3D Systems (DDD) 27 Nov 242024 Q3 Earnings call transcript

Greetings, and welcome to the 3D Systems Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Mick McCloskey, Vice President, Investor Relations. Please go ahead, Mike.

Hello, and welcome to 3D Systems Third Quarter 2024 Conference Call. call today's on me are Dr. With President CFO. Graves, and CEO; and EVP Creech, Jeff and Jeffrey portion this call. webcast will The of refer that slide to we presentation during the call contains a wish Those on of presentation section do following may Relations the on Investor our the who this the along so of slide to phone portion access website. discussion as as and only forward-looking statements of described and this will to questions your responses following today The reflect views slide. on management's include differ may Actual materially. results

impact potentially recent our results Additional SEC, information quarterly could about Form press report our that in reports included and including annual XX-Q. latest and filings financial our Form recent factors is the XX-K on on our release most with

slides accompanying webcast, find call, these measures, disclosures will we non-GAAP this regarding discuss additional this reconciliations measures. measures. will GAAP and with In comparable including non-GAAP you During release certain our press

otherwise Finally, our comparable for the stated, in be will comparisons XXXX. against unless this results of all period call

With remarks. our that, I'll turn Graves, for to Jeff CEO, the call over opening

Gap] [Audio

Key closing accomplishments the detail to which questions. then greater happy Jeff CFO, comments in QX us our before to we're ask take call our Creech, outlook. through with take on After and the announcements. I'll

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that It's simple. really

systems, were the slipped anticipated installations slightly in late essentially This as targeted weaker had for flat we into consequence, on which were acceptance new a was As key quarter. a a of few fourth basis. our than revenues QX, sequential

rising the of sale growth, the by sequentially the a utilization is the base, consistently of for customers. prior Consumable of better beginning QX. sustained new still year consumables the X% year changing as our versus since trajectory quarter while the the our approximately printing indicated installed and sequential sales to what of in rate has improved is third demonstrated is sluggish, growing systems XX% materials from grew that recently However, most

In a very on similar been trajectory. development a robust application in has interest vein, new

year have capable As engineering you groups the Year-to-date, largest engineers rise. and Applications customers we applications These of group many up one for QX continuing directly printing. the both activity world. strong monitor polymer know, and The XX% of and directional with performance of application applications. metal from in XD on needs. most revenues production to indicator in we new growth potential work We their new experienced XD for our from are Industrial our printing interest in continue customer indicator this last as in growth for of a level a is

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both compelling needs and which strict economics their do requirements, meet subject our printing proposition. are value regulatory the and with of of customers, these cornerstone often is For metal to a to ability polymer solutions to our so

to cascade equipment AI. to power data the operation. that critical These markets being about investments made their to are I'm equipment of directly trillion-dollar in example of centers to these driven an from As our targeted days semiconductor provide several markets, generation into the by end needed excited those ranging investments particularly manufacturing electricity

the [ can a metal extremely as components well creates capability so performance placed our combined GPU center printing to surface complex the a essential example, our data is high-purity advanced purity printing to number of modern near capability combining through heat challenging a processors silicon operation. and heart chips or to in with do use very ] in of copper center of the with environment. to management that life architects, with of manufacture in data advanced used and both extraordinary nanoscale manufacturer microprocessors, As heat system. as data elements keep effectively removing environment GPU, the systems the way XD absolutely inherent effectively from powerful of the high be ultra-high unique their gives copper means is in of just print of the One the X the center an area to the cool

consumed for Given growth capability provide this increasingly power avenue just focus in of the the for many data now countries, centers that that future. one our of small will is exceeds full we our semiconductor by this that believe ecosystem meaningful the example increasing And one valuable. company cooling on is

market be high-performance racing. continue is excited Another about an is of example we FX which to automotive,

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by offered high-resolution Since the This of take is family we PSLAXXX. over higher high speeds an on printing focus new superior I replacing at single-point a the This print high-resolution medicine blazing projector associated first platform projection with combined what printing which a me a very precision surface field projection SLA the let a flagship mentioned platform printing laser will technology. moment work the with of with be the system, projector regenerative attain quality full much bad latest our our a in technology it, of system. speeds. By is photopolymer incorporates to our outgrowth systems, newest

would competitive XXX. X as run to simultaneously to achieve the have the same closest solution machines fact, output In today X PSLA

for on From was attribute another over use and growth Figure a platforms this offering X lead platform basis. addition, designed which the standpoint, In By is care, the meaningful this our to as XX%. health in photopolymer performance We solid third a recovery dental, we a will industry of part to system. applications. believe care a originally health this developed personalized system quarter workflow, up and XX% almost entire forward sequential PSLA in advanced with polymers in well exceptional of a factory portfolio strong the impressive year-over-year complete growth was our up

future the applications in and of margin volumes. gross driven third printer a broadly increase predominantly in both than in inventory was had by From softness reserves lower factory quarter anticipated, softer by utilization, standpoint, products an we excited health we ahead, about strong continued remain business. the this care momentum our very of of our the have we our business and Given portion and pipeline new driven

for inventory Jeff Creech will operating more you take But margins our after reserves, recent third quarter the were in specifics with roughly performance. in through detail line normalizing shortly.

our more time to benefits are extensively greater innovation representing a our continue our is realized for and invest OpEx few of We business margins a actions for are influence the just restructuring fully declining, million historic in target deliver improvement. R&D have a moments. our activities, continue mid-XX% our positively increasing once year we while that on to our fueling restructuring with to More the Operating expenses quarter in expectations. We're product nearly of can overall initiatives And a company. sequential that $X performance, consistent this started model were pleased volume. in-sourcing expenses or with over which

by leading that environment While even goal. seeing, profitability, greater of degree we're efficiency we revenue also sustained operating clear which that of encouraged the recognize now indicators operational demands gain an we're to some today the we're our is in

that such, in operating remain this $X within to As maintain majority of million this G&A. expenses our we improvement the with quarter lever reductions operating the focus mind, our a in control expenses and largely goal coming first reducing direct With of environment. below for a in strong

growth, future we to on to reductions working we've cash target healthy a been where a Lastly, generator reduction XX% as to ourselves with our the focused a remain entered year-end. balance we deliver our capital position for Today, optimizing of reach year. on inventory throughout goal XXXX by inventory as of pace sheet, we

the quarter, leaves rate of the This Over industry. of prior a prior positions us from company of from any significant cash our on quarter, one in $X the balance million the course our declined sheet strongest quarters. third improvement with cash

few I'd take our across On to progress on to road a X, historic technology moments year like reflect map. Slide the

Systems of and printing of this is but QX metal XX our commitment, company and momentum to And software reason will outstanding embedded entire enable XD last materials, printing is core our months, momentum of materials as from the challenging element year performance. as capability portfolio of our it's of 'XX printing is the the Reflecting a deeply us dedication our with you mission-critical XD first nearly production enhancements their R&D through customers this this that sales exit last most X to new into unprecedented heard inventor not needs. culture, year and in this industry, the witnessed we're peers, metal and since different an and technology investment maintaining as fundamentally and our and refreshing assessing the continue meet from printing the focus culmination polymer in times production the innovation the platform that before the primary birthed their over of You've only This 'XX. and contributing polymer of This a move company many of than XD year to alone. years turn pace environment even DNA. XX of our platforms we software that represents innovation

maintaining application expected a targeted standpoint, which casting and This over rocket we casting reach quarter, to nearly other QuickCast applications. while third investment delivers up traditional essential in high-performance aircraft to investment of is inherent XX% years. for It's of XX cost a Air geometric usage market. and method of time and during in the the From billion some in next casting announced reliably the cases, reduction Air, complexity methods, of design. large high-precision a $XX is systems fraction the pattern QuickCast key the propulsion providing a to advantage unlimited virtually resin

our is in demanding for and result at applications. shorter lower cost most production higher for performing components their The cycle customers times much

our our strategic On with the milestone significant Industrial partner, software Baker front, announced platform in Oqton we a MOS commercializing Hughes.

Bakers optimization. enabling Our is now facility floor software, full additive provide to automation, which factory in Houston, on-demand is Texas and workflow integration, manufacturing manufacturing utilized control

providing in to a points XX% scrap active costs and is key hours component engineering during due reduction per XX% XXX reduction implementation monitoring production Its of actionable savings in with printer production. time as such annually alerts engineering associated of real-time proof an

care. health to Turning

of business growth. another Our meaningful quarter delivered Healthcare Personalized

orthopedic see $X we're that few surgical During surgical Smith spinal announce next to market over new FDA-approved in We and in of human replacement for our expanded with adjacent this, the approvals to very acquired. our in as expands regulatory Europe patient-matched capabilities exceptionally highlight of out in capabilities addition. a This key to to trauma ankle in area quarter, our much body. expertise and into accordingly expand enthusiasm markets, ability in needs personalized in patient-specific total years. were the once total anticipated solutions health also our service billion applications solutions ensure are orthopedic guides well planning investing Craniomaxifacial our and the ankle and patients again opportunities to to address to positioned growth elements portfolio, solution about to elsewhere new & We're such solution. our this our These in we company. further our with Today, pair our the expand clearance we're Nephew's growth markets time rolling expanding our surgical FDA are pleased the reinforce this grow leveraging

For for activities, our key dental the a market. is the engine multibillion-dollar growth future dentures

multimaterial first-to-market FDA for our In an denture clearance important solution. milestone, in we single-piece September jetted secured

unparalleled provides of offering toughness experience. with combination denture patient unique aesthetics for reliability to outstanding Our offers ensure long-term enhanced

of of launch FDA. an Jetted clearance the restorative following As Glidewell workflow devices world's into previously hit who's with dentures producers one ground excellent our dental partner running implementing the largest found its with in we the shared,

We're sales environment. enter technology the in delivered months. excited balance to see difficult up transforming been product our we've market my coming a tremendous strong progress the XXXX portfolio. sheet, undoubtedly, introduction, To But this wrap our has with

of gave this an AM journey held us the announcement next, product year several new to was last Form largest just highlight week, conference with the opportunity the of introductions. that

novel filaments platform. material CNC from In pellets, the X and we XXx to extrusion having world this extrusion lower industrial family, EXT inroad XXx of around it, to roughly the we our and costs XXXX family traditional accommodate speeds The customers platform, platforms, our the competitor, polymer to is our metal interest Titan offer our can market. addition into and newest we closest see our and XXX, in PLA technology. that solution of which Delivering all provides extrusion hybrid the than as its the products. includes addition, raw newest one approach increasing machining, XXXX highlighted faster call printing a for

also and setting additive broadest we've solutions stage materials in a the out, of the and new the of platforms, expanding us the adoption industry. supporting MJP SLA, further things plethora ahead. announced to Rounding in for increased years drive our portfolio SLS

I'll on Jeff? our to So with Creech, for turn quarter. that, over CFO, more Jeff the things

on begin Slide Thank you, with summary revenue morning, good everyone. I'll X. Jeff, our and

macroeconomic offset revenues million $XXX.X of by partially X% dollar primarily million roughly flat impacting continuation quarter decline system from were sales. our and predominantly orders year, a Within large sales, $XX.X segments, sequential outside XX%, sales. about revenues On driven in of impacted by and revenues few were driven basis, by prior declined pressures growth in Industrial a of hardware down quarter that Third by fell materials close. third mostly a printer our a

our million X% for segment, revenues were grew from In Healthcare quarter $XX.X and year. the prior

the was business. personalized growth dental just healthy a in in primarily rebound health Jeff third mentioned, by care As quarter a driven and

to let's Now turn Slide X.

the inventory quarter, to an for was recognition. obsolescence benefit $X margin a for medicine result the third and in of XX.X% taken margin was third of gross to in prior for which included impact approximately inventory related increase significant reserves included milestone XX.X% quarter. million. the quarter representing XX.X%, would the Non-GAAP margin Normalizing in a regenerative reserves Comparing year, revenue

milestone impacts been gross the Excluding prior respectively, the of inventory reserve decline increases absorption in sales the with recognition would have volumes. unfavorable driven by lower XX.X% XX.X% given and current year-on-year primarily margins quarters, and and a

$X.X prior expectations. quarter expense. in third Now declining let's operating XX $X.X for operating to but year, was Slide Non-GAAP million, $XX.X move for the million from expense our with million increasing line consecutively,

onetime tailwind other were associated nature. more in As an addition important that benefited quarter in incentive compensation expense reminder, to from the a comparison with benefits prior year lower

previously Third targeting below additional and the actions, continue OpEx quarter. quarter we an operating million sequential restructuring expense reduction, fourth discussed for benefited to expect $XX from our

Slide XX the million by discussed. adjusted the the EBITDA in just performance volumes, to We quarter I profitability P&L. sales Now reported higher primarily up million $XX.X of was also from our for EBITDA to The significantly for operating as the quarter compared recognition lower milestone $X.X margin third expenses, finish just of business, as same gain prior last impacted a ResMed year. adjusted Declines to year reflect and mentioned. revenue negative

profitability. continue towards would in goal the expected on my with to quarter, an adjusted our commentary in as we longer-term also move EBITDA of expect OpEx we fourth improvement line consistent In sequentially savings

a third we year. prior associated goodwill during third share and quarter includes fully quarter quarter, of interim gain the loss For of compared a other year. $X.XX a in the per this our this year. in $XXX prior per of compared to approximately $X.XX of of charges This per diluted per the the share was a of third share loss loss $X.XX as noncash to the testing Non-GAAP of $X.XX long-lived of and share reported million with impairment result valuation assets

the balance of cash the Now of We $XXX XX closed million of to to $XXX equivalents second this for quarter with compared quarter Slide the sheet. cash at the million and year. end

capital look represented cash we as expected, as our performance improvement to in-sourcing As an particularly driving in management, down actions prior inventories working from of result continue a years.

down product with debt previous and have critical by notes R&D As on calls, our noted combined on our X% our year. releases XX% to repurchasing QX new focus for to drive over proactive since a supporting profitability. reducing expenses of convertible highly fortifying position been the last investments in continue reduced keen we've

forward, to as I'll XX. my view in source quarter. Slide Looking inventory the a we cash on fourth continue remarks of conclude

across the we when emerge As additive consistent environment, morning, the pent-up this engines to continue applications stronger emerge fueling returns. you through driving current of to and to from our cycle our been a make development macro an us heard years new strides ahead. solutions from portfolio R&D product stronger in We've tougher in demand for acceleration economic

we for our However, follows. are adjusting guidance year full as XXXX the expectations

implies to year the expect mid- single-digit first a second revenues in from percentage of the to We million, half of which sequential half range $XXX revenues the recovery million full high between this $XXX year.

to a more customers, uncertainty as in reflected of benefits given historically inventory we timing the among the higher few expect management capital budget of spending, has the year. indications as related quarter be term fourth modest ending near the well a While degree year-end current adjustments to

we as able range improve gross full to our longer expected of our XX%, volumes capabilities recover, to margins reap be actions. impact are the believe to given continue the we mid-XX% as are we term, benefits of the and the adjustments to and reserve XX% short-term that margins range gross year in-sourcing in-sourcing inventory will in Full of to integrate restructuring

expectations the million maintaining OpEx trend the benefits continuing to are quarter, We fourth its deliver of our or of $XX sequential previous below and restructuring. reflecting our at for improvement

As a operating reduction in to primarily sequential expense. EBITDA a the on adjusted improve is basis, expected by driven result,

Jeff, I'll hand it back you. to

Thanks, Jeff.

So to efficiencies. future behind company maximize we cash to the the for operating beginning we've maintain to impacting us. able that our been industry are our With believe negatively extent now trends position, our broader restructuring the investments strong consistently move greatest core while our to macro

are believe well Our determination investments and accelerated as us inevitably and fundamentally the position from strengthen. we end for growth others key profitability industry, R&D in to support many different our markets

explicit will we sustainable providing beyond us, XXXX of to of drive much looking our so, we work will business evaluate is doing not to from be While can year, will strategically In comments meaningful value continue deliver this I on actions that incremental behind costs our and stakeholders. our yet, remove believe critical as R&D profitability. all

Kevin, questions. So for the that, open with for please? the now you'd open if we'll line line us,

[Operator Jim Instructions] is from from first Needham coming question Our Ricchiuti & Company.

of little? the side. understand then help maybe working implied your a scenarios. a in range that you left us with at guidance a help it month and wide have surprising relatively And through that's you of there's maybe for little I'm could looking the material revenue driving on mean that? hoping only But maybe QX, I a So some understand like it's quarter what's follow-up. us that if customers sounds quick I your a potentially inventories could

X Yes, Jim, I factors. there's think

inventories. want to shape, 'XX it the think the exposed political the inventory they our -- geopolitical wants in overly but make they changes and with don't customers. I environment the of their in coming be to skis sure the over management all good in clearly with One nobody They're issues, get on out is from

managing them. quarter completed customer much willing quarter, unknown what So and but be delays I in them of spend Even of problem, think aren't until The as how at if to massive quarter really fourth following revenue late it's certainly, by the those Jim QX which they be saw CapEx been they'll the the they'll rate. lose in on CapEx some installations recognition customer. is many we don't big a in

in up is normal quite of midpoint. some ahead there of a on would possible lot to our be be quarter POs. but timing in early try their had quarter. a certainly if not a I it In their to for as fourth times, to done given the line into to -- So -- now, versus guess, is quite -- they up want some get the and issue capital following we're issuing for what expect that us slippage at to trepidation, in capital quarter quarter planning. a norms. bit was this I ourselves. us I try bit as get seeing of Right the can of historical spend there of Jim, spend. don't them the out QX, with there just But and not end But slowness upside

little a why on that's a and QX. So you'd bit bit will, in more modesty, little of a see wider the rate growth range if you

it we up up are So those. makes we and sense. If inventory and will be But CapEx, unknowns, that buffer for nicely the a believe just for want management quarter.

helpful. all just XX%. because end guidance? Is absorption And a case come could QX this was low for the little margin guess, maybe the that in Again, unfavorable surprising XX%, revenues a of of X-month XX.X%. margins we implied the gross your gross your given the to if guidance at turn I year, It's

factors, Yes, Jim. there's X

them of that, is one of is factory absorption. them One

in is managing I'm and materials, sales, we X little on concerned be uptick customers -- I'm and an printer inventory other see for a good because crossed utilization mix The the unknown. will should and materials from it's long here, a an standpoint. fingers really that's term that keeping my

utilization factory and see So still certainly a will a effect, you could effect. mix you see

in there's for lead of to on say modestly margin gross both And quarter. a X them the I'd little that. So factors the

in be drag it's will real hopefully a on from -- gross as done, margins. we've again, in printer us work printer any QX volumes dividends uptick manufacturing in-sourcing rise think, the a for pay would Nicely, right 'XX. for now, sales I in standpoint But

from coming Palm is Greg Craig-Hallum. from question Next

going profitability Greg I it touch Danny is know maybe kind in you're know Eggerichs to commentary, about some yet, like too but today. in into is just breakeven for Or not ahead. early tell? about be as How on about said we something Are profitability, maybe 'XX to be we it 'XX thinking release, profitability? towards kind can just you event? was trajectory a of it quarters thinking on I thinking This that of the should

Danny, of Yes, the art it's prediction.

they I'm that, So are encouraged 'XX. put application about. of how we to If it. thing. behind nice Nicely, timing by money real want question I for very the are number applications the their capital things see have customers really a a factories. these It's they could new in no issue. quickly It's in talking a lift will of in revenues spend they doubt a That's put good

So in which helpful. will be we're rising will 'XX, be hopeful revenues

improve. will be Factory inventory have for utilizations we cash. The great then plan reduction

I So really And think those management, have we we will which positive real 'XX. all in I'll for factors. are have opportunities help be with -- cost you, candid

profitability. you'll can't see point movement from you EBITDA and to toward swing 'XX. but I you'd significant hopefully, in pass, a things see If at So give there. in think you'll movement a to the significant some positive come during see number, growth And year, I those

I'm encouraged quarter and put we we'll continue. So it's they if But to too won't the get results. guidance our tell, out to we trends, fourth early by just see and until

the AIG, Yes. That makes group. touch innovation if we application total the sense. on just Maybe can

in was like strong Sounds the really quarter. it

when up cycle that where about eventually and turns, Just how is be thinking to the should opportunity, opportunity contribution currently maybe that trying maybe going forward? we size

I are would us AIG, are to you revenue generate -- these so we them. paying from for develop Danny, And applications with obviously tell customers the their

revenue stream So there there. is a

trend of stream. The important is revenue thing that the about the

for not growing, may of But customers them it are new factories. highest if may number be and choosing growing, help it's picking very demanding time more it's more on applications. the it and not the can highest a we a if that -- it's be P&L. they're overall and sure actually, not material those So to their value our develop carefully make to develop we're components And volume, material

here -- in XX are they're in we to proud industry. of investment the tremendous. applications semiconductors AI believe, of, these tell guys in direction interest to and by, have overall this new is working things, fabulous. metal of I'm of And think is use XX% the for us nice positioned and they're AI. the that's quoted in I think, [ And in That, I best going important. industry . And a we industry. driven be biggest the a primarily the applications have certainly, I this of it's revenue really we for way -- anybody The all that our is for and business. on swamped. centers are data I It's I related the amount in that I side would is think we So I you magnitude the believe the the it's have -- the XX-plus biggest headed very not mean ] rise broadly

ability very heat capability think to is very, basically print I positive. the heat conduction, sinks,

number goes can So you of performing machine. all for machines, parts. all consolidate are the future parts to could the as make expensive large way extremely flowing in manufacturing. We can down equipment know. by printing semiconductor applications might the some that through These them them. see a in higher consolidate those. And number We XD parts, of the We you can

equipment us. major semiconductor we've working all with manufacturers of the so got And

centers using have We people data working that and us. GPUs with are

copper it incredibly It's frankly, seen the away out copper high-purity on believe, world. In heat and a can heat was you more wish that sync was but this the conduct other interesting. fact, put efficiently at it a on AI, have slide any I heat I I'd would quite than website, sync formnext, in designed using

markets high And whole like because payoff that very they so supply will chain. about components, are which we're help the tremendously excited valuable

the material on because XD because but I AIG of terms it's trend interest the So customer really is quoted positive in not rise impactful the P&L, in printing.

So I can't is revenue timing positive. standpoint but really the trend from a specifically, on help very you

Jensen coming question is next Troy Fitzgerald. from Our Cantor from

thought was I I a kind lot guess, positive often. X up of talk I that thing of [indiscernible] Jeff, new was picked about at

just give You in it remarks, kind of -- could pre talk but and did [indiscernible]. update on general kind you your in software of an mention us

Troy. a and I'd the there, for call, thanks interest too. And X thanks Yes, throw for Sure, about third. the Yes. you things at in asked Formnext, and

vast software entire the production parts monitoring, real-time materials not out. a and So Hughes and our to done tools tremendously on with on what we're doing [indiscernible] Baker that the seeing in workflow entire XD but drives with and we've platform, people the Oqton customers targeted improvement expert control polymer valuable XD printing. Acton, allow tremendous our required. will workflow, to others which the Baker raw us really the of can side, into the from XD us, the Hughes the what And Troy Oqton oil and we've for The quality Sprint And we're want is to the XD focused, but basically right and gas, machines integrate now feedback metal high monitor productivity and is software, workflow. now apply lines in that they the like markets expert reliability traceability like get

finished. to is you part from the and So setup time it part gives produced, it's time . full a to when it everything traceability impacts the

starting even parts. and Interesting use production, customer was -- prototyping how for printing feedback before this. you this laboratories a to whereas mainly into about So printing is with process the and it really demo now XD production we're Baker a Hughes also industry software making make true think from went XD as to of

factory of the monitoring Now so part. used of it's the job, much different production being -- monitoring the in so Those more terms in rigorous and requirements the actual floor. on are

progress. really Oqton's pleased I'm with So

with demo then primarily high make Baker broadly applications Hughes rolling that we'll reliability think it nicely to out very I have to industrial we're parts. other and

aero, medical make has energy, So anybody a certainly, parts markets, the productivity. that high to high at reliability

About Okay. questions customer a XX% the you X here. quarter? other have Did in

historically been dental, in I as queue it Jeff, our I queue, -- the certainly, of I'm Jeff, do. We right? but to I me, Troy, our Troy, true. number will it it sure So yes, front be in don't and in be related it's has -- believe, have have to would

supplier to strong. a way them, market. So to make remains that's be relationship printing great that and a -- continue we that The indirect aligners very is in key

and number queue, but we can of you. back So certainly the in a have -- mean yes, to Troy, I I and don't it's get

just expect the regenerative to Can next Yes. just about last business. and back, hear talk I'm when you the then but just you question, milestones? hit glad to

Yes, Troy.

wish think could can I The structure I which the talk is speed the now -- precision fine about and at some it. we print milestones 'XX. we both we'll in additional amazing. extremely see more

production in organs for to of We have body, human for applications. specifically printers the those multiple paths lungs. the design

technology I really progress and pleased am with for implementation the the So manufacturing. on of lung that

get I this, So a to to on that you position in talking United And to the in we're milestone. be time have believe about be on XXXX can hitting. we're expect continue partner milestones to speak we'll in reasonable we'll demonstration to line. human track to Therapeutics, a that our

it, advertisement with go Troy, It's technology are the can our of things more industrial a applications terms lot printers. And and of But that. that technology also to and bring to humanity. materials benefit the some generating going really transition It's with that great extremely into we cool progress. pleased for one that just printing in

PSLA this outgrowth the our system that's projection work example, For on VAT, a with direct of over regenerative. high-precision

for take direct projector a and transfer you industrial workflow. It's a that's hardened for if drop-in. applications So a used

real So markets. you'll coming out see technology our into on of our work industrial some synergy regenerative

Baruah question Markets. Next from coming Loop is today from Capital Ananda .

could. if I guess I couple, a

and health health of sort on the baseline taking seem softer core at the because picked of care business XXs dental the you've do of here's what in in say supplies, and sellout that understanding, backdrop the giving guidance But in in does as sort in a of be Solutions you're you if to guys Industrial continuing into just that supplies yes, a baseline up business seeing as Solutions And also then of as personalized we dental of both up rate. ongoing business as and the like Industrial this health low 'XX. high you care, structurally is you're so the of? to growth the care, XXs, is really, in first And a backwards does from not there care also pick going about seeing last quarters, aware business right X notwithstanding and state pickup a of that look you're like health anything The baseline now the what 'XX, sort grow, should run kind kind sort and yet. question, with

Yes.

the and that, with on I'll a start yes. point So last

would be lead that better you of All a should look, say, year. 'XX to

-- flare administrations a unknown long feels tend down the change have we the moving the I but the not long are and other up to as periodically. economies in climate potentially calms that and world in as U.S., continue -- in wars think geopolitical direction these the the countries only As whole is a snakebit they bit in as

So platform in sales all moving the trends in sales which said, direction and are that consumable terms both unknowns, over the future. printer are of right the of

be 'XX. we I frankly. we'll talk cost opportunities, also, sitting when results, And QX announced think we'll stronger hopefully, So some about here real a got we've quite

in R&D. made are to our And our way. consistent got -- optimum in 'XX we've into manage we've going investments dividends now. more flexibility cost some a structure to been So really in paying we've Those

external think I also then So some within and the in opportunities real environment. the X walls there's

as it's call of In work and on terms terrific. The care, I business, we repair surgeries health a it, surgical great for is and the do planning business. orthopedic bone

same applications as the spine. very quickly the elsewhere, other strong body. everything We're apply. for throughout to gain below We're in We're it's continue as going to them tools because all the to We just the neck expand approvals the and we those strategy. body fundamentally continuing of clear basic grow on develop the neck above can areas and a FDA

continue I I may see So noise growth be -- quarter-to-quarter. expect or can to to

in business, into get it that We for unless time. see growth business. continue to to takes hard very very and a it's others good

a think the market. of that's So a lot you'll business great good dental indirect we've great new the products The with hit I on a got foundation I And dentures see -- business. business. call, aligners. think And mentioned I

printing a natural offering. we think for is a XD those, great have and I

And applications, others. I'm night dentures, and that excited dental for funny 'XX So then got as other guards about you've sounds.

core love the be So to company. a continues focus the of It health I care business.

customers. On would interest And money with start the we're markets is them I capital new spending real hope payoff see from in clear. swamped 'XX some the these industrial would side, those high reliability on applications directions [indiscernible]

that the economy factory and -- utilization. their gets and So to back world

hopefully, all [indiscernible]. happy I'm I it So and answered If clarify I can anything, to that, questions. your in do of

to follow-up great. on aware really or far Anything the in that's a just been tariffs quick be And tariffs. have of No, announced so that [indiscernible].

interesting, Yes, this and public. is it's very all

look China, at of you think, with the and respect toward up If lot over increasingly are They're markets printing the sprung products the defense I have And applications companies those the been particularly to Chinese U.S. into aim about have looking oriented. Chinese and others. years. tariffs And metal the that to a U.S. talked export

us both think defense tariff focus the company. I and the on So as situation U.S. will help a

in a been this as If publicly has and I we high. growth in positives those coming think effects aerospace, defense U.S. because for influx do great shared as and us that's I've And those available, it's all supply it's onshoring of the thing all company. certainly would and see tariffs the hold. are hope and chain shortening I take information, a -- printers,

Brian Our next William is Instructions] coming [Operator Drab from question from Blair.

would data sounds X on coal filling GPUs today. go color great plates like here for have I be questions in Tyler other center infrastructure great equipment. the It the only but data Brian. and center on additive for that the It was

by your to revenue assuming that of what And levels, you those could do revenue just you the levels rate XXXX? would gross efforts, appreciate second, to similar situation. for need time convertible I margin historically higher due on happy debt driven elaborate First, are on and just margin. then probably in-sourcing plans mentioned that the target going mid-XXs forward, what a if coming you'd in support be Thanksgiving.

for much the as question, Thanksgiving and so Thanks well. you Happy to

factory points. if and -- to from our you look So touched be key on COGS, at of increased the our that's It's direct you benefit going -- factory basically, volumes the outgrowth factory, a in-sourcing. the margins, gross

listening the of So brings everybody volumes in I inventory. rates this controlling time the is clearly, the critically utilization other a absorbed factory us We ship years. last good and of as introduction for control low-volume, this is tell And believe design full of is and to reality that thing firmly pace it's to lot move in write manufacturing think X start-up we the I inventory in-source when would customer over call, benefit aggressively down for you rise, Taking to tremendous your product it's absorbed a lower a new product a we the industry. the propensity a for like over ship. a ours that. high-mix important I install product quality and company the from you the you,

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headwinds the have quarters last we some that. So X from on

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of help materials of then And both top time. really new rolling those we're margin So will all out significantly. the gross on that,

consumables want have new really driving also because So services the factories great we're customers service. that

in increase support will services revenue materials all higher increase the in gross margins. So revenue, the

That's have levers. And are near-term I goal. no our fundamentally, to the we mid-XXs. doubt So get can those

given goal over of world right and long-term relatively growth a the We materials on in a that's the the have lower challenge. metals, in metals XX, which getting pull-through now

we direction. there. term, now, metal to there. getting And then of not that -- XD of our get the But standpoint I eventually, And metal match from pull-through materials confidence the well. over evolve long we're printing probably but will materials lot a for headed side. will as there's some We're -- on And the have metals

have in to I'm we're metals the thrilled drag a and portfolio. there. is gross But It's getting margin. And both it our improving. So overall on polymers

difficult Some hard we're applications to like of metal are the industrial materials which hard print. on exciting core most with are side the seeing copper applications

then to which So ultimate goal. up get that long-winded elements is XX%, those to and mid-XXs are way of the saying our us

Jeff. convertible for the on in plans That's you the great coming color. wanted due to up. XXXX. debt I have Do just follow

any can there. you Just provide color

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that about more hear you'll So okay? lot a 'XX, in

Stephan Ladstreet coming from from Next question Markets. Capital is Jacob .

a Just a see sense place this stability now order nice mean the I curious feel to give like of on kind the Or QX quarter. guys But you the patterns years QX, were guess, of of? to revenue we're level of you to kind see build just where that expect do here? in I to maybe of X/X do through business. way the on that return growth you Obviously, kind off good, health at care us

Yes.

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dental brand, growing well terrific see as from that Europe strong a it But world. very we're at diversifying move business, printing business aligners, So factors. and all It's business, bit the into a focus been volatile. happy. the as in look here. growth elsewhere. dentures I the I now and in I portfolio very primary obviously, like The and remains a indirect some little a more today. so fact, parts the the other we -- of of strong We've foundation

see as bit the So portfolio volatility over you'll fall. and of But over markets and time, really a the those help next will rise the X years. more in little that diversification dental

care that large, in. grow expect going to to quarter-to-quarter and again, by with a be health terrific for in total to and like it. is noise business It's any continue business, So but us, we're business thrilled

back was repurchased of inventory manufacturers. just the, inventory guess, from maybe of from requiring just manufacturers percentage then that be contract more I contract repurchased kind the kind And it. of Got and in-sourcing curious, [indiscernible]. on surplus initiative, I what guess, I'm to your

their these of to and you which could a we $XXX supply had to think, inventory. we was had but were our pleased, and product them. don't and We behalf on management -- with wasn't blaming the of and you, a I'll product. buy to not manufacturers. quality over have well be were in-house. had I you, I I at number their they for million a pleased new We chain not the management, was very I'm speed real to frank buy, I customer I Jeff, not Jacob, Jacob. the small Yes, introduce bring with shipping large back -- contrary inventory

South it's largely a product. So insource, in-sourced we're XX%, XX% place And those business to X Carolina, things headquartered in our okay? lovely South of drove now, build in us We've Carolina, to we that we buy needed part well. manufacturing purchased whole that do back to behalf. inventory had good taking But the some as our it Europe of a they in on in, as

So small Everest, mountain, inventory it a mountain down. Mount burning we've small a but that created been not of

stuff, all sales work but been work but it's been at we in away to low in environment. parts, continue challenging. to and to down, continue It's difficult a good just That's we'll good got So it that.

of do frees on the we've cash. we've end XX% side, we'll it's balance has able cash investment source when year, we up the it, on been it bright of make -- reduction And So It to but I'm attain the proud you to the because got of the by But had a of cash. more the good a go. lot sheet.

So from cash we a gross we'll could and And did work time that we at realize a it margin it. as where standpoint a . benefit down, the afford on we from COGS.

any session. comments. Jeff question-and-answer the for floor reached over our to back to I'd We've of turn further closing end the like

first I you all, want well. to Kevin, as very of Thanksgiving happy a wish

moderating for calls at quarters now. terrific our been many, You've many

to joining today. in, for you So you call thank our for everybody thank that. want for tuned And else I all that's

holiday with safe wish families. happy you Thanksgiving those U.S., a your I For and in the all

to wish again least For coming you very in Year. those look you I holiday New outside We'll forward at to happy the of a U.S., the season talking up.

and you. teleconference conclude That does Thank webcast. today's

wonderful thank You this a your and participation We at your day. today. time, you lines may have disconnect for