MKFG - Earnings call transcript Q2 2022 | Markforged Holding Corporation

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Markforged Second Quarter 2022 Earnings Conference Call.

As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. now Director turn Markforged. of would to conference I Bohlig, Austin Investor Instructions] like the to over [Operator Relations of go ahead. Please

Austin Bohlig

Markforged results conference Good Investor our Bohlig, Austin call. quarter Holding of second XXXX afternoon. to Corporation. year Director fiscal Welcome I'm Relations of

after call and be issued is and Shai the Terem our CFO, press discussing With Mark today. will announced in President close We earnings me our Schwartz. our results release market on the CEO,

website President versus Terem, Markforged. GAAP at Shai our after Executive also investors.markforged.com. to There differ remind law, get schedule everyone materially. non-GAAP of that the by to or management non-GAAP estimates market which the started, now over release making found except I today's Act during we of These intention Chief should obligation, forward-looking our XX, Markforged to course and harbor cause XXXX. statements, statements. we any the measures. material to and be to press reconciliation during be statements represent I'll like Before Litigation Reform available be historical in statements XXXX that disclaims required of deemed Officer of would forward-looking to call, provisions close the risks Securities Any refer safe to revise pursuant of will this that include on financial the contained results update not as Also, Private uncertainties are facts, and call is made or issued to this currently a can statements results today, be which today statements. in views call management’s could and forward-looking as that subject August call are of statements certain turn showing actual are other

Shai Terem

to in thank a you second us quarter. again, that call. XXXX QX earnings And on I'm the Thank delivered strong joining for performance our share everyone pleased once Austin. you, Markforged

$XX.X and strategy pipeline for all Digital continues our Revenue grow year-over-year. opportunities against our portfolio. second and execute geographies. the to delivered increasing our long-term for Forge globally segments was across Demand robust continue complete and of We million, XXXX XX% results strong of remains across the quarter

ranges stamina in money. Kevlar to activities as support to printer zones. helmets replacement to airman’s part The devices real-world We is air this to several parts XX carbon to a application affixed Force Air while airmen and forged fiber tactical U.S. to digital materials, Base to parts point number the Onyx. advantages able agility that they print especially as our recently supply solve chain inventory solution. software. see Onyx for saving by in customers several begin environments with collaboration lead rapidly from and who time improve screening pilot elite conventional mounts, training specific relies to growth EMEA APAC at as in customers of an the there, Cannon hundred build of was team applications the vision where turn, X realize technology goggle pattern the they dollars expand. $XXX with and industrial-strength aluminum Force soon are using And of industrial mission to printing and our of and match usage Our Markforged to case on over to mount special cloud-based starts year. build. across each of increases the published From op The XXX able such On ran deployed our need the our the America's number night onsite Mexico, the force with the critical weeks the fiberglass, in with We customers manage a study XX New in The the combat Air regions. install also

While the us we've savings They have few time of the cost ready is ever best hours. Markforged printer Markforged both just done. savings things a and bringing parts the one less The force. $X the and told air in is than been cost printed impactful to

mission already As through resistant of stronger to customers they manufacturers for multiple look the the high to exceeded that latest with to expectations. looking release, solve critical large has Forge, our speed increasingly and units. format ability FXXX FXXX demand metals, than have have more print are examples parts our applications Digital We product ordered size, the temperature its

to fulfilling the been have volume year, by ramp the for as of We globally production orders we few continue end towards and committed. months past the

solve on to goods. complementary medical metal existing technologies of is this creator be capabilities long-term now leading throughput, AB with strategic on believe advances Metal, acquisition distributed of acquire high parts. focuses our manufacturing. also seeing our to month shared industries and our Höganäs point This market, acquisition strategy forward consistent on X jetting binder Digital of into entering while teams And vision. long-term reliable. together to look known jetting reached a the vision precise addressable strategy Our to collaborate Markforged We solution into complement and extend manufacturing another within includes binder our our agreement the for that to by journey technology at deliver we milestone luxury industrial of Digital empowering important Last expanding additive Metal solution production definitive metal to automotive, challenges our the manufacturing a with customers need. our

we to strides acquisition, addition continue pending innovation great Metal our In to make with internal Digital efforts. the

our or year. Digital of I proposition parallel. believe will of continue market to additive the solutions to by market very product planned development developing Our continue ensure strong driven the addressable multiple a programs amplify innovative enabled that the expand we portfolio feature sheet has This deliver the that balance product we Forge. build product us effort with exciting roadmap in are with major product strategic a our most to team to innovators acquisition, have engineers and Combined every powerful and our engine value a release that

to continue and excitement strong our in future. current We about interest see product the

impact is timing of volatility customer the current decision of However, on purchasing short-term pipeline the global and a conversion. having economy

of While is this this more led current view than stronger a has to and We the our lengthening own diligently behavior. of economic our as cycles. uncertainty scrutinize sales ever, decision. environment actually work accordingly an cost reprioritize even us our committed The through Mark expectations shortly, I effect that will strategy. opportunities remain natural opportunity and realize has current that own net to It for us. our We adjusting firmly controls near-term is internal investments. is the a but we specific is wish the prudent working. our believe pipeline

keep efficiency continuing our straight-line plan achieving strong and driving and a for organization we XXXX. to other balance strategy, sheet We’re in breakeven strengthen on continue With to on product product focused our exciting portfolio.

We near-term build to advantages pipeline won’t order investing Schwartz, chains for long-term directly Mark where our opportunities more long overnight. who’ll the the Changing point in believe during and uncertainty, eager and guidance this term are by here period That are CFO solidify to to and of need. supply the realize think in now of demand. of robust macroeconomic pushing this our manufacturing and Our turn financial I offer advantage. is of that, a and future happen prepared the is to continuing the for the even With a details It resilient our performance is we’re year. call why to journey over on best are way to take and I future capability digital portfolio I product sustainable mission. remainder of manufacturing the

Mark Schwartz

six and update and Thanks, comments Please non-GAAP our second Shai. XXXX, outlook. ended our results financial well XX, outlook I now will for quarter as months year for review XXXX. reflect the June full that my our results note as

XXXX second to $XX of my the reference, for $XX.X million to compared QX your million and afternoon was for second with commentary. quarter includes reconciliation investor the second $XX release this to GAAP non-GAAP XXXX. profit press our assist for our earnings compared For Revenue our XX% increased to to revenue million of posted the of XXXX. $XX.X relations earlier website of in issued quarter with Gross quarter million

in As a gross generated of to XXXX. profit we first result, XX% the compared XX% of a margin quarter

XX, revenue six $XX.X was months six of million June million the the XXXX. XX, for the months $XX.X XXXX XXXX June with in June period to Gross for increased compared ended for XX% For $XX.X million million $XX.X profit XXXX. six XX, revenue ended compared ended to the months same

first As a generated generated to result, we XXXX. XX% profit of a of half gross margin compared XX% the in a margin gross

to experience including of impacted exciting costs in this in margin of increases has component XXXX indirect gross as and new half in material FXXX pressure the cost costs, material margin as been well a that we by component continue one freight sold. product broad which second value backdrop, against to labor Rising demand as gross quarter the of on QX our customers, XXXX, platform production. and inflationary previously, continues logistics, powerful for exert Forge continues material the I’ve Our supports launch the direct and the ranging goods costs, they labor the higher first But to this mentioned commercial continue as a create Digital differentiation. advantage and to and our costs to ramp

the $X.X increasing continue In infrastructure to we quarter these million We our R&D for in the Similarly, quarter, increase in line costs, our Moving we million for first XXXX first second growth million $XX.X by in public the by we to both XXXX, spend innovation first second XXXX plans, of $XX quarter the million in of research of million incurred of teams second XXXX. XXXX. XXXX. were spend quarter Operating the quarter $X.X million half R&D on investments $XX.X a company compared for to million million efforts, development half go-to-market year-over-year half half $XX as compared with XX% first and by accelerated expenses during compared increased continue $XX the increase, grow in with strategy. was first to The to second expenses compared planned activities driven on. long-term the XX% for execute and the to the in operating for XXXX. largely of of and our half with $XX

to is future teams We current XXXX products innovation and our team now on will strength with grow of working for XXXX. our and that excited continue are the the

$X.XX of share. or loss net For loss the second our quarter million XXXX, per $XX.X was a of

For a ended our June the or XXXX, share. per XX, net net was $XX.X $X.XX loss loss six of months million

the $XXX first our million well on and Finally, of year we cash with exited on goals. execute plan positioned to a balance the half of long-term

Now onto guidance.

of are to which compared This that million. range. $XXX updated the represents reflect the midpoint for volatility. considers forecast, the range XX% approximately be revenue updating million growth to our year-over-year year our current to XXXX anticipate financial within macroeconomic We We $XXX XXXX guidance at of to the of

year to We expect the XX%. range the gross for of margin XX% fall to within

our to of we of share. Given $X.XX the revenue and the revised EPS also be EPS anticipating $X.XX $XX the loss reduced loss to range per a forecast, million $XX for have range full million results the profit year an operating year to for in in and operating

reiterate for balance Operator, sustained cost profitability with to up questions. Finally, we’d please the without that portfolio need like further remarks our to of and us strength product our expectation sheet controls That coupled prepared today. raise to strong will concludes discipline our carry call the the capital. open continuing our through

Operator

Brian Blair. is ahead. Thank question go Instructions] Drab first Your from Please William you. with [Operator

Brian Drab

questions. Thanks taking Hi. for my

the break don’t without drill I into I’m out is headwinds? and be drive course of we areas is, might just I it margin. fees, the would you if trying headwind somewhat gross be right of know to to and temporary more materials, to headwind The gross call can specifically? parts discuss So you et at these whichever wanted What area Mark, first and expedite out inflation out you costs, way are maybe into, cetera. margin the component now where what can able

Mark Schwartz

Yes. Thank you, for Brian question. your

to relief. in of being we would pressure overall, board begin we I tell what I case the very costs year, I are us of certain by still pricing the some that would real. In the there QX year, a where think we’re starting strong higher very, ramping similar you’ll next still seeing in call costs as are are in we back call the wane previous the and impact we’ve that reaching with QX terms next commercial the costs, seen think very is very of think component specific FXXX. the but see but across are costs you we And highlighted for of in and challenges we still of end what are volumes. out, line see logistics But higher component and quarters FXXX, of pockets that last that areas, to challenges to the this the year quarter really

continue through higher for I the previous year. we’ve than then at think next are materially end least the the seen will least and and but goods But honest, warehousing And cost to costs, potentially that and not. moving to a around seen logistics that higher at or going if they think first quarters, year of of into hasn’t in were sustained world this I in that subside the in of half And us year. the world freight we’ve is those this certain be around goods the subsided. I’m not increase don’t

how ramping of to would We’d than versus difficult out is The have point. to So means. that of X what of quantify it’s a not to temporary. more little is perhaps stay bit to the of do I is, tease much how is this work But temporary. it’s FXXX percentage this suggest much here

Brian Drab

not FXXX point. than the On more X percentage

Mark Schwartz

Right.

Brian Drab

Right.

Okay. Got it.

profit, same just think Yes, obviously to that to Okay. then we’re XX% headwinds modeling to like, And I’m model who think or XX% the bridge for or to I’m the for just gross trying originally, back I just I’m it call getting when just just I understand not trying the feeling and I But that to figure predict things bridge normal. to you I the the might – year. but to XX% if trying mean, was expecting trying everyone’s – somehow normal, between percent feels in so XX%. I’ll think gets knows, my back – where to I’m component. just out make be trying to to the it get trying

interest are has seeing lately So there. for seeing last how up just in just push orders thanks A pipeline outs lot on, orders. held of FXXX? then now of for you’re that ask question if wondering for that. companies or the I’ll is of the And And the terms some Thanks. of

Shai Terem

say pipeline I you, increase. would in Thank that Brian. continue Yes. the to general

are We definitely few the the due we macroeconomics. expectations. it’s our next ramping a in for especially a FXXX, in we see the level record for We And quarters. little shared see exceeding still are to as longer up bit us of do cycles the sales

and see us. to and call. inflation think going final bit they from our perspective, I other make little record with before is places more the want pipeline But the what’s customers a on in current situation demand for level

Brian Drab

Got it.

Thanks. Okay.

up So I’ll more follow later. you. Thank

Mark Schwartz

Thanks Brian.

Shai Terem

you. Thank

Operator

Jacob Markets. Stephan next The from go Capital is with Lake ahead. Please question Street

Jacob Stephan

global guys. taking was printer? the you some on highlights, Brian’s areas, off what Hey you FXXX. channels? geographic just the had the were areas for strongest piggyback are Thanks question my – weaker were of Maybe to the demand for What said What and the strong of – channels questions. the

Shai Terem

in for order example. the demand have we a to FXXX that say really New would from the I course, Of strong globally is level globally, of Zealand,

industry across around manufacturing really machine real the and are say that shops and I would strongest parts replace and solution. aerospace metal critical with it’s the looking the is board. to others mission especially So

the So do the demand that say it’s FXXX is weak. see solid. can not really for anywhere that I I

Mark Schwartz

And for is units are would to see the which orders really now first in, I us. time add starting multiple coming we of exciting for to that

Jacob Stephan

consumables What in like been materials are Look of consumables. have the stronger some on just Maybe segment? helpful. That’s Great. up nicely. that

Mark Schwartz

there we is call that think don’t I would out. one

those that you PLA series demand That’s is well. quarter, material materials Last and revenues of certainly would new that But nicely we the and materials across released there robust a for seeing largest materials. I our as are Our there’s from our new selling ramping material we’re precise is demand that. Onyx tell board.

really it’s across So the board.

our would we any what think we usage across of I printers, the a – is not healthy very how view specific in this material. board

Jacob Stephan

just flat can it. expense Guidance quarter-over-quarter. the and general? one thinking if research be sales numbers relatively marketing Maybe in OpEx me one. about I’m just and Got last through Maybe how implies walk will crunching you you’re right,

Mark Schwartz

Yes.

our have said, control that seeing we’ve and all that is of are what think we costs. I you hopefully

believe our focused We us while goals. Look, to what to physically our have fairly our be maintaining grow, to growing We we areas business to that that reach efforts. responsible, strong disciplines on business. enables of attempting innovation definitely we’re it cost across and be our remain

We the taking for opportunities are middle. I absolutely sales optimize that foot G&A. our certainly slowing our And spend you in our to go-to-market off us in marketing probably somewhere would sales that But the and tell are gas. we’re our not and our efforts marketing spend. There’s efforts,

Shai Terem

Maybe I’ll add.

in looking XXXX, operational to we we the as to get committed shared are, and show breakeven leverage. as We such,

a XXXX of the see you’re going And in infrastructure operational did and investment to building year I leverage it. that’s come year to I this think and in we significant the SG&A across So up. R&D, part in think

Jacob Stephan

the Okay. in Thanks back queue. guys. I’ll hop

Operator

next Please The Suva with is question go ahead. from Citigroup. Jim

Jim Suva

Thank you.

question As looked now, key your of indicator kind caused to them or of couple items? more. both And on recent in key what that concern guess I’ll were like a around a at down performance you metrics the or the potential kind about, have follow-up timing year were adjusted variables the even things full the then would the these be, kind mid-quarter, for outlook past because the we softening of of some of do have risk kind they adjust I of weeks of very

really just take revenues were so aware for be and you the of know can if margins lower So kind the KPIs those. we what that of to caused the kind it could let of us you

Mark Schwartz

more a to from share Thank believe perspective like. forecasting for time Jim. Thanks is we really but you, time looks year what perspective, a This our trying a this it’s from challenging Yes. challenging question. in your

much What our really taking our the physically have so our know And what from folks can are for conviction don’t conviction you, our strong to think in but pipeline. we to that are reflect and at our own example, very so sitting in around us to perspective others chair I We causes we I And sitting have guidance. bring do when that I a mentioned responsible in there’s prepared remarks, down my We we look uncertainty. around it my think don’t are it’s chair fiscally close in macroeconomic near-term expenses internally. tell really, doing.

Jim Suva

of that, week timing put the trying things then fresh together? worse because allocate month of the days, And the it a updates you could two, the that actually just I’m or to two next past or or in or did in happen up about like XX are very those here risk

Mark Schwartz

We about to And how our the recent share strive do. always that and we put we this best attempt we information – thinking. that’s that’s to guide and case, of most what the and how think we level is always Jim,

and recent week. up best this our even thinking, late this So last is most week early and to

Jim Suva

greatly for so and Thank details you much additional the clarifications. appreciated. It’s

Mark Schwartz

very You’re welcome.

Operator

The question go Sachs. Hall ahead. Please is next Goldman from with Rod

Unidentified Analyst

Anmol orders just it pipeline half. confidence to how I levels full it comments or the understand original this Thank growth in I versus for order visibility I to are of wanted little they’re can any slower provide that guidance. for were than is is And HX? expected? terms What also And order wanted guys, dig you the to second that plan? like, also the in binding I is check into is I Is if mean, the Hey a about you. us. strong tracking is it on the shortfall the but most Rod. wanted FXXX, check where for – your

Mark Schwartz

Yes.

Thank your of couple you a for So things. question.

able get customer, build an foremost, significant don’t it. that when are think We from forecast backlog. any leave with fulfill and so a to we I we to quarter order the a we first

very customer we our what portfolio are As really we Folks side. and get today, them. then were quarter believed be a and optimism the and are to material from about strong including excited we existing we on excited results our what offer our base. excited fulfilling even orders, about have binding We for very to quarter. about last expected the had more We product

direction just prudent not our what’s for So doing out seat others planet. we What in headed. skis We over to about this we’re it feel are a consider is really around and us great bit. the feel happening the getting

continues demand very the perspective, to our from So be encouraging.

not The are that for as not. pipeline spend variable how ever. considering the stronger we for Our than only, year out our determine we’re the brought that the is significant want but down only variable push to and maybe my a is of folks have that seat or the most – they that quickly we that conversion quarter in pipeline guidance

we We’re not our seeing an from to prudent. be that as attempting lot awful of see are can but results, you

Unidentified Analyst

it, Appreciate All right. Mark.

Just to follow up on that.

moment, mean, is you in or this expecting, in to all at you one the skewed FXXX? according more around? expect the lines be slower other and to prudent than FXXX all a do or So towards other? too, product Or are it prudent products – way being being I way more is other it like little the

Mark Schwartz

current the I don’t that particular. uncertainty impacts so anyone think across product in there’s think our line, We No. economic

So, not question, hope but in seeing answers your no, product particular that I any line. we’re

Unidentified Analyst

a Appreciate lot Thanks Yes. it. Mark.

Mark Schwartz

Thank you.

Operator

is from go Greg question next with Craig-Hallum. ahead. Palm Please The

Greg Palm

the wanted gross the margin second guidance I on thanks taking follow up for for Yes, questions half. to here.

XX% So about at by math, running you're year-to-date. my

You're guiding XX% at the midpoint.

input are and are comments component bit applies lift more and a costs understand costs it of everything, stabilizing. to get things And or little it going actually So I sounds you'll the worse. like from less on but that volume, presumably

am I what So missing specifically?

Shai Terem

question. Yes, thanks for Greg. Hey, your

anything. You're of seeing Again, share trying not us to sort missing this today. what we're is

modestly of to these very couple XX gross where it margin quarter gross of first coming the quarters. fairly to sequentially similar the for at continuing first to year second points be We supply But first If navigate see point quarter. we challenges. chain of in seen about margins in half We're it's we've see you to the flat. a it from the were actually at the And look percentage XX.X%. we basis our up all

Greg Palm

Okay.

the are guess, slow there, bit or a expecting usage as just down conservatism expected you're the hardware or talking you seeing maybe mostly about. in So of changes yet patterns, this to I that relates any you to maybe this impact Are down revenue? and slow consumable little

Shai Terem

say would impact consumable side. suggested, slowdown extent a then be to wouldn't as and there is I you've the the an it that on

very that model Our really easy another them. out where and consistent, is relatively are our something excited again, to our business and consumable it printers advantage area they're are the we're customers once in field, using taking of because

Mark Schwartz

Yes, would ever XXXX I add now. The always in growing. material COVID, say I went month that, Greg, would maybe, of other I'm the when here almost only is saw than three March we with it usage drop the years that home, everyone

Greg Palm

Yes.

up last then jump one, some get And over quarters? in that's concerned visibility sequentially, you like big took have mostly mean, I finished the Anything off do good. that inventory working that, of looks goods. that about level Okay, another couple next

Shai Terem

We do that. exactly attention to paying Greg. Yes, thanks for

and said, I we think build you've as to finished again, I manufacturers forecast suggested. as contract that of use from our perspective, we much goods, So is

We historically. expect maybe will three, in back to we've experienced next come over the inventory maximum that line what four quarters

Greg Palm

right, of it Thanks. leave Best going there. Okay, perfect. All forward. I'll luck

Shai Terem

Thanks Greg.

Mark Schwartz

you. Thank

Operator

is Dilts Stifel. The next ahead. go question with Please Noelle from

Noelle Dilts

next should in on a guess, of, a it on think from of was how the and ramping the to just bit how about shift hoping I we this right that the over little acquisition commenting terms maybe few bit, Metal comment years. could is sort to perspective you fit Thanks. think about quantitative I thanks. gears a Hi, – why Digital

Shai Terem

Sure. Noelle. Thank you,

all we're key the jetting level volume reliability on technology mission metal that going expand It's out very scale for parts. So time, we're a strategic around, with accuracy they and still would looking have very I solution. why is would would synergetic. is say And coverage global of this I We this identified And we very, go-to-market. and It's to think fast Digital complimentary precision say we to Markforged, chose it's and on as for have go-to-market. wider I of will our that Metal, high believe very significantly it's into applications. our especially high manufacturing, now customers. the parts the critical critical where binder acquisitions And luxury for do still on it. we before, focused that so to we're high application, early it's helping really focused good system. focused specifically we didn't looking as for a play in mission that stages move to we automotive medical volume complimentary When our believe in like we of and few us production addition goods offering but high other end still us. help of really And to communicated for us acquisition With again, production technologies industries

Mark Schwartz

almost not maybe is and focused mature answer material team, decades expecting – specifically what expecting a to tagging revenue the technology, can't hasn't closed question, two not second part onto the of Noelle, of This we're great materials be your because in To XXXX. me, Shai said. we're a but forgive – specific on experience yet, in transaction details disclose We metals the binder revenues jetting.

Noelle Dilts

from be, least material, a Okay. given about cost how I guess, that the associated question would headwind near-term should the we think perspective? revenues there aren't

Mark Schwartz

it in we're to QX OpEx impact it way either. for call our expecting material actually not for So any

Noelle Dilts

Yes.

or comfortable of guess, I about cancellations around would shifting gauge the for Thanks. back great. sort again the backlog, to could backlog that the indicators on some get talked outlook Could metrics risk be the your if of comment you just, with of bit. of then the you you how strong comment and the the FXXX, a Okay. backlog, do little on you've

Shai Terem

Sure.

shared one FXXX. the we Mark and caveat produce we as have So is so can before, inventory customers. The usually ship our to

to planned. will perspective, believe continue pipeline that we that we we in and So the orders see increase from the as ship

signs On even this orders now are very, not waiting orders and rate from multiple more still continue shipments, so it FXXX, perspective. We very as there or there's see consideration up. we any backlog, order orders yet, strong to the systems looks actually And our coming same more it shared, the Mark in. see build of in of do versa. We did vice for have and

Noelle Dilts

Great. Thank you.

Shai Terem

Thank you, Noelle.

Operator

Please The with Jared next ahead. Berenberg Markets. from question Capital Maymon is go

Jared Maymon

questions. guys. for taking Hey the Thanks

First margin, to think just I harp on going to it, gross one important. sorry but back it's

me if but sounds during I you some I'm on correct like bad Mark, it the costs talked So end info, the have of towards quarter. wrong price consumables quarter and if or increases were the there also

just adjust there's underlying looking sticky inflated a you inflationary is some longer do out kind do guess, costs I demand? wondering permanent for these like where at ramp if near materially the the maybe price think price you're we're labor. we consumables of of those and more term, items or to of I'm can you headwind freight a offset and with FXXX kind So this could impact and point because increasing systems on sticky

Mark Schwartz

take Yes, well. I'll some as let this Shai of

from on your the of it or this application build input of looking talk you're materials and is is perspective, as manufacturing buying little need can an And time internally, the items to to Because that we our to part. I think per and we're for the at impact I cost as me And any what per what piece materials. customers you as managing imagine. possible all challenges supply through something financial when about particularly the customer a base that. chain going providing CapEx our significant matter, driver per you're additive printer become part that –

limit something we're So can to really surprises base, customer our focused the on. extent we that, to

Shai Terem

the and our is bid the to used a day and he’s of is to someone equipment, buy add to that, reliable top decision I Yes, think on money reason after because losing once it, help supply not to need. resiliency that buy it's really but parts and maybe it's solution chain you making our any

growth, very that we when volume the into strong higher material way. FXXX, see production would now with continue especially by believe we go from So I to perspective,

Jared Maymon

sense. That Got other margin. that lot I Yes. the folks companies of to the been examples story, having from gone there's points having best growth And makes margin it. than I've their think of most a in at

so R&D kind Metal can invest I or try printer more you one know good up have I Maybe appreciate can that. acquisition, the a but of question, guys you on about, other talked I So think, release is, year. every question, that product to just you want asked new in following new Digital just to a Noelle

of you do Or product is for are organically XXXX for is, the curious or you I'm also those this something developing printer years? or think So kind XXXX?

Shai Terem

That's good clarify. a very question to

Digital but both, inorganic we develop our remarks, more very as activities capabilities organically into meaning to set will shared next our in like our product that working portfolio, Metal products. to in-house continue So, of add we diligently have also it's we

XXXX infrastructure. So of R&D. went we significantly in invested majority that The in into

working are time. the multiple programs we So in same on

well. feature you new a should or as organically expect year So product new every

Metal, Digital and to very, interesting to and be XXXX are continue addition XXXX still in going in very develop we innovate So to years.

Jared Maymon

going And is Okay. the the be of minimal current value overlap? Got do up one customer follow cannibalization it. Do there's different to prop just Digital any on where offerings, or there's you to be believe you think going then Metal. quick metal pretty enough your

Shai Terem

dedicated from production the One into it's X output. size definitely Metal even and and from not is fixtures think our aimed and also smaller the more basically. volume higher tools definitely volume cost more not parts. complimentary, mass it's of I I say more is And into from price and close would

definitely So them. I see cannibalization I don't between think complimentary, any

Jared Maymon

great. guys. Okay, Thanks

Shai Terem

Thanks Jared.

Operator

line your open. is Greg,

Unidentified Analyst

okay? guys you hear can me Hey,

Shai Terem

Greg. Thanks. can, We

Unidentified Analyst

Okay.

guidance a One noticed for up share mute went I your five. Sorry. quick we for that up, about account follow is second.

are X of of result a else reflect think guiding as Metal? the Digital you shares million something to I the going on? there from issued Is last acquisition quarter,

Mark Schwartz

stock there'll options significant and restricted in be QX a in vest and terms of there, the No, there's – that delta QX. of fairly tranche

of at third We'll about shares exclusive Metal. of number We is close from We of see perspective. a year-end that XXX we're that's the are off that weighted Digital average shares they end appear that won't count looking Digital those until the Metal million a after based to our year. guiding of at

Unidentified Analyst

Okay. That's what assumed. I

I exceeding So year. what would the average don't know, the the be weighted –

to you want that? call it If

Mark Schwartz

and X.X It'll it then Metal. be that Digital call from million X.X shares or XXX million

Unidentified Analyst

Okay. All right. Thank you.

Mark Schwartz

You're very welcome.

Operator

over back Terem to now remarks. closing session. for any to the Shai would concludes This the I question-and-answer like conference turn

Shai Terem

you Thank Thank you soon very looking to joining us see for this next forward quarter. the for or in call everyone you. much, and

Operator

today's concludes This conference call.

Thank disconnect and may pleasant You your for a participating you have day. lines.

Markforged Holding (MKFG) 12 Aug 222022 Q2 Earnings call transcript