Stratasys Q1 2025 slides: Profitability gains despite revenue headwinds

Stratasys Ltd (NASDAQ:SSYS) presented its Q1 2025 earnings results on May 8, 2025, highlighting improved profitability metrics despite ongoing revenue challenges. The 3D printing solutions provider reported significant bottom-line improvements while emphasizing strategic partnerships and new product launches aimed at high-growth markets.

Introduction & Market Context

Stratasys reported Q1 2025 revenue of $136.0 million, down from $144.1 million in the same period last year, continuing the trend of year-over-year revenue declines seen in previous quarters. Despite the top-line pressure, the company’s shares showed positive momentum in pre-market trading, up 5.25% to $10.23, suggesting investors are focusing on improved profitability metrics and the company’s strengthened financial position.

CEO Dr. Yoav Zeif characterized the quarter as establishing "a solid foundation" for 2025, highlighting the company’s "exceptional positioning" and "unwavering commitment to increasing profitability" as key themes throughout the presentation.

Quarterly Performance Highlights

Stratasys demonstrated meaningful progress in profitability metrics during Q1 2025, with Non-GAAP operating income reaching $3.0 million, compared to a loss of $1.2 million in Q1 2024. Non-GAAP net income similarly improved to $2.9 million from a loss of $1.7 million in the prior-year period. Adjusted EBITDA doubled to $8.2 million from $4.1 million year-over-year.

The company’s quarterly revenue trends and breakdown reveal the ongoing challenges in the top line, with systems revenue particularly under pressure, while consumables showed encouraging sequential growth of 7%.

As shown in the following chart of quarterly revenue and segment breakdown:

The improvement in profitability was driven largely by disciplined cost management, with Non-GAAP operating expenses reduced to $62.6 million (46.0% of revenue) compared to $71.2 million (49.5%) in Q1 2024. This reduction in operating expenses, combined with relatively stable gross margins, contributed significantly to the bottom-line improvements.

The company’s operating and earnings metrics demonstrate the financial progress:

Strategic Initiatives

Stratasys highlighted several strategic partnerships and product launches during the quarter, reinforcing its focus on high-growth end markets, particularly in aerospace and automotive sectors.

The company announced the launch of its Neo 800+ SLA Printer in collaboration with Rivian Automotive (NASDAQ:RIVN), and showcased its ongoing partnership with Boom Supersonic, which is using Stratasys’ FDM technology to produce over 350 end-use parts and 750 drill guides for its XB-1 supersonic aircraft.

These strategic customer relationships and technology applications are illustrated here:

In the materials segment, Stratasys launched two new Antero materials developed in collaboration with aerospace and defense industry leaders including Northrop Grumman (NYSE:NOC), Boeing (NYSE:BA), and BAE Systems (LON:BAES), as well as defense organizations like the US Navy and Air Force. The company also introduced PolyJet ToughONE, an advanced material that expands functional prototyping capabilities.

The following image highlights these materials innovations and key partnerships:

Forward-Looking Statements

Stratasys provided an optimistic outlook for 2025, raising its EPS guidance while maintaining revenue projections in line with previous forecasts. The company expects full-year revenue between $570 million and $585 million, with Non-GAAP gross margins of 48.8% to 49.2% and operating margins between 4.0% and 5.0%.

The adjusted EPS guidance was raised to $0.30-$0.37 (representing $24-$30 million in earnings), with adjusted EBITDA projected at $44-$50 million. The company also expects improved operating and free cash flow compared to 2024.

The full 2025 outlook is detailed in this comprehensive guidance chart:

CFO Eitan Zamir emphasized that Q1 "demonstrated continued resilience of operating model" with "significant OpEx savings and bottom-line profit," suggesting the company’s cost discipline will continue throughout 2025.

Financial Analysis

Stratasys significantly strengthened its balance sheet during the quarter, closing Fortissimo Capital’s $120 million strategic investment, which helped boost the company’s cash position to approximately $270 million with no debt. This substantial cash reserve provides Stratasys with considerable financial flexibility for potential strategic investments or acquisitions.

The year-over-year comparison of key financial metrics shows the company’s progress in improving profitability despite revenue challenges:

Gross margins remained relatively stable, with Q1 2025 Non-GAAP total gross margin at 44.3%, compared to 44.9% in Q1 2024. Product gross margins showed more resilience at 49.8% in Q1 2025 versus 51.1% in the prior-year period.

CEO Dr. Yoav Zeif summarized the quarter by emphasizing Stratasys’ "exceptionally well positioned" status in the industry, highlighting the company’s strong financial position, strategic focus, and commitment to increasing profitability as key drivers for future growth.

While revenue challenges persist, Stratasys’ Q1 2025 results demonstrate that the company’s strategy of focusing on operational efficiency and high-value market segments is yielding meaningful improvements in profitability metrics. With its strengthened balance sheet and strategic partnerships in aerospace and automotive sectors, the company appears well-positioned to navigate the current market environment while building foundations for future growth.

Full presentation:

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