3D Systems (NYSE:DDD) is a leading Addictive Manufacturing solutions provider.
The company has existed for more than 30 years and brings the innovation of 3D printing or 3-dimensional printing to the manufacturing industry.
3D Systems’ operations are divided into 2 market segments which are Healthcare and Industrial.
The Healthcare segment targets specifically the dental and healthcare markets while the Industrial segment provides solutions to the aerospace, defense, automotive and durable goods sectors.
In this article, we will look at 3D Systems revenue and sales as well as the growth rates.
Aside from the total revenue, we also look at the company’s other revenue metrics, including the revenue breakdown by segment and by market category as well as the recurring revenue.
Let’s take a look.
Total Revenue And Sales
3D Systems’ total revenue has been rising since hitting a bottom in fiscal 2020 and tops nearly $640 million as of 3Q 2021 on a TTM basis.
At this level of revenue, 3D Systems’ total revenue has fully recovered to its pre-pandemic level as seen in the chart.
In 3Q 2021, 3D Systems’ TTM revenue grew 15% year over year.
Going forward, 3D Systems’ total revenue is estimated to come down slightly and reach around $600 million on a TTM basis in 4Q 2021 and 1Q 2022 according to Yahoo Finance based on the average estimates of 6 analysts.
For your information, the company itself did not provide any guidance on the outlook of revenue for the next quarter in its latest quarterly filings.
Revenue Breakdown By Segment
In terms of revenue breakdown, 3D Systems has 2 reportable segments which are Products and Services as disclosed in the quarterly and annual filings.
According to the company reports, the products segment provides solutions such as 3D printers and corresponding materials, digitizers, software licenses, 3D scanners and haptic devices.
On the other hand, the services segment delivers maintenance contracts and services on 3D printers and simulators, software maintenance and healthcare services.
According to the chart above, 3D Systems’ revenue from the products segment has been on a rise and reached more than $420 million as of 3Q 2021 on a TTM basis, a new high since fiscal 2020.
The products segment 3Q 2021 result represents a growth rate of 30% on a year-on-year basis.
On the other hand, 3D Systems’ services revenue has been plummeting and reached about $210 million as of 3Q 2021 on a TTM basis, a new low since fiscal 2020.
In short, 3D Systems’ products revenue is growing while services revenue is sinking.
Revenue Breakdown By Market Category
3D Systems operates in 2 major markets which are Healthcare and Industrial.
The company’s healthcare segment offers products and services that target specifically the dental and healthcare industry.
On the other hand, the industrial segment targets specifically the aerospace, defense, automotive and durable goods sectors.
As seen in the chart above, 3D Systems’ revenue from the industrial sector has been declining and reached $320 million as of 2021 Q3 on a TTM basis.
The industrial sector revenue in Q3 2021 was down around 2% on a year-over-year basis but was down nearly 20% from fiscal 2019.
Therefore, 3D Systems’ industrial revenue in FY2021 has performed worse than that of pre-COVID periods.
In contrast, the healthcare sector is seeing revenue growth and reached $317 million in sales as of Q3 2021 on a TTM basis.
The healthcare sector revenue reported in Q3 2021 represents a growth rate of more than 40% on a year-on-year basis and is up nearly 30% from fiscal 2019.
Therefore, 3D Systems’ healthcare revenue has performed much better than industrial revenue and has even exceeded that of the pre-COVID periods.
As of Q3 2021, 3D Systems’ industrial and healthcare revenues are converging at about the same level which is $320 million.
If the healthcare revenue can maintain the current growth trajectory, it is expected to overtake the industrial sector revenue by the next quarter on a TTM basis.
3D Systems is targeting to generate more recurring revenue as it has a higher margin compared to non-recurring sales such as those that come from on-demand solutions in which the company has already divested in 2021.
As seen in the chart, 3D Systems’ recurring revenue amounts to about $100 million as of Q3 2021.
The company generated roughly the same level of recurring revenue in the last 3 quarters, at about $100 million per quarter.
3D Systems’ recurring revenue represents more than 60% of the total revenue as seen in the chart above.
While recurring revenue has reached $100 million in fiscal 2021 per quarter, it is nearly at the same level compared to that of a year ago, indicating that recurring revenue has remained more or less flat.
Healthcare Segment Revenue
Within the healthcare market segment, 3D Systems’ revenue can be further broken down into products and services segments.
As shown in the chart, the company’s products revenue is much higher than that of the services sector, at nearly 2X the ratio in all quarters.
In 3Q 2021, 3D Systems generated about $55 million of sales from products and only $20 million from services in the healthcare market sector.
In the healthcare segment, products revenue has slightly increased from $50 million reported in 1Q21 while services revenue has remained flat in all quarters.
Industrial Segment Revenue
Similarly, within the industrial market segment, 3D Systems’ products revenue has been much higher than that of the services sector in all quarters in fiscal 2021, at nearly twice the amount.
A trend worth talking about is the growing products revenue in the industrial market segment while services revenue in this sector is declining.
As seen, 3D Systems made about $53 million of sales in the products sector but only $26 million of sales in the services sector in the industrial market segment in Q3 2021.
To recap, 3D Systems’ total revenue has fully recovered as of Q3 2021 on a TTM basis and was at the same level as that of the pre-pandemic periods.
However, going into 4Q21 and 1Q22, 3D Systems’ total revenue is estimated to decline according to 6 analysts from Yahoo Finance.
Also, 3D Systems’ total products revenue has been rising and reached a record high as of Q3 2021 to more than $400 million on a TTM basis.
On the contrary, total services revenue has been on a decline and reached only slightly above $200 million as of Q3 2021 on a TTM basis.
In terms of revenue by market segment, 3D Systems’ healthcare revenue has been trending higher while industrial revenue has been on a decline.
In fiscal Q3 2021, both healthcare and industrial revenues were at about the same level which was $320 million, showing that 3D Systems’ healthcare sector will overtake the industrial sector if the growth trajectory can maintain at the current rate in subsequent quarters.
Credits and References
1. Financial figures in all charts on this webpage were obtained and referenced from DDD’s quarterly and annual filings which can be obtained in the following location: DDD Investor Relation.
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