DM
Desktop Metal, INC
NYSE
8-K: Desktop Metal Reports Improved 2023 Financial Results Amidst Cost Reduction Efforts
Sentiment:
Quarterly Report
15 March 2024 7:00 AM
Desktop Metal announced its fourth quarter and full year 2023 financial results, highlighting significant improvements in operating performance and cost reductions despite a challenging capital investment environment.
Better than expected
The company's net loss significantly decreased year-over-year, indicating improved financial performance.
Adjusted EBITDA showed a substantial improvement, reaching the company's strongest quarterly performance to date.
Non-GAAP gross margins improved significantly year-over-year.
Summary
- Desktop Metal reported a revenue of $52.3 million for the fourth quarter of 2023, which is down from $60.6 million in the same quarter of the previous year but up 22% sequentially from the prior quarter.
- The company's full-year 2023 revenue was $189.7 million, compared to $209 million in 2022.
- Net loss for 2023 was $(323.4) million, a significant improvement from the $(740.3) million loss in 2022.
- Adjusted EBITDA for the fourth quarter was $(9.2) million, a 56% year-over-year improvement and the company's strongest quarterly performance to date.
- GAAP gross margin was (32)%, impacted by one-time restructuring activities, while non-GAAP gross margin was 34%, a 39.9% year-over-year improvement.
- Operating expenses saw a 58% year-over-year decline on a GAAP basis and a 39% decline on a non-GAAP basis from the start of the company's cost reduction initiative.
- Cash, cash equivalents, and short-term investments closed the fourth quarter at $84.5 million, with a 25% reduction in the rate of cash consumption compared to the same quarter last year.
- The company has initiated a review of strategic alternatives for its industrial photopolymer business.
- Full-year 2024 revenue guidance is between $175 and $215 million, with adjusted EBITDA between $(30) and $(10) million, expecting to achieve adjusted EBITDA breakeven in the second half of 2024.
Sentiment
Score: 7
Explanation: The document shows a positive trend with significant improvements in key financial metrics like net loss and adjusted EBITDA, along with cost reduction efforts. However, the company is still operating at a loss and faces challenges in a tough market, which tempers the overall sentiment.
Positives
- The company has significantly reduced its net loss from $(740.3) million in 2022 to $(323.4) million in 2023.
- Adjusted EBITDA showed a substantial improvement, reaching the company's strongest quarterly performance to date.
- Non-GAAP gross margins have improved significantly year-over-year.
- Operating expenses have been reduced substantially due to cost reduction efforts.
- The rate of cash consumption has decreased, indicating improved financial management.
- Recurring revenue has increased by 29% year-over-year, demonstrating customer adoption and value.
- The company is expanding partnerships and launching new products, including dental resins and digital sheet metal forming machines.
- Desktop Metal is seeing growing business in Gigacasting with several global automakers.
Negatives
- Fourth-quarter revenue decreased year-over-year from $60.6 million to $52.3 million.
- GAAP gross margin was negative at (32)%, although this was impacted by one-time restructuring activities.
- The company reported a net loss of $(323.4) million for the full year 2023.
- The company did not meet its internal target of achieving positive adjusted EBITDA by the end of the year.
Risks
- The company is operating in a challenging capital investment environment with elevated interest rates and slower sales cycles.
- The company's financial performance is subject to the global macro-economic environment.
- Rapid technological changes in the additive manufacturing industry could impact the company's competitiveness.
- Supply and logistics disruptions, including shortages and delays, could affect the company's operations.
- The company's ability to realize the benefits from cost-saving measures is not guaranteed.
Future Outlook
Desktop Metal expects full-year 2024 revenue to be between $175 and $215 million, with adjusted EBITDA between $(30) and $(10) million, and anticipates achieving adjusted EBITDA breakeven in the second half of 2024.
Management Comments
- Ric Fulop, Founder and CEO of Desktop Metal, stated that the company delivered a much improved operating performance including reduced net loss and a record adjusted EBITDA performance.
- Fulop noted that while the company did not meet its internal target of positive adjusted EBITDA by the end of the year, they are very close to that goal.
- Fulop also mentioned that the company continues to see strong demand for production binder jet systems and increasing evidence of the value of Additive Manufacturing 2.0 systems.
- Fulop stated that the company's all-time high recurring revenue levels prove that customers who have adopted their technology are using it successfully and getting great value from their technologies.
Industry Context
This announcement comes as the additive manufacturing industry continues to evolve, with companies focusing on cost efficiency and demonstrating the value of their technologies for mass production. Desktop Metal's focus on cost reduction and recurring revenue aligns with industry trends.
Comparison to Industry Standards
- Desktop Metal's revenue decline year-over-year contrasts with some competitors in the additive manufacturing space who have shown growth, such as Stratasys and 3D Systems, although these companies also face challenges in profitability.
- The company's focus on cost reduction and improved EBITDA is a common theme in the industry as companies strive for profitability, with many companies reporting similar cost-cutting measures.
- The growth in recurring revenue is a positive sign, as it indicates customer adoption and value, which is a key metric for companies in this sector.
- Desktop Metal's adjusted EBITDA performance, while still negative, shows improvement compared to previous periods, which is a trend seen across the industry as companies work towards profitability.
Stakeholder Impact
- Shareholders may view the improved financial performance and cost reductions positively.
- Employees may be impacted by ongoing cost reduction efforts.
- Customers may benefit from the company's focus on production binder jet systems and Additive Manufacturing 2.0 technologies.
- Suppliers may be affected by the company's cost reduction initiatives.
- Creditors may be reassured by the company's improved financial stability.
Next Steps
- The company will continue to execute its cost reduction plans.
- Desktop Metal will host a conference call on March 15, 2024, to discuss the fourth quarter 2023 results.
- The company will continue to drive towards profitability.
- The company will continue to review strategic alternatives for its industrial photopolymer business.
Key Dates
- March 15, 2024: Date of the press release announcing fourth quarter and full year 2023 financial results.
- December 31, 2023: End of the fiscal year for which financial results are reported.
Keywords
Additive Manufacturing, 3D Printing, Binder Jetting, Digital Light Processing, Financial Results, Cost Reduction, Adjusted EBITDA, Recurring Revenue, Gross Margin, Operating Expenses
DM
Desktop Metal, INC
NYSE
Sector: TBD
Filings with Classifications
Worse than expected
26 March 2025 5:20 PM
8-K Filing
- Revenue decreased from $189.7 million to $148.8 million year-over-year.
Worse than expected
31 October 2024 7:00 AM
Quarterly Report
- The company's revenue decreased by 15% year-over-year.
- The company reported a net loss of $35.4 million for the quarter and $191.0 million for the first nine months.
- The company's gross margin, while improved, is still relatively low at 9%.
Capital raise
31 October 2024 7:00 AM
Quarterly Report
- The company may need to raise additional capital through arrangements with Nano or from other sources, including equity and debt financings.
- The company has a multi-draw term loan credit facility with Nano for up to $20 million, available after January 7, 2025.
- The company may need to issue additional shares of capital stock or offer debt or other equity securities if the merger is not completed.
Worse than expected
23 September 2024 4:24 PM
Proxy Statement
- The company warns of potential dilutive financings or bankruptcy if the merger fails.
- Desktop Metal expects to run out of cash by the end of the first quarter of 2025 if the merger is not approved.
Capital raise
13 September 2024 4:02 PM
Proxy Statement
- The document mentions that if the merger is not approved, Desktop Metal may need to undertake financings.
- These financings may be severely dilutive to stockholders.
Worse than expected
13 September 2024 4:02 PM
Proxy Statement
- The company expects to run out of cash by the end of the first quarter 2025 if the merger is not approved.
- The company may need to undertake financings that may be severely dilutive to stockholders if the merger is not approved.
- There is a risk of bankruptcy if the merger is not approved.
Worse than expected
6 September 2024 4:38 PM
Proxy Statement
- Desktop Metal expects to run out of cash by the end of the first quarter of 2025 if the merger is not approved.
Capital raise
15 August 2024 7:00 AM
Definitive Proxy Statement
- The merger agreement includes a provision for a multi-draw term loan credit facility (Bridge Loan Facility) from Nano to Desktop Metal, up to $20 million, to provide working capital and liquidity.
Worse than expected
31 July 2024 4:15 PM
Earnings Conference Call Transcript
- The company's Q2 2024 revenue was down compared to the previous year.
- The company's non-GAAP gross margins were down compared to the previous year.
- The company's adjusted EBITDA was negative.
Worse than expected
30 July 2024 4:53 PM
Quarterly Report
- The company's revenue decreased by 27% compared to the same quarter last year.
- The company's gross margin was -83%, indicating significant losses on sales.
- The company's net loss increased significantly compared to the same quarter last year.
Capital raise
30 July 2024 4:53 PM
Quarterly Report
- The company plans to raise additional capital through a combination of potential options, including equity and debt financings.
- Nano Dimension agreed to provide a multi-draw term loan credit facility in an aggregate principal amount not to exceed $20.0 million, subject to certain conditions.
Worse than expected
30 July 2024 4:36 PM
Quarterly Report
- Revenue decreased from $53.3 million to $38.9 million compared to the same quarter last year.
- The company reported a net loss of $(103.4) million.
Worse than expected
30 July 2024 4:35 PM
Quarterly Report
- The company's revenue decreased significantly year-over-year.
- The company reported a substantial net loss, primarily due to one-time non-cash charges.
- The company's GAAP gross margin was negative, indicating poor profitability.
Delay expected
3 July 2024 4:24 PM
Merger Announcement
- The transaction is expected to close at the end of the year, but based on delays, maybe a few months later.
Worse than expected
3 July 2024 4:24 PM
Merger Announcement
- The combined company expects negative cash flow for the next six to eight quarters.
Delay expected
3 July 2024 7:32 AM
Merger Announcement
- The closing of the transaction is expected in the fourth quarter of 2024, but is subject to customary closing conditions, including regulatory approvals, which could cause delays.
Worse than expected
3 July 2024 7:32 AM
Merger Announcement
- The final purchase price is subject to downward adjustments based on transaction expenses and potential draws on a loan facility, which could reduce the value of the deal for Desktop Metal shareholders.
Capital raise
3 July 2024 7:32 AM
Merger Announcement
- Nano Dimension has committed to providing Desktop Metal with a $20 million secured loan facility if the closing of the transaction extends into 2025.
- The purchase price may be adjusted based on the amount drawn from the loan facility prior to closing.
Worse than expected
9 May 2024 6:02 AM
Quarterly Report
- The company's revenue decreased by 2% year-over-year, indicating worse than expected sales performance.
- The company reported a gross loss of $2.2 million, indicating worse than expected profitability.
- The company's net loss of $52.1 million was significant, indicating worse than expected financial results.
Capital raise
9 May 2024 6:02 AM
Quarterly Report
- The company entered into an Open Market Sale Agreement with Cantor Fitzgerald & Co. to sell shares of common stock for an aggregate offering price of up to $75.0 million.
- The company may need to further increase its capital resources by issuing additional shares of its capital stock or offering debt or other equity securities.
Better than expected
9 May 2024 6:00 AM
Quarterly Report
- The company's adjusted EBITDA improved by 44% year-over-year, indicating better than expected cost management.
- Non-GAAP operating expenses decreased for nine consecutive quarters, showing better than expected cost control.
- Cash consumption decreased by 47% year-over-year, demonstrating better than expected cash management.
Capital raise
23 April 2024 7:15 AM
Proxy Statement
- The company may offer common and preferred stock, debt securities, warrants, and units of up to $250.0 million in the aggregate under a shelf registration statement.
- The company may sell shares of its Class A common stock having aggregate sales proceeds of up to $75.0 million pursuant to an at the market offering program.
- The company intends to raise capital through equity or debt financing to fund its current operations.
Worse than expected
23 April 2024 7:15 AM
Proxy Statement
- The company needs to implement a reverse stock split to regain compliance with the NYSE minimum bid price requirement, indicating that the share price has fallen below acceptable levels.
Capital raise
15 March 2024 4:12 PM
Annual Results
- The company may need to further increase its capital resources by issuing additional shares of its capital stock or offering debt or other equity securities.
- The company may not be able to obtain additional financing on terms favorable to it, if at all.
Worse than expected
15 March 2024 4:12 PM
Annual Results
- The company experienced a net loss of $323.3 million in 2023, which is worse than the previous year.
- The company's revenue decreased by 9% in 2023 compared to 2022.
- The company's gross profit decreased by $25.2 million in 2023 compared to 2022.
Better than expected
15 March 2024 7:00 AM
Quarterly Report
- The company's net loss significantly decreased year-over-year, indicating improved financial performance.
- Adjusted EBITDA showed a substantial improvement, reaching the company's strongest quarterly performance to date.
- Non-GAAP gross margins improved significantly year-over-year.
Worse than expected
24 January 2024 8:05 AM
Strategic Business Review
- The company is implementing a significant workforce reduction and restructuring plan, indicating that the current financial performance is worse than expected.
- The company is facing a downturn in the additive manufacturing industry and a softer demand environment, which are contributing to the need for these cost-cutting measures.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.