Stratasys Q4 Earnings Call Highlights

Key Points

• Q4 revenue fell 6.9% to $140 million with system sales pressured by constrained capital budgets while consumables were stable (+2.4%); GAAP margins were hit by tariffs, restructuring and mix, but full-year non‑GAAP profitability and operating cash flow improved and the company ended 2025 with $244.5 million in cash and no debt.
• Manufacturing adoption is growing (37.5% of 2025 revenue vs. ~25% in 2020) with production-scale wins and partnerships — notably Airbus (25,000+ flight‑ready parts), Boeing tooling purchases, defense drone suppliers, Rivian deployments, and new workflow integrations — supporting future consumables demand.
• 2026 guidance targets revenue of $565–$575 million and sequential quarterly growth with non‑GAAP gross margin ~46.7–47.1% and adjusted EBITDA of $25–$30 million, but management warns about roughly $17 million of combined adverse impacts from foreign exchange and tariffs driving near‑term margin pressure.

Stratasys NASDAQ: SSYS executives said the company ended 2025 with continued operational discipline and cash generation despite a difficult demand environment that pressured revenue, particularly for new systems. On the company’s fourth-quarter earnings call, management highlighted growing exposure to manufacturing use cases, new partnerships aimed at strengthening end-to-end workflow offerings, and a 2026 outlook that assumes sequential improvement through the year.

Fourth-quarter results show pressure on revenue, stability in consumables

For the fourth quarter, Stratasys reported consolidated revenue of $140 million, down 6.9% year-over-year. CFO Eitan Zamir said product revenue fell to $97.6 million from $105.1 million in the prior-year period.

Within product revenue, system revenue was $37.8 million, which was 18% higher than the third quarter but down from $46.7 million a year earlier. Zamir attributed the year-over-year decline in system sales to constrained capital budgets that continued to impact customer purchases of new equipment.

Consumables revenue in the quarter was $69.8 million, up 2.4% from the same period last year. Service revenue was $42.4 million, compared to $45.3 million a year earlier, with customer support revenue at $29.6 million versus $30.6 million.

Margins and profitability: tariff impact, mix, and restructuring costs

Stratasys’ GAAP gross margin was 36.8% for the quarter, down from 46.3% a year earlier. Management cited higher restructuring charges, tariff impacts, lower revenue, and changes in mix as key factors. Non-GAAP gross margin was 46.3%, compared with 49.6% in the prior-year quarter, with the year-over-year change attributed to tariffs, lower revenue, and mix.

Operating expenses declined versus the prior-year period. GAAP operating expenses were $72.2 million for the quarter, down from $79.4 million. Non-GAAP operating expenses were $60.8 million, down from $65.2 million, reflecting cost-saving initiatives that were implemented in mid-2024 and “fully embedded” in the operating model, according to Zamir.

On the bottom line, the company posted a GAAP operating loss of $20.8 million for the quarter, compared to a GAAP operating loss of $9.7 million a year earlier, primarily due to lower gross profit, partially offset by lower operating expenses. Non-GAAP operating income was $4.1 million, down from $9.4 million.

GAAP net loss for the quarter was $18.9 million, or $0.22 per diluted share, compared to a GAAP net loss of $41.9 million, or $0.59 per diluted share, in the year-ago period. Zamir noted the prior-year quarter included a $30.1 million non-cash impairment charge related to an investment in Ultimaker as part of the merger with MakerBot. Non-GAAP net income was $6.2 million, or $0.07 per diluted share, down from $8.5 million, or $0.12 per diluted share, in the fourth quarter of 2024.

Adjusted EBITDA was $9.2 million, representing a 6.6% margin, compared with $14.5 million and a 9.6% margin a year earlier.

Full-year 2025: lower revenue, improved non-GAAP profitability and cash flow

For the full year 2025, consolidated revenue was $561.1 million, down from $572.5 million in 2024. Product revenue was $380.3 million versus $392.0 million, including system revenue of $131.6 million compared to $140.3 million. Consumables revenue was $248.7 million versus $261.7 million. Service revenue was $170.8 million, down from $180.5 million, with customer support revenue of $119.0 million compared to $124.7 million.

Full-year GAAP gross margin was 41.2%, compared to 44.9% in 2024. Non-GAAP gross margin was 46.9% versus 49.2%, with management again pointing to tariff impacts, lower revenue, and mix.

Despite lower revenue, Stratasys posted improved profitability on a non-GAAP basis. Full-year non-GAAP operating income was $8.3 million, up from $4.9 million in 2024, and adjusted EBITDA increased to $28.5 million (5.2% of revenue) from $26.0 million (4.5% of revenue). Zamir said the improvement reflected reductions in operating expenses that more than offset the impact of lower revenue and margins.

The company also generated higher operating cash flow in 2025. Cash from operations was $15.1 million, up from $7.8 million in 2024. Fourth-quarter operating cash flow was $4.8 million, compared to $7.4 million a year earlier.

Stratasys ended 2025 with $244.5 million in cash, equivalents, and short-term deposits and “no debt,” according to CEO Dr. Yoav Zeif, who said the balance sheet provides flexibility for organic investment and “accretive acquisition opportunities.”

Strategy and commercial updates: aerospace, automotive, and workflow partnerships

Zeif emphasized that 37.5% of 2025 revenue came from manufacturing, up from 36% in 2024 and from “just over 25%” in 2020, adding that management expects the manufacturing mix to grow over time as a driver of consumables utilization and margin.

Among customer and partnership highlights discussed on the call:

• Airbus partnership: Zeif said Airbus produced more than 25,000 flight-ready parts last year using Stratasys’ ULTEM 9085 filament, bringing total certified Stratasys parts in active service at Airbus to more than 200,000 across several aircraft programs. He described the collaboration as demonstrating production-scale additive manufacturing, citing weight and lead-time reductions and support for distributed manufacturing.
• Additional aerospace activity: Boeing’s 737 Innovation Center purchased two F3300 printers for production tooling in the fourth quarter, and another aircraft manufacturer purchased two additional F900 systems for flight-grade parts, increasing its fleet to nine systems.
• Defense and drones: Zeif said Stratasys’ top three customers in its FDM parts manufacturing division in 2025 were “all large military drone suppliers.” In Q&A, he called aerospace and defense the company’s largest vertical in 2025 and emphasized certifications, qualifications, and customer trust as differentiators.
• Automotive wins: Zeif highlighted Subaru of America’s early implementation of a new T25 high-speed head for the F770 printer and described Rivian’s deployment of 28 Stratasys systems, including high utilization of the F900 and faster printing with F3300 systems.
• Software and workflow partnerships: Stratasys announced an integration with nTopology to incorporate PolyPath simulation technology into GrabCAD Print Pro, which management described as enabling validated FDM workflows and reducing validation time; early access is expected to launch in Q2 2026 for select systems.
• Post-processing and channel expansion: The company launched a post-processing partnership program with PostProcess Technologies and added Oak Ridge Systems as a go-to-market partner to expand reach for PolyJet, SLA, and P3 technologies in the U.S. and Canada.
• Advisory boards: Stratasys expanded its industrial customer advisory board and formed a new medical advisory board, with initial members including executives from Medtronic and Edwards Lifesciences, among others.

2026 outlook: return to growth, but FX and tariffs weigh on profitability

For 2026, Stratasys guided to revenue of $565 million to $575 million and said it expects sequential revenue growth each quarter, with the second half stronger than the first. Management expects consumables revenue to increase over 2025 and said the first quarter is expected to have the lowest revenue and profit margin profile of the year.

Non-GAAP gross margin is expected in a range of 46.7% to 47.1%, with strength in the second half tied primarily to higher anticipated revenue. Operating expenses are expected to range between $260 million and $262 million, including a forecast $10 million adverse impact from foreign exchange if current rates persist.

Management also addressed external pressures. Zamir said the adjusted EBITDA outlook includes approximately $17 million of combined adverse impacts from foreign exchange and tariffs. In Q&A, he described the operating expense increase year-over-year as “almost the only increase” and largely driven by the Israeli shekel’s strength, adding the company may consider hedging if the shekel weakens.

For the year, the company guided to GAAP net loss of $83 million to $67 million ($0.95 to $0.76 per diluted share) and non-GAAP net income of $8 million to $12.5 million ($0.09 to $0.14 per diluted share). Adjusted EBITDA is expected at 4.5% to 5% of revenue, or $25 million to $30 million. Capital expenditures are expected between $20 million and $25 million, and the company expects positive operating cash flow for 2026, subject to uncertainty around foreign exchange and tariffs.

About Stratasys NASDAQ: SSYS

Stratasys, Inc is a global leader in additive manufacturing and 3D printing solutions, offering a comprehensive portfolio of technologies and materials for rapid prototyping and production. Founded in 1989 by Scott and Lisa Crump, the company pioneered fused deposition modeling (FDM) and has since expanded its capabilities to include PolyJet, stereolithography and metal deposition systems. Stratasys serves a broad array of customers, from small design studios to major industrial manufacturers, enabling accelerated product development and on-demand part production.

The company's product line encompasses both desktop and industrial-grade 3D printers, dedicated support materials and proprietary software designed to streamline the digital manufacturing workflow.

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