Key Highlights

  • Consumables Revenue hit a quarterly record of $66.3 million, while aerospace and defense revenue grew 17 percent year over year to become the company's largest business.
  • Revenue of $137.6 million missed the $138.5 million estimate by 0.63 percent, while adjusted EPS of $0.03 beat the $0.01 estimate by 200 percent.
  • The company announced a pending $42.5 million cash Acquisition of Markforged, expected to close later this year and become accretive to Margin and EBITDA within the first year.
  • Stratasys reaffirmed full-year 2026 revenue guidance with expected sequential growth in all four quarters, though it now expects negative rather than positive full-year operating cash flow.

Manufacturing Shift Drives Record Consumables Revenue

Stratasys Ltd (NASDAQ:SSYS), a provider of polymer-based 3D printing and additive Manufacturing solutions, reported second-quarter consolidated revenue of $137.6 million, up 3.7 percent sequentially, with consumables revenue reaching a quarterly record of $66.3 million as the company continues its strategic shift from prototyping toward production manufacturing. Management pointed to the consumables record as a direct indicator of high system utilization, reflecting the company's stated goal of increasing the proportion of revenue tied to actual manufacturing of end-use parts rather than one-time prototyping.

System revenue declined to $26.4 million from $30.6 million a year earlier, a trend management attributed to the changing nature of the Business as large multi-unit, multi-year manufacturing deals become less evenly distributed across quarters than the smaller, more frequent prototyping-oriented sales of the past. Executives said the company is on track for its full-year guidance of sequential revenue growth and pointed to a notable uptick in system sales expected in the second half.

Aerospace and Defense Becomes the Company's Largest Business

Aerospace and defense revenue grew 17 percent year over year, making it the company's largest business segment, driven partly by expanding adoption across the U.S. Air Force for depot-level sustainment and spare parts production using the company's F900 system, which is certified for flight-worthy production parts. Management said these orders represent recurring, expanding Volume commitments tied to established programs of record rather than one-time purchases, since qualifying a part on the platform typically leads to a long-term relationship given the cost and complexity of re-qualifying elsewhere.

During the quarter, the company enhanced its relationship with on-demand manufacturer Quickparts through a multi-year, multimillion-dollar agreement covering 12 additional systems across the U.S. and Europe, and was separately awarded a $7.8 million, two-year defense modernization program through America Makes focused on next-generation in-situ monitoring technology. Stratasys Direct Manufacturing, the company's parts production service, grew 12.1 percent year over year, fueled by rising Demand from defense technology companies for drone and munitions production.

Markforged Acquisition Positions Company for Continuous Carbon Fiber Expansion

Stratasys announced a pending $42.5 million cash acquisition of Markforged, a company that generated approximately $70 million of revenue in 2025 and holds leading continuous carbon fiber printing technology that management said can replace metal parts at lower cost and with less post-processing complexity. Executives outlined five strategic rationale pillars for the deal: the carbon fiber technology itself, closely aligned aerospace and industrial tooling use cases, a complementary reseller network reaching smaller shops that Stratasys does not currently serve, Markforged's software platform for simulation and distributed manufacturing management, and the addition of engineering talent to the combined organization.

Management expects the acquisition, anticipated to close later this year pending regulatory clearance, to be accretive to gross margin and contribute positively to EBITDA within the first year post-closing. Executives said customer interest has already materialized ahead of the deal's close, citing inbound requests from large aerospace and defense corporations seeking to collaborate on adopting continuous carbon fiber manufacturing standards.

Full-Year Guidance Reaffirmed Despite a Shift in Cash Flow Outlook

Stratasys reaffirmed its full-year 2026 revenue guidance, continuing to expect sequential growth across all four quarters, though the company revised its Operating Cash Flow outlook from positive to negative for the full year following elevated first-half cash usage tied primarily to non-routine legal expenses associated with proactively protecting the company's intellectual property. Management said it still expects the second half of the year to generate positive operating cash flow, supported by a debt-free Balance Sheet and $212.5 million in cash and short-term deposits that provide flexibility for both organic Investment and the pending Markforged transaction. The durability of the company's aerospace and defense growth trajectory, along with the timing and magnitude of expected large multi-unit system sales in automotive and other manufacturing verticals, will likely determine whether the anticipated second-half acceleration in both system sales and cash flow generation materializes as management has guided.