Materialise NV Q1 FY2025 earnings call

Management Statement and Operational Highlights

• Sustainability: Published 2024 Sustainability Report, aiming to cut absolute emissions 55% by 2029 vs 2019 baseline; reduced emissions 32% in 2024, with significant reduction in raw material CO2.
• Medical Business: Strong uptake of personalized solutions; launched Mimics Flow cloud-based platform, Mimics Enlight CMF shortlisted for TCT awards; announced clinical trial for 3D-printed tracheal splint for infants with TBM.
• Software Division: Announced 2025 release of Magics with performance enhancements; introduced next-generation build processors in partnership with Raplas and One Click Metal; Magics SDKs launched, over 80% of Software revenue recurring in Q1.
• Manufacturing Division: Aerospace sales grew 23% in Q1; reassessing involvement in defense sector to strengthen aerospace position.

Segment Performance

• Materialise Medical: Revenue increased almost 19% compared to Q1 2024. Driven by both Medical Software (up 14%) and Medical Devices sales (up 21%). Adjusted EBITDA grew further to over €9 million with a stable margin of 29%. Revenue contribution: 47%.
• Materialise Software: Sales increased over 2%, but reported revenue declined 6% to €9.8 million due to more revenue deferral. More than 80% of Software revenue was recurring in Q1. Revenue contribution: 15%.
• Materialise Manufacturing: Revenues decreased 5.5% in Q1 2025 vs Q1 2024, but increased 12% vs Q4 2024. Aerospace segment sales grew 23%. Adjusted EBITDA ended negatively at -€0.4 million but improved from Q4 2024. Revenue contribution: 39%.

Guidance

• Maintains consolidated revenue guidance for 2025 within €270 million to €285 million range.
• Maintains adjusted EBIT guidance of €6 million to €10 million for the fiscal year.

Risks

• Macroeconomic and geopolitical turbulence impacting the business.
• Uncertainty regarding tariff impacts on customers and potential effects on raw materials.
• Competitive dynamics and industry change that could affect actual results differing from expectations.

Question and Answer

Q: Troy Jensen of Cantor Fitzgerald asked about tariff impact on Materialise.

A: Brigitte de Vet responded that the healthcare business has a U.S. manufacturing plant, Manufacturing focuses on Europe, Software is not impacted currently; however, tariffs on raw materials and impact on customers are hard to predict.

Q: Troy Jensen inquired about Q2 outlook.

A: Brigitte de Vet stated Q2 is expected to be more difficult with potential pressure on the bottomline, but stabilization anticipated in the second half of 2025.

Q: Troy Jensen asked about Software business, including recurring revenue.

A: Koen Berges replied that over 80% of Software revenue was recurring in Q1, a significant step up from previous quarters, and Brigitte de Vet added that the transition to recurring revenue is nearing an endpoint though not complete in 2025.