Stratasys Competitive Landscape Q3’19

Date: 2019 10 31 - Jon Hedlund

CONFIDENTIALITY NOTICE: This Newsletter, including any attachments, is the property of Stratasys and is solely for the use of the individual or entity intended to receive it. It may contain Stratasys confidential, proprietary and/or privileged information, and any unauthorized review, use, disclosure or distribution is prohibited. This Report is Proprietary & Private for Internal use only.

Topics Covered in this report

• Significant AM News from Q3’19

o Hardware Non-Metals Page 2

o Hardware Metals Page 10

o Software, Post Processing, Service Bureau Page 12

o Other News Page 13

• Context Summary Thru Q2’19 Page 15

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Significant AM News from Q3’19

(* In this section, Facts/Specs are in DARK BLUE, my opinions are in ORANGE)

Also included is an Impact level of the news based on how it will affect/impact Stratasys. (Low, Medium, High)

During Quarter 3, the TCT Show at Birmingham, UK took place September 24-26. Most of the announcements for the quarter took place at this show. There are a few more announcements coming in the run up to FormNext which is November 19-22. Most, if not all, of the products highlighted here can be seen at FormNext.

Hardware — Non-Metals

Material Extrusion

• Ultimaker Impact: High o S5 Pro Bundle ▪ New PRO bundle ($9,100) includes the S5, a new material station, and new air manager. o S5 Material Station ▪ $3,300 if bought separately. Sits underneath the S5. It holds up to 6 spools of material. It can auto detect the NFC chips on the Ultimaker materials. It keeps track of material usage and can auto change. When combined with Ultimaker Connect, it will switch to material spools needed for a queued job. ▪ It offers minimal moisture management (dries down to only 40% humidity) but not enough for moisture sensitive materials like Nylons. ▪ It does solve the issue of having to load and unload spools from behind the printer, which was difficult on the S5 and U3. ▪ Biggest benefit is the auto changeover of the material spools. Previously, the remaining material amount was not accurate and it was easy to run out of material during a print. ▪ They claim it reduces the need to employ a dedicated 3D printing operator. o Air Manager ▪ $795 if bought separately. Sits on top of the S5 and draws air from inside the printer and filters it via an EPA filter. They claim a 95% reduction of ultra-fine particles (UFP).

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The Air Manager also acts as a simple enclosure to create a more consistent printing environment, protecting prints from drafts and HVAC vents. ▪ The enclosure helps to trap heat and control drafts from the room. Air flow for filtering could counteract any of the benefits of an enclosure. The higher temp engineering materials will require the air flow for filtering to be reduced if they want to try to reduce warp or build higher density parts. ▪ Ultimaker published a Whitepaper on 3D printer emissions and indoor air quality. In it, Ultimaker basically says the air manager “checks a box” regarding ultra-fine particles so you can focus on printing. This report could be used against us as Ultimaker has answered the UFP question about their S5 printer. Customers may ask us to show them our printers results with UFP. ▪ The Ultimaker testing shows that a sealed system is not required to significantly lower UFP emissions. o S3 ▪ Slight upgrade from the Ultimaker 3, with a $900 price jump ($4,395) ▪ Differences include touchscreen, advanced leveling, and upgradable to a hardened extruder for filled materials ▪ The new add-ons (Material Manager and Air Manager) for the S5 do not work for the S3. ▪ The printer capability has not changed from the U3 except that it has a hardened drive gears and nozzle for composite materials. • Continuous Composites Impact: Medium o Partnering with Arkema to use Arkema’s UV resins with their continuous fiber 3D printing technology • Essentium Impact: Medium o Ramping production of their HSE 3D printer o Appointed Benoit Valin (formerly at Ultimaker) as the general manager of Asia Pacific and Cyprien Decouty (formerly at AON3D and Formlabs) as Channel Sales Manager for EMEA o Lawsuit Update - Essentium moved to dismiss most of the allegations. They deny any wrongdoing • Makerbot Impact: High o Method X

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▪ Priced at $6,499. Same as the Method with the addition of ABS, ASA, and SR-30 Soluble support. Higher Chamber temp of 100C. It will also print PLA, Tough, and PETG with PVA support with different print cores. 152 x 190 x 196 mm build volume. ▪ The Method’s price was reduced to $4,999. PETG was recently added as a higher performance material than PLA. ▪ The main F120 advantages over the Method X are: • Significantly larger build volume • Much quieter during printing • STL file fixing • Print queuing • Zortrax Impact: Medium o Endureal 3D Printer – FDM ▪ 400 x 300 x 300 mm, 200 C Chamber, Dual extruder, full bellows, new safety and reliability features and sensors, heated filament compartment ▪ PEEK and other high performance materials capable ▪ Soluble support for PEEK (competitors are starting to use VXL 111 from Belland Technology for high temp materials, very similar to our support) ▪ Shipping late Q1’2020, price reported to be very competitive with similarly capable printers ▪ Zortrax desktop printers have lost popularity lately and not progressed in capability. Can they make the significant jump into industrial high temp printing? ▪ How are they going to provide service for this system with their reseller currently not providing service • MiniFactory Impact: Low o Announced Aarni – qc monitoring to ensure the process and part properties. • 3ntr Impact: Medium o Released the Vento, a filament drying unit. Handles up to 5kg spools. 920W heater. For all polymers except PLA and PETG. NFC reader to automatically set the drying parameters o Released the Storm HEPA and VOC filtering unit. Can hold up to 3 Vento units. Comes with a print server and integrated web cam. Also includes 3KvA battery backup. o Released the Kratos hardened nozzle. Sintered Tungsten/cobalt carbide for use with abrasive materials.

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• 3DGENCE Impact: Medium o Launched an Arkema based PEKK supplied by Kimya that is compatible with their ESM-10 soluble support. This support also works with PEEK. See the Zortrax section for more info on the support. The PEKK can be printed in their F340 Industry printer (~$22K) • Raise3d Impact: Low o Announced the E2 desktop printer (FFF). Price around ~2,500 Euros, build volume of 330x240x240 mm, independent dual extruders, auto bed leveling. Shipping November 2019. • OVE Impact: Low o Full color printer to be shown at FormNext. It is like the XYZ color printer in that it uses FFF to print translucent material and then uses a Memjet inkjet head to print color on the edges of each layer. Based in Poland, The print size is the size of an A4 sheet (210x297mm). Just like XYZ, the color looks to be blurry and washed out. • FELIXprinters Impact: Low o FELIX BIO 3D printer will be shown at FromNext. Developed in process with the Technical University of Denmark. • AREVO Impact: Low o Announced a partnership with bike design and production company Pilot Distribution Group BV. Arevo will produce 3D printed carbon fiber frames for new series of Pilot e-bikes. This is the third bike focused collaboration for Arevo. • WEBER Additive Impact: Low o Large scale additive manufacturing developer Ai Build has entered into a partnership with German industrial equipment supplier Hans Weber Maschinenfabrik. The resulting printer (The WEBER Additive DX) will be displayed at FormNext. AiSync from Ai Build is specifically developed to program multi-axis toolpaths capable of controlling a 6-axis robotic arm. • Hydra Research Impact: Low o Launched the Nautilus 3D printer with quick change magnetic tool cartridge system using E3D V6 hotends. Newer company based in Portland, Oregon. Prices start at $2,500. • Airwolf 3d Impact: Low o EVO R ▪ New desktop FFF printer aimed at Education. Build volume of 300x220x229 mm. Priced at $4,999. 7” touchscreen, HEPA filtering, Complimentary training for educators and free curriculum.

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▪ Mostly seen on the West Coast. Printers range from $5K to $12K. They offer service extended service plans, but are limited due to only their factory offering repairs (Southern California) o Wolfbite Build Plate Adhesives Patent ▪ Received a US patent for their Wolfbite build plate adhesives. ▪ Materials they have solutions for include ABS, PETG, TPE, TPU, PLA, PC, PC/ABS, Nylon, and PP. ▪ Known more for their build plate adhesives. Wolfbite offers a solution that allows FFF printers to get materials to stick to a build platform. By assuring the part sticks to the build plate, they reduce the amount of curl when printing at lower temps. Wolfbite can also be used to limit the amount of build plate adhesion for materials that stick too well. • LEHVOSS Impact: Medium o Highlighting 4 new materials for FFF printing at FormNext. PA-based, PET-based, and two CF versions. o Also emphasizing an Ultimaker partnership, where they are working with TUV SUD to certify the use of LUVOCOM 3F filaments for the S5 Pro Bundle print system • Evonik Impact: Low o Launching a “ready-to-use” materials campaign and FormNext. Some featured materials will be a copolyester, Polyamide 613 (SLS), PEEK filament, and bioresorbable RESOMER filament and powders • Gantri Impact: Low o Dancer 3D Printer ▪ Gantri created a unique 4 extruder printer that they use in-house to produce lampshades and designer lights. Their products are shaped like vases, and don’t require infill allowing the printed part be rotated on a lazy susan below the extruders. The extruders continuously extrude even as the layers are finished and new layers are started. The best way to explain it is a 4-start leadscrew. Each extruder is one of the flutes, and all start extruding and continue as the part rotates below. The build speed is impressive with 4 extruders constantly printing. It is worth a look. They don’t plan on selling it as they will keep it internal for their own production.

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Vat Photopolymerization

• 3D Systems Impact: Medium o Introduced 5 new materials for the Figure 4 Platform ▪ Figure 4 PRO-BLK 10 for end use plastic components. No thermal cure needed ▪ Figure 4 EGGSHELL-AMB 10 is process-optimized for the production of sacrificial tooling for casting true silicone components ▪ Figure 4 HI TEMP 300-AMB, ultra-high temperature (up to 300 °C) rigid plastic that is ideal for production applications like high-temp component testing, stators and motor enclosures. ▪ Figure 4 FLEX-BLK 20 is a flexible material with good durability, high impact and fatigue resistance. It also reportedly has long term environmental stability making it suitable for functional assemblies and prototypes for automotive, consumer goods and electronics applications. (Very slow rebound) ▪ Figure 4 RUBBER-BLK 10 is a high-tear strength, malleable material that was developed for prototyping hard, rubber-like parts, such as grips, handles and couplings o New CFO, Todd Booth (former CFO of Teledyne Marine) replaces the retiring John McMullen • Carbon Impact: Medium o New RPU 130 material ▪ Offers material properties similar to injection molded materials. Heat deflection temperature of 120C (ABS is ~95C), and an IZOD notched impact resistance on par with PP ▪ 30% of RPU 130 is made with Dupont sustainable raw materials ▪ Requires use of a new C5 heated print cassette o Printing high end bike saddles for the cycling industry. They utilize lattice structures and their EPU materials. ▪ Specialized S-Works Power Saddle ▪ fizik Adaptive Saddle ▪ Another application like midsoles and helmet liners where foam is replaced by printed lattices. o Printed Sunglasses by JINS, a Japanese luxury eyewear brand o Lucitone Digital Print Dentures with Dentsply Sirona

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▪ Digital workflow and material system that ultilizes Dentsply Sirona’s IPN 3D line of denture teeth. The denture bases are designed and then printed with the Carbon 3D printer (8 bases take 2 hours to print). Then the teeth are bonded to the base (14 teeth take 12 minutes to bond) ▪ A big deal as it fits into a labs existing workflow. It addresses the short comings of 3D printed teeth not being strong enough to take bite forces and continual wear. o Protolabs now offers Carbon 3D printed parts • Structo Impact: High o Closed on a round of funding which will enable new automated products for mass production. Structo is solely focused on Dental with their LCD based UV resin printers, specifically with dental arches for clear aligners. • Origin Impact: Medium o Has begun shipping their resin based open platform Origin One printer. • RPS Impact: High o NEO800 Material Development Kit - SLA ▪ Smaller sized vats and software that allow for quick iterative material development without having to fill up a giant vat with resin. ▪ 1L Vat with Build size of 45 x 165 x 40mm. Allows for single layer prints to determine exposure and to determine best settings for mechanical properties ▪ Software allows testing of multiple materials at different stages of the development process ▪ 13L vat with build size of 230 x 165 x 150 allows for building prototype parts for optimizing the final configuration settings. ▪ This is an important tool to allow resin manufacturers to quickly develop materials for SLA platforms. A similar kit would make a great addition to the V650 platform and incentivize material manufacturers to buy systems for material development. • Envisiontec (no new announcements just updates) Impact: Medium o Envision One CDLM – DLP ▪ $15K – Context reports high sales growth of this printer in DLP segment o Partnering with Loctite, showing resins now compatible with Envisiontec CDLM printers ▪ LOCTITE 3D Printing General Purpose 3840 • Offers enhanced flexibility for snap fit parts.

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▪ LOCTITE 3D Printing High IMPACT 3870 • Designed specifically for durability and impact resistance. ▪ LOCTITE 3D Printing High TEMP 3860 • Exhibits high heat deflection temperature (HDT) and good print resolution. ▪ LOCTITE 3D Printing Ultra-CLEAR 3820 • Offers excellent print resolution and high optical clarity. ▪ LOCTITE 3D Printing Elastomeric 5010/5015 • COMING SOON – UV cured Silicone, Shore 60A and 80A. o There may be a possibility of an open material DLP system in the future – rumor heard from an Envisiontec employee. • AddiFab Impact: Low o Received investment from Mitsubishi’s US venture arm. AddiFab prints single use injection molds that dissolve to leave the molded part. • DSM Impact: Low o Working with Twikit to enable customizable prosthetics and orthotics which will be unveiled at FormNext.

Powder Bed Fusion

• EOS Impact: Low o TPU 1301 ▪ New TPU (SLS) for use in production of footwear, lifestyle, and automotive applications. Offers a great resilience after deformation, very good shock absorption, and very high process stability, at the same time providing a smooth surface of the 3D printed part. Developed with BASF. ▪ This is EOS’s answer to Carbon and HP for footwear midsole production and other shock absorbing/damping applications. Helmet liners are another possibility. o Digital Foam – EOS will take customers foam specs and create the settings and tools to produce those specs with the EOS printer. It sounds like a combination of printer settings and ntopology like lattice software combined to emulate foam. o New CEO, Marie Langer

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▪ Marie Langer takes over for her father, Dr Hans J Langer, who stepped down after 30 years. Her key focus will be on strategy, marketing, communications as well as corporate culture, organizational and people development. ▪ The previous CTO Dr. Tobias Abeln and the previous COO Bertrand Humel van der Lee are leaving the company by mutual agreement.

Hardware — Metals

Binder Jetting

• Tethon 3D Impact: Low o Recently granted a patent for a binder jet printing method that uses compaction during the printing process. Looking for partners to commercialize it.

Directed Energy Deposition

• Gefertec Impact: Low o Announced a new arc405 DED metal printer. A new ARC QM head features integrated melt bath control for quality monitoring. • KRAKEN Impact: Low o The large 3D Hybrid printer is now available. Developed by a 15-partner consortium from a H2020 EU program, the printer has a max working area of 20 x 8 x 6 meters. Print rates for metal using WAAM are 1.5 liters/hr, plastics at 120 kg/hr, and metallization rates of 6 kg/hr.

Electron Beam Melting (EBM)

• Wayland Additive Impact: Low o Metal 3D printing startup based in the UK raised 3 million Pounds to develop EBM AM systems for aero and medical industries. • Freemelt Impact: Low o Raised $1.6 million in investment for the next phase of their open-source electron beam melting (EBM) 3D printing technology.

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Powder Bed Fusion

• Farsoon Impact: Low o Announced H13 tool steel for DMLS. Working with Next Chapter Manufacturing to produce H13 tooling using DMLS.

Material Extrusion/Multi-Step

• Desktop Metal Impact: Medium o Launched H13 tool steel the Studio System. Characterized by its stability in heat treatment, hot hardness, and abrasion resistance, H13 is a tool steel widely used in hot work applications. High toughness and hardness also make it an ideal metal for cold work tooling applications as well. • Markforged Impact: Medium o Launched easy-to-print Inconel 625 for the Metal X system. Offers excellent corrosion and high temperature resistance and is ideal for applications in harsh environments, such as in the chemical processing, offshore and aerospace industries. • BASF Impact: High o Metal filament users can buy sintering processing tickets to have parts they have printed with the Ultrafuse 316L sintered by dedicated sintering companies. • Incus Impact: High o Showing the Hammer Series of 3D Metal printers at FormNext. Incus is a spin off from Lithoz. The Hammer printer uses metal powder combined with UV resin to build parts. The green parts need to be debound and then sintered to create metal parts similar to MIM.

Material Jetting

• XJET Impact: Low o Showing the Carmel 1400M and 1400C at FormNext. Each has been optimized to print only Ceramic or Metal.

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Software

Pre-Process

• Onshape Impact: Low o PTC to acquire Onshape SaaS product development platform for CAD for a reported $470 million. o Onshape’s online platform makes CAD work possible on less capable devices like tablets and even phones. It also has powerful data management and collaboration tools.

Process

• Link3D Impact: Medium o Closed on $7 million VC funding round. It will help accelerate global expansion and fuel further advancements in workflow automation and artificial intelligence within the AM production environment.

Post Processing

• DyeMansion Impact: Low o Launching the Powerfuse S with vaporfuse surfacing (VFS) technology. It smooths SLS and MJF parts to a glossy finish. SLS TPU materials can also be smoothed.

Service Bureau

• Forecast 3D Impact: Medium o Added 2 HP JF 5210 Pro printers and BASF ULTRASINT TPU to print with them. (previously had 24 JF 42XX printers. o Acquired by GKN Powder Metallurgy ▪ GKN now enters the additive plastics market. They supply metal powders for powder metallurgy and metal additive manufacturing processes. ▪ GKN already was an HP metals service provider. With Forecast, they now own the single largest HP plastics service bureau.

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▪ I expect that Forecast will be used to produce HP metal additive parts and allow GKN to offer plastic parts to their large metal parts customer base. • Shapeways Impact: Medium o Integrating ZVerse into their Platform. ZVerse is the developer of the only CAD as a Service (CADaaS) platform for digital manufacturing that includes an AI driven design platform and network of certified 3D designers. ▪ Our partnership with ZVerse allows us to take our customer relationships end-to-end by fully integrating 3D design services into our platform, ensuring our prospective customers remain within our ecosystem. - Greg Kress, CEO of Shapeways.

Other News

• Northwestern University large and fast resin based printer Impact: Low o Announced HARP (High-Area Rapid Printing). Print rates of 45 cm/hr. 2.5 sqft bed and height of over 10 feet. Fast print speed is enabled by new resin cooling method. They say commercialization is 18 months away. Seeking business partners. • 3D Printing Businesses Closing Impact: Low o Rigid Ink ceased their filament supply o Lulzbot closing October 31 as they are having cash flow issues • Jabil Impact: Low o Posted a couple of blog articles highlighting data from their 2019 Asstive Material and 3D Printing Trends Study ▪ Overcoming the Top 3D Printing Challenges. In their survey they report that material issues are the biggest challenge, this includes the cost and limited selection of materials. It should be taken with a grain of salt as it is a little self-serving, they are promoting their open materials and material development capabilities. Still, it is a good reference point. ▪ Five Reasons to 3D Print Jigs, Fixtures and Tooling. Jabil is at the forefront of using additive in their production lines. Here they give some reasons why companies should consider printed jigs and fixtures. o Medical 3D printing center of excellence

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▪ Installing around $42 million of equipment at one of their Albuquerque facilities to create an additive hub for medical products.

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Context Report Thru Q2’19

Takeaways from the Context Report with data through Q2 of 2019

Original 2 Class System Newer 4 Class Segmentation Personal/Desktop <$5K Personal $2.5K or less Industrial/Professional >$5K Professional $2.5K to $20K Design $20K to $100K Industrial $100K and up

• 10% fewer sub-$5K desktop 3D Printers were shipped in Q2’19 than a year ago. • Conversely, the Industrial/Professional market saw printer shipment rise +25% mostly due to: o Increased lower-end DLP shipments from 3DS and EnvisionTEC o Increasing shipments from HP for its Polymer Powder Bed Fusion MJF technology o Rising shipments of Material Extrusion Metal printers from Desktop Metal and Markforged • While sales and demand in the US were noted to be up, it (Stratasys) noted a “significant economic weakness in Europe that we believe is impacting capital investments and general spending in the automotive and industrial machinery markets in that region.” 3D Systems Q3 results just reiterated those observations. • SLM Solutions pulled its guidance for the year and noted that it would be significantly below the prior expectations of EUR 95 million. Earnings were down -38% Y/Y in Q2’19, a slight improvement over the prior quarter which saw revenues down -51% compared to 2018. The new CEO positioned the company as now being “in transition.” • Big winners in the period in terms of unit shipments included 3D Systems, HP, UnionTech and Markforged all of which saw year-on-year unit volume growth of +50% compared to Q2’18 • Those in the top 10 seeing Y/Y shipment growth rates above 25% included o 3D Systems + 50% (due to lower priced DLP systems) o EnvisionTEC + 29% (growth in the new DLP EnvisionOne System) o HP + 77% (saw great initial market reaction to its 5200 series as well as new demand for its Colour series) o UnionTech + 61% (Despite pulling back in the US and Europe, UnionTech still did well in China and with the DLP based EvoDent) o Markforged + 289% • Stratasys only witnessed a -5% drop in unit volume shipments but was still one of the only major companies in the period to see a drop-off in units. • Super-great growth in the volume leading Vat Photopolymerization market, lead by 3D Systems Figure- 4/NextDent and EnvisionTEC EnvisionONE strong Y/Y shipments. • Material Extrusion also did well but thanks to the new crop of Metal material extrusion machines (versus tradition polymer FDM machines often associated with the Material Extrusion category). • For Powder Bed Fusion as a technology (including collectively Metal and Polymer), the market struggled in the period in the Metals sector seeing -19% fewer printers ship in Q2’19 than a year ago,

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but saw 82% Y/Y growth on the Polymer side principally driven by the volume leader in that sector HP with its MJF technology enjoying 77% more units shipped in Q2’19 than a year ago. • Notable in this view of the market when looking at Industrial/Professional printer revenues was the Y/Y decline in Vat Photopolymerization revenues which saw a drop off of -10% in spite of seeing a 43% rise in unit shipments. This is due to the success of lower priced products like 3DS’ Figure-4/NextDent series and EnvisionTEC’s One products. • If separated into general material categories of Polymer and Metal, the Powder Bed Fusion market has most of its revenue (67%) generated by Metal 3D printer shipments; the metal PBF category alone would represent the largest market in the industry. In spite of seeing a drop-off in unit volume shipments, the PBF Metal category did enjoy increased product revenues thanks to strong demand for GE’s Arcam EBM technology. Polymer PBF revenues rose 55% from a year ago largely due to the roll- out and initial success of the HP 5200 series. • Metal printer shipments were up +9% on the back of continued roll-out of multi-step Material Extrusion printer shipments from Desktop Metal and Markforged. Metal PBF printer shipments were down -19% and very notably Metal DED printer shipments were up 2x over Q2’18 mostly due to TRUMPF but also in thanks to Optomec. • Binder Jetting is noted to be “hot” -- not yet in terms of impact to the market or by way of significant printer volumes having been shipped (small ExOne is actually the leader in this emerging space) -- but by way of being a future technology with companies including GE Additive, HP, Stratasys, Desktop Metal (for its Production machine) and a host of others all focusing on the tech for metal serial production. • • Service revenues from the major publicly traded companies were again flat in the quarter but up +2% on a trailing 4-quarters basis. • For the quarter, the Personal/Desktop space saw -10% fewer printers ship than a year ago and on a 4 quarters trailing basis was down -12%. • A “rule of thumb” at the moment might note that the Personal/Desktop 3D Printer market is a ~400K unit per year market. • The ultra-hot PROFESSIONAL class segment ($2,501 to $20,000) saw -7% fewer printers ship this period than a year ago mostly due to the new product roll-out woes of Formlabs which stumbled a bit bringing the Form 3 to market. • Industrial $100K+ Segment o SLS shipment totals up +64% from a year ago mostly thanks to better than 2x+ Y/Y growth from market leader EOS o unit declines in this grouping from HP with demand now spread across many different products o declines in DMLS and SLM metal printer shipments with SLM Solutions having an especially difficult time now but also GE Additive seeing strong demand growth in EBM Arcam Powder Bed Fusion versus Concept Laser SLM PBF technologies. • Beyond 2019, the largest growth rates in terms of machine sales are expected in the $100K+ INDUSTRIAL price class and the $5K - $20K PROFESSIONAL class with most eyes in the industry on the INDUSTRIAL class since this class is the one most likely to help the AM market penetrate into the much larger general manufacturing market. • General Risks and Forecast Themes for the period :

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o Challenges with the European Automotive sector (notably concerns with Brexit and general flattening of demand) o Ongoing USA/China trade-war and potential impacts to domestic shipments both in the US as well as into the world’s 3rd largest geographic segment for 3D Printers, China. o German and other European economies having shrunk in Q2 o Warning signs of looming US recession in 2020 o Trade, Rates and Recession were mantra’s heard over and over again in Q3’19 • Processes with raised forecasts which most impacted category total ($20K-$100K) o Powder Bed Fusion MJF from HP really had a strong start with forecast expectations raised as a result o Markforged’s composite Material Extrusion technology continues its upward trajectory with some copy cats now in the mix o SLS – this type technology has really been relegated into the INDUSTRIAL price class but with companies like XYZprinting now in the category (and with HP’s sister MJF technology in this class doing well) then Powder Bed Fusion Polymer technologies in this price range have an improved outlook • Industrial (>$100K) Forecast o Revised down -12% based mostly due to : ▪ Weaker than expected Metal market especially Powder Bed Fusion ▪ General global economic downturns ▪ Cautious outlook from many associated with unknowns surrounding global trade disputes ▪ Weakened spending in automotive and industrial machinery, especially in Europe. o Significant downward revisions to DLMS/SLM o On the Polymer side, more reserved outlook for Carbon as their focus seems to now be on contract value over printer shipments. o Powder Bed Fusion is the most dominant 3D Printing technology in terms of printer unit shipments in the INDUSTRIAL price class of products and is projected to grow share in the forecast horizon rising from 41% in 2018 to 47% in the next five years. o Binder Jetting for Metals is still mostly a technology on the “horizon” with many pointing to it as the technology to help AM push further into serial production with many having Binder Jetting products in their forthcoming portfolios (including Desktop Metal, HP, Stratasys - with some sort of Jetting solution, and many others). o The 5-year CAGR outlook for INDUSTRIAL Metal 3D Printer machine sales is a bit stronger than that of Polymer machines at 33% to 28%, but the growth outlook for both is generally strong. o Metal is being boosted by two “new” indirect processes with Material Extrusion allowing for low entry-level pricing and Binder Jetting allowing for more efficiencies with larger scale, serial production. Directed Energy Deposition is now coming on the radar a bit more to see if this technology is truly being used to produce end-parts or if sales of these type machines are just growing due to expanded use for repair. o In Polymers, the technologies expecting to see the most growth are those best aligned with mass serial part production such as Powder Bed Fusion and Vat Photopolymerization. Of those two, PBF is expected to have the most growth over the next 5-year horizon with an expected CAGR of 40%+.

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