Fast Radius, Inc.

Hello, thank you for standing by, and welcome to the Fast Radius First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to Greg Robles of Investor Relations. Please go ahead.

Good morning, ladies and gentlemen, and welcome to the Fast Radius first quarter 2022 conference call. Delivering today's prepared remarks are co-founder, CEO, and chairman Lou Rassi and chief financial officer Prithvi Gandhi. Following their remarks, we will open the call for your questions. Before we go further, I will now read the company's safe harbor statement that provides important cautions regarding forward-looking statements. On today's call, we will be referring to the press release issued this morning that details the company's first quarter 2022 results, which can be downloaded from the investor relations page at ir.fastradius.com, where you'll also find the latest earnings presentation that supplements the information discussed on today's call. A recording of the call will be available on the investor section of the company's website later today. Please be aware that some of the comments made during this call may include forward-looking statements within the meaning of the federal securities laws. Statements about the company's beliefs and expectations containing words such as may, will, could, believe, expect, anticipate, and similar expressions constitute forward-looking statements. These statements involve risks and uncertainties regarding the company's operations and future results that could cause Fast Radius' results to differ materially for management's current expectations. While the company believes that its expectations are based upon reasonable assumptions, numerous factors may affect actual results and may cause results to differ materially. So the company encourages you to review the safe harbor statements and risk factors contained in today's press release and in its filings with the Securities and Exchange Commission, including its form 10Q filed today in periodic reports which identify specific risk factors that also may cause actual results or events to differ materially from those described in our forward-looking statements. The company does not undertake to publicly update or revise any forward-looking statements after this conference call. The company also notes that on this call, it will be discussing non-GAAP financial information, including adjusted EBITDA. The company is providing that information as a supplement to information prepared in accordance with accounting principles generally accepted in the United States, or GAAP, GAAP. You can find additional information and a reconciliation of these metrics to the company's reported GAAP results in the reconciliation tables provided in today's earnings release and presentation. And now, I'll turn the call over to Lou Rassi. Lou?

Good morning, everyone, and thank you for joining us. On today's call, I'll provide a brief overview of FastRadius. summarize our first quarter of 2022, and then go deep into the progress we've made in building out our cloud manufacturing platform, specifically new software releases that have been increasing our customer leads and acquisition, and further advancing software applications enabled by cloud manufacturing. I'll then hand it over to Prith Gandhi, our Chief Financial Officer, to cover our Q1 financials in greater detail, and then I will return with concluding remarks. Let's start with a quick recap of who we are, what we do, and what drives us. Fastradius is a leading cloud manufacturing and digital supply chain company. Our purpose is to make new things possible to improve the state of the world. Manufacturing is central to our lives, and now in the digital age, the sector's potential to drive progress in the world is significant and clear. We have new tools to design, make, and move products in ways we couldn't have imagined even a decade ago. We are building the platform and infrastructure to empower engineers to design, make, and move what they need, when and where they need it. With that mission guiding us, our product is the Fast Radius Cloud Manufacturing Platform, a first-of-its-kind platform that provides software applications, manufacturing solutions, and a network of factories that help engineers to design, make, and fulfill commercial-grade parts. This enables companies to manufacture and ship parts more easily, flexibly, and sustainably, or making it possible to store parts digitally instead of on a warehouse shelf. We're making it possible to ship parts digitally instead of by boats and planes. We're making it possible to make things local to where they are needed. We're allowing our customers to move away from carbon intensive supply chains and helping manufacturers adapt to the needs of our time. We're codifying substantial manufacturing knowledge and putting it in software. We're then empowering any engineer with a browser to design new things in new ways and then have the power to manufacture them. With that context, I want to briefly discuss the market we operate in today and the areas where we believe there's significant opportunity in the future. Let's start first with the market that is making component parts. Today, Fast Radius makes money by making parts for customers across a wide range of industries, from automotive and aerospace to healthcare and consumer goods. For making component parts less than 100,000 units annually, the total addressable market is approximately $350 billion. This includes a wide selection of manufacturing technologies we implement, such as additive manufacturing, injection molding, sheet metal, and CNC machining. The component part, making market, is an important and large market that we are tackling, and it's being reset by powerful forces, including Industry 4.0. Industry 4.0 is not simply one new technology that's advancing the state of manufacturing, but many innovations that are reimagining together how we can design, make, and move products in this world. Other tailwinds include our expertise in Industry 4.0 innovation versus broader innovation industry pace to adopt these innovations, the demand for modern software-driven experiences by our customers, mirroring consumer-like digital experiences, and also the need for more flexible and sustainable supply chains. These are tailwinds and opportunities which we are tackling and working to capitalize on. Now, on the software side, if you consider the market that's opened up by cloud manufacturing, the opportunity over the long term could become even larger. Similar to cloud computing as a platform for digital innovation, cloud manufacturing is a platform for manufacturing innovation, ushering in a new era of software tools and manufacturing solutions powered by the cloud. For example, our goal is to codify the world's manufacturing knowledge and make it accessible to anyone with a browser. So Fast Radius is building software tools that provide feedback on the manufacturability of a part that are complementary to existing design and engineering simulation software tools. Design simulation software is used by millions of professionals and represents a large addressable market that we expect our future products to complement. We believe these types of new software products and business models that are enabled by cloud manufacturing such as digital design assistance, digital parts storage, digital logistics, could create potential new pools of value and opportunities for us in the future. Let's now look high level at our first quarter 2022 performance. Our first quarter revenue was $6.3 million, up 65% compared to the same quarter of the prior year. We're also pleased to be increasing our 2022 full year revenue guidance. to $29 million to $34 million. This range would represent between 45% and 70% year-over-year revenue growth. Prith will cover our financials in more detail shortly, and I'll next cover our strategic initiatives. As part of our growth plan for 2022, we've previously communicated where we plan to focus our efforts and investments this year, which are as follows. We're focusing on enhancing our customer acquisition motions for both new customers and account expansion with a common theme of driving digital engagement. Second, we're focused on enhancing our user experience and digital workflows with our marketing, sales, manufacturing, supply, and product teams working together to improve the customer journey from beginning to end. Third, we're building out and optimizing our supplier network and marketplace. And fourth, we're seeking additional capital to help us meet our business needs and support our growth objectives. Our team has executed against each of these areas during the first quarter, and I'll describe our progress today. First, we made strides in enhancing our customer acquisition motion for both new customers and existing customers with account expansion with a goal of driving more digital engagement. Specifically, our newly formed digital direct sales team has helped to increase the volume of customers to our software portal and digital experience for our customers. We've developed a scalable self-serve experience for customers to order parts and engage with us. This team partners with our reorganized managed sales team, complementing their efforts in driving new customer acquisition. We also invested in digital marketing this quarter to drive users to engage with our platform earlier in the product development lifecycle through our latest software release, Studio, which we will discuss more in a bit. Second, we've been working towards enhancing our user experience and digital workflows. We released new features within our customer portal that have attracted positive responses from users and supplier partners alike, further demonstrating progress on our software strategy. We've expanded the suite of design for manufacturability checks for CNC machining, additive manufacturing, and injection molding. We have introduced auto quotation for 3-axis CNC machining. We have expanded inspection options directly available to our customers through the digital platform. We've also made foundational progress by continuing to automate workflows that improve our ability to efficiently support our customers. Next, we have been focused on building out and optimizing our third-party supplier network and on-demand marketplace to increase our manufacturing capacity. As we build out and optimize our platform, we are targeting improvement in a variety of areas, including faster lead times, improved cost, and access to an expanded set of manufacturing technologies. Specifically, over the last three months, we've expanded our partner network to include new suppliers, including in the U.S., Mexico, and Taiwan. We also released a new version of our supplier digital portal, which enables more streamlined interaction between customers and suppliers through the order and fulfillment process, such as suppliers being able to share capacity information, quoting and accepting jobs through the portal, and providing transparent production information about each job. We also created a digital onboarding experience for our suppliers to allow us to more efficiently add more suppliers and more capabilities to our marketplace. In addition, we revamped our marketplace operating model to allow us to more efficiently match customer opportunities with supplier capabilities. Lastly, we communicated the need to secure additional capital in 2022. We have been diligently evaluating potential options to obtain additional capital to help meet our business needs and support our goals of growth, and ultimately driving toward profitability. As Prith will discuss further in a few minutes, we have entered into an agreement with Lincoln Park Capital for issuance of up to $30 million of our common stock, which we expect will provide us with additional liquidity while we continue to work through additional capital raising options. Now, I want to provide more information on our innovative new software release. In Q1, we released significant new features in our FastRadius portal. We call this new offering Studio. In its simplest form, Studio allows design and manufacturing engineers to gather insights and recommendations about the part they're designing. This new offering helps FastRadius users discover opportunities to innovate, be it to save on product costs, improve product performance, or drive sustainability via new material choices. Specifically, users can now log in, upload their file, and evaluate their parts. The user can select from a different set of manufacturing technologies, manufacturing, CNC machining, or injection molding, and they can receive instant design feedback and recommendations. Users are also able to compare manufacturing methods, materials, design checks, quantity, lead time, and prices side by side in real time. We believe this is a significant improvement on traditional methods where individual engineers chase scarce and fragmented expertise to inform their design. Studio provides our users with efficient ways to get insight, design, and collaborate. Another great aspect of Studio is that it provides users with a seamless transition into the quoting and ordering process. If users are satisfied with their part design, they simply move their part into the quoting stage with just one click versus the traditional industry approach, which is highly manual, multi-step process to move from design to quoting and ordering. By providing upfront value in the discovery and evaluation phase of design, we believe it will help drive more potential customers to submit orders to make parts with Fast Radius. Now, I want to elaborate on how we're able to provide these insights and recommendations to our studio users. As we've previously discussed, a crucial part of our cloud manufacturing platform is our digital thread and learning engine. For the last five years, you've been making products in a state-of-the-art digital-driven network of factories, including our Chicago location, recognized by the World Economic Forum as one of the most advanced factories in the world. Our digital thread connects and collects data through every layer of our cloud manufacturing platform. Our customer software, driven experiences, our owned and operated factories, and our supplier network. With every part made, our learning engine can get smarter. Data is captured, codified, and that knowledge ultimately gets surfaced back into the upfront user experience. Studio connects all of these components and enables our users to access this intelligence through our platform. So what's the impact for our customer? Simply put, we're democratizing access to design tools for manufacturing parts. Traditionally, for an engineer to evaluate their part and compare manufacturing options, they have to communicate via multiple phone calls, emails, or other cumbersome and fragmented methods. With Studio, we are empowering engineers to explore, providing them credible insights, digitally storing that part if they're not ready to order it, and then ultimately reducing friction as parts move into production. We believe our ability to automate and provide a seamless experience for customers to move through this discovery, evaluation, and design process is not only great progress for the industry, but a differentiator for Fast Radius. We are cultivating a community of users for cloud manufacturing, which we see as an attractive lead generation engine and a way to build a pipeline of customers for parts revenue. We are thrilled to report that as of the end of Q1, over 10,000 users have signed up to use our platform, which we believe is a positive signal for digital engagement. In the future, we will explore opportunities to monetize our software, which we do not do today. Now I'll pass it over to Prith to cover the financials in further detail. Prith.