Okay, our next session is with Forge Global, and thank you everyone for joining us. My name is Guru Siddharth, and I work with analyst Owen Lau in covering the information services, exchanges, and blockchain space here at Oppenheimer. Forge is a marketplace for private companies, it provides trading, data, custody, and other related services to investors, companies, and shareholders. Today, we're pleased to have with us CEO Kelly Rodriques. Thanks a lot for joining us, Kelly. Good to be here. For the people who are listening on the webcast, please feel free to submit your questions online, and we'll do our best to address them. So, Kelly, as a starting point, could you maybe briefly explain to us or just give us an overview of Forge as it stands today? Over the past few quarters, the company has evolved quite a bit, right? The Forge Next Generation Platform is now live, Forge Data is now actively being distributed, and the Accuidity acquisition is also complete, right? Given all of this change, can you maybe just talk to us about how investors should think about Forge's updated value proposition today and where it's headed 3-5 years from now? Great. Thank you. I think this is a really important time in Forge's evolution. The last few quarters have really been the proof points of investments that we've made in the last three years. We're really shifting from what we've been known as, a transaction-focused platform, into more foundational infrastructure for the private market. We just launched the Forge Next Generation Platform, which is primarily a marketplace now that's modernized the way trading works and can be extensible at a global level. It's integrated with participants ranging from high-net-worth individuals, institutions, family offices, and is really truly starting to get global. Part of that was the data part of our business and those strategic partnerships that you talked about with Yahoo, Intercontinental Exchange, and Fortune. These all represent the different segments that we operate in. Yahoo Finance is an enormous digital portal for investors to access pricing on the public side, and now with Forge Data driving the Yahoo Private, we're seeing investors come to Forge that really are interested in this next phase of the private market. Our deal with Intercontinental Exchange and the New York Stock Exchange is more of an institutional digital distribution thing, and then Fortune Media is obviously part of just additional transparency to the marketplace. The transparency and access of the next-gen platform with data supporting it has been part of our vision from the get-go, and now with these types of relationships, you'll start to see Forge everywhere. CNBC runs a Forge Data Point every week. As you pointed out, the acquisition of Accuidity really takes our Global Advisors business to the next level. The Accuidity Megacorn Fund, which is in the process now of becoming a registered fund, we think later in October, will really start to open up the opportunity to non-accredited investors. Over the next 3-5 years, we think Forge is in a really great position to be the definitive platform for transacting in the private markets. This is not just shares, but it's fund structures, it's the way the market is trading and will trade for the next 3-5 years. Very excited about talking more about that. Yep, extremely promising stuff, right? Before we dive into Forge, maybe just broadly, you know, the IPO market has shown some strong signs of recovery in the first half of this year. You know, several successful IPOs, Circle, CoreWeave, and Figma to an extent. This strength has also been reflected in the private markets, right? We saw Forge volume increase about 110% in the first half year- over- year. Despite this strength, the company remains cautiously optimistic, right? In expecting a full-scale recovery for the second half of this year, can you maybe talk to us about the drivers here, what you're seeing? If it's macro, what are you seeing beyond macro factors contributing to this cautious optimism? In your view, what would it take for the markets to fully open up again? Yeah, so we are cautiously optimistic. I'd say part of the answer to the question is there are some incredibly high-performing companies now that are capturing not only the interest of the public markets, but of the private markets. In the AI space, as an example, we're seeing a lot of interest and volume there. Obviously, for the market to fully open up, it takes more than just one sector. We have said in previous public statements that our volume is most highly correlated to a healthy IPO market. We're seeing that happen. At the same time, the companies that are going public are really kind of the next generation of players, and that means they are balancing growth with fiscal responsibility and profitability. The fintech sector is another significantly outperforming year-to-date sector that's behind AI. It's a little quieter. We're still looking at the broader market to open in the second half, but I think the macro environment is still a little bit uncertain. We're hoping that this will continue to improve, but we think other sectors like climate tech, healthcare AI, and vertical SaaS, these are now starting to show data signals in the private market that you could see some of them coming to market later on this year. Again, cautiously optimistic, but it's really that super high-performing AI space that's captivating the world right now in the private markets. Yep, yep, that makes a lot of sense, right? To capture all of this interest or to capture all of this activity, Forge expects to launch its first registered fund later this year, right? I believe you mentioned October through the conversion of the Megacorn Fund, right? We also expect this to be first of many in the index product family, right? Especially focused on retail and non-accredited investors. Can you maybe just talk to us about the potential here you're seeing, the long-term potential for these index products? What other kinds of products is the company considering and what can we expect in the near future? Every major asset manager in the world of note is talking about a higher level of allocation in alts and privates into portfolios. We saw this coming, and we already knew that the private market trades through fund structures. In our last couple of quarters, we've reported that 50% or more of our volume is now trading through fund structures. The Megacorn Fund was meant to take that to the next level by creating a data-driven index that was broadly accessible. Now with some of the news you're hearing coming out of Washington around 401(k) access to privates, we think the timing for this couldn't be better. Right now, as we've reported previously, the Megacorn Fund is roughly the top 60 names. While that's really interesting because it does have a diversified effect and because it will be available to non-accredited investors, we think that it'll be differentiated. What we see going forward is a family of rules-based products. It's meant to use data, use our data and our data position to open up other types of exposure that's diversified. That could be based on stage, thematic indices, or sector-specific. Think AI sector, climate tech, or fintech as specifically the fund structures that you could find later on. We really intend to lead here. Of course, we'll also have accredited-only funds as those are available with a little bit less regulatory oversight responsibility. Our future will be a combination of listed funds, 40 Act funds, and accredited, and maybe some QP funds. Understood, understood. Currently, what does the market look like for private market index funds, right? Who are you competing with, and how do you view Forge's position in this market at the moment? What's out there right now is pretty slim. There's nothing out there that is a, that we know of, that is an index-driven diversified fund. You've got Private Shares Fund that's out there that's an active fund. You've got a number of active funds that aren't really valued on the underlying. I'd say the incumbents like ARC that have had great success in opening up the market to a combination of publics and privates is what I would consider an incumbent. Then you've got some of the traditional PE firms that are traded publicly that offer exposure. I think Apollo, KKR, and Blackstone are now signaling some shifts in how they want to bring privates into the public market. We're also seeing a lot of activity at BlackRock, but these could also be partners of Forge. We're looking at opportunities to distribute through some of these. But I think in terms of rules-based products besides fixed income and private debt, this is a pretty unique product. Got it, got it, got it. You also touched on the distribution strategy, right? Which is what the conversation has revolved around for a while. You hinted at this, but what kind of potential partnerships, what kind of strategy are you thinking over there just to distribute these new products? Anybody that's really actively engaging with RIAs and wealth managers. Some of these RIAs and wealth managers will find the product directly through Forge, but this is the core business of some of the biggest asset managers around. We're in conversations with them now because we think it's probably some combination of people buying this through the Forge platform, or we've built up quite an extensive number of accredited investors. We virtually have no business in the non-accredited side. Any RIAs or wealth manager distribution partners that can help us access that for long-term potential success is enormous. We're in those conversations now, and we'll certainly be reporting back to everybody here in the public when we get further down the road. Got it. Maybe just shifting to Forge Data and the next-gen platform. We spoke about this a little bit on top. Forge Data is actively being pushed through several different distribution partnerships, right? All aimed at visibility. Can you maybe comment on the early traction that Forge Data has been bringing? When can we expect revenue from data to become a little more material? If there is one, can you maybe just remind us of your long-term target for revenue contribution from Forge Data? Yeah, you should think of data as one of the key strategic drivers of not only Forge's success, but of the evolution of the private market. I'd say really the phases of this, we break into three phases. The first one is making sure that our proprietary data is adopted in places that you trust. The phase one is adoption by the trusted. When you think about the differences between Yahoo, Fortune, ICE, and CNBC, these are all sources of trust with different constituents that will help condition the market around transparency and trust of a price for an asset class that has historically lacked transparency. The second strategy, which is where we are now, is data as an enabler of trading volume. This has already begun. As people become more trusted and they know, hey, you know what, Yahoo Finance says that a share of SpaceX is at this price, then their ability to click through and actually put an offer in or see it on CNBC or see it in the Fortune lists, that becomes the translation of adoption into increased volume and access. And then, ICE, which I'll bring up as sort of the third phase, is where we're actually in a revenue sharing relationship where our product is being sold. I'd say as we move from the second into the second mature data as an enabler and the monetization model for direct selling by partners, that's when you'll start to see the materiality of the revenue from data really present itself. Our hope is we start to show you when it starts to become material, and even in advance of that, certain KPIs that indicate how many people are seeing our data and using it to get an inquiry into Forge. I'd say reporting on revenue is a little bit further down the road, but before that, we'll start delivering certain KPIs around data adoption and how it's driving volume. Yeah, I assume it's too early to give us any kind of timeline, any kind of potential timeline on this matter? A couple of years. Okay, yeah, that's good. Maybe just shifting once again a little more. Towards the end of last month, we saw the announcement of the Silicon Valley Bank partnership, right? The deal that's focused on enabling access to secondary liquidity solutions that the company provides, right? Can you maybe just talk to us about this partnership a little more? What Forge's role is, and what Silicon Valley Bank's role is? I understand that this is a referral partnership. Is this by any means exclusive? Was this also a competitive win against the likes of Nasdaq Private Markets and Equities? Yeah, so this is an interesting one because Silicon Valley Bank is a trusted partner, lender, and service provider to many of the companies that are listed on Forge. They knew of us, but had a previous relationship with one of our competitors. They decided that it was so strategically important to them that they conducted a several-month-long review of all the players, which included three of our major competitors, MPM, EquityZen, and Hive. They ultimately decided to choose Forge with an exclusive partnership, given our breadth of services. What they're trying to do here, Guru, is they're of the understanding now that their clients are asking them about liquidity and lending opportunities in the space. They just felt like they had to have a partner that they could refer clients to, partners to from their issuer base into Forge. The most obvious use case here is a company is going to go to their trusted bank and say, "Hey, who should we work with here? Silicon Valley Bank, you know the space, you know all the players." This is really a statement of our competitive advantage over the others in the space. I just don't think the bank wanted to trust anybody other than someone that they had vetted themselves. We're really excited about that. I'd say what will come later are, besides referrals, full-blown integrations into some of these financial institutions. That was part of what the announcement of the next-generation marketplace was all about. Not only could you refer an issuer to Forge, you actually could integrate an experience within the bank. That could include some of the data that companies want to see because companies are interested in understanding, you know, who wants to buy my stock and at what price. We think part of the data integration for companies themselves could extend from the Silicon Valley Bank relationship. We're very excited by it. Yeah, once again, extremely promising stuff, right? We can, yeah, I mean, I guess we can go on and on about these things, but some larger trends that we must touch on, you know, tokenization still remains a very, very hot topic in this space. Several exchanges have already begun making noise about this, you know, Robinhood, Kraken, Coinbase. Within this context, can you maybe just talk to us about where you see the market for tokenization heading? If you think Forge has a role to play in it, and if so, where and how? Yeah, we're really excited by this. There are two levels of it. The first level is anybody that's going to try and tokenize these securities will ultimately have to have, we believe, access to the underlying. This is one of our beliefs about how this market will evolve. Obviously, you could tokenize any security you want. There are different players that may or may not choose to actually hold the underlying asset. This is some of the controversy around tokenization that you're seeing regulators take on right now. Let me be really clear. We believe that Forge will be a partner to anyone that's looking to tokenize and who also knows that to do it properly, you have to have an ownership and a secure position in the underlying security that you're tokenizing. That's answer number one. We are already being pursued by most of these credible platforms because we have access to the underlying. The secondary opportunity is even more exciting. That is for Forge to actively partner in the tokenization of securities on our platform, so that someone could come into Forge's Next Generation marketplace and have an opportunity to not only buy or sell a fund position, a direct position, but also a tokenized position. While we haven't made any specific announcements yet, we're in very detailed conversations with the most highly credible people in the space. Either way, our view is our platform was built to integrate into other distribution forms, and that includes tokenized distribution. Now it's just a matter of who we partner with to go do it more formally. We think it's coming, and we're really excited about it. We're already hearing from many of the people that are making announcements in it today. Very well. Moving on to another large topic, which is regulation, right? You know, that still remains a key topic when private markets is brought up. In 2025, we've seen considerable improvements, right, including the House passing a bill to expand the accredited investor definition. Recently, I believe last week was when President Trump signed an executive order to allow 401(k)s to include private market investments. We touched on this a little earlier. Can you just maybe give us an official take on what Forge sees in this current regulatory landscape and how have conversations with legislators and policy makers been? Yeah, so there's a lot of momentum here, and it's all over the place. It's crypto, it's private assets. The announcement on 401(k)s was particularly interesting. Everyone knows this, back in 2019, we acquired a specialized custodian that was focused on holding private assets in retirement accounts. Back in 2019, a bunch of people asked me, "Why did you do this?" I said, "Because there is a world where today you can invest your IRA in an alternative asset. A lot of people don't know how to do it, and there's a specialized custodial capability to do it. Forge is going to be there as this becomes more mainstream." This announcement on the 401(k) was right down the middle of the fairway of what we thought was going to happen at some point. The reason is simple, because the alpha and the exposure to the asset class in a safe and sort of well-allocated way is what now some of the largest, most respected asset managers in the world are seeing. They're pushing for this. The momentum that's now coming, we think we're in a unique position to take advantage of. We actually believe that a rules-based product like the 40 Act Fund is one of the perfect products to put into the 401(k)s that people are talking about. There's been a lot of news here related to, you know, are these assets liquid enough? We think that obviously some products are more liquid than others. The 401(k) plan products really are going to tend to be more towards listed funds. We're in a really great position to exploit that. In the last year, we've been on Capitol Hill talking to the SEC, talking on both sides of the aisle about policies that could help inform what the future holds for access to the asset class and to do it in a safe and sound manner. This ruling that went through on the definition of accredited, this is still working its way through the Senate. There are now actually three bills that have been pushed into the Senate. We're not sure which one of them is going to win. They all have varying differences to them that are nuanced. We think this all emphasizes really what's coming next, which is a broader support from the government to allow more investors to have access to the asset class. We think that's great for the market. It's great for Forge. It will also come with some guardrails that we think are important to ensure safety and soundness. In your experience, have legislators and policymakers been open to conversations with industry participants like private market exchanges? Do you see that happening? Absolutely. It's funny, if I may just give a little bit more color on this. Depending on what side of the aisle you're on, you're finding good reasons to do this, whether it's because you believe more employees should have the ability to sell their stock because they work at these companies for, you know, 5-6, 10 years. If they're not going public, they've put a lot of their energy in the creation of these extremely valuable businesses. I think regulators see that there's a certain right to having access to that wealth distribution dynamic that happens when those companies finally do go public. On the other side, it's just pure capitalism. You want companies to be able to have flexibility in how they raise capital, who can invest in them, and flexibility in providing liquidity to their shareholders, whether they're individuals or, you know, funds that invested in them 15, 18 years ago. It's been extraordinary to have these meetings because in a world where there's a lot of division, partisan division, this is one issue that's gotten a lot of bipartisan support. We're super excited. We've had regulators show up to our events and want to speak and listen as well. Got it. That certainly is highly encouraging, right? Going back to just Forge specifically, on the most recent earnings call, you guys kind of reemphasized the company's commitment to reaching positive adjusted EBITDA by 2026. To maybe just round this entire discussion out, can you share with us what's driving this confidence? We understand that Forge has been making steady progress, has reached certain milestones. Can you maybe just round this out for us and talk to us about how and why you're feeling confident in reaching break even next year? Yeah. First of all, let me just say this. We recognize that we're in a massive TAM business and we're doing something that's really exciting in the market that we're in at this moment. We also recognize that the public markets want to see a combination of growth and they want to see disciplined operating performance. We're completely committed to doing this. We see at this moment there's a convergence of some of the scale and operational scalability. Some of this is supported by the recent launch of the Forge Next Generation marketplace. It makes it more efficient for us to handle counterparties at scale. We just launched it, and we're still in this first sort of 90 days of tuning. If you look at that, plus the EPS accretion of Accuidity, plus the fact that some of our offshoring technology development is being insourced or in-house now, we're going to see a combination of efficiency gains and revenue scale and a commitment to driving that break even that we think will get us there. We're really excited about it. I'd say it's probably with all of our strategic priorities tied for number one in terms of what we're committing to doing and making sure it happens. As we've called out before, we personally think it's right around the corner, right? We can almost touch it. We also understand there's no formal guidance that's been issued yet. Can you maybe just tell us about the timing of break even next year, or is it something that we must wait for a few more quarters? You know, James Nevin is my CFO, is on holiday with his family in Switzerland, and I think we've made a very strong statement about it. I think we're looking at obviously achieving efficiency and taking actions before we get into 2026 so that 2026 is a reality. I think I'll wait for James to get back to give any further color on any sort of timing specifically in 2026. Got it. Got it. Shifting to an entirely different priority of Forge, which is international expansion. It's one that we haven't really touched on over the past few quarters, justifiably so, because priorities and focus have been elsewhere. Can you maybe just give us an update on where Forge stands in all of its international efforts? More importantly, is it still a priority or are we still looking at certain other growth phases of the company? Yeah. We're super excited about now the contribution in 2025 so far from our European operation. If anything, we ended 2024 with a commitment to make our European operation a break-even operation before the end of 2025. We now have high confidence that that will happen given the kind of volumes that they're putting up. What that means is I can now start looking at our next international location. We're currently looking at Asia, and we're currently looking at the Middle East. We haven't made a decision yet, but based on the visibility we've got around the revenue contribution that we've seen just through the first half of the year, we're ahead of plan, and we're very confident that our burn in that investment in Europe will have been extinguished coming out of 2025. In 2026, we will look to another location. We're not sure how we'll get there, whether it's a land and expand as we did in Europe or whether it's an acquisition, but we're monitoring opportunities in both the Middle East and Asia. Got it. Got it. Another thing I wanted to touch on was the fact that investor conversation has been somewhat limited, right? It's always been SPVs or distribution strategies or the overall IPO market outlook. Is there anything that you personally wish the investor community focused on a little more, just in understanding the private market exchanges overall and Forge specifically? Yeah, that's a great question. I think we're now at a point where the market needs to understand that this is a technology-driven business. I think because we didn't announce our tech, really the outcome of our tech until we launched the Forge Next Generation marketplace, I don't think there was an understanding about just how scalable and how tech-first this business is. I think that investors out there should think about us as a combination of a tech-driven platform and a recurring revenue data business. That's what will emerge in the coming months and quarters of Forge's performance as we end 2025 and go into 2026. I think that's something that I think will change and should change the view of how we trade, what multiple we should be trading at. If you look at the contribution that we expect to get from our asset management in the Accuidity deal, that should also be factored into the way you look at the aggregate multiple that we trade at. Think about what does a highly scalable data platform trade at, what does a highly attractive asset manager trade at, and what does a high-performing exchange trade at. I hope that the takeaway from this group and others is they see Forge differently than they did maybe in 2023 and certainly part of 2024. That's very clear. Thanks a lot, Kelly. I think we're two minutes over time, but I think the story is very clear. We certainly understand where Forge stands right now, and we have pretty solid visibility going into 2026. Thanks a lot for joining us today, Kelly. We hope to see you soon and continue the conversation throughout this year. Thank you, Guru. Thanks, everybody. Thank you. We'll see you guys on the next session.