Last close As at 05/08/2026
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▲ −0.02 (−1.27%)
Market capitalisation
USD332m
Research: TMT
For Q123, Nano Dimension reported good progress in revenue, up 43.5% y o-y and 23.6% q-o-q to $15.0m. Continued investment in R&D resulted in an adjusted EBITDA loss of $23.7m. Revaluation of the company’s stake in Stratasys and interest income earned on cash resulted in net income of $22.2m for the quarter. With net cash of $974m at quarter end, the company is well-funded to pursue its acquisition strategy.
Nano Dimension |
Record quarter for revenue
Technology |
Spotlight – Update
3 July 2023 |
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Nano Dimension is a research client of Edison Investment Research Limited |
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For Q123, Nano Dimension reported good progress in revenue, up 43.5% yo-y and 23.6% q-o-q to $15.0m. Continued investment in R&D resulted in an adjusted EBITDA loss of $23.7m. Revaluation of the company’s stake in Stratasys and interest income earned on cash resulted in net income of $22.2m for the quarter. With net cash of $974m at quarter end, the company is well-funded to pursue its acquisition strategy.
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Historical performance
Source: Company data. Note: *PBT and PAT are normalised, excluding amortisation of acquired intangibles, exceptionals and share-based payments. |
Good progress made in Q123
Nano Dimension reported Q123 revenue of $15m, adjusted gross profit of $7.1m (47.1% margin) and adjusted EBITDA of $23.7m. The company earned interest income of $11.2m and reported a gain on the value of its stake in Stratasys of $45.3m, resulting in net income of $22.2m for the quarter. The company saw steady demand for its systems and is seeing growing interest in DeepCube’s AI engine from existing and potential customers, including companies wanting to use DeepCube’s technology in third-party machines. Net cash reduced by $45m over the quarter, including $18.4m spent buying back shares.
Revised tender offer under way
On 27 June, the company revised its tender offer for Stratasys, raising the bid per share to $20.05 (from $18.00) and extending the deadline to 24 July. If the maximum number of shares is tendered, this would cost Nano Dimension $507m, using just over half of the company’s current cash balance.
Valuation: Well-funded for M&A strategy
Nano Dimension has $974m net cash on the balance sheet. Management has stated its intention to pursue other sizable acquisitions if the Stratasys offer falls through. Consequently, it is not valid to carry out a valuation based on a comparison of market capitalisation/historical sales multiples because Nano Dimension’s revenues are likely to grow much faster than those of its listed peers. The shares are currently trading at a significant discount (c 35%) to Nano Dimension’s net cash balance plus the value of its stake in Stratasys ($174m as at 29 June).
Financials
Review of Q123 results
In the table below, we summarise the performance of Nano Dimension in Q123.
Exhibit 1: Quarterly results highlights
Q123 |
Q422 |
Q122 |
||
Revenue |
$m |
15.0 |
12.1 |
10.4 |
Gross profit |
$m |
6.6 |
7.7 |
1.0 |
Adj. gross profit |
$m |
7.1 |
8.8 |
4.2 |
EBITDA |
$m |
11.9 |
(94.2) |
(31.6) |
Adj. EBITDA* |
$m |
(23.7) |
(24.1) |
(19.2) |
Operating loss |
$m |
(31.2) |
(72.7) |
(32.9) |
Profit/(loss) before tax |
$m |
22.0 |
(86.9) |
(33.7) |
Profit/(loss) after tax |
$m |
22.0 |
(87.9) |
(33.3) |
Net income after minority interest |
$m |
22.2 |
(87.7) |
(33.1) |
Net cash |
$m |
973.9 |
1018.9 |
1309.3 |
Revenue growth y-o-y |
43.5% |
60.7% |
1186.1% |
|
Revenue growth q-o-q |
23.6% |
21.1% |
38.5% |
|
Gross margin |
43.9% |
63.4% |
9.6% |
|
Adj. gross margin |
47.1% |
72.6% |
40.1% |
Source: Nano Dimension. Note: *Excludes revaluation of assets/liabilities, exchange rate differences and share-based payments.
Revenue increased 43.5% y-o-y, partly due to the inclusion of two acquisitions made in July 2022. The company noted that organic growth was 50% compared to Q322, which included these acquisitions. We note that the underlying business saw lower demand in Q322 mainly due to global supply chain issues that reduced availability of components for Nano Dimension’s customers and therefore delayed their need to take delivery of systems. Reported gross margin of 43.9% was 34.3pp higher than a year ago and 19.5pp lower than in Q422. Adjusted gross margin of 47.1% (which excludes share-based payments and amortisation of acquired intangibles) was 7.0pp higher than in Q122 and 2.6pp lower than in Q422.
The value of the Stratasys shares owned by Nano Dimension increased $45.3m over the quarter to $160.3m (the Stratasys share price rose from $11.86 at the end of FY22 to $16.53 at the end of Q123 and $17.95 on 29 June) – the increase was included in financial income along with $11.5m in interest income earned on the company’s cash balance, with both contributing to the positive net income for Q123. The revaluation of the Stratasys stake was excluded from adjusted EBITDA, which was a smaller loss than in Q422 but a larger loss than in Q122.
Net cash after leases reduced by $45m over the quarter, leaving a healthy $974m available for acquisitions. The company used $28.0m cash for operating activities, received interest of $11.2m, spent $3.9m on capex, $4.0m on contingent consideration and $18.4m on share buybacks.
Business update
In Q123, the company noted sales wins with NASA (Admaflex 130 for printing sodium ion batteries), a top 10 global defence contractor (DragonFly IV), the Fraunhofer Institute (DragonFly IV for R&D in medical electronics and instrumentation), a Western government defence agency and a Western research innovation centre. The company disclosed that system sales totalled $12m in the quarter, up from $8m a year ago (+45% y-o-y). Growth in the installed base provides the opportunity for future growth in recurring revenue from consumables and services.
In June, the company announced it had sold a DragonFly IV system to the University of Stuttgart for use in part of a government-sponsored programme called Cluster4Future QSens, which aims to spearhead the industrial use of quantum sensors.
Growing demand for DeepCube’s AI technology
DeepCube (acquired in April 2021) has developed proprietary algorithms that can increase the speed of data analysis, supporting error correction on the fly during manufacturing. The technology is integrated into the latest Dragonfly IV system and the company has seen interest for the DeepCube AI engine from customers with third-party additive manufacturing (AM) machines.
Additive manufacturing market consolidation
Nano Dimension made a series of small acquisitions in the AM space over the course of 2021 and 2022. In July 2022, Nano Dimension acquired a 12% stake in Stratasys (Nasdaq: SSYS) to give shareholders exposure to ‘large, stable, more mature, mostly polymer-based additive manufacturing technologies’ and subsequently increased its stake to 14.5%. In March it made a formal, non-binding offer to acquire the remaining shares at $18.00/share, and then subsequently increased the offer, first to $19.55/share and then to $20.05/share. The Stratasys board rejected these offers. On 25 May, Nano Dimension launched a special tender offer to buy up to 55% of Stratasys shares (including its own stake), offering cash of $18.00 per share. As we wrote on 28 June, the tender offer expired on 26 June with 8.4% of shares outstanding tendered. On 27 June, Nano Dimension increased its offer to $20.05 per share, extended the offer period to 24 July and reduced the maximum stake it is targeting to 51%. Buying the maximum number of shares sought would cost Nano Dimension $506.6m.
On the same day that Nano Dimension launched the initial tender offer, Stratasys announced that it had agreed to merge with Desktop Metal (NYSE: DM); if the deal completes Stratasys shareholders would hold 59% of the combined group and Desktop Metal shareholders 41%. On 2 June, a third competitor, 3D Systems (NYSE: DDD), announced a bid for Stratasys offering cash of $7.50 and 1.2507 3D Systems shares (worth $17.92 based on the closing price on 1 June). Stratasys rejected both Nano Dimension’s and 3D System’s bids. On the same day that Nano Dimension increased its tender offer, 3D Systems increased its offer to $7.50 per share plus 1.3223 3D Systems shares (worth $19.53 at the closing price on 26 June and $20.63 at the closing price on 30 June). Stratasys has reviewed and rejected both revised bids.
We view this M&A activity as a sign that the market is maturing, with the focus shifting to profitability rather than revenue growth, and the need for a comprehensive product offering.
Shareholder action
Court action is ongoing between Nano Dimension and its largest shareholder, Murchinson (see our April note for background). Nano Dimension has filed a lawsuit with the US District Court for the Southern District of New York alleging violation of securities law, breach of contract, tortious interference with business relations and unjust enrichment, and has expanded the lawsuit to include other shareholders it believes are acting in concert with Murchinson.
Exhibit 2: Financial summary
$m |
2019 |
2020 |
2021 |
2022 |
|
Year-end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
|
PROFIT & LOSS |
|
|
|
|
|
Revenue |
|
7.1 |
3.4 |
10.5 |
43.6 |
Cost of Sales (including amortisation of capitalised IP) |
(5.1) |
(2.3) |
(9.4) |
(29.6) |
|
Gross Profit |
2.0 |
1.1 |
1.1 |
14.1 |
|
EBITDA |
|
(11.7) |
(12.6) |
(38.4) |
(88.8) |
Operating profit (before amort. and excepts.) |
|
(14.4) |
(15.2) |
(48.3) |
(98.5) |
Intangible Amortisation |
0.0 |
0.0 |
0.0 |
0.0 |
|
Exceptionals |
0.0 |
0.0 |
(145.2) |
(40.4) |
|
Share-based payments |
(0.4) |
(20.5) |
(29.8) |
(32.6) |
|
Operating Profit |
(14.8) |
(35.7) |
(223.2) |
(171.5) |
|
Net Interest |
6.5 |
0.2 |
3.8 |
2.2 |
|
Exceptionals |
0.0 |
(13.0) |
13.7 |
(58.7) |
|
Profit Before Tax (norm) |
|
(7.9) |
(15.0) |
(44.5) |
(96.4) |
Profit Before Tax (FRS 3) |
|
(8.4) |
(48.5) |
(205.7) |
(228.0) |
Tax |
0.0 |
0.0 |
4.9 |
(0.3) |
|
Profit After Tax (norm) |
(7.9) |
(15.0) |
(44.5) |
(96.4) |
|
Profit After Tax (FRS 3) |
(8.4) |
(48.5) |
(200.8) |
(228.3) |
|
|
|
|
|
||
Average Number of Shares Outstanding (m) |
3.5* |
42.9* |
247.3 |
257.8 |
|
EPS - normalised ($) |
|
(2.25) |
(0.35) |
(0.18) |
(0.37) |
EPS - (IFRS) ($) |
|
(2.38) |
(1.13) |
(0.81) |
(0.88) |
Dividend per share ($) |
0.00 |
0.00 |
0.00 |
0.00 |
|
|
|
|
|
||
Gross margin (%) |
28.1% |
31.3% |
10.7% |
32.2% |
|
EBITDA margin (%) |
N/A |
N/A |
N/A |
N/A |
|
|
|
|
|
||
BALANCE SHEET |
|
|
|
|
|
Fixed Assets |
|
13.0 |
13.1 |
78.1 |
139.1 |
Intangible Assets |
5.2 |
4.4 |
0.0 |
0.0 |
|
Tangible Assets |
7.4 |
8.3 |
12.2 |
22.4 |
|
Deferred tax and other |
0.0 |
0.0 |
1.0 |
0.9 |
|
Bank deposits/securities |
0.0 |
0.0 |
64.4 |
115.0 |
|
Restricted deposits |
0.4 |
0.4 |
0.5 |
0.9 |
|
Current Assets |
|
9.9 |
676.1 |
1,311.9 |
1,064.3 |
Stocks |
3.5 |
3.3 |
11.2 |
19.4 |
|
Debtors |
2.4 |
1.8 |
9.3 |
12.8 |
|
Cash |
3.9 |
585.3 |
853.6 |
685.4 |
|
Bank deposits |
0.0 |
85.6 |
437.6 |
346.7 |
|
Restricted deposits |
0.0 |
0.1 |
0.1 |
0.1 |
|
Current Liabilities |
|
(4.4) |
(6.7) |
(32.0) |
(37.0) |
Creditors |
(4.4) |
(6.7) |
(16.7) |
(27.9) |
|
Short-term borrowings |
0.0 |
0.0 |
0.0 |
0.0 |
|
Other |
0.0 |
0.0 |
(15.3) |
(9.2) |
|
Long-Term Liabilities |
|
(6.8) |
(15.5) |
(13.7) |
(16.1) |
Long-term borrowings |
(2.1) |
(2.6) |
(4.4) |
(13.1) |
|
Other liabilities |
(4.7) |
(12.8) |
(9.3) |
(3.0) |
|
Net Assets |
|
11.6 |
667.1 |
1,344.2 |
1,150.3 |
|
|
|
|
||
CASH FLOW |
|
|
|
|
|
Operating Cash Flow |
(11.7) |
(12.6) |
(38.4) |
(88.8) |
|
Working capital |
(0.8) |
2.9 |
2.7 |
(1.2) |
|
Exceptionals and other |
(0.2) |
(0.0) |
(7.0) |
(2.1) |
|
Tax |
0.0 |
0.0 |
0.0 |
0.0 |
|
Net Operating Cash Flow |
|
(12.7) |
(9.6) |
(42.6) |
(92.1) |
Net Interest |
0.0 |
0.2 |
3.7 |
17.5 |
|
Investment in intangible & tangible assets |
(0.6) |
(1.4) |
(9.8) |
(9.4) |
|
Acquisitions/disposals |
0.0 |
0.0 |
(74.6) |
(219.5) |
|
Equity financing |
14.6 |
679.0 |
805.7 |
0.0 |
|
Dividends |
0.0 |
0.0 |
0.0 |
0.0 |
|
Other |
0.0 |
0.0 |
0.0 |
(0.0) |
|
Net Cash Flow |
1.4 |
668.1 |
682.4 |
(303.5) |
|
Opening net debt/(cash) |
|
(3.8) |
(1.8) |
(668.3) |
(1,351.2) |
HP finance leases initiated |
0.0 |
0.0 |
0.0 |
0.0 |
|
Other |
(3.3) |
(1.6) |
0.4 |
(28.7) |
|
Closing net debt/(cash) |
|
(1.8) |
(668.3) |
(1,351.2) |
(1,018.9) |
Source: Company data. Note: *Adjusted for 1:50 reverse split effective June 2020.
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