It is known that the stock market does not necessarily follow “real industry” trends. Voxeljet is no exception. After overcoming startup challenges, the German large format binder jetting company has been growing steadily, with voxeljet fiscal year 2018 closing at +12.2% and some $26 million in generated sales, after a +40% q4). It may not seem like that much (but you should try selling 26 million worth of 3D printers and 3D printing services) and certainly does not seem like much to Wall Street analysts, with voxeljet stock now steadily trading near its historical minimum of $2.
“We had a very strong fourth quarter both financially and strategically, implementing several long-term drivers,” commented Dr. Ingo Ederer, Chief Executive Officer of voxeljet. “Our business continues to perform well, reaching 40% year-over-year growth during the fourth quarter. We had significant new customer wins both domestically and internationally. In fact, we have sold more printers this quarter than in any quarter before. We are thrilled with our momentum through the launch of VJET X and remain on the offense, identifying and attacking opportunities to elevate our game, build on our momentum with new product launches and ensure that we deliver sustainable, profitable, capital-efficient growth over the long term.”
In fact, voxeljet seems to be doing everything right. The company has a clear vision for its future with its HSS fast polymer powder bed fusion printing technology. Its sand binder jetting technology for casting, unlike many other ones targeting direct 3D printing production only, actually can provide significant benefits in the short to medium term, streamlining current casting processes while enabling the production of better, geometrically optimized parts.
The only criticism that can be moved to voxeljet is its current inability (to use a euphemism) to effectively communicate these capabilities beyond the tight niche of its current clients, which are mostly foundries looking at AM with some skepticism (to use another euphemism). The automotive industry is great, however voxeljet also needs to more aggressively target creative companies (like Sandhelden for example, we love what these guys do) who can imagine new and innovative applications for its technologies and – more importantly – can help the company move beyond its core business (at least until more foundries fully understand the benefits of 3D printing). In order to do this it should progressively differentiate its marketing investment strategy, moving away form the traditional media it currently favors toward new media.
Putting the money where your printers are
This kind of activity, if carried out effectively and for a sufficiently long period of time, would probably help Wall Street analysts understand that voxeljet is not a company destined to grow by low double digits year in and year out but that it has potential for exponential growth, by concurrently entering a multiplicity of new manufacturing segments. Or it could continue to build safely, investing only on technology and channel expansion. At leastn until someone bigger and more powerful comes along and decides to go all in.
Research and development expenses increased to €6.3 million for the year ended December 31, 2018 from €5.5 million in the same period in 2017, an increase of 14.6%. This was mainly due to higher labor costs related to salary increases and higher headcount as well as higher consumption of materials to support existing and future research and development projects. Other operating expenses for the year ended December 31, 2018 were €751,000 compared to €1.8 million in the prior year period. Although this is mainly due to lower losses from foreign currency translations, I presume this also includes marketing expenses… which would thus amount to a bit over 1/10 of R&D.
The point of the matter is: why spend on R&D if no one knows about it?