Desktop Metal Q2 sees growth alongside cost reduction plans
August 15, 2023
Desktop Metal Inc, based in Burlington, Massachusetts, USA, announced its financial results for the second quarter ended June 30, 2023. The company reported a revenue of $53.3 million, representing a 29% sequential increase.
“We are very pleased with our operational execution this quarter as we delivered strong sequential revenue growth, driving significant gross margin expansion and the best adjusted EBITDA since going public,” said Ric Fulop, founder and CEO of Desktop Metal. “Desktop Metal continues to execute on our cost reduction plans, and with strong growth drivers and customer demand trends entering second half 2023, we are confident in our growth projections, improving margin profile, and adjusted EBITDA commitments.”
Fulop continued, “We also recently signed a definitive agreement to combine with Stratasys in an approximately $1.8 billion all-stock transaction, establishing a powerhouse in global industrial Additive Manufacturing. We are very committed to this combination as we believe the combined company’s scale, complementary portfolio with minimal overlap, and enhanced growth and profitability are well-positioned to serve the evolving needs of customers in manufacturing.”
The report stated that Desktop Metal experienced a GAAP gross margin of 11% and a non-GAAP gross margin of 31%. This marks an improvement of 1,300 basis points from the first quarter of 2023 and 435 basis points from the second quarter of 2022. Additionally, the report notes that this was the company’s best quarter of adjusted EBITDA since going public, at $(15.0) million, which is an improvement of $12.5 million from the second quarter of 2022.
As of June 30, 2023, cash, cash equivalents, and short-term investments were reported at $127.6 million. This represents a $22.2 million reduction from the close of the first quarter of 2023.
The report also discussed Desktop Metal’s merger with Stratasys. The boards of directors of both companies have unanimously approved the proposed agreement, which is expected to close in the fourth quarter of 2023, subject to regulatory and shareholder approval from both companies, as well as other customary closing conditions.
Under the terms of the agreement, Desktop Metal stockholders will receive 0.123 ordinary shares of Stratasys for each share of Desktop Metal Class A common stock. After the transaction closes, legacy Desktop Metal stockholders will own approximately 41% of the combined company, and existing Stratasys shareholders will own approximately 59% of the combined company, both on a fully diluted basis.
