Earnings call transcript Q1 2023

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Operator

Greetings, and welcome to the Desktop Metals First Quarter 2023 Financial Results Call. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Mr. Jay Gentzkow, Vice President of Investor Relations. may you and you, proceed, sir. Thank

Jay Gentzkow

with Presentations Cole, for live operator. joining are link under today's call accompanying you, this is or Founder XX financial CEO and results, today's & also same Good note, and the of without Metal. the are to of afternoon, for Investor The you at and months prior on call content our Jason website. site. property reproduced Metal; Desktop slides webcast the transcribed thank our press and of desktop of call. our available Relations This slides of section being Fulop, will replay Desktop following a Please webcast everyone, It and Ric Thank CFO metal. be is presentation consent. The be With referred call. release available today for me cannot call this Events

disclaimer our a metals views materially Before we forward-looking and actual XX, desktop and forward-looking reflect begin, only Harbor will statements call presentation. on risks statements. vary I'll X to results XXXX, These include and based refer Safe the Today's may number of of on of May today, as you uncertainties. expectations Slide

company's Form about filed the forward-looking more For on the addition filings information this or obligation revise business results, the desktop Factors afternoon to with assume metals Risk no and the XX-Q may financial to section impact other the statements. SEC. risks update that to please We in refer

to a in performance basis. not our the accordance to substitute calculated and following for on Non-GAAP presentation with supplement session, non-GAAP intended Q&A may this GAAP. during refer but we Additionally, measures measures are results

reconciliation the contains the information and of well release GAAP a as to be results quantitative non-GAAP to discussed today as measures. financial other Our financial

turn over Ric With pleasure and Metal. my Fulop, that, of Desktop to Founder call it's the to CEO

Ric Fulop

first quarter for XXXX excited welcome, this you, afternoon. to financial everyone. and host call I'm Jay, results our you Thank

going I'll our conclude about customers our brief the to plans update up increasing customer and two, we're today's customer also traction in customer financial subsegment to using highlights talk I'll repeat to I'll one, begin for a We're representing wrap of X three, new our initiatives technologies results detail call financials. it I'll from unique growing Q&A. our On reduction the the numbers; provide of larger Binderjak. before capabilities And areas: in on color and from profitability. with momentum agenda, base; with open base first quarter our further our then we to reach and and turn Jason up over cost on an then outlook seeing

result for the reduction the but drive the XXXX last on started quarter continuation Revenue decline was representing of the we $XX.X first million, back of X.X% means, the experiencing X Overall, to execution a reflecting I'm year. first seasonally it's on proud team's year. quarter efforts with of highlights. headwinds the in top of XXXX, half recessionary a of our a begin Slide cost lightest profitability to the I'll financial over quarter over

XXXX recessionary some saw depth we While the and was environment. sleep to contemplated from you'll recall And internal known-related out of of we the a inside last still QX, of our revenue offered revenue range. wider breadth accommodate range this forecasted quarter, to guidance

for starting we were cost growth with and efforts of from near-term announced variety Non-GAAP in will XXXX we our an see in to in our the the XXXX, impacts continue of expanding the reaffirming basis those of set that margins additional second opportunities QX. horizon XX% XXXX. of and a quarter reductions, show revenue begin the gross to quarter XX benefits quarter first first these customer We first middle expect points we of base, In from push the guidance. most quarter, of the validates

more meaningfully for the company. absorption coming a cost cost of expecting reduction top As improve in balance these fixed the significant actions XXXX, margin gross priority the quarters, expansion through we're

of $XX.X reductions We first from We reduced in million XXXX. adjusted in which a losses second the EBITDA $XX.X first come. a tranche to XXXX year-over-year, improvement million was of $XX.X quarter of quarter million the cost with to

continued we conditions, to we our see primarily year reductions combine of expect on plan adjusted as a have to We reaffirming trend announced XXXX through XXXX this growth a adjusted improvements by as with achieve reaching adjusted balance EBITDA top of EBITDA to February. our also significant commitments expansion for to drive in cost to expense EBITDA in the sequential detailed positive the line year-end. plan guidance these regardless breakeven We're macro the savings way

to Moving business highlights. on some

savings by As a an bring actions we and us structure additional adjusted total million our and in these by end achieve expense detailed our the I'll million; we efforts the breakeven significantly the strong year. on expanded to mid-February on plan touch prioritize to very slide. following annualized $XX progress position cost increasing a on the reduction of to puts QX to to our by reduce our $XXX cost EBITDA call, path date profitability

made desktop tier of believe Consumer to metal. largest discussed binder-jet of announced, we supply in multibillion-dollar this agreement into the relationships. the the over for opportunity that the companies products As various world. electronics and very projects and across we figures we XX a have time, signed consumer recall, progress with expand machines. in board next this master do We will electronic continue our grow segment segment stores project months our we the and we over These are consumer well, you Electronics X market may Over last a were will going revenue one with and quarter, next in

We Sweet, hub solutions X.X. generative also launched software added end-to-end manufacturing Live delivers AI for that an

health, all intuitive printing and process LifeSuite year, equipment. solutions applications with digital expensive software of all to live production tecan software their is for pane added software the most ultimately simulation purchase processes desktop powered Building market, offers the new need us that manage success in applications. believe continue premium standard LifeSuite allowing seamlessly accessories a their printers, turnkey location. unmatched mass and on is of eliminates powerful users the to lead the this hardware XD differentiated offer center allows our most of and XD come added is it new to systems functionality success preparation, build a XX one manufacturing software, users we with LifeSuite new that our in extend our AMT manufacturing desktop customers our in programs manufacturing to metal, software, cloud-based use and printing package with to for will by and

additions A materials. stainless shop portfolio. XXX platform. we And finally, We're continue or material for drive one of copper, CXX industry's system proud development largest from system across of include our titanium quarter this forward the to the in X TipVXfor own X our to AM few production and production libraries

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Super key in customers our repeat Our and customer solutions demonstrating drivers trends. success demand fleet are with validate

production market fit. clear solutions First, our a mass product have

more high to coming mass are systems is sales. consumable production delivering consistently to And value our flywheel customers model. needs. our ROI utilization to customers' superfleet is and solutions eventually leading back in operating This are increasing and higher-margin the Second, third, as our buy

customers in a these jet both diversity solutions. exciting highlighted company really of is photopolymer what's Binder all sizes, across these small and super And this We've slide. fleet on large, to the number of customers valued

have metal Over the XX desktop X or up ago printed for Ryerson Steel, today binder to that of only high-growth system used with super these polymer producer and free backed vehicle in being parts our jetting Technologies, a has who really some scaled One metal technology. every example XX using customers machines our systems is or side now almost years the BMW, of on has last who started new have passenger fleet light by parts operations. devices polymer XX force X months, from medical scaled a

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maintaining concept on following was of on with customers. growing highlighted deepening measure quarter slide new the deployments customers including customers, repeat expanded system an Building this important traction quarter at our XXXX super through applications consumables of QX scale we slide, customers of calendar systems All for orders represents their contribution the sales customers the major of in we're both number growth and another important initial been solutions. lightest of success usage of quarter Repeat this have in and revenue. of repeat of QX traditionally the systems. overall the in fleets, part first is successful in seeing high-margin customer year, revenue progress our consistent made Metal on our high-value repeat from an what with beyond the Desktop Even

consumer driven demand, you We renewed recently as super a ceramic slide. range on next the in result Now, sectors, talk of some aerospace, increased about fleets of customer offerings automotive, mission-critical announced let including the to on me energy, in by incredible future the electronics, material a among these of design segment. focus wide applications others. of of best in carbides a and hard that flexibility ceramics, In jetting permits technology manufacturing manufacturers and our the my world to the with metals, are fabricate challenging and simplifies we're traditional in properties. opinion, production gives Binder this

focus automotive high-volume While and is our systems we're consumer applications electronics, to our able same like enabling markets production energy. in to markets that like are core high-value mass niche nuclear binder proud contribute jet very

innings competitors $X this $XX the past alone, early new sold nuclear. binder in is of jet in for Its segment. between million equipment of we've This But the growing and Metal Desktop use leading and a million and year companies. is other labs market years BWXT, ahead Corporation where segment has UltraSafe and any Nuclear deep like national of and partnerships defense major for players Jet, with Binder

layers nuclear the where suffer and jetting the dangers of triISO the applications because binder the in of is enabling and fuel, includes printing One reprocessing. weapons nuclear refractory silicon does it's ceramic not XD carbide, fully proliferation of ceramic uranium it microencapsulated from for limit

of changer. game small day forms risk to our without propulsion. nuclear has This across to proliferation of submarines, new potential one be and the the the major process can reactors, applications a modular enabling marine board, new is and of forms allies exported new the This revolutionize ships

for year, nuclear DARPA a and Artemis up chemical the rockets propulsion thermal For rockets NASA January Xx greater the enabling of example, NASA or has than program. in for to efficiency power new program ground this announced that

with those mine. Apollo to aren't back that our For familiar the it's go to program Artemis,

of most high-volume advanced to program and a XD-printed markets and like new nuclear to driven is IRA to our new differentiated as U.S. electronics trends. all legislation, important Jet propulsion. other way new use change U.K., marine these automotive of future with really consumer ranging fuel, the see forms solution Alliance, known multitude a by nuclear firing ships It's and The The applications, in climate space stuff ACAS solve exciting Binder Australia, problems. Artemis the from revival the takes across

sequentially to as this expand in X the goods a some order company to annualized our the by for of consecutive towards and operational the reduce year. profile In discussed successfully quarters, cost more to first we've first of initiatives, expense been savings. as profile our Shifting reduction breakeven XXXX, of call the and spend tranche past XXXX. achieving year but I towards of decline priority execution saw the few Slide this OpEx margin side weighed and in end into sold expense operating in The in significantly quarters highlight reach we've expenses to adjusted we our is structure our for quarter as team's completing EBITDA cost cost X; top the our has XXXX, The we want ongoing executed progress top-notch, navigate of both made. we $XX reduction million

In we an cost additional million. to February $XX $XXX million of announced in reductions savings for annual bringing total XXXX, our spot XXXX, expected

end facility have the closures second by the We workforce lion's the quarter. of share completed the of and

second much a reductions first We versus meaningful impact more have of absorption to tranche cost on our expect the tranche. cost last fixed year's

mid-quarter last quarter, see only back the but a COGS. us reduction in we quarter the a year-end. the saw the of impact announcement, on Given the adjusted minimal in our of reduce to we'll achieve the year strong very in first extent to cost efforts larger half in position puts EBITDA facilities these second of much results as start timing our commitment combination breakeven burden the by XXXX into in of The

macro existing reaching the also of expect you with efficient business to yield Furthermore, basis these consistent our cash operating balance our stronger, to more goal the on organization trend a of cash conditions, resilient lowering Regardless actions a term. see a sheet. on long breakeven a burn should continued more quarterly create ultimate flow effective model of the for streamlined the and and

over And Jason? with our it Jason turn CFO, that, I'll Call. to

Jason Cole

was XXXX. referring Beginning our of a Slide the basis. financial will first Ric. performance quarter highlights on first the Please $XX.X you million data for to in metrics be is quarter financial down of GAAP several $XX.X we year-over-year Reconciliation non-GAAP Consolidated XX, see million, of to on note, Thanks, for will included first the XXXX. X.X% appendix. of filed from XXXX the quarter revenue in

expect gross subscription, structure Leading for this ongoing solutions. expected a efforts growth our recessionary to jetting and solutions basis continued of revenue points range drivers of weakness by ongoing XX.X% through first quarter of mix. Gross with offset yield were binder digital we product the XXXX. a than casting little improved XX margins Non-GAAP as QX, within headwinds by and primarily even expansion margin versus reduction metal came and expectations. margins the XXXX our were in in Improving lower XXXX, a consumables, cost but gross the first services softer driven Revenue beyond. and quarter in was business for gross year, margin well as priority is cost in

of non-GAAP the $XX.X reductions sequentially from have expenses the including consecutive first by of million operating XXXX. to expenses of following the reduced million million Turning sequential a $X were first fourth quarter total quarter quarter for we the OpEx This of XXXX, slide; operating non-GAAP represents in $XX.X XXXX. as quarter of by fourth

as our a results, structure cost reduction meaningfully XXX% XX%, throughout of $XX XXXX non-GAAP in quarter continued which year-over-year and to XXXX executed of XXXX. on the expenses a in savings We've the of back trend initiative second improvement quarter cost as of was in of First operating tranche percentage million impacts revenue of especially versus a improving XXXX is see the expense expect half XXXX. first

in quarter EBITDA Turning our for the meaningful to XXXX. XXXX, savings combine quarter Adjusted incremental contributions, with million XXXX we million EBITDA to first the as EBITDA in by was of million, XXXX. back the in half with slide; more compared the expectations $XX.X as higher next cost announced sequential improvements quarter expect $XX.X throughout first improving line February the adjusted $XX especially in negative of was to we of in revenue

our EBITDA on-track regardless achieve are to fulfill before We macro of to adjusted commitment year-end, right environment. breakeven the

exited the XXXX in the million first as of cash, first expense to quarter monetize over capital XXXX. also the cash ending in from result from the even expected, million persist. we our with based investments. order we if able We next in further higher of million to improvements drive quarter, and quarters expected came coming sequential ended Cash We in will the cash QX X headwinds efforts in true. to flow internal to million quarter last forecast, progress with still We're quarter than $XX.X messaging $XX.X our our at quarter inventory, burn ongoing We short-term to over working in XXXX remain in quarter and a see of production should solid provide $XXX.X when equivalents impact better expect up in recessionary you and as $XX.X free in we and the We cash were significant position intend inventory of along to expect of sales facilities. the the cash closing softer XXXX. cash reduction on reduce balance our first several improvements, operating than position, a

our outlook XXXX Slide financial on moving finally, to XX. And

our still was line the revenue were with of a expected, quarter first in expectations. While than results little range softer

macro balance the of remains give addition, challenges solutions XXXX, confidence customer of even and our across strong portfolio In ongoing if persist. for us environment demand trends engagement

million of to we reaffirming are expectations $XXX XXXX. revenue $XXX million for As a result, our

$XX $XX negative range to EBITDA adjusted continue for to negative We expect million of the million in also XXXX.

EBITDA half with in adjusted quarter we and our second adjusted First the outstrip half. first in of the XXXX anticipate was expectations, line significantly to EBITDA

significant are end to As we improvements order the of profile committed, to we've environment. continued the achieve regardless year, before in driving consistently of the our adjusted EBITDA expense breakeven macro

turn back And to remarks. his with the call I'll that, Ric for closing

Ric Fulop

Thank you, business on I'm proud remain XXXX. getting future the driving of manufacturing laser savings the the of our on drive continued XX. to XXXX company cost focused $XX We Jason. deliver priorities the strategic Additive mass is in focused I'll to We're margin achieve this commitments. structure of execution the wrap these in will up and for cost million meet Slide on EBITDA end profitable to and improvements production. in very our confident before of million team's profitability next the $XX I'm and in expansion drive XXXX, order year. adjusted driving

metal be in leadership adoption in remains AM extremely the strengthen we across engagement a market customer to long to create operational order stage well customers' for Customer very market, for and portfolio our repeat relentless this manufacturing a in will opportunity, desktop to improvements space business, our continue competitive our important the we drive streamline growing order growth leveraging production And of the board term. extend missions. the added organization driving next strong we're mass our we're in validating and across more to with on secular to finally, resilient capitalize closing, positioned mature advantages the the in delivering X.X company cohorts as and scale. In in

for that, Operator? With some call questions. the up open let's

Operator

very you sir. Thank much,

Greg a from conducting Palm Capital. first [Operator be comes question Craig-Hallum Instructions] session. question-and-answer now will from We The

Greg Palm

just I start question. it if sure X-part revenue the And of or general QX? if And pretty wanted deferred. a reiterated revenue more or booked outlook quantify still you've of I'm the range. been you out it's a can then not already from slipped guess, sort guide comment, one, kind much how number wide you of with in kind QX it's to of pushed a I

terms puts to we're, end looking that of So takes I put demand sort Any that of I in at? or months more mid relative couple know, low sort versus the guess of a now some that of and indicators range you're don't the guidance you year of out. into when

Ric Fulop

million change the in things guidance feel of slipped QX. would lot doing about for it's we like think development the and for I into that slightly about to mean, the to the say at I are excited plan the great year. Greg. we second our digits probably $X and more you, in that than still mid-single all. million didn't a things all I And needed have $X half Thank bullish number We our year we're to of

execute. easiest continue And so the it to had say we to was to work I that pace date. at full quarter not we've would

got by of very sharpen that equipment see digested some when got you've and position type that environment, move demand your I to our in They in really the or use decide this feel space. we delay competitively but think than are pencil signs and bureaus going customers position a good growth be we most with you've or until decisions. sometimes as and that print our partners we maybe parts for we're I service of year, of they like forward, year-end, companies like still the to, we better their

Greg Palm

color. wanted electronics. move appreciate that along I that consumer Okay, to

a provided -- bit maybe And guess more a kind detail questions I little seeing. a quarter you're of few that. this related what to bit You little on

depending company can months. a then hand that a actually figures major pretty lines maybe And on wide the what of X QX. POs I in consumer just for was think systems? expecting was use. electronics That's revenue time have But range you you next a over deployment You're and do customer you numbers of XX there in confirm

You confirm that?

Ric Fulop

Yes.

a be about But them. say, top in able that in work in use printing XD to of revenue good you and with, -- and range. And really commitments that say the And they we be next love materials. that feel it. to number I number to good in news that we programs. able to were I'd we the won't able over And equipment the deliver companies months enables laid launch a you'll be that XX in and the And So out XD you terms is have them about contractual products of variety to space the would of to better that that pick segment companies printed. is with up show they play tell stores, clearly, more up on X

your not having chips footprint reduce can remelt carbon by You make to to planks.

have -- for many thinner launched open space either when device have you more up to new advantages able in thing You that a or benefits especially that's battery going being over of segment, do more terms form space, new more exciting additive many can using factors in as products in that to be a time.

we not we do. only thing So it's the --

on are We a strong things very in of lot automotive.

things aerospace. We in have going on

that we parts and jet between months, have a nuclear got in we expect them where We with to million We've we're the about as we're segment. about the in and And excited world to us, only is grow exciting yes, where for talked XX doing company to engines in and million what the that we $XX $X also last now. customers really opportunity business continue in make this segment What a successful. our we're so did that. does

Greg Palm

it. just you and within coming? for R&D [ph]? is end-use you And is Or space if what's level in to But sense Got have of the of months, next you that over you're, have expecting what PO are they're guess, -- revenue I purposes confirm, saying hand? electronics this space clarification, probably some again, XX for for is that this consumer This the that not parts.

Ric Fulop

in We be expect to products.

Greg Palm

Okay.

production? for -- So

Ric Fulop

and parts. that we're We've some production space this in the Business area been doing for is time, work production. in it's in just working all

Greg Palm

And you that achieve you you significantly one, to Or assume Okay. that? breakeven? there just of commentary here, need I does level used with regardless guess comfortable if I achieve breakeven. on a additional macro guess that pull we last worse that And feel that revenue lots of of to of that certain the is the mean levers I there's think can sort EBITDA gets macro term environment. to

Jason Cole

The we being that Yes. element guided I'd of say can believe the deployed. It's target. and little we have -- end all at are pulled across that do time reaffirming we disposal They range, we But land. range across the breakeven the achieve of said deliver levers were guidance our we with across we're quarter. to year. take a believe we last range, that by consistent every

Operator

from comes Josh Stanley. question Morgan from next The [ph]

Unidentified Analyst

mentions want And the were few I elsewhere pressures. on in of the the maybe to lot in bookings, Ric, So I dig there revenue growth. you I factory weakness, mind. if seeing of backlog you're automation little guess, or either a more pretty a floor healthy think recessionary kind bit wouldn't a of space,

people terms the you so can you're broader for, think weakness the flush far. or could the Any celebrating where out demand. than on pretty least seeing Because think KPIs? you're watching that macro, provide in color more I healthy space, I at supply what specifically chain the markets, industrial XQ talking has been improvement kind about other of in of probably anything end maybe geographically that

Ric Fulop

the mean market I that's adopt happened, going. tightens But a this that healthy I has customers we that has demonstrated see where company the expensive. have people makes And to the buy product yesterday the of more a when been a got spend repeat that, on see one They of that a to technology, think way bit healthy they really parts CapEx I make service say decisions little the costs has decision out lot that especially are on demand. they it before wow, pulling get did ROI product do and that million is a especially hold when figured demand. making our should process, technology, a equipment think considerations people make may quickly. move Yes. and of CapEx, for using pretty fantastic to we our credit you've $X see being demand, relatively financing and that We of quarter so to new continue they customers that than I one we especially more with technology. our was a just

X it that then stop talk think sort to raising manifests that sales sales of when see cycle but the to, last behavior was of or we would started order lowering I companies of you to is the on over just rates. -- as have say, saw of for see and and landing shrinking of and a itself year that in that when when you of varying kind increase, then type some start goes around our other it for cycle is QX I and the stretching quarter-by-quarter about also see I way rates recession you people you It our or hard but the expect So, it's the last products. what may been related rates comes in the go somewhat they potential quarters, eventually cycle

-- do our backdrop, see for we demand projects. a that ton besides So healthy we of and products

number an we and increase of So and things. projects bookings have other in

It's company. that, when saw in QX, that people a is on in going good -- I trigger we I have pull we've the psychology the activity got get I on but of the things -- that don't when things think some more of very amount of what the more of about feel

maybe additional has And on or color thoughts more Jason it.

Jason Cole

it. things and into quickly start of were QX in with we'll a Yes, working QX QX we number relatively just moved

Unidentified Analyst

the of pushouts, commonality sort reoptimized a just no bit geography? there's little more end But you like market or it saw Okay. where was geographic

Ric Fulop

change geographic I would Asia, time. that's over Asia. and been We It's had saw that U.S. wish -- stronger mix Europe, a something quarter. similar. in the we'll we think a we and say I business presence But similar in don't our in build between I past relatively

Unidentified Analyst

think of we on opportunity, on just a what And that base exciting have said Or incremental Because reflation here? you levels maybe the even the customers, these the some big about can't margins have get cost up think the then, in costs. the ambitions, growth how opportunities, focal yet, kind those of on how square up really or That's Got depending referenced conversations, some define that want but including to side. redeploy Obviously, just big. you focus X-figure that? start about point the name could just even at you it. you the revenue on good to differently, you following right of want times. big now, numbers several obviously, there, I should you with helpful. guys to How cost pretty

tagless the shifts Just wondering there? when

Jason Cole

Yes.

maybe unpack I'll So I bit. think talk costs a little about

we've calls. that for growth think think that is But of a were go to the year. middle think as -- wasn't of we way prior on this of you materialized at some sort I I spoken back level about about scaled the last we

revenues we've in that with and reduce will -- that so that really fixed will less the expect of you later lot effort What that production the XQ, And is in sites. closing taken to a set margin We're on volatile cost the XQ. volatility you across cost be find than midst we the there's are being see in that comes $XX less base. Those side as -- we'll from be savings X below saw is volatile of really the year drops the million enacted revenue year. now last and to XQ of

also We have buildup of a inventory.

inventory opportunities to accelerate of of element side that where I that on to as think expect the Those got help cost play kind going demand is it's we be from to a that spaces this. come a in inventory going of us inventory big be some these monetizing benefit the expected well. is drawdown, that. and and into We've big to

Unidentified Analyst

Appreciate the color.

Operator

comes Credit [Operator Instructions] from The you. next Ellis [ph] Thank Ashley question from Suisse.

Unidentified Analyst

kind on demand. and KPIs [ph] Shannon I to with add If Josh's for on of I'm question today. could just

pretty Your portfolio is broad.

the $X million the and systems smaller You've then you've desktop Einstein got got system. production

other? markets, any the end is market that's than or doing your within So better maybe there worse

Ric Fulop

a dental there. I restore large have efforts casting been components. printed we from on technology us, part benefiting think The strong best-in-class to for been has mean I technology very and do to has Absolutely. and consolidation that market

I bureaus growth announcing is before connect or And the strong this higher buy that our service support of that any make say have I that about technology, for in we getting have defense difficulty twice and we that a then right parts while. new that the outpacing on may credit can We a think very have probably would they partners a segment company. SMEs our them them they areas or say, the it now. fastest-growing with would it business in It's

-- can that arrive company tooling. the that cut cast And shape with similar something all cast space. tests die then the our tooling. -- things at would And in to use and let's body a do is be die do a on say, white And to giga trend -- cut one vehicle starting for you have, try that are technology automotive, to to you we casting Tesla in of the things OEMs to they that need work before the to we the used systems our that like before

market. it to -- of time companies type process, that other replicate going opportunities open over the in So as that is

lots So the weaker. I say, growth. yield of that can significant project say development long-term But areas stronger that that, I versus are would various would ranks

the extremely little on SMEs hurting other a the the between is think bit; stuff and I is in fact strong middle. are

Unidentified Analyst

then pointing we how think should revenue, And to XH. linearity about you're really strong for a

much And being at think fleet the interesting. locked given should very if year? we think coming And is of look flattish. Super it the in you've which revenue So then that's XQ data, us How maybe we for for is me. do you

Ric Fulop

Yes. when then materials to you have terms revenue of about because at much next I a to saw I a our of systems, model, group of they better tend effect locked install the of compounding benefit think And razor-razor margins. systems. consume is just the you be have year, gross fleet a they is next mean, I architecture in. think one how in it the blade mean

Jason Cole

dot. us. I'll has going leave for I the part individual get historically XQ I not We're other into stronger been say, And question, quarters, the of would that a guiding think, seasonally quarter but to the

portends I up that will, -- quarter. last in it expect and now an be XQ it history if should we quarter, should think

Operator

a is Palm question from Craig-Hallum follow-up Capital. Greg next The from question

Greg Palm

just a electronics. ask And a I of But consumer guess question Yes. I more on to sort all broad mind, why maybe of wanted is this of broadly speaking. in keep specifically jet say, laser-centric? [ph] seeing sudden in irrelative make And interest related segment? Jet, guess to -- this Binder let's are increased more to binder does sense I from why you

Ric Fulop

Okay.

people So structure in consumer their that right? machining. $X,XXX laser centering kilo cost. XXX But is not the even close over what use segment, Parts a to space, binder in cost cost is at jetting in electronics the the

all stiffness be make bill of to of machined to and get the you where and into re-melted of then actually or will they they're new they machine. and that that and have housing downside material, they'll And you would a take would and make resistance a And would performance to block parts. have oil have more that the be So chips machining component. is dichotomy harder the higher expensive to higher use scratch more allows -- be -- machine longer better, higher that hardness and a

parts you So actually jetting part. is into and all waste so is from no making the materials form do the can what the you those virtually there binder can -- process; no goes -- with

a So you energy reno-greenhouse of as lower gas result much lower have much footprint footprint. a

do setups. And pata-metellurgy that machine stiffness battery formed space for cost other you prohibitive mechanical can you up better geometries more would regions up will use a -- can which difficult open it's to use with in by tint or or or parts open to because be and few materials allows have volume higher [ph], and very properties, that you

higher chain. make to you're And to and can that reasons also product, have the to lot more the out our volume less same potentially you binder allows of want of any something Also, closer Tulloch where move you supply make printing, the you trying to closer apart. region. on a your to jet you you the This flexible supply as chain more changes make of of a dramatically your some parts. -- launch in are you need get with have [ph] more called delay of kind flexibility. order flexibility you'd those And So to but equipment

XX% geometry material properties. lower many on [indiscernible] the and footprint almost side cost and better reduction better at are reasons, there So,

So many chips a new metal you the recycle materials the the refine have can't remove reasons. block, In to oxygen. titanium, you'd into like some even to

lot a jetting there's this So binder advantages with [ph]. of to doing

Greg Palm

attention? increased that's of shifting Is where one one your there question Yes. a lot off that's rattled interest I sort driving of what's is my and a now? interesting, or whole top I single guess the more a that's mean, you sort of advantages. of

Ric Fulop

it are customers varies things, doing Different and customer. different per

Greg Palm

thanks. Okay,

Operator

Suisse. The next [ph] for question is also from Ashley Ellis Credit

Unidentified Analyst

wanted the range from to slides. the confirm, you consumer number a revenue just assume in does I referenced of range electronics that the XXXX contribution

Ric Fulop

I product mean selling into consumer been we electronics space. the have

last year. revenue have We

you're of to is next the like over a year. that's of subsegments months, going have year, next I'm trying the very and -- We we'll this large, looks to have -- It kind one QX. were your but revenue some of be paint stronger and revenue question XX picture -- in significantly Is we when about do clarify you a Yes, sequentially. referring than quarter-to-quarter. want to QX just have definitely, you you're to to sequential earlier what quarter about QX talking that

Operator

like Thank Thank Ric time, are sir. Fulop now no remarks. this At there back turn further you. call to questions. the I'd closing to for you,

Ric Fulop

and family want if again if you'd joining everybody reach Burlington forward any And quarter. to questions come to metal speaking Wonderful. for our desktop or entire next like always, very out here to Please team I XXXX. hesitate to with thank everyone don't Cosette. in really as call to I there's want again afternoon. look at us much. their begin the additional thank Thank visit and for this to I focus you passion

Jason Cole

you. Thank

Operator

for much, sir. that conclude you does Ladies Thank and teleconference. Thank very gentlemen, you us. joining much today's very

may now lines. disconnect You your

Desktop Metal (DM) 10 May 232023 Q1 Earnings call transcript