Shapeways Holdings, Inc.

Good day and welcome to Shapeway's second quarter 2022 earnings call. All participants will be in listen-only mode. If you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be opportunity to ask questions. Please note that this event is being recorded. I'd like to turn the call over to Ms. Nikki Sachs. Please go ahead.

Greetings and welcome to Shapeway's second quarter 2022 earnings call. At this time, all participants are in a listen-only mode. The question and answer session will follow the prepared remarks. As a reminder, this conference is being recorded. Before we get started, I'd like to remind everyone that management will be making statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical facts should be deemed to be forward-looking statements. All forward-looking statements, including, without limitation, statements regarding our business strategy, future financial and operating performance, projected financial results for the third quarter of 2022, expected growth, impact of recent acquisitions, new offerings, and market opportunity are based upon current estimates and various assumptions. These statements involve material risks and uncertainties. that could cause actual results to differ materially from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a description of the risks and uncertainties associated with our business, please see the company's SEC filings, including the company's quarterly report on Form 10-Q for the quarter ended June 30, 2022. The information provided in this conference call speaks only to the broadcast today, August 12, 2022. Shapeways disclaims any obligation, except as required by law, to update or revise forward-looking statements. Also, during the course of today's call, we referred to adjusted EBITDA, which is a non-GAAP financial measure. There's a reconciliation schedule showing GAAP versus non-GAAP results currently available in our press release issued after market close, which can be found on our website, shapeways.com. On the call today are Greg Kress, Chief Executive Officer, and Jennifer Walsh, Chief Financial Officer. And now I'd like to turn the call over to Greg. Greg?

Good morning, everyone. Thanks for joining us to discuss Shapeway's Q2 2022 financial results and progress during the quarter. I'll begin by providing a business update and share the progress that we have made with regard to our strategic growth plan. Jennifer Walsh, our CFO, will then discuss our second quarter financial results and outlook for the third quarter. There is a tremendous opportunity in the $40 billion digital manufacturing market, and we believe Shapeways is ideally positioned to capture share of this expanding market. We combine high-quality, flexible, on-demand manufacturing with purpose-built proprietary software that enables our customers to rapidly transform digital designs into physical products. We are helping to modernize manufacturing for our customers and drive efficiencies across the supply chain as we help accelerate the digitization of manufacturing across a broad network of suppliers and buyers. In the second quarter, we continue to make tangible progress on each of our four key growth initiatives, which include one, the expansion of our additive manufacturing capabilities, two, executing a comprehensive go-to-market strategy, three, expanding our manufacturing service offering to include more traditional manufacturing processes, and four, commercializing our software. We are confident that as we continue to execute on this strategy, we will extend Shapeway's leading position. In terms of our first initiative, expanding our additive manufacturing capability, we've made significant progress in further enhancing our internal offerings, including investments in new hardware technologies, materials, finishes, and certifications to support enterprise customer needs. This expanded offering broadens our addressable market to serve a wider spectrum of existing customer needs and positions us to add new customers to the Shapeways platform. Specifically, we added EOS direct metal laser centering and GE ARCAM electron beam melting printing to our internal manufacturing capabilities, which now enables us to provide industrial precision metal printing. We expanded our HP MultiJet Fusion footprint to the US, which enhances our ability to offer plastics printing. Additionally, we now offer ITAR-registered manufacturing capabilities and have brought on an additional ISO 9001 certified manufacturing location with the linear AMS acquisition we completed in Q2 and discussed on our last call. By offering a full range of capabilities, we have broadened our addressable market, offering enterprise customers in our target market access to industrial-grade additive manufacturing capabilities. In our second growth initiative, expanding our go-to-market strategy, we are starting to win new business while building our pipeline with enterprise-level customers in key verticals such as medical, aerospace, automotive, and industrial. An example of this is Microsoft, who we have partnered with to support their ecosystem initiative to make hardware accessories more adaptive and accessible for people with disabilities. We're encouraged by our growing pipeline and the positive feedback we are hearing from prospective customers. While the sales cycle associated with this type of enterprise customer is longer than our historic self-service business, we expect to accelerate these sales over time given our strong business development team and the compelling value proposition we offer our target verticals. Our third growth initiative is expanding our manufacturing service offering to include more traditional manufacturing processes. We have ramped up the development of our outsourced supply chain capabilities to support traditional manufacturing with the MFG acquisition we completed in the second quarter and discussed on our last call. MFG broadens our supply chain network in traditional manufacturing and adds an important complementary element to our software solution. MFG's core business is to enable custom part manufacturers to grow their business by making it easy for them to be discovered on its cloud-based request for quote management platform. The MFG business also helps buyers to find the best possible manufacturer that fits their needs through a set of supplier and buyer marketplaces. The MFG supplier network provides Shapeways access to thousands of suppliers with hundreds of manufacturing services covering molding, machining, and sheet metal. This provides Shapeways with a comprehensive manufacturing capability that we believe better position us to capture multiple benefits, including a greater share of our customers' wallet, access to new customers, and the potential to cross-sell those customers with Shapeway's in-house additive manufacturing services. The fourth key component of our strategy is the commercialization of our software offering. In the quarter, we continued the rollout of our auto software as a service, or SaaS offering and completed the acquisition of MFG and MakerOS, both of which are expected to further accelerate our product development roadmap and provide us with a strong lead base to offer our software. Our proprietary purpose-built software is one of Shapeway's key differentiators, and it represents an exciting opportunity to grow our revenue. Our software digitizes and removes the friction from the end-to-end manufacturing process and manages complex workflows, which enables efficient, high-quality manufacturing at scale. It tracks every step of the process and efficiently manages dynamic, ever-changing customer requirements. This optimizes the cost associated with manufacturing a part and, in turn, maximizes gross profit. Truly a compelling value proposition for a wide array of additive and traditional manufacturers. Beyond the addition of MFG, we further strengthened our software offering with the second acquisition of MakerOS. MakerOS offers a SaaS service to facilitate design, prototype, and production processes for manufacturers and service providers. MakerOS has a scalable platform and advanced tools that brings complementary features to the auto SaaS platform, including enhanced project-based quoting, project management tools, and customer collaboration and communication tools. Beyond the complimentary software component, both of these acquisitions bring an installed base of customers on which we expect to continue to build and expand the Shapeways relationship. Ultimately, we expect to grow revenue through both manufacturing as we capture orders with those customers and through continued rollout of our auto SaaS offering. In short, these acquisitions have the potential to both increase our customer base and our addressable market, as both are expected to accelerate our product development roadmap. We are currently focused on the integration of these product offerings and scaling access to them through the remainder of the year, which gives us an opportunity to monetize them in the near future. In addition, the Shapeway senior leadership team has been expanded to include chief operating officer, general counsel, and senior functional leadership positions in product, engineering, sales operations, marketing, and finance. These roles are focused on deepening the senior leadership team and supporting the execution of our strategic growth plan. Finally, we're thrilled to welcome Raj Batra to our board of directors. He has more than 20 years of experience in industrial automation and digitization and currently serves as the president of digital industries at Siemens USA. He brings expertise across sales, marketing, digital consulting, R&D, vertical industries, and manufacturing aspects for digital industries. and we are already benefiting from his insights and network. We will continue to focus on what we control, which is the strategic priorities that we have outlined. At the same time, there is no denying increased global and macroeconomic uncertainties. While this environment could result in near-term pressures as customers delay buying decisions, we believe it has potential tailwinds for Shapeways as strategies around managing supply chain continue to shift. Two overarching trends which should benefit us are one, a continued push towards nearshoring and shifting manufacturing back to the US and two, building additional flexibility and agility in the supply chains to offset the impact of potential disruptions. Active manufacturing has potential to enable these market shifts and Shapeways is particularly well positioned to benefit. Shapeways is modernizing manufacturing and our digital manufacturing platform and software fill an important and growing need, providing customers with access to high-quality, industrial-grade modern manufacturing at scale. This allows our customers to utilize innovative manufacturing capabilities without making significant investments internally in CapEx, labor, knowledge, and software. We have successfully provided these services for years through our self-service model, and we are continuing to evolve our focus towards enterprise customers which we believe expands our opportunity to deliver long-term growth. We are making tangible progress as we execute on our opportunity to capture and expand our market share using our highly scalable digital manufacturing platform and software. I would like to thank the entire Shapeways team, our investors, and all of our stakeholders for their ongoing support. Jennifer will now discuss our financial results in more detail. Thanks, Greg.