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; marketplace revenue was $8.6M, up 21% year-over-year despite seasonal and election-related slowdowns.

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

• Launched Forge Price, a new daily pricing model for ~250 pre-IPO companies, and introduced the Private Market Magnificent 7.

• Announced actions to accelerate path to profitability, including a reduction in force and offshore engineering investment, targeting break-even Adjusted EBITDA by 2026.

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

Financial highlights

• Total revenue less transaction-based expenses: $19.1M in Q3 2024 (up from $18.4M year-ago, down from $22.0M in Q2).

• Marketplace revenue: $8.6M in Q3 2024 (up 21% year-over-year, down from $11.4M in Q2); trading volume was $338.1M, up 44% year-over-year.

• Net loss: $18.3M–$18.8M in Q3 2024; Adjusted EBITDA loss: $11.4M (vs. $7.9M in Q2), impacted by one-time severance expenses.

• Cash, cash equivalents, and restricted cash: $114.5M–$115.6M at quarter end.

• Net take rate: 2.6% in Q3 2024, down from 2.7% in Q2 and 3.0%–3.4% year-over-year.

Outlook and guidance

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

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

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