Stratasys(SSYS) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q4 2024, consolidated revenue was $150.4 million, down 3.8% year-over-year. For the full year, consolidated revenue declined 8.8% to$ 572.5 million compared to $627.6 million in 2023 [31][33]. - Adjusted gross margin for Q4 was 49.6%, up from 48.8% in the same period last year. For the full year, non-GAAP gross margin improved by 100 basis points to 49.2% [35][36]. - GAAP net loss for Q4 was$ 41.9 million, or $0.59 per diluted share, compared to a net loss of$ 15 million, or $0.22 per diluted share, in the same period last year [39]. Business Line Data and Key Metrics Changes - Product revenue in Q4 fell by 4.8% to$ 105.1 million, with systems revenue down 1.5% to $46.7 million. Consumable revenue decreased by 7.3% to$ 58.4 million [31][32]. - For the full year, product revenue was $392 million, down from$ 433.7 million in 2023. Consumables revenue increased by 2.3% to $251.7 million [33][34]. Market Data and Key Metrics Changes - The company generated 36% of its revenues from manufacturing in 2024, up from 34% in 2023, indicating a shift towards end-part manufacturing [10]. - The dental market opportunity is projected to reach nearly$ 2.5 billion by 2028, with significant interest in the TrueDent resin [23][79]. Company Strategy and Development Direction - The company is focused on enhancing its leadership in additive manufacturing and is committed to right-sizing the business while maintaining R&D resources [9][51]. - The strategy includes a focus on high-value applications, particularly in manufacturing and the dental sector, with plans to expand its product offerings and customer base [10][80]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth despite current macroeconomic challenges, emphasizing the long-term value proposition of additive manufacturing [56][108]. - The outlook for 2025 anticipates revenue in the range of $570 million to$ 585 million, with expectations for sequential growth throughout the year [45]. Other Important Information - The company ended Q4 with $150.7 million in cash and equivalents, with no debt, providing a stable financial position to support growth initiatives [12][44]. - A$ 120 million investment from Fortissimo Capital is expected to close in Q2 2025, which will further strengthen the company's financial position [13][44]. Q&A Session Summary Question: Market conditions and revenue cadence for 2025 - Management acknowledged current downturns but highlighted strong customer engagement and a focus on reliability and effectiveness of equipment as key areas of customer interest [56][58]. Question: Gross margin guidance for 2025 - Management indicated that gross margins are expected to remain stable, with improvements anticipated as cost-saving measures take effect [62][64]. Question: Organic revenue growth and FX impacts - Management noted minimal impact from divestitures and hedging strategies in place to mitigate FX risks [75][76]. Question: Consumables revenue decline - Management described Q4 as an outlier and expressed confidence in a rebound in consumables revenue for 2025 [88]. Question: Acquisition targets and strategy - Management emphasized a clear strategy focused on shareholder value and indicated interest in opportunities that align with their long-term goals [97][102]. Question: Market verticals with confidence - Management identified dental, aerospace, and tooling as key verticals with growth potential, while remaining cautious about overall market conditions [112][113].