Speaker 1:

From the New York Stock Exchange at the corner of Wall and Broad Streets in New York City welcome Inside the ICE House. Our podcast from Intercontinental Exchange is your go-to for the latest on markets, leadership, vision, and business. For over 230 years, the NYSE has been the beating heart of global growth. Each week we bring you inspiring stories of innovators, job creators, and the movers and shakers of capitalism here at the NYSE and ICE's exchanges around the world. Now let's go inside the ICE House. Here's your host, Lance Glinn.

Lance Glinn:

Shari, thanks so much for joining us Inside the ICE House.

Shari Mager:

Thanks for having me.

Lance Glinn:

So we're recording just days after KPMG wrapped its annual IPO bootcamp here at the NYSE. Dynamic half-day forum, packed with insights on the IPO process, capital markets trends and alternative exit strategies. Based on the expert panels and speakers who shared their perspectives, what message do you think this event sent to attendees about the road ahead in 2025 and what inspiration it might have sparked for those who wince to everything?

Shari Mager:

Yeah, absolutely. So we always get questions around what's to come in the near term. And so certainly it's always interesting to hear perspectives on what do we see from the IPO market for the rest of the year. It's certainly been turbulent times, but we're in a little bit of a window right now. And so I think that gives some optimism and it did give optimism to folks in the room, and certainly allows them to think that there's opportunities to exit, take advantage of the window.

Shari Mager:

But I think the key message that we at least tried to impart is that it takes time to get ready and you can't start getting ready when the window opens. And so I think the important thing is to know that if you want to do a transaction in '25 or even in '26, companies should already be along that process of getting ready. And we touched on a lot of topics that they need to consider along that journey.

Lance Glinn:

Yeah, all about being proactive to say the least.

Shari Mager:

Definitely.

Lance Glinn:

So we've already here at the NYSE seen exciting IPOs just over the course of June, adding momentum to what's shaping up to be a promising season or what we hope to be a promising season.

Lance Glinn:

As you look ahead to the rest of the month into summer, we get towards September, October, November, rest of 2025, do you believe the current market climate presents a good window for companies right now to go public? And if so, what are factors that are driving that optimism?

Shari Mager:

Yeah, well, certainly some things that we like to see for a strong IPO market is reduced volatility, strong performance from public companies and recently public companies, and really just a reduction of uncertainty, which we've seen quite a bit of in the early part of 2025. So I think those things right now are shaping up to give us a good season here through June and through the summer.

Shari Mager:

Things tend to quiet down a little bit in the summertime and then pick back up again around September, October. And I don't expect this year to be very different from that. But certainly currently we're seeing strong trends of strong IPOs going out pricing well and after market performance, or sorry, after IPO performance being strong as well, which are things that think instill confidence in investors and make for a good IPO market.

Lance Glinn:

Absolutely. So in May US proceeds hit $6 billion, obviously still below the highs of the record-setting 2021 market, but double the monthly average we saw in 2024. What do you think is sort of fueling this uptick in activity and what's behind the growing investor appetite to get involved in new public offerings right now?

Shari Mager:

Well, I think one of the key things is just there's so much pent-up demand. So we had so much activity in '20 and '21 that really pulled forward a lot of IPO candidates. And so things definitely quieted down after '21 and have been slowly increasing since then, but still not at what we would consider normal levels.

Shari Mager:

So I think that pent-up demand is really leading to why we're seeing an uptick in activity when the characteristics of the market are strong and favorable and conducive to IPOs.

Lance Glinn:

So I want to pivot the conversation now to really what defines a successful IPO in today's environment? Investors increasingly focused on consistency and financial discipline. How critical is it for companies to come to market with valuations that aren't just aspirational? We all want our valuation to be as high as it can be, but how important is it to come to market with valuations that aren't just aspirational but firmly rooted in realistic data-backed fundamentals?

Shari Mager:

Yeah, it's extremely important, and I think a discrepancy between valuation expectations has been one of the drivers of a slower IPO market. So I think if companies come to the table with realistic expectations and even an appetite for a slight discount in order to complete the IPO knowing that they're going to benefit from the uptick post-IPO, I think those realistic expectations are extremely important.

Shari Mager:

And like you said, nobody wants to leave money on the table, but it's the difference between having too high of an expectation and not being able to complete the deal versus giving a little at IPO, but really taking advantage of the uptick from that point on.

Lance Glinn:

And a lot of the heavy lifting in the IPO journey happens long before a company rings a bell. You talked about it. It's all about being proactive. You don't start looking towards an IPO when the window is good. You look way before.

Lance Glinn:

In your view, what are some of the most overlooked but essential pieces behind the scenes that really lay the groundwork for a strong market debut and a successful first earnings?

Shari Mager:

Yeah. Well, I think having a strong business model and strong business fundamentals is key, and most companies are very focused on that, and I think do well from that perspective. And going along with that would be the story that goes along with the business and how they articulate the equity story. So I think that's something that companies need to have really crisp and to really test their messaging with investors well before an IPO.

Shari Mager:

I think the other thing that gets overlooked is just the amount of rigor and infrastructure that's needed to both go public and be a successful public company. And that shouldn't be underestimated. The regulatory requirements and just the expectations of investors. If you can't meet a filing deadline, if you can't hit your earnings targets and projections, those are fatal flaws for a company that's newly out of the gate. So those would be some things that I do think companies really need to focus on in that getting ready journey.

Lance Glinn:

So as to that getting ready journey, and again, focusing on the proactiveness and getting ready before the window opens, how vital is it for a company preparing to go public, company X, preparing to go public to have that clean, well-structured documents of financials? In what ways does transparency specifically influence investor confidence?

Shari Mager:

Yeah, I mean, you're speaking to my heart and soul. My background is in the accounting and reporting. And so those fundamentals and that consistency that a company needs to have are so important. And really it's about what message are you delivering to the investors and how do you back that up with data, and is that something you can consistently produce time and time again? And so I think being able to articulate the financials and really share consistently what those metrics are is going to really influence an investor's confidence, I think in the organization.

Lance Glinn:

Look, you could be the most charismatic person in the world, but if you don't have the data to back up what you're preaching, then you're not going to go very far, at least in the IPO market.

Shari Mager:

Absolutely.

Lance Glinn:

So during the due diligence phase of everything, how do robust financial systems and strict regulatory compliance not only help a company avoid those unfortunate, sometimes unexpected pitfalls, but also establish its credibility and scalability in the eyes of underwriters and potential investors?

Shari Mager:

Yeah. Well, certainly a lot has to do with the future projections of where the business is going. And underlying all of that is data. And so if a company doesn't have confidence in their data and controls around where that data comes from and how it's pulled together, that's going to create some uncertainty with investors that they can't either answer questions or show a track record that aligns with projections. So I think that's extremely important as certainly as they think about rigor and transparency.

Lance Glinn:

And to that point, as you're going through the IPO process, there's that or those extra levels of scrutiny that are now put on you, that extra sense of pressure that's now on your plate going public.

Lance Glinn:

How do you help and what do you recommend to companies when facing that increased scrutiny, when they're feeling this outside noise of having to go public that they may not have felt when they were not thinking about the IPO process?

Shari Mager:

Yeah, that's a great point, and it's certainly something that ... So one thing we recommend to our clients is to act public before they're public. And so they sort of work that muscle memory of reporting results and hitting deadlines and frankly dealing with bad news. Because it's one thing to deal with bad news in the private, not in the limelight, but as soon as you're public ...

Lance Glinn:

It's a whole new arena.

Shari Mager:

It's not always going to be good news, right? And so they have to be able to weather that and really acknowledge maybe what drove to the bad news and what they're doing to address it and to improve going forward.

Lance Glinn:

So how accurate or how do accurate and accessible financial data enhance the internal decision-making and external performance analysis, particularly as a company navigates the IPO process and faces again, that heightened scrutiny leading up to its offering?

Shari Mager:

Yeah. So I think having strong data arms the executives of the company to really articulate what the future potential is, what led to historical results, and really explain potentially anomalies, whether they're positive or negative. And so I think being comfortable with the data, and today, there's so much data and it's very easy to have many sources of truth. And so it's really being clear on what is that single source of truth and does it feed all systems so that revenue data is supported by the same systems that you're articulating, maybe people dynamics or customer dynamics. And so I think that is extremely important, I think, to build credibility of the management team, especially when they're speaking to investors.

Lance Glinn:

So let's focus on that milestone day, right? A company goes public. They ring the bell that's right above us here at the New York Stock Exchange. They celebrate their listing. Shortly after the company faces that first earnings call, that pivotal moment. Why is the initial call so crucial to short-term and long-term company success? And how does it serve as sort of a litmus test for the company and whether it's delivering its promises that it made, say, during the roadshow?

Shari Mager:

Yeah. Well, and you hit on it, right? It's being able to deliver on the promises. So that first quarterly reporting, the first earnings call is really the first chance for the company to articulate how they're meeting the promises that they made in the IPO. And so it is so important to hit that because it's part of that journey of building that credibility with investors and instilling confidence in them, which I think is so important to the long-term journey with those investors. And it's the first step in a long process. And you mentioned there's short-term focus, but also long-term focus, and it's really important for companies to be able to balance both of those.

Lance Glinn:

And still staying on that first earnings call, what role does it play in sort of shaping market perception and building that investor confidence? And how do you or how do the best prepared companies ensure that they get it right? Because not all companies are going to get it right, unfortunately, it'd be great if they all did, but how do the best prepared companies make sure that when that first earnings call comes, they hit it out of the park?

Shari Mager:

Absolutely. Well, I think what I've seen the best companies do is take a lot of investor meetings before the IPO. They're really testing their ability to deliver a message, get feedback in real time, and tweak the message to understand what resonates. So if a company has done that along the way prior to the IPO, they're better positioned to be able to hit that first earnings call out of the gate with confidence and with certainty.

Shari Mager:

And I also think that that just sets them up for really building that long-term relationship with investors and establishing their credibility. It's extremely important to the process.

Lance Glinn:

Absolutely. So as we begin to wrap up our conversation, as you look ahead now, what excites you most about the future of the IPO landscapes? And we talked earlier about being proactive, starting before the window opens. Well, what steps should companies take so that they are able to stay ahead of emerging trends and be prepared if they decide one day they want IPO for that process?

Shari Mager:

Yeah. Well, certainly what excites me is the fact that we are seeing these IPO windows open up. We know there's a big backlog. There's a lot of demand both with the clients that we're working with, as well as others that are in the pipeline. So that I know it's coming. And so that excites me 'cause it's such an important time in a company's lifecycle, and it's great to be a part of it.

Shari Mager:

And then I think as far as getting ready, take advantage of the window where maybe things are a little choppy and you've got time to get ready. And so some of the things that companies should be focused on is around those financials and those fundamentals, making sure they can get through their audits and their reviews. They've anticipated what questions they may get from the SEC, and they've got prepared positions around those. It's thinking about the governance and having the right policies and procedures in place, and really having built the infrastructure around the people, the systems, their processes. It is not an easy journey, and it is not a short journey. But if they're doing these things upfront and really taking the time to put it into practice before they're on the stage, I think that sets them up for better success.

Lance Glinn:

So Shari, we started our conversation talking about how you were recently here for KPMG's annual IPO bootcamp here at the NYSE, and you talked a little bit about the messages or the takeaways from the event. But for our listeners out there, those executives who weren't able to attend or didn't know about the event, and they're now hearing this podcast and they're saying, "Hey, what's KPMG's IPO bootcamp," what's your message to them about what they can gain from attending the event, what they can gain from learning about the event, and how KPMG can help them through the IPO process if this is something that they one day want to achieve?

Shari Mager:

Yeah, absolutely. So the things we typically cover in the IPO bootcamp is we always like to set the stage with a market update because it changes very quickly. And so I think that's a really important step in setting the foundations.

Shari Mager:

And then really we focus on, I would say, three key parts of the IPO process. And it's that IPO readiness journey. So leading up to actually embarking on the process. It's that actual process itself from the organizational kickoff meeting to pricing and trading. And then it's those post-IPO considerations, 'cause that's just the beginning of the journey, and there's still more for companies to deal with once they're public.

Shari Mager:

So we go through some of the key considerations in each of those phases. And I think it's just enough to scratch the surface and give folks some ideas of things that maybe they didn't know or things that they should be thinking about early.

Shari Mager:

And it's always nice to hear stories from companies who've been through the process recently and have their war stories and their lessons learned and the successful moments as well. And so companies that attend the bootcamps get all of that, as well as an opportunity to network with peers, meet professionals who operate in this space. So we partner with investment bankers, with attorneys, with the exchange so we can bring a variety of perspectives to the process and both educate the people in the room, as well as give them an opportunity to ask their questions and get to meet some people that maybe they haven't met before and might actually get to interact with.

Lance Glinn:

Absolutely. Well, I'm so glad that this annual KPMG IPO bootcamp was such a success. And Shari, thanks so much for joining us Inside the ICE House.

Shari Mager:

Thank you very much. I appreciate it.

Speaker 1:

That's our conversation for this week. Remember to rate, review, and subscribe wherever you listen, and follow us on X at icehousepodcast. From the New York Stock Exchange, we'll talk to you again next week Inside the ICE House.

Speaker 1:

Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties, expressed or implied as to the accuracy or completeness of the information, and do not sponsor, approve or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security, or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of length or clarity.