Markforged Holding Corporation (NYSE: MKFG) (the “Company”), the
company strengthening manufacturing resiliency by enabling
industrial production at the point of need, today announced its
financial results for the first quarter ended March 31, 2024.
First Quarter 2024 Financial Results Compared To First
Quarter 2023
- Revenue was $20.5 million compared to $24.1 million.
- Gross margin was 49.3% compared to 48.1%.
- Non-GAAP gross margin was 51.3% compared to 49.3%.
- Operating expenses were $47.2 million, inclusive of a $17.3
million accrual related to the Continuous Composite judgment,
compared to $33.1 million.
- Non-GAAP operating expenses were $24.1 million compared to
$26.7 million.
- Net loss was $35.9 million compared to net loss of $19.0
million.
- Non-GAAP net loss was $12.2 million compared to a loss of $13.3
million.
- Cash and cash equivalents were $107.9 million as of March 31,
2024 compared to $116.9 million as of December 31, 2023.
Reconciliations of the non-GAAP financial measures provided in
this press release to their most directly comparable GAAP financial
measures are provided in the financial tables included at the end
of this press release. An explanation of these measures and how
they are calculated is also included below under the heading
“Non-GAAP Financial Measures.”
“We started 2024 with strong execution, setting a solid
foundation for the year ahead,” said Shai Terem, President and CEO
of Markforged. “While global capital expenditures on manufacturing
equipment have remained challenging, we met a pivotal milestone and
began shipping the FX10 in the first quarter. The market response
to our newest product has been very encouraging and we are
optimistic about the opportunities the FX10 will bring in the
second half as we accelerate deliveries. Additionally, we continued
to build operational efficiencies and adhere to our strong cost
controls to drive sustainable, long-term growth.”
Business Updates
- Shipping FX10: Markforged reached a pivotal
milestone in Q1 by shipping the FX10, Markforged’s next-generation
3D printer for the factory floor. The FX10 delivers high print
quality at print speeds that are nearly twice as fast and a print
volume that is up to twice as large as its predecessor the X7. The
initial market feedback has been encouraging as customers are
already printing mission critical parts for the factory floor.
Markforged’s pipeline for FX10s continues to grow, and the Company
remains on plan to accelerate deliveries in the coming
quarters.
- Improving Operational Efficiencies: Markforged
continues to build operational efficiencies and adhere to strong
cost controls. The Company was specifically encouraged by strong Q1
non-GAAP gross margin performance, which exceeded 51%, despite
lower revenues. Furthermore, driven by improving operational and
working capital efficiencies, net cash used in operating activities
was $7.4 million, an improvement of approximately 52% from the
first quarter of 2023.
- Exploring All Options Regarding Patent
Verdict: In April 2024, a jury found that Markforged had
infringed on one of the two patent claims of Continuous Composites
Inc. and awarded monetary damages in the amount of $17.3 million.
Markforged strongly disagrees with this verdict and intends to seek
to overturn the verdict in post-trial motions with the District
Court. Markforged is exploring all available options, including
seeking to overturn the resulting judgment through the appeals
process.
Markforged Announces New Director
Markforged announced the appointment of George Riedel to its
Board of Directors, effective May 7, 2024. Riedel brings extensive
executive leadership experience in global technology industries and
a proven track record in corporate strategy. Since November 2020,
he has served as Chair of the Board of Directors at Infinera
(Nasdaq: INFN) and as a Senior Lecturer in the General Management
Unit at Harvard Business School since 2017. From 2003 to 2017,
Riedel held various executive leadership roles across the
networking and cybersecurity sectors. He earned a B.S. in
Mechanical Engineering with distinction from the University of
Virginia and an MBA from Harvard Business School.
“We are thrilled to welcome George to our Board of Directors,”
said Shai Terem, President and CEO of Markforged. “We expect
George's extensive experience as a senior technology executive to
be instrumental in guiding Markforged's focus on building
shareholder value.”
2024 Financial Outlook
Markforged is reiterating its 2024 guidance provided at the
beginning of the year. The Company continues to anticipate fiscal
year 2024 revenues to be between $95 and $105 million, which
acknowledges the persistence of macroeconomic headwinds throughout
the year. Markforged expects revenues to grow mid-single digits
quarter-over-quarter in the second quarter, and continues to see an
opportunity for accelerated growth in the second half of the fiscal
year underpinned by new products, particularly the FX10. Markforged
expects non-GAAP gross margins to be within the range of 48% - 50%.
Non-GAAP operating loss is expected to be in the range of $42.5
million - $47.0 million for the year, resulting in a non-GAAP loss
per share in the range of $0.19 - $0.22 per share.
This guidance does not reflect any potential additional action
Continuous Composites may take, which may include seeking
additional relief through post-trial motions for royalty payments
on future revenue, as described in the Company’s press release
dated April 12, 2024.
Conference Call and Webcast Information
The Company will host a webcast and conference call at 5:00 p.m.
ET today, Wednesday, May 8, to discuss the results.
Participants may access the earnings press release, related
materials and the audio webcast by visiting the investors section
of the Company's website at
https://investors.markforged.com/
To participate in the call, please dial 1-877-407-9039 or
1-201-689-8470 ten minutes before the scheduled start.
For those unable to listen to the live conference call, a replay
will be available on the Company's website and telephonically until
Wednesday, May 22, 2024, 11:59 PM ET by dialing 1-844-512-2921 or
1-412-317-6671, passcode 13743011.
About Markforged
Markforged (NYSE:MKFG) is enabling more resilient and flexible
manufacturing by bringing industrial 3D printing right to the
factory floor. Our additive manufacturing platform The Digital
Forge allows manufacturers to create strong, accurate parts in both
metal and advanced composites. With over 10,000 customers in 70+
countries, we’re bringing on-demand industrial production to the
point of need. We are headquartered in Waltham, Mass where we
design the hardware, software and advanced materials that makes The
Digital Forge reliable and easy to use. To learn more, visit
www.markforged.com.
Non-GAAP Financial Measures
In addition to our financial results determined in accordance
with U.S. generally accepted accounting principles (“GAAP”), we
believe that each of non-GAAP gross margin, non-GAAP operating
profit (loss), non-GAAP net profit (loss) and non-GAAP earnings per
share, each a non-GAAP financial measure, is useful in evaluating
the performance of our business.
These non-GAAP measures have limitations as an analytical tool.
We do not, nor do we suggest that investors should, consider such
non-GAAP financial measures in isolation from, or as a substitute
for, financial information prepared in accordance with GAAP.
Investors should also note that the non-GAAP financial measures we
use may not be the same non-GAAP financial measures, and may not be
calculated in the same manner, as that of other companies,
including other companies in our industry.
We recommend that you review the reconciliation of these
non-GAAP measures to the most directly comparable GAAP financial
measures provided in the financial statement tables included below
in this press release, and that you not rely on any single
financial measure to evaluate our business. Additionally, to the
extent that forward-looking non-GAAP financial measures are
provided, they are presented on a non-GAAP basis without
reconciliations of such forward-looking non-GAAP measures due to
the inherent difficulty in forecasting and quantifying certain
amounts that are necessary for such reconciliations.
The following are the non-GAAP financial measures referenced in
this press release and presented in the tables below:
- Non-GAAP gross margin is defined as GAAP gross profit (loss),
less stock-based compensation expense, amortization, and certain
non-recurring costs, divided by revenue.
- Non-GAAP operating profit (loss) is defined as GAAP operating
profit (loss) less stock-based compensation expense, amortization,
and certain non-recurring costs.
- Non-GAAP net profit (loss) is defined as GAAP net profit (loss)
less stock-based compensation expense, net change in fair value of
warrant liabilities and contingent earnout liabilities,
amortization, and certain non-recurring costs.
- Non-GAAP earnings per share is defined as GAAP net profit
(loss) less stock-based compensation expense, net change in fair
value of warrant liabilities and contingent earnout liabilities,
amortization, and certain non-recurring costs, divided by diluted
weighted average shares outstanding for the period.
Special Note Regarding Forward-Looking
Statements
This press release contains forward-looking statements that are
based on beliefs and assumptions and on information currently
available. In some cases, you can identify forward-looking
statements by the following words: “may,” “will,” “could,” “would,”
“should,” “expect,” “intend,” “plan,” “strategy,” “anticipate,”
“believe,” “estimate,” “predict,” “project,” “potential,”
“continue,” “ongoing,” “opportunity” or the negative of these terms
or other comparable terminology, although not all forward-looking
statements contain these words. These statements involve risks,
uncertainties and other factors that may cause actual results,
levels of activity, performance or achievements to be materially
different from the information expressed or implied by these
forward-looking statements. Although Markforged believes that it
has a reasonable basis for each forward-looking statement contained
in this press release, Markforged cautions you that these
statements are based on a combination of facts and factors
currently known by it and its projections of the future, about
which it cannot be certain. Forward-looking statements in this
press release include, but are not limited to, future growth rate,
revenue, gross profit margin and earnings guidance; the
contributions of our directors; the timing of launches and the rate
and extent of adoption of our products, including, but not limited
to, our most recently introduced products and the FX10; market
trends in the manufacturing industry; the duration and impact of
macroeconomic factors; the benefits to consumers, functionality and
applications of Markforged’s products; statements regarding our
expectations concerning any impact to our business, balance sheet
and cost structure; any potential post-trial motions and appeal
related to the Continuous Composites litigation; our disagreement
with the Continuous Composites verdict; and our intention to
challenge the Continuous Composites judgment. Markforged cannot
assure you that the forward-looking statements in this press
release will prove to be accurate. These forward looking statements
are subject to a number of risks and uncertainties, including,
among others, general economic, political and business conditions;
the ability of Markforged to maintain its listing on the New York
Stock Exchange; outcome of any legal proceedings against
Markforged; and those factors discussed under the header “Risk
Factors” in Markforged’s most recent periodic and other filings
with the SEC. Furthermore, if the forward-looking statements prove
to be inaccurate, the inaccuracy may be material. In light of the
significant uncertainties in these forward-looking statements, you
should not regard these statements as a representation or warranty
by us or any other person that Markforged will achieve its
objectives and plans in any specified time frame, or at all. The
forward-looking statements in this press release represent
Markforged’s views as of the date of this press release. Markforged
anticipates that subsequent events and developments will cause its
views to change. However, while Markforged may elect to update
these forward-looking statements at some point in the future,
Markforged has no current intention of doing so except to the
extent required by applicable law. You should, therefore, not rely
on these forward-looking statements as representing Markforged’s
views as of any date subsequent to the date of this press
release.
MediaSam Manning, Public Relations
Managersam.manning@markforged.com
InvestorsAustin Bohlig, Director of Investor
Relationsinvestors@markforged.com
MARKFORGED
HOLDING CORPORATION |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
As of March
31, 2024 and December 31, 2023 |
(In
thousands, except share data and par value amounts)
(Unaudited) |
|
|
|
|
|
|
|
March 31, 2024 |
|
December 31, 2023 |
Assets |
|
|
Current
assets |
|
|
Cash and cash equivalents |
|
$ |
107,924 |
|
|
$ |
116,854 |
|
Accounts
receivable, net of allowance for expected credit losses ($271 and
$360, respectively) |
|
|
21,493 |
|
|
|
24,059 |
|
Inventory |
|
|
23,792 |
|
|
|
26,773 |
|
Prepaid
expenses |
|
|
3,328 |
|
|
|
2,756 |
|
Other
current assets |
|
|
1,733 |
|
|
|
2,022 |
|
Total
current assets |
|
|
158,270 |
|
|
|
172,464 |
|
Property and
equipment, net |
|
|
17,893 |
|
|
|
17,713 |
|
Intangible
assets, net |
|
|
15,924 |
|
|
|
17,128 |
|
Right-of-use
assets |
|
|
35,809 |
|
|
|
36,884 |
|
Other
assets |
|
|
3,734 |
|
|
|
3,763 |
|
Total
assets |
|
$ |
231,630 |
|
|
$ |
247,952 |
|
Liabilities and Stockholders’ Equity |
|
|
Current
liabilities |
|
|
Accounts
payable |
|
$ |
11,877 |
|
|
$ |
13,235 |
|
Accrued
expenses |
|
|
12,451 |
|
|
|
9,840 |
|
Litigation
judgment payable |
|
|
17,300 |
|
|
|
— |
|
Deferred
revenue |
|
|
9,609 |
|
|
|
8,779 |
|
Lease
liabilities |
|
|
7,316 |
|
|
|
7,368 |
|
Other
current liabilities |
|
|
1,500 |
|
|
|
1,526 |
|
Total
current liabilities |
|
|
60,053 |
|
|
|
40,748 |
|
Long-term
deferred revenue |
|
|
5,457 |
|
|
|
6,083 |
|
Contingent
earnout liability |
|
|
1,540 |
|
|
|
1,379 |
|
Long-term
lease liabilities |
|
|
34,647 |
|
|
|
35,771 |
|
Other
liabilities |
|
|
2,030 |
|
|
|
2,361 |
|
Total
liabilities |
|
|
103,727 |
|
|
|
86,342 |
|
Commitments
and contingencies |
|
|
|
|
Stockholders’ equity |
|
|
|
|
Common
stock, $0.0001 par value; 1,000,000,000 shares authorized at March
31, 2024 and December 31, 2023; 199,399,503 and 198,581,263 shares
issued and outstanding at March 31, 2024 and December 31, 2023,
respectively |
|
|
19 |
|
|
|
19 |
|
Additional
paid-in capital |
|
|
369,561 |
|
|
|
366,281 |
|
Accumulated
deficit |
|
|
(240,610 |
) |
|
|
(204,664 |
) |
Accumulated
other comprehensive income |
|
|
(1,067 |
) |
|
|
(26 |
) |
Total
stockholders’ equity |
|
|
127,903 |
|
|
|
161,610 |
|
Total
liabilities and stockholders’ equity |
|
$ |
231,630 |
|
|
$ |
247,952 |
|
|
|
|
|
|
MARKFORGED
HOLDING CORPORATION |
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS |
For the
Three Months Ended March 31, 2024 and 2023 |
(In
thousands, except share data and per share data)
(Unaudited) |
|
|
|
|
|
Three Months Ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
Revenue |
|
20,547 |
|
|
|
24,090 |
|
Cost of
revenue |
|
10,414 |
|
|
|
12,508 |
|
Gross
profit |
|
10,133 |
|
|
|
11,582 |
|
Operating expenses |
|
|
|
Sales and
marketing |
|
7,844 |
|
|
|
10,576 |
|
Research and
development |
|
9,935 |
|
|
|
10,380 |
|
General and
administrative |
|
12,165 |
|
|
|
12,128 |
|
Litigation
judgment |
|
17,300 |
|
|
|
— |
|
Total
operating expenses |
|
47,244 |
|
|
|
33,084 |
|
Loss
from operations |
|
(37,111 |
) |
|
|
(21,502 |
) |
Change in
fair value of derivative liabilities |
|
31 |
|
|
|
189 |
|
Change in
fair value of contingent earnout liability |
|
(161 |
) |
|
|
808 |
|
Other
expense, net |
|
(135 |
) |
|
|
(204 |
) |
Interest
expense |
|
(154 |
) |
|
|
— |
|
Interest
income |
|
1,400 |
|
|
|
1,691 |
|
Loss
before income taxes |
|
(36,130 |
) |
|
|
(19,018 |
) |
Income tax
(benefit) expense |
|
(184 |
) |
|
|
1 |
|
Net
loss |
$ |
(35,946 |
) |
|
$ |
(19,019 |
) |
Weighted
average shares outstanding - basic and diluted |
|
199,290,500 |
|
|
|
195,369,245 |
|
Net loss per
share - basic and diluted |
$ |
(0.18 |
) |
|
$ |
(0.10 |
) |
|
|
|
|
MARKFORGED
HOLDING CORPORATION |
CONDENSED
CONSOLIDATED STATEMENTS OF |
COMPREHENSIVE INCOME (LOSS) |
For the
Three Months Ended March 31, 2024 and 2023 |
(In
thousands) |
|
|
|
|
|
Three Months Ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
Net
loss |
$ |
(35,946 |
) |
|
$ |
(19,019 |
) |
Other
comprehensive loss, net of taxes: |
|
|
|
Unrealized
loss on available-for-sale marketable securities, net |
|
— |
|
|
|
(50 |
) |
Foreign
currency translation adjustment |
|
(1,041 |
) |
|
|
158 |
|
Total comprehensive loss |
$ |
(36,987 |
) |
|
$ |
(18,911 |
) |
|
|
|
|
MARKFORGED
HOLDING CORPORATION |
DISAGGREGATED REVENUE BY NATURE OF PRODUCTS AND
SERVICES |
(In
thousands) (Unaudited) |
|
|
Three Months Ended March 31, |
(in
thousands) |
|
2024 |
|
2023 |
Hardware |
|
$ |
11,274 |
|
$ |
15,195 |
Consumables |
|
|
6,404 |
|
|
6,455 |
Services |
|
|
2,869 |
|
|
2,440 |
Total
Revenue |
|
$ |
20,547 |
|
$ |
24,090 |
|
|
|
|
|
|
|
|
|
|
MARKFORGED
HOLDING CORPORATION |
DISAGGREGATED REVENUE BY GEOGRAPHIC LOCATION |
(In
thousands) (Unaudited) |
|
|
Three Months Ended March 31, |
(in
thousands) |
|
2024 |
|
2023 |
Americas |
|
$ |
10,095 |
|
$ |
10,458 |
EMEA |
|
|
6,335 |
|
|
8,492 |
APAC |
|
|
4,117 |
|
|
5,140 |
Total
Revenue |
|
$ |
20,547 |
|
$ |
24,090 |
|
|
|
|
|
MARKFORGED
HOLDING CORPORATION |
RECONCILIATION OF GAAP TO NON-GAAP MEASURES |
(In
thousands) (Unaudited) |
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
Net
loss |
|
$ |
(35,946 |
) |
|
$ |
(19,019 |
) |
Stock
compensation expense |
|
|
3,461 |
|
|
|
4,356 |
|
Change in
fair value of derivative liabilities |
|
|
(31 |
) |
|
|
(189 |
) |
Change in
fair value of contingent earnout liability |
|
|
161 |
|
|
|
(808 |
) |
Amortization |
|
|
378 |
|
|
|
277 |
|
Litigation
judgment |
|
|
17,300 |
|
|
|
— |
|
Non-recurring costs1 |
|
|
2,446 |
|
|
|
2,081 |
|
Non-GAAP net
loss |
|
$ |
(12,231 |
) |
|
$ |
(13,302 |
) |
|
|
|
|
|
1Non-recurring costs incurred during the three months ended March
31, 2024 and 2023 relate to litigation expense. |
|
|
|
Three Months Ended March 31, |
Non-GAAP Cost of Revenue |
|
|
2024 |
|
|
|
2023 |
|
Cost of
revenue |
|
$ |
10,414 |
|
|
$ |
12,508 |
|
Stock
compensation expense |
|
|
49 |
|
|
|
73 |
|
Amortization |
|
|
357 |
|
|
|
228 |
|
Non-GAAP
Cost of Revenue |
|
|
10,008 |
|
|
|
12,207 |
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
Non-GAAP Gross Profit |
|
|
2024 |
|
|
|
2023 |
|
Gross
profit |
|
$ |
10,133 |
|
|
$ |
11,582 |
|
Stock
compensation expense |
|
|
49 |
|
|
|
73 |
|
Amortization |
|
|
357 |
|
|
|
228 |
|
Non-GAAP
gross profit |
|
|
10,539 |
|
|
|
11,883 |
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
Non-GAAP Sales and Marketing Expenses |
|
|
2024 |
|
|
|
2023 |
|
Sales and
marketing expenses |
|
$ |
7,844 |
|
|
$ |
10,576 |
|
Stock
compensation expense |
|
|
405 |
|
|
|
475 |
|
Amortization |
|
|
21 |
|
|
|
49 |
|
Non-GAAP
sales and marketing expenses |
|
|
7,418 |
|
|
|
10,052 |
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
Non-GAAP Research and Development Expenses |
|
|
2024 |
|
|
|
2023 |
|
Research and
development expenses |
|
$ |
9,935 |
|
|
$ |
10,380 |
|
Stock
compensation expense |
|
|
1,100 |
|
|
|
1,147 |
|
Non-GAAP
research and development expenses |
|
|
8,835 |
|
|
|
9,233 |
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
Non-GAAP General and Administrative Expenses |
|
|
2024 |
|
|
|
2023 |
|
General and
administrative expenses |
|
$ |
12,165 |
|
|
$ |
12,128 |
|
Stock
compensation expense |
|
|
1,907 |
|
|
|
2,661 |
|
Non-recurring costs1 |
|
|
2,446 |
|
|
|
2,081 |
|
Non-GAAP
general and administrative expenses |
|
|
7,812 |
|
|
|
7,386 |
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
Non-GAAP Operating Loss |
|
|
2024 |
|
|
|
2023 |
|
Operating
loss |
|
$ |
(37,111 |
) |
|
$ |
(21,502 |
) |
Stock
compensation expense |
|
|
3,461 |
|
|
|
4,356 |
|
Amortization |
|
|
378 |
|
|
|
277 |
|
Litigation
judgment |
|
|
17,300 |
|
|
|
— |
|
Non-recurring costs1 |
|
|
2,446 |
|
|
|
2,081 |
|
Non-GAAP
operating loss |
|
|
(13,526 |
) |
|
|
(14,788 |
) |
|
|
|
|
|
1Non-recurring costs incurred during the three months ended March
31, 2024 and 2023 relate to litigation expense. |
|
|
|
|
|
Markforged (NYSE:MKFG)
Historical Stock Chart
From Apr 2024 to May 2024
Markforged (NYSE:MKFG)
Historical Stock Chart
From May 2023 to May 2024