• Total Revenue Less Transaction Based Expenses was $18.4 million in 3Q23
  • Trading Volume was $234.1 million in 3Q23
  • Net Take Rate was 3.0% in 3Q23
  • Forge Trust Custodial Cash was $518 million in 3Q23

Forge Global Holdings, Inc. (“Forge,” or the “Company”) (NYSE: FRGE), a leading provider of marketplace infrastructure, data services and technology solutions for private market participants, today announced its financial results for the third quarter ended September 30, 2023.

“In the third quarter, investors demonstrated a continued cautious return to the private market — which drove higher volumes and revenue in our markets business compared to both Q1 and Q2,” said Kelly Rodriques, CEO of Forge. “This improvement was observed for the third quarter even as continued concern over Fed actions and interest rates, as well as existing geopolitical conflicts served as a backdrop heading into the fourth quarter.”

Financial Highlights for the Third Quarter 2023

Forge believes that quarter-over-quarter comparisons are more indicative of the current state of the business. For year-ago-quarter comparisons, please reference the unaudited condensed consolidated financial statements in the Quarterly Report on Form 10-Q that will be filed on or around the date of this press release.

Revenue: Total revenue less transaction-based expenses was $18.4 million compared to $16.6 million in the quarter ended June 30, 2023.

Operating Loss: Total operating loss was $21.5 million compared to total operating loss of $22.6 million in the quarter ended June 30, 2023.

Net Loss: Net loss was $19.0 million compared to net loss of $25.1 million in the quarter ended June 30, 2023.

Adjusted EBITDA: Total adjusted EBITDA was a loss of $10.4 million compared to total adjusted EBITDA loss of $11.8 million in the quarter ended June 30, 2023.

Cash Flow from Operating Activities: Net cash used in operating activities was $3.5 million compared to $13.6 million in the quarter ended June 30, 2023.

Cash Flow from Investing Activities: Net cash used in investing activities was $0.5 million compared to net cash used in investing activities of $2.7 million in the quarter ended June 30, 2023.

Ending Cash Balance: Cash and cash equivalents as of September 30, 2023 was $155.1 million.

Share Count: Basic weighted-average number of shares used to compute net loss per share attributable to common stockholders for the quarter ended September 30, 2023, was 174 million shares and fully diluted outstanding share count as of September 30, 2023 was 198 million shares.

We estimate for the quarter ended December 31, 2023 that Forge will have 175.1 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 Third Quarter 2023

  • Trading Volume was $234.1 million, up 53% quarter-over-quarter.
  • Net Take Rate was 3.0%, down 19% quarter-over-quarter.
  • Total Placement Fee revenues, less transaction-based expenses, totaled $7.1 million, up 27% quarter-over-quarter.
  • Total Custodial Administration Fee revenues totaled $11.3 million, up 3% quarter-over-quarter.
  • Total Custodial Accounts increased from 1.97 million to 2.02 million, up 3% quarter-over-quarter.
  • Total Assets Under Custody decreased from $15.3 billion to $15.1 billion, down 1% quarter-over-quarter.

Additional Business Metrics for the Third Quarter 2023

  • Forge Trust Custodial Cash: Forge Trust Custodial Cash totaled $518 million, down 6% quarter-over-quarter.
  • Total Number of Companies with Indications of Interest (IOIs): The total number of companies with IOIs were 502, up 3% quarter-over-quarter.
  • Headcount: Forge finished out the quarter ended September 30, 2023 with a total headcount of 344, a decrease of 4% quarter-over-quarter.

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.

Webcast/Conference Call Details

Forge will host a webcast conference call today, November 7th, 2023, 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 (888) 440-4165 from the United States, or +1 (646) 960-0858 internationally. The conference ID is 5410143. The Supplemental Investor Information for this quarter is also posted on 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 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)

 

 

September 30, 2023

 

December 31, 2022

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

155,127

 

 

$

193,136

 

Restricted cash

 

1,299

 

 

 

1,829

 

Accounts receivable, net

 

3,871

 

 

 

3,544

 

Prepaid expenses and other current assets

 

10,148

 

 

 

8,379

 

Total current assets

$

170,445

 

 

$

206,888

 

Property and equipment, net

 

317

 

 

 

359

 

Internal-use software, net

 

5,023

 

 

 

7,640

 

Goodwill and other intangible assets, net

 

130,897

 

 

 

133,887

 

Operating lease right-of-use assets

 

3,379

 

 

 

5,706

 

Payment-dependent notes receivable, noncurrent

 

5,763

 

 

 

7,371

 

Other assets, noncurrent

 

1,696

 

 

 

1,878

 

Total assets

$

317,520

 

 

$

363,729

 

Liabilities, convertible preferred stock and stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

1,480

 

 

$

2,797

 

Accrued compensation and benefits

 

8,798

 

 

 

13,271

 

Accrued expenses and other current liabilities

 

8,121

 

 

 

6,421

 

Operating lease liabilities, current

 

2,300

 

 

 

3,896

 

Total current liabilities

$

20,699

 

 

$

26,385

 

Operating lease liabilities, noncurrent

 

2,002

 

 

 

3,541

 

Payment-dependent notes payable, noncurrent

 

5,763

 

 

 

7,371

 

Warrant liabilities

 

3,321

 

 

 

606

 

Other liabilities, noncurrent

 

185

 

 

 

365

 

Total liabilities

$

31,970

 

 

$

38,268

 

Commitments and contingencies

 

 

 

Stockholders’ equity:

 

 

 

Common stock, $0.0001 par value; 175,173,113 and 172,560,916 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

 

18

 

 

 

18

 

Additional paid-in capital

 

534,659

 

 

 

509,094

 

Accumulated other comprehensive loss

 

601

 

 

 

693

 

Accumulated deficit

 

(254,843

)

 

 

(190,418

)

Total Forge Global Holdings, Inc. stockholders’ equity

$

280,435

 

 

$

319,387

 

Noncontrolling Interest

 

5,115

 

 

 

6,074

 

Total stockholders’ equity

$

285,550

 

 

$

325,461

 

Total liabilities, convertible preferred stock and stockholders’ equity

$

317,520

 

 

$

363,729

 

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

 

Nine Months Ended

 

September 30,

2023

 

June 30,

2023

 

September 30,

2022

 

September 30,

2023

 

September 30,

2022

Revenues:

 

 

 

 

 

 

 

 

 

Placement fees

$

7,283

 

 

$

5,723

 

 

$

8,227

 

 

$

17,638

 

 

$

33,763

 

Custodial administration fees

 

11,280

 

 

 

10,997

 

 

 

7,673

 

 

 

33,124

 

 

 

18,799

 

Total revenues

$

18,563

 

 

$

16,720

 

 

$

15,900

 

 

$

50,762

 

 

$

52,562

 

Transaction-based expenses:

 

 

 

 

 

 

 

 

 

Transaction-based expenses

 

(148

)

 

 

(83

)

 

 

(86

)

 

 

(250

)

 

 

(397

)

Total revenues, less transaction-based expenses

$

18,415

 

 

$

16,637

 

 

$

15,814

 

 

$

50,512

 

 

$

52,165

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

27,650

 

 

 

25,154

 

 

 

44,040

 

 

 

78,566

 

 

 

115,064

 

Professional services

 

2,883

 

 

 

3,265

 

 

 

3,799

 

 

 

8,884

 

 

 

11,169

 

Acquisition-related transaction costs

 

 

 

 

 

 

 

821

 

 

 

 

 

 

5,219

 

Advertising and market development

 

910

 

 

 

876

 

 

 

928

 

 

 

2,463

 

 

 

3,873

 

Rent and occupancy

 

1,142

 

 

 

1,148

 

 

 

1,097

 

 

 

3,616

 

 

 

3,803

 

Technology and communications

 

3,763

 

 

 

3,475

 

 

 

3,536

 

 

 

10,628

 

 

 

8,368

 

General and administrative

 

1,870

 

 

 

3,525

 

 

 

2,601

 

 

 

8,143

 

 

 

7,373

 

Depreciation and amortization

 

1,710

 

 

 

1,747

 

 

 

1,428

 

 

 

5,246

 

 

 

4,531

 

Total operating expenses

$

39,928

 

 

$

39,190

 

 

$

58,250

 

 

$

117,546

 

 

$

159,400

 

Operating loss

$

(21,513

)

 

$

(22,553

)

 

$

(42,436

)

 

$

(67,034

)

 

$

(107,235

)

Interest and other income (expenses):

 

 

 

 

 

 

 

 

 

Interest income

 

1,725

 

 

 

1,319

 

 

 

874

 

 

 

4,553

 

 

 

1,161

 

Change in fair value of warrant liabilities

 

907

 

 

 

(3,790

)

 

 

25,210

 

 

 

(2,715

)

 

 

19,808

 

Other income (expenses), net

 

215

 

 

 

217

 

 

 

202

 

 

 

647

 

 

 

731

 

Total interest income and other income (expenses)

$

2,847

 

 

$

(2,254

)

 

$

26,286

 

 

$

2,485

 

 

$

21,700

 

Loss before provision for income taxes

$

(18,666

)

 

$

(24,807

)

 

$

(16,150

)

 

$

(64,549

)

 

$

(85,535

)

Provision for income taxes

 

291

 

 

 

293

 

 

 

48

 

 

 

769

 

 

 

206

 

Net loss

$

(18,957

)

 

$

(25,100

)

 

$

(16,198

)

 

$

(65,318

)

 

$

(85,741

)

Net loss attributable to noncontrolling interest

$

(609

)

 

$

(211

)

 

$

 

 

$

(893

)

 

$

 

Net loss attributable to Forge Global Holdings, Inc.

$

(18,348

)

 

$

(24,889

)

 

$

(16,198

)

 

$

(64,425

)

 

$

(85,741

)

Net loss per share attributable to Forge Global Holdings, Inc. common stockholders:

 

 

 

 

 

 

 

 

 

Basic

$

(0.11

)

 

$

(0.14

)

 

$

(0.10

)

 

$

(0.37

)

 

$

(0.64

)

Diluted

$

(0.11

)

 

$

(0.14

)

 

$

(0.12

)

 

$

(0.37

)

 

$

(0.66

)

Weighted-average shares used in computing net loss per share attributable to Forge Global Holdings, Inc. common stockholders:

 

 

 

 

 

 

 

 

 

Basic

 

173,957,880

 

 

 

173,289,549

 

 

 

169,838,778

 

 

 

173,045,721

 

 

 

134,683,950

 

Diluted

 

173,957,880

 

 

 

173,289,549

 

 

 

170,209,256

 

 

 

173,045,721

 

 

 

135,960,612

 

FORGE GLOBAL HOLDINGS, INC.

Unaudited Condensed Consolidated Statements of Cash Flows

(In thousands of U.S. dollars)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

2023

 

June 30,

2023

 

September 30,

2022

 

September 30,

2023

 

September 30,

2022

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net loss

$

(18,957

)

 

$

(25,100

)

 

$

(16,198

)

 

$

(65,318

)

 

$

(85,741

)

Adjustments to reconcile net loss including noncontrolling interest to net cash (used in) provided by operations:

 

 

 

 

 

 

 

 

 

Share-based compensation

 

9,233

 

 

 

8,809

 

 

 

26,712

 

 

 

25,443

 

 

 

45,974

 

Depreciation and amortization

 

1,711

 

 

 

1,747

 

 

 

1,428

 

 

 

5,247

 

 

 

4,531

 

Transaction expenses related to the Merger

 

 

 

 

 

 

 

 

 

 

 

 

 

3,132

 

Amortization of right-of-use assets

 

748

 

 

 

734

 

 

 

858

 

 

 

2,327

 

 

 

2,819

 

Loss on impairment of long lived assets

 

 

 

 

 

 

 

 

 

 

536

 

 

 

446

 

Allowance for doubtful accounts

 

358

 

 

 

49

 

 

 

25

 

 

 

529

 

 

 

294

 

Change in fair value of warrant liabilities

 

(907

)

 

 

3,790

 

 

 

(25,210

)

 

 

2,715

 

 

 

(19,808

)

Settlement of related party promissory notes

 

 

 

 

 

 

 

 

 

 

 

 

 

5,517

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

456

 

 

 

(1,448

)

 

 

(1,586

)

 

 

(857

)

 

 

2,042

 

Prepaid expenses and other assets

 

1,371

 

 

 

(2,227

)

 

 

2,678

 

 

 

1,590

 

 

 

(4,265

)

Accounts payable

 

(89

)

 

 

148

 

 

 

(1,886

)

 

 

(1,318

)

 

 

(43

)

Accrued expenses and other liabilities

 

723

 

 

 

1,691

 

 

 

1,584

 

 

 

2,011

 

 

 

402

 

Accrued compensation and benefits

 

3,042

 

 

 

(783

)

 

 

1,558

 

 

 

(4,472

)

 

 

(11,118

)

Operating lease liabilities

 

(1,236

)

 

 

(1,032

)

 

 

(1,361

)

 

 

(3,317

)

 

 

(3,942

)

Net cash used in operating activities

$

(3,547

)

 

$

(13,622

)

 

$

(11,398

)

 

$

(34,884

)

 

$

(59,760

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

(14

)

 

 

(28

)

 

 

(10

)

 

 

(113

)

 

 

(116

)

Purchases of intangible assets

 

 

 

 

 

 

 

(29

)

 

 

 

 

 

(126

)

Capitalized internal-use software development costs

 

 

 

 

 

 

 

(1,358

)

 

 

 

 

 

(4,590

)

Purchases of certificates of deposit

 

(515

)

 

 

(2,665

)

 

 

 

 

 

(3,180

)

 

 

 

Net cash used in investing activities

$

(529

)

 

$

(2,693

)

 

$

(1,397

)

 

$

(3,293

)

 

$

(4,832

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Proceeds from the Merger

 

 

 

 

 

 

 

 

 

 

 

 

 

7,865

 

Proceeds from PIPE investment and A&R FPA investors

 

 

 

 

 

 

 

 

 

 

 

 

 

208,500

 

Payments for offering costs

 

 

 

 

 

 

 

 

 

 

 

 

 

(56,852

)

Proceeds from exercise of Public Warrants

 

 

 

 

 

 

 

804

 

 

 

 

 

 

22,940

 

Proceeds from exercise of options, including proceeds from repayment of promissory notes

 

23

 

 

 

269

 

 

 

492

 

 

 

353

 

 

 

997

 

Taxes withheld and paid related to net share settlement of equity awards

 

 

 

 

 

 

 

 

 

 

(557

)

 

 

 

Formation of Forge Europe

 

 

 

 

 

 

 

9,488

 

 

 

 

 

 

9,488

 

Payments for redemption of Public Warrants

 

 

 

 

 

 

 

(165

)

 

 

 

 

 

(165

)

Net cash (used in) provided by financing activities

$

23

 

 

$

269

 

 

$

10,619

 

 

$

(204

)

 

$

192,773

 

Effect of changes in currency exchange rates on cash and cash

 

(333

)

 

 

(53

)

 

 

(159

)

 

 

(158

)

 

 

(159

)

Net (decrease) increase in cash and cash equivalents

 

(4,386

)

 

 

(16,099

)

 

 

(2,335

)

 

 

(38,539

)

 

 

128,022

 

Cash, cash equivalents and restricted cash, beginning of the period

 

160,812

 

 

 

176,911

 

 

 

206,761

 

 

 

194,965

 

 

 

76,404

 

Cash, cash equivalents and restricted cash, end of the period

$

156,426

 

 

$

160,812

 

 

$

204,426

 

 

$

156,426

 

 

$

204,426

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of cash, cash equivalents and restricted cash to the amounts reported within the consolidated balance sheets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

155,127

 

 

$

159,526

 

 

$

202,603

 

 

$

155,127

 

 

$

202,603

 

Restricted cash

 

1,299

 

 

 

1,286

 

 

 

1,823

 

 

 

1,299

 

 

 

1,823

 

Total cash, cash equivalents and restricted cash, end of the period

$

156,426

 

 

$

160,812

 

 

$

204,426

 

 

$

156,426

 

 

$

204,426

 

FORGE GLOBAL HOLDINGS, INC.

Reconciliation of GAAP to Non-GAAP Results

(In thousands of U.S. dollars)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

2023

 

June 30,

2023

 

September 30,

2022

 

September 30,

2023

 

September 30,

2022

Net loss

$

(18,957

)

 

$

(25,100

)

 

$

(16,198

)

 

$

(65,318

)

 

$

(85,741

)

Add:

 

 

 

 

 

 

 

 

 

Interest income (expense), net

 

(1,725

)

 

 

(1,319

)

 

 

(874

)

 

 

(4,553

)

 

 

(1,161

)

Provision for (benefit from) income taxes

 

291

 

 

 

293

 

 

 

48

 

 

 

769

 

 

 

206

 

Depreciation and amortization

 

1,710

 

 

 

1,747

 

 

 

1,428

 

 

 

5,246

 

 

 

4,531

 

Loss or impairment on long lived assets

 

 

 

 

 

 

 

 

 

 

536

 

 

 

446

 

Share-based compensation expense

 

9,233

 

 

 

8,809

 

 

 

26,712

 

 

 

25,443

 

 

 

45,974

 

Change in fair value of warrant liabilities

 

(907

)

 

 

3,790

 

 

 

(25,210

)

 

 

2,715

 

 

 

(19,808

)

Acquisition-related transaction costs (1)

 

 

 

 

 

 

 

821

 

 

 

 

 

 

5,219

 

Transaction bonus (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

17,735

 

Adjusted EBITDA

$

(10,355

)

 

$

(11,780

)

 

$

(13,273

)

 

$

(35,162

)

 

$

(32,599

)

(1)

Acquisition-related transaction costs represent charges involved in the merger between Forge Global, Inc. and Motive Capital Corp as further described in our Annual Report on Form 10-K for the year ended December 31, 2022 (the “Merger”), other business combinations, and strategic opportunities. These expenses include legal, accounting, and investment banking advisory services.

(2)

Represents a one-time transaction bonus to certain executives as a result of the consummation of the Merger.

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

 

Nine Months Ended

Dollars in thousands

September 30, 2023

 

June 30, 2023

 

September 30, 2022

 

September 30, 2023

 

September 30, 2022

TRADING BUSINESS

 

 

 

 

 

 

 

 

 

Trades

567

 

 

448

 

 

426

 

 

1,321

 

 

1,652

 

Volume

234,141

 

 

153,182

 

 

226,229

 

 

515,486

 

 

975,984

 

Net Take Rate

3.0

%

 

3.7

%

 

3.6

%

 

3.4

%

 

3.4

%

Placement fee revenues, less transaction-based expenses

7,135

 

 

5,640

 

 

8,141

 

 

17,388

 

 

33,366

 

  • Trades are defined as the total number of orders executed by us and acquired entities buying and selling private stocks on behalf of private investors and shareholders. Increasing the number of orders is critical to increasing our revenue and, in turn, to achieving profitability.
  • Volume is defined as the total sales value for all securities traded through our Forge Markets platform. Volume is defined as the aggregate value of the issuer company’s equity attributed to both the buyer and seller in a trade and as such a $100 trade of equity between buyer and seller would be captured as $200 volume for us. Although we typically capture a commission on each side of a trade, we may not in certain cases due to factors such as the use of an external broker by one of the parties or supply factors that would not allow us to attract sellers of shares of certain issuers. Volume is influenced by, among other things, the pricing and quality of our services as well as market conditions that affect private company valuations, such as increases in valuations of comparable companies at IPO.
  • Net Take Rates are defined as our placement fee revenues, less transaction-based expenses (as defined below), divided by Volume. These represent the percentage of fees earned by our marketplace on any transactions executed from the commission we charged on such transactions (less transaction-based expenses), which is a determining factor in our revenue. The Net Take Rate can vary based upon the service or product offering and is also affected by the average order size and transaction frequency. Transaction-based expenses represent fees incurred to support placement activities. These include, but are not limited to, those for fund management, fund and trade settlement, external broker fees and transfer fees.

 

 

As of

 

QoQ

 

YoY

Dollars in thousands

 

September 30,

2023

 

June 30,

2023

 

September 30,

2022

 

Change

 

% Change

 

Change

 

% Change

CUSTODY BUSINESS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Custodial Accounts

 

 

2,023,756

 

 

1,970,617

 

 

1,811,774

 

 

53,139

 

 

3

%

 

 

211,982

 

12

%

Assets Under Custody

 

$

15,148,480

 

$

15,299,816

 

$

14,967,314

 

$

(151,336

)

 

(1

)%

 

$

181,166

 

1

%

  • Total Custodial Accounts are defined as our direct customers’ existing or new custodial accounts that are funded, or unfunded accounts that are in the process of funding with active transfer activity on the account. These relate to our Custodial Administration fees revenue stream and are an important measure of our business as the number of Total Custodial Accounts is an indicator of our future revenues from certain account maintenance, transaction and sub-account fees.
  • Assets Under Custody is the reported value of all client holdings held under our agreements, including cash submitted to us by the responsible party. These assets can be held at various financial institutions, issuers and in our vault. As the custodian of the accounts, we collect all interest and dividends, handle all fees and transactions, and any other considerations for the assets concerned. Our fees are earned from the overall maintenance activities of all assets and are not charged on the basis of the dollar value of Assets Under Custody, but we believe that Assets Under Custody is a useful metric for assessing the relative size and scope of our business.

 

Investor Relations Contact: Dominic Paschel ir@forgeglobal.com

Media Contact: Lindsay Riddell press@forgeglobal.com

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