Stratasys, Ltd.

Greetings. Welcome to the Stratasys Q1 2022 conference call and webcast. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Yonah Lloyd, Chief Communications Officer and Vice President of Investor Relations. You may begin.

Good afternoon, everyone, and thank you for joining us to discuss our 2022 first quarter financial results. On the poll with us today are our CEO, Dr. Yoav Zaif, and our 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, including 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 you will hear 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 set forth in forward-looking statements, please refer to the risk factors discussed or referenced in Stratasys' annual report on Form 20F for the 2021 year. Please also refer to our operating and financial review and prospects for the 2021 year. and for the first quarter of 2022, which are included as item five of that annual report and in exhibit 99.2 to the report on form 6K that we are furnishing to the SEC tomorrow, respectively. Please also see the press release that announces our earnings for the first quarter of 2022, which is attached as exhibit 99.1 to a separate report on form 6K that we are furnishing to the SEC today. In order to obtain updated information throughout the year concerning our quarterly results of operations and the risks and other factors that most impact those results, please see the quarterly earnings press releases and our quarterly operating and financial review and prospects, each of which will be attached as an exhibit to our report on Form 6K that we will furnish to the SEC on a quarterly basis over the course of the year. 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. The 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 Zay. Yoav?

Thank you, Yonah. Good afternoon, everyone, and thank you for joining us. Today, I will touch on the highlights of our first quarter and share insights on a number of key milestones achieved so far in 2022. I will then hand it off to Eitan to discuss our financial results and outlook in more detail. The first quarter was our strongest in six years, a great start to an exciting year for Strategies. We delivered solid results that include contributions from across our platform to drive top-line growth and improve margins. All of our technologies grew, and I'm happy to say that all of our key businesses showed improvement compared to our pre-COVID first quarter of 2019. We are particularly excited by the early momentum from our new Origin P3 H350 SAF and neo systems designed specifically for high-volume production of end-use parts. Our focus on execution is yielding results that demonstrate how our strategy to grow our leadership position in polymer 3D printing is working. Our revenues of $163.4 million were up 22% versus the prior year quarter. We see particular strength in systems, which grew 37%, and we ended the quarter with a robust balance sheet that included over $475 million of cash and no debt. During the first quarter, we expanded our penetration further into applications for aerospace, automotive, and fashion we tailored industry-specific solutions. For example, working with our partner Lockheed Martin, we uniquely qualified a high-performance antero material for aerospace and use power. In automotive, Redford Motors is now second auto OEM, using all five of our technologies for use in design, prototypes, tooling and final parts used in vehicle production. We also officially launched the commercialization of our fashion solution with TechStyle, that's T-E-C-H style, the industry's first 3D printer designed specifically for printing direct to garment and other end products. It opens unlimited possibilities for the fashion industry to personalize and customize premium textiles, clothing, bags, and accessories, footwear, and many other fashion applications. I would like to highlight three important milestones reached since the close of the quarter that we expect will contribute to our ongoing efforts to outperform. First, we announced the creation of a new entity comprised of MakerBot and Ultimaker. With our focus on industrial, healthcare, and production-scale polymer 3D printing for manufacturing, we determined that MakerBot, a desktop solution, fell outside of our core businesses. The transaction serves several purposes. It allows us to further concentrate our efforts to grow our leadership position in our area of focus. It has a margin accretive benefit on our business and our commercial agreement provides us access to entry-level 3D printing users, allowing us to potentially realize incremental synergies without distracting our resources. We believe that the desktop sector is growing at a healthy pace and that the new company will be a leading force in that industry. and we view our investment as having the potential to realize incremental long-term value for our shareholders. Second, we recently published our inaugural report on environmental, social, and governance activities, which we believe is the first report published to GRI standards in our industry by an OEM. This report outlines our commitment to ESG, and establishes benchmarks for future targets. Our sustainability priorities include design for responsible production and consumption, transparency, people-first initiatives, and social impact programs. We are also focusing on renewable energy projects, quality education, industry innovation, and climate action. The 3D printing industry is ideally situated to drive innovation and improvement in manufacturing from a sustainability perspective, and Stratasys is aiming to lead those efforts. I encourage visiting our website to review the report. And third, last week we hosted our annual flagship manufacturing virtual event, where we announced a number of new product updates, which will strengthen our market-leading offerings and the value potential our product can bring to customers. PA12, the most popular industrial 3D printing material, is expected to be available later this year for our H350 printers. Also for the H350, we announced the upcoming availability of polypropylene, which is very popular in traditional manufacturing, but not widely available in 3D printing. This material further demonstrates the competitive superiority that our SAP technology provides in powder bed space with respect to material, speed, accuracy, cost per part, and total cost of ownership. In FDM, we are upgrading our F123 series with the launch of the F190CR and the F370CR systems CR means composite ready and includes the new nylon CF10, a carbon fiber material that is both exceptionally strong and light, thereby expanding the end market opportunities for the F123 series. We also announced our first Stratasys validated FDM materials from third party materials partners, which our channels will begin to sell in the second half of 2022. It's a great example of our open material ecosystem approach, beginning to bear fruit. For our P3 technology, we are adding Rabkat print software to Origin, completing the integration effort to have a single platform across all of our core manufacturing systems. We announced the availability of the first Origin-compatible materials from our Origin open material license. And importantly, we launched Origin Local, an offline, non-cloud version, which is ideal for use by certain defense and government applications. When you consider all of these developments, along with the new product that we recently launched, you can see why we are so excited about the future. As we execute on our strategy and build momentum, customers continue to permanently replace a number of their traditional manufacturing choices with our additive manufacturing solutions, expressing their long-term confidence in strategies. The recent supply chain and related issues have been a catalyst across industries to rethink how they manage their product life cycle. We see it happening with leading companies such as General Atomics, which invested in both Stratasys and Stratasys Direct and has been expanding its additive manufacturing program for unmanned aerial vehicles beyond tooling to end-use parts. They have a goal to increase the percentage of parts using additive on their UAV drones to 50% on their smaller ones and mid-single percent on the larger ones. We see it with healthcare companies like Medtronic, which has moved from machine tools to 3D printed tools with strategies because they can create more accurate complex parts while reducing costs by 80%, saving millions of dollars. And we see it with transportation giants like Alstom, which is 3D printing spare parts, tens of thousands of them, As part of its industry of the future program, reducing its dependence on outside suppliers while reducing lead time by 95%. There are many more such changes taking place across industries, and we believe that this clearly shows the path that manufacturers are on as they make their production lines more efficient, less costly, more sustainable, and simply better with strategies. We are also encouraged to see the US government and large manufacturers step up to help more companies get involved in our industry through the additive manufacturing forward program. This initiative was announced by the White House earlier this month and reflects their belief in 3D printing's benefits to the manufacturing economy. This includes building more resilient supply chains and on-shoring manufacturing to help grow the economy. The program is specifically designed to help suppliers to companies like Raytheon and Lockheed invest more in additive manufacturing. GE Aviation, Honeywell and Siemens are also some of the initial participant companies. While many of our largest customers are building out sophisticated advanced manufacturing centers. It's their suppliers that manufacture a lot of their end-use parts. This program helps incentivize more companies to invest in additive manufacturing, given large OEMs are now committing to purchasing additively produced products. The program also will provide training, technical assistance, and standout developments. all things needed to help additive manufacturing to go in mainstream. And Stratasys has the full solution and broadest portfolio to support this initiative. With that, I will now turn the call over to our CFO, Eitan Zamir, to share the financial results and update our outlook for 2022. Eitan?