Stratasys CEO Touts Turnaround: Strong Market Gains, Cost Cuts Drive Q3 Beat, Guidance Raised

Stratasys, Ltd SSYS stock surged after the company reported fiscal third-quarter 2024 revenue of $140.01 million, down 13.6% year-on-year, beating the analyst consensus estimate of $139.49 million.

• The adjusted gross margin expanded to 49.6% from 48.3% a year ago.
• Adjusted EPS of $0.01 beat the analyst consensus loss estimate.
• The company’s adjusted operating loss was $100,000 for the period, compared to a much larger loss of $4.1 million in the same period the previous year.
• Adjusted net income (profit) was $400,00 for the period, which is a decrease from $2.4 million in the same period the previous year.
• Adjusted EBITDA fell to $5.1 million from $9.8 million the prior year.
• The company used $4.5 million in cash for its operating activities during the period, which is an improvement compared to the $12.7 million in cash used in the same period a year ago.
• Stratasys held cash and equivalents of $143.96 million.

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Dr. Yoav Zeif, CEO of Stratasys, said the company’s flagship F3300 platform is gaining strong market traction. The ongoing expansion into the Aerospace, Automotive, and Healthcare sectors continues to grow.

Zeif also highlighted the company’s return to non-GAAP profitability in third-quarter, showcasing the effective execution of the business strategy despite ongoing revenue challenges.

Zeif also observed steady growth in recurring revenue from Consumables, driven by increased utilization of FDM technology in manufacturing, which partially offsets weaker hardware sales due to macroeconomic factors.

FY24 Outlook: Stratasys reiterated the revenue outlook of $570 million-$580 million against a consensus of $631.63 million.

The restructuring plan is ahead of schedule. Stratasys expects to achieve $40 million in annual savings starting first-quarter next year, positioning the company for higher revenue growth, profitability, and cash flow in 2025 once market conditions stabilize.

The company expects an adjusted EPS outlook of $0.03-$0.07 (prior $0.01-$0.05) versus the consensus $0.15.

Stratasys expects adjusted EBITDA of $25 million-$28 million (prior $24 million-$27 million) and an adjusted operating margin of 0.6%-1.3% (prior 0.5%-1.0%).

Stratasys stock plunged over 40% year-to-date. Multiple analysts slashed their price targets on the stock after its disappointing second-quarter results and fiscal 2024 guidance.

Price Action: SSYS stock is up 18.7% at $9.96 premarket at the last check on Wednesday.

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