Materialise NV Q3 FY2024 earnings call

• Medical: Accelerated growth with medical being the strongest revenue generator (44% of revenue). Progress with Mimics Flow platform, tripled trauma cases with US plant, contracted 10 customers for Mimics Flow.
• Software: Progress on partnerships, early access program with nTop, new partnerships with Formlabs and Stratasys, Magics 28 adoption accelerating, NxG BPs progress.
• Manufacturing: Opened second plant at ACTech, expanding capacity for automotive, agriculture, etc., expecting temporary impact from Q4 startup.

Medical: Revenue grew by almost 25%, accounting for 44% of total revenue. Medical devices and services sales grew 28%, medical software revenue grew 16%. Adjusted EBITDA of the medical segment grew to €9.9 million with a margin of 32.8%. Year-to-date, medical segment realized €84.5 million in revenue, up 15% from last year. Software: Revenue grew by almost 3%, with recurring revenue from software maintenance and licenses sales including CO-AM increasing by 9%. Adjusted EBITDA margin was 17.8%. Year-to-date, software segment realized €32.8 million in revenue. Manufacturing: Revenue grew by 9%, accounting for 40% of total revenue. Faced challenging market environment with weak prototyping demand, but grew in ACTech and certified manufacturing. Adjusted EBITDA margin was 2.6%. Year-to-date, manufacturing segment realized €83.8 million in revenue.

Consistently strong operational performance strengthens confidence in full year revenue within €265 million to €275 million range. Maintaining adjusted EBIT guidance of €11 million to €14 million for 2024. Conservative stance for Q4 due to weaker prototyping demand, FEops integration, and ACTech plant startup.

• Competitive dynamics and industry change.
• Unfavorable currency exchange results.
• Weaker prototyping demand.
• Integration costs of FEops acquisition.
• Startup challenges of new ACTech plant.

Q: Thoughts on sustainability of medical growth and profitability?

A: Brigitte de Vet-Veithen discussed potential in medical sector, scaling effects, margins similar to medical device business.

Q: Details on ACTech plant?

A: Koen Berges and Brigitte de Vet-Veithen talked about Q4 impact, CapEx for machinery, revenue potential.

Q: Software segment partnerships?

A: Brigitte de Vet-Veithen talked about collaboration model, traction from previous partnerships.