Forge Global (FRGE) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue less transaction-based expenses was $19.1M, up 4% year-over-year but down from $22.0M in Q2, with marketplace revenue at $8.6M, up 21% year-over-year despite seasonal slowdown and pre-election caution.

• Institutional investors remain the largest client segment, accounting for at least two-thirds of annual buy-side volume since 2021, with over 20,000 institutions registered.

• Product innovation included the launch of Forge Price, providing daily indicative pricing for 240+ private companies, and the Private Market Magnificent 7, enhancing transparency and engagement.

• Continued investment in the Forge Next Generation Platform and Forge Pro aims to improve client experience, data access, and trading efficiency.

• Net loss for Q3 2024 was $18.3M to $18.8M, reflecting ongoing investment in platform and growth initiatives.

Financial highlights

• Total revenue less transaction-based expenses: $19.1M (Q3), down from $22.0M (Q2), up from $18.4M (Q3 2023).

• Marketplace revenue: $8.6M, up 21% year-over-year, but down from $11.4M in Q2.

• Net loss attributable to Forge was $18.3M, or $(0.10) per share, compared to $18.3M, or $(0.11) per share, in Q3 2023.

• Adjusted EBITDA loss was $11.4M, including $2.6M in severance expenses and $1.2M in partial quarter cost savings.

• Cash and cash equivalents stood at $114.5M as of September 30, 2024, down from $121.6M in Q2.

Outlook and guidance

• Expect Q4 marketplace revenue to be at par or better than Q3, with optimism for improved investor confidence post-election.

• Targeting break-even Adjusted EBITDA in 2026, with ongoing cost discipline and selective investment in technology and offshore engineering.

• Management expects existing cash and cash equivalents to be sufficient for at least the next twelve months.

• Anticipate narrowing Adjusted EBITDA losses in coming quarters.

• Expect more robust primary funding and IPO markets in 2025 if macroeconomic and political conditions stabilize.