Shapeways Holdings, Inc.

Good day ladies and gentlemen and welcome to the Shapeways first quarter 2023 earnings conference call. At this time all lines are in a listen only mode. Following the presentation we will conduct a question and answer session. If at any time during this call you require immediate assistance please press star zero for the operator. This call is being recorded on Monday May 15, 2023. I would now like to turn the conference over to Nikki Sachs, Investor Relations. Please go ahead.

Greetings, and welcome to Shapeway's first quarter 2023 earnings call. At this time, all participants are in the listen-only mode. A 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 limitations, statements regarding our business strategy, future financial and operating performance, projected financial results for the second quarter of 2023, anticipated timeline for achieving profitability, 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, we see the company's SEC filing, including the company's quarterly report on Form 10Q for the quarter ended March 31, 2023. The information provided in this conference call speaks only to the broadcast today, March 15, 2023. 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 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 shapeway.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 afternoon, everyone. Thanks for joining us to discuss Shapeway's first quarter 2023 financial results and progress on our key initiatives and strategic growth plan. I will begin by providing a business update, and Alberto Recchi, our CFO, will then discuss our first quarter financial results and outlook for the second quarter. In the first quarter, we delivered 8% revenue growth, above the high end of our expectations. We are starting to see the results of our investments and focused strategic plan centered on our software SaaS sales and enterprise manufacturing solution, which we believe is positioning us to achieve our objective of reaching profitability in the second half of 2024. We are pleased with our early momentum as we build on Shapeway's legacy as a manufacturing business and proprietary software to accelerate growth with a path to profitability. In particular, we are achieving traction with our software tools and services and in the first quarter saw momentum continuing to accelerate customer acquisition. As a reminder, our purpose-built proprietary software is foundational to Shapeways. It digitizes the end-to-end manufacturing process from quote through delivery. We have commercialized this software under the brand Auto for other manufacturers to digitize their business. We believe it is a valuable tool for global manufacturers, particularly small and medium-sized traditional manufacturers that are not able to invest the capital and time necessary to digitize their processes, thereby allowing them to offer improved customer accessibility, increased productivity, and expanded manufacturing capabilities. We are very encouraged by the reception for auto, with the first quarter SaaS sales bookings growing more than 50% over the fourth quarter, which will be recognized as revenue over the next 12 months. Based on our pipeline, we anticipate similar sequential growth in the second quarter and further acceleration throughout the year on a path to meaningfully increase the revenue contribution from high-margin software sales. We have further enhanced our software offering with the integration of capabilities and features we acquired through the acquisition of MFG and MakerOS. With our acquisition of MFG last year, we accelerated our product roadmap In the first quarter, we launched our consolidated ordering platform across all platforms. MFG historically focused on connecting small and medium-sized manufacturers with custom part buyers through its global manufacturing database and request-for-quote process. The new features expand customers' capabilities to not only facilitate relationships with prospective new opportunities, but also win more of these opportunities and manage them through the manufacturing process end to end. The rollout of new features and functionality led to a record-breaking Q1 for customer acquisition, and we saw our highest ever engagement for both manufacturers and buyers on the platform. We believe that this traction is an early indication of our ability to drive increased customer acquisition, retention, and lifetime value for our software product offerings. Our other key growth area is enterprise manufacturing, which is also showing steady progress. We provide end-to-end manufacturing services to a broad range of customers, from small manufacturers who cannot invest in expensive technologies to large enterprises seeking quality and efficient solutions to specific needs. Over the past year, we have optimized our go-to-market approach and our sales force to focus on these high-value opportunities. We are seeing success, particularly in our target industries, which include industrial, medical, automotive, and aerospace. As an example, in the first quarter, we signed a multi-year agreement with a customer in the medical space who is utilizing Shapeways to produce highly customized parts that are a critical part of the pre-surgical planning, and additional applications are already being rolled out for the second half of the year. We also signed a multi-year, multi-million dollar contract with an automotive customer supporting their injection molding needs, with part delivery slated to start next year. These contracts illustrate Shapeway's broad value proposition to manufacturers, including those seeking highly customized, low-volume part produced via additive manufacturing to those seeking more efficiency in their traditional manufacturing supply chain as they scale. Looking forward, we have a strong and growing pipeline of opportunities. With regard to our legacy e-commerce business, while it remains a competitive market, we are pleased to be seeing continued stabilization. I am confident we have a plan to achieve profitable growth as we believe we provide a compelling solution in an environment increasingly focused on mass customization and speed of part delivery. We are seeing strong traction in terms of demand and revenue growth. At this time, we have also rationalized our cost structure. We have begun executing a cost reduction plan to further reduce operating expense and optimize gross margin and expect to see the positive impact of these savings beginning in the second half of the year. As an example, we recently finalized our factory consolidation effort between Long Island City, New York and Livonia, Michigan. While our first half results are impacted by some duplicated cost structures, the Livonia facility is now fully launched and progressing towards stable operations and should benefit our gross margins starting at the end of the second quarter. Furthermore, industry tailwinds support our growth as manufacturers are increasingly seeking flexible on-demand manufacturing services. Taken together, the traction in our software sales booking, the growing demand from enterprise customers, and the stabilization of our legacy e-commerce business, combined with the cost measures we are taking, We have confidence in our positive trajectory and a path towards profitability. 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. Thanks, Greg.