Stratasys(SSYS) - 2022 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported revenues of $163.4 million, a 22% increase compared to the prior year quarter, with systems revenue growing by 37% [8][20] - GAAP gross margin was 42.6%, up from 41.4% year-over-year, while non-GAAP gross margin improved to 47.3% from 46.7% [23] - GAAP net loss for the quarter was$ 20.9 million, or $0.32 per diluted share, compared to a net loss of$ 18.9 million, also $0.32 per diluted share, in the same period last year [25] Business Line Data and Key Metrics Changes - Product revenue was$ 113.1 million, a 45.2% increase year-over-year, with system revenue at $54.5 million, up 36.7% [21] - Consumables revenue increased by 16.1% to$ 58.6 million compared to the same period last year [21] - Service revenue was $50.3 million, a 14.8% increase year-over-year [22] Market Data and Key Metrics Changes - The company expanded its penetration into aerospace, automotive, and fashion applications, with notable partnerships including Lockheed Martin and Radford Motors [9][10] - The company launched a fashion solution with Techstyle, marking its entry into the fashion industry [9] Company Strategy and Development Direction - The company aims to grow its leadership position in polymer 3D printing, focusing on high-volume production systems [8][10] - A new entity was created from MakerBot and Ultimaker to concentrate on industrial and healthcare applications, allowing the company to focus on its core business [10][11] - The company published its inaugural ESG report, outlining its commitment to sustainability and responsible production [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong demand despite macroeconomic challenges, indicating a robust inventory build to meet this demand [54] - The company expects revenue growth to continue sequentially throughout the year, with the second half anticipated to be stronger than the first half [27] - Management acknowledged potential impacts from global issues such as supply chain constraints and currency fluctuations [27] Other Important Information - The company ended the quarter with over$ 475 million in cash and no debt, positioning itself well for future opportunities [8][26] - The company plans to launch 16 new materials throughout the year, enhancing its product offerings [62] Q&A Session Summary Question: Are you seeing synergies in your product portfolio? - Management confirmed that the strategy is working well, leveraging infrastructure and technology to capture synergies across customers and technologies [33][34] Question: Can you provide dollar amounts for systems and consumables? - Total system revenue was $64.5 million, and consumables revenue was$ 58.6 million [38] Question: How are gross margins affected by inflation and supply chain issues? - Gross margins were pressured by approximately 200 basis points due to inflation and material costs, but price increases helped mitigate some of these pressures [41][42] Question: What is the outlook for consumables following strong system sales? - Management expects continued growth in consumables as hardware sales increase, with the highest consumable revenue since Q2 2018 [48] Question: What is the company's strategy for the textile printing market? - The company is targeting the high-end fashion market with its PolyJet technology, focusing on use cases to drive adoption [56][57] Question: What are the geographic trends in demand? - Demand remains strong across all geographies, with particularly strong performance in the EMEA region [67]