Forge Global Holdings, Inc. Navigates Challenging Macroeconomic Environment

Forge Global Holdings, Inc., a leading financial services platform, has released its financial results for the year ended December 31, 2024. Despite facing a complex macroeconomic landscape, the company demonstrated resilience and strategic adaptability, positioning itself for continued growth in the private markets.

Macroeconomic Environment Impacts Investor Behavior

The overall macroeconomic environment, including factors such as interest rates, market volatility, and uncertainty around asset valuations, has had a significant influence on investor behavior and risk appetites. These factors have impacted both individual and institutional investors, as well as businesses, in their engagement with the private markets.

Notably, the company’s cash administration fees, which make up the largest portion of its custodial administration fee revenue, are directly tied to prevailing interest rates and client cash balances. As the Federal Reserve adjusted interest rates over the course of 2024, the company experienced a 5% decline in custodial administration fees compared to the previous year.

Revenue and Take Rate Trends

Despite the challenging macroeconomic conditions, Forge Global Holdings reported a 13% increase in total revenues, less transaction-based expenses, reaching $78.7 million for the year ended December 31, 2024, compared to $69.4 million in the prior year.

This growth was primarily driven by a 46% increase in marketplace revenue, which reached $37.5 million. The company attributes this surge to a 73% increase in trading volume, reflecting the continued demand for private market investments. However, the net take rate, which represents the percentage of fees earned by the company’s marketplace on transactions, declined by 50 basis points to 2.8%.

The company’s custodial administration fees, on the other hand, decreased by 5% to $41.8 million, largely due to the lower interest rate environment and declining cash balances held by clients.

Operational Efficiency and Cost Management

Forge Global Holdings has demonstrated a focus on operational efficiency and cost management, as evidenced by the 12% decrease in other operating expenses, excluding non-recurring charges, to $47.9 million.

The company’s efforts to resolve legacy legal matters and implement cost containment initiatives resulted in significant savings across various expense categories, including a $3.5 million reduction in professional services, a $1.9 million decrease in third-party software engineering costs, and a $1.3 million decline in liability insurance expenses.

These savings were partially offset by increases in advertising and market development expenses, as well as travel costs, as the company shifted towards a hybrid work model and increased in-person activities.

Strengthening the Balance Sheet and Liquidity Position

As of December 31, 2024, Forge Global Holdings maintained a strong liquidity position, with $105.1 million in cash and cash equivalents. The company believes this cash balance, along with its operating cash flows, will be sufficient to meet its working capital and capital expenditure requirements for the next 12 months and the foreseeable future.

In March 2025, the company’s board of directors approved a $10 million share repurchase program, demonstrating its confidence in the long-term prospects of the business and commitment to enhancing shareholder value.

Segment Performance and Key Business Metrics

Forge Global Holdings operates as a single operating segment, with the Chief Executive Officer serving as the chief operating decision maker. The company monitors several key business metrics to assess the performance of its marketplace and custody solutions.

In the marketplace segment, the company reported a 57% increase in the number of trades and a 73% increase in trading volume, reflecting the growing demand for private market investments. However, the net take rate declined by 15%, primarily due to changes in the mix of transactions and product offerings.

In the custody solution segment, the company saw a 14% increase in total custodial accounts and an 8% increase in assets under custody. However, custodial administration fees, less transaction-based expenses, declined by 5%, driven by the lower interest rate environment.

Outlook and Future Opportunities

Despite the challenges posed by the macroeconomic environment, Forge Global Holdings remains optimistic about its long-term growth prospects. The company is focused on aligning its headcount with current and future business needs, while continuing to invest in product development, sales efforts, and general and administrative costs to support its growth as a public company.

The company believes its integrated platform of complementary solutions, which cater to the distinct needs of investors, shareholders, and companies, will continue to drive strong platform-based network effects and fuel participation in the private markets. As the company navigates the evolving market conditions, it remains committed to delivering value to its clients and shareholders.

Conclusion

Forge Global Holdings has demonstrated its resilience and adaptability in the face of a complex macroeconomic landscape. While the company experienced some headwinds in its custodial administration fees, its marketplace business continued to thrive, driven by increased trading volume and demand for private market investments.

The company’s focus on operational efficiency, cost management, and strengthening its balance sheet has positioned it well to navigate the current challenges and capitalize on future growth opportunities in the private markets. As Forge Global Holdings continues to innovate and expand its integrated platform, it remains poised to play a pivotal role in democratizing access to the private markets.