Desktop Metal, Inc. Class A

Greetings and welcome to Desktop Metals First Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Jay Genskow, Vice President, Investor Relations. Please go ahead.

Thank you, and thanks to everyone for joining this afternoon's call. With me today are Rick Fulop, CEO, Chairman, and founder of Desktop Metal, and James Haley, CFO of Desktop Metal. Please note that our earnings press release and presentation slides referred to on this call are available under the events and presentation section of our investor relations website. This call is also being webcast live at the same investor relations website. The webcast and accompanying slides will be available for replay for 12 months following this call. The content of today's call is the property of Desktop Metal. It cannot be reproduced or transcribed without our prior consent. Before we begin, I'd like to refer you to slide two of the presentation, which contains our safe harbor disclaimer. Today's call will include forward-looking statements. These forward-looking statements reflect Desktop Metal's views and expectations only as of today, May 17th, 2021, and actual results may vary materially based on the number of risks and uncertainties. For more information about the risk factors that may impact Desktop Metal's business and financial results, please refer to the Risk Factors section of the Annual Report on Form 10-K, as amended, in addition to the company's other filings with SEC. We assume no obligation to update the forward-looking statements. Additionally, during this presentation or the following Q&A session, we may refer to non-GAAP measures, including EBITDA, adjusted EBITDA, and non-GAAP gross profit. These measures are intended to supplement but not substitute for performance measures calculated in accordance with GAAP. Our earnings release contains the financial and other quantitative information to be discussed today, as well as the reconciliation of the GAAP to non-GAAP measures. With that, it's my pleasure to turn the call over to Rick Fultz, CEO and founder of Desktop Metal. Thank you, Jay.

Good afternoon, and thank you for joining Desktop Metal's first quarter 2021 earnings call. I'm very pleased with our progress since we last spoke with you, including the results we delivered in our first quarter of 2021. We're building desktop metal for the long term, and some of the investments we have made over the past several months into becoming public reflect that thinking. As we presented previously, analysts estimate the additive manufacturing market will scale from $12 billion at the end of 2019 to $146 billion by 2030. We have focused our business to capture what we believe is the biggest opportunity driving the growth of this market, the volume production of end-use parts, or what we've defined as Additive Manufacturing 2.0, or AM 2.0 for short. We're well positioned to execute on our strategic vision in AM 2.0, and we expect to be a major player in this space. We define success by achieving a double-digit share of the added market by the end of this decade. And every strategic investment we're making today has that goal in mind. I'd like to start today by reviewing our key accomplishments from the first quarter before highlighting how our product portfolio and technology differentiates itself in the added market. And then go into details about some of the exciting recent developments in the business. After my remarks, James is going to cover financial results for the first quarter. I'll start on slide three with a quick review of our financial highlights. We're very proud of the execution of the first quarter, delivering revenue of $11.3 million and a sequential increase of 35% over the fourth quarter of 2020 and 234% increase year over year. Additionally, our margins continue to strengthen with first quarter 2021 adjusted gross profit of $3.3 million from prior year and significantly after the fourth quarter of 2020 as well. We expect continued margin expansion and plan to exit the year with greatly improved margins as we gain leverage over fixed costs. Now let's move into the business highlights for the quarter. In Q1, we saw accelerated market adoption of our metals business with a variety of major customer additions. We announced a key partnership to introduce 6061 aluminum into binder jetting with better-than-rod properties, a major milestone for the company that opens up some exciting use cases in industries such as automotive and consumer electronics. As we last spoke, we expanded our materials library from 190 to 225 materials today. Materials are a key enabler for end-use part mass production, and we have one of the broadest libraries of materials cutting across metals, polymers, continuous fiber composites, ceramics, and now wood and elastomers as well. This growing materials portfolio is 100% focused on end-use part production. Customer adoption also accelerated this quarter across various AM 2.0 platforms.