Stratasys(US:SSYS)2024-03-07 17:20Financial Data and Key Metrics Changes - In Q4 2023, consolidated revenue was $156.3 million, down 1.9% year-over-year, but up 1.3% when adjusted for divestitures [24] - For the full year 2023, consolidated revenue was $628 million, down 3.7% compared to 2022, but up 1.3% when excluding the MakerBot divestiture [10][26] - Adjusted EPS for 2023 was $0.11, with a GAAP net loss of $123.1 million or $1.79 per diluted share [31][32] - GAAP gross margin for Q4 was 44.7%, compared to 43.1% for the same period last year [27] Business Line Data and Key Metrics Changes - Product revenue in Q4 declined by 0.7% to $110.4 million, with system revenue down 13.7% to $47.4 million [24][25] - Consumables revenue reached a record $63 million in Q4, up 11.9% year-over-year, reflecting strong utilization of existing systems [25][41] - Service revenue was $45.9 million for Q4, down 4.6% year-over-year, but grew 3.6% when excluding divestitures [25][26] Market Data and Key Metrics Changes - 34% of revenues in 2023 came from manufacturing, up from 32.5% in 2022, indicating a shift towards end-part manufacturing [11][50] - The company expects pent-up demand to re-accelerate growth in system sales as macroeconomic conditions improve [10][45] Company Strategy and Development Direction - The company is focusing on advancing additive manufacturing applications and enhancing operational efficiencies to drive profitability [9][10] - The launch of the F3300 printer is expected to address pent-up demand and support scalable production [12][71] - The strategic review process is ongoing, with the Board evaluating avenues to maximize value [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about recovery in the macro environment, citing early signs of improvement in capital spending [45][46] - The company anticipates revenue growth in 2024 to range between $630 million to $645 million, with improved gross margins [33][34] - Management highlighted the importance of customer engagement and utilization of existing systems as indicators of future growth [41][66] Other Important Information - The company generated $7 million in operating cash flow in Q4, excluding one-time costs related to M&A activities [32] - The company ended Q4 with $162.6 million in cash and equivalents, down from $184.6 million at the end of Q3 [32] Q&A Session Summary Question: What are the prospects for consumables growth in 2024? - Management indicated that consumables revenue is expected to continue growing, with Covestro contributing approximately $4 million to $5 million per quarter [40][41] Question: Is the expected bounce back in system demand included in 2024 revenue guidance? - Management confirmed that the anticipated recovery is factored into the guidance, emphasizing the sensitivity of hardware sales to macroeconomic conditions [43][45] Question: What percentage of sales are going into production applications? - Management reported that 34% of sales were directed towards manufacturing applications, up from 32.5% the previous year, indicating a strategic focus on this area [50] Question: How does the company plan to achieve positive cash flow? - Management noted that recent quarters have shown positive operating cash flow when excluding one-time costs, and they expect this trend to continue in 2024 [52] Question: What is the growth rate in the dental market? - Management refrained from providing exact revenue figures but confirmed significant growth in the dental sector, focusing on non-discretionary restorative applications [54][56]