Digital Manufacturing Earnings Recap: What Matters Now & Where to Look in a Forgotten Market
Link to our 3D Printing Deep Dive and our research disclaimer.
In-line with our 4Q24 Additive Manufacturing Executive Reseller Survey Report, the fourth quarter of 2024 proved to be a difficult one for most companies across the digital manufacturing landscape. Amid persistent macroeconomic uncertainty and a sustained high interest rate environment, the majority of 3D printing and advanced manufacturing OEMs that have reported, including Stratasys SSYS 0.00%↑, 3D Systems DDD 0.00%↑ and Markforged MKFG 0.00%↑, delivered underwhelming results and issued 2025 outlooks that fell short of expectations. While we attribute much of this weakness to ongoing macro pressures, intensifying competitive dynamicsparticularly from fast-moving, low-cost providers like Bambu Labs and Formlabs are also pressuring revenue and gross margins. We believe Bambu’s newly launched industrial FDM printer presents a direct threat to legacy OEMs with heavy exposure to prototyping, such as Stratasys, Desktop Metal and 3D Systems. Meanwhile, consolidation continues to reshape the competitive landscape. In late March, a court ruled in favor of Desktop Metal in its legal dispute with Nano Dimension, requiring Nano to proceed with the acquisition by the end of Q1 2025. While the Markforged deal remains pending, we believe the court’s decision makes it increasingly likely that Nano Dimension NNDM 0.00%↑ will close on both Desktop Metal DM 0.00%↑ and Markforged. On a more positive note, digital manufacturing service providers and marketplaces continued to show relative resilience, with Xometry XMTR 0.00%↑ standing out by delivering impressive double-digit growth despite the challenging environment. However, our 1Q25 channel checks are indicating a weakening demand environment, as tariff uncertainty is likely impacting near-term decision making.
Below, we outline the key takeaways following Q4 earnings across leading players within the digital manufacturing ecosystem and assess which players are best positioned heading into 2025.
Key Digital Manufacturing Earnings Takeaways
Challenging 3D Printer Demand Environment Persists in 4Q24
Our 4Q24 Additive Manufacturing Reseller Survey, which gathered feedback from 25 of the largest 3D printing resellers globally, had already signaled a difficult environment for 3d printer demand heading into earnings season. In our survey, a significant majority of resellers reported that system sales were tracking below expectations, reinforcing our view that broader OEM demand would remain under pressure. This was validated by Stratasys and 3D Systems, both of which reported Q4 results below expectations and cited continued weakness in system sales. While our survey responses were directionally cautious, sentiment around 3D Systems was somewhat more favorable, which was supported by the company’s reported 11% Y/Y growth in its industrial segment. Furthermore, 3D Systems management emphasized a stabilization in 4Q24 for system sales, which is encouraging, however, we viewed this as the typical end of year budget flush materializing post Trump election. In turn, we believe the overall selling environment remains highly challenged. For 2024, Stratasys reported system revenue down 25% Y/Y and Markforged reported system sales down ~12% for the year. While 3D Systems, which does not break out system sales explicitly, saw revenue from products, which include both systems and consumables, decline 15% Y/Y in 2024. We have yet to hear from OEMs such as Desktop Meta, and Nano Dimension, as they appear to be prioritizing the completion of their pending merger. However, based on our survey results, we suspect system demand remained soft across the board and across a variety of additive technologies.
Rising Competition From Bambu Labs and Formlabs Threatens Legacy Additive Manufacturing OEMs
While OEMs continue to cite macroeconomic headwinds such as high interest rates and a cautious manufacturing spending environment as key drivers behind sluggish printer sales, we believe an equally pressing issue is the accelerating market share erosion to lower-end system providers like Formlabs (private) and Bambu Labs (private). This dynamic was apparent in our 4Q24 reseller survey, where Formlabs resellers stood out as the best performers, with 83% reporting system sales that were in-line or better than expectations. These desktop-priced systems are increasingly dominating the prototyping market, which is a segment that historically accounted for a substantial portion of revenue for legacy OEMs like Stratasys, 3D Systems, Desktop Metal and Nano Dimension.
More disruptive, in our view, was the late-March launch of Bambu Labs’ first industrial 3D printer under the H2D lineup. Even before this release, Bambu’s consumer-focused printers were already competing effectively against much higher-priced offerings from legacy OEMs. The new H2D platform dramatically expands build volume, improves print quality and precision, and does so at a sub-$3,000 price point. Compared to entry-level industrial systems from Stratasys, Markforged, Desketop and 3D Systems that often exceed $70,000. This level of disruption is hard to ignore and may already be impacting gross margins. Notably, 3D Systems reported its lowest gross margin in over five years (even when accounting for one-time items related to the medical business) suggesting that pricing pressure is becoming a more prominent and systemic challenge for legacy OEMs.
We believe the prototyping market is quickly becoming a race to the bottom, which underscores the importance of focusing on companies with high exposure to end-use applications such as Markforged. However, with Bambu Labs delivering disruptive innovation at an already ultra-low price point, it's likely only a matter of time before they expand more meaningfully into end-use manufacturing. This highlights the broader challenge in investing in additive manufacturing OEMs: sustaining competitive differentiation and profitability in a market where barriers to entry are falling and pricing pressure continues to intensify.
Are OEM Consumables Businesses at Risk?
In parallel with growing system-level competition, we are beginning to question whether OEMs’ consumables businesses, which have traditionally been viewed as high-margin and recurring, are also at risk. The consumables model has long been the backbone of the “razor-and-blade” strategy, where OEMs capture significant margin through ongoing material sales following a 3D printer sale. While most companies do not explicitly break out consumable revenue, it is common to hear management reiterate that utilization rates remain healthy. But is that truly the case? Stratasys, which boasts the largest installed base in the industry, reported a Y/Y decline in consumable revenue for the first time in several quarters in Q4, which marked a continuation of quarterly declines throughout 2024. While part of this trend may be attributed to fewer new system sales, which typically generate initial material purchases, we also believe Stratasys’ shift toward an open materials strategy may be playing a role. Under this model, third-party materials can be used on Stratasys printers for a fee. This is a development we intend to watch closely, as it could materially alter the long-term revenue trajectory of OEMs increasingly relying on consumables to support profitability.
Stratasys and 3D Systems Guide Flat for 2025 Amid Macro Headwinds But History Likely Proves This Isn’t Even Achievable
Stratasys and 3D Systems were the only OEMs in the space to provide formal 2025 guidance, but both called for continued macroeconomic headwinds to weigh on growth and issued full year revenue guidance below consensus expectations. Stratasys expects sales to remain muted, with 2025 full-year revenue projected to be $570 - 585M, which implies roughly flat growth at the midpoint of guidance. Meanwhile, 3D Systems is in the process of divesting its Geomagic software business; adjusting for this divestiture, the company anticipates 2025 revenue to be in the range of $420-435M, which also implies flat to modest “organic” top-line growth in 2025. That said, it’s important to highlight that both companies and the broader 3D printing industry have historically struggled with forward visibility. Since 2024, when Stratasys has provided full-year revenue guidance, the company came in below the low-end of that original range 7 of the 10 times. Meanwhile 3D Systems, has only given full year guidance 6 times since 2014, and has come in below the low-end of that range 5 of the 6 times. Although we remain hopeful that macro conditions will stabilize and demand may gradually recover, we believe ongoing competitive pressure particularly from aggressive low-end players combined with persistent macro uncertainty could once again lead to downward revisions. As such, we would not be surprised if full-year guidance is lowered over the course of the year and actual results end up below the low end of current forecasts.
Marketplace & Service Providers Prove More Resilient Amid OEM Slowdown
Despite the ongoing sales declines reported by printer OEMs, digital manufacturing service bureaus and marketplaces including Protolabs PRLB 0.00%↑, Xometry, and Materialise MTLS 0.00%↑ demonstrated relative strength through the end of 2024. We believe this resilience is driven by customers delaying capital investments in new equipment but still needing parts, leading them to increasingly outsource production. We believe this makes these businesses structurally more recession-resistant. While Protolabs posted ~$501M in revenue in 2024, which was in-line with revenues in 2023, we view its ability to hold revenue steady as impressive in a sluggish manufacturing environment. Materialise, a long-time favorite of ours due in part to its strong medical exposure, ended the year on a softer note as macro headwinds weighed on its manufacturing segment. While sales were up ~4% Y/Y to €267M in 2024, the company guided to slower growth (~4%) and lower profitability in 2025 that Street expectations. That said, management is known for its conservative tone, and we believe improving manufacturing conditions in Europe could support better performance as the year progresses. Xometry stood out most, growing sales 18% Y/Y to $546M in 2024 despite a tough macro backdrop. We continue to see its capital-light manufacturing marketplace as a major disruptive force, especially as it gains traction in the low-end prototyping space. While we have some concerns around Xometry’s ability to scale into higher-volume orders, we believe growth could meaningfully accelerate in 2025 and beyond if macro conditions improve. Notably, management has already guided to revenue acceleration this year.
That said, we also publish a quarterly pricing tracker, monitoring real-time pricing trends across specific parts on Xometry and Protolabs. While pricing remained healthy through most of 1Q25, we have observed signs of deterioration in the final weeks of the quarter, which is likely driven by tariff-related uncertainty delaying customer decision-making. We believe this may contribute to results coming in near the low end of expectations in the coming quarter.
Outlook & Positioning for Leading Digital Manufacturing Players
Below we provide our updated take on the positioning and outlook for key players across the digital manufacturing ecosystem including OEMs (Stratasys, 3D Systems), digital manufacturing service providers and marketplaces (Xometry, Protolabs, Materialise), and advanced materials suppliers (Tekna) following 4Q24 earnings. We also include links to our most recent downloadable 5-year financial models for select companies in the space.