MKFG - Earnings call 3 2023 | Markforged Holding Corporation

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Operator

Greetings, and welcome to the Markforged Third Quarter 2023 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Austin Bohlig, Director of Investor Relations. Thank you.

begin. may You

Austin Bohlig

Austin Holding I'm XXXX of Relations Investor Conference Good Welcome Bohlig, to Markforged Corporation. of our of Call. afternoon. Director third Results quarter

release announced We the on acting our Shai our the CFO, be CEO, is of results and and will earnings With discussing call press Terem, issued President me Assaf as today. in our Zipori.

during management's subject or which and of I'd that the and as provisions to management Any made views making XX, law, XXXX should Act actual material call could statements disclaims to not this November any as Before intention other obligation, to everyone forward-looking statements. forward-looking facts will historical deemed estimates represent to today, that of in include are statements remind we be statements and of this materially. Markforged like get results safe be that to to cause of are revise Securities started, except uncertainties pursuant risks differ the update XXXX. that forward-looking call or Litigation are contained by statements be harbor statements. statements required Private Reform These

come to Also our currently press reconciliation today's during of we non-GAAP on investors.markforged.com. after market non-GAAP call, issued a can release the measures. be financial website available which There's schedule refer also versus course GAAP our to certain results in today, close at

CEO Terem. and Shai I'll to of now turn call the President Markforged. over

Shai Terem

us our you, thank Thank for XXXX QX Austin, and call. earnings everyone, on you, joining

close line results $XX increasing resiliency quarter. in remains macroeconomic the with were reduce rates for million. to uncertainty to weeks and on manufacturers chain deals our The and long-term of a our with costs current strengthen disappointed opportunity to ability supply material We medium- top Markforged X the last the third quarter of interest in While impact intact. help

view. our updated XXXX to also current on our pair release, October outlook shared reflect we year full our As XX we have

in final mid-September, macroeconomic in Day XXXX expected Investor the were and our attainable, believe in that large of several our had we delays weeks we target quarter, we At in still to close. headwinds the accelerated deals but dramatically saw

into progress high fourth continue uncertainty short investment believe macro in and of the in to persistent that cost term. will capital the environment restrict we As we the capital quarter, the

even In we focused these operating accelerated light have our in efficiencies to a to cost align There improve with and and our $XX and operating cost today, further, -- cost on of announcing driven million approximate remain our demand. XXXX, our balance reduction believe This efforts sheet headwinds, reduction. resiliency savings ability $X but to other will initiative, expenses we profitability. laser addition, to million on operating coupled anticipated we're expected initiative strengthen is to that profitability near-term innovate efforts, an in XX% without by approximately reduction efforts headcount restructuring compromising to deliver match of grow to path

we clears, Autopart, conviction powerful that to the strong positioned our confident to that, seek heard driving chain remain. trial macroeconomic [ for Food strengthens directly trajectory. our [ and ] in Markforged provides growth. Investor our ] and automation forge fundamental well ], more This digital as flexible growth alley goal. our Aerospace, and Musashi Dana remain [ long-term Vesta [ is we reduce manufacturers this a And The With ] for [ ] Day, Ford, as from Asit customers, resilient achieving supply systems, costs uncertainty platform

facility. digital ] forge. investment printing using these manufacturer gained and in of [ Mark on a began our factors Musashi differential a we're savings expand cost excited Autopart, printers additional the significant by worldwide, industrial and Musashi expansion mark Ethylex over over Two facilities from To XX with about achieved, and of uses one further XX% across the applications. [ Musashi to in digital facilities the opportunities other different Musashi. benefit substantial their Michigan With Musashi deployment globe. for efficiencies gear and now X has expand and grippers to examples, its leading assemblies forged let forge operational ] their XX Over manufacturing

where another needed In parts printing QX, the hassle we platform Source distributed and of or XD towards the when physical manufacturing of Source. achieved an launch of critical certified the milestone parts the for on-demand Digital Digital licensing of they future and are inventory. with manufacture is

in to catalyst building streams growth will the out as we revenue of help expand own the us opportunity high-margin are focus seeing Markforged is early solution our XXXX will we customer excitement into While signs years come, in for a from be their platform, base. believe already the customers

early of of store machine full X at and costs. a replacement installations digital source, features BMF, bring One earlier our XX minimizing shipping over stand is machines digital printed specialized adapter which running are BMF on-site lasting manufacturer inventory X on customers worldwide. complex XXX can machines BMF is [ or Each components where typically as every ] the are With replaced as when to well with capacity. detected, months downtime components,

track our record Formnext. new Continuing products innovation, week of last X announced Markforged at

of booth for as reliability floor. as precision large our as the the the XX, first, product is FXXX Markforged in and supercharge fast The productivity was build nearly on composite The FXXX Building beyond is this factory predictor. next-generation the excitement and but profitability. to twice manufacturing printer a world. and XD on

capital challenging of balance and orders time. extremely cost We to building is backlog price value are between even our customers a as already of the attractive, under

announced Vega, is addition, and reinforcement, for applications Vega with compatible also unlocking aluminum strength material part. tooling. In aerospace highly aerospace tech printing carbon an for field XD fiber fiber high-value carbon ultra high-performance we

Both And strong into and on our accurate printing aerospace new forge. helping were solve customers digital Our innovations the customers are more factory applications deliver and market shipment. by increased Formnext visit complementary these parts FX highly impressed for the further first addressable eagerly our floor.

Formnext profitability, resiliency industry waiting legacy to especially needs am one from and strongly that challenging, chain. new strengthen pent-up back of on macroeconomic offer the PXXXX now control, the last year. is manufacturing and performance the Assaf remainder FXXX, to reach on is effort on details we that clearly that, call believe who critical our critical believe So meeting for bright. position of and this the source With environment last of XX, financial digital years over the the Zipori, a which while focus very the the few I'll success top FX week, the team current after There CFO, will acting over coming future with I will for for to shipping. are more sharp proud strong and solution our innovation achieving long-term our start platforms the turn is our milestones to demand, we guidance company is supply cost

Assaf Zipori

financial quarter you, evening, will the be Thank note our XXXX. covering results and and third reflect for I everyone. outlook. that results Please my comments of good Sai, our non-GAAP

our reference, this press and Investor assist issued our our your to release includes commentary. GAAP Relations earlier afternoon non-GAAP website For earnings to with my reconciliation

So let's begin.

the the the stronger-than-expected $XX.X months was lower first by production, volume, was in of revenue of compared which X for the to of the The FXXX million In $XX.X for profit decline were the line driven of XXXX. $XX.X gross million towards quarter macroeconomic for announced by of sales to to the headwinds impacted quarter million third quarter. XXXX. XX.X% orders XXXX. million QX continued to XXXX first compared the Gross margin ramp Revenue end $XX.X continue revenue In until delayed the XX.X% come our of with margins X in was third expected was preliminary results, the to spite quarter is mid-XXXX. in of also months

loss commitment weighted third operating quarter ] from quarter million XXXX. incremental the shares on efficiencies. million for of This a outstanding expenses average in million. the XXXX, $XX.X our or Net of third and expenses our of XXXX in is down our continued were million a expenses improvement $XX.X of third the share $XX.X [ operating to $X.XX of loss Our efforts result was based operating to of quarter the per for quarter reduce $XXX.X for

Our X from by approximately XXXX activities cash operating of X or decreased months first XXXX. million XX% first in of net in used months the the $XX.X

equivalents cash of were at September investments XXXX, $XXX million [ XXXX. ] from quarter short-term as down million cash, $XXX second XX, and the Our close of

continue utilization time and working decrease to result as revenue, continued with We to higher cash OpEx on expect a of capital our management focus efficiencies.

weighed our revised Now macro guidance. we behavior revenue moving The $XX of high expected. our and to million to have on and capital purchasing customers' more relatively of Therefore, maintaining on $XX million. are uncertain than cost environment our

range to be within still previous margins range guidance. XX%, gross the to expect of We XX% of our within the

and expenses. revenue to previously communicated, we are As balance between committed

efforts As announced generate in restructuring with our cost million. range based such, other of are XXXX. we to XXXX million $X on have that $XX of annualized cost recently $XXX reduction OpEx OpEx initiatives expected We million the approximately together to reduction

Furthermore, to continuously we utilization. cash our optimize remain committed

operating our which costs. per cost confident generated, $X.XX, million be share reduction increase growth approximately keep the $X.XX trajectory, has are restructuring taken $XX path that and beyond. between to us onetime our $XX With in a this market is together confident the a introductions of for recent to ability that XXXX Our of have million, excitement loss to we loss product cost we year for with are expected expected our range EPS be and we the and measures, grow including within and in our to on Furthermore, profitability. restructuring including share $XXX,XXX. is the

prepared our concludes That today. remarks

Let's please questions. call the open up for

Operator

Instructions]. [Operator

comes Capital question Craig-Hallum Our from with Palm Group. first Greg

Greg Palm

to on you what have get in Maybe bit a weakness. whether, more just of close, getting it a Just what quarter. end whether little most large detail you the curious us of be little just the those drove certain starting here still end of saw relying weakness. closed several a, quarter kind kind end just of orders can of Or that off QX? of was on did if some were color you sort those with of on customers end bit that delayed, verticals didn't are kind saw pushed? or I'm that you And orders clear, more those give

Shai Terem

Thank you, Yes. Greg.

and that mainly we was of expecting them bigger you in the of would mainly say, the this of end And large can at the decided decision-makers due in deals deals it we're ask the and expecting they the I some to of you back quarter wait as the got from uncertainty, and and but QX, macro funded, see them got that that performances. the close Very and knowledge environment ] second, XXXX. XXXX. delayed can quarter in previously, [ With we them to due successful. until large already the we into owners see, the Americas, pull even on APAC had, to were was closed based to fairly close and So indicated that, last the some out next as fairly sentiment delayed portion which a on were we Formnext, question, as the to uncertainty fully to the the macro or came from but

are confidence starting we back. the to So build

Greg Palm

it. Got

one kind maybe same the sequential Okay. of of a think that consumables. And basis. volatility nearly of item I to consumables a wouldn't on out and that lot us lower, sort of was was a both magnitude stood and as year-over-year having

a there, on of drove terms out before? where that? saw of rates and of are difference been forward, was you usage based the that trending kind months in installed much you the going we've just seeing what in recent base versus of So significant phenomenon How

Shai Terem

think kind that. X I around are points of there

usually one, of with that materials. purchasing first of when comes when materials, the so buy is the The us of buy of purchase immediately in a they point from printers, time there our significant printers customers drop in also reduction

utilization. The we know, a your do you company. small in see think not which a I we're for still second, as drop question, But

And we point So was sell pilots that of few after could left as in recovery partners utilization it time the our a right with time, the a see end right direction. the quarter. And of usually the the stay point such, move of right materials channel or them. through

any front. that don't on concerns have we So

Operator

comes with Stephan question next Markets. Our from Lake Street Jacob Capital

Jacob Stephan

think how Maybe the to on out lays about of of of kind $X the I'll the XXXX? restructuring million model Could bit. just million a what and initiative comes little you that out $XX percentage touch over help us

Unknown Executive

question. for thanks the yes, So

$XXX and million to are we of grow our run from board, OpEx. $X The to reduction at departments. be across million compromise So $XX a across and million innovate. of in to the we're is ability going Without looking rate a any approximately all on reduction

well are and So and departments, for XXXX. encouraged positioned across the with all we it's outlook the

Jacob Stephan

as impact just are to quarterly, in of I see sense the down we Okay. kind steps of kind I could million the And the QX to we QX, better of thinking guess, maybe QX million $X I get that, a $XX majority get mean, [indiscernible]. on the of -- QX,

Unknown Executive

line on. Yes, in would When look a at in, QX of between bottom in the $XX the marketing million be that events the between should It is you given $XX certain fluctuation rate the obviously, have And annually. that Qs there's course. the so OpEx basically, run sales, XXXX. and so kick level and of numbers, we million

the would $XX be $XX million but run million. rate -- So annual to

Greg Palm

digital services kind that Is Revenue touch XX% on Okay. on Got touch it. forge? of you're Could in business? was what the to just the services. want Blacksmith strength, And that you I the is up just year-over-year. seeing

Shai Terem

you ago, the And to it to software with it. changing to the fruits around see talked if tools the remember year starting inspection. we And our service simulation and a adding model of about Jacob, Yes. we're about subscription. automated

a So level it's think we box. are but level the starting to are to When kick also I of printers, higher where buying And in. the of attach turning renewal is of people right rates. rate this see out higher

of this So we modem, ago, we're the now starting a see revisions it, to it. and did some fruits we announced to year but

Operator

[Operator Instructions].

Our comes next from William with Blair. Drab question Brian

Unknown Attendee

Are If in are upgrade looking you Or ask, details to to is remarks. about FXXX This is existing it I from some or guys fleet? backlog guys customers you could on printing? Blake who mentioned provide the add these for prepared use to XD new the Keating XX just customers additional the the Brian. can beginning

Shai Terem

Thank you for your question. both. It's actually

reaching we back and And of very prospects coming the it can it, right from of potential see just to kind had we printer impressive you launched after encouraging hundreds into videos touch Formnext. out event, of was are if We trying the it. very,

existing which this interested looking printer about backlog the So reliability the already of on customers, it's but also solution. customers but the in we also What's orders. new legacy XX, We're price of nice dozens currently see this of are that the really on point. solution, up building of really

point capital the pass good example, very can in price but is So customers, which here very than channel sub-$XXX,XXX $XXX,XXX, in times to solution like this with the strange better spot around this. partners, cost FXXX like a sweet to also our our much of environment, especially for is the easily times bar,

Unknown Attendee

of Appreciate of the do some the color. FXXX, FXXX? like newer you're on And XXXX Understood. Source for the products the cannibalize that then building new just Digital could that, demands from you anticipate or these customers the launch seeing that

Shai Terem

their solution into that traction opposite. pushing last what step officially Actually, their supply OEMs started seen these we first base. OEMs And chain to for was We are Source GA. exactly big big from into customer successfully. the the a is actually, formnext, our And Digital in launched solution. lot of The see that are the looking week we've or

So Source and very materials is of of a impressive. increased our printers and not of It's and adoption the actually it. what Digital software or see cannibalization actually an reality in we

Unknown Attendee

touched is revenue about to of I how where kind Understood. with can of think And there then profitability? Are should growth on you for balance expect you how additional just encouraged about what on you you're macro think that? in focus you that and know it have growth seeing the you're mentioned guys lastly, we we But how profitability. -- detail Or you is But so by -- XXXX. far should provide XXXX. you're more going kind any

Shai Terem

Yes.

With in our very And which to the really especially we new even the are complementary a we cannot we because legacy can that and of some still that, and we macro next, coming our say out especially portfolio with there, of tough product price product right believe portfolio. the point. still environment would uncertainties I coming grow products in are them. strong out a are control So is

So how direction, the we up. but be macro right decided it and will the believe by the in clears final environment we're

Operator

time. the there back questions gentlemen, hand further remarks. management are to this for floor closing and at I'll no Ladies

Shai Terem

And quarter. us Thank Thank our you you in much, call. joining to forward you. everyone, looking next very for see on our

Operator

today's concludes day. disconnect. This a conference. parties you. good Thank All may Have

Markforged Holding (MKFG) 13 Nov 232023 Q3 Earnings call transcript