STRATASYS LTD. Q1 FY2025 earnings call

• The first quarter performance demonstrates resilience of recurring revenue model and high utilization rates. Consumables had 7% sequential growth. - Closed Fortissimo Capital’s $120 million strategic investment, boosting cash to ~$270 million with no debt. - Tariff situation: relatively exempt, monitoring new cycle, no material revenue impact expected. - New technology offerings: Launched Neo800 plus, FDM portfolio used in BOOM Supersonic’s XB-1 jet, Fortus 450mc Gen 3, new Antero materials for F900, and PolyJet ToughONE material.

Consolidated revenue for Q1 2025 was $136 million, down from $144.1 million in Q1 2024. Product revenue was $93.8 million (vs $99.2 million in Q1 2024), with system revenue at $31.2 million (vs $32.9 million) and consumables revenue at $62.6 million (vs $66.3 million), showing a 7% sequential growth. Service revenue was $42.2 million (vs $44.9 million in Q1 2024). GAAP gross margin was 44.3% (vs 44.4% in Q1 2024), Non-GAAP gross margin was 48.3% (vs 48.6%). GAAP operating expenses were $72.6 million (vs $88.4 million), Non-GAAP operating expenses were $62.6 million (vs $71.2 million). GAAP net loss was $13.1 million (vs $26 million in Q1 2024), Non-GAAP net income was $2.9 million (vs net loss of $1.7 million in Q1 2024). Cash from operating activities was $4.5 million (vs $7.3 million in Q1 2024), ending the quarter with $150.1 million in cash, cash equivalents, and short-term deposits.

• Reiterated full year 2025 revenues range $570M-$585M with sequential growth. - Reaffirmed non-GAAP gross margin, operating expenses, etc. - Raised earnings per share outlook: GAAP net loss range $64M-$49M, non-GAAP net income $24M-$30M.

• Tariff uncertainties with potential material revenue impact if not managed. - Market uncertainty causing customer deferral of major capital spending. - Competition in the additive manufacturing space.

Q: Clarification on tariffs and impact on cost of goods.

A: Pay 10% tariff on imports from Israel to US, not material.

Q: Economic situation in second half forecast.

A: Slight sequential increase, focus on EBITDA.

Q: Consumables activity utilization and April trends.

A: Higher utilization, expect full year 2025 consumables higher than 2024.

Q: Capital allocation and M&A.

A: Priority on inorganic growth aligned with strategy, focusing on profitability.

Q: R&D spending and run rate.

A: Focused R&D, not cut, consistent with plan.

Q: Competition from low end and F123 sales.

A: Focus on high end industrial manufacturing, reliability is key.

Q: Business deterioration and customer conversations.

A: Strong demand behind scene, but capital expenditure constraint.

Q: GenAI, robotics, automation connection.

A: Working on AI solutions, customer advisory boards, predictive service models.