3D Systems reports 20 percent sequential quarterly revenue growth during Q3 2020 

3D printer manufacturer 3D Systems has reported sequential quarterly growth of 20.6 percent in its Q3 2020 financial results. 

During Q3 2020, the firm generated $135.1 million in revenue, 13 percent less than the $155.3 million it reported in Q3 2019, but a significant quarterly recovery when compared to the 28 percent decline seen over Q2 2020.  

The company also made progress with the “strategic refocus” it announced in Q2, which has seen it concentrate on its Healthcare and Industrial verticals, and make efficiency savings of $60 million. Since the results were published, 3D Systems’ shares have increased 10 percent from $5.91 to $6.54, showing that investors are satisfied with the firm’s cost-cutting plan. 

“While the challenges of the pandemic persist, we were pleased to deliver strong sequential quarterly growth in both our Healthcare and Industrial businesses,” said Dr. Jeffrey Graves, CEO of 3D Systems. “We are pleased with our progress in the quarter, and believe we will exit the year as a much more efficient, highly-focused additive manufacturing company.”

3D Systems reported a 20 percent growth in revenue between Q2 and Q3 2020, with its dental business the stand-out performer. Photo via 3D Systems.
3D Systems reported a 20 percent growth in revenue between Q2 and Q3 2020, with its dental business the stand-out performer. Photo via 3D Systems.

3D Systems’ Q3 2020 revenue results 

3D Systems broadly reports its revenue across two divisions: Products and Services. Products accounts for revenue generated by 3D printers, software, and material sales, while Services includes any revenue earned from the company’s healthcare solutions and on-demand manufacturing capabilities. 

In Q3 2020, the company’s Product business generated $77.2 million in revenue, which constitutes an 18 percent decline on the $94.5 million reported in Q3 2019. If compared on a sequential quarterly basis though, this figure is $15.8 million more than 3D Systems reported in Q2 2020, and the 18 percent fall is still an improvement on the 34 percent drop seen during Q2. 

3D Systems reported a “rebound in customer activity” in Q3 2020 as companies began to reopen from the global shutdown. As a result, the company’ Healthcare revenue increased from $56.2 million in Q3 2019 to $59.8 million in Q3 2020, with its dental products in particular, experiencing a surge in demand.

Revenues ($) Q3 2019 Q3 2020 Variance (%) 9M 2020  9M 2020  Variance (%)
Products  94.5m 77.2m -18 280.6m 217.5m -22.4
Services 60.7m 57.8m -4.7 183.9m 164.3m -10
Total Revenue 155.3m 135.1m -13 464.5m 381.8m -17.8


The company’s Services segment reported a narrower 4.7 percent revenue decline in Q3 2020, falling to $57.8 million from the $60.7 million generated in Q3 2019. Again, this figure represents a $7.3 million recovery on a quarterly basis, and an increase on the 20 percent revenue decline reported during Q2 2020. 

Although 3D Systems has reduced its R&D spending since December 31st 2020 from $20.9 million to $18.8 million, the firm’s net operating expenses over the period increased from $79.2 million to $126.2 million. This rise can largely be attributed to $48.3 million worth of goodwill that the company wrote-off over Q3 2020, due to an impairment test triggered by the impact of the pandemic. 

The goodwill impairment was reported on the firm’s balance sheet, but it doesn’t affect its cash position, and excluding the write-off 3D Systems actually decreased its operating costs by 15.2 percent from Q3 2019 to Q3 2020. 

3D Systems has sold two of its software subsidiaries as part of a restructuring plan, through which it aims to reduce costs by $100 million by the end of 2021. Photo via 3D Systems.
3D Systems has sold two of its software subsidiaries as part of a restructuring plan, through which it aims to reduce costs by $100 million by the end of 2021. Photo via 3D Systems.

The “strategic refocus” in action during Q3 2020

After a turbulent Q2 2020, in which 3D Systems reported a revenue decline of 28 percent, its new CEO Jeffrey Graves opted to restructure the business to focus on its core Healthcare and Industrial verticals. The company set an initial target of reducing costs by $100 million by 2022, and it’s already on course to reach the $60 million mark by the end of this year. 

3D Systems started by reducing its workforce by 20 percent in Q2 2020, and accelerated its plans to have colleagues work remotely, by closing those of its facilities that saw the biggest drops in demand. Cost restructuring activities, as well as reduced hiring and lower travel expenses resulting from the pandemic, also contributed to the company’s cash savings. 

Additionally, the firm’s Q3 financials don’t account for the sale of its Cimatron business to global technology-focused investment firm Battery Ventures, which is set to be concluded in the next few weeks. 3D Systems will receive $65 million from the sale, that will be put towards its planned restructuring activities, and it expects to see “further divestitures of non-core assets” moving forwards. 

Further cost-cutting measures in Q4 2020?

In Q4 2020, 3D Systems indicated that it expects the economic climate to remain difficult, but that it had positioned itself well over the third quarter to prosper. Having gained 510k FDA approval for a new line of surgical guides, and seen ACS Custom use its printers to create hearing devices during Q3, the firm’s healthcare division continues to grow. 

What’s more, the company launched an equity offering program during Q3 2020, in which it made $150 million worth of shares available for purchase. Given that 3D Systems has recouped $65 million from the sale of its software businesses, it does not anticipate having to continue offering shares in Q4, reflecting the progress it has made throughout Q3. 

In his closing remarks, Graves concluded that 3D System’s Q3 progress showed that its restructuring had put the firm back on the path to profitability. “From a balance sheet perspective, we have made substantial progress in our divestiture of non-core assets, and, earlier this week, were pleased to announce an agreement on the sale of our Cimatron and GibbsCAM software businesses,” said Graves. 

“This sale, which we expect will close in the coming weeks, will strengthen our balance sheet and help ensure our ability to execute our planned restructuring activities, while maintaining critical investments for growth in our core businesses,” he added. “We continue to pursue further divestitures of non-core assets to occur in the months ahead.” 

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Featured image shows a 3D Systems client using one of its machines to fabricate dental products. Photo via 3D Systems.