Markforged (US:MKFG)2022-11-10 05:00Financial Data and Key Metrics Changes - Revenue increased by 5% in Q3 2022 to $25.2 million compared to $24 million in Q3 2021 [22] - Gross profit for Q3 was $12.4 million, down from $13.8 million in Q3 2021, resulting in a gross profit margin of 49.1%, compared to 57.6% in the prior year [23] - Operating expenses rose to $28.5 million from $25.5 million in Q3 2021, but decreased sequentially from $30 million in Q2 2022 [24] - Net loss for Q3 was $15.2 million, or a loss of $0.08 per share, showing improvement as a percentage of revenues compared to Q2 2022 [24] - Cash balance at the end of Q3 was $181.8 million, positioning the company well for long-term goals [25] Business Line Data and Key Metrics Changes - Demand for the FX20 printer met expectations, with every unit shipped resulting in a backlog of orders due to material procurement and production constraints [12] - Consumables revenue grew by 14% year-over-year, indicating healthy utilization of equipment [80] Market Data and Key Metrics Changes - APAC region saw significant growth, with revenue increasing by 82% year-over-year and 39% quarter-over-quarter, driven by strong demand for mature products and the FX20 [13] - EMEA and Americas faced challenges from geopolitical pressures, inflation, and currency fluctuations [13] Company Strategy and Development Direction - The company aims to make manufacturing more resilient by utilizing the Digital Forge to localize production [11] - A reorganization of the go-to-market team was implemented to prioritize initiatives with the greatest potential for impact on profitable growth [14] - The acquisition of Digital Metal expands opportunities in high-volume metal production, targeting new markets such as medical and luxury goods [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging operating environment but emphasized strong demand for the Digital Forge and a robust pipeline of opportunities [8][10] - The company anticipates reaching breakeven by the end of 2024, contingent on resolving supply chain issues and achieving operational efficiencies [26][56] Other Important Information - The FX20 is expected to reach commercial run rate production by early 2023, with ongoing efforts to mature production processes [12][30] - The company is focused on maintaining strong cost controls while continuing to invest in innovation and sales [70] Q&A Session Summary Question: Update on FX20 shipments and contributions - Management indicated that FX20 shipments are ongoing, but achieving a commercial run rate has been delayed due to supply chain issues [30][31] Question: Impact of macroeconomic pressures on FX20 - Management noted that while demand for FX20 remains strong, lengthening sales cycles may be affecting overall performance [42][43] Question: Digital Metal integration timeline - The company expects to ramp up Digital Metal contributions next year, with initial impacts anticipated in the first quarter [36] Question: Utilization of equipment and changes in customer behavior - Management reported no decrease in active printer usage, with continued growth expected in material consumption [67][81] Question: Cash flow management and spending - The company is focused on maintaining strong cost controls and is cautious about spending, prioritizing essential investments [70]