3D Systems Corporation · NYSE:DDD
3D Systems — Q2 2018 Earnings Presentation
28 slides from 3D Systems's earnings presentation, Aug 7, 2018
Slide 1: Second Quarter 2018
Second Quarter 2018 August 7, 2018
Slide 2: Welcome and Participants
Welcome and Participants ⦁ Vyomesh Joshi ⦁ President & Chief Executive Officer To participate via phone, please dial: ⦁ John McMullen In the US: ⦁ Executive Vice President & Chief Financial Officer 1-877-407-8291 ⦁ Patrick Rogers ⦁ Assistant General Counsel Outside the US: 1-201-689-8345 ⦁ Stacey Wi
Slide 3: Forward Looking Statements
Forward Looking Statements This presentation contains certain statements that are not statements of historical or current facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, o
Slide 4: Vyomesh Joshi (VJ)
Vyomesh Joshi (VJ) President & Chief Executive Officer
Slide 5: Execution and Progress
Execution and Progress • We believe we are turning the corner in the transformation of the company and are seeing early returns on our investments • We have made significant progress to drive growth and improve execution worldwide • We improved Net Promoter Score (NPS) another 10 points, increased c
Slide 6: New Product Update
New Product Update • In Q2, we began shipping the FabPro 1000, industrial desktop printer and the ProX SLS 6100 with the widest range of materials • In Q2, we also began shipping the MJP 2500 IC, designed for investment casting and foundry applications, within the U.S. with plans for global roll out
Slide 7: Second Quarter Results Overview
Second Quarter Results Overview In the second quarter of 2018: • Revenue increased 11% to $176.6 million • Strong growth printer revenue growth of 41% on 37% unit growth • Growth in printers revenue and units, materials, on demand manufacturing and healthcare solutions • GAAP gross profit margin of
Slide 8: John McMullen
John McMullen Executive Vice President & Chief Financial Officer
Slide 9: GAAP Operating Results
GAAP Operating Results Second Quarter Six Months Ended (in millions, except per share amounts) 2018 2017 Y/Y Change 2018 2017 Y/Y Change Revenue $ 176.6 $ 159.5 11% $ 342.4 $ 315.9 8% Gross Profit 86.2 80.7 7% $ 164.0 $ 160.9 2% Gross Profit Margin 48.8% 50.6% (179) bps 47.9% 50.9% (302) bps SG&A 71
Slide 10: Non-GAAP Financial Measures
Non-GAAP Financial Measures Second Quarter Six Months Ended (in millions, except per share amounts) 2018 2017 Y/Y Change 2018 2017 Y/Y Change Non-GAAP R&D Expense $ 22.5 $ 24.4 (8)% $ 48.4 $ 47.3 2% Non-GAAP SG&A Expense 56.5 46.4 22% 110.1 95.9 15% Non-GAAP Operating Expenses $ 79.0 $ 70.8 12% $ 15
Slide 11: Revenue Drivers
Revenue Drivers Q2 2018 compared to Q2 2017: Printers revenue increased 41% to $39.2 million Materials revenue increased 3% to $45.0 million Healthcare solutions increased 26% to $61.4 million On demand manufacturing increased 6% to $27.4 million Software was approximately flat at $24.1 million 11
Slide 12: Gross Profit and Margin
Gross Profit and Margin • GAAP GPM was 48.8% and non-GAAP GPM was 48.9% in Q2 2018 • We continue to drive supply chain optimization, manufacturing efficiencies and process improvements 12
Slide 13: Operating Expenses
Operating Expenses • Compared to second quarter last year, GAAP operating expenses increased 7% and non-GAAP operating expenses increased 12% • SG&A expenses increased from investments in go-to-market and IT infrastructure and higher legal expenses • R&D expenses decreased as we began to launch our
Slide 14: Vyomesh Joshi (VJ)
Vyomesh Joshi (VJ) President & Chief Executive Officer
Slide 15: Redefining Manufacturing
Redefining Manufacturing • Partnership with Georg Fischer machining solutions, one of the world's leading providers in precision machining. • Immediately expands our global network and market opportunity • We are excited to be working with a partner of the caliber of GF Machining Solutions to redefi
Slide 16: Conclusion
Conclusion • We are pleased with our results this quarter and the progress we have made to transform the company and improve execution to leverage our unmatched offering of additive solutions for the entire digital manufacturing workflow. • We are very excited about our enhanced and complete end-to-
Slide 17: Q&A Session
Q&A Session In the USA: 1-877-407-8291 Outside the USA: 1-201-689-8345
Slide 18: Thank You
ZN 3D SYSTEMS Thank You
Slide 19: Appendix
ZN 3D SYSTEMS Appendix
Slide 20: Revenue Summary by Category
Revenue Summary by Category Second Quarter 2018 Comparative Analysis Sequential (in millions) Q2 2018 Q1 2018 Q2 2017 Change YOY Change Printers $ 39.2 $ 39.1 $ 27.7 —% 41% Software Products 12.9 12.3 12.8 5% 1% Other Products 13.7 11.2 13.2 22% 4% Total Products 65.7 62.6 53.7 5% 22% Total Material
Slide 21: Non-GAAP Reconciliation
Non-GAAP Reconciliation Second Quarter Non-GAAP Earnings (Loss) per Share Quarter Ended June 30, Six Months Ended June 30, (in millions, except per share amounts) 2018 2017 2018 2017 GAAP Net loss attributable to 3D Systems Corporation $ (8.9) $ (8.4) $ (29.8) $ (18.4) Adjustments: Amortization, sto
Slide 22: Non-GAAP Reconciliation
Non-GAAP Reconciliation Second Quarter Non-GAAP Gross Profit & Margin Second Quarter Six Months Ended (in millions) 2018 2017 2018 2017 GAAP Gross Profit $ 86.2 $ 80.7 $ 164.0 $ 160.9 GAAP Gross Profit Margin 48.8% 50.6% 47.9% 50.9% Adjustments: Amortization, stock-based compensation & other $ 0.1 $
Slide 23: Non-GAAP Reconciliation
Non-GAAP Reconciliation Second Quarter Non-GAAP Operating Expenses Second Quarter Six Months Ended (in millions) 2018 2017 2018 2017 GAAP R&D Expenses $ 22.7 $ 24.4 $ 48.6 $ 47.3 GAAP SG&A Expenses 71.2 63.1 140.6 129.5 GAAP Operating Expenses $ 93.9 $ 87.5 $ 189.2 $ 176.8 Adjustments to R&D Expense
Slide 24: Non-GAAP Reconciliation
Non-GAAP Reconciliation First Quarter Non-GAAP Gross Profit and Margin First Quarter (in millions) 2018 2017 GAAP Gross Profit $ 77.9 $ 80.2 GAAP Gross Profit Margin 46.9% 51.3% Adjustments: Amortization, stock-based compensation & other 0.1 0.1 Cost optimization plan 0.2 — Non-GAAP Gross Profit $ 7
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation First Quarter Non-GAAP Operating Expenses First Quarter (in millions) 2018 2017 GAAP R&D Expenses $ 25.9 $ 22.9 GAAP SG&A Expenses 69.5 66.4 GAAP Operating Expenses 95.4 89.3 Adjustments to R&D Expenses: Cost optimization plan 1 — — Non-GAAP R&D Expenses 25.9 22.9 Adjustments
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation Full Year 2017 Non-GAAP Gross Profit & Margin 2017 Quarter Ended Year Ended (in millions) March 31 June 30 September 30 December 31 December 31 GAAP Gross Profit $ 80.2 $ 80.7 $ 58.5 $ 85.5 $ 304.8 GAAP Gross Profit Margin 51.3% 50.6% 38.3% 48.2% 47.2% Adjustments: Amortizati
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation Full Year 2017 Non-GAAP Operating Expenses 2017 Quarter Ended Year Ended (in millions) March 31 June 30 September 30 December 31 December 31 GAAP R&D Expenses $ 22.9 $ 24.4 $ 24.4 $ 23.0 $ 94.6 GAAP SG&A Expenses 66.4 63.1 66.5 68.2 264.2 GAAP Operating Expenses 89.3 87.5 90.
Slide 28: Thank You
ZN 3D SYSTEMS Thank You