With some delay, but finally—3D Systems has released its financial results for the first quarter of 2024
The company continues to struggle, recording lower revenues and an operating loss
3D Systems, still one of the two largest companies in the additive manufacturing industry in terms of revenue, has published its financial results for the first quarter of 2024. Yes, only for the first quarter… This is due to an audit conducted by an independent firm, which had previously delayed the publication of data for the entire year of 2023. Interestingly, the results for the second quarter and thus the entire first half of this year will be released early next week.
Overall, the results do not look good. The company continues to grapple with declining revenues—particularly from its main sources, namely the sale of 3D printers and materials. 3D Systems again posted an operating loss, although it managed to reduce it compared to the same period last year, thanks only to so-called "other income."
In the first quarter ended March 31, 2024, 3D Systems' total revenue fell from $121.236 million in Q1 2023 to $102.905 million in Q1 2024, a decrease of approximately -15%. Product sales revenue dropped by about -24% from $84.388 million to $64.051 million. However, service revenue slightly increased by about +5.4% from $36.848 million to $38.854 million.
Gross profit decreased from $47.098 million in Q1 2023 to $40.922 million in Q1 2024, a decline of approximately -13%. The gross margin was around 39.8% in 2024, compared to 38.8% in 2023, suggesting a slight improvement in cost management efficiency.
The operating loss deepened from $-33.396 million in Q1 2023 to $-39.862 million in Q1 2024, reflecting an increase in operating loss of +19.4%. Despite a reduction in sales costs, the revenue decline negatively impacted the operating result.
Operating expenses (SG&A and R&D) remained virtually unchanged, amounting to $80.784 million in Q1 2024 compared to $80.494 million in Q1 2023. Sales, general, and administrative (SG&A) expenses slightly decreased, while research and development (R&D) expenditures increased by about +5.7%.
The net loss decreased from $-29.529 million in Q1 2023 to $-16.101 million in Q1 2024. The reduction in net loss was significantly influenced by the aforementioned other income, particularly other net income, which amounted to $21.386 million in Q1 2024 compared to $442 thousand in Q1 2023.
3D Systems experienced a significant revenue decline, especially in the product segment, which affected its operating result. Despite stable operating expenses, the company continues to incur a substantial operating loss. The reduction in net loss is primarily due to other income, which significantly improved the financial result. The gross margin increased slightly, indicating better cost management in production, but the revenue decline remains a challenge.
Dr. Jeffrey Graves, President and CEO of 3D Systems, commented on the company's first quarter results, noting that revenues were slightly below expectations due to unfavorable macroeconomic and geopolitical conditions, which particularly impacted hardware printer sales tied to customer capital expenditures. The Industrial segment was most affected, despite strong performance in the Aerospace and Defense sectors.
However, Graves expressed optimism, noting robust interest in additive applications and strong performance in materials and services, especially in the Healthcare business. He highlighted a multi-year contract with a leading provider of dental aligners as a key growth opportunity.
Graves also addressed increased operating expenses due to the extended timeline of the 2023 audit, which led to a $5 million increase in costs. However, he noted that, excluding this event, operating expenses have declined, reflecting the effectiveness of restructuring initiatives. Graves expects these challenges to diminish by the third quarter, positioning the company to reduce G&A costs and focus on sustainable profitability.
The company anticipates second-quarter revenues to be in the range of $113.0 - $113.5 million and will provide a comprehensive update with the next quarterly results.
Source: www.3dsystems.com