Stratasys (SSYS -1.53%) reported first-quarter 2019 results before the market opened on Thursday.

It was the first of the two leading 3D printing companies to report, with rival 3D Systems scheduled to release its results after the market closes on Tuesday, May 7. 

Stratasys' quarterly revenue edged up 1% year over year, GAAP net loss narrowed considerably, and earnings per share (EPS) adjusted for one-time items doubled. 

Shares gained 3.8% on Thursday, which we can attribute to both revenue and adjusted EPS coming in better than many investors were probably expecting.

Stratasys' results: The raw numbers


Q1 2019

Q1 2018

Year-Over-Year Change


$155.3 million

$153.8 million


GAAP operating income

($3.3 million)

($6.5 million)


Adjusted operating income

$6.8 million

$4.9 million


GAAP net income

($2.3 million)

($13.0 million)


Adjusted net income

$5.7 million

$2.7 million


GAAP earnings per share (EPS)




Adjusted EPS


$0.05 100%

 GAAP = generally accepted accounting principles. Data source: Stratasys.

Underlying revenue growth wasn't as weak as suggested by the reported growth of 1% year over year. "After adjusting for the sales of our divested entities during 2018, on a like-for-like basis, total revenue was up 3% for the first quarter and 5% after also adjusting for foreign currency exchange rate changes," CFO Lilach Payorski said on the earnings call. 

GAAP gross margin was 49.2%, unchanged from the year-ago period. Adjusted gross margin came in at 52%, down from 52.8% in the year-ago period and also down slightly from 52.2% in the fourth quarter of 2018

Stratasys generated $4.6 million in cash from operations during the quarter and ended the period with $367.8 million in cash and cash equivalents.

For some context (though investors shouldn't give too much importance to Wall Street's near-term estimates), analysts were looking for adjusted EPS of $0.06 on revenue of $152.8 million. So, Stratasys comfortably beat both expectations. 

Close-up of a 3D printer printing a white plastic object.

Image source: Getty Images.

Segment results 


Q1 2019 Revenue

Year-Over-Year Change


$105.1 million



$50.2 million



$155.3 million


Data source: Stratasys. 

Within products, 3D printer revenue grew 1% year over year and consumables (print materials) revenue also increased 1%. Within services, customer support revenue, which mainly includes revenue from service contracts, rose 1%. (Stratasys provides whole-number percentages only.)

Excluding divested entities, product revenue rose 4% year over year, while revenue from sales of 3D printers and consumables grew 4% and 3%, respectively. 

While 3D printer year-over-year revenue growth of 1% is tepid, it's still encouraging. In the fourth, third, second, and first quarters of 2018, this metric declined 7%, was flat, declined 8.2%, and declined 21%, respectively. 3D printer sales are much more important to the company's bottom line than some investors might realize. That's because sales of 3D printers drive sales of the high-profit-margin print materials and service contracts. 

What management had to say

Here's what chairman of the board and interim CEO Elan Jaglom had to say in the earnings release about the quarter:

We are pleased with our first quarter top-line results, and are particularly encouraged by the continuation of the strong performance we have seen in North America over the last several quarters, demonstrating steady adoption of our systems and materials in our largest market. We are also pleased with our non-GAAP profitability in the first quarter, demonstrating our continued commitment to controlling expenses and delivering shareholder value. Our recent new product introductions are generating significant interest from our customers and expanding our addressable markets, and we look forward to additional announcements as we move through 2019 and into 2020.

On the earnings call, Jaglom addressed the CEO search:

Our search for a new CEO is moving ahead and we continue our dialogue with candidates to drive our strategy and vision forward. While we had hoped to finalize the process by now, we're happy to have a strong, experienced oversight committee reporting to me that has done an excellent job advising our team during the interim period. We believe that the diligence and careful consideration we are taking during this search process will well reward us once we make a decision...

Stratasys has been without a permanent CEO since last June, when Ilan Levin resigned after serving nearly two years in that position.

Looking ahead

Stratasys' reported revenue growth of 1% in the quarter represents an improvement from 2018's nearly 1% revenue contraction, but it's still weak growth. Management does, however, expect revenue growth to accelerate in 2020, driven by sales of products being launched this year.

On the positive side, the company continues to do a solid job of controlling expenses, which enabled it to notably improve key profitability metrics (GAAP and adjusted operating income, net income, and EPS). 

Management reiterated full-year 2019 guidance as follows:

  • Revenue of $670 million to $700 million, representing growth of 1% to 5.5% year over year. 
  • GAAP net loss of $0.40 to $0.22 per share, representing the loss widening 82% to no change from 2018. 
  • Adjusted EPS of $0.55 to $0.70 per share, representing growth of about 6% to 35%.