Stratasys Reports First Quarter Financial Results

Company generates 54% total non-GAAP revenue growth and 33% organic non-GAAP revenue growth in the first quarter over the first quarter of last year

Non-GAAP gross margin expands to 61% for the first quarter driven by sales of higher-margin products and services

MakerBot contributes $20.6 million in non-GAAP revenue during the first quarter

MINNEAPOLIS & REHOVOT, Israel — (BUSINESS WIRE) — May 9, 2014 — Stratasys Ltd. (NASDAQ: SSYS) today announced first quarter financial results.

Total non-GAAP revenue grew by 54% in the first quarter, and 33% when excluding the revenue contribution from MakerBot products and services, over the same period last year. System and consumables revenue grew by 40% and 29%, respectively, when excluding the contribution from MakerBot products. MakerBot branded products and services contributed $20.6 million to first quarter revenue, a 79% increase over the revenue that MakerBot generated as an independent company during the first quarter of 2013.

Sales of the company’s higher-margin products and services drove a significant increase in non-GAAP gross margin for the first quarter, which expanded to a record 60.9% compared to 59.0% for the same period last year.

Operating margin expansion during 2014 within the company’s core business is expected to be offset by aggressive investments in new market and product development for MakerBot products.

Q1-2014 Financial Results Summary:

  • GAAP revenue for the first quarter of 2014 was $150.9 million. Non-GAAP revenue of $151.2 million for the first quarter of 2014 represents a 54% increase over the $98.2 million non-GAAP revenue for the same period last year.
  • GAAP net income for the first quarter was $4.1 million, or $0.08 per diluted share, compared to a loss of $15.5 million, or ($0.40) per basic share, for the same period last year.
  • First quarter per share calculations relative to last year were impacted by the issuance of approximately 5.2 million new ordinary shares in the September 2013 public offering which raised a net amount of approximately $463 million; and the approximately 3.9 million new ordinary shares issued in consideration for the acquisition of MakerBot in August of 2013.
  • Non-GAAP net income was $20.6 million for the first quarter, or $0.40 per diluted share, compared to non-GAAP net income of $17.6 million, or $0.43 per diluted share, reported for the same period last year.
  • Non-GAAP gross margins improved to 60.9% for the first quarter compared to non-GAAP gross margins of 59.0% in the same period last year; GAAP gross margins improved to 51.5% for the first quarter compared to gross margins of 38.4% in the same period last year.
  • Operating expenses expanded materially in the first quarter over last year driven by significant investments in sales and marketing programs to support new MakerBot product introductions, as well as from increased R&D investments to fund technology innovation and new product development.
  • The company invested a net amount of $15.3 million in R&D projects (non-GAAP basis) during the first quarter, representing 10% of non-GAAP net sales; R&D expense was $16.8 million on a GAAP basis.
  • The non-GAAP effective tax rate declined to 3.8% for the first quarter compared to the non-GAAP effective tax rate of 15.1% in the same period last year. The GAAP effective tax rate was 915.8% for the first quarter compared to 4.6% in the same period last year as a result of business combination tax accounting.
  • The company generated $4.9 million in cash from operations during the first quarter, and currently holds $607.5 million in cash and cash equivalents, and short term bank deposits, amounting to $12.3 per share.
  • Non GAAP EBITDA for the first quarter amounted to $26.0 million.
  • The company sold 8,802 3D printing and additive manufacturing systems during the quarter, and on a combined pro forma basis, a cumulative 84,620 systems worldwide as of March 31, 2014.

“The rapid adoption of our higher-margin products and services remained impressive during the first quarter, which helped drive strong organic revenue growth of 33% during the period and contributed to a significant increase in our gross margin over last year,” said David Reis, chief executive officer of Stratasys. “In addition, MakerBot products revenue remained strong, and we continued to invest aggressively in sales, marketing and product development initiatives that we believe will drive incremental growth over the coming periods. We are very pleased with our first quarter results and we remain on track to meet our financial projections for the year.”

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