Voxeljet AG: What Investors Should Know About Its Q1 Results and 2014 Outlook

Voxeljet (NYSE: VJET  )  reported first-quarter 2014 earnings after the market closed last Thursday that beat analysts' estimates, and followed up with a conference call on Friday morning. The Germany-based 3-D printing company, which provides high-speed, large format 3-D printers to industrial and commercial customers, is the last company in the highly volatile 3-D printing sector to report first quarter results.

Though shares of voxeljet rose 4% on Friday, I'd not necessarily interpret the rise -- or at least all of it -- as enthusiasm over the company's results. All the 3-D printing stocks were dragged down on Thursday as ExOne significantly missed estimates, and they all bounced back to some degree on Friday. Additionally, shares of voxeljet fell 2.2% in Monday's trading. 

Q1 results
Here are the highlights:

  • Revenue increased 14.7% to 2.7 million euro, or about $3.7 million.
  • Net loss was 0.22 euro ($0.30) per ordinary share, compared to a gain of 0.05 euro ($0.07) per share in the first quarter of 2013. Investors need to keep in mind that voxeljet trades as an American depository share, with one ordinary share = 5 ADSs. So, in ADSs, the company's net loss was .04 euro ($0.06), which handily beat analysts' estimates of -.07 euro. The loss was due to the company's spending on growth initiatives.
  • Service segment revenue rose 20.7% to 1.4 million euro, or about $1.9 million.
  • 3-D printer sales revenue grew 8.9% to 1.3 million euro, or about $1.8 million.
  • Two new 3-D printers were delivered versus one new and one used system in last year's first quarter.
  • Gross profit margin increase to 39.4%, up from 38.2% in the prior year's quarter.
  • 2014 revenue guidance was reaffirmed at 18 million euro-plus, or about $24.8 million-plus, which translates to revenue growth of more than 50%.
  • The company completed the relocation into its German service center, which is twice the size of the former facility.
  • The company opened its first service center in the United States –  just outside Detroit.

I'd not classify these results as either good or poor. In light of ExOne's significant miss the day before voxeljet released its earnings and the struggles within the 3-D printing sector as a whole recently, investors probably breathed a collective sigh of relief at these results. Relatively slow overall growth is at least growth, and the service segment's growth of 20% was solid.

Voxeljet's services business pulled the weight for the company in the quarter from a revenue and earnings standpoint. The gross profit margin for this segment increased to 47.8%, up from 41% in the first quarter of 2013. The company attributed this increase to a favorable product mix.

Gross margin in voxeljet's systems segment decreased to 30.3% from 35.5% in Q1 2013. Given the small amount of revenue we're dealing with, this drop is quite small from a dollar standpoint. One of the two printers sold in the first quarter was to a research institution, which received a discount to the listed price. This contributed to the decrease in gross margin, according to the company. As a policy, voxeljet gives discounts to educational and research institutions.

Looking ahead
Again, voxeljet reiterated that it expected its 2014 revenue to "exceed 18 million euro," or about $24.8 million. This translates to annual growth of more than 50%.

The company had a backlog of six 3-D printers totaling 3.8 million euro, or about $5.2 million, at the end of the first quarter. This compares to a backlog of 2.3 million euros, or $3.2 million, representing four printers at the end of the fourth quarter of 2013.

Foolish final thoughts
Voxeljet neither hit one out of the ballpark nor struck out with its first-quarter results. This is a tiny company -- it sold just two 3-D printers in the quarter, and one of them was sold to a research institution at a discount. It is much too soon to tell whether voxeljet's products and services will gain considerable favor in the marketplace, but I'll be following along as this upstart progresses through its first year as a public company. 

Additionally, investors should keep in mind that voxeljet's stock remains, even after its huge recent drop, the most highly priced stock among all the 3-D printer makers on a price-to-sales basis. 

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