Desktop Metal, Inc. (NYSE:DM) Q4 2022 Earnings Call Transcript

Ric Fulop: Absolutely. Well, I think we are not seeing that weakness. We actually are seeing significant growth in our dental. We have the most competitive material portfolio in the dental space. We have got best-in-class products, both in the chair side and a new product just introduced, the Dental Show last week, call it, product sale. It has also best-in-class price performance. We continue to see growth. I just saw the numbers today. Our dental business is strong, and we €“ you could look at the call it from Joe Hogan, the CEO of Align on his last earnings call referring to us. So, we have a growing partnership with them. And one of the great things about Desktop Metal is we have no account concentration in our business.

We have large group of customers, but we have many hyperscalers in our business. Align is a hyperscaler opportunity that is significant, looking to take advantage of more advanced technology. And then we have that also with other large customers like BMW is hyperscaling with us. We have companies in the consumer electronics space that are doing that as well. So, we will €“ you are going to be pleasantly surprised, we don’t have any weakness whatsoever. We actually see significant growth. And if you look at the restorative market in dental, the $30 billion opportunity that will completely migrate this decade or mostly migrate this decade to printed. So, it’s an area where we are leading, and we expect significant growth as the year progresses and the decade continues to the long-term planning.

Troy Jensen: If I can just interject, so specifically with Align, are they doing the chair side application consistent with your dental lab acquisitions that you guys did last year? Could you just dive in exactly what they are going to be doing with it?

Ric Fulop: What we have announced to-date is our first line, which is a full-service digital offering that we are doing in the restorative space. It has a significant recurring revenue subscription business. That puts together products that go with Align together with products from DM. But we have €“ this is just the beginning. We have many things under development at DM in the dental space. And that’s all I can say at the moment.

Troy Jensen: Okay. Perfect. And then maybe I just want just kind of the seasonality. I think last year, you guys provided us some kind of color on how you thought the year was going to go. If I remember correctly, it might have been like 20% in Q1 and then 25% in Q2 and Q3 and then 30% in Q4. So, are you expecting to see a normal or a consistent type of distribution across the year for your revenue guidance?

Ric Fulop: Yes. Go ahead. Jason, why don’t you take this one?

Jason Cole: Yes. I think it’s certainly north of 20% in 1Q, but maybe not by much. So, 1Q is certainly the weakest quarter. Historically, that’s been the case. I do think 1Q also will be the period where our visibility, we expect to be the weakest. Consistent with the remarks on the call, we are going to navigate this with a lot of caution. We are doing that on the expense side. We believe we have a lot of growth drivers, and we expect to see that. But 1Q is closer to bake than the rest. So, there is more growth that we believe will unfold in 2Q and the second half. But yes, I think it’s fair to say, it’s going to be a little less than 25%.

Troy Jensen: Okay. Good luck going forward.

Ric Fulop: Thank you.

Operator: Our next question comes from the line of Greg Palm with Craig Hallum. Please proceed with your question.

Greg Palm: Yes. Congrats. Thanks for taking the questions. Here I wanted to follow-up on that master supply agreement and not sure what you can or can’t say. But what exactly does a master supply agreement mean? And can you confirm whether orders have been placed to-date?