Q3 2026 Materialise NV Earnings Call

October 28, 2026

Operator: Thank you for standing by, and welcome to the Q3 2026 Materialise NV Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question, you will need to press star 1 1 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. Now it is my pleasure to turn the call to Jody Burfening, Managing Director at Alliance Investor Relations. Please proceed.

Speaker #1: After the speaker's presentation, there will be a question-and-answer session. To ask a question, you will need to press star 11 on your telephone. You will then hear a message advising you that your hand is raised.

Speaker #1: To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. Now it's my pleasure to turn the call to Jody Burfering, Managing Director at Alliance Investor Relations.

Speaker #1: Please proceed.

Jody Burfening: Thank you, Carmen, and thank you for joining us today for Materialise's quarterly conference call. With us on the call are Brigitte de Vet-Veithen, Chief Executive Officer, and Koen Berges, Chief Financial Officer. Today's call and webcast are being accompanied by a slide presentation that reviews Materialise's strategic, financial, and operational performance for the Q3 2026. To access the slides, if you have not already done so, please go to the investor relations section of the company's website at www.materialise.com. The earnings press release that was issued earlier today can be found on that page. Before we get started, I would like to remind you that management may make forward-looking statements regarding the company's plans, expectations, and growth prospects, among other things.

Speaker #2: Thank you, Carmen, and thank you for joining us today for the MATERIALISE quarterly conference call. With us on the call are Brigitte Vet, Chief Executive Officer, and Koen Berges, Chief Financial Officer.

Speaker #2: Today's call and webcast are being accompanied by a slide presentation that reviews MATERIALISE's strategic financial and operational performance for the third quarter of 2026.

Speaker #2: To access the slides, if you have not already done so, please go to the Investor Relations section of the company's website at www.materialise.com. The earnings press release that was issued earlier today can be found on that page.

Speaker #2: Before we get started, I would like to remind you that management may make forward-looking statements regarding the company's plans, expectations, and growth prospects, among other things.

Jody Burfening: These forward-looking statements are subject to known and unknown uncertainties and risks that could cause actual results to differ materially from the expectations expressed, including competitive dynamics and industry change. Any forward-looking statements, including those related to the company's future results and activities, represent management's estimates as of today and should not be relied upon as representing their estimates as of any subsequent day. Management disclaims any duty to update or revise any forward-looking statements to reflect future changes or events in expectations. A more detailed description of the risks and uncertainties and other factors that may impact the company's future business or financial results can be found in the company's most recent annual report on Form 20-F filed with the SEC. Finally, management will discuss certain non-IFRS measures on today's conference call. A reconciliation table is contained in the earnings release and at the end of the slide presentation.

Speaker #2: These forward-looking statements are subject to known and unknown uncertainties and risks that could cause actual results to differ materially from the expectations expressed, including competitive dynamics and industry changes.

Speaker #2: Any forward-looking statements, including those related to the company's future results and activities, represent management's estimates as of today and should not be relied upon as representing their estimates as of any subsequent date.

Speaker #2: Management disclaims any duty to update or revise any forward-looking statements to reflect future changes or events and expectations. A more detailed description of the risks and uncertainties and other factors that may impact the company's future business or financial results can be found in the company's most recent annual report on Form 20F, filed with the FCC.

Speaker #2: Finally, management will discuss certain non-IFRS measures on today's conference call. I grant conciliation table is contained in the earnings release, and at the end of the slide presentation.

Jody Burfening: With that, I would now like to turn the call over to Brigitte de Vet-Veithen. Brigitte?

Speaker #2: With that, I would now like to turn the call over to Brigitte. Brigitte?

Brigitte de Vet-Veithen: Good morning and good afternoon, and thank you all for joining us today. You can find the agenda for our call on slide 3. First, I will summarize the business highlights for Q3 2026. Then I will pass the floor to Koen, who will take you through the Q3 financials. Finally, I will come back and explain what we expect the remaining months of 2026 to bring. When we have completed our prepared remarks, we will be happy to respond to questions. Moving to slide 4 for the highlights of Q3 2026. In Q3, we continued to execute on our strategic priorities across all business segments. In medical, we see real momentum in the demand for personalized solutions in various clinical fields, and we have accelerated our investments to scale the adoption of personalization.

Speaker #3: Good morning, and good afternoon, and thank you all for joining us today. You can find the agenda for our call on slide 3. First, I will summarize the business highlights for the third quarter of 2026.

Speaker #3: Then I will pass the floor to Koen, who will take you through the third quarter financials and finally, I will come back and explain what we expect the remaining months of 2026 to bring.

Speaker #3: When we've completed our prepared remarks, we'll be happy to respond to questions. Moving to slide 4 for the highlights of the third quarter 2026.

Speaker #3: In the third quarter, we continue to execute on our strategic priorities across all business segments. In medical, we see real momentum in the demand for personalized solutions in various clinical fields, and we have accelerated our investments to scale the adoption of personalization.

Brigitte de Vet-Veithen: In Q3 in particular, we have made progress in our current focus segments. First, in our medical CMF business, we signed an agreement with the Superhumans Center in Ukraine to support the growing need for craniomaxillofacial reconstructive surgery resulting from the ongoing war. The agreement will enable us to support the treatment of hundreds of patients and war victims with patient-specific solutions and standard plates. Beyond providing surgical solutions, we will support the development of local medical expertise by providing access to our software ecosystem and by providing specialist training at medical universities in Kiev and Lviv, focusing on 3D visualization and patient-specific surgical planning. For Materialise, this partnership demonstrates how we can combine our technology and clinical expertise to address complex reconstructive needs while helping build local capabilities for more personalized care.

Speaker #3: In the third quarter in particular, we have made progress in our current focus segments. First, in our medical CMF business, we signed an agreement with the Superhuman Center in Ukraine to support the growing need for cranio-maxillofacial reconstructive surgery resulting from the ongoing war.

Speaker #3: The agreement will enable us to support the treatment of hundreds of patients in war victims with patient-specific solutions and standard plates. Beyond providing surgical solutions, we will support the development of local medical expertise by providing access to our software ecosystem and by providing specialist training at medical universities in Kiev and Lviv, focusing on 3D visualization and patient-specific surgical planning.

Speaker #3: For MATERIALISE, this partnership demonstrates how we can combine our technology and clinical expertise to address complex reconstructive needs while helping build local capabilities for more personalized care.

Brigitte de Vet-Veithen: In Q3, we also launched several new products in our CMF segment, demonstrating our continued focus on making personalized surgical solutions more accessible and easier to integrate into routine clinical practice. As an example, we introduced ready-to-use sterile packaging. These solutions help hospitals reducing operating room preparation steps and enhance compliance with regulatory requirements. We also introduced the next version of Materialise Mimics Enlight CMF, which gives clinical teams greater autonomy in 3D surgical planning. Surgeons can now prepare and review their own 3D plans or rely on our clinical engineers to plan their cases when needed. All of this in an integrated workflow. These innovations reflect our strategy to improve efficiency for healthcare providers and support the broader scaling of our CMF solutions.

Speaker #3: In the third quarter, we also launched several new products in our CMF segment, demonstrating our continued focus on making personalized surgical solutions more accessible and easier to integrate into routine clinical practice.

Speaker #3: As an example, we introduced ready-to-use sterile packaging. These solutions help hospitals reduce operating room preparation steps, and enhance compliance with regulatory requirements. We also introduced the next version of mimics and light CMF, which gives clinical teams greater autonomy in 3D surgical planning.

Speaker #3: Surgeons can now prepare and review their own 3D plans or rely on our clinical engineers to plan their cases when needed, all of this in an integrated workflow.

Speaker #3: These innovations reflect our strategy to improve efficiency for healthcare providers and support the broader scaling of our CMF solutions. Second, in our medical cardiac business, we expanded our AI-powered mimics planning solutions for cardiac interventions, with a new workflow for transcatheter aortic valve valve replacement procedures.

Brigitte de Vet-Veithen: Second, in our medical cardiac business, we expanded our AI-powered Mimics planning solutions for cardiac interventions with a new workflow for transcatheter aortic valve-in-valve replacement procedures. These procedures involve replacing a previously implanted aortic valve that is no longer functioning properly. This is a more complex intervention than an initial valve replacement, and the procedure requires careful navigation and planning. The 3D modeling and simulation functionalities of Mimics Cardiac are a powerful tool to reduce the risk of such procedures. The new AI-powered workflow automates several critical planning steps, helping clinicians assess potential risks and reduce manual effort while maintaining full control over clinical decisions. The introduction of this functionality reflects our continued focus on making complex interventions more predictable and efficient through advanced 3D planning and AI-powered automation.

Speaker #3: These procedures involve replacing a previously implanted aortic valve that is no longer functioning properly. This is a more complex intervention than an initial valve replacement, and the procedure requires careful navigation and planning.

Speaker #3: The 3D modeling and simulation functionalities of mimics cardiac are a powerful tool to reduce the risk of such procedures. The new AI-powered workflow automates several critical planning steps, helping clinicians assess potential risks and reduce manual effort, while maintaining full control over clinical decisions.

Speaker #3: The introduction of this functionality reflects our continued focus on making complex interventions more predictable and efficient through advanced 3D planning and AI-powered automation. Third, in our medical soft tissue business, we expanded MATERIALISE mimics for thoracic surgery and now offer a dedicated workflow for liver resection planning and interoperative support.

Brigitte de Vet-Veithen: Third, in our medical soft tissue business, we expanded Materialise Mimics for thoracic surgery and now offer a dedicated workflow for liver resection planning and intraoperative support. Liver resections, primarily performed to remove tumors, present significant clinical challenges. Surgeons must meticulously balance adequate tumor margins while preserving enough healthy tissue to prevent postoperative liver failure. Our new workflow assists surgeons in critical clinical decision-making, allowing them to identify anatomical risks and confidently plan the procedure. This strategic expansion directly addresses the growing demand for advanced 3D planning and intraoperative support in minimally invasive surgeries, and it is a next step to build out our comprehensive portfolio of 3D planning solutions for soft tissue cancer resections. Turning to our software segment now. In Q3, we continued to see encouraging commercial momentum for our CO-AM platform.

Speaker #3: Liver resections primarily performed to remove tumors present significant clinical challenges. Surgeons must meticulously balance adequate tumor margins while preserving enough healthy tissue to prevent post-operative liver failure.

Speaker #3: Our new workflow assists surgeons in critical clinical decision-making, allowing them to identify anatomical risks and confidently plan the procedure. This strategic expansion directly addresses the growing demand for advanced 3D planning and interoperative support in minimally invasive surgeries and it is a next step to build out our comprehensive portfolio of 3D planning solutions for soft tissue cancer resections.

Speaker #3: Turning to our software segment now. In the third quarter, we continued to see encouraging commercial momentum for our Koen platform. First, we closed strategic deals for Koen NPI with leading customers in our focus segments and in particular the aerospace industry.

Brigitte de Vet-Veithen: First, we closed strategic deals for CO-AM NPI with leading customers in our focus segments and in particular, the aerospace industry. CO-AM NPI is one of our three CO-AM offerings designed to accelerate new product introductions and qualification processes for series additive manufacturing. By streamlining critical steps, we help customers move more efficiently from product development to qualified series production. Second, we further strengthened our CO-AM platform by integrating CO-AM Bricks with Identify3D, our technology for securing and tracing digital part files throughout the manufacturing process. While security controls previously applied to an entire 3D printing build, we can now manage protection traceability and users' rights at the level of each individual part, even when multiple parts from different owners are produced in the same build.

Speaker #3: Koen NPI is one of our three Koen offerings, designed to accelerate new product introductions and qualification processes for series additive manufacturing. By streamlining critical steps, we help customers move more efficiently from product development to qualified series production.

Speaker #3: Second, we further strengthened our CO-AM platform by integrating CO-AM bricks with Identify3D, our technology for securing and tracing digital part files throughout the manufacturing process.

Speaker #3: While security controls previously applied to an entire 3D printing build, we can now manage protection traceability and use its rights at the level of each individual part.

Speaker #3: Even when multiple parts from different owners are produced in the same build. For customers in industries with complex supply chains and strict compliance requirements, including defense, this enables secure, on-demand production across multiple locations with full control over intellectual property and production rights.

Brigitte de Vet-Veithen: For customers in industries with complex supply chains and strict compliance requirements, including defense, this enables secure on-demand production across multiple locations with full control over intellectual property and production rights. Third, we are gearing up for Formnext, the world's leading additive manufacturing trade show, where we will showcase the power of an open ecosystem approach and will demonstrate how the Materialise CO-AM ecosystem helps manufacturers build connected, scalable AM operations. The day before Formnext, we will also play a leading role at the AM Innovation and Standards Summit, advocating for common frameworks to scale additive manufacturing as a strategic capability. In addition, at the Formnext European Defense event, we will demonstrate how we can play a distinctive role providing manufacturing capacity and the digital infrastructure needed to connect and manage production across secure distributed production environments. Moving on to manufacturing.

Speaker #3: Third, we are gearing up for phone next, the world's leading additive manufacturing trade show, where we'll showcase the power of an open ecosystem approach and we'll demonstrate how the MATERIALISE Koen ecosystem helps manufacturers build connected, scalable AM operations.

Speaker #3: The day before phone next, we will also play a leading role at the AM Innovation and Standards Summit, advocating for common frameworks to scale additive manufacturing as a strategic capability.

Speaker #3: And in addition, at the phone next European Defense Event, we will demonstrate how we can play a distinctive role providing manufacturing capacity and the digital infrastructure needed to connect and manage production across secure, distributed, production environments.

Speaker #3: Moving on to manufacturing. In the third quarter, we continued to see strong momentum in core manufacturing, with revenues for series production growing by more than 30% year over year in the quarter.

Brigitte de Vet-Veithen: In the third quarter, we continued to see strong momentum in core manufacturing, with revenues for series production growing by more than 30% year-over-year in the quarter, driven by demand from the aerospace, semiconductor, and defense industries. In the third quarter, we also invested in additional metal additive manufacturing capabilities in order to enable faster production of larger metal components, particularly for demanding defense applications. The investment will also support our research into software-based quality assurance by providing valuable production data to develop and validate more reliable methods for assessing the quality of aerospace parts. This will be a critical contribution to the European SOMVisa project. As you might recall, we are a leading partner in this European research initiative, focusing on improving and standardizing quality assurance for metal 3D-printed aerospace components.

Brigitte de Vet-Veithen: In the Q3, we continued to see strong momentum in core manufacturing, with revenues for series production growing by more than 30% year-over-year in the quarter, driven by demand from the aerospace, semiconductor, and defense industries. In the third quarter, we also invested in additional metal additive manufacturing capabilities in order to enable faster production of larger metal components, particularly for demanding defense applications. The investment will also support our research into software-based quality assurance by providing valuable production data to develop and validate more reliable methods for assessing the quality of aerospace parts. This will be a critical contribution to the European SOMVisa project. As you might recall, we are a leading partner in this European research initiative, focusing on improving and standardizing quality assurance for metal 3D-printed aerospace components.

Speaker #3: Driven by demand from the aerospace, semiconductor, and defense industries. In the third quarter, we also invested in additional metal additive manufacturing capabilities in order to enable faster production of larger metal components, particularly for demanding defense applications.

Speaker #3: The investment will also support our research into software-based quality assurance by providing valuable production data to develop and validate more reliable methods for assessing the quality of aerospace parts.

Speaker #3: This will be a critical contribution to the European SONVISA project, as you might recall, we are a leading partner in this European research initiative focusing on improving and standardizing quality assurance for metal 3D printed aerospace components.

Brigitte de Vet-Veithen: Our Materialise Motion business also showed strong momentum for our new insoles called Phits Dynaprint, our affordable orthotic solution that we recently launched in the US to a limited set of centers. Phits Dynaprint gives clinicians greater choice and flexibility with faster delivery times of the insoles and without the need to invest in their own 3D printer. Since its introduction, we have seen a significant increase in adoption, supported by very positive feedback from customers, including podiatrists. In the UK and Ireland, where Phits Dynaprint was first launched, we have seen volumes double. With expansion into North America in the third quarter, total volumes have now tripled versus the second quarter, reflecting strong market adoption and growing demand for the solution. Turning over to Koen now, who will present the financial results.

Speaker #3: Our MATERIALISE Motion business also showed strong momentum for our new installs called Fitz Dynaprint, our affordable orthotic solution that we recently launched in the US to a limited set of centers.

Speaker #3: Fitz Dynaprint gives clinicians greater choice and flexibility with faster delivery times of the installs and without the needs to invest in their own 3D printer.

Speaker #3: Since its introduction, we have seen a significant increase in adoption, supported by very positive feedback from customers, including podiatrists. In the UK and Ireland, where Fitz Dynaprint was first launched, we have seen volumes double.

Speaker #3: With the expansion into North America in the third quarter, total volumes have now tripled versus the second quarter. Reflecting strong market adoption and growing demand for the solution.

Speaker #3: Turning over to Koen now, who will present the financial results.

Koen Berges: Thank you, Brigitte. Good morning or good afternoon to everyone joining us today. I will begin with the key financial highlights for the third quarter of this year on slide 6. In this quarter, consolidated revenue grew by more than 2% year-on-year to EUR 67.7 million. Excluding the impact of recent divestitures, however, revenue increased by almost 5%. Gross profit increased to EUR 39 million, resulting in a gross margin of 57.7%. Adjusted EBIT amounted to EUR 2.5 million, representing an adjusted EBIT margin of 3.7%. Net profit for the quarter was EUR 1.4 million or EUR 0.02 per share. Our balance sheet and cash generation remain key strategic strengths, giving us the flexibility to invest for future growth. Supported by strong operating cash flow, our net cash position increased to EUR 82.5 million, up by almost EUR 12 million from the start of the year.

Speaker #2: Thank you, Brigitta. Good morning or good afternoon to everyone joining us today. I'll begin with the key financial highlights for the third quarter of this year on slide six.

Speaker #2: In this quarter, consolidated revenue grew by more than 2% year on year. To 67.7 million euro. Excluding the impact of recent divestitures, however, revenue increased by almost 5%.

Speaker #2: Gross profit increased to 39 million euro, resulting in a gross margin of 57.7%. Adjusted EBIT amounted to 2.5 million euro, representing an adjusted EBIT margin of 3.7%.

Speaker #2: At net profit for the quarter, was 1.4 million euro, or 2 euro cents per share. Our balance sheet and cash generation remain key strategic strengths.

Speaker #2: Giving us the flexibility to invest for future growth. Supported by strong operating cash flow, our net cash position increased to 82.5 million euro, up by almost 12 million from the start of the year.

Koen Berges: We also continued our share buyback program, investing EUR 7.5 million during the first three quarters of 2026. I will now walk you through these results in more detail. As a reminder, and unless stated otherwise, all comparisons are versus the third quarter of 2025. Turning now to slide 7, which provides an overview of our consolidated revenue. As said, in this quarter, consolidated revenue reached EUR 67.7 million, up by more than 2% year-on-year, and when excluding the impact of the recent divestitures, almost 5% year-over-year. Our Medical segment continued to lead consolidated revenue growth, with revenue again increasing by nearly 10%, maintaining its growth trajectory. Revenue in our Manufacturing segment declined by 6% year-on-year. But when excluding the impact of the divestitures, however, revenue grew 1.5%, as our repositioning towards high-value series production continued to gain traction.

Speaker #2: We also continue our share buyback program, investing 7.5 million euro during the first three quarters of 2026. I will now walk you through these results in more detail.

Speaker #2: As a reminder, and unless stated otherwise, all comparisons are versus the third quarter of 2025. Turning now to slide seven, which provides an overview of our consolidated revenue.

Speaker #2: As set in this quarter, consolidated revenue reached 67.7 million, up by more than 2% year on year, and when excluding the impact of the recent divestitures, almost 5% year over year.

Speaker #2: Our medical segment continued to lead consolidated revenue growth. With revenue again increasing by nearly 10%, maintaining its growth trajectory. Revenue in our manufacturing segment declined by 6% year on year.

Speaker #2: But when excluding the impact of the divestitures, however, revenue grew 1.5%, as our positioning towards high value series production continued to gain traction. Software revenues, on the other hand, declined by just over 4%, mainly reflecting continued cautious customer spending and extended sales cycles.

Koen Berges: Software revenues, on the other hand, declined by just over 4%, mainly reflecting continued cautious customer spending and extended sales cycles. At the same time, our large base of recurring revenue provides stability, although it did not fully offset the pressure on sales. As shown on the right-hand side of the slide, medical represented 54% of total revenues in the quarter, with manufacturing at 31% and software at 15%. Our deferred revenue balance for software maintenance and license fees across both medical and software segments decreased to EUR 45 million in Q3, in line with normal seasonal renewal patterns. Total deferred revenue carried on our balance sheet was up EUR 59 million at quarter end. Slide 8 shows our consolidated adjusted EBIT and EBITDA. In the third quarter, adjusted EBITDA was EUR 8 million, representing an adjusted EBITDA margin of 11.9%. Adjusted EBIT was EUR 2.5 million, resulting in a 3.7% adjusted EBIT margin.

Speaker #2: At the same time, our large base of recurring revenue provides stability. Although we did not fully offset the pressure on sales. As shown on the right-hand side of the slide, medical represented 54% of total revenues in the quarter, with manufacturing at 31% and software at 15%.

Speaker #2: Our deferred revenue balance for software maintenance and license fees across both medical and software segments decreased to 45 million, in Q3, in line with normal seasonal renewal patterns.

Speaker #2: Total deferred revenue carried on our balance sheet was at 59 million, at quarter end. Slide eight shows our consolidated adjusted EBIT and EBITDA. In the third quarter, adjusted EBITDA was 8 million euro, representing an adjusted EBITDA margin of 11.9%.

Koen Berges: Adjusted EBIT was EUR 2.5 million, resulting in a 3.7% adjusted EBIT margin.

Speaker #2: Adjusted EBIT was 2.5 million euro, resulting in a 3.7% adjusted EBIT margin. Higher gross profit was more than offset by intensified R&D investments, and by some one-time costs in the quarter that we considered operational and therefore did not adjust for.

Koen Berges: Higher gross profit was more than offset by intensified R&D investments and by some one-time costs in the quarter that we considered operational and therefore did not adjust for. At the same time, we continued to maintain discipline over our recurring spending. While operational performance ended lower in Q3, year-to-date adjusted EBITDA stands now at EUR 25.7 million, which is 12% higher compared to prior year. Adjusted EBIT this year is year-to-date at EUR 8.8 million, up by 33% compared to prior year. Turning now to our segments. Slide 9 shows Materialise Medical. As said, medical revenue increased nearly 10% year-on-year. That growth was broad-based, with medical devices and medical software sales each increasing around 10%. In the third quarter, we further intensified targeted R&D investments in order to capture future growth opportunities.

Speaker #2: At the same time, we continued to maintain discipline over our recurring spending. While operational performance ended lower in Q3, year to date adjusted EBITDA stands now at 25.7 million euro, which is 12% higher compared to prior year.

Speaker #2: An adjusted EBIT this year is year to date at 8.8 million euro, up by 33% compared to prior year. Turning now to our segments.

Speaker #2: Slide nine shows MATERIALISE Medical. As set medical revenue increased nearly 10% year on year, that growth was broad-based with medical devices and medical software sales each increasing around 10%.

Speaker #2: In the third quarter, we further intensified targeted R&D investments, in order to capture future growth opportunities. Despite this increased spend, we landed our adjusted EBITDA at 10 million euro, in line with prior year and representing a 27.4% margin.

Koen Berges: Despite this increased spend, we landed our adjusted EBITDA at EUR 10 million, in line with prior year and representing a 27.4% margin. For the first nine months, medical revenue was at EUR 106.6 million, up nearly 10% year-on-year, with adjusted EBITDA at EUR 30.8 million, representing a margin of 29%. Slide 10 summarizes the results of our Materialise Software segment. Software continued to face a challenging industrial spending environment. In Q3 of this year, software revenue decreased by 4% to EUR 9.9 million, reflecting, as I said, continuous cautious customer spending and extended sales cycles. Recurring revenue represented 84% of software revenue in the quarter. The share has now stabilized compared with recent quarters, indicating that we have reached the end of the transitioning from perpetual licenses to recurring license model.

Speaker #2: For the first nine months, medical revenue was at 106.6 million euro, up nearly 10% year on year. With adjusted EBITDA at 30.8 million, representing a margin of 29%.

Speaker #2: Slide 10 summarizes the results of our Materialise software segments. Software continued to face a challenging industrial spending environment. In Q3 of this year, software revenue decreased by 4% to €9.9 million.

Speaker #2: Reflecting, as I said, continuous cautious customer spending and extended sales cycles. Recurring revenue represented 84% of software revenue in the quarter. The share has now stabilized compared with recent quarters.

Speaker #2: Indicating that we have reached the end of the transitioning from perpetual licenses to recurring license model. Adjusted EBITDA declined to 1.5 million euro, representing a 15% adjusted EBITDA margin.

Koen Berges: Adjusted EBITDA declined to EUR 1.5 million, representing a 15% adjusted EBITDA margin, reflecting low revenue and ongoing investments in the new CO-AM platform. For the first nine months, software revenue was at EUR 29 million, down 3% year-on-year, with an adjusted EBITDA of EUR 3.6 million, representing a margin of more than 12%. Slide 11 shows an overview of the performance of our Manufacturing segment. As indicated, the revenue decreased 6% to EUR 21.3 million, but excluding the impact of recent divestitures, revenue grew 1.5%, supported by continued traction in our strategic focus areas, particularly aerospace and defense. The growth in series manufacturing continued to be largely offset by softer prototyping demand compared on a year-on-year basis. Adjusted EBITDA improved to a loss of EUR 0.3 million from a loss of EUR 0.8 million in the prior year, supported by continued cost discipline and portfolio optimization.

Speaker #2: Reflecting low revenue and ongoing investments, in the new COEN platform. For the first nine months, software revenue was at 29 million euro, down 3% year on year.

Speaker #2: With an adjusted EBITDA of 3.6 million euro, representing a margin of more than 12%. Slide 11 shows an overview of the performance of our manufacturing segments.

Speaker #2: As indicated, the revenue decreased 6% to 21.3 million, but excluding the impact of recent divestitures, revenue grew 1.5%, supported by continued traction in our strategic focus areas, particularly aerospace and defense.

Speaker #2: The growth in series manufacturing continued to be largely offset by software prototyping demand, compared on a year-on-year basis. Adjusted EBITDA improved to a loss of 0.3 million euro from a loss of 0.8 million euro in the prior year, supported by continued cost discipline and portfolio optimization.

Koen Berges: For the first nine months, manufacturing revenue is now at EUR 68.3 million, down nearly 3% year-on-year. But also here, excluding the impact of recent divestitures, revenue grew year to date by 4%. Adjusted EBITDA was close to breakeven at a small loss of EUR 0.3 million. Turning to slide 12, our consolidated income statement shows that higher gross profit and increased operating expenses shaped the quarterly results. The gross profit increased to EUR 39 million, with the gross margin increasing to 57.7%, up 90 basis points year-on-year. On the other hand, operating expenses increased as well by 7.8%, reflecting targeted growth investments and one-time costs in this quarter. We continue to step up investments in innovation, particularly in our medical segments, with total R&D spending at EUR 12.8 million for the quarter, representing an increase of 12% year-on-year.

Speaker #2: For the first nine months, manufacturing revenue is now at 68.3 million euro, down nearly 3% year on year. But also here excluding the impact of recent divestitures, revenue grew year to date by 4%.

Speaker #2: Adjusted EBITDA was close to break even, at small loss of 0.3 million euro. Turning to slide 12, our consolidated income statement shows that higher gross profit and increased operating expenses shaped the quarterly results.

Speaker #2: The gross profit increased to 39 million, with a gross margin increasing to 57.7%. Up 90 basis points year on year. On the other hand, operating expenses increased as well by 7.8%.

Speaker #2: But reflecting targeted growth investments, and one-time costs in this quarter. We continued to step up investments in innovation, particularly in our medical segments. We total R&D spending at 12.8 million euro for the quarter.

Speaker #2: Representing an increase of 12% year on year. Total S&M and G&A costs excluding one-time impacts increased by less than 2% year on year, and remain as such well under control.

Koen Berges: Total S&M and G&A costs, excluding one-time impacts, increased by less than 2% year-on-year and remain as such well under control. Other operating income increased to EUR 1.1 million compared to EUR 0.9 million last year. The Q3 2026 figure includes non-recurring charges of EUR 0.2 million from an inventory impairment related to the earlier transfer of the Eyewear assets. The resulting operating profit landed at EUR 1.3 million for the quarter. Net financial income was positive at EUR 0.2 million, reflecting interest income on cash balances, partly offset by interest expenses on debt. Currency fluctuations had a limited negative impact in the quarter. Income tax expense amounted to +EUR 0.1 million. Overall, this resulted in a net profit of EUR 1.4 million or EUR 0.02 per share. Finally, slide 13 highlights our balance sheet strength and cash generation.

Speaker #2: Other operating income increased to 1.1 million euro, compared to 0.9 million euro last year. The Q3 2026 figure includes non-recurring charges of 0.2 million, from an inventory impairment related to the earlier transfer of the IRA assets.

Speaker #2: The resulting operating profits landed at 1.3 million, for the quarter. Net financial income was positive at 0.2 million, reflecting interest income on cash balances partly offset by interest expenses on debts.

Speaker #2: Currency fluctuations had a limited negative impact in the quarter. Income tax expense amounted to positive 0.1 million. Overall, this resulted in a net profit of 1.4 million euro, or 2 eurocents, per share.

Speaker #2: Finally, slide 13 highlights our balance sheet strength in cash generation. We ended the quarter with cash of $153.5 million, while our gross debt increased to $71 million.

Koen Berges: We ended the quarter with cash of EUR 153.5 million, while our gross debt increased to EUR 71 million, both reflecting the final EUR 15 million drawdown under an existing committed credit facility. Net cash was EUR 82.5 million, an increase of almost EUR 12 million from the beginning of the year, driven by continued strong operating cash flow generation. During the first nine months, we invested EUR 7.5 million in our share buyback program, acquiring close to 1.5 million ADSs on Nasdaq. This represented 2.4% of our total share base as of 30 September 2026. Compared with year-end 2025, key net working capital components decreased by EUR 4.4 million, driven by lower receivables and partly offset by higher finished goods and work-in-progress inventories, while payables remained stable. Deferred income carried on the balance sheet was at EUR 59 million, including EUR 45 million related to software licenses and maintenance.

Speaker #2: Both reflecting the final 15 million euro drawing drawdown, sorry, under an existing committee committed credit facility. Net cash was 82.5 million euro, an increase of almost 12 million from the beginning of the year, driven by continued strong operating cash flow generation.

Speaker #2: During the first nine months, we invested 7.5 million euro in our share buyback program, acquiring close to 1.5 million ADSs on Nasdaq. This represented 2.4% of our total share base, as of September 30, 2026.

Speaker #2: Compared with year-end 2025, key net working capital components decreased by 4.4 million euro, driven by lower receivables and partly offset by higher finished goods and work in progress inventories, while payables remained stable.

Speaker #2: Deferred income carried on the balance sheet was at 59 million euro, including 45 million related to software licenses and maintenance. Operating cash flow in the third quarter was nearly 10 million.

Koen Berges: Operating cash flow in the third quarter was nearly EUR 10 million. Cash capital expenditures totaled EUR 2.1 million, almost all of which were recurring. While we also received EUR 4 million in government grants related to prior capital investments. The resulting cash flow after investing activities was EUR 11.4 million, including the benefits of these received grants. For the first nine months, the operating cash flow was EUR 24.7 million, with a year-to-date free cash flow of EUR 22.8 million, more than double the prior year level. In year-to-date cash expenditures on CapEx totaled EUR 5.6 million, of which EUR 1.2 million or around 20% was non-recurring. In summary, medical continued to drive growth. Manufacturing trends further improved while software remained under pressure from cautious customer spending. We once more delivered a positive quarterly net result and robust cash generation while significantly strengthened our net cash position.

Speaker #2: Euro. Cash capital expenditures totaled 2.1 million euro, almost all of which were recurring. While we also received 4 million euro in government grants, related to prior capital investments.

Speaker #2: The resulting cash flow after investing activities was €11.4 million, including the benefits of these received grants. For the first nine months, the operating cash flow was €24.7 million, with year-to-date free cash flow of €22.8 million, more than double the prior year level.

Speaker #2: And year-to-date cash expenditures on capex totaled 5.6 million, of which 1.2 million or around 20% was non-recurring. So in summary, medical continued to drive growth.

Speaker #2: Manufacturing trends further improved, while software remained under pressure from cautious customer spending. We once more delivered a positive quarterly net result and robust cash generation, while significantly strengthening our net cash position.

Koen Berges: And with that, I would like to hand the call back to Brigitte.

Speaker #2: And with that, I'd like to hand the call back to Brigitta.

Brigitte de Vet-Veithen: I will conclude my remarks with a discussion of our full year 2026 guidance. With 9 months behind us, we remain confident in delivering on our financial targets for the year. in the final quarter of 2026, we will stay focused on executing our strategy, maintaining tight cost control and strong cash generation while also continuing to increase investments in our focus areas, positioning Materialise for further profitable growth. Accordingly, we are reconfirming our full year 2026 revenue guidance of EUR 273 million to EUR 283 million, fully absorbing the unfavorable revenue impact of the recent RapidFit and Eyewear divestitures. We are also reaffirming our full year adjusted EBIT guidance of EUR 12 to EUR 14 million, the range we raised in August. This reflects the strength of our execution and our continued discipline in managing costs and capital, even as we step up our R&D investments to capture accelerating market opportunities.

Speaker #1: I'll conclude my remarks with a discussion of our full year 2026 guidance. With nine months behind us, we remain confident in delivering in our on our financial targets for the year.

Speaker #1: In the final quarter of 2026, we will stay focused on executing our strategy, maintaining tight cost control and strong cash generation, while also continuing to increase investments in our focus areas, positioning materialized for further profitable growth.

Speaker #1: Accordingly, we are reconfirming our full-year 2026 revenue guidance of $273 million to $283 million, fully absorbing the unfavorable revenue impact of the recent RapidFit and IRA divestitures.

Speaker #1: We are also reaffirming our full year adjusted EBIT guidance of 12 to 14 million euro, the range we raised in August. This reflects the strength of our execution and our continued discipline in managing costs and capital even as we step up our R&D investments to capture accelerating market opportunities.

Brigitte de Vet-Veithen: This reflects the strength of our execution and our continued discipline in managing costs and capital, even as we step up our R&D investments to capture accelerating market opportunities.

Brigitte de Vet-Veithen: This concludes our prepared remarks. Operator, we are now ready to open the call to questions.

Speaker #1: This concludes our prepared remarks. Operator, we are now ready to open the call to questions.

Operator: Thank you. As a reminder, to ask a question, press star 1 1 on your telephone and wait for your name to be announced. To remove yourself, press star 1 1 again. One moment for our first question. It comes from Troy Jensen with Cantor Fitzgerald. Please proceed.

Speaker #3: Thank you, Ines. A reminder: To ask a question, press *11 on your telephone and wait for your name to be announced. To remove yourself, press *11 again.

Speaker #3: One moment for our first question. It comes from Troy Jensen with Cantor Fitzgerald. Please proceed.

Troy Jensen: Hey. Good morning. Congrats on the great results here. I guess, for either one of you guys, to me, the comment about the serial production up 30% was great. Is there any way you guys can quantify how much of the manufacturing business is serial production now?

Speaker #4: Hey, good morning. I congrats on the great results here. I guess for either one of you guys, I guess to me, the comment about the Sierra production up 30% was great.

Speaker #4: Is there any way you guys can, like, quantify how much of the manufacturing business is serial production now?

Brigitte de Vet-Veithen: Morning, Troy. I am glad to have you on the call. We are not disclosing the exact split of our series manufacturing and prototyping activities, but we are getting into a relatively balanced situation between both segments. That gives you an indication of where more or less it lies.

Speaker #1: Good morning, Troy. I'm glad to have you on the call. So we're not disclosing the exact split of our series manufacturing and prototyping activities.

Speaker #1: But we're getting into a relatively balanced situation between both segments. That gives you an indication of, you know, we're more or less alive.

Troy Jensen: That is a great data point. Thank you. Is it mainly aerospace and defense driving the strength? I guess, given the size, it seems like there has got to be more than just that, but

Speaker #4: That is a great data point. Thank you. Is it mainly aerospace and defense kind of driving the strength? I guess given the size, it seems like there's got to be more than just that, but.

Brigitte de Vet-Veithen: In core manufacturing, which is our 3D printing part, we see aerospace and defense, in addition to semiconductor, and general industries driving this growth. But aerospace and defense is certainly a highlight in that segment. When it comes to our ACTech business, aerospace and defense is certainly a segment, but there are many more other segments also driving this growth. Building on the foundations that we had built traditionally in the automotive sector, we are still seeing a large part of our revenue coming from what we call the broader transportation sector. As you might recall

Speaker #1: Yeah. So in core manufacturing, we see so, which is our 3D printing part, we see aerospace and defense in addition to semiconductor and general industries driving this growth.

Speaker #1: But aerospace and defense is certainly a highlight in that segment. When it comes to our active business, aerospace and defense is certainly a segment, but there's a lot more many more other segments also driving this growth.

Speaker #1: Building on the foundations that we had built traditionally, in the automotive sector, we still seeing a large part of our revenue coming from what we call the broader transportation sector, as you might recall.

Brigitte de Vet-Veithen: The investments we have done in the additional capacity were to bring the traditional capabilities into larger machineries and equipment. Think boats, think any large equipment to transport. That is the transportation sector, and there is still a lot of growth coming from that side as well, in our huge and heavy parts that we produce.

Speaker #1: The investments we have done in the additional capacity were to bring those the traditional capabilities into larger machineries, and equipment, so think boats, think, you know, any large equipment to transport.

Speaker #1: So that's the transportation sector. And there's still a lot of growth coming from that side as well. In our huge and heavy parts that we produce.

Troy Jensen: All right. Makes sense. Just one other maybe follow-up here on the software side. I always thought that your software would benefit as production applications start to increase. You need fewer software packages, with prototyping, and it seems like production is increasing, but you are still kind of talking about some tough spending environments here. So, thoughts on, is it competitive? More competition in the space, or other thoughts on the stagnant software business?

Speaker #4: All right, makes sense. Oh, just one other, maybe a follow-up here on the software side. I always thought your software would benefit as production applications start to increase.

Speaker #4: You need fewer software packages, right, with a prototyping. And it seems like production is increasing, but you're still kind of talking about some tough spending environments here.

Speaker #4: So thoughts on, is it competitive more competition in the space, or other thoughts on the stagnant software business?

Brigitte de Vet-Veithen: Yeah. Great question. As Koen mentioned earlier, it is market pressures, but also extended sales cycles that weigh on our results. To give a bit more context on that, supporting our customers on the prototyping side with our traditional preprint solutions, sales cycles are relatively well-known and short. When it comes to supporting series manufacturing in the market with our CO-AM product, it is a sales process where there is a lot more involvement of teams from both sides, the customer and our sides. So the extended sales cycles that we are now feeling as we focus more and more on series production, that is one of the elements that weighs on the software revenues as well.

Speaker #1: Yeah, thanks for the question. So I think that Koen mentioned earlier, it's market pressures, but also extended sales cycles that we're on our results.

Speaker #1: And to give a bit more context on that, supporting our customers on the prototyping side, with, you know, our traditional pre-print solutions, sales cycles are relatively well, well known and short, whereas when it comes to supporting series manufacturing in the market with our COEM product, it's a process a sales process where there's a lot more involvement of teams on both sides, the customer and our sides, so the extended sales cycles that we are now feeling as we focus more and more on series production, that's one of the elements that weighs on the software revenues as well.

Troy Jensen: Okay.

Brigitte de Vet-Veithen: I hope this gives a bit more color.

Speaker #1: I hope this gives a bit more color.

Troy Jensen: That was perfect. Thank you. Congrats again, and good luck for the remainder of the year.

Speaker #4: That was perfect. Thank you. Congrats again. And good luck for the remainder of the year.

Brigitte de Vet-Veithen: Thank you, Troy. See you soon.

Speaker #1: Thank you, Troy. See you soon.

Operator: Thank you again. As a reminder, if you do have a question, press star one one to get in the queue. As I see no further questions in the queue, I will turn the call back to Brigitte de Vet for final comments.

Speaker #3: Thank you again, as a reminder, if you do have a question, press star 11 to get in the queue. As I see no further questions in the queue, I will turn the call back to Brigitte Vet for final comments.

Brigitte de Vet-Veithen: Thanks again for joining us today. We look forward to continuing our dialogue with you through investor conferences or in one-on-one virtual meetings or calls. We are also looking forward to meeting some of you in person at the upcoming Formnext event in November and the Euronext Tech Leaders Forum in Paris in December. In the meantime, please reach out if you have any questions. Thank you, and goodbye for now.

Speaker #1: Thanks again for joining us today. We look forward to continuing our dialogue with you through investor conferences, or in one-on-one virtual meetings or calls.

Speaker #1: We're also looking forward to meeting some of you in person at the upcoming forum next event in November and the Euronext Tech Leaders Forum in Paris in December.

Speaker #1: In the meantime, please reach out if you have any questions. Thank you, and goodbye for now.

Operator: Thank you so much for participating in today's conference. This concludes the conference, and you may now disconnect.