Transcript • May. 7, 2026 12:30 PM • Stratasys Inc (ISRAEL) (SSYS)
Transcript
May. 7, 2026 12:30 PM
Stratasys Inc (ISRAEL) (SSYS)
Karen McCabe: That also happens to the government.
Operator: How should we think about that?
Dr. Yoav Zeif: Absolutely, both. Stratasys is directly the indicator because every day we are delivering parts for drones, large parts, small parts. By the way, in large parts, we have huge advantage because of our reliable FDM solution, industrial FDM solution, the F900 and the F3300, with unique materials that only Stratasys has. So probably in every large UAV, you will see Stratasys ultem parts. But not only there, it's also relationship with the Department of War and large appropriations that are targeting sustainment and also renew of the depots. And I'll give you an example of shipyards. US built less ships, battleships, since World War II than China in the last year. That's what I heard in the Pentagon. What does it mean? It means that there is a lot to catch up. And if you want to catch up and fast, additive is the solution. We are experiencing the same thing also in Europe. Germany and Japan mainly, they need to catch up. And the weakest way to catch up is at the manufacturing.
Operator: Thank you. Our next question has come from the line of Trevor Saar with William Blair. Please proceed with your questions.
Trevor Saar: Thanks. This is Trevor for Brian. I wanted to stick with A&D if we can here. I'm trying to square your opportunity with some of your largest A&D customers on production versus prototyping. It would be helpful to hear any kind of detail you could give or examples. You don't have to name a customer, obviously, but how should we think about your development with some of these largest customers and where you are in your business with them on a production versus prototyping standpoint?
Dr. Yoav Zeif: Great question, Trevor. Currently, we are focusing all the way on manufacturing. And the main areas are this drone transition or drone dominance, one of them. The other one is the sustainment. And the third one is everything which relate to maritime and catching up on the ability to be there with renewed splits, I would say. The main indication, as I said, it's going both in different direction, but the main indication now is Stratasys Direct. We shipped over 100,000 production parts annually. And we have never seen it before in defense, this level of demand. And we are working in... different layers or different routes to the market. One is through the government. We are very strong with the US government, but also with other governments globally, because we have the reputation and we see their large programs that are being built and allocation and assignment of budgets. Majority of this demand is production part. not prototypes. We also see demand for tooling because when you need to refresh or renew a depot, you need many tools, same with chip yards. And the fastest way to have tools is to print it. Tooling is also a major thing in defense now because you need to put all those new lines of production and there is nothing faster than additive manufacturing to equip those lines with tools. This is another area. And one more, probably I can talk about it for hours, but I want to shed light on the fact that this is not only a U.S. phenomenon. This is a global phenomenon. It's the strongest demand we see in the U.S. and also the innovation, but it's definitely a global phenomenon that we see more budgets more programs that are being now established, and we will see the demand over the next, you know, next quarter, but also years from now. We have a strong line of solutions that can really match those requirements and the high requirements and the demands.
Trevor Saar: That's great. Thank you. I wanted to switch back over to dental. You gave some great detail there on the European market and that you project it to be 2.45 billion by 2028. I'm just trying to get a sense of what your specific opportunity is in the European 3D printed dental market. And maybe if you could give any kind of indication of where you expect your share might be within that market by 2028.
Dr. Yoav Zeif: The dental market is one of the leading industries in adopting additive manufacturing because of the ability to personalize and in a very quick way. Traditionally, the dental market is labor intensive. And we are bringing here a solution that solves two major issues in dentals. The lack of professional labor. And the second one, we are dramatically, as an industry, as an additive manufacturing industry, we are dramatically reducing the chair time for the doctor, for the clinic, for the dentist. And there is nothing more valuable for a dentist than his chair time. And our dentures, and we call it removables, we are focusing on removables. It's for restorative dental, so dentures, but also night guards. We are focusing there with our PolyJet technology. It's the only multi-material technology for dentists or for dental. But what does it mean multi-material? It means that we can deliver parts that no other technologies can do. And we are already established because in the US our dentures are already, we are already working with the leading players like Affordable and Glidewell and we plan to grow and to be the largest player in Europe because we have the first mover advantage. We are the first player moved with polychromatic dentures that received the 2A uh class class 2a great position to be in and it also opened up for us new applications like partial dentures and crowning bridges and we will see growth there thank you our next question has come from the line of alec valera with loop capital markets please proceed with your question
Alec Valera: Yeah, hi. Thank you for taking my question. Yeah, just kind of on that same point on to that. So you projected the European segment at 2.45 billion by 2028. I wanted to ask, how does this certification come sooner than you were expecting? And what is the likelihood that we could see more certifications down the road? And how would that expand to that opportunity? And additionally, clarification question, is it $2.45 billion in addition to the American market?
Dr. Yoav Zeif: So the $2.45 billion is analyst projection in the European market. When we look at our true debt, it will definitely get into new applications. We were not there in the past, like, as I said, partial dentures and crown and bridges, and we have the first mover advantage there. In the U.S., it's a bigger opportunity. It's almost $5 billion when you look at removables. It's only the beginnings. We are improving the material, we are improving the machines, we are improving the solution, we are improving the workflow. We are the first mover, but we are not, you know, we are not laying back and said, okay, this is it. We are building the foundations and we are building the best offering for restorative dentists. And once we have this foundation, I have no doubt that we will experience exceptional growth.
Alec Valera: Got it. Super helpful. That's, that's, uh, that's exciting. Um, just a quick follow up, um, two quarters ago, you mentioned the large tech company that bought, uh, some F 3300. Any update there and any color on what potential, uh, applications they could be using these, uh, your products for.
Dr. Yoav Zeif: Unfortunately, we cannot share. But I want to do something, you know, just to share one perspective, which I think is important because it's kind of connecting all the questions today. And I want to state it very clearly. We are progressing according to our growth plan. This is a plan that we shared with you last quarter. It's true that Q1 is always the softer one and H1 are softer than H2. But H2 is definitely defense-driven. So we are maintaining our guidance. We are on plan. And when I'm saying on plan, this will be the first year for three years now that we will grow. So our transition plan from prototyping to manufacturing, that we also shared with you in the past, will generate growth this year. Our transition is working.
Operator: Thank you. Our next questions come from the line of Karen McCabe with Cantor Fitzgerald. Please proceed with your questions.
Karen McCabe: Hi, yes, thank you. This is Karen for Troy Jensen. You mentioned that customer engagement continues to be strong or increasing, but customers are maintaining capital discipline. Can we read any insight into the strategy to direct organic growth as maybe a precursor to an inflection in system sales in the future at all? Thank you.
Troy Jensen: Hi, Kieran. Hi, Kieran. Thanks for the question. As we mentioned earlier, FDM, the parts business, is an indicator to the behavior of the OEMs that follow. When we print parts, the cycle is very quick. We see the growth relatively quick. We demonstrated in Q1 23% growth organically, as you mentioned, and that's part of the confidence we have. in the ability to, with a strong pipeline that we see for the second half, to grow also on the hardware and OEM business. And we start to see it already in Q2. In Q2 this year, we expect to see similar revenue to Q2 2025 levels.
Karen McCabe: Okay. And my follow-up is, you know, if you have a strong balance sheet, no debt, cash on hand, you talk about some, you know, taking advantage of inorganic opportunities. Can you provide any color maybe where you see some areas you want to add to or areas of interest on the inorganic side?
Dr. Yoav Zeif: No doubt that we are aiming to leverage our balance sheet to capture inorganic opportunities. to strengthen our position in what we define as high requirement use cases, because this is our strategy. Our strategy is to deliver and capture high value in high requirement applications. We don't want to be in prototyping, in basic prototyping. We don't want to compete with solution that deliver no value. They deliver value, but it's raised to the bottom. We are focusing on the high end, on the high requirement applications, and there are plenty of inorganic opportunities to capture in those areas. And this is our direction. It's completely aligned with our strategy, and we are going to capture those opportunities.
Operator: Thank you. We've reached the end of our question and answer session. I'd now like to hand the call back over to Dr. Yoav Zayf for any closing comments.
Dr. Yoav Zeif: Thank you for joining us. We look forward to updating you again next quarter.
Operator: Ladies and gentlemen, thank you so much. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time and enjoy the rest of your day.
