On-demand 3D printing service provider Fathom (NYSE: FATH) delivered positive results in the first full quarter as a public company following its listing on the New York Stock Exchange on December 27, 2021. Revenue for the first quarter of 2022 totaled $40.5 million for a year-over-year increase of 32.8%, of which $2.3 million was organic and $7.7 million from acquisitions. In line with management’s expectations, the year-over-year growth was driven by increased customers served primarily through revenue from new acquisitions.
Fathom CEO Ryan Martin told investors during an earnings call on May 16, 2022, that the ongoing demand for the company’s comprehensive manufacturing services combined with the secular tailwinds in the industry led to Q1 orders volume of $43.8 million, up 17% from the prior-year period. In addition, Martin pointed out that the success in expanding Fathom’s market share with blue-chip customers and adding new corporate accounts contributed to revenue growth of 33% in the quarter.
Since Fathom supports several advanced manufacturing technologies, its product line breakdown showed that revenue from additive manufacturing services was down 8.6% to $4.1 million, or 10.2% of total revenue for the quarter. Instead, injection molding increased 16.8% of total revenue, and CNC Machining was up 32.9% of total revenue, reflecting primarily the benefit of five acquisitions, four of which were focused on CNC machining and one centered on injection molding. What’s more, its precision sheet metal fabrication and other ancillary technologies also increased 36.2% and 3.9% of total revenue, respectively. Considering that Fathom ended the quarter with available liquidity of $40 million, company management estimates they can complete other tuck-in acquisitions during the remaining quarters of the year.
To strengthen its additive capabilities, Chief Financial Officer (CFO) Mark Frost said they remain on track to commercially deploy the new Selective Thermoplastic Electrophotographic Process (STEP) technology by Evolve Additive Solutions in mid-2022. Last October, the two companies entered into a first-of-its-kind commercialization partnership whereby Fathom would become the first provider of Evolve’s transformative STEP technology to produce plastic parts.
Frost highlighted that this advancement in AM is another example of Fathom leading the transition from prototyping into additive production as this technology dramatically reduces lead times for parts compared to traditional injection-molded tools and parts. Getting thermoplastic parts with the same quality as injection molded parts in weeks instead of months is a real game-changer for countless applications, so there is a lot of interest in this product. According to Martin, Fathom will begin to see the benefits of STEP in the second half of this year from a revenue standpoint. But the big uptick will be in 2023 as Fathom starts to ramp some of the customers from using AM in early development all the way through production.
Other results from this quarter include a net income of $17.8 million, which shows great promise, compared to the net loss of $0.5 million in the first quarter of 2021. Total orders also increased year over year by roughly 17% to $43.8 million as Fathom keeps focused on accelerating customer engagement.
In addition, Martin said that they secured a two-year, $10 million agreement with a Fortune 50 Global healthcare company continuing to expand mid-volume production of an existing program with this customer during the first quarter. The Hartland-based digital manufacturing provider also entered into a new multimillion-dollar agreement in the quarter with a global semiconductor company to provide low-volume sheet metal production. Based on the strong orders volume, Fathom not only increased revenue in the first quarter but also expanded its backlog of new business.
“We are an industry pioneer with a history of profitability and cash generation and extended this tradition in Q1 as we continue to benefit from the strong demand for our broad capabilities in the fast-growing digital manufacturing market. During the first quarter, which is typically our lowest quarter of the year, our order volumes increased 17% and contributed to revenue growth of approximately 33%,” highlighted Martin.
Stemming from these results, Fathom reiterated its financial guidance for the full year 2022. In fact, management restated it expects revenue to range between $182 million and $192 million, representing year-over-year growth of approximately 20% to 26%. Fathom also expects adjusted EBITDA to range between $40 million and $45 million, representing a year-over-year increase of roughly between 16% and 31% and an implied adjusted EBITDA margin of 22% through 23.4%. For the second quarter, the company anticipates revenue growth of up to 25% and organic growth of roughly 10% or greater.
Subscribe to Our Email Newsletter
Stay up-to-date on all the latest news from the 3D printing industry and receive information and offers from third party vendors.
You May Also Like
Ricoh Partners with Materialise to Enhance 3D Printing in Hospitals
Ricoh (TYO: 7752) announced a partnership with Materialise (Nasdaq: MTLS) at the Radiological Society of North America (RSNA) 2023 event. This collaboration aims to make 3D printing more accessible and...
3D Printing Webinar and Event Roundup: November 26, 2023
Things are getting busy again in terms of 3D printing webinars and events! This week is the RSNA annual meeting, the World Manufacturing Forum, and more. HP is holding an...
3D Printing Financials: Stratasys Navigates Through Economic Uncertainty, Steady Profits and Revenue
Stratasys (Nasdaq: SSYS) unveiled its financial results for the third quarter of 2023, revealing a mixed scenario amid a backdrop of significant merger and acquisition (M&A) activities with Nano Dimension...
3D Printing News Briefs, November 18, 2023: Depowdering, Jewelry Patterns, & More
We’re kicking off 3D Printing News Briefs with a little business today, as Horizon Microtechnologies invested in a micro AM platform from Boston Micro Fabrication, and Rivelin Robotics announced a...
Upload your 3D Models and get them printed quickly and efficiently.