3D print service and software provider Materialise released their 2016 financial results this week.
It’s always useful to check out the financial results of larger 3D print companies as a way to grossly measure the overall industry. While stock prices may rise and fall dramatically as a result of hype, public interest, hysteria or actual news, what ultimately matters is whether a company is profitable or not, and by how much.
Those companies manufacturing 3D printers are perhaps the bellwether measure in this regard, as demand for their equipment shows great confidence by users in the technology. But in this case, Materialise is not a 3D printer manufacturer. They are instead a major 3D printer operator, providing advanced 3D print services globally. They also produce very popular software used by industrial 3D printing users to operate their equipment efficiently.
So how did the 3D print service do in 2016, which was a challenging year for all?
Materialise’s revenue grow by 12.3% to €114.5M (USD$121.5M), making them one of the larger companies in the space. Earnings (actually EBITDA, Earnings before interest, tax, depreciation and amortization) increased by a whopping 156% to €9.5M (USD$10M) mostly as a result of slowed increases in operational costs. They’re running more efficiently - and perhaps using postponing equipment purchases by running off existing gear. That’s my speculation, but if true, it might explain the dents in the 3D printer manufacturers’ stats.
What’s expected for 2017? Executive Chairman Peter Leys explained:
The additive manufacturing market continues to evolve, particularly in the direction of end part production, and we intend to continue positioning Materialise to benefit from this promising growth market in the coming years. Our strategic priorities for 2017 are to sustain our leadership position in software through continued innovation and strategic partnerships; to drive the next stage of growth in our medical division through our focus on the hospital market; to continue increasing our manufacturing of end parts; and to enable the development of additive manufacturing in specific vertical markets. We anticipate delivering sales and Adjusted EBITDA margin expansion in 2017 while reinvesting efficiency gains in selected business development initiatives.
For fiscal 2017, we expect to report consolidated revenue between 128,000 - 134,000 kEUR and Adjusted EBITDA between 10,500 - 13,500 kEUR. As the seasonality of our Materialise Manufacturing segment and our software businesses are expected to combine with the effects of the ramp up of the partnerships we entered into in the past months, we expect our financial results to be particularly strong in the third quarter and even stronger in the fourth quarter. We expect the amount of deferred revenue that Materialise generates from annual licenses and maintenance in 2017 to increase by an amount between 4,000 - 5,000 kEUR.
It’s interesting to note that a good chunk of their growth comes from delving deep into particular application areas, such as Medical. This follows the trend I’ve seen where the idea is to provide specific and meaningful benefits within industry areas, something most 3D print-related vendors are pursuing these days.
So it seems that Materialise is in a very solid position for the future.