Stratasys Ltd 6-K, filed Aug 3, 2022
Stratasys Ltd. (SSYS)
About this 6-K
Stratasys Ltd filed this 6-K on August 3, 2022.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the month of August 2022
Commission File Number 001-35751
STRATASYS LTD.
(Translation of registrant’s name into English)
| c/o Stratasys, Inc. 7665 Commerce Way Eden Prairie, Minnesota 55344 |
1 Holtzman Street, Science Park P.O. Box 2496 Rehovot, Israel 76124 | |
| (Addresses of principal executive offices) | ||
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
CONTENTS
Quarterly Results of Operations
On August 3, 2022, Stratasys Ltd. (“we” or “us”) announced our financial results for the second quarter ended June 30, 2022. A copy of our press release announcing our results is furnished as Exhibit 99.1 to this Report of Foreign Private Issuer on Form 6-K (this “Form 6-K”) and is incorporated herein by reference.
In conjunction with the conference call being held on August 3, 2022 to discuss our results, we are furnishing a copy of the slide presentation that provides supplemental information regarding our business and our financial results, and which will be referenced on that conference call. We have attached that presentation to this Form 6-K as Exhibit 99.2, which exhibit is incorporated herein by reference.
The information in this Form 6-K, including Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| STRATASYS LTD. | ||
| Dated: August 3, 2022 | By: | /s/ Eitan Zamir |
| Name: | Eitan Zamir | |
| Title: | Chief Financial Officer | |
2
EXHIBIT INDEX
The following exhibits are furnished as part of this Form 6-K:
3
Exhibit 99.1
Stratasys Releases Second Quarter 2022 Financial Results
| ● | Second quarter revenue of $166.6 million, 13.3% growth over second quarter 2021 (16.4% on a constant currency basis), highest second quarter revenue in four years |
| ● | Second quarter GAAP net loss of $24.4 million, or $0.37 per diluted share, and non-GAAP net income of $1.2 million, or $0.02 per diluted share |
| ● | $441.5 million cash and equivalents and no debt as of June 30, 2022 |
| ● | Updates 2022 full-year outlook adjusted for currency exchange impact |
MINNEAPOLIS & REHOVOT, Israel - (BUSINESS WIRE) - August 3, 2022 - Stratasys Ltd. (Nasdaq: SSYS), a leader in polymer 3D printing solutions, today announced financial results for the second quarter of 2022.
Summary - Second Quarter 2022 Financial Results Compared to Second Quarter 2021:
| ● | Revenue of $166.6 million, compared to $147.0 million. |
| ● | GAAP gross margin of 40.5%, compared to 43.0%. |
| ● | Non-GAAP gross margin of 47.6%, compared to 47.5%. |
| ● | GAAP operating loss of $23.5 million, compared to a GAAP operating loss of $22.7 million. |
| ● | Non-GAAP operating income of $1.9 million, compared to non-GAAP operating loss of $2.6 million. |
| ● | GAAP net loss of $24.4 million, or ($0.37) per diluted share, compared to net loss of $20.2 million, or ($0.31) per diluted share. |
| ● | Non-GAAP net income of $1.2 million, or $0.02 per diluted share, compared to non-GAAP net loss of $1.6 million, or ($0.02) per diluted share. |
| ● | Adjusted EBITDA of $7.4 million, compared to $3.5 million. |
| ● | $22.8 million of cash used by, compared to $5.6 million of cash generated from, operating activities, reflecting a continued augmentation of inventories. |
“Our continued focus on execution delivered strong growth in revenue, margin, and earnings per share,” commented Dr. Yoav Zeif, Stratasys’ Chief Executive Officer. “Systems was again the main driver of robust performance, growing 29.2% from the prior year period and 9.7% over the same period in 2019. Our new Origin P3 and H350 SAF mass production manufacturing systems continue to ramp, with excellent customer engagement across all of our new technology offerings.”
Dr. Zeif continued, “We are advancing our leadership position by executing on our strategic initiatives and steadily expanding our reach into Fortune 500 manufacturing facilities worldwide. We continue to provide best-in-class, full-scale 3D printing solutions through our innovative and growing ecosystem of polymer additive manufacturing systems, expanding variety of materials, end-to-end software and top quality service. With our robust balance sheet and leading go-to-market strategy, we are well-positioned to navigate challenging supply issues and global inflation in our efforts to create long-term value for all of our shareholders.”
Financial Outlook:
Based on current market conditions and assuming that the impact of the COVID-19 pandemic, global supply chain costs, currency risk and inflation do not impede economic activity further, the Company is updating its outlook for 2022 as follows:
| ● | Full year revenue of $675 million to $685 million, as compared to a previous range of $685 million to $695 million. The reduction is primarily due to unexpected and adverse currency exchange rates which are expected to impact third and fourth quarter results relatively equally. |
| ● | Revenue growth in the second half of the year approximately 6%-7% higher than the second half of 2021, with fourth quarter anticipated to grow at a higher rate than third quarter. |
| ● | Based on current logistics and materials costs, third quarter gross margins relatively flat compared to third quarter of 2021, and full-year gross margins of flat to slightly higher than 2021. |
| ● | Full year-operating expenses that are $18 million to $23 million higher than 2021, primarily due to ongoing investments in new products to drive higher revenue. |
| ● | Full year non-GAAP operating margins slightly above 2%. |
| ● | GAAP net loss of $78 million to $69 million, or ($1.17) to ($1.04) per diluted share. |
| ● | Non-GAAP net income of $10 million to $13 million, or $0.14 to $0.19 per diluted share. |
| ● | Adjusted EBITDA of $38 million to $41 million. |
| ● | Capital expenditures of $20 million to $25. |
Non-GAAP earnings guidance excludes $37 million to $38 million of projected amortization of intangible assets, $33 million to $35 million of share-based compensation expense, and reorganization and other expenses of $14 million to $16 million. Non-GAAP guidance includes tax adjustments of $2 million to $1 million on the above non-GAAP items.
Appropriate reconciliations between GAAP and non-GAAP financial measures are provided in a table at the end of our press release and slide presentation, with itemized detail concerning the non-GAAP financial measures.
Stratasys Ltd. Second Quarter 2022 Webcast and Conference Call Details:
The Company plans to webcast its conference call to discuss its second quarter 2022 financial results on Wednesday, August 3, 2022, at 8:30 a.m. (ET).
The investor conference call will be available via live webcast on the Stratasys website at investors.stratasys.com, or directly at the following web address:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=mUfZ38Qo
To participate by telephone, the U.S. toll-free number is 877-407-0619 and the international dial-in is +1-412-902-1012. Investors are advised to dial into the call at least ten minutes prior to the call to register. The webcast will be available for six months at investors.stratasys.com, or by accessing the above-provided web address.
Stratasys is leading the global shift to additive manufacturing with innovative 3D printing solutions for industries such as aerospace, automotive, consumer products and healthcare. Through smart and connected 3D printers, polymer materials, a software ecosystem, and parts on demand, Stratasys solutions deliver competitive advantages at every stage in the product value chain. The world’s leading organizations turn to Stratasys to transform product design, bring agility to manufacturing and supply chains, and improve patient care.
To learn more about Stratasys, visit www.stratasys.com, the Stratasys blog, Twitter, LinkedIn, or Facebook. Stratasys reserves the right to utilize any of the foregoing social media platforms, including the Company’s websites, to share material, non-public information pursuant to the SEC’s Regulation FD. To the extent necessary and mandated by applicable law, Stratasys will also include such information in its public disclosure filings.
Stratasys is a registered trademark and the Stratasys signet is a trademark of Stratasys Ltd. and/or its subsidiaries or affiliates. All other trademarks are the property of their respective owners.
2
Cautionary Statement Regarding Forward-Looking Statements
The statements in this press release regarding Stratasys' strategy, and the statements regarding Stratasys’ projected future financial performance, including the financial guidance concerning its expected results for 2022 and beyond, are forward-looking statements reflecting management's current expectations and beliefs. These forward-looking statements are based on current information that is, by its nature, subject to rapid and even abrupt change. Due to risks and uncertainties associated with Stratasys' business, actual results could differ materially from those projected or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to: the degree of our success at introducing new or improved products and solutions that gain market share; the degree of growth of the 3D printing market generally; the impact of potential shifts in the prices or margins of the products that we sell or services that we provide, including due to a shift towards lower margin products or services; the impact of competition and new technologies; potential further charges against earnings that we could be required to take due to impairment of additional goodwill or other intangible assets; the extent of our success at successfully consummating and integrating into our existing business acquisitions or investments in new businesses, technologies, products or services; the degree of our success at locating and acquiring additional value-enhancing, inorganic technology that furthers our business plan to lead in the realm of polymers; the potential adverse impact that recent global interruptions and delays involving freight carriers and other third parties (including due to the Russian invasion of Ukraine) may have on our supply chain and distribution network, and, consequently, our ability to successfully sell both our existing and newly-launched 3D printing products; the strength and duration of, and degree of recovery from and resilience to, the COVID-19 pandemic and/or adverse macro-economic trends that are, in part, by-products of that pandemic, such as inflation, which may have significant consequences for our operations, financial position, cash flows, and those of our customers and suppliers going forward; potential changes in our management and board of directors; global market, political and economic conditions, and in the countries in which we operate in particular (including risks related to the impact of coronavirus on our supply chain and business); costs and potential liability relating to litigation and regulatory proceedings; risks related to infringement of our intellectual property rights by others or infringement of others' intellectual property rights by us; the extent of our success at maintaining our liquidity and financing our operations and capital needs; the impact of tax regulations on our results of operations and financial condition; and those additional factors referred to in Item 3.D “Key Information - Risk Factors”, Item 4, “Information on the Company”, Item 5, “Operating and Financial Review and Prospects,” and all other parts of our Annual Report on Form 20-F for the year ended December 31, 2021, which we filed with the U.S. Securities and Exchange Commission, or SEC, on February 24, 2022 (the “2021 Annual Report”). Readers are urged to carefully review and consider the various disclosures made throughout our 2021 Annual Report and the Reports of Foreign Private Issuer on Form 6-K that attach Stratasys’ unaudited, condensed consolidated financial statements and its review of its results of operations and financial condition, for the quarterly periods throughout 2022, which will be furnished to the SEC throughout 2022, and our other reports filed with or furnished to the SEC, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects. Any guidance provided, and other forward-looking statements made, in this press release are provided or made (as applicable) as of the date hereof, and Stratasys undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Use of Non-GAAP Financial Measures
The non-GAAP data included herein, which excludes certain items as described below, are non-GAAP financial measures. Our management believes that these non-GAAP financial measures are useful information for investors and shareholders of our company in gauging our results of operations (i) on an ongoing basis after excluding mergers, acquisitions and divestments related expense or gains and reorganization-related charges or gains, legal provisions and (ii) excluding non-cash items such as stock-based compensation expenses, acquired intangible assets amortization, including intangible assets amortization related to equity method investments, impairment of long-lived assets and goodwill, revaluation of our investments and the corresponding tax effect of those items. These non-GAAP adjustments either do not reflect actual cash outlays that impact our liquidity and our financial condition or have a non-recurring impact on the statement of operations, as assessed by management. These non-GAAP financial measures are presented to permit investors to more fully understand how management assesses our performance for internal planning and forecasting purposes. The limitations of using these non-GAAP financial measures as performance measures are that they provide a view of our results of operations without including all items indicated above during a period, which may not provide a comparable view of our performance to other companies in our industry. Investors and other readers should consider non-GAAP measures only as supplements to, not as substitutes for or as superior measures to, the measures of financial performance prepared in accordance with GAAP. Reconciliation between results on a GAAP and non-GAAP basis is provided in a table below.
Yonah Lloyd
CCO, VP Investor Relations
Yonah.Lloyd@stratasys.com
Source: Stratasys Ltd.
3
Stratasys Ltd.
Consolidated Balance Sheets
(Unaudited)
(in thousands, except share data)
| June 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 255,886 | $ | 243,179 | ||||
| Short-term deposits | 182,429 | 259,000 | ||||||
| Accounts receivable, net of allowance for credit losses of $1.0 million and $0.5 million as of June 30, 2022 and December 31, 2021 | 132,343 | 129,382 | ||||||
| Inventories | 153,702 | 129,147 | ||||||
| Prepaid expenses | 8,225 | 6,871 | ||||||
| Other current assets | 49,615 | 33,123 | ||||||
| Total current assets | 782,200 | 800,702 | ||||||
| Non-current assets | ||||||||
| Property, plant and equipment, net | 192,630 | 203,295 | ||||||
| Goodwill | 64,959 | 65,144 | ||||||
| Other intangible assets, net | 133,657 | 152,244 | ||||||
| Operating lease right-of-use assets | 12,319 | 14,651 | ||||||
| Long-term investments | 31,191 | 28,667 | ||||||
| Other non-current assets | 12,886 | 12,519 | ||||||
| Total non-current assets | 447,642 | 476,520 | ||||||
| Total assets | $ | 1,229,842 | $ | 1,277,222 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 61,316 | $ | 51,976 | ||||
| Accrued expenses and other current liabilities | 52,049 | 55,358 | ||||||
| Accrued compensation and related benefits | 30,513 | 44,684 | ||||||
| Deferred revenues - short term | 49,511 | 51,174 | ||||||
| Operating lease liabilities - short term | 6,111 | 7,276 | ||||||
| Total current liabilities | 199,500 | 210,468 | ||||||
| Non-current liabilities | ||||||||
| Deferred revenues - long term | 22,727 | 21,133 | ||||||
| Deferred income taxes - long term | 4,511 | 7,341 | ||||||
| Operating lease liabilities - long term | 6,165 | 7,693 | ||||||
| Contingent consideration - long term | 50,299 | 53,478 | ||||||
| Other non-current liabilities | 22,931 | 21,095 | ||||||
| Total non-current liabilities | 106,633 | 110,740 | ||||||
| Total liabilities | 306,133 | 321,208 | ||||||
| Equity | ||||||||
| Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands shares; 66,744 thousands shares and 65,677 thousands shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively | 186 | 182 | ||||||
| Additional paid-in capital | 3,030,088 | 3,012,481 | ||||||
| Accumulated other comprehensive loss | (13,354 | ) | (8,771 | ) | ||||
| Accumulated deficit | (2,093,211 | ) | (2,047,878 | ) | ||||
| 923,709 | 956,014 | |||||||
| Total liabilities and equity | $ | 1,229,842 | $ | 1,277,222 | ||||
4
Stratasys Ltd.
Consolidated Statements of Operations
(in thousands, except per share data)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
| Net sales | ||||||||||||||||
| Products | $ | 115,721 | $ | 100,305 | $ | 228,794 | $ | 190,629 | ||||||||
| Services | 50,882 | 46,700 | 101,238 | 90,565 | ||||||||||||
| 166,603 | 147,005 | 330,032 | 281,194 | |||||||||||||
| Cost of sales | ||||||||||||||||
| Products | 61,132 | 49,731 | 120,505 | 96,651 | ||||||||||||
| Services | 38,078 | 34,004 | 72,457 | 65,696 | ||||||||||||
| 99,210 | 83,735 | 192,962 | 162,347 | |||||||||||||
| Gross profit | 67,393 | 63,270 | 137,070 | 118,847 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Research and development, net | 24,346 | 22,437 | 48,344 | 43,038 | ||||||||||||
| Selling, general and administrative | 66,592 | 63,557 | 131,855 | 116,891 | ||||||||||||
| 90,938 | 85,994 | 180,199 | 159,929 | |||||||||||||
| Operating loss | (23,545 | ) | (22,724 | ) | (43,129 | ) | (41,082 | ) | ||||||||
| Financial expenses, net | (1,170 | ) | (372 | ) | (2,532 | ) | (749 | ) | ||||||||
| Loss before income taxes | (24,715 | ) | (23,096 | ) | (45,661 | ) | (41,831 | ) | ||||||||
| Income tax benefit | 429 | 4,368 | 502 | 5,310 | ||||||||||||
| Share in losses of associated companies | (99 | ) | (1,431 | ) | (174 | ) | (2,549 | ) | ||||||||
| Net loss | $ | (24,385 | ) | $ | (20,159 | ) | $ | (45,333 | ) | $ | (39,070 | ) | ||||
| Net loss per share | ||||||||||||||||
| Basic | $ | (0.37 | ) | $ | (0.31 | ) | $ | (0.69 | ) | $ | (0.63 | ) | ||||
| Diluted | $ | (0.37 | ) | $ | (0.31 | ) | $ | (0.69 | ) | $ | (0.63 | ) | ||||
| Weighted average ordinary shares outstanding | ||||||||||||||||
| Basic | 66,568 | 64,908 | 66,151 | 61,796 | ||||||||||||
| Diluted | 66,568 | 64,908 | 66,151 | 61,796 | ||||||||||||
5
| Three Months Ended June 30, | ||||||||||||||||||||||||||
| 2022 | Non-GAAP | 2022 | 2021 | Non-GAAP | 2021 | |||||||||||||||||||||
| GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | |||||||||||||||||||||
| U.S. dollars and shares in thousands (except per share amounts) | ||||||||||||||||||||||||||
| Gross profit (1) | $ | 67,393 | $ | 11,914 | $ | 79,307 | $ | 63,270 | $ | 6,616 | $ | 69,886 | ||||||||||||||
| Operating income (loss) (1,2) | (23,545 | ) | 25,479 | $ | 1,934 | (22,724 | ) | 20,133 | $ | (2,591 | ) | |||||||||||||||
| Net income (loss) (1,2,3) | (24,385 | ) | 25,560 | $ | 1,175 | (20,159 | ) | 18,581 | $ | (1,578 | ) | |||||||||||||||
| Net income (loss) per diluted share (4) | $ | (0.37 | ) | $ | 0.39 | $ | 0.02 | $ | (0.31 | ) | $ | 0.29 | $ | (0.02 | ) | |||||||||||
| (1) | Acquired intangible assets amortization expense | 6,954 | 5,518 | |||||||||||||||||||||||
| Non-cash stock-based compensation expense | 1,080 | 788 | ||||||||||||||||||||||||
| Restructuring and other related costs | 15 | 310 | ||||||||||||||||||||||||
| Impairment charges | 3,865 | - | ||||||||||||||||||||||||
| 11,914 | 6,616 | |||||||||||||||||||||||||
| (2) | Acquired intangible assets amortization expense | 2,218 | 2,200 | |||||||||||||||||||||||
| Non-cash stock-based compensation expense | 7,751 | 7,189 | ||||||||||||||||||||||||
| Restructuring and other related costs | - | 350 | ||||||||||||||||||||||||
| Revaluation of investments | 1,255 | 2,201 | ||||||||||||||||||||||||
| Contingent consideration | 596 | 202 | ||||||||||||||||||||||||
| Other expenses | 1,745 | 1,375 | ||||||||||||||||||||||||
| 13,565 | 13,517 | |||||||||||||||||||||||||
| 25,479 | 20,133 | |||||||||||||||||||||||||
| (3) | Corresponding tax effect and other expenses | 81 | (1,552 | ) | ||||||||||||||||||||||
| $ | 25,560 | $ | 18,581 | |||||||||||||||||||||||
| (4) | Weighted average number of ordinary shares outstanding - Diluted | 66,568 | 67,070 | 64,908 | 64,908 | |||||||||||||||||||||
6
| Six Months Ended June 30, | ||||||||||||||||||||||||||
| 2022 | Non-GAAP | 2022 | 2021 | Non-GAAP | 2021 | |||||||||||||||||||||
| GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | |||||||||||||||||||||
| U.S. dollars and shares in thousands (except per share amounts) | ||||||||||||||||||||||||||
| Gross profit (1) | $ | 137,070 | $ | 19,603 | $ | 156,673 | $ | 118,847 | $ | 13,685 | $ | 132,532 | ||||||||||||||
| Operating income (loss) (1,2) | (43,129 | ) | 47,086 | $ | 3,957 | (41,082 | ) | 35,918 | $ | (5,164 | ) | |||||||||||||||
| Net income (loss) (1,2,3) | (45,333 | ) | 47,718 | $ | 2,385 | (39,070 | ) | 33,692 | $ | (5,378 | ) | |||||||||||||||
| Net income (loss) per diluted share (4) | $ | (0.69 | ) | $ | 0.73 | $ | 0.04 | $ | (0.63 | ) | $ | 0.54 | $ | (0.09 | ) | |||||||||||
| (1) | Acquired intangible assets amortization expense | 13,920 | 10,873 | |||||||||||||||||||||||
| Non-cash stock-based compensation expense | 1,980 | 1,422 | ||||||||||||||||||||||||
| Restructuring and other related costs | (162 | ) | 1,390 | |||||||||||||||||||||||
| Impairment charges | 3,865 | - | ||||||||||||||||||||||||
| 19,603 | 13,685 | |||||||||||||||||||||||||
| (2) | Acquired intangible assets amortization expense | 4,443 | 4,393 | |||||||||||||||||||||||
| Non-cash stock-based compensation expense | 15,384 | 13,760 | ||||||||||||||||||||||||
| Restructuring and other related costs | 555 | 2,159 | ||||||||||||||||||||||||
| Revaluation of investments | 2,316 | (1,469 | ) | |||||||||||||||||||||||
| Contingent consideration | 803 | 393 | ||||||||||||||||||||||||
| Other expenses | 3,982 | 2,997 | ||||||||||||||||||||||||
| 27,483 | 22,233 | |||||||||||||||||||||||||
| 47,086 | 35,918 | |||||||||||||||||||||||||
| (3) | Corresponding tax effect and other expenses | 632 | (2,226 | ) | ||||||||||||||||||||||
| $ | 47,718 | $ | 33,692 | |||||||||||||||||||||||
| (4) | Weighted average number of ordinary shares outstanding - Diluted | 66,151 | 67,071 | 61,796 | 61,796 | |||||||||||||||||||||
7
Stratasys Ltd.
Reconciliation of GAAP to Non-GAAP Forward Looking Guidance
Fiscal Year 2022
(in millions, except per share data)
| GAAP net loss | ($78) to ($69) | |
| Adjustments | ||
| Stock-based compensation expense | $33 to $35 | |
| Intangible assets amortization expense | $37 to $38 | |
| Reorganization and other | $14 to $16 | |
| Tax expense (benefit) related to Non-GAAP adjustments | ($2) to ($1) | |
| Non-GAAP net income | $10 to $13 | |
| GAAP loss per share | ($1.17) to ($1.04) | |
| Non-GAAP diluted earnings per share | $0.14 to $0.19 |
8
Exhibit 99.2
Q2 2022 Results Speakers Dr. Yoav Zeif, CEO Eitan Zamir, CFO Yonah Lloyd, CCO & VP IR Aug. 3, 2022
Conference Call and Webcast Details US Toll - Free Dial - In 1 - 877 - 407 - 0629 International Dial - In 1 - 412 - 902 - 1012 Live Webcast and Replay https://event.choruscall.com/mediaframe/webcast.html? webcastid=mUfZ38Qo 2
Forward - Looking Statements Cautionary Statement Regarding Forward - Looking Statements The statements in this slide presentation regarding Stratasys' strategy, and the statements regarding its projected future financial performance, including the financial guidance concerning its expected results for 2022, are forward - looking statements reflecting management's current expectations and beliefs. These forward - looking statements are based on current information that is, by its nature, subject to rapid and even abrupt change. Due to risks and uncertainties associated with Stratasys' business, actual results could differ materially from those projected or implied by these forward - looking statements. These risks and uncertainties include, but are not limited to: the degree of our success at introducing new or improved products and solutions that gain market share; the extent of growth of the 3D printing market generally; the duration and severity of the macro - economic trends triggered by the global COVID - 19 pandemic, such as supply - chain delays, inflationary pressures and rising interest rates; the impact of potential shifts in the prices or margins of the products that we sell or services that we provide, including due to a shift towards lower margin products or services; the impact of competition and new technologies; the extent of our success at successfully integrating into our existing business, or making additional, acquisitions or investments in new businesses, technologies, products or services; potential changes in our management and board of directors; global market, political and economic conditions, and in the countries in which we operate in particular (including risks stemming from Russia’s invasion of Ukraine); potential further charges against earnings that we could be required to take due to impairment of additional goodwill or other intangible assets that we have recently acquired or may acquire in the future; costs and potential liability relating to litigation and regulatory proceedings; risks related to infringement of our intellectual property rights by others or infringement of others' intellectual property rights by us; the extent of our success at maintaining our liquidity and financing our operations and capital needs; the impact of tax regulations on our results of operations and financial condition; and those additional factors referred to in Item 3.D “Key Information - Risk Factors”, Item 4, “Information on the Company”, Item 5, “Operating and Financial Review and Prospects,” and all other parts of our Annual Report on Form 20 - F for the year ended December 31, 2021, filed with the SEC on February 24, 2022 (the “2021 Annual Report”). Readers are urged to carefully review and consider the various disclosures made throughout our 2021 Annual Report and the Reports of Foreign Private Issuer on Form 6 - K that attach Stratasys’ unaudited, condensed consolidated financial statements and its review of its results of operations and financial condition, for the quarterly periods throughout 2022, which will be furnished to the SEC over the course of 2022, and our other reports filed with or furnished to the SEC, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects. Any guidance provided, and other forward - looking statements made, in this slide presentation are made as of the date hereof, and Stratasys undertakes no obligation to publicly update or revise any forward - looking statements, whether as a result of new information, future events or otherwise, except as required by law. 3
Use of Non - GAAP Financial Information Use of Non - GAAP Financial Measures The non - GAAP data included herein, which excludes certain items as described below, are non - GAAP financial measures. Our management believes that these non - GAAP financial measures are useful information for investors and shareholders of our Company in gauging our results of operations (i) on an ongoing basis after excluding mergers, acquisitions and divestments related expense or gains and reorganization - related charges or gains, legal provisions, and (ii) excluding non - cash items such as stock - based compensation expenses, acquired intangible assets amortization, including intangible assets amortization related to equity method investments, impairment of long - lived assets and goodwill, revaluation of our investments and the corresponding tax effect of those items. These non - GAAP adjustments either do not reflect actual cash outlays that impact our liquidity and our financial condition or have a non - recurring impact on the statement of operations, as assessed by management. These non - GAAP financial measures are presented to permit investors to more fully understand how management assesses our performance for internal planning and forecasting purposes. The limitations of using these non - GAAP financial measures as performance measures are that they provide a view of our results of operations without including all items indicated above during a period, which may not provide a comparable view of our performance to other companies in our industry. Investors and other readers should consider non - GAAP measures only as supplements to, not as substitutes for or as superior measures to, the measures of financial performance prepared in accordance with GAAP. Reconciliation between results on a GAAP and non - GAAP basis is provided in a table later in this slide presentation. 4
▪ Q2 revenue of $166.6 million up 13.3% vs. Q2 2021 (16.4% after currency exchange impact) ▪ Systems revenue grew 29% vs. Q2 2021; All printer technologies grew YoY ▪ Balance sheet remains strong at $441.5M in cash and equivalents, with no debt ▪ Laser focus on business execution continues to help us deliver positive results as we grow our leadership position in polymer additive manufacturing Welcome Dr. Yoav Zeif CEO 5
Production Racing Parts Signal Automotive Opportunity First 3D printed production parts for NASCAR Next Gen Racecars using SAF and FDM technologies TRD partnership includes production parts using SAF and FDM technologies 6
3D Printing Well - Positioned to Contribute Parts Throughout the Vehicle at Production Volume 7 Front bumper sensor brackets | Prototype to final part Ducts | Final part inside / Under hood application prototype Electrical wire connectors | Prototype to final part Front grill | Prototype to final part Windscreen washing liquid container | Under hood applications prototype Electrical cable clips | Prototype to final part Side mirror | Prototype to final part Y air flow split | Prototype to final part All using Stratasys H350 3D printing and SAF Πtechnology
J5 DentaJet Momentum Aided by upgraded version ▪ Doubled throughput while maintaining quality ▪ Optimized resin consumption ▪ Reduced support usage and waste ▪ More parts on each print tray ▪ Significant dental lab sales particularly in EMEA I was absolutely blown away by the precision, detail, and smooth finish of the printed parts. - Dental Lab, Germany 8 8
Healthcare Industry Responds to Tailored Stratasys Solutions ▪ New unique RadioMatrix material with radiopaque enables 3D printed models to display on X - rays and CT scans ▪ Healthcare providers like the University Hospital of Southern Denmark are moving up from single - material to multi - material, multicolor J5 MediJet systems Surgeons are already saying things like ‘We don’t want to do this surgery without a 3D printed guide. - Prof. Michael Boelstoft Holte, 3D Lab Denmark 9
CFO Remarks 10 Eitan Zamir CFO ▪ Building on strong start to 2022 ▪ Systems revenue growth of 29 . 2 % vs . Q 2 2021 is expected to drive future recurring consumables and services revenues ▪ Ongoing operating leverage that reflects the strength of our business model
Improving Financial Results – Q2 2022 GAAP Non - GAAP Q2 - 21 Q2 - 22 Change Y/Y Q2 - 21 Q2 - 22 Change Y/Y Total Revenue 147.0 166.6 13.3% 147.0 166.6 13.3% Gross Profit 63.3 67.4 4.1 69.9 79.3 9.4 ▪ % Margin 43.0% 40.5% - 2.5% 47.5% 47.6% 0.1% Operating Income (Loss) (22.7) (23.5) (0.8) (2.6) 1.9 4.5 ▪ % Margin - 15.5% - 14.1% 1.4% - 1.8% 1.2% 3.0% Net Income (Loss) (20.2) (24.4) (4.2) (1.6) 1.2 2.8 ▪ % Margin - 13.7% - 14.6% - 0.9% - 1.1% 0.7% 1.8% Diluted EPS (0.31) (0.37) (0.06) (0.02) 0.02 0.04 Diluted Shares 64.9 66.6 2.6% 64.9 67.1 3.3% Note: $ in millions unless noted otherwise. All numbers and percentages rounded 11
Revenue Growth Continues – Q2 2022 Quarterly Trend Revenue Growth – Q2’22 100.3 108.9 118.0 113.1 115.7 46.7 50.1 49.0 50.3 50.9 147.0 159.0 167.0 163.4 166.6 Q2' 21 Q3' 21 Q4' 21 Q1' 22 Q2' 22 Product Service Revenue Y/Y Vs. Q2 2019 Product 15.4% 4.9% ▪ System 29.2% 9.7% ▪ Consumables 3.9% 0.3% Service 9.0% - 3.7% ▪ Customer Support 9.1% 10.4% $166.6M revenue up 13.3% YoY (16.4% with FX) on strong systems, consumables and services growth Revenue up 2.1% vs. pre - COVID Q2 2019 Note: $ in millions unless noted otherwise. All numbers and percentages rounded 12
Increasing Gross Margins – Q2 2022 13 GAAP Non - GAAP Non - GAAP margin improvements driven by higher revenues and raised pricing, partially offset by macro issues 43.0% 42.9% 43.7% 40.5% 50.4% 49.7% 49.6% 47.5% 42.6% 47.2% 27.2% 28.2% 29.6% 31.7% 25.2% Q2 '21 Q3 '21 Q4 '21 Q1 '22 Q2 '22 47.5% 48.2% 48.7% 47.3% 47.6% 56.4% 57.0% 56.2% 53.7% 53.6% 28.6% 29.2% 30.6% 33.1% 34.0% Q2 '21 Q3 '21 Q4 '21 Q1 '22 Q2 '22 Total Gross Margin Service Gross Margin Product Gross Margin All percentages rounded
Controlling Operating Expenses – Q2 2022 GAAP operating expenses (absolute and as a percentage of revenues) Non - GAAP operating expenses (absolute and as a percentage of revenues) Operating Expenses improvement trend ongoing 86.0 90.9 Q2'21 Q2'22 54.6% - 3.9% 58.5% 72.5 77.4 Q2'21 Q2'22 46.4% - 2.9% 49.3% Note: $ in millions unless noted otherwise. All numbers and percentages rounded 14
Profitable Results – Q2 2022 GAAP operating loss Non - GAAP operating (loss) income Operating income and net income reflect business scalability and operational efficiencies GAAP net loss Non - GAAP net (loss) income (22.7) (23.5) Q2'21 Q2'22 (2.6) 1.9 Q2'21 Q2'22 (20.2) (24.4) Q2'21 Q2'22 (1.6) 1.2 Q2'21 Q2'22 Note: $ in millions unless noted otherwise. All numbers and percentages rounded 15
Fortified Balance Sheet and Responsible Cash Use – Q2 2022 Strong balance sheet at $441.5M cash and equivalents Cash use tied to deliberately increased inventory purchases of over $20M Balance sheet items Cash flow from operating activities 5.6 (22.8) Q2' 21 Q2' 22 Q2 - 21 Q1 - 22 Q2 - 22 Cash and Cash Equivalents and Short - term deposits 522.7 475.6 441.5 Accounts Receivable 110.0 136.4 132.3 Inventories 124.2 143.1 153.7 Net Working Capital 626.8 584.4 582.7 Note: $ in millions unless noted otherwise. All numbers and percentages rounded 16
2022 Outlook Updated to Reflect FX Impact 17 Figures include full year contribution from MakerBot until the announced business combination with Ultimaker closes ▪ Full Year 2022 - $675M - $685M ‒ FX impact of ~$10M relatively equal across Q3 & Q4 ‒ H2 2022 appx. 6% - 7% higher than H2 2021 ‒ Q4 growth percentage higher than Q3 ‒ Sequential quarterly revenue growth Revenue – Annual Double - Digit Percentage Growth ▪ 2022 $18M - $23M OpEx expansion in growth drivers ▪ OpEx as a percent of revenue expected to remain flat or even improve slightly throughout the year Gross Margins Improving Through the Year ▪ 2022 - Flat to slightly higher than 2021 ▪ Q3 relatively flat vs. Q3 2021 ▪ Targeting over 50% long - term when logistics and inflation issues pass and we execute growth plan OpEx – Improving as % of Revenue ▪ GAAP net loss of $78M - $69M, or ($1.17) - ($1.04) per diluted share ▪ Non - GAAP net income of $10M - $13M or $0.14 - $0.19 per diluted share ▪ Adjusted EBITDA of $38M - $41M Earnings Improvement Operating Margins Improvement ▪ Non - GAAP slightly above 2% ▪ Targeting double - digit margins long - term ▪ Capital expenditures ranging between $20M - $25M Capital Expenditures
CEO Summary Dr. Yoav Zeif CEO ▪ Business expectations aligned with global macroeconomic conditions ▪ 3D printing is ready to help global manufacturing customers improve their performance ▪ We are positioned to win share at Fortune 500 factory floors and outperform the market 18 18
Thank Y ou 19
Appendix Note: $ in millions unless noted otherwise. All numbers and percentages rounded Three months ended June 30, 2022 Three months ended June 30, 2021 GAAP Adjustments Non - GAAP GAAP Adjustments Non - GAAP Gross Profit (1) $67,393 $11,914 $79,307 $63,270 $6,616 $69,886 Operating income (Loss) (1,2) (23,545) 25,479 1,934 (22,724) 20,133 (2,591) Net income (Loss) (1,2,3) (24,385) 25,560 1,175 (20,159) 18,581 (1,578) Net income (Loss) per diluted share (4) ($0.37) $0.39 $0.02 ($0.31) $0.29 ($0.02) 1) Acquired intangible assets amortization expense 6,954 5,518 Non - cash stock - based compensation expense 1,080 788 Restructuring and other related costs 15 310 Impairment charges 3,865 - 11,914 6,616 2) Acquired intangible assets amortization expense 2,218 2,200 Non - cash stock - based compensation expense 7,751 7,189 Restructuring and other related costs - 350 Revaluation of investments 1,255 2,201 Contingent consideration 596 202 Other expenses 1,745 1,375 13,565 13,517 25,479 20,133 3) Corresponding tax effect and other expenses 81 (1,552) $25,560 $18,581 4) Weighted average number or ordinary shares outstanding – Diluted 66,568 67,070 64,908 64,908