Stratasys Releases Third Quarter 2021 Financial Results

Rhea-AI Summary

Stratasys Ltd. (NASDAQ: SSYS) reported Q3 2021 revenue of $159.0 million, a 24.3% increase from Q3 2020. GAAP net loss stood at $18.1 million, or $0.28 per diluted share, an improvement from a net loss of $405.1 million a year prior. The company secured significant contracts with the US Navy and a major OEM for part manufacturing. Cash from operations was $3.0 million, with $519.9 million in cash reserves and no debt. Stratasys retains a positive outlook, forecasting 16% revenue growth in Q4 2021 compared to the previous year.

Positive

• Revenue increased 24.3% year-over-year to $159.0 million.
• Secured two major contracts for end-use part production.
• Achieved a gross margin of 42.9%, up from 38.9% year-over-year.
• Cash from operations improved to $3.0 million.
• Anticipates 16% revenue growth in Q4 2021.

Negative

• GAAP net loss of $18.1 million, despite revenue growth.
• Operating expenses expected to rise by approximately $36 million for the full year.

• Revenue of $159.0 million
• GAAP net loss of $18.1 million, or $0.28 per diluted share, and non-GAAP net income of $0.5 million, or $0.01 per diluted share
• Generated $3.0 million of cash from operations
• Secured two large, end-use part manufacturing contracts with the US Navy and a leading, global OEM
• $519.9 million cash, cash equivalents and short-term deposits, and no debt at quarter end

MINNEAPOLIS & REHOVOT, Israel--(BUSINESS WIRE)-- Stratasys Ltd. (NASDAQ: SSYS), a leader in polymer 3D printing solutions, today announced financial results for the third quarter of 2021.

Third Quarter 2021 Financial Results Summary Compared to Third Quarter 2020:

• Revenue of $159.0 million compared to $127.9 million.
• GAAP gross margin was 42.9%, compared to 38.9%.
• Non-GAAP gross margin was 48.2%, compared to 46.8%.
• GAAP operating loss was $21.9 million, compared to an operating loss of $404.3 million.
• Non-GAAP operating income was $1.8 million, compared to an operating loss of $1.0 million.
• GAAP net loss was $18.1 million, or $0.28 per diluted share, compared to a net loss of $405.1 million, or $7.35 per diluted share.
• Non-GAAP net income of $0.5 million, or $0.01 per diluted share, compared to a net loss of $3.0 million, or $0.05 per diluted share.
• Adjusted EBITDA was $7.8 million, compared to $5.2 million.
• Cash generated from operations of $3.0 million, compared to $2.6 million.

Dr. Yoav Zeif, Stratasys’ Chief Executive Officer stated, “We are at an inflection point for additive manufacturing. Industries appreciate the many benefits of our technologies and are increasingly adding 3D printing to their production plans, driving the shift from prototyping to mass production. Our third quarter was highlighted by revenue growth of 24.3% and systems sales growth of 34.7% year-over-year, with contributions across all regions and all business lines. We achieved a number of important manufacturing-focused milestones, including the securing of contracts with the US Navy and a major international OEM, specifically for end-use part production.”

Dr. Zeif continued, “Our vision of becoming the first choice for polymer 3D printing solutions with a focus on manufacturing continues to progress. We are executing on that goal by leveraging our outstanding reputation for excellence in both technology and service to help customers achieve true scaled production of end use parts. We expect the ongoing introduction of new product initiatives to further accelerate growth, complimented by our now 100% ownership of Xaar 3D and the new SAF technology, along with our recently announced open and enterprise-ready software platform that integrates with Industry 4.0 infrastructure and applications. We will continue to invest across our portfolio to further grow our sales and drive a return to sustained profitability.”

Financial Outlook:

Based on current market conditions and assuming that the impacts related to the pandemic or global supply chain constraints do not impede the economic environment further, the Company is reiterating and updating its outlook as follows:

• Fourth quarter 2021 revenue approximately 16% higher year-over-year, driven by continued growth in systems relative to Q4 of both 2020 and 2019.
• Full year-operating expenses expected to rise approximately $36 million compared to 2020, primarily due to fully owning Xaar 3D and higher operating costs associated with higher revenues.
• Full year capital expenditures anticipated to range from $24 million to $30 million.
• Longer term, the Company continues to expect significant leverage benefit from its investments as revenue growth should start to accelerate in 2022 and beyond.

Stratasys Ltd. Third Quarter 2021 Webcast and Conference Call Details

The Company plans to webcast its conference call to discuss its third quarter 2021 financial results on Thursday, November 4, 2021 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://78449.themediaframe.com/dataconf/productusers/ssys/mediaframe/47128/indexl.html.

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 and healthcare. 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 2021 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 acquisitions or investments in new businesses, technologies, products or services; the strength and duration of, and degree of recovery from, the COVID-19 pandemic in the markets in which we operate; 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 (including risks related to the impact of coronavirus on our supply chain and business); 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, 2020, which we filed with the U.S. Securities and Exchange Commission, or SEC, on March 1, 2021 (the “2020 Annual Report”). Readers are urged to carefully review and consider the various disclosures made throughout our 2020 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 2021, which have been furnished to the SEC throughout 2021 (including on or about the date hereof), 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, 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
(Unaudited)
(in thousands, except share data)
		September 30,				December 31,
		2021				2020
ASSETS
Current assets
Cash and cash equivalents		$	332,871			$	272,092
Short-term deposits			187,000				27,000
Accounts receivable, net of allowance for credit losses of $0.7 and $0.9 million as of September 30, 2021 and December 31, 2020			121,848				106,068
Inventories			119,925				131,672
Prepaid expenses			8,634				6,717
Other current assets			27,317				16,943
Total current assets			797,595				560,492
Non-current assets
Property, plant and equipment, net			199,668				201,232
Goodwill			39,750				35,694
Other intangible assets, net			117,010				131,569
Operating lease right-of-use assets			15,624				21,298
Other non-current assets			58,365				39,717
Total non-current assets			430,417				429,510
Total assets		$	1,228,012			$	990,002
LIABILITIES AND EQUITY
Current liabilities
Accounts payable		$	48,292			$	16,987
Accrued expenses and other current liabilities			30,875				31,061
Accrued compensation and related benefits			36,983				25,659
Deferred revenues - short term			49,104				49,165
Operating lease liabilities - short term			7,514				9,282
Total current liabilities			172,768				132,154
Non-current liabilities
Deferred revenues - long term			17,980				14,227
Operating lease liabilities - long term			8,353				12,567
Contingent consideration			40,589				37,400
Other non-current liabilities			37,869				34,059
Total non-current liabilities			104,791				98,253
Total liabilities			277,559				230,407
Redeemable non-controlling interests			-				227
Equity
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands shares; 65,467 thousands shares and 56,617 thousands shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively			182				155
Additional paid-in capital			3,001,685				2,753,955
Accumulated other comprehensive loss			(8,372	)			(8,846	)
Accumulated deficit			(2,043,042	)			(1,985,896	)
Total equity			950,453				759,368
Total liabilities and equity		$	1,228,012			$	990,002

Stratasys Ltd.
Consolidated Statements of Operations
(in thousands, except per share data)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020
		(unaudited)				(unaudited)				(unaudited)				(unaudited)
Net sales
Products		$	108,888			$	83,548			$	299,517			$	240,597
Services			50,121				44,344				140,686				137,825
			159,009				127,892				440,203				378,422
Cost of sales
Products			54,820				47,339				151,471				126,556
Services			36,001				30,784				101,697				98,491
			90,821				78,123				253,168				225,047
Gross profit			68,188				49,769				187,035				153,375
Operating expenses
Research and development, net			22,645				19,562				65,683				65,059
Selling, general and administrative			67,462				48,343				184,353				155,630
Goodwill impairment			-				386,154				-				386,154
			90,107				454,059				250,036				606,843
Operating loss			(21,919	)			(404,290	)			(63,001	)			(453,468	)
Financial expenses, net			(634	)			(167	)			(1,383	)			(847	)
Loss before income taxes			(22,553	)			(404,457	)			(64,384	)			(454,315	)
Income tax benefit			699				343				6,009				2,250
Share in profit (loss) of associated companies			3,778				(952	)			1,229				(2,740	)
Net loss			(18,076	)			(405,066	)			(57,146	)			(454,805	)
Net loss attributable to non-controlling interests			-				(4	)			-				(54	)
Net loss attributable to Stratasys Ltd.		$	(18,076	)		$	(405,062	)		$	(57,146	)		$	(454,751	)
Net loss per ordinary share attributable to Stratasys Ltd.
Basic		$	(0.28	)		$	(7.35	)		$	(0.91	)		$	(8.29	)
Diluted		$	(0.28	)		$	(7.35	)		$	(0.91	)		$	(8.29	)
Weighted average ordinary shares outstanding
Basic			65,018				55,086				62,888				54,851
Diluted			65,018				55,086				62,888				54,851

				Three Months Ended September 30,
				2021				Non-GAAP				2021			2020				Non-GAAP				2020
				GAAP				Adjustments				Non-GAAP			GAAP				Adjustments				Non-GAAP
				U.S. dollars and shares in thousands (except per share amounts)
		Gross profit (1)		$	68,188			$	8,507			$	76,695		$	49,769			$	10,036			$	59,805
		Operating income (loss) (1,2)			(21,919	)			23,739				1,820			(404,290	)			403,268				(1,022	)
		Net income (loss) attributable to Stratasys Ltd. (1,2,3)			(18,076	)			18,592				516			(405,061	)			402,050				(3,011	)
		Net income (loss) per diluted share attributable to Stratasys Ltd. (4)		$	(0.28	)		$	0.28			$	0.01		$	(7.35	)		$	7.30			$	(0.05	)
(1)		Acquired intangible assets amortization expense							5,495											4,065
		Non-cash stock-based compensation expense							804											524
		Restructuring and other related costs							67											191
		Impairment charges							2,141											5,256
									8,507											10,036
(2)		Acquired intangible assets amortization expense							2,205											2,162
		Non-cash stock-based compensation expense							7,154											4,352
		Goodwill impairment							-											386,154
		Impairment of long-lived assets							1,242											-
		Restructuring and other related costs							210											34
		Revaluation of investments							2,025											-
		Contingent consideration							197											-
		Legal and other expenses							2,199											530
									15,232											393,232
									23,739											403,268
(3)		Corresponding tax effect							(376	)										(1,296	)
		Equity method related amortization, divestments and impairments							(4,771	)										78
								$	18,592										$	402,050
(4)		Weighted average number of ordinary shares outstanding- Diluted			65,018								65,950			55,086								55,086

				Nine Months Ended September 30,
				2021				Non-GAAP				2021				2020				Non-GAAP				2020
				GAAP				Adjustments				Non-GAAP				GAAP				Adjustments				Non-GAAP
				U.S. dollars and shares in thousands (except per share amounts)
		Gross profit (1)		$	187,035			$	22,192			$	209,227			$	153,375			$	24,062			$	177,437
		Operating income (loss) (1,2)		$	(63,001	)		$	59,657			$	(3,344	)		$	(453,468	)		$	435,987			$	(17,481	)
		Net income (loss) attributable to Stratasys Ltd. (1,2,3)		$	(57,146	)		$	52,284			$	(4,862	)		$	(454,751	)		$	433,821			$	(20,930	)
		Net income (loss) per diluted share attributable to Stratasys Ltd. (4)		$	(0.91	)		$	0.83			$	(0.08	)		$	(8.29	)		$	7.91			$	(0.38	)
(1)		Acquired intangible assets amortization expense							16,368												12,196
		Non-cash stock-based compensation expense							2,226												1,424
		Impairment charges							2,141												5,256
		Restructuring and other related costs							1,457												5,187
									22,192												24,062
(2)		Acquired intangible assets amortization expense							6,598												6,430
		Non-cash stock-based compensation expense							20,914												14,470
		Goodwill impairment							-												386,154
		Impairment of long-lived assets							2,664												-
		Restructuring and other related costs							2,370												3,863
		Revaluation of investments							556												-
		Contingent consideration							590												-
		Legal and other expenses							3,773												1,007
									37,465												411,925
									59,657												435,987
(3)		Corresponding tax effect							(2,770	)											(2,396	)
		Equity method related amortization, divestments and impairments							(4,603	)											230
								$	52,284											$	433,821
(4)		Weighted average number of ordinary shares outstanding- Diluted			62,888								62,888				54,851								54,851

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20211104005134/en/

Yonah Lloyd

CCO, VP Investor Relations

Yonah.Lloyd@stratasys.com

Source: Stratasys Ltd.

FAQ

What were Stratasys's Q3 2021 earnings results?

Stratasys reported Q3 2021 revenues of $159.0 million with a GAAP net loss of $18.1 million.

How does Stratasys's Q3 2021 performance compare to Q3 2020?

The company achieved a 24.3% revenue increase and improved net loss from $405.1 million in Q3 2020.

What is the revenue outlook for Stratasys in Q4 2021?

Stratasys expects approximately 16% revenue growth in Q4 2021 compared to the previous year.

What new contracts did Stratasys secure recently?

Stratasys secured significant contracts with the US Navy and a leading global OEM for part manufacturing.

What is the financial position of Stratasys at the end of Q3 2021?

Stratasys reported $519.9 million in cash reserves and no debt as of the end of Q3 2021.