Markforged attributes 5% revenue growth in Q3 2022 to “tremendous” interest in the FX20

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3D printer manufacturer Markforged (MKFG) achieved revenue growth of 5.0% last quarter, according to its Q3 2022 financial results. 

In Q3 2022, Markforged generated $25.2 million, a slight $1.2 million rise on the $24.0 million it reported in Q3 2021, and a $1.0 million increase quarter-on-quarter. CEO of the firm Shai Terem has attributed this growth to the “tremendous excitement” around its FX20 3D printer, as well as an “expansion of its addressable market.”  

“Despite a challenging macro environment, we delivered another solid quarter as demand for The Digital Forge continues to grow globally,” explained Terem. “Ongoing supply chain challenges continue to be a catalyst for demand for our Digital Forge platform which brings industrial production to the point of need.” 

Traders looking up at a Markforged sign outside the NYSE.
Traders looking up at a Markforged sign outside the NYSE. Photo via Markforged.

Markforged’s Q3 2022 financials

Since Markforged went public on the NYSE in July 2021, it has achieved year-on-year revenue growth every quarter. But the firm’s increase of 5.0% in Q3 2022 does represent a significant slowdown on the 19% growth seen in Q2 2022. Terem has blamed this drop off on difficult macroeconomic conditions, though he says this has also helped make Markforged 3D printers a more attractive in-sourcing tool. 

Alongside interest in its FX20 system, Terem said that Markforged’s acquisition of Digital Metal has helped it gain access to new clientele. In particular, he explained that the deal to buy the binder jetting firm has allowed Markforged to “add high-volume metal application capabilities” to its offering, which are attractive to a wider pool of manufacturers. 

On the cost front, the company reported an operating loss of $22.8 million. This loss, which was flat against Q3 2021, was caused by wider issues such as inflation, geopolitical tensions and supply chain disruption. According to Terem, the current macroeconomic climate is “putting near-term pressure on its margins,” but due to its growing pipeline, Markforged is “confident in its long-term strong fundamentals.”

Financials ($) Q2 2022Q3 2022 Difference ($) Difference (%) Q3 2021Q3 2022 Difference ($) Difference (%) 
Revenue 24.2m25.2m+1.0m+4.124.0m25.2m+1.2m+5.0
Cost of Revenue 11.3m13.0m+1.7m+15.010.3m13.0m+2.7m+26.2
Gross Profit12.9m12.2m-0.7m-5.413.7m12.2m-1.5m-10.9
Operating Expenses36.7m35.1m-1.6m-4.436.1m35.1m-1.0m-2.8
Operating Loss 23.8m22.8m-1.0m-4.222.4m22.8m+0.4m+1.8

FX20-driven growth in Q3 2022 

First and foremost, Markforged credits its revenue growth in Q3 to “robust FX20 demand.” However, even though the company says orders “continue to exceed its expectations,” it admits that it wasn’t able to meet demand during the quarter or meet internal cost of production estimates, due to ongoing supply chain disruption. 

Regionally, Markforged’s businesses in the Americas and EMEA were impacted by inflationary and geopolitical pressures, but its APAC division was less affected, reporting annual growth of 82%. Moving forwards, the firm expects its Digital Metal acquisition to continue creating opportunities for it in the automotive, luxury goods, medical and Metal Injection Molding (MIM) industries. 

In terms of cost controls, Markforged says it “reorganized its go-to-market team and reprioritized initiatives with the potential for the greatest impact on profitable growth.” As a result, the firm believes it has a “strong balance sheet that will keep it on the path to profitability in 2024,” and it ended Q3 with $181.8 million in cash. 

The Markforged FX20 3D printer. Photo via Markforged.
The Markforged FX20 3D printer. Image via Markforged.

Markforged’s revised FY guidance

In light of the tricky macroeconomic conditions it encountered in Q3, Markforged has updated its FY 2022 guidance. The company now anticipates that its Q4 earnings will come in at $28 million to $32 million, which, at the midpoint, would result in FY revenue near the lower end of its previously-guided range. 

Markforged expects its Q4 Non-GAAP gross margin to be in the range of 48% – 50%, and its FY margin to be 50% – 52%. The firm is forecasting a Non-GAAP Q4 operating loss of $13.2 million to $14.7 million, which if realized would equate to a FY loss in the range of $61 million to $62.5 million. Its Non-GAAP EPS is expected to come in at -$0.06 to $0.07 per share in Q4, and $0.31 to $0.32 per share for the year. 

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Featured image shows traders looking up at a Markforged sign outside the NYSE.