Form 8-K - Current report

MARKFORGED HOLDING CORPORATION

Date: August 8, 2024

/s/ Assaf Zipori

Assaf Zipori

Chief Financial Officer

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 8, 2024

Markforged Holding Corporation

(Exact name of registrant as specified in its charter)

Delaware

(State or Other Jurisdiction

of Incorporation)

    001-39453

    92-3037714

    (Commission
File Number)

    (I.R.S. Employer
Identification No.)

    60 Tower Road
Waltham, MA

    02451

    (Address of Principal Executive Offices)

    (Zip Code)

(866) 496-1805

(Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, If Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b))


☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class:	Trading Symbol:	Name of Each Exchange on Which Registered:
Common Stock, $0.0001 par value per share	MKFG	New York Stock Exchange
Redeemable Warrants, each whole warrant exercisable for one share of Common Stock, $0.0001 par value	MKFG.WS	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On August 8, 2024, Markforged Holding Corporation (the “Company”) announced its financial results for the second quarter ended June 30, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.

Item 7.01 Regulation FD Disclosure.

In conjunction with the announcement of the Company's financial results for the second quarter ended June 30, 2024, on August 8, 2024, the Company announced a $25 million cost reduction initiative that it expects to reduce its operating expenses to a yearly run rate of approximately $70 million. The Company expects that most of these cost reductions will be completed in the second half of this year. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.

The information in this Current Report on Form 8-K and Exhibit 99.1 attached hereto is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits


Exhibit No.		Description
99.1		Press Release issued by the registrant on August 8, 2024, furnished herewith.

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Exhibit 99.1

Markforged Announces Second Quarter 2024 Results

Announcing $25M Cost Reduction Initiative

WALTHAM, Mass. – Markforged Holding Corporation (NYSE: MKFG) (the “Company”), the company strengthening manufacturing resiliency by enabling industrial production at the point of need, today announced its financial results for the second quarter ended June 30, 2024.

Second Quarter 2024 Financial Results Compared To Second Quarter 2023

•

Revenue was $21.7 million compared to $25.4 million.

•

Gross margin was 50.2% compared to 47.0%.

•

Non-GAAP gross margin was 51.9% compared to 48.3%.

•

Operating expenses were $27.9 million compared to $32.1 million.

•

Non-GAAP operating expenses were $23.3 million compared to $26.6 million.

•

Net loss was $14.4 million compared to net loss of $19.0 million.

•

Non-GAAP net loss was $10.8 million compared to a loss of $12.5 million.

•

Cash and cash equivalents including restricted cash were $93.9M million as of June 30, 2024, compared to $109.4 million as of March 31 2024. The balance at the end June 30, 2024 includes the funding of a $19.1 million surety bond recorded as restricted cash on the Company's balance sheet. This surety bond includes the $17.3 million verdict awarded in the Continuous Composite lawsuit in April 2024, plus $1.8 million of estimated interest on the judgment for the prejudgment period and duration of the appeal process.

Reconciliations of the non-GAAP financial measures provided in this press release to their most directly comparable GAAP financial measures are provided in the financial tables included at the end of this press release. An explanation of these measures and how they are calculated is also included below under the heading “Non-GAAP Financial Measures.”

“We demonstrated strong execution in Q2 while effectively navigating the persistent macroeconomic headwinds,” said Shai Terem, President and CEO of Markforged. “During the quarter we shipped the first PX100 metal binder jetting system, the latest in a series of innovations Markforged is bringing to market. FX10 shipments have also accelerated in the 2nd quarter. The positive feedback and growing pipeline underscore the strength of our recent innovations, and positions the Company to return to growth in the second half of year. The continued rollout of new products, combined with our cost realignment initiatives, keeps us on a path to achieve sustainable growth.”

Business Updates

•

$25 million Cost Reduction Initiative: Given the macroeconomic challenges and Markforged’s commitment to achieve sustainable growth, the Company is announcing a $25 million cost reduction initiative that Markforged expects to reduce the Company’s operating expenses to a yearly run rate of approximately $70 million. Markforged expects that most of these cost reductions will be completed in the second half of this year.

•

1st PX100 Shipped: Markforged shipped the first PX100 metal binder jetting system in Q2. The PX100’s innovative technology offers customers in the automotive, medical, aerospace, luxury goods, and other demanding markets a cost effective way to mass produce precise metal parts that would be challenging or impossible using traditional manufacturing methods. Markforged remains on plan to ship additional units in the second half of the year.

•

New Material Innovations: Markforged qualified two additional materials for FX series printers in the second quarter. Onyx FR, a flame retardant variant of Onyx® designed for aerospace and other applications on the factory floor requiring non-flammable parts, is now available for the FX10. And, high temperature continuous fiber (CF-HT) now enables FX20 customers to reinforce parts printed with Vega™ to achieve the strength of aluminum for aerospace and other demanding manufacturing applications.

•

Accelerating FX10 Shipments: Markforged also accelerated shipments of the FX10 in Q2, underscoring the product's innovative features and superior capabilities for printing mission critical parts for the factory floor. The Company enters Q3 with a robust pipeline and intends to release additional capabilities prior to the IMTS conference in Q3 to drive growth in the second half of the year.

2024 Financial Outlook

Markforged anticipates fiscal year 2024 revenues to be between $90 and $95 million, compared to its prior expectation of between $95 and $105 million, which reflects more persistent macroeconomic headwinds than previously anticipated. The Company expects to see year-over-year revenue growth return in the second half of the year, including low-single digit quarter-over-quarter growth in Q3, underpinned by its new products, particularly the FX10. Given strong execution over the first half of this year, Markforged now expects non-GAAP gross margins to be in the upper range of their previous 48% - 50% guidance. Non-GAAP operating loss is expected to be in the range of $42.5 million - $47.0 million for the year, resulting in a non-GAAP loss per share in the range of $0.19 - $0.22 per share.

This guidance does not reflect any additional relief Continuous Composites may receive as a result of its post-trial claims. Continuous Composites has asserted through post-trial motions claims for royalty payments for sales of certain products manufactured or sold in the United States after December 31, 2023. Markforged anticipates a final ruling to occur in the second half of 2024. Markforged strongly disagrees with the verdict handed down in the Continuous Composites litigation and with the associated post-trial royalty claims. Markforged has retained a leading law firm to support efforts to overturn the verdict.

Conference Call and Webcast Information

The Company will host a webcast and conference call at 5:00 p.m. ET today, Thursday, August 8, to discuss the results.

Participants may access the earnings press release, related materials and the audio webcast by visiting the investors section of the Company's website at https://investors.markforged.com/

To participate in the call, please dial 1-877-407-9039 or 1-201-689-8470 ten minutes before the scheduled start.

For those unable to listen to the live conference call, a replay will be available on the Company's website and telephonically till Thursday, August 22, 2024, 11:59 PM ET by dialing 1-844-512-2921 or 1-412-317-6671, passcode 13743375.

About Markforged

Markforged (NYSE:MKFG) is enabling more resilient and flexible manufacturing by bringing industrial 3D printing right to the factory floor. Our additive manufacturing platform The Digital Forge allows manufacturers to create strong, accurate parts in both metal and advanced composites. With over 10,000 customers in 70+ countries, we’re bringing on-demand industrial production to the point of need. We are headquartered in Waltham, Mass where we design the hardware, software and advanced materials that makes The Digital Forge reliable and easy to use. To learn more, visit www.markforged.com.

Non-GAAP Financial Measures

In addition to our financial results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), we believe that each of non-GAAP gross margin, non-GAAP operating profit (loss), non-GAAP net profit (loss) and non-GAAP earnings per share, each a non-GAAP financial measure, is useful in evaluating the performance of our business.

These non-GAAP measures have limitations as an analytical tool. We do not, nor do we suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors should also note that the non-GAAP financial measures we use may not be the same non-GAAP financial measures, and may not be calculated in the same manner, as that of other companies, including other companies in our industry.

We recommend that you review the reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures provided in the financial statement tables included below in this press release, and that you not rely on any single financial measure to evaluate our business. Additionally, to the extent that forward-looking non-GAAP financial measures are provided, they are presented on a non-GAAP basis without reconciliations of such forward-looking non-GAAP measures due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations.

The following are the non-GAAP financial measures referenced in this press release and presented in the tables below:

•

Non-GAAP gross margin is defined as GAAP gross profit (loss), less stock-based compensation expense, amortization, and certain non-recurring costs, divided by revenue.

•

Non-GAAP operating profit (loss) is defined as GAAP operating profit (loss) less stock-based compensation expense, amortization, and certain non-recurring costs.

•

Non-GAAP net profit (loss) is defined as GAAP net profit (loss) less stock-based compensation expense, net change in fair value of warrant liabilities and contingent earnout liabilities, amortization, and certain non-recurring costs.

•

Non-GAAP earnings per share is defined as GAAP net profit (loss) less stock-based compensation expense, net change in fair value of warrant liabilities and contingent earnout liabilities, amortization, and certain non-recurring costs, divided by diluted weighted average shares outstanding for the period.

Special Note Regarding Forward-Looking Statements

This press release contains forward-looking statements that are based on beliefs and assumptions and on information currently available. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “strategy,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “opportunity” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although Markforged believes that it has a reasonable basis for each forward-looking statement contained in this press release, Markforged cautions you that these statements are based on a combination of facts and factors currently known by it and its projections of the future, about which it cannot be certain. Forward-looking statements in this press release include, but are not limited to, future growth rate, revenue, gross profit margin and earnings guidance; the contributions of our directors; the timing of launches and the rate and extent of adoption of our products, including, but not limited to, our most recently introduced products and the FX10; market trends in the manufacturing industry; the duration and impact of macroeconomic factors; the benefits to consumers, functionality and applications of Markforged’s products; statements regarding our expectations concerning any impact to our business, balance sheet and cost structure; any statement regarding post-trial motions and appeal related to the Continuous Composites litigation; our disagreement with the Continuous Composites verdict; and our intention to challenge the Continuous Composites judgment. Markforged cannot assure you that the forward-looking statements in this press release will prove to be accurate. These forward looking statements are subject to a number of risks and uncertainties, including, among others, general economic, political and business conditions; the ability of Markforged to maintain its listing on the New York Stock Exchange; outcome of any legal proceedings against Markforged; and those factors discussed under the header “Risk Factors” in Markforged’s most recent periodic and other filings with the SEC. Furthermore, if the forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that Markforged will achieve its objectives and plans in any specified time frame, or at all. The forward-looking statements in this press release represent Markforged’s views as of the date of this press release. Markforged anticipates that subsequent events and developments will cause its views to change. However, while Markforged may elect to update these forward-looking statements at some point in the future, Markforged has no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing Markforged’s views as of any date subsequent to the date of this press release.


MARKFORGED HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2024 and December 31, 2023
(In thousands, except share data and par value amounts) (Unaudited)

	June 30, 2024			December 31, 2023
Assets
Current assets
Cash and cash equivalents	$	73,390		$	116,854
Restricted cash		19,122			—
Accounts receivable, net of allowance for expected credit losses ($438 and $360, respectively)		21,605			24,059
Inventory		22,557			26,773
Prepaid expenses		2,052			2,756
Other current assets		1,940			2,022
Total current assets		140,666			172,464
Property and equipment, net		16,945			17,713
Intangible assets, net		15,596			17,128
Right-of-use assets		34,819			36,884
Other assets		3,768			3,763
Total assets	$	211,794		$	247,952
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	8,749		$	13,235
Accrued expenses		11,276			9,840
Litigation payable		17,511			—
Deferred revenue		8,997			8,779
Lease liabilities		7,361			7,368
Other current liabilities		—			1,526
Total current liabilities		53,894			40,748
Long-term deferred revenue		5,187			6,083
Contingent earnout liability		245			1,379
Long-term lease liabilities		33,420			35,771
Other liabilities		1,652			2,361
Total liabilities		94,398			86,342
Commitments and contingencies
Stockholders’ equity
Common stock, $0.0001 par value; 1,000,000,000 shares authorized at June 30, 2024 and December 31, 2023; 202,549,293 and 198,581,263 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		19			19
Additional paid-in capital		373,397			366,281
Accumulated deficit		(255,008	)		(204,664	)
Accumulated other comprehensive income		(1,012	)		(26	)
Total stockholders’ equity		117,396			161,610
Total liabilities and stockholders’ equity	$	211,794		$	247,952


MARKFORGED HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Six Months Ended June 30, 2024 and 2023
(In thousands, except share data and per share data) (Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Revenue	$	21,688		$	25,449		$	42,235		$	49,539
Cost of revenue		10,810			13,476			21,224			25,984
Gross profit		10,878			11,973			21,011			23,555
Operating expenses
Sales and marketing		8,526			9,666			16,370			20,242
Research and development		9,060			10,286			18,995			20,666
General and administrative		10,334			12,120			22,499			24,248
Litigation judgment		—			—			17,300			—
Total operating expenses		27,920			32,072			75,164			65,156
Loss from operations		(17,042	)		(20,099	)		(54,153	)		(41,601	)
Change in fair value of derivative liabilities		95			125			126			314
Change in fair value of contingent earnout liability		1,295			(817	)		1,134			(7	)
Other expense		(84	)		(16	)		(219	)		(222	)
Interest expense		(170	)		(116	)		(324	)		(116	)
Interest income		1,230			1,577			2,630			3,268
Loss before income taxes		(14,676	)		(19,346	)		(50,806	)		(38,364	)
Income tax (benefit) expense		(278	)		(358	)		(462	)		(357	)
Net loss	$	(14,398	)	$	(18,988	)	$	(50,344	)	$	(38,007	)
Weighted average shares outstanding - basic and diluted		201,252,969			196,372,157			200,273,880			195,873,471
Net loss per share - basic and diluted	$	(0.07	)	$	(0.10	)	$	(0.25	)	$	(0.19	)

MARKFORGED HOLDING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

For the Three and Six Months Ended June 30, 2024 and 2023

(In thousands) (Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Net loss	$	(14,398	)	$	(18,988	)	$	(50,344	)	$	(38,007	)
Other comprehensive loss, net of taxes:
Unrealized loss on available-for-sale marketable securities, net		—			25			—			(25	)
Foreign currency translation adjustment		55			(1,704	)		(986	)		(1,546	)
Total comprehensive loss	$	(14,343	)	$	(20,667	)	$	(51,330	)	$	(39,578	)


MARKFORGED HOLDING CORPORATION
DISAGGREGATED REVENUE BY NATURE OF PRODUCTS AND SERVICES
(In thousands) (Unaudited)
	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Hardware	$	12,650	$	16,506	$	23,924	$	31,701
Consumables		5,914		6,482		12,318		12,937
Services		3,124		2,461		5,993		4,901
Total Revenue	$	21,688	$	25,449	$	42,235	$	49,539



MARKFORGED HOLDING CORPORATION
DISAGGREGATED REVENUE BY GEOGRAPHIC LOCATION
(In thousands) (Unaudited)
	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Americas	$	9,688	$	11,982	$	19,783	$	22,440
EMEA		6,785		7,618		13,120		16,110
APAC		5,215		5,849		9,332		10,989
Total Revenue	$	21,688	$	25,449	$	42,235	$	49,539


MARKFORGED HOLDING CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(In thousands) (Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Net loss	$	(14,398	)	$	(18,988	)	$	(50,344	)	$	(38,007	)
Stock compensation expense		3,245			1,690			6,706			6,046
Change in fair value of derivative liabilities		(95	)		(125	)		(126	)		(314	)
Change in fair value of contingent earnout liability		(1,295	)		817			(1,134	)		7
Amortization		371			254			749			531
Litigation judgment		—			—			17,300			—
Non-recurring costs1		1,395			3,812			3,841			5,893
Non-GAAP net loss	$	(10,777	)	$	(12,540	)	$	(23,008	)	$	(25,844	)

1Non-recurring costs incurred during the three and six months ended June 30, 2024 and 2023 relate to litigation expense.

	Three Months Ended June 30,						Six Months Ended June 30,
Non-GAAP Cost of Revenue	2024			2023			2024			2023
Cost of revenue	$	10,810		$	13,476		$	21,224		$	25,984
Stock compensation expense		35			89			84			162
Amortization		351			218			708			446
Non-GAAP Cost of Revenue		10,424			13,169			20,432			25,376

	Three Months Ended June 30,						Six Months Ended June 30,
Non-GAAP Gross Profit	2024			2023			2024			2023
Gross profit	$	10,878		$	11,973		$	21,011		$	23,555
Stock compensation expense		35			89			84			162
Amortization		351			218			708			446
Non-GAAP gross profit		11,264			12,280			21,803			24,163

	Three Months Ended June 30,						Six Months Ended June 30,
Non-GAAP Sales and Marketing Expenses	2024			2023			2024			2023
Sales and marketing expenses	$	8,526		$	9,666		$	16,370		$	20,242
Stock compensation expense		387			499			792			975
Amortization		20			36			41			85
Non-GAAP sales and marketing expenses		8,119			9,131			15,537			19,182

	Three Months Ended June 30,						Six Months Ended June 30,
Non-GAAP Research and Development Expenses	2024			2023			2024			2023
Research and development expenses	$	9,060		$	10,286		$	18,995		$	20,666
Stock compensation expense		1,009			1,160			2,110			2,329
Non-GAAP research and development expenses		8,051			9,126			16,885			18,337

	Three Months Ended June 30,						Six Months Ended June 30,
Non-GAAP General and Administrative Expenses	2024			2023			2024			2023
General and administrative expenses	$	10,334		$	12,120		$	22,499		$	24,248
Stock compensation expense		1,814			(58	)		3,720			2,580
Non-recurring costs1		1,395			3,812			3,841			5,893
Non-GAAP general and administrative expenses		7,125			8,366			14,938			15,775

	Three Months Ended June 30,						Six Months Ended June 30,
Non-GAAP Operating Loss	2024			2023			2024			2023


Operating loss	$	(17,042	)	$	(20,099	)	$	(54,153	)	$	(41,601	)
Stock compensation expense		3,245			1,690			6,706			6,046
Amortization		371			254			749			531
Litigation judgment		—			—			17,300			—
Non-recurring costs1		1,395			3,812			3,841			5,893
Non-GAAP operating loss		(12,031	)		(14,343	)		(25,557	)		(29,131	)

Markforged Contacts:

Media

Sam Manning, Public Relations Manager

sam.manning@markforged.com

Investors

Austin Bohlig, Director of Investor Relations

investors@markforged.com

Document and Entity Information	Aug. 08, 2024
Document And Entity Information [Line Items]
Entity Registrant Name	Markforged Holding Corp
Amendment Flag	false
Entity Central Index Key	0001816613
Document Type	8-K
Document Period End Date	Aug. 08, 2024
Entity Incorporation State Country Code	DE
Entity File Number	001-39453
Entity Tax Identification Number	92-3037714
Entity Address, Address Line One	60 Tower Road
Entity Address, City or Town	Waltham
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02451
City Area Code	866
Local Phone Number	496-1805
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Common Stock 0.0001 Par Value Per Share [Member]
Document And Entity Information [Line Items]
Security 12b Title	Common Stock, $0.0001 par value per share
Trading Symbol	MKFG
Security Exchange Name	NYSE
Redeemable Warrants Each Whole Warrant Exercisable For One Share Of Common Stock 0.0001 Par Value [Member]
Document And Entity Information [Line Items]
Security 12b Title	Redeemable Warrants, each whole warrant exercisable for one share of Common Stock, $0.0001 par value
Trading Symbol	MKFG.WS
Security Exchange Name	NYSE