For example, the EV, we are working with customers on a lighter solution for electric vehicles and so on and so forth. The key here, do it with your customer. Fair use case where only additives can do it. A good example is also Toyota and F3300.
Ananda Baruah : So, that’s super helpful and it gave me an idea for a follow-up, which I think really will get at maybe unpacking a little bit more of the heart of my question. That’s a super good tee-up. And this might be a little bit of a challenging question, just because I’m sure different industries, different customers in different industries are in different places. But I guess, is there any general context you can provide around in the process you just described? How much until you really can catalyze up the revenue opportunity in your key segments? How much is more dependent on you guys forwarding the technology to particular thresholds versus how much of it is – you have the technology sort of relatively to where they need to be, to be dangerous. It’s really a matter of time and just getting into the design cycle and going through the design cycle process, which I know can take some years depending on category. And that’s it for me. Thanks.
Yoav Zeif: It’s a great question. Very hard to relate to, because average will kill everything here. It’s like every application and every use case is a story by itself. Some applications, some use cases, we already have the full solution end-to-end. Take the dentures for example, you take tooling, jigs and fixtures, we have the right software, we have everything, it’s ready. It’s about the customer adopting it based on their cycle. You take other applications, we still have a way to go. In medical for example, in fashion, we have a way to go to make sure that the customers are really adopting it together with us. If they connect those, for example, we are there, but the customer still needs us to hold his hand. But demand is strong.
We see the engagement, because the customer, this customer advisory board that I mentioned, they wouldn’t spend days with us if they wouldn’t understand and that there are things that they can do with additive that they cannot do with anything else and it is creating competitive advantage for them. So I’m not going to give you an average. I can just say that one, we are engaging and we are working with customers at different levels. It depends on the different use cases, but we are not talking about 10 years or 15 years. It’s not something which is – it’s not biological. It’s not like we need to wait someone to grow up 15 years. It’s something that can take between one year or a few months to maximum three years, maybe a little bit more, those applications that we are focusing in.
And the second thing is that the demand is there and it’s kind of the growth paradox. We are struggling as an industry, take step by step by step, but we are progressing in the right way and the moment they will adapt it, either in the new cycle or for new product, we will see the growth coming in a big way.
Ananda Baruah : Yes. Yes, we’ve seen it before. That’s super helpful. I really appreciate it. Thanks.
Yoav Zeif: Thank you.
Operator: Thank you. Next question is coming from Brian Drab from William Blair. Your line is now live.
Q – Blake Keating: Hi, good morning. This is Blake on for Brian. I just wanted to ask, about the revenue guidance. Can you talk – you mentioned that you set out guidance that you can hit. Can you talk about the different dynamics that you get, that get you to the high end versus the low end of the range?
Eitan Zamir: Hi Brian. Sorry, Blake. Hi, Blake. So I’ll touch on some of the trends that kind of help us think about the low end and the high end. So one is the launch of the F3300 that is going to be a significant growth driver in 2024. We’ve not launched it as you know, but we actually see a huge demand and a significant backlog that start to pile up. So a successful year for F3300 can take us from the low end to the high end, so that’s one growth engine. The other one that also Yoav mentioned earlier is consumable. That’s something that we have high certainty that it will continue to grow in 2024, but of course it depends. Software is another growth engine that it takes time to reach the high revenue level that start to be very meaningful, but still something that comes with very high margins and increased significantly in 2023.
We believe that the trend will continue. And of course, above all there is also the macro question, that of course can impact the, whether we are at the lower or the high end or somewhere on that scale based on the – what the macro will be in 2024.
Yoav Zeif: Yeah. And just to add to what Eitan said for a more strategic perspective. When we are coming with such type of guidance, it’s based on the foundations that we build. We truly believe that we are ready to capture the next phase of growth, like I talked with Ananda. And we are ready, because practically we are leading the industry in terms of performance and customer preference. We are growing, yes, not a lot, but in a declining market. We have record consumable sales with higher utilization. We increased our market share over the last three years. We demonstrate financial, actually unique financial stability in terms of profitability, gross margin, no debt, cash flow, and we have a strategy with five growth engines of the new technologies, the new use cases, the consumable, the software and SDM is a driver into manufacturing.
And we build over the last three years foundations like the go-to-market, the diversified portfolio, the relationship with our customer, the Siemens and the Toyota and the U.S. government of the world that makes us ready. That’s why we have the comfort and the confidence to come with that guidance in a tough time, because we are ready.
