Stratasys Q4 strong, aims to take MakerBot, 3D printing mainstream

Stratasys is hoping that MakerBot desktop systems will ultimately lead to a halo effect for its industrial strength products for manufacturing.
Written by Larry Dignan, Contributor

Stratasys CEO David Reis said expanding distribution for its MakerBot 3D printers, along with the launch of a consumer unit, will help make 3D printing more mainstream.

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Speaking on an earnings conference call, Reis said a distribution deal with Dell, moves to build out apps and an ecosystem and the launch of educational products can bolster 3D printing adoption. The big goal for the company is to introduce 3D printing to consumers, prosumers and small businesses and then have them trade up to the company's industrial-strength Fortus systems for manufacturing.

Reis said:

Those who believe that enhancing the user experience and providing a full 3D printing solution for users of the desktop product will drive future sales of our higher-priced systems.

Stratasys' revenue largely comes from industrial systems, but MakerBot, acquired last year, has the potential to be the brand that a broader base of users comes to know via an app ecosystem, more affordable printers and outlets like Thingiverse, an online community and 3D printing hub. MakerBot landed at Stratasys via the Objet acquisition. Stratasys is integrating Objet and the two companies are consolidating research and development efforts.

In the fourth quarter, Stratasys reported a net loss of $2 million, or 4 cents a share, on revenue of $155.1 million. Non-GAAP earnings for the quarter were 50 cents a share.

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Wall Street was expecting earnings of 49 cents a share on revenue of $151 million in the fourth quarter.

Stratasys, like other 3D printing players, is plowing money into research and development, acquisitions and efforts to scale to bulk up before an inevitable battle with Hewlett-Packard. In the fourth quarter, Stratasys spent 9.9 percent of revenue on research and development.

Overall, Stratasys sold 10,963 3D printing and manufacturing systems in the fourth quarter and 75,818 for 2013. For the year ending Dec. 31, Stratasys reported a net loss of $26.9 million, or 68 cents a share, on revenue of $484.4 million.

As for the outlook, Stratasys projected non-GAAP 2014 earnings of $2.15 a share to $2.25 a share on revenue of $660 million to $680 million. Stratasys said it expected to grow organic sales, excluding MakerBot, by at least 25 percent.

With that set-up, MakerBot becomes the wild card for Stratasys. MakerBot systems, which are priced lower than the high-end additive manufacturing printers, are more seasonal. It's also unclear how a consumer desktop 3D printer will fare in the market.

In the end, Stratasys is hoping that there will be a halo effect between MakerBot, which would sit in design units at enterprises, and its Fortus systems, which would be found on a manufacturing floor.

Reis said:

There are a lot of synergies between obviously the Stratasys product and the MakerBot product, are basically operating the same technology. So in the background -- we said it earlier, before and during the merger -- we are planning to align efforts in R&D to share IP and technology. On the other hand on the go-to-market I think they are very unique products.

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