Desktop Metal has announced its financial results for the second quarter ended June 30, 2022. “Desktop Metal continued to build on its momentum in the second quarter, delivering record revenue of $57.7 million and expanding non-GAAP gross margins to 26.7%,” said Ric Fulop, Founder, and CEO of Desktop Metal. “Our strong financial results represent the strength and breadth of our unmatched AM 2.0 portfolio as our team continues to execute at a high level in a dynamic macro environment.”
“We enter the second half of the year with a more streamlined and efficient operating model, combining continued revenue growth at scale with a disciplined strategy to optimize our expense structure, in order to achieve our financial commitments and support our path to profitability,” continued Fulop.
Recent business highlights
Desktop Metal’s recent business highlights include the company’s Strategic Integration and Cost Optimization Initiative to accelerate AM 2.0 growth, support the path to profitability, and drive value to shareholders, including the expectation of approximately $40 million of annualized run rate non-GAAP cost savings – $20 million of which is expected to take place in the second half of 2022, and at least $100 million of aggregate cost savings over the next 24 months.
Desktop Metal also unveiled FreeFoam, a revolutionary, expandable 3D printable resin designed for volume production of foam parts, was awarded a sub-contract under the Defense Logistics Agency (DLA) of the Department of Defense (a prime contract worth a potential $15 million), and began an effort to monetize a dominant IP portfolio of over 650 patents and pending applications.
Second quarter 2022 financial highlights
In the second quarter of 2022, Desktop Metal recorded a revenue of $57.7 million, up 203.9% from the second quarter of 2021 (in the second quarter of 2021, Desktop Metal had not yet acquired ExOne) revenue of $19.0 million, and an increase of 32.0% sequentially from the first quarter of 2022. This revenue growth was driven by strength from the company’s metals platform and contributions from acquisitions, such as the acquisition of ExOne.
The company recorded a GAAP gross margin of 14.6%; non-GAAP gross margin of 26.7%, increasing over 170 basis points from the second quarter of 2021, a net loss of $297.3 million, primarily due to a non-cash goodwill impairment charge of $229.5 million as a result of the company’s and comparable companies’ stock price declines and including $2.4 million of restructuring charges in connection with the Strategic Integration and Cost Optimization Initiative, an adjusted EBITDA of $(27.5) million, and cash, cash equivalents, and short-term investments of $255.7 million, as of June 30, 2022.
The company also successfully completed a $115 million convertible notes offering in May 2022, bolstering liquidity in an uncertain macro environment and providing sufficient runway to reach cash flow breakeven.
Outlook for the full year 2022
Desktop Metal’s outlook for the full 2022 year reaffirms revenue expectation of approximately $260 million, representing a 131% growth from 2021, and reaffirms the adjusted EBITDA expectation of approximately $(90) million.