Forge (FRGE) Q2 2025: Trading Volume Jumps 9% as Platform Mix Shifts Toward Institutional Direct
Forge’s second quarter delivered record revenue and a 9% sequential jump in trading volume, fueled by a shift toward institutional direct trades and a more balanced transaction mix. The company’s next generation platform launch, new data partnerships, and the integration of its liquidity acquisition are reshaping both product and revenue composition. With private market activity rebounding and regulatory momentum building, Forge’s infrastructure approach and disciplined cost management position it to capitalize on the evolving landscape and approach profitability in 2026.
Summary
- Platform Leverage Expands: Institutional direct trading rose, supporting improved take rates and operational scalability.
- Regulatory Tailwinds Take Shape: Policy momentum and new data partnerships set the stage for broader retail access.
- Profitability Path Clarifies: Execution on cost discipline and recurring revenue mix drive confidence in 2026 breakeven.
Performance Analysis
Forge delivered its second consecutive record revenue quarter, with total revenue rising 10% sequentially, driven by a 9% increase in trading volume and a more balanced transaction size mix. The company’s core marketplace revenues climbed 16% quarter over quarter, supported by a higher proportion of institutional direct trades—trades executed directly on Forge’s platform rather than through special purpose vehicles (SPVs, pooled investment structures for private assets). This shift contributed to a modest improvement in net take rates to 2.4%.
Adjusted EBITDA loss narrowed by 39% quarter over quarter, reflecting both revenue growth and a 3% decrease in total operating expenses, despite higher volume-related costs. Excluding one-time reorganization and acquisition charges, operating expenses would have declined by 10% sequentially, signaling the impact of ongoing cost controls and the benefits of recent technology investments. Custodial administration fees remained stable, while client cash balances dipped slightly, offset by improved returns from proactive cash optimization.
- Institutional Direct Trading Rises: The mix of institutional direct trades increased, reducing reliance on large blocks and improving platform stickiness.
- Cost Discipline Yields Results: Operating cash burn fell by over $5 million from the prior quarter, aided by lower professional services spend and timing of equity grants.
- Recurring Revenue Transition: While transaction-based income still dominates, Forge is actively working to boost recurring revenue streams through data, custody, and asset management.
Year-to-date, revenue less transaction-based expenses grew 28% over 2024, with adjusted EBITDA loss improving 33% and adjusted EPS up 29% year over year. These trends reinforce management’s confidence in reaching adjusted EBITDA breakeven in 2026, even as macro and seasonal factors keep near-term forecasting challenging.
Executive Commentary
"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... This is a massive opportunity and it's the perfect moment for our next generation strategy to meet the market."
Kelly Rodriguez, Chief Executive Officer
"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... Our adjusted EBITDA loss was also the lowest since we went public."
James Nevin, Chief Financial Officer
Strategic Positioning
1. Next Generation Marketplace and Technology Foundation
Forge’s investment in its next generation platform is central to its strategy, integrating trading, data, custody, and asset management into a seamless client experience. The platform’s API-native architecture enables partners—including online brokerages and RIAs (Registered Investment Advisors)—to deliver private market access directly to end clients. Early engagement with new automated negotiation features suggests a learning curve but points to operational leverage as users adapt.
2. Data and Index Business Expansion
The establishment of ForgePrice as a daily pricing standard for nearly 200 private companies underpins new index products and partnerships with Yahoo Finance, ICE Data Services, and Fortune Media. This data franchise not only enhances transparency but lays the groundwork for recurring revenues and further institutional adoption.
3. Asset Management and Wealth Solutions
The acquisition of liquidity and plans to launch a registered fund signal a push to democratize private market access, especially for non-accredited and retail investors. Forge aims to offer index-based and diversified exposure funds, with distribution strategies targeting retirement accounts and wealth channels. Custody solutions are being built to unify account management and enable seamless advisor-led private market participation.
4. Regulatory Engagement and Market Timing
Forge is actively engaged with policymakers as regulatory momentum builds to broaden retail access to alternatives, including potential 401k eligibility. The company views bipartisan support and upcoming legislative changes as key enablers for future growth, positioning Forge as a central infrastructure provider as the private market mainstreams.
5. Operational Scalability and Cost Structure
Ongoing automation and offshoring of technology development are driving operational scalability. The company expects these efficiencies to become more visible in Q4 and into 2026, supporting the goal of reaching adjusted EBITDA breakeven amid a still transaction-dependent revenue model.
Key Considerations
Forge’s Q2 results reflect both cyclical tailwinds in private market activity and structural advantages from its technology and data investments. The company’s ability to balance innovation with operational discipline will be critical as it transitions to a more recurring revenue base and navigates macro and regulatory uncertainty.
Key Considerations:
- Mix Shift Toward Institutional Direct: A higher share of institutional direct trades is increasing platform engagement and supporting take rate improvement.
- Recurring Revenue Ambitions: The push to grow data, custody, and asset management revenues will be key to reducing transaction-driven volatility.
- Regulatory Momentum: Bipartisan policy support for broader access could accelerate Forge’s addressable market and product adoption.
- Cost Controls and Scalability: Benefits from prior cost actions, offshoring, and platform automation are beginning to show, with more impact expected in late 2025 and 2026.
Risks
Transaction-based revenue dominance leaves Forge exposed to market cyclicality, especially as private market volumes remain sensitive to IPO activity and macro conditions. While regulatory momentum is promising, legislative outcomes and timing remain uncertain. Competitive threats from both traditional and crypto-native entrants, especially around tokenization, could pressure margins and growth if Forge’s infrastructure advantage narrows.
Forward Outlook
For Q3 2025, Forge guided to:
- Seasonally lower revenues than Q2, reflecting typical summer volume patterns.
- Continued progress on adjusted EBITDA improvement, with cost efficiency gains ramping in Q4.
For full-year 2025, management maintained guidance:
- Organic revenue and adjusted EBITDA growth rates in line with first half trends.
Management highlighted several factors that will shape results:
- Integration of the liquidity acquisition is expected to contribute positively to adjusted EBITDA in the second half.
- Transition to recurring revenue will take time, but cost leverage and technology investments support the path to 2026 breakeven.
Takeaways
Forge’s Q2 results underscore the company’s operational momentum and the growing institutionalization of private markets.
- Trading Volume and Mix: The shift toward institutional direct trades and more balanced transaction sizes is strengthening platform fundamentals and supporting take rate improvement.
- Strategic Investment Payoff: Technology and data investments are beginning to yield operating leverage and recurring revenue opportunities, though the transition remains in early innings.
- Watch for Regulatory and Product Catalysts: Investors should monitor regulatory developments, the launch of new investment vehicles, and recurring revenue mix as leading indicators of long-term value creation.
Conclusion
Forge’s Q2 marks another step forward in its transformation from a transaction-driven marketplace to a scalable, data- and technology-enabled private market infrastructure provider. The company’s disciplined execution, strategic positioning, and regulatory engagement leave it well-placed to capture the next phase of private market growth and approach profitability in 2026.
Industry Read-Through
Forge’s results and commentary signal a broader resurgence in private market activity, with IPO volume rebounding and investor appetite for alternatives increasing. The shift toward institutional trading, demand for transparent pricing standards, and regulatory push for retail access are themes likely to ripple across the private asset ecosystem. Competitors in private market infrastructure, custody, and asset management will need to accelerate innovation, while traditional wealth managers and fintechs should prepare for greater client demand for private market products. The evolving regulatory landscape and technology-driven operational leverage at Forge are harbingers of an increasingly mainstream and accessible private market sector.