3D Systems Q2 2025: Navigating Contradictions in Tariffs, Dental Growth, and MedTech Revenue

Tariff impact and manufacturing in-sourcing, dental market growth strategy and penetration timeline, cost reduction strategy and revenue impact, MedTech revenue breakdown, and healthcare business outlook are the key contradictions discussed in 3D Systems' latest 2025Q2 earnings call.



Revenue Decline and Market Challenges:
- 3D Systems reported a 16% year-over-year decline in revenue for Q2 2025, with a significant impact on industrial solutions revenues.
- The decline was primarily due to a rapid drop in customers' CapEx spending for new production capacity due to uncertainty around tariffs.

Cost Reduction and Profitability Initiatives:
- The company plans to achieve over $85 million in annualized savings by mid-2026 through restructuring and efficiency improvements.
- This initiative aims to align costs with current market realities and improve gross margins by leveraging efficiencies from in-sourced manufacturing and supply chain management.

Growth in Healthcare and Aerospace:
- 3D Systems' healthcare solutions revenues were $45 million, with a 13% increase in MedTech revenue over the previous year.
- Growth in the healthcare sector was driven by expanding orthopedic-related products and services, while the Aerospace business nearly doubled revenues from the previous year.

Impact of Tariffs and Cost Management:
- The company faced cost pressures from tariffs, but offset this through cost efficiencies and automation, leading to a 27% reduction in non-GAAP operating expenses year-over-year.
- Efforts to mitigate tariff impacts included in-sourcing manufacturing and supply chain operations, reducing contracted employee costs, and leveraging automation in back-office operations.

Regenerative Medicine Advancements:
- The company achieved a significant milestone in its regenerative medicine program, which aims to develop the first 3D-printed human lung.
- This milestone marks progress in printing technology that supports the development of a 3D-printed human lung, potentially transforming organ transplantation.