Earnings call transcript: Nano Dimension Q1 2025 sees revenue growth, stock rises

Nano Dimension Ltd reported its Q1 2025 earnings, showing an 8% increase in revenue compared to the previous year, reaching $14.4 million. Despite a reduction in adjusted gross margin, the company’s strategic focus on cost control led to a significant decrease in operating expenses. The stock reacted positively, with a 2.94% increase in the aftermarket session. According to InvestingPro data, the company maintains a strong financial position with a current ratio of 14.55, indicating robust liquidity to meet short-term obligations.

Key Takeaways

• Revenue grew by 8% year-over-year to $14.4 million.
• Operating expenses were reduced to $14 million, down from $25.3 million.
• The stock price rose by 2.94% in aftermarket trading.
• Adjusted EBITDA loss improved to $9 million from a $13.6 million loss.
• Focus on high-performance manufacturing solutions and cost control.

Company Performance

Nano Dimension demonstrated resilience in Q1 2025 with an 8% year-over-year revenue growth. The company has been focusing on streamlining operations and reducing costs, which resulted in a significant reduction in operating expenses. This strategic shift is part of Nano Dimension’s broader effort to position itself as a leader in digital manufacturing technology, especially in high-margin, scalable manufacturing solutions.

Financial Highlights

• Revenue: $14.4 million (8% increase from Q1 2024)
• Adjusted gross margin: 43.8% (down from 49.8% in Q1 2024)
• Operating expenses: $14 million (down from $25.3 million in Q1 2024)
• Adjusted EBITDA loss: $9 million (improved from $13.6 million loss in Q1 2024)
• Cash, cash equivalents, and investable securities: $840 million

Market Reaction

Nano Dimension’s stock saw a 2.94% increase in the aftermarket session, reflecting investor confidence in the company’s cost-cutting measures and strategic focus. The stock is currently trading near its 52-week low, but the positive earnings call could signal a potential upward trend. The stock’s performance is notable given the broader market’s volatility.

Outlook & Guidance

While specific financial guidance was not provided, Nano Dimension emphasized its ongoing strategic assessment and commitment to responsible business growth. The company is focusing on cost optimization and integrating recent acquisitions to enhance its technological capabilities.

Executive Commentary

CEO Ofer Barev highlighted the company’s transformative approach, stating, "We are changing the way the world designs and manufactures high performance, high value parts." CFO Asaf Sapouri emphasized fiscal discipline, noting, "We are very disciplined in our approach towards expenses."

Risks and Challenges

• Supply chain disruptions could impact production timelines.
• Market competition in digital manufacturing remains intense.
• Economic uncertainties could affect customer demand and investment.
• Integration of recent acquisitions may face operational challenges.
• Fluctuations in currency exchange rates could affect financial performance.

Q&A

During the earnings call, analysts questioned the future cost structure and cash burn, particularly concerning Desktop Metal’s convertible. Management reiterated their focus on disciplined expense management but declined to offer specific future guidance, emphasizing their strategic priorities instead.

Full transcript - Nano Dimension Ltd (NNDM) Q1 2025:

Operator: Good day, and gentlemen. Welcome to NanoDimension’s First Quarter twenty twenty five Financial Results Conference Call. My name is Ashia, and I’m your operator for today’s call. On the call with us today are Ofer Barev, Chief Executive Officer Asab Zepore, Chief Financial Officer and Julian Letterman, Chief Business Officer. Before we begin, may I remind our listeners that certain information provided on this call may contain forward looking statements and the Safe Harbor statement outlined in today’s earnings release also pertains to statements made on this call.

If you have not received a copy of the press release, please view it in the Investor Relations section of the company’s website. A replay of today’s call will also be available on the Investor Relations section of the company’s website. Afir will begin the call with a business update followed by a question and answer session, at which time the management team will answer questions. I would now like to turn the conference over to Nanod Dimension’s CEO, Ofer Behrev. Ofer, please go ahead.

Ofer Barev, Chief Executive Officer, Nano Dimension: Good afternoon, everyone, and thank you for joining Nano Dimension’s first quarter twenty twenty five financial results. Joining me today are Asaf Sapouri, our Chief Financial Officer and Julian Literman, our Chief Business Officer. Let’s look at who we are. We are a digital manufacturing leader. We are changing the way the world designs and manufactures high performance, high value parts.

We innovate and deliver the industrial manufacturing solutions that are at the pinnacle of multidisciplinary technology combining hardware, software and materials science. Let’s see our systems. What you’ll see here says so much about us. By combining software, machine learning, materials science and hardware, we partner with industrial innovators to deliver high performance, high value solutions. Let’s dive into headline results.

Importantly, I want to reiterate that these results are for the first quarter twenty twenty five ending March 31 and thus only reflect Nano Dimension’s business. Let’s call this our core business, which does not include the acquisitions of Markforged and Desktop Metal as they both occurred in April after the quarter closed.

Asaf Sapouri, Chief Financial Officer, Nano Dimension: I’ll ask Assaf to cover some of the other figures. Thanks, Ophir. I will walk you through our financial results for Q1 twenty twenty five. Just a quick note, my comments today are based on our non IFRS results. You can find the full IFRS to non IFRS reconciliations in our earnings release, which was issued earlier today and posted on our Investor Relations website.

Total revenue for the period was $14,400,000 representing an 8% growth from Q1 twenty twenty four despite macroeconomic headwinds. Our adjusted gross margin for the quarter was 43.8 percent compared to 49.8% in Q1 twenty twenty four. Our gross margin in Q1 was impacted by the discontinuation of non strategic assets. OpEx, net of one time expenses, declined to $14,000,000 in Q1 compared to $25,300,000 in Q1 of last year. This improvement reflects our focus on cost controls and operational efficiencies.

This focused execution is also reflected in our adjusted EBITDA loss of $9,000,000 in Q1. That is compared to a loss of $13,600,000 in Q1 twenty twenty four. Finally, as of March 31, our cash, cash equivalents and investable securities was $840,000,000 Our cash balance includes our investment in Stratasys. Additionally, it excludes our two most recent acquisitions with a combined purchase price of $294,500,000 Now Julian, I will hand it over to you.

Julian Letterman, Chief Business Officer, Nano Dimension: Good afternoon, everyone. This is a review of some key strategic decisions we have made, which you may recognize from previous communications. This was all part of our program to assess, then transform, then invest and finally grow. The key actions in this program were the discontinuation of several products including Admitec, DeepCube, Fabrica and Formatec. Simply put, these products were not found to deliver sufficient ROI for continued support from shareholders capital.

These decisions were forecast to save around $20,000,000 on annual operating expenses. We believe these results demonstrate our ability to act quickly on decisions that have impact.

Ofer Barev, Chief Executive Officer, Nano Dimension: Thank you, Julian. Let’s shift to strategic integration programs. We did this through product rationalization and operating model optimization. For our products, we ensure we have a competitive advantage that can command a high margin while making sure our solutions can work towards manufacturing high value, high performance parts, manufacturing at scale rather than the fabrication of experimental designs and concepts, and ultimately deliver a clear ROI for our customers. For our operations, we have further reduced expenses pursuing world class financial ratios, broken down organizational silos and moved towards a team with more doers, fewer managers for a flatter organization, better equipped to innovate and deliver value at speed.

Let us start looking at Nano Dimension’s core business with Markforged. Firstly, Desktop Metal is not included here due to its ongoing independent strategic assessment. I encourage those who are new to this topic to review our previous communications on this subject in April and in May. Back to the slide, you’ll see here that Nano Dimension core business, which is the company as it was prior to the acquisition, was just under $15,000,000 in revenue in the 2025, while Mark Forge was just under $17,000,000 In looking at adjusted EBITDA across the two organizations, you can see notable improvement due to our prudent management and cost reductions. Let’s shift to post merger integration or PMI.

We appreciate that many of our shareholders have interest in our thinking about the acquisitions. We are focused on growing our business, but doing so in a responsible way. We are running product rationalization and operating model optimization processes. For product rationalization, we are ensuring our solutions have a competitive advantage that can demand a high margin and enable high value, high performance parts manufacturing at scale. If we do this, we can deliver a ROI for shareholders.

For operating model optimization, we are reducing expenses to normal ratios, breaking down organizational silos and shaping the team around more doers, less managers for a flatter organization, better equipped to innovate and deliver value. A key point, while we did all of this in the core business, this is exactly how we are approaching post acquisition integration of Markforged. Moving on, I would normally say more about Desktop Metal at this point, but again, they are going through an independent strategic assessment. For Markforged, we are very excited about post merger integration developments. We are building on three strong foundations Markforged has developed through its years of operations.

a leading software platform positioned to be a leading multi product suite serving the digital manufacturing industry. multi forged FFF technology that is already adopted on factory floors and used for end parts. their metal binder jetting solution, which can manufacture exceptional high performance, high value metal parts at scale. We must also look at things requiring some change. We’re shifting to more strategic sales to deliver more solutions to the leading industrial manufacturing companies.

We are reducing operating expenses like we did in the core business. Before going to Q and A, I want to conclude with the following. We are confident we are doing the right things to create shareholders value. We did the right things to address the Nano Dimension business challenges and we are doing the same with Mark Forged. And while we cannot say what will happen with Desktop Metals independent strategic assessment, I am confident our Board and management team are focused on creating shareholder value by being a digital manufacturing leader through pioneering technology and also a P and L and balance sheet that will be formidable and signal our long term strength and leadership.

Thank you. I will now open it for questions.

Operator: Thank you. The question comes from Troy Jensen with Cantor Fitzgerald. Please go ahead.

Troy Jensen, Analyst, Cantor Fitzgerald: Hey, gentlemen. Thanks for taking my question. Ofer, I guess, I wanted to ask a little bit on the desktop metal. I guess it’s a strategic review and you can’t say much, but I guess my curiosity is on their convertible and whether or not that stays with desktop or is Nano responsible for it now that you guys have acquired the business?

Ofer Barev, Chief Executive Officer, Nano Dimension: I believe we’ve elaborated on desktop on the convertible in previous communications. We have met and we’re meeting our obligations to desktop metal. And this stock metal right now is managed by an independent management, independent financial advisors and an independent board. And they will make the decisions that are best for this stock metal.

Troy Jensen, Analyst, Cantor Fitzgerald: All right. I understand you can’t say a lot. I appreciate that. But how about Assaf for you? Could you help us out maybe six to twelve months out?

What does the cost structure, the cash burn rate? Any insight on what a combined business model looks like for Nano and Markforge?

Asaf Sapouri, Chief Financial Officer, Nano Dimension: Yes. Hi, Troy. Definitely, at this point, we’ve decided to not provide guidance as we evaluate the strategic alternatives of TM and we are working through the integration process of Markforged and NNO together. I can say that we are very disciplined in our approach towards expenses. We are very mindful of our cash burn and we will continue and review our operational expenses and control our cash as we’ve been doing.

And if you take a look at our Q1 numbers for nano on a standalone basis, you can see that OpEx improved significantly from the previous quarter and that’s what we’ll continue to do. So unfortunately, I cannot give you any specific details at this point.

Operator: Since there are no more questions, this concludes the question and answer session. I would like to turn the conference back over to the company for any closing remarks. Please go ahead.

Ofer Barev, Chief Executive Officer, Nano Dimension: Thank you for your participation everyone and we look forward to meeting with you for one on one calls as soon as time permits. Thank you for today’s call.

Operator: The conference has now concluded. Thank you for attending NanoDimension’s quarterly earnings conference call. You may now disconnect.

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