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3D Systems Surprises With Profitable Results

3D Systems reported their first quarter 2021 financials this week, and they seem to have made a profit.

The company has been incurring quarterly losses for quite a while, and these most recent financial results are a pleasant surprise.

They reported their 2021Q1 first quarter revenue to be up almost eight percent over 2020Q1. That’s notable because 2020Q1 was mostly before the pandemic, while 2021Q1 was still deep in the pandemic. In spite of conditions, they managed to increase revenue.

Their GAAP earnings for the first quarter were a very healthy US$45.2M, although that figure should be tempered slightly as it was assisted by their recent divestiture of Cimatron, which was sold late last year to an investment firm, after six years of ownership.

Of particular note is the increase in 3D Systems’ healthcare business, which is an area of strong focus for the company. 3D Systems reports it grew an astonishing 38.7% to US$72.5M in business in the first quarter.

They also managed to slightly increase their gross profit margin from 44.0% from 42.1%, indicating some efficiencies have been undertaken.

Those efficiencies are partly in the reduction of expenses. 3D Systems reduced their quarter-over-quarter expenses by a significant 12.1% from 2020Q1. 3D Systems said these savings were the result of earlier restructuring activities, which began to pay off in this quarter.

Here’s a chart from their quarterly presentation showing their expense trajectory. This looks quite promising:

This is a chart of their growth rate and cash from operations, which shows a definite trend:

Keep in mind that for a portion of these periods the pandemic imposed unusual finical conditions on the company and their clients. However, there trends look exceptionally good.

These are perhaps the most significant financial results for 3D Systems in many years. It seems that new CEO Jeffrey Graves’ strategy of restructuring is paying off.

The financials were definitely noticed by the stock market, as 3D Systems is one of the few publicly traded 3D print companies. The day before the results were released, the stock price closed at US$17.77, but rose to US$22.35 the next day, an instantaneous jump of almost 26%.

However, the company’s stock price was higher in February, when it hit a peak of US$55.35. That earlier rise might have been from investors anticipating that the company would turn around, and they were correct. It may be the company’s stock price could continue to rise if this pattern of profitability continues in future reports.

Could this be the moment 3D Systems has finally turned the corner? The company has struggled to be profitable ever since the consumer crash of 2015, where their high visibility in that market took down their stock price from an all-time high of near US$100.

Perhaps we’ll see that price level achieved again?

Via 3D Systems

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