3D Printing Financials: Markforged Q3 Numbers Amid Nano Dimension Buyout

Amid an impending buyout by Nano Dimension, Markforged (NYSE: MKFG) released its third-quarter 2024 results, pointing to growth and strategic cost management.

Nano Dimension is acquiring Markforged in an all-cash deal valued at $115 million, which both companies’ boards have approved and is expected to close in the first quarter of 2025. Once complete, the combined entity, including Nano Dimension’s recent acquisition of Desktop Metal, will have a projected revenue of $340 million and around $475 million in cash.

In its final quarters as a standalone company, Markforged shows resilience after a challenging first half of the year, which saw revenues decline and net losses increase.

For the period ending September 30, 2024, the company reported revenue of $20.5 million, a 2% increase from $20.1 million in the same period last year. The company also posted a gross margin improvement, reaching 49% (50.9% on a non-GAAP basis), compared to 45.7% in the third quarter of 2023.

Markforged offers a full spectrum of 3D printing solutions, including hardware, materials, and software, making it an all-encompassing player in the additive manufacturing space. During the third quarter, its consumables and service segments outperformed hardware sales, with consumable sales up 11.8% and services by 13.2% year-over-year.

Despite these gains, economic pressures on hardware sales continue to impact the company’s overall revenue potential. The recent launch of its FX10 Metal Kit looks promising, as this industrial-grade solution for metal and composite parts could open doors to a wider customer base and position Markforged for growth across various sectors. In fact, with this kit, the FX10 becomes the world’s first industrial 3D printer that can print both metal filaments and composites with continuous fiber reinforcement.

Markforged FX10. Image courtesy of Markforged.

Furthermore, Markforged saw reductions in operating expenses, reporting $27.6 million, a sharp decrease from $59.6 million in the third quarter of 2023. This decrease is mainly due to a restructuring plan that began in 2023, which included workforce reductions and operational streamlining aimed at saving approximately $25 million annually and lowering its operating expense run rate to $70 million by year’s end. By the third quarter, $1.7 million of these employee termination costs were accounted for.

In line with these reductions, Markforged’s net loss for the period was $23.4 million, down from $51.4 million a year earlier. This includes a one-time payment for a patent litigation settlement with Continuous Composites. Markforged agreed to pay $18 million upfront, with additional installments totaling $7 million through 2027. While this settlement comes with a short-term financial cost, it resolves a major legal issue, allowing Markforged to continue its operations with fewer legal worries.

Markforged’s cash position, including restricted cash, totaled $79.5 million as of September 30, 2024, down from $93.9 million at the end of Q2. The decline is partly due to the upfront litigation settlement payment, yet the company’s liquidity remains strong enough to support ongoing operations. With Nano Dimension’s financial support, Markforged could gain more stability to manage its working capital and investments, helping it handle market ups and downs.

Markforged industrial production at the point of need. Image courtesy of Markforged.

Still, the most significant announcement for Markforged this quarter is the pending acquisition by Nano Dimension, made public on September 25. Priced at $5.00 per share—a 71.8% premium over Markforged’s recent trading average—the deal is set to create a powerful synergy between Nano Dimension’s advanced electronics and additive manufacturing capabilities and Markforged’s expertise in metal and composite 3D printing. Expected to close by Q1 2025, the merger awaits regulatory and shareholder approvals. At that time, Markforged will be delisted from the New York Stock Exchange (NYSE).

“We remain excited about the pending acquisition by Nano Dimension and our ability to bring together our pioneering, complementary product portfolios that we expect will further enhance our ability to serve our customers on the manufacturing floor with a more complete offering of highly innovative solutions and a stronger balance sheet to weather this industrial slowdown cycle,” said Shai Terem, President and CEO of Markforged.

The anticipated close of the Nano Dimension acquisition in early 2025 will be a turning point for Markforged. As the deal moves forward, Markforged and Nano Dimension must integrate their models. Nano Dimension’s electronics expertise could open new paths for Markforged, whose 3D printing solutions align with Nano Dimension’s vision of a strong, diverse manufacturing ecosystem.