Markforged Holding Corporation, the company strengthening manufacturing resiliency by enabling industrial production at the point of need, 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.
“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.
