you know, was a nice positive surprise. The other thing I wanted to mention, I meant to mention it when Owen asked the question. I mean, we have competitors that have announced data partnerships to try to enhance or their abilities in the private markets. Typically, the data partnerships they've announced are static. They're based on, you know, a private funding round data. They don't have the dynamic, you know, real-time prices that Forge offers on our data product. We think there's a really big difference when you kinda dig under the covers and look at the kind of data, stated information that other competitors are providing to their customers versus Forge. Got it. If there's a further downturn in the market and valuations, you know, how should we think about the impact on strategic investments this year? I presume like a Forge Europe is gonna take precedence, but is there sort of lower priority investments that would be put on hold to slow the cash burn in that case? I kind of feel like, we've set ourselves up to be pretty heads down and execution-focused for 2023. We really are focused on the initiatives that we talked about coming into this call. By strategic initiatives, do you mean M&A? No, I mean, just internal investments in the business and where that's being allocated to. I mean, if there's a downturn, you know, you're gonna have... Yeah. Look, we're gonna maintain. Mark mentioned this tangible, you know, cost structure that's in place. We think the combination of the way our compensation is structured and just our focus on organic, you know, execution this year gives us the feeling that we can manage our costs. The headcount's obviously a big part of it. We consolidated real estate at the end of last year. We think we're in a good position to moderate our cost structure. Look, if we see a more and significant downturn, then we'll adjust accordingly. We are committed, and I'll say it again, we're committed to lowering our cash burn. 2022 is a really expensive year because we built up coming out of 2021. We had to, you know, pay for our process to get public. We had to fund a lot of costs of being public. You know, insurance, compliance, legal reporting in and of itself was a thread the needle for us coming into 2022. We feel like we're in a good position to control our costs and reduce our burn for 2023. Okay, great. Thank you. Awesome. Ken. With that- I think we have one. Do we have one more? We have one more. Yeah, we have. Sorry. We have Ken, yeah. Yeah. Next question comes from the line of Ken Worthington with JP Morgan. Your line is now open. Hi. Thanks for squeezing me in. I wanted to dig a bit more into the third parties that help source trades. I guess maybe to start, what percentage of the business this quarter was sourced by these third parties, and where does that percentage typically lay? Maybe second, to what extent do you have the ability of converting clients using third parties directly to becoming Forge clients, and how might that work? Lastly, I think you mentioned in the prepared remarks pretty briefly that you're focused on reducing the number of third parties. I guess, how do you do that, and maybe why, if that's a source of liquidity and so on, why not just try to grow the direct side and keep the third parties as active as possible? Thanks for those. Yeah, let me talk about the third party- Yeah. -part. You can talk more about the percentages. Sure. I wanna be clear that it is an evolution of the market and an expectation that other third parties will be a part of the volume future at some level. At very least, we're gonna feel the impact of institutions increasing their volume. In terms of potential pricing pressure around take rate, Mark has mentioned this in the past, particularly as it relates to large block trades. I'd say that as a reality of being the market leader, we will increasingly draw third parties or others who traded away from us to Forge just by virtue of the fact that you're gonna go where liquidity is to clear your trade. I'd say this is part of a phenomenon in Q4. I'll let Mark get into the numbers. I'd say, we should expect that from quarter to quarter and from year to year, we will see fluctuations in third party, although up until now, I think we have overwhelmingly traded both sides here. I'll let Mark speak to the numbers. I just wanna make sure we understand that we will draw volume to the Forge platform, where maybe in the past, there has been a trade away, and we think that that's fine, and we'll accept and, you know, welcome that. Yeah. I, you know, a little bit of a backdrop. I mean, as Kelly mentioned, you know, year after year since Kelly came on board in 2018, you know, the percentage of volume that we've done internally where we were able to cross both sides of the trade at Forge, you know, versus working with, you know, outside counterparties, you know, has the amount of internalization, let's say, and internal crossing has continued to increase, right? It's kind of a volume begets volume, right? As we merged with SharesPost, you know, and really built up our critical mass, the need to interact with third-party counterparts, you know, really started to go down significantly. But it's during this kind of time of illiquidity, relative illiquidity, right, that at times we're always gonna do kind of what's best for our customers. You know, there are gonna be moments when the best thing for our customer, you know, to facilitate the trade is to kind of work with with a third party. For the most part, you know, we fundamentally believe that we're gonna get the cleanest execution, the highest probability of execution when we can manage both sides of the trade. That's ultimately kind of our driving goal. Now, I would contrast that with you've heard us announce our distribution partnerships with significant outside players, right? We announced Wells Fargo. In the prior year, we announced Morgan Stanley, and there's others that we haven't been able to announce publicly. Those partnerships, you could also, you know, see as another form of expanding distribution through a partnership means, which could result in higher volume at a lower net take rate, you know, as there's kind of economic sharing of the economics with our distribution partners. I think it all kind of plays together. Now, as far as the math is concerned, you know, what we're saying is there isn't a fundamental shift in what we charge for, you know, our commissions or take rates to institutions versus individuals. There's still the same dynamic going on. You can probably do your own math because we're not really disclosing kind of the level of detail of the use of outside counterparties. You can do the math in terms of looking at, you know, kind of our take rate as it's been, you know, for the prior quarters and look at the change in Q4. You can understand that there's a portion of our volume, you know, where we didn't take a fee. I think the math will work out, and you'll get a pretty good idea. Okay, fair enough. I appreciate that. Since I guess I'm the last one, just on the spread between the buyers and the sellers, I think you said it was 22% for Q4, and it looks like it's widened out again in January. I get that there's, you know, a lag between when trades may come on and when they actually get executed. What is the kind of macro factor or factors that really drive that spread between buyers and sellers? It would appear to be maybe less equity markets and more IPO markets, but maybe there's something even better. Just remind us again, where do you really want that spread to be? Yeah. Like I know spread of 0 would be ideal, but, like, there's a level, I don't know if it's like 10% or 15%, where you're close enough where deals start getting done more actively. Just can you remind us what that level is? Yeah, sure. It's Kelly. As we've repeated or previously reported, in periods where the, you know, price discovery equilibrium, as we call it, or the bid-ask spread is in a reasonable territory in terms of friction, that's been around 12%. We've been at around 23 pretty consistently. I wouldn't read into movements between 22 and 23 or 23 and 22. That is something that is one of the three elements that I cited as what we're watching in terms of really sustained movement in the market and volume. That 12% bid-ask spread is what we're looking for. The other thing that sort of affects that is sentiments around valuation. I think what we're also watching is, are buyers raising their price? Have we gotten to a point where the demand side is actually starting to raise their bid? I was looking at data today. Mark reported on that or just reminded one of the questions that this is going up and the discount is coming down. This is the first time we've seen this in this cycle. Again, that's another indication. Then the other thing that I mentioned is that well, sometimes there'll be some latency in this because of the way ROFRs work. Look, we're moving towards a market where some of these transactions happen through fund structures, which can happen relatively quickly. Some of them require a company to approve and waive a right of first refusal. That can create a lag effect such that even if we start to see trades set up, we may not be able to settle them for a 30-day or more window because the company's got to approve them. Even though we could see volume and the indications in our data of a better market emerge, it may not appear in our traded volume until the next quarter, depending on where we are in the cycle. In a world where companies increasingly know Forge and waive those ROFRs or give us a standing program, and we have some of these, those will mean faster and less friction trading in a single name. Part of what we're focused on here is having better trusted relationships with companies to decrease the friction as trades are trying to happen, as the market starts to turn around and correct itself. You know, in closing here, and Mark, you can jump in on any point you wanna make related to Ken's last question here. We're starting to see these green shoots, but we need to see it for more time, and we need it to emerge and get through ROFR cycles for it to start to translate into revenue. That's what we're carrying a moderate tone on here. We've not actually said anything before now that has indicated that we're starting to see a turnaround, but we're optimistic as to where we are now. Obviously, we're gonna continue to stay patient and control our costs until it comes back. Mark, do you wanna add a last point before we close out? Hey, Ken, on your question about the connectivity with IPOs, I was talking to the head of our capital markets desk. We would say that historically, you know, the IPO market, you know, does kind of play well with our business that as a company announces an IPO, you know, the year before they go IPO, there's increased interest and trading activity in that name. The market that we're experiencing today is a little bit different. You've seen a couple of companies announce, you know, their intent to go IPO later this year or, you know, or within the next 12 months. You know, what was relayed to me was that right now, what's drawing the buyers in, the investors in, the institutions that need to put money to work, you know, it's really the valuations. You know, if they're able to buy a high-quality growth company at a 50% discount to the last funding round, that creates an attractive opportunity, whether that company's announced an IPO or not, right? That seems for right now in the current environment to kind of be what's driving the institutional buy-side interest. Awesome. Thank you. Emma, I think one final question from Patrick, from Piper Sandler. One last question from Patrick Moley with Piper Sandler. Your line is now open. Patrick, you can ask a multi-level question. No. I was gonna ask about the right of first refusal. Kelly covered. Thank you. Okay. Well, with that, Emma, thank you for hosting us, and we look forward to seeing you guys here in the next quarter. We'll be at the JPMorgan conference coming up here in the morning, or sorry, JMP conference coming up on the sixth, as well as the Oppenheimer conference relatively shortly as well. Thank you. This concludes today's conference call. Thank you for attending. You may now disconnect.