Today Stratasys announced their financial results for 2017 and there are some very positive and negative aspects.
As one of the largest 3D printing companies in the world, it is fortunate for us to be able to transparently see their progress through their stock price and public postings of financials. From these we can attempt to read a bit into the current state of the industry at large.
But sometimes the announcements from one company affect other companies, and this seems to be one of those times.
First, let’s look at their overall results (Note: we always and only look at GAAP statistics, the Generally Accepted Accounting Principles):
Their revenue for 2017 was essentially flat compared to 2016; A drop of only 0.06% was recorded, so while technically lower than 2016, they were at virtually the same level of cash input.
Stratasys recorded an operating loss of USD$30.5M on the full year. While that may sound not exactly terrific, it is a very substantial improvement over 2016’s USD$86.7M loss. Big companies’ financial movements are often ponderously slow, so progress like this is not unusual. But to me it is quite positive.
Similarly, their net loss for 2017 of USD$40.0M is substantially less than 2016’s USD$77.2M loss. Again, significant progress.
You may be wondering how a company can suffer year-after-year loss and still be operating. That’s because Stratasys holds an enormous amount of cash from which they fund these losses. Their hoard is so large from prior years they can withstand losses of this type of many years at their current burn rate, so there should not be a concern here.
The company also “generated $61.9 million in cash from operations in fiscal 2017”. This is a key point, because USD$21.0M of that was generated in the fourth quarter of 2017. That’s worth repeating: one third of their 2017 revenue appeared in one quarter of the year.
There is an interesting take on this: the boost in revenues towards the end of 2017 could very likely be due to the new equipment they announced during the year that became practically available for order and shipment in the final quarter.
This suggests they could continue at this revenue pace through 2018. Arithmetic time: the first three quarters of 2017 were paced at USD$13.6M, or a yearly pace of USD$54M. At the final quarter’s pace, they’re on track for 2018 to hit USD$84M, a huge boost that could put them in the black.
Evidently they changed something in 2017 that made this happen. I suspect it was the introduction of their F123 series, which I’ve heard in confidence is the “highest selling machine they’ve ever had”.
The rest of the market is in a bit of a tizzy today as a result of this. 3D Systems, Protolabs and ExOne are all down slightly. Stratasys itself is down even more strongly, suggesting the marketeers don’t like what they see.
This is a bit baffling to me, as it appears Stratasys may have turned the corner and could be headed for much better results in 2018.