Positive Q3 results drive Stratasys stocks up 25%
3D printer manufacturer recorded revenues for $162 million, +4.5%
Stratasys revenue for the third quarter of 2018 was $162.0 million, compared to $155.9 million for the same period last year. This result, which beat analysts’ expectations, drove Stratasys stocks up 25% over the past two days. The stock value, now standing at $24, is still very far from Stratasys’ all-time peak of 2013, when it touched $134, however, it may provide a good indication that the company – and by extent, the AM industry – is back on the upswing.
The recent peak, however, is not the highest of recent times, as Stratasys was back to nearly $26 per share last August. Nevertheless, it marks a nice upturn especially since it comes on the wake of moderately positive results. Among the highlights, the company’s GAAP gross margin was 48.7% for the quarter, compared to 48.3% for the same period last year. GAAP operating income for the quarter was $3.4 million, compared to operating loss of $6.9 million for the same period last year. The Company generated $5.0 million in cash from operations during the third quarter and ended the period with $348.9 million in cash and cash equivalents.
“We are pleased with our results this quarter, reflecting continued strength in our high-end systems orders, utilization rates and our parts services business,” said Elchanan (Elan) Jaglom, Interim Chief Executive Officer of Stratasys. “The level of engagement we are experiencing with customers in our key verticals is encouraging, as we highlighted at the recent International Manufacturing Technology Show. And we are excited about the innovation we plan to bring to market to drive incremental, long-term opportunities, as we continue to invest in new products and materials across our portfolio of FDM and PolyJet technologies, our new metal additive manufacturing platform, and advanced composite materials.”
Stratasys revenue guidance is now $670 to $680 million for the full fiscal year, in line with previous guidance of $670 to $700 million. Non-GAAP net income is expected to amount to $27 to $30 million, or $0.50 to $0.55 per diluted share, compared to previous guidance of net income of $16 to $27 million, or $0.30 to $0.50 per diluted share. Non-GAAP operating margins are unchanged at 4.5% to 6%.
Stratasys stocks up 25%: biggest jump in the YTD chart
Capital expenditures are projected at $25 to $35 million, compared to previous projection of $30 to $40 million. The Company’s guidance reflects increased investments in R&D, tools, materials, and additional resources aimed at expanding addressable markets by accelerating development efforts for the new metal additive manufacturing platform, further advancements based on its FDM and PolyJet technologies, and specific go-to-market initiatives in order to deepen customer engagement.
Given the expected ongoing negative impact of not recording a tax benefit on U.S. tax losses on the Company’s non-GAAP net income, the Company believes that the rate of growth in its non-GAAP operating income is the best measure of its performance. Non-GAAP earnings guidance excludes $34 million of projected amortization of intangible assets; $16 to $17 million of share-based compensation expense; net gains from divestitures of $23 to $22 and reorganization related expense of $6 to $7 million; and includes ($1) to $1 million in tax expenses (income) related to non-GAAP adjustments.
“We ended the quarter with positive cash generation and expense controls that drove efficiencies and maintained operational discipline as we continue to invest in research and development to expand our portfolio,” continued Jaglom. “We believe we have the best go-to-market execution strategy in the industry and are focused on delivering new, innovative solutions in the coming years that will drive strong, profitable top and bottom-line growth.”
