8-K: Forge Global Reports 13% Revenue Growth for Fiscal Year 2024, Authorizes $10 Million Share Repurchase Program

Forge Global Holdings, Inc. announced its Q4 and full-year 2024 financial results, highlighting a 13% year-over-year increase in total revenue less transaction-based expenses and the authorization of a $10 million share repurchase program.

Summary

• Forge Global Holdings, Inc. reported its financial results for the quarter and year ended December 31, 2024.
• Total revenue less transaction-based expenses for 2024 was $78.7 million, a 13% increase year-over-year.
• Marketplace revenues less transaction-based expenses grew by 46% year-over-year to $37.0 million.
• Total trading volume increased by 73% year-over-year to $1.3 billion.
• Custodial administration fees less transaction-based expenses decreased by 5% year-over-year to $41.7 million.
• The board of directors authorized a share repurchase program of up to $10 million of the company's common stock.
• For Q4 2024, total revenue less transaction-based expenses was $18.3 million, compared to $19.1 million in the previous quarter.
• The operating loss for Q4 2024 was $18.7 million, compared to $20.9 million in the previous quarter.
• Net loss for Q4 2024 was $16.0 million, compared to $18.8 million in the previous quarter.
• Adjusted EBITDA loss for Q4 2024 was $10.9 million, compared to $11.4 million in the previous quarter.
• Net cash used in operating activities for Q4 2024 was $7.9 million, compared to $5.8 million in the previous quarter.
• The ending cash balance as of December 31, 2024, was $105.1 million.
• The basic weighted-average number of shares used to compute net loss per share for Q4 2024 was 186 million shares.
• The fully diluted outstanding share count as of December 31, 2024, was 201 million shares.
• The company estimates 187 million weighted average basic shares outstanding for the quarter ending March 31, 2025.
• Trading volume for Q4 2024 decreased by 12% quarter-over-quarter, from $338.1 million to $298.5 million.
• The net take rate for Q4 2024 increased from 2.6% to 2.8% quarter-over-quarter.
• Total marketplace revenues less transaction-based expenses for Q4 2024 decreased by 2% quarter-over-quarter, from $8.6 million to $8.4 million.
• Total custodial accounts increased by 4% quarter-over-quarter to 2.38 million.
• Total assets under custody increased by 2% quarter-over-quarter to $16.9 billion.
• Total custodial administration fee revenues less transaction-based expenses decreased by 6% quarter-over-quarter to $9.8 million.
• Forge Trust Custodial Cash totaled $483 million, up 3% quarter-over-quarter and down 4% year-over-year.
• The total number of companies with Indications of Interest (IOIs) was 535, up 4% quarter-over-quarter and up 10% year-over-year.
• Forge finished Q4 2024 with a total headcount of 300, down 9% year-over-year from 331.
• The operating loss for the full year 2024 decreased by 10% year-over-year to $82.3 million.
• Net loss for the full year 2024 decreased by 26% year-over-year to $67.8 million.
• Adjusted EBITDA loss for the full year 2024 decreased by 10% year-over-year to $43.7 million.
• Net cash used in operating activities for the full year 2024 was $40.5 million, a 2% improvement year-over-year.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the revenue growth and share repurchase program, but tempered by the ongoing losses and some quarter-over-quarter declines in certain metrics.

Positives

• Total revenue less transaction-based expenses increased by 13% year-over-year to $78.7 million for 2024.
• Marketplace revenues less transaction-based expenses increased by 46% year-over-year to $37.0 million.
• Total trading volume increased by 73% year-over-year to $1.3 billion.
• The board of directors authorized a share repurchase program of up to $10 million.
• The number of custodial accounts increased by 14% year-over-year to 2.38 million.
• Assets under custody grew by 8% year-over-year to $16.9 billion.
• The operating loss for the full year 2024 decreased by 10% year-over-year to $82.3 million.
• Net loss for the full year 2024 decreased by 26% year-over-year to $67.8 million.
• Adjusted EBITDA loss for the full year 2024 decreased by 10% year-over-year to $43.7 million.
• Net cash used in operating activities for the full year 2024 was $40.5 million, a 2% improvement year-over-year.
• Forge launched Forge Price, a proprietary indicative price calculated daily for approximately 200 pre-IPO companies.
• Forge released Forge Pro, a web application geared towards institutional clients that combines data visualization and visibility of detailed trade data.

Negatives

• Custodial administration fees less transaction-based expenses decreased by 5% year-over-year to $41.7 million.
• Trading volume for Q4 2024 decreased by 12% quarter-over-quarter, from $338.1 million to $298.5 million.
• Total marketplace revenues less transaction-based expenses for Q4 2024 decreased by 2% quarter-over-quarter, from $8.6 million to $8.4 million.
• Total custodial administration fee revenues less transaction-based expenses decreased by 6% quarter-over-quarter to $9.8 million.
• Forge Trust Custodial Cash decreased 4% year-over-year from $505 million.
• Forge finished Q4 2024 with a total headcount of 300, down 9% year-over-year from 331.
• Net cash used in operating activities for Q4 2024 was $7.9 million, compared to $5.8 million in the previous quarter.

Risks

• The forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from current expectations.
• There may be additional risks that Forge presently does not know of or that it currently believes are immaterial that could also cause actual results to differ materially from those contained in the forward-looking statements.
• The company specifically disclaims any obligation to update these forward-looking statements.

Future Outlook

The company anticipates that subsequent events and developments will cause its assessments to change, but specifically disclaims any obligation to update forward-looking statements.

Management Comments

• We closed out 2024 with 13% year-over-year growth and a strong pipeline, said Forge CEO Kelly Rodriques.
• Our year-over-year revenue improvement included a 46% increase in marketplace revenues, which grew to $37.0 million.
• As Q4 came in near-even to Q3, I'm happy to report we've observed improving over-all market dynamics and growing deal activity, aided by the technology improvements we've delivered to support our leading marketplace.

Industry Context

Forge Global operates in the private securities marketplace, which is experiencing increased interest as more companies stay private longer. The launch of Forge Price and the Private Market Magnificent 7 index are aimed at providing more transparency and data to this market, which is traditionally less transparent than public markets.

Comparison to Industry Standards

• It is difficult to compare Forge Global directly to publicly traded companies due to its unique focus on the private securities market.
• However, companies like Nasdaq or Intercontinental Exchange (ICE) operate exchanges for public securities and generate revenue from trading, data services, and technology solutions.
• Forge's growth in trading volume and marketplace revenue can be compared to the growth rates of these larger exchange operators, keeping in mind the different market segments they serve.
• Additionally, Forge's custodial services can be benchmarked against traditional custodians like State Street or BNY Mellon, although Forge focuses on private assets.
• The adoption of the Forge Accuidity Private Market Index by Accuidity is a positive sign, indicating growing institutional interest in private market benchmarks, similar to how the S&P 500 is used for public equities.

Stakeholder Impact

• Shareholders may be positively impacted by the share repurchase program.
• Employees may be impacted by the headcount reduction.
• Customers may benefit from the new Forge Price and Forge Pro offerings.
• The company's financial performance impacts its suppliers and creditors.

Next Steps

• The company will continue to execute its business strategy and monitor market conditions.
• The company may make repurchases of its common stock under the authorized share repurchase program.
• The company will file its Annual Report on Form 10-K on or around March 5, 2025.

Key Dates