• Revenue Growth: 13% year-over-year increase.
• Marketplace Revenue: Increased by 46% to $37 million.
• Total Revenue Less Transaction-Based Expenses: $18.3 million in Q4 2024.
• Transaction Volume: Decreased to $299 million from $338 million in the prior quarter.
• Net Take Rate: Increased to 2.8% from 2.6% in the prior quarter.
• Custodial Administration Fees: $10 million in Q4 2024.
• Custodial Cash Balances: $483 million at the end of Q4 2024.
• Operating Expenses: Decreased to $37 million from $40 million in the prior quarter.
• Net Loss: $16 million in Q4 2024, down from $18.8 million in Q3 2024.
• Adjusted EBITDA Loss: $10.9 million in Q4 2024.
• Cash, Cash Equivalents, and Restricted Cash: $106.3 million at the end of Q4 2024.
• Full Year Revenue Less Transaction-Based Expenses: $78.7 million in 2024.
• Full Year Net Loss: $67.8 million in 2024, an improvement from $91.5 million in 2023.
• Full Year Adjusted EBITDA Loss: $43.7 million in 2024.
• Total Employee Count: 300 as of December 31, 2024.

• Warning! GuruFocus has detected 3 Warning Signs with FRGE.

Release Date: March 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Forge Global Holdings Inc (NYSE:FRGE) reported a 13% year-over-year revenue growth for 2024, with a significant 46% increase in marketplace revenue.
• The Forge Private Market Index outpaced major indices like Nasdaq and the S&P 500, with a notable 33% increase over the prior three months.
• The company has a strong IPO pipeline, with 13 IPO filings of planned raises of $100 million or more in January, the highest monthly total in three years.
• Forge Global Holdings Inc (NYSE:FRGE) achieved $11.9 million in cost savings, surpassing their original goal, and continues to focus on cost management.
• The company is making progress towards a fully automated trading experience and enhancing data transparency, which are expected to drive market adoption and liquidity.

Negative Points

• Q4 marketplace revenues came in at the bottom end of expectations, affected by the uncertainty surrounding the US presidential election.
• Custodial cash administration fees were impacted by numerous federal rate cuts, leading to a decline in revenues in this area.
• The company's net loss for Q4 was $16 million, although this was an improvement from the previous quarter.
• Forge Global Holdings Inc (NYSE:FRGE) experienced a decrease in transaction volume in Q4, with a drop from $338 million to $299 million.
• The average net take rate decreased from 3.3% in 2023 to 2.8% in 2024, indicating a decline in profitability per transaction.

Q & A Highlights

Q: Can you elaborate on the fully automated trading capabilities and the demand for it? A: Kelly Rodriques, CEO: The fully automated trading experience is a key part of our Next Generation Platform vision. We've invested over two years in building the foundational platform to support market-facing capabilities. This automation will serve all market segments, addressing the need for standardization and automation in private shares trading. More details will be announced throughout the year.

Q: What are your thoughts on democratizing access to private markets through blockchain, as suggested by Robinhood's CEO? A: Kelly Rodriques, CEO: We share the vision of using blockchain to evolve market infrastructure, not just for private markets but broadly. Our platform is designed to integrate with modern infrastructures, allowing distribution to participants in private markets, aligning with our future strategy.

Q: How are SPVs evolving, and what impact do they have on liquidity in private markets? A: Kelly Rodriques, CEO: SPVs have been a significant part of our strategy since 2018. We are expanding SPVs beyond single names to multi-name structures, which will enhance liquidity and access. Currently, we have about $1 billion in AUM in SPVs, up from $300-400 million a few years ago, and we aim to grow this further.

Q: What is your outlook for 2025, considering the current market volatility and IPO expectations? A: Kelly Rodriques, CEO: We anticipate steady momentum in 2025, with improved market conditions but not a rapid recovery. While macroeconomic factors like tariffs are being monitored, private market valuations and capital raising remain strong. We expect a year of marked improvement, with Q1 marketplace revenue projected to exceed our best quarter in 2024.

Q: How do you expect take rates to be impacted by client mix and trade types in 2025? A: James Nevin, CFO: In 2024, larger trade sizes and increased interest in specific sectors affected take rates, which were 2.8% compared to 3.3% in 2023. We expect increased volumes from diverse liquidity sources to outweigh any declines in take rates, driven by larger blocks and SPV activity.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.