AMS Spring 2023

3D Printing Financials: voxeljet Q3 Earnings Results Miss on Revenue, Net Loss Widens

6K SmarTech

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Pioneering 3D printer manufacturer voxeljet (NASDAQ: VJET) reported its latest round of earnings last week, missing on revenue and earning expectations. The German company’s revenue was €5.7 million for the third quarter of 2022, a 16.1% increase from last year’s €4.9 million revenue, primarily driven by revenue contributions from its services segment. However, this top-line growth missed analysts’ forecasts by half a million dollars, falling short of expectations.

Revenues from the systems segment, which focuses on the development, production, and sale of 3D printers, increased 8.3% to €2.7 million for the third quarter ending September 30, 2022, from €2.5 million last year. During an earnings call following the release of the period’s report on November 17, executives said they were pleased that systems-related revenue had increased in the third quarter year over year, reflecting a higher installed base of voxeljet 3D printers in the market.

However, voxeljet said the gross profit margin from the sale of 3D printers decreased due to the “product mix.” But management insisted that these fluctuations from quarter to quarter “are nothing that makes us nervous.”

Focusing on larger markets

On the services side of the business, which focuses on printing on-demand parts for our customers, revenue increased 24.2% to €3 million for the third period from €2.4 million year-over-year. This was due significantly to higher revenue contributions from voxeljet’s German service center and the US subsidiary, reflecting an increased market demand in Europe and North America. Meanwhile, revenue contributions from the China subsidiary were almost flat. Overall, CEO Ingo Ederer described demand in this segment as “outstanding” and said the company was “basically at overcapacity” during the quarter’s three months.

Going into some detail about customer demand, Ederer indicated that one of the largest on-demand printing clients in the US is a supplier to a leading space exploration company. Other significant orders are from US yacht manufacturers, Germany’s art and architectural sectors, and electric vehicle manufacturers from the UK and the US. The company says it is encouraged by the wide range of applications for its technology and interest from different players across the board. In recent months, this has translated to “some of the best order inflow for our 3D printers ever.”

The VX1000 HSS from voxeljet is a high-performance 3D printer for processing polymers

The VX1000 HSS from voxeljet is a high-performance 3D printer for processing polymers. Image courtesy of Business Wire.

The printer manufacturer pointed out that with order inflow from 3D printers at an all-time high, order backlog is also at a new record, with a recorded €13.7 million at the end of September, representing sixteen 3D printers. This compares to a backlog of €3.9 million, representing seven 3D printers, at the end of December 2021. Ederer said the company is working hard to make the deliveries and installations on time to book revenue for these orders in 2022. But like many other companies, voxeljet continues to see some supplier delays, especially for electrical components. To fight against supply chain delays, the business is ordering products for its printers with exceptionally long lead times, well ahead of the client delivery.

Missing expectations

As far as profitability goes, voxeljet missed its goal of earnings per share for the period after reporting a slimmer-than-expected net loss. Net loss widened to €8.7 million, or €1.23 per share, from a loss of €0.8 million one year ago, or 12 cents per share, thanks to a higher finance expense due to the write-down of embedded derivative financial instruments relating to the European Investment Bank’s performance participation interest.

This situation has led voxeljet to continue raising a going concern risk. With ongoing losses, reduced cash flow, cash facilities, and financial obligations becoming due, management assumes that the company “will continue as a going concern,” the earnings release said. Unfortunately, voxeljet has posted continuous net losses during the nine months ended September 30, 2022, the full year 2021, 2020, and 2019 amounting to €11.3 million, €10.6 million, €15.5 million, and €14 million, respectively. Additionally, voxeljet had negative cash flows from operating activities during those same periods, mainly due to continuous net losses.

However, while executives assume voxeljet will continue as a going concern, they hope this status might change once it achieves its target revenue and successfully raises equity or debt funds.

Engineer showing a 3D printed part.

On demand 3D printing services for voxeljet customers. Image courtesy of voxeljet.

CFO Rudolf Franz informed investors that the company used the €26.5 million in proceeds from its German headquarters’ sale and leaseback transaction to repay financial liabilities. In addition to this “important milestone,” voxeljet added additional liquidity through a logistic direct offering and sale of more than 1.2 million ordinary shares in the form of ADSs at a purchase price of $3.44 (€3.60) per share. The gross proceeds of the offering completed in mid-October amounted to approximately $4.4 million (€4.6 million). Those capital increases improved the company’s liquidity as well as equity ratio significantly.

Finally, management reaffirmed its full-year 2022 revenue guidance for the fourth quarter of 2022, which is expected to be between €9 million and €12 million. At the same time, the full-year revenue is expected to be between €25 million and €30 million. Nonetheless, voxeljet said it revised some elements of its full-year guidance and ended up decreasing its projected R&D expenses due to delays in the procurement of materials for certain projects, as well as its projected capital expenditure to include only ongoing investments in its global subsidiaries.

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