Earnings call transcript: Stratasys Q1 2026 sees mixed results, stock falls

Stratasys Ltd. (SSYS) reported its Q1 2026 earnings, revealing a mixed performance as the company posted an EPS of -$0.01 against a forecast of $0.00, missing expectations. However, revenue exceeded forecasts, reaching $132.7 million compared to the anticipated $131.8 million. Despite the revenue beat, shares fell by 4.32% in pre-market trading to $8.85, reflecting investor concerns over profitability and increased operating expenses.

Stratasys faced a challenging Q1 2026, with revenue declining by 2.4% year-over-year. The company struggled with profitability, as indicated by the EPS miss. However, Stratasys Direct continued to perform well, showing significant growth in the aerospace and defense sectors. This reflects the company’s ability to leverage its technology in high-demand areas despite broader market challenges.

Stratasys missed EPS expectations with a reported -$0.01 against a forecast of $0.00, while revenue exceeded expectations at $132.7 million versus the forecasted $131.8 million. The revenue surprise of 0.68% was a positive note, but the EPS miss highlighted ongoing profitability issues.

Following the earnings release, Stratasys shares fell by 4.32% in pre-market trading, dropping to $8.85. This decline reflects investor disappointment, particularly with the EPS miss, and concerns over increased operating expenses and tariff impacts. The stock’s performance is notable given its 52-week range of $7.34 to $12.81. With a beta of 1.86, the stock exhibits higher volatility than the broader market, making price swings more pronounced during earnings events.

Stratasys provided guidance for future quarters, projecting positive EPS in Q2 and Q3 of 2026. The company anticipates continued growth in revenue, driven by advancements in aerospace, defense, and dental technology. An InvestingPro tip notes that analysts predict the company will be profitable this year, with full-year EPS forecast at $0.12, supporting management’s optimistic outlook. Challenges remain, particularly in navigating tariff impacts and currency fluctuations.

CEO Yoav Zeif commented on the earnings call, "While we faced challenges this quarter, our strategic focus on high-growth sectors like aerospace and defense is yielding results. We remain committed to innovation and operational efficiency to drive long-term growth."

During the earnings call, analysts questioned the company’s ability to manage operating expenses and maintain profitability amid tariff and currency challenges. Executives emphasized their focus on cost management and strategic investments in high-growth areas to offset these pressures.

Operator: Good day. Welcome to today’s conference call to discuss Stratasys’s first quarter 2026 financial results. My name is Daryl, and I’ll be your operator for today’s call. Now I’d like to hand the call over to Yonah Lloyd, Chief Communications Officer and Vice President of Investor Relations for Stratasys. Mr. Lloyd, please go ahead.

Yonah Lloyd, Chief Communications Officer and Vice President of Investor Relations, Stratasys Ltd.: Good morning, everyone, and thank you for joining us to discuss our 2026 first quarter financial results. On the call with us today are our CEO, Dr. Yoav Zeif, and our CFO, Eitan Zamir. I would like to remind you that access to today’s call, including the slide presentation, is available online at the web address provided in our press release. In addition, a replay of today’s call, including access to the slide presentation, will also be available and can be accessed through the investor relations section of our website. Please note that some of the information provided during our discussion today will consist of forward-looking statements, including without limitation, those regarding our expectations as to our future revenue, gross margin, operating expenses, taxes, and other future financial performance, and our expectations for our business outlook.

All statements that speak to future performance, events, expectations, or results are forward-looking statements. Actual results or trends could differ materially from our forecast. For risks that could cause actual results to be materially different from those set forth in forward-looking statements, please refer to the risk factors discussed or referenced in Stratasys annual report on Form 20-F for the 2025 year. Please also refer to that annual report along with our reports filed with or furnished to the SEC throughout 2026 for additional operational and financial details. Reports on Form 6-K that are furnished to the SEC on a quarterly basis and throughout the year provide updated current information regarding the company’s operating results and material developments concerning our company. Stratasys assumes no obligation to update any forward-looking statements or information which speak as of their respective dates.

As in previous quarters, today’s call will include GAAP and non-GAAP financial measures. The non-GAAP financial measures should be read in combination with our GAAP metrics to evaluate our performance. Non-GAAP to GAAP reconciliations are provided in tables in our slide presentation and today’s press release. I will now turn the call over to our Chief Executive Officer, Dr. Yoav Zeif. Yoav?

Dr. Yoav Zeif, Chief Executive Officer, Stratasys Ltd.: Thank you, Yonah. Good morning, everyone, and thank you for joining us. Our first quarter results reflect the continued resilience of our operating model in a measured spending environment. Recurring revenue streams from consumables and customer support continues to provide stability, while printer purchasing timelines remained extended as customers exercise capital discipline amid ongoing global uncertainty. Meanwhile, we remain focused on executing our strategy to grow as we deepen our penetration into manufacturing. On a sequential basis, compared to the fourth quarter of 2025, consumables and services both grew slightly, and Stratasys Direct delivered over 10% sequential growth and 23% organically after divestments when compared to the first quarter of 2025, reinforcing the trajectory of our production parts business, as was the case for the full year 2025. The top three parts customers were again all U.S.-based drone-related companies.

Note that Stratasys Direct produces end-use parts across a wide variety of industrial applications, using Stratasys printers almost exclusively, demonstrating the versatility of our technologies and the view into its potential future benefits. At the same time, we continue to make meaningful strategic progress. Innovation, customer engagement, and market development remain the foundation of our long-term growth strategy, one that centers on secular megatrends of supply chain protection and operational efficiency, reshaping global manufacturing. Nowhere are these megatrends more pronounced than in aerospace and defense, where mission-critical performance requirements, supply chain resilience mandates, and expanding U.S. Department of Defense investments in advanced digital manufacturing are creating a strong structural demand environment. To that point, we believe Stratasys is uniquely positioned to win.

In a tariff-sensitive environment, in particular, our platform’s ability to enable local, rapid, and cost-effective production is a genuine competitive advantage, one we continue to highlight in customer conversation and one we expect will accelerate adoption over time. Turning to new technology developments and customer activity. In aerospace and defense, we continue to demonstrate the depth and durability of our position this quarter. As a reminder, Stratasys has deployed thousands of systems across aerospace and defense production environments worldwide. We serve as a program of record for the US Air Force and NAVAIR. Our technology is embedded across active platforms from C-17 microvanes that save an estimated $14 million annually in Air Force fuel costs to certified flight-ready parts produced for the world’s leading aircraft manufacturer.

Stratasys Direct, our parts manufacturing division, ships over 100,000 parts annually to the defense industry and operates under certified quality systems, including AS9100, ISO 9001, CMMC compliance, and ITAR requirements. This is not prototype stage or pilot stage engagement. This is production-scale additive manufacturing at operational tempo for the most demanding customers in the world. Against that backdrop, our selection in the first quarter for the U.S. Department of Defense’s Joint Additive Manufacturing Acceptability IV Pilot Parts program is a meaningful endorsement. JAMA IV is a multi-million dollar initiative to accelerate the qualification and deployment of 3D-printed parts across military platforms, and Stratasys Direct was selected on the basis of its proven production role across thousands of active military systems.

The program positions us to extend our share of U.S. defense additive spending, a budget which surged 83% for fiscal year 2026, and continues to flow into qualification and deployment for the Department of Defense. More broadly, our customer engagement across leading aerospace contractors and OEM remained substantive, with use cases advancing through qualification pipelines from production tooling to certified flight-ready components. These cycles are long, but the outcomes generate durable recurring demand, encode in certification and workflow integration, exactly the kind of revenue profile that strengthens our business over time. We are seeing continued momentum in high reliability aerospace applications with thousands of parts in orbit leveraging our materials. In fact, on the recent Artemis II moon mission, hundreds of components produced with Stratasys Antero materials on our FDM system were flown, highlighting the maturity and scalability of additive manufacturing in space systems.

This is a strong validation of the high-performance applications of our materials an