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3D Systems' (DDD) Q3 Loss Narrower Than Expected, Sales Miss
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3D Systems (DDD - Free Report) reported a third-quarter 2022 non-GAAP loss of 5 cents per share, narrower than the Zacks Consensus Estimate of a loss of 9 cents. The bottom line compared unfavorably with the prior-year quarter’s earnings of 8 cents per share.
In the third quarter of 2022, 3D Systems reported revenues of $132.3 million, down 15.3% from the year-ago quarter and 5.5% from the previous quarter. Excluding the impact of business divestments in 2022 and on a constant currency basis, revenues increased 2.7% year over year. The top line lagged the consensus mark of $137.4 million for the third consecutive quarter.
3D Systems’ third-quarter performance reflected impacts of inflationary pressure, foreign exchange risks and supply chain disruptions, among other ongoing macroeconomic constraints.
Shares of DDD have slumped 73.3% in the past year.
3D Systems Corporation Price, Consensus and EPS Surprise
In the third quarter, product revenues represented 72.8% of the total revenues and decreased 11.6% to $96.3 million. Revenues from Services, which accounted for 27.1% of revenues, plunged 23.9% year over year to $35.9 million.
Revenues from the Healthcare segment fell 16% year over year to $64.2 million. The figure decreased 10.5% from the prior quarter. Excluding the impact of business divestments, the segment’s revenues decreased 3.5% year over year.
The Industrial Division revenues decreased 14.6% year over year to $68.1 million and 0.3% sequentially. Excluding the impact of business divestments, the unit’s revenues increased 9%. The company witnessed solid demand for products, as well as materials.
Operating Details
During the third quarter of 2022, 3D Systems’ non-GAAP gross profit decreased 4.5% year over year to $52.8 million. Consequently, the non-GAAP gross profit margin contracted 60 basis points (bps) to 39.9%. This decrease was driven by year-over-year product mix changes, due to divestitures and increased supply chain disruptions.
Non-GAAP operating expenses increased 18.3% to $58.3 million. The increase was due to spending related to future growth, which includes expenses from acquisitions, research and development, and corporate infrastructure.
Non-GAAP operating loss was $5.5 million compared with the year-ago operating income of $6 million.
Adjusted EBITDA was negative $0.3 million. The margin of negative 0.2% reflected the inflationary impact on input costs and gradual investments for portfolio & business growth.
Balance Sheet Details
The company exited the third quarter with cash, cash equivalents and short-term investments of $609.4 million, lower than the prior quarter's $638.2 million. As of Sep 30, 2022, 3D Systems had a total debt of $448.9 million, slightly up from the previous quarter’s $448.1 million.
In the first nine months of 2022, the company utilized $52.4 million of cash from operational activities.
Guidance
3D Systems trimmed its full-year 2022 guidance for the third time. The company now expects revenues between $535 million and $545 million compared with the previously expected band of $530-$570 million. The company still projects non-GAAP gross margin to be 39-41%.
Non-GAAP operating expense is estimated to be $240-$245 million, decreasing the lower end from the earlier projection of $245-$250 million.
Management provided this guidance with the assumption that the pandemic, supply chain disruptions or any geopolitical events will not be of any concern in 2022.
Zacks Rank & Key Picks
3D Systems currently carries a Zacks Rank #4 (Sell).
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3D Systems' (DDD) Q3 Loss Narrower Than Expected, Sales Miss
3D Systems (DDD - Free Report) reported a third-quarter 2022 non-GAAP loss of 5 cents per share, narrower than the Zacks Consensus Estimate of a loss of 9 cents. The bottom line compared unfavorably with the prior-year quarter’s earnings of 8 cents per share.
In the third quarter of 2022, 3D Systems reported revenues of $132.3 million, down 15.3% from the year-ago quarter and 5.5% from the previous quarter. Excluding the impact of business divestments in 2022 and on a constant currency basis, revenues increased 2.7% year over year. The top line lagged the consensus mark of $137.4 million for the third consecutive quarter.
3D Systems’ third-quarter performance reflected impacts of inflationary pressure, foreign exchange risks and supply chain disruptions, among other ongoing macroeconomic constraints.
Shares of DDD have slumped 73.3% in the past year.
3D Systems Corporation Price, Consensus and EPS Surprise
3D Systems Corporation price-consensus-eps-surprise-chart | 3D Systems Corporation Quote
Quarter in Detail
In the third quarter, product revenues represented 72.8% of the total revenues and decreased 11.6% to $96.3 million. Revenues from Services, which accounted for 27.1% of revenues, plunged 23.9% year over year to $35.9 million.
Revenues from the Healthcare segment fell 16% year over year to $64.2 million. The figure decreased 10.5% from the prior quarter. Excluding the impact of business divestments, the segment’s revenues decreased 3.5% year over year.
The Industrial Division revenues decreased 14.6% year over year to $68.1 million and 0.3% sequentially. Excluding the impact of business divestments, the unit’s revenues increased 9%. The company witnessed solid demand for products, as well as materials.
Operating Details
During the third quarter of 2022, 3D Systems’ non-GAAP gross profit decreased 4.5% year over year to $52.8 million. Consequently, the non-GAAP gross profit margin contracted 60 basis points (bps) to 39.9%. This decrease was driven by year-over-year product mix changes, due to divestitures and increased supply chain disruptions.
Non-GAAP operating expenses increased 18.3% to $58.3 million. The increase was due to spending related to future growth, which includes expenses from acquisitions, research and development, and corporate infrastructure.
Non-GAAP operating loss was $5.5 million compared with the year-ago operating income of $6 million.
Adjusted EBITDA was negative $0.3 million. The margin of negative 0.2% reflected the inflationary impact on input costs and gradual investments for portfolio & business growth.
Balance Sheet Details
The company exited the third quarter with cash, cash equivalents and short-term investments of $609.4 million, lower than the prior quarter's $638.2 million. As of Sep 30, 2022, 3D Systems had a total debt of $448.9 million, slightly up from the previous quarter’s $448.1 million.
In the first nine months of 2022, the company utilized $52.4 million of cash from operational activities.
Guidance
3D Systems trimmed its full-year 2022 guidance for the third time. The company now expects revenues between $535 million and $545 million compared with the previously expected band of $530-$570 million. The company still projects non-GAAP gross margin to be 39-41%.
Non-GAAP operating expense is estimated to be $240-$245 million, decreasing the lower end from the earlier projection of $245-$250 million.
Management provided this guidance with the assumption that the pandemic, supply chain disruptions or any geopolitical events will not be of any concern in 2022.
Zacks Rank & Key Picks
3D Systems currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader Computer and Technology sector are Zscaler (ZS - Free Report) , Celestica (CLS - Free Report) and Okta (OKTA - Free Report) , each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Zscaler's first-quarter fiscal 2023 earnings has been revised 7 cents north to 26 cents per share over the past 60 days. For fiscal 2023, earnings estimates have moved north by 15 cents to $1.18 per share in the past 60 days.
ZS' earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 28.6%. Shares of the company have declined 66% in the past year.
The Zacks Consensus Estimate for Celestica’s fourth-quarter 2022 earnings has increased by 9 cents to 53 cents per share over the past 30 days. For 2022, earnings estimates have moved 16 cents up to $1.86 per share in the past 30 days.
CLS' earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 11.8%. Shares of the company have declined 4.3% in the past year.
The Zacks Consensus Estimate for Okta's third-quarter fiscal 2023 loss has been revised 3 cents northward to 24 cents per share over the past 90 days. For fiscal 2023, loss estimates have improved by 3 cents to 72 cents per share in the past 60 days.
OKTA’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 45.5%. Shares of the company have plunged 82.2% in the past year.