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3D SYSTEMS CORP (DDD)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue declined 8% year over year to $94.5M, driven by dental aligner materials destocking; non-GAAP EPS was a loss of $0.21. The company missed Wall Street consensus on both revenue ($99.46M*) and EPS (-$0.145*) .*
  • Management withdrew full-year 2025 guidance amid a “virtually frozen” CapEx environment tied to tariff uncertainty, and announced incremental cost actions targeting $20M in-year savings (on top of $50M already in flight) .
  • Positive mix: second straight quarter of new printer sales growth (particularly next-gen metals), plus Healthcare strength (Personalized Healthcare +17% and medical parts manufacturing +18% YoY) despite macro headwinds .
  • Margins compressed on lower volumes/unfavorable mix (GAAP gross margin 34.6% vs 39.8% YoY), and adjusted EBITDA widened to -$23.9M (vs -$20.1M YoY) .
  • Balance sheet flexibility improved post Geomagic sale proceeds; cash was ~$250M at April month-end and the company is net cash positive relative to remaining converts due Nov-2026, opening liability management options .

What Went Well and What Went Wrong

What Went Well

  • New hardware momentum: “double-digit revenue growth” in metal printing platforms despite soft CapEx; wins across all three metal platforms and steady growth in Aerospace & Defense end-markets .
  • Healthcare resilience: Personalized Healthcare +17% and FDA/CE-approved parts manufacturing +18% YoY; continued progress with point-of-care innovations (e.g., MDR-compliant PEEK facial implant in Basel) .
  • Cost discipline: Non-GAAP OpEx fell ~$5M YoY to $61.6M; cumulative savings plan expanded to at least $70M ($50M by mid-2026 plus $20M in-year 2025) .

What Went Wrong

  • Materials shortfall (dental aligners): materials revenue down 23% YoY with end-of-quarter shipments slipping, as customers lean inventories and move toward just-in-time sourcing, amplifying quarterly volatility .
  • Margin pressure from lower volumes/unfavorable mix: GAAP gross margin fell to 34.6% (non-GAAP 35.0%), contributing to adjusted EBITDA of -$23.9M vs -$20.1M YoY .
  • Guidance withdrawn and revenue miss vs consensus: Q1 revenue $94.54M vs $99.46M* estimate; non-GAAP EPS -$0.21 vs -$0.145* estimate; the company pulled FY25 guidance due to tariff-driven CapEx freezes .*

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$112.9 $111.0 $94.5
GAAP Diluted EPS ($)$(1.35) $(0.25) $(0.28)
Non-GAAP Diluted EPS ($)$(0.12) $(0.19) $(0.21)
GAAP Gross Margin (%)36.9% 31.0% 34.6%
Non-GAAP Gross Margin (%)37.6% 31.3% 35.0%
GAAP Operating Expense ($USD Millions)$222.5 $64.8 $69.5
Non-GAAP Operating Expense ($USD Millions)$61.4 $58.4 $61.6
Adjusted EBITDA ($USD Millions)$(14.3) $(19.1) $(23.9)

Segment revenue

Segment Revenue ($USD Millions)Q1 2024Q1 2025
Healthcare Solutions$45.4 $41.3
Industrial Solutions$57.5 $53.2
Total$102.9 $94.5

KPIs and Liquidity

KPIQ4 2024Q1 2025
Cash & Cash Equivalents ($USD Millions)$171.3 $135.0
Total Debt, net of deferred financing costs ($USD Millions)$212.0 $212.3
Cash used in Operations ($USD Millions)n/a$(33.8)
Capital Expenditures ($USD Millions)n/a$2.8
Post Geomagic Sale Cash (April month-end) ($USD Millions)n/a~$250

Q1 2025 vs Wall Street Consensus (S&P Global)

MetricQ1 2025 ActualQ1 2025 ConsensusBeat/Miss
Revenue ($USD Millions)$94.54 $99.46*Miss
Non-GAAP EPS ($)$(0.21) $(0.145)*Miss
Adjusted EBITDA ($USD Millions)$(23.9) $(12.36)*Miss

Asterisked values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious Guidance (3/26/25)Current (5/12/25)Change
Revenue ($USD Millions)FY 2025$420–$435 Withdrawn Lowered/Withdrawn
Non-GAAP Gross Margin (%)FY 202537%–39% Withdrawn Lowered/Withdrawn
Non-GAAP Operating Expense ($USD Millions)FY 2025$200–$220 Withdrawn Lowered/Withdrawn
Adjusted EBITDAQ4 2025Break-even or better Withdrawn Lowered/Withdrawn
Cost Savings (Annualized)FY 2025–H1 2026$50M by mid-2026 +$20M incremental in 2025; $6–$10M one-time charges Raised

Earnings Call Themes & Trends

TopicQ3 2024 (Previous-2)Q4 2024 (Previous-1)Q1 2025 (Current)Trend
Tariffs/Macro/CapExSluggish customer CapEx; printer sales weakness Cost-saving focus; innovation cycle; preparing for divestiture CapEx “virtually frozen” due to tariff uncertainty; guidance withdrawn Deteriorated
AI infrastructureAIG up 26% YTD; semis/oil & gas/A&D interest Portfolio refresh and in-sourcing near complete Semiconductor platforms, copper thermal management in data centers; energy generation parts Strengthening focus
Dental materials/alignersConsumables up ~10% YoY; dental strength Largest dental contract; FDA clearance for jetted denture solution (Sept ‘24) Aligner inventory destocking drives materials decline; NextDent materials portfolio reiterated Mixed: near-term headwinds, long-term opportunity
Personalized HealthcareHighlighted as growth vector Continued regulatory and product launches +17% Personalized Healthcare; +18% medical parts manufacturing Improving
Metals platformBroad innovation cadence In-sourcing supports quality/margins Next-gen DMP 350 triple laser; Gen 2 DMP 500 pipeline; double-digit metal growth Improving
Cost actionsRestructuring benefits sequential OpEx New $50M plan announced +$20M incremental 2025 savings; target net positive EBITDA at current revenue Accelerating
Regulatory/point-of-caren/aFDA denture solution; Geomagic sale pending MDR-compliant PEEK facial implant at point-of-care (Basel) Advancing

Management Commentary

  • “Capital spending by customers…is virtually frozen, due in large part to the uncertainty around tariffs…until the situation becomes clearer, I believe CapEx investments will remain somewhat anemic” .
  • “Incremental actions…designed to deliver $20 million of in-year savings for 2025” and “focused on profitability improvements” .
  • “Personalized Healthcare…grew revenues 18% and 17%, respectively, in the quarter” with expanding ISO 13485-certified manufacturing footprint .
  • Metals: “DMP 350 triple laser metal printing system…low oxygen contamination…less than 25 ppm…key markets defense, aerospace and AI infrastructure” .

Q&A Highlights

  • Aligner inventory: Customers are migrating to more sophisticated JIT working-capital models, creating forecast/shipment volatility; management sees long-term growth intact despite quarter-to-quarter swings .
  • Q1 revenue miss: end-of-quarter materials shipments slipped; several equipment POs delayed as customers re-evaluate factory locations amid tariff uncertainty .
  • Cost cuts distribution: Savings expected to be “fairly evenly split” between cost of goods and OpEx; R&D throttled but maintained for core markets .
  • Debt maturity (Nov 2026 converts): Options span using cash to repay versus refinancing/rolling forward at higher rates; decision to be made after Geomagic cash receipt and Board review .
  • Profitability path: Aim to be profitable and cash generative at current revenue run-rate once cost actions fully implemented .

Estimates Context

  • Q1 2025 results missed consensus: Revenue $94.54M vs $99.46M* and non-GAAP EPS -$0.21 vs -$0.145*; adjusted EBITDA -$23.9M vs -$12.36* .*
  • Near-term estimate adjustments likely lower for materials/dental aligners given inventory normalization commentary and tariff-driven CapEx uncertainty; metals and Healthcare may partially offset as product cycles ramp .
    Asterisked values retrieved from S&P Global.*

Key Takeaways for Investors

  • Top-line headwinds are macro/tariff-driven rather than demand destruction; expect ongoing quarterly volatility in materials (aligners) until JIT transitions normalize .
  • Cost program now at least $70M (annualized), with $20M incremental in-year 2025; track OpEx and COGS progress as leading indicators for EBITDA inflection at current scale .
  • Metals platform and Healthcare are strategic growth pillars; watch commercialization milestones (DMP 500 Gen 2, NextDent denture platform launch) for mix/margin uplift .
  • Balance sheet flexibility improved (~$250M cash post Geomagic) and net cash position vs converts; follow management’s approach to the 2026 maturity (possible partial repayment/refinance) .
  • Guidance withdrawal reduces near-term visibility; investor focus should shift to execution on cost actions, backlog/PO timing, and materials sell-through stability .
  • Segment mix matters: Industrial should benefit from A&D and AI infrastructure demand; Healthcare remains resilient and is supported by regulatory/point-of-care wins .
  • Trading lens: Near-term sentiment sensitive to tariff headlines and materials shipments cadence; positive catalysts include proof-points on cost reduction flow-through and metals wins in defense/AI infrastructure .