The call in brief

3D Systems' second-quarter 2026 call carried two headlines: improving results signaling a recovery in additive manufacturing, and the launch of a CEO leadership-transition plan for Dr. Jeffrey Graves. Revenue rose 1.4% year-over-year (on an adjusted basis excluding 2025 software divestitures) to $94.6 million, but the underlying story was a return of customer capital spending: printer (hardware) sales jumped more than 45% year-over-year, led by the DMP 350 metal system (up ~90%) and the new SLA 825 polymer platform (up ~125%). Three of the four strategic focus markets -- med tech, aerospace and defense, and data center infrastructure -- each grew double digits, and the company booked its strongest industrial polymer order since 2014, a large multi-quarter order for printers used to produce reusable rockets. Healthcare, the largest segment, grew 6.8% to $48.1 million on med tech and NextDent denture-printer adoption, while the industrial segment declined 3.7% on legacy and non-core softness. Adjusted EBITDA improved notably to near breakeven, helped by roughly $60 million of run-rate cost reductions and $2.6 million of tariff refunds, though non-GAAP gross margin of 36.7% was pressured by a heavier hardware mix. Management guided to mid-single-digit sequential revenue growth but a small adjusted-EBITDA loss in Q3, and continues to guide only one quarter out given macro volatility. The path to profitability hinges on volume-driven margin expansion through high-margin polymer materials pull-through and metal-part production. Graves framed the transition as handing a well-positioned, refreshed, cash-rich company to a successor with a long runway, while remaining in the role for months during the search.

What went well
  • Printer (hardware) sales grew more than 45% year-over-year (and over 20% sequentially), led by the DMP 350 metal system, the new SLA 825 polymer platform, and MultiJet/NextDent denture systems, as customer capital spending returned across key markets.
  • Three of the four strategic focus markets -- med tech, aerospace and defense, and data center infrastructure -- each delivered double-digit year-over-year growth.
  • The two flagship metal-path platforms saw exceptional demand, with DMP 350 up roughly 90% and SLA 825 up roughly 125% year-over-year.
  • The company booked its strongest industrial polymer printer order activity since 2014 -- a large multi-quarter order for printers critical to producing reusable rockets -- with some units shipped in Q2 and a high-margin consumable-materials stream to follow.
  • Adjusted EBITDA improved notably year-over-year to near breakeven on higher revenue, disciplined cost management (~$60 million of run-rate cost reductions), and operational efficiencies, aided by $2.6 million of tariff refunds in the quarter.
  • Healthcare, the largest segment, grew 6.8% to $48.1 million on strong med tech demand (orthopedic implant OEMs) and continued NextDent 300 denture-printer adoption across the U.S. and Europe.
What went wrong
  • Total revenue of $94.6 million rose only 1.4% year-over-year (on an adjusted basis excluding 2025 software divestitures), as strength in the four core markets was offset by weaker legacy and consumer-facing businesses.
  • The industrial segment declined 3.7% year-over-year to $46.5 million, reflecting revenue that did not carry forward after closing a non-core product line and lower services revenue on the legacy installed base.
  • Non-GAAP gross margin of 36.7% was pressured by a higher mix of (lower-margin) hardware printer sales, a less favorable materials mix, and a tough comparison to a prior-year regenerative-medicine milestone.
  • The company remains just below positive adjusted EBITDA and guided to a small loss in Q3, still needing volume-driven margin improvement to cross into profitability.
  • Consumer-facing industrial markets -- service bureaus, jewelry (heavily Middle East-exposed) -- remained challenged, including from Chinese competition, and are not areas of future growth investment.
  • The company announced a CEO leadership transition, launching a search for a successor to Dr. Jeffrey Graves, introducing near-term leadership uncertainty even though he will remain for months during the process.

Management Commentary

Monica Gould
VP of Investor Relations, 3D Systems

Hello. Welcome to 3D Systems Q2 2026 earnings conference call. With me on today's call are Dr. Jeffrey Graves, President and CEO, and Phyllis Nordstrom, Chief Financial Officer. The webcast portion of this call contains a slide presentation that we will refer to during the call. Those following along on the phone who wish to access the slide portion of this presentation may do so on the investor relations section of our website.

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

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

Jeffrey Graves
President and CEO, 3D Systems

Thank you, Monica. Good morning, everyone. Today's call is accompanied by two important announcements: our earnings results and the beginning of a leadership transition plan, both of which I will address this morning. I will begin by reviewing a few important highlights from our Q2 and H1, as well as provide updates on several of our key market focus areas. After that, I'll address this morning's leadership announcement.

I'll then turn the call over to Phyllis Nordstrom, our CFO, who will summarize the quarter's financial results and outlook, and will then open the call up for Q&A. With that, let's turn to slide five. A major theme clearly emerging this year is the return of capital spending by our customers in key markets. The timing is excellent, given the intense focus we've placed on refreshing our product portfolio over the last three years.

In the Q2, printer sales increased by more than 45%, led by our best-selling DMP 350 metal printing system, our new SLA 825 flagship polymer platform, and our MultiJet printing systems that form the cornerstone of our new denture product line.

I'll comment on each of these in the context of their market drivers in a few moments. From a business unit standpoint, our healthcare business once again delivered solid growth and remained the company's largest segment, driven in particular by strong demand for new printing systems in both med tech and dental markets.

Industrial business revenue was modestly lower year-over-year as older systems in our installed base are now being increasingly replaced by our new printer platforms. Despite this dynamic, our two key industrial focus markets, aerospace and defense and data center infrastructure, both delivered strong double-digit growth again this quarter.

I'll share a few highlights on those markets momentarily. Moving to slide six. Our newest generation of 3D printers offer levels of precision, economics, and robustness that were only dreamed of a few years ago. These advancements are now proving essential to the widespread adoption of 3D printing in key production environments. One of the clearest trends is the accelerating use of 3D printing in metal component manufacturing.

As we've discussed on previous calls, there are two equally important paths to producing metal parts. Direct metal printing using laser powder bed fusion and metal castings that rely on 3D-printed patterns as a critical step in the manufacturing process. To address each path, we've launched two important systems. Our DMP 350 triple laser direct metal printer and our SLA 825 dual laser polymer printing system designed for high-quality metal casting patterns.

Sales of both platforms into our key markets have been very strong, with Q2 growth of roughly 90% and 125% respectively year-over-year. Given this rapid rise in demand for 3D-printed metal parts, we're also significantly expanding our internal metal parts production capacity. This is an important element of our growth strategy, and I'll touch on it in more detail in a few moments.

The third breakthrough product we have brought into the market is the NextDent 300, purpose-built for the production of dentures. This platform is being very well received because of its precision and economics, enabling dental professionals to deliver a high-quality, durable product that improves the patient experience while increasing the productivity of their practices. These technologies will continue to enable our success in key markets for years to come. On to slide seven.

As proud as I am of our refreshed product portfolio, it would mean very little if we did not target these systems effectively at markets moving most decisively toward the adoption of additive manufacturing technologies. Four markets fit this profile very clearly. Med tech, dental, aerospace and defense, and data center infrastructure. Two of these sit in our healthcare business and two in our industrial business.

Customers in these markets derive exceptional value from 3D printing, from enhanced design flexibility that improves both performance and cost to reduce supply chain risk in an increasingly volatile world.

With limited time on each quarterly call, I'll focus on a few key use cases that I hope will capture the excitement and momentum these four markets provide. Moving to slide eight, I'll start with aerospace and defense, with a specific focus this quarter on space applications.

Phyllis Nordstrom
CFO, 3D Systems

Thank you, Jeffrey, and good morning, everyone. Before I begin, Jeffrey, I want to thank you for your leadership over the past six years. Through a period of industry challenges and considerable change, the company made notable progress in strengthening its operational foundation and streamlining its cost structure while also refreshing the product portfolio and sharpening our focus on four important growth markets.

These efforts have established a solid foundation enabling us to build on our strategy moving forward. We are grateful for your continued service to the company during the transition. Thank you very much, Jeffrey. With that, let's now turn to our financial presentation. Before beginning our review, I'd like to remind you that we completed the divestiture of our legacy software businesses during 2025.

As such, the comparisons I will reference today are presented on an adjusted basis, excluding the impact of these divestitures to provide a more meaningful apples-to-apples view of our operating performance across periods. With that, let's now begin on slide 17. As highlighted earlier in the call, our Q2 results reflect continued progress against our strategic priorities. Before I walk through the financial results in more detail, let me start with some highlights from the quarter.

Q2 revenue increased year-over-year, driven by strong demand across our target markets and increasing sales of our new polymer and metal printer platforms. Adjusted EBITDA also improved notably from the prior year period as a result of higher revenue, disciplined cost management, and ongoing operational efficiencies. Turning to our Q2 revenue performance. Revenue was $94.6 million, an increase of 1.4% year-over-year.

This increase was driven by continued momentum in hardware printer sales, which grew over 40% from the prior year period and more than 20% sequentially, as demand across several of our printer platforms continued to strengthen. Performance across our key strategic markets remained strong in the quarter as med tech, aerospace and defense, and data center infrastructure each delivered double digit year-over-year growth.

Within the med tech and aerospace and defense markets, we had strong demand for our DMP 350 metal printers, along with healthy sales of our SLA 825 polymer printer. Both of these platforms meaningfully contributed to revenue performance during the quarter. In data center infrastructure, revenue grew more than 20% year-over-year as a result of increasing demand for metal parts used in critical airflow and thermal management components for semiconductor manufacturing equipment.

Moving now to slide 18 to cover our business segments. Healthcare solutions remained our larger segment in the quarter, with revenue of $48.1 million, up 6.8% from the prior year period. Healthcare growth was driven by continued strength in our med tech market.

Demand for metal printers used by OEMs to produce orthopedic medical implants meaningfully increased during the quarter. Personalized Healthcare Solutions, our PHS business, benefited from growth in surgical planning and trauma applications.

Dental revenue also increased in the quarter, with steady demand for dental material sales and continued adoption of our NextDent 300 denture printer across both the U.S. and Europe. Turning to our industrial segment. Revenue for the Q2 was $46.5 million, down 3.7% from the prior year period and up 2.4% sequentially.

The decline primarily reflected revenue that did not carry forward following the closure of a non-core product offering last year, as well as lower services revenue on our legacy printer installed base. As we continue to see momentum in sales of our updated printer platforms, we believe the ongoing refresh of our installed base should position us to drive future recurring products and services revenue.

Looking across our industrial markets, aerospace and defense remained our largest market, with space and defense applications driving sales in the quarter. We also saw healthy year-over-year growth in data center infrastructure, resulting from increased demand for parts manufacturing, along with solid growth in materials and services revenue within automotive and motorsports. Turning to slide 19 to review gross margin. Q2 non-GAAP gross margin was 36.7%.

Gross margin performance in the quarter reflected offsetting factors, including a higher mix of hardware printer sales, less favorable materials mix, and the comparison to a large regenerative medicine milestone recognized in the prior year period. These headwinds were partially offset by the benefits of prior cost reduction actions and the recognition of $2.6 million in tariff refunds during the quarter.

Analyst Q&A

James Ricchiuti — Analyst, Needham & Company
Thank you. Good morning. First off, Jeffrey, congratulations, and I wish you the best.
Jeffrey Graves — President and CEO, 3D Systems
Thank you, James, very much. I appreciate that coming from you. I really appreciate it.
James Ricchiuti — Analyst, Needham & Company
It looks like some nice progress in the quarter. A couple of things. First off, how are you thinking about the NextDent deployment looking out to 2027, just based on what you're seeing in the market today?
Jeffrey Graves — President and CEO, 3D Systems
James, I would tell you I've been thrilled with the receptivity. We've been out there long enough now to really start getting some feedback from the end user, the patients, if you will, and the dentists. I knew it was an attractive product and that the performance was good. What I've been particularly pleased with, James, is the feedback we get on the comfort of fit the first time.
From a patient standpoint, they don't have to come back multiple times to have them adjusted, which you do with conventional dentures quite a lot. For the dentist, what that translates into is productivity. They can see more paying patients a day by doing that. All the stars align for dentures right now. I am thrilled with the uptake.
Now it's really about marketing to make sure more and more dental offices know of the availability of the product, then our direct sales activity to dental labs. There are a lot of them, James, and that's good and bad. It's nice to have a distributed customer base, so you don't have customer concentration. For a smaller company like ours, we also have to have
Really good direct salespeople and channel partners to get out there and touch those labs. Even when you concentrate it down, there's about 8,000 total labs between the U.S. and Europe. You focus it down, there are a few hundred that really drive a lot of revenue, that's still a large number. What I was really pleased about, James, is that we're now in about 100 of those labs with our first printers.
Some of them are buying second and third printers. That's the start of really building momentum. I think it'll take a couple of years to really build. If you look at, we've already revised our Q3 and Q4 production plan up twice this year, and we're starting to be a little, to be frankly, James, rate limited by electrical components that are going into data centers.
We're starting to have to buy ahead, make sure our supply chain is able to support our growth in the denture market. I am really pleased. I see no impediments. It's all a matter now of marketing and sales and really getting the message out about it. On the heels of the products we've already launched, we've got already a next generation product in the pipeline we're working on to make it even faster and better.
I'm thrilled. Just opening up the U.S. and Europe, James, could potentially bring a revenue stream that's several times the revenue stream we've had for teeth straightening, for the aligner product. The materials are regulated. They're FDA and EU MDR approved, so when you sell a printer, customers really are incentivized, if you will, by the regulatory environment to use your material.
I am thrilled with all aspects of that, James, and the quality of what we're shipping is outstanding. I think by 2027 and 2028, you'll see this revenue stream growing significantly. We've got other exciting growth markets, it's impossible to say what will be the single biggest in our company.
James Ricchiuti — Analyst, Needham & Company
That's great color. Phyllis, this may be a question for you. I'm wondering how we should be thinking about gross margins and OpEx in the back half of the year, if you're able to give us some color on where you see margin trends.
Phyllis Nordstrom — CFO, 3D Systems
Sure, James. Just looking at gross margins. Jeffrey mentioned in his script that we were going to be printer heavy in the back half of the year, particularly in Q4. That's always a very printer heavy quarter, given CapEx spending that occurs near the end of a calendar fiscal year. On the OpEx side, margins will be slightly impacted by that printer mix.
I would factor that in as you're looking forward in the H2. As it relates to OpEx, I think we've done a really good job over the first two quarters. I don't see that momentum changing. I think there's stability now in our OpEx performance. Looking in the back half of the year, I would expect what you saw in the H1 of the year to be pretty similar to the back half.
James Ricchiuti — Analyst, Needham & Company
Got it. Thanks very much.
Jeffrey Graves — President and CEO, 3D Systems
Hey, James, before you drop off, I just want to personally thank you. You have followed this company. I've known you a long time. You followed this company extremely well and our entire industry. Really appreciate the hard work you've done and the research you put out on us and others in this industry. Thank you very much for the support. It's obviously a bit of an emotional day for me, and I just want to say thank you personally very much.
James Ricchiuti — Analyst, Needham & Company
No, I thank you, Jeffrey, and again, I wish you the best.
Jeffrey Graves — President and CEO, 3D Systems
Thank you.
Greg Palm — Analyst, Craig-Hallum
Yeah. Thanks, Jeffrey. Wow. I think you mentioned almost 100 quarterly calls. That's a pretty impressive feat. That probably puts you in rare territory. Yeah, I'd like to just offer my congratulations on a pretty amazing career as well.
Jeffrey Graves — President and CEO, 3D Systems
Thank you, Greg. I really appreciate that, bud.
Greg Palm — Analyst, Craig-Hallum
Let's maybe start with that. The timing is a little bit interesting given, frankly, a lot of hard work over the last few years that's now, I think, put the company in a pretty interesting position to accelerate growth profitability. I guess the question is, why now? Why does the timing make sense? Just to be clear, has the search process already started? I just wonder how long this has been going on behind the scenes.
Jeffrey Graves — President and CEO, 3D Systems
No, it's just really getting underway, Greg. It could be a protracted period, Greg. I'm certainly not leaving right away. This could take many months to play out. It's just getting underway. I will say in terms of timing, Greg, it's a great question.
In addition to being a CEO, I've been on public company boards cumulatively for 35 years, through many different boards and public company boards, CEO transitions are always tricky. It's always an art. Many companies wait until a company has a real problem, there's an issue, and they're forced to make changes and make them as quickly as they can. I think 3D Systems now, we're in an enviable position.
We have made it through a really difficult period in this industry, where we had to cut an enormous amount of cost out of the business while maintaining our R&D portfolio spend in order to be ready for this resurgence and now out of the recession that I think you're going to see going forward.
The timing may look a little interesting from the outside, but I would tell you, we've got the company well-positioned now. When you go to look for a CEO, you can say to somebody, "Look, the hard work's done of leaning out the company, getting the portfolio refreshed, and focusing on the core markets. We're ready to rock, and we've got cash on the balance sheet to do it." That's a really attractive, if you will, advertisement for a CEO to come in that has maybe a 10-year runway.
I grew up at GE, where when you looked for a CEO, you wanted somebody with a decade runway. I've been at this for some time. It's not like I want to go sit on a beach somewhere, but it is an elegant time to hand to somebody and say, "You've got a run ahead of you now that's very positive." I think it's a good time to do this type of thing.
It may look a little different because it's not being driven by anything, but it is being driven more by an opportunity to the future to keep the momentum going in this company for an extended period of time, because our products tend to last 10 years or more.
The decisions that you make, they take several years to see them play out, and you want somebody in the chair that's going to see it through that whole process. That's what I would say is the timing. It's a positive thing for the future. I'll be here until we get a very good person in this seat to carry the ball forward. I am committed.
I love what we do. I love this company, frankly. I love our people and particularly our customers and our mission. I will ensure that to the best of my ability, that we get somebody that is credible, worthy of this position going forward, and can really carry the ball to new heights. That's the simple kind of long-winded explanation, Greg, for you. Okay?
Greg Palm — Analyst, Craig-Hallum
Yeah. No, I appreciate the thoughts. I wanted to maybe shift gears and talk about some of the highlights. You noted, I think what you said was a record industrial polymer printer order, or at least I think sort of strongest order activity,
Jeffrey Graves — President and CEO, 3D Systems
Yeah.
Greg Palm — Analyst, Craig-Hallum
Since 2014. Can you quantify that or give us some sense of what that represents in terms of the number of shipments and were some of those shipped? Are those from future delivery? I just wanted to be clear. I think you said that was casting for reusable rockets, but just wanted to confirm.
Jeffrey Graves — President and CEO, 3D Systems
Yeah, you certainly got the market right, Greg. In terms of the exact details of the order, I don't want to get to an order level of detail, I will tell you it spans multiple quarters. It's a very large order for printers that are critical to the production of reusable rockets, I just couldn't be happier about it.
When we accepted that order, I tell you, I was not only happy for the company, I was happy for our nation and the world. I think the revolution in space travel now is amazing. The cost they've brought out of doing that is incredible. 3D printing is really showing its potential to change the manufacturing environment for a company that'll embrace it and use it.
I love visiting that customer because I see every day how they're embracing new manufacturing technology, not only 3D printing, but other technologies that are really evolutions of our traditional industrial base. You say, "Wow." You guys are plowing new ground that is amazing to me. I look up in the sky at night, sometimes you can see the constellation of satellites that are up there, all based on their use of this kind of technology.
I could talk on and on about it. I love it. It spans multiple quarters. We did do some shipments in Q2. They wanted immediate delivery for as much as we could, and we've got much more ahead of us. Man, if we play it right, if we do a good job for them, it can be a revenue stream for many years to come.
Because it's a polymer-based product, you'll have consumable access to material sales that carry a high gross margin. Love the application. It's a model for us to follow in all of our core growth markets now. Okay? That's why I think you'll see a nice resurgence of industrial 3D printing in many markets now, Greg.
Greg Palm — Analyst, Craig-Hallum
Yeah. Okay. That makes more sense because I was going to segue into that and ask about Q3 because I'm not sure when the last time you actually grew sequentially from Q2 to Q3, it's mid-single digits at the midpoint.
Jeffrey Graves — President and CEO, 3D Systems
Yeah.
Greg Palm — Analyst, Craig-Hallum
It sounds like maybe it's a combination of this and some of the other stuff.
Jeffrey Graves — President and CEO, 3D Systems
Yeah.
Greg Palm — Analyst, Craig-Hallum
But,
Jeffrey Graves — President and CEO, 3D Systems
Well, the encouraging thing, Greg, is, yeah, this order was a really nice cornerstone to build on. We see strength. I'll ask Phyllis to comment on here in a second. We see strength. We keep talking about these four key growth markets, two in healthcare, two in industrial. They're all coming back, and they're doing well.
Quarter-by-quarter, there'll still be noise, but they are all doing well. Look, we still have exposure to other markets and stuff. That's why the whole company is not growing at this rate yet. You look at our four core growth markets, and they're all firing now on all cylinders. I think you'll see that going forward a lot. It starts with printer sales. We're selling a lot of printers into the field.
Material sales on the polymer side will follow, metal part sales will follow on the metal side. Phyllis, maybe you could comment for Greg on the core growth markets.
Phyllis Nordstrom — CFO, 3D Systems
Yeah. I think what I'm most excited about is not just seeing it concentrated in any one category. Greg, we're seeing it again across printers, materials, parts. Even within our healthcare services like PHS, there's an expectation that there is continued momentum from quarter to quarter. Oftentimes, we can be a little lumpy just depending on mix, I think we've got a good broad sort of growth story coming into Q3, which is why we set the range where we did. I'm very happy about that.
Greg Palm — Analyst, Craig-Hallum
Yep. Okay. I guess just last one in light of this positive commentary, I mean, across a whole bunch of end markets and product lines, and I'm cognizant of the fact that you only guide one quarter out, but I'm having a hard time not believing that this is kind of a growth company again, and you can maybe get back to double-digit growth. Do you have line of sight in returning to double-digit growth, whether that's next year, 2028?
Jeffrey Graves — President and CEO, 3D Systems
Well, Greg, yeah, you can certainly extrapolate that direction. Given the last two years of severe headwinds from this recession our industry's gone through, I hate to get it too far out in time because I just don't know what's going to go on in the world. Yes, I agree with you. That's the trend. We've taken the conservative approach now to just guide a quarter out, one foot after another.
That's where we're going. We try to give you color on the core markets, that we don't just hang our hat on a one-time event, like one big order, try to give you color on the core markets. Our four key growth markets are, I believe, long-term growth markets. They're looking really solid for years to come, I believe. I'm optimistic, I'm positive about the trajectory.
I don't want us to get out over our skis like so many times this industry has done. I just want to keep delivering on solid growth every quarter and improving profitability. That's why we're guiding Q3 and not the full year or 2027, okay?
Greg Palm — Analyst, Craig-Hallum
Yep, understood. I will leave it there. Best of luck going forward. Thanks.
Jeffrey Graves — President and CEO, 3D Systems
Thanks, Greg.
Kieran McCabe — Analyst, Cantor Fitzgerald
Hi. Yes, thank you for taking our question, and I want to thank Jeffrey Graves service to the company. I just started following this industry a few months when you joined 3D Systems, so I enjoy learning the industry as you're CEO of the company. I want to go and send my congratulations.
Jeffrey Graves — President and CEO, 3D Systems
Hey, Kieran, thank you very much for those kind comments, and please pass along my thanks to Troy as well, Troy Jensen, who has done an excellent job. Your colleague there at Cantor Fitzgerald, done an excellent job working not only with me and 3D Systems, but this entire industry, particularly through this difficult period the last couple of years. You guys have been there and done a terrific job, Kieran, so thank you.
Kieran McCabe — Analyst, Cantor Fitzgerald
Great. Will pass it on, and we appreciate it. I guess my question is maybe kind of a follow-up to the previous one, but maybe I guess in industrial, you said some of the end markets are price sensitive, were a little bit weaker, and maybe you can provide a little bit color on, like, aligner sort of. Are you seeing better visibility in those markets that may be more cycle, more price sensitive? Maybe are you kind of seeing some light at the end of the tunnel in those kind of markets that are maybe more tied to the economy?
Jeffrey Graves — President and CEO, 3D Systems
Kieran, I would tell you, dental as a whole has been a good story, and historically, it's been highly tied to the aligner market. We've ridden the ups and downs of that market. That market now, seen from everything I can see publicly and stuff, it seems to have stabilized at more modest growth rates but continue to be a growth market. I think that's a great foundational business. I do not put that in the category of severe external competition and things.
I think we've got a really deep relationship and foundation there. When you think about other markets that remain weak for us, it's on the industrial side of the business, outside of, it's easier to say what's out, outside of aerospace and defense and data center infrastructure. The more consumer-facing markets that we have are like the service bureaus that support consumer-oriented business.
The jewelry business happens to be not only a consumer-facing business, but also deeply embedded in the Middle East. Those kind of markets remain challenging, and that's why on the industrial side, you see that as pretty much an offset to the strength in the high growth markets. Over time, those high growth markets are going to become dominant. Aerospace and defense is already our biggest industrial segment, and it's got great legs to it.
Data center infrastructure, I think you're going to see the exact same thing. It's going to be a big market for us and a very good one. Part making to support those markets is going to be very big. Over time, we'll get less exposed to consumer-facing markets. Those are not markets that we're looking to make tremendous investments in for growth. They're certainly more competitive, particularly with Chinese products now.
We look more and more, they're good, they're foundational, but we're looking more and more to these high growth markets for our future investment, Kieran. Okay?
Kieran McCabe — Analyst, Cantor Fitzgerald
Right. You did a very strong improvement year in just EBITDA, nearly break to even. You're guiding to a small loss in the Q3. It seems like things are improving and have done $60 million in run rate cost reductions. I guess maybe what do you kind of view as the levers to get you over that hump to positive EBITDA and kind of a timing? I know you're kind of conservative on the outlook, you seem to be almost there, and you just need kind of a nudge to get to the positive side.
Jeffrey Graves — President and CEO, 3D Systems
That's right. Yep. It's like you're sitting at the table, you can smell dinner, it's not quite on the table yet. No. You're right. It's really tied to continued volume growth. We're getting that now in printers. It's great to have. We'll get volume efficiencies with that. We'll get gross margins up based on volume efficiencies there and stuff. The real payoff is going to come on material pull-through on the polymer side.
When those printers are installed and really running, we're going to get material pull-through that almost assuredly always follows. I mean, in many cases, it's a regulated environment, it has to follow. In other cases, our materials are just very attractive and are strongly preferred for our printers. You'll get material pull-through, which is important for our gross margins.
On the metal side of things, we've got what's emerging is this, I think, a relatively unique model where we now bridge customers from initial application development through part production, through printer sales. It's the rise of part production as a part of that model that's going to also drive our gross margins. The key to profitability for us is getting our gross margins up.
The linkage there is to consumables on the polymer side and metal parts on the metal side. I think that naturally follows from the growth we're seeing on printers right now. I'm thrilled with the outlook. I think it's rock solid in a very volatile world. We're in the markets you'd like to be in for growth and a bit of insulation from some of the day-to-day volatility, if you will.
Kieran McCabe — Analyst, Cantor Fitzgerald
Right. My final question, kind of personal interest in it's on the data center infrastructure, the slide you had powering the data center and the nuclear. Are you working a lot with the hyperscalers and data centers for powering more behind the meter at the site? Are you also working with large utilities and sort of the grid and generation offsite?
Jeffrey Graves — President and CEO, 3D Systems
Nope. We're working primarily with the traditional, first of all, the traditional OEMs. You've got people like GE Vernova, Siemens, others that are in the business of manufacturing power generation equipment using traditional means of like natural gas fire and gas turbines. You've got now these hyperscalers that have to basically bring their own energy, Kieran. I mean, it's too much for the grid to handle easily, they have to bring their own power.
I'm getting called into more and more meetings about things like small nuclear reactors for data centers. After not being in the nuclear business for a few decades as a country, I think you'll see a resurgence in nuclear power. Not necessarily the big power plants owned by utilities as much. Those take a long time to build. You measure it in decades sometimes.
You'll see nimble, smaller nuclear plants, I believe, powering big data centers. We're in direct discussions right now with the OEMs, the hyperscalers, that have to buy those products, their key suppliers that are going to supply them. Okay? Hyperscalers aren't going to manufacture the energy generally. They're going to rely on key suppliers to produce it. Those are the folks that we're getting down to now.
Kieran, I'd just point out, this Savannah River National Lab tie-in that we have now in South Carolina, they do marvelous work on nuclear power and fusion power, which is right on the cusp of being commercially viable. The materials they use are custom-made for 3D printing, if you will. They're high-temperature, difficult materials, very hard to manufacture through traditional means, and they're very expensive parts.
They're ideal for 3D printing, where you can bring the cost down and you can enhance the design capability of those components. That's what we're doing on the fundamental side is working with SRNL on leveraging their R&D. We're putting that technology into our printers now, and we're working with the hyperscalers to apply that technology.
That's where we're headed. I wanted to mention it because it's a future thing, but I think it's a really big deal, Kieran. When you look out a few years for us, I think energy will warrant its own discussion. It'll have its own revenue stream and profit stream from that. Okay?
Kieran McCabe — Analyst, Cantor Fitzgerald
Great. Thank you so much.
Jeffrey Graves — President and CEO, 3D Systems
You're welcome, Kieran. Thank you.
Jeffrey Graves — President and CEO, 3D Systems
Hey, Kevin, you've been our operator on these calls, I think since I arrived at this company over six years ago. You've done a marvelous job for us. In my mind, you're not only a hero for seeing us through these calls, but you represent hundreds of people that help us do what we do every day and communicate with the outside world.
I want to thank you personally and for all the folks that largely go unsung in getting information out on the company and helping us deliver every day. Thank you, my friend, for helping us through these calls, and I wish you the very best as well. With that, let me wrap up the call. Again, I will be here for months to come yet, most probably. I may see you on another earnings call. Thank you all for tuning in today.
Thank you for supporting our company, and we look forward to sharing our continuing results with you after the Q3.
Source: 3D SYSTEMS CORP earnings call transcript (2026-08-04). Management commentary and analyst Q&A are reproduced as delivered; speaker roles as stated on the call.

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