Materialise delivers mixed results in Q1 2025 (and oh my goodness – I took a look at last year’s Velo3D results😬)
The Atomic Layers: S9E26 (00263)
Atomic Layer of the Day:
Materialise has published its results for the first quarter of 2025, presenting rather mixed outcomes. Overall, the situation is not bad — in some areas, it is actually quite decent. Nevertheless... 🤨
Materialise reported a revenue increase of +4.3% compared to the same period in 2024, reaching 66.4 million euros. The main driver of growth was the Materialise Medical segment, whose revenue rose by an impressive +18.7% year-over-year, reaching 31.1 million euros. This growth helped offset declines in the company's other business segments.
Because revenue in the Materialise Software segment dropped by -6.4% to 9.8 million euros, and in the Materialise Manufacturing segment by -5.5% to 25.5 million euros.
Particularly concerning is the performance of the manufacturing sector, where an Adjusted EBITDA margin of -1.5% was recorded, compared to +5.7% in the first quarter of 2024. The Software segment also saw a drop in profitability, achieving an Adjusted EBITDA margin of +6.1%, down from +10.4% a year earlier.
Operating profit decreased from 2.6 million euros to 0.6 million euros. Despite a 2.2% increase in gross profit (up to 36.7 million euros), the gross margin slightly declined from 56.5% to 55.3%. Expenses for research and development, sales and marketing, and general and administrative costs collectively rose by 6.9%, reaching 36.5 million euros.
Materialise recorded a net loss of 0.5 million euros, compared to a net profit of 3.6 million euros in the same period last year. The net result was also negatively impacted by unfavorable exchange rate differences, leading to a negative financial result of -0.9 million euros, compared to a positive 1.5 million euros a year earlier.
However, it is important to highlight the improvement in the company's cash position.
Thanks to positive cash flow from operating activities (9.7 million euros) and limited capital expenditures (1.8 million euros), Materialise increased its net cash position by 6.7 million euros, reaching 67.7 million euros as of the end of March 2025. Cash and cash equivalents amounted to 104.2 million euros, with gross debt reduced to 36.4 million euros. Shareholders' equity rose slightly from 248.5 million euros to 248.7 million euros.
Therefore, the assessment of Materialise’s results for the first quarter of 2025 is mixed. On the one hand, the company has demonstrated that even in a challenging macroeconomic and geopolitical environment, it can grow its revenue. On the other hand, the significant decline in profitability, especially in the Software and Manufacturing segments, along with the shift from net profit to a net loss, may raise concerns among shareholders.
The stock price has rebounded slightly but has still not recovered to previous levels after the sharp drop that occurred in March following the publication of the full-year 2024 results.
For now, investors should remain cautious and closely monitor the results in the upcoming quarters.
Atomic Layer from the Past:
04-26-2017: EOS and 3YOURMIND presented the AMPI tool for automatic identification of parts suitable for 3D printing.
News & Gossip:
Today will be a little different. I have two interesting rumors, but I’m saving them for tomorrow…
While searching for materials for this newsletter, I visited an investor relations page that I had pretty much forgotten about — that of the recent American metal AM champion, Velo3D. And I discovered a report for last year, buried deep in their investor relations section (published at the end of March this year).
Oh boy... what a report...
Oh Jeez, they were so close to the ultimate end... 🫨
In 2024, Velo3D recorded a dramatic drop in revenue compared to 2023. Total revenue amounted to $41.0 million, while the year before it was $77.4 million, marking a decline of as much as -47.1%.
But the biggest collapse happened in the sales of 3D printers, where revenue fell from $68.9 million in 2023 to just $25.4 million in 2024.
Revenue from support services increased from $6.8 million to $9.6 million, while inflows from recurring payments (leases) decreased from $1.7 million to $1.1 million.
The company posted an operating loss of -$82.3 million, compared to -$133.3 million the year before. Operating expenses — which include research and development ($17.1 million), sales and marketing ($13.8 million), and general and administrative expenses ($49.3 million) — declined compared to 2023 (when they totaled $107 million).
Velo3D’s final net loss for 2024 amounted to -$73.3 million, compared to -$135.1 million the previous year.
Finally, I want to highlight the drastic reduction in cash reserves.
At the end of 2024, the company had just $1.2 million in cash and cash equivalents, compared to $24.5 million at the end of 2023.
Total assets dropped from $153.8 million to $89.2 million, and shareholders' equity decreased from $68.3 million to $39.7 million.
The company significantly reduced its debt — there were no long-term liabilities reported at the end of 2024, compared to $11.9 million in 2023. However, short-term liabilities still amounted to $38 million, including $5.7 million in short-term debt.
Today, we know that Velo3D was saved by Arrayed Additive. But c’mon...
The 2024 financial report does not inspire optimism about the future. The company is struggling with a drastic decline in revenue, high net losses, and a very low level of cash. Although operating costs were reduced and the loss was narrowed, the pace at which financial resources were being depleted was terrifying...