ExOne revenue growth flat for Q1 2021 but $48M backlog promising

Binder jet 3D printer manufacturer ExOne (XONE) has revealed that despite seeing a recovery in demand within its U.S. business, its revenue marginally declined by 3% in Q1 2021. 

Over the course of Q1 2021, the company’s financials show that it generated $13 million in revenue, 3% less than the $13.4 million reported in Q1 2020. Citing a “difficult operating environment” caused by COVID-19, ExOne says that it has been unable to finalize orders due to travel restrictions, but anticipates being able to convert a record-breaking $48 million backlog and return to growth by the end of the year.

Elsewhere, binder jetting rivals Desktop Metal and voxeljet reported annual revenue growth of 234% and 5% respectively during Q1 2021, although the former did pump $182 million into expanding its portfolio. Following the results’ publication, ExOne’s shares fell 10% during early trading but they quickly recovered, and the company continues to project 15-25% growth for FY 2021. 

According to ExOne’s CEO John Hartner, the firm began to the see signs of an “economic rebound” during Q1, particularly within U.S markets, which added significantly to its order backlog, and he anticipates that as COVID-19 starts to recede later in the year, clients there will continue to seek out new ways of switching to localized 3D printing production. 

“The ExOne team is pleased to report record levels of both recurring revenue and machine order backlog, which shows the strength of our product offerings, adoption model, and momentum,” said Hartner. “We look forward to entering the post-pandemic period with new tailwinds, as manufacturers look to de-risk supply chains and improve the sustainability of their products.” 

“With signs of a broader economic recovery on the horizon, we see the remainder of 2021 as the beginning of our next phase of growth.”

In Q3 2020, ExOne has increased its revenue by 60 percent compared to Q3 2019. Photo via ExOne.
ExOne has been unable to translate its record-breaking backlog into revenue due to COVID-19 restrictions. Photo via ExOne.

ExOne’s Q1 2021 financials 

ExOne reports its revenue across two main segments: 3D Printing Machines and 3D Printed and Other Products, with the latter including any income generated by its Services and Materials businesses. The company’s 3D Printing Machines revenue fell by 22% between Q1 2020 and Q1 2021, dropping from $6.3 million to $4.9 million. 

Even though ExOne has now built up an agreed order backlog of 45 machines, it says that pandemic-induced travel restrictions in Asia and Europe have impacted on its ability to carry out installations. However, as the global vaccine roll-out begins to take effect, Hartner said that he anticipates “nearly all” of this $48 million backlog will be cleared, returning revenue in the next “two-to-three quarters.”

The number of systems installed by the firm fell from 14 in Q1 2020 down to 7 in Q1 2021, but this was somewhat offset by a shift from its entry-level Innovent systems to the higher-value X1 25Pro machines. Moving forwards, the firm now expects this sales trend to continue, potentially bringing further growth opportunities when its X1 InnoventPro system enters volume shipping in 2022. 

Contrastingly, ExOne’s revenue gained from its 3D Printed and Other Products division actually grew during Q1 2021, rising from the $7.1 million reported in Q1 2020 to $8.1 million. On the firm’s earnings call, ExOne CFO Doug Zemba described growing the division’s revenue an “area of strategic focus,” and said that it provided “stability against the economic volatility” seen over the course of Q1 2021.  

Within its operating costs, ExOne was also able to reduce its spending on selling, general and administrative areas from $6.2 million in Q1 2020 to $5.9 million, further mitigating the revenue it lost to unconverted machine sales. This decrease was primarily down to lower employee and travel-related expenses as a result of COVID-19, and a one-off net recovery of bad debts during the quarter. 

ExOne Financials ($) Q1 2020Q1 2021Difference (%) 
3D Printing Machines6.3m4.9m-22
3D Printed and Other Products7.1m8.1m +16
Total Revenue 13.4m13m-3
Order Backlog 33.8m47.8m+41

ExOne’s long-term R&D strategy 

Rather than continuing its cautious approach to organic investment, ExOne has now indicated its intention to increase its internal expenditure during the rest of 2021 by 20-25%. Effectively, the firm aims to expand on its machine-building capabilities in the U.S by growing its team there, thus enabling it to convert its backlog into revenue as quickly as possible. 

On the company’s earnings call, Zemba also identified a “rise in interest in binder jetting,” and said that it would increase its R&D spending, to develop materials that take advantage of this trend. As part of this initiative, ExOne has already worked with Ford to develop a rapid new aluminum binder jetting process, and the firm now sees such R&D contracts as a valuable way of progressing its technologies. 

Similarly, ExOne has partnered with Swedish start-up Celwise to 3D print porous metal tooling out of a wood-based material, using a technology much like that being developed by Desktop Metal’s Forust subsidiary.

In the shorter term, ExOne acquired the ‘AMClad’ assets of Freshmade 3D in April 2021, and it now intends to scale up its ‘AMClad’ process, and generate revenue via a deal with a global aerospace client. The company also debuted its Rapidia-powered Designlab 3D printer at AMUG 2021, and Hartner said that it not only got an “outstanding reception,” but it has “order commitments” ahead of its Q2 launch. 

Additionally, Hartner said that thanks to the growing material compatibility of its X1 160 Pro 3D printer, the firm has a string of “major brands lining-up” to adopt the machine, and it’s now working hard to get it to market quickly in order to take advantage of this demand. 

An AMClad vacuum forming tool.
ExOne says that the ‘AMClad’ process could reduce tooling production costs by up to 50%. Photo via ExOne.

“Challenges” ahead during FY 2021 

In his closing remarks, Hartner admitted that ExOne still faces COVID-related “challenges” during Q2 2021, but added that increased “confidence from U.S. customers” was leading to an “excess in demand” for its systems there. The company therefore expects to convert these orders into sales later in the year, and with the continued vaccine rollout, it’s anticipating a recovery within its EMEA and Asia-based businesses by H2 2021.

Earlier in February 2021, ExOne also completed an underwritten public offering of common stock, which saw it raise $95 million, taking its total cash balance to $138 million as of March 31 2021. As a result, Hartner concluded that the firm has the balance sheet to “invest in external strategic opportunities,” as well as its organic expansion plans. 

“While there are still some remaining execution challenges as a result of COVID-19, particularly in Europe and Asia, we feel confident that our operating plan for 2021 is well-supported,” said Hartner. “In addition, our improved liquidity position gives us the ability to strategically invest in additional growth.”

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Featured image shows a row of ExOne 3D printers. Image via ExOne.