WALTHAM, Mass. — (BUSINESS WIRE) — March 7, 2024 — Markforged Holding Corporation (NYSE: MKFG) (the “Company”), the company strengthening manufacturing resiliency by enabling industrial production at the point of need, today announced its financial results for the fourth quarter and full year ended December 31, 2023.

Fourth Quarter 2023 Financial Results Compared To Fourth Quarter 2022

• Revenue was $24.2 million, up 20.4% sequentially from the third quarter of 2023, and down from $29.7 million in the fourth quarter of 2022.
• Gross margin was 48.4% compared to 46.9%.
• Non-GAAP gross margin was 49.5% compared to 47.5%.
• Operating expenses were $31.1 million, inclusive of an increase in the fair value estimate of an acquisition earnout of $0.9 million, compared to $33.2 million.
• Non-GAAP operating expenses were $24.9 million compared to $29.4 million.
• Net loss was $14.2 million compared to net loss of $10.7 million.
• Non-GAAP net loss was $11.6 million compared to a loss of $13.3 million.
• Cash, cash equivalents, and short-term investments were $116.9 million as of December 31, 2023 compared to $167.9 million as of December 31, 2022.

Full Year 2023 Financial Results Compared To Full Year 2022

• Revenue was $93.8 million compared to $101.0 million.
• Gross margin was 47.4% compared to 50.2%.
• Non-GAAP gross margin was 48.6% compared to 50.8%.
• Net cash used in operating activities was $48.9 million compared to $73.5 million.

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 ended the year with positive momentum as we continued to execute our strategy to lead the adoption of additive manufacturing on the factory floor,” said Shai Terem, President and CEO of Markforged. “Although in the near term we expect elevated interest rates will continue to impact capital spending, the need for manufacturers to reduce costs and build more resilient supply chains remains a long-term tailwind driving demand for the Digital Forge. We have a strong product portfolio and are encouraged by robust utilization across our global fleet network. We look forward to realizing the growth potential our new products provide, especially in the second half of the year. We believe this, combined with our tight cost controls and strong balance sheet, keeps us on a clear path to profitability.”

Business Updates

• Strong Execution in a Challenging Macro Environment. While slow capital expenditures in 2023 delayed system sales, Markforged delivered 20% sequential revenue growth in the fourth quarter. Supported by effective cost controls, Markforged exceeded its 2023 gross margin and operating cost targets. Net cash used in operating activities in 2023 decreased by $24.6 million, approximately 33% from 2022, driven by improving operational and working capital efficiencies.
• Automation Alley Expansion Win. During the fourth quarter, Markforged expanded its relationship with Automation Alley through the sale of an additional 125 OnyxPro printers for its Project DIAMOnD initiative. This is an expansion beyond the 300 printers Automation Alley acquired in 2021. This win is part of a strategic partnership between Automation Alley and Digital Source, Markforged’s on-demand platform for 3D printing OEM certified parts.
• Robust Utilization Across the Global Fleet. The health of Markforged’s global printer network remains robust as customers solve ever more factory floor challenges using their Digital Forge solutions. Markforged realized strong growth in subscription sales, which helped drive services revenues up 25% year-over-year in 2023. Markforged expects these strong utilization rates and the resulting recurring revenue streams they produce to grow in 2024.
• Entering 2024 With the Strongest Product Portfolio in the Company’s History. Markforged launched three important new products in 2023, the FX10, Vega, and Digital Source. Building on the precision and reliability of the X7, the FX10 is nearly twice as large and twice as fast as its predecessor and is built to supercharge manufacturing productivity and profitability. Markforged has seen strong initial demand for the FX10 and remains on plan to begin shipping in the first half of 2024. With these new products, alongside the FX20, PX100, and the rest of the Company’s industrial printer lineup, Markforged enters 2024 with the strongest product portfolio in the Company’s history.

Markforged Announces Assaf Zipori as Chief Financial Officer

Markforged also announced today that Assaf Zipori, Markforged’s Acting Chief Financial Officer, has assumed the role of Chief Financial Officer.

“I am very pleased to announce the appointment of Assaf as our CFO,” said Shai Terem. “Assaf has been a key member of our executive team for over four years and has repeatedly demonstrated the business acumen and leadership to head our financial organization. I’m confident in his continued leadership to help us on our journey to profitable growth.”

Zipori has deep experience since joining Markforged more than four years ago. He served as Acting Chief Financial Officer from November 2019 through March 2021 and again from May 2023 until March 2024, and as Markforged’s head of Strategy and Corporate Development since April 2021.

“Since joining Markforged I’ve been inspired by our fantastic team, the power of our technology and our mission to bring industrial production to the point of need. I am grateful for this opportunity and am confident in our team’s ability to drive success,” said Zipori.

2024 Financial Outlook

Markforged anticipates fiscal year 2024 revenues to be within the range of $95 - $105 million. In line with seasonal industry trends, Markforged expects to see the normal mid-teen percentage sequential revenue decline in the first quarter and then expects revenues to grow sequentially throughout the year. While Markforged’s guidance acknowledges the persistence of macroeconomic headwinds throughout the year, Markforged holds a more positive outlook for the second half of the year, accompanied by accelerated growth. Our positive outlook is underpinned by the introduction of new products, particularly the FX10. Markforged expects non-GAAP gross margins to be within the range of 48% - 50%. Non-GAAP operating loss is expected to be in the range of $42.5 million - $47.0 million for the year, resulting in a non-GAAP loss per share in the range of $0.19 - $0.22 per share.

Conference Call and Webcast Information

The Company will host a webcast and conference call at 5:00 p.m. ET today, Thursday, March 7, 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, March 21, 2024, 11:59 PM ET by dialing 1-844-512-2921 or 1-412-317-6671, passcode 13743010.

Amounts herein pertaining to December 31, 2023 represent a preliminary estimate as of the date of this earnings release and may be revised upon filing our Annual Report on Form 10-K with the Securities and Exchange Commission (the “SEC”). More information on our results of operations for the year ended December 31, 2023 will be provided upon filing our Annual Report on Form 10-K with the SEC.

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 .