Insights from Cantor Fitzgerald on AM’s Q1 2024 Landscape

RAPID

Share this Article

A recent survey by Cantor Fitzgerald sheds light on the persistent challenges within the additive manufacturing (AM) industry in the first quarter of 2024. Based on responses from 38 industry experts, the survey reveals a continued struggle in hardware and material sales, though service bureaus are seeing some positive shifts.

Cantor’s Q1 channel survey report shows that demand for new 3D printing systems is still weak, similar to the problems seen in the second half of 2023. Out of 29 hardware resellers who participated, 52% reported that sales were below their initial expectations. Only 17% could report sales above expectations, showing a slow start to the year. Similarly, the survey reveals that only one respondent reported material sales above expectations, down from seven in the previous quarter.

“While Q1 is traditionally a seasonally weak quarter, we believe this year started off slower than normal, but we remain hopeful of tighter cost controls, lower quarterly cash burns, and more optimism regarding a 2H recovery during the upcoming Q1 earnings reports,” states the survey.

Despite these challenges, there’s a silver lining: All resellers anticipate either flat or increased revenue growth for 2024, with 35% expecting growth exceeding 10%. Furthermore, service bureaus emerged as the quarter’s bright spot, with their performance more closely meeting expectations. Service bureaus saw a slight downtick in the first quarter of 2024 demand compared to the last period of 2023 based on the survey results but were relatively balanced with slightly more above plan responses versus below plan.

Out of 19 service bureau operators surveyed, 37% reported sales exceeding expectations, and another 37% achieved their goals. This sector’s relative success might be attributed to ongoing global supply chain disruptions, which have driven companies to explore new uses for AM technologies.

Interestingly, the survey forecasts a positive revenue growth trajectory for service bureaus in 2024, with nearly 47% expecting growth exceeding 10%. This optimistic outlook is notably more positive than the previous year’s survey, indicating potential for recovery and expansion in this segment.

Parts for the oil and gas industry 3D printed in Inconel 718

Parts for the oil and gas industry 3D printed in Inconel 718. Image courtesy of Protolabs.

Throughout the last decade, the AM industry has found ways to adapt and innovate when faced with challenges. Cantor Fitzgerald’s mixed Q1 survey results reflect a sector that is both navigating slow demand and positioning itself for potential growth in the second half of the year.

The focus is clearly on the second half of 2024 for recovery. Cantor notes that hardware suppliers may experience year-over-year declines in performance but is confident in the industry’s ability to rebound. The financial services firm also highlights that the hardware stocks are trading at historically low valuations (15-year lows). This presents an attractive opportunity, considering Cantor analysts argue that “these stocks will trade higher in the next 12 months.”

Looking into the specifics of the industry, manufacturing, aerospace, and healthcare have emerged as the top-performing sectors. Cantor says that manufacturing shows particularly robust activity due to ongoing supply chain challenges. These sectors are expected to continue driving demand for AM as companies aim to keep supply chains closer to home and prevent future disruptions.

Looking into the specifics of the industry, manufacturing, aerospace, and healthcare have emerged as the top-performing sectors, according to Cantor’s survey of service bureau operators. Manufacturing shows particularly robust activity due to ongoing supply chain challenges. Cantor’s findings suggest that these sectors will likely continue to fuel demand for AM as companies seek to keep supply chains closer to home and prevent future disruptions.

Comparing the first quarter of 2024 to the fourth quarter of 2023, demand from manufacturing and aerospace decreased slightly, but healthcare saw a significant rebound to levels observed in 2022 and early 2023. Conversely, automotive demand has declined quarter on quarter, and industrial machining demand has weakened. According to Cantor’s survey, Military demand has remained relatively unchanged over the past seven quarters.

Cantor anticipates that the first quarter of 2024 has been a mixed bag for the AM industry, reflecting ongoing challenges and emerging opportunities. As Q1 reports roll in, the results clearly do not show fantastic performance across the board, much like Cantor’s survey anticipated.

Materialise (Nasdaq: MTLS) navigated a challenging quarter marked by a revenue dip alongside key advances, especially in its medical segment. Meanwhile, Markforged (NYSE: MKFG) faced increased net losses and revenue decline, including legal expenses from patent disputes. Desktop Metal (NYSE: DM) focused on operational efficiency, showcasing improved adjusted gross margins amid a revenue decline. In contrast, Protolabs (NYSE: PRLB) and Xometry (Nasdaq: XMTR), two companies that cater beyond 3D printing, reported resilience and robust growth. Protolabs exhibited a mild revenue boost despite unchanged 3D printing revenue, while Xometry showed a significant increase in revenue and gross margin, driven by an expanding marketplace and technological progress.

The Cantor survey also provides forecasts for the industry’s future. Resellers and service bureaus anticipate significant growth in material revenues for 2024. Similarly, there’s a positive outlook for system revenue growth as concerns about recession and rising interest rates diminish throughout the year.

Looking ahead, the AM industry is ready for a substantial improvement in revenue growth, with estimates suggesting high-single to mid-teens year-over-year growth in 2024. This projection marks a significant improvement from the relatively flat performance in 2023. Cantor believes that as companies continue to innovate, adapt to market dynamics, and leverage strategic adjustments, the AM industry’s resilience is expected to be a key driver to its growth and success in the future.

Please note that the information provided in this analysis is based on industry surveys and publicly available data. It is intended for informational purposes only and should not be construed as financial advice or a recommendation to buy or sell stocks or investments. Readers are encouraged to conduct research or consult a financial advisor before making investment decisions.

Share this Article


Recent News

3D Printing Financials: Velo3D Sees Better Q1 2024 After Difficult Last Quarter

Aerospace OEM Invests $9.1M in Michigan for Metal 3D Printing and More



Categories

3D Design

3D Printed Art

3D Printed Food

3D Printed Guns


You May Also Like

Wisconsin’s Evology Adds Digital Sheet Forming to Service Roster

Evology, a service bureau based in Wisconsin and specializing in serving strategic sectors like aerospace and defense, has added digital sheet forming (DSF) to its repertoire of manufacturing capabilities. Evology...

Boring Company Alum Score $9M for Advanced Composites Manufacturing

Layup Parts, a Huntington Beach, CA-based startup specializing in on-demand manufacturing of parts made from composites, has received $9 million in its latest financing round. Founders Fund, the VC firm...

Featured

Industrial Giant Ingersoll Rand Leads $19M Round Backing Inkbit’s AI-Driven 3D Printing

Inkbit, the Massachusetts-based original equipment manufacturer (OEM) of multi-material, AI-integrated 3D printers, has closed a $19 million financing round. Ingersoll Rand, a US giant in the industrial equipment sector, led...

3YOURMIND & Nigerian Oilfield Services Firm RusselSmith Team Up on 3D Printed Part Inventory

3YOURMIND, the German and U.S. software services provider specializing in digital inventory platforms for additive manufacturing (AM), has partnered with Nigerian oilfield services firm RusselSmith to digitize spare part files...