- Expanded gross margins sequentially from the second quarter -
- Secured several multi-year contracts with enterprise customers in key target industries -
“As we navigate the dynamic landscape of the digital manufacturing industry,
“In addition, our increased customer focus on middle market and enterprise opportunities has translated into several exciting new multi-year customer contracts in our target industries. While we are encouraged with our progress, and have a growing pipeline of orders, the length of the sales cycle to these customers is typically longer. As a result, our ability to recognize about
“We remain dedicated to meeting evolving customer needs and the ongoing shift towards digital manufacturing solutions, and to demonstrating continued leadership in the industry.”
Business Updates
The Company made progress on each of its key initiatives:
Software tools and services continues to scale – Shapeways’ software offering is one of its key growth drivers, and is continuing to make progress. Notable highlights during and subsequent to quarter-end include:
- The Company saw ongoing software growth, with software revenues increasing 39.6% in the quarter, compared to the same period in the prior year, and with
$2.2 million of software revenues year to date, leading the Company to believe it is on track to more than double software revenues for full year 2023 from 2022. - The Company launched several key features to create a more comprehensive software offering, which the Company expects will continue to drive increased customer acquisition, retention, and lifetime value. These include an enhancement to the ordering service and the ability for customers to source discounted materials using the MFG Materials platform.
Enterprise manufacturing growth –
- The Company has secured two new long-term agreements in the third quarter with leading automotive and transportation manufacturers for multi-year production programs which are expected to ramp up to approximately
$4 million annualized revenues by the end of next year. This affirms Shapeways’ commitment to and proficiency in partnering with Tier 1 manufacturers to support OEM volume production. - The Company continues to increase its share of wallet with existing customers on multi-year revenue projects and saw revenues for the first nine months of this year from its top 250 customers grow 18% compared to the same period last year.
Cost Alignment Initiatives and Strategic Alternatives – While the Company remains encouraged by its momentum, in light of the elongated sales cycle and near term macroeconomic uncertainty,
Financial Highlights
Three Months Ended
- Revenue was
$8.4 million for each of the three months endedSeptember 30, 2023 and 2022 - Gross profit was
$3.4 million compared to$3.7 million for the same period in 2022 - Gross margin was 41% compared to 44% for the same period in 2022
- Net loss was
$19.2 million compared to$4.6 million for the same period in 2022 - Adjusted EBITDA was
$(5.0) million compared to$(4.6) million for the same period in 2022
Nine Months Ended
- Revenue was
$25.0 million compared to$24.5 million for the same period in 2022 - Gross profit was
$10.1 million compared to$10.7 million for the same period in 2022 - Gross margin was 41% compared to 44% for the same period in 2022
- Net loss was
$33.4 million compared to$13.3 million for the same period in 2022 - Adjusted EBITDA was
$(17.4) million compared to$(13.7) million for the same period in 2022
Outlook
For the fourth quarter of 2023, the Company anticipates revenue to be in the range of
Throughout the remainder of 2023 and into 2024, the Company will maintain a strong emphasis on achieving profitability and managing cash burn as it expands its digital manufacturing platform by leveraging the investments made in 2022.
Webcast and Conference Call Information
If you cannot participate in the live event, a replay will be available until
About
Contact Information
Investor Relations
investors@shapeways.com
Media Relations
press@shapeways.com
Special Note Regarding Forward-Looking Statements
Certain statements included in this press release are not historical facts and are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," "should," "would," "plan," "predict," "potential," "seem," "seek," "future," "outlook," and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. All statements, other than statements of present or historical fact included in this press release, regarding the Company's strategy, future operations, outlook, prospects, expectations regarding revenue, customer uptake of new offerings, ability and anticipated timeline to achieve profitability, objectives of management and ability to implement additional cost-reduction measures or consummate capital raises or strategic alternatives are forward-looking statements. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on as, a guarantee, an assurance, a prediction, or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of the Company. These forward-looking statements are subject to a number of risks and uncertainties, including changes in domestic and foreign business, financial, geopolitical, legal, and market conditions, including supply chain disruptions and inflationary or recessionary pressures; failure to realize the anticipated benefits of acquisitions; difficulties integrating acquired companies; ability to retain customers of acquired companies or otherwise expand its customer base; the risk that
Non-GAAP Financial Information
In addition to Shapeways’ results determined in accordance with accounting principles generally accepted in
Because of these limitations, Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with
CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) | |||||||
(Unaudited) | |||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 17,517 | $ | 30,630 | |||
Restricted cash | 139 | 139 | |||||
Short-term investments | — | 9,816 | |||||
Accounts receivable | 3,832 | 1,606 | |||||
Inventory | 1,998 | 1,307 | |||||
Prepaid expenses and other current assets | 3,225 | 6,255 | |||||
Current assets held for sale | 1,857 | — | |||||
Total current assets | 28,568 | 49,753 | |||||
Property and equipment, net | 5,988 | 15,627 | |||||
Operating lease, right-of-use assets, net | 1,948 | 2,365 | |||||
6,286 | 6,286 | ||||||
Intangible assets, net | 4,379 | 5,398 | |||||
Security deposits | 99 | 99 | |||||
Total assets | $ | 47,268 | $ | 79,528 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 1,657 | $ | 2,354 | |||
Accrued expenses and other liabilities | 3,598 | 5,950 | |||||
Current portion of long-term debt | 55 | — | |||||
Operating lease liabilities, current | 872 | 719 | |||||
Finance lease liability, current | 62 | — | |||||
Other financing obligations, current | 40 | — | |||||
Deferred revenue | 1,838 | 972 | |||||
Total current liabilities | 8,122 | 9,995 | |||||
Operating lease liabilities, net of current portion | 1,176 | 1,715 | |||||
Deferred tax liabilities, net | 83 | 27 | |||||
Finance lease liability, noncurrent | 261 | — | |||||
Other financing obligations | 426 | — | |||||
Long-term debt | 441 | — | |||||
Total liabilities | 10,509 | 11,737 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity | |||||||
Preferred stock ( | — | — | |||||
Common stock ( | 1 | 5 | |||||
Additional paid-in capital | 203,732 | 201,362 | |||||
Accumulated deficit | (166,409 | ) | (133,032 | ) | |||
Accumulated other comprehensive loss | (565 | ) | (544 | ) | |||
Total stockholders’ equity | 36,759 | 67,791 | |||||
Total liabilities and stockholders’ equity | $ | 47,268 | $ | 79,528 | |||
(1) Retroactively adjusted shares issued and outstanding to give effect to the Company's 1-for-8 reverse stock split. |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) (in thousands, except share and per share amounts) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Revenue, net | $ | 8,371 | $ | 8,449 | $ | 25,010 | $ | 24,452 | |||||||
Cost of revenue | 4,926 | 4,758 | 14,872 | 13,710 | |||||||||||
Gross profit | 3,445 | 3,691 | 10,138 | 10,742 | |||||||||||
Operating expenses | |||||||||||||||
Selling, general and administrative | 10,964 | 7,605 | 27,526 | 20,516 | |||||||||||
Research and development | 2,257 | 2,572 | 7,261 | 6,992 | |||||||||||
Impairment on assets held for sale | 9,680 | — | 9,680 | — | |||||||||||
Total operating expenses | 22,901 | 10,177 | 44,467 | 27,508 | |||||||||||
Loss from operations | (19,456 | ) | (6,486 | ) | (34,329 | ) | (16,766 | ) | |||||||
Other income (expense) | |||||||||||||||
Interest income | 247 | 21 | 913 | 23 | |||||||||||
Interest expense | (35 | ) | (7 | ) | (87 | ) | (7 | ) | |||||||
Loss on disposal of assets | — | — | (85 | ) | — | ||||||||||
Change in fair value of earnout liability | — | 1,784 | — | 1,784 | |||||||||||
Change in fair value of warrant liabilities | — | 31 | — | 1,558 | |||||||||||
Other income | 70 | 110 | 268 | 149 | |||||||||||
Total other income (expense), net | 282 | 1,939 | 1,009 | 3,507 | |||||||||||
Loss before income tax expense | (19,174 | ) | (4,547 | ) | (33,320 | ) | (13,259 | ) | |||||||
Income tax expense | 19 | 3 | 57 | 2 | |||||||||||
Net loss | (19,193 | ) | (4,550 | ) | (33,377 | ) | (13,261 | ) | |||||||
Net loss per share: | |||||||||||||||
Basic(1) | $ | (2.75 | ) | $ | (0.68 | ) | $ | (4.89 | ) | $ | (2.00 | ) | |||
Diluted(1) | $ | (2.75 | ) | $ | (0.68 | ) | $ | (4.89 | ) | $ | (2.00 | ) | |||
Weighted average common shares outstanding: | |||||||||||||||
Basic(1) | 6,968,534 | 6,648,195 | 6,824,520 | 6,623,168 | |||||||||||
Diluted(1) | 6,968,534 | 6,648,195 | 6,824,520 | 6,623,168 | |||||||||||
Other comprehensive income (loss) | |||||||||||||||
Foreign currency translation adjustment | (65 | ) | (125 | ) | (21 | ) | (351 | ) | |||||||
Comprehensive loss | $ | (19,258 | ) | $ | (4,675 | ) | $ | (33,398 | ) | $ | (13,612 | ) | |||
(1) Retroactively adjusted shares issued and outstanding, and per share information to give effect to the Company's 1-for-8 reverse stock split. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands, except share and per share amounts) | |||||||
Nine Months Ended | |||||||
2023 | 2022 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (33,377 | ) | $ | (13,261 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization | 1,467 | 1,032 | |||||
Loss from impairment on assets held for sale | 9,680 | — | |||||
Write-off of prepaid services | 3,196 | — | |||||
Write-off of intangible assets | 481 | — | |||||
Loss on disposal of assets | 85 | — | |||||
Stock-based compensation expense | 1,884 | 1,519 | |||||
Non-cash lease expense | 749 | 687 | |||||
Deferred income taxes | 56 | — | |||||
Interest receivable on short-term investments | (611 | ) | — | ||||
Change in fair value of earnout liability | — | (1,784 | ) | ||||
Change in fair value of warrant liabilities | — | (1,558 | ) | ||||
Change in operating assets and liabilities: | |||||||
Accounts receivable | (2,226 | ) | 710 | ||||
Inventory | (662 | ) | (152 | ) | |||
Prepaid expenses and other assets | (89 | ) | (1,335 | ) | |||
Accounts payable | (425 | ) | (396 | ) | |||
Accrued expenses and other liabilities | (1,794 | ) | 713 | ||||
Operating lease liabilities | (721 | ) | (732 | ) | |||
Deferred revenue | 866 | (458 | ) | ||||
Net cash used in operating activities | (21,441 | ) | (15,015 | ) | |||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (2,796 | ) | (9,043 | ) | |||
Purchase of short-term investments | (9,769 | ) | — | ||||
Proceeds from settlement of short-term investments | 20,000 | — | |||||
Cash paid for acquisitions, net of cash acquired | — | (8,861 | ) | ||||
Net cash provided by (used in) investing activities | 7,435 | (17,904 | ) | ||||
Cash flows from financing activities: | |||||||
Proceeds received from other finance obligations | 993 | — | |||||
Principal payments on finance leases | (45 | ) | — | ||||
Payments on other finance obligations | (17 | ) | — | ||||
Payments of taxes on restricted stock units withheld for employee taxes | (169 | ) | — | ||||
Proceeds from issuance of common stock | 118 | 289 | |||||
Net cash provided by financing activities | 880 | 289 | |||||
Net change in cash and cash equivalents and restricted cash | (13,126 | ) | (32,630 | ) | |||
Effect of change in foreign currency exchange rates on cash and cash equivalents and | 13 | (112 | ) | ||||
Cash and cash equivalents and restricted cash at beginning of period | 30,769 | 79,819 | |||||
Cash and cash equivalents and restricted cash at end of period | $ | 17,656 | $ | 47,077 | |||
Supplemental disclosure of cash and non-cash transactions: | |||||||
Cash paid for interest | $ | 87 | $ | — | |||
Purchase of property and equipment included in accounts payable | $ | 39 | $ | — | |||
Issuance of common stock upon settlement of earnout consideration liability | $ | 537 | $ | — |
RECONCILIATION OF GAAP TO NON-GAAP MEASURES For the Three and Nine Months Ended | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
(Dollars in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Net loss | $ | (19,193 | ) | $ | (4,550 | ) | $ | (33,377 | ) | $ | (13,261 | ) | ||||
Interest expense, net | (212 | ) | (14 | ) | (826 | ) | (16 | ) | ||||||||
Depreciation and amortization | 495 | 473 | 1,467 | 1,032 | ||||||||||||
Stock-based compensation expense | 603 | 1,207 | 1,884 | 1,519 | ||||||||||||
Impairment on assets held for sale | 9,680 | — | 9,680 | — | ||||||||||||
Write-offs of prepaid services | 3,196 | — | 3,196 | — | ||||||||||||
Write-offs of intangible assets | 481 | — | 481 | — | ||||||||||||
Change in fair value of earnout liability | — | (1,784 | ) | — | (1,784 | ) | ||||||||||
Change in fair value of warrant liabilities | — | (31 | ) | — | (1,558 | ) | ||||||||||
Income tax expense | 19 | 3 | 57 | 2 | ||||||||||||
Acquisition costs | — | — | — | 373 | ||||||||||||
Restructuring costs | 16 | 190 | 303 | 190 | ||||||||||||
Other | (57 | ) | (109 | ) | (217 | ) | (148 | ) | ||||||||
Adjusted EBITDA | $ | (4,972 | ) | $ | (4,615 | ) | $ | (17,352 | ) | $ | (13,651 | ) |
QUARTERLY PERFORMANCE (UNAUDITED) (in thousands) | |||||||||||||||||||
Three Months Ended, | |||||||||||||||||||
2022 | 2022 | 2023 | 2023 | 2023 | |||||||||||||||
Revenue | $ | 8,449 | $ | 8,705 | $ | 8,199 | $ | 8,440 | $ | 8,371 | |||||||||
% YoY Growth | 9 | % | 5 | % | 8 | % | — | % | (1 | )% | |||||||||
Gross Profit | $ | 3,691 | $ | 3,556 | $ | 3,282 | $ | 3,411 | $ | 3,445 | |||||||||
Gross Margin | 44 | % | 41 | % | 40 | % | 40 | % | 41 | % | |||||||||
Adjusted EBITDA | $ | (4,615 | ) | $ | (5,826 | ) | $ | (6,336 | ) | $ | (6,044 | ) | $ | (4,972 | ) |
RECONCILIATION OF GAAP TO NON-GAAP MEASURES | |||||||||||||||||||
Three Months Ended, | |||||||||||||||||||
(Dollars in thousands) | 2022 | 2022 | 2023 | 2023 | 2023 | ||||||||||||||
Net loss | $ | (4,550 | ) | $ | (6,960 | ) | $ | (7,403 | ) | $ | (6,781 | ) | $ | (19,193 | ) | ||||
Interest expense, net | (14 | ) | (126 | ) | (298 | ) | (316 | ) | (212 | ) | |||||||||
Depreciation and amortization | 473 | 759 | 442 | 530 | 495 | ||||||||||||||
Stock based compensation | 1,207 | 636 | 805 | 476 | 603 | ||||||||||||||
Impairment on assets held for sale | — | — | — | — | 9,680 | ||||||||||||||
Write-offs of prepaid services | — | — | — | — | 3,196 | ||||||||||||||
Write-offs of intangible assets | — | — | — | — | 481 | ||||||||||||||
Change in fair value of earnout liability | (1,784 | ) | (40 | ) | — | — | — | ||||||||||||
Change in fair value of warrant liabilities | (31 | ) | (26 | ) | — | — | — | ||||||||||||
Income tax (benefit) expense | 3 | 29 | 18 | 20 | 19 | ||||||||||||||
Acquisition costs | — | — | — | — | — | ||||||||||||||
Restructuring costs | 190 | 8 | 212 | 75 | 16 | ||||||||||||||
Other | (109 | ) | (106 | ) | (112 | ) | (48 | ) | (57 | ) | |||||||||
Adjusted EBITDA | $ | (4,615 | ) | $ | (5,826 | ) | $ | (6,336 | ) | $ | (6,044 | ) | $ | (4,972 | ) |
Source:
2023 GlobeNewswire, Inc., source