NewsI discovered ExOne earlier this year, when I did a quick survey of the 3D printing universe for a client. ExOne’s rapid prototyping machines use glass, sand and metals in a binder jetting process that (the company says) is faster and can make larger prototypes than many of its competitors. ExOne completed its IPO in February of 2013 and so reports results that help us round out our impression of the 3D printing universe.

For the December quarter, ExOne reported revenue of $12.7 million, boosting the total for 2012 to $28.7 million, up a rockin’ 85%. That growth is expected to mitigate a bit in 2013, but still be somewhere in the range of 65% t0 80% in 2013. CEO Kent Rockwell acknowledges that it’s easy to move the needle this much when the numbers are small — but he believes there is significant potential even as the numbers get bigger.

By geo, for the full year 2012, 43% of revenue came from Europe, 30% from Asia and 27% from the Americas. The company saw ‘softness’ in some countries, like Germany, but says that things seem to be improving. Mr. Rockwell talked about the challenges of moving ExOne out of an “incubative” period to one of rapid growth on a global level.

The company says that increased machine sales drove year-over-year growth in Q4 and in the full year, as new customers became more aware of additive manufacturing and existing customers wanted new models that use new materials and are larger and faster.

Rapid growth, large investments in machine and materials R&D as well as the cost of the IPO and its after-effects led ExOne to report a net loss for the year of $10.2 million.

COO David Burns told investors that materials are critical for ExOne’s competitive differentiation and that it will continue to invest heavily in materials technology because each new certified material opens new markets.

ExOne makes machines for commercial sales but also derives significant revenue from its Production Service Centers (PSC) that use its machines to manufacture parts for customers. ExOne places PSCs in industrial hubs and sees these manufacturing facilities as showcases for its newest production machines (which may lead to machine sales) and as a source of recurring revenue even when the overall economy slows sales of machines. ExOne intends to expand from 5 to 15 PSCs by 2015, with 2 or 3 new centers launched in 2013.

In 2012, machines accounted for 55% of total revenue while PSC was 45%. Consumables alone represented 7.5% of total revenue in 2012. For 2013, the company guided to revenue of $48 million to $52 million with approximately two-thirds of revenue expected to come in the second half of the year.

Mr. Burns says that ExOne doesn’t compete with other additive manufacturing suppliers, but against traditional machining processes as it tries to displace those processes with its own. So while its competitors talk volume and “makers”, ExOne sells tens of specialized machines that can cost as much as $750,000.

Around the world, manufacturers are weighing the flexibility of additive manufacturing against the cost and benefits of using existing processes and machines. Justifying that initial $750k investment is undoubtedly difficult, but more and more companies see additive manufacturing (which really should be called something else in this production context) as a strategic differentiator, worth the start-up cost.

I am very interested to see the development of the additive manufacturing/rapid prototyping market as we get to machines that are used almost exclusively for production versus those that are used almost exclusively for design. How will materials technology drive each? Which will wind up being more strategic? If you’re a design-manufacture company, do you have to choose or are budgets big enough (and the value proposition strong enough) to justify both? Chime in with your comments, below!