Stratasys (NASDAQ:SSYS) reported weak first-quarter 2020 results before the market opened on Thursday, May 14. 

Shares dropped 7.4% on Thursday, which we can attribute to revenue and earnings both falling short of Wall Street's consensus estimates.

The 3D printing company was already struggling to grow revenue before the COVID-19 pandemic. As with many companies, including rival 3D Systems (NYSE:DDD), the crisis significantly hurt demand for its products and services in the latter part of the quarter. Many entities in its target verticals of automotive, aerospace, education, and, to a lesser extent, healthcare were shut down in March to help stem the spread of the virus.

In 2020, Stratasys stock is down 25.1%. For context, the S&P 500 (including dividends) and 3D Systems stock are in the red just over 11% and nearly 21%, respectively. 

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

Image source: Getty Images.

Stratasys' key numbers


Q1 2020

Q1 2019



$132.9 million

$155.3 million


GAAP operating income

($19.9 million)

($3.3 million)

N/A. Loss expanded 503%.

Adjusted operating income

($8.4 million)

$6.8 million

N/A. Result flipped to negative from positive.

GAAP net income

($21.7 million)

($2.3 million)

N/A. Loss expanded 843%.

Adjusted net income

($10.6 million)

$5.7 million

N/A. Result flipped to negative from positive.

GAAP earnings per share (EPS)



N/A. Loss expanded 900%

Adjusted EPS


$0.10 N/A. Result flipped to negative from positive.

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

Stratasys said the revenue decline was "primarily" due to the pandemic. For context, in the fourth quarter of 2019, its revenue fell 9.5% year over year. There was no negative impact from the crisis in that quarter's results. So, if "primarily" is an accurate word, than we can deduce that Stratasys' Q1 year-over-year performance excluding the effect from the pandemic improved sequentially.

For additional context, 3D Systems' first-quarter revenue fell 11.4% year over year.

Analysts were looking for an adjusted loss per share of $0.05 on revenue of $136.5 million. Stratasys missed on both counts, with the bottom line miss being a big one.

The company generated $11.3 million of cash from operations during the quarter and ended the period with $325.5 million in cash and cash equivalents. Its balance sheet remains free of debt.

GAAP gross margin was 45%, down from 49.2% in the year-ago period and also lower than the fourth quarter's 49.1%. Adjusted gross margin came in at 48.8%, down from 52% in the year-ago period and also lower than last quarter's 52.4%.

Stratasys attributed the gross margin decline to a shift in product and service mix away from hardware and consumables. It "strongly believes that gross margins will return to their recent levels as the economy recovers," according to the earnings release.

Segment results 


Q1 2020 Revenue

Change (YOY)


$83.2 million



$49.7 million



$132.9 million


Data source: Stratasys. YOY = year over year.

Within the product segment, 3D printer revenue plummeted 40% year over year and consumables (print materials) revenue fell 6%. 

What management had to say

Here's what CEO Yoav Zeif had to say on the earnings call:

... Stratasys was well positioned to mobilize what we believe is the largest additive manufacturing network in the world, in order to assist in the fight against COVID-19. We leveraged our application expertise, our channel and partner network and our corporatewide resources to help get a variety of printed parts to the global medical community.

We are well prepared to manage the downturn with a strong balance sheet and focus on cost control and cash generation. We have over $325 million in cash and equivalents and no debt. Our engagement level with our customers remains high and the demand for our systems is strong. It's clear that this crisis has helped generate significant awareness that 3D printing is becoming essential for accelerating and improving design, speeding up time to market and production, and creating less dependent and more resilient global supply chains, including localized digital inventory and distributed manufacturing.

2020 guidance withdrawn

As with many companies, Stratasys withdrew its full-year 2020 guidance due to the economic uncertainty caused by the COVID-19 crisis. 

For reference, its previously issued outlook was for revenue between $620 million and $680 million, compared with revenue of $636.1 million last year, and adjusted earnings per share of $0.45 to $0.60, compared with adjusted EPS of $0.56 in 2019.

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