Stratasys Q2 Revenue Falls, But It Reiterates Positive Outlook for FY23 and Beyond, Stock Slides

Stratasys Ltd SSYS reported a second-quarter FY23 revenue decline of 4.08% year-over-year to $159.8 million, beating the consensus of $153.2 million. Adjusted EPS of $0.04 beat the $(0.03) consensus.

The adjusted gross margin expanded by 90 bps to 48.5%. Adjusted operating income was $5.0 million, up from $1.9 million a year ago, margin improved by 197 bps to 3.1%.

Adjusted EBITDA grew 43% Y/Y to $10.6 million.

SSYS's planned inventory spending resulted in cash used in operations of $(23.2) million, compared to $(22.8) million in 2Q22. It held cash and cash equivalents of $205.4 million.

Dr. Yoav Zeif, Stratasys' Chief Executive Officer stated, "Leveraging our position in polymer additive manufacturing, resilient business model and strong financial profile, Stratasys once again delivered solid operating and financial results despite persistent macroeconomic headwinds. For the second consecutive quarter we delivered record revenues from both consumables and customer service, demonstrating the growth in utilization of our systems even as customer capital budgets remain constrained."

FY23 Outlook: SSYS reiterated FY23 revenue of $630 million-$670 million versus consensus of $643.09 million.

Stratasys maintained adjusted EPS of $0.12-$0.24, versus consensus of $0.17. 

It reiterated an Adjusted EBITDA of $35 million-$50 million and adjusted operating margins of 2.5% to 3.5%.

SSYS also reiterated the 2024 gross margin above 50% and positive free cash flow. It still expects 2026 revenues to grow organically to over $1 billion, with an adjusted EBITDA margin of over 15%.

Price Action: SSYS shares are trading lower by 6.44% at $15.68 on the last check Wednesday.