ExOne in 2016: Improving, But Seeking the Long Game

3D printer manufacturer ExOne released their 2016 financial results and there are some interesting aspects to their situation. 

All publicly traded firms must release their financial results at the end of their fiscal years, which typically coincides with the calendar year. Thus, we can see how ExOne progressed over the year by comparing the numbers to the previous year’s. 

ExOne is one of the few publicly-traded large-size 3D printer manufacturers, so one can often get a glimpse of the entire state of the industry by examining what’s happening at these companies. Private companies are essentially invisible in this regard. 

This particular company manufactures large-scale 3D printers that are specifically for printing sand cores for casting as well as 3D metal printing. So their scope of operations is quite a bit different from the other publicly traded firms such as 3D Systems and Stratasys, who have a far wider product set and address different markets. 

In 2016, the company grew their gross profit from USD$8.3M to USD$14.2M, a considerable improvement of 70%. However, that’s their gross profit; when adding in other operational factors, the company posted a USD$14.6M loss for the year 2016. 

If that sounds bad, and it is, it’s actually a significant improvement, as the company posted a USD$25.9M loss for 2015. 

Ok, now you’re probably thinking, “what kind of company is this that loses big every year?” 

I believe ExOne is playing the long game. Consider that while their sales are in the millions, that doesn’t represent a great many units, as each machine is quite costly. Significant changes can occur if only a few more units were sold, and I think that’s what they’re counting on for the future. 

The use of such machines is also not something you can measure within a year, as adoption by companies takes a great deal of time. They must understand the machine, adapt their internal usage processes, adjust their sales for products produced with the machine and train everyone to a new approach. That takes years in most companies. This business is not simply trying to sell as many units as possible in a quarter; it’s a strategy that will take years to unfold. 

ExOne explains: 

We have made a considerable effort to understand in what stage of adoption our customers are, with respect to our binder jet printing technology, and believe that 2017 marks an inflection point in our evolution.  We have customers who were in the early stages of adoption two years ago and are now reaching more advanced stages, as they discover that our equipment can bring sustainable and differential value to their businesses.  This encourages us about our potential for growth.

I think so too. 

Via ExOne