FATH - Earnings call transcript Q4 2021 | Fathom Digital Manufacturing Corporation

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Operator

Hello and welcome everyone to the Fathom Digital Manufacturing conference call. This call is being recorded and a replay will be available later today. After the company’s presentation, there will be a Q&A session with instructions to follow at that time. I would now like to turn the call over to Michael Cimini, Fathom’s Director of Investor Relations. Michael, please go ahead.

Michael Cimini

good and Lauren you morning everyone. Thank Fathom’s conference call. to fourth quarter earnings XXXX year full and Welcome

Before I’d Fathom’s earnings to information press where we about presentation can our release today’s begin, you with are like SEC to our filings available other find company. on also website along fathommfg.com, that at links mention important and

to SEC, become operate the to taken We factors risks Securities presentation within only appendix are the of which way and statements are our in to X, and the forward-looking reconcile in today, in Exchange them. We with to future Slide Turning Act. X, obligation presentation. that these uncertainties measures company forward-looking the the Slide management’s risk such. estimates we contains note as understand read encourage forward-looking financial release filings which are our you of found contained presentation that the slide aware any in describe those of most comparable to we business. On disclaims the measures and examine represents as of encouraged this non-GAAP and only measure the be includes the business, statements and should meaning our The reconciliations, today’s performance and expectations the press you both to update and the manage statements GAAP to

XX, filed for reporting or completed will for XXXX. March XX, periods XX yet We three Fathom Full ended its process XXXX. these not also on statements has note be before December months the financial and

to With Chief today available Fathom’s and Officer. are Frost, Executive at Chief will it are reasonable Ryan Our this estimates and based Fathom’s over results hand the now on preliminary I Financial Ryan. Mark Officer, Martin, information us time. unaudited

Ryan Martin

traded in welcome and Fathom’s becoming to since company December. Michael, a call earnings everyone first conference publicly Thanks

turning providing Slide have begin to X. our to excited to on a Fathom. I full outlined the as before by be a I of We’re a brief will Mark provide agenda call will fourth for here overview update over the then an today and discuss also some remarks for will call guidance strong overview outline financial XXXX. year the Mark before will results we XXXX. provide capital I for and position on our closing up then questions. open provide quarter and business our full

accelerate Turning most for to product X, world. mission companies the is manufacturing in to the Slide Fathom’s driven innovation

secular application the multiple us. within We industrial, spans This are of yet largest tier we the another we in competition low full their are product-driven iterate profitability core Mark than poised XXX medical Fathom shortening product detail cycles allow in a as manufacturing history XX at to Fathom manufacturing leveraging had manufacturing, and approach, comprehensive companies This companies an with the of their and manufacturing our only numerous we experience in work We the later their XX that our to engineers, the X.X are provide partners. times supply innovative re-shoring customers has as more are customers production work advanced is transformation, customers pipeline chains. products supply world domestic an domestic customers technology to customer-facing of demands Fathom’s with accelerated Whether only extended a believe of and or life development differentiation broad an severe of of our market on is most and challenges, companies take to of hours. that trends that sectors, COVID to meet constraints to supply uniquely consumer, fragmented chains faster this chains are discuss with be have and manufacturing more adoption to Industry manufacturing, driven new breadth congestion industry the has technologies. of providing enable corporate advanced beyond we Fortune in the platform, the advantage time, do with practices, efficiently our highly within customers development companies aerospace, the the shortages, processes. accelerate material digitization able ongoing this macro competitive of proud cash the We we We will billion end-to-end it’s giving scale and have provide of to by their steps have and because call, become the weather of of gain of different to to on a labor in company our industries this additive and taking international mid manufacturing manufacturing, the today. attractive company. the adoption XX The manufacturing advantage as in COVID serving the than with their further additive re-think given we dedicated to and more of the and access automotive, tailwinds. to only resilient agile profile Combined these disruptions ability pandemic. of helps many with we as their and technologies also capitalize supply offerings but to R&D including unified our them expertise, financial and market the generation. over their efforts are top needs and are evolving Fathom increasing say by developed These in by uniquely volume With not and leader port as $XX capabilities teams. before. over solution higher with their years some as extension consumer by integrated on-demand faster At manufacturing chain same design as get enterprise-level digital products digital more on-demand traditional turnaround little both well facilities and support across ultimately XX XX solutions our positioned ensure product ever

track of innovation growth companies with business experience record decades record a also and board a high a a leadership for companies. stellar comprised of leaders combined of and advising group some of scaling team driving with We diverse along with world’s track of a of have the leading

to into volume high Slide illustrate Moving enterprise uniquely Fathom more them the how we on to We with CNC digital service product X, business, physical and sheet well. on molding their low is manufacturing, rapid and expertise will additive injection in a service initial transforming work as to our a production. is manufacturing. machining, file product, customers Fathom prototyping metal develop focused their precision our utilizing is and and many applications help deep margin mid fabrication,

see or you many coffee all that’s by it’s that product or of waking feet, name impacting up our with on car the your Although from, are you maybe board, Whether fridge and more. food were of the a shoes Fathom’s you you hundreds it, in market the the machine company. your you products put on we still the so you your directed interacting products the drive the in won’t not plane thousands if in with smartphone are or those morning got the you

one facilities. cases we the thousands, offer produce of across some mentioned This for anywhere than us from tens parts processes thousands earlier and different to to XX I domestic more allows our in of certain manufacturing in of As manufacturing customers. hundreds call, XX

which innovation low not over with volume complex we on way producing high same that customers and the other commoditized we’re and and can orders a a the at over in instead, mix However, manufacturing part we accelerate pace our ultimately no company their fashion; this in believe again we of do replicate, scale. focus helps

X, customers allows support outlined. focus outline on our handle customers full choose Fathom to Enterprise strategy. adaptive Fathom’s comprehensive and with to this to as a we speed, responsiveness, We our proprietary all due that flexible suite us capabilities, differentiated together quality, ability service tool problem to to interact product-driven our we turning them management, project faster Now iterate often the months pull the traditional of of shortening Slide technical their and I’ve from software with regarding solving, the for to cycles solve through serve development to helping quoting, some a manufacturing between additive the most Fathom, for down all At at days. us. manufacturing and key complex way production, inflection as companies, enablement acting to world’s design, challenges

are digital pioneer the a manufacturing plastic adopter We manufacturing. both of on-demand in space additive an and early and metal

apply three we outcome expertise utilize the best and technology-agnostic Importantly, of that customer. effective the to differentiated the the desired customer to solution experience approach process most a manufacturing provides during This for deliver over our our achieves our process. decades manufacturing

trying customers our customers in take their that evolving efficient the our opposed supplier a so manner technologies bring to the allows adopt by meet that their a in needs. can This market latest materials to chain digital them continue to leverage all We as to to sourcing consolidate hold through unified various more manufacturing supply in them and house.

digital to ability our into future with unique our trusted insights Our market an the knowledge customers. essentially manufacturing ETF for Fathom depth for as and allows to combined in a advisor act serve trends as

to Fortune partner most this world’s slide. bottom XXX on noted the of entrenched innovative some some which an the are become have companies, We of of

X, to quarter for during hundreds to companies, our an and We our enterprise acquisition key and to model broaden within for with customer customer Slide to effective fourth account of using On new of business. XX the software multiple very directly and we’re working both land-and-expand providing of customer Once accounts highly recurring individual contacts continue of leverage we among has within engagement our relationships. The business through cases with some of we we customers initial operations. highlight our relationship, is growth. them and Fathom, This number these base strategy in streams of over existing top for establish ongoing years, our execution attributed year sites been expand customer automated to the our wins of have each customer solution us the to developing acceleration our across deliver penetration costs some these existing seek increase profitable date. each contacts and allowing commercial partnered many revenue for

As on dollar this includes orders. you can multi-million slide, see several this

on of have this of medical, note accounts We largely others. are blue share Also customers sectors which our expanding high of well. success markets, in the with robotics, and growth vehicles, new adding the slide electric continue and corporate diversity semiconductors, chip end is as wallet across to

accelerating customers the We have them. on more agile for chain a local more market supply an for these focus time intense to maintaining and and

which not now do led that need advanced and sacrifice They capabilities us manufacturing for Turning their software our our quarter. to go-to-market to needs. for X, allows customer financial intent our robust highlights our to processes strategy into fourth combines deep to of unique and our capabilities. positive financial Fathom’s expertise our manufacturing to set provide match the translated have Slide we company. adapt broad has design This customers’ specific to results engagement technical we

$XX.X quarter new of total backlog our Our fourth by in business and future visibility to increased approximately million, into orders revenues. further expanding XX% our a year-over-year record increasing

Mark quarter more financials totaled will of $X.X review for $XX.X million organic reported XXX%, was the our in for revenue $XX.X our through acquisition-related million increase While million detail, was activity. of year-over-year and which a

to to our beyond XX.X%. industry. QX size reflects continued fundamentals as or profitable growth shipments the new of our with on and our million, of model revenue often performance unique depending two, Also orders Fathom’s contribute XXXX the in to order solid representing business record We growth strength QX deliver extend orders type. throughout expect QX, strong in quarter of increasing EBITDA to reinforces believe the adjusted in a reported we We and a for $XX.X margin

focused to greater continue build customers that to and traditional I continue solve manufacturing our enterprise we manufacturing we for Mark. will remain positive As technologies fast-growing over With on our challenges complex momentum, to industry. the market share call exist upon throughout among turn our additive that, achieving and large and now

Mark Frost

I everyone. remarks preliminary my Ryan, of you morning will on our results Slide XX. and unaudited good Thank begin

CNC revenue reported primarily of revenue due our XXX% machining. customers XXXX, For completed to an $XX.X increase acquisitions focused served, million the quarter, five we volume to an we quarter for excludes impact comprehensive organic in acquisitions. new the to on our increased fourth acquisitions, mainly executed which In the from fourth on services continued demand our of and basis, growth strategy. advantage XX.X% our the climbed of the On as strong in take revenue through

in During quarter, shipments activities the uptick precision an primarily based acquisitions we completed sheet for molding injection experienced on metal in and XXXX. from cross-selling

was product XX.X% follows. X.X% or line, up Additive reported at revenue XX.X% Injection XX% revenue. by X.Xx or up molding of to about total looking XX.X% Precision million XX% machining manufacturing total million it $X quarter increased million sheet Now of total was $XX.X our of total or to and of million of or as to revenue. $XX.X four $X.X million increased to XX% XXX% ancillary or was increased X.X% CNC technologies revenue. metal $X.X total to revenue. revenue,

XXXX. For fourth our which we approximately year increased revenue XX, $XXX.X year performance On the reported XXX% high X% January. basis, we million. to Slide the surpassed full organic and adjusted XXXX, for $XXX.X full approximately range On year our previously our of increased an full the revenue early guidance EBITDA million, provide for the end that stated issued quarter in to

$X.X adjusted the million quarter, the reported our million compared period. fourth EBITDA up was $XX.X to year prior in of For significantly

the XX in representing quarter XX.X%, points. EBITDA margin of Our percentage was year-over-year approximately improvement adjusted

fourth to strong demand was earlier. to This sales leverage in expenses our by acquisitions, standardization turn and included four partially the relatively from acquisitions we operations in from public million we to the offset related services, to higher quarter building quarter, IT from quick stemming but $XX.X primarily and the as the lower line. higher recent our benefited from ERP due CNC XXXX notable our SG&A increased margin also product our for infrastructure the expenses implementation. manufacturing During machining due company volume mentioned performance mix integrating fully including acquisitions XX%

XXXX. in these expect We further in investments areas

our of and customer platform related inflation continued managing costs. of material while help we our to rising nature base the impact the supply pass-through own agreements offset on-demand Additionally, actively higher through mitigate to

For million XXX the liquidity threefold resources. Slide capital full up year to for increased basis from XXXX. XXXX, reported we adjusted XX.X%, EBITDA highlight $XX.X On margin a points and XX, of our

transaction Stock available liquidity enhanced net we Exchange financial The mentioned of facility, million in our proceeds cash equivalents million. trading further approximately as with $XX and credit the our December XX. includes $XX.X New commenced this we we into under $XX the ended entered our York which flexibility undrawn As earlier, combination. new on $XX.X This effective from of million cash closing business revolving and commitments upon year million

overall on this both approximately used five-year, federal includes of average term potential to X% more of cost credit facility private end the revolver could new debt loan quarter ratio had our at the from rate $XXX We a leverage our Our the term refinance also net expect expensive for and each million to as the and changes we a was although debt company. loan, which LIBOR fluctuate based in rate actions. currently

XX, As approximately. our million of December debt net debt our cash $XXX and was million $XXX excluding total totaled gross

mentioned our we Our ability upon is predicated adjusted service earlier. debt strong to performance as EBITDA

X.Xx In December terms reported was net our of XX. of to leverage, adjusted debt EBITDA as

one partnership under the and issued economic on approximately Stock outstanding, rights. stock are New with There upon or also These and A classes per vote under C-corp common public are shares We shares York FATH. two ticker, in UPC listed structure. of common Exchange the XX.X umbrella conventional Class going million issued structure, share

million In but with March economic shares billion was addition, there Based Class approximately are B A share our no one the and Class shares, on Class rights. XX.X of $X.XX as vote B of X. Fathom’s combination market approximately cap common per

supports and create believe our term we Fathom’s forward, for positive long shareholders. value financial ability our generation financial with results flexibility cash combined Going to

our XXXX. the full XX, Slide provide for we Turning to current year forecast

positive We growth take our industry. continue benefit accelerate and of we tailwinds opportunities at Fathom’s to financial expect to to advantage believe performance will from future

precision metal. and in our is reports, as molding and continued from growth this metal low to as to them product companies Ryan Earlier additive outperform high we increasing to manufacturing call, on to go-to-market smart in well intend manufacturing industry corporate wallet digital overall digits new discussed help accounts. double anticipate Specifically, machining our technologies gains grow through and manufacturing customer with the technologies, to sheet strategy the we CNC success along and expanding plastic to share more existing According further and drive of expected look additive market ongoing innovation. base our acceleration like injection in as single the digits,

As to by that in acquisitions activities plan model, April past realize our we part recent cross-selling integrated most operations from from have capitalizing land-and-expand now fully synergies opportunities our our commercial M&A on of we XXXX. more incremental

While our an take we continue to ensure through grow we also past measures structure. will to acquisitions, maintain active cost efficient we

Evolve our strengthen technologies, Additionally, solution. new introducing intend additive including platform broad to we our further by

As have Thermoplastic or parts. discussed compromising cost, providing or a parts quality, traditional in advancement hours of advantage scalability a tools days production and the is the for additive technology, multi-month or we Electrophotographic this in over within molded throughput, injection disruptive past, time enabling STEP manufacturing Process, typical lead significant without the Selective

America commercial mentioned end absolute increase to quarter. technology backlog, launch momentum expect and approximately quarter, million. revenue and marketing year range of XX% our quarter to revenue order XX% basis growth XXXX normally Currently, midpoint build the a our does commercial and reported full We of between agreement This in approximately earlier. of ramp-up lowest customer Quarter to our expect one base with activities, million. throughout behaviors. XX% XX% on $XXX throughout reflecting would we the second Based of organic, tend exclusive current $XX.X to and dollar supporting $XXX under one steady million this of a be the course on the the to flow, sales at North outgrowth an or by we represent I year industry the on anticipate

XX.X%, an with growth. implied on Turning million expect with $XX margin range we of it EBITDA XXXX, in to $XX profitable focus to million our XX% to consistent and adjusted driving between

with the flat to performance also base expected build EBITDA expected but of quarter on $X.X first EBITDA year adjusted adjusted in million. is a during Our the

We a costs in percentage are incurred first company the of higher quarter. our be anticipating public to

X% Our focused health of revenue, continue business. our which to capex on is budget of of majority growth approximately the is invest expected to annual as in the we term long total initiatives

geopolitical COVID continue basis. forecasts a events, track annual to the global trends provide global pandemic, factors, will on and ongoing quarterly We our to industry including updates and

year guidance new consider to of in the our acquisitions potential XXXX. Finally, does the important is impact any for it note not

ongoing proven continue built excited our our We prospects organic growth track on our acquiring, passed several at identifying, did our Ryan? acquisitions, growth With accelerating manner. and to Fathom going have the in remain explore Since that, growing strategy not meet back acquisition inorganic initiatives. criteria our as opportunities opportunities we are in we will M&A. approach aimed disciplined a public, record an acquisition committed to strict turn that by to I which accretive new growth will we integrating and to Ryan. has call maintaining complement

Ryan Martin

monumental future thank Thank We new this to year you efforts Fathom XX was team company. XXXX provide Fathom’s upon while also some I listed Exchange Mark. I like of exciting record on results all financial would comments in Slide enhanced their a on for and embarking setting publicly our closing traded the New York the longstanding delivered stage on shares performance. will the as now. Stock history. for and entire a chapter

some impact the and to lives all backbone products that best date proud we to largest basis. workforce talented yet I is incredibly come their many confident and highly everything the Our on accomplishments truly companies am company. of our world a for daily of our of create in is better which to I’m most innovative the do, the of enables

fourth while of and of We significant services demand growth the our record $XX.X gains. quick volumes of share our quarter organic new by demonstrates manufacturing demand top our pleased of are growth increasing which revenue continued into line backlog We expanding for successfully million business. XX.X%, translated order in the strong turn

to from low for value-added mid broad and faster platform also prototyping global volume adjusted with We quarter market. to of ultimately for EBITDA to provides rapid so margin assurances time their timely iterate solutions they production technology-agnostic drew a reduce Fathom’s product-driven scalable, can to $XX.X totaling upon our generate on-demand in million XX.X%. solid quality companies capabilities the

more the XX manufacturing model ample in for XX provides maintaining including experience role technical the on and centers breadth comprehensive We system, leading differentiated fragmented scalability software, chain suite considerable integration this of by business of quick offerings active and strength, and our our while $XX more customers. customer over turn excellence, our financial of across different support remain of consolidator With focused as million. creating significant and our our our supply our Fathom agile and leveraging of our a than strengthening an processes Fathom’s liquidity expertise, responsive unified industry large, further highly a proven

and prepared beyond shareholders. questions. upon we’ll solid the We concludes remarks drive for XXXX in and performance and of in expect our further XXXX the to growth call our benefit now build open our for This

Operator

Greg, [Operator first of Palm from question Hallum Craig from instructions] the line ahead. comes Our go please Group. Greg Capital

Greg Palm

Yes, Morning of thanks. the everyone, gate. good results for and the congrats out quarter first your on

Ryan Martin

Greg. Thanks

Mark Frost

Greg. Thanks

Greg Palm

as got you brand, I’m customers? all company, a terms being a the viewing grow us means a some sense how seeing you’re months curious, so just in you capabilities? your Can maybe public of for new for you’ve what give couple on awareness as public to are

Ryan Martin

the to we’ve market more. the definitely been increase in able been we’ve out there awareness. Yes, Obviously to continue

commercial of buzz Fathom think around as things continue open to the Manufacturing we’re it work created from more I see a Digital doors. the real up and able we’ve to brand we side

of to incredible see awareness that’s As great efforts Greg. to market, continue opportunities. brand, space so of for around lot we side do the on build but more We to to momentum about, white serve incredibly fast-growing customers that where our there’s that, our and focusing today, continue we’re things, talked we’ve so really and on continue commercial grow, this a with is we an an job large, us a there’s

Greg Palm

wallet it’s of your but of spend the that sense accounts? a you what customer both, should Just within the trying are for seeing maybe are know to addition, maybe increase eyes. more in be driver growth get the or I you opportunities a in biggest with terms outlook, seeing existing more mix new to opportunities

Ryan Martin

success resources in continuing XXX Yes, the think land-and-expand other it’s that areas of we we’ve model and we’ve adding to add tremendous we’re past, us both. the these of commercial be where so and we other especially mix we’ve underserved continues growth finding on customers market can that the been they really--it and so new we’re corporate focused see perspective really past that working with to have in well, really the when the in so looking of amount challenges manufacturing for lot lot as We’ve from a Greg. customers future, hundreds new players in product some new opportunities that for the lot and a in a we a us Fortune in have development, the of opportunities, had solve a complex existing and and dollars go our spending companies. there’s a millions, lookalike cases customer opportunity lot They’re within that of billions same R&D names past, large for but of in of of to lot base, a that we’re on had deeper

Greg Palm

priorities last Then I trying just for Yes, out figure priorities okay great. one, XXXX. biggest to what guess are, the

of also importantly, both, well, sort combination the your certainly a so organic about as the it more you relates in multiples last in in of months talked potential, but public growth lot You’ve the what’s here being a markets? sense M&A, as M&A some growth, just us of of also what any and pipeline got as to lever you’ve what’s to couple sense valuation give change maybe and happened looks given can the like,

Ryan Martin

a lot in We M&A opportunities of continue side to things. see the of

about, do opportunities, potential a differentiated at for as providing can look For add broader a more and it experience, to to, it be as of are we We an does obviously, to and us, our do on new very add continuing about prices and capability integrating a be manufacturing that existing lot acquiring, very be We on talked we we to focused it’s continue geography, at growing proven the of does platform customer us, and they have there’s saying, cross-sell looking focused it record on it’s that so Fathom new we continue able customers think anticipate track we to expand and so do we acquisition a to that they capability, add acquisitions, opportunities. valuation. accretive a identifying, that.

Greg Palm

luck I’ll Thanks. it Okay, there. Best leave of forward. going

Ryan Martin

Thanks Greg.

Operator

line of ahead. the Jim please from comes question Needham. Ricchiuti Jim, from go next Our

Jim Ricchiuti

might Hi, of Good to in the you’re go the seeing one and I how to I most activity, end you’re morning. other Slide business thank growth what in the really semi, to market. medical, where by the wanted your terms relates to you. to deck, markets. back on of wonder slides in flavor in able most some the you Any saw some the sense if be question seeing QX that you played provide industrial as what of out? in X,

Ryan Martin

having our our being the on value as some companies lot in of mentioned, really the lot customer met that in space. done base We’ve proposition of fastest growing the end and of you of a Yes, think diversification focused a part is space, with of work, I markets. semiconductor

resonated always we’re industries. I out, figure figure things need manufacturing, that me tied them to Fathom can today to XX% than go be to in they’re XXX% the they those going in the responsive, out one of their and with that how really partners and is met can of with of quarter challenges fourth when figure executives their talking that’s One was out faster they some so their accelerate they help need faster to that them after more how so go like then to

re-shoring, incredibly well for we’re We that. which doing industry continue positioned the medical to more see

see have are those the that area highly demand healthcare Our that more it’s companies growth, and these to see chain areas that an more are capabilities a that, that supply and focus EV quite on areas, continue the can our XXXX the for continuing we say can continued of with I industry, and really well be whether up where to growth continues would our the base to semiconductor really industry, is Jim. innovative be going more be all that combination and well, high can on local, really are investment had--that customer of be looking to responsive, we’re to those partners that continue line in bit see on positioned so we’re growth

Jim Ricchiuti

say that activity, in acquisition you strongest these markets highlighted? organic the to separating was growth So just fair

Mark Frost

it but we’ve we that of Jim, our about. medical, shared contributions we’ve consistent in We’ll with commercial selling. been end these we’re Ryan’s efforts when what our and growing are technology, crisp markets, Yes before but seeing industrial highest talked numbers some as XX-K, results our is consistent file

Jim Ricchiuti

way, the the into additional relates if seeing it or so two on the for we’re a months trends by you activity as in Wondering over versus QX. know, quarter, color QX. that you or business Thanks, change any to little you’re provided

Ryan Martin

mentioned earlier however seeing our--you as Yes, we’re is a continued in from know, revenue commercial QX remarks, perspective quarter, typically pick-up. and is our perspective normally slowest Mark our

We build we momentum is momentum time they’re a they’re seasonality QX see a we in in typically to of budgets with, out Normally, last work so the the year, that there’s expect getting period, in lot we normally with companies how QX of continue throughout January as see new it. and rolling and the their to we on and to year. the build growth QX had then little bit of

Jim Ricchiuti

it. as question you provide you cross-selling the more from Last integrate across focus and platform. and you a clearly cross-selling these acquisitions referenced Got me is that’s

see playing that the that As of out over do ’XX? opportunity, you how course think you about

Ryan Martin

is Yes, biggest an organic perspective, opportunity. growth our probably from this this is--you know, Jim, we think

were examples able capabilities set our multiples orders in them doing We’ve them. to because Fathom we’re that have supply the the them CNC to business incredible within to and wallet to did, we incredibly lot Page on manufacturing able relationship capabilities. you and and they opportunity why on printing, deep growth fruit more able for for us acquisition amount across our good low metal and so customers, our that, we a in If the that their they’re we sheet doing of them with had we share we to we’re with large immediate complex of that’s we us and enterprise where X suppliers for Jim. relatively in these a and that’s challenges something almost of their hanging semiconductor an customers serve as of the look large capture is be is of space, they needs were at revenue broader the larger introduce platform spend, them growth really XD introduce the and this platform, and fabrication, have the broader saw manufacturing but machining customers got of were amount a through less--have of that hearing exist focus Fathom opportunity that an example they them manufacturing a that got as do do we needs, within and have chains, on, unify from is large suppliers, to in looking What we they be focused to less know that enterprise

Mark Frost

bit seeing That’s usually we growth to once is and little outsized and the have of forward. we talked and we I is whole but integration, on talked that, commercial that and us--now, drives little of exactly process the move in on fourth a had our acquisitions, the it about building as both in as a takes our when and our because bunch of it, Ryan allows team, while that any just and saw we we Yes, focusing first usually, about, Ryan acquisition quarter. see we them started commercial a on that all integrate step key ’XX a what integrated of we success, fully in opportunities Jim, start part

Jim Ricchiuti

and congrats Got it. the much, quarter. on very Thanks

Ryan Martin

Thanks Jim.

Mark Frost

Jim. Thanks

Operator

ask reminder, a any questions, on telephone star keypad. one press your followed by please As to

Dilts Stifel. comes Noelle, from next please Noelle ahead. question go from Our

Noelle Dilts

hoping bit thanks and question. you my I was taking about for that morning, expectations. margin little a chat could more good Hello, gross

head about into I bit think might and you. Thank in XXXX? how XXXX, there are kind you’re we progressing some margins gross year we that through of speak changes are see a some to could margins the so holding those as you factors back thinking the of

Ryan Martin

margins are accounting about X% right Noelle, a addressing XXXX. One question. ’XX. to hit did from so in sure gross some have we our start, Yes, some we going impact off I’ll think just that implications off will the good purchase ’XX, and by factors in actually was we address--we bat impacted are reverse improve the ’XX already

The other sites. strategy key element whole shifts is at to operational multiple our of moving

kaizen activities some a to quarter was Secondly, event take our so actually kaizen. organization XXXX some we will and we expectation is were global of sites, supply from Then we that it’s We all did we margin gross through impacts, margins. had later some chain most accounting ’XX we view this one XX%, week up what of saw we’ll where push in to actually move classical add further benefits third is further at you of the in purchasing we we although as impacts as around our able then had business the absorption sites. our the element gross so chain it, above now to our go decentralized, the into take was which is stood in first we is then have the in improve if ’XX one, of operational of see you supply the and your so our material grow pass at along did expectation up because years, our XX%, the

Noelle Dilts

you’re trends any Then seeing given you there’s Okay, about ’XX little change traction, for expectations speak in order your of general terms previously that bit to you just technologies could second, if and you’re helpful. communicated. the term manufacturing how and if what very each across on curious longer thinking growth a of

Mark Frost

technologies, faith growth you provide did bit we in overall. to have--and we’re that plan Ryan? growth. clearly additive little to should detail. platforms I strong injection pretty technology we is so see want but Yes, Ryan, outsized don’t our to forward, molding, don’t so expecting more know guiding I anything, as and we that individual can a basis, say level The lumpiness Noelle, an we continue by can we we’re on What of challenge so don’t talked is guide have you strong all if across add move we in technologies those

Ryan Martin

to thing would and so of large Mark that them, that what’s to really agnostic achieve, combination the our one customers it I additive Yes, drive that we’re of our best technologies we a looking of really the because is different differentiations all aggregate, generate, of at that only industry-leading sheet in we or leads outcome able said, to solution, that’s it’s all for enterprise margins is, because metal, and our key then it do the add approach, it’s the focused customer. understanding or believe solution whether what’s they’re we we is these technology to providing with and the reason Ultimately solution CNC that as these together ultimately other believe to a those. what pull ability machining our or look for and

Noelle Dilts

you. Okay, thank

Operator

question Jensen please Troy, from final Troy Our go comes Street Capital. ahead. Lake from

Troy Jensen

gentlemen, a on Ryan question about and these here, Hey congrats to you just where now thoughts any capacity can start quick are, some you investments the additional needing on for great talk Maybe results. right initiatives? of kick

Ryan Martin

good and to for that. you Troy, you, thank morning Yes,

we as or we well shifts, opportunities of second equipment that technologies. a grow. next as--you in domestic to generation to operational drive robust have running bit have well, either look so build through continue As that to partnerships shift, multiple Mark continue Many our we know, in capacity capacity talked have sites, and we we’re more supply have invest quite and operations manufacturing single well so as of advanced existing additive we business as chain to the the at shift we a as about, the international performance we’re a as continuing to as really of

outlined feel for the We’re to about make be our able on generation guidance numbers continue investments to going for good grow the and year. the execute and to next to position so in we continue really technology, to organically we that

Troy Jensen

Previously about customers given right, digital systems. placing us good. or how you just within have interact guys How conversion orders they’re thoughts? you how All sounds about with data your perfect,

Ryan Martin

we mentioned earlier, that, digital see QX. things component growth strong orders of side of The in as the Yes, growth we’ve digital a we so is on really obviously things. to of had piece continue

quote side they talked side customer-facing molding engineering, solution tool as that that things overall the and view our through the our the as use an the smart about know, a want providing that really other As so really only continue the platform we XX-second on molding that we the believe quoting it’s support also saw with is some want platform, to of we to our in solution With things, of have on enterprise we customers, growth work digital and a engineering cases see they enablement opportunities--you we well directly can to injection the interact we quarter to that tool, as with we side differentiated provide, digital drive that piece really we’ve that about, fourth the so XXXX, a on key to digital injection piece. we continuing orders build in cases, Troy. is hopefully plan into record momentum and and world’s

Troy Jensen

done. up nicely Keep work. good the Perfect,

Ryan Martin

Thanks Troy.

Mark Frost

Troy. Thanks

Operator

for joining. is Q&A the That today’s session this end thank and concludes of you call, so the today,

now may You your disconnect lines.

Fathom Digital Manufacturing Corporation - Ordinary Shares (FATH) 4 Mar 222021 Q4 Earnings call transcript