3D Printing Financials: ExOne Reports 11% Revenue Growth in 2020

It has been a solid fourth quarter in 2020 for binder jetting printing pioneer ExOne (Nasdaq: XONE). The company reported better than expected revenue results on March 11, 2021, and a record year-end backlog of $39.4 million, a 27% increase year-over-year. The COVID-19 pandemic has been and continues to be a challenge with a negative impact on the overall 3D printing market. However, ExOne wants to ensure that their printers are the go-to solution for businesses reconfiguring their supply chain to adopt binder jetting technology.

For its fourth quarter, ExOne posted a loss of 21 cents per share, compared to a loss of 12 cents per share a year ago. The day after the earnings report was released, company stock – trading under the ticker symbol XONE on NASDAQ – jumped 1.96%, from $35.69 on March 11, 2021, to a closing value of $36.39 on March 12. During 2020, stock fluctuated between $3.85 and $15.29 and began a rising trend in January 2021, reaching its highest value in five years on February 9, 2021, at $64.50.

ExOne CEO John Hartner. Image courtesy of ExOne.

Quarterly revenues were $17.4 million, down just under 1% year-over-year but keeping up with record revenues reported in the third period of 2020 and at the high end of the pre-announced revenues in early February. Despite an increase in unit volume sales, the decrease was mainly driven by a 9% drop in revenue from 3D printing machines due to the mix of devices sold.

Overall, ExOne grew 11% in 2020 compared to 2019, when revenues were at $53.3 million, now at $59.3 million. This was mainly spurred by solid growth in industrial, government, and defense end markets and increased sales of its new metal printing systems, including the bound Metal Designlab printer developed in partnership with Rapidia. From a geographic perspective, the full-year revenue was led by a 30% increase in the Americas region, said CEO John Hartner during the Q4 2020 earnings call. It reflected the secular trend towards reshoring manufacturing and more distributed supply chains, which we can expect to see more in the future.

The ExOne Metal Designlab printer and X1F advanced furnace. Image courtesy of ExOne.

According to company management, recurring revenue continues to grow, rising 10% sequentially and 11% year-over-year to $7.6 million in Q4 2020, demonstrating success from several strategic initiatives, particularly the new government-funded research and development contract wins. For example, ExOne was recently awarded a contract from the U.S. Department of Defense (DOD) to develop a 3D printing factory in a shipping container.

For the full-year, recurring revenue rose 7% to $27.8 million with attractive increases in service contracts and consumable capture rates. Growing this pool of revenue has been an area of strategic focus for ExOne, said Hartner, since it provides stability to the business during periods of economic volatility, such as the ongoing coronavirus pandemic.

Another major announcement was the launch of the 6061 high-strength aluminum material for its binder jetting system in collaboration with the Ford Motor Company. A new patent-pending process was revealed as a rapid and repeatable method of making aluminum parts much faster than other 3D printing methods, capable of scaling to the volumes needed for automotive use.

ExOne qualifies aluminum binder jet 3D printing with Ford Motor Company. Image courtesy of ExOne.

The project has led the two companies to print parts that show density and material properties never thought possible, the same as die-casted parts. Ford is also calling this “a breakthrough in making 3D printed and sintering parts for the automotive industry.”. In contrast, Hartner called it a big win for ExOne, showing the importance of this new market opportunity for high-volume 3D printed 6061 aluminum parts.

“While our total fourth-quarter revenue was essentially flat on both a sequential quarter and year-over-year basis, we continue to be encouraged by the growth in our recurring revenue,” described Hartner. “We are pleased to have achieved top-line growth in excess of 20% in the second half of 2020, driven by higher unit sales of our industrial 3D printers. This performance reflects growing interest in our technology, the competitive strength of our solutions, as well as the execution of our global team.”

ExOne’s binder jetting technology. Image courtesy of ExOne.

With an enhanced liquidity position, ExOne will attempt to increase its investments in initiatives that accelerate growth. Notably, by expanding its longtime binder jetting leadership into the broader metal 3D printing category, where it sees organic and inorganic opportunities to reshape the market. To leverage a broader product line, ExOne will expand sales and distribution capabilities, particularly in Asia.

According to the report, ExOne recognized 18 machines in the fourth quarter, compared to 14 in the same period ending December 2019. Sales of sand systems decreased from 11 units in Q4 2019 to five units in Q4 2020 and continue to be impacted by negative trends in end markets where this equipment is used, primarily in the automotive sector, revealed Chief Financial Officer Douglas Zemba.

The ExOne 25PRO metal 3D printer. Image courtesy of ExOne.

At the same time, sales of metal systems increased from three units in Q4 2019 to 13 units in Q4 2020, boosted by sales of the 25PRO binder jet printing platform, introduced in late 2019, and increases in sales of the advanced entry-level binder jetting system Innovent, as a result of growing market awareness for metal binder jetting technology.

The fourth quarter ended with a backlog balance of $39.4 million, an increase of 27% year-over-year. With machine orders totaling $24 million, the record year-end backlog sets ExOne in a good position to pursue a 15 to 25 percent revenue growth rate for the full-year 2021, said Zemba. The company is pushing for binder jetting to grow. However, we won’t see immediate results, not at least in the coming quarters. ExOne is hoping to accelerate growth as customers move from single machines to multiplatform models, expecting to reflect the broader adoption of their 3D printing technology in the upcoming years 2022, 2023, and 2024.