Forge Global Holdings, Inc. Reports Second Quarter Fiscal Year 2024 Results

• Total Revenue Less Transaction Based Expenses increased to $22.0 million in 2Q24, up 15% quarter-over-quarter and 32% over the year-ago quarter
• Total Marketplace Revenues, Less Transaction Based Expenses increased to $11.4 million in 2Q24, up 35% quarter-over-quarter and 103% over the year-ago quarter
• Trading Volume increased to $426.3 million in 2Q24, up 62% quarter-over-quarter and 178% over the year-ago quarter
• Net Take Rate was 2.7% in 2Q24
• Planned Expense Reductions are expected to improve margins and savings, on an annualized basis, of an estimated $11.3 million

Forge Global Holdings, Inc. ("Forge," or the "Company") (NYSE:FRGE), a leading private securities marketplace, today announced its financial results for the quarter ended June 30, 2024.

"In Q2, we recorded our fifth consecutive quarter of revenue growth – with a 15% increase over Q1, attributable to increased trading activity as the market reawakens," said Kelly Rodriques, CEO of Forge. "Throughout the downturn, we continued to invest in our Next Generation Platform technology while delivering additional products and capabilities to market to prepare Forge for this moment. Because of the targeted investments we've made, we're in a position now to advance planned cost savings and deliver them to our bottom line. And to that end, we announced today a decisive action to reduce our expenses and to accelerate our timeline to profitability."

Financial Highlights for the Second Quarter 2024

Revenue: Total revenue less transaction-based expenses was $22.0 million compared to $19.2 million in the quarter ended March 31, 2024.

Operating Loss: Total operating loss was $17.7 million compared to total operating loss of $25.0 million in the quarter ended March 31, 2024.

Net Loss: Net loss was $14.0 million compared to net loss of $19.0 million in the quarter ended March 31, 2024.

Adjusted EBITDA: Total adjusted EBITDA was a loss of $7.9 million compared to total adjusted EBITDA loss of $13.5 million in the quarter ended March 31, 2024. Adjusted EBITDA in the quarter ended March 31, 2024 included non-recurring charges of $2.8 million in connection with legacy legal matters.

Cash Flow from Operating Activities: Net cash used in operating activities was $14.4 million compared to $12.4 million in the quarter ended March 31, 2024.

Cash Flow from Investing Activities: Net cash provided from investing activities was $6.3 million compared to net cash used in investing activities of $0.4 million for the quarter ended March 31, 2024.

Cash Flow from Financing Activities: Net cash used in financing activities was $0.9 million compared to $2.1 million in the quarter ended March 31, 2024.

Ending Cash Balance: Cash and cash equivalents as of June 30, 2024 was $120.5 million.

Share Count: Basic weighted-average number of shares used to compute net loss per share attributable to common stockholders for the quarter ended June 30, 2024, was 183 million shares and fully diluted outstanding share count as of June 30, 2024 was 201 million shares.

We estimate for the quarter ended September 30, 2024 that Forge will have 184 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 Second Quarter 2024

• Trading Volume increased from $262.5 million to $426.3 million, up 62% quarter-over-quarter.
• Net Take Rate was 2.7%, down from 3.2% prior quarter.
• Total Marketplace revenues, less transaction-based expenses, increased from $8.5 million to $11.4 million, up 35% quarter-over-quarter.
• Total Custodial Administration Fee revenues decreased from $10.7 million to $10.6 million, down 1% quarter-over-quarter.
• Total Custodial Accounts increased from 2.15 million to 2.21 million, up 3% quarter-over-quarter.
• Total Assets Under Custody increased from $16.5 billion to $16.6 billion, up 1% quarter-over-quarter.

Additional Business Metrics for the Second Quarter 2024

• Forge Trust Custodial Cash: Forge Trust Custodial Cash totaled $495 million, up 3% quarter-over-quarter from $481 million.
• Total Number of Companies with Indications of Interest (IOIs): The total number of companies with IOIs were 551, up 1% quarter-over-quarter.
• Headcount: Forge finished out the quarter ended June 30, 2024 with a total headcount of 338. Additionally, Forge announced planned expense reductions today which include a reduction in headcount costs by roughly 11%, as well as additional expense reductions. This action is expected to improve margins and produce savings of an estimated $11.3 million on an annualized basis.

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 Global's Private Market Index Now Tracked by Accuidity Strategy, Offering Diversified Exposure to Late-Stage Companies: The Forge Accuidity Private Market Index – which tracks the performance of late-stage, venture-backed companies - has been adopted by Accuidity within their Megacorn strategy ("Accuidity"). Accuidity is a Boston-based institutional asset manager that is seeking to replicate this newly created Forge index. The Forge Accuidity Private Market Index tracks the performance of 60 venture-backed, late-stage, private growth companies including SpaceX, Anduril, Scale AI, Epic Games, Chime and others. All names are ranked according to a modified capitalization weighting methodology with an annual rebalance frequency.
• Forge Launches in Europe Amidst Growing Demand for Access to Private Company Liquidity: Connecting directly to the global interest book and leveraging Forge's infrastructure, data services and technology solutions, Forge Europe provides sellers with access to an extensive pool of liquidity and buyers with the opportunity to buy shares in some of the world's most exciting growth companies. With operational hubs in Berlin, Germany, integrated within the Deutsche Börse network, as well as in London, UK, Forge Europe has now closed its first trades in cooperation with local partners and is planning to further expand across Europe into Austria, Switzerland and France.

Webcast/Conference Call Details

Forge will host a webcast conference call today, August 7th, 2024, at 4:30 p.m. Eastern Time / 1:30 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) net loss attributable to noncontrolling interest, (ii) provision for income taxes, (iii) interest (income) expense, net, (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.

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