DM
Desktop Metal, INC
NYSE
8-K: Desktop Metal Reports Q1 2024 Results: Revenue Slightly Down, Cost Cuts Drive Improved EBITDA
Sentiment:
Quarterly Report
9 May 2024 6:00 AM
Desktop Metal's first quarter 2024 results show a slight revenue decrease year-over-year but significant improvements in adjusted EBITDA due to ongoing cost reduction efforts.
Better than expected
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.
Summary
- Desktop Metal announced its financial results for the first quarter of 2024, with revenue of $40.6 million, a slight decrease from $41.3 million in the same quarter last year.
- The company reported a net loss of $(52.1) million, which was impacted by one-time non-cash charges related to accelerated amortization and depreciation.
- Adjusted EBITDA for the quarter was $(13.6) million, a 44% improvement year-over-year, driven by cost reduction initiatives.
- GAAP operating expenses decreased by 7% year-over-year, while non-GAAP operating expenses declined for the ninth consecutive quarter to $28.6 million, a 45% decrease from the start of the cost reduction initiative.
- The company's cash, cash equivalents, and short-term investments totaled $66.3 million at the end of the quarter, with cash consumption down 47% compared to the same period last year.
- Desktop Metal reaffirmed its full-year 2024 revenue guidance of $175 million to $215 million and adjusted EBITDA guidance of $(30) million to $(10) million.
- The company is exploring strategic alternatives for its photopolymer portfolio to accelerate the path to positive adjusted EBITDA.
Sentiment
Score: 7
Explanation: The sentiment is moderately positive due to the significant improvement in adjusted EBITDA and cost reductions, despite a slight revenue decrease and a net loss. The company's outlook for positive adjusted EBITDA in the second half of 2024 is also a positive factor.
Positives
- Adjusted EBITDA improved by 44% year-over-year, indicating successful cost reduction efforts.
- Non-GAAP operating expenses have decreased for nine consecutive quarters, demonstrating effective cost management.
- Cash consumption has decreased by 47% year-over-year, improving the company's financial stability.
- The company is seeing strong demand for its production binder jet systems.
- Desktop Metal expects to achieve positive adjusted EBITDA in the second half of 2024.
- The company has launched new products and expanded partnerships, indicating continued innovation and growth.
Negatives
- Revenue decreased slightly year-over-year, indicating some challenges in sales growth.
- The company reported a significant net loss of $(52.1) million, although this was impacted by one-time non-cash charges.
- GAAP gross margin was negative at (5.4)%, although non-GAAP gross margin was positive at 30.5%.
Risks
- The company faces persistent challenges across the capital investment backdrop, which has been a headwind to overall demand.
- The company's net loss was significantly impacted by one-time non-cash charges related to accelerated amortization and depreciation.
- The company's ability to achieve positive adjusted EBITDA in the second half of 2024 is dependent on continued cost reductions and sales growth.
- The company is exploring strategic alternatives for its photopolymer portfolio, which could indicate potential challenges in that area.
Future Outlook
Desktop Metal reaffirms its full-year 2024 revenue guidance of $175 million to $215 million and adjusted EBITDA guidance of $(30) million to $(10) million. The company expects to achieve positive adjusted EBITDA in the second half of 2024.
Management Comments
- Ric Fulop, Founder and CEO of Desktop Metal, stated that the company started 2024 on a solid foot despite persistent challenges across the capital investment backdrop.
- Ric Fulop also noted the DM team's continued ability to improve operational performance and decrease operating expenses for the ninth consecutive quarter.
- Management is confident in achieving positive adjusted EBITDA in the second half of 2024.
Industry Context
The announcement reflects the ongoing challenges and opportunities in the additive manufacturing sector, where companies are balancing growth with cost management. Desktop Metal's focus on cost reduction and strategic partnerships aligns with industry trends towards efficiency and innovation.
Comparison to Industry Standards
- Desktop Metal's revenue decline of less than 2% year-over-year is relatively modest compared to some other companies in the additive manufacturing sector that have experienced more significant declines.
- The 44% improvement in adjusted EBITDA is a positive sign, indicating that the company's cost-cutting measures are having a significant impact.
- Companies like Stratasys and 3D Systems, which are also in the 3D printing space, have been focusing on similar cost-cutting measures and strategic partnerships to improve their financial performance.
- Desktop Metal's focus on binder jetting and digital light processing technologies positions them well in the market, as these technologies are gaining traction for mass production applications.
- The company's non-GAAP gross margin of 30.5% is a positive indicator, suggesting that the company is able to generate a healthy profit margin on its products and services.
Stakeholder Impact
- Shareholders may view the improved adjusted EBITDA and cost reductions positively.
- Employees may be impacted by ongoing cost reduction efforts.
- Customers may benefit from new product launches and partnerships.
- Suppliers may be affected by changes in the company's operations and strategic direction.
Next Steps
- The company will continue to execute its cost reduction plans.
- Desktop Metal will explore strategic alternatives for its photopolymer portfolio.
- The company will host a conference call on May 9, 2024, to discuss the first quarter 2024 results.
Key Dates
- March 31, 2024: End of the first quarter of fiscal year 2024.
- May 9, 2024: Date of the press release announcing Q1 2024 financial results and the date of the 8-K filing.
Keywords
Additive Manufacturing, 3D Printing, Binder Jetting, Digital Light Processing, Financial Results, EBITDA, Cost Reduction, Operating Expenses, Revenue, Net Loss
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.
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 4:53 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.
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.
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 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 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.
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.
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.
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