Materialise(MTLS) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue increased year-over-year by more than 4% to €66.4 million, while EBIT for Q1 2025 amounted to €0.6 million [24] - The net result for the quarter was a loss of €0.5 million or €0.01 per share, impacted by unfavorable exchange rate fluctuations [24][37] - Free cash flow was positive, reinforcing the net cash position to €67.7 million, an increase of almost €7 million compared to the beginning of the quarter [24][40] Business Line Data and Key Metrics Changes - Materialise Medical revenue grew almost 19%, driven by both Medical Software and Medical Devices sales, which increased by 14% and 21% respectively [26][29] - Software segment revenue decreased by 6% to €9.8 million due to revenue deferral, although more than 80% of Software revenue was recurring [31][56] - Manufacturing segment revenues decreased by 5.5% compared to Q1 2024, but increased by 12% compared to Q4 2024 [33] Market Data and Key Metrics Changes - Aerospace segment sales grew by 23% year-over-year, while industrial and automotive segments faced challenges [21][33] - The total deferred income position increased to €61 million, with €49 million related to Software licenses and maintenance contracts [40] Company Strategy and Development Direction - The company aims to cut absolute emissions by 55% by 2029 compared to the 2019 baseline, having already reduced emissions by 32% in 2024 [9][10] - Materialise is focusing on scaling additive manufacturing and enhancing software solutions to facilitate broader adoption [11][16] - The company is reassessing its involvement in the defense sector to strengthen its aerospace segment and create new opportunities [22] Management Comments on Operating Environment and Future Outlook - Management expects Q2 to be more challenging but anticipates stabilization in the second half of 2025, maintaining revenue guidance of €270 million to €285 million for the full year [43] - The current geopolitical landscape and macroeconomic conditions are expected to weigh on results, particularly in Q2 [43] Other Important Information - The company launched a clinical trial for a 3D-printed tracheal splint for infants, which could open new market opportunities [15] - Significant R&D investments continued, with over €11 million spent in Q1, primarily in the Medical segments [35] Q&A Session Summary Question: Impact of tariffs on Materialise - Management indicated that the U.S. manufacturing plant mitigates tariff impacts, while raw materials may be affected [48][50] Question: Q2 outlook - Management expects Q2 to be flat on the topline with uncertainty in the market, predicting pressure on the bottom line [52][54] Question: Software revenue performance - Software revenue was below €10 million for the first time since COVID, but over 80% of Software revenue is now recurring, indicating a positive trend [55][56]