Stratasys expects continued growth after announcing an impressive 18% increase in revenue in the fourth quarter of 2021

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Manufacturer of industrial 3D printers Stratasys (SSYS) expects to start fiscal 2022 with continued growth among high-teens, after announcing an 18% increase in revenue in its fourth quarter 2021 results.

During the fourth quarter of 2021, Stratasys generated $167 million, $25 million more than the $142 million reported in the fourth quarter of 2020, and an increase of $7 million from the $160 million reported compared to the fourth quarter of 2019 pre-COVID. During the company’s earnings call, its CEO Yoav Zeif explained how its impressive performance was due to a shift to its manufacturing business, which helped it achieve its highest system sales since the fourth quarter 2018.

“We’ve accomplished this with new systems, suitable for large-scale manufacturing, a software platform to integrate the entire manufacturing digital business, and a hardware strategy that quickly unlocks new applications,” Zeif said during the talk. the call. “We are excited about this expanded portfolio and believe it will further complement our systems offering to help us drive our overall growth strategy.

“Today, we collaborate with the world’s leading materials companies, software partners and our customers, creating many new avenues for growth.”

Stratasys CEO Yoav Zeif attributed its revenue surge in the fourth quarter of 2021 to its expanding systems portfolio. Image via Stratasys.

Stratasys Fourth Quarter 2021 Financials

After a successful third quarter of 2021 in which it posted 24% revenue growth, Stratasys delivered another strong performance in the fourth quarter of 2021, with the majority of its revenue upside coming from its Products business. The division reported $118 million in Q4 2021, a 19% increase from the $99 million it generated in Q4 2020, largely due to a 26% increase in system revenue during the same period.

Similarly, the company’s service revenue grew from $43 million to $49 million between the fourth quarter of 2020 and 2021, which it attributes to a boom in demand from its dental and medical customer base. However, compared to the fourth quarter of 2019, when the segment brought in $51 million, that figure still represents a 4% decline, suggesting it was also impacted by supply issues that hampered other service providers.

Elsewhere, financial data from Stratasys shows its operating expenses fell from $69 million to $89 million from the fourth quarter of 2020 to the fourth quarter of 2021, with “sales, general and administrative expenses” listed as its highest cost. higher in this area. During the company’s earnings call, VP Finance Eitan Zamir expanded on the figure, explaining it was the result of the return of the five-day week, rising market costs and expenses associated with its acquisitions.

Stratasys financials ($) Q4 2020 Q4 2021 Difference (%) Q4 2019 Q4 2021 Difference (%)
Some products 99m 118m +19 109m 118m +8
Services 43m 49m +14 51m 49m -4
Total revenue 142m 167m +18 160m 167m +4

Stratasys expansion in 2021

In fiscal 2021, Stratasys generated $607 million in revenue, 17% more than in 2020. While that growth was no doubt aided by the easing of pandemic-related restrictions during the period, it was also driven by the company’s rapid growth. expanding his portfolio, which Zeif says allowed him to better capture sales opportunities he had previously missed.

“Until last year, our business was centered on two core technologies: FDM and PolyJet,” Zeif said on Stratasys’ earnings call. “While we retained our leadership in these areas, this limited portfolio meant we missed opportunities to participate more fully in the fast-growing applications at the heart of the move from prototyping to manufacturing.”

One of the primary ways Stratasys has grown its offering is through acquisitions, and its decision to buy SLA 3D printer maker RPS in February 2021 generated almost immediate revenue. While the company didn’t reveal the exact numbers behind adding RPS’ NEO systems to its portfolio, it said they performed “better than expected” and enabled it to address broader dental applications.

Around the same time, Stratasys also released its ABS-CF10 material, which may have originally been designed for use with F123-series systems, but would also have been a catalyst for F370 sales in 2021. , and as the company begins to increase its open hardware offering in 2022, Zeif said it expects this change to “increase software revenue” going forward.

Another significant purchase by the company during the period was xar 3d, which he purchased in October 2021, after the HSS specialist helped develop Stratasys’ new H350 system. Since the machine was unveiled in the second quarter of 2021, it’s reportedly generated considerable interest among service providers, although it didn’t start shipping until December 2021, so it probably won’t have had much impact on fourth quarter sales.

“Obviously our focus on manufacturing is working,” added Zeif. “A year ago, we shared that in 2020 over 25% of our revenue came from manufacturing. We are happy to say that for 2021 it was 29% and we expect at least 20% growth in manufacturing sales in 2022.”

Stratasys H350 3D printer.
Stratasys’ H350 3D printer is expected to be one of its key growth drivers in the future. Photo via Stratasys.

More growth to come?

With optimism surrounding its expanded portfolio, Stratasys set its guidance for the first quarter of 2022 at double-digit growth in the “high-teens,” and said it expects “the second half of of the year is significantly stronger than the first,” resulting in revenue of $680-695 million, which if realized would be 12-14% growth.

Looking ahead, Zeif told analysts on the company’s earnings call that its cash balance of $502 million, nearly double the $272 million it had at the same time the last year, and the addition of the H350 and origin one to its portfolio, positions it well for the coming year, with these systems having the potential to “double its addressable market”.

“In 2022, we will continue our efforts to strengthen our leadership in polymer 3D printing,” Zeif concluded on the call. “We have established the foundation for long-term growth based on a leading polymer 3D printing ecosystem, complemented by continuous innovation across our portfolio.”

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The featured image shows the Stratasys F770 3D printer. Image via Stratasys.

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