Desktop Metal (DM) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $38.9 million, down 27% year-over-year, reflecting market headwinds, increased competition, and customer hesitancy due to financial outlook concerns.

• Net loss for Q2 2024 was $(103.4) million, driven by one-time noncash charges for accelerated amortization and depreciation.

• Adjusted EBITDA improved to $(13.2) million from $(15.0) million in Q2 2023, reflecting ongoing cost reduction efforts.

• Announced a definitive all-cash merger agreement with Nano Dimension, offering $5.50 per share, subject to adjustments, and expected to strengthen competitive position and preserve shareholder value.

• Strategic cost optimization initiatives, including a 20% workforce reduction and facility consolidations, are underway to achieve at least $50 million in annualized cost savings.

Financial highlights

• Q2 2024 consolidated revenue was $38.9 million, down from $53.3 million in Q2 2023, mainly due to weaker hardware sales and market headwinds.

• Non-GAAP gross margin for Q2 2024 was 29.2%, down from 31% in Q2 2023; GAAP gross margin was (83)% due to one-time noncash charges.

• Non-GAAP operating expenses for Q2 2024 were $27.0 million, a 22% year-over-year improvement.

• Adjusted EBITDA for Q2 2024 was $(13.2) million, a 12% improvement from $(15.0) million in Q2 2023.

• Cash, cash equivalents, and short-term investments totaled $46.7 million as of June 30, 2024, with elevated cash outflows due to deal-related expenses.

Outlook and guidance

• No guidance provided for the remainder of 2024 due to the pending Nano Dimension acquisition.

• Management expects continued net losses and negative cash flows in the near term, with current capital resources sufficient into Q2 2025 if the merger closes.

• If the merger is not completed, additional financing will be required, with no assurance of availability.

• At least $50 million in annualized cost savings are anticipated from the 2024 Initiative.