3D Systems reports first annual revenue growth since 2018 in Q4 2020 financials

3D printer manufacturer 3D Systems has reported 2% annual revenue growth in its Q4 2020 financial results, its first year-on-year increase in any quarter since 2018. 

Over the course of Q4 2020, the company generated $172.7 million in revenue, 2% more than the $168.2 million reported in Q4 2019, and well within its forecast of $170-176 million. The result effectively vindicates the firm’s decision to undergo a strategic refocus last year, which has seen it recoup $60 million in costs, divest two subsidiaries and focus on its key healthcare and industrial verticals. 

3D Systems’ financials were also received well by investors, as its shares increased from $35.85 to $38.63 after the figures were published, a rise of 8%. In a statement issued alongside the results, the firm’s CEO Dr. Jeffrey Graves, hailed the success of its efficiency measures, and alluded to the opportunities for re-investment ahead. 

“The execution of our four-stage plan took hold and rapidly gained momentum as we moved through the second half of the year,” said Graves. “With proceeds from our initial divestitures and positive cash flow, we will continue to look for opportunities to invest in the business, as evidenced by our recent announcement regarding our regenerative medicine program.”

“With our singular focus on additive manufacturing, we are pleased to deliver strong growth at the end of what was an unprecedented year.”

3D Systems has seen its revenues drop by 28 percent in Q2 2020 when compared to Q2 2019. Photo via 3D Systems.
3D Systems has reported its first year-on-year quarterly revenue growth since 2018. Photo via 3D Systems.

3D Systems’ Q4 2020 results 

3D Systems essentially reports its revenue across two core segments: Products and Services. While Products accounts for its revenue generated by 3D printers, software, and material sales, Services includes any revenue gained from the company’s healthcare solutions and on-demand manufacturing offerings. 

During Q4 2020, the firm’s Products division generated $113 million in revenue, an increase of 8% on the $105 million reported in Q4 2019, and a whopping 47% more than the $77 million raised in Q3 2020. By contrast, 3D Systems’ Services segment continued to struggle, reporting $60 million in revenue over the same period, 5% less than in Q4 2019. 

The company has attributed the impressive performance of its Product division to increased sales within its healthcare range, which rose 48% between Q4 2019 and Q4 2020, generating $86.6 million. Unfortunately, this growth wasn’t matched by the firm’s industrial business, which saw its revenue decrease 21.6% to $86.0 million over the same period. 

Despite this, Graves pointed out that 3D Systems’ industrial division recorded double-digit quarterly revenue growth, and that it was “continuing the recovery” from COVID-19. What’s more, the firm saw increased demand for its metal products during Q4, with significant interest from clients in the aerospace and automotive sectors, that could translate into sales during 2021.

Revenue ($)Q4 2019Q4 2020Variance (%)FY 2019FY 2020 Variance (%)
Products 105m 113m+8 389m333m -14
Services63m 60m-5247m224m -9
Total168m 173m +2636m557m-12

Partnerships and innovation in Q4

Although 3D Systems’ focus on its core healthcare and industrial verticals yielded a return to growth during Q4, its revenue was also boosted by a number of other key partnerships. For instance, the company worked with CERN and Nikhef to 3D print parts for the Large Hadron Collider in December last year, and was recently contracted by the CCDC to fabricate optimized heat exchangers for the US Army

Elsewhere, 3D Systems has worked with Jabil to launch its ‘Roadrunner’ industrial FFF 3D printer. The machine’s rapid throughput and ability to process high-temperature filaments, could make it ideal for the firm’s aerospace and automotive clients, and potentially drive future sales, while forming the basis of its new ‘High Speed Fusion’ (HSF) platform. 

With regards to 3D Systems’ longer-term growth prospects, it also reported “tremendous progress” within its Print to Perfusion bioprinting program last year. According to Graves, the project, which aims to 3D print fully-sized, vascularized lung scaffolds, could become an important source of revenue for the company sooner rather than later. 

“Our Healthcare business delivered exceptional revenue growth, driven strongly by both dental and medical applications,” said Graves. “We also made a significant technological breakthrough in our emerging regenerative medicine area, which will be increasingly important to our Healthcare business in the years ahead.”

Human vasculature model created using Print to Perfusion process" Image via United Therapeutics
A human vasculature model created using 3D Systems’ Print to Perfusion process. Photo via United Therapeutics.

Positive growth prospects for 2021 

During Q4 2020, 3D Systems was able to reduce its operating expenses by 9% compared to Q4 2019, thanks to its restructuring activities and a reduction in travel caused by COVID-19. While it remains to be seen whether the firm’s frugal approach continues into 2021, its stated strategy of “Reorganize, Restructure, Divest, and Invest,” suggests otherwise, as it may now have reached the last phase of its plan. 

The company recently received a ‘milestone payment’ for its bioprinting exploits, and used the funds raised from its divestitures to pay off its outstanding debt. As a result, 3D Systems has reported having $85 million in liquid cash plus access to $62 million in credit, providing it with the capital needed to invest in potential growth opportunities as they arise. 

“While 2020 will always be known as a year of great challenges, I am very proud of our efforts to focus the business,” added Graves. “With the progress we have made over the last year, we can now clearly see a future of exciting growth, expanding applications and increasing profitability, that will allow us to invest for the future.”

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Featured image shows an engineer operating a row of 3D Systems’ Figure 4 3D printers. Photo via 3D Systems.