SSYS Stratasys Ltd

• Revenue of $138.0 million, compared to $159.8 million ($154.6 million net of divestments) in second quarter 2023, related to ongoing impact of current macroeconomic environment on customer capital equipment purchasing
• Year-over-year growth in recurring consumables revenue of 6.3% reflects continued strong printer utilization
• Improved GAAP gross margin by 230bps and non-GAAP gross margin by 50bps compared to second quarter 2023.
• GAAP net loss of $25.7 million, or $0.36 per diluted share, and non-GAAP net loss of $3.0 million, or $0.04 per diluted share
• $2.4 million in cash used in operations and negative free cash flow of $5.4 million
• Completes strategic review process and announces focused restructuring actions, which are expected to deliver incremental annualized savings of ~$40 million and annualized EBITDA margin of 8% at current revenue levels
• Updates 2024 outlook

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

Second Quarter 2024 Financial Results Compared to Second Quarter 2023:

• Revenue of $138.0 million, compared to $159.8 million ($154.6 million net of divestments).
• GAAP gross margin of 43.8%, compared to 41.5%.
• Non-GAAP gross margin of 49.0%, compared to 48.5%.
• GAAP operating loss of $26.0 million, compared to an operating loss of $33.7 million.
• Non-GAAP operating loss of $3.2 million, compared to non-GAAP operating income of $5.0 million.
• GAAP net loss of $25.7 million, or $0.36 per diluted share, compared to a net loss of $38.6 million, or $0.56 per diluted share.
• Non-GAAP net loss of $3.0 million, or $0.04 per diluted share, compared to non-GAAP net income of $2.5 million, or $0.04 per diluted share.
• Adjusted EBITDA of $2.3 million, compared to $10.6 million.
• Cash used in operating activities of $2.4 million, compared to $23.2 million.

Business Update:

Following a comprehensive strategic review, Stratasys is taking focused restructuring actions to further strengthen its industry leading balance sheet and robust business model to more effectively weather all market cycles. The initiatives are expected to support ongoing focused innovation investments and facilitate wider adoption of additive manufacturing.

Effective immediately, the Company will streamline operations and enhance its go to market strategy to focus on the highest growth potential products, materials and software solutions. By the end of this year, the Company will have rightsized its workforce by approximately 15%. These steps are expected to produce approximately $40 million in annual cost savings beginning in the first quarter of 2025, along with annualized EBITDA margins of 8% at current revenue levels. Furthermore, in addition to sustainable profitability, the Company will remain well-positioned to act upon opportunities that may arise.

Dr. Yoav Zeif, Stratasys’ Chief Executive Officer, stated, “For the Company to maintain its industry leadership, we continuously evaluate and assess our business model to ensure we are optimally aligned with evolving market conditions. We are confident that our efforts will enable our customers to more effectively address their biggest manufacturing challenges, which should lead to increased adoption of our additive technologies. This realignment is critical to ensure that we can achieve our objectives to deliver sustained profitability and cash flow, while remaining ready to capture opportunities when the spending cycle improves, positioning Stratasys to deliver outsized shareholder value.”

Dr. Zeif continued, “During the quarter we achieved strong consumables sales, and strengthened our market position with the addition of leading products, including the H350 version 1.5 printer, the J5 Digital Anatomy printer, and many exciting new software offerings. We understand the importance of a disciplined approach to balancing investment in innovation with staying focused on delivering the most impactful additive manufacturing applications to our customers and value to shareholders.”

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 updating its outlook for the full year 2024 as follows:

• Revenue of $570 million to $580 million.
  • Third quarter revenue slightly higher than second quarter revenue.
• Non-GAAP gross margin of 48.7% to 49.0%.
• Operating expenses of $276 million to $278 million.
• Non-GAAP operating margin of 0.5% to 1.0%.
• GAAP net loss of $106 million to $91 million, or ($1.50) to ($1.29) per diluted share.
  • Includes one-time extraordinary costs associated with Stratasys’ strategic alternatives process.
• Non-GAAP net income of $1 million to $4 million, or $0.01 to $0.05 per diluted share.
• Adjusted EBITDA of $24 million to $27 million.
• Capital expenditures of $20 million to $25 million.

Non-GAAP earnings guidance excludes $30 million to $32 million of share-based compensation expense, $25 million to $27 million of projected amortization of intangible assets, and reorganization and other expenses of $39 million to $45 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. Second Quarter 2024 Webcast and Conference Call Details

The Company plans to webcast its conference call to discuss its second quarter 2024 financial results on Thursday, August 29, 2024, at 8:30 a.m. (ET).

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

https://event.choruscall.com/mediaframe/webcast.html?webcastid=2xc8Kb5W

To participate by telephone, the U.S. toll-free number is 877-407-0619 and the international dial-in is +1-412-902-1012. 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 2024 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 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 and six-month periods ended June 30, 2024, which will be furnished to the SEC on or about August 29, 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 (in thousands, except share data) June 30, December 31,

2024

2023

    ASSETS   Current assets Cash and cash equivalents

$

70,858

 

$

82,585

 

Short-term bank deposits

 

80,000

 

 

80,000

 

Accounts receivable, net of allowance for credit losses of $1,424 and $1,449 as of June 30, 2024 and December 31, 2023, respectively

 

150,483

 

 

172,009

 

Inventories

 

196,505

 

 

192,976

 

Prepaid expenses

 

8,570

 

 

7,929

 

Other current assets

 

17,575

 

 

24,596

 

  Total current assets

 

523,991

 

 

560,095

 

  Non-current assets Property, plant and equipment, net

 

187,189

 

 

197,552

 

Goodwill

 

99,174

 

 

100,051

 

Other intangible assets, net

 

116,461

 

 

127,781

 

Operating lease right-of-use assets

 

17,928

 

 

18,895

 

Long-term investments

 

121,755

 

 

115,083

 

Other non-current assets

 

15,409

 

 

14,448

 

  Total non-current assets

 

557,916

 

 

573,810

 

  Total assets

$

1,081,907

 

$

1,133,905

 

  LIABILITIES AND EQUITY   Current liabilities Accounts payable

$

49,495

 

$

46,785

 

Accrued expenses and other current liabilities

 

31,627

 

 

36,656

 

Accrued compensation and related benefits

 

26,666

 

 

33,877

 

Deferred revenues - short-term

 

50,914

 

 

52,610

 

Operating lease liabilities - short-term

 

5,966

 

 

6,498

 

  Total current liabilities

 

164,668

 

 

176,426

 

  Non-current liabilities Deferred revenues - long-term

 

18,880

 

 

23,655

 

Deferred income taxes

 

558

 

 

723

 

Operating lease liabilities - long-term

 

11,780

 

 

12,162

 

Contingent consideration

 

11,851

 

 

11,900

 

Other non-current liabilities

 

23,699

 

 

24,200

 

  Total non-current liabilities

 

66,768

 

 

72,640

 

  Total liabilities

 

231,436

 

 

249,066

 

  Equity Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands shares; 71,132 shares and 69,656 shares issued

 

199

 

 

195

 

and outstanding at June 30, 2024 and December 31, 2023, respectively

 

3,111,057

 

 

3,091,649

 

Additional paid-in capital Accumulated other comprehensive loss

 

(9,133

)

 

(7,079

)

Accumulated deficit

 

(2,251,652

)

 

(2,199,926

)

Total Equity

 

850,471

 

 

884,839

 

  Total liabilities and equity

$

1,081,907

 

$

1,133,905

 

Stratasys Ltd.   Consolidated Statements of Operations   (in thousands, except per share data)   Three Months Ended June 30, Six Months Ended June 30,

 

2024

 

 

2023

 

 

2024

 

 

2023

 

unaudited unaudited unaudited unaudited Revenues Products

$

93,594

 

$

109,112

 

$

192,790

 

$

210,083

 

Services

 

44,447

 

 

50,639

 

 

89,301

 

 

99,045

 

 

138,041

 

 

159,751

 

 

282,091

 

 

309,128

 

  Cost of revenues Products

 

46,756

 

 

57,576

 

 

96,513

 

 

108,689

 

Services

 

30,785

 

 

35,953

 

 

61,181

 

 

68,822

 

 

77,541

 

 

93,529

 

 

157,694

 

 

177,511

 

  Gross profit

 

60,500

 

 

66,222

 

 

124,397

 

 

131,617

 

  Operating expenses Research and development, net

 

25,680

 

 

24,305

 

 

49,657

 

 

45,780

 

Selling, general and administrative

 

60,863

 

 

75,576

 

 

125,236

 

 

136,293

 

 

86,543

 

 

99,881

 

 

174,893

 

 

182,073

 

  Operating loss

 

(26,043

)

 

(33,659

)

 

(50,496

)

 

(50,456

)

  Financial income (expense), net

 

(726

)

 

687

 

 

491

 

 

1,460

 

  Loss before income taxes

 

(26,769

)

 

(32,972

)

 

(50,005

)

 

(48,996

)

  Income tax expense

 

(762

)

 

725

 

 

(1,478

)

 

4,500

 

  Share in profits (losses) of associated companies

 

1,788

 

 

(4,918

)

 

(243

)

 

(7,343

)

  Net loss

$

(25,743

)

$

(38,615

)

$

(51,726

)

$

(60,839

)

  Net loss per share Basic

$

(0.36

)

$

(0.56

)

$

(0.74

)

$

(0.89

)

Diluted

$

(0.36

)

$

(0.56

)

$

(0.74

)

$

(0.89

)

  Weighted average ordinary shares outstanding Basic

 

70,746

 

 

68,648

 

 

70,367

 

 

68,107

 

Diluted

 

70,746

 

 

68,648

 

 

70,367

 

 

68,107

 

Three Months Ended June 30,

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)

$

60,500

 

$

7,175

 

$

67,675

 

$

66,222

 

$

11,283

$

77,505

Operating income (1,2)

 

(26,043

)

 

22,845

 

 

(3,198

)

 

(33,659

)

 

38,666

 

5,007

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

 

(25,743

)

 

22,774

 

 

(2,969

)

 

(38,615

)

 

41,148

 

2,533

Net income (loss) per diluted share (4)

$

(0.36

)

$

0.32

 

$

(0.04

)

$

(0.56

)

$

0.60

$

0.04

 

(1)

Acquired intangible assets amortization expense

 

4,489

 

 

5,014

Non-cash stock-based compensation expense

 

1,010

 

 

999

Restructuring and other related costs

 

1,676

 

 

3,378

Impairment charges and write off

 

-

 

 

1,892

 

7,175

 

 

11,283

 

(2)

Acquired intangible assets amortization expense

 

1,111

 

 

2,686

Non-cash stock-based compensation expense

 

6,335

 

 

7,024

Restructuring and other related costs

 

3,639

 

 

2,468

Contingent consideration

 

523

 

 

347

Legal and other expenses

 

4,062

 

 

14,858

 

15,670

 

 

27,383

 

22,845

 

 

38,666

 

(3)

Corresponding tax effect

 

204

 

 

213

Equity method related expenses

 

(1,593

)

 

2,094

Finance expenses

 

1,318

 

 

175

$

22,774

 

$

41,148

 

(4)

Weighted average number of ordinary shares outstanding - Diluted

 

70,746

 

 

70,746

 

 

68,648

 

 

69,272

Six Months Ended June 30,

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)

$

124,397

 

$

13,314

 

$

137,711

 

$

131,617

 

$

16,582

$

148,199

Operating income (1,2)

 

(50,496

)

 

46,099

 

 

(4,397

)

 

(50,456

)

 

56,981

 

6,525

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

 

(51,726

)

 

47,073

 

 

(4,653

)

 

(60,839

)

 

64,454

 

3,615

Net income (loss) per diluted share (4)

$

(0.74

)

$

0.67

 

$

(0.07

)

$

(0.89

)

$

0.95

$

0.05

 

(1)

Acquired intangible assets amortization expense

 

9,573

 

 

9,015

 

Non-cash stock-based compensation expense

 

1,962

 

 

1,931

 

Restructuring and other related costs

 

1,779

 

 

3,744

 

Impairment charges and write off

 

-

 

 

1,892

 

 

13,314

 

 

16,582

 

 

-

 

(2)

Acquired intangible assets amortization expense

 

3,570

 

 

4,880

 

Non-cash stock-based compensation expense

 

14,032

 

 

14,332

 

Restructuring and other related costs

 

4,559

 

 

4,266

 

Revaluation of investments

 

1,900

 

 

580

 

Contingent consideration

 

1,034

 

 

612

 

Legal and other expenses

 

7,690

 

 

15,729

 

 

32,785

 

 

40,399

 

 

46,099

 

 

56,981

 

 

0

 

(3)

Corresponding tax effect

 

438

 

 

3,251

 

Equity method related expenses

 

(629

)

 

3,584

 

Finance expenses

 

1,165

 

 

638

 

$

47,073

 

$

64,454

 

 

(4)

Weighted average number of ordinary shares outstanding - Diluted

 

70,367

 

 

70,367

 

 

68,107

 

 

68,683

Stratasys Ltd.   Reconciliation of GAAP to Non-GAAP Forward Looking Guidance   Fiscal Year 2024   (in millions, except per share data)     GAAP net loss ($106) to ($91)   Adjustments Stock-based compensation expense $30 to $32 Intangible assets amortization expense $25 to $27 Reorganization and other $39 to $45 Tax expense (benefit) related to Non-GAAP adjustments $2 to $3   Non-GAAP net income $1 to $4   GAAP loss per share ($1.50) to ($1.29)   Non-GAAP diluted earnings per share $0.01 to $0.05

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240829751469/en/

Yonah Lloyd CCO & VP Investor Relations Yonah.Lloyd@stratasys.com