Materialise N.V. Q2 FY2025 earnings call

• Celebrated 35th anniversary, with founders starting the journey in additive manufacturing. - Made progress in medical business: pilot collaboration with J&J in respiratory market, 510(k) U.S. market clearance for personalized knee guide feature, and growth in existing orthopedic market. - Software and Manufacturing faced headwinds due to geopolitical and macroeconomic factors but continued strategic focus. - Announced engagement with defense sector to enhance regional defense capabilities. - Collaborated with Synera to establish connectivity for end-to-end automation in additive manufacturing. - Implemented restructuring in Manufacturing division, reclassifying some assets as held for sale.

Materialise Medical saw revenue increase by almost 17% this quarter, achieving a quarterly revenue record, with revenue contribution at 51%. Materialise Software revenue decreased by 12% to EUR 9.9 million, contributing 15% to total revenue. Materialise Manufacturing revenue declined by 25% to EUR 22.1 million, accounting for 34% of total revenue. In the first half of 2025, Materialise Medical realized EUR 64 million in revenue, up 18% from the previous year, with an adjusted EBITDA margin of 31%. Materialise Software had EUR 19.6 million in revenue and an adjusted EBITDA margin of 10% in the first half. Materialise Manufacturing had EUR 47.6 million in revenue with an adjusted EBITDA of minus EUR 1.2 million in the first half.

• Revised full-year revenue guidance from EUR 270-285 million to EUR 265-280 million due to geopolitical, macroeconomic, and foreign exchange uncertainties. - Reconfirmed adjusted EBIT guidance range of EUR 6 million to EUR 10 million for fiscal year 2025, consistent with earlier communications.

• Geopolitical volatility and macroeconomic uncertainty impacting business climate. - Unfavorable foreign exchange fluctuations putting pressure on revenue and net results.

Q: Troy Jensen from Cantor Fitzgerald asked about quantifying the J&J respiratory opportunity and details on the debt taken out and gross margins.

A: Brigitte de Vet-Veithen mentioned the respiratory market is new, revenue impact not expected this year, and it's a pilot collaboration. Koen Berges confirmed the EUR 20 million debt is part of an earlier agreement and gross margin increase is due to mix effects and cost reductions.

Q: Alexander Craeymeersch from Kepler Cheuvreux asked about Medical segment growth, revised top line guidance, and volume price dynamics in Manufacturing.

A: Brigitte de Vet-Veithen stated Medical segment growth is expected to continue, the guidance revision was due to detailed analysis of business lines and market conditions. Koen Berges explained volume price dynamics in Manufacturing involve volume pressure and efforts to balance costs with top line.