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Forge Global Holdings, Inc. (FRGE)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered second consecutive record revenue as a public company: total revenues less transaction-based expenses rose to $27.6M (+10% QoQ) and adjusted EBITDA loss improved to $5.4M (lowest since going public). EPS was $(1.34) and net loss was $16.6M .
  • Versus consensus: revenue beat ($27.74M actual vs $21.26M consensus*) while EPS missed ($(1.34) reported vs $(1.17) consensus*). The revenue strength was driven by higher trading volume and improved mix; warrant liability fair value changes weighed on GAAP EPS .
  • Guidance tone: management expects H2 organic revenue and adjusted EBITDA YoY growth rates “to continue inline” with H1, and flagged normal seasonality with Q3 revenue typically lower than Q2 and Q4 .
  • Potential stock-reaction catalysts: Next Generation Marketplace launch, accelerating volume (+9% QoQ to $756.1M) and net take rate uptick (2.3%→2.4%), plus Accuidity acquisition to expand investment solutions .

What Went Well and What Went Wrong

What Went Well

  • Second consecutive record revenue quarter; adjusted EBITDA loss improved to $5.4M, “narrowest quarterly EBITDA loss since going public” .
  • Volume and mix: trading volume rose 9% QoQ to $756.1M; fewer mega blocks but more institutional/direct trading improved net take rate to 2.4% from 2.3% QoQ .
  • Strategic progress: “launched our new marketplace experience on our Next Generation Platform,” with partnerships (ICE, Fortune) and Accuidity acquisition to broaden wealth/asset-management offerings .
    • Quote: “Q2 marked a milestone quarter…second consecutive record quarter in terms of revenue, and our narrowest quarterly EBITDA loss since going public” — CEO Kelly Rodriques .

What Went Wrong

  • GAAP EPS declined to $(1.34) despite revenue strength, reflecting the impact of the increased fair value of warrants amid share-price moves; net loss rose slightly QoQ to $16.6M .
  • Custody-related revenue softness: custodial administration fees less transaction-based expenses fell 2% QoQ to $9.09M; custodial client cash declined 4% QoQ to $440M, pressuring cash administration fees .
  • Seasonality: management reiterated Q3 is “generally lower than Q2 and Q4,” tempering near-term revenue cadence despite H2 growth framework .

Financial Results

Summary vs Prior Periods and Estimates

MetricQ2 2024Q1 2025Q2 2025
Total Revenues ($USD)$22.28M $25.30M $27.74M
Total Revenues less Transaction-based Expenses ($USD)$22.03M $25.10M $27.58M
Operating Loss ($USD)$(17.65)M $(16.47)M $(12.83)M
Net Loss ($USD)$(14.04)M $(16.20)M $(16.58)M
Adjusted EBITDA ($USD)$(7.92)M $(8.91)M $(5.43)M
Diluted EPS ($)$(1.13) $(1.29) $(1.34)

Margins (calculated from reported figures)

MarginQ2 2024Q1 2025Q2 2025
Adjusted EBITDA Margin %-35.9% (=-7.92/22.03) -35.5% (=-8.91/25.10) -19.7% (=-5.43/27.58)
Operating Margin %-80.1% (=-17.65/22.03) -65.6% (=-16.47/25.10) -46.5% (=-12.83/27.58)
Net Income Margin %-63.7% (=-14.04/22.03) -64.5% (=-16.20/25.10) -60.1% (=-16.58/27.58)

Segment Breakdown (Revenues less transaction-based expenses)

SegmentQ4 2024Q1 2025Q2 2025
Marketplace ($USD)$8.43M $15.83M $18.49M
Custodial Administration ($USD)$9.84M $9.27M $9.09M
Total ($USD)$18.27M $25.10M $27.58M

KPIs

KPIQ4 2024Q1 2025Q2 2025
Trades (Period)646 963 927
Trading Volume ($USD)$298.5M $692.4M $756.1M
Net Take Rate (Period)2.8% 2.3% 2.4%
Total Custodial Accounts2,376,099 2,508,443 2,598,846
Assets Under Custody ($USD)$16.90B $17.64B $18.13B
Custodial Client Cash ($USD)$482.9M $459.7M $440.3M

Estimates Comparison (Wall Street consensus — S&P Global)

MetricConsensusActual
Revenue ($USD)$21.26M*$27.74M
Primary EPS ($)$(1.17)*$(1.34)

Values retrieved from S&P Global.*

Highlights: Revenue was a significant beat; EPS missed. Management cited higher revenue net of transaction costs and lower OpEx QoQ, but warrant fair value changes (share-price-driven) pressured GAAP EPS .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Organic Revenue Growth (YoY)H2 2025Not provided“Continue inline with H1 YoY growth rates” Maintained trajectory
Adjusted EBITDA Growth (YoY)H2 2025Not provided“Continue inline with H1 YoY growth rates” Maintained trajectory
Quarterly Revenue SeasonalityQ3 2025Not providedQ3 “generally lower than Q2 and Q4” Maintained/affirmed
Weighted Avg Basic SharesQ3 2025Not provided12,478,622 New detail
Adjusted EBITDA Breakeven TargetFY 2026Not provided“On track to reach adjusted EBITDA breakeven in 2026” Maintained long-term target

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Next Generation PlatformTech improvements in marketplace; strong pipeline Marketplace launched with automated negotiation; API-first; live order book, pricing insights Acceleration
Data PartnershipsICE and Yahoo Finance partnerships announced in Q1 Added Fortune partnership for private market rankings Expanding footprint
Volume/MixQ1 included large institutional block trades Q2 more evenly distributed size; higher institutional/direct trading; net take rate improved Healthier mix, better take rate
Asset Management/WealthLOI to acquire Accuidity (Q1) Accuidity acquisition closed; registered fund planned; EPS accretive aim Strategic build-out
Regulatory/AccessBroader access narratives forming (Q1) Bipartisan momentum; accredited investor eligibility, potential 401(k) access discussed Constructive policy backdrop
Custody EconomicsCustody fees down in Q4; AUC growing Custodial fees flat-to-down QoQ; client cash down; optimization program improved returns Mixed; rate-sensitive
TokenizationNot prominent previousEvaluating partnership-led approach; issuer support key; watching timing Early-stage exploration

Management Commentary

  • “Q2 marked a milestone quarter…second consecutive record quarter in terms of revenue, and our narrowest quarterly EBITDA loss since going public.” — Kelly Rodriques, CEO .
  • “Revenue outpaced the prior quarter…Trading volume increased 9%…net take rates improved from 2.3% to 2.4%.” — James Nevin, CFO .
  • “We remain on track to reach adjusted EBITDA breakeven in 2026,” supported by marketplace scalability, Accuidity integration, and offshoring efficiencies .
  • “We expect second half year-over-year organic revenue and Adjusted EBITDA growth rates to continue inline…Revenues in Q3 are generally lower than Q2 and Q4 driven by seasonality.” — James Nevin, CFO .
  • “We’ve established Forge Price as the industry’s most trusted pricing standard…partnerships with Yahoo Finance, ICE Data Services, and Fortune Media.” — Kelly Rodriques, CEO .

Q&A Highlights

  • Volume drivers/mix: Q2 had more evenly distributed trade sizes and higher institutional/direct trading, improving take rates; Q3 seasonality expected (July/August quieter) .
  • Tokenization: Management favors a partnership-led model ensuring tight linkage to underlying securities and issuer support; timing still to be determined .
  • Registered fund/401(k) access: Plan to launch first registered fund leveraging Accuidity; exploring distribution to retirement channels as policy evolves .
  • Breakeven timing: No half-specific timing; confidence in 2026 breakeven, with OpEx control, platform scalability, and Accuidity contribution .
  • Marketplace features: Automated negotiation launched; rolling releases ahead; aim to support multiple trade structures (funds/directs) within platform .

Estimates Context

  • Consensus (S&P Global): revenue $21.26M*, EPS $(1.17)*; Actual: revenue $27.74M and EPS $(1.34). Result: bold revenue beat and EPS miss, driven by volume/mix and warrant fair value changes affecting GAAP EPS .
  • Revisions outlook: With H2 growth guidance “inline” and Q3 seasonality, some near-term revenue estimates may rise for Q4 while EPS estimates could reflect warrant liability volatility and acquisition-related costs until recurring revenue mix increases .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Forge is executing: two consecutive record revenue quarters, improved adjusted EBITDA, and healthier take rates — a narrative supportive for medium-term multiple expansion once GAAP noise (warrants) stabilizes .
  • Bold revenue beat vs consensus; watch for seasonal Q3 dip and potential re-acceleration into Q4 per historical cadence .
  • Platform catalysts: Next Gen Marketplace automation and data partnerships (ICE, Fortune, Yahoo Finance) expand reach and could deepen order flow/recurring data economics .
  • Asset management optionality: Accuidity opens fund-based access (including potential registered/interval vehicles), adding diversified revenue streams and targeting EPS accretion over time .
  • Custody sensitivities: custodial client cash declined; cash administration fees track rates and balances — monitor rates and client cash trajectory for near-term custody revenue .
  • Liquidity and capital allocation: combined liquidity $81.8M; share buybacks (~315K shares at $13.15) signal confidence, while warrant liability volatility can swing GAAP EPS quarter-to-quarter .
  • Medium-term thesis: operational scalability, asset-management expansion, and regulatory tailwinds (accredited investor/401(k) access) underpin the 2026 adjusted EBITDA breakeven path .