Fathom, a digital manufacturing specialist, has released its financials for the third quarter of 2022. The figures show a slight decrease in revenue of 3.1%. However, for the first nine months of 2022, revenue increased by 13.8% to $122.7m, compared to $107.8m in the same period of 2021. This higher revenue is due to acquisition-related activity and growth among Fathom’s strategic customers.
“Our results for the third quarter were in-line with management’s expectations as Fathom extended its proven track record of profitability in the company’s core operations and cash generation despite the challenging macro environment,” said Ryan Martin, Fathom Chief Executive Officer. “We also continue to build positive momentum for our new commercial activities as both orders and revenue achieved monthly sequential growth throughout the quarter, highlighted by record orders for our additive manufacturing services in the month of September. Our focus remains on accelerating engagement with Fortune 500-tier customers and increasing the scalability of our robust on-demand digital manufacturing platform to drive long-term profitable growth.”
Summary of Financial Results
Revenue for the third quarter of 2022 was $40.2 million compared to $41.5 million in the third quarter of 2021, a decrease of 3.1% primarily due to lower volumes. For the nine months ended September 30, 2022, revenue increased 13.8% to $122.7 million from $107.8 million for the same period in 2021 with higher sales driven by acquisition-related activity and growth within Fathom’s strategic accounts.
Gross profit for the third quarter of 2022 totaled $15.1 million, or 37.5% of revenue, compared to $14.9 million, or 35.9% of revenue, in the third quarter of 2021. Gross profit for the nine months ended September 30, 2022 was $42.6 million, or 34.7% of revenue, which includes approximately $3.2 million in non-cash purchase accounting adjustments, compared to $41.8 million, or 38.7% of revenue, for the same period in 2021. Excluding the $3.2 million in non-cash purchase accounting adjustments, gross profit for the nine months ended September 30, 2022 totaled $45.8 million, or 37.3% of revenue.
Net loss for the third quarter of 2022 was $(1,046.1) million compared to a net loss of $(3.5) million in the third quarter of 2021. Net loss for the third quarter of 2022 included a non-cash goodwill impairment charge of $1,066.6 million as the result of an interim impairment analysis, which was triggered by the sustained decline in Fathom’s share price, lower market multiples for a relevant peer group, higher discount rate due to the rising interest rate environment and challenging macroeconomic conditions. The impairment charge has no impact on the company’s cash position, liquidity, or covenant tests under its credit agreement.
Conference Call
Fathom will host a conference call on Monday, November 14, 2022, at 8:30 am Eastern Time. The dial-in number for callers in the U.S. is +1-844-200-6205 and the dial-in number for international callers is +1-929-526-1599. The access code for all callers is 412487. The conference call will be broadcast live over the Internet and include a slide presentation. To access the webcast and supporting materials, please visit the investor relations section of Fathom’s website at https://investors.fathommfg.com.
A replay of the conference call can be accessed through November 21, 2022, by dialing +1-866-813-9403 (US) or +1-226-828-7578 (international), and then entering the access code 414890. The webcast will also be archived on Fathom’s website.
Find out more about Fathom at fathommfg.com.
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