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Stratasys (NASDAQ: SSYS) reported lower first-quarter revenue and a wider GAAP loss as printer purchasing timelines remained extended. Management said recurring revenue, defense demand and growth at Stratasys Direct supported its outlook for the full year.
On the earnings call, CEO Dr. Yoav Zeif said the results reflected “the continued resilience of our operating model in a measured spending environment,” adding that consumables and customer support continued to provide stability while customers remained cautious with capital spending amid global uncertainty.
CFO Eitan Zamir said first-quarter consolidated revenue was $132.7 million, down about 2.4% from the prior-year period. Product revenue declined to $88.8 million from $93.8 million a year earlier. Within product revenue, system revenue was $28.8 million versus $31.2 million, and consumables revenue was $60.0 million versus $62.6 million.
Service revenue rose to $43.9 million from $42.2 million, supported by growth at Stratasys Direct. Zamir said Stratasys Direct delivered 23% organic growth after divestments compared with the first quarter of 2025. Zeif said the top three parts customers at Stratasys Direct were again all U.S.-based drone-related companies.
GAAP gross margin was 41.7%, down from 44.3% in the year-earlier quarter. Non-GAAP gross margin was 46.3% compared with 48.3% a year ago. Zamir attributed the decline primarily to a $2.4 million year-over-year increase in tariff expense, representing a 180-basis-point impact, along with lower revenue.
GAAP operating expenses increased to $81.9 million from $72.6 million, driven primarily by higher professional fees and foreign currency exchange effects, particularly the appreciation of the Israeli shekel against the U.S. dollar. Non-GAAP operating expenses were $64.6 million versus $62.6 million, with foreign exchange contributing about $3.1 million to the increase.
The company posted a GAAP operating loss of $26.5 million, compared with a loss of $12.4 million in the prior-year quarter. Non-GAAP operating loss was $3.2 million, compared with operating income of $3.0 million a year earlier. Adjusted EBITDA was $2.0 million, down from $8.2 million, with Zamir citing roughly $5.3 million of combined foreign exchange and tariff pressures.
GAAP net loss was $23.8 million, or $0.28 per diluted share, compared with a net loss of $13.1 million, or $0.18 per diluted share, in the year-earlier period. Non-GAAP net loss was $1.3 million, or $0.01 per diluted share, compared with non-GAAP net income of $2.9 million, or $0.04 per diluted share.
Stratasys generated $2.4 million in operating cash flow during the quarter, which Zamir said reflected working capital discipline and structural cost improvements implemented over recent quarters. The company ended the quarter with $237.8 million in cash equivalents and short-term deposits and no debt.
Stratasys reiterated its full-year 2026 revenue guidance of $565 million to $575 million. Zamir said the company expects revenue to grow sequentially each quarter through the year and expects 2026 consumables revenue to increase over 2025.
Zeif said Stratasys is “progressing according to our growth plan” and added that 2026 is expected to be its first year of growth in three years. He said the transition from prototyping to manufacturing is “working.”
Management emphasized aerospace and defense as a major growth opportunity as additive manufacturing is adopted for drones, missiles, munitions, sustainment and maritime applications. Zeif said aerospace and defense is “the leading vertical today” with a promising pipeline, driven by higher budgets and demand for more agile manufacturing.
Zeif said Stratasys Direct ships more than 100,000 parts annually to the defense industry and operates under quality and compliance systems including AS9100, ISO 9001, CMMC compliance and ITAR requirements. He said the defense work is production-scale additive manufacturing for demanding customers rather than prototype-stage or pilot-stage engagements.
The company highlighted its selection during the quarter for the U.S. Department of Defense’s Joint Additive Manufacturing Acceptability IV Pilot Parts program (JAMA IV). Zeif described the program as a multi-million-dollar initiative intended to accelerate qualification and deployment of 3D-printed parts across military platforms.
During the Q&A, Zeif said drones are leading current demand, but the opportunity extends into missiles, munitions and sustainment. He cited aging military platforms such as the B-52 as examples of sustainment needs and said additive manufacturing can support efforts to refresh depots and shipyards with production tools and parts.
Stratasys also discussed a regulatory milestone for its TrueDent resins, which received CE Class IIa medical device certification. Zeif said TrueDent is the first polychromatic monolithic 3D-printed denture solution certified at that classification in Europe.
The certification expands TrueDent’s indications to include long-term intraoral removables, crowns and bridges. Zeif said the European segment is projected by analysts at about $2.45 billion by 2028, while the U.S. opportunity for removables is nearly $5 billion.
Zeif said the Class IIa designation removes an adoption barrier for clinicians and laboratories and requires no changes to print settings, formulation, workflow or shelf life on the company’s J5 DentaJet platform. In the Q&A, he said Stratasys plans to be “the largest player in Europe” in this area, citing a first-mover advantage in polychromatic dentures.
Stratasys pointed to new material and software developments intended to broaden its manufacturing applications. Zeif said ULTEM 1010 resin is now available as filament for the F3300 printer, enabling aerospace-grade high-temperature parts and composite tooling applications. He also said ToughONE material has been expanded to the J3 and J5 PolyJet systems for durable functional prototyping and end-use parts.
On the software side, Zeif said measurement-based warp adaptive modeling is being integrated into GrabCAD Print Pro for the Origin One P3 platform. He said the feature uses measured dimension data to automatically correct warping, reducing iterative correction cycles for parts such as electrical connectors, precision jigs and industrial fixtures.
Zeif said the company intends to use its debt-free balance sheet to pursue inorganic opportunities aligned with high-requirement applications, and that it does not want to focus on basic prototyping where competition can become “a race to the bottom.” Instead, it aims to capture higher-value use cases in manufacturing, defense, dental and other demanding markets.
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