March 5, 2025 Make additive work for you Conference Call and Webcast Link Q4 and FY 2024 Results Speakers Dr. Yoav Zeif, CEO Eitan Zamir, CFO Yonah Lloyd, CCO & VP IR US Toll-Free Dial-In 1-877-407-0619 International Dial-In +1-412-902-1012 Live Webcast and Replay Make additive work for you Forward -Looking Statements Cautionary Statement Regarding Forward - Looking Statements The statements in this slide presentation regarding Stratasys' strategy, and the statements regarding its projected future financial ...

[Press Release Overview](index=1&type=section&id=Press%20Release%20Overview) Stratasys Ltd. announced its Q4 and full-year 2024 financial results, highlighting strategic advancements, improved profitability, and a strong balance sheet [Company Announcement](index=1&type=section&id=Company%20Announcement) Stratasys Ltd. announced its fourth quarter and full-year 2024 financial results, focusing on polymer 3D printing solutions - Stratasys Ltd. (NASDAQ: SSYS) announced its **fourth quarter and full-year 2024 financial results** on March 5, 2025[2](index=2&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Dr. Yoav Zeif highlighted key actions in 2024 and early 2025 to enhance leadership in additive manufacturing, expanding adjusted gross margin, achieving adjusted net profitability, and positive operating cash flow with a healthy balance sheet - In 2024 and early 2025, the company took key measures to strengthen its leadership in additive manufacturing[3](index=3&type=chunk) - Successfully expanded adjusted gross margin by **100 basis points**, achieved adjusted net profitability, and generated positive operating cash flow in 2024, with further cash flow increases expected in 2025[3](index=3&type=chunk) - The company holds **$150.7 million** in cash, cash equivalents, and short-term deposits with **no debt**, providing stability and growth options[3](index=3&type=chunk) - Anticipates a **$120 million investment** from Fortissimo Capital, further solidifying future growth[3](index=3&type=chunk) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) Stratasys reported a decline in revenue for Q4 and full-year 2024, but achieved positive non-GAAP net income and adjusted EBITDA, with healthy year-end cash balances and positive full-year operating cash flow Key Financial Highlights (USD Million) | Metric | Q4 2024 | Q4 2023 | Full Year 2024 | Full Year 2023 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $150.4 | $156.3 | $572.5 | $627.6 | | GAAP Net Loss | $(41.9) | - | $(120.3) | - | | GAAP Diluted Loss Per Share | $(0.59) | - | $(1.70) | - | | Non-GAAP Net Income | $8.5 | - | $4.2 | - | | Non-GAAP Diluted Earnings Per Share | $0.12 | - | $0.06 | - | | Cash Flow from Operations | $7.4 (Positive) | - | $7.8 (Positive) | - | | Adjusted EBITDA | $14.5 | - | - | - | | Adjusted EBITDA as % of Revenue | 9.6% | - | - | - | | Year-End Cash & Cash Equivalents | $150.7 | - | $150.7 | - | | Debt | None | - | None | - | | Fortissimo Capital Investment | $120 (Pending) | - | - | - | [Summary of Financial Results](index=2&type=section&id=Summary%20of%20Financial%20Results) Stratasys reported a decline in revenue for Q4 and full-year 2024, yet demonstrated improved profitability metrics and a positive shift in operating cash flow [Fourth Quarter 2024 vs. 2023](index=2&type=section&id=Fourth%20Quarter%202024%20vs.%202023) In Q4 2024, Stratasys's revenue decreased year-over-year, but both GAAP and non-GAAP gross margins improved, with significant growth in non-GAAP operating income and net income, nearly doubling adjusted EBITDA, and a positive shift in operating cash flow Q4 2024 vs. Q4 2023 Financial Performance (USD Million) | Metric | Q4 2024 | Q4 2023 | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenue | $150.4 | $156.3 | -3.8% | | GAAP Gross Margin | 46.3% | 44.7% | +1.6 pp | | Non-GAAP Gross Margin | 49.6% | 48.8% | +0.8 pp | | GAAP Operating Income (Loss) | $(9.7) | $5.7 | Shift from income to loss | | Non-GAAP Operating Income | $9.4 | $2.0 | +370% | | GAAP Net Loss | $(41.9) | $(15.0) | Loss widened | | GAAP Diluted Loss Per Share | $(0.59) | $(0.22) | Loss widened | | Non-GAAP Net Income | $8.5 | $1.6 | +431.3% | | Non-GAAP Diluted Earnings Per Share | $0.12 | $0.02 | +500% | | Adjusted EBITDA | $14.5 | $7.7 | +88.3% | | Cash Flow from Operations | $7.4 (Inflow) | $(7.7) (Outflow) | Shift from outflow to inflow | [Full Year 2024 vs. 2023](index=2&type=section&id=Full%20Year%202024%20vs.%202023) For the full year 2024, Stratasys's revenue decreased year-over-year, but GAAP and non-GAAP gross margins improved, GAAP operating loss slightly narrowed, non-GAAP operating income and net income declined, and operating cash flow shifted from negative to positive Full Year 2024 vs. 2023 Financial Performance (USD Million) | Metric | Full Year 2024 | Full Year 2023 | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenue | $572.5 | $627.6 | -8.8% | | GAAP Gross Margin | 44.9% | 42.5% | +2.4 pp | | Non-GAAP Gross Margin | 49.2% | 48.2% | +1.0 pp | | GAAP Operating Loss | $(85.7) | $(87.6) | Loss narrowed | | Non-GAAP Operating Income | $4.9 | $12.6 | -61.1% | | GAAP Net Loss | $(120.3) | $(123.1) | Loss narrowed | | GAAP Diluted Loss Per Share | $(1.70) | $(1.79) | Loss narrowed | | Non-GAAP Net Income | $4.2 | $7.7 | -45.4% | | Non-GAAP Diluted Earnings Per Share | $0.06 | $0.11 | -45.5% | | Adjusted EBITDA | $26.0 | $35.0 | -25.8% | | Cash Flow from Operations | $7.8 (Inflow) | $(61.6) (Outflow) | Shift from outflow to inflow | [Financial Outlook 2025](index=3&type=section&id=Financial%20Outlook%202025) Stratasys anticipates improved revenue, enhanced non-GAAP margins, and significant growth in non-GAAP net income and adjusted EBITDA for 2025 [2025 Outlook Details](index=3&type=section&id=2025%20Outlook%20Details) Stratasys projects year-over-year revenue improvement in 2025, with enhanced non-GAAP gross and operating margins, significant growth in non-GAAP net income and adjusted EBITDA, and higher operating and free cash flow 2025 Financial Outlook (USD Million) | Metric | 2025 Outlook (Low) | 2025 Outlook (High) | | :--- | :--- | :--- | | Full Year Revenue | $570 | $585 | | Full Year Non-GAAP Gross Margin | 48.8% | 49.2% | | Full Year Operating Expenses | $254 | $257 | | Full Year Non-GAAP Operating Margin | 4.0% | 5.0% | | GAAP Net Loss | $(68) | $(53) | | GAAP Diluted Loss Per Share | $(0.93) | $(0.72) | | Non-GAAP Net Income | $20 | $26 | | Non-GAAP Diluted Earnings Per Share | $0.28 | $0.35 | | Adjusted EBITDA | $44.0 | $50.0 | | Adjusted EBITDA Margin | 7.8% | 8.5% | | Capital Expenditures | $25 | $30 | - Higher operating and free cash flow are expected in 2025 compared to 2024[10](index=10&type=chunk) - The investment from Fortissimo Capital is anticipated to close in the **second quarter of 2025**[10](index=10&type=chunk) [Company Information & Disclosures](index=3&type=section&id=Company%20Information%20%26%20Disclosures) This section provides details on the earnings call, Stratasys's business, cautionary statements regarding future projections, and the use of non-GAAP financial measures [Webcast and Conference Call Details](index=3&type=section&id=Webcast%20and%20Conference%20Call%20Details) Stratasys plans a webcast conference call on March 5, 2025, at 8:30 AM ET to discuss its Q4 and full-year 2024 financial results, with investor participation available via the company website or a dedicated link - The company plans a webcast conference call on **March 5, 2025, at 8:30 AM ET** to discuss its fourth quarter and full-year 2024 financial results[9](index=9&type=chunk) - Investors can participate via the Stratasys website at investors.stratasys.com or directly through https://event.choruscall.com/mediaframe/webcast.html?webcastid=NYpcz3qp[9](index=9&type=chunk) [About Stratasys](index=3&type=section&id=About%20Stratasys) Stratasys is a leader in polymer 3D printing solutions, providing additive manufacturing solutions across various industries through smart, connected 3D printers, materials, software ecosystems, and on-demand parts, helping clients transform product design and enhance manufacturing and supply chain agility - Stratasys is a leader in polymer 3D printing solutions, dedicated to driving the global transformation of additive manufacturing[10](index=10&type=chunk) - The company provides solutions through smart, connected 3D printers, polymer materials, software ecosystems, and on-demand parts for industries including aerospace, automotive, consumer products, healthcare, fashion, and education[10](index=10&type=chunk) - Stratasys's solutions aim to help leading global organizations transform product design, enhance manufacturing and supply chain agility, and improve patient care[11](index=11&type=chunk) [Cautionary Statement Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) Forward-looking statements in this press release reflect management's current expectations and beliefs, but actual results may differ materially due to business risks and uncertainties; the company undertakes no obligation to publicly update or revise any forward-looking statements unless required by law - Forward-looking statements in this press release reflect management's current expectations and beliefs, but actual results may differ materially due to business risks and uncertainties[14](index=14&type=chunk) - Risks and uncertainties include new product success, 3D printing industry growth, macroeconomic environment, strategic changes, competition, completion of Fortissimo Capital investment, asset impairment, acquisition integration, supply chain disruptions, geopolitical conflicts, litigation and regulatory procedures, intellectual property risks, liquidity and financing, and tax regulations[14](index=14&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statements unless required by law[15](index=15&type=chunk) [Use of Non-GAAP Financial Measures](index=5&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) The company uses non-GAAP financial measures to help investors and shareholders better assess operating performance by excluding certain non-cash items, restructuring charges, M&A-related expenses, and foreign exchange impacts, providing a more comparable view of performance as a supplement to, not a substitute for, GAAP measures - Non-GAAP financial measures are used to help investors and shareholders evaluate the company's operating performance, excluding non-cash or non-recurring items such as M&A, restructuring, legal provisions, share-based compensation, intangible asset amortization, asset impairment, and investment revaluation[16](index=16&type=chunk) - These non-GAAP metrics aim to provide a view of performance used by management for internal planning and forecasting, but their limitations include not encompassing all items and potentially not being fully comparable to other companies[16](index=16&type=chunk) - Investors should consider non-GAAP measures as a supplement to, not a substitute for or superior to, GAAP financial results[16](index=16&type=chunk) [Investor Relations Contact](index=5&type=section&id=Investor%20Relations%20Contact) The investor relations contact is Yonah Lloyd, CCO and VP of Investor Relations - Investor Relations Contact: **Yonah Lloyd**, CCO and VP of Investor Relations[17](index=17&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) Stratasys's consolidated financial statements show a decrease in total assets and liabilities, alongside a mixed performance in revenue and profitability for 2024 [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2024, Stratasys's total assets and liabilities both decreased, with reductions in cash and cash equivalents and accounts receivable, alongside declines in long-term investments and goodwill; total equity decreased year-over-year Consolidated Balance Sheets (USD Thousands) | Metric | December 31, 2024 | December 31, 2023 | Change (YoY) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and Cash Equivalents | $70,200 | $82,585 | -15.0% | | Short-Term Bank Deposits | $80,500 | $80,000 | +0.6% | | Accounts Receivable, Net | $152,979 | $172,009 | -11.1% | | Inventories | $179,809 | $192,976 | -6.9% | | Total Current Assets | $512,961 | $560,095 | -8.4% | | Long-Term Investments | $80,205 | $115,083 | -30.3% | | Goodwill | $99,082 | $100,051 | -1.0% | | Other Intangible Assets, Net | $106,253 | $127,781 | -16.9% | | Total Non-Current Assets | $516,785 | $573,810 | -9.9% | | **Total Assets** | **$1,029,746** | **$1,133,905** | **-9.2%** | | **Liabilities** | | | | | Accounts Payable | $44,977 | $46,785 | -3.9% | | Deferred Revenue - Short-Term | $46,347 | $52,610 | -11.9% | | Total Current Liabilities | $167,214 | $176,426 | -5.2% | | Deferred Revenue - Long-Term | $19,057 | $23,655 | -19.4% | | Total Non-Current Liabilities | $69,541 | $72,640 | -4.3% | | **Total Liabilities** | **$236,755** | **$249,066** | **-4.9%** | | **Equity** | | | | | Total Equity | $792,991 | $884,839 | -10.4% | | **Total Liabilities and Equity** | **$1,029,746** | **$1,133,905** | **-9.2%** | [Consolidated Statements of Operations](index=9&type=section&id=Consolidated%20Statements%20of%20Operations) For Q4 and full-year 2024, Stratasys's total revenue decreased year-over-year, with reductions in both product and service revenue; GAAP gross profit remained relatively stable, but GAAP operating and net losses widened in Q4 and slightly narrowed for the full year, with diluted loss per share widening in Q4 and slightly improving for the full year Consolidated Statements of Operations (USD Thousands) | Metric | Q4 2024 | Q4 2023 | Change (YoY) | Full Year 2024 | Full Year 2023 | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | | | | | | | | Products | $105,035 | $110,388 | -4.9% | $391,917 | $433,741 | -9.6% | | Services | $45,324 | $45,949 | -1.4% | $180,541 | $193,857 | -6.9% | | **Total Revenue** | **$150,359** | **$156,337** | **-3.8%** | **$572,458** | **$627,598** | **-8.8%** | | **Gross Profit** | **$69,689** | **$69,758** | **-0.1%** | **$256,816** | **$267,024** | **-3.8%** | | Research and Development Expenses, Net | $24,785 | $25,078 | -1.2% | $99,142 | $94,425 | +5.0% | | Selling, General and Administrative Expenses | $54,604 | $39,006 | +40.0% | $243,335 | $260,179 | -6.5% | | **Operating Income (Loss)** | **$(9,700)** | **$5,674** | **Shift from income to loss** | **$(85,661)** | **$(87,580)** | **-2.2%** | | Financial Income, Net | $176 | $846 | -79.2% | $1,676 | $2,993 | -44.0% | | Share of Loss from Affiliates | $31,766 | $20,839 | +52.4% | $33,325 | $32,705 | +1.9% | | **Net Loss** | **$(41,943)** | **$(14,956)** | **+180.4%** | **$(120,283)** | **$(123,074)** | **-2.3%** | | Diluted Loss Per Share | $(0.59) | $(0.22) | +168.2% | $(1.70) | $(1.79) | -5.0% | [Non-GAAP Reconciliations](index=10&type=section&id=Non-GAAP%20Reconciliations) This section reconciles GAAP to non-GAAP financial measures for both quarterly and annual periods, including forward-looking guidance adjustments [Non-GAAP Reconciliations - Three Months Ended December 31](index=10&type=section&id=Non-GAAP%20Reconciliations%20-%20Three%20Months%20Ended%20December%2031) In Q4 2024, Stratasys's non-GAAP gross profit, operating income, and net income were significantly higher than GAAP reported figures, with non-GAAP net income shifting from a GAAP loss to a profit, by excluding adjustments such as intangible asset amortization, share-based compensation, restructuring costs, investment revaluation, and equity method related amortization Non-GAAP Reconciliations - Three Months Ended December 31 (USD Thousands) | Metric | GAAP 2024 | Non-GAAP Adjustments 2024 | Non-GAAP 2024 | GAAP 2023 | Non-GAAP Adjustments 2023 | Non-GAAP 2023 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Gross Profit | $69,689 | $4,866 | $74,555 | $69,758 | $6,565 | $76,323 | | Operating Income (Loss) | $(9,700) | $19,144 | $9,444 | $5,674 | $(3,659) | $2,015 | | Net Income (Loss) | $(41,943) | $50,462 | $8,519 | $(14,956) | $16,604 | $1,648 | | Diluted Net Income (Loss) Per Share | $(0.59) | $0.71 | $0.12 | $(0.22) | $0.24 | $0.02 | | **Key Adjustments (2024)** | | | | | | | | Intangible Asset Amortization Expense | | $4,496 (Gross Profit) | | | $1,153 (Operating) | | | Share-Based Compensation Expense | | $198 (Gross Profit) | | | $2,856 (Operating) | | | Restructuring and Related Costs | | $172 (Gross Profit) | | | $5,275 (Operating) | | | Investment Revaluation | | | | | $4,697 (Operating) | | | Equity Method Related Amortization, Divestitures and Impairment | | $30,910 (Net Income) | | | | | [Non-GAAP Reconciliations - Twelve Months Ended December 31](index=11&type=section&id=Non-GAAP%20Reconciliations%20-%20Twelve%20Months%20Ended%20December%2031) For the full year 2024, Stratasys's non-GAAP gross profit, operating income, and net income were significantly higher than GAAP reported figures, with non-GAAP net income shifting from a GAAP loss to a profit, after excluding adjustments such as intangible asset amortization, share-based compensation, restructuring costs, investment revaluation, and equity method related amortization Non-GAAP Reconciliations - Twelve Months Ended December 31 (USD Thousands) | Metric | GAAP 2024 | Non-GAAP Adjustments 2024 | Non-GAAP 2024 | GAAP 2023 | Non-GAAP Adjustments 2023 | Non-GAAP 2023 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Gross Profit | $256,816 | $24,948 | $281,764 | $267,024 | $35,764 | $302,788 | | Operating Income (Loss) | $(85,661) | $90,594 | $4,933 | $(87,580) | $100,207 | $12,627 | | Net Income (Loss) | $(120,283) | $124,520 | $4,237 | $(123,074) | $130,783 | $7,709 | | Diluted Net Income (Loss) Per Share | $(1.70) | $1.76 | $0.06 | $(1.79) | $1.90 | $0.11 | | **Key Adjustments (2024)** | | | | | | | | Intangible Asset Amortization Expense | | $18,576 (Gross Profit) | | | $5,847 (Operating) | | | Share-Based Compensation Expense | | $3,072 (Gross Profit) | | | $22,546 (Operating) | | | Restructuring and Related Costs | | $3,300 (Gross Profit) | | | $17,419 (Operating) | | | Investment Revaluation | | | | | $6,597 (Operating) | | | Equity Method Related Amortization, Divestitures and Impairment | | $31,262 (Net Income) | | | | | [Reconciliation of GAAP Net Loss to Adjusted EBITDA](index=12&type=section&id=Reconciliation%20of%20GAAP%20Net%20Loss%20to%20Adjusted%20EBITDA) For Q4 and full-year 2024, Stratasys adjusted its GAAP net loss to positive adjusted EBITDA by adding back financial income, income tax expense, share of loss from affiliates, depreciation, amortization, share-based compensation, investment revaluation, net loss on sale of investments, contingent consideration, legal and other expenses, and restructuring costs Reconciliation of GAAP Net Loss to Adjusted EBITDA (USD Thousands) | Metric | Q4 2024 | Q4 2023 | Full Year 2024 | Full Year 2023 | | :--- | :--- | :--- | :--- | :--- | | GAAP Net Loss | $(41,943) | $(14,956) | $(120,283) | $(123,074) | | Financial Income, Net | $(176) | $(846) | $(1,676) | $(2,993) | | Income Tax Expense | $653 | $637 | $2,973 | $5,782 | | Share of Loss from Affiliates | $31,766 | $20,839 | $33,325 | $32,705 | | Depreciation Expense | $5,033 | $5,653 | $21,030 | $22,417 | | Amortization Expense | $5,649 | $7,134 | $24,423 | $28,770 | | Share-Based Compensation Expense | $3,054 | $7,876 | $25,618 | $31,614 | | Investment Revaluation | $4,697 | — | $6,597 | $4,880 | | Net Loss on Sale of Investments | $4,760 | — | $4,760 | — | | Contingent Consideration | $(9,148) | $(23,206) | $(7,595) | $(22,331) | | Legal and Other Expenses | $4,685 | $3,836 | $16,072 | $37,723 | | Restructuring and Related Costs | $5,447 | $701 | $20,719 | $12,460 | | Impairment of Long-Lived Assets | — | — | — | $7,087 | | **Adjusted EBITDA** | **$14,477** | **$7,668** | **$25,963** | **$35,040** | [Forward-Looking Guidance Reconciliations](index=13&type=section&id=Forward-Looking%20Guidance%20Reconciliations) Stratasys provides forward-looking guidance for fiscal year 2025, adjusting GAAP net loss and operating loss to derive non-GAAP net income, adjusted EBITDA, and non-GAAP operating income, by including share-based compensation, intangible asset amortization, restructuring and other expenses, and tax impacts [GAAP Net Loss to Non-GAAP Net Income Guidance](index=13&type=section&id=GAAP%20Net%20Loss%20to%20Non-GAAP%20Net%20Income%20Guidance) For fiscal year 2025, Stratasys expects to adjust GAAP net loss to non-GAAP net income by accounting for share-based compensation, intangible asset amortization, restructuring and other expenses, and related tax impacts GAAP Net Loss to Non-GAAP Net Income Guidance (USD Million) | Metric | Low | High | | :--- | :--- | :--- | | GAAP Net Loss | $(68) | $(53) | | Share-Based Compensation Expense | $25 | $27 | | Intangible Asset Amortization Expense | $22 | $24 | | Restructuring and Other | $30 | $34 | | Tax Impact of Non-GAAP Adjustments | $2 | $3 | | **Non-GAAP Net Income** | **$20** | **$26** | | GAAP Loss Per Share | $(0.93) | $(0.72) | | Non-GAAP Diluted Earnings Per Share | $0.28 | $0.35 | [GAAP Net Loss to Adjusted EBITDA Guidance](index=13&type=section&id=GAAP%20Net%20Loss%20to%20Adjusted%20EBITDA%20Guidance) For fiscal year 2025, Stratasys expects to adjust GAAP net loss to adjusted EBITDA by accounting for share-based compensation, intangible asset amortization, restructuring and other expenses, tax impacts, other non-operating expenses, and depreciation GAAP Net Loss to Adjusted EBITDA Guidance (USD Million) | Metric | Low | High | | :--- | :--- | :--- | | GAAP Net Loss | $(68) | $(53) | | Share-Based Compensation Expense | $25 | $27 | | Intangible Asset Amortization Expense | $22 | $24 | | Restructuring and Other | $30 | $34 | | Tax Impact of Non-GAAP Adjustments | $2 | $3 | | Other Non-Operating Expenses | $4 | $4 | | Depreciation | $20 | $20 | | **Adjusted EBITDA** | **$44** | **$50** | [GAAP Operating Loss to Adjusted Non-GAAP Operating Income Guidance](index=14&type=section&id=GAAP%20Operating%20Loss%20to%20Adjusted%20Non-GAAP%20Operating%20Income%20Guidance) For fiscal year 2025, Stratasys expects to adjust GAAP operating loss to non-GAAP operating income by accounting for share-based compensation, intangible asset amortization, and restructuring and other expenses GAAP Operating Loss to Adjusted Non-GAAP Operating Income Guidance (USD Million) | Metric | Low | High | | :--- | :--- | :--- | | GAAP Operating Loss | $(57) | $(43) | | GAAP Operating Margin | (10)% | (7)% | | Share-Based Compensation Expense | $25 | $27 | | Intangible Asset Amortization Expense | $22 | $24 | | Restructuring and Other | $26 | $30 | | **Non-GAAP Operating Income** | **$24** | **$30** | | Non-GAAP Operating Margin | 4% | 5% |

Industry Overview - 3D Printing, also known as additive manufacturing, has transformed from a sci-fi concept to a practical technology since its inception in the 1980s, allowing for the creation of three-dimensional objects from digital designs [1] - The technology offers advantages over traditional manufacturing, including cost-effectiveness, customization, precision, and sustainability [1] Market Adoption - Businesses are increasingly adopting 3D Printing for rapid prototyping and on-demand production, significantly reducing lead times and costs [2] - Major companies in the 3D Printing space include Xometry, Proto Labs Inc., and Stratasys, with tech giants like Microsoft and HP also entering the market [2] Advantages of 3D Printing - The use of lighter and more durable components, reduced material waste, and faster production cycles make 3D Printing a game-changer [3] - It enables localized production, cutting down supply chains and lowering transportation costs, which is particularly beneficial for industries with fluctuating demand [3] Industry Applications - 3D Printing is being adopted across various industries, including healthcare, aerospace, automotive, and consumer goods [4] - In aerospace, it is used for lightweight components, while in automotive, it aids in producing prototypes and customized parts [4] - The medical field is leveraging 3D Printing for personalized medical tools and prosthetics, with advancements in tissue and organ printing expected to revolutionize healthcare [4] Market Size and Growth - The global 3D Printing market was valued at $19.33 billion in 2024 and is projected to grow at a CAGR of 23.4% by 2032, with North America holding a 41.39% market share [5] Investment Opportunities - 3D Printing presents significant growth opportunities for investors, with companies like GE Aerospace, Carpenter Technology, and Proto Labs identified as high-potential stocks [6] Company Profiles - **GE Aerospace**: A leader in additive manufacturing, GE has made significant investments in 3D Printing, including a $54 million investment for additional machines and tooling in Alabama and $107 million for facilities in Cincinnati [10][11] - **Carpenter Technology**: Built its additive capabilities through acquisitions and opened an Emerging Technology Center in Alabama, focusing on producing specialty alloys for 3D Printing [12][13] - **Proto Labs**: Known for rapid prototyping, Proto Labs has over 250,000 parts printed monthly and generated approximately $84 million in revenues from its 3D Printing service in 2024 [17]

Group 1 - Stratasys' stock has rebounded significantly in recent months following the announcement of preliminary earnings for Q4 2024, despite the results being described as mediocre [1] - Revenue for Stratasys is stabilizing, and the company is now experiencing positive cash flows [1] Group 2 - Narweena, an asset manager led by Richard Durant, focuses on identifying market dislocations due to a poor understanding of long-term business prospects [2] - The firm aims to achieve excess risk-adjusted returns by targeting businesses with secular growth opportunities in markets with barriers to entry [2] - Narweena's investment strategy is driven by the belief that an aging population and low population growth will create new investment opportunities, contrasting with past trends [2] - The firm emphasizes that many industries may face stagnation or secular decline, which could paradoxically enhance business performance due to reduced competition [2] - There is a noted trend of economies being increasingly dominated by asset-light businesses, leading to a declining need for infrastructure investments [2] - A large pool of capital is pursuing a limited set of investment opportunities, resulting in rising asset prices and compressed risk premia over time [2]

Industry Overview - The 3D printing industry has been a disaster for shareholders, destroying billions in value [1] - Competition in the 3D printing industry is intense, with some businesses likely to go bankrupt [1] - Stratasys (NASDAQ: SSYS) remains a key player in the 3D printing market [1] Investment Focus - The investment focus is on growth companies with a bias towards the mid-cap segment [1] - Key sectors under study include biotechnologies, computer chips, cloud technology, energy, and commodities [1] - Special attention is given to risks surrounding business cases, with a top-down approach complementing bottom-up analysis [1] Analytical Approach - A systematic balance sheet analysis is performed to assess the financial health of growing businesses [1] - Stress tests are employed to challenge investment theses and evaluate the degree of safety in each model [1] - Long-term capital appreciation is preferred over short-term speculation [1] Analyst Background - The analyst holds a master's in communication and an MBA, with experience in journalism [1] - The analyst has been a contributor to Seeking Alpha since 2023, focusing on technology and geopolitically relevant companies [1]

Industry Overview - The Zacks Computer-Peripheral Equipment industry is facing challenges due to weakening IT spending caused by macroeconomic uncertainties, high inflation, and geopolitical risks [1] - Demand for remote working and online learning-related computer peripherals has declined in the post-pandemic era [1] - The industry comprises companies offering computer input, output, and storage devices, including keyboards, mice, LCD panels, smart glass, 3D printers, and transaction-based printer products [3] - The industry is highly competitive, with companies focusing on innovation to meet current demand trends and strengthen product portfolios [4] Key Trends Shaping the Industry - Shift in consumer preference from mobile gaming to professional gaming experiences, driven by advanced gaming devices and the popularity of e-sports leagues [5] - Growing demand for 3D printing solutions across industries like medical, aerospace, and automotive, driven by engineers, designers, and entrepreneurs [6] - Expansion into price-sensitive regions like Asia Pacific and the Middle East & Africa through low-cost quality products [7] - Delayed PC refresh cycle due to the pandemic-led work-from-home trend, negatively impacting demand for computer peripherals [9] - Elevated operating expenses from R&D and sales force expansion, likely to dent margins in the near term [10] Industry Performance and Valuation - The Zacks Computer-Peripheral Equipment industry has underperformed the S&P 500 and the broader Zacks Computer and Technology sector, plunging 30.4% in the trailing 12 months [14] - The industry is currently trading at a forward 12-month P/S of 0.68X, compared to the S&P 500's 5.46X and the Zacks Computer and Technology sector's 7.02X [15] - The industry carries a Zacks Industry Rank 157, placing it in the bottom 37% of over 250 Zacks industries, indicating dim near-term prospects [11][12] Companies to Watch Stratasys (SSYS) - Manufacturer of 3D printers and rapid prototyping systems for industries like automotive, aerospace, defense, and medical [16] - Benefiting from increased demand for 3D printed equipment, with cost-control initiatives and innovative product introductions driving growth [17][18] - Consensus earnings estimate for 2025 remains unchanged at 33 cents per share, with the stock depreciating 35.6% in the past year [19] Mercury Systems (MRCY) - Provider of sensor and safety-critical mission processing subsystems for aerospace, defense, and intelligence programs [20] - Benefiting from modernization in radar, electronic warfare, and C4I, with a revised upward earnings estimate of 31 cents per share for fiscal 2025 [21][22] - Stock has soared 36.2% in the past 12 months [22] Logitech (LOGI) - Global leader in PC peripherals and digital platforms, with products in PC navigation, gaming, and video security [22] - Experiencing recovery from the post-pandemic downturn, with three consecutive quarters of year-over-year sales growth [23] - Increasing hybrid work trends and partnerships with cloud providers like Zoom and Microsoft are key growth drivers [24] - Consensus earnings estimate for fiscal 2025 remains unchanged at $4.63 per share, with the stock declining 9.1% over the past year [25] TransAct Technologies (TACT) - Manufacturer of transaction-based printers and related products for vertical markets like gaming, financial services, and kiosks [26] - Benefiting from accelerated digital transformation and business automation, with trusted printers for transaction records [27] - Consensus earnings estimate for 2025 remains unchanged at a loss of 17 cents per share, with the stock plunging 41.7% over the past year [28]

Core Viewpoint - Stratasys (SSYS) has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the importance of changing earnings estimates in determining near-term stock price movements, making it a valuable tool for investors [2][4]. - An increase in earnings estimates typically leads to buying pressure and a potential rise in stock price, reflecting positive sentiment about the company's earnings outlook [3][5]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The system maintains a balanced distribution of 'buy' and 'sell' ratings, ensuring that only the top 5% of stocks receive a 'Strong Buy' rating, indicating superior earnings estimate revisions [9][10]. Earnings Estimate Revisions for Stratasys - For the fiscal year ending December 2024, Stratasys is expected to earn $0.04 per share, reflecting a -63.6% change from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Stratasys has increased by 29.6%, indicating a positive trend in earnings estimates [8].

Company Performance and Financials - The Zacks Consensus Estimate for SSYS' 2025 earnings is 33 cents per share, remaining steady over the past 30 days [1] - The consensus mark for SSYS' 2025 revenues is $579.64 million, indicating a year-over-year growth of 1.73% [1] - SSYS shares have lost 34.9% over the past year, underperforming the Zacks Computer and Technology sector's appreciation of 30.4% and the Zacks Computer – Peripheral Equipment industry's decline of 31.5% [2] - SSYS shares have underperformed industry peers like Immersion (IMMR), Alps Electric (APELY), and Logitech International (LOGI) over the past year [2] Technological Innovations and Product Portfolio - The Stratasys Neo Build Processor, developed in collaboration with Materialise, accelerates high-quality investment casting production and boosts SSYS' top-line growth [1] - SSYS' F3300 industrial platform offers faster print speeds, superior thermoplastic accuracy, and reduced downtime, making it a standout for factory floor manufacturing across industries [5] - SSYS' Origin 2 printer and Origin Cure system cater to demands for injection-molding quality in short production runs [5] - In the dental sector, SSYS' TrueDent solution is highly regarded for its disruption in both cost and fit for dentures [5] Growth Prospects and Industry Focus - SSYS' growth prospects remain strong with its technological innovations and expanding portfolio, focusing on high-growth industries like automotive, defense, aerospace, medical devices, and dental applications [3] - Despite recent stock underperformance, SSYS' innovative technologies, expanding product portfolio, and strong growth prospects in high-demand industries position it for sustained growth [6] Earnings Performance - SSYS beat the Zacks Consensus Estimate for earnings in two of the trailing four quarters, was in line once, and missed the other one, with an average surprise of 37.50% [4] Investment Opportunity - SSYS currently flaunts a Zacks Rank 1 (Strong Buy) and a Growth Score of B, offering a strong investment opportunity according to the Zacks proprietary methodology [6]

Core Viewpoint - Stratasys reported a mixed performance in its Q3 2024 earnings, with a slight earnings beat but a significant decline in revenues year-over-year, raising questions about future performance leading up to the next earnings release [1][2][3]. Financial Performance - Q3 2024 earnings were 1 cent per share, surpassing the Zacks Consensus Estimate of a loss of 2 cents per share, but down from non-GAAP earnings of 4 cents per share in the same quarter last year [2]. - Quarterly revenues fell 13.6% year-over-year to $140 million, missing the consensus mark by 3.08%, primarily due to macroeconomic factors affecting customer capital equipment spending [3]. - Product revenues decreased by 16.9% to $94.1 million, with System revenues plummeting 38.4% to $31.7 million, while Consumables revenues slightly increased by 1% to $62.4 million [4]. - Service revenues declined 6.1% to $45.9 million, although Customer Support revenues grew by 1.3% to $31 million [4]. - Non-GAAP gross profit fell 8.8% to $69.5 million, but the non-GAAP gross margin improved by 130 basis points to 49.6% [5]. Operating Expenses and Losses - Non-GAAP operating expenses decreased by 6.1% to $69.6 million, resulting in a non-GAAP operating loss of $0.1 million compared to a profit of $4.1 million in the previous year, with the margin contracting by 260 basis points to negative 0.1% [6]. - Adjusted EBITDA dropped 47.9% to $5.1 million [6]. Product Developments - The company experienced growth from new product launches, including Origin 2 and Stratasys Neo Build Processor, which expanded manufacturing applications and use cases [7]. - Strong demand was noted for offerings like F3300 and TrueDent, with the F3300 platform delivering high-quality thermoplastic parts [8]. Balance Sheet and Cash Flow - Stratasys ended Q3 with cash and short-term deposits of $143.95 million, down from $150.9 million in the previous quarter, and reported an operating cash outflow of $4.5 million, an increase from $2.4 million in the prior quarter [9]. 2024 Outlook - For 2024, management projects revenues between $570 million and $580 million, with non-GAAP earnings per share expected in the range of 3-7 cents [10]. - Gross margins are anticipated to be between 49% and 49.2%, and non-GAAP operating margins are expected to range from 0.6% to 1.3% [10]. - Operating expenses are estimated to be between $276 million and $278 million, with adjusted EBITDA projected at $25 million to $28 million [11]. Market Sentiment - The consensus estimate for Stratasys has shifted down by 33.33% recently, indicating a flatlining of estimates over the past month [14][15]. - Stratasys holds a Zacks Rank 2 (Buy), suggesting expectations for above-average returns in the coming months [17].

Company Performance - Stratasys Ltd (SSYS) saw its share prices climb after raising its earnings outlook for the year and unexpectedly turning an adjusted profit in the third quarter [1] - The company has become the official 3D Printing Partner of NASCAR, which will exclusively use Stratasys 3D printing technology for the design and production of parts and tools [1] Industry Impact - 3D printing impacts multiple industries, offering potential upside to Stratasys, including Aerospace, Automotive, Consumer Products, Dental, Medical, Education, Art and Fashion, Agriculture, Applications, Manufacturing, Investment Casting, Jigs and Fixtures, Production Parts, Rapid Prototyping, Packaging, Design, Composite Tooling, and Dentures [1] Market Performance - SSYS outperforms SPY [4] - Momentum is improving [5] - The price is above the 200-DMA and the July 6-month calendar range high, with the distance between the 50 and 200-DMAs narrowing [3]