3D Systems Corp. Q4 FY2025 earnings call

Jeff Graves mentioned executing well on 2025 savings initiatives and new product launches, with a stronger finish to 2025. Highlights from fourth quarter included overall revenue increase above guidance, strength in printer and material sales driven by new product launches. Key growth markets like aerospace and defense (16% full year growth, expecting over 20% in 2026), personalized health services (double-digit growth in 2025, largest healthcare segment), and dental (shipments of commercial NextDent Jetta denture platform solution in fourth quarter, with global addressable market discussed). Phyllis Nordstrom noted completion of divestiture of Geomagic software business on April 1, 2025, and referenced prior year accounting adjustments. Mentioned key accomplishments in 2025 like driving expense reductions, supporting new product launches, strengthening balance sheet, and improving operational excellence.

Fourth quarter consolidated revenue was $106.3 million, an increase of 3% year-over-year, adjusting for GeoMagic. When further adjusting for the regenerative medicine adjustment impacting prior year quarter, consolidated revenue declined 5%. Industrial solutions revenue was $55.8 million, an increase of 15% sequentially. Healthcare solutions revenue of $50.5 million grew 18% sequentially. Full year 2025 consolidated revenue was $387 million. When adjusting for the divestiture of Geomagic, revenue declined 7% year-over-year, or 9% when adjusting for both Geomagic and the prior year regenerative medicine adjustment. Non-GAAP gross margin for fourth quarter was 31%, up 3% when adjusting for Geomagic and down 2% when adjusting for both Geomagic and Regenerative Medicine. For full year 2025, non-GAAP gross margin was 34.3%, down 70 basis points when adjusting for Geomagic and down 2 percentage points when adjusting for both Geomagic and Regenerative Medicine. Non-GAAP operating expenses in fourth quarter were $43 million, down 23% or $13 million from the prior year period when adjusting for GeoMagic. For full year, non-GAAP operating expenses were $196 million, a reduction of 19% or $46 million year-over-year when adjusting for GeoMagic. Adjusted EBITDA for fourth quarter was negative 5.3 million, an improvement of 17 million compared to the prior year when adjusting for GeoMagic. For full year 2025, adjusted EBITDA was negative 45.4 million, an improvement of 31 million when adjusting for GeoMagic. Full year 2025 non-GAAP loss per share was 37 cents, an improvement from a loss of 62 cents in the prior year period.

Given the current geopolitical environment and its potential impact on near-term macroeconomic conditions, 3D Systems limits financial guidance for the first quarter of 2026. Expect revenue to be in the range of $91 million to $94 million and adjusted EBITDA to be within the range of a loss of $5 million to a loss of $3 million for the quarter. Key contributors include continued cost management discipline, consistent execution of core business, strong performance in priority markets, and positive momentum in product sales driven by recent printer launches.

Q: Jim Rusciutti asked about operating expense seasonally weaker Q1 vs Q4 and how balanced A&D revenue streams are.

A: Phyllis said Q1 is seasonally more higher for spend, slight increases in Q1 and Q2 with steep drop off in Q3 and Q4. Jeff said A&D is diverse with four areas mentioned and is on track to be largest industrial segment in 2026.

Q: Greg Palm asked about Q4 revenue upside, gross margins, Q1 guidance.

A: Greg was told Q4 over-indexed in aerospace and defense, margin was lower due to printers carrying lower margin. Phyllis said Q1 is consistent with prior year excluding Geomagic, with strong operational growth and expense savings.

Q: Karen McCabe asked about R&D outlook and how much of aerospace and defense growth is from companies and government being more efficient.

A: Jeff said R&D spending has been throttled back as new products are launched, but still has a sizable budget. Regarding aerospace and defense, growth is from natural evolution of technology, cost savings from simplifying manufacturing processes, and reduced cycle times and safer supply chains