- Revenue of $40.6 million, down less than 2% year over year
- 1Q 2024 net loss of $(52.1) million, impacted by one-time
noncash charges related to accelerated amortization and
depreciation on certain intangible and fixed assets
- Adjusted EBITDA of $(13.6 million), a year-over-year
improvement of 44%
- Ongoing cost reduction efforts continue to yield improvements
to adjusted EBITDA, gross margins, non-GAAP gross margins,
operating expenses, and operating cash flow
- Quarterly GAAP operating expenses declined 7% year over year.
Quarterly non-GAAP operating expenses declined for nine consecutive
quarters to $28.6 million, down 45% from the quarter before start
of DM’s cost reduction initiative
- Continue to explore strategic alternatives for Desktop Metal’s
photopolymer portfolio to accelerate the path to positive adjusted
EBITDA
Desktop Metal, Inc. (NYSE: DM), a global leader in Additive
Manufacturing 2.0 technologies for mass production, today announced
its financial results for the first quarter ended March 31,
2024.
“We started 2024 on a solid foot, despite persistent challenges
across the capital investment backdrop, which has been a headwind
to our overall demand function. The DM team has shown a continued
ability to improve operational performance as we decrease our
operating expenses for the ninth consecutive quarter,” said Ric
Fulop, Founder and CEO of Desktop Metal.
“We are continuing to see strong demand for our production
binder jet systems that produce metal, sand and ceramic parts, as
well as a constructive environment for the value of Additive
Manufacturing 2.0 systems. Looking ahead to the balance of 2024, we
are confident in achieving positive adjusted EBITDA in the second
half of 2024. Given our strategic cost-outs, we expect strong
leverage as sales growth returns.”
First Quarter 2024 Recent Business Highlights:
Corporate
- Continued execution of cost reduction plans with expectation of
positive adjusted EBITDA in the second half of 2024
Product Performance
- Desktop Health launches ScanUp™ digital dentistry adoption
subscription program to modernize dental practice efficiency and
patient care
- Desktop Metal and Evonik expand partnership, announce
qualification of INFINAM® ST 6100 L on large format Additive
Manufacturing 2.0 systems for high-performance, high-temperature
products
- Desktop Health™ announces Flexcera™ Base Ultra+ dental resin
for stronger, more comfortable 3D Printed dentures
First Quarter 2024 Financial Highlights
- Revenue of $40.6 million, down from $41.3 million in the same
quarter a year ago.
- GAAP gross margin of (5.4)%; Non-GAAP gross margin of 30.5%, a
year-over-year improvement of 69.9%. GAAP gross margins impacted by
one-time noncash charges related to accelerated amortization and
depreciation on certain intangible and fixed assets
- 1Q 2024 net loss of $(52.1) million, impacted by one-time
noncash charges related to accelerated amortization and
depreciation on certain intangible and fixed assets
- Adjusted EBITDA of $(13.6) million, a year-over-year
improvement of 44.3%
- Cash, cash equivalents, and short-term investments closed first
quarter 2024 at $66.3 million, as rate of cash consumption declined
47% compared to the same year-ago quarter
Financial Outlook
Reaffirm 2024 full year guidance of:
- Revenue expectation of between $175 million to $215 million for
2024
- Adjusted EBITDA of between $(30) million to $(10) million for
full-year 2024
Desktop Metal has not provided a reconciliation of its Adjusted
EBITDA outlook to net income because estimates of all of the
reconciling items cannot be provided without unreasonable efforts.
See “Non-GAAP Financial Information.”
Conference Call Information:
Desktop Metal will host a conference call on Thursday, May 9,
2024 at 8:30 am ET to discuss first quarter 2024 results.
Participants may access the call at 1-888-886-7786, international
callers may use 1-416-764-8658, and request to join the Desktop
Metal financial results conference call. A simultaneous webcast of
the conference call and the accompanying summary presentation may
be accessed online at the Events & Presentations section of
ir.desktopmetal.com. A replay will be available shortly after the
conclusion of the conference call at the same website.
About Desktop Metal:
Desktop Metal (NYSE:DM) is driving Additive Manufacturing 2.0, a
new era of on-demand, digital mass production of industrial,
medical, and consumer products. Our innovative 3D printers,
materials, and software deliver the speed, cost, and part quality
required for this transformation. We’re the original inventors and
world leaders of the 3D printing methods we believe will empower
this shift, binder jetting and digital light processing. Today, our
systems print metal, polymer, sand and other ceramics, as well as
foam and recycled wood. Manufacturers use our technology worldwide
to save time and money, reduce waste, increase flexibility, and
produce designs that solve the world’s toughest problems and enable
once-impossible innovations. Learn more about Desktop Metal and our
#TeamDM brands at www.desktopmetal.com.
Forward-looking Statements:
This press release contains forward-looking statements within
the meaning of the federal securities laws. All statements other
than statements of historical facts contained in these
communications, including statements regarding Desktop Metal’s
future results of operations and financial position, financial
targets, business strategy, and plans and objectives for future
operations, are forward-looking statements. Forward-looking
statements generally are identified by the words “believe,”
“project,” “expect,” “anticipate,” “estimate,” “intend,”
“strategy,” “future,” “opportunity,” “plan,” “may,” “should,”
“will,” “would,” “will be,” “will continue,” “will likely result,”
and similar expressions. Forward-looking statements are
predictions, projections and other statements about future events
that are based on current expectations and assumptions and, as a
result, are subject to risks and uncertainties. Many factors could
cause actual future events to differ materially from the
forward-looking statements in this document, including but not
limited to: demand for Desktop Metal’s products and services; the
global macro-economic environment; impacts of rapid technological
change in the additive manufacturing industry; Desktop Metal’s
ability to realize the benefits from cost saving measures; and
supply and logistics disruptions, including shortages and delays.
For more information about risks and uncertainties that may impact
Desktop Metal’s business, financial condition, results of
operations and prospects generally, please refer to Desktop Metal’s
reports filed with the SEC, including without limitation the “Risk
Factors” and/or other information included in the Form 10-K filed
with the SEC on March 15, 2024, and such other reports as Desktop
Metal has filed or may file with the SEC from time to time. These
filings identify and address other important risks and
uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking statements.
Forward-looking statements speak only as of the date they are made.
Readers are cautioned not to put undue reliance on forward-looking
statements, and Desktop Metal, Inc. assumes no obligation and does
not intend to update or revise these forward-looking statements,
whether as a result of new information, future events, or
otherwise.
DESKTOP METAL, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(UNAUDITED)
(in thousands, except share
and per share amounts)
March 31,
December 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
65,559
$
83,845
Current portion of restricted cash
216
233
Short-term investments
495
625
Accounts receivable
35,420
37,690
Inventory
83,097
82,639
Prepaid expenses and other current
assets
11,008
11,105
Assets held for sale
1,528
—
Total current assets
197,323
216,137
Restricted cash, net of current
portion
612
612
Property and equipment, net
31,651
35,840
Intangible assets, net
146,545
168,259
Other noncurrent assets
35,899
37,153
Total Assets
$
412,030
$
458,001
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
18,332
$
18,190
Customer deposits
4,271
5,356
Current portion of lease liability
7,793
7,404
Accrued expenses and other current
liabilities
24,936
27,085
Current portion of deferred revenue
14,179
11,739
Current portion of long-term debt, net of
deferred financing costs
276
330
Total current liabilities
69,787
70,104
Long-term debt, net of current portion
58
89
Convertible notes
112,747
112,565
Lease liability, net of current
portion
22,563
23,566
Deferred revenue, net of current
portion
3,564
3,696
Deferred tax liability
3,202
3,523
Other noncurrent liabilities
2,771
2,806
Total liabilities
214,692
216,349
Commitments and Contingencies (Note
17)
Stockholders’ Equity
Preferred Stock, $0.0001 par
value—authorized, 50,000,000 shares; no shares issued and
outstanding at March 31, 2024 and December 31, 2023,
respectively
—
—
Common Stock, $0.0001 par
value—500,000,000 shares authorized; 329,705,193 and 325,277,419
shares issued at March 31, 2024 and December 31, 2023,
respectively, 329,705,193 and 325,271,670 shares outstanding at
March 31, 2024 and December 31, 2023, respectively
33
33
Additional paid-in capital
1,917,506
1,908,504
Accumulated deficit
(1,684,323
)
(1,632,225
)
Accumulated other comprehensive loss
(35,878
)
(34,660
)
Total Stockholders’ Equity
197,338
241,652
Total Liabilities and Stockholders’
Equity
$
412,030
$
458,001
See notes to condensed
consolidated financial statements
DESKTOP METAL, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per
share amounts)
Three Months Ended
March 31,
2024
2023
Revenues
Products
$
35,631
$
36,697
Services
4,969
4,619
Total revenues
40,600
41,316
Cost of sales
Products
39,019
38,891
Services
3,787
3,789
Total cost of sales
42,806
42,680
Gross loss
(2,206
)
(1,364
)
Operating expenses
Research and development
19,813
23,144
Sales and marketing
11,153
9,607
General and administrative
16,217
18,202
Total operating expenses
47,183
50,953
Loss from operations
(49,389
)
(52,317
)
Interest expense
(1,491
)
(811
)
Interest and other expense, net
(1,416
)
(71
)
Loss before income taxes
(52,296
)
(53,199
)
Income tax benefit
198
$
557
Net loss
$
(52,098
)
$
(52,642
)
Net loss per share—basic and diluted
(0.16
)
(0.16
)
Weighted average shares outstanding, basic
and diluted
327,124,115
319,095,656
See notes to condensed
consolidated financial statements.
DESKTOP METAL, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
(in thousands)
Three Months Ended
March 31,
2024
2023
Net loss
$
(52,098
)
$
(52,642
)
Other comprehensive loss, net of
taxes:
Unrealized gain (loss) on
available-for-sale marketable securities, net
(451
)
189
Foreign currency translation
adjustment
(767
)
1,549
Total comprehensive loss, net of taxes of
$0
$
(53,316
)
$
(50,904
)
See notes to condensed
consolidated financial statements.
DESKTOP METAL, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
(in thousands, except share
amounts)
Three Months Ended March 31,
2024
Accumulated
Other
Common Stock
Additional
Comprehensive
Total
Voting
Paid-in
Accumulated
(Loss)
Stockholders’
Shares
Amount
Capital
Deficit
Income
Equity
BALANCE—January 1, 2024
325,271,670
$
33
$
1,908,504
$
(1,632,225
)
$
(34,660
)
$
241,652
Exercise of Common Stock options
—
—
—
—
—
—
Vesting of restricted Common Stock
5,749
—
—
—
—
—
Vesting of restricted stock units
4,963,667
—
—
—
—
—
Repurchase of shares for employee tax
withholdings
(535,893
)
—
(328
)
—
—
(328
)
Issuance of common stock related to
share-based liability awards
—
—
1,997
—
—
1,997
Stock-based compensation expense
—
—
7,333
—
—
7,333
Net loss
—
—
—
(52,098
)
—
(52,098
)
Other comprehensive income (loss)
—
—
—
—
(1,218
)
(1,218
)
BALANCE—March 31, 2024
329,705,193
$
33
$
1,917,506
$
(1,684,323
)
$
(35,878
)
$
197,338
Three Months Ended March 31,
2023
Accumulated
Other
Common Stock
Additional
Comprehensive
Total
Voting
Paid-in
Accumulated
(Loss)
Stockholders’
Shares
Amount
Capital
Deficit
Income
Equity
BALANCE—January 1, 2023
318,133,434
$
32
$
1,874,792
$
(1,308,954
)
$
(38,368
)
$
527,502
Exercise of Common Stock options
495,876
—
597
—
—
597
Vesting of restricted Common Stock
25,375
—
—
—
—
—
Vesting of restricted stock units
1,808,422
—
—
—
—
—
Repurchase of shares for employee tax
withholdings
(61,718
)
—
(99
)
—
—
(99
)
Stock-based compensation expense
—
—
8,474
—
—
8,474
Net loss
—
—
—
(52,642
)
—
(52,642
)
Other comprehensive income (loss)
—
—
—
—
1,738
1,738
BALANCE—March 31, 2023
320,401,389
$
32
$
1,883,764
$
(1,361,596
)
$
(36,630
)
$
485,570
See notes to condensed
consolidated financial statements.
DESKTOP METAL, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
Three Months Ended March
31,
2024
2023
Cash flows from operating
activities:
Net loss
$
(52,098
)
$
(52,642
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
24,185
13,433
Stock-based compensation
7,838
9,313
Amortization (accretion) of discount on
investments
—
(382
)
Amortization of deferred costs on
convertible notes
182
183
Provision for bad debt
123
179
Loss on disposal of property and
equipment
30
519
Net decrease in accrued interest related
to marketable securities
—
(8
)
Net unrealized loss on equity
investment
130
402
Deferred tax benefit
(198
)
(557
)
Foreign currency transaction loss
(gain)
488
(25
)
Changes in operating assets and
liabilities:
Accounts receivable
2,001
2,792
Inventory
(1,763
)
(6,892
)
Prepaid expenses and other current
assets
9
(4,664
)
Other assets
2,317
991
Accounts payable
87
(3,011
)
Accrued expenses and other current
liabilities
(418
)
878
Customer deposits
(1,046
)
705
Current portion of deferred revenue
2,397
1,127
Change in right of use assets and lease
liabilities, net
(1,684
)
(1,493
)
Other liabilities
11
1,806
Net cash used in operating
activities
(17,409
)
(37,346
)
Cash flows from investing
activities:
Purchases of property and equipment
(93
)
(1,011
)
Proceeds from sale of property and
equipment
—
3,071
Purchase of marketable securities
—
(4,973
)
Proceeds from sales and maturities of
marketable securities
—
64,840
Cash paid for acquisitions, net of cash
acquired
—
(500
)
Net cash (used in) provided by
investing activities
(93
)
61,427
Cash flows from financing
activities:
Proceeds from the exercise of stock
options
—
597
Payment of taxes related to net share
settlement upon vesting of restricted stock units
(328
)
(99
)
Repayment of loans
(79
)
(250
)
Net cash (used in) provided by
financing activities
(407
)
248
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(394
)
217
Net increase (decrease) in cash, cash
equivalents, and restricted cash
(18,303
)
24,546
Cash, cash equivalents, and restricted
cash at beginning of period
84,690
81,913
Cash, cash equivalents, and restricted
cash at end of period
$
66,387
$
106,459
Supplemental disclosures of cash flow
information
Reconciliation of cash, cash equivalents
and restricted cash reported within the condensed consolidated
balance sheets that sum to the total shown in the condensed
consolidated statements of cash flows:
Cash and cash equivalents
$
65,559
$
101,252
Restricted cash included in other current
assets
216
4,595
Restricted cash included in other
noncurrent assets
612
612
Total cash, cash equivalents and
restricted cash shown in the condensed consolidated statements of
cash flows
$
66,387
$
106,459
Supplemental cash flow
information:
Interest paid
$
—
$
—
Taxes paid
$
—
$
—
Non-cash investing and financing
activities:
Net unrealized gain on investments
$
—
$
(189
)
Additions to right of use assets and lease
liabilities
$
863
$
1,531
Purchase of property and equipment
included in accounts payable
$
190
$
183
Purchase of property and equipment
included in accrued expense
$
—
$
32
Transfers from property and equipment to
inventory
$
—
$
275
Transfers from PP&E to Asset
Held-For-Sale
$
1,528
6,040
Transfers from inventory to property and
equipment
$
772
$
1,067
See notes to condensed
consolidated financial statements.
Non-GAAP Financial Information
This press release contains non-GAAP financial measures,
including non-GAAP gross margin, non-GAAP operating loss, non-GAAP
net loss, non-GAAP operating expense, EBITDA and Adjusted
EBITDA.
- We define non-GAAP gross margin as GAAP gross margin excluding
the effect of stock-based compensation, amortization of acquired
intangible assets, restructuring, acquisition-related and
integration costs, and inventory step-up adjustments
- We define non-GAAP operating loss as GAAP operating loss
excluding the effect of stock-based compensation, amortization of
acquired intangible assets, restructuring, inventory step-up
adjustments, and acquisition-related and integration costs
- We define non-GAAP net loss as GAAP net loss excluding the
effect of stock-based compensation, amortization of acquired
intangible assets, restructuring, inventory step-up adjustments,
acquisition-related and integration costs, and change in fair value
of investments
- We define non-GAAP operating expense as GAAP operating expense
excluding the effect of stock-based compensation, amortization of
acquired intangible assets, restructuring, and acquisition-related
and integration costs including in operating expenses
- We define EBITDA as GAAP net income (loss) excluding interest,
income taxes, and depreciation and amortization expense
- We define Adjusted EBITDA as EBITDA excluding change in fair
value of investments, inventory step-up adjustments, stock-based
compensation, restructuring, and acquisition-related and
integration costs
In addition to Desktop Metal’s results determined in accordance
with GAAP, Desktop Metal’s management uses this non-GAAP financial
information to evaluate the Company’s ongoing operations and for
internal planning and forecasting purposes. We believe that this
non-GAAP financial information, when taken collectively, may be
helpful to investors in assessing Desktop Metal’s operating
performance.
We believe that the use of Non-GAAP gross margin, non-GAAP
operating loss, non-GAAP net loss, non-GAAP operating expense,
EBITDA and Adjusted EBITDA provides an additional tool for
investors to use in evaluating ongoing operating results and trends
because it eliminates the effect of financing, capital
expenditures, and non-cash expenses such as stock-based
compensation and warrants, and provides investors with a means to
compare Desktop Metal’s financial measures with those of comparable
companies, which may present similar non-GAAP financial measures to
investors. However, investors should be aware that when evaluating
non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss,
non-GAAP operating expense, EBITDA and Adjusted EBITDA, we may
incur future expenses similar to those excluded when calculating
these measures. In addition, our presentation of these measures
should not be construed as an inference that our future results
will be unaffected by unusual or non-recurring items. Our
computation of these measures may not be comparable to other
similarly titled measures computed by other companies because not
all companies calculate these measures in the same fashion.
Because of these limitations, non-GAAP gross margin, non-GAAP
operating loss, non-GAAP net loss, non-GAAP operating expense,
EBITDA and Adjusted EBITDA should not be considered in isolation or
as a substitute for performance measures calculated in accordance
with GAAP. We compensate for these limitations by relying primarily
on our GAAP results and using non-GAAP gross margin, non-GAAP
operating loss, non-GAAP net loss, non-GAAP operating expense,
EBITDA and Adjusted EBITDA on a supplemental basis. Management
uses, and investors should consider, our non-GAAP financial
measures only in conjunction with our GAAP results. Desktop Metal
has not provided a reconciliation of its Adjusted EBITDA outlook to
net income because estimates of all of the reconciling items cannot
be provided without unreasonable efforts.
Set forth below is a reconciliation of each non-GAAP financial
measure used in this press release to its most directly comparable
GAAP financial measure.
DESKTOP METAL, INC.
NON-GAAP RECONCILIATION
TABLE
(in thousands)
For the Three Months
Ended
March 31,
(Dollars in thousands)
2024
2023
GAAP gross margin
$
(2,206
)
$
(1,364
)
Stock-based compensation included in cost
of sales(1)
568
680
Amortization of acquired intangible assets
included in cost of sales(2)
14,340
6,927
Restructuring expense in cost of
sales(2)
(309
)
717
Acquisition-related and integration costs
included in cost of sales
—
479
Non-GAAP gross margin
$
12,393
$
7,439
GAAP operating loss
$
(49,389
)
$
(52,317
)
Stock-based compensation(2)
7,838
9,313
Amortization of acquired intangible
assets
21,047
10,442
Restructuring expense(3)
3,007
3,618
Acquisition-related and integration
costs
1,255
1,406
Non-GAAP operating loss
$
(16,242
)
$
(27,538
)
GAAP net loss
$
(52,098
)
$
(52,642
)
Stock-based compensation(2)
7,838
9,313
Amortization of acquired intangible
assets
21,047
10,442
Restructuring expense(3)
3,007
3,618
Acquisition-related and integration
costs
1,255
1,406
Change in fair value of investments
1,317
179
Non-GAAP net loss
$
(17,634
)
$
(27,684
)
(1) Includes immaterial and $0.2
million of liability-award stock-based compensation expense for the
three months ended March 31, 2024 and 2023.
(2) Includes $0.5 million and
$1.6 million of liability-award stock-based compensation expense
for the three months ended March 31, 2024 and 2023,
respectively.
(3) Includes $0.4 million of
depreciation classified as restructuring charges.
DESKTOP METAL, INC.
NON-GAAP OPERATING EXPENSE
RECONCILIATION TABLE
(in thousands)
For the Three Months
Ended
March 31,
(Dollars in thousands)
2024
2023
GAAP operating expenses
$
47,183
$
50,953
Stock-based compensation included in
operating expenses(1)
(7,270
)
(8,633
)
Amortization of acquired intangible assets
included in operating expenses
(6,707
)
(3,515
)
Restructuring expense included in
operating expenses
(3,316
)
(2,901
)
Acquisition-related and integration costs
included in operating expenses
(1,255
)
(927
)
Non-GAAP operating expenses
$
28,635
$
34,977
(1) Includes $0.5 million and
$1.6 million of liability-award stock-based compensation expense
for the three months ended March 31, 2024 and 2023,
respectively.
DESKTOP METAL, INC.
NON-GAAP ADJUSTED EBITDA
RECONCILIATION TABLE
(in thousands)
For the Three Months
Ended
March 31,
(Dollars in thousands)
2024
2023
Net loss attributable to common
stockholders
$
(52,098
)
$
(52,642
)
Interest expense
1,491
811
Income tax benefit
(198
)
(557
)
Depreciation and amortization (2)
24,185
13,433
EBITDA
(26,620
)
(38,955
)
Change in fair value of investments
1,317
179
Stock-based compensation expense(1)
7,838
9,313
Restructuring expense (2)
2,592
3,618
Acquisition-related and integration
costs
1,255
1,406
Adjusted EBITDA
$
(13,618
)
$
(24,439
)
(1) Includes $0.5 million and
$1.6 million of liability-award stock-based compensation for the
three months ended March 31, 2024 and 2023, respectively.
(2) In connection with the
Photopolymer Initiative, we recorded incremental depreciation of
$0.4 million and incremental amortization of $11.2 million for the
shortened useful life various fixed assets and intangibles to
restructuring charges. These amounts are listed in the depreciation
and amortization line.
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Investor Relations: (857) 504-1084
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Desktop Metal (NYSE:DM)
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Desktop Metal (NYSE:DM)
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From May 2023 to May 2024
