Stratasys (SSYS) Q3 2026 Earnings Call Transcript

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DATE

Nov. 12, 2026

CALL PARTICIPANTS

• Chief Communications Officer and Vice President, Investor Relations - Yonah Lloyd
• Chief Executive Officer - Dr. Yoav Zeif
• Chief Financial Officer - Eitan Zamir

TAKEAWAYS

• Revenue -- $142.6 million, representing 4.1% growth compared to $137 million in the same period last year.
• Aerospace and Defense Revenue -- 35% growth versus last year and approximately 25% sequentially, driven by two significant defense orders and strong follow-on activity from existing customers.
• Systems Revenue -- $35.9 million, an 11.8% increase compared to $32.1 million in the third quarter of last year, reflecting momentum in industrial manufacturing sectors.
• Consumables Revenue -- $61.2 million, remaining relatively flat compared to $62 million in the same period last year.
• Service Revenue -- $45.5 million, an increase of 6.1% compared to $42.9 million last year, supported by growth in Stratasys Direct.
• Non-GAAP Gross Margin -- 47.8%, up from 45.3% last year, primarily due to a favorable shift in the mix of system sales and a tariff credit.
• GAAP Gross Margin -- 43.7%, compared to 41% in the prior year period.
• Non-GAAP Operating Income -- $2.7 million, an improvement from essentially breakeven performance in the third quarter of last year.
• Non-GAAP Net Income -- $3.5 million, or $0.04 per diluted share, compared to $1.5 million, or $0.02 per diluted share, in the previous year.
• GAAP Net Loss -- $10.2 million, or $0.12 per diluted share, including the impact of one-time non-cash charges.
• Adjusted EBITDA -- $8 million, compared to $5 million in the third quarter of last year.
• Operating Cash Flow -- $3.5 million positive, compared to $6.9 million generated in the same period last year.
• Cash and Equivalents -- $210.7 million at quarter end, with the company continuing to operate debt-free.
• Full-Year Revenue Guidance -- $556 million to $561 million, revised from the previous range of $565 million to $575 million due to extended sales cycles.
• General Motors Cost Savings -- $10 million annually, achieved through the deployment of dozens of industrial printers across more than 20 plants.
• General Motors Application Scale -- 5,000 factory floor applications supported by company printers this year alone.
• Stratasys Direct Growth -- 9% growth versus last year, driven by robust demand for defense and raw production parts.
• F3,300 Output -- 3-fold increase in output compared to previous systems in certain aerospace and defense applications.
• Indian Dental Market Potential -- 7 million dentures produced annually in India, representing a target market for company dentures recently granted CDCSO approval.
• FAW Group Order Progress -- 17 total F900 systems expected to be in place by year-end as the Chinese auto manufacturer scales production.

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RISKS

• Zamir stated, "Still, with this shift towards larger orders, particularly production focused applications, there are longer sales cycles And as we mentioned last time, higher variability of timing," indicating that the transition to manufacturing use cases may lead to revenue fluctuations.
• Zeif noted that the company is opting not to compete in the low-end rapid prototyping market, which has resulted in a decline in that specific business segment as the focus shifts to high-requirement manufacturing.

SUMMARY

Stratasys Ltd. (NASDAQ:SSYS) reported a 4.1% increase in third-quarter revenue, primarily driven by strong performance in the aerospace and defense vertical which grew more than 35% year over year. Management reported that the company achieved positive operating cash flow and maintains a debt-free balance sheet with $210.7 million in cash and short-term deposits. The company adjusted its full-year revenue guidance to a range of $556 million to $561 million, citing longer sales cycles and increased timing variability associated with larger, production-oriented orders. Additionally, management confirmed the mutual termination of the Markforged acquisition due to expectations of a lengthy and costly regulatory process.

• CFO Zamir noted the termination of the Markforged acquisition by stating, "as it has now become apparent to both parties that the regulatory process is set to be longer and more expensive than initially anticipated."
• The company appointed David Chin to its board of directors, a senior McKinsey partner specializing in global defense manufacturing and transformations, to support the strategic focus on the defense vertical.
• Management highlighted the partnership with General Motors as a hub-and-spoke production model, where localized additive manufacturing has improved tooling response times by roughly 4-fold.
• The company launched the F870, a large-format platform for factory floor tooling, and reported that Toyota and Rivian were among the first adopters for automotive tooling applications.
• The company received CDCSO approval for its TrueDent material in India, allowing it to address a market with more than 1-year wait times for traditional dentures.
• Management indicated that the backlog for part production orders at Stratasys Direct reached a record high, with a shift in demand toward complex, high-requirement contract manufacturing.

INDUSTRY GLOSSARY

• FDM (Fused Deposition Modeling): An additive manufacturing technology that builds parts layer-by-layer by heating and extruding thermoplastic filament.
• SAF (Selective Absorption Fusion): A powder-based 3D printing technology designed for high-volume production of end-use parts.
• PolyJet: A 3D printing technology that jets thin layers of liquid photopolymer onto a build tray, cured by UV light.
• P3 (Programmable PhotoPolymerization): An evolution of digital light processing (DLP) technology that enables high-accuracy printing with functional resins.
• Stratasys Direct (SDM): The company's internal parts manufacturing service bureau that provides on-demand 3D printing for customers.
• CDCSO (Central Drugs Standard Control Organization): The national regulatory body for pharmaceuticals and medical devices in India.
• RPO (Remaining Performance Obligations): Contracted revenue that has not yet been recognized, representing future revenue potential.

Full Conference Call Transcript

Operator: Good day, and welcome to today's conference call to discuss Stratasys' Third Quarter 26 Financial Results. My name is Kevin, and I will be your operator for today's call. And now I would like to turn the call over to Yonah Lloyd, Chief Communications Officer and Vice President, Investor Relations for Stratasys. Mr. Lloyd, please go ahead.

Yonah Lloyd: Good morning, everyone, and thank you for joining us to discuss our 26 third quarter financial results. On the call with us today is our CEO, Dr. Yoav Zeif and 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, 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 described in forward looking statements, please refer to the risk factors discussed or referenced in Stratus' annual report on Form 20 F for the 25 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-Ks 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. 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 Zeif: Yonah, Thank you, Yonah. Good morning, everyone, and thank you for joining us. Our third quarter results reflect the successful ongoing shift from rapid prototyping to manufacturing. As reflected in the 4.1% growth year over year. Our largest business Aerospace and Defense, or A&D had a particularly strong quarter growing over 35% compared to the third quarter of last year, and approximately 25% sequentially from the second quarter of this year. And our automotive dental, and Stratasys direct business grew as well. Importantly, we generated positive operating cash flow this quarter as we had previously communicated. Our growth across A&D and automotive demonstrates the long term value propositions of industrial additive manufacturing.

Addressing key benefits including onshoring speed, cost, and customization, while enabling rapid scaling. Furthermore, the mix continues to shift from prototyping toward qualified production driving recurring industrial systems materials, service, and Stratasys Direct parts revenue. Regarding aerospace and defense, in the third quarter, we demonstrated ongoing success and would like to highlight 2 significant defense orders. These orders enable the customers to continue scaling their respective production programs utilizing both our FDM and SAF technologies. Also saw strong follow on order activity from existing FDM customers already embedded in production environment. Especially focused on our qualified processes. used in flight grade applications. Demand continues to be broad across our FDM portfolio. The growth comprises a number of A&D subverticals.

This includes drones, space, munitions, EVTOL, advanced air mobility, along with the service bureaus, and contract manufacturers that support this ecosystem. We have also seen an uptick in customers turning to our SaaS powder systems. Replacing traditional supply chains for just in time bridge production work. This megatrend combined with our focus on high requirement scaling program result in larger relative order sizes which by nature have longer sales cycles and more time variability. However, it is important to note that once a part is qualified, on our platforms, the relationship tends to be long term.

This is primarily due to the cost and complexity of requalifying another resource Furthermore, we have strong feedback from customers that our systems enable enhanced ROIs. Mission critical performance requirements and accelerating supply chain resiliency mandate are megatrends that are translating into longer term durable structural demand for our platforms. This is especially true for scaling programs within aviation, space, and space launch drones, and munitions industries. The consistent growth high level of engagement, and demand reinforce our conviction that we are still early on this transformative journey. We see significant opportunity to expand our customer base and grow wallet share longer term with both legacy users and startups.

To that point, we would like to welcome David Chin, to our board of directors. David is a long term McKinsey senior partner who co leads their firm's work with defense ministries, and armed forces globally. He has advised on transformations across aerospace and defense manufacturing, cybersecurity, and other key sectors. This appointment reflects the company's continued strategic focus on defense, as a key vertical. We also want to thank Ares Kakadian for his service as a board member. Turning to automotive. This quarter, we exhibited at IMTS 26, the largest manufacturer technology event in the world. Where we highlighted our strong and growing relationship with General Motors.

By partnering with GM, our product and software are helping to meaningfully improve their legacy tooling and production support with measurable results in terms of speed, and efficiency across multiple plants. GM partnered with us to establish an additive manufacturing center of excellence to scale effective production It is a hub and spoke model deploying dozens of industrial 3 d printers across more than 20 plants, making custom tools, jigs, and fixtures on demand. This year alone, over 5000 GM factory floor applications were supported by Stratasys printers, and that number is expected to climb in the coming years. Note that GM is consistently 1 of our top customers in terms of printer utilization in production environments.

This utilization is a reflection of the high quality of our materials which translates into recurring revenue for us. GM, in turn, is gaining efficiency in production and saving $10 million in annual cost. This partnership is a true symbiotic relationship. Where we all win including the end consumer that ultimately gets a better produced vehicle. The benefits for GM are substantial, beyond the annual savings from localized additive manufacturing production. Tooling response time are roughly 4x faster Worker safety and ergonomics are improved by customized production tooling, which reduces physical strain on operators. This model continued to expand across GM's plants in The United States and Mexico. it is a production scale evidentiary point for our manufacturing strategy.

And a compelling case study for other manufacturers currently evaluating our additive manufacturing solutions. At IMTS, we also launched the F870, a new large format FDM platform purpose built for factory floor tooling, fixtures, and end-use parts. With the longest heated build chamber in its class. Toyota and Rivian were among the first adopters. Evaluating the system for automotive tooling and manufacturing aids at their North American facilities. Both the F870 launch and the General Motors rollout reflect the same underlying trend Manufacturers are moving additive manufacturing out of the prototyping lab and onto the factory floor as a standard procedure of how they run production.

Additionally, FAW Group, 1 of China's largest auto OEMs continued to expand its use of our platforms for production purposes. On last quarter's call, we noted that FAW had signed an agreement to purchase 12 F900 systems. This year 2 were sold in Q2 and several more in the third quarter. By year's end, they are expected to have 17 total F900s and 8 other Stratasys printers reinforcing the high quality of our systems and recurring nature of the business as customers scale after their initial deployment. Turning to Stratasys Direct. Our US based parts manufacturing business grew 9% over Q3 last year. Once again, demand for defense and raw production was robust.

With the top customers all coming from this sector. This dynamic has remained consistent for the past 2 years, 1 of our customers a large drone prime, recently switched to Stratasys technology, and is now placing repeat orders. This is a great example of the continued Stratasys Direct and OEM business synergies. As we provide a differentiated end to end model, helping A&D customers move from application development through qualification and scale production. Another key component of the improvement of our Stratasys direct operations has been the increased throughput we recognize from using the new F3.3 thousand system to support A&D and automotive applications.

In 1 case, the F3.3 thousand was able to produce parts at 3x the output of previous systems. Providing the customer with a significant reduction in lead time on an expedite order. Overall, the backlog for part production orders is higher than ever before across all technologies. And we are starting to see a shift in demand from standard simple parts to complex. High requirement contract manufacturing. Including more finishing, paints, inserts, and quality to meet the demanding use cases. Stratasys direct customers value these ancillary post processing operations. Providing a trusted 1 stop solution for end use parts. This approach reduces the risk associated with using multiple suppliers. We continue to improve utilization of each function in our process.

For example, we are evolving the manufacturing execution system to include new features to collect data at each operation and we are engaging with AI firms to improve efficiency across the workflow stream. Moreover, Stratasys Direct is providing an onshoring solution for US companies as ongoing capacity shortages, especially in the A&D industry, continue to expand Potential customers are increasingly recognizing the true value of our comprehensive turnkey production solution. Leveraging our hardware and software. Stratasys Direct enables us to prove our production capabilities for a high requirement customer, and then to deliver manufacturing at scale at their facilities.

As we move forward in AI automation is implemented on a larger scale, we expect Stratasys is well positioned to be a long term beneficiary. Moving to dental. Stratasys was awarded CDCSO approval for our truDent material to be used as medical device in India. This is 1 of the world's largest dentures producing countries. With approximately 7 million dentures produced each year. Our technology will allow us to begin to introduce our dentures at a significantly lower price. Than current alternatives. Where many cannot afford the cost And the speed of our system should help remediate their current situation.

Where wait times for dentures run more than a year, Additionally, DDS lab in Tampa Bay, Florida, launched its new product line direct to finish partial dentures. Powered by Stratasys TrueDent and the metal 3 d printing technology. The result is a more digital and predictable approach. With fewer traditional processing variables and the ability to get the finished dentures appliance back to the dental office faster. We are excited by the potential of the dental business in the coming years and believe once we commercialize it meaningfully, it will become a major growth driver.

We have a unique solution, and they have already lined up key partners such as Glidewell and Affordable Dentures as we begin to address this multibillion dollar target opportunity. I also want to highlight a milestone on the community side. As part of our long standing commitment to corporate social responsibility. In August, we expanded our 12-year partnership with Limb-it-less solution. A university based nonprofit that is using our technology to bring hundreds of 3D printed prosthetic limbs to children across North America and beyond. The expanded partnership broadens the program's reach, and had a renewed focus on sustainability and education.

Employing our certified pre owned f series printers, it is a good reminder that the same production grade additive manufacturing capabilities driving our results across industries are also changing life in very direct human ways. With that, I will turn the call to Eitan to review our financials. Eitan?

Eitan Zamir: Thank you, Yoav and good morning, everyone. Our third quarter results reflect continued execution on our manufacturing-focused strategy. As our key industrial focus area of aerospace, defense and automotive all performed well. As Yoav mentioned, our results were led by A&D, our largest business, which grew over 35% year over year. Approximately 25% sequentially from the second quarter. Let me get into the details. Third quarter consolidated revenue of $142.6 million, up 4.1% compared to $137 million in the same period last year and up 3.6% sequentially from last quarter. Systems revenue was $35.9 million, up 11.8% compared to $32.1 million in Q3 last year. Driven in large part by the aerospace and defense momentum described earlier.

Consumables revenue was $61.2 million, roughly flat compared to $62 million in the same period last year. Service revenue which includes Stratasys Direct was $45.5 million, compared to $42.9 million in the same period last year. An increase of 6.1%. Within service revenue, customer support revenue was $30.5 million, up 4.3% year over year. Turning to gross margins. GAAP gross margin was 43.7% for the quarter, compared to 41% in the same period last year. Non GAAP gross margin was 47.8% for the quarter compared to 45.3% in the same period last year. The change in gross margin was primarily due to improved margins in the mix of system sales, and a tariff credit.

Partially offset by lower consumables, That said, netting out certain onetime items our gross margin would have been 45% to 46%. GAAP operating expenses $73.3 million compared to $78.8 million during the same period last year. Non GAAP operating expenses $65.5 million or 45.9% of revenue roughly flat compared to 45.3% of revenue in the same period last year. Reflecting continued discipline expense management. Regarding our consolidated earnings, GAAP operating loss for the quarter was $11 million compared to a loss of $22.7 million for the same period last year. Non GAAP operating income for the quarter was $2.7 million compared to essentially breakeven in the same period last year.

GAAP net loss for the quarter was $10.2 million or $0.12 per diluted share. Compared to a net loss of $55.6 million or $0.65 per diluted share for the same period last year. As a reminder, last year's GAAP net loss included a onetime $33.9 million noncash loss related to our noncash impairment charges of an associated company, Non GAAP net income for the quarter was $3.5 million or $0.04 per diluted share. Compared to a non GAAP net income of $1.5 million or $0.02 per diluted share in the same period last year. Adjusted EBITDA was $8 million for the quarter. Compared to $5 million in the same period last year. Turning to cash flow.

We generated $3.5 million of positive operating cash flow this quarter, compared to generating $6.9 million in the third quarter last year. We ended the quarter with approximately $210.7 million in cash equivalents and short term deposits. Compared to $212.5 million at the end of the second quarter. And continue to operate debt free. As we look ahead, we want to share that Stratasys and Nano Dimension have mutually agreed to terminate Stratasys acquisition of MarkForged, Inc. A wholly owned subsidiary of Nano Dimension. As it has now become apparent to both parties that the regulatory process is set to be longer and more expensive than initially anticipated. Overall, customer engagement remains strong for the Stratasys business.

With a number of large and advancing pipeline opportunities. Still, with this shift towards larger orders, particularly production focused applications, there are longer sales cycles And as we mentioned last time, higher variability of timing. As a result of this shift in sales cycles, we are updating our outlook for the remainder of 2026. New revenue guidance is $556 million to $561 million From our prior range, of $565 million to $575 million. Other metrics outlined in our earnings release have also been updated and largely reflect the impact of the new revenue expectation.

We believe the depth and quality of expected larger orders in 2027 combined with the momentum we are seeing across a number of our end use verticals positions us well long term. Our debt free balance sheet and healthy cash position give us the added financial flexibility from a position of strength. This allows us to support investing in technology, adapting to market development both organically and inorganically to spur further growth. With that, let me turn the call back over to Yoav for closing remarks. Yav?

Yoav Zeif: Thank you, Eitan. Our solid results this quarter and continued revenue growth demonstrate the progress of our manufacturing focused strategy. Our ongoing momentum in aerospace and defense together with flagship customer proof points like General Motors, Toyota, and Rivian in automotive. Reinforced the structural demand we see across our highest value verticals. While the larger orders now driving our pipeline take longer to close. And the timing is more variable, our third quarter show what our production focused strategy can deliver. We remain focused on converting customer engagement into qualified recurring production and are confident in the demand behind these programs. And in the long term path ahead. With that, let's open it up for questions. Operator?

Operator: Thank you. We will now be conducting a question and answer session. If you are on a speakerphone, it may be necessary to pick up your handset before pressing *1. And as a reminder, we ask that you please ask 1 question and 1 follow-up and then return to the queue. First question is coming from Jim Ricchiuti from Needham and Company. Your line is now live.

James Andrew Ricchiuti: Hi, thank you. Good afternoon. Can you speak to the sequential decline and the flattish year over year performance, in consumables? And the follow-up relates to margins because you still managed to deliver better gross margins, a little surprising given the mix. So were systems margins better? Or is it a function, maybe, of a larger contribution from Stratasys Direct?

Eitan Zamir: Thank you, Jim for the question. First, I will start saying that we still anticipate that for the full year of 2026, we will have more consumable compared to the full year of 2025, I mentioned in previous calls that, you know, in the transition of our business, and the portfolio that we have, we have a range of, you know, $63 million, $64 million of consumables per quarter but certain quarters can be slightly higher and other quarters can be slightly lower. Last quarter, we $66.3 million, which was slightly higher than our normal average. This quarter was slightly lower but it does not mean anything about the demand. Nor about the coming quarter.

And we still see ourselves at least in the near term, with levels that are somewhere around the $63 million to $64 million on an average quarter. Got it.

Yoav Zeif: Maybe I can add. Maybe-- please. Maybe I can add. that is on the consumables. Jim, thank you for the call. And the question. In general, we are a company in transition. We put behind us the rapid prototyping and we move forward into manufacturing which is in a sense a blue ocean but we are the 1 developing this market with our manufacturing grade machines. We have the best machines in the industry. This transition is also coming with a change in our consumable portfolio and also in the utilizations of our machines.

So we will see some type of variability By the way, I think that the variability this quarter was mainly because people had equipped themselves with more material before they went to some vacations. But this is really tactical. The long term, we have more utilization in our machines, and we will see more utilization And that is why also in our guidance, we see that we will have overall year over year growth in our consumables. And Eitan, if you can relate to the gross margin?

Eitan Zamir: Sure. So, Jim, as we mentioned, this quarter, there were few 1 off items. Including tariff refund and also a few other items in the opposite direction. And we also mentioned how you should consider the, kind of average levels of gross margin in the near future. As you have mentioned, in the near future, it is between the 45% to 46% gross margins. As Yoav mentioned, we are in a transition period. So this is relevant only for the transition And as we leverage our portfolio and future growth engines and everything that Yoav just mentioned, we see ourselves going back to the level that we used to be in the last few years.

James Andrew Ricchiuti: And just on the reset to the full year, versus your prior expectations, you talk about longer sales cycles. Is that something you anticipate in some of those sales cycles extending into the first half of next year? Or is it also just a function of continued slow recovery in the legacy business? And that is it. Thank you.

Eitan Zamir: So Jim, it is. There is no change in the demand. The demand is high, continues to be high. We are talking about few large opportunities that were pushed out further than we anticipated. But I think it is also worth mentioning when you look on the sequential revenue for the last 3, 4 quarters from the beginning of the year We started the year with Q1 revenue of $132.7 million then we move to a revenue of $137.6 million This quarter, we are at $142.6 million And Q4, when you do the math with the revised guidance, it is between $143 million to $148 million.

I think we do see the sequential growth as we mentioned and promised at the beginning of the year. And as I mentioned, the reduction in revenue guidance is due to a few large deals that were pushed further. Thank you.

Operator: Our next question today is coming from Greg Palm from Craig Hallum. Your line is now live.

Greg Palm: Yes, thanks. So A and D, obviously, the bright spot I guess it implies that you are seeing some maybe significant weakness out-- outside of that in other verticals. I think you mentioned growth, dental, or growth in auto, dental. So I guess where are you seeing the most sort of softness overall?

Yoav Zeif: Hi, Greg. Thank you for the question. So the most important thing to notice is that our strategy is working. We can relate this separately to the quarter and to the trends, but our strategy is working. We are successfully moving from prototype to manufacturing And you can see it. Year over year, 4.1% growth, which means that we made sure that the use cases' growth outpaced the decline in rapid prototyping. And that is why we also maintain the annual growth expectations year over year compared to 2025. This is the most important thing to notice because we are in transition. 1 part of the business is declining, and another part is growing.

The parts that are growing now relating to your question directly, are mainly aerospace and defense, also Stratasys Direct. So the growth drivers are first and foremost the aerospace and defense, and I can also share the number more than 35% year over year, and the second 1 is the SDM which is supporting the aerospace and defense because our customers start printing in Stratasys Direct. And then they take the sales and print by themselves. Because of this growth, of aerospace and defense, we also saw system sales. Practically, system sales made a comeback, 12% year-over-year growth and 36% sequentially. The other use cases also grew. We are talking about tooling, are talking about automotive.

We are talking about dental. They contributed to our growth and they have a contribution also toward the recurring revenue because this is manufacturing application. So those are the growth drivers. Where did the business decline? You know, the usual suspects. Where we decided in our strategy, we are not going to fight or low end rapid prototyping. We let it go. For us, it is the growth in the high requirement. And as a result, we see repeated sales in those areas because we have a fantastic relationship, credible relationship with our customers, We are expanding with those customers We are deploying more across their organizations and you can see it. You can see it in GM.

You can see it in Rivian. You can see it in Toyota. And even in China in FAW. When they need high requirement, they go to Stratasys. This is the growth The decline is in the low-end rapid prototyping.

Greg Palm: Yep. Appreciate that color. And then I guess my other question is related to Mark Forged. Are there any financial repercussions from the termination? On your end?

Yoav Zeif: No financial repercussions.

Operator: Thank you. Our next question is coming from Brian Drab from William Blair. Your line is now live.

Brian Drab: Hi, thanks for taking my questions. Just follow-up on the MarkForged question, are you left in your thinking regarding expanding capabilities or capital allocation following discontinuing the discussions around acquiring MarkForged. there is obviously some technology there that you are interested in. Can you develop it internally? Or you go look and try and get it elsewhere.

Yoav Zeif: Thank you, Brian. it is very clear both parties decided that it is better at this point in time, from both parties perspective, to terminate. Now, there are also good technologies there. But I want to take a step back and share that from our perspective, we wanted the deal. it is a complementary technology. it is not a transformative 1 for Stratasys. We are still the leaders in FDM It does not change the strength of our position. Or the direction of us going forward standalone. Having said that, there are alternatives. We remained committed to be at the forefront of FDM with advanced additive manufacturing There are other alternatives There are other technologies that will put us there.

Okay. Got it. Got it. Thank you.

Brian Drab: And then non GAAP operating expense in the quarter was 45.9% of sales. Ticked up a little bit year over year. How should we model that for the fourth quarter? And what direction does that go in 2027?

Eitan Zamir: Thank you, Brian, for the question. So our OpEx in the last few quarters was relatively flattish. When you look on our new guidance and you do the math, you will see that our OpEx in Q4 is going to be lower than Q3 and basically from the last 3 quarters. As we did in the past, we continue to monitor very tightly. Our cost and find areas of savings in this discretionary items without changing our approach and our strategy about investing in R and D and future technologies. And that is what we are going to do, and that will positively impact reduce 20. Q4, sorry, OpEx. Regarding 2027, it is too early.

We are not providing direction on that. Thank you.

Operator: Our next question today is coming from Troy Jensen from Cantor Fitzgerald. Your line is now live.

Troy Jensen: Hey, gentlemen. Thanks for taking my questions here. A question for you, Eitan. I would be curious to know if given all these larger deals in the quarter and in the pipeline, you have anybody at or near 10% of sales, or would we expect to next year?

Eitan Zamir: We do not get too specifics. For now, we do not have 10%. As you probably know, if we were to have at least in our annual report, should have provided disclosure on this. At this point, we do not have 10%.

Troy Jensen: Would you expect to have some in 2027?

Eitan Zamir: Oh, it is Oh, it is too-- it is hard to say. Those large deals as we all know, they take time to complete. So it is too early to know.

Yoav Zeif: I would like to add something, Troy. And thank you for the question. The nature of the business is changing. And you can see it in our, earnings every quarter. We have more multi systems deals than we ever had, and less 1-offs. And it has an impact on everything. On how you support, how you close the deal, how you support the deal going forward, how you adapt your back end Everything is different. it is a. We are. And this is what we wanted to be in. it is a transition not only in the front end. it is also a transition of the entire company to support manufacturing. And we are happy that we are experiencing it.

Troy Jensen: And for my follow-up, guess I would be curious, powder bed platforms, you guys have a SAF platform, Obviously, HP came out with a lower priced product that is, you know, pretty good, and Formlabs is there now too. Just on SAF, I guess, when you guys launched it, I thought it was gonna be a platform where there would be other products, other dimensions. Just love to get an update on where you guys are there.

Yoav Zeif: You should hold your breath. You should hold your breath because we are focusing on high-requirement, large-format,, also in this space. We are much more interested in the large corporate and to have SaaS as a backbone and to make sure that it is a real backbone for companies like GM, and aerospace and defense And others, we are not going to compete with $20,000 or $30,000 SAF machine. it is not for us. it is not our value proposition. You cannot send an application engineer with a $20,000 machine. But it is definitely an evolving platform and you will see more Thank you.

Operator: Our next question today is a follow-up from Jim Ricchiuti from Needham and Company. Your line is now live.

James Andrew Ricchiuti: Thanks. You may have mentioned this, but for some of the larger deal business that slipped out a bit Can you say did you say what end markets they were coming from? And just in general, any thoughts on 2027, just given what you are seeing in the market?

Yoav Zeif: Jim, it is, you know, by nature, deals that are focusing on our use cases on our industrial solution, and it is a mix Some of them are aerospace and defense, some of them are service bureaus, But this is the nature. it is manufacturing. Okay. Thank you.

Operator: Thank you. We reached the end of our question and answer session. I would like to turn the floor back over for any further or closing comments.

Yonah Lloyd: Thank you for joining us. We look forward to updating you again next quarter.

Operator: Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

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