Fathom Digital Manufacturing Corp. (NYSE: FATH), a specialist in on-demand digital manufacturing services, announced financial results for the three and six months ended June 30, 2022.
Second Quarter 2022 Highlights
- Revenue increased 17.0% to $42.0 million
- Total orders were flat at $39.7 million
- Net income totaled $34.0 million; adjusted net income totaled $1.2 million
- Adjusted EBITDA increased to $8.7 million, representing an Adjusted EBITDA margin of 20.6%
- Revised financial guidance for full year 2022
First Half 2022 Highlights
- Revenue increased 24.3% to $82.5 million
- Total orders increased approximately 8% to $83.5 million
- Net income totaled $51.8 million; adjusted net loss totaled $0.8 million
- Adjusted EBITDA was $14.8 million, representing an Adjusted EBITDA margin of 18.0%
Three Months Ended | Six Months Ended | ||||
($ in thousands) | 6/30/2022 | 6/30/2021 | 6/30/2022 | 6/30/2021 | |
Revenue | $41,985 | $35,872 | $82,526 | $66,406 | |
Net income (loss) | $33,979 | $(4,082) | $51,813 | $(4,582) | |
Adjusted net income (loss)1 | $1,192 | $310 | $(769) | $2,370 | |
Adjusted EBITDA1 | $8,668 | $7,464 | $14,846 | $15,173 | |
Adjusted EBITDA margin1 | 20.6% | 20.8% | 18.0% | 22.8% | |
“In the second quarter, we built upon our proven history of growth and profitability as revenue rose 17% from continued growth in our strategic accounts and previous M&A activity while adjusted EBITDA increased 16.1% to $8.7 million, representing a leading industry margin,” said Ryan Martin, Fathom Chief Executive Officer. “We continue to benefit from our comprehensive manufacturing services by providing a diverse group of enterprise-level customers with timely, value-added solutions across both additive manufacturing and traditional manufacturing technologies. Our focus remains on investing in new technologies and expanding our breadth of leading offerings as we continue to take advantage of the positive long-term fundamentals of our business.”
Mr. Martin added, “For the full year, we have realigned our expectations with the current macro environment given the downshift in the broader economy. We continue to focus on strengthening our commercial team and expect to be in a strong position to achieve our go-forward growth target.”
Summary of Financial Results
Revenue for the second quarter of 2022 was $42.0 million compared to $35.9 million in the second quarter of 2021, an increase of $6.1 million, or 17.0%, of which approximately $3.6 million was organic and $2.5 was from acquisitions completed in Q2 2021. For the six months ended June 30, 2022, revenue increased 24.3% to $82.5 million from $66.4 million for the six months ended June 30, 2021.
Gross profit for the second quarter of 2022 totaled $15.5 million, or 37.0% of revenue, compared to $13.5 million, or 37.6% of revenue, in the second quarter of 2021. Gross profit for the six months ended June 30, 2022 was $27.5 million, or 33.4% of revenue, which includes approximately $3.7 million in non-cash purchase accounting adjustments, compared to $26.9 million, or 40.5% of revenue, for the same period in 2021.
Net income for the second quarter of 2022 was $34.0 million compared to a net loss of $4.1 million in the second quarter of 2021. Excluding acquisition costs, stock compensation expense, the revaluation of Fathom warrants and earnout shares, and other costs, Fathom reported adjusted net income in the second quarter of 2022 of $1.2 million compared to adjusted net income of $0.3 million for the same period in 2021.
Net income for the six months ended June 30, 2022 was $51.8 million compared to a net loss of $4.6 million for the same period in 2021. For the six months ended June 30, 2022, the adjusted net loss was $0.8 million compared to adjusted net income of $2.4 million for the same period in 2021.
Adjusted EBITDA for the second quarter of 2022 increased to $8.7 million from $7.5 million for the same period in 2021 primarily due to higher volumes partially offset by the incurrence of public company expenses totaling approximately $2.4 million. The Adjusted EBITDA margin in the quarter was 20.6% compared to 20.8% in the second quarter of 2021.
For the six months ended June 30, 2022, Adjusted EBITDA and Adjusted EBITDA margin were $14.8 million and 18.0%, respectively, compared to $15.2 million and 22.8%, respectively, for the same period in 2021.
Revised 2022 Outlook
For 2022, Fathom currently expects year-over-year revenue growth of approximately 8% to 12% for a range between $165 million and $171 million. Fathom also expects Adjusted EBITDA to range between $32 million and $36 million, representing year-over-year growth of approximately (7%) to 5% and an implied Adjusted EBITDA margin of 19.4% to 21.1%. Fathom’s current guidance, as of August 15, 2022, excludes the impact of any potential new acquisitions.
Conference Call
Fathom hosted a conference call on Monday, August 15, 2022, at 8:30 am Eastern Time. A replay of the conference call can be accessed through August 22, 2022, by dialing +1-866-813-9403 (US) or +1-226-828-7578 (international), and then entering the access code 896018. The webcast will also be archived on Fathom’s website at https://investors.fathommfg.com.
For more information, please visit fathommfg.com.
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