Stratasys' Q4 Earnings Surpass Estimates, Revenues Fall Y/Y

Stratasys SSYS reported fourth-quarter 2024 non-GAAP earnings of 12 cents per share, which beat the Zacks Consensus Estimate by 9.09%. The company had posted non-GAAP earnings of 2 cents per share in the year-ago quarter.

The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and matched once, delivering an average surprise of 52.27%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Quarterly revenues fell 3.8% year over year to $150.4 million. The figure beat the consensus mark by 0.70%.

Stratasys’ Q4 Release in Detail

Segment-wise, Product revenues declined 4.8% from the year-ago quarter’s figure to $105 million. Within Product revenues, System revenues declined 1.5% year over year to $46.7 million. This was driven by the impact on customer buying behaviors for new systems due to constrained capital budgets. Consumables revenues decreased 7.3% year over year to $58.4 million.

Revenues from Services declined 1.4% year over year to $45.3 million. Within Service revenues, Customer Support revenues decreased 1% year over year to $30.6 million.

Stratasys’ non-GAAP gross profit fell 2.3% from the year-ago period’s levels to $74.6 million. 
The non-GAAP gross margin expanded 80 basis points (bps) to 49.6%.

The cost-savings initiatives Stratasys announced in the previous year took effect primarily in the fourth quarter of 2024, which is more indicative of the future impact of the initiatives on an annualized basis.

Stratasys’ Operating Details

Non-GAAP operating expenses dropped 12.2% year over year to $65.2 million, benefiting from the company’s cost-saving initiatives. Non-GAAP operating expenses were 43.4% of revenues for the reported quarter, down from 47.5% reported in the year-ago quarter. This was due to the cost-saving measures associated with the restructuring plan the company announced in the second half of 2024.

The non-GAAP operating profit was $9.4 million compared with $2 million in the year-ago quarter. The margin expanded 500 bps to 6.3%. Also, adjusted EBITDA advanced 88.3% to $14.5 million.

Stratasys’ Balance Sheet & Other Details

Stratasys exited the fourth quarter with cash and short-term deposits of $150.7 million compared with $143.95 million reported at the end of the previous quarter.

For the quarter ended December, the company reported an operating cash outflow of $7.4 million, a significant increase compared with $4.5 million recorded at the end of the previous quarter. This was due to an improvement in the company’s working capital. It resulted in positive free cash flow in the reported quarter.

Stratasys’ 2025 Outlook

For 2025, management expects revenues to be between $570 million and $585 million. Non-GAAP earnings per share are forecasted in the range of 28-35 cents. The company anticipates gross margins to be between 48.8% and 49.2%. The non-GAAP operating margin is expected to be in the range of 4-5%. 

Stratasys estimates 2025 operating expenses in the band of $254-$257 million. Adjusted EBITDA is anticipated in the range of $44-$50 million, reflecting Adjusted EBITDA margin
of 7.8% to 8.5%. 

It also expects to generate improved operating cash flow at higher levels than in 2024. The company’s balance sheet will be boosted by a $120 million investment in Stratasys by Fortissimo Capital, which is expected to close in the second quarter of 2025.

Zacks Rank and Stocks to Consider

Currently, SSYS carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader sector are Cadre Holdings, Inc. CDRE, ADT ADT and Applied Industrial Technologies AIT, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cadre Holdings is scheduled to report its fourth-quarter 2024 results on March 11. ADT and Applied Industrial Technologies are expected to report their respective first-quarter 2025 and third-quarter fiscal 2025 results soon.

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