SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 2020
Commission File Number 001-35751
(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): ☐
On May 14, 2020, Stratasys Ltd. (“we” or “us”) announced our financial results for the first quarter of 2020, ended March 31, 2020. 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 (this “Form 6-K”) and is incorporated herein by reference.
In conjunction with the conference call being held on May 14, 2020 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 slide 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.
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.
|Dated: May 14, 2020||By:||/s/ Lilach Payorski|
|Title:||Chief Financial Officer|
The following exhibits are furnished as part of this Form 6-K:
|99.1||Press release dated May 14, 2020, announcing the financial results of Stratasys Ltd. for the quarter ended March 31, 2020|
|99.2||Script for conference call of Stratasys Ltd. discussing quarterly financial results, held on May 14, 2020|
|99.3||Slide presentation with additional information for the foregoing conference call|
STRATASYS RELEASES FIRST QUARTER 2020 FINANCIAL RESULTS
First Quarter Revenue of $132.9 million
First Quarter GAAP net loss of $21.7 million, or ($0.40) per diluted share, and non-GAAP net loss of $10.6 million, or ($0.19) per diluted share
Generated $11.3 million of cash from operations - $325.5 million net cash position with no debt
Company withdrawing full year 2020 guidance due to economic uncertainty caused by COVID-19
Minneapolis & Rehovot, Israel, May 14, 2020 — Stratasys Ltd. (NASDAQ: SSYS) announced financial results for the first quarter of 2020.
Q1 2020 Financial Results Summary:
Revenue for the first quarter of 2020 was $132.9 million, compared to $155.3 million for the same period last year. The 14.4% reduction was driven primarily by the adverse impact of COVID-19 on the company’s customers throughout the industries into which the company sells its products and services.
|●||GAAP gross margin was 45.0% for the quarter, compared to 49.2% for the same period last year.|
|●||Non-GAAP gross margin was 48.4% for the quarter, compared to 52.0% for the same period last year.|
|○||Gross margin decline is due primarily to the lower proportion of hardware and consumables out of the total revenue mix due to the COVID-19 crisis, not to discounting or material ASP reductions. The company strongly believes that gross margins will return to their recent levels as the economy recovers.|
|●||GAAP operating loss for the quarter was $19.9 million, compared to an operating loss of $3.3 million for the same period last year.|
|●||Non-GAAP operating loss for the quarter was $8.4 million, compared to non-GAAP operating income of $6.8 million for the same period last year.|
|●||Non-GAAP EBITDA was ($4.0) million for the quarter, compared to $15.8 million for the same period last year.|
|●||GAAP net loss for the quarter was $21.7 million, or ($0.40) per diluted share, compared to a net loss of $2.3 million, or ($0.04) per diluted share, for the same period last year.|
|●||Non-GAAP net loss for the quarter was $10.6 million, or ($0.19) per diluted share, compared to net income of $5.7 million, or $0.10 per diluted share, for the same period last year.|
|●||The Company generated $11.3 million of cash from operations during the first quarter and ended the period with $325.5 million in cash, cash equivalents and short-term deposits. The Company has no debt.|
“With over 30 years of experience leading the 3D Printing industry that we helped found, Stratasys was well positioned to mobilize what we believe is the largest additive manufacturing network in the world, in order to assist in the fight against COVID-19,” said Yoav Zeif, Chief Executive Officer of Stratasys. “We leveraged our application expertise, our channel and partner network and our corporate-wide resources to help get a variety of printed parts to the global medical community. We are well-prepared to manage the downturn with a strong balance sheet and focus on cost control and cash generation. We have over $325 million in cash and equivalents and no debt. Our engagement level with our customers remains high and the demand for our systems is strong. It’s clear that this crisis has helped generate significant awareness that 3D printing is becoming essential for accelerating and improving design, speeding up time to market and production, and creating less dependent and more resilient global supply chains, including localized digital inventory and distributed manufacturing.”
In response to COVID-19, the company has taken decisive actions to ensure employee safety, preserve liquidity, maintain business continuity, mitigate costs and support the global healthcare community to combat the pandemic. These temporary actions include:
|●||Initiated travel restriction policies, instituted work-from-home for most employees, implemented comprehensive safety protocols for all offices.|
|●||Instituted non-essential hiring freeze, effectively reduced all employees to a 4-day work week, adjusted our cost base and production plan.|
|●||Continued to invest in our new product development that we believe will be the foundation of growth for many years to come.|
|●||Worked with our global network of partners and customers to facilitate the printing of hundreds of thousands of components such as face shields, testing swabs and ventilator tubes to the global medical community.|
The company is withdrawing its 2020 financial guidance for revenue, GAAP and non-GAAP net income and EPS, non-GAAP operating margins and capital expenditures due to the high level of economic uncertainty and disruption caused by COVID-19.
Stratasys Ltd. Q1 2020 Conference Call Details
The Company plans to hold the conference call to discuss its first quarter 2020 financial results on Thursday, May 14, 2020 at 8:30 a.m. (ET).
The investor conference call will be available via live webcast on the Stratasys Website at investors.stratasys.com; or directly at the following web address:
To participate by telephone, the U.S. toll-free number is 877-407-0619 and the international dial-in is +1-412-902-1012. Investors are advised to dial into the call at least ten minutes prior to the call to register. The webcast will be available for 6 months at investors.stratasys.com, or by accessing the above-provided web address.
Stratasys (Nasdaq: SSYS) is a global leader in additive manufacturing or 3D printing technology and is the manufacturer of FDM®, PolyJet™, and stereolithography 3D printers. The company’s technologies are used to create prototypes, manufacturing tools, and production parts for industries, including aerospace, automotive, healthcare, consumer products and education. For more than 30 years, Stratasys products have helped manufacturers reduce product-development time, cost, and time-to-market, as well as reduce or eliminate tooling costs and improve product quality. The Stratasys 3D printing ecosystem of solutions and expertise includes 3D printers, materials, software, expert services, and on-demand parts production.
To learn more about Stratasys, visit www.stratasys.com, the Stratasys blog, Twitter, LinkedIn, or Facebook. Stratasys reserves the right to utilize any of the foregoing social media platforms, including the company's websites, to share material, non-public information pursuant to the SEC's Regulation FD. To the extent necessary and mandated by applicable law, Stratasys will also include such information in its public disclosure filings.
Stratasys is a registered trademark 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 (or withdrawal of guidance) concerning its expected results for 2020, 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 our success at introducing new or improved products and solutions that gain market share; the degree of growth of the 3D printing market generally; the duration of the global COVID-19 pandemic, which, if extensive, may continue to impact, in a material adverse manner, our operations, financial position and cash flows, and those of our customers and suppliers; the impact of potential shifts in the prices or margins of the products that we sell or services that we provide, including due to a shift towards lower-margin products or services; the impact of competition and new technologies; potential further charges against earnings that we could be required to take due to impairment of additional goodwill or other intangible assets; to the extent of our success at successfully consummating acquisitions or investments in new businesses, technologies, products or services; potential changes in our management and board of directors; global market, political and economic conditions, and in the countries in which we operate in particular (including risks related to the impact of coronavirus on our operations, supply chain, liquidity, cash flow and customer orders; costs and potential liability relating to litigation and regulatory proceedings; risks related to infringement of our intellectual property rights by others or infringement of others' intellectual property rights by us; the extent of our success at maintaining our liquidity and financing our operations and capital needs; the impact of tax regulations on our results of operations and financial condition; 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, 2019 (the “2019 Annual Report”), which we filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2020. Readers are urged to carefully review and consider the various disclosures made throughout our 2019 Annual Report and the Report of Foreign Private Issuer on Form 6-K that attaches Stratasys’ unaudited, condensed consolidated financial statements and its review of its results of operations and financial condition, for the quarterly period ended March 31, 2020, which we are furnishing 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 on an ongoing basis after (i) excluding mergers, acquisitions and divestments related expense or gains and reorganization-related charges or gains, and (ii) 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, and the corresponding tax effect of those items. 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
Vice President - Investor Relations
Consolidated Balance Sheets
|(in thousands, except share data)|
|March 31,||December 31,|
|Cash and cash equivalents||$||297,177||$||293,484|
|Accounts receivable, net||115,093||132,558|
|Other current assets||25,424||29,659|
|Total current assets||645,832||659,072|
|Property, plant and equipment, net||191,534||189,706|
|Other intangible assets, net||81,523||87,328|
|Operating lease right-of-use assets||19,887||20,936|
|Other non-current assets||35,259||38,819|
|Total non-current assets||713,612||722,447|
|LIABILITIES AND EQUITY|
|Accrued expenses and other current liabilities||33,750||28,528|
|Accrued compensation and related benefits||36,600||34,013|
|Operating lease liabilities - short term||9,254||9,292|
|Total current liabilities||165,146||159,919|
|Deferred revenues - long-term||14,463||16,039|
|Operating lease liabilities - long term||11,057||12,445|
|Other non-current liabilities||28,988||35,343|
|Total non-current liabilities||54,508||63,827|
|Redeemable non-controlling interests||537||622|
|Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands shares; 54,799 thousands shares and 54,441 thousands shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively||151||150|
|Additional paid-in capital||2,711,828||2,706,892|
|Accumulated other comprehensive loss||(8,848||)||(7,716||)|
|Total liabilities and equity||$||1,359,444||$||1,381,519|
Consolidated Statements of Operations
|(in thousands, except per share data)|
|Three Months Ended March 31,|
|Cost of sales|
|Research and development, net||24,194||22,574|
|Selling, general and administrative||55,576||57,154|
|Financial income (expense), net||(829||)||753|
|Loss before income taxes||(20,729||)||(2,518||)|
|Income tax expenses||221||1,218|
|Share in profits (losses) of associated companies||(838||)||1,423|
|Net loss attributable to non-controlling interests||(85||)||(43||)|
|Net loss attributable to Stratasys Ltd.||$||(21,703||)||$||(2,270||)|
|Net loss per ordinary share attributable to Stratasys Ltd.|
|Three Months Ended March 31,|
|U.S. dollars and shares in thousands (except per share amounts)|
|Gross profit (1)||$||59,870||$||4,414||$||64,284||$||76,457||$||4,252||$||80,709|
|Operating income (loss) (1,2)||$||(19,900||)||$||11,491||$||(8,409||)||$||(3,271||)||$||10,075||$||6,804|
|Net income (loss) attributable to Stratasys Ltd. (1,2,3)||$||(21,703||)||$||11,137||$||(10,566||)||$||(2,270||)||$||7,927||$||5,657|
|Net income (loss) per diluted share attributable to Stratasys Ltd. (4)||$||(0.40||)||$||0.21||$||(0.19||)||$||(0.04||)||$||0.14||$||0.10|
|(1)||Acquired intangible assets amortization expense||4,065||3,898|
|Non-cash stock-based compensation expense||402||354|
|Reorganization and other related costs||(53||)||-|
|(2)||Acquired intangible assets amortization expense||2,142||1,889|
|Non-cash stock-based compensation expense||4,503||3,875|
|Reorganization and other related costs||31||59|
|Merger and acquisition and other expense||401||-|
|(3)||Corresponding tax effect||(431||)||(544||)|
|Gain from equity method divestment, related writes-offs and amortization||77||(1,604||)|
|(4)||Weighted average number of ordinary shares outstanding- Diluted||54,544||54,544||53,966||54,477|
|SSYS Q1 2020 Earnings Script + Corresponding Slide Reference|
SLIDE 1: TITLE
Good day, ladies and gentlemen. Welcome to todays conference call to discuss Stratasys first quarter 2020 financial results.
My name is [ ], and Im your operator for todays call.
And now, Id like to hand the call over to Yonah Lloyd, Vice President of Investor Relations for Stratasys. Mr. Lloyd, please go ahead.
SLIDE 2: CALL DETAILS & PARTICIPANTS
SPEAKER: Yonah Lloyd
Good morning, everyone, and thank you for joining us to discuss our 2020 first quarter financial results. On the call with us today are our CEO, Yoav Zeif and our CFO, Lilach Payorski.
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 relations section of our website.
SLIDE 3: FORWARD-LOOKING STATEMENT
Please note that some of the information you will hear during our discussion today will consist of forward-looking statements including, without limitation, those regarding our expectations as to our future revenue, gross margin, operating expenses, taxes and other future financial performance, and our expectations for our business outlook. All statements that speak to future performance, events, expectations or results are forward-looking statements. Actual results or trends could differ materially from our forecast. For risks that could cause actual results to be materially different from those set forth in forward-looking statements, please refer to the risk factors discussed or referenced in (a) Stratasys' annual report on Form 20-F for the 2019 year, as well as in (b), our reports on Form 6-K that we are furnishing to the SEC today, including (i) the related press release concerning our earnings for the first quarter of 2020, and (ii) our Operating and Financial Review and Prospects, which are attached as exhibits to those reports on Form 6-K. Stratasys assumes no obligation to update any forward-looking statements or information which speak as of their respective dates.
SLIDE 4: NON-GAAP DISCLOSURE
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 todays press release.
Now I would like to turn the call over to our CEO, Yoav Zeif, Yoav?
SLIDE 5: CEO OPENING REMARKS
SPEAKER: Yoav Zeif
Thank you Yonah.
Good morning everyone and thank you for joining todays call.
First and foremost, I hope that you and your families are healthy and safe. We are all experiencing an unprecedented global pandemic. Our thoughts go out to those that have been impacted, and we'd like to extend our deepest gratitude to the many heroes that are working hard to keep people safe during this difficult time.
SLIDE 6: GENERAL BUSINESS REVIEW
As many of you have learned, 3D Printing has played an important, even critical role during this crisis, helping the medical community maintain a steady supply of personal protective equipment, testing swabs and more. I could not be prouder of the Stratasys team and how we have responded to the situation. Our top priority is the well-being of our most valuable asset, our employees worldwide. We began an ongoing communications channel here as soon as the news began trickling out. As early as February 3rd we sent a company-wide email regarding travel restrictions and have tried to be ahead of the curve wherever possible. We implemented work-from-home options early, ensured that all IT needs would be met for remote activity, and set up an intranet for real-time updates and FAQs. Stratasys operated as an essential business in all key US locations. Our regional HR teams have been providing round-the-clock support. And we have increased the frequency of our management updates, across all corporate and regional teams, with a weekly review of practices and procedures to meet the current specific challenges. I want to recognize the efforts of the entire Stratasys family those who have made a swift and effective adjustment to working remotely to support our business, as well as those who continued coming into the offices, the labs and production facilities, working under social distancing and safety conditions to keep our production plants open and our products shipping. Our people have demonstrated relentless passion to keep our business strong and active - on behalf of the leadership team, we greatly appreciate your extraordinary resilience at this challenging time.
On to the business. We are committed to transparently sharing what we are seeing to the extent possible. The unpredictability of so many factors at play, on a global scale, has created an atmosphere of uncertainty on many levels. We will lay out the ways we are being both proactive and adapting as needed, while staying focused on maintaining our business continuity and coming out of this pandemic stronger and poised for growth. We do believe that the fog is slowly lifting and that as things stabilize our visibility will improve in the coming months.
Let me start by saying that our business is healthy. We believe that we are well-prepared to manage the current downturn with a strong balance sheet, while focusing on cost control and cash generation. We have over $325 million in cash and equivalents and no debt. Our engagement level with our customers remains high and the demand for our systems is strong.
Unfortunately, due to COVID-19 our business in Asia was already affected earlier in the quarter, followed by Europe and then the US. As events were unfolding, we recognized how our technology can play a major role to support the healthcare community and we responded immediately. Id like to share some of what we have experienced including actions we took to help fight the pandemic, the measures we are taking to address the business operationally, and how we see the market playing out. In fact, as we will soon discuss, in some ways we may emerge from this situation in an even better position for the long-term than before.
SLIDE 7: RESPONSE TO COVID-19
With over 30 years of experience leading the 3D Printing industry that we helped found, Stratasys was well positioned to mobilize what we believe is the largest additive manufacturing network in the world, in order to assist in the fight against COVID-19. We leveraged our application expertise, our channel and partner network and our corporate-wide resources to help get a variety of printed parts to the global medical community.
SLIDE 8: COVID-19 - OEM COALITION
Initially, in consultation with customers like Medtronic and the Mayo Clinic, we identified face shields as the first application and fastest way to match what was desperately needed with what could be produced. We built a coalition of over 100 companies, including Medtronic, Boeing and Raytheon, that agreed to use their Stratasys systems and others for this effort. To-date, over 100,000 shields and related items have been delivered. We connected most of them via the cloud using our new GrabCAD Shop work management software. Other customers of ours responded as well, such as Schlumberger, General Atomics and Bayer. It has been amazing to watch these multi-national OEMs pivot so quickly to meet the need, highlighting a key benefit of 3D Printing over conventional methods the versatility to instantly go from making air ducts or tail-lights to PPE and ventilator tubes.
SLIDE 9: COVID-19 - PARIS HOSPITAL
In Paris, AP-HP, the largest hospital system in Europe, bought, installed and began running 60 of our FDM printers - literally 48 hours from ordering to making their first shield. This provides them with a rapid-response system to address multiple protective equipment and medical device needs, as well as better control over their supply of 3D-printable parts.
SLIDE 10: COVID-19 - COVENT CHALLENGE
In the US we have been hosting the CoVent-19 Challenge in our GrabCAD community, through the auspices of a team of anesthesiology resident physicians from Massachusetts General Hospital. We have already received over 200 entries from more than two dozen countries around the world. The goal is to design a rapidly deployable, low-cost mechanical ventilator, and Stratasys applications engineers are helping seven finalist teams develop working prototypes in our labs this month.
SLIDE 11: COVID-19 - ORIGIN SWABS COLLABORATION
Additionally, we recently announced an agreement with Origin, a San Francisco additive manufacturing company, to deliver to healthcare providers and testing centers up to 1.3 million testing swabs every week. Weve already facilitated orders for a few hundred thousand units.
Here in Israel the government implemented a robotic COVID-19 testing system to conduct up to 3000 tests per day. Before the program could launch, the system sustained irreversible damage to its fluid containers, and it would have taken weeks or longer to get the exact precision and replacement parts from the vendor in the Far East. Using our PolyJet technology with Bio-compatible materials we were able to quickly print these parts so that the testing could continue.
And globally, in order to address the unique challenges of providing support at this time, for certain printers such as our new J55, our service teams have been enhancing their tools with videos and remote device management systems in order to provide better digital and real-time support for installation and troubleshooting.
SLIDE 12: COVID-19 - 3D PRINTING VALUE PROPOSITION
These are just a few examples of what is truly an incredible display of commitment across a worldwide network of makers, led by Stratasys and peer companies throughout the entire additive manufacturing industry, to combat COVID-19. We have no doubt that all of these efforts are showcasing our industry in a positive light, educating the market and significantly increasing awareness of the many value propositions of additive. As a reminder, some of those key benefits include greater freedom of design, speed and cost-efficiency of product iteration and the flexibility to produce a wide range of products from a single system. Only 3D Printing can provide localized production in proximity to the end market through digital inventory, adjust production flow on the fly for factory jigs and fixtures, and as demonstrated during this crisis - help alleviate the problem of a supply chain crunch. We believe that as a result of the way our industry has stepped up during this time, more and more companies and governments will reassess their supply chains and implement decisions that drive increased demand for 3D Printing as a strategic imperative, leading to incremental business opportunities once we emerge from the current situation.
SLIDE 13: COVID-19 - MITIGATION MEASURES
The decline in Q1 sales and the softness we are seeing now in Q2 are clearly due to a meaningful portion of our customer base being effectively shut down from a purchasing and consumption perspective. As a reminder, our revenue cadence tends to be back-end loaded, with a significant portion of business coming in the final few weeks of the quarter, so the impact on our results was more notable. Furthermore, the unusually low 48.4% margins was not due to special discounts or material ASP reductions, rather it is based on the lower proportion of hardware and consumables out of the total revenue mix. We strongly believe that margins will come back into our usual range in the low 50s percent when the macro environment recovers.
Meanwhile, to help mitigate the impact we began to implement cost-control measures at the end of February and continue to closely manage them. All employees were effectively reduced to a 4-day work-week last month, weve instituted a non-essential hiring freeze and weve adjusted our cost base and production plan accordingly. As a reminder, in 2019 we built inventory in both raw materials and finished goods to help us meet demand in a more efficient way and prepare for our new product launches. While it reduced our operational cash generation last year, it proved to be an even wiser move than anticipated, as we have more finished goods now that are located in their respective regions. While we are facing some minimal supply issues for our new products, we are less exposed for our existing ones. Additionally, our plants are operational, as we continue production to secure our inventory levels to meet demand. And yet, even though the business environment right now is slow, we are encouraged by the discussions we are having and the opportunities that will come once the situation passes.
SLIDES 14 & 15: J55 LAUNCH EVENT
As an example of the high level of interest, two weeks ago many of you attended our digital launch event featuring the new PolyJet J55, an exciting and highly innovative system that brings most of the features of our premium PolyJet technology right into the office, in a quiet, yet powerful new and patented turntable format. Thousands of people attended the event, including many Fortune 500 companies, a strong indication of interest.
Our new product development plans are continuing, and to-date we have not reduced our spending for these programs. We had originally planned to launch new products in the back half of this year, primarily in Q4. Due to the current situation it is clear that the return on the investment of marketing, trade shows, travel and other expenses needed to launch would be severely limited in a tempered spending environment. In order to maximize the impact, and to avoid any potential supply chain issues, we believe it makes more sense to wait until the first half of 2021. We are excited about these additions to our product and technology portfolio and look forward to sharing more at the appropriate time.
I would like to now turn the call over to our CFO, Lilach Payorski, who will review the details of our financial results. Lilach?
SLIDE 16: CFO REMARKS
SPEAKER: Lilach Payorski
Thank you, Yoav, and good morning, everyone.
SLIDE 17: FINANCIAL RESULTS SUMMARY
Total revenue in the first quarter was $132.9 million compared to $155.3 million for the same period last year. On a constant currency basis, total revenue declined 13.9%.
GAAP operating loss for the quarter was $19.9 million, compared to an operating loss of $3.3 million for the same period last year.
Non-GAAP operating loss for the quarter was $8.4 million, compared to operating income of $6.8 million for the same period last year.
GAAP net loss for the quarter was $21.7 million, or ($0.40) per diluted share, compared to a net loss of $2.3 million, or ($0.04) per diluted share, for the same period last year.
Non-GAAP net loss for the quarter was $10.6 million, or ($0.19) per diluted share, compared to Non-GAAP net income of $5.7 million, or $0.10 per diluted share reported for the same period last year.
SLIDE 18: REVENUE
Product revenue in the first quarter was $83.2 million, a decrease of 20.9% compared to the same period last year, or 20.3% on a constant currency basis.
Within product revenue, system revenue decreased 39.5%, compared to the same period last year, and decreased 39.2% on a constant currency basis.
Consumables revenue decreased by 5.8% compared to the same period last year and decreased 5.1% on a constant currency basis.
Services revenue was $49.7 million, a decrease of 0.9% compared to the same period last year and decreased 0.6% on a constant currency basis.
Within services revenue, customer support revenue increased by 2.2% compared to the same period last year and increased 2.9% on a constant currency basis.
SLIDE 19: GROSS MARGINS
GAAP gross margin was 45.0% for the quarter, compared to 49.2% for the same period last year.
Non-GAAP gross margin was 48.4% for the quarter, compared to 52.0% for the same period last year. The decline in gross margin is due primarily to the lower proportion of hardware and consumables out of the total revenue mix. We are confident that our gross margins will return to their usual range once the situation passes.
SLIDE 20: OPERATING EXPENSES
GAAP operating expenses was $79.8 million, relatively flat compared to the same period last year.
Non-GAAP operating expenses decreased by 1.6% to $72.7 million for the quarter as compared to the same period last year, driven by cost-cutting measures in SG&A. Please note that R&D spending this quarter was higher than Q1 of last year, as we remain committed to our long-term strategy and we continue to invest in developing new products that we believe will meaningfully expand our addressable markets.
SLIDE 21: BALANCE SHEET SUMMARY & CASH FLOW FROM OPERATIONS
The Company generated $11.3 million of cash from operations during the first quarter, as compared to $4.6 million of cash generated in the same quarter last year.
We ended the quarter with $325.5 million in cash, cash equivalents and short-term deposits, compared to $321.8 million at the end of the fourth quarter of 2019. We believe that we are well-prepared to manage the COVID-19 situation with a strong balance sheet and no debt, while focusing on cost-control and cash generation.
The company is withdrawing its 2020 financial guidance for revenue, GAAP and non-GAAP net income and EPS, non-GAAP operating margins and capital expenditures due to the high level of economic uncertainty and disruption caused by COVID-19.
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.
Id like to turn the call back to Yoav for closing remarks, Yoav?
SLIDE 22: CEO CLOSING REMARKS
SPEAKER: Yoav Zeif
Thank you, Lilach.
Our communication with the channels and key customers remains highly active, and we have continued to do business during this time, but with the US and other markets still effectively closed, we have little indication regarding the pace of recovery. Therefore, we believe that there is too much uncertainty at this point to provide a reasonable estimate of the full year financial impact related to COVID-19. Directionally speaking, we expect that many if not most of our customers will continue to keep their spending to a minimum in Q2, and given that there will be a full quarters worth of COVID-19 impact we currently expect a sequential decline of 5%-10%. As for how things look as we emerge and begin to recover, its clear that this crisis has helped generate significant awareness that 3D printing is becoming essential for accelerating and improving design, speeding up time to market and production, and creating less dependent and more resilient global supply chains, including localized digital inventory and distributed manufacturing. Weve heard first-hand from our customers that executives are asking their engineering teams more questions about what 3D printing can do for them. This is important because optimizing value from additive manufacturing is a strategic exercise, and Stratasys is particularly suited to play the role of strategic additive partner for our customers. If economic recovery begins to kick in during H2 we would expect to see a gradual improvement, and we could see a return to sequential growth in the back half of the year. Additionally, we believe that we will be able to capitalize on the improved perspective of many businesses and governments, who, because of this crisis, are recognizing the weak links in their current production flow that we proved can be addressed by incorporating additive manufacturing. Meanwhile, we are being proactive in managing our performance during this challenging time. We built inventory last year to improve efficiencies and limit disruption. We've reprioritized spending to ensure adequate resources to address both COVID-19-related items and those critical for strategic growth. And we continue to monitor the industry for opportunities. Our agile, high-performing team is helping us persevere through it and is simultaneously preparing to seize upon opportunities to support an exciting growth period as we all recover from the current situation.
As part of my first 100 days as CEO, I have been directing a deep-dive diagnostic and strategic review of the company. Later in the year I plan to share a more extensive view of how Stratasys will look as we lead our industry forward with strong and sustainable growth for many years to come.
SLIDE 23: THANK YOU - Q&A
SPEAKER: Yonah Lloyd
Operator, please open the call for questions.
SPEAKER: Yoav Zeif
Thank you for joining us, stay safe and healthy, looking forward to updating you again next quarter.
SLIDE 24: FINANCIAL RECONCILIATION TABLES