Fourth quarter revenue of $167.0 million, 17.3% growth over fourth quarter 2020
Fourth quarter GAAP net loss of $4.8 million, or $0.07 per diluted share, and non-GAAP net income of $0.5 million, or $0.01 per diluted share
Generated $4.4 million of cash from operations during the fourth quarter
$502.2 million cash and equivalents and no debt at year end 2021

Stratasys Ltd. (NASDAQ:SSYS), a leader in polymer 3D printing solutions, today announced financial results for the fourth quarter and full year 2021.

Summary - Fourth Quarter 2021 Financial Results Compared to Fourth Quarter 2020:

Revenue of $167.0 million compared to $142.4 million.
GAAP gross margin of 43.7%, compared to 46.4%.
Non-GAAP gross margin of 48.7%, compared to 49.5%.
GAAP operating loss of $16.2 million, compared to an operating loss of $2.5 million.
Non-GAAP operating income of $1.7 million, compared to non-GAAP operating income of $8.3 million that reflected lower operating expenses due to a 4-day work-week.
GAAP net loss of $4.8 million, or $0.07 per diluted share, compared to net income of $11.0 million, or $0.20 per diluted share that included a one-time $14 million tax benefit.
Non-GAAP net income of $0.5 million, or $0.01 per diluted share, compared to non-GAAP net income of $7.0 million, or $0.13 per diluted share.
Adjusted EBITDA of $7.9 million, compared to $14.6 million.
Cash generated from operations of $4.4 million, compared to $23.7 million, reflecting higher inventory purchasing year over year.

Dr. Yoav Zeif, Stratasys' Chief Executive Officer, stated, "Our strong execution and results for the fourth quarter were driven by growth across all technologies and regions. Revenue was up over 17%, led by systems growth of 26% as we delivered our highest systems sales in three years, helping to generate our sixth consecutive quarter of positive operating cash flow."

Dr. Zeif continued, "In 2021 we established the necessary infrastructure to drive our company's success in the years to come with key acquisitions and successful product launches. We strengthened our industry leadership position as we reinvigorated and expanded our entire polymer 3D printing portfolio. A multitude of industries continues to embrace the many benefits of additive manufacturing and incorporate them into their mass production of parts, and Stratasys is at the forefront of this ongoing transformation. Equipped with best-in-class offerings, unmatched Go-to-Market network and support infrastructure, a strong balance sheet, and the best 3D printing talent relentlessly focused on execution, we are positioned to further build on our momentum in 2022. As we look ahead, we are energized and excited for the future of Stratasys."

Summary - 2021 Financial Results Compared to 2020:

Revenue of $607.2 million compared to $520.8 million.
GAAP gross margin of 42.8%, compared to 42.1%.
Non-GAAP gross margin of 47.8%, compared to 47.6%.
GAAP operating loss of $79.2 million, compared to a $456.0 million operating loss that was primarily due to a $386.2 million non-cash goodwill impairment.
Non-GAAP operating loss of $1.7 million, compared to a $9.1 million non-GAAP operating loss.
Adjusted EBITDA of $22.6 million, compared to $16.0 million.
GAAP net loss of $62.0 million, or ($0.98) per diluted share, compared to a loss of $443.7 million, or ($8.08) per diluted share, that included a non-cash $386.2 million goodwill impairment.
Non-GAAP net loss of $4.3 million, or $(0.07) per diluted share, compared to non-GAAP net loss of $13.9 million, or $(0.25) per diluted share.
Cash generated from operations of $35.8 million, compared to $27.8 million.

Financial Outlook:

Based on current market conditions and assuming that the impacts of the COVID-19 pandemic or global supply chain costs do not impede economic activity further, the Company is providing the following outlook for 2022:

Full year revenue of $680 million to $695 million.
Sequential quarterly revenue growth.
First quarter revenue growth expected to reach high teens as a percentage over first quarter of 2021.
Based on current logistics and materials costs, full year gross margins of flat to slightly higher, with improved year-over-year growth in the second half of 2022.
First quarter gross margins expected to be relatively flat compared to first quarter 2021.
Targeting long-term gross margins over 50%.
Full year-operating expenses $20 million to $25 million higher than 2021, primarily due to ongoing investments in new products to drive higher revenue.
Full year non-GAAP operating margins slightly above 2%, with small losses in the first half and profitable contribution in the second half of the year.
Targeting long-term double digit non-GAAP operating margins.
GAAP net loss of $74 million to $67 million, or ($1.11) to ($1.00) per diluted share.
Non-GAAP net income of $10 million to $13 million, or $0.14 to $0.19 per diluted share.
Adjusted EBITDA of $38 million to $41 million.
Capital expenditures of $20 million to $25 million.

Non-GAAP earnings guidance excludes $37 million to $38 million of projected amortization of intangible assets, $31 million to $33 million of share-based compensation expense, and reorganization and other expenses of $14 million to $15 million. Non-GAAP guidance includes tax adjustments of $2 million to $1 million on the above non-GAAP items.

Appropriate reconciliations between GAAP and non-GAAP financial measures are provided in a table at the end of our press release and slide presentation, with itemized detail concerning the non-GAAP financial measures.

Stratasys Ltd. Fourth Quarter 2021 Webcast and Conference Call Details

The Company plans to webcast its conference call to discuss its fourth quarter 2021 financial results on Wednesday, February 23, 2022, at 8:30 a.m. (ET).

The investor conference call will be available via live webcast on the Stratasys Web site at investors.stratasys.com, or directly at the following web address:

https://themediaframe.com/mediaframe/webcast.html?webcastid=UEHU5sS7

To participate by telephone, the U.S. toll-free number is 877-407-0619 and the international dial-in is +1-412-902-1012. Investors are advised to dial into the call at least ten minutes prior to the call to register. The webcast will be available for six months at investors.stratasys.com, or by accessing the above-provided web address.

Stratasys is leading the global shift to additive manufacturing with innovative 3D printing solutions for industries such as aerospace, automotive, consumer products and healthcare. Through smart and connected 3D printers, polymer materials, a software ecosystem, and parts on demand, Stratasys solutions deliver competitive advantages at every stage in the product value chain. The world's leading organizations turn to Stratasys to transform product design, bring agility to manufacturing and supply chains, and improve patient care.

To learn more about Stratasys, visit www.stratasys.com, the Stratasys blog, Twitter, LinkedIn, or Facebook. Stratasys reserves the right to utilize any of the foregoing social media platforms, including the Company's websites, to share material, non-public information pursuant to the SEC's Regulation FD. To the extent necessary and mandated by applicable law, Stratasys will also include such information in its public disclosure filings.

Stratasys is a registered trademark and the Stratasys signet is a trademark of Stratasys Ltd. and/or its subsidiaries or affiliates. All other trademarks are the property of their respective owners.

Cautionary Statement Regarding Forward-Looking Statements

The statements in this press release regarding Stratasys' strategy, and the statements regarding its projected future financial performance, including the financial guidance concerning its expected results for 2022 and beyond, are forward-looking statements reflecting management's current expectations and beliefs. These forward-looking statements are based on current information that is, by its nature, subject to rapid and even abrupt change. Due to risks and uncertainties associated with Stratasys' business, actual results could differ materially from those projected or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to: the degree of our success at introducing new or improved products and solutions that gain market share; the degree of growth of the 3D printing market generally; the impact of potential shifts in the prices or margins of the products that we sell or services that we provide, including due to a shift towards lower margin products or services; the impact of competition and new technologies; potential further charges against earnings that we could be required to take due to impairment of additional goodwill or other intangible assets; the extent of our success at successfully consummating and integrating into our existing business acquisitions or investments in new businesses, technologies, products or services; the strength and duration of, and degree of recovery from, the COVID-19 pandemic in the markets in which we operate; potential changes in our management and board of directors; global market, political and economic conditions, and in the countries in which we operate in particular (including risks related to the impact of coronavirus on our supply chain and business); costs and potential liability relating to litigation and regulatory proceedings; risks related to infringement of our intellectual property rights by others or infringement of others' intellectual property rights by us; the extent of our success at maintaining our liquidity and financing our operations and capital needs; the impact of tax regulations on our results of operations and financial condition; and those additional factors referred to in Item 3.D "Key Information - Risk Factors", Item 4, "Information on the Company", Item 5, "Operating and Financial Review and Prospects," and all other parts of our Annual Report on Form 20-F for the year ended December 31, 2021, which we are filing with the U.S. Securities and Exchange Commission, or SEC, on or about the date hereof (the "2021 Annual Report"). Readers are urged to carefully review and consider the various disclosures made throughout our 2021 Annual Report and the Reports of Foreign Private Issuer on Form 6-K that attach Stratasys' unaudited, condensed consolidated financial statements and its review of its results of operations and financial condition, for the quarterly periods throughout 2022, which will be furnished to the SEC throughout 2022, and our other reports filed with or furnished to the SEC, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects. Any guidance provided, and other forward-looking statements made, in this press release are provided or made (as applicable) as of the date hereof, and Stratasys undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Use of Non-GAAP Financial Measures

The non-GAAP data included herein, which excludes certain items as described below, are non-GAAP financial measures. Our management believes that these non-GAAP financial measures are useful information for investors and shareholders of our company in gauging our results of operations (i) on an ongoing basis after excluding mergers, acquisitions and divestments related expense or gains and reorganization-related charges or gains, legal provisions and (ii) excluding non-cash items such as stock-based compensation expenses, acquired intangible assets amortization, including intangible assets amortization related to equity method investments, impairment of long-lived assets and goodwill, revaluation of our investments and the corresponding tax effect of those items. These non-GAAP adjustments either do not reflect actual cash outlays that impact our liquidity and our financial condition or have a non-recurring impact on the statement of operations, as assessed by management. These non-GAAP financial measures are presented to permit investors to more fully understand how management assesses our performance for internal planning and forecasting purposes. The limitations of using these non-GAAP financial measures as performance measures are that they provide a view of our results of operations without including all items indicated above during a period, which may not provide a comparable view of our performance to other companies in our industry. Investors and other readers should consider non-GAAP measures only as supplements to, not as substitutes for or as superior measures to, the measures of financial performance prepared in accordance with GAAP. Reconciliation between results on a GAAP and non-GAAP basis is provided in a table below.

Stratasys Ltd.

Consolidated Balance Sheets
(in thousands, except share data)

	December 31,			December 31,
		2021			2020

ASSETS

Current assets
Cash and cash equivalents	$	243,179		$	272,092
Short-term deposits		259,000			27,000
Accounts receivable, net of allowance for credit losses of $0.5 and $0.9 million as of December 31, 2021 and December 31, 2020		129,382			106,068
Inventories		129,147			131,672
Prepaid expenses		6,871			6,717
Other current assets		33,123			16,943

Total current assets		800,702			560,492

Non-current assets
Property, plant and equipment, net		203,295			201,232
Goodwill		65,144			35,694
Other intangible assets, net		152,244			131,569
Operating lease right-of-use assets		14,651			21,298
Long-term investments		28,667			24,268
Other non-current assets		12,519			15,449

Total non-current assets		476,520			429,510

Total assets	$	1,277,222		$	990,002

LIABILITIES AND EQUITY

Current liabilities
Accounts payable	$	51,976		$	16,987
Accrued expenses and other current liabilities		55,358			31,061
Accrued compensation and related benefits		44,684			25,659
Deferred revenues - short term		51,174			49,165
Operating lease liabilities - short term		7,276			9,282

Total current liabilities		210,468			132,154

Non-current liabilities
Deferred revenues - long term		21,133			14,227
Deferred income taxes		7,341			42
Operating lease liabilities - long term		7,693			12,567
Contingent consideration		53,478			37,400
Other non-current liabilities		21,095			34,017

Total non-current liabilities		110,740			98,253

Total liabilities		321,208			230,407

Redeemable non-controlling interests		-			227

Equity
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands
shares; 65,667 thousands shares and 56,617 thousands shares issued
and outstanding at December 31, 2021 and December 31, 2020, respectively		182			155
Additional paid-in capital		3,012,481			2,753,955
Accumulated other comprehensive loss		(8,771	)		(8,846	)
Accumulated deficit		(2,047,878	)		(1,985,896	)
Total equity		956,014			759,368

Total liabilities and equity	$	1,277,222		$	990,002

Stratasys Ltd.

Consolidated Statements of Operations

(in thousands, except per share data)

	Three Months Ended December 31,						Twelve Months Ended December 31,
		2021			2020			2021			2020
	(Unaudited)			(Unaudited)
Net sales
Products	$	118,040		$	99,185		$	417,557		$	339,782
Services		48,976			43,210			189,662			181,035
		167,016			142,395			607,219			520,817

Cost of sales
Products		59,470			44,679			210,941			171,235
Services		34,503			31,697			136,200			130,188
		93,973			76,376			347,141			301,423

Gross profit		73,043			66,019			260,078			219,394

Operating expenses
Research and development, net		22,620			18,953			88,303			84,012
Selling, general and administrative		66,584			49,595			250,937			205,224
Goodwill impairment		-			-			-			386,154
		89,204			68,548			339,240			675,390

Operating loss		(16,161	)		(2,529	)		(79,162	)		(455,996	)

Gain from step acquisition		14,400			-			14,400			-

Financial income (expense), net		(692	)		273			(2,075	)		(575	)

Loss before income taxes		(2,453	)		(2,256	)		(66,837	)		(456,571	)

Income tax benefit (expenses)		(2,103	)		14,144			3,906			16,394

Share in profit (loss) of associated companies		(280	)		(1,200	)		949			(3,939	)

Net income (loss)		(4,836	)		10,688			(61,982	)		(444,116	)

Net loss attributable to non-controlling interests		-			(341	)		-			(395	)

Net income (loss) attributable to Stratasys Ltd.	$	(4,836	)	$	11,029		$	(61,982	)	$	(443,721	)

Net income (loss) per ordinary share attributable to Stratasys Ltd.
Basic	$	(0.07	)	$	0.20		$	(0.98	)	$	(8.08	)
Diluted	$	(0.07	)	$	0.20		$	(0.98	)	$	(8.08	)

Weighted average ordinary shares outstanding
Basic		65,196			55,118			63,471			54,918
Diluted		65,196			55,318			63,471			54,918


		Three Months Ended December 31,
			2021		Non-GAAP				2021		2020		Non-GAAP				2020
		GAAP			Adjustments			Non-GAAP		GAAP			Adjustments			Non-GAAP
		U.S. dollars and shares in thousands (except per share amounts)

	Gross profit (1)	$	73,043		$	8,255		$	81,298	$	66,019		$	4,520		$	70,539
	Operating income (loss) (1,2)		(16,161	)		17,822			1,661		(2,529	)		10,861			8,332
	Net income (loss) attributable to Stratasys Ltd. (1,2,3)		(4,836	)		5,355			519		11,029			(4,001	)		7,028
	Net income (loss) per diluted share attributable to Stratasys Ltd. (4)	$	(0.07	)	$	0.08		$	0.01	$	0.20		$	(0.07	)	$	0.13


(1)	Acquired intangible assets amortization expense					6,024								3,411
	Non-cash stock-based compensation expense					866								347
	Restructuring and other related costs					1,185								762
	Impairment charges					180								-
						8,255								4,520

(2)	Acquired intangible assets amortization expense					2,280								2,290
	Non-cash stock-based compensation expense					6,971								3,962
	Restructuring and other related costs					373								449
	Revaluation of investments					(1,859	)							-
	Contingent consideration					(20	)							-
	Legal and other expenses (income)					1,823								(360	)
						9,568								6,341
						17,822								10,861

(3)	Corresponding tax effect					1,906								(15,009	)
	Equity method related amortization, divestments and impairments					27								483
	Adjustments attributable to non-controlling interest					-								(336	)
	Gain from obtaining control					(14,400	)							-
					$	5,355							$	(4,001	)
(4)	Weighted average number of ordinary shares outstanding- Diluted		65,196						66,820		55,318						55,318


		Twelve Months Ended December 31,
			2021		Non-GAAP				2021			2020		Non-GAAP				2020
		GAAP			Adjustments			Non-GAAP			GAAP			Adjustments			Non-GAAP
		U.S. dollars and shares in thousands (except per share amounts)

	Gross profit (1)	$	260,078		$	30,447		$	290,525		$	219,394		$	28,582		$	247,976
	Operating income (loss) (1,2)		(79,162	)		77,479			(1,683	)		(455,996	)		446,848			(9,148	)
	Net income (loss) attributable to Stratasys Ltd. (1,2,3)		(61,982	)		57,639			(4,343	)		(443,721	)		429,820			(13,901	)
	Net income (loss) per diluted share attributable to Stratasys Ltd. (4)	$	(0.98	)	$	0.91		$	(0.07	)	$	(8.08	)	$	7.83		$	(0.25	)


(1)	Acquired intangible assets amortization expense					22,392									15,607
	Non-cash stock-based compensation expense					3,092									1,771
	Restructuring and other related costs					1,642									5,948
	Impairment charges					3,321									5,256
						30,447									28,582

(2)	Acquired intangible assets amortization expense					8,878									8,720
	Non-cash stock-based compensation expense					27,885									18,433
	Goodwill impairment					-									386,154
	Impairment of long-lived assets					1,447									-
	Restructuring and other related costs					2,743									4,312
	Revaluation of investments					(1,303	)								-
	Contingent consideration					570									-
	Legal and other expenses					6,812									647
						47,032									418,266
						77,479									446,848

(3)	Corresponding tax effect					(864	)								(17,405	)
	Equity method related amortization, divestments and impairments					(4,576	)								713
	Adjustments attributable to non-controlling interest					-									(336	)
	Gain from obtaining control					(14,400	)								-
					$	57,639								$	429,820

(4)	Weighted average number of ordinary shares outstanding- Diluted		63,471						63,471			54,918						54,918

Stratasys Ltd.

Reconciliation of GAAP to Non-GAAP Forward Looking Guidance

Fiscal Year 2022

(in millions, except per share data)


GAAP net loss			($74) to ($67)

Adjustments
Stock-based compensation expense			$31 to $33
Intangible assets amortization expense			$37 to $38
Reorganization Related Expense			$14 to $15
Tax expense (benefit) related to Non-GAAP adjustments			($2) to ($1)

Non-GAAP net income			$10 to $13

GAAP diluted loss per share			($1.11) to ($1.00)

Non-GAAP diluted earnings per share			$0.14 to $0.19

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Stratasys Releases Fourth Quarter and Full Year 2021 Financial Results