Market Risks and Competition - The company faces risks related to maintaining or increasing market share and reputation for its software and products, which are essential to remain competitive in the rapidly evolving additive manufacturing industry [31]. - Increased competition from both established companies and new entrants in the additive manufacturing market may lead to reduced revenue and profit margins [34]. - Demand for additive manufacturing solutions may not increase adequately, particularly if conventional production methods continue to dominate the industrial and medical sectors [44]. - The company relies on collaborations with key partners in large-scale markets, and any disruption in these relationships could hinder market competitiveness and expansion into high-growth specialty markets [40]. - Fluctuations in revenue and results of operations are expected due to various factors, including market acceptance of products and competition [41]. Financial Performance and Capital Needs - Inflationary pressures have negatively impacted operating margins and net income, with price increases implemented in 2022, 2023, and 2024 to mitigate these effects [43]. - The company may need to raise additional capital to support its growth strategy, which could be challenging to achieve on favorable terms [28]. - Revenue is currently concentrated in the industrial and medical industries, particularly in automotive/aerospace and orthopedic segments, with expected growth in cardiac and pulmonary markets [45]. - The company may require additional capital to support growth strategies, which may not be available on favorable terms due to macroeconomic conditions [56]. Regulatory and Compliance Challenges - Changes in regulatory laws and tariffs could adversely affect operations and financial results, particularly in light of geopolitical tensions [46][58]. - The company is subject to various environmental laws and regulations, which could lead to substantial liabilities and operational interruptions if compliance is not maintained [92]. - The General Data Protection Regulation (GDPR) imposes strict data protection requirements, with penalties up to €20 million or 4% of global turnover for non-compliance, affecting operational costs [104]. - The company must navigate a complex regulatory landscape, including compliance with U.S. and E.U. data privacy laws, which could impact its ability to operate effectively in various markets [106][109]. Technology and Innovation - The company is investing in expanding its software product portfolio to meet the needs of the growing additive manufacturing market [52]. - Significant investments are being made in artificial intelligence (AI) and machine learning (ML) technologies, particularly in the Materialise Medical segment [86]. - The company anticipates challenges in achieving market acceptance for its AI and ML solutions compared to competitors, which could impact financial results [87]. - The transition to a cloud-based software platform is critical, as the dominant software subscription model in the industrial sector is changing, posing a risk to the company's market position [28]. Operational Risks - The ongoing armed conflict in Ukraine has significantly impacted operations, with over 400 collaborators engaged in engineering and IT support facing instability [59][63]. - The company is dependent on key personnel for its operations, and failure to retain or recruit qualified staff could adversely affect business performance [28]. - The reliance on a limited number of suppliers for raw materials poses risks, including potential supply disruptions and increased costs [47][48]. - The company may experience unforeseen difficulties in expanding its 3D printing infrastructure, potentially leading to increased costs and operational inefficiencies [94]. Intellectual Property and Legal Risks - The company relies on patents and trade secrets for competitive advantage, and failure to protect these could lead to increased competition and lower revenue [147]. - Ongoing changes to U.S. patent laws may complicate the company's ability to obtain and enforce intellectual property rights, potentially affecting its financial condition [151]. - The company may face substantial costs related to enforcing intellectual property rights and defending against third-party claims, which could impact its financial resources [154]. - The company may be subject to claims regarding wrongful use of trade secrets by employees, which could result in litigation and associated costs [159]. Corporate Governance and Shareholder Rights - As of March 28, 2025, board members and senior management own approximately 58.60% of outstanding ordinary shares, allowing them significant influence over corporate actions [168]. - Shareholders have limited rights to call meetings or submit proposals, which could restrict their influence over company governance [190]. - The company is not required to file periodic reports as frequently as U.S. domestic issuers, potentially limiting the information available to investors [174]. Financial Overview - For the year ended December 31, 2024, the company generated €266.8 million in revenue, representing a 4% increase over the prior year [205]. - The net profit for the year was €13.4 million, with an Adjusted EBIT of €9.7 million and an Adjusted EBITDA of €31.5 million [205]. - Capital expenditures amounted to €26.4 million in 2024, with €17.5 million allocated for expanding production capacity in Germany [201].

Company Overview - Materialise's share price dropped significantly following the release of its fourth quarter earnings, primarily due to disappointing results from the manufacturing segment [1] - The transition to the new ACTech facility was anticipated to cause disruptions, but an unexpected slowdown occurred [1] Industry Insights - Narweena, an asset manager, focuses on identifying market dislocations stemming from a poor understanding of long-term business prospects [1] - The firm believes that excess risk-adjusted returns can be achieved by targeting businesses with secular growth opportunities in markets with high barriers to entry [1] - Narweena's investment strategy emphasizes company and industry fundamentals to uncover unique insights, with a preference for smaller cap stocks and markets lacking obvious competitive advantages [1] - The aging population, low population growth, and stagnating productivity growth are expected to create new investment opportunities distinct from historical trends [1] - Many industries may experience stagnation or secular decline, which could paradoxically enhance business performance due to reduced competition [1] - Conversely, some businesses may face rising costs and diseconomies of scale [1] - The economy is increasingly influenced by asset-light businesses, leading to a declining need for infrastructure investments over time [1] - A large pool of capital is pursuing a limited set of investment opportunities, resulting in rising asset prices and compressed risk premia [1]

Financial Data and Key Metrics Changes - In Q4 2024, revenue increased slightly to €65.7 million, with a full year revenue of over €267 million, representing a 4% increase from 2023 [25][27] - Adjusted EBITDA for Q4 decreased to €4.3 million from €8.5 million in Q4 2023, with a full year adjusted EBITDA remaining stable at €31.5 million [28][30] - Adjusted EBIT for Q4 was negative at €1.2 million compared to €3.2 million in Q4 2023, while full year adjusted EBIT decreased to €9.7 million from €9.9 million in 2023 [30][31] Business Line Data and Key Metrics Changes - Materialise Medical segment revenue increased by 14% in Q4 to €31.8 million, with full year revenue up nearly 15% to €116 million [32][34] - Manufacturing segment revenue decreased by 13% in Q4, with full year revenue down 3% to €106.5 million [37] - Software segment revenue remained stable at around €44 million for the full year, with Q4 adjusted EBITDA at €1.1 million [35][36] Market Data and Key Metrics Changes - Materialise Medical accounted for nearly 50% of consolidated revenue in Q4, while Manufacturing contributed 35% and Software 17% [26] - The deferred revenue related to software licenses and maintenance fees increased by €5.9 million in Q4, totaling just above €59 million at year-end [27][46] Company Strategy and Development Direction - The company aims to continue investing in growth markets, particularly in Medical and Software segments, while focusing on cost control in Manufacturing [51] - The launch of the Mimics platform aims to enhance the adoption of personalized solutions in the medical field [12] - The company is transitioning towards a cloud-based subscription model for its Software segment, which is expected to positively impact future revenue potential [20][50] Management's Comments on Operating Environment and Future Outlook - Management noted that 2024 was a challenging year due to high interest rates, geopolitical tensions, and a difficult economic climate, yet the company achieved 4% growth [9] - The uncertain macroeconomic environment in Europe is expected to persist in 2025, impacting the Manufacturing segment [50] - Revenue guidance for 2025 is projected to be between €270 million and €285 million, with adjusted EBIT expected to range from €6 million to €10 million [51] Other Important Information - The company reported a strong cash position with cash reserves of €102 million at the end of Q4, despite a bullet loan repayment of €10 million [44] - The operational cash flow for the full year increased to €31.5 million, up by 56% compared to 2023 [48] Q&A Session Summary Question: Margin difference between recurring and nonrecurring revenue in the software segment - Management indicated that there is no large margin difference between recurring and nonrecurring revenue in the Software segment [60] Question: Average lifetime of the subscription - Most subscription-based revenue is expected to have a one-year lifetime [64] Question: Granularity on increased R&D spend, ACTech start-up, and FEops integration - About half of the cost increase in Q4 was attributed to these elements, impacting adjusted EBIT [65] Question: Changes in visibility regarding fourth quarter performance - Management acknowledged that the industrial climate worsened in Q4, which was not fully anticipated in October [67] Question: Explanation for the significant growth in deferred revenue - The increase in deferred revenue was anticipated and aligns with seasonal trends, reflecting larger contracts at year-end [71] Question: Future operational expenses and cost control measures - Management plans to focus on cost control and optimization, particularly in the Manufacturing segment [77]

Financial Data and Key Metrics Changes - In Q4 2024, revenue increased slightly to €65.7 million, with a full year revenue of over €267 million, representing a 4% increase from 2023 [25][27] - Adjusted EBITDA for Q4 decreased to €4.3 million from €8.5 million in Q4 2023, with a corresponding adjusted EBITDA margin of 6.6% [28][29] - Adjusted EBIT for Q4 was negative at €1.2 million compared to €3.2 million in Q4 2023, with a full year adjusted EBIT of €9.7 million, down from €9.9 million in 2023 [30][31] Business Line Data and Key Metrics Changes - Materialise Medical segment revenue increased by 14% to €31.8 million in Q4, with a full year revenue increase of almost 15% to €116 million [25][34] - Manufacturing segment revenue decreased by 13% in Q4 compared to the previous year, with a full year revenue decrease of 3% to €106.5 million [37] - Software segment revenue remained stable at around €44 million for the full year, with Q4 adjusted EBITDA at €1.1 million and an adjusted EBITDA margin of 10.1% [36][38] Market Data and Key Metrics Changes - The Medical segment accounted for close to half of consolidated revenue in Q4, while Manufacturing and Software accounted for 35% and 17% respectively [26] - The Manufacturing segment faced challenges due to unfavorable macroeconomic conditions in Europe, particularly impacting prototyping demand [37][50] Company Strategy and Development Direction - The company aims to continue investing in growth markets, particularly in the Medical segment and factory management solutions, while focusing on cost control in the Manufacturing segment [51][52] - The launch of the Mimics platform aims to enhance the adoption of personalized solutions in the Medical segment [12] Management's Comments on Operating Environment and Future Outlook - Management noted that 2024 was a challenging year due to high interest rates, geopolitical tensions, and a difficult economic climate, yet the company achieved 4% growth [9] - For 2025, the company expects revenues to be in the range of €270 million to €285 million, with continued growth in Medical and Software segments, but challenges in Manufacturing due to the uncertain macroeconomic environment [50][51] Other Important Information - The company reported a strong balance sheet with cash reserves of €102 million at the end of Q4, despite a bullet loan repayment of €10 million [44] - Deferred revenue related to software licenses and maintenance fees increased by €5.9 million in Q4, totaling just above €59 million at year-end [27][46] Q&A Session Summary Question: Margin difference between recurring and nonrecurring revenue in the software segment - Management indicated that there is no large margin difference between recurring and nonrecurring revenue in the Software segment [60][61] Question: Average lifetime of the subscription - The average lifetime of subscription-based revenue is typically expected to be one year [64] Question: Granularity on increased R&D spend, ACTech start-up, and FEops integration - About half of the cost increase in Q4 was attributed to the three elements mentioned, impacting adjusted EBIT [65] Question: Changes in visibility regarding the fourth quarter - Management acknowledged that the industrial climate had accelerated in Q4, impacting results and guidance for 2025 [66] Question: Explanation for the increase in deferred revenue in the Software segment - The increase in deferred revenue was anticipated and aligned with seasonal trends, reflecting larger contracts at year-end [71][72] Question: Future operational expenses and cost control measures - Management confirmed a strong focus on cost control and optimization in 2025, particularly in the Manufacturing segment [77]

Revenue Performance - Total revenue for Q4 2024 increased by 0.6% to €65,680 k from €65,295 k in Q4 2023, driven by a 14.3% growth in the Materialise Medical segment[5] - For the full year 2024, total revenues increased by 4.2% to €266,765 k from €256,127 k in 2023, with a gross profit margin of 56.5%[9] - Revenue for the three months ended December 31, 2024, was $68,235,000, an increase of 4.2% compared to $65,680,000 in the same period of 2023[30] - Total revenues for the three months ended December 31, 2024, reached €65,680,000, a slight increase from €65,295,000 in the same period of 2023[40] - The total revenues for the twelve months ended December 31, 2024, were €266,765,000, an increase from €256,127,000 in 2023, representing a growth of 4.1%[40] Segment Performance - Materialise Medical segment revenue grew by 14.3% to €31,837 k in Q4 2024, with an Adjusted EBITDA margin of 30.0%, down from 33.6% in the prior year[6] - Materialise Software segment revenue decreased by 1.1% to €11,124 k in Q4 2024, with an Adjusted EBITDA margin of 10.1%, down from 11.2% in the previous year[7] - Materialise Manufacturing segment revenue fell by 13.3% to €22,719 k in Q4 2024, resulting in an Adjusted EBITDA margin of (13.2)%, compared to 2.1% in Q4 2023[8] - Segment adjusted EBITDA for the Medical segment for the twelve months ended December 31, 2024, was €35,562,000, representing an increase from €26,544,000 in 2023, a growth of 34%[40] - The Software segment's adjusted EBITDA margin for the three months ended December 31, 2024, was 10.1%, down from 11.2% in the same period of 2023[40] Profitability - Adjusted EBITDA for Q4 2024 decreased to €4,306 k from €8,474 k in the same period last year, while Adjusted EBIT amounted to (€1,195) k compared to €3,154 k in Q4 2023[5] - Net profit for 2024 was €13,406 k, or €0.23 per diluted share, compared to €6,695 k, or €0.11 per diluted share in 2023[19] - Net profit for the twelve months ended December 31, 2024, was $13,406,000, up from $6,695,000 in 2023, representing a 100.5% increase[34] - Adjusted EBIT for the twelve months ended December 31, 2024, was €9,741,000, compared to €9,886,000 for the same period in 2023, indicating a decrease of 1.5%[38] - Total comprehensive income for the twelve months ended December 31, 2024, was $11,615,000, up from $7,619,000 in 2023, reflecting a growth of 52.3%[31] Cash Flow and Capital Expenditures - Cash flow from operating activities for 2024 was €31,456 k, up from €20,157 k in 2023, with total capital expenditures of €26,377 k[21] - The company reported a net cash flow from operating activities of $31,456,000 for the twelve months ended December 31, 2024, compared to $20,157,000 in 2023, an increase of 56.0%[34] - Total cash reserves at the end of 2024 amounted to €102,304 k, down from €127,573 k at the end of 2023[20] - Cash and cash equivalents decreased to $102,304,000 as of December 31, 2024, from $127,573,000 in 2023, a decline of 19.8%[34] Expenses - Research and development expenses increased to $44,400,000 for the twelve months ended December 31, 2024, compared to $38,098,000 in 2023, reflecting a growth of 16.5%[30] - Corporate research and development expenses for the twelve months ended December 31, 2024, totaled €3,681,000, up from €2,785,000 in 2023[41] - Financial expenses for the twelve months ended December 31, 2024, were €4,516,000, compared to €3,865,000 in 2023, reflecting an increase of 16.8%[38] - The company incurred acquisition-related expenses of €24,000 in connection with the acquisition of Feops during the twelve months ended December 31, 2024[42] Assets and Equity - Total assets as of December 31, 2024, were $396,336,000, a slight decrease from $396,630,000 in 2023[32] - The company’s total equity attributable to the owners of the parent increased to $248,578,000 as of December 31, 2024, from $236,646,000 in 2023, a rise of 5.0%[33]

Core Viewpoint - The article emphasizes the importance of timing and sustainability in short-term investing, highlighting that a solid trend can lead to successful investments, but requires careful analysis of underlying factors [1][2]. Group 1: Stock Performance - Materialise (MTLS) has shown a significant price increase of 63.9% over the past 12 weeks, indicating strong investor interest [4]. - The stock has also increased by 17.9% in the last four weeks, suggesting that the upward trend is still intact [5]. - MTLS is currently trading at 98.4% of its 52-week high-low range, indicating a potential breakout [6]. Group 2: Fundamental Strength - MTLS holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term performance [7]. Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for identifying stocks with strong fundamentals that can maintain their upward momentum [3]. - The article suggests that investors should consider other stocks that pass through this screening process for potential investment opportunities [8].

Core Viewpoint - The article emphasizes the importance of identifying and maintaining trends in short-term investing, highlighting that sound fundamentals and positive earnings estimates are crucial for sustaining momentum in stocks [1]. Group 1: Recent Price Strength Screen - The "Recent Price Strength" screen is a unique short-term trading strategy that helps identify stocks with sufficient fundamental strength to maintain their uptrend [2]. - Stocks that pass this screen are trading in the upper portion of their 52-week high-low range, indicating bullishness [2]. Group 2: Materialise (MTLS) Stock Analysis - Materialise (MTLS) has shown a solid price increase of 37.5% over the past 12 weeks, reflecting investor confidence in its potential upside [3]. - The stock has also increased by 15.9% over the last four weeks, indicating that the upward trend is still intact [4]. - MTLS is currently trading at 85.7% of its 52-week high-low range, suggesting it may be on the verge of a breakout [5]. Group 3: Fundamental Strength and Ratings - MTLS holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [5]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), indicating strong optimism from the brokerage community regarding its near-term price performance [6]. Group 4: Additional Investment Opportunities - Besides MTLS, there are several other stocks that meet the criteria of the "Recent Price Strength" screen, suggesting potential investment opportunities [7]. - The article mentions that there are over 45 Zacks Premium Screens available for investors to find winning stock picks based on their personal investing styles [7].

Company Performance - Materialise (NASDAQ: MTLS) reported strong results in Q3, driven primarily by its Medical segment despite a challenging demand environment and headwinds from a business model transition in the Software segment [1] Investment Strategy - Narweena, an asset manager, focuses on identifying market dislocations due to poor understanding of long-term business prospects, aiming for excess risk-adjusted returns by targeting businesses with secular growth opportunities in markets with barriers to entry [1] - The research process emphasizes company and industry fundamentals to uncover unique insights, with a high risk appetite and long-term investment horizon [1] Market Trends - An aging population with low growth and stagnating productivity is expected to create new investment opportunities, contrasting with past trends [1] - Many industries may face stagnation or secular decline, which could paradoxically enhance business performance as competition diminishes [1] - The economy is increasingly dominated by asset-light businesses, leading to a declining need for infrastructure investments over time [1] - A large pool of capital is pursuing a limited set of investment opportunities, resulting in rising asset prices and compressed risk premia [1]

Core Viewpoint - The article emphasizes the potential of Materialise (MTLS) as a strong value stock, supported by various financial metrics indicating it is undervalued compared to its industry peers [4][5][6][7][8]. Financial Metrics - MTLS holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4][3]. - The Forward P/E ratio of MTLS is 27.09, significantly lower than the industry average of 34.19, suggesting it is undervalued [4]. - The P/B ratio for MTLS is 1.30, compared to the industry average of 3.29, further indicating a favorable valuation [5]. - MTLS has a P/S ratio of 1.3, which is lower than the industry's average P/S of 3.11, reinforcing the notion of being undervalued [6]. - The P/CF ratio for MTLS is 8.83, which is attractive compared to the industry average of 9.08, highlighting its solid cash outlook [7]. Investment Outlook - The combination of these metrics suggests that MTLS is likely being undervalued at present, making it an appealing option for value investors [8].

Core Viewpoint - Materialise (MTLS) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in stock price movements [4]. Company Performance - Materialise is projected to earn $0.22 per share for the fiscal year ending December 2024, reflecting a year-over-year increase of 10% [8]. - Over the past three months, the Zacks Consensus Estimate for Materialise has risen by 37.5%, indicating a positive trend in earnings expectations [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - Materialise's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].