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Forge Global Holdings, Inc. (FRGE)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 was mixed: Total revenue less transaction-based expenses fell to $18.3M from $19.1M in Q3 (softness attributed to election uncertainty and rate cuts), but marketplace net take rate ticked up to 2.8% and trading volume was $298.5M (+19% YoY) .
  • FY 2024 improved materially: revenue less TBE rose 13% YoY to $78.7M; marketplace revenues up 46% to $37.5M; trading volume up 73% to $1.3B; custodial admin fees down 5% to $41.8M .
  • Management authorized a $10M share repurchase and reiterated a 2026 adjusted EBITDA breakeven target; Q1 2025 marketplace revenue is expected to “meet or exceed” the best quarter of 2024 (a positive near‑term catalyst) .
  • Consensus estimates from S&P Global were unavailable at time of analysis; management noted Street averages for FY25 revenue exceed their current expectations (implies potential expectation reset) .

What Went Well and What Went Wrong

What Went Well

  • Net take rate increased sequentially to 2.8% (from 2.6%), while Q4 volume of $298.5M supported marketplace revenues despite softer activity: “Total marketplace revenue was approximately flat at $8.6M… our net take rate increased to 2.8% from 2.6%” .
  • Strategic progress and pipeline strength: “Our pipeline currently stands at its highest level in almost 3 years… we expect Q1 marketplace revenue will meet or exceed our best quarter in 2024” .
  • Cost discipline and long-term path: Achieved $11.9M total cost savings; “we remain confident in our target of reaching adjusted EBITDA breakeven in 2026” .

What Went Wrong

  • Custodial administration fees declined QoQ and YoY due to rate cuts, pressuring total revenue less TBE: $9.8M in Q4 vs $10.5M in Q3 and $10.9M in Q4 2023 .
  • Marketplace activity was “uncharacteristically soft” in Q4 (election uncertainty), with transaction volume down to $299M from $338M QoQ, driving lower total revenue less TBE ($18.3M vs $19.1M) .
  • Operating and cash metrics still negative: adjusted EBITDA loss of $10.9M; operating cash outflow rose to $7.9M from $5.8M in Q3 .

Financial Results

Quarterly comparison (oldest → newest)

MetricQ4 2023Q3 2024Q4 2024
Total Revenues less TBE ($USD Millions)$18.878 $19.143 $18.273
Marketplace Revenues less TBE ($USD Millions)$7.971 $8.640 $8.434
Custodial Admin Fees less TBE ($USD Millions)$10.907 $10.503 $9.839
Transaction Volume ($USD Millions)$250.414 $338.075 $298.539
Net Take Rate (%)3.2% 2.6% 2.8%
Operating Loss ($USD Millions)$(24.415) $(20.903) $(18.699)
Adjusted EBITDA ($USD Millions)$(13.637) $(11.414) $(10.881)
Net Loss ($USD Millions)$(26.231) $(18.844) $(15.965)
EPS (Basic, $USD)$(0.15) $(0.10) $(0.08)
Cash from Operations ($USD Millions)$(6.572) $(5.828) $(7.899)
Cash & Equivalents ($USD Millions)$144.722 $114.454 $105.140

Segment breakdown

Segment (less TBE)Q4 2023Q3 2024Q4 2024
Marketplace Revenues ($USD Millions)$7.971 $8.640 $8.434
Custodial Admin Fees ($USD Millions)$10.907 $10.503 $9.839

KPIs

KPIQ4 2023Q3 2024Q4 2024
Trades (Count)435 680 646
Transaction Volume ($USD Millions)$250.414 $338.075 $298.539
Net Take Rate (%)3.2% 2.6% 2.8%
Total Custodial Accounts (Count)2,078,868 2,281,976 2,376,099
Assets Under Custody ($USD Millions)$15,647 $16,620 $16,897
Custodial Cash ($USD Millions)$505 $470 $483
Companies with IOIs (Count)485 516 535

Full-Year comparison

MetricFY 2023FY 2024
Total Revenues less TBE ($USD Millions)$69.390 $78.655
Marketplace Revenues ($USD Millions)$25.790 $37.540
Custodial Admin Fees ($USD Millions)$44.031 $41.789
Adjusted EBITDA ($USD Millions)$(48.799) $(43.677)
Net Loss ($USD Millions)$(91.549) $(67.843)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Marketplace RevenueQ1 2025None disclosed“Meet or exceed our best quarter in 2024” Raised (directional)
Custodial Admin FeesFY 2025None disclosed“Expect to generate lower cash administration fees” (rate cuts impact) Lowered
Adjusted EBITDA BreakevenFY 2026Breakeven target in 2026 (Q2 2024) Maintained: “remain confident… breakeven in 2026” Maintained
Share Repurchase AuthorizationN/ANone disclosed$10M buyback authorized New
EPS Modeling SharesQ1 2025None disclosed187M weighted average basic shares (loss position) New modeling input

Earnings Call Themes & Trends

TopicQ2 2024 (Prior-2)Q3 2024 (Prior-1)Q4 2024 (Current)Trend
Next-Gen Platform & AutomationInvestment in platform; cost actions to accelerate path; breakeven in 2026 Forge Pro adoption building; data-enabled revenue; institutional focus Working toward “fully automated trading experience” in 2025; Forge Pro serving 400 clients Strengthening
SPVs & Financial ProductsIndex adoption (Accuidity Megacorn) Data/indices strategy; institutional engagement SPVs AUM grew to ~$1B; move to multi-name baskets; Accuidity ’40 Act fund powered by Forge Index Expanding
IPO Pipeline & Private Market SentimentCorrelation with IPOs/funding improving; narrowing bid-ask Post-election normalization expected; improving valuations; tight bid-ask 13 large IPO filings in Jan; pipeline highest in ~3 years; expect Q1 marketplace to meet/exceed 2024 best quarter Improving
Cost Discipline & SavingsAnnounced ~$11.3M savings; headcount reduction Partial quarter savings realized; offshoring plans Total savings achieved $11.9M; maintaining cost control while investing selectively Achieved/maintained
Data Products (Forge Price/Indices)Index tracked by Accuidity; Europe launch Launch of Forge Price; Private Magnificent 7 Forge Price expanding; indices underpin new financial products; broader acceptance Broadening adoption
Regulatory & AccessData distribution push; Europe operations Lighter regulatory touch potential; bipartisan support for private market access Exploring partnerships (e.g., blockchain enablement with retail brokers); extensible APIs Constructive backdrop

Management Commentary

  • “We closed out 2024 with 13% year-over-year revenue growth… marketplace revenue grew to $37 million” .
  • “From where we sit… our pipeline currently stands at its highest level in almost 3 years… we expect marketplace revenue for Q1 will meet or exceed our best quarter in 2024” .
  • “We fully executed against the cost savings… total cost savings of $11.9 million… adjusted EBITDA loss was $10.9 million” .
  • “Given the strength of balance sheet… Board has authorized a stock buyback program of up to $10 million” .
  • “We remain confident in our target of reaching adjusted EBITDA breakeven in 2026” .
  • On product vision: “focused on making progress toward a fully automated trading experience… enabling new financial products… while diligently managing our costs” .

Q&A Highlights

  • Automated trading go-to-market: will “serve every part of the market,” built on 2.5 years of platform investment; more details through 2025 .
  • Blockchain and retail access: platform designed to integrate with modern APIs and future settlement tech; compatible with retail brokerage distribution .
  • SPVs liquidity: SPV AUM scaled from $300–$400M to ~$1B; moving to multi-name baskets; attractiveness for diversification and liquidity .
  • Outlook and take rates: larger block trades and SPV mix can lower take rates, but expected to be outweighed by volume increases; Q1 marketplace ahead of best quarter of 2024 .
  • Cost trajectory: $11.9M achieved; selective offshoring; normalize Q4 for one-offs; variable costs tied to revenue growth .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 and the prior two quarters were unavailable at time of analysis due to request limits; as a result, we cannot assess beats/misses vs Street.*
  • Management indicated “having reviewed Street averages, revenues for the full year 2025 exceed our current expectations,” suggesting estimates may be above internal plans .

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term setup improving: pipeline at a multi-year high and Q1 marketplace revenue guided to meet/exceed the best quarter of 2024; watch for volume momentum and IPO activity as catalysts .
  • Mix matters: expect continued variability in net take rates given larger blocks and SPV participation; volume growth should outweigh marginal take-rate compression over time .
  • Rate sensitivity: custodial admin fees are sensitive to interest rate levels; management expects lower cash admin fees in 2025 despite stable/slow cuts .
  • Capital allocation: $10M buyback authorization signals management’s view of undervaluation and offers potential technical support for shares .
  • Execution focus: total cost savings of $11.9M achieved; offshoring and platform automation to drive productivity ahead of 2026 EBITDA breakeven target .
  • Product/market leadership: Forge Price, indices, Forge Pro, and expanding SPV/fund structures deepen the moat and broaden access—monitor adoption metrics and data monetization .
  • Watch the narrative: if IPOs accelerate mid-2025, expect increased interest in names 3–6 months before listing; sector funding (AI) remains a tailwind for private valuations and activity .