Markforged Holding Corporation (NYSE: MKFG) (the “Company”), the
company strengthening manufacturing resiliency by enabling
industrial production at the point of need, today announced its
results from the third quarter ended September 30, 2022.
Financial Highlights
- Revenue increased by 5%, to $25.2 million, in the third quarter
of 2022 from $24.0 million in the third quarter of 2021.
- Gross margin was 48.6% in the third quarter of 2022 compared to
57.0% in the third quarter of 2021.
- Non-GAAP gross margin was 49.1% in the third quarter of 2022
compared to 57.6% in the third quarter of 2021.
- Net loss was $23.0 million in the third quarter of 2022,
compared to net profit of $21.7 million in the third quarter of
2021.
- Non-GAAP net loss was $15.2 million in the third quarter of
2022, compared to a loss of $11.7 million in the third quarter of
2021.
- GAAP earnings per share was a loss of $0.12 for the third
quarter of 2022, compared to income of $0.13 in the third quarter
of 2021.
- Non-GAAP earnings per share was a loss of $0.08 for the third
quarter of 2022, compared to a loss of $0.07 in the third quarter
of 2021.
- Cash and cash equivalents were $181.8 million as of September
30, 2022.
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 under the heading “Non-GAAP
Financial Measures.”
“Despite a challenging macro environment, we delivered another
solid quarter as demand for The Digital Forge continues to grow
globally. Ongoing supply chain challenges continue to be a catalyst
for demand for our Digital Forge platform which brings industrial
production to the point of need,” said Shai Terem, President and
CEO of Markforged. “Excitement for our newest production-grade
printer, the FX20, has been tremendous, and we are pleased to have
expanded our addressable market by adding high volume metal
application capabilities to our technology offerings with the
closing of the Digital Metal acquisition. While challenges
including inflation, geopolitical tensions and supply chain
disruption are putting near-term pressure on our margins, we are
confident in our long term strong fundamentals, which are supported
by our growing pipeline and market opportunity.”
Business Highlights
- Robust FX20 demand. Markforged’s newest production-grade
printer the FX20 is generating unprecedented excitement and orders
continue to exceed the company’s expectation as manufacturers seek
solutions to make their supply chains more resilient and flexible.
However, as supply chain challenges continued globally, Markforged
was not able to meet the demand for the FX20 and the cost of
production of the FX20 exceeded our estimates.
- Addressable market expansion with metals technology. The
company completed the acquisition of Digital Metal in the third
quarter. The addition of this new metal binder jetting technology
expands Markforged’s addressable market into the mass production of
end-use metal parts. Demand is building in automotive, luxury
goods, medical and MIM applications.
- Strength in the APAC region. In the Americas and EMEA,
inflation and geopolitical pressures continued to impact the
company’s business, as macroeconomic uncertainty led businesses to
delay purchase decisions. However, the APAC region met the
company’s expectations for significant growth in the second half of
2022. Revenue in APAC grew 51% during the nine months ended
September 30, 2022 compared to the same period in 2021, and 82%
during the three months ended September 30, 2022 compared to the
same period in 2021, led by strong demand for mature products and
accelerated demand for the FX20.
- Operating leverage from tight cost controls. Strong cost
controls allowed Markforged to see sequential operating leverage
and deliver on its EPS target in Q3. The company reorganized its
go-to-market team and reprioritized initiatives with the potential
for the greatest impact on profitable growth. These cost controls
resulted in a strong balance sheet that the company anticipates
will keep it on the path to profitability in 2024.
2022 Guidance
Markforged is updating its full-year 2022 financial guidance to
reflect its updated fiscal year outlook, which considers the
current market conditions. The Company anticipates revenue for the
fourth quarter to be in the range of $28 - $32 million which, at
the midpoint, would result in 2022 full year revenue near the lower
end of the range the Company provided previously. Non-GAAP gross
margin in the fourth quarter is anticipated to be in the range of
48% - 50%, which equates to full year 2022 non-GAAP gross margin
within the range of 50% - 52%. Non-GAAP operating loss in the
fourth quarter is expected to be in the range of $13.2 - $14.7
million, which equates to full year 2022 non-GAAP operating loss in
the range of $61 - $62.5 million for the year. Non-GAAP earning per
share results for the fourth quarter are expected to be a loss in
the range of $0.06 - $0.07 per share, which equates to full year
2022 non-GAAP earning per share results to be a loss in the range
of $0.31 - $0.32 per share, based on the outstanding share count of
approximately 193.6 million shares.
Conference Call and Webcast Information
The Company will host a webcast and conference call at 5:00 p.m.
ET today, Wednesday, November 9, 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 1-800-954-0692, or
1-212-231-2907 for international participants, 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
through Wednesday, November 23, 2022 by dialing 1-844-512-2921
(U.S. domestic) or 1-412-317-6671 (International), passcode
152520.
About Markforged
Markforged (NYSE:MKFG) is making manufacturing more resilient
and flexible by bringing on-demand industrial production to the
point of need. The Markforged Digital Forge – the reliable,
intelligent and easy-to-use additive manufacturing platform –
empowers any manufacturer to create robust end-use parts in both
metal and composites anywhere and anytime. Over 10,000 customers
across 70+ countries use The Digital Forge to overcome limitations
of traditional manufacturing while strengthening their supply
chains. Markforged is headquartered in Watertown, Mass., where it
designs the hardware, software and materials that powers its
platform. 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 non-GAAP gross margin, non-GAAP operating 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.
Investors should note that beginning with the second quarter of
2022, we have modified the presentation of “non-recurring costs”
included in non-GAAP gross margin, non-GAAP operating profit
(loss), non-GAAP net profit (loss) and non-GAAP earnings per share
metrics to include certain non-recurring litigation costs. We use
these metrics to provide an understanding of the results of its
core business performance and believe these non-recurring
litigation costs are reflective of one-time expenses that are not
indicative of the performance of our core business’ operations.
This change increases “non-recurring costs” by $0.6 million, $1.0
million, and $0.8 million in the first through third quarters of
2022, respectively, and by $3.7 million, $0.9 million, and $2.3
million in the first through third quarters of 2021, respectively.
To conform to the current period’s presentation, we have included
non-recurring litigation costs as “non-recurring costs” when
presenting the foregoing non-GAAP figures for the year to date
period and periods presented for 2021.
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 operating profit
(loss), less stock-based compensation expense 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 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, 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,
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; timing for
achieving profitability; our ability to fulfill orders for our
products in a timely fashion in the future; expected growth, the
size of and opportunity to increase our addressable market; the
anticipated benefits of the acquisition of Digital Metal, the rate
and extent of adoption of our products, including, but not limited
to, our most recently introduced products; market trends in the
manufacturing industry; the effects of macroeconomic factors; and
the benefits to consumers, functionality and applications of
Markforged’s products. 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;
the effect of COVID-19 on Markforged’s business and financial
results; the 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.
MARKFORGED HOLDING
CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
As of September 30, 2022 and
December 31, 2021
(In thousands, except share
data and par value amounts) (Unaudited)
September 30, 2022
December 31, 2021
Assets
Current assets
Cash and cash equivalents
$
181,805
$
288,603
Accounts receivable, net
30,135
26,777
Inventory
24,561
10,377
Prepaid expenses
3,647
3,921
Other current assets
2,918
511
Total current assets
243,066
330,189
Property and equipment, net
13,409
6,349
Goodwill
31,249
—
Intangible assets
15,377
—
Right-of-use assets
45,615
—
Other assets
3,150
776
Total assets
$
351,866
$
337,314
Liabilities and Stockholders’
Equity
Current liabilities
Accounts payable
$
10,792
$
11,403
Accrued expenses
9,878
7,411
Deferred revenue
6,781
6,288
Operating lease liabilities
7,778
—
Other current liabilities
21
310
Total current liabilities
35,250
25,412
Long-term deferred revenue
4,535
3,742
Deferred rent
—
1,623
Contingent earnout liability
8,740
59,722
Long-term operating lease liabilities
40,333
—
Other liabilities
4,944
2,646
Total liabilities
93,802
93,145
Commitments and contingencies
Stockholders’ equity
Common stock, $0.0001 par value;
1,000,000,000 shares authorized at September 30, 2022 and December
31, 2021; 193,643,855 and 185,993,058 shares issued and outstanding
at September 30, 2022 and December 31, 2021, respectively
19
19
Additional paid-in capital
350,022
319,859
Accumulated deficit
(90,365
)
(75,709
)
Accumulated other comprehensive income
(loss)
(1,612
)
—
Total stockholders’ equity
258,064
244,169
Total liabilities and stockholders’
equity
$
351,866
$
337,314
MARKFORGED HOLDING
CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
For the Three and Nine Months
Ended September 30, 2022 and 2021
(In thousands, except share
data and per share data) (Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Revenue
$
25,208
$
24,045
$
71,294
$
64,584
Cost of revenue
12,959
10,330
34,514
26,729
Gross profit
12,249
13,715
36,780
37,855
Operating expenses
Sales and marketing
11,783
10,399
35,104
25,711
Research and development
10,421
9,761
31,375
21,487
General and administrative
12,873
15,935
38,094
32,770
Total operating expenses
35,077
36,095
104,573
79,968
Loss from operations
(22,828
)
(22,380
)
(67,793
)
(42,113
)
Change in fair value of warrant
liabilities
(448
)
1,418
1,221
170
Change in fair value of contingent earnout
liability
(656
)
42,710
50,982
42,710
Other expense
(39
)
(48
)
(429
)
(168
)
Interest expense
(2
)
(6
)
(11
)
(15
)
Interest income
1,006
6
1,380
9
Profit (loss) before income
taxes
(22,967
)
21,700
(14,650
)
593
Income tax benefit
3
(3
)
6
(1
)
Net profit (loss)
$
(22,970
)
$
21,703
$
(14,656
)
$
594
Weighted average shares outstanding -
basic
189,766,945
162,942,990
188,225,543
81,373,265
Weighted average shares outstanding -
diluted
189,766,945
167,091,320
188,225,543
85,407,166
Net profit (loss) per share - basic
$
(0.12
)
$
0.13
$
(0.08
)
$
0.01
Net profit (loss) per share - diluted
(0.12
)
0.13
(0.08
)
0.01
MARKFORGED HOLDING
CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS) For the three and nine months
ended September 30, 2022 and 2021 (In thousands)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Net income (loss)
$
(22,970
)
$
21,703
$
(14,656
)
$
594
Other comprehensive loss, net of
taxes:
Foreign currency translation
adjustment
(1,612
)
—
(1,612
)
—
Total comprehensive income (loss), net
of taxes of $0
$
(24,582
)
$
21,703
$
(16,268
)
$
594
MARKFORGED HOLDING
CORPORATION
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
For the Three and Nine Months
Ended September 30, 2022 and 2021
(In thousands)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Net profit (loss) and comprehensive income
(loss)
$
(22,970
)
$
21,703
$
(14,656
)
$
594
Stock compensation expense
5,286
8,424
15,620
11,395
Change in fair value of warrant
liabilities
448
(1,418
)
(1,221
)
(170
)
Change in fair value of contingent earnout
liability
656
(42,710
)
(50,982
)
(42,710
)
Non-recurring costs1
1,427
2,329
4,411
6,962
Non-GAAP net loss 2
$
(15,153
)
$
(11,672
)
$
(46,828
)
$
(23,929
)
1Non-recurring costs primarily relate to transaction and
litigation expenses. 2Stock-based compensation expense and
non-recurring costs were included in the following GAAP
consolidated statement of operations categories:
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Cost of revenue
$
130
$
129
$
347
$
218
Sales and marketing
917
856
2,540
1,176
Research and development
1,326
2,043
4,317
2,768
General and administrative
4,340
7,725
12,827
14,195
Total operating expense
6,583
10,624
19,684
18,139
Total adjustments
$
6,713
$
10,753
$
20,031
$
18,357
MARKFORGED HOLDING
CORPORATION
NON-GAAP
RECONCILIATION
THREE MONTHS ENDED SEPTEMBER
30, 2022 AND 2021
(In thousands, except share
data and per share data) (Unaudited)
Three Months Ended September
30, 2022
Three Months Ended September
30, 2021
GAAP
Adjustments
Non-GAAP
GAAP
Adjustments
Non-GAAP
Revenue
$
25,208
—
$
25,208
$
24,045
—
$
24,045
Cost of revenue
12,959
(130
)
12,829
10,330
(129
)
10,201
Gross profit
12,249
130
12,379
13,715
129
13,844
Operating expenses
Sales and marketing
11,783
(917
)
10,866
10,399
(856
)
9,543
Research and development
10,421
(1,326
)
9,095
9,761
(2,043
)
7,718
General and administrative
12,873
(4,340
)
8,533
15,935
(7,725
)
8,210
Total operating expenses
35,077
(6,583
)
28,494
36,095
(10,624
)
25,471
Loss from operations
(22,828
)
6,713
(16,115
)
(22,380
)
10,753
(11,627
)
Change in fair value of warrant
liabilities
(448
)
448
—
1,418
(1,418
)
—
Change in fair value of contingent earnout
liability
(656
)
656
—
42,710
(42,710
)
—
Other expense
(39
)
—
(39
)
(48
)
—
(48
)
Interest expense
(2
)
—
(2
)
(6
)
—
(6
)
Interest income
1,006
—
1,006
6
—
6
Profit (loss) before income
taxes
(22,967
)
7,817
(15,150
)
21,700
(33,375
)
(11,675
)
Income tax (benefit) expense
3
—
3
(3
)
—
(3
)
Net profit (loss) and comprehensive
income (loss)
$
(22,970
)
7,817
$
(15,153
)
$
21,703
(33,375
)
$
(11,672
)
Weighted average shares outstanding -
basic
189,766,945
189,766,945
162,942,990
162,942,990
Weighted average shares outstanding -
diluted
189,766,945
189,766,945
167,091,320
167,091,320
Net profit (loss) per share - basic
$
(0.12
)
$
(0.08
)
$
0.13
$
(0.07
)
Net profit (loss) per share - diluted
(0.12
)
(0.08
)
0.13
(0.07
)
MARKFORGED HOLDING
CORPORATION
NON-GAAP
RECONCILIATION
NINE MONTHS ENDED SEPTEMBER
30, 2022 AND 2021
(In thousands, except share
data and per share data) (Unaudited)
Nine Months Ended September
30, 2022
Nine Months Ended September
30, 2021
GAAP
Adjustments
Non-GAAP
GAAP
Adjustments
Non-GAAP
Revenue
$
71,294
—
$
71,294
$
64,584
—
$
64,584
Cost of revenue
34,514
(347
)
34,167
26,729
(218
)
26,511
Gross profit
36,780
347
37,127
37,855
218
38,073
Operating expenses
Sales and marketing
35,104
(2,540
)
32,564
25,711
(1,176
)
24,535
Research and development
31,375
(4,317
)
27,058
21,487
(2,768
)
18,719
General and administrative
38,094
(12,827
)
25,267
32,770
(14,195
)
18,575
Total operating expenses
104,573
(19,684
)
84,889
79,968
(18,139
)
61,829
Loss from operations
(67,793
)
20,031
(47,762
)
(42,113
)
18,357
(23,756
)
Change in fair value of warrant
liabilities
1,221
(1,221
)
—
170
(170
)
—
Change in fair value of contingent earnout
liability
50,982
(50,982
)
—
42,710
(42,710
)
—
Other expense
(429
)
—
(429
)
(168
)
—
(168
)
Interest expense
(11
)
—
(11
)
(15
)
—
(15
)
Interest income
1,380
—
1,380
9
—
9
Profit (loss) before income
taxes
(14,650
)
(32,172
)
(46,822
)
593
(24,523
)
(23,930
)
Income tax (benefit) expense
6
—
6
(1
)
—
(1
)
Net profit (loss) and comprehensive
income (loss)
$
(14,656
)
(32,172
)
$
(46,828
)
$
594
(24,523
)
$
(23,929
)
Weighted average shares outstanding -
basic
188,225,543
188,225,543
81,373,265
81,373,265
Weighted average shares outstanding -
diluted
188,225,543
188,225,543
85,407,166
85,407,166
Net profit (loss) per share - basic
$
(0.08
)
$
(0.25
)
$
0.01
$
(0.29
)
Net profit (loss) per share - diluted
(0.08
)
(0.25
)
0.01
(0.28
)
MARKFORGED HOLDING
CORPORATION
DISAGGREGATED REVENUE BY
NATURE OF PRODUCTS AND SERVICES
(In thousands)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
(in thousands)
2022
2021
2022
2021
Hardware
$
17,571
$
17,469
$
48,098
$
46,039
Consumables
5,568
4,899
16,913
14,295
Services
2,069
1,677
6,283
4,250
Total Revenue
$
25,208
$
24,045
$
71,294
$
64,584
MARKFORGED HOLDING
CORPORATION
DISAGGREGATED REVENUE BY
GEOGRAPHIC LOCATION
(In thousands)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
(in thousands)
2022
2021
2022
2021
Americas
$
12,591
$
14,937
$
34,150
$
35,169
EMEA
$
5,353
$
5,118
$
19,618
$
17,804
APAC
$
7,264
$
3,990
$
17,526
$
11,611
Total Revenue
$
25,208
$
24,045
$
71,294
$
64,584
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221109005946/en/
Media Kellie Woods, Media Relations Manager
markforged@pancomm.com Investors Austin Bohlig, Director of
Investor Relations investors@markforged.com
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