3D Systems (DDD 2.88%) and Stratasys (SSYS 0.70%) recently released their second-quarter 2022 reports. So, investors can now compare the two 3D printing companies' results, metric by metric.
Keep in mind that qualitative factors can be just as important as quantitative ones, and this comparison looks at just one quarter's results. Even with these caveats, the data in this article should help you make better investing decisions in the 3D printing space.
Image source: Getty Images.
Revenue
| Company | Q2 2022 Result |
|---|---|
| 3D Systems | $140.0 million, down 14% from the year-ago period (and up 3.3% excluding the impact of divestitures, and up 7.8% excluding divestitures and in constant currency) |
| Stratasys | $166.6 million, up 13% from the year-ago period (and up 16% in constant currency) |
Data sources: Company earnings reports.
Advantage: Stratasys.
Stratasys is the clear winner here. For this comparison, it seems most fair to use the companies' constant currency results and use 3D Systems' result that excludes the impact of the noncore assets it's divested over the last year. In other words, 7.8% for 3D Systems and 16% for Stratasys.
Stratasys' revenue was its highest second-quarter revenue in four years.
In its earnings release, 3D Systems said revenue growth from solid demand for its products was "partially offset by continuing global supply chain disruptions and the Russia-Ukraine war, which has impacted demand in the European region and led to our exit from the Russian market."
GAAP earnings per share (EPS)
| Company | Q2 2022 Result |
|---|---|
| 3D Systems | ($0.26), down from ($0.08) in the year-ago period |
| Stratasys | ($0.37), down from ($0.31) in the year-ago period |
Data sources: Company earnings reports. GAAP = generally accepted accounting principles.
Advantage: N/A.
This category is included just for information purposes and isn't included in the scoring. GAAP results don't exclude one-time items, so they're often not reflective of a company's underlying operational performance.
Adjusted EPS
| Company | Q2 2022 Result |
|---|---|
| 3D Systems | ($0.07), down from $0.06 in the year-ago period |
| Stratasys | $0.02, up from ($0.02) in the year-ago period |
Data sources: Company earnings reports.
Advantage: Stratasys.
Stratasys easily wins this category, as its adjusted earnings flipped to positive in the second quarter from negative in the year-ago period. 3D Systems' adjusted earnings flipped to negative from positive.
Adjusted gross margin
| Company | Q2 2022 Result |
|---|---|
| 3D Systems | 38.1%, down from 41.4% in the year-ago period |
| Stratasys | 47.6%, about flat with 47.5% in the year-ago period |
Data sources: Company earnings reports.
Advantage: Stratasys.
3D Systems' year-over-year decline in its adjusted gross margin was primarily due to input cost inflation, supply chain disruptions, higher freight costs, and unfavorable product mix.
A higher gross margin relative to competitors with similar operations can reflect stronger pricing power.
Liquidity -- operating cash flow and net cash position
| Company | Q2 2022 Result |
|---|---|
| 3D Systems |
|
| Stratasys |
|
Data sources: Company earnings reports.
Advantage: Stratasys
These results are quite similar to the prior quarter's, so I'll reiterate part of my explanation from the first quarter's face-off article:
Both companies used cash running their operations during the quarter, so neither performed well with respect to operating cash flow. ....[W]hen we consider revenue along with this metric, Stratasys performed a bit better because it used less cash to generate every dollar of revenue than did 3D Systems. However, these ratios are close enough to call this part of this category a draw.
Stratasys wins the second part of this category because it has a higher net cash position (cash, cash equivalents, and short-term investments minus long-term debt).
Research and development spending
| Company | Q2 2022 Result |
|---|---|
| 3D Systems | $20.8 million, or 14.9% of revenue |
| Stratasys | $24.3 million, or 14.6% of revenue |
Data sources: Company earnings reports.
Advantage: Tie.
Both companies spent close to the same percentage of their revenue on research and development (R&D).
Investing in R&D is particularly important for technology-related companies, as technology often rapidly changes.
The winner is... Stratasys.
Score: Stratasys -- 4.5 points; 3D Systems -- 0.5 points. (Both companies got a half-point for the one tie.)
Keep in mind the previously stated limitations of this exercise: Qualitative factors can be just as important as quantitative ones, and this only explores a single quarter's results.
Click here if you'd like to read my 3D Systems' Q2 earnings article.
