Markforged reports economic uncertainty leading to restructuring and workforce reduction
Markforged, headquartered in Watertown, Massachusetts, USA, has announced its financial results for the third quarter and nine months ended September 30, 2023. For Q3, the company reported revenue of $20.1 million, down from $25.2 million year on year. In the first nine months of 2023 its revenue was $69.6 million, down from $71.3 million in the first nine months of the previous year.
Markforged stated that a stronger than expected macroeconomic downturn had impacted demand for its Digital Forge and delayed orders toward the end of the quarter, with these challenges continuing into the fourth quarter. The persistent high cost of capital and uncertainty in the macro environment was reported to be restricting capital investment in the short term more than previously anticipated.
In response to these continuing economic headwinds, Markforged announced it has completed a restructuring that, coupled with other cost reduction efforts, is expected to deliver operating costs savings of approximately $9-12 million in 2024. The company added that most of these savings are being driven by a reduction in its workforce of approximately 10%.
“While the medium-to-long-term opportunity for Markforged to help manufacturers reduce costs and strengthen supply chain resiliency remains intact, our third quarter results reflect worsening macroeconomic headwinds in the final weeks of the quarter, which delayed several large deals that we had expected to close,” stated Shai Terem, president and CEO of Markforged.
“We remain laser focused on profitability. In light of these headwinds, which have persisted into the fourth quarter, we have implemented cost reduction efforts to align our operating expenses to match anticipated near-term demand. With that, the overwhelming excitement surrounding our new product introductions at Formnext 2023… is a testament to the transformative impact our offerings are set to make in the manufacturing industry. In particular, the customer enthusiasm surrounding the FX10 is reinforcing our confidence that Markforged is well-positioned for strong growth as macroeconomic uncertainty clears,” added Terem.
For Q3 2023, gross margin was 45.7% compared to 48.6% in Q3 2022. Operating expenses were $59.6 million, inclusive of a non-cash goodwill impairment charge of $29.5 million as a result of the company’s performance during Q3 and decline in forecasted revenue, compared to $35.1 million. Net loss was $51.4 million compared to the $23.0 million in Q3 2022.
