Yesterday's Desktop Metal drama, and how Markforged fits into it
The Atomic Layers: S9E23 (00260)
Atomic Layer of the Day:
Yesterday, I quickly covered the latest update from the Nano Dimension camp regarding Desktop Metal. The company announced that it is currently reviewing all available options due to Desktop Metal's difficult financial situation.
Of course, the official statement used slightly different language, but it essentially boils down to this:
If Nano Dimension doesn’t secure some extra funding, there will be significant asset cuts.
More information is expected to be released shortly – including the long-awaited financial results for both companies for Q4 2024 and the full year. While exceptionally poor results are anticipated from Desktop Metal – as hinted by Ric Fulop during the Q3 earnings discussion – we still don’t know how Nano Dimension performed, even though the success of the entire deal rests on its shoulders.
But setting those challenges aside for a moment, we must not forget that thanks to the irreplaceable Yoav Stern – the former CEO of Nano Dimension – Markforged is also set to join the newly forming company conglomerate.
That situation, on the other hand, is already quite clear, as the company released its financial report a month ago.
Let’s start with the fact that Nano Dimension’s acquisition of Markforged is already a done deal – a visit to Markforged’s investor relations page immediately presents a PDF document confirming it.
The document outlines the planned merger of “Markforged Holding Corporation” with “Nano US II, Inc.,” a subsidiary of Nano Dimension Ltd., the Israeli parent company. This merger will result in Markforged becoming a fully owned subsidiary of Nano Dimension and being delisted from the NYSE, with shareholders receiving payment for their shares.
The main purpose of the document is to inform Markforged shareholders about the necessary paperwork required to avoid Israeli withholding tax (which is a flat rate of about 25%) on the payout.
In other words, the merger is certain, and what remains now is finalizing the formalities.
As for Q4 2024 and the entire past year, Markforged did see a decline in revenue, but also showed improvement in some profitability metrics, especially on a yearly basis.
In Q4 2024, revenue slightly decreased to $22.4 million from $24.2 million in the same period the previous year, a drop of around -7.4%. At the same time, gross margin fell from 48.4% to 44.8%, and on a Non-GAAP basis, from 49.5% to 46.4%, suggesting margin pressure.
Still, the company reduced operating expenses from $31.1 million to $25.0 million, and on a Non-GAAP basis from $24.9 million to $19.9 million, resulting in a smaller net loss – $11.9 million compared to $14.2 million in Q4 2023.
For the full year 2024, Markforged generated $85.1 million in revenue, down approximately -9.3% from $93.8 million in 2023. However, gross margin improved from 47.4% to 48.3%, and on a Non-GAAP basis from 48.6% to 50.1%, indicating better control over production costs.
On the flip side, the company saw a significant increase in cash used in operating activities – $61.3 million in 2024 versus $48.9 million in 2023, raising concerns about liquidity.
Its cash and cash equivalents, including restricted funds, dropped sharply from $116.9 million at the end of 2023 to $53.6 million at the end of 2024.
So, if this level of operating activity were to continue, there would be a real risk of running out of cash by the end of the current year…
But fortunately for Markforged, Yoav Stern “did the right thing.” It cost him his position, but at least he no longer has to worry about how to make sense of all this moving forward 🤡
Three weeks ago, in my article on LinkedIn on the forced acquisition of Desktop Metal by Nano Dimension, I expressed the view that between DM and Markforged, it’s the latter that holds the more valuable assets, and the new conglomerate should focus on its offering (combined with Nano Dimension’s proprietary solutions).
And while the financial results may not inspire much optimism just yet, we have to trust that the new CEO – Ofir Baharav – will find the way to bring it all together.
Or else… 😵
Atomic Layer from the Past:
04-23-2018: Ultimaker introduced a new generation 3D printer – the Ultimaker S5.
News & Gossip:
ABCorp has secured ISO 13485:2016 certification for its Additive Manufacturing Center, reinforcing its commitment to quality in medical device production. The certification ensures safety, efficacy, and regulatory compliance, boosting trust in 3D-printed medical solutions. With HP and Desktop Metal [🫨] printers, ABCorp offers high-performance materials and post-processing for customized medical devices.
Austrian Federal Railways (ÖBB) has signed a two-year agreement with 3D Spark to enhance its digital warehouse and procurement workflows. The partnership will integrate AI-powered 2D drawing analysis and SAP connectivity, optimizing spare parts management.
And in lighter news, developer Brian Minnick has unveiled a quirky, almost entirely 3D-printed printer—a project that feels more like an academic exercise than a practical breakthrough. While technically impressive, its reliance on solder-paste-wound motors and perforated-tape mechanical controls makes it more of a novelty than a usable machine. The single-axis prototype, printed in PEEK, can technically extrude PLA, but its clunky DC motor (0.001 Ω-mm resistance) and lack of electronics highlight its limitations. It’s a fun engineering stunt—just don’t expect it to revolutionize desktop manufacturing. The project is classic "because I can" endeavor: over-engineered solutions to problems nobody really has.
Cute? Yes. Groundbreaking? Not quite…