Markforged Holding Corporation Annual report [Section 13 and 15(d), not S-K Item 405]

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2024

The components of the Company’s profit (loss) before income taxes are as follows:


	Year Ended
	December 31,
(in thousands)	2024			2023
Profit (loss) before income taxes:
Domestic		(81,310	)		(75,028	)
Foreign		(5,499	)		(29,125	)
Total	$	(86,809	)	$	(104,153	)

The components of the income tax expense (benefit) are as follows:


	Year Ended December 31,
(in thousands)	2024			2023
Current Provision
Federal	$	—		$	—
State		—			—
Foreign	38				83
Total current expense (benefit)	$	38			83
Deferred Provision
Federal		—			—
State		—			—
Foreign		(1,281	)		(669	)
Total deferred expense (benefit)		(1,281	)		(669	)
Total income tax expense (benefit)	$	(1,243	)	$	(586	)

The overall effective tax rate differs from the statutory US federal tax rate as follows:


	Year Ended December 31,
	% of Pretax Profit (Loss)
	2024			2023
Statutory US federal tax rate		21.00	%		21.00	%
State income taxes, net of federal benefit		1.71			4.04
Stock-based compensation		(2.38	)		(2.19	)
Nondeductible expenses		(0.13	)		(0.15	)
Goodwill impairment		—			(6.06	)
Fair market value change in warrants and earn out liabilities		(0.84	)		—
Transaction costs		(1.20	)		—
Officer's compensation		(0.19	)		(0.13	)
Research and development credits		(2.87	)		2.56
Valuation allowance		(13.61	)		(18.11	)
Change in statutory tax rate		(0.05	)		(0.04	)
Other		—			(0.36	)
Effective tax rate		1.44	%		0.56	%

Significant components of the Company’s net deferred tax assets are as follows:


	December 31,
(in thousands)	2024			2023
Deferred tax assets
Lease liability	$	7,938		$	10,493
Capitalized research and development costs		11,719			14,596
Stock compensation		1,931			2,175
Reserves		1,106			689
Deferred revenue		667			1,298
Accrued expenses		672			564
Inventory reserves		637			670
Long term settlement payable		1,304			—
Net operating losses		62,760			42,646
Research and development credits		12,684			15,465
Other credits		459			407
Gross deferred tax assets	$	101,877		$	89,003
Less: Valuation allowance		(90,594	)		(78,576	)
Deferred tax liabilities
Right-of-use assets		(7,432	)		(8,966	)
Deferred expenses		(132	)		(125	)
Acquired intangible assets		(2,814	)		(3,218	)
Other assets - license		(1,315	)		—
Depreciation		(25	)		(203	)
Loss on sale of assets		(345	)		(20	)
Net deferred tax assets	$	(780	)	$	(2,105	)

The following table presents the changes in the balance of the Company’s deferred income tax asset valuation allowance:


	Year Ended December 31,
(in thousands)	2024		2023
Balance at beginning of year	$	78,576	$	59,514
Additions charged to expense		12,018		19,062
Balance at end of year	$	90,594	$	78,576