Materialise (MTLS) Q2 2025 Earnings Call July 24, 2025 08:30 AM ET Speaker0Good day, and thank you for standing by. Welcome to the Second Quarter twenty twenty five Materialise NV Financial Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded.I would now like to hand the conference over to your speaker today, Harriet Fried of Alliance Adviso ...

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]