Leading 3D printer OEM Stratasys has reported its financial results for the second quarter of 2019. Compared to the same period in 2018, the company experienced a 4.1 percent decrease in revenue from $170.2 million to $163.2 million in Q2 2019. Non-GAAP gross margin for the quarter was 52.5 percent, no change compared to Q2 2018.
Non-GAAP operating income for Q2 2019 was reported at $9.1 million, compared to $10.6 million in Q2 2018. Using $3.8 million of cash from operations during Q2 2019, Stratsys ended the quarter with $366.3 million in cash and cash equivalents.
Giving reasons for the performance, which fell short of expectations, interim CEO Elan Jaglom said that though the company experienced strong growth in the Americas, this was offset “mainly by significant economic weakness in Europe.” When the climate improves, the CEO added that the company believes it is “well positioned to return to growth in Europe.”
In a further update on the Q2 2019 earnings call, Jaglom hinted at “several additional announcements” coming later this year and early 2020. This includes new product launches, which Vice Chairman David Reis confirmed “will have positive impact in Q4.”
Stratasys Q2 2019 by division
Stratasys’ revenue is reported in two divisions, one encompassing the company’s Products (3D printers, materials etc.) and the other it’s Services, like Stratasys Direct Manufacturing.
Products provides the largest amount of the company’s revenue, though for Q2 2019 of the two divisions it suffered the highest loss. For the three months ended June 30 2019, Stratasys’ Products revenue was reported at $110.3 million, a 6.8 percent decrease compared to Products revenue in the same period in 2018 which was $118.4 million.
Services on the other hand experienced a year on year growth of 1.9%, with a revenue of $52.8 million in Q2 2018 compared to $51.8 million in Q2 2019.
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New product launches and guidance for full year 2019
In addition to its Q2 2019 earnings, Stratasys issued guidance for earnings across the full year. For this, the said it expects to generate a revenue between $670 and $700 million. Guide non-GAAP net income is $30 to $38 million, or $0.55 to $0.70 per diluted share. And it expects non-GAAP operating margins of 5.5% to 6.5%. Capital expenditures are projected at $30 to $45 compared to previous guidance of $45 to $60 million.
Though at this point we can only speculated about new products coming from the company by the end of the year, through its MakerBot subsidiary Stratasys has already made headway into its release schedule, confirming the launch of the METHOD X 3D printer, successor to the METHOD launched December 2018.
Summarizing the report, Jaglom said that that “despite relatively flat revenue growth” the company is “pleased that our emphasis on operational efficiency delivered earnings and profitability while we continue to invest in new products and strengthen our R&D efforts to expand our addressable markets.” The company is also still searching for a permanent CEO following the departure of Ilan Levin in May 2018. Giving update on the search status, Jaglom added “we continue to meet with excellent candidates around the world.”
Stratasys’ full financial results for Q2 2019 can be accessed online.
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Featured image shows PolyJet 3D printed samples from Stratasys. Phto by Beau Jackson