Stratasys released their financials for the first quarter of 2020, and unsurprisingly they took a blow from the COVID-19 crisis.
The long-term 3D printer manufacturer not only had results lower than predicted, but also withdrew their financial guidance for the remainder of the year. This is entirely expected, as conditions have changed so much they are not able to reliably predict future performance.
How bad were the results? Down, but not terrible in my opinion.
Their Q1 2020 revenue dropped 14% to US$132.9M from Q1 2019’s US$155.3M.
Since Stratasys has recently been focusing on the aerospace industry, I am not surprised they have experienced lower sales. The aerospace industry has been particularly hard hit as air travel has mostly stopped worldwide since mid-March. At my local airport traffic is down around 98%, and that’s probably close to what’s being seen everywhere. Aerospace won’t be buying more 3D printers for a while.
Stratasys’ margins also decreased to 45.0% from 49.2% last year in Q1. This is a bit disconcerting, but Stratasys explains why this is so:
“Gross margin decline is due primarily to the lower proportion of hardware and consumables out of the total revenue mix due to the COVID-19 crisis, not to discounting or material ASP reductions. The company strongly believes that gross margins will return to their recent levels as the economy recovers.”
Overall the company lost US$19.9M during Q1 2020, as compared to a loss of only US$3.3M in Q1 2019.
While these results are not particularly positive, I am still upbeat for Stratasys’ future. In the short term the losses are negligible compared to their cash hoard of US$325.5M; they can absorb losses for quite a while.
In the long term I predict very positive improvement, ironically caused by the same crisis that generated these poor results.
During the crisis Stratasys, along with many other leading 3D printing companies, demonstrated the ability to very quickly produce emergency products on demand. While most of us in the 3D printing world know this was always possible, this fact is now known by the general public.
That alone will lead to vastly increased attention to 3D print solutions and approaches in the future. Companies will, after the crisis, re-work their supply chains to be far more resilient. That new structure will certainly include a significant 3D print component, and companies like Stratasys will surely benefit.