Earnings call transcript Q2 2023

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Nikki Sacks

Greetings and welcome to Shapeways Second Quarter 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

Before we get started, I'd like to remind everyone that management will be making statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical facts should be deemed to be forward-looking statements.

All forward-looking statements, including, without limitation, statements regarding our business strategy, future financial and operating performance, projected financial results for the third quarter of 2023, expected growth, impact of recent acquisitions, new offerings and market opportunity are based upon current estimates and various assumptions. risks materially that implied from forward-looking material results cause by involve statements. differ to those statements and could uncertainties actual these These anticipated or reliance should these place you undue Accordingly, statements. not on

please on of the June including uncertainties our SEC For a for see quarterly the risks company's report description the company's XX, XX-Q associated and with business, Form the ended filings, quarter except in the Shapeways provided information statements. this required obligation, broadcast disclaims August The speaks forward-looking to conference to XXXX. only law, XXXX. today, XX, any revise update as by call or

issued of Also, non-GAAP market during versus a be can the to call, our open, course measure. schedule a reconciliation today's results is currently EBITDA, shapeways.com. which non-GAAP There's before financial on adjusted release found which available GAAP refer website, in showing we press our

On and today Officer; Kress, Alberto Chief Recchi, the Executive are Officer. Financial call Greg Chief

the to now to over Greg. I call turn Greg? like would And

Greg Kress

XXXX Shapeways financial Thanks Good growth for everyone. Recchi, quarter quarter providing and will initiatives our plan. outlook then afternoon, and a the to I strategic for and will our begin discuss joining discuss progress our update and quarter. Alberto key by second on second financial results business third us CFO, results

manufacturing software we our quarter, tools on and made and our line as delivered meaningful customers. second the to with services In as progress with particularly key in revenue our enterprise our regard expectations growth well initiatives,

to our expenses. towards contracts manage as continue high-margin enterprise work and multiyear of to software over term from from as as we recognize well with continue We contribution long profitable manufacturing revenue continue customers to our increased closely goal achieving growth realize the sales

to proprietary the of combines with an array advantage with platform Furthermore, purpose-built believe take on-demand of an high-quality, inflection manufacturing approaching positioned industries of software. Shapeways that point is solutions. We is market this flexible, across overall well manufacturing market opportunity adoption in we believe a digital the that

our ongoing execute with disciplined pleased prudent are as we'll operating remain and traction, We and our we plan.

services and XX% we deliver scale the a are In the and terms increase period of quarter pleased compared continued same to business, year. have in prior software of tools to to the in our revenue

year-to-date $X.X to on are million double the of software for We we software XXXX full from revenues have and revenues believe recognized track XXXX. year

the MFG, success result last This product in is realization year. continuous from including acquisition. have this completed since the is and expectations customer a of transaction, which scaling direct our we we of go-public of taken steps key our acquisition of innovation contributor growth the A investment

makes work MFG a is buyers each platform manufacturers As to part custom a and with find that reminder, of and it parts other. easy for custom

with a focused deploy for MFG had and manufacturers. to and part foundation those database. buyers auto our This through manufacturing strong medium-sized custom global on leverage a platform connecting small- establishes features to Shapeways software historically manufacturers capabilities and

and acquisition, revenue. second the of aimed include sources viewer Materials, their we which lifetime And increased quarter, each we several driving In and value at refreshed retention our brand. success manufacturers additional customers. MFG Transactions, as Orders, software for enhancements have year-to-date, X enhancements and provide as for transformative recent of of well released customer XD the

manufacturing manufacturers the pay for the both MFG to services and buyers invoicing buyers process buyers manufacturers invoices managing -- manufacturing within allowing streamlines tools Transactions ability of and platform. and request MFG to for platform's Orders MFG the the to communication, purchase such for order tracking. manage by creation quotes, send customer help and process, and their deepens to as process all ordering for further including

is for allows widely streamlining requested custom that for process, allowing the Materials communication a our XD by a new feature accuracy is of manufacturing MFG of parts, the a partner improving The quoting reinforcing comprehensive models and and role materials rates, XD sector. which viewer, in viewing manufacturers And provides service, MFG's discounted raw as at been users, range a speed the which for in has of greater process.

are MFG unlock start and of believe will Shapeways find of releases be be expand we for efficiencies the a their MFG their opportunities We comprehensive as the to manufacturing capabilities. just feature operational revenue that help globe we grow platform business, manufacturers. across manufacturers and will how invaluable These for choice grow believe platform software them the and new

the our enterprise of high-value customers. our seeing than on quarter, half continued In our approach, terms through a opportunities. enterprise we second that and traction are revenues go-to-market In manufacturing restructured focuses focused efforts more of force sales, including with sales were

we double-digit these our in affirms also coming in we we multimillion-dollar enterprise multiyear, contracts secured and several will in sales in target notable serving customers. years growth recognize realized the which that As in the our for quarters orders and proficiency industries quarter,

To for multiyear highlight the automotive X result than $X.X which to in annually revenues expect a couple. in One, transportation with and manufacturers we programs, for production X years. new million secured supplier leading X we Tier next more contracts

customer of our manufacturing annually services. securing during next X the the expanded we $X.X contracts, expect years. Shapeways approximately we enable innovation additive also in which medical contract X sector to an and million We by significant medical manufacturer, is base our through FDA-compliant generate revenues

the of use jointly globe. customize of which that In our and fit we enables applications printed comfort. with unique add-ons functionality, Consumer also technologies needs, is recognized being manufacturing proficiency and XXXX the across providing Adaptive XD to Adaptive the Microsoft conjunction outstanding the and ease XD of won recognized Microsoft Applications industry-wide. with Shapeways accessories for proud their to printing Configurator greater Product in and that -- The am their innovation additive TCT I awarded We category Shapeways were for Microsoft, we Configurator users innovation accessories. Award,

as managing sales. consolidation costs, of the Looking the U.S. see the on strategic higher-margin discussed gain operational improvement we quarters we we recently as software as remain benefit margin on our continuing manufacturing completed coming ramping as ahead, believe from our to traction. facilities which laser-focused realize including well is I -- plan, executing contribution the We will from in our

continue disciplined prudent our and we growth. profitable as remain towards will We journey

like I the customers, ongoing their and thank for our of investors our support. stakeholders our to entire team, Safeways would all

will now financial our Alberto more in detail. discuss results

Alberto Recchi

our XXXX provide recap I'll Thanks, an balance the performance, a Greg. third and second update for give of position guidance quarter provide on quarter. the sheet

revenue software million, guidance. not show offset In allow the resulted of QX, and $X.X sales, our was envisioning. marketplace second the by enterprise revenue in growth a quarter, line growth partially lower were and revenue with sales us that order unable we has into in year and saw been recognition quarter-over-quarter shipment prior did to from in delayed flat in We finalize strong which from pushed key We to self-service. QX. the were This the

However, planned currently order in that ship QX. to is

the Our XX% XXXX sequentially. gross margins in quarter and compared XX% second flat in second the of to quarter were

our anticipate time manufacturing gross of realizing solid from and over technologies our we deliver product change was benefits to optimization ramping higher-margin plan. primarily the pressures, continue well expansion as the margin as U.S. software mix. as recently inflationary cost more We We deployed from margins, and year-over-year see varied operations new due to continued contribution sales, consolidation a more the of the

were last million of reflect the to quarter the to was professional increased related year. EBITDA second a expenses quarter million year, $X.X in a $X.X in $X.X fees for the of loss compared and the XXXX the SG&A million million $X loss acquisitions. prior Second compared adjusted of quarter second payouts primarily to

Turning to our balance sheet.

million. our As marketable equivalents $XX.X securities and totaled XXXX, of cash June cash, XX,

further deployed $X.X we quarter, focused while on from the During proactively remain approximately We in burn million operating our liquidity. monitoring our improving activities. cash prudent and cash

meet On goal stock of was became June common stock to closing the New company's price requirement The the share the York minimum average for company's stock $X primary common price reverse X-for-X the XX, of of Exchange. reverse stock stock on Stock the corresponding effective. continued increase per and common the the market adjustment listing split split to

transfer believe and Global aligns to our the the we of New the stock transfer platform listing warrants growth also the Nasdaq with company the and York common cost-effective benefit from allows August from well Stock by of our On a X, Nasdaq, voluntary We Exchange. represented to offering. the Nasdaq Market innovative completed us

of ahead, anticipate revenues of XXXX, the $X remain we We believe $X.X million. focused opportunity, third and quarter manufacturing the offer an the areas anticipate greatest range to year million on in enterprise for including software we ramp-up that be and in solution to progresses. our the these Looking as areas those commercializing accelerated

call we will and remarks, open the questions. prepared now our Operator? completed for we've this, With

Operator

Greg [Operator from comes Instructions] the Palm with Capital first The line question Group. of Craig-Hallum

Greg Palm

quarter or Can I heard in still you wanted software missed double what I the was sounded It like, with start expecting to that right, contribution year. sales. -- I to this year-to-date. if

you a And in the margin of becoming part bigger can terms just gross over go So that? mix. just of that then

So have I starting up, over X that to quarters. but it's would X, flattish have kind of been like remained would margin thought gross tick

of kind positive of margin hit that visibility terms So mix starts line. favorable when in the gross to

Greg Kress

the time. for Appreciate taking question. the thanks Greg,

QX overall to with customer that we We're our product. in into as mostly as churn we to drive the in the acquisition seeing and growth associated and QX at So of going year. software it's incredible bookings the improvement saw model started started beginning software, to this rise to of back in a we lot we really the still expect progress, fueled double the by accelerate

$X,XXX. translated being into revenue per signing the is months. roughly XX-month would range $X,XXX so lifetime next around are bookings We're little value over say, on over those so contracts and I average, And XX that a contract,

you'll And of back so in, into what see the revenue we're bookings translate seeing the those come them as is in year. half

in bookings to taking ramp back place happen of going that those half really the the growth in because year. you're started Now see QX,

grow or you half going to of a to compounding see continues as get to quarter-over-quarter, revenue month-over-month, the So -- effect but year. more the quarter you're back

revenue really of start gross to proportion an will that so margins. our And on impact have

our as that the other QX. probably call, Livonia still month you costs had up And is City still so the manufacturing facilities, QX, from I the would U.S. Long duplicative so, also doing Island last consolidated we finishing our facility we remember in in of the we like are first thing facility. our X with say

costs And so there there. were still some additional in

transition, fully behind us now. And effects lingering transition that is that from there's so but some still

throughout to the seen And month-over-month move we we quarter, QX. And so margin improve. continue we've QX, that as to expect into gross

And into expect that to continue QX and QX. so we

Greg Palm

then Okay. sit burn, update in What's today? we Perfect. That's color. next, on terms months? the XX over like I look give know, XX us just maybe And that can an cash to of just where helpful you don't

Alberto Recchi

-- I'll take -- should I Maybe Greg. Sure. that,

supports also million guess, I execution sufficient So with, normalized second a liquidity of to the look, our balance, $XX keep strategic plan strong of in a and the close cash, we right, company to provides our ongoing with quarter cash closed supporting levels burn. cash which

we'll plan structure, managing specifically while We aligning the resources highest-opportunity keep time historically. to the our they revenue our drive areas at right? to and where have the cost a with enterprise, Now been software tightly growth, margins levels have take back to in same

significant deliver a end So towards the see this, if cash will we're to burn improvement on able you year. the of

in one acquisitions expenses and also Now for an last to for the we're will facility specifically move related QX Long Island structures so payment the and Livonia. quarter-over-quarter. the included to on also burn the some improvement to burn AMS onetime but spillover include related to earn-out AMS forecasting QX MFG related acquisition, of QX, payment our City a Linear Linear

Greg Palm

to restructuring of the linger of And the think are sort earn-out there sort unusuals? additional of expenses here? as of going just Or Linear just that about these should one last any kind QX are we other

Alberto Recchi

this should for item the unusual yes. that be quarter, Yes, last

savings we On the look, everywhere cost cost side, looking can. at we're

move Nasdaq, it's this For strategy. recent example, the to of part right,

by X%. our Specifically, forecast on exchange-related expenses reducing that, X% security has us to

spending From quarters. line fees be company quarter. of SG&A a should public perspective, previous in professional a other the being related to And should line will the -- as personnel the in and previous remain

Operator

Next from with question Needham the comes line & Co. Ricchiuti of Jim

Jim Ricchiuti

just elaborate you're terms quantify order size Maybe was that it in from just that QX QX. in anticipating Can of that pushed? on you

Alberto Recchi

-- it's Yes,

Greg Kress

-- calling for ahead, thanks yes, -- go you Thank Alberto.

Alberto Recchi

about with X in a $XXX,XXX. single-digit high closed we growth. it's of quarter front comment, have showing the just I I'll Yes. would mean the handle number

Jim Ricchiuti

$XXX,XXX about Got That's QX? what, so the so was in it. -- and revenue software or

Alberto Recchi

again, James. Say

I the lost Sorry, –

Jim Ricchiuti

what, to it software going sounds It was, that was Is QX. about $XXX,XXX? I like ask revenue in right? around the

Alberto Recchi

about Yes, that.

Jim Ricchiuti

saying remind us, anticipating if last this guys you you’re in year could still software? just you a do what doubling You’re And anticipating did – you’re year?

Alberto Recchi

at we year, Last closed million. $X.X Yes.

Jim Ricchiuti

Got it.

information the had on And Okay. then enterprise question other customers. on I is we the provided

existing enterprise. size from enterprise quarter I provide that from when that revenues about think customers? contribution -- of you metric? of mainly said is were Are you the Wondering in you any customers newer half if the seeing

Greg Kress

When also new in. are customer looking includes Yes. that at that acquisitions metric, that coming we’re

we’ve seen So actually really enterprise from really, sizable large orders customers. some

a that doing building transition of to they’re work As pipeline, we’ve orders. into been lot business development starting

really seeing we’re there. good So really, progress

Jim Ricchiuti

And some an basis that the something an over Or that annual of a some, some just those going ‘XX, on gradually annual on you up revenues contribution those kind next multiple some then to years. in is awards start seeing levels last that Greg, with scale put question, Do ‘XX? at they is and on you it of point of move annual basis? in where kind associated to

Greg Kress

next of QX, We we’ll a No, realize a but of the actually great question. it’s starting work the of QX in benefit that start year. in lot

realize benefit a think I probably the yes, So full could perspective, ‘XX. you in modelling from

Operator

further are at to for closing this There questions Kress the time. like floor I over would comments. Instructions] no back turn Greg [Operator to

Greg Kress

take I thank to look updates Thank we to you just for close next joining call. the quarter. everyone wanted you. to with as time We forward out providing today's future

Operator

Thank teleconference. concludes you. This today's

You for participation. you your Thank lines at this time. may disconnect your

Shapeways (SHPWQ) 14 Aug 232023 Q2 Earnings call transcript