Yoav Stern: Okay. Got it. Very good questions. Okay. First question. You asked 3 questions. So the revenue growth in 2023 was, to be fair to ourselves, we’re very proud of 29% organic growth. But our budget was $60 million. We were 5% below our budget, which we debriefed, and we learned and studied, because as much as I am concerned, if we put a budget of $60 million and we reach $56.5 million or so, then obviously we’re 5% below budget. Yet, it was a great growth and fantastic year. But I would like to build an organization that stands by the budget. That leads us to 2024 if we assume no acquisitions, because if you assume acquisitions, our growth will be stratospheric. Our growth will be in multiples, not in percentages.
That’s based on the acquisitions I’m talking with now. But if we’re assuming with no acquisition, our growth, as we expect, will be lower than 29%, but higher than 15%. And we are working that according to the budget today, our first quarter, which is usually the worst quarter of the year, first quarter this year is going to be not bad at all, because it’s growing. But you don’t know by the first quarter to say what will be in the end 3 quarters later. But we are starting the year on the right foot. Next question was about systems, consumables, repeat sales, et cetera. Our consumables is about 10% of our revenue. Depends on which area. I’m speaking about 7% to 10% of the machines that we do sell consumables to. There’s machines for additive electronics, for instance, that we don’t sell consumables because the consumables are components and semiconductors, and there we don’t sell the consumables.
So there the consumables is zero. But in the areas that we do sell consumables, it is 5% to 10%. And that number usually grows up and higher once our machines are going into production, rather than being in prototyping and early production testing. But for now, it’s about those percentages. As much as repeat sales, this year we had more repeat sales than we ever had in the history of the company. I can’t tell you – I mentioned a few of the repeat sales during the presentation. I don’t remember without looking at it how many repeat sales. And it’s not the repeat sales, it’s additive sales because you don’t repeat the same sale. Some companies we have, for instance, bought our additive manufacturing electronics and afterwards bought our additive electronics machine, so it’s repeat as much as the same customer, but it’s not necessarily a repeat of the same machine.
Then other companies in defense that bought our DragonFly AME machine bought more dragonfly machines. So that exists across the board. The last question you discussed the consolidation and you used Stratasys as an example. We are in discussion with Stratasys, friendly discussions. We plan and we hope to be able to come back to you, to the investors, to the market with some news about something that we would definitely plan to do. It’s a bit early. The discussions are ongoing for the last 3 months and serious. But Stratasys have their alternatives and I have my alternatives. And my alternatives, which was your last question, are very attractive comparing to Stratasys because those are companies that are more closer to the corner, call it this way, than Stratasys, with technologies that are more exciting than Stratasys to me, to us at least.
Yet I must admit with less go-to-market and distribution network the way Stratasys has, which is excellent, but with much more exciting technologies. Stratasys’ technologies are a little bit outdated to my taste. So we have alternatives, and we are pretty advanced in negotiations with alternatives. Thank you very much for your questions. More questions, please.
Operator: Yes, our next question comes from the line of Ronni Rausch, Private Investor. Please go ahead.
Ronni Rausch: Hi, can you hear me?
Yoav Stern: Yes Ronni.
Ronni Rausch: Hi. Thank you all for the presentation. I have two questions. The first one is regarding the revenue. I wanted to get your view on the current dynamics of the – in the 3D printing industry. Do you see the gross margin improving? The second question is obviously the revenue is no longer the catalyst anymore. Sometimes it becomes a liability on low margin sales. Referring to the peers, in your opinion, did we hit the low-cycle by now? Thank you.
Yoav Stern: Okay. Let me start with the second question. This industry actually, again, let’s just say, business domain, call it, which is the group of companies that incorporate various technologies to print in three dimension products that are belong – that belong to many other industries. So, this business domain has been in a kind of traumatic process for years now, at least for the last 10 years of pushing and fighting each other by reducing margins, in order to fight your competitor or in order to convince the market that this new technology is good for them. That ends up with the company without naming names, for instance, that has been selling quite serious, serious, serious laser machines, laser 3D printing machines to very serious customers and industries and showing 6% gross margin.
That means that every dollar they sell, they lose probably $0.30. And maybe they are trying to compensate it with quantities, but that actually doesn’t work, as you know, because if you sell more of what you lose with, you just lose more. And this is an epitome in this industry. Other companies don’t think that 6% is gross margins and exception, there is other companies, it is, the gross margins is between 15% and 25%, which is unacceptable. I am speaking about again, people who are on R&D, I am not talking about companies that manufacture using those machines to manufacture parts, that’s different. You can live with 30% to 35% because you don’t do R&D. So, the revenue being liability, you are right, this industry is or this business domain has been in this mentality, I am not, we are not.
