Materialise(MTLS)2025-02-20 22:20Financial 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]