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Desktop Metal Announces Fourth Quarter and Full Year 2023 Financial Results

  • Revenue of $52.3 million, down from $60.6 million in the same quarter a year ago, and up 22% sequentially over the prior quarter
  • Year-over-year improvements to net loss, adjusted EBITDA, gross margins, non-GAAP gross margins, operating expenses, and operating cash flow following more than $150 million in cost reduction efforts announced since June 2022
  • Net loss of $(323.4) million in 2023 compared to net loss of $(740.3) million in 2022
  • Adjusted EBITDA of $(9.2 million), a year-over-year improvement of 56% – and the company’s strongest quarterly performance to date
  • GAAP gross margin of (32)%; GAAP gross margin was negatively impacted by one-time non-cash restructuring activities in the quarter. Non-GAAP gross margin of 34%, a year-over-year improvement of 39.9%.
  • Quarterly GAAP operating expenses declined 58% year over year, both periods were impacted by goodwill impairment. Quarterly non-GAAP operating expenses declined for seven consecutive quarters to $31.6 million, down 39% from the start of DM’s cost reduction initiative
  • Cash, cash equivalents, and short-term investments closed fourth quarter 2023 at $84.5 million, as rate of cash consumption declined 25% compared to the same year-ago quarter
  • Initiated a review of strategic alternatives for industrial photopolymer business in effort to further strengthen position in our core healthcare photopolymers and production binder jetting for metal, sand and ceramic parts
  • Full year 2024 revenue guidance of between $175 and $215 million, and adjusted EBITDA between $(30) and $(10) million, with expectation to achieve adjusted EBITDA breakeven in the second half of 2024

Desktop Metal, Inc. (NYSE: DM), a global leader in Additive Manufacturing 2.0 technologies for mass production, today announced its financial results for the fourth quarter and full year ended December 31, 2023.

“Despite a challenging capital investment environment led by elevated interest rates and slower sales cycles, I’m proud that Team DM buckled down and delivered a much improved operating performance including reduced not loss and a record adjusted EBITDA performance,” said Ric Fulop, Founder and CEO of Desktop Metal.

“While we didn’t make our internal target of A-EBITDA positive by the end of the year, as some customer projects rolled into 2024, we are now very, very close to that goal,” Fulop continued. “We now enter the year with a lower cost structure that makes us resilient for the long term. The hard work will continue as we drive toward profitability, a goal that is clearly within sight despite the tough market conditions.”

Fulop noted that DM continues to see strong demand for production binder jet systems that produce metal, sand and ceramic parts, as well as increasing evidence of the value of Additive Manufacturing 2.0 systems. For the full year, DM reported record recurring revenue of $65 million, a 29% increase over the prior year that now represents 34% of revenue, up from 24% from 2022.

“Our all-time high recurring revenue levels prove that customers who have adopted our technology are using it successfully and getting great value from our technologies,” Fulop said.

Fourth Quarter 2023 and Recent Business Highlights:

Corporate

  • Continued execution of cost reduction plans with expectation of positive adjusted EBITDA in the second half of 2024

Product Performance

  • Desktop Metal and Evonik expand partnership, announce qualification of INFINAM® ST 6100 L on large format Additive Manufacturing 2.0 systems for high-performance, high-temperature products
  • Desktop Health™ announces Flexcera™ Base Ultra+ dental resin for stronger, more comfortable 3D Printed dentures
  • Desktop Metal now shipping the Figur G15 – a Digital Sheet Metal Forming machine that eliminates the need for custom tooling
  • Desktop Health announces first patients treated with FDA-Cleared CMFlex™ – and off-the-shelf 3D printed synthetic bone graft product pioneered by Dimension Inx on the 3D-Bioplotter®
  • Desktop Metal launches Live Monitor™ for users of Additive Manufacturing 2.0 production technology
  • DM now has metal and ceramic parts in production in multiple high value programs in defense and aerospace with parts in several jet engine families, major platforms like F35 and in several space vehicles
  • Growing business in Gigacasting with several global automakers

Fourth Quarter 2023 Financial Highlights

  • Revenue of $52.3 million, down from $60.6 million in the same quarter a year ago, and up 22% sequentially over the prior quarter
  • GAAP gross margin of (32)%; GAAP gross margin was negatively impacted by restructuring activities in the quarter. Non-GAAP gross margin of 34%, a year-over-year increase of 39.9%.
  • GAAP net loss of $(174.5) million, including $110.5 million of goodwill impairment; non-GAAP net loss of $(10.9) million
  • Adjusted EBITDA of $(9.2) million, a year-over-year improvement of 56% – and the company’s strongest quarterly performance to date
  • Cash, cash equivalents, and short-term investments closed fourth quarter 2023 at $84.5 million, as rate of cash consumption declined 25% compared to the same year-ago quarter

Financial Outlook

  • Revenue expectation of between $175 million to $215 million for 2024
  • Adjusted EBITDA of between $(30) million to $(10) million for full-year 2024

Desktop Metal has not provided a reconciliation of its Adjusted EBITDA outlook to net income because estimates of all of the reconciling items cannot be provided without unreasonable efforts. See “Non-GAAP Financial Information.”

Conference Call Information:

Desktop Metal will host a conference call on Friday, March 15, 2024 to discuss fourth quarter 2023 results. Participants may access the call at 1-877-407-4018, international callers may use 1-201-689-8471, and request to join the Desktop Metal financial results conference call. A simultaneous webcast of the conference call and the accompanying summary presentation may be accessed online at the Events & Presentations section of ir.desktopmetal.com. A replay will be available shortly after the conclusion of the conference call at the same website.

About Desktop Metal:

Desktop Metal (NYSE:DM) is driving Additive Manufacturing 2.0, a new era of on-demand, digital mass production of industrial, medical, and consumer products. Our innovative 3D printers, materials, and software deliver the speed, cost, and part quality required for this transformation. We’re the original inventors and world leaders of the 3D printing methods we believe will empower this shift, binder jetting and digital light processing. Today, our systems print metal, polymer, sand and other ceramics, as well as foam and recycled wood. Manufacturers use our technology worldwide to save time and money, reduce waste, increase flexibility, and produce designs that solve the world’s toughest problems and enable once-impossible innovations. Learn more about Desktop Metal and our #TeamDM brands at www.desktopmetal.com.

Forward-looking Statements:

This press release contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical facts contained in these communications, including statements regarding Desktop Metal’s future results of operations and financial position, financial targets, business strategy, and plans and objectives for future operations, are forward-looking statements. Forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this document, including but not limited to: demand for Desktop Metal’s products and services; the global macro-economic environment; impacts of rapid technological change in the additive manufacturing industry; Desktop Metals’ ability to realize the benefits from cost saving measures; and supply and logistics disruptions, including shortages and delays. For more information about risks and uncertainties that may impact Desktop Metal’s business, financial condition, results of operations and prospects generally, please refer to Desktop Metal’s reports filed with the SEC, including without limitation the “Risk Factors” and/or other information included in the Form 10-Q filed with the SEC on November 9, 2023, and such other reports as Desktop Metal has filed or may file with the SEC from time to time. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Desktop Metal, Inc. assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

DESKTOP METAL, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

 

 

December 31,

 

 

2023

 

2022

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

83,845

 

$

76,291

Current portion of restricted cash

 

 

233

 

 

4,510

Short‑term investments

 

 

625

 

 

108,243

Accounts receivable

 

 

37,690

 

 

38,481

Inventory

 

 

82,639

 

 

91,736

Prepaid expenses and other current assets

 

 

11,105

 

 

17,155

Total current assets

 

 

216,137

 

 

336,416

Restricted cash, net of current portion

 

 

612

 

 

1,112

Property and equipment, net

 

 

35,840

 

 

56,271

Goodwill

 

 

 

 

112,955

Intangible assets, net

 

 

168,259

 

 

219,830

Other noncurrent assets

 

 

37,153

 

 

27,763

Total Assets

 

$

458,001

 

$

754,347

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

18,190

 

$

25,105

Customer deposits

 

 

5,356

 

 

11,526

Current portion of lease liability

 

 

7,404

 

 

5,730

Accrued expenses and other current liabilities

 

 

27,085

 

 

26,723

Current portion of deferred revenue

 

 

11,739

 

 

13,719

Current portion of long‑term debt, net of deferred financing costs

 

 

330

 

 

584

Total current liabilities

 

 

70,104

 

 

83,387

Long-term debt, net of current portion

 

 

89

 

 

311

Convertible notes

 

 

112,565

 

 

111,834

Lease liability, net of current portion

 

 

23,566

 

 

17,860

Deferred revenue, net of current portion

 

 

3,696

 

 

3,664

Deferred tax liability

 

 

3,523

 

 

8,430

Other noncurrent liabilities

 

 

2,806

 

 

1,359

Total liabilities

 

 

216,349

 

 

226,845

Commitments and Contingencies (Note 17)

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

Preferred Stock, $0.0001 par value—authorized, 50,000,000 shares; no shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively

 

 

 

 

Common Stock, $0.0001 par value—500,000,000 shares authorized; 325,277,419 and 318,235,106 shares issued as of December 31, 2023 and December 31, 2022, respectively, 325,271,670 and 318,133,434 shares outstanding as of December 31, 2023 and December 31, 2022, respectively

 

 

33

 

 

32

Additional paid‑in capital

 

 

1,908,504

 

 

1,874,792

Accumulated deficit

 

 

(1,632,225)

 

 

(1,308,954)

Accumulated other comprehensive loss

 

 

(34,660)

 

 

(38,368)

Total Stockholders’ Equity

 

 

241,652

 

 

527,502

Total Liabilities and Stockholders’ Equity

 

$

458,001

 

$

754,347

See notes to consolidated financial statements.

DESKTOP METAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended December 31,

 

 

2023

 

2022

 

2021

Revenues

 

 

 

 

 

 

 

 

 

Products

 

$

168,091

 

$

190,248

 

$

105,994

Services

 

 

21,607

 

 

18,775

 

 

6,414

Total revenues

 

 

189,698

 

 

209,023

 

 

112,408

Cost of sales

 

 

 

 

 

 

 

 

 

Products

 

 

184,614

 

 

178,952

 

 

87,450

Services

 

 

15,174

 

 

15,000

 

 

6,665

Total cost of sales

 

 

199,788

 

 

193,952

 

 

94,115

Gross profit (loss)

 

 

(10,090)

 

 

15,071

 

 

18,293

Operating expenses

 

 

 

 

 

 

 

 

 

Research and development

 

 

85,096

 

 

96,878

 

 

68,131

Sales and marketing

 

 

40,334

 

 

68,091

 

 

47,995

General and administrative

 

 

66,272

 

 

83,065

 

 

78,041

In-process research and development assets acquired

 

 

 

 

 

 

25,581

Impairment charges

 

 

8,518

 

 

 

 

Goodwill impairment

 

 

112,911

 

 

498,800

 

 

Total operating expenses

 

 

313,131

 

 

746,834

 

 

219,748

Loss from operations

 

 

(323,221)

 

 

(731,763)

 

 

(201,455)

Change in fair value of warrant liability

 

 

 

 

 

 

(56,576)

Interest expense

 

 

(4,099)

 

 

(1,743)

 

 

(149)

Interest and other (expense) income, net

 

 

944

 

 

(8,335)

 

 

(11,822)

Loss before income taxes

 

 

(326,376)

 

 

(741,841)

 

 

(270,002)

Income tax benefit

 

 

3,105

 

 

1,498

 

 

29,668

Net loss

 

$

(323,271)

 

$

(740,343)

 

$

(240,334)

Net loss per share—basic and diluted

 

$

(1.00)

 

$

(2.35)

 

$

(0.92)

Weighted average shares outstanding, basic and diluted

 

 

322,196

 

 

314,817

 

 

260,770

See notes to consolidated financial statements.

DESKTOP METAL, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended December 31,

 

 

2023

 

2022

 

2021

Net loss

 

$

(323,271)

 

$

(740,343)

 

$

(240,334)

Other comprehensive (loss) income, net of taxes:

 

 

 

 

 

 

 

 

 

Unrealized loss

 

 

(203)

 

 

(290)

 

 

(40)

Foreign currency translation adjustment

 

 

3,911

 

 

(31,664)

 

 

(6,365)

Total comprehensive (loss) income, net of taxes of $0

 

$

(319,563)

 

$

(772,297)

 

$

(246,739)

See notes to consolidated financial statements.

DESKTOP METAL, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

Other

 

Total

 

 

Common Stock

 

Paid‑in

 

Accumulated

 

Comprehensive

 

Stockholders’

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

(Loss)

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE—January 1, 2021

 

224,626,597

 

$

23

 

$

844,188

 

$

(328,277)

 

$

(9)

 

$

515,925

Exercise of Common Stock options

 

5,732,247

 

 

1

 

 

6,425

 

 

 

 

 

 

6,426

Vesting of restricted Common Stock

 

491,293

 

 

 

 

 

 

 

 

 

 

Repurchase of shares for employee tax withholdings - RSA

 

(109,150)

 

 

 

 

(958)

 

 

 

 

 

 

(958)

Vesting of restricted share units

 

650,777

 

 

 

 

 

 

 

 

 

 

Repurchase of shares for employee tax withholdings - RSU

 

(61,498)

 

 

 

 

(541)

 

 

 

 

 

 

(541)

Issuance of Common Stock in connection with acquisitions

 

57,267,401

 

 

5

 

 

620,585

 

 

 

 

 

 

620,590

Issuance of Common Stock in connection with acquired in-process research and development

 

334,370

 

 

 

 

4,300

 

 

 

 

 

 

4,300

Stock‑based compensation expense

 

 

 

 

 

28,778

 

 

 

 

 

 

28,778

Vesting of Trine Founder Shares

 

1,850,938

 

 

 

 

 

 

 

 

 

 

Common Stock issued in connection with warrants exercised

 

20,690,975

 

 

2

 

 

320,567

 

 

 

 

 

 

320,569

Net loss

 

 

 

 

 

 

 

(240,334)

 

 

 

 

(240,334)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

(6,405)

 

 

(6,405)

BALANCE—December 31, 2021

 

311,473,950

 

$

31

 

$

1,823,344

 

$

(568,611)

 

$

(6,414)

 

$

1,248,350

Exercise of Common Stock options

 

2,310,931

 

 

 

 

3,190

 

 

 

 

 

 

3,190

Vesting of restricted Common Stock

 

157,131

 

 

 

 

 

 

 

 

 

 

Vesting of restricted share units

 

4,153,939

 

 

1

 

 

 

 

 

 

 

 

1

Repurchase of shares for employee tax withholdings - RSU

 

(74,719)

 

 

 

 

(243)

 

 

 

 

 

 

(243)

Issuance of common stock related to settlement of contingent consideration

 

112,202

 

 

 

 

500

 

 

 

 

 

 

500

Stock‑based compensation expense

 

 

 

 

 

48,001

 

 

 

 

 

 

48,001

Net loss

 

 

 

 

 

 

 

(740,343)

 

 

 

 

(740,343)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

(31,954)

 

 

(31,954)

BALANCE—December 31, 2022

 

318,133,434

 

$

32

 

$

1,874,792

 

$

(1,308,954)

 

$

(38,368)

 

$

527,502

Exercise of Common Stock options

 

1,006,046

 

 

 

 

1,203

 

 

 

 

 

 

1,203

Vesting of restricted Common Stock

 

95,859

 

 

 

 

 

 

 

 

 

 

Vesting of restricted share units

 

5,802,852

 

 

1

 

 

(1)

 

 

 

 

 

 

Repurchase of shares for employee tax withholdings - RSU

 

(211,314)

 

 

 

 

(250)

 

 

 

 

 

 

(250)

Issuance of common stock related to settlement of contingent consideration

 

444,793

 

 

 

 

797

 

 

 

 

 

 

797

Stock‑based compensation expense

 

 

 

 

 

31,963

 

 

 

 

 

 

31,963

Net loss

 

 

 

 

 

 

 

(323,271)

 

 

 

 

(323,271)

Other comprehensive income

 

 

 

 

 

 

 

 

 

3,708

 

 

3,708

BALANCE—December 31, 2023

 

325,271,670

 

$

33

 

$

1,908,504

 

$

(1,632,225)

 

$

(34,660)

 

$

241,652

See notes to consolidated financial statements.

DESKTOP METAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

Years Ended December 31,

 

 

2023

 

2022

 

2021

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net loss

 

$

(323,271)

 

$

(740,343)

 

$

(240,334)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

53,632

 

 

50,767

 

 

24,854

Stock‑based compensation

 

 

33,177

 

 

48,001

 

 

28,778

Impairment charges

 

 

8,518

 

 

 

 

Goodwill impairment

 

 

112,911

 

 

498,800

 

 

Inventory write-off

 

 

28,966

 

 

 

 

Change in fair value of warrant liability

 

 

 

 

 

 

56,576

Change in fair value of subscription agreement

 

 

 

 

 

 

2,920

Amortization of capitalized commissions

 

 

318

 

 

 

 

Amortization (accretion) of discount on investments

 

 

(490)

 

 

(888)

 

 

3,021

Amortization of debt financing cost

 

 

 

 

 

 

9

Amortization of deferred costs on convertible notes

 

 

731

 

 

453

 

 

Provision for bad debt

 

 

2,215

 

 

975

 

 

447

Provision for slow-moving, obsolete, and lower of cost or net realizable value inventories, net

 

 

17

 

 

(45)

 

 

Acquired in-process research and development

 

 

 

 

 

 

25,581

Loss on disposal of property and equipment

 

 

209

 

 

224

 

 

74

Net increase (decrease) in accrued interest related to marketable securities

 

 

238

 

 

847

 

 

(819)

Net unrealized (gain) loss on equity investment

 

 

464

 

 

6,332

 

 

9,660

Net unrealized (gain) loss on other investments

 

 

-

 

 

1,595

 

 

(130)

Deferred tax benefit

 

 

(3,105)

 

 

(1,498)

 

 

(29,668)

Change in fair value of contingent consideration

 

 

 

 

(1,567)

 

 

(429)

Foreign currency transaction (gain) loss

 

 

(613)

 

 

303

 

 

189

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(1,297)

 

 

6,737

 

 

(18,299)

Inventory

 

 

(19,079)

 

 

(28,183)

 

 

(16,962)

Prepaid expenses and other current assets

 

 

5,205

 

 

1,787

 

 

(8,937)

Other assets

 

 

4,265

 

 

2,505

 

 

(3)

Accounts payable

 

 

(6,894)

 

 

(6,595)

 

 

12,797

Accrued expenses and other current liabilities

 

 

1,966

 

 

(10,613)

 

 

(8,761)

Customer deposits

 

 

(6,169)

 

 

(2,037)

 

 

(2,569)

Current portion of deferred revenue

 

 

(1,962)

 

 

(4,749)

 

 

5,989

Change in right of use assets and lease liabilities, net

 

 

(6,626)

 

 

(4,298)

 

 

(641)

Other liabilities

 

 

1,679

 

 

(41)

 

 

1,609

Net cash used in operating activities

 

 

(114,995)

 

 

(181,531)

 

 

(155,048)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(2,762)

 

 

(11,517)

 

 

(7,683)

Purchase of other investments

 

 

 

 

 

 

(3,620)

Proceeds from other investments

 

 

4,089

 

 

3,155

 

 

Purchase of equity investment

 

 

 

 

 

 

(20,000)

Proceeds from sale of property and equipment

 

 

9,942

 

 

6

 

 

44

Proceeds from policy buyout

 

 

 

 

 

 

333

Purchase of marketable securities

 

 

(4,973)

 

 

(158,404)

 

 

(330,873)

Proceeds from sales and maturities of marketable securities

 

 

112,719

 

 

248,150

 

 

243,349

Proceeds from capital grant

 

 

 

 

200

 

 

Cash paid to acquire in-process research and development

 

 

 

 

 

 

(21,220)

Cash paid for acquisitions, net of cash acquired

 

 

(1,750)

 

 

(23)

 

 

(287,624)

Net cash provided by (used in) investing activities

 

 

117,265

 

 

81,567

 

 

(427,294)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Proceeds from reverse recapitalization, net of issuance costs

 

 

 

 

 

 

Proceeds from the exercise of stock options

 

 

1,203

 

 

3,190

 

 

6,426

Proceeds from the exercise of stock warrants

 

 

 

 

 

 

170,665

Payment of taxes related to net share settlement upon vesting of restricted stock units

 

 

(250)

 

 

(243)

 

 

(541)

Repayment of loans

 

 

(419)

 

 

(542)

 

 

Proceeds from issuance of convertible notes

 

 

 

 

115,000

 

 

Costs incurred in connection with the issuance of convertible notes

 

 

 

 

(3,619)

 

 

Repayment of term loan

 

 

 

 

 

 

(10,000)

Net cash provided by financing activities

 

 

534

 

 

113,786

 

 

166,550

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

(27)

 

 

(167)

 

 

(87)

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

 

2,777

 

 

13,655

 

 

(415,879)

Cash, cash equivalents, and restricted cash at beginning of period

 

 

81,913

 

 

68,258

 

 

484,137

Cash, cash equivalents, and restricted cash at end of period

 

$

84,690

 

$

81,913

 

$

68,258

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information

 

 

 

 

 

 

 

 

 

Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total shown in the consolidated statements of cash flows:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

83,845

 

$

76,291

 

$

65,017

Restricted cash included in other current assets

 

 

233

 

 

4,510

 

 

2,129

Restricted cash included in other noncurrent assets

 

 

612

 

 

1,112

 

 

1,112

Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows

 

$

84,690

 

$

81,913

 

$

68,258

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

 

Interest paid

 

$

6,900

 

$

3,488

 

$

148

Taxes paid

 

$

 

$

 

$

150

 

 

 

 

 

 

 

 

 

 

Non‑cash investing and financing activities:

 

 

 

 

 

 

 

 

 

Net unrealized (gain) loss on investments

 

$

(339)

 

$

290

 

$

40

Exercise of private placement warrants

 

$

 

$

 

$

149,904

Common Stock issued for acquisitions

 

$

 

$

 

$

620,590

Common Stock issued for acquisition of in-process research and development

 

$

 

$

 

$

4,300

Common Stock issued for settlement of contingent consideration

 

$

797

 

$

500

 

$

Accrued purchase price related to acquisitions

 

$

 

$

 

$

1,800

Additions to right of use assets and lease liabilities

 

$

13,926

 

$

10,812

 

$

5,582

Purchase of property and equipment included in accounts payable

 

$

239

 

$

516

 

$

90

Purchase of property and equipment included in accrued expense

 

$

31

 

$

 

$

38

Transfers from property and equipment to inventory

 

$

2,214

 

$

4,993

 

$

1,068

Transfers from inventory to property and equipment

 

$

1,566

 

$

4,513

 

$

1,435

Accrued contingent consideration in connection with acquisitions

 

$

 

$

 

$

6,083

Taxes related to net share settlement upon vesting of restricted stock awards in accrued expense

 

$

 

$

 

$

958

Deferred contract costs

 

$

 

$

1,341

 

$

Equipment financing

 

$

 

$

175

 

$

See notes to consolidated financial statements.

Non-GAAP Financial Information

This press release contains non-GAAP financial measures, including non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP operating expense, EBITDA and Adjusted EBITDA.

  • We define non-GAAP gross margin as GAAP gross margin excluding the effect of stock-based compensation, amortization of acquired intangible assets, restructuring, acquisition-related and integration costs, and inventory step-up adjustments
  • We define non-GAAP operating loss as GAAP operating loss excluding the effect of stock-based compensation, amortization of acquired intangible assets, restructuring, inventory step-up adjustments, and acquisition-related and integration costs
  • We define non-GAAP net loss as GAAP net loss excluding the effect of stock-based compensation, amortization of acquired intangible assets, restructuring, inventory step-up adjustments, acquisition-related and integration costs, and change in fair value of investments
  • We define non-GAAP operating expense as GAAP operating expense excluding the effect of stock-based compensation, amortization of acquired intangible assets, restructuring, and acquisition-related and integration costs including in operating expenses
  • We define EBITDA as GAAP net income (loss) excluding interest, income taxes, and depreciation and amortization expense
  • We define Adjusted EBITDA as EBITDA excluding change in fair value of investments, inventory step-up adjustments, stock-based compensation, restructuring, and acquisition-related and integration costs

In addition to Desktop Metal’s results determined in accordance with GAAP, Desktop Metal’s management uses this non-GAAP financial information to evaluate the Company’s ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial information, when taken collectively, may be helpful to investors in assessing Desktop Metal’s operating performance.

We believe that the use of Non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP operating expense, EBITDA and Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends because it eliminates the effect of financing, capital expenditures, and non-cash expenses such as stock-based compensation and warrants, and provides investors with a means to compare Desktop Metal’s financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, investors should be aware that when evaluating non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP operating expense, EBITDA and Adjusted EBITDA, we may incur future expenses similar to those excluded when calculating these measures. In addition, our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of these measures may not be comparable to other similarly titled measures computed by other companies because not all companies calculate these measures in the same fashion.

Because of these limitations, non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP operating expense, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP operating expense, EBITDA and Adjusted EBITDA on a supplemental basis. Management uses, and investors should consider, our non-GAAP financial measures only in conjunction with our GAAP results. Desktop Metal has not provided a reconciliation of its Adjusted EBITDA outlook to net income because estimates of all of the reconciling items cannot be provided without unreasonable efforts.

Set forth below is a reconciliation of each non-GAAP financial measure used in this press release to its most directly comparable GAAP financial measure.

DESKTOP METAL, INC.

NON-GAAP RECONCILIATION TABLE

(in thousands)

 

 

 

For the Year Ended

 

 

 

December 31,

 

(Dollars in thousands)

 

2023

 

2022

 

2021

 

GAAP gross margin

 

$

(10,090)

 

$

15,071

 

$

18,293

 

Stock-based compensation included in cost of sales(1)

 

 

2,262

 

 

2,257

 

 

1,018

 

Amortization of acquired intangible assets included in cost of sales

 

 

27,789

 

 

23,707

 

 

8,467

 

Restructuring expense in cost of sales

 

 

30,205

 

 

3,273

 

 

 

Acquisition-related and integration costs included in cost of sales

 

 

958

 

 

1,148

 

 

 

Inventory step-up adjustment in cost of sales

 

 

 

 

1,496

 

 

2,194

 

Non-GAAP gross margin

 

$

51,124

 

$

46,952

 

$

29,972

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating loss

 

$

(323,221)

 

$

(731,763)

 

$

(201,455)

 

Stock-based compensation(2),(3)

 

 

33,177

 

 

48,785

 

 

28,778

 

Amortization of acquired intangible assets

 

 

41,617

 

 

38,662

 

 

17,581

 

Restructuring expense

 

 

37,488

 

 

6,574

 

 

 

Inventory step-up adjustment in cost of sales

 

 

 

 

1,496

 

 

2,194

 

Acquisition-related and integration costs(4)

 

 

6,179

 

 

6,766

 

 

23,788

 

In-process research and development assets acquired

 

 

 

 

 

 

25,581

 

Impairment charges

 

 

8,518

 

 

 

 

 

Goodwill impairment

 

 

112,911

 

 

498,800

 

 

 

Non-GAAP operating loss

 

$

(83,331)

 

$

(130,680)

 

$

(103,533)

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(323,271)

 

$

(740,343)

 

$

(240,334)

 

Stock-based compensation(2),(3)

 

 

33,177

 

 

48,785

 

 

28,778

 

Amortization of acquired intangible assets

 

 

41,617

 

 

38,662

 

 

17,581

 

Restructuring expense

 

 

37,488

 

 

6,957

 

 

 

Inventory step-up adjustment in cost of sales

 

 

 

 

1,496

 

 

2,194

 

Acquisition-related and integration costs(4)

 

 

6,179

 

 

6,766

 

 

23,788

 

In-process research and development assets acquired

 

 

 

 

 

 

25,581

 

Impairment charges

 

 

8,518

 

 

 

 

 

Goodwill impairment

 

 

112,911

 

 

498,800

 

 

 

Change in fair value of investments

 

 

1,239

 

 

8,164

 

 

12,475

 

Change in fair value of warrant liability

 

 

 

 

 

 

56,576

 

Non-GAAP net loss

 

$

(82,142)

 

$

(130,713)

 

$

(73,361)

 

(1) Includes $0.1 million of liability-award stock-based compensation associated with bonuses granted in dollar amounts and paid out in RSUs under our bonus plan (“liability-award stock-based compensation”) for the years ended December 31, 2023 and 2022.

(2) Includes $7.3 million of stock-based compensation expense associated with the 2022 Initiative for the year ended December 31, 2022.

(3) Includes $2.0 million and $1.0 million of liability-award stock-based compensation, respectively, for the years ended December 31, 2023 and 2022.

(4) For the year ended December 31, 2023, we incurred $10.0 million in merger expenses related to the Stratasys transaction and recognized a $10.0 million reduction in expenses as a result of the reimbursement from Stratasys, with no net impact to the adjustment for Acquisition-related and integration costs for the year ended December 31, 2023.

DESKTOP METAL, INC.

NON-GAAP OPERATING EXPENSE RECONCILIATION TABLE

(in thousands)

 

 

 

For the Year Ended

 

 

 

December 31,

 

(Dollars in thousands)

 

2023

 

2022

 

2021

 

GAAP operating expenses

 

$

313,131

 

$

746,834

 

$

219,748

 

Stock-based compensation included in operating expenses(1),(2)

 

 

(30,915)

 

 

(46,528)

 

 

(27,760)

 

Amortization of acquired intangible assets included in operating expenses

 

 

(13,828)

 

 

(14,955)

 

 

(9,114)

 

Restructuring expense included in operating expenses

 

 

(7,283)

 

 

(3,301)

 

 

 

Acquisition-related and integration costs included in operating expenses(3)

 

 

(5,221)

 

 

(5,618)

 

 

(23,788)

 

In-process research and development assets acquired

 

 

 

 

 

 

(25,581)

 

Impairment charges

 

 

(8,518)

 

 

 

 

 

Goodwill impairment

 

 

(112,911)

 

 

(498,800)

 

 

 

Non-GAAP operating expenses

 

$

134,455

 

$

177,632

 

$

133,505

 

(1) Includes $7.3 million of stock-based compensation expense associated with the 2022 Initiative for the year ended December 31, 2022.

(2) Includes $1.9 million and $0.9 million of liability-award stock-based compensation, respectively, for the years ended December 31, 2023 and 2022.
(3) For the year ended December 31, 2023, we incurred $10.0 million in merger expenses related to the Stratasys transaction and recognized a $10.0 million reduction in expenses as a result of the reimbursement from Stratasys, with no net impact to the adjustment for Acquisition-related and integration costs for the year ended December 31, 2023.

DESKTOP METAL, INC.

NON-GAAP ADJUSTED EBITDA RECONCILIATION TABLE

(in thousands)

 

 

 

 

 

For the Years Ended

 

 

 

 

 

December 31,

 

(Dollars in thousands)

 

 

 

2023

 

2022

 

2021

 

Net loss attributable to common stockholders

 

 

 

$

(323,271)

 

$

(740,343)

 

$

(240,334)

 

Interest (income) expense, net

 

 

 

 

4,099

 

 

1,743

 

 

(334)

 

Income tax expense (benefit)

 

 

 

 

(3,105)

 

 

(1,498)

 

 

(29,668)

 

Depreciation and amortization

 

 

 

 

53,632

 

 

50,767

 

 

24,854

 

In-process research and development assets acquired

 

 

 

 

 

 

 

 

25,581

 

EBITDA

 

 

 

 

(268,645)

 

 

(689,331)

 

 

(219,901)

 

Change in fair value of warrant liability

 

 

 

 

 

 

-

 

 

56,576

 

Change in fair value of investments

 

 

 

 

1,239

 

 

8,164

 

 

12,475

 

Inventory step-up adjustment

 

 

 

 

 

 

1,496

 

 

2,194

 

Stock-based compensation expense(1),(2)

 

 

 

 

33,177

 

 

48,785

 

 

28,778

 

Restructuring expense

 

 

 

 

37,488

 

 

6,957

 

 

 

Goodwill impairment

 

 

 

 

112,911

 

 

498,800

 

 

 

Impairment charges

 

 

 

 

8,518

 

 

 

 

 

 

 

Acquisition-related and integration costs(3)

 

 

 

 

6,179

 

 

6,766

 

 

23,788

 

Adjusted EBITDA

 

 

 

$

(69,133)

 

$

(118,363)

 

$

(96,090)

 

(1) Includes $7.3 million of stock-based compensation expense associated with the 2022 Initiative for the year ended December 31, 2022.

(2) Includes $1.0 million of liability-award stock-based compensation for the year ended December 31, 2022.

(3) For the year ended December 31, 2023, we incurred $10.0 million in merger expenses related to the Stratasys transaction and recognized a $10.0 million reduction in expenses as a result of the reimbursement from Stratasys, with no net impact to the adjustment for Acquisition-related and integration costs for the year ended December 31, 2023.

DESKTOP METAL, INC.

NON-GAAP RECONCILIATION TABLE

(in thousands)

 

 

 

For the Quarter Ended

 

 

December 31,

(Dollars in thousands)

 

2023

 

2022

GAAP gross margin

 

$

(16,739)

 

$

8,311

Stock-based compensation included in cost of sales

 

 

475

 

 

365

Amortization of acquired intangible assets included in cost of sales

 

 

7,045

 

 

5,890

Restructuring expense in cost of sales

 

 

26,984

 

 

147

Acquisition-related and integration costs included in cost of sales

 

 

45

 

 

Inventory step-up adjustment in cost of sales

 

 

 

 

Non-GAAP gross margin

 

$

17,810

 

$

14,713

 

 

 

 

 

 

 

GAAP operating loss

 

$

(177,267)

 

$

(311,895)

Stock-based compensation

 

 

6,478

 

 

7,615

Amortization of acquired intangible assets

 

 

10,320

 

 

10,140

Restructuring expense

 

 

30,878

 

 

1,488

Inventory step-up adjustment in cost of sales

 

 

 

 

Acquisition-related and integration costs

 

 

2,866

 

 

133

In-process research and development assets acquired

 

 

 

 

Impairment charges

 

 

2,456

 

 

Goodwill impairment

 

 

110,461

 

 

269,300

Non-GAAP operating loss

 

$

(13,808)

 

$

(23,219)

 

 

 

 

 

 

 

GAAP net loss

 

$

(174,529)

 

$

(312,353)

Stock-based compensation

 

 

6,478

 

 

7,615

Amortization of acquired intangible assets

 

 

10,320

 

 

10,140

Restructuring expense

 

 

30,878

 

 

1,488

Inventory step-up adjustment in cost of sales

 

 

 

 

Acquisition-related and integration costs

 

 

2,866

 

 

133

In-process research and development assets acquired

 

 

 

 

Impairment charges

 

 

2,456

 

 

Goodwill impairment

 

 

110,461

 

 

269,300

Change in fair value of investments

 

 

178

 

 

(329)

Change in fair value of warrant liability

 

 

 

 

Non-GAAP net loss

 

$

(10,892)

 

$

(24,006)

DESKTOP METAL, INC.

NON-GAAP ADJUSTED EBITDA RECONCILIATION TABLE

(in thousands)

 

 

 

For the Quarter Ended

 

 

December 31,

(Dollars in thousands)

 

2023

 

2022

Net loss attributable to common stockholders

 

$

(174,528)

 

$

(312,353)

Interest (income) expense, net

 

 

1,134

 

 

462

Income tax expense (benefit)

 

 

(2,430)

 

 

104

Depreciation and amortization

 

 

13,312

 

 

12,473

In-process research and development assets acquired

 

 

 

 

EBITDA

 

 

(162,512)

 

 

(299,314)

Change in fair value of warrant liability

 

 

 

 

-

Change in fair value of investments

 

 

178

 

 

(329)

Inventory step-up adjustment

 

 

 

 

Stock-based compensation expense

 

 

6,478

 

 

7,615

Restructuring expense

 

 

30,878

 

 

1,488

Goodwill impairment

 

 

110,461

 

 

269,300

Impairment charges

 

 

2,456

 

 

 

Acquisition-related and integration costs

 

 

2,866

 

 

133

Adjusted EBITDA

 

$

(9,195)

 

$

(21,107)

 

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