Shapeways Holdings, Inc.

Good morning, and welcome to Shapeway's third quarter 2022 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Nikki Sachs. Please go ahead.

Greetings, and welcome to Shapeway's third quarter 2022 earnings call. At this time, all participants are in the 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 would like to remind everyone that management will be making statements during this call that include forward-looking statements within the meeting 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 fact 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 fourth quarter of 2022, expected growth, Impact of recent acquisitions, new offerings, market opportunity, and plans for compliance with the NYSE's continued listing standards 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 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 September 30th, 2022. The information provided in this conference call speaks only to the broadcast today, November 15th, 2022. Shapeways disclaims any obligation except as required by law to update a revised forward-looking statement. Also, during the course of today's call, we refer 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 at shapeways.com. On the call today are Greg Kress, Chief Executive Officer, and Alberto Recchi, 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 Shapeways' third quarter 2022 financial results and progress during the quarter. I will begin by providing a business update and share the progress that we have made with regard to our strategic growth plan. Alberto Recchi, our CFO, will then discuss our third quarter financial results and outlook for the fourth quarter. During the third quarter, we continued to focus on executing our key growth initiatives while integrating the three strategic acquisitions we completed in the first half of the year. We are pleased to have delivered almost 10% revenue growth from the prior year period as we begin to realize the benefits of our strategic initiative. We remain focused on profitable growth, aligning our resources with the highest opportunity areas to drive revenue growth while tightly managing our cost structure. I would like to specifically call out our continued focus on the commercialization of our software offering, as we are seeing strong momentum and progress. Shapeways was created to fully digitize the end-to-end manufacturing process. In order to accomplish this vision, we developed a proprietary software platform, which gives us the ability to deliver high quality, low volume manufacturing at compelling economics for our customers, and also provide Shapeways with a meaningful opportunity to commercialize that software. We have made significant progress towards the overall commercialization of our software in 2022. Specifically in the third quarter, we focused on the integrations of the most recent MSG and MakerOS acquisition and their positive contribution to the auto SaaS roadmap. By the end of this year, we expect to realize more than 500 active SaaS revenue-generating customers and reach over $1.5 million of revenue, which is up from only $300,000 last year. We have made strong progress optimizing new customer acquisition and existing customer retention and are currently working to unify the product offering across Shapeways, MSG, and MakerOS. The vision for our software is to provide a suite of tools and services that will digitize manufacturers. We are currently focused on building on the momentum we achieved this year and plan to deliver revenue generating features to our customer base throughout 2023. We expect these features to allow us to capture revenue through SaaS subscription, transaction and processing fees, demand generation services, and overflow manufacturing capabilities by Shapeways and other supply chain partners. We see significant growth potential for our software offering in both the near-term and long-term. In terms of expanding our go-to-market strategy, we are continuing to execute on our strategy to develop and scale outbound business development resources to support enterprise customers. We are encouraged by our progress and growing pipeline across our target automotive, medical, aerospace, and industrial segments. The buying cycle for these customers has been longer than expected, but we are seeing initial qualification orders move to scaled production orders. Additionally, we have seen these customers expand the scope and scale of their original projects. We've seen strong momentum in the automotive industry, facilitated by our acquisition of Linear AMS. This business has deep domain expertise in sophisticated manufacturing processes and has provided us with access to a customer vertical, which would have been challenging to penetrate organically. By integrating linear AMS onto the Shapeways platform, we believe we can further accelerate the growth of that business by leveraging the broader Shapeways manufacturing and software capabilities. This tuck-in acquisition has proven to be an efficient use of capital to drive growth, expanding manufacturing capabilities, and expanding our go-to-market strategy. We also continue to optimize and scale the added manufacturing capabilities that we have added over the past several quarters in hardware, materials, post-production processes, and certifications. We have been focused on driving quality, gross margin optimization, and working directly with our customers on application development. We have invested to drive growth, and the results are already emerging. While current macro and geopolitical pressures could result in delayed buying decisions, We believe this environment also presents a potential tailwind for Shapeways as strategies around managing supply chains continue to shift and manufacturers strive to diversify and have more control over their supply chain. We believe Shapeways provides a clear and compelling solution. We are helping companies solve their manufacturing needs in a highly efficient way. We do this by providing a broad range of industrial grade manufacturing solutions to our customers. and by acting as a marketplace connecting buyers and manufacturers across additive and traditional, leveraging the power of our software and digitized platform. We believe we have a massive market opportunity within a trillion-dollar global manufacturing industry. And with our enhanced capabilities from our recent investments, our addressable market continues to expand. With a focus on achieving profitable growth, we are allocating resources into initiatives that we believe will deliver the highest results, such as commercializing our software and deepening our efforts in key verticals as we evolve our focus towards enterprise customers. Additionally, we are further optimizing our cost structure with the consolidation of our Long Island City, New York manufacturing facility with our Livonia, Michigan facility. The consolidated facility will provide us with a more centralized, location for our U.S. customers, and an optimized manufacturing footprint that can easily be expanded over time. We have a strong cash balance, which supports our normalized cash burn, positioning us well on our path towards profitability. I would like to formally welcome Alberto Recchi, who joined the Shapeways management team as our new CFO October 1st. Alberto has been a board member and investor since our IPO and continues in those capacities. We are excited to have him on board as an important member of our executive team. We are making tangible progress through strategic investments in people, facilities, technology, and manufacturing capabilities as we execute on our opportunity to capture and expand our market share using a highly scalable digital manufacturing platform and software. I would like to thank the entire Shapeways team, our customers, our investors, and all of our stakeholders for their ongoing support. Alberto will now discuss our financial results in more detail.