Release Date: March 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- 3D Systems Corp (DDD, Financial) reported stabilization and strengthening in customer demand for new capacity in Q4 2024, particularly in industrial printers.
- The company's orthodontics business grew over 30% in 2024, contributing positively to material sales.
- 3D Systems Corp (DDD) has a strong position in the dental market, with a significant opportunity estimated at over $1 billion in the US alone.
- The company announced cost reduction and restructuring actions targeting over $50 million in annualized savings, expected to improve profitability.
- 3D Systems Corp (DDD) has a strong balance sheet with over $170 million in cash and cash equivalents, and expects to be in a net cash positive position following the divestiture of its Geomagic software platform.
Negative Points
- 3D Systems Corp (DDD) experienced a $9 million reduction in revenue and gross margin in Q4 2024 due to a change in accounting estimates related to its Regenerative Medicine program.
- The company's Healthcare Solutions segment saw a 21% decline in Q4 2024 revenues, impacted by the accounting change and softness in printer sales.
- Full year 2024 revenues declined 10% from the prior year, primarily due to broader macroeconomic pressures on printer sales.
- Non-GAAP gross margin for Q4 2024 decreased to 31.3% from 39.8% in the prior year, largely due to the change in accounting estimates.
- 3D Systems Corp (DDD) reported a negative adjusted EBITDA of $66.4 million for the full year 2024, a decline of $40 million from the prior year.
Q & A Highlights
Q: Can you provide more details on the improvement in the Industrial vertical, particularly in aerospace and defense, and how it might perform in Q1?
A: Jeffrey Graves, CEO: The improvement in Q4 was driven by high-reliability markets like rocketry, space, and satellites. While Q1 is typically weaker, the main challenge is the geopolitical and tariff situation affecting customer CapEx decisions. We expect a normal seasonality pattern this year, with a flattish to slightly positive trend, contingent on macroeconomic conditions.
Q: Regarding the dental market, will the bulk of revenue in 2025 still come from aligners, and when will the other segments contribute significantly?
A: Jeffrey Graves, CEO: The aligner market will continue to be a major revenue source in 2025. Other segments like Night Guards and dentures will start contributing more significantly in 2026. Dentures, in particular, are expected to see a ramp-up due to their larger market size.
Q: How are you addressing cost reductions, and what impact will this have on non-revenue generating segments like bioprinting?
A: Jeffrey Graves, CEO: We are focusing on reducing costs in non-revenue generating areas like bioprinting by slowing down or pausing some initiatives and potentially seeking partners. The focus is on efficiency improvements without significantly impacting revenue.
Q: Can you provide guidance on Q1 seasonality and the impact of the Geomagic divestiture on revenue?
A: Jeffrey Creech, CFO: Q1 will include one quarter of Geomagic sales, with the divestiture expected to close in Q2. The full-year guidance of $420 million to $435 million excludes Geomagic, focusing on core Industrial and Healthcare segments.
Q: What is the expected impact of cost cuts on revenue, and how much of the $50 million in savings is permanent?
A: Jeffrey Graves, CEO: The majority of the $50 million in savings is permanent, focusing on efficiency improvements like site consolidation. The impact on revenue is expected to be minimal, with most changes being permanent and not volume-dependent.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
