evenue Growth and Commercialization Progress of DPS Devices for XTPL in 2023
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Revenue from sales of products and services
The company's main revenue streams in 2023 are research and development and product sales, which, due to the commercialization of equipment, have an increasing share of revenue. A stable source of revenue is grants, which, according to our assumptions, the company will also receive in future periods. Revenues from research and development services gained materiality in 2022, which continues in 2023, and is due to the greater advancement of work on projects with external partners (nine projects with commercial partners are currently underway). The company's revenue in 1H23 (we include preliminary revenue data for 2Q23) recorded a slight y/y increase (lower subsidies offset by an increase in R&D revenue). The company contracted sales of a significantly higher number of DPS devices in 1H23 y/y, which, together with further contracts, should positively impact y/y revenue growth in 2023.
Commercialization of DPS devices is progressing gradually. The purchase of the device is preceded by numerous tests - HB Technology (a South Korean company) took more than 30 months to make a purchase decision. Taking into account the increasing time from the start of product commercialization and the attractive sales funnel, we expect that sales of printers should accelerate in 2023 (seven months of data confirm this).
We note that, in the initial phase of commercialization (2021-2Q22), the printers were exclusively sold to universities and research centers. The first sale to a business entity occurred in 3Q22 (HB Technology of South Korea), and by July 2023, four of 21 devices had been sold to business entities (including two to HB Technology). Considering printer sales in 2021-23, the most devices went to China (eight devices), followed by Germany (five devices).
An important factor shaping sales in future periods will be the progress of industrial deployment projects, three of which are at an advanced stage. Potential industrial deployment should translate into a jump in sales of Epsilon devices, which would drive sales volumes. We estimate that, due to the lower complexity of the Epsilon than the Delta Printing System, the price of the device should be in the range of EUR 90- 100k vs. the EUR 170-200k assumed for the DPS device. Nanopaste currently accounts for a low share of XTPL's total sales. The number of orders for nanotubes is highly correlated with the number of DPS devices sold. Continued sales of DPS devices and the start of industrial deployments should have a positive impact on revenues generated in this sales channel.
