Hello and welcome to the 3D Systems third quarter 2025 earnings conference call. I'll provide some commentary on the overall market and then focus the remainder of my comments on our strategy and growth initiatives. This can be seen in our third quarter revenue of $91.2 million, which was down 13.8% year-over-year, soft but consistent with our normal seasonality trends. As such, we've taken aggressive actions to adjust our cost structure while maintaining core R&D investments to position the company for long-term growth when market conditions improve.

As you may know, these software platforms are not proprietary but were designed to serve the entire industry. We expect the financial impact of this disposition on our fourth quarter results to be approximately $1.2 million in revenue and $1 million on gross margin. In the industrial segment, we introduced the MJP 300W Plus at the Istanbul Jewelry Show in early October. We're building backlog for the fourth quarter and are very excited about this market opportunity, which we believe will reach $1 billion in industry revenue across the U.S.

Before I begin a review of the third quarter results, I would like to remind you we completed the divestiture of our Geomagic software business on April 1st of this year. With that, let's begin with a summary of our revenue which you'll find on slide 12. Third quarter consolidated revenue was $91.2 million, down 19% year-over-year or 14% when excluding Geomagic. Sequentially, revenue declined modestly, primarily reflecting typical third quarter seasonality and the absence of a regenerative medicine milestone that was recognized in the prior quarter.

What went well
  • Aerospace and defense revenue grew nearly 50% over the prior year, continuing its strong momentum as a key growth segment.
  • Non-GAAP operating expenses fell to $44.7 million, down 24% year-over-year (excluding Geomagic) and 4.5% sequentially, keeping the company on track to deliver over $50 million in annualized savings by year end.
  • Adjusted EBITDA of -$10.8 million improved $3.5 million versus the prior year, and GAAP loss per share improved sharply to $0.14 from $1.35.
  • The company achieved the full U.S. commercial release of its NextDent jetted denture solution, already placing printers with a dozen leading U.S. dental labs with excellent feedback and backlog building for Q4.
  • New product launches gained traction, including the MJP 300W Plus wax jewelry printer introduced at the Istanbul Jewelry Show, with orders already being accepted.
What went wrong
  • Consolidated revenue of $91.2 million declined 13.8% year-over-year (19% reported, 14% excluding Geomagic), reflecting continued muted customer CapEx amid tariff uncertainty.
  • Healthcare Solutions revenue of $43 million decreased 22% year-over-year, predominantly driven by lower dental sales against a 2024 period with higher volumes from a specific customer.
  • Non-GAAP gross margin fell to 33% from 38% a year earlier, driven by lower sales volume, reduced material sales, the absence of the prior quarter's regenerative medicine milestone, and higher manufacturing variances including scrap and inventory reserves.
  • Industrial Solutions revenue of $48 million declined 16% year-over-year (4.5% excluding Geomagic) due to softness in printer and material sales in consumer-facing end markets.

Guidance Changes

MetricPeriodCurrent guidance
Geomagic-style disposition impact (Oqton/3DXpert)Q4 2025Approximately $1.2 million in revenue and $1 million on gross margin impact, reflected in Q4 guidance
Non-GAAP operating expenseQ4 2025Marginally below the current quarter, with continued declines through the first half of 2026
Annualized cost savingsYear end 2025On track to deliver over $50 million in annualized savings
Gross marginQ4 2025Flat quarter-over-quarter
RevenueQ4 2025Sales picking up in Q4 (per CEO commentary)
CapExNext couple of yearsSubstantially less than 4%, probably less than half that level

Performance Breakdown

MetricYoYNote
Consolidated revenue Down 13.8% (19% reported, 14% excluding Geomagic) to $91.2M Customers' muted CapEx spending for new production capacity from tariff uncertainty, plus normal Q3 seasonality
Industrial Solutions revenue Down 16% (down 4.5% excluding Geomagic) to $48M Softness in printers and material sales in consumer-facing end markets, partially offset by ~50% aerospace and defense growth
Healthcare Solutions revenue Down 22% to $43M Predominantly lower dental sales, with 2024 representing higher purchase volumes from a specific customer; medtech up 8%
Non-GAAP gross margin 33% vs. 38% prior year Lower sales volume and reduced material sales, partially offset by reduced inventory reserves; sequentially hurt by absent RegMed milestone and higher manufacturing variances
Adjusted EBITDA -$10.8M, improved $3.5M Cost reduction initiatives delivering meaningful expense reductions
GAAP loss per share -$0.14 vs. -$1.35 prior year Absence of prior-year asset impairment charges, lower amortization expense, and lower operating expenses

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
Non-core asset rationalizationGeomagic divested April 1, 2025Sale of Oqton and 3DXpert software platforms closed at end of October to transition them to an independent developer as industry standards—
NextDent dentures commercializationRamping production, POs starting (Q2)Full U.S. commercial release; printers placed with a dozen leading labs, backlog building, with a projected ~$1 billion U.S./Europe industry opportunity—
Cost reduction and facility footprintTargeting low-$40M OpExFive or six facilities exited and on the market; OpEx declines continuing through first half 2026 toward original $70M takeout target—
Aerospace and defense partnerships—New partnerships highlighted including Lockheed Martin and Saudi JV initiatives leveraging local-sourcing defense requirements—

Q&A Summary

Gross margins dropped a lot sequentially — can you explain the decline?
Two main components: the absence of the ~$2M RegMed LUNG milestone recognized in the prior quarter, plus manufacturing variances including scrap and inventory reserve cleanup; gross margin is expected to be flat next quarter.
Is there more to do on cost cuts, and what revenue level reaches breakeven?
The majority of organizational capacity actions are done; facilities take longer and should close out early next year. OpEx declines through the first half of 2026; the original $70M takeout target, in a more normalized environment, should reach positive cash flow profitability, dependent on volume and mix.
Can you give more detail on the Lockheed Martin and Middle East partnerships?
3D Systems works with Lockheed in the U.S. and globally; the Saudi JV benefits from defense OEMs' local-sourcing commitments in the Kingdom, with applications across normal flight and missile systems that management couldn't detail specifically.
What are your CapEx expectations for next year?
CapEx can be throttled back given prior heavy investment; historic benchmark is ~4% of sales, but the next couple of years can be substantially below that, probably less than half, because manufacturing operations are not capital intensive.
What is stabilizing the dental business, and when do monolithic dentures become meaningful?
NextDent/Vertex repair materials run consistently while aligners are stabilizing after a couple of declining quarters; dentures need European approval (2026) and lab adoption, but are a very sticky product expected to be one of the company's largest, most valuable revenue streams.

More on 3D Systems Corp

Reported 2025-11-05 · figures from the 3D Systems Corp Q3 2025 earnings call.

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