3D Printing Financials: Materialise Reports Growth in 2023 with Medical Segment Success

Closing out 2023, Materialise (Nasdaq: MTLS) unveiled a strong financial performance for its fourth quarter. The Belgium-based company reported a revenue increase of 4.1% year-over-year, and despite facing net losses, it more than doubled its adjusted EBITDA (short for earnings before interest, taxes, depreciation, and amortization), proving resilience amid challenging market conditions.

Materialise’s Q4 revenue grew to €65 million from €62.7 million in the same period last year, indicating demand for its products and services despite economic headwinds. The increase in deferred revenues from software maintenance and license fees, which rose by €4.8 million to €45 million, suggests a strong and growing base of recurring revenue, which is crucial for the company’s stability and long-term growth.

Adjusted EBITDA more than doubled to €8.5 million from €4.3 million in the same quarter in 2022, revealing an improvement in profitability and operational efficiency. However, the company faced a net loss of €539,000, or one cent per share, which is still considered an improvement compared to a loss of €4.6 million, or eight cents per share, in the previous year.

For the full year 2023, Materialise reported a total revenue increase of 10.4%, amounting to €256 million compared to €232 million in 2022. The medical segment was particularly strong, exceeding €100 million in revenue for the first time. The company’s focus on healthcare innovation and patient-specific solutions has paid off, reinforcing its position in the market. Furthermore, the fourth quarter’s total revenue in the Medical segments increased by 15%. This solid growth rate was realized both by medical software and by revenue from medical device sales, which grew by 13% and 16%, respectively.

Only six weeks into the new role, CEO Brigitte de Vet-Veithen said in an earnings call with investors that one of her priorities is to ensure the medical segment’s growth continues.

“We have now surpassed the threshold of €100 million revenue and while we felt the impact of the difficult economic climate in the software sales towards medical device companies, as they reduced their R&D programs and postponed investment in additional software licenses, we continued to grow the number of cases delivered to patients around the world and managed to increase revenue by almost 20% for the full year.”

Materialise CEO Brigitte de Vet-Veithen at Additive Manufacturing Strategies 2024. Image courtesy of Ashley Alleyne/3DPrint.com.

The executive, who recently spoke at the Additive Manufacturing Strategies (AMS) 2024 event in New York, also highlighted that the opening of Materialise’s metal manufacturing plant in the U.S. is a significant milestone that opens up new markets, such as using personalized products for trauma patients who cannot afford to wait weeks to have a product delivered. In line with this, de Vet-Veithen also pointed out that Materialise launched Mimics Flow, a case management workflow solution now offered to hospitals to streamline and organize their point-of-care 3D printing labs. According to de Vet-Veithen, the software enables and accelerates the increased adoption of personalization. While this is a limited launch, the CEO says Materialise will spend 2024 learning more about the potential of Mimics Flow and expand the launch to other segments in 2025.

“The medical segment illustrates the potential of a smart combination of hardware and software with a thorough understanding of the customer’s needs,” concluded de Vet-Veithen.

CMF implant. Image courtesy of Materialise.

Furthermore, adjusted EBITDA for the entire year surged 65% to €31.4 million from €19 million in 2022. From a net loss in 2022, Materialise turned it around to report a net profit of €6.7 million, or 11 cents per share, in 2023.

With a strong cash position of €127.6 million at the end of 2023, Materialise is well-equipped to invest in further innovation and integration of its diverse product portfolio. This financial health is key for maintaining growth and navigating the uncertain macroeconomic and geo-political climate.

While the company has performed quite well and checked several boxes for its 2023 top and bottom line, Materialise’s business segments are not all aligned toward growth. The software segment experienced a slight dip in revenue, while the manufacturing segment faced minor challenges but is still a key focus area for the company. However, growth in the medical segment stresses the increasing demand for personalized medical solutions and 3D printed medical devices.

de Vet-Veithen said to investors that she is confident in the company’s strategy and future prospects, pointing out that “While AM is the go-to technology for prototyping, the shift from prototyping to end-use product is well underway and additive manufacturing is being adopted in more sectors and applications. So this shift is especially clear in end-use parts that are customized, such as personalized products for medical applications, and as the adoption of personalization increases, this market will continue to grow. Next to this, we are also seeing an increased adoption of additive manufacturing for serial end-use parts. We can clearly see this, for example, in the aerospace sector, where leading companies have adopted 3D printing as a critical competence to maintain their competitive edge in the industry.”

Looking forward to 2024, Materialise has adjusted its guidance strategy, focusing on consolidated revenue and EBIT rather than just adjusted EBITDA. This move seeks to provide a clearer picture of the company’s operational performance and financial health. Despite global uncertainties, Materialise is optimistic about achieving revenue growth and increasing Adjusted EBIT. The company anticipates revenues in 2024 to be in the range of €265 million to €275 million and expects revenue growth to result in an adjusted EBIT between €11 million and €14 million for 2024.