Stratasys distances itself from 3D printing pack

Stratasys' sees strong demand for the rest of the year as additive manufacturing takes hold. Meanwhile, the company's MakerBot unit continues to roll.
Written by Larry Dignan, Contributor

Stratasys' second quarter earnings and outlook for the second half of 2014 highlights how the 3D printer maker is starting to distance itself from the pack---and put more pressure on Hewlett-Packard assuming it enters the market this year.

The company reported a second quarter net loss of $173,000, or break even on a per share basis, on revenue of $178.5 million, up 67 percent from a year ago. Non-GAAP earnings for the second quarter was 55 cents a share.

Wall Street was looking for second quarter earnings of 44 cents a share on revenue of $156.97 million.

Also: 3D printing's great mystery: Where's HP? | Research: 60 percent of enterprises are using or evaluating 3D printing | Stratasys acquires two additive manufacturing companies 

As for the outlook, Stratasys raised its 2014 guidance to account for the recent acquisitions of Solid Concepts and Harvest Technologies, but the revenue projections also highlight strong demand. The company said it expects organic revenue growth of at least 30 percent, up from the 25 percent the company had expected.

Stratasys expects 2014 revenue to be $750 million to $770 million, up from a previous outlook of $660 million to $680 million. Non-GAAP earnings are expected to be $2.25 a share to $2.35 a share.



As for the consumer/hobbyist and enterprise split, the latter category carries the revenue for Stratasys. MakerBot contributed $33.6 million in second quarter revenue due to new products and channel expansion. The rest of Stratasys' revenue derived from higher end systems.

Stratasys said it shipped 14,909 3D printers and additive manufacturing systems in the quarter. A year ago, Stratasys shipped 1,261 systems. The gains are largely attributed to MakerBot.

The big takeaway from Stratasys' quarter is that it is distancing itself from the competition. For instance, 3D Systems recently disappointed analysts with its most recent quarter.

On a conference call with analysts, Stratasys CEO David Reis said:

As we begin the second half of 2014, we expect our positive momentum to continue. In addition, we continue to position Stratasys for long term growth, through improvements in our organizational structure; as well as additional investments in channel and product development. We will also look for additional strategic acquisitions.

Translation: Stratasys will continue to scale.

Among other items on the call:

  • Stratasys said it sees ongoing strong demand for its high-end systems. Manufacturing is leading the charge.
  • The company is leading in direct digital manufacturing.
  • Augmented manufacturing applications--including the production of molds, patterns, jigs and fixtures used throughout the manufacturing and product assembly process---are driving utilization rates.
  • Dental is also seen as a key vertical for Stratasys.

On the geographical sales front, Stratasys derives 53 percent of its sales from North America. Asia Pacific is 21 percent of sales, but when you consider that most of the global manufacturing is in Asia it's clear Stratasys has a lot of runway.

As I noted in our Monday Morning Opener, HP doesn't have a lot of time to meander into the 3D printing market. Why? Stratasys and other players may become large enough to offset HP's scale. In addition, Stratasys has the enterprise and consumer markets covered and that reality poses a big threat to HP.

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