Nano Dimension - Q2 2022
September 1, 2022
Transcript
Operator (participant)
Ladies and gentlemen, thank you for standing by. All participants are at present in listen-only mode. Welcome to today's conference call to discuss Nano Dimension's 2022 second quarter results. On the call with us today are Yoav Stern, CEO, and Yael Sandler, CFO. 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 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. Yoav will begin the call with a business update, followed by a question-and-answer answer session, at which time Yael will answer questions regarding the second quarter 2022 financial results. As a reminder, this conference is being recorded September 1st, 2022. I would now like to hand over the call to Mr. Yoav Stern. Mr. Stern, would you like to begin?
Yoav Stern (Chariman and CEO)
Thank you very much, Yoni, and good day to everybody. Just to add, we have with us today also Julien Lederman, which is our head of corporate development and our financial marketing department, which is only lately established in order to reinforce and improve the connection with all you guys, the shareholders. Welcome, Julien as well. We'll be talking to him. We had a very good quarter in spite of the situation in the market, specifically in Europe, with the issues of the war in Ukraine, which affected especially Central Europe purchasing rates, where Germany and countries around it, kind of initially froze a little bit.
In spite of that, all our acquisitions and our internal growth and organic growth proved to be going well, the go-to market systems that we established. I'm not going to read, of course, as traditionally we don't the whole report, and I'm assuming you have read it, and if you did, then you'll have questions for me. The highlight is the $11.1 million revenue is 12x the revenue of the same quarter last year. We expect that as the crisis with the supply chain of components is hopefully easing up or will ease up, we will even grow faster organically.
The second thing we are quite happy about is while we're trying to accelerate the R&D, which the indication thereof is spending more money, we managed to be much lower in our cash burn rate than we originally planned. We're maintaining around $40 million per half a year of cash burn rate, double than that or a bit more for a year. In a funny way, we are hoping actually to accelerate because the burn rate in cash is mostly to accelerate the R&D and bring the product, the new products, into market. That's good news.
The gross margins, as we spoke last time, is a combination, 36% of high gross margins of 65% in new machines, in the manufacturing electronics and additive manufacturing metal and ceramics, and lower gross margins in additive surface mount technology, which is traditionally 35% gross margins or 32% gross margins. The mixture and the average gross margin, a combination of both.
We don't have service business like other people, which is reducing the gross margins even more. That's basically giving you the outline of our source of revenue and the source of cash going down below the gross margin. We have spent this quarter $12.9 million in R&D, which of course by GAAP and IFRS is an expense, but we also consider it an investment.
The results of the R&D are showing amazing results in advancement toward the new product, which will go into beta toward the end of this year, and then next year will be released. I'm kind of hoping, you know, it's not great to hope that the market will stay as erratic and as low as it is, the public market, but assuming it is, what we see beyond the operations of the company is the fact that multiples and values are lower, and the activity in M&A is accelerating, which is very exciting because companies I held back on for two years now, and we have looked at 330 companies. I'm now back, and now they're talking to me, and now the multiples are right, or at least righter or better, or reasonable.
We expect to show some results there. A growth as projected or as expected, I should say, is by now more practically available to us because I'm not going to have to overpay, which I refused to do in the past. Of course, we did an acquisition as well, this quarter. I think we closed it a month and a little bit ago—Europe, Poland, one of the most leading technologies in metal and ceramic printing.
A small company that was kind of hidden from the visual sight of both analysts and the competition because it was a subsidiary of a very large American company which was in trouble for many years. Through ourselves we found them, and we believe there'll be a very fast core for very fast growth of our additive manufacturing business.
Bottom line, as we proceed and as we expand, you can look at us today, where traditionally we started from additive manufacturing electronics. Our growth strategy, both organically in the development and R&D and through acquisition, is we expand from electronics, from additive manufacturing electronics into electronics, and on the left side, call it, and from additive manufacturing electronics into other additive manufacturing on the right side.
You're going to own a company that is expensive as much as its ability to manufacture machines in additive manufacturing in general. It's already happening. In other digital machines for electronics that add value as they are being part of the network of machines that we're building, led by the artificial intelligence and deep learning and machine learning software that we have.
On that area of machine learning and software and deep learning, from dozens of interviews and due diligence that we did, I can tell you, ladies and gentlemen, we are ahead of everybody, and it's just a matter of time until this robotic brain, as I coined it, is going to be in most of our machines, plus in the networking between the machines. It becomes a, call it if you wish, a cloud manufacturing if you wish.
That is kind of wrapping up both where we are this quarter and connecting it to where we have been coming from and where we're going. I will be more than happy, of course, now to hear your questions and refer much more to issues that are of interest to you today in this call, please.
Operator (participant)
Thank you. Ladies and gentlemen, at this time, we will begin the question-and-answer session. If you have a question, please press star one. If you wish to cancel your request, please press star two. If you are using speaker equipment, kindly lift the handset before pressing the numbers. Your questions will be polled in the order they are received. Please stand by while we poll for your questions. I repeat, if you have a question, please press star one. The first question is from Yoram Perlman. Please go ahead.
Yoram Perlman (Shareholder)
Good morning or good evening, Yoav.
Yoav Stern (Chariman and CEO)
Good morning.
Yoram Perlman (Shareholder)
I have a very simple question. We are probably going into recession if we are not in a recession. At some point, I hope in the near future, the AI will be integrated in the machine. My question is, do you consider opening factories in maybe one in Europe, one in the U.S., maybe even in Asia, that will supply the final product to the final customer and not just doing prototypes?
Yoav Stern (Chariman and CEO)
No.
Yoram Perlman (Shareholder)
Because capital goods in the time of recession are not a very desirable expense.
Yoav Stern (Chariman and CEO)
The answer is no.
Yoram Perlman (Shareholder)
Do you want to explain why?
Yoav Stern (Chariman and CEO)
Because I believe it's not the right strategy. I believe that the Service business is a business where you subcontract manufacturing, be it AM or others. Your gross margins are much lower. You cannot afford to do R&D and to develop the technologies you have because your business model is based on servicing, your gross margin between 28% to 35%, 38% will not let you continue the R&D. You lose your competitive edge. Your competitive edge has to be based on completely different variables than a technology business that is based on innovation and effective R&D, and it doesn't fit.
Yoram Perlman (Shareholder)
Don't you consider you have a lot of cash in the company, and so you can still continue R&D with the cash you have. Don't you consider the fact that you're not going to be able to sell the final product that you have now?
Yoav Stern (Chariman and CEO)
I am able to sell the final product. As you see, our revenue is growing from $5 million a year and a half ago to $50 million or a rate of 40%-50%. We don't see a problem selling our products. Absolutely not. B, we don't spend all the money we have on R&D, far from that. We're going to spend it, proudly, and we are spending it on acquisition. The answer is no. We're not going to do it. It's not the plan right now.
Yoram Perlman (Shareholder)
Okay. Thank you.
Yoav Stern (Chariman and CEO)
Thank you.
Operator (participant)
The next question is from David Shapiro. Please go ahead.
David Shapiro (Shareholder)
Good morning. I have a question for you specifically about the stock price buybacks and the investment that was made in SSYS. If you could please speak to those issues.
Yoav Stern (Chariman and CEO)
What do you want to know about it? What's the question?
David Shapiro (Shareholder)
Why are we not doing a buyback?
Yoav Stern (Chariman and CEO)
Who says we're not doing a buyback?
David Shapiro (Shareholder)
Are we doing a buyback?
Yoav Stern (Chariman and CEO)
We just got the approval for buyback a few days ago. We got approval for buyback for the next 12 months. During the next 12 months, which started only 10 days ago, we're going to consider a buyback. Absolutely.
David Shapiro (Shareholder)
When we say we're going to consider it, the concern is that the market is not anticipating that that's going to happen, or the stock price would not be at the price that it is today.
Yoav Stern (Chariman and CEO)
Did you look at the stock price of the certain other additive manufacturing companies since the beginning of this year?
David Shapiro (Shareholder)
I'm specifically looking at our company.
Yoav Stern (Chariman and CEO)
Okay. If you look at our company, at any company, you have to compare it to where the market and how it behaves. Our stock behaved better than nine to 10 other stocks in additive manufacturing. Short answer to your question, we'll consider buying stocks now that we have the approval, and we'll think about it. The board will make a decision in the next 12 months on an ongoing basis. It was your first question. What was the second one, please?
David Shapiro (Shareholder)
The investment that was made in SSYS. As an investor in NNDM, one has to wonder, why are we spending money on another company rather than buying our own shares?
Yoav Stern (Chariman and CEO)
This is not one against the other, first of all. We're spending money in other companies, not only in SSYS, we bought five other companies. The investment in SSYS was Stratasys, was described in the news release, explained exactly why we're investing. If you read the news release, I don't want to repeat it and take time from other people. It's explained why strategic investment is important, why our shareholders, you and me, will gain from that, and what we intend to do with it moving forward. I don't want to repeat it because it will take time from everybody else. What was the third question?
David Shapiro (Shareholder)
Do you anticipate additional investments in SSYS?
Yoav Stern (Chariman and CEO)
As I said in the news release, again, the last sentence in the news release speaks exactly to that. Sir, one of the things that I really do, out of appreciation for people like you and other shareholders, is I write everything I intend to do in the news release. Your question is answered by the last sentence in the last news release regarding SSYS. I'll repeat it now. We will, during the next short and medium while, buy or sell shares based on situation of the market and other considerations. I'm speaking about shares of Stratasys. Thank you very much.
Operator (participant)
The next question is from Rich Brunn. Please go ahead.
Rich Brunn (Shareholder)
Hello. Good morning, Yoav.
Yoav Stern (Chariman and CEO)
Good morning.
Rich Brunn (Shareholder)
Good morning. Thank you for taking my call. Just a few questions. Are we still in negotiations with the Australian acquisition?
Yoav Stern (Chariman and CEO)
Which one? Sorry.
Rich Brunn (Shareholder)
I know we were talking about in the previous conference call about acquisition of Austria. Are we still in negotiations there, or no?
Yoav Stern (Chariman and CEO)
I did not speak in the last conference call about an acquisition in Austria.
Rich Brunn (Shareholder)
Not the last one. The pre-previous conference call.
Yoav Stern (Chariman and CEO)
I did not speak about any in any conference call about specific acquisition that I said that is happening. We've been looking at acquisitions in Germany, in Austria, in U.K., in Switzerland, in Netherlands and in United States, so I don't really know what you're talking about.
Rich Brunn (Shareholder)
Okay. We're not in any negotiations with any company in Austria.
Yoav Stern (Chariman and CEO)
I just said that we're looking at companies in United States, Netherlands, U.K., Germany, Austria and Switzerland. Actually in Italy as well.
Rich Brunn (Shareholder)
Okay. Can you kind of elaborate a little bit on the modification to the GIS deal?
Yoav Stern (Chariman and CEO)
I'm sorry. What do you mean by modifications?
Rich Brunn (Shareholder)
I don't know. There was a press release that was sent out in regard to GIS. I don't know if it was any type of performance metric related information.
Yoav Stern (Chariman and CEO)
I see what you're saying. No, I know and I'm saying. No. What happened is the ex-CEO of GIS, who joined us, took a very senior position in our management, Mr. Nick Geddes. He basically bought out the earn-out and he had a certain earn-out that he could reach over the next year and he gave it up and we took a discounted price on this earn-out, which we paid him, and the earn-out disappeared, so we don't have to pay it in the future. Now he's not only running GIS, actually his number two is running GIS. He's part of the Senior Management of the company, and he took a position of the Senior Chief Technology Officer.
Rich Brunn (Shareholder)
The deal actually worked out more favorable to NNDM shareholders?
Yoav Stern (Chariman and CEO)
Yeah, because we paid less.
Rich Brunn (Shareholder)
Okay. I just wanted to clear that up. Are you still observing any challenges hiring, like quality engineers, deep learning personnel?
Yoav Stern (Chariman and CEO)
It's a little bit better than it was before because of the situation in the market and because in both the United States and in Israel, and actually in Europe as well, there was started to be a little bit of layoffs in other high-tech companies. It's a little bit better, but it's not a total change of direction.
Rich Brunn (Shareholder)
Okay. Are we looking to solve that through an acquisition maybe?
Yoav Stern (Chariman and CEO)
Yes. Part of the things we are looking at in acquisitions. I shouldn't say part of the things. What may be one of the main things is the people, and the quality of the people that are in the companies we're looking at. It's definitely a major advantage. Until now, all the companies we acquired, all the people stayed. May I say all the management, all the R&D people, maybe one here or one there, but from what I remember, the people who are placed are not in R&D and not engineers. We are very, very happy with the quality of the personnel that we are now including. We are now 500 people, and we've been, to remind you, two years ago, we've been 95.
The long answer to your question is yes.
Rich Brunn (Shareholder)
Okay. Would it be out of bounds to say that a potential acquisition would be specifically for deep learning to kind of support what DeepCube is doing?
Yoav Stern (Chariman and CEO)
No. On that one, we feel we have very good team, world-class team in-house. We managed to grow it from 24 when we have acquired them to above 30. Yael, we have above 30 by now, right?
Yael Sandler (CFO)
Yes. In DeepCube, yes.
Yoav Stern (Chariman and CEO)
Yeah. While we are looking to hire more, we're not going to spend money on acquisition and pay premiums for that. We have it in-house. The product, the technology is working. We don't intend to do it.
Rich Brunn (Shareholder)
Okay. You believe that the product we have right now is superior to whatever-
Yoav Stern (Chariman and CEO)
Yes. Yes.
Rich Brunn (Shareholder)
... maybe on the market right now? Okay. All right.
Yoav Stern (Chariman and CEO)
Yeah. The product or the technology is working. It was working actually when we acquired, but by now is already in the process being adapted to additive manufacturing, both additive manufacturing electronics and now into additive manufacturing machines for ceramics and metal. We feel we are in a good position there.
Rich Brunn (Shareholder)
Okay. This is my last question. I know in the previous conference call, you talked about reaching out to, you know, companies that were a little difficult to negotiate. Have you seen any rebalancing in the valuations and have any of those?
Yoav Stern (Chariman and CEO)
Yes.
Rich Brunn (Shareholder)
Okay.
Yoav Stern (Chariman and CEO)
Yes.
Rich Brunn (Shareholder)
Has anything materialized into something meaningful?
Yoav Stern (Chariman and CEO)
The answer is yes. We are seeing, I don't want to call it rebalance, but the ask in the negotiations on the other side of the sellers is lower and more reasonable. As I mentioned in the opening statements, we are hopeful that now we'll advance on that field very fast. Even though between us, we've done five, six acquisitions over a year and a quarter.
It's average almost an acquisition a quarter. I don't believe in acquisitions that you don't give it enough time also to integrate them properly, to get the synergies out. If you start to acquire too fast, you end up failing in the implementation. You have to be really, really careful.
However, and you're right, we are hoping very, very much, and I'm seeing it, that the multiples are lower, the asks are lower, and people are more reasonable in negotiations. We'll hopefully be able to get the acquisitions we're interested in easier.
Rich Brunn (Shareholder)
All right. Can I follow that up with one more question, please, if no one minds?
Yoav Stern (Chariman and CEO)
Go ahead, please.
Rich Brunn (Shareholder)
Um-
Yoav Stern (Chariman and CEO)
Go ahead, please.
Rich Brunn (Shareholder)
All right. I don't know if you can disclose how many proprietary materials do we have in the pipeline currently that show some significant progress?
Yoav Stern (Chariman and CEO)
We have proprietary materials in the area of Additive Manufacturing Electronics between three to six. We have additive materials in the area of Advanced Micro Polymer Printing about three. We have new materials in the area of ceramics and metal about two or three.
Rich Brunn (Shareholder)
Okay. Those are just ones available or those are in the pipeline?
Yoav Stern (Chariman and CEO)
I would say that either available or will be available in the pipeline, but in a very short period of time. I'm not talking a year or two years. I'm talking months.
Rich Brunn (Shareholder)
Thank you for your time.
Yoav Stern (Chariman and CEO)
Thank you very much for your question, Sir.
Rich Brunn (Shareholder)
All right.
Operator (participant)
The next question is from David Shapiro. Please go ahead.
David Shapiro (Shareholder)
Yeah. I wanted to focus on a little bit more on the share price. Your perspective may be that we're doing just fine relative to other companies, but many of us that have been invested in this company for a long time are not too pleased with what's happened, particularly the recent fall from the $3.50 range.
I'd like to explore that a little bit more with you, and specifically, have you explained initiatives that you and the company are taking to increase the share price, particularly as it relates to analyst coverage, which is something that you've discussed on previous calls?
Yoav Stern (Chariman and CEO)
We are discussing analysts hopefully picking up our companies for reporting. It's very, very important. We hired a special outside firm that's expertise is exactly in that. The firm itself is also going to initiate analyst reports themselves and recruit analyst reports from the outside. We're paying them based on their work on a monthly basis. We have a project with them with a plan that we designed for the next foreseeable future. We are hopeful that this will be effective.
You're right, it's very, very important. The share price of the company is gyrating together with all the other companies that are in our field. While you're unhappy, I'm unhappy as well. I'm a shareholder like you. All my upside is there.
I don't have stock options, I mean, personally. The difference between you and me maybe is I know what is coming up, and I know that the performance of the companies are so good and expected to be as such that the share price will respond. You're absolutely right. Analyst reports is very important.
In addition to that, as part of this program that I tell you, we now intend that Corona finally cleared the way to start to participate in face-to-face conferences of investment banks and other organizations that are inviting us to come and present what we do. This stopped for two years. Over these two years, the only thing I could do is do Zoom calls, and of course it's not the same, you realize that.
In the next two quarters and more than that, but the next two quarters are already on the horizon, we intend to do a lot of exposure to the company in this, both Investors' Conferences and Industry Conferences, which we think will help as well. More important than everything else, we are running the business well and improving the results.
David Shapiro (Shareholder)
Those are wonderful things, and I commend you and the company for the progress that you're making.
Yoav Stern (Chariman and CEO)
Thank you.
David Shapiro (Shareholder)
The elephant in the room is this share buyback. I'm really concerned as an investor in the company that the responses about we're considering and we may in the future and all of that is not sending a signal to future investors or to the shorts that are on this company, that there is going to be something that's going to happen that will be a concrete catalyst to move the stock price up.
Yoav Stern (Chariman and CEO)
Yeah, I hear your concern, but there's no question there.
David Shapiro (Shareholder)
Thank you for answering the questions.
Yoav Stern (Chariman and CEO)
Thank you very much.
Operator (participant)
The next question is from Devin Terrell. Please go ahead.
Devin Terrell (Shareholder)
Hi, Yoav. How's it going?
Yoav Stern (Chariman and CEO)
Very well. Thank you.
Devin Terrell (Shareholder)
Yeah. I'm calling because I have a few questions about R&D. A little over a year ago, you had stated that you cannot time Nano, and over the course of time, there's going to be a bunch of inflection points, specifically circulating around R&D, that are going to inflect the price. You mentioned to a previous caller that you guys have hired 500 employees. You also mentioned that-
Yoav Stern (Chariman and CEO)
Just one second. I never said there's going to be inflection points that are going to affect the price. I said there're going to be inflection points in R&D that are going to affect the performance of our business.
Devin Terrell (Shareholder)
Well, you did. You said there's going to be inflection points that are going to make the price go up, and you won't be able to catch it. Specifically, you said that.
Yoav Stern (Chariman and CEO)
I did not say that inflection points may cause the price to go up because inflection points are happening and affecting the business. The perception of the market may cause the price to go up.
Devin Terrell (Shareholder)
Okay. Well, my question to you is, before when all the money was being raised, we were hearing things about R&D and news reports all the time. After the money was finally secured, it seems as if we only have heard information about acquisitions and complete silence has gone on with R&D. I'm just curious, has there been any kind of breakthroughs with R&D? Is there anything that we can look forward to coming up? Or just kind of more so how come so much silence on that end?
Yoav Stern (Chariman and CEO)
First of all, you have heard news about R&D. We came out with new products, which we announced them. That's R&D. You realize that certainly anytime that something new comes up, we announce it, and there's no reason not to announce it. Whatever we didn't announce means it didn't happen. We will continue, and we'll announce once we have information that we think we can announce, and we don't risk you know, competitive information that may harm us in increasing the sales or the revenue. When there will be news, there'll be more achievements that will cause things to jump up, and you will be late to come into the share. I did not say that if I announce, it will cause the share to go up.
How can I tell you that the share will go up by me saying something? The perception of the market may be that when we announce and something positive happens, more people will buy. If it will happen, then you'll see it.
Devin Terrell (Shareholder)
Okay. Yeah. It just seems as if there hasn't been any kind of investor interaction other than a few. You know, you had said on one of the previous calls last year actually, that you were going to set up more conference calls. A caller had called in and said that, and you said, yeah, that'll be fine. If anything, we feel like the company has gotten more silent over the last half a year.
Yoav Stern (Chariman and CEO)
Sir, we don't have fewer conference calls than last year. If you want me to set a conference call, as you speak with me on this conference call, you get all the information you want and you ask, the next conference call will be either when the next quarter comes up or if we have an event. I can't set up a conference call with nothing happening. For what?
Devin Terrell (Shareholder)
One last question. You had previously said on the last call that the analysts should consider covering you guys because in a few quarters, you're going to be industry leaders. Now, when we talk about the share price, you say that we have to look at the other companies.
Yoav Stern (Chariman and CEO)
I never said that in few quarters we'll be industry leaders.
Devin Terrell (Shareholder)
I think we're all just having miscommunication with your calls because that is what I heard from you.
Yoav Stern (Chariman and CEO)
Well, you all. When you say we all, you are just one person. I never said that in few quarters we'll be industry leaders. Ever.
Devin Terrell (Shareholder)
Do you feel like the stock price has any room to move differently from the other additive manufacturing companies, or you feel as if as long as they stay stagnant, Nano Dimension will stay stagnant?
Yoav Stern (Chariman and CEO)
I feel that, as long as the market segment is stagnant, the ability of any share, either ours or others, to penetrate through that and be dramatically different is much more difficult.
Devin Terrell (Shareholder)
I'll speak for myself. I know the buyback, a $100 million in a stock buyback would do wonders for this company with room to raise again later on in the future. It just feels as if retail was kind of leaned on a lot when raising all the money, and now we've gotten to this point, and you speak a lot about how you're very focused on institutional investors, and you're not here to make money for retail. It just seems like no bone is being-
Yoav Stern (Chariman and CEO)
I never said that I'm not here to make money for retail. Totally. Ever. Never.
Devin Terrell (Shareholder)
Okay. All right. Thank you for your time, Yoav.
Yoav Stern (Chariman and CEO)
Thank you.
Operator (participant)
The next question is from Brett Reiss of Janney Montgomery Scott. Please go ahead.
Brett Reiss (SVP and Financial Advisor)
Hi, Mr. Stern.
Yoav Stern (Chariman and CEO)
Hi, Brett.
Brett Reiss (SVP and Financial Advisor)
How are you doing? Good. Good. Could you just give us some background and color the process in place at the company to do the due diligence on the potential acquisition? You said, you know, you're looking at over 300 companies.
Yoav Stern (Chariman and CEO)
No, no. I said we looked at over 320 companies, out of which we dove deeper. Actually, Julien, do you remember the numbers? We just spoke about it. Can you quote them?
Julien Lederman (Head of Corporate Development and Financial Marketing)
Yes. We've looked at 350 companies in one capacity or another. We've looked at, say, of those 350, about 120 in some type of, call it multi-engagement, you know, several meetings with them. We've done in-depth due diligence, site visits, extensive analysis into 30 of those companies, and from that, we've acquired five.
Brett Reiss (SVP and Financial Advisor)
Okay. The question is: who is the we? Could you describe-
Yoav Stern (Chariman and CEO)
Yeah.
Brett Reiss (SVP and Financial Advisor)
Is it-
Yoav Stern (Chariman and CEO)
Yeah.
Brett Reiss (SVP and Financial Advisor)
Ten people? What are their backgrounds? When you focused on something, do you, Mr. Stern, you know, unilaterally, you know, call the shots on to buy or not buy, or at a certain threshold level, it's submitted to the, you know, board for their reflection and approval? Yeah.
Yoav Stern (Chariman and CEO)
Okay.
Brett Reiss (SVP and Financial Advisor)
What's the process in place at the company?
Yoav Stern (Chariman and CEO)
Let's start. Every acquisition, doesn't matter what the size, is brought up to the board.
Brett Reiss (SVP and Financial Advisor)
Okay.
Yoav Stern (Chariman and CEO)
No acquisition is done without board approval, point number one. Point number two is about five people in the company led two companies. One, $500 million company, public, and another startup company that he was a CEO. He's 62 years old. He spent 23 years with the largest supplier of optical inspection for the PCB industry.
Ran all of their commercial divisions, did M&A in his previous companies as well. He is the head of the team. Of course, beside me, I'm participating. Under him, there's two or three analysts with background from Goldman Sachs, from Lehman Brothers, from Amazon, which is involved in the due diligence.
In addition to that, our president, which is ex-CEO of three companies, 63 years old, have done about 15-20 acquisitions in his life, is involved intensely in all the due diligence. In addition to that, when we do due diligence and we need to do a due diligence of both the technology, the R&D, the operations, the sales, and all the facets of the companies we're looking at, we bring in people that are in the company in the fields where we are looking at. Dr. Eli David, one of the five world leaders in artificial intelligence and the Chief Technology Officer of AI, is participating in due diligence on the algorithms and the machine learning side. Our Head of Materials, Ph.D., is looking to doing R&D if it's materials issues.
Our Head of New Technologies is doing it on new technologies in machinery and robotics, et cetera, similar to that software people and electronics engineers. If you look at the total number of people that are involved, once you get to an intensive due diligence, I would say it's about 10-12 people at least. Of course, in parallel to that, Yael, the CFO, who is on the call here, and you can ask her specifics, she's leading the financial due diligence.
Brett Reiss (SVP and Financial Advisor)
Right.
Yoav Stern (Chariman and CEO)
Financial due diligence in all the acquisitions is led by KPMG as an outside agency, and KPMG, both Europe and United States, as it relates to wherever we do the acquisition. In parallel, we have, of course, the law firm that's involved in helping us in the legal due diligence. We have investment bankers, both one in Europe and by now closer to one in United States, that's involved in the analysis, financial analysis, comparative analysis of valuation.
All this is run by me as leading the team and involved in decision-making. When this team has a recommendation, it goes to the board and recommend. The board looks at it, and the board make a decision if it's worthwhile or not, and either does the acquisition or doesn't.
Brett Reiss (SVP and Financial Advisor)
All right. That sounds like a good team. Thank you for the color in answering my question.
Yoav Stern (Chariman and CEO)
You're welcome. Thank you for the question.
Operator (participant)
Thank you. The next question is from Jesse Zachagnini. Please go ahead.
Jesse Zachagnini (Shareholder)
Yes, Mr. Stern. A quick question. In the event, you all do decide to buy back shares, is there any, like, securities obligation or plan that communicates any of that activity, you know, back to the general public or shareholders? Or is there no obligation to do that?
Yoav Stern (Chariman and CEO)
There's no obligation to do that.
Jesse Zachagnini (Shareholder)
Okay. At any point, we'll just kind of not be aware of that then.
Yoav Stern (Chariman and CEO)
Well-
Jesse Zachagnini (Shareholder)
... the various plans.
Yoav Stern (Chariman and CEO)
If the claim of some people is right that buyback of shares is causing the share price to go up, then theoretically, you'll see the share price going up. All of us will see it. If it doesn't cause the share to go up, then you wouldn't see it.
Jesse Zachagnini (Shareholder)
Okay. Thank you.
Yoav Stern (Chariman and CEO)
Now, of course, eventually, when we report our quarterly reporting and annual report, if we purchase shares, then you end up having less shares outstanding by definition because the shares are purchased by the company.
Jesse Zachagnini (Shareholder)
Excellent. Appreciate that.
Yoav Stern (Chariman and CEO)
Thank you.
Operator (participant)
The next question is from Bob Downer. Please go ahead.
Bob Downer (Shareholder)
Good morning, Mr. Stern.
Yoav Stern (Chariman and CEO)
Good morning.
Bob Downer (Shareholder)
I've been an investor with NNDM stocks ever since Cathie Wood started mentioning your company maybe 2.5 years ago. I've enjoyed your conferences, conference calls and stuff. My background is, I watched my dad fix TVs when I was a kid, printed circuit boards. I'm familiar with that. I thought, hmm, this technology sounds really good. I'll invest in it. My point being right now, I'm having a little bit of a vision problem. You might call it a cloudy vision of what NNDM is all about or what is the vision for your company in terms of products?
Yoav Stern (Chariman and CEO)
Okay. I'll take you. Thank you for your question. I'll take you back to the opening statement and what I said. You're absolutely right. The company started in additive manufacturing electronics. At the time, Dragonfly was DragonFly Pro, DragonFly LDM. By now we developed that area, that section to the product called DragonFly IV. There's a lot of investment there. Yes, this is a disruptive technology. It was the core of the company's investment and the only investment in R&D when I joined the company. Since then, we continue that investment because we believe this is an amazing, promising future. Since we found, we developed two things, two thoughts and/or two directions.
It will take time, and I spoke about it in the past, until the technology matures, and I believe that the next product coming up after the DragonFly IV, which I mentioned before, still in the same direction, in electronics, is going to be miles ahead. It will take time until the industry will adjust its specs, until materials will reach the point.
As we develop this and will not give up on the investment, we found out and after research that we sell to five, six verticals, and there's a lot of synergies by selling to these verticals, additional additive manufacturing technologies. We purchase these additional manufacturing, additive manufacturing technologies by purchasing companies that already have technologies in that field.
By now, we're having not only the machines that print circuit boards or print three-dimensional high-performance electronic devices, but we also have machines that are printing other parts, like micromechanical parts, like metal parts. The reason why this sits well with the development, the core development of the electronics is because it is sold to very similar customers, so we can leverage and scale up our go-to-market, our sales organization and marketing, selling different kind of machines to the same customer.
The growth of our revenue in the last three years from $4 million to above $40 million run rate in less than 24 months is a result of both the growth of the Dragonfly Four revenue and the growth into other electronic and additive manufacturing fields.
The summary of my answer to you, and it relates to, again, what I said in the beginning, is the reason why you may be confused, and I hope that this explains it, is the growth of the company will be, is much faster and scalable by having more products in additive manufacturing that can be leveraged by both our distribution channels, our go-to-market, and by applying our artificial intelligence and deep learning into other machines.
As long as we keep the synergy that we sell to similar customer, which is mostly defense, aviation, aerospace, advanced medical, advanced industrial applications, academics, of course, and research institutions. That is the reason you may be a little bit confused that it's not only the Dragonfly Four, it's much more than that by now.
Bob Downer (Shareholder)
Okay. Thank you, Mr. Stern. I just wanted to hear your discussion on that. My gosh.
Yoav Stern (Chariman and CEO)
Thank you very much for your question. It was a very interesting one.
Operator (participant)
If there are any additional questions, please press star one. If you wish to cancel your request, please press star two. Please stand by while we poll for more questions. The next question is from Joe Alwin Stern. Joe, please go ahead.
Joe Alwin Stern (Shareholder)
Yeah. Hi, good morning. It's Joe Alwin Stern. I'm an evening star, Mr. Stern. Anyway, I've spoken to you on every conference call. I'm actually pleased with the way things are progressing. I wish the progression would be greater, but things are moving forward. I also feel that the board and you felt that maybe let's wait to buy back shares because the share price may go down. We're in a recession or potentially we're in a recession, and we're in a bear market. You can buy shares for cheaper. That's not so bad.
What I don't understand, I can't get my head around this is, how we ended the quarter, the June quarter with $1.27 billion, and our market cap is $750 million with no debt. It's crazy. I just don't understand. Could you give me an explanation for this? How can we be selling at $500 million below cash when things are progressing? They may not be progressing, we're not at $200 million sales, but we're progressing. We're buying businesses.
Yoav Stern (Chariman and CEO)
Yeah.
Joe Alwin Stern (Shareholder)
You're an expert. I don't understand it.
Yoav Stern (Chariman and CEO)
I think you're right. I'm puzzled by that. Obviously, I'm frustrated like you and like others that were on this call. If I would be waking up in the morning being busy with my frustration, then we wouldn't be growing from $5 million to $50 million, which we did. Your question is very and your frustration is totally understandable. I tell you what my thoughts are. Please don't take it and quote me as telling you this is the case, but I want to share with you because I feel close to you and to others that mention it. My thoughts are the following. You're right, the market is behaving erratically. We're kind of in a recession. The interest rates are going up.
Cathie Wood and ARK Invest are having issues being ETF, and they had to sell. While she still holding a lot of shares in ours, and I know exactly what, it's not for me to quote, but she's a big shareholder. She had to unload not only ourselves but other shares in high-tech in the similar fields. That affected the share price specifically of ours, but it's not only ours. All the shares in our arena, and I'm following daily. There are at least 13 publicly traded shares of additive manufacturing related companies.
In the next conference call, I will put a slide which will show you the behaviors of all these, you know, nine to 13, depends if you're taking the Europeans as well, shares. You will see that it's almost like a clockwork orange. They are moving up and down together. I'm not talking only in the last eight months. In the last 24 months, they're moving together. The differences between where the share goes up and down are so small, it causes to feel that there's systematic algorithms that when the market is going down or up, or specific segment of the market, certain investors, obviously not retailers, but more institutions, having algorithms selling all the shares in the certain segment down once the segment is showing signs that it's going down.
Having said all that, we all go, our shares go with the rest of the shares. Actually, in the last eight, nine months, we are doing better than all 11 of them. Better, but not a lot better. For me, better is great, but if it goes down from below cash value and where it is, it's not good enough for me. The only company, however, of these 13 companies that have is traded below its cash value is us. For me, it's an opportunity. There's two types of people that I'm facing all my life. There's people that see a problem in the opportunity and the people that see opportunity in the problem. I see opportunity in the problem, so it will be better. Next question, please.
Operator (participant)
Okay, the next question. There is no more questions at this time. Mr. Stern, would you like to make your concluding statement?
Yoav Stern (Chariman and CEO)
I see two more questions coming up. David Shapiro wants to ask another question.
Operator (participant)
The next question is from David Shapiro. Please go ahead.
David Shapiro (Shareholder)
My question again, that last question and your answer I think it's something all of us shareholders really want to focus in on. I can tell you from my perspective, I'm going to come back to the buyback issue. There is one significant catalyst that you can offer for our company and for our shareholders that is different than all those other companies.
That is the cash that you've got, the ability that you've got to buy back shares, and the fact that the board has already approved that significant buyback. Insider buying would also make a big difference, as well as analyst coverage and some of the other things that we discussed. As we're on this call, the share price is actually dropping. If you were to make an announcement in short order that you are going to use the resources to do a share buyback, that would differentiate our company from all of those other companies.
Yoav Stern (Chariman and CEO)
Okay.
David Shapiro (Shareholder)
I would just again encourage you to-
Yoav Stern (Chariman and CEO)
Thank you for your-
David Shapiro (Shareholder)
... make a statement.
Yoav Stern (Chariman and CEO)
Thank you for your advice. Thank you very much. Okay, next question.
Operator (participant)
The next question is from Devin Terrell. Please go ahead.
Devin Terrell (Shareholder)
Hey, Yoav. It's me again. You just mentioned that you were uncertain of what the things were that were causing the share price to go down. I would just speak on. I know a bunch of people invested in this company, and one of the main things that they say, I don't know if this will lend anything to it, is that you have been very, very straightforward on your calls, which I commend you for.
And also, by doing that, the shorts, you would get on the calls, and you would say, I will not do share buybacks. I will not do this. I will not do that. It caused them to be able to just take advantage of this company.
Speaking back on the share buyback thing, again, I agree with the previous caller, not to tell you how to run the business. There are a lot of Biotechs that move the same, and then one comes up with news, or one is able to do a share buyback, and it skyrockets them from the rest of the company. It's just sometimes it feels as if from shareholders, all the power is given to the shorts. Based on your words of things you will not do. I would just kind of throw that out there as a recommendation for what pain I see with shareholders and why they are hesitant to keep buying in. Thank you.
Yoav Stern (Chariman and CEO)
Okay. As you know, I think in the last call, I was asked or two calls before. I was against the share buyback, and then I changed my mind and I went through a process of three months of getting the share buyback approved, mostly because of the issues we had to go through the regulation with the court, but we got it done. I am proud that I can change my mind. We're not going to do the share buyback just because of the conference call, and we're closing conference call, we're buying back. We're going to have a year now to decide when to do it and if to do it and at what pace.
This is different than 0.5 year ago when I felt that it's not justified to do it. The board will take it into consideration, including all variables involved. We are hearing you. You know, the shorts play, and it's part of the market and it's part of the game. You know, when you play the game, you have to play by its rules. We announced the approval, and we'll act accordingly as needed in the future. Next question, please.
Devin Terrell (Shareholder)
One more thing. With the stock price trading $500 million below cash on hand, what would signify an appropriate time to buy back shares, if not now? I mean, it's-
Yoav Stern (Chariman and CEO)
For instance, if I'm approaching a certain other use of funds, and I decide that or the board decides rather than me, so really the board, that the other use of funds at this point, if it's substantial, is before we buy back shares or if the board decides that the price to buy shares is this or different or many other considerations as much as market considerations that I'm not an expert with. I'm an expert in another business. That's the role of the board. The board, we have an excellent board, and then the board is doing it.
Devin Terrell (Shareholder)
My only concern is the stock and the chart, and everything has been descending for a long time. It's finally started coiling. It's finally started coming up. It's $500 million below cash on hand. It's any time to do a buyback to get momentum in this company, in this stock.
Yoav Stern (Chariman and CEO)
I understand. I hear you.
Devin Terrell (Shareholder)
I think it would be now.
Yoav Stern (Chariman and CEO)
I hear you, and I responded to you and told you the board is considering it, and it will make a decision in the next 12 months when and if will be the right decision or the right judgment from them that it's the right decision.
Devin Terrell (Shareholder)
Thank you all.
Yoav Stern (Chariman and CEO)
Thank you.
Operator (participant)
There are no further questions at this time.
Yoav Stern (Chariman and CEO)
Okay.
Operator (participant)
Mr. Stern, would you like to make your concluding statement?
Yoav Stern (Chariman and CEO)
Sure. I see another question. Okay. It's canceled. Everybody, thank you very much for your participation. Again, we hope to be speaking with you soon, either on special events that are happening during the quarter or at the end of the quarter when we'll have the next quarter reports. Thank you very much.
Operator (participant)
Thank you. This concludes the Nano Dimension 2022 second quarter financial results call. Thank you for your participation. You may go ahead and disconnect.