Forge Global (FRGE) The 44th Annual William Blair Growth Stock Conference summary

Market trends and environment

• Private companies are staying private longer, with average timelines increasing from 7-9 years in the early 2000s to 15 years post-2022.

• The private market has experienced valuation adjustments since 2021 but remains strong, with a $13 trillion AUM and 13% CAGR.

• Value creation is shifting to private markets, as seen in comparisons between public and private company growth over similar periods.

• The IPO environment has been weak, with 2023 marking a recent low, but market recovery is underway in 2024.

• Interest rate changes are expected to drive trading volumes, with custody revenue providing a buffer during high-rate periods.

Strategic initiatives and product innovation

• Launched the Forge Private Market Index, the first investable index in the space, tracking private market performance.

• Introduced Forge Pro, integrating data and order management for enhanced trading and transparency.

• Expanded global order book to Europe, enabling cross-border trading and access for European and U.S. investors.

• Developed a data subscription business, offering terminal and API access, with pricing up to $200,000 per year.

• Licensing index products to asset managers, generating revenue from AUM-based fees and platform transactions.

Business performance and growth

• Achieved four consecutive quarters of recovery, with Q1 2024 revenue up 24% year-over-year and guidance for a fifth up quarter.

• Consensus revenue for 2024 is projected at $90 million, up 23% from 2023.

• Traded nearly 600 companies, with $14.5 billion in transaction volume and a network of 175,000 accredited investors and 18,000 institutions.

• Custody business grew from $19 million to $44 million in 24 months, offsetting trading volume declines.

• Data and index revenue streams are expected to significantly improve margins over the next 3-4 years.