3D printing market leader Stratasys (NYSE: SSYS) has released its financial report for Q3 of 2017, showing a gross revenue of $155.9 million, a gross profit of $75.2 million and overall net losses of $10.2 million.
Following these results, Stratasys adjusted its revenue guidance for this financial year from $645 – $680 million to $655 – $670 million. Markets reacted positively to the news on 14 November, with share prices briefly rising to $22.12 after a period of decline following October’s upgrade.
Stratasys’ gross 2017 Q3 revenue on 30 September 2017 stood at $155.9 million, a 0.83% decrease in the revenue for 2016 Q3.
In a call to investors, Stratasys CEO Ilan Levin explained that “revenue for the third quarter was partially impacted by several large, multi-system orders that were deferred until October.”
Levin also explained that selling complete 3D printing systems meant “higher quarter-to-quarter variations in order timing.”
Gross revenue by division
Stratasys divided its statement according to products and services. The products division, consisting of printers and consumables, experienced a decrease in 2017 Q3 revenue, reaching $108.4 million, down 1.5% from the $110.1 million revenue of Q3 2016.
Stratasys’ services division, however, experienced a slight increase of 0.8%, reporting a Q3 2017 profit of $47.4 million, up from 47.1 million in Q3 of 2017. Stratasys CFO Lilach Payorski explained that this consisted of “customer support revenue” which was “driven primarily by growth in our installed base of systems”
Amongst product news, Q3 2017 saw a a commercial delivery of an additional H2000 Large Part FDM 3D printer to a new customer. While CEO Ilan Levin described this as a “milestone”, he did not reveal on a call to investors when questioned what proportion of system revenues the H2000 represented.
Payorski explained that together with deferrals, system orders had also been affected by adverse US weather conditions. Levin however noted “strong market reception to F123 series,” and the positive reaction to GrabCAD Print by its 18,000 users (since its launch in 2016).
Cost of goods sold
The total cost of goods sold by Stratasys in Q3 2017 was $80.6 million. This marked a 3.4% decrease in the cost of goods sold in Q3 2016, which amounted to $83.4 million.
In line with this reduction in the cost of goods sold, Stratasys saw a 2.1% increase in gross profits, reaching $75.2 (73.6) million.
Levin admitted on a call to investors that despite praising the performance of the F123 systems, it would take “a number of quarters to get the kinks out” before any “improvement in gross margins.”
Operating expenses and losses
Stratasys’ operating expenses also saw a fall of 11.7% in Q3 of 2017 to $82.1(93.0) million. Consequently, operating losses saw a 64.5% decrease in 2017 Q3 to $6.9(19.4) million.
Explaining these results, Stratasys CEO Ilan Levin stated that “we achieved significant improvements in operating profit during the third quarter compared to the prior year, driven by our continued focus on aligning our resources to…deepening customer engagement and developing high-value applications within our key vertical markets”
In Q3 of 2016 Stratasys, reported losses of $ 21.0 million, which resulted in a steep drop in Stratasys’ share prices.The event saw Levin promise cost cutting measures. The Q3 2017 losses amount to $10.2 million, a 51.2% reduction in losses, suggesting that Levin’s “aligning of resources” was being implemented.
Full table of results for 2017 Q3 (numbers in $US millions)
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Stratasys booth at formnext 2016. Photo via Michael Petch.