3D Systems is well-positioned to capitalize on a very bright future ahead
The company reveals its financial report for Q2 and the first half of 2024, noting further revenue declines and an operating loss
At the end of August 2024, 3D Systems announced its financial report for the second quarter and the first half of 2024. The company continues to generate a significant operating loss and is experiencing a continued decline in revenue. In fact, the only good news is that, quarter over quarter, revenues increased by 10%.
Nevertheless, according to the company’s CEO, Dr. Jeffrey Graves, there is not only no cause for concern but, on the contrary, the company is well-prepared to take advantage of the opportunities the future will bring!
Before we go further, it’s worth noting that the company published its results for the first quarter of this year just nine days earlier, i.e., in the middle of the third quarter... This delay was due to prolonged audits, which themselves turned out to be a financial burden for the company.
As a brief reminder: revenues for the first quarter of 2024 were 15% lower than in the same period last year. 3D Systems generated $102.9 million compared to $121.2 million the previous year. The net loss decreased from -$29.529 million in Q1 2023 to -$16.101 million in Q1 2024.
With some delay, but finally—3D Systems has released its financial results for the first quarter of 2024
How did things look in the second quarter?
Revenues decreased by 11.7% to $113.3 million compared to the same period last year when the company generated $128.2 million. Revenues fell across all segments: Healthcare Solutions saw a decline of 19.7%, and Industrial Solutions dropped by 4.4%.
The net loss amounted to -$27.3 million compared to a net loss of -$28.9 million in the same period last year.
However, quarter over quarter, the company recorded a 10% increase in revenues.
As for the entire first half of the year, revenues fell by 13.3% (from $249.4 million in 2023 to $216.2 million in 2024). However, the net loss decreased from -$58.3 million to -$43.4 million.
The company expects to close the year with revenues in the range of $450–460 million. This would be about $20-30 million less than last year and would be the worst result since 2012 when the company achieved $354 million in revenue.
Why are these better results so hard to achieve...? Well, according to the company’s CEO, there are no such issues...
In his commentary on the published results, Dr. Jeffrey Graves, President and CEO of 3D Systems, said:
We are encouraged by the sequential revenue progress we delivered during the second quarter despite a challenging operating environment. Our top-line improved 10% quarter-over-quarter, reflecting strong performance by our Industrial and Healthcare markets for hardware, materials, and services. While our second-quarter revenue saw a year-over-year decline, this was primarily due to reduced printer sales to a specific dental customer and ongoing macroeconomic pressures on customer capital spending. We remain optimistic about the future given our most recent sequential recovery and continued momentum in our robust customer pipeline.
Dr. Graves continued,
During the quarter, we continued to deliver gross margin improvements annually and sequentially, in spite of the year-over-year volume decline. Looking forward, we believe our in-sourcing and restructuring actions, which have favorably impacted our cost-of-goods this year, will continue to drive gross margin expansion moving forward. Additionally, we are beginning to demonstrate steady improvement with respect to our operating expenses, which should accelerate in the second half of the year.
(...)
We expect to exit the year with normalized Non-GAAP operating expenses below $60 million by the fourth quarter, which on an annualized basis would be within our previously provided full-year range. In combination with the sequential improvement in revenues expected throughout the second half, we believe the significant reduction of operating expense in the second half will propel the company to near break-even adjusted EBITDA for the fourth quarter. While conditions remain challenging in the near-term, we have taken considerable actions to derisk our balance sheet since the end of 2023 and believe we are well-positioned with our critical R&D investments to capitalize on a very bright future ahead.
And you know what? I decided to believe him. I'm glad that 3D Systems is getting back on track and despite the current poor results, things will soon change for the better.
Source: www.3dsystems.com