Markforged Announces Third Quarter 2024 Results

WALTHAM, Mass., Nov. 07, 2024 (GLOBE NEWSWIRE) -- Markforged Holding Corporation (NYSE: MKFG) (the “Company” or “Markforged”), the company strengthening manufacturing resiliency by enabling industrial production at the point of need, today announced its financial results for the third quarter ended September 30, 2024.

Third Quarter 2024 Financial Results Compared To Third Quarter 2023

Revenue was $20.5 million compared to $20.1 million.
Gross margin was 49.0% compared to 45.7%.
Non-GAAP gross margin was 50.9% compared to 46.9%.
Operating expenses were $27.6 million compared to $59.6 million.
Non-GAAP operating expenses were $20.5 million compared to $24.9 million.
Net loss was $23.4 million compared to net loss of $51.4 million.
Non-GAAP net loss was $9.5 million compared to a loss of $13.8 million.
Cash and cash equivalents, including restricted cash, were $79.5 million as of September 30, 2024, compared to $93.9 million as of June 30 2024. The balance sheet for the quarter ended September 30, 2024 includes restricted cash in the amount of $19.4 million relating to the surety bond entered into following the jury verdict in Continuous Composites litigation. The surety bond was terminated as of October 30, 2024 in connection with the settlement of the Continuous Composites litigation announced on September 23, 2024.

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 below under the heading “Non-GAAP Financial Measures.”

“We are pleased with our results in Q3 that were supported by the encouraging adoption of our latest product innovations despite facing a challenging industrial environment,” said Shai Terem, President and CEO of Markforged. “We see positive momentum following the successful launch of metal printing capability for the FX10 in Q3, which is the world’s first industrial 3D printer for metals and composites. Furthermore, we remain excited about the pending acquisition by Nano Dimension and our ability to bring together our pioneering, complementary product portfolios that we expect will further enhance our ability to serve our customers on the manufacturing floor with a more complete offering of highly innovative solutions and a stronger balance sheet to weather this industrial slowdown cycle.”

Business Updates

Nano Dimension Ltd. (“Nano Dimension”) to Acquire Markforged: On September 25, 2024, Markforged jointly announced with Nano Dimension that Markforged entered into a definitive agreement pursuant to which Nano Dimension will acquire all outstanding shares of Markforged in an all-cash transaction for $5.00 per share, without interest and less any applicable tax withholdings. The transaction, which was unanimously approved by the Boards of Directors of both companies, is expected to close by the first quarter of 2025, subject to the satisfaction or waiver of certain closing conditions, including the approval of the transaction by Markforged’s stockholders, and required regulatory approvals.
Q3 Performance: Markforged revenues increased by 2.0% year-over-year to $20.5 million in Q3, despite persistently tough market conditions that continue to impact system sales. Consumable and services sales were healthy, up 11.8% and 13.2% year-over-year, respectively. Following the first shipment in Q2, Markforged saw continued traction for its PX100 metal binder jetting system by shipping a second system in Q3. Non-GAAP gross margin for the quarter was 50.9%, up 4.0% from the third quarter of 2023, which was driven by operational efficiencies and product mix.
Markforged Announces Settlement In IP Litigation: On September 23, 2024, Markforged announced that it entered into a Settlement and Patent License Agreement (the “Settlement Agreement”) in connection with the patent infringement litigation brought by Continuous Composites Inc. (“Continuous Composites”). The Settlement Agreement resolved all claims and counterclaims in this litigation. Under the terms of the Settlement Agreement, Markforged made an up-front payment of $18 million to Continuous Composites on October 10, 2024, and is required to make three additional installment payments thereafter of $1 million, $2 million and $4 million in the fourth quarters of fiscal years 2025, 2026 and 2027, respectively.

No Earnings Call and Guidance

In light of the pending merger transaction with Nano Dimension announced on September 25, 2024, and as is customary during the pendency of such transactions, Markforged will not host an earnings conference call and is not providing forward-looking guidance.

About Markforged

Markforged (NYSE:MKFG) is enabling more resilient and flexible manufacturing 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 each of non-GAAP gross margin, non-GAAP operating profit (loss) and non-GAAP net profit (loss), 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.

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.

Additional Information and Where to Find It

In connection with the proposed transaction between Markforged and Nano Dimension, Markforged filed a preliminary proxy statement on Schedule 14A (the “preliminary proxy statement”) relating to a special meeting of its stockholders with the Securities and Exchange Commission (“SEC”) on October 21, 2024. Promptly after filing its definitive proxy statement with the SEC, Markforged intends to mail the definitive proxy statement (the “definitive proxy statement”) and a proxy card to each stockholder entitled to vote at the special meeting relating to the proposed transaction. Markforged may also file other relevant documents with the SEC in connection with the proposed transaction. This document is not a substitute for the preliminary proxy statement, the definitive proxy statement or any other document that Markforged may file with the SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PRELIMINARY PROXY STATEMENT, THE DEFINITIVE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain free copies of the definitive proxy statement (if and when available) and other filings containing important information about Markforged and the proposed transaction, once such documents are filed with the SEC through the website maintained by the SEC at www.sec.gov Copies of the documents filed with the SEC by Markforged will be available free of charge on Markforged’s website at https://investors.markforged.com/sec-filings.

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