Markforged Holding Corp (MKFG)·Q4 2024 Earnings Summary

Executive Summary

• Q4 revenue was $22.4M, down year-over-year versus $24.2M, with GAAP gross margin contracting to 44.8%; non‑GAAP gross margin was 46.4% . Sequentially, revenue improved from $20.5M in Q3, but margins stepped down from Q3’s 49.0% GAAP and 50.9% non‑GAAP levels .
• Q4 GAAP net loss improved to $(11.9)M (non‑GAAP $(9.0)M) from $(14.2)M (non‑GAAP $(11.6)M) in Q4’23, reflecting cost actions; GAAP operating expenses fell to $25.0M (non‑GAAP $19.9M) versus $31.1M (non‑GAAP $24.9M) a year ago .
• Liquidity declined: cash and cash equivalents including restricted fell to $53.6M at 12/31/24 from $79.5M at 9/30/24 and $116.9M at 12/31/23, reflecting operating burn and litigation/transaction costs .
• No earnings call or forward guidance due to the pending Nano Dimension acquisition; expected close shifted from “by Q1’25” (as of Nov) to “by Q2’25,” pending CFIUS approval—this deal is the primary stock catalyst near term .

What Went Well and What Went Wrong

• What Went Well

  • Cost discipline: Q4 GAAP OpEx fell to $25.0M (non‑GAAP $19.9M) from $31.1M (non‑GAAP $24.9M) in Q4’23, aiding sequential and YoY loss improvement .
  • Non‑GAAP loss narrowed: Q4 non‑GAAP net loss improved to $(9.0)M vs $(11.6)M in Q4’23; non‑GAAP operating loss also improved YoY, reflecting cost reductions and mix management .
  • Product adoption: “We are encouraged by the continued adoption of our next generation product line, despite the challenging market conditions” — Shai Terem, President & CEO .

• What Went Wrong

  • Top‑line softness persisted: Q4 revenue of $22.4M declined YoY from $24.2M, with hardware down and EMEA particularly weak YoY (EMEA $5.2M in Q4’24 vs $7.9M Q4’23) .
  • Margin pressure: GAAP gross margin fell to 44.8% (non‑GAAP 46.4%) from 49.0% (non‑GAAP 50.9%) in Q3, indicating adverse mix/pricing or under‑absorption in the quarter .
  • Liquidity draw: Cash (incl. restricted) dropped to $53.6M from $79.5M in Q3, and $116.9M at YE23, as operating losses and non‑recurring costs (litigation/transaction) consumed cash .

Financial Results

Segment/Nature of Revenue

Geographic Mix

KPIs and Cost Structure

Non‑GAAP adjustments: In Q4, non‑GAAP net loss excludes $2.13M SBC, $0.37M amortization, $(2.62)M change in contingent earnout liability, and $3.03M non‑recurring costs (litigation, transaction, restructuring) .

Guidance Changes

Note: Company suspended guidance and did not host earnings calls in Q3 and Q4 due to pending Nano Dimension transaction .

Earnings Call Themes & Trends

Management Commentary

• “We are encouraged by the continued adoption of our next generation product line, despite the challenging market conditions that we are facing.” — Shai Terem, President & CEO .
• “We remain excited about the pending acquisition by Nano Dimension and the incremental value that we believe it will bring to our customers…” — Shai Terem .
• Q2 call framing: “We demonstrated strong execution in Q2 while effectively navigating industry sector challenges… implementing a $25 million cost reduction initiative… reduce our annual operating expenses run rate to approximately $70 million in 2025” — Shai Terem . “Gross margins… up 3.6% YoY… driven by operational efficiencies and product mix” — Assaf Zipori, CFO .

Q&A Highlights

• Legal costs and P&L treatment: Analysts probed cumulative legal fees; CFO pointed to the GAAP–non‑GAAP reconciliation where legal costs are excluded from non‑GAAP results .
• Cost reduction specifics: Management indicated the majority of savings come from R&D following the release of three new platforms, aiming at sustainable growth .
• H2 revenue drivers: Management cited a growing pipeline, FX10 momentum, and PX100 shipments as key supports for second‑half growth despite a tough capital equipment environment .

Note: The company did not host earnings calls in Q3 and Q4 due to the pending merger .

Estimates Context

• Wall Street consensus (S&P Global) for MKFG Q4’24 revenue/EPS could not be retrieved via our S&P Global integration at this time; as such, we cannot present beat/miss vs consensus for Q4 in this report. We attempted to fetch consensus for Q2–Q4 2024, but the mapping for MKFG was unavailable in our SPGI system at the time of request (tool error). Therefore, estimate comparisons are not included here.

Key Takeaways for Investors

• Sequential revenue recovery but margin compression: Q4 revenue rebounded to $22.4M from $20.5M in Q3, yet GAAP gross margin fell to 44.8% from 49.0%, likely reflecting mix/under‑absorption; cost controls kept non‑GAAP losses narrowing .
• EMEA weakness weighed on YoY: EMEA revenue declined to $5.2M in Q4 from $7.9M YoY, while APAC improved sequentially; hardware remained below prior‑year levels .
• Liquidity runway tightened: Cash (incl. restricted) fell to $53.6M at YE24 from $79.5M in Q3 and $116.9M at YE23; monitor burn and the schedule of litigation settlement payments ($1M/$2M/$4M in 2025/2026/2027) .
• Cost actions are working: GAAP OpEx dropped to $25.0M (non‑GAAP $19.9M) in Q4 vs $31.1M (non‑GAAP $24.9M) LY; the $25M cost program announced in Q2 is evident in non‑GAAP OpEx improvements .
• Deal is the catalyst: Closing of Nano Dimension’s acquisition (CFIUS approval pending) is the key near‑term catalyst; expected close moved from Q1’25 (as of Nov) to by Q2’25 (as of Mar), suggesting timeline risk but continued progress .
• No guidance/no call limits visibility: Withheld guidance and absence of calls in Q3/Q4 constrain estimate updates and discovery; near‑term narrative is dominated by merger path and cash trajectory .
• Focus for updates: Watch regulatory milestones (CFIUS), cash trends, gross margin stabilization, and adoption signals for FX10/PX100 as indicators of core business health post‑deal .

Appendix: Additional Details from Q4 Release

• Q4’24 vs Q4’23: Revenue $22.4M vs $24.2M; GAAP GM 44.8% vs 48.4%; non‑GAAP GM 46.4% vs 49.5%; GAAP OpEx $25.0M vs $31.1M; non‑GAAP OpEx $19.9M vs $24.9M; GAAP net loss $(11.9)M vs $(14.2)M; non‑GAAP net loss $(9.0)M vs $(11.6)M .
• Disaggregation (Q4’24): Hardware $13.59M, Consumables $5.31M, Services $3.48M; Americas $11.16M, EMEA $5.22M, APAC $5.99M .
• Non‑GAAP recon (Q4’24): Add‑backs include SBC $2.13M, amortization $0.37M, non‑recurring costs $3.03M, and change in contingent earnout liability $(2.62)M .