ROCK HILL, SC, Feb 29, 2024 – 3D Systems Corp. announced its financial results for the fourth quarter and full year ended December 31, 2023. For the fourth quarter of 2023, the company reported revenue of $114.8M, down 7.3% compared to $123.79M for the third quarter of 2023. Net loss was $300.4M.
Commenting on 2023 results and the outlook for 2024, Dr. Jeffrey Graves, president and CEO of 3D Systems said, “Our fourth quarter revenue results reflect the significant headwinds created by ongoing macroeconomic and geopolitical volatility. As we exited the third quarter, we had expected some of these broader pressures to moderate through year-end, as historical seasonality of increased consumption and year-end customer capex spending would typically translate to an acceleration of revenues in the fourth quarter. While customer-driven pre-sales activities did accelerate as expected in the quarter, the same cannot be said for revenue. Fortunately, based upon customer feedback, we view this as a market timing issue rather than any permanent trend in customer adoption rates for additive manufacturing, or a loss of market share for 3D Systems.”
“Reflecting on 2023 in its entirety, the most influential driver to our revenue performance was our dental orthodontic product line, with revenues declining 39% from 2022 levels and essentially cut in half from their peak in 2021. However, adding to the pressure from this market was a sluggishness broadly in capex spending on new production capacity by both our Healthcare and Industrial customers. These combined effects resulted in a significant revenue headwind for 2023. In response to this softness, we’ve undertaken a comprehensive restructuring initiative to reduce costs, improve margins through greater efficiencies, and keep the company solidly on a path for sustained profitability and positive operating cash flow. The rise in gross margins, even in the face of declining volumes in 2023, is an early indicator of these efficiency improvements, which we expect to continue throughout 2024.”
“It is important to note that we are different from others in the additive manufacturing industry in that we have the broadest range of technology platforms, which we bring to market through two focused business units, Healthcare and Industrial Solutions. These platforms span metals, polymers and biologics, and, by necessity, require deep expertise in hardware, software and materials development. This technology foundation, in which we have been heavily investing for the last two years, along with industry-leading operational scale and an outstanding global reach, give us an ability to continue taking cost out of our business while preserving the critical investments needed to support the exciting growth opportunities we see ahead. Our goal is to balance short-term profitability and cash performance in 2024, with the need to ensure continuity in essential R&D investments for growth. This balance is critical for two reasons. First, risks remain in the world economic outlook, which could continue to impact sales in the short term. However, offsetting this pressure are a number of very targeted key-customer applications we expect to bring to market over the next 12-18 months. Fortunately, to execute these restructuring and investment plans, we have a strong balance sheet with over $300 million in cash, and 0% interest debt that is not due until late 2026. This gives us an ability to thoughtfully restructure the business to drive profitability and cash performance, while supporting key customer-driven development programs that we believe will add meaningfully to our top line revenues in the years ahead.”
Dr. Graves concluded, “Given the continuing risks we see to the world economy, we expect moderating but continued sales pressures, which we are translating into relatively flat top line revenue expectations for the year. Given this, we will prioritize completion of our previously announced restructuring program, which includes headcount reductions, significant site consolidations and a reduction in external spending. We believe these efforts, which will largely be completed by mid-year, will favorably impact both COGS and OPEX, further improve gross margins, and deliver positive adjusted-EBITDA performance and operating cash flow for the full year. In parallel, we will continue our most important development programs that are now, after over two years of increased R&D investment, beginning to yield exciting results. We expect these new additive solutions to materially change the way products are designed and manufactured and healthcare is delivered. We believe the path forward is very clear. In the short term, we will manage our costs to deliver improving margins and cash performance in the face of economic uncertainty. As these clouds then lift, the opportunities for growth in our industry remain incredibly bright. We believe that this focus on our strategic initiatives will harmonize the ability to deliver sustainable profitability this year, while preserving the exceptional opportunities we have to deliver long-term shareholder value in the years ahead.”
A complete chart of the financial results is available here.
About 3D Systems
More than 35 years ago, 3D Systems brought the innovation of 3D printing to the manufacturing industry. Today, as the leading additive manufacturing solutions partner, they bring innovation, performance, and reliability to every interaction – empowering their customers to create products and business models never before possible. 3D Systems’ solutions address a variety of advanced applications in healthcare and industrial markets such as medical and dental, aerospace & defense, automotive, and durable goods.
More information on the company is available at www.3dsystems.com.
