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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Forge Global Holdings Inc | NYSE:FRGE | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 1.48 | 0 | 09:00:00 |
Forge Global Holdings, Inc. (“Forge,” or the “Company”) (NYSE: FRGE), a leading private securities marketplace, today announced its financial results for the quarter ended March 31, 2024.
"I’m pleased to share that in the first quarter of 2024, Forge delivered our 4th consecutive quarter of revenue improvement as the market continues its recovery,” said Kelly Rodriques, CEO of Forge. “We believe momentum continues to progressively build in the private market after a long cold winter. As we consistently signaled throughout the last two years — we stayed focused on emerging from the downturn as a market leader — a stronger company with a more robust technology and data portfolio.”
Financial Highlights for the First Quarter 2024
Revenue: Total revenue less transaction-based expenses was $19.2 million compared to $18.9 million in the quarter ended December 31, 2023.
Operating Loss: Total operating loss was $25.0 million compared to total operating loss of $24.4 million in the quarter ended December 31, 2023.
Net Loss: Net loss was $19.0 million compared to net loss of $26.2 million in the quarter ended December 31, 2023.
Adjusted EBITDA: Total adjusted EBITDA was a loss of $13.5 million compared to total adjusted EBITDA loss of $13.6 million in the quarter ended December 31, 2023. Adjusted EBITDA includes non-recurring charges of $2.8 million and $2.5 million in connection with legacy legal matters in the quarters ended March 31, 2024 and December 31, 2023, respectively.
Cash Flow from Operating Activities: Net cash used in operating activities was $12.4 million compared to $6.6 million in the quarter ended December 31, 2023.
Cash Flow from Financing Activities: Net cash used in financing activities was $2.1 million compared to net cash provided by financing activities of $0.3 million in the quarter ended December 31, 2023.
Ending Cash Balance: Cash and cash equivalents as of March 31, 2024 was $129.6 million.
Share Count: Basic weighted-average number of shares used to compute net loss per share attributable to common stockholders for the quarter ended March 31, 2024, was 180 million shares and fully diluted outstanding share count as of March 31, 2024 was 198 million shares.
We estimate for the quarter ended June 30, 2024 that Forge will have 183 million weighted average basic shares outstanding, which will be used to calculate earnings per share in a loss position.
Fully diluted outstanding share count includes all common shares outstanding plus shares that would be issued in respect to outstanding options and warrants, net of shares to be withheld in respect to exercise price of the respective instruments. Instruments that are out of the money are excluded from the fully diluted outstanding share count.
KPIs for the First Quarter 2024
Additional Business Metrics for the First Quarter 2024
Please refer to the section titled “Use of Non-GAAP Financial Information” and the tables within this press release which contain explanations and reconciliations of the Company’s non-GAAP financial measures.
Business Highlights
Webcast/Conference Call Details
Forge will host a webcast conference call today, May 7th, 2024, at 5:00 p.m. Eastern Time / 2:00 p.m Pacific Time to discuss these financial results and business highlights. The listen-only webcast is available at https://ir.forgeglobal.com. Investors and participants can access the conference call over the phone by dialing 1 (800) 715-9871 from the United States, or +1 (646) 307-1963 internationally. The conference ID is 6194475.
Following the conference call, an on-demand replay of the webcast will be made available on the Investor Relations page of the Company’s website at https://ir.forgeglobal.com.
Use of Non-GAAP Financial Information
In addition to our financial results determined in accordance with generally accepted accounting principles in the United States of America ("GAAP"), we present Adjusted EBITDA, a non-GAAP financial measure. We use Adjusted EBITDA to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that Adjusted EBITDA, when taken together with the corresponding GAAP financial measure, provides meaningful supplemental information regarding our performance by excluding specific financial items that have less bearing on our core operating performance. We consider Adjusted EBITDA to be an important measure because it helps illustrate underlying trends in our business and our historical operating performance on a more consistent basis.
However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of Adjusted EBITDA as a tool for comparison. A reconciliation is provided below for Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review Adjusted EBITDA and the reconciliation of Adjusted EBITDA to net loss, and not to rely on any single financial measure to evaluate our business.
We define Adjusted EBITDA as net loss attributable to Forge Global Holdings, Inc., adjusted to exclude: (i) interest income, (ii) provision for income taxes, (iii) net loss attributable to noncontrolling interest, (iv) depreciation and amortization, (v) share-based compensation expense, (vi) change in fair value of warrant liabilities, and (vii) other significant gains, losses, and expenses such as impairments or acquisition-related transaction costs that we believe are not indicative of our ongoing results.
Forward-Looking Statements
This press release contains “forward-looking statements,” which generally are accompanied by words such as “believe,” “may,” “could,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “target,” “goal,” “expect,” “should,” “would,” “plan,” “predict,” “project,” “forecast,” “potential,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict, indicate or relate to future events or trends or Forge’s future financial or operating performance, or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding Forge’s beliefs regarding its financial position and operating performance, as well as future opportunities for Forge to expand its business. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, while considered reasonable by Forge and its management, are subject to risks and uncertainties that may cause actual results to differ materially from current expectations. You should carefully consider the risks and uncertainties described in Forge’s documents filed, or to be filed, with the SEC, including in its Quarterly Report on Form 10-Q that will be filed on or around the date of this press release. There may be additional risks that Forge presently does not know of or that it currently believes are immaterial that could also cause actual results to differ materially from those contained in the forward-looking statements. In addition, forward-looking statements reflect Forge’s expectations, plans or forecasts of future events and views as of the date of this press release. Forge anticipates that subsequent events and developments will cause its assessments to change. However, while Forge may elect to update these forward-looking statements at some point in the future, Forge specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Forge’s assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.
About Forge
Forge is a leading provider of marketplace infrastructure, data services and technology solutions for private market participants. Forge Securities LLC is a registered broker-dealer and a Member of FINRA that operates an alternative trading system.
FORGE GLOBAL HOLDINGS, INC.
Unaudited Condensed Consolidated Balance Sheets
(In thousands of U.S. dollars, except share and per share data)
March 31, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
129,606
$
144,722
Restricted cash
1,075
1,062
Accounts receivable, net
5,553
4,067
Prepaid expenses and other current assets
12,418
13,253
Total current assets
$
148,652
$
163,104
Internal-use software, property and equipment, net
4,540
5,192
Goodwill and other intangible assets, net
128,940
129,919
Operating lease right-of-use assets
7,985
4,308
Payment-dependent notes receivable, noncurrent
6,236
5,593
Other assets, noncurrent
2,324
2,615
Total assets
$
298,677
$
310,731
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
$
2,671
$
1,831
Accrued compensation and benefits
7,037
11,004
Accrued expenses and other current liabilities
11,507
8,861
Operating lease liabilities, current
2,922
2,516
Total current liabilities
$
24,137
$
24,212
Operating lease liabilities, noncurrent
6,253
2,707
Payment-dependent notes payable, noncurrent
6,236
5,593
Warrant liabilities
5,169
9,616
Other liabilities, noncurrent
285
185
Total liabilities
$
42,080
$
42,313
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.0001 par value; 180,011,227 and 176,899,814 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
18
18
Treasury stock, at cost; 157,193 shares as of March 31, 2024 and December 31, 2023, respectively
$
(625
)
$
(625
)
Additional paid-in capital
551,274
543,846
Accumulated other comprehensive income
765
911
Accumulated deficit
(299,262
)
(280,638
)
Total Forge Global Holdings, Inc. stockholders’ equity
$
252,170
$
263,512
Noncontrolling Interest
4,427
4,906
Total stockholders’ equity
$
256,597
$
268,418
Total liabilities and stockholders’ equity
$
298,677
$
310,731
FORGE GLOBAL HOLDINGS, INC.
Unaudited Condensed Consolidated Statements of Operations
(In thousands of U.S. dollars, except share and per share data)
Three Months Ended March 31,
2024
2023
Revenues:
Marketplace revenues
$
8,520
$
4,632
Custodial administration fees
10,722
10,847
Total revenues
$
19,242
$
15,479
Transaction-based expenses:
Transaction-based expenses
(29
)
(19
)
Total revenues, less transaction-based expenses
$
19,213
$
15,460
Operating expenses:
Compensation and benefits
29,843
25,762
Technology and communications
3,060
3,390
Professional services
2,217
2,736
Advertising and market development
1,090
677
Rent and occupancy
1,135
1,326
General and administrative
5,062
2,748
Depreciation and amortization
1,816
1,789
Total operating expenses
$
44,223
$
38,428
Operating loss
$
(25,010
)
$
(22,968
)
Interest and other income (expense):
Interest income
1,709
1,509
Change in fair value of warrant liabilities
4,447
168
Other income, net
76
215
Total interest and other income (expense)
$
6,232
$
1,892
Loss before provision for income taxes
$
(18,778
)
$
(21,076
)
Provision for income taxes
216
185
Net loss
$
(18,994
)
$
(21,261
)
Net loss attributable to noncontrolling interest
$
(370
)
$
(73
)
Net loss attributable to Forge Global Holdings, Inc.
$
(18,624
)
$
(21,188
)
Net loss per share attributable to Forge Global Holdings, Inc. common stockholders:
Basic
$
(0.10
)
$
(0.12
)
Diluted
$
(0.10
)
$
(0.12
)
Weighted-average shares used in computing net loss per share attributable to Forge Global Holdings, Inc. common stockholders:
Basic
179,910,522
171,816,522
Diluted
179,910,522
171,816,522
FORGE GLOBAL HOLDINGS, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands of U.S. dollars)
Three Months Ended March 31,
2024
2023
Cash flows from operating activities:
Net loss
$
(18,994
)
$
(21,261
)
Adjustments to reconcile net loss to net cash (used in) provided by operations:
Share-based compensation
9,467
7,401
Depreciation and amortization
1,816
1,789
Amortization of right-of-use assets
643
845
Loss on impairment of long lived assets
—
536
Impairment of right-of-use assets
186
—
Allowance for doubtful accounts
109
122
Change in fair value of warrant liabilities
(4,447
)
(168
)
Changes in operating assets and liabilities:
Accounts receivable
(1,596
)
135
Prepaid expenses and other assets
1,125
2,446
Accounts payable
1,066
(1,377
)
Accrued expenses and other liabilities
2,782
(403
)
Accrued compensation and benefits
(3,967
)
(6,731
)
Operating lease liabilities
(555
)
(1,049
)
Other
(10
)
—
Net cash used in operating activities
(12,375
)
(17,715
)
Cash flows from investing activities:
Purchases of property and equipment
(400
)
(71
)
Net cash used in investing activities
(400
)
(71
)
Cash flows from financing activities:
Proceeds from exercise of options
226
61
Taxes withheld and paid related to net share settlement of equity awards
(2,302
)
(557
)
Net cash used in financing activities
(2,076
)
(496
)
Effect of changes in currency exchange rates on cash and cash equivalents
(253
)
228
Net decrease in cash and cash equivalents
(15,104
)
(18,054
)
Cash, cash equivalents and restricted cash, beginning of the period
145,785
194,965
Cash, cash equivalents and restricted cash, end of the period
$
130,681
$
176,911
Reconciliation of cash, cash equivalents and restricted cash to the amounts reported within the consolidated balance sheets
Cash and cash equivalents
$
129,606
$
175,268
Restricted cash
1,075
1,643
Total cash, cash equivalents and restricted cash, end of the period
$
130,681
$
176,911
FORGE GLOBAL HOLDINGS, INC.
Reconciliation of GAAP to Non-GAAP Results
(In thousands of U.S. dollars)
Three Months Ended March 31,
2024
2023
Net loss attributable to Forge Global Holdings, Inc.
$
(18,624
)
$
(21,188
)
Add:
Interest (income) expense, net
(1,709
)
(1,509
)
Provision for income taxes
216
185
Depreciation and amortization
1,816
1,789
Net loss attributable to noncontrolling interest
(370
)
(73
)
Loss on impairment of long lived assets
—
536
Impairment of right-of-use assets
186
—
Share-based compensation expense
9,467
7,401
Change in fair value of warrant liabilities
(4,447
)
(168
)
Adjusted EBITDA
$
(13,465
)
$
(13,027
)
FORGE GLOBAL HOLDINGS, INC. SUPPLEMENTAL FINANCIAL INFORMATION KEY OPERATING METRICS (In thousands of U.S. dollars)
Key Business Metrics
We monitor the following key business metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. The tables below reflect period-over-period changes in our key business metrics, along with the percentage change between such periods. We believe the following business metrics are useful in evaluating our business:
Three Months Ended
Dollars in thousands
March 31, 2024
December 31, 2023
Change
% Change
TRADING BUSINESS
Trades
605
435
170
39
%
Volume
$
262,538
$
250,414
$
12,124
5
%
Net Take Rate
3.2
%
3.2
%
0.1
%
2
%
Marketplace revenues, less transaction-based expenses
$
8,491
$
7,971
$
520
7
%
As of
Dollars in thousands
March 31, 2024
December 31, 2023
Change
% Change
CUSTODY BUSINESS
Total Custodial Accounts
2,152,777
2,078,868
73,909
4
%
Assets Under Custody
$
16,454,327
$
15,647,469
$
806,858
5
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20240507301904/en/
Investor Relations Contact: Dominic Paschel ir@forgeglobal.com
Media Contact: Lindsay Riddell press@forgeglobal.com
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