Markforged Holding Corporation

Greetings and welcome to the Mark Forge fourth quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note that this conference is being recorded. I will now turn the conference over to our host, Stephen Karp, General Counsel. Thank you. You may begin.

Good afternoon. I am Stephen Karp, General Counsel of Mark Forge Holding Corporation. Welcome to our fourth quarter and fiscal year 2021 results conference call. We will be discussing the results announced in our earnings press release issued after market closed today. With me on the call is our President and CEO, Shai Tarim, and our CFO, Mark Schwartz. Before we get started, I would like to remind everyone that management will be making statements during this call that include forward-looking statements within the meaning of federal securities law, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Report Act of 1995. Any statements contained in this call that are not statements of historical facts should be deemed to be forward-looking statements. All forward-looking statements, including without limitation, statements regarding our business strategy and future financial and operating performance, projected revenue and gross profit for the current year, expected growth, our new product introductions, and market opportunity are based upon current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results to differ materially from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a description of the risks and uncertainties associated with our business, please see our most recent periodic and other filings with the SEC. The information provided in this conference call speaks only as of the date hereof. Mark Forge disclaims any intention or obligation, except as required by law, to update or revise forward-looking statements. Also during the course of today's call, we refer to certain non-GAAP financial measures. There is a reconciliation schedule showing the GAAP versus non-GAAP results currently available in our press release issued after market closed today, which can be found on our website at investors.markforged.com. I'll now turn the call over to Shai Tarim, President and CEO of Markforged.

Thank you, Steve. I would like to thank everyone for joining us today. This has been a tremendous growth year for Markforged. We are proud to share that we executed on the plan we shared a year ago and beat our targets for 2021. Markforged is one of the fastest organically growing additive manufacturing companies with industry leading gross margin. In particular, in the fourth quarter, we delivered 26.6 million in revenue, which brings total revenue for 2021 to 91.2 million. and the full year, resulting in 27% annual organic growth with 58% gross margins. Markforge was founded on the premise that additive technologies can create a paradigm shift on how we, as humans, manufacture products. Markforge is building the largest network of connected digital factories to lead the future of distributed manufacturing. Our technology helps customers overcome global supply chain challenges and move from physical to digital inventory. The Digital Forge, our integrated metal and carbon fiber additive manufacturing platform, powered by cloud-native software, inputs point-of-nate production, which also helps reduce the negative carbon emission impact of logistics and transportation on our planet. The Digital Forge is designed to solve for high-value, mission-critical applications. Our customers rely on the Digital Forge for demanding, rigorous, end-use parts, which cannot break between maintenance cycles. The Digital Forge provides a reliable and repeatable manufacturing solution that accelerates deeper adoption of our technology. With over 12,000 active printers, which have printed over 11 million parts The digital forge solve for these applications directly on the manufacturing floor. Our continuous fiber reinforcement technology is a unique differentiator for Markforged. It enables our customers to utilize advanced composites in the production of parts that are stronger and lighter than metal. We understand the critical importance of strength in creating end-use parts. We have been leaders in this field with our proprietary materials since our funding. And we have seen the transition and increased demand for continuous fiber technology and advanced composites, further highlighting a significant market opportunity where customers need to produce stronger, certified parts in a shorter timeframe. Markforged is primed for scalable growth in large due to our AI-driven cloud software platform. which connects our global fleet of printers. Each printer is a standalone digital factory, secure, remotely controlled, collecting data at all times, and using our proprietary Blacksmith software to complete its own quality assurance testing. The data generated from every single print is used to improve the printers on the entire network, increasing part accuracy and therefore increasing demand for our solution. With our approach, Markforged customers are using better solutions tomorrow from the learnings of today. In 2021, we saw approximately 50% year-over-year increase in sales of our industrial solution. This growth is especially noticed in the aerospace and automotive industries. Global supply chain challenges are creating shortage everywhere, validating the need for printing and used parts at the point of need, and accelerating our vision of distributed manufacturing. Our customers are facing compounding pressures across their operations and are quickly realizing the high value of the digital forge ability to produce what you need, when you need it, where you need it. We are able to use the digital forge on our own manufacturing line, in our development cycles, and even for end-use parts that go into building the digital forge itself. Navigating these challenges, accelerated by the complicated nature of a global pandemic, is no easy task. Our ability to meet customer demand for products is an accomplishment that our team is very proud of and is reflected in our performance. Speaking of our team, we ended the year with approximately 400 employees, nearly doubling in size. We are focusing our hiring efforts on our go-to-market and engineering teams to develop multiple products at the same time to expand our addressable market. We also built out our executive leadership team in 2021 and now have a team capable of scaling Markforge to the next stage of maturity. Most recently, we appointed Andrew Haley as our Chief Marketing Officer. With deep technology experience, Andrew is helping us refine our strategies around the digital force and help us accelerate our growth. As we look forward, we feel confident in our ability to execute on our plans for 2022, just as we did in 2021. Increasing the addressable market through the introduction of new capabilities to the digital forge is our top priority, and we are already executing on that plan. As you recall, we announced the release of the FX20 printer and Ultem 9085 filament with continuous fiber reinforcement in November of last year. Since that announcement, we are seeing robust demand from our customers for this solution and building a strong backlog all over the world. The early excitement for the FX20 and Ultem filament validates our view, the need for high strength, heat resistant, and high performance parts in demanding industries such as aerospace, defense, and automotive. The FX20 is the biggest, fastest, and smartest 3D printer our team has ever produced and grows the digital forge platform for an accessible industrial grade solution to high volume robust production of mission critical application at the point of need. We expect to see a significant increase in the volume of FX20 shipping in the second half of the year. We see accelerated adoption within our enterprise accounts, which continue to certify more and more applications with the digital forge. For example, one of the world's leading automotive manufacturers, who used the full offering of the DigitalForge across its operation, almost doubled their connected fleet to over 40 printers last quarter, including an FX20 with over 700 hours of printing time, log to date. This is a strong example of our customers expanding its usage of our printers and the application they are solving. They are even overcoming supply chain disruption by printing as needed and used parts that go directly into the cars they manufacture. As the customers increase their use of the Digital Forge, we are expanding our addressable market and tapping new applications, from accessible product design with our new Precise PLA to higher and robust production with the FX20 and Ultem 9085 filament with continuous fiber reinforcement. As I reflect on 2021, I look at what fueled our success, the growth of our customer base, the expansion of the digital forge capabilities for our hardware, software, and materials, our ability to solve for mission-critical applications in the face of supply chain challenges, and our talented team. These same elements give me great confidence in our ability to deliver strong performance in 2022. I now turn the call over to Mark to offer a more detailed overview of our financial performance.