UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the month of November 2024
Commission File Number 001-35751
STRATASYS LTD.
(Translation of registrant’s name into English)
| | | | | | | | |
c/o Stratasys, Inc.
7665 Commerce Way
Eden Prairie, Minnesota 55344 | | 1 Holtzman Street, Science Park
P.O. Box 2496
Rehovot, Israel 76124 |
| | | |
| (Addresses of principal executive offices) |
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form 40-F ☐
CONTENTS
Quarterly Results of Operations
On November 13, 2024, Stratasys Ltd. (“Stratasys”, “we” or “us”) announced our financial results for the third quarter and nine months ended September 30, 2024. A copy of our press release announcing our results is furnished as Exhibit 99.1 to this Report of Foreign Private Issuer on Form 6-K (this “Form 6-K”) and is incorporated herein by reference.
In conjunction with the conference call being held on November 13, 2024 to discuss our results, we are furnishing a copy of the slide presentation that provides supplemental information regarding our business and our financial results, and which will be referenced on that conference call. We have attached that presentation to this Form 6-K as Exhibit 99.2, which exhibit is incorporated herein by reference.
The information in this Form 6-K, including Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Exhibits
The following exhibits are furnished as part of this Form 6-K:
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| Exhibit | | Description |
| | | |
| 99.1 | | |
| | | |
| 99.2 | | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | | | | | | | |
| | STRATASYS LTD. |
| | |
Dated: November 13, 2024 | By: | /s/ Eitan Zamir |
| | Name: | Eitan Zamir |
| | Title: | Chief Financial Officer |
Stratasys Releases Third Quarter 2024 Financial Results
Raises 2024 Margins and Profitability Outlook
•Revenue of $140.0 million, compared to $162.1 million in third quarter 2023
•Eighth consecutive quarter of year-over-year growth in recurring consumables revenue reflects continued strong printer utilization
•Improved GAAP gross margin by 430bps to 44.8% and non-GAAP gross margin by 130bps to 49.6% compared to third quarter 2023
•GAAP net loss of $26.6 million, or $0.37 per diluted share; non-GAAP net income resumes achieving profitability with $0.4 million, or $0.01 per diluted share
•$4.5 million of cash used in operations; year-to-date operating cash flow remains positive
•Adjusted EBITDA of $5.1 million
•Restructuring cost savings being delivered ahead of plan
•Raises outlook for full-year 2024 margins and profitability metrics.
MINNEAPOLIS & REHOVOT, Israel - (BUSINESS WIRE) - November 13, 2024 - Stratasys Ltd (Nasdaq: SSYS) (“Stratasys” or the “Company”), a leader in polymer 3D printing solutions, today announced financial results for the third quarter of 2024.
Third Quarter 2024 Financial Results Compared to Third Quarter 2023:
•Revenue of $140.0 million, compared to $162.1 million, reflects ongoing impacts from current macroeconomic environment on customer capital equipment spending.
•GAAP gross margin of 44.8%, compared to 40.5% and non-GAAP gross margin of 49.6%, compared to 48.3%.
•GAAP operating loss of $25.5 million, compared to an operating loss of $42.8 million.
•Non-GAAP operating loss of $0.1 million, compared to non-GAAP operating income of $4.1 million.
•GAAP net loss of $26.6 million, or $0.37 per diluted share, compared to a net loss of $47.3 million, or $0.68 per diluted share.
•Non-GAAP net income of $0.4 million, or $0.01 per diluted share, compared to non-GAAP net income of $2.4 million, or $0.04 per diluted share.
•Adjusted EBITDA of $5.1 million, compared to $9.8 million.
•Cash used in operating activities of $4.5 million, compared to $12.7 million.
Dr. Yoav Zeif, Stratasys’ Chief Executive Officer, stated, "Our decisive actions to realign our business with current market realities are starting to yield results. We have successfully begun to transform the company through cost optimization and by focusing on higher-growth opportunities. Our flagship F3300 platform is gaining significant traction in the marketplace, while our expansion into our key target industries of Aerospace, Automotive and Healthcare continues to expand. Most importantly, we returned to non-GAAP profitability in the third quarter, overcoming ongoing revenue pressures, further demonstrating the effective execution of our business plan by our entire team.”
Dr. Zeif continued, “The fundamental strength of our business is evident in our improved margins and continued robust balance sheet. Our recurring revenue from Consumables continues to grow, particularly in FDM technology utilization for manufacturing purposes, partially offsetting hardware sales that remain impacted by macro conditions. This validates both our recurring revenue model and our customers' accelerating shift from prototyping to manufacturing applications. With our restructuring plan ahead of schedule and on track to deliver $40 million in annual cost savings starting in the first quarter of next year, we are well-positioned to deliver increased revenue growth, profitability and cash flow in 2025, to address the pent-up demand once market conditions improve."
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 maintaining its revenue outlook and raising its margins and profitability outlook for 2024 as follows:
•Revenue of $570 million to $580 million.
•Non-GAAP gross margins between 49.0% to 49.2%.
•Operating expenses in the range of $276 million to $278 million.
•Non-GAAP operating margins to range between 0.6% to 1.3%.
•GAAP net loss of $105 million to $90 million, or ($1.48) to ($1.27) per diluted share.
◦Includes one-time extraordinary costs associated with Stratasys’ strategic alternatives process.
•Non-GAAP net income of $2.1 to $5.0 million, or $0.03 to $0.07.
•Adjusted EBITDA of $25 million to $28 million.
•Capital expenditures of $15 million to $20 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. Third Quarter 2024 Webcast and Conference Call Details
The Company plans to webcast its conference call to discuss its third quarter 2024 financial results on Wednesday, November 13, 2024, at 8:30 a.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=xEC56y1o
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 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 September 30, 2024, which will be furnished to the SEC on or about November 13, 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.
Yonah Lloyd
CCO & VP Investor Relations
Yonah.Lloyd@stratasys.com
Source: Stratasys Ltd.
| | | | | | | | | | | | | | |
| Consolidated Balance Sheets | | | | |
| (in thousands, except share data) | | | | |
| | September 30, 2024 | | December 31, 2023 |
| ASSETS | | | | |
| Current assets | | | | |
| Cash and cash equivalents | | $ | 63,956 | | | $ | 82,585 | |
| Short-term bank deposits | | 80,000 | | | 80,000 | |
| Accounts receivable, net of allowance for credit losses of $2,599 and $1,449 as of September 30, 2024 and December 31, 2023, respectively | | 153,653 | | | 172,009 | |
| Inventories | | 195,188 | | | 192,976 | |
| Prepaid expenses | | 8,522 | | | 7,929 | |
| Other current assets | | 18,025 | | | 24,596 | |
| | | | |
| Total current assets | | 519,344 | | | 560,095 | |
| Non-current assets | | | | |
| Property, plant and equipment, net | | 183,969 | | | 197,552 | |
| Goodwill | | 100,086 | | | 100,051 | |
| Other intangible assets, net | | 111,883 | | | 127,781 | |
| Operating lease right-of-use assets | | 32,591 | | | 18,895 | |
| Long-term investments | | 120,070 | | | 115,083 | |
| Other non-current assets | | 14,734 | | | 14,448 | |
| | | | |
| Total non-current assets | | 563,333 | | | 573,810 | |
| | | | |
| Total assets | | $ | 1,082,677 | | | $ | 1,133,905 | |
| | | | |
| LIABILITIES AND EQUITY | | | | |
| Current liabilities | | | | |
| Accounts payable | | $ | 48,157 | | | $ | 46,785 | |
| Accrued expenses and other current liabilities | | 35,328 | | | 36,656 | |
| Accrued compensation and related benefits | | 29,428 | | | 33,877 | |
| Deferred revenues - short-term | | 49,788 | | | 52,610 | |
| Operating lease liabilities - short-term | | 6,714 | | | 6,498 | |
| | | | |
| Total current liabilities | | 169,415 | | | 176,426 | |
| Non-current liabilities | | | | |
| Deferred revenues - long-term | | 19,109 | | | 23,655 | |
| Deferred income taxes - long-term | | 574 | | | 723 | |
| Operating lease liabilities - long-term | | 25,420 | | | 12,162 | |
| Contingent consideration - long-term | | 12,410 | | | 11,900 | |
| Other non-current liabilities | | 23,971 | | | 24,200 | |
| | | | |
| Total non-current liabilities | | 81,484 | | | 72,640 | |
| | | | |
| Total liabilities | | $ | 250,899 | | | $ | 249,066 | |
| | | | |
| Contingencies (see note 12) | | | | |
| | | | |
| Equity | | | | |
| Ordinary shares, NIS 0.01 nominal value, authorized 180,000 shares; 71,385 shares and 69,656 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively | | $ | 200 | | | $ | 195 | |
| Additional paid-in capital | | 3,117,626 | | | 3,091,649 | |
| Accumulated other comprehensive loss | | (7,782) | | | (7,079) | |
| Accumulated deficit | | (2,278,266) | | | (2,199,926) | |
| Total equity | | 831,778 | | | 884,839 | |
| | | | |
| Total liabilities and equity | | $ | 1,082,677 | | | $ | 1,133,905 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Consolidated Statements of Operations and Comprehensive Loss | | | | | | | | |
| (in thousands, except per share data) | | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2024 | | 2023 | | 2024 | | 2023 |
| | unaudited | | unaudited | | unaudited | | unaudited |
| | | | | | | | |
| Revenues | | | | | | | | |
| Products | | $ | 94,092 | | | $ | 113,270 | | | $ | 286,882 | | | $ | 323,353 | |
| Services | | 45,916 | | | 48,863 | | | 135,217 | | | 147,908 | |
| | 140,008 | | | 162,133 | | | 422,099 | | | 471,261 | |
| Cost of revenues | | | | | | | | |
| Products | | 47,707 | | | 59,546 | | | 144,220 | | | 168,235 | |
| Services | | 29,571 | | | 36,938 | | | 90,752 | | | 105,760 | |
| | 77,278 | | | 96,484 | | | 234,972 | | | 273,995 | |
| | | | | | | | |
| Gross profit | | 62,730 | | | 65,649 | | | 187,127 | | | 197,266 | |
| | | | | | | | |
| Operating expenses | | | | | | | | |
| Research and development, net | | 24,700 | | | 23,567 | | | 74,357 | | | 69,347 | |
| Selling, general and administrative | | 63,495 | | | 84,880 | | | 188,731 | | | 221,173 | |
| | 88,195 | | | 108,447 | | | 263,088 | | | 290,520 | |
| | | | | | | | |
| Operating loss | | (25,465) | | | (42,798) | | | (75,961) | | | (93,254) | |
| | | | | | | | |
Financial income, net | | 1,009 | | | 687 | | | 1,500 | | | 2,147 | |
| | | | | | | | |
| Loss before income taxes | | (24,456) | | | (42,111) | | | (74,461) | | | (91,107) | |
| | | | | | | | |
Income tax expenses | | 842 | | | 645 | | | 2,320 | | | 5,145 | |
| | | | | | | | |
Share in losses of associated companies | | 1,316 | | | 4,523 | | | 1,559 | | | 11,866 | |
| | | | | | | | |
| Net loss | | $ | (26,614) | | | $ | (47,279) | | | $ | (78,340) | | | $ | (108,118) | |
| | | | | | | | |
| Net loss per share - basic and diluted | | | | | | | | |
Basic | | $ | (0.37) | | | $ | (0.68) | | | $ | (1.11) | | | $ | (1.58) | |
Diluted | | $ | (0.37) | | | $ | (0.68) | | | $ | (1.11) | | | $ | (1.58) | |
| | | | | | | | |
Weighted average ordinary shares outstanding | | | | | | | | |
Basic | | 71,271 | | | 69,093 | | | 70,670 | | | 68,432 | |
Diluted | | 71,271 | | | 69,093 | | | 70,670 | | | 68,432 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 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) | $ | 62,730 | | $ | 6,768 | | $ | 69,498 | | $ | 65,649 | | $ | 12,617 | | $ | 78,266 | |
| Operating income (loss) (1,2) | (25,465) | | 25,351 | | (114) | | (42,798) | | 46,885 | | 4,087 | |
| Net income (loss) (1,2,3) | (26,614) | | 26,985 | | 371 | | (47,279) | | 49,725 | | 2,446 | |
| Net income (loss) per diluted share to Stratasys Ltd. (4) | $ | (0.37) | | $ | 0.38 | | $ | 0.01 | | $ | (0.68) | | $ | 0.72 | | $ | 0.04 | |
| | | | | | | |
| (1) | Acquired intangible assets amortization expense | | 4,507 | | | | 5,142 | | |
| Non-cash stock-based compensation expense | | 912 | | | | 891 | | |
| Restructuring and other related costs | | 1,349 | | | | 6,584 | | |
| | | 6,768 | | | | 12,617 | | |
| | | | | | | |
| (2) | Acquired intangible assets amortization expense | | 1,124 | | | | 2,599 | | |
| Non-cash stock-based compensation expense | | 5,657 | | | | 6,588 | | |
| Restructuring and other related costs | | 7,585 | | | | 2,360 | | |
| Revaluation of investments | | — | | | | 4,300 | | |
| Contingent consideration | | 519 | | | | 265 | | |
| Legal and other expenses | | 3,698 | | | | 18,156 | | |
| | | 18,583 | | | | 34,268 | | |
| | | 25,351 | | | | 46,885 | | |
| | | | | | | |
| (3) | Corresponding tax effect and other expenses | | 294 | | | | 153 | | |
| Equity method related expenses | | 981 | | | | 2,525 | | |
| Finance expenses | | 359 | | | | 162 | | |
| | | $ | 26,985 | | | | $ | 49,725 | | |
| | | | | | | |
| (4) | Weighted average number of ordinary
shares outstanding- Diluted | 71,271 | | | 71,417 | | 69,093 | | | 69,815 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | Nine months ended September 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) | $ | 187,127 | | $ | 20,082 | | $ | 207,209 | | $ | 197,266 | | $ | 29,199 | | $ | 226,465 | |
| Operating income (loss) (1,2) | (75,961) | | 71,450 | | (4,511) | | (93,254) | | 103,866 | | 10,612 | |
| Net income (loss) attributable to
Stratasys Ltd. (1,2,3) | (78,340) | | 74,058 | | (4,282) | | (108,118) | | 114,179 | | 6,061 | |
| Net income (loss) per diluted share attributable
to Stratasys Ltd. (4) | $ | (1.11) | | $ | 1.05 | | $ | (0.06) | | $ | (1.58) | | $ | 1.67 | | $ | 0.09 | |
| | | | | | | |
| (1) | Acquired intangible assets amortization expense | | 14,080 | | | | 14,157 | | |
| Non-cash stock-based compensation expense | | 2,874 | | | | 2,822 | | |
| Restructuring and other related costs | | 3,128 | | | | 12,220 | | |
| | | 20,082 | | | | 29,199 | | |
| | | | | | | |
| (2) | Acquired intangible assets amortization expense | | 4,694 | | | | 7,479 | | |
| Non-cash stock-based compensation expense | | 19,689 | | | | 20,920 | | |
| Restructuring and other related costs | | 12,144 | | | | 6,626 | | |
| Revaluation of investments | | 1,900 | | | | 4,880 | | |
| Contingent consideration | | 1,553 | | | | 877 | | |
| Legal and other expenses | | 11,388 | | | | 33,885 | | |
| | | 51,368 | | | | 74,667 | | |
| | | 71,450 | | | | 103,866 | | |
| | | | | | | |
| (3) | Corresponding tax effect and other expenses | | 732 | | | | 3,404 | | |
| Equity method related expenses | | 352 | | | | 1,827 | | |
| Finance expenses | | 1,524 | | | | 5,081 | | |
| | | $ | 74,058 | | | | $ | 114,179 | | |
| | | | | | | |
| (4) | Weighted average number of ordinary shares outstanding- Diluted | 70,670 | | | 70,670 | | 68,432 | | | 69,046 | |
| | | | | | | | |
| Reconciliation of GAAP to Non-GAAP Forward Looking Guidance | | |
| Fiscal Year 2024 | | |
| (in millions, except per share data) | | |
| | |
| | |
| GAAP net loss | | ($105) to ($90) |
| | |
| 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 | | $2.1 to $5.0 |
| | |
| GAAP loss per share | | ($1.48) to ($1.27) |
| | |
| Non-GAAP diluted earnings per share | | $0.03 to $0.07 |
Make additive work for you Q3 2024 Results Speakers Dr. Yoav Zeif, CEO Eitan Zamir, CFO Yonah Lloyd, CCO & VP IR November 13, 2024
Conference Call and Webcast Details US Toll-Free Dial-In 1-877-407-0619 International Dial-In +1-412-902-1012 Live Webcast and Replay https://event.choruscall.com/mediaframe/ webcast.html?webcastid=xEC56y1o Make additive work for you
Forward-Looking Statements Cautionary Statement Regarding Forward- Looking Statements The statements in this slide presentation regarding Stratasys' strategy, and the statements regarding its projected future financial performance, including the financial guidance concerning its expected results for 2024, 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 extent of growth of the 3D printing market generally; global macro-economic trends that have been adversely affecting, and may continue to adversely affect, our results, including relatively high interest rates that reduce capital expenditures; 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; the degree of our success in implementing our board’s strategic restructuring plan for our company; potential further charges against earnings that we could be required to take due to impairment of additional goodwill or other intangible assets that we have recently acquired or may acquire in the future; the extent of our success at successfully integrating into our existing business, or making additional, acquisitions or investments in new businesses, technologies, products or services; potential adverse impact that recent global interruptions involving freight carriers and other third parties may have on our supply chain and distribution network; potential changes in our management and board of directors; global market, political and economic conditions, in the countries in which we operate in particular (including risks stemming from Russia’s invasion of Ukraine); the degree of impact of Israel’s war against the terrorist organizations Hamas and Hezbollah, given our Israeli headquarters, factories and significant operations; 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; potential cyber attacks against, or other breaches to, our information technologies systems; 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, filed with the 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 will attach Stratasys’ unaudited, condensed consolidated financial statements and its review of its results of operations and financial condition for the quarter and nine months ended September 30, 2024, which Stratasys will furnish to the SEC on or about November 13, 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 slide presentation are made 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. Make additive work for you
Use of Non-GAAP Financial Information 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, legal provisions, and (ii) excluding non- cash items such as stock-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. The items eliminated via 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 comparable view of our performance to 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 later in this slide presentation. Make additive work for you
CEO Dr. Yoav Zeif Agile, strong and well-positioned after transformative cost-cuts and enhanced focus on growth opportunities F3300 has generated excitement from the market and is expected to help us expand our presence in manufacturing TrueDent solution is proven and highly regarded for its groundbreaking disruption in dentures Return to profitability demonstrates seamless execution of a comprehensive undertaking, an attribute that sets Stratasys apart Eighth straight quarter of recurring consumables revenue growth underscores stability of our recurring revenue model, and our customers' accelerating transition from prototyping to manufacturing Targeting emerging megatrends - supply chain, onshoring, new mobility, sustainability, and greater efficiency Make additive work for you
Make additive work for you F3300 Update Continue to drive demand for our new, flagship F3300 industrial platform Showcased at the International Manufacturing Technology Show in Chicago in September Designed for superior performance, the F3300 delivers high-quality, durable thermoplastic parts with unmatched accuracy Delivers faster print speeds with industry-leading repeatability, and significantly reduces downtime, making it the premier offering in its class Generate interest and orders and already shipping systems to key leading companies across automotive, aerospace and defense industries, along with commercial and industrial manufacturers
Make additive work for you $50M share repurchase execution to help maximize shareholder value has started, while maintaining a strong balance sheet and taking steps to monetize certain high value assets. Origin 2 launched along with the Origin Cure post- processing system, focused on injection- molding quality for short production runs. A great end-market example is connectors - customers such as TE Connectivity that serve Aero, Auto and other sectors. Neo Build Processor launched for Investment Casting to accelerate production of high-quality master patterns with faster file processing and print speeds, streamlining the 3DP workflow for manufacturers and service bureaus in Aerospace and other industries. Q3 Updates
Make additive work for you Restructuring Update Strategic initiatives recently implemented designed to reinforce our industry leadership and ensure sustainable profitability across market cycles Action plan to realign operational costs with current market dynamics through a workforce reduction of 15%, while intensifying our focus on accelerating customer adoption by eliminating implementation barriers Plan is ahead of pace, seeing impact already in Q3 and on track to achieve our target of $40 million in annual cost savings, starting in Q1 2025 Enhancing go-to-market strategy to focus on the highest growth products, materials and software solutions to build a long-term profitable, cash-generating business ready to respond quickly when customer spending returns
CFO Eitan Zamir Resilience of our operating model – a key differentiator relative to peers in our sector Fast actions of our team, as we delivered improved gross margins and bottom-line profit despite year-over-year pressure on revenues Another quarter of YoY growth in consumables sales and faster than anticipated progress on our cost control initiatives, enabling us to increase our profitability expectations for the year 2024 Outlook – Raising margins and profits for the full year Make additive work for you
Financial Results Make additive work for you Note: $ in millions unless noted otherwise. All numbers and percentages rounded Q3-23 Q3-24 Change Y/Y Q3-23 Q3-24 Change Y/Y Total Revenue 162.1 140.0 -13.6% 162.1 140.0 -13.6% Gross Profit 65.6 62.7 (2.9) 78.3 69.5 (8.8) % Margin 40.5% 44.8% 4.3% 48.3% 49.6% 1.3% Operating Income (Loss) (42.8) (25.5) 17.3 4.1 -0.1 (4.2) % Margin -26.4% -18.2% 8.2% 2.5% -0.1% -2.6% Net Income (Loss) (47.3) (26.6) 20.7 2.4 0.4 (2.0) % Margin -29.2% -19.0% 10.2% 1.5% 0.3% -1.2% Diluted EPS (0.68) (0.37) 0.31 0.04 0.01 (0.03) Diluted Shares 69.1 71.3 3.2% 69.8 71.4 2.3% GAAP Non-GAAP
Revenues – Q3’24 * Adjusted for divestments Quarterly Trend 113.2 110.4 99.2 93.6 94.1 48.9 45.9 44.9 44.4 45.9 162.1 156.3 144.1 138.0 140.0 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Product Service Revenues – Consumables Recurring Revenue Growth Continues Note: $ in millions unless noted otherwise. All numbers and percentages rounded. Make additive work for you Revenue Y/Y Y/Y Adjusted* Product - $94.1M -16.9% -16.9% Systems - $31.7M -38.4% -38.4% Consumables - $62.4M 1.0% 1.0% Services - $45.9M -6.1% -0.6% Customer Support - $31.0M 1.3% 1.3%
GAAP Non-GAAP 47.4% 47.2% 49.8% 50.0% 49.3% 24.4% 38.4% 32.2% 30.7% 35.6% 40.5% 44.6% 44.4% 43.8% 44.8% Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 48.3% 48.8% 48.6% 49.0% 49.6% 52.5% 52.6% 55.5% 55.6% 55.1% 38.4% 39.8% 33.4% 35.2% 38.5% Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Service Gross MarginProduct Gross Margin Total Gross Margin Gross Margins – Non-GAAP Highest Since Q4 2019 Make additive work for you All percentages rounded. . . . . . . . . . . . . . . . - - - - - 47.4% 47.2% 49.8% 50.0% 49.3% 24.4% 38.4% 32.2% 30.7% 35.6% 40.5% 44.6% 44.4% 43.8% 44.8% Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 7
GAAP operating expenses (absolute and as a percentage of revenues) Non-GAAP operating expenses (absolute and as a percentage of revenues) 108.4 88.2 63.0% Q3'23 Q3'24 74.2 69.6 Q3'23 Q3'24 49.7% 66.9% 45.8% Make additive work for you Note: $ in millions unless noted otherwise. All numbers and percentages rounded. Operating Expenses – Improvement Reflects Benefit of Restructuring
(47.3) )26.6( (42.8) (25.5) Non-GAAP operating income (loss) (2.5% in Q3’23 vs (0.1)% in Q3’24 out of total revenue)GAAP operating loss Non-GAAP net income GAAP net loss Note: $ in millions unless noted otherwise. All numbers and percentages rounded. Q3’23 Q3’24 5.19.8 0.4 Non-GAAP EBITDA (6% in Q3’23 vs 3.6% in Q3’24 out of total revenue) 4.1 (0.1) 2.4 Q3’23 Q3’24 Q3’23 Q3’24 Q3’23 Q3’24 Q3’23 Q3’24 Make additive work for you Earnings – Return to Adjusted Profitability
Balance sheet items Cash flow from operating activities 15 (12.7) (4.5) Q3'23 Q3'24 (75.4) (62.3) Make additive work for you Balance Sheet and Operating Cash Flow Note: $ in millions unless noted otherwise. All numbers and percentages rounded. Q1-24 Q2-24 Q3-24 Cash and Cash Equivalents and Short- term deposits 161.1 150.9 144.0 Accounts Receivable 155.3 150.5 153.7 Inventories 195.1 196.5 195.2 Net Working Capital 373.9 359.3 349.9
Revenue Gross Margins Non-GAAP Operating Expenses Non-GAAP Operating Margins EPS-diluted-adjusted ($1.48)-($1.27) GAAP EPS diluted CAPEXEBITDA-adjusted $570M – $580M 49.0% – 49.2% $276M – $278M $15M – $20M$25M – $28M Make additive work for you 2024 Outlook – Raising Margins and Profit Forecast $0.03 – $0.070.6% – 1.3%
CEO Dr. Yoav Zeif Summary Effective implementation of key initiatives to transform the company has streamlined the operations, improved margins, and tightened our focus to the most compelling use-cases Enabling our customers to more easily ramp their adoption of additive manufacturing with more intimate go-to-market engagements and better education for their system users Laser-focused on delivering enhanced profitability while preserving our strong balance sheet. With our market- leading systems, software and consumables we are poised to outperform when capital spending returns Repositioned the company to extend our leadership, setting the stage for a return to outsized growth, expanded profitability, and value creation for our shareholders Make additive work for you
Make additive work for you THANK YOU
Note: $ in thousands unless noted otherwise. All numbers and percentages rounded. GAAP Q3-24 Non-GAAP GAAP Adjustments Non-GAAP Gross Profit (1) $62,730 6,768 $69,498 $65,649 12,617 $78,266 Operating income (Loss) (1,2) (25,465) 25,351 (114) (42,798) 46,885 4,087 Net income (Loss) (1,2,3) (26,614) 26,985 371 (47,279) 49,725 2,446 Net income (Loss) per diluted share (4) (0.37) $0.38 0.01 (0.68) $0.72 0.04 1) Acquired intangible assets amortization expense 4,507 5,142 Non-cash stock-based compensation expense 912 891 Restructuring and other related costs 1,349 6,584 6,768 12,617 2) Acquired intangible assets amortization expense 1,124 2,599 Non-cash stock-based compensation expense 5,657 6,588 Restructuring and other related costs 7,585 2,360 Revaluation of investments - 4,300 Contingent consideration 519 265 Legal and other expenses 3,698 18,156 18,583 34,268 25,351 46,885 3) Corresponding tax effect 294 153 Equity method related expenses 981 2,525 Finance expenses 359 162 $26,985 $49,725 4) Weighted average number or ordinary shares outstanding – Diluted 71,271 71,417 69,093 69,815 Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 Appendix
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