Forge(US:FRGE)2025-05-07 20:23Part I - Financial Information Condensed Consolidated Financial Statements (Unaudited) Forge Global Holdings, Inc. reported Q1 2025 revenues of $25.3 million, a narrowed net loss of $16.2 million, and a 1-for-15 reverse stock split effective April 14, 2025 Condensed Consolidated Balance Sheet Data (Unaudited) | (In thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $107,398 | $119,167 | | Total assets | $249,460 | $263,506 | | Total current liabilities | $21,424 | $25,144 | | Total liabilities | $32,675 | $36,764 | | Total stockholders' equity | $216,785 | $226,742 | Condensed Consolidated Statements of Operations (Unaudited) | (In thousands, except per share data) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total revenues | $25,296 | $19,242 | | Operating loss | $(16,469) | $(25,010) | | Net loss | $(16,198) | $(18,994) | | Net loss per share, basic and diluted | $(1.29) | $(1.55) | Condensed Consolidated Statements of Cash Flows (Unaudited) | (In thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(12,833) | $(12,375) | | Net cash used in investing activities | $(21,529) | $(400) | | Net cash used in financing activities | $(653) | $(2,076) | | Net decrease in cash and cash equivalents | $(34,657) | $(15,104) | - Effective April 14, 2025, the company executed a 1-for-15 reverse stock split, with all share and per-share amounts in the financial statements retroactively adjusted to reflect this change39114 Management's Discussion and Analysis of Financial Condition and Results of Operations Total revenues less transaction-based expenses increased 31% to $25.1 million in Q1 2025, driven by marketplace growth, while operating loss narrowed to $16.5 million and Adjusted EBITDA improved to a loss of $8.9 million Marketplace Solutions Key Metrics - Q1 2025 | Metric | Q1 2025 | Q4 2024 | Q1 2024 | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Trades | 963 | 646 | 605 | +59% | +49% | | Volume (in thousands) | $692,391 | $298,539 | $262,538 | +164% | +132% | | Net Take Rate | 2.3% | 2.8% | 3.2% | -0.9% | -0.5% | Custody Solution Key Metrics - Q1 2025 | Metric | Q1 2025 | Q4 2024 | Q1 2024 | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Custodial Accounts | 2,508,443 | 2,376,099 | 2,152,777 | +17% | +6% | | Assets Under Custody (in thousands) | $17,635,034 | $16,897,318 | $16,454,323 | +7% | +4% | | Custodial Client Cash (in thousands) | $459,685 | $482,946 | $481,000 | -4% | -5% | Adjusted EBITDA Reconciliation (Non-GAAP) | (in thousands) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net loss attributable to Forge Global Holdings, Inc. | $(16,172) | $(15,643) | $(18,624) | | Adjusted EBITDA | $(8,910) | $(10,881) | $(13,465) | - The company's board approved a $10 million share repurchase program in March 2025, with approximately $6.0 million remaining available under the program as of May 6, 202597186 - The company believes its existing liquidity, with $70.5 million in cash and cash equivalents and $21.5 million in investments as of March 31, 2025, will be sufficient to meet its operating and capital needs for the next twelve months181182 Results of Operations Total revenues less transaction-based expenses increased 31% to $25.1 million, driven by an 88% rise in Marketplace revenue, while operating expenses decreased 6%, narrowing the operating loss to $16.5 million - Marketplace revenue increased by $7.5 million (88%) YoY, driven by a 164% increase in trading volume, attributed to improved market dynamics and larger average trade sizes163 - Custodial administration fees decreased by $1.4 million (13%) YoY, primarily due to lower cash administration fees resulting from lower interest rates and reduced custodial client cash balances164 - Compensation and benefits expense remained flat YoY, with lower salary and share-based compensation costs offset by higher incentive compensation and severance costs related to the CFO transition169170 - Other operating expenses decreased by $2.3 million (16%) YoY, largely due to non-recurring legal settlement costs of $2.8 million in the prior-year quarter174 Liquidity and Capital Resources The company's liquidity, totaling $70.5 million in cash and $21.5 million in investments, is deemed sufficient for the next 12 months, despite $12.8 million net cash used in operations and a $10 million share repurchase program - Cash used in operating activities was $12.8 million, driven by the net loss of $16.2 million, adjusted for non-cash items, and outflows for annual incentive compensation payments188 - Cash used in investing activities was $21.5 million, primarily for the purchase of short-term investments with excess corporate cash190 - Subsequent to the quarter end, as of May 6, 2025, the company had repurchased 314,701 shares for approximately $4.0 million under its share repurchase program186 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the registrant is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company defined by Rule 12b-2 of the Exchange Act, the registrant is not required to provide quantitative and qualitative disclosures about market risk199 Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report200 - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting202 Part II - Other Information Legal Proceedings The company is subject to ordinary course legal claims, with no accruals for loss contingencies recorded as of March 31, 2025 - The company is subject to claims and lawsuits in the ordinary course of business, with no accrual for loss contingencies recorded as of March 31, 2025, or December 31, 202480 Risk Factors No material changes have occurred from the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes from the risk factors described in the company's Annual Report have occurred207 Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds during the period - None208 Other Information CEO Kelly Rodriques terminated his Rule 10b5-1 trading plan on January 21, 2025, after 20,000 post-split shares were sold under the plan - On January 21, 2025, CEO Kelly Rodriques terminated his Rule 10b5-1 trading plan, adopted on May 17, 2024, after 20,000 shares (post-split) had been sold under the plan211 Exhibits The report lists filed or incorporated exhibits, including CEO and CFO certifications and Inline XBRL documents - Exhibits filed with the report include the CEO and CFO certifications pursuant to Sarbanes-Oxley Sections 302 and 906, and Inline XBRL documents212214