MKFG - Earnings call transcript Q2 2021 | Markforged Holding Corporation

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Operator

Good day, ladies and gentlemen, and welcome to the Markforged Second Quarter 2021 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Stephen Karp, General Counsel. ahead. go Please

Stephen Karp

laws, limitation, uncertainties and and started, operating without management assumptions. get that contained statements calendar and financial of of statements historical forward-looking regarding forward-looking be to for like remind statements. on federal to upon forward-looking this you profit undue harbor facts, material the pursuant Before are cause XXXX. from be I provisions these making strategy These our year Reform revenue could that statements. securities materially differ statements. of place various and of actual are future meaning will current projected opportunity Accordingly, be these expected with and anticipated to call are statements everyone growth made statements to business statements, market Private we performance, the should the statements would or which by the XXXX safe call reliance during include those involve including that should All not Litigation and that Securities gross Act Any in based implied statements forward-looking estimates not results deemed this risks

conference called please obligation company's disclaims now CEO XXXX, to by registration and and risks market associated recent Terem, For Markforged which except Markforged. we today, today's versus over the information of at measures. quarter only non-GAAP a our on on in financial Form speaks website schedule most required after statement There this be XX, to currently investors.markforged.com. June on the broadcast a The Also, of during ended GAAP release as law to Shai the or XX, periodic President description today, S-X. press the intention any can and update XXXX. August found the provided turn certain Form SEC the revise issued or the report refer results with in see our company's showing course uncertainties including business, reconciliation available the I'll call filings, was of XX-Q non-GAAP statements. call, our close to forward-looking for

Shai Terem

for Thank everyone investor here next company. you, journey. we our be a chapter entire ever us the as call On today Steve, thank are traded first thrilled publicly Markforged behalf for marks Markforged joining because you, of and in team, it's to

completed veteran, the We are embark excited this A-star its of with Markforged investor. Since our by journey to a sponsored opportunity market today's and one, I Kevin performance. envisioned you, quarter Markforged Hartz. company Last story maybe and the on industry describing second with before tech by upon we’ll our by some SPAC our review month, merger followed start call, you

QX results. Our commentary follow CFO, with me will on financial Mark Schwartz,

to-date. manufacturing reinvent to is mission Our

of and the rapid grow was of XXXX challenges The can world. in Together, always driver they platform. $XXX a So architecture customers design Its the network additive printers parts. in consulting the technology our from for in been the cases. manufacturing by of a past functional market through between we across Today, additive and our parts level, brand. manufacturing, Rather these create variety billion manufacturing. bring integrated can the we proud connected Digital innovative the another According unlock to designed that to range estimated for address manufacturing mission-critical million This manufacturing $XX Wohler's, next the a software printers for our technology XX we on from tomorrow. XXXX. XX turnkey solutions provides imagine eliminate billion of on and happy get metals. specializing print Markforged take robust than printed we composites next materials, solution We're sophisticated metal on-demand. focused powers, XX,XXX and limitation just XXXX and new anything years. manufacturing an MarkForged software and barriers other eight to customers is customers has proprietary high a $XXX understand each connected growth. Markforged the parts with delivered in traditional firm, additive years founded to to experienced steady you more company. AI XD value billion platform each in use is to applications additive the to development We platform, independent and fiber XX product is not than XD cloud-first more to over that of incorporating global carbon Forge, including the clear support it's focused our and collectively with are prototyping growth better offer

more network capacity printers New more manufacturing improvements enables printers network. the the on across on quality our generate which parts more data performance, and parts can that and will on create supply Better scale and quickly customers improve us just challenges started. efficiently. The printers This accessible more of for and cycle and so we to and customers and enable for chain combination materials are XD MarkForged getting and entire.

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business and investment our members and Vonage our company platform Chairman of in help Chief also with optimizing the the In the our onboarded Global button. which and continuous as transformational in customers’ becoming and merger Financial demanding growing fuel regulated critical exploration our as and CEO to Together building in Senior aerospace, the we closing continue and company, Schwartz a team former software with at be as Digital one. public will he including automotive, of can print simultaneously engineers, printer skills the worked and Sales. a the in most Ken joining our to is made go-to-market company, challenges. in spaces have experienced us. help to around Alan as Digital into XD of robust Vice Clayton President members for utilized materials, in were Mark landscape our Board, our high Rapid additive production technologies sophisticated thrilled is We Officer performance oil building service and this brand most skills industries Kevin and click unparalleled sites thermoplastics as we and printer the a Meyers, to reinforced get. transform, We Hartz with chapter of defense, directors grow. experiences CMO or temperature industrial the and with fastest, finally, brings Carol the manufacturing will board MarkForged Masarek, next a and into deployed joined goals made moving on talent growth of XD Markforged And launches gas. and are such benefit fiber of we the building the of aspirations. public to for changes as you better Forge In manufacturing generation on FXXX, operations. Forge changed with companies out company for combat These have parts, preparing experience the next align high-strength, our focuses our X, and Kevin higher tackle as sought biggest, that to our our executed former literally operators as a zones If our board. and of leadership, FXXX This

to New moment. team. commitment at unique this was of relentless Stock proud I the success York extremely stood I us As to floor last grateful talent and our of part led Markforged Exchange and the The to be month,

to mission will I over team the Schwartz, you you work excitement say for it the can stay in come executing Mark print so I our to financials think, today, every he what our that of with turn it I will as more CFO, manufacturing an offer reinventing detail. when tomorrow. And we I us now imagine motivates overview us. in day, speak

Mark Schwartz

second results of that Thank the of you, Shai. our transaction one. quarter and therefore Please be pre-closing merger discussing with today will as results the are of Inc. XX Markforged we note June

XXXX. results Let's turn of to our and second the for quarter our full guidance financial year

diversify to year-over-year XX, $XX.X XX% months across generated three experienced Americas. and Second the to for our outside geographic quarter million our quarter with regions June $XX.X revenue revenue growth million second of ended revenue of We revenue continued XX% increased compared with XXXX. all the of

As Shai that software, platform our growth. point customers Forge. our our discussed combines is to differentiated the of of materials collectively at earlier, platform a customers hardware value our and platform called proprietary customers, enabling we the the It produce offer parts to need. critical The our revenue our Digital drives

quarter sales. improvement strong was driven profit months for million to mix and year-over-year the product three hardware in at $X.X XX, in favorable XX% Second in ended largely $XX.X the to hardware by performance million The the increased June business quarter gross efficiencies production compared XXXX.

cost challenged which result, to and should second XXXX. by through to been basis to to like we constraints recently business gross our supply the maintain a global address more annual Well, points us these have our XX.X% forecast. expanded compared chain XXX for others of allow second a many actions, challenges quarter of pressures, number margin attempted gross has As margin quarter XX.X%

material secure actions longer-term quantities for larger example, include orders order sources in price of and purchase these For to concessions supply. purchasing executing exchange volume

ended public focus on company operating includes to the $XX.X The Second was in $XX.X R&D growth with was increase my expenses The with support preparedness plans of our departments across general plans. of headcount, for and and non-GAAP compared marketing, our comments in metrics. and stock-based for months operating June XX, administrative sales million remainder and quarter line expense other operating XXXX. compensation expense expense million will expense, three

non-recurring million quarter $X.X XXXX loss $X.X ended a for and Second note, quarter, other EBITDA of includes million $X.X as first first compared adjusted litigation, employees, and the transaction months to for associated excludes XXXX. of other June quarter for and of ended adjusted Please for second for was the the million. $X.X total quarter, as and adjusted $X.X with legal the the million The representing quarter million had June million the XXXX. stock-based EBITDA of expenses three XX, company an we year-over-year. million up $X.X expense non-recurring compensation the public XX% second transitional SPAC the XXX for compared three full-time to second XX, XXXX of expenses $X.X of quarter, At end aggregate months audit,

As approximately $XXX merger expenses. million with connection share the in XX closing of received approximately one pipe. gross transaction in a and SPAC Markforged repurchases reminder, proceeds, and closing of of million the with million our sponsor $XX the of

XXXX, described long-term $XXX transaction from and million. as for forge growth. meet in our XX, digital demand net to in our was this capital the proceeds the July drive of team As to approximately balance, cash customer We business innovation above intend invest our across our including and

million. for reaffirmed we of XX% of gross reaffirm would anticipating our for year We revenue questions. like full total business for that the the guidance. XXXX today. our reach and typically $XX XXXX is prepared revenues also forecast concludes to up on quarter Now our margin adjusted prior please EBITDA $XX.X full the sales. of Operator, to the the for the some call note Further, usually year to approximately year strongest terms seasonality our our I million. full guidance remarks negative of That fourth open approximately representing to quarter, with there in

Operator

go Thank question you. [Operator Jensen Capital. from Troy Street is Instructions] the ahead. from of Please And our Lake first line

Troy Jensen

Hey gentlemen. the Congrats nice on results.

Shai Terem

Troy. you, Thank

Troy Jensen

past months under could I in in start months. if about industry Hey, just the the you talk in six now of maybe start pipeline I the just pipeline wonder or versus maybe kind to belief guess, want was of I ago, seen for that thoughts, an and with inflection Shai. the I'm kind has your tone space? the six activity

Shai Terem

pipeline post the I many think areas. in across that see increasing pandemic we

looks So is days. of it impact these definitely that different yes, the a pandemic year ago

Troy Jensen

that little in and Perfect. bit you software – for Blacksmith I'd launches about the hear And how to a guys? about how like more and

Shai Terem

say think to I field is the get of next launched one our very solution software we them. day, a QX in also demand enables customers easy starting would the we we Blacksmith great that. building Field a very have to Edition, which X was new is you as which I it, very, over metal in in one also for impressive. X, really see metal But parts the which use which several XX Metal very launched products. impressive. Gen to The customers And update, the up initial know,

Troy Jensen

kind about that one a How right. jump the just QX and were down XX% kind to mark they I'll then really for big Queue, All back level. into and of gross margins, of in

Just your expected? thoughts they, on you margins. Are they, where where

Shai Terem

margins Yes, the as did come Troy actually expected. in, gross we

QX, now the where the some that expecting our second our of in gross are sort a and Day recall advantage so business. efficiencies, some seeing during mix least. took in for throughout of to we you our And margins in of they were and QX, little commentary bit quarter we're additional year than weren't Analyst more at QX, If at product was to be we there the favorable was end baked

for I we're manufacture our for we of a these people supply think because chain to and all proactive to protecting we're example sure, given be that, gross it's now. time have challenges, and And important a though, faced with very able getting right difficult consumables parts supply in sources have so our margin making really customers.

off we us. for proactive of our year, So think full for it's is effort us a guidance balance the which And this it's for I reaffirmed the paying through year. why

Troy Jensen

Chicago. work, and up keep Okay, see let’s it in the hopefully That’s good

Shai Terem

Thanks, Troy.

Operator

go Blair. of ahead. our with line comes drab Brian question next And Please from William the

Brian drab

calls two at time. I'm Hi, on the same conference

Sorry, I just to the to big hop into for automotive call. second you – case I'm other into in into projects Valley, going to at just need large visibility have any quarter? and like I'm questions this then in secondly, year, had point up? you gained Do the that the the coming works, ask you further And wondering, some project a in type any projects the current XXXX. unit have So two XXX

rapid in further because, very Thanks. you're growth now much. the Thank in XXXX. really Just expecting revenue year we're you

Shai Terem

Thank think larger an you. transactions, we in which comes we see what strategic call post I definitely – in We the pandemic. awakening accounts, see usually

So pandemic. to for is ahead, works, do the in we post do way regular And is which common is I business, us. six common some pipeline our we very usually to have between three processes days the the which in think, months we see

is feel building It's for there's after. this demand were coming we before, after building And year, up, As pandemic the no the confident still about and we doubt very up. that. they discussed

Mark Schwartz

for Brian, Yes, And Thanks, I questions. your think.

I Shai talked executing that many we us. tell excited we think continue in to we've And our a new releases you trajectory, I our are product about new are that very great plan. to process There against be about. what add features, on mentioned, to things for

provide first to intend XXXX in will We quarter year. next guidance of formal the for

Brian drab

Got it? you just last Mark, question. quick And, did

looks making, of EBITDA we're to stack the to like only the plan. adjustments related adjustment going terms that you're is it In to that make

Mark Schwartz

Yes.

recall, the to here as that align going private we our if frankly, we were are But costs the SEC. company, stack we we and a you consider. highlighted do what with feel and as comments some additional to what was still wanted we So felt important through with filed process,

will all to So have continue we to sort highlight speak, is referring adjusted to, those number, one that we what do we're costs.

be is able to you you'll well. those costs how So to additional model want extent. back that's It us; as we out

Brian drab

very right. All Thanks Understood. much.

Operator

line next Jim from with ahead. Please go comes the question our And Suva Instructions] Citigroup. [Operator of

Jim Suva

the impacting with you on put Thank all more customer, shipping what's think manufacturers has raw should bit delivery, talk much. kind like also we still of about costs you Shipping of you Can about stretched? better going coming your costs to are materials that wondering contract that the for about costs? very they our bending? and just And or to little like your or steel in are going equilibrium shipping that Do around off items kind been you or about world been expensive. the times a aluminum and lead door in getting

Shai Terem

Jim; you Yes. thank And today. listening for Thanks, in question. good

the experiencing we're many companies that think are. I So challenges same

the source it if liable attempting secure buys can or the in are secure simply More secure we of We in we are than negotiating proactive to parts, securing to we of a we in down like not approach our now, to we're be outlaying supply road across best so different and it. are very been the vendors agreeing even secure board be to the point, how the to secure now and critical in a the those past, fashions to others try have we at to longer-term price the cash and pricing number supply future. other particular with get either

So a in is is it challenge continues this to generally, every a as procurement that particularly but be area. day, time stressful

like aren't In our customers, been the able our have what that To them. any stable keep to I we effective we throughout in to given terms that our we've the supply to through that. that we managing chain every attempted getting we're surprises undertaken the customers, can negative and have that's focus for materials on. think of – our promised, that And item, do date this being day. to product as to efforts pricing is the is there From so we perspective something our we also shipping, important most extent

Jim Suva

different much. I'm with wondering or long-term first okay. is higher, And those be do how your aluminum, supplies. consumables you. index? just Are is printer with I'm your quick your by all, themselves for they mean when I thank that Do it it? contracts? buy buying follow-up, substrates And I copper you based adjust consumer, Is Thank upon both will I of printers of and they or then prices typically aware what also, a your And you with it it, if so Great, go that is my customer.

Shai Terem

Yes.

for with raw how we materials ourselves. material similar consumables. production our chains of suppliers, with printers, the the do our So we manufacturers manage very for of we manufacture Remember, similarly to consumables through supply our the our

materials So produce, then the critical that material to ship component combination used to ultimately that materials the the raw raw so for us of the – produce used that our to and we is school is customers.

in how similarly are very them we those view we tackling challenges. So

Jim Suva

the you details. job, great the for details, appreciate and so much and we all Thank

Shai Terem

Thank you, Jim.

Operator

this at turn I And for time, the call to back Shai will now closing remarks.

Shai Terem

for your much in to forward next participation you to Thank looking the and quarter. you very talk

Operator

thank That please disconnect conference does and for participation you your We that call your your today. conclude you ask lines. for

Markforged Holding (MKFG) 13 Aug 212021 Q2 Earnings call transcript