Desktop Metal — Q2 2023 Earnings Presentation
24 slides from Desktop Metal's earnings presentation, Aug 3, 2023
Slide 1: Second Quarter 2023 Financial Results
Financial Results August 3, 2023 Second Quarter 2023
Slide 2: Q2 2023 financial results speakers and webcast
Desktop Metal (NYSE: DM) | Q2 2023 financial results Speakers ▪ Ric Fulop, Founder & CEO ▪ Jason Cole, CFO ▪ Jay Gentzkow, VP Investor Relations Webcast ▪ Domestic callers: (888) 999 - 3182 ▪ International callers: (848) 280 - 6330 ▪ Audio webcast archive available at https://ir.desktopmetal.com Con
Slide 3: Disclaimers
Disclaimers Cautionary Note Regarding Forward - Looking Statements Desktop Metal, lnc.’s second quarter 2023 financial results press release and schedules, financial results presentation, conf ere nce call webcast and related communications contain forward - looking statements within the meaning of
Slide 4: Executive Summary Second Quarter 2023
Executive Summary | Second Quarter 2023 Total Revenue Gross Margin (non - GAAP) Adj. EBITDA $ 53.3 M 31.0 % $ (15.0) M Growth of 29.0% q/q Decreased 7.6% y/y Expanded 1,300 bps q/q Expanded 435 bps y/y Improved $9.4M q/q Improved $12.5M y/y Business Highlights ▪ Best quarter for adj. EBITDA since go
Slide 5: AM 2.0 market leadership in the processes for mass production
AM 2.0 market leadership in the processes for mass production Binder Jetting Photopolymers TAM: $70+ billion (1) TAM: $200+ billion (4) Best - selling binder jet system (Shop System) (2) Fastest binder jet printer (Production System TM P - 50) (3) Largest metal binder jet build envelope (X160 PRO TM
Slide 6: Foams, sheet metal forming and printed hydraulics
Foams Sheet Metal Forming Printed Hydraulics TAM: $170+ billion (1) TAM: $300+ billion (2) TAM: $50+ billion (3) FreeFoam TM , a revolutionary, expandable 3D printable foam for mass production Figur G15, first platform of its kind to digitally shape standard sheet metal forming on - demand Global ma
Slide 7: Mercedes Benz AMG subframe and BMW Landshut examples
Mercedes Benz AMG subframe manufactured by a DM customer who employs a super fleet of 11 S - Max printers. This single 3D printed digital casting reduces weight by consolidating multiple previously stamped and welded sheet metal parts parts into a single part BMW Landshut plant hosts one of the larg
Slide 8: Vehicle OEMs are now looking to catch up to Giga Casting
Vehicle OEMs are now looking to catch up to Giga Casting
Slide 9: Prototyping giga castings with sand casting
PROTOTYPING GIGA CASTINGS WITH SAND CASTING How the sand casting process supports creating giga cast components for the automotive industry. Binder Jet is a key enabling component of the Tesla Giga Casting workflow Inspection of a Giga Cast mold printed by a Desktop Metal ExOne S - Max Pro at our cu
Slide 10: Strategic markets in production binder jet printing
SiC power electronics for electric vehicles, single crystal SiC wafers, non oxide ceramics, 3D sputtering targets, high temperature ceramic heat exchangers, optics for space comm / telescopes, printed nuclear fuel Giga Casting for automotive, electric vehicles, and large aerospace printed castings b
Slide 11: Binder jet vs laser metal printing comparison
3D Systems DMP - 500 Laser Velo XC 1MZ Laser DM Metal P - 50/160Pro Binder Jet DM Casting S - Max/Exerial Binder Jet Throughput <80 cc/hr ~80 cc/hr +12,000cc/hr 10,000cc/hr +145,000cc/hr 350,000cc/hr Cost per part est. $1,000/kg est. $600/kg < $50/kg < $10/kg Materials 10*** 11*** +30 +100s of alloy
Slide 12: Committed to Adj. EBITDA profitability this year
Committed to Adj. EBITDA profitability this year Delivering on our $100M annualized cost savings ▪ Committed to reaching adj. EBITDA breakeven by Q4 2023 ▪ Cost reduction plans on track to achieve $100M annualized savings – Six production facility closures completed end of Q2 (on plan) – Q3 2023 res
Slide 13: Creating the powerhouse in global industrial additive manufacturing
+ Creating the powerhouse in global industrial additive manufacturing 01 Category leader at scale ▪ First AM company to achieve comprehensive scale across full manufacturing lifecycle – metals and polymers ▪ Combination creates $1.1B (1) revenue platform to lead AM industry into mass production 04 U
Slide 14: Financial Summary Second Quarter 2023
Financial Summary Second Quarter 2023
Slide 15: Financial review: revenue & gross margin
Financial review | revenue & gross margin ▪ Q2’23 gross margin (non - GAAP) of 31.0% – Increased 1,300 bps sequentially from Q1’23 – Increased 435 bps from Q2’22 – GM expansion driven by lower fixed cost structure in COGS – Expect continued GM expansion in H2’23 with Q3’23 reflecting first full quar
Slide 16: Financial review: operating expenses
119% 80% 88% 63% 85% 65% Q1 Q2 Q3 Q4 2022 2023 $52.1 $46.1 $41.5 $37.9 $35.0 $34.7 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Financial review | operating expenses ▪ Operating expenses (non - GAAP) as a percentage of revenue was 65% in Q2’23 vs. 80% in Q2’22 – Expect continued trend of improving expense st
Slide 17: Financial review: adj. EBITDA
Financial review | adj. EBITDA ▪ Q2’23 adj. EBITDA of $(15.0) million – Best quarter for adj. EBITDA since going public – Improvement of $12.5 million from Q2’22 driven by expense reduction efforts – OpEx reductions expected to support sequential adj. EBITDA improvements in H2’23 on the way to reach
Slide 18: Financial Outlook Full Year 2023 Guidance
Financial Outlook Full Year 2023 Guidance
Slide 19: 2023 financial outlook
2023 financial outlook Key planning assumptions ▪ Continue to see a wider range of variability outcomes ▪ We expect H2’23 to show significant improvement in adj. EBITDA and cash flow, on our way to reaching adj. EBITDA breakeven by year end 2023 ▪ Outlook excludes impact of future acquisitions and d
Slide 20: 2023 strategic focus areas
2023 strategic focus areas 01 Drive organic revenue growth, at scale ▪ Deliver on 2023 revenue growth targets despite uncertain macro environment ▪ Position business to capitalize on long - term growth opportunity 03 Intense focus on our customers ▪ Scaling best - in - class integrated solutions to
Slide 21: Production examples Appendix
Productions examples Appendix Desktop Metal Production System P - 50 printer and auxiliary equipment
Slide 22: Continued progress on healthcare and dental
Continued progress on healthcare and dental New Bioplotter for 3D bioprinting with exclusive capabilities to print stents, vascular, digestive and respiratory grafts (1) Best in class Desktop Health materials are now available to the Carbon installed customer base We're proud to celebrate an industr
Slide 23: Non-GAAP reconciliations
Non - GAAP reconciliations ($ in thousands) Q2'23 Q1'23 Q4'22 Q3'22 Q2'22 Q1'22 FY 2022 GAAP gross margin 6,089$ (1,364)$ 8,311$ (309)$ 8,397$ (1,328)$ 15,071$ Stock-based compensation in cost of sales 590 680 365 734 671 487 2,257 Amortization of acquired intangible assets in cost of sales6,928 6,9
Slide 24: Adjusted EBITDA reconciliation
Adjusted EBITDA reconciliation ($ in thousands) Q2'23 Q1'23 Q4'22 Q3'22 Q2'22 Q1'22 FY 2022 Net loss attributable to common stockholders (49,728)$ (52,642)$ (312,353)$ (60,774)$ (297,272)$ (69,944)$ (740,343)$ Interest (income) expense, net 1,109 811 462 680 633 (32) 1,743 Income tax expense (benefi