Slide 1: Q3 2022 Results
Q3 2022 Results Speakers Dr. Yoav Zeif, CEO Eitan Zamir, CFO Yonah Lloyd, CCO & VP IR Nov. 10, 2022
Slide 2: Conference Call and Webcast Details
Conference Call and Webcast Details US Toll - Free Dial - In 1 - 877 - 407 - 0629 International Dial - In 1 - 412 - 902 - 1012 Live Webcast and Replay https://event.choruscall.com/mediaframe/webcast.htm l?webcastid=Aau6uFJK 2 2
Slide 3: Forward-Looking Statements
Forw a rd - Looking Statements Cautionary Statement Regarding Forward - Looking Statements The statements in this slide presentation regarding Stratasys' strategy, and the statements regarding its projected future financial performance, including the financial guidance concerning its expected result
Slide 4: Use of Non-GAAP Financial Information
Use of Non - GAAP Financial Information Use of Non - GAAP Financial Measures The non - GAAP data included herein, which excludes certain items as described below, are non - GAAP financial measures. Our management believes that these non - GAAP financial measures are useful information for investors
Slide 5: Welcome Dr. Yoav Zeif, CEO
W elcome Dr. Yoav Zeif CEO ▪ Delivered highest third quarter revenue in seven years and fifth consecutive quarter of positive earnings ▪ We expect to generate sustained operating profitability ▪ Challenges facing target industries justify accelerating the shift to additive: ▪ Adapt to logistical bot
Slide 6: Managing Through the Current Macro Environment
Managing Through the Current Macro Environment ▪ Uncertain economy is affecting purchase behavior - Sales cycles are longer with some order deferrals ▪ Broad set of offerings for entire product value chain is helping mitigate these impacts ▪ Steady organic contributions and incremental revenues from
Slide 7: Our Business is in Growth Mode
Our Business is in Growth Mode ▪ OEM revenue up 10% y/y, on constant currency basis ▪ Total revenue up 7.8%* y/y ▪ 18.9%* y/y OEM systems revenue growth, highest Q3 in 6 years ▪ New technologies SAF, P3 and Neo more than double our addressable market ▪ New use cases and opportunities to replace trad
Slide 8: Stratasys agrees to acquire Covestro's AM materials business
Stratasys agrees to acquire Covestro’s AM materials business ▪ Global R&D, development and sales teams ▪ Portfolio of 60 materials ▪ Hundreds of patents and patents pending Building Leading Polymer Materials Portfolio for Manufacturing 13 Validated FDM materials and OpenAM now available ▪ Filaments
Slide 9: New Validated industrial materials for Origin One 3D printer
New Validated industrial materials for Origin One 3D printer ▪ P3 Stretch 475 from Henkel Loctite – soft elastomer for applications such as automotive door seals ▪ P3 Deflect 120 from Evonik – High strength at high temperatures, ideal for molds FDA 510(k) clearance for revolutionary resin for J5 Den
Slide 10: Investments in Artificial Intelligence – Available in 2023
Investments in Artificial Intelligence – Available in 2023 $10 million strategic investment ▪ Axial3D’s AI - powered algorithms shave hours off time to prepare scans for 3D printing models ▪ Stratasys and Axial3D preparing joint offering to make models more accessible to hospitals and medical device
Slide 11: CFO Remarks
▪ Solid results in a challenging environment ▪ OEM business growth of ~10% vs. Q3 2021 (constant FX) ▪ Efficiency helping improve OpEx as percentage of revenue Eitan Zamir CFO CFO Remarks 11
Slide 12: Resilient Financial Results
Resilient Financial Results GAAP Non - GAAP Q 3 - 21 Q3 - 22 Change Y/Y Q3 - 21 Q3 - 22 Change Y/Y Total Revenue 159.0 162.2 2.0% 159.0 162.2 2.0% Gross Profit 68.2 70.7 2.5 76.7 78.7 2.0 ▪ % Margin 42.9% 43.6% 0.7% 48.2% 48.5% 0.3% Operating Income (Loss) (21.9) (15.6) 6.3 1.8 4.5 2.7 ▪ % Margin -
Slide 13: Revenue Growth Continues
Revenue Growth Continues Q3' 21 Q4' 21 Q1' 22 * Reflects only 2 months of MakerBot revenue. Quarterly Trend Revenue Growth – Q3’22 108.9 1 18.0 1 13.1 1 15.7 1 12.1 50.1 49.0 50.3 50.9 50.1 159.0 167.0 163.4 166.6 162.2* Q2' 22 Q3' 22 Product Service Revenue Y/Y Vs. Q3 2019 Product 3.0% 5.4% ▪ Syste
Slide 14: Increasing Gross Margins
Increasing Gross Margins 14 GAAP Non - GAAP GAAP and Non - GAAP margin improvements driven by operational efficiencies and MakerBot divestment, despite FX deterioration 42.9 % 43 . 7% 40 . 5% 43.6 % 49 . 7% 49 . 6% 47 . 5% 42 . 6% Product Gross Margin 50 . 1% 47.2% 28 . 2% 29 . 6% 31 . 7% 25 . 2% 29
Slide 15: Operating Expenses Reduction Reflecting Scalability
Operating Expenses Reduction Reflecting Scalability GAAP operating expenses (absolute and as a percentage of revenues) Non - GAAP operating expenses (absolute and as a percentage of revenues) Operating Expenses improvement trend ongoing 90.1 86.4 Q3'21 Q3 ' 22 53.3% - 3.4% 56.7% 74 . 9 74 . 2 Q3 ' 2
Slide 16: Profitable Results
Profitable Results GAAP operating loss Non - GAAP operating income Improving operating income and net income reflect business scalability and operational efficiencies, resulting in gross margin growth and lower operating expenses (21.9) (15.6) Q3 ' 21 Q3 ' 22 1.8 4.5 Q3 ' 21 Q3 ' 22 GAAP net loss No
Slide 17: Fortified Balance Sheet and Responsible Cash Use
Fortified Balance Sheet and Responsible Cash Use Strong balance sheet at $349M cash and equivalents after recent strategic investments Cash use tied to deliberately increased inventory purchases Balance sheet items Cash flow from operating activities 3.0 (18.4) Q3' 21 Q3' 22 Q3 - 21 Q2 - 22 Q3 - 22
Slide 18: Full Year 2022 Outlook Updated to Exclude MakerBot Divestiture
Full Year 2022 Outlook Updated to Exclude MakerBot Divestiture 18 *Adjusted for FX and divestitures ▪ $ 5 M - $ 10 M ▪ Improvement due primarily from divestitures and improved OpEx efficiencies OpEx Reduced Gross Margins Improving ▪ Flat to slightly higher than 2021 ▪ Targeting over 50% long - term
Slide 19: CEO Summary
▪ Today’s business challenges reinforce additive manufacturing’s benefits ▪ We continue to invest in hardware, materials and software to expand applications and drive additive manufacturing to scale ▪ Thank you to our global teams for rising to the challenge and helping drive continued profitability
Slide 20: Thank You
Thank You 20
Slide 21: Appendix
App e ndix Note: $ in thousands unless noted otherwise. All numbers and percentages rounded Three months ended September 30, 2022 Three months ended September 30, 2021 GAAP Adjustments Non - GAAP GAAP Adjustments Non - GAAP Gross Profit (1) $70,749 $7,990 $78,739 $68,188 $8,507 $76,695 Operating inc