Forge Global, the marketplace for private securities, has reported its fifth consecutive quarter of revenue growth in Q2 2024. The company saw a 15% increase in revenue over the previous quarter and a 32% rise compared to the same period last year. Significantly, marketplace revenue surged by 103% from the year-ago quarter.
In a bid to further improve margins and reach profitability, Forge Global has initiated a cost reduction plan that includes an 11% cut in headcount costs, anticipating annual savings of $11.3 million. The company's CEO, Kelly Rodriques, expressed optimism about the private market's momentum and expects Forge Global to reach breakeven adjusted EBITDA by 2026.
Key Takeaways
- Forge Global's revenue grew 15% from the previous quarter and 32% year-over-year.
- The company's marketplace revenue increased by 103% compared to the same quarter last year.
- An 11% reduction in headcount costs is part of a cost reduction plan, estimated to save $11.3 million annually.
- CEO Kelly Rodriques predicts breakeven adjusted EBITDA will be achieved in 2026.
Company Outlook
- Forge Global expects to achieve breakeven adjusted EBITDA in 2026.
- The company remains committed to investing in its next-generation platform while realizing cost savings.
Bearish Highlights
- The median discount to the last primary round was 32%, indicating some valuation pressures.
Bullish Highlights
- The bid-ask spread decreased to 6.4%, the narrowest since Q3 2021.
- The number of companies represented by IOIs reached a record high of 551 in Q2.
- One quarter of the companies are trading at par or better as of June.
- IPO proceeds for 2024 have already surpassed the total for 2023, with the number of IPOs up 37% year-to-date.
- Late-stage venture funding in the U.S. saw a 61% increase in Q2 compared to the same quarter last year.
Misses
- No specific misses were mentioned in the provided context.
Q&A Highlights
- The expense actions are based on extrapolating recent revenue growth.
- The increase in trading volumes is attributed to institutional interest.
- The lower take rate is due to spikes in institutional volume and block trades.
- Cost savings will primarily be realized in Q3 and Q4, excluding severance costs.
Forge Global, trading under the ticker symbol, has demonstrated robust growth in the private securities marketplace, with a notable increase in revenue and marketplace transactions. The company's strategic focus on cost reduction, while maintaining investment in innovation, positions it for a path to profitability. The positive correlation between its transactional revenue and the buoyant U.S. IPO market, along with a strong late-stage venture funding environment, suggests a favorable outlook for Forge Global. The company's unique data-driven approach to private market indexes and the rollout of its global order book in Europe indicates a commitment to expanding its competitive edge. With a focus on building high-quality data and establishing itself as a trusted pricing source, Forge Global is poised to capitalize on the growing interest in private market investments.
InvestingPro Insights
Forge Global (FRGE) has reported promising revenue growth, yet the company's financial health and stock performance paint a more nuanced picture. According to InvestingPro data, FRGE has a market capitalization of approximately $237.16 million, which reflects the market's current valuation of the company. Despite the positive revenue growth mentioned in the article, FRGE's price-to-earnings (P/E) ratio stands at -2.67, and the adjusted P/E ratio for the last twelve months as of Q2 2024 is even lower at -3.12, indicating that the company is not currently profitable.
The revenue growth for the last twelve months as of Q2 2024 was 21.91%, outpacing the previous quarter's growth of 33.27%. This suggests that while the company is growing its top line, it has yet to translate this into net earnings. Gross profit margin remains high at 99.22%, but the operating income margin is negative at -126.97%, showing that expenses far exceed gross profits.
InvestingPro Tips for FRGE highlight several concerns for potential investors. The company is quickly burning through cash and analysts have revised their earnings downwards for the upcoming period. Furthermore, they do not anticipate FRGE will be profitable this year, and the company has not been profitable over the last twelve months. These factors are crucial for investors to consider, especially when the company's stock price has performed poorly over the last decade and has fallen significantly over the last year.
For those interested in a deeper analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/FRGE, which can provide further insights into FRGE's financial health and market performance.
Full transcript - Forge Global Holdings Inc (FRGE) Q2 2024:
Operator: Good afternoon. My name is Angela and I will be your conference operator today. At this time, I'd like to welcome everyone to the Forge Second Quarter 2024 Financial Results Conference Call. On today's Forge Global’s call will be Kelly Rodriques, CEO; Mark Lee, CFO; Lindsay (NYSE:LNN) Riddell, Executive Vice President of Corporate Marketing and Communications; and Dominic Paschel, SVP of Finance and Investor Relations. 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. And now I will now turn the call over to Lindsay Riddell. Ms. Riddell, you may begin your conference.
Lindsay Riddell: Thank you, operator, and thank you all for joining us today for Forge's second quarter 2024 earnings call. Joining me today are Forge’s CEO, Kelly Rodriques; and Forge CFO, Mark Lee. They will share prepared remarks regarding the quarter's results and then take your questions at the end. Just after market closed today, we issued a press release announcing Forge's second quarter 2024 financial results. A discussion of our results today complements the press release, which is available on the Investor Relations page on our website. This conference call is being webcast live and will be available as a replay for 30 days beginning about one hour after the conclusion of this call. There's also an investor presentation on our IR page. 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 uncertainties and there are important factors that could cause actual outcomes to differ materially from those included in the statements. We discussed these factors in our SEC filings, including our quarterly report on Form 10-Q, which can soon be found on the IR page of our website and the SEC filings 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 the 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 of our website. Additionally, we have posted our second quarter supplemental information on the same page. Today's discussion will focus on second quarter 2024 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 of our control. With that, I'll turn it over to Kelly.
Kelly Rodriques: Thanks all for joining today. We're excited to share our Q2 results with you amidst a continued market recovery and consistent and progressive growth at Forge. We're pleased to announce that in Q2, we recorded our fifth consecutive quarter of revenue growth. Revenue grew 15% over last quarter and rose 32% compared to the year ago quarter. This performance was attributable to continued upward momentum in our trading business as buyers returned to the private market and as valuations continue to trend upward. Perhaps the most telling measure of the market's recovery, marketplace revenue is up 103% compared to the year ago quarter. Forge and the private market have come a long way. For the past two years, we've continued to invest heavily in our next-generation technology platform to enhance our operational efficiency and the efficiency of this market. In that time, even as the market flirted with a near standstill, we introduced new products and new innovations, including Forge Pro and our first two private market indices to position ourselves for the market's reawakening. We're seeing that as IPO volumes start to rise and as VC fundraising picks up steam. While we're excited about our progress as well as our improvement in the top line revenue over the past five quarters, we are never satisfied, because of the investments made over the last couple of years, we're in a position now to advance planned cost savings and deliver them to our bottom line. To that end, we announced today a decisive action to further reduce our expenses and accelerate our timeline to profitability. Our action today results in a reduction in headcount costs by roughly 11%. This action, combined with other expense reductions, will significantly improve our margins and produce savings of an estimated $11.3 million on an annualized basis. I want to be clear. Any decision that affects our employees and their families is never easy. I have incredible appreciation for the valuable contributions all our Forge team members have made to this organization. We have intensely talented people here and losing any of our team members is difficult. However, this prudent and necessary step will strengthen our financial posture and it is consistent with the next generation platform strategy we laid out two years ago to deliver margin and efficiency improvements. The action today should not be viewed in isolation. We will continue to reap the benefits of incremental gains in productivity and efficiency as we roll out more and more of our next-generation platform. The market's continued momentum and revenue reacceleration puts Forge in a strong position and accelerates our timeline to profitability. Given the path, given the continued growth and the recovery of our markets, business and the cost actions we announced today, our models indicate Forge should achieve breakeven adjusted EBITDA in 2026. Mark will come back to this shortly. We believe that Forge and the private markets are at an inflection point. The considerable investments we've made in our brand and in our technology, the prescient acquisition of our custody business, and the progress we've made in product innovation throughout the market's downturn have prepared us for this moment. With that, I'll turn it over to Mark to dive deeper on the financials.
Mark Lee: Thanks, Kelly. I'll give more details about today's cost reductions as well as Forge's timelines of profitability. But first, let's cover the strong results from the quarter. In the second quarter of 2024, Forge’s total revenue less transaction based expenses totaled $22 million, up 15% from last quarter and up 32% from the year ago quarter. Our marketplace revenues continue to recover with renewed investor confidence amidst the continuation of the great reset. Total marketplace revenues less transaction based expenses reached $11.4 million, up from $8.5 million last quarter, reflecting the continued improvement from the trough recorded in Q1 of 2023. Marketplace revenue rose 35% over last quarter and jumped 103% from the year ago quarter. In addition, while still early, we are starting to gain revenue traction in our European business. As a reminder for modeling purposes, we historically experienced a slowdown during the third quarter given the prevalence of summer vacations and holidays. Transaction volume for the quarter increased 62% from $263 million in Q1 to $426 million in Q2, bringing our year-to-date volumes nearly to full year 2023 levels. Meanwhile, our net take rate in the second quarter moved from 3.2% to 2.7%. As previously discussed, net take rate fluctuates depending on the mix of trading in any given period. In Q2, we were able to complete several large block trades, which drove higher volume and lower take rates. Our custodial cash balances total $495 million at the end of Q2, up from $481 million at the end of the first quarter. Total custodial administration fees were $10.6 million, roughly flat to the prior quarter. We can see meaningful spikes in cash balances related to customer investment activities. While interest rates are expected to decline, current rates remain elevated, driving investors to seek higher yields. At the end of Q2, total custody accounts were $2.2 million and assets under custody were $16.6 billion, both essentially flat the last quarter. Second quarter net loss declined from $19 million to $14 million quarter-over- quarter. This declining loss was attributable to improved revenue and lower operating expenses due primarily to a $2.8 million non-recurring legal expense in the first quarter. In the second quarter, adjusted EBITDA loss was $7.9 million, compared to a loss of $13.5 million last quarter as revenue improved and non-recurring charges declined compared to Q1. Excluding one-time expenditures of $5.6 million associated with the resolution of legacy legal matters, net cash used in the quarter was $8.8 million compared to $12.4 million last quarter. As a reminder, the first half of our fiscal year includes timing driven cash flows, such as the payout of our annual bonuses in Q1 and the payment of annual corporate insurance in Q2, neither of which will recur in the second half of 2024. Cash, cash equivalents and restricted cash ended the quarter at $121.6 million compared to $130.7 million last quarter. This excludes $1 million [ph] and $7.6 million in term deposits, respectively, classified as other current assets, including these term deposits as cash. Our total cash at the end of the quarter stands at $122.6 million compared to $138.3 million in the first quarter. From a housekeeping perspective, our weighted average basic number of shares used to compute net loss was 183 million shares, and our fully diluted outstanding share count as of June 30 was 201 million shares. For Q3, we estimate 184 million weighted average basic common shares for EPS modeling purposes in a loss position. As previously mentioned, we have taken actions to reduce our expenses to accelerate our path to profitability. Our actions will generate approximately $11.3 million in annualized savings against budget, excluding one-time severance charges. Of the $11.3 million in savings, we estimated $8.8 million in headcount related expenses and $2.5 million in other expenses. Our current headcount sits at 342 and post expense actions we expect our headcount to reduce to approximately 319. As Kelly mentioned, we have internally modeled our path to profitability, which, based on our assumptions, we expect to reach in 2026. Our modeling assumes that total headcount related spend will remain relatively flat post our enacted cost reductions. We have also incorporated projected improvements in automation, operational efficiencies, and productivity driven by the technology investments that we are making as we build and scale Forge into a global business. If one were to extrapolate forward the growth of marketplace revenue over the past six months, combined with the expense assumptions previously outlined, our models project reaching breakeven adjusted EBITDA sometime in 2026 based on organic growth alone. While our models are based on assumptions that are subject to change, we believe that we are making targeted investments and taking the necessary steps to improve our productivity growth trajectory and to achieve profitability. I’ll hand it back to Kelly for a brief market overview before we turn it over for questions.
Kelly Rodriques: Thanks, Mark. We continue to see momentum – positive momentum in the private market since valuations and investment activity bottomed out in Q1 of 2023. We’ve seen buy-side interest continue to outpace sell-side interest. We noted in our latest Forge private market update that the bid ask spread continued to trend downward to 6.4% at the end of June, recording its narrowest range since Q3 of 2021. The number of companies represented by our IOIs increased to 551 in Q2, our highest number on record. And we noted that while the median discount to the last primary round was 32%, one quarter of companies are trading at par or better in June. This tells us that more companies are emerging from the great reset as valuations improve and investments start flowing again. As we look forward to our growth for the future, we have observed reasonable correlation based on historic data – our transactional revenue based on historic data between our transactional revenue and both the health of the U.S. IPO market and the health of primary late stage venture funding environment. As of the end of July, proceeds of 23.2 billion from the U.S. IPO market. Year-to-date already exceed full year 2023 IPO proceeds and the number of IPOs is up 37% year-to-date, according to Renaissance Capital data. And U.S. late-stage venture funding total 19.5 billion in Q2 of this year, a 61% improvement compared to the year ago quarter, according to PitchBook. We provided charts in the Forge investor supplemental to demonstrate these historical correlations. Similar to public markets, we tend to see some softening in trading activity during the summer due to vacations and holidays. With that said, we are aware of other factors that can affect investor and market sentiment, including the upcoming election, Fed actions and global events still we remain optimistic that even if every quarter isn’t up and to the right, the momentum is building in the private markets to help us finish out the year strong. Thank you. With that, Angela, can we open to Q&A?
Operator: All right. Thank you. We will now begin the question-and-answer session. [Operator Instructions] Your first question comes from the line of Devin Ryan with JMP Securities. Please go ahead.
Unidentified Analyst: Hi, Kelly and Mark. This is Alex stepping in for Devin Ryan. Hope you guys are doing well. Nice to see the progress you guys made this quarter. I guess, first, just to start on the expense side, you guys gave a nice – a lot of nice color in your remarks. But with the expense actions you’re taking, how should we think about a revenue range that could support a break-even level for the company going forward? Thank you.
Kelly Rodriques: Yes. Hey, Alex. Thanks for the question. So, I mean, if you’re – are you asking specifically about the revenue numbers that we were describing in our break-even model?
Unidentified Analyst: Yes. Yes. Yes.
Kelly Rodriques: Okay. So kind of, as I said in my comments, what our revenue model did was to simply extrapolate revenues, looking at the growth that we’ve experienced recently. So if you look at the revenues in the first half of 2024, compared to the back half of 2023, and calculate kind of the growth in marketplace revenues, we’re using that as a proxy for growth and revenues going forward. And it was using that extrapolation of prior historical growth in order to model the break-even point in 2026. Does that answer your question?
Unidentified Analyst: Yes. Yes. I believe so. That’s helpful there. And then, just to follow up on the trading volumes and take rates, total trading came in well above our expectations. Take rate was a little lower. was this a resurgence of more institutional players coming back to the platform, or can you just walk us through the dynamic there? That’d be great. Thank you.
Kelly Rodriques: Yes. We definitely are seeing an increase in institutional interests, Alex. And as we’ve been communicating now for, I think, the past couple of quarters, we’ve indicated how the ratio of IOIs between buyers and sellers, has in the last several quarters, shifted where we’re seeing more interest and more buy IOIs come in exceeding the amount of sell-side IOIs, which was a very positive development, right. As we previously discussed, during 2022 and 2023, it was a two to one ratio on the sell side. So it was very welcome to see the institutionals coming back in 2024, as evidenced by the ratio of buy-side IOIs to sell-side IOIs. And the other thing that I would note is when you think about the increase in volume and the lower take rate, the 2.7% that we mentioned for Q2, this has happened in prior years, right. We see spikes in institutional volume and block trades. In Q4 of 2022, our take rate was 2.8%. In Q4 of 2021, it was 2.9%. But in all three years, 2021, 2022, and 2023, our blended weighted average take rate was 3.3% in each of those years. And so I think having a quarter in the period where you see heavier block trades and institutional activity, that leads to a lower weighted average take rate. It’s something we’ve seen in the past, and we expect to see on a go forward basis from time to time.
Unidentified Analyst: Great. Thank you guys for the caller. Appreciate it.
Kelly Rodriques: Thanks, Alex.
Operator: Your next question comes from the line of Ken Worthington with JPMorgan (NYSE:JPM). Please go ahead.
Unidentified Analyst: Hi. Good afternoon, Kelly and Mark. This is Michael [indiscernible] in for Ken Worthington. Thanks for taking the question here. My first one I just wanted to touch on again on the comments around the cost actions and really ultimately around the path toward breakeven and profitability in 2026. I mean, can you also provide some color or commentary in terms of maybe the cash burn trajectory in relation to the break-even 2026? Comments and while the profitability has ultimately accelerated or changed, this is actually also change the longer-term outlook for normalized Forge margins in the future as well. Thanks.
Kelly Rodriques: I think there’s a bunch of questions that you kind of threw in there, Michael. One thing I would start with and make sure, try to take them one by one. But when we built our model, we based it built on adjusted EBITDA, the primary delta between adjusted EBITDA and cash flow breakeven is the interest income that we receive on our cash. And so adjusted EBITDA breakeven even implies a low level of cash flow profitability given the interest income. So that was the first question. Sorry, can you repeat the second one?
Unidentified Analyst: The second one is really just touching on, the cost actions that you announced today and maybe incremental automations and efficiencies that are coming on board sometime in the near term. Does that ultimately also impact even the longer-term forged [ph] model for normalized margins ahead?
Kelly Rodriques: Yes. The specific reference to the improvement in productivity and efficiency that we built into our model kind of is based on detailed analysis we’ve done on the benefits of the investments that we’re making in our technology platform. And so we’ve always said, right, Forge is here to transform the private markets. And as we see these tech improvements come into place and we start to realize those productivity benefits, we expect our gross margins to improve in our core trading business. And that’s kind of what we’ve modeled in over the next several years as we talk about the path to break even. So it’s a combination, obviously, of expecting that our revenues will continue to grow. And we’re using the extrapolation of revenues that I mentioned previously. We’re building in the productivity and gross margin enhancements that we’ve modeled. And then we’re expecting to basically keep our costs relatively flat, incorporating the expense savings that we announced earlier.
Mark Lee: The only thing I’d add to this is we always contemplated in setting the strategy for NextGen platform, that it was going to ultimately result in a globally scalable and attractive gross margin business. I think what you should take away from today is, in addition to realizing that we really are committed to moving up the point at which we get to cash flow break. We thought that was very important for the business and the investments we’ve made over the last couple of years. We think we wanted to start to share and show the market will result in that path to profitability being closer and perhaps perceived.
Unidentified Analyst: Great. Thanks, guys.
Kelly Rodriques: Thanks, Michael.
Operator: Your next question comes from the line of Owen Lau with Oppenheimer. Please go ahead.
Owen Lau: Good afternoon and thank you for taking my question. Could you please remind us the dynamics between the IPO market and your transaction volume? Does the IPO trigger more, let’s say, pre IPO trading to test the water? That’s why your volume goes up, even though there’s still a kind of a big valuation discount compared to the last funding route. Thanks.
Kelly Rodriques: Yes, thanks for the question, Owen. I think, we have covered, we have discussed this kind of in the past, I would say from a qualitative standpoint, clearly, when we have a normally functioning IPO market and investors, see private companies successfully come to market, it generates a lot more enthusiasm to try to get to invest in private companies prior to the time that they go public to be able to help participate in that private company alpha, right, prior to the actual IPO. I think the other thing that we’ve talked about is that when a company announces that they’re going to go public, and typically that could be one year to 18 months ahead of the time that they go public, there’s increased activity historically in those names as the shareholders typically see an opportunity to take their gains and avoid a six-month lockup. So investors are motivated to kind of take the bird in the hand, and investors are motivated to try to get in prior to the IPOs. So that's the kind of qualitative explanation and discussion that we've had in the past. I would say what we have done here is that if you look at the investor supplemental. Right. It's included now, what we have done here for you is we plotted the relationship between changes in our market revenue with the IPO count. Technically is the North America technology IPO count. And so you can see the relationship, and it's a relatively high correlation in R-squared. And so now we're kind of giving you data, quantitative data that really correlates or is very consistent with what we described qualitatively.
Kelly Rodriques: Yes. I mean, we've felt this, though, for a while. Owen this is Kelly, we could we've talked about this in the past. Qualitatively, I think Mark has pointed it out, but we did want to include in the supplemental this time some of the historical correlation that we're seeing. So we're really trying to back it up with a little bit more detailed data. But we've seen a relationship here between IPO activity and late stage investment activity.
Owen Lau: Got it. And then going back to the expansion reduction plan, could you please maybe add more color on how much savings you expect to capture for the second half of this year? I mean, should we expect just half of the $11.3 million this year and then the full $11.3 million in 2025? And then will there be any, like, other reinvestment so that, the total expense saving will be lower than that? Any more color would be helpful. Thanks.
Mark Lee: Yes, thanks. Thanks for the question, Owen, for as you kind of look at your models, what I would say, specifically, I broke out the $11.3 million. The $11.3 million is against our budgeted expenses. And we kind of said it's primarily headcount related, with some other expense saves as well. Now, if you look at kind of the saves relative to kind of run rate, I think you can take that $11.3 million and assume that roughly speaking, two-thirds of it is against our current run rate, and one-third is kind of cost future cost avoidance. So I think that the bulk of it should be achieved in Q3 and in Q4. But there's probably some straggling timing related issues. But the vast majority should be released, should benefit as us on a go forward basis. We are also very specific to say that excludes severance, Owen, and obviously, severance would be a onetime expense.
Owen Lau: All right. Got it. Thanks a lot.
Kelly Rodriques: There was a question, too, about any more new investments in there, too. Is that right, Owen?
Owen Lau: Yes, exactly. Like, would we invest some of the save into the business, maybe this year or next year, excluding the severance?
Kelly Rodriques: The short answer is no. We are fully committed to continuing the investment levels in the next-gen platform with this taken into account. So we expect to, as Mark said, realize the full amount in 2025 and still continue to make investments in ongoing margin expansion and efficiency with the people that we've got here now.
Mark Lee: Owen, I would as we've said in prior calls, I mean even though we've had a hiring freeze for the past seven quarters, right, we work really hard to try to make sure we're focusing our resources on the top priorities and opportunities. And as we discussed before, even during those seven quarters of hiring freezes, we've been able to initiate our efforts in Forge Europe. Roll out our data product Forge Pro, put out our Forge Index, our option based lending program. So even kind of in a constrained cost control environment, obviously, we always seek to prioritize our resources towards kind of the opportunities that have the biggest payback.
Kelly Rodriques: Yes, just a reminder to everybody on the call, we did talk last quarter about the rollout of our global order book, the extensible capability for us to now expose Forge on a global level. This is, as Mark referenced earlier, part of how our revenue contribution from Europe has started to emerge. And, we are seeing now that relationships in Europe having access to counterparties through that extensible global order book are now starting to drive revenue for the business. We'll talk more about that in future quarters.
Owen Lau: Thanks a lot.
Operator: Your next question comes from the line of Jeff Schmitt with William Blair. Please go ahead.
Jeff Schmitt: Hi. Thank you. So how is your data business doing in this environment with transaction activity up nicely in the quarter? And what are you doing to increase adoption there? I think you'd mentioned that last quarter versus kind of focusing on growth, but just curious what you're doing there and how that has been performing?
Kelly Rodriques: So I think one of the things that we referenced previously is a focus on data adoption, and we have really employed a strategy this year to get Forge data everywhere. I think we wanted to keep the focus of our statements today on our performance, our optimism, and essentially the cost savings decisions that we've made. I will say this, we are seeing very good uptake on Forge Pro and on the use of Forge Data. And I look forward to reporting on some specifics of this in our next earnings call. But I'll let Mark reference any of the specifics that we've got.
Mark Lee: Yes. The only thing else that I would add, Jeff, is just as a reminder to the entire group, we think about, you can think about our data offerings kind of in three buckets, our Forge Pro product targeted at institutional trading clients, our subscription based Forge intelligence product, that's targeted really at clients that are not specifically looking to trade, but find the data very helpful, to their business. A good example we've put in the past our life venture, venture debt businesses, and then the third. And what, as you know, Jeff, I'm personally really excited about, but our whole drive data business, and that's Forge price and the Forge indices. Right. And there's two indices, our Forge private market index as well as the investable Forge liquidity private market Index. So we think about our data business kind of in those three different buckets and plugging away, and have a lot of optimism for the future opportunity.
Jeff Schmitt: Great. And then what does the competitive landscape look like, actually, for private market indexes? I mean is there many out there today, or, I guess, do you foresee many kind of emerging in the market, and what do you see as you’re kind of advantage if they do?
Kelly Rodriques: Yes, this is a really interesting question, because there's been a fair amount of news actually coming out of some larger places. I'm sure everyone has seen the commitment that BlackRock (NYSE:BLK) just made in their recent acquisition about emerging passive strategies and products relating to the private market. We see this as an incredibly powerful sign of what's coming next in the market. We believe part of our excitement around derived and indexed data is that having funds that are built on passive strategies and passive opportunities is going to open up this market for a whole set of participants that aren't here now. And so we've believed in this strategy for a couple of years. And as we've reported previously, we now have our first index, investable index, powered by Forge, by Forge's private market index. We see more of that coming, but I'd say as it relates to competitive, most of what's out there today that have been cited as indexes aren't using the depth of clean data that Forge has as the market volume leader. We're seeing indexes announced that are using fund marks, which we believe are a less reliable and more stale source of data by which to build a product off from. And so we are really excited about our position in the market here. As far as competition. This is still a business from a revenue generating standpoint, that's pretty small, and there's a number of small players out there that are aggregating data from third-party sources. We believe that we've got a competitive advantage given the depth of our global order book. We talked about some of these metrics earlier in the call, and we expect that at some point that part of the market's going to consolidate. There are just too many small players out there to raise capital with very little and meaningful revenue to support additional investment. So we're watching and we're continuing to lead from the front, but we think this is a really exciting part of our future. And we're considering when and if to start breaking this out and start reporting on some of the KPI's separately, but we'll consider that in the future. For now, we believe 2024 will largely be a year focused on continuing to build the highest source of high quality data in the space and getting our name and brand out there associated with a singular source of truth for pricing. So we're excited about where this is going, but we'll look for the future to start reporting on it.
Mark Lee: Hey, Jeff, I would add just a few comments on top of Kelly's, obviously, as Kelly referenced the BlackRock acquisition of Preqin, MSCI with their, they completed their acquisition of Burgiss and rolled out 130, I think was the number indices. I mean, those are both, as Kelly mentioned in reference, those are both situations where they have fund level information which we think is very different from secondary market pricing at an individual company level. And then you see a lot of articles out about people. I mean, Larry Fink talked about indices. You hear discussions around ETF's. There's a closed end fund out there that, has been in the press. There's a lot of attention and desire for people to get access to the private markets. And we do think that investing is going to be part of that, part of that answer. And it's different having an index composed of exposure in the individual names versus creating indices based on, fun interest and fun information. So I would just kind of add that to Kelly's comments.
Jeff Schmitt: Okay, very helpful. Thank you.
Operator: [Operator Instructions] There are no further questions at this time. I will now turn the call over back to the presenters for any closing remarks.
Kelly Rodriques: Yes, thank you all for dialing in today. We will be in New York at the Barclay’s and UBS Financial Tech conferences post Labor Day. If you have any other questions, feel free to email ir@forgeglobal.com otherwise, thank you for the time.
Operator: That concludes today's conference call. Thank you all for joining. You may now disconnect.
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