3D Systems (DDD) Q1 2025 Earnings Call May 13, 2025 08:30 AM ET Company Participants Mick McCloskey - Treasurer & Vice President of Investor RelationsDr. Jeffrey Graves - President and CEOJeffrey Creech - Executive VP & CFOTroy Jensen - Managing DirectorBrian Drab - Co-Group Head–IndustrialsAlek Valero - Equity Research Associate Conference Call Participants Greg Palm - Senior Research Analyst Operator Greetings. Welcome to three d Systems First Quarter twenty twenty five Earnings Call. At this time, all pa ...

Financial Data and Key Metrics Changes - For Q1 2025, consolidated revenues were $95 million, an 8% decline from the previous year, primarily due to a decrease in materials sales [30][31] - Non-GAAP gross profit margin was 35%, down from 40% in the prior year, driven by lower volumes and unfavorable price and mix [32] - EBITDA for the quarter was negative $23.9 million, a decline of $4 million from the previous year [34] Business Line Data and Key Metrics Changes - Industrial Solutions revenues were $53 million, a 7% decline, primarily due to lower materials sales, although printer sales and success in aerospace and defense markets provided some offset [31] - Healthcare Solutions revenues decreased by 9% to $41 million, with growth in services offset by declines in materials and flat printer sales [32] - Personalized healthcare and parts manufacturing revenues grew by 1817% and 1718% respectively, indicating strong performance in these segments [24] Market Data and Key Metrics Changes - The dental market is projected to have a total addressable market of $1 billion in the U.S., with Europe and Asia potentially doubling this figure [16][20] - The aligner market continues to grow, although there is volatility due to inventory management and just-in-time sourcing strategies by key manufacturers [40][42] Company Strategy and Development Direction - The company is focusing on cost reduction initiatives, aiming for $70 million in total cost savings over the next two years, with an immediate goal of achieving positive EBITDA [14][15][28] - The strategy includes a shift towards high-reliability markets such as aerospace, defense, and oil and gas, while maintaining a strong position in personalized healthcare [52][92] - The company is committed to maintaining R&D investment at over 20% of revenue, despite current economic challenges, to ensure long-term growth and innovation [11][80] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about weak sales due to frozen capital spending across most markets, with the exception of personalized healthcare, defense, and AI infrastructure [8][10] - The outlook for 2025 is conservative due to ongoing economic and geopolitical instabilities, leading to the withdrawal of full-year guidance [27][37] - The company remains optimistic about future growth once customer capital spending rebounds, supported by a strong product portfolio [37] Other Important Information - The company completed the sale of its GeoMagic asset portfolio, generating over $100 million in net proceeds, which strengthens its cash position [29][35] - The company is currently in a net cash positive position, with approximately $250 million in cash following the GeoMagic sale [36] Q&A Session Summary Question: Can you comment on aligner inventory and the movement to just-in-time? - Management noted that the aligner market continues to grow, but companies are becoming more sophisticated in inventory management, leading to increased volatility in forecasts [40][42] Question: What are the options regarding debt maturity in 18 months? - Management is exploring various options, including paying off debt or rolling it forward, and is currently assessing the balance sheet following the GeoMagic sale [78] Question: How will cost cuts affect growth? - Management emphasized the importance of maintaining R&D spending while focusing on profitable markets, particularly in healthcare and high-reliability industrial sectors [80][86]