Stratasys Management Talks Plans to Launch a Metal 3D Printing Platform, Growth in 3D Printer Revenue, and More

A 3D printer printing a yellow plastic human mask or face.

Stratasys (NASDAQ: SSYS) reported fourth-quarter and full-year 2017 results last Wednesday. For the quarter, the 3D printing company's year-over-year revenue increased 2.3%, its loss per share narrowed, and earnings per share (EPS) adjusted for one-time factors rose to $0.16, from $0.15 in the year-ago quarter.

Stratasys beat Wall Street's expectations on both the top and bottom lines. Its 2018 earnings guidance, however, came in lower than what the Street anticipated because the company plans to increase its spending on initiatives aimed at fueling long-term growth. The market sent the stock plunging to a closing loss of 16.5% on Wednesday, though shares have fully recouped their losses as of Monday, and are now priced at nearly exactly what they were before the post-earnings drop.

Here are three key things you should know about from Stratasys' Q4 call. (Transcript via Seeking Alpha.)

1. 3D printer sales increase for the first time in a long time

From CFO Lilach Payorski's remarks:

A 1% year-over-year revenue growth rate from 3D printer sales is hardly the type of growth investors want to see. Moreover, the quarterly system revenue got a boost from some sales that were pushed back from the third quarter. Nonetheless, it's a promising sign, as this metric has been sliding for three years, with the same true of prime rival 3D Systems (NYSE: DDD) . For instance, Stratasys' year-over-year 3D printer revenue declined 11%, 6%, and 6% in the first, second, and third quarters of 2017, respectively, and it suffered double-digit drops in several quarters in the preceding two years.

The more important news is that CEO Ilan Levin said that the company anticipates that system revenue will "continue to grow." 3D printer sales have an outsize importance because they're the "razors" in Stratasys' razor-and-blade-like business model and drive sales of the high-margin print materials and service contracts, or "blades."

2. Stratasys plans to commercialize a metal 3D printing technology and platform

There was much talk on the call about the new metal 3D printing technology that Stratasys has developed and plans to commercialize. Here are some of the most relevant snippets from Levin's remarks:

This is big news, as Stratasys currently doesn't make 3D printers with metals capabilities, although it does offer metal 3D printing in its service operation. 3D Systems does, however, make and sell metal 3D printers, and also provides metal 3D printing services. Metal 3D printing is the fastest-growing space in the 3D printing industry, so there's much potential for Stratasys' new system assuming the company's strategy is on target and its system functions well.

Stratasys said that it developed its metal platform internally over the past several years, incorporating the company's proprietary jetting technology. Management didn't provide a timeline for commercialization and launch, but said that it would release more details at the RAPID + TCT 3D Printing Conference, which runs April 23-26 in Fort Worth, Texas.

3. Stratasys sold one H2000 large-format 3D printing system in the fourth quarter

From Levin's remarks:

The H2000, which was initially introduced as the Infinite Build 3D Demonstrator, is designed to produce large parts made of engineering-grade plastics. Boeing and Ford were Stratasys' development partners on this system. Stratasys sold its first H2000 in the third quarter and, as Levin noted, sold another one in the fourth quarter. Unfortunately, the company doesn't divulge customer names or even industries, but the fact that two of these large systems have now sold is a promising sign. Customers who are plunking down big money for such a system surely do so only after a good amount of testing. As Levin said, Stratasys foresees continuing to sell these systems on a regular basis.

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Beth McKenna has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Ford. The Motley Fool recommends 3D Systems and Stratasys. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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