Stratasys posts strongest Q1 financials in six years thanks to Origin P3, H350 SAF and NEO momentum

Industrial 3D printer manufacturer Stratasys (SSYS) has reported its strongest quarter financials in six years with its Q1 2022 report, posting a 22% revenue rise. 

During Q1 2022, Stratasys generated $163.4 million, $29.2 million more than the $134.2 million it reported in Q1 2021, and an $8 million rise on the $155.3 million brought in over the pre-Covid Q1 2019. On the firm’s earnings call, the firm’s CEO Yoav Zeif attributed the firm’s success during the quarter to growth across all of its technologies and key businesses. 

“We are particularly excited by the early momentum from our new Origin P3, H350 SAF and NEO systems, designed specifically for high volume production of end-use parts,” he said.

“Our focus on execution is yielding results, that demonstrate how our strategy to grow our leadership position in polymer 3D printing is working.”

Some of Stratasys' new Origin materials. Photo via Stratasys.
Some of Stratasys’ new Origin materials. Photo via Stratasys.

Stratasys’ Q1 2022 results

Following on from a successful Q4 2022 in which it reported 18% revenue growth, Stratasys’ growth momentum continued during Q1 2022, seeing a particular strength in its Systems revenue which grew 37% during the quarter. 

The majority of the firm’s Q1 2022 revenue came from its Products business, which rose to $113 million during the quarter, a 25% increase from the $90.3 million generated in Q1 2021. According to Stratasys’ Chief Financial Officer Eitan Zamir, System sales were primarily strengthened by the launch of the Origin One in mid-February and the first full quarter of H350 sales.

The company’s Services revenue also rose almost 15% from $44 million to $50 million between Q1 2021 and 2020, driven by expanding its penetration further into applications within the aerospace, automotive, and fashion sectors.

“Our strong start to the year, with our highest first quarter revenue total in six years, was anchored by 22% revenue growth that included improved contributions from all our technologies,” said Zeif. “Importantly, systems was the main driver, up 36.7% for its strongest first quarter in five years, and 16.4% higher than the same period in pre-Covid 2019. We also achieved exceptional results in both consumables and services, driven by strength in our growing install base.”

Elsewhere, Stratasys’ financials reveal that its operating expenses rose from $73.9 million in Q1 2021 to $89.3 million in Q1 2022, which Zamir said was mainly a result of the firm’s acquisitions of Xaar, Origin, and RPS last year.

Stratasys financials ($)Q1 2021Q1 2022Difference (%)Q1 2019Q1 2022Difference (%)
Total Revenue134m163m22155m163m5
Carbon fiber composite part 3D printed on the F190CR. Photo via Stratasys.
Carbon fiber composite part 3D printed on the F190CR. Photo via Stratasys.

Hitting key milestones in Q1 2022

Stratasys had a busy start to the year, with its strongest Q1 in six years driven by the achievement of several key milestones during the quarter. 

For instance, the firm expanded its industry-tailored applications with the qualification a high-performance tailored material for aerospace end-use parts in partnership with Lockheed Martin, while Radford Motors is the second auto OEM using all five of the company’s 3D printing technologies for design, prototyping, tooling, and end-use parts in vehicle production. Stratasys also officially launched its full-color PolyJet 3D printer, the J850 TechStyle, designed specifically for printing directly onto textile materials. 

Another key milestone highlighted by Zeif during the earnings call was the recent merger of MakerBot and Ultimaker to form a new desktop 3D printing entity. According to him, the transaction will allow Stratasys to further concentrate its focus on its core businesses while also providing access to entry-level 3D printing users. 

“We believe that the desktop sector is growing at a healthy pace, and that the new company will be a leading force in that industry and we view our investment as having the potential to realize incremental long-term value for our shareholders,” he said.

Another future driver of Stratasys’ revenue for 2022 will be the company’s recent mass launch of two new industrial FDM composite 3D printers, 16 new 3D printing materials, and GrabCAD Print software for its Origin One and Origin One Dental systems. Zeif believes the new product updates will strengthen the value its products can bring to customers and strengthen its offerings to numerous markets. 

“We have advanced a number of strategic initiatives thus far in 2022, including the announced MakerBot business combination with Ultimaker, the publishing of our inaugural ESG Sustainability Report, and our annual flagship manufacturing event where we showcased new offerings in materials, upgrades to existing printing platforms, and an expansion of our software capabilities,” he explained. 

“With our combination of best-in-class talent, systems offerings, Go-to-Market and support infrastructure, combined with a robust balance sheet, Stratasys is positioned to build on our first quarter growth across the balance of 2022 and beyond.”

The build platform of the J850 TechStyle. Photo via Stratasys.
The build platform of the J850 TechStyle. Photo via Stratasys.

Projecting further growth

Off the back of a successful Q1 2022, Stratasys has tightened its revenue guidance for FY 2022 to between $685 million and $695 million. The firm also predicts improvements to gross margin and operating margins throughout the year, although Zamir pointed out that the guidance continues to include full-year contribution from MakerBot as the merger has not yet closed, with the firm planning to update its outlook later this year in response. 

“While we are encouraged by the level of engagement with our customers and confident in our growth potential, we are also monitoring global issues that can have an impact, such as the shutdowns in part of China, currency fluctuations and continued other supply chain constraints,” Zamir added. “We continue to expect revenue to grow sequentially each quarter throughout the year with the second half of the year notably stronger than the first half. Revenue growth for the second quarter is expected to be low to mid-teens as a percentage over the second quarter of 2021. 

“From a gross margin perspective, we continue to expect full year 2022 to be flat to slightly higher as compared to 2021, with the second half stronger than the first half, based primarily on higher revenue.”

The Stratasys F190CR 3D printer. Photo via Stratasys.
The Stratasys F190CR 3D printer. Photo via Stratasys.

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Featured image shows the Stratasys F190CR 3D printer. Photo via Stratasys.