Markforged attributes 5% revenue growth in Q3 2022 to “tremendous” interest in the FX20
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According to Markforged’s Q3 2022 financial results, Markforged (3D printer manufacturer) saw a 5.0% increase in revenue last quarter.
Markforged’s Q3 2022 revenue was $25.2 Million. That is an $1.2 million increase on Q3 2021’s $24.0 million and a $1.0m quarter-on-quarter increase. 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.”
Markforged’s Q3 2022 financials
Markforged’s July 2021 public listing on the NYSE has resulted in year-on–year revenue growth for 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 attributes this decline to difficult macroeconomic conditions. However, he claims this has made Markforged 3D printing more attractive as an 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.
The operating loss for the company was $22.8 million. This loss, which was flat in comparison to Q3 2021 was due to larger issues such as inflation and geopolitical tensions. According to Terem, the current macroeconomic climate is “putting near-term pressure on its margins,” but due to its growing pipeline, Markforged is “confident in its long-term strong fundamentals.”
| Financials ($). | Q2 2022 | Q3 2022 | Differ ($) | Differentiation (%) | Q3 2021 | Q3 2022 | Differ ($) | Differentiation (%) |
| Revenue | 24.2m | 25.2m | +1.0m | +4.1 | 24.0m | 25.2m | +1.2m | +5.0 |
| Cost of revenue | 11.3m | 13.0m | +1.7m | +15.0 | 10.3m | 13.0m | +2.7m | +26.2 |
| Gross profit | 12.9m | 12.2m | -0.7m | -5.4 | 13.7m | 12.2m | -1.5m | -10.9 |
| Operating Expenses | 36.7m | 35.1m | -1.6m | -4.4 | 36.1m | 35.1m | -1.0m | -2.8 |
| Operating Loss | 23.8m | 22.8m | -1.0m | -4.2 | 22.4m | 22.8m | +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%. The company expects to keep creating new opportunities in the automotive, luxury goods and Metal Injection Molding industries with its Digital Metal acquisition.
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.
Markforged’s revised FY guidance
Markforged updated its FY 2022 guidance in light of the challenging macroeconomic environment it encountered during Q3. Markforged now expects its Q4 earnings to be between $28 million and $32 million. This would mean that FY revenue will be near the bottom of the 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%. Markforged expects a Non-GAAP Q4 Operating Loss of $13.2 Million to $14.7 Million, which would translate to a FY loss between $61 million and $62.5 million. Its Non GAAP EPS will be between $0.06 and $0.07 per share for Q4 as well as $0.31 per share to $0.32 per year.
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