Slide 1: Q2-2014 Financial Results Conference Call
XX March 2013 Q2-2014 Financial Results Conference Call August 7th 2014
Slide 2: Q2-2014 Conference and webcast details
Q2-2014 Conference and webcast details 2 CEO David Reis CFO & COO Erez Simha VP, Investor Relations Shane Glenn Speakers Live Dial-in Information PRIMARY DIAL-IN: (877) 415-3180 INTERNATIONAL DIAL-IN: (857) 244-7323 PARTICIPANT PASSCODE: 84391755 PRIMARY DIAL-IN: (877) 415-3180 INTERNATIONAL DIAL-IN
Slide 3: Forward looking statement
Stratasys Forward looking statement 3 Certain information included or incorporated in this presentation may be deemed to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Secur
Slide 4: Q2 Summary & Outlook
Reported record revenue, non-GAAP net income and EPS Strong 35% organic revenue growth driven by demand for higher-end systems and materials Significant investments in market development and improvements to organizational structure to support future growth Completed acquisitions of Solid Concepts an
Slide 5: Financial Results Non-GAAP
Financial Results Stratasys Ltd. Non-GAAP ($ in millions unless noted otherwise) 5 Quarter Highlights: Revenue growth of 67% YOY Organic revenue growth of 35% YOY Non-GAAP gross margin increased to 59.8% Non-GAAP net income growth of 51% YOY MakerBot contributed $33.6 million in revenue Raised 2014
Slide 6: Financial Results: Revenue
Financial Results Revenue Stratasys Ltd. Non-GAAP ($ in millions) 6 Total Revenue - Quarter Total Revenue -Quarterly Trend Quarter Highlights: System revenue +108% YOY Consumable revenue +35% YOY Customer Support Revenue +59% YOY $90.4 $154.1 $16.3 $24.4 Q2-2013 Q2-2014 Product Service $82.8 $90.4 $
Slide 7: Financial Results: System Unit Sales
Financial Results System Unit Sales1 Stratasys Ltd. 7 Total Units –Quarter Total Units –Quarterly Trend (1) Includes systems sold by Stratasys, Inc. in all periods; and units for MakerBot starting only on August 15, 2013 Quarter Highlights: MakerBot impact, including launch of Replicator Mini & Z18
Slide 8: Financial Results: Gross Profit
63.9% 62.9% 62.3% 62.9% 63.5% 61.9% 32.1% 38.5% 37.6% 41.9% 45.8% 46.3% 59.0% 59.2% 58.8% 60.2% 60.9% 59.8% Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Product Gross Margin Service Gross Margin Total Gross Margin Gross Margin – Quarterly Trend ($ in millions unless noted otherwise) Q2-13 Q2-14 % Chang
Slide 9: Financial Results: Operating Profit
($ in millions unless noted otherwise) Q2-13 Q2-14 % Change YOY R&D Expense % of sales 9.5 8.9% 17.6 9.9% +85.9% SG&A Expense % of sales 31.9 29.9% 60.3 33.8% +89.0% Total Operating Exp. % of sales 41.4 38.8% 78.0 43.7% +88.2% Total Operating Profit % margin 21.7 20.3% 28.8 16.1% +32.5% 10.1% 8.9% 9
Slide 10: Financial Results: Revenue Geographic Mix
Financial Results Revenue Geographic Mix Stratasys Ltd. Non-GAAP 10 North America, 53% EMEA, 24% APAC, 21% Other, 2% Geographic Sales Q2-2014 North America, 52% EMEA, 27% APAC, 19% Other, 2% Geographic Sales Q2-2013 Quarter Highlights: Strong growth in all regions Majority of MakerBot revenue genera
Slide 11: Financial Results: Balance Sheet Summary
Financial Results Balance Sheet Summary Stratasys Ltd. ($ in millions unless noted otherwise) 11 Selected balance sheet items ($ in millions) Q1-14 Q2-14 Cash , Cash Equivalents & Inv. $607.5 $577.9 Accounts Receivable 106.0 113.6 Inventories 99.8 114.3 Net Working Capital 712.8 717.2 Highlights $57
Slide 12: Financial Results & Projections
12 Financial Results & Projections Stratasys Ltd. Non-GAAP ($ in millions unless noted otherwise) * Periods prior to 2013 are pro forma including Objet, Ltd. $277 $359 $487 $0.94 $1.49 $1.84 $2.25 - $2.35 FY11 FY12 FY13 FY14 (guidance) Revenue (millions) EPS $750 - $770
Slide 13: Fiscal 2014 Financial Guidance
Fiscal 2014 Financial Guidance Revenue (M) $750 - $770 Non-GAAP Diluted EPS $2.25 - $2.35 Financial Guidance Revenue and Earnings Guidance Stratasys Ltd. Non-GAAP 13
Slide 14: Long-Term Target Operating Model
Revenue growth Operating margin1 Net income margin1 Effective tax rate1 +25% 18% -23% of sales 10% -15% 16% - 21% of sales Financial Guidance Long-Term Target Operating Model Stratasys Ltd. Non-GAAP 14 1 Non-GAAP.
Slide 15: Stratasys Market Opportunity
Stratasys Market Opportunity 15 Source: Wohlers Associates, Inc. $3.1B 2013 - Actual Estimated Global Market for Additive Manufacturing Products and Services $12.5B 2018 2020 $21.0B
Slide 16: Stratasys Strategic Imperatives
Stratasys Strategic Imperatives 16 Lead in Prototyping Introduce Niche Vertical Applications Expand the Direct Digital Manufacturing (DDM) Business Accelerate New Solutions to the Market Improve 3D Printing Accessibility Improve Customer Intimacy
Slide 17: Solid Concepts & Harvest Technologies Update
Stratasys Solid Concepts & Harvest Technologies Update 17 Integration will occur over approximately 18 months Phase 1: Sales, marketing, and business development into one unified group Phase 2: Create single, unified company with one brand and cohesive, fullyintegrated operation Transactions are exp
Slide 18: Solid Concepts & Harvest Technologies Update
Stratasys Solid Concepts & Harvest Technologies Update 18 Operate as a Growing, Profitable Business Unit Within SSYS Cross Selling Synergies Establish a Fulfillment Platform for Expanding EUP Strategy Parts Sell 3D Printers 3D Printers Sell Parts
Slide 19: Disrupting Enterprise Processes: Direct Digital Manufacturing
Disrupting Enterprise Processes: Direct Digital Manufacturing 19 Stratasys products and solutions disrupt business processes Additive manufacturing eliminates the restrictions that subtractive methods impose Additive Manufacturing significantly disrupts the economic formulas associated with Mass Pro
Slide 20: Solutions and Applications: Augmented Manufacturing
Solutions and Applications: Augmented Manufacturing 20 Sheet Metal Forming Injection Molding Assembly Guides Production Line Jigs Inspection Jigs Stratasys Augmented Manufacturing Solutions Provide Clear ROI: Approximately 80% of Fortus system owners produce molds, patterns, jigs and fixtures Custom
Slide 21: Solutions and Applications: Prototyping
Solutions and Applications: Prototyping 21 Objet500 Connex3 Color Multi-material 3D Printer Positive Customer Feedback Strong Demand Unmatched ability to combine color and multiple-materials in a single build Expanded color and material range
Slide 22: Solutions and Applications: Dental
Solutions and Applications: Dental 22 The Stratasys Dental Advisory Board will pursue the following objectives: Support research and development of Stratasys dental technologies and materials Promote education and development for digital dental and orthodontic lab professionals Forge relationships w
Slide 23: Solutions and Applications: Education
Solutions and Applications: Education 23 Second Quarter Education Highlights: Major U.S. school district: Eight uPrint Plus systems to equip local high schools Public university biomedical department: Connex 350, Fortus 400mc and Fortus 250mc to add to lab that already has six Mojos, a Fortus 250mc,
Slide 24: MakerBot Update: New Products
MakerBot Update: New Products 24 MAKERBOT REPLICATOR Z18 MAKERBOT REPLICATOR MINI MAKERBOT REPLICATOR FIFTH GENERATION MAKERBOT REPLICATOR 3D PRINTERS FIFTH GENERATION
Slide 25: MakerBot Update: Additions to 3D Printing Ecosystem
MakerBot Update: Additions to 3D Printing Ecosystem 25 MakerBot PrintShop Easy-to-use iPad app with intuitive interface for creating custom 3D prints MakerBot Developer Program Tools and resources for developers to integrate with the expanding MakerBot 3D Ecosystem MakerBot Digital Store Content Con
Slide 26: MakerBot Update: Distribution and Channel
MakerBot Update: Distribution and Channel 26 Home Depot MakerBot 5th Generation 3D Printers pilot test in several stores TechData Master distributor for North America Anatek MakerBot’s first reseller in Central America Stratasys Japan Distributor for MakerBot products in Asia MakerBot Europe Result
Slide 27: Stratasys: Investing in Organizational Structure
Stratasys: Investing in Organizational Structure 27 Investments in innovation New products and channel development Scalable corporate infrastructure Positioning to lead the market
Slide 28: Summary & Outlook
Record Q2 results as market demand remains strong Continue to observe strong demand for higher-performance systems and materials, as well as impressive contribution from MakerBot products Successfully closed acquisitions to create comprehensive parts services offering for customers and drive increme
Slide 29: We are Stratasys
XX March 2013 We are Stratasys We shape lives by revolutionizing the way things are made We are innovation We are fearless leaders We are customer driven Our quality matters Our people make the difference
Slide 30: Reconciliation of GAAP to Non-GAAP Results of Operations
30 Reconciliation of GAAP to Non-GAAP Results of Operations Stratasys Ltd. Combined ($ in thousands except per share data) Q2-13 Q2-13 Q2-14 Q2-14 GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP Net sales Products 90,213 $ 199 $ 90,412 $ 154,090 $ - $ 154,090 $ Services 16,272 - 16,272 24,375 -
Slide 31: Reconciliation of Non-GAAP Adjustments
31 Reconciliation of Non-GAAP Adjustments Stratasys Ltd. Combined Q2-13 Q2-14 Net sales, products Deferred revenue purchase price 199 $ - $ Cost of sales, products Acquired intangible assets amortization (11,780) (14,029) Non-cash stock-based compensation expense (314) (710) Merger related expense (