Core Viewpoint - 3D Systems has experienced a decline in share price by approximately 7.9% since the last earnings report, underperforming the S&P 500, raising questions about its future performance leading up to the next earnings release [1] Financial Performance - In Q2, 3D Systems reported a non-GAAP loss of $0.07 per share, which was better than the Zacks Consensus Estimate of a loss of $0.13, compared to a loss of $0.14 per share in the same quarter last year [2] - The company generated revenues of $94.8 million, reflecting a year-over-year decline of 16.3% and falling short of the consensus mark by 3.56% [3] - Product revenues decreased by 25% year-over-year to $53.8 million, making up 56.7% of total revenues, while services revenues, which contributed 43.3%, declined by 1.2% year-over-year to $41 million [3][4] Segment Performance - Healthcare Solutions revenues fell by 7.9% year-over-year to $45 million, primarily due to reduced purchases in the Dental segment, although the MedTech business grew by 13% year-over-year [6] - Industrial Solutions revenues decreased by 22.6% year-over-year to $49.8 million [7] Profitability Metrics - Non-GAAP gross profit declined by 19.8% year-over-year to $37.2 million, with the gross profit margin decreasing by 170 basis points to 39.2% [7] - Adjusted EBITDA fell by $5.3 million year-over-year, compared to a loss of $12.9 million in the same period last year [7] Balance Sheet Overview - As of June 30, 2025, cash and cash equivalents were $116.4 million, down from $135 million as of March 31, 2025, primarily due to cash used in operating and financing activities [8] - Total debt as of June 30, 2025, was $122.6 million, a decrease from $212.3 million as of March 31, 2025 [8] Analyst Sentiment - There have been no earnings estimate revisions from analysts in the past two months, indicating a period of stability in expectations [9] Investment Scores - 3D Systems holds a Growth Score of B and a Momentum Score of B, but a Value Score of D, placing it in the bottom 40% for value investors, resulting in an aggregate VGM Score of C [10] Future Outlook - The company has a Zacks Rank of 2 (Buy), suggesting an expectation of above-average returns in the coming months [11]

Core Insights - 3D Systems has been awarded a $7.65 million contract by the U.S. Air Force for the development of a Large-format Metal 3D Printer Advanced Technology Demonstrator [1] - This contract is part of a program that 3D Systems has been involved in since 2023, focusing on large-scale, high-speed additive manufacturing capabilities [1][2] - The project will be executed at the company's facilities in San Diego, California, and Rock Hill, South Carolina, with an expected completion date of September 27, 2027 [1] Company Background - 3D Systems has a history of collaboration with the U.S. Department of Defense since 2019, aimed at advancing additive manufacturing technologies [2] - The company has been a pioneer in the 3D printing industry for nearly 40 years, founded by Chuck Hull, and continues to innovate in various high-value markets including aerospace, medical, and durable goods [4] - The company aims to transform manufacturing through its industry-leading 3D printing technologies, materials, and software [4]

Core Points - 3D Systems announced that Jeffrey D. Creech will step down as Chief Financial Officer effective August 29, 2025, and Phyllis Nordstrom has been appointed as Interim CFO [1][2] - Dr. Jeffrey Graves, the president and CEO of 3D Systems, expressed gratitude for Creech's leadership in strategic initiatives and confidence in Nordstrom's capabilities to drive organizational improvements and risk management [2] - Phyllis Nordstrom has a strong background in finance and risk management, having held various leadership roles in companies such as MTS Systems Corporation and PricewaterhouseCoopers, and she has been with 3D Systems since 2021 [2] Company Overview - 3D Systems has been a pioneer in the additive manufacturing industry for nearly 40 years, founded by Chuck Hull, and continues to innovate in 3D printing technologies [3] - The company provides comprehensive solutions in high-value markets including medical, aerospace, transportation, and AI infrastructure, aiming to transform manufacturing for a better future [3]

Industry Overview - 3D Printing, or additive manufacturing, is a transformative technology that creates physical objects from digital designs by layering materials with high precision, significantly changing product design and manufacturing since the 1980s [1] - The technology is gaining traction across various sectors, including healthcare, aerospace, automotive, and consumer goods, due to its ability to produce complex shapes and reduce supply chain costs [3][4] Market Growth - The global 3D Printing market is projected to grow from $24.61 billion in 2024 to $29.29 billion in 2025, and is expected to reach $134.6 billion by 2034, with a CAGR of 18.52% [6] - The healthcare 3D Printing market is anticipated to increase from $1.66 billion in 2024 to $1.96 billion by the end of the year, with projections to exceed $8.71 billion by 2034, reflecting a CAGR of 18% [5] Regional Insights - North America currently leads the 3D Printing market with over 35% share, followed closely by Asia Pacific at 30%, with strong growth expected in the U.S. market at a CAGR of 19.18% from 2025 to 2034 [7] Key Players - Xometry, Proto Labs Inc., and Stratasys, Ltd. are recognized as leaders in the 3D Printing space, capitalizing on the technology's advantages in cost, customization, precision, and sustainability [2] - GE Aerospace has made significant investments in additive manufacturing, enhancing fuel efficiency in its engines by 10% to 15% through 3D-printed components [11][12][13] - PTC's Creo software is designed to optimize product development in 3D printing, offering advanced capabilities for manufacturers [15][16] - Carpenter Technology has developed its additive manufacturing capabilities through strategic acquisitions and is recognized for its versatile metal powder production [17][18][19] - Proto Labs is noted for its rapid prototyping and on-demand production capabilities, generating approximately $84 million in revenue from its 3D Printing services in 2024 [22] - 3D Systems provides a wide range of 3D printing solutions and has made strides in digital dentistry and bioprinting, collaborating on projects with NASA [23][24][25][26]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point, as stocks may lose momentum when their valuations exceed future growth potential [2] - Investing in bargain stocks that have recently shown price momentum can be a safer strategy [3] Group 2: 3D Systems (DDD) Stock Analysis - 3D Systems (DDD) has shown a price increase of 21.5% over the past four weeks, indicating growing investor interest [4] - The stock gained 29% over the past 12 weeks, with a beta of 1.92, suggesting it moves significantly more than the market [5] - DDD has a Momentum Score of B, indicating a favorable time to invest [6] - The stock has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which attract more investors [7] - DDD is trading at a Price-to-Sales ratio of 0.65, suggesting it is undervalued [7] Group 3: Additional Investment Opportunities - Besides DDD, there are other stocks that meet the criteria of "Fast-Paced Momentum at a Bargain" [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles [9]

Core Viewpoint - 3D Systems, a company in the 3D printing sector, has seen a significant stock price increase following a quarterly earnings report, despite mixed financial results [1][2]. Financial Performance - The company's second-quarter revenue was approximately $95 million, which is lower than both the second-quarter 2024 figure of $113 million and the consensus analyst estimate of nearly $104 million [3]. - 3D Systems reported a net income exceeding $104 million, primarily due to the sale of its Geomagic software portfolio for $123 million [5]. - After adjusting for non-recurring items, the non-GAAP net loss was $0.07 per share, an improvement from the $0.14 loss per share in the previous year and better than the average projection of a $0.11 loss [6]. Analyst Sentiment - Following the earnings release, an analyst from Craig-Hallum raised the price target for 3D Systems by 25%, from $2 to $2.50, while maintaining a hold recommendation [7].

Financial Data and Key Metrics Changes - The company reported a year-over-year revenue decline of 16%, primarily due to a rapid drop in customer CapEx spending for new production capacity [7][34] - Consolidated revenue for Q2 was $95 million, down 16% year-over-year, but up 8% sequentially when excluding the divested GeoMagic software business [33][34] - Non-GAAP operating expenses were $47 million, a reduction of 27% year-over-year and 24% sequentially [17][36] - Adjusted EBITDA improved to negative $5 million, a significant improvement from the prior year and quarter [37] Business Line Data and Key Metrics Changes - Industrial Solutions revenues declined 23% year-over-year to $50 million, primarily due to softness in consumer-facing markets [34] - Healthcare Solutions revenues decreased 8% year-over-year to $45 million, with MedTech growing 13% year-over-year and 16% sequentially [35][21] - The MedTech business reached over $80 million in annual revenue last year, growing 13% from the prior year [21] Market Data and Key Metrics Changes - The macro environment remains challenging, with uncertainty around tariffs affecting customer investment decisions [8] - Aerospace and defense revenues nearly doubled from last year, contributing over $30 million annually [26][34] - The dental market is projected to reach $400 million in the U.S. alone, with significant growth expected from new product launches [32][49] Company Strategy and Development Direction - The company is focused on restructuring and efficiency initiatives to align costs with current market conditions, targeting over $85 million in annualized savings by mid-2026 [10][11] - The strategy includes a shift towards profitability first, with a focus on maintaining core R&D investments while reducing operational expenses [10][18] - The company is expanding its MedTech offerings, particularly in orthopedic products and point-of-care services [19][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ongoing challenges in the macro environment but expressed optimism about the stabilization of pressures in sequential quarterly results [8][9] - The company is committed to navigating the current environment while positioning for long-term growth in critical markets such as medtech and aerospace [9][10] - Management emphasized the importance of maintaining a strong portfolio of new products to drive sustainable growth and profitability [18] Other Important Information - The company completed a significant debt transaction and share repurchase, enhancing its balance sheet flexibility [10][40] - The divestiture of the GeoMagic software business is expected to provide clearer financial comparisons moving forward [33] Q&A Session Summary Question: Can you break down the $80 million for MedTech between hardware and services? - The majority is from personalized health services, with printer sales being relatively modest due to tariff influences [45][46] Question: How should we think about the healthcare business moving forward? - The healthcare business now encompasses medtech, dental, and regenerative medicine, with a focus on orthopedic activities [47] Question: What is the outlook for the dental business? - The dental market is expected to grow significantly, with new product launches anticipated to drive revenue [48][50] Question: Can you confirm the gross margins and outlook for the next quarters? - Gross margins were approximately 38%, with expectations for a more normalized performance in the upcoming quarters [52] Question: What is the current state of the macro environment and sales cycles? - The macro environment remains stable, with customers cautious about CapEx spending due to tariff uncertainties [71][72] Question: How does the company plan to manage the dental opportunity amidst macro challenges? - The dental market is expected to be less impacted due to the essential nature of dental products and lower CapEx requirements for printers [76][78] Question: Can you provide an update on the broader markets like aerospace and defense? - Aerospace and defense are seen as exciting markets, with significant growth potential and a sticky customer base [92][95]

Financial Performance - Q2 2025 consolidated revenue was $95 million, reflecting an 8% QoQ rebound excluding Geomagic[29] - Medical Technologies revenue grew 13% YoY and 16% QoQ, representing over $80 million of FY'24 revenues[19] - The company achieved significant OpEx reductions of $17 million YoY and $15 million QoQ[35] - Net income for Q2 2025 was $1044 million, with GAAP EPS at $057[39] - The company expects to exit Q4'25 with operating expenses in the low $40 million range[13] Strategic Initiatives - The company completed the sale of the Geomagic business for nearly $120 million in cash on April 1, 2025[10, 44] - A debt transaction in June permanently retired $88 million in debt and refinanced $92 million through 2030, along with repurchasing 8 million common shares[10, 44] - Cost reduction and profitability improvement initiatives target over $85 million of annualized savings planned through 1H'26[12] Balance Sheet - The company ended the quarter with approximately $134 million in cash, cash equivalents, and restricted cash[44] - As of August 2025, the company's global cash, cash equivalents, and restricted cash amounted to approximately $130 million[44]

Core Viewpoint - 3D Systems reported a quarterly loss of $0.07 per share, outperforming the Zacks Consensus Estimate of a loss of $0.13, marking a 46.15% earnings surprise [1] - The company’s revenues for the quarter were $94.84 million, missing the Zacks Consensus Estimate by 3.56% and down from $113.25 million year-over-year [2] Financial Performance - Over the last four quarters, 3D Systems has surpassed consensus EPS estimates only once [2] - The company has experienced a significant decline in share price, losing approximately 45.7% since the beginning of the year, while the S&P 500 has gained 8.6% [3] Future Outlook - The sustainability of the stock's price movement will depend on management's commentary during the earnings call and the earnings outlook [3][4] - Current consensus EPS estimate for the upcoming quarter is -$0.11 on revenues of $98.89 million, and for the current fiscal year, it is -$0.55 on revenues of $393.19 million [7] Industry Context - The Commercial Printing industry, to which 3D Systems belongs, is currently ranked in the top 26% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact 3D Systems' performance [5][6]

[Part I - Financial Information](index=4&type=section&id=Part%20I%20-%20Financial%20Information) [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited financial statements for Q2 2025 show **$104.4 million** net income, driven by a **$125.7 million** gain from the Geomagic divestiture, despite revenue decline and negative operating cash flow [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, including assets, liabilities, and equity, as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $116,358 | $171,324 | | Total current assets | $390,122 | $428,830 | | Total assets | $587,844 | $608,846 | | **Liabilities & Equity** | | | | Total current liabilities | $141,306 | $139,096 | | Long-term debt, net | $122,643 | $211,995 | | Total liabilities | $344,405 | $430,695 | | Total stockholders' equity | $241,246 | $176,193 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Details the company's revenues, expenses, and net income or loss for the three and six months ended June 30, 2025 and 2024 - A significant gain on disposition of **$125.7 million** in Q2 2025 turned an operating loss into a substantial net income of **$104.4 million**, compared to a net loss of **$27.3 million** in the same period last year[14](index=14&type=chunk) Statement of Operations Summary (in thousands, except per share amounts) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | H1 2025 (in thousands) | H1 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $94,838 | $113,252 | $189,378 | $216,157 | | Gross profit | $36,150 | $47,098 | $68,839 | $88,020 | | Loss from operations | ($15,350) | ($26,412) | ($52,113) | ($66,274) | | Gain on disposition | $125,681 | $— | $125,681 | $— | | Net income (loss) attributable to 3D Systems | $104,436 | ($27,258) | $67,450 | ($43,259) | | Diluted EPS | $0.57 | ($0.21) | $0.37 | ($0.33) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | ($59,630) | ($36,308) | | Net cash provided by (used in) investing activities | $112,931 | ($9,505) | | Net cash used in financing activities | ($97,340) | ($90,380) | | **Net decrease in cash** | **($38,935)** | **($138,825)** | - Investing activities provided **$112.9 million** in cash, primarily from the **$119.4 million** in proceeds from the sale of assets and businesses, which offset cash used in operations and financing[20](index=20&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures supporting the condensed consolidated financial statements, including significant transactions and accounting policies - On April 1, 2025, the company completed the sale of its Geomagic software business for **$119.4 million** in cash, recording a pre-tax gain of **$125.7 million**[50](index=50&type=chunk) - In June 2025, the company issued **$92.0 million** of 5.875% convertible senior secured notes due 2030 and used the proceeds, along with cash on hand, to repurchase **$179.7 million** of its 0% convertible senior notes due 2026, resulting in a gain on debt extinguishment of **$8.2 million**[60](index=60&type=chunk)[70](index=70&type=chunk) - The company initiated a new restructuring plan in 2025, expecting to incur **$11 million to $20 million** in pre-tax charges, primarily for employee severance, to deliver cost savings and improve cash flows[114](index=114&type=chunk)[116](index=116&type=chunk) - The company is subject to several legal matters, including an ongoing SEC investigation, a dispute with former owners of Volumetric regarding earnout payments, and a new securities class action lawsuit filed in June 2025[97](index=97&type=chunk)[99](index=99&type=chunk)[106](index=106&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2025 revenue decline of **16.3%** due to lower sales and divestiture, with operating loss narrowing from cost reductions, and liquidity impacted by cash flow and the Geomagic sale [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Analyzes the company's financial performance, including revenue, gross profit, and operating expenses, for the periods presented Revenue Change Analysis - Q2 2025 vs Q2 2024 (in thousands) | Category | Change (in thousands) | % Change | | :--- | :--- | :--- | | **Total Revenue** | **($18,414)** | **(16.3)%** | | Products Revenue | ($17,932) | (25.0)% | | Services Revenue | ($482) | (1.1)% | - The decrease in revenue was primarily driven by a **24.8% decline** in product sales volume, particularly in materials for dental, service bureaus, and jewelry markets, along with the impact of the Geomagic divestiture[137](index=137&type=chunk) - SG&A expenses decreased by **$17.4 million (33.7%)** YoY in Q2 2025, mainly due to a **$16.3 million reduction** in compensation and benefits expense resulting from restructuring actions and lower incentive compensation[143](index=143&type=chunk)[146](index=146&type=chunk) - R&D expenses decreased by **$4.7 million (21.1%)** YoY in Q2 2025, primarily due to improved operating efficiency and cost reductions from restructuring activities[144](index=144&type=chunk) [Segment Results](index=32&type=section&id=Segment%20Results) Provides a breakdown of financial performance by the company's key operating segments, Healthcare Solutions and Industrial Solutions Segment Performance - Q2 2025 vs Q2 2024 (in thousands) | Segment | Revenue Q2 2025 (in thousands) | Revenue Q2 2024 (in thousands) | % Change | Gross Profit Q2 2025 (in thousands) | Gross Profit Q2 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Healthcare Solutions | $45,020 | $48,900 | (7.9)% | $20,382 | $22,435 | (9.2)% | | Industrial Solutions | $49,818 | $64,352 | (22.6)% | $15,768 | $24,663 | (36.1)% | - Healthcare Solutions revenue declined primarily due to lower materials sales in the dental market, including reduced volume with a key customer[147](index=147&type=chunk) - Industrial Solutions revenue and gross profit decreased significantly due to the impact of the Geomagic divestiture, lower materials sales to service bureaus and jewelry markets, and unfavorable price/mix[150](index=150&type=chunk)[152](index=152&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's ability to meet its short-term and long-term financial obligations, including cash position, debt, and capital expenditures - Cash and cash equivalents decreased by **$55.0 million** since December 31, 2024, to a total of **$116.4 million** at June 30, 2025[164](index=164&type=chunk) - The cash decrease was driven by **$59.6 million** used in operations, **$97.3 million** used in financing (including debt and stock repurchases), partially offset by **$119.4 million** in proceeds from the Geomagic sale[164](index=164&type=chunk) - Material cash requirements include **$126.7 million** in outstanding long-term debt, **$19.8 million** in purchase commitments, and **$95.2 million** in lease obligations[176](index=176&type=chunk)[177](index=177&type=chunk)[178](index=178&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk exposures, including interest rate and foreign currency risks, were reported for the six months ended June 30, 2025 - There were no material changes to the market risk assessment performed as of December 31, 2024[190](index=190&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were ineffective as of June 30, 2025, due to previously identified material weaknesses, with a remediation plan actively in progress - Management concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to the material weaknesses discussed in the 2024 Annual Report on Form 10-K[191](index=191&type=chunk) - A remediation plan is in progress to address the identified material weaknesses, including increased training, enhanced documentation, and talent enhancements[192](index=192&type=chunk) [Part II - Other Information](index=41&type=section&id=Part%20II%20-%20Other%20Information) [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings, including an SEC investigation, Volumetric earnout dispute, and a new securities class action, are incorporated by reference from Note 12 - Information regarding legal proceedings is incorporated by reference from Note 12 to the condensed consolidated financial statements[195](index=195&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors were reported for the three months ended June 30, 2025 - There were no material changes during the three months ended June 30, 2025 to the risk factors previously reported[196](index=196&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q2 2025, the company repurchased **8.16 million** shares of common stock, including **8.0 million** shares in June at **$1.87** per share, as part of financing transactions - On June 24, 2025, the company repurchased **8.0 million** shares of its common stock at a price of **$1.87** per share in privately negotiated transactions[199](index=199&type=chunk) Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 154,194 | $2.03 | | May 2025 | 2,387 | $1.69 | | June 2025 | 8,001,631 | $1.87 | | **Total** | **8,158,212** | **$1.87** | [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) The Board rejected Audit Committee Chair Ms. Drayton's resignation, citing her crucial financial expertise for overseeing remediation of internal control weaknesses - The Board of Directors rejected the contingent resignation of Audit Committee Chair Ms. Drayton, determining that her continued service is in the best interests of the company and its stockholders, particularly for overseeing the remediation of internal control weaknesses[203](index=203&type=chunk)