Revenue of $41.3 million, with a growing number of repeat purchases from customers with multi-machine fleets of our Additive Manufacturing 2.0 systems
Cost reduction plan delivered significant year-over-year improvements to adjusted EBITDA and operating cash flow in first quarter 2023
Combined $100 million in annualized savings from cost reduction plans remain on-track in order to reduce expense structure, expand margins, and drive to profitability
Reaffirming full year 2023 guidance of revenue between $210 to $260 million, and adjusted EBITDA between $(50) to $(25) million, with expectation to achieve adjusted EBITDA breakeven before year end 2023

Desktop Metal, Inc. (NYSE:DM) today announced its financial results for the first quarter ended March 31, 2023.

"Desktop Metal is off to a solid start to 2023 following very strong growth last year," said Ric Fulop, Founder and CEO of Desktop Metal. "Customer demand trends for our unique portfolio of AM 2.0 mass production solutions remain resilient, despite an unsteady macro environment, giving us confidence in our growth projections for this year. Additionally, we've made significant progress on our cost reduction efforts initiated last year and expanded in February 2023. Going forward, we expect to demonstrate continued reductions in our cost structure in order to expand margins and deliver on our adjusted EBITDA commitments. We believe we can differentiate ourselves as we navigate a difficult economic backdrop relative to our industry peers."

First Quarter 2023 and Recent Business Highlights:

Continued and expanded the cost reduction plan announced in 2022 to add an additional $50 million in annualized savings, as announced in February 2023, after successfully completing $50 million in annualized savings in 2022. Total combined $100 million in annualized cost savings remain on-track in order to reduce expense structure, expand margins, and drive to profitability
Expanding customer relationships with a growing number of high adoption Super Fleet customers, or those with three or more AM 2.0 printing systems. We now have more than 370 Super Fleet customers producing a high volume of end-use parts
Continued progress on Production System^TM platforms including expanding relationships with various consumer electronics customers, a segment we believe we can generate eight figures of revenue over next 18 months
Launched Live Suite^TM, a highly differentiated end-to-end software hub delivering generative AI solutions for AM 2.0
Expanded technical ceramic offerings across our portfolio of binder jet systems, where we're seeing increasing adoption for silicon carbide applications
Continued expansion of leading production materials library including Copper Alloy C18150 and Titanium Alloy Ti64 on the Production System^TM and 304L Stainless Steel on the Shop System^TM

First Quarter 2023 Financial Highlights:

Revenue of $41.3 million, down 5.5% from first quarter 2022 revenue of $43.7 million
GAAP gross margin of (3.3)%; non-GAAP gross margin of 18.0%, an improvement of 90 basis points from first quarter 2022
GAAP net loss of $52.6 million including $10.4 million amortization of acquired intangibles; non-GAAP net loss of $27.7 million
Adjusted EBITDA of $(24.4) million, an improvement of $17.1 million from first quarter 2022
Cash, cash equivalents, and short-term investments of $149.8 million as of March 31, 2023

Financial Outlook:

Reaffirming revenue expectation of between $210 to $260 million for full year 2023
Reaffirming Adjusted EBITDA expectation of between $(50) to $(25) million for full year 2023, with expectation to achieve Adjusted EBITDA breakeven before year end 2023

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 Wednesday, May 10, 2023 to discuss first 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, 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 risks associated with the integration of the business and operations of acquired businesses, our 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 May 10, 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.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and per share amounts)


	March 31,		December 31,
	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	101,252	$	76,291
Current portion of restricted cash		4,595		4,510
Short‑term investments		48,554		108,243
Accounts receivable		35,603		38,481
Inventory		98,221		91,736
Prepaid expenses and other current assets		21,067		16,325
Assets held for sale		6,871		830
Total current assets		316,163		336,416
Restricted cash, net of current portion		612		1,112
Property and equipment, net		45,262		56,271
Goodwill		113,571		112,955
Intangible assets, net		210,117		219,830
Other noncurrent assets		28,461		27,763
Total Assets	$	714,186	$	754,347
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	21,988	$	25,105
Customer deposits		12,300		11,526
Current portion of lease liability		6,106		5,730
Accrued expenses and other current liabilities		28,026		26,723
Current portion of deferred revenue		14,639		13,719
Current portion of long‑term debt, net of deferred financing costs		403		584
Total current liabilities		83,462		83,387
Long-term debt, net of current portion		252		311
Convertible notes		112,017		111,834
Lease liability, net of current portion		17,679		17,860
Deferred revenue, net of current portion		3,965		3,664
Deferred tax liability		8,074		8,430
Other noncurrent liabilities		3,167		1,359
Total liabilities		228,616		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 at March 31, 2023 and December 31, 2022, respectively		—		—
Common Stock, $0.0001 par value—500,000,000 shares authorized; 320,477,686 and 318,235,106 shares issued at March 31, 2023 and December 31, 2022, respectively, 320,401,389 and 318,133,434 shares outstanding at March 31, 2023 and December 31, 2022, respectively		32		32
Additional paid‑in capital		1,883,764		1,874,792
Accumulated deficit		(1,361,596)		(1,308,954)
Accumulated other comprehensive loss		(36,630)		(38,368)
Total Stockholders' Equity		485,570		527,502
Total Liabilities and Stockholders' Equity	$	714,186	$	754,347

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share amounts)


	Three Months Ended
	March 31,
	2023		2022
Revenues
Products	$	36,697	$	39,476
Services		4,619		4,230
Total revenues		41,316		43,706
Cost of sales
Products		38,891		41,902
Services		3,789		3,132
Total cost of sales		42,680		45,034
Gross profit (loss)		(1,364)		(1,328)
Operating expenses
Research and development		23,144		24,605
Sales and marketing		9,607		19,689
General and administrative		18,202		23,857
Total operating expenses		50,953		68,151
Loss from operations		(52,317)		(69,479)
Interest expense		(811)		32
Interest and other (expense) income, net		(71)		(1,753)
Loss before income taxes		(53,199)		(71,200)
Income tax benefit		557		1,256
Net loss	$	(52,642)	$	(69,944)
Net loss per share—basic and diluted	$	(0.16)	$	(0.22)
Weighted average shares outstanding, basic and diluted		319,095,656		312,016,627

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

(in thousands)


	Three Months Ended
	March 31,
	2023		2022
Net loss	$	(52,642)	$	(69,944)
Other comprehensive (loss) income, net of taxes:
Unrealized gain (loss) on available-for-sale marketable securities, net		189		12
Foreign currency translation adjustment		1,549		(11,047)
Total comprehensive (loss) income, net of taxes of $0	$	(50,904)	$	(80,979)

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(UNAUDITED)

(in thousands, except share amounts)


	Three Months Ended March 31, 2023
								Accumulated
								Other
	Common Stock			Additional				Comprehensive		Total
	Voting			Paid‑in		Accumulated		(Loss)		Stockholders'
	Shares	Amount		Capital		Deficit		Income		Equity
BALANCE—January 1, 2023	318,133,434	$	32	$	1,874,792	$	(1,308,954)	$	(38,368)	$	527,502
Exercise of Common Stock options	495,876		—		597		—		—		597
Vesting of restricted Common Stock	25,375		—		—		—		—		—
Vesting of restricted stock units	1,808,422		—		—		—		—		—
Repurchase of shares for employee tax withholdings	(61,718)		—		(99)		—		—		(99)
Stock‑based compensation expense	—		—		8,474		—		—		8,474
Net loss	—		—		—		(52,642)		—		(52,642)
Other comprehensive income (loss)	—		—		—		—		1,738		1,738
BALANCE—March 31, 2023	320,401,389	$	32	$	1,883,764	$	(1,361,596)	$	(36,630)	$	485,570


	Three Months Ended March 31, 2022
								Accumulated
								Other
	Common Stock			Additional				Comprehensive		Total
	Voting			Paid‑in		Accumulated		(Loss)		Stockholders'
	Shares	Amount		Capital		Deficit		Income		Equity
BALANCE—January 1, 2022	311,473,950	$	31	$	1,823,344	$	(568,611)	$	(6,414)	$	1,248,350
Exercise of Common Stock options	786,693		—		900		—		—		900
Vesting of restricted Common Stock	84,384		—		—		—		—		—
Vesting of restricted stock units	520,265		—		—		—		—		—
Repurchase of shares for employee tax withholdings	(39,720)		—		(158)		—		—		(158)
Stock‑based compensation expense	—		—		9,912		—		—		9,912
Net loss	—		—		—		(69,944)		—		(69,944)
Other comprehensive income (loss)	—		—		—		—		(11,035)		(11,035)
BALANCE—March 31, 2022	312,825,572	$	31	$	1,833,998	$	(638,555)	$	(17,449)	$	1,178,025

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)


	Three Months Ended March 31,
	2023		2022
Cash flows from operating activities:
Net loss	$	(52,642)	$	(69,944)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		13,433		12,883
Stock‑based compensation		9,313		9,912
Amortization (accretion) of discount on investments		(382)		413
Amortization of deferred costs on convertible notes		183		—
Provision for bad debt		179		419
Loss on disposal of property and equipment		519		2
Net increase (decrease) in accrued interest related to marketable securities		(8)		949
Net unrealized (gain) loss on equity investment		402		1,700
Deferred tax benefit		(557)		(1,256)
Change in fair value of contingent consideration		—		(114)
Foreign currency transaction (gain) loss		(25)		195
Changes in operating assets and liabilities:
Accounts receivable		2,792		9,489
Inventory		(6,892)		(15,506)
Prepaid expenses and other current assets		(4,664)		(4,087)
Other assets		991		(210)
Accounts payable		(3,011)		(1,333)
Accrued expenses and other current liabilities		878		(3,391)
Customer deposits		705		2,980
Current portion of deferred revenue		1,127		721
Change in right of use assets and lease liabilities, net		(1,493)		(108)
Other liabilities		1,806		12
Net cash used in operating activities		(37,346)		(56,274)
Cash flows from investing activities:
Purchases of property and equipment		(1,011)		(4,074)
Proceeds from sale of property and equipment		3,071		6
Purchase of marketable securities		(4,973)		—
Proceeds from sales and maturities of marketable securities		64,840		98,625
Cash paid for acquisitions, net of cash acquired		(500)		(23)
Net cash provided by investing activities		61,427		94,534
Cash flows from financing activities:
Proceeds from the exercise of stock options		597		900
Payment of taxes related to net share settlement upon vesting of restricted stock units		(99)		(158)
Repayment of loans		(250)		(43)
Net cash provided by financing activities		248		699
Effect of exchange rate changes on cash, cash equivalents and restricted cash		217		(349)
Net increase (decrease) in cash, cash equivalents, and restricted cash		24,546		38,610
Cash, cash equivalents, and restricted cash at beginning of period		81,913		68,258
Cash, cash equivalents, and restricted cash at end of period	$	106,459	$	106,868

Supplemental disclosures of cash flow information
Reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total shown in the condensed consolidated statements of cash flows:
Cash and cash equivalents	$	101,252	$	103,590
Restricted cash included in other current assets		4,595		2,166
Restricted cash included in other noncurrent assets		612		1,112
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$	106,459	$	106,868

Supplemental cash flow information:
Interest paid	$	—	$	—
Taxes paid	$	—	$	—

Non‑cash investing and financing activities:
Net unrealized (gain) loss on investments	$	(189)	$	(12)
Additions to right of use assets and lease liabilities	$	1,531	$	7,784
Purchase of property and equipment included in accounts payable	$	183	$	313
Purchase of property and equipment included in accrued expense	$	32	$	—
Transfers from property and equipment to inventory	$	275	$	1,721
Transfers from PP&E to Asset Held-For-Sale	$	6,040	$	—
Transfers from inventory to property and equipment	$	1,067	$	605

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 Three Months Ended
	March 31,
(Dollars in thousands)	2023		2022
GAAP gross margin	$	(1,364)	$	(1,328)
Stock-based compensation included in cost of sales⁽¹⁾		680		487
Amortization of acquired intangible assets included in cost of sales		6,927		5,990
Restructuring expense in cost of sales		717		—
Acquisition-related and integration costs included in cost of sales		479		1,138
Inventory step-up adjustment in cost of sales		—		1,181
Non-GAAP gross margin	$	7,439	$	7,468

GAAP operating loss	$	(52,317)	$	(69,479)
Stock-based compensation⁽²⁾		9,313		9,912
Amortization of acquired intangible assets		10,442		9,784
Restructuring expense		3,618		—
Inventory step-up adjustment in cost of sales		—		1,181
Acquisition-related and integration costs		1,406		3,986
Non-GAAP operating loss	$	(27,538)	$	(44,616)

GAAP net loss	$	(52,642)	$	(69,944)
Stock-based compensation⁽²⁾		9,313		9,912
Amortization of acquired intangible assets		10,442		9,784
Restructuring expense		3,618		—
Inventory step-up adjustment in cost of sales		—		1,181
Acquisition-related and integration costs		1,406		3,986
Change in fair value of investments		179		1,700
Non-GAAP net loss	$	(27,684)	$	(43,381)

(1)		Includes $0.2 million and $0.0 million of liability-award stock-based compensation expense for the three months ended March 31, 2023 and 2022, respectively.
(2)		Includes $1.6 million and $0.0 million of liability-award stock-based compensation expense for the three months ended March 31, 2023 and 2022, respectively.

DESKTOP METAL, INC.

NON-GAAP OPERATING EXPENSE RECONCILIATION TABLE

(in thousands)

	For the Three Months Ended
	March 31,
(Dollars in thousands)	2023		2022
GAAP operating expenses	$	50,953	$	68,151
Stock-based compensation included in operating expenses⁽¹⁾		(8,633)		(9,425)
Amortization of acquired intangible assets included in operating expenses		(3,515)		(3,794)
Restructuring expense included in operating expenses		(2,901)		—
Acquisition-related and integration costs included in operating expenses		(927)		(2,848)
Non-GAAP operating expenses	$	34,977	$	52,084

(1)

Includes $1.6 million and $0.0 million of liability-award stock-based compensation expense for the three months ended March 31, 2023 and 2022, respectively.

DESKTOP METAL, INC.

NON-GAAP ADJUSTED EBITDA RECONCILIATION TABLE

(in thousands)

	For the Three Months Ended
	March 31,
(Dollars in thousands)	2023		2022
Net loss attributable to common stockholders	$	(52,642)	$	(69,944)
Interest (income) expense, net		811		(32)
Income tax expense (benefit)		(557)		(1,256)
Depreciation and amortization		13,433		12,883
EBITDA		(38,955)		(58,349)
Change in fair value of investments		179		1,700
Inventory step-up adjustment		—		1,181
Stock-based compensation expense⁽¹⁾		9,313		9,912
Restructuring expense		3,618		—
Acquisition-related and integration costs		1,406		3,986
Adjusted EBITDA	$	(24,439)	$	(41,570)

(1)

Includes $1.6 million and $0.0 million of liability-award stock-based compensation for the three months ended March 31, 2023 and 2022, respectively.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230510005937/en/

Desktop Metal Announces First Quarter 2023 Financial Results