3D Systems’ revenue miss for FY2024 sends stock crashing

3D Systems (NYSE:DDD) closed out its FY2024 revenue at $440 million, marking a 10% decrease compared to 2023’s $488.1 million. The drop was driven primarily by soft hardware demand and macroeconomic challenges. Revenue in the fourth quarter came in at $111 million—below analysts’ forecast of $115.2 million and down 3% year-over-year. A late-year accounting adjustment in the Regenerative Medicine program shaved $8.7 million off Q4 revenue, adding to the decline. As a result, stocks are down more than 20% today.

Gross profit fell to $164.2 million for the year, with gross margin dropping to 37.3%, down from 40.2% in 2023. The decline stemmed from the revenue shortfall and unfavorable manufacturing variances. Non-GAAP gross margin settled at 37.4%, down from 40.6%.

Reduced losses remain significant

On a GAAP basis, 3D Systems reported a net loss of $255.6 million for FY2024. This is, in fact, an improvement from the $362.7 million loss in 2023. Diluted loss per share narrowed to $1.94 from $2.79. However, adjusted EBITDA deteriorated sharply, falling from a $26.3 million loss in 2023 to a $66.4 million loss in 2024. The company also burned through $61 million in negative free cash flow, which, while steep, was better than 2023’s $107.9 million outflow.

Healthcare Solutions revenue dropped 11% year-over-year to $189.7 million. The Regenerative Medicine program, once a growth engine, faced setbacks due to the revised accounting treatment of milestone criteria. Industrial Solutions also saw a 9% decline, ending the year at $250.4 million. Despite sluggish sales through most of the year, Q4 saw a rebound in demand for industrial systems and consumables.

While the company has not publicly confirmed this, VoxelMatters’ data suggests that hardware declines were associated primarily with polymer-based systems rather than metal-based hardware sales, which represent a smaller part of the company’s overall business and have seen some growth, driven by demand for industrial solutions (via the existing partnership with GF), especially in semiconductor manufacturing, and dental applications.

To strengthen its balance sheet, 3D Systems is finalizing the sale of its Geomagic software platform for $123 million. With all regulatory approvals secured, the deal is expected to close in early Q2 2025. The proceeds will support efforts to reduce debt and sustain critical R&D investments.

At year-end, the company held $171 million in cash, which will rise after the Geomagic sale. Total debt stood at $212 million, including convertible notes set to mature in Q4 2026. Over 50% of those notes were retired in 2024.

The company initiated a new cost-cutting program in Q1 2025, aiming for over $50 million in annualized savings by mid-2026. Operating expenses fell to $441.6 million in 2024, a marked improvement from $602.4 million in 2023. These savings are expected to support EBITDA improvements, especially as new product launches gain traction.

3D Systems is confident that despite flat to modest top-line growth, it can return to positive adjusted EBITDA by Q4 2025. The company is betting on strong execution, tighter cost control, and recovering demand to stabilize financial performance.

Stock plummets, but outlook remains positive

The market responded sharply to the missed earnings. Following the Q4 and FY2024 release, 3D Systems shares sank 17.1% in early Thursday trading and have been down over 20% since the results were published. Analysts had forecast a $0.11 loss per share for Q4, but the actual result was a $0.19 non-GAAP loss and a $0.25 GAAP loss per share. That miss, combined with weaker-than-expected revenue, triggered a selloff.

The lack of revenue growth, margin pressure, and ongoing losses further dampened investor sentiment. While the company highlighted improvements in product development and consumable demand, those positives were overshadowed by financial underperformance.

3D Systems expects revenue between $420 million and $435 million for 2025, excluding Geomagic. The company projects a non-GAAP gross margin between 37% and 39%. Operating expenses are forecasted between $200 million and $220 million. Break-even or better adjusted EBITDA is expected by year-end.

With global demand still uncertain, the company is focused on internal improvements. Efficiency gains, cost reductions, and targeted investments in high-growth markets like dental, digital spare parts, and regenerative medicine remain central to its long-term strategy.