3D Systems, Rock Hill, South Carolina, USA, has announced its financial results for the second quarter ending June 30, 2022. Revenue saw a decline of 13.8%, to $140 million, from Q2 2021. First half year 2022 was also at a reported decline compared to the first half of 2021, down 11.5% to $273 million.
“Our second quarter results came in below our expectations, due in large part to continuing supply chain disruptions that constrained our ability to fill customer orders, input cost inflation that reduced our gross profit margins and a significant negative impact of foreign exchange on our international business,” stated Dr Jeffrey Graves, president and CEO. “In addition, we are seeing evidence that macro factors are causing selected key customers to spend more cautiously, and we now believe, as reflected in our reduced FY 2022 guidance, that this softer demand environment is likely to continue at least through the balance of the year. We have already taken certain cost and efficiency-related actions and will take additional measures as we move through 2022, with the goal of mitigating the impact of reduced near-term demand on our financial results.”
The gross profit margin in the second quarter of 2022 was 37.9% compared to 42.4% in the same period last year. Gross profit margin was said to have decreased primarily due to input cost inflation, supply chain disruptions, higher freight costs, divestitures, and an unfavourable product mix.
3D Systems’s Q2 2022 non-GAAP revenue – excluding divestitures and on a constant currency basis – increased 7.8%, reflecting solid demand in both the Industrial and Healthcare segments despite supply chain and macroeconomic challenges. The non-GAAP revenue for the first half year 2022 – excluding divestitures and on a constant currency basis – increased 10.4%.
Dr Graves continued, “Despite these near-term external pressures which are impacting many companies, I remain extremely confident about the long-term growth drivers for our business and for the Additive Manufacturing industry. Adoption of additive solutions in production environments continues to move forward, and 3D Systems is at the forefront of this growing trend. The actions we have taken over the last two years have repositioned 3D Systems with an industry-leading portfolio of polymer and metal technologies and a renewed focus on partnering with our customers to create value-added production applications. While the current macroeconomic challenges are clearly pressuring our results, we are confident that we remain well-positioned to achieve the long-term targets that we laid out in our May 2022 Investor Day, including $1 billion in revenue in five years.”
Operating expenses increased 7.7% to $85.2 million in the second quarter of 2022, compared to the same period a year ago. The higher operating expenses reflect spending in targeted areas to support future growth, including expenses from acquired businesses, research and development, and investments in corporate infrastructure.
Dr Graves concluded, “As we have previously noted, we view 2022 as an investment year during which we will add to and refresh our solutions portfolio, build unique capabilities in software and regenerative medicine, and strengthen our corporate infrastructure, all with the goal of supporting strong future growth and profitability by 3D Systems and long-term value for our shareholders.”