Stratasys (NASDAQ: SSYS) reported Q2 2026 revenue of $137.6 million, down approximately 0.3% from $138.1 million a year earlier, while its GAAP diluted loss per share narrowed to $0.19 from $0.20. Record consumables revenue and 17% growth in aerospace and defense supported sales, but gross margins edged lower, adjusted EBITDA declined, and operating cash outflow increased.
Core Earnings Data
Revenue was nearly unchanged year over year but increased 3.7% sequentially from $132.7 million in Q1 2026. GAAP gross profit declined as gross margin fell 80 basis points, while lower operating expenses helped narrow the GAAP operating loss.
Adjusted profitability remained thin. Non-GAAP operating income fell to $0.1 million, adjusted EBITDA decreased 12.8%, and non-GAAP diluted EPS remained unchanged at $0.03.
| Metric | Q2 2026 | Q2 2025 | Year-over-year change |
|---|---|---|---|
| Revenue | $137.6 million | $138.1 million | Down approximately 0.3% |
| GAAP gross profit | $58.2 million | $59.5 million | Down approximately 2.1% |
| GAAP gross margin | 42.3% | 43.1% | Down 0.8 percentage points |
| GAAP operating loss | $13.5 million | $16.6 million | Loss narrowed by approximately $3.2 million |
| GAAP net loss | $16.9 million | $16.7 million | Loss widened approximately 0.7% |
| GAAP diluted EPS | $(0.19) | $(0.20) | Loss narrowed by $0.01 per share |
| Non-GAAP net income / diluted EPS | $2.3 million / $0.03 | $2.2 million / $0.03 | Income up approximately 3.9%; EPS unchanged |
| Adjusted EBITDA | $5.3 million | $6.1 million | Down approximately 12.8% |
| Operating cash flow | $18.7 million used | $1.1 million used | Cash use increased by $17.6 million |
Business and Segment Performance
Product revenue declined approximately 2.2% to $92.7 million, while services revenue increased approximately 3.6% to $44.9 million. This mix left total revenue effectively flat from the prior-year quarter.
Consumables revenue reached a quarterly record of $66.3 million. Management attributed the result to manufacturing materials and said it supports the company’s strategy of expanding the manufacturing portion of its business.
Aerospace and defense, Stratasys’ largest vertical, grew 17% year over year. CEO Yoav Zeif said the pipeline of new aerospace and defense orders continues to build, supporting management’s expectation for sequential revenue growth.
Profitability, Cash Flow, and the Balance Sheet
Both reported and adjusted gross margins declined. GAAP gross margin fell to 42.3% from 43.1%, while non-GAAP gross margin decreased to 47.2% from 47.7%.
Currency movements also affected adjusted profitability. Stratasys said adjusted EBITDA would have been $8.2 million rather than $5.3 million without a $2.9 million net adverse impact from the strong Israeli shekel. On that basis, currency pressure more than accounted for the reported year-over-year decline in adjusted EBITDA.
Operating cash outflow increased to $18.7 million, primarily because of what the company described as atypical, non-routine items. Management still expects positive operating cash flow during the second half of 2026, but it no longer expects the full year to be cash-flow positive.
Stratasys ended June with $212.5 million in cash, cash equivalents, and short-term deposits, consisting of $92.5 million in cash and equivalents and $120.0 million in short-term deposits. The company reported no debt. Inventory was $143.9 million, compared with $145.2 million at the end of 2025.
Lower Operating Costs Improved the Operating Loss, but Taxes Limited Bottom-Line Progress
GAAP operating expenses declined to $71.7 million from $76.1 million. Most of the reduction came from selling, general, and administrative expenses, which fell to $52.2 million from $56.2 million, while research and development spending was nearly unchanged at $19.5 million.
The lower expense base helped the GAAP operating loss narrow by approximately $3.2 million, and the pre-tax loss improved to $10.2 million from $13.3 million. However, income tax expense increased to $6.7 million from $1.0 million. That higher tax expense offset the operating improvement, leaving the GAAP net loss slightly wider at $16.9 million.
The gap between GAAP and non-GAAP results also remained substantial. Stratasys recorded $19.1 million of adjustments to reconcile its GAAP net loss to non-GAAP net income, including items related to amortization, share-based compensation, restructuring, legal and other expenses, contingent consideration, taxes, and finance income.
2026 Guidance
Stratasys reaffirmed its full-year revenue, margin, earnings, adjusted EBITDA, and capital expenditure guidance. The one material revision was operating cash flow: the company no longer expects positive cash flow for the full year because of higher first-half cash usage, although it expects positive cash flow in the second half.
With first-half revenue of $270.3 million, Stratasys needs approximately $294.7 million to $304.7 million of second-half revenue to reach its full-year range. That would be roughly 9% to 13% above first-half revenue and makes the expected sequential improvement an important execution target.
| Metric | Latest 2026 guidance | Status or change |
|---|---|---|
| Revenue | $565 million to $575 million | Reaffirmed |
| Non-GAAP gross margin | 46.7% to 47.1% | Reaffirmed; includes about $7 million of tariff and FX pressure versus 2025 |
| Non-GAAP operating expenses | $260 million to $262 million | Reaffirmed; includes about $10 million of adverse FX impact |
| Non-GAAP operating margin | 0.7% to 1.5% | Reaffirmed |
| GAAP net loss / diluted EPS | $83 million to $67 million / $(0.95) to $(0.76) | Reaffirmed |
| Non-GAAP net income / diluted EPS | $8 million to $12.5 million / $0.09 to $0.14 | Reaffirmed |
| Adjusted EBITDA / margin | $25 million to $30 million / 4.5% to 5.0% | Reaffirmed |
| Capital expenditures | $20 million to $25 million | Reaffirmed |
| Operating cash flow | Not positive for full year; positive in the second half | Reduced from positive full-year expectation |
The guidance assumes that inflation, relatively high interest rates, tariffs, exchange rates, and supply-chain costs do not further impede economic activity.
Management’s View
Management emphasized the role of recurring consumables demand and growing aerospace and defense adoption in its manufacturing strategy. It also expects the pending acquisition of Markforged to expand Stratasys’ industrial offering through continuous carbon fiber technology, materials, and software, although the transaction remained pending at the time of the earnings release.
The company’s debt-free balance sheet gives it liquidity to continue investing, but management’s near-term outlook still depends on the order pipeline producing sequential revenue growth and on cash flow turning positive during the second half.
Risks Investors Need to Monitor
- Cash-flow execution: Full-year operating cash flow is no longer expected to be positive. The second-half improvement anticipated by management must overcome the elevated cash usage recorded during the first half.
- Currency and tariff pressure: The strong shekel reduced quarterly adjusted EBITDA by $2.9 million. Full-year guidance also incorporates approximately $7 million of tariff and foreign-exchange pressure on gross margin and about $10 million of adverse currency impact on operating expenses.
- Back-half revenue requirements: Achieving the $565 million to $575 million revenue target requires second-half revenue to rise meaningfully from the first half. Delays in converting the aerospace and defense pipeline could make that target more difficult to reach.
- Limited adjusted operating margin: Non-GAAP operating income was only $0.1 million in Q2, and the full-year non-GAAP operating-margin outlook remains between 0.7% and 1.5%, leaving limited room for additional cost pressure.
- Pending acquisition execution: Management expects Markforged to strengthen the industrial portfolio, but the acquisition was not yet completed and its financial contribution was not included in the reported quarterly results.
Summary
Stratasys’ Q2 2026 results showed stable overall revenue, supported by record consumables sales and double-digit aerospace and defense growth. Lower operating expenses narrowed the GAAP operating loss, but weaker margins, currency pressure, higher tax expense, and increased cash usage limited broader improvement. The main issues for the remainder of 2026 are whether sequential revenue growth materializes, operating cash flow turns positive in the second half, and the company contains the tariff and foreign-exchange costs embedded in its guidance.
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