A securities class action has been filed against 3D Systems Corporation (DDD) on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired 3D Systems securities between August 13, 2024 through May 12, 2025. This case has been filed in the USDC – DE.
3D Systems provides 3D printing and digital manufacturing solutions in North and South America, Europe, the Middle East, Africa, the Asia Pacific, and Oceania. The Company earns revenue from the sale of products and services through its two operating segments: Healthcare Solutions and Industrial Solutions. The Healthcare Solutions segment includes dental, medical devices, personalized health services, and regenerative medicine (the “Regenerative Medicine Program”).
The Regenerative Medicine Program focuses on “the use of additive manufacturing for human organ transplantation.” Since 2018, 3D Systems has partnered with the biotechnology company United Therapeutics Corporation (“United”) “with a long-term goal of developing the capability to 3D print lungs that will allow patients with end-stage lung disease to receive transplants that will enable them to enjoy long and active lives” (the “United Partnership”). The terms of the United Partnership include specific “milestone criteria”-i.e., requirements that must be met for a stage in a development process to be considered completed. In late 2024, 3D Systems updated the United Partnership’s milestone criteria in response to changes in testing methodology.
The Company considers milestone criteria (and any updates thereto) when accounting for recognized revenue from the United Partnership. Specifically, the Company earns milestone payments based upon the achievement of agreed-upon contract objectives (i.e. milestones). Because these payments are contingent on future events, they generally represent a form of variable consideration. Under Accounting Standards Codification 606-10-32-5, the revenue recognition standard-a uniform framework for recognizing revenue from contracts with customers-requires an entity to estimate the amount of variable consideration to which it will be entitled under a contract. Accordingly, as the United Partnership milestone criteria are updated, the Company must also update its estimates of the timing and probability that it will receive milestone payments when accounting for recognized revenue.
Over the past several years, reduced customer spending has resulted in weakened sales across the 3D printing industry. Nonetheless, 3D Systems has consistently maintained that, “despite a challenging operating environment,” it “remains optimistic about the future” given its “sequential recovery and continued momentum in [its] robust customer pipeline.” Further, the Company has touted that “with its new products now gaining traction in the market, [its] focus is increasingly centered on driving gross margin expansion and operating expense improvements in the face of continuing uncertainty in the global markets.”
In March 2025, 3D Systems released its full-year 2025 guidance. Among other items, the Company projected “revenue within the range of $420 million to $435 million, representing essentially flat to modest growth,” “[n]on-GAAP Gross Profit Margin within the range of 37% to 39%,” “[n]on-GAAP Operating Expense within the range of $200 million to $220 million,” and “adjusted EBITDA to be break even or better in Q4 2025.”
The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) 3D Systems had understated the impact of weakened customer spending on the Company’s business, while overstating its resilience in challenging industry conditions; (ii) in addition, the updated milestone criteria in the United Partnership would negatively impact the Company’s Regenerative Medicine Program revenue; and (iii) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On March 26, 2025, 3D Systems issued a press release announcing its financial results for the fourth quarter (“Q4”) and full-year 2024. Among other items, 3D Systems reported Q4 non-GAAP earnings-per-share of -$0.19, missing consensus estimates by $0.08 per share, and sales revenue of $111 million, representing a -3.4% year-over-year decline and missing consensus estimates by $4.17 million. Further, for full-year 2024, the Company reported sales of $440.1 million, a decrease of 10% compared to the prior year, driven by “lower hardware systems sales due to macroeconomic factors that are negatively impacting demand.” Finally, 3D systems reported a “$9 million revenue reduction in Q4 driven by a change in accounting estimates for [the Company’s] Regenerative Medicine program.” The Company disclosed that “[t]his change in estimate [was] related to the now anticipated use of pre-clinical human decedent testing[,] [. . .] which led to refinement of the milestone technical criteria.”
On this news, 3D Systems’ stock price fell $0.57 per share, or 20.96%, to close at $2.15 per share on March 27, 2025.
Then, after the market closed on May 12, 2025, 3D Systems issued a press release announcing its financial results for the first quarter (“Q1”) of 2025. Among other items, 3D systems reported: revenue of $94.5 million, down 8% year-over-year and missing consensus estimates of $99.5 million; a net loss of $37 million, or $0.28 per share, more than doubling the $16 million loss reported in Q1 2024; an adjusted loss of $0.21 per share, deeper than consensus estimates of a loss of $0.14 per share; and adjusted EBITDA of a loss of $23.9 million, deepening from a $20.1 million loss in Q1 2024. The Company attributed its disappointing results, in part, to a decline in material sales, mostly due to inventory management issues in the dental portion of its Healthcare Solutions segment. 3D Systems also announced that it was withdrawing its full-year 2025 outlook, citing prolonged softness in customer capital spending and macroeconomic uncertainty.
On this news, 3D Systems’ stock price fell $0.68 per share, or 26.6%, to close at $1.87 per share on May 13, 2025.
Market analysts were quick to comment on the Company’s disappointing results. For example, on May 14, 2025, an analyst from Seeking Alpha stated that he was “skeptical that [3D Systems] can transition to profitability in the near term” and suggested that “even after a significant price drop, the stock isn’t a bargain given shrinking revenues, lack of profitability, and low investor interest in the sector.”