Stratasys (SSYS) 16 May 232023 Q1 Earnings call transcript

Greetings and welcome to the Stratasys Limited First Quarter 2023 earnings call.

At this time, all participants are on a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require Operator assistance during the conference, please press star, zero on your telephone keypad.

As a reminder, this conference is being recorded.

pleasure and your Relations. Vice my Chief Yonah now Officer Communications President is to host, introduce Lloyd, It of Investor you, ahead. please Thank go

to quarter everyone our morning and you joining Good thank XXXX results. financial us first for discuss

On Dr. Zeif, the and CFO, Zamir. Yoav Eitan call today CFO, our us with are our

our that like available web the online you today’s press including access in release. would I remind the call, at address to to slide is provided presentation,

presentation, including addition, Relations be will a slide replay to In accessed section Investor website. also call, and the access be today’s our can available the of through of

that future results expectations gross the or of during forward-looking note operating differ events, trends margin, performance, to regarding you business consist our performance without for including will to as limitation that those Actual other expenses, expectations taxes, materially statements Please hear our financial our some statements. our of or statements, speak our will forward-looking revenue, discussion and All future outlook. forecasts. today future expectations from information could results are and our

XX-F SEC are review furnishing on and Form are prospects and to as XXXX today results on Item that included quarter the year. to be discussed and which X-K of operating for respectively. cause the X Please referenced factors refer the actual annual annual to Form XXXX, please for we the set XXXX on to for forward-looking for risks For those risk materially and Exhibit different refer Stratasys’ in of to our that our report the or Form forth in XX-F could report from statements, first report also XXXX financial XX.X

quarter X-K press which for the we see of Form are attached a to on Exhibit separate release earnings as that today. our SEC that announces the to XX.X XXXX, furnishing the also report is Please first

our we year furnish material of dates. which operating as SEC updated any current X-K Form on Stratasys our information regarding forward-looking the statements company. no throughout to update information provide quarterly or developments assumes basis concerning to respective Our and reports the results their on that obligation a speak and

quarters, include will financial financial our to release. GAAP read with in GAAP in our As performance. and in measures. call metrics GAAP reconciliations combination The be press should Non-GAAP tables evaluate and previous presentation non-GAAP provided measures are today’s our in to non-GAAP slide today’s

I to over will our Executive the Zeif. now call Dr. Yoav? Officer, Chief Yoav turn

and thank Thank everyone joining you us. you Yonah. Good morning for

the would we initially subsequently briefly then to Nano Before business unsolicited Dimension from I in cash. I proposals to months received in like acquire recent share $XX.XX highlights, per $XX.XX, comment discuss the Stratasys for and three on $XX.XX, for

proposal. independent As announced, Stratasys duties previously each and with legal with reviewed the consultation and financial carefully evaluated fiduciary and in consistent its its board advisors,

they the rejected standalone review, Stratasys company’s Following because each proposals all substantially board prospects. undervalued three light each Stratasys in unanimously the of

offer. to company’s articulated growth As questions controlling legal on Nano The a multiple and value have are the Stratasys previously, its of Nano as and governance midst enhancing remain we the and, execute result, is legitimacy successfully of involving team the lawsuits of serious the shareholder management continue strategy. company shareholders about board the to with committed the in

billion We a revenue towards are profitable becoming highly making strong $X progress company.

proposal against board As fide our and for standalone the its plan. review bona it part of duties, the fiduciary company any will weigh

the our performance on further our keeping for going to you comment this on focus today. of this questions appreciate call not We matter is focused as are quarter. the We results your

results increasingly Our another backdrop. for represent XXXX performance, excellent consecutive quarter challenging macro of an QX solid despite

believe come. model set of years also and our key our for positioned not broad to profile, and and winning leadership diverse to driven but returns strategy resilient drive software growth shareholder solutions. we only our for global business technologies, and position, today our We continue accelerate are to execute materials we five strong With systems, financial on by

the Our XXXX $X his in in expect term we but confidence with Eitan to will is further remarks, in provide billion reflected focus we substantial revenue today. medium surpass are profitability. details during announcing

of terms utilization our drove ever customer quarter than In both record before, our by results, customers seeing first service. which are we in and all-time revenues stronger consumables

related and few As earnings in we occasional sales causing cycles deferrals noted on capex have of the pressure longer past calls, are budgets orders. macro

year, the impact to first the for due OEM was on divestments, hardware revenue those Our last purchases. and FX adjusted quarter relatively to flat of of primarily factors

of are give opportunities new our in polyjet, positioned set technology the Stratasys organic on-shoring, of sub via PX, the just-in-time of across our growth combination sheet, take stereolithography, de-globalization in of robust external and expand driving trend is proven our opportunities. balance advantage for industry, FDM and capabilities. and broadest sustain to us polymer the platform software offerings us unified unmet reach materials growth. manufacturing and portfolio, market and systems pursuit apart and production in opportunities The enable will a these with Along leading to the go-to-market of sets this

both strong. and with our installed Engagement base new remains customers

expand continue across technologies, suite our particularly to customer entire of applications. targeting reach We manufacturing our

that flat as We demonstrated the nearly year-ago period of last kept resilience also corresponding a and year the even recurring a revenue. that to spending delivered percentage were revenue opex business gross flat and reduction compared in have margins model with period, quarter a this to

the delivered for a share proud faced, positive and despite quarter. earnings adjusted As of that our per I’m seventh result consecutive we the headwinds efforts

Our returns the that sheet ended shareholders for turn robust We a of million support more our leverage to strengthen future vision ever. than with through and improve and including and highly results we growth as strong opportunities, which continues believe and investments stage cash infrastructure $XXX operations. businesses additive we to equivalents. greater acquisition debt no balance technology-driven in compelling our quarter This manufacturing in accretive experience includes and organic our but early will is the our ability for deliver to

since XXXX. of Now let the milestones me end achievements turn and to the reached exciting

multi-colored our monolithic medical introduced solution dental cleared through we February, resin, printer XD first-ever TrueDent our FDA In device.

fast a The looking is $XX gum is structures, resin to tooth with industry As in software are the printers the is exclusive additive and solution. actively print. deliver GrabCAD and provides ability overall new DentaJet dental TrueDent quality dentures work scale today. accurate evaluating the natural and several the simplified many growing using dental with labs time the for dentures customers a translucency labs solution market TAM print processing and use largest flow of permanent create shade for We reduced designed enables manufacturing already continuous in The labs our to and dental have manufacturing. reminder, a one billion in best available JX to

implant launched In trade February, dental models recently new DentaJet opening industry’s Stratasys the received and excellent reception an we for surgical largest show. labs. printer, opportunities at for dental guides JX It such more the as up

to provides for customers ready quality up entry an superior lower Our point solutions. accuracy step from

with of system. relative world’s the dental One labs said previous production the the largest daily JX it its to volume tripled

medical models to with USA agreement on-demand our highlights, for XD printed an we in signed anatomic settings. February Moving Ricoh clinical provide to

into service XD the precision cloud-based XD additive combine printing manufacturing from one This healthcare XD Ricoh of Ricoh printed and convenient a relationship expansion as segmentation the solutions an from and solution. represents solution between Our for our AxialXD, technology, service patient-specific Stratasys.

with tissues initial bio RH and combination technology-based development for to of collagen-based transform implants, of and our joint we commercialization bio $X.X bio a ink After be solutions will is organs. and with bio quarter around agreed printer our respective CollPlant billion of printing additional development their the companies opportunity. human future The to innovation agreement printing of for organs. products. Both industrial-scale Biotechnologies Further, and PX also bio ideal regenerative the with breast healthcare of end, cross-promote production a printing tissues relationship focus CollPlant’s forged

industrial production partner printers. involved Götz for we system a On the secured use and is a in additional four also Stratasys side, for parts. valued growing help quality to opportunity that sale multi German polyjet-based demand deploys HXXX Service the systems already meet mass printers. end Götz March our Bureau Maschinenbau high FDM with The

R&D to of manufacturing more is to addition, business industry additive Covestro’s the we printed which materials early powders be expands In applications. material in Covestro April differentiated our expected and address in acquisition immediately XD DLP offering stereolithography, manufacturing closed and materials development able pushing teams, for manufacturing. boundaries of the sales manufacturing. is be a additive and applications of we accretive XX Together, portfolio and what global in will additive facilities, possible to faster, includes address more

SAF available other make our applicable for FDM and and Print We significant we value this our is our revenue are prototypes. adding parts for provides and boost scale update Last introduced also which tooling our rollout as production a use month, three Pro, technologies well. on customers growing end for across systems, We major recurring focus The GrabCAD to plan software volume, software initial customers. increasing for while announcements. through productivity

functionality integrate package X.X acquisition party third subscription software as available Systems. partners in Three These management our industry scaled helping from in our as as quality and includes annual ecosystem into advances growing added we The from are capabilities release the recent initial continue AlphaSTAR, Castor, Cognitive well infrastructure. Design value-add partners. plug-in up are Stratasys

able In fact, incorporate into the factory Advanced arms other machines, CNC Stratasys’ to University its architecture mainstream the data equipment. Sheffield at successfully factory-plus robot has alongside of right and Center been Manufacturing Research

In and is with opportunities helping addition, drive expansion systems software into Stratasys’ materials.

with seeing greater driver it widely now in printers a that Origin customers the key Fortus provides help OpenAM part are manufacturing in for we material is selection. interest Our printer available previously it One That unlock FDM and software end flexibility XXX customers’ to is due opportunities applications announced use as of in well. customers also are interested to

the build meaningful growth and best-in-class innovations, long our for contributing efforts our leadership foundations to technological our industry Our term. drive will to partnerships that for key sales channels, are on

turn I outline results, will and Zamir our medium XXXX, share Eitan financial update term for over the to rest our now CFO, the focus. the our Eitan? of to outlook call

Thank morning everyone. good and Yoav, you

quarter. against achieved solid backdrop challenging the As Yoav mentioned, the macro in increasingly results we

maintaining particularly a tight are efficiencies both margin, on continue of right platform. drive held as challenging across and we and to proud We the growth infrastructure operating the due we to management the environment in how profitability opex line

customers, our profitability. quarter resilience new service, from utilization diversified slowdown Our consumables sales, results revenues and deliver by we printer recurring customer provides. adjusted our that expected the Despite offering of record continued driving us in demonstrate our straight seventh our helping of systems the saw

dive numbers. let deeper Now into me the

Revenue at period divestitures million revenue or by year, compared excluding currency down constant in to currency constant on last X.X% the from year to revenue QX same the quarter XX.X% quarter, first basis. the business, declined $XXX.X a for the compared was revenues. compared down as to down as constant unadjusted well which X.X% XXXX, to currency million OEM For and MakerBot divestitures and adjusted at consolidated our first excludes was in X.X% prior X.X% by period. of FDM, $XXX Product the and

revenue, With compared to same product million system $XX.X last declined million to the in period $XX.X revenue XX.X% year.

period divestitures $XX.X This on by revenue and constant rose and Stratasys to grew Consumables to have for level basis, strong. same at by business rose year, signals basis constant down a are million systems by compared on currency was X.X% the Excluding of last a that currency in constant and represents sold our XX.X%. a we record our revenue rates X.X% OEM currency. utilization X.X%

Services it down FDM last was million, as X.X% constant backing FDM, up $XX.X out currency. to at revenue and X.X% same year. After up compared X.X% the including was period

to a the compared customer the rates systems. year highest Within service and the period utilization revenue, basis. by constant of further last revenue support a currency was X.X% service ever, growing customer same testament grew revenue to our X.X% on increased Our

flat margin margin to gross Non-GAAP compared turning GAAP the to margin, was same XX.X% for to was gross same Now quarter, period last compared period quarter for the XX.X% last the year. for the year. gross XX.X%

despite the Our from hold also year, margin our revenue testament divestment MakerBot by margin across the gross a cost ability savings focus impact. platform. relentless the last of on in is partially to offset Gross unchanged to decrease FX the benefited

were expenses $XX.X the GAAP XX.X% $XX.X to of for $XX.X to improvements. to million same compared period million were XX.X% the revenue last operating operating focus the Non-GAAP quarter for million compared during last to continued the last during year. year $XX.X year. million were expenses operating expenses as on operational same we compared Non-GAAP period same period efficiency

manage model. efficiently low relatively despite the to our revenue, delivering reflecting the We of continue opex lower scalability costs, our

in somewhat the non-GAAP for $XX.X was operating the GAAP quarter opex. of loss Regarding year. our improvement $XX.X for X.X% compared the change million compared the year. earnings, loss overall $X to same million $X.X quarter offset last for an million a million to period Non-GAAP reflects revenue for operating by same last the period in was decline income The consolidated

GAAP $X.X net Again, per delivering of the million diluted last diluted period EBITDA loss for share for year, net same adjusted percentage the basis. in of this on Non-GAAP revenue $X.XX net or a compared of year-over-year for result flat million million compared million $XX.X an diluted was last per $X.XX quarter million positive period a in the year. per last $X.X or was to a income $X.XX for our or or reflects net year. which consecutive the quarter million compared was $XX.X the same of $X share quarter income loss income seventh to share basis. $X.XX diluted same was the net share period Adjusted on $X.X per to quarter

the of in in $XX.X same cash was increased operations last of of million first cash primarily year. of the from use inventory driven purchases. $XX.X The our quarter cash compared during the operations used million use quarter We by to

inventory contributing from our half for decline expect year, positive to towards in the the XXXX. levels back operations cash returning We of to flow

the $XXX.X with ended cash We million and the quarter to short $XXX.X at XXXX. deposits million term of equivalents end compared cash, in

remains cash generation balance strong. sheet Our and

well capitalized and identified. capture are to opportunities value-enhancing market we are positioned they as Specifically, well

me turn the outlook our and to let term. for XXXX Now medium

cycles, buyers’ revenue ongoing as the and markets, recessionary for challenging full continuing behavior. our year to updating longer cause likely first our quarter our are purchases, visibility to We much and Based expect XXXX, concerns macro end results sales current most backdrop guidance follows. in delayed we reflected and inflationary of on overall persist of

We are now sequential million revenue low between to raising $XXX expected be $XXX million quarterly narrowing end, range the to with the growth.

While are see the second continued we experiencing second expect notably growth will in still we in softness quarter, the we higher half. that

second year in to From gross perspective, XX% a to of the be range year-over-year to improved expect the XXXX. of growth with margin half we XXXX continue XX% full in

margins We to over next XX% expect our back get year.

of operating to approximately $XXX in be million. In range the expenses XXXX, to we million our expect $XXX

We expect year. full operating continue as X.X% expect operating the range to In unfolds. medium margins to the double achieve margins non-GAAP our to of digits for growth to in plan be we X.X% term, non-GAAP the

expenditures $X.XX per to of million $XX GAAP a to $X.XX range to share, diluted diluted year year. to per the for a Adjusted to EBITDA of loss million, the is $XX anticipate for to million range non-GAAP full to expected We the are and XXXX. in of or $X.XX net $XX share million income $X be of $XX $X.XX million Capital million expected between $XX year. $XX the net million $XX to million or for

healthcare revenue innovative cash by manufacturing EBITDA further from free flow. our We would the annual By adjusted over expect term. driven billion achieve non-GAAP XXXX, our XX% and surpass to organic some applications. plan into financial Starting as our deliver to we also for metrics and like we to above penetrate growth we over growth $X XX%, in with we margins expect engines margins key to expectations provide XXXX, positive medium gross

term are will stronger. longer revenue be expectations, as grow, the these even term and we believe medium results note continues that Please to

in We remain are our the potential, an encouraged to can issues we growth impact. level with by global customers, our will engagement of continue that and monitor confident have

me Yoav? to Yoav back With remarks. that, over turn for let the call closing

XD printing our today’s dynamic continues of appreciation adoption and closing, In navigate grow. we environment, for the customers’ as outlook even to

and the accelerates. portfolio to materials, of have lead in additive at software through solutions as company We to to manufacturing shift and challenging hardware, expanding positioned execute the times an scale

give a more and to to bring chains, very brought the because have being industries faster, real, market in customer NASA past proven value products partner Connectivity, our reshape we products leaders than levels and supply strategic consumers into higher and with personalized are demand TE the Mayo as We Toyota. at are to to the like opportunities across Clinic,

Our and value. relentless to for relative profitability execution shareholder is on continued and ongoing focus outperformance enhance growth expected and drive investment

Operator? it open let’s for questions. up that, With

The questions. you. Thank [Operator is open floor for instructions] now

from go Credit question first Cross coming Shannon Suisse. is Please of The ahead. today

can give and you gives this curious set dollar and the has - I much and to confidence say target in for remember--I achieved don’t billion volatility, taking number target. us to you what to then not industry how the mean, it’s very targets question. generally to you achieve it? least, Thank of specifics I caused mix granularity your that you as more I’m behind just them, my I’m curious, so revenue going came that you’re know, able to be past or

Thank you.

Hi the Shannon, for you question. thank

is that yesterday. something We a company. on are call quite envisioned that we saying structured we Nothing are on based this

we a more based are think important We very we at building important quarter the the above have why and what and term delivering on that’s that’s are are term we after expectations, three-year long is the strategy, quarter planning foundations, Stratasys. and long quarters but

there why outside operating $X have and are with It three and income of technologies. to achieve and putting years, for XX% new keep so are it’s margin, in much that - the do we last is Yes, above with billion in are it, the in two we we built the or technologies, EBITDA. is drivers foundation each gross it based is two grow clear That’s half to new room XX% growth confident one on above building a target with a remarkable there there. still of the but years, very to double-digit which number three

about all about but have talking elaborate introducing, the it, bio software the automotive and added our we building parts, high time later are tooling, When billion use these to are talking the amazing $X the example. get we we’ll course going fashion, with when are and huge the cements platform on core open, now there. five-year which a to to that software because together are cases get to the the into materials end maybe and software, of software, delivering we with plan, a in profitability, we the base, NPIs are our and good The technologies which we TrueDent, you profitability. monetizing put use of details, building, printing. technologies, not is level installed position our like we a new are FDM, and to unique introduce are we New going The value is and Covestro we the

you. thank Okay,

the expected. near bit much PxQ, how is utilization, you was better can changing, this the in using are about tough materials wondering part you talk what’s Can you that driving more than are a pretty assume usage of I It consumables? is Then talk term pricing versus on materials? a as did compare, well. a of of certain important pretty more the $X billion verticals consumables maybe that, Just how because

Since It’s to the to completely part we our a use is of much end machine of are drives than and every drivers growth year-over-year, can parts for to prototyping. move $X an of mainly is unit has an billion, growth part manufacturing, and the utilization different for essential the The this sales essential how being used reporting overall end of that a consumables of this year parts, that machine see being the in we manufacturing. use used end profitability. because the utilization terms economics main are the went

now Covestro of our A that add in a terms to fantastic good portfolio. is level we use this match and the the consumption, high dental example matched--it’s portfolio hardware to have is is what parts, it of - end

manufacturing, know, ’XX. of FDM We and increase are material the optimistic quarter, in we in also--you strategy ’XX in going and forward also given as sales very origin significant saw company reflection hardware, an and of our a the on and it’s consumption a material, hardware this

materials. It’s aero. value investment, using are buying are many, machine auto, You the a our they we term many are can in - customers that delivering our reliable, and different it’s a see consumers it’s big testimonial that and long of it. are our verticals Those

Thank you.

from The ahead. Troy Lake of Jensen Street next is coming Please Capital question you. Markets. Thank go

gentlemen. Hey

the congrats all, good here. on QX First of

Thank you.

there and I of I’m any to what contribute guess would year Covestro material you you revenues think was quarterly a them first basis, going all from timing? confirm in the curious that’s for QX guess be if on could and helpful. I

so the consumables. whatsoever onwards in thanks We question. It’s into the the in have Covestro going to deal Troy, contribution impact full April, closed QX; is early no of our however, largely QX for business.

forward, guys, going organic love you to Ideally materials the it key such area is we’d focus see guys for profitability. of growth a Perfect. on since

to a or Just thought, think something about.

I HXXX, I’m about My status quantify also, saw you just there comment customer. maybe know the talk in HXXX units? other question you’ve Yoav. multi-customer would be or curious, Can in nice got multi-shipment just others of the I about the

machine, A say parts bureau The is Yes, the HXXX parts, professional great and fantastic that service I completely, automotive. would Germany question. by one example end for thanks the use and it’s is way, on in then for focused large use manufacturing end bought them, Götz another to a Maschinenbau, the users. XX% four for of many

rollout the we not However, that and you best are on the system very the The of that is a make SAF to of in less sure slower impact part deliberately--we happy promise, both complex believe and that industry cost the a quality conscious our per the it’s machine. have need with the have delivering doing we customers a it. position important we part we professional, this a are and be to are

that rollout, way now. the are we funnel planned better HX units in of there expect seeing we also the we out out, rolling are the Given because significant because and it

Perfect, the okay. good up luck. Good Keep work.

you. Thank

Craig from Group. is of you. next Capital The Please Thank coming ahead. go Hallum question Greg Palm

this today. the results, the for and Congrats Eggerichs taking on good Greg Hey, on questions. thanks for is Danny

maybe gives right have second now floor your you and so market of guidance certainly visibility there, perspective. half? with have more a push-outs that of specifically, with over you what guess in in confidence weeks, range, seeing I the from kind just and in what you your some recent raising some increased seen the what on I’ll you noted hitting peers Obviously you’re out maybe uncertainty, customer start and what demand the and

it’s I over some the luckily GDP terms inflation, sales funnel challenges high engagement our rates, that an two We the wouldn’t of that especially the last longer, share helps this is therefore do quarters we better for cycle, growth, macroeconomic listeners managers demand. we see with executives, printing levels see of interest we had don’t with condition better [indiscernible] engagement, sales we interesting otherwise do XD guidance, environment, are are in need with to are confident raised everyone but to of and enough, growth, cycles that’s to the customers why in and is high. everything. That’s it. why somehow the and we we which see top starting balancing about HX But and the

Overall, strong better of cycle. challenging and with environment somewhat top balanced but funnel leads, demand sales

to just strong came quarter, than opex, expectations. opex leverage in Maybe in good. operating bit was a that’s Okay, pretty lower switching the

year. about throughout reiterated think You of the a cadence should the implies year opex, in step How the and the full throughout for remainder and we up guess opex the that year maybe forward? guide I QX going

for you question. Thank the Danny

As you day-to-day business. we we of opex full our, the management I to for increased the revenue. XXX while XXX part year believe, reiterated the the guidance the noted, the That’s of on

opex. no tight minimal the very the the infrastructure built with to are throughout right on We to We’ve in increase opex. leverage years growth

as overall to opex this the revenue. we lower add lower--as Now, structurally our infrastructure of is the grow, comes in because will business, QX a Covestro but a keep it percentage, even a employees small way the opex built lower with quarter with addition as demonstrated we starting and naturally

Okay, great. it I’ll there, thanks. leave

ahead. next question is Thank from Loop Please of you. coming Baruah The Ananda go Capital.

for guys, question. Thanks afternoon. taking Yes, good the evening good

Hey.

could. if Hey. I Two,

door. see congrats on How velocity of out the On there the getting the the ramping philosophically? you denture the business, do product potential

Dental to so huge the specific a focusing Ananda. right which buy. dental a of cases, one to the complete people a we market. and restorative we offering on for us. in us, our are dental also you and the Thank What the are segment dental of market. our which because will here disruption disruption have huge current we for use is is It’s to believe us question, for be the because capabilities will for solution potential, be with is It

We’re about click, are in $XX aesthetics simple, practically. higher billion billion which currently dental, is have we It’s FDA the billion solution only U.S. overall a intensive, only with $X bringing the market, which the dentures the aside $X quality, a better put talking a labor world. and rest approval, of market aside--where with a we the is put

a on in between around solution, think three we - suddenly We’ll our about step, and to start the than see that sitting to visits dentist one to clinic that of sure see building he showcasing step less one average. foundation, needs it is because in his them the patient by to times three revenues it, the By dentists building HX saving making initial way, because are are build confidence it. the we

we we DentaJet. unique of ramp the the introduce that end up in product it unique keep innovating resin there. are XXXX--sorry, to XXXX significant impact and we last expect at and HX, So It’s and during JX going this with not XXXX,

it geographic-wise, for you’re like the plan timing other a geographies, When what in sounds What’s Thanks those of the--I guess, U.S. European think for there and is and rollout would be? we the starting that. a

Definitely no a then The course. The is and doubt, market there, we is Asia expansion from not of too have far and next plan. plans. Europe, global one now, global it’s

people, are appreciate you Do sort it. the into market sales selling specialty there? like do market? dental the of or look I one equipment guys--what’s have One there, product you into Awesome, you plugging how last Thanks.

we’re from with the world. the We with traction consolidators multi-channel institutions plan dentures, very or amazing clinics have starting of the a their dental in combined plan and U.S. work building the of confidence with of different with rest to going for also labs channels, the through side. go-to-market those Then,

product, go-to-market we our with distributors also and exploring a the of opportunities currently are have combination own specialized such because We a development largest business It’s dental. four. it’s the in

Thanks you. much. so Thank

Please with you. Brian from is coming Thank ahead. question William next Drab Blair. go The

Brian. good This Hi, morning. Keating for on is Blake

you and this you markets ask, strength have guys a you’re you what other to of pullback most dental, end but wanted in type macro just seeing excited could see end expect? about about a other if markets, across potentially the I you are lot than longer markets continues talked that environment what

Thank great It’s problem and to enthusiasm many a We for where much see them. our across in verticals, focus. because so so are you we of question. question, different the strong is

automotive fashion Just the - lately, dental, dental, with course building results for to we’re about business share but and are optimistic fantastic with but automotive. our We and ones now, We not that the three then of the strongest medicine demand us also CollPlant. fantastic can are position results. of had unique government-slash-aerospace road, we see see down in growing the aerospace, I years we - five and a partner, very regenerative course

trying to automotive, specific patient I’m is solution, dental--medical summarize, If medical, the also aerospace, and fashion.

under they’re again think how that color you contributing you Got maybe strong about about should years Then now give talked on been a to have a else lot can of lot that? new growth, if the where products, seeing revenue and or you. any new last products introduced, products, dental, you are but few we it, thank for of new demand what

Literally leading new, I solution, machine share significant now selling course don’t carbon new. we go can you together but three the JXX show and optimistic. you new Origin things the to are selling since FDM, then and product, trade PolyJet, that to our I’m the introduced fiber the we see and are I the and We for of like new resin that joined, can the liquid per portfolio. specific are machine, which go the If very which the JX, we of I replenished share of demand, most substance can data well technologies with and and Covestro, both see RPS, we the are any completely

works. and our see so put it completely aside, new case we with with in moulding see see drones. automotive. new like use use forth. replacement, We We use new cases cases cases and so we started in all Origin only This aerospace, injection But on focusing case. use and on is use by this ago, We new years use that two are strategy cases, a

it, I’ll Got you. it pass thank along.

Thank ahead. is Needham you. go with Company. & coming Ricchiuti from Jim The question Please next

about I medium Hi, the targets today making the you for target for a margins thank targets. year? make term term are for of third out you. of guess which of and ’XX and medium just A your of us last the What the question Thank I’m gross manufacturing, ’XX? at what assumptions end you. for that business sharing looking kind what, wondering you’re was, assumptions with you ’XX on kind for do for

you the Thank Jim for question.

that starting don’t one the is mentioned, we from you cases, use end manufacturing. of the specific is of for We third or coming but percentage, XXXX future business share end As point, expect drive the the portion of a on to increase gross positive with increase on and margins, impact it the very of significant that to the XX%-plus consumables will significantly, gross together That’s margins. our scale. the the

this Covestro, this XX%-plus the software of our of just gross high out in bring comes the so scale, us combination margin different streams, to margin. all combination highest comes that that will of of of gross manufacturing probably acquired, that journey mind to this with the the gross Keep we’ve with margins, the

progress next Got years. to two question. to be it. next the That could actually the bit a one segue about you about and should little wonder over the this we the software in how business thinking talk a if you’re is making I business

the thank you Jim, Hey for question.

but a the unique making platform, invested business. we focusing significant the are have progress unique two years while It software. because for We very took on of us because we are MES approach, not are new the part in we a very investing--have last in a

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you. Thank

answer back to of for management turn Thank over and us floor the you. additional the would brings to end to like any That session. I the question or closing comments.

Thank you for joining us.

updating next again you forward Looking quarter. to

Ladies and today’s This concludes you event. for thank participation. gentlemen, your

the log day. this may disconnect webcast and at You the of rest lines enjoy time, your or your off