New M&A saga? Stratasys eyes ‘inorganic development’ with Fortissimo funding

3D printer OEM Stratasys (NASDAQ: SYSS) has introduced its monetary outcomes for the primary quarter of 2025 (Q1 2025).

The corporate reported Q1 income of $136.0 million, down 5.6% from $144.1 million in Q1 2024 and 9.5% from $150.4 million within the earlier quarter. The decline was primarily attributed to delayed capital expenditures and prolonged gross sales cycles, as prospects remained cautious amid ongoing macroeconomic uncertainty.

Gross revenue stood at $60.2 million, in comparison with $63.9 million a 12 months earlier and $69.7 million in This autumn 2024. Gross margin held regular at 44.3%, down simply 0.1 share factors Y/Y. Adjusted EBITDA practically doubled from the prior 12 months to $8.2 million, although it fell 43.6% sequentially from $14.5 million.

Alongside these outcomes, Stratasys highlighted a strengthened monetary place supported by a latest capital injection from Fortissimo Capital, setting the stage for a extra aggressive development technique within the quarters forward.

“We consider we’re well-positioned to drive elevated money move and profitability from our streamlined operations and recurring stream of income as we transfer by way of the stability of the 12 months,” Dr. Yoav Zeif, Stratasys’ Chief Govt Officer, mentioned.

Stratasys’ renewed M&A curiosity

Flush with money and a robust stability sheet, Stratasys has signaled its intention to pursue strategic acquisitions, having spent a lot of 2023 keeping off acquisition bids.

Beforehand, Stratasys was concerned in a number of high-profile business merger makes an attempt. A proposed mixture with Desktop Steel was terminated by Stratasys because of shareholder scrutiny, whereas additionally tackling takeover bids from 3D Methods, which have been additionally rejected. 

Essentially the most sustained strain got here from Israeli peer Nano Dimension, which issued a number of unsolicited acquisition gives all through 2023. That effort ultimately stalled, main Nano Dimension to purchase Desktop Steel and proceed with a merger involving Markforged.

Having closed the $120 million funding from Fortissimo Capital, Stratasys now holds $270 million in money and no excellent debt. Administration has acknowledged that this capital is primarily meant to help “inorganic development,” in line with Zeif.

Throughout the Q1 2025 earnings name, management famous that any acquisition can be assessed based mostly on alignment with Stratasys’ technique, which focuses on recurring income, manufacturing-centric use instances, and full-solution platforms.

Stratasys sees weaker stability sheets and falling valuations throughout the business as an opportunity to pursue value-driven acquisitions. Not like in prior years, it’s now positioning itself as an energetic acquirer amid sector consolidation.

Income breakdown and enterprise circumstances

Stratasys experiences income by way of two segments by way of its services and products segments. Income from the merchandise phase totaled $93.8 million in Q1 2025, down 5.4% from $99.2 million in Q1 2024 and 10.7% decrease than $105.0 million in This autumn 2024. 

Inside the merchandise phase, programs income fell to $31.2 million, down 5.2% Y/Y and 33.2% sequentially. In the meantime, consumables income reached $62.6 million, a 5.6% annual decline however a 7.2% improve from This autumn, pushed by excessive system utilization.

Administration highlighted that, regardless of {hardware} gross sales softening, recurring consumables income offered stability, notably in regulated industries like aerospace and healthcare.

Service income reached $42.3 million, reflecting a 5.8% decline from $44.9 million in Q1 2024 and a 6.8% lower from $45.3 million in This autumn. Inside companies, buyer help companies contributed $30.0 million, down 4.5% from $31.4 million in Q1 2024. 

Whereas new service contracts have been restricted because of tighter budgets, current prospects continued to depend on Stratasys’ help infrastructure. The corporate additionally famous that inside cost-efficiency efforts helped cushion the impression of decrease top-line outcomes on this phase.

Throughout the first quarter, Stratasys introduced a number of developments. In March, Stratasys and Siemens Healthineers developed patient-specific 3D printed CT phantoms that replicate human anatomy with excessive radiological precision, enabling extra constant imaging analysis, improved diagnostic accuracy, and enhanced coaching. 

Combining Stratasys’ supplies and Digital Anatomy know-how with Siemens Healthineers’ imaging algorithms, the fashions present a practical, repeatable surroundings for AI coaching and scientific validation with out the necessity for cadavers.

Elsewhere, Stratasys validated AIS Antero 800NA and 840CN03 supplies for its F900 3D printer, increasing its capabilities for aerospace and protection purposes. Developed with companions like Boeing and the US Air Pressure (USAF), these high-performance supplies meet rigorous requirements and streamline qualification by way of NCAMP equivalency, lowering prices and accelerating AM adoption in regulated environments.

Steering for FY 2025

Stratasys reaffirmed its full-year income steering of $570 million to $585 million, with sequential enchancment anticipated all year long.

Non-GAAP gross margin is projected at 48.8% to 49.2%, with working bills between $254 million and $257 million, and adjusted EBITDA of $44 million to $50 million. Capital expenditures are anticipated to vary from $25 million to $30 million, and working and free money move are forecast to exceed 2024 ranges.

The Fortissimo funding added 11.65 million shares to the corporate’s rely as of April 8, however the ensuing curiosity earnings is predicted to completely offset any dilution.

Stratasys has accordingly raised its 2025 outlook, now projecting a GAAP web lack of $64 million to $49 million with GAAP EPS between $(0.80) and $(0.61), and non-GAAP web earnings of $24 million to $30 million with EPS between $0.30 and $0.37.

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Featured picture exhibits the Stratasys staff at RAPID + TCT 2025. Picture by way of Stratasys.