On Thursday, Forum Markets (NASDAQ:FRMM) discussed second-quarter financial results during its earnings call. The full transcript is provided below.
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View the webcast at https://forum-earnings-q2-2026.open-exchange.net/registration
Summary
Forum Markets, Inc reported a decrease in revenue to $1.4 million for Q2 2026, primarily due to eliminating $1.8 million in staking revenue as part of a strategic shift.
The company repurchased approximately 7.1 million shares, representing 35% of outstanding shares, as part of a disciplined capital allocation strategy.
Forum Markets, Inc is focusing on income-producing assets such as commercial aircraft engines and AI infrastructure, with plans to deploy significant capital in these areas for future revenue growth.
Net loss from continuing operations was $12.4 million, significantly improved from a $77.5 million loss in Q1, reflecting a cleaner operating expense structure.
The company maintained its full-year revenue guidance of $18-22 million, expecting a significant revenue contribution from AI infrastructure deployments in the second half of 2026.
Forum Markets, Inc continues to explore tokenization as a long-term strategy but is currently prioritizing cash-generating assets and operational growth.
Management emphasized a strong focus on disciplined capital allocation, with further stock repurchases considered based on market conditions.
Full Transcript
Megan, Operator
Hello and welcome to Forum Markets, Inc’s second quarter 2026 earnings conference call. During today’s discussion, all callers will be placed in a listen-only mode. Following management’s prepared remarks, the call will be open for questions. This call is being recorded on August 13, 2026, and a replay will be made available on the Forum Markets, Inc Investor Relations website later today. I will now turn the call over to John Kristof, Senior Vice President, Corporate Communications and Investor Relations.
John Kristof, Senior Vice President, Corporate Communications and Investor Relations
Thank you, Megan, hello, and thank you all for joining Forum Markets, Inc’s second quarter 2026 financial results conference call. Joining me on the call today are McAndrew Rudesill, Chairman and Chief Executive Officer, and John Saunders, Chief Financial Officer. We hope you’ve had the opportunity to review our second quarter financial results issued earlier this morning. We’ve also posted an earnings presentation to our Investor Relations website.
As a reminder, some of the matters we’ll be discussing on this morning’s call are forward-looking in nature. Please keep in mind that actual results could differ materially from what is expressed in these forward-looking statements. Forum Markets, Inc assumes no obligation to update the information, and we encourage you to refer to our most recent filings with the SEC for a discussion of factors that could cause actual results to differ materially from these statements.
During our call today, we may reference certain non-GAAP financial measures, which we believe provide meaningful information for investors. A reconciliation of these non-GAAP measures to the corresponding GAAP measures can be found in our press release and presentation, both available on our Investor Relations website. And with that, I’ll turn the call over to McAndrew.
McAndrew Rudesill, Chairman and Chief Executive Officer
Thank you, John, and good morning, everyone. Thank you for joining us. Since our last call, we have continued to execute against Forum Markets, Inc’s operational strategy while taking a disciplined approach to allocating shareholder capital. We are building Forum Markets, Inc by combining deep operating experience with disciplined capital allocation. Operationally, our focus is on acquiring and managing cash-flowing assets with attractive risk-adjusted returns in large, scalable markets with moderate to high complexity and durable demand.
Our assets are intended to generate cash flow first, with the option to tokenize on regulated digital infrastructure second, as the market for tokenized real-world assets grows over time. On the capital allocation side, we took decisive action in the quarter to return value to our fellow shareholders. Given the disconnect between Forum Markets, Inc’s market value and what we believe is the intrinsic value of the company, we determined that repurchasing a large percentage of our stock represented the most attractive use of capital available to us.
During the quarter, we repurchased approximately 7.1 million shares, about 35% of our shares outstanding prior to those repurchases. All shares acquired under the program have been retired. Our second quarter results reflect a deliberate capital allocation decision. We chose to deploy a meaningful amount of capital allocated towards share repurchases rather than acquire additional revenue-producing assets based on our view of the value that was available in our shares.
We evaluate capital allocation continuously, and we’ll keep directing it to where it earns the best risk-adjusted return for shareholders. With that discipline in place, our near-term core focus is anchored on deploying capital into cash-generating assets and growing revenue in the second half of the year, which John will cover in more detail. Turning to the Board Special Committee, we believe the process has advanced meaningfully since our last call, and we are encouraged by the quality and level of engagement we have seen to date.
The committee continues to evaluate each opportunity against a clear standard: which path best maximizes long-term value for Forum Markets, Inc shareholders. While we cannot comment on specific discussions, potential counterparties, or transaction timing, we expect to be in a position to provide shareholders with a meaningful update prior to our next earnings call. Management remains fully focused on operating the business and strengthening our fundamentals in the meantime.
On the asset side, even accounting for capital deployed towards repurchases, we continue to expand our portfolio of income-producing real-world assets and have done so at an accelerating pace since quarter-end. Most recently, we acquired two additional commercial aircraft engines, bringing our aviation portfolio to five engines under long-term lease to two of the largest U.S. airlines. Both engines were already on lease and generating contracted revenue at the time of purchase, and we are targeting double-digit annual returns on the pair.
John will cover the financial specifics in his remarks. Commercial aircraft engines are representative of the types of high-quality real-world assets where proprietary deal-flow networks and structuring create investment opportunities that are not broadly accessible through traditional public markets—exactly the profile we look for. We also continue to advance our AI infrastructure vertical, an access-constrained market where we see attractive opportunities to generate great returns and durable cash flow.
Our initial work in short-term GPU financing helps surface adjacent opportunities within the same ecosystem, including the deployment and operation of AI equipment across data centers and inference compute locations, generating revenue from the compute. We are now close to deploying capital into AI infrastructure in the area of AI compute, which we expect to contribute meaningfully to revenue in the second half of the year. We also continue to evaluate opportunities in short-term GPU financing with partners that align with our operational compute model.
We believe aviation and AI infrastructure are particularly attractive areas for near-term expansion because both combine substantial capital demand with specialized origination requirements and access-constrained investment opportunities. At the same time, we have built origination capabilities across all four of our core verticals, and overall deal flow has accelerated meaningfully in 2026. That has broadened the range of opportunities available to us and allows us to be highly selective on structure, counterparties, and risk-adjusted returns.
Manufactured housing and auto credit round out the platform by providing additional sources of secured, cash-generating assets. These categories reflect prioritization of assets that generate attractive income, are backed by tangible collateral and strong offtake counterparties, and can create additional value through origination, management, and distribution. Over time, we will continue to deploy capital selectively where we see the strongest risk-adjusted returns, with a particular focus on markets where our capabilities can improve capital formation.
This multi-channel model supports several distinct sources of value, including yield on assets held by Forum Markets, Inc; origination and structuring economics; asset management fees as third-party capital participates; and distribution or marketplace economics as those channels mature. In addition, Liquidity IO remains a part of Forum Markets, Inc’s long-term tokenization strategy, and its platform upgrade is expected to significantly broaden its capabilities during the second half of 2026.
However, I want to reiterate that our first priority is to build a portfolio of high-quality operating businesses with cash-generating assets while maintaining the option to tokenize and distribute as market demand grows over time. We believe Forum Markets, Inc has built a differentiated base of income-producing assets, proprietary origination relationships, and distribution capabilities, and we remain focused on increasing the value of that platform and ensuring that value is created for shareholders.
With that, I’ll turn the call over to John.
John Saunders (Chief Financial Officer)
Thank you, Nick, Andrew, and good morning, everyone. Before reviewing the quarter, I want to briefly reiterate the financial framework we use to evaluate Forum Markets, Inc’s progress at this stage. The most relevant measures are the size and composition of our income-producing asset base, the yield and cash flow generated by those assets, our origination and management economics, and net asset value per share. Tokenization remains an additional distribution and liquidity option, but the underlying assets do not need to be tokenized to generate revenue or create value for Forum Markets, Inc. Turning to the second quarter, Forum Markets, Inc generated revenue of approximately $1.4 million compared with $2.9 million in the first quarter of 2026. Revenue during the quarter was driven primarily by aircraft lease revenue of approximately 1.4 million, manufactured housing and auto credit interest income was approximately 0.38 million, and interest and other financing income of approximately 0.42 million. The decline in revenue from Q1 was due to the elimination of 1.8 million in staking revenue resulting from the strategic decision to sell the majority of our Ethereum holdings in March as we transition to our current operating model.
Results for the quarter also reflect in part our decision to allocate capital into share repurchases rather than additional revenue-generating assets. Our revenue mix is becoming increasingly representative of Forum Markets, Inc’s current operating model of contracted asset income, financing yield and, as the platform scales, origination, structuring and management fees. General and administrative expenses were approximately 10.3 million for the quarter and compared with 7.5 million in the first quarter.
General and administrative costs included non-cash stock-based compensation expense of approximately 3.8 million and one-time cash charges of 1.8 million consisting of an early termination fee to exit our asset manager agreement and taxes paid in the UK to settle a VAT repayment liability associated with exiting the legacy biotech business. We continue to invest in the personnel, systems, underwriting capabilities and partnerships required to support platform growth while maintaining a disciplined approach to operating expenses.
Net loss from continuing operations for the quarter was approximately 12.4 million compared with a net loss of 77.5 million in the first quarter. Adjusted EBITDA loss for the quarter was approximately 7.4 million compared with an adjusted EBITDA loss of approximately 76 million in the first quarter. The first quarter results included substantial digital asset-related losses associated with the final repositioning of the balance sheet. The second quarter results provide a meaningfully cleaner view of our operating expense structure and the income generated by our real-world asset portfolio.
Turning to the balance sheet, as of June 30, 2026, Forum Markets, Inc reported total assets of approximately 159.1 million with cash and cash equivalents and marketable securities of approximately 48.4 million. Our quarter-end asset base included approximately 16.7 million of commercial aircraft engine assets, 14.7 million of manufactured housing loans, 2.5 million of auto loans and warehouse financing assets, and 45.7 million of strategic equity investments.
Subsequent to quarter-end, Forum Markets, Inc deployed approximately $23.7 million in cash to acquire two additional commercial aircraft engines, both of which were already generating contracted lease revenue at the time of acquisition. Those assets are not reflected in the June 30th balance sheet. Based on our quarter-end balance sheet, we estimate net asset value of approximately 1,127.8 million or approximately 9.68 per share undiluted based on approximately 13.2 million shares outstanding.
We view NAV per share as a useful reference point given the current composition of our balance sheet, while recognizing that our objective is to scale our operating platform to extend our value well beyond the assets currently recorded on the balance sheet. As McAndrew mentioned, capital allocation was a central focus during the quarter. Forum Markets, Inc used approximately 31.3 million to repurchase approximately 7.1 million shares at an average price of $4.42 per share inclusive of fees.
Those repurchases reduced the number of outstanding shares to approximately 13.2 million. We concluded that the discount on our equity represented one of the most attractive opportunities available to create value for shareholders. This choice reflected a disciplined capital allocation strategy, prioritizing high-conviction shareholder value creation over near-term revenue expansion. The Board subsequently extended the repurchase program through June 30, 2027, adjusting the aggregate authorization to 100 million, and authorized additional repurchase methods including derivative transactions.
Further activity remains discretionary and will be evaluated relative to our liquidity needs, available asset returns and the market price of Forum Markets, Inc shares. With respect to guidance, our full-year 2026 expectations remain unchanged. Since quarter end, we have acquired two additional aircraft engines, both of which are already generating contracted lease revenue. As McAndrew mentioned, we are also in the advanced stages of finalizing a phased AI compute transaction that we expect to complete and begin generating revenue from in the fourth quarter.
Based on the expected contributions from those assets and our current pipeline, we continue to believe we are on track to achieve revenue within our full-year guidance range. We continue to expect full-year 2026 revenue to be in the range of 18 million to 22 million. Revenue growth is expected to be uneven as it is dependent upon the timing of transactions and deployment of capital. We are also striving to become cash flow positive by early 2027.
Our focus going forward remains disciplined capital allocation, revenue growth from income-producing assets, increasing origination and management economics, and continued improvement in NAV per share and long-term earning power. With that, I’ll turn the call back over to the operator for questions.
Megan, Operator
We’ll now begin the question and answer session. If you would like to ask a question, please use the raise hand icon which can be found in the black bar at the bottom of the webinar application screen. When you hear your name called, you’ll be prompted to unmute your line and ask your question. We’ll now take a moment to allow the queue to form. Our first question will come from Mark Palmer with Benchmark (StoneX). Your line is open. Please go ahead.
Mark Palmer, Analyst at Benchmark (StoneX)
Yes, good morning and thank you for taking my questions. Wanted to dig into your reiterated revenue guidance for the year and the fact that that implies a pretty healthy ramp-up in the second half of the year. Can you walk us through the components of that bridge and specifically how much of the revenue would be derived from the five engines that are now on lease, how much from manufactured housing and auto, and how much is contingent on the AI infrastructure deployment closing and contributing in the fourth quarter.
Thank you.
McAndrew Rudesill, Chairman and Chief Executive Officer
Hey Mark, it’s McAndrew. Thanks for your question. I’ll start with the last bit of your question first because it’s probably the most impactful. We’ve done a lot of work over the last few months in both the AI financing space on the short-term bridge loans that we’ve looked at, as well as looking at AI compute models. And the conclusion that we’ve come to is that short-term bridge financing on GPUs is a highly attractive business to be in. But the real critical juncture that we’re seeing in a lot of these transactions is the acute need for energy that’s immediately available so that compute can be accessed.
And so we’ve spent a lot of time working on that problem. And we think that we found a couple very interesting solutions where we can purchase GPUs and we can deploy them and they can immediately start generating revenue. And we’re very focused on doing that in the balance of the year. And that will make up a pretty large percentage of our total revenue in the back half of the year. But it ramps at an incredibly fast rate because of the economics of the business model of deploying GPUs today into the compute market due to the demand structure that we’re seeing.
So on an absolute percentage basis, I’ll let John comment on that, but I’d say that becomes greater than 50% of our revenue in the back half of the year. And we have ample capacity to continue to ramp the engine portfolio up as well. You saw that we, you know, added another two in July. We can easily continue to add, the pipeline of engines is very strong, but the returns on the AI compute are so much greater than anything else that sits in front of us.
I think you’ll see us focus most of our energy on that in ramping the revenue up.
John Saunders (Chief Financial Officer)
Yeah, this is John Saunders here. Just to chime in. We think that the aircraft engine revenue for the back half of the year will be somewhere in the 5 to 6 million. Based on those five engines operating, as McAndrew alluded to, we may decide to acquire additional engines. The AI infrastructure project would probably account for approximately 50% of that guidance revenue. Coming online in Q4, the early indications are somewhere in the, you know, 8 to 12 million range.
But it could be higher depending on the timing. So we will provide more update on that as we close the deal. But that’s sort of high-level indications of how we would get to the revenue guidance.
McAndrew Rudesill, Chairman and Chief Executive Officer
I’d also stress that the rate of incline on those revenues as GPUs are deployed goes up at a very high rate as you move into 2027. So we’re focused on sort of large shifts in revenue that can occur over the entire course of ’27 and ’28 by the deployment that we’re starting in Q4 of this year.
Mark Palmer, Analyst at Benchmark (StoneX)
Thank you. And as a follow-up, wanted to get your take on the current state of things at Liquidity I/O and what your thoughts are at this point about distribution in general, how you expect distribution to evolve as the rest of the platform continues to evolve. Thank you.
McAndrew Rudesill, Chairman and Chief Executive Officer
Yeah, as we mentioned in the call, I think Liquidity I/O will come online in the back half of this year. They’re actively working with Alpaca on integrating their private market systems. I think they’re ready to go on stock trading and crypto and options and fixed income, which has been relatively straightforward. I think the integration of the trading of the private assets is really the key to the success of the platform and they’re working on that with Alpaca right now to make it an easy transference if you want to buy a stock versus you want to buy a token.
And, you know, just being completely transparent about the token market, from what we’ve seen, there’s not a large market for tokens yet globally. And the one thing that’s been tokenized the most is U.S. Treasury securities. But the types of private assets that we’ve talked about tokenizing, the marketplace just isn’t there yet. We do think it’ll develop over time, but we’re not spending any of our capital or time working on this very heavily right now because the revenue and cash flow opportunity is so great in the AI compute space.
So it’s really a call option for us on the future of tokenization. And all the assets that we have on our balance sheet can easily be flipped into a tokenization model from a programming perspective when the marketplace develops.
Mark Palmer, Analyst at Benchmark (StoneX)
That makes sense. Thanks very much.
Megan, Operator
Your next question will come from Brendan McCarthy with Sidoti. Your line is open. Please go ahead.
Brendan McCarthy, Analyst at Sidoti
Good morning, everybody. Appreciate you taking my questions here. Just wanted to follow up on the regulatory environment of tokenization. McAndrew, I know you’ve cited the potential passing of the Clarity Act as maybe a key catalyst. Can you just talk about some of the regulatory hurdles you’re seeing at the moment and what might ultimately kickstart tokenization activity?
McAndrew Rudesill, Chairman and Chief Executive Officer
Good to hear from you, Brendan. You know, I’d actually point you to look at what the odds are on Polymarket or Kalshi for the Clarity Act passage. And that’s probably the best probability matrix that I can give you as to what’s going to happen with that. But without the passage of the Clarity Act and defined regulation about how tokens can be distributed and who can be the buyer, I think all the tokens really are, are effectively fund offerings wrapped in a digital wrapper and put on an exchange that are just Reg D or Reg CF fund offering.
So it’s no different than selling a mutual fund. So until you can get it into a more regulated framework that’s packaged and allows people internationally to trade it, we might as well just sell an ETF.
Brendan McCarthy, Analyst at Sidoti
That makes sense. I appreciate the detail there. And then just on the capital allocation front, so including the, you know, call it 24 million that you’ve spent on the recent aircraft engines, that kind of takes cash down to roughly 25 million currently, I guess. Do you anticipate that being ample capital to deploy into the AI opportunity as well as other aircraft opportunities to really reach that 2026 revenue guidance range?
McAndrew Rudesill, Chairman and Chief Executive Officer
Yeah, so that’s a great question. First of all, in the AI compute, the financing market is pretty interesting, and we’ve made a lot of inroads with the equipment providers and the distributors, and we can buy a lot of equipment in that market at a very high LTV because the offtake on the compute is contracted on a forward basis, and a high percentage of the cash for that compute is actually received up front. So we can use the vendor programs. Like you recently saw NVIDIA put together, I think, a $500 billion program with a bunch of banks and funds.
The vendors are actually putting together programs to allow people who have access to the power and offtake on the compute side to purchase the equipment up front. And so we’re going to gain access to that, number one, for capital deployment. I’d say number two is we’ve developed some pretty good partners in the private markets that I think can participate with us from an equity perspective if we want to ramp that capital deployment up for the right types of opportunities.
And then the third point I’ll make is we have absolutely zero leverage on our balance sheet. It’s purposeful. The aircraft engines are all contracted. They can carry some leverage. And I think we’ve kind of got three very distinct levers to pull in terms of capital allocation. And we’re going to just be very prudent about how we go about doing that. And we have to put the three pieces in place on the AI compute, which is the power, the offtake and then the financing to pull the trigger on the opportunities that are in front of us.
And I think we’ve done that on all three fronts.
Brendan McCarthy, Analyst at Sidoti
Understood. Appreciate the detail. On the capital allocation front, I know you prioritized, you know, buybacks in the second quarter. Is it fair to say that the capital allocation priorities have kind of shifted towards, you know, acquiring RWAs now over the buybacks, or is it still, you know, opportunistic at this point?
McAndrew Rudesill, Chairman and Chief Executive Officer
I mean, the buyback is still very much in the front and center of my mind as well as the board’s mind, and it just comes down to equity price. So we do want to ramp revenue. To your earlier questions, how do you get to Q4 revenue guidance? Well, you have to do it. You have to deploy capital on the things that generate revenue. But if the stock is just providing us with an opportunity to continue to take down shares, then we will. I mean, these are just the decisions that we have to make and they’re relative to one another.
Brendan McCarthy, Analyst at Sidoti
Makes sense. And do you have an update on how much is left on the buyback authorization?
McAndrew Rudesill, Chairman and Chief Executive Officer
I don’t think we have touched the new buyback authorization because we were previously working off the old quarter billion dollar buyback authorization program. So the new one I believe probably has like 90-something million plus dollars available on it.
Brendan McCarthy, Analyst at Sidoti
Got it. Thanks, McAndrew. That’s all for me.
McAndrew Rudesill, Chairman and Chief Executive Officer
All right, thank you.
Megan, Operator
Your next question will come from Brian Dobson with Clear Street. Your line is open. Please go ahead.
Brian Dobson, Analyst at Clear Street
Hey, thanks very much. So for the airplane engines that you purchased, those both came through already leased, generating double-digit returns. Is that the type of hurdle rate that we should expect when you’re committing capital or rather putting capital to work either via share repurchases or the purchase of new earning assets?
McAndrew Rudesill, Chairman and Chief Executive Officer
Yeah, Brian, our threshold is, you know, baseline high teens to even think about doing something right now. And on the AI compute, it’s meaningfully higher than that in the structures that we’re putting in place. And then on the buyback, you can see based on where we bought back the shares, what the percentage return was. I mean, that was the highest rate of return capital that we could have put to work in this quarter. And so that’s how we’re thinking about the world is where do you get the best rate of return relative to the risk that you’re taking?
Brian Dobson, Analyst at Clear Street
And then as you’re contemplating, call it AI infrastructure assets, what size of purchase are you looking at and who would be your competitors in going after those assets?
McAndrew Rudesill, Chairman and Chief Executive Officer
We are thinking quite large in terms of the scale of deployment and I’m not able to say, you know, total quantum, but we are focused on access to large amounts of power capacity in the United States and varying geographies where you can immediately get compute assets online. And I think to play in this game, you need to play at large scale. And that’s how we’re approaching it. And we’re approaching it with partners that can play at very large scale too.
Brian Dobson, Analyst at Clear Street
Excellent. Thanks very much for the color.
Megan, Operator
There are no further questions at this time. I will now turn the call back over to John Kristof for closing remarks.
John Kristof, Senior Vice President, Corporate Communications and Investor Relations
Thank you everyone for joining us this morning. And as always with any follow-up questions, please feel free to reach out to me directly. Thank you.
Megan, Operator
The call has concluded. Thank you for joining. You may now disconnect.
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