Focusing on metal 3D printing quality assurance software, Sigma Labs launches subscription model with $1.7 million in 2021 revenue

March 28, 20223D printingQuality assurance
software
developer
Sigma
Labs (SGLB) has announced that they plan to move to a software-only business model, with the goal of annualized by 2025
income
$65 million.
During Sigma Labs’ fiscal 2021 earnings call, COO Jacob Brunsberg introduced a new monthly subscription plan that it hopes will allow the PrintRite3D product to be deployed “at a much larger scale.”According to Brunsberg, in the next three years after the initial cost threshold is lowered, all metals3D printingAs many as 10% of users will adopt the technology, sending the company’s revenue soaring.

“Currently there are approximately 12,000 units installed on the marketMetal 3D Printingsystem, and with a year-on-year growth rate of about 20%, which means that more than 2,000 new systems enter the market every year. By the end of 2025, we feel that it is achievable to solve more than 10% of the quality requirements in the market with pure software. This would conservatively generate about $65 million in revenue.”

Sigma labs financials for fiscal year 2021

The majority of Sigma Labs’ revenue comes from the PrintRite3D Quality Assurance (IPQA) platform.Before launching a subscription service, their products consisted of hardware and software modules that provided users with real-time metal and polymer3D printermonitoring capability.
From the sale of PrintRite3D, Sigma Labs generated $1.7 million in revenue in fiscal 2021, 104.5% more than in fiscal 2020.CEO Mark Ruport said,
Additive Industries
The OEM agreement with DMG MORI “generated a number of significant customers in key verticals” driving growth over the period.

Ruport added that in fiscal 2021, companies like Los Alamos National Laboratory, Safran and U.S.
energy
A “world-class customer” such as the Ministry of Finance, which is expected to announce the partnership with Aconity3D in January 2022, will lead to further revenue growth in the coming year.

Sigma Labs
financial report
show that their hair
profit
A significant increase from $200,000 in fiscal 2020 to $1.1 million in fiscal 2021. The jump in profitability was due to a reduction in the company’s overall manufacturing costs, which was driven by a combination of cheaper components, engineering redesign and efficiencies achieved in the production process.

However, between fiscal 2020 and fiscal 2021, the company’s net loss increased 42% from $5.2 million to $7.4 million. Chief Financial Officer Frank Orzechowski said that was due to higher operating costs during the period, which rose from $5.9 million to $9.6 million, of which about $2.7 million was for employee-related expenses.

Sigma Labs’ subscription model

On Sigma Labs’ earnings call, Brunsberg explained that 3D printer manufacturers are increasingly opening up to third-party integration, while subsystem suppliers are adding critical monitoring connections to their hardware. As a result, they saw that customers had less need to retrofit machines and decided to move to offering a software-only platform.

“We’re trying to embed our software into thousands of printers from multiple manufacturers, rather than selling individual hardware-software systems to the retrofit market, which is time-consuming and expensive,” Ruport added on the call. The vision I had when I joined Sigma two years ago.”

He doesn’t expect Sigma Labs’ new business model to have a significant revenue impact until the second half of 2022, but has “resonated strongly with the customer base,” so when that interest can translate into sales, it could start Had a “real good impact” on revenue.

In addition to the new subscription strategy, the company also announced a partnership with AMFG ahead of its financial results. The move is expected not only to expand the reach of both companies’ products, but to provide users with new and improved 3D printing solutions that will enable them to increase print quality and efficiency when used in mass production.

Subscription-based growth in the future?

While Sigma Labs didn’t release a fiscal 2022 target, it set an ambitious target of hitting the $65 million revenue mark by 2025. Brunsberg added that inMetal 3D PrintingThe 3% penetration level in the market will still see it surpass the $20 million milestone in the next three years, which he considers “conservative.”

Given that Sigma Labs issued $13.3 million of common stock in fiscal 2021, and it completed $11.7 million in working capital during the year, it is well-positioned to meet lofty revenue goals. More importantly, the company believes that significant opportunities will be created in the coming years.

(responsible editor: admin)