Forge Global Holdings, Inc. Q4 FY2024 earnings call

Management Statement and Operational Highlights

• Kelly Rodriques noted 13% year-over-year revenue growth in 2024 despite a muted fourth quarter. Marketplace revenue grew 46% to $37 million in 2024. The Forge Private Market Index was up 33% over three months ending February 2025.
• James Nevin discussed fourth quarter financials: total revenue less transaction-based expenses was $18.3 million, operating expenses decreased $3 million to $37 million, and $11.9 million in cost savings achieved. Full-year 2024 revenue was $78.7 million, net loss improved to $67.8 million from $91.5 million in 2023.
• Forge made progress with technology innovations like Forge Pro, expanded custody offerings, and achieved $11.9 million in cost savings, with plans to achieve profitability in 2026.

Segment Performance

• Marketplace Revenue: Fourth quarter 2024 was approximately flat at $8.6 million (vs $8.7 million in prior quarter). Full-year 2024 marketplace revenues totaled $37.5 million, up 46% from $25.8 million in 2023. Trading volume in 2024 was up 73% to $1.3 billion.
• Custodial Administration Fees: Fourth quarter 2024 was $10 million (vs $10.5 million in prior quarter). Full-year 2024 custodial administration fees were $41.8 million, down from $44 million in 2023. Custodial cash balances totaled $483 million at end of Q4 2024, custody counts increased 4% to $2.4 million, and assets on custody increased 2% to $16.9 billion.

Guidance

• Expect Q1 2025 marketplace revenue to meet or exceed best quarter in 2024. Confident in reaching adjusted EBITDA breakeven in 2026. Board authorized a stock buyback program of up to $10 million.
• Continues to focus on fully automated trading, data transparency, and creating new financial products on the Forge Next Generation Platform while managing costs.

Risks

• Political environment, concerns about tariffs, and other economic and foreign policy matters have the potential to drag enthusiasm in the private market. The IPO floodgates haven't opened yet, and these factors could impact market activity.

Question and Answer Q: Patrick Moley asked about the go-to-market strategy for fully automated trading capabilities and thoughts on Robinhood's opinion piece on democratizing private markets through blockchain.

A: Kelly Rodriques stated the fully automated experience is part of the next-generation platform vision, and Forge's platform is extensible to integrate with modern infrastructure like Robinhood's.

Q: Devin Ryan inquired about SPV utilization and 2025 outlook.

A: Kelly Rodriques mentioned SPV AUM has grown to about $1 billion from $300-400 million a couple of years ago, and expects continued focus on SPVs. On 2025 outlook, sees steady momentum with improved environment despite macroeconomic uncertainties.

Q: Michael Cho asked about client mix movements and cost savings.

A: James Nevin explained that increasing volumes from diverse liquidity sources will outweigh small declines in net take rates, and cost control is ongoing with selective investments and offshoring, having achieved $11.9 million in cost savings.