Binder jetting 3D printer manufacturer ExOne has published its Q3 2020 financials, revealing that it doubled its system sales, and achieved a 60 percent rise in revenue during the period.
For the three months ending September 30th 2020, ExOne generated $17.4 million in revenue, an increase of 60 percent over the $10.9 million it reported in Q3 2019. This growth was primarily driven by an improvement in the firm’s sand and metal 3D printer sales, which rose by 164 percent between Q3 2019 and Q3 2020.
Interest in binder jetting technologies has soared since Desktop Metal announced its decision to go public in August 2020, and this may have boosted the demand for ExOne’s machines during the quarter. Following the results’ publication, ExOne’s share price jumped 10 percent from $9.78 to $10.77, reflecting a growing investor interest in metal 3D printing.
“ExOne’s global team delivered a solid quarterly performance, including record third quarter revenue, despite challenging market conditions as a result of COVID-19,” said John Hartner, CEO of ExOne. “Throughout the quarter, we remained focused on machine order execution and recurring revenue growth in a technology area benefiting from increased momentum.”
ExOne’s Q3 2020 financial results
ExOne’s revenue is reported in two segments, with the first including 3D Printing Machines, and the second comprising 3D Printed and Other Products, as well as the firm’s Materials and Services business. During Q3 2020, the firm’s Machine revenue increased by 162 percent, from the $4 million reported in Q3 2019 to $10.5 million.
This figure also represents a 114 percent quarterly rise on the $4.9 million reported in Q2 2020. The 13 3D printers that the company sold during its record third quarter, included a mixture of machines, but notably involved orders for its latest Max Pro and X1 25Pro systems, which it released in Q3 2019.
In terms of ExOne’s 3D Printed, Other Products, Materials, and Services segment, its revenue in Q3 2020 was flat compared to Q3 2019, with both periods reporting a figure of $6.9 million. According to the company, the segment failed to match the growth seen in its Machines business due to the ongoing impact of the pandemic on client demand.
| Segment Revenue ($) | Q3 2019 | Q3 2020 | Difference (%) |
| 3D Printing Machines | 4m | 10.5m | +162 |
| 3D Printed, Other Products, Materials and Services | 6.9m | 6.9m | N/A |
| Total Revenue | 10.8m | 17.3m | +60 |
Disruptions to domestic and international shipping and travel impacted on ExOne’s Products division, while its on-demand parts service was affected by the hostile macroeconomic climate. These difficulties were offset somewhat by an increase in aftermarket revenue and R&D funding, but not sufficiently to generate annual growth across the overall segment.
The company also agreed two significant material partnerships during Q3 2020, that served to mitigate some of the business it lost from its industrial customer base. ExOne agreed to develop a 3D printing process for a novel steel alloy by the U.S. Air Force last month, and recently validated its Cerabead materials for ceramics ITOCHU Ceratech’s sand systems.
During Q3 2020, the company decreased its spending on R&D from $2.4 million in Q3 2019 to $2 million, which it attributed to lower development spending, and cost reductions related to COVID-19. Where investments were sanctioned, they were focused on the firm’s upcoming entry-level InnoventPro 3D printer, and long-awaited X1 160Pro system.
Recovering from COVID-19 in Q3
ExOne saw its revenue decline in Q2 2020, despite reporting an increase in recurring customers, due to the continued impact of COVID-19 on client demand. As the associated travel restrictions began to ease in Q3, the company was able to complete some of the installations it had started earlier in the year, recovering some of the lost revenue.
The company installed multiple ExOne 25Pro machines in Q3, and it picked up an unnamed customer that’s now expanding into “multi-site production.” During the quarter, the firm also introduced its InnoventPro, that it describes as a “major update” on the Innovent Plus, and a semi-automated de-sanding station, which it anticipates will perform well with clients.
Although the firm’s Materials and Services business was flat during the quarter, it also saw a revenue increase in certain areas, such as R&D contracts, specific materials and its metal part ordering service. ExOne qualified the high-performance Inconel 718 alloy during Q3, bringing its compatible total to 22, which built on its portfolio if not its immediate profitability.
ExOne has also returned to growth via cost-cutting measures, such as staff reductions, furloughs, and decreases in consultancy spending, which yielded savings of around $2 million. This contributed to net operating expenses of $6.8 million from $7.7 million in Q3 2019, a reduction of 11 percent.
Further growth ahead for ExOne in Q4 2020?
Concluding a conference call with analysts and investors, Hartner expressed confidence that the company’s record backlog of $42.6 million, would lead to continued revenue growth in Q4 2020. ExOne’s largest binder jetting system to date, the 160Pro, is also set to launch later this year, and Hartner added that this would boost its revenue prospects for H1 2021.
Hartner went on to acknowledge Desktop Metal’s influence in generating a wider interest in binder jetting technologies, but said that ExOne is confident of holding its own in the market. “A number of players have introduced machines and had customers take a look at the industry,” admitted Hartner.
“The good news is they’ve looked at other potential suppliers, and decided to come back into our camp,” he added. “We talk about the decentralization of manufacturing, and on the production side that’s exactly where we excel, so that’s why we’re getting so much interest today.”
Although the firm increased its liquid capital from $20.2 million in Q2 2020 to $39.9 million in Q3, Hartner wouldn’t be drawn on any future investments. Instead, he reiterated that efficiency savings of $1-2 million would be needed for the rest of 2020, and that ExOne would be cautious due to the instability caused by COVID-19.
“With a record backlog, strong interest in our core binder jetting technology, and exciting new products still launching, we remain optimistic about our future,” said Hartner. “However, our enthusiasm must be tempered by the headwinds caused by COVID-19, which continues to influence the timing of our customers’ spending.”
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Featured image shows a line of ExOne 3D printers that have been successfully installed by a client in North America. Photo via ExOne.
