Stratasys: Leading the Way in Additive Manufacturing Solutions
2023-07-30
Stratasys Limited, a technology company, held its first-quarter 2023 earnings call, where the CEO and CFO presented the company's financial results and business outlook. The meeting focused on the company's additive manufacturing (AM) platform and its goal to manage the entire digital thread of the additive manufacturing workflow. Stratasys aims to simplify the process of printing parts by offering a unique solution that eliminates the need for multiple software. They plan to introduce more products with added value and believe that scaling additive manufacturing in manufacturing will present a significant opportunity. The company emphasized its unique position as a system producer with access to customer needs and the largest installed base, allowing them to create an ecosystem. They expressed optimism about their software and their commitment to delivering long-term value to customers through hardware, materials, software, service, and use cases.
During the meeting, the company highlighted its strategic shift towards providing a comprehensive solution for additive manufacturing. They emphasized their focus on managing the entire digital thread of the additive manufacturing workflow, rather than just the MES part of the business. This shift indicates their dedication to offering a seamless and efficient solution for additive manufacturing processes.
To address the challenge of using multiple software for printing parts, Stratasys plans to offer a single platform across their technologies. They currently have a basic solution called GrabCAD Print and intend to introduce more products with additional added value. This commitment to continuous improvement and expansion in the additive manufacturing space demonstrates their dedication to meeting customer needs and staying at the forefront of the industry.
The CEO expressed optimism about the significant opportunity in additive manufacturing, estimating it to be above $3 billion in the next two to three years. This positive outlook reflects the company's confidence in its growth potential in this market.
One of Stratasys' key advantages is its unique position as a system producer with access to the largest installed base. This allows them to create an ecosystem and provide value to customers through hardware, materials, software, service, and use cases. By offering a comprehensive solution and leveraging their existing customer base, the company aims to differentiate itself from competitors and capture a larger share of the additive manufacturing market.
The CEO's optimism about their software and the emphasis on building foundations for long-term success highlight the company's commitment to innovation and sustainable growth.
Overall, Stratasys' focus on its additive manufacturing platform and the development of an ecosystem around it presents an exciting opportunity for growth and differentiation in the market. Their strategic shift towards providing a comprehensive solution, coupled with their unique position in the industry, positions them well to capitalize on the growing demand for additive manufacturing solutions.
The company's outlook for the full year of 2023 includes a projected GAAP net loss of $78 million to $57 million, or $1.12 to $0.83 per diluted share. However, they anticipate a non-GAAP net income of $9 million to $17 million, or $0.12 to $0.24 per diluted share. The company expects adjusted EBITDA to be in the range of $35 million to $50 million for the year, with capital expenditures projected to range between $20 million to $25 million. In the medium term, the company aims to achieve double-digit non-GAAP operating margins, with non-GAAP gross margins above 50% and positive free cash flow starting in 2024. By 2026, they expect revenue from organic growth to surpass $1 billion with adjusted EBITDA margins over 15%.
Stratasys' key drivers of business include various verticals such as aerospace, automotive, dental, and medical. The company has experienced success in the government/aerospace sector and sees growing demand in the automotive industry. They are particularly optimistic about the future of regenerative medicine. Stratasys is introducing new products and technologies, including the PolyJet J55, the J3, a new carbon fiber machine, and liquid resin solutions. They are focusing on use cases and have implemented a new strategy. Manufacturing and end-use cases, especially consumables, are expected to drive gross margins. The acquisition of Covestro is also expected to contribute to higher gross margins. The company is making progress in the software business and investing in a new platform.
The participants in the Stratasys Q1 2023 earnings call were Yonah Lloyd, Vice President, Investor Relations and Chief Communications Officer; Dr. Yoav Zeif, Chief Executive Officer; and Eitan Zamir, Chief Financial Officer. The call was led by Yonah Lloyd, who introduced Dr. Yoav Zeif and Eitan Zamir. These key executives provided insights into the company's 2023 first-quarter financial results and discussed the business highlights.
Stratasys has a strong balance sheet with no debt and $288 million in cash and equivalents. They have been focusing on technology-driven businesses, particularly in the dental industry. The company has introduced innovative solutions such as the TrueDent resin, a monolithic multicolored 3D printer dental solution that allows dental labs to create natural-looking dentures with accurate tooth structures, gum shade, and translucency in one continuous print. They have also launched the J3 DentaJet printer, which has received positive feedback and increased production volume for customers. In the medical field, Stratasys has signed an agreement with Ricoh USA to provide on-demand 3D printed anatomic models for clinical settings. They have also entered into a joint development and commercialization agreement with CollPlant Biotechnologies to develop bio-printing solutions for regenerative breast implants and other human tissues and organs.
In conclusion, Stratasys' focus on its additive manufacturing platform, coupled with its commitment to innovation and customer value, positions the company for growth and success in the additive manufacturing market. With a comprehensive solution, a unique position as a system producer, and a strong balance sheet, Stratasys is well-positioned to capitalize on the growing demand for additive manufacturing solutions.