Q4 2019 Earnings Call
Good morning, ladies and gentlemen, and welcome to the Q4 and full year 20 night teams Stratasys earnings Conference call. At this time all participants are in listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time, if anyone should require assistance during the conference. Please.
Let's start then T. Rowe under Touchtone telephone as a reminder, this conference call may be recorded I would now might turn the conference over to your host Mr. Young overweight Vice President Investor Relations.
Thank you Ashley and good morning, everyone. Thank you for joining us to discuss our 2019 fourth quarter and full year financial results on the call with US today, our new CEO naive and our CFO, We love Payorski.
I remind you that access to today's call, including the prepared a slide presentation is available online at the web address provided in our press release. In addition, a replay of todays call, including access to the slide presentation, well also be available I can be accessed through the investor Relations section of our website.
Please note that some of the information you will hear during our discussion today will consist of forward looking statements, including without limitation those regarding our expectations as to our future revenue gross margin operating expenses taxes, and other future financial performance and our expectations for our business outlook all statements that speak to future performance.
Expectations or results are forward looking statements actual results or trends could differ materially from our forecast for risks that could cause actual results to be materially different from those set forth in forward looking statements. Please refer to the risk factors discussed and Stratasys is annual report on form 20-F, or the 2019 year, which we're falling to.
With the FCC as well as a report on form 6K, and the related press release concerning our earnings for the fourth quarter of 2019, a lot of two of which we are furnishing to the FTC today.
Strategists assumes no obligation to update any forward looking statements or information, which speak out some of their respective dates as in previous quarters. Today's call will include GAAP and non-GAAP financial measures non-GAAP financial measure it should be read in combination with our GAAP metrics to evaluate our performance certain non-GAAP the.
<unk> are provided in the table contained in our slide presentation and in today's press release [laughter] now I would like to turn the call over to our CEO. Your last night you go up.
Thanks Yonah.
Oh scalable expressing my excitement and enthusiasm to be serving as tried to season you feel it's such an people from time for the company.
Joining start to see this month, that's taking the opportunity to begin a index review of the business.
And I'm already right like the deep level of knowledge professionalism and dedication exhibited it's all live in of the organization.
I strongly believe into solid foundation for growth.
It has been created extremities.
Including an innovative and expanding product portfolio disciplined financial management and the industry leading distribution policy.
Last month.
The opportunity to I can't go anywhere globally about anything.
Well I met with many of our rescinded.
We believe that strategy is the strongest distribution Charlie.
And I appreciate that include and their passion for future success.
To get there we would have been exciting journey into coming years.
I would like Ben.
Yes.
And the board of directors.
And oversight Committee, David Wright, corn crop and old fair for they definitely walking down under <unk> leadership to guide to company through the transition period.
Line, the ground and be thinking infrastructure that will be the basis for future growth.
In addition over the last several years.
The company is implemented it kind of true financial recently.
Thank you last cycle whiskey.
Our team that has resulted in meeting on profitability target and maintaining a healthy bonds.
Stopping that Barry.
Here, we would introduce our next phase of growth.
We didn't know the book that's changed at all portfolio.
As we begin to north as soon as new products, including both manufacturing and you talked a little bit banking focused solution.
We plan to invest in the success of this new launches by increasing our go to market spending. This year. We also expect a convenient to see just increasing adoption.
Manufacturing focused platform.
Targets parity cod automotive aerospace and healthcare Oh penetration into industrial manufacturing communication is among the deeper in the industry and we plan to expand even.
Even further.
<unk>.
Overall I'm extremely optimistic regarding Doug look often business and believed that there is tremendous put pen to drive significant near them and long term value for all stakeholders.
I want to pick up and you only do you know it then you feel.
Emphasize my strong belief instructor fees, we continue to lead to I think you've got a victory industry.
Let's move through what we and the industry and expect to be a beautiful growth and adoption.
We would've continues to be an hour keep focused areas of design engineering problem typing.
Fixturing health care and software, we would walk the generated and more effective operating motive and to execute <unk> excellent when our go to market strategy, we didn't go well free.
No no no but.
Product portfolio and unique Fixable service organization.
As I couldn't hear from Darren in front me right myself, we tried to.
Looking forward, we think all with customer Fox news and events door and most importantly, our amazing employees worldwide.
And to providing further updates to you.
The cool to see here.
No that's apparently going over to our CFO to enough by all ski would review that he says Oh financial results no.
Thank you and good morning, everyone.
2019 was <unk>.
Hi, good shot engine.
Mainly stemming.
Well I was wondering about the condition.
Two quick ones, South deep approach and continued to drive efficiency and remain committed to expense control.
Let me tell profitability objectives.
Well continue to it but you know new product introduction.
Total revenue into fourth quarter was 160.2 million compared to 177.1 billion for the same appeared last year on a constant currency basis.
We'll go to revenue declined 9.3%.
For the full year 2019, total revenue was 676.1 million compared to 663.2 million for 2018 on a constant currency basis full year revenue declined 3.1 person.
After adjusting for the settle for they listed entities during 2018 on a like for like they see.
Well go to revenue declined 3.2% sort of 40 here in 2.2% on clip on a constant accordingly.
Geninety, we still need.
Seems good did you eliminate all you know calling it becomes even for 42019.
Oh by the impetus knuckle weakness in Europe and Asia.
In the Americas region, we are pleased with what we're seeing it all the time with vertical as well as Michelle Nutrisystem picked up being sold into manufacturing environment.
GAAP operating loss for the quarter was 3.3 million compared to an operating loss of 3.8, meaning for the same feared last year.
Non-GAAP operating income for the fourth quarter was 10.2 million compared to operating income all 12.8 me give what affecting your last year.
GAAP net loss for the quarter was 2.8 communion Oh five cents. So do you could share compared to a net income of six point, Threemillion, which was saying God legal gets you sort of 17 of last year.
Non-GAAP net income for the quarter was generally in the Oh 18 cents 'cause it gets a chair compared to non-GAAP net income of 11.3, maybe Oh 21 cents they'll do you go to cheer they told US what assembly of last year.
So for him to talk to them in that 19, GAAP net loss was 10.8 media or 20 cents diluted share compared to an all self unless it wouldn't make oh 22 cents they'll do you have to cheer for fiscal 2018.
Non-GAAP net income was 30.5 comedian Oh 56 cents diluted share compared with non-GAAP net income all 27.8 million Oh 52 fast so to go to cheer you'd spoken for fiscal 2018.
Well I just would have been coming to fourth quarter was why have we didnt I mean, it decreased 12.5 per cent compared to the since your last year or 12.1 for said on a constant currency basis.
Full year 2019, what is what many was full husband in Stony point Sevenmillion decrease of 5.6% compared to 2018 excuse me that they listed entity and on constant currency basis for your product revenue decreased 3.3 person well.
He's brought us revenue consumable revenue for the quarter decreased by 2.9% comparisons are said to you last year and decreased 2.4% on constant currency basis.
And I don't want basis, 2019, concealment away video degrees. The open 5% increased 1.7% after adjusting for the investment in constant currency.
Materials for high end platform, such as these I'd be anything polyjet investments, you're making them there Dan and building an open and Exerial Oh, you, hoping to do demonstrate good customer adoption of our solution for <unk> body Lucky occasion, we also closed units.
It seems human calls for its one through three platforms.
The decrease in theory, it was driven primarily by regional weakness in Europe, and Asha coupled with somebody Carney material associates, we saw linguistic last.
Which would really wouldn't be office overtime by strong wall seem a true demand because we've come from a new product as well as some systems that we have placed over the last few years.
For the quarter decreased 20.6% compared to the same to you last year with no material change on a constant contact me they.
Our system revenue were negatively impacted primarily by convenient mclauchlin oneq weakness in Europe in Austria is what is declining doesn't legacy product line, which we expect wouldn't be more than offset by all new product introduction.
For full year 2019 seems to revenue decreased 10.8% and 8.3% after adjusting for direct Smith in constant currency.
Yes, its revenue into fourth quarter, what's 61.2 million a decrease of 2.6 per se compared to the temp your last year with no material change on a course of course the base.
Before you have 2019 southeast revenue was two in 2000 5.3 million decreased Oh, the airports, 70% compared to 2018 and relatively flat on a cool constant currency basis.
We see it sounds like many o'connell supposed to like the <unk> increased by 1% compared to the since you last year with no material change on a constant currency basis.
For the full year 2019 customers the bulk of the revenue increased 1.9 systems compared to 2018 at 3.1% on a constant currency basis.
Got it goes from algae, what's faulting like when you want the same fourth quarter flat compared to December of last year, non-GAAP Bald mountain was 52.4% slick water compared to 52.2% for the fancier last year.
GAAP operating expenses decreased by 9.8% to 81.9 needed for the fourth quarter. It's compelling attempt here last year for full year 2019, GAAP operating expenses decreased 2.6% to three trials.
25.4 million non-GAAP operating expenses increased by 7.4% to 73.8 to me then for the fourth quarter as compressors effect. It was last year driven by a focus on efficiency.
We remain committed to a lifetime socket cheap and we continue to embrace.
The new product, which we believe well expanded addressable topic.
For 42019, non-GAAP operating expenses decreased 4% to 298.7 million, reflecting oh successful operational discipline and he thought oh they'd be.
The company was 3.4 million of cash from operation.
From operation during the fourth quarter as compared to 18.7, meaning a fashion generally in the fourth quarter last year, primarily due to poor hockey stick to encourage inventory level in oldest doing full for treatment of died and supportive of the man, it's weighted to prepare for new product launches.
In 2020.
We ended the fourth quarter Weve 321.8 me, having cash catch it could be the land and Showtime before they come down to 347.1.
Yes. It ended the third quarter of 2019.
Sure, we got well placed before your growth we observed in both solid radical in America.
We successfully drove efficiencies through expense control demonstrated by our stable voice messaging and ability to me supposed to be feel objective, while investing in new product introduction.
Oh balance sheet remains healthy and we are well positioned for future opportunity.
I would now like to turn the call over to our VP of Investor relation Yonah Lloyd who will provide when something goes on I will try to any financial guidance you and I. Thank you Leila we are providing full year guidance for Twentytwenty as follows revenue guidance of 620 million to 680.
<unk> million dollars.
GAAP net loss of 30 million to $18 million or 54 to 33 cents per diluted share.
Non-GAAP net income of 25 million to $34 million or 45 to 60 cents per diluted share.
Non-GAAP operating margins up 5% to 6.5%.
Capital expenditures are projected at 40 million to $60 million.
We're committed to successfully introducing our new products and our guidance reflects increased investments earlier in the year in resources for specific go to market initiatives in order to support the planned launches that will begin in the back half of Twentytwenty, primarily in Q4, we believe it this increase in operating expenses will provide the basis for.
Or long term growth.
Additionally, our guidance range is longer than we typically provide due primarily to the ongoing industrial macroeconomic issues globally as well as uncertainty around the potential impact of the Corona buyers. We are in the early stages of understanding if and to what extent, we may be temporarily impacted by this and we will provide a dish.
No updates later in the year.
Non-GAAP earnings guidance excludes $25 million to $26 million, a projected amortization of intangible assets $26 million to $28 million a share based compensation expense reorganization and other expenses of $3 million to $4 million non-GAAP guidance includes tax adjustments ranging from $3 million to $4 million.
On the above non-GAAP items.
The estimated non-GAAP tax rate for Twentytwenty is impacted by the ongoing noncash valuation allowance on deferred tax assets that we expect to record throughout the year on U.S. losses, given the expected ongoing negative impact of not recording a tax benefit on your tax losses on our net income as well a significant quarter to quarter variability in our non-GAAP.
That's right. The company believes non-GAAP operating income is the best measure of our performance appropriate reconciliations between GAAP and non-GAAP financial measures are provided in the table at the end of our press release and slide presentation with itemized detail concerning the non-GAAP financial measures operator, please open the call for questions.
Ladies and gentlemen, if you'd have a question at this time. Please press Star then it number one I know touchtone telephone we ask that you. Please limit yourself to one question and one follow up question. If your question has been answered or you wish to ramp yourself from the Q. Please press the pound key.
Your first question comes from Wamsi Mohan with Bank of America.
Hi, Thank you good morning, Youre congrats on the new role can you talk a little bad about how some of your past experience you're going to bring to leverage into this new Roland and what sort of changes do you want to drive I know, it's still early days, but what sort of changes do you want to drive.
At Stratasys now we'll follow up.
Thank you for the question.
So as I said I'm very excited to be here, a huge opportunity in front of voting kinds of dangerous to your perspective and also from <unk> perspective.
Oh I go one by one so.
What makes me.
Excited about reason why are you know.
Good and.
Coffee that took all the future so I'm coming from our.
A combination or consulting experience deep inside the fields, we the biggest corporate into war.
Here on strategy.
Sure that's there.
And where'd years more than what you hope experiences in executive team across all different function of the organization. Both organizations like I said, we're the leader in their feared so I'm, bringing in experiencing and she's been global leadership.
Maintaining these over these years she's been breathing room.
So my focus was involved.
Andrew.
Hi, Matt.
Sales are in D., Copeland, R&D and vitamins like I don't see manufacturing Cvcs I met its many plants.
Business development.
Really haven't lost Sixtyv mobile marketing, Oh development et cetera, but a very long specific people how to manage a global operation.
From a strategic planning cycle food, but no but people with them on the operation on site and driving execution.
Everybody students in my background, when I'm looking at Stratasys, Oh really skies dealing with here.
And first of all integrate privileged to be here, because it's a company that can really.
Hasn't changed the world and we change the war and going forward.
And you said, it's really early day.
So.
I would be about you know it'd be tie lever, but in general I think I have great foundations to be its own I'm going to leverage what we have.
From a variable finishing on all its pretty bullish I was a deeply impressed by example, syndication and engagement and ER.
It's to either product portfolio the innovation.
Oh, the position that we have in the market. The go to market we got there.
Anymore.
Well it sounds like this.
No. Thank you all that's that's very helpful. Thanks for that context, and maybe just one thing they lock as a follow up when we see the overall guidance I mean, that's sort of roughly flat and I know you a slightly wider range or put uncertainties in the market, but that does imply a meaningful rate.
Oh, sorry in product revenues relative to how youre exiting 2019. So can you give us some context on what gives us confidence I'll start recovery in product revenues and and how those product revenues I know you you're very excited about the launch of new products and the second half what 2020, if you can give us.
Some context of what percent tougher avenues, either in second half of 20 or 21 are going to come from from these new products up would be very helpful. Thank you.
Good morning. Thank you it's quite question Adam.
Hey, you right rightly say that day, we had a wider range in nbcs, mainly because of their like any like many other company, we honestly incorporating some of the uncertainty around the market conditions persisted into Cohen of I was having said that a game we are excited about.
If <unk> and you put a conscious doing to you.
Hey, which we expect to be moly box funded the second Pablo do you you just they couldn't make an edge to any point, if I would like to talk about kagan somebody revenue one expects to him.
52% of the revenue common in the second pass over to your.
Hey, we shape, we pick you fold being materially stronger and probably Q1 would be the weakest if the typical seasonality four buckets also mall influenced by the time, you know far NPK aided by our new product introduction is what is the fact that Q why he's already seems like.
Most impacted by Dave is significant Mike macroeconomic recycling of life.
Hey, So these would be a then maybe but come directly from the cadence perspective I just one thing on on top of that we lost a lumpy Jonah in terms of the seasonality of the revenue itself. It will actually more likely ramp throughout the year with Q1 being the lowest quarter.
And ramping to upwards a across two and three and then of course when the material impact in Q4, primarily based on the new product launches.
Okay. Thank you very much.
Your next question comes from Troy Jensen with Piper Sandler.
Yeah. Thanks for taking my question in and what could be allowed yeah, but just a follow up on the cadence could you talk about maybe a Q1 should we expect normal seasonality or will be less than normal get in Q4 wasn't as strong and then can you talk to just a opex cadence and I've a follow up.
[noise] okay.
Good morning Troy.
Yeah, I'd say in Q1, we added people because there's not a few that you wanted usually the itself to a quarter will sit here and then given day there although on a macro economic situation with the corner virus, we actually I P back into Q1 will be a moly at home and will be much more softer than Washington D.C. Penny.
So the many that would be in Q1.
In terms of the cadence that you did I.
Got it.
Got it okay. Okay. So regarding opex, yes, a office would be <unk> it fairly evenly between H one in age true and slightly higher in Q2, and two fold refused to being the highest in preparation for new product launches in H. too.
Hey, open I'll take a presenters afford when they wouldn't be highest in Q1 and decline as we move throughout the year.
Yeah, Hi.
So actually address.
That is perfect. Thank you a lot.
With respect to new products, I guess I'm under the assumption that they're you know three to six months sales cycles.
Many new products. So I mean, if these are gonna be second half impacted you noted we expect to see these in Q2, they get launched or if they do get introduced in Q3 is it really can have an impact on 2020 revenues.
Right I tried Jonah so we're not giving specific guidance on the timing of the launch.
But that's the time in the launch will be primarily in the second half of beer.
With the with the impact on the topline being seen most significantly in the fourth quarter.
Okay, I guess I would've thought rapid might it in a pretty time to unveil. This building that's kind of the big industry trade show, but you know I understand you can't touch on to alright, well understood. Thanks, and good luck.
Your next question comes from Brian drop with William Blair.
Hi, Thanks for taking my questions I guess just to continue on with the new product discussion I'm just thinking back to this.
Oh, a year ago, and and some of the calls throughout 2019, and new products, where the theme in the.
The message was that new products were going to drive growth and accelerate growth as we entered 2020 I know, there's a lot of macro.
Challenges right now I'm, just wondering how when you look back at the [noise].
Whatever those new products, where the 750 to 70 35 dental machines are those.
Yeah as you reflect on on that what were those as successful as you expected and it's just macro headwinds or were those not as impactful and then why wouldn't you. What are these new products that are coming this year that will materially move the needle, whereas those did not.
[noise] Ah Hey, Brian if you want and so certainly it wasn't impact of the more global macroeconomic situation and being able to more successfully execute on the the 2019 products.
Also if you'll remember David had called out a in previous calls about the timing of launches are being related to R&D and sometimes launch time, it's got pushed out to make sure that we're putting the best product out into the market. So I think the confidence level for us now in Twentytwenty, given where we are in the R&D cycle.
For the new products that will be coming out later in here its high and so it gives us a support information to say, what we did in terms of the cadence and how it's kinda specifically impact US later in the here.
So some of those new products that were planned for launch didn't didn't launches its part of the issue.
Just to be clear exactly right exactly okay, right and then can you give any update on your progress in the metal arena. Thank you.
Sure I mean in metal, we've we talked about the layered power metallurgy, which is a unique solution that we have that's going after the biggest alloy in the market, which is aluminum the most difficult to cost effectively or produce in threed printing.
And in fact, we've got to Earlybird machines that are already deployed in Europe, one of them at a major automotive OEM. Another one at a metal fit business and I'm very happy with the feedback that we're getting from the deployments in terms of timing, we have not yet announced when the L.P.M. system is going to be in the market.
So stay tuned for that.
Thanks for taking my question.
Your next question comes from Gamma Ci Needham and company.
Hi, Thank you hear me okay.
Yeah, we hear you Gretchen okay. Thanks up it's just a question on a on the the macro headwinds because I'm just trying to get a better senses to how you might be thinking about the impact a now with Corona virus. So first off is there anyway, you can give us.
Some sense as to the magnitude of the weakness that you saw the international business in Q4.
[noise] [noise], so Jim was little hard to guarantee and were you asking were you asking specifically on macro weakness in Q4, and then yeah. Yeah, I just want to get a better sense as to the acute Oh my goodness in Q.
Sure.
Sorry.
So the magnitude of the weakness in the international business in Q4, and then to what extent your your outlook. It I would assume the outlook has has softened ER versus what you're expecting further entering the year with the the onset of the krona virus spreading so just trying to get a sense as to your full year.
Ladies and how how you might be thinking about that that impact a as we've seen you know conditions, obviously get a little weaker.
Yeah.
It there we're not doing 2014, 19, and and specifically talked today and just a year in the second part of the year, we experienced a significant weakness in your opinion where did it.
And specifically in don't they keep very crowded Yelp boys, maybe the old tall and popped a business. There is there going to get to say why does it mean for example in your opinion industry. In general is traveling we sent 12 straight month of construct a contraction in manufacturing on so are there and that will make it.
You see.
And so this will significantly impact our.
On top of 19, given the adult Aldi and maiden name.
Sounds good verticals.
Hey.
We we we believe that it probably some of these will continue going into his mind in its 20 for money and we usually problems. These oh, so they impossible to quantify where they.
When I had a one major ultra centre in China.
Jamie even just a need Colleen Colleen Oh, yes, it's rare to see wanting till to supply all okay did he say, yes, we believe they become one that virus when in fact, most significantly de segment and couldn't be more significant also on a customer base and when it's all supply chain.
Hey, as a result, we we a caution the pullback didn't do much high wind, Italy guidance range and anyone watching very carefully and we expect that in Q1, well see it matched the softer results. If you see those would result in Buffalo.
And they hopefully and things would go better so to the end of the when would be able to leverage well known you for the second policy here, Yeah, I'll just add on that or Jim you know, we're well positioned to return to growth when the macro conditions improve I'm. A reminder, that we have a very high level of engagement and interest across all sectors.
Oh the products provide exceptional value he was gonna be critical products to the automotive industry going forward general manufacturing going forward, so when the capital investment atmosphere resumes.
We're very well positioned or two to be able to take advantage of at the time.
Okay. Thanks, Thanks very much.
Your next question comes from Shannon Cross with Cross research.
Thank you very much yeah. That's a big picture question, you you've had the opportunity to look at the business and they industries I mean outsider's perspective, so I'm curious as you've looked at it what technology materials. Our customer sets do you think will be the biggest drivers of growth in coming years since.
You know again, what's your outside her perspective, I think it it might be unique opportunity to hear what you've seen thank you.
Thank you showed for that question. So yeah, I have the benefit of being an outsider.
Not anymore for the last six days, but yeah [laughter] it can be done outside of the sticky.
And that was one of the reason I decided to take that position off the CEO.
Oh, you know the key in that business success, while the most important Q4 business success it could be the right segment or in the REIT industry. This is the right industry course, they'll make brooklyn's each and there are some technological challenges, but the overall there is a clear about in Brooklyn.
Sure how we can really trunk for both exactly what's the most people don't see might affect your I'm coming from China Fixturing, It's a whole new story here.
This is a six ability or youre right and then you mechanical properties also holds it although you can always do we traditionally processes and we had to get into it and we were doing and definitely we are going for Oh, you know strengthening our design Jesus you.
But those sort of eating and drinking went up victory and their way to do it is not always.
But we do some basic but though it said groundball bidding on continuing to be the foundation that I have here, we have here and then b. They could use drugs is equal to long said, Andy ride the schawk down.
We didn't get Robby or structuring a funny people 30 mode is if we take us into where do we go ahead.
To catch these waves really did and be there incremental factory.
And then go Wow.
<unk>.
Oh and focus wouldn't be a a warrant so he was at all on lease operating mode, and making sure that we have smoothly really leverage over the course the good that's a good we have here.
And then once you have it then you obviously did you plan to every operating model that's supporting its all about hopefully focus and you know in fashion with way really thinking and restructured the resource that location.
And to create.
Oh James.
James.
And so really a elevate the nobody should we already the most in overseas something but we can do much more.
Based on what we have no. One is engagement is indication of what we're doing.
And a lot to say that lost a good things always thought about leveraging the people that empowering.
[noise] group or actually the best in industry, just leveraging examine empower them to do their job.
Thank you.
Okay. Thank you Yonah you'd mentioned I think that you have a high level of confidence and being able to launch at least within the timeframe that you've given but ended the year for some of the new products.
I just what what lead you to believe that what has changed relative to maybe when there's there's been some delays in the past I'm just inside the 2020 guide depend so much on fourth quarter. Thank you.
Oh Im sorry.
But in Bakken Ah, yes. It. So you know we talk a little bit before on the call about you know there was the R&D slowdowns that caused some products be pushed out of 19 into 20.
So clearly you know we get direction from the teams that are giving us the information in terms of when the products are available at what stage there at et cetera. It's a very detailed process Yacov mentioned earlier that he attended a reseller a event that we had a with hundreds of people for three days coming together.
Other and preparing for what 2020 is going to look like I'm a lot of information was exchanged and the team across all of the the categories within this company understand timelines associated to each of the products.
And feel very good about the fact that we can we can say that they will be launching this year.
And as we said a in the back half of the are you know more than that really can't get into hopefully you and others on the call will as Troy said earlier meet without the rapid get to learn a little bit more about our thinking I see what we have at the time, you know meet the management and ER and continue to hear what our timeline looks.
Like adept at that point, which is at the end of April in Anaheim. So looking forward to seeing you there.
We'll be there. Thank you so much.
Your next question comes from a Nada.
<unk> capital.
Hi, Good morning, guys. Thanks for taking the taking the questions.
Yes, I could you are welcome aboard I look forward to working with you.
Thank you just for <unk>, Yeah, you're very welcome.
That's what sort of lever wants to answer.
Much of the talk or the conversation through 2019 with regard to that the launch of the new product to critical mass was.
Getting to double digit revenue grows a at some point is as we would go see 20, clearly macro impacts that Ah, but would love to get your thoughts on you know in a macro stable environment you still believe that does the new products that critical mass and maybe it's in 2021.
Still has the potential to get the revenue growth back to double digits, and then I've a follow up I appreciate it.
Yeah. Good morning aim so putting aside it wasn't bustling and only situation. We do believe that they lived windows and new product doing 2028 with great to see meaningful Walton opportunity for it going forward He said.
Hey, you say improvement also.
They call it a technology FDM and Polyjet is really a B addition, addressable market for it so Wayne because they definitely this is the plan it can be significant they both driver.
Thanks, a lot Gyn and you also believe that it could be a multiyear growth driver. So this is a structural shift.
You know as opposed to you know just a one time, you know sort of sort of adoption of that.
A new products it had increased increased functionality and capability.
Yeah, Great question you are.
It's all about growth engine and we have in our hands growth engine here, both a evolutionary some of them over Bush there were Lucerne area and some of them on moved acknowledges that we've taken as I mentioned before to do not affect you in space. So we were completing the manufacturing spaces with [noise].
So this will be significant.
Great and then just mission is.
Yeah. It's very helpful. Thanks, and then just quick follow up or when you guys. Just speaking about sort of who are the attack the ground up I was there.
Sounded like you also mentioned a minute paraphrase correctly on this but something about yeah, so that supply supply chain, but I took it in the context of.
Ah, yes, so the ability to get price you get your own products made is that accurate or and if it is accurate.
She would be thinking about product constrained at all a in a context for you guys. Thanks, a lot as we as a result, the correct buyers thing.
Right, so not it's really not necessarily about our ability to get our own products as much as it is about the ripple effect.
Of the Corona virus disruption that could cause a pause in investments throughout the eco system of supply chain. So we also have to think about our customers are the tier one tier two suppliers.
Et cetera, so I'm, a little bit wider and probably more impactful in.
In that segment than it is specifically for our ability to to get our own product by the way. We've mentioned several times now that we've been building inventory for the last number of quarters I know if it turns out it was a pretty smart thing to do so it certainly gives US you know that in our pockets to not have to worry about being able to supply our own products.
Into the markets.
That's very helpful. Yeah. Thanks, a lot I appreciate it guys.
I can't for any questions. Please press Star then it number one I know telephone keypad.
Your next question comes from Greg Palm with Craig Hallum Capital.
Yeah. Thanks.
Just starting with the quarterly results you know, it's not often where are your Q4 revenue number isn't the highest quarterly amount throughout the year. So you talked a little bit about where are you saw some weakness geographically, but any certain end markets that we're we're maybe a little bit weaker than what you thought and just curious.
How are you sort of saw the budget flush environment and certain that cadence throughout the quarter.
Yeah.
Hey, good morning, and it's a good question a saying they did decline things. If you do not have not specifically in specific vertical or multiple segment, specifically, mainly any janani specifically in the media and specifically in his shy in or.
Specifically in China. This is the main decline, we're where we see did because decline time.
Okay.
It didn't and then in terms of B the increase in the go to market spending that you mentioned earlier, maybe I missed it or what exactly are you doing here or is it some build up of direct sales capabilities or what.
All right Youre or no.
We want to make sure that we are successfully the new product introduction.
That's why we are supporting good.
We're increasing the spending on the go to market and as you know we could show up in our DNA.
And we expect to increases go to market spending in preparation for the new product introduction. This will impact in the second up from here.
And are increasingly became not getting Q2.
Just to make sure we are prepared.
Oh can can you talk about where that money is actually going into I mean does it oh sales is it building up.
Direct Salesforce is a marketing there's that are I mean.
Any more details on where that money is actually going to be helpful.
Yeah in Judy you didn't seem they several if product. It is same here it is significant.
Yes, it could ever for the entire company. So it's actually that's almost all the elderly patients with the main focus is also on having to go to market ready. So it's mainly sell aim it local publishing MACOM to go to market is where it is not getting benzene and everything all the units ready application engineer.
[noise] Censky, it's raining demonstration and show a lots of if all goes to have been very successful launch and this will have ended the second part of the here.
Got it okay. Thanks.
I'm showing no further questions at this time I would now like to hand, the conference back for closing remarks.
[noise]. Thank you.
Sure. Thank you for joining todays call I'm thrilled to be joining the Stratasys team look forward to speaking with you or.
Again next quarter and to mature in the field.
Ladies and gentlemen. This concludes today's conference. Thank you for your participation in how they wonderful day you may all disconnect.