Forge(FRGE) - 2024 Q3 - Quarterly Report

Financial Performance - Marketplace revenue for the three months ended September 30, 2024, was $8,640,000, a decrease of 24$11,423,000 in the previous quarter[133]. - Total revenues, less transaction-based expenses, decreased by $2.9 million, or 13$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$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$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$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].