DDD 10-K & 10-Q changes, risk factors and insider trading

Certain global macro-economic trends have been adversely impacting the global economic environment and have contributed towards inflationary pressures on many goods, commodities and servicesservices. globally.Although Theinflation highhas ratesslowed in several major markets, it remains uneven across regions, and the trajectory of slowing inflation globallyremains uncertain. While some central banks, particularly in emerging markets, have causedbegun governments and central banks to act to curb inflation, including by raisinglowering interest rates, whichinterest isrates intendedremain tomoderately temperelevated by historical standards. If interest rates remain elevated for an extended period or if combined with adverse economic activityor andgeopolitical which,developments, ifsuch more powerful than intended,conditions could triggerincrease recessionary conditionsrisks in individual countries or regions, or globally. These macro-economic trends have been impacting our target marketsmarkets, our strategic planning, and our results of operations. For example, risingelevated interest rates,rates and evolving credit conditions continue to tighten financing availability for certain customers which are meant to slow down inflation, have been worsening credit/financing conditions for our customers andmay adversely impactingaffect their ability to purchase our products.

While we believe that we are well-positionedable to withstand the current adverse macro-economic trends, given our balance sheet (primarily due to our reserves of cash and cash equivalents) and our emphasis on operational efficiencies and execution, we continue to monitor the situation, assessing further implications for our operations, supply chain, liquidity, cash flow and customer orders, in an effort to mitigate potential new adverse consequences should they arise. 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 partnerspartners’ 'stabilitystability and financial strength. 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.'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.

The loss of, continued reduction to, or substantial decline in revenue from larger clients could have a material adverse effect on our revenues, profitability and liquidity.

WeFor havethe experiencedyear revenueended concentrationDecember with31, a2025, largetwo customercustomers thatwithin forour Healthcare Solutions segment represented 12.2% and 11.4% of our revenue, respectively. For the years ended December 31, 2024,2024 and 2023, andone 2022of those customers also represented approximately 16%, 15%16.0% and 23%15.0% of our consolidated revenue, respectively. The further loss of revenue from, deterioration of the financial condition of, or a significant change to the business of thisthese customercustomers 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 atwo singlelarge customer.customers. 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.

Goodwill is subject to an impairment test on an annual basis and when circumstances indicate that an impairment is more likely than not. 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. 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. We face some uncertainty in our business environment due to a variety of challenges, including changes in customer demand and a recent decline in the trading price of our common stock and market capitalization during the three month period ended September 30, 2024.capitalization. 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 carrying amounts. 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 quarterly sales often have reflected a pattern in which a disproportionate percentage of each quarter’s total sales occur towards the end of the quarter, in particular for sales of hardware and software products. This uneven sales pattern makes predicting net revenue, earnings, cash flow from operations and working capital for each financial period difficult, increases the risk of unanticipated variations in our quarterly results and financial conditioncondition, and places pressure on our inventory management and logistics systems. If predicted demand is substantially greater than orders, there may be excess inventory. Alternatively, if orders substantially exceed predicted demand, we may not be able to fulfill all of the orders received in each quarter and such orders may be canceled. Furthermore, depending on when they occur in a quarter, developments such as an information systems failure, component pricing movements, component shortages or global logistics disruptions could adversely impact our inventory levels and results of operations in a manner that is disproportionate to the number of days in the quarter affected.

We regularlycontinuously 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. This variety of products, applications, channels and regions involves a range of gross profit margins that can cause substantial quarterly fluctuations in gross profit and gross profit margins depending upon the mix of product shipments from quarter to quarter. Additionally, the introduction of new products or services may further heighten quarterly fluctuations in gross profit and gross profit margins due to manufacturing ramp-up and start-up costs. We may experience significant quarterly fluctuations in gross profit margins or operating income or loss due to the impact of the mix of products, offerings, geographic areas and distribution channels we use to sell our products, materials and offerings from period to period.

We sell complex hardware and software products, materials and services that can contain undetected design and manufacturing defects or errors when first introduced or as enhancements are released that, despite testing, are not discovered until after the product has been installed and used by customers. Sophisticated software and applications, such as those sold by us, may contain “"bugs”" that can unexpectedly interfere with the software’s intended operation. Defects may also occur in components and products we purchase from third parties. There can be no assurance we will be able to detect and fix all defects in the hardware, software, materials and services we sell. Failure to do so could result in lost revenue, product returns, product liability, delayed market acceptance of those products and services, customer dissatisfaction, claims from distributors, end-users or others, increased end-user service and support costs, and significant warranty claims and other expenses to correct the defects. Additionally, such quality problems may result in a diversion of management time and attention and harm to our reputation.

Periodic delays on the inbound supply chain at our partners and our own facilities have also created challenges. 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 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. In certain cases, the required compliance with health or safety regulations is imposed by our customers themselves. These laws, regulations and requirements (which include the Directive on Waste Electrical and Electronic Equipment of the European Union (EU) and the EU Directive on Restriction of Use of Certain Hazardous Substances) govern, among other things, the generation, use, storage, registration, handling and disposal of chemicals and waste materials, the presence of specified substances in electrical products, the emission and discharge of hazardous materials into the ground, air or water, the cleanup of contaminated sites, including any contamination that results from spills due to our failure to properly dispose of chemicals and other waste materials and the health and safety of our employees. 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. Materials may face stricter regulations in end markets on end-of-life treatment, which could increase costs, require product redesign, and, if not managed effectively, negatively impact our brand reputation with customers and investors. If our operations fail to comply with such laws or regulations, we may be subject to fines and other civil, administrative or criminal sanctions, including the revocation of permits and licenses necessary to continue our business activities. In addition, we may be required to pay damages or civil judgments in respect of third-party claims, including those relating to personal injury (including exposure to hazardous substances that we generate, use, store, handle, transport, manufacture or dispose of), property damage or contribution claims. Some environmental laws allow for strict, joint and several liabilities for remediation costs, regardless of fault. We may be identified as a potentially responsible party under such laws. If we fail to comply with any such regulations or are subject to related liability, such developments could have a material adverse effect on our business, financial condition and results of operations.

If we do not generate net cash flow from operations and if we are unable to raise additional capital, our financial condition could be adversely affected and we may not be ableunable to execute our business strategy.

WeThe cannotCompany assurebelieves youit thathas wethe financial resources needed to meet its anticipated cash requirements during the next twelve months. Cash requirements for periods beyond the next twelve months will generatedepend cashon, fromamong operationsother orthings, the Company's profitability, and its ability to manage working capital requirements, and, if needed, its ability to identify and secure other potential sources to fund future working capital needs and meet capital expenditure requirements.

If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, divesting businesses, delaying capital expenditures, reducing the scope of our R&D programs, restructuring or incurring additional debtdebt, or obtaining additional debt financing or equity capital on terms that may be onerous or highly dilutive.dilutive or could include restrictive covenants. Our ability to obtain additional capitalrefinance or refinanceotherwise anyrepay our indebtedness willmay depend on, among other things, our ability to find a buyer for the assets andon the capital markets,markets and our financial condition at such timetime, andas thewell termsas andwhether conditionswe have a sufficient number of anyshares suchof financingauthorized orcommon indebtedness.stock available for issuance. We may not be able to engage in any of these activities or engage in these activities on desirable terms.terms, which could result in a default on our debt obligations. In addition, certain of our current debt agreements do, and any of our future debt agreements may, contain restrictive covenants that may prohibit us from adopting any of these alternatives or which may be violated if any such alternatives prove to be unsuccessful.

The lack of additional capital resulting from any inability to generate cash flow from operations or to raise equity or debt financing could force us to substantially curtail or cease operations and would, therefore, have an adverse effect on our business and financial condition. Furthermore, we cannot assureprovide youassurance that any necessary funds, if available, would be available on attractive terms or that they would not have a significantly dilutive effect on our existing stockholders. If our financial condition were to worsen and we become unable to attract additional equity or debt financing or enter into other strategic transactions, we would not be able to execute our business strategy and we could default on our debt obligations, become insolvent or be forced to declare bankruptcy.

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 5.875% convertible senior secured notes due 2030 ("the 2030 Notes") and the 0% convertible senior notes due 2026 ("the 2026 Notes") (collectively "the Notes") in cash, repay the Notes at maturity, or repurchase the Notes as required following a fundamental change.

As of December 31, 2024,2025, we had approximately $214.4$92.0 million and $3.9 million of outstanding principal of the Notes.2030 Notes and 2026 Notes, respectively. 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. Our business may not generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, divesting businesses, delaying capital expenditures, reducing the scope of our R&D programs, restructuring debt, or obtaining additional debt financing or equity capital on terms that may be onerous or highly dilutive.dilutive or could include restrictive covenants. Our ability to refinance or otherwise repay our indebtedness willmay depend on the capital markets and our financial condition at such time.time, as well as whether we have a sufficient number of shares of authorized common stock available for issuance. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations. In addition, certain of our current debt agreements do, and any of our future debt agreements may contain restrictive covenants that may prohibit us from adopting any of these alternatives.alternatives or which may be violated if any such alternatives prove to be unsuccessful.

In addition, holders of the Notes have the right to require us to repurchase all or a portion of their Notes upon the occurrence of a fundamental change (as defined in the applicable indenture governing the respective Notes) at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased. Holders of the 2030 Notes also have a one-time put right on June 23, 2028, to require us to repurchase all or a portion of their 2030 Notes for cash at 100% of the principal amount, plus accrued and unpaid interest. If the Notes have not previously been converted or repurchased, we will be required to repay such Notes in cash at maturity.

Our ability to make required cash payments in connection with conversions of the Notes, repurchase the Notes in the event of a fundamental change, or in connection with the holders' put right, or to repay or refinance the Notes at maturity will depend on market conditions and our future performance, which is subject to economic, financial, competitive, and other factors beyond our control. 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.

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. The engagement and retention of our global teams is dependent on maintaining an inclusivea culture where our people feel valued, respected, and have equal opportunities for growth and development.

While we aim to providedesign, provide, and administer competitive compensation packages to attract and retain top senior management and key employeestalent and engage in regular succession planning for these positions, larger competitors with more resources available to them can make it difficult for us to successfully compete for key talent. If we cannot attract and retain sufficiently qualified talent, such as engineers, scientists, and other key technically skilled employees, or have an adequate succession plan in place, we may be unable to develop, commercialize, and sell new or existing products and services. Furthermore, increasing competition for critical technical skills in the regions surrounding our facilities could require us to pay more to hire and retain key employees, thereby increasing labor costs.

As a result, fromFrom time to time, we evaluate acquisition candidates that fit our business objectives. Acquisitions involve certain risks and uncertainties, including, among others, the following:

•The inability to successfully improve operating efficiency and reduce costs through our restructuring initiativesinitiative;

Historically, we have grown both 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. We cannot be sure that our infrastructure, systems, procedures, business processes and managerial controls will be adequatescalable to support the growth in our operations. Any delays in, or problems associated with, implementing, or transitioning to, new or enhanced systems, procedures, or controls to accommodate and support the requirements of our business and operations and to effectively and efficiently integrate acquired operations may adversely affect our ability to meet customer requirements, manage our product inventory, and record and report financial and management information on a timely and accurate basis. These potential negative effects could prevent us from realizing the benefits of an acquisition transaction or other growth opportunity.

Our business may be affected by rapid technological change, changes in user and customer requirements and preferences, frequent new product and service introductions embodying new technologies and the emergence of new standards and practices, any of which could render our existing products and proprietary technology obsolete. Accordingly, our ongoing R&D programs are intended to enable us to maintain technological leadership. We believe, to remain competitive, we must continually identify product needs in the market, effectively define product specifications and performance to satisfy market needs, and timely launch new products to market.market, and effectively execute our sales strategy and go-to-market approach. However, there is a risk that we may not be able to:

•Respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis; or

•Recruit or retain key technology employees.employees, or

Our regenerative medicine programbusiness 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 the technical achievement of viable product candidates may not be achieved. Despite significant investment requirements, our regenerative medicine efforts may result in only nominal revenue with no guarantee of future revenue growth. Our development efforts remain subject to risks includingincluding, but not limited to, ongoing funding commitments from our development partners and unanticipated technical or other hurdles to commercialization. For example, in the first quarter of 2024, revised funding arrangements with our key strategic partner refocused the Company’s continuing organ program on developing the capability to print human lung scaffolds, and away from developing the capability to print scaffolds for livers and kidneys. Any products developed through our research efforts are subject to safety, regulatory and efficacy risks that may result in delays to commercialization, cause us to incur additional expenses or fail to achieve commercialization. In addition, any products that achieve commercialization and regulatory approval are subject to market risks including reimbursement from third-party payers and competition from existing or new products that aim to address similar indications. In addition, difficulties in our research efforts may lead to disputes with 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.

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. Changes in U.S. federal administration priorities, policies or interpretations of these laws may increase compliance costs, create uncertainty, or heighten enforcement risk.

Doing business on a worldwide basis requires us to comply with the laws and regulations of the U.S. government and various other foreign jurisdictions. These laws and regulations place restrictions on our operations, trade practices, partners and investments. U.S. federal trade, sanctions, export control and regulatory policies have been subject to increased change and unpredictability in recent years, including the imposition, modification or expansion of tariffs, sanctions, export controls and regulatory requirements, which could adversely affect our business, supply chain, customers and partners.

In particular, our operations are subject to U.S. and foreign anti-corruption and trade control laws and regulations, such as the Foreign Corrupt Practices Act (“"FCPA”") and United Kingdom Bribery Act (the “"Bribery Act”"), export controls and economic sanctions programs, including those administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“"OFAC”"), the State Department's Directorate of Defense Trade Controls (“"DDTC”") and the Bureau of Industry and Security (“"BIS”") of the Department of Commerce. U.S. enforcement agencies may increase or shift enforcement priorities, investigative activity, penalties or interpretive guidance. As a result of doing business in foreign countries and with foreign customers, we are exposed to a heightened risk of violating anti-corruption and trade control laws and sanctions regulations.

As part of our business, we may deal with state-owned business enterprises, the employees of which are considered foreign officials for purposes of the FCPA’s prohibition on providing anything of value to foreign officials for the purposes of obtaining or retaining business or securing any improper business advantage. In addition, the provisions of the Bribery Act extend beyond bribery of foreign public officials and also apply to transactions with individuals that a government does not employ. Some of the international locations in which we operate lack a developed legal system and have higher than normal levels of corruption. Our continued expansionpresence outside the U.S., including in Brazil, China, India and developing countries, and our development of new partnerships worldwide, could increase the risk of FCPA, OFAC or Bribery Act violations in the future.

As an exporter, we must comply with various laws and regulations relating to the export of products and technology from the U.S. and other countries having jurisdiction over our operations. In the U.S., these laws include the International Traffic in Arms Regulations (“"ITAR”") administered by the DDTC, the Export Administration Regulations (“"EAR”") administered by the BIS and trade sanctions against embargoed countries and destinations administered by OFAC. Recent and potential future changes in U.S. export control classifications, licensing requirements, country restrictions, and end-use or end-user rules may limit our ability to sell products, delay shipments, increase compliance costs or require changes to our business practices. 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. Any failures to comply with these laws and regulations could result in fines, adverse publicity and restrictions on our ability to export our products, and repeat failures could carry more significant penalties.

In October 2017, we received an administrative subpoena from the BIS requesting the production of records in connection with possible violations of U.S. export control laws, including with regard to our former Quickparts.com, Inc. subsidiary. In addition, while collecting information responsive to the above-referenced subpoena, our internal investigation identified potential violations of the ITAR administered by the DDTC and potential violations of the EAR administered by the BIS. On June 8, 2018 and thereafter, we submitted voluntary disclosures to BIS and DDTC identifying potentially unauthorized exports between 2012 and 2017, including to China, of controlled items including technical data. In connectionFebruary 2023, the Company settled these matters with theseall matters,three agencies. In February 2026, DTCC approved the Company’s spend of the remaining suspended penalty balance, resulting in Augustno 2020,further wesuspended receivedpenalty twodue. federalOn grandFebruary jury20, subpoenas issued by2026, the U.S.DTCC District Court fornotified the NorthernCompany Districtthat it has closed the settlement agreement based upon the Company’s completion of Texas.all Therequired Companyterms. respondedSee Note 20,"Commitments and Contingencies," to theseour twoconsolidated subpoenasfinancial and fully cooperated with the U.S. Department of Justice (“DOJ“) in the related investigation.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 from November 2018 through October 2024 maintainedcreated a separate Compliance Committee of the Board of Directors to further enhance board oversight of compliance risks. 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. 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. We may also be subject to negative publicity related to these matters, which could harm our reputation, reduce demand for our products, solutions and services, result in employee attrition and negatively impact our stock price.

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. 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. 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. Although the Company is currently 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. 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. See also the risk factor below entitled “We are no longer eligible to use a Form S-3 registration statement, which could impair our capital-raising activities.”

Management, including our Chief Executive Officer and Interim Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024.2025. Based on its assessment, management has concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2024,2025, due to the following material weaknesses.

The following discussion and analysis should be read together with our consolidated financial statements, and notes thereto, included in Item 8 of this Form 10-K. Certain statements contained in this discussion may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those reflected in any forward-looking statements. See “"Risk Factors”" in Part I, Item 1A and “"Forward-Looking Statements.”" All amounts are in thousands, except share and per share amounts, or as otherwise indicated.

For discussion related to our results of operations and changes in financial condition for fiscal 20232024 compared to fiscal 2022,2023, refer to Part II, Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations" ("MD&A") in our fiscal 20232024 Form 10-K. Our fiscal 20232024 Form 10-K was filed with the SEC on AugustMarch 13,27, 2024. Discussion of our segment results for fiscal 2023 compared to fiscal 2022 have been included herein due to the retroactive application of the change in our segment measure of profitability to gross profit for all periods reported in our segment footnote. Refer to Note 21 for additional details.2025.

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”"). We provide comprehensive 3D printing and digital manufacturing solutions, including 3D printers for plastics and metals, materials, software, and services, including maintenance, advanced manufacturing and applications engineering. Our solutions support advanced applications in two key industry verticals: Healthcare Solutions and Industrial Solutions. We have over 35 years of experience and expertise, which have proven vital to our development of an ecosystem and end-to-end digital workflow solutions that enable customers to optimize product designs, transform workflows, bring innovative products to market and drive new business models.

In March 2025, the Company authorized the next phase of its multi-faceted cost savings and restructuring initiative (the “"2025 Restructuring Plan”"). The 2025 Restructuring Plan includes initiatives to deliver sustainable growth and profitability, enabled by a streamlining of both infrastructure and business processes, while consistently investing in core research and development ("R&D") activities to support long-term growth opportunities. TheAdditionally, expectedin annualMay savings2025, fromin response to the 2025uncertain Restructuringmacroeconomic Planenvironment, arethe significantCompany andannounced willan beginincremental cost reduction initiative focused on labor force reductions to bedeliver realizedincremental beginningcost in the first half of 2025.savings.

Information regarding risk factors appears in "Management's Discussion and Analysis of Financial Condition and Results of Operations - Information Relating to Forward Looking Statements," in Part I - Item 2 of this Form 10-Q and in "Risk Factors" in Part I - Item 1A of our 2025 Annual Report on Form 10-K. There werehave been no material changes during the three months ended March 31, 2026 to the risk factors previously reported in our 2025 Annual Report on Form 10-K.

This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is designed to provide a reader of our financial statements with a narrative from the perspective of management and is intended to help the reader understand the results of operations and financial condition of the Company. Our MD&A should be read in conjunction with our MD&A and Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the "2025 Annual Report on Form 10-K") and our Condensed Consolidated Financial Statements as of and for the three and six months ended MarchJune 31,30, 2026 included in this Form 10-Q.

In 2025, in response to continuing macroeconomic challenges impacting the Company’s financial performance, the Company implemented a series of cost savings and restructuring initiatives (the "2025 Restructuring Plan") as part of its ongoing multi-faceted transformation strategy. InThe MarchCompany 2025,does not expect to incur significant additional restructuring charges in 2026 related to the Company2025 authorizedRestructuring and began executing the next phase of its cost savings and restructuring initiative which includes initiatives to deliver sustainable growth and profitability, enabled by a streamlining of both infrastructure and business processes, while consistently investing in core research and development activities to support long-term growth opportunities. In May 2025, the Company announced and began executing an incremental cost reduction initiative focused on labor force reductions in response to continued uncertainty in the economy and our industry and the related potential negative impact on our financial performance.Plan.

In September 2025, the Company entered into a definitive agreement with Hubb Global Holdings, LLC for the sale of its 3DXpert and Oqton businesses, which were included in our Industrial Solutions segment, to Hubb Global Holdings, LLC.segment. On October 31, 2025, the Company completed the sale of the 3DXpert and Oqton businesses for $3.3 million in cash, which reflected applicable purchase price adjustments, plus a revenue-based royalty receivable which had a present value of $7.1 million.

The following table sets forth changes in our revenue for the three and six months ended MarchJune 31,30, 2026.

For the three months ended MarchJune 31,30, 2026, revenue increaseddecreased $1.0$0.3 million, or 1.1%,0.3%, compared to the three months ended MarchJune 31,30, 2025. The increasedecrease in revenue was driven by a $1.3 million decrease in service revenue primarily due to the impacts of lower recurring service revenue and divestitures, partially offset by higher revenue for personalized healthcare services and a favorable impact of foreign currency. The decrease in service revenue was mostly offset by an increase in product revenue of $3.0$1.0 million driven by higher materials and printer volume to customers in the dental and aerospacemedical and defensetechnology markets and a favorable impact of foreign currencycurrency, which was partially offset by unfavorable price/mix, lower volume in the jewelry marketmix and the impact of divestitures. Service revenue decreased $2.0 million due to the impact of the divestitures which was partially offset by increases in parts manufacturing.

For the three months ended MarchJune 31,30, 2026, cost of sales decreasedincreased to $61.2$60.1 million compared to $61.9$58.7 million for the three months ended MarchJune 31,30, 2025. TheFor decreasethe wasthree primarilymonths relatedended June 30, 2026, gross profit decreased $1.7 million, or 4.7%, and gross profit margin decreased to the36.4% impactcompared ofto divestitures38.1% in the prior year period. The increase in cost of sales and decrease in gross profit and gross profit margin were primarily related to unfavorable mix due to higher printer sales during the current period and the impact of divestitures, which was partially offset by increasedthe volumesrecovery inof printerstariffs andof materials.approximately $2.6 million during the three months ended June 30, 2026.

For the three months ended MarchJune 31,30, 2026, selling, general and administrative expenses ("SG&A") decreasedincreased $18.4$1.0 million, or 37.0%,2.9%, compared to the three months ended MarchJune 31,30, 2025. The year-over-year declineincrease in SG&A was primarily due to: the reversal of annual incentive compensation in the prior year period, partially offset by decreases due to the impact of our restructuring actions and divestitures.

•$12.4$10.9 million decrease in compensation and benefits expense primarily related to lower compensation expense due to the impact of our restructuring actions and divestitures and lower cash and stock-based annual incentive compensation;

•$4.4$4.7 million decrease in third-party service provider and consulting costs primarily due to lower audit and accounting fees during the three months ended March 31, 2026; and

•$1.2$1.6 million decrease in other corporate costs primarily related to reductions in facilitiesfacilities, and travel and entertainment costs due to the impact of our cost saving actions completed in the prior year.actions.

For the three months ended MarchJune 31,30, 2026, research and development expenses ("R&D") decreased $10.0$7.4 million, or 51.0%,42.6%, compared to the three months ended MarchJune 31,30, 2025. The year-over-year decline in R&D was primarily due to:

•$4.5$2.2 million decrease in other R&D expenses primarily due to lower operating supplies cost and lower outside services costs due to the impact of our cost saving actions in the prior year.actions.

For the three months ended MarchJune 31,30, 2026, Healthcare Solutions revenue increased $8.8$3.1 million, or 21.3%,6.8%, compared to the three months ended MarchJune 31,30, 2025. The increase in revenue was primarily due to an increase in materialsprinter volume in the dentalmedical markettechnology includingmarket, volumeincreased withpersonalized healthcare services and a key customer, increases in parts manufacturing and increased printer sales which was partially offset by unfavorablefavorable price/mix.

For the three months ended MarchJune 31,30, 2026, Healthcare Solutions gross profit increaseddecreased $6.3$1.2 million, or 39.1%,5.8%, compared to the three months ended MarchJune 31,30, 2025. The increasedecrease in gross profit was primarily due to higheran materialsunfavorable volumes.price/mix partially offset by the impact of the recovery of tariffs.

For the three months ended MarchJune 31,30, 2026, Industrial Solutions revenue decreased $7.8$3.3 million, or 14.7%,6.7%, compared to the three months ended MarchJune 31,30, 2025. The decrease was primarily due to the impact of divestitures and loweran product volume in the jewelry market which was partially offset by favorableunfavorable price/mix and increased sales in the aerospace and defense market.mix.

For the three months ended MarchJune 31,30, 2026, Industrial Solutions gross profit decreased $4.6$0.5 million, or 27.7%3.2% compared to the prior periods.period. The decrease in gross profit was primarily due to unfavorable mix partially offset by the impact of divestitures,the lowerrecovery salesof volumes and unfavorable price and mix.tariffs.

Non-operating (loss) income (expense)

The following table sets forth the components of non-operating (loss) income:

Foreign exchange gain,gain (loss), net

Foreign exchange gain, net increased by $1.5$3.1 million and $4.6 million for the three and six months ended MarchJune 31,30, 20262026, respectively, compared to the same prior year period,periods, primarily due to realized and unrealized gains related to our foreign operations.

Interest income decreased by $0.4$1.1 million and $1.5 million for the three and six months ended MarchJune 31,30, 20262026, respectively, compared to the same prior year period,periods, due to the Company's lower average cash and cash equivalent balances.

Interest expense increased by $1.6$1.5 million and $3.0 million for the three and six months ended MarchJune 31,30, 2026, respectively, compared to the same prior year period,periods, primarily due to interest expense related to the 2030 Notes.

Other (loss) income, net

Other (loss) income, net, increaseddecreased $3.7$7.9 million for the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025, primarily due to a $2.6 millionthe gain on our equity method investment in the National Additive Manufacturing Innovation ("NAMI") joint venture becauserepurchase of adebt dilution in our ownership sharerecognized in the three months ended MarchJune 31,30, 2026.2025 related to the extinguishment of a portion of the 2026 Notes.

For the three and six months ended MarchJune 31,30, 2026, the Company’s effective tax rate was (72.23.1)%.% and (13.5)%, respectively. For the three and six months ended MarchJune 31,30, 2025, the Company’s effective tax rate was (1.9)%.9.4% and 14.4%, respectively. The differences between the U.S. statutory tax rate and the effective tax rates for the three and six months ended MarchJune 31,30, 2026 and 2025 were primarily driven by the recognition of a full deferred tax asset valuation allowance in various jurisdictions in both years.

The following table sets forth the Company's operating working capital at MarchJune 31,30, 2026 and December 31, 2025.

At MarchJune 31,30, 2026, cash, cash equivalents and restricted cash totaled $86.5 million. Cash and cash equivalents totaled $85.1$128.0 million and decreasedincreased $10.6$32.3 million since December 31, 2025. This decreaseincrease resulted primarily from cash received from the equity raise of $53.8 million, partially offset by cash used in operations of $7.2$14.1 million and capital expenditures of $2.1$5.9 million.million during the six months ended June 30, 2026.

Cash held outside the U.S. at MarchJune 31,30, 2026 was $32.6$35.8 million, or 38.3%28.0% of total cash and cash equivalents, compared to $33.0 million, or 34.5% of total cash and cash equivalents, at December 31, 2025. As our previously unremitted earnings have been subjected to U.S. federal income tax, we expect any repatriation of these earnings to the U.S. would not incur significant federal and state taxes. However, these dividends are subject to foreign withholding taxes that are estimated to result in the Company incurring tax costs in excess of the cost to obtain cash through other means. Cash equivalents are comprised of funds held in money market instruments and are reported at their current carrying value, which approximates fair value due to the short-term nature of these instruments. We strive to minimize our credit risk by investing primarily in investment grade, liquid instruments and limit exposure to any one issuer depending upon credit quality. See “Cash Flow” discussion below.

The Company currently funds its operations, including working capital requirements, capital expenditures and investments by using cash; cash equivalents; cash flow from operations, which can vary widely from quarter to quarter; and investing and financing activities, as necessary. We expect that cash flow from operations, cash and cash equivalents, and other sources of liquidity, such as issuing equity or debt securities, subject to market conditions, will be available and sufficient to meet all our cash requirements over the next twelve months. Cash requirements for periods beyond the next twelve months will depend on, among other things, the Company's profitability and its ability to manage working capital requirements and, if needed, its ability to identify and secure other potential sources to fund future working capital needs and meet capital expenditure requirements. See Item 1A, "Risk Factors” in the 2025 Annual Report on Form 10-K.

We are subject to a financial covenant under the 2030 Indenture governing the 2030 Notes (the "2030 Indenture") requiring us to maintain at least $20.0 million in qualified cash. As of MarchJune 31,30, 2026, we were in compliance with the covenants included in the 2030 Indenture. However, if we are unable to generate sufficient cash flow in the future, we may be non-compliant which could result in an event of default making the 2030 Notes, with an outstanding principal balance of $92.0 million as of MarchJune 31,30, 2026, due immediately. See Item 1A "Risk Factors” in the 2025 Annual Report on Form 10-K The following is a summary of the changes in the Company’s cash flows followed by a brief discussion of these changes:10-K.

Cash flows used in operating activities were $7.2$14.1 million during the threesix months ended MarchJune 31,30, 2026, a decrease of $26.6$45.5 million, as compared to the threesix months ended MarchJune 31,30, 2025. The year-over-year change in operating cash flows was primarily attributable to more favorable business performance during the followingcurrent factors:year due to our 2025 Restructuring Plan and other cost savings initiatives, partially offset by higher cash taxes paid of $6.1 million driven by foreign taxes related to the 2025 divestiture of the Geomagic business and $2.9 million in higher interest paid on the 2030 Notes as interest payments did not start until December 2025.

The 2030 Notes are senior secured obligations, guaranteed by certain U.S. subsidiaries of the Company (the "Note Parties"), and bear interest semiannually at a rate of 5.875%, payable on June 15 and December 15 of each year, beginning December 15, 2025.

The 2026 Notes have an annual effective interest rate of 0.594%, reflecting original issue discounts, commissions, and offering expenses. The 2026 Notes are scheduled to mature on November 15, 2026, unless earlier redeemed, repurchased, or converted in accordance with their terms At MarchJune 31,30, 2026, we had $96.0 million of outstanding long-termprincipal balance of debt, comprisingcomprised of $3.9 million of 2026 Notes and $92.0 million of 2030 Notes. Management may consider pursuing additional long-term financing if it is appropriate in light of cash requirements for operations or strategic opportunities, which could result in higher financing costs.

We have purchase commitments under legally enforceable agreements for goods and services with defined terms as to quantity, price and timing of delivery. The Company has certain purchase commitments under agreements with remaining terms in excess of a year, which primarily relate to software licenses, printer assemblies, inventory and capital expenditures. As of MarchJune 31,30, 2026, such purchase commitments totaled $20.4$21.7 million, with approximately $8.0$9.4 million, expected to be due within the next twelve months.

The Company had operating and financing lease obligations (inclusive of interest) of $80.5$78.4 million at MarchJune 31,30, 2026, primarily related to real estate and equipment leases, of which, approximately $14.9$15.0 million in payments are expected over the next twelve months.

For a discussion of critical accounting estimates at December 31, 2025, refer to Item 7 “Critical Accounting Estimates” in our 2025 Annual Report on Form 10-K. During the threesix months ended MarchJune 31,30, 2026, there have been no material changes to our critical accounting estimates described in our 2025 Annual Report on Form 10-K.