Stratasys Q3 Results Overview

Stratasys continues its excellent year-on-year non-GAAP revenue increase, with a 39% increase shown in the excellent Quarter 3 results. The long string of acquisitions makes the breakdown fascinating reading — within the past year Stratasys has acquired not only leading rival Objet but also the world’s best-known brand in home 3D printing, MakerBot. Including MakerBot, the company has shipped a cumulative 64,855 systems to date.

Given the hype factor, and anti-hype factor (such as the poor, yet now widely referenced recent Atlantic article ‘Almost No-one Buys 3D Printers’) by non-specialist commentators context is required: this is good news and a continuing strong increase in sales.

Q3 Financial Results Summary:

• Non-GAAP revenue (including MakerBot from August 15^th) of $126.1 million for the third quarter of 2013 represents a 39% increase over the $90.9 million Stratasys and Objet pro forma combined revenue for the same period last year. GAAP revenue (including MakerBot) for the third quarter of 2013 was $125.6 million.
• Non-GAAP revenue (excluding MakerBot) increased organically by 26% for the third quarter over last year’s Stratasys and Objet pro forma combined revenue.
• Non-GAAP revenue from MakerBot was $11.6 million for the third quarter representing the period following the transaction’s close onAugust 15, 2013. GAAP revenue contribution from MakerBot for the third quarter was $11.4 million.
• Non-GAAP net income (including MakerBot) was $20.0 million for the third quarter, or $0.45 per diluted share, compared to Stratasys and Objet pro forma combined $16.6 million, or $0.41 per diluted share, reported for the same period last year.
• GAAP net income (including MakerBot) for the third quarter was a loss of $6.6 million, or ($0.16) per share, versus a Stratasys and Objet pro forma loss of $2.8 million, or ($0.07) per share, for the same period last year.
• The company invested a net amount of $12.0 million in R&D during the third quarter, representing 9.5% of net sales.
• Cash, investments and bank deposits balance at the end of the third quarter was $616.5 million, or $12.65 per share.
• On a combined pro forma basis, including MakerBot, the company has shipped a cumulative 64,855 systems worldwide as of September 30, 2013.

“Organic revenue growth accelerated in the third quarter as synergies resulting from the merger between Stratasys and Objet continued to develop,” said David Reis, chief executive officer of Stratasys. “We observed strong growth across multiple product lines that address an expanding range of applications. We also sustained strong gross margins during the period, which was a contributing factor to our record profitability. We are especially pleased by the contribution made by MakerBot, which added $11.6 million in revenue during the period. We are very pleased with our third quarter results.”
Business Highlights:

• Completed the acquisition of MakerBot, a leading manufacturer within the rapidly growing desktop 3D printing category.
• Introduced two new systems, the Solidscape 3Z MAX 3D printer and the MakerBot Digitizer Desktop 3D Scanner; as well as two new materials for the MakerBot platform, including flexible filament and a dissolvable support material.
• Recognized tangible revenue synergies from the sales, marketing and service team integration initiatives that resulted from the merger ofStratasys and Objet.
• Initiated a pilot program with the UPS Store, placing uPrints in six locations, enabling UPS Store customers to have 3D designs printed onsite.
• Invested heavily in global sales, marketing and channel infrastructure, including the opening of a local sales office in Singapore, and the signing of a distribution agreement with Aurora Group, a leading provider of office automation equipment in China.
• Exercised an option to acquire the remaining holdings from Fasotec in Stratasys Japan, with Stratasys Japan becoming wholly owned and operated by Stratasys Ltd.
• Completed a public offering of 5,175,000 ordinary shares at a public offering price of $93.00 per share, with net offering proceeds to Stratasys approximating $462.9 million.

Stratasys share growth over the past month by daily variance

To close, some insight from Stratasys’ online investor webcast:

‘”As we enter the fourth quarter, we believe the acceleration in our organic growth rate, combined with the positive impact from our recent acquisition of MakerBot, will contribute to a strong finish to the year. Looking beyond 2013, we are well positioned to sustain our positive momentum as we accelerate our rate of new product introductions, and prepare to capitalise on additional inorganic growth opportunities. In addition, our industry remains ripe for growth as new and innovative applications continue to emerge for our technology. We are very excited about the future.” – David Reis, CEO, Stratasys Ltd.