Industrial 3D printer manufacturer Stratasys (SSYS) expects to kick-off the 2022 financial year with continued growth in the “high-teens,” after reporting an 18% rise in revenue within its Q4 2021 results.
During Q4 2021, Stratasys generated $167 million, $25 million more than the $142 million it reported in Q4 2020, and a $7 million rise on the $160 million brought in over the pre-COVID Q4 2019. On the firm’s earnings call, its CEO Yoav Zeif explained how its impressive performance was due to a shift towards its manufacturing business, which saw it achieve its highest system sales since Q4 2018.
“We accomplished this with new systems, tailored to manufacturing at scale, a software platform to integrate the entire manufacturing digital trade, and a material strategy that rapidly opens up new applications,” Zeif said on the call. “We are excited about this broader portfolio, and believe it will further complement our systems offering to help drive our overall growth strategy.”
“Today, we are collaborating with the world’s leading materials companies, software partners, and our customers creating many new avenues for growth.”
Stratasys’ Q4 2021 financials
Following on from a successful Q3 2021 in which it reported 24% revenue growth, Stratasys put on another strong showing in Q4 2021, with the majority of its rise in income being derived from its Products business. The division brought in $118 million during Q4 2021, an increase of 19% on the $99 million it generated in Q4 2020, driven largely by a 26% jump in system revenue over the same period.
Likewise, the company’s Services revenue rose from $43 million to $49 million between Q4 2020 and 2021, something it attributes to a boom in demand from its dental and medical clientele. However, compared to Q4 2019 when the segment brought in $51 million, this figure still represents a 4% fall, suggesting it has also been impacted by the supply issues that have dogged other service providers.
Elsewhere, Stratasys’ financials show that its operating expenses rose from $69 million to $89 million from Q4 2020 to Q4 2021, with ‘selling, general and admin’ listed as its highest cost in this area. On the firm’s earnings call, Finance VP Eitan Zamir elaborated on this figure, explaining that it was the result of the return of the five-day week, higher market costs and expenses associated with its acquisitions.
|Stratasys Financials ($)||Q4 2020||Q4 2021||Variance (%)||Q4 2019||Q4 2021||Variance (%)|
Stratasys’ expansion-packed 2021
Across the 2021 financial year, Stratasys generated $607 million worth of income, 17% more than it managed during 2020. While this growth was no doubt facilitated by the easing of pandemic-related restrictions over the period, it was also driven by the firm’s rapid expansion of its portfolio, which according to Zeif, allowed it to better execute on the sales opportunities it had previously been missing out on.
“Until last year, our business had been centered around two core technologies: FDM and PolyJet,” said Zeif on Stratasys’ earnings call. “While we maintain leadership in these areas, this limited portfolio meant we were missing opportunities to participate more fully in the fast-growing applications at the heart of the shift from prototyping to manufacturing.”
One of the chief ways that Stratasys has built-out its offering is via acquisitions, and its decision to buy SLA 3D printer manufacturer RPS in February 2021, has yielded almost immediate revenue returns. Although the firm didn’t reveal the exact figures behind the addition of RPS’ NEO systems to its portfolio, it did say they performed “better than expected” and allowed it to address wider dental applications.
At around the same time, Stratasys also launched its ABS-CF10 material, which may initially have been designed for use with F123 Series systems, but it’s said to have proven a catalyst for F370 sales in 2021 as well, and as the firm begins to increase its open-material offering in 2022, Zeif said he expects this shift to “increase software revenue” in future.
Another of the company’s high-profile purchases during the period was Xaar 3D, which it bought in October 2021, after the HSS specialist helped develop Stratasys’ new H350 system. Since the machine was unveiled in Q2 2021, it’s said to have attracted significant interest among service providers, although it only began shipping in December 2021, so this likely won’t have impacted much on Q4 sales.
“Clearly, our focus on manufacturing is working,” added Zeif. “A year ago, we shared that in 2020 over 25% of our revenues came from manufacturing. We are pleased to say that for 2021 it was 29% and we expect 2022 manufacturing sales to grow at least 20%.”
Further growth ahead?
Thanks to the optimism surrounding its expanded portfolio, Stratasys has set its guidance for Q1 2022 at double-digit growth in the ‘high-teens,’ and said that it expects “the second half of the year to be notably stronger than the first,” culminating in revenue of $680-695 million, which if realized, would constitute growth of 12-14%.
Moving forwards, Zeif told analysts on the firm’s earnings call, that its $502 million cash balance, almost double the $272 million it had at the same point last year, and the addition of the H350 and Origin One to its portfolio, position it well for the year ahead, with these systems having the potential to “double its addressable market.”
“In 2022, we will advance our efforts to strengthen our leadership in polymer 3D printing,” concluded Zeif on the call. “We have established the foundations for long-term growth based on a leading polymer 3D printing ecosystem, complemented by continuous innovation across our portfolio.”
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Featured image shows Stratasys’ F770 3D printer. Image via Stratasys.