Stratasys Reports Record Earnings, but Lowers Their Guidance for Fiscal 2014

After HP announced their new 3D printing ambitions last week, investors of two of the largest 3D printing companies in the world, Stratasys (NASDAQ:SSYS) and 3D Systems, have been a bit on the cautious side.  Many who own shares in Stratasys have hoped that today’s 3rd quarter financial results would ease some of the concerns we have seen within the market pertaining to the larger 3D printing players.

Although the company has reported a significant year-over-year revenue and earnings boost, the news is not all good.

Revenue for the quarter has come in at $203.6 million. This represents a 62% increase over non-GAAP revenue seen in last year’s 3rd quarter. Non-GAAP income also saw a significant boost over last year’s numbers at $30.1 million, or $0.58 per diluted share, as compared to $20 million, or $0.45 per diluted share, seen last year during the same period. Other highlights of the report include the following:

• Annual organic revenue growth of at least 25%.
• Non-GAAP effective tax rate of 10% to 15%.
• Non-GAAP net income as a percent of sales of 16% to 21%.
• Non-GAAP operating income as a percent of sales of 18% to 23%.

Overall, the company beat analysts’ expectations of $0.57 per share, as well as their estimation of $195.5 million in revenue, quite handily.

“Our organic revenue growth in the third quarter was an impressive 35%, as demand for our industry-leading products and services remained very strong,” said David Reis, Chief Executive Officer of Stratasys. “We believe this trend validates our leadership position, supports our strategic initiatives, and reflects favorably on the contributions made by our recent acquisitions. As MakerBot sales continue to impress, sales of our higher-margin products remained a key growth driver during the third quarter, which had a positive impact on margins during the period. Overall, we are very pleased with our third quarter results, as we continued to recognize strong demand across a wide range of products and applications.”

Despite these outstanding numbers, the stock is currently down in premarket trading, which is likely due to the fact that Stratasys has lowered their guidance for the fiscal year from $2.25-$2.35 per diluted share to $2.21-$2.31 per diluted share. This decision was made based on an increase in expenses stemming from the company’s recent acquisition of GrabCAD, and the increase in realized development costs. With this said, the company will keep their revenue guidance for the year unchanged at between $750 and $770 million.

“We continue to observe strong market demand, and we are excited about our several new product launches. And finally, we have reiterated our growth forecasts and look forward to a strong finish to 2014,” concluded Reis.

For the quarter the company sold a total of 10,965 3D printers, with high-end FDM and PolyJet systems and materials leading the way, namely the Objet1000. With the introduction of several new machines this quarter (further details here), the quarter ahead should remain an exciting one.

Are you an investor in Stratasys? Let’s hear your thoughts on today’s report in the Stratasys 3rd Quarter 2014 financials forum thread on 3DPB.com.