Stratasys Releases First Quarter 2024 Financial Results

• Revenue of $144.1 million, flat year over year excluding the impact of divestitures
• Record recurring consumables revenue reflects continued strong printer utilization
• GAAP net loss of $26.0 million, or $0.37 per diluted share, and non-GAAP net loss of $1.7 million, or $0.02 per diluted share
• $7.3 million in cash generated from operations and positive free cash flow of $4.3 million
• Strong F3300 pipeline ahead of expectations
• Reiterates 2024 outlook

Stratasys Ltd. (Nasdaq: SSYS) (“Stratasys” or the “Company”), a leader in polymer 3D printing solutions, today announced financial results for the first quarter 2024.

First Quarter 2024 Financial Results Compared to First Quarter 2023:

• Revenue of $144.1 million compared to $149.4 million.
• GAAP gross margin of 44.4%, compared to 43.8%.
• Non-GAAP gross margin of 48.6%, compared to 47.3%.
• GAAP operating loss of $24.5 million, compared to an operating loss of $16.8 million.
• Non-GAAP operating loss of $1.2 million, compared to non-GAAP operating income of $1.5 million.
• GAAP net loss of $26.0 million, or $0.37 per diluted share, compared to a net loss of $22.2 million, or $0.33 per diluted share.
• Non-GAAP net loss of $1.7 million, or $0.02 per diluted share, compared to non-GAAP net income of $1.1 million, or $0.02 per diluted share.
• Adjusted EBITDA of $4.1 million, compared to $7.0 million.
• Cash generated by operating activities of $7.3 million, compared to cash used by operating activities of $17.9 million in the year-ago quarter.

Dr. Yoav Zeif, Stratasys’ Chief Executive Officer, stated, “We delivered solid first quarter operating and financial results that included record consumables revenues, improved gross margins and positive operating and free cash flow, despite the ongoing challenges posed by our customers’ capital spending constraints. We continue to see increased traction for our newest technology, the F3300 FDM system, as leading companies such as Nissan, BAE Systems and Sikorsky have joined Toyota as early customers that will benefit with faster, lower-cost manufacturing of end-use parts.”

Dr. Zeif continued, “Our healthy balance sheet, and financial and operating discipline, provide stability to weather the current environment. And when the macro environment eases and capital spending returns to normal levels, our differentiated portfolio and leading go-to-market strength position us to meaningfully accelerate profitable growth, driving long-term shareholder returns.”

2024 Financial Outlook:

Based on current market conditions and assuming that the impacts of global inflationary pressures, relatively high interest rates and supply chain costs do not impede economic activity further, the Company is reiterating its outlook for 2024 as follows:

• Full-year revenue of $630 million to $645 million.
  • Compare to 2023 revenue of approximately $616 million excluding divestments and annualizing Covestro.
• Full-year non-GAAP gross margins of 49.0% to 49.5%, improving sequentially throughout the year.
• Full-year operating expenses in the range of $292 million to $297 million.
• Full-year non-GAAP operating margins in a range of 2.5% to 3.5%.
• GAAP net loss of $88 million to $72 million, or ($1.24) to ($1.01) per diluted share.
  • Includes one-time extraordinary costs associated with Stratasys’ strategic alternatives process.
• Non-GAAP net income of $9 million to $14 million, or $0.12 to $0.19 per diluted share.
• Adjusted EBITDA of $40 million to $45 million.
• Capital expenditures of $20 million to $25 million.
• Positive cash flow from operating activities.

Non-GAAP earnings guidance excludes $29 million to $31 million of share-based compensation expense, $26 million to $28 million of projected amortization of intangible assets, and reorganization and other expenses of $29 million to $35 million. Non-GAAP guidance includes tax adjustments of $2 million to $3 million on the above non-GAAP items.

Appropriate reconciliations between GAAP and non-GAAP financial measures are provided in a table at the end of our press release and slide presentation, with itemized detail concerning the non-GAAP financial measures.

Stratasys Ltd. First Quarter 2024 Webcast and Conference Call Details

The Company plans to webcast its conference call to discuss its first quarter 2024 financial results on Wednesday, May 29, 2024, at 5:00 p.m. (ET).

The investor conference call will be available via live webcast on the Stratasys Web site at investors.stratasys.com, or directly at the following web address:

https://event.choruscall.com/mediaframe/webcast.html?webcastid=H13Rjkjs

To participate by telephone, the U.S. toll-free number is 877-407-0619 and the international dial-in is [phone]. Investors are advised to dial into the call at least ten minutes prior to the call to register. The webcast will be available for six months at investors.stratasys.com, or by accessing the above-provided web address.

Stratasys is leading the global shift to additive manufacturing with innovative 3D printing solutions for industries such as aerospace, automotive, consumer products, healthcare, fashion and education. Through smart and connected 3D printers, polymer materials, a software ecosystem, and parts on demand, Stratasys solutions deliver competitive advantages at every stage in the product value chain. The world’s leading organizations turn to Stratasys to transform product design, bring agility to manufacturing and supply chains, and improve patient care.

To learn more about Stratasys, visit www.stratasys.com, the Stratasys blog, X.com (formerly Twitter), LinkedIn, or Facebook. Stratasys reserves the right to utilize any of the foregoing social media platforms, including the Company’s websites, to share material, non-public information pursuant to the SEC’s Regulation FD. To the extent necessary and mandated by applicable law, Stratasys will also include such information in its public disclosure filings.

Stratasys is a registered trademark and the Stratasys signet is a trademark of Stratasys Ltd. and/or its subsidiaries or affiliates. All other trademarks are the property of their respective owners.

Cautionary Statement Regarding Forward-Looking Statements

The statements in this press release regarding Stratasys' strategy, and the statements regarding its projected future financial performance, including the financial guidance concerning its expected results for 2023 and beyond, are forward-looking statements reflecting management's current expectations and beliefs. These forward-looking statements are based on current information that is, by its nature, subject to rapid and even abrupt change. Due to risks and uncertainties associated with Stratasys' business, actual results could differ materially from those projected or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to: the degree of our success at introducing new or improved products and solutions that gain market share; the degree of growth of the 3D printing market generally; the impact of potential shifts in the prices or margins of the products that we sell or services that we provide, including due to a shift towards lower margin products or services; the impact of competition and new technologies; potential further charges against earnings that we could be required to take due to impairment of additional goodwill or other intangible assets; the extent of our success at successfully consummating and integrating into our existing business acquisitions or investments in new businesses, technologies, products or services; the global macro-economic environment, including headwinds caused by inflation, relatively high interest rates, unfavorable currency exchange rates and other growth-inhibiting conditions; potential changes in our management and board of directors; global market, political and economic conditions, and in the countries in which we operate in particular; costs and potential liability relating to litigation and regulatory proceedings; risks related to infringement of our intellectual property rights by others or infringement of others' intellectual property rights by us; the extent of our success at maintaining our liquidity and financing our operations and capital needs; the impact of tax regulations on our results of operations and financial condition; and those additional factors referred to in Item 3.D “Key Information - Risk Factors”, Item 4, “Information on the Company”, Item 5, “Operating and Financial Review and Prospects,” and all other parts of our Annual Report on Form 20-F for the year ended December 31, 2023, which we filed with the U.S. Securities and Exchange Commission, or SEC, on March 11, 2024 (the “2023 Annual Report”). Readers are urged to carefully review and consider the various disclosures made throughout our 2023 Annual Report and the Report of Foreign Private Issuer on Form 6-K that attaches Stratasys’ unaudited, condensed consolidated financial statements and its review of its results of operations and financial condition, for the quarterly period ended March 31, 2024, which will be furnished to the SEC on or about May 30, 2024, and our other reports filed with or furnished to the SEC, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects. Any guidance provided, and other forward-looking statements made, in this press release are provided or made (as applicable) as of the date hereof, and Stratasys undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Use of Non-GAAP Financial Measures

The non-GAAP data included herein, which excludes certain items as described below, are non-GAAP financial measures. Our management believes that these non-GAAP financial measures are useful information for investors and shareholders of our company in gauging our results of operations (i) on an ongoing basis after excluding mergers, acquisitions, divestments and strategic process-related expense or gains and reorganization-related charges or gains, and legal provisions and (ii) excluding non-cash items such as share-based compensation expenses, acquired intangible assets amortization, including intangible assets amortization related to equity-method investments, impairment of long-lived assets and goodwill, revaluation of our investments and the corresponding tax effect of those items. These non-GAAP adjustments either do not reflect actual cash outlays that impact our liquidity and our financial condition or have a non-recurring impact on the statement of operations, as assessed by management. These non-GAAP financial measures are presented to permit investors to more fully understand how management assesses our performance for internal planning and forecasting purposes. The limitations of using these non-GAAP financial measures as performance measures are that they provide a view of our results of operations without including all items indicated above during a period, which may not provide a view of our performance that is comparable to those of other companies in our industry. Investors and other readers should consider non-GAAP measures only as supplements to, not as substitutes for or as superior measures to, the measures of financial performance prepared in accordance with GAAP. Reconciliation between results on a GAAP and non-GAAP basis is provided in a table below.

Stratasys Ltd.

Consolidated Balance Sheets (Unaudited)

(in thousands, except share data)

March 31,

December 31,

2024

2023

ASSETS

Current assets

Cash and cash equivalents

$

91,089

 

$

82,585

 

Short-term bank deposits

 

70,000

 

 

80,000

 

Accounts receivable, net of allowance for credit losses of $1,455 and $1,449 as of March 31, 2024 and December 31, 2023, respectively

 

155,349

 

 

172,009

 

Inventories

 

195,060

 

 

192,976

 

Prepaid expenses

 

9,507

 

 

7,929

 

Other current assets

 

21,090

 

 

24,596

 

 


Total current assets

 

542,095

 

 

560,095

 

Non-current assets

Property, plant and equipment, net

 

189,942

 

 

197,552

 

Goodwill

 

99,121

 

 

100,051

 

Other intangible assets, net

 

121,195

 

 

127,781

 

Operating lease right-of-use assets

 

17,577

 

 

18,895

 

Long-term investments

 

116,285

 

 

115,083

 

Other non-current assets

 

13,820

 

 

14,448

 

 


Total non-current assets

 

557,940

 

 

573,810

 

Total assets

$

1,100,035

 

$

1,133,905

 

LIABILITIES AND EQUITY

Current liabilities

Accounts payable

$

37,806

 

$

46,785

 

Accrued expenses and other current liabilities

 

32,620

 

 

36,656

 

Accrued compensation and related benefits

 

37,402

 

 

33,877

 

Deferred revenues - short-term

 

54,480

 

 

52,610

 

Operating lease liabilities - short-term

 

5,898

 

 

6,498

 

 


Total current liabilities

 

168,206

 

 

176,426

 

Non-current liabilities

Deferred revenues - long-term

 

19,193

 

 

23,655

 

Deferred income taxes - long-term

 

537

 

 

723

 

Operating lease liabilities - long-term

 

11,392

 

 

12,162

 

Contingent consideration - long-term

 

11,569

 

 

11,900

 

Other non-current liabilities

 

22,988

 

 

24,200

 

 


Total non-current liabilities

 

65,679

 

 

72,640

 

Total liabilities

 

233,885

 

 

249,066

 

Equity

Ordinary shares, NIS 0.01 nominal value, authorized 180,000






shares; 70,440 shares and 69,656 shares issued

 

197

 

 

195

 

and outstanding at March 31, 2024 and December 31, 2023, respectively

 

3,100,445

 

 

3,091,649

 

Additional paid-in capital






Accumulated other comprehensive loss

 

(8,583

)

 

(7,079

)

Accumulated deficit

 

(2,225,909

)

 

(2,199,926

)

Total Equity

 

866,150

 

 

884,839

 

Total liabilities and equity

$

1,100,035

 

$

1,133,905

 

Stratasys Ltd.

Consolidated Statements of Operations

(in thousands, except per share data)






 

Three Months Ended March 31,

2024

2023

unaudited

unaudited

Revenues

Products

$

99,196

 

$

100,971

 

Services

 

44,854

 

 

48,406

 

 

144,050

 

 

149,377

 

Cost of revenues

Products

 

49,757

 

 

51,113

 

Services

 

30,396

 

 

32,869

 

 

80,153

 

 

83,982

 

Gross profit

 

63,897

 

 

65,395

 

Operating expenses

Research and development, net

 

23,977

 

 

21,475

 

Selling, general and administrative

 

64,373

 

 

60,717

 

 

88,350

 

 

82,192

 

Operating income (loss)

 

(24,453

)

 

(16,797

)

 


Financial income, net

 

1,217

 

 

773

 

Income (loss) before income taxes

 

(23,236

)

 

(16,024

)

 


Income tax expense

 

(716

)

 

(3,775

)

 


Share in losses of associated companies

 

(2,031

)

 

(2,425

)

Net loss

$

(25,983

)

$

(22,224

)

Net loss per share

Basic

$

(0.37

)

$

(0.33

)

Diluted

$

(0.37

)

$

(0.33

)

Weighted average ordinary shares outstanding

Basic

 

69,993

 

 

67,583

 

Diluted

 

69,993

 

 

67,583

 

Three Months Ended March 31,

2024

 

Non-GAAP

 

2024

 

2023

 

Non-GAAP

 

2023

GAAP

 

Adjustments

 

Non-GAAP

 

GAAP

 

Adjustments

 

Non-GAAP

U.S. dollars and shares in thousands (except per share amounts)

Gross profit (1)

$

63,897

 

$

6,139

 

$

70,036

 

$

65,395

 

$

5,299

$

70,694

Operating income (loss) (1,2)

 

(24,453

)

 

23,254

 

 

(1,199

)

 

(16,797

)

 

18,315

 

1,518

Net income (loss) (1,2,3)

 

(25,983

)

 

24,299

 

 

(1,684

)

 

(22,224

)

 

23,306

 

1,082

Net income (loss) per diluted share (4)

$

(0.37

)

$

0.35

 

$

(0.02

)

$

(0.33

)

$

0.35

$

0.02

(1)

Acquired intangible assets amortization expense

 

5,084

 

 

4,001

Non-cash stock-based compensation expense

 

952

 

 

932

Restructuring and other related costs

 

103

 

 

366

 

6,139

 

 

5,299

(2)

Acquired intangible assets amortization expense

 

2,459

 

 

2,194

Non-cash stock-based compensation expense

 

7,697

 

 

7,308

Restructuring and other related costs

 

920

 

 

1,798

Revaluation of investments

 

1,900

 

 

580

Contingent consideration

 

511

 

 

265

Legal, consulting and other expenses

 

3,628

 

 

871

 

17,115

 

 

13,016

 

23,254

 

 

18,315

(3)

Corresponding tax effect and other expenses

 

234

 

 

3,038

Equity method related amortization

 

964

 

 

1,490

Finance (income) expenses

 

(153

)

 

463

$

24,299

 

$

23,306

(4)

Weighted average number of ordinaryshares outstanding - Diluted

 

69,993

 

 

69,993

 

 

67,583

 

 

68,080

Stratasys Ltd.

Reconciliation of GAAP to Non-GAAP Forward Looking Guidance

Fiscal Year 2024

 


(in millions, except per share data)






 




 

GAAP net loss

($88) to ($72)




 

Adjustments

Stock-based compensation expense

$29 to $31


Intangible assets amortization expense

$26 to $28


Reorganization and other

$29 to $35


Tax expense (benefit) related to Non-GAAP adjustments

$2 to $3




 

Non-GAAP net income

$9 to $14




 

GAAP loss per share

($1.24) to ($1.01)




 

Non-GAAP diluted earnings per share

$0.12 to $0.19




 

 

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Yonah Lloyd CCO & VP Investor Relations [e-mail]