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Stratasys Q2 2023 revenues decrease by 4% YoY due to MakerBot divestiture

Many other indicators show the company continues to perform well and expects to reach $1 billion in yearly revenues by 2026

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While it figures out its future, with ongoing merger discussions, Stratasys reported it closed Q2 2023 with revenues decreasing by 4.2% compared to Q2 2022, at $159.8 million compared to $166.6 million. While the YoY revenue result is lower for the quarter, the company also pointed out that this is entirely related to the one-time MakerBot divestiture and that it has performed well on several other fronts, proving that it is doing fairly well (as far as pure player 3D printing companies go).

These other indicators include the eighth straight quarter of adjusted profitability within a Q2 2023 result that is 1.6% higher than the second quarter of 2022, if excluding MakerBot (2.0% higher at constant currency). The company also recorded the highest-ever recurring revenue in Consumables and Customer Service. Furthermore, adjusted EBITDA grew 43% to $10.6 million year-over-year.

The company also reported a GAAP gross margin of 41.5%, compared to 40.5%, non-GAAP gross margin of 48.5%, compared to 47.6% and a GAAP operating loss of $33.7 million, which includes one-time extraordinary costs related to prospective and potential mergers and acquisitions, defense against the hostile tender offer, proxy contest and related professional fees. This is compared to an operating loss of $23.5 million.

 

Stratasys closes Q2 2023 with revenues decreasing by 4% vs. Q2 2022, while other indicators show the company continues to perform well Additive manufacturing is on the edge of tremendous growth as customers accelerate the use of our technologies at production scale. Together with our fortress balance sheet and resilient business model, we are well-positioned to drive profitable growth as we continue to create shareholder value.Yoav Zeif, Stratasys’ Chief Executive Officer.

Dr. Yoav Zeif, Stratasys’ Chief Executive Officer stated, “Leveraging our position in polymer additive manufacturing, resilient business model and strong financial profile, Stratasys once again delivered solid operating and financial results despite persistent macroeconomic headwinds. For the second consecutive quarter we delivered record revenues from both consumables and customer service, demonstrating the growth in utilization of our systems even as customer capital budgets remain constrained. Our relentless focus on execution continued to drive meaningful improvements in adjusted gross margins both sequentially and year over year, as we delivered our eighth consecutive quarter of positive adjusted earnings per share.”

Dr. Zeif continued, “I would like to thank our employees who have continued to maintain their focus, furthering the execution of our strategy with excellence and helping to make Stratasys the healthiest and strongest-growing business in our industry. Despite the various M&A scenarios emerging in the industry, customers across all of our technologies remain highly engaged and confident in Stratasys as we continue to look for ways to expand our innovation and suite of offerings. The addition of Covestro’s Additive Manufacturing business has yielded immediate results, and our expected combination with Desktop Metal will create comprehensive offerings across the industrial landscape. Additive manufacturing is on the edge of tremendous growth as customers accelerate the use of our technologies at production scale. Together with our fortress balance sheet and resilient business model, we are well-positioned to drive profitable growth as we continue to create shareholder value.”

Based on current market conditions and assuming that the impacts of global inflationary pressures, interest rate hikes and supply chain costs do not impede economic activity further, the Company is reiterating its revenue guidance and the remainder of its outlook for 2023, other than GAAP earnings, with full-year revenue expected to be between $630 million to $670 million and sequential quarterly revenue growth, notably higher in the second half. This will come with a non-GAAP net income of $9 million to $17 million, or $0.12 to $0.24 per diluted share.

In addition, the Company is reiterating its forecast for key annual financial metrics: 2024 gross margin above 50% and positive free cash flow. Stratasys also goes on to state that it expects 2026 revenues to grow organically to greater than $1 billion, with an adjusted EBITDA margin of 15% or greater.

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