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 second quarter ended June 30, 2023.
Financial Highlights
- Revenue increased by 5%, to $25.4 million, in the second
quarter of 2023 from $24.2 million in the second quarter of
2022.
- Gross profit was $12.0 million in the second quarter of 2023
compared to $12.9 million in the second quarter of 2022.
- Non-GAAP gross profit was $12.3 million in the second quarter
of 2023 compared to $13.0 million in the second quarter of
2022.
- Gross margin was 47% in the second quarter of 2023 compared to
53% in the second quarter of 2022.
- Non-GAAP gross margin was 48% in the second quarter of 2023
compared to 54% in the second quarter of 2022.
- Net loss was $19.0 million in the second quarter of 2023,
compared to net profit of $4.1 million in the second quarter of
2022.
- Non-GAAP net loss was a loss of $12.5 million in the second
quarter of 2023, compared to a loss of $16.8 million in the second
quarter of 2022.
- Cash, cash equivalents, and short-term investments were $136.0
million as of June 30, 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 continue to execute on our long term strategy to grow
through innovation and bring industrial production to the point of
need. Demand for our solution is growing globally as our customers
identify more and more opportunities to cut costs, save time, and
reduce physical inventories while building efficiencies to their
own production lines,” said Shai Terem, President and CEO of
Markforged. “With our upcoming new platforms and capabilities, we
are confident in our ability to accelerate our growth in 2024. We
also continue to prudently manage our costs, keeping us on a firm
path to profitability.”
Business Highlights
- Demand Grows Globally. Demand for The Digital Forge
continued to grow globally in Q2, even in the face of the high cost
of capital environment which is restricting capital expense
investments. As such, while conversions to close deals are still
challenging in the short term, Markforged is confident in its
longer term growth projection, especially with upcoming product
releases.
- Significant Tier 1 Automotive Win. In Q2, Markforged
completed a very important and strategic transaction with a global
automotive leader to drive flexibility and cost savings by reducing
their reliance on physical inventory. The sale included a fleet of
both advanced composite printers and metal systems as part of a
multi-year strategic initiative. This win exemplifies how
Markforged’s platform of hardware, materials and software, and
growing distributed network of printers, are uniquely positioned to
proactively capitalize on the growing market opportunity for point
of need industrial production.
- Building Operational Efficiencies. Markforged remains
focused on building operational efficiencies and driving margin
expansion in pursuit of profitable, sustainable growth. Non-GAAP
gross margins are tracking toward the upper end of 2023 guidance
while Markforged remains on track to achieve full production scale
for the FX20. The company continues to focus on prudently managing
operating expenses, which were down 11% year-over-year on a
non-GAAP basis and on finding additional working capital
efficiencies. These efforts helped lower Markforged’s year-to-date
cash burn from operations by 26% year-over-year.
- More Innovation To Accelerate Growth. For the last two
years, Markforged has been hard at work on multiple new product
innovations that accelerate production at the point of need and
increase its addressable market. Markforged has plans for multiple
new and exciting product introductions in the second half of 2023
which further enhance their current platform and should contribute
to accelerating growth in 2024.
Guidance
Markforged is maintaining its revenue guidance to be within the
range of $101.0 million - $110.0 million. In accordance with
similar seasonality trends within its industry, Markforged
anticipates Q3 revenues to be mostly in-line with Q2 and expects
revenues to see the typical end of year ramp up in Q4.
Considering our strong execution in the first half of the year,
Markforged now believes that there is more opportunity for non-GAAP
gross margins to be within the mid to upper range of our guidance
of 47% - 49%, for fiscal year 2023. Furthermore, the company is
confident that non-GAAP gross margins will continue to improve
toward historical levels that are above 50% in 2024 and beyond.
Markforged plans to continue its disciplined approach to
operating expenses and as such, expects operating expenses for
fiscal year 2023 to decline as a percentage of revenue as well as
in absolute terms year-over-year, resulting in a lower expected
operating loss in the range of $54.0 - $57.0 million. Accordingly,
EPS loss per share is expected to be in the range of $0.25 -
$0.27.
Conference Call and Webcast Information
The Company will host a webcast and conference call at 5:00 p.m.
ET today, Thursday, August 10, 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
Thursday, August 24, 2023, 11:59 PM ET by dialing 1-844-512-2921 or
1-412-317-6671, passcode 13737742.
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 increased
“non-recurring costs'' by $0.6 million in the first quarter of
2022. The exclusion of amortization impacts non-GAAP net profit
(loss) by $5.0 thousand for the quarter ended June 30, 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 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 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 June 30, 2023 and December 31, 2022
(In thousands, except share data and par value amounts)
(Unaudited)
June 30,
2023
December 31,
2022
Assets Current assets Cash and cash equivalents
$
85,658
$
124,242
Short-term investments
50,390
43,690
Accounts receivable, net of allowance for expected credit losses
($183 and $1,559, respectively)
27,096
29,294
Inventory
29,606
26,409
Prepaid expenses
981
2,847
Other current assets
3,290
3,334
Total current assets
197,021
229,816
Property and equipment, net
18,366
18,298
Goodwill
30,238
31,116
Intangible assets
16,632
17,626
Right-of-use assets
39,270
45,955
Other assets
3,340
3,130
Total assets
$
304,867
$
345,941
Liabilities and Stockholders’ Equity Current liabilities
Accounts payable
$
11,641
$
14,425
Accrued expenses
7,920
9,663
Deferred revenue
8,757
8,854
Operating lease liabilities
7,815
8,022
Other current liabilities
53
—
Total current liabilities
36,186
40,964
Long-term deferred revenue
5,764
5,358
Contingent earnout liability
2,422
2,415
Long-term operating lease liabilities
38,155
40,608
Other liabilities
3,283
4,042
Total liabilities
85,810
93,387
Commitments and contingencies Stockholders’ equity Common stock,
$0.0001 par value; 1,000,000,000 shares authorized at June 30, 2023
and December 31, 2022; 196,880,964 and 194,560,946 shares issued
and outstanding at June 30, 2023 and December 31, 2022,
respectively
19
19
Additional paid-in capital
358,645
352,564
Accumulated deficit
(139,104
)
(101,097
)
Accumulated other comprehensive income
(503
)
1,068
Total stockholders’ equity
219,057
252,554
Total liabilities and stockholders’ equity
$
304,867
$
345,941
MARKFORGED HOLDING CORPORATION CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS For the Three and Six Months Ended
June 30, 2023 and 2022 (In thousands, except share data and
per share data) (Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Revenue
$
25,449
$
24,227
$
49,539
$
46,086
Cost of revenue
13,476
11,302
25,984
21,555
Gross profit
11,973
12,925
23,555
24,531
Operating expenses Sales and marketing
9,666
12,873
20,242
23,321
Research and development
10,286
10,387
20,666
20,954
General and administrative
12,120
13,478
24,248
25,221
Total operating expenses
32,072
36,738
65,156
69,496
Loss from operations
(20,099
)
(23,813
)
(41,601
)
(44,965
)
Change in fair value of warrant liabilities
125
976
314
1,669
Change in fair value of contingent earnout liability
(817
)
26,742
(7
)
51,638
Other expense
(16
)
(171
)
(222
)
(390
)
Interest expense
(116
)
(9
)
(116
)
(9
)
Interest income
1,577
354
3,268
374
(Loss) profit before income taxes
(19,346
)
4,079
(38,364
)
8,317
Income tax expense (benefit)
(358
)
4
(357
)
3
Net (loss) profit
$
(18,988
)
$
4,075
$
(38,007
)
$
8,314
Weighted average shares outstanding - basic
196,372,157
188,102,342
195,873,471
187,247,566
Weighted average shares outstanding - diluted
196,372,157
188,876,763
195,873,471
188,329,331
Net profit (loss) per share - basic
$
(0.10
)
$
0.02
$
(0.19
)
$
0.04
Net profit (loss) per share - diluted
(0.10
)
0.02
(0.19
)
0.04
MARKFORGED HOLDING CORPORATION CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS) For the
Three and Six Months Ended June 30, 2023 and 2022 (In
thousands) (Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net (loss) profit
$
(18,988
)
$
4,075
$
(38,007
)
$
8,314
Other comprehensive income, net of taxes: Unrealized gain (loss) on
available-for-sale marketable securities, net
25
—
(25
)
—
Foreign currency translation adjustment
(1,704
)
—
(1,546
)
—
Total comprehensive (loss) income
$
(20,667
)
$
4,075
$
(39,578
)
$
8,314
MARKFORGED HOLDING CORPORATION DISAGGREGATED REVENUE BY
NATURE OF PRODUCTS AND SERVICES (In thousands)
(Unaudited) Three Months Ended June 30, Six Months
Ended June 30, (in thousands)
2023
2022
2023
2022
Hardware
$
16,506
$
16,011
$
31,701
$
30,527
Consumables
6,482
5,889
12,937
11,345
Services
2,461
2,327
4,901
4,214
Total Revenue
$
25,449
$
24,227
$
49,539
$
46,086
MARKFORGED HOLDING CORPORATION DISAGGREGATED
REVENUE BY GEOGRAPHIC LOCATION (In thousands)
(Unaudited) Three Months Ended June 30, Six Months
Ended June 30, (in thousands)
2023
2022
2023
2022
Americas
$
11,982
$
11,462
$
22,440
$
21,559
EMEA
$
7,618
$
7,545
$
16,110
$
14,265
APAC
$
5,849
$
5,220
$
10,989
$
10,262
Total Revenue
$
25,449
$
24,227
$
49,539
$
46,086
MARKFORGED HOLDING CORPORATION RECONCILIATION OF GAAP TO
NON-GAAP MEASURES For the Three and Six Months Ended June
30, 2023 and 2022 (In thousands) (Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Net (loss) profit
$
(18,988
)
$
4,075
$
(38,007
)
$
8,314
Stock compensation expense
1,690
4,912
6,046
10,334
Change in fair value of warrant liabilities
(125
)
(976
)
(314
)
(1,669
)
Change in fair value of contingent earnout liability
817
(26,742
)
7
(51,638
)
Amortization
254
5
531
5
Non-recurring costs1
3,812
1,937
5,893
2,984
Non-GAAP net loss
$
(12,540
)
$
(16,789
)
$
(25,844
)
$
(31,670
)
1Non-recurring costs primarily relate to long-lived asset
impairment, litigation expenses, and transaction costs.
Three Months Ended
June 30,
Six Months Ended
June 30,
Non-GAAP Cost of Revenue
2023
2022
2023
2022
Cost of revenue
$
13,476
$
11,302
$
25,984
$
21,555
Stock compensation expense
89
102
162
217
Amortization
218
5
446
5
Non-GAAP Cost of Revenue
13,169
11,195
25,376
21,333
Three Months Ended
June 30,
Six Months Ended
June 30,
Non-GAAP Gross Profit
2023
2022
2023
2022
Gross profit
$
11,973
$
12,925
$
23,555
$
24,531
Stock compensation expense
89
102
162
217
Amortization
218
5
446
5
Non-GAAP gross profit
12,280
13,032
24,163
24,753
Three Months Ended
June 30,
Six Months Ended
June 30,
Non-GAAP Sales and Marketing Expenses
2023
2022
2023
2022
Sales and marketing expenses
$
9,666
$
12,873
$
20,242
$
23,321
Stock compensation expense
499
775
975
1,624
Amortization
36
—
85
—
Non-GAAP sales and marketing expenses
9,131
12,098
19,182
21,697
Three Months Ended
June 30,
Six Months Ended
June 30,
Non-GAAP Research and Development Expenses
2023
2022
2023
2022
Research and development expenses
$
10,286
$
10,387
$
20,666
$
20,954
Stock compensation expense
1,160
1,572
2,329
2,991
Non-GAAP research and development expenses
9,126
8,815
18,337
17,963
Three Months Ended
June 30,
Six Months Ended
June 30,
Non-GAAP General and Administrative Expenses
2023
2022
2023
2022
General and administrative expenses
$
12,120
$
13,478
$
24,248
$
25,221
Stock compensation expense
(58
)
2,463
2,580
5,502
Non-recurring costs1
3,812
1,937
5,893
2,984
Non-GAAP general and administrative expenses
8,366
9,078
15,775
16,735
1Non-recurring costs primarily relate to long-lived asset
impairment, litigation expenses, and transaction costs.
Three Months Ended
June 30,
Six Months Ended
June 30,
Non-GAAP Operating Profit (Loss)
2023
2022
2023
2022
Operating loss
$
(20,099
)
$
(23,813
)
$
(41,601
)
$
(44,965
)
Stock compensation expense
1,690
4,912
6,046
10,334
Amortization
254
5
531
5
Non-recurring costs1
3,812
1,937
5,893
2,984
Non-GAAP operating profit (loss)
(14,343
)
(16,959
)
(29,131
)
(31,642
)
1Non-recurring costs primarily relate to long-lived asset
impairment, litigation expenses, and transaction costs.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230810059729/en/
Media Sam Manning, Public Relations Manager
sam.manning@markforged.com
Investors Austin Bohlig, Director of Investor Relations
investors@markforged.com
Markforged (NYSE:MKFG)
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