Stratasys Ltd.

Second-quarter consolidated revenue was $137.6 million, up 3.7% sequentially from $132.7 million in Q1 and roughly flat versus $138.1 million a year ago. System revenue was $26.4 million versus $30.6 million last year; consumable revenue was a record $66.3 million versus $64.2 million; service revenue was $44.9 million versus $43.3 million, with Stratasys Direct up 12.1% year over year. GAAP gross margin was 42.3% versus 43.1% a year ago, and non-GAAP gross margin was 47.2% versus 47.7%. GAAP net loss was $16.9 million, or $0.19 per diluted share, versus $16.7 million, or $0.20, and non-GAAP net income was $2.3 million, or $0.03 per diluted share, unchanged from a year ago. Adjusted EBITDA was $5.3 million versus $6.1 million last year. For the outlook, management reaffirmed full-year guidance except for operating cash flow, said it still expects sequential revenue growth in all four quarters of 2026, but no longer expects full-year operating cash flow to be positive; the company still expects second-half operating cash flow to be positive.

Yoav Zeif framed the quarter as evidence that Stratasys is moving from prototyping toward manufacturing, highlighting record consumables, stronger recurring revenue, and momentum in aerospace and defense. He pointed to repeat and multiyear wins with customers like the U.S. Air Force, Quickparts, FAW Group, and others as proof that demand is becoming structural rather than cyclical. His tone was optimistic and confident, especially around the pending MarkForged acquisition, which he said will expand capabilities in continuous carbon fiber, software, and go-to-market reach.

Eitan Zamir emphasized disciplined execution, citing $137.6 million in revenue, 42.3% GAAP gross margin, 47.2% non-GAAP gross margin, $0.1 million in non-GAAP operating income, and $5.3 million of adjusted EBITDA. He said margins were pressured by the strong Israeli shekel, which had a $2.9 million adverse impact, partly offset by stronger consumables margins. Cash flow was a weak spot: operating cash flow used $18.7 million in the quarter, mainly due to non-routine legal expenses to protect IP, cash and short-term deposits ended at $212.5 million, and the company now expects full-year operating cash flow to be negative even though the second half should be positive. He also noted the balance sheet is debt-free and gives flexibility for organic and inorganic growth.

Analysts focused on two issues: whether MarkForged changes the strategic position in aerospace/defense and why system sales have not yet inflected despite improving industrial demand. Zeif said MarkForged adds continuous carbon fiber, aligned applications, partner channels, software, and talent, and that carbon fiber can replace metal in some use cases; he also said he received four inbound requests from large corporates after the deal announcement. On system sales, management said the business is being driven by large deals with lumpy timing, pointed to the second half as the period when a notable uptick should appear, and reiterated guidance for sequential revenue growth across all four quarters.