3D Systems (DDD) 2026年第三季財報電話會議：營收成長 10.9%，利潤率擴張

重點摘要

• 若排除 2025 年剝離的企業軟體業務，第三季調整後營收年增 10.9% 至 9,930 萬美元。
• 3D Systems 的四大戰略市場——醫療科技（MedTech）、牙科、航太與國防，以及資料中心基礎設施——合計年增近 30%，年初至今成長近 25%。
• Non-GAAP 毛利率增加 420 個基點至 35.5%，Non-GAAP 營業費用則下滑近 15% 至 3,610 萬美元。
• 調整後 EBITDA 達到 310 萬美元，較去年同期改善 1,310 萬美元。年初至今調整後 EBITDA 為 440 萬美元。
• 管理階層預估第四季營收為 1 億美元至 1.03 億美元，調整後 EBITDA 介於虧損 200 萬美元至損益兩平之間。
• 管理階層預期醫療保健市場在未來兩到三年內將呈現相對平穩可預測的兩位數成長，而工業領域的成長可能因國防專案與客戶下單時程而較不穩定。

核心財務數據

列印硬體系統與零組件製造各自年增逾 25%。年初至今 Non-GAAP 營業費用減少 3,100 萬美元（即 22%）至 1.12 億美元。

業務與營運表現

醫療保健解決方案受益於牙科與醫療科技（MedTech）的雙重成長。牙科材料銷售額呈現強勁的兩位數成長，主要因隱形牙套出貨量重返長期常態水準，且歐美地區對假牙列印技術的採用率提升。

醫療科技的成長受到骨科植入物應用的帶動，包括脊椎融合器、膝關節與肩關節。以顱部及創傷手術規劃為首的個人化醫療解決方案亦同步拓展。該公司目前正積極擴充鈦金屬植入物與個人化醫療級 PEEK 應用的產能。

在工業解決方案方面，航太與國防以及資料中心基礎設施均取得強勁的兩位數成長。管理階層表示，若排除空軍開發計畫，該季航太與國防營收成長超過 50%，而該市場年初至今的營收則成長逾 30%。

市場需求包含 DMP 350 金屬列印機與 SLA 825 高分子聚合物列印機。半導體製造設備與高效能運算應用亦有所貢獻，客戶於本季持續擴充列印設備產能。

3D Systems 正於科羅拉多州利特爾頓（Littleton）廠區擴建 50,000 平方英尺，以提高金屬零件製造產能。此次擴建將容納用於工業金屬零件的列印機及後處理設備，同時釋放產能以因應持續成長的醫療植入物需求。

該公司強調了金屬製造的兩大成長途徑：直接金屬列印（DMP）與精密脫蠟鑄造積層製造。其核心平台包括 DMP Flex 350 Triple、DMP 500、SLA 825 Dual 及 MJP 300W Plus。

管理階層財務指引

針對 2026 年第四季，管理階層預期：

• 營收介於 1 億美元至 1.03 億美元。
• 調整後 EBITDA 介於虧損 200 萬美元至損益兩平之間。

該展望已納入客戶下單時程的變動、專案相關採購決策，以及列印材料訂單在全年更均勻分布的考量。管理階層亦預期，受到面向消費者的工業市場疲軟影響，第四季傳統硬體銷售的拉升幅度將較為平緩。

受正常季節性因素影響，第四季與第一季的營業費用可能略有增加，但管理階層表示，成本紀律與精實營運架構將維持不變。

風險與觀察重點

• 由於營收取決於專案進度與採購時程，航太與國防業務的季度表現可能較不均衡。
• 對價格敏感的工業市場（包括珠寶及部分一般製造業）出現兩位數下滑，仍是一大營運阻力。
• 管理階層指出，中東衝突以及消費者的通膨壓力抑制了珠寶及其他面向消費者的市場需求。
• 近幾季有兩家醫療保健客戶各占營收至少 10%，存在客戶集中度過高的風險。
• 在部分工業領域商機達到規模化之前，公司必須先行投入產能、原物料及新平台開發所需的資金。
• 董事會正持續物色總裁兼執行長 Jeffrey Graves 博士的接班人選，Graves 博士表示將全力支持過渡期交接工作。

分析師問答重點

管理階層證實，目前正研議推出更多金屬列印平台，尺寸涵蓋 600 公釐至 800 公釐，甚至可能達到米級系統。這些平台已超越概念階段，但最終設計將取決於人工智慧（AI）基礎設施、半導體設備、航太與國防領域中價值最高的應用需求。

該公司已完成先前宣布針對火箭客戶的大型精密脫蠟鑄造訂單。管理階層表示，相關系統已投入運作並正在生產用於太空發射的零組件，為該領域後續需求的預期提供支撐。

管理階層將近期的資本結構調整措施定調為替成長奠定基礎。3D Systems 推出了按市價增發股票（ATM）計畫，並計劃將其 2030 年到期的擔保票據，以現金和普通股搭配 2031 年到期的新無擔保票據進行置換。公司表示，這些措施應能提供更大的資金彈性，以挹注零組件產能、金屬列印平台與戰略市場的拓展。

管理階層預期醫療保健業務的成長將較工業業務更為穩健。AI 基礎設施、航太與國防領域的工業商機雖然龐大，但預計將呈現波浪式湧現，需要充足的資本以迅速調配零組件產能與列印機生產來因應。

法說會完整逐字稿

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完整財報電話會議逐字稿

管理層陳述

Operator

Greetings and welcome to the 3D Systems Third Quarter 2026 Earnings Webcast. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Monica Gould, Investor Relations. Monica, please go ahead.

Monica Gould

Hello and welcome to 3D Systems' Third Quarter 2026 Earnings Conference Call. With me on today's call are Dr. Jeffrey Graves, President and CEO, and Phyllis Nordstrom, Chief Financial Officer. The webcast portion of this call contains a slide presentation that we will refer to during the call. Those following along on the phone who wish to access the slide portion of this presentation may do so on the Investor Relations section of our website.

The following discussion and responses to your questions reflect management's views as of today only and will include forward-looking statements as described on this slide. Actual results may differ materially. Additional information about factors that could potentially impact our financial results is included in our latest press release and our filings with the SEC, including our most recent annual report on Form 10-K and quarterly reports on Form 10-Q. During this call, we will discuss certain non-GAAP financial measures.

In our press release and slides accompanying this webcast, you will find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP measures. With that, I'll turn the call over to our President and CEO, Dr. Jeffrey Graves, for opening remarks.

Jeffrey Graves

Thank you, Monica, and good morning, everyone. Our third quarter showed clear continued progress. Revenue grew at double-digit rates year-over-year, excluding the impact of the enterprise software divestitures we completed in 2025. Gross margins expanded, operating expenses declined significantly, and we again delivered positive Adjusted EBITDA. Phyllis will walk through the financial details with you shortly. What's most encouraging to me is not simply the numbers, but the source of the growth: accelerating penetration of our 4 strategic markets.

These are medical technology, dental, aerospace and defense, and data center infrastructure. Customers in these markets are choosing us for the design flexibility additive manufacturing uniquely provides, together with the part quality, regulatory rigor, and very importantly, the production economics required for true manufacturing at scale. We're winning significant new business on the strength of these capabilities. At the same time, in an increasingly unpredictable global environment, customers in both the United States and Europe are placing greater value on localized supply chains. With established operations in both of these regions, we're well positioned to be a long-term partner wherever they choose to manufacture.

The past 3 years demanded hard priority decisions and disciplined execution. Through our prolonged industry downtrend, we reduced costs while protecting the technology and application investments that matter the most. We continue to do this. We concentrated those investments on markets where additive manufacturing creates meaningful, durable value—the 4 key markets we focus on today.

As the headwinds now begin to recede, the benefits are becoming clear. Revenue is growing, margins are expanding, profitability is strengthening, and most importantly, customer adoption is accelerating. I want to thank our employees around the world. Their commitment has made this progress possible.

Turning to slide 5, let me put the quarter in the context of those 4 key markets: medical technology, dental, aerospace and defense, and data center infrastructure, which includes, by the way, semiconductor equipment, advanced GPU cooling, and energy applications. In MedTech, demand for both standard and personalized orthopedic implants continues to grow, driving both parts revenue and printer sales. We're expanding production capacity to meet it. Titanium remains a central focus, and the quality and economics of our titanium printing are compelling.

An accelerating trend is medical-grade PEEK for personalized bone replacements, a material that combines biocompatibility, bone-like mechanical properties, and radiation transparency for X-rays and cancer treatments. We also continue to see steady growth in our personalized health solutions business, where we work directly with surgeons to plan procedures and deliver custom FDA-approved cutting guides and increasingly custom bone replacements. MedTech continues to deliver solid growth, and with new technologies and improving economics, we expect that to continue.

In dental, material revenue recovered in the third quarter as aligner volumes returned to their longer-term run rate, and adoption of our denture printing technology by labs across the United States and Europe continued to rise. We expect these trends to strengthen as 3D printing becomes the standard manufacturing process for dentures.

In aerospace and defense, revenue grew more than 50% in the quarter, excluding our Air Force development program, driven by printer sales into space launch systems and a range of other defense applications. This is a large and exciting market, although growing exposure to defense program timing may make quarterly results somewhat lumpier as we grow. On a rolling 12-month basis, however, we expect a clear upward trend. Near-term, rocket propulsion applications remain the most compelling opportunities.

In data center infrastructure, semiconductor and high-performance computing revenue grew significantly. Our metal printing technology is already producing components for semiconductor manufacturing equipment and advanced computing systems, and customers added printer capacity in the quarter to support that work. We expect this area to grow and become a material revenue stream for our industrial business over time.

These 4 markets are at the core of our growth strategy and will continue to receive the majority of our investments. Underlying technology also applies to select consumer-facing markets, allowing us to participate opportunistically in them.

Moving on to slide 6, looking ahead, we see 2 important complementary drivers of growth, both centered on the manufacture of metal parts. Our ability to address both of these opportunities with differentiated technologies and deep applications expertise gives us a unique position in the industry. The first of these is the continued expansion of direct metal printing for production applications. As the technology advances, customers can manufacture larger, more complex, and higher-value metal components at scale. For us, the cornerstone is titanium printing, leveraging our deep expertise in printing for the human body.

Those volumes are rising, and the rapid expansion of titanium applications in aerospace has opened entirely new markets. Our quality systems and infrastructure built for human applications are now a powerful advantage as we extend into the industrial markets. The second driver is the growing use of additive manufacturing within investment casting. Here, the opportunity is not to replace an established process, but to make it faster, more flexible, and capable of producing increasingly complex designs.

I'd like to cover each of these in greater detail: what's driving the market, how additive fits into the workflow, and why we believe we're well positioned to capture the growth. So moving on to slide 7.

Investment casting is essential for many high-performance metal components, particularly in aerospace and defense, from rocket propulsion systems and turbine blades to complex structural parts. Industry estimates place the global investment casting market at approximately $20 billion annually, with the U.S. representing a significant share and benefiting from strong aerospace and defense demand. For decades, the casting industry has relied on hard tooling to create molded polymer patterns. Hard tooling is expensive, slow to produce, and creates barriers to design changes once production begins.

Additive manufacturing changes that equation by producing casting patterns directly from digital designs. Customers can avoid tooling costs, dramatically reduce lead times, accelerate design iterations, and manufacture geometries that are difficult or impractical with conventional tools. The transformation of the commercial space industry illustrates what becomes possible when advances in propulsion, reusable launch systems, and modern manufacturing come together.

Over the past decade, launch cadence has increased dramatically, while the cost per kilogram of reaching low Earth orbit has fallen by more than an order of magnitude compared with earlier launch systems. Additive manufacturing has contributed to this progress by enabling complex propulsion components to be developed and produced faster, with fewer parts and greater design freedom. Importantly, when additive manufacturing is used to produce casting patterns, foundries can achieve these benefits while continuing to use the alloys, casting processes, and manufacturing expertise they already trust, minimizing the need to requalify finished components.

Now turning to slide 8. As shown on slide 8, we address the investment casting market with two core printing platforms. Our new SLA 825 Dual serves large-format casting applications, while the MJP 300W Plus provides high-resolution wax patterns for smaller precision industrial and aerospace castings. While our focus today is aerospace and defense, these systems also serve a number of other high-value applications, some of which are actually illustrated on the slide.

Turning to slide 9, let's look more closely at each platform, beginning with the SLA 825 Dual. This is our flagship large-format system with roots that reach back to the invention of 3D printing in the early 1980s. The SLA 825 Dual is designed for large-format cast components. Its scale, precision, speed, and ability to produce lightweight, stable patterns allow customers to create large single-piece designs, reducing assembly times and lead times.

Equally important is the print material and process that we use. Historically, as production volumes rise, the economics at some point favor a transition to injection molding with hard tooling. Through our QuickCast technology, lightweight patterns that are strong and leave virtually no residue during burnout can be printed using up to 50% less resin. That savings meaningfully changes the economics, raising the volume threshold at which hard tooling becomes attractive, thereby favoring 3D printing and the design flexibility that it enables. These factors are rapidly transforming the investment casting industry as new designs and improved manufacturing economics drive higher adoption rates.

Moving to slide 10, our newest MultiJet Printing system is highlighted. While the SLA 825 Dual is ideal for large components, the MJP 300W Plus brings high-resolution wax patterns to smaller precision investment castings, such as those used in smaller turbine engines that are rapidly expanding in use on drone aircraft, long-range munitions, and portable power systems. The high throughput these printers enable delivers excellent economics while retaining the precision and design flexibility inherent in 3D printing.

Because the wax patterns integrate directly into a customer's established lost-wax casting process, technology can be adopted without changing the metal alloys or manufacturing methods they've already qualified and trust. Together, the SLA and MJP platforms position us to participate broadly in the casting market with a strong emphasis on aerospace and defense applications that are growing so rapidly.

Turning to slide 11, let me next turn to direct metal printing, where we see some of our most significant long-term growth opportunities. Across aerospace and defense, energy, semiconductors, and healthcare, customers are moving rapidly to adopt and expand the use of direct metal printed parts. The reasons are straightforward. The technology can now reliably meet the highest standards of quality and performance while reaching the throughput rates required in production.

Parts that previously required multiple processing steps, each with their own scrap, rework, and precision assembly costs, can now often be produced in a single printing operation. Combined with the design flexibility of additive manufacturing, this is becoming a compelling value creator. And with AI dramatically accelerating design iterations, customers can adopt higher-performing, lower-cost designs much more quickly.

With advanced metal printing systems we're now fielding and our application engineering teams, we focused intensely for the last 3 years on aerospace and defense, and on the equipment manufacturers essential to semiconductor chip production. These markets, together with our traditional orthopedic applications, represent outstanding growth opportunities. The investments we've made are now producing clear results with increased shipments of large-frame metal printers and growing parts volume, both of which I'll touch on shortly.

Turning to slide 12. Our metals business has several important sources of differentiation built over many years. We've maintained a consistent, strong focus on metal printing technology, even through the recent industry recession. As a result, we now have systems very well suited to printing metals that are either highly reactive, such as titanium, or extremely difficult to process conventionally, such as nickel-based superalloys for flight systems, copper-nickel alloys for naval applications, and tungsten and other refractory metals that withstand extreme temperatures and stressful environments that are common in advanced energy systems.

This progress requires more than hardware. It required application specialists who developed the print processes needed for high-performance, high-reliability components. We do not simply sell equipment. Our application engineering group works closely with customers to develop and optimize applications and then help transition them into repeatable production workflows. The combination of platforms, materials, application expertise, and strategic partnerships with key customers gives us capabilities that are highly valued and very difficult to replicate, which positions us well as additive manufacturing moves toward scaled production.

Moving to slide 13 for a brief overview of 2 of our key metal platforms, the DMP 350 Triple and the DMP 500. The DMP Flex 350 Triple laser platform provides the productivity, process control, and material flexibility required for many of the most demanding production applications. The larger DMP 500 replicates this capability for larger parts. These systems are renowned for their ability to print the most difficult materials: lightweight, high-strength titanium alloys as well as extreme-performance nickel, copper, and refractory metal alloys. These materials are extremely difficult to process conventionally and therefore derive the highest value from additive manufacturing.

While the printing systems and application expertise provide clear value as customers qualify new components, the remaining barrier to large-scale adoption has been the availability of production parts to bridge the period from qualification to high-volume production. For targeted markets, we now offer this capability, allowing us to move customers smoothly from initial concept demonstration through process qualification and into low-volume production.

As volume demands then grow, we can provide printers and process knowledge for them to continue scaling at the pace they desire or with third-party manufacturers, while preserving the qualified processes and production parameters developed during the initial manufacturing phase. This approach has resonated very well with customers within aerospace and defense and AI infrastructure that value both our technology and our quality systems, which have deep roots in our medical device manufacturing experience.

Taken together, this approach reduces adoption barriers, generates attractive parts revenue, and creates future printer opportunities as customer demand expands. From a financial standpoint, the returns are sufficient to support the ongoing R&D required to maintain a leadership position in metal printing and to create growing value for our investors.

Nowhere is this approach more relevant than in defense. The defense industrial base faces well-documented constraints. As an example, lead times for critical naval castings often run from 12 to 24 months, and production capacity for key munitions, propulsion components, and others remain limited. High-end weapons, high-mix, low-volume production of complex alloy parts is precisely where additive manufacturing excels. It does not require new foundries or long-lead tooling. It can add capacity quickly and effectively.

This same model is highly relevant to semiconductor equipment manufacturing, where supply chain constraints, long qualification cycles, and limited production capacity create significant opportunities. These markets remain central to our long-term industrial growth strategy. In support of these efforts, we continue to work with the U.S. government, both on the development of new metal printing technology and on the application of metal additive manufacturing to next-generation energy and other national security applications.

As I wrap up the section on metals, I want to turn to slide 14. The growth I've just described is already translating into increased demand for production capacity. To expand our capacity for manufacturing metal parts, we recently celebrated the grand opening of our new facility in Littleton, Colorado. Building on the extensive fleet of metal and polymer systems already located there and the quality systems we have in place for our MedTech business, we cut the ribbon on an additional 50,000 square feet that will house printers and post-print processing equipment for metal parts in our key markets.

We'll add print capacity at the rate needed to support growing demand for industrial metal parts. By focusing this new facility on our industrial markets, we'll simultaneously free up capacity for our medical implants, where demand is also growing quickly. We were grateful to the key customers and the local, state, and federal representatives who joined us for this event. It was a terrific day.

Before turning the call over to Phyllis, I'd like to briefly comment on my planned transition. As announced in August, the independent directors of our Board continue to lead the search process for my successor. I remain fully committed to supporting this process while maintaining our operational momentum and positioning the company for long-term success. The strategy we have discussed today remains the right strategy for 3D Systems. We're committed to it, and I remain very optimistic about the company's future.

So moving to slide 24, operator, we're now ready for questions.

Phyllis Nordstrom

Thank you, Jeff, and good morning, everyone. I'll walk through our third quarter financial results, including the progress we made on profitability, and then discuss our recent capital structure actions and fourth quarter outlook.

Let's begin on slide 16. Before reviewing our financial results, I would like to remind you that we completed the divestiture of our legacy enterprise software businesses during 2025. Accordingly, the year-over-year comparisons I'll discuss today are presented on an adjusted basis, excluding the impact of those divestitures, to provide a consistent view of our operating performance across periods.

With that, let's turn to slide 17. Consolidated revenue increased 10.9% year-over-year to $99.3 million. All 4 strategic markets grew in the third quarter, collectively delivering nearly 30% year-over-year growth and nearly 25% growth year-to-date. This performance reflected positive momentum across our product portfolio. In aerospace and defense and data center infrastructure, we continue to see strong demand for our DMP 350 metal printer and our SLA 825 polymer printer. Additionally, parts manufacturing contributed meaningfully to revenue in MedTech and data center infrastructure in the quarter, while higher material sales benefited dental and aerospace and defense.

More broadly, printer hardware systems and parts manufacturing each grew more than 25% year-over-year, helping drive the quarter's double-digit revenue increase. Higher revenue also contributed to improved profitability. Adjusted EBITDA was positive $3.1 million, a significant improvement from the prior-year period, reflecting higher sales volume, favorable pricing, and continued operating discipline.

Moving to slide 18, I'll provide additional detail on our business segments. Healthcare Solutions revenue was $49 million for the third quarter, an increase of 14.4% from the prior-year period. Healthcare Solutions was driven by positive performance across both dental and MedTech. In dental, material sales increased at a strong double-digit rate compared to the prior-year period. MedTech benefited from continued demand for orthopedic implant applications, including spinal cages, knees, and shoulders. Our personalized healthcare solutions, or PHS business, also delivered growth, led by surgical planning solutions in cranial and trauma applications.

Moving to Industrial Solutions, revenue was $50.3 million, up 7.7% from the prior-year period. Within industrial, aerospace and defense, and data center infrastructure both delivered strong double-digit revenue growth. Year-to-date, aerospace and defense, our largest industrial market, increased more than 30% compared with the prior-year period. Revenue strength in these markets more than offset a double-digit decline in price-sensitive markets, including jewelry and certain areas of general manufacturing.

While we continue to selectively pursue opportunities in these areas, our investment priorities remain focused on areas where we have greater differentiation and see stronger potential for profitability. These results reinforce our strategy of focusing our resources on key markets where customers value precision, reliability, and qualified production outcomes. These demanding requirements align closely with our differentiated technology and applications expertise and create meaningful barriers to entry.

We are seeing these benefits in our results. Year-to-date, industrial revenue from our strategic markets grew nearly 50%, reflecting the progress we are making in shifting the business toward higher-value, more differentiated opportunities. We remain encouraged by the long-term potential in these markets while recognizing that the timing of customer investment and program-driven activity can vary from quarter to quarter.

Now turning to slide 19 to review gross margin. Third quarter non-GAAP gross margin was 35.5%, an increase of 420 basis points from the prior-year period. Higher printer parts manufacturing volumes improved cost absorption and operating leverage, while favorable product mix also contributed to higher gross profit. Importantly, the margin expansion reflects stronger operating performance as volumes increased across key areas of the business. The year-over-year comparison also benefited from the absence of certain non-recurring costs recorded in the prior period, including costs associated with the closure of a legacy facility and a one-time regenerative medicine accounting adjustment.

Turning now to slide 20, we remain disciplined in managing our cost structure while investing selectively in the areas that support our strategic priorities. Third quarter non-GAAP operating expenses were $36.1 million, a decrease of nearly 15% from the prior-year period. Year-to-date, non-GAAP operating expenses were $112 million, down $31 million or 22% compared to the prior-year period. Although operating expenses may fluctuate from quarter to quarter based on expense timing, we are seeing the benefits of the actions taken to reduce our operating costs and remain focused on maintaining that discipline as we grow the business.

Moving to slide 21. The combination of higher sales volumes, gross margin expansion, and our lower cost structure drove Adjusted EBITDA to $3.1 million, a $13.1 million improvement from the prior-year period. Year-to-date, Adjusted EBITDA was $4.4 million. This reflects the progress we have made through our prior cost reduction actions, together with higher sales and improved margins across products and markets.

Turning to earnings per share, third quarter non-GAAP diluted loss per share was $0.06, an improvement of $0.02 from the prior-year period. The difference between our GAAP and non-GAAP results reflected several key items, including costs related to a recent legal matter, a product-related asset impairment, and non-operating non-cash foreign currency impacts within APAC.

Now turning to slide 22 for a summary of our balance sheet. We ended the third quarter with $120.5 million in cash and investments, including $91.8 million of cash, cash equivalents and restricted cash, and $28.7 million of investments. At quarter end, we had $96 million of debt. Approximately $3.9 million will mature in the fourth quarter of 2026, with the remaining $92 million classified as long-term debt.

Since quarter end, we have taken 2 important steps to strengthen our balance sheet and enhance our capital structure, better positioning us to support the business and invest in opportunities that can drive profitable growth. First, we launched an at-the-market equity program. The ATM provides us with additional flexibility to access capital markets while maintaining discretion over the timing and execution of potential capital raises.

We also announced our plans to exchange our 2030 secured notes for new unsecured notes due in 2031, together with cash and common stock. Upon closing, we anticipate this new structure will extend our debt maturity, transition us to unsecured debt, and give us greater flexibility in managing liquidity and allocating capital. Together, we believe these actions will enhance our ability to invest in the areas where we see the greatest opportunity, including expanding our parts manufacturing capabilities, continuing to advance our metals portfolio, and accelerating focus on our strategic markets. Additional details on these capital structure initiatives are included in today's filings.

Moving now to slide 23. Turning to our fourth quarter outlook, we expect revenue between $100 million and $103 million, with Adjusted EBITDA between negative $2 million and breakeven. Following a strong third quarter, we expect fourth quarter revenue to remain on a positive trajectory. Our outlook reflects normal variability in customer order timing across several of our strategic markets, where purchasing decisions are often tied to customer programs, R&D priorities, and broader investment cycles. In addition, printer material orders have been spread more evenly throughout the year, resulting in less concentration at year-end than we have historically experienced.

We remain encouraged by the positive trends we see within our markets, while recognizing that the timing and pace of customer orders can vary between quarters. As we continue shifting the business toward these growing areas, we believe we are building a strong foundation for sustainable, profitable growth.

For the full year, we expect our results to reflect meaningful improvement in the underlying profitability of the company. Higher revenue, gross margin expansion, and a substantially lower cost structure have established a more efficient operating foundation. Looking ahead, improved operating performance and greater balance sheet flexibility positions us well to selectively invest in the areas that can support continued growth and improve profitability.

With that, I'll turn the call back to Jeff before we open the line for questions.

Jeffrey Graves

Thank you, Phyllis. To summarize, our focused strategy is producing results. Growth across our strategic markets is strong, operating margins are improving, and Adjusted EBITDA is strengthening. Most importantly, we're seeing increasing evidence that additive manufacturing is moving from prototyping into production across healthcare and industrial applications.

Looking ahead, we'll continue focusing our investments where our technology creates the greatest value, managing costs with discipline, and transitioning growth into stable profitability with sustainable cash generation and long-term shareholder value.

So moving to slide 24, operator, we're now ready for questions.

Operator

[Operator Instructions] Our first question comes from the line of Troy Jensen with Cantor Fitzgerald. Please proceed with your question.

分析師問答

Troy Jensen

Jeff, I missed the Littleton launch, but I want to dive more into the metals. Thank you for the good update this quarter. Looking at your portfolio, I think it's just 2 platforms right now. So I'd be curious if you have a roadmap for much larger formats, and where are you on supportless overhangs and number of lasers? And I guess, to throw 3 questions into 1, can you also talk about post-processing partners and selling more of a solution there?

Jeffrey Graves

Yes, both categories are great questions, Troy. On the additional printer platforms, absolutely. And the decision there is, Troy, I would tell you, they're becoming a little bit more application specific. If you look at it right now, we have the 350 and the 500. And we're in discussions with folks ranging from 600 to 800, obviously a meter size. So we're beyond concept design on all of those sizes, trying to understand what is the right value proposition, what's the best volume and pricing for the components that are going to be produced, and make sure we dial in the size for that.

I think the whole industry, Troy, is going to move from having generic sizes to having sizes that reflect the size of certain market applications because they're growing quickly enough now that you can design printers for specific ecosystems, if you will, like AI infrastructure. You've got the companies that design the chip-making equipment, if you will, the multi-hundred-million-dollar type machines. The market potential for making components in those machines alone would justify its own type of printer, its own size of printer, if you will. Aerospace and defense is the same way. It depends heavily on what size components you're going to make. If you're going to make missile parts that are over a meter in diameter and 2 meters high, for that, the other applications are smaller components that can obviously be done in a smaller footprint.

So it's a long-winded way of saying we do absolutely plan on launching additional platforms. They're all well beyond the concept phase and ready for detailed engineering and then move into manufacturing. We are waiting to see what the highest potential applications are, and those customer discussions are heavily underway right now, which is part of the reason, Troy, quite honestly, we wanted to make sure our balance sheet's in good shape because those all require investments.

Once customers see you're going to have the machines, they want you to be ready to make parts and then ultimately sell them machines. So we've tried to have a logical progression. We have a building now to make parts in that's expanded for industrial. We'll soon have not only the current machines, but larger machines to go in that building, and we'll sell them to people that want to buy parts at first at limited volumes and then ultimately buy those printers for their own application. Those discussions, Troy, are all moving in parallel, both in AI infrastructure, the chip-making equipment folks, and in defense and aerospace. Does that all make sense?

Troy Jensen

Yes, that's great to hear. Thank you. If I could throw in a follow-up just for Phyllis, I think I noticed a second 10% customer in the quarter. I'm just curious if you could touch on that.

Phyllis Nordstrom

Yes, so both of those customers, I think the last couple of quarters have risen to that level. They're both within our healthcare business, supporting two different sides of the healthcare business. Obviously, we don't talk about their names, but two very important customers for us in our key priority markets, and we continue to have great partnerships with both of them.

Jeffrey Graves

And Troy, with the kind of volume discussions that are underway right now for parts and then ultimate printer sales, I would expect the emergence on the industrial side of equivalent-size customers over time. So we clearly have 2 big ones on the healthcare side right now in different parts of healthcare, dental and orthopedics. On the industrial side, I'd be shocked if we didn't have 10% customers in both AI infrastructure and in aerospace and defense.

Troy Jensen

Good to hear. All right. Congrats. Good luck in Q4.

Jeffrey Graves

Thanks so much, Troy.

Operator

Thank you. Our next question comes from the line of Gregory Palm with Craig-Hallum. Please proceed with your question.

Greg Palm

Maybe just to start, in light of the news on the debt exchange, on the surface it looks like the holders got a pretty lucrative deal, so maybe this is a good opportunity for you to sort of flesh out some of the details on why now and why does it make sense and all that.

Jeffrey Graves

So, Greg, do you ever know a case where debt holders don't get a lucrative deal? I think that's their business. But no, I have to compliment them, we have tremendous debt holders. They're great people. They have spent a lot of time understanding our business, and I could not ask for better partners from a debt standpoint. Now, they're in the business obviously to make money, and we are too. So it was a timely time to redo that structure, not only to push it out in time, but to make sure it was the most flexible debt structure we could have.

Because again, my biggest concern right now, Greg, I would tell you, is making sure we have the capital for investing in growth right now because the opportunities are going up by the day. And I think we have good line of sight on the healthcare side, so it's very predictable, both the denture growth and the orthopedic growth in our MedTech business. The potential volatility is on the industrial side. If you look at the progress that additive is making now in metals for both AI infrastructure and for aerospace and defense, it's enormous. And so those markets, when they hit, can be very large, and we want to have the capital available to us and flexible enough to invest for that growth because that's really where the payback comes from.

So yes, you always wish these deals were cheaper and better, but I think this was a very fair exchange. I appreciate our debt holders being willing to do it. The timing was driven by the opportunities we see coming over the horizon now and approaching us pretty quickly for CapEx investment. We've just got to be ready to do that. On the ATM side, that's why it's a flexible instrument. We don't have to use it, but if we have an opportunity and we need the investment, we can make it and capture that growth. Anything to add, Phyllis?

Greg Palm

No, that's helpful. It sounds like you're sort of doing this on the offense. I think it'd be helpful for all of us to understand kind of how you see things playing out over the next 2 years because we haven't really been accustomed to growth here in the recent past. And I know you've returned to growth, but as you look ahead, given the capital structure, given all these opportunities that are out in front of you, the Littleton expansion, what's going on in metals, how do you see that translating into growth over the coming years?

Jeffrey Graves

So there's 2 factors that you've got to weigh against each other, and time will tell the timing on each one. But for our 4 key markets that we're in for growth, again, 2 in healthcare, 2 in industrial, I think the healthcare side is very solid double-digit growth going forward and fairly predictable. It may not be linear, but it's fairly predictable over the next 2 to 3 years.

The industrial side, I think, is going to come in waves because there's so many good applications that are opening up right now. And our customers are going through the procurement process with the federal government on everything from munitions to drones, to flying aircraft, manned aircraft, and on the rocketry side, enormous potential as the demand for space access explodes. So the opportunities are there. The hard thing to predict is timing. If you look at our aerospace and defense, I think the number we put out was 50% growth. Now that may not happen every quarter year-over-year, but it is clearly a market that's growing really fast.

And additive, not only for us, but for others in the metal business, additive is going to have a key role in that because of the economics. They're earning their way in right now. But the added design flexibility they have to change designs... It's an unfortunate thing that the world is so war-prone right now. There's many fights going on all over the place. If you look at the headlines, the weaponry used and the reconnaissance vehicles used, all of that has changed so much in the last couple of years. That wouldn't be nearly as easy without additive manufacturing.

And that's why I think we're positioned really well. So in that environment, you just want to have a fair bit of dry powder because when somebody comes along and says, "Hey, I need 100 of these," or "Hey, I want 100, then I want to buy 3 printers," you've got to have the cash to say, "Yes, I'll put in the capacity, and I'll buy the raw materials to build the printers for you," because when they need it, they need it. And if you're there, it's really sticky business. If you're not there and you missed the window, then you open it up for someone else to come in.

So I love our model right now. We invested through the hard years, especially in metals. I would tell you, I'm really proud of our metal technology. It's built off of titanium and into other materials. And our big SLA system for supporting castings of metals, those two are highly differentiated areas that I think are going to really drive our growth in those 2 industrial markets. So we get really solid growth, double-digit growth, I believe, on the healthcare side. And I think we'll have strong double-digit growth in those markets.

Now, one last comment, and I apologize for going on, but the only thing working against us right now, Greg, are the markets we're exposed to on the industrial side that are more consumer-facing, so things that we've traditionally been pretty big in, like jewelry and service bureaus and stuff. Those guys, #1, they're under pressure from the war in the Middle East, so that hurts that business. The inflationary pressure on consumers in the Western world, at least from buying jewelry, things like that, clearly there's a lot of problems in that industry. We have some exposure to that industry. So that exposure will go down quarter by quarter, year by year as the other industrial markets grow, but it's a headwind for us.

Our printing platforms apply equally well to those markets. So if they're opportunistically growing, it's great for us. If they're shrinking, it's a headwind, but it's now outweighed by the growth in the high-end industrial markets, defense, aerospace, those, because overall the company's growing. Look at the difference though between those markets. The consumer-facing ones are shrinking. The high-reliability ones are growing fast. The net result is modest growth for the whole company, but that will increase over time because the headwinds on the consumer side will go down as we get bigger in the other markets. And that's the way we look at it.

So I'm really pleased. Our cash burn is dramatically reducing as volumes come through and the margins come through on these high-end systems. We will flip to positive operating cash flow and then ultimately support our CapEx investments. We've got to bridge that period, make sure we've got the cash to invest for the growth. So that's what brought this whole timing together. I'm super excited about the opportunities. I feel much better now about our balance sheet that we are poised to exploit those opportunities as they open up ahead of us.

Greg Palm

That covered it. And then I guess last one, and you kind of alluded to this, but you did announce this large-scale order for investment casting on the Q2 call. I was maybe hoping you can just update us on the progress there and maybe the broader opportunity with that customer and others.

Jeffrey Graves

Yes, Greg, that was in the rocketry space. That order is filled and flying. I mean, it was a tremendous opportunity, and that's more to my point about being able to exploit these opportunities. We were able to take an order, ship it within a series of a few months, get the units up running and operational, and today they're making parts that are flying into space. And that's the pace that industry is moving at, and I think we are very well positioned to continue supporting that.

We clearly have a lead in additive manufacturing for rocketry, for castings, and for direct metal printing, I'm very proud of our capability too. It's a smaller opportunity, and we're not participating heavily in that, but we are in the casting arena, which is the big opportunity. And the margin potential there is very nice with the consumables, as you know.

So the order's filled. They're very pleased with the product. I think we're the recognized leaders in the field. And the growth potential there, Greg, as you look at—these are publicly announced numbers—as you look at the planned cadence for rockets going into space, regardless of the customer that's sitting in there, you just look at the total global rocketry launch pace today, it is moving so quickly. So it will move from measured in months to weeks to days to hours over the next several years. And I think we're perfectly positioned for growth in that business.

Greg Palm

Okay. All right. Thanks.

Jeffrey Graves

Thanks, Greg. Thank you.

Operator

[Operator Instructions] Our next question comes from the line of [ Patrick Walravens ] with Needham & Company. Please proceed with your question.

Unknown Speaker

This is Patrick Muth on for Jim Ricchiuti over at Needham. You've typically seen a seasonal pickup in hardware sales in Q4, but it seems like that pattern has been a bit more variable over the last 2 years given macro conditions. Are you guys seeing early signs of normal seasonal strength playing out this year? And if so, which markets or product lines are leading that?

Jeffrey Graves

Yes, Patrick, it has been a consistent trend over many years, probably a little bit dampened last year because of the recession that our industry had. I would expect it will return, but I think over time, Patrick, what's going to happen is there's going to be more leveling of quarter-to-quarter performance. Companies will always have extra capital at the end of the year to spend. But as you look at the markets today, the consumer-facing markets are really tough. I don't think they're going to have an uptick in capital spending, from what I can tell.

The defense-related ones, aerospace, those guys, they've got a lot of capital to spend. Some of it will be seasonal, but remember a lot of those defense programs are tied to the federal budget, which is an October budget. So I think you'll see as aerospace and defense grows, you'll see that Q4 spike spreading out more. Maybe there'll be more into Q3. And with the softness in the consumer side of the business, I think that this year could be more muted. That's why we're being reasonably conservative about our growth projections for Q4. We'll be growing. I don't doubt that we'll be growing. But in terms of the magnitude of that, we just don't want to get out over our skis in predicting it to be more aggressive than what we can see. Hopefully we'll be surprised, but we'll see how that goes.

Unknown Speaker

Okay, great. Thanks for the color on that. And then maybe quickly, how are you guys thinking about OpEx in Q4? You've noted that OpEx has stabilized over the past 2 quarters following the completion of your cost reduction initiatives, but should we expect that level of discipline to hold throughout the rest of Q4, or are there any seasonal factors or year-end investments that can move OpEx up or down from where it's been running recently?

Phyllis Nordstrom

Yes, that's a great question. I would say yes, at the end of the year and early beginning of the following year, we typically in Q4 and Q1 see slightly higher OpEx. I think overall you're going to see the discipline carry through. I think the first-half OpEx spend that we had is pretty indicative of what you'll see for the back half of the year. So that's how I would look at it for 2026 performance.

Jeffrey Graves

Patrick, I want to compliment Phyllis on this call. She's done a really nice job. We have a very lean infrastructure now. There will be fluctuations in cost just due to normal cycles of insurance payments and all the annual kind of stuff that rolls through, but we're built to run lean, and I think that'll continue. Obviously, with volumes, there will be some parts that will scale with that, but we were built to run lean, and we expect more operating leverage going forward.

Unknown Speaker

Okay, great. Thank you guys so much.

Jeffrey Graves

Thanks, Patrick. Give Jim our best.

Operator

Thank you. We have now reached the end of our question and answer session. And with that, I would like to hand the call back over to Dr. Jeffrey Graves for any closing comments.

Jeffrey Graves

Great. Thank you all for joining us on our call today. We look forward to updating you on our progress following the close of the fourth quarter and the fiscal year. Have a wonderful holiday period. Thanks for the call.

Operator

This concludes today's conference. Thank you for participating. You may now disconnect.

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