3D Systems (DDD 2.36%) reported record fourth-quarter and full-year 2014 earnings results before the market opened on Thursday.

For the quarter, 3D Systems grew revenue by 21% year over year to $187.4 million, translating to $0.01 in earnings per share, and $0.21 per share on an adjusted basis. In 2014, 3D Systems generated revenue growth of 27% to $653.7 million, taking home $0.11 per share in earnings, and $0.70 on an adjusted basis. These results compare unfavorably to Wall Street expectations calling for the fourth quarter to generate $203.1 million in revenue and $0.25 in adjusted earnings, and the full year to generate $669.7 million in revenue and $0.73 in earnings.

Looking beyond the headline results, 3D Systems' business remains challenged to execute well across all of its segments.

Organic growth down; order backlog stable
Driven by weak performance in its North American channel, 3D Systems' fourth-quarter organic growth rate -- the rate of annual revenue growth that doesn't account for acquisitions less than one year old -- stalled to 7%. 3D Systems attributed the North American weakness primarily to its jetting line of 3D printers, which on a full-year basis only increased by 9% in terms of unit volume.

Source: 3D Systems earnings release.

Between 3D Systems' order book growing by $500,000 sequentially and organic growth declining, the weak performance in North America could indicate that 3D Systems' jetting printers are becoming saturated in the region. Exactly how this translates to regions where 3D printing is less saturated of a technology remains an unanswered question for investors.

Source: 3D Systems earnings release.

Gross profitability
3D Systems' fourth-quarter gross profit margin increased by 10 basis points sequentially to 47.9%, but declined by 380 basis points on an annual basis. The greatest area of annual decline came from its 3D printer hardware sales, which fell 10% year over year.

Source: 3D Systems investor presentation.

Although 3D Systems previously highlighted that a concentrated number of product launches and manufacturing capacity buildouts have dragged on hardware gross profit margins in 2014, it's an area that investors should continue monitoring because it could also provide insights as to whether 3D Systems may be experiencing pricing pressure headwinds as a result of increasing competition.

Operating leverage
3D Systems expected that operating leverage, which the company defines are revenues growing faster than operating expenses, would continue to improve in the fourth quarter. On a non-GAAP basis, 3D Systems' operating leverage improved as the chart below illustrates, but on a GAAP basis, operating expenses outpaced revenue growth by 17 percentage points.

Source: 3D Systems investor presentation.

Other notables
In the fourth quarter, currency headwinds reduced 3D Systems' total revenue by $6 million; direct metal 3D printing revenue increased by 178%, health care revenue grew 96%, consumer revenues increased 68%, and the company experienced strong revenue growth of 46% in its Europe, Middle East, and Africa segment, despite ongoing economic sluggishness in Europe.

In terms of emulating the operating performance of its EMEA segment worldwide, CEO Avi Reichental said 3D Systems will be "taking decisive steps to improve the productivity and coverage of our North American and APAC [Asia Pacific] channels to the level of our EMEA region."

Ending the year with questions
3D Systems closed out the year with $284.9 million in cash on hand, giving it plenty of breathing room to improve the execution of its North American operations and pursue new growth initiatives.

In 2015, management highlighted that the pace of its M&A activity will begin to moderate and expects to generate $850 million to $900 million in revenue, GAAP earnings of $0.35 to $0.45 per share, and non-GAAP earnings of $0.90 to $1.10 per share. At the time of this writing, Wall Street expects 3D Systems to generate $868.9 million in revenue and $1.03 in non-GAAP earnings.

According to Reichental, 3D Systems has "assembled the technological building blocks, infrastructure, talents and partners required to scale our business and extend our first mover advantage in key verticals" and the company is "now poised to strengthen our execution to create greater value faster."

The ultimate question is whether the company can build a business that can fire on all cylinders, because a string of recent quarterly performances suggests this may be difficult to achieve.