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 May 2018

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

(Addresses of principal executive offices)

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): ☐

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): ☐

CONTENTS

On May 2, 2018, Stratasys Ltd. (“we” or “us”) announced our financial results for the quarter ended March 31, 2018. A copy of our press release announcing our results is furnished as Exhibit 99.1 to this Report of Foreign Private Issuer on Form 6-K (“Form 6-K”) and is incorporated herein by reference.

In conjunction with the conference call to be held on May 2, 2018, to discuss our results, we are also furnishing a copy of the script used for the conference call to provide additional information regarding our business and our financial results (attached to this Form 6-K as Exhibit 99.2 and incorporated herein by reference) and a PowerPoint presentation with additional information (attached to this Form 6-K as Exhibit 99.3 and incorporated herein by reference).

The information in this Form 6-K, including Exhibits 99.1, 99.2 and 99.3, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

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: May 2, 2018	By:	/s/ Lilach Payorski
	Name:	Lilach Payorski
	Title:	Chief Financial Officer

EXHIBIT INDEX

The following exhibits are furnished as part of this Form 6-K:

Exhibit	Description
99.1	Press release dated May 2, 2018, announcing the financial results of Stratasys Ltd. for the quarter ended March 31, 2018
99.2	Script for our conference call to be held on May 2, 2018
99.3	PowerPoint presentation with additional information

EX-99.1

NEWS RELEASE

STRATASYS RELEASES FIRST QUARTER 2018 FINANCIAL RESULTS

First Quarter Revenue decreased 6% to $153.8 million compared to same period last year

First Quarter GAAP net loss of $13.0 million, or ($0.24) per diluted share, and non-GAAP net
income of $2.7 million, or $0.05 per diluted share

Generated $27.1 million of cash from operations during the quarter

Minneapolis & Rehovot, Israel, May 2, 2018 — Stratasys Ltd. (NASDAQ: SSYS), a global leader in additive technology solutions, announced financial results for the first quarter of 2018.

Q1 2018 Financial Results Summary:
Revenue for the first quarter of 2018 was $153.8 million, compared to $163.2 million for the same period last year.

● GAAP gross margin was 49.2% for the quarter, compared to a GAAP gross margin of 47.1% for the same period last year.

● Non-GAAP gross margin was 52.8% for the quarter, compared to 51.2% for the same period last year.

● GAAP operating loss for the quarter was $6.5 million, compared to a loss of $12.6 million for the same period last year.

● Non-GAAP operating income for the quarter was $4.9 million, compared to $4.0 million for the same period last year.

● GAAP net loss for the quarter was $13.0 million, or ($0.24) per diluted share, compared to a loss of $13.9 million, or ($0.26) per diluted share, for the same period last year.

● Non-GAAP net income for the quarter was $2.7 million, or $0.05 per diluted share, compared to Non-GAAP net income of $2.4 million, or $0.05 per diluted share, reported for the same period last year.

● Net R&D expenses for the quarter amounted to $25.1 million, an increase of 1.9% compared the same period last year.

● The Company generated $27.1 million in cash from operations during the first quarter and ended the period with $346.5 million in cash and cash equivalents.

“We are disappointed with our revenue for the first quarter, which is primarily attributed to underperformance in North America related to high end system orders, specifically from customers in government and other key verticals such as aerospace and automotive,” said Ilan Levin, Chief Executive Officer of Stratasys. “We do not believe that our first quarter revenue represents a fundamental change in the demand environment in the North American market. We continue to maintain a strong pipeline of opportunities, and are not modifying the full year guidance we issued earlier this year. Despite our revenue results in the period we continued our positive trend of operational discipline and cash generation. We remain committed to our investments in long-term initiatives that include advancements in our core FDM and PolyJet technologies, new metal additive manufacturing platform, advanced composite materials, and software and application development.”

New Product Announcements
At the RAPID + TCT 3D Printing and Additive Manufacturing Conference, the Company showcased multiple product announcements reaffirming leadership in prototyping and manufacturing.

Extending the capabilities and broadening the Company’s product line for the prototyping market:

● Enhancements to the PolyJet portfolio that include an upgraded version of the multi-material, full-color J750 3D printing platform that adds increased reliability via hardware and software enhancements, as well as the new J735 3D printer with a smaller build size.

● New Vivid Colors for GrabCAD Print on the J750 and J735, featuring over 500,000 color combinations, highly accurate color matching, and advanced clear materials with texture functionality.

● Expanding GrabCAD Print support to include the Connex3 line of multi-material 3D printers.

New materials offerings, certification solutions, and software capabilities for the manufacturing market:

● Antero 800NA, a PEKK-based thermoplastic that allows aerospace and other high-performance vehicle makers to produce high-temperature, chemical-exposed parts.

● F900 Production 3D Printer with manufacturing-focused upgrades including support for Carbon Fiber Filled Nylon 12, as well as the specialized F900 Aircraft Interiors Certification Solution (AICS), and the F900 Pro edition that extends the high repeatability developed for AICS to all industries.

● Specialized F380 Production 3D Printer dedicated to Carbon Fiber Filled Nylon 12, providing users with the high strength and stiffness of Stratasys FDM Nylon 12CF on a proven platform with soluble supporting material, consistent quality, yield, and throughput of an industrial solution at a competitive price point.

● GrabCAD Print Jigs & Fixtures, a new software package that significantly improves the production of jigs, fixtures, and other manufacturing tooling.

The Company provided further details regarding its new metal additive manufacturing platform:

● New approach to metal 3D printing that incorporates proprietary jetting technology and results in 80% reduction in cost per part for aluminum components compared to other additive technologies.

● Ability to 3D print “green state” parts with standard metal powders, beginning with aluminum, that are post processed via industry standard powder metallurgy processes and workflows.

● Part properties achievable with the technology include final parts with density and isotropy that is significantly higher than existing additive solutions, and near identical chemical composition compared to parts created by conventional methods.

● The solution has been optimized for production rather than prototyping, making it highly efficient and commercially viable for a wide range of applications.

● For the first time, showcased end-use production parts produced on the new metal platform.

New Partnership and Customer Announcements
A growing number of companies are moving through the adoption cycle of additive manufacturing technologies as they transition from early adoption to certification and qualification, and then onto final production applications. Recent examples include:

● Adoption of Stratasys technology for production applications demonstrated by the establishment of a Singapore-based additive manufacturing service center in a joint venture with SIA Engineering Company to provide 3D printed parts for use in commercial aviation and to service the maintenance, repair, and overhaul (MRO) market.

● Eckhart Inc. and Stratasys collaborating to advance the adoption of 3D printing for factory tooling in North America. Eckhart has been developing factory tools for over 60 years, and is utilizing Stratasys’ FDM technology and advanced materials to pursue weight-savings, simplified bills of material, and enhanced operator visibility.

● Stratasys’ recently launched J700 Dental 3D Printer has been adopted for production applications by leading dental labs that include DynaFlex and Ortoplus.

“We are encouraged by the growing number of companies that are making significant progress in pursuing certifications for specific high value applications,” continued Levin. “Our recent collaborations deepen these efforts as our customers move towards production applications, designing and manufacturing with confidence.”

Financial Guidance:
Stratasys today reiterated the following information regarding the company’s guidance for projected revenue and net income for the fiscal year ending December 31, 2018:

● Revenue guidance of $670 to $700 million.

● GAAP net loss of $41 to $25 million, or ($0.75) to ($0.46) per diluted share.

● Non-GAAP net income of $16 to $27 million, or $0.30 to $0.50 per diluted share.

Stratasys reiterated the following additional guidelines regarding the company’s projected performance and strategic plans for 2018:

● Non-GAAP operating margins of 4.5% to 6%.

● Capital expenditures are projected at $40 to $50 million.

The Company’s guidance reflects increased investments in R&D, tools, materials, and additional resources aimed at expanding addressable markets by accelerating development efforts for the new metal additive manufacturing platform, further advancements based on our FDM and PolyJet technologies, and specific go-to-market initiatives in order to deepen customer engagement.

Given the expected ongoing negative impact of not recording a tax benefit on U.S. tax losses on the Company’s non-GAAP net income, the Company believes that the rate of growth in its non-GAAP operating income will be the best measure of performance.

Non-GAAP earnings guidance excludes $32 to $34 million of projected amortization of intangible assets; $17 to $19 million of share-based compensation expense; and $7 to $9 million in reorganization and other related costs; and includes $4 to $5 million in tax expenses related to non-GAAP adjustments.

Stratasys Ltd. Q1 2018 Conference Call Details

The Company plans to hold the conference call to discuss its first quarter financial results on Wednesday, May 2, 2018 at 8:30 a.m. (ET).

The investor conference call will be available via live webcast on the Stratasys Web site at www.stratasys.com under the "Investors" tab; or directly at the following web address: https://edge.media-server.com/m6/p/6zpd5mm6.

To participate by telephone, the domestic dial-in number is (866) 394-5776 and the international dial-in is (409) 350-3596. The access code is 2128479.

Investors are advised to dial into the call at least ten minutes prior to the call to register. The webcast will be available for 90 days on the "Investors" page of the Stratasys Web site or by accessing the provided web address.

Stratasys (NASDAQ: SSYS) is a global leader in additive technology solutions for industries including Aerospace, Automotive, Healthcare, Consumer Products and Education. For nearly 30 years, a deep and ongoing focus on customers’ business requirements has fueled purposeful innovations—1,200 granted and pending additive technology patents to date—that create new value across product lifecycle processes, from design prototypes to manufacturing tools and final production parts. The Stratasys 3D printing ecosystem of solutions and expertise—advanced materials; software with voxel level control; precise, repeatable and reliable FDM and PolyJet 3D printers; application-based expert services; on-demand parts and industry-defining partnerships—works to ensure seamless integration into each customer’s evolving workflow. Fulfilling the real-world potential of additive, Stratasys delivers breakthrough industry-specific applications that accelerate business processes, optimize value chains and drive business performance improvements for thousands of future-ready leaders around the world.

Corporate Headquarters: Minneapolis, Minnesota and Rehovot, Israel.
Online at: www.stratasys.com, http://blog.stratasys.com and LinkedIn.

Stratasys and Fortus are registered trademarks and the Stratasys signet is a trademark of Stratasys Ltd. and/or its subsidiaries or affiliates. All other trademarks are the property of their respective owners.

Cautionary Statement Regarding Forward-Looking Statements

The statements in this press release regarding Stratasys' strategy, and the statements regarding its projected future financial performance, including the financial guidance concerning its expected results for 2018, are forward-looking statements reflecting management's current expectations and beliefs. These forward-looking statements are based on current information that is, by its nature, subject to rapid and even abrupt change. Due to risks and uncertainties associated with Stratasys' business, actual results could differ materially from those projected or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to: the degree of market acceptance of our 3D printers, high-performance systems and consumables, and the software and technology included in those systems; potential declines in the demand for, or the prices of, our products and services, or volume of our sales, due to decreased demand either for them specifically or in the 3D printing market generally; potential further charges against earnings that we could be required to take due to impairment of additional goodwill or other intangible assets; potential shifts in our product mix to lower-margin products or in our revenues mix towards our AM services business; any failure to adequately adapt our infrastructure and properly integrate the internal and external sources of our growth to generate intended benefits (including from the companies that we recently acquired); the impact of competition and new technologies; risks related to our relationships with our suppliers, resellers and independent sales agents, and our operations at our manufacturing sites; risks related to the international scope of our operations and regulatory compliance (including reporting, environmental, anti-corruption and other regulatory compliance) related to that scope of operations; risks related to the security of our information systems (including risks related to potential cyber-attacks); changes in the overall global economic environment or in political and economic conditions in the countries in which we operate; changes in our strategy; costs and potential liability relating to litigation and regulatory proceedings; and those additional factors referred to in Item 3.D “Key Information - Risk Factors”, Item 4, “Information on the Company”, Item 5, “Operating and Financial Review and Prospects,” and all other parts of our Annual Report on Form 20-F for the year ended December 31, 2017 (the “2017 Annual Report”), filed with the Securities and Exchange Commission (the “SEC”) on February 28^th, 2018. Readers are urged to carefully review and consider the various disclosures made throughout our 2017 Annual Report, the Report on Form 6-K that attaches Stratasys’ unaudited, condensed consolidated financial statements as of, and for the quarter ended, March 31, 2018, and its review of its results of operations and financial condition for those periods, which has been furnished to the SEC on or about the date hereof, and 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. Any guidance provided, and other forward-looking statements made, in this press release are made as of the date hereof, and Stratasys undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Use of non-GAAP financial measures

The non-GAAP data included herein, 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 or gains, and (y) excluding non-cash items such as stock-based compensation expenses, acquired intangible assets amortization, including intangible assets amortization related to equity method investments, impairment of 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 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.

Stratasys Investor Relations
Yonah Lloyd
Vice President - Investor Relations
Yonah.Lloyd@stratasys.com

Stratasys Ltd.

Consolidated Balance Sheets

(Unaudited)

(in thousands, except share data)
	March 31,			December 31,
	2018			2017
ASSETS
Current assets
Cash and cash equivalents	$	346,531		$	328,761
Accounts receivable, net		119,844			132,671
Inventories		120,065			115,717
Net investment in sales-type leases		5,980			7,208
Prepaid expenses		8,261			7,696
Other current assets		19,295			22,858
Total current assets		619,976			614,911
Non-current assets
Net investment in sales-type leases - long term		3,423			4,439
Property, plant and equipment, net		197,554			199,951
Goodwill		387,416			387,108
Other intangible assets, net		132,811			142,122
Other non-current assets		34,475			31,219
Total non-current assets		755,679			764,839
Total assets	$	1,375,655		$	1,379,750
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	40,608		$	39,849
Current portion of long term-debt		5,143			5,143
Accrued expenses and other current liabilities		33,390			30,041
Accrued compensation and related benefits		35,541			35,356
Deferred revenues		55,061			52,908
Total current liabilities		169,743			163,297
Non-current liabilities
Long-term debt		25,857			27,143
Deferred tax liabilities		4,141			7,069
Deferred revenues - long-term		15,139			15,200
Other non-current liabilities		30,785			32,899
Total non-current liabilities		75,922			82,311
Total liabilities		245,665			245,608
Redeemable non-controlling interests		1,579			1,635
Equity
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands shares; 53,710 thousands shares and 53,631 thousands shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively		145			145
Additional paid-in capital		2,667,023			2,663,274
Accumulated other comprehensive loss		(5,337	)		(7,023	)
Accumulated deficit		(1,533,403	)		(1,523,906	)
Equity attributable to Stratasys Ltd.		1,128,428			1,132,490
Non-controlling interest		(17	)		17
Total equity		1,128,411			1,132,507
Total liabilities and equity	$	1,375,655		$	1,379,750

Stratasys Ltd.

Consolidated Statements of Operations

(in thousands, except per share data)
	Three Months Ended March 31,
	2018			2017
	(unaudited)			(unaudited)
Net sales
Products	$	103,917		$	115,087
Services		49,916			48,075
	153,833				163,162
Cost of sales
Products		45,218			54,480
Services		32,965			31,802
		78,183			86,282
Gross profit		75,650			76,880
Operating expenses
Research and development, net		25,110			24,634
Selling, general and administrative		57,005			64,875
		82,115			89,509
Operating loss		(6,465	)		(12,629	)
Financial income, net		8			256
Loss before income taxes		(6,457	)		(12,373	)
Income tax expenses		601			1,326
Share in losses of associated companies		(6,073	)		(288	)
Net loss		(13,131	)		(13,987	)
Net loss attributable to non-controlling interests		(90	)		(130	)
Net loss attributable to Stratasys Ltd.	$	(13,041	)	$	(13,857	)
Net loss per ordinary share attributable to Stratasys Ltd.
Basic	$	(0.24	)	$	(0.26	)
Diluted		(0.24	)		(0.26	)
Basic		53,657			52,690
Diluted		53,657			52,690

Stratasys Ltd.

Reconciliation of GAAP to Non-GAAP Results of Operations

		Three Months Ended March 31,
		2018			Non-GAAP			2018		2017			Non-GAAP			2017
		GAAP			Adjustments			Non-GAAP		GAAP			Adjustments			Non-GAAP
		U.S. dollars and shares in thousands (except per share amounts)
	Gross profit (1)	$	75,650		$	5,599		$	81,249	$	76,880		$	6,614		$	83,494
	Operating income (loss) (1,2)	$	(6,465	)	$	11,387		$	4,922	$	(12,629	)	$	16,658		$	4,029
	Net income (loss) attributable to Stratasys Ltd. (1,2,3)	$	(13,041	)	$	15,763		$	2,722	$	(13,857	)	$	16,265		$	2,408
	Net income (loss) per diluted share attributable to Stratasys Ltd. (4)	$	(0.24	)	$	0.29		$	0.05	$	(0.26	)	$	0.31		$	0.05
(1)	Acquired intangible assets amortization expense					5,204								5,705
	Non-cash stock-based compensation expense					387								643
	Reorganization and other related costs					18								94
	Merger and acquisition related expense					(10	)							172
						5,599								6,614
(2)	Acquired intangible assets amortization expense					2,558								2,544
	Non-cash stock-based compensation expense					3,028								3,261
	Change in fair value of obligations in connection with acquisitions					-								696
	Reorganization and other related costs					1,671								1,686
	Gain from sale of plant and property					(1,563	)							-
	Merger and acquisition related expense					94								1,857
						5,788								10,044
						11,387								16,658
(3)	Corresponding tax effect					(792	)							(585	)
	Amortization of acquired intangibles assets related to equity method investments					5,168								192
					$	15,763							$	16,265
(4)	Weighted average number of ordinary shares outstanding- Diluted		53,657						53,721		52,690						53,341

Stratasys Ltd.

Reconciliation of GAAP to Non-GAAP Forward Looking Guidance

Fiscal Year 2018

(in millions, except per share data)
GAAP net loss	($41) to ($25)
Adjustments
Stock-based compensation expense	$17 to $19
Intangible assets amortization expense	$32 to $34
Reorganization and other related costs	$7 to $9
Tax expense related to Non-GAAP adjustments	($4) to ($5)
Non-GAAP net income	$16 to $27
GAAP loss per share	($0.75) to ($0.46)
Non-GAAP diluted earnings per share	$0.30 to $0.50

EX-99.2

SSYS Q1 2018 Earnings Script

SLIDE 1 & 2: TITLE SLIDES

SPEAKER: Operator

Good day, ladies and gentlemen. Welcome to today’s conference call to discuss Stratasys’ first quarter 2018 financial results.

My name is [INSERT], and I’m your operator for today’s call. [INSERT RELEVANT INSTRUCTIONS].

And now, I’d like to hand the call over to Yonah Lloyd, Vice President of Investor Relations for Stratasys. Mr. Lloyd, please go ahead.

SLIDE 3&4: FLS & NON-GAAP DISCLOSURE

SPEAKER: Yonah Lloyd

Good morning, everyone, and thank you for joining us to discuss our first quarter financial results. On the call with us today are Ilan Levin, CEO, and Lilach Payorski, CFO of Stratasys.

I remind you that access to today's call, including the prepared slide presentation, is available online at the web address provided in our press release.

In addition, a replay of today's call, including access to the slide presentation, will also be available, and can be accessed through the investor section of our website.

Please note that some of the information you will hear during our discussion today will consist of forward-looking statements including, without limitation, those regarding revenue, gross margin, operating expenses, taxes and future business outlook. Actual results or trends could differ materially from our forecast. For more information, please refer to the risk factors discussed in Stratasys' annual report on Form 20-F and report on Form 6-K, along with the associated press release concerning our earnings for the 1^st quarter of 2018. Stratasys assumes no obligation to update any forward-looking statements or information which speak as of their respective dates.

As in previous quarters, today's call will include GAAP and non-GAAP financial measures. The non-GAAP financial measures should be read in combination with our GAAP metrics to evaluate our performance. Certain non-GAAP to GAAP reconciliations are provided in the table contained in our slide presentation and in today’s press release.

Now I would like to turn the call over to our CEO, Ilan Levin. Ilan?

SLIDE 5: OPENING SUMMARY

SPEAKER: Ilan Levin

Thank you Yonah.

Good morning everyone, and thank you for joining today’s call.

We are disappointed with our revenue for the first quarter, primarily driven by underperformance in North America high end system orders, specifically from customers in government and other key verticals such as aerospace and automotive.

Other parts of our business performed in-line with expectations, and we continue to maintain a strong pipeline of opportunities.

As such, we do not believe that our first quarter revenue represents a fundamental change in the demand environment in North America, and we are not modifying the full year guidance we issued earlier this year.

We are addressing the underperformance in North America by working closer with our channel partners in providing vertical market expertise and tools to better convert on our available opportunities.

Despite our revenue results in the period, we continued our positive trend of operational discipline and cash generation.

We remain committed to our investments in long-term initiatives that include advancements in our core FDM and PolyJet technologies, our new metal additive manufacturing platform, advanced composite materials, and software and application development.

We continue to see progress being made in the additive manufacturing adoption cycle as customers move through the qualification and validation stage towards a transition into production.

And we are excited about the recent new products and significant hardware and software upgrades, announced last week at RAPID, that we believe further expand our addressable markets for both prototyping and manufacturing applications.

I will return later in the call to provide you with some details on these important initiatives, as well as other key developments, but first I will turn the call over to our CFO, Lilach Payorski, who will review the details of our financial results.

Lilach?

SLIDE 6&7: FINANCIAL RESULTS SUMMARY

SPEAKER: Lilach Payorski

Thank you, Ilan, and good morning, everyone.

Total revenue in the first quarter was $153.8 million compared to $163.2 million for the same period last year, driven by the previously mentioned reduction in high end system sales in North America, and lower revenues from customers in government and key verticals.

GAAP operating loss for the first quarter was $6.5 million, compared to a loss of $12.6 million for the same period last year.

Non-GAAP operating income for the first quarter was $4.9 million, compared to $4.0 million for the same period last year.

SLIDE 8: REVENUE

Product revenue in the first quarter decreased by 9.7% to $103.9 million, as compared to the same period last year.

Within product revenue, system revenue for the quarter decreased by 20.7% compared to the same period last year, driven by the underperformance in North American high end system sales.

Consumables revenue increased modestly by 1.7% compared to the same period last year, reflecting the impact of the reduction in system sales in North America and the associated point of sale consumable purchases typically made.

Services revenue in the first quarter was $49.9 million, an increase of 3.8% compared to the same period last year.

Within services revenue, customer support revenue, which includes revenue generated mainly by maintenance contracts on our systems, increased by 7.3% compared to the same period last year driven primarily by growth in our installed base of systems and improvement in our service contract attach rate.

SLIDE 9: GROSS MARGIN TRENDS

GAAP gross margin increased to 49.2% for the first quarter, compared to 47.1% for the same period last year.

Non-GAAP gross margin increased to 52.8% for the first quarter, compared to 51.2% for the same period last year.

Non-GAAP product gross margin increased to 61.7%, compared to 57.9% for the same period last year, driven by product mix.

Non-GAAP services gross margin decreased to 34.4%, compared to 35.0% for same period last year.

SLIDE 10: OPERATING EXPENSES & OPERATING INCOME

GAAP operating expenses decreased by 8.3% to $82.1million for the first quarter, as compared to the same period last year.

Non-GAAP operating expenses decreased by 3.9% to $76.3 million for the first quarter as compared to the same period last year, continuing our trend of operational discipline.

SLIDE 11: BALANCE SHEET SUMMARY & CASH FLOW FROM OPERATIONS

The Company generated $27.1 million cash from operations during the first quarter, as compared to $25.7 million of cash generated in the first quarter last year.

We ended the first quarter with $346.5 million in cash and cash equivalents, compared to $328.8 million at the end of the fourth quarter of 2017.

Inventory at the end of the first quarter increased to $120.1 million as compared to $115.7 million at the end of the fourth quarter.

Accounts receivable decreased to $119.8 million, compared to $132.7 million at the end of the fourth quarter with DSO on 12-month trailing revenue at 66.

SLIDE 12: FINANCIAL SUMMARY

To recap:

1.)	We are disappointed with our first quarter revenue, which reflects the impact of a reduction in the sales of high end systems in North America, while other regions performed in-line with expectations.
2.)	We are pleased with our operational performance despite lower than expected revenues, and are committed to our investments in long-term initiatives to expand our addressable markets.

3.)	We continued our trend of positive cash generation from operating activities, and believe we maintain a healthy balance sheet and are well prepared to take advantage of opportunities moving forward.
4.)	We are not modifying the full year guidance that we issued earlier this year.

I would now like to turn the call back over to Ilan.

SLIDE 13 & 14: STRATEGIC OVERVIEW

Thank you, Lilach.

For 30 years Stratasys has been pioneering the development and adoption of 3D printing and additive manufacturing technologies, including the precise, repeatable, and reliable FDM and PolyJet 3D printing platforms, which we believe are the most highly proliferated technologies in the additive manufacturing industry.

Through the development of our leading go-to-market, as well as our deep customer relationships, we believe that we are well positioned to assist our customers as they move through validation towards production applications, which we believe are characterized by long term, sustainable revenue.

As we discussed on our last call, throughout 2018 we are ramping up investment activity to accelerate long term development programs to expand our addressable markets, including our new metal additive manufacturing platform, advanced composite materials, software and application development, as well as further advancements of our FDM and PolyJet technologies.

We believe that our technology roadmap and investment strategy will lead to the development of products that allow our customers to design and manufacture with confidence, and will ensure continued leadership for Stratasys as we drive adoption and growth through deeper customer engagements and partnerships.

Across our areas of focus, we continue to see strong levels of customer interest in our additive manufacturing solutions, including high level engagements with leading OEMs in the aerospace, automotive, healthcare, and consumer goods verticals.

The level of engagement reflects the long-term and deep customer relationships we have cultivated in our target verticals, and we are encouraged that key customers increasingly view the adoption of additive manufacturing technologies as a strategic priority - both for the creation of innovative new products through the use of personal printing platforms that empower the individual designer and engineer, and for the identification and qualification of specific end-use part applications in production environments.

While just over half of our systems are going to existing customers as repeat sales, from a revenue perspective, these repeat customers are spending a higher dollar amount than new customers, as they are increasingly making larger orders, for more advanced systems, and in some cases, multiple units per order.

We believe that these repeat orders represent customers increasing capacity as they accelerate their validation efforts and move into higher usage, production applications.

SLIDE 15: ADOPTION CYCLE

As more of our customers progress from a period of early adoption into one of validation and qualification, we are encouraged by the growing number of companies that are making significant progress in pursuing certifications for specific high value applications.

With the largest installed base of professional and industrial systems globally, and a consistent pace of innovative new product introductions that expand our addressable markets, we continue to benefit from the early adoption of our technology platforms, as our customers explore our technology and develop new applications and use cases.

Encouragingly, we are now seeing future-ready organizations pursue independent testing and qualifications by 3^rd parties, as they seek to apply our technologies to specific, high value applications.

This is a critical stage as customers await certification before expanding adoption, and Stratasys is accelerating this process with solutions developed for specific applications, for example our F900 Aircraft Interiors Certification Solution, and our new GrabCAD Print Jigs and Fixtures software package.

Recent examples of such future-ready customers that have validated our technology for a specific application or set of parts include Phoenix Analysis & Design Technologies and Lockheed Martin, who are producing 3D printed production parts for NASA’s upcoming Orion manned space vehicle, and a growing number of dental labs that rely on the Stratasys J700 Dental 3D Printer for the production of clear aligner molds.

Additionally, we have established a joint venture with SIA Engineering to create a Singapore-based service center targeting the aerospace MRO market, and have entered into an exclusive three-year agreement with Eckhart to develop tooling solutions.

These relationships seed and foster the validation and subsequent transition to production applications, and we believe are indicative of long-term, sustainable growth opportunities.

SLIDE 16: PORTFOLIO UPDATES

Last week at RAPID, and earlier in the year at AMUG, we made multiple exciting new product announcements addressing prototyping and manufacturing applications, and shared new details around our new metal additive manufacturing platform.

Further extending our capabilities and broadening our product lines for the prototyping segment, we showcased several new products that further push the envelope of what’s possible with 3D printed prototypes.

They include several recent enhancements to our PolyJet portfolio that include an upgraded version of our unique multi-material, full-color J750 3D printing platform that adds increased reliability via hardware and software upgrades, and the new J735 multi-material, full-color 3D printer with a smaller build size.

Additionally, GrabCAD Print now includes a new Vivid Colors package for the J750 and J735 featuring over 500,000 color combinations, highly accurate color matching, and advanced clear materials with texture functionality. We also have extended GrabCAD Print support to our Connex3 line of multi-material 3D printers.

To address production applications and enhance our ability to provide our customers with high value solutions that target specific applications, we made the following announcements.

The new F900 Production 3D Printer is the third generation of our flagship FDM solution for rapid tooling and production applications, with enhancements that include MTConnect-readiness for data collection and monitoring, and support for Carbon Fiber Filled Nylon 12 material.

The F900 Production 3D Printer is available in two specialized versions that extend the platform to support a wide range of applications.

The first is the F900 Aircraft Interiors Certification Solution (AICS), delivering the performance and traceability required for producing flight-worthy parts using ULTEM 9085 and achieving the highest FDM repeatability, complete material-and-process traceability, and a robust statistical data set.

The second is the F900 Pro production-grade system, which includes the benefits and value of the AICS product to extend the high repeatability developed for AICS to all industries.

Additionally, we are now increasing the accessibility of our Carbon Fiber Filled Nylon 12 high performance material via a new specialized F380 Production 3D Printer.

This newly configured system provides users with the high strength and stiffness of Stratasys’ FDM Nylon 12CF on a proven platform with soluble supporting material, consistent quality, yield, and throughput of an industrial solution at a competitive price point.

Expanding our production-focused materials offerings, we introduced Antero 800NA, a PEKK-based thermoplastic that allows aerospace and other high-performance vehicle makers to move to additive manufacturing for high-temperature, chemical-exposed parts.

Software is a critical driver of adoption for production applications, and we are pleased to have announced GrabCAD Print Jigs & Fixtures, a new solution package for the GrabCAD Print platform that significantly improves the production of jigs, fixtures, and other manufacturing tooling by embedding application expertise, automating several complicated and time-consuming processing steps, and eliminating the need for multiple software programs.

SLIDE 17: NEW METAL PLATFORM UPDATE

Also at RAPID, we disclosed further details around our metal additive manufacturing technology, including the applications we are targeting with our new metal solution, and for the first time, showed sample parts and described the mechanical properties.

There are many market verticals around the world using complex geometry metal parts made through high volume production processes such as die-casting, powder injection molding, metal injection molding and investment casting.

Often these parts are made using low cost, lightweight alloys such as aluminum, rather than specialty alloys suited to laser and E-beam technologies.

To address this significant market opportunity Stratasys has developed a new approach to metal 3D printing incorporating elements of our proprietary jetting technology, which results in an 80% reduction in cost per part for aluminum components, compared to other additive manufacturing methods.

Using our new technology, we are able to 3D print ‘green-state’ parts using standard metal powders with significantly higher density than existing 3DP solutions. These ‘green-state’ parts can then be handled and post processed using existing industry standard powder metallurgy processes and workflows.

Our solution has been optimized for production rather than prototyping, making it highly efficient and economically viable for a wide range of applications.

Moreover, our unique approach produces final parts with density and isotropy that is significantly higher than existing additive systems, with near identical chemical composition compared to parts created by conventional methods.

We are now working directly with select automotive and industrial machining customers to further align our development programs with their needs and the market requirements.

At RAPID, we showcased multiple aluminum parts we have printed from these customer’s designs, including flat brackets, LED heat sinks, oil pump housing, and car valve adapters.

We look forward to sharing more details as we move throughout the year.

I would now like to turn the call over to our VP of Investor Relations, Yonah Lloyd, who will provide you greater details on our 2018 financial guidance. Yonah?

SLIDE 18: REVENUE & EARNINGS GUIDANCE

SPEAKER: Yonah Lloyd

Thank you, Ilan, and good morning everyone.

Our guidance for 2018 is as follows:

1.	Total revenue in the range of $670 to $700 million, with non-GAAP net income in the range of $16 to $27 million, or $0.30 to $0.50 per diluted share.
2.	GAAP net loss of $41 to $25 million, or ($0.75) to ($0.46) per diluted share.
3.	Non-GAAP operating margin of 4.5% to 6%.
4.	Capital expenditures projected at $40 to $50 million.

Our guidance reflects increased investments in R&D, tools, materials, and additional resources aimed at expanding our addressable markets by accelerating our development efforts for the new metal additive manufacturing platform, further advancements based on our FDM and PolyJet technologies, and specific go-to-market initiatives in order to deepen our customer engagement.

We believe that this ramp up of operating expenses as guided, will provide the basis for long term growth.

Non-GAAP earnings guidance excludes $32 to $34 million of projected amortization of intangible assets; $17 to $19 million of share-based compensation expense; and $7 to $9 million in reorganization and other related costs; and includes $4 to $5 million in tax expenses related to non-GAAP adjustments.

The estimated non-GAAP tax rate for 2018 is impacted by the ongoing non-cash valuation allowance on deferred tax assets we expect to record throughout the year on U.S. losses.

Given the expected ongoing negative impact of not recording a tax benefit on U.S. tax losses on our net income loss, as well as significant quarter to quarter variability in our non-GAAP tax rate, the Company believes non-GAAP operating income would be the best measure of our performance in 2018.

Appropriate reconciliations between GAAP and non-GAAP financial measures are provided in a table at the end of our press release and slide presentation, with itemized detail concerning the non-GAAP financial measures.

Operator, please open the call for questions.

SLIDE 19: Q&A

SPEAKER: Ilan Levin

Thank you for joining today’s call.

We’d like to take this opportunity and invite you to join us at our upcoming analyst and institutional investor day on June 6, at our North American corporate headquarters in Eden Prairie, Minnesota. Please contact our investor relations team for more details.

We look forward to speaking with you again next quarter.

Thank you.

SLIDE 20: FINANCIAL RECONCILIATION TABLES

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