Forge Global Holdings - Earnings Call - Q2 2025

Executive Summary

• Q2 2025 delivered second consecutive record revenue as a public company: total revenues less transaction-based expenses rose to $27.6M (+10% QoQ) and adjusted EBITDA loss improved to $5.4M (lowest since going public). EPS was $(1.34) and net loss was $16.6M.
• Versus consensus: revenue beat ($27.74M actual vs $21.26M consensus*) while EPS missed ($(1.34) reported vs $(1.17) consensus*). The revenue strength was driven by higher trading volume and improved mix; warrant liability fair value changes weighed on GAAP EPS.
• Guidance tone: management expects H2 organic revenue and adjusted EBITDA YoY growth rates “to continue inline” with H1, and flagged normal seasonality with Q3 revenue typically lower than Q2 and Q4.
• Potential stock-reaction catalysts: Next Generation Marketplace launch, accelerating volume (+9% QoQ to $756.1M) and net take rate uptick (2.3%→2.4%), plus Accuidity acquisition to expand investment solutions.

What Went Well and What Went Wrong

What Went Well

• Second consecutive record revenue quarter; adjusted EBITDA loss improved to $5.4M, “narrowest quarterly EBITDA loss since going public”.
• Volume and mix: trading volume rose 9% QoQ to $756.1M; fewer mega blocks but more institutional/direct trading improved net take rate to 2.4% from 2.3% QoQ.
• Strategic progress: “launched our new marketplace experience on our Next Generation Platform,” with partnerships (ICE, Fortune) and Accuidity acquisition to broaden wealth/asset-management offerings.
  • Quote: “Q2 marked a milestone quarter…second consecutive record quarter in terms of revenue, and our narrowest quarterly EBITDA loss since going public” — CEO Kelly Rodriques.

What Went Wrong

• GAAP EPS declined to $(1.34) despite revenue strength, reflecting the impact of the increased fair value of warrants amid share-price moves; net loss rose slightly QoQ to $16.6M.
• Custody-related revenue softness: custodial administration fees less transaction-based expenses fell 2% QoQ to $9.09M; custodial client cash declined 4% QoQ to $440M, pressuring cash administration fees.
• Seasonality: management reiterated Q3 is “generally lower than Q2 and Q4,” tempering near-term revenue cadence despite H2 growth framework.

Transcript

Operator (participant)

Good morning. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Forge's second quarter fiscal 2025 financial results conference call. On today's Forge Global Holdings call will be Kelly Rodriques, CEO, James Nevin, CFO, and Lindsay Riddell, Executive Vice President of Corporate Marketing and Communications. 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. To ask a question, press star one. To withdraw your question, press star one again. I would like to turn the call over to Lindsay Riddell. Ms. Riddell, you may begin your conference.

Lindsay Riddell (EVP of Corporate Marketing and Communications)

Thank you, Operator, and thank you all for joining us today for Forge's second quarter 2025 earnings call. Joining me today from Forge are Kelly Rodriques, CEO, and James Nevin, CFO. They will share a prepared remark and then take your questions at the end. Earlier this morning, we issued a press release announcing Forge's second quarter 2025 financial results. A discussion of our results today complements the press release, which is available on our investor relations page. This conference call is being webcast, and you will see slides during this presentation. The replay of the webcast, as well as the slides, will be available via the IR page of our website shortly after the conclusion of this call. We will also post to that page our prepared remarks and investor supplemental documents, which consolidate relevant metrics.

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 these actual outcomes to materially differ from those included in these statements. We discuss these factors in our SEC filings, including our quarterly report on Form 10-Q, which can be found on the IR page of our website after it is filed. 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 a company's performance.

For detailed disclosures on these measures and the GAAP reconciliation, 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 second quarter 2025 results. As always, we encourage you to evaluate both annual and quarterly results for a full picture of Holdings' performance, which can be affected by unexpected events that are outside of our control. With that, I'll turn it over to Kelly, our CEO.

Kelly Rodriques (CEO)

Thanks, Lindsay, and good morning, everyone. We're pleased to share that Q2 2025 was another strong quarter, our second consecutive record-beating quarter of revenue and our narrowest quarterly adjusted EBITDA loss as a public company. Before we dive into the financial highlights from the quarter, let me begin by addressing the dynamic shaping of the private market today. Private companies are staying private longer. The IPO window remains narrow, and demand for capital and liquidity solutions from companies, founders, employees, and investors continues to grow. Meanwhile, institutional and individual investors are allocating more of their portfolios to alternatives, including private market assets. This shift is reshaping how the modern portfolio looks and accelerating the need for scalable access to the private markets. We're also seeing real regulatory momentum.

Policymakers are exploring how to broaden retail access to alternatives, including reports of proposed changes that would allow investors to access the private market through their 401(k) plans. Industry leaders are aligned in the belief that private market access should no longer be reserved for the few. The confluence of demand, regulatory evolution, and investment appetite is driving the need for modern private market infrastructure, technology that can streamline transactions, increase transparency, and scale across investor types. This is a massive opportunity, and it's the perfect moment for our next-generation strategy to meet the market. Across four key verticals: trading, data, custody, and wealth, we see accelerating demand for the modern private infrastructure that Forge is delivering. In trading, investors and shareholders are looking for confidence, control, and more seamless execution, while companies are looking for capital and liquidity solutions from trusted providers.

In data, transparency and pricing standards like Forge Price are becoming essential tools for decision-making and benchmarking. In custody, we see an increasing need for integrated solutions that consolidate private market positions and create an efficient experience for wealth managers and RIAs. In wealth, advisors and asset managers are looking for curated, compliant vehicles to serve growing client appetite for private market exposure as part of their alternative strategies. Forge is strategically positioned at the intersection of these trends, and our next-generation strategy is designed to address this opportunity. We invested heavily in our new technology foundation, our next-generation platform built to integrate trading infrastructure, proprietary data, asset management, and custody into a seamless client experience. All of this is extensible through our APIs into the platforms people already know and trust.

Whether you're an investor or shareholder trading through Forge, a company raising primary or secondary capital through Forge investment funds, an online brokerage or RIA delivering private market access to clients through your own platform, or a fund manager researching the next important investment opportunity, you can rely on the Forge platform to deliver the tools, insights, and execution you need. The recent launch of our next-generation marketplace is designed to reduce friction and enable investors to transact with confidence and autonomy. We've anticipated an adjustment period, and while it's still early, we're encouraged by the engagement we're seeing on the marketplace as new users adapt to a more autonomous experience. We've also established Forge Price as the industry's most trusted pricing standard, providing daily pricing for nearly 200 of the most sought-after private companies.

This data underpins our index business and has led to partnerships with Yahoo Finance, ICE Data Services, and Fortune Media, owners of the Fortune 500, who will use our data to create new private company lists. It's not just about data or technology. It's about how we're delivering the right solutions at the right time. Forge Global Advisors is developing a range of investment vehicles to broaden access to new investors, including retail and non-accredited investors, with products ranging from index-based strategies to diversified exposure funds. Later this year, we aim to launch our first registered fund, made possible by our acquisition of Accuidity. These vehicles will soon be available, giving investors even more ways to participate in the private market. We see custody as a foundational component of a modern private market experience.

We're actively building custody solutions that unify account management and create a compliant, scalable foundation for future platform growth, serving wealth and investment advisors who want to deliver private market exposure seamlessly to their clients. We're not just improving how people access the private market; we're defining what access should look like. Our goal is to become the central nervous system of the private market, delivering the broadest order book, setting the standard for pricing and transparency, and enabling seamless access across a range of investor types, all through one integrated platform. That vision came to life at our first Forge Future Private Summit held in New York in June. We brought together leading private companies, investors, policymakers, and media to discuss what the future of the private market should look like.

A key takeaway was that the private market is no longer an edge case, but a critical piece of every investor's future. Now we need to continue to deliver the infrastructure to meet the moment. That's what we're building at Forge. As we move through the second half of 2025, our focus is on three clear priorities. First, opening the market to new participants. We're launching investment vehicles that meet client demand for low cost, diversified access to private market shares, connecting investors, including retail and non-accredited, directly through Forge. Second, expanding our technology-enabled competitive edge. We're continuing to evolve the next-generation marketplace to support the elevated experience, speed, and service that makes Forge the easiest place to transact. We're expanding our partnerships, delivering access to our modern API-native technology architecture to amplify future growth. Finally, executing with discipline. We're balancing innovation with operational focus.

By automating workflows and simplifying transactions, we're unlocking operating leverage and remain on track to reach adjusted EBITDA breakeven in 2026. Now, I'll turn it over to James to dive deeper into our financial performance for the quarter and first half of the year.

James Nevin (CFO)

Thank you, Kelly. The results of the second quarter and year to date clearly demonstrate the momentum we are building in executing against the growth strategy Kelly just set out. We are confident in our continued growth trajectory and our path to profitability. Our confidence is supported by growth in revenues and adjusted EBITDA, which exceeded our expectations in Q2. Revenue set a record for the second consecutive quarter since we went public. This was driven by continued strong marketplace performance. Both volume and mix contributed to the strong results, and I'll get into more detail on that in just a moment. Our adjusted EBITDA loss was also the lowest since we went public. The increase in revenues and decrease in operating costs drove a 39% improvement in our adjusted EBITDA and a similarly substantive decrease in our operating cash burn quarter-over-quarter.

Strategically, we launched the next-generation marketplace, and we signed data agreements with both ICE and Fortune. Just after the quarter ends, we closed the acquisition of Accuidity. This expands our asset management and wealth capabilities and positions us to offer a diversified set of investment solutions through the Forge private market platform. Before turning the discussion to the second half of the year, I'd like to review additional details on the quarter. As I mentioned, revenue outpaced the prior quarter, reaching $27.6 million, an increase of 10%. Looking at the top right of the slides, you'll see Q2 marketplace revenues were $18.6 million, up 16% from the first quarter. Trading volume increased 9% from $692 million to $756 million quarter-over-quarter. Trading volume in the first half of 2025 of $1.4 billion has already exceeded full-year 2024 trading volume of $1.3 billion.

Volume mix was more evenly distributed in the second quarter and there were fewer large block trades, contributing to an improvement in net take rates from 2.3% to 2.4%. The bottom right of the slide shows that custodial administration fees totaled $9.1 million, broadly flat from the last quarter. Custodial client cash balances were modestly lower at $440 million at the end of the quarter, as compared to $460 million at the end of Q1. However, our proactive cash optimization program yielded higher returns whilst maintaining our capital adequacy and liquidity requirements. Our second quarter adjusted EBITDA improved to $5.4 million loss from an $8.9 million loss in the prior quarter. Looking at the waterfall chart on the bottom right of the slide, you'll see the quarter-over-quarter changes in adjusted EBITDA. Revenue net of variable revenue rate costs improved $1.1 million quarter-over-quarter.

Other cash OpEx, excluding CFO transition costs, declined by $1.1 million, driven largely by lower professional services expenses. Total operating expenses decreased 3% quarter-over-quarter, despite higher revenue rate costs. Included in operating expenses but excluded from adjusted EBITDA are $3 million of reorganization and equity acquisition costs. Excluding these items, operating expenses would have improved 10% quarter-over-quarter, reflecting strong cost control and temporary declines in non-cash items due to timing of 2025 annual equity grants. Our $16.6 million second quarter net loss on a GAAP basis increased slightly relative to the $16.2 million net loss in the previous quarter. Higher revenue net of transaction-based expenses and lower operating expenses were offset by significantly higher changes in fair value of warrants, largely due to the increase in our share price.

Net cash used in operating activities was $7.8 million in the current quarter, compared to $12.8 million last quarter. The decrease was primarily driven by changes in working capital, the largest of which is the change in accrued compensation as annual bonuses are paid in the first quarter. Relative to the prior quarter, our operating cash burn decreased by over $5 million. Combined liquidity, including short-term investments, was $81.8 million at June 30th, compared to $93.1 million at March 31st. We repurchased approximately 315,000 shares at an average price of $13.15 per share during the quarter. Before I hand it back to Kelly, I would like to take a moment to reflect on our results for the first half of the year and share our current view of the second half of the year.

Total revenues less transaction-based expenses for the first six months of 2025 were $52.7 million, an increase of 28% year-over-year, a significant acceleration in revenue growth compared to the 13% growth we saw in 2024. Adjusted EBITDA loss improved by 33% in the first six months of 2025 versus the prior period. Adjusted EPS, which removed the change in fair value of warrant liabilities, also improved 29% year-over-year. In the second half of 2025, we expect to make continued progress on our growth and profitability initiatives, and we remain on track to achieve adjusted EBITDA breakeven in 2026. This is supported by the operational scalability coming from the recent launch of the next-generation marketplace, the integration of our EPS accretive acquisition of Accuidity, which is already underway, and the cost efficiencies we are gaining over time by offshoring a portion of our technology developments.

We are in the process of transforming our revenues to be more recurring in nature, but in the current year, we will continue to have a large proportion tied to transaction-based income. This makes forecasting difficult, especially in a macro environment which continues to be unpredictable. That being said, we do expect second half year-over-year organic revenue and adjusted EBITDA growth rates to continue in line with the year-over-year growth rates we have seen in the first half. Revenues in Q3 are generally lower than Q2 and Q4, driven by seasonality. The organic second half revenues and adjusted EBITDA we are expecting are therefore broadly in line with the current analyst average expectations for the second half. We expect Accuidity to grow at least as quickly as the rest of our business and provide a small positive adjusted EBITDA contribution in our first six months of ownership.

As such, we expect we will exit 2025 with a continued clear trajectory towards adjusted EBITDA breakeven next year. With that, I'll hand back to Kelly before we go to questions.

Kelly Rodriques (CEO)

Thanks, James. The private market is showing renewed strength as exit activity surges and investor sentiment revamps. In the first half of 2025, over 174 companies went public, raising more than $31 billion, the strongest first-half IPO performance since 2021. Major tech names like CoreWeave, Circle, Chime, Figma, and Gemini have either been viewed or filed, signaling a pipeline with real momentum. Meanwhile, buy-side interest on the Forge platform continued to climb in June, accounting for 64% of all indications of interest. The median bid-ask spread compressed to 3%, its lowest level since February 2021, and the median discount to last funding round narrowed sharply to 9% from 21% in May. These trends point to rising price confidence and more active engagement across the private market. Performance-wise, the private AI sector continues to lead.

Forge's AI thematic basket has returned 63.1% year-over-date, dramatically outperforming public benchmarks like the AIQ ETF and the Public Magnificent 7. High-profile investments such as Meta's $14.3 billion stake in Scale AI highlight the increasing conviction in private AI companies as long-term innovation leaders. With both mega rounds and M&A activity accelerating, private AI continues to capture the imagination and capital of institutional and strategic investors alike. It is not just AI. Median private market valuations for companies across sectors have broadly trended up since bottoming out in 2023. Forge's platform offers access to this evolving landscape, where tighter spreads, improved pricing signals, and differentiated exposure are creating a compelling environment for investors looking to participate in the next wave of growth.

Let me leave you with three core reasons why we believe Forge is positioned to win: a massive market opportunity with perfect timing to bring our solutions to market across trading, data, custody, and wealth; a technology-driven competitive advantage that's hard to replicate; and a clear path to profitability. We're operating with greater clarity, greater momentum, and greater conviction than ever before. We're confident that the investments we've made in our platform, in our people, and in our next-generation strategy are setting the stage for durable, compounding growth. Thanks again for your continued support and belief in what we're building. With that, thank you for joining us, and we'll open it up to questions.

Operator (participant)

As a reminder to ask a question, simply press star one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Our first question comes from the line of Devin Ryan with Citizens. Please go ahead.

Hey, guys. Good morning. Yep, Brian, I'm for Devin. I guess first, high level, appreciate you kind of touched on some of the prepared remarks. With the U.S. IPO market turning back on, some good progress in a lot of verticals. Can you guys just touch about how that's influencing activity on the platform and volumes? Thanks.

Kelly Rodriques (CEO)

We previously commented that the largest correlation that we've seen relating to volume is a healthy IPO window. I think that bodes well for what we're seeing, and while the numbers do speak to an opening up of the market, I guess, Brian, our position is still that there's still uncertainty. We are cautiously optimistic, but I think we're going to continue to watch it and see what plays out.

Great. Thanks. I guess a prominent theme lately on tokenization. Some peers talk about tokenization of private companies. How do you think about that competitively? What's, you know, the internal thought process on tokenization and waiting for legislation? Yeah, I'll leave it there. Thanks.

Yeah. We've been watching this carefully, and our fundamental belief is that there is a time and a set of partnerships that will lead us into this part of the emerging crypto world. I think we have a fairly strong belief, though, that the values that we apply to this opportunity mean that the kind of partnerships that we'd be involved with have to also respect and value the fact that the private market securities that underlie tokenization need to be both tightly connected to the securities that are tokenized and also be supported by the issuers that they represent. I think those two things are a requirement for us. We are not making officially any statement or announcement about moving into it, but we're watching it, and we're certainly looking at how we will participate. I'd say more to come.

Got it. If I could just push on that a little more, it sounds like you potentially would be an issuer as opposed to a partner, or is it too soon to kind of speak on that?

It's a little too soon. What we're trying to figure out is who's best positioned to partner with us to do it. That doesn't mean we wouldn't be issuing tokens ourselves, but we would likely be in some form of partnership and distribution relationships. The same way we're seeing our business today, I think the strategies we've laid out in our opening comments about being integrated into partners applies, I think, for this opportunity as well. I didn't answer this, but I'll just say from a competitive standpoint, like you, we're seeing a lot of people talk about getting into it or dipping their toe in the pool. We believe that the tokenization of the securities itself isn't novel.

It's the combination of buyers, sellers, a network, a number of key relationships with participants in the private space, including companies, that will all have a factor competitively in who wins and who can best exploit the opportunity for tokenizing these securities. We're really excited about it. I want to make sure that's understood by everyone that's listening. It's just a matter of when we get into it, we want to choose our partners carefully.

Great, thanks again on the quarter.

Operator (participant)

Okay. Your next question comes from the line of Michael Cho with JPMorgan. Please go ahead.

Michael Cho (VP and Equity Research Analyst)

Hi. Good morning, Kelly, James. Thanks for taking my question. I just wanted to touch on the volume strength you're seeing and some of the volume trends you're expecting, given that the second half guide for revenue and EBITDA. Can you just unpack or flesh out where some of that volume strength is coming from in terms of whether it's institutional or just retail, or are there other segments of the market that have been driving that strength today and will likely drive that strength into this second half?

James Nevin (CFO)

Yeah. Thanks, Mike. It's James here. I think there's been a change from Q1 to Q2 in what we've seen. In Q1, as we reported, we saw some very large block trades, which came through and boosted the volumes there. In the second quarter, that has been a lot more even in terms of the size. Within that mix, we did see an increase in the institutional blocks trading on our platform. Not the mega blocks that we saw in Q1, but a much higher proportion of institutional trading and direct trading on our platform. People trading directly with us, as opposed to SMEs or third-party SMEs. I think the mix changed a little bit. I think we anticipate that will continue to be the case, going into the second half.

To touch on the seasonality point you said, I think we see no change in the market opportunity and the amount of volume that we're seeing come into the book, both in terms of interest and pipeline. The real thing is Q3 is seasonally quieter during July and the first part of August, and we're reflecting that in the guidance that we've given.

Michael Cho (VP and Equity Research Analyst)

Perfect. Thanks, James. If I could just zoom out, bigger picture, Kelly, you called out launching the first registered fund with Accuidity later this year, and in kind of broader access to private markets or, sorry, 401(k) plans by private markets. I was just kind of curious if you could walk through how you view the competitive landscape, you know, when you're thinking about launching the fund with Accuidity later this year. Again, bigger picture, how would Forge approach access to something like the 401(k) market, in terms of, you know, if you're thinking through partnering or if there's other ways that you're considering to, you know, access this market more broadly? Thank you.

Kelly Rodriques (CEO)

Sure. First off, we're approaching a pretty major milestone in the market, and that is that private assets and a collection of the most interesting private companies could be presented in an index-type format. Presenting that as a low-cost wrapper to non-accredited investors, we think is really interesting. There are competitors out there that have been offering access to private market funds for years. Most of them are accredited and required funds, and there's a handful available as listed funds, but none of them has the kind of coverage, cost structure, and names that relate to the underlying cost of the securities like the product we're talking about. We're really excited that non-accredited investors would have access to this. Now, your second question about 401(k)s really is an adjacent answer relating to the distribution of these funds.

We haven't yet announced our distribution strategy for this first listed fund, but when we do, our hope is that the partners who are interested in offering a product like this are some of the same people that put really interesting products into retirement products, whether they be 401(k)s or accessible through retirement accounts that are more conventional IRAs or Roth IRAs. We've seen this as an interesting market opportunity for quite a while. It's one of the reasons why we invested in custody some number of years back because I think once you start taking products like this into wealth complexes and RIAs, those financial advisors are going to look at whether or not this is an appropriate asset to also be held in the retirement accounts.

If you look at the overall return of U.S.-based retirement accounts today, you can understand why there are members of the current administration saying, "With some of the return exposure in private markets, shouldn't we offer that to retiring Americans to increase both the return profile and the diversification of U.S. retirement accounts?" We're really excited about both of these things converging. I think the 401(k) exposure comments that I made are really just an extension of the access strategy that Forge has. We're really excited about this.

Michael Cho (VP and Equity Research Analyst)

Great. Thank you so much.

Operator (participant)

Your next question comes from the line of Owen Lau with Oppenheimer & Co. Please go ahead.

Guru Ariel (Business Intelligence Tableau Consultant)

Hi. This is Guru on for Owen, and thanks a lot for taking our question. I wanted to go back to the regulatory landscape, you know, which appears to have gotten increasingly better. This quarter, we saw the House pass a bill to extend accredited investor eligibility requirements. We know that Forge has been actively engaged with Washington to support such favorable regulation. Can you maybe just talk to us about the kind of traction this bill has gained in the Senate? Also, if you can tell us a little bit about the timing of this bill. What other regulatory measures do you think are needed to support broader private market participation in your view? Thanks.

Kelly Rodriques (CEO)

First off, we've spent a lot of time with policymakers this last year. We could see a number of movements that could improve access to the private market, including what you bring up, Guru, around the accredited definitions. I'd say that we believe that, broadly speaking, we're going to continue to see policymakers try to open up access. The intention here is shared on both sides of the aisle. I'd say overall liquidity in the private market helps everyday employees who are not in the C-suite of a very big group of U.S.-based companies where there's a lot of wealth creation happening. It doesn't surprise us that on one side of the aisle, you've got employee rights advocates who are really pushing for greater access to liquidity within private companies' employee bases.

On the other side, you generally are just seeing good old-fashioned capitalism trying to be put in a sort of priority position in the private markets, which is part of what we're seeing with some of the crypto policies that are coming to market. I'd say even this 401(k) executive order, I think, was an attempt to say, "Hey, let's provide investors broadly with more options for distribution." I can't predict any further, but I am close to a lot of what's being discussed. I'd say there's more to come. There's significant momentum building, and it's surprisingly bipartisan.

Guru Ariel (Business Intelligence Tableau Consultant)

Got it. Thanks a lot.

Operator (participant)

Our next question comes from the line of Jeff Schmitt with William Blair. Please go ahead.

Jeff Schmitt (Senior Equity Research Analyst)

Hi. Good morning. As we get closer to 2026, can you provide any update on potential timing of reaching breakeven next year? I mean, are you seeing that in the first half or second half? Have all your expense actions been taken, or is there anything else to do there?

James Nevin (CFO)

Hey, Jeff. We've not given guidance on when we'll achieve that next year. I think the point to make is that we're increasingly confident that is going to be a reality in 2026. The cost actions we've taken last year, we've seen the realization of those benefits through the H1 numbers. That's reflected in the positive OpEx movements you saw in both Q1 and Q2. What we're looking for going forward are a couple of things, one of which is the platform allows us to be more operationally scalable, both freeing up our existing workforce to act in a more automated way and reduce the friction internally, as well as the external friction it reduces in terms of IOIs coming to the book. We will be adding in, as I said, Accuidity is positive to our bottom line, and will be increasingly positive in 2026.

We've made big investments, which we've been pretty clear on over the last 12 months-24 months in tech. We're in the process of offshoring some of that development, and we expect that benefit to start to flow probably towards the end of this year rather than in Q3. I'm still starting to see some of that in Q4 and then as we go into 2026.

Jeff Schmitt (Senior Equity Research Analyst)

Thank you. Could you talk about some of the enhancing features of the Next Generation platform that you think can drive higher transaction volumes? Does this include auto-matching capabilities?

Kelly Rodriques (CEO)

It includes an automated negotiation process. There are a number of features that we have not rolled out yet. Consider this kind of a rolling release. What was released last month included the ability for people to negotiate in an automated fashion. Now, we've got, and I've made these comments previously, what we believe to be the most sophisticated and high-service level broker teams that have been assembled. We've been at this for over a decade. This is a belief that both informs the way the process is designed and automated, but it's also got standby resources that will help every step of the way. It's an interesting observation to watch it now because we're seeing that the participants who are engaging with it now are learning how to use it.

I'd say the most significant learning curve is around figuring out how to negotiate with a counterparty in an automated way. That's not existed in the market at this point in time. We're really excited about that feature specifically and others that will come. The other thing that you're seeing is the private market trades in a range of different structures: fund structures, directs. As Forge has commented previously, we've built an asset management and AUM around these fund structures over the last few years that we've been reporting at. We're close to $1.4 billion now. Those fund structures trade differently than directs. We're really trying to make sure that every potential counterparty scenario and every kind of structure available is represented in the Forge Next Generation platform. This will take some amount of time to iterate and roll out. We're watching very carefully right now.

We're in the first real quarter of it being live. As we hear more, we'll report back.

Jeff Schmitt (Senior Equity Research Analyst)

Okay. Great. Thank you.

Operator (participant)

With that, we have reached the end of our call. I will now turn the call back to Kelly Rodriques for closing remarks.

Kelly Rodriques (CEO)

Great. I just want to thank everybody for joining and being supportive of Forge. Happy to have follow-up calls as well and look forward to reporting next quarter.

Operator (participant)

Thank you again for joining us today. This does conclude today's conference call. You may now disconnect.