Stratasys (NASDAQ:SSYS) reported higher third-quarter revenue and a narrower loss as aerospace and defense demand drove sales, but the 3D-printing company lowered its full-year revenue forecast because several large deals are taking longer to close.
Revenue rose 4.1% to $142.6 million from $137 million a year earlier. Aerospace and defense, the company’s largest business, grew more than 35% year over year and about 25% from the second quarter, CEO Yoav Zeif said on the earnings call.
Stratasys now expects 2026 revenue of $556 million to $561 million, down from its previous forecast of $565 million to $575 million. CFO Eitan Zamir said the revision reflected the timing of a few large opportunities rather than a change in demand.
“We are talking about few large opportunities that were pushed out further than we anticipated,” Zamir said. The revised outlook implies fourth-quarter revenue of approximately $143 million to $148 million, he said.
Manufacturing Sales Drive Growth
Zeif said Stratasys is shifting its focus from rapid prototyping toward manufacturing applications. He said growth in aerospace and defense, automotive, dental and the Stratasys Direct parts business more than offset a decline in low-end rapid prototyping.
System revenue increased 11.8% to $35.9 million, driven largely by aerospace and defense. Service revenue, which includes Stratasys Direct, rose 6.1% to $45.5 million. Consumables revenue was $61.2 million, down from $62 million a year earlier and $66.3 million in the second quarter.
Zamir said the company still expects full-year consumables revenue to exceed 2025 levels. He said quarterly revenue in that category could vary around a near-term average of $63 million to $64 million.
Stratasys Direct revenue grew 9% from a year earlier, Zeif said, citing demand for defense and drone production. He said the business’s backlog for parts production orders was at its highest level across all technologies.
Margins Improve, Loss Narrows
GAAP gross margin rose to 43.7% from 41% a year earlier, while non-GAAP gross margin increased to 47.8% from 45.3%. Zamir attributed the improvement primarily to the mix of system sales and a tariff credit, partly offset by lower consumables. Excluding certain one-time items, gross margin would have been between 45% and 46%, he said.
The company reported a GAAP net loss of $10.2 million, or 12 cents per diluted share, compared with a loss of $55.6 million, or 65 cents per share, a year earlier. The prior-year loss included a $33.9 million noncash impairment-related charge involving an associated company.
On a non-GAAP basis, net income rose to $3.5 million, or 4 cents per diluted share, from $1.5 million, or 2 cents per share. Adjusted earnings before interest, taxes, depreciation and amortization increased to $8 million from $5 million.
Operating cash flow was positive $3.5 million, compared with $6.9 million a year earlier. Stratasys ended the quarter with approximately $210.7 million in cash, equivalents and short-term deposits and no debt, Zamir said. He expects fourth-quarter operating expenses to be lower than in the third quarter but did not provide a direction for 2027.
MarkForged Deal Ends
Stratasys and Nano Dimension mutually agreed to terminate Stratasys’ planned acquisition of MarkForged, a Nano Dimension subsidiary, because the regulatory process was expected to be longer and more expensive than initially anticipated, Zamir said. He told analysts there would be no financial repercussions for Stratasys from the termination.
Zeif described MarkForged’s technology as complementary rather than transformative for Stratasys and said the company would consider other alternatives to advance its fused deposition modeling technology.
Automotive and Dental Updates
In automotive, Zeif highlighted Stratasys’ relationship with General Motors, which uses dozens of the company’s industrial printers across more than 20 plants. He said the printers supported more than 5,000 GM factory-floor applications this year and helped the automaker save $10 million annually.
Stratasys also launched its large-format F870 platform, with Toyota and Rivian among the first companies evaluating it for automotive tooling and manufacturing aids, Zeif said. China’s FAW Group is expected to have 17 F900 systems and eight other Stratasys printers by year-end.
In dental, Zeif said Stratasys received Indian regulatory approval for its TrueDent material to be used as a medical device. He said the company sees dental as a potential growth driver as it commercializes the technology.
About Stratasys (NASDAQ:SSYS)
Stratasys is a global provider of polymer 3D printing and additive manufacturing solutions. Its offerings include 3D printers, printing materials, software and related services for designing and producing prototypes, tools and end-use parts. The company serves customers across industries such as aerospace, automotive, healthcare, consumer products and education. Its technologies include Fused Deposition Modeling (FDM), PolyJet and stereolithography, supporting a range of applications from product development to manufacturing.
