Stratasys financial results for 2018, strong cash reserves and update on new products

Leading 3D printer OEM Stratasys (NASDAQ: SSYS) has published its financial accounts for 2018.

During today’s call with investors and analysts, full year revenue was reported as $663.2 million, generating a net loss of $11.0 million. Comparative figures for 2017 were $668.4 million and a loss of $40.0 million respectively. The revenue results come in below the guidance, updated in Q3 2018 of between $670 and $680 million.

Fourth quarter revenue was reported at $177.1 million for 2018, compared to $179.3 million for comparative.

PolyJet and 3D printer sales, plus materials, are attributed to the “continued positive traction” through Q4 2018. However Stratasys interim CEO Elchanan (Elan) Jaglom says that expected gains from the final quarter’s revenue were “offset partially” by the U.S. government shutdown and “what we believe is temporary weakness in the Automotive sector in Europe” including some differences due to currency exchange.

Stratasys at Formnext 2018. Photo by Beau Jackson
Stratasys at Formnext 2018. Photo by Beau Jackson

Stratasys ended the year with a record $393.2 million in cash and cash equivalents having generated $18.7 million in cash through operations in Q4 2018. By comparison, the company’s cash and cash equivalents for the full year 2017 were $328.8 million, with cash from operations for Q4 2017 at $20.8 million.

On the today’s call Stratasys executives also gave some updates on the company’s upcoming product schedule, and delivered guidance for FY2019.

Stratsys revenue by Products and Services

By division, Stratasys revenue is reported as Products and Services. Each year, the Products division, encompassing 3D printers and materials, accounts for the largest share of overall revenue. In Q4 2018, Stratasys Products generated $124.5 million in net sales, compared to $129.7 million for Q4 2017. For the full year, Products reported $456.5 million in 2018, compared to $474.2 million in 2017, a decrease of 3.75%.

Revenue Q4 2018 Q4 2017 Variance $ millions %
Products 124,537 129,777 -5,240 -4.04%
Services 52,582 49,566 3,016 6.08%
Total 177,119 179,343 -2,224 -1.24%

Stratasys Services, on the other hand, relates to the company’s on demand manufacturing and consultancy offerings. For the full year 2018, Services reported a revenue of $206.7 million, up 6.52% on the full year 2017 which was $194 million. For Q4 2018, Services reported a revenue of $52.5 million up 6.08% on Q$ 2017 which was $49.6 million.

Revenue FY 2018 FY 2017 Variance $ millions %
Products 456,504 474,286 -17,782 -3.75%
Services 206,733 194,076 12,657 6.52%
Total 663,237 668,362 -5,125 -0.77%

After expenses, the net income for Q4 2018 was reported at $6.2 million, compared to a net loss of $10 million in Q4 2018. For the full year 2018, the company reported a net loss of $11.2 million, compared to a net loss of $40.4 million for the full year 2017.

Expected “Accelerated revenue growth beginning 2020”

On the investor call discussing these 2018 financial results Stratasys shared that it was expecting “Accelerated revenue growth beginning 2020.” This will be driven by a “Focused R&D Roadmap” and new product introductions, beginning late 2019 moving through 2021. Forthcoming product launches mentioned on the call include scheduled improvements for its FDM and PolyJet 3D printer ranges, and its Layered Powder Metallurgy (LPM) metal additive manufacturing platform. Of LPM in particular, Jaglom said “It is coming.” As analysts determined however, the LPM system would not deliver anything meaningful by way of financial results through 2020, though the company is “on track” with the technology’s development.

Metal 3D printed sample by Stratasys. Photo by Beau Jackson
A metal 3D printed sample from Stratasys. Photo by Beau Jackson

On the call, the interim CEO also confirmed the company is still seeking his permanent replacement, and has been conducting interviews with a variety of candidates who have strong history in delivering growth.

In terms of the company’s recently release products, including the F380 Carbon Fiber Edition, and flexible TPU for the F123, the company has reportedly been impressed with demand and interest.

The MakerBot Method, which was revealed by the company in December 2018, is also on schedule to begin shipping at the end of March 2019.

Closing comments, Jaglom said, “We are pleased with our fourth quarter and full year profitability,”

“[We] finished 2018 with record cash flow from operations as we continue to build a strong operational foundation for future growth opportunities and to invest in accelerating new product introductions to expand our addressable markets.”

Stratasys’s full financial results for the fourth quarter and full year 2018 can be accessed online here, with a full recording of the live investor call and supporting PowerPoint presentation available here.

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Featured image shows PolyJet 3D printed samples from Stratasys. Phto by Beau Jackson