“We are pleased with our second quarter results, but have adjusted our revenue and earnings projections for the balance of 2008 based on the recent trends we have observed in 3D printing. However, we continue to project strong profit growth for the balance of the year. Longer-term, we remain optimistic given our planned initiatives within 3D printing that should accelerate unit growth, and given the strong growth we continue to observe for high-end systems sales and proprietary consumable revenue. We remain excited about our numerous opportunities,” Crump concluded.

Stratasys provided the following information regarding its financial guidance for the fiscal year ending December 31, 2008:

• Lowering revenue guidance to $125 million to $130 million, from the previous guidance of $130 million to $136 million.
• Lowering non-GAAP earnings guidance, which excludes stock-based compensation expenses required under SFAS 123R, to $0.79 to $0.84 per share, from the previous guidance of $0.81 to $0.89 per share.
• Lowering GAAP earnings guidance to $0.75 to $0.80 per share, from the previous guidance of $0.77 to $0.85 per share.
• Stock-based compensation expenses required under SFAS 123R estimated at $0.04 to $0.05 per share.

The revenue guidance adjustment reflects a reduction in 3D printer system revenue for fiscal 2008, compared to previous projections. Earnings per share adjustments reflect the lower revenue projection, offset partially by a reduction in operating expenses compared to previous projections.

Appropriate reconciliations between non-GAAP and GAAP financial measures are provided in a table at the end of this press release.

The Company will hold a conference call to discuss its second quarter financial results on Thursday, July 31, 2008 at 8:30 a.m. (EDT). The investor conference call will be available via live webcast on the Stratasys web site at www.stratasys.com under the "Investors" tab. To participate by telephone, the domestic dial-in number is 888-679-8033 and the international dial-in is 617-213-4846. The access code is 24869428. Investors are advised to dial into the call at least ten minutes prior to the call to register.

Participants may pre-register for the call at www.theconferencingservice.com/prereg/key.process?key=PPHRK3BW8.

Pre-registrants will be issued a pin number to use when dialing into the live call which will provide quick access to the conference by bypassing the operator upon connection.

The webcast will be available for 90 days on the "Investors" page of the Stratasys website.

Stratasys, Inc., Minneapolis, manufactures office-based rapid prototyping and direct digital manufacturing systems, 3D printers and offers rapid prototyping and manufacturing parts services. According to Wohlers Report 2008, Stratasys supplied 44 percent of all systems installed worldwide in 2007, making it the unit market leader, for the sixth consecutive year. Stratasys developed the rapid prototyping process known as fused deposition modeling (FDM). The process creates functional models and end-use parts directly from any 3D CAD program using ABS plastic, polycarbonate, PPSF, and blends. The company holds over 180 granted or pending rapid prototyping patents globally. Stratasys products are used in the aerospace, defense, automotive, medical, education, electronic, architecture and consumer product industries. For more information on the company, go to www.Stratasys.com; www.DimensionPrinting.com; or www.RedEyeRPM.com

Forward Looking Statements

All statements herein that are not historical facts or that include such words as “expects”, “anticipates”, “projects”, “estimates”, “vision”, “planning” or “believes” or similar words are forward-looking statements that we deem to be covered by and to qualify for the safe harbor protection covered by the Private Securities Litigation Reform Act of 1995. Our belief that we have the largest part-building service is based on the number of dedicated machines. Except for the historical information herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties; these include the continued market acceptance and growth of our Dimension ^TM 3D printer and our FDM 200mc^TM , 360mc^TM , 400mc^TM , 900mc^TM, Maxum^TM, Titan^TM, and Vantage^TM productivity lines; the size of the 3D printing market; our ability to penetrate the 3D printing market; our ability to maintain the growth rates experienced in this and preceding quarters; our ability to introduce and market new materials such as ABS-Plus and ABS-M30; and the market acceptance of these and other materials; the impact of competitive products and pricing; the timely development and acceptance of new products and materials; the success of our recent R&D initiative to expand the direct digital manufacturing capabilities of our core FDM technology; the success of our RedEyeRPM ^TM