How Is Stratasys Doing During The Pandemic?

By on August 17th, 2020 in Corporate

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How Is Stratasys Doing During The Pandemic?

Stratasys released their quarterly results, and I reviewed them to see how the pandemic is affecting the giant 3D printer manufacturer.

Certainly all businesses are affected during these uncertain times; many have experienced massive downturns in business, while others have experienced nothing much at all. A rare few happen to be in the right place at the right time and have seen business boom.

Stratasys is not one of the latter.

Stratasys 2020 Q2

Their earnings took a hit during 2020Q2, as they reported a 27.9% drop in revenue during the period as compared to the same period last year. That’s significant, but not totally unexpected due to the market chaos taking place. Stratasys explained the downturn:

“The 27.9% reduction was primarily driven by the adverse impact of COVID-19 on the company’s customers throughout the industries into which the company sells its products and services.”

This is most certainly true, as a big portion of Stratasys’ business is in the aerospace market, where they’ve spent many years building up competence in that domain. That includes specialized products, programs, materials, equipment and marketing.

3D Printing Aerospace in 2020

Today the aerospace industry is undergoing perhaps its most significant downturn ever. Some airports have seen traffic drops as high as 95%, which is an incredible figure. These traffic drops mean airlines must fly fewer aircraft to transport the same number of people, and thus they’ve mothballed many aircraft.

Typically the airlines pulled out the inefficient and older aircraft from their fleet and retired them. This leaves them with a more efficient, but much smaller fleet to maintain operations.

By doing so they’ve reduced the average age of the fleet and effectively postponed the need for acquiring new aircraft from manufacturers. Thus, eventually, the aircraft manufacturers are hurt as orders for their products dry up.

Finally, this in turns means that those aircraft manufacturers using Stratasys equipment will need to produce fewer parts and buy fewer (or no) 3D printers to make those parts. Stratasys will be hurt by those lower equipment sales, but also by lower materials sales for equipment already in place at aerospace companies.

It’s not surprising they took a dent in their revenue during the quarter, but it is by no means fatal. Not even close. The suffered a quarterly loss of US$29.3M, down from a profit of US$0.8M in the corresponding quarter last year.

How are they surviving with the loss? It’s simple: they draw from their cash stash of currently US$313M. This quarter they pulled only US$9.7M from this pile, leaving plenty to handle any future issues.

All in all, they seem to have done pretty well considering the circumstances. They were not forced to undertake significant changes (i.e., layoffs), as their major competitor, 3D Systems, did recently.

The only questions now are how long will it take for Stratasys’ business to resume normal levels, and whether they can leverage the increased interest in 3D printing by manufacturers as a result of the crisis.

Via Stratasys

By Kerry Stevenson

Kerry Stevenson, aka "General Fabb" has written over 8,000 stories on 3D printing at Fabbaloo since he launched the venture in 2007, with an intention to promote and grow the incredible technology of 3D printing across the world. So far, it seems to be working!

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