Stratasys(SSYS) - 2024 Q4 - Annual Report

Press Release Overview Stratasys Ltd. announced its Q4 and full-year 2024 financial results, highlighting strategic advancements, improved profitability, and a strong balance sheet Company Announcement 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] CEO Commentary 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] - 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] - The company holds $150.7 million in cash, cash equivalents, and short-term deposits with no debt, providing stability and growth options[3] - Anticipates a $120 million investment from Fortissimo Capital, further solidifying future growth[3] Key Financial Highlights 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 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 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 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 Stratasys anticipates improved revenue, enhanced non-GAAP margins, and significant growth in non-GAAP net income and adjusted EBITDA for 2025 2025 Outlook Details 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] - The investment from Fortissimo Capital is anticipated to close in the second quarter of 2025[10] Company Information & Disclosures 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 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] - 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 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] - 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] - Stratasys's solutions aim to help leading global organizations transform product design, enhance manufacturing and supply chain agility, and improve patient care[11] Cautionary Statement Regarding Forward-Looking Statements 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] - 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] - The company undertakes no obligation to publicly update or revise any forward-looking statements unless required by law[15] Use of Non-GAAP Financial Measures 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] - 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] - Investors should consider non-GAAP measures as a supplement to, not a substitute for or superior to, GAAP financial results[16] Investor Relations Contact 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] Consolidated Financial Statements 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 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 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 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 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 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 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 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 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 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 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% |