Stratasys Ltd.
03/05/2026 | Press release | Distributed by Public on 03/05/2026 11:59
Annual Report for Fiscal Year Ending December 31, 2025 (Form 20-F)
OPERATING AND FINANCIAL REVIEW AND PROSPECTS.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included in this annual report. The discussion below contains forward-looking statements that are based upon our current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to inaccurate assumptions and known or unknown risks and uncertainties, including those identified in "Cautionary Note Regarding Forward-Looking Statements" and in Item 3.D "Key Information - Risk Factors", above.
A. Operating Results
Overview of Business and Trend Information
We are a global leader in connected, polymer-based 3D printing solutions, across the entire manufacturing value chain. Leveraging distinct competitive advantages that include a broad set of best-in-class 3D printing platforms, software, materials, technology partner ecosystem, innovative leadership, and global GTM infrastructure, we are positioned to capture share in a significant and growing global marketplace, with a focus on manufacturing, which we view as having the largest and fastest growing total addressable market.
Our approximately 2,700 granted and pending additive technology patents to date have been used to create models, prototypes, manufacturing tools, and production parts for a multitude of industries including aerospace, automotive, transportation, healthcare, consumer products, dental, medical, fashion and education. Our products and comprehensive solutions improve product quality, development time, cost, time-to-market and patient care. Our 3D ecosystem of solutions and expertise includes 3D printers, materials, software, expert services, and on-demand parts production. By the end of 2025, we estimate that we derived over 37.5% of our revenues from manufacturing solutions.
A series of acquisitions and other transactions in the last several years has strengthened our leadership in various facets of our business, and has added incremental growth engines to our platform. In December 2020, we entered the market of manufacturing of end-use parts via our acquisition of Origin Laboratories, Inc. and its P3 Programmable PhotoPolymerization technology. Since the first quarter of 2021, we are a provider of industrial stereolithography 3D printers and solutions, and in November 2021, we accelerated our growth in production-scale 3D printing by acquiring the remaining shares of Xaar 3D not then held by us. In September 2022, we improved our competitive stance in the desktop 3D printing segment, disposing of our interest in MakerBot and acquiring instead an approximate 46.5% stake in Ultimaker, a new entity with a broad technology offering and a large scale within that segment. As a result of an October 2022 asset acquisition, we have fully integrated a cloud-based software solution into our GrabCAD® Additive Manufacturing Platform, thereby enabling us to better compete for manufacturing customers for their end-use parts production. In April 2023, we strengthened our portfolio of 3D printing materials by acquiring Covestro and its resins, which are compatible with our Origin P3™, Neo® stereolithography, and H350™ printers. As part of that acquisition, we also significantly expanded our IP portfolio, obtaining ownership over hundreds of patents and pending patents that were held by Covestro. Our materials portfolio was similarly bolstered in May 2025 when we acquired key assets and operations of Forward AM Technologies GmbH, formerly a prominent additive manufacturing materials brand, particularly enhancing our Selective Absorption Fusion (SAF) and Digital Light Processing (DLP) portfolios. Our acquisition in June 2025 of a collection of assets, including the IP portfolio, of Nexa3D, added its lineup of high-speed resin 3D printers to our systems offerings. We have furthermore effected, and expect to continue to effect, smaller acquisitions and investments in other companies from time to time to support execution of our strategy.
Recent Developments
Share Repurchase Plan
On September 16, 2024, we announced that our board of directors had authorized a program for our repurchase of up to $50 million of our ordinary shares from time to time.
Under the share repurchase program, we may affect repurchases by way of a variety of methods, including open market purchases, privately negotiated transactions or otherwise, all in accordance with U.S. securities laws and regulations, including Rule 10b-18 under the Exchange Act. We may also, from time to time, enter into plans that are compliant with Rule 10b5-1 of the Exchange Act to facilitate repurchases of our ordinary shares under the board authorization.
The repurchase program does not obligate us to acquire any particular number or value of ordinary shares, and the repurchase program may be suspended or discontinued at any time at our discretion.
In accordance with Section 7C of the Israeli Companies Regulations (Leniencies for Companies Whose Securities are Listed for Trading Outside of Israel), 5760-2000, the share repurchase program went into effect 30 days after notice of our board of directors' adoption of the repurchase program was provided to our material creditors and secured creditors (if any).
During the year ended December 31, 2024 we repurchased 266 thousand ordinary shares for approximately $2.0 million, at a weighted average cost of $7.50 per share. During the year ended December 31, 2025, we did not repurchase any additional ordinary shares.
Strategic Restructuring Plan
The authorization of our share repurchase program described above was one of a number of strategic actions we have taken to enhance shareholder value, at the conclusion of our previously announced comprehensive process to explore strategic alternatives for our company, in order to maximize value for all Stratasys shareholders, which we had initiated in September 2023 and completed during the second quarter of 2024. The goals of that process were to further solidify our leadership in additive manufacturing, while focusing our business model to deliver a significantly improved and consistently profitable, cash-flow positive additive manufacturing company, throughout cycles. At the conclusion of that process, our board of directors identified restructuring initiatives in two important areas to further those goals and to best position Stratasys to maximize value:
(i) Our first initiative was to adjust our cost structure to better match current market conditions, primarily through an approximate 15% headcount reduction that was expected to drive the majority of $40 million in annual run rate savings. This initiative was expected to generate an annualized EBITDA margin of 8% at then-current revenue levels.
(ii) Our second initiative was to enhance our efforts to remove barriers and help customers increase their pace of adoption of additive manufacturing. This involves addressing the total cost of ownership, which is largely influenced by materials consumption. We have increased our investment of resources to better educate and support our customers' engineers, who are still learning to fully utilize additive manufacturing design and workflow benefits. We have also increased efforts to standardize additive manufacturing to better align with traditional manufacturing processes, making it easier for broader adoption. As part of this initiative, we have been leveraging our scale and breadth of technology to focus our go-to-market efforts on areas we view as the main growth drivers of our business- applications where additive manufacturing presents the most compelling benefits relative to conventional methods.
PIPE Transaction
On April 8, 2025, we completed a private investment in public equity, or PIPE, transaction whereby FF6-SSYS, Limited Partnership (as assignee of Fortissimo Capital Fund VI, L.P.) (together with its affiliates, referred to collectively as Fortissimo), an Israeli private equity fund, invested $120 million in our company and acquired 11,650,485 newly-issued ordinary shares of Stratasys at a price of $10.30 per share, reflecting a premium of 10.6% over the closing market price of the ordinary shares on Nasdaq on January 31, 2025. The PIPE was completed pursuant to a securities purchase agreement, dated February 2, 2025, between our company and FF6-SSYS, Limited Partnership. Upon completion of the PIPE, Fortissimo held approximately 15.5% of our issued and outstanding ordinary shares, which constitutes approximately 14.9% of our issued and outstanding ordinary shares as of February 17, 2026. The additional capital we have received from the PIPE investment has increased our available capital for potential value-enhancing, inorganic opportunities in the 3D printing industry.
Upon the closing of the PIPE, Fortissimo became subject to a lock-up for 18 months (i.e., through October 7, 2026), during which period it will be prohibited from transferring any ordinary shares, subject to limited, customary exceptions. Following that lock-up period, we will be required to file with the SEC a registration statement to register Fortissimo's resale of the ordinary shares sold to it in the PIPE. In connection with the PIPE, our board of directors exempted any acquisitions of ordinary shares by Fortissimo pursuant to the PIPE and thereafter from the application of our then-effective shareholder rights plan. Fortissimo is, however, subject to certain standstill and voting restrictions, including (i) not being permitted to surpass 24.99% ownership of our issued and outstanding ordinary shares, and (ii) not being permitted to vote more than 20% of the outstanding ordinary shares, unless Fortissimo owns 35% or more of the outstanding ordinary shares, which ownership level it can only reach through a tender offer for at least 15% of the issued and outstanding ordinary shares. The closing of such a tender offer would require the approval of our shareholders.
Concurrent with the closing of the PIPE, we entered into a shareholder agreement with FF6-SSYS, Limited Partnership, pursuant to which our board of directors appointed Yuval Cohen, Fortissimo's initial designee, to serve on our board of directors, replacing Yoav Zeif, who remains our chief executive officer. Under the shareholder agreement, Fortissimo is also permitted to designate a non-voting observer who may attend all of our board meetings; Eliezer Blatt was so designated by Fortissimo and affirmed by our board to serve in that position. Under the shareholder agreement, to the extent Fortissimo's beneficial ownership equals at least 20% of the issued and outstanding ordinary shares, if Fortissimo requests, we are required to nominate for election by our shareholders a second Fortissimo designee as a voting member of our board of directors. The number of Fortissimo's board designees is subject to phase-out to the extent Fortissimo's holdings of the ordinary shares drops below certain thresholds.
Business Performance in Macro-Economic Environment
Our current outlook, as well as our results of operations in the year ended December 31, 2025, should be evaluated in light of current global macroeconomic conditions, including certain challenging trends that have also impacted the additive manufacturing industry. Our revenues in 2025 decreased by 3.7% on a year-over-year basis, compared to 2024. This decrease in revenues was mostly due to macro-economic pressure on the capital expenditure budgets of our customers, which has been causing longer sales cycles for our products. On the other hand, we continued our non-GAAP profitability (along with our GAAP net loss) in the year ended December 31, 2025 (please see "Non-GAAP Financial Measures" and "Reconciliation of GAAP to Non-GAAP Results of Operations" further below).
We continue to closely monitor macroeconomic conditions, including the headwinds caused by inflation, moderately high interest rates and other trends that have been adversely impacting economic activity on a global scale, and which have also adversely affected the additive manufacturing industry generally and our company, in particular. We have been assessing, on an ongoing basis, the implications of those global conditions for our operations, supply chain, liquidity, cash flow and customer orders, and have been acting in an effort to mitigate adverse consequences to the extent possible. We estimate that those conditions have impacted us most notably by extending the length of our sales cycles and thereby reducing our products revenues. Assuming that those inflationary pressures ease, and the global economy remains relatively stable, we expect that products revenues will once again improve, as and when we execute on our growth plans and as a result of shorter sales cycles.
Specific developments that may potentially impact our operating performance in an adverse manner include:
•perceived or actual reluctance of central banks in Europe and the U.S. to reduce interest rates in a more aggressive manner, due to fears of inflationary pressure, which would leave interest rates at moderately high levels for a longer period of time, thereby leaving in place unfavorable credit/financing conditions for our customers;
•new import tariffs (which were reimposed in the U.S. by the U.S. presidential administration following a recent U.S. Supreme Court decision that had abrogated the tariffs) have been increasing, and we expect will further increase, more significantly, in 2026, the prices we pay for finished goods that we use in offering our products and services, thereby adversely affecting our gross margins, and, potentially, adversely impacting demand for our products and services in industries and countries in which our affected customers operate;
•the significant hostilities between Israel, on the one hand, and Iran and its sponsored terrorist groups, Hamas, Hezbollah, and the Houthis, on the other hand, which, if lasting for a protracted period and worsening Israeli or global economic conditions, could have an adverse impact on our operations due to one of our global headquarters and one of our manufacturing facilities being located in Israel (although we seek to ensure that our stakeholders and customers are not adversely impacted by the hostilities to the extent we can prepare for and address difficulties as they arise);
•if currency exchange rates continue to reflect a weakened U.S. dollar relative to the NIS and Euro, the U.S. dollar value of our expenses incurred in NIS would be more significant, thereby increasing our U.S. dollar-denominated operating expenses and hurting our results of operations; and
•potential contraction of economic activities and recessionary conditions that could arise as a result of a weaker labor market and a decrease in consumer demand.
We cannot provide any assurances as to the extent of our resilience to the adverse impact of these specific developments in future periods.
We ended 2025 with $244.5 million in cash, cash equivalents and short-term deposits. We believe that we are well suited to continue to manage the current global macro-economic climate with a strong balance sheet and no debt, while focusing on cost controls and cash generation. We have continued to selectively apply certain cost controls, while ensuring that our new product introduction, or NPI, programs are well-funded, and we plan to continue investing as needed in order to support our new product development programs. We may consider deploying our available capital towards potential value-enhancing, inorganic opportunities in the 3D printing industry.
Key measures of our performance
Revenues
Our revenues primarily derive from (i) sales of our products, which include both our AM systems and related consumable materials, (ii) provision of related services, and (iii) our direct manufacturing service. We generate revenues and deliver services principally through the following channels:
•sales to resellers, who purchase and resell our products and who provide support services for our printing systems;
•sales of systems that are marketed by independent sales agents, pursuant to which we sell directly to end-users, pay commissions to such agents, and directly handle the sale of consumables and provision of support services; and
•direct sales of systems (and all related products and services) as well as our direct manufacturing solutions to our customers, without the involvement of independent sales agents.
Product revenues
Product revenues are influenced by a number of factors, including, among other things, (i) the adoption rate for our products, (ii) end-user product design application and manufacturing activity, and (iii) the capital expenditure budgets of end-users and potential end-users, all of which may be significantly influenced by macroeconomic factors. Product revenues are also impacted by the mix of 3D printers that we sell. Purchases of our 3D printing and production systems, especially our higher-end, higher-priced systems, typically involve longer sales cycles.
Product revenues also depend upon the volume of consumables that we sell. Sales of our consumable materials are linked to the number of AM systems that are installed and active worldwide. Sales of consumables are also driven by system usage, which is generally a function of the size of the particular system and the level of design and manufacturing activity and budget of the particular end-user. Larger systems generally use greater amounts of consumables due to their greater capacity and the higher levels of design and production.
Services revenues
Services revenues derive from (i) maintenance contracts and initial systems warranty; (ii) direct manufacturing paid-parts services; and (iii) other professional service contracts. In addition, in connection with direct sales, we generally charge separately for installation and training. Additional services revenues are generated from services contracts, most often entered into directly with end-users subsequent to the expiration of the initial warranty period.
Costs of revenues
Our costs of revenues consist of costs of products and costs of services. Costs of products consist primarily of components and subassemblies purchased for the manufacture of our AM systems and raw materials, such as thermoplastic and photopolymer materials, for the manufacture of our consumables, as well as any royalties paid with respect to sales of certain of those consumables. Costs of products also include manufacturing and manufacturing-related labor costs, indirect production costs and depreciation, taxes, customs duties, and tariff costs, as well as amortization expense which is mainly related to developed technology assets acquired as part of our business combinations.
Our costs of services revenues consist primarily of costs of our service personnel, material and other production costs of our direct manufacturing service business, and installation costs, which include engineers dedicated to on-site training and support, and travel costs of these engineers. Both costs of products and costs of services include related facilities costs.
Our most significant components of costs of revenues are costs of materials used for our products, wages and related benefits costs, which together accounted for approximately 60% of our total direct cost of revenues for the year ended December 31, 2025. Import tariffs, which increased during 2025 due to U.S.-imposed new tariffs vis-à-vis the EU, China and other jurisdictions (including Israel), impact the prices we pay for finished goods that we use in offering our products and services, and, consequently, our costs of revenues. To the extent those tariffs remain in place at the same rates in 2026 (in particular, for finished goods imported into the U.S. from Israel), even after the recent Supreme Court decision regarding the legality of tariffs, our costs of revenues, and, consequently, our gross margins, will be significantly adversely affected. Any reduction in tariff rates or refund of past tariffs paid, on the other hand, would positively impact our costs of revenues.
An additional significant component of our costs of revenues is the amortization expense that we primarily incur in connection with developed technology assets acquired as part of our business combinations. These amortization expenses vary based on the timing and type of acquisitions and estimated useful lives of the respective intangible assets. These amortization expenses were $18.3 million, $18.6 million and $19.6 million for the years ended December 31, 2025, 2024 and 2023, respectively. No impairment charges were recorded with respect to our acquired intangible assets during 2025 or 2024. Refer to Note 9 to our consolidated financial statements included in Item 18 of this annual report.
For the year ended December 31, 2025, a hypothetical 10% rise in commodity prices for raw materials would have caused an approximate $13.0 million increase in costs of revenues in our Consolidated Statements of Operations and Comprehensive loss. As to wages and related benefits, a 10% increase in wages due to wage inflation would have caused an approximate $6.5 million increase in costs of revenues in our Consolidated Statements of Operations and Comprehensive loss. We also believe that inflation has not had a material effect on our operations or on our financial condition during the three most recent fiscal years, as we have used price increases to offset the cost pressures caused by inflation.
Currently, we do not foresee a significant change in either the raw materials used for production or wage inflation that would materially impact our business. For further information, please see "Item 11. Quantitative and Qualitative Disclosures About Market Risk" in this annual report.
Gross profit
The gross profit and gross margin for our products are influenced by a number of factors. The most important of these is the mix of our products sold. Specifically, the gross margins on our higher-end AM systems, as well as on our consumables, are typically higher than the gross margins on our entry-level products. Accordingly, an increase in the share of revenues of our entry-level products out of total revenues could cause our profit margins to decrease. Furthermore, we believe that as our worldwide installed base of AM systems increases, subsequent sales of our proprietary consumables will also increase. We also seek to reduce our costs of revenues by improving our ability to use less costly components, better management of our inventories levels and increasing manufacturing efficiencies in the production of our systems. In addition, we will also seek to achieve lower material costs and leverage our overall capabilities in our direct manufacturing service business.
Products gross margins are also impacted by the mix of revenues generated from sales to resellers based in different geographical areas as opposed to sales that are facilitated by independent sales agents or directly by us.
Service gross margins are influenced mainly by the volume of revenues generated from our direct manufacturing service business as well as the ratio of service engineers to our installed base in a given geographic area.
Operating expenses
Our operating expenses for 2025 consisted of (i) research and development expenses, and (ii) selling, general and administrative expenses.
Research and development expenses, net
Our research and development activities consist of projects aimed at developing new printing systems and materials, and projects aimed at enhancing the capabilities of our existing product lines, as well as significant technology platform and applications, and developments for our current technologies, including our integrated software. We also seek to develop disruptive technologies and other process improvement solutions in the additive manufacturing ecosystem. Our research and development expenses consist primarily of employee compensation and employee-related personnel expenses, materials, laboratory supplies, costs for related software and costs for facilities. Expenditures for research, development and engineering of products are expensed as incurred. Our research and development efforts are essential to our future growth and our ability to remain competitive in the AM market. We work closely with existing and potential customers, distribution channels and major resellers, who provide significant feedback for product development and innovation.
We are also entitled to reimbursements from certain government funding plans. These reimbursements are recognized as a reduction of expenses as the related cost is incurred. We are not required to pay royalties on sales of products developed using our government funding.
Selling, general and administrative expenses
Our selling, general and administrative expenses include employee compensation and employee-related expenses for marketing, sales and other sales-operation positions, and for managerial and administrative functions, including executive officers, accounting, legal, information technology and human resources. This category of expenses also covers commissions, advertising and promotions expenses, professional service fees, respective depreciation, amortization expenses related to certain intangible assets, as well as associated overhead.
Commissions consist of sales-based commissions to independent sales agents and internal sales personnel. Commission rates vary, depending on the geographic location of the agent, type of products sold, and the degree of achievement of certain performance targets. Our advertising and promotion expenses consist primarily of media advertising costs, trade and consumer marketing expenses and public relations expenses which aim to strengthen the leadership of our brand in key vertical markets.
Facilities costs that are included in our selling, general and administrative expenses include an allocated portion of the occupancy costs for our facilities in countries where sales, marketing and administrative personnel are located. Professional service fees for accounting and legal services are also included in selling, general and administrative expenses.
2025 Financial Highlights
Significant highlights of our financial performance in 2025 included:
•Revenues decreased by $21.4 million, or 3.7%, compared to 2024. The decrease was driven by a decrease in products revenues attributable to longer sales cycles. These revenue results also evidence macro-economic pressure on capital expenditure budgets of our customers, which has been causing longer sales cycles for our systems. Services revenues also decreased by $9.7 million in 2025, which was primarily attributable to a decrease in systems revenues in recent periods.
•Operating expenses decreased by $42.7 million, or 12.5% compared to 2024. The decrease was primarily driven by a $41.1 million reduction in employee-related and other costs (including restructuring charges) resulting from our restructuring initiative and its continued benefits, as well as $9.1 million lower charges related to revaluation and sale of investments, partially offset by a change of $9.3 million in the amount of contingent consideration liabilities in 2025.
•Net loss amounted to $104.3 million, or basic and diluted net loss per share of $1.28, in 2025, compared to net loss of $120.3 million, or basic and diluted net loss per share of $1.70, in 2024. That decrease in net loss in 2025 was mainly attributable to a $13.2 million decrease in our operating loss and an increase of $8.7 million in financial income, net, partially offset by an increase of $5.8 million in our share in losses of associated companies as a result of impairment charges.
•Total cash and cash equivalents and restricted cash amounted to $95.4 million and short-term deposits amounted to $150.0 million as of December 31, 2025, which, when aggregated together, reflected an increase of $93.8 million compared to the corresponding total amount as of December 31, 2024 ($151.6 million, consisting of $71.1 million in cash and cash equivalents and restricted cash, and $80.5 million in short-term deposits). The aggregate increase in cash, cash equivalents, restricted cash and short-term deposits in 2025 was primarily due to our receipt of $120 million from the PIPE investment of Fortissimo in our company that was completed during April 2025 and $15.1 million of cash from operating activities during 2025, while using $42.7 million of cash in investing activities, net of cash used for investments in short-term bank deposits.
Results of Operations
We are providing within this section a discussion and analysis of our historical statement of operations data in accordance with accounting principles generally accepted in the United States of America, or GAAP. While our financial statements included in Item 18 of this annual report include data for each of the three years ended December 31, 2025, 2024 and 2023, the discussion and analysis contained in this Item 5.A is limited to a comparison of our results of operations for the years ended December 31, 2025 and 2024. For a discussion and analysis of our results for the year ended December 31, 2024, and a comparison of those results with those of the year ended December 31, 2023, please see "Item 5. Operating and Financial Review and Prospects-A. Operating Results-Results of Operations" in our annual Report on Form 20-F for the year ended December 31, 2024, which we filed with the SEC on March 6, 2025.
The following table sets forth certain financial data derived from our Consolidated Statements of Operations and Comprehensive Loss, presented as percentages of our revenues for the years indicated:
| Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| % of Revenues | ||||||||
| Revenues | 100.0 | % | 100.0 | % | ||||
| Cost of revenues | 58.8 | % | 55.1 | % | ||||
| Gross profit | 41.2 | % | 44.9 | % | ||||
| Research and development, net | 14.0 | % | 17.3 | % | ||||
| Selling, general and administrative | 40.4 | % | 42.5 | % | ||||
| Operating loss | (13.2) | % | (15.0) | % | ||||
| Financial income, net | 1.9 | % | 0.3 | % | ||||
| Loss before income taxes | (11.3) | % | (14.7) | % | ||||
| Income tax expenses | 0.6 | % | 0.5 | % | ||||
| Share in losses of associated companies and impairment charges | 7.1 | % | 5.8 | % | ||||
| Net loss | (18.9) | % | (21.0) | % | ||||
Discussion of Results of Operations
The below tables and related discussion present an item by item comparison of our results of operations for the years ended December 31, 2025 and 2024.
Revenues
Our products and services revenues for the last two years, as well as the percentage change from year to year, were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| U.S. $ in thousands | % Change | ||||||||||||||||
| Products | $ | 380,269 | $ | 391,917 | (3.0) | % | |||||||||||
| Services | 170,833 | 180,541 | (5.4) | % | |||||||||||||
| $ | 551,102 | $ | 572,458 | (3.7) | % | ||||||||||||
Our total consolidated revenues in 2025 were $551.1 million, a decrease of $21.4 million or 3.7%, compared to 2024.
Products Revenues
Revenues derived from products (including systems and consumable materials) decreased by $11.6 million, or 3.0%, in 2025 as compared to 2024. The decrease was mainly as a result of a $8.7 million decrease (or 6.2%) in systems revenues, and a decrease of $3.0 million (or 1.2%) in consumables revenues, which were attributable to longer sales cycles. The overall decrease was partially offset by a favorable impact of foreign currency exchange rates of approximately $4.5 million, as well as consumables revenues driven by our recent acquisitions.
Services Revenues
Services revenues (including Stratasys Direct, maintenance contracts, time and materials and other services) decreased by $9.7 million, or 5.4%, in 2025 as compared to 2024. The decrease was primarily attributable to the decrease in systems revenues in recent periods, which impacts the related services that we are requested by our customers to provide, as well as lower SDM revenues of $3.8 million as a result of our divestiture of several businesses in SDM during 2024, partially offset by a favorable impact of foreign currency exchange rates of approximately $1.1 million.
Revenues by Region
Revenue amounts and the percentage of our overall revenues by region for the last two years, as well as the percentage change in revenue amounts for each such region from year to year, were as follows:
| Year Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
|
U.S. $ in thousands
|
% of Revenues
|
U.S. $ in thousands
|
% of Revenues
|
||||||||||||||||||||
| Americas* | $ | 328,735 | 59.7 | % | $ | 341,737 | 59.7 | % | |||||||||||||||
| EMEA | 153,226 | 27.8 | % | 158,465 | 27.7 | % | |||||||||||||||||
| Asia Pacific | 69,141 | 12.5 | % | 72,256 | 12.6 | % | |||||||||||||||||
| $ | 551,102 | 100.0 | % | $ | 572,458 | 100.0 | % | ||||||||||||||||
*The Americas region consists of the United States, Canada and Latin America. The only single country in any region in which revenues exceeded 10% of our consolidated, aggregate revenues in either 2025 or 2024 was the United States, in which revenues amounted to $313.9 million and $322.5 million, in those respective years.
Revenues in the Americas region decreased by $13.0 million, or 3.8%, to $328.7 million in 2025 compared to $341.7 million in 2024. The decrease was mainly attributable to longer sales cycles for products revenues and lower services revenues, as well as lower SDM revenues as a result of our divestiture of several businesses in SDM during 2024.
Revenues in the EMEA region decreased by $5.2 million, or 3.3%, to $153.2 million in 2025 compared to $158.5 million in 2024. The decrease was primarily attributable to longer sales cycles for products revenues, partially offset by a favorable impact of foreign currency exchange rates, and an increase in services revenues.
Revenues in the Asia Pacific region decreased by $3.1 million, or 4.3%, to $69.1 million in 2025 compared to $72.3 million in 2024. The decrease was primarily attributable to lower systems revenues and lower services revenues, partially offset by an increase in consumables revenues.
Gross Profit
Gross profit from our products and services for the last two years, as well as the percentage change from year to year, were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
|
U.S. $ in thousands
|
% Change | ||||||||||||||||
| Gross profit attributable to: | |||||||||||||||||
| Products | $ | 173,794 | $ | 194,110 | (10.5) | % | |||||||||||
| Services | 53,492 | 62,706 | (14.7) | % | |||||||||||||
| $ | 227,286 | $ | 256,816 | (11.5) | % | ||||||||||||
Gross profit as a percentage of revenues for our products and services for the last two years, as well as the change from year to year, were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
|
% of Revenues
|
Change | ||||||||||||||||
| Gross profit as a percentage of revenues from: | |||||||||||||||||
| Products | 45.7 | % | 49.5 | % | (3.8) | % | |||||||||||
| Services | 31.3 | % | 34.7 | % | (3.4) | % | |||||||||||
| Total gross margin | 41.2 | % | 44.9 | % | (3.7) | % | |||||||||||
Gross profit attributable to products revenues decreased by $20.3 million, or 10.5%, to $173.8 million in 2025 compared to $194.1 million in 2024. Gross margin attributable to products revenues decreased to 45.7% in 2025 compared to 49.5% in 2024. Our gross profit and gross margin from products revenues decreased mainly as a result of lower products revenues and unfavorable mix of products revenues with lower gross margins, as well as higher restructuring charges of $5.8 million, and $4.4 million higher U.S. tariff costs.
Gross profit attributable to services revenues decreased by $9.2 million, or 14.7%, to $53.5 million in 2025 compared to $62.7 million in 2024. Gross margin attributable to services revenues decreased to 31.3% in 2025 as compared to 34.7% in 2024. The decrease in gross profit and gross margin from services revenues were mainly attributable to the decrease in services revenues and $1.2 million higher U.S. tariff costs.
Operating Expenses
The amount of each type of operating expense for the last two years, as well as the percentage change between such annual periods, and total operating expenses as a percentage of our total revenues in each such year, were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| U.S. $ in thousands | % Change | ||||||||||||||||
| Research and development, net | $ | 77,304 | $ | 99,142 | (22.0) | % | |||||||||||
| Selling, general and administrative | 222,471 | 243,335 | (8.6) | % | |||||||||||||
| $ | 299,775 | $ | 342,477 | (12.5) | % | ||||||||||||
| Percentage of revenues | 54.4% | 59.8% | |||||||||||||||
Operating expenses were $299.8 million in 2025 compared to operating expenses of $342.5 million in 2024. The decrease in operating expenses was primarily driven by a reduction of $41.1 million in employee-related and other costs (including restructuring charges) resulting from our restructuring initiative and its continued benefits, and $9.1 million lower charges related to revaluation and sale of investments, partially offset by a change of $9.3 million in the amount of contingent consideration liabilities in 2025 compared to 2024.
Research and development expenses, net, decreased by $21.8 million, or 22.0%, in 2025 compared to 2024. Research and development expenses, net, as a percentage of revenues decreased to 14.0% in 2025 compared to 17.3% in 2024. The decrease in research and development expenses, net, in 2025, was
mainly attributable to a reduction of $21.5 million in employee-related and other costs (including restructuring charges) resulting from our restructuring initiative and its continued benefits.
We continue to invest in strategic long-term initiatives that include advancements in our core FDM and PolyJet technologies and in our new powder-based and photopolymer-based, SAF and P3 technologies, advanced composite materials, software and development of new applications that will enhance our current solutions offerings.
Selling, general and administrative expenses in 2025 decreased by $20.9 million, or 8.6%, to $222.5 million, compared to $243.3 million in 2024. The amount of selling, general and administrative expenses constituted 40.4% of our revenues in 2025, as compared to 42.5% in 2024. The absolute decrease, as well as the relative decrease as a percentage of our revenues, were mainly attributable to a reduction of $19.6 million in our employee-related and other costs (including restructuring charges) resulting from our restructuring initiative and its continued benefits, and a $9.1 million reduction in charges related to revaluation and sale of investments, partially offset by a change of $9.3 million in the amount of contingent consideration liabilities in 2025 compared to 2024.
Operating Loss
Operating loss and operating loss as a percentage of our total revenues for the last two years, as well as the percentage change in operating loss between those years, were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| U.S. $ in thousands | % Change | ||||||||||||||||
| Operating loss | $ | (72,489) | $ | (85,661) | (15.4) | % | |||||||||||
| Percentage of revenues | (13)% | (15.0)% | |||||||||||||||
Operating loss for the year ended December 31, 2025 was $72.5 million as compared to an operating loss of $85.7 million for the year ended December 31, 2024. The absolute decrease of $13.2 million in the operating loss, and the decrease as a percentage of revenues, were primarily due to the $42.7 million decrease in operating expenses, partially offset by our decrease in gross profit, which was attributable to the factors identified for the above line items.
Financial Income, net
Financial income, net, which was primarily comprised of foreign currencies effects, interest income and interest expenses, amounted to $10.4 million for the year ended December 31, 2025, compared to financial income, net, of $1.7 million for the year ended December 31, 2024.
Income Taxes
Income tax expenses and income tax expenses as a percentage of loss before income taxes for the last two years, as well as the percentage change between those years, were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| U.S. $ in thousands | % Change | ||||||||||||||||
| Loss before income taxes | $ | (62,103) | $ | (83,985) | (26.1) | % | |||||||||||
| Income tax expenses | $ | 3,082 | $ | 2,973 | 3.7 | % | |||||||||||
| As a percentage of loss before income taxes | (5.0)% | (3.5)% | (1.5) | % | |||||||||||||
We had an effective tax rate of 5.0% for the year ended December 31, 2025 as compared to an effective tax rate of 3.5% for the year ended December 31, 2024. Our effective tax rate in 2025 was primarily impacted by the geographic mix of our earnings and losses, movements in our valuation allowances and changes in our uncertain tax positions.
Our effective tax rate is based on recurring factors, including the geographic mix of foreign taxable income and loss, as well as nonrecurring items that may not be predictable.
For a full reconciliation of our effective tax rate to the Israeli statutory rate of 23% and for further explanation of our provision for income taxes, refer to Note 10 to our consolidated financial statements included in Item 18 of this annual report.
Share in Losses of Associated Companies and Impairment Charges
Share in losses of associated companies and impairment charges reflects our proportionate share of the losses of unconsolidated entities accounted for by using the equity method of accounting. During 2025, we had net losses of our equity method investment in a total amount of $39.1 million, compared to a loss of $33.3 million in 2024. Those losses in 2025 and 2024 include impairment charges in amounts of $33.9 million and $30.1 million, respectively, attributable to our equity investment in Ultimaker (which was the surviving entity following a merger between it and MakerBot). Please refer to Note 2 to our consolidated financial statements included in Item 18 of this annual report.
Net Loss and Net Loss Per Share
Net loss, net loss as a percentage of our total revenues, and diluted net loss per share, for the last two years, as well as the percentage change between those years, were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| U.S. $ in thousands, except per share amounts | % Change | ||||||||||||||||
| Net loss | $ | (104,285) | $ | (120,283) | (13.3) | % | |||||||||||
| As a percentage of revenues | (18.9)% | (21.0)% | |||||||||||||||
| Diluted net loss per share | $ | (1.28) | $ | (1.70) | (24.7) | % | |||||||||||
Net loss for the year ended December 31, 2025 was $104.3 million, as compared to $120.3 million for the year ended December 31, 2024. The absolute decrease in our net loss, as well as the decrease in our net loss as a percentage of revenues, were mainly attributable to a $13.2 million decrease in our operating loss and an increase of $8.7 million in financial income, net, partially offset by an increase of $5.8 million in our share in losses of associated companies as a result of impairment charges.
Diluted net loss per share for the years ended December 31, 2025 and 2024 was $1.28 and $1.70, respectively. The weighted average, basic and diluted number of shares outstanding for the year ended December 31, 2025 was 81.6 million, compared to 70.9 million for the year ended December 31, 2024, which increase was primarily attributable to our issuance of 11,650,485 ordinary shares to Fortissimo in the April 2025 PIPE transaction.
Non-GAAP Financial Measures
The following non-GAAP data for the fiscal years ended December 31, 2025 and 2024, 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 restructuring-related charges or gains, legal provisions and (ii) excluding non-cash items such as share-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 investments and the corresponding tax effect of those items.
The items eliminated in our 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 our 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 the tables below.
Reconciliation of GAAP to Non-GAAP Results of Operations
| Twelve Months Ended December 31, | ||||||||||||||
| 2025 | Non-GAAP | 2025 | ||||||||||||
| GAAP | Adjustments | Non-GAAP | ||||||||||||
| U.S. dollars and shares in thousands (except per share amounts) | ||||||||||||||
| Gross profit (1) | $ | 227,286 | $ | 31,097 | $ | 258,383 | ||||||||
| Operating income (loss) (1,2) | (72,489) | 80,820 | 8,331 | |||||||||||
| Net income (loss) (1,2,3) | (104,285) | 117,000 | 12,715 | |||||||||||
| Net income (loss) per diluted share (4) | $ | (1.28) | $ | 1.43 | $ | 0.15 | ||||||||
| (1) | Acquired intangible assets amortization expenses | 18,280 | ||||||||||||
| Non-cash share-based compensation expenses | 3,045 | |||||||||||||
| Restructuring and other expenses | 9,772 | |||||||||||||
| 31,097 | ||||||||||||||
| (2) | Acquired intangible assets amortization expenses | 4,121 | ||||||||||||
| Non-cash share-based compensation expenses | 21,229 | |||||||||||||
| Restructuring and other related costs | 5,494 | |||||||||||||
| Revaluation of investments | 2,208 | |||||||||||||
| Contingent consideration | 1,724 | |||||||||||||
| Legal and other expenses | 14,947 | |||||||||||||
| 49,723 | ||||||||||||||
| 80,820 | ||||||||||||||
| (3) | Corresponding tax effect | 1,015 | ||||||||||||
| Equity method related expenses and impairment | 36,245 | |||||||||||||
| Finance income | (1,080) | |||||||||||||
| $ | 117,000 | |||||||||||||
| (4) | Weighted average number of ordinary shares outstanding- Diluted | 81,602 | 82,301 | |||||||||||
| Twelve Months Ended December 31, | ||||||||||||||
| 2024 | Non-GAAP | 2024 | ||||||||||||
| GAAP | Adjustments | Non-GAAP | ||||||||||||
| U.S. dollars and shares in thousands (except per share amounts) | ||||||||||||||
| Gross profit (1) | $ | 256,816 | $ | 24,948 | $ | 281,764 | ||||||||
| Operating income (loss) (1,2) | (85,661) | 90,594 | 4,933 | |||||||||||
| Net income (loss) (1,2,3) | (120,283) | 124,520 | 4,237 | |||||||||||
| Net income (loss) per diluted share (4) | $ | (1.70) | $ | 1.76 | $ | 0.06 | ||||||||
| (1) | Acquired intangible assets amortization expenses | 18,576 | ||||||||||||
| Non-cash share-based compensation expenses | 3,072 | |||||||||||||
| Restructuring and other expenses | 3,300 | |||||||||||||
| 24,948 | ||||||||||||||
| (2) | Acquired intangible assets amortization expenses | 5,847 | ||||||||||||
| Non-cash share-based compensation expenses | 22,546 | |||||||||||||
| Restructuring and other related costs | 17,419 | |||||||||||||
|
Revaluation of investments
|
6,597 | |||||||||||||
| Contingent consideration | (7,595) | |||||||||||||
| Net loss from sale of investment | 4,760 | |||||||||||||
| Legal and other expenses | 16,072 | |||||||||||||
| 65,646 | ||||||||||||||
| 90,594 | ||||||||||||||
| (3) | Corresponding tax effect | 1,267 | ||||||||||||
| Equity method related expenses and impairment | 31,262 | |||||||||||||
| Finance expenses | 1,397 | |||||||||||||
| $ | 124,520 | |||||||||||||
| (4) | Weighted average number of ordinary shares outstanding- Diluted | 70,858 | 71,177 | |||||||||||
Reconciliation of GAAP net loss to Adjusted EBITDA
| Twelve months ended December 31, | ||||||||
| 2025 | 2024 | |||||||
|
U.S. dollars in thousands
|
||||||||
| Net loss | $ | (104,285) | $ | (120,283) | ||||
| Financial income, net | (10,386) | (1,676) | ||||||
| Income tax expenses | 3,082 | 2,973 | ||||||
| Share in losses of associated companies and impairment charges | 39,100 | 33,325 | ||||||
|
Depreciation expenses
|
20,738 | 21,030 | ||||||
|
Amortization expenses
|
22,435 | 24,423 | ||||||
| Non-cash share-based compensation expenses | 24,274 | 25,618 | ||||||
|
Revaluation of investments
|
2,208 | 6,597 | ||||||
|
Net loss from sale of investment
|
- | 4,760 | ||||||
| Contingent consideration | 1,724 | (7,595) | ||||||
| Legal and other expenses | 15,935 | 16,072 | ||||||
|
Restructuring and other related costs
|
13,695 | 20,719 | ||||||
| Adjusted EBITDA | $ | 28,520 | $ | 25,963 | ||||
Variability of Operating Results
Our revenues and profitability may vary in any given year, and from quarter to quarter, depending on the timing, number and mix of products sold and the average selling price of the products, and are also affected by the seasonality of our business. In addition, due to competition, uncertain market acceptance and other factors, we may be required to reduce prices for our products in the future. Since 2019, it has also been useful to gauge the variability of our operating results on a linear basis, for each quarter compared to the previous one, in addition to on a year-over-year basis, compared to the corresponding period of the prior year. We have not seen a steady pattern as to the level of demand for our products in particular quarters of the year since 2019. Nevertheless, in our outlook for 2026, we expect our revenues to grow sequentially.
Our future results will be affected by a number of factors, including our ability to: increase the number of products sold; develop, introduce and deliver new products on a timely basis; accurately anticipate customer demand patterns; and manage future inventory levels in line with anticipated demand. Our results may also be affected by competitive factors, the extent to which our cost controls plan succeeds, the availability of working capital, results of litigation, the enforcement of intellectual property rights, currency exchange rate fluctuations, commodity prices and economic conditions in the geographic areas in which we operate. Macro factors, including global economic headwinds caused by increased and reciprocal tariffs, any lingering or new inflation, relatively high interest rates, and supply chain conditions, as impacted by geopolitical developments such as the status of the Russian war against Ukraine, Middle East conflicts, and U.S.-China relations, and macro factors particular to our industry, such as the extent of growth of the 3D printing market generally, may also impact our operating results. There can be no assurance that our historical performance in revenues, gross profit and net loss will improve, or that revenues, gross profit and net loss in any particular quarter will improve, over the results reflected in preceding quarters, including comparable quarters of previous years. See Item 3.D - "Risk Factors" above.
Effective Corporate Tax Rate
See "Israeli and Multinational Tax Considerations and Government Programs - General Corporate Tax Structure in Israel" in Item 4.B. above for a discussion of the general tax structure in Israel and applicable corporate tax rates.
In 2025, we generated losses mainly from our Israeli parent company and its major subsidiaries, with no tax benefit being recorded for those losses, as the near-term realization of these assets is uncertain.
As part of the process of preparing our consolidated financial statements, we must estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. Actual income taxes could vary from these estimates due to future changes in income tax laws or the results of final tax examinations and reviews.
Effects of Government Regulations and Location on our Business
For a discussion of the effects of Israeli governmental regulation and our location in Israel on our business, see "Israeli and Multinational Tax Considerations and Government Programs" in Item 4.B. above and the "Risks related to operations in Israel" in Item 3.D. above.
Inflation
We believe that inflation has not had a material effect on our operations or on our financial condition during the three most recent fiscal years.
Foreign Currency Transactions
See "Foreign Currency Exchange Risk" in Item 11 below for a discussion of foreign currency transactions.
B. Liquidity and Capital Resources
A summary of our consolidated statement of cash flows for the last two years is set forth in the below table. While our financial statements included in Item 18 of this annual report include cash flow data for each of the three years ended December 31, 2025, 2024 and 2023, the discussion contained in this Item 5.B. is limited to a comparison of our liquidity and capital resources- including cash flows- for the years ended December 31, 2025 and 2024. For a discussion of our cash flows for the year ended December 31, 2023, and a comparison of those cash flows with those for the year ended December 31, 2024, please see "Item 5. Operating and Financial Review and Prospects- B. Liquidity and Capital Resources" in our Annual Report on Form 20-F for the year ended December 31, 2024, which we filed with the SEC on March 6, 2025.
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| U.S. $ in thousands | |||||||||||
| Net loss | $ | (104,285) | $ | (120,283) | |||||||
| Depreciation and amortization | 43,174 | 45,338 | |||||||||
| Share-based compensation | 24,274 | 25,618 | |||||||||
| Foreign currency transaction (gain) loss | (9,085) | 3,417 | |||||||||
| Loss from sale of investment | - | 4,760 | |||||||||
| Deferred income taxes, net and uncertain tax positions | 1,239 | 1,287 | |||||||||
| Other non-cash items, net | 49,267 | 37,769 | |||||||||
| Change in working capital and other items | 10,560 | 9,920 | |||||||||
| Net cash provided by operating activities | 15,144 | 7,826 | |||||||||
| Net cash used in investing activities | (112,231) | (14,820) | |||||||||
| Net cash provided by (used in) financing activities | 117,972 | (3,314) | |||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 3,395 | (1,480) | |||||||||
| Net change in cash, cash equivalents and restricted cash | 24,280 | (11,788) | |||||||||
| Cash, cash equivalents and restricted cash, beginning of year | 71,076 | 82,864 | |||||||||
| Cash, cash equivalents and restricted cash, end of year | $ | 95,356 | $ | 71,076 | |||||||
Our cash, cash equivalents and restricted cash balances increased to $95.4 million as of December 31, 2025 as compared to $71.1 million as of December 31, 2024.
The increase in cash, cash equivalents and restricted cash in 2025 was primarily due to $118.0 million of cash provided by financing activities, as well as $15.1 million of cash provided by operating activities, partially offset by our use of $112.2 million of cash in investing activities.
Cash flows from operating activities
Year ended December 31, 2025
Our operating activities provided $15.1 million of cash to us during 2025. Cash provided by our operating activities reflected our net loss of $104.3 million, as adjusted to eliminate non-cash items included in net loss, including depreciation and amortization in an aggregate amount of $43.2 million, share in losses of associated companies in an amount of $39.1 million, share-based compensation expenses in an amount of $24.3 million, $11.4 million of changes in other non-cash items, net, as well as positive changes in our working capital in an aggregate amount of $10.6 million, partially offset by
foreign currency transaction gains of $9.1 million. The positive change in working capital of $10.6 million was mainly driven by a decrease in inventory of $35.4 million, and a total decrease in other assets of $7.9 million, partially offset by an increase in accounts receivable of $18.0 million, a decrease in accounts payable of $5.3 million, and a total net decrease in other liabilities of $9.4 million.
Year ended December 31, 2024
Our operating activities provided $7.8 million of cash to us during 2024. Cash provided by our operating activities reflected our net loss of $120.3 million, as adjusted to eliminate non-cash items included in net loss, including positive changes in our working capital in an aggregate amount of $9.9 million, depreciation, amortization and impairment charges of long-lived assets in an aggregate amount of $45.3 million, share in losses of associated companies in an amount of $33.3 million, share-based compensation expense in an amount of $25.6 million, foreign currency transactions losses of $3.4 million and $10.5 million of changes in other non-cash items, net. Positive changes in working capital of $9.9 million were mainly driven by a decrease in accounts receivable of $4.5 million and a decrease in inventory of $9.4 million, and a total decrease in other assets of $11.7 million, partially offset by a decrease of deferred revenues of $10.0 million, a decrease in accounts payable of $3.7 million and a total decrease in other liabilities of $1.9 million.
Cash flows from investing activities
Year ended December 31, 2025
We used $112.2 million of cash in our investing activities during 2025. The net cash used during 2025 mostly reflected cash used for net investments in short-term bank deposits of $69.5 million, $27.1 million that we invested for the purchase of property and equipment, intangibles and other assets, as well as $8.5 million that we used for investments in unconsolidated entities.
Year ended December 31, 2024
We used $14.8 million of cash in our investing activities during 2024. The net cash use during 2024 mostly reflected $12.7 million that we invested for the purchase of property and equipment and intangible assets, as well as $8.8 million that we used for investments in non-marketable equity securities, partially offset by $7.2 million of proceeds that we received from other investing activities.
Cash flows from financing activities
Year ended December 31, 2025
Our financing activities provided $118.0 million of cash during 2025. These financing activities were primarily constituted by the net proceeds from the PIPE transaction with Fortissimo completed in April 2025, which provided $119.3 million, partially offset by contingent consideration that we paid for acquisitions in an aggregate amount of $1.1 million.
Year ended December 31, 2024
We used $3.3 million of cash in our financing activities during 2024. These financing activities were primarily our repurchase of ordinary shares, which used $2.0 million, and contingent consideration that we paid for acquisitions in an aggregate amount of $1.0 million.
Capital resources and capital expenditures
Our total current assets amounted to $582.0 million as of December 31, 2025, of which $245.4 million consisted of cash, cash equivalents, short-term deposits and restricted cash. Total current liabilities amounted to $163.0 million as of December 31, 2025.
Most of our cash, cash equivalents and short-term deposits are held in banks in Israel and the U.S.
The credit risk related to our accounts receivable is limited due to the relatively large number of customers and their wide geographic distribution. In addition, we seek to reduce the credit exposures of our accounts receivable by imposing credit limits, conducting ongoing credit evaluation, and by implementing account monitoring procedures, as well as by carrying credit insurance for many of our customers.
We believe that we will have adequate cash and cash equivalents to fund our ongoing operations and that these sources of liquidity will be sufficient to satisfy our working capital and capital expenditures needs, for the next twelve months.
We furthermore believe that we are well suited to continue to manage the current global macro-economic climate with a strong balance sheet and no debt, while focusing on cost controls and cash generation. We have continued to selectively apply certain cost controls, while ensuring that our new product introduction, or NPI, programs are well-funded, and we plan to continue investing as needed in order to support our new product development programs. Now that we have completed the PIPE with Fortissimo, we may consider deploying our available capital towards potential value-enhancing, inorganic opportunities in the 3D printing industry.
Additional factors potentially impacting capital resources
We are obligated to our suppliers under ordinary course purchase orders in an aggregate amount of approximately $93.6 million as of December 31, 2025. All of those obligations will become due over the course of the year 2026.
We have also committed to make potential future payments to third parties as part of our acquisitions. These payments are contingent upon the occurrence of certain future events and, given the nature of these events, it is unclear when, if ever, we may be required to pay such amounts. The total contingent payments could reach an aggregate amount of up to $66.6 million.
C. Research and Development, Patents and Licenses, Etc.
For a discussion of our research and development policies, see "Research and Development" and "Regulation- Israeli Tax Considerations and Government Programs - Law for the Encouragement of Capital Investments" in Item 4.B. above and the "Risks related to operations in Israel" in Item 3.D. above.
D. Trend Information.
For trend information, see the Risk Factors described in Item 3.D. above, the "Overview" and "Operating Results" sections of this Item 5. "Operating and Financial Review and Prospects" and Item 4. "Information on the Company" above.
E. Critical Accounting Estimates
For a description of our significant accounting policies, see Note 1 to our consolidated financial statements included in Item 18 of this annual report.
The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions in certain circumstances that affect the amounts reported in the accompanying consolidated financial statements and related footnotes. Actual results may differ from these estimates. We base our judgments on our experience and on various assumptions that we believe to be reasonable under the circumstances.
Of our policies, the following are considered the most critical to an understanding of our consolidated financial statements, as they require the application of the most subjective and complex judgment, involving critical accounting estimates and assumptions impacting our consolidated financial statements. We have applied our policies and critical accounting estimates consistently across our businesses:
•Inventories measurement
•Business combination
•Intangibles
•Goodwill
•Recoverability of equity method investment
We base our estimates on historical experience and on various other assumptions which we believe to be reasonable under the circumstances. Because of the uncertainty inherent in these matters, actual results could differ materially from the estimates we use in applying these policies.
Inventories measurement
Our inventories are stated at the lower of cost or net realizable value. Cost is determined mainly using standard cost, which approximates actual cost, on a first-in, first-out basis. Inventory costs consist of materials, direct labor, and overhead. Net realizable value is determined based on estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. We periodically assess our inventories for obsolescence and excess balances, or when certain events or changes in circumstances occur that trigger such assessment. The net realizable value of our inventory is based on certain factors including, but not limited to: forecasted selling prices and future demand for our products and services, historical sales patterns, technological changes, estimated service period, product end-of-life dates, alternative uses for the inventory, new products launches and other market conditions as applicable. If required, we reduce the carrying value of our inventories by an amount equal to the difference between their cost and the net realizable value. Once such inventory is written down, a new lower cost basis for that inventory is established. Our provisions for inventory write-downs for obsolescence and excess balances require us to utilize significant judgment. Although we make every effort to ensure the accuracy of the net realizable value of our inventories, any significant unanticipated deteriorating factor could have a material impact on the carrying value of our inventories and reported operating results.
Business combinations
In accordance with ASC Topic 805, "Business Combinations", we allocate the fair value of purchase consideration to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.
Fair value estimates are based on the assumptions management believes a market participant would use in pricing the asset or liability.
In the Company's recent acquisitions, intangible assets and goodwill represented a majority of the assets acquired. Assessing fair values of intangible assets acquired in a business combination involves significant judgment about future events and uncertainties and depends on estimates and assumptions. Significant estimates utilized in valuating intangible assets include discount rates and future expected cash flow, which rely upon assumptions such as the useful life of the assets, revenue growth rates and margins projections, technological obsolescence and income tax rate assumptions.
Contingent consideration incurred in a business combination is included as part of the consideration transferred and recorded at fair value as of the acquisition date.
Estimating the fair value involves significant judgment and is based on significant assumptions relating to the estimate, such as discount rates, internal cash flows forecast for the relevant period during which the financial metrics should be achieved and the timing and amounts of the contingent payments.
Amounts recorded in a business combination in certain cases may be subject to revision based on the final determination of fair values during the measurement period, which may be up to one year from the acquisition date, as additional information about conditions existing at the acquisition date may become available. In addition, each reporting period thereafter, the Company revalues the contingent consideration payments and deferred payments which are classified as liabilities and records the changes in their fair value in the Consolidated Statements of Operations and Comprehensive Loss.
On August 31, 2022, Stratasys completed the merger of MakerBot (previously, a fully owned subsidiary) with Ultimaker, which together formed a new entity under the name Ultimaker. The Company accounts for its investment in the combined company Ultimaker according to the equity method in accordance with ASC Topic 323, as it has retained the ability to exercise significant influence but does not control the new entity. The Company recognized an equity method investment in a total amount of $105.6 million comprised of the assumed fair value of the MakerBot shares and additional amount invested in cash by the Company, representing a share of 46.5% in the new entity.
On April 3, 2023, we completed the acquisition of the additive manufacturing materials business of Covestro AG for an aggregate purchase price of $60.5 million, including cash and shares and we are obligated to pay additional payments.
During 2025 and 2024, we completed several transactions, including acquisitions of entities and additional assets, for a total consideration of $12.6 million and $0.3 million, respectively.
See Note 2 to our consolidated financial statements for further details on the business combination transactions.
Intangibles
Most of our identifiable intangible assets were recognized as part of business combinations we have executed in the current and prior periods. Our identifiable intangible assets are considered definite life intangible assets and are primarily comprised of developed technology, trademarks and trade names, customer relationships and patents. Definite life intangible assets are amortized using the straight-line method over their estimated period of useful life.
Our determination of the fair value of the intangible assets acquired involves the use of significant estimates and assumptions. Refer to the "Business combinations" section above. We believe that the fair value assigned to the assets acquired and liabilities assumed are based on reasonable assumptions and estimates that a market participant would use. Should conditions differ from management's estimates at the time of the acquisition, including changes in volume or timing to current expectations of future revenue growth rates and forecasted margins, or changes in market factors outside of our control, such as discount rates, material write-downs of intangible assets may be required, which would adversely affect our operating results.
We monitor events and changes in circumstances that could indicate carrying amounts of intangible assets may not be recoverable. We review the carrying amounts of our intangible assets for potential impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment indicators may include any significant changes in the manner of our use of the assets or the strategy of our overall business, certain reorganization initiatives, significant negative industry or economic trends and significant decline in our share price for a sustained period.
When such events or changes in circumstances occur, we compare the carrying amounts of the asset or assets groups with their respective estimated undiscounted future cash flows. If the asset or assets group are determined to be impaired, an impairment charge is recorded in the amount by which the carrying amount of the asset or assets group exceed their fair value.
During the years ended December 31, 2025 and 2024, we did not record any impairment charges related to our definite life intangible assets.
In 2025, additional intangible assets of $8.5 million were recognized by us as part of our assets and other acquisitions, as mentioned above.
Goodwill
Goodwill reflects the excess of the consideration transferred plus the fair value of any non-controlling interest in the acquiree at the acquisition date over the fair values of the identifiable net assets acquired. Goodwill is not amortized but rather is tested for impairment annually at the reporting unit level, or whenever events or circumstances present an indication of impairment. Our goodwill balance as of December 31, 2025 and 2024 resulted from our recent acquisitions. No goodwill impairment was recorded during the years ended December 31, 2025 or 2024.
Determining the fair value of our reporting units requires significant judgment, including judgments about the appropriate terminal growth rates, weighted average costs of capital and the amounts and timing of projected future cash flows. Fair value determinations are sensitive to changes in underlying assumptions, estimates, and market factors. Projected future cash flows are based on our most recent budget, forecasts and strategic plans as well as certain growth rate assumptions. Potential changes in our costs and operating structure, the expected timing of utilization of synergies, strategic opportunities, negative effect of exchange rates and overall weakness in the 3D printing marketplace, could negatively impact our near-term cash-flow projections and could trigger a potential impairment of our goodwill. In addition, failure to execute our strategic plans as well as increases in weighted average costs of capital
could negatively impact the fair value of our reporting units, and increase the risk of goodwill impairment in the future.
We will continue to monitor the fair value of our reporting units to determine whether events and changes in circumstances such as further deterioration in the business climate or operating results, further significant decline in our share price, changes in management's business strategy or downward changes of our cash flows projections, warrant further interim impairment testing.
See Note 8 to our consolidated financial statements for further details on the goodwill impairment test in 2025.
Recoverability of equity method investment
We periodically review equity method investments for impairment in value whenever events or changes in circumstances indicate that the carrying amount of such investments may not be recoverable. We will record an impairment charge to the extent that the estimated fair value of an investment is less than its carrying value and the Company determines the impairment is other-than-temporary.
Impairment charges, if any, are recorded in "Share in losses of associated companies and impairment charges" in the Consolidated Statements of Operations and Comprehensive Loss.
See Note 2 to our consolidated financial statements for additional information regarding our assessment of potential impairment of equity method investment.
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