The overall first quarter of 2022 for Stratasys (NASDAQ: SSYS) could be the strongest in six years. In its latest earnings report for the period ending March 31, 2022, CEO Yoav Zeif suggested this was “a great start to an exciting year” for the company, which delivered solid results that include contributions from across all platforms, driving top-line growth and improved margins.
“All of our technologies grew, and I’m happy to say that all of our key businesses showed improvement compared to our pre-Covid first quarter of 2019. We are particularly excited by the early momentum from our new Origin P3, H350 SAF, and NEO systems, designed specifically for high-volume production of end-use parts,” pointed out Zeif during an earnings call with investors.
According to the report published May 16, 2022, Stratasys announced first-quarter revenue of $163.4 million, a 22% growth over the same period in 2021 and the highest first-quarter revenue in six years. Product revenue in the first quarter was $113.1 million, an increase of 45.2% compared to the same period last year. System sales drove most of the rise in product revenue, up 36.7% and 16.4% higher than the same period in pre-Covid 2019.
System sales reflected the highest first-quarter total in five years, strengthened by the launch of the Origin One in mid-February and the first full quarter of the H350 sales. Stratasys also says it achieved “exceptional results” in both consumables and services thanks to its growing install base. Here, the higher-margin consumable business showed a revenue increase of 16.1%.
Consumables revenue also exceeded the first quarter of 2019 as well as the fourth quarter of 2021, reflecting the impact of solid system sales throughout 2021. Service revenue was $50.3 million, an increase of 14.8% compared to the same period last year and slightly higher than the first quarter of 2019.
The positive revenue results were partially offset by a net loss of $20.9 million, or 32 cents per share, compared to a net loss of $18.9 million or 32 cents per share for the same period last year. Furthermore, Chief Financial Officer Eitan Zamir added that Stratasys ended the quarter with $475.6 million in cash, cash equivalents, and short-term deposits, compared to $502.2 million at the end of the fourth quarter of 2021, bust said they remain well-funded and well-positioned to capitalize on value-enhancing market opportunities as they arise.
During the first quarter, Stratasys expanded its penetration further into applications for aerospace, automotive, and fashion, tailored towards industry-specific solutions. For example, working with partner Lockheed Martin, it uniquely qualified a high-performance and tailored material for aerospace end-use parts. While in automotive, Radford Motors has become the second auto OEM using all five of Stratasys’ technologies for designing, prototyping, tooling, and building final parts used in vehicle production. As far as fashion goes, Stratasys officially launched the Stratasys J850 TechStyle 3D printer, a PolyJet machine specifically designed for printing textiles, clothing, accessories, and footwear, described as an industry first.
Zeif said that there are many changes taking place across industries and believes that this clearly shows the path that manufacturers have chosen, making their production lines more efficient, less costly, and more sustainable with Stratasys technology. The executive also highlighted the White House’s Additive Manufacturing Forward Program (AM Forward), an initiative revealed earlier in May to help more companies get involved with 3D printing. The Biden Administration will support this effort with various current and proposed Federal initiatives that will support more resilient supply chains and onshoring manufacturing to help the economy.
“The program is specifically designed to help suppliers to companies like Raytheon and Lockheed invest more in additive manufacturing, GE Aviation, Honeywell, and Siemens are also some of the initial participant companies,” explained Zeif to investors. “While many of our largest customers are building out sophisticated advanced manufacturing centers, it’s their suppliers who manufacture a lot of their end-use parts.”
As far as the general guidance for the full year 2022, management is tightening its revenue range to between $685 million and $695 million and expects net losses of at least $67 million, or $1 per share. This suggestion is based on current market conditions, including shutdowns in parts of China, currency fluctuations, and continued supply chain constraints.
Zamir specifically noted that Stratasys’ guidance continues to include a full-year anticipated contribution from MakerBot, as the recently announced business combination with Ultimaker (Ultimaker has acquired 54.4% of Makerbot, Stratasys owns the rest) has not yet closed. The transaction is to be margin accretive upon closing and could lead to an updated outlook for this year from Stratasys’ management team.
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