Stratasys Releases Second Quarter 2023 Financial Results
Stratasys announces Q2 2023 financial results with revenue of $159.8 million, a 1.6% increase from Q2 2022. Highest-ever recurring revenue in Consumables and Customer Service. Adjusted EBITDA grew 43% to $10.6 million year-over-year. Reiterates 2023 and medium-term revenue outlook.
Positive
Revenue increased by 1.6% compared to Q2 2022
Highest-ever recurring revenue in Consumables and Customer Service
Adjusted EBITDA grew 43% to $10.6 million year-over-year
Reiterating 2023 and medium-term revenue outlook
Negative
GAAP net loss of $38.6 million, or $0.56 per diluted share
Cash used in operations of $23.2 million
GAAP operating loss of $33.7 million
08/09/2023 - 07:00 AM
Revenue of $159.8 million 1.6% higher than second quarter 2022 excluding MakerBot (2.0% higher at constant currency)
Highest-ever recurring revenue in Consumables and Customer Service
GAAP net loss of $38.6 million , or $0.56 per diluted share which includes one-time extraordinary costs, and non-GAAP net income of $2.5 million , or $0.04 per diluted share
Adjusted EBITDA grew 43% to $10.6 million year-over-year
Eighth straight quarter of adjusted profitability
Reiterating 2023 and medium-term revenue outlook
MINNEAPOLIS & REHOVOT, Israel --(BUSINESS WIRE)--
Stratasys Ltd. (Nasdaq: SSYS) (“Stratasys” or the “Company”), a leader in polymer 3D printing solutions, today announced financial results for the second quarter 2023.
Second Quarter 2023 Financial Results Compared to Second Quarter 2022:
Revenue of $159.8 million compared to $166.6 million in second quarter 2022.
GAAP gross margin of 41.5% , compared to 40.5% .
Non-GAAP gross margin of 48.5% , compared to 47.6% .
GAAP operating loss of $33.7 million , which includes one-time extraordinary costs related to prospective and potential mergers and acquisitions, defense against hostile tender offer, proxy contest and related professional fees, compared to an operating loss of $23.5 million .
Non-GAAP operating income of $5.0 million , compared to non-GAAP operating income of $1.9 million .
GAAP net loss of $38.6 million , or $0.56 per diluted share which includes the one-time costs noted above, compared to a net loss of $24.4 million , or $0.37 per diluted share.
Non-GAAP net income of $2.5 million , or $0.04 per diluted share, compared to non-GAAP net income of $1.2 million , or $0.02 per diluted share.
Adjusted EBITDA of $10.6 million , compared to $7.4 million .
Cash used in operations of $23.2 million , compared to cash used in operations of $22.8 million in the year-ago quarter, due to the timing of annual incentive payments, increases in accounts receivable, costs related to prospective and potential mergers and acquisitions, defense against hostile tender offer, proxy contest and related professional fees.
Dr. Yoav Zeif, Stratasys’ Chief Executive Officer stated, “Leveraging our position in polymer additive manufacturing, resilient business model and strong financial profile, Stratasys once again delivered solid operating and financial results despite persistent macroeconomic headwinds. For the second consecutive quarter we delivered record revenues from both consumables and customer service, demonstrating the growth in utilization of our systems even as customer capital budgets remain constrained. Our relentless focus on execution continued to drive meaningful improvements in adjusted gross margins both sequentially and year over year, as we delivered our eighth consecutive quarter of positive adjusted earnings per share.”
Dr. Zeif continued, “I would like to thank our employees who have continued to maintain their focus, furthering the execution of our strategy with excellence and helping to make Stratasys the healthiest and strongest-growing business in our industry. Despite the various M&A scenarios emerging in the industry, customers across all of our technologies remain highly engaged and confident in Stratasys as we continue to look for ways to expand our innovation and suite of offerings. The addition of Covestro’s Additive Manufacturing business has yielded immediate results, and our expected combination with Desktop Metal will create comprehensive offerings across the industrial landscape. Additive manufacturing is on the edge of tremendous growth as customers accelerate the use of our technologies at production scale. Together with our fortress balance sheet and resilient business model, we are well-positioned to drive profitable growth as we continue to create shareholder value.”
2023 Financial Outlook:
Based on current market conditions and assuming that the impacts of global inflationary pressures, interest rate hikes and supply chain costs do not impede economic activity further, the Company is reiterating its revenue guidance and the remainder of its outlook for 2023, other than GAAP earnings, as follows:
Full year revenue of $630 million to $670 million .
Sequential quarterly revenue growth, notably higher in the second half.
Based on current logistics and materials costs, full year non-GAAP gross margins of 48.0% to 49.0% , with a majority of the year-over-year improvement in the second half of 2023.
Full year non-GAAP operating expenses in the range of $290 million to $300 million .
Full year non-GAAP operating margins in a range of 2.5% to 3.5% , with improving profitable margins as the year progresses.
GAAP net loss of $115 million to $96 million , or ($1.66 ) to ($1.39 ) per diluted share, which includes one-time extraordinary costs associated with the proxy contest and merger-related activities.
Non-GAAP net income of $9 million to $17 million , or $0.12 to $0.24 per diluted share.
Adjusted EBITDA of $35 million to $50 million .
Capital expenditures of $20 million to $25 million .
2023 non-GAAP earnings guidance excludes $30 million to $32 million of projected amortization of intangible assets, $28 million to $30 million of share-based compensation expense, and reorganization, one-time extraordinary costs associated with the proxy contest and merger-related activities and other expenses of $53 million to $59 million . 2023 non-GAAP guidance includes tax adjustments of $2 million to $3 million on the above non-GAAP items.
Medium Term Financial Forecast:
In addition, the Company is reiterating its forecast for key annual financial metrics:
2024 gross margin above 50% and positive free cash flow.
2026 revenues to grow organically to greater than $1 billion , with adjusted EBITDA margin of 15% or greater.
Appropriate reconciliations between GAAP and non-GAAP financial measures are provided in a table at the end of our press release and slide presentation, with itemized detail concerning the non-GAAP financial measures.
Stratasys Ltd. Second Quarter 2023 Webcast and Conference Call Details
The Company plans to webcast its conference call to discuss its second quarter 2023 financial results on Wednesday, August 9, 2023, at 10:00 a.m. (ET).
The investor conference call will be available via live webcast on the Stratasys Web site at investors.stratasys.com , or directly at the following web address:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=B8jlZNVs
To participate by telephone, the U.S. toll-free number is 877-407-0619 and the international dial-in is +1-412-902-1012. Investors are advised to dial into the call at least ten minutes prior to the call to register. The webcast will be available for six months at investors.stratasys.com, or by accessing the above-provided web address.
Stratasys is leading the global shift to additive manufacturing with innovative 3D printing solutions for industries such as aerospace, automotive, consumer products, healthcare, fashion and education. Through smart and connected 3D printers, polymer materials, a software ecosystem, and parts on demand, Stratasys solutions deliver competitive advantages at every stage in the product value chain. The world’s leading organizations turn to Stratasys to transform product design, bring agility to manufacturing and supply chains, and improve patient care.
To learn more about Stratasys, visit www.stratasys.com , the Stratasys blog , X.com (formerly Twitter) , LinkedIn , or Facebook . Stratasys reserves the right to utilize any of the foregoing social media platforms, including the Company’s websites, to share material, non-public information pursuant to the SEC’s Regulation FD. To the extent necessary and mandated by applicable law, Stratasys will also include such information in its public disclosure filings.
Stratasys is a registered trademark and the Stratasys signet is a trademark of Stratasys Ltd. and/or its subsidiaries or affiliates. All other trademarks are the property of their respective owners.
Cautionary Statement Regarding Forward-Looking Statements
The statements in this press release regarding Stratasys' strategy, and the statements regarding its projected future financial performance, including the financial guidance concerning its expected results for 2023 and beyond, are forward-looking statements reflecting management's current expectations and beliefs. These forward-looking statements are based on current information that is, by its nature, subject to rapid and even abrupt change. Due to risks and uncertainties associated with Stratasys' business, actual results could differ materially from those projected or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to: the degree of our success at introducing new or improved products and solutions that gain market share; the degree of growth of the 3D printing market generally; the impact of potential shifts in the prices or margins of the products that we sell or services that we provide, including due to a shift towards lower margin products or services; the impact of competition and new technologies; potential further charges against earnings that we could be required to take due to impairment of additional goodwill or other intangible assets; the extent of our success at successfully consummating and integrating into our existing business acquisitions or investments in new businesses, technologies, products or services; the global macro-economic environment, including headwinds caused by inflation, rising interest rates, unfavorable currency exchange rates and potential recessionary conditions, potential changes in our management and board of directors; global market, political and economic conditions, and in the countries in which we operate in particular; costs and potential liability relating to litigation and regulatory proceedings; risks related to infringement of our intellectual property rights by others or infringement of others' intellectual property rights by us; the extent of our success at maintaining our liquidity and financing our operations and capital needs; the impact of tax regulations on our results of operations and financial condition; and those additional factors referred to in Item 3.D “Key Information - Risk Factors”, Item 4, “Information on the Company”, Item 5, “Operating and Financial Review and Prospects,” and all other parts of our Annual Report on Form 20-F for the year ended December 31, 2022, which we filed with the U.S. Securities and Exchange Commission, or SEC, on March 3, 2023 (the “2022 Annual Report”). Readers are urged to carefully review and consider the various disclosures made throughout our 2022 Annual Report and the Reports of Foreign Private Issuer on Form 6-K that attach Stratasys’ unaudited, condensed consolidated financial statements and its review of its results of operations and financial condition, for the quarterly periods throughout 2023, which will be furnished to the SEC throughout 2023, and our other reports filed with or furnished to the SEC, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects. Any guidance provided, and other forward-looking statements made, in this press release are provided or made (as applicable) as of the date hereof, and Stratasys undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Use of Non-GAAP Financial Measures
The non-GAAP data included herein, which excludes certain items as described below, are non-GAAP financial measures. Our management believes that these non-GAAP financial measures are useful information for investors and shareholders of our company in gauging our results of operations (i) on an ongoing basis after excluding mergers, acquisitions and divestments related expense or gains and reorganization-related charges or gains, and legal provisions and (ii) excluding non-cash items such as stock-based compensation expenses, acquired intangible assets amortization, including intangible assets amortization related to equity method investments, impairment of long-lived assets and goodwill, revaluation of our investments and the corresponding tax effect of those items. These non-GAAP adjustments either do not reflect actual cash outlays that impact our liquidity and our financial condition or have a non-recurring impact on the statement of operations, as assessed by management. These non-GAAP financial measures are presented to permit investors to more fully understand how management assesses our performance for internal planning and forecasting purposes. The limitations of using these non-GAAP financial measures as performance measures are that they provide a view of our results of operations without including all items indicated above during a period, which may not provide a comparable view of our performance to other companies in our industry. Investors and other readers should consider non-GAAP measures only as supplements to, not as substitutes for or as superior measures to, the measures of financial performance prepared in accordance with GAAP. Reconciliation between results on a GAAP and non-GAAP basis is provided in a table below.
Important Additional Information Concerning the Proposed Merger with Desktop Metal
In connection with the proposed merger transaction between Stratasys and Desktop Metal, Inc. (“Desktop Metal ”), Stratasys filed with the SEC a registration statement on Form F-4 that includes a joint proxy statement of Stratasys and Desktop Metal and that also constitutes a prospectus of Stratasys. Each of Stratasys and Desktop Metal may also file other relevant documents with the SEC regarding the proposed transaction. The registration statement has not yet become effective. After the registration statement is effective, the definitive joint proxy statement/prospectus will be mailed to shareholders of Stratasys and Desktop Metal. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT, THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain free copies of the registration statement and definitive joint proxy statement/prospectus and other documents containing important information about Stratasys, Desktop Metal and the proposed transaction, once such documents are filed with the SEC through the website maintained by the SEC at http://www.sec.gov . Copies of the documents filed with, or furnished, to the SEC by Stratasys will be available free of charge on Stratasys’ website at https://investors.stratasys.com/sec-filings . Copies of the documents filed with the SEC by Desktop Metal will be available free of charge on Desktop Metal’s website at https://ir.desktopmetal.com/sec-filings/all-sec-filings .
Stratasys Ltd.
Consolidated Balance Sheets
(Unaudited)
(in thousands, except share data)
June 30,
December 31,
2023
2022
ASSETS
Current assets
Cash and cash equivalents
$
144,366
$
150,470
Short-term deposits
61,000
177,367
Accounts receivable, net of allowance for credit losses of $0.8 million and $0.9 million as of June 30, 2023 and December 31, 2022
156,264
144,739
Inventories
211,186
194,054
Prepaid expenses
10,187
5,767
Other current assets
27,463
27,823
Total current assets
610,466
700,220
Non-current assets
Property, plant and equipment, net
200,994
195,063
Goodwill
92,946
64,953
Other intangible assets, net
148,613
121,402
Operating lease right-of-use assets
20,513
18,122
Long-term investments
138,624
141,610
Other non-current assets
18,269
18,420
Total non-current assets
619,959
559,570
Total assets
$
1,230,425
$
1,259,790
LIABILITIES AND EQUITY
Current liabilities
Accounts payable
$
69,793
$
72,921
Accrued expenses and other current liabilities
50,763
45,912
Accrued compensation and related benefits
29,534
34,432
Deferred revenues - short term
51,865
50,220
Operating lease liabilities - short term
6,842
7,169
Total current liabilities
208,797
210,654
Non-current liabilities
Deferred revenues - long term
27,399
25,214
Deferred income taxes - long term
6,995
5,638
Operating lease liabilities - long term
13,346
10,670
Contingent consideration
26,151
23,707
Other non-current liabilities
24,510
24,475
Total non-current liabilities
98,401
89,704
Total liabilities
307,198
300,358
Equity
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands
shares; 68,942 thousands shares and 67,086 thousands shares issued
and outstanding at June 30, 2023 and December 31, 2022, respectively
193
187
Additional paid-in capital
3,073,396
3,048,915
Accumulated other comprehensive loss
(12,671
)
(12,818
)
Accumulated deficit
(2,137,691
)
(2,076,852
)
923,227
959,432
Total liabilities and equity
$
1,230,425
$
1,259,790
Stratasys Ltd.
Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Net sales
Products
$
109,112
$
115,721
$
210,083
$
228,794
Services
50,639
50,882
99,045
101,238
159,751
166,603
309,128
330,032
Cost of sales
Products
57,576
61,132
108,689
120,505
Services
35,953
38,078
68,822
72,457
93,529
99,210
177,511
192,962
Gross profit
66,222
67,393
131,617
137,070
Operating expenses
Research and development, net
24,305
24,346
45,780
48,344
Selling, general and administrative
75,576
66,592
136,293
131,855
99,881
90,938
182,073
180,199
Operating loss
(33,659
)
(23,545
)
(50,456
)
(43,129
)
Financial income (expenses), net
687
(1,170
)
1,460
(2,532
)
Loss before income taxes
(32,972
)
(24,715
)
(48,996
)
(45,661
)
Income tax benefit (expenses)
(725
)
429
(4,500
)
502
Share in losses of associated companies
(4,918
)
(99
)
(7,343
)
(174
)
Net loss
$
(38,615
)
$
(24,385
)
$
(60,839
)
$
(45,333
)
Net loss per share
Basic
$
(0.56
)
$
(0.37
)
$
(0.89
)
$
(0.69
)
Diluted
$
(0.56
)
$
(0.37
)
$
(0.89
)
$
(0.69
)
Weighted average ordinary shares outstanding
Basic
68,648
66,568
68,107
66,151
Diluted
68,648
66,568
68,107
66,151
Three Months Ended June 30,
2023
Non-GAAP
2023
2022
Non-GAAP
2022
GAAP
Adjustments
Non-GAAP
GAAP
Adjustments
Non-GAAP
U.S. dollars and shares in thousands (except per share amounts)
Gross profit (1)
$
66,222
$
11,283
$
77,505
$
67,393
$
11,914
$
79,307
Operating income (loss) (1,2)
(33,659
)
38,666
$
5,007
(23,545
)
25,479
$
1,934
Net income (loss) (1,2,3)
(38,615
)
41,148
$
2,533
(24,385
)
25,560
$
1,175
Net income (loss) per diluted (4)
$
(0.56
)
$
0.60
$
0.04
$
(0.37
)
$
0.39
$
0.02
(1)
Acquired intangible assets amortization expense
5,014
6,954
Non-cash stock-based compensation expense
999
1,080
Restructuring and other related costs
3,378
15
Impairment charges and write off
1,892
3,865
11,283
11,914
(2)
Acquired intangible assets amortization expense
2,686
2,218
Non-cash stock-based compensation expense
7,024
7,751
Restructuring and other related costs
2,468
-
Revaluation of investments
-
1,255
Contingent consideration
347
596
Legal, consulting and other expenses
14,858
1,745
27,383
13,565
38,666
25,479
(3)
Corresponding tax effect
213
81
Finance expenses
175
-
Equity method related amortization and other
2,094
-
$
41,148
$
25,560
(4)
Weighted average number of ordinary shares outstanding- Diluted
68,648
69,272
66,568
67,070
Six Months Ended June 30,
2023
Non-GAAP
2023
2022
Non-GAAP
2022
GAAP
Adjustments
Non-GAAP
GAAP
Adjustments
Non-GAAP
U.S. dollars and shares in thousands (except per share amounts)
Gross profit (1)
$
131,617
$
16,582
$
148,199
$
137,070
$
19,603
$
156,673
Operating income (loss) (1,2)
(50,456
)
56,981
$
6,525
(43,129
)
47,086
$
3,957
Net income (loss) (1,2,3)
(60,839
)
64,454
$
3,615
(45,333
)
47,718
$
2,385
Net income (loss) (4)
$
(0.89
)
$
0.95
$
0.05
$
(0.69
)
$
0.73
$
0.04
(1)
Acquired intangible assets amortization expense
9,015
13,920
Non-cash stock-based compensation expense
1,931
1,980
Restructuring and other related costs
3,744
(162
)
Impairment charges and write off
1,892
3,865
16,582
19,603
(2)
Acquired intangible assets amortization expense
4,880
4,443
Non-cash stock-based compensation expense
14,332
15,384
Restructuring and other related costs
4,266
555
Revaluation of investments
580
2,316
Contingent consideration
612
803
Legal, consulting and other expenses
15,729
3,982
40,399
27,483
56,981
47,086
(3)
Corresponding tax effect
3,251
-
Finance expenses
638
226
Equity method related amortization and other
3,584
406
$
64,454
$
47,718
(4)
Weighted average number of ordinary shares outstanding- Diluted
68,107
68,683
66,151
67,071
View source version on businesswire.com: https://www.businesswire.com/news/home/20230809482580/en/
Yonah Lloyd
CCO & VP Investor Relations
Yonah.Lloyd@stratasys.com
Source: Stratasys Ltd.
What was the revenue for Q2 2023 compared to Q2 2022?
The revenue for Q2 2023 was $159.8 million, a 1.6% increase from Q2 2022.
What is the adjusted EBITDA for Q2 2023?
The adjusted EBITDA for Q2 2023 grew 43% to $10.6 million year-over-year.
What is the outlook for 2023 and the medium-term?
The company is reiterating its revenue outlook for 2023 and the medium-term.
What was the GAAP net loss for Q2 2023?
The GAAP net loss for Q2 2023 was $38.6 million, or $0.56 per diluted share.
What was the cash used in operations for Q2 2023?
The cash used in operations for Q2 2023 was $23.2 million.
What was the GAAP operating loss for Q2 2023?
The GAAP operating loss for Q2 2023 was $33.7 million.