3D Systems(DDD) - 2025 Q2 - Quarterly Results

Financial Performance Overview Q2 2025 revenue decreased 16% to $94.8 million, yet GAAP net income reached $104.4 million due to asset sales and debt extinguishment, supported by cost reductions and balance sheet restructuring Q2 2025 Financial Highlights Q2 2025 revenue decreased 16% to $94.8 million, yet GAAP net income reached $104.4 million due to asset sales and debt extinguishment, supported by cost reductions and balance sheet restructuring Q2 2025 Financial Performance (in millions, except EPS) | Financial Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $94.8M | $113.3M | $189.4M | $216.2M | | Gross Profit Margin (GAAP) | 38.1% | 41.6% | 36.4% | 40.7% | | Operating Loss (GAAP) | ($15.4M) | ($26.4M) | ($52.1M) | ($66.3M) | | Net Income (Loss) (GAAP) | $104.4M | ($27.3M) | $67.5M | ($43.3M) | | Diluted EPS (GAAP) | $0.57 | ($0.21) | $0.37 | ($0.33) | | Adjusted EBITDA | ($5.3M) | ($12.9M) | ($29.3M) | ($33.0M) | | Non-GAAP Diluted EPS | ($0.07) | ($0.14) | ($0.22) | ($0.31) | - Key operational and strategic achievements in Q2 2025 include: - Revenue was led by double-digit growth in Medical Technology and Aerospace & Defense markets[5] - Cost reduction programs resulted in over $20 million of savings in operating expenses[5] - A successful balance sheet restructuring combined debt retirement, refinancing, and a share repurchase[5] - Net income was significantly boosted by gains on the sale of the Geomagic software platform and gains on the extinguishment of debt[5] Management Commentary CEO highlighted improved profitability from cost controls despite a 16% YoY revenue decline, with strong growth in Medical Technology and Aerospace & Defense offsetting other market weaknesses, alongside successful balance sheet restructuring - Profitability improved due to an intense focus on cost structure and operational efficiencies, including footprint consolidation and workforce restructuring, which are on track to continue through mid-2026[6] - Consolidated revenue declined 16% YoY due to softness in customer capex spending, attributed to tariff volatility, however, excluding the divested Geomagic business, revenue grew roughly 8% sequentially from Q1[6] - Strong performance was noted in specific markets: - Medical Technology: Personal Health Services grew 13% YoY and 16% sequentially[6] - Aerospace & Defense: Revenue grew 84% YoY and 53% sequentially, now exceeding $30 million annually[6] - Dental: The business was down 3%, driven by a 19% sequential decline in the aligner market[6] - The company bolstered its balance sheet by retiring $88 million in debt at a discount, extending maturities on remaining debt to 2030, and repurchasing 8 million shares of common stock[6] Detailed Financial Results Presents a comprehensive analysis of Q2 2025 performance, including segment results, liquidity, and full financial statements Q2 2025 Performance Analysis Q2 2025 revenue declined 16% to $94.8 million, GAAP gross margin fell to 38.1%, but net income surged to $104.4 million and Adjusted EBITDA loss narrowed to $5.3 million due to lower operating expenses Q2 2025 Revenue and Gross Profit Margin (in millions, except percentages) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $94.8M | $113.3M | -16% | | Gross Profit Margin (GAAP) | 38.1% | 41.6% | -3.5 p.p. | | Non-GAAP Gross Profit Margin | 39.2% | 40.9% | -1.7 p.p. | - Net income attributable to 3D Systems Corporation increased by $131.7 million to $104.4 million compared to the prior year period[10] - Adjusted EBITDA improved by $7.6 million to a loss of $5.3 million, primarily driven by a reduction in operating expenses[10] Segment Performance Healthcare Solutions revenue decreased 8% to $45.0 million, while Industrial Solutions revenue declined 23% to $49.8 million in Q2 2025 Segment Revenue (in thousands) | Segment Revenue (in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Healthcare Solutions | $45,020 | $48,900 | $86,336 | $94,313 | | Industrial Solutions | $49,818 | $64,352 | $103,042 | $121,844 | | Total | $94,838 | $113,252 | $189,378 | $216,157 | - Healthcare Solutions: Revenue decreased 8% to $45.0 million YoY[8] - Industrial Solutions: Revenue decreased 23% to $49.8 million YoY[9] Financial Liquidity Cash and cash equivalents stood at $116.4 million as of June 30, 2025, a $55.0 million decrease from year-end 2024, primarily due to operating and financing outflows offset by investing inflows - Cash and cash equivalents totaled $116.4 million at the end of Q2 2025, down $55.0 million from December 31, 2024[11] - The decrease in cash resulted from: - Cash used in operations: ($59.6 million)[11] - Cash used in financing activities: ($97.3 million)[11] - Cash provided by investing activities: $112.9 million[11] - At June 30, 2025, total debt, net of deferred financing costs, was $122.6 million[11] Financial Statements Presents unaudited condensed consolidated financial statements for the period ended June 30, 2025, including Balance Sheets, Statements of Operations, and Cash Flows Condensed Consolidated Balance Sheets Total assets decreased to $587.8 million, total liabilities significantly reduced to $344.4 million due to lower debt, and total stockholders' equity increased to $241.2 million Condensed Consolidated Balance Sheets (in thousands) | Balance Sheet Item (in thousands) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $116,358 | $171,324 | | Total current assets | $390,122 | $428,830 | | Total assets | $587,844 | $608,846 | | 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 Q2 2025 revenue was $94.8 million, with a gross profit of $36.2 million, and a $125.7 million gain on disposition resulted in a net income of $104.4 million and diluted EPS of $0.57 Condensed Consolidated Statements of Operations (in thousands) | Income Statement Item (in thousands) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total revenue | $94,838 | $113,252 | | Gross profit | $36,150 | $47,098 | | Loss from operations | ($15,350) | ($26,412) | | Gain on disposition | $125,681 | $0 | | Net income (loss) attributable to 3D Systems | $104,436 | ($27,258) | | Diluted EPS | $0.57 | ($0.21) | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, operating activities used $59.6 million, investing activities provided $112.9 million, and financing activities used $97.3 million, leading to a net cash decrease of $38.9 million Condensed Consolidated Statements of Cash Flows (Six Months Ended) (in thousands) | Cash Flow Item (Six Months Ended) (in thousands) | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | 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, cash equivalents and restricted cash | ($38,935) | ($138,825) | Corporate Governance and Other Information This section covers updates on the Board of Directors and details regarding the upcoming conference call for Q2 2025 results Board of Directors Update The Board of Directors unanimously rejected the contingent resignation of Audit Committee chair Ms. Claudia Drayton, citing her critical role in remediating internal control weaknesses - The board of directors unanimously voted to reject the contingent resignation of Audit Committee chair Ms. Claudia Drayton[13] - The decision was based on the determination that her resignation would not be in the best interests of the company, particularly due to her ongoing leadership in remediating material weaknesses in internal financial reporting controls[13] Conference Call Information A conference call and webcast to discuss Q2 2025 results is scheduled for Tuesday, August 12, 2025, at 8:30 a.m. Eastern Time - A conference call to discuss Q2 2025 results is scheduled for Tuesday, August 12, 2025, at 8:30 a.m. Eastern Time[12] Non-GAAP Financial Measures This section explains the company's use of non-GAAP financial measures and provides detailed reconciliations to their GAAP equivalents Explanation of Non-GAAP Measures Management utilizes non-GAAP measures like gross profit, operating expense, Adjusted EBITDA, and diluted EPS to offer additional insight into core business trends by excluding variable or infrequent items - Management believes non-GAAP measures provide useful additional insight into underlying business trends and period-over-period comparisons by excluding items that may be highly variable, unusual, or infrequent[25] - Items excluded from GAAP results to arrive at non-GAAP measures include: - Amortization of intangible assets[26] - Acquisition and divestiture-related costs[26] - Stock-based compensation expenses[26] - Restructuring charges, impairment charges, and divestiture gains/losses[27] - Costs related to significant or unusual litigation[27] Reconciliation of GAAP to Non-GAAP Measures Provides detailed reconciliations of GAAP to non-GAAP measures for gross profit, operating expense, Adjusted EBITDA, and diluted loss per share for Q2 and YTD 2025 and 2024 Non-GAAP Gross Profit Reconciliation Q2 2025 GAAP gross profit was $36.2 million (38.1% margin), adjusted to non-GAAP gross profit of $37.2 million (39.2% margin) after accounting for specific expenses Q2 Gross Profit (in millions) | Q2 Gross Profit (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Gross profit (GAAP) | $36.2 | $47.1 | | Amortization expense | $0.2 | $0.3 | | Restructuring expense | $0.8 | ($1.0) | | Gross profit (Non-GAAP) | $37.2 | $46.4 | | Gross Profit Margin (Non-GAAP) | 39.2% | 40.9% | Non-GAAP Operating Expense Reconciliation Q2 2025 GAAP operating expenses were $51.5 million, which adjusted to non-GAAP operating expenses of $46.8 million after excluding specific items Operating Expense (in millions) | Operating Expense (in millions) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Operating expense (GAAP) | $51.5 | $73.5 | | Adjustments | ($4.7) | ($9.3) | | Non-GAAP operating expense | $46.8 | $64.2 | Adjusted EBITDA Reconciliation Adjusted EBITDA improved to a loss of $5.3 million in Q2 2025, reconciled from GAAP net income of $104.4 million by adjusting for various items including a $125.7 million gain on disposition Adjusted EBITDA Reconciliation (in millions) | Adjusted EBITDA Reconciliation (in millions) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income (loss) (GAAP) | $104.4 | ($27.3) | | Adjustments (incl. taxes, D&A, gain on disposition, etc.) | ($109.7) | $14.4 | | Adjusted EBITDA (Non-GAAP) | ($5.3) | ($12.9) | Non-GAAP Diluted Loss per Share Reconciliation Q2 2025 GAAP diluted EPS was $0.57, which adjusted to a non-GAAP diluted loss per share of ($0.07) after excluding the gain on disposition and other items Diluted EPS Reconciliation (in dollars) | Diluted EPS Reconciliation (in dollars) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Diluted income (loss) per share (GAAP) | $0.57 | ($0.21) | | Gain on disposition | ($0.69) | $0.00 | | Other adjustments (net) | $0.05 | $0.07 | | Non-GAAP diluted loss per share | ($0.07) | ($0.14) |