#348 Market Growth Rate

[inkovsky]

China's combination of economic growth and the recovery of the RMB attracted funds to invest in the Chinese and Hong Kong stock markets, but the trend of Hong Kong stocks was first high and then low. The Hang Seng Index opened 591 points higher and hit an all-day high of 19,592 points. Then the increase gradually narrowed, hitting a low of 19,072 points. It closed up 128 points or 0.67% for the day at 19,129 points. The Technology Index rose 8 points or 0.22% to 3,924 points. point. Trading remained brisk, with main board turnover reaching HK$254.8 billion. ​

The U.S. Federal Reserve cut interest rates by half a percentage point last week, and many local banks rarely followed suit immediately, bringing surprises to the market and supporting the rise of Hong Kong stocks. In addition, the Mainland's "combination punch" economy, the People's Bank of China, the State Administration of Financial Supervision, and the China Securities Regulatory Commission jointly launched a series of rescue measures, which further stimulated the Hang Seng Index to rise above the 19,000 level in one fell swoop. With the cooperation, the transaction volume surged to over HK$240 billion

the previous day. The market is looking forward to the return of European and American funds to the Hong Kong stock market to catch up. If the market transactions continue to cooperate, with sufficient momentum, Hong Kong stocks are expected to rise further. The next target of the Hang Seng Index will be the May high of 19,706 points.

The multiple blockbuster economic stimulus measures announced by China on Tuesday have not solved the core problem of the Chinese economy: weak consumption and private investment, and more fiscal policies will be needed to follow up in the future. Therefore, although the Hong Kong, Shanghai and Shenzhen stock markets subsequently rose, they may not be sustainable.

European stock markets softened, with British, French and German stock markets falling 0.17%, 0.5% and 0.41% respectively.

The excitement brought by China's heavy-handed economic stimulus measures has subsided, and the market has refocused on the performance of the U.S. economy. U.S. stocks retreated from highs on Wednesday. After opening 27 points higher, the Dow once climbed 91 points to a new high of 42,299 points, and then fell 348 points to a low of 41,859 points. After breaking through the top, the S&P 500 index once turned around and fell 0.36%, with technology The stock-heavy Nasdaq has risen as much as 0.45%.

At the close of the U.S. stock market, the Dow fell 293 points, or 0.7%, to 41,914 points; the S&P 500 dropped 10 points, or 0.19%, to 5,722 points; the Nasdaq edged up 7 points, or 0.04%, to 18,082 points.

The U.S. dollar index fell first and then stabilized, rising 0.52% to 100.99 at the end; the Japanese yen fell 1.13%, hitting a low of 144.85 per dollar; the Australian dollar also fell 1.1% from its high in nearly a year to 68.17 US cents. Euro fell 0.53% to $1.1122.

[palmoilnews]

🇺🇸 April’s consumer price index — rose 0.3% for the month of April, slightly lower than the 0.4% forecast. The measure rose 3.4% year-over-year, in line with expectations, suggesting that inflation resumed its downward trend at the start of the second quarter in a boost to financial market expectations for a September interest rate cut. 🇨🇳🇵🇭 China has deployed dozens of coast guard and maritime militia ships toward Scarborough Shoal, a disputed atoll in the South China Sea, to block a fleet of about 100 small Filipino fishing boats. While such confrontations have become commonplace as Beijing tries to assert control over a region far from its borders, this was an escalation. 🇷🇺🇺🇦 The White House is watching as Russia’s new offensive picks up speed in Ukraine’s northeast. U.S. officials are privately concerned that it could change the trajectory of the war, perhaps even reversing Russia’s once-bleak prospects. 🇺🇸 President Biden and Donald Trump have agreed to debates in June and September, which would be their first onstage clashes in more than three years. 🇺🇸 Wall Street's three major indexes notched record closes on Wednesday with the benchmark S&P 500 (.SPX) and the Nasdaq (.IXIC) both advancing more than 1%, after a smaller-than-expected rise in consumer inflation bolstered investors' hopes for interest rate cuts by the Federal Reserve. * Dow 39,908 (+348/+0.88%) * S&P 5,308 (+61/+1.17%) * Nasdaq 16,742 (+231/+1.4%) 🇬🇺 European markets closed higher on Wednesday as global investors digested a cooler-than-expected U.S. inflation print. ⛽ * Oil prices rose nearly 1%* from a two-month low in the prior session as the market balanced bullish U.S. economic and crude storage data against the International Energy Agency's (IEA) forecast for weaker global oil demand growth. * Crude oil $78.63 (+0.61/+0.8%) * Brent crude $82.75 (+0.37/+0.5%) 👑 Gold hit a more than three-week high, aided by a weaker dollar and lower Treasury yields after data showed U.S. consumer prices rose less than expected in April, boosting chances the Federal Reserve will cut interest rates later this year. U.S. gold futures for June delivery rose 1.2% to $2,392.40 an ounce. 🌴 FCPO July (RM3,854, +39) ended up as the commodity's price was seen as competitive compared with rival oils, while the market awaited export and production performance data for the first half of the month. Exports of Malaysian palm oil products for May 1-15 fell 17.6% to 574,760 metric tons from 697,449 tons shipped during April 1-15, independent inspection company AmSpec Agri Malaysia said on Wednesday. According to cargo surveyor Intertek Testing Services, exports of Malaysian palm oil products for May 1-15 fell 5.2% to 600,777 metric tons from 633,680 metric tons shipped during the same period in April. India's palm oil imports rose to their highest level in three months in April as lower prices lured buyers, a leading trade body said on Tuesday. Imports rose 40.9% in April from the previous month to 684,094 metric tons. 🌱 Ahead of monthly U.S. soy crushing data due on Wednesday from the National Oilseed Processors Association (NOPA), analysts surveyed by Reuters on average expect the trade group to report that its members crushed 183.072 million bushels of soybeans in April, down 6.8% from the record-high March total but up 5.7% from a year earlier.

[sanjay-chem]

Bentonite Market Size, Share, Demand & Trends by 2031

Increasing oil drilling and construction activities across the world is expected to create increasing demand for bentonite between 2021 and 2031, finds Future Market Insights (FMI) in a new study. According to the report, the market is expected to reach US$ 2.37 Bn by the end of 2031. Through the course of the forecast period it is expected to record solid growth, especially since developing economies are expected to offer lucrative growth opportunities.

Bentonite is a highly colloidal clay mineral containing variety of accessory minerals such as quartz, feldspar, calcite and gypsum. Properties such as water absorption, swelling, viscosity, hydration and thixotropy makes bentonite a valuable material across various industries. Chemical and mechanical properties of bentonite materials can be altered through various additions and combinations of raw materials, which is based on application or use of finished product.

Bentonite is known for its versatile nature and application in numerous industries such as construction, oil & gas, food, pharmaceutical, foundry and among others. Of these, the oil industry is expected to remain dominant, accounting for nearly one-fourth of bentonite sold globally.

Get Your 30% Discount Now! Request for Sample @ https://www.futuremarketinsights.com/reports/sample/rep-gb-348

Key Takeaways

Driven     by applications across diverse industries, the bentonite market will     exhibit a CAGR of 6.2% between 2021 and 2031

With     oil and drilling activities pacing up, the U.S. is expected to account for     88% of bentonite sales in North America

Bentonite     production in France and Poland will pick up at an impressive pace post     lacklustre growth registered in 2020

Germany     and Russia are expected to emerge as leading markets for bentonite in     Europe

China     is expected to spearhead growth of bentonite market in East Asia

“Role of bentonites in oil drilling applications continues to propel the overall market growth. However, due to stringent regulation imposed by governments on the use of some of the intermediate chemicals, which are used collectively with bentonite in drilling applications, the market might witness some hindrances to growth. Nonetheless, key manufacturers are focusing on enhancing the production rate which will aid the overall expansion of the market in the coming years.” says FMI analyst.

Competitive Landscape

The market is moderately fragmented with key players accounting for small market share. Some of the key players in the market are Kemira OYJ, Mineral Technologies Inc. Clariant AG, Kunimine Industries Co., Ltd. Charles B Chrystal Co. Inc, Ashapura Group of Companies, Halliburton Co, Wyo-Ben, Inc, Polymer Drilling Systems (PDS) Co, Inc, Black Hills Bentonite, LLC, Alfa Aesar, Kutch Minerals, among others. These key players are expected to invest in new technology developments and their networks expansion in order to maintain their market shares.

Bentonite Market by Category

Product Type

Sodium

Calcium

Others

Application

Drilling     Fluids

Binder

Sealant

Absorbent/Adsrobent

Clarification     Agent

Others

End- Use Industry

Oil

Foundry

Construction

Food

Pharmaceuticals

Others

Region

North     America

Latin     America

Europe

East     Asia

South     Asia Pacific

Middle     East & Africa

Browse Full Report: https://www.futuremarketinsights.com/reports/bentonite-market

[healthcare-domain]

Cell and Gene Therapy Manufacturing Services Market worth $13.8 billion by 2026 - Exclusive Report by MarketsandMarkets™

According to the new market research report "Cell and Gene Therapy Manufacturing Services Market by Type (Allogeneic, Autologous, Viral Vector, Non-viral vector), Indication (Cancer, Orthopedic), Application (Clinical, Commercial), End User (Pharma & Biotech, Academia) - Global Forecast to 2026", published by MarketsandMarkets™, the global cell therapy manufacturing services market size is projected to reach USD 13.8 billion by 2026 from USD 7.7 billion in 2021, at a CAGR of 12.4% during the forecast period.

Browse and in-depth TOC on "Cell & Gene Therapy Manufacturing Services Market"

348 - Tables 44 - Figures 299 – Pages

Download PDF Brochure: https://www.marketsandmarkets.com/pdfdownloadNew.asp?id=180609441

The Growth in this market is primarily driven by the high incidence of cancer and other target diseases, increasing investments in pharmaceutical R&D, investments in advanced technologies by CDMOs, and increasing partnerships & agreements between pharmaceutical companies and CDMOs. However, the high operational costs associated with cell & gene therapy manufacturing are expected to restrain the growth of this market to a certain extent.

The cell therapy segment accounted for the largest share of the type segment in the Cell and Gene Therapy Manufacturing Services Market in 2020.

On the basis of type, the gene therapy manufacturing services market is broadly segmented into cell therapy and gene therapy. In 2020, cell therapy accounted for the largest share of the market.

Most pharmaceutical companies continue to invest heavily in the development of novel drugs and devices. The pharmaceutical industry, in particular, is R&D-intensive. Pharmaceutical companies invest in R&D to deliver high-quality and innovative products to the market.

The trend suggests that the top pharma companies are increasing their R&D efficiencies through heavy R&D investments to see returns on their investment in the long run and through collaborative R&D efforts.

According to an Evaluate Pharma report, the worldwide pharmaceutical R&D spending was valued at USD 136 billion in 2012; this increased to USD 186 billion in 2019. With the impact of COVID-19, the global pharma R&D growth rate has dropped to 0.3% from 2019–2020.

As per report findings, this R&D spend is expected to grow steadily between 2019 and 2026 at a CAGR of 3.2% to reach USD 232.5 billion, slower than the historical CAGR of 4.6% between 2012 and 2019.

For More Info @ https://www.prnewswire.com/news-releases/cell-and-gene-therapy-manufacturing-services-market-worth-13-8-billion-by-2026-exclusive-report-by-marketsandmarkets-tm--818541806.html

[sweetyiarc]

Connected Streetlights Market Size to Grow at a CAGR of 14.82% During 2021-2026

Connected streetlights Market size was valued at $1.3 billion in 2020 and it is estimated to grow at a CAGR of 14.82% during 2021-2026. The growth is mainly attributed to the high penetration of internet of things (IoT), constant innovation in mobile networks along with wireless technology, increasing demand for efficient advanced lighting solutions across industries and awareness regarding energy conservation. Furthermore, exponentially growing investments in smart city projects and government initiatives for greener strategies to support sustainable development across the world are the major driving factors of connected streetlights market. Additionally, this technology also helps in environmental monitoring, video surveillance and traffic monitoring, which enhances the public safety level and creates massive growth opportunities for IoT-enabled connected streetlights. Hence, owing to the above mentioned factors the connected streetlights industry is gaining traction in the forecast period 2021-2026.

Connected Streetlights Market Segment Analysis – By Component

Connected streetlights market is segmented into hardware, software and services, based on component. Hardware segment is further segmented into LED Lamps, Sodium Vapor Lamps, Drivers and Ballast, Sensors, Switches, Controllers and others. Among all the components, hardware dominated the market with a share of 25.16% in 2020, due to the increasing environmental concerns across the world and increasing adoption of light emitting diode (LED) lights for its several benefits. Many countries across the globe are investing heavily for the installation of more reliable LED street lighting system. For instance, till April 2019, Energy Efficiency Services Ltd. (EESL) replaced over 89.15 lakh street lights with LEDs across 1,400 Indian cities. Similarly, a recent report of Pacific Northwest National Laboratory shows that, Chicago will save $10 million within a year in energy cost with the help of LEDs. Similarly a report from Department of Energy states that, by 2027, the usage of LEDs will save 348 Terawatt-hour (TWh) of electricity and $30 billion electricity cost, compared to non-LED lightings. In addition, increasing environmental awareness among the people creates a massive requirement for this technology that fuels the growth of this market. This technology is more environment friendly, energy efficient, than any other traditional lighting system. Moreover, LED technology offers durability, which means longer lifespan and compactness. This in turn boosts the adoption rate of this solution and triggers the growth of this market. Such advantages are analysed to drive the market in the forecast period 2021-2026.

Request for Sample Report  @ https://www.industryarc.com/pdfdownload.php?id=509477

Report Price: $ 5900 (Single User License)

Connected Streetlights Market Segment Analysis- By End User Industry

On the basis of end-user industry, this market is segmented into residential, commercial, industrial and Public & Government.Public & Government sector is analyzed to grow with the fastest CAGR of 15.19% during 2021-2026. Increasing investment in smart city projects, penetration of internet of things (IoT), government’s initiatives in promoting more sustainable methods for economical as well as environmental development, increasing popularity of LED lights, environmental awareness and others are the key influencing factors behind this growth. For instance, in June 2019, Havells India enhanced their manufacturing capabilities by five times, to 25 lakh lamps from 5 lakh lamps per month to assist the government’s initiatives for improving efficiency in the power & energy sector. Furthermore, due to the pandemic, paper bureaucracy dependent Japan is taking initiatives toward its digital transformation, resulting in high investments on smart city projects by the Japanese Government which will work as a key influence for the digital transformation and economical revival of Japan. Apart from that, the adoption of solar lighting plays a major role in the growth of this market. Hence, the above mentioned factors are being seen as the opportunity for the players operating in the connected streetlights market during 2021-2026.

Connected Streetlights Market Segment Analysis- By Geography

North America region held the highest connected streetlights market share around 31.55% of in 2020. The growth is mainly driven by the early adoption of this technology, growth in internet of things (IoT) infrastructure, rising demand for energy efficient lights such as light emitting diode (LED), connected solar lights and others; and presence of prominent market players. Growing investment for smart cities and Governments’ initiatives for these projects are fueling the growth of this market. In May 2019, New Orleans invested $40 million in holistic smart city project to improve the citywide public safety system. Similarly, a Mexican town, Tequila is in the process of consolidating itself as a smart town under the name “Smart Tequila” and the local Government is also planning to complete the whole digitization process by the year 2040.Such strategic investments will create huge demand for IoT-enabled connected streetlights along with pedestrian lights that are also called piggyback lights and will drive the growth of connected streetlights market in this region during the forecast period 2021-2026.

Connected Streetlights Market Drivers

Increasing Investment in Smart City Projects:

One of the major drivers behind the growth of connected streetlights market is growing investment is smart city project. The number of smart city projects is analyzed to grow rapidly due to the public safety issues, urbanization, government’s initiatives in the form of investments, increasing concerns for environment, limited resources and others. These projects reduce the overall energy and maintenance costs and also open up new revenue opportunities. In June 2020, The Singapore Government announced to increase the investment in smart city projects and information technology by 30%. Similarly, in April 2021, Mitsubishi Corporation added a new urban transit oriented mixed use development project, to its already existing smart city program, near Jakarta. As the requirement of IoT-enabled connected streetlights is directly proportional to the number of smart city projects, thus,with growing investments in smart city projects across the globe, the demand for connected streetlights is also rising. These smart street lighting will help in building future-proof smart cities. For instance, In October 2019, UK-based smart city solution provider Telensa teamed up with Eaton Lighting to deliver connected solutions for outdoor lighting and related smart city applications across the world.

High Penetration of Wireless Technology and Digitization:

Growing penetration of wireless technology and increasing investment on wireless technology for digital transformation is analyzed to drive the connected streetlight market during the forecast period. In February 2020, Microsoft announced their $1.1 billion investment plan to drive the digital transformation in Mexico over next five years.Unlike wired connected streetlights such as PLC-based wired connected streetlights, wireless connected streetlights can be remotely monitored as well as controlled with the help of connected wireless networks. Along with this, the upfront cost of wireless streetlight is far less than PLC-based wired connected streetlights, which fuels the growth of this market. Moreover, connected streetlights technology can send information faster to a centralized management system through wireless technology than wired technology, which helps in controlling different parameters including voltage, current, temperature and others.Such advantages of wireless technology and increasing investment in wireless solutions are augmenting the growing adoption of connected streetlights globally.To meet the growing requirement of wireless connected streetlights players are launching advanced products. For instance, in October 2019, LED Eco Lights announced the launch of its new product - a networked wireless lighting control system, named Light Boss, which significantly reduces the energy and maintenance cost and monitors the usage and can be used across various sectors including commercial, industrial, education, healthcare and others. Hence, the above-mentioned factors are set to boost the market growth during 2021-2026.

Inquiry Before Buying @ https://www.industryarc.com/reports/request-quote?id=509477

Connected Streetlights Market Challenges

High Installation Cost:

Even though, connected streetlights market is growing rapidly, high installation cost of this technology hampers the growth of this market. The growing penetration of IoT creates huge demand for this IoT-enabled connected streetlights market. Since this technology includes various types of hardware such as LED lamps, sodium vapor lamps, drivers and ballast, sensors, switches, controllers and others as well as software solutions, the overall price of this solution rises.Hence, the rise in installation price will hamper the growth of this market during the forecast period 2021-2026.

Connected streetlights Market Landscape

Technology launches, Acquisitions,Collaboration, and R&D activities are key strategies adopted by players in the connected streetlights Industry Outlook. Connected streetlights top 10 companies includes General Electric, Koninklijke Philips N.V, Telensa Holdings Ltd., Echelon Corporation, Osram Licht AG, Signify Holding B.V., Cisco Systems, Inc.,Trilliant holdings Inc., AxiomTek Co., Ltd., Cree Inc. and others.

Acquisitions/Technology Launches

In July 2021, Signify announced about its acquisition of a UK-based company, Telensa Holdings, for smart cities. By acquiring Telensa, Signify added a narrow-band and TALQ-compliant solution to its feature-rich, open and secured systems. This will make smart city infrastructure affordable to the cities utilizing the unlicensed radio space.

In June 2020, The New York Power Authority (NYPA) collaborated with Signify company, to support Smart Street lighting NY. Under this program, over 50,000 LED streetlights already had been installed or are currently being installed across New York.

Key Takeaways

Hardware held the highest market share in 2020 and is anticipated to witness significant amount of growth, owing to increasing awareness regarding environmental issues and growing adoption of LED streetlights.

Public & Government sector is analysed to witness the fastest growth between 2021-2026. Rising requirement for cost effective, energy efficient lighting technology and smart city project initiatives are the key factors behind the growth.

North America held the major market share in 2020 and is anticipated to witness significant growth during forecast period, owing to the early adoption of this technology, rising investments in smart city projects and the presence of prominent market players.

Increasing smart city investment and penetration of wireless technology works as a growth driver for this market during 2021-2026.

The top players of this market includes General Electric, Koninklijke Philips N.V, Telensa Holdings Ltd., Echelon Corporation, Osram Licht AG and others.

Related Reports

A.Smart Lighting Market

https://www.industryarc.com/Report/15032/smart-lighting-market.html

B.LED Market

https://www.industryarc.com/Report/17127/led-market.html

For more Electronics Market reports, please click here

[marketinsightshare]

Connected Streetlights Market Size to Grow at a CAGR of 14.82% During 2021-2026

Connected streetlights Market size was valued at $1.3 billion in 2020 and it is estimated to grow at a CAGR of 14.82% during 2021-2026. The growth is mainly attributed to the high penetration of internet of things (IoT), constant innovation in mobile networks along with wireless technology, increasing demand for efficient advanced lighting solutions across industries and awareness regarding energy conservation. Furthermore, exponentially growing investments in smart city projects and government initiatives for greener strategies to support sustainable development across the world are the major driving factors of connected streetlights market. Additionally, this technology also helps in environmental monitoring, video surveillance and traffic monitoring, which enhances the public safety level and creates massive growth opportunities for IoT-enabled connected streetlights. Hence, owing to the above mentioned factors the connected streetlights industry is gaining traction in the forecast period 2021-2026.

Connected Streetlights Market Segment Analysis – By Component

Connected streetlights market is segmented into hardware, software and services, based on component. Hardware segment is further segmented into LED Lamps, Sodium Vapor Lamps, Drivers and Ballast, Sensors, Switches, Controllers and others. Among all the components, hardware dominated the market with a share of 25.16% in 2020, due to the increasing environmental concerns across the world and increasing adoption of light emitting diode (LED) lights for its several benefits. Many countries across the globe are investing heavily for the installation of more reliable LED street lighting system. For instance, till April 2019, Energy Efficiency Services Ltd. (EESL) replaced over 89.15 lakh street lights with LEDs across 1,400 Indian cities. Similarly, a recent report of Pacific Northwest National Laboratory shows that, Chicago will save $10 million within a year in energy cost with the help of LEDs. Similarly a report from Department of Energy states that, by 2027, the usage of LEDs will save 348 Terawatt-hour (TWh) of electricity and $30 billion electricity cost, compared to non-LED lightings. In addition, increasing environmental awareness among the people creates a massive requirement for this technology that fuels the growth of this market. This technology is more environment friendly, energy efficient, than any other traditional lighting system. Moreover, LED technology offers durability, which means longer lifespan and compactness. This in turn boosts the adoption rate of this solution and triggers the growth of this market. Such advantages are analysed to drive the market in the forecast period 2021-2026.

Request for Sample Report  @ https://www.industryarc.com/pdfdownload.php?id=509477

Report Price: $ 5900 (Single User License)

Connected Streetlights Market Segment Analysis- By End User Industry

On the basis of end-user industry, this market is segmented into residential, commercial, industrial and Public & Government.Public & Government sector is analyzed to grow with the fastest CAGR of 15.19% during 2021-2026. Increasing investment in smart city projects, penetration of internet of things (IoT), government’s initiatives in promoting more sustainable methods for economical as well as environmental development, increasing popularity of LED lights, environmental awareness and others are the key influencing factors behind this growth. For instance, in June 2019, Havells India enhanced their manufacturing capabilities by five times, to 25 lakh lamps from 5 lakh lamps per month to assist the government’s initiatives for improving efficiency in the power & energy sector. Furthermore, due to the pandemic, paper bureaucracy dependent Japan is taking initiatives toward its digital transformation, resulting in high investments on smart city projects by the Japanese Government which will work as a key influence for the digital transformation and economical revival of Japan. Apart from that, the adoption of solar lighting plays a major role in the growth of this market. Hence, the above mentioned factors are being seen as the opportunity for the players operating in the connected streetlights market during 2021-2026.

Connected Streetlights Market Segment Analysis- By Geography

North America region held the highest connected streetlights market share around 31.55% of in 2020. The growth is mainly driven by the early adoption of this technology, growth in internet of things (IoT) infrastructure, rising demand for energy efficient lights such as light emitting diode (LED), connected solar lights and others; and presence of prominent market players. Growing investment for smart cities and Governments’ initiatives for these projects are fueling the growth of this market. In May 2019, New Orleans invested $40 million in holistic smart city project to improve the citywide public safety system. Similarly, a Mexican town, Tequila is in the process of consolidating itself as a smart town under the name “Smart Tequila” and the local Government is also planning to complete the whole digitization process by the year 2040.Such strategic investments will create huge demand for IoT-enabled connected streetlights along with pedestrian lights that are also called piggyback lights and will drive the growth of connected streetlights market in this region during the forecast period 2021-2026.

Connected Streetlights Market Drivers

Increasing Investment in Smart City Projects:

One of the major drivers behind the growth of connected streetlights market is growing investment is smart city project. The number of smart city projects is analyzed to grow rapidly due to the public safety issues, urbanization, government’s initiatives in the form of investments, increasing concerns for environment, limited resources and others. These projects reduce the overall energy and maintenance costs and also open up new revenue opportunities. In June 2020, The Singapore Government announced to increase the investment in smart city projects and information technology by 30%. Similarly, in April 2021, Mitsubishi Corporation added a new urban transit oriented mixed use development project, to its already existing smart city program, near Jakarta. As the requirement of IoT-enabled connected streetlights is directly proportional to the number of smart city projects, thus,with growing investments in smart city projects across the globe, the demand for connected streetlights is also rising. These smart street lighting will help in building future-proof smart cities. For instance, In October 2019, UK-based smart city solution provider Telensa teamed up with Eaton Lighting to deliver connected solutions for outdoor lighting and related smart city applications across the world.

High Penetration of Wireless Technology and Digitization:

Growing penetration of wireless technology and increasing investment on wireless technology for digital transformation is analyzed to drive the connected streetlight market during the forecast period. In February 2020, Microsoft announced their $1.1 billion investment plan to drive the digital transformation in Mexico over next five years.Unlike wired connected streetlights such as PLC-based wired connected streetlights, wireless connected streetlights can be remotely monitored as well as controlled with the help of connected wireless networks. Along with this, the upfront cost of wireless streetlight is far less than PLC-based wired connected streetlights, which fuels the growth of this market. Moreover, connected streetlights technology can send information faster to a centralized management system through wireless technology than wired technology, which helps in controlling different parameters including voltage, current, temperature and others.Such advantages of wireless technology and increasing investment in wireless solutions are augmenting the growing adoption of connected streetlights globally.To meet the growing requirement of wireless connected streetlights players are launching advanced products. For instance, in October 2019, LED Eco Lights announced the launch of its new product - a networked wireless lighting control system, named Light Boss, which significantly reduces the energy and maintenance cost and monitors the usage and can be used across various sectors including commercial, industrial, education, healthcare and others. Hence, the above-mentioned factors are set to boost the market growth during 2021-2026.

Inquiry Before Buying @ https://www.industryarc.com/reports/request-quote?id=509477

Connected Streetlights Market Challenges

High Installation Cost:

Even though, connected streetlights market is growing rapidly, high installation cost of this technology hampers the growth of this market. The growing penetration of IoT creates huge demand for this IoT-enabled connected streetlights market. Since this technology includes various types of hardware such as LED lamps, sodium vapor lamps, drivers and ballast, sensors, switches, controllers and others as well as software solutions, the overall price of this solution rises.Hence, the rise in installation price will hamper the growth of this market during the forecast period 2021-2026.

Connected streetlights Market Landscape

Technology launches, Acquisitions,Collaboration, and R&D activities are key strategies adopted by players in the connected streetlights Industry Outlook. Connected streetlights top 10 companies includes General Electric, Koninklijke Philips N.V, Telensa Holdings Ltd., Echelon Corporation, Osram Licht AG, Signify Holding B.V., Cisco Systems, Inc.,Trilliant holdings Inc., AxiomTek Co., Ltd., Cree Inc. and others.

Acquisitions/Technology Launches

In July 2021, Signify announced about its acquisition of a UK-based company, Telensa Holdings, for smart cities. By acquiring Telensa, Signify added a narrow-band and TALQ-compliant solution to its feature-rich, open and secured systems. This will make smart city infrastructure affordable to the cities utilizing the unlicensed radio space.

In June 2020, The New York Power Authority (NYPA) collaborated with Signify company, to support Smart Street lighting NY. Under this program, over 50,000 LED streetlights already had been installed or are currently being installed across New York.

Key Takeaways

Hardware held the highest market share in 2020 and is anticipated to witness significant amount of growth, owing to increasing awareness regarding environmental issues and growing adoption of LED streetlights.

Public & Government sector is analysed to witness the fastest growth between 2021-2026. Rising requirement for cost effective, energy efficient lighting technology and smart city project initiatives are the key factors behind the growth.

North America held the major market share in 2020 and is anticipated to witness significant growth during forecast period, owing to the early adoption of this technology, rising investments in smart city projects and the presence of prominent market players.

Increasing smart city investment and penetration of wireless technology works as a growth driver for this market during 2021-2026.

The top players of this market includes General Electric, Koninklijke Philips N.V, Telensa Holdings Ltd., Echelon Corporation, Osram Licht AG and others.

Related Reports

A.Smart Lighting Market

https://www.industryarc.com/Report/15032/smart-lighting-market.html

B.LED Market

https://www.industryarc.com/Report/17127/led-market.html

For more Electronics Market reports, please click here

[researge]

Global Healthcare Packaging Plastics Market Study 2014-2025

Prismane Consulting is pleased to publish its Healthcare Packaging Plastics Market Market Study Report which includes historic and current market situation of Healthcare Packaging Plastics Market across several end-use industries.

Request Sample Report :  

https://prismaneconsulting.com/report_request_sample?_token=POQz6iglOoI3vPk7IrWBvikSZ9O0itP0i4nnEdcf&report_id=348

This market study describes the global Healthcare Packaging Plastics Market market, with focus on major countries and their subsequent demand across different applications and sub-applications. The study covers demand-supply analysis for regions including North America, Western Europe, Central & Eastern Europe, Central & South America, Asia-Pacific, Middle East and Africa and major countries like the U.S., Canada, Mexico, Germany, France, Italy, U.K., Spain, Russia, Poland, Turkey, China, Japan, India, South Korea, Thailand, Taiwan, South Africa, and Saudi Arabia. The market is segmented based on end-use which includes Drugs, Surgical Equipments, Injection Systems, and others.Healthcare Packaging Plastics Market Production capacity expansions, force majeure, de-bottlenecks, plant shutdowns and new product developments have been considered in the report.

Healthcare Packaging Plastics Market demand patterns are dramatically different between various regions and countries. In the areas with mature economies, demand growth for Healthcare Packaging Plastics Market is expected to fall well below global averages primarily due to the geographic shift of many manufacturing industries to areas of lower labor costs such as China, India, and the ASEAN region.

The primary driver for the growth in demand of Healthcare Packaging Plastics Market in Asia has been the migration of labor-intensive downstream conversion industries from developed high labor cost regions like North America and Western Europe.

Topics Covered

The report covers the following topics:

Healthcare Packaging Plastics Market Market data in term of volume and value for each end-use at regional and country level

Healthcare Packaging Plastics Market Market analysis for production, capacity, demand, supply, trade, and utilization rates at regional and country level

Trade balance and target markets for current situation, new expansions, or new projects

Business opportunity assessment

Macro-economic factors like GDP, population, and world economic integration

Strategic issues and recommendations

Strategic recommendations for vendors, and industry stakeholders

Market analysis and forecasts (short-, mid- and long-term forecast) from 2015 till 2030

Healthcare Packaging Plastics Market Market: Applications Covered

Applications Covered

Drugs

Surgical Equipments

Injection Systems

Medical Instruments

Sterile

Non Sterile

Others

Companies Covered

Reynolds

Amcor

Sealed Air

Bemis Company

RPC Group

Alpla

Plastipak

Constantia

Coveris

Berry Global

Other Manufacturers

Healthcare Packaging Plastics MarketMarket: Regions covered

- Asia Pacific

- Eastern Europe

- Central & South America

- Middle East & Africa

- North America

- Western Europe

Key Questions Answered

The Global Healthcare Packaging Plastics Market Market study answers the following key questions:

How big is the Healthcare Packaging Plastics Marketmarket?

How is the Healthcare Packaging Plastics Market market evolving by demand-supply, segment, and region?

What will the Healthcare Packaging Plastics Market market size be in 2030 and at what rate will it grow?

What trends, challenges and barriers are influencing its growth?

Who are the key manufacturers and what are their shares in different region?

What opportunities and target markets exist for Healthcare Packaging Plastics Market

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Prismane Consulting is a unique consulting and market research firm providing management, economic and technical expertise across the global Chemicals, Petrochemicals, Polymers, Materials and Energy value chain. The company has been advising clients on their key strategic issues solving their toughest and most critical business problems. We have helped some of the fortune 500 companies develop their strategic plans by tracking and interpreting market dynamics.

Prismane consulting has completed several multi-client studies and projects. It offers Market Studies, World Analysis and Strategy Reports related to Refining, Chemicals, Petrochemicals, Plastic & Polymers and Materials. For update on the annual subscription (monthly, quarterly, and annually) on the chemicals industry, please write to sales@prismaneconsulting.com

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[marketwire]

Connected Streetlights Market Size to Grow at a CAGR of 14.82% During 2021-2026

Connected streetlights Market size was valued at $1.3 billion in 2020 and it is estimated to grow at a CAGR of 14.82% during 2021-2026. The growth is mainly attributed to the high penetration of internet of things (IoT), constant innovation in mobile networks along with wireless technology, increasing demand for efficient advanced lighting solutions across industries and awareness regarding energy conservation. Furthermore, exponentially growing investments in smart city projects and government initiatives for greener strategies to support sustainable development across the world are the major driving factors of connected streetlights market. Additionally, this technology also helps in environmental monitoring, video surveillance and traffic monitoring, which enhances the public safety level and creates massive growth opportunities for IoT-enabled connected streetlights. Hence, owing to the above mentioned factors the connected streetlights industry is gaining traction in the forecast period 2021-2026.

Connected Streetlights Market Segment Analysis – By Component

Connected streetlights market is segmented into hardware, software and services, based on component. Hardware segment is further segmented into LED Lamps, Sodium Vapor Lamps, Drivers and Ballast, Sensors, Switches, Controllers and others. Among all the components, hardware dominated the market with a share of 25.16% in 2020, due to the increasing environmental concerns across the world and increasing adoption of light emitting diode (LED) lights for its several benefits. Many countries across the globe are investing heavily for the installation of more reliable LED street lighting system. For instance, till April 2019, Energy Efficiency Services Ltd. (EESL) replaced over 89.15 lakh street lights with LEDs across 1,400 Indian cities. Similarly, a recent report of Pacific Northwest National Laboratory shows that, Chicago will save $10 million within a year in energy cost with the help of LEDs. Similarly a report from Department of Energy states that, by 2027, the usage of LEDs will save 348 Terawatt-hour (TWh) of electricity and $30 billion electricity cost, compared to non-LED lightings. In addition, increasing environmental awareness among the people creates a massive requirement for this technology that fuels the growth of this market. This technology is more environment friendly, energy efficient, than any other traditional lighting system. Moreover, LED technology offers durability, which means longer lifespan and compactness. This in turn boosts the adoption rate of this solution and triggers the growth of this market. Such advantages are analysed to drive the market in the forecast period 2021-2026.

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Connected Streetlights Market Segment Analysis- By End User Industry

On the basis of end-user industry, this market is segmented into residential, commercial, industrial and Public & Government.Public & Government sector is analyzed to grow with the fastest CAGR of 15.19% during 2021-2026. Increasing investment in smart city projects, penetration of internet of things (IoT), government’s initiatives in promoting more sustainable methods for economical as well as environmental development, increasing popularity of LED lights, environmental awareness and others are the key influencing factors behind this growth. For instance, in June 2019, Havells India enhanced their manufacturing capabilities by five times, to 25 lakh lamps from 5 lakh lamps per month to assist the government’s initiatives for improving efficiency in the power & energy sector. Furthermore, due to the pandemic, paper bureaucracy dependent Japan is taking initiatives toward its digital transformation, resulting in high investments on smart city projects by the Japanese Government which will work as a key influence for the digital transformation and economical revival of Japan. Apart from that, the adoption of solar lighting plays a major role in the growth of this market. Hence, the above mentioned factors are being seen as the opportunity for the players operating in the connected streetlights market during 2021-2026.

Connected Streetlights Market Segment Analysis- By Geography

North America region held the highest connected streetlights market share around 31.55% of in 2020. The growth is mainly driven by the early adoption of this technology, growth in internet of things (IoT) infrastructure, rising demand for energy efficient lights such as light emitting diode (LED), connected solar lights and others; and presence of prominent market players. Growing investment for smart cities and Governments’ initiatives for these projects are fueling the growth of this market. In May 2019, New Orleans invested $40 million in holistic smart city project to improve the citywide public safety system. Similarly, a Mexican town, Tequila is in the process of consolidating itself as a smart town under the name “Smart Tequila” and the local Government is also planning to complete the whole digitization process by the year 2040.Such strategic investments will create huge demand for IoT-enabled connected streetlights along with pedestrian lights that are also called piggyback lights and will drive the growth of connected streetlights market in this region during the forecast period 2021-2026.

Connected Streetlights Market Drivers

Increasing Investment in Smart City Projects:

One of the major drivers behind the growth of connected streetlights market is growing investment is smart city project. The number of smart city projects is analyzed to grow rapidly due to the public safety issues, urbanization, government’s initiatives in the form of investments, increasing concerns for environment, limited resources and others. These projects reduce the overall energy and maintenance costs and also open up new revenue opportunities. In June 2020, The Singapore Government announced to increase the investment in smart city projects and information technology by 30%. Similarly, in April 2021, Mitsubishi Corporation added a new urban transit oriented mixed use development project, to its already existing smart city program, near Jakarta. As the requirement of IoT-enabled connected streetlights is directly proportional to the number of smart city projects, thus,with growing investments in smart city projects across the globe, the demand for connected streetlights is also rising. These smart street lighting will help in building future-proof smart cities. For instance, In October 2019, UK-based smart city solution provider Telensa teamed up with Eaton Lighting to deliver connected solutions for outdoor lighting and related smart city applications across the world.

High Penetration of Wireless Technology and Digitization:

Growing penetration of wireless technology and increasing investment on wireless technology for digital transformation is analyzed to drive the connected streetlight market during the forecast period. In February 2020, Microsoft announced their $1.1 billion investment plan to drive the digital transformation in Mexico over next five years.Unlike wired connected streetlights such as PLC-based wired connected streetlights, wireless connected streetlights can be remotely monitored as well as controlled with the help of connected wireless networks. Along with this, the upfront cost of wireless streetlight is far less than PLC-based wired connected streetlights, which fuels the growth of this market. Moreover, connected streetlights technology can send information faster to a centralized management system through wireless technology than wired technology, which helps in controlling different parameters including voltage, current, temperature and others.Such advantages of wireless technology and increasing investment in wireless solutions are augmenting the growing adoption of connected streetlights globally.To meet the growing requirement of wireless connected streetlights players are launching advanced products. For instance, in October 2019, LED Eco Lights announced the launch of its new product - a networked wireless lighting control system, named Light Boss, which significantly reduces the energy and maintenance cost and monitors the usage and can be used across various sectors including commercial, industrial, education, healthcare and others. Hence, the above-mentioned factors are set to boost the market growth during 2021-2026.

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Connected Streetlights Market Challenges

High Installation Cost:

Even though, connected streetlights market is growing rapidly, high installation cost of this technology hampers the growth of this market. The growing penetration of IoT creates huge demand for this IoT-enabled connected streetlights market. Since this technology includes various types of hardware such as LED lamps, sodium vapor lamps, drivers and ballast, sensors, switches, controllers and others as well as software solutions, the overall price of this solution rises.Hence, the rise in installation price will hamper the growth of this market during the forecast period 2021-2026.

Connected streetlights Market Landscape

Technology launches, Acquisitions,Collaboration, and R&D activities are key strategies adopted by players in the connected streetlights Industry Outlook. Connected streetlights top 10 companies includes General Electric, Koninklijke Philips N.V, Telensa Holdings Ltd., Echelon Corporation, Osram Licht AG, Signify Holding B.V., Cisco Systems, Inc.,Trilliant holdings Inc., AxiomTek Co., Ltd., Cree Inc. and others.

Acquisitions/Technology Launches

In July 2021, Signify announced about its acquisition of a UK-based company, Telensa Holdings, for smart cities. By acquiring Telensa, Signify added a narrow-band and TALQ-compliant solution to its feature-rich, open and secured systems. This will make smart city infrastructure affordable to the cities utilizing the unlicensed radio space.

In June 2020, The New York Power Authority (NYPA) collaborated with Signify company, to support Smart Street lighting NY. Under this program, over 50,000 LED streetlights already had been installed or are currently being installed across New York.

Key Takeaways

Hardware held the highest market share in 2020 and is anticipated to witness significant amount of growth, owing to increasing awareness regarding environmental issues and growing adoption of LED streetlights.

Public & Government sector is analysed to witness the fastest growth between 2021-2026. Rising requirement for cost effective, energy efficient lighting technology and smart city project initiatives are the key factors behind the growth.

North America held the major market share in 2020 and is anticipated to witness significant growth during forecast period, owing to the early adoption of this technology, rising investments in smart city projects and the presence of prominent market players.

Increasing smart city investment and penetration of wireless technology works as a growth driver for this market during 2021-2026.

The top players of this market includes General Electric, Koninklijke Philips N.V, Telensa Holdings Ltd., Echelon Corporation, Osram Licht AG and others.

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[kings-research]

Autonomous Farm Equipment Market 2022 Profitable Industry Trends, Growth Rate and Forecasts

Summary:

Autonomous Farm Equipment Market size is projected to expand at over xx % CAGR from 2021 to 2027. Growing demand for autonomous farming equipment, specifically in regions with a low farmer population is likely to augment the market growth.

Several companies in the sector are focusing on R&D activities to expand their product portfolios and improve the customer experience. For instance, in December 2021, Trimble announced the launch of R750 GNSS modular receivers. It offers a connected base station for geospatial, civil construction, and agricultural applications. The technology can be utilized to broadcast real-time kinematic corrections for a broad set of activities including seismic surveying, civil construction, monitoring, and precision agriculture. It allows integration with global navigation satellite system rovers to tackle geo-positioning issues faced in some locations.

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The coronavirus pandemic has negatively impacted the autonomous farm equipment market growth. The outbreak has encouraged government administrations to impose strict lockdown measures & travel restrictions. It has hindered the logistics & manufacturing capabilities of several companies, thus impacting the overall sales. In addition, the introduction of travel regulations, further, developed labor shortage challenges for farm owners and created barriers in terms of hiring a suitable workforce for conducting applications across the field. This factor has encouraged growers to implement advanced technologies to continue work and increase productivity.

Autonomous Farm Equipment Market Size By Operation (Fully Autonomous, Partially Autonomous), By Product (Tractors, Harvesters, UAVs, UGVs), COVID-19 Impact Analysis, Regional Outlook, Growth Potential, Competitive Market Share & Forecast

The lack of labor in the farming domain will propel the fully autonomous solution segment in Japan

The Japan autonomous farm equipment industry is expected to witness around xx% growth rate through 2027 due to rising workforce issues in the sector. Players in the domain are constantly emphasizing on improving their solution offerings to establish a differentiated market positioning and cater to a large set of customers. These factors have encouraged companies to introduce new features in the product line for tackling labor shortage issues.

For instance, in February 2021, Yanmar Agribusiness upgraded its autonomous tractor range with full autonomous work. The company has included multi-frequency antennas and advanced GNSS satellite features, thus improving positioning, RTK coverage & precision of the equipment. It will also support in addressing the aging farming population problems of the sector.

R&D activities by industry participants in Germany

The autonomous farm equipment market is poised to register gains of above 5% in Germany till 2027 owing to increasing R&D activities by the manufacturers. To build an integrative & holistic solution portfolio, companies are emphasizing on forming strategic partnerships or investments in complementary businesses. Enhancements in the equipment will offer better features such as autonomous navigation, 5G support, LTE & remote control to the end-users, thus increasing the utilization of drones in the Germany and other operated countries.

The North America autonomous farm equipment market demand is estimated to observe a CAGR of nearly xx% through 2027 fueled by rising investments in R&D activities. The increasing income of farmers in the regional agriculture sector will offer significant growth opportunities. According to the United States Department of Agriculture (USDA), gross cash farm income is forecast at USD 488 billion in 2021 compared to USD 348 billion in 2001.

A growing population demand for food safety is boosting the usage of innovative agricultural technologies to efficiently increase farm produce. The widespread use of tractors and combines harvesters with autosteering capabilities in the region will propel industrial expansion.

Developing market presence forms a key strategy amongst several manufacturers

Industry participants are focusing on strengthening their presence through expansion and offering innovative solutions to cater to the growing demand for autonomous farm equipment. For instance, in August 2021, DJI announced the availability of its T10 & T30 agriculture drones across 100 countries. Through this move, the company is developing its global brand presence in the agriculture industry.

Key players operating in the autonomous farm equipment market include 3D Robotics, AGCO, Agribotix (AgEagle), Agritronics, AgXeed, American Robotics (ONDAS), Autonomous Solutions Inc., Bobcat Company (Doosan), Clearpath Robotics, CNH Industrial NV, Deutz-Fahr (SDF Group), DJI, Ecorobotix, Energid, Farmdroid ApS, John Deere, Kinze Manufacturing, Kubota, Mahindra and Mahindra, Naio Technologies, Precision HAWK, Robert Bosch GmbH, Rowbot, and Yanmar Holdings Co., Ltd.

[vivekbajaj-grs]

Europe Digital Transformation Market: Current Analysis and Forecast (2021-2027)

Digital technologies are dramatically reshaping every industry, several companies are doing large-scale change efforts to capture the benefits of the ongoing digital transformation trend or simply to keep up with their competitors. The results of digital transformation may take time but not opting for transformation is not an option for one to survive in the competitive world. For instance, on average, European firms are less often fully digital, and are particularly lacking in the construction sector, dragging down the digital intensity score. Furthermore, US firms invest more in business process improvements compared to the European counterparts. However, firms in the European region and the US perceive digital infrastructure similarly. As per a study conducted by one of the top consulting firm, European companies lags US companies in terms of R&D investment and adoption of digital technologies. Using firm-level data from 2019, it is stated that larger firms have higher rates of digital adoption, compared to their smaller peers, and that digital firms have better management practices and show more dynamism. Only 66% of manufacturing firms in the Europe have adopted at least one digital technology, compared to 78% in the US. The difference is particularly large in the construction sector, where the share of digital firms in Europe stands at 40%, compared to 61% in the US. In the service sector the difference between Europe and US is 13% and 11% in the infrastructure sector.

Insights Presented in the Report

"Amongst component, Solution segment holds the major share."

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Based on the component, the European digital transformation market is bifurcated into Solutions and Services. The solution sub-segment is further divided into cloud computing, big data and analytics, mobility, disruptive technology, and social media. Moreover, Service segment is divided into professional services and system integration. Service segment generated revenue of US$ 66.1 billion in 2020. Solution segment is expected to witness CAGR growth of 15.16% during the forecast period.

"Amongst deployment type, cloud dominated the market in 2020."

Based on Deployment type the market is segmented into On-premises and cloud deployment. Currently, cloud deployment model dominated the market and is expected to maintain its dominance during the analyzed period. On-Premise's segment is expected to witness CAGR growth of 13.83% during the forecast period.

"Amongst End-user, large enterprises are expected to dominate the market during the analyzed period."

Based on end-user the European digital transformation market is bifurcated into large enterprises and SME's. Owing to high cost of digital technology deployment large enterprise invested most on digital technology. The segment generated revenue of US$ 203.8 billion in 2020.

"Amongst industry verticals, Banking Financial Services & Insurance dominated the market in 2020."

Based on industry vertical, the market is fragmented into BFSI, healthcare, telecom & IT, automotive, education, retail & consumer goods, media & entertainment, manufacturing, government, and others. Healthcare segment is expected to witness highest CAGR growth of 18.95% during the analyzed period.

"Germany represents as the largest markets in the Europe Digital Transformation market."

For better understanding of the market penetration of digital transformation, the report provides detailed analysis of major countries including Europe (Germany, UK, Russia, France, Spain, Italy, Rest of Europe). Germany dominated the % share in 2020. However, Spain is expected to witness highest CAGR growth of 19.76% during the forecast period. Some of the major players operating in the market include IBM Corporation, Cognizant, SAP SE, Dell, Microsoft Corporation, Adobe Systems Incorporated, Accenture PLC, Capgemini, Oracle Corporation and Google Inc.

Reasons to buy this report:

? The study includes market sizing and forecasting analysis validated by authenticated key industry experts

? The report presents a quick review of overall industry performance at one glance

? The report covers in-depth analysis of prominent industry peers with a primary focus on key business financials, product portfolio, expansion strategies, and recent developments

? Detailed examination of drivers, restraints, key trends, and opportunities prevailing in the industry

? The study comprehensively covers the market across different segments

? Deep dive country level analysis of the industry

Customization Options:

The European Digital Transformation Market can further be customized as per the requirement or any other market segment.

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Table of content

1 MARKET INTRODUCTION 1.1. Market Definitions 1.2. Limitation 1.3. Stake Holders 1.4. Currency Used in Report 1.5. Scope of the Europe Digital Transformation Market Study 2 RESEARCH METHODOLOGY OR ASSUMPTION 2.1. Research Process 2.2. Research Methodology for the Europe Digital Transformation Market 2.3. Forecasting Method 2.4. Respondent Profile 2.5. Main Objective of the Europe Digital Transformation Market 3 MARKET SYNOPSIS 4 EXECUTIVE SUMMARY 5 EUROPE DIGITAL TRANSFORMATION MARKET DYNAMICS 5.1. Market Drivers 5.1.1. Rapid Digitalizing Business Operations 5.1.2. Proliferation of Smartphone and Mobile Application 5.1.3. Penetration of IoT and Adoption of Cloud Services 5.2. Market Challenges 5.2.1. Security and Privacy Concerns 5.2.2. Unfavorable firm-size distribution 5.3. Market Opportunity 5.3.1. Digital firms tend to be more productive. 5.3.2. Digital firms are more likely to grow and create jobs. 6 LEGAL & REGULATORY FRAMEWORK 7 USED CASE EXAMPLE OF DIGITAL TECHNOLOGY IN EUROPEAN INDUSTRIAL SECTOR 7.1. 3D scanner to design made-to-measure shoe insoles using HPC. 7.2. Sustainable agriculture powered by smart technologies. 7.3. 3D printing and HPC to improve gearbox production. 7.4. SME improves design of an aircraft. 8 DEMAND AND SUPPLY SIDE ANALYSIS 8.1. Demand Side Analysis 8.2. Supply Side Analysis 8.2.1. Top Product Launches 8.2.2. Top Partnerships 8.2.3. Top Business Expansions, Investments a

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[inkovsky]

The Hang Seng Index opened 376 points higher on Thursday to 19,537, regaining its 10-DMA (19,474), and then narrowed its gains to 315 points. As domestic demand stocks and mainland property stocks rose significantly, ATMs continued to support the market, and the Hang Seng Index regained momentum Upwards, it reached a high of 19,735, up 574 points, fluctuated within a narrow range in the late market, and finally closed at 19,679, up 518 points, rising for two consecutive days. The HS Tech index closed at 4,210, up 185 points. Market turnover reached HK$101.5 billion , an increase of 46% from the previous day.

The Hang Seng Index rose with a gap candlestick yesterday, recovering the 10-DMA. The market outlook is expected to hit the 20,000 mark again, and then challenge the 250-DMA (20,445). If the Hang Seng Index turns around and falls back, yesterday's rising gap (19,255 to 19,475) can provide initial support.

The market expects that China and Hong Kong will pass the customs soon, and pay attention to local stocks such as catering, retail and rental stocks. However, the increase in the number of confirmed cases in the Mainland has affected production and out-of-home consumption, thus reducing investors' confidence in the stock market. The series of measures announced by the Chinese government to support private companies and real estate companies to "backdoor" listed real estate companies may help boost the economy and the sentiment of Hong Kong stocks. However, as the end of the year approaches, there will be no major data from the US and no new policies from the Mainland. Hong Kong stocks are expected to be quiet.

The U.S. economic growth in the third quarter was stronger than expected, and the job market was also stable, rekindling investors’ worries about the Fed continuing to raise interest rates. U.S. stocks retreated significantly on Thursday, with the closing , Dows index falling 348 points to 33,027 points; S&P drop 56 points to 3,822 points; and the Nasdaq fell 233 points to 10,476 points.

[constructionequipment97]

stratasys (ssys) q3 2018 results - earnings call transcript

Stratasys Ltd.Stratasys Ltd.NASDAQ:SSYS)At 8: 30 a.m.on November 1, 2018, etexecuesyonah Lloyd-2018 revenue call for the third quarterStratasys Ltd.El Chalan jaglon-Stratasys Ltd.Lilach Payorski-Stratasys Ltd.

David Reis -Stratasys Ltd.AnalystsTroy D.Jensen -Piper Jaffray & Co.Brian P.Drab -William BlairMohan-Ibuprofen Suspension Drops Bank of AmericaCircular capital marketCross -Cross-study LLCHendi Susanto-Gabelli & Company, Inc.

David Ryzhik -LLLPBen Z, financial group.Rose -War road Research Co.Ltd.Good morning, ladies and gentlemen, welcome to the third quarter 2018 Stratasys earnings call.As a reminder, this conference call is being recorded.

I would like to transfer the phone to your host Yonah Lloyd now.Yonah Lloyd -Stratasys Ltd.Thank you.Good Morning, everyone.Thank you for discussing with us our financial performance for the third quarter.

Today we are talking to the interim CEO, Elan Jaglom; David Reis, vice chairman and head of our board of directors Oversight Committee, joined by telephone; And our chief financial officer, Lilach Payorski.I will remind you that on the web address provided in our press release, today's call can be accessed online, including a prepared slide presentation.In addition, a replay of today's call will be provided, including access to the slide presentation, and accessible through the Investor Relations section of our website.Please note that some of the information you will hear in our discussion today will include forwarding-Outlook statements, including but not limited to statements regarding our expectations for future earnings, gross margin, operating expenses, taxes and other future financial performance, and our expectations for the business outlook.All statements relating to future performance, events, expectations, or results are forward --Look at the report.

Actual results or trends may differ greatly from our predictions.Risks that may lead to significant differences between the actual results and the results specified in the forward,Looking at the report, please refer to the risk factors that stratasy discussed in the Annual Report on Form 20-F.February 28, 2018 report to SEC on 2017 and our report on Form 6K, and the relevant press release we have provided to the SEC today regarding our revenue for 2018.Stratasys is under no obligation to update any forwarding-Statements or information as of their respective dates.As in previous quarters, today's call will include GAAP and non-GAAP Financial indicators.

The non-The GAAP financial indicators should be combined with our GAAP indicators to evaluate our performance.Certain non-GAAP-to-GAAP reconciliation is provided in our slide presentation and in the form contained in today's press release.Now I want to transfer the call to our interim CEO, Elan Jaglom.Elan? El Chalan jaglon-Stratasys Ltd.Thank you Yonah.

Good Morning, everyone.Thank you for attending today's conference call.We are happy with our third quarter results, which show high-End-system orders that began in the previous quarter, as well as improvements made directly by Stratasys, and steady growth in recurring consumer goods and consumer support revenue.I will be back on the phone later to provide an update on our search for a new CEO, and David will provide more details on the quarter's highlights and other key developments.But first, I will transfer the call to our CFO, Lilach Payorski, who will review the details of our financial results.

Lilach? Lilach Payorski-Stratasys Ltd.Thank you, Elan.Good morning, everyone.Total revenue for the third quarter was $0.billion, compared to $155.

The same period last year was 9 million, up 4% year on year.After adjusting the entity to sell our divestiture this quarter, in a similarfor-As with basis, total revenue grew by 6%.GAAP operating income for the third quarter was $3.million, while operating losses of $6.The same period last year was 9 million.

Non-GAAP operating income for the third quarter was $8.Compared to $8 in operating income, it was 2 million.The same period last year was 1 million.Product revenue for the third quarter was $109.million, increase 1.

compared with the same period last year, 3.does not include entities that have been stripped.In terms of product revenue, the system revenue for the quarter was flat from the same period last year, but increased by 3.after adjustment for the entity being stripped.Revenue from consumer goods increased by 2.

Growth of 6% over the same period last year, an increase of 4.does not include entities that have been stripped.Service revenue for the third quarter was $52.million, an increase of 10.Compared to the same period last year, due to the growth of customer support revenue and the strong performance of Stratasys Direct Manufacturing, the figure was 4%.

In service revenue, customer support revenue has increased by seven times, including revenue generated primarily by maintenance contracts on our system.Compared to the same period last year, 4% was mainly due to the increase in the number of systems we installed and the increase in the additional rate of service contracts.The gross profit margin of GAAP is 48.Compared with 48, the quarter was 7%.The same period last year was 3%.

Non-The gross profit margin of GAAP is 52.Compared with 52, the third quarter was 1%.Driven by our sources of income, it was 5% in the same period last year.Non-Gross profit margin of GAAP products increased to 60.compared 59.

Driven by the product structure, the same period last year was 6%.Non-The gross profit margin for GAAP services is 34.compared with 36.The same period last year was 3%, reflecting an increase in our investment in customer service and support operations.GAAP operating expenses fell 8% to $75.

Compared with the same period last year, the third quarter was 6 million, mainly due to net income from divestment.Non-GAAP operating expenses increased by 3.to $76.Compared with the same period last year, the third quarter was 3 million, reflecting our continued investment in long-term R & D.Including the advancement of our core LLC and bunching technology, as well as our new metal additive manufacturing platform, advanced composites, and software and application development.

Compared to $4, the company generated $5 million in cash from operations in the third quarter.Cash generated in the third quarter last year accounted for 6 million.We ended the third quarter with $348.Cash and cash equivalents were $9 million, compared to $346.The end of the second quarter of 2018 was 7 million.

Inventory increased slightly to $118.million, compared to $0.billion in 2018.Accounts receivable increased to $129.million, compared to $123.

As of the end of second quarter of 2018, 5 million days of sales were not completed or DSO was at 12-The monthly income is 71.To sum up, our income results are in line with expectations and reflect highTerminal system sales.We are satisfied with the continuous improvement made directly by Stratasys, which contributes to the growth of overall service revenue.Our ongoing revenue growth in consumer goods and customer support is encouraging and demonstrates the continued health of the system base we have installed.We are satisfied with our operating expense control, which resulted in a reduction in G & a as we increased our long-term investmentSupport our technology leadership and long-term initiatives to expand our target market.

We continue to maintain the trend of generating positive cash from our business activities and believe that we maintain a healthy balance sheet and are fully prepared to take advantage of the opportunities to move forward.I want to transfer the phone to Elan now.El Chalan jaglon-Stratasys Ltd.Thank you, Lily.As we pointed out in our last call, the board of directors of the company has set up an executive search committee composed of me and our compensation committee chairman Victor livintal to assist in the identification of new Chief Executive Officer.

Vic and I have been actively interviewing candidates, some of whom have gone deep into the process and we have met or talked with other members of the board.We believe that the people on our shortlist are strong leaders with relevant global operations experience, and we look forward to announcing the new CEO after completing the search.I would now like to ask David to provide more detailed information about the results of the quarter.David? David Reis -Stratasys Ltd.Thank you, sharp.

In the first quarter, we were satisfied with the continued commitment we observed from our customers, which was reflected in the highThe continued growth in terminal production systems and recurring revenue for consumables and services is notable, although we experienced a decline in system sales at the beginning of the year.We are satisfied with the increase in customer commitment.As customers go beyond the qualification and validation phase of the app and expand their capabilities in a real production environment, we continue to see.For example, in the first quarter of last year, we talked about how Siemens Mobile developed the use of Stratasys FDM 3D printing technology by producing customized final production parts for German transport service providers.In mid-On September, Siemens Mobile announced the opening of its first digital railway maintenance center in Germany-Siemens mobile RRX railway service center.

The new repair warehouse is expected to serve more than 100 trains per month and provide the highest level of digital services in the railway industry, with Stratasys's advanced FDM 3D printer at the heart of their service operations.Increased inventory-sorryIn addition, on August, at the IMTS manufacturing exhibition, we showed multiple customers at the booth and highlighted the unique applications they solved today with our technology, including FedEx, they are working to deploy additive manufacturing facilities to locations closer to their customers as part of FedEx forwarding warehouse services to improve the efficiency of the supply chain.SLS (sic)[SSL]An aerospace customer who uses our FDM technology to quicklyHigh response customizationTemperature laying-Tools that used to be done with CNC.RockTandospirone Citrate Tablets Martin uses our new Antero PEKK advanced thermoplastic materials to make highly repeatable parts that meet the strict mechanical function and size requirements of space travel.And the Penske NASCAR department showed multiple 3D printing terminals.

Compared to multiple days using traditional machine methods, parts that can be created in one day using their production managers.In addition to the manufacturing applications that our technology can solve, we are excited about the progress we have made in developing new and innovative solutions, we believe this will expand our addressable market in advanced manufacturing in the coming years.We are pleased with the progress made in the development of new metal additive manufacturing platforms for short-term production, and expect that next year, as we move into various stages, there will be greater engagement with our development partners to commercialize.We are encouraged by the improvements in the performance and strategy of direct manufacturing.The SDM is benefiting from the organizational changes we made at the beginning of the year to directly incorporate them into the North American sales organization, and taking advantage of the synergy between our parts and hardware business and the strong growth in manufacturing orders under the leadership of metal parts production, our top customers have added more complex large projects and projects, aerospace in particularEspecially in the third quarter, we are pleased to see a significant increase in order size for several large customers and are increasingly relying on SDM to meet production parts and development needs.

As we discussed in the past, the combination of the SDM business has significantly shifted to more profitable additive manufacturing parts compared to traditional manufacturing.I would now like to transfer the call to Yonah, our Vice President of Investor Relations, who will give a more detailed account of our 2018 financial guidance.Yonah? Yonah Lloyd -Stratasys Ltd.Thank you, David.We are updating our guidance for 2018 as shown below.

Total revenues ranged from $0.billion to $0.billion, compared to the previous guidelines of $0.billion to $0.billion.

GAAP's net loss was $10 million to $2 million or $0.to $0.Compared to the previous guidance of a net loss of $41 million to $25 million or $0, the diluted $04 per share.to $0.per share after dilution.

Non-GAAP net income is between $27 million and $30 million or $0.to $0.Compared to previous guidance of net income of $16 million to $27 million or $0, the diluted share per share was $55.to $0.per share after dilution.

Non-The operating profit margin of GAAP is expected to remain at 4.to 6%.Capital expenditure is projected at $25 million to $35 million, compared with an earlier estimate of $30 million to $40 million.Our guidance reflects an increase in investment in R & D, tools, materials and additional resources, designed to expand our addressable market by accelerating our development efforts for new metal additive manufacturing platforms based on our FDM and PolyJet technologies and specific go-to-Market initiatives to deepen customer engagement.Non-The GAAP earnings guide does not include an estimated amortization of $34 million for intangible assets, a share of $16 million to $17 million-Net income from divestiture and restructuring based on $23 million to $22 million --Related expenses are between $6 million and $7 million, including tax revenue from non-tax-related negative $1 million to $1 millionAdjustment of general accounting standards in the United States.

Estimated nonThe GAAP tax rate of 2018 is subject to continuous non-We expect cash valuation subsidies for deferred tax assets to be recorded in the United States throughout the yearS.losses.Given the continued negative impact of non-record tax incentives on expectations in the United StatesS.The tax loss of our net income, and our non-The Company believes that the GAAP tax rateGAAP operating income is the best measure of our performance.Generally recognized accounting principles between appropriate adjustments and non-GAAP Financial indicators are provided in the form at the end of our press release and slide presentation with details about non-GAAP Financial indicators.

Operator, you can open the problem phone now.Question-and-Your first question is from Troy Jensen at Piper.Your line is open.Troy D.Jensen -Piper Jaffray & Co.

Hey, gentlemen, congratulate the improvement here.El Chalan jaglon-Stratasys Ltd.Thanks, Troy.Lilach Payorski-Stratasys Ltd.Thanks.

Troy D.Jensen -Piper Jaffray & Co.Hey, so fast, maybe for David, I think, or for Lily --The terminal system performed strongly this quarter.Have you seen this force in all vertical fields, and I think I'm trying to figure out when we really want to see a significant change in the Aerospace vertical? David Reis -Stratasys Ltd.So – okay.

So, for the second quarter in a row, we see power, mainly what we call government power, mainly military and aerospace.But I think if you look back, say four or five quarters, we will see the strength of all the manufacturing areas, including automotive, aerospace and military.Troy D.Jensen -Piper Jaffray & Co.Would you like to see a more meaningful acceleration of the aerospace business? David Reis -Stratasys Ltd.

I think-we talked about it last quarter.It takes time for the customer to move from testing and verification to actual production.In some companies, with the help of some partners, we see the process begin gradually.I think as customer confidence grows, we will see an acceleration in the use of molds and terminals in particularParts are used in these areas, especially in aerospace.Troy D.

Jensen -Piper Jaffray & Co.Okay.That's fair.But I want you, David.sorry.

Can you tell us what you think about the HP color release and whether this will affect PolyJet now, or do you think it will affect PolyJet in the coming quarters? David Reis -Stratasys Ltd.I don't think this will affect PolyJet at all, and I'm very happy to hear that HP is following us into the color market.I think the color will be the standard for prototyping in the next few years.This is a change of mentality of the user group.So I'm glad that other companies have entered the field as well.

I think technology-It is wise that from a technical and quality perspective, we are currently in the best position to lead this change.So I'm not worried about this.I am glad that other competitors have entered the field as well.Troy D.Jensen -Piper Jaffray & Co.

Okay.I will give up speaking if I can get another question, but can you talk about the material? I think they're two.maybe a little more when you take some divestiture into account.But-I mean, do you think the growth rate is sustainable or lower than the growth rate of historical trends? David Reis -Stratasys Ltd.Troy, I think there are two parameters for consumer consumption.

One of them is a direct derivative of the number of printers we sold in this quarter and last quarter.The other has to do with utilization, which is directly related to the number of applications we were able to provide the installation Foundation over time and improve the workflow and the like.So I think even though our machine sales slowed down in the first quarter, we are happy to see a rise in consumption.Directly related to it.So when we go back to the growth of hardware sales or more substantial growth, you see the growth of consumables.

We are making progress, not comprehensive, but many departments that improve applications and workflows, which leads to an increase in consumption.To sum up, I think I estimate that in the future, as we continue to restore hardware sales and continue to provide better workflow and application knowledge to our customers, we should see the growth of consumables.Troy D.Jensen -Piper Jaffray & Co.Perfect.

All right.Good luck and move on.David Reis -Stratasys Ltd.Thank you.Your next question comes from Brian monotony of William Blair.

Your line is open.Brian P.Drab -William BlairLLCHi.Thank you for answering my question.I just wanted to ask about the operating expenses first.

You showed this well on slide 10.R & D seems to have substantially increased by several million, with SG & a down a bit.Can you give us any help at the end of the quarter of 2018 and 2019? Lilach Payorski-Stratasys Ltd.Good morning.So, from the rhythm of operating expenses, from the point of view of revenue, usually the fourth quarter is also our strongest quarter.

So I would also like to see an increase in operating costs.In terms of R & D costs, this is consistent with our increased communication on core technology and ofdm technology as well as on metal investment earlier this year, and the addition of additional applications.The expenditure on R & D expenses is actually based on the life cycle and schedule of the project.So R & D doesn't necessarily have a specific seasonality, more like the project lifecycle I mentioned.Therefore, due to the seasonality of revenue, we expect operating expenses to be higher in the fourth quarter, and the speed of R & D may continue to maintain a similar level.

Brian P.Drab -William BlairLLCOkay.Got it.Can you then give me more updates on some of the technologies you are developing, especially in Evolve and Falcon, just a summary of this progress? This may also remind you of your ownership structure there and how these technologies and their potential success will affect your future results.Lilach Payorski-Stratasys Ltd.

So we reported earlier this year that we had divested Evolve.As a result, these results are not currently part of operating income.We basically share our share in the results of evolution.We maintain a minority interest in these entities.The results are basically below.

Therefore, we do not expect to have a significant result or impact on our finances.Brian P.Drab -William BlairLLCOkay.Just curious if you can comment on the reason why if these are such interesting technologies, why are they built this way, if you can benefit more from these exciting technologies, that would be great.I'm just curious.

Thanks.El Chalan jaglon-Stratasys Ltd.Brian? Next question...

El Chalan jaglon-Stratasys Ltd.Oh, okay.Go ahead.Sorry, go ahead.Your next question comes from the Wamsi Mohan line at Bank of America.

Your line is open.Wamsi Mohan -Bank of America Ibuprofen Suspension Drops.Thank you.Good morning.Thanks for the update of CEO search.

Sounds like you're a little close.Should we look forward to your announcement this quarter? It's hard to really underwrite this long-The long-term strategic direction of the company until you announce a new CEO who will either articulate the strategy or reiterate the strategy.So is this something fairly recent? I have a following.up please.El Chalan jaglon-Stratasys Ltd.

Yes, yes.So we have been actively looking for the CEO.As we have announced, we have interviewed some people, some very good candidates.That's not something I can say briefly, because I have to have a contract for that and we don't have a contract.So we do it very actively.

We are looking for a great leader with a strong investor background with global operating experience and we have some very good candidates.So we will do that when we are ready to announce it.We said it might take about nine months.We are within this scope, trust me, we want to do this as soon as possible and we will let you know once we have made some announcements.Wamsi Mohan -Bank of America Ibuprofen Suspension Drops.

Thank you.As follow-upUp, if you think the proposed Chinese tariff has any impact on your business, or the potential impact you hear from your customers, can you talk about it? Also, I would like to know if you can tell us if FX flows have any impact on your performance for the quarter and what you expect for the fourth quarter? Thank you.El Chalan jaglon-Stratasys Ltd.Okay, so Lily can handle it.So, Lily.

Lilach Payorski-Stratasys Ltd.Yes, thank you.Good morning.Therefore, we will certainly pay close and careful attention to all the changes that are taking place in the United States.S.

Changes in tariffs will change.At the moment, especially our business, we do not see significant impact from a cost perspective.But there may be some, but it will not be so important.We are addressing alternatives or any other alternatives from a cost perspective.What's the? Wamsi Mohan -Bank of America Ibuprofen Suspension Drops.

Lilach Payorski-Stratasys Ltd.The FX.Foreign exchange problem, we don't have this quarter-Foreign Exchange has not had such a big impact on us.The euro did not fluctuate so much.The impact was small, with revenues of about $500,000.

Wamsi Mohan -Bank of America Ibuprofen Suspension Drops.Thank you.Your next question is from Ananda Baruah at Loop Capital.Your line is open.Ananda Baruah -Yes, thank you for answering this question and congratulate you on the solid results achieved.

Can you, for us to summarize or go through what you want us to think is the 2019 driving force of the business and what you will focus on, if you guys can give us some of these people how to layer over the course of the year, it will also help? Then I followed up quickly.up.David Reis -Stratasys Ltd.Okay, David, let me get it.Good morning.

We believe it is possible for us to return to a reasonable growth rate in the third quarter.We will focus on two areas.One of them is our infrastructure and sales business.I think on a global scale, we can do better to improve our lead in sales and marketing.On the back of it, as you can see in our R & D budget, we are spending a lot of money developing a great product in all areas where we are active, with our SDM series, the manufacturing side has the best rapid prototyping system based on PolyJet Technology and re-manufacturing.

So next year and 2020 will launch very interesting products and improve overall operations in terms of global sales and marketing, and we hope this will pay off, even increased top line growth compared to what you saw in q3.Ananda Baruah -This is very helpful for the circular capital market.I appreciate it.Quick follow-up-up.Can you please remind us from a metal point of view, even at a higher level at this point, how do you see your division, relative to what has already happened, now that HP has revealed more, I just want to hear what you think about Stratasys difference? Thanks.

David Reis -Stratasys Ltd.Again, I can't spend too much money on this, but we are developing a unique technology that we believe in.But this must be proven in the coming quarters and years, which is well suited for remanufacture of metal parts.It is different from other technologies.I think it will be more suitable for production and cheaper.

As we said in the script, we are working with several important partners around the world to develop and finalize the exact way the system works.But we are advancing this process relatively.We will announce and provide more information when we are ready.Yonah Lloyd -Stratasys Ltd.Ananda, I'm Yuna.

At the formnext exhibition in Frankfurt two weeks later, we will have some delegates from the metal team present and we will provide more details there.So if you or anyone else, of course, can get there on the phone, you will definitely get more information.Ananda Baruah -This is a great market for revolving capital.That's great.Thank you very much.

Your next question comes from the Shannon cross line of Cross Research.Your line is open.Shannon S.Cross -Thank you very much for accepting my question.I am curious about the service surcharge rate within the SDM, which I think includes warranty and maintenance.

Maybe you can talk about what you 've been doing to increase this.How big is this opportunity over time? Yonah Lloyd -Stratasys Ltd.Have you ever asked SDM or FDM, Shannon? Shannon S.Cross -This is cross-study, sorry.I asked people like you-service, it's not a limited company.

No.So basically, you can-I can see from your transcript and some of the records-your prepared comments, you start to increase your emphasis on the maintenance of your products and other services, which helps to drive the growth of some service revenue.Right? Lilach Payorski-Stratasys Ltd.Yeah.Yes, so-yes, we see-we see continued growth in service revenue, contract maintenance, and time and materials, due to increased attachment rates for customer purchase update maintenance, and an increase in installation base, maintenance.

So this is basically what we have experienced for several quarters in a row.Therefore, it verifies that our customers are using machines and requires our additional added value to be combined with maintenance that brings value to our customers.They choose to actually renew the contract and continue to work with Stratasys, who have a result service.Shannon S.Cross -I guess what I'm trying to figure out is within your installation base, is this an opportunity to enter and sell out of service to your installation base, that way there will be more incremental growth than you can see from the product-attach new product sales, or this is not the local base where we can expect you to be able to sign incremental services and contracts with the people currently installed.

David Reis -Stratasys Ltd.Sure.Lilach Payorski-Stratasys Ltd.Yes, of course.okay, David.

David Reis -Stratasys Ltd.Again, we need to remember clearly that a major part of our business is the supply of consumables to our customers.So the fact that we are all able to show our customers that a full service contract is good for them, which often leads to higher satisfaction, a derivative of the machine's off-duty hours, this means higher consumables.So it's all connected.Therefore, it is a huge effort to establish a full service contract, because we know from past experience that customers with full service will usually be happier; B, they have higher uptime, so they use more consumables.

So hard is a crossCorporate efforts generated in terms of revenue and it services, but also indirectly affect sales of consumer goods.Shannon S.Cross -Thanks, Cross Research.Then David, can you talk, I thought about 2018, at least one of the feelings I got from our conversation with your company is that for the industry, this is a year of pause and there are a lot of technologies under development.It is clear that metal is not something you have to want, but something that benefits directly.

David Reis -Stratasys Ltd.Yeah.Shannon S.Cross -So I think in terms of your conversations with clients and your position, you think we have reached the point where 2019 more benefits from all investments in 2018 and 2017, or do you think the industry is just a bit slow and stable so we shouldn't be looking for an inflection point? David Reis -Stratasys Ltd.Overall, I don't think the industry is slowing down.

I think some companies, including ourselves and some other major companies, find themselves in a different environment where competition is much more intense, at least on paper, by the way, it's not direct competition, it's more attention sharing, and in some cases pocket sharing is indirect competition.I think I hope that in the next year or two our customers will see this as well, so they will be able to make decisions faster, because one of the things we 've seen-and we talked about it on previous calls-is that the speed at which customers decide to buy devices slows down, because at least it looks like there are more and more products and the terms are confusing.So I think it may become clearer in the next year or two.I think the overall situation is likely to improve because at least at Stratasys we are developing and investing a lot of money to develop new and improved technologies.So I think this combination, you ask me again, it will happen to start on 2019, end on 2019, start on 2020, and end on 2020.

I think I hope and look forward to seeing improvements in the medium and short term.Shannon S.Cross -Thank you very much for your cross-study.Your next question is from Hendi Susanto at Gabelli.Your line is open.

Hendi Susanto -Gabelli & Company, Inc.Good morning Elan, David and Lilach thank you for answering my questions.El Chalan jaglon-Stratasys Ltd.Good morning, Hendy.David Reis -Stratasys Ltd.

Good morning.Hendi Susanto -Gabelli & Company, Inc.One question.Can you share some of the main reasons why you are canceling your annual income guidance? Lilach Payorski-Stratasys Ltd.Yes.

Now, after we have ended three quarters this year, and we have visibility for the rest of this year, we believe that we are adjusting the guidelines, narrowing it down to $0.billion to $0.billion will definitely give you some insight into what's going on in the fourth quarter.We believe this scope can be achieved.Remind you that the fourth quarter is traditionally our highest quarter from a seasonal perspective.

We are confident that we will be able to meet these narrow guidelines.One thing to note is that we may be close to $0.billion, but we still keep $0.billion within the $0.billion range.

Hendi Susanto -Gabelli & Company, Inc.Got it.Thank you.Very helpful.Operator your next question comes from David Ryzhik's collaboration with Susquehanna Financial Group.

Your line is open.David Ryzhik -Susquehanna Financial Group LLLPHi thank you very much for answering this question.I want to dig deep into the advantages of SDM parts.I think it's up 12% a year.over-year.

Maybe in your discussion with the customer, the added parts order is a feature that they test your system, which can lead to hardware sales, or do you think they are separate parts businessDid they let you see that power in the next few quarters, do you think it is sustainable? I have a following.up.David Reis -Stratasys Ltd.Maybe I will answer the first part first.We said in the script that a few quarters ago, we basically linked the SDM to our North American business, and one of the reasons we did this was to try to create synergies between the two sales infrastructure.

Obviously, we also said on the conference call that there has been an increase in production SDM on the digital side compared to tradition.Of course, some digital products use Stratasys equipment and products.I believe that when a customer wants to buy the number of these devices or for different reasons, it will also affect their purchase decisions --house.As for future projections, I think we should expect to benefit from the synergies between the two organizations.Hopefully the results will continue to grow.

David Ryzhik -LLLPGreat, a group of Susquehanna.Thank you, David.And hope to get the latest information of F123 and MakerBot, especially F123.On the F123 side, I would love any color there and on MakerBot it sounds like you guys have some new product introductions on the way.David, I would be happy to learn what you think about the desktop opportunity market, how do you see it, and what we expect from MakerBot over the next year? David Reis -Stratasys Ltd.

So, first of all, MakerBot's performance on different elements is consistent, even better than we expected.Obviously, I can't disclose information about the new product, but we have also done a lot of R & D work with MakerBot.As far as the whole market is concerned, I think in the coming quarters this market will also go through some rationalisation, and I expect MakerBot, which, by the way, is a major player there today, continue to be a major player in this market.Yonah Lloyd -Stratasys Ltd.David regarding your question on F123, we also have some exciting innovations and plans that are planned for next year.

So you have to keep an eye on that.David Reis -Stratasys Ltd.Yeah.David Ryzhik -LLLPOkay, financial group.Great.

Thanks again.David Reis -Stratasys Ltd.Thank you.Your next question comes from the Ben Rose series of battle road research.Your line is open.

Ben Z.Rose -War road Research Co.Ltd.Good morning, yes.Congratulate on the results achieved in the difficult market.

David, your question.Refer to what you said before as a market presence-the market is more competitive, but there are opportunities for growth.Last quarter, you talked about how HP and Stratasys can fight HP more directly.I would like to know if Jet Fusion has been on the market for some time after HP tried to freeze the market before delivery, and do you now see that customers are more clear about your value proposition with respect to HP? David Reis -Stratasys Ltd.Yes – yes.

I think, I said it again just now.I think in the past few years, we have seen a lot of new competition coming into the market, initially and even today, there is some confusion about the different benefits of different products for a variety of industries and applications.I think what is good for customers to learn gradually.Again, I think we are lucky that our market is growing and I hope that this market will become a very large market in the next few years.I don't-I 've said it many more times, the problem is not direct competition, the problem is-for example, ofdm is a great technology for manufacturing.

There are a lot of areas in the manufacturing industry that may be the best technology, okay, there's almost no competition, okay.Nevertheless, customers are still hesitating when other participants enter the market.They have to learn, they have to test.I think we are in a process where each technology becomes clear to the audience and people will know where to place which technologies.Because I think the whole market will grow and continue to grow, I think direct competition will become less important.

Ben Z.Rose -War road Research Co.Ltd.Okay.Thank you very much.

El Chalan jaglon-Stratasys Ltd.Okay.Thank you for attending today's conference call.We look forward to the people attending the annual formnext exhibition in Frankfurt later this month.We are very happy to talk to you early next year.

Thank you.This is the end of today's conference call, ladies and gentlemen.Thank you for your participation and wish you a wonderful day.You can all disconnect.

[heavyequipment96]

stratasys (ssys) q3 2018 results - earnings call transcript

Stratasys Ltd.Stratasys Ltd.NASDAQ:SSYS)At 8: 30 a.m.on November 1, 2018, etexecuesyonah Lloyd-2018 revenue call for the third quarterStratasys Ltd.El Chalan jaglon-Stratasys Ltd.Lilach Payorski-Stratasys Ltd.

David Reis -Stratasys Ltd.AnalystsTroy D.Jensen -Piper Jaffray & Co.Brian P.Drab -William BlairMohan-Ibuprofen Suspension Drops Bank of AmericaCircular capital marketCross -Cross-study LLCHendi Susanto-Gabelli & Company, Inc.

David Ryzhik -LLLPBen Z, financial group.Rose -War road Research Co.Ltd.Good morning, ladies and gentlemen, welcome to the third quarter 2018 Stratasys earnings call.As a reminder, this conference call is being recorded.

I would like to transfer the phone to your host Yonah Lloyd now.Yonah Lloyd -Stratasys Ltd.Thank you.Good Morning, everyone.Thank you for discussing with us our financial performance for the third quarter.

Today we are talking to the interim CEO, Elan Jaglom; David Reis, vice chairman and head of our board of directors Oversight Committee, joined by telephone; And our chief financial officer, Lilach Payorski.I will remind you that on the web address provided in our press release, today's call can be accessed online, including a prepared slide presentation.In addition, a replay of today's call will be provided, including access to the slide presentation, and accessible through the Investor Relations section of our website.Please note that some of the information you will hear in our discussion today will include forwarding-Outlook statements, including but not limited to statements regarding our expectations for future earnings, gross margin, operating expenses, taxes and other future financial performance, and our expectations for the business outlook.All statements relating to future performance, events, expectations, or results are forward --Look at the report.

Actual results or trends may differ greatly from our predictions.Risks that may lead to significant differences between the actual results and the results specified in the forward,Looking at the report, please refer to the risk factors that stratasy discussed in the Annual Report on Form 20-F.February 28, 2018 report to SEC on 2017 and our report on Form 6K, and the relevant press release we have provided to the SEC today regarding our revenue for 2018.Stratasys is under no obligation to update any forwarding-Statements or information as of their respective dates.As in previous quarters, today's call will include GAAP and non-GAAP Financial indicators.

The non-The GAAP financial indicators should be combined with our GAAP indicators to evaluate our performance.Certain non-GAAP-to-GAAP reconciliation is provided in our slide presentation and in the form contained in today's press release.Now I want to transfer the call to our interim CEO, Elan Jaglom.Elan? El Chalan jaglon-Stratasys Ltd.Thank you Yonah.

Good Morning, everyone.Thank you for attending today's conference call.We are happy with our third quarter results, which show high-End-system orders that began in the previous quarter, as well as improvements made directly by Stratasys, and steady growth in recurring consumer goods and consumer support revenue.I will be back on the phone later to provide an update on our search for a new CEO, and David will provide more details on the quarter's highlights and other key developments.But first, I will transfer the call to our CFO, Lilach Payorski, who will review the details of our financial results.

Lilach? Lilach Payorski-Stratasys Ltd.Thank you, Elan.Good morning, everyone.Total revenue for the third quarter was $0.billion, compared to $155.

The same period last year was 9 million, up 4% year on year.After adjusting the entity to sell our divestiture this quarter, in a similarfor-As with basis, total revenue grew by 6%.GAAP operating income for the third quarter was $3.million, while operating losses of $6.The same period last year was 9 million.

Non-GAAP operating income for the third quarter was $8.Compared to $8 in operating income, it was 2 million.The same period last year was 1 million.Product revenue for the third quarter was $109.million, increase 1.

compared with the same period last year, 3.does not include entities that have been stripped.In terms of product revenue, the system revenue for the quarter was flat from the same period last year, but increased by 3.after adjustment for the entity being stripped.Revenue from consumer goods increased by 2.

Growth of 6% over the same period last year, an increase of 4.does not include entities that have been stripped.Service revenue for the third quarter was $52.million, an increase of 10.Compared to the same period last year, due to the growth of customer support revenue and the strong performance of Stratasys Direct Manufacturing, the figure was 4%.

In service revenue, customer support revenue has increased by seven times, including revenue generated primarily by maintenance contracts on our system.Compared to the same period last year, 4% was mainly due to the increase in the number of systems we installed and the increase in the additional rate of service contracts.The gross profit margin of GAAP is 48.Compared with 48, the quarter was 7%.The same period last year was 3%.

Non-The gross profit margin of GAAP is 52.Compared with 52, the third quarter was 1%.Driven by our sources of income, it was 5% in the same period last year.Non-Gross profit margin of GAAP products increased to 60.compared 59.

Driven by the product structure, the same period last year was 6%.Non-The gross profit margin for GAAP services is 34.compared with 36.The same period last year was 3%, reflecting an increase in our investment in customer service and support operations.GAAP operating expenses fell 8% to $75.

Compared with the same period last year, the third quarter was 6 million, mainly due to net income from divestment.Non-GAAP operating expenses increased by 3.to $76.Compared with the same period last year, the third quarter was 3 million, reflecting our continued investment in long-term R & D.Including the advancement of our core LLC and bunching technology, as well as our new metal additive manufacturing platform, advanced composites, and software and application development.

Compared to $4, the company generated $5 million in cash from operations in the third quarter.Cash generated in the third quarter last year accounted for 6 million.We ended the third quarter with $348.Cash and cash equivalents were $9 million, compared to $346.The end of the second quarter of 2018 was 7 million.

Inventory increased slightly to $118.million, compared to $0.billion in 2018.Accounts receivable increased to $129.million, compared to $123.

As of the end of second quarter of 2018, 5 million days of sales were not completed or DSO was at 12-The monthly income is 71.To sum up, our income results are in line with expectations and reflect highTerminal system sales.We are satisfied with the continuous improvement made directly by Stratasys, which contributes to the growth of overall service revenue.Our ongoing revenue growth in consumer goods and customer support is encouraging and demonstrates the continued health of the system base we have installed.We are satisfied with our operating expense control, which resulted in a reduction in G & a as we increased our long-term investmentSupport our technology leadership and long-term initiatives to expand our target market.

We continue to maintain the trend of generating positive cash from our business activities and believe that we maintain a healthy balance sheet and are fully prepared to take advantage of the opportunities to move forward.I want to transfer the phone to Elan now.El Chalan jaglon-Stratasys Ltd.Thank you, Lily.As we pointed out in our last call, the board of directors of the company has set up an executive search committee composed of me and our compensation committee chairman Victor livintal to assist in the identification of new Chief Executive Officer.

Vic and I have been actively interviewing candidates, some of whom have gone deep into the process and we have met or talked with other members of the board.We believe that the people on our shortlist are strong leaders with relevant global operations experience, and we look forward to announcing the new CEO after completing the search.I would now like to ask David to provide more detailed information about the results of the quarter.David? David Reis -Stratasys Ltd.Thank you, sharp.

In the first quarter, we were satisfied with the continued commitment we observed from our customers, which was reflected in the highThe continued growth in terminal production systems and recurring revenue for consumables and services is notable, although we experienced a decline in system sales at the beginning of the year.We are satisfied with the increase in customer commitment.As customers go beyond the qualification and validation phase of the app and expand their capabilities in a real production environment, we continue to see.For example, in the first quarter of last year, we talked about how Siemens Mobile developed the use of Stratasys FDM 3D printing technology by producing customized final production parts for German transport service providers.In mid-On September, Siemens Mobile announced the opening of its first digital railway maintenance center in Germany-Siemens mobile RRX railway service center.

The new repair warehouse is expected to serve more than 100 trains per month and provide the highest level of digital services in the railway industry, with Stratasys's advanced FDM 3D printer at the heart of their service operations.Increased inventory-sorryIn addition, on August, at the IMTS manufacturing exhibition, we showed multiple customers at the booth and highlighted the unique applications they solved today with our technology, including FedEx, they are working to deploy additive manufacturing facilities to locations closer to their customers as part of FedEx forwarding warehouse services to improve the efficiency of the supply chain.SLS (sic)[SSL]An aerospace customer who uses our FDM technology to quicklyHigh response customizationTemperature laying-Tools that used to be done with CNC.RockTandospirone Citrate Tablets Martin uses our new Antero PEKK advanced thermoplastic materials to make highly repeatable parts that meet the strict mechanical function and size requirements of space travel.And the Penske NASCAR department showed multiple 3D printing terminals.

Compared to multiple days using traditional machine methods, parts that can be created in one day using their production managers.In addition to the manufacturing applications that our technology can solve, we are excited about the progress we have made in developing new and innovative solutions, we believe this will expand our addressable market in advanced manufacturing in the coming years.We are pleased with the progress made in the development of new metal additive manufacturing platforms for short-term production, and expect that next year, as we move into various stages, there will be greater engagement with our development partners to commercialize.We are encouraged by the improvements in the performance and strategy of direct manufacturing.The SDM is benefiting from the organizational changes we made at the beginning of the year to directly incorporate them into the North American sales organization, and taking advantage of the synergy between our parts and hardware business and the strong growth in manufacturing orders under the leadership of metal parts production, our top customers have added more complex large projects and projects, aerospace in particularEspecially in the third quarter, we are pleased to see a significant increase in order size for several large customers and are increasingly relying on SDM to meet production parts and development needs.

As we discussed in the past, the combination of the SDM business has significantly shifted to more profitable additive manufacturing parts compared to traditional manufacturing.I would now like to transfer the call to Yonah, our Vice President of Investor Relations, who will give a more detailed account of our 2018 financial guidance.Yonah? Yonah Lloyd -Stratasys Ltd.Thank you, David.We are updating our guidance for 2018 as shown below.

Total revenues ranged from $0.billion to $0.billion, compared to the previous guidelines of $0.billion to $0.billion.

GAAP's net loss was $10 million to $2 million or $0.to $0.Compared to the previous guidance of a net loss of $41 million to $25 million or $0, the diluted $04 per share.to $0.per share after dilution.

Non-GAAP net income is between $27 million and $30 million or $0.to $0.Compared to previous guidance of net income of $16 million to $27 million or $0, the diluted share per share was $55.to $0.per share after dilution.

Non-The operating profit margin of GAAP is expected to remain at 4.to 6%.Capital expenditure is projected at $25 million to $35 million, compared with an earlier estimate of $30 million to $40 million.Our guidance reflects an increase in investment in R & D, tools, materials and additional resources, designed to expand our addressable market by accelerating our development efforts for new metal additive manufacturing platforms based on our FDM and PolyJet technologies and specific go-to-Market initiatives to deepen customer engagement.Non-The GAAP earnings guide does not include an estimated amortization of $34 million for intangible assets, a share of $16 million to $17 million-Net income from divestiture and restructuring based on $23 million to $22 million --Related expenses are between $6 million and $7 million, including tax revenue from non-tax-related negative $1 million to $1 millionAdjustment of general accounting standards in the United States.

Estimated nonThe GAAP tax rate of 2018 is subject to continuous non-We expect cash valuation subsidies for deferred tax assets to be recorded in the United States throughout the yearS.losses.Given the continued negative impact of non-record tax incentives on expectations in the United StatesS.The tax loss of our net income, and our non-The Company believes that the GAAP tax rateGAAP operating income is the best measure of our performance.Generally recognized accounting principles between appropriate adjustments and non-GAAP Financial indicators are provided in the form at the end of our press release and slide presentation with details about non-GAAP Financial indicators.

Operator, you can open the problem phone now.Question-and-Your first question is from Troy Jensen at Piper.Your line is open.Troy D.Jensen -Piper Jaffray & Co.

Hey, gentlemen, congratulate the improvement here.El Chalan jaglon-Stratasys Ltd.Thanks, Troy.Lilach Payorski-Stratasys Ltd.Thanks.

Troy D.Jensen -Piper Jaffray & Co.Hey, so fast, maybe for David, I think, or for Lily --The terminal system performed strongly this quarter.Have you seen this force in all vertical fields, and I think I'm trying to figure out when we really want to see a significant change in the Aerospace vertical? David Reis -Stratasys Ltd.So – okay.

So, for the second quarter in a row, we see power, mainly what we call government power, mainly military and aerospace.But I think if you look back, say four or five quarters, we will see the strength of all the manufacturing areas, including automotive, aerospace and military.Troy D.Jensen -Piper Jaffray & Co.Would you like to see a more meaningful acceleration of the aerospace business? David Reis -Stratasys Ltd.

I think-we talked about it last quarter.It takes time for the customer to move from testing and verification to actual production.In some companies, with the help of some partners, we see the process begin gradually.I think as customer confidence grows, we will see an acceleration in the use of molds and terminals in particularParts are used in these areas, especially in aerospace.Troy D.

Jensen -Piper Jaffray & Co.Okay.That's fair.But I want you, David.sorry.

Can you tell us what you think about the HP color release and whether this will affect PolyJet now, or do you think it will affect PolyJet in the coming quarters? David Reis -Stratasys Ltd.I don't think this will affect PolyJet at all, and I'm very happy to hear that HP is following us into the color market.I think the color will be the standard for prototyping in the next few years.This is a change of mentality of the user group.So I'm glad that other companies have entered the field as well.

I think technology-It is wise that from a technical and quality perspective, we are currently in the best position to lead this change.So I'm not worried about this.I am glad that other competitors have entered the field as well.Troy D.Jensen -Piper Jaffray & Co.

Okay.I will give up speaking if I can get another question, but can you talk about the material? I think they're two.maybe a little more when you take some divestiture into account.But-I mean, do you think the growth rate is sustainable or lower than the growth rate of historical trends? David Reis -Stratasys Ltd.Troy, I think there are two parameters for consumer consumption.

One of them is a direct derivative of the number of printers we sold in this quarter and last quarter.The other has to do with utilization, which is directly related to the number of applications we were able to provide the installation Foundation over time and improve the workflow and the like.So I think even though our machine sales slowed down in the first quarter, we are happy to see a rise in consumption.Directly related to it.So when we go back to the growth of hardware sales or more substantial growth, you see the growth of consumables.

We are making progress, not comprehensive, but many departments that improve applications and workflows, which leads to an increase in consumption.To sum up, I think I estimate that in the future, as we continue to restore hardware sales and continue to provide better workflow and application knowledge to our customers, we should see the growth of consumables.Troy D.Jensen -Piper Jaffray & Co.Perfect.

All right.Good luck and move on.David Reis -Stratasys Ltd.Thank you.Your next question comes from Brian monotony of William Blair.

Your line is open.Brian P.Drab -William BlairLLCHi.Thank you for answering my question.I just wanted to ask about the operating expenses first.

You showed this well on slide 10.R & D seems to have substantially increased by several million, with SG & a down a bit.Can you give us any help at the end of the quarter of 2018 and 2019? Lilach Payorski-Stratasys Ltd.Good morning.So, from the rhythm of operating expenses, from the point of view of revenue, usually the fourth quarter is also our strongest quarter.

So I would also like to see an increase in operating costs.In terms of R & D costs, this is consistent with our increased communication on core technology and ofdm technology as well as on metal investment earlier this year, and the addition of additional applications.The expenditure on R & D expenses is actually based on the life cycle and schedule of the project.So R & D doesn't necessarily have a specific seasonality, more like the project lifecycle I mentioned.Therefore, due to the seasonality of revenue, we expect operating expenses to be higher in the fourth quarter, and the speed of R & D may continue to maintain a similar level.

Brian P.Drab -William BlairLLCOkay.Got it.Can you then give me more updates on some of the technologies you are developing, especially in Evolve and Falcon, just a summary of this progress? This may also remind you of your ownership structure there and how these technologies and their potential success will affect your future results.Lilach Payorski-Stratasys Ltd.

So we reported earlier this year that we had divested Evolve.As a result, these results are not currently part of operating income.We basically share our share in the results of evolution.We maintain a minority interest in these entities.The results are basically below.

Therefore, we do not expect to have a significant result or impact on our finances.Brian P.Drab -William BlairLLCOkay.Just curious if you can comment on the reason why if these are such interesting technologies, why are they built this way, if you can benefit more from these exciting technologies, that would be great.I'm just curious.

Thanks.El Chalan jaglon-Stratasys Ltd.Brian? Next question...

El Chalan jaglon-Stratasys Ltd.Oh, okay.Go ahead.Sorry, go ahead.Your next question comes from the Wamsi Mohan line at Bank of America.

Your line is open.Wamsi Mohan -Bank of America Ibuprofen Suspension Drops.Thank you.Good morning.Thanks for the update of CEO search.

Sounds like you're a little close.Should we look forward to your announcement this quarter? It's hard to really underwrite this long-The long-term strategic direction of the company until you announce a new CEO who will either articulate the strategy or reiterate the strategy.So is this something fairly recent? I have a following.up please.El Chalan jaglon-Stratasys Ltd.

Yes, yes.So we have been actively looking for the CEO.As we have announced, we have interviewed some people, some very good candidates.That's not something I can say briefly, because I have to have a contract for that and we don't have a contract.So we do it very actively.

We are looking for a great leader with a strong investor background with global operating experience and we have some very good candidates.So we will do that when we are ready to announce it.We said it might take about nine months.We are within this scope, trust me, we want to do this as soon as possible and we will let you know once we have made some announcements.Wamsi Mohan -Bank of America Ibuprofen Suspension Drops.

Thank you.As follow-upUp, if you think the proposed Chinese tariff has any impact on your business, or the potential impact you hear from your customers, can you talk about it? Also, I would like to know if you can tell us if FX flows have any impact on your performance for the quarter and what you expect for the fourth quarter? Thank you.El Chalan jaglon-Stratasys Ltd.Okay, so Lily can handle it.So, Lily.

Lilach Payorski-Stratasys Ltd.Yes, thank you.Good morning.Therefore, we will certainly pay close and careful attention to all the changes that are taking place in the United States.S.

Changes in tariffs will change.At the moment, especially our business, we do not see significant impact from a cost perspective.But there may be some, but it will not be so important.We are addressing alternatives or any other alternatives from a cost perspective.What's the? Wamsi Mohan -Bank of America Ibuprofen Suspension Drops.

Lilach Payorski-Stratasys Ltd.The FX.Foreign exchange problem, we don't have this quarter-Foreign Exchange has not had such a big impact on us.The euro did not fluctuate so much.The impact was small, with revenues of about $500,000.

Wamsi Mohan -Bank of America Ibuprofen Suspension Drops.Thank you.Your next question is from Ananda Baruah at Loop Capital.Your line is open.Ananda Baruah -Yes, thank you for answering this question and congratulate you on the solid results achieved.

Can you, for us to summarize or go through what you want us to think is the 2019 driving force of the business and what you will focus on, if you guys can give us some of these people how to layer over the course of the year, it will also help? Then I followed up quickly.up.David Reis -Stratasys Ltd.Okay, David, let me get it.Good morning.

We believe it is possible for us to return to a reasonable growth rate in the third quarter.We will focus on two areas.One of them is our infrastructure and sales business.I think on a global scale, we can do better to improve our lead in sales and marketing.On the back of it, as you can see in our R & D budget, we are spending a lot of money developing a great product in all areas where we are active, with our SDM series, the manufacturing side has the best rapid prototyping system based on PolyJet Technology and re-manufacturing.

So next year and 2020 will launch very interesting products and improve overall operations in terms of global sales and marketing, and we hope this will pay off, even increased top line growth compared to what you saw in q3.Ananda Baruah -This is very helpful for the circular capital market.I appreciate it.Quick follow-up-up.Can you please remind us from a metal point of view, even at a higher level at this point, how do you see your division, relative to what has already happened, now that HP has revealed more, I just want to hear what you think about Stratasys difference? Thanks.

David Reis -Stratasys Ltd.Again, I can't spend too much money on this, but we are developing a unique technology that we believe in.But this must be proven in the coming quarters and years, which is well suited for remanufacture of metal parts.It is different from other technologies.I think it will be more suitable for production and cheaper.

As we said in the script, we are working with several important partners around the world to develop and finalize the exact way the system works.But we are advancing this process relatively.We will announce and provide more information when we are ready.Yonah Lloyd -Stratasys Ltd.Ananda, I'm Yuna.

At the formnext exhibition in Frankfurt two weeks later, we will have some delegates from the metal team present and we will provide more details there.So if you or anyone else, of course, can get there on the phone, you will definitely get more information.Ananda Baruah -This is a great market for revolving capital.That's great.Thank you very much.

Your next question comes from the Shannon cross line of Cross Research.Your line is open.Shannon S.Cross -Thank you very much for accepting my question.I am curious about the service surcharge rate within the SDM, which I think includes warranty and maintenance.

Maybe you can talk about what you 've been doing to increase this.How big is this opportunity over time? Yonah Lloyd -Stratasys Ltd.Have you ever asked SDM or FDM, Shannon? Shannon S.Cross -This is cross-study, sorry.I asked people like you-service, it's not a limited company.

No.So basically, you can-I can see from your transcript and some of the records-your prepared comments, you start to increase your emphasis on the maintenance of your products and other services, which helps to drive the growth of some service revenue.Right? Lilach Payorski-Stratasys Ltd.Yeah.Yes, so-yes, we see-we see continued growth in service revenue, contract maintenance, and time and materials, due to increased attachment rates for customer purchase update maintenance, and an increase in installation base, maintenance.

So this is basically what we have experienced for several quarters in a row.Therefore, it verifies that our customers are using machines and requires our additional added value to be combined with maintenance that brings value to our customers.They choose to actually renew the contract and continue to work with Stratasys, who have a result service.Shannon S.Cross -I guess what I'm trying to figure out is within your installation base, is this an opportunity to enter and sell out of service to your installation base, that way there will be more incremental growth than you can see from the product-attach new product sales, or this is not the local base where we can expect you to be able to sign incremental services and contracts with the people currently installed.

David Reis -Stratasys Ltd.Sure.Lilach Payorski-Stratasys Ltd.Yes, of course.okay, David.

David Reis -Stratasys Ltd.Again, we need to remember clearly that a major part of our business is the supply of consumables to our customers.So the fact that we are all able to show our customers that a full service contract is good for them, which often leads to higher satisfaction, a derivative of the machine's off-duty hours, this means higher consumables.So it's all connected.Therefore, it is a huge effort to establish a full service contract, because we know from past experience that customers with full service will usually be happier; B, they have higher uptime, so they use more consumables.

So hard is a crossCorporate efforts generated in terms of revenue and it services, but also indirectly affect sales of consumer goods.Shannon S.Cross -Thanks, Cross Research.Then David, can you talk, I thought about 2018, at least one of the feelings I got from our conversation with your company is that for the industry, this is a year of pause and there are a lot of technologies under development.It is clear that metal is not something you have to want, but something that benefits directly.

David Reis -Stratasys Ltd.Yeah.Shannon S.Cross -So I think in terms of your conversations with clients and your position, you think we have reached the point where 2019 more benefits from all investments in 2018 and 2017, or do you think the industry is just a bit slow and stable so we shouldn't be looking for an inflection point? David Reis -Stratasys Ltd.Overall, I don't think the industry is slowing down.

I think some companies, including ourselves and some other major companies, find themselves in a different environment where competition is much more intense, at least on paper, by the way, it's not direct competition, it's more attention sharing, and in some cases pocket sharing is indirect competition.I think I hope that in the next year or two our customers will see this as well, so they will be able to make decisions faster, because one of the things we 've seen-and we talked about it on previous calls-is that the speed at which customers decide to buy devices slows down, because at least it looks like there are more and more products and the terms are confusing.So I think it may become clearer in the next year or two.I think the overall situation is likely to improve because at least at Stratasys we are developing and investing a lot of money to develop new and improved technologies.So I think this combination, you ask me again, it will happen to start on 2019, end on 2019, start on 2020, and end on 2020.

I think I hope and look forward to seeing improvements in the medium and short term.Shannon S.Cross -Thank you very much for your cross-study.Your next question is from Hendi Susanto at Gabelli.Your line is open.

Hendi Susanto -Gabelli & Company, Inc.Good morning Elan, David and Lilach thank you for answering my questions.El Chalan jaglon-Stratasys Ltd.Good morning, Hendy.David Reis -Stratasys Ltd.

Good morning.Hendi Susanto -Gabelli & Company, Inc.One question.Can you share some of the main reasons why you are canceling your annual income guidance? Lilach Payorski-Stratasys Ltd.Yes.

Now, after we have ended three quarters this year, and we have visibility for the rest of this year, we believe that we are adjusting the guidelines, narrowing it down to $0.billion to $0.billion will definitely give you some insight into what's going on in the fourth quarter.We believe this scope can be achieved.Remind you that the fourth quarter is traditionally our highest quarter from a seasonal perspective.

We are confident that we will be able to meet these narrow guidelines.One thing to note is that we may be close to $0.billion, but we still keep $0.billion within the $0.billion range.

Hendi Susanto -Gabelli & Company, Inc.Got it.Thank you.Very helpful.Operator your next question comes from David Ryzhik's collaboration with Susquehanna Financial Group.

Your line is open.David Ryzhik -Susquehanna Financial Group LLLPHi thank you very much for answering this question.I want to dig deep into the advantages of SDM parts.I think it's up 12% a year.over-year.

Maybe in your discussion with the customer, the added parts order is a feature that they test your system, which can lead to hardware sales, or do you think they are separate parts businessDid they let you see that power in the next few quarters, do you think it is sustainable? I have a following.up.David Reis -Stratasys Ltd.Maybe I will answer the first part first.We said in the script that a few quarters ago, we basically linked the SDM to our North American business, and one of the reasons we did this was to try to create synergies between the two sales infrastructure.

Obviously, we also said on the conference call that there has been an increase in production SDM on the digital side compared to tradition.Of course, some digital products use Stratasys equipment and products.I believe that when a customer wants to buy the number of these devices or for different reasons, it will also affect their purchase decisions --house.As for future projections, I think we should expect to benefit from the synergies between the two organizations.Hopefully the results will continue to grow.

David Ryzhik -LLLPGreat, a group of Susquehanna.Thank you, David.And hope to get the latest information of F123 and MakerBot, especially F123.On the F123 side, I would love any color there and on MakerBot it sounds like you guys have some new product introductions on the way.David, I would be happy to learn what you think about the desktop opportunity market, how do you see it, and what we expect from MakerBot over the next year? David Reis -Stratasys Ltd.

So, first of all, MakerBot's performance on different elements is consistent, even better than we expected.Obviously, I can't disclose information about the new product, but we have also done a lot of R & D work with MakerBot.As far as the whole market is concerned, I think in the coming quarters this market will also go through some rationalisation, and I expect MakerBot, which, by the way, is a major player there today, continue to be a major player in this market.Yonah Lloyd -Stratasys Ltd.David regarding your question on F123, we also have some exciting innovations and plans that are planned for next year.

So you have to keep an eye on that.David Reis -Stratasys Ltd.Yeah.David Ryzhik -LLLPOkay, financial group.Great.

Thanks again.David Reis -Stratasys Ltd.Thank you.Your next question comes from the Ben Rose series of battle road research.Your line is open.

Ben Z.Rose -War road Research Co.Ltd.Good morning, yes.Congratulate on the results achieved in the difficult market.

David, your question.Refer to what you said before as a market presence-the market is more competitive, but there are opportunities for growth.Last quarter, you talked about how HP and Stratasys can fight HP more directly.I would like to know if Jet Fusion has been on the market for some time after HP tried to freeze the market before delivery, and do you now see that customers are more clear about your value proposition with respect to HP? David Reis -Stratasys Ltd.Yes – yes.

I think, I said it again just now.I think in the past few years, we have seen a lot of new competition coming into the market, initially and even today, there is some confusion about the different benefits of different products for a variety of industries and applications.I think what is good for customers to learn gradually.Again, I think we are lucky that our market is growing and I hope that this market will become a very large market in the next few years.I don't-I 've said it many more times, the problem is not direct competition, the problem is-for example, ofdm is a great technology for manufacturing.

There are a lot of areas in the manufacturing industry that may be the best technology, okay, there's almost no competition, okay.Nevertheless, customers are still hesitating when other participants enter the market.They have to learn, they have to test.I think we are in a process where each technology becomes clear to the audience and people will know where to place which technologies.Because I think the whole market will grow and continue to grow, I think direct competition will become less important.

Ben Z.Rose -War road Research Co.Ltd.Okay.Thank you very much.

El Chalan jaglon-Stratasys Ltd.Okay.Thank you for attending today's conference call.We look forward to the people attending the annual formnext exhibition in Frankfurt later this month.We are very happy to talk to you early next year.

Thank you.This is the end of today's conference call, ladies and gentlemen.Thank you for your participation and wish you a wonderful day.You can all disconnect.

[constructionmachinery95]

stratasys (ssys) q3 2018 results - earnings call transcript

Stratasys Ltd.Stratasys Ltd.NASDAQ:SSYS)At 8: 30 a.m.on November 1, 2018, etexecuesyonah Lloyd-2018 revenue call for the third quarterStratasys Ltd.El Chalan jaglon-Stratasys Ltd.Lilach Payorski-Stratasys Ltd.

David Reis -Stratasys Ltd.AnalystsTroy D.Jensen -Piper Jaffray & Co.Brian P.Drab -William BlairMohan-Ibuprofen Suspension Drops Bank of AmericaCircular capital marketCross -Cross-study LLCHendi Susanto-Gabelli & Company, Inc.

David Ryzhik -LLLPBen Z, financial group.Rose -War road Research Co.Ltd.Good morning, ladies and gentlemen, welcome to the third quarter 2018 Stratasys earnings call.As a reminder, this conference call is being recorded.

I would like to transfer the phone to your host Yonah Lloyd now.Yonah Lloyd -Stratasys Ltd.Thank you.Good Morning, everyone.Thank you for discussing with us our financial performance for the third quarter.

Today we are talking to the interim CEO, Elan Jaglom; David Reis, vice chairman and head of our board of directors Oversight Committee, joined by telephone; And our chief financial officer, Lilach Payorski.I will remind you that on the web address provided in our press release, today's call can be accessed online, including a prepared slide presentation.In addition, a replay of today's call will be provided, including access to the slide presentation, and accessible through the Investor Relations section of our website.Please note that some of the information you will hear in our discussion today will include forwarding-Outlook statements, including but not limited to statements regarding our expectations for future earnings, gross margin, operating expenses, taxes and other future financial performance, and our expectations for the business outlook.All statements relating to future performance, events, expectations, or results are forward --Look at the report.

Actual results or trends may differ greatly from our predictions.Risks that may lead to significant differences between the actual results and the results specified in the forward,Looking at the report, please refer to the risk factors that stratasy discussed in the Annual Report on Form 20-F.February 28, 2018 report to SEC on 2017 and our report on Form 6K, and the relevant press release we have provided to the SEC today regarding our revenue for 2018.Stratasys is under no obligation to update any forwarding-Statements or information as of their respective dates.As in previous quarters, today's call will include GAAP and non-GAAP Financial indicators.

The non-The GAAP financial indicators should be combined with our GAAP indicators to evaluate our performance.Certain non-GAAP-to-GAAP reconciliation is provided in our slide presentation and in the form contained in today's press release.Now I want to transfer the call to our interim CEO, Elan Jaglom.Elan? El Chalan jaglon-Stratasys Ltd.Thank you Yonah.

Good Morning, everyone.Thank you for attending today's conference call.We are happy with our third quarter results, which show high-End-system orders that began in the previous quarter, as well as improvements made directly by Stratasys, and steady growth in recurring consumer goods and consumer support revenue.I will be back on the phone later to provide an update on our search for a new CEO, and David will provide more details on the quarter's highlights and other key developments.But first, I will transfer the call to our CFO, Lilach Payorski, who will review the details of our financial results.

Lilach? Lilach Payorski-Stratasys Ltd.Thank you, Elan.Good morning, everyone.Total revenue for the third quarter was $0.billion, compared to $155.

The same period last year was 9 million, up 4% year on year.After adjusting the entity to sell our divestiture this quarter, in a similarfor-As with basis, total revenue grew by 6%.GAAP operating income for the third quarter was $3.million, while operating losses of $6.The same period last year was 9 million.

Non-GAAP operating income for the third quarter was $8.Compared to $8 in operating income, it was 2 million.The same period last year was 1 million.Product revenue for the third quarter was $109.million, increase 1.

compared with the same period last year, 3.does not include entities that have been stripped.In terms of product revenue, the system revenue for the quarter was flat from the same period last year, but increased by 3.after adjustment for the entity being stripped.Revenue from consumer goods increased by 2.

Growth of 6% over the same period last year, an increase of 4.does not include entities that have been stripped.Service revenue for the third quarter was $52.million, an increase of 10.Compared to the same period last year, due to the growth of customer support revenue and the strong performance of Stratasys Direct Manufacturing, the figure was 4%.

In service revenue, customer support revenue has increased by seven times, including revenue generated primarily by maintenance contracts on our system.Compared to the same period last year, 4% was mainly due to the increase in the number of systems we installed and the increase in the additional rate of service contracts.The gross profit margin of GAAP is 48.Compared with 48, the quarter was 7%.The same period last year was 3%.

Non-The gross profit margin of GAAP is 52.Compared with 52, the third quarter was 1%.Driven by our sources of income, it was 5% in the same period last year.Non-Gross profit margin of GAAP products increased to 60.compared 59.

Driven by the product structure, the same period last year was 6%.Non-The gross profit margin for GAAP services is 34.compared with 36.The same period last year was 3%, reflecting an increase in our investment in customer service and support operations.GAAP operating expenses fell 8% to $75.

Compared with the same period last year, the third quarter was 6 million, mainly due to net income from divestment.Non-GAAP operating expenses increased by 3.to $76.Compared with the same period last year, the third quarter was 3 million, reflecting our continued investment in long-term R & D.Including the advancement of our core LLC and bunching technology, as well as our new metal additive manufacturing platform, advanced composites, and software and application development.

Compared to $4, the company generated $5 million in cash from operations in the third quarter.Cash generated in the third quarter last year accounted for 6 million.We ended the third quarter with $348.Cash and cash equivalents were $9 million, compared to $346.The end of the second quarter of 2018 was 7 million.

Inventory increased slightly to $118.million, compared to $0.billion in 2018.Accounts receivable increased to $129.million, compared to $123.

As of the end of second quarter of 2018, 5 million days of sales were not completed or DSO was at 12-The monthly income is 71.To sum up, our income results are in line with expectations and reflect highTerminal system sales.We are satisfied with the continuous improvement made directly by Stratasys, which contributes to the growth of overall service revenue.Our ongoing revenue growth in consumer goods and customer support is encouraging and demonstrates the continued health of the system base we have installed.We are satisfied with our operating expense control, which resulted in a reduction in G & a as we increased our long-term investmentSupport our technology leadership and long-term initiatives to expand our target market.

We continue to maintain the trend of generating positive cash from our business activities and believe that we maintain a healthy balance sheet and are fully prepared to take advantage of the opportunities to move forward.I want to transfer the phone to Elan now.El Chalan jaglon-Stratasys Ltd.Thank you, Lily.As we pointed out in our last call, the board of directors of the company has set up an executive search committee composed of me and our compensation committee chairman Victor livintal to assist in the identification of new Chief Executive Officer.

Vic and I have been actively interviewing candidates, some of whom have gone deep into the process and we have met or talked with other members of the board.We believe that the people on our shortlist are strong leaders with relevant global operations experience, and we look forward to announcing the new CEO after completing the search.I would now like to ask David to provide more detailed information about the results of the quarter.David? David Reis -Stratasys Ltd.Thank you, sharp.

In the first quarter, we were satisfied with the continued commitment we observed from our customers, which was reflected in the highThe continued growth in terminal production systems and recurring revenue for consumables and services is notable, although we experienced a decline in system sales at the beginning of the year.We are satisfied with the increase in customer commitment.As customers go beyond the qualification and validation phase of the app and expand their capabilities in a real production environment, we continue to see.For example, in the first quarter of last year, we talked about how Siemens Mobile developed the use of Stratasys FDM 3D printing technology by producing customized final production parts for German transport service providers.In mid-On September, Siemens Mobile announced the opening of its first digital railway maintenance center in Germany-Siemens mobile RRX railway service center.

The new repair warehouse is expected to serve more than 100 trains per month and provide the highest level of digital services in the railway industry, with Stratasys's advanced FDM 3D printer at the heart of their service operations.Increased inventory-sorryIn addition, on August, at the IMTS manufacturing exhibition, we showed multiple customers at the booth and highlighted the unique applications they solved today with our technology, including FedEx, they are working to deploy additive manufacturing facilities to locations closer to their customers as part of FedEx forwarding warehouse services to improve the efficiency of the supply chain.SLS (sic)[SSL]An aerospace customer who uses our FDM technology to quicklyHigh response customizationTemperature laying-Tools that used to be done with CNC.RockTandospirone Citrate Tablets Martin uses our new Antero PEKK advanced thermoplastic materials to make highly repeatable parts that meet the strict mechanical function and size requirements of space travel.And the Penske NASCAR department showed multiple 3D printing terminals.

Compared to multiple days using traditional machine methods, parts that can be created in one day using their production managers.In addition to the manufacturing applications that our technology can solve, we are excited about the progress we have made in developing new and innovative solutions, we believe this will expand our addressable market in advanced manufacturing in the coming years.We are pleased with the progress made in the development of new metal additive manufacturing platforms for short-term production, and expect that next year, as we move into various stages, there will be greater engagement with our development partners to commercialize.We are encouraged by the improvements in the performance and strategy of direct manufacturing.The SDM is benefiting from the organizational changes we made at the beginning of the year to directly incorporate them into the North American sales organization, and taking advantage of the synergy between our parts and hardware business and the strong growth in manufacturing orders under the leadership of metal parts production, our top customers have added more complex large projects and projects, aerospace in particularEspecially in the third quarter, we are pleased to see a significant increase in order size for several large customers and are increasingly relying on SDM to meet production parts and development needs.

As we discussed in the past, the combination of the SDM business has significantly shifted to more profitable additive manufacturing parts compared to traditional manufacturing.I would now like to transfer the call to Yonah, our Vice President of Investor Relations, who will give a more detailed account of our 2018 financial guidance.Yonah? Yonah Lloyd -Stratasys Ltd.Thank you, David.We are updating our guidance for 2018 as shown below.

Total revenues ranged from $0.billion to $0.billion, compared to the previous guidelines of $0.billion to $0.billion.

GAAP's net loss was $10 million to $2 million or $0.to $0.Compared to the previous guidance of a net loss of $41 million to $25 million or $0, the diluted $04 per share.to $0.per share after dilution.

Non-GAAP net income is between $27 million and $30 million or $0.to $0.Compared to previous guidance of net income of $16 million to $27 million or $0, the diluted share per share was $55.to $0.per share after dilution.

Non-The operating profit margin of GAAP is expected to remain at 4.to 6%.Capital expenditure is projected at $25 million to $35 million, compared with an earlier estimate of $30 million to $40 million.Our guidance reflects an increase in investment in R & D, tools, materials and additional resources, designed to expand our addressable market by accelerating our development efforts for new metal additive manufacturing platforms based on our FDM and PolyJet technologies and specific go-to-Market initiatives to deepen customer engagement.Non-The GAAP earnings guide does not include an estimated amortization of $34 million for intangible assets, a share of $16 million to $17 million-Net income from divestiture and restructuring based on $23 million to $22 million --Related expenses are between $6 million and $7 million, including tax revenue from non-tax-related negative $1 million to $1 millionAdjustment of general accounting standards in the United States.

Estimated nonThe GAAP tax rate of 2018 is subject to continuous non-We expect cash valuation subsidies for deferred tax assets to be recorded in the United States throughout the yearS.losses.Given the continued negative impact of non-record tax incentives on expectations in the United StatesS.The tax loss of our net income, and our non-The Company believes that the GAAP tax rateGAAP operating income is the best measure of our performance.Generally recognized accounting principles between appropriate adjustments and non-GAAP Financial indicators are provided in the form at the end of our press release and slide presentation with details about non-GAAP Financial indicators.

Operator, you can open the problem phone now.Question-and-Your first question is from Troy Jensen at Piper.Your line is open.Troy D.Jensen -Piper Jaffray & Co.

Hey, gentlemen, congratulate the improvement here.El Chalan jaglon-Stratasys Ltd.Thanks, Troy.Lilach Payorski-Stratasys Ltd.Thanks.

Troy D.Jensen -Piper Jaffray & Co.Hey, so fast, maybe for David, I think, or for Lily --The terminal system performed strongly this quarter.Have you seen this force in all vertical fields, and I think I'm trying to figure out when we really want to see a significant change in the Aerospace vertical? David Reis -Stratasys Ltd.So – okay.

So, for the second quarter in a row, we see power, mainly what we call government power, mainly military and aerospace.But I think if you look back, say four or five quarters, we will see the strength of all the manufacturing areas, including automotive, aerospace and military.Troy D.Jensen -Piper Jaffray & Co.Would you like to see a more meaningful acceleration of the aerospace business? David Reis -Stratasys Ltd.

I think-we talked about it last quarter.It takes time for the customer to move from testing and verification to actual production.In some companies, with the help of some partners, we see the process begin gradually.I think as customer confidence grows, we will see an acceleration in the use of molds and terminals in particularParts are used in these areas, especially in aerospace.Troy D.

Jensen -Piper Jaffray & Co.Okay.That's fair.But I want you, David.sorry.

Can you tell us what you think about the HP color release and whether this will affect PolyJet now, or do you think it will affect PolyJet in the coming quarters? David Reis -Stratasys Ltd.I don't think this will affect PolyJet at all, and I'm very happy to hear that HP is following us into the color market.I think the color will be the standard for prototyping in the next few years.This is a change of mentality of the user group.So I'm glad that other companies have entered the field as well.

I think technology-It is wise that from a technical and quality perspective, we are currently in the best position to lead this change.So I'm not worried about this.I am glad that other competitors have entered the field as well.Troy D.Jensen -Piper Jaffray & Co.

Okay.I will give up speaking if I can get another question, but can you talk about the material? I think they're two.maybe a little more when you take some divestiture into account.But-I mean, do you think the growth rate is sustainable or lower than the growth rate of historical trends? David Reis -Stratasys Ltd.Troy, I think there are two parameters for consumer consumption.

One of them is a direct derivative of the number of printers we sold in this quarter and last quarter.The other has to do with utilization, which is directly related to the number of applications we were able to provide the installation Foundation over time and improve the workflow and the like.So I think even though our machine sales slowed down in the first quarter, we are happy to see a rise in consumption.Directly related to it.So when we go back to the growth of hardware sales or more substantial growth, you see the growth of consumables.

We are making progress, not comprehensive, but many departments that improve applications and workflows, which leads to an increase in consumption.To sum up, I think I estimate that in the future, as we continue to restore hardware sales and continue to provide better workflow and application knowledge to our customers, we should see the growth of consumables.Troy D.Jensen -Piper Jaffray & Co.Perfect.

All right.Good luck and move on.David Reis -Stratasys Ltd.Thank you.Your next question comes from Brian monotony of William Blair.

Your line is open.Brian P.Drab -William BlairLLCHi.Thank you for answering my question.I just wanted to ask about the operating expenses first.

You showed this well on slide 10.R & D seems to have substantially increased by several million, with SG & a down a bit.Can you give us any help at the end of the quarter of 2018 and 2019? Lilach Payorski-Stratasys Ltd.Good morning.So, from the rhythm of operating expenses, from the point of view of revenue, usually the fourth quarter is also our strongest quarter.

So I would also like to see an increase in operating costs.In terms of R & D costs, this is consistent with our increased communication on core technology and ofdm technology as well as on metal investment earlier this year, and the addition of additional applications.The expenditure on R & D expenses is actually based on the life cycle and schedule of the project.So R & D doesn't necessarily have a specific seasonality, more like the project lifecycle I mentioned.Therefore, due to the seasonality of revenue, we expect operating expenses to be higher in the fourth quarter, and the speed of R & D may continue to maintain a similar level.

Brian P.Drab -William BlairLLCOkay.Got it.Can you then give me more updates on some of the technologies you are developing, especially in Evolve and Falcon, just a summary of this progress? This may also remind you of your ownership structure there and how these technologies and their potential success will affect your future results.Lilach Payorski-Stratasys Ltd.

So we reported earlier this year that we had divested Evolve.As a result, these results are not currently part of operating income.We basically share our share in the results of evolution.We maintain a minority interest in these entities.The results are basically below.

Therefore, we do not expect to have a significant result or impact on our finances.Brian P.Drab -William BlairLLCOkay.Just curious if you can comment on the reason why if these are such interesting technologies, why are they built this way, if you can benefit more from these exciting technologies, that would be great.I'm just curious.

Thanks.El Chalan jaglon-Stratasys Ltd.Brian? Next question...

El Chalan jaglon-Stratasys Ltd.Oh, okay.Go ahead.Sorry, go ahead.Your next question comes from the Wamsi Mohan line at Bank of America.

Your line is open.Wamsi Mohan -Bank of America Ibuprofen Suspension Drops.Thank you.Good morning.Thanks for the update of CEO search.

Sounds like you're a little close.Should we look forward to your announcement this quarter? It's hard to really underwrite this long-The long-term strategic direction of the company until you announce a new CEO who will either articulate the strategy or reiterate the strategy.So is this something fairly recent? I have a following.up please.El Chalan jaglon-Stratasys Ltd.

Yes, yes.So we have been actively looking for the CEO.As we have announced, we have interviewed some people, some very good candidates.That's not something I can say briefly, because I have to have a contract for that and we don't have a contract.So we do it very actively.

We are looking for a great leader with a strong investor background with global operating experience and we have some very good candidates.So we will do that when we are ready to announce it.We said it might take about nine months.We are within this scope, trust me, we want to do this as soon as possible and we will let you know once we have made some announcements.Wamsi Mohan -Bank of America Ibuprofen Suspension Drops.

Thank you.As follow-upUp, if you think the proposed Chinese tariff has any impact on your business, or the potential impact you hear from your customers, can you talk about it? Also, I would like to know if you can tell us if FX flows have any impact on your performance for the quarter and what you expect for the fourth quarter? Thank you.El Chalan jaglon-Stratasys Ltd.Okay, so Lily can handle it.So, Lily.

Lilach Payorski-Stratasys Ltd.Yes, thank you.Good morning.Therefore, we will certainly pay close and careful attention to all the changes that are taking place in the United States.S.

Changes in tariffs will change.At the moment, especially our business, we do not see significant impact from a cost perspective.But there may be some, but it will not be so important.We are addressing alternatives or any other alternatives from a cost perspective.What's the? Wamsi Mohan -Bank of America Ibuprofen Suspension Drops.

Lilach Payorski-Stratasys Ltd.The FX.Foreign exchange problem, we don't have this quarter-Foreign Exchange has not had such a big impact on us.The euro did not fluctuate so much.The impact was small, with revenues of about $500,000.

Wamsi Mohan -Bank of America Ibuprofen Suspension Drops.Thank you.Your next question is from Ananda Baruah at Loop Capital.Your line is open.Ananda Baruah -Yes, thank you for answering this question and congratulate you on the solid results achieved.

Can you, for us to summarize or go through what you want us to think is the 2019 driving force of the business and what you will focus on, if you guys can give us some of these people how to layer over the course of the year, it will also help? Then I followed up quickly.up.David Reis -Stratasys Ltd.Okay, David, let me get it.Good morning.

We believe it is possible for us to return to a reasonable growth rate in the third quarter.We will focus on two areas.One of them is our infrastructure and sales business.I think on a global scale, we can do better to improve our lead in sales and marketing.On the back of it, as you can see in our R & D budget, we are spending a lot of money developing a great product in all areas where we are active, with our SDM series, the manufacturing side has the best rapid prototyping system based on PolyJet Technology and re-manufacturing.

So next year and 2020 will launch very interesting products and improve overall operations in terms of global sales and marketing, and we hope this will pay off, even increased top line growth compared to what you saw in q3.Ananda Baruah -This is very helpful for the circular capital market.I appreciate it.Quick follow-up-up.Can you please remind us from a metal point of view, even at a higher level at this point, how do you see your division, relative to what has already happened, now that HP has revealed more, I just want to hear what you think about Stratasys difference? Thanks.

David Reis -Stratasys Ltd.Again, I can't spend too much money on this, but we are developing a unique technology that we believe in.But this must be proven in the coming quarters and years, which is well suited for remanufacture of metal parts.It is different from other technologies.I think it will be more suitable for production and cheaper.

As we said in the script, we are working with several important partners around the world to develop and finalize the exact way the system works.But we are advancing this process relatively.We will announce and provide more information when we are ready.Yonah Lloyd -Stratasys Ltd.Ananda, I'm Yuna.

At the formnext exhibition in Frankfurt two weeks later, we will have some delegates from the metal team present and we will provide more details there.So if you or anyone else, of course, can get there on the phone, you will definitely get more information.Ananda Baruah -This is a great market for revolving capital.That's great.Thank you very much.

Your next question comes from the Shannon cross line of Cross Research.Your line is open.Shannon S.Cross -Thank you very much for accepting my question.I am curious about the service surcharge rate within the SDM, which I think includes warranty and maintenance.

Maybe you can talk about what you 've been doing to increase this.How big is this opportunity over time? Yonah Lloyd -Stratasys Ltd.Have you ever asked SDM or FDM, Shannon? Shannon S.Cross -This is cross-study, sorry.I asked people like you-service, it's not a limited company.

No.So basically, you can-I can see from your transcript and some of the records-your prepared comments, you start to increase your emphasis on the maintenance of your products and other services, which helps to drive the growth of some service revenue.Right? Lilach Payorski-Stratasys Ltd.Yeah.Yes, so-yes, we see-we see continued growth in service revenue, contract maintenance, and time and materials, due to increased attachment rates for customer purchase update maintenance, and an increase in installation base, maintenance.

So this is basically what we have experienced for several quarters in a row.Therefore, it verifies that our customers are using machines and requires our additional added value to be combined with maintenance that brings value to our customers.They choose to actually renew the contract and continue to work with Stratasys, who have a result service.Shannon S.Cross -I guess what I'm trying to figure out is within your installation base, is this an opportunity to enter and sell out of service to your installation base, that way there will be more incremental growth than you can see from the product-attach new product sales, or this is not the local base where we can expect you to be able to sign incremental services and contracts with the people currently installed.

David Reis -Stratasys Ltd.Sure.Lilach Payorski-Stratasys Ltd.Yes, of course.okay, David.

David Reis -Stratasys Ltd.Again, we need to remember clearly that a major part of our business is the supply of consumables to our customers.So the fact that we are all able to show our customers that a full service contract is good for them, which often leads to higher satisfaction, a derivative of the machine's off-duty hours, this means higher consumables.So it's all connected.Therefore, it is a huge effort to establish a full service contract, because we know from past experience that customers with full service will usually be happier; B, they have higher uptime, so they use more consumables.

So hard is a crossCorporate efforts generated in terms of revenue and it services, but also indirectly affect sales of consumer goods.Shannon S.Cross -Thanks, Cross Research.Then David, can you talk, I thought about 2018, at least one of the feelings I got from our conversation with your company is that for the industry, this is a year of pause and there are a lot of technologies under development.It is clear that metal is not something you have to want, but something that benefits directly.

David Reis -Stratasys Ltd.Yeah.Shannon S.Cross -So I think in terms of your conversations with clients and your position, you think we have reached the point where 2019 more benefits from all investments in 2018 and 2017, or do you think the industry is just a bit slow and stable so we shouldn't be looking for an inflection point? David Reis -Stratasys Ltd.Overall, I don't think the industry is slowing down.

I think some companies, including ourselves and some other major companies, find themselves in a different environment where competition is much more intense, at least on paper, by the way, it's not direct competition, it's more attention sharing, and in some cases pocket sharing is indirect competition.I think I hope that in the next year or two our customers will see this as well, so they will be able to make decisions faster, because one of the things we 've seen-and we talked about it on previous calls-is that the speed at which customers decide to buy devices slows down, because at least it looks like there are more and more products and the terms are confusing.So I think it may become clearer in the next year or two.I think the overall situation is likely to improve because at least at Stratasys we are developing and investing a lot of money to develop new and improved technologies.So I think this combination, you ask me again, it will happen to start on 2019, end on 2019, start on 2020, and end on 2020.

I think I hope and look forward to seeing improvements in the medium and short term.Shannon S.Cross -Thank you very much for your cross-study.Your next question is from Hendi Susanto at Gabelli.Your line is open.

Hendi Susanto -Gabelli & Company, Inc.Good morning Elan, David and Lilach thank you for answering my questions.El Chalan jaglon-Stratasys Ltd.Good morning, Hendy.David Reis -Stratasys Ltd.

Good morning.Hendi Susanto -Gabelli & Company, Inc.One question.Can you share some of the main reasons why you are canceling your annual income guidance? Lilach Payorski-Stratasys Ltd.Yes.

Now, after we have ended three quarters this year, and we have visibility for the rest of this year, we believe that we are adjusting the guidelines, narrowing it down to $0.billion to $0.billion will definitely give you some insight into what's going on in the fourth quarter.We believe this scope can be achieved.Remind you that the fourth quarter is traditionally our highest quarter from a seasonal perspective.

We are confident that we will be able to meet these narrow guidelines.One thing to note is that we may be close to $0.billion, but we still keep $0.billion within the $0.billion range.

Hendi Susanto -Gabelli & Company, Inc.Got it.Thank you.Very helpful.Operator your next question comes from David Ryzhik's collaboration with Susquehanna Financial Group.

Your line is open.David Ryzhik -Susquehanna Financial Group LLLPHi thank you very much for answering this question.I want to dig deep into the advantages of SDM parts.I think it's up 12% a year.over-year.

Maybe in your discussion with the customer, the added parts order is a feature that they test your system, which can lead to hardware sales, or do you think they are separate parts businessDid they let you see that power in the next few quarters, do you think it is sustainable? I have a following.up.David Reis -Stratasys Ltd.Maybe I will answer the first part first.We said in the script that a few quarters ago, we basically linked the SDM to our North American business, and one of the reasons we did this was to try to create synergies between the two sales infrastructure.

Obviously, we also said on the conference call that there has been an increase in production SDM on the digital side compared to tradition.Of course, some digital products use Stratasys equipment and products.I believe that when a customer wants to buy the number of these devices or for different reasons, it will also affect their purchase decisions --house.As for future projections, I think we should expect to benefit from the synergies between the two organizations.Hopefully the results will continue to grow.

David Ryzhik -LLLPGreat, a group of Susquehanna.Thank you, David.And hope to get the latest information of F123 and MakerBot, especially F123.On the F123 side, I would love any color there and on MakerBot it sounds like you guys have some new product introductions on the way.David, I would be happy to learn what you think about the desktop opportunity market, how do you see it, and what we expect from MakerBot over the next year? David Reis -Stratasys Ltd.

So, first of all, MakerBot's performance on different elements is consistent, even better than we expected.Obviously, I can't disclose information about the new product, but we have also done a lot of R & D work with MakerBot.As far as the whole market is concerned, I think in the coming quarters this market will also go through some rationalisation, and I expect MakerBot, which, by the way, is a major player there today, continue to be a major player in this market.Yonah Lloyd -Stratasys Ltd.David regarding your question on F123, we also have some exciting innovations and plans that are planned for next year.

So you have to keep an eye on that.David Reis -Stratasys Ltd.Yeah.David Ryzhik -LLLPOkay, financial group.Great.

Thanks again.David Reis -Stratasys Ltd.Thank you.Your next question comes from the Ben Rose series of battle road research.Your line is open.

Ben Z.Rose -War road Research Co.Ltd.Good morning, yes.Congratulate on the results achieved in the difficult market.

David, your question.Refer to what you said before as a market presence-the market is more competitive, but there are opportunities for growth.Last quarter, you talked about how HP and Stratasys can fight HP more directly.I would like to know if Jet Fusion has been on the market for some time after HP tried to freeze the market before delivery, and do you now see that customers are more clear about your value proposition with respect to HP? David Reis -Stratasys Ltd.Yes – yes.

I think, I said it again just now.I think in the past few years, we have seen a lot of new competition coming into the market, initially and even today, there is some confusion about the different benefits of different products for a variety of industries and applications.I think what is good for customers to learn gradually.Again, I think we are lucky that our market is growing and I hope that this market will become a very large market in the next few years.I don't-I 've said it many more times, the problem is not direct competition, the problem is-for example, ofdm is a great technology for manufacturing.

There are a lot of areas in the manufacturing industry that may be the best technology, okay, there's almost no competition, okay.Nevertheless, customers are still hesitating when other participants enter the market.They have to learn, they have to test.I think we are in a process where each technology becomes clear to the audience and people will know where to place which technologies.Because I think the whole market will grow and continue to grow, I think direct competition will become less important.

Ben Z.Rose -War road Research Co.Ltd.Okay.Thank you very much.

El Chalan jaglon-Stratasys Ltd.Okay.Thank you for attending today's conference call.We look forward to the people attending the annual formnext exhibition in Frankfurt later this month.We are very happy to talk to you early next year.

Thank you.This is the end of today's conference call, ladies and gentlemen.Thank you for your participation and wish you a wonderful day.You can all disconnect.

[heavydutymachinery94]

stratasys (ssys) q3 2018 results - earnings call transcript

Stratasys Ltd.Stratasys Ltd.NASDAQ:SSYS)At 8: 30 a.m.on November 1, 2018, etexecuesyonah Lloyd-2018 revenue call for the third quarterStratasys Ltd.El Chalan jaglon-Stratasys Ltd.Lilach Payorski-Stratasys Ltd.

David Reis -Stratasys Ltd.AnalystsTroy D.Jensen -Piper Jaffray & Co.Brian P.Drab -William BlairMohan-Ibuprofen Suspension Drops Bank of AmericaCircular capital marketCross -Cross-study LLCHendi Susanto-Gabelli & Company, Inc.

David Ryzhik -LLLPBen Z, financial group.Rose -War road Research Co.Ltd.Good morning, ladies and gentlemen, welcome to the third quarter 2018 Stratasys earnings call.As a reminder, this conference call is being recorded.

I would like to transfer the phone to your host Yonah Lloyd now.Yonah Lloyd -Stratasys Ltd.Thank you.Good Morning, everyone.Thank you for discussing with us our financial performance for the third quarter.

Today we are talking to the interim CEO, Elan Jaglom; David Reis, vice chairman and head of our board of directors Oversight Committee, joined by telephone; And our chief financial officer, Lilach Payorski.I will remind you that on the web address provided in our press release, today's call can be accessed online, including a prepared slide presentation.In addition, a replay of today's call will be provided, including access to the slide presentation, and accessible through the Investor Relations section of our website.Please note that some of the information you will hear in our discussion today will include forwarding-Outlook statements, including but not limited to statements regarding our expectations for future earnings, gross margin, operating expenses, taxes and other future financial performance, and our expectations for the business outlook.All statements relating to future performance, events, expectations, or results are forward --Look at the report.

Actual results or trends may differ greatly from our predictions.Risks that may lead to significant differences between the actual results and the results specified in the forward,Looking at the report, please refer to the risk factors that stratasy discussed in the Annual Report on Form 20-F.February 28, 2018 report to SEC on 2017 and our report on Form 6K, and the relevant press release we have provided to the SEC today regarding our revenue for 2018.Stratasys is under no obligation to update any forwarding-Statements or information as of their respective dates.As in previous quarters, today's call will include GAAP and non-GAAP Financial indicators.

The non-The GAAP financial indicators should be combined with our GAAP indicators to evaluate our performance.Certain non-GAAP-to-GAAP reconciliation is provided in our slide presentation and in the form contained in today's press release.Now I want to transfer the call to our interim CEO, Elan Jaglom.Elan? El Chalan jaglon-Stratasys Ltd.Thank you Yonah.

Good Morning, everyone.Thank you for attending today's conference call.We are happy with our third quarter results, which show high-End-system orders that began in the previous quarter, as well as improvements made directly by Stratasys, and steady growth in recurring consumer goods and consumer support revenue.I will be back on the phone later to provide an update on our search for a new CEO, and David will provide more details on the quarter's highlights and other key developments.But first, I will transfer the call to our CFO, Lilach Payorski, who will review the details of our financial results.

Lilach? Lilach Payorski-Stratasys Ltd.Thank you, Elan.Good morning, everyone.Total revenue for the third quarter was $0.billion, compared to $155.

The same period last year was 9 million, up 4% year on year.After adjusting the entity to sell our divestiture this quarter, in a similarfor-As with basis, total revenue grew by 6%.GAAP operating income for the third quarter was $3.million, while operating losses of $6.The same period last year was 9 million.

Non-GAAP operating income for the third quarter was $8.Compared to $8 in operating income, it was 2 million.The same period last year was 1 million.Product revenue for the third quarter was $109.million, increase 1.

compared with the same period last year, 3.does not include entities that have been stripped.In terms of product revenue, the system revenue for the quarter was flat from the same period last year, but increased by 3.after adjustment for the entity being stripped.Revenue from consumer goods increased by 2.

Growth of 6% over the same period last year, an increase of 4.does not include entities that have been stripped.Service revenue for the third quarter was $52.million, an increase of 10.Compared to the same period last year, due to the growth of customer support revenue and the strong performance of Stratasys Direct Manufacturing, the figure was 4%.

In service revenue, customer support revenue has increased by seven times, including revenue generated primarily by maintenance contracts on our system.Compared to the same period last year, 4% was mainly due to the increase in the number of systems we installed and the increase in the additional rate of service contracts.The gross profit margin of GAAP is 48.Compared with 48, the quarter was 7%.The same period last year was 3%.

Non-The gross profit margin of GAAP is 52.Compared with 52, the third quarter was 1%.Driven by our sources of income, it was 5% in the same period last year.Non-Gross profit margin of GAAP products increased to 60.compared 59.

Driven by the product structure, the same period last year was 6%.Non-The gross profit margin for GAAP services is 34.compared with 36.The same period last year was 3%, reflecting an increase in our investment in customer service and support operations.GAAP operating expenses fell 8% to $75.

Compared with the same period last year, the third quarter was 6 million, mainly due to net income from divestment.Non-GAAP operating expenses increased by 3.to $76.Compared with the same period last year, the third quarter was 3 million, reflecting our continued investment in long-term R & D.Including the advancement of our core LLC and bunching technology, as well as our new metal additive manufacturing platform, advanced composites, and software and application development.

Compared to $4, the company generated $5 million in cash from operations in the third quarter.Cash generated in the third quarter last year accounted for 6 million.We ended the third quarter with $348.Cash and cash equivalents were $9 million, compared to $346.The end of the second quarter of 2018 was 7 million.

Inventory increased slightly to $118.million, compared to $0.billion in 2018.Accounts receivable increased to $129.million, compared to $123.

As of the end of second quarter of 2018, 5 million days of sales were not completed or DSO was at 12-The monthly income is 71.To sum up, our income results are in line with expectations and reflect highTerminal system sales.We are satisfied with the continuous improvement made directly by Stratasys, which contributes to the growth of overall service revenue.Our ongoing revenue growth in consumer goods and customer support is encouraging and demonstrates the continued health of the system base we have installed.We are satisfied with our operating expense control, which resulted in a reduction in G & a as we increased our long-term investmentSupport our technology leadership and long-term initiatives to expand our target market.

We continue to maintain the trend of generating positive cash from our business activities and believe that we maintain a healthy balance sheet and are fully prepared to take advantage of the opportunities to move forward.I want to transfer the phone to Elan now.El Chalan jaglon-Stratasys Ltd.Thank you, Lily.As we pointed out in our last call, the board of directors of the company has set up an executive search committee composed of me and our compensation committee chairman Victor livintal to assist in the identification of new Chief Executive Officer.

Vic and I have been actively interviewing candidates, some of whom have gone deep into the process and we have met or talked with other members of the board.We believe that the people on our shortlist are strong leaders with relevant global operations experience, and we look forward to announcing the new CEO after completing the search.I would now like to ask David to provide more detailed information about the results of the quarter.David? David Reis -Stratasys Ltd.Thank you, sharp.

In the first quarter, we were satisfied with the continued commitment we observed from our customers, which was reflected in the highThe continued growth in terminal production systems and recurring revenue for consumables and services is notable, although we experienced a decline in system sales at the beginning of the year.We are satisfied with the increase in customer commitment.As customers go beyond the qualification and validation phase of the app and expand their capabilities in a real production environment, we continue to see.For example, in the first quarter of last year, we talked about how Siemens Mobile developed the use of Stratasys FDM 3D printing technology by producing customized final production parts for German transport service providers.In mid-On September, Siemens Mobile announced the opening of its first digital railway maintenance center in Germany-Siemens mobile RRX railway service center.

The new repair warehouse is expected to serve more than 100 trains per month and provide the highest level of digital services in the railway industry, with Stratasys's advanced FDM 3D printer at the heart of their service operations.Increased inventory-sorryIn addition, on August, at the IMTS manufacturing exhibition, we showed multiple customers at the booth and highlighted the unique applications they solved today with our technology, including FedEx, they are working to deploy additive manufacturing facilities to locations closer to their customers as part of FedEx forwarding warehouse services to improve the efficiency of the supply chain.SLS (sic)[SSL]An aerospace customer who uses our FDM technology to quicklyHigh response customizationTemperature laying-Tools that used to be done with CNC.RockTandospirone Citrate Tablets Martin uses our new Antero PEKK advanced thermoplastic materials to make highly repeatable parts that meet the strict mechanical function and size requirements of space travel.And the Penske NASCAR department showed multiple 3D printing terminals.

Compared to multiple days using traditional machine methods, parts that can be created in one day using their production managers.In addition to the manufacturing applications that our technology can solve, we are excited about the progress we have made in developing new and innovative solutions, we believe this will expand our addressable market in advanced manufacturing in the coming years.We are pleased with the progress made in the development of new metal additive manufacturing platforms for short-term production, and expect that next year, as we move into various stages, there will be greater engagement with our development partners to commercialize.We are encouraged by the improvements in the performance and strategy of direct manufacturing.The SDM is benefiting from the organizational changes we made at the beginning of the year to directly incorporate them into the North American sales organization, and taking advantage of the synergy between our parts and hardware business and the strong growth in manufacturing orders under the leadership of metal parts production, our top customers have added more complex large projects and projects, aerospace in particularEspecially in the third quarter, we are pleased to see a significant increase in order size for several large customers and are increasingly relying on SDM to meet production parts and development needs.

As we discussed in the past, the combination of the SDM business has significantly shifted to more profitable additive manufacturing parts compared to traditional manufacturing.I would now like to transfer the call to Yonah, our Vice President of Investor Relations, who will give a more detailed account of our 2018 financial guidance.Yonah? Yonah Lloyd -Stratasys Ltd.Thank you, David.We are updating our guidance for 2018 as shown below.

Total revenues ranged from $0.billion to $0.billion, compared to the previous guidelines of $0.billion to $0.billion.

GAAP's net loss was $10 million to $2 million or $0.to $0.Compared to the previous guidance of a net loss of $41 million to $25 million or $0, the diluted $04 per share.to $0.per share after dilution.

Non-GAAP net income is between $27 million and $30 million or $0.to $0.Compared to previous guidance of net income of $16 million to $27 million or $0, the diluted share per share was $55.to $0.per share after dilution.

Non-The operating profit margin of GAAP is expected to remain at 4.to 6%.Capital expenditure is projected at $25 million to $35 million, compared with an earlier estimate of $30 million to $40 million.Our guidance reflects an increase in investment in R & D, tools, materials and additional resources, designed to expand our addressable market by accelerating our development efforts for new metal additive manufacturing platforms based on our FDM and PolyJet technologies and specific go-to-Market initiatives to deepen customer engagement.Non-The GAAP earnings guide does not include an estimated amortization of $34 million for intangible assets, a share of $16 million to $17 million-Net income from divestiture and restructuring based on $23 million to $22 million --Related expenses are between $6 million and $7 million, including tax revenue from non-tax-related negative $1 million to $1 millionAdjustment of general accounting standards in the United States.

Estimated nonThe GAAP tax rate of 2018 is subject to continuous non-We expect cash valuation subsidies for deferred tax assets to be recorded in the United States throughout the yearS.losses.Given the continued negative impact of non-record tax incentives on expectations in the United StatesS.The tax loss of our net income, and our non-The Company believes that the GAAP tax rateGAAP operating income is the best measure of our performance.Generally recognized accounting principles between appropriate adjustments and non-GAAP Financial indicators are provided in the form at the end of our press release and slide presentation with details about non-GAAP Financial indicators.

Operator, you can open the problem phone now.Question-and-Your first question is from Troy Jensen at Piper.Your line is open.Troy D.Jensen -Piper Jaffray & Co.

Hey, gentlemen, congratulate the improvement here.El Chalan jaglon-Stratasys Ltd.Thanks, Troy.Lilach Payorski-Stratasys Ltd.Thanks.

Troy D.Jensen -Piper Jaffray & Co.Hey, so fast, maybe for David, I think, or for Lily --The terminal system performed strongly this quarter.Have you seen this force in all vertical fields, and I think I'm trying to figure out when we really want to see a significant change in the Aerospace vertical? David Reis -Stratasys Ltd.So – okay.

So, for the second quarter in a row, we see power, mainly what we call government power, mainly military and aerospace.But I think if you look back, say four or five quarters, we will see the strength of all the manufacturing areas, including automotive, aerospace and military.Troy D.Jensen -Piper Jaffray & Co.Would you like to see a more meaningful acceleration of the aerospace business? David Reis -Stratasys Ltd.

I think-we talked about it last quarter.It takes time for the customer to move from testing and verification to actual production.In some companies, with the help of some partners, we see the process begin gradually.I think as customer confidence grows, we will see an acceleration in the use of molds and terminals in particularParts are used in these areas, especially in aerospace.Troy D.

Jensen -Piper Jaffray & Co.Okay.That's fair.But I want you, David.sorry.

Can you tell us what you think about the HP color release and whether this will affect PolyJet now, or do you think it will affect PolyJet in the coming quarters? David Reis -Stratasys Ltd.I don't think this will affect PolyJet at all, and I'm very happy to hear that HP is following us into the color market.I think the color will be the standard for prototyping in the next few years.This is a change of mentality of the user group.So I'm glad that other companies have entered the field as well.

I think technology-It is wise that from a technical and quality perspective, we are currently in the best position to lead this change.So I'm not worried about this.I am glad that other competitors have entered the field as well.Troy D.Jensen -Piper Jaffray & Co.

Okay.I will give up speaking if I can get another question, but can you talk about the material? I think they're two.maybe a little more when you take some divestiture into account.But-I mean, do you think the growth rate is sustainable or lower than the growth rate of historical trends? David Reis -Stratasys Ltd.Troy, I think there are two parameters for consumer consumption.

One of them is a direct derivative of the number of printers we sold in this quarter and last quarter.The other has to do with utilization, which is directly related to the number of applications we were able to provide the installation Foundation over time and improve the workflow and the like.So I think even though our machine sales slowed down in the first quarter, we are happy to see a rise in consumption.Directly related to it.So when we go back to the growth of hardware sales or more substantial growth, you see the growth of consumables.

We are making progress, not comprehensive, but many departments that improve applications and workflows, which leads to an increase in consumption.To sum up, I think I estimate that in the future, as we continue to restore hardware sales and continue to provide better workflow and application knowledge to our customers, we should see the growth of consumables.Troy D.Jensen -Piper Jaffray & Co.Perfect.

All right.Good luck and move on.David Reis -Stratasys Ltd.Thank you.Your next question comes from Brian monotony of William Blair.

Your line is open.Brian P.Drab -William BlairLLCHi.Thank you for answering my question.I just wanted to ask about the operating expenses first.

You showed this well on slide 10.R & D seems to have substantially increased by several million, with SG & a down a bit.Can you give us any help at the end of the quarter of 2018 and 2019? Lilach Payorski-Stratasys Ltd.Good morning.So, from the rhythm of operating expenses, from the point of view of revenue, usually the fourth quarter is also our strongest quarter.

So I would also like to see an increase in operating costs.In terms of R & D costs, this is consistent with our increased communication on core technology and ofdm technology as well as on metal investment earlier this year, and the addition of additional applications.The expenditure on R & D expenses is actually based on the life cycle and schedule of the project.So R & D doesn't necessarily have a specific seasonality, more like the project lifecycle I mentioned.Therefore, due to the seasonality of revenue, we expect operating expenses to be higher in the fourth quarter, and the speed of R & D may continue to maintain a similar level.

Brian P.Drab -William BlairLLCOkay.Got it.Can you then give me more updates on some of the technologies you are developing, especially in Evolve and Falcon, just a summary of this progress? This may also remind you of your ownership structure there and how these technologies and their potential success will affect your future results.Lilach Payorski-Stratasys Ltd.

So we reported earlier this year that we had divested Evolve.As a result, these results are not currently part of operating income.We basically share our share in the results of evolution.We maintain a minority interest in these entities.The results are basically below.

Therefore, we do not expect to have a significant result or impact on our finances.Brian P.Drab -William BlairLLCOkay.Just curious if you can comment on the reason why if these are such interesting technologies, why are they built this way, if you can benefit more from these exciting technologies, that would be great.I'm just curious.

Thanks.El Chalan jaglon-Stratasys Ltd.Brian? Next question...

El Chalan jaglon-Stratasys Ltd.Oh, okay.Go ahead.Sorry, go ahead.Your next question comes from the Wamsi Mohan line at Bank of America.

Your line is open.Wamsi Mohan -Bank of America Ibuprofen Suspension Drops.Thank you.Good morning.Thanks for the update of CEO search.

Sounds like you're a little close.Should we look forward to your announcement this quarter? It's hard to really underwrite this long-The long-term strategic direction of the company until you announce a new CEO who will either articulate the strategy or reiterate the strategy.So is this something fairly recent? I have a following.up please.El Chalan jaglon-Stratasys Ltd.

Yes, yes.So we have been actively looking for the CEO.As we have announced, we have interviewed some people, some very good candidates.That's not something I can say briefly, because I have to have a contract for that and we don't have a contract.So we do it very actively.

We are looking for a great leader with a strong investor background with global operating experience and we have some very good candidates.So we will do that when we are ready to announce it.We said it might take about nine months.We are within this scope, trust me, we want to do this as soon as possible and we will let you know once we have made some announcements.Wamsi Mohan -Bank of America Ibuprofen Suspension Drops.

Thank you.As follow-upUp, if you think the proposed Chinese tariff has any impact on your business, or the potential impact you hear from your customers, can you talk about it? Also, I would like to know if you can tell us if FX flows have any impact on your performance for the quarter and what you expect for the fourth quarter? Thank you.El Chalan jaglon-Stratasys Ltd.Okay, so Lily can handle it.So, Lily.

Lilach Payorski-Stratasys Ltd.Yes, thank you.Good morning.Therefore, we will certainly pay close and careful attention to all the changes that are taking place in the United States.S.

Changes in tariffs will change.At the moment, especially our business, we do not see significant impact from a cost perspective.But there may be some, but it will not be so important.We are addressing alternatives or any other alternatives from a cost perspective.What's the? Wamsi Mohan -Bank of America Ibuprofen Suspension Drops.

Lilach Payorski-Stratasys Ltd.The FX.Foreign exchange problem, we don't have this quarter-Foreign Exchange has not had such a big impact on us.The euro did not fluctuate so much.The impact was small, with revenues of about $500,000.

Wamsi Mohan -Bank of America Ibuprofen Suspension Drops.Thank you.Your next question is from Ananda Baruah at Loop Capital.Your line is open.Ananda Baruah -Yes, thank you for answering this question and congratulate you on the solid results achieved.

Can you, for us to summarize or go through what you want us to think is the 2019 driving force of the business and what you will focus on, if you guys can give us some of these people how to layer over the course of the year, it will also help? Then I followed up quickly.up.David Reis -Stratasys Ltd.Okay, David, let me get it.Good morning.

We believe it is possible for us to return to a reasonable growth rate in the third quarter.We will focus on two areas.One of them is our infrastructure and sales business.I think on a global scale, we can do better to improve our lead in sales and marketing.On the back of it, as you can see in our R & D budget, we are spending a lot of money developing a great product in all areas where we are active, with our SDM series, the manufacturing side has the best rapid prototyping system based on PolyJet Technology and re-manufacturing.

So next year and 2020 will launch very interesting products and improve overall operations in terms of global sales and marketing, and we hope this will pay off, even increased top line growth compared to what you saw in q3.Ananda Baruah -This is very helpful for the circular capital market.I appreciate it.Quick follow-up-up.Can you please remind us from a metal point of view, even at a higher level at this point, how do you see your division, relative to what has already happened, now that HP has revealed more, I just want to hear what you think about Stratasys difference? Thanks.

David Reis -Stratasys Ltd.Again, I can't spend too much money on this, but we are developing a unique technology that we believe in.But this must be proven in the coming quarters and years, which is well suited for remanufacture of metal parts.It is different from other technologies.I think it will be more suitable for production and cheaper.

As we said in the script, we are working with several important partners around the world to develop and finalize the exact way the system works.But we are advancing this process relatively.We will announce and provide more information when we are ready.Yonah Lloyd -Stratasys Ltd.Ananda, I'm Yuna.

At the formnext exhibition in Frankfurt two weeks later, we will have some delegates from the metal team present and we will provide more details there.So if you or anyone else, of course, can get there on the phone, you will definitely get more information.Ananda Baruah -This is a great market for revolving capital.That's great.Thank you very much.

Your next question comes from the Shannon cross line of Cross Research.Your line is open.Shannon S.Cross -Thank you very much for accepting my question.I am curious about the service surcharge rate within the SDM, which I think includes warranty and maintenance.

Maybe you can talk about what you 've been doing to increase this.How big is this opportunity over time? Yonah Lloyd -Stratasys Ltd.Have you ever asked SDM or FDM, Shannon? Shannon S.Cross -This is cross-study, sorry.I asked people like you-service, it's not a limited company.

No.So basically, you can-I can see from your transcript and some of the records-your prepared comments, you start to increase your emphasis on the maintenance of your products and other services, which helps to drive the growth of some service revenue.Right? Lilach Payorski-Stratasys Ltd.Yeah.Yes, so-yes, we see-we see continued growth in service revenue, contract maintenance, and time and materials, due to increased attachment rates for customer purchase update maintenance, and an increase in installation base, maintenance.

So this is basically what we have experienced for several quarters in a row.Therefore, it verifies that our customers are using machines and requires our additional added value to be combined with maintenance that brings value to our customers.They choose to actually renew the contract and continue to work with Stratasys, who have a result service.Shannon S.Cross -I guess what I'm trying to figure out is within your installation base, is this an opportunity to enter and sell out of service to your installation base, that way there will be more incremental growth than you can see from the product-attach new product sales, or this is not the local base where we can expect you to be able to sign incremental services and contracts with the people currently installed.

David Reis -Stratasys Ltd.Sure.Lilach Payorski-Stratasys Ltd.Yes, of course.okay, David.

David Reis -Stratasys Ltd.Again, we need to remember clearly that a major part of our business is the supply of consumables to our customers.So the fact that we are all able to show our customers that a full service contract is good for them, which often leads to higher satisfaction, a derivative of the machine's off-duty hours, this means higher consumables.So it's all connected.Therefore, it is a huge effort to establish a full service contract, because we know from past experience that customers with full service will usually be happier; B, they have higher uptime, so they use more consumables.

So hard is a crossCorporate efforts generated in terms of revenue and it services, but also indirectly affect sales of consumer goods.Shannon S.Cross -Thanks, Cross Research.Then David, can you talk, I thought about 2018, at least one of the feelings I got from our conversation with your company is that for the industry, this is a year of pause and there are a lot of technologies under development.It is clear that metal is not something you have to want, but something that benefits directly.

David Reis -Stratasys Ltd.Yeah.Shannon S.Cross -So I think in terms of your conversations with clients and your position, you think we have reached the point where 2019 more benefits from all investments in 2018 and 2017, or do you think the industry is just a bit slow and stable so we shouldn't be looking for an inflection point? David Reis -Stratasys Ltd.Overall, I don't think the industry is slowing down.

I think some companies, including ourselves and some other major companies, find themselves in a different environment where competition is much more intense, at least on paper, by the way, it's not direct competition, it's more attention sharing, and in some cases pocket sharing is indirect competition.I think I hope that in the next year or two our customers will see this as well, so they will be able to make decisions faster, because one of the things we 've seen-and we talked about it on previous calls-is that the speed at which customers decide to buy devices slows down, because at least it looks like there are more and more products and the terms are confusing.So I think it may become clearer in the next year or two.I think the overall situation is likely to improve because at least at Stratasys we are developing and investing a lot of money to develop new and improved technologies.So I think this combination, you ask me again, it will happen to start on 2019, end on 2019, start on 2020, and end on 2020.

I think I hope and look forward to seeing improvements in the medium and short term.Shannon S.Cross -Thank you very much for your cross-study.Your next question is from Hendi Susanto at Gabelli.Your line is open.

Hendi Susanto -Gabelli & Company, Inc.Good morning Elan, David and Lilach thank you for answering my questions.El Chalan jaglon-Stratasys Ltd.Good morning, Hendy.David Reis -Stratasys Ltd.

Good morning.Hendi Susanto -Gabelli & Company, Inc.One question.Can you share some of the main reasons why you are canceling your annual income guidance? Lilach Payorski-Stratasys Ltd.Yes.

Now, after we have ended three quarters this year, and we have visibility for the rest of this year, we believe that we are adjusting the guidelines, narrowing it down to $0.billion to $0.billion will definitely give you some insight into what's going on in the fourth quarter.We believe this scope can be achieved.Remind you that the fourth quarter is traditionally our highest quarter from a seasonal perspective.

We are confident that we will be able to meet these narrow guidelines.One thing to note is that we may be close to $0.billion, but we still keep $0.billion within the $0.billion range.

Hendi Susanto -Gabelli & Company, Inc.Got it.Thank you.Very helpful.Operator your next question comes from David Ryzhik's collaboration with Susquehanna Financial Group.

Your line is open.David Ryzhik -Susquehanna Financial Group LLLPHi thank you very much for answering this question.I want to dig deep into the advantages of SDM parts.I think it's up 12% a year.over-year.

Maybe in your discussion with the customer, the added parts order is a feature that they test your system, which can lead to hardware sales, or do you think they are separate parts businessDid they let you see that power in the next few quarters, do you think it is sustainable? I have a following.up.David Reis -Stratasys Ltd.Maybe I will answer the first part first.We said in the script that a few quarters ago, we basically linked the SDM to our North American business, and one of the reasons we did this was to try to create synergies between the two sales infrastructure.

Obviously, we also said on the conference call that there has been an increase in production SDM on the digital side compared to tradition.Of course, some digital products use Stratasys equipment and products.I believe that when a customer wants to buy the number of these devices or for different reasons, it will also affect their purchase decisions --house.As for future projections, I think we should expect to benefit from the synergies between the two organizations.Hopefully the results will continue to grow.

David Ryzhik -LLLPGreat, a group of Susquehanna.Thank you, David.And hope to get the latest information of F123 and MakerBot, especially F123.On the F123 side, I would love any color there and on MakerBot it sounds like you guys have some new product introductions on the way.David, I would be happy to learn what you think about the desktop opportunity market, how do you see it, and what we expect from MakerBot over the next year? David Reis -Stratasys Ltd.

So, first of all, MakerBot's performance on different elements is consistent, even better than we expected.Obviously, I can't disclose information about the new product, but we have also done a lot of R & D work with MakerBot.As far as the whole market is concerned, I think in the coming quarters this market will also go through some rationalisation, and I expect MakerBot, which, by the way, is a major player there today, continue to be a major player in this market.Yonah Lloyd -Stratasys Ltd.David regarding your question on F123, we also have some exciting innovations and plans that are planned for next year.

So you have to keep an eye on that.David Reis -Stratasys Ltd.Yeah.David Ryzhik -LLLPOkay, financial group.Great.

Thanks again.David Reis -Stratasys Ltd.Thank you.Your next question comes from the Ben Rose series of battle road research.Your line is open.

Ben Z.Rose -War road Research Co.Ltd.Good morning, yes.Congratulate on the results achieved in the difficult market.

David, your question.Refer to what you said before as a market presence-the market is more competitive, but there are opportunities for growth.Last quarter, you talked about how HP and Stratasys can fight HP more directly.I would like to know if Jet Fusion has been on the market for some time after HP tried to freeze the market before delivery, and do you now see that customers are more clear about your value proposition with respect to HP? David Reis -Stratasys Ltd.Yes – yes.

I think, I said it again just now.I think in the past few years, we have seen a lot of new competition coming into the market, initially and even today, there is some confusion about the different benefits of different products for a variety of industries and applications.I think what is good for customers to learn gradually.Again, I think we are lucky that our market is growing and I hope that this market will become a very large market in the next few years.I don't-I 've said it many more times, the problem is not direct competition, the problem is-for example, ofdm is a great technology for manufacturing.

There are a lot of areas in the manufacturing industry that may be the best technology, okay, there's almost no competition, okay.Nevertheless, customers are still hesitating when other participants enter the market.They have to learn, they have to test.I think we are in a process where each technology becomes clear to the audience and people will know where to place which technologies.Because I think the whole market will grow and continue to grow, I think direct competition will become less important.

Ben Z.Rose -War road Research Co.Ltd.Okay.Thank you very much.

El Chalan jaglon-Stratasys Ltd.Okay.Thank you for attending today's conference call.We look forward to the people attending the annual formnext exhibition in Frankfurt later this month.We are very happy to talk to you early next year.

Thank you.This is the end of today's conference call, ladies and gentlemen.Thank you for your participation and wish you a wonderful day.You can all disconnect.

[heavymachinery93]

stratasys (ssys) q3 2018 results - earnings call transcript

Stratasys Ltd.Stratasys Ltd.NASDAQ:SSYS)At 8: 30 a.m.on November 1, 2018, etexecuesyonah Lloyd-2018 revenue call for the third quarterStratasys Ltd.El Chalan jaglon-Stratasys Ltd.Lilach Payorski-Stratasys Ltd.

David Reis -Stratasys Ltd.AnalystsTroy D.Jensen -Piper Jaffray & Co.Brian P.Drab -William BlairMohan-Ibuprofen Suspension Drops Bank of AmericaCircular capital marketCross -Cross-study LLCHendi Susanto-Gabelli & Company, Inc.

David Ryzhik -LLLPBen Z, financial group.Rose -War road Research Co.Ltd.Good morning, ladies and gentlemen, welcome to the third quarter 2018 Stratasys earnings call.As a reminder, this conference call is being recorded.

I would like to transfer the phone to your host Yonah Lloyd now.Yonah Lloyd -Stratasys Ltd.Thank you.Good Morning, everyone.Thank you for discussing with us our financial performance for the third quarter.

Today we are talking to the interim CEO, Elan Jaglom; David Reis, vice chairman and head of our board of directors Oversight Committee, joined by telephone; And our chief financial officer, Lilach Payorski.I will remind you that on the web address provided in our press release, today's call can be accessed online, including a prepared slide presentation.In addition, a replay of today's call will be provided, including access to the slide presentation, and accessible through the Investor Relations section of our website.Please note that some of the information you will hear in our discussion today will include forwarding-Outlook statements, including but not limited to statements regarding our expectations for future earnings, gross margin, operating expenses, taxes and other future financial performance, and our expectations for the business outlook.All statements relating to future performance, events, expectations, or results are forward --Look at the report.

Actual results or trends may differ greatly from our predictions.Risks that may lead to significant differences between the actual results and the results specified in the forward,Looking at the report, please refer to the risk factors that stratasy discussed in the Annual Report on Form 20-F.February 28, 2018 report to SEC on 2017 and our report on Form 6K, and the relevant press release we have provided to the SEC today regarding our revenue for 2018.Stratasys is under no obligation to update any forwarding-Statements or information as of their respective dates.As in previous quarters, today's call will include GAAP and non-GAAP Financial indicators.

The non-The GAAP financial indicators should be combined with our GAAP indicators to evaluate our performance.Certain non-GAAP-to-GAAP reconciliation is provided in our slide presentation and in the form contained in today's press release.Now I want to transfer the call to our interim CEO, Elan Jaglom.Elan? El Chalan jaglon-Stratasys Ltd.Thank you Yonah.

Good Morning, everyone.Thank you for attending today's conference call.We are happy with our third quarter results, which show high-End-system orders that began in the previous quarter, as well as improvements made directly by Stratasys, and steady growth in recurring consumer goods and consumer support revenue.I will be back on the phone later to provide an update on our search for a new CEO, and David will provide more details on the quarter's highlights and other key developments.But first, I will transfer the call to our CFO, Lilach Payorski, who will review the details of our financial results.

Lilach? Lilach Payorski-Stratasys Ltd.Thank you, Elan.Good morning, everyone.Total revenue for the third quarter was $0.billion, compared to $155.

The same period last year was 9 million, up 4% year on year.After adjusting the entity to sell our divestiture this quarter, in a similarfor-As with basis, total revenue grew by 6%.GAAP operating income for the third quarter was $3.million, while operating losses of $6.The same period last year was 9 million.

Non-GAAP operating income for the third quarter was $8.Compared to $8 in operating income, it was 2 million.The same period last year was 1 million.Product revenue for the third quarter was $109.million, increase 1.

compared with the same period last year, 3.does not include entities that have been stripped.In terms of product revenue, the system revenue for the quarter was flat from the same period last year, but increased by 3.after adjustment for the entity being stripped.Revenue from consumer goods increased by 2.

Growth of 6% over the same period last year, an increase of 4.does not include entities that have been stripped.Service revenue for the third quarter was $52.million, an increase of 10.Compared to the same period last year, due to the growth of customer support revenue and the strong performance of Stratasys Direct Manufacturing, the figure was 4%.

In service revenue, customer support revenue has increased by seven times, including revenue generated primarily by maintenance contracts on our system.Compared to the same period last year, 4% was mainly due to the increase in the number of systems we installed and the increase in the additional rate of service contracts.The gross profit margin of GAAP is 48.Compared with 48, the quarter was 7%.The same period last year was 3%.

Non-The gross profit margin of GAAP is 52.Compared with 52, the third quarter was 1%.Driven by our sources of income, it was 5% in the same period last year.Non-Gross profit margin of GAAP products increased to 60.compared 59.

Driven by the product structure, the same period last year was 6%.Non-The gross profit margin for GAAP services is 34.compared with 36.The same period last year was 3%, reflecting an increase in our investment in customer service and support operations.GAAP operating expenses fell 8% to $75.

Compared with the same period last year, the third quarter was 6 million, mainly due to net income from divestment.Non-GAAP operating expenses increased by 3.to $76.Compared with the same period last year, the third quarter was 3 million, reflecting our continued investment in long-term R & D.Including the advancement of our core LLC and bunching technology, as well as our new metal additive manufacturing platform, advanced composites, and software and application development.

Compared to $4, the company generated $5 million in cash from operations in the third quarter.Cash generated in the third quarter last year accounted for 6 million.We ended the third quarter with $348.Cash and cash equivalents were $9 million, compared to $346.The end of the second quarter of 2018 was 7 million.

Inventory increased slightly to $118.million, compared to $0.billion in 2018.Accounts receivable increased to $129.million, compared to $123.

As of the end of second quarter of 2018, 5 million days of sales were not completed or DSO was at 12-The monthly income is 71.To sum up, our income results are in line with expectations and reflect highTerminal system sales.We are satisfied with the continuous improvement made directly by Stratasys, which contributes to the growth of overall service revenue.Our ongoing revenue growth in consumer goods and customer support is encouraging and demonstrates the continued health of the system base we have installed.We are satisfied with our operating expense control, which resulted in a reduction in G & a as we increased our long-term investmentSupport our technology leadership and long-term initiatives to expand our target market.

We continue to maintain the trend of generating positive cash from our business activities and believe that we maintain a healthy balance sheet and are fully prepared to take advantage of the opportunities to move forward.I want to transfer the phone to Elan now.El Chalan jaglon-Stratasys Ltd.Thank you, Lily.As we pointed out in our last call, the board of directors of the company has set up an executive search committee composed of me and our compensation committee chairman Victor livintal to assist in the identification of new Chief Executive Officer.

Vic and I have been actively interviewing candidates, some of whom have gone deep into the process and we have met or talked with other members of the board.We believe that the people on our shortlist are strong leaders with relevant global operations experience, and we look forward to announcing the new CEO after completing the search.I would now like to ask David to provide more detailed information about the results of the quarter.David? David Reis -Stratasys Ltd.Thank you, sharp.

In the first quarter, we were satisfied with the continued commitment we observed from our customers, which was reflected in the highThe continued growth in terminal production systems and recurring revenue for consumables and services is notable, although we experienced a decline in system sales at the beginning of the year.We are satisfied with the increase in customer commitment.As customers go beyond the qualification and validation phase of the app and expand their capabilities in a real production environment, we continue to see.For example, in the first quarter of last year, we talked about how Siemens Mobile developed the use of Stratasys FDM 3D printing technology by producing customized final production parts for German transport service providers.In mid-On September, Siemens Mobile announced the opening of its first digital railway maintenance center in Germany-Siemens mobile RRX railway service center.

The new repair warehouse is expected to serve more than 100 trains per month and provide the highest level of digital services in the railway industry, with Stratasys's advanced FDM 3D printer at the heart of their service operations.Increased inventory-sorryIn addition, on August, at the IMTS manufacturing exhibition, we showed multiple customers at the booth and highlighted the unique applications they solved today with our technology, including FedEx, they are working to deploy additive manufacturing facilities to locations closer to their customers as part of FedEx forwarding warehouse services to improve the efficiency of the supply chain.SLS (sic)[SSL]An aerospace customer who uses our FDM technology to quicklyHigh response customizationTemperature laying-Tools that used to be done with CNC.RockTandospirone Citrate Tablets Martin uses our new Antero PEKK advanced thermoplastic materials to make highly repeatable parts that meet the strict mechanical function and size requirements of space travel.And the Penske NASCAR department showed multiple 3D printing terminals.

Compared to multiple days using traditional machine methods, parts that can be created in one day using their production managers.In addition to the manufacturing applications that our technology can solve, we are excited about the progress we have made in developing new and innovative solutions, we believe this will expand our addressable market in advanced manufacturing in the coming years.We are pleased with the progress made in the development of new metal additive manufacturing platforms for short-term production, and expect that next year, as we move into various stages, there will be greater engagement with our development partners to commercialize.We are encouraged by the improvements in the performance and strategy of direct manufacturing.The SDM is benefiting from the organizational changes we made at the beginning of the year to directly incorporate them into the North American sales organization, and taking advantage of the synergy between our parts and hardware business and the strong growth in manufacturing orders under the leadership of metal parts production, our top customers have added more complex large projects and projects, aerospace in particularEspecially in the third quarter, we are pleased to see a significant increase in order size for several large customers and are increasingly relying on SDM to meet production parts and development needs.

As we discussed in the past, the combination of the SDM business has significantly shifted to more profitable additive manufacturing parts compared to traditional manufacturing.I would now like to transfer the call to Yonah, our Vice President of Investor Relations, who will give a more detailed account of our 2018 financial guidance.Yonah? Yonah Lloyd -Stratasys Ltd.Thank you, David.We are updating our guidance for 2018 as shown below.

Total revenues ranged from $0.billion to $0.billion, compared to the previous guidelines of $0.billion to $0.billion.

GAAP's net loss was $10 million to $2 million or $0.to $0.Compared to the previous guidance of a net loss of $41 million to $25 million or $0, the diluted $04 per share.to $0.per share after dilution.

Non-GAAP net income is between $27 million and $30 million or $0.to $0.Compared to previous guidance of net income of $16 million to $27 million or $0, the diluted share per share was $55.to $0.per share after dilution.

Non-The operating profit margin of GAAP is expected to remain at 4.to 6%.Capital expenditure is projected at $25 million to $35 million, compared with an earlier estimate of $30 million to $40 million.Our guidance reflects an increase in investment in R & D, tools, materials and additional resources, designed to expand our addressable market by accelerating our development efforts for new metal additive manufacturing platforms based on our FDM and PolyJet technologies and specific go-to-Market initiatives to deepen customer engagement.Non-The GAAP earnings guide does not include an estimated amortization of $34 million for intangible assets, a share of $16 million to $17 million-Net income from divestiture and restructuring based on $23 million to $22 million --Related expenses are between $6 million and $7 million, including tax revenue from non-tax-related negative $1 million to $1 millionAdjustment of general accounting standards in the United States.

Estimated nonThe GAAP tax rate of 2018 is subject to continuous non-We expect cash valuation subsidies for deferred tax assets to be recorded in the United States throughout the yearS.losses.Given the continued negative impact of non-record tax incentives on expectations in the United StatesS.The tax loss of our net income, and our non-The Company believes that the GAAP tax rateGAAP operating income is the best measure of our performance.Generally recognized accounting principles between appropriate adjustments and non-GAAP Financial indicators are provided in the form at the end of our press release and slide presentation with details about non-GAAP Financial indicators.

Operator, you can open the problem phone now.Question-and-Your first question is from Troy Jensen at Piper.Your line is open.Troy D.Jensen -Piper Jaffray & Co.

Hey, gentlemen, congratulate the improvement here.El Chalan jaglon-Stratasys Ltd.Thanks, Troy.Lilach Payorski-Stratasys Ltd.Thanks.

Troy D.Jensen -Piper Jaffray & Co.Hey, so fast, maybe for David, I think, or for Lily --The terminal system performed strongly this quarter.Have you seen this force in all vertical fields, and I think I'm trying to figure out when we really want to see a significant change in the Aerospace vertical? David Reis -Stratasys Ltd.So – okay.

So, for the second quarter in a row, we see power, mainly what we call government power, mainly military and aerospace.But I think if you look back, say four or five quarters, we will see the strength of all the manufacturing areas, including automotive, aerospace and military.Troy D.Jensen -Piper Jaffray & Co.Would you like to see a more meaningful acceleration of the aerospace business? David Reis -Stratasys Ltd.

I think-we talked about it last quarter.It takes time for the customer to move from testing and verification to actual production.In some companies, with the help of some partners, we see the process begin gradually.I think as customer confidence grows, we will see an acceleration in the use of molds and terminals in particularParts are used in these areas, especially in aerospace.Troy D.

Jensen -Piper Jaffray & Co.Okay.That's fair.But I want you, David.sorry.

Can you tell us what you think about the HP color release and whether this will affect PolyJet now, or do you think it will affect PolyJet in the coming quarters? David Reis -Stratasys Ltd.I don't think this will affect PolyJet at all, and I'm very happy to hear that HP is following us into the color market.I think the color will be the standard for prototyping in the next few years.This is a change of mentality of the user group.So I'm glad that other companies have entered the field as well.

I think technology-It is wise that from a technical and quality perspective, we are currently in the best position to lead this change.So I'm not worried about this.I am glad that other competitors have entered the field as well.Troy D.Jensen -Piper Jaffray & Co.

Okay.I will give up speaking if I can get another question, but can you talk about the material? I think they're two.maybe a little more when you take some divestiture into account.But-I mean, do you think the growth rate is sustainable or lower than the growth rate of historical trends? David Reis -Stratasys Ltd.Troy, I think there are two parameters for consumer consumption.

One of them is a direct derivative of the number of printers we sold in this quarter and last quarter.The other has to do with utilization, which is directly related to the number of applications we were able to provide the installation Foundation over time and improve the workflow and the like.So I think even though our machine sales slowed down in the first quarter, we are happy to see a rise in consumption.Directly related to it.So when we go back to the growth of hardware sales or more substantial growth, you see the growth of consumables.

We are making progress, not comprehensive, but many departments that improve applications and workflows, which leads to an increase in consumption.To sum up, I think I estimate that in the future, as we continue to restore hardware sales and continue to provide better workflow and application knowledge to our customers, we should see the growth of consumables.Troy D.Jensen -Piper Jaffray & Co.Perfect.

All right.Good luck and move on.David Reis -Stratasys Ltd.Thank you.Your next question comes from Brian monotony of William Blair.

Your line is open.Brian P.Drab -William BlairLLCHi.Thank you for answering my question.I just wanted to ask about the operating expenses first.

You showed this well on slide 10.R & D seems to have substantially increased by several million, with SG & a down a bit.Can you give us any help at the end of the quarter of 2018 and 2019? Lilach Payorski-Stratasys Ltd.Good morning.So, from the rhythm of operating expenses, from the point of view of revenue, usually the fourth quarter is also our strongest quarter.

So I would also like to see an increase in operating costs.In terms of R & D costs, this is consistent with our increased communication on core technology and ofdm technology as well as on metal investment earlier this year, and the addition of additional applications.The expenditure on R & D expenses is actually based on the life cycle and schedule of the project.So R & D doesn't necessarily have a specific seasonality, more like the project lifecycle I mentioned.Therefore, due to the seasonality of revenue, we expect operating expenses to be higher in the fourth quarter, and the speed of R & D may continue to maintain a similar level.

Brian P.Drab -William BlairLLCOkay.Got it.Can you then give me more updates on some of the technologies you are developing, especially in Evolve and Falcon, just a summary of this progress? This may also remind you of your ownership structure there and how these technologies and their potential success will affect your future results.Lilach Payorski-Stratasys Ltd.

So we reported earlier this year that we had divested Evolve.As a result, these results are not currently part of operating income.We basically share our share in the results of evolution.We maintain a minority interest in these entities.The results are basically below.

Therefore, we do not expect to have a significant result or impact on our finances.Brian P.Drab -William BlairLLCOkay.Just curious if you can comment on the reason why if these are such interesting technologies, why are they built this way, if you can benefit more from these exciting technologies, that would be great.I'm just curious.

Thanks.El Chalan jaglon-Stratasys Ltd.Brian? Next question...

El Chalan jaglon-Stratasys Ltd.Oh, okay.Go ahead.Sorry, go ahead.Your next question comes from the Wamsi Mohan line at Bank of America.

Your line is open.Wamsi Mohan -Bank of America Ibuprofen Suspension Drops.Thank you.Good morning.Thanks for the update of CEO search.

Sounds like you're a little close.Should we look forward to your announcement this quarter? It's hard to really underwrite this long-The long-term strategic direction of the company until you announce a new CEO who will either articulate the strategy or reiterate the strategy.So is this something fairly recent? I have a following.up please.El Chalan jaglon-Stratasys Ltd.

Yes, yes.So we have been actively looking for the CEO.As we have announced, we have interviewed some people, some very good candidates.That's not something I can say briefly, because I have to have a contract for that and we don't have a contract.So we do it very actively.

We are looking for a great leader with a strong investor background with global operating experience and we have some very good candidates.So we will do that when we are ready to announce it.We said it might take about nine months.We are within this scope, trust me, we want to do this as soon as possible and we will let you know once we have made some announcements.Wamsi Mohan -Bank of America Ibuprofen Suspension Drops.

Thank you.As follow-upUp, if you think the proposed Chinese tariff has any impact on your business, or the potential impact you hear from your customers, can you talk about it? Also, I would like to know if you can tell us if FX flows have any impact on your performance for the quarter and what you expect for the fourth quarter? Thank you.El Chalan jaglon-Stratasys Ltd.Okay, so Lily can handle it.So, Lily.

Lilach Payorski-Stratasys Ltd.Yes, thank you.Good morning.Therefore, we will certainly pay close and careful attention to all the changes that are taking place in the United States.S.

Changes in tariffs will change.At the moment, especially our business, we do not see significant impact from a cost perspective.But there may be some, but it will not be so important.We are addressing alternatives or any other alternatives from a cost perspective.What's the? Wamsi Mohan -Bank of America Ibuprofen Suspension Drops.

Lilach Payorski-Stratasys Ltd.The FX.Foreign exchange problem, we don't have this quarter-Foreign Exchange has not had such a big impact on us.The euro did not fluctuate so much.The impact was small, with revenues of about $500,000.

Wamsi Mohan -Bank of America Ibuprofen Suspension Drops.Thank you.Your next question is from Ananda Baruah at Loop Capital.Your line is open.Ananda Baruah -Yes, thank you for answering this question and congratulate you on the solid results achieved.

Can you, for us to summarize or go through what you want us to think is the 2019 driving force of the business and what you will focus on, if you guys can give us some of these people how to layer over the course of the year, it will also help? Then I followed up quickly.up.David Reis -Stratasys Ltd.Okay, David, let me get it.Good morning.

We believe it is possible for us to return to a reasonable growth rate in the third quarter.We will focus on two areas.One of them is our infrastructure and sales business.I think on a global scale, we can do better to improve our lead in sales and marketing.On the back of it, as you can see in our R & D budget, we are spending a lot of money developing a great product in all areas where we are active, with our SDM series, the manufacturing side has the best rapid prototyping system based on PolyJet Technology and re-manufacturing.

So next year and 2020 will launch very interesting products and improve overall operations in terms of global sales and marketing, and we hope this will pay off, even increased top line growth compared to what you saw in q3.Ananda Baruah -This is very helpful for the circular capital market.I appreciate it.Quick follow-up-up.Can you please remind us from a metal point of view, even at a higher level at this point, how do you see your division, relative to what has already happened, now that HP has revealed more, I just want to hear what you think about Stratasys difference? Thanks.

David Reis -Stratasys Ltd.Again, I can't spend too much money on this, but we are developing a unique technology that we believe in.But this must be proven in the coming quarters and years, which is well suited for remanufacture of metal parts.It is different from other technologies.I think it will be more suitable for production and cheaper.

As we said in the script, we are working with several important partners around the world to develop and finalize the exact way the system works.But we are advancing this process relatively.We will announce and provide more information when we are ready.Yonah Lloyd -Stratasys Ltd.Ananda, I'm Yuna.

At the formnext exhibition in Frankfurt two weeks later, we will have some delegates from the metal team present and we will provide more details there.So if you or anyone else, of course, can get there on the phone, you will definitely get more information.Ananda Baruah -This is a great market for revolving capital.That's great.Thank you very much.

Your next question comes from the Shannon cross line of Cross Research.Your line is open.Shannon S.Cross -Thank you very much for accepting my question.I am curious about the service surcharge rate within the SDM, which I think includes warranty and maintenance.

Maybe you can talk about what you 've been doing to increase this.How big is this opportunity over time? Yonah Lloyd -Stratasys Ltd.Have you ever asked SDM or FDM, Shannon? Shannon S.Cross -This is cross-study, sorry.I asked people like you-service, it's not a limited company.

No.So basically, you can-I can see from your transcript and some of the records-your prepared comments, you start to increase your emphasis on the maintenance of your products and other services, which helps to drive the growth of some service revenue.Right? Lilach Payorski-Stratasys Ltd.Yeah.Yes, so-yes, we see-we see continued growth in service revenue, contract maintenance, and time and materials, due to increased attachment rates for customer purchase update maintenance, and an increase in installation base, maintenance.

So this is basically what we have experienced for several quarters in a row.Therefore, it verifies that our customers are using machines and requires our additional added value to be combined with maintenance that brings value to our customers.They choose to actually renew the contract and continue to work with Stratasys, who have a result service.Shannon S.Cross -I guess what I'm trying to figure out is within your installation base, is this an opportunity to enter and sell out of service to your installation base, that way there will be more incremental growth than you can see from the product-attach new product sales, or this is not the local base where we can expect you to be able to sign incremental services and contracts with the people currently installed.

David Reis -Stratasys Ltd.Sure.Lilach Payorski-Stratasys Ltd.Yes, of course.okay, David.

David Reis -Stratasys Ltd.Again, we need to remember clearly that a major part of our business is the supply of consumables to our customers.So the fact that we are all able to show our customers that a full service contract is good for them, which often leads to higher satisfaction, a derivative of the machine's off-duty hours, this means higher consumables.So it's all connected.Therefore, it is a huge effort to establish a full service contract, because we know from past experience that customers with full service will usually be happier; B, they have higher uptime, so they use more consumables.

So hard is a crossCorporate efforts generated in terms of revenue and it services, but also indirectly affect sales of consumer goods.Shannon S.Cross -Thanks, Cross Research.Then David, can you talk, I thought about 2018, at least one of the feelings I got from our conversation with your company is that for the industry, this is a year of pause and there are a lot of technologies under development.It is clear that metal is not something you have to want, but something that benefits directly.

David Reis -Stratasys Ltd.Yeah.Shannon S.Cross -So I think in terms of your conversations with clients and your position, you think we have reached the point where 2019 more benefits from all investments in 2018 and 2017, or do you think the industry is just a bit slow and stable so we shouldn't be looking for an inflection point? David Reis -Stratasys Ltd.Overall, I don't think the industry is slowing down.

I think some companies, including ourselves and some other major companies, find themselves in a different environment where competition is much more intense, at least on paper, by the way, it's not direct competition, it's more attention sharing, and in some cases pocket sharing is indirect competition.I think I hope that in the next year or two our customers will see this as well, so they will be able to make decisions faster, because one of the things we 've seen-and we talked about it on previous calls-is that the speed at which customers decide to buy devices slows down, because at least it looks like there are more and more products and the terms are confusing.So I think it may become clearer in the next year or two.I think the overall situation is likely to improve because at least at Stratasys we are developing and investing a lot of money to develop new and improved technologies.So I think this combination, you ask me again, it will happen to start on 2019, end on 2019, start on 2020, and end on 2020.

I think I hope and look forward to seeing improvements in the medium and short term.Shannon S.Cross -Thank you very much for your cross-study.Your next question is from Hendi Susanto at Gabelli.Your line is open.

Hendi Susanto -Gabelli & Company, Inc.Good morning Elan, David and Lilach thank you for answering my questions.El Chalan jaglon-Stratasys Ltd.Good morning, Hendy.David Reis -Stratasys Ltd.

Good morning.Hendi Susanto -Gabelli & Company, Inc.One question.Can you share some of the main reasons why you are canceling your annual income guidance? Lilach Payorski-Stratasys Ltd.Yes.

Now, after we have ended three quarters this year, and we have visibility for the rest of this year, we believe that we are adjusting the guidelines, narrowing it down to $0.billion to $0.billion will definitely give you some insight into what's going on in the fourth quarter.We believe this scope can be achieved.Remind you that the fourth quarter is traditionally our highest quarter from a seasonal perspective.

We are confident that we will be able to meet these narrow guidelines.One thing to note is that we may be close to $0.billion, but we still keep $0.billion within the $0.billion range.

Hendi Susanto -Gabelli & Company, Inc.Got it.Thank you.Very helpful.Operator your next question comes from David Ryzhik's collaboration with Susquehanna Financial Group.

Your line is open.David Ryzhik -Susquehanna Financial Group LLLPHi thank you very much for answering this question.I want to dig deep into the advantages of SDM parts.I think it's up 12% a year.over-year.

Maybe in your discussion with the customer, the added parts order is a feature that they test your system, which can lead to hardware sales, or do you think they are separate parts businessDid they let you see that power in the next few quarters, do you think it is sustainable? I have a following.up.David Reis -Stratasys Ltd.Maybe I will answer the first part first.We said in the script that a few quarters ago, we basically linked the SDM to our North American business, and one of the reasons we did this was to try to create synergies between the two sales infrastructure.

Obviously, we also said on the conference call that there has been an increase in production SDM on the digital side compared to tradition.Of course, some digital products use Stratasys equipment and products.I believe that when a customer wants to buy the number of these devices or for different reasons, it will also affect their purchase decisions --house.As for future projections, I think we should expect to benefit from the synergies between the two organizations.Hopefully the results will continue to grow.

David Ryzhik -LLLPGreat, a group of Susquehanna.Thank you, David.And hope to get the latest information of F123 and MakerBot, especially F123.On the F123 side, I would love any color there and on MakerBot it sounds like you guys have some new product introductions on the way.David, I would be happy to learn what you think about the desktop opportunity market, how do you see it, and what we expect from MakerBot over the next year? David Reis -Stratasys Ltd.

So, first of all, MakerBot's performance on different elements is consistent, even better than we expected.Obviously, I can't disclose information about the new product, but we have also done a lot of R & D work with MakerBot.As far as the whole market is concerned, I think in the coming quarters this market will also go through some rationalisation, and I expect MakerBot, which, by the way, is a major player there today, continue to be a major player in this market.Yonah Lloyd -Stratasys Ltd.David regarding your question on F123, we also have some exciting innovations and plans that are planned for next year.

So you have to keep an eye on that.David Reis -Stratasys Ltd.Yeah.David Ryzhik -LLLPOkay, financial group.Great.

Thanks again.David Reis -Stratasys Ltd.Thank you.Your next question comes from the Ben Rose series of battle road research.Your line is open.

Ben Z.Rose -War road Research Co.Ltd.Good morning, yes.Congratulate on the results achieved in the difficult market.

David, your question.Refer to what you said before as a market presence-the market is more competitive, but there are opportunities for growth.Last quarter, you talked about how HP and Stratasys can fight HP more directly.I would like to know if Jet Fusion has been on the market for some time after HP tried to freeze the market before delivery, and do you now see that customers are more clear about your value proposition with respect to HP? David Reis -Stratasys Ltd.Yes – yes.

I think, I said it again just now.I think in the past few years, we have seen a lot of new competition coming into the market, initially and even today, there is some confusion about the different benefits of different products for a variety of industries and applications.I think what is good for customers to learn gradually.Again, I think we are lucky that our market is growing and I hope that this market will become a very large market in the next few years.I don't-I 've said it many more times, the problem is not direct competition, the problem is-for example, ofdm is a great technology for manufacturing.

There are a lot of areas in the manufacturing industry that may be the best technology, okay, there's almost no competition, okay.Nevertheless, customers are still hesitating when other participants enter the market.They have to learn, they have to test.I think we are in a process where each technology becomes clear to the audience and people will know where to place which technologies.Because I think the whole market will grow and continue to grow, I think direct competition will become less important.

Ben Z.Rose -War road Research Co.Ltd.Okay.Thank you very much.

El Chalan jaglon-Stratasys Ltd.Okay.Thank you for attending today's conference call.We look forward to the people attending the annual formnext exhibition in Frankfurt later this month.We are very happy to talk to you early next year.

Thank you.This is the end of today's conference call, ladies and gentlemen.Thank you for your participation and wish you a wonderful day.You can all disconnect.