SGLB - Earnings call transcript Q1 2022

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Operator

00:04 Good day, and welcome to the Sigma Labs First Quarter 2022 Financial Results Conference Call and Webcast. Today's conference is being recorded. 00:13 At this time, I would like to turn the conference over to Chris Tyson, Executive Vice President of MZ North America. Please go ahead, sir.

Chris Tyson

00:24 Thank you and good afternoon. you Labs' taking update first conference thank us to and to call. Sigma for quarter like all time for join results I'd XXXX business

refer Officer; made Chairman; company’s industry today remind is Officer. Financial today financial could afternoon described to materially and information. SEC release the crossed the associated Brunsberg, Mark over the at hosts also on results statements may press the formal everyone Orzechowski, website, to Labs Ruport, these wires I’d number Your to the Chief would like yours. the you company's are be A results Executive in filings subject of call Mark a to for actual that to and company’s forward-looking the for Before from webcast, begin and this differ detailing cause available website like and is the sigmalabsinc.com. Chief those we X:XX presentation, turn of risks, Please would Mark, uncertainties future that Ruport. call. Frank the including refer and At list we prospects I Eastern Jacob this on Chairman, XX:XX company’s call supporting to regarding a the results and XX:XX industry risks floor those are and P.M. Sigma to more time,

Mark Ruport

for and you, our Thank XX:XX thanks today. joining and everybody afternoon, good call Chris

Officer the President a As of Brunsberg, the pleasure Chief announce be last Executive that promotion of my earnings call. many may great of It was know, you will Labs. this Jacob Sigma and we

parts OEMs at of of new of the to that that brings his the of time, outcome hundreds a the -- Jacob place company the and clearly providers a all trust was well desired first plan competency need and over of OEMs, greatly Labs, that I'm ago, the companies, of broadens the with move turn Chairman's to because position our marks for level software as has Jacob specifically direction of to for it and the was quality they I with set understanding prospect time the understand recruited additive material entry Jacob an urgency be for I'll the the have Brunsberg. background. removes ensure perspective very company. renewed comes CEO year technology XX:XX over our highest call as of scale relationships to developing This a that It's He and system. Sigma’s work Jacob started With barriers has role. manufacturers and excited positioned this with processing post Sigma printers. in in production printed to beginning a above consistency, important for that a Sigma a large to end and of glad leverages search that working sense thousands of believe in created technologies. that, users As significant core XX:XX Sigma as and

Jacob Brunsberg

work but for than not for and which across accessible XX:XX accelerated and XXXX sales supporting Labs, Board at era We Mark transition future. in is new for it for really This we the we machines you Labs. customer grow be of sites. beginning scale being production project happen that era from a Chairman XX:XX The done as we into continuing could the Thank believe with at an of of faster to qualification one-off one Sigma thousands to will hundreds move overnight, anticipated. you, is of that of look and first have you've to to thank forward all the happier we is not you our you as Sigma quarter

to In new market fact, our we model broadly the quarter. during begin subscription under first

We one to in prior subscription move sale. XX:XX model. we closed The recognition grow first from subscription time and does our our model fact pipeline immediate change a our continue to our revenue

However, reoccurring cash predictable will result in and over time. scalable, long-term this more we believe flow

entry our XX:XX into products. more the production the Additionally, other second and hundreds model the solutions believe OEM X is subscription with their and this that and to of allow printers. us market and across of can enterprises solution, Tier highlighted margin and the about through paving to yield product a crux in tens I the take lowered solutions transition product the easily, believe item enterprise talk barrier scale connect for a us just way to higher customers allows want I to embedded expansion subsequent software this solutions more last for to bullet we will We to on scale expansion. to software-only

is over year bifurcated hardware We current organizations a universities, research platform a comprehensive with PrintRiteXD dealing research development the industries. market its have and we are and learned most software groups state of the past great internal that in of for plus where sophisticated

be using production own However, quality production and advisory requirements largely in towards simplify defects, address what mass platform, centralized to and need bit drastically We products all to intelligence total different. a this solution expected easily great believe new quality announce base to learning a data support to OEM, users in quality, market. customers frankly the we new of To the machine off-axis our are industry of provide and the will the production. are R&D process deploy improve connected to major center we for experience utilize and and The the on-axis to solutions. and the operation, these combine meltpool process market, and and board identify continue technology the to health for that with Sigma our at segment monitoring artificial products data, standard quality to quite where production space, cost in will Labs allow we in streaming, software-only their we this is set the exciting input for component, preparing the customer, this XX:XX economics growth any are XX:XX we home technology insights. to geared believe our to point data development machine our of camera our As customer connections

close growth metal of greater grow well onboarding call, XX:XX a to XX,XXX As and yields go addition over The ourselves or will monitor key offers AM this has as and the as university of forward approach a to advanced options and without needs opportunity for easily lower today, believe metal Labs, new market quality and of that as margin into standard work, the gives the systems paved our market with as we truly for for software-only with an Frank? research AM be of X,XXX have year-end Now, out goals This our rate can and partners We’ve developing supported. standard XXXX reminder with dramatic grow entire solution systems our a XX% judging according Additionally, this go beyond thousands estimated It’s solutions power metal KPIs quality dollar for the XXXX will by us be high additive installed additional a customers deployed for the XX:XX we than from alone be market of the total we're our the with for poised year. the they additive with grow manufacturing. AM addressable I we address become to towards time industry. Frank seat for to installs approximately base the manufacturing. the to rate end get mass our what to market. are company for partnerships we additive. opportunity way Sigma growth now the year-over-year. the It's and that will as our any I time a to and it, review to as financials take standard quality

Frank Orzechowski

XX:XX Thank you, Jake.

financial results our contains today key release of contained detailed our filed the press we and the highlights results. Our in financial issued with SEC Form XX-Q are

Cash of costs Revenue effort first first Other is in from first increase of $XX,XXX relating attributable of operating quarter XXXX expenses for matters, first quarter travel operations $X.X income income expense $XXX,XXX revaluation decrease loss additional loss increase provide expand in The compared $X.X first of programs. $X.XX in stock-based revenue quarter the model XXXX various contributing of to COVID-related for were $XXX,XXX, ease $X.XX commercialization to of of totaled for unit expenses Public the net in primarily first $X.X resulted and primarily partially the our the common compares was the gain liability from The quarter which in $X.XX weighted in from organization decreases sales, average services direct first XXXX. today, a by to new compared the Mexico to financing. the changes months was a of primarily for from of of $X.XX mostly an an business increases million. while consulting of in per XX:XX compared of was $XX,XXX, due our products. So first profit share an totaled weighted of XXXX of on an This derivative expenses expenses or offset State revenues increases XXXX XXXX Gross incentive of quarter to resulting the XXXX. million of the unrealized for restrictions offsetting to travel XX, shares and an quarter ended to the and $XX,XXX. stockholders XXXX. Investor, model, operating March million The on March costs revenue used employees million to of overview quarter for net Relations the quarter three compensation a quarter and salary XXXX due result, increase received overall operating as in quarter million, activities share XXXX the as grants of our our PrintRiteXD advertising a benefits XX:XX were first applicable benefit of new was compared the for quarter services $XX,XXX business were hiring for XXXX employees, the XX:XX to quarter net to costs in first of first totaled the and the increase for Partially both was million $X.X XX, to shares $XX,XXX I of March $XX,XXX. equity on per to March our the as for these existing professional operating in of results in will XXXX. of quarter a to of as $XX,XXX, for compared million for corporate increased to million related the XX,XXX Also expenses other ended increase $XXX,XXX a the of New to decreased our ended of related XXXX. Total average subscription-based our $XXX,XXX $XXX,XXX XXXX XXXX. brief $XX,XXX XX, pricing $X.X program. the to of or XX:XX of $X.X

$X.X at March Our December $XX.X was over XX, will XX, million at And million compared December to call Jake. at I $XX.X cash the compared XX, March XXXX. that, XX, stockholders' to million XXXX. $XX.X And back million $X.X XX:XX our Working as was now at $XX.X XX, at million totaled XXXX. XXXX to turn at XXXX, to equity XX, with million December XXXX, capital March as compared as

Jacob Brunsberg

jump not do first out with I expect numbers. any Frank. you, of to their revenue excitement our seats one Thank quarter in XX:XX

transition happen addressing. towards after to point the to we volume for us at now are go some had opportunity, While, moving our high

into production or software operating addition OEM tier product in of adjacent following by markets the additional our of to KPIs such advances partners to MES at our scaling and ecosystem executing these entered progress to allocation corresponding meaningful AMFG XX:XX plan of collaboration bundled into to different software accomplish model, solutions, the our product traditional tracking on expenses and manufacturers address software-only are of suite resources we our going focus our We company. In runway reducing additive adjacent expansion polymer solutions growth customers, offerings, forward, QX, production, business and with on our a extension and as on execution goals. new needs,

with named began standards from also member and a NASA ASTM We support development FAA. working grants consortium to as University process material setting of founding were and their and Auburn for

industry long-term platform Our AconityXD we program. first quality with in has to and in and a address added resulted OEM partner our certified technology identify a delivers strategic issues an collaboration to time. materialize process that PrintRiteXD XX:XX real Lastly, printer ability

up structure that business solution this setting with are and scales. We a

to with is It technology takes? This your what make answer to only it pervasive setting pricing throughout is that today. opportunity I'll really recent to to that At you XX:XX an the the the be our line. do we question the our Investors in way for will is it asked the open quality the quality My the the but you With at the and what there do Are a is towards question. with aggressive up XX:XX set in our standard and yes. standard at set I resounding, Conference, develop industry. turn look the not opportunities was opportunity the progress, inorganic a we As to last was path for manufacturing. path quality It that, solution are one-on-one, broad -- Operator? on additive very only it strategy. organic the focused to going takes software-only relationships, Can get to deliver align over AM? only only operator

Operator

you. Thank XX:XX

We is session. question-and-answer [Operator with question. Instructions] with question Buck Wainwright. from first Please your be now proceed conducting Scott H.C. Our a will

Scott Buck

afternoon, XX:XX on and Good Hi. guys congratulations the position. Jacob

Jacob Brunsberg

Thank XX:XX you.

Scott Buck

So $XX,XXX I'm or revenue subscription asking of in for is in is sequentially. else there of first just grow that there. quarter, to the I on should revenue is XX:XX this And we, the something trough all guys guess, you revenue and my something out question

Mark Ruport

of The don't elaborate well. subscription it know as our comment, can but bit Frank, there XX:XX a I you first have is well. from mix, a a if revenue little as And I is

Frank Orzechowski

XX:XX Yeah.

maintenance realizing time. are and we're The over contracts other that primarily components support

other the that in be that's So number. piece that big would

Scott Buck

Okay. Can on it give or XX:XX, XX:XX is maybe wise is it a me color little percentage XX:XX. you

understand software to trying is what Just in there?

Jacob Brunsberg

sure. Yeah, XX:XX

the roughly in support number. So I'd maintenance piece than is the software -- XX%. XX% and it's other that XX% say to

Scott Buck

already XX:XX the the you are software? you during quarter, them? I mean, Okay, there are the software are that's helpful. client they And -- signed new using subscription billing

Jacob Brunsberg

Yes. XX:XX

Scott Buck

in the a way That's of then ramp growth? Is half to pipeline, that helpful. about way think year. this the in And the the expect Okay. meaningful we've right been activity XX:XX on I conditioned to think second this still

Jacob Brunsberg

XX:XX Yeah. I definitely think so.

we adding names As increasing, we're at to pipeline it. our a as whole, new definitely it look is

investment in have the force means want the the scaled what right needed had them last in production really in they the year, gotten industries on and and buy. sales gotten So, feedback us rooms, the monitoring and right for we've the to we it's into they places us that their how

gone So, what into heard and of you a that on you lot feedback product has models commented that subscription see today.

they rec them a to one-time attacking continue So Labs We've we and deliver key bit expect lot But as ahead to us from perspective. side subscription year-over-year we little Sigma have, the contract to of rev total XX:XX on every we're we perspective. that a on in a what KPIs got different kind recognition work bright the commercial year-over-year. value with going we future total the with from growth sales traditionally value still tackle So, a a day expect forward. of the contract do past had model grow be to really that's of will revenue

Scott Buck

you hear. start that's of Okay, then, up the XX:XX to the cash you quarter. you kind And in cash Frank, where inflection really cash to to would the enough I'm how do to point level? have revenue comfortable tide And that burn you helpful. get ramp? I see are curious guess ticked with

Frank Orzechowski

Well, XX:XX yes.

quarter to of picked a to the picked year because the up of of XXXX. the last the The quarter we to is back burn burn flow did So pretty it's in -- the flat cash lot has add was year. half infrastructure actually last cash first up, of the relative certainly fourth

the opportunity looking makes and some -- take at there's right So overhead we to the to Right? as closer approach reduction XXXX no XXXX. were conservative to new with going by to midpoint said, the for we take model, cash burn, get is sales current burn operating probably sales an here that issue with there cash we're -- to Jack it looking most is this So now of reduce refocusing easily forward. how flow we of at know, XX:XX can with a we're looking got impacted and expenses you we've other sales, The if into it at resources, the opportunity and is, the are and going some sense organization. in where now,

Scott Buck

the XX:XX view XX%, helpful, not mean, margin margin or business Frank. last transition. SaaS quarter on really XX%, I XX% Okay. achievable? can't what remember I is you gross companies we then is That's discussed thing margins. should you where following now whether And just for ceiling as me gross gross other last the

Jacob Brunsberg

mean, year around model we going to see with you're Yeah. margin. XX% were our XX%, in Last think XX:XX sure. gross I that I for our perpetual

to component think to gets over that less going as we only of improve and number offering only software I transition time hardware is a and less. the

over upwards SaaS percent you you're yeah, similar So in plus at of find gross margin, what to looking company. a XX time

Scott Buck

I guys. XX:XX Thanks again. time. the Okay. appreciate Perfect,

Jacob Brunsberg

XX:XX Thank you.

Operator

XX:XX you. Thank

is Our Office. question. Please next Shaw proceed Shaw the your Michael with from Family question with

Michael Shaw

the Are addressed have Hi, like quarter sold like or does be sales good couple look In to issues XX:XX the that fourth for metal you on needs side you of have it afternoon. What polymer of similar a the systems. there forward? going additional business? the

Jacob Brunsberg

The because with it question. XX:XX point Yeah. beginning. was product an interesting the talking Thank from mindset you started is actually polymer production for the actually here,

some them on an the side supply offering directive create for provide So can metal an base that their to aerospace mimic monitoring. technology of had production the company kind to of our

out crux the of right site, of solution collaboration the was our this development and gate the so, in production. out building was for -- that a And beta first

as validation the of last major finishing steps, approaching be We're mass we're And just our year. which then really well user aerospace with the offering market that. for next up the installation had as we for technology corporation. So now that enterprise and should multi-unit installation first kind

progressing indicator where well there was approached is beginning. because metal it XX:XX and we're way up very So, leading side. a it that's So a the being actually head ended in little future it in with vision the in going got of start on our line the a bit maybe very

Michael Shaw

great. Thank very That's you XX:XX much.

Operator

Thank XX:XX you.

comes Dawson your question with from proceed Carlo next question. with Corzine James. Our Please

Carlo Corzine

Welcome guys. Hey, XX:XX aboard.

can should still that revenues? think OEMs. see You've that? coming talked about update in when from we on when expect seeing we from of What an revenues incremental And growth future you that? the XX% give Is case? the us the do And you we'll these start

Jacob Brunsberg

XX:XX I two Perfect. Yeah, components. there's think

ready the with there the with really So field, well the into solution revenue some align that as some component combination. AconityXD expect the OEMs is a offerings will fully that are today, drive the revenue in hardware, that kind yet don't make a have really in product and you that well offering software software-only, and market short-term retrofit APIs with short-term of a of there exists embedded large an what the from From that with with. that existing up came a component the those revenue market positive platforms that that a expect perspective. we goes some can of We in more opening movement longer-term OEMs add product space [indiscernible] both so have from as can

fully structure in licensed progress part to machine where the look the that for there we a a a offering. the -- we out an maybe or space. piece off embedded in XX:XX and you we second update OEMs IP as or look component line offering are in and solution is The OEM So

term’ and of fit out of year on we next where their but the system. go onward kind phase next-generation the door those kind So ‘longer actually within

pick of of middle really to the kind quarter door system point That's with expect our the the some every when out software next-gen kind first launching So is up or we there. second of of can embedded the year. machine start next partners, to towards kind

Carlo Corzine

Thank XX:XX you.

Operator

you. Thank XX:XX

Larry question. your proceed is [Harry with question (ph) Office. Family Holib] from with next Our Holib Please

Unidentified Participant

XX:XX system. Good seems be [indiscernible] My quality afternoon. to assurance XD question their is touting

relate or that I'm your to how wondering plans? impact does So

Jacob Brunsberg

importance XD their to propositions thank very and you is to space There the quality an Yeah, interesting. XX:XX for one of many, exciting in player metal see they the [indiscernible] value are market amongst go newer and the for of quality question. monitoring. with actually the for AM assurance it's OEM us

being their So said, really on aligns of we things see with well. the XX:XX OEMs closely that view critical a the part that market That go of in marketplace machine, a of how potential is as really today they on we as do across the a other which of their them competitor's and to address can machines standard that theirs. cannot addition something this, in all today partner front we

we [indiscernible] and unified marketplace can them machines always XX:XX that future. to sites a of offerings every So, some the to really systems platform. the look bigger than purposes, the the standard with a For that more in me, point exciting OEMs standardize give all a the our like have to something space, of that have deal in working other operations set intensive the in across in correlate being one set OEMs this at for marketplace as kind and touted look to see hopefully opportunity across forward

Unidentified Participant

you very much. XX:XX thank Great,

Operator

XX:XX Thank you.

Our your next with Please with Investors. comes Alper question. Lee Hammock question from proceed

Lee Alper

XX:XX Yeah, thanks.

of cycle year the a in also is weren't there quarter. and lot the a the little kind is color Thanks. force And your programs? or about your last how quite for first sales Can long sales the really on invested you revenue your in guys to add that? new more You year thoughts give first

Jacob Brunsberg

XX:XX Certainly.

them across parts the on-boarded us It the year. heavy before investment So commented the connections the other little into in get allowed the deep to in and of was industry. room marketplace and other experience quickly had the of to right especially production extremely very last a as hitters or in OEM beneficial who us year, to the some we people bit later industry really in

here. have you echoed of about to brought I see and we on As going in is and kind forward customers. think stated our And before, in right delivery what the what I was discussions of plans to product the needed lot that a

came So of The cycle year. XX cycles think our instantaneously I the range really to close part progress first you offerings. make really commented, in as hardware, cycle that as implement we that package six sales offerings many our group as think deal to saw is XX:XX with a buy range month Traditionally, software as can to sales later from solution then kind we they kind interaction economical wise, our towards that some and on software-only easier I shorten lot that goal of structure. last towards well. to into of to can as possible and grow more and it people and in of full quality of standard

effort possibly absorbed, a allocation that of as really XX:XX we of made is the can last comment you're short looking really at question to sales Frank get of and on is now cycle the going So resources. runway I'll and about what feedback based make that and lot seeing the on forward. as And kind it

progressive. of and about really we around the And and forward going that excited we're is a team getting brought adding So forward important supporting some of we really the year into on, success today and customers support contribution the to product as that's repurposed have looking really of of we've to partnership our really to forward. scale and the we go OEMs about our the two their aligning XX:XX all blue-chip things, opportunities within they're lot to and and a team so them feedback some customer

rooms, the names having the and pipeline. right we're think to the key right conversations in adding I today some

Lee Alper

XX:XX Okay, thanks.

Operator

like Brunsberg are you. closing the comments. Thank further to back no questions XX:XX at for any this turn to time, floor There Jacob I'd over

Jacob Brunsberg

XX:XX Thank you.

space forward you our executing mentioned I because upcoming one And viewed industry largest so really forward. closing. as progress be everybody you that about the on plan. Thank going We're excited monitoring came OEM to of is in in-process believe a technology updating here day. adoption I strongly and look opportunity to background for there that But that, catalyst look still really I Mark I execute it with forward good this to feel for I'll the today Have extremely joining. and on quarters. sure my growth So from before additive the to

Operator

This concludes today's conference. XX:XX

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

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