Stratasys and 3D Systems Release Quarterly Results: Good or Bad?
The two biggest publicly traded 3D printer companies just released their quarterly results.
3D Systems and Stratasys are the oldest and currently largest dedicated and publicly traded 3D printing companies, so it is always highly interesting to see how they are progressing. Much insight can be made by examining their materials.
In recent years both companies have been stressed by rising competition from lower-priced alternatives who have leveraged the expiry of the original companies’ patents. This has positioned both large companies to pursue the unusual and unexplored area of large-scale production 3D printing, but so far neither company has made a full transition to that market.
But how have they been doing recently? Let’s look at Stratasys’ results first.
In 2018Q2 the company’s sales of products and services was essentially flat as compared to the previous year, literally within 0.14%. Their other figures were similarly close, leading to a similar but slightly smaller net loss of USD$3.5M, as compared to USD$6.0M in the prior period.
You may think this is a concern, there being a loss (again), but in fact Stratasys has a stash of USD$347M in cash that it can draw from to keep afloat. At this rate of loss, they can easily survive for 25 YEARS. That’s plenty of time for them to leisurely move into other more profitable markets.
And then there’s 3D Systems.
Their revenue was not at all flat, and in fact increased almost 11% to USD$177M in the quarter. That’s significant: over a year that would represent a 50% growth spike!
After including various expenses and taxes, 3D Systems arrived at a net loss of USD$8.9M, a little more than the prior period.
How can they have a loss when their revenue was rising so sharply? Examining their statement it appears that their “Selling, general and administrative operating expenses” grew significantly: almost 13%. This led to increased operating expenses that took the shine off that new revenue.
I’m not sure why that expense grew; it could be that they’re pushing hard on sales and that is the cost of doing so. It could also be something else we don’t know about.
But the good news for 3D Systems is that they seem to be increasing their sales. However, it also appears they may still require more internal tuning to get expenses right.