Desktop Metal(US:DM)2024-07-31 14:40Financial Data and Key Metrics Changes - Consolidated revenue for Q2 2024 was $38.9 million, down from $53.3 million in Q2 2023, primarily due to weaker hardware sales [33] - Non-GAAP gross margins decreased to 29.2% in Q2 2024 from 31% in the prior year, reflecting lower revenue and cost absorption [34] - Non-GAAP operating expenses were $27.0 million in Q2 2024, reduced by $1.6 million sequentially and by $7.7 million year-over-year, showing improvements of 5.6% and 22.2% respectively [35] - Adjusted EBITDA for Q2 2024 was negative $13.2 million, an improvement of $1.8 million compared to Q2 2023 [35] - The company closed Q2 with $46.7 million in cash, with elevated outflows due to deal-related expenses [36] Business Line Data and Key Metrics Changes - Weaker hardware sales were the main contributor to the decline in revenue, while consumables and services remained roughly flat year-on-year [33] Market Data and Key Metrics Changes - The additive manufacturing industry has faced significant challenges, with many public companies in the sector experiencing declines in value and profitability [14][15] - Four publicly traded companies in the additive manufacturing space have failed or been delisted in the last two quarters due to deteriorating market conditions [15] Company Strategy and Development Direction - The proposed merger with Nano Dimension is seen as a strategic move to strengthen the company's competitive position and create long-term shareholder value [18] - The merger aims to establish a leader in the additive manufacturing space by combining complementary product portfolios and technologies [19] - The company believes that the merger will accelerate the industry's transition into mass production and create a well-capitalized entity to support customers [21][22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging business environment due to rising interest rates and slowing capital expenditure budgets, which have pressured the financial position [12] - There is a belief that remaining a standalone company with a constrained balance sheet is not a viable long-term strategy [12] - Management expressed confidence that the merger with Nano Dimension represents the best option for stakeholders amid a difficult market [29] Other Important Information - The company has reduced non-GAAP operating expenses by 48% since Q1 2022, while also improving gross margins [10] - The company is no longer providing guidance for the remainder of 2024 due to the pending acquisition [36] Q&A Session Summary Question: Challenges in closing deals - Management noted that customers were hesitant to engage due to the company's financial position, impacting deal closures [38] Question: Cash burn and future focus - Elevated cash burn in Q2 was partly due to deal-related expenses, and there will be an increased focus on managing cash burn in the upcoming quarters [40]