Materialise NV Q4 FY2024 earnings call

• Strategic Objectives: Medical made progress in mass personalization, expanding patient populations and entering new markets like cardiovascular with FEops acquisition. Manufacturing focused on aerospace and medtech but faced headwinds. Software strengthened CO-AM partnerships and shifted to subscription-based models in preprint Magics.
• 2024 Achievements: Realized 4% growth, kept adjusted EBIT stable, and made progress on strategic objectives despite industry challenges.
• Fourth Quarter Highlights: Medical saw 14% growth, Manufacturing faced headwinds from macroeconomic factors, and Software continued transition to recurring revenue with launch of Magics SDKs.

Medical: Fourth quarter revenue increased by 14% to €31.8 million, a quarterly revenue record. Annual revenue was €116 million, up almost 15%. Adjusted EBITDA for Q4 was €9.5 million with a margin of 30%, and annual adjusted EBITDA was €35.6 million with a margin of 30.6%. Manufacturing: Q4 revenue decreased by 13% due to challenging market conditions, unfavorable macroeconomic climate, and ACTech plant start-up. Annual revenue was €106.5 million, down 3%, with adjusted EBITDA of -€1.7 million. Software: Q4 revenue was flat, with recurring revenue up 19% and nonrecurring revenue down 35%. Annual revenue was ~€44 million, with adjusted EBITDA of €5.6 million and a margin of 12.7%.

• 2025 revenue expected in the range of €270 million to €285 million.
• 2025 adjusted EBIT expected in the range of €6 million to €10 million.
• Continued investment in Medical and Software, with focus on cost control in Manufacturing.

• Industry challenges: high interest rates, geopolitical tensions, difficult economic climate.
• Manufacturing headwinds: Unfavorable macroeconomic environment in Europe, weak prototyping demand.
• Short-term impact of FEops integration on EBIT.

Q: Remind on margin difference between recurring and nonrecurring in Software, average subscription lifetime, split of Software revenue, breakdown of one-offs, visibility in October A: Brigitte and Koen responded on revenue recognition differences, subscription lifetime being annual for most, Software revenue with ~76% recurring, breakdown of one-offs including R&D, ACTech start-up, and FEops integration impact, and that visibility on Q4 was impacted by accelerating industrial climate in Europe Q: Deferred revenue in Software, OpEx impact, European weakness beyond automotive A: Koen explained deferred revenue seasonality and alignment with prior years, Brigitte mentioned focus on cost control in Manufacturing, and Brigitte noted broader European weakness beyond automotive including uncertainty from U.S. administration impact