Good day and welcome to today's conference call to discuss Stratasys' third quarter 2026 financial results. My name is Kevin and I'll be your operator for today's call. And now I'd like to turn the call over to Yonah Lloyd, Chief Communications Officer, Vice President of Investment Relations for Stratasys.

Mr. Lloyd, please go ahead. Good morning, everyone, and thank you for joining us to discuss our 2026 third quarter financial results. On the call with us today is our CEO, Dr. Yoav Zeif, and CFO, Eitan Zamir. I would like to remind you that access to today's call, including the slide presentation, is available online at the web address provided in our press release. In addition, a replay of today's call, including access to the slide presentation, will also be available and can be accessed through the investor relations section of our website. Please note that some of the information provided during our discussion today will consist of forward-looking statements, including, without limitation, those regarding our expectations as to our future revenue, gross margin, operating expenses, taxes, and other future financial performance, and our expectations for our business outlook. All statements that speak to future performance, events, expectations, or results are forward-looking statements. Actual results or trends could differ materially from our forecast. For risks that have caused actual results to be materially different from those described in forward-looking statements, please refer to the risk factors discussed or referenced in Stratasys' annual report on Form 20F for the 2025 year. Please also refer to that annual report along with our reports filed with or furnished to the SEC throughout 2026 for additional operational and financial details. Reports on Form 6K that are furnished to the SEC on a quarterly basis and throughout the year provide updated current information regarding the company's operating results and material developments concerning our company. Stratasys assumes no obligation to update any forward-looking statements or information which speak as of their respective dates. As in previous quarters, today's call will include GAAP and non-GAAP financial measures. The non-GAAP financial measures should be read in combination with our GAAP metrics to evaluate our performance. Non-GAAP to GAAP reconciliations are provided in tables in our slide presentation and today's press release. I will now turn the call over to our Chief Executive Officer, Dr. Yoav Zeif. Yoav?

Thank you, Yonah.

Good morning, everyone, and thank you for joining us. Our third quarter results reflect the successful ongoing shift from rapid prototyping to manufacturing, as reflected in the 4.1% growth year over year. Our largest business, Aerospace and Defense, or A&D, at a particularly strong quarter, growing over 35% compared to the third quarter of last year, and approximately 25% sequentially from the second quarter of this year. And our automotive, dental, and stratasys direct business grew as well. Importantly, we generated positive operating cash flow this quarter, as we had previously communicated. Our growth across A&D and automotive demonstrates the long-term value propositions of industrial additive manufacturing, addressing key benefits, including on-shoring, speed, cost, and customization, while enabling rapid scaling. Furthermore, the mix continues to shift from prototyping toward qualified production, driving recurring industrial systems, materials, service, and Stratasys direct parts revenue. Regarding aerospace and defense, in the third quarter, we demonstrated ongoing success and would like to highlight two significant defense orders. These orders enabled the customers to continue scaling their respective production programs utilizing both our FDM and SAF technologies. We also saw strong follow-on audio activity from existing FDM customers already embedded in production environments, especially focused on our qualified processes, used in-flight grade applications, demand continues to be broad across our FDM portfolio. The growth comprises a number of A&D sub-vertical. This includes drones, space munitions, EVTOL, advanced air mobility, along with the service bureaus and contract manufacturers that support this ecosystem. We have also seen an uptick and customers turning to our soft powder systems, replacing traditional supply chains for just-in-time bridge production work. These megatrends, combined with our focus on high-requirement scaling programs, result in larger relative order sizes, which by nature have longer sales cycles and more time variability. However, it's important to note that once a part is qualified on our platforms, the relationship tends to be long-term. This is primarily due to the constant complexity of re-qualifying another resource. Furthermore, we have strong feedback from customers that our system enables enhanced ROIs. Mission-critical performance requirements and accelerating supply chain resiliency mandates are megatrends. They are translating into longer term durable structural demand for our platforms. This is especially true for scaling programs within aviation, space and space launch, drones and munition industries. The consistent growth, high level of engagement and demand reinforce our conviction that we are still early on this transformative journey. We see significant opportunity to expand our customer base and grow wallet share longer term with both legacy users and startups. To that point, we would like to welcome David Chin to our board of directors. David is a long-term McKinsey senior partner who co-leads their firm's work with defense ministries and armed forces globally. He has advice on transformations across aerospace and defense, manufacturing, cybersecurity, and other key sectors. This appointment reflects the company's continued strategic focus on defense as a key vertical. We also want to thank Aris Kekagian for his service as a board member. Turning to automotive. This quarter, we exhibited at IMTS 2026, the largest manufacturing technology event in the world, where we highlighted our strong and growing relationship with General Motors. By partnering with GM, our products and software are helping to meaningfully improve their legacy tooling and production support with measurable results in terms of speed and efficiency across multiple plants. GM partnered with us to establish an additive manufacturing center of excellence to scale effective production. It is a hub-and-spoke model deploying dozens of industrial 3D printers across more than 20 plants, making custom tools, jigs, and fixtures on demand. This year alone, over 5,000 GM factory floor applications were supported by Stratasys printers, and that number is expected to climb in the coming years. Note that GM is consistently one of our top customers in terms of printer utilization in production environments. This utilization is a reflection of the high quality of our materials, which translates into recurring revenue for us. GM in turn is gaining efficiency in production and saving $10 million in annual cost. This partnership is a true symbiotic relationship where we all win, including the end consumer that ultimately gets a better produced vehicle. The benefits for GM are substantial beyond the annual savings from localized additive manufacturing production. Tooling response time are roughly four times faster. Worker safety and ergonomics are improved by customized production tooling, which reduces physical strain on operators. This model continues to expand across GM's plants in the United States and Mexico. It's a production scale evidentiary point for our manufacturing strategy. and a compelling case study for other manufacturers currently evaluating our additive manufacturing solutions. At IMPS, we also launched the F870, a new large-format FDM platform, purpose-built for factory floor tooling, fixture and end-use part, with the longest heated build chamber in its class. Toyota and Rivian were among the first adopters, evaluating the system for automotive tooling and manufacturing aids at their North American facilities. Both the F870 launch and the General Motors rollout reflect the same underlying trend. Manufacturers are moving additive manufacturing out of the prototyping lab and onto the factory floor as a standard procedure of how they run production. Additionally, FAW Group, one of China's largest auto OEMs, continued to expand its use of our platforms for production purposes. On last quarter's call, we noted that FAW had signed an agreement to purchase 12 F900 systems this year.

Two were sold in Q2 and several more in the third quarter.

By year's end, they are expected to have 17 total F900s and eight other Stratasys printers, reinforcing the high quality of our systems and recurring nature of the business as customers scale after their initial deployment. Turning to Stratasys Direct, our US-based parts manufacturing business grew 9% over Q3 last year. Once again, demand for defense and raw production was robust, with the top customers all coming from this sector. This dynamic has remained consistent for the past two years. One of our customers, a large drone Prime, recently switched to Stratasys technology and is now placing repeat orders. This is a great example of the continued Stratasys Direct and OEM business synergies, as we provide a differentiated end-to-end model, helping A&D customers move from application development through qualification and scale production. Another key component of the improvement of our Stratasys Direct operations has been the increased throughput were recognized from using the new F3300 system to support AMD and automotive applications. In one case, the F3300 was able to produce parts at three times the output of previous systems, providing the customer with a significant reduction in lead time on an expedite order. Overall, The backlog for part production orders is higher than ever before across all technologies, and we are starting to see a shift in demand from standard simple parts to complex, high requirement contract manufacturing, including more finishing, paints, inserts, and quality to meet the demanding use cases. Tratesys direct customers value the ancillary post-processing operations, providing a trusted one-stop solution for end-use parts. This approach reduces the risk associated with using multiple suppliers. We continue to improve utilization of each function in our process. For example, we are evolving the manufacturing execution system to include new features to collect data at each operation and we are engaging with AI firms to improve efficiency across the workflow stream. Moreover, Tratasys Direct is providing an on-shoring solution for US companies. As ongoing capacity shortages, especially in the A&D industries, continue to expand, potential customers are increasingly recognizing the true value of our comprehensive turnkey production solution. leveraging our hardware and software. Stratasys Direct enables us to prove our production capabilities for our high requirement customer and then to deliver manufacturing at scale at their facilities. As we move forward and AI automation is implemented on a larger scale, we expect Stratasys is well positioned to be a long-term beneficiary. Moving to dental. Pratasys was awarded CDCSO approval for our TrueDent material to be used as medical device in India. This is one of the world's largest dentures producing countries with approximately 7 million dentures produced each year. Our technology will allow us to begin to introduce our dentures at a significantly lower price than current alternatives, where many cannot afford the cost and the speed of our system should help remediate their current situation, where wait times for dentures run more than a year. Additionally, DDS Lab in Tampa Bay, Florida, launched its new product line direct to finish partial dentures powered by Stratasys TrueDent and the metal 3D printing technology. The result is a more digital and predictable approach with fewer traditional processing variables and the ability to get the finished dentures appliance back to the dental office faster. We are excited by the potential of the dental business in the coming years and believe once we commercialize it meaningfully, it will become a major growth driver. We have a unique solution and have already lined up key partners such as Glidewell and Affordable Ventures as we begin to address this multi-billion dollar target opportunity. I also want to highlight a milestone on the community side. as part of our long-standing commitment to corporate social responsibility. In August, we expanded our 12-year partnership with Limbitless Solutions, a university-based nonprofit that is using our technology to bring hundreds of 3D-printed prosthetic limbs to children across North America and beyond. The expanded partnership broadened the program's reach and had a renewed focus on sustainability and education, employing our certified pre-owned F-series printers. It's a good reminder that the same production-grade additive manufacturing capabilities driving our results across industries are also changing lives in very direct human ways. With that, I will turn the call to Eitan to review our financials. Eitan?

Thank you, Yoav, and good morning, everyone. Our third quarter results reflect continued execution on our manufacturing focus strategy, as our key industrial focus area of aerospace, defense, and automotive all performed well. As Yoav mentioned, our results were led by A&D, our largest business. which grew over 35% year-over-year and approximately 25% sequentially from the second quarter. Let me get into the details. Third quarter consolidated revenue was $142.6 million, up 4.1% compared to $137 million in the same period last year, and up 3.6% sequentially from last quarter. System revenue was $35.9 million, up 11.8% compared to $32.1 million in Q3 last year, driven in large part by the aerospace and defense momentum described earlier. Consumables revenue was $61.2 million, roughly flat compared to $62 million in the same period last year. Service revenue which includes Stratasys Direct was $45.5 million compared to $42.9 million in the same period last year, an increase of 6.1%. Within service revenue, customer support revenue was $30.5 million, up 4.3% year-over-year. Turning to gross margins, GAAP gross margin was 43.7% for the quarter. compared to 41% in the same period last year. Non-GAAP gross margin was 47.8% for the quarter compared to 45.3% in the same period last year. The change in gross margin was primarily due to improved margins in the mix of system sales and a tariff credit, partially offset by lower consumables. That said, Netting out certain one-time items, our gross margin would have been 45 to 46%. Gap operating expenses were $73.3 million compared to $78.8 million during the same period last year. Non-gap operating expenses were $65.5 million, or 45.9% of revenue, roughly flat, compared to 45.3% of revenue in the same period last year, reflecting continued disciplined expense management. Regarding our consolidated earnings, GAAP operating loss for the quarter was $11 million compared to a loss of $22.7 million for the same period last year. Non-GAAP operating income for the quarter was $2.7 million compared to essentially break even in the same period last year. GAAP net loss for the quota was $10.2 million, or 12 cents per diluted share, compared to a net loss of $55.6 million, or 65 cents per diluted share, for the same period last year. As a reminder, last year's GAAP net loss included a one-time $33.9 million Non-cash loss related to our non-cash impairment charges of an associated company. Non-GAAP net income for the quarter was $3.5 million or $0.04 per diluted share compared to a non-GAAP net income of $1.5 million or $0.02 per diluted share in the same period last year. Adjusted EBITDA was $8 million for the quarter compared to $5 million in the same period last year. Turning to cash flow, we generated $3.5 million of positive operating cash flow this quarter compared to generating $6.9 million in the third quarter last year. We ended the quarter with approximately $210.7 million in cash, cash equivalent, and short-term deposits compared to $212.5 million at the end of the second quarter and continue to operate debt-free. As we look ahead, we want to share that Stratasys and Nano Dimension have mutually agreed to terminate Stratasys' acquisition of Markforge Inc., a wholly owned subsidiary of Nano Dimension. As it has now become apparent to both parties that the regulatory process is set to be longer and more expensive then initially anticipated. Overall, customer engagement remains strong for the Stratasys business, with a number of large and advancing pipeline opportunities. Still, with this shift towards larger orders, particularly production-focused applications, there are longer sales cycles and, as we mentioned last time, higher variability of timing. As a result of this shift in sales cycle, we are updating our outlook for the remainder of 2026. New revenue guidance is $556 million to $561 million, from our prior range of $565 million to $575 million. Other metrics outlined in our earnings release have also been updated and largely reflect the impact of the new revenue expectation. We believe the depth and quality of expected larger orders in 2027, combined with the momentum we are seeing across a number of our end-use verticals, positions us well long-term. Our debt-free balance sheet and healthy cash position give us the added financial flexibility from a position of strength. These allow us to support investing in technology, and adapting to market developments both organically and inorganically to spur further growth. With that, let me turn the call back over to Yoav for closing remarks. Yoav? Thank you, Eitan.

Our solid results this quarter and continued revenue growth demonstrate the progress of our manufacturing focus strategy. Our ongoing momentum in aerospace and defense, together with flagship customer proof points like General Motors, Toyota, and Rivian in automotive, reinforce the structural demand we see across our highest value verticals. While the larger orders now driving our pipeline take longer to close and the timing is more variable, our third quarters show We remain focused on converting customer engagement into qualified, recurring production and are confident in the demand behind these programs and in the long-term path ahead. With that, let's open it up for questions. Operator?

Thank you, and I'll be conducting a question and answer session. If you'd like to be placed into question queue, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. If you're on a speakerphone, it may be necessary to pick up your handset before pressing star 1. And as a reminder, we ask that you please ask one question and one follow-up, then return to the queue. Our first question is coming from Jim Rusciutti from Needham & Company, and Ryan is now live.

Hi, thank you, afternoon. Can you speak to the sequential decline and the flattish year-over-year performance in consumables, and the follow-up relates to margins? Because you still manage to deliver better gross margins, a little surprising given the mix. So were systems margins better or is it a function maybe of a larger contribution from Stratasys Direct?

Thank you, Jim, for the question. First, I'll start saying that we still anticipate that for the full year of 2026, we'll have more consumable compared to the full year of 2025. I mentioned in previous calls that In the transition of our business and the portfolio that we have, we have a range of $63-64 million of consumable per quarter, but certain quarters can be slightly higher and other quarters can be slightly lower. Last quarter, we had $66.3 million, which was slightly higher than our normal average. This quarter was slightly lower. but it doesn't mean anything about the demand nor about the coming quarter. And we still see ourselves, at least in the near term, with levels that are somewhere around the 63 to 64 million on an average quarter.

Got it. Maybe I can add.

Please. Maybe I can add. That's from the consumer booth. And Jean, thank you for the call and the question. In general, we are a company in transition. We put behind us the rapid prototyping and we move forward into manufacturing, which is in a sense a blue ocean, but we are the one developing this market with our manufacturing grade machines. We have the best machines in the industry. This transition is also coming with a change in our consumable portfolio and also in the utilizations of our machines. So we will see some type of variability. By the way, I think that the variability this quarter was mainly because people were equipped themselves with more material before they went to some vacations, but this is really tactical. In the long term, we have more utilization in our machines and we will see more utilization. And that's why also in our guidance, we see that we will have overall year-over-year growth in our consumables. And Eitan, if you can relate, please, to the gross margin.

Sure. So Jim, as we mentioned, this quarter there were a few one-off items, including tariff refund and also a few other items in the opposite direction. and we also mentioned how you should consider the kind of average levels of gross margin in the near future as you have mentioned and in the near future it's between the 45 to 46 percent gross margins as you have mentioned we're in transition period so this is relevant only for the transition and as we leverage our portfolio and future growth engines and everything that you have is just mentioned We see ourselves going back to the level that we used to be in the last few years.

And just on the reset to the full year versus your prior expectations, you talk about longer sales cycles. Is that something you anticipate in some of those sales cycles extending into the first half of next year or is it also just a function of continued slow recovery in the legacy business. And that's it. Thank you.

So, Jim, there is no change in the demand. The demand is high, continued to be high. We're talking about few large opportunities that were pushed out further than we anticipated. But I think it's also worth mentioning when you look on the sequential Revenue for the last three, four quarters from the beginning of the year. We started the year with Q1 revenue of 132.7. Then we moved to a revenue of 137.6. This quarter, we're at 142.6. And Q4, when you do the math with the revised guidance, it's between 143 to 148. So I think we do see the sequential growth. as we mentioned and promised at the beginning of the year. And as I mentioned, the reduction in revenue guidance is due to a few large deals that were pushed further.

Thank you. Our next question today is coming from Greg Palm from Craig Hallam. Your line is now live.

Yeah, thanks. So, Andy, obviously the bright spot because it implies that you're seeing some maybe significant weakness outside of that and other verticals. I think you mentioned growth dental or growth in auto dental. So, I guess, where are you seeing the most sort of softness overall?

Hi, Greg. Thank you for the question. The most important thing to notice is that our strategy is working. We can relate this separately to the quarter and to the trends, but our strategy is working. We are successfully moving from prototype to manufacturing, and you can see year-over-year 4.1% growth, which means that we made sure that the use cases growth exceeds the decline in rapid prototyping. And that's why we also maintain the annual growth expectations year over year compared to 2025. This is the most important thing to notice because we are in transition. One part of the business is declining and another part is growing. The parts that are growing, now relating to your question directly, are mainly aerospace and defense, also SDM so that the the growth drivers are first and foremost the aerospace and defense and I can also share the number more than 35 percent year over year and the second one is the SDM which is supporting the aerospace and defense because our customers start printing in SDM and then they take the sales and print by themselves Because of this growth of aerospace and defense, we also saw system sales. Practically, system sales made a comeback. 12% over-year growth and 36% sequentially. The other use cases also grew. We are talking about tooling. We are talking about automotive. We are talking about dental. They contributed to our growth. and they have a contribution also toward the recurring revenue because this is manufacturing application. So those are the growth drivers. Which business declined? You know, the usual suspects. Where we decided in our strategy, we are not going to fight on low-end rapid prototyping. We let it go. For us, it's the growth in the high requirement and as a result, we see repeated sales in those areas because we have fantastic relationship, credible relationship with our customers. We are expanding with those customers. We are deploying more across their organizations and you can see it. You can see it in GM, you can see it in Rivian, you can see it in Toyota and even in China, in FAW. When they need high requirement, they go to Stratasys. This is the growth. The decline is in the low-end rapid prototype.

Yep, appreciate that color. And then I guess my other question is related to Mark Forge. Are there any financial repercussions from the termination on your end?

No financial repercussions.

Thank you. Our next question is coming from Brian Drab from William Blair. Your line is now live.

Hi, thanks for taking my questions. Just to follow up on the Mark Forge question, where are you left in your thinking regarding, you know, expanding capabilities or capital allocation following, you know, discontinuing the discussions around acquiring Mark Forge? There's obviously some technology there that you're interested in. Can you develop it internally or you can go look and try and get it elsewhere?

Thank you, Brian. It's very clear. Both parties decided that it's better at this point of time from both parties' perspective to terminate. Now, there are also good technologies there, but I want to take a step back and share that from our perspective, we wanted a deal. It's a complementary technology. It's not a transformative one for Stratasys. We are still the leaders in FDM. It doesn't change the strength of our position or the direction of us going forward standalone. Having said that, there are alternatives. We remain committed to be at the forefront of FDM with advanced additive manufacturing.

There are other alternatives.

There are other technologies that will put us there.

Okay, got it. Thank you. And then non-GAAP operating expense in the quarter was 45.9% of sales that ticked up a little bit year over year. How should we model that for the fourth quarter and what direction does that go in 2027?

Thank you, Brian, for the question. Our OPEX in the last few quarters was relatively flattish. When you look on our new guidance and you do the math, you'll see that our OPEX in Q4 is going to be lower than Q3 and basically from the last three quarters. As we did in the past, we continue to monitor very tightly our cost and find areas of savings in discretionary items without changing our approach and our strategy about investing in R&D and future technologies. And that's what we're going to do, and that will positively impact Q4 OPEX. Regarding 2027, it's too early. We're not providing direction on that.

Thank you. Our next question today is coming from Troy Jensen from Cancer for Show. Your line is now live.

Hey, gentlemen. Thanks for taking my questions here. A question for you, Eitan. I'd be curious to know if, given all these larger deals in the quarter and in the pipeline, do you have anybody at or near 10% of sales or expect to next year?

We don't get to specifics. For now, we don't have 10%. As you probably know, if we were to have, at least in our annual report, we should have provided disclosure on this. At this point, we don't have 10%.

Would you expect to have some in 2027?

It's hard to say. Those large deals, as we all know, they take time to complete, so it's too early to know.

I would like to add something, Troy, and thank you for the question. The nature of the business is changing. and you can see it in our earnings every quarter. We have more multi-systems deals than we ever had and less one-offs. And it has an impact on everything, on how you support, how you close the deal, how you support the deal going forward, how you... Adapt, your back end, everything is different. We are, and this is what we wanted to be. It's a transition not only in the front end, it's also a transition of the entire company to support manufacturing. And we're happy that we are experiencing it.

All right, and for my follow-up, I guess I'd be curious, Powderbed Platforms, you guys are a SAF platform. Obviously, HP came out with a lower-priced product that's pretty good, and Formlabs is there now, too. Just USAF, I guess when you guys launched it, I thought it was going to be a platform where there'd be other products, other dimensions. Just love to get an update on where you guys are there.

You should hold your breath. You should hold your breath because we are focusing on our requirement, large format, also in this space. We are much more interested in the large corporate and to have SAF as a backbone and to make sure that it's a real backbone for companies like GM and aerospace and defense and others. We are not going to compete with a $20,000 or $30,000 SAF machine. It's not for us. It's not our value proposition. You cannot send an application engineer with a $20,000 machine. But it is definitely an evolving platform, and you will see more of it.

Thank you. Our next question today is a follow-up from Jim Rashudi from Needham & Company. Your line is now live.

Thanks. You may have mentioned this, but for some of the larger deal business that slipped out a bit, Can you say, did you say what end markets they were coming from? And just in general, any thoughts on 2027, just given what you're seeing in the market?

Tim, it is, you know, by nature, these that are focusing on our use cases, on our industrial solution, and it's a mix. Some of them are aerospace and defense, Some of them are service bureaus, but this is the nature. It's manufacturing.

Okay, thank you.

Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over for any further closing comments.

Thank you for joining us. We look forward to updating you again next quarter.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.