Markforged Announces First Quarter 2023 Results
WALTHAM, Mass. – 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.
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.”
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.
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.
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 http://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.
Sam Manning, Public Relations Manager
Austin Bohlig, Director of Investor Relations
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