The changes in foreign currency gains were primarily driven by the valuation of the intercompany loans granted by the parent company to our U.S. subsidiary. The changes in foreign currency losses were mainly driven by the valuation of the liability against our subsidiary voxeljet China related to the capital increase carried out in the second quarter of 2022.

Operating loss was kEUR 2,947 in the second quarter of 2023 compared to an operating loss of kEUR 1,957 in the comparative period in 2022. This was mainly due to a lower positive net impact from other operating expenses and other operating income amounting to kEUR 486 for the second quarter of 2023 compared to a positive net impact amounting to kEUR 998 for the second quarter of 2022, in combination with a slight decrease in gross profit in the second quarter of 2023 compared to the second quarter of 2022. In addition, selling and administrative expenses increased compared to last year’s second quarter. This was partially offset by slightly lower research and development expenses.

Financial result was negative kEUR 678 in the second quarter of 2023, compared to a financial result of positive kEUR 93 in the comparative period in 2022. In the following, the primary components of the financial result are described.

In October 2022, the loan granted by the European Investment Bank (the ‘EIB Loan') including all interest was early settled and consequently the loan and the related derivative financial instruments were derecognized, therefore there is no finance income/expense from EIB Loan/derivatives for the second quarter of 2023, compared to a finance income of kEUR 1,037 from revaluation of derivative financial instruments for the comparative period in 2022. Those derivative financial instruments were revalued on each balance sheet date, with changes in the fair value between reporting periods recorded within the financial result of the consolidated statements of comprehensive loss. An increase in our share price resulted in a finance expense, while a decrease led to a finance income, keeping other parameters constant. In relation with the early repayment of (i) the EIB Loan in October 2022 and (ii) loans granted by Sparkasse Schwaben-Bodensee, Germany (formerly Kreissparkasse Augsburg) in August and October 2022, also the interest expense from long term-debt decreased to kEUR 133 for the second quarter of 2023, compared to kEUR 583 for the second quarter of 2022.

This decrease was partially offset by increased interest expense on lease liabilities amounted to kEUR 289 for the second quarter of 2023, compared to kEUR 33 for the comparative period in 2022 related to the sale and leaseback transaction regarding voxeljet AG’s properties located in Friedberg, Bavaria, Germany. The transaction closed on October 31, 2022 and the lease term commenced on November 1, 2022. As a result of completion of this transaction, the Company derecognized a carrying amount of kEUR 14,062 relating to land and buildings and recognized a right of use asset and lease liability at an amount of kEUR 9,161 and kEUR 17,263, respectively.

In addition, finance expense related to the change in fair value of bond funds decreased from kEUR 330 for the second quarter of 2022 to kEUR 0 for the second quarter of 2023.

Financial result also included finance expense from revaluation of derivative financial instruments related to the Anzu Note (as described in Note 1) amounting to kEUR 298 for the second quarter of 2023, compared to kEUR 0 for the comparative period. For further information, see Note 7.

Net loss for the second quarter of 2023 was kEUR 3,637 or EUR 0.40 per share, as compared to net loss of kEUR 1,799, or EUR 0.26 per share, in the second quarter of 2022.

Six Months Ended June 30, 2023 Results

Revenues for the six months ended June 30, 2023 increased by 13.4% to kEUR 12,852 from kEUR 11,331 for the prior year period.

Systems revenues were kEUR 7,184 for the first six months of 2023 compared to kEUR 5,028 for the same period last year. The Company sold four new 3D printers during the first six months of 2023, compared to three new and one used and refurbished 3D printer during the prior year period. Systems revenues also include all Systems-related revenues from consumables, spare parts and maintenance. The increase in revenues from our Systems segment was mainly related to a significant increase in revenues from the sale of 3D printers due to a more favorable product mix which included more larger scale platforms. In addition, Systems-related revenues increased due to higher market demand in our after-sales activities in connection with an increased installed base of our 3D printers. Systems revenues represented 55.9% of total revenue for the six months ended June 30, 2023 compared to 44.4% for the same period in the prior year.

Services revenues were kEUR 5,668 for the six months ended June 30, 2023 compared to kEUR 6,303 for the same period last year. This decrease of 10.1% was mainly due to lower revenue contributions from our German service center and our subsidiary voxeljet China. This was partially offset by higher revenue contributions from our American service center, and we see continuing strong market demand in our Services segment from the Americas region. After a particularly strong year 2022 in the EMEA region, we have witnessed a decrease in market demand in this region, but a considerable level of demand existed for the six months ended June 30, 2023.

Cost of sales for the six months ended June 30, 2023 were kEUR 9,082, an increase of kEUR 1,433 compared to cost of sales of kEUR 7,649 for the same period in 2022.

Gross profit and gross profit margin for the six months ended June 30, 2023 were kEUR 3,770 and 29.3%, respectively, compared to kEUR 3,682 and 32.5% for the prior year period.

Gross profit for our Systems segment increased to kEUR 1,975 for the six months ended June 30, 2023 from kEUR 1,114 for the same period in 2022. This improvement was mainly driven by the increase in revenues. Gross profit margin for our Systems segment also increased, amounting to 27.5% for the six months ended June 30, 2022 compared to 22.2% for the prior year period, mainly due to a more favorable product mix, especially regarding the sale of 3D printers. The sale of larger scale platforms usually provides higher gross profit (margins) compared to smaller platforms. We recognized a change in valuation allowance for inventories following the Company’s inventory reserve policy amounting to kEUR 156 negative for the six months ended June 30, 2023, compared to kEUR 334 negative for the last year’s same period.

Gross profit for our Services segment decreased to kEUR 1,795 for the six months ended June 30, 2023 from kEUR 2,568 in the same period 2022. Also gross profit margin for this segment decreased to 31.7% for the first six months of 2023 from 40.7% in the same period in 2022. Both decreases were mainly related to lower gross profit as well as gross profit margin contributions from the German operation as well as from our Chinese subsidiary, reflecting the lower utilization of both service centers in line with the declined revenues. This was partially offset by our subsidiary voxeljet America, where gross profit as well as gross profit margin improved as a result of a higher utilization of the American service center, reflecting the increase in revenues.

Selling expenses were kEUR 4,032 for the six months ended June 30, 2023 compared to kEUR 3,525 for the same period in 2022. The year-over-year increase was mainly due to higher expenses for trade fairs and exhibitions as well as higher distribution expenses primarily corresponding to the increase in revenues. Shipping and packaging expenses as a main driver of the selling expenses varies noticeable from quarter to quarter depending on quantity and types of products, as well as the destinations where those goods are being delivered.

Administrative expenses decreased by kEUR 40 to kEUR 3,142 for the first six months of 2023 from kEUR 3,182 for the prior year period and therefore remained almost the same.

R&D expenses slightly increased to kEUR 3,137 for the six months ended June 30, 2023 from kEUR 3,094 for the same period in 2022, a increase of kEUR 43. This was mainly due to higher expenses for materials and higher usage of external services. R&D expenses can vary from quarter to quarter and are usually driven by variations in project types and phases.

Other operating expenses for the six months ended June 30, 2023 were kEUR 614 compared to kEUR 414 for the prior year period. This was mainly due to higher losses from foreign currency transactions amounting to kEUR 550 for the six months ended June 30, 2023 compared to kEUR 258 for the prior year period.