What do you think of what you’ve done this far?

“It has been a journey of figuring out who we want to be, and we are finally getting smart about picking markets in which we can excel. I’m optimistic that we are now doing this,” said Graves.

Yoav Zeif follows a similar thought process: “At Stratasys, our mission is simple: Focus on a few use cases to allow penetration to mass production. But even then, we need a better selling environment, for sure, since AM is more sensitive to capital expenditure decisions. But if interest rates continue to come down, and the on-shoring tailwind continues, we should see improvements at the end of 2025.”

Both companies are deeply focused on building working solutions to manufacturing problems. Graves notes that revenues in the Application Innovation Group (AIG) grew over 26% year-to-date (2024) versus the prior year across industrial markets.

Which markets work, and which ones don’t?

“We have to be application-focused since generalities simply don’t work,” said Graves. “We are focusing on higher-end markets such as oil & gas, energy, aerospace, healthcare, and dental, and perfecting our three pillars – hardware, software, and materials – to give them solutions that change the equation of manufacturing.”

Zeif pretty much agrees: “AM has penetrated about 1% of the tooling market, and honestly, given the advantages AM brings to that area, it should be more like 25%. If we get it right, it should be at 50%.”

Both CEOs also have dental services high on their target list, which Zeif thinks is only about 10% digitalized. “The value AM brings to dental is game-changing,” he said. “It is currently very labor-intensive, and costs for patients are high. AM changes that through its unique ability to handle special geometries, personalized products, and low-volume production runs.”

Graves noted that in the Q3 2024 report, 3D Systems’ Healthcare Solutions group had revenue of $55.1 million, which grew 5% year-over-year, led by strong growth in Dental and Personalized Healthcare solutions, and he perceives a strong future there.

Are there any more acquisition plans?

Both companies have a long history of aggressive M&A activity, although 3D Systems has recently divested several earlier investments including Quickparts and Geomagic. But this seems to follow with the plan mentioned above. The Dec 12, 2024 press release said, “Following the divestiture, 3D Systems will focus on its software platforms that are core to customer adoption and application of its 3D printing technologies.”

During the interview, Graves said there are no plans for more M&A activity at 3D Systems. Zeif declined to comment on the topic, although he was happy to point out that Stratasys just landed an equity investment of $120M from Fortissimo Capital. Their press announcement stated: “Stratasys expects this partnership to enhance shareholder value, support the continued execution of Stratasys’ strategy to drive growth and further strengthen the Company’s balance sheet as it seeks to capture inorganic value-creation opportunities in the additive manufacturing industry.” The investment is regarded as ’a long-term commitment at a premium valuation’.

After the various SPAC meltdowns, failed AM service providers, and the complete ‘soap opera’ of attempted acquisitions in 2023, all of which soured the views of many investors, an equity investment such as the one above is indeed an indicator that maybe the smart money is coming back in.

What about the future of both companies?

Both CEOs are optimistic but with a measure of caution that makes sense – no over-exuberance and hyping, at least for now.

Graves is especially excited about the long-term prospects for biocompatible 3D printing, especially in the area of 3D printed lungs, in partnership with United Therapeutics. In 2022, United Therapeutics CEO Dr. Martine Rothblatt announced that she expected clinical trials of these to be started within 5 years. “There are currently about 100,000 lung transplant candidates waiting for lungs,” said Graves. “Being able to create biocompatible lungs is so amazing and there is a lot of income potential there. But we won’t see them in use for quite a while yet.”

Graves regards this development to be a ‘business-changing’ moment. But you need to have investors that understand patience.

Zeif seems convinced Stratasys is on the right path as long as AM companies stop competing against each other and instead focus on the overall manufacturing market: “We need quality, accuracy, and support for the customer, and we are getting there. And we need to deliver value to customers that the Chinese cannot deliver. It’s the difference between a low price and ‘good enough’ output, and higher price and high-quality output that will define us.”

As Joris Peels, Vice President of Consulting AMS, said at the Additive Manufacturing Strategies conference, “In rough seas, you can tell who the good sailors are.” Maybe these two CEOs have enough sailing skills to help the industry meet its potential.