Stratasys Releases Third Quarter 2022 Financial Results

Rhea-AI Summary

Stratasys Ltd. (SSYS) reported a 2.0% rise in consolidated revenues for Q3 2022, totaling $162.2 million. Adjusted revenue increased by 7.8% on a constant currency basis. The company achieved a GAAP net income of $18.7 million ($0.28 per share) and improved non-GAAP operating income to $4.5 million. Despite an operating cash loss of $18.4 million due to inventory increases, the company maintains a solid cash position with $348.7 million and no debt. Full-year 2022 revenue guidance is updated to $648-$652 million, reflecting about 10% growth post-divestiture of MakerBot.

Positive

• Q3 2022 consolidated revenue rose 2.0% to $162.2 million.
• Non-GAAP operating income improved to $4.5 million from $1.8 million.
• Achieved five consecutive quarters of positive earnings.
• Full-year revenue guidance adjusted to $648-$652 million, representing approximately 10% growth.

Negative

• GAAP operating loss of $15.6 million, though improved from $21.9 million the prior year.
• Cash used in operating activities was $18.4 million, indicating liquidity concerns.
• Full-year net loss projected between $48 million and $39 million.

• Consolidated Revenues grew 2.0%, and increased 7.8% as adjusted for divestitures and on a constant currency basis
• Third quarter GAAP net income of $18.7 million, or $0.28 per diluted share, and non-GAAP net income of $3.3 million, or $0.05 per diluted share
• $348.7 million of cash and cash equivalents and no debt at quarter end
• Updates 2022 full-year outlook reflecting approximately 10% revenue growth over 2021 adjusted for divestitures

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 2022.

Third Quarter 2022 Financial Results Compared to Third Quarter 2021:

• Consolidated revenue of $162.2 million, up 2.0% compared to $159.0 million; adjusted revenue excluding divestitures and on a constant currency basis increased 7.8%.
• GAAP gross margin of 43.6% versus 42.9%.
• Non-GAAP gross margin of 48.5%, compared to 48.2%.
• GAAP operating loss of $15.6 million, compared to a GAAP operating loss of $21.9 million.
• Non-GAAP operating income of $4.5 million, versus non-GAAP operating income of $1.8 million.
• GAAP net income of $18.7 million, or $0.28 per diluted share, compared to net loss of $18.1 million, or ($0.28) per diluted share.
• Non-GAAP net income of $3.3 million, or $0.05 per diluted share, versus non-GAAP net income of $0.5 million, or $0.01 per diluted share.
• Adjusted EBITDA of $9.9 million, compared to $7.8 million.
• $18.4 million of cash used by, compared to $3.0 million of cash generated from, operating activities, reflecting cash use for a continued augmentation of inventories.

Dr. Yoav Zeif, Stratasys’ Chief Executive Officer, said “We delivered our highest third quarter revenue in seven years. This was driven by 18.9% growth in our systems, excluding divestitures and on a constant currency basis. We have now achieved five consecutive quarters of positive earnings, demonstrating our unique ability to generate profitable growth even while navigating a challenging global economic backdrop that includes prolonged customer sales cycles and delayed consumables purchases.”

“As the leading provider of comprehensive polymer additive manufacturing products, software, and services solutions, we continue to enhance our core competencies and evolve our offerings to outpace our customers’ expanding needs. We are excited about the significant expansion of our materials portfolio across multiple technologies, which we believe will drive higher-margin consumables sales in the coming years. In addition, as part of our growth strategy we will keep selectively adding and incubating complementary new technology-driven businesses that we expect will spur incremental growth in the future. Stratasys is ideally positioned to provide the necessary solutions to catalyze our customers’ ongoing transformation from prototyping to additive manufacturing at scale while creating long-term value for all of our shareholders,” Dr. Zeif concluded.

Financial Outlook:

Based on current market conditions, and assuming that the collective impact of global supply chain costs, rising interest rates, currency risk and inflation does not further worsen economic activity, the Company is updating its outlook for 2022 to include the impact of $17 million from its MakerBot divestiture as follows:

• Full year 2022 revenue of $648 million to $652 million, which includes the impact of approximately $13 million to reflect the anticipated impact of customer-related delays in the purchasing of systems and materials due to anticipated, ongoing economic uncertainty as well as ongoing pressure on foreign exchange rates. The updated outlook represents approximately 10% full year growth over 2021 after adjusting for the MakerBot divestiture.
• Full-year 2022 gross margins flat to slightly higher compared to full-year 2021, based on current logistics and materials costs.
• Full year-operating expenses $5 million to $10 million higher than 2021, primarily due to the divestiture of MakerBot and by improved efficiencies.
• Full year non-GAAP operating margins slightly above 2%.
• GAAP net loss of $48 million to $39 million, or ($0.72) to ($0.59) per diluted share.
• Non-GAAP net income of $6 million to $8 million, or $0.09 to $0.12 per diluted share.
• Adjusted EBITDA of $34 million to $37 million.
• Capital expenditures of $15 million to $20 million.

Non-GAAP earnings outlook excludes $37 million to $38 million of anticipated amortization of intangible assets, $33 million to $35 million of non-cash share-based compensation expense, $39 million gain from deconsolidation of MakerBot, and reorganization and other expenses of $14 million to $16 million. Non-GAAP outlook includes tax adjustments of $3 million to $5 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 this press release and slide presentation, with itemized detail concerning the non-GAAP financial measures.

Stratasys Ltd. Third Quarter 2022 Webcast and Conference Call Details:

The Company plans to webcast its conference call to discuss its third quarter 2022 financial results on Thursday, November 10, 2022, at 8:30 a.m. (ET).

The investor conference call will be available via live webcast on the Stratasys website at investors.stratasys.com, or directly at the following web address:

https://event.choruscall.com/mediaframe/webcast.html?webcastid=Aau6uFJK

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 Stratasys’ projected future financial performance, including the financial guidance concerning its expected results for 2022 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 degree of our success at locating and acquiring additional value-enhancing, inorganic technology that furthers our business plan to lead in the realm of polymers; the adverse impact that recent global interruptions, delays and increased costs related to freight carriers and other suppliers (including due to the Russian invasion of Ukraine) are having on our supply chain and distribution network, and, consequently, our ability to successfully sell both our existing and newly-launched 3D printing products; the strength and duration of, and degree of recovery from and resilience to, current adverse macro-economic conditions that are, in part, by-products of the COVID-19 pandemic, including inflation and rising interest rates, which are having, and may continue to have, significant consequences for our operations, financial position, cash flows, and those of our customers and suppliers; 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, 2021, which we filed with the U.S. Securities and Exchange Commission, or SEC, on February 24, 2022 (the “2021 Annual Report”). Readers are urged to carefully review and consider the various disclosures made throughout our 2021 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 2022, which are furnished to the SEC throughout 2022, 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 exclude 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 currency-related fluctuations, 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 factors eliminated in 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,
		2022				2021
ASSETS
Current assets
Cash and cash equivalents		$	150,672			$	243,179
Short-term deposits			198,056				259,000
Accounts receivable, net of allowance for credit losses of $0.7 million and $0.5 million as of September 30, 2022 and December 31, 2021			140,258				129,382
Inventories			170,434				129,147
Prepaid expenses			8,146				6,871
Other current assets			26,838				33,123
Total current assets			694,404				800,702
Non-current assets
Property, plant and equipment, net			194,214				203,295
Goodwill			64,844				65,144
Other intangible assets, net			129,682				152,244
Operating lease right-of-use assets			19,010				14,651
Long-term investments			143,928				28,667
Other non-current assets			21,309				12,519
Total non-current assets			572,987				476,520
Total assets		$	1,267,391			$	1,277,222
LIABILITIES AND EQUITY
Current liabilities
Accounts payable		$	67,957			$	51,976
Accrued expenses and other current liabilities			55,152				55,358
Accrued compensation and related benefits			34,862				44,684
Deferred revenues - short term			48,735				51,174
Operating lease liabilities - short term			6,977				7,276
Total current liabilities			213,683				210,468
Non-current liabilities
Deferred revenues - long term			23,581				21,133
Deferred income taxes - long term			4,084				7,341
Operating lease liabilities - long term			11,738				7,693
Contingent consideration - long term			38,551				53,478
Other non-current liabilities			27,028				21,095
Total non-current liabilities			104,982				110,740
Total liabilities			318,665				321,208
Equity
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands
shares; 66,784 thousands shares and 65,677 thousands shares issued
and outstanding at September 30, 2022 and December 31, 2021, respectively			186				182
Additional paid-in capital			3,037,225				3,012,481
Accumulated other comprehensive loss			(14,223	)			(8,771	)
Accumulated deficit			(2,074,462	)			(2,047,878	)
			948,726				956,014
Total liabilities and equity		$	1,267,391			$	1,277,222

Stratasys Ltd.
Consolidated Statements of Operations
(in thousands, except per share data)
	Three Months Ended September 30,								Nine Months Ended September 30,
	2022				2021				2022				2021
	(unaudited)				(unaudited)				(unaudited)				(unaudited)
Net sales
Products	$	112,133			$	108,888			$	340,927			$	299,517
Services		50,059				50,121				151,297				140,686
		162,192				159,009				492,224				440,203
Cost of sales
Products		55,916				54,820				176,421				151,471
Services		35,527				36,001				107,984				101,697
		91,443				90,821				284,405				253,168
Gross profit		70,749				68,188				207,819				187,035
Operating expenses
Research and development, net		23,145				22,645				71,489				65,683
Selling, general and administrative		63,230				67,462				195,085				184,353
		86,375				90,107				266,574				250,036
Operating loss		(15,626	)			(21,919	)			(58,755	)			(63,001	)
Gain from deconsolidation of subsidiary		39,136				-				39,136				-
Financial income (expense), net		452				(634	)			(2,080	)			(1,383	)
Income (loss) before income taxes		23,962				(22,553	)			(21,699	)			(64,384	)
Income tax expense (benefit)		3,298				699				2,796				6,009
Share in profit (losses) of associated companies		(1,915	)			3,778				(2,089	)			1,229
Net income (loss)	$	18,749			$	(18,076	)		$	(26,584	)		$	(57,146	)
Net income (loss) per share
Basic	$	0.28			$	(0.28	)		$	(0.40	)		$	(0.91	)
Diluted	$	0.28			$	(0.28	)		$	(0.40	)		$	(0.91	)
Weighted average ordinary shares outstanding
Basic		66,772				65,018				66,356				62,888
Diluted		67,038				65,018				66,356				62,888

			Three Months Ended June 30,
			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)	$	70,749			$	7,990			$	78,739		$	68,188			$	8,507			$	76,695
		Operating income (loss) (1,2)		(15,626	)			20,149				4,523			(21,919	)			23,739				1,820
		Net income (loss) (1,2,3)		18,749				(15,423	)			3,326			(18,076	)			18,592				516
		Net income (loss) per diluted share (4)	$	0.28			$	(0.23	)		$	0.05		$	(0.28	)		$	0.28			$	0.01
(1)		Acquired intangible assets amortization expense						6,941											5,495
		Non-cash stock-based compensation expense						1,061											804
		Restructuring and other related costs						(12	)										67
		Impairment charges						-											2,141
								7,990											8,507
(2)		Acquired intangible assets amortization expense						2,138											2,205
		Non-cash stock-based compensation expense						6,330											7,154
		Impairment of long-lived assets						-											1,242
		Restructuring and other related costs						1,309											210
		Revaluation of investments						901											2,025
		Contingent consideration						394											197
		Other expenses						1,087											2,199
								12,158											15,232
								20,149											23,739
(3)		Gain from deconsolidation of subsidiary						(39,136	)										-
		Corresponding tax effect and other expenses						3,564											(5,147	)
							$	(15,423	)									$	18,592
(4)		Weighted average number of ordinary shares outstanding - Diluted		67,038								67,038			65,018								65,950

			Six Months Ended June 30,
			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)	$	207,819			$	27,593			$	235,412		$	187,035			$	22,192			$	209,227
		Operating income (loss) (1,2)		(58,755	)			67,235				8,480			(63,001	)			59,657				(3,344	)
		Net income (loss) (1,2,3)		(26,584	)			32,295				5,711			(57,146	)			52,284				(4,862	)
		Net income (loss) per diluted share (4)	$	(0.40	)		$	0.49			$	0.09		$	(0.91	)		$	0.83			$	(0.08	)
(1)		Acquired intangible assets amortization expense						20,861											16,368
		Non-cash stock-based compensation expense						3,041											2,226
		Restructuring and other related costs						(174	)										1,457
		Impairment charges						3,865											2,141
								27,593											22,192
(2)		Acquired intangible assets amortization expense						6,581											6,598
		Non-cash stock-based compensation expense						21,714											20,914
		Impairment of long-lived assets						-											2,664
		Restructuring and other related costs						1,864											2,370
		Revaluation of investments						3,217											556
		Contingent consideration						1,197											590
		Other expenses						5,069											3,773
								39,642											37,465
								67,235											59,657
(3)		Gain from deconsolidation of subsidiary						(39,136	)										-
		Corresponding tax effect and other expenses						4,196											(7,373	)
							$	32,295										$	52,284
(4)		Weighted average number of ordinary shares outstanding - Diluted		66,356								67,007			62,888								62,888

Stratasys Ltd.
Reconciliation of GAAP to Non-GAAP Forward Looking Guidance
Fiscal Year 2022
(in millions, except per share data)
GAAP net loss		($48) to ($39)
Adjustments
	Stock-based compensation expense	$33 to $35
	Intangible assets amortization expense	$37 to $38
	Reorganization and other	$14 to $16
	Tax expense (benefit) related to Non-GAAP adjustments	$3 to $5
Non-GAAP net income		$6 to $8
GAAP loss per share		($0.72) to ($0.59)
Non-GAAP diluted earnings per share		$0.09 to $0.12

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221110005307/en/

Yonah Lloyd

CCO, VP Investor Relations

Yonah.Lloyd@stratasys.com

Source: Stratasys Ltd.

FAQ

What is Stratasys Ltd's Q3 2022 revenue growth rate?

Stratasys Ltd. reported a 2.0% increase in consolidated revenues for Q3 2022.

What is the projected revenue for Stratasys in 2022?

Stratasys updated its revenue guidance for 2022 to between $648 million and $652 million.

How much cash does Stratasys have as of Q3 2022?

Stratasys reported $348.7 million in cash and cash equivalents with no debt.

What was Stratasys's GAAP net income for Q3 2022?

Stratasys reported a GAAP net income of $18.7 million, or $0.28 per diluted share.

What are the operating income figures for Stratasys in Q3 2022?

Stratasys reported a non-GAAP operating income of $4.5 million for Q3 2022.