Turning the Corner: 1Q25 Results Reaffirm Our Bullish Outlook on Materialise

Materialise $MTLS delivered a solid 1Q25, with revenues rising 4% Y/Y to €66.4M, ahead of analyst expectations of €63.1M. Growth was once again led by the Medical segment, which jumped 19% Y/Y to €31M. While macro headwinds continued to weigh on the Software and Manufacturing segments, the latter showed a notable rebound, growing 12% sequentially to €26M. Strong cost discipline, combined with better-than-expected topline performance, helped limit the EPS loss to just €0.01, significantly better than the consensus estimate of a €0.04 loss. The company reaffirmed its full-year revenue guidance of €270–280M, implying modest Y/Y growth despite ongoing macro pressure, and maintained its adjusted EBIT outlook of €6–10M.

We were very pleased with Materialise’s 1Q25 results, which aligned closely with our positive earnings preview last week. We believed that 1Q25 could mark a bottom, and these results further validate that view. Another quarter of nearly 20% Y/Y growth in the Medical segment underscores the company’s continued leadership in this domain. We were also encouraged by the sequential rebound in the Manufacturing segment, supporting our belief that 4Q24 weakness was primarily macro-driven. In a tough macro environment, we believe it’s particularly impressive that Materialise is still delivering modest top-line growth, which highlights the durability of its end markets. While profitability remains limited, the ramp of the new ACTech facility is temporarily absorbing hire costs, but something we expect to normalize as the year progresses, driving margin improvement. Given the strength in execution and a more favorable macro backdrop, we believe the company’s reiterated full-year guidance is not only attainable but potentially beatable. With shares trading at just 4x EBITDA, we believe that as costs are absorbed and margin expansion resumes, Materialise is on track to return to double-digit earnings growth. In turn, we expect this to drive meaningful multiple expansion from current levels, and as a result reiterate our Buy rating.