Nano Dimension financial report & the threat of a Desktop Metal disaster
The Atomic Layers: S10E1 (00268)
Atomic Layer of the Day:
Yesterday afternoon (Eastern Standard Time), Nano Dimension released its long-awaited financial results for the full year 2024 and the fourth quarter of that year.
During the accompanying video call, the company also announced its plans regarding the recently acquired Desktop Metal and Markforged, as well as presented a preliminary plan for integrating all elements into a cohesive structure.
Before diving into the detailed breakdown, I will start with a brief summary, as several aspects are particularly important.
The new management team at Nano Dimension currently appears to be highly rational and determined to clean up the mess left behind by Yoav Stern.
They are not afraid to make tough decisions. Admatec, DeepCube, Fabrica, and Formatec are being shut down.
Desktop Metal is in deep trouble and burdened with substantial debt that must be repaid immediately. However, the company does not have the funds to do so, and Nano Dimension has no intention of covering these obligations on its behalf. Therefore, "all options are being considered."
In contrast, there are significant expectations associated with Markforged, and it is evident that Nano Dimension sees a strong rationale for integrating its own native products and projects with Markforged’s offering.
Now, let's begin with the financial report
In the fourth quarter of 2024, Nano Dimension recorded revenues of $14.6 million, representing a 1% increase compared to the same period in the previous year.
For the full year 2024, revenues totaled $57.8 million, marking a 3% year-over-year increase.
Despite this moderate sales growth, gross margin in Q4 2024 declined to 33%, and to 43% for the full year. After adjustments (Adjusted GM), these figures stood at 36% and 46%, respectively—both showing significant declines compared to the previous year.
The decrease in gross margins primarily stems from higher production costs and the company’s decision to discontinue less profitable product lines in favor of focusing on two core groups: Additively Manufactured Electronics (AME) and Surface-Mount Technology (SMT).
From a revenue and margin standpoint, the results can be considered moderately negative: revenue growth is modest, and the margin decline reflects cost pressures and a continued need for optimization in both production and sales processes.
In terms of operating costs, Nano Dimension successfully reduced expenditures thanks to the implementation of a reorganization plan launched at the end of 2023 and further optimization efforts undertaken in 2024.
In Q4 2024, research and development (R&D) spending decreased from $13.6 million to $9.1 million, while sales and marketing (S&M) costs dropped from $8.3 million to $6.3 million. General and administrative (G&A) expenses fell from $14.1 million to $11.9 million, primarily due to reductions in professional services and share-based compensation.
However, the net loss attributable to shareholders rose significantly, reaching $9.1 million in Q4 2024 (a +576% increase year-over-year), and nearly $96 million for the entire year (a +74% increase year-over-year), driven mainly by the revaluation of Nano Dimension’s investment in Stratasys shares [SIC!].
On the adjusted EBITDA front, Nano Dimension recorded an improvement: the Q4 2024 loss was $20.7 million (a 9% year-over-year improvement), and $65.2 million for the full year (a 35% year-over-year improvement).
The overall assessment of this segment is mixed: on one hand, the effects of cost-cutting and improved EBITDA are evident; on the other hand, the significant increase in net loss and steep decline in gross margins suggest that the company still faces serious challenges regarding profitability.
As of December 31, 2024, the company held cash, bank deposits, and marketable securities totaling $845 million, down from $991 million a year earlier.
Cash flow remains relatively stable, but the decline in cash reserves should prompt management to act cautiously with future investments and ensure prudent capital management.
A very troubled company: Desktop Metal
Desktop Metal, recently acquired by Nano Dimension, is currently facing serious liquidity challenges.
The company holds unsecured obligations in the form of convertible bonds with a nominal value of $115 million that are coming due.
Without secured financing, Desktop Metal lacks the funds to repay this debt or cover other significant liabilities.
Following the acquisition, Nano Dimension provided Desktop Metal with limited short-term funding and initiated a strategic review of available options. However, there is no certainty regarding the outcomes or timing of this process.
Looking ahead, Desktop Metal could become a capital burden if a lasting financial solution or strategic partner is not found.
Despite this, due to the alignment of Desktop Metal’s technology with Nano Dimension’s vision for advanced multi-material manufacturing, the company still sees potential in the brand to strengthen its offering—though this potential should currently be viewed with considerable caution.
Nano Dimension’s hopes for Desktop Metal lie mainly in product synergy and the potential to expand the AME market, but success will depend on stabilizing liquidity and executing a progressive integration strategy.
The problem is, none of that was evident during the presentation.
The slides presented were marked as not for publication, but I can describe what I saw on one of them. It featured images of several machines—branded with Nano Dimension and Markforged logos—but none bore the Desktop Metal logo. That symbolic detail says it all…
Hopes surrounding Markforged
As for Markforged, Nano Dimension is at the preliminary stage of reviewing this acquisition. While Markforged’s technology also caters to the production of complex and composite parts, the company is approaching the integration with caution, carefully analyzing operational and financial aspects.
Nano Dimension takes Markforged seriously but is not yet making concrete commitments, awaiting the results of its internal review and potential recommendations from management.
However, one important point that kept resurfacing during the presentation was how highly Nano Dimension values Markforged’s software, as well as the fact that it has 15 thousand of installations worldwide.
This provides an excellent springboard for cross-selling other related products from the company’s portfolio.
Summary
As part of its cost-cutting efforts, Nano Dimension decided to shut down or withdraw four non-core product units from the market: Admatec, DeepCube, Fabrica, and Formatec.
These closures have enabled the company to reduce annual operating expenses by over $20 million.
This move best summarizes the new management’s determination to pull Nano Dimension out of its current turmoil. For the first time, there appeared to be a glimmer of a plan and some logic—rather than chaos, a concern that was also raised during the conference.
To be honest, I’ve started to root for the company a little…
It seems that if Desktop Metal is cut off and the bleeding can be stopped, this ship might just sail again. Who knows—maybe one day we’ll see it out on the open ocean?
Atomic Layer from the Past:
05-01-2017: Mosaic Manufacturing introduced the CANVAS software.
News & Gossip:
DEEP Manufacturing has introduced the HexBot, a six-armed WAAM system capable of producing metal parts up to 6.2 meters in size. Designed for energy and maritime sectors, it offers unmatched scale and customization. The UK firm aims to lead WAAM adoption and has already secured DNV approval in principle.
Sandvik has appointed David Goulbourne as President of its Powder Solutions division, effective May 1, 2025. With 25 years of manufacturing experience, Goulbourne aims to advance sustainable, high-quality powder solutions. He will also lead Wolfram Bergbau, succeeding Alex Nieuwpoort, who retires after 28 years.
SHINING 3D has launched SHINING 3D Metrology, a new high-end brand for Industry 5.0, alongside the OptimScan Q12 scanner. The compact device offers 0.005 mm accuracy, dual scan ranges, MSF technology, and flexible integration options, bringing real-time, mobile inspection to production floors with the slogan “Inspect on the Move.”