UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of November 2021
Commission File Number
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(Translation of registrant’s name into English) |
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c/o Stratasys, Inc. 9600 West 76th Street Eden Prairie, Minnesota 55344 |
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(Address of principal executive office) |
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Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____
The contents of this Report of Foreign Private Issuer on Form 6-K, or this Form 6-K, including Exhibits 99.1, 99.2 and 101 annexed hereto, are incorporated by reference into the Registrant’s registration statements on Form F-3, SEC file numbers 333-251938 and 333-253780, filed by the Registrant with the SEC on January 7, 2021 and March 2, 2021, respectively, and Form S-8, SEC file numbers 333-190963, 333-236880 and 333-253694, filed by the Registrant with the SEC on September 3, 2013, March 4, 2020, and March 1, 2021, respectively, and shall be a part thereof from the date on which this Form 6-K is furnished, to the extent not superseded by documents or reports subsequently filed or furnished.
CONTENTS
On November 4, 2021, Stratasys Ltd., or Stratasys, released its financial results for the three and nine months ended September 30, 2021.
Attached hereto as Exhibit 99.1 are the unaudited, condensed consolidated financial statements of Stratasys for the three and nine months ended September 30, 2021 (including the notes thereto), or the Q3 2021 Financial Statements
Attached hereto as Exhibit 99.2 is Stratasys’ review of its results of operations and financial condition for the three and nine months ended September 30, 2021, including the following:
(i)
Operating and Financial Review and Prospects
(ii)
Quantitative and Qualitative Disclosures About Market Risk
(iii)
Legal Proceedings
(iv)
Risk Factors
Attached hereto as Exhibit 101 are the Q3 2021 Financial Statements, formatted in IXBRL (eXtensible Business Reporting Language), consisting of the following sub-exhibits:
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Exhibit Number |
Document Description |
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EX-101.INS |
IXBRL Taxonomy Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
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EX-101.SCH |
IXBRL Taxonomy Extension Schema Document |
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EX-101.CAL |
IXBRL Taxonomy Calculation Linkbase Document |
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EX-101.DEF |
IXBRL Taxonomy Extension Definition Linkbase Document |
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EX-101.LAB |
IXBRL Taxonomy Label Linkbase Document |
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EX-101.PRE |
IXBRL Taxonomy Presentation Linkbase Document |
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EX-104 |
Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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STRATASYS LTD. | |
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Dated: November 4, 2021 |
By: |
/s/ Lilach Payorski |
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Name: |
Lilach Payorski |
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Chief Financial Officer |
Exhibit 99.1
STRATASYS LTD.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED
(UNAUDITED)
INDEX TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021
(UNAUDITED)
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Item |
Page | |
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Consolidated Balance Sheets |
2 | |
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Consolidated Statements of Operations and Comprehensive Loss |
3 | |
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Consolidated Statements of Changes in Equity |
4-5 | |
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Consolidated Statements of Cash Flows |
6 | |
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Notes to Condensed Consolidated Interim Financial Statements |
7-18 |
STRATASYS LTD.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Unaudited)
| Consolidated Balance Sheets | ||||||||
| (in thousands, except share data) | ||||||||
| September 30, 2021 | December 31, 2020 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Short-term deposits | ||||||||
| Accounts receivable, net of allowance for credit losses of $ | ||||||||
| Inventories | ||||||||
| Prepaid expenses | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Property, plant and equipment, net | ||||||||
| Goodwill | ||||||||
| Other intangible assets, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Other non-current assets | ||||||||
| Total non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Accrued compensation and related benefits | ||||||||
| Deferred revenues - short term | ||||||||
| Operating lease liabilities - short term | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities | ||||||||
| Deferred revenues - long term | ||||||||
| Operating lease liabilities - long term | ||||||||
| Contingent consideration | ||||||||
| Other non-current liabilities | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | $ | $ | ||||||
| Contingencies (see note 12) | ||||||||
| Redeemable non-controlling interests | - | |||||||
| Equity | ||||||||
| Ordinary shares, NIS | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total equity | ||||||||
| Total liabilities and equity | $ | $ |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
STRATASYS LTD.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Unaudited)
| Consolidated Statements of Operations and Comprehensive Loss | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| in thousands, except per share data | 2021 | 2020 | 2021 | 2020 | |||||||||||
| Revenues | |||||||||||||||
| Products | $ | $ | $ | $ | |||||||||||
| Services | |||||||||||||||
| Cost of revenues | |||||||||||||||
| Products | |||||||||||||||
| Services | |||||||||||||||
| Gross profit | |||||||||||||||
| Operating expenses | |||||||||||||||
| Research and development, net | |||||||||||||||
| Selling, general and administrative | |||||||||||||||
| Goodwill impairment | | ||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
| Financial expenses, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
| Income tax benefit | |||||||||||||||
| Share in profit (loss) of associated companies | ( | ) | ( | ) | |||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Net loss attributable to non-controlling interests | ( | ) | ( | ) | |||||||||||
| Net loss attributable to Stratasys Ltd. | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Net loss per ordinary share attributable to Stratasys Ltd. - basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Weighted average ordinary shares outstanding. - basic and diluted | |||||||||||||||
| Comprehensive loss | |||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
| Other comprehensive income (loss), net of tax: | |||||||||||||||
| Foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | |||||||||
| Unrealized gains (losses) on derivatives designated as cash flow hedges | ( | ) | ( | ) | |||||||||||
| Other comprehensive income (loss), net of tax | ( | ) | ( | ) | ( | ) | |||||||||
| Comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
| Less: comprehensive loss attributable to non-controlling interests | ( | ) | ( | ) | |||||||||||
| Comprehensive loss attributable to Stratasys Ltd. | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
STRATASYS LTD.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Unaudited)
| Consolidated Statements of Changes in Equity | ||||||||||||||||||||||||
| (in thousands ) | ||||||||||||||||||||||||
| Three and Nine Months Ended September 30, 2021 and 2020 | ||||||||||||||||||||||||
| Accumulated | ||||||||||||||||||||||||
| Additional | Other | |||||||||||||||||||||||
| Ordinary Shares | Paid-In | Accumulated | Comprehensive | Total | ||||||||||||||||||||
| Number of shares | Par Value | Capital | deficit | Loss | Equity | |||||||||||||||||||
| Balance as of December 31, 2020 | ( | ) | ( | ) | ||||||||||||||||||||
| Issuance of shares in connection with stock-based compensation plans | ||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||
| Public offering of ordinary shares, net | ||||||||||||||||||||||||
| Deferred tax assets in connection with public offering expenses | - | |||||||||||||||||||||||
| Comprehensive income (loss) | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of March 31, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Issuance of shares in connection with stock-based compensation plans | ||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||
| Deferred tax assets in connection with public offering expenses | - | |||||||||||||||||||||||
| Comprehensive income (loss) | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of June 30, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Issuance of shares in connection with stock-based compensation plans | ||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||
| Expenses in connection with March 2021 public offering | - | ( | ) | ( | ) | |||||||||||||||||||
| Reduction of redeemable non-controlling interest | - | |||||||||||||||||||||||
| Comprehensive loss | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||
| Balance as of September 30, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
STRATASYS LTD.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Unaudited)
| Consolidated Statements of Changes in Equity | ||||||||||||||||||||||||
| (in thousands ) | ||||||||||||||||||||||||
| Three and Nine Months Ended September 30, 2021 and 2020 | ||||||||||||||||||||||||
| Accumulated | ||||||||||||||||||||||||
| Additional | Other | |||||||||||||||||||||||
| Ordinary Shares | Paid-In | Accumulated | Comprehensive | Total | ||||||||||||||||||||
| Number of shares | Par Value | Capital | deficit | Loss | Equity | |||||||||||||||||||
| Balance as of December 31, 2019 | ( | ) | ( | ) | ||||||||||||||||||||
| Issuance of shares in connection with stock-based compensation plans | ||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||
| Comprehensive loss | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||
| Balance as of March 31, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Issuance of shares in connection with stock-based compensation plans | ||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||
| Comprehensive income (loss) | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of June 30, 2020 | $ | $ | $ | ( | ) | ( | ) | $ | ||||||||||||||||
| Issuance of shares in connection with stock-based compensation plans | ||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||
| Comprehensive loss | - | ( | ( | ( | ||||||||||||||||||||
| Balance as of September 30, 2020 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
STRATASYS LTD.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Unaudited)
| Consolidated Statements of Cash Flows | |||||||||
| Nine Months Ended September 30, | |||||||||
| in thousands | 2021 | 2020 | |||||||
| Cash flows from operating activities | |||||||||
| Net loss | $ | ( | ) | $ | ( | ) | |||
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||
| Goodwill impairment | |||||||||
| Impairment of other long-lived assets | |||||||||
| Depreciation and amortization | |||||||||
| Stock-based compensation | |||||||||
| Foreign currency transaction loss | ( | ) | |||||||
| Deferred income taxes | ( | ) | ( | ) | |||||
| Share in loss (profit) of associated companies | ( | ) | |||||||
| Revaluation of investments | |||||||||
| Other non-cash items, net | |||||||||
| Change in cash attributable to changes in operating assets and liabilities: | |||||||||
| Accounts receivable, net | ( | ) | |||||||
| Inventories | |||||||||
| Other current assets and prepaid expenses | ( | ) | |||||||
| Other non-current assets | |||||||||
| Accounts payable | ( | ) | |||||||
| Other current liabilities | ( | ) | |||||||
| Deferred revenues | ( | ) | |||||||
| Other non-current liabilities | ( | ) | ( | ) | |||||
| Net cash provided by operating activities | |||||||||
| Cash flows from investing activities | |||||||||
| Cash paid for acquisitions, net of cash acquired | ( | ) | |||||||
| Purchase of property and equipment | ( | ) | ( | ) | |||||
| Investments in short-term bank deposits | ( | ) | ( | ) | |||||
| Investments in unconsolidated entities | ( | ) | |||||||
| Proceeds from maturity of short-term bank deposits | |||||||||
| Proceeds from sale of equity method investment | |||||||||
| Net proceeds from divestitures of subsidiaries and associated companies | |||||||||
| Purchase of intangible assets | ( | ) | ( | ) | |||||
| Other investing activities | ( | ) | |||||||
| Net cash used in investing activities | ( | ) | ( | ) | |||||
| Cash flows from financing activities | |||||||||
| Proceeds from public offering, net of issuance costs | |||||||||
| Proceeds from exercise of stock options | |||||||||
| Other financing activities | |||||||||
| Net cash provided by financing activities | |||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ) | ( | ) | |||||
| Net change in cash, cash equivalents and restricted cash | ( | ) | |||||||
| Cash, cash equivalents and restricted cash, beginning of period | |||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | |||||||
| Supplemental disclosures of cash flow information: | |||||||||
| Transfer of inventory to fixed assets | |||||||||
| Transfer of fixed assets to inventory | |||||||||
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
STRATASYS LTD.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
Note 1. Business Description and Basis of Presentation
The condensed consolidated interim financial information herein is unaudited; however, such information reflects all adjustments (consisting of normal, recurring adjustments), which are, in the opinion of management, necessary for a fair statement of results for the interim period. The condensed consolidated interim financial statements include the accounts of Stratasys Ltd. and its subsidiaries. All intercompany accounts and transactions, including profits from intercompany sales not yet realized outside the Company, have been eliminated in consolidation.
The Company's financial statements are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”), which requires the Company to make estimates based on assumptions about current and, for some estimates, future economic and market conditions which affect reported amounts and related disclosures in its financial statements. Although the Company current estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could differ from the Company expectations, which could materially affect its results of operations and financial position.
In particular, a number of estimates have been and will continue to be affected by the ongoing COVID-19 pandemic. The severity, magnitude and duration of, and recovery from, as well as the economic consequences of, the COVID-19 pandemic, remain uncertain, rapidly changing and difficult to predict. As a result, the accounting estimates and assumptions may change over time in response to COVID-19. Such changes could have an additional impact on the Company’s long-lived asset and intangible asset valuation; inventory valuation; assessment of the annual effective tax rate; and the allowance for expected credit losses and bad debt.
The results of operations for the three and nine months ended September 30, 2021 are not indicative of results that could be expected for the entire fiscal year. Certain financial information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. The reader is referred to the audited consolidated financial statements and notes thereto for the year ended December 31, 2020, filed with the U.S. Securities and Exchange Commission (the “SEC”) as part of the Company’s Annual Report on Form 20-F for such year on March 1, 2021.
Note 2. New Accounting Pronouncements
Accounting Pronouncements Adopted in 2021
In December 2019, the FASB issued new guidance to simplify the accounting for income taxes by removing certain exceptions to the general principles and simplification of areas such as franchise taxes, step-up in tax basis goodwill, separate entity financial statements and interim recognition of enactment of tax laws or rate changes The guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company adopted this guidance effective January 1, 2021, with no material impact on its consolidated financial statements.
| U.S. $ in thousands | |||
| Cash payments | $ | ||
| Issuance of ordinary shares to Origin stockholders | |||
| Contingent consideration at estimated fair value | |||
| Total consideration | $ |
| Allocation of Purchase Price | |||
| (U.S. $ in thousands) | |||
| Cash and cash equivalents | $ | ||
| Goodwill | |||
| Intangible assets | |||
| Other assets | |||
| Total assets acquired | |||
| Net deferred tax liabilities | |||
| Other labilities | |||
| Total liabilities assumed | |||
| Net assets acquired | $ |
STRATASYS LTD.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
Note 4. Revenues
Disaggregation of Revenues
The following table presents the Company’s revenues disaggregated by geographical region (based on the Company's customers' locations) and revenue type for the three and nine months ended September 30, 2021 and 2020:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| (U.S. $ in thousands) | (U.S. $ in thousands) | ||||||||||||||
| Americas | |||||||||||||||
| Products | $ | $ | $ | $ | |||||||||||
| Service | |||||||||||||||
| Total Americas | |||||||||||||||
| EMEA | |||||||||||||||
| Products | |||||||||||||||
| Service | |||||||||||||||
| Total EMEA | |||||||||||||||
| Asia Pacific | |||||||||||||||
| Products | |||||||||||||||
| Service | |||||||||||||||
| Total Asia Pacific | |||||||||||||||
| Total Revenues | $ | $ | $ | $ | |||||||||||
The following table presents the Company’s revenues disaggregated based on the timing of revenue recognition (at a specific point in time or over the course of time) for the three and nine months ended September 30, 2021 and 2020:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| (U.S. $ in thousands) | (U.S. $ in thousands) | |||||||||||||||
| Revenues recognized in point in time from: | ||||||||||||||||
| Products | $ | $ | $ | $ | ||||||||||||
| Services | ||||||||||||||||
| Total revenues recognized in point in time | ||||||||||||||||
| Revenues recognized over time from: | ||||||||||||||||
| Services | ||||||||||||||||
| Total revenues recognized over time | ||||||||||||||||
| Total Revenues | $ | $ | $ | $ | ||||||||||||
STRATASYS LTD.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
Contract Assets and Contract Liabilities
Contract assets are recorded when the Company's right to consideration is conditional on constraints other than the passage of time. The Company had no material contract assets as of September 30, 2021 and December 31, 2020.
Contract liabilities include advance payments and billings in excess of revenue recognized, which are primarily related to advanced billings for service type warranty. Contract liabilities are presented under deferred revenues. The Company's deferred revenues as of September 30, 2021 and December 31, 2020 were as follows:
| September 30, 2021 | December 31, 2020 | |||||||
| U.S. $ in thousands | ||||||||
| Deferred revenue* | ||||||||
*Includes $
Revenue recognized in 2021 that was included in deferred revenue balance as of December 31, 2020 was $
Remaining Performance Obligations
Remaining Performance Obligations (“RPO“) represent contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. As of September 30, 2021, the total RPO amounted to $
Incremental Costs of Obtaining a Contract
Sales commissions earned mainly by the Company’s sales agents are considered incremental costs of obtaining a contract with a customer, as the Company expects the benefit of those commissions to be longer than one year. The majority of the sales commissions are not subject to capitalization, as the commission expense is recognized as the related revenue is recognized. Sales commissions for initial contracts related to the service type warranty are deferred and then amortized on a straight-line basis over the expected customer relationship period if the Company expects to recover those costs. Amortization expense is included in selling, general and administrative expenses in the consolidated statements of operations and comprehensive loss. As of September 30, 2021 and December 31, 2020, the deferred commissions amounted to $
STRATASYS LTD.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
Note 5. Inventories
Inventories consisted of the following:
| September 30, 2021 | December 31, 2020 | |||||||
| U.S. $ in thousands | ||||||||
| Finished goods | $ | $ | ||||||
| Work-in-process | ||||||||
| Raw materials | ||||||||
| $ | $ | |||||||
Note 6. Goodwill and Other Intangible Assets
Goodwill
Changes in the carrying amount of the Company’s goodwill for the nine months ended September 30, 2021 were as follows:
| U.S. $ in thousands | ||||
| Goodwill as of January 1, 2021* | $ | |||
| Goodwill acquired** | | |||
| Measurement period adjustments | ||||
| Foreign currency translation adjustments | ( | ) | ||
| Goodwill as of September 30, 2021 | $ |
*The goodwill was acquired as part of the Origin acquisition. See Note 3.
**The goodwill was acquired as part of the RPS acquisition. See Note 3.
Other Intangible Assets
Other intangible assets consisted of the following:
| September 30, 2021 | December 31, 2020 | |||||||||||||||||||||||
| Carrying Amount, | Net | Carrying Amount, | Net | |||||||||||||||||||||
| Net of | Accumulated | Book | Net of | Accumulated | Book | |||||||||||||||||||
| Impairment | Amortization | Value | Impairment | Amortization | Value | |||||||||||||||||||
| U.S. $ in thousands | ||||||||||||||||||||||||
| Developed technology | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Patents | ( | ) | ( | ) | ||||||||||||||||||||
| Trademarks and trade names | ( | ) | ( | ) | ||||||||||||||||||||
| Customer relationships | ( | ) | ( | ) | ||||||||||||||||||||
| Capitalized software development costs | ( | ) | ( | ) | - | |||||||||||||||||||
| $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||||
Amortization expenses relating to intangible assets for the three-month periods ended September 30, 2021 and 2020 were approximately $
As of September 30, 2021, the estimated amortization expenses relating to intangible assets for each of the following future periods were as follows:
| Estimated | ||||
| amortization expense | ||||
| (U.S. $ in thousands) | ||||
| Remaining 3 months of 2021 | $ | |||
| 2022 | ||||
| 2023 | ||||
| 2024 | ||||
| 2025 and thereafter | ||||
| Total | $ |
Note 7. Net Loss Per Share
The following table presents the numerator and denominator of the basic and diluted net loss per share computations for the three and nine months ended September 30, 2021 and 2020:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| In thousands, except per share amounts | In thousands, except per share amounts | ||||||||||||||
| Numerator: | |||||||||||||||
| Net loss attributable to Stratasys Ltd. for basic and diluted net loss per share | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
| Denominator: | |||||||||||||||
| Weighted average shares - for basic and diluted net loss per share | |||||||||||||||
| Net loss per share attributable to Stratasys Ltd. | |||||||||||||||
| Basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
The computation of diluted net loss per share excluded share awards of
STRATASYS LTD.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
Note 8. Income Taxes
The Company had income tax benefit of $
Note 9. Fair Value Measurements
Financial instruments measured at fair value
The following table summarizes the Company’s financial assets and liabilities that are carried at fair value on a recurring basis, in its consolidated balance sheets:
| September 30, 2021 | December 31, 2020 | ||||||||||||||
| Level 2 | Level 3 | Level 2 | Level 3 | ||||||||||||
| (U.S. $ in thousands) | |||||||||||||||
| Assets: | |||||||||||||||
| Foreign exchange forward contracts not designated as hedging instruments | $ | $ | |||||||||||||
| Foreign exchange forward contracts designated as hedging instruments | |||||||||||||||
| Liabilities: | |||||||||||||||
| Foreign exchange forward contracts not designated as hedging instruments | ( | ) | ( | ) | |||||||||||
| Foreign exchange forward contracts designated as hedging instruments | ( | ) | |||||||||||||
| Contingent consideration | |||||||||||||||
| $ | $ | $ | ( | ) | $ | ||||||||||
The Company’s foreign exchange forward contracts are classified as Level 2, as they are not actively traded and are valued using pricing models that use observable market inputs, including interest rate curves and both forward and spot prices for currencies (Level 2 inputs).
Contingent consideration represents liabilities recorded at fair value in connection with acquisitions, and thus represents a Level 3 measurement within the fair value hierarchy (refer to Note 3).
Other financial instruments consist mainly of cash and cash equivalents, short-term deposits, current and non-current assets, accounts payable and other current liabilities. The fair value of these financial instruments approximates their carrying values.
STRATASYS LTD.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
Note 10. Derivative instruments and hedging activities
Since the Company conducts its operations globally, it is exposed to global market risks and to the risk that its earnings, cash flows and equity could be adversely impacted by fluctuations in foreign currency exchange rates. The Company enters into transactions involving foreign currency exchange derivative financial instruments. The Company manages its foreign currency exposures on a consolidated basis, which allows the Company to net exposures and take advantage of any natural hedging. The transactions are designed to manage the Company’s net exposure to foreign currency exchange rates and to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates. The Company does not enter into derivative transactions for trading purposes.
The Company is primarily exposed to foreign exchange risk with respect to recognized assets and liabilities and forecasted transactions denominated in the New Israeli Shekel (“NIS”), Euro, GBP, Korean Won, Chinese Yuan and the Japanese Yen. The gains and losses on the hedging instruments partially offset losses and gains on the hedged items. Financial markets and currency volatility may limit the Company’s ability to hedge these exposures. These contracts mature through December 2021.
The following table summarizes the consolidated balance sheets classification and fair values of the Company’s derivative instruments:
| Fair Value | Notional Amount | |||||||||||||||||
| September 30, | December 31, | September 30, | December 31, | |||||||||||||||
| Balance sheet location | 2021 | 2020 | 2021 | 2020 | ||||||||||||||
| U.S. $ in thousands | ||||||||||||||||||
| Assets derivatives -Foreign exchange contracts, not designated as hedging instruments | Other current assets | $ | $ | $ | $ | |||||||||||||
| Assets derivatives -Foreign exchange contracts, designated as cash flow hedge | Other current assets | |||||||||||||||||
| Liability derivatives -Foreign exchange contracts, not designated as hedging instruments | Accrued expenses and other current liabilities | ( | ) | ( | ) | |||||||||||||
| Liability derivatives -Foreign exchange contracts, designated as hedging instruments | Accrued expenses and other current liabilities | ( | ) | |||||||||||||||
| $ | $ | ( | ) | $ | $ | |||||||||||||
Foreign exchange contracts not designated as hedging instruments
As of September 30, 2021, the notional amounts of the Company’s outstanding exchange forward contracts, not designated as hedging instruments, were $
Cash Flow Hedging - Hedges of forecasted foreign currency payroll and other operating expenses
As of September 30, 2021, the Company had in effect foreign exchange forward contracts, designated as cash flow hedges for accounting purposes, for the conversion of $
Cash Flow Hedging - Hedges of forecasted foreign currency revenue
As of September 30, 2021, the Company had in effect foreign exchange forward contracts, designated as cash flow hedges for accounting purposes, for the conversion of
STRATASYS LTD.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
Note 11. Equity
a. Stock-based compensation plans
Stock-based compensation expenses for equity-classified stock options, restricted share units (“RSUs”) and performance-based restricted share units (”PSUs”) were allocated as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| U.S $ in thousands | U.S $ in thousands | ||||||||||||||
| Cost of revenues | $ | $ | $ | $ | |||||||||||
| Research and development, net | |||||||||||||||
| Selling, general and administrative | |||||||||||||||
| Total stock-based compensation expenses | $ | $ | $ | $ | |||||||||||
A summary of the Company’s stock option activity for the nine months ended September 30, 2021 is as follows:
| Number of Options | Weighted Average Exercise Price | |||||||
| Options outstanding as of January 1, 2021 | $ | |||||||
| Granted | ||||||||
| Exercised | ( | ) | ||||||
| Forfeited | ( | ) | ||||||
| Options outstanding as of September 30, 2021 | ||||||||
| Options exercisable as of September 30, 2021 | $ |
As of September 30, 2021, the unrecognized compensation cost of $
STRATASYS LTD.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
A summary of the Company’s RSUs and PSUs activity for the three months ended September 30, 2021 is as follows:
| Number of RSUs and PSUs | Weighted Average Grant Date Fair Value | |||||||
| Unvested as of January 1, 2021 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited | ( | ) | ||||||
| Unvested as of September 30, 2021 | $ |
The fair value of RSUs and PSUs is determined based on the quoted price of the Company’s ordinary shares on the date of the grant.
As of September 30, 2021, the unrecognized compensation cost of $
b. Accumulated other comprehensive loss
The following tables present the changes in the components of accumulated other comprehensive income (loss), net of taxes, for the nine months ended September 30, 2021 and 2020, respectively:
| Nine Months Ended September 30, 2021 | ||||||||||||||
| Net Unrealized Gain (Loss) on Cash Flow Hedges | Foreign Currency Translation Adjustments | Total | ||||||||||||
| U.S. $ in thousands | ||||||||||||||
| Balance as of January 1, 2021 | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
| Other comprehensive income before reclassifications | ( | ) | ||||||||||||
| Amounts reclassified from accumulated other comprehensive loss | ||||||||||||||
| Other comprehensive income | ( | ) | ||||||||||||
| Balance as of September 30, 2021 | $ | $ | ( | ) | $ | ( | ) | |||||||
STRATASYS LTD.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
| Nine Months Ended September 30, 2020 | ||||||||||||||
| Net Unrealized Gain (Loss) on Cash Flow Hedges | Foreign Currency Translation Adjustments | Total | ||||||||||||
| U.S. $ in thousands | ||||||||||||||
| Balance as of January 1, 2020 | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
| Other comprehensive income (loss) before reclassifications | ( | ) | ( | ) | ( | ) | ||||||||
| Amounts reclassified from accumulated other comprehensive loss | ( | ) | ( | ) | ||||||||||
| Other comprehensive income (loss) | ( | ) | ( | ) | ( | ) | ||||||||
| Balance as of September 30, 2020 | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
c. Public offering of ordinary shares
Note 12. Contingencies
Legal proceedings
The Company is a party to various legal proceedings from time to time, the outcome of which, in the opinion of management, will not have a significant effect on the financial position, profitability or cash flows of the Company.
Exhibit 99.2
OPERATING AND FINANCIAL REVIEW AND PROSPECTS.
Overview of Business and Trend Information
COVID Impact
As in preceding quarters (since the first quarter of 2020), our results of operations for the three and nine month periods ended September 30, 2021 should be evaluated in light of the ongoing global COVID-19 pandemic, which has disrupted businesses on a global scale. Our revenues in the third quarter of 2021 furthered the positive trend begun in the first and second quarters of the year, reflecting growth both on a year-over-year basis and on a sequential quarterly basis. The nine-month results evidence these improvements on an aggregate basis, with an increase in revenues by 16.3% compared to the corresponding nine month period of 2020, when the COVID-19 pandemic adversely impacted our revenues significantly. Our improved performance in the third quarter of 2021 was primarily driven by a 26.6% increase in Consumables revenues and by a 34.7% increase in system revenues. Our revenues in the third quarter have surpassed pre-COVID-19 levels for the first time since the start of the pandemic ($159.0 million in the third quarter of 2021 compared to $157.5 million in the corresponding period of 2019), signaling a full recovery for our top-line results.
Summary of Financial Results
Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. In the opinion of our management, all adjustments considered necessary for a fair statement of the unaudited condensed consolidated financial statements have been included herein and are of a normal recurring nature. The following discussion compares the actual results, on a GAAP basis, for the three and nine months ended September 30, 2021 with the corresponding periods of 2020.
Results of Operations
Comparison of Three Months Ended September 30, 2021 to Three Months Ended September 30, 2020
The following table sets forth certain statement of operations data for the periods indicated:
| Three Months Ended September 30, | |||||||||||||||
| 2021 | 2020 | ||||||||||||||
| U.S. $ in thousands | % of Revenues | U.S. $ in thousands | % of Revenues | ||||||||||||
| Revenues | $ | 159,009 | 100.0 | % | $ | 127,892 | 100.0 | % | |||||||
| Cost of revenues | 90,821 | 57.1 | % | 78,123 | 61.1 | % | |||||||||
| Gross profit | 68,188 | 42.9 | % | 49,769 | 38.9 | % | |||||||||
| Research and development, net | 22,645 | 14.2 | % | 19,562 | 15.3 | % | |||||||||
| Selling, general and administrative | 67,462 | 42.4 | % | 48,343 | 37.8 | % | |||||||||
| Goodwill impairment | - | 0.0 | % | 386,154 | 301.9 | % | |||||||||
| Operating loss | (21,919 | ) | (13.8 | )% | (404,290 | ) | (316.1 | )% | |||||||
| Financial expenses, net | (634 | ) | (0.4 | )% | (167 | ) | (0.1 | )% | |||||||
| Loss before income taxes | (22,553 | ) | (14.2 | )% | (404,457 | ) | (316.2 | )% | |||||||
| Income tax benefit | 699 | 0.4 | % | 343 | 0.3 | % | |||||||||
| Share in profit (loss) of associated companies | 3,778 | 2.4 | % | (952 | ) | (0.7 | )% | ||||||||
| Net loss attributable to non-controlling interests | - | 0.0 | % | (4 | ) | 0.0 | % | ||||||||
| Net loss attributable to Stratasys Ltd. | (18,076 | ) | (11.4 | )% | (405,062 | ) | (316.7 | )% | |||||||
Discussion of Results of Operations
Revenues
Our products and services revenues in the three months ended September 30, 2021 and 2020, as well as the percentage change reflected thereby, were as follows:
| Three Months Ended September 30, | |||||||||||||||
| 2021 | 2020 | % Change | |||||||||||||
| U.S. $ in thousands | |||||||||||||||
| Products | $ | 108,888 | $ | 83,548 | 30.3 | % | |||||||||
| Services | 50,121 | 44,344 | 13.0 | % | |||||||||||
| $ | 159,009 | $ | 127,892 | 24.3 | % | ||||||||||
Products Revenues
Revenues derived from products (including AM systems and consumable materials) increased by $25.3 million, or 30.3%, for the three months ended September 30, 2021, as compared to the three months ended September 30, 2020.
System revenues for the three months ended September 30, 2021 increased by 34.7% as compared to the three months ended September 30, 2020. Consumables revenues for the three months ended September 30, 2021 increased by 26.6% as compared to the three months ended September 30, 2020.
Services Revenues
Services revenues (including SDM, maintenance contracts, time and materials and other services) increased by $5.8 million for the three months ended September 30, 2021, or 13%, as compared to the three months ended September 30, 2020. Within services revenues, customer support revenue, which includes revenue generated mainly by maintenance contracts on our systems, increased by 7.2%.
Revenues by Region
Revenues and the percentage of revenues by region for the three months ended September 30, 2021 and 2020, as well as the percentage change in revenues in each such region reflected thereby, were as follows:
| Three Months Ended September 30, | ||||||||||||||||||||
| 2021 | 2020 | % Change | ||||||||||||||||||
| U.S.$ in thousands | % of Revenues | U.S.$ in thousands | % of Revenues | |||||||||||||||||
| Americas* | $ | 103,572 | 65.2 | % | $ | 86,597 | 67.7 | % | 19.6 | % | ||||||||||
| EMEA | 34,061 | 21.4 | % | 23,248 | 18.2 | % | 46.5 | % | ||||||||||||
| Asia Pacific | 21,376 | 13.4 | % | 18,047 | 14.1 | % | 18.4 | % | ||||||||||||
| $ | 159,009 | 100.0 | % | $ | 127,892 | 100.0 | % | 24.3 | % | |||||||||||
* Represent the United States, Canada and Latin America
Revenues in the Americas region increased by $17.0 million, or 19.6%, to $103.6 million for the three months ended September 30, 2021, compared to $86.6 million for the three months ended September 30, 2020. The increase reflects recovery from COVID-19 for both product revenue and service revenue.
Revenues in the EMEA region increased by $10.8 million, or 46.5%, to $34.1 million for the three months ended September 30, 2021, compared to $23.2 million for the three months ended September 30, 2020. The increase reflects recovery from COVID-19 for both product and service revenue as well as revenue from the RPS acquisition in early 2021. On a constant currency basis when using the prior period’s exchange rates, revenues increased by $10.3 million, or 44.2%.
Revenues in the Asia Pacific region increased by $3.3 million, or 18.4%, to $21.4 million for the three months ended September 30, 2021, compared to $18 million for the three months ended September 30, 2020. The increase was primarily driven by higher products revenues and reflects recovery from COVID-19.
Gross Profit
Gross profit from our products and services, as well as the percentage change reflected thereby, was as follows:
| Three Months Ended September 30, | ||||||||||||
| 2021 | 2020 | |||||||||||
| U.S. $ in thousands | Change in % | |||||||||||
| Gross profit attributable to: | ||||||||||||
| Products | $ | 54,068 | $ | 36,209 | 49.3 | % | ||||||
| Services | 14,120 | 13,560 | 4.1 | % | ||||||||
| $ | 68,188 | $ | 49,769 | 37.0 | % | |||||||
Gross profit as a percentage of revenues from our products and services was as follows:
| Three Months Ended September 30, | ||||||||
| 2021 | 2020 | |||||||
| Gross profit as a percentage of revenues from: | ||||||||
| Products | 49.7 | % | 43.3 | % | ||||
| Services | 28.2 | % | 30.6 | % | ||||
| Total gross profit | 42.9 | % | 38.9 | % | ||||
Gross profit attributable to products revenues increased by $17.9 million, or 49.3%, to $54.1 million for the three months ended September 30, 2021, compared to gross profit of $36.2 million for the three months ended September 30, 2020. Gross profit attributable to products revenues as a percentage of products revenues increased to 49.7% for the three months ended September 30, 2021, compared to 43.3% for the three months ended September 30, 2020. Our gross profit from products revenues was favorably impacted by the mix of revenue sources driven by an increase of hardware and consumables, partially offset by increased global cost pressures that included both logistics and raw materials and ramp-up production costs for new product introductions.
Gross profit attributable to services revenues increased by $0.6 million, or 4.1%, to $14.1 million for the three months ended September 30, 2021, compared to $13.6 million for the three months ended September 30, 2020, reflecting a recovery from COVID-19. Gross profit attributable to services revenues as a percentage of services revenues in the three months ended September 30, 2021 decreased to 28.2%, as compared to 30.6% for the three months ended September 30, 2020. Services costs were up primarily due to the return to a five-day workweek, post-COVID expenses as the market started opening up, and recent acquisitions (Origin and RPS).
Operating Expenses
The amount of each type of operating expense for the three months ended September 30, 2021 and 2020, as well as the percentage change reflected thereby, and total operating expenses as a percentage of our total revenues in each such quarter, were as follows:
| Three Months Ended September 30, | ||||||||||||
| 2021 | 2020 | % Change | ||||||||||
| U.S. $ in thousands | ||||||||||||
| Research and development, net | $ | 22,645 | $ | 19,562 | 15.8 | % | ||||||
| Selling, general and administrative | 67,462 | 48,343 | 39.5 | % | ||||||||
| Goodwill impairment | - | 386,154 | (100.0 | )% | ||||||||
| $ | 90,107 | $ | 454,059 | (80.2 | )% | |||||||
| Percentage of revenues | 56.7 | % | 355.0 | % | ||||||||
Research and development expenses, net increased by $3.1 million, or 15.8%, to $22.6 million for the three months ended September 30, 2021, compared to $19.6 million for the three months ended September 30, 2020. The amount of research and development expenses constituted 14.2% of our revenues for the three months ended September 30, 2021, as compared to 15.3% for the three months ended September 30, 2020, a non-material change.
Our research and development expenses were impacted by the timing of project spending and product launches, based on our portfolio management. We continue to invest in strategic long-term initiatives that include advancements in our core FDM and PolyJet technologies and in our new photopolymer-based P3 technology, advanced composite materials, software and development of new applications which will enhance our current solutions offerings.
Selling, general and administrative expenses increased by $19.1 million, or 39.5%, to $67.5 million for the three months ended September 30, 2021, compared to $48.3 million for the three months ended September 30, 2020, driven by the increase in operating activities, the return to a five-day workweek, commissions and travel expenses.
Operating Loss
Operating loss and operating loss as a percentage of our total revenues were as follows:
| Three Months Ended September 30, | |||||||||
| 2021 | 2020 | ||||||||
| U.S. $ in thousands | |||||||||
| Operating loss | $ | (21,919 | ) | $ | (404,290 | ) | |||
| Percentage of revenues | (13.8 | )% | (316.1 | )% | |||||
Operating loss amounted to $21.9 million for the three months ended September 30, 2021, compared to an operating loss of $404.3 million for the three months ended September 30, 2020. The decrease in operating loss was primarily attributable to the goodwill impairment in the third quarter of 2020, partly offset by increased operating expenses, as discussed above.
Financial Expenses, net
Financial expenses, net, which was primarily comprised of foreign currencies effects, interest income and interest expenses, was $0.6 million for the three months ended September 30, 2021, compared to financial expenses, net of $0.2 million for the three months ended September 30, 2020.
Income Taxes
Income taxes and income taxes as a percentage of net loss before taxes, as well as the percentage change in each, year over year, reflected thereby, were as follows:
| Three Months Ended September 30, | |||||||||||||
| 2021 | 2020 | ||||||||||||
| U.S. $ in thousands | Change in % | ||||||||||||
| Income tax benefit | $ | 699 | $ | 343 | 103.8 | % | |||||||
| As a percent of loss before income taxes | 3.1 | % | 0.1 | % | 3,554.7 | % | |||||||
We had an effective tax rate of 3.1% for the three-month period ended September 30, 2021, compared to an effective tax rate of 0.1% for the three-month period ended September 30, 2020. Our effective tax rate was primarily impacted by different geographic mixes of earnings and losses, and valuation allowance on losses of our US subsidiaries.
Share in Profit (loss) of Associated Companies
Share in profit of associated companies reflects our proportionate share of the profits of unconsolidated entities accounted for by using the equity method of accounting. During the three months ended September 30, 2021, the profit from our proportionate share of the losses of our equity method investments was $3.8 million, compared to a loss of $1.0 million in the three months ended September 30, 2020.
Net Loss Attributable to Stratasys Ltd. and Net Loss Per Share
Net loss attributable to Stratasys Ltd., and net loss per share were as follows:
| Three Months Ended September 30, | ||||||||
| 2021 | 2020 | |||||||
| U.S. $ in thousands | ||||||||
| Net loss attributable to Stratasys Ltd. | $ | (18,076 | ) | $ | (405,062 | ) | ||
| Percentage of revenues | (11.4 | )% | (316.7 | )% | ||||
| Basic and diluted net loss per share | $ | (0.28 | ) | $ | (7.35 | ) | ||
Net loss attributable to Stratasys Ltd. was $18.1 million for the three months ended September 30, 2021 compared to net loss of $405.1 million for the three months ended September 30, 2020. The decrease in the net loss attributable to Stratasys Ltd. was primarily attributable to the goodwill impairment in the third quarter of 2020, as described above.
Net loss per share was $0.28 for the three months ended September 30, 2021 as compared to net loss per share of $7.35 for the three months ended September 30, 2020. The weighted average fully diluted share count was 65.0 million during the three months ended September 30, 2021, compared to 55.1 million during the three months ended September 30, 2020, which increase reflected the issuance of shares in our follow-on offering that was consummated in March 2021.
Results of Operations
Comparison of Nine Months Ended September 30, 2021, to Nine Months Ended September 30, 2020
The following table sets forth certain statement of operations data for the periods indicated:
| Nine Months Ended September 30, | |||||||||||||||
| 2021 | 2020 | ||||||||||||||
| U.S. $ in thousands | % of Revenues | U.S. $ in thousands | % of Revenues | ||||||||||||
| Revenues | $ | 440,203 | 100.0 | % | $ | 378,422 | 100.0 | % | |||||||
| Cost of revenues | 253,168 | 57.5 | % | 225,047 | 59.5 | % | |||||||||
| Gross profit | 187,035 | 42.5 | % | 153,375 | 40.5 | % | |||||||||
| Research and development, net | 65,683 | 14.9 | % | 65,059 | 17.2 | % | |||||||||
| Selling, general and administrative | 184,353 | 41.9 | % | 155,630 | 41.1 | % | |||||||||
| Goodwill impairment | - | 0.0 | % | 386,154 | 102.0 | % | |||||||||
| Operating loss | (63,001 | ) | (14.3 | )% | (453,468 | ) | (119.8 | )% | |||||||
| Financial expenses, net | (1,383 | ) | (0.3 | )% | (847 | ) | (0.2 | )% | |||||||
| Loss before income taxes | (64,384 | ) | (14.6 | )% | (454,315 | ) | (120.1 | )% | |||||||
| Income tax benefit | 6,009 | 1.4 | % | 2,250 | 0.6 | % | |||||||||
| Share in profit (loss) of associated companies | 1,229 | 0.3 | % | (2,740 | ) | (0.7 | )% | ||||||||
| Net loss attributable to non-controlling interests | - | 0.0 | % | (54 | ) | 0.0 | % | ||||||||
| Net loss attributable to Stratasys Ltd. | (57,146 | ) | (13.0 | )% | (454,751 | ) | (120.2 | )% | |||||||
Discussion of Results of Operations
Revenues
Our products and services revenues in the nine months ended September 30, 2021 and 2020, as well as the percentage change reflected thereby, were as follows:
| Nine Months Ended September 30, | ||||||||||||
| 2021 | 2020 | % Change | ||||||||||
| U.S. $ in thousands | ||||||||||||
| Products | $ | 299,517 | $ | 240,597 | 24.5 | % | ||||||
| Services | 140,686 | 137,825 | 2.1 | % | ||||||||
| $ | 440,203 | $ | 378,422 | 16.3 | % | |||||||
Products Revenues
Revenues derived from products (including AM systems and consumable materials) increased by $58.9 million, or 24.5%, for the nine months ended September 30, 2021, as compared to the nine months ended September 30, 2020.
Systems revenues for the nine months ended September 30, 2021 increased by 35.5% as compared to the nine months ended September 30, 2020. Consumables revenues for the nine months ended September 30, 2021 increased by 16.5%% as compared to the nine months ended September 30, 2020.
The increase reflects recovery from COVID-19 for products revenue as well as revenue from RPS, which we acquired in early 2021.
Services Revenues
Services revenues (including SDM, maintenance contracts, time and materials and other services) increased by $2.9 million for the nine months ended September 30, 2021, or 2.1%, as compared to the nine months ended September 30, 2020.
Revenues by Region
Revenues and the percentage of revenues by region for the nine months ended September 30, 2021 and 2020, as well as the percentage change in revenues in each such region reflected thereby, were as follows:
| Nine Months Ended September 30, | ||||||||||||||||||||
| 2021 | 2020 | % Change | ||||||||||||||||||
| U.S.$ in thousands | % of Revenues | U.S.$ in thousands | % of Revenues | |||||||||||||||||
| Americas* | $ | 278,634 | 63.3 | % | $ | 251,871 | 66.5 | % | 10.6 | % | ||||||||||
| EMEA | 95,502 | 21.7 | % | 71,083 | 18.8 | % | 34.4 | % | ||||||||||||
| Asia Pacific | 66,067 | 15.0 | % | 55,468 | 14.7 | % | 19.1 | % | ||||||||||||
| $ | 440,203 | 100.0 | % | $ | 378,422 | 100.0 | % | 16.3 | % | |||||||||||
* Consists of United States, Canada and Latin America
Revenues in the Americas region increased by $26.8 million, or 10.6%, to $278.6 million for the nine months ended September 30, 2021, compared to $251.9 million for the nine months ended September 30, 2020.
Revenues in the EMEA region increased by $24.4 million, or 34.4%, to $95.5 million for the nine months ended September 30, 2021, compared to $71.1 million for the nine months ended September 30, 2020.
Revenues in the Asia Pacific region increased by $10.6 million, or 19.1%, to $66.1 million for the nine months ended September 30, 2021, compared to $55.5 million for the nine months ended September 30, 2020.
Gross Profit
Gross profit from our products and services, as well as the percentage change reflected thereby, were as follows:
| Nine Months Ended September 30, | ||||||||||||
| 2021 | 2020 | |||||||||||
| U.S. $ in thousands | Change in % | |||||||||||
| Gross profit attributable to: | ||||||||||||
| Products | $ | 148,046 | $ | 114,041 | 29.8 | % | ||||||
| Services | 38,989 | 39,334 | (0.9 | ) % | ||||||||
| $ | 187,035 | $ | 153,375 | 21.9 | % | |||||||
Gross profit as a percentage of revenues from our products and services was as follows:
| Nine Months Ended September 30, | ||||||||
| 2021 | 2020 | |||||||
| Gross profit as a percentage of revenues from: | ||||||||
| Products | 49.4 | % | 47.4 | % | ||||
| Services | 27.7 | % | 28.5 | % | ||||
| Total gross profit | 42.5 | % | 40.5 | % | ||||
Gross profit attributable to products revenues increased by $34 million, or 29.8%, to $148.0 million for the nine months ended September 30, 2021, compared to gross profit of $114.0 million for the nine months ended September 30, 2020. Gross profit attributable to products revenues as a percentage of products revenues increased to 49.4% for the nine months ended September 30, 2021, compared to 47.4% for the nine months ended September 30, 2020.
Gross profit attributable to services revenues decreased by $0.3 million, or 0.9%, to $39.0 million for the nine months ended September 30, 2021, compared to $39.3 million for the nine months ended September 30, 2020. Gross profit attributable to services revenues as a percentage of services revenues in the nine months ended September 30, 2021 decreased to 27.7%, as compared to 28.5% for the nine months ended September 30, 2020.
Operating Expenses
The amount of each type of operating expense for the nine months ended September 30, 2021 and 2020 as well as the percentage change reflected thereby, and total operating expenses as a percentage of our total revenues in each such quarter, were as follows:
| Nine Months Ended September 30, | ||||||||||||
| 2021 | 2020 | % Change | ||||||||||
| U.S. $ in thousands | ||||||||||||
| Research and development, net | $ | 65,683 | $ | 65,059 | 1.0 | % | ||||||
| Selling, general and administrative | 184,353 | 155,630 | 18.5 | % | ||||||||
| Goodwill impairment | $ | - | $ | 386,154 | (100.0 | )% | ||||||
| $ | 250,036 | $ | 606,843 | (58.8 | )% | |||||||
| Percentage of revenues | 56.8 | % | 160.4 | % | ||||||||
Research and development expenses, net increased by $0.6 million, or 1.0%, to $65.7 million for the nine months ended September 30, 2021, compared to $65.1 million for the nine months ended September 30, 2020. The amount of research and development expenses constituted 14.9% of our revenues for the nine months ended September 30, 2021, as compared to 17.2% for the nine months ended September 30, 2020.
Selling, general and administrative expenses increased by $28.7 million, or 18.5%, to $184.4 million for the nine months ended September 30, 2021, compared to $155.6 million for the nine months ended September 30, 2020. The amount of selling, general and administrative expenses constituted 41.9% of our revenues for the nine months ended September30, 2021, as compared to 41.1% for the nine months ended September 30, 2020.
Goodwill impairment was $386.2 million in the nine months ended September 30, 2020, reflecting the Stratasys-Objet reporting unit impairment charge recorded during the third quarter of 2020.
Operating Loss
Operating loss and operating loss as a percentage of our total revenues were as follows:
| Nine Months Ended September 30, | |||||||||
| 2021 | 2020 | ||||||||
| U.S. $ in thousands | |||||||||
| Operating loss | $ | (63,001 | ) | $ | (453,468 | ) | |||
| Percentage of revenues | (14.3 | )% | (119.8 | )% | |||||
Operating loss amounted to $63.0 million for the nine months ended September 30, 2021, compared to an operating loss of $453.5 million for the nine months ended September 30, 2020.
Financial Expenses, net
Financial expenses, net, which were primarily comprised of foreign currencies effects, interest income and interest expenses, were $1.4 million for the nine months ended September 30, 2021 and $0.8 million for the nine months ended 30 September, 2020.
Income Taxes
Income taxes and income taxes as a percentage of net loss before taxes, as well as the percentage change in each, year over year, reflected thereby, were as follows:
| Nine Months Ended September 30, | |||||||||||||
| 2021 | 2020 | ||||||||||||
| U.S. $ in thousands | Change in % | ||||||||||||
| Income tax benefit | $ | 6,009 | $ | 2,250 | 167.1 | % | |||||||
| As a percent of loss before income taxes | 9.3 | % | 0.5 | % | 1,784.5 | % | |||||||
We had an effective tax rate of 9.3% for the nine-month period ended September 30, 2021, compared to an effective tax rate of 0.5% for the nine-month period ended September 30, 2020.
Our effective tax rate was primarily impacted by our transition during the second quarter of 2021 to the new Israeli tax regime of “Preferred Technology Enterprise”, under which we are subject to a 12% tax rate, as well as different geographic mixes of earnings and losses, and valuation allowance on losses of our US subsidiaries.
Share in Profit (loss) of Associated Companies
Share in profit of associated companies reflects our proportionate share of the profits of unconsolidated entities accounted for by using the equity method of accounting. During the nine months ended September 30, 2021, the profit from our proportionate share of the earnings of our equity method investments was $1.2 million, compared to a loss of $2.7 million in the nine months ended September 30, 2020.
Net Loss Attributable to Stratasys Ltd. and Net Loss Per Share
Net loss attributable to Stratasys Ltd., and net loss per share were as follows:
| Nine Months Ended September 30, | ||||||||
| 2021 | 2020 | |||||||
| U.S. $ in thousands | ||||||||
| Net loss attributable to Stratasys Ltd. | $ | (57,146 | ) | $ | (454,751 | ) | ||
| Percentage of revenues | (13.0 | )% | (120.2 | )% | ||||
| Basic and diluted net loss per share | $ | (0.91 | ) | $ | (8.29 | ) | ||
Net loss attributable to Stratasys Ltd. was $57.1 million for the nine months ended September 30, 2021 compared to a net loss of $454.8 million for the nine months ended September 30, 2020.
Net loss per share was $0.91 and $8.29 for the nine months ended September 30, 2021 and 2020, respectively. The weighted average fully diluted share count was 62.9 million for the nine months ended September 30, 2021, compared to 54.9 million for the nine months ended September 30, 2020, which increase reflected the issuance of shares in our follow-on offering that was consummated in March 2021.
The following non-GAAP data, which excludes certain items as described below, are non-GAAP financial measures. Our management believes that these non-GAAP financial measures are useful information for investors and shareholders of our company in gauging our results of operations (i) on an ongoing basis after excluding mergers, acquisitions and divestments related expense or gains and restructuring-related charges or gains, legal provisions and (ii) excluding non-cash items such as stock-based compensation expenses, acquired intangible assets amortization, including intangible assets amortization related to equity method investments, impairment of long-lived assets and goodwill, revaluation of our investments and the corresponding tax effect of those items. These non-GAAP adjustments either do not reflect actual cash outlays that impact our liquidity and our financial condition or have a non-recurring impact on the statement of operations, as assessed by management. These non-GAAP financial measures are presented to permit investors to more fully understand how management assesses our performance for internal planning and forecasting purposes. The limitations of using these non-GAAP financial measures as performance measures are that they provide a view of our results of operations without including all items indicated above during a period, which may not provide a comparable view of our performance to other companies in our industry. Investors and other readers should consider non-GAAP measures only as supplements to, not as substitutes for or as superior measures to, the measures of financial performance prepared in accordance with GAAP. Reconciliation between results on a GAAP and non-GAAP basis is provided in a table below.
Reconciliation of GAAP to Non-GAAP Results of Operations
The following tables present the GAAP measures, the corresponding non-GAAP amounts and the related non-GAAP adjustments for the applicable periods:
| Three Months Ended September 30, | ||||||||||||||||||||||||
| 2021 | Non-GAAP | 2021 | 2020 | Non-GAAP | 2020 | |||||||||||||||||||
| GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | |||||||||||||||||||
| U.S. dollars and shares in thousands (except per share amounts) | ||||||||||||||||||||||||
| Gross profit (1) | $68,188 | $8,507 | $76,695 | $49,769 | $10,036 | $59,805 | ||||||||||||||||||
| Operating income (loss) (1,2) | (21,919 | ) | 23,739 | 1,820 | (404,290 | ) | 403,268 | (1,022 | ) | |||||||||||||||
| Net income (loss) attributable to Stratasys Ltd. (1,2,3) | (18,076 | ) | 18,592 | 516 | (405,062 | ) | 402,050 | (3,012 | ) | |||||||||||||||
| Net income (loss) per diluted share attributable to Stratasys Ltd. (4) | $ | (0.28 | ) | $ | 0.28 | $ | 0.01 | $ | (7.35 | ) | $ | 7.30 | $ | (0.05 | ) | |||||||||
| (1) | Acquired intangible assets amortization expense | 5,495 | 4,065 | |||||||||||||||||||||
| Non-cash stock-based compensation expense | 804 | 524 | ||||||||||||||||||||||
| Restructuring and other related costs | 67 | 191 | ||||||||||||||||||||||
| Impairment charges | 2,141 | 5,256 | ||||||||||||||||||||||
| 8,507 | 10,036 | |||||||||||||||||||||||
| (2) | Acquired intangible assets amortization expense | 2,205 | 2,162 | |||||||||||||||||||||
| Non-cash stock-based compensation expense | 7,154 | 4,352 | ||||||||||||||||||||||
| Goodwill impairment | - | 386,154 | ||||||||||||||||||||||
| Impairment of long-lived assets | 1,242 | - | ||||||||||||||||||||||
| Restructuring and other related costs | 210 | 34 | ||||||||||||||||||||||
| Revaluation of investments | 2,025 | - | ||||||||||||||||||||||
| Contingent consideration | 197 | - | ||||||||||||||||||||||
| Legal and other expenses | 2,199 | 530 | ||||||||||||||||||||||
| 15,232 | 393,232 | |||||||||||||||||||||||
| 23,739 | 403,268 | |||||||||||||||||||||||
| (3) | Corresponding tax effect | (376 | ) | (1,296 | ) | |||||||||||||||||||
| Equity method related amortization, divestments and impairments | (4,771 | ) | 78 | |||||||||||||||||||||
| $ | 18,592 | $ | 402,050 | |||||||||||||||||||||
| (4) | Weighted average number of ordinary shares outstanding- Diluted | 65,018 | 65,950 | 55,086 | 55,086 | |||||||||||||||||||
| Nine Months Ended September 30, | ||||||||||||||||||||||||
| 2021 | Non-GAAP | 2021 | 2020 | Non-GAAP | 2020 | |||||||||||||||||||
| GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | |||||||||||||||||||
| U.S. dollars and shares in thousands (except per share amounts) | ||||||||||||||||||||||||
| Gross profit (1) | $ | 187,035 | $ | 22,192 | $ | 209,227 | $ | 153,375 | $ | 24,062 | $ | 177,437 | ||||||||||||
| Operating income (loss) (1,2) | (63,001 | ) | 59,657 | (3,344 | ) | (453,468 | ) | 435,987 | (17,481 | ) | ||||||||||||||
| Net income (loss) attributable to Stratasys Ltd. (1,2,3) | (57,146 | ) | 52,284 | (4,862 | ) | (454,751 | ) | 433,821 | (20,930 | ) | ||||||||||||||
| Net income (loss) per diluted share attributable to Stratasys Ltd. (4) | $ | (0.91 | ) | $ | 0.83 | $ | (0.08 | ) | $ | (8.29 | ) | $ | 7.91 | $ | (0.38 | ) | ||||||||
| (1) | Acquired intangible assets amortization expense | 16,368 | 12,196 | |||||||||||||||||||||
| Non-cash stock-based compensation expense | 2,226 | 1,424 | ||||||||||||||||||||||
| Restructuring and other related costs | 1,457 | 5,187 | ||||||||||||||||||||||
| Impairment charges | 2,141 | 5,256 | ||||||||||||||||||||||
| 22,192 | 24,062 | |||||||||||||||||||||||
| (2) | Acquired intangible assets amortization expense | 6,598 | 6,430 | |||||||||||||||||||||
| Non-cash stock-based compensation expense | 20,914 | 14,470 | ||||||||||||||||||||||
| Goodwill impairment | - | 386,154 | ||||||||||||||||||||||
| Impairment of long-lived assets | 2,664 | |||||||||||||||||||||||
| Restructuring and other related costs | 2,370 | 3,863 | ||||||||||||||||||||||
| Revaluation of investments | 556 | - | ||||||||||||||||||||||
| Contingent consideration | 590 | - | ||||||||||||||||||||||
| Legal and other expenses | 3,773 | 1,007 | ||||||||||||||||||||||
| 37,465 | 411,925 | |||||||||||||||||||||||
| 59,657 | 435,987 | |||||||||||||||||||||||
| (3) | Corresponding tax effect | (2,770 | ) | (2,396 | ) | |||||||||||||||||||
| Equity method related amortization, divestments and impairments | (4,603 | ) | 230 | |||||||||||||||||||||
| $ | 52,284 | $ | 433,821 | |||||||||||||||||||||
| (4) | Weighted average number of ordinary shares outstanding- Diluted | 62,888 | 62,888 | 54,851 | 54,851 | |||||||||||||||||||
Liquidity and Capital Resources
A summary of our statements of cash flows is as follows:
| Nine Months Ended September 30, | |||||||
| 2021 | 2020 | ||||||
| U.S $ in thousands | |||||||
| Net loss | $ | (57,146 | ) | $ | (454,805 | ) | |
| Goodwill impairment | - | 386,154 | |||||
| Impairment of other long-lived assets | 1,944 | 5,557 | |||||
| Depreciation and amortization | 41,412 | 37,428 | |||||
| Stock-based compensation | 23,140 | 15,894 | |||||
| Deferred income taxes | (9,054 | ) | (1,541 | ) | |||
| Other non-cash items, net | 3,957 | 212 | |||||
| Change in working capital and other items | 27,143 | 15,205 | |||||
| Net cash provided by operating activities | 31,396 | 4,104 | |||||
| Net cash used in investing activities | (191,166 | ) | (44,246 | ) | |||
| Net cash provided by financing activities | 222,955 | 53 | |||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (2,413 | ) | (484 | ) | |||
| Net change in cash, cash equivalents and restricted cash | 60,772 | (40,573 | ) | ||||
| Cash, cash equivalents and restricted cash, beginning of period | 272,216 | 293,597 | |||||
| Cash, cash equivalents and restricted cash, end of period | 332,988 | 253,024 | |||||
Our cash, cash equivalents and restricted cash balance increased to $333 million as of September 30, 2021 from $272.2 million as of December 31, 2020. The increase in cash, cash equivalents and restricted cash in the nine months ended September 30, 2021 was primarily due to the public offering of shares in a net amount of $218.9 million that we completed in March 2021, partially offset by investing activities.
Cash flows from operating activities
We generated $31.4 million of cash from operating activities during the nine months ended September 30, 2021. That cash generation reflects our $57.1 million net loss, as adjusted to eliminate non-cash charges included in net loss, including $41.4 million of depreciation and amortization and $23.1 million of share-based compensation expenses. Favorable changes in our working capital balances were mainly driven by a decrease in our inventory balances and an increase in our accounts payable balance.
Cash flows from investing activities
We used $191.2 million of cash in our investing activities during the nine months ended September 30, 2021. Cash was primarily used to invest $17.4 million to purchase property, equipment and intangibles and $160.0 million net was invested in short-term bank deposits. Our principal property and equipment purchases were for our new buildings complex under construction in Rehovot, Israel. The new facility in Rehovot, Israel, which will contain two buildings, houses our Israeli headquarters, research and development facilities and certain marketing activities. In addition, we used $6.7 million of cash for acquisitions, net of cash acquired.
Cash flows from financing activities
We generated $223.0 million of cash from financing activities during the nine months ended September 30, 2021. Our March 2021 follow-on public offering of shares generated proceeds, net of issuance costs of $218.9 million, and we generated an additional $3.7 million of proceeds from exercise of stock options.
Capital resources and capital expenditures
Our total current assets amounted to $797.6 million as of September 30, 2021, of which $520.0 million consisted of cash, cash equivalents, short-term deposits and restricted cash. Total current liabilities amounted to $172.8 million. Most of our cash and cash equivalents are held in banks in Israel and the U.S.
The credit risk related to our accounts receivable is limited due to the relatively large number of customers and their wide geographic distribution. In addition, we seek to reduce the credit exposure related to our accounts receivable by imposing credit limits, conducting ongoing credit evaluation, and by implementing account monitoring procedures, as well as credit insurance for many of our customers.
We believe that we will have adequate cash and cash equivalents to fund our ongoing operations and that these sources of liquidity will be sufficient to satisfy our capital expenditure and working capital needs for the next twelve months.
Critical Accounting Policies
We have prepared our consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America. This has required us to make estimates, judgments, and assumptions that affected the amounts we reported. Actual results may differ from those estimates. To facilitate the understanding of our business activities, certain accounting policies that are important to the presentation of our financial condition and results of operations and that require management’s subjective judgments are described in our 2020 Annual Report. We base our judgments on our experience and various assumptions that we believe to be reasonable under the circumstances.
Forward-Looking Statements and Factors That May Affect Future Results of Operations
Certain information included in or incorporated by reference into the Report of Foreign Private Issuer on Form 6-K to which this Operating and Financial Review is appended, or the Form 6-K, may be deemed to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. You can generally identify forward-looking statements as statements containing the words “may,” “will,” “could,” “should,” “expect,” “anticipate,” “intend,” “estimate,” “believe,” “project,” “plan,” “assume” or other similar expressions, or negatives of those expressions, although not all forward-looking statements contain these identifying words.
These forward-looking statements may include, but are not limited to, statements regarding our future strategy, future operations, projected financial position, proposed products, estimated future revenues, projected costs, future prospects, the future of our industry and results that might be obtained by pursuing management’s current plans and objectives.
You should not place undue reliance on our forward-looking statements because the matters they describe are subject to certain risks, uncertainties and assumptions that are difficult to predict. Our forward-looking statements are based on the information currently available to us and speak only as of the date of the Form 6-K. Over time, our actual results, performance or achievements may differ from those expressed or implied by our forward-looking statements, and such difference might be significant and materially adverse to our shareholders. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Important factors that could cause actual results, developments and business decisions to differ materially from those anticipated in these forward-looking statements include, among other things:
•
the extent of our success at introducing new or improved products and solutions that gain market share;
•
the extent of growth of the 3D printing market generally;
•
the duration and severity of the global COVID-19 pandemic, and the strength of recovery from it, which may continue to have significant consequences for our operations, financial position, cash flows, and those of our customers and suppliers;
•
changes in our overall strategy, including as related to any restructuring activities and our capital expenditures;
•
the impact of shifts in prices or margins of the products that we sell or services we provide;
•
the impact of competition and new technologies;
•
impairments of goodwill or other intangible assets in respect of companies that we acquire;
•
the extent of our success at efficiently and successfully integrating the operations of various companies that we have acquired or may acquire;
•
global market, political and economic conditions, and in the countries in which we operate in particular;
•
government regulations and approvals;
•
litigation and regulatory proceedings;
•
infringement of our intellectual property rights by others (including for replication and sale of consumables for use in our systems), or infringement of others’ intellectual property rights by us;
• the extent of our success at maintaining our liquidity and financing our operations and capital needs;
•
impact of tax regulations on our results of operations and financial conditions; and
•
those factors referred to in Item 3.D, “Key Information - Risk Factors”, Item 4, “Information on the Company”, and Item 5, “Operating and Financial Review and Prospects” in our 2020 Annual Report, as supplemented herein, as well as in other portions of the 2020 Annual Report
Readers are urged to carefully review and consider the various disclosures made throughout the Form 6-K, our 2020 Annual Report, and in our other reports filed with or furnished to the SEC, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Reference is made to Item 11, “Quantitative and Qualitative Disclosures about Market Risk” in our 2020 Annual Report.
LEGAL PROCEEDINGS
We are subject to various litigation and other legal proceedings from time to time. For a discussion of our litigation status, see Note 12-“Contingencies” in the notes to our unaudited condensed consolidated interim financial statements attached as Exhibit 99.1 to the Form 6-K.
RISK FACTORS
Document And Entity Information |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Document Information Line Items | |
| Entity Registrant Name | STRATASYS LTD. |
| Document Type | 6-K |
| Current Fiscal Year End Date | --12-31 |
| Amendment Flag | false |
| Entity Central Index Key | 0001517396 |
| Document Period End Date | Sep. 30, 2021 |
| Document Fiscal Year Focus | 2021 |
| Document Fiscal Period Focus | Q3 |
| Entity Address, Address Line One | 1 Holtzman Street |
| Entity Address, Address Line Three | P.O. Box 2496 |
| Entity Address, Address Line Two | Science Park |
| Entity Address, City or Town | Rehovot |
| Entity Address, Country | IL |
| Entity Address, Postal Zip Code | 76124 |
| Entity File Number | 001-35751 |
Consolidated Balance Sheets (Unaudited) (Parentheticals) shares in Thousands |
Sep. 30, 2021
USD ($)
shares
|
Sep. 30, 2021
₪ / shares
|
Dec. 31, 2020
USD ($)
shares
|
Dec. 31, 2020
₪ / shares
|
|---|---|---|---|---|
| Statement of Financial Position [Abstract] | ||||
| Accounts receivable, net of allowance for credit losses (in Dollars) | $ | $ 700 | $ 900 | ||
| Ordinary shares, par value (in New Shekels per share) | ₪ / shares | ₪ 0.01 | ₪ 0.01 | ||
| Ordinary shares, authorized | 180,000 | 180,000 | ||
| Ordinary shares, issued | 65,467 | 56,617 | ||
| Ordinary shares, outstanding | 65,467 | 56,617 |
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
| Revenues | ||||
| Revenues | $ 159,009 | $ 127,892 | $ 440,203 | $ 378,422 |
| Cost of revenues | ||||
| Cost of revenues | 90,821 | 78,123 | 253,168 | 225,047 |
| Gross profit | 68,188 | 49,769 | 187,035 | 153,375 |
| Operating expenses | ||||
| Research and development, net | 22,645 | 19,562 | 65,683 | 65,059 |
| Selling, general and administrative | 67,462 | 48,343 | 184,353 | 155,630 |
| Goodwill impairment | 386,154 | 386,154 | ||
| Total operating expenses | 90,107 | 454,059 | 250,036 | 606,843 |
| Operating loss | (21,919) | (404,290) | (63,001) | (453,468) |
| Financial expenses, net | (634) | (167) | (1,383) | (847) |
| Loss before income taxes | (22,553) | (404,457) | (64,384) | (454,315) |
| Income tax benefit | 699 | 343 | 6,009 | 2,250 |
| Share in profit (loss) of associated companies | 3,778 | (952) | 1,229 | (2,740) |
| Net loss | (18,076) | (405,066) | (57,146) | (454,805) |
| Net loss attributable to non-controlling interests | (4) | (54) | ||
| Net loss attributable to Stratasys Ltd. | $ (18,076) | $ (405,062) | $ (57,146) | $ (454,751) |
| Net loss per ordinary share attributable to Stratasys Ltd. - basic and diluted (in Dollars per share) | $ (0.28) | $ (7.35) | $ (0.91) | $ (8.29) |
| Weighted average ordinary shares outstanding. - basic and diluted (in Shares) | 65,018 | 55,086 | 62,888 | 54,851 |
| Comprehensive loss | ||||
| Net loss | $ (18,076) | $ (405,066) | $ (57,146) | $ (454,805) |
| Other comprehensive income (loss), net of tax: | ||||
| Foreign currency translation adjustments | (2,247) | 1,056 | (2,105) | (611) |
| Unrealized gains (losses) on derivatives designated as cash flow hedges | 578 | (1,851) | 2,579 | (962) |
| Other comprehensive income (loss), net of tax | (1,669) | (795) | 474 | (1,573) |
| Comprehensive loss | (19,745) | (405,861) | (56,672) | (456,378) |
| Less: comprehensive loss attributable to non-controlling interests | (4) | (54) | ||
| Comprehensive loss attributable to Stratasys Ltd. | (19,745) | (405,857) | (56,672) | (456,324) |
| Products | ||||
| Revenues | ||||
| Revenues | 108,888 | 83,548 | 299,517 | 240,597 |
| Cost of revenues | ||||
| Cost of revenues | 54,820 | 47,339 | 151,471 | 126,556 |
| Services | ||||
| Revenues | ||||
| Revenues | 50,121 | 44,344 | 140,686 | 137,825 |
| Cost of revenues | ||||
| Cost of revenues | $ 36,001 | $ 30,784 | $ 101,697 | $ 98,491 |
Business Description and Basis of Presentation |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
| Business Description and Basis of Presentation | Note 1. Business Description and Basis of Presentation
Stratasys Ltd. (collectively with its
subsidiaries, the “Company” or “Stratasys”) is a global leader in connected,
polymer-based 3D printing solutions, across the entire manufacturing value
chain. The Company leverages its competitive advantages, which include a broad
set of best-in-class 3D printing platforms, software, a materials and
technology partner ecosystem, innovative leadership, and global GTM
infrastructure, in order to position itself to capture share in a significant
and growing global marketplace, with a focus on manufacturing. The Company’s approximately 1,600 granted and
pending additive technology patents to date have been used to create models,
prototypes, manufacturing tools, and production parts for a multitude of
industries including aerospace, automotive, transportation, healthcare, consumer
products, dental, medical, and education. Stratasys’ products and comprehensive
solutions improve product quality, development time, cost, and time-to-market. The
Company’s 3D ecosystem of solutions and expertise includes 3D printers,
materials, software, expert services, and on-demand parts production. The condensed consolidated interim financial information herein is unaudited; however, such information reflects all adjustments (consisting of normal, recurring adjustments), which are, in the opinion of management, necessary for a fair statement of results for the interim period. The condensed consolidated interim financial statements include the accounts of Stratasys Ltd. and its subsidiaries. All intercompany accounts and transactions, including profits from intercompany sales not yet realized outside the Company, have been eliminated in consolidation. The Company's financial statements are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”), which requires the Company to make estimates based on assumptions about current and, for some estimates, future economic and market conditions which affect reported amounts and related disclosures in its financial statements. Although the Company current estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could differ from the Company expectations, which could materially affect its results of operations and financial position. In particular, a number of estimates have been and will continue to be affected by the ongoing COVID-19 pandemic. The severity, magnitude and duration of, and recovery from, as well as the economic consequences of, the COVID-19 pandemic, remain uncertain, rapidly changing and difficult to predict. As a result, the accounting estimates and assumptions may change over time in response to COVID-19. Such changes could have an additional impact on the Company’s long-lived asset and intangible asset valuation; inventory valuation; assessment of the annual effective tax rate; and the allowance for expected credit losses and bad debt. The results of operations for the three and nine months ended September 30, 2021 are not indicative of results that could be expected for the entire fiscal year. Certain financial information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. The reader is referred to the audited consolidated financial statements and notes thereto for the year ended December 31, 2020, filed with the U.S. Securities and Exchange Commission (the “SEC”) as part of the Company’s Annual Report on Form 20-F for such year on March 1, 2021. |
New Accounting Pronouncements |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Accounting Standards Update and Change in Accounting Principle [Abstract] | |
| New Accounting Pronouncements | Note 2. New Accounting Pronouncements Accounting Pronouncements Adopted in 2021 In December 2019, the FASB issued new guidance to simplify the accounting for income taxes by removing certain exceptions to the general principles and simplification of areas such as franchise taxes, step-up in tax basis goodwill, separate entity financial statements and interim recognition of enactment of tax laws or rate changes The guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company adopted this guidance effective January 1, 2021, with no material impact on its consolidated financial statements. |
Certain Transactions |
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| Certain Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Certain Transactions | Note 3. Certain Transactions Origin acquisition On December 31, 2020 (the “Origin transaction date”) the Company acquired 3D printing start-up Origin Laboratories Inc.
(“Origin”) for an aggregate purchase price of $97.1 million (the “Origin transaction”), including cash and shares. The acquisition enables
Stratasys to expand its leadership through innovation in the fast-growing mass production parts market with a next-generation photopolymer platform. Stratasys expects Origin’s proprietary Programmable PhotoPolymerization (P3) technology to be an important
growth engine for the Company. The acquisition was aimed at fortifying the Company's leadership in polymers and production applications of 3D
printing in industries such as dental, medical, tooling, and select industrial, defense, and consumer goods markets. In exchange for 100% of the outstanding shares of Origin the Company issued 1,488 thousand ordinary shares, paid cash upon
closing, and is obligated to pay additional payments (combination of cash and shares) subject to performance-based earn-outs over 3
years. The Origin transaction is reflected in accordance with ASC Topic 805, “Business Combinations”, using the acquisition method of
accounting with the Company as the acquirer.
The following table summarizes the fair value of the consideration transferred to Origin stockholders for the Origin transaction:
The fair value of the ordinary shares issued was determined based on the closing market price of the Company’s ordinary shares on
the Origin transaction date. In accordance with ASC Topic 805, the estimated contingent consideration as of the Origin transaction date was included in the
purchase price. The total contingent payments could reach to a maximum aggregate amount of up to $40 million. Approximately 50%
of the payments shall be settled in cash, and 50% shall be settled through the issuance of ordinary shares. The estimated fair value of
the contingent consideration is based on management’s assessment of whether, and at what level, the financial metrics will be
achieved, and the present value factors associated with the timing of the payments. This fair value measurement is based on significant
unobservable inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy. Changes in the fair value
of contingent consideration will be recorded in Consolidated Statements of Operations and Comprehensive Loss. Refer to note 9. An additional payment of $6 million, which is subject to the founders' retention over 3 years, will be recorded as compensation
expense over the retention period. Compensation expenses for the three and nine months ended September 30, 2021 were approximately $1.1 million and $3.3 million respectively. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed, based on the information that is available as of September 30, 2021. Thus, the
measurements of fair value reflected are subject to changes and such changes could be significant. The preliminary allocation of the
purchase price to assets acquired and liabilities assumed is as follows:
The allocation of the purchase price to net assets acquired and liability assumed resulted in the recognition of an intangible asset
related to developed technology of $71 million. This intangible asset has a useful-life of 10 years. The fair value estimate of the
developed technology is determined using a variation of the income approach known as the “Multi-Period Excess Earnings Approach”.
This valuation technique estimates the fair value of an asset based on market participants’ expectations of the cash flows an asset
would generate over its remaining useful life. The net cash flows were discounted to present value. Pro forma information giving effect to the acquisition has not been provided as the impact of the transaction for purposes of Stratasys' consolidation results of operations and financial condition would not be material. XAAR acquisition On November 1, 2021,
the Company acquired the remaining 55% share of XAAR 3D, for an aggregate
purchase price of $33.8 million. The Company paid cash upon closing and it is obligated to make additional earn-out payments and royalties on products and services sales for up to 15 years. RPS acquisition On February 16, 2021 the Company acquired RP Support Limited (“RPS”), a provider of industrial stereolithography 3D printers and solutions. In exchange for 100% of the outstanding shares of RPS, the Company paid cash upon closing and it is obligated to make additional payments (in cash), subject to performance-based criteria, via earn-out payments over two years. Marketable equity investment The Company recognized in the three and nine months ended September 30, 2021 losses of $2.0 million and
$1.2 million respectively, for revaluation of an equity investment. In prior periods the investment
was treated as a non-marketable equity investment without readily determinable
fair value. The entity in which the Company invested became public during the first quarter and accordingly the
investment is now treated as a marketable equity investment.
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Revenues |
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| Revenue Recognition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenues | Note 4. Revenues Disaggregation of Revenues The following table presents the Company’s revenues disaggregated by geographical region (based on the Company's customers' locations) and revenue type for the three and nine months ended September 30, 2021 and 2020:
The following table presents the Company’s revenues disaggregated based on the timing of revenue recognition (at a specific point in time or over the course of time) for the three and nine months ended September 30, 2021 and 2020:
Contract Assets and Contract Liabilities Contract assets are recorded when the Company's right to consideration is conditional on constraints other than the passage of time. The Company had no material contract assets as of September 30, 2021 and December 31, 2020. Contract liabilities include advance payments and billings in excess of revenue recognized, which are primarily related to advanced billings for service type warranty. Contract liabilities are presented under deferred revenues. The Company's deferred revenues as of September 30, 2021 and December 31, 2020 were as follows:
*Includes $18 million and $14.2 million under long term deferred revenue in the Company's consolidated balance sheets as of September 30, 2021 and December 31, 2020, respectively. Revenue recognized in 2021 that was included in deferred revenue balance as of December 31, 2020 was $9.7 million and $41.8 million for the three and nine months ended September 30, 2021. Remaining Performance Obligations Remaining Performance Obligations (“RPO“) represent contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. As of September 30, 2021, the total RPO amounted to $121.4 million. The Company expects to recognize $102.1 million of this RPO during the next 12 months, $10.8 million over the subsequent 12 months and the remaining $8.6 million thereafter. Incremental Costs of Obtaining a Contract Sales commissions earned mainly by the Company’s sales agents are considered incremental costs of obtaining a contract with a customer, as the Company expects the benefit of those commissions to be longer than one year. The majority of the sales commissions are not subject to capitalization, as the commission expense is recognized as the related revenue is recognized. Sales commissions for initial contracts related to the service type warranty are deferred and then amortized on a straight-line basis over the expected customer relationship period if the Company expects to recover those costs. Amortization expense is included in selling, general and administrative expenses in the consolidated statements of operations and comprehensive loss. As of September 30, 2021 and December 31, 2020, the deferred commissions amounted to $6.6 million and $5 million, respectively. |
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Inventories |
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| Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventories | Note 5. Inventories Inventories consisted of the following:
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Goodwill and Other Intangible Assets |
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| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Other Intangible Assets | Note 6. Goodwill and Other Intangible Assets Goodwill Changes in the carrying amount of the Company’s goodwill for the nine months ended September 30, 2021 were as follows:
*The goodwill was acquired as part of the Origin acquisition. See Note 3. **The goodwill was acquired as part of the RPS acquisition. See Note 3. During the third quarter of 2020, the
Company noted that indicators of potential impairment existed which required an
interim goodwill impairment analysis for Stratasys-Objet reporting unit. These
indicators included longer and deeper than expected reduction in the business,
refinement to the Company’s business focus into additional inorganic
technologies and sustained decline in the Company’s market capitalization
during the prior two quarters, in each case, primarily as a result of the COVID-19 impact
on the global economy and the Company’s business.
As a result of the factors discussed
above, the Company revisited its assumptions supporting the cash
flow projections for its Stratasys-Objet reporting unit, including: (i) the
expected duration and depth of revenue reduction and certain revenue growth
assumptions; (ii) the associated operating profit margins; and (iii) the long
term growth rate. In estimating the discounted cash flow, the Company used the
following key assumptions: the Company expected it would take
approximately two years to regain the loss of revenue and return to its pre
COVID-19 activity levels considering the impact of both volume and price with a
similar effect on profitability. Following such period, the Company expects to
return to similar growth rates as estimated in prior valuations. The Company
assumed a long term terminal growth rate of 2.5%, which is lower than the 3.1% used in
prior valuations. In addition, changes in business focus due to introduction of new technologies was expected to lower the total revenues related to the
Stratasys-Objet reporting unit. The resulting cash flow amounts were discounted
using the same discount rate of 13.5%.
Based on the revised cash flow
projections, the value of the reporting unit had decreased below its carrying value, and the Company
recorded in the third quarter of 2020, a goodwill impairment charge of $386.2 million,
the entire reporting unit’s goodwill. Other Intangible Assets Other intangible assets consisted of the following:
Amortization expenses relating to intangible assets for the three-month periods ended September 30, 2021 and 2020 were approximately $7.7 million and $6.2 million, respectively. Amortization expenses relating to intangible assets for the nine-month periods ended September 30, 2021 and 2020 were approximately $23.0 million and $18.6 million, respectively. As of September 30, 2021, the estimated amortization expenses relating to intangible assets for each of the following future periods were as follows:
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Net Loss Per Share |
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| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Loss Per Share | Note 7. Net Loss Per Share
The following table presents the numerator and denominator of the basic and diluted net loss per share computations for the three and nine months ended September 30, 2021 and 2020:
The computation of diluted net loss per share excluded share awards of 5.0 million shares and 4.8 million shares for the three and nine months ended September 30, 2021 and 2020, respectively, because their inclusion would have had an anti-dilutive effect on the diluted net loss per share. |
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Income Taxes |
9 Months Ended |
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Sep. 30, 2021 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Note 8. Income Taxes The Company had income tax benefit of $0.7 million for the three-month period ended September 30, 2021 compared to income tax benefit of $0.3 million for the three-month period ended September 30, 2020, and income tax benefit of $6.0 million for the nine-month period ended September 30, 2021 compared to income tax benefit of $2.3 million for the nine-month period ended September 30, 2020. The Company’s effective tax rate as of September 30, 2021 was primarily impacted by our transition during the second quarter of 2021 to the new Israeli tax regime of “Preferred Technology Enterprise”, under which the Company is subject to a 12% tax rate, as well as different geographic mixes of earnings and losses and a valuation allowance on losses of the Company's US subsidiaries. |
Fair Value Measurements |
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| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurements | Note 9. Fair Value Measurements
Financial instruments measured at fair value The following table summarizes the Company’s financial assets and liabilities that are carried at fair value on a recurring basis, in its consolidated balance sheets:
The Company’s foreign exchange forward contracts are classified as Level 2, as they are not actively traded and are valued using pricing models that use observable market inputs, including interest rate curves and both forward and spot prices for currencies (Level 2 inputs). Contingent consideration represents liabilities recorded at fair value in connection with acquisitions, and thus represents a Level 3 measurement within the fair value hierarchy (refer to Note 3). Other financial instruments consist mainly of cash and cash equivalents, short-term deposits, current and non-current assets, accounts payable and other current liabilities. The fair value of these financial instruments approximates their carrying values. |
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Derivative instruments and hedging activities |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative instruments and hedging activities | Note 10. Derivative instruments and hedging activities Since the Company conducts its operations globally, it is exposed to global market risks and to the risk that its earnings, cash flows and equity could be adversely impacted by fluctuations in foreign currency exchange rates. The Company enters into transactions involving foreign currency exchange derivative financial instruments. The Company manages its foreign currency exposures on a consolidated basis, which allows the Company to net exposures and take advantage of any natural hedging. The transactions are designed to manage the Company’s net exposure to foreign currency exchange rates and to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates. The Company does not enter into derivative transactions for trading purposes. The Company is primarily exposed to foreign exchange risk with respect to recognized assets and liabilities and forecasted transactions denominated in the New Israeli Shekel (“NIS”), Euro, GBP, Korean Won, Chinese Yuan and the Japanese Yen. The gains and losses on the hedging instruments partially offset losses and gains on the hedged items. Financial markets and currency volatility may limit the Company’s ability to hedge these exposures. These contracts mature through December 2021. The following table summarizes the consolidated balance sheets classification and fair values of the Company’s derivative instruments:
Foreign exchange contracts not designated as hedging instruments As of September 30, 2021, the notional amounts of the Company’s outstanding exchange forward contracts, not designated as hedging instruments, were $44.2 million, and were used to reduce foreign currency exposures. With respect to such derivatives, gain of $0.9 million and loss of $3.2 million were recognized under financial income (expenses), net for the three-month periods ended September 30, 2021 and 2020, respectively. Such gains or losses partially offset the foreign currency revaluation changes of the balance sheet items. These foreign currencies revaluation changes are also recognized under financial income (expenses), net. Cash Flow Hedging - Hedges of forecasted foreign currency payroll and other operating expenses As of September 30, 2021, the Company had in effect foreign exchange forward contracts, designated as cash flow hedges for accounting purposes, for the conversion of $6.4 million into NIS. The Company uses short-term cash flow hedge contracts to reduce its exposure to variability in expected future cash flows resulting mainly from payroll costs and other operating expenses denominated in NIS. The changes in fair value of those contracts are included in the Company’s accumulated other comprehensive loss. Cash Flow Hedging - Hedges of forecasted foreign currency revenue As of September 30, 2021, the Company had in effect foreign exchange forward contracts, designated as cash flow hedges for accounting purposes, for the conversion of 12.0 million Euro into U.S. dollars. The Company transacts business in U.S. dollars and in various other currencies. The Company may use foreign exchange or forward contracts to hedge certain cash flow exposures resulting from changes in these foreign currency exchange rates. These foreign exchange contracts, carried at fair value, have maturities of up to twelve months. The Company enters into these foreign exchange contracts to hedge a portion of its forecasted foreign currency denominated revenue in the normal course of business and accordingly, they are not speculative in nature. |
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Equity |
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| Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity | Note 11. Equity a. Stock-based compensation plans Stock-based compensation expenses for equity-classified stock options, restricted share units (“RSUs”) and performance-based restricted share units (”PSUs”) were allocated as follows:
A summary of the Company’s stock option activity for the nine months ended September 30, 2021 is as follows:
As of September 30, 2021, the unrecognized compensation cost of $2.5 million related to all unvested, equity-classified stock options is expected to be recognized as an expense over a weighted-average period of 3.2 years.
A summary of the Company’s RSUs and PSUs activity for the three months ended September 30, 2021 is as follows:
The fair value of RSUs and PSUs is determined based on the quoted price of the Company’s ordinary shares on the date of the grant. As of September 30, 2021, the unrecognized compensation cost of $60 million related to all unvested, equity-classified RSUs and PSUs is expected to be recognized as expense over a weighted-average period of 2.34 years.
b. Accumulated other comprehensive loss The following tables present the changes in the components of accumulated other comprehensive income (loss), net of taxes, for the nine months ended September 30, 2021 and 2020, respectively:
c. Public offering of ordinary shares During March 2021, the Company completed a public offering of $218.9 million, net of underwriting discounts and offering expenses. The total number of shares sold by the Company in the public offering was 7,931,034. A deferred tax asset in an
amount of $1.3 million was recorded in respect of a tax benefit, arising from
the underwriting discounts and offering expenses, as an increase
to Additional Paid-In Capital.
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Contingencies |
9 Months Ended |
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Sep. 30, 2021 | |
| Loss Contingency [Abstract] | |
| Contingencies | Note 12. Contingencies Legal proceedings Subsequent to September 30, 2021, the Company reached preliminary settlement on an employees related matter in the US. The financial statements for the third quarter include a provision in respect of this settlement. The Company is a party to various legal proceedings from time to time, the outcome of which, in the opinion of management, will not have a significant effect on the financial position, profitability or cash flows of the Company. |
Certain Transactions (Tables) |
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Certain Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of fair value of the consideration transferred to Origin stockholders for the Origin transaction |
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| Schedule of preliminary allocation of the purchase price to assets acquired and liabilities |
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Revenues (Tables) |
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| Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of disaggregation of revenues |
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| Schedule of disaggregated based on the timing of revenue recognition |
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| Schedule of changes in deferred revenue |
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Inventories (Tables) |
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Inventories |
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Goodwill and Other Intangible Assets (Tables) |
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of changes in the carrying amount of goodwill |
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| Schedule of other intangible assets |
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| Schedule of estimated amortization expense relating to intangible assets |
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Net Loss Per Share (Tables) |
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of basic and diluted loss per share |
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Fair Value Measurements (Tables) |
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of assets and liabilities carried at fair value on a recurring basis |
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Derivative instruments and hedging activities (Tables) |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of balance sheet classification and fair values of derivative instruments |
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Equity (Tables) |
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| Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of stock-based compensation expenses |
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| Schedule of stock option activity |
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| Schedule of RSUs and PSUs activity |
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| Schedule of accumulated other comprehensive income (loss) |
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Business Description and Basis of Presentation (Details) |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Business Combination [Member] | |
| Business Description and Basis of Presentation (Details) [Line Items] | |
| Business acquisition, description | The Company’s approximately 1,600 granted and pending additive technology patents to date have been used to create models, prototypes, manufacturing tools, and production parts for a multitude of industries including aerospace, automotive, transportation, healthcare, consumer products, dental, medical, and education. |
Certain Transactions (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|---|
Nov. 01, 2021 |
Feb. 16, 2021 |
Dec. 31, 2020 |
Sep. 30, 2021 |
Sep. 30, 2021 |
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| Certain Transactions (Details) [Line Items] | |||||
| Aggregate purchase price | $ 97.1 | ||||
| Exchange agreement description | In exchange for 100% of the outstanding shares of Origin the Company issued 1,488 thousand ordinary shares, paid cash upon closing, and is obligated to pay additional payments (combination of cash and shares) subject to performance-based earn-outs over 3 years. | ||||
| Description of contingent payments | The total contingent payments could reach to a maximum aggregate amount of up to $40 million. Approximately 50% of the payments shall be settled in cash, and 50% shall be settled through the issuance of ordinary shares. | ||||
| Additional payment amount | $ 6.0 | ||||
| Retention period | 3 years | ||||
| Compensation expenses | $ 1.1 | $ 3.3 | |||
| Intangible asset | $ 71.0 | ||||
| Intangible asset useful-life | 10 years | ||||
| Aggregate purchase price | $ 33.8 | ||||
| Additional earn-out payment | 15 years | ||||
| Exchange for outstanding shares, percentage | 100.00% | ||||
| Based earn-outs over term | 2 years | ||||
| Changes in fair value of equity investment | $ 2.0 | $ 1.2 | |||
| XAAR [Member] | |||||
| Certain Transactions (Details) [Line Items] | |||||
| Remaining acquire share, percentage | 55.00% | ||||
Certain Transactions (Details) - Schedule of fair value of the consideration transferred to Origin stockholders for the Origin transaction $ in Thousands |
9 Months Ended |
|---|---|
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Sep. 30, 2021
USD ($)
| |
| Schedule of fair value of the consideration transferred to Origin stockholders for the Origin transaction [Abstract] | |
| Cash payments | $ 33,025 |
| Issuance of ordinary shares to Origin stockholders | 26,636 |
| Contingent consideration at estimated fair value | 37,400 |
| Total consideration | $ 97,061 |
Certain Transactions (Details) - Schedule of preliminary allocation of the purchase price to assets acquired and liabilities $ in Thousands |
Sep. 30, 2021
USD ($)
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|---|---|
| Schedule of preliminary allocation of the purchase price to assets acquired and liabilities [Abstract] | |
| Cash and cash equivalents | $ 2,083 |
| Goodwill | 38,094 |
| Intangible assets | 71,120 |
| Other assets | 3,493 |
| Total assets acquired | 114,790 |
| Net deferred tax liabilities | 14,007 |
| Other labilities | 3,722 |
| Total liabilities assumed | 17,729 |
| Net assets acquired | $ 97,061 |
Revenues (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |
|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2021 |
Dec. 31, 2020 |
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| Revenue Recognition [Abstract] | |||
| Long term deferred revenue | $ 18.0 | $ 18.0 | $ 14.2 |
| Revenue recognized | 9.7 | 41.8 | |
| Remaining performance obligations | 121.4 | 121.4 | |
| Expected remaining performance obligations recognized during next 12 months | 102.1 | 102.1 | |
| Expected remaining performance obligations recognized over subsequent 12 months | 10.8 | 10.8 | |
| Expected remaining performance obligations recognized remainder thereafter | 8.6 | 8.6 | |
| Deferred sales commissions | $ 6.6 | $ 6.6 | $ 5.0 |
Revenues (Details) - Schedule of changes in deferred revenue - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
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|---|---|---|---|---|
| Schedule of changes in deferred revenue [Abstract] | ||||
| Deferred revenue | [1] | $ 67,084 | $ 63,392 | |
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Inventories (Details) - Schedule of Inventories - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Schedule of Inventories [Abstract] | ||
| Finished goods | $ 53,576 | $ 61,297 |
| Work-in-process | 3,734 | 3,163 |
| Raw materials | 62,615 | 67,212 |
| Total Inventory | $ 119,925 | $ 131,672 |
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
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| Goodwill and Other Intangible Assets (Details) [Line Items] | ||||
| Goodwill impairment charge | $ 386.2 | |||
| Amortization of intangible assets | $ 7.7 | $ 6.2 | $ 23.0 | $ 18.6 |
| Stratasys-Objet reporting unit [Member] | ||||
| Goodwill and Other Intangible Assets (Details) [Line Items] | ||||
| Regain the loss of revenue | 2 years | |||
| Discount rate | 13.50% | |||
| Minimum [Member] | Stratasys-Objet reporting unit [Member] | ||||
| Goodwill and Other Intangible Assets (Details) [Line Items] | ||||
| Growth rate | 2.50% | |||
| Maximum [Member] | Stratasys-Objet reporting unit [Member] | ||||
| Goodwill and Other Intangible Assets (Details) [Line Items] | ||||
| Discount rate | 3.10% | |||
Goodwill and Other Intangible Assets (Details) - Schedule of changes in the carrying amount of goodwill - Goodwill [Member] $ in Thousands |
9 Months Ended | |||||
|---|---|---|---|---|---|---|
|
Sep. 30, 2021
USD ($)
| ||||||
| Goodwill [Line Items] | ||||||
| Goodwill as of January 1, 2021 | $ 35,694 | [1] | ||||
| Goodwill acquired | 1,716 | [2] | ||||
| Measurement period adjustments | 2,400 | |||||
| Foreign currency translation adjustments | (60) | |||||
| Goodwill as of September 30, 2021 | $ 39,750 | |||||
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Goodwill and Other Intangible Assets (Details) - Schedule of estimated amortization expense relating to intangible assets $ in Thousands |
Sep. 30, 2021
USD ($)
|
|---|---|
| Schedule of estimated amortization expense relating to intangible assets [Abstract] | |
| Remaining 3 months of 2021 | $ 8,213 |
| 2022 | 30,765 |
| 2023 | 16,166 |
| 2024 | 12,251 |
| 2025 and thereafter | 49,615 |
| Total | $ 117,010 |
Net Loss Per Share (Details) - shares shares in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
| Earnings Per Share [Abstract] | ||||
| Antidilutive securities excluded from computation of net loss per share | 5.0 | 5.0 | 4.8 | 4.8 |
Net Loss Per Share (Details) - Schedule of basic and diluted loss per share - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
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| Numerator: | ||||
| Net loss attributable to Stratasys Ltd. for basic and diluted net loss per share | $ (18,076) | $ (405,062) | $ (57,146) | $ (454,751) |
| Denominator: | ||||
| Weighted average shares - for basic and diluted net loss per share | 65,018 | 55,086 | 62,888 | 54,851 |
| Net loss per share attributable to Stratasys Ltd. | ||||
| Basic and diluted | $ (0.28) | $ (7.35) | $ (0.91) | $ (8.29) |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
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| Income Tax Disclosure [Abstract] | ||||
| Income tax expense (benefits) | $ 0.7 | $ 0.3 | $ 6.0 | $ 2.3 |
| Effective income tax rate percentage | 12.00% | |||
Equity (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended |
|---|---|---|
Mar. 31, 2021 |
Sep. 30, 2021 |
|
| Equity (Details) [Line Items] | ||
| Public offering of ordinary shares, net | $ 218.9 | |
| Deferred tax asset | $ 1.3 | |
| Stock Option [Member] | ||
| Equity (Details) [Line Items] | ||
| Unrecognized compensation cost | $ 2.5 | |
| Weighted-average period | 3 years 2 months 12 days | |
| RSUs and PSUs [Member] | ||
| Equity (Details) [Line Items] | ||
| Unrecognized compensation cost | $ 60.0 | |
| Weighted-average period | 2 years 4 months 2 days | |
| Ordinary Shares [Member] | ||
| Equity (Details) [Line Items] | ||
| Sale of public offering shares (in Shares) | 7,931,034 |
Equity (Details) - Schedule of stock-based compensation expenses - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
| Cost of revenues [Member] | ||||
| Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
| Total stock-based compensation expenses | $ 805 | $ 524 | $ 2,227 | $ 1,370 |
| Research and development, net [Member] | ||||
| Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
| Total stock-based compensation expenses | 1,764 | 1,587 | 5,058 | 3,764 |
| Selling, general and administrative [Member] | ||||
| Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
| Total stock-based compensation expenses | 5,389 | 2,765 | 15,855 | 10,623 |
| Stock-based compensation plans [Member] | ||||
| Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
| Total stock-based compensation expenses | $ 7,958 | $ 4,876 | $ 23,140 | $ 15,757 |
Equity (Details) - Schedule of stock option activity |
9 Months Ended |
|---|---|
|
Sep. 30, 2021
$ / shares
shares
| |
| Stockholders' Equity Note [Abstract] | |
| Number of Options, Options outstanding | shares | 2,102,529 |
| Weighted Average Exercise Price, Options outstanding | $ / shares | $ 28.06 |
| Number of Options, Granted | shares | 46,366 |
| Weighted Average Exercise Price, Granted | $ / shares | $ 3.15 |
| Number of Options, Exercised | shares | (209,819) |
| Weighted Average Exercise Price, Exercised | $ / shares | $ 20.05 |
| Number of Options, Forfeited | shares | (40,548) |
| Weighted Average Exercise Price, Forfeited | $ / shares | $ 41.82 |
| Number of Options, Options outstanding | shares | 1,898,528 |
| Weighted Average Exercise Price, Options outstanding | $ / shares | $ 28.04 |
| Number of Options, Options exercisable | shares | 1,569,587 |
| Weighted Average Exercise Price, Options exercisable | $ / shares | $ 30.66 |
Equity (Details) - Schedule of RSUs and PSUs activity - Restricted and Phantom Share Units [Member] |
9 Months Ended |
|---|---|
|
Sep. 30, 2021
$ / shares
shares
| |
| Equity (Details) - Schedule of RSUs and PSUs activity [Line Items] | |
| Number of RSUs and PSUs, Unvested | shares | 2,801,116 |
| Weighted Average Grant Date Fair Value, Unvested | $ / shares | $ 21.08 |
| Number of RSUs and PSUs, Granted | shares | 1,272,386 |
| Weighted Average Grant Date Fair Value, Granted | $ / shares | $ 33.91 |
| Number of RSUs and PSUs, Vested | shares | (709,434) |
| Weighted Average Grant Date Fair Value, Vested | $ / shares | $ 21.88 |
| Number of RSUs and PSUs, Forfeited | shares | (284,276) |
| Weighted Average Grant Date Fair Value, Forfeited | $ / shares | $ 21.98 |
| Number of RSUs and PSUs, Unvested | shares | 3,079,792 |
| Weighted Average Grant Date Fair Value, Unvested | $ / shares | $ 26.11 |
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