3D printing company Stratasys (NASDAQ: SSYS) reported Q4 CY2025 results exceeding the market’s revenue expectations, but sales fell by 6.9% year on year to $140 million. The company’s full-year revenue guidance of $570 million at the midpoint came in 0.8% above analysts’ estimates. Its non-GAAP profit of $0.07 per share was 21.7% above analysts’ consensus estimates.

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Dr. Yoav Zeif, Stratasys' Chief Executive Officer, stated, “Our fourth quarter performance caps a year in which we successfully maintained our operational discipline and delivered solid cash flow generation, demonstrating the resilience that distinguishes Stratasys. We generated 37.5% of our revenues from manufacturing applications, up from 25% in 2020, and made meaningful progress building on the foundational infrastructure of our highest-value use-cases, as we continued to improve our position in aerospace and defense, automotive tooling, dental, and medical applications.”

Company Overview

Born from the Founder’s idea of making a toy frog with a glue gun, Stratasys (NASDAQ: SSYS) offers 3D printers and related materials, software, and services to many industries.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Unfortunately, Stratasys’s 1.1% annualized revenue growth over the last five years was weak. This fell short of our benchmarks and is a tough starting point for our analysis.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Stratasys’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 6.3% annually.

We can dig further into the company’s revenue dynamics by analyzing its most important segments, Products and Services, which are 69.7% and 30.3% of revenue. Over the last two years, Stratasys’s Products revenue (hard goods like 3D printers) averaged 2.8% year-on-year declines while its Services revenue (service contracts, consulting) averaged 5.4% declines.

This quarter, Stratasys’s revenue fell by 6.9% year on year to $140 million but beat Wall Street’s estimates by 0.5%.

Looking ahead, sell-side analysts expect revenue to grow 2.8% over the next 12 months. While this projection indicates its newer products and services will catalyze better top-line performance, it is still below average for the sector.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Stratasys’s operating margin has been trending up over the last 12 months, but it still averaged negative 12.7% over the last five years. This is due to its large expense base and inefficient cost structure.

Analyzing the trend in its profitability, Stratasys’s operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

Stratasys’s operating margin was negative 14.8% this quarter. The company's consistent lack of profits raise a flag.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Stratasys’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

Stratasys’s EPS grew at a spectacular 15.5% compounded annual growth rate over the last two years, higher than its 6.3% annualized revenue declines. This tells us management adapted its cost structure in response to a challenging demand environment.

In Q4, Stratasys reported adjusted EPS of $0.07, down from $0.12 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Stratasys’s full-year EPS of $0.16 to grow 50%.

Key Takeaways from Stratasys’s Q4 Results

It was good to see Stratasys beat analysts’ EPS expectations this quarter. We were also glad its full-year revenue guidance slightly exceeded Wall Street’s estimates. On the other hand, its full-year EBITDA guidance missed and its EBITDA fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 3.9% to $9.42 immediately following the results.

Stratasys didn’t show it’s best hand this quarter, but does that create an opportunity to buy the stock right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).