Accelerating Toward the Private Market Tipping Point Forge Fourth Quarter & 2024 Financial Results Conference Call 03.05.25 Disclaimer This presentation has been prepared for use by Forge Global Holdings, Inc. ("Forge") for informational purposes only and may not be reproduced or redistributed, in whole or in part, without the prior written consent of Forge. Forge does not make any representation or warranty as to the accuracy or completeness of the information contained in this presentation. The informatio ...

Financial Performance - Forge Global Holdings, Inc. reported revenue of $18.59 million for the quarter ended December 2024, reflecting a year-over-year decline of 2.5% [1] - The earnings per share (EPS) for the same period was -$0.08, an improvement from -$0.13 a year ago [1] - The reported revenue fell short of the Zacks Consensus Estimate of $20.99 million, resulting in a surprise of -11.42% [1] - The company delivered an EPS surprise of +11.11%, with the consensus EPS estimate being -$0.09 [1] Key Metrics - Assets Under Custody in Custody Solutions amounted to $16.90 billion, slightly below the three-analyst average estimate of $16.98 billion [4] - Total Custodial Accounts reached 2,376, exceeding the average estimate of 2,339 by two analysts [4] - Custodial administration fees generated revenues of $9.96 million, compared to the estimated $10.36 million by four analysts [4] - Marketplace revenues were reported at $8.63 million, lower than the four-analyst average estimate of $10.73 million [4] Stock Performance - Shares of Forge Global have returned +13.9% over the past month, contrasting with the Zacks S&P 500 composite's -4.1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - Forge Global Holdings, Inc. reported a quarterly loss of $0.08 per share, which was better than the Zacks Consensus Estimate of a loss of $0.09, and an improvement from a loss of $0.13 per share a year ago, indicating an earnings surprise of 11.11% [1] - The company generated revenues of $18.59 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 11.42% and down from $19.06 million in the same quarter last year [2] - Forge Global shares have declined approximately 4.5% year-to-date, underperforming the S&P 500, which has seen a decline of 1.8% [3] Earnings Outlook - The earnings outlook for Forge Global is mixed, with the current consensus EPS estimate for the upcoming quarter at -$0.07 on revenues of $23.95 million, and for the current fiscal year at -$0.25 on revenues of $105.56 million [7] - The company's Zacks Rank is currently 3 (Hold), suggesting that shares are expected to perform in line with the market in the near future [6] Industry Context - The Financial - Miscellaneous Services industry, to which Forge Global belongs, is currently ranked in the top 14% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Revenue and Financial Performance - Total revenue less transaction-based expenses for Q4 2024 was $18.3 million, a decrease from $19.1 million quarter-over-quarter[3] - Total marketplace revenues less transaction-based expenses increased by 46% year-over-year to $37.0 million[3] - Total revenues for the year ended December 31, 2024, were $79.329 million, an increase of 13.4% compared to $69.821 million in 2023[34] - Marketplace revenue for Q4 2024 was $8.628 million, while custodial administration fees were $9.961 million, contributing to total revenues of $18.589 million for the quarter[34] - Net loss for Q4 2024 was $16.0 million, down from $18.8 million quarter-over-quarter[5] - Net loss attributable to Forge Global Holdings, Inc. for the year was $66.333 million, compared to $90.221 million in the previous year, reflecting a significant reduction in losses[34] - Operating loss for the year ended December 31, 2024, was $82.263 million, a decrease from $91.449 million in 2023, indicating improved operational efficiency[34] - The company reported a basic net loss per share of $0.36 for the year ended December 31, 2024, compared to $0.52 in 2023, indicating improved per-share performance[34] - Net loss for the three months ended December 31, 2024, was $15,965 thousand, compared to a net loss of $18,844 thousand for the previous quarter, reflecting a decrease of 10%[36] Assets and Liabilities - Total assets decreased to $263.506 million as of December 31, 2024, down from $310.731 million in 2023, primarily due to a reduction in current assets[32] - Cash and cash equivalents decreased to $105.140 million in 2024 from $144.722 million in 2023, indicating a liquidity challenge[32] - Total liabilities decreased to $36.764 million in 2024 from $42.313 million in 2023, showing a reduction in financial obligations[32] - The company’s accumulated deficit increased to $346.972 million in 2024 from $280.638 million in 2023, highlighting ongoing challenges in achieving profitability[32] Trading and Custodial Accounts - Total trading volume reached $1.3 billion, representing a 73% increase year-over-year[11] - Total custodial accounts increased by 4% quarter-over-quarter to 2.38 million[17] - Total custodial accounts increased to 2,376,099, representing a 4% growth from 2,281,976 accounts in the previous quarter[42] - Total assets under custody grew by 2% quarter-over-quarter to $16.9 billion[17] - Assets under custody rose to $16,897,318 thousand, an increase of 2% from $16,620,450 thousand in the prior quarter[42] - Total trades for the three months ended December 31, 2024, were 646, down 5% from 680 trades in the previous quarter[40] Adjusted EBITDA and Cash Flow - Adjusted EBITDA loss for Q4 2024 was $10.9 million, an improvement from $11.4 million quarter-over-quarter[6] - Adjusted EBITDA for the three months ended December 31, 2024, was $(10,881) thousand, slightly improved from $(11,414) thousand in the previous quarter[38] - Net cash used in operating activities for the three months ended December 31, 2024, was $(7,899) thousand, compared to $(5,828) thousand in the previous quarter[36] - Cash and cash equivalents at the end of the period were $105,140 thousand, down from $114,454 thousand at the end of the previous quarter[36] Shareholder Actions and Compensation - Forge's board authorized a share repurchase program of up to $10 million[24] - Share-based compensation for the year ended December 31, 2024, totaled $30,489 thousand, down from $34,334 thousand in the previous year[38] - The weighted-average shares used in computing net loss per share increased to 183,160,263 in 2024 from 173,402,167 in 2023, reflecting potential dilution[34] New Initiatives - Forge launched Forge Price, a proprietary pricing model for approximately 200 pre-IPO companies[24]

Financial Performance - Marketplace revenue for the three months ended September 30, 2024, was $8,640,000, a decrease of 24% from $11,423,000 in the previous quarter[133]. - Total revenues, less transaction-based expenses, decreased by $2.9 million, or 13%, from $22,026,000 in the previous quarter to $19,143,000 for the three months ended September 30, 2024[162]. - Marketplace revenue decreased by $3.0 million, or 25%, driven by a 21% decrease in volume and a decrease in net take rate to 2.6% for the three months ended September 30, 2024[163]. - For the nine months ended September 30, 2024, total revenues, less transaction-based expenses, increased by $9.9 million, or 20%[165]. - Marketplace revenue for the nine months ended September 30, 2024, increased by $11.3 million, or 64%, driven by a 99% increase in trade volume[165]. - Net loss attributable to Forge Global Holdings, Inc. for the three months ended September 30, 2024, was $18,342,000, compared to a net loss of $13,724,000 for the previous quarter[158]. - Adjusted EBITDA for the three months ended September 30, 2024, was $(11,414,000), compared to $(7,917,000) for the previous quarter[158]. Customer Metrics - Total Custodial Accounts increased by 3% quarter-over-quarter to 2,281,976 accounts, and grew by 13% year-over-year from 2,023,756 accounts[137]. - The number of trades executed in Q3 2024 was 680, down 18% from 831 in Q2 2024, but up 60% from 1,321 in Q3 2023[133]. - Trading volume for the three months ended September 30, 2024, was $338,075,000, a decrease of 21% from $426,318,000 in the previous quarter, but a significant increase of 99% from $515,486,000 year-over-year[133]. Operating Expenses - Total operating expenses for the three months ended September 30, 2024, were $40,046,000, compared to $39,677,000 in the previous quarter[158]. - Total compensation and benefits for the three months ended September 30, 2024, was $28.75 million, a slight decrease of $34, or 0% from the previous quarter[167]. - Salary expense increased by $1.7 million, primarily due to higher severance costs, reflecting the company's alignment of headcount with business needs[168]. - Incentive compensation and other bonus expense decreased by $1.6 million, primarily due to lower commissions from decreased trading volume and marketplace revenue[169]. - Other operating expenses increased by $0.4 million, or 4%, for the three months ended September 30, 2024, driven by accounting services and legal matters[172]. Cash Flow and Capital Resources - As of September 30, 2024, the company had cash and cash equivalents of $114.5 million, with an accumulated deficit of $331.3 million[180]. - Cash used in operating activities for the nine months ended September 30, 2024, was $32.6 million, primarily driven by a net loss of $51.9 million[185]. - Cash provided by investing activities for the nine months ended September 30, 2024, was $5.7 million, primarily from the maturity of term deposits[187]. - The company expects to require additional capital resources to execute strategic initiatives for business growth[182]. Strategic Initiatives - The company plans to invest in platform capabilities, regulatory compliance, and product innovation to drive future growth[124]. - The company aims to expand its customer base and increase usage among existing customers through new product introductions and enhanced brand awareness[121][122]. Economic Impact - The overall health of the economy and consumer behavior significantly impacts the company's performance in the private market[125][126]. Accounting Policies - No material changes to critical accounting policies and estimates compared to the previous Annual Report[193]. - Company is a smaller reporting company and not required to provide additional market risk information[195].

Financial Data and Key Metrics Changes - In Q3 2024, total revenue less transaction-based expenses was $19.1 million, down from $22 million in Q2 2024 but up from $18.4 million in the year-ago quarter [9][17] - Adjusted EBITDA loss increased to $11.4 million from $7.9 million in the previous quarter, influenced by one-time severance expenses and other personnel costs [25] - Net loss for the quarter was $18.8 million, up from $14 million quarter-over-quarter [24] Business Line Data and Key Metrics Changes - Net marketplace revenue was $8.6 million, down from $11.4 million in the prior quarter but up 21% year-over-year [19] - Transaction volume for the quarter was $338 million, a decrease from $426 million in the prior quarter, while year-to-date volume increased 99% to $1 billion [20] - Total custodial administration fees were $10.5 million, roughly flat compared to the prior quarter [23] Market Data and Key Metrics Changes - Median valuations for companies trading on the Forge Platform are trending up, with median discounts improving to -8% and -12% to the last funding round in the last two months of the quarter [30] - The bid-ask spread decreased to 5.5% in September, better than the long-term average of 11.3% [42] Company Strategy and Development Direction - The company aims to reach breakeven adjusted EBITDA by 2026 and is taking actions to narrow adjusted EBITDA losses in the coming quarters [15][29] - Continued investment in the Forge Next Generation Platform is expected to enhance pricing data exposure and improve client experience [13][14] - The introduction of Forge Price aims to provide pricing transparency and insights into private market performance [11][12] Management's Comments on Operating Environment and Future Outlook - Management noted that the upcoming U.S. presidential election and geopolitical instability have weighed on investor sentiment, but they expect improved conditions post-election [18][36] - The company anticipates that the resolution of the election will lead to increased investor confidence and a recovery in primary funding and IPO markets in 2025 [31][36] Other Important Information - The company has over 20,000 institutions registered on its platform, with institutional investors accounting for at least two-thirds of buyside volume annually since 2021 [10] - The company is focusing on maintaining cost discipline while balancing investment opportunities with strong ROI [29] Q&A Session Summary Question: Expectations for marketplace revenues in Q4 - Management indicated that Q4 has historically been the biggest quarter and they are optimistic about returning to normalized activity levels post-election [40][41] Question: Reception of Forge Price and potential partnerships - Management highlighted that Forge Price is part of a broader data strategy and is expected to generate revenue through licensing and enablement opportunities [46][47] Question: Engagement trends with Forge Pro - Management noted that Forge Pro is expected to enhance client engagement and is seeing increased adoption among institutional investors [50][54] Question: Impact of new administration on regulations - Management expressed optimism about a lighter regulatory touch and is actively engaging with regulators to promote access to private markets [56][60] Question: Updates on cost-cutting initiatives - Management confirmed ongoing cost-cutting measures and investments in offshore technology capabilities to improve efficiency [65] Question: Competitive landscape and Nasdaq Private Markets - Management remains confident in their market position, emphasizing their established network and the challenges new entrants face in gaining traction [67][69]

Core Insights - Forge Global Holdings, Inc. reported a quarterly loss of $0.10 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.09, but an improvement from a loss of $0.11 per share a year ago [1] - The company posted revenues of $19.22 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 15.72%, but showing an increase from $18.56 million in the same quarter last year [2] - The stock has underperformed significantly, losing about 65.3% since the beginning of the year compared to the S&P 500's gain of 21.2% [3] Financial Performance - Over the last four quarters, Forge Global has surpassed consensus EPS estimates two times [2] - The current consensus EPS estimate for the upcoming quarter is -$0.07 on revenues of $25.52 million, and for the current fiscal year, it is -$0.34 on revenues of $89.63 million [7] Industry Context - The Financial - Miscellaneous Services industry, to which Forge Global belongs, is currently ranked in the top 29% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Forge Global's stock performance [5]

Revenue Performance - Total revenue for Q3 2024 was $19.1 million, a 4% increase compared to $18.4 million in Q3 2023[1] - Total revenues for the three months ended September 30, 2024, were $19,216,000, an increase of 3.5% compared to $18,563,000 for the same period in 2023[22] - Total marketplace revenues reached $8.6 million in Q3 2024, up 21% from $7.1 million in the year-ago quarter[1] - Marketplace revenues reached $8,713,000 for the three months ended September 30, 2024, up 19.6% from $7,283,000 in the same period last year[22] Trading Activity - Trading volume in Q3 2024 was $338.1 million, representing a 44% increase over the $234.1 million in Q3 2023[1] - Volume for trades was $338,075,000 for the three months ended September 30, 2024, compared to $426,318,000 in the previous quarter, reflecting a decline in trading activity[28] - Trading solutions trades decreased to 680 for the three months ended September 30, 2024, down from 831 in the previous quarter[28] Losses and Expenses - Total operating loss for Q3 2024 was $20.9 million, compared to $21.5 million in the year-ago quarter[3] - Net loss for Q3 2024 was $18.8 million, slightly improved from $19.0 million in Q3 2023[3] - Adjusted EBITDA loss for Q3 2024 was $11.4 million, compared to $10.4 million in the year-ago quarter[4] - Operating loss for the three months ended September 30, 2024, was $(20,903,000), compared to $(21,513,000) for the same period in 2023[22] - Net loss attributable to Forge Global Holdings, Inc. for the three months ended September 30, 2024, was $(18,342,000), compared to $(18,348,000) in the same period last year[22] - Adjusted EBITDA for the three months ended September 30, 2024, was $(11,414,000), worsening from $(7,917,000) in the previous quarter[25] Cash and Assets - Cash and cash equivalents as of September 30, 2024, were $114.5 million, down from $144.7 million at the end of 2023[6] - Cash, cash equivalents, and restricted cash at the end of the period were $115,557,000, down from $121,564,000 at the end of the previous quarter[23] - Total assets under custody remained stable at $16.6 billion, unchanged from the previous quarter[10] - Assets under custody reached $16,620,450,000 as of September 30, 2024, slightly up from $16,600,408,000 in the previous quarter[31] Customer Engagement - The number of custodial accounts increased to 2.28 million, up from 2.02 million in the year-ago quarter[10] - Total custodial accounts increased to 2,281,976 as of September 30, 2024, up from 2,211,108 as of June 30, 2024, indicating growth in customer engagement[31] Other Financial Metrics - Basic net loss per share for the three months ended September 30, 2024, was $(0.10), consistent with $(0.11) for the same period in 2023[22] - Cash used in operating activities for the three months ended September 30, 2024, was $(5,828,000), compared to $(14,431,000) for the previous quarter[23] - Total operating expenses for the three months ended September 30, 2024, were $40,046,000, an increase from $39,928,000 in the same period of 2023[22] - The company reported a change in fair value of warrant liabilities of $(932,000) for the three months ended September 30, 2024, compared to $(907,000) in the same period last year[23] - The company reported a net loss attributable to noncontrolling interest of $(502,000) for the three months ended September 30, 2024, compared to $(316,000) in the previous quarter[25] - Share-based compensation expense was $7,622,000 for the three months ended September 30, 2024, slightly down from $7,859,000 in the previous quarter[25] New Initiatives - Forge launched Forge Price, providing pricing transparency for approximately 250 pre-IPO companies, enhancing market access for investors[12]

Financial Data and Key Metrics Changes - In Q2 2024, Forge recorded total revenue of $22 million, up 15% from the previous quarter and up 32% year-over-year [10] - The net loss decreased from $19 million to $14 million quarter-over-quarter, attributed to improved revenue and lower operating expenses [13] - Adjusted EBITDA loss was $7.9 million, compared to a loss of $13.5 million in the previous quarter [13] Business Line Data and Key Metrics Changes - Marketplace revenue reached $11.4 million, up from $8.5 million last quarter, reflecting a 35% increase quarter-over-quarter and a 103% increase year-over-year [10] - Transaction volume increased 62% from $263 million in Q1 to $426 million in Q2, nearing full year 2023 levels [11] - The net take rate decreased from 3.2% to 2.7%, influenced by the completion of several large block trades [12] Market Data and Key Metrics Changes - The number of companies represented by indications of interest (IOIs) increased to 551 in Q2, the highest number on record [18] - U.S. IPO proceeds reached $23.2 billion year-to-date, exceeding full year 2023 IPO proceeds, with a 37% increase in the number of IPOs [19] - U.S. late-stage venture funding totaled $19.5 billion in Q2, a 61% improvement compared to the year-ago quarter [19] Company Strategy and Development Direction - The company is focused on advancing its next-generation technology platform to enhance operational efficiency and market position [6][8] - Forge aims to achieve breakeven adjusted EBITDA by 2026, supported by cost reductions and revenue growth [8][15] - The company is committed to maintaining investment levels in its technology platform while implementing cost-saving measures [36] Management's Comments on Operating Environment and Future Outlook - Management noted positive momentum in the private market, with buy-side interest outpacing sell-side interest [17] - The bid-ask spread has narrowed to 6.4%, indicating improved market conditions [17] - Management remains optimistic about the future, despite potential market fluctuations due to external factors [19] Other Important Information - The company announced a reduction in headcount costs by approximately 11%, expected to generate annualized savings of $11.3 million [7][15] - Cash, cash equivalents, and restricted cash at the end of the quarter totaled $121.6 million, down from $130.7 million in the previous quarter [14] Q&A Session Summary Question: What revenue range could support a break-even level for the company going forward? - Management indicated that the revenue model extrapolates recent growth to project future revenues, which supports the break-even model for 2026 [21][23] Question: What is the dynamic behind the lower take rate despite higher trading volumes? - Management noted an increase in institutional interest and explained that higher volumes from block trades can lead to lower take rates, a trend observed in previous years [24][25] Question: Can you provide insights on cash burn trajectory in relation to the break-even target? - Management clarified that the model is based on adjusted EBITDA, with expectations for improved productivity and efficiency contributing to future margin enhancements [26][27] Question: How does the IPO market influence transaction volume? - Management explained that a functioning IPO market generates enthusiasm for pre-IPO trading, leading to increased transaction activity [30][31] Question: What is the competitive landscape for private market indexes? - Management expressed confidence in their competitive advantage due to the depth of their data and the unique positioning of their indices compared to others in the market [42][43]

Financial Performance - Forge Global Holdings, Inc. reported a quarterly loss of $0.08 per share, better than the Zacks Consensus Estimate of a loss of $0.12, and an improvement from a loss of $0.12 per share a year ago, representing an earnings surprise of 33.33% [1] - The company posted revenues of $22.28 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 10.12%, compared to year-ago revenues of $16.72 million [2] - Over the last four quarters, Forge Global has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Forge Global shares have declined approximately 64.4% since the beginning of the year, contrasting with the S&P 500's gain of 9.9% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.11 on $22 million in revenues, and -$0.42 on $85.75 million in revenues for the current fiscal year [7] Industry Outlook - The Zacks Industry Rank for Financial - Miscellaneous Services is currently in the top 39% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry performance can materially impact stock performance [5][8]