8-K: Forge Global Holdings Reports Record Q1 2025 Revenue Driven by Marketplace Growth

Forge Global Holdings announces its highest revenue quarter as a public company, driven by a significant increase in marketplace revenue and trading volume.

Summary

• Forge Global Holdings, Inc. reported its financial results for the quarter ended March 31, 2025.
• Total revenues less transaction-based expenses reached $25.1 million, the highest as a public company, representing a 37% increase quarter-over-quarter.
• Marketplace revenues less transaction-based expenses were $15.8 million in 1Q25, up 88% quarter-over-quarter.
• Total trading volume surged to $692.4 million in 1Q25, a 132% increase over the prior quarter.
• Custodial administration fees less transaction-based expenses totaled $9.3 million in 1Q25, down 6% quarter-over-quarter.
• Total custodial client cash stood at $459.7 million as of March 31, 2025, down 5% quarter-over-quarter.
• The company's operating loss was $16.5 million, but excluding CFO transition costs, it was $14.1 million.
• Net loss was $16.2 million.
• Adjusted EBITDA loss was $8.9 million, or $7.5 million excluding CFO transition costs.
• Net cash used in operating activities was $12.8 million, primarily due to payment of annual incentive compensation.
• The ending cash balance was $93.1 million.
• Forge estimates 12,295,210 weighted average basic shares outstanding for the quarter ending June 30, 2025.
• Forge entered into a non-binding letter of intent to acquire Accuidity Capital Management.
• Forge partnered with ICE to distribute Forge Price, a pricing dataset for private company equity.
• Forge partnered with Yahoo Finance to launch a private market hub.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the record revenue and significant growth in trading volume and marketplace revenue. However, the ongoing net losses and cash burn temper the overall outlook.

Positives

• Total revenues less transaction-based expenses increased by 37% quarter-over-quarter.
• Trading volume increased significantly by 132% quarter-over-quarter.
• Marketplace revenues less transaction-based expenses increased by 88% quarter-over-quarter.
• Forge is expanding its services through partnerships with ICE and Yahoo Finance.
• Forge is exploring growth through the potential acquisition of Accuidity Capital Management.

Negatives

• The company experienced an operating loss of $16.5 million.
• Net loss was $16.2 million.
• Net cash used in operating activities was $12.8 million.
• Custodial administration fees less transaction-based expenses decreased by 6% quarter-over-quarter.
• Total custodial client cash decreased by 5% quarter-over-quarter.

Risks

• The company is operating at a loss, with a net loss of $16.2 million for the quarter.
• The company's cash balance is decreasing, with $93.1 million in cash and cash equivalents and investments as of March 31, 2025.
• Macroeconomic volatility could impact the private market and Forge's performance.
• The acquisition of Accuidity Capital Management is subject to the execution of definitive agreements and other closing conditions.
• The company's net take rate decreased from 2.8% to 2.3% quarter-over-quarter.

Future Outlook

Forge estimates 12,295,210 weighted average basic shares outstanding for the quarter ending June 30, 2025, which will be used to calculate earnings per share in a loss position.

Management Comments

• In Q1, we achieved our best revenue quarter as a public company driven largely by an improvement in our marketplace revenue, said Kelly Rodriques, CEO of Forge.
• Revenue for the quarter totaled $25.1 million while marketplace revenue contributed $15.8 million on trading volume of nearly $700 million.
• The increase in revenue and volume was fueled by improved market dynamics that drove a diversity of new and re-engaged interest to our platform, as well as several institutional block trades that closed in the quarter.
• Were encouraged by the continued momentum of the private market even amid macro economic volatility.

Industry Context

Forge's partnerships with ICE and Yahoo Finance indicate a strategic move to increase transparency and accessibility in the private market, aligning with the broader industry trend of democratizing access to alternative investments.

Comparison to Industry Standards

• It's difficult to directly compare Forge's results to industry standards due to the unique nature of its business model, which combines marketplace infrastructure, data services, and custodial solutions for private markets.
• However, companies like Carta and EquityZen also operate in the private market space, but with different focuses and service offerings.
• Forge's trading volume of $692.4 million in Q1 2025 suggests a significant market share in the private securities trading space, but further analysis would be needed to benchmark against competitors' transaction volumes.
• The partnership with ICE to distribute Forge Price is similar to initiatives by other data providers like PitchBook and Preqin to offer pricing and valuation data for private companies.

Stakeholder Impact

• Shareholders will likely react positively to the revenue growth and increased trading volume.
• Employees may benefit from the company's growth and expansion.
• Customers will have access to more data and investment opportunities through Forge's partnerships.
• Suppliers and creditors may see increased business opportunities with Forge's growth.

Next Steps

• The company will file its Quarterly Report on Form 10-Q on or around May 7, 2025.
• Forge will continue to pursue the acquisition of Accuidity Capital Management.
• Forge will continue to develop and distribute Forge Price through its partnership with ICE.
• Forge will continue to expand access to private market investment opportunities through its partnership with Yahoo Finance.

Key Dates

Keywords

Forge Global, private market, trading volume, marketplace revenue, custodial services, financial results, Accuidity Capital Management, ICE, Yahoo Finance, reverse stock split