Markforged Announces Second Quarter 2022 Results

WATERTOWN, Mass.–(BUSINESS WIRE)–Markforged Holding Corporation (NYSE: MKFG) (the “Company”), creator of the integrated metal and carbon fiber additive manufacturing platform, The Digital Forge, today announced its results from the second quarter ended June 30, 2022.

Financial Highlights

  • Revenue increased by 19%, to $24.2 million, in the second quarter of 2022 from $20.4 million in the second quarter of 2021.
  • Gross margin was 53% in the second quarter of 2022 compared to 58% in the second quarter of 2021.
  • Non-GAAP gross margin was 54% in the second quarter of 2022 compared to 59% in the second quarter of 2021.
  • Net profit (loss) was a profit of $4.1 million in the second quarter of 2022, compared to a net loss of $11.1 million in the second quarter of 2021.
  • Non-GAAP net profit (loss) was a loss of $16.8 million in the second quarter of 2022, compared to a net loss of $8.1 million in the second quarter of 2021.
  • GAAP earnings per share was a profit of $0.02 for the second quarter of 2022, compared to a loss of $0.28 in the second quarter of 2021.
  • Non-GAAP earnings per share was a loss of $0.09 for the second quarter of 2022, compared to a loss of $0.20 in the second quarter of 2021.
  • Cash and cash equivalents were $243.2 million as of June 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.”

“Demand for The Digital Forge continues to grow. Our customers realize the value of our additive solutions as they solve for a growing number of applications with high-quality parts right at the point of need, especially in the current global environment racked with supply chain challenges,” said Shai Terem, President and CEO of Markforged. “We continue to make great strides in executing on our strategy thanks to great efforts from our talented team. We feel very confident in our long-term opportunity to extend our leadership position in distributed manufacturing as our product portfolio grows and evolves. The pending acquisition of Digital Metal, coupled with our organic product innovation engine, will continue to expand our addressable market and help our customers solve even more industrial manufacturing challenges.”

Business Highlights

The pipeline for The Digital Forge remained strong across products and continued to grow for Markforged’s newest printer, the FX20. Global orders for the FX20 in particular exceed Markforged’s expectations.

Markforged expanded its addressable market by entering into a definitive agreement with Höganäs AB to acquire Digital Metal, the creator of a leading binder jetting solution known to be precise and reliable for mass production of metal parts. Expected to close in the third quarter, this acquisition will extend Markforged’s capabilities into high-throughput production of metal additive parts and open the door for new applications in industries such as automotive, medical, luxury goods and countless others.

The Company is committed to its long-term strategy, and has made calculated investments in both organic and inorganic growth over the last quarter. The Company’s product innovation pipeline continues to mature with multiple programs in development. The Markforged team also grew during the last quarter to approximately 450 employees.

2022 Guidance

“Our customers realize the value of The Digital Forge and while our pipeline continues to grow, we have started to see the impact of the uncertainty created by global macroeconomic conditions,” said Mark Schwartz, Chief Financial Officer of Markforged. “Our sales cycles are growing longer due to customers’ hesitation to commit to capital expenses in this current environment. We are therefore adjusting our guidance accordingly. Our confidence in our medium- to long-term outlook has not changed.”

Markforged has updated its full-year 2022 guidance. Revenue is expected to be within the range of $100-115 million, and non-GAAP gross margins are expected to be within the range of 52%-54%. Non-GAAP operating loss for the full year is expected to be within the range of $54-$59 million, resulting in an expected EPS loss in the range of $0.29-$0.32 per share, based on an outstanding share count of approximately 192 million shares.

Conference Call and Webcast Information

The Company will host a webcast and conference call at 5:00 PM ET today, Thursday, August 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 1-855-327-6837, or 1-631-891-4304 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 Thursday, August 25, 2022 by dialing 1-844-512-2921 (U.S. domestic) or 1-412-317-6671 (International), passcode 10019757.

About Markforged

Markforged (NYSE: MKFG) is reimagining how humans build everything by leading a technology-driven transformation of manufacturing with solutions for enterprises and societies throughout the world. The Markforged Digital Forge brings the power and speed of agile software development to industrial manufacturing, combining hardware, software, and materials to solve supply chain problems right at the point of need. Engineers, designers, and manufacturing professionals all over the world rely on Markforged metal and composite printers for tooling, fixtures, functional prototyping, and high-value end-use production. Markforged is headquartered in Watertown, Mass., where it designs its products with approximately 450 employees worldwide. 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 and $1.0 million in the first and second quarters of 2022, respectively, and by $3.7 million and $0.9 million in the first and second 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) and comprehensive income (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) and comprehensive income (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; 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; 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, 2022 and December 31, 2021
(In thousands, except share data and par value amounts) (Unaudited)
 
June 30,
2022
December 31,
2021
Assets
Current assets

Cash and cash equivalents

$

243,216

 

$

288,603

 

Accounts receivable, net

 

26,570

 

 

26,777

 

Inventory

 

19,321

 

 

10,377

 

Prepaid expenses

 

1,338

 

 

3,921

 

Other current assets

 

2,517

 

 

511

 

Total current assets

 

292,962

 

 

330,189

 

Property and equipment, net

 

6,939

 

 

6,349

 

Goodwill

 

4,475

 

 

 

Intangible assets

 

2,215

 

 

 

Right-of-use assets

 

46,689

 

 

 

Other assets

 

2,858

 

 

776

 

Total assets

$

356,138

 

$

337,314

 

Liabilities and Stockholders’ Equity
Current liabilities

Accounts payable

$

10,518

 

$

11,403

 

Accrued expenses

 

9,525

 

 

7,411

 

Deferred revenue

 

5,780

 

 

6,288

 

Operating lease liabilities

 

7,667

 

 

 

Other current liabilities

 

53

 

 

310

 

Total current liabilities

 

33,543

 

 

25,412

 

Long-term deferred revenue

 

4,083

 

 

3,742

 

Deferred rent

 

 

 

1,623

 

Contingent earnout liability

 

8,084

 

 

59,722

 

Long-term operating lease liabilities

 

41,497

 

 

 

Other liabilities

 

2,579

 

 

2,646

 

Total liabilities

 

89,786

 

 

93,145

 

Commitments and contingencies
Stockholders’ equity

Common stock, $0.0001 par value; 1,000,000,000 shares authorized at June 30, 2022 and December 31, 2021;

188,482,934 and 185,993,058 shares issued at June 30, 2022 and December 31, 2021, respectively

 

19

 

 

19

 

Additional paid-in capital

 

333,728

 

 

319,859

 

Accumulated deficit

 

(67,395

)

 

(75,709

)

Total stockholders’ equity

 

266,352

 

 

244,169

 

Total liabilities and stockholders’ equity

$

356,138

 

$

337,314

 

MARKFORGED HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
For the Three and Six Months Ended June 30, 2022 and 2021
(In thousands, except share data and per share data) (Unaudited)
 
Three Months Ended June 30, Six Months Ended June 30,

2022

2021

2022

2021

Revenue

$

24,227

 

$

20,419

 

$

46,086

 

$

40,539

 

Cost of revenue

 

11,302

 

 

8,496

 

 

21,555

 

 

16,435

 

Gross profit

 

12,925

 

 

11,923

 

 

24,531

 

 

24,104

 

Operating expenses

Sales and marketing

 

12,873

 

 

8,255

 

 

23,321

 

 

15,312

 

Research and development

 

10,387

 

 

6,444

 

 

20,954

 

 

11,703

 

General and administrative

 

13,478

 

 

7,959

 

 

25,221

 

 

16,822

 

Total operating expenses

 

36,738

 

 

22,658

 

 

69,496

 

 

43,837

 

Loss from operations

 

(23,813

)

 

(10,735

)

 

(44,965

)

 

(19,733

)

Change in fair value of warrant liabilities

 

976

 

 

(241

)

 

1,669

 

 

(1,251

)

Change in fair value of contingent earnout liability

 

26,742

 

 

 

 

51,638

 

 

 

Other expense

 

(171

)

 

(104

)

 

(390

)

 

(117

)

Interest expense

 

(9

)

 

(5

)

 

(9

)

 

(9

)

Interest income

 

354

 

 

1

 

 

374

 

 

3

 

Profit (loss) before income taxes

 

4,079

 

 

(11,084

)

 

8,317

 

 

(21,107

)

Income tax benefit

 

4

 

 

6

 

 

3

 

 

2

 

Net profit (loss) and comprehensive income (loss)

$

4,075

 

$

(11,090

)

$

8,314

 

$

(21,109

)

Weighted average shares outstanding – basic

 

188,102,342

 

 

39,855,379

 

 

187,247,566

 

 

39,649,848

 

Weighted average shares outstanding – diluted

 

188,876,763

 

 

39,855,379

 

 

188,329,331

 

 

39,649,848

 

Net profit (loss) per share – basic

$

0.02

 

$

(0.28

)

$

0.04

 

$

(0.53

)

Net profit (loss) per share – diluted

 

0.02

 

 

(0.28

)

 

0.04

 

 

(0.53

)

MARKFORGED HOLDING CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
For the Three and Six Months Ended June 30, 2022 and 2021
(In thousands) (Unaudited)
 
Three Months Ended
June 30,
For the Six Months
Ended June 30,

2022

2021

2022

2021

Net profit (loss) and comprehensive income (loss)

$

4,075

 

$

(11,090

)

$

8,314

 

$

(21,109

)

Stock compensation expense

 

4,912

 

 

1,777

 

 

10,334

 

 

2,971

 

Change in fair value of warrant liabilities

 

(976

)

 

241

 

 

(1,669

)

 

1,251

 

Change in fair value of contingent earnout liability

 

(26,742

)

 

 

 

(51,638

)

 

 

Non-recurring costs1

 

1,937

 

 

930

 

 

2,984

 

 

4,633

 

Non-GAAP net loss 2

$

(16,794

)

$

(8,142

)

$

(31,675

)

$

(12,254

)

—————————————————————————————————————————

1

 

Non-recurring costs primarily relate to transaction and litigation expenses. Expenses for the six months ended June 30, 2022, includes $1,047 of non-recurring litigation and transaction costs incurred in the first quarter of 2022.

2

 

Stock-based compensation expense and non-recurring costs were included in the following GAAP consolidated statement of operations categories:

 

Three Months Ended
June 30,
Six Months Ended
June 30,

 

2022

2021

2022

2021

Cost of revenue

$

102

$

62

$

217

$

89

 

 

Sales and marketing

775

237

1,624

320

Research and development

1,572

394

2,991

725

General and administrative

4,400

2,014

8,486

6,470

Total operating expense

6,747

2,645

13,101

7,515

Total adjustments

$

6,849

$

2,707

$

13,318

$

7,604

MARKFORGED HOLDING CORPORATION
NON-GAAP RECONCILIATION
THREE MONTHS ENDED JUNE 30, 2022 AND 2021
(In thousands, except share data and per share data) (Unaudited)
 
Three Months Ended June 30, 2022 Three Months Ended June 30, 2021
GAAP Adjustments Non-GAAP* GAAP Adjustments Non-GAAP*
Revenue

$

24,227

 

 

$

24,227

 

$

20,419

 

 

$

20,419

 

Cost of revenue

 

11,302

 

(102

)

 

11,200

 

 

8,496

 

(62

)

 

8,434

 

Gross profit

 

12,925

 

102

 

 

13,027

 

 

11,923

 

62

 

 

11,985

 

Operating expenses

Sales and marketing

 

12,873

 

(775

)

 

12,098

 

 

8,255

 

(237

)

 

8,018

 

Research and development

 

10,387

 

(1,572

)

 

8,815

 

 

6,444

 

(394

)

 

6,050

 

General and administrative

 

13,478

 

(4,400

)

 

9,078

 

 

7,959

 

(2,014

)

 

5,945

 

Total operating expenses

 

36,738

 

(6,747

)

 

29,991

 

 

22,658

 

(2,645

)

 

20,013

 

Loss from operations

 

(23,813

)

6,849

 

 

(16,964

)

 

(10,735

)

2,707

 

 

(8,028

)

Change in fair value of warrant liabilities

 

976

 

(976

)

 

 

 

(241

)

241

 

 

 

Change in fair value of contingent earnout liability

 

26,742

 

(26,742

)

 

 

 

 

 

 

 

Other expense

 

(171

)

 

 

(171

)

 

(104

)

 

 

(104

)

Interest expense

 

(9

)

 

 

(9

)

 

(5

)

 

 

(5

)

Interest income

 

354

 

 

 

354

 

 

1

 

 

 

1

 

Profit (loss) before income taxes

 

4,079

 

(20,869

)

 

(16,790

)

 

(11,084

)

2,948

 

 

(8,136

)

Income tax (benefit) expense

 

4

 

 

4

 

 

6

 

 

6

 

Net profit (loss) and comprehensive income (loss)

$

4,075

 

(20,869

)

$

(16,794

)

$

(11,090

)

2,948

 

$

(8,142

)

Weighted average shares outstanding – basic

 

188,102,342

 

 

188,102,342

 

 

39,855,379

 

 

39,855,379

 

Weighted average shares outstanding – diluted

 

188,876,763

 

 

188,876,763

 

 

39,855,379

 

 

39,855,379

 

Net profit (loss) per share – basic

$

0.02

 

$

(0.09

)

$

(0.28

)

$

(0.20

)

Net profit (loss) per share – diluted

 

0.02

 

 

(0.09

)

 

(0.28

)

 

(0.20

)

MARKFORGED HOLDING CORPORATION
NON-GAAP RECONCILIATION
SIX MONTHS ENDED JUNE 30, 2022 AND 2021
(In thousands, except share data and per share data) (Unaudited)
 
Six Months Ended June 30, 2022 Six Months Ended June 30, 2021
GAAP Adjustments Non-GAAP* GAAP Adjustments Non-GAAP*
Revenue

$

46,086

 

 

$

46,086

 

$

40,539

 

 

$

40,539

 

Cost of revenue

 

21,555

 

(217

)

 

21,338

 

 

16,435

 

(89

)

 

16,346

 

Gross profit

 

24,531

 

217

 

 

24,748

 

 

24,104

 

89

 

 

24,193

 

Operating expenses

Sales and marketing

 

23,321

 

(1,624

)

 

21,697

 

 

15,312

 

(320

)

 

14,992

 

Research and development

 

20,954

 

(2,991

)

 

17,963

 

 

11,703

 

(725

)

 

10,978

 

General and administrative

 

25,221

 

(8,486

)

 

16,735

 

 

16,822

 

(6,470

)

 

10,352

 

Total operating expenses

 

69,496

 

(13,101

)

 

56,395

 

 

43,837

 

(7,515

)

 

36,322

 

Loss from operations

 

(44,965

)

13,318

 

 

(31,647

)

 

(19,733

)

7,604

 

 

(12,129

)

Change in fair value of warrant liabilities

 

1,669

 

(1,669

)

 

 

 

(1,251

)

1,251

 

 

 

Change in fair value of contingent earnout liability

 

51,638

 

(51,638

)

 

 

 

 

 

 

 

Other expense

 

(390

)

 

 

(390

)

 

(117

)

 

 

(117

)

Interest expense

 

(9

)

 

 

(9

)

 

(9

)

 

 

(9

)

Interest income

 

374

 

 

 

374

 

 

3

 

 

 

3

 

Profit (loss) before income taxes

 

8,317

 

(39,989

)

 

(31,672

)

 

(21,107

)

8,855

 

 

(12,252

)

Income tax (benefit) expense

 

3

 

 

 

3

 

 

2

 

 

 

2

 

Net profit (loss) and comprehensive income (loss)

$

8,314

 

(39,989

)

$

(31,675

)

$

(21,109

)

8,855

 

$

(12,254

)

Weighted average shares outstanding – basic

 

187,247,566

 

 

187,247,566

 

 

39,649,848

 

 

39,649,848

 

Weighted average shares outstanding – diluted

 

188,329,331

 

 

188,329,331

 

 

39,649,848

 

 

39,649,848

 

Net profit (loss) per share – basic

$

0.04

 

$

(0.17

)

$

(0.53

)

$

(0.31

)

Net profit (loss) per share – diluted

 

0.04

 

 

(0.17

)

 

(0.53

)

 

(0.31

)

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)

2022

2021

2022

2021

Hardware

$

16,011

$

14,331

$

30,527

$

28,569

Consumables

 

5,889

 

4,780

 

11,345

 

9,397

Services

 

2,327

 

1,308

 

4,214

 

2,573

Total Revenue

$

24,227

$

20,419

$

46,086

$

40,539

 

Contacts

Media

Paulina Bucko, Head of Communications

press@markforged.com

Austin Bohlig, Director of Investor Relations

investors@markforged.com

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