3D Systems reports solid start to 2023
May 19, 2023
3D Systems, Rock Hill, South Carolina, USA, has announced its financial results for the first quarter of 2023 ending March 31. The company reported revenue of $121.2 million a decrease of 8.8% compared to the same period last year, or 6.5% on a constant currency basis.
“We are off to a solid start in 2023, and believe we are well-positioned to execute on our full-year revenue and profitability plans for this year,” stated Dr Jeffrey Graves, president and CEO. “As expected, we saw a return to our historical seasonality performance this year, with first quarter 2023 revenues mirroring the percentage of full-year performance we experienced in 2021. At a more detailed level, first quarter revenues were driven in part by continued softness in our dental orthodontic market, which we attribute to reported sluggishness in consumer discretionary spending, in combination with pre-planned customer inventory reduction efforts. We expect these effects to moderate to some extent in the second half of the year.”
Healthcare Solutions revenue decreased 24.3% to $48.7 million compared to the same period last year. Healthcare Solutions revenue on a constant currency basis decreased 23.4% year over year, reportedly due to continued softness in its dental orthodontic market, which was down 46.2% versus the same period last year.
The Q1 2023 revenue from non-dental markets increased, however, by 12.3% on a constant currency basis compared to Q1 2022. Healthcare Solutions revenue from non-dental markets increased 22.4% on a constant currency basis, versus the same period last year.
Graves continued, “Off-setting this weakness, our other major end-markets remained robust, driven by continued adoption of Additive Manufacturing in production environments in the US and Europe. These effects were seen in the medical markets, where our personalised health service and increasing focus on point-of-care solutions continues to fuel robust growth rates, in excess of 20%.”
Similarly, Industrial Solutions revenue increased 5.6% to $72.5 million compared to the same period last year. Industrial Solutions, revenue on a constant currency basis increased 9.3% year over year. “Industrial markets also remained strong, including commercial rocketry and aerospace propulsion, industrial products, and consumer goods, all of which contributed to strong organic revenue growth rates of over 9%,” shared Graves.
Additionally, gross profit margin in the first quarter of 2023 was 38.8% compared to 40.4% in the same period last year. Non-GAAP gross profit margin was 39.0% compared to 40.6% in the same period last year. 3D Systems reported that gross profit margin decreased primarily due to input cost inflation and unfavourable product mix.
Adjusted EBITDA decreased by $12 million to a loss of $10 million in the first quarter of 2023 compared to the same period last year. The decrease in Adjusted EBITDA reportedly primarily reflects lower total sales volume, inflationary impacts on input costs, and continued investments in future growth.
Graves concluded, “In support of our commitment to generate positive Adjusted EBITDA and free cash flow, we have expanded on our restructuring efforts that we announced a couple months ago to realise even more cost benefits, as announced in a separate release today. As a result, we are increasing our full-year 2023 expectation to deliver $2 million or better in Adjusted EBITDA, while maintaining the previously announced outlook for revenue, non-GAAP gross profit margin and breakeven or better free cash flow.”
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