Stratasys(SSYS) - 2025 Q2 - Quarterly Report

Financial Statements Consolidated Balance Sheets 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 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 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] Consolidated Statements of Cash Flows 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 Note 1. Business Description and Basis of Presentation 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] - 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] Note 2. New Accounting Pronouncements 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][19][20] Note 3. Certain Transactions 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] - During the first half of 2025, the company completed several small acquisitions, including Forward AM and certain assets from Nexa3D Inc[24] Note 4. Revenues 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] Note 5. Inventories 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 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] - 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] Note 7. Net Loss Per Share 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 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] Note 9. Fair Value Measurements 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] Note 10. Derivative instruments and hedging activities 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][44] - 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][49] Note 11. Equity 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] - 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][52] 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 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] Note 13. Segment 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] Note 14. Restructuring costs 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] - As of June 30, 2025, the accrued liability for the 2024 Restructuring Plan was $3.6 million[61]