Stratasys Releases Fourth Quarter and Full Year 2022 Financial Results

Rhea-AI Summary

Stratasys Ltd. (SSYS) reported its fourth quarter 2022 revenue at $159.3 million, down 4.6% year-on-year, but adjusted for divestitures, it rose 1.7%. The company posted a GAAP net loss of $2.4 million or $0.04 per diluted share, while non-GAAP net income was $4.6 million, or $0.07 per share. For the full year, revenue increased 7.3% to $651.5 million, with a GAAP net loss of $29 million, or $0.44 per share. Cash and equivalents totaled $327.8 million with no debt. The company has provided a 2023 revenue guidance of $620 million to $670 million amid challenging market conditions.

Positive

• Full year revenue grew 7.3% to $651.5 million.
• Non-GAAP operating income improved to $13.5 million in 2022 from an operating loss in 2021.
• Adjusted EBITDA for 2022 was $36.1 million, up from $22.6 million in 2021.
• Cash and equivalents stand at $327.8 million, ensuring financial stability.

Negative

• Fourth quarter revenue decreased 4.6% year-over-year.
• GAAP net loss of $29 million for the full year, greater than prior year's loss.
• Planned inventory build caused cash used in operations of $75.4 million.

• Fourth quarter revenue of $159.3 million, 4.6% lower versus fourth quarter 2021 but up 1.7% at constant currency and adjusted for divestitures
• Fourth quarter GAAP net loss of $2.4 million, or $0.04 per diluted share, and non-GAAP net income of $4.6 million, or $0.07 per diluted share
• Full year revenue of $651.5 million, 7.3% higher versus 2021 and up 11.4% at constant currency and adjusted for divestitures
• Full year GAAP net loss of $29.0 million, or $0.44 per diluted share, and non-GAAP net income of $10.3 million, or $0.15 per diluted share
• $327.8 million cash and equivalents and no debt at year end 2022

MINNEAPOLIS & REHOVOT, Israel--(BUSINESS WIRE)-- Stratasys Ltd. (Nasdaq: SSYS), a leader in polymer 3D printing solutions, today announced financial results for the fourth quarter and full year 2022.

Dr. Yoav Zeif, Stratasys’ Chief Executive Officer stated, “Stratasys grew 11.4% in 2022, adjusting for divestitures and currency impacts, while delivering our sixth consecutive quarter of profitability on an adjusted basis against an increasingly challenging macroeconomic environment. Strong execution by our team and a relentless focus on controlling costs contributed to our effective efforts to overcome these challenges.”

Dr. Zeif continued, “We are encouraged by the strong future demand indicators from our customers for our additive manufacturing polymer systems and consumables. Our high engagement levels across our innovative products, along with the strength of our customer service revenues, provide us with the confidence that once capital spending restrictions are lifted and utilization levels increase, our efforts will be rewarded. With our broad-based technology portfolio and an unmatched go-to-market capability, we are positioned well to gain increased share when macroeconomic headwinds subside. Armed with a strong balance sheet and a disciplined approach to capital allocation, we are well prepared to build on our industry leadership in the coming years.”

Summary - Fourth Quarter 2022 Financial Results Compared to Fourth Quarter 2021:

• Revenue of $159.3 million compared to $167.0 million.
• GAAP gross margin of 43.1%, compared to 43.7%.
• Non-GAAP gross margin of 48.4%, compared to 48.7%.
• GAAP operating income of $1.6 million, compared to an operating loss of $16.2 million.
• Non-GAAP operating income of $5.1 million, compared to non-GAAP operating income of $1.7 million.
• GAAP net loss of $2.4 million, or $0.04 per diluted share, compared to a net loss of $4.8 million, or $0.07 per diluted share.
• Non-GAAP net income of $4.6 million, or $0.07 per diluted share, compared to non-GAAP net income of $0.5 million, or $0.01 per diluted share.
• Adjusted EBITDA of $10.7 million, compared to $7.9 million.
• Planned inventory build resulted in cash used in operations of $18.1 million, compared to cash generated of $4.4 million year over year.

Summary - 2022 Financial Results Compared to 2021:

• Revenue of $651.5 million compared to $607.2 million.
• GAAP gross margin of 42.4%, compared to 42.8%.
• Non-GAAP gross margin of 48.0%, compared to 47.8%.
• GAAP operating loss of $57.2 million, compared to a $79.2 million operating loss.
• Non-GAAP operating income of $13.5 million, compared to a $1.7 million non-GAAP operating loss.
• Adjusted EBITDA of $36.1 million, compared to $22.6 million.
• GAAP net loss of $29.0 million, or ($0.44) per diluted share, compared to a loss of $62.0 million, or ($0.98) per diluted share.
• Non-GAAP net income of $10.3 million, or $0.15 per diluted share, compared to non-GAAP net loss of $4.3 million, or $(0.07) per diluted share.
• Planned inventory build resulted in cash used in operations of $75.4 million, compared to cash provided by operations of $35.8 million.

Non-GAAP Adjustments:
	Quarter Ended December 31,			Year Ended December 31,
Revenue Growth Rates (%) as reported	(4.6	%)		7.3	%
Adjusted Revenue Growth Rates (%) excluding divestitures	(0.3	%)		9.0	%
Adjusted Revenue Growth Rates (%) excluding divestitures and FX effects	1.7	%		11.4	%

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 providing the following outlook for 2023:

• Full year revenue of $620 million to $670 million.
• Sequential quarterly revenue growth, notably higher in the second half
• Based on current logistics and materials costs, full year gross margins of 48.0% to 49.0%, with improved year-over-year growth in the second half of 2023.
• Full year-operating expenses of $290 million to $300 million.
• Full year non-GAAP operating margins of 2.5% to 3.5% with improving profitable contribution through the year.
• GAAP net loss of $78 million to $57 million, or ($1.12) to ($0.83) per diluted share.
• 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.

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 and other expenses of $15 million to $22 million. Non-GAAP guidance includes tax adjustments of $2 million to $3 million on the above non-GAAP items.

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. Fourth Quarter 2022 Webcast and Conference Call Details

The Company plans to webcast its conference call to discuss its fourth quarter 2022 financial results on Thursday, March 2, 2023, at 8:30 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=K6UFH5he

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, 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 are filing with the U.S. Securities and Exchange Commission, or SEC, on or about March 2, 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.

Stratasys Ltd.
Consolidated Balance Sheets
(in thousands, except share data)
		December 31,				December 31,
		2022				2021
ASSETS
Current assets
Cash and cash equivalents		$	150,470			$	243,179
Short-term deposits			177,367				259,000
Accounts receivable, net of allowance for credit losses of $0.9 million and $0.5 million as of December 31, 2022 and December 31, 2021			144,739				129,382
Inventories			194,054				129,147
Prepaid expenses			5,767				6,871
Other current assets			27,823				33,123
Total current assets			700,220				800,702
Non-current assets
Property, plant and equipment, net			195,063				203,295
Goodwill			64,953				65,144
Other intangible assets, net			121,402				152,244
Operating lease right-of-use assets			18,122				14,651
Long-term investments			141,610				28,667
Other non-current assets			18,420				12,519
Total non-current assets			559,570				476,520
Total assets		$	1,259,790			$	1,277,222
LIABILITIES AND EQUITY
Current liabilities
Accounts payable		$	72,921			$	51,976
Accrued expenses and other current liabilities			45,912				55,358
Accrued compensation and related benefits			34,432				44,684
Deferred revenues - short term			50,220				51,174
Operating lease liabilities - short term			7,169				7,276
Total current liabilities			210,654				210,468
Non-current liabilities
Deferred revenues - long term			25,214				21,133
Deferred income taxes - long term			5,638				7,341
Operating lease liabilities - long term			10,670				7,693
Contingent consideration - long term			23,707				53,478
Other non-current liabilities			24,475				21,095
Total non-current liabilities			89,704				110,740
Total liabilities			300,358				321,208
Equity
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands
shares; 67,086 thousands shares and 65,677 thousands shares issued			187				182
and outstanding at December 31, 2022 and December 31, 2021, respectively			3,048,915				3,012,481
Additional paid-in capital
Accumulated other comprehensive loss			(12,818	)			(8,771	)
Accumulated deficit			(2,076,852	)			(2,047,878	)
Total equity			959,432				956,014
Total liabilities and equity		$	1,259,790			$	1,277,222

Stratasys Ltd.
Consolidated Statements of Operations
(in thousands, except per share data)
		Three Months Ended December 31,								Twelve Ended December 31,
		2022				2021				2022				2021
		(unaudited)				(unaudited)
Net sales
Products		$	111,197			$	118,040			$	452,124			$	417,557
Services			48,062				48,976				199,359				189,662
			159,259				167,016				651,483				607,219
Cost of sales
Products			58,180				59,470				234,601				210,941
Services			32,431				34,503				140,415				136,200
			90,611				93,973				375,016				347,141
Gross profit			68,648				73,043				276,467				260,078
Operating expenses
Research and development, net			21,387				22,620				92,876				88,303
Selling, general and administrative			45,665				66,584				240,750				250,937
			67,052				89,204				333,626				339,240
Operating loss			1,596				(16,161	)			(57,159	)			(79,162	)
Gain from deconsolidation of subsidiary			-				-				39,136				-
Gain from step acquisition			-				14,400				-				14,400
Financial income (expense), net			2,309				(692	)			229				(2,075	)
Income (loss) before income taxes			3,905				(2,453	)			(17,794	)			(66,837	)
Income tax benefit (expense)			(2,658	)			(2,103	)			(5,454	)			3,906
Share in profit (losses) of associated companies			(3,637	)			(280	)			(5,726	)			949
Net income (loss)		$	(2,390	)		$	(4,836	)		$	(28,974	)		$	(61,982	)
Net income (loss) per share
Basic		$	(0.04	)		$	(0.07	)		$	(0.44	)		$	(0.98	)
Diluted		$	(0.04	)		$	(0.07	)		$	(0.44	)		$	(0.98	)
Weighted average ordinary shares outstanding
Basic			66,908				65,196				66,491				63,471
Diluted			66,908				65,196				66,491				63,471

			Three Months Ended December 31,
			2022				Non-GAAP				2022			2021				Non-GAAP				2021
			GAAP				Adjustments				Non-GAAP			GAAP				Adjustments				Non-GAAP
			U.S. dollars and shares in thousands (except per share amounts)
		Gross profit (1)	$	68,648			$	8,423			$	77,071		$	73,043			$	8,255			$	81,298
		Operating income (loss) (1,2)		1,596				3,456				5,052			(16,161	)			17,822				1,661
		Net income (loss) (1,2,3)		(2,390	)			6,940				4,550			(4,836	)			5,355				519
		Net income (loss) per diluted share (4)	$	(0.04	)		$	0.11			$	0.07		$	0.07			$	0.08			$	0.01
(1)		Acquired intangible assets amortization expense						7,297											6,024
		Non-cash stock-based compensation expense						1,041											866
		Restructuring and other related costs						85											1,185
		Impairment charges						-											180
								8,423											8,255
(2)		Acquired intangible assets amortization expense						2,370											2,280
		Non-cash stock-based compensation expense						7,664											6,971
		Restructuring and other related costs						874											373
		Revaluation of investments						560											(1,861	)
		Contingent consideration						(19,490	)										(20	)
		Other expenses						3,056											1,824
								(4,967	)										9,568
								3,456											17,822
(3)		Corresponding tax effect						1,770											1,906
		Equity method related amortization, divestments and impairments						1,714											27
		Gain from obtaining control						-											(14,400	)
							$	6,940										$	5,355
(4)		Weighted average number of ordinary shares outstanding - Diluted		66,908								67,231			65,196								66,820

			Twelve Months Ended December 31,
			2022				Non-GAAP				2022			2021				Non-GAAP				2021
			GAAP				Adjustments				Non-GAAP			GAAP				Adjustments				Non-GAAP
			U.S. dollars and shares in thousands (except per share amounts)
		Gross profit (1)	$	276,467			$	36,016			$	312,483		$	260,078			$	30,447			$	290,525
		Operating income (loss) (1,2)		(57,159	)			70,691				13,532			(79,162	)			77,479				(1,683	)
		Net income (loss) (1,2,3)		(28,974	)			39,235				10,261			(61,982	)			57,639				(4,343	)
		Net income (loss) per diluted share (4)	$	(0.44	)		$	0.59			$	0.15		$	(0.98	)		$	0.91			$	(0.07	)
(1)		Acquired intangible assets amortization expense						28,158											22,392
		Non-cash stock-based compensation expense						4,082											3,093
		Restructuring and other related costs						(174	)										1,642
		Impairment charges						3,949											3,320
								36,016											30,447
(2)		Acquired intangible assets amortization expense						8,950											8,878
		Non-cash stock-based compensation expense						29,378											27,885
		Impairment of long-lived assets						-											1,447
		Restructuring and other related costs						2,737											2,743
		Revaluation of investments						3,777											(1,303	)
		Contingent consideration						(18,293	)										570
		Other expenses						8,126											6,812
								34,676											47,032
								70,691											77,479
(3)		Corresponding tax effect						4,988											(864	)
		Equity method related amortization, divestments and impairments						2,285											(4,576	)
		Finance expenses						406											-
		Gain from deconsolidation of subsidiary						(39,136	)
		Gain from obtaining control																	(14,400	)
							$	39,235										$	57,639
(4)		Weighted average number of ordinary shares outstanding - Diluted		66,491								67,068			63,471								63,471

Stratasys Ltd.
Reconciliation of GAAP to Non-GAAP Forward Looking Guidance
Fiscal Year 2023
(in millions, except per share data)
GAAP net loss				($78) to ($57)
Adjustments
	Stock-based compensation expense			$28 to $30
	Intangible assets amortization expense			$30 to $32
	Reorganization and other			$15 to $22
	Tax expense (benefit) related to Non-GAAP adjustments			$2 to $3
Non-GAAP net income				$9 to $17
GAAP loss per share				($1.12) to ($0.83)
Non-GAAP diluted earnings per share				$0.12 to $0.24

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230302005293/en/

Yonah Lloyd

CCO, VP Investor Relations

Yonah.Lloyd@stratasys.com

Source: Stratasys Ltd.

FAQ

What were Stratasys' fourth quarter 2022 earnings results?

Stratasys reported a fourth quarter 2022 revenue of $159.3 million, with a GAAP net loss of $2.4 million or $0.04 per diluted share.

How did Stratasys perform in the full year 2022?

Stratasys achieved a full year revenue of $651.5 million, a 7.3% increase over 2021, with a GAAP net loss of $29 million.

What is Stratasys' outlook for 2023?

Stratasys expects 2023 revenue between $620 million and $670 million, along with improving gross margins.

What were the major financial metrics for Stratasys in 2022?

In 2022, Stratasys reported an adjusted EBITDA of $36.1 million and non-GAAP net income of $10.3 million.