The Dutch-American service company Shapeways published its financial results for the third quarter of 2023, recording almost identical, although slightly lower revenues as in the same period last year ($8.37 million versus $8.45 million). The company also saw gross profit decline from $3.7 million in the third quarter of 2022 to $3.4 million this year. This decline was also visible in gross margin, which decreased slightly from 44% to 41%.
A more disturbing aspect is the increase in net loss, which increased to -$19.2 million from -$4.6 million last year. Selling, general and administrative (SG&A) expenses in the third quarter also increased to $11 million from $7.6 million. According to Shapeways CFO Alberto Recchi, the increase in operating costs and, consequently, the high operating loss result from several factors. The company is still implementing new technologies that it has acquired in recent months, which generates high costs before achieving efficiency and profitability. There has also been a shift in product mix towards options other than 3D printing, as well as increased shipping costs.
A positive phenomenon is the software segment, which showed an increase of +39.6% compared to the same quarter last year. Looking ahead, Shapeways anticipates gross margin growth based on the increasing share of software sales that are more profitable than 3D printing services and the benefits of consolidating manufacturing operations in the US.
As of September 30, 2023, Shapeways had cash reserves of $17.7 million, however the company’s third quarter expenses of approximately $7 million underscore the need for increased capitalization. Looking to the fourth quarter of 2023, Shapeways expects its revenue to be between $9.3 million and $10 million. This forecast shows potential growth from the $8.7 million in revenue reported in the final quarter of 2022, which is up from the $8.3 million reported in the same period in 2021.
Shapeways has initiated a series of cost-cutting measures by reducing staff and cutting all expenses that are not identified as essential. The layoffs will cover 15% of employees, which roughly translates into at least 25 employees losing their jobs, considering that the company employs nearly 200 people. Shapeways CEO Greg Kress said the board is exploring various strategic alternatives, including potential mergers, business combinations, capital raises or asset sales, to strengthen its financial prospects. However, no decisions regarding a possible transaction have been made yet.
Source: www.shapeways.com