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01/10 16:57
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call showed improved financial metrics, such as a 28% increase in revenues and a 33% improvement in adjusted EBITDA loss, which are strong indicators of positive performance. Despite a net loss, the company has reduced cash used in operations and improved adjusted EPS by 29%. The cautious optimism in the Q&A and exploration of new partnerships in tokenization further support a positive outlook. However, the lack of specific breakeven guidance tempers the sentiment slightly, keeping it in the positive range rather than strong positive.
Revenue Revenue set a record for the second consecutive quarter since we went public, reaching $27.6 million, an increase of 10% quarter-over-quarter. This was driven by continued strong marketplace performance, with both volume and mix contributing to the strong results.
Market-based revenues Market-based revenues were $18.6 million, up 16% from the first quarter. This increase was supported by a 9% rise in trading volume from $692 million to $756 million quarter-over-quarter.
Trading volume Trading volume increased 9% from $692 million to $756 million quarter-over-quarter. Trading volume in the first half of 2025 of $1.4 billion has already exceeded full year 2024 trading volume of $1.3 billion.
Net take rates Net take rates improved from 2.3% to 2.4% due to a more evenly distributed volume mix and fewer large block trades.
Custodial administration fees Custodial administration fees totaled $9.1 million, broadly flat from the last quarter. Custodial client cash balances were modestly lower at $440 million at the end of the quarter compared to $460 million at the end of Q1.
Adjusted EBITDA Adjusted EBITDA loss improved to $5.4 million from an $8.9 million loss in the prior quarter, a 39% improvement. This was driven by higher revenues and lower operating costs.
Operating expenses Total operating expenses decreased 3% quarter-over-quarter despite higher revenue-related costs. Excluding reorganization and acquisition costs, operating expenses would have improved 10% quarter-over-quarter.
Net loss Net loss on a GAAP basis was $16.6 million, slightly higher than the $16.2 million net loss in the previous quarter. This was due to higher changes in fair value of warrants, largely driven by an increase in share price.
Net cash used in operating activities Net cash used in operating activities was $7.8 million, down from $12.8 million last quarter. The decrease was primarily driven by changes in working capital, including the payment of annual bonuses in the first quarter.
Combined liquidity Combined liquidity, including short-term investments, was $81.8 million at June 30th compared to $93.1 million at March 31st. The decrease was due to share repurchases and other operational uses.
First half 2025 revenues Total revenues less transaction-based expenses for the first 6 months of 2025 were $52.7 million, an increase of 28% year-over-year. This reflects a significant acceleration in revenue growth compared to the 13% growth seen in 2024.
Adjusted EBITDA loss (first half 2025) Adjusted EBITDA loss improved by 33% in the first 6 months of 2025 versus the prior period. This improvement was driven by higher revenues and cost efficiencies.
Adjusted EPS Adjusted EPS improved 29% year-over-year in the first 6 months of 2025, reflecting better operational performance and cost management.
Next-generation marketplace: Launched to reduce friction and enable investors to transact with confidence and autonomy. Early engagement is encouraging.
Forge Price: Established as the industry's most trusted pricing standard, providing daily pricing for nearly 200 private companies. Partnerships with Yahoo Finance, ICE Data Services, and Fortune Media have been formed.
Investment vehicles: Developing a range of investment vehicles, including index-based strategies and diversified exposure funds. Planning to launch the first registered fund later this year.
Private market trends: Private companies are staying private longer, and there is growing demand for capital and liquidity solutions. Regulatory momentum is increasing to broaden retail access to private markets.
Private AI sector: AI thematic basket returned 63.1% year-to-date, outperforming public benchmarks. High-profile investments like Meta's $14.3 billion stake in Scale AI highlight strong interest.
Revenue growth: Achieved record revenue of $27.6 million in Q2 2025, a 10% increase from the prior quarter. Trading volume increased 9% quarter-over-quarter.
Cost efficiency: Adjusted EBITDA loss improved to $5.4 million from $8.9 million in the prior quarter. Operating expenses decreased by 3% quarter-over-quarter.
Acquisition of Accuidity: Closed acquisition to expand asset management and wealth capabilities, positioning Forge to offer diversified investment solutions.
Focus areas for H2 2025: Priorities include opening the market to new participants, expanding technology-enabled competitive edge, and executing with discipline to achieve adjusted EBITDA breakeven in 2026.
Private market positioning: Aiming to become the central nervous system of the private market by integrating trading, data, custody, and wealth into one platform.
Private companies staying private longer: The prolonged private status of companies limits liquidity events and IPO opportunities, potentially impacting Forge's trading volumes and revenue.
Narrow IPO window: A limited IPO market restricts exit opportunities for private companies, affecting Forge's ability to capitalize on trading and investment activities.
Regulatory uncertainties: While there is momentum for regulatory changes to broaden private market access, the timing and specifics of these changes remain uncertain, posing risks to Forge's strategic plans.
Dependence on transaction-based income: A significant portion of Forge's revenue is tied to transaction-based income, making it vulnerable to market volatility and unpredictable macroeconomic conditions.
Seasonality in revenue: Revenues in Q3 are generally lower than Q2 and Q4, which could lead to uneven financial performance and challenges in meeting growth targets.
Integration risks with Accuidity acquisition: The integration of Accuidity into Forge's operations may face challenges, potentially delaying the realization of expected synergies and benefits.
Macroeconomic unpredictability: Uncertain macroeconomic conditions could impact investor sentiment and trading volumes, affecting Forge's revenue and growth trajectory.
Operational scalability challenges: The transition to a more recurring revenue model and the offshoring of technology development may encounter execution risks, impacting operational efficiency and profitability.
Revenue Growth: Forge expects second half year-over-year organic revenue and adjusted EBITDA growth rates to continue in line with the year-over-year growth rates seen in the first half of 2025. Revenues in Q3 are generally lower than Q2 and Q4 due to seasonality.
Adjusted EBITDA Breakeven: The company remains on track to achieve adjusted EBITDA breakeven in 2026, supported by operational scalability from the next-generation marketplace, integration of the Accuidity acquisition, and cost efficiencies from offshoring technology development.
Investment Vehicles Launch: Forge plans to launch its first registered fund later in 2025, expanding access to private markets for retail and non-accredited investors. This is part of a broader strategy to develop investment vehicles, including index-based strategies and diversified exposure funds.
Private Market Trends: The private market is showing renewed strength with increased IPO activity and rising investor sentiment. Forge anticipates continued growth in private market engagement, driven by tighter bid-ask spreads, improved pricing signals, and differentiated exposure.
Technology and Platform Expansion: Forge is focused on evolving its next-generation marketplace to enhance user experience and expanding partnerships to amplify growth. The company aims to become the central platform for private market transactions, integrating trading, data, custody, and wealth solutions.
Share Repurchase: We repurchased approximately 315,000 shares at an average price of $13.15 per share during the quarter.
The earnings call showed improved financial metrics, such as a 28% increase in revenues and a 33% improvement in adjusted EBITDA loss, which are strong indicators of positive performance. Despite a net loss, the company has reduced cash used in operations and improved adjusted EPS by 29%. The cautious optimism in the Q&A and exploration of new partnerships in tokenization further support a positive outlook. However, the lack of specific breakeven guidance tempers the sentiment slightly, keeping it in the positive range rather than strong positive.
The earnings call shows strong financial performance with increased revenue and trading volume, improved EBITDA losses, and growth in custody accounts. The Q&A session highlights strategic initiatives in automation and blockchain, aligning with market trends. Despite uncertainties in IPO timing, the company is optimistic about 2025. Overall, the positive financial metrics, strategic vision, and growth potential suggest a positive stock price movement in the near term.
The earnings call reflects mixed signals: a slight revenue decline and ongoing losses contrast with optimistic future projections and a stock buyback program. Positive elements include improved EBITDA losses and strategic investments in automation and blockchain. However, unclear management responses in the Q&A and a lack of immediate catalysts, such as new partnerships or guidance changes, suggest limited short-term impact on stock price. The neutral sentiment is driven by balancing these factors.
The earnings call summary and Q&A suggest mixed financial performance with declining revenue and increasing losses. Despite optimistic guidance, there are concerns over macroeconomic factors, election uncertainty, and operational risks. The absence of a share buyback program and cautious investor sentiment further contribute to a negative outlook. The Q&A section did not provide significant positive insights, and management's lack of clarity on certain metrics adds to the uncertainty. Overall, the sentiment leans towards a negative stock price movement over the next two weeks.
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