6-K
Stratasys Ltd. (SSYS)
UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
WASHINGTON,D.C. 20549
FORM 6-K
Reportof Foreign Private Issuer
Pursuantto Rule 13a-16 or 15d-16
underthe Securities Exchange Act of 1934
Forthe month of May 2022
CommissionFile Number 001-35751
STRATASYSLTD.
(Translation of registrant’s name into English)
| c/o Stratasys, Inc.<br><br> <br>7665 Commerce Way<br><br> <br>Eden Prairie, Minnesota 55344 | 1 Holtzman Street, Science Park<br><br> <br>P.O. Box 2496<br><br> <br>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
QuarterlyResults of Operations
On May 16, 2022, Stratasys Ltd. (“we” or “us”) announced our financial results for the first quarter ended March 31, 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 May 16, 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: May 16,<br> 2022 | By: | /s/<br> 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
StratasysReleases First Quarter 2022 Financial Results
| ● | First quarter revenue of $163.4 million, 22% growth over first quarter 2021, highest first quarter revenue in six years |
|---|---|
| ● | First quarter GAAP net loss of $20.9 million, or $0.32 per diluted share, and non-GAAP net income of $1.2 million, or $0.02 per diluted share |
| --- | --- |
| ● | $475.6 million cash and equivalents and no debt as of March 31, 2022 |
| --- | --- |
MINNEAPOLIS & REHOVOT, Israel - (BUSINESS WIRE) - May 16, 2022 - Stratasys Ltd. (Nasdaq: SSYS), a leader in polymer 3D printing solutions, today announced financial results for the first quarter of 2022.
Summary- First Quarter 2022 Financial Results Compared to First Quarter 2021:
| ● | Revenue<br> of $163.4 million, compared to $134.2 million. |
|---|---|
| ● | GAAP<br> gross margin of 42.6%, compared to 41.4%. |
| --- | --- |
| ● | Non-GAAP<br> gross margin of 47.3%, compared to 46.7%. |
| --- | --- |
| ● | GAAP<br> operating loss of $19.6 million, compared to a GAAP operating loss of $18.4 million. |
| --- | --- |
| ● | Non-GAAP<br> operating income of $2.0 million, compared to non-GAAP operating loss of $2.6 million. |
| --- | --- |
| ● | GAAP<br> net loss of $20.9 million, or $0.32 per diluted share, compared to net loss of $18.9 million,<br> or $0.32 per diluted share. |
| --- | --- |
| ● | Non-GAAP<br> net income of $1.2 million, or $0.02 per diluted share, compared to non-GAAP net loss of<br> $3.8 million, or $0.06 per diluted share. |
| --- | --- |
| ● | Adjusted<br> EBITDA of $8.1 million, compared to $3.5 million. |
| --- | --- |
| ● | $16.1<br> million of cash used by, compared to $22.8 million of cash generated from, operating activities,<br> reflecting more inventory purchasing and increase in accounts receivable. |
| --- | --- |
Dr. Yoav Zeif, Stratasys’ Chief Executive Officer, stated, “Our strong start to the year, with our highest first quarter revenue total in six years, was anchored by 22% revenue growth that included improved contributions from all our technologies. Importantly, systems was the main driver, up 36.7% for its strongest first quarter in five years, and 16.4% higher than the same period in pre-COVID 2019. We also achieved exceptional results in both consumables and services, driven by strength in our growing install base. And we are particularly excited by the early momentum and contributions from our new Origin P3, H350 SAF and Neo systems, designed for high-volume production of end-use parts.”
Dr. Zeif continued, “We have advanced a number of strategic initiatives thus far in 2022, including the announced MakerBot business combination with Ultimaker, the publishing of our inaugural ESG Sustainability Report, and our annual flagship manufacturing event where we showcased new offerings in materials, upgrades to existing printing platforms, and an expansion of our software capabilities. We are relentless about our focus on execution in our drive to grow our leadership position in polymer 3D printing. With our combination of best-in-class talent, systems offerings, Go-to-Market and support infrastructure, combined with a robust balance sheet, Stratasys is positioned to build on our first quarter growth across the balance of 2022 and beyond.”
1
FinancialOutlook:
Based on current market conditions and assuming that the impact of the COVID-19 pandemic or global supply chain costs do not impede economic activity further, the Company is tightening its revenue guidance range for 2022:
| ● | Full<br> year revenue of $685 million to $695 million. |
|---|---|
| ● | Sequential<br> quarterly revenue growth. |
| --- | --- |
| ● | Second<br> quarter revenue growth expected to reach low to mid-teens as a percentage over second quarter<br> of 2021. |
| --- | --- |
| ● | Based<br> on current logistics and materials costs, full-year gross margins of flat to slightly higher<br> than in 2021, with improved year-over-year growth in the second half of 2022. |
| --- | --- |
| ● | Full<br> year-operating expenses that are $20 million to $25 million higher than 2021, primarily due<br> to ongoing investments in new products to drive higher revenue. |
| --- | --- |
| ● | Full<br> year non-GAAP operating margins slightly above 2%. |
| --- | --- |
| ● | GAAP<br> net loss of $74 million to $67 million, or ($1.11) to ($1.00) per diluted share. |
| --- | --- |
| ● | Non-GAAP<br> net income of $10 million to $13 million, or $0.14 to $0.19 per diluted share. |
| --- | --- |
| ● | Adjusted<br> EBITDA of $38 million to $41 million. |
| --- | --- |
| ● | Capital<br> expenditures of $20 million to $25 million. |
| --- | --- |
Non-GAAP earnings guidance excludes $37 million to $38 million of projected amortization of intangible assets, $31 million to $33 million of share-based compensation expense, and reorganization and other expenses of $14 million to $15 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.
StratasysLtd. First Quarter 2022 Webcast and Conference Call Details
The Company plans to webcast its conference call to discuss its first quarter 2022 financial results on Monday, May 16, 2022, at 4:30 p.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://services.choruscall.com/mediaframe/webcast.html?webcastid=QiDdBAQK
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.
Stratasysis 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
CautionaryStatement 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 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.
Useof 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. | |||||
|---|---|---|---|---|---|
| ConsolidatedBalance Sheets | |||||
| (Unaudited) | |||||
| (inthousands, except share data) | |||||
| December 31, | |||||
| --- | --- | --- | --- | --- | --- |
| 2021 | |||||
| ASSETS | |||||
| Current assets | |||||
| Cash and cash equivalents | 293,649 | $ | 243,179 | ||
| Short-term deposits | 182,000 | 259,000 | |||
| Accounts receivable, net of allowance for credit losses of 0.7 million and 0.5 million as of<br> March 31, 2022 and December 31, 2021 | 136,444 | 129,382 | |||
| Inventories | 143,116 | 129,147 | |||
| Prepaid expenses | 8,477 | 6,871 | |||
| Other current assets | 24,185 | 33,123 | |||
| Total current assets | 787,871 | 800,702 | |||
| Non-current assets | |||||
| Property, plant and equipment, net | 200,627 | 203,295 | |||
| Goodwill | 65,089 | 65,144 | |||
| Other intangible assets, net | 143,317 | 152,244 | |||
| Operating lease right-of-use assets | 14,162 | 14,651 | |||
| Long-term investments | 28,667 | 28,667 | |||
| Other non-current assets | 16,651 | 12,519 | |||
| Total non-current assets | 468,513 | 476,520 | |||
| Total assets | 1,256,384 | $ | 1,277,222 | ||
| LIABILITIES AND EQUITY | |||||
| Current liabilities | |||||
| Accounts payable | 59,010 | $ | 51,976 | ||
| Accrued expenses and other current liabilities | 44,198 | 55,358 | |||
| Accrued compensation and related benefits | 38,341 | 44,684 | |||
| Deferred revenues - short term | 52,337 | 51,174 | |||
| Operating lease liabilities - short term | 7,158 | 7,276 | |||
| Total current liabilities | 201,044 | 210,468 | |||
| Non-current liabilities | |||||
| Deferred revenues - long term | 22,026 | 21,133 | |||
| Deferred income taxes - long term | 6,258 | 7,341 | |||
| Operating lease liabilities - long term | 7,220 | 7,693 | |||
| Contingent consideration | 53,648 | 53,478 | |||
| Other non-current liabilities | 23,487 | 21,095 | |||
| Total non-current liabilities | 112,639 | 110,740 | |||
| Total liabilities | 313,683 | 321,208 | |||
| Equity | |||||
| Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands shares;<br> 66,408 thousands shares and 65,667 thousands shares issued and outstanding at March 31, 2022 and December 31, 2021,<br> respectively | 185 | 182 | |||
| Additional paid-in capital | 3,021,166 | 3,012,481 | |||
| Accumulated other comprehensive loss | (9,824 | ) | (8,771 | ) | |
| Accumulated deficit | (2,068,826 | ) | (2,047,878 | ) | |
| 942,701 | 956,014 | ||||
| Total liabilities and equity | 1,256,384 | $ | 1,277,222 |
All values are in US Dollars.
4
| Stratasys Ltd. | ||||||
|---|---|---|---|---|---|---|
| Consolidated Statements of Operations | ||||||
| (in thousands, except per share data) | ||||||
| Three Months Ended <br><br>March 31, | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| 2022 | 2021 | |||||
| (unaudited) | (unaudited) | |||||
| Net sales | ||||||
| Products | $ | 113,073 | $ | 90,324 | ||
| Services | 50,356 | 43,865 | ||||
| 163,429 | 134,189 | |||||
| Cost of sales | ||||||
| Products | 59,373 | 46,920 | ||||
| Services | 34,379 | 31,692 | ||||
| 93,752 | 78,612 | |||||
| Gross profit | 69,677 | 55,577 | ||||
| Operating expenses | ||||||
| Research and development, net | 23,998 | 20,601 | ||||
| Selling, general and administrative | 65,263 | 53,334 | ||||
| 89,261 | 73,935 | |||||
| Operating loss | (19,584 | ) | (18,358 | ) | ||
| Financial expense, net | (1,362 | ) | (377 | ) | ||
| Loss before income taxes | (20,946 | ) | (18,735 | ) | ||
| Income tax benefit | 73 | 942 | ||||
| Share in losses of associated companies | (75 | ) | (1,118 | ) | ||
| Net loss | $ | (20,948 | ) | $ | (18,911 | ) |
| Net loss per share | ||||||
| Basic | $ | (0.32 | ) | $ | (0.32 | ) |
| Diluted | $ | (0.32 | ) | $ | (0.32 | ) |
| Weighted average ordinary shares outstanding | ||||||
| Basic | 65,721 | 58,616 | ||||
| Diluted | 65,721 | 58,616 |
5
| Three Months Ended March 31, | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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) | $ | 69,677 | $ | 7,689 | $ | 77,366 | $ | 55,577 | $ | 7,069 | $ | 62,646 | ||||||
| Operating income (loss) (1,2) | (19,584 | ) | 21,607 | 2,023 | (18,358 | ) | 15,785 | $ | (2,573 | ) | ||||||||
| Net income (loss) attributable to Stratasys Ltd. (1,2,3) | (20,948 | ) | 22,158 | 1,210 | (18,911 | ) | 15,111 | $ | (3,800 | ) | ||||||||
| Net income (loss) per diluted share attributable to Stratasys Ltd. (4) | $ | (0.32 | ) | $ | 0.34 | $ | 0.02 | $ | (0.32 | ) | $ | 0.26 | $ | (0.06 | ) | |||
| (1) | Acquired intangible assets amortization expense | 6,966 | 5,356 | |||||||||||||||
| Non-cash stock-based compensation expense | 900 | 634 | ||||||||||||||||
| Restructuring and other related costs | (177 | ) | 1,079 | |||||||||||||||
| 7,689 | 7,069 | |||||||||||||||||
| (2) | Acquired intangible assets amortization expense | 2,225 | 2,192 | |||||||||||||||
| Non-cash stock-based compensation expense | 7,633 | 6,571 | ||||||||||||||||
| Restructuring and other related costs | 555 | 1,810 | ||||||||||||||||
| Revaluation of investments | 1,061 | (3,670 | ) | |||||||||||||||
| Contingent consideration | 207 | 191 | ||||||||||||||||
| Other expenses | 2,237 | 1,622 | ||||||||||||||||
| 13,918 | 8,716 | |||||||||||||||||
| 21,607 | 15,785 | |||||||||||||||||
| (3) | Corresponding tax effect and other expenses | 551 | (674 | ) | ||||||||||||||
| $ | 22,158 | $ | 15,111 | |||||||||||||||
| (4) | Weighted average number of ordinary shares outstanding- Diluted | 65,721 | 67,060 | 58,616 | 58,616 |
6
Exhibit99.2
1 Stratasys Q1 2022 Results Speakers Dr. Yoav Zeif , CEO Eitan Zamir, CFO Yonah Lloyd, CCO & VP IR May 16, 2022
2 Stratasys Conference Call and Webcast Details US Toll - Free dial - in 1 - 877 - 407 - 0619 International dial - in +1 - 412 - 902 - 1012 Live webcast and replay https://services.choruscall.com/mediaframe/webcast.html? webcastid=QiDdBAQK
3 Stratasys 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 and inflationary pressures; 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. Cautionary Statement Regarding Forward - Looking Statements
4 Stratasys Use of Non – GAAP Financial Information 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. Use of non - GAAP financial measures
5 Stratasys Dr. Yoav Zeif CEO Welcome Strongest Q1 in 6 years All key businesses showed improvement compared to pre - COVID Q1 2019 Q1 revenue of $163.4 million up 22% vs. Q1 2021 Systems revenue grew 37 % vs. Q1 2021 Balance sheet remains strong – over $475 million in cash and equivalents
6 Stratasys Penetrating Further into Industry Applications Q1 & Year - to - Date Highlights Collaborated with Lockheed Martin to qualify PEKK - based Antero CN03 for space - ready parts Radford is now the second auto OEM using all five Stratasys technologies across the entire product lifecycle chain Launch of TechStyle: the fashion industry’s first direct - to - textile 3D printer Aerospace Automotive Fashion
7 Stratasys Key Milestones Achieved Recent Highlights Intensified the Company’s focus on industrial, healthcare and production - scale Created New Entity: MakerBot + Ultimaker Published First ESG & Sustainability Report Margin accretive benefit upon closing Investment offers access to entry - level customers, potential incremental synergies and long - term value in the growing Desktop sector First report using GRI Standards by a 3D Printing OEM Visit stratasys.com/sustainability
8 Stratasys Experience Stratasys: Manufacturing Event Adding PA - 12 and polypropylene for H350 - furthering SAF competitive superiority Upgraded F123 series with Composite - Ready F190CR and F370CR 3D printers Secured first Validated FDM materials from third - party partners Origin One Local for Government and Defense Announced GrabCAD Print for Origin One Recent Highlights
9 Stratasys Leading Customers Ongoing Permanent Shift from Traditional to Additive Manufacturing Customer Success Goal: Grow % of BOM on UAVs from <1% up to 50% Reducing tooling costs by 80% vs. machined parts Reducing spare part lead times by 95%
10 Stratasys “Additive Manufacturing Forward” provides incentives for SMB manufacturers to make critical investments in 3D printing Raytheon, Lockheed Martin, GE Aviation, Honeywell and Siemens make clear public commitment to purchase more 3D printed parts US Government Initiative Aims to Boost Additive Manufacturing Usage to Spur Economic Growth
11 Stratasys Q1 Financial Results Eitan Zamir CFO Strong start to 2022 Q1 revenue growth driven by 37% growth in system sales Growth + improving margins position Stratasys to build momentum throughout 2022 and beyond
12 Stratasys Note: $ in millions unless noted otherwise. All numbers and percentages rounded GAAP Non - GAAP Q1 - 21 Q1 - 22 Change Y/Y Q1 - 21 Q1 - 22 Change Y/Y Total Revenue 1 34.2 3 4 21.8% 134.2 1 3.4 21.8% Gross Profit 55.6 69 . 7 14 . 1 62.6 77.4 1 4 . 8 • % Margin 41.4% 42.6% 1 . 2% 46.7% 47.3% 0 . 6% Operating Income (Loss) (18.4) (19.6) (1 . 2) (2.6) 2.0 4.6 • % Margin - 13.7% - 12.0% 1 . 7% - 1.9% 1.2% 3.1% Net Income (Loss) attributed to SSYS Ltd. (18.9) (20.9) (2.0) (3.8) 1.2 5.0 • % Margin - 14.1% - 12.8% 1.3% - 2.8% 0.7% 3.5% Diluted EPS (0.32) (0.32) 0.00 (0.06) 0.02 0.08 Diluted Shares 58.6 6 5 . 7 12.1% 58.6 67.1 14.5% Improving Financial Results – Q1 2022
13 Stratasys Strong Revenue Growth – Q1 2022 Note: $ in millions unless noted otherwise. All numbers and percentages rounded Quarterly Trend Revenue Growth – Q1’22 90.3 100.3 108.9 118.0 113.1 43.9 46.7 50.1 49.0 50.3 134.2 147.0 159.0 167.0 163.4 Q1' 21 Q2' 21 Q3' 21 Q4' 21 Q1' 22 Product Service Revenue Y/Y Vs. Q1 2019 Product 25 . 2 % 7 . 6 % System 36 . 7 % 16.4% Consumables 16.1% 0.5% Service 14.8% 0.3% Customer Support 10.1% 11 . 2 % $163.4M revenue up 21.8% YoY on strong systems, consumables and services growth Revenue up 5.2% vs. pre - COVID Q1 2019 – all key businesses higher
14 Stratasys Increasing Gross Margins – Q1 2022 All percentages rounded 41.4% 43.0% 42.9% 43.7% 42.6% 48.1% 50.4% 49.7% 49.6% 47.5% 27.8% 27.2% 28.2% 29.6% 31.7% Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1 '22 46.7% 47.5% 48.2% 48.7% 47.3% 55.4% 56.4% 57.0% 56.2% 53.7% 28.7% 28.6% 29.2% 30.6% 33.1% Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1 '22 Service Gross Margin Product Gross Margin Total Gross Margin Non - GAAP Margin improvements driven by higher revenues, partially offset by macro issues GAAP
15 Stratasys Controlling Operating Expenses – Q1 2022 Note: $ in millions unless noted otherwise. All numbers and percentages rounded Non - GAAP operating expenses GAAP operating expenses 73.9 89.3 Q1'21 Q1'22 65.2 75.3 Q1'21 Q1'22 Lowest Q1 non - GAAP OpEx as percentage of revenues in seven years
16 Stratasys Enhanced Results – Q1 2022 Note: $ in millions unless noted otherwise. All numbers and percentages rounded (18.4) (19.6) Q1'21 Q1'22 (2.6) 2 Q1'21 Q1'22 (18.9) (20.9) Q1'21 Q1'22 (3.8) 1.2 Q1'21 Q1'22 Operating income and net income reflect business scalability and operational efficiencies Non - GAAP operating (loss) income GAAP operating loss Non - GAAP net (loss) income GAAP net loss
17 Stratasys Fortified Balance Sheet and Cash Flow – Q1 2022 Note: $ in millions unless noted otherwise. All numbers and percentages rounded Balance sheet items Cash flow from operating activities 22.8 (16.1) Q1' 21 Q1' 22 Strong balance sheet at $475.6M cash and equivalents Cash use tied to deliberately increased inventory purchases, increased accounts receivable Q1 - 21 Q4 - 21 Q1 - 22 Cash and Cash Equivalents and Short - term deposits 530.4 Accounts Receivable 102.8 Inventories 124.2 Net Working Capital 637.8
18 Stratasys 2022 Outlook • 2022 - $685M - $695M o Sequential quarterly growth cadence • Q2 growth percentage of low to mid - teens vs Q2 2021 Revenue – Double - Digit Growth • 2022 $20M - $25M 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 o H2 stronger than H1 • Q2 relatively flat vs. Q2 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 $74M - $67M, or ($1.11) - ($1.00) 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 Figures include full year contribution from MakerBot until the announced business combination with Ultimaker closes
19 Stratasys Key Takeaways Executing on our plan to expand our leadership position in polymer 3D printing New technology offerings, expanded materials, software solutions and talented team position us for excellence Relentlessly focused on execution to drive growth Dr. Yoav Zeif CEO
20 Stratasys Thank You Q&A
21 Stratasys Three months ended March 31, 2022 Three months ended M arch 31 , 2021 GAAP Adjustments Non - GAAP GAAP Adjustments Non - GAAP Gross Profit (1) $55,577 $7,069 $62,646 Operating income (Loss) (1,2) (18,358) 15,785 (2,573) Net income (Loss) attributable to Stratasys Ltd (1,2,3) (18,911) 15,111 (3,800) Net income (Loss) per diluted share attributable to Stratasys Ltd (4) ($0.32) $0.26 ($0.06) 1) Acquired intangible assets amortization expense 6,966 5,356 Non - cash stock - based compensation expense 900 634 Restructuring and other related costs (177) 7,689 7,069 2) Acquired intangible assets amortization expense 2,225 2,192 Non - cash stock - based compensation expense 7,633 6,571 Restructuring and other related costs 555 1,810 Revaluation of investments 1,061 (3,670) Contingent consideration 207 191 Other expenses 2,237 1,622 13,918 8,716 21,607 15,785 3) Corresponding tax effect and other expenses 551 (674) $22,158 $15,111 4) Weighted average number or ordinary shares outstanding – Diluted 65,721 67,060 58,616 58,616 Appendix GAAP to non - GAAP reconciliation Results of operations Stratasys LTD