Clouds over Leuven
The Atomic Layers: S7E24 (00202)
Atomic Layer of the Day:
Until now, Materialise was the only legacy AM company that was performing well in the market. This was largely due to the fact that the Belgian company, unlike the other three major players (3D Systems, Stratasys, EOS), was the least dependent on hardware, instead specializing in software and specialized medical services.
But this situation has now changed. Materialise has published its financial results for Q4 2024, providing an overview of the entire past year. Compared to other companies in the AM market, the results look excellent. However, when analyzed independently, it becomes clear that storm clouds are gathering over the company.
For now, these are not dark, ominous clouds that definitively signal an incoming storm. Rather, they are clouds that have obscured the sun, leaving uncertainty about what might happen next. What is certain is that the weather is no longer as comfortable as it was just a short while ago.
Or speaking directly—problems have emerged, and solving them will not be easy.
In the fourth quarter of 2024, Materialise recorded a modest revenue increase of 0.6% compared to the same period the previous year, reaching €65.68 million. This growth was driven by the Materialise Medical segment, which increased its revenue by 14.3%.
However, the Materialise Manufacturing segment saw a decline of -13.3%, negatively impacting the company’s overall performance.
Adjusted EBITDA for the fourth quarter dropped to €4.3 million, nearly half of the €8.47 million recorded the previous year. Adjusted EBIT was even worse, standing at -€1.19 million, compared to a positive €3.15 million a year earlier.
Despite these difficulties, the company reported an improvement in net income, posting a profit of €2.91 million compared to a loss of €0.54 million in Q4 2023.
This was driven by favorable exchange rate differences and higher financial income. Gross margin slightly declined from 57.5% to 55.4%, R&D expenditures increased by 19.6%, and total operating costs rose by 10.2%, further straining profitability.
Analyzing the full-year results for 2024, Materialise achieved a 4.2% revenue increase, reaching €266.8 million. Once again, the highest revenue came from the Materialise Medical segment, which grew by 14.8%, while the Software and Manufacturing segments recorded declines of 1.2% and 3.4%, respectively.
EBITDA margin fell to 11.8% (from 12.3% the previous year), indicating that revenue growth did not translate into improved profitability.
So what does this mean? What are these storm clouds?
First of all, the stock market reaction to these results was a heavy rain. Following the earnings report, Materialise’s stock price plummeted by -35%.
For reference, here’s what the stock price looks like historically. That -35% drop doesn’t seem so bad when compared to the peak from January 2021, does it?
Why such a sudden shift in investor sentiment? Most likely because the two pillars that built the company—AM services and AM software—are struggling.
In both cases, the culprits are China (for AM services) and falling prices of alternative solutions from competitors (for software).
Worse still, there are no clear signs of a quick recovery.
I dedicated three-quarters of last week to analyzing the pressure from Chinese companies. While I happened to overlook the services sector, it is just as affected as hardware, software, and materials. There are no easy solutions here.
As for software, Materialise has always been known for two things—exceptionally high-quality products and the highest prices on the market. Buying Magics or Mimics is the equivalent of purchasing a Swiss watch or a Lamborghini.
Overall, the company is still performing quite well—especially when compared to its competitors and the broader economic situation. However, the challenges that emerged last year will not be easy to overcome.
Atomic Layer from the Past:
02-24-2022: 3DGence released the INDUSTRY F421.
GET FREE HISTORY BOOK: ‘2012 in AM’
News & Gossip:
We start with Desktop Metal vs. Nano DImension! A trial date has been set for March 11-12, 2025, in the Delaware Court of Chancery for Desktop Metal’s litigation against Nano Dimension over alleged breaches of their merger agreement. As you probably remeber, Desktop Metal filed the lawsuit in December 2024, claiming Nano Dimension failed to use "reasonable best efforts" to secure regulatory approval for its proposed acquisition of Desktop Metal. So in next three weeks the parties will meet to discuss the allegations before the court. You should also remeber, that late 2024, there was a heavy shift in Nano’s management. So I'm very curious which direction this case will go...?
SHINING 3D has launched the FreeScan Trak Nova and Trak ProW scanners for use in industrial metrology. The Trak Nova combines a portable tracking scanner, handheld laser scanner, and video photogrammetry module, offering flexibility for large-scale scanning. The Trak ProW features an 8.6m tracking range and marker-free scanning, ideal for quality control in industries like aviation and automotive.
Another day, another super cheap 3D printer from China. Artillery 3D has unveiled the Artillery M1 Pro, a new CoreXY 3D printer featuring a filament switcher for multi-color printing. With a build volume of 260x260x260 mm, it supports speeds up to 600 mm/s and includes a heated chamber (up to 60°C), a LiDAR sensor for print monitoring, and air filtration. Priced at around €350, the base model launches in late March, with the multi-material unit following in August.