3D Systems’ 2026 Q2 Call: Growth Optimism and EBITDA Timelines Clash With Prior Margin, OpEx Guidance

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Date of Call: Aug 4, 2026

Financials Results

• Revenue: $94.6M, up 1.4% YOY
• EPS: $-0.04 non-GAAP per diluted share, improved $0.02 YOY
• Gross Margin: 36.7% non-GAAP

Guidance:

• Revenue for Q3 2026 expected in the range of $96M-$99M.
• Adjusted EBITDA for Q3 2026 expected in the range of negative $3M to negative $1M.

Business Commentary:

Revenue and Printer Sales Growth:

• 3D Systems reported revenue of $94.6 million for Q2 2026, an increase of 1.4% year-over-year.
• Printer sales increased by more than 45%, driven by strong demand for the DMP 350 metal printer, SLA 825 polymer platform, and MultiJet printing systems.
• The growth was attributed to a return of capital spending by customers in key markets and a refreshed product portfolio.

Healthcare Business Performance:

• The healthcare segment reported revenue of $48.1 million, up 6.8% year-over-year.
• Growth was driven by strong demand in the med tech market, particularly for metal printers used in orthopedic implants and personalized healthcare solutions.
• The increase in revenue was due to the adoption of 3D printing in medical applications, enhancing design flexibility and reducing supply chain risks.

Industrial Market Dynamics:

• Industrial revenue was $46.5 million, down 3.7% year-over-year, primarily due to lower services revenue and closures of non-core product offerings.
• Aerospace and defense, and data center infrastructure markets showed strong double-digit growth.
• The decline was offset by momentum in new printer platform sales, indicating a potential refresh of the installed base.

Denture Market Expansion:

• The company's denture-related revenue is projected to become a significant stream, with expectations of printers installed in over 100 dental labs by year-end.
• The NextDent 300 system has been well-received, with strong demand due to its precision and economic benefits for dental professionals.
• Growth is driven by the digital conversion of the denture market, offering a scalable solution for a large patient population.

Leadership Transition and Strategic Focus:

• Dr. Jeffrey Graves announced a leadership transition plan, with his service as CEO concluding after more than six years.
• The timing of the transition is seen as opportune, following the company's emergence from an industry recession and a strengthened foundation.
• The strategic priorities remain focused on key markets, expanding metal printing capabilities, and driving profitable growth.

Sentiment Analysis:

Overall Tone: Positive

• CEO expressed being "thrilled" with product uptake, stating "I see no impediments" and "I believe there are bright days ahead." CFO noted "Adjusted EBITDA also improved notably from the prior year period" and the company is "positioned well for the third quarter."

Q&A:

• Question from James Ricchiuti (Needham & Company): How are you thinking about the NextDent deployment looking out to 2027?
  Response: Management is thrilled with uptake and feedback, expects revenue stream to grow significantly by 2027/2028, and sees potential for denture revenue to become one of the largest and most profitable streams.

• Question from James Ricchiuti (Needham & Company): How should we think about gross margins and OpEx in the back half of the year?
  Response: CFO expects margins to be impacted by a higher printer mix in Q4; OpEx should remain stable similar to the first half.

• Question from Greg Palm (Craig-Hallum): Why does the leadership transition timing make sense now?
  Response: CEO states it's a positive opportunity driven by the company being well-positioned post-recession with a refreshed portfolio, cash on hand, and a desire to ensure long-term strategic continuity.

• Question from Greg Palm (Craig-Hallum): Can you quantify the record industrial polymer printer order?
  Response: CEO confirms it's a very large, multi-quarter order for reusable rocket casting applications, with shipments already made in Q2 and more ahead, representing a significant long-term revenue stream.

• Question from Greg Palm (Craig-Hallum): Do you have line of sight to returning to double-digit growth?
  Response: CEO agrees with the positive trend but prefers a conservative, quarter-by-quarter approach, focusing on solid growth and profitability without overreaching.

• Question from Kiran McCabe (Cantor Fitzgerald): Are you seeing better visibility in price-sensitive industrial markets?
  Response: CEO notes consumer-facing markets remain challenging, but high-growth core markets (aerospace, data center) are dominant and will become increasingly dominant over time.

• Question from Kiran McCabe (Cantor Fitzgerald): What are the levers to get to positive EBITDA and the timing?
  Response: CEO links path to profitability to continued printer volume growth driving material pull-through on the polymer side and metal part production, which will improve gross margins.

• Question from Kiran McCabe (Cantor Fitzgerald): Are you working with hyperscalers and utilities on energy/power generation?
  Response: CEO states the primary engagement is with OEMs and hyperscaler suppliers on nuclear and energy applications, leveraging a new CRADA with a nuclear research lab for materials development.

Contradiction Point 1

Growth Outlook and Trajectory

Contradiction on the company's growth drivers and the optimism for near-term revenue growth.

Greg Palm (Craig-Hallum) - Greg Palm (Craig-Hallum)

2026Q2: Positive trajectory is evident... focusing on solid quarterly growth. - Dr. Jeffrey Graves(CEO)

"Does the company have visibility on returning to double-digit growth?" - Greg Palm (Craig-Hallum Capital Group LLC, Research Division)

2026Q1: The outlook is cautiously optimistic, with new products launching as the world situation allows. - Jeffrey Graves(CEO)

Contradiction Point 2

Timeline for Achieving Positive EBITDA

Contradiction on the expected timing for reaching adjusted EBITDA profitability.

Kiran McCabe (Cantor Fitzgerald) - Kiran McCabe (Cantor Fitzgerald)

2026Q2: Key to profitability is improving gross margins... This follows from current printer sales growth. - Dr. Jeffrey Graves(CEO)

What strategies and timeline are expected to achieve positive EBITDA? - Greg Palm (Craig-Hallum Capital Group LLC, Research Division)

2026Q1: The company targeting adjusted EBITDA breakeven for the full year. - Phyllis Nordstrom(CFO)

Contradiction Point 3

Gross Margin Trajectory

Gross margin guidance shifts from expecting a sequential improvement to predicting a near-term decline.

James Ricchiuti (Needham & Company) - James Ricchiuti (Needham & Company)

2026Q2: Gross margins will be impacted by a higher mix of printer sales in Q4. - Phyllis Nordstrom(CFO)

What's the outlook for gross margins and OpEx in the second half of the year? - Greg Palm (Craig-Hallum Capital Group LLC)

2025Q4: The Q1 guide does imply a meaningful sequential improvement in gross margin, supported by continued cost savings and anticipated better pricing. - Phyllis Nordstrom(CFO) & Jeffrey Graves(CEO)

Contradiction Point 4

Operating Expense Outlook

Forecast for OpEx stability in 2026Q2 contradicts earlier expectation of a steep drop-off in Q3 and Q4.

James Ricchiuti (Needham & Company) - James Ricchiuti (Needham & Company)

2026Q2: OpEx is expected to remain stable, similar to the first half of the year. - Phyllis Nordstrom(CFO)

How are gross margins and OpEx expected to perform in the second half of the year? - James Ricchiuti (Needham & Company, LLC)

2025Q4: For 2026, expect slight increases in Q1 and Q2, with a steep drop-off in Q3 and Q4 to normalize year-over-year. - Phyllis Nordstrom(CFO)

Contradiction Point 5

Outlook for Returning to Double-Digit Growth

Mixed messaging on the path to and confidence in achieving double-digit revenue growth.

Greg Palm (Craig-Hallum) - Greg Palm (Craig-Hallum)

2026Q2: Positive trajectory is evident, but guidance is kept conservative, focusing on solid quarterly growth... - Dr. Jeffrey Graves(CEO)

Do you expect to return to double-digit growth? - Troy Jensen (Lake Street Capital Markets)

2025Q3: The focus is currently on executing the cost savings plan... The original target for profitability and positive cash flow in a normalized environment is revenue of approximately $70 million. - Jeffrey Graves(CEO)

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