Forge(US:FRGE)2025-11-13 21:42Financial Performance - Forge's marketplace solutions reported 875 trades in Q3 2025, a decrease of 52% from 927 trades in Q2 2025, while the volume decreased to $423.3 million from $756.1 million[142]. - Total revenues, less transaction-based expenses decreased by $6.6 million, or 24% in Q3 2025 compared to Q2 2025[173]. - Marketplace revenue decreased by $6.4 million, or 35%, driven by a 44% decrease in trading volume, despite a 40 basis point increase in net take rate[174]. - Total revenues, less transaction-based expenses increased by $13.3 million, or 22% in the nine months ended September 30, 2025 compared to the same period in 2024[175]. - Marketplace revenue increased by $17.8 million, or 62%, driven by an 82% increase in trading volume, offset by a 30 basis point decrease in net take rate[176]. - Adjusted EBITDA for Q3 2025 was $(11,556) thousand, compared to $(5,433) thousand in Q2 2025[149]. - Net loss attributable to Forge Global Holdings, Inc. for Q3 2025 was $(18,223) thousand, compared to $(12,580) thousand in Q2 2025[170]. - Adjusted EPS for Q3 2025 was $(1.40), compared to $(0.99) in Q2 2025[151]. Custodial Accounts and Assets - Total custodial accounts reached 2,703,045 as of September 30, 2025, an increase of 104,199 accounts from 2,598,846 in Q2 2025, and up 421,069 from 2,281,976 in Q3 2024[143]. - Assets under custody increased to $18.45 billion as of September 30, 2025, up $315.0 million from $18.13 billion in Q2 2025, and up $1.83 billion from $16.62 billion in Q3 2024[143]. - Custodial client cash stood at $454.4 million as of September 30, 2025, reflecting an increase of $14.1 million from $440.3 million in Q2 2025, but a decrease of $15.3 million from $469.7 million in Q3 2024[143]. Merger and Strategic Initiatives - The company entered into a merger agreement with The Charles Schwab Corporation, with each share of Forge common stock to be converted into $45.00 in cash at the effective time of the merger[129]. - The merger is expected to close in the first half of 2026, pending customary closing conditions and regulatory approvals[132]. - The company may require additional capital resources to execute strategic initiatives for growth, depending on various factors including growth rate and spending on platform development[198]. Operating Expenses - Total operating expenses for Q3 2025 were $41,521 thousand, compared to $40,419 thousand in Q2 2025[170]. - Compensation and benefits expense for Q3 2025 was $26,396 thousand, slightly down from $27,193 thousand in Q2 2025[170]. - Total compensation and benefits expense decreased by $2.1 million, or 8%, quarter-over-quarter, and by $9.3 million, or 10%, year-over-year[179][180]. - Salary expense decreased by $5.3 million, or 12%, due to cost initiatives implemented in the second half of 2024[180]. - Other operating expenses increased by $1.9 million, or 14%, quarter-over-quarter, and by $3.9 million, or 10.6%, year-over-year[183][185]. Cash Flow and Liquidity - As of September 30, 2025, cash and cash equivalents totaled $32.3 million, with investments of $28.4 million, indicating sufficient liquidity for the next twelve months[195][196]. - Cash used in operating activities for the nine months ended September 30, 2025 was $31.96 million, primarily due to a net loss of $46.8 million[203]. - Cash used in investing activities for the nine months ended September 30, 2025 was $36.96 million, primarily driven by investments of excess corporate cash balances[205]. - Cash used in financing activities was $5.0 million for the nine months ended September 30, 2025, compared to $3.4 million for the same period in 2024, primarily related to share repurchases and equity award activities[206]. Goodwill and Accounting Policies - No impairment charges were recognized during the nine months ended September 30, 2025, and September 30, 2024, indicating stable goodwill assessments[212]. - The company performed its annual goodwill impairment test on October 1, 2024, and a qualitative assessment as of September 30, 2025, concluding that fair value exceeded carrying value[212]. - There have been no material changes to critical accounting policies and estimates compared to the previous Annual Report[213]. - The company is classified as a smaller reporting company and is not required to provide extensive market risk disclosures[215]. Market Trends - The company emphasizes the importance of market trends, including supply and demand for private company shares, which are influenced by IPOs and mergers and acquisitions activity[134]. - Forge's asset management solution aims to enhance investment efficiency through single asset funds focused on private companies[126].