WALTHAM, Mass. — (BUSINESS WIRE) — May 11, 2023 — 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.

Financial Highlights

• 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.”

Business Highlights

• 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.

Guidance

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.

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 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.