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Shapeways (BCBA: SHPW) confronted a difficult 12 months in 2023, with monetary outcomes exhibiting a mixture of progress and setbacks. Whereas the corporate noticed a rise in income and gross revenue, it skilled a bigger web loss than the earlier 12 months. The powerful financial surroundings led Shapeways to scale back its workforce by 15% and implement cost-reduction measures, together with cuts in new hires and non-critical spending. These steps present how the corporate explores strategic options to maximise shareholder worth. After a tough earnings season that noticed many companies within the 3D printing business saying changes, realignments, and price restructuring initiatives, Shapeways provides to the checklist of public companies going through related challenges.
Income for the 12 months was up barely, reaching $34.5 million, in comparison with $33.2 million in 2022. The gross revenue additionally noticed a slight improve to $14.5 million. Nevertheless, this progress was overshadowed by a decline in gross margin, which fell to 42% from 43%, and a big rise in web losses, which doubled to $43.9 million from the earlier 12 months’s $20.2 million.
Within the fourth quarter of 2023, Shapeways demonstrated some monetary stability, with revenues rising to $9.5 million from $8.7 million 12 months over 12 months. The gross revenue for this quarter elevated by 23% year-over-year to $4.4 million, and the gross margin expanded to 46%. This enchancment was attributed to a “increased contribution” from software program and enterprise gross sales, notably within the automotive sector, the place Shapeways has improved its manufacturing capabilities.
Regardless of these features, Shapeways says it confronted “elongated gross sales cycles and the problem in quickly scaling its operations.” In response, the corporate carried out important cost-cutting measures, notably layoffs within the fourth quarter of 2023. These layoffs, a part of a broader technique initiated within the third quarter to chop working bills, led to a 15% discount in Shapeways’ world workforce. Moreover, the corporate scaled again on new hiring and lower non-critical capital and discretionary spending. These actions aligned Shapeways’ value construction extra carefully with the prevailing market circumstances and macroeconomic uncertainties.
Shapeways CEO Greg Kress through the firm’s public itemizing on the NYSE. Picture courtesy of Shapeways.
“All through 2023, we centered on executing our key strategic goals of increasing our enterprise and software program companies,” stated Greg Kress, Shapeways’ CEO. “We stay devoted to assembly evolving buyer wants and the continued shift in direction of digital manufacturing options. Whilst we’re seeing these enhancements and stay inspired about our alternative over time, the present surroundings stays difficult, gross sales cycles are elongated, and our enterprise has not scaled as shortly as anticipated.”
Shapeways continues to deal with rising its enterprise manufacturing, notably within the automotive business. The corporate claims it’s securing multi-year contracts and rising gross sales with its high clients. Additionally it is increasing into the worldwide CNC market. It has launched new software program instruments to improve buyer accessibility and manufacturing capabilities and tackle the sector’s provide chain challenges. This enlargement consists of the launch of Shapeways’ new laptop numerical management (CNC) Prompt Quote characteristic, a web-based quoting portal that provides entry to CNC clients but additionally upgrades Shapeways’ suite of enterprise manufacturing options, permitting it to grow to be a go-to firm for each additive and conventional manufacturing processes.
In the meantime, Shapeways is navigating by powerful macroeconomic circumstances, much like different companies within the 3D printing area. The corporate has been actively working with advisors to discover numerous strategic choices to reinforce shareholder worth. These choices embrace doubtlessly promoting a big a part of its property, merging, or participating in different enterprise combos. Throughout preliminary talks and market evaluations, the corporate says that potential patrons have proven curiosity in buying particular elements of Shapeways. Significantly its manufacturing or software program divisions, however not each concurrently. Shapeways continues to “assess these strategic options” and “interact in discussions with attainable acquirers,” though no definitive sale settlement has but been reached for both enterprise phase.
In August 2023, Shapeways moved its inventory itemizing from the New York Inventory Change (NYSE) to the Nasdaq, retaining the ticker image “SHPW.” This variation occurred after the corporate performed a 1-for-8 reverse inventory break up to spice up its share worth above $1, aiming to forestall delisting from the NYSE, a danger first recognized in August 2022. Regardless of these steps, Shapeways’ inventory worth has since declined from $4.5 to under $2.
Trying forward, Shapeways expects revenues between $8.3 million and $8.6 million for the primary quarter of 2024. The corporate’s future is dependent upon its means to adapt to the shifting market calls for, optimize its value construction, and efficiently navigate its strategic choices to reinforce shareholder worth. This earnings report revealed a tough 2023 monetary efficiency for Shapeways and an organization at a essential juncture, going through elevated losses regardless of income progress and strategic enlargement efforts. The corporate’s determination to scale back its workforce and discover strategic options exhibits the cruel realities of the present financial surroundings and the necessity to adapt methods within the 3D printing panorama.
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