LEUVEN, Belgium — (BUSINESS WIRE) — August 11, 2016 — Materialise NV (NASDAQ: MTLS), a leading provider of additive manufacturing software and of sophisticated 3D printing services, today announced its financial results for the second quarter ended June 30, 2016.
Highlights – Second Quarter 2016
- Total revenue increased 11.4 % from the second quarter of 2015 to 27,597 kEUR, with increases in all three business segments.
- Adjusted EBITDA increased to 1,034 kEUR from (179) kEUR for the second quarter of 2015.
- Total deferred revenue from annual software sales and maintenance contracts increased 2,311 kEUR from 12,244 kEUR for the second quarter of 2015 to 14,555 kEUR for the second quarter of 2016.
Executive Chairman Peter Leys commented, “In the face of difficult industry conditions, with a number of market participants awaiting the introduction of the next generation of printers before making software purchases, Materialise continued to deliver double-digit revenue growth as well as an increase in Adjusted EBITDA. Total revenue rose 11.4% and Adjusted EBITDA increased from (179) kEUR to 1,034 kEUR. Importantly, all of our three segments – Materialise Software, Materialise Medical and Materialise Manufacturing – contributed to our revenue gains and our positive Adjusted EBITDA. During the quarter we launched several new initiatives to support our positioning as the ‘backbone’ of industrial 3D printing, including a collaboration with HP to develop a tailored software solution for its Multi Jet Fusion technology. We believe the entrance of this and other blue-chip companies into the additive manufacturing industry demonstrates the industry’s potential to transform manufacturing and supply chain dynamics, and we view our partnerships with these companies as validation of Materialise’s capabilities and industry positioning. We are developing additional meaningful partnerships and, although we expect certain parts of our industry to continue to show slow growth in the near term, our outlook for the year remains within our previous guidance range.”
Second Quarter 2016 Results
Total revenue for the second quarter of 2016 increased by 11.4% to 27,597 kEUR compared to 24,772 kEUR for the second quarter of 2015, with gains in all three of our segments. Adjusted EBITDA increased from (179) kEUR to 1,034 kEUR, as a result of the combination of continued revenue growth, an improvement in our gross margins and a moderate increase in operational expenses. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) in the second quarter was 3.7% compared to (0.7)% in the second quarter of last year.
Revenue from our Materialise Software segment, which offers a proprietary software backbone that enables and enhances the functionality of 3D printers and 3D printing operations worldwide, increased by 14.9% to 6,981 kEUR for the second quarter of 2016 from 6,078 kEUR for the same quarter last year, driven by the continued growth of recurring license revenue. Segment EBITDA declined to 1,602 kEUR from 2,015 kEUR while the segment EBITDA margin (the segment’s EBITDA divided by the segment’s revenue) was 22.9% compared to 33.2% in the prior-year period. This change reflects a significant increase in research and development (“R&D”) expenses for well-defined software projects we have recently undertaken.
Revenue from our Materialise Medical segment, which offers a unique platform consisting of medical planning and design software, clinical engineering services and patient specific devices, increased by 16.7% to 9,706 kEUR for the second quarter of 2016 compared to 8,315 kEUR for the same period in 2015. The increase was driven by direct sales of our complex surgery solutions, which increased by 41.7% from the prior-year period, and by sales from our collaborated medical device business, which increased 13.6%. Our medical software sales decreased by 2.0% compared to the same quarter in 2015. Segment EBITDA improved to 14 kEUR from (342) kEUR while the segment EBITDA margin improved to 0.1% from (4.1)% in the second quarter of 2015.
Revenue from our Materialise Manufacturing segment, which offers an integrated suite of 3D printing and engineering services to industrial and commercial customers, increased 5.1% to 10,907 kEUR for the second quarter of 2016 from 10,379 kEUR for the second quarter of 2015, primarily as a result of higher end part manufacturing. Segment EBITDA rose to 430 kEUR from (147) kEUR while the segment EBITDA margin increased to 3.9% from (1.4)% for the 2015 quarter. Excluding our growth businesses, i.materialise and RapidFit, the segment EBITDA margin for the second quarter was 13.0% compared to 8.4% for the same quarter of the prior year.
Gross profit was 16,253 kEUR, or 58.9% of total revenue, for the second quarter of 2016 compared to 14,327 kEUR, or 57.8% of total revenue, for the second quarter of 2015. The increase was primarily a result of the improvement in the gross margin of the Materialise Manufacturing segment.
R&D, sales and marketing (“S&M”) and general and administrative (“G&A”)
expenses increased, in the aggregate, by 8.1% to 19,182 kEUR for the
second quarter of 2016 from 17,738 kEUR for the second quarter of 2015.
R&D expenses increased from 4,371 kEUR to 4,760 kEUR while S&M expenses
declined slightly from 9,620 kEUR to 9,533 kEUR. G&A expenses increased
from 3,747 kEUR to 4,889 kEUR. These changes compared to last year
primarily reflected the managerial structure and support we have been
implementing within our S&M and R&D groups to support their significant
growth since our initial public offering (“IPO”). A number of employees
with mixed roles within these groups have evolved into more
managerial/administrative roles, and their cost as well as certain other
expenses are now categorized into G&A.