SSYS 2025Q2

Good day, and welcome to today's conference call to discuss Stratasys' second quarter 2025 financial results. My name is Kevin, and I'm your operator for today's call. Now I'd like to hand the call over to Yonah Lloyd, Chief Communications Officer and Vice President of Investor Relations for Stratasys. Mr. Lloyd, please go ahead.

Good morning, everyone, and thank you for joining us to discuss our 2025 second quarter financial results. On the call with us today are our CEO, Dr. Yoav Zeif; and our CFO, Eitan Zamir. I would like to remind you that access to today's call, including the slide presentation, can be accessed through the Investor Relations section of our website. Please note that some of the information provided during our discussion today will consist of forward-looking statements, including, without limitation, those regarding our expectations as to our future revenue, gross margin, operating expenses, taxes and other future financial performance and our expectations for our business outlook. Statements made regarding future performance, events, expectations or results are forward-looking statements. Actual results or trends could differ materially from our forecast. For risks that could cause actual results to be materially different from those set forth in forward-looking statements, please refer to the risk factors discussed or referenced in Stratasys' annual report on Form 20-F for the 2024 year. Please also refer to that annual report, along with our reports filed with or furnished to the SEC throughout 2025 for additional operational and financial details. Reports on Form 6-K that are furnished to the SEC on a quarterly basis and throughout the year provide updated current information regarding the company's operating results and material developments concerning our company. Stratasys assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates. As in previous quarters, today's call will include GAAP and non-GAAP financial measures. The non-GAAP financial measures should be read in combination with our GAAP metrics to evaluate our performance. Non-GAAP to GAAP reconciliations are provided in tables in our slide presentation and today's press release. I will now turn the call over to our Chief Executive Officer, Dr. Yoav Zeif.

Thank you, Yonah. Good morning, everyone, and thank you for joining us. Our second quarter results aligned with expectations as revenue grew slightly over the second quarter last year, reflecting the resilience of our recurring revenue streams and the continued reliance customers place on our additive manufacturing technologies. Customer engagement for our solutions remains strong despite a global operating environment marked by ongoing uncertainty around challenged macroeconomic conditions and tariff policies. The result is customers maintaining disciplined capital spending approaches as they await signs of normalcy to emerge. Importantly, we are making meaningful progress in crafting and delivering key use cases with major customers that we believe will eventually begin flowing through to our financial results at some point in the future. Furthermore, our ongoing investment and commitment to R&D excellence bolstered by our strong balance sheet position us well to continue delivering innovative products, materials, and software capabilities that further solidify our leadership in digital manufacturing, particularly when customer spending eventually and inevitably returns. Innovation and execution remain the foundation of our long-term growth strategy, which centers on the drive towards supply chain localization and onshoring, the evolution of next-generation mobility platforms, advancing sustainability requirements, and a relentless focus on operational efficiency and cost optimization by companies around the globe. By maintaining our disciplined approach to end-use development, prioritizing the most compelling applications while working to preserve margin integrity, we have built a platform that will enable Stratasys to emerge stronger as market dynamics stabilize. While the tariff environment continues to evolve, it is worth re-emphasizing that additive manufacturing can be an ideal solution in a tariff-sensitive environment by enabling local, rapid, and cost-effective production capabilities. Tariff policies can actually accelerate the adoption of our technologies, and we anticipate increased customer engagement as we continue to highlight these strategic advantages. Turning to new technology offerings and customer success. During the quarter, we launched the North American Stratasys Tooling Center in collaboration with Automation Intelligence at their Flint, Michigan location. This facility is a dedicated hub to help manufacturers validate and scale additive manufacturing applications in production environments. The center operates Stratasys F3300 and F900 3D printers to demonstrate practical tooling solutions including jigs, fixtures, end-of-arm tooling and automotive components, enabling customers to explore how additive manufacturing can streamline operations, reduce costs, and accelerate response to manufacturing challenges. By combining additive manufacturing technologies with traditional capabilities, this new center addresses the growing demand for localized on-demand production solutions for production environments. Our strategic collaboration with General Motors exemplifies the transformative power additive manufacturing brings to automotive production. For over two decades, we have helped GM revolutionize its manufacturing processes through our industrial 3D printing solutions, culminating in GM's launch of its additive innovation and additive industrialization centers in Michigan, one of North America's largest and most advanced additive manufacturing facilities. This collaboration has extended with many F900 systems deployed across over 15 high-value GM plants throughout North America, achieving excellent utilization rates and demonstrating the mature production-ready nature of our technology. The results demonstrate substantial value delivery to enterprise customers. GM has achieved significant cost reduction on additive tooling compared to traditional methods while streamlining manufacturing workflow and accelerating tooling lead time from weeks to days or even hours. This provides critical competitive advantage, enabling a faster ramp of new vehicles in both internal combustion engine and electric vehicle programs. We are supporting GM's aggressive EV launch schedules with rapid production of specialized tools for battery and high-voltage component handling while improving operator safety through lightweight custom polymer tooling solutions. Importantly, our solution helped GM achieve localized supply chain resilience and security, reducing dependencies and transportation requirements while enabling faster response to urgent production needs. Also within automotive, we recently shared a video highlighting our strong multi-year partnership with Toyota, featuring testimonials from their production engineering group around the critical value our technology plays in their production plan. Through this collaboration, Toyota has achieved significant cost reduction by producing tools additively compared to traditional methods. We have helped compress lead times from weeks to days or even hours, allowing programs to reach production readiness far faster and supporting rapid replacement of damaged tools to minimize production line downtime. Our additive solutions enable Toyota to create highly precise custom fit tools that reduce manufacturing variation and support consistent assembly via lightweight ergonomic design by nearly 33%. Our additive manufacturing technology is integral to meeting these accelerated targets. Our systems provide parts Toyota cannot produce using conventional methods with comparable speed or accuracy, often creating polymer components stronger than metal alternatives. Toyota utilizes all five of our additive technologies plus our GrabCAD software to manage their printer fleet, exemplifying how we partner with customers to expand their understanding and adoption of 3D printing in an opportunity that could be far greater than today's market penetration. Also during the quarter, our aerospace customer, Blue Origin, purchased multiple Neo800 SL systems for the production of investment casting patterns. Blue Origin is a leading aerospace manufacturer and space technology trailblazer in reusable rocket technology and a major participant in NASA contracts, including the current Artemis program plan to bring astronauts to the moon in 2027. Stratasys is also participating in this program. This partnership represents more than just today's application. Blue Origin is validating the strength and durability of our polymer products for space flight applications, which could translate to approval for use in the tens of thousands of aerospace parts still made by hand today. The rigorous quality and data security standards that space flights demand position our technology for potentially significant future aerospace production applications. These sales align with our manufacturing strategy around aerospace production parts, demonstrating how our technology contributes to space travel today or potentially enables next-generation travel solutions that could extend far beyond space exploration tomorrow. In the medical sector, utilizing Stratasys 3D printing capabilities proved critical in preparing for complex life-saving procedures, showcasing how 3D printing technology is revolutionizing life-saving medical applications and unprecedented preoperative planning capabilities. As a reminder, last year, we launched the J5 DAP system, an affordable anatomical model solution targeting thousands of hospitals worldwide, and we are seeing positive traction and life-saving examples. One such recent case was how Brisbane's Herston Biofabrication Institute created a life-sized 3D printed model based on a patient scan that revealed he was walking around with a ticking time bomb inside his chest. The aorta, the biggest blood vessel in the body, had ballooned to about four times the usual size, leaving it in danger of rupturing, a medical emergency likely to have cost him his life. The printed model enabled the surgeons at Prince Charles Hospital to better understand the complex anatomy and to plan and practice on the life-like model prior to the operation. This allowed them to optimize execution of the surgery and minimize potential risks and complications, in the end, saving the patient's life. The anatomical model opportunity for Stratasys, such as training and presurgical planning, is $1.8 billion annually. On the material side, we commercially launched P3 Silicone 25A, a high-performance material developed through strategic collaboration with global silicon leader, Shin-Etsu, the largest chemical company in Japan. It is designed exclusively for the Stratasys Origin DLP platform to further reduce lead times and enable localized low-volume production for applications, including seals, gaskets, vibration dampers, and soft-touch components. The material has passed Shin-Etsu's biocompatibility and flame retardancy certification, representing the first in a planned portfolio of silicon materials that combine Stratasys' production-grade P3 DLP technology, which enhances silicon's chemistry expertise to deliver trusted performance backed by repeatable results and real-world data. On the software side, our progress reflects our commitment to delivering complete use case solutions with software integrated fixture-making software into Stratasys GrabCAD PrintPro, enabling users to design and generate production-ready fixtures quickly without CAD experience needed. This capability launched in GrabCAD Print throughout 2025, uses intelligence automation in designing custom fixtures, allowing manufacturers to create secure, precise work holding solutions in minutes. This combined solution eliminates the manual effort and complexity traditionally associated with fixture design, enabling accelerated adoption of 3D printing by removing the constraint of needing an expert CAD designer, shifting fixture design to additive operators and reducing fixture creation time from days to hours. This results in higher utilization of the printers and a higher rate of 3D printing adoption. The new Fortus 450mc we mentioned last quarter exemplifies our complete solution approach, providing an integrated tooling solution, combining software, printer, and materials in a factory-ready package. We are also receiving great feedback from customers regarding our software ecosystem, which continues to drive customer value. NASCAR's Tim Murphy recently said that what sets our partnership with Stratasys apart is the complete ecosystem, from our in-house machine to Streamline Pro software, to on-demand production. NASCAR now manages hundreds of parts through a single platform and has transformed 3D printing from a support function into a strategic business unit with full P&L tracking. Furthermore, to continue to scale this success across our customer base, we are launching a dedicated software customer success management team in the third quarter to enhance onboarding, drive engagement, and support renewals for both GrabCAD Print Pro and Streamline Pro users. These are all real-world examples of how we are pushing forward our leadership position despite longer than expected market headwinds. We are excited by the innovation across our portfolio, making meaningful inroads into a multitude of high-growth industries and customer opportunities. Our customer spending has remained challenged for longer than expected, impacting our near-term view of the business, but our long-term outlook for our company and industry remains intact. We have the financial strength to invest and innovate so that our leadership position expands over time. With that, I would like to turn the call to Eitan to review our financials. Eitan?

Thank you, Yoav, and good morning, everyone. The second quarter results show the strength of our operating model as we achieved positive adjusted operating income and adjusted net income, a significant improvement from losses a year ago. This occurred even with only a slight increase in revenue compared to the second quarter last year, along with lower gross margins. These results benefited from the full run rate contributions from the cost control initiatives we implemented last year. Now let me provide details on our numbers. For the second quarter, our consolidated revenue of $138.1 million was slightly higher than in the same quarter of 2024, as customers continue to postpone major capital spending due to market uncertainty. Product revenue in the second quarter came in at $94.8 million, compared to $93.6 million in the same period last year. Service revenue was $43.3 million, slightly down from $44.4 million in the same period last year. Within product revenue, system revenue was $30.6 million, up from $29 million in the prior year, while consumables revenue was $64.2 million compared to $64.6 million last year, showing a 2.6% sequential increase from the first quarter as system utilization rates remained strong. In service revenue, customer support revenue was $30.1 million compared to $30.5 million last year. Now moving on to gross margin. GAAP gross margin was 43.1% for the quarter, down from 43.8% a year ago, while Non-GAAP gross margin was 47.7%, compared to 49% the previous year. The decline from last year was mainly due to the mix in product revenues and higher absorption linked to lower inventory levels, which have dropped by over $30 million from June 2024 to June 2025, somewhat offset by operational efficiency. GAAP operating expenses stood at $76.1 million, or 55.1% of revenue, compared to $86.5 million, or 62.7% of revenue, during the same period last year. The reduction in expenses was driven by our cost-saving strategies, among other factors. Non-GAAP operating expenses improved to $64.7 million, or 46.9% of revenue, down from $70.9 million, or 51.3% of revenue, in the same period last year, primarily due to lower employee-related costs tied to our announced cost savings initiatives. Regarding our consolidated earnings, the GAAP operating loss for the quarter was $16.6 million, compared to a loss of $26 million for the same period last year. Non-GAAP operating income for the quarter was $1.1 million, in contrast to an operating loss of $3.2 million last year, reflecting the benefits of improved operating expenses due to our cost-cutting measures. The GAAP net loss for the quarter was $16.7 million, or $0.20 per diluted share, compared to a net loss of $25.7 million, or $0.36 per diluted share, in the same period last year. Non-GAAP net income was $2.2 million, or $0.03 per diluted share, compared to a net loss of $3 million, or $0.04 per diluted share, in the previous year. Adjusted EBITDA was $6.1 million for the quarter, up from $2.3 million the previous year. In terms of cash flow, we utilized $1.1 million for operating activities compared to $2.4 million in the second quarter of last year. We anticipate generating positive operating cash flow for the entirety of 2025. We concluded the quarter with $254.6 million in cash, positioning us well to seize value-enhancing opportunities. Looking ahead to our outlook for 2025, the anticipated return to normalized capital spending has been delayed more than we expected when we provided our guidance. While customer engagement is still strong, sales cycles have become longer. There are several significant opportunities in production applications that have been progressing for a while and are nearing completion. However, the closure of these deals, which we expected this year, may extend into 2026. Thus, we are revising our guidance accordingly. We believe the depth and quality of these expected awards, in conjunction with the momentum we're seeing across various end-use segments, will position us favorably for 2026 and beyond. As part of our strategy to maintain profitability, we will implement additional cost-saving measures, primarily affecting non-essential costs, with most impact expected in the fourth quarter of this year. It's crucial to emphasize that these changes will not hinder our investment in technology innovation and future growth. We do expect sequential revenue growth in the second half of 2025, with the third quarter anticipated to be slightly lower or slightly higher than Q2 and the fourth quarter expected to show a sequential increase. Our full-year 2025 revenue projection is estimated to be between $550 million to $560 million. Non-GAAP gross margins are expected to be between 46.7% and 47%, driven by various factors including changes in the product revenue mix, tariffs, and elevated absorption costs associated with lower inventory levels. Full-year non-GAAP operating margins are projected to range from 1.5% to 2%, with adjusted earnings per share expected to be between $0.13 and $0.16, and adjusted EBITDA anticipated to be between $30 million and $32 million. Keep in mind that, with the previously mentioned cost mitigation, adjusted EBITDA for the fourth quarter is forecasted to be 8% or higher. Remember that our previous target was 8% for the full year; if our revenue expectations for Q4 are met, we anticipate achieving at least 8% adjusted EBITDA, reflecting an overall enhancement in our operating model. We are also expecting to maintain positive operating cash flow for the year. Please check the press release for more details. As Yoav indicated, despite the ongoing near-term challenges, we remain enthusiastic about the future and our growing leadership position within the industry.

Thank you, Eitan. Stratasys' differentiated approach and business model continue to demonstrate remarkable adaptability due to our cost discipline, innovation leadership, and the increasingly mission-critical role our solutions play in customer operations. Our focus on high-value applications, combined with enhanced customer education and go-to-market execution continues building the foundation for accelerated adoption when investment confidence rebounds. With our recently bolstered balance sheet, we are extremely well positioned to continue leading the industry in systems, material, and software innovation, as well as the scaling of additive solutions towards more widespread manufacturing applications as macro conditions eventually normalize. The stability inherent in our recurring revenue streams, paired with our commitment to operational efficiency and margin discipline creates a platform designed to help us mitigate near-term volatility while positioning us to deliver compelling long-term returns. As industry leaders with a comprehensive technology portfolio spanning hardware, materials, and software solutions, we are uniquely positioned to capture the significant opportunities that will emerge when uncertainties subside and customers eventually resume normal capital deployment cycles and embrace the localized manufacturing advantages our platforms deliver. With that, let's open it up for questions.

Our first question today is coming from Brian Drab from William Blair.

This is Tyler speaking on behalf of Brian Drab. Starting with the revenue guidance related to the lower outlook, while you mentioned delays in customer decision-making and macroeconomic uncertainty, can you specify which verticals or regions are experiencing the most significant slowdown or delays? I have a follow-up question as well.

Well, there is no slowdown. There is only delay. I want to be very clear. And maybe we take a step back, and I'll try to explain the situation. We are going as a leader in this industry. We're going through a shift, a shift towards production applications. And by nature, those production applications come with larger deal sizes and longer sales cycles. So this is like a new situation that we are heading the entire industry into it. Then when we are looking at our pipeline, we need to look at it completely differently. So when we are deciding to adjust the outlook, it is related to the uncertainty around those large deals and the exact timing to close them. So we have less diversified, low-value deals, and we have large deals in production. Those deals may be delayed this year, but definitely not canceled. When I look at the overall pipeline, it is strong. And despite the delay in customer spending, we see many leads coming. But the real difference is those large deals that take us into manufacturing, like the deals that we just emphasized in the script about Toyota, about GM, those are transformative deals. We are becoming the backbone of some operations of the largest companies on earth. This is a breakthrough for additive manufacturing. So when we look forward, and we are obligated historically, we are always trying to be as transparent as possible with our investors. So once we saw that it might be delayed, we say, okay, let's put it on the table. But when I look at the verticals, we have large customers, best relationships in the industry with those large customers in key verticals, you take government, aerospace, defense, very high level of engagement, especially, for example, with the government and defense and aerospace customers. And the guidance is a reflection of this new situation that we are in. I want to emphasize that those deals are across multiple verticals, both new and existing customers. So they are also diversified across verticals like aerospace, tooling, dental, and medical.

I appreciate you providing more color on that. Just wanted to ask a follow-up on the fourth quarter adjusted EBITDA margin. You mentioned that it should be 8% or more of revenue. What assumptions have baked into that ramp outside of cost controls? Are there any specific customer deals that are expected to pick up, product launches, or seasonal trends? Because last year's fourth quarter was particularly stronger than the other quarters. So just any more color you can provide on the ramp-up in margin.

Thanks, Tyler, for the question. So it's actually to complement Yoav's answer to the last question. Those large deals are not baked into our 2025 model. They are not baked into our Q4 model. If they were still high probability to be in Q4, the guidance would have been higher. So to answer your question, it is largely associated for Q4 based on the new model. It is largely associated with tight cost monitoring and some cost reductions.

I think you had maybe covered the revenue guide well, but I'm still a little bit unclear on, call it, the magnitude of the earnings reduction. Can you just talk a little bit about, one, what is specifically impacting the gross margin as much as it is? And just to be clear, can you give us some sense on the magnitude of this new cost reduction effort that you seem to be alluding to that takes place or takes into account Q4?

Thank you, Greg. Thank you for the question. I cannot be specific about each deal size, but the magnitude is more or less the gap between the new guidance and the old guidance, maybe a little bit more. That's more or less the magnitude of those deals.

On the cost side, specifically regarding gross margin, there are several factors at play. One is the changes in the sales mix, which are small adjustments that add up. Another element is the absorption issue; we saw inventory levels decrease by $30 million, which has a significant positive effect. We have discussed our ongoing efforts to reduce inventories in previous calls, and this is important for our future cash flow. However, in the short term, it affects absorption and temporarily lowers gross margin. The third factor relates to tariffs. Our main production is in the U.S., but we also manufacture abroad, and shifts in tariffs have impacted us. We are implementing a mitigation plan that will take a few months to fully execute, leading to a temporary effect on gross margin for the remainder of the year. Regarding cost mitigation, we are focusing on non-essential projects, primarily cutting variable costs and discretionary expenses like travel. These are the main areas where we expect to see savings.

Okay. So maybe more sort of short-term temporary reductions. My follow-up was going to be just kind of thinking about fiscal '26, what's your comfort level on, call it, 8% EBITDA margins under a lower revenue relative to 2024?

Greg, I'll say, I think it's very important to say, we look quarter-by-quarter. We're a public company. But we structured a company with a cost infrastructure that will help us make us profitable and much more profitable when revenue increases. So to your question, we will plan 2026 in the next few months as we build our budget for next year. But we designed the company, we structured the company in a way to have next year 8% or better when we finish this plan.

Eitan, you may have answered this next question in response to Greg's earlier question. But it's a little surprising to have seen the slightly lower gross margin in Q2 versus Q1, even though the revenues were up sequentially, modestly, but including sequential growth in consumables. So what occurred there? Was that an absorption or tariff-related impact? Maybe you could just shed a little bit more light on that.

Sure. So I guess at the start, I'll say that the gross margin in Q1 was 48.3%, gross margin in Q2 is 47.7%. The difference to start with is not that significant. However, to address your question, there are two main elements. One is the absorption that I mentioned, and you mentioned also in your question, that's something that had some impact on this change, a small change. And the other element is tariffs. Tariffs did not have significant impact on Q2. But again, when we bridge between 48.3% to 47.7%, that's part of the bridge.

I noticed that the company acquired some of the Nexa assets. I was wondering which of the Nexa 3D printing processes were included in the asset purchase and if you could elaborate on your plans for these acquired assets.

We are in a unique situation in our industry with a significant shake-up. Fortunately, we have worked hard to reach a stable position where we are not burning cash. I believe we are among the best operators in the industry due to our strong infrastructure, which provides us with synergies and has led us to a healthy financial state. Our balance sheet shows $255 million in cash with no debt, positive operating cash flow, and strong relationships with top customers. This positions us well to acquire companies at exceptional values, unlike anything we could have imagined two years ago. We recently acquired Forward AM, which has a fantastic portfolio of intellectual property and unique materials that strengthen our strategic position. The team we inherited includes skilled researchers and product managers who have extensive knowledge of the material sector. Additionally, we also acquired Nexa, which has previously enjoyed significant success in delivering quality parts and machines. Despite the challenges they faced recently, we acquired them under favorable terms, bringing valuable intellectual property and R&D expertise that will enhance our focus on sectors such as aerospace and defense. These acquisitions highlight Stratasys' strength as a financially healthy and operationally sound company. While there is much work ahead to rebuild these businesses, we are confident we can achieve that.

Gentlemen, congratulations on the impressive results in a challenging environment. Eitan, could you clarify the deals that have slipped, not closed, or been delayed? If I recall correctly, were these associated with the F3300 and potential opportunities in the automotive sector?

Troy, sorry, we couldn't hear the question. Can you repeat it, please?

Yes, sure. I think coming into the year, you guys had pretty good confidence on the second half ramp, and now you're talking about some deals slipping, right? So I guess I thought they were associated with the F3300. So I'm wondering if you could just kind of confirm that maybe the automotive opportunity slipped to the right? Just update us on the F3300, please.

Thank you for your question. I'm happy to provide an update. The F3300 is crucial to our use case strategy as it is the best tooling machine available regarding throughput and reliability. It is particularly effective for aerospace and defense, and we have satisfied customers who are making repeat purchases of the machine. There is no relationship between the deal delays and the F3300. The issues revolve around how our clients are developing their infrastructure, workflows, collaboration, and preparation within their organizations. These are the challenges we are facing. On the other hand, the F3300 significantly enhances our chances of being considered for these deals. We are very pleased with the F3300 as it is currently the most dependable FDA machine we have. No one else can match its speed, reliability, or accuracy, which contributes to a better total cost of ownership for our customers.

Troy, I will add that the plan, the model that we just released with the new guidance reflects more F3300 in 2025 compared to 2024 when we launched.

This is Alek on for Ananda. So given the success of your strategic collaborations with General Motors and Toyota involving your F900 systems, do you guys anticipate this momentum to lead to additional partnerships with other vehicle OEMs, especially in light of the growing emphasis on localized manufacturing?

Thank you for the question. You highlighted a crucial trend in additive manufacturing. We need to explore new use cases, and for that, we require proven applications. This applies to automotive, dental, and aerospace sectors. Let's start with General Motors and Toyota, both of which are leading companies that have chosen to partner with Stratasys. I want to emphasize three key points. First, this showcases a successful concept of using additive manufacturing in production. For instance, GM has standardized the additive manufacturing workflow, allowing them to replicate and expand their processes. The second point involves demonstrating the value proposition of additive manufacturing and Stratasys' solutions in production applications. For both Toyota and GM, the value primarily lies in speed and cost savings, with speed significantly contributing to cost efficiency. Toyota aims to cut their product development time by 33%, which is substantial. GM can produce tools in hours rather than months, significantly enhancing their competitiveness. Additionally, GM's cost savings can be remarkable, as the cost of the tools they print can be less than 10% of traditional tools, clearly illustrating the value proposition. The third aspect focuses on growth potential. As the processes become standardized, there is room for expansion within the customer base and to other facilities, which is already in motion. We also have similar successes in the dental sector, where we are market leaders with our innovative inkjet solution for monolithic dentures capable of utilizing multiple materials in one print process. No one has achieved this before us, despite claims to the contrary. We have already printed 85,000 dentures, and this is gaining traction, thus enabling us to replicate and expand further.

The consumables recurring revenue stream that's tied post-sale. But could you speak to any upsell opportunities you foresee with General Motors and Toyota as well as with any future collaborations?

There is certainly an opportunity for upselling to others, and we are currently in discussions about it. I encourage everyone to watch the video, as seeing is believing. I can talk for hours, but the video will better convey the value proposition of additive manufacturing and Stratasys, explaining why Stratasys stands out in this field. Please click the link on the slide for a clearer explanation. The opportunity here is vast, not only in terms of hardware but also in the manufacturing machines themselves, which can operate at around 85% utilization or more. This means that these machines can consume up to ten times more material than those used for rapid prototyping. The key takeaway is that we are transitioning into real production, which requires more resources. Stratasys is one of the few companies equipped to meet these production demands and is a leader in the industry.

We have reached the end of our question-and-answer session. I'd like to turn the floor back over to Dr. Yoav Zeif for any further closing comments.

Thank you for joining us. Looking forward to updating you again next quarter.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.