Q3 2022 Nano Dimension Ltd Earnings Call
No.
Good day, ladies and gentlemen, welcome to today's conference call to discuss nano dimension third quarter 2022 financial results and quarterly update.
My name is Betsy and I'll be your operator for today's event.
On the call with US today are chairman and C E L. L C.
Yeah, and Julien Letterman head of corporate development.
Before we begin may I remind our listeners that certain information provided on this call may contain forward looking statements.
And the Safe Harbor statement outlined in today's earnings press release also pertain to this call.
If you have not received a copy of the press release. Please do it in the Investor Relations section of the company's website.
I will begin the call with a business update.
Last question answer session at which time, yeah ill will answer your question.
I would now like to turn the conference over to nano dementia, Chairman and C E O.
Please go ahead.
Thank you very much and good day to everybody.
We're going to go up.
Sure hopefully everybody has it in front of him.
We finished.
Beautiful quarter, often Mendoza revenue.
Which takes us to about $31 million of revenue over three quarters, comparing two or three quarters last year.
Hundreds and hundreds of percent above of almost 1000.
And comparing to the last quarter, a similar period last year, it's also $6, 50% so.
We are happy about it and we have certain criticism at ourselves, which we'll be talking about but we'll start with the highlights will go through what we think should be improved.
So on the highlights which are not numbers highlights my provider.
The milestones in the business first and foremost.
M&A and investment activity, we acquired relatively a small company, but probably with the largest potential to grow from all the acquisitions were quiet until now so I'm not the chroma take in Netherlands, with an amazing additive manufacturing technology for metal.
And so demand mix based on deal be direct or digital light processing.
It's something we look for longtime size of the company. It was relatively small less than 10, Mendoza and revenue, but it was a subsidiary for many many years of a much larger company than it was in different business. So it was growing.
Behind the scenes.
We believe that the growth potential is more than anything we acquired until now and it would be already manifested as we go forward this year they'll finish.
And the wife water under us with you're already ahead of the projections last year.
On the fabric side.
First AAM company, we acquired a year and a half ago major advancement in the material.
People remember I remember I told you early in the game that whoever speaks about additive manufacturing.
In general there is the manufacturing is joining specific is it technology of robotics automation is missing the point and even manufacturing main core technology is material.
Materials.
Process and process.
And major advancements here in February .
Which will was the main.
Kind of.
Looking.
Oh for substantial sales because it took us until now since we acquired them to develop the new materials. So that's very good Ami.
Vacation development I should say it was not the reason here, we have a very very exciting.
Exciting advancements in the materials and Amy as well.
Which enabled application development, we have three new materials that are much better than the previous materials are going to be released to the market at the beginning of the quarter and next quarter and they are going to be applied for all the models of the machines, we have including backwards compatibility, which is very very important.
Customers are very excited and we had just a.
Some months ago Hum customers users conference in Munich, We had 40 people.
24 customers.
Including very high profile ones with chicken mentioned for which reasons and excitement there was it was felt across the board.
And finally last but not least.
In spite of the amount of cash we have.
We are still operating the way we operated last year and so much is the acquisitions. We are frugal, we're not spending money on acquisitions with just foolish.
Multiples that are totally unacceptable, which was done by everybody around us and we relate the same way to management of our overhead which is not acquisitions.
Off our manpower in this quarter.
At the beginning of the third quarter.
This was not easy and a company that is growing and where the employees and executive know that we are relatively comfortable cash wise I still and.
And we still yeah, then myself insisted on reducing the head count because we felt when the company grows so fast there's enough said that weekend and it resulted in reduction of $10 million expenses level on this quarter comparing to.
Who are the original budget, which we're very proud of.
No big no big to focusing on the numbers, which are important so the revenue was $10 million this quarter, a $31 million for the three quarters gross margin deceiving because obviously the ifr S includes a lot of noncash expenses and for sure shares.
Grunting et cetera, but look at the 29, even the twins benign, which is net and it's a real gross margin is a bit lower.
Our typical gross margins about 40, and it's a combination of margins.
Above 64, the new machines, and then about 40 38 for the more machines than the later stage in the lifecycle is brought up so why is it lower this quarter. The answers are pretty clear and I'll speak about it in the next slide.
EBITDA.
It's not minus $24 million includes about a half million dollar of investment in R&D.
That basically means that if you guys told me that if we didn't have the belief in the huge.
Multi hundred many of those potential of the additive manufacturing as tonics, which demand is still in an investment of about $13 million a quarter in R&D.
We could close cut that will sell debt and within two or three quarters, we will be making money, we're not going to do that because we're not going to give up the opportunity, which we believe will lead us to a well we promised it well. He does so it is still important to know that as we look at the EBITDA.
Half of it more than half of it is an investment in R&D and the rest by the way it was investment in developing the go to market after the acquisition.
The net cash used in operations was $22 $3 million, which is more than $10 million less than projected our projected.
Run rate for the whole year was above 100 million daus.
The cash spend on the investment and as you'll see in 'twenty. Two is a rate of about 80 million to.
The $90 million a year.
Our backlog is.
And typically high.
And the reason is it will be discussed in the next slide.
Our cash is Oh actually I can speak about it now.
And I guess just 1.05 no.
The reason that backlog is high as is because in Europe .
Yeah Yeah.
<unk> of the conflict in Ukraine, and the result of the supply chain.
Hold backs.
It caused our customers didn't cause us problems our customers that both machine. When she is asked to deliver them either this quarter or even next year.
So a lot of revenue from this quarter was held back and postpone but it is on backlog, which means signed purchase order. So you will see the results in the next quarter. This is also by the way a reason why the gross margins were reduced in this type.
Type of product because I think it's all by the way in very gory details in the nucleus because as we sold out of the door less machines certain overhead in Cogs, which was fixed.
Is of course manifesting itself in percentages of revenue is higher number of Cogs lower number of gross margin.
Cause the revenue is lower but that is going to correct itself.
Between the next quarter already and maybe even during the next two quarters.
Some information about this acquisition name as mentioned before.
As you heard from my voice, we're very excited about it.
The activity and the type of materials are shown here in the picture.
We are expanding already the portfolio and we are expanding the the go to market. We applied all our go to market forces.
We have around the world they already since the acquisition in July and of course in training in these machines and we're starting to sell them in North America, which was almost not so.
And we are expecting very very positive results from growth as I mentioned before.
This is just a manifestation of what I mentioned earlier about R&D.
There's no way a company can be profitable when it's invested 52% of its revenue in R&D.
Our business model, which we are running on a five years basis is showing that brought stability.
On a quarterly basis will happen in 2020.
Five.
And at this time the ratio of the R&D to their revenue is going to be down below 20.
So is.
Is oh I should correct myself. The R&D is not 50% of the revenue is 52% operating expenses, which is much much less than 52% of revenue, but you'll have the actual numbers in the left so that's easy R&D is $18 million a quarter out of this $18 million a quarter.
My estimate.
Is.
The R&D for <unk>.
And Mi is a much more than a half.
Yeah actually closer to $14 million. So it's always why I said before that we are.
Very encouraged with the results in the <unk>.
Products in the Ami and which are coming to the market in the next two quarters, because that's what's going to lead us to the growth as expected and profitability.
This is just a comparison of our cash divided by our annual run rate. So if you take us and three competitors in the market by the way that's not direct competitors.
But at least the same market you can see that we have for almost 14 years. If we continue to burn cash the way we are and we're not going to as you already heard I cut it even this quarter.
But there's so many continue at $88 million to $90 million a year.
Here, we have 14 years without acquisitions and then the other company, who says between less than a year or two.
Around three years. So we are very comfortable that we're not going to go back to the market to raise more money.
And we are.
Comfortable that doesn't go into big 14 years to spend this money.
Because we're spending more on acquisitions and.
And wait for the news is coming this year and earlier.
I mean 2003, an earlier two does with its been earlier and.
It's all aimed for profitability with spare cash as we need as much as revenue for the.
The three months and nine months I've mentioned before on the right side.
You see them.
On the right side of the quarter and on.
On the left side.
And I think I'll pass it on.
And then on the left side of the revenue and you can see how.
Three quarters nine months. The number is it's the only one and a half I've mentioned before and the gross margin is accordingly around the 11 and change.
Vision the vision of the company has not changed.
<unk> is a derivative of the vision we.
We are aiming to build a network of very smart machines.
Additive manufacturing and editing of electronics, which are going to serve us as devices on them.
Manufacturing and other cloud manufacturing network, both of which the networks and the machines are going to be run and directed by a deep you are deep learning technology.
And if you want to use an analogy well, which we'll describe it the best way we are seeing the industrial market moving forward to become your manufacturing when you need it where you need it.
And if you need it and the rest is staying as digital inventory on the cloud.
And the analogy is thinking today about the.
Paper industry in P D S.
You don't have to buy a printer you buy award process or.
Vacation and you buy the PDF from Adobe or whoever and you work your product.
On your computer and you printed where and when you need it.
And if you need it in England at your lawyers obvious you'll send it to the cloud.
And it'll be printed there.
The same vision, we're seeing for cloud manufacturing, especially if the edge devices.
Manufacturing machines for electronics, and so I'd, rather do manufacturing so that is our vision and as we built we know we're not going to have all the types of machines, but we have certain technologies. It will be mastering the edge machines for certain type of.
Products and we are focusing on the software and artificial intelligence, it's managing this network and managing the machines as edge devices.
And the vision is described here I'll, just really quickly to you.
We wanted to slander that'd be manufacturing in a different way many fiction tonics.
Digitized.
Sector with environmentally friendly in the country efficient editing.
Fixing that fits the definition of industry 4.0, So one production step on version of the designs to functioning.
<unk> devices now.
You all realize I'm sure that the focus of this vision initially is on high mix low volume that's where.
Do you think sales when you have very very large amount of designs and the manufacturing bed design is not 40 million pieces.
The industries that are served by this kind of profile is.
Is aviation of IONICS Aerospace advanced medical advanced our automobile.
Advanced.
In the industrial and putting in energy and of course.
Oh, we used our array of research institutions in the economy and all of our products are aimed.
Including this vision to this specific vertical direction.
Now.
Let me step off the presentation here.
And.
Mentioned to you there.
Yeah.
The mountain something would go.
We had our Investor Conference in New York, which was very very successful we were not the only participants many many companies.
This debate and we met 35 to 40 institutional investors.
And after we finish the presentations one on one.
We did a survey.
We wanted to get feedback from our investors some of them were behind versus some of them by the way where new investors of course, so the feedback.
Is not qualifying voice rule because it was the unnamed unanimous.
But we had about 30 40 response with about seven responses that were.
I would define them as criticism or request for what is not being supplied and I wanted to go to this we're supposed specifically I'm not ready to go to the positive response, obviously still self serving but it's not as important as it is important to us to fix what investors feel is missing. So I'll just quickly go through that for you.
It may cover a part of the question is do you are having.
Its shoulder or it may not hopefully it will help so.
So first question is it was very hard to understand organic growth story in house shoulders are served by buying companies without near term incremental upside.
So the response to that is first of all all of the companies we acquired.
Bar none.
The one exception I am sorry.
It grew organically since we acquired them.
Which is an amazing achievement. So the company grew the growth from $10 million to said to rate. The run rate of 42 is combined frankly, mostly from organic growth because this year, we acquired only a kind of one and a half company Jewish.
Because the first the last company we acquired in July it's not even appearing on the numbers. So the organic growth is inherent.
Many of my most of it came because we merged the companies.
We merge them into our go to market and we leverage our go to market to sell more and therefore, the organic gross growth coming from there the only exception, which I promise dimension.
As I spoke before the situation in Europe for the company.
That is an editing of electronic.
And there was for instance, a reduction of one and a half million daus in sales don't break day before just from a Russia and Poland.
Which was a very major number and 75% down on that section because we stopped selling to Russia for obvious reasons and Poland stopped ordering.
And Oh. This is the exception by the way at the same time the same company, we took them to the United States and grew the Arabian United States by 60, 70%.
Yeah, just organically. So goes to show you second question. One issue. We have is how to value. The company was relatively low revenue, especially with respect to such a large cash balance well.
It's simple.
Actually.
You take the cash balance.
That's worth cash.
And to be fair.
We had the best bonus is one and a half billion those about a year and a half ago with more February 2021.
We have close to 1.2, including investments today.
So we only spent 300 million daus out of which half of it was acquisitions and half of it was operating cost.
And we're very proud and affected we didn't spend it but we don't intend to continue not to spend it with just the intent to spend it smartly. So what is the value for our company first of all it's valued at $1 $2 billion. Then you take our business, we have a 50 or 45 million.
<unk> million dollars run rate business, which is very high tech growth business advanced technologies. So how much does the 45 million daus business values. It's up to you. It can be valued one time investment to that one time revenue two times revenue five times revenue. If it was if it was a year in Africa.
Finally, the 10 times revenue.
Revenue was off $1 billion of had been indoors lost one point due is 1.7 divided by three are doing it in a different malicious you can find out where the shares should be seven or eight but I'm not I want to say what the share should be I'm, just I wanted to say very simple to value our business cash.
Cash plus the value of the business is today the value of the business is clear because the numbers are much clearer and the growth is there.
Yeah by the way our revenue.
Over the last two years only went up by 2000% than more so.
Another way to give you exact.
Guideline or a tool to measure what is the worth of the business. First question was a person that says I wish to better understand the Companys acquisition strategy, especially in light of looking at so many companies.
Since we have Mr. Letterman here and my voice is getting at is of course and he is heading with a team of four five very talented people.
Implementation of our strategy of acquisitions.
Well I won't just be few words about it please.
Hi, Good morning, good afternoon, wherever you are or our strategy as it is generally two pillars to it one is technology.
As commercial on the first one on technology, it's about hardware software and in particular material science companies that can help us leapfrog, our R&D pipeline.
Pipeline to get us to where we want to be faster.
And then secondly on the commercial side, it's about acquiring I would say commercially successful businesses that are selling products and services to the same and customer verticals I think that's a very important aspect of what we're doing.
To give a few examples briefly.
On the technology side deep Cube is an exemplary example of a software specifically AI that is a key technology on the commercial side or acquisition. Most recently of AMETEK Informa Tech as an example of that the products, particularly the printers that they make and sell they sell to the same end verticals that our other businesses do.
A third example, and one that's particularly interesting is our acquisition going back almost a year now a S. M Tek, particularly interesting to us because it is a technology acquisition and a commercial acquisition. This is something whether these three varieties that we plan to do significantly more in large part because of the market.
<unk>, which I'm sure I had been discussed before and we can elaborate on later.
The one thing we don't do the acquisition strategy is we don't buy companies that has to be maintained afterwards as a silo standalone subsidiary, we're not in that business, because theres no synergies no growth and no eh delivery of dollars to the bottom line.
The second thing about acquisitions is this size as much as I am concerned I much better by the company with 200 million to also revenue of the company with 10 or 20 or 30.
We've been looking at it we've been negotiating that for it I would say two years and we said no to everything.
Other than what happens over the last quarter and a half we are starting to see finally, the numbers shrinking down people don't ask for five to 10 times revenue anymore.
And the large companies that we have looked at none of them other than one was sold.
And Oh total preference is to biologic Robbins as long as they fit the guidelines.
Well described by <unk>.
Right.
Now a lot of feedback large cash balances that are just on the balance sheet, our nonstrategic assets and the company will be pressured to spend it.
Very good comment.
And let me tell you something.
And that cash is not strategic question, but kiss catch can buy strategic.
Which means cash is strategic.
As it and potential if you spend it right.
If you spend it wrong, because you're under pressure because questions like this are being asked.
And it is not a strategic asset and then it's going to become a wasted effort.
So oh.
I'm, sorry tour for the personal have discretion, which I don't know, but I'm, telling you I am totally committed not to spend your money.
Unless they think it is converted to a strategic asset which it is everything we spend it until now it was and hopefully.
Few things that are not able right now.
We're going to make you even.
Because of the size and their strategies so.
Today look at our competitors companies in this industry or anything between.
One and a half years of survivability.
With their cash to less than a year.
And that's changed that makes cash much more strategic in regular times and it makes it positive for sure.
Myself as an investor and you as investors because reduces the chance of going to the market and needing to raise money.
And the lower valuation as the market delivers right now and people know our industry know without name certain companies that raised over the last half of year emergency cash evaluation of half unless.
The valuation before and of course they will.
Took them down.
Next question and Mr. US why did the company invests and started this I don't want to invest in companies invest in other public companies.
Particular in the same sector I agree with disbursement of 100%.
He is not attractive for me as an investor or for you to invest in public company, we're investing in public companies.
This is one of a kind I explained a few times before I don't want to get too much into details, but it is a strategic investors. So it's so digit investment which is explained in the email when we announced it. Please read it it stays very strategic we are now the largest shareholder of strategy as much as we know.
It started just came out with the last quarter result, you were the only company in this industry other than us.
And the bigger of course that came with good quarter results without excuses. So we're very happy with them and we're looking at this very favorably as much as what is going to happen in the future, but we're not going to do other investment in public companies. It's definitely this gentleman is right.
Investor feedback about.
Following the stock a long time.
And.
Sorry, that's.
That's not one of the ones that next one the market cap in cash value.
I have a disconnect.
And this is concerning the company's hydrobromic acid too fast or there's not a real business to support well. The FERC question. It stands from a social lack of knowledge, which is fair because this is probably a person metals the first time.
So our company is not burning cash to first I described to you that because we are burning in the 14 years, we can be living with that obviously is not going to be the case.
And do we ever really business or not well, we have a 45 or 45 or $43 million to $45 million run rate business with gross margin, that's growing and we spoke about it enough. We think it's real and it's growing.
And last but not least.
With reluctance to buy back shares the company must do solid acquisitions in 2023.
Two comments about that.
First of all I agree that we must do.
Solid acquisitions in 2023.
Secondly.
Regarding reluctance to buy back shares.
Well.
Watch us.
We have a year to do that.
And we know to value on their board is bothering on a monthly basis.
When and how much to to buy.
And you will hear about it.
Until now I think I went through the seven comments I wanted to go through and I think it's time to let evil, ladies and gentlemen.
Ask your questions and we'll be happy to answer.
We will now begin the question answer session.
That's a good question you May Press Star then one on your telephone.
Pat.
If youre using a speakerphone please pick up your handset.
<unk>.
To withdraw your question. Please press star two.
At this time, we will pause momentarily to assemble our roster.
The first question.
Comes from Ashok Kumar with Bank equity. Please go ahead.
But yeah, a couple of questions. The first one is on the supply chain of components. So are you seeing an ease up there, which should help support and a faster organic growth and you also talked about our cash burn at the R&D right. So.
Our R&D is about 60% of cash upon you know now and are you a cash burn of about 18 million lives.
On average you talked about R&D dropping to about 20% of our expense ratio by 25 or so.
Currently it's about 60%.
And so I'm, just an absolute numbers right. So what do you see that occurring.
5 million plus or minus so today.
The third part is the gross margin trends I think you also highlighted a 65% on new machines in.
Hum.
Traditional.
Surface technology with increased focus on software and a service with.
Which is not part of your revenue stream now where do you see that that same timeframe pretty fine. Thank you very much.
Okay, Let me start with the second and a third I don't remember the first one but the second one was about the R&D expense.
Let me make it clear because I think it was a big mistake in this slide and I kind of maybe I've confused you our R&D expense today as a percentage of operating expense is 51%.
Our business model leads to R&D.
Going down as a percentage of revenue or less than 20% of revenue.
That is where the profit starts to come up at the bottom line EBITDA and below now in order to reduce the R&D to less than 20% of revenue. There's two ways of doing it a increasing revenue be reducing the actual dollar spends on R&D, we have a very clear business model moving forward.
The only assumption that are less non there is of course, what acquisitions will come on the way and we have certain assumptions about acquisitions as well and in 2025. It shows that the profit on the EBITDA level come somewhere in the middle to the.
Third quarter of the year.
And that's exactly when the EBITDA so at the R&D level of in percentage of those below 20% of revenue.
And and it goes.
Frankly.
It depends on the how fast the revenue grow if their revenue grow fast enough to fit this model, we're going to continue to invest in R&D in order to accelerate product development and your technologies.
If the revenue grows a bit slower than we will reduce the amount we spend on R&D, but will choose where to reduce it. So we don't risk our innovation, which obviously create the revenue moving forward. So the last question that you asked was about <unk>.
Gross margin in services and software moving forward.
We have a lot of investment in software now.
Which includes.
It all comes through in the concept that we believe that.
And the analogy I gave you and when you print documents.
You don't think about your printer you buy the printer from Lexmark, though H B O wherever you'd think about what kind of software you're using to design. The document is the same for product we are focusing on design and therefore, we're focusing on adding.
The software to the mix, which includes <unk>.
Software potentially in the future as a service and software as.
Part of selling the machine and we see this starting to affect the numbers and the end of 2023.
And I'm sorry, Ashok can you remind me the first question.
Oh, Yeah. The first question was just basically a supply chain components right.
Oh, yeah ease up Scott.
The issue with our machines, what we did is when does the whole thing started since we were not stranded for cash we pre purchased a lot of our semiconductors that we need for our own usage in advance and by the way we paid premium for that but we didn't care.
By the way it does affect gross margin, but we didn't have any delay because of delivery machine delivering machine because of that so we're not affected what do we are affected is that our customers are affected by lack of components, so customer finances by editing manufacturing editing electronics machines, which I used.
Two.
Position in AD and Mount components on boats.
Since I don't have the components. They say we bought the machine, but we wanted to be delivered next year, but that's the effect on us not by affect on our manufacturing.
And one last question on your M&A strategy, you have been very disciplined in terms of acquisitions.
And then you talked about having bought it with technology and our commercial.
Our strategy in that realm.
The acquisition of the Polish company was at a sub of.
The large American company it looks like you're open to larger acquisitions, and then how that fits into this cloud manufacturing strategy that machine learning deep learning and so on are you talking about.
Alright.
Very good excellent question and first of all it wasn't a Polish company that happened to be Netherlands company.
But close enough with north.
Actually northern West M.
The.
Component or the component in the decision algorithm of what to buy.
Which is derived from our honor.
Ownership and our achievements in the deep learning.
Algorithms and artificial intelligence is critical all the companies we buy.
Yeah.
Yes, very small exceptions.
We will gain from applying the artificial intelligence deep learning that we have into the machine, which would increase there.
The throughput.
Especially true increasing their yields by having a very smart.
Smart robotic branded in real time can identify errors in printing and correct them or stop the printing so increases the yield no artificial intelligence deep learning machine exist like this in the world today.
And do it in real time without the millisecond response time other than.
And a tesla actually and probably in an uncertain deep learning in our space technology Oh.
And in missile technology, but other than that we have at the difference is.
They have to do it over in hardware.
We have the patents and we did it in software and so he can work actually with a regular computer inside the machine.
So that's point number one and about acquisitions and point number two is yes, we are looking at larger acquisitions larger acquisitions and the way they fit.
The cloud manufacturing.
Concept.
Is that the machines that the or the companies are acquiring and manufacturing of the machines through the integration of the.
Deep learning is going to connect the cloud and enabled through the software the developing design.
So the cloud.
Clothing inventory subject to IP protection certain defense companies will do it on a private club and downloading it straight into the machine, which is a micro center for manufacturing and it's being printed as needed and when needed. So it fits beautifully.
And I'm actually very very excited about the about the concept this concept.
Thank you very much and all the best.
Thank you next question.
The next question comes from Margaret Crow with Edison Group. Please go ahead.
Hello. Thank you for taking my question I have a couple of them mainly related to our curriculum.
Who.
Firstly.
Could you talk a little more about how you are.
Absolutely I'm, so glad you can be.
Quick question too.
Remove that I know that you.
You talked about.
Following on from that.
How.
When should investors.
Oh, Hey.
As a result of the integration or are there.
Robert and of that already with regards to cross selling and.
Integration of the cube technology too.
You know existing systems that you have.
Yeah.
And then the third question.
Looking at.
But the cash pile with it.
<unk>.
And.
One alternative would be not a ton of acquisitions and then you'd have.
14 years or pass at the parent like to pass back.
Which clearly you're not going to do.
Could you give us any indication of.
Roughly how much of that cash you've got it mark.
So a quick question.
You've made it quite clear that valuations are more reasonable now so you've got much more to choose from.
Okay. That's great questions as usual you know the human brain or at least my brand is limited. So we remember the last question I will start with the last question I think that will go a bit quick.
And the cash.
It is earmarked for acquisitions.
In the next.
Three to five years is between six to 800 million daus.
We have certain assumptions about it we have some assumptions based on the multiples today of how much can it bring us revenue because multiples by now going much lower than two times revenue, even so it starts to become very very interesting.
And yes, we're not going to wait for 10 years, we are hopefully not going to wait five years, because we'll accelerate until now we are ahead of our plan when I had this five years.
Total and program I hate it since two years ago and we are ahead of their plan. So that's point number one point number two the DC technology. We are looking at the acquisitions as I mentioned before and the deep learning.
It's a very very advanced technology. It has one if you want to call. It. This advantage is huge amount of data from the field, which means it.
A machine that will fit all.
Our engine of deep learning.
Needs to have a lot of data as manufacturers can be data through all kinds of sensors that can be data about temperature data, but if vibration data of course visual data.
The terminal data.
So we are measuring if if they don't manufacture. These data then it will take longer time to implement a deep group into the machine. So we're looking at acquisitions also based on how many machines are built and if the data rich because if that data rich the effect of the deep learning as a self learning.
Knowledge it is able to correct without human interference is much much more.
Mike is maximized actually now.
Going back to the question before you asked about how do we do this integration in order not to keep it in a silo for months and was the result of when we will see the results with this integration I'm impressed I remember all of your questions. So.
The integration is an example.
We acquired a year ago, no more than a year ago actually exactly in November the additive electronics company in Switzerland.
And since then.
We converted all of the North American sales into our go to market.
And as a result of this theres no market in North America almost doubled.
Organically.
And we.
We already started there.
Whole infrastructure, we're going to build our next machine and Etsy manufacturing electronics in Switzerland, not in Israel because it's.
Because it's better frankly.
Better in building machines. They are building machines for 20 something years similar kind of technologies. So we have started already to build machines.
In Switzerland.
Which originally was built in Israel say third point.
We are already applying artificial intelligence technology too.
The machines that were built in Switzerland and to develop in this case they didn't have enough data. So we are developing the sensor array to generate enough data. So we can apply AI. Another example is a company in that way quite a Netherlands only in July I think I mentioned before.
Since July we're already the trained all our salespeople the go to market, which is much bigger than that company had to sell their company now since it was in July August September October November .
They already have.
Revenue ahead of what the budget did themselves, but what.
What youll see it is next year I'm not talking about over it which is of course very easy you know we have one finance department, we don't have a whole array of finance and administration people in every company, we buy and we do it move them around so become very very efficient and our management team.
Think about the falling we have 12 people in our senior and mid management team.
Five of those deals are all 10 of those are ex Ceos.
10 of 12 X deals they joined us.
I guess with the excitement of working with such a an open ended and beautiful plant.
Development and growth plan.
But out of this five were from acquisitions, which means our management team is of 12 is integrated with five which are X founders well its general managers of the acquisitions. We did so that's closing up on your first question.
Next question please.
That's it for my question so.
Is it to somebody else now I think thank you very much. Thank you very much that's fully.
Okay. Okay.
Okay, guys. It's 15 minutes I think Oh this is oh, but he has a day of work ahead of them.
Unless there's other questions I want to thank you very very much for participating. Thank you very much for your interest and again you have our emails phone numbers and you know how excited we are to speak with you. So even if its offline.
Looking forward to that thank you very much.
Okay.
Thank you.
Thank you.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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