Troy Jensen: All right. Understood, guys. Good luck, Johan.
Fried Vancraen: Yes.
Operator: Our next question comes from Noelle Dilts with Stifel. Your line is open.
Noelle Dilts: Hi, guys. Thanks for taking my question. First, I was just wondering if you — hi, good morning. I was just hoping you could maybe walk through just how you’re thinking — I know you talked about this directionally a bit. But maybe if you could just discuss in a little bit more detail how you’re thinking about segment margins as we go into ’23. I guess, specifically on software, I just want to make sure we’re all thinking about how to think about where margins are going in ’23. And then also how you’re thinking about the longer-term cadence there? Thank you.
Fried Vancraen: Well, we had — I mean the margins of our Software segment, obviously, were very bad in 2022. Again, because of the significant investment we did there, including the acquisitions of Identify3D and Link3D, we do expect these margins to become positive again in 2023, yes? And so there will be good growth of the margins within software, albeit that they will not come back to the 35% plus that we’ve seen in ’21? However, in the longer term, 24, 25, we do expect to return back to the, let’s say software margins we had in the past. Does the delay effect that we have effectively from the switch of perpetual licenses to global subscription-based agreements. In the first place, — the price — the individual prices are not as high as when you sell perpetual licenses.
And then the second item is the technical one is where you cannot have the full revenue recognition as from the beginning. But that’s one that it starts and it’s growing. We have a kind of a snowball effect that we count on in the years to come, but not yet in ’23 to the same extent.
Noelle Dilts: Okay. Sorry
Peter Leys: Yes. Well, just the margin profile of the other two segments, Medical has a very solid margin, which from relatively speaking, did not increase much in 2022 compared to 2021. We see some potential to grow the margin there in 2023 for Medical and also for Manufacturing, we expect that the margin will grow to a double-digit level.
Noelle Dilts: Okay. Thank you. That’s very helpful. And then I was just hoping you could expand a little bit just on the level of engagement and interest that you’re seeing with the CO-AM platform, just how that sort of trended relative to your expectations? And how you’re seeing that sort of as you look out to next year translates into just more sales and growth. Thank you.
Fried Vancraen: Well, we’ve really seeing CO-AM enthusiastically accepted in the market. And yes, in the middle of the year, we could only talk about the, let’s say, yes, opinion we heard of several customers. But by the end of the year, we could see real orders and yes, we recently announced that QuickParts, one of the biggest AM service providers in the world has fully switched to CO-AM in all of its activities. And that’s demonstrating that CO-AM is really a tool that is enabling the biggest players to scale. Secondly, I’m very proud on the achievement of our team that in less than a year’s time, they could start the implementation of the product in such a big organization and also internally at Materialise after 1 year, we have now started to run several of our activities on the full CO-AM platform.
Noelle Dilts: Very helpful. Thank you.
Operator: Our next question comes from Alexander Craeymeersch with Kepler. Your line is open.
Alexander Craeymeersch: Yes, hello. Do you hear me?
Peter Leys: Alexander, we hear you perfectly.
