3D Printing Financials: Prodways Focuses on Growth After Disruption in Q2 2024

Prodways (EPA: PWG) has disclosed its second-quarter 2024 earnings. The report shows a slight decline in overall revenue but reveals a rebound in printer deliveries and increased 3D material sales within its systems division, driven by demand in the dental sector. Both the software division, with its new client acquisitions, and the products division, despite challenges in the audiology segment, maintained stable performance. With the transition period now behind it, Prodways says it’s focused on achieving revenue growth and improving profitability in the second half of the year.

A Rendering of a Prodways P4500 Sintering machine.

Revenue for the second quarter of 2024 was €15 million, down 2.6% from €15.4 million in the same quarter last year. According to the Paris-based company, this decline is driven by the reclassification of software revenue due to changes in accounting standards, such as adopting IFRS 15 (International Financial Reporting Standard 15) revenue recognition rules, implemented in the second half of 2023. Additionally, the company adjusted its operations, such as discontinuing its small printers for the high-end jewelry sector (marketed under the Solidscape brand) due to weak sales and operating losses. This strategic move will let the company focus on its other, more profitable, industrial applications.

In its systems division, the company earned €7.3 million in revenue, a 4.29% increase year over year. June 2024 saw a rebound in printer deliveries, with several MovingLight LD models installed for orthodontic and dental applications, which are known to be material-intensive. Additionally, the division received orders for a more advanced MovingLight model from an industrial client.

Despite these positive developments, the pace of printer deliveries remains below the group’s target, with more efforts needed to restore the commercial pipeline in the second half of 2024. This pipeline has been gradually filling since the end of 2023, and Prodways wants to expand it more to prepare for growth in 2025.

Securing €8 million in revenue, Prodways’ products division experienced mixed results, with small order volumes declining but a boost in activity with major accounts in Germany for recurring series. Audiology revenues fell by a few hundred thousand euros due to reduced production of hearing protection devices since March. This drop was related to recent commercial and technical organizational changes that have now been completed. Since June 2024, the new structure has shown promise, says Prodways, with a rebound in orders expected to increase deliveries in the second half of the year.

As for the software division, it continues to do well, thanks to what Prodways is declaring as a “well-structured commercial strategy” and the acquisition of numerous new clients, which has allowed the company to offset the revenue smoothing effect due to the transition to SaaS (Software as a Service) sales, where software is provided on a subscription basis.

3D printed models for orthodontic clear aligners. Image courtesy of Prodways.

Despite the overall drop in revenue, it remains in line with Prodways’s targets for 2024. What’s more, the company plans to publish its half-year results on September 18, 2024, which are anticipated to show an improvement year-over-year. Up until now, Prodways reports that revenues for the first half of the year are €30.4 million, with stability in its systems division and a slight decline in the products sector.

The transition period in the first half of 2024 has been challenging for Prodways, but the company is optimistic about the future. Looking ahead, Prodways says it remains committed to several strategic measures announced at the beginning of 2024 to boost its commercial dynamics and profitability. These measures include a focus on high-value industrial printers, discontinuation of small jewelry printers, sale of the Cristal dental lab, professionalization of sales and marketing teams, and reduction in its workforce. Although the second quarter was disrupted by these changes, consistent with the company’s expectations, Prodways still hopes to grow its revenue by 1% to 5% this year and improve its current EBITDA (earnings before interest, taxes, depreciation, and amortization) margin.