6-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2017

Commission File Number 001-35751

STRATASYS LTD.
(Translation of registrant’s name into English)
c/o Stratasys, Inc.	1 Holtzman Street, Science Park
7665 Commerce Way	P.O. Box 2496
Eden Prairie, Minnesota 55344	Rehovot, Israel 76124
(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):____

The contents of this Report of Foreign Private Issuer on Form 6-K (this “Form 6-K”), including Exhibits 99.1, 99.2 and 101 annexed hereto, are incorporated by reference into the Registrant’s registration statements on Form S-8, SEC file numbers 333-185240 and 333-190963, filed by the Registrant with the SEC on December 3, 2012 and September 3, 2013, respectively, and shall be a part thereof from the date on which this Form 6-K is furnished, to the extent not superseded by documents or reports subsequently filed or furnished.

CONTENTS

On August 9, 2017, Stratasys Ltd., or Stratasys, released its financial results for the three and six months ended June 30, 2017.

Attached hereto as Exhibit 99.1 are the unaudited, condensed consolidated financial statements of Stratasys for the three and six months ended June 30, 2017 (including the notes thereto) (the “Q2 2017 Financial Statements”).

Attached hereto as Exhibit 99.2 is Stratasys’ review of its results of operations and financial condition for the three and six months ended June 30, 2017, including the following:

(i)	Operating and Financial Review and Prospects
(ii)	Quantitative and Qualitative Disclosures About Market Risk
(iii)	Legal Proceedings Update

Attached hereto as Exhibit 101 are the Q2 2017 Financial Statements, formatted in XBRL (eXtensible Business Reporting Language), consisting of the following sub-exhibits:

Exhibit
Number	Document Description
EX-101.INS	XBRL Taxonomy Instance Document
EX-101.SCH	XBRL Taxonomy Extension Schema Document
EX-101.CAL	XBRL Taxonomy Calculation Linkbase Document
EX-101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
EX-101.LAB	XBRL Taxonomy Label Linkbase Document
EX-101.PRE	XBRL Taxonomy Presentation Linkbase Document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	STRATASYS LTD.
Dated: August 9, 2017	By:	/s/ Lilach Payorski
	Name:	Lilach Payorski
	Title:	Chief Financial Officer

EX-99.1

Exhibit 99.1

STRATASYS LTD.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED

JUNE 30, 2017

(UNAUDITED)

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017
(UNAUDITED)

Item	Page
Consolidated Balance Sheets	2
Consolidated Statements of Operations and Comprehensive Loss	3
Consolidated Statements of Cash Flows	4
Notes to Condensed Consolidated Financial Statements	5-15

1

STRATASYS LTD.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Consolidated Balance Sheets
(in thousands, except share data)
	June 30, 2017			December 31, 2016
ASSETS
Current assets
Cash and cash equivalents	$	305,345		$	280,328
Accounts receivable, net		120,342			120,411
Inventories		116,486			117,521
Net investment in sales-type leases		9,921			11,717
Prepaid expenses		6,701			7,571
Other current assets		17,557			15,491
Total current assets		576,352			553,039
Non-current assets
Net investment in sales-type leases - long-term		7,406			12,126
Property, plant and equipment, net		207,689			208,415
Goodwill		386,513			385,629
Other intangible assets, net		160,926			177,458
Other non-current assets		32,335			29,382
Total non-current assets		794,869			813,010
Total assets	$	1,371,221		$	1,366,049
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	46,087		$	40,933
Current portion of long-term debt		3,714			3,714
Accrued expenses and other current liabilities		28,910			32,207
Accrued compensation and related benefits		39,744			34,186
Obligations in connection with acquisitions		4,932			3,619
Deferred revenues		50,464			49,952
Total current liabilities		173,851			164,611
Non-current liabilities
Long-term debt		20,429			22,286
Deferred tax liabilities		4,197			5,952
Deferred revenues - long-term		14,087			12,922
Other non-current liabilities		25,984			22,251
Total non-current liabilities		64,697			63,411
Total liabilities	$	238,548		$	228,022
Contingencies (see note 9)
Redeemable non-controlling interests		1,811			2,029
Equity
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands shares; 52,854 thousands shares and 52,639 thousands shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively		142			142
Additional paid-in capital		2,644,579			2,633,129
Accumulated other comprehensive loss		(10,143	)		(13,479	)
Accumulated deficit		(1,503,769	)		(1,483,925	)
Equity attributable to Stratasys Ltd.		1,130,809			1,135,867
Non-controlling interests		53			131
Total equity		1,130,862			1,135,998
Total liabilities and equity	$	1,371,221		$	1,366,049

The accompanying notes are an integral part of these consolidated financial statements.

2

STRATASYS LTD.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Consolidated Statements of Operations and Comprehensive Loss
	Three Months Ended June 30,						Six Months Ended June 30,
in thousands, except per share data	2017			2016			2017			2016
Net sales
Products	$	121,021		$	123,758		$	236,108		$	242,392
Services		48,969			48,315			97,044			97,587
		169,990			172,073			333,152			339,979
Cost of sales
Products		54,723			61,413			109,203			118,351
Services		31,875			31,128			63,677			60,927
		86,598			92,541			172,880			179,278
Gross profit		83,392			79,532			160,272			160,701
Operating expenses
Research and development, net		23,251			24,366			47,885			49,481
Selling, general and administrative		64,569			72,884			128,748			149,271
Change in fair value of obligations in connection with acquisitions		617			(587	)		1,313			140
		88,437			96,663			177,946			198,892
Operating loss		(5,045	)		(17,131	)		(17,674	)		(38,191	)
Financial income, net		429			932			685			1,112
Loss before income taxes		(4,616	)		(16,199	)		(16,989	)		(37,079	)
Income tax expenses		1,308			2,454			2,634			4,745
Share in loss of associated company		(229	)		-			(517	)		-
Net loss	$	(6,153	)	$	(18,653	)	$	(20,140	)	$	(41,824	)
Net loss attributable to non-controlling interest		(166	)		(163	)		(296	)		(193	)
Net loss attributable to Stratasys Ltd.	$	(5,987	)	$	(18,490	)	$	(19,844	)	$	(41,631	)
Net loss per ordinary share attributable to Stratasys Ltd.
Basic	$	(0.11	)	$	(0.35	)	$	(0.38	)	$	(0.80	)
Diluted	$	(0.11	)	$	(0.36	)	$	(0.38	)	$	(0.80	)
Weighted average ordinary shares outstanding
Basic		52,778			52,169			52,733			52,133
Diluted		52,778			52,496			52,733			52,133
Comprehensive loss
Net loss	$	(6,153	)	$	(18,653	)	$	(20,140	)	$	(41,824	)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		2,437			(2,962	)		3,150			380
Unrealized gains on derivatives designated as cash flow hedges		(337	)		(539	)		186			391
Other comprehensive income (loss), net of tax		2,100			(3,501	)		3,336			771
Comprehensive loss		(4,053	)		(22,154	)		(16,804	)		(41,053	)
Less: comprehensive loss attributable to non-controlling interests		(166	)		(163	)		(296	)		(193	)
Comprehensive loss attributable to Stratasys Ltd.	$	(3,887	)	$	(21,991	)	$	(16,508	)	$	(40,860	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

STRATASYS LTD.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Consolidated Statements of Cash Flows
	Six Months Ended June 30,
in thousands	2017			2016
Cash flows from operating activities
Net loss	$	(20,140	)	$	(41,824	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		32,972			46,792
Stock-based compensation		9,235			11,102
Foreign currency transaction gain		(7,350	)		(3,427	)
Deferred income taxes		(1,581	)		(3,327	)
Change in fair value of obligations in connection with acquisitions		1,313			140
Impairment of other intangibles assets		-			1,779
Other items		1,509			636
Change in cash attributable to changes in operating assets and liabilities:
Accounts receivable, net		2,524			11,294
Inventories		626			(3,024	)
Net investment in sales-type leases		6,516			487
Other current assets and prepaid expenses		1,287			880
Other non-current assets		264			511
Accounts payable		5,066			2,112
Other current liabilities		(423	)		(2,295	)
Deferred revenues		604			2,084
Other non-current liabilities		3,809			14,556
Net cash provided by operating activities		36,231			38,476
Cash flows from investing activities
Purchase of property and equipment		(11,291	)		(21,079	)
Investment in unconsolidated entities		(2,548	)		(23,064	)
Purchase of intangible assets		(677	)		(771	)
Proceeds from maturities of short-term bank deposits		-			68,361
Investment in short-term bank deposits		-			(67,077	)
Other investing activities		(163	)		(142	)
Net cash used in investing activities		(14,679	)		(43,772	)
Cash flows from financing activities
Repayment of current portion of long-term debt		(1,857	)		-
Proceeds from exercise of stock options		2,215			711
Net cash provided by financing activities		358			711
Effect of exchange rate changes on cash and cash equivalents		3,107			875
Net change in cash and cash equivalents		25,017			(3,710	)
Cash and cash equivalents, beginning of period		280,328			257,592
Cash and cash equivalents, end of period	$	305,345		$	253,882
Supplemental disclosures of cash flow information:
Transfer of fixed assets to inventory		630			583
Transfer of inventory to fixed assets		3,354			2,464

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

STRATASYS LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1. Basis of Presentation and Consolidation

Stratasys Ltd. (collectively with its subsidiaries, the “Company”) is a 3D solutions company, offering additive manufacturing (“AM”) solutions for the creation of parts used in the processes of designing and manufacturing products and for the direct manufacture of end parts across a broad range of vertical markets. The Company’s solutions include products ranging from entry-level desktop 3D printers to systems for rapid prototyping (“RP”) and large production systems for direct digital manufacturing (“DDM”). The Company also develops, manufactures and sells materials for use with its systems and provides related service offerings. The Company also provides a variety of custom manufacturing solutions through its direct manufacturing printed parts service as well as 3D printing related professional services offerings.

The condensed consolidated interim financial statements include the accounts of Stratasys Ltd. and its subsidiaries. All intercompany accounts and transactions, including profits from intercompany sales not yet realized outside the Company, have been eliminated in consolidation.

The consolidated interim financial information herein is unaudited; however, such information reflects all adjustments (consisting of normal, recurring adjustments), which are, in the opinion of management, necessary for a fair statement of results for the interim period. The results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of the results to be expected for the full year. Certain financial information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. The reader is referred to the audited consolidated financial statements and notes thereto for the year ended December 31, 2016, filed with the U.S. Securities and Exchange Commission (the “SEC”) as part of the Company’s Annual Report on Form 20-F for such year on March 9, 2017.

Recently issued and adopted accounting pronouncements

In March 2016, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) which simplifies certain aspects of the accounting for share-based payments, including, among other items, accounting for income taxes and allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur, rather than to account for them based on an estimate of expected forfeitures. This ASU became effective for the Company on January 1, 2017. Upon the adoption of this ASU, the Company recorded a cumulative-effect adjustment to its net operating losses of approximately $5 million as of January 1, 2017 offset with an increase to its valuation allowance with respect to previously unrecognized excess tax benefits. Under the new ASU, excess tax benefits or deficiencies related to stock option exercises and restricted stock unit vesting are recognized in the statement of operations. The adoption of this ASU does not have a material impact on the Company’s results of operations as excess tax benefits generated from the vesting of share-based awards will be recognized in the consolidated statements of operations, but offset with consideration of the valuation allowance in the Company’s US operations. In addition, upon the adoption of this ASU, the Company has elected as an accounting policy to record forfeitures as they occur, using a modified retrospective transition method. The total cumulative-effect adjustment to retained earnings as of January 1, 2017 was immaterial. Prior periods have not been restated.

In January 2017, the FASB issued an ASU which eliminates the requirement to determine the implied fair value of the reporting unit’s goodwill by measuring the reporting unit’s assets and liabilities at fair value in a hypothetical analysis as if the reporting unit was acquired in a business combination, as part of the second step of goodwill impairment testing. Under the new guidance, goodwill impairment testing will be performed by comparing the fair value of the reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The new ASU is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and should be applied on a prospective basis. Early adoption is permitted for annual or interim goodwill impairment testing performed after January 1, 2017. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements.

5

STRATASYS LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

In November 2016, the FASB issued an ASU which requires entities to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The ASU is effective for annual reporting periods (including interim periods within those annual reporting periods) beginning after December 15, 2017. Early adoption is permitted and should be adopted retrospectively. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated statements of cash flows.

In October 2016, the FASB issued an ASU which eliminates the exception for an intra-entity transfer of an asset other than inventory. This ASU requires that the income tax consequences of an intra-entity asset transfer other than inventory are recognized at the time of the transfer, rather than when the transferred asset is sold to a third party or otherwise recovered through use. The ASU is effective for annual reporting periods (including interim periods within those annual reporting periods) beginning after December 15, 2017. Early adoption is permitted as of the beginning of an annual reporting period (as of the first interim period if an entity issues interim financial statements). The new guidance requires adoption on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements.

In February 2016, the FASB issued a new ASU which revises lease accounting guidance. Under the new guidance, lessees will be required to recognize a right-of-use asset and a lease liability for all leases, other than leases that meet the definition of a short-term lease. The liability and the right-of-use asset arising from the lease will be measured as the present value of the lease payments. The new standard is effective for fiscal year beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition approach. The Company is currently evaluating the impact of the adoption of the new lease accounting guidance on its consolidated financial statements.

In May 2014, the FASB issued guidance on revenue from contracts with customers that will supersede the current revenue recognition guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle of the new revenue recognition standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new revenue recognition standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted for annual reporting periods beginning after December 15, 2016. This standard may be applied retrospectively to each prior period presented (“full retrospective approach”) or retrospectively with the cumulative effect recognized as of the date of adoption (“modified retrospective approach”). The Company has developed a project plan to analyze the potential impact this guidance will have on its consolidated financial statements and related disclosures as well as its business processes, systems and controls. This includes reviewing revenue contracts across all revenue streams and evaluates potential differences that would result from applying the requirements under the new guidance. Based on the analysis conducted to date, the Company expects to adopt this standard using the modified retrospective approach and is still currently evaluating all the potential impacts of the adoption of this standard. Therefore, the Company cannot reasonably estimate quantitative information related to the impact of this standard on its consolidated financial statements at this time.

6

STRATASYS LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 2. Inventories

Inventories, net consisted of the following:

	June 30,		December 31,
	2017		2016
	U.S. $ in thousands
Finished goods	$	64,077	$	62,728
Work-in-process		2,021		2,389
Raw materials		50,388		52,404
	$	116,486	$	117,521

Note 3. Goodwill and Other Intangible Assets

Goodwill

Changes in the carrying amount of the Company’s goodwill for the six months ended June 30, 2017 were as follows:

	U.S. $ in millions
Goodwill as of January 1, 2017	$	385.6
Translation differences		0.9
Goodwill as of June 30, 2017	$	386.5

Other Intangible Assets

Other intangible assets consisted of the following:

	June 30, 2017							December 31, 2016
	Carrying Amount,					Net		Carrying Amount,					Net
	Net of		Accumulated			Book		Net of		Accumulated			Book
	Impairment		Amortization			Value		Impairment		Amortization			Value
	U.S. $ in thousands
Developed technology	$	304,766	$	(209,549	)	$	95,217	$	304,766	$	(198,632	)	$	106,134
Patents		19,692		(13,268	)		6,424		19,009		(12,257	)		6,752
Trademarks and trade names		27,808		(17,526	)		10,282		27,819		(16,849	)		10,970
Customer relationships		106,880		(58,816	)		48,064		106,571		(54,258	)		52,313
Capitalized software development costs		19,541		(18,602	)		939		19,540		(18,251	)		1,289
	$	478,687	$	(317,761	)	$	160,926	$	477,705	$	(300,247	)	$	177,458

Amortization expense relating to intangible assets for the three-month periods ended June 30, 2017 and 2016 was approximately $8.7 million and $14.5 million, respectively. Amortization expense relating to intangible assets for the six-month periods ended June 30, 2017 and 2016 was approximately $17.4 million and $29.2 million, respectively. The decrease in amortization expense was primarily due to change in the estimated useful lives of certain intangibles assets.

7

STRATASYS LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

As of June 30, 2017, estimated amortization expense relating to intangible assets currently subject to amortization for each of the following periods was as follows:

	Estimated
	amortization expense
	(U.S. $ in thousands)
Remaining 6 months of 2017	$	17,323
2018		33,214
2019		32,307
2020		31,967
2021		31,387
Thereafter		14,728
Total	$	160,926

Note 4. Loss Per Share

The following table presents the numerator and denominator of the basic and diluted net loss per share computations for the three and six months ended June 30, 2017 and 2016:

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
	In thousands, except per share amounts
Numerator:
Net loss attributable to Stratasys Ltd. for basic loss per share	$	(5,987	)	$	(18,490	)	$	(19,844	)	$	(41,631	)
Adjustment of deferred payments liability revaluation		-			(559	)		-			-
Net loss attributable to Stratasys Ltd. for diluted loss per share		(5,987	)		(19,049	)		(19,844	)		(41,631	)
Denominator:
Weighted average shares – denominator for basic net loss per share		52,778			52,169			52,733			52,133
Add:
Shares settlement presumed for deferred payments liability		-			327			-			-
Denominator for diluted loss per share		52,778			52,496			52,733			52,133
Net loss per share attributable to Stratasys Ltd.
Basic	$	(0.11	)	$	(0.35	)	$	(0.38	)	$	(0.80	)
Diluted	$	(0.11	)	$	(0.36	)	$	(0.38	)	$	(0.80	)

The computation of diluted net loss per share excluded share awards of 4.4 million shares and 3.8 million shares for the three months ended June 30, 2017 and 2016, respectively, and 4.4 million shares and 4.1 million shares for the six months ended June 30, 2017 and 2016, because their inclusion would have had an anti-dilutive effect on the diluted net loss per share.

8

STRATASYS LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 5. Income Taxes

The Company had a negative effective tax rate of 28.3% for the three-month periods ended June 30, 2017 compared to a negative effective tax rate of 15.1% for the three-month periods ended June 30, 2016, and negative effective tax rate of 15.5% for the six-month periods ended June 30, 2017 compared to a negative effective tax rate of 12.8% for the six-month periods ended June 30, 2016. The Company’s effective tax rate was primarily impacted by different geographic mix of earnings and losses driven by no tax benefit being recorded for its U.S. subsidiaries tax losses for the three-month and six-month periods ended June 30, 2017 and 2016.

Note 6. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.

Observable inputs are inputs that are developed using market data, such as publicly available information about actual events or transactions, and that reflect the assumptions that market participants would use when pricing the asset or liability. Unobservable inputs are inputs for which market data are not available and that are developed using the best information available about the assumptions that market participants would use when pricing the asset or liability.

The fair value hierarchy is categorized into three Levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2 inputs include inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs). Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

9

STRATASYS LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Financial instruments measured at fair value

The following tables summarize the Company’s financial assets and liabilities that are carried at fair value on a recurring basis, by fair value hierarchy, in its consolidated balance sheets:

	June 30, 2017
	(U.S. $ in thousands)
	Level 2			Level 3			Total
Assets:
Foreign exchange forward contracts not designated as hedging instruments	$	206		$	-		$	206
Foreign exchange forward contracts designated as hedging instruments		161			-			161
Liabilities:
Foreign exchange forward contracts not designated as hedging instruments		(811	)		-			(811	)
Obligations in connection with acquisitions		-			(3,932	)		(3,932	)
	$	(444	)	$	(3,932	)	$	(4,376	)
	December 31, 2016
	(U.S. $ in thousands)
	Level 2			Level 3			Total
Assets:
Foreign exchange forward contracts not designated as hedging instruments	$	1,440		$	-		$	1,440
Foreign exchange forward contracts designated as hedging instruments		37			-			37
Liabilities:
Foreign exchange forward contracts not designated as hedging instruments		(48	)		-			(48	)
Foreign exchange forward contracts designated as hedging instruments		(61	)		-			(61	)
Obligations in connection with acquisitions		-			(2,619	)		(2,619	)
	$	1,368		$	(2,619	)	$	(1,251	)

The Company’s foreign exchange forward contracts are classified as Level 2, as they are not actively traded and are valued using pricing models that use observable market inputs, including interest rate curves and both forward and spot prices for currencies (Level 2 inputs).

Other financial instruments consist mainly of cash and cash equivalents, current and non-current receivables, net investment in sales-type leases, bank loan, accounts payable and other current liabilities. The fair value of these financial instruments approximates their carrying values.

10

STRATASYS LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Other fair value disclosures

The following table provides a reconciliation of the changes for those financial liabilities where fair value measurements are estimated utilizing Level 3 inputs, which consist of obligations in connection with acquisitions:

	Six months ended		Year ended
	June 30, 2017		December 31, 2016
	(U.S. $ in thousands)
Fair value at the beginning of the period	$	2,619	$	6,991
Settlements		-		(3,500	)
Change in fair value recognized in earnings		1,313		(872	)
Fair value at the end of the period	$	3,932	$	2,619

The Company’s obligations in connection with acquisitions as of June 30, 2017, which are estimated utilizing Level 3 inputs, are related to the deferred payments for the Company’s acquisition of Solid Concepts Inc. (the “Solid Concepts transaction”). As part of the Solid Concepts transaction, which was completed in July 2014, the Company is obligated to pay additional deferred payments in three separate annual installments after the Solid Concepts transaction date (“deferred payments”). Subject to certain requirements for cash payments, the Company retains the discretion to settle the deferred payments in its shares, cash or any combination of the two. The deferred payments are also subject to certain adjustments based on the Company’s share price. During the third quarter of 2016, the Company issued 152,633 ordinary shares valued at $3.1 million and paid cash of $0.4 million to settle the second annual installment of the deferred payments.

The deferred payments are classified as liabilities and are measured at fair value in the Company’s consolidated balance sheets. The fair value of the deferred payments was determined based on the closing market price of the Company’s ordinary shares on the Solid Concepts transaction date, adjusted to reflect a discount for lack of marketability for the applicable periods. The discount for lack of marketability was calculated based on the historical volatility of the Company’s share price and thus represents a Level 3 measurement within the fair value hierarchy. As of June 30, 2017, the fair value of the remaining deferred payments was $3.9 million. As of June 30, 2017, the total amount of the remaining deferred payments, which does not reflect a discount for lack of marketability, was approximately $4.0 million, based on the Company’s share price as of that date.

The fair value of the deferred payments is primarily linked to the Company’s share price. An increase of 10% in the Company’s share price as of June 30, 2017 would have increased the fair value of the remaining deferred payments by $0.4 million.

In addition, changes in Level 3 inputs that were used in the fair value calculation might change the fair value of the deferred payments. A decrease of 10% in the Company’s share price volatility used in the calculation for discount for lack of marketability as of June 30, 2017 would not change materially the fair value of the Company’s deferred payments liability.

With respect to the fair-value revaluations of the deferred payments, the Company recorded a loss of $0.6 million and a gain of $0.6 million, for the three-month periods ended June 30, 2017 and 2016, respectively, and losses of $1.3 million and $0.1 million for the six-month periods ended June 30, 2017 and 2016, respectively. Such fair-value revaluations are presented under change in fair value of obligations in connection with acquisitions in the Company’s consolidated statements of operations and comprehensive loss.

11

STRATASYS LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 7. Derivative instruments and hedging activities

As the Company conducts its operations globally, it is exposed to global market risks and to the risk that its earnings, cash flows and equity could be adversely impacted by fluctuations in foreign currency exchange rates. The Company enters into transactions involving foreign currency exchange derivative financial instruments. The Company manages its foreign currency exposures on a consolidated basis, which allows the Company to net exposures and take advantage of any natural hedging. The transactions are designed to manage the Company’s net exposure to foreign currency exchange rates and to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates. The Company does not enter into derivative transactions for trading purposes.

The Company is primarily exposed to foreign exchange risk with respect to recognized assets and liabilities and forecasted transactions denominated in the New Israeli Shekel (“NIS”), the Euro, the Japanese Yen, the Korean Won and the Chinese Yuan. The gains and losses on the hedging instruments offset losses and gains on the hedged items. Financial markets and currency volatility may limit the Company’s ability to hedge these exposures.

The following table summarizes the condensed consolidated balance sheets classification and fair values of the Company’s derivative instruments:

		Fair Value						Notional Amount
		June 30,			December 31,			June 30,		December 31,
	Balance sheet location	2017			2016			2017		2016
						U.S. $ in thousands
Assets derivatives -Foreign exchange contracts, not designated as hedging instruments	Other current assets	$	206		$	1,440		$	26,060	$	39,982
Assets derivatives -Foreign exchange contracts, designated as cash flow hedge	Other current assets		161			37			6,526		8,348
Liability derivatives -Foreign exchange contracts, not designated as hedging instruments	Accrued expenses and other current liabilities		(811	)		(48	)		61,868		13,273
Liability derivatives -Foreign exchange contracts, designated as hedging instruments	Accrued expenses and other current liabilities		-			(61	)		-		7,534
		$	(444	)	$	1,368		$	94,454	$	69,137

As of June 30, 2017, the notional amounts of the Company’s outstanding exchange forward contracts, not designated as hedging instruments, were $87.9 million and were used to reduce foreign currency exposures of the local currencies in the markets in which the Company operates. With respect to such derivatives, loss of $2.4 million and gain of $0.5 million were recognized under financial income, net for the three-month periods ended June 30, 2017 and 2016, respectively, and losses of $2.7 million and $2.4 million were recognized under financial income, net for the six-month periods ended June 30, 2017 and 2016, respectively. Such losses and gains partially offset the revaluation changes of foreign currencies the balance sheet items, which are also recognized under financial income, net.

As of June 30, 2017, the Company had in effect foreign exchange forward contracts, designated as cash flow hedge for accounting purposes, for the conversion of $6.5 million into NIS. The Company uses short-term cash flow hedge contracts to reduce its exposure to variability in expected future cash flows resulting mainly from payroll costs denominated in NIS. The changes in fair value of those contracts are included in the Company’s accumulated other comprehensive loss. These contracts mature through December 2017.

12

STRATASYS LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 8. Equity

a. Stock-based compensation plans

Stock-based compensation expenses for equity-classified stock options and RSUs were allocated as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
	U.S $ in thousands
Cost of sales	$	799	$	729	$	1,442	$	1,451
Research and development, net		1,089		1,357		1,938		2,716
Selling, general and administrative		3,443		3,393		5,855		6,935
Total stock-based compensation expenses	$	5,331	$	5,479	$	9,235	$	11,102

A summary of the Company’s stock option activity for the six months ended June 30, 2017 is as follows:

			Weighted Average
	Number of Options		Exercise Price
Options outstanding as of January 1, 2017	2,615,461		$	37.21
Granted	1,608,885			20.51
Exercised	(140,476	)		15.77
Forfeited	(464,266	)		40.97
Options outstanding as of June 30, 2017	3,619,604		$	30.14
Options exercisable as of June 30, 2017	1,477,347		$	38.88

The outstanding options generally have a term of ten years from the grant date. Options granted become exercisable over the vesting period, which is normally a four-year period beginning on the grant date, subject to the employee’s continuous service to the Company. The fair value of stock options is determined using the Black-Scholes model.

The fair value of stock options is determined using the Black-Scholes model. The weighted-average grant date fair value of options that were granted during the six-month period ended June 30, 2017 was $10.78 per option.

During the six-month periods ended June 30, 2017 and 2016, the Company issued 140,476 shares and 93,591 shares, respectively, upon the exercise of stock options. This resulted in an increase in equity of $2.2 million and $0.7 million for the six-month periods ended June 30, 2017 and 2016, respectively.

As of June 30, 2017, the unrecognized compensation cost of $23.2 million related to all unvested, equity-classified stock options is expected to be recognized as an expense over a weighted-average period of 3.2 years.

13

STRATASYS LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

A summary of the Company’s RSUs activity for the six months ended June 30, 2017 is as follows:

			Weighted Average
	Number of RSUs		Grant Date Fair Value
Unvested RSUs outstanding as of January 1, 2017	267,756		$	81.35
Granted	253,858			19.97
Forfeited	(73,638	)		82.50
Vested	(67,980	)		57.69
Unvested RSUs outstanding as of June 30, 2017	379,996		$	44.36

The fair value of RSUs is determined based on the quoted price of the Company’s ordinary shares on the date of the grant.

As of June 30, 2017, the unrecognized compensation cost of $10.6 million related to all unvested, equity-classified RSUs is expected to be recognized as expense over a weighted-average period of 2.9 years.

b. Accumulated other comprehensive loss

The following table presents the changes in the components of accumulated other comprehensive income (loss), net of taxes, for the six months ended June 30, 2017 and 2016:

	Six months ended June 30, 2017
	Net unrealized gain			Foreign currency
	(loss) on cash flow			translation
	hedges			adjustments			Total
	U.S. $ in thousands
Balance as of January 1, 2017	$	(24	)	$	(13,455	)	$	(13,479	)
Other comprehensive income before reclassifications		1,069			3,150			4,219
Amounts reclassified from accumulated other comprehensive loss		(883	)		-			(883	)
Other comprehensive income		186			3,150			3,336
Balance as of June 30, 2017	$	162		$	(10,305	)	$	(10,143	)

	Six months ended June 30, 2016
	Net unrealized gain			Foreign currency
	(loss) on cash flow			translation
	Hedges			adjustments			Total
	U.S. $ in thousands
Balance as of January 1, 2016	$	(107	)	$	(10,667	)	$	(10,774	)
Other comprehensive loss before reclassifications		542			380			922
Amounts reclassified from accumulated other comprehensive income		(151	)		-			(151)
Other comprehensive income		391			380			771
Balance as of June 30, 2016	$	284		$	(10,287	)	$	(10,003	)

14

STRATASYS LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 9. Contingencies

Claims Related to Company Equity

On March 4, 2013, five current or former minority shareholders (two of whom were former directors) of the Company filed two lawsuits against the Company in an Israeli central district court. The lawsuits demanded that the Company amend its capitalization table such that certain share issuances prior to the Stratasys-Objet merger to certain of Objet’s shareholders named as defendants would be cancelled, with a consequent issuance of additional shares to the plaintiffs to account for the subsequent dilution to which they have been subject. The lawsuits also named as defendants Elchanan Jaglom, Chairman of the Company’s board of directors, in one of the lawsuits, Ilan Levin, the Company’s Chief Executive Officer and director, various shareholders of the Company who were also shareholders of Objet, and David Reis, a director.

The Company filed its statements of defense in May 2013 denying the plaintiffs’ claims. In 2015, the court dismissed the lawsuit of one of the former directors due to lack of cause. In February 2017, the parties reached an agreement pursuant to which all claims were settled at no material cost to the Company. Notice of the settlement was provided and the suits were subsequently dismissed.

Securities Law Class Actions

On February 5, 2015, a lawsuit styled as a class action was commenced in the United States District Court for the District of Minnesota, naming the Company and certain of the Company’s officers as defendants. Similar actions were filed on February 9 and 20, 2015 in the Southern District of New York and the Eastern District of New York, respectively. The lawsuits allege violations of the Securities Exchange Act of 1934 in connection with allegedly false and misleading statements concerning the Company’s business and prospects. The plaintiffs seek damages and awards of reasonable costs and expenses, including attorneys’ fees.

On April 15, 2015, the cases were consolidated for all purposes, and on April 24, 2015, the Court entered an order appointing lead plaintiffs and approving their selection of lead counsel for the putative class. On July 1, 2015, lead plaintiffs filed their consolidated complaint. On August 31, 2015, the defendants moved to dismiss the consolidated complaint for failure to state a claim. The Court heard the motion on December 11, 2015. On June 30, 2016, the Court granted defendants’ motion to dismiss with prejudice and entered judgment in favor of defendants. On July 29, 2016, lead plaintiffs filed a notice of appeal to the United States Court of Appeals for the Eighth Circuit from the Court’s judgment. On September 22, 2016, lead plaintiffs filed the opening initial brief in support of their appeal. On October 24, 2016, defendants filed their answering brief to the appeal. On November 18, 2016, lead plaintiffs filed their reply brief in support of the appeal. Oral arguments for appeal were held on March 9, 2017. On July 25, 2017, the Eighth Circuit entered an order and judgment affirming the Court’s dismissal with prejudice.

The Company is a party to various other legal proceedings, the outcome of which, in the opinion of management, will not have a significant adverse effect on the financial position or profitability of the Company.

15

EX-99.2

Exhibit 99.2

OPERATING AND FINANCIAL REVIEW AND PROSPECTS.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and the related notes included as Exhibit 99.1 to the Report of Foreign Private Issuer on Form 6-K to which this Operating and Financial Review and Prospects is attached, or the Form 6-K. The discussion below contains forward-looking statements (within the meaning of the United States federal securities laws) that are based upon our current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to inaccurate assumptions and known or unknown risks and uncertainties, including those identified in “Forward-Looking Statements and Factors that May Affect Future Results of Operations”, below, as well in the “Risk Factors” in Item 3.D of our Annual Report on Form 20-F for the year ended December 31, 2016, or our 2016 Annual Report.

Overview of Business and Trend Information

We are a leading global provider of additive manufacturing, or AM, solutions for the creation of parts used in the processes of designing and manufacturing products and for the direct manufacture of end parts.

We provide an integrated solutions offering for different vertical markets focusing on aerospace, automotive, healthcare, tooling and manufacturing, education and consumer electronics that includes compatible products and services that are designed to meet our customers’ needs in an efficient manner. Our solutions consisting of a broad range of systems, consumables and services for 3D printing and additive manufacturing and address our customers’ needs for 3D printing, including printing systems, consumables, software, paid parts, strategic consulting and professional services, and 3D content.

Our 3D printers include systems ranging from entry-level desktop 3D printers to systems for rapid prototyping, or RP, and large production systems for direct digital manufacturing, or DDM. We also develop, manufacture and sell materials for use with our systems and provide related services offerings. We offer a powerful range of additive manufacturing materials, including clear, rubberlike and biocompatible photopolymers, and tough high-performance thermoplastics. We believe that the range of 3D printing consumable materials that we offer, consisting of 15 fused deposition modeling, or FDM, cartridge-based materials, 25 Polyjet cartridge-based materials, five Smooth Curvature Printing, or SCP, inkjet-based materials, 158 non-color digital materials, and over 1,500 color variations, is the widest in the industry. Our service offerings include Stratasys Direct Manufacturing, or SDM, printed parts services which offers AM capabilities encompassing a wide range of technologies allowing for plastic and metal parts for rapid prototyping and production processes, as well as related professional services.

We conduct our business globally and provide products and services to our global customer base through our main operational facilities which are located in Israel, the United States, Germany and Hong Kong as well through our offices in China, Italy, Brazil, India, Japan and Korea. Our extensive global reach is well-positioned through a network of approximately 200 resellers and selling agents around the world and an online channel. We have approximately 2,300 employees and hold more than 1,200 granted or pending additive manufacturing patents globally.

Summary of Financial Results

Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. In the opinion of our management, all adjustments considered necessary for a fair statement of the unaudited condensed consolidated financial statements have been included herein and are of a normal recurring nature. The following discussion compares the actual results, on a GAAP basis, for the three and six months ended June 30, 2017 with the corresponding periods in 2016.

1

Results of Operations

Comparison of Three Months Ended June 30, 2017 to Three Months Ended June 30, 2016

The following table sets forth certain statement of operations data for the periods indicated:

	Three Months Ended June 30,
	2017					2016
	U.S. $ in			% of		U.S. $ in			% of
	thousands			Revenues		thousands			Revenues
Revenues	$	169,990		100.0	%	$	172,073		100.0	%
Cost of revenues		86,598		50.9	%		92,541		53.8	%
Gross profit		83,392		49.1	%		79,532		46.2	%
Research and development, net		23,251		13.7	%		24,366		14.2	%
Selling, general and administrative		64,569		38.0	%		72,884		42.4	%
Change in fair value of obligations in connection with acquisitions		617		0.4	%		(587	)	-0.3	%
Operating loss		(5,045	)	-3.0	%		(17,131	)	-10.0	%
Financial income, net		429		0.3	%		932		0.5	%
Loss before income taxes		(4,616	)	-2.7	%		(16,199	)	-9.4	%
Income tax expenses		1,308		0.8	%		2,454		1.4	%
Share in loss of associated company		(229	)	-0.1	%		-		0.0	%
Net loss attributable to non-controlling interests		(166	)	-0.1	%		(163	)	-0.1	%
Net loss attributable to Stratasys Ltd.		(5,987	)	-3.5	%		(18,490	)	-10.7	%

Discussion of Results of Operations

Revenues

Our products and services revenues for the three months ended June 30, 2017 and 2016, as well as the percentage change reflected thereby, were as follows:

	Three Months Ended June 30,
	2017		2016		% Change
	U.S. $ in thousands
Products	$	121,021	$	123,758	-2.2	%
Services		48,969		48,315	1.4	%
	$	169,990	$	172,073	-1.2	%

Products Revenues

Revenues derived from products (including AM systems and consumable materials) decreased by $2.7 million, or 2.2% for the three months ended June 30, 2017, as compared to the three months ended June 30, 2016. The decrease in products revenues was driven by a decrease in our systems revenues and was partially offset by an increase in our consumables revenues.

The decrease in systems revenues of 5.6% was driven primarily by shift in our product mix, with low-end systems constituting a higher portion of our systems sold, which reflects a strong demand for our low cost, high value F123 offering during the three months ended June 30, 2017, as compared to the successful launch of our high end J750 multi-material system during the three months ended June 30, 2016.

2

Consumables revenues for the three months ended June 30, 2017 increased by 2.1% as compared to the three months ended June 30, 2016. The increase was driven primarily by the favorable effect of our growing installed base of systems as well as favorable trends around the utilization of our systems.

Services Revenues

Services revenues (including SDM, maintenance contracts, spare parts and other services) increased by $0.7 million for the three months ended June 30, 2017, or 1.4%, as compared to the three months ended June 30, 2016. The increase in services revenues was primarily attributable to an increase in maintenance contracts, reflecting our growing installed base of systems, partially offset by a decrease in SDM revenues.

Revenues by Region

Revenues and the percentage of revenues by region for the three months ended June 30, 2017 and 2016, as well as the percentage change in revenues in each such region reflected thereby, were as follows:

	Three Months Ended June 30,
	2017				2016				% Change
	U.S.$ in		% of		U.S.$ in		% of
	thousands		Revenues		thousands		Revenues
North America	$	105,950	62.3	%	$	101,925	59.3	%	3.9	%
EMEA		36,700	21.6	%		36,211	21.0	%	1.4	%
Asia Pacific		25,152	14.8	%		30,784	17.9	%	-18.3	%
Other		2,188	1.3	%		3,153	1.8	%	-30.6	%
	$	169,990	100.0	%	$	172,073	100.0	%	-1.2	%

Revenues in the North America region increased by $4.0 million, or 3.9%, to $105.9 million for the three months ended June 30, 2017, compared to $101.9 million for the three months ended June 30, 2016. The increase was primarily driven by higher products revenues, partially offset by lower services revenues due to lower SDM revenues.

Revenues in the EMEA region increased by $0.5 million, or 1.4%, to $36.7 million for the three months ended June 30, 2017, compared to $36.2 million for the three months ended June 30, 2016. The increase was primarily driven by higher services and consumables revenues, partially offset by lower systems revenues. Revenues in the EMEA region for the three months ended June 30, 2017 increased by approximately 4.4% as compared to the three months ended June 30, 2016, on a constant currency basis when using the prior period’s exchange rates.

Revenues in the Asia Pacific region decreased by $5.6 million, or 18.3%, to $25.2 million for the three months ended June 30, 2017, compared to $30.8 million for the three months ended June 30, 2016. The decrease was primarily in Japan and China due to lower products revenues, partially offset by higher services revenues. The decrease in products revenues was driven primarily by slower adoption of additive manufacturing in key industries.

3

Gross Profit

Gross profit for our products and services for the three months ended June 30, 2017 and 2016, as well as the percentage change reflected thereby, were as follows:

	Three Months Ended June 30,
	2017		2016
	U.S. $ in thousands				Change in %
Gross profit attributable to:
Products	$	66,298	$	62,345	6.3	%
Services		17,094		17,187	-0.5	%
	$	83,392	$	79,532	4.9	%

Gross profit as a percentage of revenues for our products and services for the three months ended June 30, 2017 and 2016, was as follows:

	Three Months Ended June 30,
	2017		2016
Gross profit as a percentage of revenues from:
Products	54.8	%	50.4	%
Services	34.9	%	35.6	%
Total gross profit	49.1	%	46.2	%

Gross profit attributable to products revenues increased by $4.0 million, or 6.3%, to $66.3 million for the three months ended June 30, 2017, compared to gross profit of $62.3 million for the three months ended June 30, 2016. Gross profit attributable to products revenues as a percentage of products revenues increased to 54.8% for the three months ended June 30, 2017, compared to gross profit of 50.4% for the three months ended June 30, 2016.

The increase in gross profit attributable to products revenues was primarily driven by lower amortization and impairment expense of $6.6 million, as well as lower reorganization related costs of $3.4 million, partially offset by a shift in sales mix.

Gross profit attributable to services revenues slightly decreased by $0.1 million, or 0.5%, to $17.1 million for the three months ended June 30, 2017, compared to $17.2 million for the three months ended June 30, 2016. Gross profit attributable to services revenues as a percentage of services revenues in the three months ended June 30, 2017 decreased to 34.9%, as compared to 35.6% for the three months ended June 30, 2016. The decrease in gross profit from services revenues primarily reflects lower SDM revenues with no correlated reduction in fixed expenses.

4

Operating Expenses

The amount of each type of operating expense for the three months ended June 30, 2017 and 2016, as well as the percentage change reflected thereby, and total operating expenses as a percentage of our total revenues in each period, were as follows:

	Three Months Ended June 30,
	2017		2016			% Change
	U.S. $ in thousands
Research and development, net	$	23,251	$	24,366		-4.6	%
Selling, general and administrative		64,569		72,884		-11.4	%
Change in fair value of obligations in connection with acquisitions		617		(587	)	-205.1	%
	$	88,437	$	96,663		-8.5	%
Percentage of revenues		52.0%		56.2%

Research and development expenses, net decreased by $1.1 million, or 4.6%, to $23.3 million for the three months ended June 30, 2017, compared to $24.4 million for the three months ended June 30, 2016. The amount of research and development expenses constituted 13.7% of our revenues for the three months ended June 30, 2017, as compared to 14.2% for the three months ended June 30, 2016.

Our research and development expenses consist primarily of employee compensation and employee-related personnel expenses, materials, laboratory supplies, costs for related software and costs for facilities. Based on our analysis of our key vertical markets, we maintain our intention to continue to invest in research and development in order to accelerate innovation and to introduce a broad range of hardware, materials and software solutions in order to sustain our leadership position in the 3D printing ecosystem. In addition, we continue with our portfolio transformation to enable prioritization and realignment of our projects that further focus our resources and designed for our customers’ use cases and their specific applicative needs.

Selling, general and administrative expenses decreased by $8.3 million, or 11.4%, to $64.6 million for the three months ended June 30, 2017, as compared to $72.9 million for the three months ended June 30, 2016. The amount of selling, general and administrative expenses constituted 38.0% of our revenues for the three months ended June 30, 2017, as compared to 42.4% for the three months ended June 30, 2016.

The decrease in our selling, general and administrative expenses was primarily driven by reductions in payroll related expense and facilities related expense, which reflect the effective implementation of our costs reduction initiatives, which reduced certain of our variable and fixed expenses.

Changes in fair value of obligations in connection with acquisitions resulted in a loss of $0.6 million and a gain of $0.6 million for the three months ended June 30, 2017, and 2016, respectively. The changes in fair value of obligations in connection with acquisitions were due to revaluation of the deferred consideration as part of the Solid Concepts transaction. For further information, see note 6 to our unaudited condensed consolidated financial statements attached as Exhibit 99.1 to the Form 6-K.

5

Operating Loss

Operating loss and operating loss as a percentage of our total revenues for the three months ended June 30, 2017 and 2016, were as follows:

	Three Months Ended June 30,
	2017			2016
	U.S. $ in thousands
Operating loss	$	(5,045	)	$	(17,131	)
Percentage of revenues		-3.0	%		-10.0	%

Operating loss amounted to $5.0 million for the three months ended June 30, 2017 compared to an operating loss of $17.1 million for the three months ended June 30, 2016. The decrease in operating loss was primarily attributable to lower operating expenses for the three months ended June 30, 2017, as discussed above.

Financial income, net

Financial income, net, which was primarily comprised of effects of foreign currencies foreign currencies, interest income and interest expense, amounted to $0.4 million and $0.9 million for the three months ended June 30, 2017 and 2016, respectively.

Income Taxes

Income taxes and income taxes as a percentage of net loss before taxes for the three months ended June 30, 2017 and 2016, as well as the percentage change reflected thereby, were as follows:

	Three Months Ended
	June 30,
	2017			2016
	U.S. $ in thousands						Change in %
Income tax expense	$	1,308		$	2,454		-46.7	%
As a percent of loss before income taxes		-28.3	%		-15.1	%	87.0	%

We had a negative effective tax rate of 28.3% for the three-month periods ended June 30, 2017 compared to a negative effective tax rate of 15.1% for the three-month periods ended June 30, 2016. Our effective tax rate was primarily impacted by different geographic mix of earnings and losses driven by no tax benefit being recorded for its U.S. subsidiaries tax losses for the three-month periods ended June 30, 2017 and 2016.

6

Net Loss Attributable to Stratasys Ltd. and Net Loss Per Share

Net loss attributable to Stratasys Ltd. and diluted net loss per share, for the three months ended June 30, 2017 and 2016, were as follows:

	Three Months Ended June 30,
	2017			2016
	U.S. $ in thousands
Net loss attributable to Stratasys Ltd.	$	(5,987	)	$	(18,490	)
Percentage of revenues		-3.5	%		-10.7	%
Diluted net loss per share	$	(0.11	)	$	(0.36	)

Net loss attributable to Stratasys Ltd. was $6.0 million for the three months ended June 30, 2017 compared to net loss of $18.5 million for the three months ended June 30, 2016. The decrease of the net loss attributable to Stratasys Ltd. was primarily attributable to lower operating expenses, partially offset by lower revenues.

Diluted net loss per share was $0.11 and $0.36 for the three months ended June 30, 2017 and 2016, respectively. The weighted average fully diluted share count was 52.8 million for the three months ended June 30, 2017, compared to 52.5 million for the three months ended June 30, 2016.

Results of Operations

Comparison of Six Months Ended June 30, 2017 to Six Months Ended June 30, 2016

The following table sets forth certain statement of operations data for the periods indicated:

	Six Months Ended June 30,
	2017					2016
	U.S. $ in			% of		U.S. $ in			% of
	thousands			Revenues		thousands			Revenues
Revenues	$	333,152		100.0	%	$	339,979		100.0	%
Cost of revenues		172,880		51.9	%		179,278		52.7	%
Gross profit		160,272		48.1	%		160,701		47.3	%
Research and development, net		47,885		14.4	%		49,481		14.6	%
Selling, general and administrative		128,748		38.6	%		149,271		43.9	%
Change in fair value of obligations in connection with acquisitions		1,313		0.4	%		140		0.0	%
Operating loss		(17,674	)	-5.3	%		(38,191	)	-11.2	%
Financial income, net		685		0.2	%		1,112		0.3	%
Loss before income taxes		(16,989	)	-5.1	%		(37,079	)	-10.9	%
Income tax expenses		2,634		0.8	%		4,745		1.4	%
Share in loss of associated company		(517	)	-0.2	%		-		0.0	%
Net loss attributable to non-controlling interests		(296	)	-0.1	%		(193	)	-0.1	%
Net loss attributable to Stratasys Ltd.		(19,844	)	-6.0	%		(41,631	)	-12.2	%

7

Discussion of Results of Operations

Revenues

Our products and services revenues for the six months ended June 30, 2017 and 2016, as well as the percentage change reflected thereby, were as follows:

	Six Months Ended June 30,
	2017		2016		% Change
	U.S. $ in thousands
Products	$	236,108	$	242,392	-2.6	%
Services		97,044		97,587	-0.6	%
	$	333,152	$	339,979	-2.0	%

Products Revenues

Revenues derived from products (including AM systems and consumable materials) decreased by $6.3 million, or 2.6% for the six months ended June 30, 2017, as compared to the six months ended June 30, 2016. The decrease in products revenues was driven by a decrease in our systems revenues and was partially offset by an increase in our consumables revenues.

The decrease in systems revenues of 8.2% was driven primarily by shift in our product mix, with low-end systems constituting a higher portion of our systems sold, which reflects a strong demand for our low cost, high value F123 offering during the six months ended June 30, 2017, as compared to the successful launch of our high end J750 multi-material system during the six months ended June 30, 2016.

Consumables revenues for the six months ended June 30, 2017 increased by 4.4% as compared to the six months ended June 30, 2016. The increase was driven primarily by the favorable effect of our growing installed base of systems as well as favorable trends around the utilization of our systems.

Services Revenues

Services revenues (including SDM, maintenance contracts, spare parts and other services) slightly decreased by $0.5 million for the six months ended June 30, 2017, or 0.6%, as compared to the six months ended June 30, 2016. The decrease in services revenues was primarily attributable to a decrease in SDM revenues, partially offset by an increase in maintenance contracts, reflecting our growing installed base of systems.

8

Revenues by Region

Revenues and the percentage of revenues by region for the six months ended June 30, 2017 and 2016, as well as the percentage change in revenues in each such region reflected thereby, were as follows:

	Six Months Ended June 30,
	2017				2016				% Change
	U.S.$ in		% of		U.S.$ in		% of
	thousands		Revenues		thousands		Revenues
North America	$	205,572	61.7	%	$	199,963	58.8	%	2.8	%
EMEA		70,765	21.2	%		70,852	20.8	%	-0.1	%
Asia Pacific		52,499	15.8	%		63,683	18.7	%	-17.6	%
Other		4,316	1.3	%		5,481	1.7	%	-21.3	%
	$	333,152	100.0	%	$	339,979	100.0	%	-2.0	%

Revenues in the North America region increased by $5.6 million, or 2.8%, to $205.6 million for the six months ended June 30, 2017, compared to $200.0 million for the six months ended June 30, 2016. The increase was primarily driven by higher products revenues, partially offset by lower services revenues due to lower SDM revenues.

Revenues in the EMEA region decreased by $0.1 million, or 0.1%, to $70.8 million for the six months ended June 30, 2017, compared to $70.9 million for the six months ended June 30, 2016. The slight decrease was primarily due to lower systems revenues, partially offset by higher consumables and services revenues. Revenues in the EMEA region for the six months ended June 30, 2017 increased by approximately 3.7% as compared to the six months ended June 30, 2016, on a constant currency basis when using the prior period’s exchange rates.

Revenues in the Asia Pacific region decreased by $11.2 million, or 17.6%, to $52.5 million for the six months ended June 30, 2017, compared to $63.7 million for the six months ended June 30, 2016. The decrease was primarily due to lower products revenues, partially offset by higher services revenues.

Gross Profit

Gross profit for our products and services for the six months ended June 30, 2017 and 2016, as well as the percentage change reflected thereby, were as follows:

	Six Months Ended June 30,
	2017		2016
	U.S. $ in thousands				Change in %
Gross profit attributable to:
Products	$	126,905	$	124,041	2.3	%
Services		33,367		36,660	-9.0	%
	$	160,272	$	160,701	-0.3	%

9

Gross profit as a percentage of revenues for our products and services for the six months ended June 30, 2017 and 2016, were as follows:

	Six Months Ended June 30,
	2017		2016
Gross profit as a percentage of revenues from:
Products	53.7	%	51.2	%
Services	34.4	%	37.6	%
	48.1	%	47.3	%

Gross profit attributable to products revenues increased by $2.9 million, or 2.3%, to $126.9 million for the six months ended June 30, 2017, compared to gross profit of $124.0 million for the six months ended June 30, 2016. Gross profit attributable to products revenues as a percentage of products revenues increased to 53.7% for the six months ended June 30, 2017, compared to gross profit of 51.2% for the six months ended June 30, 2016.

The increase in gross profit attributable to products revenues was primarily driven by lower amortization and impairment expense of $11.3 million, as well as lower reorganization related costs of $3.1 million, partially offset by a shift in sales mix.

Gross profit attributable to services revenues decreased by $3.3 million, or 9.0%, to $33.4 million for the six months ended June 30, 2017, compared to $36.7 million for the six months ended June 30, 2016. Gross profit attributable to services revenues as a percentage of services revenues in the six months ended June 30, 2017 decreased to 34.4%, as compared to 37.6% for the six months ended June 30, 2017. The decrease in gross profit from services revenues primarily reflects lower SDM revenues with no correlated reduction in fixed expenses.

Operating Expenses

The amount of each type of operating expense for the six months ended June 30, 2017 and 2016, as well as the percentage change reflected thereby, and total operating expenses as a percentage of our total revenues in each such period, were as follows:

	Six Months Ended June 30,
	2017			2016			% Change
	U.S. $ in thousands
Research and development, net	$	47,885		$	49,481		-3.2	%
Selling, general and administrative		128,748			149,271		-13.7	%
Change in fair value of obligations in connection with acquisitions		1,313			140		837.9	%
	$	177,946		$	198,892		-10.5	%
Percentage of revenues		53.4	%		58.5	%

Research and development expenses, net decreased by $1.6 million, or 3.2%, to $47.9 million for the six months ended June 30, 2017, compared to $49.5 million for the six months ended June 30, 2016. The amount of research and development expenses constituted 14.4% of our revenues for the six months ended June 30, 2017, as compared to 14.6% for the six months ended June 30, 2016.

Selling, general and administrative expenses decreased by $20.5 million, or 13.7%, to $128.7 million for the six months ended June 30, 2017, as compared to $149.3 million for the six months ended June 30, 2016. The amount of selling, general and administrative expenses constituted 38.6% of our revenues for the six months ended June 30, 2017, as compared to 43.9% for the six months ended June 30, 2016.

10

The decrease in our selling, general and administrative expenses was primarily driven by reductions in payroll related expense and facilities related expense, which reflect the effective implementation of our costs reduction initiatives, which reduced certain of our variable and fixed expenses.

Changes in fair value of obligations in connection with acquisitions resulted in a losses of $1.3 million and $0.1 million for of the six months ended June 30, 2017, and 2016, respectively. The changes in fair value of obligations in connection with acquisitions were due to revaluation of the deferred consideration as part of the Solid Concepts transaction. For further information, see note 6 to our unaudited condensed consolidated financial statements attached as Exhibit 99.1 to the Form 6-K.

Operating Loss

Operating loss and operating loss as a percentage of our total revenues for the six months ended June 30, 2017 and 2016, were as follows:

	Six Months Ended June 30,
	2017			2016
	U.S. $ in thousands
Operating loss	$	(17,674	)	$	(38,191	)
Percentage of revenues		-5.3	%		-11.2	%

Operating loss amounted to $17.7 million for the six months ended June 30, 2017 compared to an operating loss of $38.2 million for the six months ended June 30, 2016. The decrease in operating loss was primarily attributable to lower operating expense for the six months ended June 30, 2017, as discussed above.

Financial income, net

Financial income, net, which was primarily comprised of effects of foreign currencies, interest income and interest expense, amounted to $0.7 million and $1.1 million for the six months ended June 30, 2017 and 2016, respectively.

Income Taxes

Income taxes and income taxes as a percentage of net loss before taxes for the six months ended June 30, 2017 and 2016, as well as the percentage change reflected thereby, were as follows:

	Six Months Ended
	June 30,
	2017			2016
	U.S. $ in thousands						Change in %
Income tax expense	$	2,634		$	4,745		-44.5	%
As a percent of loss before income taxes		-15.5	%		-12.8	%	21.2	%

We had a negative effective tax rate of 15.5% for the three-month periods ended June 30, 2017 compared to a negative effective tax rate of 12.8% for the three-month periods ended June 30, 2016. Our effective tax rate was primarily impacted by different geographic mix of earnings and losses driven by no tax benefit being recorded for its U.S. subsidiaries tax losses for the six-month periods ended June 30, 2017 and 2016.

11

Net Loss Attributable to Stratasys Ltd. and Net Loss Per Share

Net loss attributable to Stratasys Ltd. and diluted net loss per share, for the six months ended June 30, 2017 and 2016, were as follows:

	Six Months Ended June 30,
	2017			2016
	U.S. $ in thousands
Net loss attributable to Stratasys Ltd.	$	(19,844	)	$	(41,631	)
Percentage of revenues		-6.0	%		-12.2	%
Diluted net loss per share	$	(0.38	)	$	(0.80	)

Net loss attributable to Stratasys Ltd. was $19.8 million for the six months ended June 30, 2017 compared to net loss of $41.6 million for the six months ended June 30, 2016. The decrease of the net loss attributable to Stratasys Ltd. was primarily attributable to lower operating expenses, partially offset by lower revenues.

Diluted net loss per share was $0.38 and $0.8 for the six months ended June 30, 2017 and 2016, respectively. The weighted average fully diluted share count was 52.7 million for the six months ended June 30, 2017, compared to 52.1 million for the six months ended June 30, 2016.

Supplemental Operating Results on a Non-GAAP Basis

The following non-GAAP data, which excludes certain items as described below, are non-GAAP financial measures. Our management believes that these non-GAAP financial measures are useful information for investors and shareholders of our company in gauging our results of operations (x) on an ongoing basis after excluding merger and acquisition related expense and reorganization-related charges, and (y) excluding non-cash items such as stock-based compensation expenses, acquired intangible assets amortization, impairment of goodwill and other long-lived assets, changes in fair value of obligations in connection with acquisitions and the corresponding tax effect of those items. We also exclude, when applicable, non-recurring changes of non-cash valuation allowance on deferred tax assets, as well as non-recurring significant tax charges or benefits that relate to prior periods which we do not believe are reflective of ongoing business and operating results. These non-GAAP adjustments either do not reflect actual cash outlays that impact our liquidity and our financial condition or have a non-recurring impact on the statement of operations, as assessed by management. These non-GAAP financial measures are presented to permit investors to more fully understand how management assesses our performance for internal planning and forecasting purposes. The limitations of using these non-GAAP financial measures as performance measures are that they provide a view of our results of operations without including all items indicated above during a period, which may not provide a comparable view of our performance to other companies in our industry. Investors and other readers should consider non-GAAP measures only as supplements to, not as substitutes for or as superior measures to, the measures of financial performance prepared in accordance with GAAP. Reconciliation between results on a GAAP and non-GAAP basis is provided in a table below.

12

Reconciliation of GAAP to Non-GAAP Results of Operations

The following tables present the GAAP measures, the corresponding non-GAAP amounts and related non- GAAP adjustments for the applicable periods:

		Three Months Ended June 30,
		2017			Non-GAAP			2017		2016			Non-GAAP			2016
		GAAP			Adjustments			Non-GAAP		GAAP			Adjustments			Non-GAAP
		U.S. dollars and shares in thousands (except per share amounts)
	Gross profit (1)	$	83,392		$	6,784		$	90,176	$	79,532		$	16,715		$	96,247
	Operating income (loss) (1,2)		(5,045	)		16,117			11,072		(17,131	)		27,332			10,201
	Net income (loss) attributable to Stratasys Ltd. (1,2,3)		(5,987	)		15,165			9,178		(18,490	)		24,728			6,238
	Net income (loss) per diluted share attributable to Stratasys Ltd. (4)	$	(0.11	)	$	0.28		$	0.17	$	(0.36	)	$	0.48		$	0.12
(1)	Acquired intangible assets amortization expense					5,688								10,510
	Impairment charges of other intangible assets					-								1,779
	Non-cash stock-based compensation expense					799								729
	Reorganization and other related costs					137								3,543
	Merger and acquisition and other expense					160								154
						6,784								16,715
(2)	Acquired intangible assets amortization expense					2,588								3,621
	Non-cash stock-based compensation expense					4,532								4,750
	Change in fair value of obligations in connection with acquisitions					617								(587	)
	Reorganization and other related costs					598								956
	Merger and acquisition and other expense					998								1,877
						9,333								10,617
						16,117								27,332
(3)	Corresponding tax effect					(1,150	)							(2,604	)
	Amortization expense of associated company					198								-
					$	15,165							$	24,728
(4)	Weighted average number of ordinary shares outstanding- Diluted		52,778						53,473		52,496						53,238

13

		Six Months Ended June 30,
		2017			Non-GAAP			2017		2016			Non-GAAP			2016
		GAAP			Adjustments			Non-GAAP		GAAP			Adjustments			Non-GAAP
		U.S. dollars and shares in thousands (except per share amounts)
	Gross profit (1)	$	160,272		$	13,398		$	173,670	$	160,701		$	27,993		$	188,694
	Operating income (loss) (1,2)		(17,674	)		32,775			15,101		(38,191	)		52,345			14,154
	Net income (loss) attributable to Stratasys Ltd. (1,2,3)		(19,844	)		31,430			11,586		(41,631	)		48,465			6,834
	Net income (loss) per diluted share attributable to Stratasys Ltd. (4)	$	(0.38	)	$	0.60		$	0.22	$	(0.80	)	$	0.93		$	0.13
(1)	Acquired intangible assets amortization expense					11,393								20,924
	Impairment charges of other intangible assets					-								1,779
	Non-cash stock-based compensation expense					1,442								1,452
	Reorganization and other related costs					231								3,321
	Merger and acquisition and other expense					332								517
						13,398								27,993
(2)	Acquired intangible assets amortization expense					5,132								7,382
	Non-cash stock-based compensation expense					7,793								9,650
	Change in fair value of obligations in connection with acquisitions					1,313								140
	Reorganization and other related costs					2,284								1,461
	Merger and acquisition and other expense					2,855								5,719
						19,377								24,352
						32,775								52,345
(3)	Corresponding tax effect					(1,735	)							(3,880	)
	Amortization expense of associated company					390								-
					$	31,430							$	48,465
(4)	Weighted average number of ordinary shares outstanding- Diluted		52,733						53,406		52,133						53,201

14

Liquidity and Capital Resources

A summary of our statement of cash flows is as follows:

	Six Months Ended June 30,
	2017			2016
	U.S $ in thousands
Net loss	$	(20,140	)	$	(41,824	)
Depreciation and amortization		32,972			46,792
Impairment of other intangible assets		-			1,779
Deferred income taxes		(1,581	)		(3,327	)
Stock-based compensation		9,235			11,102
Change in fair value of obligations in connection with acquisitions		1,313			140
Foreign currency transactions gain and other items		(5,841	)		(2,791	)
Change in working capital and other items		20,273			26,605
Net cash provided by operating activities		36,231			38,476
Net cash used in investing activities		(14,679	)		(43,772	)
Net cash provided by financing activities		358			711
Effect of exchange rate changes on cash and cash equivalents		3,107			875
Net change in cash and cash equivalents		25,017			(3,710	)
Cash and cash equivalents, beginning of period		280,328			257,592
Cash and cash equivalents, end of period	$	305,345		$	253,882

Our cash and cash equivalents balance increased to $305.3 million at June 30, 2017 from $280.3 million at December 31, 2016. The increase in cash and cash equivalents in the six months ended June 30, 2017 was primarily due to net cash provided by operating activities in an amount of $36.2 million and favorable effect of exchange rate changes on cash and cash equivalents of $3.1 million, partially offset by net cash used in investing activities of $14.7 million.

Our cash and cash equivalents balance decreased to $253.9 million at June 30, 2016 from $257.6 million at December 31, 2015. The decrease in cash and cash equivalents in the six months ended June 30, 2016 was primarily due to net cash used in investing activities in an amount of $43.8 million, partially offset by net cash provided by operating activities of $38.5 million.

Cash flows from operating activities

We generated $36.2 million of cash from operating activities during the six months ended June 30, 2017. Our $20.1 million net loss was adjusted due to non-cash charges such as $33.0 million of depreciation and amortization and $9.2 million of stock-based compensation expense. As we continue to seek operating efficiencies also through an active working capital management, $20.3 million of changes in our working capital balances and other assets and liabilities increased our cash flow provided by operating activities.

We generated $38.5 million of cash from operating activities during the six months ended June 30, 2016. The net loss of $41.8 million was adjusted primarily due to depreciation and amortization of $46.8 million and non-cash stock-based compensation expense of $11.1 million and favorably affected by changes in working capital items of $26.6 million. Changes in working capital items that favorably affected our cash flow provided by operating activities were primarily attributable to decrease in accounts receivable of $11.3 million and an increase of $14.6 million of our other non-current liabilities. The changes in working capital reflect the improvement in our proactive procedures of working capital management.

15

Cash flows from investing activities

We used $14.7 million of cash in our investing activities during the six months ended June 30, 2017. Cash was primarily used to invest $11.3 million to purchase property and equipment and for certain strategic investments in unconsolidated entities.

Our principal property and equipment purchases were for our new buildings complex under construction in Rehovot, Israel. The new facility in Rehovot, Israel, which will contain two buildings, houses our Israeli headquarters, research and development facilities and certain marketing activities. We entered the first building in January 2017. Other equipment purchases were primarily for building improvements in the United States and Israel.

We used cash of $43.8 million in our investing activities during the six months ended June 30, 2016. Cash was primarily used to invest $21.1 million to purchase property and equipment and for certain strategic investments in unconsolidated entities.

Cash flows from financing activities

We generated $0.4 million of cash in our financing activities during the six months ended June 30, 2017. Cash provided by financing activities was mainly attributed to proceeds of $2.2 million from the exercise of stock options. Cash used for financing activities was mainly attributed to the quarterly repayments of our long-term loan in an amount of $1.9 million.

Cash flows from financing activities for the six months ended June 30, 2016 included $0.7 million of cash from the exercise of stock options.

Capital resources and capital expenditures

Our total current assets amounted to $576.4 million as of June 30, 2017, of which $305.3 million consisted of cash and cash equivalents. Total current liabilities amounted to $173.9 million. Most of our cash and cash equivalents are held in banks in Israel, Switzerland and the U.S.

The credit risk related to our accounts receivable is limited due to the relatively large number of customers and their wide geographic distribution. In addition, we seek to reduce the credit exposures of our accounts receivable by credit limits, ongoing credit evaluation and account monitoring procedures.

We believe that we will have adequate cash and cash equivalents to fund our ongoing operations and that these sources of liquidity will be sufficient to satisfy our capital expenditure and debt requirements for the next twelve months.

Long-Term Bank Loan and Credit Line

Under the secured loan agreement that we entered into with Bank Hapoalim Ltd. in December 2016, our company borrowed $26 million initially and secured a credit line for an additional $24 million. The initial proceeds that we borrowed under the loan agreement were used for purposes related to our new office facility in Israel. The initial loan will mature in December 2023 and is payable in equal consecutive quarterly principal installments of principal and accrued interest. The repayment of the initial loan is secured by a first priority lien on all of our company’s rights in the property of our new office facility in Israel. The loan bears interest at the rate of LIBOR plus 3.35%. As of June 30, 2017, we had not utilized the credit line.

We believe that we were in compliance with all covenants under the loan agreement as of June 30, 2017.

As part of our business strategy, we plan to consider and, as appropriate, make acquisitions of other businesses, strategic alliances, property, plant and equipment as well as new technologies and products. Our cash reserves and other liquid assets may be inadequate to consummate such acquisitions and it may be necessary for us to issue shares or raise substantial additional funds in the future to complete future transactions.

16

Critical Accounting Policies

We have prepared our consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America. This has required us to make estimates, judgments, and assumptions that affected the amounts we reported. Actual results may differ from those estimates. To facilitate the understanding of our business activities, certain accounting policies that are important to the presentation of our financial condition and results of operations and that require management’s subjective judgments are described in our 2016 Annual Report. We base our judgments on our experience and various assumptions that we believe to be reasonable under the circumstances.

Forward-Looking Statements and Factors That May Affect Future Results of Operations

Certain information included in or incorporated by reference into the Report of Foreign Private Issuer on Form 6-K to which this Operating and Financial Review is appended, or the Form 6-K, may be deemed to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. You can generally identify forward-looking statements as statements containing the words “may,” “will,” “could,” “should,” “expect,” “anticipate,” “intend,” “estimate,” “believe,” “project,” “plan,” “assume” or other similar expressions, or negatives of those expressions, although not all forward-looking statements contain these identifying words.

These forward-looking statements may include, but are not limited to, statements regarding our future strategy, future operations, projected financial position, proposed products, estimated future revenues, projected costs, future prospects, the future of our industry and results that might be obtained by pursuing management’s current plans and objectives.

You should not place undue reliance on our forward-looking statements because the matters they describe are subject to certain risks, uncertainties and assumptions that are difficult to predict. Our forward-looking statements are based on the information currently available to us and speak only as of the date of this Form 6-K. Over time, our actual results, performance or achievements may differ from those expressed or implied by our forward-looking statements, and such difference might be significant and materially adverse to our shareholders. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Important factors that could cause actual results, developments and business decisions to differ materially from those anticipated in these forward-looking statements include, among other things:

● the extent of our success at introducing new or improved products and solutions that gain market share;
 

● the extent of growth of the 3D printing market generally;
 

● impairments of goodwill or other intangible assets in respect of companies that we acquire;
 

● changes in our overall strategy, such as related to our cost reduction and reorganization activities and our capital expenditures;
 

● the extent of our success at efficiently and successfully integrating the operations of various companies that we have acquired or may acquire;
 

● the impact of shifts in prices or margins of the products that we sell or services we provide;
 

● the impact of competition and new technologies;
 

● global market, political and economic conditions, and in the countries in which we operate in particular;
 

● government regulations and approvals;
 

● litigation and regulatory proceedings;
 

● infringement of our intellectual property rights by others (including for replication and sale of consumables for use in our systems), or infringement of others’ intellectual property rights by us;
 

● the extent of our success at maintaining our liquidity and financing our operations and capital needs;
 

● impact of tax regulations on our results of operations and financial condition; and
 

● those factors referred to in Item 3.D, “Key Information - Risk Factors”, Item 4, “Information on the Company”, and Item 5, “Operating and Financial Review and Prospects” in our 2016 Annual Report, as well as in the 2016 Annual Report generally.

17

Readers are urged to carefully review and consider the various disclosures made throughout the Form 6-K, our 2016 Annual Report, and in our other reports filed with or furnished to the SEC, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Reference is made to Item 11, “Quantitative and Qualitative Disclosures about Market Risk” in our 2016 Annual Report.

LEGAL PROCEEDINGS

We are subject to various litigation and other legal proceedings. For a discussion of certain of these matters that we deem to be material to our company, see Note 9-“Contingencies” in the notes to our unaudited condensed consolidated financial statements attached as Exhibit 99.1 to the Form 6-K.

18

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Document and Entity Information	6 Months Ended
	Jun. 30, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	STRATASYS LTD.
Entity Central Index Key	0001517396
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Trading Symbol	SSYS
Document Type	6-K
Amendment Flag	false
Document Period End Date	Jun. 30, 2017
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2017

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 305,345	$ 280,328
Accounts receivable, net	120,342	120,411
Inventories	116,486	117,521
Net investment in sales-type leases	9,921	11,717
Prepaid expenses	6,701	7,571
Other current assets	17,557	15,491
Total current assets	576,352	553,039
Non-current assets
Net investment in sales-type leases - long-term	7,406	12,126
Property, plant and equipment, net	207,689	208,415
Goodwill	386,513	385,629
Other intangible assets, net	160,926	177,458
Other non-current assets	32,335	29,382
Total non-current assets	794,869	813,010
Total assets	1,371,221	1,366,049
Current liabilities
Accounts payable	46,087	40,933
Current portion of long-term debt	3,714	3,714
Accrued expenses and other current liabilities	28,910	32,207
Accrued compensation and related benefits	39,744	34,186
Obligations in connection with acquisitions	4,932	3,619
Deferred revenues	50,464	49,952
Total current liabilities	173,851	164,611
Non-current liabilities
Long-term debt	20,429	22,286
Deferred tax liabilities	4,197	5,952
Deferred revenues - long-term	14,087	12,922
Other non-current liabilities	25,984	22,251
Total non-current liabilities	64,697	63,411
Total liabilities	238,548	228,022
Contingencies (see note 9)
Redeemable non-controlling interests	1,811	2,029
Equity
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands shares; 52,854 thousands shares and 52,639 thousands shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively	142	142
Additional paid-in capital	2,644,579	2,633,129
Accumulated other comprehensive loss	(10,143)	(13,479)
Accumulated deficit	(1,503,769)	(1,483,925)
Equity attributable to Stratasys Ltd.	1,130,809	1,135,867
Non-controlling interests	53	131
Total equity	1,130,862	1,135,998
Total liabilities and equity	$ 1,371,221	$ 1,366,049

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Consolidated Balance Sheets (Parenthetical) - ₪ / shares shares in Thousands	Jun. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Common stock, par value (in NIS per share)	₪ 0.01	₪ 0.01
Common stock, shares authorized	180,000	180,000
Common stock, shares issued	52,854	52,639
Common stock, shares outstanding	52,854	52,639

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Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Net sales
Products	$ 121,021	$ 123,758	$ 236,108	$ 242,392
Services	48,969	48,315	97,044	97,587
Total net sales	169,990	172,073	333,152	339,979
Cost of sales
Products	54,723	61,413	109,203	118,351
Services	31,875	31,128	63,677	60,927
Total cost of sales	86,598	92,541	172,880	179,278
Gross profit	83,392	79,532	160,272	160,701
Operating expenses
Research and development, net	23,251	24,366	47,885	49,481
Selling, general and administrative	64,569	72,884	128,748	149,271
Change in fair value of obligations in connection with acquisitions	617	(587)	1,313	140
Total operating expenses	88,437	96,663	177,946	198,892
Operating loss	(5,045)	(17,131)	(17,674)	(38,191)
Financial income, net	429	932	685	1,112
Loss before income taxes	(4,616)	(16,199)	(16,989)	(37,079)
Income tax expenses	1,308	2,454	2,634	4,745
Share in loss of associated company	(229)		(517)
Net loss	(6,153)	(18,653)	(20,140)	(41,824)
Net loss attributable to non-controlling interest	(166)	(163)	(296)	(193)
Net loss attributable to Stratasys Ltd.	$ (5,987)	$ (18,490)	$ (19,844)	$ (41,631)
Net loss per ordinary share attributable to Stratasys Ltd.
Basic	$ (0.11)	$ (0.35)	$ (0.38)	$ (0.80)
Diluted	$ (0.11)	$ (0.36)	$ (0.38)	$ (0.80)
Weighted average ordinary shares outstanding
Basic	52,778	52,169	52,733	52,133
Diluted	52,778	52,496	52,733	52,133
Comprehensive loss
Net loss	$ (6,153)	$ (18,653)	$ (20,140)	$ (41,824)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	2,437	(2,962)	3,150	380
Unrealized gains on derivatives designated as cash flow hedges	(337)	(539)	186	391
Other comprehensive income (loss), net of tax	2,100	(3,501)	3,336	771
Comprehensive loss	(4,053)	(22,154)	(16,804)	(41,053)
Less: comprehensive loss attributable to non-controlling interests	(166)	(163)	(296)	(193)
Comprehensive loss attributable to Stratasys Ltd.	$ (3,887)	$ (21,991)	$ (16,508)	$ (40,860)

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities
Net loss	$ (20,140)	$ (41,824)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	32,972	46,792
Stock-based compensation	9,235	11,102
Foreign currency transaction gain	(7,350)	(3,427)
Deferred income taxes	(1,581)	(3,327)
Change in fair value of obligations in connection with acquisitions	1,313	140
Impairment of other intangibles assets		1,779
Other items	1,509	636
Change in cash attributable to changes in operating assets and liabilities:
Accounts receivable, net	2,524	11,294
Inventories	626	(3,024)
Net investment in sales-type leases	6,516	487
Other current assets and prepaid expenses	1,287	880
Other non-current assets	264	511
Accounts payable	5,066	2,112
Other current liabilities	(423)	(2,295)
Deferred revenues	604	2,084
Other non-current liabilities	3,809	14,556
Net cash provided by operating activities	36,231	38,476
Cash flows from investing activities
Purchase of property and equipment	(11,291)	(21,079)
Investment in unconsolidated entities	(2,548)	(23,064)
Purchase of intangible assets	(677)	(771)
Proceeds from maturities of short-term bank deposits		68,361
Investment in short-term bank deposits		(67,077)
Other investing activities	(163)	(142)
Net cash used in investing activities	(14,679)	(43,772)
Cash flows from financing activities
Repayment of current portion of long-term debt	(1,857)
Proceeds from exercise of stock options	2,215	711
Net cash provided by financing activities	358	711
Effect of exchange rate changes on cash and cash equivalents	3,107	875
Net change in cash and cash equivalents	25,017	(3,710)
Cash and cash equivalents, beginning of period	280,328	257,592
Cash and cash equivalents, end of period	305,345	253,882
Supplemental disclosures of cash flow information:
Transfer of fixed assets to inventory	630	583
Transfer of inventory to fixed assets	$ 3,354	$ 2,464

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Basis of Presentation and Consolidation

6 Months Ended

Jun. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Consolidation

Note 1. Basis of Presentation and Consolidation

Stratasys Ltd. (collectively with its subsidiaries, the “Company”) is a 3D solutions company, offering additive manufacturing (“AM”) solutions for the creation of parts used in the processes of designing and manufacturing products and for the direct manufacture of end parts across a broad range of vertical markets. The Company’s solutions include products ranging from entry-level desktop 3D printers to systems for rapid prototyping (“RP”) and large production systems for direct digital manufacturing (“DDM”). The Company also develops, manufactures and sells materials for use with its systems and provides related service offerings. The Company also provides a variety of custom manufacturing solutions through its direct manufacturing printed parts service as well as 3D printing related professional services offerings.

The condensed consolidated interim financial statements include the accounts of Stratasys Ltd. and its subsidiaries. All intercompany accounts and transactions, including profits from intercompany sales not yet realized outside the Company, have been eliminated in consolidation.

The consolidated interim financial information herein is unaudited; however, such information reflects all adjustments (consisting of normal, recurring adjustments), which are, in the opinion of management, necessary for a fair statement of results for the interim period. The results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of the results to be expected for the full year. Certain financial information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. The reader is referred to the audited consolidated financial statements and notes thereto for the year ended December 31, 2016, filed with the U.S. Securities and Exchange Commission (the “SEC”) as part of the Company’s Annual Report on Form 20-F for such year on March 9, 2017.

Recently issued and adopted accounting pronouncements

In March 2016, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) which simplifies certain aspects of the accounting for share-based payments, including, among other items, accounting for income taxes and allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur, rather than to account for them based on an estimate of expected forfeitures. This ASU became effective for the Company on January 1, 2017. Upon the adoption of this ASU, the Company recorded a cumulative-effect adjustment to its net operating losses of approximately $5 million as of January 1, 2017 offset with an increase to its valuation allowance with respect to previously unrecognized excess tax benefits. Under the new ASU, excess tax benefits or deficiencies related to stock option exercises and restricted stock unit vesting are recognized in the statement of operations. The adoption of this ASU does not have a material impact on the Company’s results of operations as excess tax benefits generated from the vesting of share-based awards will be recognized in the consolidated statements of operations, but offset with consideration of the valuation allowance in the Company’s US operations. In addition, upon the adoption of this ASU, the Company has elected as an accounting policy to record forfeitures as they occur, using a modified retrospective transition method. The total cumulative-effect adjustment to retained earnings as of January 1, 2017 was immaterial. Prior periods have not been restated.

In January 2017, the FASB issued an ASU which eliminates the requirement to determine the implied fair value of the reporting unit’s goodwill by measuring the reporting unit’s assets and liabilities at fair value in a hypothetical analysis as if the reporting unit was acquired in a business combination, as part of the second step of goodwill impairment testing. Under the new guidance, goodwill impairment testing will be performed by comparing the fair value of the reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The new ASU is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and should be applied on a prospective basis. Early adoption is permitted for annual or interim goodwill impairment testing performed after January 1, 2017. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements.

In November 2016, the FASB issued an ASU which requires entities to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The ASU is effective for annual reporting periods (including interim periods within those annual reporting periods) beginning after December 15, 2017. Early adoption is permitted and should be adopted retrospectively. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated statements of cash flows.

In October 2016, the FASB issued an ASU which eliminates the exception for an intra-entity transfer of an asset other than inventory. This ASU requires that the income tax consequences of an intra-entity asset transfer other than inventory are recognized at the time of the transfer, rather than when the transferred asset is sold to a third party or otherwise recovered through use. The ASU is effective for annual reporting periods (including interim periods within those annual reporting periods) beginning after December 15, 2017. Early adoption is permitted as of the beginning of an annual reporting period (as of the first interim period if an entity issues interim financial statements). The new guidance requires adoption on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements.

In February 2016, the FASB issued a new ASU which revises lease accounting guidance. Under the new guidance, lessees will be required to recognize a right-of-use asset and a lease liability for all leases, other than leases that meet the definition of a short-term lease. The liability and the right-of-use asset arising from the lease will be measured as the present value of the lease payments. The new standard is effective for fiscal year beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition approach. The Company is currently evaluating the impact of the adoption of the new lease accounting guidance on its consolidated financial statements.

In May 2014, the FASB issued guidance on revenue from contracts with customers that will supersede the current revenue recognition guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle of the new revenue recognition standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new revenue recognition standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted for annual reporting periods beginning after December 15, 2016. This standard may be applied retrospectively to each prior period presented (“full retrospective approach”) or retrospectively with the cumulative effect recognized as of the date of adoption (“modified retrospective approach”). The Company has developed a project plan to analyze the potential impact this guidance will have on its consolidated financial statements and related disclosures as well as its business processes, systems and controls. This includes reviewing revenue contracts across all revenue streams and evaluates potential differences that would result from applying the requirements under the new guidance. Based on the analysis conducted to date, the Company expects to adopt this standard using the modified retrospective approach and is still currently evaluating all the potential impacts of the adoption of this standard. Therefore, the Company cannot reasonably estimate quantitative information related to the impact of this standard on its consolidated financial statements at this time.

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Inventories

6 Months Ended

Jun. 30, 2017

Inventory Disclosure [Abstract]

Inventories

Note 2. Inventories

Inventories, net consisted of the following:

	June 30,		December 31,
	2017		2016
	U.S. $ in thousands
Finished goods	$	64,077	$	62,728
Work-in-process		2,021		2,389
Raw materials		50,388		52,404
	$	116,486	$	117,521

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Note 3. Goodwill and Other Intangible Assets

Goodwill

Changes in the carrying amount of the Company’s goodwill for the six months ended June 30, 2017 were as follows:

	U.S. $ in millions
Goodwill as of January 1, 2017	$	385.6
Translation differences		0.9
Goodwill as of June 30, 2017	$	386.5

Other Intangible Assets

Other intangible assets consisted of the following:

	June 30, 2017							December 31, 2016
	Carrying Amount,					Net		Carrying Amount,					Net
	Net of		Accumulated			Book		Net of		Accumulated			Book
	Impairment		Amortization			Value		Impairment		Amortization			Value
	U.S. $ in thousands
Developed technology	$	304,766	$	(209,549	)	$	95,217	$	304,766	$	(198,632	)	$	106,134
Patents		19,692		(13,268	)		6,424		19,009		(12,257	)		6,752
Trademarks and trade names		27,808		(17,526	)		10,282		27,819		(16,849	)		10,970
Customer relationships		106,880		(58,816	)		48,064		106,571		(54,258	)		52,313
Capitalized software development costs		19,541		(18,602	)		939		19,540		(18,251	)		1,289
	$	478,687	$	(317,761	)	$	160,926	$	477,705	$	(300,247	)	$	177,458

Amortization expense relating to intangible assets for the three-month periods ended June 30, 2017 and 2016 was approximately $8.7 million and $14.5 million, respectively. Amortization expense relating to intangible assets for the six-month periods ended June 30, 2017 and 2016 was approximately $17.4 million and $29.2 million, respectively. The decrease in amortization expense was primarily due to change in the estimated useful lives of certain intangibles assets.

As of June 30, 2017, estimated amortization expense relating to intangible assets currently subject to amortization for each of the following periods was as follows:

	Estimated
	amortization expense
	(U.S. $ in thousands)
Remaining 6 months of 2017	$	17,323
2018		33,214
2019		32,307
2020		31,967
2021		31,387
Thereafter		14,728
Total	$	160,926

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Loss Per Share

6 Months Ended

Jun. 30, 2017

Net loss per ordinary share attributable to Stratasys Ltd.

Loss Per Share

Note 4. Loss Per Share

The following table presents the numerator and denominator of the basic and diluted net loss per share computations for the three and six months ended June 30, 2017 and 2016:

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
	In thousands, except per share amounts
Numerator:
Net loss attributable to Stratasys Ltd. for basic loss per share	$	(5,987	)	$	(18,490	)	$	(19,844	)	$	(41,631	)
Adjustment of deferred payments liability revaluation		-			(559	)		-			-
Net loss attributable to Stratasys Ltd. for diluted loss per share		(5,987	)		(19,049	)		(19,844	)		(41,631	)
Denominator:
Weighted average shares – denominator for basic net loss per share		52,778			52,169			52,733			52,133
Add:
Shares settlement presumed for deferred payments liability		-			327			-			-
Denominator for diluted loss per share		52,778			52,496			52,733			52,133
Net loss per share attributable to Stratasys Ltd.
Basic	$	(0.11	)	$	(0.35	)	$	(0.38	)	$	(0.80	)
Diluted	$	(0.11	)	$	(0.36	)	$	(0.38	)	$	(0.80	)

The computation of diluted net loss per share excluded share awards of 4.4 million shares and 3.8 million shares for the three months ended June 30, 2017 and 2016, respectively, and 4.4 million shares and 4.1 million shares for the six months ended June 30, 2017 and 2016, because their inclusion would have had an anti-dilutive effect on the diluted net loss per share.

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Income Taxes

6 Months Ended

Jun. 30, 2017

Income Tax Disclosure [Abstract]

Income Taxes

Note 5. Income Taxes

The Company had a negative effective tax rate of 28.3% for the three-month periods ended June 30, 2017 compared to a negative effective tax rate of 15.1% for the three-month periods ended June 30, 2016, and negative effective tax rate of 15.5% for the six-month periods ended June 30, 2017 compared to a negative effective tax rate of 12.8% for the six-month periods ended June 30, 2016. The Company’s effective tax rate was primarily impacted by different geographic mix of earnings and losses driven by no tax benefit being recorded for its U.S. subsidiaries tax losses for the three-month and six-month periods ended June 30, 2017 and 2016.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 6. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.

Observable inputs are inputs that are developed using market data, such as publicly available information about actual events or transactions, and that reflect the assumptions that market participants would use when pricing the asset or liability. Unobservable inputs are inputs for which market data are not available and that are developed using the best information available about the assumptions that market participants would use when pricing the asset or liability.

The fair value hierarchy is categorized into three Levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2 inputs include inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs). Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Financial instruments measured at fair value

The following tables summarize the Company’s financial assets and liabilities that are carried at fair value on a recurring basis, by fair value hierarchy, in its consolidated balance sheets:

	June 30, 2017
	(U.S. $ in thousands)
	Level 2			Level 3			Total
Assets:
Foreign exchange forward contracts not designated as hedging instruments	$	206		$	-		$	206
Foreign exchange forward contracts designated as hedging instruments		161			-			161
Liabilities:
Foreign exchange forward contracts not designated as hedging instruments		(811	)		-			(811	)
Obligations in connection with acquisitions		-			(3,932	)		(3,932	)
	$	(444	)	$	(3,932	)	$	(4,376	)
	December 31, 2016
	(U.S. $ in thousands)
	Level 2			Level 3			Total
Assets:
Foreign exchange forward contracts not designated as hedging instruments	$	1,440		$	-		$	1,440
Foreign exchange forward contracts designated as hedging instruments		37			-			37
Liabilities:
Foreign exchange forward contracts not designated as hedging instruments		(48	)		-			(48	)
Foreign exchange forward contracts designated as hedging instruments		(61	)		-			(61	)
Obligations in connection with acquisitions		-			(2,619	)		(2,619	)
	$	1,368		$	(2,619	)	$	(1,251	)

The Company’s foreign exchange forward contracts are classified as Level 2, as they are not actively traded and are valued using pricing models that use observable market inputs, including interest rate curves and both forward and spot prices for currencies (Level 2 inputs).

Other financial instruments consist mainly of cash and cash equivalents, current and non-current receivables, net investment in sales-type leases, bank loan, accounts payable and other current liabilities. The fair value of these financial instruments approximates their carrying values.

Other fair value disclosures

The following table provides a reconciliation of the changes for those financial liabilities where fair value measurements are estimated utilizing Level 3 inputs, which consist of obligations in connection with acquisitions:

	Six months ended		Year ended
	June 30, 2017		December 31, 2016
	(U.S. $ in thousands)
Fair value at the beginning of the period	$	2,619	$	6,991
Settlements		-		(3,500	)
Change in fair value recognized in earnings		1,313		(872	)
Fair value at the end of the period	$	3,932	$	2,619

The Company’s obligations in connection with acquisitions as of June 30, 2017, which are estimated utilizing Level 3 inputs, are related to the deferred payments for the Company’s acquisition of Solid Concepts Inc. (the “Solid Concepts transaction”). As part of the Solid Concepts transaction, which was completed in July 2014, the Company is obligated to pay additional deferred payments in three separate annual installments after the Solid Concepts transaction date (“deferred payments”). Subject to certain requirements for cash payments, the Company retains the discretion to settle the deferred payments in its shares, cash or any combination of the two. The deferred payments are also subject to certain adjustments based on the Company’s share price. During the third quarter of 2016, the Company issued 152,633 ordinary shares valued at $3.1 million and paid cash of $0.4 million to settle the second annual installment of the deferred payments.

The deferred payments are classified as liabilities and are measured at fair value in the Company’s consolidated balance sheets. The fair value of the deferred payments was determined based on the closing market price of the Company’s ordinary shares on the Solid Concepts transaction date, adjusted to reflect a discount for lack of marketability for the applicable periods. The discount for lack of marketability was calculated based on the historical volatility of the Company’s share price and thus represents a Level 3 measurement within the fair value hierarchy. As of June 30, 2017, the fair value of the remaining deferred payments was $3.9 million. As of June 30, 2017, the total amount of the remaining deferred payments, which does not reflect a discount for lack of marketability, was approximately $4.0 million, based on the Company’s share price as of that date.

The fair value of the deferred payments is primarily linked to the Company’s share price. An increase of 10% in the Company’s share price as of June 30, 2017 would have increased the fair value of the remaining deferred payments by $0.4 million.

In addition, changes in Level 3 inputs that were used in the fair value calculation might change the fair value of the deferred payments. A decrease of 10% in the Company’s share price volatility used in the calculation for discount for lack of marketability as of June 30, 2017 would not change materially the fair value of the Company’s deferred payments liability.

With respect to the fair-value revaluations of the deferred payments, the Company recorded a loss of $0.6 million and a gain of $0.6 million, for the three-month periods ended June 30, 2017 and 2016, respectively, and losses of $1.3 million and $0.1 million for the six-month periods ended June 30, 2017 and 2016, respectively. Such fair-value revaluations are presented under change in fair value of obligations in connection with acquisitions in the Company’s consolidated statements of operations and comprehensive loss.

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Derivative instruments and hedging activities

6 Months Ended

Jun. 30, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative instruments and hedging activities

Note 7. Derivative instruments and hedging activities

As the Company conducts its operations globally, it is exposed to global market risks and to the risk that its earnings, cash flows and equity could be adversely impacted by fluctuations in foreign currency exchange rates. The Company enters into transactions involving foreign currency exchange derivative financial instruments. The Company manages its foreign currency exposures on a consolidated basis, which allows the Company to net exposures and take advantage of any natural hedging. The transactions are designed to manage the Company’s net exposure to foreign currency exchange rates and to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates. The Company does not enter into derivative transactions for trading purposes.

The Company is primarily exposed to foreign exchange risk with respect to recognized assets and liabilities and forecasted transactions denominated in the New Israeli Shekel (“NIS”), the Euro, the Japanese Yen, the Korean Won and the Chinese Yuan. The gains and losses on the hedging instruments offset losses and gains on the hedged items. Financial markets and currency volatility may limit the Company’s ability to hedge these exposures.

The following table summarizes the condensed consolidated balance sheets classification and fair values of the Company’s derivative instruments:

		Fair Value						Notional Amount
		June 30,			December 31,			June 30,		December 31,
	Balance sheet location	2017			2016			2017		2016
						U.S. $ in thousands
Assets derivatives -Foreign exchange contracts, not designated as hedging instruments	Other current assets	$	206		$	1,440		$	26,060	$	39,982
Assets derivatives -Foreign exchange contracts, designated as cash flow hedge	Other current assets		161			37			6,526		8,348
Liability derivatives -Foreign exchange contracts, not designated as hedging instruments	Accrued expenses and other current liabilities		(811	)		(48	)		61,868		13,273
Liability derivatives -Foreign exchange contracts, designated as hedging instruments	Accrued expenses and other current liabilities		-			(61	)		-		7,534
		$	(444	)	$	1,368		$	94,454	$	69,137

As of June 30, 2017, the notional amounts of the Company’s outstanding exchange forward contracts, not designated as hedging instruments, were $87.9 million and were used to reduce foreign currency exposures of the local currencies in the markets in which the Company operates. With respect to such derivatives, loss of $2.4 million and gain of $0.5 million were recognized under financial income, net for the three-month periods ended June 30, 2017 and 2016, respectively, and losses of $2.7 million and $2.4 million were recognized under financial income, net for the six-month periods ended June 30, 2017 and 2016, respectively. Such losses and gains partially offset the revaluation changes of foreign currencies the balance sheet items, which are also recognized under financial income, net.

As of June 30, 2017, the Company had in effect foreign exchange forward contracts, designated as cash flow hedge for accounting purposes, for the conversion of $6.5 million into NIS. The Company uses short-term cash flow hedge contracts to reduce its exposure to variability in expected future cash flows resulting mainly from payroll costs denominated in NIS. The changes in fair value of those contracts are included in the Company’s accumulated other comprehensive loss. These contracts mature through December 2017.

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Equity

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

Equity

Note 8. Equity

a. Stock-based compensation plans

Stock-based compensation expenses for equity-classified stock options and RSUs were allocated as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
	U.S $ in thousands
Cost of sales	$	799	$	729	$	1,442	$	1,451
Research and development, net		1,089		1,357		1,938		2,716
Selling, general and administrative		3,443		3,393		5,855		6,935
Total stock-based compensation expenses	$	5,331	$	5,479	$	9,235	$	11,102

A summary of the Company’s stock option activity for the six months ended June 30, 2017 is as follows:

			Weighted Average
	Number of Options		Exercise Price
Options outstanding as of January 1, 2017	2,615,461		$	37.21
Granted	1,608,885			20.51
Exercised	(140,476	)		15.77
Forfeited	(464,266	)		40.97
Options outstanding as of June 30, 2017	3,619,604		$	30.14
Options exercisable as of June 30, 2017	1,477,347		$	38.88

The outstanding options generally have a term of ten years from the grant date. Options granted become exercisable over the vesting period, which is normally a four-year period beginning on the grant date, subject to the employee’s continuous service to the Company. The fair value of stock options is determined using the Black-Scholes model.

The fair value of stock options is determined using the Black-Scholes model. The weighted-average grant date fair value of options that were granted during the six-month period ended June 30, 2017 was $10.78 per option.

During the six-month periods ended June 30, 2017 and 2016, the Company issued 140,476 shares and 93,591 shares, respectively, upon the exercise of stock options. This resulted in an increase in equity of $2.2 million and $0.7 million for the six-month periods ended June 30, 2017 and 2016, respectively.

As of June 30, 2017, the unrecognized compensation cost of $23.2 million related to all unvested, equity-classified stock options is expected to be recognized as an expense over a weighted-average period of 3.2 years.

A summary of the Company’s RSUs activity for the six months ended June 30, 2017 is as follows:

			Weighted Average
	Number of RSUs		Grant Date Fair Value
Unvested RSUs outstanding as of January 1, 2017	267,756		$	81.35
Granted	253,858			19.97
Forfeited	(73,638	)		82.50
Vested	(67,980	)		57.69
Unvested RSUs outstanding as of June 30, 2017	379,996		$	44.36

The fair value of RSUs is determined based on the quoted price of the Company’s ordinary shares on the date of the grant.

As of June 30, 2017, the unrecognized compensation cost of $10.6 million related to all unvested, equity-classified RSUs is expected to be recognized as expense over a weighted-average period of 2.9 years.

b. Accumulated other comprehensive loss

The following table presents the changes in the components of accumulated other comprehensive income (loss), net of taxes, for the six months ended June 30, 2017 and 2016:

	Six months ended June 30, 2017
	Net unrealized gain			Foreign currency
	(loss) on cash flow			translation
	hedges			adjustments			Total
	U.S. $ in thousands
Balance as of January 1, 2017	$	(24	)	$	(13,455	)	$	(13,479	)
Other comprehensive income before reclassifications		1,069			3,150			4,219
Amounts reclassified from accumulated other comprehensive loss		(883	)		-			(883	)
Other comprehensive income		186			3,150			3,336
Balance as of June 30, 2017	$	162		$	(10,305	)	$	(10,143	)

	Six months ended June 30, 2016
	Net unrealized gain			Foreign currency
	(loss) on cash flow			translation
	Hedges			adjustments			Total
	U.S. $ in thousands
Balance as of January 1, 2016	$	(107	)	$	(10,667	)	$	(10,774	)
Other comprehensive loss before reclassifications		542			380			922
Amounts reclassified from accumulated other comprehensive income		(151	)		-			(151)
Other comprehensive income		391			380			771
Balance as of June 30, 2016	$	284		$	(10,287	)	$	(10,003	)

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Contingencies

6 Months Ended

Jun. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Contingencies

Note 9. Contingencies

Claims Related to Company Equity

On March 4, 2013, five current or former minority shareholders (two of whom were former directors) of the Company filed two lawsuits against the Company in an Israeli central district court. The lawsuits demanded that the Company amend its capitalization table such that certain share issuances prior to the Stratasys-Objet merger to certain of Objet’s shareholders named as defendants would be cancelled, with a consequent issuance of additional shares to the plaintiffs to account for the subsequent dilution to which they have been subject. The lawsuits also named as defendants Elchanan Jaglom, Chairman of the Company’s board of directors, in one of the lawsuits, Ilan Levin, the Company’s Chief Executive Officer and director, various shareholders of the Company who were also shareholders of Objet, and David Reis, a director.

The Company filed its statements of defense in May 2013 denying the plaintiffs’ claims. In 2015, the court dismissed the lawsuit of one of the former directors due to lack of cause. In February 2017, the parties reached an agreement pursuant to which all claims were settled at no material cost to the Company. Notice of the settlement was provided and the suits were subsequently dismissed.

Securities Law Class Actions

On February 5, 2015, a lawsuit styled as a class action was commenced in the United States District Court for the District of Minnesota, naming the Company and certain of the Company’s officers as defendants. Similar actions were filed on February 9 and 20, 2015 in the Southern District of New York and the Eastern District of New York, respectively. The lawsuits allege violations of the Securities Exchange Act of 1934 in connection with allegedly false and misleading statements concerning the Company’s business and prospects. The plaintiffs seek damages and awards of reasonable costs and expenses, including attorneys’ fees.

On April 15, 2015, the cases were consolidated for all purposes, and on April 24, 2015, the Court entered an order appointing lead plaintiffs and approving their selection of lead counsel for the putative class. On July 1, 2015, lead plaintiffs filed their consolidated complaint. On August 31, 2015, the defendants moved to dismiss the consolidated complaint for failure to state a claim. The Court heard the motion on December 11, 2015. On June 30, 2016, the Court granted defendants’ motion to dismiss with prejudice and entered judgment in favor of defendants. On July 29, 2016, lead plaintiffs filed a notice of appeal to the United States Court of Appeals for the Eighth Circuit from the Court’s judgment. On September 22, 2016, lead plaintiffs filed the opening initial brief in support of their appeal. On October 24, 2016, defendants filed their answering brief to the appeal. On November 18, 2016, lead plaintiffs filed their reply brief in support of the appeal. Oral arguments for appeal were held on March 9, 2017. On July 25, 2017, the Eighth Circuit entered an order and judgment affirming the Court’s dismissal with prejudice.

The Company is a party to various other legal proceedings, the outcome of which, in the opinion of management, will not have a significant adverse effect on the financial position or profitability of the Company.

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Inventories (Tables)

6 Months Ended

Jun. 30, 2017

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories, net consisted of the following:

	June 30,		December 31,
	2017		2016
	U.S. $ in thousands
Finished goods	$	64,077	$	62,728
Work-in-process		2,021		2,389
Raw materials		50,388		52,404
	$	116,486	$	117,521

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Changes in the Carrying Amount of Goodwill

Changes in the carrying amount of the Company’s goodwill for the six months ended June 30, 2017 were as follows:

	U.S. $ in millions
Goodwill as of January 1, 2017	$	385.6
Translation differences		0.9
Goodwill as of June 30, 2017	$	386.5

Schedule of Other Intangible Assets

Other intangible assets consisted of the following:

	June 30, 2017							December 31, 2016
	Carrying Amount,					Net		Carrying Amount,					Net
	Net of		Accumulated			Book		Net of		Accumulated			Book
	Impairment		Amortization			Value		Impairment		Amortization			Value
	U.S. $ in thousands
Developed technology	$	304,766	$	(209,549	)	$	95,217	$	304,766	$	(198,632	)	$	106,134
Patents		19,692		(13,268	)		6,424		19,009		(12,257	)		6,752
Trademarks and trade names		27,808		(17,526	)		10,282		27,819		(16,849	)		10,970
Customer relationships		106,880		(58,816	)		48,064		106,571		(54,258	)		52,313
Capitalized software development costs		19,541		(18,602	)		939		19,540		(18,251	)		1,289
	$	478,687	$	(317,761	)	$	160,926	$	477,705	$	(300,247	)	$	177,458

Schedule of Estimated Amortization Expense Relating to Intangible Assets

As of June 30, 2017, estimated amortization expense relating to intangible assets currently subject to amortization for each of the following periods was as follows:

	Estimated
	amortization expense
	(U.S. $ in thousands)
Remaining 6 months of 2017	$	17,323
2018		33,214
2019		32,307
2020		31,967
2021		31,387
Thereafter		14,728
Total	$	160,926

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Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2017

Net loss per ordinary share attributable to Stratasys Ltd.

Schedule of Computations of Numerator and Denominator of Basic and Diluted Income (Loss) Per Share

The following table presents the numerator and denominator of the basic and diluted net loss per share computations for the three and six months ended June 30, 2017 and 2016:

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
	In thousands, except per share amounts
Numerator:
Net loss attributable to Stratasys Ltd. for basic loss per share	$	(5,987	)	$	(18,490	)	$	(19,844	)	$	(41,631	)
Adjustment of deferred payments liability revaluation		-			(559	)		-			-
Net loss attributable to Stratasys Ltd. for diluted loss per share		(5,987	)		(19,049	)		(19,844	)		(41,631	)
Denominator:
Weighted average shares – denominator for basic net loss per share		52,778			52,169			52,733			52,133
Add:
Shares settlement presumed for deferred payments liability		-			327			-			-
Denominator for diluted loss per share		52,778			52,496			52,733			52,133
Net loss per share attributable to Stratasys Ltd.
Basic	$	(0.11	)	$	(0.35	)	$	(0.38	)	$	(0.80	)
Diluted	$	(0.11	)	$	(0.36	)	$	(0.38	)	$	(0.80	)

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2017

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Carried at Fair Value on a Recurring Basis

The following tables summarize the Company’s financial assets and liabilities that are carried at fair value on a recurring basis, by fair value hierarchy, in its consolidated balance sheets:

	June 30, 2017
	(U.S. $ in thousands)
	Level 2			Level 3			Total
Assets:
Foreign exchange forward contracts not designated as hedging instruments	$	206		$	-		$	206
Foreign exchange forward contracts designated as hedging instruments		161			-			161
Liabilities:
Foreign exchange forward contracts not designated as hedging instruments		(811	)		-			(811	)
Obligations in connection with acquisitions		-			(3,932	)		(3,932	)
	$	(444	)	$	(3,932	)	$	(4,376	)
	December 31, 2016
	(U.S. $ in thousands)
	Level 2			Level 3			Total
Assets:
Foreign exchange forward contracts not designated as hedging instruments	$	1,440		$	-		$	1,440
Foreign exchange forward contracts designated as hedging instruments		37			-			37
Liabilities:
Foreign exchange forward contracts not designated as hedging instruments		(48	)		-			(48	)
Foreign exchange forward contracts designated as hedging instruments		(61	)		-			(61	)
Obligations in connection with acquisitions		-			(2,619	)		(2,619	)
	$	1,368		$	(2,619	)	$	(1,251	)

Schedule of Reconciliation of Fair Value Measurements of Assets and Liabilities Utilizing Level 3 Inputs

The following table provides a reconciliation of the changes for those financial liabilities where fair value measurements are estimated utilizing Level 3 inputs, which consist of obligations in connection with acquisitions:

	Six months ended		Year ended
	June 30, 2017		December 31, 2016
	(U.S. $ in thousands)
Fair value at the beginning of the period	$	2,619	$	6,991
Settlements		-		(3,500	)
Change in fair value recognized in earnings		1,313		(872	)
Fair value at the end of the period	$	3,932	$	2,619

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Derivative instruments and hedging activities (Tables)

6 Months Ended

Jun. 30, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of balance sheet classification and fair values of derivative instruments

The following table summarizes the condensed consolidated balance sheets classification and fair values of the Company’s derivative instruments:

		Fair Value						Notional Amount
		June 30,			December 31,			June 30,		December 31,
	Balance sheet location	2017			2016			2017		2016
						U.S. $ in thousands
Assets derivatives -Foreign exchange contracts, not designated as hedging instruments	Other current assets	$	206		$	1,440		$	26,060	$	39,982
Assets derivatives -Foreign exchange contracts, designated as cash flow hedge	Other current assets		161			37			6,526		8,348
Liability derivatives -Foreign exchange contracts, not designated as hedging instruments	Accrued expenses and other current liabilities		(811	)		(48	)		61,868		13,273
Liability derivatives -Foreign exchange contracts, designated as hedging instruments	Accrued expenses and other current liabilities		-			(61	)		-		7,534
		$	(444	)	$	1,368		$	94,454	$	69,137

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Equity (Tables)

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

Schedule of Share-based Compensation Expense

Stock-based compensation expenses for equity-classified stock options and RSUs were allocated as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
	U.S $ in thousands
Cost of sales	$	799	$	729	$	1,442	$	1,451
Research and development, net		1,089		1,357		1,938		2,716
Selling, general and administrative		3,443		3,393		5,855		6,935
Total stock-based compensation expenses	$	5,331	$	5,479	$	9,235	$	11,102

Summary of Stock Options Activity

A summary of the Company’s stock option activity for the six months ended June 30, 2017 is as follows:

			Weighted Average
	Number of Options		Exercise Price
Options outstanding as of January 1, 2017	2,615,461		$	37.21
Granted	1,608,885			20.51
Exercised	(140,476	)		15.77
Forfeited	(464,266	)		40.97
Options outstanding as of June 30, 2017	3,619,604		$	30.14
Options exercisable as of June 30, 2017	1,477,347		$	38.88

Summary of RSUs activity

A summary of the Company’s RSUs activity for the six months ended June 30, 2017 is as follows:

			Weighted Average
	Number of RSUs		Grant Date Fair Value
Unvested RSUs outstanding as of January 1, 2017	267,756		$	81.35
Granted	253,858			19.97
Forfeited	(73,638	)		82.50
Vested	(67,980	)		57.69
Unvested RSUs outstanding as of June 30, 2017	379,996		$	44.36

Schedule of Accumulated other comprehensive income (loss)

The following table presents the changes in the components of accumulated other comprehensive income (loss), net of taxes, for the six months ended June 30, 2017 and 2016:

	Six months ended June 30, 2017
	Net unrealized gain			Foreign currency
	(loss) on cash flow			translation
	hedges			adjustments			Total
	U.S. $ in thousands
Balance as of January 1, 2017	$	(24	)	$	(13,455	)	$	(13,479	)
Other comprehensive income before reclassifications		1,069			3,150			4,219
Amounts reclassified from accumulated other comprehensive loss		(883	)		-			(883	)
Other comprehensive income		186			3,150			3,336
Balance as of June 30, 2017	$	162		$	(10,305	)	$	(10,143	)

	Six months ended June 30, 2016
	Net unrealized gain			Foreign currency
	(loss) on cash flow			translation
	Hedges			adjustments			Total
	U.S. $ in thousands
Balance as of January 1, 2016	$	(107	)	$	(10,667	)	$	(10,774	)
Other comprehensive loss before reclassifications		542			380			922
Amounts reclassified from accumulated other comprehensive income		(151	)		-			(151)
Other comprehensive income		391			380			771
Balance as of June 30, 2016	$	284		$	(10,287	)	$	(10,003	)

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Basis of Presentation and Consolidation (Details) $ in Millions	6 Months Ended
	Jun. 30, 2017 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cumulative-effect adjustment to net operating loss from adoption of new accounting pronouncement	$ 5

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Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Inventory Disclosure [Abstract]
Finished goods	$ 64,077	$ 62,728
Work-in-process	2,021	2,389
Raw materials	50,388	52,404
Total Inventory	$ 116,486	$ 117,521

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Goodwill and Other Intangible Assets (Schedule of Changes in the Carrying Amount of Goodwill) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2017 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill as of January 1, 2017	$ 385,629
Translation differences	900
Goodwill as of June 30, 2017	$ 386,513

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Goodwill and Other Intangible Assets (Schedule of Other Intangible Assets) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 478,687	$ 477,705
Accumulated Amortization	(317,761)	(300,247)
Net Book Value	160,926	177,458
Developed technology [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	304,766	304,766
Accumulated Amortization	(209,549)	(198,632)
Net Book Value	95,217	106,134
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	19,692	19,009
Accumulated Amortization	(13,268)	(12,257)
Net Book Value	6,424	6,752
Trademarks and trade names [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	27,808	27,819
Accumulated Amortization	(17,526)	(16,849)
Net Book Value	10,282	10,970
Customer relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	106,880	106,571
Accumulated Amortization	(58,816)	(54,258)
Net Book Value	48,064	52,313
Capitalized software development costs [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	19,541	19,540
Accumulated Amortization	(18,602)	(18,251)
Net Book Value	$ 939	$ 1,289

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Goodwill and Other Intangible Assets (Schedule of Estimated Amortization Expense Relating to Intangible Assets) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Remaining six months of 2017	$ 17,323		$ 17,323
2018	33,214		33,214
2019	32,307		32,307
2020	31,967		31,967
2021	31,387		31,387
Thereafter	14,728		14,728
Net Book Value	160,926		160,926
Amortization of intangible assets	$ 8,700	$ 14,500	$ 17,400	$ 29,200

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Loss Per Share (Narrative) (Details) - shares shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Net loss per ordinary share attributable to Stratasys Ltd.
Antidilutive securities excluded from computation of net loss per share	4.4	3.8	4.4	4.1

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Loss Per Share (Schedule of Computations of Numerator and Denominator of Basic and Diluted Income (Loss) Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Numerator:
Net loss attributable to Stratasys Ltd. for basic loss per share	$ (5,987)	$ (18,490)	$ (19,844)	$ (41,631)
Adjustment of deferred payments liability revaluation		(559)
Net loss attributable to Stratasys Ltd. for diluted loss per share	$ (5,987)	$ (19,049)	$ (19,844)	$ (41,631)
Denominator:
Weighted average shares - denominator for basic net loss per share	52,778	52,169	52,733	52,133
Add:
Shares settlement presumed for deferred payments liability		327
Denominator for diluted loss per share	52,778	52,496	52,733	52,133
Net loss per share attributable to Stratasys Ltd.
Basic	$ (0.11)	$ (0.35)	$ (0.38)	$ (0.80)
Diluted	$ (0.11)	$ (0.36)	$ (0.38)	$ (0.80)

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Income Taxes (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income Tax Disclosure [Abstract]
Effective Income Tax Rate, Continuing Operations	(28.30%)	(15.10%)	(15.50%)	(12.80%)

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Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Change in fair value of obligations in connection with acquisitions	$ 617		$ (587)	$ 1,313	$ 140
Solid Concepts Inc [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Remaining obligations in connection with acquisitions	3,900			3,900
Increase to fair value of deferred payments if Company's share price increased by 10%				4,000
Increase to fair value of deferred payments if there was a 10% change in share price volatility used in calculation of discount				400
Increased fair value of deferred payments liability	$ 4,000			$ 4,000
Solid Concepts Inc [Member] | Ordinary Shares [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Ordinary shares issued as consideration for business acquisition		152,633
Value of ordinary shares issued as consideration for business acquisition		$ 3,100
Cash given as consideration for business acquisition		$ 400

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Fair Value Measurement (Schedule of Fair Value Measurements) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities	$ (4,376)	$ (1,251)
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets		1,368
Derivative liabilities	(444)
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities	(3,932)	(2,619)
Foreign Exchange Future [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	206	1,440
Derivative liabilities	(811)	(48)
Foreign Exchange Future [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	206	1,440
Derivative liabilities	(811)	(48)
Foreign Exchange Future [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets
Derivative liabilities
Foreign Exchange Future Two [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	161	37
Derivative liabilities		(61)
Foreign Exchange Future Two [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	161	37
Derivative liabilities		(61)
Foreign Exchange Future Two [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets
Derivative liabilities
Obligations in connection with acquisitions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities	(3,932)	(2,619)
Obligations in connection with acquisitions [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities
Obligations in connection with acquisitions [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities	$ (3,932)	$ (2,619)

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Fair Value Measurement (Schedule of Reconciliation of Fair Value Measurements of Assets and Liabilities Utilizing Level 3 Inputs) (Details)) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Reconciliation of Fair Value Measurements of Assets and Liabilities Utilizing Level 3 Inputs [Roll Forward]
Fair value at the beginning of period	$ 2,619	$ 6,991
Settlements		(3,500)
Change in fair value recognized in earnings	1,313	(872)
Fair value at the end of period	$ 3,932	$ 2,619

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Derivative instruments and hedging activities (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Derivatives, Fair Value [Line Items]
Assets derivatives - Notional amount	$ 87.9		$ 87.9
Gain (Loss) on derivative instrument	(2.4)	$ 0.5	(2.7)	$ (2.4)
Other current assets [Member] | Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Conversion To NIS [Member]
Derivatives, Fair Value [Line Items]
Assets derivatives - Notional amount	$ 6.5		$ 6.5

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Derivatives and Hedging Activities (Schedule of Balance Sheet Classification and Fair Values of Derivative Instruments) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Derivatives, Fair Value [Line Items]
Notional amount of derivative asset	$ 87,900
Fair value	(444)	$ 1,368
Notional amount	94,454	69,137
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | Other current assets [Member]
Derivatives, Fair Value [Line Items]
Fair value derivative asset	206	1,440
Notional amount of derivative asset	26,060	39,982
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | Accrued expenses and other current liabilities [Member]
Derivatives, Fair Value [Line Items]
Fair value derivative liability	(811)	(48)
Notional amount of derivative liability	61,868	13,273
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Other current assets [Member] | Cash Flow Hedge [Member]
Derivatives, Fair Value [Line Items]
Fair value derivative asset	161	37
Notional amount of derivative asset	6,526	8,348
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Accrued expenses and other current liabilities [Member] | Cash Flow Hedge [Member]
Derivatives, Fair Value [Line Items]
Fair value derivative liability		(61)
Notional amount of derivative liability		$ 7,534

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Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average fair value of options granted	$ 10.78
Number of options exercised	140,476	93,591
Increase in equity	$ 2.2	$ 0.7
Stock option term	10 years
Vesting period	4 years
Unrecognized compensation cost	$ 23.2
Weighted average period for recognition	3 years 2 months 12 days
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 10.6
Weighted average period for recognition	2 years 10 months 25 days

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Equity (Schedule of Stock-based Compensation) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expenses	$ 5,331	$ 5,479	$ 9,235	$ 11,102
Cost of sales [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expenses	799	729	1,442	1,451
Research and development, net [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expenses	1,089	1,357	1,938	2,716
Selling, general and administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expenses	$ 3,443	$ 3,393	$ 5,855	$ 6,935

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Equity (Schedule of Stock Option Activity) (Details) - $ / shares	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Number of Options:
Balance, beginning	2,615,461
Granted	1,608,885
Exercised	(140,476)	(93,591)
Forfeited	(464,266)
Balance, ending	3,619,604
Exercisable	1,477,347
Weighted Average Exercise Price:
Balance, beginning	$ 37.21
Granted	20.51
Exercised	15.77
Forfeited	40.97
Balance, ending	30.14
Exercisable	$ 38.88

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Equity (Summary of RSUs activity) (Details) - Restricted Stock Units (RSUs) [Member]	6 Months Ended
	Jun. 30, 2017 $ / shares shares
Number of RSUs
Unvested RSUs outstanding, beginning | shares	267,756
Granted | shares	253,858
Forfeited | shares	(73,638)
Vested | shares	(67,980)
Unvested RSUs outstanding, ending | shares	379,996
Weighted Average Grant Date Fair Value
Unvested RSUs outstanding, beginning | $ / shares	$ 81.35
Granted | $ / shares	19.97
Forfeited | $ / shares	82.50
Vested | $ / shares	57.69
Unvested RSUs outstanding, ending | $ / shares	$ 44.36

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Equity (Schedule of Accumulated other comprehensive income (loss)) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance as of beginning of period	$ (13,479)	$ (10,774)
Other comprehensive income (loss) before reclassifications	4,219	922
Amounts reclassified from accumulated other comprehensive income	(883)	(151)
Other comprehensive income	3,336	771
Balance as of end of period	(10,143)	(10,003)
Net unrealized gain (loss) on cash flow hedges [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance as of beginning of period	(24)	(107)
Other comprehensive income (loss) before reclassifications	1,069	542
Amounts reclassified from accumulated other comprehensive income	(883)	(151)
Other comprehensive income	186	391
Balance as of end of period	162	284
Foreign currency translation adjustments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance as of beginning of period	(13,455)	(10,667)
Other comprehensive income (loss) before reclassifications	3,150	380
Amounts reclassified from accumulated other comprehensive income
Other comprehensive income	3,150	380
Balance as of end of period	$ (10,305)	$ (10,287)