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| Statement |
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| The full year improvement in non-GAAP gross margin was a result of better contribution from consumables and Stratasys Direct, along with lower shipping costs, which more than offset lower hardware contributions |
| Non-GAAP gross margin improved 20 basis points to 48.2% for the full year, as compared to 48% in 2022 |
| I am particularly pleased to report that we delivered another record quarter of consumables revenue, a testament to strong usage of our systems |
| We also achieved our 10th consecutive quarter of profitability on an adjusted basis, which reflects the discipline of our business model that differentiates us in our sector |
| We see improved pipeline, mainly for the second half |
| So, we believe that all those good signs would create the first steps of recovery, and then release the pent-up demand that is still there |
| But the most important thing that we are delivering there, we have real success on the ground with the government, with Navair and with the Air Force and with NASA, and we have all advisory committee that few advisory committee, I mean customer advisory committee that leading figures from the industry are contributing what is really needed for them |
| As the macro business environment continues to improve and capital spending patterns return to normal, we expect the pent-up demand to re-accelerate growth, particularly in our system sales |
| We delivered solid revenues in 2023 of $628 million, down 3.7% versus 2022, but up 1.3% after excluding the MakerBot divestiture and the two businesses we divested from our Stratasys Direct Service Bureau, showing remarkable resilience against a severely CapEx constrained environment for our customers |
| We improved our gross margin for the year, despite the modest change in revenues, reflecting our focus on cost controls and operating efficiencies, and we delivered $0.11 in adjusted EPS in 2023 |
| We are confident that as our Neo technologies ramp and our operational efficiencies continue, gross margins and profitability will strengthen in 2024 and beyond |
| We continue to maintain a healthy balance sheet that provides stability through challenging times, and optionality to support our growth through both organic investment and accretive acquisition opportunities |
| We expect to see this metric grow stronger as global business conditions improve, to a point where the majority of our business will come from end-part manufacturing at scale |
| It's nothing new here, and it's one of our top verticals because of our quality and experience there and really unique knowledge and solutions that we are bringing |
| So, despite the fact that it's a high cost, high price machine, we see better sales cycle, at least at the beginning |
| We see the engagement, because the customer, this customer advisory board that I mentioned, they wouldn't spend days with us if they wouldn't understand and that there are things that they can do with additive that they cannot do with anything else and it is creating competitive advantage for them |
| The F3300 doubled the speed of existing technology with greater reliability and operating efficiency, while being geared toward manufacturing at higher volumes |
| We worked closely with our customers for several years to deliver this Neo system and are proud that Toyota is our first customer |
| Pretty strong quarter, obviously a record number |
| Our F3300 pipeline is strong, with accelerating interest and engagement levels, and we look forward to sharing more customer wins |
| We are excited for what 2024 and beyond holds for strategies as we continue to lay the foundation for expanded applications to drive accelerated growth |
| We continue to differentiate ourselves from the sector with the strongest combination of best-in-class technologies and unparalleled go-to-market infrastructure and an ongoing focus on operating efficiencies |
| Our Neo line of Stereolithography printers had a strong finish to the year, including orders from Whirlpool and multiple service bureau in the U.S |
| I am particularly proud of our Israeli employees and their families, many of whom were called to military service for most of the fourth quarter, as well as our employees worldwide who stepped up valiantly to carry the additional workload |
| So, our business in Q3 and Q4 this year, so not like last year 2023, not in the future, actually proved that the business can generate positive operating cash flow when you exclude these one-offs |
| This is particularly promising and that it demonstrates our technology's ability to deliver accuracy, consistency and reliability at the highest level of automotive standards |
| We expect to see EBITDA reach 15% of our revenues longer term, as our margins improve over time |
| Dental continues to be one of the largest and most exciting growth avenues for the 3D printing industry, and for Stratasys in particular |
| I can say that now they are meeting all Stratasys standards and are aligned with the standard of FDM, which we are very proud of |
| We demonstrate financial, actually unique financial stability in terms of profitability, gross margin, no debt, cash flow, and we have a strategy with five growth engines of the new technologies, the new use cases, the consumable, the software and SDM is a driver into manufacturing |
| Statement |
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| I'd point out that you've also had eight consecutive quarters of negative cash flow from operations |
| Within product revenue, system revenue was down by 13.7% to $47.4 million compared to the same period last year, as constrained capital budgets continue to impact customer buying behavior for new systems |
| Product revenue in the fourth quarter declined by 0.7% to $110.4 million compared to the same period last year |
| It creates CapEx constraints with the largest companies in the world |
| Product revenue in 2023 decreased by 4.1% and was down by 1.1% excluding the MakerBot divestment |
| Adjusted EBITDA of $35 million, compared to $36.1 million in 2022 reflected our overall lower revenues that more than offset the improvement in margins |
| For the full year 2023, consolidated revenue was down by 3.7% as compared to 2022, but was up 1.3% when accounting for the impact of the MakerBot and Stratasys Direct Service Bureau divestitures |
| Our customers are currently challenged by micro-conditions that constrain their spending, slowing their pace of purchasing our product that can advance their transition to digital manufacturing at scale |
| Within product revenue, system revenue in 2023 decreased by 16.4% compared to 2022 |
| And our focus is denture, and we believe in this area, because we are disrupting the market |
| For the full year of 2023, service revenue declined by 2.8% compared to 2022, and was up 1.3% after backing out the two strategies direct divestitures |
| However, we view these challenges as only a delay in the inevitable widespread and faster adoption of additive manufacturing |
| We are disrupting the market in a way that creates significant value to each one of the stakeholders |
| But maybe to shift gears Eitan, how should we be thinking about Q1 seasonality? Just given Q4 was atypical, right, in terms of the seasonal weakness given the weak capital spending environment |
| For the full year, non-GAAP operating expenses were 46.2% of revenue, as compared to 45.9% in 2022, primarily due to lower revenue |
| The decline compared to 2022 is primarily due to a reduction in hardware sales that more than offset record consumables |
| We see flattening sales cycles |
| We achieved these results in what has continued to be a CapEx constrained environment for our customers and a challenging chapter for our industry |
| For the fourth quarter, consolidated revenue of $156.3 million was down 1.9% as compared to the same period last year, but was up 1.3% when adjusted for the divestitures of our metal and urethane businesses from the Stratasys Direct Service Bureau |
| Together with that, maybe you saw that or you'll see in the last two quarters, our inventory levels went down |
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