Markforged (US:MKFG)2024-11-07 21:31Revenue and Financial Performance - Revenue for the nine months ended September 30, 2024, was $62.7 million, a decrease from $69.6 million for the same period in 2023, with net losses of $73.7 million compared to $89.4 million in the prior year[127] - Consolidated revenue for the three months ended September 30, 2024 was $20.5 million, representing an increase of 2% compared to $20.1 million for the same period in 2023[167] - Consolidated revenue for the nine months ended September 30, 2024 was $62.7 million, a decrease of 10% compared to $69.6 million for the same period in 2023[184] - Hardware revenue decreased by 19% to $35.5 million for the nine months ended September 30, 2024, while services revenue increased by 19% to $9.1 million[185] - Gross profit for the nine months ended September 30, 2024 was $31.1 million, with a gross profit margin of 50%, up from 47% in the prior year[186] - The company recorded a net loss of $73.7 million for the nine months ended September 30, 2024, compared to a net loss of $89.4 million for the same period in 2023, representing a 17.8% improvement[199] - Non-GAAP net loss for the nine months ended September 30, 2024, was $32.6 million, down from $39.6 million in the same period of 2023, indicating a 17.5% reduction[200] Revenue Composition - Recurring revenue accounted for 43% of total revenue for the three months ended September 30, 2024, up from 39% in the same period of 2023[143] - Hardware revenue decreased by 5% to $11.6 million, while consumables revenue increased by 12% to $5.8 million, and services revenue rose by 13% to $3.1 million[168] Operating Expenses and Cost Management - Total operating expenses for the three months ended September 30, 2024 were $27.6 million, a decrease of 54% from $59.6 million in the same period of 2023[171] - Total operating expenses for the nine months ended September 30, 2024 were $102.7 million, a decrease of 18% from $124.7 million in 2023[188] - Sales and marketing expenses decreased by 14% to $24.5 million, primarily due to restructuring efforts[188] - Research and development expenses decreased by 19% to $7.9 million, primarily due to a reduction in headcount and contractor-related costs[172] - General and administrative expenses decreased by 9% to $11.2 million, attributed to lower headcount costs and legal expenses[173] - The company is evaluating additional cost-saving initiatives, including product portfolio rationalization and supply chain improvements, to manage cash flows effectively[201] Litigation and Settlement - The company incurred a $18 million accrual related to the Continuous Composites litigation as of September 30, 2024[135] - The company has accrued a total of $17.3 million related to a jury verdict and additional settlement payments under a Settlement Agreement with Continuous Composites[156] - Future payments under the Settlement Agreement include installments of $1 million, $2 million, and $4 million due in the fourth quarters of fiscal years 2025, 2026, and 2027, respectively[155] - The company has recorded a long-term settlement payable of $5.2 million, which will accrete $1.8 million of interest over the payment term[156] - The company recorded a litigation judgment expense of $423,000 for the three months ended September 30, 2024, compared to no such expense in the prior year[171] Cash Flow and Financial Position - Cash and cash equivalents stood at $59.3 million as of September 30, 2024, sufficient to meet working capital and capital expenditure needs for the next 12 months[201] - The company generated negative operating cash flows of $35.9 million for the nine months ended September 30, 2024, a 10% improvement from $40.0 million in the prior year[202] - The company incurred net cash used in investing activities of $1.9 million for the nine months ended September 30, 2024, compared to a net cash provided of $14.4 million in the same period of 2023, reflecting a significant change of $16.3 million[205] Corporate Actions and Compliance - A $25 million cost reduction initiative is expected to reduce annual operating expenses to approximately $70 million[139] - The company entered into a merger agreement with Nano Dimension Ltd., with each share of common stock to be converted into $5.00 in cash[132] - A 10-for-1 reverse stock split was executed on September 19, 2024[129] - The company regained compliance with the NYSE's minimum bid price listing requirement on October 30, 2024[130] - A cost restructuring initiative was announced in November 2023, including a 10% workforce reduction, expected to save approximately $9 - $12 million in operating costs in 2024[201] Other Financial Metrics - Interest income decreased by 25% to $3.7 million for the nine months ended September 30, 2024, compared to $4.9 million in the same period of 2023[193] - The change in fair value of contingent earnout liability was $(6.3 million) for the nine months ended September 30, 2024, compared to $(2.5 million) in 2023, representing a 150% increase in loss[193] - The company experienced a decrease in stock compensation expense from $10.2 million in the nine months ended September 30, 2023, to $9.8 million in the same period of 2024[200] - The company reported a one-time lease termination payment of $2.7 million related to the 480 Pleasant St lease in the third quarter of 2024[204]