Desktop Metal Announces First Quarter 2024 Financial Results

Non-GAAP Financial Information

This press release contains non-GAAP financial measures, including non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP operating expense, EBITDA and Adjusted EBITDA.

  • We define non-GAAP gross margin as GAAP gross margin excluding the effect of stock-based compensation, amortization of acquired intangible assets, restructuring, acquisition-related and integration costs, and inventory step-up adjustments
  • We define non-GAAP operating loss as GAAP operating loss excluding the effect of stock-based compensation, amortization of acquired intangible assets, restructuring, inventory step-up adjustments, and acquisition-related and integration costs
  • We define non-GAAP net loss as GAAP net loss excluding the effect of stock-based compensation, amortization of acquired intangible assets, restructuring, inventory step-up adjustments, acquisition-related and integration costs, and change in fair value of investments
  • We define non-GAAP operating expense as GAAP operating expense excluding the effect of stock-based compensation, amortization of acquired intangible assets, restructuring, and acquisition-related and integration costs including in operating expenses
  • We define EBITDA as GAAP net income (loss) excluding interest, income taxes, and depreciation and amortization expense
  • We define Adjusted EBITDA as EBITDA excluding change in fair value of investments, inventory step-up adjustments, stock-based compensation, restructuring, and acquisition-related and integration costs

In addition to Desktop Metal’s results determined in accordance with GAAP, Desktop Metal’s management uses this non-GAAP financial information to evaluate the Company’s ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial information, when taken collectively, may be helpful to investors in assessing Desktop Metal’s operating performance.

We believe that the use of Non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP operating expense, EBITDA and Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends because it eliminates the effect of financing, capital expenditures, and non-cash expenses such as stock-based compensation and warrants, and provides investors with a means to compare Desktop Metal’s financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, investors should be aware that when evaluating non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP operating expense, EBITDA and Adjusted EBITDA, we may incur future expenses similar to those excluded when calculating these measures. In addition, our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of these measures may not be comparable to other similarly titled measures computed by other companies because not all companies calculate these measures in the same fashion.

Because of these limitations, non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP operating expense, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP operating expense, EBITDA and Adjusted EBITDA on a supplemental basis. Management uses, and investors should consider, our non-GAAP financial measures only in conjunction with our GAAP results. Desktop Metal has not provided a reconciliation of its Adjusted EBITDA outlook to net income because estimates of all of the reconciling items cannot be provided without unreasonable efforts.

Set forth below is a reconciliation of each non-GAAP financial measure used in this press release to its most directly comparable GAAP financial measure.

DESKTOP METAL, INC.

NON-GAAP RECONCILIATION TABLE

(in thousands)

 

 

For the Three Months Ended

 

March 31,

(Dollars in thousands)

2024

2023

GAAP gross margin

$

(2,206

)

$

(1,364

)

Stock-based compensation included in cost of sales(1)

 

568

 

 

680

 

Amortization of acquired intangible assets included in cost of sales(2)

 

14,340

 

 

6,927

 

Restructuring expense in cost of sales(2)

 

(309

)

 

717

 

Acquisition-related and integration costs included in cost of sales

 

 

 

479

 

Non-GAAP gross margin

$

12,393

 

$

7,439

 

 

 

 

GAAP operating loss

$

(49,389

)

$

(52,317

)

Stock-based compensation (2)

 

7,838

 

 

9,313

 

Amortization of acquired intangible assets

 

21,047

 

 

10,442

 

Restructuring expense (3)

 

3,007

 

 

3,618

 

Acquisition-related and integration costs

 

1,255

 

 

1,406

 

Non-GAAP operating loss

$

(16,242

)

$

(27,538

)

 

 

 

GAAP net loss

$

(52,098

)

$

(52,642

)

Stock-based compensation (2)

 

7,838

 

 

9,313

 

Amortization of acquired intangible assets

 

21,047

 

 

10,442

 

Restructuring expense (3)

 

3,007

 

 

3,618

 

Acquisition-related and integration costs

 

1,255

 

 

1,406

 

Change in fair value of investments

 

1,317

 

 

179

 

Non-GAAP net loss

$

(17,634

)

$

(27,684

)

(1) Includes immaterial and $0.2 million of liability-award stock-based compensation expense for the three months ended March 31, 2024 and 2023.

(2) Includes $0.5 million and $1.6 million of liability-award stock-based compensation expense for the three months ended March 31, 2024 and 2023, respectively.

(3) Includes $0.4 million of depreciation classified as restructuring charges.

DESKTOP METAL, INC.

NON-GAAP OPERATING EXPENSE RECONCILIATION TABLE

(in thousands)

 

 

For the Three Months Ended

 

March 31,

(Dollars in thousands)

2024

2023

GAAP operating expenses

$

47,183

 

$

50,953

 

Stock-based compensation included in operating expenses (1)

 

(7,270

)

 

(8,633

)

Amortization of acquired intangible assets included in operating expenses

 

(6,707

)

 

(3,515

)

Restructuring expense included in operating expenses

 

(3,316

)

 

(2,901

)

Acquisition-related and integration costs included in operating expenses

 

(1,255

)

 

(927

)

Non-GAAP operating expenses

$

28,635

 

$

34,977

 

(1) Includes $0.5 million and $1.6 million of liability-award stock-based compensation expense for the three months ended March 31, 2024 and 2023, respectively.

DESKTOP METAL, INC.

NON-GAAP ADJUSTED EBITDA RECONCILIATION TABLE

(in thousands)

 

 

 

For the Three Months Ended

 

 

March 31,

(Dollars in thousands)

 

2024

 

2023

Net loss attributable to common stockholders

 

$

(52,098

)

 

$

(52,642

)

Interest expense

 

 

1,491

 

 

 

811

 

Income tax benefit

 

 

(198

)

 

 

(557

)

Depreciation and amortization (2)

 

 

24,185

 

 

 

13,433

 

EBITDA

 

 

(26,620

)

 

 

(38,955

)

Change in fair value of investments

 

 

1,317

 

 

 

179

 

Stock-based compensation expense (1)

 

 

7,838

 

 

 

9,313

 

Restructuring expense (2)

 

 

2,592

 

 

 

3,618

 

Acquisition-related and integration costs

 

 

1,255

 

 

 

1,406

 

Adjusted EBITDA

 

$

(13,618

)

 

$

(24,439

)

(1) Includes $0.5 million and $1.6 million of liability-award stock-based compensation for the three months ended March 31, 2024 and 2023, respectively.

(2) In connection with the Photopolymer Initiative, we recorded incremental depreciation of $0.4 million and incremental amortization of $11.2 million for the shortened useful life various fixed assets and intangibles to restructuring charges. These amounts are listed in the depreciation and amortization line.





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