Q1 2024 Nano Dimension Ltd Earnings Call
Operator: Good day, ladies and gentlemen. Welcome to Nano Dimension's first quarter 2024 conference call.
Good day, ladies and gentlemen, welcome to nano dimensions first quarter 'twenty 'twenty four conference call.
Operator: My name is Betsy, and I'm your operator for today's event. On the call with us today are Yoav Stern, CEO and member of the Board of Directors; Tomer Pinchas, CFO and COO; and Julien Lederman, VP of Corporate Development.
Betsy: My name is Betsy and I'm your operator for today's event.
Speaker Change: On the call with US today are your western CEO and member of the board of directors.
Tomer Pinchas: Tomer pinch F C. S O N C O L and Julian later, then VP of corporate development.
Operator: 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 pertains to statements made on this call. If you have not received a copy of the press release, please view it in the Investor Relations section of the company's website. A replay of today's call will also be available on the Investor Relations section of the company's website.
Before we begin may I remind our listeners that.
Speaker Change: Certain information provided on this call may contain forward looking statements and the Safe Harbor statement outlined in today's earnings press release also pertains to statements made on this call.
Speaker Change: If you have not received a copy of the press release. Please view it at the Investor Relations section of the company's website.
Speaker Change: A replay of today's call will also be available on the Investor Relations section of the company's website.
Operator: Yoav will begin the call with a business update, followed by a question and answer session, at which time the management team will answer questions. I would now like to turn the call over to Nano Dimension's CEO and member of the Board of Directors, Yoav Stern. Please go ahead.
Speaker Change: Yeah, I will begin the call with a business update followed by a question and answer session.
Speaker Change: At which time the management team will answer questions.
narrow dimension: I would now like to turn the call over to narrow dimension, you'll see Oh and member of the board of directors, you'll have to turn please go ahead.
Yoav Stern: Thank you very much, Betsy, and good day to everybody. Good morning, good afternoon, good middle of the day. We're going to speak today about the first quarter of... 2024 and some reflections on before and after. I will not read you the news release; you will hopefully read it, or you will be able to read it later. I'm going to speak into the presentation and give as much as possible time for your questions so we can lead it toward what's more interesting for you.
Speaker Change: Thank you very much Betsy and a good.
Speaker Change: Good day to everybody. Good morning, good afternoon, good middle of the day.
Speaker Change: We are going to speak today about the first quarter of <unk>.
Speaker Change: 2024, after some reflection on before and after and Oh.
Speaker Change: I would.
Speaker Change: <unk> read the news release.
Speaker Change: Hopefully ready to or you will be able to read later I'm going to speak.
Speaker Change: And so the presentation and give as much as possible time for your questions. So we can lead it toward what is more interesting for you.
Yoav Stern: To start with, we had a great quarter. Unknown Attendee, Yoav Stern, Tomer Pinchas, Ashok Kumar, Nano Dimension, Unknown Attendee, the reshaping nano initiative which we started last quarter. And it was a very important initiative because it basically embarked us on a direction of emphasizing profits and Adjusting the Business Model Toward Prostability Eventually, EBITDA Positive, etc.
Speaker Change: To start with we had a great quarter.
Speaker Change: Well is so low.
Speaker Change:
Speaker Change: Good thing, which was totally feeding.
Speaker Change: The reshaping nano initiative, which we started last quarter.
Speaker Change: And it was a very important initiative because it's basically.
Speaker Change: Embarked us on a directional emphasizing.
Speaker Change: Profits.
Speaker Change: And adjusting and.
Speaker Change: Business model, who have brought stability essentially EBITDA positive et cetera.
Speaker Change: Rather than.
Speaker Change: Just either too.
Speaker Change: I don't.
Speaker Change: It doesn't have a growth organic growth or acquisitions, just focusing on the top line of course adult blindness first by the way the top line here.
Operator: Pardon me, it appears we've lost connection with our speakers. Please wait while we reconnect.
Speaker Change: Pardon me it appears we've lost connection with the speakers please wait while we reconnect.
Speaker Change: Mhm.
Speaker Change: [music].
Operator: Ashok Kumar, Yoav Stern, Tomer Pinchas, Ashok Kumar, Nano Dimension, Ashok Kumar, Nano Dimension,
Speaker Change: Yes.
Operator: We've reconnected with our speaker lines. Okay, I'm sorry, ladies and gentlemen, some technology is not perfect in spite of everything.
Speaker Change: We've reconnected with our speaker line.
Speaker Change: Okay, I'm, sorry, ladies and gentlemen, something.
Speaker Change: Technology is not perfect in spite of everything.
Speaker Change: I guess, she we dropped off or you dropped off I don't know, where but I'll continue for where I was and if there'll be questions. So get back we had an amazing quarter of improving profitability. According to our reshaping nano initiative.
Yoav Stern: I guess we dropped off, or you dropped off. I don't know where, but I'll continue where I was. And if there are questions, I'll get back. We had an amazing quarter of improving profitability. According to our reshaping nano initiative, we went up to
Yoav Stern: is another important factor in this. I'm just trying to adjust the presentation. Your customers partnering with us is another important factor in this. Order. RF, for everybody that doesn't know it is, Radiofrequency.
Speaker Change: We went up to.
Speaker Change: Okay.
Speaker Change: Is.
Speaker Change: Another important.
Speaker Change: I'm just trying to adjust their presentation youll customers partnering with US is another important factor in this.
Speaker Change: Border.
Speaker Change: Our F. One and everybody that doesn't night is radiofrequency. This is one of the major application for our Ami additive manufacturing electronics.
Yoav Stern: This is one of the major applications for AME, Additive Manufacturing Electronics. We have proof of concept that new customers are wanting to use it. A lot of it is in the defense. We repeat sales to the Western Defense Agency. We have new customers in advanced electronics. This is only a small part of the achievements of this quarter. Innovation and securing a competitive advantage relate to how we develop our products and what achievements we reach while developing and investing in R&D.
Speaker Change: We have.
Speaker Change: The proof of concept that new customers are wanting to use it a lot of it is in the fence, we repeat sales to Western defense agency with new customers and advanced electronics.
Speaker Change: Some of the names you appear here, obviously defense the named does not appear we have two leaders in the new space industry, you can guess what kind of industries that in.
Speaker Change: And we have repeat defense sales.
Speaker Change: The repeat sales to a defense contractor. This is just.
Speaker Change: Small part of the achievements of this quarter.
Speaker Change: Our innovation and securing the competitive advantage relate to how we develop our products.
And what achievements, we reached while developing and investing in R&D.
Yoav Stern: AI services is a new business where DeepCube is actually starting to make money by itself. Not that we ever intended AI technology for an industry to be a profit or a revenue center, because we bought it and we're using it mostly to advance our machines in their AI for industrial accuracy and maintenance.
Speaker Change: AI services is starting business where.
Speaker Change: Deep UV is actually starting to make money by itself not that we intended ever for our AI technology for the industry to be a profit to a revenue center because we bought it and were using it mostly to advanced our machines in their AI for industrial.
Speaker Change: Accuracy and maintenance.
Speaker Change: Matt.
Yoav Stern: We have enough customers that have requested us to potentially do business with them just with the AI capability and install them in their machines, as long as they're not competing with us; we do it. On the robotics side, we increased the speed of our robotics additive electronics by a factor of three, 300%. And mostly, it's also used beside component mounting; it's used for solder paste.
Matt: We have enough customers that requested us to actually do business with them just with the AI capability and they install them into a machine.
As long as they're not competing with us and we're doing it.
On the robotics side, we increased the speed of our robotics additive electronics by factor of three 300%.
Matt: Mostly.
Matt: It's also used beside component mounting it's used for solder paste.
Yoav Stern: Ashok Kumar, Nano Dimension, Yoav Stern, Tomer Pinchas, Nano Dimension, Yoav, a highly important achievement. The reshaping nano that I mentioned before is all about numbers, obviously. If you look back with a reflection, on the starting from the left side of the slide.
Speaker Change: Spreading and this is a very very important competitive edge compared to our competition.
Speaker Change: And not less important is our digital solution and software we bought narrow would just announce it with the ESCO in the theory and.
Speaker Change: To become a one stop shop for digital printing solutions.
Speaker Change: Highly important achievement.
Speaker Change: The reshaping none of that I mentioned before.
Speaker Change: Is it all about numbers obviously.
Speaker Change: If you look back with their affection.
Speaker Change: Starting from the left side of the slide.
Yoav Stern: Since 2021, we had 150% compounded annual growth. Since 2022, we had 36% expansion of our gross margins. That's 36 actual percentage points, from 10% to 46%.
Speaker Change: Since 2021, we had 150% compounded annual growth.
Speaker Change: Yes, 2022, with 36% expansion of our gross margins.
Speaker Change: Sept 36 actual percentage.
Yoav Stern: Gross margin grew by 4.6 times. Operating expenses in 2023 and ahead were reduced by about a third, compared to Q1 of 2023. The most important point that we are so proud of is that our cash burn was reduced from $27 million a quarter to $7 million a quarter. And we're still moving ahead in the reduction of this, to the point that the year end on a quarterly basis will be close to breakeven, assuming the company remains as is without acquisition. Last but not least, and actually, one before last.
Speaker Change: From 10% to 46% gross margin grew by four six times.
Our operating expenses.
Speaker Change: In 2023, and our head were reduced by about a third.
Speaker Change: Comparing to Q1 of 2023.
Speaker Change: And.
Speaker Change: The most important point that we're so proud of is our cash burn was reduced from $27 million a quarter to $7 million a quarter.
Speaker Change: And we're still moving ahead and the reduction of this.
Speaker Change: To the point that the year end on a quarterly basis will be close to breakeven assuming the company is as is without the acquisitions.
Speaker Change: Last but not least and actually one before last.
Yoav Stern: The end of this situation. The industry situation is very well reflected by this graph. It shows you the following.
Speaker Change: The industry situation.
Speaker Change: The industry situation is very well reflected by this graph.
Yoav Stern: The left side, blue, is the combined revenue of the four industry leaders in 2012 and the combined profits, EBITDA, or EBIT, to be accurate. On the right is the situation in 2022, a year and a half ago, two years ago. Actually, it's been a year and a half. The combined revenue grew from $650 to over $1.5 billion, and the combined profit grew from positive to deeply negative. I wouldn't say it grew, but shrunk would be a better name.
Speaker Change: It shows you the following the left side Blue.
Speaker Change: Is the combined revenue of the four industry leaders in 2012, and the combined profits EBITDA.
Speaker Change: Our EBIT to be accurate.
Speaker Change: On the right is the situation in 2022, a year and a half ago two years ago.
Actually it's a year and a half.
Speaker Change: The combined revenue grew from 650 to over one 5 billion.
And the combined profit grew from.
Speaker Change: Positive too deeply negative I wouldn't say it grew.
Speaker Change: But shanghai will be a better name.
Yoav Stern: This is an indication, a manifestation, of a market that is growing, but poor business strategies and business models that destroyed otherwise good businesses. Meanwhile, the demand for editing manufacturing is there in the market because all those service providers, which are using multiple additive machines from different suppliers, which they're buying cheaply, are making money by supplying parts, which means the demand is there. It's just somebody in our industry, which I would say, including all of us, is not running our strategy right.
Speaker Change: This is the indication a manifestation.
Speaker Change: Off.
Speaker Change: Market that is growing.
Speaker Change: But poor business strategies and business models that destroyed.
Otherwise good businesses.
Speaker Change: Meanwhile, the demand for additive manufacturing is existing in the market because all of those.
Speaker Change: Service providers, which are using multiple additive machines from different suppliers, which thereby cheaply.
Speaker Change: We're making money by supplying pumps, which means the demand is there it.
Speaker Change: It just somebody in our industry, which I would say, including all of US is not running.
Our strategy right.
Speaker Change:
Yoav Stern: [inaudible] and we intend to try our best to change it because of two reasons. First, we have the theory and the analysis of what to do. B, we have the practical ability to do it, and C, we have the capital to effectuate the consolidation of this industry. Now, last but not least, the Bi-Bit program that some of you recommended for us to do a year and a half ago, and we listened, has proven to be successful.
Speaker Change: And we intend.
Speaker Change: To try our best to change it because of two reasons, a we have the theory and.
Speaker Change: The analysis of what to do.
With the practical ability to do it and see we have the capital to effectuate.
Speaker Change: The consolidation of this industry.
Speaker Change: Now at last but not least.
Speaker Change: The buyback program.
Speaker Change: That some of you recommended to for us to do a year now if at all and we listened.
Yoav Stern: We bought shares much below the [inaudible] We reduced our share count by 15%, and we have more inventory for this activity. [inaudible] If you're buying a shirt today, of Nano at $2.7 a share, beyond the excellent performance that we just spoke about, and beyond what we are discussing and promising regarding acquisitions, you're buying a share at $2.7, which is a discount, even over the cash of 4.1, and not considering the value of the business above. So, as I think I've mentioned in the past, certain people see a problem in every opportunity.
Speaker Change: Has proven to be successful we bought shares much below the cash value of the share between two to $3 a share.
Speaker Change: We reduced our share count by 15%.
Speaker Change: And we have more inventory for this activity.
Speaker Change: If you're buying a share today.
Speaker Change: <unk> nano at $2 $7 a share.
Speaker Change: Beyond the excellent performance that we just spoke about.
Speaker Change: And beyond what we are discussing and promising regarding acquisitions.
Speaker Change: Buying a share a $2 $7, which is a discount even over the cache of focal one and.
Speaker Change: And not considering the value of the business above it.
Speaker Change: So.
Speaker Change: As I think I've mentioned in the past.
Speaker Change: When people see no problem in every opportunity.
Yoav Stern: Unknown Attendee, Yoav Stern, Tomer Pinchas, Ashok Kumar, Nano Dimension, by far, and certain other people see opportunity in the program. When the share is below cash, that's the opportunity. I don't think you have a lot of companies with performance like that and yet the share is below cash. So this is my bottom line.
Speaker Change: Provident quote unquote being the share still at the lower price than it should be.
Speaker Change: Far.
Speaker Change: And seven other people see opportunity and the problem with the shares below cash desk opportunity.
Speaker Change: I don't think you have a lot of companies with performance like that and yet the shares below cash.
Speaker Change: So.
Speaker Change: This is my bottom line.
Operator: At this point, I would like to open up the session for questions and answers. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone.
Speaker Change: At this point.
Speaker Change: And Betsy I would like to open up the session for questions and answers.
Betsy: We will now begin the question and answer session.
Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble our roster. The first question today comes from Troy Jensen with Cantor Fitzgerald. Please go ahead.
Betsy: To ask a question you May Press Star then one on your Touchtone phone.
Speaker Change: If you were using a speakerphone please pick up your handset before pressing the keys.
Speaker Change: To withdraw your question. Please press Star then two.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
Speaker Change: The first question today comes from Troy Jensen with Cantor Fitzgerald. Please go ahead.
Troy Jensen: Hey, gentlemen, thanks for taking my question. Good morning, good afternoon. Quick question for you, Yoav: if you look at your Q1 or 2023 revenues, how much of it is, if you could break it down a little bit between like additive and robotics or the other sectors you're in, I'd just love to kind of get a bigger picture of your total additive exposure.
Troy Jensen: Hey, gentlemen, thanks for taking my question.
Good morning, and good afternoon, a quick for you to go out and just I'd be curious if you look at your Q1.
Speaker Change: Our 2023 revenues how much of it if you could break it down a little bit between like edited.
Speaker Change #100: And robotics are the other sectors, you're in it there's going to be kind of get a bigger picture.
Speaker Change #101: Total additive exposure.
Yoav Stern: Unknown Attendee, Yoav Stern, Tomer Pinchas, Ashok Kumar, Nano Dimension, Ashok Kumar, Nano
Speaker Change #102: It was about half.
Speaker Change #103: Form editing a bit less in Hoffman additive manufacturing, sorry, additive electronics and hot form additive manufacturing of all kinds, including electronics, including the micro mechanical polymers specialty special polymers.
Troy Jensen: Alright, perfect. Thank you for that. I appreciate it. And then also, Yoav, I think it was 1220, I think it's 1228, you guys had the announcement from Stratasys and the offer of 1650, if I remember correctly, but you guys have been extremely quiet ever since. I wonder if there is any update you can kind of give us on the status of when you think this validation cycle could start? And then I have one more question for Tomer.
Speaker Change #104: Alright, perfect. Thank you for that I appreciate it.
Speaker Change #104: And then also you love. Thank you James 12 20.
Speaker Change #105: I think it's 12 28, you guys had the announcement for Stratasys and the Entre for 16 50, if I remember correctly, but are you guys in an extremely quiet ever since they wanted it.
Speaker Change #106: Is there any update you can kind of give us on.
Speaker Change #106: Status on what do you think this reallocation cycle could start and then I've got one more question for the company.
Yoav Stern: And I remember you, of course, reminding me that when my kids used to be quiet in the room, I got very nervous. Yes, we were quiet. The reason.
Speaker Change #107: Am I remembering of course remind minister when my kids used to be quiet in the room I got very nervous.
Speaker Change #107: Yes.
Speaker Change #107: Okay.
Speaker Change #107: Yeah.
Speaker Change #108: Glad the reason.
Speaker Change #109: Yeah. The reason, we acquired is not worth doing bad things.
Yoav Stern: The reason we're quiet is not that we're doing bad things. The reason we're quiet is that, contrary to last year, when we did not manage to convince Stratasys to speak with us, this year, we have a very friendly discussion. It's intense.
Speaker Change #110: The reason that we acquired is because contrary to last year when.
Speaker Change #111: We did not manage to convince stansted to speak with US. This year, we have a very friendly discussion it's intensive and we are continuing our discussions about what we believe is a good solution for the industry and we are strategic partners because we are the largest shareholder.
Yoav Stern: And we're continuing our discussions about what we believe is a good solution for the industry. And we are strategic partners because we are the largest shareholders of Stratasys, 15%. And obviously, we are not competing with each other, and you know that very, very well. They know it as well, so we're in a discussion of how to proceed. And the reason we kept the offer out is that we don't want to rock the boat.
Speaker Change #112: Cost of sales is 15% and obviously, we are not competing with each other and you know that very well very well they know it as well. So we are in discussion of how to proceed and the reason we kept the offer out is we don't want to rock the boat eventually and obviously you know that the prices have changed since then.
Yoav Stern: Eventually, obviously, you know that the prices have changed since then. But we're not giving up the potential to cooperate. It's done right now on a very friendly basis. And Yoav and Yoav, the two Yoavs, are talking a lot.
Speaker Change #113: But we are not we're not giving up the potential to cope cooperate it's done right now on a very friendly basis in the oven.
Speaker Change #113: Yeah.
Speaker Change #114: Two you're talking to.
Speaker Change #114: Our laws.
Troy Jensen: Okay. Yeah, that's great to know. Alex, lastly, and I'll see the floor, but Tomer, if you could give me just kind of a sense of what revenue level you think you need to hit breakeven with all the restrictions that you guys have?
Speaker Change #114: Okay.
Speaker Change #115: Yeah, that's great to know.
Alex just lastly, I don't see deployment Tomorrow. If you could give me just kind of a sense of what revenue level.
Alex: Need to hit breakeven with all the restriction that you guys have planned here.
Tomer Pinchas: So basically, our plan is to reach breakeven towards the end of 2025, the second half of 2025. And assuming we are going to grow our business as long as, similar to this year, but 25 to 30%, the second half of 2025 will be breakeven.
Alex: So basically our.
Alex: Our plan is to reach a breakeven towards the end of <unk>.
Speaker Change #117: <unk> 25 second half with plenty of 95.
Speaker Change #118: Assuming we are going to.
Speaker Change #119: Well grow our business as planned.
Speaker Change #120: Similar to DCF by 25% to 30% the second half of 2025 will be breakeven.
Troy Jensen: Okay, awesome. Well, thanks guys. Congratulations and good luck.
Speaker Change #121: Okay awesome, well, thanks, guys, congrats and good luck.
Yoav Stern: Thank you, Troy. Thank you.
Speaker Change #121: Thank you Troy Thank you.
Katherine Elizabeth Thompson: The next question comes from Catherine Thompson with Edison. Please go ahead.
Speaker Change #121: The next question comes from Kathryn Thompson with Edison. Please go ahead.
Katherine Elizabeth Thompson: Hi, morning everyone. I just wanted to ask three questions. I'll quickly get the questions out.
Katherine Elizabeth Thompson: Hi, good morning, everyone.
Speaker Change #123: Just wanted to ask three questions I'll quickly get the questions outs and first.
Katherine Elizabeth Thompson: First, could you characterize customer demand at the moment and kind of how that might have changed over the last quarter or so? Secondly, just so I can understand the cost base that we're seeing for Q1 2024 after the reshaping nano program, is that now the kind of steady state level of cost, or is there more cost to be cut? And thirdly, should we expect to see you doing more share buybacks at a similar pace to what you've done over the last six months or so? I guess that's partly dependent on the share price.
Speaker Change #124: Could you characterize customer demand at the moment and kind of how that might have changed over the last quattro say secondly, just so I can understand the cost space that we're seeing for Q1 24. After the reshaping nano program is that now the kind of steady state level of cost always demo.
<unk> costs to be cops.
Speaker Change #125: And thirdly should we expect to see you getting more share buybacks at a similar pace to.
Speaker Change #125: What you've done over the last six months, so side I guess, that's partly dependent on share price.
Yoav Stern: Okay, excellent questions. And thank you for that.
Speaker Change #126: Okay excellent questions and thank you for that.
Speaker Change #127: Let me start by the first one customer demand compared to Q4.
Yoav Stern: Let me start with customer demand compared to Q4. We sell to about six or seven verticals; we're selling to six or seven verticals. So the customer demand is obviously typical for a vertical. I can tell you that, for instance, on the defense side, the market is very, very active, obviously because of the conflicts in Israel and the conflicts in Europe. Mostly, by the way, in Europe. In Israel, we don't feel it on demand, but in Europe, we do. In the United States, we do not.
We sell to about six or seven we are sending to six or seven verticals.
Speaker Change #128: So with the customer demand is obviously difficult to vertical I can tell you that for instance on the defense side.
Speaker Change #129: The market is very very active obviously because of the.
Speaker Change #130: The conflicts in Israel the conflicts in the Europe, mostly by the way in Europe, and Israel, We don't if we don't feel at night in.
Speaker Change #131: Bye bye demand, but in Europe, we do in the United States, We do.
Yoav Stern: And customer demand in other areas. In the general electronic field, some weakness in the German market, maybe because of the war itself, so we feel a little bit slowed down, but it's marginal on the periphery. It's not affecting our main business. Verticals, including medical, including academics, research institutions, we don't feel a change in demand. And as much as the second question.
Speaker Change #132: Customer demand in other areas.
Speaker Change #132: And the general electronic field.
Bit weakness in the German market, maybe because of the war itself. So we feel a little bit slowdown, but it's it's marginal in the.
Speaker Change #133: In the periphery, it's not affecting the <unk>.
Speaker Change #133: Main business and the other.
Speaker Change #134: Verticals, including medical including <unk>.
Speaker Change #135: Academics research institutions, we don't feel a change in the demand.
Speaker Change #135: In the month as much as the second question.
Yoav Stern: What is the cost basis in Q1? Is it going to stay, or is it going to be cut more? The answer is we are going to improve our cost basis, and it's going to be reduced from the first quarter, definitely. And you're going to see it in the next two, and three quarters to come, definitely.
Speaker Change #136: What is the cost basis in Q1 is it going to stay or is it going to be cut more the answer is we are going to improve our cost.
Speaker Change #136: Cost bases.
Speaker Change #137: And it's going to be reduced from the first quarter definitely.
Speaker Change #138: And you're going to see it in the next two or three quarters to come definitely.
Speaker Change #139: Okay last question.
Yoav Stern: Last question, and more shares to buy to purchase, share purchase, and acquisitions and investment in R&D is all about asset allocation, a very different three profiles of how you allocate your capital and what is the return. We believe that the return, in general, by investing in R&D and investing in acquisitions on a longer-term basis is much higher than the return on buying shares. Buying shares is a quick return because you buy shares right now for less than cash, and the result is immediate on the value of the company's balance sheet and, obviously, on the number of shares.
Speaker Change #140: And more shelves Dubai to purchase.
Speaker Change #141: Share purchase.
Speaker Change #142: And acquisitions and investment in R&D is all about asset allocation.
It's a very different three profiles of how you allocate your.
Capital and what is the return.
Speaker Change #142: We believe that the return in general by investing in R&D and investing in <unk>.
Speaker Change #142: Acquisitions.
Speaker Change #143: On a longer term basis is much higher than they were down and buying shares.
Speaker Change #144: The buying shares is a quicker return because you buy shares right now at less than cash and the result is immediate on the quality on the sorry on the value of the company's balance sheet and obviously on the number of shares.
Yoav Stern: So it's always a decision we're going to take on a quarterly basis. It depends on what the alternative ahead of us is. As I mentioned before, right now, the acquisition trail is pretty bubbly, and asset allocation is according to what we see in the immediate future, and we're using it accordingly. Right, okay.
Speaker Change #144: So it's always a decision we're going to take on a quarterly basis.
Speaker Change #145: Vans was delta they are ahead of us.
Speaker Change #146: As I mentioned before right now of the acquisition trail is really bubbly.
Speaker Change #147: The asset the location according to what we see in the immediate future and are we using it accordingly.
Katherine Elizabeth Thompson: Right. Okay, thank you. Thank you. The next question comes from Sol Zellman with Jerry Cure. Please go ahead.
Speaker Change #148: Okay. Okay. Thank you.
Speaker Change #148: Thank you.
Speaker Change #148: The next question comes from Zelman.
Speaker Change #148: Gentlemen, with Jerry Kent. Please go ahead.
Sol Zellman: Thank you, Betsy. Good morning, Yoav, and thank you for the excellent presentation. It's great to see that the quarter is starting off strong, and may it continue that way, especially with everything going on in Israel. Our prayers are with you.
Betsy: Thank you Betsy and good morning job and thank you for the excellent presentation and great to see that.
The quarter is starting off strong and may continue that way, especially with everything going on in Israel, how appraiser with you.
Sol Zellman: You know, the gentleman – I apologize, I didn't get his name – but the gentleman from Kent, Fitzgerald, touched on my question. He got off easy with the answer, but I guess I'd like to touch on it just a drop more. You know, investors and traders have this question quite often. When you look at, let's call it your investment thesis, which is, you look at performing trades and underperforming trades, when do you recalculate that thesis to see when you reverse or cut that underperforming trade within your portfolio?
Speaker Change #149: You know what the gentlemen, I apologize I didn't get it name, but the gentleman from Cantor Fitzgerald I touched on on my question.
Speaker Change #150: You've got off easy with the answer, but I guess I'd like to touch on it just a drop more is.
Speaker Change #151: Investors traders have this question quite often when you look at let's.
Speaker Change #152: Let's call. It your investment thesis, which is you look at.
Speaker Change #152: Great.
Speaker Change #153: When do you.
Speaker Change #154: Recalculate that thesis to see when you reverse or cut that underperforming trade within your portfolio. For example, very specifically on the Stratasys <unk> back in I.
Sol Zellman: For example, very specifically on the Stratasys offer back in, I believe it was at the end of 2023. Unknown Attendee, Yoav Stern, Tomer Pinchas, Ashok Kumar, Nano Dimension, Ashok Kumar, Nano Dimension, Unknown Attendee, Yoav Stern, Tomer Pinchas, Ashok Kumar, Nano Dimension
Speaker Change #154: I believe at the end of 2023.
Speaker Change #155: Based on where they are now and based on the the recent Dol.
Speaker Change #156: Our recent results it looks like they are underperforming it in your portfolio I don't believe that that your previous offer is relevant anymore.
Speaker Change #156:
Speaker Change #157: Are we looking at a.
Speaker Change #157: Continuing in the offer are we looking at potentially cut.
Speaker Change #158: Cutting our losses honest and pulling back from that position.
Yoav Stern: We're not going to, and we're not looking to cut our losses. And to be a little bit cynical, we didn't lose anything as long as we didn't sell. The investment is a strategic investment, it is not an investment for trade in the market. I've said it a year ago, one more than a year ago, and when we purchased it, the investment to have 15% of a market leader without getting into its business and without competing with it is definitely a strategic investment, point number one. Point number two.
Speaker Change #159: We're not going to we're not looking to cut their whole losses in there to be a little bit cynical, we didn't lose anything as long as we didn't sell it.
Speaker Change #160: The investment is a strategic investment is not an investment for trade in the market I've said, it a year ago when more than a year ago actually.
When we purchased it.
Speaker Change #161: The investment that we'll have 'twenty, sorry, 15% of our markets.
Speaker Change #162: Linda without getting into each business and without competing with him with Egypt is definitely a strategic investor and strategic investment point number one point number two.
Yoav Stern: Of course, that leads to the discussion we have today. It's true that our offer from a few months ago is probably a bit too high now. But as I mentioned before, we don't intend to divest from this investment at this point. We believe Strategies has a good future. And now that we're getting close to the management, we believe they have a management team that is sharing a lot of our vision, and we're continuing the discussion.
Speaker Change #163: Of course that leads to the discussion we have today is through that our offer.
From a few months ago is probably a bit too high now, but as I mentioned before we don't intend to divest from this investment at this point, we believe services have a good future and now that we're getting close to their management, we believe to have.
Speaker Change #164: Management that is sharing a lot of our vision and we're continuing the discussion with them on potential cooperation.
Yoav Stern: Unknown Attendee, Yoav Stern, Tomer Pinchas, Ashok Kumar, Nano Dimension
Speaker Change #164: Okay got it thank you.
Quick question.
Speaker Change #165: Do you feel it has a negative overhang for nano having maintaining that position.
Sol Zellman: Sorry, I didn't understand you.
Speaker Change #166: Sorry, I didn't understand you.
Sol Zellman: Does maintaining that position or maintaining, not having that serious reassessment have any negative overhang for Nano Dimension?
Speaker Change #166: It does maintaining that position or maintaining not.
Speaker Change #167: Not having that theory is reassessment.
Speaker Change #168: Have any negative overhang for Fernando dimension.
Yoav Stern: No, the only thing that maintaining this position is affecting you or me in a funny way because of the accounting rules. If it was the last day of the quarter, give an example. Let's say the shares of Sotheby's went up by 30%. I would have made a huge profit in that quarter. If, on the last day of another quarter, the share went down by 30%, I would have a huge loss. Both the profit and the loss obviously are not indicative of anything other than one day trading, but that's how the accounting rules work. It doesn't affect the caseload, it doesn't affect our business, it doesn't affect how we proceed, it doesn't affect the acquisition, it doesn't affect how we do R&D.
Speaker Change #169: No. The only thing that maintaining disposition is affecting you or me is in a funny way because of the accounting rules if in the last day of the quarter.
Speaker Change #169: To give you an example, let's say.
Speaker Change #170: The chefs of southern fees went up by 30% I will have a net quarter a huge profit.
Speaker Change #170: If in the last day of another quarter of share went down by 30% I will have a huge loss all the profit and the loss obviously are not indicative of anything other than one day trading, but that's how the accounting work.
Speaker Change #171: Rules work.
Speaker Change #172: It doesn't affect the cash flow it doesn't affect our management business. It doesn't affect how we proceed it doesn't affect the acquisition it doesn't affect how we do R&D.
Sol Zellman: I'd love to see how this plays out. Thank you for sharing that there is consideration for that reassessment, one that you're doing very much in parallel and together with the Stratasys team.
Speaker Change #173: Great I'd love to see how this plays out. Thank you for sharing that there is the consideration on that reassessment that one that you're doing in very much in par and together with the Stratasys team.
Operator: Thank you. Thank you very much. Thank you. Thank you. As a reminder, if you would like to ask a question, please press star then 1 to join the question queue.
Speaker Change #174: Thank you ma'am. Thank you very much. Thank you. Thank you.
Speaker Change #175: As a reminder, if you would like to ask a question. Please press Star then one to join the question queue.
Yoav Stern: This concludes our question and answer session. I would like to turn the conference back over to Yoav Stern for any closing remarks.
Yoav Stern: This concludes our question and answer session I would like to turn the conference back over to you up stern for any closing remarks.
Yoav Stern: Okay, thank you very much, everyone. Thank you for your questions. I'll summarize by saying that, as I said during the meeting today, our industry is in a very peculiar situation and a very peculiar place. Look at everybody around us, and think in your mind how the situation today relates to the strategy and the intention of Nano Dimension, as I described to you over the last two years.
Speaker Change #177: Okay. Thank you very much everyone. Thank you for your questions.
Speaker Change #178: I'll summarize by saying that the something I said during the meeting today, our industry is in a very maquiladora situation in a very peculiar place.
Speaker Change #178: Look at everybody around us.
Speaker Change #179: And thing on your mind, how the situation today relate to.
Speaker Change #180: So the.
Speaker Change #181: Our strategy and the intention of non dimension as I described to you over the last two years and you'll come to the conclusion by yourself without me having to.
Yoav Stern: And you'll come to the conclusion by yourself without me having to say anything at this point. So I thank you very much for thinking about us and being a part of us. Goodbye.
Speaker Change #182: Say anything at this point so I. Thank you very much for thinking about us and being a broadness goodbye.
Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Speaker Change #183: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Operator: ??? ??? ??? ???
Speaker Change #183: [music].