Markforged (US:MKFG)2023-05-11 20:36PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements Presents Markforged's unaudited condensed consolidated financial statements for Q1 2023 and Q1 2022, with detailed notes Unaudited Condensed Consolidated Balance Sheets Details Markforged's assets, liabilities, and stockholders' equity as of March 31, 2023, and December 31, 2022 | (In thousands) | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $90,674 | $124,242 | | Short-term investments | $60,756 | $43,690 | | Total current assets | $212,515 | $229,816 | | Total assets | $327,887 | $345,941 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $39,127 | $40,964 | | Total liabilities | $89,826 | $93,387 | | Total stockholders' equity | $238,061 | $252,554 | | Total liabilities and stockholders' equity | $327,887 | $345,941 | Unaudited Condensed Consolidated Statements of Operations Presents Markforged's revenues, costs, and net loss for the three months ended March 31, 2023, and 2022 | (In thousands) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Revenue | $24,090 | $21,859 | | Cost of revenue | $12,508 | $10,253 | | Gross profit | $11,582 | $11,606 | | Total operating expenses | $33,084 | $32,758 | | Loss from operations | $(21,502) | $(21,152) | | Net (loss) profit | $(19,019) | $4,239 | | Net (loss) profit per share - basic | $(0.10) | $0.02 | Unaudited Condensed Consolidated Statements of Other Comprehensive Income (Loss) Details Markforged's net loss and other comprehensive income (loss) for Q1 2023 and Q1 2022 | (In thousands) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net (loss) profit | $(19,019) | $4,239 | | Other comprehensive income, net of taxes: | | | | Unrealized (loss) on available-for-sale marketable securities, net | $(50) | — | | Foreign currency translation adjustment | $158 | — | | Total comprehensive (loss) income | $(18,911) | $4,239 | Unaudited Statement of Changes in Stockholders' Equity Summarizes changes in Markforged's stockholders' equity for Q1 2023 and Q1 2022, including net loss and stock-based compensation | (In thousands) | December 31, 2022 | March 31, 2023 | | :--- | :--- | :--- | | Total Stockholders' Equity | $252,554 | $238,061 | | Net loss | $(19,019) | | | Other comprehensive income | $108 | | | Stock-based compensation expense | $4,144 | | | Earnout stock-based compensation expense | $212 | | | (In thousands) | December 31, 2021 | March 31, 2022 | | :--- | :--- | :--- | | Total Stockholders' Equity | $244,169 | $254,410 | | Net income and comprehensive income | $4,239 | | | Stock-based compensation expense | $4,285 | | | Earnout stock-based compensation expense | $1,137 | | Unaudited Condensed Consolidated Statements of Cash Flows Presents Markforged's cash flow activities for the three months ended March 31, 2023, and 2022 | (In thousands) | For the Three Months Ended March 31, 2023 | For the Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(15,542) | $(19,247) | | Net cash used in investing activities | $(18,096) | $(798) | | Net cash provided by financing activities | $62 | $580 | | Net change in cash, cash equivalents, and restricted cash | $(33,568) | $(19,465) | | Cash, cash equivalents, and restricted cash - End of period | $90,674 | $269,138 | Unaudited Notes to Condensed Consolidated Financial Statements Provides detailed notes to the condensed consolidated financial statements, covering accounting policies, acquisitions, and other financial details Note 1. Organization, Nature of the Business, and Risks and Uncertainties - Markforged, founded in 2013, specializes in additive manufacturing, producing 3D printers, materials, software, and services for high-strength, cost-effective parts, completing a merger on July 14, 20213233 - The company monitors supply chain disruptions and economic downturns, believing existing cash is sufficient for operating and capital expenditure requirements for at least one year3536 Note 2. Summary of Significant Accounting Policies - Financial statements conform to US GAAP and SEC regulations, with key estimates including allowance for doubtful accounts, inventory reserves, fair value of contingent earnout liability, and valuation of intangibles and goodwill383941 - The company classifies financial instruments measured at fair value into Level 1, Level 2, and Level 3, with contingent earnout liability, private placement warrant liability, and Teton acquisition contingent earnout liability as Level 34950 - The Company adopted ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), effective January 1, 2023, with no material effect on its condensed consolidated financial statements79 Cash Equivalents and Short-term Investments (March 31, 2023) | (in thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | | :--- | :--- | :--- | :--- | :--- | | Money market funds | $82,704 | $— | $— | $82,704 | | Commercial paper | $27,447 | $— | $— | $27,447 | | Government bonds | $20,440 | $17 | $— | $20,457 | | Corporate bonds | $4,966 | $— | $(11) | $4,955 | | U.S. Treasury bills | $4,944 | $1 | $— | $4,945 | | Asset-backed securities | $2,955 | $— | $(3) | $2,952 | | Total cash equivalents and short-term investments | $143,456 | $18 | $(14) | $143,460 | Changes in Allowance for Doubtful Accounts | (in thousands) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Balance at beginning of period | $1,559 | $1,021 | | Provision adjustment | $(523) | $(43) | | Write – offs | $(250) | $(7) | | Balance at end of period | $786 | $971 | Note 3. Acquisitions - On April 4, 2022, Markforged acquired Teton Simulation Software for $6.6 million, integrating its SmartSlice™ technology into Eiger™80 - On August 31, 2022, Markforged acquired Digital Metal AB for approximately $43.3 million ($33.