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Stratasys (SSYS) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Information Technology· Aug 13, 2026

Source: earnings call transcript

Executive summary

Stratasys Q2 FY26 — Record Consumables and Strategic Acquisitions Drive Manufacturing Shift

Stratasys reported a quarter marked by record consumables sales and strategic moves to accelerate its shift towards additive manufacturing for end-use parts. While system sales faced headwinds and cash flow was impacted by one-time legal costs, the company's focus on high-growth verticals like aerospace, defense, and automotive, bolstered by the MarkForged acquisition, positions it for future growth as it navigates long sales cycles for large deals.

Highlights

5

  • Record-setting consumables sales of $66.3 million, indicating high system utilization for manufacturing end-use parts.

  • Stratasys Direct parts manufacturing business grew 12.1% year-over-year, fueled by defense technology companies.

  • Aerospace and Defense business grew 17% relative to Q2 last year, driven by U.S. Air Force adoption of F900 systems.

  • Strategic acquisition of MarkForged for $42.5 million cash, expected to enhance growth in A&D and be EBITDA positive within the first year.

  • Secured significant multi-unit deals, including 12 Neo 800-plus systems for Quickparts and 12 F900 systems for FAW Group.

Concerns

4

  • System revenue was $26.4 million, down from $30.6 million in Q2 last year and sequentially from Q1, indicating a delay in inflection.

  • GAAP gross margin declined to 42.3% from 43.1% YoY, and non-GAAP gross margin to 47.2% from 47.7% YoY, partly due to strong Israeli shekel.

  • Operating cash flow was a usage of $18.7 million, atypically high due to non-routine legal expenses, leading to a revised full-year negative OCF outlook.

  • Non-GAAP operating income declined to $0.1 million from $1.1 million YoY, and Adjusted EBITDA to $5.3 million from $6.1 million YoY, impacted by FX.

Guidance & targets

CategoryTargetConfidence
Full-year 2026 Revenue
Sequential growth across all 4 quarters
high materiality
High
Full-year 2026 Operating Cash Flow
No longer positive
high materiality
High
Second Half 2026 Operating Cash Flow
Positive
medium materiality
High
Second Half 2026 System Sales
Notable uptick
medium materiality
Medium
MarkForged EBITDA Contribution
Positive contribution
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Stratasys Direct
Fueled primarily by increasing demand from defense technology companies for drone production, munitions manufacturing and production applications across next-generation platforms. Highest backlog ever.
Parts produced: 12,000+ (for A&D, mainly drones)Top drone players served: 10
—12.1%—contributing positively
Aerospace & Defense
Driven by expanding adoption across the U.S. Air Force for deeper level sustainment and spare parts production, with ongoing multiple system investments in Workhorse F900 systems.
Leading player in polymer additive manufacturing for A&D: estimated
—17%——

Orderbook & backlog

Stratasys Direct Manufacturing Backlog highest ever Q2 FY26

Deals & partnerships

MarkForged Acquisition of continuous carbon fiber technology, materials, and software platform. $42.5 million cash

Will meaningfully augment Stratasys' offering, particularly in aerospace, defense, and industrial production. Integrates talent, partners, and reseller network, opening cross-sell opportunities.

Quickparts Purchase of 12 Neo 800-plus systems, in addition to existing 6 units, along with materials, software, and service. multiyear, multimillion dollar agreement multiyear

Strategic relationship enhanced. Systems going to Quickparts Seattle Aerospace Center of Excellence and European facilities.

America Makes Awarded a 2-year program through the 2026 America Mix OIB Modernization Challenge. $7.8 million 2-year

America Makes is the leading public-private partnership for 3D printing, managed by the National Center for Defense Manufacturing and Machining. Indicates a long-term DOW strategy.

FANUC Adoption of Stratasys industrial solutions into its supply chain.

Reflects a broader trend of automotive OEMs and suppliers aligning with common additive manufacturing platforms for production tooling and replacement parts.

FAW Group Agreement to purchase 12 F900 systems by year-end, with 2 shipped in Q2.

One of the largest Chinese auto OEMs. Reflects competitive advantage in high-requirement industrial applications relative to Chinese lower-end options.

Capital programs

Americas Regional Corporate Headquarters (ARCH) completed

Benefit:200,000 square foot facility, consolidates engineering, R&D, applications expertise, Stratasys Direct, and customer collaboration capabilities

Celebrated grand opening in June. Supports anticipated growing demand and reinforces focus on production scale additive manufacturing.

Risks & headwinds

System Sales Decline Q2 FY26

System revenue was $26.4 million, down from $30.6 million in Q2 FY25 and sequentially from Q1 FY26.

Mitigation:Robust pipeline of large deals, expectation of notable uptick in system sales in H2 FY26.

Operating Cash Flow Usage Q2 FY26

$18.7 million usage in Q2 FY26.

Mitigation:Expected to be positive in H2 FY26; driven by non-routine legal expenses to protect IP.

Adverse FX Impact Q2 FY26

$2.9 million adverse impact from strong Israeli shekel on non-GAAP operating income and Adjusted EBITDA.

Mitigation:Partially offset by higher consumables revenue margins.

Long Sales Cycles for Large Deals Ongoing

Magnitude of commitments tends to carry long sales cycle and add variability quarter-to-quarter.

Mitigation:Robust pipeline of large deals, expectation that emerging opportunities will generate a sales flywheel for increased growth in coming years.

What to watch in Q3 FY26

System Sales Inflection

H2 FY26
Current $26.4 million (down YoY and sequentially)
Target Notable uptick

Why it matters

System sales are a key indicator of new customer adoption and future consumables revenue, crucial for overall growth.

When you look at the second half of the year, you will see a notable uptick in system sales.

Find out whether SSYS delivers this. Inve re-checks your case every morning.

Q&A highlights

How does MarkForged's carbon fiber technology fit strategically, especially against metal AM, and what is the revenue profile and integration plan for the $70M business?

Yoav Zeif outlined 5 strategic pillars for the MarkForged acquisition: unique continuous carbon fiber technology (lighter, less expensive, less post-processing than metal, with 4 large corporate requests for collaboration), aligned use cases (A&D, tooling), complementary go-to-market networks, advanced software (simulation, distributed manufacturing), and talent integration. He did not detail the revenue profile or specific trimming plans beyond general integration and synergy realization.

“continuous carbon fiber can replace metal. It's lighter, it's less expensive. It significantly requires less post processing, which is a huge advantage.”

asked by Jackson Schroeder · answered by Yoav Zeif

2 min read 6 chapters

Detailed narrative

Shift to Manufacturing Strategy

Stratasys is actively transitioning its business focus from prototyping to manufacturing, evidenced by record consumables sales and significant deals in aerospace, defense, and automotive. This shift is driven by megatrends like supply chain resiliency and localized production, with the company aiming to become a critical part of customers' production line infrastructure.

The annual growth of manufacturing-based revenue is supported by metrics shared year-end, indicating steady progress towards a more robust company.

Aerospace & Defense Momentum

Aerospace & Defense (A&D) is the largest business, growing 17% year-over-year, with Stratasys positioned as a leading player in polymer additive manufacturing for the sector. This growth is propelled by increasing adoption across the U.S. Air Force for deeper level sustainment and spare parts production using Workhorse F900 systems.

This demand is viewed as structural rather than cyclical, given the long-term qualification relationships once parts are approved on their platforms.

Strategic Acquisitions and Partnerships

The pending acquisition of MarkForged for $42.5 million is expected to significantly augment Stratasys' offering, particularly in A&D and industrial production, by adding continuous carbon fiber technology, materials, and software. This deal is anticipated to generate new revenue streams and meaningful synergies, becoming EBITDA positive within the first year post-closing.

Additionally, the company secured a 2-year, $7.8 million program through America Makes to advance next-generation monitoring for its F900 and F3300 platforms, further integrating its production platforms into defense strategy.

Automotive Industry Penetration

Stratasys is seeing increased adoption in the automotive sector, with FANUC integrating its industrial solutions into its supply chain at the request of a major OEM. FAW Group, one of the largest Chinese auto OEMs, agreed to purchase 12 F900 systems by year-end for end-use interior parts production, building on existing systems.

This demonstrates Stratasys' competitive advantage in high-requirement industrial applications compared to lower-end Chinese options.

Americas Regional Corporate Headquarters (ARCH)

The company celebrated the grand opening of its 200,000 square foot Americas Regional Corporate Headquarters (ARCH) in Minnetonka, Minnesota, in June. This facility consolidates engineering, innovative research and development, applications expertise, Stratasys Direct, and customer collaboration capabilities. This larger, more advanced headquarters is designed to support anticipated growing demand and reinforces the company's focus on production-scale additive manufacturing, receiving bipartisan congressional support.

Dental Business Outlook

Stratasys is developing innovative solutions for removables in the dental industry, with FDA and European approvals already secured for its first version. The company views this as a massive opportunity, having hired top talent and working with leading labs such as Clyde Caldwell and Affordable Dentures. Management expressed excitement and indicated that further updates on this transforming segment would be provided.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.