Leading 3D printer OEM 3D Systems has reported its financial earnings for the third quarter of 2019. Total revenue for Q3 2019 was reported at $155.3 million, compared to $164.5 million for the same period in the previous year. In the quarter, the company made an operating loss of $11.9 million, equating to $0.15 per share, this is compared to an operating loss of $11 million in Q3 2018, which equated to $0.10 per share.
Leading revenue for Q3 2019 was 3D Systems Healthcare and Materials sales. In this period, 3D printer revenue decreased 17.2 percent compared to Q3 2018, which has been attributed to “timing of large enterprise customer orders and the softer macro industrial environment.”
Addressing investors and analysts on the Q3 2019 results call, 3D Systems President and CEO Vyomesh “VJ” Joshi, said, “For the remainder of this year, we remain focused on profitability and cash generation. We are structuring the company to be lean and profitable.
“We enhanced our focus on cost structure in 2019 and have reduced non-GAAP operating expenses by 8% in the first nine months. And we will continue taking cost out in the fourth quarter to rightsize the company in this uncertain environment.
“Looking ahead, we believe our focus on innovative production workflows, including hardware platforms, materials, software and professional services will drive profitable revenue growth in 2020.”
“Modest growth” in Materials and Healthcare drive Q3 2019 revenue
3D Systems typically reports its revenue in two segments: Products and Services. In addition, the company has provided further insight into revenue generated by each of its product or service offerings, namely Printer sales, Materials, Healthcare, On Demand and Software.
3D Systems Products revenue for Q3 2019 was reported at $94.9 million, compared to $99.9 million in this segment in Q3 2019. Services revenue for Q3 2019 was reported at $60.8 million, compared to $64.5 million in Q3 2018.
Overall, between each of these segments, Healthcare reported the highest revenue of all products and services in Q3 2019. For the period ended September 30, 2019 3D Systems Healthcare business reported a revenue of $56.4 million, an increase of 6.3 percent compared to the same period in 2018 which yielded revenue of $53.1 million. On the investor call Todd Booth, EVP & CFO 3D Systems added, “We continue to be pleased with the overall demand trends for our Virtual Surgical Planning, medical simulators and advanced manufacturing.”
The second largest contributing to overall revenue in Q3 2019 was 3D Systems Materials line, reporting $41.4 million compared to $40.3 million in Q3 2018. Commenting on the performance of this offering, VJ told investors, “As expected, we have returned to growth in materials, and we are working closely with our customers to find the right production workflows.” Since the last earnings call in August 2019 VJ highlighted that the company has released eight new materials for the Figure 4 platform including BLK 10 and HI TEMP 300. Answering a question from analysts concerning the sustainability of Materials growth in Q3 2019, VJ added “I do believe, fundamentally, that we are on a path now for materials growth onwards. The important part of the materials growth is the — as I said, to really have those right production workflows. Our enterprise customer is doing really well.” In the coming months, the President and CEO also said that 3D Systems plans to significantly scale the Figure 4, relying on the new material releases.
“Despite continued headwinds in the industry,” said VJ, “we achieved modest growth in Materials and Healthcare this quarter, driven by customer demand for our core and new product solutions.”
Printer sales and On Demand revenue
In Q3 2019 Printer sales reported a revenue of $30.4 million, decreasing 17.2 percent compared to the same period in 2018 which reported Printer revenue of $36.8 million. On Demand revenue in Q3 2019 was reported at $23.1 million, decreasing 12% on revenue from the same period in 2018. Software reported a revenue of $24.6 million, a 0.1 percent increase on the same period in 2018 which was reported at $24.6 million.
Minus the cost of sales ($58 million for Products and $29.9 million for Services in Q3 2019) 3D Systems reported a gross profit of $67.2 million in Q3 2019, compared to a gross profit of $77.8 million in Q3 2018. The Net Loss for Q3 2019 was reported at -$16.8 million, compared to a net loss of -$11.5 million in Q3 2018. The company ends the period with $128.5 million in cash, cash equivalents and restricted cash.
3D Systems full financial earnings for Q3 2019 can be viewed online.
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Featured image shows Vyomesh Joshi onstage during IMTS 2016, putting the customer at the center of strategy. Photo by Michael Petch