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Forge Global Holdings, Inc. (FRGE)·Q1 2025 Earnings Summary

Executive Summary

  • Forge delivered its best revenue quarter as a public company: Total revenues less transaction-based expenses rose to $25.1M, +30% y/y and +37% q/q, driven by marketplace volume and several institutional block trades; adjusted EBITDA loss improved to $8.9M from $10.9M q/q .
  • Versus consensus, revenue modestly beat while EPS missed: Q1 2025 revenue $25.10M vs $24.99M consensus*; EPS $(1.29) vs $(1.09)*. Mix shift to SPVs and large blocks lowered net take rate to 2.3% (from 2.8% q/q) .
  • Custody revenues softened as expected amid 2024 rate cuts: custodial administration fees fell to $9.3M (−6% q/q), with custodial client cash at $459.7M (−5% q/q) .
  • Strategic catalysts: data distribution partnerships (ICE for Forge Price™, Yahoo Finance private market hub) and a non-binding LOI to acquire Accuidity to add recurring asset-management revenue; buyback initiated (~315K shares at ~$13.15) and 1-for-15 reverse split restored NYSE compliance .

What Went Well and What Went Wrong

What Went Well

  • Record revenue quarter on strong marketplace activity: “Revenue for the quarter totaled $25.1 million while marketplace revenue contributed $15.8 million on trading volume of nearly $700 million” (CEO) .
  • Strategic data partnerships expanding distribution and funnel: Agreement with ICE to distribute Forge Price™ and Yahoo Finance hub to surface private pricing to millions of investors .
  • Improving operating leverage: Operating loss narrowed to $(16.5)M from $(18.7)M q/q; adjusted EBITDA loss improved to $(8.9)M from $(10.9)M q/q (ex-CFO transition cash costs, $(7.5)M) .

What Went Wrong

  • EPS miss and net take rate compression: Net take rate fell to 2.3% (from 2.8%) due to large SPV blocks at lower commission rates; EPS of $(1.29) missed consensus* .
  • Custody fee headwinds from rate cuts: Custodial administration fees declined to $9.3M (−6% q/q), reflecting full impact of late-2024 rate reductions on cash administration .
  • Higher opex tied to revenue generation and transition: Q1 operating expenses rose to $41.6M including ~$2.3M CFO transition costs and ~$2.9M variable expenses linked to revenue growth .

Financial Results

Core P&L vs prior year and prior quarter

MetricQ1 2024Q4 2024Q1 2025
Total Revenues, less transaction-based expenses ($USD Millions)$19.213 $18.273 $25.104
Basic EPS ($USD)$(1.55) $(0.08) $(1.29)
Operating Loss ($USD Millions)$(25.010) $(18.699) $(16.469)
Adjusted EBITDA ($USD Millions)$(13.465) $(10.881) $(8.910)

Note: Q4 2024 EPS shown as reported pre-reverse split; Q1 2025 EPS reflects the 1-for-15 reverse split adjustment .

Q1 2025 Actual vs Consensus*

MetricActual Q1 2025Consensus* Q1 2025
Total Revenues, less transaction-based expenses ($USD Millions)$25.104 $24.992*
Basic EPS ($USD)$(1.29) $(1.087)*

Values retrieved from S&P Global.*

Segment Breakdown

MetricQ1 2024Q4 2024Q1 2025
Marketplace revenue ($USD Millions)$8.520 $8.628 $15.997
Custodial administration fees ($USD Millions)$10.722 $9.961 $9.299
Transaction-based expenses ($USD Millions)$(0.029) $(0.316) $(0.192)
Total revenues, less transaction-based expenses ($USD Millions)$19.213 $18.273 $25.104

KPIs

KPIQ1 2024Q4 2024Q1 2025
Trading Volume ($USD Billions)$0.26 $0.30 $0.692
Net Take Rate (%)3.2% 2.8% 2.3%
Trades (Period) (#)605 646 963
Total Custodial Accounts (#)2,152,777 2,376,099 2,508,443
Assets Under Custody ($USD Billions)$16.5 $16.9 $17.635
Custodial Client Cash ($USD Millions)$481 $483 $460
Total number of issuers with IOIs (#)543 535 546

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Weighted Avg Basic Shares Outstanding (EPS modeling)Q2 2025N/A12,295,210 Provided
Adjusted EBITDA breakeven targetFY 2026FY 2026 target reiterated Maintained path to FY 2026 breakeven Maintained
Share Repurchase Program authorizationOngoingUp to $10M (authorized Mar 5, 2025) Repurchases commenced (~315K shares at ~$13.15 as of May 6) Execution underway
Reverse Stock SplitEffective Apr 14, 2025N/A1-for-15 completed; shares trading split-adjusted Implemented
Revenue/EBITDA/Custody guidance2025Not providedNot provided (company refrained from burn/quantitative guidance) Maintained (none)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Data distribution and pricing transparency (Forge Price™, indices)Launch of Forge Price; Private Magnificent 7 ICE agreement to distribute Forge Price™; Yahoo Finance private market hub live Accelerating distribution; broader funnel
SPVs/Block trades and liquidityGrowing SPV usage; AUM near ~$1B; diversification of liquidity sources Several large institutional block trades; net take rate impact; increased SPV volume/“stickier” revenues Expanding SPV footprint and institutional mix
Macro and tariffsQ4 noted election uncertainty; rate cuts pressured custody fees Caution on tariff uncertainty; pipeline remains strong Continued vigilance; mixed signals
IPO pipeline and investor sentimentPipeline improving; index strength; early signs of recovery Post-election momentum; interest in names near IPO (e.g., CoreWeave) Gradual improvement; episodic boosts
Cost discipline and offshoringCost savings achieved/overachieved; ongoing efficiency actions Core opex down excluding revenue-linked and CFO transition; offshoring to deliver savings later in 2025 Sustained cost focus; near-term transition costs
Listing compliance/corporate actionsBuyback authorized 1-for-15 reverse split; NYSE compliance regained Improved listing status and capital allocation

Management Commentary

  • “In Q1, we achieved our best revenue quarter as a public company – driven largely by an improvement in our marketplace revenue... and several institutional block trades that closed in the quarter.” – Kelly Rodriques, CEO .
  • “SPV trades generally close quicker, increase liquidity in the market and have the potential to produce stickier revenue for Forge as investors trade in and out of those fund vehicles... Net take rates declined from 2.8% to 2.3%... primarily attributable to the rate achieved on several large SPV block trades.” – James Nevin, CFO .
  • “We announced an agreement with Intercontinental Exchange (ICE) through which Forge Price will be distributed with ICE’s suite of data offerings... and launched a Yahoo Finance partnership to deliver private market pricing to tens of millions of monthly visitors.” – Kelly Rodriques .
  • “We remain on track to hit our kind of breakeven point in 2026... expecting cash burn in ’25 less than previous years.” – James Nevin .

Q&A Highlights

  • Accuidity acquisition rationale: Strategy to add recurring, high-margin asset-management revenue via index-tracking funds (Megacorn) and expand distribution; anticipated to be accretive to EPS if completed .
  • SPV footprint and distribution: Targeting “several hundreds” of single-name SPVs over coming years; expanding relationships across RIAs, institutions; multi-name baskets to broaden access .
  • Data business trajectory: Near-term focus on brand ubiquity (Yahoo, CNBC references) and institution-focused ICE channel; subscription revenue disclosure deferred until streams stabilize .
  • Take rates outlook: Mix-driven variability; larger blocks and SPVs imply lower rates; long-term automation expected to reduce costs of participation (company aims to lead that change) .
  • Regulation and retail access: Support for updating accredited investor rules; interim focus on products enabling broader participation prior to rule changes .
  • Cash burn and guidance: No specific cash-burn guidance; reiterated adjusted EBITDA breakeven target for 2026, with Q1 typically highest burn due to annual incentives .

Estimates Context

  • Q1 2025: Revenue beat; EPS missed vs consensus.
  • Implications: Marketplace revenue strength and volume could push Street to raise near-term revenue forecasts, while mix-driven take rate compression and custody headwinds may temper margin/EPS expectations.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Volume-led upside: Strong q/q rebound in trading volume ($0.69B, +132% q/q) and marketplace revenues ($16.0M, +85% q/q) signal improving private-market activity despite macro volatility .
  • Mix matters: Net take rate fell to 2.3% on SPV/large-block mix; expect take-rate variability quarter to quarter as institutional activity grows .
  • Custody pressure likely persists: Full impact of 2024 rate cuts lowered custodial fee revenue; custodial client cash declined 5% q/q to $460M, implying continued near-term custody headwinds .
  • Data distribution catalysts: ICE and Yahoo Finance expand top-of-funnel and institutional adoption of Forge Price™, supporting future data and trading revenue synergy .
  • Asset management optionality: Accuidity LOI aligns with recurring, higher-margin revenue streams and index-led vehicles; if completed, management expects EPS accretion .
  • Capital allocation and listing: Reverse split executed and NYSE compliance regained; buyback underway supports shareholder value amid perceived undervaluation .
  • Near-term trading stance: Momentum and pipeline are favorable, but tariff uncertainty and IPO timing remain swing factors; episodic block trades can drive quarterly volatility in revenue and take rates .

Appendix: Additional Business Highlights in Q1 2025

  • Reverse Stock Split: 1-for-15 effective April 14, 2025; shares trading split-adjusted .
  • NYSE Compliance: Minimum price compliance regained as of May 1, 2025 notice .
  • Preliminary Q1 release: guided revenue less transaction-based expenses to $24.9–$25.1M, marketplace to $15.7–$15.8M; delivered near top of range .