It’s that time of the year when the first quarter results are announced by publicly traded companies. Of interest here is Stratasys and 3D Systems, the two largest 3D printing companies on the planet.
Both of these companies have been undergoing stress and change, so these results have been strongly anticipated as a way to gauge how these corporations have been handling their respective situations.
Their tremendous sizes dominate the 3D printing world, with each offering a wide variety of products; the health of these companies does reflect on the industry as a whole.
Let’s take a look at 3D Systems first.
Their revenue was down slightly at USD$152.6M, 5% less than the first quarter of 2015 for comparison. They explain that 3% of that decrease was due to the shutdown of their consumer division in the fall of 2015. My calculations tell me that this implies they sold USD$4.8M of consumer products in 2015Q1, which is pretty substantial. This corresponds to 2-5,000 desktop units, depending on the product ratio they actually sold.
On the other hand, cutting the consumer division did save them some money: operating expenses were down USD$2.2M.
It seems a bit curious they would cut a division that’s making USD$4.8M in order to save USD$2.2M in expenses, but maybe there’s more to the story than just that. Also, they say they’ve cut research and development expenses by 9%, which is included in the USD$2.2M.
All of this resulted in a loss for the quarter of almost USD$18M in spite of generating around USD$18M cash, but that’s not terribly concerning in the short term, as they’ve still got USD$169.8M in reserve cash. They’re going to be around for quite a while yet, providing plenty of time for their new CEO to implement changes to get things back on track.
3D Systems chooses not to report on the number of systems sold, likely because their product line is mostly high-end machines at this point and the numbers would be small - but each unit sold would bring in significant revenue.
Their quarter ended also with a loss of USD$23.1M, on revenues of USD$167.9M. That revenue is down from 2015Q1 by about USD$4.8M or about 2.8%.
The company generated around USD$32M cash and has over USD$280M in cash reserves, so again, little to be concerned about regarding the loss in this quarter.
Unlike 3D Systems, Stratasys likes to report on the number of units sold, which totaled 5,125 3D printing systems, most of which will no doubt be lower-cost MakerBots.
Where the big change exists is in their expenses, or the cost of goods sold. In 2015Q1, the company spent almost USD$127M, while in 2016Q1, they spent only USD$87M! That’s a cut of almost 32%!
I understood they were making internal process changes to make things more efficient, but this is quite substantial and could lead to significant competitive advantage.
Now the question is, “who’s winning?”
I’d have to give the edge to Stratasys based on their Q1 reports. While many of their fundamental financial statistics are eerily close to one another, Stratasys appears to be making bigger strides in expense management.
On the other hand, 3D Systems has just installed their new CEO, who has not had sufficient time to make any substantive changes to their products or processes. I’d be more curious to see what happens to 3D Systems in Q3 and Q4 of this year, when his influence will be more apparent.