Desktop Metal Reports 15% Revenue Decline, Net Loss in Latest Quarter Amid Economic Uncertainty

Desktop Metal, Inc. reported significant financial changes in its latest 10-Q filing for the quarter ending September 30, 2024. The company experienced a decline in revenue, with total revenues for the three months at $36.4 million, down 15% from $42.8 million in the same period of 2023. For the nine months ended September 30, 2024, revenues totaled $115.9 million, a decrease of 16% compared to $137.4 million in the prior year. The decline was attributed to customers postponing capital expenditures amid economic uncertainty.

Despite the revenue drop, Desktop Metal reported an increase in gross profit for the third quarter, which rose to $3.2 million from $1.9 million in the previous year, reflecting improved gross margins. However, for the nine-month period, the company recorded a gross loss of $31.2 million, a stark contrast to a gross profit of $6.6 million in 2023. The increase in cost of sales, which rose to $147.2 million for the nine months, was primarily due to incremental amortization related to the Photopolymer Initiative.

The company’s net loss for the third quarter was $35.4 million, an improvement from a net loss of $46.4 million in the same quarter of 2023. However, for the nine months, the net loss increased to $191.0 million from $148.7 million in the prior year. The increase in losses was influenced by higher general and administrative expenses, which rose to $59.7 million, up from $50.7 million in 2023.

In terms of strategic developments, Desktop Metal announced a merger agreement with Nano Dimension Ltd. on July 2, 2024, which was approved by stockholders on October 2, 2024. The merger will convert each outstanding share of Class A common stock into cash at $5.50 per share, subject to adjustments. The company also executed a 1-for-10 reverse stock split effective June 10, 2024, to regain compliance with NYSE listing requirements.

The company has been undergoing restructuring initiatives, including a global workforce reduction of approximately 20% initiated in January 2024, aimed at achieving at least $50 million in annualized cost savings. Restructuring charges for the nine months ended September 30, 2024, totaled $87.4 million, significantly higher than the $6.6 million recorded in the same period of 2023.

As of September 30, 2024, Desktop Metal reported cash and cash equivalents of $30.6 million, a decrease from $83.8 million at the end of 2023. The accumulated deficit increased to $1.8 billion, reflecting ongoing operational losses since the company's inception. The company anticipates continued losses and negative cash flows in the near term, necessitating additional capital investment for operations and capital expenditures.