Forum Markets (FRMM) Q3 2026 earnings review
Forum Markets leases more aircraft engines, but delays cut its sales plan
Forum Markets, which leases jet engines and develops artificial intelligence computing sites, delayed its computing rollout and cut its 2026 sales plan. Third-quarter revenue of $2 million came entirely from five leased aircraft engines, while a $14 million paper gain on cryptocurrency created a headline net profit. Chairman and chief executive officer McAndrew Rudisill lowered the full-year revenue outlook to $8–9 million, which by our math leaves $2.3 million for the fourth quarter.
| Revenue | $2.0M +46% from last quarter; −51% from a year ago |
|---|---|
| Operating loss | −$7.1M excluding a $13.9M crypto paper gain in net income |
| Cash and marketable securities | $15.4M down from $48.1M last quarter |
| Full-year 2026 revenue outlook | Cut 58% to $8–9M from $18–22M previously |
⚖️ Verdict: 🔴 Bearish
The story got worse because the artificial intelligence computing deals that were supposed to provide half of this year's sales will now bring in zero revenue in 2026. Rising equipment and borrowing costs forced Forum to slow its hardware purchases just as engine deals drained cash and securities down to $15 million. One positive: the expanded five-engine fleet lifted quarterly lease sales by nearly half from the second quarter.
The question now is whether Forum can fund and sign enough computing contracts to reach its $125–175 million revenue target for 2027. Either customers pay large upfront deposits to cover the expensive hardware, or financing costs keep the capacity unbuilt. Signed contract announcements for the Dallas and North Carolina sites will settle it.
🐂 Bull Case
Leased Aircraft Engines Carry All Current Revenue
Forum Markets, which buys and leases commercial jet engines and finances artificial intelligence equipment, relies entirely on aviation for its current sales. During the third quarter, the Florida company spent $23.7 million to buy two more commercial aircraft engines, bringing its fleet to five engines on long-term leases with two major US airlines.
Those leases generated all $2.0 million of third-quarter revenue, lifting sales 46.4% from the second quarter's $1.4 million. Property and equipment on the balance sheet rose from $17.6 million in June to $41.8 million in September because of the new engines, and the fleet will provide most of the fourth quarter's sales.
What to watch: fourth-quarter revenue against the $2.3 million implied by our math from the full-year outlook. A higher reading would show the two newest engines are contributing a full quarter of rent.
Share Buybacks Retired Over a Third of Shares
Forum spent much of 2026 buying back and cancelling its own stock rather than buying income-producing assets. Since January, management has repurchased and retired about 7.4 million shares for $33.2 million. That reduced the basic weighted-average share count by 11.1% from the second quarter, down to 15.2 million shares.
The pace slowed in the third quarter, when the asset manager bought back about 330,000 shares for $1.9 million, compared with 7.1 million shares in the prior period. Each remaining share now owns a larger slice of the engine fleet, though $19.8 million remains on the repurchase authorization.
What to watch: fourth-quarter share repurchase spending in the full-year cash flow statement. Another small figure would confirm management is saving its remaining cash for artificial intelligence equipment rather than buybacks.
🐻 Bear Case
Compute Delays Force a 58% Revenue Outlook Cut
"The midterm elections significantly disrupted an already tightening AI compute market, accelerating rising costs for equipment, compute and financing," chairman and chief executive officer McAndrew Rudisill said. Rudisill added that demand for the company's data center capacity is strong and that "The question is not whether we can contract our capacity."
Despite that demand claim, Forum cut its full-year 2026 revenue plan from $18–22 million to $8–9 million, a 57.5% reduction at the middle of the range by our math. Last quarter, management expected its new computing hardware—graphics processing units (GPUs) rented out for artificial intelligence tasks—to generate roughly half of this year's sales.
Instead, the group chose to "slow the pace of deployment of its initial AI compute capacity in response to rapidly rising compute pricing, equipment costs and financing costs". It will record no computing revenue at all in 2026, yet kept its 2027 revenue target at $125–175 million.
What to watch: signed customer contracts for the Dallas and North Carolina data center sites. Until Forum locks in customer deposits and equipment financing for those locations, the 2027 revenue target remains unbacked by operating hardware.
Crypto Paper Gains Mask Continuing Operating Losses
Forum reported $7.9 million in third-quarter net income and $12.8 million in Adjusted EBITDA, a profit measure that excludes interest, taxes, depreciation and stock pay. Earlier this year, management sold most of its cryptocurrency holdings to focus on physical assets and said large cryptocurrency price swings were behind it.
- Non-cash digital asset fair-value gain: $13.9 million included in both net income and Adjusted EBITDA
- Adjusted EBITDA excluding the crypto gain: a loss of $1.1 million by our math
- Selling, general and administrative overhead: $8.7 million, or 435% of revenue by our math
- Operating loss before other income: $7.1 million on $2.0 million of revenue
Because overhead costs of $8.7 million—including $2.7 million in stock pay and $6.0 million in cash expenses by our math—far exceeded the $1.6 million gross profit from engine leases, the core business lost money. The headline profit came entirely from higher market prices on its remaining $35.5 million cryptocurrency pile.
What to watch: quarterly selling, general and administrative expense excluding stock pay. That cash overhead must fall, or lease revenue must triple, before the operating business can break even on its own.
Cash Balances Shrank Before the Compute Buildout
Buying two jet engines and funding operations drained most of Forum's liquid reserves during the quarter. Cash, cash equivalents and marketable securities fell 68.0% by our math, dropping from $48.1 million at the end of June to $15.4 million at the end of September, with just $3.2 million in pure cash.
At the same time, $26.0 million of loans backed by cryptocurrency collateral moved into current liabilities, meaning they are due within a year, bringing total current liabilities to $30.4 million against $16.0 million of current assets. That leaves little cash on hand to buy artificial intelligence hardware without outside debt or customer deposits.
What to watch: the mix of upfront customer deposits and equipment debt when the first compute deals close. High upfront deposits are now required because Forum cannot fund hardware purchases from its own cash balance.
👓 Other Themes
New Joint Venture Targets Existing Powered Sites
"Over the past three months, we established our AI infrastructure platform through our Forum Edge AI joint venture and made it the primary focus of our capital and our growth," Rudisill said. Formed in October with partner Edge Node, the venture plans to "deploy high-performance GPU compute capacity across existing powered data centers and communications tower sites" to spend less upfront capital than building new facilities.
💲 Other KPIs
Loans receivable—short-term and long-term financing Forum provides to borrowers in housing, auto and infrastructure—grew 21.2% from the second quarter by our math. The portfolio started from zero at the end of 2025, reached $11.5 million in March and $17.2 million in June, and now includes $6.9 million due within one year.
Cryptocurrency holdings on the balance sheet rose 64.1% from the second quarter's $21.6 million by our math, reversing two quarters of sales that had lowered the balance from $61.6 million at year-end 2025. The increase came from a $13.9 million non-cash gain as crypto market prices rose during the third quarter.
Stockholders' equity—total assets of $166.8 million minus total liabilities of $30.4 million—increased from $127.8 million in the second quarter, though it remains down from $239.4 million at the end of 2025. Third-quarter paper gains on cryptocurrency lifted book value faster than operating cash burn and $1.9 million in share buybacks reduced it.
🔮 Guidance
Cut. The middle of the full-year range dropped by $11.5 million, or 57.5% by our math, to $8.5 million. By our math, that leaves about $2.3 million of revenue for the fourth quarter, up 14.0% from the third quarter and down 6.5% from a year ago. Management cut the plan for the second time this year—following a $2 million trim in the first quarter—after pushing all artificial intelligence computing revenue out of 2026.
Maintained in dollar terms, which is higher than the 50% to 100% growth target shown in second-quarter materials. At the $150 million middle of the range, the plan calls for revenue to jump more than seventeen-fold from the new 2026 target, or 1,665% by our math. Reaching it depends on contracting the Dallas and North Carolina sites and finalizing customer deposits and equipment debt.
❓ Key Questions
What happened to the Special Committee's strategic review?
Last quarter, management said the board's Special Committee had made advanced progress evaluating strategic alternatives and promised shareholders a meaningful update before the third-quarter call. The earnings release did not mention the committee or the review once.
Why did remaining buyback capacity drop to $19.8 million?
In the second quarter, Forum said its board extended and resized the share repurchase program to $100 million through June 2027, leaving over $90 million available. After spending $1.9 million in the third quarter, the release now states only $19.8 million remains.
How does the Fireworks deal affect 2027 revenue timing?
A link at the bottom of the release mentions a $94.4 million computing agreement between Forum Edge AI and Fireworks, yet the release body says Forum is still discussing terms and revising or terminating existing contracts. Investors need the start date and deposit terms.
Did the Liquidity.io trading upgrade launch as planned?
In the first two quarters of 2026, management highlighted its 15% stake in Satschel and the planned second-half upgrade of the Liquidity.io digital asset exchange. The third-quarter release dropped all mention of tokenization, Liquidity.io and assets under management.