3D Systems Q2 2026 earnings: Cost cuts narrow the adjusted EBITDA loss

3D Systems (NYSE: DDD) reported Q2 2026 revenue of $94.6 million, down 0.3% from $94.8 million a year earlier, and a GAAP diluted loss of $0.09 per share versus income of $0.57 per share. Adjusted EBITDA improved to a loss of $0.8 million as earlier cost reductions lowered expenses, although GAAP gross margin contracted 170 basis points. Healthcare growth offset weaker Industrial revenue.

Core financial results

Reported revenue was nearly unchanged, but revenue excluding software businesses divested in 2025 increased 1.4%. The operating picture also improved: operating expenses declined to $45.1 million from $51.5 million, helping narrow the operating and adjusted EBITDA losses despite lower gross profit.

The year-over-year swing from net income to a net loss does not reflect operating performance alone. Q2 2025 included a $125.7 million disposition gain and an $8.2 million gain on debt extinguishment, while the latest quarter did not have those benefits.

On a basis excluding the software divestitures, prior-year adjusted EBITDA was a loss of $4.7 million, making the comparable improvement $3.9 million.

Business and segment performance

Healthcare Solutions remained the larger segment, with revenue rising 6.8% to $48.1 million from $45.0 million. Growth came primarily from new printer system sales in Med Tech and continued expansion in Personalized Healthcare Services. Med Tech grew more than 20%, while Dental increased 3%.

Industrial Solutions revenue declined 6.7% to $46.5 million from $49.8 million. Excluding divestitures, the decline was 3.7%. The company attributed the contraction to the absence of revenue from a non-core product offering exited last year and lower hardware services revenue. Industrial revenue nevertheless increased 2.4% sequentially, supported by product sales and growth of more than 20% in Aerospace & Defense and Data Center Infrastructure.

Management said Med Tech, Dental, Aerospace & Defense, and Data Center Infrastructure each grew more than 20% during the first half of 2026, though that six-month figure should not be confused with their individual second-quarter growth rates.

Profitability, cash flow, and the balance sheet

GAAP operating expenses fell to $45.1 million from $51.5 million. Research and development expense declined to $10.0 million from $17.4 million, while selling, general and administrative expense increased to $35.1 million from $34.1 million. Excluding software divestitures and other adjustments, non-GAAP operating expense fell to $39.5 million from $44.6 million.

Cash flow figures were provided for the first six months rather than Q2 alone. Net cash used in operating activities improved to $14.1 million for the first half of 2026 from $59.6 million a year earlier. Purchases of property and equipment were $5.9 million.

Total cash was $129.0 million at June 30, including $128.0 million of cash and equivalents and $1.0 million of restricted cash. Liquidity was supported by the issuance of 18.9 million common shares, which generated $53.2 million after offering costs during the quarter. The financing strengthened cash resources but increased the number of shares outstanding.

The company has $3.9 million of debt principal scheduled to mature in Q4 2026, with the remaining $92.0 million due in 2030. Inventory declined to $121.8 million from $127.5 million at the end of 2025.

Printer growth supported core revenue but pressured gross margin

New printer sales accelerated, with double-digit growth in both metal and polymer hardware systems. Product revenue rose approximately 1.9% to $54.8 million, while services revenue declined approximately 3.2% to $39.7 million.

That mix helped generate divestiture-adjusted revenue growth but weighed on profitability. Management attributed the gross-margin contraction to a higher proportion of printer sales and selected pricing effects, partially offset by approximately $2.6 million of tariff refunds. Excluding divestitures, non-GAAP gross margin fell 150 basis points to 36.7%.

The quarter therefore showed opposing trends: hardware demand supported core revenue, but the sales mix reduced gross margin. Most of the adjusted EBITDA improvement came from lower operating expenses and the tariff refunds rather than gross-profit growth.

Q3 2026 guidance

For Q3 2026, 3D Systems expects modest sequential revenue growth but another adjusted EBITDA loss. The revenue range implies growth of approximately 1.5% to 4.7% from Q2, while the projected EBITDA loss is wider than the Q2 result.

The company does not provide corresponding forward-looking GAAP guidance because several reconciling items are difficult to predict.

Management’s perspective

CEO Jeffrey Graves said adoption in the company’s four priority markets is expanding and highlighted the growing role of metal 3D printing and Data Center Infrastructure applications. He also described the additive manufacturing industry as emerging from a multi-year downturn, with recently introduced products gaining customer traction.

Management remains cautious about the global economic environment and tied further improvement to a recovery in capital investment activity. CFO Phyllis Nordstrom said the company is focusing on refreshing its installed base and expanding parts-manufacturing capabilities to pursue better margins and profitability.

Risks investors should monitor

• Gross-margin pressure: A higher mix of printer systems and selected pricing effects reduced GAAP gross margin by 170 basis points, even with $2.6 million of tariff refunds providing an offset.
• Industrial and services weakness: Industrial revenue remained lower year over year, and services revenue declined, limiting the benefit from Healthcare and new printer growth.
• Continuing losses and cash use: Operating performance improved, but the company still reported GAAP and adjusted EBITDA losses and used $14.1 million of operating cash during the first half.
• Capital-spending uncertainty: Management’s outlook depends partly on stronger global manufacturing investment, while it acknowledged that the economic environment remains uncertain.

Summary

3D Systems’ Q2 2026 results showed modest underlying revenue growth and a substantially narrower adjusted EBITDA loss, driven mainly by cost reductions. Healthcare and new printer systems supported demand, but Industrial weakness, lower services revenue, and an unfavorable product mix pressured gross margin. The next points to monitor are whether revenue can reach the Q3 range, whether printer growth translates into better margins, and how quickly the company can move toward positive adjusted EBITDA and operating cash flow.