Shapeways Holdings, Inc.

Good afternoon, ladies and gentlemen, and welcome to the Shapeway's fourth quarter 2023 earnings conference call. At this time, online is 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 Thursday, March 28, 2024. I would now like to turn the conference over to Nikki Sachs with Investor Relations. Please go ahead.

Greetings, and welcome to Shapeway's fourth quarter and year-end 2023 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 first quarter of 2024, timing or results of any strategic transactions or future cost-cutting measures, and market opportunity are based on 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 annual report on Form 10-K for the year ended December 31, 2023. The information provided in this conference call speaks only to the broadcast today, March 28, 2024. 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, 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 afternoon, everyone. Thanks for joining us to discuss Shapeways' fourth quarter and year-end 2023 financial results progress on our key initiatives, and an update on our strategic alternatives. I will begin by providing a business update, and Alberto Recchi, our CFO, will then discuss our financial results. In the fourth quarter and year-to-date 2024, we've continued to execute our strategy to grow enterprise manufacturing and software revenues, as well as make progress on exploring strategic alternatives to maximize shareholder returns. Our fourth quarter results were in line with our expectations as we grew revenues by 9% from the prior year quarter to $9.5 million and realized 500 basis points of gross margin expansion to 46% compared to the same period in 2022. These results reflect the progress of our enterprise manufacturing sales effort and higher contribution from our software offerings. In terms of enterprise sales, we've continued to provide our high-quality, enterprise-level manufacturing solutions to customers focusing on our target industries of automotive, as well as medical, robotics, and other industries. For example, we've made traction in the automotive industry as our solution supports dynamic production demands with both additive and traditional manufacturing capabilities. We have seen success with Tier 1 supplier and OEM direct multi-year production contracts. and post-year end signed a $1.5 million multi-year contract with an industry-leading American automotive manufacturer. This was an expansion of a prior contract with this customer who leverages Shapeway's expansive additive and traditional manufacturing capabilities. This was just one example of how we have continued to increase our share of wallet with existing customers on multi-year revenue projects. For the full year 2023, revenue from our top 250 customers grew 29% compared to the prior year. Shapeway's solution support companies across the globe with their supply chain challenges by providing enhanced flexibility in production. This includes offering additive manufacturing, which we have discussed previously, but also traditional manufacturing methods, such as Computer Numerical Control, or CNC, which has an estimated $68 billion global market in 2023. To further expand this market subsequent to the year-end, we launched a new CNC instant quote feature, which enables our customers to seamlessly access CNC manufacturing capabilities and enhance our robust suite of enterprise manufacturing solutions. In terms of software business, during the year, we launched several key features to create a more comprehensive software offering, including an enhancement to our ordering service and the ability for customers to source discounted material using MFG materials platform. Finally, I will provide an update on our cost saving initiatives and strategic alternatives process. We are seeing ongoing near-term challenges, including an elongated sales cycle for enterprise sales, and longer than anticipated adoption of software features. In light of this backdrop, as we previously disclosed, we implemented cost savings measures to better align our cost structure with our growth expectations over the near term to reduce cash burn. These measures include reductions in force completed in the fourth quarter of 2023, a reduction in new hires, and a reduction in non-critical capital and discretionary operating expenditures. Additionally, as we discussed last quarter, we have been working with advisors and considering strategic alternatives, including without limitation, a sale of a material portion of the company's assets, a merger, business combination, liquidation of certain assets, or other strategic transactions to maximize shareholder value. Based on market checks conducted by our advisors, as well as preliminary discussion with and feedback from potential purchasers, And in light of the continued macroeconomic and industry pressures, the company is actively taking steps to sell a material portion of the company's assets. In the course of these preliminary discussions, potential purchasers have indicated an interest in acquiring either the company's manufacturing business or the software business, but not both. We continue to evaluate strategic alternatives with regard to both the manufacturing and software businesses. including ongoing discussions with potential acquirers. The company has not yet signed a definitive agreement with respect to either the manufacturing or software assets, and we can provide no assurances that any of these processes will result in any transaction. However, we will provide updates as appropriate. While we are exploring what is best to maximize shareholder value, we will remain disciplined and prudent as we execute our operating plan. 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.