As a result of its new investment plan, Stratasys expects incremental annual operating expenditures of 2% of anticipated revenues for coming two to three years, with total operating expenses in 2015 to be in the range of 46% to 47% of anticipated revenues. Additionally, the Company expects to incur capital expenditures in the range of $160 to $200 million in 2015. The Company also expects an effective tax rate of 5% to 10%.

The Company continues to observe strong demand for its design and manufacturing enterprise solutions and expects growth in 2015 at a rate of more than 25% for these higher-end solutions. There are an increasing number of customer implementations of these systems in manufacturing-related applications where, after their qualification, the adoption of our solutions is expected to increase significantly. These implementations typically require a broad range of solutions, including systems, materials and manufacturing services. An additional opportunity for expansion of our customer base for manufacturing related applications is our newly initiated professional services, where we identify applications and educate our customers on best practices for additive manufacturing workflows.

Leading the new product category of desktop 3D printing, MakerBot has experienced rapid growth since inception, with sales expanding by over 600% from 2012 to 2014. MakerBot has sold over 80,000 units to date, with significant brand leadership. As MakerBot continues to scale, we expect to see continued evolution of, and investment in, its business, including its product development, sales and marketing and organizational structure.

The focus for 2015 in the desktop 3D printing category will be to execute our aggressive investment program designed to further product development, build infrastructures and maintain and expand brand leadership over near-term profitability. As market adoption continues to evolve and to the extent MakerBot continues to establish and expand sales channels, the Company expects MakerBot growth rates to ramp up to, or exceed, overall company averages by 2016.

“As a leader in 3D printing, Stratasys’ prospects for 2015 and beyond are strong,” said David Reis, chief executive officer of Stratasys. “Looking forward, we intend to build on our strong track record of execution and integration following the Stratasys-Objet merger. We continue to see additive manufacturing being used to transform manufacturing processes across a wide range of sectors, augmenting our leading position in prototyping applications. We are also excited about our opportunity to build upon MakerBot’s leading position in desktop 3D printing.”

Reis added, “We believe that now is the time to increase our investment in long-term innovation and development, as well as in our global sales and marketing infrastructure. We believe these increased investments will enable us to put greater focus on long-term manufacturing-related opportunities.”

Investment Plan

Specific areas of focus and goals for Stratasys’ new investment plan:

Industry focus

• Accelerated efforts around vertical applications and solutions focused on areas of business that Stratasys has identified as having high potential in the AM field, such as aerospace and automotive, healthcare and education.

Services

• Expansion of our newly branded Stratasys Direct Manufacturing (SDM) services (following the integration of Redeye, Solid Concepts and Harvest Technologies) to provide our customers with a broader range of AM technologies and solutions coupled with our in-depth process-specific expertise.
• Expansion of our SDM platform into additional geographies.
• Expansion of our professional services offering to allow customers to benefit from the company’s knowledge base and expertise related to AM and its implementation for design and manufacturing applications.

Products

• Increased focus on long-term innovation and development projects based on proprietary technology platforms, including acceleration of the on-going development of platforms in collaboration with industry-leading manufacturing enterprises.
• Increased focus on software development to drive collaboration and accessibility, thereby enhancing the ease-of-use with respect to the 3D printing process.
• Accelerated product introductions, including the introduction of new systems and additional proprietary materials.

Sales and marketing infrastructure

• Enhanced channel programs designed to increase capacity, productivity and coverage.
• Expansion of our account management efforts to further serve our customers.
• Enhanced brand recognition.