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 first quarter ended March 31, 2023.
Financial Highlights
- Revenue increased by 10%, to $24.1 million, in the first
quarter of 2023 from $21.9 million in the first quarter of
2022.
- Gross profit remained stable generating $11.6 million in the
first quarters of 2023 and 2022.
- Non-GAAP gross profit was $11.9 million in the first quarter of
2023 compared to $11.7 million in the first quarter of 2022.
- Gross margin was 48% in the first quarter of 2023 compared to
53% in the first quarter of 2022.
- Non-GAAP gross margin was 49% in the first quarter of 2023
compared to 54% in the first quarter of 2022.
- Net loss was $19.0 million in the first quarter of 2023,
compared to net profit of $4.2 million in the first quarter of
2022.
- Non-GAAP net loss was a loss of $13.3 million in the first
quarter of 2023, compared to a loss of $14.9 million in the first
quarter of 2022.
- Cash, cash equivalents, and short-term investments were $151.4
million as of March 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 under the heading “Non-GAAP
Financial Measures.”
“We have started the year strong with another record first
quarter revenues and the largest pipeline in our company’s history.
Demand for the Digital Forge grew across all geographies in Q1, as
an increasing number of manufacturers are choosing our metal and
composite solutions to solve mission-critical metal applications at
the point of need,” said Shai Terem, President and CEO of
Markforged. “We believe our Q1 results are a reflection of strong
execution of our strategy and an early indicator of the meaningful
opportunity for Markforged in the coming quarters as we remain
laser focused on margin expansion and driving profitable
growth.”
Business Highlights
- Robust Growth Globally. Demand for the Digital Forge
grew across all geographies in Q1, which was led by 26%
year-over-year growth in Markforged’s EMEA region. The company was
also encouraged by the strong pipeline buildup in the Americas,
which is the company’s biggest region by revenue.
- Demand For FX20 Grows. As manufacturers seek
production-grade solutions for their factory floors, revenue for
the FX20 continues to exceed the company’s expectations and the
pipeline of new orders continues to grow. Thanks to the diligent
work by Markforged’s engineering and operations teams, the costs to
produce the FX20 are declining, which is helping to drive
sequential gross margin expansion.
- Continuing To Build Operational Efficiencies. Markforged
remains laser focused on margin expansion and driving profitable
growth. GAAP Gross margins expanded sequentially, exceeding 48% in
the first quarter of 2023 and 49% on a non-GAAP basis, compared to
47% by both measures in the fourth quarter of 2022. Net cash used
in operating activities for the first quarter improved
year-over-year, with a decline of $3.7 million, or approximately
20%, compared to the first quarter of 2022. The company believes
the strength of its current balance sheet is sufficient to reach
profitability by the end of 2024.
- Moved Into New HQ. The end of Q1 marked the opening of
Markforged's new Global HQ in Massachusetts, bringing Engineering,
Operations and Product together under one roof with Sales,
Marketing and other functions. The new HQ, located at 60 Tower
Road, Waltham, boasts customized state-of-the-art R&D labs,
along with operations and customer experience labs and an enhanced
customer product demo room. The excitement and energy derived from
this modernized space and closer, in-person, collaboration is
expected to drive even more operational efficiencies over
time.
Guidance
Markforged is reiterating its full year 2023 guidance given
continued macro uncertainties. Revenues are expected to be within
the range of $101.0 million - $110.0 million. Markforged expects
fiscal year 2023 non-GAAP gross margin to remain in the range of
47% - 49% and the company is confident that gross margins will
continue to improve toward historical levels, longer-term. The
company continues to expect the cost disciplines it exerts over
operating expenses to result in a decline in 2023 operating
expenses as a percentage of revenue, compared to 2022. Non-GAAP
operating loss is expected to be in the range of $55.0 million -
$58.0 million for the year, a loss in the range of $0.27 - $0.29
per share.
Conference Call and Webcast Information
The Company will host a webcast and conference call at 5:00 p.m.
ET today, Thursday, May 11, 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 till
Thursday May 25, 2023, 11:59 PM ET by dialing 1-844-512-2921 or
1-412-317-6671, passcode 13737741.
About Markforged
Markforged (NYSE:MKFG) is enabling more resilient and flexible
supply chains 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 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.
Beginning with the fourth quarter of 2022, we modified the
presentation to remove the impact of the amortization of our
intangible assets. We use these metrics to provide an understanding
of the results of our core business performance and believe these
litigation and amortization costs are not indicative of the
performance of our core business’ operations. This change increases
“non-recurring costs'' by $0.6 million in the first quarter of
2022. The exclusion of amortization does not impact non-GAAP net
profit (loss) for the quarter ended March 31, 2022. 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.
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, 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 impact of
infrastructure investments; timing for achieving profitability; our
ability to fulfill orders for our products in a timely fashion in
the future; expected growth of the size of and opportunity to
increase our addressable market; the timing of launches and 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 March 31, 2023 and
December 31, 2022 (In thousands, except share data and par
value amounts) (Unaudited) March 31,2023
December 31,2022 Assets Current assets Cash and cash
equivalents
$
90,674
$
124,242
Short-term investments
60,756
43,690
Accounts receivable, net of allowance for expected credit losses
($768 and $971, respectively)
26,115
29,294
Inventory
29,272
26,409
Prepaid expenses
2,336
2,847
Other current assets
3,362
3,334
Total current assets
212,515
229,816
Property and equipment, net
19,122
18,298
Goodwill
31,190
31,116
Intangible assets
17,426
17,626
Right-of-use assets
44,591
45,955
Other assets
3,043
3,130
Total assets
$
327,887
$
345,941
Liabilities and Stockholders’ Equity Current liabilities
Accounts payable
$
10,515
$
14,425
Accrued expenses
11,459
9,663
Deferred revenue
9,174
8,854
Operating lease liabilities
7,979
8,022
Total current liabilities
39,127
40,964
Long-term deferred revenue
5,834
5,358
Deferred rent
—
—
Contingent earnout liability
1,607
2,415
Long-term operating lease liabilities
39,391
40,608
Other liabilities
3,867
4,042
Total liabilities
89,826
93,387
Commitments and contingencies Stockholders’ equity Common stock,
$0.0001 par value; 1,000,000,000 shares authorized at March 31,
2023 and December 31, 2022; 195,643,620 and 194,560,946 shares
issued and outstanding at March 31, 2023 and December 31, 2022,
respectively
19
19
Additional paid-in capital
356,982
352,564
Accumulated deficit
(120,116
)
(101,097
)
Accumulated other comprehensive income
1,176
1,068
Total stockholders’ equity
238,061
252,554
Total liabilities and stockholders’ equity
$
327,887
$
345,941
MARKFORGED HOLDING CORPORATION CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months
Ended March 31, 2023 and 2022 (In thousands, except share
data and per share data) (Unaudited) Three Months
Ended March 31,
2023
2022
Revenue
$
24,090
$
21,859
Cost of revenue
12,508
10,253
Gross profit
11,582
11,606
Operating expenses Sales and marketing
10,576
10,448
Research and development
10,380
10,567
General and administrative
12,128
11,743
Total operating expenses
33,084
32,758
Loss from operations
(21,502
)
(21,152
)
Change in fair value of warrant liabilities
189
693
Change in fair value of contingent earnout liability
808
24,896
Other expense
(204
)
(219
)
Interest income
1,691
20
Profit (loss) before income taxes
(19,018
)
4,238
Income tax benefit
1
(1
)
Net (loss) profit
$
(19,019
)
$
4,239
Weighted average shares outstanding - basic
195,369,245
186,383,312
Weighted average shares outstanding - diluted
195,369,245
191,100,683
Net profit (loss) per share - basic
$
(0.10
)
$
0.02
Net profit (loss) per share - diluted
(0.10
)
0.02
MARKFORGED HOLDING CORPORATION CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the Three Months Ended March 31, 2023 and 2022 (In
thousands) (Unaudited) Three Months Ended March
31,
2023
2022
Net (loss) profit
$
(19,019
)
$
4,239
Other comprehensive income, net of taxes: Unrealized (loss) on
available-for-sale marketable securities, net
(50
)
—
Foreign currency translation adjustment
158
—
Total comprehensive (loss) income
$
(18,911
)
$
4,239
MARKFORGED HOLDING CORPORATION RECONCILIATION OF
GAAP TO NON-GAAP MEASURES For the Three Months Ended March
31, 2023 and 2022 (In thousands) (Unaudited)
Three Months EndedMarch 31,
2023
2022
Net profit (loss) and comprehensive income (loss)
$
(19,019
)
$
4,239
Stock compensation expense
4,356
5,422
Change in fair value of warrant liabilities
(189
)
(693
)
Change in fair value of contingent earnout liability
(808
)
(24,896
)
Amortization
277
—
Non-recurring costs1
2,081
1,047
Non-GAAP net loss 2
$
(13,302
)
$
(14,881
)
1 Non-recurring costs primarily relate to litigation expenses. 2
Stock-based compensation expense, amortization, and non-recurring
costs were included in the following GAAP consolidated statement of
operations categories:
Three Months Ended March 31,
2023
2022
Cost of revenue
$
301
$
115
Sales and marketing
520
848
Research and development
1,147
1,419
General and administrative
4,746
4,087
Total operating expense
6,413
6,354
Total adjustments
$
6,714
$
6,469
MARKFORGED HOLDING
CORPORATION
DISAGGREGATED REVENUE BY NATURE OF PRODUCTS AND SERVICES
(In thousands) (Unaudited) Three Months Ended March
31, (in thousands)
2023
2022
Hardware
$
15,195
$
14,517
Consumables
6,455
5,456
Services
2,440
1,886
Total Revenue
$
24,090
$
21,859
MARKFORGED HOLDING CORPORATION
DISAGGREGATED REVENUE BY GEOGRAPHIC LOCATION (In
thousands) (Unaudited) Three Months Ended March 31,
(in thousands)
2023
2022
Americas
$
10,458
$
10,097
EMEA
$
8,492
$
6,719
APAC
$
5,140
$
5,043
Total Revenue
$
24,090
$
21,859
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230511005722/en/
Media Sam Manning, Public Relations Manager
sam.manning@markforged.com
Investors Austin Bohlig, Director of Investor Relations
investors@markforged.com
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