Nov 6, 2025 8:15 AM Eastern Standard Time Stratasys Demonstrates Distributed Manufacturing Capabilities with FLEETWERX and the U.S. Navy During Trident Warrior 25 Share Forward-deployed printing, supported by reach-back production from Stratasys Direct, helps Navy reduce downtime and maintain mission readiness The U.S. Navy and other branches of the military use additive manufacturing to ensure their front-line vehicles and equipment are maintained and in fighting shape. Additive manufacturing allows for qu ...

Core Insights - Stratasys (SSYS) stock has shown an upward trend over the past 12 months, attributed to revenue stabilization and reduced cash burn [1] - There is increasing optimism regarding a growth reacceleration for Stratasys, driven by strategic management and market positioning [1] Company Analysis - Narweena, an asset manager led by Richard Durant, focuses on identifying market dislocations due to misinterpretations of long-term business prospects [1] - The firm aims to achieve excess risk-adjusted returns by targeting businesses with secular growth opportunities in markets with high barriers to entry [1] - Narweena's investment strategy emphasizes company and industry fundamentals to uncover unique insights, with a preference for smaller cap stocks and less obvious competitive advantages [1] Market Trends - An aging population with low growth and stagnating productivity is expected to create new investment opportunities distinct from historical trends [1] - Many industries may experience stagnation or secular decline, which could paradoxically enhance business performance due to reduced competition [1] - Conversely, some businesses may face rising costs and diseconomies of scale, impacting their profitability [1] - The economy is increasingly characterized by asset-light businesses, leading to a declining need for infrastructure investments over time [1] - A significant amount of capital is pursuing a limited number of investment opportunities, resulting in rising asset prices and compressed risk premiums [1] Leadership Background - Richard Durant holds undergraduate degrees in engineering and finance from the University of Adelaide and an MBA from Nanyang Technological University [1] - He has passed the CFA exams, indicating a strong foundation in financial analysis and investment management [1]

Core Viewpoint - The European Central Bank has approved Francesco Gaetano Caltagirone to increase his ownership in Monte dei Paschi di Siena to a maximum of 20% [1] Group 1: Company Developments - Francesco Gaetano Caltagirone is an Italian entrepreneur who is set to raise his stake in the Tuscan lender Monte dei Paschi di Siena [1] - The approval from the European Central Bank indicates a significant move in the ownership structure of Monte dei Paschi di Siena [1]

Core Insights - Stratasys has launched the iAM Marketplace, an independent platform aimed at enhancing access to additive manufacturing materials and solutions, thereby expanding its total addressable market within the polymer additive manufacturing industry [1][4]. Group 1: iAM Marketplace Overview - The iAM Marketplace is a hardware-agnostic platform that offers the widest selection of high-quality polymer materials, engineering services, and products in the polymer additive manufacturing sector [1][5]. - This platform aims to streamline purchasing processes and support more agile supply chains for manufacturers globally [1][2]. Group 2: Strategic Partnerships and Offerings - The iAM Marketplace consolidates the materials expertise of iSQUARED, Forward AM, and assets from Nexa3D, leveraging decades of innovation in additive manufacturing [2][5]. - It complements Stratasys' exclusive materials portfolio, providing manufacturers with both high-performance certified materials and a broad range of options from an open marketplace [3][4]. Group 3: Market Positioning and Future Plans - The launch of the iAM Marketplace is seen as a significant advancement in Stratasys' materials strategy, allowing the company to serve the entire additive manufacturing industry more effectively [4]. - The platform is designed to cater to diverse manufacturing needs, focusing on cost, performance, and specific use-case solutions [4].

Core Insights - Stratasys Ltd. has released its fourth annual Environmental, Social and Governance (ESG) and Sustainability Report, highlighting significant advancements in its Mindful Manufacturing™ principles [1] - The 2024 report features the company's first-ever year-over-year Scope 3 greenhouse gas (GHG) emissions disclosure, which has been verified by independent third parties [1]

Company Overview - Stratasys reported Q2 2025 non-GAAP earnings of 3 cents per share, matching the Zacks Consensus Estimate, compared to a non-GAAP loss of 4 cents per share in the same quarter last year [2] - Revenues for the quarter were approximately flat year over year at $138.1 million, slightly beating the consensus mark by 0.48% [2] Revenue Breakdown - Product revenues increased by 1.3% year over year to $94.8 million [3] - System revenues grew by 5.5% year over year to $30.6 million [3] - Consumables revenues decreased by 0.6% year over year to $64.2 million [3] - Services revenues declined by 2.6% year over year to $43.3 million [3] Profitability Metrics - Non-GAAP gross profit fell by 2.7% year over year to $65.8 million, with a non-GAAP gross margin contraction of 140 basis points to 47.7% [3] - Operating expenses dropped by 12.1% year over year to $76.1 million, with R&D expenses declining by 22.4% to $19.9 million and SG&A expenses falling by 7.7% to $56.2 million [4] - Non-GAAP operating profit was $1.1 million compared to an operating loss of $3.2 million in the year-ago quarter [4] Balance Sheet and Cash Flow - As of June 30, 2025, Stratasys had cash and short-term deposits of $254.6 million, up from $150.1 million as of March 31, 2025 [5] - The company reported an operating cash flow of $1.1 million for the quarter, down from $2.4 million [5] 2025 Outlook - Stratasys expects revenues between $550 million and $560 million for 2025, with non-GAAP earnings projected in the range of 13-16 cents per share [6] - The anticipated gross margin is between 46.7% and 47%, with a non-GAAP operating margin expected to be in the range of 1.5-2% [6] Estimate Trends - Recent estimates for Stratasys have trended downward, with the consensus estimate shifting by -950% [7][10] Industry Comparison - Stratasys belongs to the Zacks Commercial Printing industry, where competitor 3D Systems has gained 7.7% over the past month [11] - 3D Systems reported revenues of $94.84 million for the last quarter, reflecting a year-over-year decline of 16.3% [11]

Core Viewpoint - Stratasys Ltd. (NASDAQ: SSYS) reported Q2 numbers that were not positively received, indicating potential challenges ahead for the company [1]. Financial Performance - The Q2 results of Stratasys did not meet expectations, suggesting a need for further analysis of the company's financial health and operational performance [1]. Investment Perspective - The company is viewed through a long-term investment lens, with a focus on maintaining a balanced portfolio that includes growth, value, and dividend-paying stocks, although there is a stronger inclination towards value investments [1]. Market Sentiment - The overall sentiment surrounding Stratasys's recent performance appears to be cautious, reflecting investor concerns about the company's future prospects [1].

[Financial Statements](index=3&type=section&id=Financial%20Statements) [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Stratasys' total assets grew to $1.14 billion by June 30, 2025, with equity increasing to $902.4 million from a PIPE transaction Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $614,846 | $512,961 | | **Total Assets** | $1,138,987 | $1,029,746 | | **Total Current Liabilities** | $166,049 | $167,214 | | **Total Liabilities** | $236,606 | $236,755 | | **Total Equity** | $902,381 | $792,991 | [Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q2 2025 revenues were flat at $138.1 million, with operating loss narrowing to $16.6 million and net loss per share improving to $(0.20) Q2 2025 vs Q2 2024 Performance (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Total Revenues** | $138,086 | $138,041 | | **Gross Profit** | $59,494 | $60,500 | | **Operating Loss** | $(16,620) | $(26,043) | | **Net Loss** | $(16,745) | $(25,743) | | **Net Loss Per Share** | $(0.20) | $(0.36) | H1 2025 vs H1 2024 Performance (in thousands, except per share data) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | **Total Revenues** | $274,132 | $282,091 | | **Gross Profit** | $119,733 | $124,397 | | **Operating Loss** | $(29,024) | $(50,496) | | **Net Loss** | $(29,799) | $(51,726) | | **Net Loss Per Share** | $(0.38) | $(0.74) | [Consolidated Statements of Changes in Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Total equity increased to $902.4 million by June 30, 2025, primarily due to $119.3 million net proceeds from a PIPE transaction - A Private Investment in Public Equity (PIPE) transaction resulted in the issuance of 11.65 million new ordinary shares, providing net proceeds of **$119.3 million**, which was the main contributor to the increase in total equity[7](index=7&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations was $3.4 million for H1 2025, with significant investing outflows offset by $118.3 million from financing activities Six Months Ended June 30 Cash Flow Summary (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $3,431 | $4,901 | | **Net cash used in investing activities** | $(123,943) | $(14,941) | | **Net cash provided by (used in) financing activities** | $118,284 | $(701) | | **Net change in cash, cash equivalents and restricted cash** | $841 | $(11,728) | [Notes to Condensed Consolidated Interim Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [Note 1. Business Description and Basis of Presentation](index=11&type=section&id=Note%201.%20Business%20Description%20and%20Basis%20of%20Presentation) Stratasys, a global leader in polymer-based 3D printing, prepares financial statements under U.S. GAAP, noting limited impact from the Israel conflict - Stratasys is a global leader in connected, polymer-based 3D printing solutions, focusing on the manufacturing sector[11](index=11&type=chunk) - The military conflict in Israel has had a **limited impact** on the company's operations and financial condition for the first half of 2025[14](index=14&type=chunk) [Note 2. New Accounting Pronouncements](index=11&type=section&id=Note%202.%20New%20Accounting%20Pronouncements) The company is evaluating new accounting standards for income tax disclosures, expense disaggregation, and business combinations, effective in future periods - The company is assessing new accounting standards that will enhance disclosures for income taxes (ASU 2023-09), expense disaggregation (ASU 2024-03), and business combinations (ASU 2025-03), which are effective in future periods[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk) [Note 3. Certain Transactions](index=13&type=section&id=Note%203.%20Certain%20Transactions) The company's equity investment in Ultimaker was **$35.1 million**, with a **$4.0 million** share of losses, and completed minor acquisitions including Forward AM - The company's equity investment in Ultimaker amounted to **$35.1 million** as of June 30, 2025. The share in Ultimaker's losses for the first six months of 2025 was approximately **$4.0 million**[23](index=23&type=chunk) - During the first half of 2025, the company completed several small acquisitions, including Forward AM and certain assets from Nexa3D Inc[24](index=24&type=chunk) [Note 4. Revenues](index=14&type=section&id=Note%204.%20Revenues) H1 2025 revenue slightly decreased to $274.1 million, with Americas as the largest market and remaining performance obligations at **$95.1 million** Revenue by Geographical Region - Six Months Ended June 30 (in thousands) | Region | 2025 | 2024 | | :--- | :--- | :--- | | Americas | $165,095 | $170,296 | | EMEA | $74,001 | $75,526 | | Asia Pacific | $35,036 | $36,269 | | **Total Revenues** | **$274,132** | **$282,091** | - As of June 30, 2025, the company had **$95.1 million** in Remaining Performance Obligations (RPO), with **$63.7 million** expected to be recognized as revenue within the next 12 months[31](index=31&type=chunk) [Note 5. Inventories](index=17&type=section&id=Note%205.%20Inventories) Total inventories decreased to **$164.6 million** by June 30, 2025, from **$179.8 million** at year-end 2024, reflecting improved management Inventory Breakdown (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Finished goods | $83,589 | $90,702 | | Work-in-process | $7,856 | $7,491 | | Raw materials | $73,140 | $81,616 | | **Total** | **$164,585** | **$179,809** | [Note 6. Goodwill and Other Intangible Assets](index=17&type=section&id=Note%206.%20Goodwill%20and%20Other%20Intangible%20Assets) Goodwill increased to **$101.6 million** due to acquisitions and currency adjustments, with other intangible assets stable at **$106.0 million** - Goodwill increased by **$2.5 million** in the first half of 2025, primarily from acquisitions (**$0.7 million**) and currency translation adjustments (**$1.8 million**)[34](index=34&type=chunk) - The net book value of other intangible assets was **$106.0 million** as of June 30, 2025, with developed technology (**$78.9 million**) being the largest component[35](index=35&type=chunk) [Note 7. Net Loss Per Share](index=18&type=section&id=Note%207.%20Net%20Loss%20Per%20Share) Net loss per share significantly improved to **$(0.20)** for Q2 2025 and **$(0.38)** for H1 2025, with no dilutive shares included Net Loss Per Share (Basic and Diluted) | Period | 2025 | 2024 | | :--- | :--- | :--- | | **Three Months Ended June 30** | $(0.20) | $(0.36) | | **Six Months Ended June 30** | $(0.38) | $(0.74) | [Note 8. Income Taxes](index=18&type=section&id=Note%208.%20Income%20Taxes) Income tax expense for H1 2025 was **$1.5 million**, consistent with the prior year, influenced by geographic earnings distribution - The company recorded income tax expenses of **$1.5 million** for the six-month period ended June 30, 2025, consistent with the same period in 2024[39](index=39&type=chunk) [Note 9. Fair Value Measurements](index=19&type=section&id=Note%209.%20Fair%20Value%20Measurements) Significant Level 3 fair value measurements include **$11.8 million** in convertible notes assets and **$13.0 million** in contingent consideration liabilities - The company's most significant Level 3 fair value measurements are convertible notes assets of **$11.8 million** and contingent consideration liabilities of **$13.0 million**[40](index=40&type=chunk) [Note 10. Derivative instruments and hedging activities](index=20&type=section&id=Note%2010.%20Derivative%20instruments%20and%20hedging%20activities) The company uses foreign currency forward contracts to hedge exchange rate volatility, with a total notional amount of **$213.4 million** as of June 30, 2025 - The company uses derivative financial instruments to manage its net exposure to foreign currency exchange rates, primarily the NIS, Euro, British Pound, and several Asian currencies[43](index=43&type=chunk)[44](index=44&type=chunk) - As of June 30, 2025, the company had foreign exchange forward contracts designated as cash flow hedges for the conversion of **$30.2 million** into NIS and **€68.4 million** into dollars[47](index=47&type=chunk)[49](index=49&type=chunk) [Note 11. Equity](index=21&type=section&id=Note%2011.%20Equity) Equity changes include a **$120 million** PIPE transaction, no share repurchases, and **$12.4 million** in share-based compensation for H1 2025 - On April 8, 2025, the company completed a **$120 million** private investment in public equity (PIPE) transaction, issuing **11.65 million** new shares at **$10.30** per share[53](index=53&type=chunk) - The company has a **$50 million** share repurchase program authorized in September 2024, but no shares were repurchased during the first six months of 2025[51](index=51&type=chunk)[52](index=52&type=chunk) Share-Based Compensation Expenses (in thousands) | Period | 2025 | 2024 | | :--- | :--- | :--- | | **Three Months Ended June 30** | $6,138 | $7,346 | | **Six Months Ended June 30** | $12,351 | $15,995 | [Note 12. Contingencies](index=24&type=section&id=Note%2012.%20Contingencies) The company is involved in ordinary course legal proceedings, which management expects will not significantly impact its financial position or results - The company is a party to various ordinary course legal proceedings, which management does not expect to have a **significant effect** on its financial position, profitability, or cash flows[58](index=58&type=chunk) [Note 13. Segment](index=25&type=section&id=Note%2013.%20Segment) Stratasys operates as a **single operating and reportable segment**, focusing on 3D printing systems, services, and consumables - The company's business is managed as a **single operating and reportable segment**, generating revenues from 3D printing systems, related services, consumables, and additive manufacturing solutions[59](index=59&type=chunk) [Note 14. Restructuring costs](index=25&type=section&id=Note%2014.%20Restructuring%20costs) The 2024 Restructuring Plan was substantially completed by year-end 2024, with a remaining liability of **$3.6 million** as of June 30, 2025 - The 2024 Restructuring Plan, aimed at achieving **$40 million** in annualized cost savings, was substantially completed by the end of 2024[60](index=60&type=chunk) - As of June 30, 2025, the accrued liability for the 2024 Restructuring Plan was **$3.6 million**[61](index=61&type=chunk)

Financial Data and Key Metrics Changes - Consolidated revenue for Q2 2025 was $138.1 million, slightly higher than Q2 2024, reflecting ongoing customer deferral of major capital spending due to market uncertainty [21] - GAAP gross margin was 43.1%, down from 43.8% in the same period last year, while non-GAAP gross margin was 47.7%, down from 49% [22] - GAAP operating loss for the quarter was $16.6 million, an improvement from a loss of $26 million in the same period last year, while non-GAAP operating income was $1.1 million compared to a loss of $3.2 million [23][24] - Cash flow used in operating activities was $1.1 million, an improvement from $2.4 million in Q2 2024, with an expectation of positive operating cash flow for the full year 2025 [24] Business Line Data and Key Metrics Changes - Product revenue was $94.8 million, up from $93.6 million in the same period last year, while service revenue was $43.3 million, down from $44.4 million [21] - Within product revenue, system revenue increased to $30.6 million from $29 million, and consumables revenue was $64.2 million, slightly down from $64.6 million but up 2.6% sequentially [21] Market Data and Key Metrics Changes - Customer engagement remains strong despite macroeconomic challenges, with ongoing investment in R&D and new technology offerings [6][20] - The company launched the North American Stratasys Tooling Center to help manufacturers validate and scale additive manufacturing applications [9] Company Strategy and Development Direction - The long-term growth strategy focuses on capturing opportunities in high-growth sectors influenced by megatrends such as supply chain localization and sustainability [7][8] - The company emphasizes innovation and execution, aiming to solidify its leadership in digital manufacturing as market dynamics stabilize [6][30] Management's Comments on Operating Environment and Future Outlook - Management noted that customer spending remains challenged, impacting near-term business views, but the long-term outlook remains positive [19][20] - The return to normalized capital spending has been delayed, with expectations for significant opportunities in production applications to close potentially moving into 2026 [25][26] Other Important Information - The company ended the quarter with $254.6 million in cash and equivalents, bolstered by a $120 million investment [25] - New material offerings include P3 Silicon 25A, designed for the Stratasys Origin DLP platform, enhancing capabilities in industrial 3D printing [16] Q&A Session Summary Question: Can you clarify which specific verticals or regions are seeing the most pronounced slowdown or delays? - Management clarified that there is no slowdown, only delays, particularly in larger production application deals which have longer sales cycles [32][34] Question: What assumptions are baked into the fourth quarter adjusted EBITDA margin? - The guidance for Q4 is largely based on cost monitoring and reductions, with no large deals factored into the model [39][40] Question: What is impacting the gross margin? - Gross margin changes are attributed to sales mix changes, inventory absorption issues, and tariff impacts [43][46] Question: Can you elaborate on the Nexa asset acquisition? - The acquisition included valuable IP and R&D knowledge, positioning the company stronger in key use cases [56][59] Question: Do you anticipate additional partnerships with other vehicle OEMs? - Management expressed optimism about expanding partnerships, leveraging proven use cases from collaborations with GM and Toyota [72][74]

Core Insights - Stratasys reported quarterly earnings of $0.03 per share, matching the Zacks Consensus Estimate, and showing improvement from a loss of $0.04 per share a year ago [1] - The company achieved revenues of $138.09 million for the quarter ended June 2025, slightly exceeding the Zacks Consensus Estimate by 0.48% and showing a marginal increase from $138.04 million year-over-year [2] - Stratasys shares have increased approximately 27.9% since the beginning of the year, outperforming the S&P 500's gain of 9.6% [3] Earnings Outlook - The future performance of Stratasys stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4] - Current consensus EPS estimate for the upcoming quarter is $0.09 on revenues of $142.55 million, and for the current fiscal year, it is $0.32 on revenues of $570.04 million [7] Industry Context - The Commercial Printing industry, to which Stratasys belongs, is currently ranked in the top 23% of over 250 Zacks industries, indicating a favorable outlook [8]