Stratasys (NASDAQ:SSYS) reported second-quarter 2017 results on Wednesday. The 3D printing company's year-over-year revenue declined 1.2%, loss per share narrowed considerably, and adjusted earnings per share jumped 42% from the year-ago quarter.

Stratasys cruised by Wall Street's EPS expectation and also beat the revenue consensus. 

Earnings releases generally don't provide much information beyond the numbers, but a wealth of color about a company's performance and future prospects is usually shared during the quarterly analyst conference calls. Here are two key things you should know about from Stratasys' Q2 call. 

Close-up of a 3D printer printing an unidentifiable green plastic object.

Image source: Getty Images.

1. The new F123 continues to sell well

From CEO Ilan Levin's remarks:

[W]e are pleased with the positive market reception to our new F123 Series launched in February of 2017, which has resulted in orders of over 1,000 systems to date and is generating significant interest for rapid prototyping applications among professional users.

CFO Lilach Payorski also weighed in on this topic:

Within product revenue, system revenue for the quarter declined by 6% over last year driven by a shift in product mix, following the positive market reception of our lower cost high value F123 offering to the rapid prototyping professional market. 

It's an obvious positive that Stratasys' new F123 3D printer for the rapid-prototyping professional market is selling well. As was the case in the first quarter, the success of this offering was a major contributor to the change in Stratasys' product mix for the quarter relative to the year-ago quarter.

Investors should realize that the change in product mix is the primary driver for the decline in the company's year-over-year 3D printing system revenue and product gross margin. While we'd prefer not to see declines at all, this is a better main reason for decreases than declining average selling prices across existing products. The latter may also be occurring to some degree, but Stratasys' top management noted on the call that the changing mix is the main reason.

As for gross margins, product gross margin decreased to 59.9% from 63.5% in the year-ago period, driven by the shift in product mix. Positively, however, this metric increased sequentially, as it was 57.9% in the first quarter. Payorski said that while the company had "very good traction of F123" -- which exerted downward pressure on the product margin -- in the second quarter, it also experienced an increase in sales of high-end products, which was favorable to the gross margin.

Levin noted that the orders for multiple F123s are typically coming from existing customers, while the single orders are typically coming from new customers. The opportunity for the company here is selling those new customers higher-end fused deposition modeling (FDM) 3D printers for applications such as production of tooling and end-use parts.

2. Notable initiatives and partnerships were launched involving aerospace production applications 

From Levin's remarks: 

We believe that our continued partnering with industry-leading companies will accelerate the development of high-value added applications and allow us to bring increased value to the market.

We are pleased with the market reaction to our production-focused products and services, demonstrated in part by the multiple announcements we recently made at, and following the Paris Airshow.

In the quarter, Stratasys made several notable announcements involving its aerospace vertical. It launched the Fortus 900mc Aircraft Interiors Certification Solution for producing certifiable aircraft interior parts. This solution leverages a qualification program under way with the FAA, National Institute of Aviation Research, and America Makes. The new offering is meant to remove "major obstacles around FAA certification and [make] it easier to manufacture airworthy parts, with improved repeatability and performance," according to Levin.

The company also announced that Western Tool & Mold, a leading Hong Kong-based parts supplier, was adopting this solution for the production of certifiable aircraft interior components. 

Stratasys also announced that Airbus chose its on-demand 3D printing service to produce 3D printed polymer parts for use on the A350 XWB aircraft.

Lastly, the company announced that Boom Supersonic and Eviation Aircraft are using Stratasys' 3D printing solutions to reduce engineering costs and accelerate design cycles for their next-generation aircraft. The Boom partnership's goal is heady: "to bring the commercial airline industry one step closer toward routine supersonic travel." 

While Stratasys' quarterly results were a mixed bag, the company is having good success partnering with leading companies across industries, which it believes will pay off over the long run. In addition to the above discussed initiatives and partners, it's partnering with Ford, Boeing, and Siemens on its next-generation 3D printing technologies Infinite Build and Robotic Composite.  

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