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What changed in 3D SYSTEMS CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of 3D SYSTEMS CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+368 added−355 removedSource: 10-K (2025-03-27) vs 10-K (2024-08-13)

Top changes in 3D SYSTEMS CORP's 2024 10-K

368 paragraphs added · 355 removed · 243 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

46 edited+12 added−10 removed78 unchanged
Biggest changeOur third area of focus seeks to utilize our bio-printing capabilities to design and manufacture 3D-printed vascularized “organs-on-chips” for use in drug development by pharmaceutical industry customers. Currently, drug development is an expensive and time-consuming process, and many drug therapies that appear promising during pre-clinical trials fail during human clinical trials.
Biggest changeCurrently, drug development is an expensive and time-consuming process, and many drug therapies that appear promising during pre-clinical trials fail during human clinical trials. We believe that “organs-on-chips” can accelerate the drug development process and reduce the cost of pre-clinical drug testing, as well as reduce the pharmaceutical industry’s reliance on animal testing.
These facilities operate under stringent quality systems and are also utilized by customers in regulated industries such as healthcare and aerospace & defense for sustained outsourced production of hundreds of thousands of parts per year.
These facilities operate under stringent quality systems and are also utilized by customers in regulated industries such as healthcare and aerospace and defense for sustained outsourced production of hundreds of thousands of parts per year.
Creech, Executive Vice President and Chief Financial Officer. Mr. Creech was appointed the Company’s Executive Vice President and Chief Financial officer in December 2023. Prior to joining the company, from 2022 to 2023, Mr. Creech was a Senior Director of The Finley Group, a niche consulting firm engaged primarily in the support, assistance, and remediation of companies in financial distress.
Creech was appointed the Company’s Executive Vice President and Chief Financial officer in December 2023. Prior to joining the company, from 2022 to 2023, Mr. Creech was a Senior Director of The Finley Group, a niche consulting firm engaged primarily in the support, assistance, and remediation of companies in financial distress. Prior to joining the Finley Group, Mr.
This global representation promotes diversity of thought, experiences, culture, and backgrounds that enhances our ability to deliver innovative solutions to our customers, in support of our company value to ‘build great teams.’ We execute talent programs throughout the year in support of our commitment to maintain and engage our diverse workforce.
This global representation promotes diversity of thought, experiences, culture, and backgrounds that enhances our ability to deliver innovative solutions to our customers, in support of our company value to ‘build great teams.’ We execute talent programs throughout the year in support of our commitment to maintain and engage our workforce.
Puthenveetil spent 25 years as a management consultant for Group Newhouse helping companies, such as Lockheed Martin, Xcel Energy, Kia Motors, and Thales Group. Phyllis Nordstrom , Executive Vice President, Chief People Officer and Chief Administrative Officer . Ms. Nordstrom has served as Executive Vice President, Chief People and Culture Officer and Chief Compliance Officer since August 2021.
Puthenveetil spent 25 years as a management consultant for Group Newhouse helping companies, such as Lockheed Martin, Xcel Energy, Kia Motors, and Thales Group. Phyllis Nordstrom , Executive Vice President, Chief People Officer and Chief Administrative Officer . Ms. Nordstrom has served as Executive Vice President, Chief People Officer and Chief Compliance Officer since August 2021.
Our marketing and communications teams support our demand generation activities by providing marketing campaigns, digital presence and outreach, and event and targeted vertical seminar engagements. 7 We promote and sell our solutions globally through a direct sales force, channel partners and, in certain geographies, appointed distributors.
Our marketing and communications teams support our demand generation activities by providing marketing campaigns, digital presence and outreach, and event and targeted vertical seminar engagements. We promote and sell our solutions globally through a direct sales force, channel partners and, in certain geographies, appointed distributors.
Our talent sourcing activities focus on building our future talent pipeline and attracting top, diverse talent. Throughout an employee’s career with 3D Systems, we are focused on fostering an engaged, inclusive, and purpose-driven culture through various company-wide programs.
Our talent sourcing activities focus on building our future talent pipeline and attracting top talent. Throughout an employee’s career with 3D Systems, we are focused on fostering an engaged, inclusive, and purpose-driven culture through various company-wide programs.
Under certain of these licenses, we are entitled to receive, or we are obligated to pay, royalties for the sale of licensed products in the U.S. or in other countries. The amount of such royalties was not material to any of our annual results of operations or financial position for the three-year period ended December 31, 2023.
Under certain of these licenses, we are entitled to receive, or we are obligated to pay, royalties for the sale of licensed products in the U.S. or in other countries. The amount of such royalties was not material to our annual results of operations or financial position for the three-year period ended December 31, 2024.
Zuiker also worked for General Electric from December 1995 to August 2011 in various roles of increasing responsibility, including General Manager of GE Gasification Technology, General Manager of GE Hydro Technology, and Six Sigma Master Black Belt. Andrew W. B. Wright , Senior Vice President, General Counsel and Secretary . Mr.
Zuiker also worked for General Electric from December 1995 to August 2011 in various roles of increasing responsibility, including General Manager of GE Gasification Technology and General Manager of GE Hydro Technology. Dr. Zuiker is also a Six Sigma Master Black Belt. Andrew W. B. Wright , Senior Vice President, General Counsel and Secretary . Mr.
Over her 22-year career, Ms. Nordstrom has also held multiple leadership roles at PricewaterhouseCoopers, Target, and US Bank. Joseph Zuiker , Executive Vice President, Engineering and Operations . Dr. Zuiker has served as Executive Vice President of Engineering and Operations since December 2022. Prior to joining 3D Systems, Dr.
Over her 25-year career, Ms. Nordstrom has also held leadership roles at PricewaterhouseCoopers, Target, and US Bank. Joseph Zuiker , Executive Vice President, Engineering and Operations . Dr. Zuiker has served as Executive Vice President of Engineering and Operations since December 2022. Prior to joining 3D Systems, Dr.
During 2023, we continued our work to in-source the manufacturing of multiple printing platforms from contract manufacturing partners in order to realize improvements in production quality, cost efficiency, and inventory management, which resulted in the termination of outsourcing arrangements in the U.S. and Switzerland. We produce materials at our facilities in Rock Hill, South Carolina, Marly, Switzerland and Soesterberg, Netherlands.
During 2024, we completed our work to in-source the manufacturing of multiple printing platforms from contract manufacturing partners in order to realize improvements in production quality, cost efficiency, and inventory management, which resulted in the termination of outsourcing arrangements in the U.S. and Switzerland. We produce materials at our facilities in Rock Hill, South Carolina, Marly, Switzerland and Soesterberg, Netherlands.
Compliance with these laws, rules and regulations has not had, and is not expected to have, a material effect on our capital expenditures, results of operations or competitive position. 8 Research and Development The 3D printing industry continues to experience rapid technological change and developments in hardware, software and materials.
Compliance with these laws, rules and regulations is not expected to have a material effect on our capital expenditures, results of operations or financial position. 8 Research and Development The 3D printing industry continues to experience rapid technological change and developments in hardware, software and materials.
Stronger demand for our products historically occurred in our fourth quarter primarily due to our customers’ capital expenditure budget cycles and our sales compensation incentive programs. Our first and third quarters historically were our weakest quarters for overall unit demand. The first quarter was typically a slow quarter for capital expenditures in general.
Stronger demand for our products has historically occurred in our fourth quarter primarily due to our customers’ capital expenditure budget cycles and our sales compensation incentive programs. Our first and third quarters have historically been our weakest quarters for overall unit demand. The first quarter has typically been a slow quarter for capital expenditures in general.
Global Operations We operate in the Americas, EMEA and APAC regions, and market our products and services in those areas as well as to other parts of the world. In maintaining operations outside the United States (the “U.S.”), we expose our business to risks inherent in such operations, including currency exchange rate fluctuations.
Global Operations We operate in the Americas, EMEA and APAC regions, and market our products and services in those areas. In maintaining operations outside the United States (the “U.S.”), we expose our business to risks inherent in such operations, including currency exchange rate fluctuations.
Intellectual Property We regard our technology platforms and materials as proprietary and seek to protect them through copyrights, patents, trademarks and trade secrets. At December 31, 2023 and 2022 we held 1,381 and 1,358 patents worldwide, respectively. At December 31, 2023 and 2022, we had 350 and 360 pending patent applications worldwide, respectively.
Intellectual Property We regard our technology platforms and materials as proprietary and seek to protect them through copyrights, patents, trademarks and trade secrets. At December 31, 2024 and 2023 we held 1,247 and 1,381 patents worldwide, respectively. At December 31, 2024 and 2023, we had 300 and 350 pending patent applications worldwide, respectively.
We are considering these important topics as we design and execute our sustainability strategy. Our sustainability strategy is organized into four pillars: Empowering Innovation, Evolving the Future of Manufacturing, Advancing Customer Solutions, and Upholding Responsible Business Practices. Empowering Innovation We are focused on empowering innovation through our people to drive industry-leading solutions to maintain a competitive edge in additive manufacturing.
Our sustainability strategy is organized into four pillars: Empowering Innovation, Evolving the Future of Manufacturing, Advancing Customer Solutions, and Upholding Responsible Business Practices. Empowering Innovation We are focused on empowering innovation through our people to drive industry-leading solutions to maintain a competitive edge in additive manufacturing.
We believe we operate responsible business practices across our sites with the goals of creating a safe, secure, healthy, and injury-free workplace, prioritizing product quality and safety in our design and manufacturing, and being responsible stewards of the environment by collecting and measuring environmental data to understand our carbon footprint.
We execute responsible business practices across our sites with the goals of creating a safe, secure, healthy, and injury-free workplace, prioritizing product quality and safety in our design and manufacturing, complying with applicable laws and regulations, and being responsible stewards of the environment by collecting and measuring environmental data to understand our carbon footprint.
Prior to joining the Finley Group, Mr. Creech was Chief Operating Officer and Chief Financial Officer at Nutramax Laboratories, a privately held manufacturer of human and animal health and dietary supplements, from April 2019 to November 2021, where his primary responsibilities included oversight of all financial and operational activities, human resources, and information technology.
Creech was Chief Operating Officer and Chief Financial Officer at Nutramax Laboratories, a privately held manufacturer of human and animal health and dietary 12 supplements, from April 2019 to November 2021, where his primary responsibilities included oversight of all financial and operational activities, human resources, and information technology.
Information about our Executive Officers The information appearing in the table below sets forth the position or positions held by each of our executive officers and his or her age as of August 13, 2024. All of our executive officers serve at the pleasure of the Board of Directors.
Information about our Executive Officers The information appearing in the table below sets forth the position or positions held by each of our executive officers and his or her age as of March 26, 2025. All of our executive officers serve at the pleasure of the Board of Directors.
For the years ended December 31, 2023, 2022, and 2021, one customer accounted for approximately 15%, 23% and 22% of our consolidated revenue, respectively. We expect to maintain our relationship with this customer. Seasonality Historically, our results of operations were subject to seasonal factors.
For the years ended December 31, 2024, 2023, and 2022, one customer accounted for approximately 16%, 15% and 23% of our consolidated revenue, respectively. We expect to maintain our relationship with this customer. Seasonality Historically, our results of operations have been subject to seasonal factors.
There are no family relationships among any of our executive officers or directors. Name and Current Position Age as of August 13, 2024 Jeffrey A. Graves 63 President and Chief Executive Officer Jeffrey D. Creech 61 Executive Vice President and Chief Financial Officer Charles W.
There are no family relationships among any of our executive officers or directors. Name and Current Position Age as of March 26, 2025 Jeffrey A. Graves 63 President and Chief Executive Officer Jeffrey D. Creech 62 Executive Vice President and Chief Financial Officer Charles W.
We have instituted core talent strategies to prioritize the development of people, the diversity of talent to expand technology innovation, and the engagement of our global workforce.
We leverage core talent strategies for the development of people, the diversity of talent to expand technology innovation, and the engagement of our global workforce.
Upholding Responsible Business Practices We believe we operate in a responsible and ethical manner and leverage corporate governance standards to operate with resiliency and sustain long-term value of our Company. We leverage this foundation to influence our sustainability strategy, including utilizing our governance structure for oversight of our sustainability program.
Upholding Responsible Business Practices We hold ourselves accountable to operate in a responsible and ethical manner and adhere to corporate governance standards to enhance the long-term value of our Company. We leverage this foundation to influence our sustainability strategy, including utilizing our governance structure for oversight of our sustainability program.
These strategies include investing in technical employee training and on-demand development resources, rewarding significant achievements in innovation, enabling cross-functional collaboration between our engineering, operations, and customer-facing teams, and creating opportunities for our diverse global workforce to connect.
These strategies include investing in the technical skills development of our people, rewarding significant achievements in innovation, enabling cross-functional collaboration between our engineering, operations, and customer-facing teams, and creating opportunities for our global workforce to connect.
Talent Management & Engagement Our Company is advancing additive manufacturing through ongoing product innovation, and as such we recognize the importance of the retention, growth, and development of our employees – employees are necessary to achieving our long-term success.
We have not experienced any material work stoppages and believe that our relations with our employees are satisfactory. Talent Management & Engagement Our Company is advancing additive manufacturing through ongoing product innovation, and as such we recognize the importance of the retention, growth, and development of our employees – employees are necessary to achieving our long-term success.
We sell our software solutions, including our Oqton MOS software, through a dedicated software sales team. Our software may be sold to customers with 3D printing equipment from competitive equipment manufacturers and, in some cases, we resell our software through these manufacturers.
Additionally, our Customer Innovation Centers provide access to the resources necessary to develop, validate, and commercialize customer applications. We sell our software solutions, including our Oqton MOS software, through a dedicated software sales team. Our software may be sold to customers with 3D printing equipment from competitive equipment manufacturers and, in some cases, we resell our software through these manufacturers.
We offer solutions for product design, simulation, mold and die design, 3D scan-to-print, reverse engineering, production machining, metrology, inspection and manufacturing workflows. These products are designed to enable a seamless workflow for customers and are marketed under brand names such as Geomagic®.
Software and Related Products We provide digital design tools, including software, scanners and haptic devices. We offer solutions for product design, simulation, mold and die design, 3D scan-to-print, reverse engineering, production machining, metrology, inspection and manufacturing workflows. These products are designed to enable a seamless workflow for customers.
Previously, he held a number of leadership and technical roles with General Electric, Rockwell Automation and Howmet Corporation. In addition to serving on the Company's Board of Directors, Dr. Graves serves on the board of directors of Integra Lifesciences Holdings Corporation. 12 Jeffrey D. Creech , Executive Vice President and Chief Financial Officer . Jeffrey D.
Previously, he held a number of leadership and technical roles with General Electric, Rockwell Automation and Howmet Corporation. In addition to serving on the Company's Board of Directors, Dr. Graves has served on the board of directors of Integra Lifesciences Holdings Corporation since December 2023.
We plan to continue to provide internal funding to support Systemic Bio during the early stages of its growth, including for product development and customer acquisition activities. 5 Products We offer our customers a comprehensive range of 3D printers, materials, software, and digital design tools. 3D Printers and Materials Our 3D printers transform digital data input generated by 3D design software, Computer Aided Design (“CAD”) software or other 3D design tools, into printed parts using several unique print engines that employ proprietary, additive layer by layer building processes with a variety of materials.
Products We offer our customers a comprehensive range of 3D printers, materials, software, and digital design tools. 3D Printers and Materials Our 3D printers transform digital data input generated by 3D design software, Computer Aided Design (“CAD”) software or other 3D design tools, into printed parts using several unique print engines that employ proprietary, additive layer by layer building processes with a variety of materials.
We also offer 3D Sprint and 3DXpert, proprietary software to prepare and optimize CAD data and manage the additive manufacturing processes. These software products provide automated support building and placement, build platform management, print simulation and print queue management capabilities.
We also offer proprietary software to prepare and optimize CAD data and manage the additive manufacturing processes. These software products provide automated support building and placement, build platform management, print simulation and print queue management capabilities. The outcome is the ability to improve the quality of prints, optimize design structure, shorten design to manufacturing lead time and minimize manufacturing costs.
("Oqton") in 2021, we have also offered an intelligent, cloud-based MOS platform to customers that need to integrate a broad range of advanced manufacturing and automation technologies, including additive manufacturing (AM) solutions, in their production workflows. 3D System’s legacy stand-alone software applications are integrated into Oqton’s legacy MOS, so that we can offer our customers a complete cloud-based software solution to automate and control their entire digital manufacturing process from order to delivery.
Many of 3D System’s legacy stand-alone software applications are integrated into Oqton’s legacy MOS, so that we can offer our customers a complete cloud-based software solution to automate and control their entire digital manufacturing process from order to delivery.
Our expertise in materials science and formulation, combined with our processes, software and equipment, enables us to provide unique solutions and help our customers select the material that best meets their needs with optimal cost and performance results.
Our expertise in materials science and formulation, combined with our processes, software and equipment, enables us to provide unique solutions and help our customers select the material that best meets their needs with optimal cost and performance results. 5 As part of our solutions approach, our currently offered printers, with the exception of direct metal printers and bioprinters, have built-in intelligence to make them integrated, closed systems.
Inclusion and Belonging Employees span the Americas (56%), EMEA (35%), and APAC (9%) with approximately 44% of our employees located outside the U.S.
Workforce Development Employees span the Americas (59%), EMEA (32%), and APAC (9%) with approximately 42% of our employees located outside the U.S.
Human Capital At 3D Systems, our mission is to deliver leading additive solutions for industrial and healthcare applications.
Human Capital At 3D Systems, our mission is to deliver leading additive solutions for industrial and healthcare applications. In support of this purpose, we remain dedicated to empowering innovation through our people.
Our unique offerings of hardware, software, materials, and services provide application-specific solutions powered by the expertise of our global team of application engineers. We are maturing our product development activities to address our customers’ key environmental priorities, such as extending product lifespans, addressing material recyclability, and increasing energy and resource efficiency of our products and materials.
We are progressing our product development activities to address our customers’ environmental and social priorities, such as extending product lifespans, addressing material recyclability, increasing energy and resource efficiency of our products and materials, and offering patient-centered healthcare solutions.
These integrated materials are designed to enhance system functionality, productivity, reliability and materials' shelf life, in addition to providing our customers with a built-in quality management system and a fully integrated workflow solution. Software and Related Products We provide digital design tools, including software, scanners and haptic devices.
For these integrated printers, we furnish materials specifically designed for use in those printers, which are packaged in smart cartridges and utilize material delivery systems. These integrated materials are designed to enhance system functionality, productivity, reliability and materials' shelf life, in addition to providing our customers with a built-in quality management system and a fully integrated workflow solution.
In support of this purpose, we are focused on empowering innovation through our people by sourcing top engineering and technology talent, advancing talent strategies to drive employee development and career progression, and seeking to ensure a safe and healthy work environment across our global sites. 10 As of December 31, 2023, we had 1,925 full-time and part-time employees, compared to 2,032 full-time and part-time employees as of December 31, 2022.
Our human capital priorities include sourcing and retaining top talent across our teams, with an emphasis on leading edge engineering and technology expertise, advancing talent strategies to drive employee development and career progression, and upholding a safe and healthy work environment at our sites. 10 As of December 31, 2024, we had 1,833 full-time and part-time employees, compared to 1,925 full-time and part-time employees as of December 31, 2023.
Puthenveetil has served as Executive Vice President, Additive Solutions and Chief Commercial Officer since January 2024. He previously served as Executive Vice President, Industrial Solutions since July 2020. In January 2024, Mr. Puthenveetil was appointed Executive Vice President, Additive Solutions. Prior to joining the Company, Mr.
Puthenveetil was promoted to his current role in January 2024 and has responsibility for the Company's commercial operations for both the Healthcare Solutions and Industrial Solutions business units. In July 2020, Mr. Puthenveetil joined the Company as Executive Vice President, Industrial Solutions. Prior to joining the Company, Mr.
Our solutions enable our customers to meet key product needs and advance their business models. Looking to the future, sustainability will be an integral part of our innovation to address the evolving needs of our customers. The effects of climate change and the heightened social, economic, and health challenges around the globe are transforming our business.
Our solutions enable our customers to meet key product needs and advance their business models. We address risks and consider our ability to positively impact climate change, and social, economic and health challenges around the globe as we design and execute our sustainability strategy.
Our customer success organization includes sales professionals, application engineers, vertical specialists, and other support teams throughout the Americas, EMEA and APAC regions. These teams are responsible for providing complete service to our customers and channel partners from a technical consultation to the sale of our software, printer, and services products.
Our customer success organization includes sales professionals, application engineers, vertical specialists, and other support teams throughout the Americas, EMEA and APAC regions.
Our application engineers collaborate closely with our customers to solve complex design and additive manufacturing challenges, leveraging our technology, software, materials and services to develop advanced applications across our Healthcare Solutions and Industrial Solutions segments. Additionally, our Customer Innovation Centers provide access to the resources necessary to develop, validate, and commercialize customer applications.
These teams are responsible for providing complete service to our customers and channel partners from a technical consultation to the sale of our software, printer, and services products. 7 Our application engineers collaborate closely with our customers to solve complex design and additive manufacturing challenges, leveraging our technology, software, materials and services to develop advanced applications across our Healthcare Solutions and Industrial Solutions segments.
Given the loss of funding for research on kidney and livers from our key strategic partner, those programs were discontinued during the first quarter of 2024. Our second area of focus involves utilizing our bio-printing technology to manufacture non-organ human tissue scaffolds for use in transplantation and surgical reconstruction applications (the "Tissue Program").
Given the loss of funding for research on kidneys and liver from our key strategic partner, those programs were discontinued during the first quarter of 2024. Our second area of focus seeks to utilize our bio-printing capabilities to design and manufacture 3D-printed vascularized “organs-on-chips” for use in drug development by pharmaceutical industry customers.
To date, our efforts in the area of regenerative medicine have consisted primarily of pre-commercial bio-technology research and development ("R&D") in the areas described below. Each year, end-stage organ failure kills millions of people, and the supply of donated organs is insufficient to meet the needs of patients seeking transplantation.
Each year, end-stage organ failure kills millions of people, and the supply of donated organs is insufficient to meet the needs of patients seeking transplantation. Accordingly, our first area of focus is the use of additive manufacturing for human organ transplantation.
Investing in Regenerative Medicine As an early and continuing innovator in additive manufacturing, we have significant experience in bringing this technology to new markets. Within our Healthcare Solutions segment, a portion of our business focuses on opportunities for additive manufacturing to be applied to regenerative medicine.
Scale that includes significant and diverse experience in production parts and applications combined with a global reach to service our customers worldwide Investing in Regenerative Medicine As an early and continuing innovator in additive manufacturing, we have significant experience in bringing this technology to new markets.
"Management’s Discussion and Analysis of Financial Condition and Results of Operations," as well as Note 25 to our consolidated financial statements, for details regarding our previously announced and ongoing restructuring plan, which includes planned headcount reductions.
"Management’s Discussion and Analysis of Financial Condition and Results of Operations," as well as Note 24 to our consolidated financial statements, for details regarding our previous restructuring plan, which included headcount reductions. Our U.S. employees are not covered by collective bargaining agreements; however, some employees outside the U.S. are subject to local statutory employment and labor arrangements.
We continue to evaluate our headcount needs as we streamline our organization and manage operating costs through our restructuring activities. Refer to the discussion of "Fiscal Year 2023 Restructuring Activities" in Part II, Item 7.
We continually evaluate our workforce needs to deliver on our Company's strategic priorities while balancing the cost structure of our business. Refer to the discussion of "Fiscal Year 2023 Restructuring Plan" in Part II, Item 7.
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Scale that includes significant and diverse experience in production parts and applications combined with a global reach to service our customers worldwide During 2023 we made targeted investments and partnerships designed to broaden and enhance our product offering of 3D printing solutions and to expand addressable markets for our Industrial Solutions and Healthcare Solutions segments.
Added
Within our Healthcare Solutions segment, a portion of our business focuses on opportunities for additive manufacturing to be applied to regenerative medicine. To date, our efforts in the area of regenerative medicine have consisted primarily of pre-commercial bio-technology research and development ("R&D") in the areas described below.
Removed
Among these investments was the acquisition of Wematter AB (publ) (“Wematter”). Wematter is an affordable, turnkey, closed-loop selective laser sintering solution accessible for smaller manufacturing environments that addresses a wide range of applications including industrial, medical devices and equipment and academic markets. In addition, during 2023, we acquired a minority ownership interest in Theradaptive, Inc.
Added
During 2024, our wholly-owned biotech company, Systemic Bio, continued its R&D work in this area with pharmaceutical industry customers. We are engaged in a review of strategic alternatives for Systemic Bio. During this review we plan to continue to provide internal funding to support Systemic Bio, including for product development and customer acquisition activities.
Removed
(“Theradaptive”), a biopharmaceutical company focused on targeted regenerative therapeutics through a proprietary protein-engineering platform that can be used to coat implants and devices and to achieve hyper-local delivery for patients. In addition to our investment in Theradaptive, we entered into a partnership with Theradaptive to act as its exclusive 3D printing partner.
Added
Since the acquisition of Oqton, Inc. ("Oqton") in 2021, we have also offered an intelligent, cloud-based "manufacturing operating system" ("MOS") platform to customers that need to integrate a broad range of advanced manufacturing and automation technologies, including additive manufacturing solutions, in their production workflows.
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We believe that the above-described investments during 2023, will accelerate the adoption of additive manufacturing in our target industrial and healthcare end-markets and open up profitable future growth opportunities for our company. Realizing the full benefit of these growth-oriented initiatives will require us to make additional investments in operations and development activities during 2024 and beyond.
Added
In December 2024, the Company entered into a definitive agreement for the sale of its Geomagic software business to Hexagon AB for $123 million, subject to customary adjustments. The divestiture of Geomagic is expected to be completed by the end of the second quarter of 2025, subject to the satisfaction of certain closing conditions.
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Accordingly, our first area of focus is the use of additive manufacturing for human organ transplantation.
Added
Geomagic represents only a portion of the Company’s broader software business, and its products primarily consist of reverse engineering, design and inspection software. Following the sale of Geomagic, the Company’s remaining software business and continued investment and development efforts will primarily focus on software solutions and platforms that accelerate the adoption of 3D printing technologies in large-scale, production application environments.
Removed
We believe that continued progress in this area could result in significantly improved health outcomes for patients, as well as open up attractive new growth markets and therapeutic applications for 3D printed, vascularized soft-tissue scaffolds. The Tissue Program is currently an internal R&D program that combines our 3D printing, materials, and bio-printing capabilities and expertise.
Added
These software platforms specifically include 3D Sprint, 3DXpert, which are core to the Company’s metal and polymer additive manufacturing solutions, and Oqton Industrial Manufacturing OS, which helps customers move from prototyping to a repeatable and high-quality production additive manufacturing process.
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We believe that “organs-on-chips” can accelerate the drug development process and reduce the cost of pre-clinical drug testing, as well as reduce the pharmaceutical industry’s reliance on animal testing. During 2023, our wholly-owned biotech company, Systemic Bio, continued its R&D work in this area and entered into its first commercial contracts with pharmaceutical industry customers.
Added
Through these platforms, the Company will continue to offer software solutions for design, build preparation simulation, automation of repetitive tasks, inspection, preparing and optimizing CAD and polygon data, increasingly leveraging the power of artificial intelligence and machine learning to drive efficiency, improved workflows, higher productivity, repeatability, and quality.
Removed
As part of our solutions approach, our currently offered printers, with the exception of direct metal printers and bioprinters, have built-in intelligence to make them integrated, closed systems. For these integrated printers, we furnish materials specifically designed for use in those printers, which are packaged in smart cartridges and utilize material delivery systems.
Added
For purposes of our accompanying consolidated financial statements, the assets and liabilities of the Geomagic business that we plan to sell have been reclassified and separately reported as held for sale in our balance sheet.
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The outcome is the ability to improve the quality of prints, optimize design structure, shorten design to manufacturing lead time and minimize manufacturing costs. Since the acquisition of Oqton, Inc.
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Consistent with the remainder of our software business, Geomagic’s operating results historically have been, and continue to be, included in the financial results reported for our Industrial Segment.
Removed
Our U.S. employees are not covered by collective bargaining agreements; however, some employees outside the U.S. are subject to local statutory employment and labor arrangements. We have not experienced any material work stoppages and believe that our relations with our employees are satisfactory.
Added
Geomagic has not been separately reported as a discontinued operation in our accompanying consolidated financial statements, as the sale of this component of our software business does not represent a shift away from providing software products to our customers.
Added
Our unique offerings of hardware, software, materials, and services provide application-specific solutions powered by the expertise of our global team of application engineers.
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He retired from his position on the board of directors of Hexcel Corporation in May 2024, having served as a Director of Hexcel since 2007. In addition to Integra and Hexcel, Dr. Graves previously served as a director of FARO Technologies and Teleflex Corporation. Jeffrey D. Creech , Executive Vice President and Chief Financial Officer . Mr.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

58 edited+18 added−11 removed123 unchanged
Biggest changeMoreover, our operations are exposed to market risk from changes in interest rates and foreign currency exchange rates and commodity prices, which may adversely affect our results of operations and financial condition. We seek to minimize these risks through regular operating and financing activities and, when we consider it to be appropriate, through the use of derivative financial instruments.
Biggest changeWe seek to minimize the risks associated with interest rates, foreign exchange rates and commodity prices through regular operating and financing activities. However, our efforts to minimize our exposure to market risks from changes in interest rates, foreign currency exchange rates and commodity prices may prove to be insufficient or unsuccessful.
Servicing and/or refinancing our debt may require a significant amount of cash, and we may not have sufficient cash or the ability to raise the funds necessary to settle conversions of the 0% convertible senior notes due 2026 ("the Notes") in cash, repay the Notes at maturity, or repurchase the Notes as required following a fundamental change.
Servicing or refinancing our debt may require a significant amount of cash, and we may not have sufficient cash or the ability to raise the funds necessary to settle conversions of the 0% convertible senior notes due 2026 (the "Notes") in cash, repay the Notes at maturity, or repurchase the Notes as required following a fundamental change.
Regulatory, Legislative and Legal Risk Factors We are subject to U.S. and other anti-corruption laws, trade controls, economic sanctions, privacy regulations, and similar laws and regulations. Our failure to comply with these laws and regulations could subject us to civil, criminal and administrative penalties and harm our reputation.
Regulatory, Legislative and Legal Risk Factors We are subject to U.S. and other anti-corruption laws, trade controls, economic sanctions, privacy regulations, and other similar laws and regulations. Our failure to comply with these laws and regulations could subject us to civil, criminal and administrative penalties and harm our reputation.
As we continue to implement additional compliance enhancements, we may discover additional potential violations of export controls laws, trade sanctions and/or government contracting laws. If we identify any additional potential violations, we will submit voluntary disclosures to the relevant agencies and cooperate with such agencies on any related investigations.
As we continue to implement additional compliance enhancements, we may discover additional potential violations of export controls laws, trade sanctions or government contracting laws. If we identify any additional potential violations, we will submit voluntary disclosures to the relevant agencies and cooperate with such agencies on any related investigations.
Item 1A. Risk Factors You should carefully read the following discussion of significant factors, events and uncertainties when evaluating our business and the forward-looking information contained in this Form 10-K. The events and consequences discussed in these risk factors could materially and adversely affect our business, operating results, liquidity and financial condition.
Item 1A. Risk Factors You should carefully read the following discussion of significant factors, events and uncertainties when evaluating our business and the forward-looking information contained in this Form 10-K. The events and consequences discussed in these risk factors could materially and adversely affect our business, operating results, liquidity or financial condition.
Under these laws, regulations and requirements, we could also be subject to liability for improper disposal of chemicals and waste materials, including those resulting from the use of our systems and accompanying materials by end-users. These or future laws and regulations could potentially require the expenditure of significant amounts for compliance and/or remediation.
Under these laws, regulations and requirements, we could also be subject to liability for improper disposal of chemicals and waste materials, including those resulting from the use of our systems and accompanying materials by end-users. 16 These or future laws and regulations could potentially require the expenditure of significant amounts for compliance or remediation.
While we believe we have identified and discussed below the key risk factors affecting our business, these risk factors do not identify all the risks we face, and there may be additional risks and uncertainties that we do not presently know or that we do not currently believe to be significant that may have a material adverse effect on our business, operating results, liquidity or financial condition in the future. 13 Operational & Financial Risk Factors Current macro-economic trends have been adversely affecting, and could continue to adversely affect, our business, results of operations and financial condition due to their impact on the industries in which we and our customers operate, and due to the unknown speed, extent and nature of the reversal of those trends.
While we believe we have identified and discussed below the key risk factors affecting our business, these risk factors do not identify all the risks we face, and there may be additional risks and uncertainties that we do not presently know or that we do not currently believe to be significant that may have a material adverse effect on our business, operating results, liquidity or financial condition in the future. 13 Operational & Financial Risk Factors Current macro-economic trends and geopolitical landscape have been adversely affecting, and could continue to adversely affect, our business, results of operations and financial condition due to their impact on the industries in which we and our customers operate, and due to the unknown speed, extent and nature of the reversal of those trends.
We continue to identify alternative solutions, but an inability to source from alternative suppliers in a timely manner could impact on our ability to fulfill demand.
We continue to identify alternative solutions, but an inability to source from alternative suppliers in a timely manner could impact our ability to fulfill demand.
In addition, difficulties in our research efforts may lead to disputes our strategic partners and other third parties, such as the dispute with former shareholders of Volumetric described under the heading “Termination of Volumetric Milestones Related to Potential Earnout Payments” in Note 23 to the consolidated financial statements.
In addition, difficulties in our research efforts may lead to disputes our strategic partners and other third parties, such as the dispute with former shareholders of Volumetric described under the heading “Termination of Volumetric Milestones Related to Potential Earnout Payments” in Note 22 to the consolidated financial statements.
Our eligibility to use a Form S-3 registration statement may not be restored until June 1, 2025, and then only if we have not had any other filing delinquency that would preclude Form S-3 eligibility and satisfy all other requirements for Form S-3 eligibility.
Our eligibility to use a Form S-3 registration statement may not be restored until December 1, 2025, and then only if we have not had any other filing delinquency that would preclude Form S-3 eligibility and satisfy all other requirements for Form S-3 eligibility.
In the case of end-use parts, our sales to customers in the aerospace, medical, and semiconductor industries, in particular, makes us more susceptible to product and other liability claims, which characterize operations in those industries.
In the case of end-use parts, our sales to customers in the aerospace, medical, and semiconductor industries, in particular, make us more susceptible to product and other liability claims, which characterize operations in those industries.
Given the uncertainties associated with these trends in the current macro-economic environment, it is difficult to fully assess the magnitude of their effects on our, and our business partners’, business, financial condition and results of operations. The trends associated with the current economic environment may also have the effect of amplifying many of the other risks described herein.
Given the uncertainties associated with these trends in the current macro-economic environment, it is difficult to fully assess the magnitude of their effects on our, and our business partners.' business, financial condition and results of operations. The trends associated with the current economic environment may also have the effect of amplifying many of the other risks described herein.
We continuously work to expand and improve our products, materials and services offerings, geographic areas in which we operate and the distribution channels we use to reach various target product applications and customers.
We regularly work to expand and improve our products, materials and services offerings, geographic areas in which we operate and the distribution channels we use to reach various target product applications and customers.
We may not realize the anticipated benefits of past or future acquisitions and integration of these acquisitions may disrupt our business and divert management attention. Likewise, our potential future divestitures may be unsuccessful and negatively impact our business. From time to time, we evaluate acquisition candidates that fit our business objectives.
We may not realize the anticipated benefits of past or future acquisitions and integration of these acquisitions may disrupt our business and divert management attention. Likewise, our potential future divestitures may be unsuccessful and negatively impact our business. As a result, from time to time, we evaluate acquisition candidates that fit our business objectives.
The loss of, continued reduction or substantial decline in revenue from larger clients could have a material adverse effect on our revenues, profitability and liquidity. We have experienced revenue concentration with a large customer that for the years ended December 31, 2023, 2022, and 2021 represented approximately 15%, 23% and 22% of our consolidated revenue, respectively.
The loss of, continued reduction or substantial decline in revenue from larger clients could have a material adverse effect on our revenues, profitability and liquidity. We have experienced revenue concentration with a large customer that for the years ended December 31, 2024, 2023, and 2022 represented approximately 16%, 15% and 23% of our consolidated revenue, respectively.
Acquisitions involve certain risks and uncertainties, including, among others, the following: • The inability to successfully improve operating efficiency and reduce costs through our restructuring initiative; • Difficulty in integrating newly acquired businesses and operations in an efficient and cost-effective manner, which may also impact our ability to realize the potential benefits associated with the acquisition; • The risk that significant unanticipated costs or other problems associated with integration may be encountered; • The challenges in achieving strategic objectives, cost savings and other anticipated benefits; • The risk that our marketplaces do not evolve as anticipated and that the technologies acquired do not prove to be those needed to be successful in the marketplaces that we serve; • The risk that we assume significant liabilities that exceed the limitations of any applicable indemnification provisions or the financial resources of any indemnifying party; • The inability to maintain a relationship with key customers, vendors and other business partners of the acquired businesses; • The difficulty in maintaining controls, procedures and policies during the transition and integration; • The potential loss of key employees of the acquired businesses; • The risk of diverting management attention from our existing operations; • Difficulties in coordinating geographically disparate organizations and corporate cultures and integrating management personnel with different business backgrounds; • The potential failure of the due diligence process to identify significant problems, liabilities or other challenges of an acquired company or technology; • The risk that we incur significant costs associated with such acquisition activity that may negatively impact our operating results before the benefits of such acquisitions are realized, if at all; • The entry into marketplaces where we have no or limited direct prior experience and where competitors have stronger marketplace positions; • The exposure to litigation or other claims in connection with our assuming claims or litigation risks from terminated employees, customers, former shareholders or other third parties; and • The risk that historical financial information may not be representative or indicative of our results as a combined company. 19 Historically, we have grown organically and from acquisitions, and we intend to continue to grow in such manner.
Acquisitions involve certain risks and uncertainties, including, among others, the following: • The inability to successfully improve operating efficiency and reduce costs through our restructuring initiatives; • Difficulty in integrating newly acquired businesses and operations in an efficient and cost-effective manner, which may also impact our ability to realize the potential benefits associated with the acquisition; • The risk that significant unanticipated costs or other problems associated with integration may be encountered; • The risk that we do not fully integrate our acquisitions, which could drive greater complexity and higher costs in our business operations; • The challenges in achieving strategic objectives, cost savings and other anticipated benefits; • The risk that our marketplaces do not evolve as anticipated and that the technologies acquired do not prove to be those needed to be successful in the marketplaces that we serve; • The risk that we assume significant liabilities that exceed the limitations of any applicable indemnification provisions or the financial resources of any indemnifying party; • The inability to maintain a relationship with key customers, vendors and other business partners of the acquired businesses; • The difficulty in maintaining controls, procedures and policies during the transition and integration; • The potential loss of key employees of the acquired businesses; • The risk of diverting management attention from our existing operations; • Difficulties in coordinating geographically disparate organizations and corporate cultures and integrating management personnel with different business backgrounds; • The potential failure of the due diligence process to identify significant problems, liabilities or other challenges of an acquired company or technology; • The risk that we incur significant costs associated with such acquisition activity that may negatively impact our operating results before the benefits of such acquisitions are realized, if at all; • The entry into marketplaces where we have no or limited direct prior experience and where competitors have stronger marketplace positions; • The exposure to litigation or other claims in connection with our assuming claims or litigation risks from terminated employees, customers, former shareholders or other third parties; and 19 • The risk that historical financial information may not be representative or indicative of our results as a combined company.
Certain of the material weaknesses described above (items 1 and 2) were initially identified at December 31, 2020 and continued to exist at December 31, 2023.
Certain of the material weaknesses described above (items 1 and 2) were initially identified at December 31, 2020 and continued to exist at December 31, 2024.
Our regenerative medicine business requires us to develop products that enable the application of additive manufacturing to human organ transplantation, non-organ human applications and organ models used for drug discovery and development. These initiatives may require significant investment and technical achievement of viable product candidates may not be achieved.
Our regenerative medicine program requires us to develop products that enable the application of additive manufacturing to human organ transplantation and organ models used for drug discovery and development. These initiatives may require significant investment and technical achievement of viable product candidates may not be achieved.
The audit of the financial statements included in this Form 10-K was time-consuming, required the Company to incur additional incremental expenses and affected management’s attention and resources. Further, the measures to strengthen internal controls being implemented continued to require and will likely require in the future greater management time and Company resources to implement and monitor.
The audit of the financial statements included in our 2023 Form 10-K was time-consuming, required the Company to incur additional incremental expenses and affected management’s attention and resources. Further, the measures to strengthen internal controls being implemented continue to require and will likely require in the future greater management time and Company resources to implement and monitor.
However, if we are found to have violated one or more export control laws, trade sanctions or government contracting laws, we could be subject to various civil or criminal penalties, significant compliance, litigation, settlement costs or other losses, which could divert management’s attention from other business concerns, resulting in a material adverse effect on our business, results of operations and financial condition.
However, if we are found to have violated one or more export control laws, trade sanctions or government contracting laws, we could be subject to various civil or criminal penalties, significant compliance, litigation, settlement costs or other losses, resulting in a material adverse effect on our business, results of operations and financial condition.
However, there is no assurance that we will succeed at doing so. Current or future downturns could also have a material adverse impact on our business partners’ stability and financial strength.
However, there is no assurance that we will succeed at doing so. Current or future downturns could also have a material adverse impact on our business partners 'stability and financial strength.
While most of our operations outside the U.S. are conducted in highly developed countries, our operations could be adversely affected by, among others, the following: • Unexpected changes in laws, regulations and policies of non-U.S. governments relating to investments and operations, as well as U.S. laws affecting the activities of U.S. companies abroad; • Changes in regulatory requirements, including export controls, tariffs and embargoes, other trade restrictions, competition, environmental, corporate practices and data privacy concerns; • Political policies, political or civil unrest, terrorism or epidemics and other similar outbreaks; • Fluctuations in currency exchange rates; • Limited protection for the enforcement of contract and intellectual property rights in some countries; • Difficulties in staffing and managing foreign operations; • Operating in countries with a higher incidence of corruption and fraudulent business practices; • Potentially adverse changes in taxation; • The impact of public health epidemics on employees and the global economy; and • Other factors, depending upon the specific country in which we conduct business. 23 These uncertainties may make it difficult for us and our customers to accurately plan future business activities and may lead our customers in certain countries to delay purchases of our products and services.
While most of our operations outside the U.S. are conducted in highly developed countries, our operations could be adversely affected by, among others, the following: • Unexpected changes in laws, regulations and policies of non-U.S. governments relating to investments and operations, as well as U.S. laws affecting the activities of U.S. companies abroad; • Changes in regulatory requirements, including export controls, tariffs and embargoes, other trade restrictions, competition, environmental, corporate practices and data privacy concerns; • Political policies, political or civil unrest, terrorism or epidemics and other similar outbreaks; • Fluctuations in currency exchange rates; • Limited protection for the enforcement of contract and intellectual property rights in some countries; • Difficulties in staffing and managing foreign operations; • Operating in countries with a higher incidence of corruption and fraudulent business practices; • Potentially adverse changes in taxation; • The impact of public health epidemics on employees and the global economy; and 23 • Other factors, depending upon the specific country in which we conduct business.
As a result of our failure to timely file this Form 10-K for the fiscal year ended December 31, 2023, and our Form 10-Q for the quarter ended March 31, 2024, with the SEC, we are no longer eligible to use a Form S-3 registration statement.
As a result of our failure to timely file our 2023 Form 10-K, our Form 10-Q for the quarter ended March 31, 2024, our Form 10-Q for the quarter ended June 30, 2024, and the Form 10-Q for the quarter ended September 30, 2024 with the SEC, we are no longer eligible to use a Form S-3 registration statement.
While the material weaknesses discussed in Item 9A, "Management's Report on Internal Control over Financial Reporting", did not result in material misstatements of our annual or interim consolidated financial statements, any failure to remediate the material weaknesses, or the identification of new material weaknesses in our internal control over financial reporting, could result in material misstatements in our financial statements that may continue undetected, negatively impacting the public perception of the Company and our securities and cause us to fail to meet our reporting and financial obligations or incur significant additional costs to remediate the material weaknesses, each of which could negatively affect our stock price, harm our ability to raise capital on favorable terms in the future or otherwise have a negative impact on our financial condition. 25 We are no longer eligible to use a Form S-3 registration statement, which could impair our capital-raising activities.
While the material weaknesses discussed in Item 9A, "Management's Report on Internal Control over Financial Reporting," did not result in material misstatements of our annual or interim consolidated financial statements, any failure to remediate the material weaknesses, or the identification of new material weaknesses in our internal control over financial reporting, could result in material misstatements in our financial statements that may continue undetected, negatively impacting the public perception of the Company and our securities and cause us to fail to meet our reporting and financial obligations or incur significant additional costs to remediate the material weaknesses, each of which could negatively affect our stock price, harm our ability to raise capital on favorable terms in the future or otherwise have a negative impact on our financial condition.
Despite ongoing efforts to continually improve our and our vendors’ ability to protect against cybersecurity threats and the implementation of various safeguards, including increasing our cyber insurance, regularly conducting company-wide cybersecurity awareness training, and establishing a dedicated team of personnel to address cyber-based threats, we may not be able to fully protect all information systems, and such incidents may lead to reputational harm, revenue and customer loss, and legal action, among other consequences. 17 We are subject to numerous laws, regulations, and contractual obligations designed to protect our regulated data, and that of our customers.
Despite ongoing efforts to continually improve our and our vendors’ ability to protect against cybersecurity threats and the implementation of various safeguards, including increasing our cyber insurance, regularly conducting Company-wide cybersecurity awareness training, and establishing a dedicated team of personnel to address cyber-based threats, we may not be able to fully protect all information systems, and such incidents may lead to reputational harm, revenue and customer loss, and legal action, among other consequences.
As a result of the delayed filing of this Form 10-K and the Form 10-Q for the quarter ended March 31, 2024, the Company has experienced risks and costs and could experience additional risks and costs in the future, including with respect to the SEC's ongoing investigation.
As a result of the delayed filing of our 2023 Form 10-K, our Form 10-Q for the quarter ended March 31, 2024, our Form 10-Q for the quarter ended June 30, 2024, and our Form 10-Q for the quarter ended September 30, 2024, the Company has experienced risks and costs and expects to experience additional risks and costs in the future, including with respect to the SEC's ongoing investigation.
Further, as a result of this late Form 10-K filing and the late Form 10-Q filing, we are also no longer a “well-known seasoned issuer,” as such term is used in the SEC’s regulations, which otherwise would allow us to, among other things, file automatically effective Form S-3 registration statements.
Further, we are also no longer a “well-known seasoned issuer,” as such term is used in the SEC’s regulations, which otherwise would allow us to, among other things, file automatically effective Form S-3 registration statements.
Since 2018, we have implemented new compliance procedures to identify and prevent potential violations of export controls laws, trade sanctions and government contracting laws and regulations and created a Compliance Committee of the Board of Directors to further enhance board oversight of compliance risks.
Since 2018, we have implemented new compliance procedures to identify and prevent potential violations of export controls laws, trade sanctions and government contracting laws and regulations and from November 2018 through October 2024 maintained a separate Compliance Committee of the Board of Directors to further enhance board oversight of compliance risks.
Although we have now filed this Form 10-K, our failure to file it in a timely manner and our ongoing failure to timely file our Form 10-Q for the quarter ended March 31, 2024 may lead to further investigation and scrutiny by the SEC, which has been conducting a formal investigation of the Company since April 2022 as a follow on to the previously disclosed SEC voluntary request for documents.
Although we have now filed our 2023 Form 10-K, our Form 10-Q for the quarter ended March 31, 2024, our Form 10-Q for the quarter ended June 30, 2024, and our Form 10-Q for the quarter ended September 30, 2024, our failure to make these filings in a timely manner has led to further investigation and scrutiny by the SEC, which has been conducting a formal investigation of the Company since April 2022 as a follow on to the previously disclosed SEC voluntary request for documents.
As a result of the circumstances giving rise to the delayed filing of this Form 10-K and the Form 10-Q for the quarter ended March 31, 2024, the Company experienced risks and costs and could experience additional risks and costs in the future.
As a result of the circumstances giving rise to the delayed filing of our 2023 Form 10-K, our Form 10-Q for the quarter ended March 31, 2024, our Form 10-Q for the quarter ended June 30, 2024, and the Form 10-Q for the quarter ended September 30, 2024, the Company has experienced risks and costs and expects to experience additional risks and costs in the future.
Our ability to service and/or refinance our remaining indebtedness, including the Notes, or to make cash payments in connection with any conversions of the Notes, depends on our future performance, which is subject to economic, financial, competitive, and other factors beyond our control.
As of December 31, 2024, we had approximately $214.4 million outstanding of the Notes. Our ability to service or refinance our remaining indebtedness, including the Notes, or to make cash payments in connection with any conversions of the Notes, depends on our future performance, which is subject to economic, financial, competitive, and other factors beyond our control.
See Note 23, “Commitments and Contingencies,” to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Form 10-K for additional information. 22 Compliance with the terms of these agreements, which impose remedial measures such as a Special Compliance Officer to monitor the Company’s export compliance programs, could continue to impose significant costs and burdens on us.
See Note 22, “Commitments and Contingencies,” to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Form 10-K for additional information. 22 Compliance with the terms of these agreements, which imposed measures to strengthen the Company’s export compliance programs, could impose additional costs on the Company.
If we fail to comply with the terms of these agreements, DDTC, BIS and/or DOJ may impose substantial monetary penalties, which could have a material adverse effect on our business, financial condition and results of operations.
If we fail to comply with the terms of these agreements, additional monetary penalties or government actions could have a material adverse effect on our business, financial condition and results of operations.
Our success depends largely on our ability to attract, hire, develop, and retain senior management and key employees, such as engineers, scientists, and other key skilled employees supporting our products and services. Our senior management team is critical to the leadership of our business operations and the development and execution of our business strategy.
Our success depends largely on our ability to attract, hire, develop, and retain senior management and key employees, such as engineers, scientists, and other key skilled employees supporting our products and services.
Our infrastructure will require, among other things, continued development of our financial and management controls and management information systems, management of our sales channel, continued capital expenditures, the ability to attract and retain qualified management personnel and the training of new personnel.
Historically, we have grown organically and from acquisitions, and we intend to continue to grow in such manner. Our infrastructure will require, among other things, continued development of our financial and management controls and management information systems, management of our sales channel, continued capital expenditures, the ability to attract and retain qualified management personnel and the training of new personnel.
Additionally, we could be subject to significant fines or other civil and criminal penalties should we not achieve such compliance. 16 We are furthermore subject to extensive environmental, health and safety laws, regulations and permitting requirements in multiple jurisdictions due to our use of chemicals and production of waste materials as part of our operations and in connection with the operation of our systems by our customers.
We are furthermore subject to extensive environmental, health and safety laws, regulations and permitting requirements in multiple jurisdictions due to our use of chemicals and production of waste materials as part of our operations and in connection with the operation of our systems by our customers.
The occurrence of any of these events could adversely affect our internal operations, the services we provide to our customers, impact our financial results and reputation, or result in litigation, fines, and penalties.
The occurrence of any of these events could adversely affect our internal operations, the services we provide to our customers, impact our financial results and reputation, or result in litigation, fines, and penalties. 17 We are subject to numerous laws, regulations, and contractual obligations designed to protect our regulated data, and that of our customers.
While we recorded an impairment charge of $279.8 million related to our goodwill during 2023, we may experience additional unforeseen circumstances that adversely affect the value of our goodwill or intangible assets and trigger an evaluation of the amount of the recorded goodwill and intangible assets.
While we recorded impairment charges of $145.0 million related to goodwill, intangible assets, tangible assets, and right-of-use assets during 2024 and an impairment charge of $302.8 million related to our goodwill and intangible assets during 2023, we may experience additional unforeseen circumstances that adversely affect the value of these assets and trigger an evaluation of their 14 carrying amounts.
Our ability to obtain additional capital or refinance any indebtedness will depend on, among other things, the capital markets, our financial condition at such time and the terms and conditions of any such financing or indebtedness. We may not be able to engage in any of these activities or engage in these activities on desirable terms.
Our ability to obtain additional capital or refinance any indebtedness will depend on, among other things, our ability to find a buyer for the assets and the capital markets, our financial condition at such time and the terms and conditions of any such financing or indebtedness.
As further described in Item 9A, Management's Report on Internal Control over Financial Reporting, we began implementing a remediation plan in January 2021 designed to improve our internal control over financial reporting through the development and implementation of more formal policies, processes and documentation procedures relating to our financial reporting, the hiring of additional accounting personnel, and the training of personnel on proper execution of designed control procedures.
As further described in Item 9A, Management's Report on Internal Control over Financial Reporting, we began implementing a remediation plan in January 2021 designed to improve our internal control over financial reporting through the development and implementation of more formal policies, processes and documentation procedures relating to our financial reporting, the hiring of additional accounting personnel, and the training of personnel on proper execution of designed control procedures. 25 While we believe our remediation plans should remediate the material weaknesses, we cannot provide assurance of when the material weaknesses will be remediated, nor can we be certain of whether additional actions will be required or the costs of any such actions.
The EAR governs products, parts, technology and software which present military or weapons proliferation concerns, so-called “dual use” items, and ITAR governs military items listed on the United States Munitions List. Prior to shipping certain items, we must obtain an export license or verify that license exemptions are available.
The EAR governs products, parts, technology and software which present military or weapons proliferation concerns, so-called “dual use” items, and ITAR governs military items listed on the United States Munitions List.
These defaults will become an event of default under the terms of the Indenture if the Company fails to file this Form 10-K and its Form 10-Q for the three months ended March 31, 2024 prior to the end of the cure period provided for by the Indenture.
These defaults did not become an event of default under the terms of the Indenture given that the Company filed its 2023 Form 10-K and its Form 10-Q for the three months ended March 31, 2024 prior to the end of the cure period provided by the Indenture, which cure period was not initiated by the Trustee or holders of the Notes.
Any allegations or adverse findings by the SEC could harm our reputation, negatively impact our stock price and have a material adverse effect on our business, financial condition and results of operations, and the expense and distraction to management of cooperating with and responding to the SEC could have a material adverse effect on the Company even if the investigation is ultimately closed or resolved in a manner favorable to the Company.
Moreover, the expense and distraction to management of cooperating with and responding to the SEC could have a material adverse effect on the Company even if the investigation is ultimately closed or resolved in a manner favorable to the Company.
As a result, we may not have enough available cash or be able to obtain financing at the time we are required to repurchase or repay the Notes or pay cash with respect to Notes being converted. 18 Our operations and business performance could suffer if we are unable to attract and retain senior management or other key employees.
As a result, we may not have enough available cash or be able to obtain financing at the time we are required to repurchase or repay the Notes or pay cash with respect to Notes being converted.
Changes in business conditions may cause goodwill and other intangible assets to become impaired. Goodwill and other intangible assets are subject to an impairment test on an annual basis and when circumstances indicate that an impairment is more likely than not.
Goodwill is subject to an impairment test on an annual basis and when circumstances indicate that an impairment is more likely than not.
Future write-offs of goodwill or other intangible assets as a result of an impairment in the business could materially adversely affect our results of operations and financial condition. 14 Our uneven sales cycle makes planning and inventory management difficult and future financial results less predictable.
Future impairments of goodwill, intangible assets, long-lived tangible assets, or right-of-use assets could materially adversely affect our results of operations and financial condition. Our uneven sales cycle makes planning and inventory management difficult and future financial results less predictable.
More generally, these geopolitical, social and economic conditions could result in increased volatility in global financial markets and economies. The consequences of terrorism or armed conflicts are unpredictable, and we may not be able to foresee events that could have an adverse effect on our market opportunities or our business.
The consequences of terrorism or armed conflicts are unpredictable, and we may not be able to foresee events that could have an adverse effect on our market opportunities or our business. We are uninsured for losses and interruptions caused by terrorism, acts of war and similar events.
Management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023. Based on its assessment, management has concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2023, due to the following material weaknesses. 1.
Based on its assessment, management has concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2024, due to the following material weaknesses. • We did not design and maintain adequate controls within the revenue process that resulted in material weaknesses, either individually or in aggregate.
This customer may terminate its contracts or may materially further reduce its requested levels of products or services at any time. The further loss of revenue from, deterioration of the financial condition of, or a significant change to the business of this customer could have a material adverse effect on our business, financial condition, and results of operations.
The further loss of revenue from, deterioration of the financial condition of, or a significant change to the business of this customer could have a material adverse effect on our business, financial condition, and results of operations. Additionally, this concentration exposes us to concentrated credit risk, as a significant portion of our accounts receivable may be from a single customer.
However, our efforts to minimize our exposure to market risks from changes in interest rates, foreign currency exchange rates and commodity prices may prove to be insufficient or unsuccessful. We may incur substantial costs enforcing or acquiring intellectual property rights and defending against third-party claims as a result of litigation or other proceedings.
We may incur substantial costs enforcing or acquiring intellectual property rights and defending against third-party claims as a result of litigation or other proceedings.
In addition, the Company’s failure to file its Form 10-Q for the three months ended March 31, 2024 and provide it to the trustee by May 30, 2024 represented an incremental default under the terms of the Indenture.
During the three months ended June 30, 2024, the Company became non-compliant with certain terms of the Indenture due to its failure to file its 2023 Form 10-K and its Form 10-Q for the three months ended March 31, 2024 and provide them to the Trustee by the applicable deadline under the terms of the Indenture.
Such circumstances include a significant adverse change in the business climate or a decision to dispose of a business or product line. We face some uncertainty in our business environment due to a variety of challenges, including changes in customer demand and a recent decline in our market capitalization as a result of a decrease in our stock price.
We face some uncertainty in our business environment due to a variety of challenges, including changes in customer demand and in the trading price of our common stock and market capitalization during the three month period ended September 30, 2024.
The Company responded to these two subpoenas and fully cooperated with the U.S. Department of Justice (“DOJ“) in the related investigation. During the year ended December 31, 2023, the Company engaged in settlement discussions with DDTC, BIS, and DOJ to settle the potential export control violations described above.
The Company responded to these two subpoenas and fully cooperated with the U.S. Department of Justice (“DOJ“) in the related investigation. In February 2023, the Company settled these matters with all three agencies.
Additionally, this concentration exposes us to concentrated credit risk, as a significant portion of our accounts receivable may be from a single customer. If we are unable to collect our receivables, or are required to take additional reserves, our results of operations and cash flow from operations will be adversely affected.
If we are unable to collect our receivables, or are required to take additional reserves, our results of operations and cash flow from operations will be adversely affected. Changes in business conditions may cause our goodwill, intangible assets, long-lived tangible assets, or right-of-use assets to become impaired.
While we believe our remediation plans should remediate the material weaknesses, we cannot provide assurance of when the material weaknesses will be remediated, nor can we be certain of whether additional actions will be required or the costs of any such actions. Moreover, we cannot provide assurance that additional material weaknesses will not arise in the future.
Moreover, we cannot provide assurance that additional material weaknesses will not arise in the future.
For further information regarding the non-compliance with the terms of the Indenture, refer to Note 26 to the consolidated financial statements included in Item 8 of this Form 10-K. In the event the conditional conversion feature of the Notes is triggered, holders of Notes will be entitled to convert the Notes at any time during specified periods at their option.
In addition, any of our future debt agreements may contain restrictive covenants that may prohibit us from adopting any of these alternatives. In the event the conditional conversion feature of the Notes is triggered, holders of Notes will be entitled to convert the Notes at any time during specified periods at their option.
Accordingly, our failure to comply with these or other covenants of the Indenture could result in an event of default which, if not cured or waived, could result in the acceleration of our debt or cause us to incur special interest payments.
The indenture governing the Notes (the "Indenture") contains covenants that impose significant restrictions on us, and the failure to comply with these covenants could result in an event of default under these instruments. The indenture governing the Notes contains customary covenants, events of default and other provisions.
Although the Company is currently cooperating with the SEC, the Company cannot predict the ultimate outcome of the SEC’s investigation.
Although the Company is cooperating with the SEC, the Company cannot predict the ultimate outcome of the SEC’s investigation. Any allegations or adverse findings by the SEC could harm our reputation, negatively impact our stock price and have a material adverse effect on our business, financial condition and results of operations.
Removed
During the year ended December 31, 2023, the revenue recognized from this large customer declined approximately 41% as compared to the year ended December 31, 2022. Generally, our contracts do not contain guarantees of minimum duration, revenue levels, or profitability.
Added
Current political relations could potentially impact trade and tariff restrictions, which could adversely affect our operations, supply chains, and profitability. Changes in trade policies or political relations between countries may result in delays, increased costs, or disruptions in our ability to source materials, manufacture, or distribute products, which could have a material negative impact on our business.
Removed
As of December 31, 2023, we had approximately $324.9 million outstanding of the Notes, which amount has been further reduced to $214.4 million in connection with the repurchase of $110.5 million of outstanding Notes on March 8, 2024.
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Long-lived assets – consisting of tangible assets, intangible assets, and right-of-use assets – are assessed for recoverability and tested for impairment at the asset group level, and testing is required when circumstances indicate that the carrying value of an asset group is not recoverable.
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In addition, any of our future debt agreements may contain restrictive covenants that may prohibit us from adopting any of these alternatives. The Company’s failure to file this Form 10-K and provide it to the trustee by April 1, 2024 represents a default under the terms of the Indenture.
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Circumstances that may require goodwill to be tested more frequently than the annual impairment test, or indicate that a long-lived asset group is not recoverable, include a significant adverse change in the business climate, current-period operating or cash flow losses combined with a history of operating or cash flow losses, projections or forecasts that demonstrate continuing losses, or a decision to dispose of a business or product line.
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We believe that to remain competitive we must continually enhance and improve the functionality and features of our products, services and technologies.
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In areas of operations that involve handling hazardous materials, failure to maintain safe working conditions could result in workplace injuries, regulatory penalties, and reputational harm, as well as increased costs related to litigation, insurance, and compliance.
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On February 27, 2023, the Company settled these matters with all three agencies.
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Additionally, we could be subject to significant fines or other civil and criminal penalties should we not achieve such compliance.
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We are uninsured for losses and interruptions caused by terrorism, acts of war and similar events.
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We may not be able to engage in any of these activities or engage in these activities on desirable terms.
Removed
While the geographic areas outside the U.S. in which we operate are generally not considered to be highly inflationary, our foreign operations are sensitive to fluctuations in currency exchange rates arising from, among other things, certain intercompany transactions that are generally denominated in U.S. dollars rather than their respective functional currencies.
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A breach of the covenants or other provisions under the Indenture could result in an event of default under the Notes, which, if not cured or waved, could have a material adverse effect on our business, results of operations and financial condition, including through the imposition of special interest.
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The revenue process, including the review of contract terms input into the Company's information systems that support the determination of revenue recognition, the accounting for, and the monitoring of the timing of revenue recognition; 2.
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The Company did not incur any special interest as a result of the defaults, nor did the Notes become subject to any other actions by the Trustee or the holders.
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The financial close, accounting, and reporting processes, as specifically related to management’s review of internally prepared reports and analyses utilized in these processes in reviewing certain financial statement disclosures; 3. The design and implementation of controls over the review of revenue pricing and the implementation of a related accounting information system; 4.
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As of December 31, 2024, the Company was in Compliance with all of the covenants included within the Indenture. 18 Our operations and business performance could suffer if we are unable to attract and retain senior management or other key employees.
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Management’s review of the accounting treatment for certain technical matters related to certain transactions and financial statement accounts; and 5.
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The engagement and retention of our global teams is dependent on maintaining an inclusive culture where our people feel valued, respected, and have equal opportunities for growth and development. Our senior management team is critical to the leadership of our business operations and the development and execution of our business strategy.
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The maintenance of an effective control environment; specifically, as it relates to: (a) senior management's commitment to the control environment principles, and (b) maintaining sufficient qualified resources with the appropriate level of knowledge, experience, and training necessary to support accounting and financial reporting processes and controls.
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We believe, to remain competitive, we must identify product needs in the market, effectively define product specifications and performance to satisfy market needs, and timely launch new products to market.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Audit Committee and such members of our management team also report to the Board at least annually on cybersecurity matters. We have defined guidelines by which certain cybersecurity incidents are escalated within the Company and, where appropriate, reported promptly to the Audit Committee and the Board, as well as ongoing updates regarding any such incident.
Biggest changeWe have defined guidelines by which certain cybersecurity incidents are escalated within the Company and, where appropriate, reported promptly to the Audit Committee and the Board, as well as ongoing updates regarding any such incident. 26 Management At the management level, our CIO and Head of Cybersecurity have extensive cybersecurity knowledge and skills gained from work experience at the Company and other publicly traded companies.
Our cybersecurity assessment analyses have identified and prioritized steps to further enhance our cybersecurity practices. We maintain cyber insurance, regularly conduct company-wide cybersecurity awareness training, and have a dedicated team of Company personnel to address cybersecurity threats. We intend to implement additional security measures and processes to enhance our detection and response to cybersecurity incidents as appropriate.
We maintain cyber insurance, regularly conduct company-wide cybersecurity awareness training, and have a dedicated team of Company personnel to address cybersecurity threats. We intend to implement additional security measures and processes to enhance our detection and response to cybersecurity incidents as appropriate.
In addition to our internal cybersecurity capabilities, we also utilize a number of third-party experts to assist with assessing, identifying, and managing our cybersecurity risks. Risk Management and Strategy Assessing, identifying and managing cybersecurity risks are integral to our risk management activities.
In addition to our internal cybersecurity capabilities, we also utilize a number of third-party experts to assist with assessing, identifying, and managing our cybersecurity risks.
The Head of Cybersecurity receives reports on cybersecurity threats from both our internal and external partners on a regular basis. The Chief Administrative Officer and Chief Executive Officer receive regular reports from the Head of Cybersecurity and the CIO on the cyber program and measures implemented by the Company to identify and mitigate cybersecurity risks.
The Chief Administrative Officer and Chief Executive Officer receive regular reports from the Head of Cybersecurity and the CIO on the cyber program and measures implemented by the Company to identify and mitigate cybersecurity risks.
Our cybersecurity program leverages people, processes, and technology to identify and respond to cybersecurity threats in a timely manner. We maintain continuous monitoring of our network and also assess, identify, and manage risks from cybersecurity threats through various mechanisms, which may include incident response planning, risk assessments, control gap analyses, threat modeling, penetration tests, and vulnerability scanning.
We maintain continuous monitoring of our network and also assess, identify, and manage risks from cybersecurity threats through various mechanisms, which may include incident response planning, risk assessments, control gap analyses, threat modeling, penetration tests, and vulnerability scanning. Our cybersecurity assessment analyses have identified and prioritized steps to further enhance our cybersecurity practices.
Our CIO and Head of Cybersecurity work closely with our Company’s Legal and Compliance teams to oversee compliance with legal, regulatory, and contractual security requirements, and also attend meetings with the Audit Committee and the Board that include cybersecurity updates. 26 Internal Cybersecurity Team Our internal Cybersecurity Team, led by the Head of Cybersecurity, is responsible for the implementation, monitoring, and maintenance of our cybersecurity program, including the Company’s data protection practices.
Our CIO and Head of Cybersecurity work closely with our Company’s Legal and Compliance teams to oversee compliance with legal, regulatory, and contractual security requirements, and also attend meetings with the Audit Committee and the Board that include cybersecurity updates.
Material Cybersecurity Risks, Threats & Incidents To date, risks from cybersecurity threats, including as a result of previous cybersecurity incidents, have not materially affected us, including our business strategy, results of operations, or financial condition, but we face certain ongoing risks from cybersecurity threats that, if realized, are reasonably likely to have such an affect.
The IRP sets out a coordinated approach to investigating, containing, documenting, and mitigating incidents, including reporting findings and keeping senior management and other key stakeholders informed and involved as needed. 27 Material Cybersecurity Risks, Threats & Incidents To date, risks from cybersecurity threats, including as a result of previous cybersecurity incidents, have not materially affected us, including our business strategy, results of operations, or financial condition, but we face certain ongoing risks from cybersecurity threats that, if realized, are reasonably likely to have such an affect.
We have adopted a Cybersecurity Incident Response Plan (the “IRP”) to provide a standardized framework for responding to and escalating security incidents. The IRP sets out a coordinated approach to investigating, containing, documenting, and mitigating incidents, including reporting findings and keeping senior management and other key stakeholders informed and involved as needed.
We have adopted a Cybersecurity Incident Response Plan (the “IRP”) to provide a standardized framework for responding to and escalating security incidents.
Management At the management level, our CIO and Head of Cybersecurity, have extensive cybersecurity knowledge and skills gained from work experience at the Company and other publicly traded companies. They lead the team responsible for implementing, monitoring, and maintaining cybersecurity, including data protection practices across our business.
Together, they have also had extensive training and hands-on experience with quality management, process efficiency, auditing, and security incident management and response. They lead the team responsible for implementing, monitoring, and maintaining cybersecurity, including data protection practices across our business. The Head of Cybersecurity receives reports on cybersecurity threats from both our internal and external partners on a regular basis.
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The Audit Committee and such members of our management team also report to the Board at least annually on cybersecurity matters.
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Our CIO has worked in the IT industry for numerous private and publicly traded companies for more than 35 years. During this time, he has led both the IT and Cybersecurity efforts.
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He holds both a bachelor’s degree and an MBA, and has obtained numerous certifications throughout his career, including a Project Management Professional (PMP) and Cisco certified Network Professional (CCNP). Our Head of Cybersecurity has worked in the Cybersecurity industry for more than 22 years.
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He has also worked in leadership roles at numerous private and public companies, and holds a bachelor’s degree and a Master’s Degree in Cybersecurity. He has obtained numerous certifications, including a Certified Ethical Hacker (CEH), Computer Hacking Forensic Investigator (CHFI), and is a Certified Chief Information Security Officer (C|CISO). He is a founding member of the Carolina CISO leadership network.
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Internal Cybersecurity Team Our internal Cybersecurity Team, led by the Head of Cybersecurity, is responsible for the implementation, monitoring, and maintenance of our cybersecurity program, including the Company’s data protection practices.
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Risk Management and Strategy Each year, we conduct an enterprise risk evaluation by reviewing our progress on existing risk action plans, assessing the current environment against our risk universe, and gathering insights through engagement with senior leadership. The results of this assessment are summarized, a risk owner is assigned, and the identified risks are integrated into the strategic planning process.
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Risks are monitored throughout the year as part of ongoing business reviews. Additionally, the results of our cybersecurity program risk review are integrated into enterprise risk management results. Cybersecurity risks are assessed alongside other enterprise risks, with specific actions and mitigation strategies incorporated into the overall risk action plans, ensuring alignment with the Company’s broader risk management and strategic objectives.
Added
As progress is made in our cybersecurity program, the risk level is updated in our broader enterprise risk management program. Our cybersecurity program leverages people, processes, and technology to identify and respond to cybersecurity threats in a timely manner.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our headquarters are located in Rock Hill, South Carolina. As of December 31, 2023, we own minimal facilities, and we lease facilities in the U.S., EMEA, and APAC.
Biggest changeItem 2. Properties Our headquarters are located in Rock Hill, South Carolina. As of December 31, 2024, we own minimal facilities, and we lease facilities in the U.S., EMEA, and APAC.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings Information relating to legal proceedings is included under the header "Litigation" in Note 23 to the consolidated financial statements in Item 8 of this Form 10-K, which is incorporated by reference into this Item 3. Item 4. Mine Safety Disclosures Not applicable. 27 PART II
Biggest changeItem 3. Legal Proceedings Information relating to legal proceedings is included under the header "Litigation" in Note 22 to the consolidated financial statements in Item 8 of this Form 10-K, which is incorporated by reference into this Item 3. Item 4. Mine Safety Disclosures Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAlthough total return for the assumed investment assumes the reinvestment of all dividends on December 31 of the year in which such dividends were paid, we paid no cash dividends on our common stock during the periods presented. 28 COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 3D Systems Corporation $ 100 $ 86 $ 103 $ 212 $ 73 $ 62 NYSE Composite Index 100 126 135 162 147 167 S&P Small-Cap 600 Information Technology Index 100 140 178 226 176 213 Item 6.
Biggest changeAlthough total return for the assumed investment assumes the reinvestment of all dividends on December 31 of the year in which such dividends were paid, we paid no cash dividends on our common stock during the periods presented.
Issuance of Unregistered Securities and Issuer Purchases of Equity Securities We did not repurchase any of our equity securities in the open market during 2023; however, shares of common stock were surrendered to us for payment of tax withholding obligations in connection with the vesting of restricted stock awards and units pursuant to our Amended and Restated 2015 Incentive Stock Plan.
Issuance of Unregistered Securities and Issuer Purchases of Equity Securities We did not repurchase any of our equity securities in the open market during 2024; however, shares of common stock were surrendered to us for payment of tax withholding obligations in connection with the vesting of restricted stock awards and units pursuant to our Amended and Restated 2015 Incentive Stock Plan.
Stock Performance Graph The graph below shows, for the five years ended December 31, 2023, the cumulative total return on an investment of $100 assumed to have been made on December 31, 2018 in our common stock. For purposes of the graph, cumulative total return assumes the reinvestment of all dividends.
Stock Performance Graph The graph below shows, for the five years ended December 31, 2024, the cumulative total return on an investment of $100 assumed to have been made on December 31, 2019 in our common stock. For purposes of the graph, cumulative total return assumes the reinvestment of all dividends.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on the New York Stock Exchange (“NYSE”) under the trading symbol “DDD.” As of August 5, 2024, our outstanding common stock was held by approximately 1,186 stockholders of record.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on the New York Stock Exchange (“NYSE”) under the trading symbol “DDD.” As of March 26, 2025, our outstanding common stock was held by approximately 1,151 stockholders of record.
For information regarding the securities authorized for issuance under our equity compensation plans, see “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters–Equity Compensation Plans” in Item 12 of this Form 10-K. Also, see Note 17 to the consolidated financial statements in Item 8 of this Form 10-K.
For information regarding the securities authorized for issuance under our equity compensation plans, see “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters–Equity Compensation Plans” in Item 12 of this Form 10-K.
Issuer purchases of equity securities Total number of shares (or units) purchased Average price paid per share (or unit) October 1, 2023 - October 31, 2023 83,032 $ 4.25 November 1, 2023 - November 30, 2023 7,063 4.66 December 1, 2023 - December 31, 2023 12,649 5.81 Total 102,744 a $ 4.47 b a.
Also, see Note 17 to the consolidated financial statements in Item 8 of this Form 10-K. 28 Issuer purchases of equity securities Total number of shares (or units) purchased Average price paid per share (or unit) October 1, 2024 - October 31, 2024 — $ — November 1, 2024 - November 30, 2024 7,715 2.97 December 1, 2024 - December 31, 2024 29,308 3.83 Total 37,023 a $ 3.65 b a.
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COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2024 3D Systems Corporation $ 100 $ 120 $ 246 $ 85 $ 73 $ 37 NYSE Composite Index 100 107 129 117 133 154 S&P Small-Cap 600 Information Technology Index 100 128 162 126 152 151 29 Item 6. [Reserved] 30

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeCosts Incurred and Settled During the Period The following table provides details regarding restructuring charges recorded during the period, the portion of such costs that were settled with cash as of December 31, 2023, and the remaining accrued liability reported in our consolidated balance sheet as of December 31, 2023: (in thousands) Accrued liability as of December 31, 2022 Costs incurred during 2023 Amounts settled with cash Accrued liability as of December 31, 2023 Severance, termination benefits and other employee costs $ — $ 8,242 $ 4,309 $ 3,933 31 The severance, termination benefits and other employee costs that the Company incurred during the year ended December 31, 2023 are reflected in our consolidated statement of operations as follows: (in thousands) Year Ended December 31, 2023 Total cost of sales $ 1,401 Selling, general and administrative 5,598 Research and development 1,243 Total (1) $ 8,242 (1) These severance and termination costs are not included in the Company’s Adjusted EBITDA measure of segment profitability that is reported to our Chief Operating Decision Maker.
Biggest changeThe following table provides details regarding the net severance, termination benefit and other employee costs that were incurred (or reversed) under our 2023 Restructuring Plan and amounts that were settled with cash during the years ended December 31, 2024 and 2023, as well as the related accrued liability balances included in our consolidated balance sheets as of December 31, 2024 and 2023: (in thousands) December 31, 2024 December 31, 2023 Balance at beginning of period $ 3,933 $ — Costs incurred and other adjustments to accrued liability during the period (30) 8,242 Amounts settled with cash (3,416) (4,309) Balance at the end of period $ 487 $ 3,933 The financial statement impacts of (1) severance, termination benefits and other employee costs that were incurred under our 2023 Restructuring Plan during the years ended December 31, 2024 and 2023 and (2) adjustments recorded with respect to the liability recognized under the 2023 Restructuring Plan during the year ended December 31, 2024 are reflected in our consolidated statements of operations as follows: Year Ended (in thousands) December 31, 2024 December 31, 2023 Total cost of sales a $ (785) $ 1,401 Selling, general and administrative 370 5,598 Research and development 385 1,243 Total $ (30) $ 8,242 a.
In February 2023, the Company became a shareholder in the joint venture and owns 49% of the joint venture's common stock. During April 2023, the $3.4 million held in escrow, as well as the additional amount of approximately $3.1 million owed to the joint venture, was deposited into a bank account of the joint venture for use in its operations.
In February 2023, the Company became a shareholder in the joint venture and owns 49% of the joint venture's common stock. During April 2023, $3.4 million held in escrow, as well as the additional amount of approximately $3.1 million owed to the joint venture, was deposited into a bank account of the joint venture for use in its operations.
Total product revenue for the segment decreased by $55.6 million, primarily reflective of our lower sales to the dental market, but also inclusive of lower printer sales to customers in the medical devices and other non-dental markets. The decrease in product sales for the segment was partially offset by a $7.8 million increase in services revenue for the segment.
Total product revenue for the segment decreased by $55.6 million, primarily reflective of our lower sales to the dental market, but also inclusive of lower printer sales to customers in the medical devices and other non-dental markets. 43 The decrease in product sales for the segment was partially offset by a $7.8 million increase in services revenue for the segment.
See “ Cash flow ” discussion below. Cash flow The Company currently funds its operations — including working capital requirements, capital expenditures, investments and acquisitions — by using cash on hand cash; cash equivalents; cash flow from operations, which can vary widely from quarter to quarter; and financing activities, as necessary.
See “ Cash flow ” discussion below. Cash flow The Company currently funds its operations, including working capital requirements, capital expenditures and investments by using cash on hand; cash equivalents; cash flow from operations, which can vary widely from quarter to quarter; and financing activities, as necessary.
There is no assurance that the policy limits will be sufficient to cover all damages, if any. Critical Accounting Estimates We prepare our consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles ("GAAP").
There is no assurance that the policy limits will be sufficient to cover all damages, if any. 47 Critical Accounting Estimates We prepare our consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles ("GAAP").
This assessment, which impacts the timing and the amount of revenue recognized under a collaborative arrangement accounted for in accordance with ASC 606, requires management to conclude that it is probable that a significant reversal of the amount of cumulative revenue recognized with respect to a collaborative agreement will not occur as a result of including one or more milestone payments in the arrangement's transaction price, including when any uncertainty associated with the achievement of such milestones is ultimately resolved.
This assessment, which impacts the timing and the amount of revenue recognized under a collaboration arrangement accounted for in accordance with ASC 606, requires management to conclude that it is probable that a significant reversal of the amount of cumulative revenue recognized with respect to a collaboration agreement will not occur as a result of including one or more milestone payments in the arrangement's transaction price, including when any uncertainty associated with the achievement of such milestones is ultimately resolved.
In February 2023, the Company became a shareholder in the joint venture and now owns 49% of its common stock. 3D Systems was committed to an initial investment of approximately $6.5 million of cash into the joint venture, all of which has been funded as of December 31, 2023.
In February 2023, the Company became a shareholder in the joint venture and now owns 49% of its common stock. 3D Systems was committed to an initial investment of approximately $6.5 million of cash into the joint venture, all of which was funded as of December 31, 2023.
These impairment charges were triggered by the Company's decision to cease the development of dp polar's IPR&D for the foreseeable future and the Company's conclusion that it will more likely than not sell or otherwise dispose of Oqton MOS.
These impairment charges were triggered by the Company's decision to cease the development of dp polar's IPR&D for the foreseeable future and the Company's conclusion that it would more likely than not sell or otherwise dispose of Oqton MOS.
As a result of the reversal of all previously recognized expense during the year ended December 31, 2023, the Company has not recognized any compensation expense related to (1) the $355.0 million of potential Volumetric earnout payments provided for in the Volumetric acquisition agreement or (2) the outstanding RegMed Awards with an aggregate grant date fair value of $17.2 million.
As a result of the reversal of all previously recognized expense during the year ended December 31, 2023, the Company did not recognize any compensation expense during the year ended December 31, 2023 related to (1) the $355.0 million of potential Volumetric earnout payments provided for in the Volumetric acquisition agreement or (2) the outstanding RegMed Awards with an aggregate grant date fair value of $17.2 million.
The increase in services revenue was partially driven by the recognition of incremental variable consideration revenue, inclusive of a $4.5 million cumulative catch-up adjustment, that relates directly to the inclusion of $6.5 million of additional milestone payments (representing variable consideration) in the total transaction price of a regenerative medicine collaboration and licensing revenue agreement during the current year ended December 31, 2023.
The increase in services revenue was partially driven by the recognition of incremental variable consideration revenue, inclusive of a $4.5 million cumulative catch-up adjustment, that related directly to the inclusion of $6.5 million of additional milestone payments (representing variable consideration) in the total transaction price of a regenerative medicine collaboration and licensing revenue agreement during the year ended December 31, 2023.
For further information concerning the termination of the Volumetric milestones related to potential earnout payments, refer to Note 26 to the consolidated financial statements included in Item 8 of this Form 10-K.
For further information concerning the termination of the Volumetric milestones related to potential earnout payments, refer to Note 22 to the consolidated financial statements included in Item 8 of this Form 10-K.
This outcome of our annual goodwill impairment test is reflective of the significant and sustained drop in the Company's stock price and market capitalization leading up to and as of the testing date, as well as the significantly higher carrying value (including the goodwill balance) of our Industrial Solutions reporting unit compared to our Healthcare Solutions reporting unit.
This outcome of our annual goodwill impairment test reflected the significant and sustained drop in the Company's stock price and market capitalization leading up to and as of the testing date, as well as the significantly higher carrying value (including the goodwill balance) of our Industrial Solutions reporting unit compared to our Healthcare Solutions reporting unit.
As a result of the resignation of the key employees for whom continued employment was required for any of the remaining earnout payments to become payable, the parties to which the remaining three earnout payments totaling $175,000 were potentially payable were notified that such amount was no longer eligible to be earned.
As a result of the resignation of the key employees for whom continued employment was required for any of the remaining earnout payments to become payable, the parties to which the remaining three earnout payments totaling $175.0 million were potentially payable were notified that such amount was no longer eligible to be earned.
Regenerative medicine earnout payments and performance-based stock units Upon acquiring Volumetric on December 1, 2021, the Company became subject to potential aggregate acquisition-related earnout payments of up to $355.0 million that will be due to Volumetric’s former owners (“Sellers”) if seven individually assessed non-financial milestones are achieved.
Regenerative medicine earnout payments and performance-based stock units Upon acquiring Volumetric on December 1, 2021, the Company became subject to potential aggregate acquisition-related earnout payments of up to $355.0 million that would be due to Volumetric’s former owners (“Sellers”) if seven individually assessed non-financial milestones were achieved.
During May 2024, the Company completed the sale of the portion of the Oqton MOS business that was focused on the dental market ("Oqton Dental") in exchange for a de minimis amount of cash, resulting in the transfer of a limited portion of Oqton MOS's personnel.
During May 2024, the Company completed the sale of the portion of the Oqton MOS business that was focused on the dental market ("Oqton Dental") in exchange for a de minimis amount of cash, resulting in the transfer of a limited portion of Oqton MOS's personnel and a de minimis amount of fixed assets.
For each milestone, payment is only due to the extent that the Sellers continue to be employed by the Company at the time that a milestone is achieved.
For each milestone, payment was only due to the extent that the Sellers continue to be employed by the Company at the time that a milestone was achieved.
Each of the seven non-financial milestones, which individually triggers a specific earnout payment if achieved prior to an agreed upon date of either December 31, 2030 or December 31, 2035, is based upon specific advances in regenerative medicine related to lungs or tissue organs.
Each of the seven non-financial milestones, which individually triggered a specific earnout payment if achieved prior to an agreed upon date of either December 31, 2030 or December 31, 2035, was based upon specific advances in regenerative medicine related to lungs or tissue organs.
The Company has not recognized any of this expense because none of the related non-financial milestones were deemed probable of achievement as of December 31, 2023. Additionally, in February 2024, the Volumetric Sellers were informed that four of the seven milestones included in the Volumetric acquisition agreement were terminated.
The Company did not recognize any of this expense because none of the related non-financial milestones were deemed probable of achievement as of December 31, 2023. Additionally, in February 2024, the Volumetric Sellers were informed that four of the seven milestones included in the Volumetric acquisition agreement were terminated.
As the earnout payments require the continued employment of Volumetric’s Sellers, the Company recognizes each individual earnout payment as compensation expense over the period commencing on the date that the related milestone is deemed probable of achievement through the anticipated date of achievement.
As the earnout payments require the continued employment of Volumetric’s Sellers, the Company recognized each individual earnout payment as compensation expense over the period commencing on the date that the related milestone was deemed probable of achievement through the anticipated date of achievement.
See Note 9 to the consolidated financial statements in Item 8 of this Form 10-K for discussion of the goodwill impairment charge recognized during the year ended December 31, 2023. Our annual goodwill impairment tests performed for the years ended December 31, 2022 and 2021 did not result in the recognition of a goodwill impairment charge.
See Note 2 and Note 9 to the consolidated financial statements in Item 8 of this Form 10-K for discussion of the goodwill impairment charges recognized during the years ended December 31, 2024 and 2023. Our annual goodwill impairment test performed for the year ended December 31, 2022 did not result in the recognition of a goodwill impairment charge.
Business Overview 3D Systems Corporation (“3D Systems” or the “Company” or “we,” "our" or “us”) markets our products and services through subsidiaries in North America and South America (collectively referred to as “Americas”), Europe and the Middle East (collectively referred to as “EMEA”) and Asia Pacific and Oceania (collectively referred to as “APAC”).
Refer to Note 21 for additional details. Business Overview 3D Systems Corporation (“3D Systems” or the “Company” or “we,” "our" or “us”) markets our products and services through subsidiaries in North America and South America (collectively referred to as “Americas”), Europe and the Middle East (collectively referred to as “EMEA”) and Asia Pacific and Oceania (collectively referred to as “APAC”).
In addition, the Company has granted performance-based stock units (“PSUs”), with vesting terms that are based upon four individually-assessed, non-financial milestones, to other employees who work on advancements in regenerative medicine related to lungs and tissue organs.
In addition, the Company had granted performance-based stock units (“PSUs”), with vesting terms that were based upon four individually-assessed, non-financial milestones, to other employees who worked on advancements in regenerative medicine related to lungs and tissue organs.
As a result of the termination of the four milestones in February 2024, for periods subsequent to December 31, 2023, the Company's maximum liability for the Volumetric earnout payments related to the remaining three milestones is $175,000.
As a result of the termination of the four milestones in February 2024, for periods subsequent to December 31, 2023, the Company's maximum liability for the Volumetric earnout payments related to the remaining three milestones was $175.0 million.
For the majority of items, we estimate SSP using historical transaction data. We use a range of amounts to estimate SSP when we sell each of the products and services separately and need to determine whether there is a discount to be allocated based on the relative SSP of the various products and services.
In some instances, we estimate SSP using historical transaction data. We use a range of amounts to estimate SSP when we sell each of the products and services separately and need to determine whether there is a discount to be allocated based on the relative SSP of the various products and services.
In addition, the increase in our services revenue includes the $4.5 million of incremental variable consideration revenue recognized by our Healthcare Solutions segment on a cumulative catch-up basis, upon concluding that additional milestone-based payments related to a collaboration and licensing revenue agreement are probable of being earned.
This was partially offset by the increase in our services revenue which includes $4.5 million of incremental variable consideration revenue recognized by our Healthcare Solutions segment on a cumulative catch-up basis, upon concluding that additional milestone-based payments related to a collaboration and licensing revenue agreement were probable of being earned.
The fair values of acquired assets and assumed liabilities are estimated in accordance with accounting standards which define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.
The amount of purchase price paid in excess of the net assets acquired is recorded as goodwill. 49 The fair values of acquired assets and assumed liabilities are estimated in accordance with accounting standards which define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.
Theradaptive is currently developing a protein that encourages bone growth. This biotechnology could be applied to 3D printed metal splints for patients who otherwise may require amputation of a limb because the lost bone is too vast to replace with a splint.
This biotechnology could be applied to 3D printed metal splints for patients who otherwise may require amputation of a limb because the lost bone is too vast to replace with a splint.
In doing so, we have to make estimates and assumptions that affect the amounts we reported as assets, liabilities, revenues, expenses, gains and losses, as well as related disclosures of contingent assets and liabilities. In some cases, we reasonably could have applied different estimates and/or assumptions.
In doing so, we make estimates and assumptions that affect the amounts we reported as assets, liabilities, revenues, expenses, gains and losses, as well as related disclosures of contingent assets and liabilities. In some cases, we reasonably could have applied different estimates or assumptions and changes in our accounting estimates are reasonably likely to occur from period to period.
Material Cash Requirements The Company's material cash requirements consist of the following contractual and other obligations: Indebtedness At December 31, 2023, we had $324.9 million of outstanding 0% convertible notes which mature in November of 2026.
Material Cash Requirements The Company's material cash requirements consist of the following contractual commitments and other obligations: Indebtedness At December 31, 2024, we had $214.4 million of outstanding 0% convertible notes which mature in November of 2026.
The investing cash inflows in 2023 included sales and maturities of short-term investments of $180.9 million, offset by cash used for acquisitions of $29.2 million and capital expenditures of $27.2 million.
The investing cash outflows in 2024 included cash used for long-term investments of $3.0 million and capital expenditures of $16.1 million. The investing cash inflows in 2023 included sales and maturities of short-term investments of $180.9 million, offset by cash used for acquisitions of $29.2 million and capital expenditures of $27.2 million.
The product categories include 3D printers and corresponding materials, digitizers, software licenses, 3D scanners and haptic devices. The majority of materials used in our 3D printers are proprietary. The services categories include maintenance contracts and services on 3D printers, software maintenance, software as a service subscriptions and healthcare solutions services.
The majority of materials used in our 3D printers are proprietary. The services categories include maintenance contracts and services on 3D printers, software maintenance, software as a service subscriptions and healthcare solutions services.
We believe the acquisition of Titan will open up new markets in the Industrial Solutions segment. 33 National Additive Manufacturing Innovation ("NAMI") Joint Venture In March 2022, the Saudi Arabian Industrial Investments Company (“Dussur”) and 3D Systems signed an agreement to form a joint venture intended to expand the use of additive manufacturing within the Kingdom of Saudi Arabia and surrounding geographies, including the Middle East and North Africa.
National Additive Manufacturing Innovation ("NAMI") Joint Venture In March 2022, the Saudi Arabian Industrial Investments Company (“Dussur”) and 3D Systems signed an agreement to form a joint venture intended to expand the use of additive manufacturing within the Kingdom of Saudi Arabia and surrounding geographies, including the Middle East and North Africa.
Refer to Note 9 to the consolidated financial statements included in Item 8 of this Form 10-K for additional details.
Refer to Note 9 to the consolidated financial statements included in Item 8 of this Form 10-K for additional details on the 2024 and 2023 impairment charges.
The application of purchase price accounting oftentimes results in the identification and valuation of intangible assets that may not have been previously recognized on the balance sheet of the acquired company. The amount of purchase price paid in excess of the net assets acquired is recorded as goodwill.
The application of purchase price accounting oftentimes results in the identification and valuation of intangible assets that may not have been previously recognized on the balance sheet of the acquired company.
We enter into collaborative arrangements that we may be required to account for in accordance with Accounting Standards Codification ("ASC") Topic 606, “ Revenue from Contracts with Customers ," because our collaboration partner meets the definition of a customer.
Ongoing assessments are performed to determine if updates are needed to the original estimates. We enter into collaboration arrangements that we may be required to account for in accordance with Accounting Standards Codification ("ASC") Topic 606, “ Revenue from Contracts with Customers ," because our collaboration partner meets the definition of a customer.
Enhatch's Intelligent Surgery Ecosystem provides technologies which streamline and scale the design and delivery of patient-specific medical devices by automating the process. Incorporating these capabilities into 3D Systems’ workflow for patient-specific solutions, which includes advanced software, expert treatment planning services, custom implants, instrumentation design, and industry-leading production processes, will help more efficiently meet the growing demand for personalized medical devices.
Incorporating these capabilities into 3D Systems’ workflow for patient-specific solutions, which includes advanced software, expert treatment planning services, custom implants, instrumentation design, and industry-leading production processes, will help more efficiently meet the growing demand for personalized medical devices.
Differences between the amounts of working capital item changes in the cash flow statement and the balance sheet changes for the corresponding items are primarily the result of foreign currency translation adjustments, acquisitions and divestitures. At December 31, 2023, cash and cash equivalents and short-term investments totaled $331.5 million and decreased $237.2 million since December 31, 2022.
Differences between the amounts of working capital item changes in the cash flow statement and the balance sheet changes for the corresponding items are primarily the result of foreign currency translation adjustments. At December 31, 2024, cash and cash equivalents totaled $171.3 million and decreased $160.2 million since December 31, 2023.
Consolidated selling, general and administrative expense Selling, general and administrative ("SG&A") expense for the year ended December 31, 2023 decreased $34.0 million, or 13.9%, to $210.2 million, compared to $244.2 million for the year ended December 31, 2022.
Consolidated selling, general and administrative expense Selling, general and administrative ("SG&A") expense for the year ended December 31, 2024 decreased $0.1 million to $210.1 million, compared to $210.2 million for the year ended December 31, 2023.
Year Ended December 31, (in thousands, except per share amounts) 2023 2022 Loss before income taxes $ (362,312) $ (120,809) Benefit (provision) for income taxes 641 (2,140) Loss on equity method investment, net of income taxes (1,282) — Net loss before redeemable non-controlling interest (362,953) (122,949) Less: net loss attributable to redeemable non-controlling interest (265) (238) Net loss attributable to 3D Systems Corporation $ (362,688) $ (122,711) Net loss per common share: Basic $ (2.79) $ (0.96) Diluted $ (2.79) $ (0.96) For the year ended December 31, 2023, we reported a tax benefit of $0.6 million, as compared to a tax provision of $2.1 million for the year ended December 31, 2022.
Year Ended December 31, (in thousands, except per share amounts) 2024 2023 Loss before income taxes $ (249,996) $ (362,312) (Provision) benefit for income taxes (2,193) 641 Loss on equity method investment, net of income taxes (3,404) (1,282) Net loss before redeemable non-controlling interest (255,593) (362,953) Less: net loss attributable to redeemable non-controlling interest — (265) Net loss attributable to 3D Systems Corporation $ (255,593) $ (362,688) Net loss per common share: Basic $ (1.94) $ (2.79) Diluted $ (1.94) $ (2.79) For the year ended December 31, 2024, we reported income tax expense of $2.2 million, as compared to an income tax benefit of $0.6 million for the year ended December 31, 2023.
Cash held outside the U.S. at December 31, 2023 was $65.8 million, or 19.8% of total cash and cash equivalents, compared to $58.4 million, or 15.0% of total cash and cash equivalents at December 31, 2022.
Cash held outside the U.S. at December 31, 2024 was $63.8 million, or 37.3%, of total cash and cash equivalents, compared to $65.8 million, or 19.8%, of total cash and cash equivalents at December 31, 2023.
Acquisitions/Investments (See Note 3 and Note 10 to the Consolidated Financial Statements for further details) The Company has made the following significant acquisitions and investments during our fiscal years ended December 31, 2023 and 2022. 32 Wematter AB On July 1, 2023, the Company completed the acquisition of Wematter AB (“Wematter”), a Swedish 3D printer manufacturer, for which post-acquisition results are included in our Industrial Solutions segment.
Acquisitions/Investments The Company made the following significant acquisitions and investments during our fiscal years ended December 31, 2024, December 31, 2023, and December 31, 2022. 33 Acquisition of Wematter In July 2023, the Company completed the acquisition of Wematter AB (“Wematter”), a Swedish 3D printer manufacturer, for which post-acquisition results are included in our Industrial Solutions segment.
Allowance for doubtful accounts In evaluating the collectability of our accounts receivable, we assess a number of factors, including specific customers’ abilities to meet their financial obligations to us, the length of time receivables are past due, historical collection experience, current economic conditions, and reasonable and supportable forecasts.
See Note 2 and Note 5 to the consolidated financial statements in Item 8 of this Form 10-K for further discussion. 48 Allowance for credit losses In evaluating the collectability of our accounts receivable, we assess a number of factors, including specific customers’ abilities to meet their financial obligations to us, the length of time receivables are past due, historical collection experience, current economic conditions, and reasonable and supportable forecasts.
The Company's effective tax rates for the years ended December 31, 2023 and 2022 were significantly below blended U.S. and foreign jurisdictions' statutory tax rates due to (1) the Company's reported losses and (2) the maintenance of a valuation allowance against the Company's deferred tax assets based upon the Company's conclusion that it is more likely than not that its deferred tax assets will not be realized in various tax jurisdictions. 42 The increase in the net loss attributable to 3D Systems for the year ended December 31, 2023, as compared to the net loss attributable to 3D Systems for the year ended December 31, 2022, was primarily driven by the period-over period increase in the Company's consolidated operating loss reported for the year ended December 31, 2023, partially offset by the non-operating income reported for the year ended December 31, 2023, as compared to a non-operating loss reported for the year ended December 31, 2022.
The Company's effective tax rates for the years ended December 31, 2024 and 2023 were significantly below blended U.S. and foreign jurisdictions' statutory tax rates due to (1) the Company's reported losses and (2) the maintenance of a valuation allowance against the Company's deferred tax assets based upon the Company's conclusion that it is more likely than not that its deferred tax assets will not be realized in various tax jurisdictions.
The evaluation of when it is appropriate to include amounts earned upon the achievement of milestones in a contract's transaction price requires the application of significant assumptions and judgments, which management reassesses at the end of each reporting period. See Note 2 and Note 5 to the consolidated financial statements in Item 8 of this Form 10-K for further discussion.
The evaluation of when it is appropriate to include amounts earned upon the achievement of milestones in a contract's transaction price requires the application of significant assumptions and judgments, which management reassesses at the end of each reporting period.
As the milestones that trigger the Volumetric earnout payments and the vesting of the PSUs are (1) based upon scientific and technological advancements that are expected to require multiple years of R&D to achieve and (2) subject to significant known and unknown risks and uncertainties, management must apply significant assumptions and judgment at each balance sheet date to assess both the probability of achievement and expected timing of achievement.
The PSUs associated with each individual milestone were recognized as compensation expense over the period commencing on the date that the respective milestone was deemed probable of being met through the anticipated date of achievement. 51 As the milestones that trigger the Volumetric earnout payments and the vesting of the PSUs were (1) based upon scientific and technological advancements that were expected to require multiple years of R&D to achieve and (2) subject to significant known and unknown risks and uncertainties, management was to apply significant assumptions and judgment at each balance sheet date to assess both the probability of achievement and expected timing of achievement.
However, during the year ended December 31, 2023, the Company concluded that the non-financial milestone to which the potential earnout payment of $65 million relates was no longer probable of being achieved due to a reduction in the budgeted funding for the related R&D efforts and, accordingly, all previously recognized compensation expense was reversed.
However, during the year ended December 31, 2023, the Company concluded that this non-financial, scientific milestone was no longer probable of achievement given a reduction in the budgeted funding for the related R&D efforts. As a result, the Company reversed all of the previously recognized earnout expense related to the milestone during the year ended December 31, 2023.
Gross profit margin for the year ended December 31, 2023 increased to 40.2%, as compared to 39.8% for the year ended December 31, 2022, primarily driven by the increase in our services gross profit margin (as discussed in greater detail below).
Gross profit margin for the year ended December 31, 2024 decreased to 37.3%, as compared to 40.2%, for the year ended December 31, 2023, primarily driven by the decrease in both our products and services gross profit margin (as discussed in greater detail below).
The joint venture is to enable the development of Saudi Arabia's domestic additive manufacturing production capabilities, consistent with the Kingdom’s ‘Vision 2030,’ which is focused on diversification of the economy and long-term sustainability.
The joint venture is to enable the development of Saudi Arabia's domestic additive manufacturing production capabilities, consistent with the Kingdom’s ‘Vision 2030,’ which is focused on diversification of the economy and long-term sustainability. Upon entering into the agreement with Dussur, 3D Systems committed to an initial investment in the joint venture of approximately $6.5 million.
Based on these assessments, we may record a reserve for specific customers, as well as a general reserve and allowance for expected credit losses.
Based on these assessments, we may record a reserve for specific customers, as well as establish an allowance for expected credit losses related to our accounts receivable as a whole.
As of December 31, 2023, management does not believe that achievement of the post-closing performance conditions is probable. Theradaptive, Inc. In June of 2023, we made an $8.0 million investment in Theradaptive, Inc. ("Theradaptive") via the purchase of Series A Preferred Stock, pursuant to which we hold an approximate 9.15%, or 8.25% fully-diluted, ownership interest in Theradaptive.
As of December 31, 2024, management does not believe that achievement of the post-closing performance conditions is probable. Theradaptive, Inc. In June 2023, we made an $8.0 million investment in Theradaptive, Inc. ("Theradaptive") via the purchase of Series A Preferred Stock. Theradaptive is currently developing a protein that encourages bone growth.
Refer to our discussion of "Other Strategic Business Decisions and Cost Saving Initiatives" and Note 8 to the consolidated financial statements included in Item 8 of this Form 10-K for additional details.
Refer to our discussion of "Other Strategic Business Decisions and Cost Saving Initiatives" and Note 8 to the consolidated financial statements included in Item 8 of this Form 10-K for additional details. 40 Consolidated operating loss Our operating loss for the year ended December 31, 2024 was $277.4 million, compared to a $406.0 million operating loss for the year ended December 31, 2023.
Impairments of goodwill and intangible assets During the year ended December 31, 2023, we recorded aggregate impairment charges of $302.8 million related to intangible assets (inclusive of goodwill); whereas, similar impairment charges were not recorded during the year ended December 31, 2022.
Asset impairment charges During the year ended December 31, 2024, we recorded aggregate impairment charges of $145.0 million related to intangible assets (inclusive of goodwill) and tangible assets as compared to $302.8 million in impairment charges recorded during the year ended December 31, 2023.
For discussion related to our results of operations and changes in financial condition for fiscal 2022 compared to fiscal 2021, refer to Part II, Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations" ("MD&A") in our fiscal 2022 Form 10-K. Our fiscal 2022 Form 10-K was filed with the SEC on March 16, 2023.
See “Risk Factors” in Part I, Item 1A and “Forward-Looking Statements.” For discussion related to our results of operations and changes in financial condition for fiscal 2023 compared to fiscal 2022, refer to Part II, Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations" ("MD&A") in our fiscal 2023 Form 10-K.
As there were no direct costs (e.g., costs of goods sold) associated with this incremental collaboration and licensing revenue, the entire $4.5 million contributed to an increase in our reported gross profit, as well as to a 1.6% increase and 0.5% increase in our services gross profit margin and consolidated gross profit margin, respectively.
As there were no direct costs (e.g., costs of goods sold) associated with this incremental collaboration and licensing revenue, the entire $4.5 million contributed to an increase in our reported gross profit Industrial Solutions Revenue For the year ended December 31, 2023, Industrial Solutions revenue decreased $2.2 million, or 0.8%, as compared to the year ended December 31, 2022.
Cash flow from investing activities For the year ended December 31, 2023, cash provided by investing activities was $124.8 million compared to $308.4 million of cash used in investing activities for the year ended December 31, 2022.
Cash flow from operations was also positively impacted by general improvements in working capital management. Cash flow from investing activities For the year ended December 31, 2024, cash used in investing activities was $19.0 million compared to $124.8 million of cash provided by investing activities for the year ended December 31, 2023.
See Note 7 and Note 8 to the consolidated financial statements in Item 8 of this Form 10-K for discussion of the long-lived asset impairment charges recognized during the years ended December 31, 2023 and 2022. 50 Goodwill Goodwill represents the purchase price paid in excess of the fair value of net tangible and intangible assets acquired in a business combination.
See Note 2, Note 7, Note 8 and Note 11 to the consolidated financial statements in Item 8 of this Form 10-K for discussion of the long-lived asset impairment charges recognized during the years ended December 31, 2024 and 2023.
Leases The Company had operating and financing lease obligations (inclusive of interest) of $107.8 million at December 31, 2023, primarily related to real estate and equipment leases, of which approximately $17.2 million in payments are expected over the next twelve months.
As of December 31, 2024, such purchase commitments totaled $15.4 million, with $9.3 million expected to be purchased within the next twelve months. 46 Leases The Company had operating and financing lease obligations (inclusive of interest) of $97.6 million at December 31, 2024, primarily related to real estate and equipment leases, of which approximately $15.9 million in payments are expected over the next twelve months.
In instances where SSP is not directly observable, such as when the product or service is not sold separately, we determine the SSP using information that may include market conditions and other observable inputs. 48 In some circumstances, we have more than one SSP for individual products and services due to the stratification of those products and services by customers, geographic region or other factors.
In some circumstances, we have more than one SSP for individual products and services due to the stratification of those products and services by customers, geographic region or other factors. In these instances, we may use information such as the size of the customer and geographic region in determining the SSP.
(“Enhatch”), the developer of the Intelligent Surgery Ecosystem. We simultaneously entered into a collaboration and supply agreement with Enhatch. We also obtained warrants to purchase additional shares of Enhatch and the right to purchase, in the future, the remaining shares of Enhatch that 3D Systems does not own, if certain revenue targets are achieved.
(“Enhatch”), the developer of the Intelligent Surgery Ecosystem, in exchange for shares of Enhatch convertible preferred stock, a warrant to purchase common shares of Enhatch, and the right to purchase in the future the remaining shares of Enhatch that 3D Systems does not own if certain revenue targets are achieved (the “call option”).
We regularly assess the likelihood of adverse outcomes resulting from these examinations and assessments to determine the adequacy of our provision for income taxes.
We regularly assess the likelihood of adverse outcomes resulting from these examinations and assessments to determine the adequacy of our provision for income taxes. See Note 2 and Note 18 to the consolidated financial statements in Item 8 of this Form 10-K for further discussion.
Consolidated gross profit Year Ended December 31, 2023 2022 Change in Gross Profit Change in Gross Profit Margin (Dollars in thousands) Gross Profit Gross Profit Margin Gross Profit Gross Profit Margin $ % Percentage Points % Products $ 125,473 38.2 % $ 158,010 40.0 % $ (32,537) (20.6) % (1.8) % (4.5) % Services 70,948 44.5 % 56,223 39.4 % 14,725 26.2 % 5.1 % 12.9 % Total $ 196,421 40.2 % $ 214,233 39.8 % $ (17,812) (8.3) % 0.4 % 1.0 % 38 Gross profit for the year ended December 31, 2023 decreased $17.8 million, or 8.3%, to $196.4 million, compared to $214.2 million for the year ended December 31, 2022.
Refer to the detailed discussions above. 37 Consolidated gross profit Year Ended December 31, 2024 2023 Change in Gross Profit Change in Gross Profit Margin (Dollars in thousands) Gross Profit Gross Profit Margin Gross Profit Gross Profit Margin $ % Percentage Points % Products $ 103,319 37.0 % $ 125,473 38.2 % $ (22,154) (17.7) % (1.2) (3.1) % Services 60,859 37.8 % 70,948 44.5 % (10,089) (14.2) % (6.7) (15.1) % Total $ 164,178 37.3 % $ 196,421 40.2 % $ (32,243) (16.4) % (2.9) (7.2) % Gross profit for the year ended December 31, 2024 decreased $32.2 million, or 16.4%, to $164.2 million, compared to $196.4 million for the year ended December 31, 2023.
See Note 2 to the consolidated financial statements in Item 8 of this Form 10-K for a summary of our significant accounting policies.
We refer to accounting estimates of this type as critical accounting estimates, which we discuss further below. We have reviewed our critical accounting estimates with the Audit Committee of our Board of Directors. See Note 2 to the consolidated financial statements in Item 8 of this Form 10-K for a summary of our significant accounting policies.
For the year ended December 31, 2022, the cash flow used in financing activities was $13.8 million primarily due to taxes paid related to the net-share settlement of equity awards of $10.9 million and the $2.3 million payment for the acquisition of a non-controlling interest.
Cash flow from financing activities For the year ended December 31, 2024, the cash flow used in financing activities was $91.3 million primarily due to the use of $87.2 million for the early extinguishment of long-term debt and taxes paid related to the net-share settlement of equity awards of $2.7 million.
In addition to the severance and termination costs reported above, the Company has recognized incremental impairment charges totaling $0.6 million related to certain fixed assets that have been retired in connection with the Company’s restructuring activities.
During 2023, we recorded $0.6 million in incremental impairment charges related to certain fixed assets that have been retired in connection with the Company’s restructuring.
A change in management’s assumptions or estimates regarding the probability and/or timing of achievement of a milestone in connection with management’s quarterly reassessment can materially impact the amount of compensation expense recognized for the respective and future periods as follows: • A change in assumptions that results in a milestone first being deemed probable of achievement will result in the recognition of incremental compensation expense in the Company’s consolidated statement of operations in the respective period; • A change in assumption regarding the timing of achievement of a milestone will result in the acceleration or deceleration of the recognition of future compensation expense; and/or • A change in assumption that results in a milestone no longer being deemed probable of achievement will result in a full reversal of previously recognized expense in the respective period. 51 Prior to the year ended December 31, 2023, the Company had been recognizing compensation expense related to (1) one Volumetric milestone-based payment, for which the potential amount due to the Sellers would be $65.0 million, and (2) one PSU milestone (“the RegMed Awards”), for which the aggregate grant date fair value of the outstanding and unvested awards was $4.5 million as of December 31, 2022, as the related Volumetric earnout and RegMed Award milestone was deemed probable of achievement.
Prior to the year ended December 31, 2023, the Company had been recognizing compensation expense related to (1) one Volumetric milestone-based payment, for which the potential amount due to the Sellers would be $65.0 million, and (2) one PSU milestone (“the RegMed Awards”), for which the aggregate grant date fair value of the outstanding and unvested awards was $4.5 million as of December 31, 2022, as the related Volumetric earnout and RegMed Award milestone was deemed probable of achievement.
See Note 2 and Note 19 to the consolidated financial statements in Item 8 of this Form 10-K for further discussion. 49 Inventories Inventories are stated at the lower of cost or net realizable value, with cost being determined using standard costing, which approximates the first-in, first-out method.
Inventories Inventories are stated at the lower of cost or net realizable value, with cost being determined using standard costing, which approximates the first-in, first-out method.
Products gross profit and gross profit margin For the year ended December 31, 2023, gross profit from products sales decreased by $32.5 million, or 20.6%, as compared to the year ended December 31, 2022. This decrease was primarily driven by lower products sales revenue.
Products gross profit and gross profit margin For the year ended December 31, 2024, gross profit from products sales decreased by $22.2 million, or 17.7%, as compared to the year ended December 31, 2023.
Services gross profit and gross profit margin For the year ended December 31, 2023, gross profit from services sales increased $14.7 million, or 26.2%, as compared to the year ended December 31, 2022. The increase in gross profit from services sales was primarily driven by the $16.7 million, or 11.7%, increase in services revenue.
Services gross profit and gross profit margin For the year ended December 31, 2024, gross profit from services sales decreased $10.1 million, or 14.2%, as compared to the year ended December 31, 2023.
In addition, the Company reported a loss on equity method investment, net of income taxes, for the year ended December 31, 2023; whereas, the Company did not hold this investment that is accounted for under the equity method of accounting as of the year ended December 31, 2022.
In addition, the Company reported a $3.4 million loss on equity method investment, net of income taxes, for the year ended December 31, 2024, as compared to a $1.3 million loss on equity method investment for the year ended December 31, 2023.
Adjusted EBITDA For the year ended December 31, 2023, Adjusted EBITDA for our Industrial Solutions segment decreased $5.1 million, or 21.0%, as compared to the year ended December 31, 2022, which was primarily driven by a $2.0 million unfavorable impact of the Company's recent acquisitions and the unfavorable impact of both volume and price/mix on product revenue, partially offset by (1) the increase in services revenue and (2) lower operating expenses, when excluding the impact of acquisitions.
Gross Profit For the year ended December 31, 2024, gross profit for our Industrial Solutions segment decreased $20.6 million, or 18.5%, as compared to the year ended December 31, 2023, which was primarily driven by the unfavorable impact of volume on products revenue, partially offset by the increase in services revenue.
The following table presents the revenue and Adjusted EBITDA amounts reported by each of our segments, as well as non-allocated corporate costs, for the years ended December 31, 2023 and 2022: Revenue Adjusted EBITDA Year Ended Year Ended (in thousands) December 31, 2023 December 31, 2022 Change December 31, 2023 December 31, 2022 Change Healthcare Solutions $ 213,216 $ 260,988 $ (47,772) $ 38,520 $ 55,783 $ (17,263) Industrial Solutions 274,853 277,043 (2,190) 19,128 24,214 (5,086) Corporate and Other — — — (83,906) (85,778) 1,872 Total Company $ 488,069 $ 538,031 $ (49,962) $ (26,258) $ (5,781) $ (20,477) Healthcare Solutions Revenue For the year ended December 31, 2023, Healthcare Solutions revenue decreased $47.8 million, or 18.3%, as compared to the year ended December 31, 2022.
Segment Financial Results of Operations for the Years Ended December 31, 2023 and 2022 The following table presents the revenue and gross profit amounts reported by each of our segments for the years ended December 31, 2023 and 2022: Revenue Gross Profit Year Ended Year Ended (in thousands) December 31, 2023 December 31, 2022 Change December 31, 2023 December 31, 2022 Change Healthcare Solutions $ 213,216 $ 260,988 $ (47,772) $ 85,150 $ 98,767 $ (13,617) Industrial Solutions 274,853 277,043 (2,190) 111,271 115,466 (4,195) Total Company $ 488,069 $ 538,031 $ (49,962) $ 196,421 $ 214,233 $ (17,812) Healthcare Solutions Revenue For the year ended December 31, 2023, Healthcare Solutions revenue decreased $47.8 million, or 18.3%, as compared to the year ended December 31, 2022.
For the year ended December 31, 2022, cash used in investing activities was $308.4 million, which included investments of $384.4 million of excess cash in short-term investments offset by $200.3 million proceeds from the sales and maturities of such investments, cash used for acquisitions of $103.7 million, and capital expenditures of $20.9 million . 46 Cash flow from financing activities For the year ended December 31, 2023, the cash flow used in financing activities was $106.5 million primarily due to the repayment of long-term debt of $100.6 million and taxes paid related to the net-share settlement of equity awards of $5.2 million.
For the year ended December 31, 2023, the cash flow used in financing activities was $106.5 million primarily due to the use of $100.6 million for the extinguishment of long-term debt and taxes paid related to the net-share settlement of equity awards of $5.2 million.
Further changes to management’s assumptions regarding the probability and/or timing of achievement of the RegMed Award milestones or, alternatively, changes to the arrangements or circumstances that provide for compensation to be paid upon the achievement of the RegMed Award milestones, could significantly impact the amount of compensation expense recognized by the Company in the future.
Further changes to management’s assumptions regarding the probability and/or timing of achievement of the RegMed Award milestones or, alternatively, changes to the arrangements or circumstances that provide for compensation to be paid upon the achievement of the RegMed Award milestones, could significantly impact the amount of compensation expense recognized by the Company in the future. 52 Systemic Bio Phantom Plan During the year ended December 31, 2023, we began granting phantom unit awards ("Phantom Units") under a new compensation plan designed for employees and non-employees performing services for Systemic Bio, a wholly-owned subsidiary of 3D Systems.
We believe that “organs-on-chips” can accelerate the drug development process and reduce the cost of pre-clinical drug testing, as well as reduce the pharmaceutical industry’s reliance on animal testing.
We believe that “organs-on-chips” can accelerate the drug development process and reduce the cost of pre-clinical drug testing, as well as reduce the pharmaceutical industry’s reliance on animal testing. Systemic Bio combines 3D Systems’ legacy expertise in high-resolution 3D printing with advanced capabilities in bioprinting and biomaterials to design and market 3D-printed, vascularized “organs-on-chips”.
We believe that continued progress in this area could result in significantly improved health outcomes for patients, as well as open up attractive new growth markets and therapeutic applications for 3D printed, vascularized soft-tissue scaffolds. 34 Our third area of focus seeks to utilize our bio-printing capabilities to design and manufacture 3D-printed vascularized “organs-on-chips” for use in drug development by pharmaceutical industry customers through our wholly-owned biotech company, Systemic Bio.
Our second area of focus seeks to utilize our bio-printing capabilities to design and manufacture 3D-printed vascularized “organs-on-chips” for use in drug development by pharmaceutical industry customers through our wholly-owned biotech company, Systemic Bio.
Refer to Note 26 for details regarding the Company's incremental investment in NAMI subsequent to December 31, 2023. The Company accounts for the joint venture under the equity method of accounting, which requires the Company to recognize its proportionate share of the joint venture's reported net income or loss.
The Company does not expect to make an additional capital contribution in 2025. The Company accounts for the joint venture under the equity method of accounting, which requires the Company to recognize its proportionate share of the joint venture's reported net income or loss.
Systemic Bio combines 3D Systems’ legacy expertise in high-resolution 3D printing with advanced capabilities in bioprinting and biomaterials to design and market 3D-printed, vascularized “organs-on-chips.” During the year ended December 31, 2023, Systemic Bio entered into its first commercial contracts with pharmaceutical industry customers. 35 Background We earn revenue from the sale of products and services through our Healthcare Solutions and Industrial Solutions segments.
During the year ended December 31, 2023, Systemic Bio entered into its first commercial contracts with pharmaceutical industry customers. 35 Background We earn revenue from the sale of products and services through our Healthcare Solutions and Industrial Solutions segments. The product categories include 3D printers and corresponding materials, digitizers, software licenses, 3D scanners and haptic devices.
The lower sales volume within our Healthcare Solutions segment was primarily due to lower sales to the dental market, including lower printer sales to a key customer. Product sales volume in our Healthcare Solutions segment also decreased due to lower printer sales to customers in the medical devices and other non-dental markets.
This decrease in segment revenue was primarily due to a decrease in products revenue of $17.9 million, primarily reflective of our lower sales to the dental market, but also inclusive of lower printer sales to customers in the medical devices and other non-dental markets.
The following is a summary of the changes in the Company’s cash flows, followed by a brief discussion of these changes: Year Ended (in thousands) December 31, 2023 December 31, 2022 Change Net cash used in operating activities $ (80,695) $ (70,021) $ (10,674) Cash flow provided by (used in) investing activities 124,784 (308,355) 433,139 Cash flow used in financing activities (106,469) (13,815) (92,654) Cash flow from operations For the year ended December 31, 2023, cash used in operating activities was $80.7 million due to the reported loss from operations and the $35.4 million increase in working capital (excluding cash, cash equivalents and short-term investments) from December 31, 2022.
The following is a summary of the changes in the Company’s cash flows, followed by a brief discussion of these changes: 45 Year Ended (in thousands) December 31, 2024 December 31, 2023 Change Net cash used in operating activities $ (44,887) $ (80,695) $ 35,808 Cash flow (used in) provided by investing activities (19,025) 124,784 (143,809) Cash flow used in financing activities (91,265) (106,469) 15,204 Cash flow from operations For the year ended December 31, 2024, cash used in operating activities was $44.9 million compared to $80.7 million for the year ended December 31, 2023.
In some cases, changes in our accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ materially from our estimates. To the extent that there are material differences between our estimates and actual results, our financial condition or results of operations will be affected.
Accordingly, actual results could differ materially from our estimates. To the extent that there are material differences between our estimates and actual results, our financial condition or results of operations will be affected. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeFor the year ended December 31, 2023, a hypothetical change of 10% in foreign currency exchange rates would have caused changes in revenue and total operating expenses of approximately $21.0 million and $32.4 million, respectively, assuming all other variables remained constant.
Biggest changeFor the year ended December 31, 2024, a hypothetical change of 10% in foreign currency exchange rates would have caused changes in revenue of $19.0 million, cost of goods sold of $14.4 million, and total operating expenses of $13.8 million, assuming all other variables remained constant.
In 2023, approximately 43.0% of our net sales and a significant portion of our costs are attributable to entities with functional currencies other than the U.S. dollar. We generally are unable to adjust our non-dollar local currency sales prices to reflect changes in exchange rates between the dollar and the relevant local currency.
In 2024, approximately 42.4% of our net sales and a significant portion of our costs are attributable to entities with functional currencies other than the U.S. dollar. We generally are unable to adjust our non-dollar local currency sales prices to reflect changes in exchange rates between the dollar and the relevant local currency.
For the year ended December 31, 2023, a hypothetical 10% change in commodity prices for raw materials would have caused a change to cost of sales of approximately $16.2 million.
For the year ended December 31, 2024, a hypothetical 10% change in commodity prices for raw materials would have caused a change to cost of sales of $12.8 million. 53
Removed
When practicable, we endeavor to match assets and liabilities in the same currency on our U.S. balance sheet, as well as the balance sheets of our subsidiaries, in order to reduce the risks attributable to conducting transactions in a variety of currencies.
Removed
We also, when we consider it appropriate, enter into foreign currency contracts to hedge exposures arising from these transactions. As of December 31, 2023 and 2022, we had no foreign currency exchange contracts outstanding.

Other DDD 10-K year-over-year comparisons