Stratasys, Ltd.

Greetings and welcome to the Stratasys Q4 2024 earnings conference call and webcast. At this time, all participants are in listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. You will be placed into question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Yonah Lloyd, CCO and VP of Investor Relations. Yonah, please go ahead.

Good morning, everyone, and thank you for joining us to discuss our 2024 fourth quarter and full year financial results. On the call 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 be available and can be accessed through the investor relations section of our website. 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 Stratis' annual reports on Form 20F for the 2023 year and for the 2024 year, which will be filed with the SEC within the coming few days. Please also refer to our operating and financial review and prospects for 2023 and 2024. which are included as item five of our annual reports on form 20F for 2023 and 2024. Please also see the press release that announces our earnings for the fourth quarter of 2024, which is attached as exhibit 99.1 to a report on form 6K that we are furnishing to the SEC today. 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 measure 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 Zaif. Yoav?

Thank you, Yonah. Good morning, everyone, and thank you for joining us. In 2024 and early 2025, we took several key steps to enhance our leadership and strengthen our position at the forefront of additive manufacturing. Despite the industry-wide challenges due to macro headwinds, our recent commitment to right-size the company and deliver profits and cash flow was executed successfully, further demonstrating the resilience of our operating model and effectiveness of our team. We also shared with you our strategy to be laser focused on the most compelling applications, particularly ones that center around full scale production. As we share each year in 2024, we generated 36% of our revenues from manufacturing, up from 34% in 2023 and up from just over 25% when we started tracking in 2020. We expect to see this percentage grow every year to a point where the majority of our business will be derived from end part manufacturing. The strength of our offering is our ability to deliver measurable value through best in class solutions that enable our customers to scale their additive manufacturing operations effectively. These solutions are the growth engine that will drive our revenue and profit over time. And our customer trust is reflected in the continued strong levels of engagement despite prolonged capital spending constraints. This challenging environment resulted in revenues being off 6.9% for the year after backing out divestment. Yet, our adjusted gross margin for the year expanded by 100 basis points to 49.2%, reflecting our continued focus on cost controls and operating efficiencies. Importantly, in the fourth quarter, we delivered $14.5 million of adjusted EBITDA, a 9.6% margin, and $0.12 adjusted EPS. We remain confident that when capital spending constraint eased, our operational efficiencies will result in sustainably higher profitability in the coming years. We continue to maintain a healthy balance sheet of $150.7 million in cash and equivalent and no debt. This provides stability and optionality that will support our growth through both organic investment and accretive acquisition opportunities. This financial strength will be bolstered by the upcoming $120 million investment in strategies by Fortissimo Capital, which is targeted to close in second quarter. At that time, we look forward to welcoming Fortissimo's founder and managing partner, Yuval Cohen, to join our board who brings more than 30 years of successful innovation driven investing experience. Now let me touch on some of our fourth quarter and more recent updates. Fused the position modeling, the technology invented by Stratasys and commercialized under the Stratasys FDM trademark is the world's most popular 3D printing technology. and we continue to innovate and enhance its capabilities for production at scale. As an example, in the fourth quarter, we launched the Fortus FDC filament dryer, a cabinet system that uses Stratasys patented FDM technology to maintain drying conditions for storage of consumable filament materials, increasing printer uptime by up to 2.7 times while eliminating moisture-related printing defects. This system, designed for continuous operation, represents a breakthrough in manufacturing efficiency for our large-scale production customers and is a key addition to our end-to-end solution that our customers have asked us to deliver. We continue to expand FDM's capabilities to address our target applications. We launched polycarbonate ESD, a specialized material that addresses critical needs in electronic manufacturing, particularly for tools and fixtures requiring electrostatic discharge protection. And we have enhanced our UZDEM-9085 material with expanded layer height capabilities and new color options. These materials are significant enablers for our defense partners that manufacture spare parts, and we have already seen an uptick in materials sales to the US Air Force as a result. Additionally, for Origin P3 DLP platform, we have added more than 30 new materials, including validating a new material by Forward AM, specifically designed for injection molding tooling. This exemplifies our commitment to production-grade manufacturing solution positioning P3 to deliver injection molding quality across various applications, from automotive components to precision flow adapters. We also announced several partnership and customer success updates. I'm particularly excited to highlight a key customer win with ArceloMetal, one of the world's largest steel manufacturers. Their adoption of FDM with GrabCAD software at their European research center demonstrate the versatility and effectiveness of our solutions in traditional manufacturing environments, where they have achieved significant reductions in lead time and enhanced design capabilities for tooling, previously unattainable through conventional machining methods. Switching to automotive. where we continue to set trends. We were named the official 3D printing partners of NASCAR. This multi-year agreement makes Stratasys the exclusive provider of 3D printing solutions for NASCAR in the creation of parts, tools, and to aid in accelerating design. This represents further penetration into the racing sector as more parts produced by traditional technologies will now come from our system. In aerospace, 3E EOS, a leader in electro-optic systems, announced that it significantly expanded its line of strategy systems, including the addition of multiple FDM 3D printers, bringing its fleet to 15. Its wide array of capabilities includes our F3300, Neo 800, F900, F770, Origin 1 models, and soft technologies. 3E is establishing a dedicated additive manufacturing center to support prototyping, tooling, and production. And its extended use of additive will allow the company to produce critical components much more quickly. And at a saving of roughly 40%, versus traditional manufacturing methods. And to help further drive customer success, we are announcing the promotion of Andreas Langfeld to the position of Chief Revenue Officer. Based in our Germany office, Andy has been with Stratasys for over 15 years. Since 2018, he has managed our EMEA business, transforming it into a stronger contributor under his leadership. and was recently appointed head of our APAC business as well. As CRO, Andy will enhance our global go-to-market strategy to help ensure customer satisfaction and retention and further build on the long-term partnership with our resellers ecosystem. With Andy in this role, we look forward to further strengthening our position and accelerating the widespread adoption of our solutions. Now, switching to dental. We were excited that the TruDent resin is available for sale in Europe as a CEMAR Class 1 medical device. TruDent is now set to deliver a scalable, efficient, and high-quality solution for denture production for dental labs and clinicians across Europe. which is expected to be nearly a $2.5 billion opportunity by 2028. Interest in the Trudent Resin is already strong, with many customers committed to onboarding early this year. And in our medical business, we recently announced the results of joint research conducted with Siemens Healthineers, which demonstrated the unprecedented accuracy of 3D-printed medical imaging phantoms to replicate human anatomy. By offering patient-specific anatomical models that accurately replicate anatomy and pathologies, hospitals and imaging centers can enhance the calibration and performance of CT scanners, ensuring more accurate diagnostics, improve patients' outcome, and lower costs. Turning to software, I'm excited to share some significant developments that strengthen our product offering and demonstrate our commitment to innovation. Our new GrabCAD IoT platform is a transformative solution to help our customers improve their utilization and uptime by providing accurate real-time data, predictive maintenance, and a more efficient support link. This represents a major step forward in digitizing customer interactions across our entire ecosystem of 3D printers, software and services. And we are pleased to note that GrabCAD's print software suite now supports all five of our core technologies. This unified software approach streamlines operations for our customers and reinforce our position as a comprehensive end-to-end solutions provider. To sum up, time and again, some of our most exciting use cases are in the most demanding environments and under the most unforgiving conditions, from high-speed auto racing to space travel to the advancement of state-of-the-art medical techniques. We continue to deliver differentiated products and solutions to customers as we further penetrate production applications at scale. The stage is set for return to growth based on accelerated adoption of additive manufacturing as macroeconomic conditions slowly improve. I will now turn the call over to Eitan to share the financial results and our initial outlook for 2025. Eitan?