Key Points
3D Systems is seeing strong gains in its medical technology and defense businesses.
Management is prioritizing spending cuts to improve the company's profit margins.
Shares of 3D Systems (NYSE: DDD) rallied on Monday after the additive manufacturing leader showed significant progress toward achieving profitability.
By the close of trading, 3D Systems' stock price was up over 27%.
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Solid top-line growth and cost cuts
3D Systems' fourth-quarter revenue rose 16% sequentially to $106.3 million. The gains were fueled by sales of new printers and rising materials usage by existing systems.
"Three markets were particularly noteworthy: med tech, dental, and aerospace and defense, which are rapidly adopting 3D printing as a core manufacturing method," CEO Jeffrey Graves said. "These three markets have been a particular focus for our new product development over the last several years, and we believe they offer sustained growth opportunities over the next decade."
3D Systems' expense-reduction initiatives created roughly $55 million in annualized cost savings in 2025. That helped the 3D printing company's fourth-quarter adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) improve by $13.8 million year over year, to a loss of $5.3 million.
An upbeat forecast
Looking ahead, management expects revenue of $91 million to $94 million and an adjusted EBITDA loss of $3 million to $5 million in the first quarter.
"We remain intensely focused on reducing overall spending, while prioritizing strategic investments that drive growth in our priority markets," interim chief financial officer Phyllis Nordstrom said.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends 3D Systems. The Motley Fool has a disclosure policy.