• Revenue (Q4 2024): EUR65.7 million, slight increase from previous year.
• Full-Year Revenue (2024): Over EUR267 million, 4% increase from 2023.
• Materialise Medical Revenue (Q4 2024): EUR31.8 million, 14% increase, quarterly record.
• Materialise Manufacturing Revenue (Q4 2024): Decreased by 13% due to weak prototyping demand and macroeconomic challenges in Europe.
• Materialise Software Revenue (Q4 2024): Stable, with recurring revenue increasing by 19%.
• Adjusted EBITDA (Q4 2024): EUR4.3 million, down from EUR8.5 million in Q4 2023.
• Adjusted EBIT (Q4 2024): Minus EUR1.2 million, compared to EUR3.2 million in Q4 2023.
• Net Profit (Q4 2024): EUR2.9 million, EUR0.05 per share, compared to a net loss of EUR0.5 million in Q4 2023.
• Cash Reserves (End of Q4 2024): EUR102 million.
• Free Cash Flow (Q4 2024): Negative EUR1.3 million due to high capital expenditures.
• Full-Year Net Profit (2024): EUR13.4 million, EUR0.23 per share, compared to EUR6.7 million in 2023.
• 2025 Revenue Guidance: EUR270 million to EUR285 million.
• 2025 Adjusted EBIT Guidance: EUR6 million to EUR10 million.

• Warning! GuruFocus has detected 3 Warning Sign with GSM.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Materialise NV (NASDAQ:MTLS) achieved a 4% revenue growth in 2024 despite challenging economic conditions.
• The Medical segment posted a 14% revenue increase in Q4 2024, setting a quarterly revenue record.
• The company launched the Mimics platform to enhance personalized medical solutions, integrating AI-based automation and cloud capabilities.
• Materialise NV (NASDAQ:MTLS) saw a 28% revenue growth in the Aerospace segment, supported by the opening of the Aerospace Competence Center in Delft.
• The transition to a subscription-based model in the Software segment is progressing, with recurring revenue now accounting for approximately 76% of total software revenue.

Negative Points

• The Manufacturing segment faced a 13% revenue decline in Q4 2024 due to weak prototyping demand and unfavorable macroeconomic conditions in Europe.
• Adjusted EBITDA for Q4 2024 decreased to EUR4.3 million from EUR8.5 million in the previous year, with a corresponding margin drop to 6.6%.
• The acquisition of FEops negatively impacted EBIT in the short term, affecting Q4 results.
• Materialise NV (NASDAQ:MTLS) incurred restructuring costs in Q4 2024 to reduce the cost base in response to ongoing headwinds in the manufacturing sector.
• The company anticipates continued challenges in the European industrial environment in 2025, impacting the Manufacturing segment's performance.

Q & A Highlights

Q: Could you remind us of the main margin difference between recurring and non-recurring revenue in the software segment? A: Brigitte de Vet-Veithen, CEO, stated that there is no large margin difference between recurring and non-recurring revenue. Koen Berges, CFO, added that the revenue recognition differs, with recurring revenue being recognized gradually over the contract duration, while non-recurring revenue is recognized immediately.

Q: How much of the revenue in software is now recurring versus non-recurring? A: Koen Berges, CFO, mentioned that approximately 76% of the software revenue is now considered recurring, indicating a continued transition towards a subscription-based model.

Q: Could you provide granularity on the one-offs, specifically the increased R&D spend, ACTech startup, and FEops integration costs? A: Koen Berges, CFO, explained that about half of the cost increase, between EUR1.5 million and EUR2 million, is attributed to these elements. This includes the FEops integration, restructuring costs, and operational impacts from the ACTech startup.

Q: Considering the difficult climate, what changed after Q3 that you didn't foresee by the end of October? A: Brigitte de Vet-Veithen, CEO, noted that while they were cautious about Q4 results, particularly in manufacturing, the industrial climate worsened in Europe during Q4, impacting results and 2025 guidance.

Q: Why was there a significant increase in deferred revenue in the software segment this quarter? A: Koen Berges, CFO, explained that the increase, just below EUR6 million, was anticipated due to seasonality and large contracts at year-end, along with the transition to more recurring revenue.

Q: How will the operational expenses change in the coming quarters? A: Brigitte de Vet-Veithen, CEO, indicated that ACTech startup costs and FEops integration costs should taper down, while R&D investments in the medical business will continue. There will be a strong focus on cost control and optimization, especially in manufacturing.

Q: Is the European weakness broader than just the automotive sector? A: Brigitte de Vet-Veithen, CEO, confirmed that while the automotive sector is particularly weak, the uncertainty extends beyond it, influenced by broader economic factors.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.