Kelly Rodriques
Thank you, Lindsay and Dom. Good afternoon, everyone, and thank you for joining us today. We closed out 2024 with 13% year-over-year revenue growth and a strong pipeline.
Despite a muted fourth quarter stymied by the presidential election cycle, our year-over-year revenue improvement included a 46% increase in marketplace revenue, which grew to $37 million. As Q4 came in near even to Q3, I’m happy to report we’ve observed improving overall market dynamics and growing deal activity, aided by the technology improvements we deliver to support our leading marketplace. We are encouraged by signs of a strong start to the year, which we believe bode well for a more active 2025 market.
These include a relatively low bid ask spread and improving valuations as reported in our February Forge Private Market update. The Forge Private Market Index is up 33% over the prior three months as of the end of February, outpacing major indices like Nasdaq and the S&P 500. In February, the index experienced its largest single-day gain in its history, jumping 20%, mostly driven by Figure AI’s 850% price increase.
Other index names have announced sizeable tender offers, including Stripe, which saw evaluation improvements of 31% with its funding news. This demonstrates that the rally we’re observing may be broadening beyond the AI sector, which has driven the bulk of momentum over the past several months.
Meanwhile, the IPO pipeline is expanding. With 13 IPO filings of planned raises of $100 million or more in January, which is the highest monthly total of filings of this size in three years, and evidence that some of the high demand companies like CoreWeave may be the first this year to test the waters.
As we’ve discussed, IPO activity often generates increased platform activity in the private market, as investors gain confidence that exits are a near-term possibility. While these are all encouraging signs, we’re conscious that we still haven’t seen the IPO floodgates open, and the political environment and concerns about the impact of tariffs and other economic and foreign policy matters have the potential to drag enthusiasm.
From where we sit, with three weeks to go in Q1, our pipeline currently stands at its highest level in almost three years. And with that, we expect the marketplace revenue for Q1 will meet or exceed our best quarter in 2024, which gives us optimism heading into Q2.
While anticipating a more robust market recovery, we’ve stayed focused on the step changes required to push this market forward, including achieving a fully automated trading experience, exposing more data transparency, and enabling the creation of new financial products to drive more access and liquidity into the private market, all built on the Forge Next Generation platform. And we’ve done this while diligently managing costs as we drive toward our commitment of achieving profitability in 2026.
Now, reflecting on our accomplishments in 2024, we’re proud of the technology and pricing innovations we delivered to the market to date. Our Forge Price pricing standard is enjoying broader acceptance among private market participants, as well as data distributors and media publishers who rely on Forge Price to better understand performance, track trends and make investment decisions.
We’re proud that in 2024, we were first to market with standard setting indices, the Forge Private Market Index and the Forge Acquity Private Market Index. That are the foundations on which new financial products to drive access to the private market are being built. And we’re proud of the technology innovation our team continues to deliver, including Forge Pro, which delivers the advanced institutional trading capabilities to 400 of our sophisticated investor clients to allow them to fully participate in this market.
We’re encouraged that as the market continues to evolve, we’ve been able to capture supply from a greater diversity of sources, giving us access to a broad range of deal flow through various investment vehicles. This includes singular holdings, sizable block trades, third-party funds, and our marketing and data-driven sources, plus our investment funds managed by Forge Global Advisors, where we now have close to 100 funds with just under $1 billion of AUMs.
We believe our progress in delivering technology, driving data transparency, and enabling financial product innovation, as well as our role as a central nervous system for the private market. is driving the asset class toward a tipping point. And we’re looking forward to what we will deliver this year to meet the moment.
I’ll turn it over to our CFO, James Nevin, to talk about the fourth quarter and annual financials in more detail.
But before I hand it to James, I’d like to state how grateful I am for Mark Lee’s contribution to Forge, over the last six years and for his steady and diligent leadership. Mark continues to be an incredible resource to James as we undergo this transition. Both Mark and James are here today and will be taking questions with me during Q&A. Now, to James.
James Nevin
Thanks, Kelly. It’s an exciting time to be joining Forge from the London Stock Exchange Group. And I’m honored to be part of a transformational moment for both Forge’s future and for the private market. I’ve been here less than two months, but I’m excited about the potential we have as we execute against our strategy and long-term vision.
I first want to discuss the key messages coming from the Q4 results and the outlook coming into ’25. Q4 marketplace revenues came in at the bottom end of our expected range. The uncertainty we saw in the run up to the US presidential election subsided towards the end of Q4. And as Kelly said, we entered 2025 with a strong deal pipeline, which has continued to grow through the first quarter.
As expected, custodial cash administration fees were affected by the numerous federal rate cuts we experienced in ’24. And even though the speed of cuts in ’25 could be slower than we expected, we will experience the full impact of the November and December cuts in the first quarter. We fully executed against the cost savings we announced in August last year, and cost focus remains key as we enter ’25, whilst balancing selective investment into our key strategic initiatives, including continuing to roll out enhancements to our next generation platform, as Kelly discussed.
Turning to the detailed results for the fourth quarter of 2024, Forge’s total revenue less transaction-based expenses were $18.3 million, as compared to $19.1 million in the last quarter. Revenues were affected by a number of factors, including uncertainty leading into the US presidential election, as well as the pace of Fed interest rate reductions. This contributed to an uncharacteristically soft fourth quarter in our marketplace business.
Total market-based revenue was approximately flat at $8.6 million in the current quarter compared to $8.7 million in the prior quarter. Revenues are driven by a decrease in transaction volume to $299 million from $338 million in the prior quarter. However, our net take rate increased to 2.8% from 2.6% in the prior quarter. The impact of these factors on the quarter-over-quarter market-based revenues are shown in the waterfall graph on the top right of the slide.
Total custodial administration fees were $10 million in the current quarter compared to $10.5 million in the prior quarter. The decline was largely driven by lower cash administration fees. Our custodial cash administration fee rate was affected by the numerous Federal rate cuts during and preceding Q4, which had a negative effect on our revenues, as you can see in the waterfall graph in the bottom right of the slide. And as I mentioned before, the full impact of these rate cuts will continue to affect our revenues in this area of the business as we go into 2025.
Our custodial cash balances totaled $483 million at the end of Q4, as compared to $470 million at the end of Q3, a modest increase of 3%. As of the end of Q4, total custody counts increased 4% from $2.3 million in the prior quarter to $2.4 million. And assets on the custody increased 2% from $16.6 billion to $16.9 billion, both driven by our custody as a service business offerings.
Our fourth quarter operating expenses decreased $3 million to $37 million from third quarter expenses of $40 million. We continue to realize the $11.3 million cost savings we announced in August 2024. As a reminder, we expected two-thirds of these savings to come from run rate operating expenses and one-third from future cost avoidance.
Looking at the waterfall chart on the bottom right of the slide, the additional $0.6 million of run rate impact in the quarter brings the total quarterly run rate savings to $1.8 million, or $7.2 million on an annualized basis. In addition, we took action before the end of ’24, which will result in a further $1 million of annualized cost savings. When combined with the $3.8 million of costs, we removed it from our operating plan, this has resulted in total cost savings of $11.9 million and an overachievement against our original stated goal.
While the cost of achieving these savings was lower quarter over quarter, included in the $0.7 million net amount, you can see on the slide, is $1.9 million of costs recognized in the fourth quarter, which relates to severance cost and a non-cash lease impediment as we reduced our office footprint.
We are selectively continuing to invest in our people and our technology, and will continue to do so through 2025. We have started to utilize offshore locations for technology and other functions, with some temporary increases in cost as we run parallel across locations to ensure operational stability. These are the major contributors to the $0.8 million cost increase shown on the charts.
Non-cash items include the impact of changes in share-based compensation and appreciation, both of which we expect to continue to slowly decline in 2025. Our $16 million fourth quarter net loss decreased from the $18.8 million net loss in the third quarter. Lower operating expenses and higher other income, primarily due to more favorable reductions in the fair value of warrant liabilities, were partially offset by lower revenue net of transaction-based expenses.
Adjusted EBITDA is a key measure of our operating results, as it generally aligns more closely with our operating cash burn. In the fourth quarter, adjusts EBITDA loss was $10.9 million compared to a loss of 11.4 million last quarter.
Net cash use and operating activities was $7.9 million in the current quarter compared to $5.8 million last quarter. This increase was primarily driven by working capital movements.
Cash, cash equivalents, and restricted cash ended the quarter at $106.3 million compared to $115.6 million last quarter, as Forge continues to maintain a strong balance sheet.
Given this strength of balance sheet and our confidence in the execution of our strategic goals which support our path to profitability, we are also announcing today that the Board has authorized their stock buyback program of up to $10 million. This reflects our belief that Forged stock is currently significantly undervalued. An opportunistically buying back stock therefore represents a compelling opportunity for the company to increase shareholds of value.
Now to recap our strong full year results for 2024. Forge’s total revenue less transaction-based expenses was $78.7 million and $9.3 million or 13% improvements from the $69.4 million a year ago. During 2024, we saw a significant change in the mix of our revenue, as marketplace revenues improved and custodial administration fees were down year over year.
Marketplace revenues totaled $37.5 million, up 46% from $25.8 million in 2023. The 2024 trading volume was up 73% to $1.3 billion compared to $766 million in 2023. And the average net take rate for ’24 was $2.8 million (sic – see slide 5, “2.8%”) compared to $3.3 million (sic – see slide 5, “3.3%”) in ’23.
As Kelly articulated, we have made considerable progress diversifying our sources of liquidity on both the buy and the sell side. We now have access to a breadth of liquidity that other market participants do not, including sizable block trades, access to our own and third-party SPVs, issuer relationships, institutional asset management relationships, marketing driven volume, and data driven volume. This mix is increasing our volumes in absolute terms and increasing the stickiness and quality of liquidity flows.
Our pricing varies for accessing these different liquidity pools. And as such, we continue to see variability in our net take rates. We expect increases in volume to continue to outweigh any declines in average net take rates over time. The absolute revenue effect of these volume and net take rate factors is shown on the chart on the top right of the slide, combined with the positive effect we saw in the year across other contributing marketplace revenue drivers, including data and our investment management business, Forge Global Advisors.
Heading into 2025, we are continuing to see the benefits of these diversified liquidity sources and contributing market-based revenue pools, such as the Q1 market-based revenues are performing in line with our expectations of a post-election recovery in investor sentiment. However, having reviewed street averages, revenues for the full year 2025 exceed our current expectations.
Total custodial administration fees were $41.8 million in ’24 compared to $44 million in ’23. Cash administration fees, the larger components of custodial administration fees, are highly correlated to custodial cash balances and the level of interest rates.
You can see the year-over-year impacts on the waterfall chart on the bottom right. The impact of the decline in average custodial cash to [$478 million] in 2014 from $556 million in ’23 was partially offset by higher rates in ’24.
The Federal Reserve reduced interest rates by taking 100 million basis points over the course of ’24, as compared to an increase of 100 basis points over the course of ’23. Custodial cash balances were $483 million in the end of 2014 compared to $505 million at the end of ’23. In 2025, we expect to generate lower cash administration fees.
Total custody accounts increased 14% year over year to $2.4 million from $2.1 million. The growth in accounts came from our CAS or CAS as Custody-as-a-Service business, which have lower account fees. However, we saw less revenue generating activity in ’24 from our core self-directed IR accounts, which led to the $0.9 million decline you can see in the bottom right of the slide.
Assets on the custody ended 2024 up 8% year over year to $16.9 billion from $15.6 billion at the end of 2023.
Our operating expenses were broadly flat year over year. As you can see in the graph, our in-year cost to achieve our announced cost savings exceeded the savings realized in the period. However, as I said earlier, we ended the year on track to realize $8.2 million in annualized run rate cost savings.
We have a number of items in our cost base which are linked to revenue growth and these grew by $4 million, but were offset by other positive year-on-year savings of $1.3 million and positive movement in non-cash items of $4.1 million.
Our full year net loss was $67.8 million in 2024, an improvement of $23.7 million from the net loss of $91.5 million last year. The lower loss was attributable to $9.3 million in higher revenue and $15.9 million in higher other income due to favorable reductions in the fair value of warrant liabilities.
Our fiscal year 2024 adjusted EBITDA loss was $43.7 million, compared to an adjusted EBITDA loss of $48.8 million in 2023. The improvement in adjusted EBITDA loss is in line with a lower 2024 net loss adjusted for non-cash items.
Net cash used in operating activities was $40.5 million in the year, basically flat compared to the net cash used in operating activities of $41.5 million in 2023. 2024 included one-time cash payments of $4.3 million in connection with the resolution of legacy legal interest.
As of December 31, 2024, our total employee count sits at 300, down from the 331 on December 31, 2023. This headcount excludes contractors, including a growing number located offshore, which augments our technology capabilities in a cost-effective manner.
From a housekeeping perspective, our weighted average basic number of shares used to compute net loss was 186 million shares, and our fully diluted outstanding share as of December 31, was 201 million shares. For Q1, we estimate 187 million weighted average basic common shares for EPS modeling purposes in a loss position.
Having reviewed our medium term plans in my first couple of months at Forge, with a strengthening private market investor sentiment and a strong and growing pipeline in the first few months of 2025, we remain confident in our target of reaching adjusted EBITDA breakeven in 2026. I plan to provide more detailed guidance on our path to this goal in the coming quarters.
I’ll hand it back to Kelly before we go to questions.
Kelly Rodriques
Thanks, James. As we look forward, we’re focused on making progress toward a fully automated trading experience, exposing more data to drive market adoption and enabling new financial products that will deliver greater access and liquidity into this market, all while diligently managing our costs. We are confident in our strategy and in our vision for the future, and are optimistic about an accelerated pace of market momentum in 2025.
Thank you for joining us and we’ll open up for questions.
Operator
(Operator Instructions) Patrick Moley, Piper Sandler.
Patrick Moley
Yes, good evening. Thanks for taking the question. So I had one, Kelly, on the fully automated trading capabilities you’re building out. Just wondering if you could maybe elaborate on the go-to-market strategy there. And in terms of just nconversations that you had with customers, where do you see this demand coming from? Is it mostly asset managers? Is it trading firms? Any color there? Thanks.
Kelly Rodriques
Yeah, thank you. Great to hear from you, Patrick. This has really been the centerpiece of our Next Generation Platform vision for three years. And let me just say that we’ve spent 2 years, 2.5 years almost, of investment in the foundational platform that will allow us to build some of the really important markets facing capabilities that will be viewed and felt by the market. Forge Pro was sort of the big breakout release last year. And so this fully automated experience is something that we believe will serve every part of the market.
It’s unequivocal to us that the market for private shares, this asset class has had a need for standardization and a need for automation. And this is really part of the focus and the vision. So we’re really excited about — I guess what I would say is, I’m making this really clear right now in Q1 of 2025, and more details will be announced as we move through the year about when this will be realized.
But we’ve mentioned it a couple of times, this is the first time we’ve mentioned it this directly. And so I think it will cut across our entire customer base.
Patrick Moley
Okay. And then just — yeah, just to follow up for me, Robinhood’s CEO recently wrote an opinion piece in the Washington Post about the opportunity to democratize access to private markets, or private companies through the use of blockchain. So just wondering if you’ve read it, just your thoughts on this, and are there any potential opportunities out there to strike strategic partnerships with retail brokerage firms for Forge? Thanks.
Kelly Rodriques
Yes. You know, my take, and I read the piece, and we were both at a conference yesterday, literally got a chance to speak to him coming off the podium. This is part of our vision as well. When I saw that, what I saw was him commenting on certain elements of future-based settlement technology, we thought about blockchain tech as being a critical core markets will evolve, not just private markets and not just crypto markets. So I fully applauded the piece. I thought it was great.
And I guess, part of what our vision for what we’re building here is an extensible platform that can integrate into any modern infrastructure that would provide distribution to interested participants in the private market, whether it be a Robinhood, application, or any sort of investment platform that can integrate with a modern API to include private participation in private markets. So that’s completely compatible with our future strategy. We’re very excited to hear and see that piece.
Patrick Moley
Yeah, very, very exciting stuff. Thanks guys, that’s it for me.
Operator
Dein Ryan, Citizens.
Devin Ryan
Great. Hi, everyone. I feel like we just did this, but good to catch up again, Kelly. James, welcome; and Mark, congrats on the new role.
I do want to talk about the SPV phenomenon, because I know that’s an area that hopefully it’s going to drive more liquidity into the pilot markets and just make turnover, I think, easier and kind of remove some of the friction. So just love to get a sense of kind of the evolution that you guys are seeing in terms of how SPVs are being utilized.
And if you give any sense of kind of where we are today relative to the last cycle, the up cycle and maybe 2021 peak, like how many more are on the platform, if there’s like an AUM number, but just any give context of how important this is gonna be to drive more liquidity into the markets? Thanks.
Kelly Rodriques
Sure thing. Good to hear from you again, Devin, and thanks for yesterday. We have seen this coming for a while. If I go back to 2018, this was really the emergence for us of the SPV phenomenon in the market space.
Now, I think one of the comments that we wanted to be really clear about, and I’m going to come back to the SPV specifically, is part of what we are doing here at Forge is dealing with a diverse set of investment vehicles. And it’s really the sum of the parts. That’s the story here.
It’s our access to directs, it’s these SPV structures. And what we believe is gonna be essentially a future where part of what you’ll see from Forge is the expansion, the rapid expansion of these SPV structures, not just to hold single names. Because up until now, we have primarily held single names within these SPV structures to help with the reduction of friction as these positions turn over time.
This is a huge part of our Airbnb business back in 2018 and 2019 before they went public. And we see this expanding into multi-name SPVs. And I mentioned at the conference yesterday that one of our partners, Accuidity, just announced the launch of a 40 Act fund. And that 40 Act fund will be powered by the Forge Private Market Index. And this is another example of just the fund structure that will drive liquidity and expand access in this business.
To get to your question specifically, we probably had three or $400 million of AUM in these SPVs a couple years ago, and now we’re at about a billion. And this is an area of real focus for us. And we think that when you start getting into baskets and more than just single name SPVs, it will be attractive to those who want to diversify and hold a range of positions in a single investment. And it will obviously continue to provide liquidity.
And right now, we’ve got 100 of them. I won’t make any prediction or forecast, but we want a lot more. This is a big part of our emphasis going forward. So thank you for that question.
Devin Ryan
Yeah. Yeah, thanks, Kelly. Yeah, it seems like an area that could just remove some of the friction that exists in the private markets.
So second question, just on the outlook for 2025, you appreciate we’re already two months into the year, and it’s been a pretty volatile start just with the macro uncertainty and tariffs and equity capital markets are actually tracking down a bit year over year. But at the same time, there is optimism around the IPO market. And there’s a pretty wide range of expectations out there around what 2025 will look like in terms of just capital markets more broadly.
So I’m just curious, I heard the outlet commentary around kind of the revenue expectations and appreciate that it’s hard to predict the full year based on two months of where we are right now. But what are you guys kind of baking into your view in terms of the kind of the pace of recovery? Are you — my sense is you’re probably not expecting kind of a coiled spring snapback and IPOs and just that’ll trickle into the private market, but kind of more of a slower grind up.
But I’m just curious kind of in your expectations and just even the framing in the prepared remarks, kind of how you guys are thinking about 2025 in terms of how it progresses? Or at least for budgeting purposes. Thanks.
Kelly Rodriques
Yeah, so I’ll just give you some sentiments and I’ll let James weigh in here. So we see signals in the data that are indicating a steady momentum in the year. We’re not expecting a massive recovery and IPO start rushing, but we are expecting an improved environment. I’d say we’re also watching, like everybody else, the broader macroeconomic situation.
For example, with the tariffs, is this going to continue? Is this going to settle down? I’d say, so far, at least in the private markets, valuations and the momentum of capital raising and the discussion about IPOs in ’25 has not been negatively affected. And some of the funding has been up.
The Q4 funding, for example, was up $25 billion. And so there are correlations that we’re seeing around funding and IPOs. And so if that improves steadily, it doesn’t require the floodgate to blow open. We think we’re going to see a year that’s got marked improvement. And so we’re pretty excited about, pretty optimistic about.
James, you want to add anything?
James Nevin
Yeah, I think the thing I thought — and Kelly talked about some of those leading in cases, which we’re clearly feeding into our thoughts on both Q1 and the full year from a market perspective. And as Kelly said in his comments, we’re expecting Q1 to come in for marketplace ahead of our best quarter last year. And that improvement gives us confidence going into Q2 and beyond.
I think the one element I’d also add, which I discussed in the comments earlier, is around our custodial cash administration fees, which are clearly correlated to the interest rates. And even though the rate environment probably is a little better than it might have been when we thought coming into the year, we’re still going to see the impact of where we’re at post the 100 basis points of cuts last year. So that’ll flow into that half of our business too.
Devin Ryan
Let me make one quick clarification. There were a couple of things.
James Nevin
Go ahead, Devin, let me let you finish.
Devin Ryan
Yeah, if it’s related, I wanted to dig in because I think the piece on the IPS, because there’s obviously, I agree, the data, at least year to date hasn’t been great. But at the same time, all the leading indicators are there, and the headlines are there, and I think there’s a strong demand for companies to go into public markets. And so we’ll see how this all plays out from a timing perspective to the extent there is that scenario where, you know, the flood gates do start to open kind of in May, June of this year.
How quickly could that show up in your results? Because I just think when you’re in an inflection point, it’s hard to get really precise around the timing, but at the same time, the IPO markets are incredibly depressed and they will be better than they are today at some point. So I think we’re all trying to wrestle with exactly when it happens and that’s going to affect you guys, but trying to understand. If it does happen this year, when would that show up in your results?
Kelly Rodriques
So it’ll show up in our results specifically in the names that announce. To be clear, one of the things that we’ve seen is in an environment where there are IPOs, then it corresponds to more volume and force. But if you double click down into it, it’s really clear to me that if, I mentioned CoreWeave in the comments, you know, we will see interest in a name that files.
And the question is, will we see interest? Will multiple companies file because that will have meaningful impact? And it’s fairly correlated. It happens, you know, when a company is three to six months from going out, it starts to pick up.
But it’s hard to predict because some — right now, Devin, the interesting thing about the environment that we’re in is the funding levels have gotten so, accelerated particularly for AI and some of the crypto names, that these companies don’t need to go public to raise capital. So the irony of the improving environment in some ways is that in certain sectors, they’re raising money at the level of valuation which doesn’t require it. And if I look at just what you’ve seen with some of the Private Mag 7, if you look at SpaceX and OpenAI, they’ve been able to really access capital valuations that are attractive to them in the private market.
Now, CoreWeave is the biggest name and it’s also a pretty attractive sector. So that’s the one that I think people are watching. But I will say, I think it’s a little premature to see one company come out to have a meaningful impact for Forge. We need to see some steady, reasonable stream for it to materially shift the trajectory. But I’d say, watch and listen for future comments as we round out Q1.
And I think that James gets his feet underneath him here. We intend to deliver clearer messaging also around our path to profitability. And I want to make that really clear to the audience here as well.
Devin Ryan
Okay, excellent. Thanks so much, guys.
Operator
Ken Worthington, JPMorgan.
Michael Chow
Hi, good afternoon guys. Thanks for taking my questions. This is Michael Chow in for Ken today. I just want to just continue on the conversation around the outlook and I recognize there’s some uncertainty but good data points as you suggested, Kelly.
But I guess, if I’m just thinking through either first quarter, or 2025, or even exiting 4Q, I mean, can you just talk through and give some color in any recent movements in terms of the mix of clients or trade type? Just, again, just give them the positive data points. And what I’m really just trying to get at is, you know, I’m just trying to understand the data is improving, the volume seems to suggest more improvement from here. I’m just also trying to understand how take rates could be impacted if we potentially get more engagement from institutional clients and maybe even more SPV activity ahead?
Kelly Rodriques
Okay, I’m going to actually let James answer this question, but I want to make one or two quick clarifications. One, in James’ comments, he talked about take rates for 2024 coming in at 2.8%, and they were 3.3% in 2023.
I think he inadvertently used millions as opposed to percentages there. So I wanted to clarify that for the entire call. That take rate differential was 2.8% in 2024 and 3.3% in 2023. This will tee up, James, to give comments on take rate impact based on segment. But the only other place I want to make a quick clarification is we talked about the comparison of custodial cash in ’24 to ’23, and I think we inverted $478 million. It was $487 million. So let me just clarify those points.
And then, James, I’ll turn it over to you on the sort of relationship take rate to this segment.
James Nevin
Yeah. Thanks, Mike. I think, as we said in the script, we’re seeing an increasing diversity of sources and each of those pools come with different rates overall. I think to give a bit more color to that, I think what we saw in 2024 was, in general, larger trade sizes. So overall, volumes were up with a mix of those volumes. We saw an increasing number of large blocks and those large blocks often come at a lower rate.
I think we’re also seeing an increasing interest in specific hot names and hot sectors. And whether those supply and demand dynamics in a smaller number of stocks or sectors, that also affects kind of the rate that we charge on one or other side of the trade or maybe on both sides of the trade.
And the commentary we were giving earlier around SPVs and particularly third-party SPVs, we see this, as Kelly says in reply to Devin, we see this generally as very beneficial to the market in terms of the volume and liquidity, but a number of those SPVs, especially third-party ones, have costs embedded in them already, and therefore the cost that we charge for trading with those SPVs, again, can be lower.
And I think those factors overall really lead to our belief that over time we’re going to see increased volumes from all those trading dynamics. But as we go through that progression, we expect to see what we’ve seen in ’24, is that any small declines in net take rate will be more than outweighed by the volumes from accessing those pools of liquidity. that may have slightly different rates to us.
Michael Chow
Okay, wonderful. Now I appreciate all the color. And just to follow up, I mean, James, I’ll just stick with you on my follow-up. We’ve talked through again, some revenue top line commentary for [1Q and ’25]. I’m sorry if I missed it, but there’s a number of moving pieces on the cost stage. You pointed out $11.9 million of achieved cost stage. And I’m trying to think through as ’25 progresses, how should we think about comp or even headcount expectations as you look ahead, given the improving backdrop that we’ve cited?
James Nevin
Yeah, I think what I’d say on that is we’ve achieved the cost savings that we set out to achieve. I think cost control is kind of the mode we’re moving into in 2025. I think if you look at the numbers we’ve put out, especially in the charts on the slides, I think you can think about looking at Q4 and normalizing the numbers there for the one-offs within a period.
And then, as we said, we are continuing to selectively invest in key strategic areas. But that includes doing the offshore and that I mentioned earlier, which is specific on tech currently, but we’ll probably roll that out into some other functions as well during 2025. And while we do that, we’ll have a little bit of additional cost as we go through the kind of parallel run.
And I think the other point I’d make is, clearly, we have some costs that are variable or tied to revenue increases. And you can see that on the year-over-year slide that we put in as well. So as you think about revenues increasing, I think there’s some variable costs and that variable gross margin using what we suppose there can help you get to the right kind of numbers that we’re thinking for 2025 cross based.
Michael Chow
Okay, perfect. Thank you so much. Thank you, Mike.
Dominic Paschel
We have a few questions from email. I guess one of them is about Forge liquidity and also the RA fund business and where Forge is going with the two of those.
Kelly Rodriques
Well, liquidity is a big partner. And we were really excited to see their SEC filing that I referenced, I think, on a previous question. We are convinced that more access translates into more liquidity and more scale for Forge and the private market. So the fact that they’ve got a 40 Act Fund that’s been filed with the SEC to allow investors that have not been able to access this private market is incredibly interesting for the future of the private market.
And if you take a look at their fund performance in 2024, that was powered by the Forge Private Market Index, it’s up 17% through the year. So our view is, there’s a lot of investors out there excited about the Mag 7. We think the private Mag 7 is a really interesting basket and we think liquidity represents the emergence of what I referred to in the talking points as innovative investment vehicles that are emerging in the marketplace.
So we are really going to push heavily on this in 2024 and the leadership of equity, their backgrounds and what they previously have done shows that asset managers that were very, very big, in passive fund management over the last 10 years are moving into the private asset class. So we’re really excited about them.
And Dom, remind me, what was the other point besides liquidity on there?
Dominic Paschel
The other point was related to kind of the SPV route that Forge clients to take or try to leverage.
Kelly Rodriques
Yeah, I think I covered that mostly in Devin’s piece. I just think that besides single name SPVs, you’re going to see some emergence of multi multi-name baskets. I also just want to say that the overall market is moving into SPVs too. This is not just a force phenomenon. But that’s one of the reasons why we kind of kept this under wraps for a while. We didn’t talk about this at all until maybe one or two calls ago.
So, you know, the billion dollar AUM or close to billion dollar AUM that we reported has been building for the last few years. We expect that to be you know, an interesting area of growth and potential opportunity for us going forward.
Great. Do we not have any other analysts?
Dominic Paschel
Yeah, I think we’re nearing time. Okay. So we thank you for your interest and for joining us on today’s fourth quarter 2024 and full year 2024 conference call. And we look forward to seeing everyone out on the conference circuit, and meeting James.
Thank you, Dale.
Kelly Rodriques
Thanks, everybody.
Operator
Thank you. This concludes today’s conference call. You may now disconnect.
