Forge Global Holdings, Inc. Reports Fourth Quarter and Fiscal Year 2023 Results

• Total Revenue Less Transaction Based Expenses Was $18.9 million in 4Q23, increasing 13% year-over-year
• Trading Volume Was $250.4 million in 4Q23, increasing 1% year-over-year
• Net Take Rate Was 3.2% in 4Q23 and 3.3% for 2023
• Total Assets Under Custody increased in 2023 from $14.9 billion to $15.6 billion, up 5% year-over-year

Forge Global Holdings, Inc. ("Forge," or the "Company") (NYSE:FRGE), a leading private securities marketplace, today announced its financial results for the quarter and year ended December 31, 2023.

"In 2023 we made important moves to invest in Forge's future vision and our path to profitability," said Kelly Rodriques, CEO of Forge. "We focused on three things: accelerating technology development, winning with data and expanding our category leadership. Our technology milestones, including launching Forge Pro for institutional investors, as well as the debut of our first two indexes, are evidence of Forge's critical role in driving the private market toward its inevitable tipping point."

Financial Highlights for the Fourth Quarter of 2023*

Revenue: Total revenue less transaction-based expenses increased from $18.4 million in the quarter ended September 30, 2023 to $18.9 million in the quarter ended December 31, 2023.

Operating Income: Total operating loss went from $21.5 million in the quarter ended September 30, 2023 to $24.4 million in the quarter ended December 31, 2023.

Net Loss: Net loss went from $19.0 million in the quarter ended September 30, 2023 to $26.2 million in the quarter ended December 31, 2023.

Adjusted EBITDA: Total adjusted EBITDA loss went from $10.4 million in the quarter ended September 30, 2023 to $13.6 million in the quarter ended December 31, 2023. The fluctuation is primarily driven by a $2.5 million increase in accrued legal expenses related to a settlement reached in 4Q23.

Cash Flow from Operating Activities: Net cash used in operating activities was $6.6 million in the quarter ended December 31, 2023, compared to $3.5 million in the quarter ended September 30, 2023.

Ending Cash Balance: Cash and cash equivalents as of December 31, 2023 was $144.7 million.

Share Count: Basic weighted-average number of shares used to compute net loss per share attributable to common stockholders for the quarter ended December 31, 2023, was 175 million shares and fully diluted outstanding share count as of December 31, 2023 was 199 million shares.

We estimate for the quarter ended March 31, 2024 that Forge will have 180 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.

*Percentages may not be replicated based on the rounded figures presented.

KPIs for the Fourth Quarter 2023

• Trading Volume increased from $234.1 million to $250.4 million, up 7% quarter-over-quarter.
• Net Take Rate increased from 3.0% to 3.2% quarter-over-quarter.
• Total Marketplace revenues (previously called Placement Fee revenues), less transaction-based expenses increased from $7.1 million to $8.0 million, up 12% quarter-over-quarter.
• Total Custodial Administration Fee revenues decreased from $11.3 million to $10.9 million, down 3% quarter-over-quarter.
• Total Custodial Accounts increased from 2.02 million to 2.08 million, up 3% quarter-over-quarter.
• Total Assets Under Custody increased from $15.1 billion to $15.6 billion, up 3% quarter-over-quarter.

Additional Business Metrics for the Fourth Quarter 2023

• Forge Trust Custodial Cash: In the quarter ended December 31, 2023, Forge Trust Custodial Cash totaled $505 million, down 20% year-over-year from $635 million.
• Total Number of Companies with Indications of Interest (IOIs): In the quarter ended December 31, 2023, the total number of companies with IOIs was 485, up 11% year-over-year.
• Headcount: Forge finished out the quarter ended December 31, 2023 with a total headcount of 345.

Financial Highlights for the Full Year 2023

• Revenue: Total revenue less transaction-based expenses was $69.4 million compared to $68.9 million for the year ended December 31, 2022.
• Operating Income: Total operating loss was $91.4 million compared to $135.0 million for the year ended December 31, 2022.
• Net Loss: Net loss of $91.5 million compared to $111.9 million for the year ended December 31, 2022.
• Adjusted EBITDA: Total adjusted EBITDA was a loss of $48.8 million compared to total adjusted EBITDA loss of $46.9 million for the year ended December 31, 2022.
• Cash Flow from Operating Activities: Net cash used in operating activities was $41.5 million compared to net cash used in operating activities of $68.8 million for the year ended December 31, 2022, a 40% improvement.

KPIs for the Full Year 2023

• Trading Volume was $0.8 billion for the year, down 37% year-over-year.
• Net Take Rate for the year was 3.3%, constant year-over-year.
• Total Marketplace revenues (previously called Placement Fee revenues), less transaction-based expenses totaled $25.4 million for the year, down 37% year-over-year.
• Total Custodial Administration Fee revenues increased from $28.7 million to $44.0 million for the year, up 53% year-over-year.
• Total Custodial Accounts increased from 1.87 million to 2.08 million, up 11% year-over-year.
• Total Assets Under Custody increased from $14.9 billion to $15.6 billion, up 5% year-over-year.

Please note that we have renamed a category of our revenue, previously described as "Placement Fee" revenue, to "Marketplace" revenue in order to align with the types of revenue included in this category. Marketplace revenue includes placement fees earned through transactions on our Forge Markets platform, subscription fees earned from our data products, and private company solutions revenue. We believe this name better describes the revenue included therein and therefore is more useful to investors by better characterizing the underlying types of revenue included. We have not adjusted methodology, assumptions, or otherwise changed any aspects of "Placement Fee" revenue in making this name change to "Marketplace" revenue, and this category of revenue remains comparable to prior period presentations. For more information please refer to our Annual Report on Form 10-K to be filed on or around the date of this press release.

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

• Forge Develops Forge Pro: A major milestone toward an institutional trade order management system for private company securities.
• Forge Announces First Private Market Index Based on Active Trading and Liquidity Data: The Forge Private Market Index marks a new milestone for Forge and the private market more broadly, as Forge leverages its 13 years of private market trading data and experience to enable investors to better measure their investment performance and gain insights on late-stage, venture-backed companies.
• Forge Announces First-of-its-Kind Investable Private Market Index: Partnering with Accuidity, LLC to provide diversified exposure to late stage companies.
• Forge Added to U.S. Small-Cap Russell 2000® Index: As a member of the U.S. Small-Cap Russell 2000® Index (the "Russell 2000® Index"), as part of the 2023 Russell U.S. Index's annual reconstitution. Membership in the Russell 2000® Index, which remains in place for one year, is based on membership in the broad-market Russell 3000® Index.
• Forge Appoints Chief Technology Officer of Toast to its Board: Debra Chrapaty joined the Board of Directors in April 2023.

Webcast/Conference Call Details

Forge will host a webcast conference call today, March 26th, 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 defined Adjusted EBITDA as net loss, adjusted to exclude: (i) interest expense, net, (ii) provision for or benefit from income taxes, (iii) depreciation and amortization, (iv) share-based compensation expense, (v) change in fair value of warrant liabilities, (vi) acquisition-related transaction costs, and (vii) other significant gains, losses, and expenses (such as impairments, transaction bonus) 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 Annual Report on Form 10-K 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.

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