Voxeljet AG Earnings: Q2 Disappoints, but Guidance Remains Unchanged

Voxeljet  (NYSE: VJET  )  reported second-quarter 2014 earnings that fell short of analysts' earnings estimates after the market closed on Wednesday, resulting in the stock dropping 7.9% in after-hours trading. The Germany-based 3-D printing company provides large-format 3-D printers and on-demand 3-D printing services to industrial and commercial customers. 

Shares of voxeljet (yes, small "v") will likely be under pressure on Thursday. However, the direction and magnitude of the stock's movements following the earnings release will depend upon information shared during the conference call on Thursday morning. The 3-D printing stocks, in general, are likely to be under pressure on Thursday and perhaps beyond, as industrial-focused ExOne once again fell short of expectations when it released its results just before voxeljet's.

Here are the highlights from voxeljet's report:

  • Revenue increased 30.6% to 2.73 million euro, or about $3.74 million.
  • Net loss increased 58% to 0.38 euro, or about $0.52, per ordinary share. Investors need to keep in mind that voxeljet trades as American depository shares, with one ordinary share = 5 ADSs. So, in ADSs, the company's net loss was 0.076 euro, or about $0.10, greater than the 0.06 euro loss analysts were expecting.
  • Systems (3-D printers, consumables, maintenance, and spare parts) revenue grew 46.2% to 1.2 million euro, or about $1.6 million.
  • Services revenue rose 20% to 1.5 million euro, or about $2.1 million.
  • Two new 3-D printers were delivered versus one new one in the year-ago quarter.
  • Gross profit margin increased to 31.5%, up from 28.7% in the prior-year's quarter.
  • Operating loss increased 145% to 1.4 million euros, or about $1.9 million.
  • 2014 revenue guidance was reaffirmed at 18 million euro-plus, or about $24.6 million-plus, which translates to revenue growth of more than 50%.

Source: voxeljet.

As with last quarter, I'd not classify these results as good or poor. Revenue growth of nearly 31% is fairly solid; however, the bar for last year's period is very low, as the company only sold one printer in the second quarter of 2013. Given the company's small size and the fact that it sells very few printers, investors should expect "lumpy" quarterly revenue for a while. The services side continues to chug along nicely -- 20% growth isn't spectacular, but it's steady, and voxeljet's services revenue also grew 20% last quarter.

Voxeljet's services business once again pulled the weight for the quarter from a profitability standpoint. The gross margin for this segment rose to 37.8%, up from 33.6% in the year-ago period. The company attributed this increase to higher revenue related to increased capacity and a favorable product mix. Gross margin in voxeljet's systems segment edged up to 23.8% from 21.4% in Q2 2013.

The company attributed the deeper operating loss vs. the year-ago period to the increased headcount needed for its growth strategy and the costs associated with being a publicly traded company. (Voxeljet went public in Oct. 2013.) 

Looking ahead 
Again, voxeljet reiterated that it expected its 2014 revenue to "exceed 18 million euro," or about $24.6 million. This translates to annual growth of more than 50%.

The company had a backlog of eight 3-D printers totaling 4.3 million euro, or about $5.9 million, at the end of the second quarter. This compares to a backlog of 3.8 million euros, representing six printers, at the end of the first quarter. So, the backlog is looking decent. 

Foolish final thoughts 
Once again, voxeljet neither hit one out of the ballpark nor struck out with its quarterly results. This is a tiny company -- it sold just two 3-D printers in the quarter -- that is new to the public markets. So, it is much too soon to tell whether voxeljet's products and services will gain considerable favor in the marketplace. I'll continue to follow along as this upstart progresses through its first year as a public company.

As to the stock, investors should keep in mind that voxeljet's stock remains the most highly priced stock among all the 3-D printer makers on a price-to-sales basis. 

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