Desktop Metal, Inc, based in Burlington, Massachusetts, USA, has reported its financial results for the third quarter ended September 30, 2023. The company announced Q3 2023 revenue of $42.8 million, a decrease from $47.1 million in the third quarter of 2022 attributed to lower product sales and a strategic focus on selling products with higher margins.
“Revenue in the third quarter was disappointing for Desktop Metal and also for the entire Additive Manufacturing industry. However, while we are dissatisfied with our top-line performance, I am incredibly proud of the progress that Team DM has made in executing our $100 million of annualised cost reductions announced in June 2022,” stated Ric Fulop, Founder and CEO of Desktop Metal.
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“Desktop Metal continues to take aggressive steps to ensure we have sufficient capital to navigate this challenging period. There are several strong, positive currents running through our results today, which adds to our confidence in the future of Desktop Metal as a profitable, high-growth leader in Additive Manufacturing.”
Fulop noted that the recurring revenue increased by 34% to $49.2 million in the first three quarters, compared to the same period a year ago. “Despite softer revenue in the third quarter, our recurring revenue streams continue to perform well, contributing to a positive shift in adjusted EBITDA and a path towards reaching breakeven in the fourth quarter of 2023.”
The company highlighted its continued execution of cost-reduction plans with year-over-year improvements to non-GAAP gross margins, operating expenses, adjusted EBITDA, and operating cash flow in Q3. As reported in February 2023, these cost reduction plans included a further workforce reduction of approximately 15% during the year.
In Q3, Desktop Metal’s GAAP gross margin was 4.5%, and the non-GAAP gross margin was 21.9%, improving by 190 basis points from the third quarter of 2022. The GAAP net loss was $46.4 million, which included $10.4 million for the amortisation of acquired intangibles. The non-GAAP net loss was $24.3 million.
Adjusted EBITDA for Q3 2023 was $(20.5) million, an improvement of $7.7 million from the third quarter of 2022. As of September 30, 2023, cash, cash equivalents, and short-term investments stood at $108.2 million, a decrease of $19.4 million from the end of the second quarter of 2023.
Desktop Metal said it is revising its revenue expectation to between $187 to $207 million and its Adjusted EBITDA expectation to between $(70) to $(50) million for full year 2023, with expectation to achieve adjusted EBITDA breakeven before year end 2023.