Nano Dimension Ltd.

Good day, ladies and gentlemen. Welcome to Nano Dimensions' full year 2023 results conference call. My name is Scott, and I'm your operator for today's event. On the call with us today are Yoa Stern, CEO and member of the Board of Directors, Tomer Pinchas, CFO and COO, and Julian Letterman, Vice President of Corporate Development. 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 press 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. Replay the company's website. The OAS 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 call over to Nano Dimensions CEO and member of the board of directors, Yoav Stern. Yoav, please go ahead.

Thank you, Scott. Good day, everybody. I hope everybody is watching this black and blue slide, which is opening. We can move to the next slide, discussing the forward-looking statement. I'm going to leave it on for a few minutes rather than read it for all of you like a just scan through it, I'm sure most of you understand what it says and it protects all of us from sliding into issues or information that is confidential and or not accurate. So we'll go to the next slide and here we'll start. I'm going to divide my presentation to a few kind of chapters, if you wish. First, I'll speak about the results, of course. Second, I'll speak about not our industry. I will call it our business domain, and you'll understand why I'm separating between industry and business domain as I get to that chapter. A little bit about customers and analysis of our, again, business domain as it relates to it. plans forward, a few words, and then the most important part will be Q&A in order for you to be able to express your areas of interest, which I will relate to as best as I can. So to start with, you see the highlights of 2023. Indeed, a fantastic year for Nanodimension. We grew 29-30% year-over-year, where the year before we grew even faster. We are by now close to $60 million of revenue. More importantly, or no less importantly, our gross margins are growing steadily, by now close to 50. We are showing improvements in almost all variables of the financial reporting of public company. I give them higher weight function to the fact that the gross margin is improving because this is the key to the door where profits, positive EBITDA and earnings per share. People have to remember, The world, the public markets are basically tired from companies that are just growing on the top line. Now, it's important to grow on the top line and we will continue to do so because in a funny way, if you don't have a top line, you don't have a middle line, you don't have a bottom line. Actually, a middle line is expenses. But we will focus through internal efforts as we did until now and through acquisitions deliver the dollars to the bottom line. Before we go into just numbers, just a few slides about break the routine of going just through numbers about success stories and case studies with customers. The first one is NASA, which is not the first time we're doing business with them. I'm showing these pictures not in order to divert the attention from the fact that The numbers and the financial reporting is what's important in these calls. Rather than having 25 slides of products, I'm just moving through slides, going back to the next one about the branch of the US Department of Defense. I'm showing those slides just to give you a little bit of a taste of what kind of customers and what kind of products we have, but It's not to divert the attention from the fact that this is all about studying the numbers. The next slide will show a Fraunhofer Institute, which is, I'm sorry, which is a very, very famous worldwide institute originated from Germany that is using our machines and they have also in a way tried to compete with our editing manufacturing electronics by developing their own machine, realize that our machine is much ahead, which is kind of a reinforcement when such an institute tried to do AME and eventually buys our machine. The next slide will tell you about an unnamed industry leader. Again, we have issues with giving the names of companies that we are selling them, especially when it's very large transactions. In this case, this is an industry player in the space area, and we have a successful combined sales to them. The next slide speaks about very large Western computer manufacturer, hardware manufacturer. All of you know the names. Also, multiple machines, we sold them. Next slide is Western Nuclear Research Group. The next slide is starting with description to you about how and what we reached that made these customers excited enough to buy machines and multiple machines. So this speaks to the product and R&D development. I kind of broke it down while there's many more achievements this year. I broke it down to what is kind of highly important for you to realize. First of all is DeepCube, of course, which is advancement in deep learning, machine learning, and applying all what you're hearing in this field in the general world into industrial applications. It's a very specific use of AI, and the AI has to be very, very advanced because it does interpretation not only of raw data, which is not language, not more complicated than languages, but it does interpretation of alphanumeric, which is not language. So it's more complicated than language because it doesn't have the rules that language has. And we are able to do it and install it in machines and improve machines dramatically in so much as maintenance, accuracy, repetitiveness, and eventually throughput. We have new machines from Fabrica. We have a very serious development in our Flight Hub, which is the software that really drives everything. I gave this example in the past. When you think about developing a story, you write the story on your word processor, and then you convert it into a PDF, be it a story or a legal document, and then you send it to your lawyer or you send it to the publisher. because you wrote the book, you don't really know and don't really care, frankly, what is it printed on. It's printed on the printer that happened to be at your lawyer's place or at your company's other location or at your publisher. What you're exposed to is the software with which you are using in order to design the document. The same thing we identify in the editing manufacturing. Everybody will talk to you about robotics. Everybody will talk to you about machines that are doing this or doing that. At the end of the day, this industry will be led by the applications of software that enables people to design, redesign, prototype, negotiate a transaction, see the transaction happening, and eventually it will be printed somewhere. So this business domain, the way I call it, and again, I'm getting close to explain to you what I mean by business domain, is led by two variables, two forces. One is material and process, because without the right materials and process, there's no printing, and not proper printing of products in mass manufacturing. And the second is the design software for those printers, not designed, we're not going to replace electronic design software or mechanical design software. We are adding the software that enables the designers to use advanced printers. But eventually, once they do that, the software is what will be in front of them. The next slide. By the way, Additive Flow is another company we bought, which is part of this sophisticated software that enables the design and the analysis, finite element analysis of every design. Next slide is the growth. This is back to numbers. This slide shows every column is the last 12 months for that date. So if you look on the left, it's Q4. First column is Q4 2020, which means it shows the full year 2020 results. It was the year I joined and the corona joined us as well in the same year. And if you look at the column on the total right side, on the extreme right side, it shows Q4 2023, which means it's the result of the last 12 months until that date, which means full year 2023, which we're reporting today. And you see the growth. It speaks for itself. It's a very unique situation. There's no company in our business domain that is showing this over the last four years. Next slide is, finally we get to the chapter that will speak about our quote unquote industry. What you see in this slide is the Nano's growth comparing to, we chose four peers here, five peers actually. You see that during 2003, every one of our peers has lost revenue comparing to the year before. We're the only ones that not only growing, but growing leaps and bounds. Now, why is it not an industry? This is not industry players. Let me explain to you a very, very important point here that I think our compatriots are missing. Mark Forge studies this test of metal 3D systems. Actually, it is four competitors and one average, not five. I'm sorry. But it's worth probably five, six more public competitors. They're not really competitors. They're participants in a business domain. We don't see them in front of customers. We don't see them competing with us. And the reason is, it's not really an industry. This is a business domain of companies that use similar technologies to manufacture or produce, call it parts or items. Similar technologies, not the same. Some use additive manufacturing in three-dimensional polymers, FDM as an example. Some use DLPs. Some use, like us, use additive manufacturing electronics by inkjet for PCBs. But the reason it's not an industry is because an industry is set by who do we sell to. And we sell to vertical markets that are different, some overlap. But an industry, for instance, is the space industry, or the industry is aviation, or the industry is medical, and others, electronic cars, or just automobiles, or the energy industry. Those are industries. We are in the business of selling machines to different industries. So you cannot say there's a headwind in our industry because, for instance, the defense industry didn't have headwinds this year. So all the competitors are saying they're shrinking because there's headwinds. There's no headwinds. It's just for one reason or another, their revenue in selling into different industries has shrunk, either because the industry is not big enough or the market is not big enough or... because there were some issues with the sales and marketing, or the product was not fit for the product market fit. But there's no industry hindrance when you speak about additive manufacturing. Additive manufacturing is a bunch of technologies that are all acting in the same business domain, and the business domain is where we develop and manufacture the materials and the machines. We sell it to different industries. In a certain situation, The defense industry may have a headwind and our sales in defense will shrink. Not the case today. It's actually the opposite. In our case, we're saying the electronic industry. Electronic also is a domain because electronic exists in computer, electronic exists in space, electronic exists in medical, electronic exists in everything. It's not an industry. It's a business domain. I overspoke about this and I hope people understood it. And that's the justification for my claim. There's no headwinds. People who sell like competitors to the dental industry, which is an industry, may have headwinds in the dental industry and may not. But what is that to do with defense? Okay, next slide is reshaping nanoproblem. In spite of us or our growth, We decided to reshape Nano, and that's to do with expenses. Cut expenses in a very dramatic manner. We did it in the second part of Q4 2023, which means only one quarter ago, and we reduced between $25 to $30 million in our annual cost. Our cash burn, look at it in the last three years. It's going down from where we we're in the midst of development of everything we're doing today, into 2023, which went down almost by 50%, and it goes down now into 2024 by almost 80%, and I'm talking now about Q1, which is already in the pace that we're discussing. I mean, obviously, the rest of the year is ahead of us, But we expect to be between 12 to 20, 24 million dollars in the worst case cash burn. And that's considered the fact that we have a billion dollars in cash. It's not even a variable in so much as our survivability or ability to grow, our ability to deliver value to the shareholders because we are very well financed. We have If we end up with $10 to $12 million cash burn a year, then a billion dollars in cash, which is going to be used for acquisitions and for R&D, we're in excellent, excellent shape. Having said that, I don't want to go back on the slides, but every entity in this business domain that I described to you is losing cash and not having cash. to lose more. So let's speak again a little bit about the environment of our business domain. There's about 10, 12 public companies in this business domain. Some of them are large institutions, large organizations like HP and General Electric. But if you summarize this industry, the claim of all these analysts is the industry is $15 billion, give or take, growing to $30 billion in 2030. Well, first of all, it's not an industry again. because it's combined from 10 different industries that are growing or not growing. Our business domain grows. Well, let's speak about which business domain we really are. We are manufacturing machines and materials. Out of this $15 billion, there's no more than $2.5 billion of companies like us, and it's growing. But all of them are losing money, maybe other than one or two which are private, so I don't know the exact numbers. but I have an estimate based on talking to them. And all the publics are losing money, and all the public companies have no more cash for more than, at the best case, a year and a quarter in one case, and all the other cases are less than half a year. So there's no surprise where the shares are traded. The only surprise is why are we traded below our cash, but that's a different story. Next slide speaks about the replenishing and repayment. the stewardship of the stewardship I would like prefer to call it corporate governance replenishing our corporate governance and capital allocation. Corporate governance is as we grew becoming more and more serious company rather than a small public company like a biotech that is mostly focusing on technology we start to focus on corporate governance on the fact that we have to fit the corporate governance to the size and growth of the company we split the roles of me being a ceo and a chairman which was not something i liked anyhow because there was no choice when we were smaller in the corona days we brought dr yoav nissan cohen a great background in semiconductors industry and the ex-ceo of tower semiconductors we refreshed our board membership by reducing it by two people that we requested to leave because they were not fitting a serious professional organization in the American market. But we had to replace them with the four-star General Garrett, the ex-commander of the U.S. Army Command, with a lot of experience in a very large organization. On the capital allocation side, did not buy large companies, not because we didn't negotiate, we do, we did, but because the prices were not right. So we get to the point today where the prices are becoming right because of what I told you today. All our competitors are basically having reduced time and very strictly defined time to live if they continue to lose cash and have no cash. And if they will raise money, they will dilute the existing shareholders. So while we had the cash and didn't spend it, we decided to spend close to $100 million to purchase our own shares at below the cash value, which improves the company's balance sheet and enterprise value. And we approved for ourselves another above the 96 million which we already spent, another $200 million of potential buyback, which if we use it, it will be when the shares traded below cash value. At this point, about 25% below cash value. And we will balance, the board will balance its decisions the use of capital between acquisitions, buyback shares, and investment in R&D and go-to-market in order at the end of the day to have enough cash to bring value to the share as expressed in share price and as delivered to the shareholders. That's our plan for the next year. At this point, I spoke enough, 20, 25 minutes. I would like to give the baton back to Scott to manage the Q&A session.

Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. And our first question today comes from the line of Ashok Kumar with Think Equity. Please go ahead.

Thank you for taking my question. The first question is broadly in terms of your cash flow and and reshaping in nano. So you have the 15 million quarterly run rate, 50% gross margins, a million burned per month. So what's your path line to profitability? Two is capital allocation. I think you talked about a billion in cash and generating about 4 million a month in interest income. And can you talk about a strategy beyond cash buyback. The third question is you talked about business domain. Specifically, you talked about material process on one hand and design software on the other. Do you have the capacity in-house at this point to be an industry leader where you forecast the industry to be some years from now? The last question is on the industry, which is business domain versus industry, you know, you make the distinction there. Clearly, you don't want to be the last man standing. You talked about continued burn rate and lack of balance sheet support with your competitors. And an industry is critical because it's more than the sum of the parts. And so when you see the industry also over the forecast horizon. Thank you.

Okay. I counted five questions. I frankly didn't answer the fifth one, but let me answer the first four. And if after the first four I didn't answer the fifth in between, then of course I'll let you ask it again. And thank you very much for your questions. First of all, if we burn $1 million a month or between $1 to $2 million a month, it will be the lowest cash burn this year that we had. It's not... going to be the target to stay on. Profit will come and cash flow burn will go to zero or start to generate cash, we believe, in 2025. And it will be dependent on two variables that are complementary to each other. Either we increase our gross margin to around 60% with no acquisitions then we'll be profitable and cash flow generating. Or we do the acquisitions we're planning and negotiating as we speak because the price will be right. Use some cash, of course the cash we have for the acquisitions. And then being bigger will enable us, depends on the specific acquisitions, to be profitable even in less than 60% gross margin. That said, being profitable means while continuing to invest in R&D and continuing to develop both materials and process and the software that I mentioned before. Of course, you don't... First of all, I do want to be not the last man standing, but the first leader standing. And in order to do that, I have to have the profitability. Now, the profitability doesn't only mean that there's a positive EBITDA earnings per share. Profitability that comes from gross margin means I have enough money to spend on R&D to stay ahead of my competitors. And at 60% in around $100 million of revenue between 70 to 100, we can be profitable and invest in R&D and grow because of the competitive edge we're creating. And At more than $100 million, if we do the acquisition, it will be much more. You can actually do it with gross margins a bit lower because you have synergies between the businesses and you continue with these gross margins to be able to deliver both profits to investors and enhance value and to continue R&D to enhance competitiveness. And that's much beyond buyback. The cash buyback is as temporary as it may be, and I am not for cash buyback in principle. I am in cash buyback only in very unique cases. I'm against cash buyback for a company that's growing the way we are growing and we will grow. When do you do cash buyback? Probably one or two cases. One, like cases like us, For some reason, the share is traded below the cash value. And the second is you have so much cash on the balance sheet and you're profitable and the cash is growing, i.e. companies like the gentleman from Omaha or companies like Apple that have $1.160 billion, if I remember right, or something like that. I don't remember the exact number. And then when you have so much cash and you don't use it, buying your shares depends on its price. from your profits is something that makes sense because you're improving the value on a per share basis by reducing the amount of shares that traded. And your fourth question is our capacity to stay as an industry leader or to become an industry leader. Our capacity to do that will come through a smart, very smart acquisitions. And in order to be smart in acquisition or acquisitions, I should say by now, The other side that is selling has to be smart enough to realize that they have to put egos aside if they want to be the right stewards for their shareholders. And this business domain is so full of egos that through the SPAC mania of last year and the years before, the companies got to the point where All of them went down from $10 a share to less than a dollar. All the public companies that came from SPACs. And they stayed still doing it and continue to doing the same thing. That's not smart when you have six months to live based on cash burn. And in order to be an industry leader, we need to consolidate. We need to put our egos aside and get together. either in a competition manner, combination of cooperation and competition, or through merger and consolidation, which is much more effective. That's what will create a situation where this industry will move forward, because without being profitable, having a $15 billion industry, and again, taking it down to the manufacturers and development of the technology, which is $2.5 to $3 billion, if it's not profitable, it's not going to hold for too long. But because it's such an enabling technology, it will hold because there's no replacement for this technology or technologies, I should say. We just need the people to wake up in the morning and start to think about working together. Fifth question, I don't remember, but I hope I answered through my long answer to the fourth.

Yes, you did. Again, thank you very much and best wishes.

Thank you. Any more questions, please?

The next question comes from the line of Sol Zellman with CherryCare. Please go ahead.

Good morning, Yoav, and thanks for the information shared on the call. Really great on the presentation. Great quarter results. I have two questions, one largely based on the press release shared this morning. the forward-looking strategy of going towards the NNA strategy, I see that strategy of waiting to see what will happen has paid off, especially based on the valuations of the peers that you mentioned going down daily. The question is, based on that press release, and given those dynamics and even egos among those other 3D printing companies, would it be... better place to possibly wait and purchase them through bankruptcy proceedings? Or is it a better idea to continue going through it? For example, I had seen that Stratis' deal was up in the air. I did see in the presentation, I see them dropping daily. I even see, for example, another one, DM currently, based on their Q4 cash numbers, coupled with the stress in the bond market, DM currently is trading at 50 cents on the dollar. It looks like you won't have long to wait. Is the strategy to go for it now, or yes, to wait a little bit, just to see if they go towards the bankruptcy proceedings, allowing that strategy to fully pay off?

Okay, that's an excellent question. Both companies that you have mentioned indeed are burning cash. Stratasys has burned about $160 to $180 million during 2023. They started the year with above $300. They have left with $160. And if they keep burning at the same rate, they will probably need to raise money or take debt. I don't think they'll aim to go to Chapter 11. Stratasys is a serious company. And I think they have good prospects for the future if they do the right thing, which they're not doing right now, but they are smart people. And we are the main shareholder of Stratasys, so I have a very serious interest. So these are not at the risk which you described. The others do. Sorry, the others are at the risk, exactly what you described. If they continue to play the game on their own, You know, it's like soccer or, you know, you want to play soccer with 11 against 11? That's great. You want to play soccer where you're alone in the field and running with the ball? Good luck. Because that's what will end up. You'll end up with three or four players running on a soccer field with a ball to each. And then what do you do? The chapter 11 is not something I want to wait for. I've been myself a turn-on executive and I've done chapters 11 as a person who came from the outside to fix the situation. I was successful in a couple of them, but it's a very difficult process. We are dealing with an industry that with customers like NASA and SpaceX and we specifically have a lot of defense customers and the other competitors have defense customers Those customers will have serious issues to continue and buy from a company that's in chapter 11. Chapter 11 is a process that takes at best six months, at worst more than a year. And I expect that in sensitive equipment like this and sensitive industries that we're selling to, what you gain by maybe buying what's left is lost by what's left is far from what is before they go to Chapter 11. One of the companies in the industry called Fast Radius went already to Chapter 11 and it immediately turned into Chapter 7, which is liquidation. This company, we were the last one to do due diligence and to consider buying them. We did a very serious due diligence and it ended up that we said, there's nothing here that's worthwhile paying what they wanted to. Again, ego's issues. And the minute we said no, they went to Chapter 11. I was sorry for them, but from Chapter 11, some company bought their assets, like 20 or 30 machines that they had, and the company disappeared, and everything they had in technology disappeared. So no, I don't think waiting for Chapter 11, even if I have to pay 10% more, you will gain much more than having to deal with the breakage and loss of business that you will have to deal with after Chapter 11.

The next question comes from the line of Catherine Thompson with Edison. Please go ahead.

Hi there. I wanted to ask a question about your revenue growth in the year just gone and also the outlook for the coming year. So just to get a sense of how much business did you get from repeat purchases from existing customers? How much was new customer wins? How much is system sales versus consumables? And really just to get a sense of how much more you think you can grow in 2024. And then just a second question on consolidation. Clearly, you've got the bid in for Stratasys at the moment, and we're still waiting for the outcome and their strategic review. If that's a no, what would your plans be?

What was my, sorry, the last sentence? What will be my what? Our what?

What would your plan be if Stratasys says no? I'm assuming you've got various other companies that you're considering for consolidation.

Yeah. Okay. Okay. Got it. Got it. Very good questions. Thank you very much. Okay. The revenue growth for... First question, you asked three questions or so. The revenue growth in 2023 was... To be fair to ourselves, we're very proud of 29% organic growth, but our budget was 60. We were 5% below our budget, which we debriefed and we learned and studied because as much as I am concerned, if we put a budget of 60 and we reach 56 and a half or so, then obviously we're 5% below budget. Yet it was a great growth and fantastic year, but I would like to build an organization that stands by the budget. That leads us to 2024. If we assume no acquisitions, because if you assume acquisitions, our growth will be stratospheric. Our growth will be in multiples, not in percentages. That's based on the acquisition I'm talking with now. But if we're assuming with no acquisition, our growth, as we expect, will be lower than 29%, but higher than 15%. And we are working that according to the budget today. Our first quarter, which is usually the worst quarter of the year, our first quarter this year is going to be not bad at all. because it's growing, but you don't know by the first quarter to say what will be in the end three quarters later, but we're starting the year on the right foot. Next question was about systems, consumables, repeat sales, etc. Our consumables is about 10% of our revenue. It depends on which area. I'm speaking about 7% to 10% of the machines that we do sell consumables to. There's machines for additive electronics, for instance, that we don't sell consumables because the consumables are components and semiconductors, and there we don't sell the consumables. So there the consumables is zero. But in the areas that we do sell consumables is 5% to 10%, and that number usually grows up and higher once our machines are going into production rather than being in prototyping and early production testing. But for now, it's about that percentages. As much as repeat sales, this year we had more repeat sales than we ever had in the history of the company. I mentioned a few of the repeat cells during the presentation. I don't remember offline, without looking at it, how many repeat cells. It's not the repeat cells, it's additive cells because you don't repeat the same cell. Some companies we have, for instance, bought our additive manufacturing electronics and afterwards bought our additive electronics machine. So it's repeat as much as the same customer, but it's not necessarily repeat of the same company, of the same machine. Then other companies in defense that bought our Dragonfly AMA machine bought more Dragonfly machines. So that exists across the board. The last question, you discussed the consolidation and you used strategies as an example. We are in discussion with strategies. friendly discussions. We plan and we hope to be able to come back to you, to the investors, to the market with some news about something that we would definitely plan to do. It's a bit early. The discussions are ongoing for the last three months and serious. But, you know, strategies have There are alternatives and I have my alternatives. And my alternatives, which was your last question, are very attractive comparing to Stratasys because those are companies that are in more closer to the corner, call it this way, than Stratasys with technologies that are more exciting than Stratasys, to me, to us at least. Yet, I must admit, with less go-to-market and distribution and network with the way Strategies has, which is excellent, but with much more exciting technologies, Strategies technologies are a little bit outdated to my taste. So we have alternatives, and we are pretty advanced in negotiations with alternatives. Thank you very much for your questions. More questions, please?

Yes, our next question comes from the line of Rami Roush, a private investor. Please go ahead.

Hi, can you hear me?

Yes, Rami.

Hi, thank you for the presentation. I have two questions. The first one is regarding your revenue. I wanted to get your view on the current dynamics in the 3D printing industry. Do you see the gross margin improving? The second question is... Obviously, revenue is no longer the catalyst anymore. Sometimes it becomes a liability on low margin sales. I'm referring to the peers. In your opinion, did we hit the low cycle by now? Thank you.

Okay.

Let me start with a second question. This industry, again, this business domain, call it, which is the group of companies that incorporate various technologies to print in three dimension products that belong to many other industries. So this business domain has been in a kind of traumatic process for years now, at least for the last 10 years. of pushing and fighting each other by reducing margins in order to fight your competitor or in order to convince the market that this new technology is good for them. That ends up with the company without naming names, for instance, that has been selling quite serious, serious, serious laser machines, laser 3D printing machines to very serious customers and industries and showing 6% gross margin. That means that every dollar they sell, they lose probably 30 cents. And maybe they're trying to compensate it with quantities, but that actually doesn't work, as you know, because if you sell more of what you lose with, you just lose more. And this is an epitome in this industry. Other companies don't think that 6% is gross margins and exception. There's other companies that gross margins is between 15% and 25%, which is unacceptable. I'm speaking about, again, people who do R&D. I'm not talking about companies that manufacture using those machines to manufacture parts. That's different. You can live with 35% because you don't do R&D. So the... revenue being liability you're right this industry is or this business domain has been in this mentality i'm not we are not and i think the the whole business domain is starting to wake up to to listen to hear the music it's a part of the maturity of the technology and and the companies around us and again consolidation will help dramatically that was your second question Now it goes back to your first question, which was the dynamics in this business domain and gross margins, which is connected to the second question. I don't think the dynamics has already drove the numbers up the way they should, but they're in the right direction. If you look at certain companies in our industry, again, without naming names, there's one public company that have, like us, 47, 46% gross margin. Stratasys has 43, 44, and it's combined of mixture of product and materials. When in certain areas, they have much higher gross margin, which is good. Similar, maybe 3D. So some of the more senior executives that are running companies in our industry are realizing what we're discussing here, and I think they're going in the right direction. I think without consolidation, it's not going to hold for too long because they're still busy focusing on the top line instead of focusing on the bottom line. But it's in the right direction. Next question, please.

Again, if you have a question, please press star then one. The next question comes from the line of Rami Reddy with Private Investor. Please go ahead. Thank you for taking my question.

Are you expecting any analyst coverage in the near future? I want to expect, I expect to expect, and I'm very, very busy creating a situation where my expectations will be fulfilled. I'm doing it in many ways. It's important. It's important in order to attract institutional investors. It's important even if all the analysts that I see in this industry writing analyst reports with lacking real understanding of where the numbers are going and where the value of the shares are going and giving inflated expectations. But still, even if it's the case, it's important that this analyst or that analyst or a few analysts will write the report because the important part of the report is not necessarily the projection of the price of the share. It's the understanding that's inside the report of the business of the company and the business dynamics of this domain. And for that, analyst reports are extremely important to attract the right investors. And I'm making an effort on a monthly basis to get them to write. And the problem is that usually analysts start to write after their bank has been involved in a transaction of raising money. And we do not expect or we didn't raise money over the last two, three years, we have enough money, but it's coming. It's coming, the fact that analysts are starting to see us as a consolidator, they will start to follow us.

Thank you.

Next question, please. Scott, any more questions?

The question comes from the line of Mosh. Sorry, I apologize, we do not have any more questions in the queue. At this time, I would like to turn the conference back over to the company for any closing remarks.

Okay, thank you very much, Scott. Thank you very much, everybody that was on the line. I hope that the fact that we take it as a methodology not to have this conference call and read to you the news release, because that one you can read by yourself, but rather run it as an open discussion when We speak to you about what we want to speak with you, and we are mostly focused on talking to you about what you ask us. And I hope this format is good for you rather than just reading from a page what is the user list. Any questions, any requests you have for me, you know my email, you know my phone number. It's, of course, Julian, Tomer, Moshe, and we'd be happy to talk to you offline. Thank you very much.

The conference has now concluded. Thank you for attending Nano Dimensions Quarterly Earnings Conference Call. You may now disconnect.