Stratasys posts revenue of $162M for Q3 2018, adjusts guidance for full year

Leading 3D printer manufacturer Stratasys, headquartered in Rehovot, Israel, has announced its financial results for the third quarter of 2018. Headline revenue for the quarter ended September 30, 2018, was $162 million, up 4% on the same quarter in 2017, which was $155.9 million.

In light of this quarterly performance, and following the first nine months of 2018, the company has also chosen to update its guidance for the full year ended December 31, 2018.

On a call with investors earlier today interim CEO Elan Jaglom fielded questions on topics including the forthcoming metal 3D printer, the impact of HP’s color 3D printing system and new technologies under development by Evolve Additive Solutions and Vulcan Labs, Inc.

Regarding HP, Jaglom said, “Happy to hear HP is following us and going into color. [..] I am not concerned about it, I am happy other competitors are following.”

Analysts also pressed the company on plans for “taking the fight to HP” specifically in regard to what one participant described as an attempt by HP, “to freeze the market” with the earlier announcement of Multi Jet Fusion and more recently the HP Metal Jet

Investors were told to expect more details about the Stratasys metal system at Formnext, with few details other than that the system is a “unique technology” and very suitable for production.

Stratasys demonstrated carbon fiber 3D printing for Team Penske at IMTS 2018. Photo by Michael Petch.
Stratasys demonstrated carbon fiber 3D printing for Team Penske at IMTS 2018. Photo by Michael Petch.

Stratasys Products and Services revenue 

Stratasys revenue is reported by the company in two segments: Products, i.e. 3D printers, materials and software, and Services, encompassing On Demand Manufacturing and consultancy.

As in previous quarters, Products continue to be the dominant segment for sales at Stratasys. In Q3 2018, revenue for Stratasys Products was $109.6 million, up 1.15% on the $108.4 million in net sales for the same period in 2017.

On the other hand, net sales for Services in Q3 2018 was reported at $52.4 million, a 10.40% variance on Q3 2017 which was $47.5 million.

Revenues Q3 FY2018 Q3 FY 2017 Variance £ millions %
Products 109,647 108,401 1,246 1.15%
Services 52,402 47,466 4,936 10.40%
Total 162,049 155,867 6,182 3.97%

For the nine months ended September 30, 2018, the accumulated revenue for Products was $332 million, a decrease on the same period in 2017 which was $344.5 million.

Revenue from Services however managed to close the gap between the first nine months of 2017 and 2018. For the nine months ended September 30, 2018, Services revenue was $154.1 million, up from $144.5 million for the same period in 2017. As a result, revenue for the first nine months of 2018 totals $486.1 million, compared to $489 million for the same period in 2017.

Revenues First 9 mnths. 2018 First 9 mnths. 2017 Variance £ millions %
Products 331,967 344,509 -12,542 -3.64%
Services 154,151 144,510 9,641 6.67%
Total 486,118 489,019 -2,901 -0.59%
In terms of longer trends, the results show a steady decline over a 5 year period. However, if the results from 2014 are excluded from the analysis below then the picture appears more positive.
Stratasys net sales by products and services. Chart by 3D Printing Industry.
Stratasys net sales by products and services. Chart by 3D Printing Industry.

Stratasys guidance update for FY 2018

In summary of the remaining results, the GAAP gross margin for Stratasys in Q3 2018 was 48.7%, compared to 48.3% for the same period last year. GAAP net loss for the quarter was $0.7 million, equating to $0.01 per diluted share, compared to a net loss of $10.2 million for the same three months in 2017, or $0.19 per diluted share.

Further for Q3 2018, the company increased in GAAP R&D expenses by 18.5% compared to the same period in 2017, to $25.8 million. The company ends the period with $348.9 million in cash and cash equivalents.

In light of the first nine months of FY2018, the company has updated its revenue guidance for year end 2018 to between $670 and $680 million. The projected revenue for end of year 2018 was previously set at a guidance between $670 million and $700 million.

Customer engagement remains “encouraging”

Commenting on Q3 2018’s results Elchanan (Elan) Jaglom, Interim Chief Executive Officer of Stratasys following Ilan Levin’s resignation in June 2018, says, “We are pleased with our results this quarter, reflecting continued strength in our high-end systems orders, utilization rates and our parts services business.”

Citing the company’s presentation of its new carbon fiber 3D printing capabilities at IMTS 2018, and an ongoing partnership with American sports car racing Team Penske, Jaglom continues, “The level of engagement we are experiencing with customers in our key verticals is encouraging,”

“[…] And we are excited about the innovation we plan to bring to market to drive incremental, long-term opportunities, as we continue to invest in new products and materials across our portfolio of FDM and PolyJet technologies, our new metal additive manufacturing platform, and advanced composite materials.”

David Reis, Vice Chairman, also highlighted a number of end-use applications for Stratasys technology.

“FedEx, who are developing efficiencies in their supply chain as they work to deploy additive manufacturing facilities closer to customers as part of their FedEx Forward Depots service offering;
SSL, an aerospace customer using our FDM technology for rapid-response, customized, high-temperature lay-up tooling that previously would have been done with CNC;
Lockheed Martin, leveraging our new Antero PEKK advanced thermoplastic to create highly repeatable parts that meet the strict mechanical, functional, and dimensional requirements for space travel; and,
Penske’s NASCAR division, showing multiple 3D printed end-use parts that their production managers can create in a single day, compared to multiple days using traditional machining methods.”

Full Stratasys Third Quarter 2018 Financial Results can be viewed online here.

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

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Featured image shows 3D printed bespoke fixtures made on the Stratasys F900. Photo via Stratasys.