EX-99.1 2 prlb-20241101xexx991.htm EX-99.1 Document

Exhibit 99.1
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Protolabs Reports Financial Results for the Third Quarter of 2024
Total Revenue of $126 Million
GAAP Earnings Per Share of $0.29, Non-GAAP Earnings Per Share of $0.47
MINNEAPOLIS – November 1, 2024 – Proto Labs, Inc. ("Protolabs" or the "Company") (NYSE: PRLB), the world’s leading provider of digital manufacturing services, today announced financial results for the third quarter ended September 30, 2024.
Third Quarter 2024 Financial Highlights:
•Revenue was $125.6 million, a 3.9% decrease compared to record revenue of $130.7 million in the third quarter of 2023.
•Revenue generated from Protolabs Network was $25.3 million, a 11.6% increase compared to the third quarter of 2023.
•Net income was $7.2 million, or $0.29 per diluted share, compared to $8.0 million, or $0.31 per diluted share, in the third quarter of 2023.
•Non-GAAP net income was $11.8 million, or $0.47 per diluted share, compared to $13.2 million, or $0.51 per diluted share, in the third quarter of 2023. See “Non-GAAP Financial Measures” below.
•EBITDA was $17.5 million, or 13.9% of revenue. See “Non-GAAP Financial Measures” below.
•Adjusted EBITDA was $21.9 million, or 17.4% of revenue, compared to $23.9 million, or 18.3% of revenue, in the third quarter of 2023. See “Non-GAAP Financial Measures” below.

"Our disciplined approach and resilient business model drove solid financial results in the third quarter, despite continued dynamic challenges in the manufacturing sector," said Rob Bodor, President and Chief Executive Officer. "We remain committed to accelerating our growth, as highlighted by the actions we initiated at the end of the second quarter to reorganize our internal structure and better position the company for growth and value-creation over the long-term. We are committed to executing on our priorities and increasing value for our shareholders."

Dan Schumacher, Chief Financial Officer, commented: "In the third quarter, our business generated its highest quarterly operating cash flow since 2020—before the acquisition of 3D Hubs. This is a testament to the profitability of Protolabs' model against any macro backdrop, driven by our unique combined factory and network model. We will continue to invest profits to accelerate growth and create value for shareholders."

Additional Third Quarter 2024 Highlights:
•Customer contact information
◦Protolabs served 22,511 customer contacts during the quarter.
◦Revenue per customer contact decreased 1.5% year-over-year to $5,580. Year-to-date, revenue per customer contact is up 4.7%.
•Gross margin was 45.6% of revenue, compared to 45.4% of revenue in the third quarter of 2023.
•Non-GAAP gross margin was 46.2% of revenue, compared to 46.0% of revenue in the third quarter of 2023. See "Non-GAAP Financial Measures" below.
•Cash flow from operations was $24.8 million in the third quarter of 2024.
•Cash and investments balance was $117.6 million as of September 30, 2024.

Fourth Quarter 2024 Outlook

For the fourth quarter of 2024, the Company expects to generate revenue between $115 million and $123 million.



The Company expects fourth quarter 2024 diluted net income per share between $0.10 and $0.18, and non-GAAP diluted net income per share between $0.28 and $0.36. See "Non-GAAP Financial Measures" below.
Non-GAAP Financial Measures
The Company has included non-GAAP revenue growth by region and by service line that excludes the impact of changes in foreign currency exchange rates (collectively, “non-GAAP revenue growth”). Management believes these metrics, when viewed in conjunction with the comparable GAAP metrics, are useful in evaluating the underlying business trends and ongoing operating performance of the Company.
The Company has included earnings before interest, taxes, depreciation and amortization (“EBITDA”) and EBITDA, adjusted for stock-based compensation expense, unrealized (gain) loss on foreign currency and costs related to the Japan closure activities (collectively, “Adjusted EBITDA”), in this press release to provide investors with additional information regarding the Company’s financial results. The Company has also included earnings before interest, taxes, depreciation and amortization margin (“EBITDA margin”) and EBITDA margin, adjusted for stock-based compensation expense, unrealized (gain) loss on foreign currency and costs related to the Japan closure activities (collectively, “Adjusted EBITDA margin”), in this press release to provide investors with additional information regarding the Company’s financial results.
The Company has included non-GAAP gross margin, adjusted for stock-based compensation expense and amortization expense in this press release to provide investors with additional information regarding the Company’s financial results.
The Company has included non-GAAP operating margin, adjusted for stock-based compensation expense, amortization expense and costs related to the closure of Japan (collectively, “non-GAAP operating margin”), in this press release to provide investors with additional information regarding the Company’s financial results.
The Company has included non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and costs related to the closure of Japan (collectively, “non-GAAP net income”), in this press release to provide investors with additional information regarding the Company’s financial results.
The Company has provided below reconciliations of GAAP to non-GAAP net income, non-GAAP gross margin, non-GAAP operating margin, non-GAAP revenue growth by region and by service, and Adjusted EBITDA and Adjusted EBITDA margin, the most directly comparable measures calculated and presented in accordance with GAAP. These non-GAAP measures are used by the Company’s management and board of directors to understand and evaluate operating performance and trends and provide useful measures for period-to-period comparisons of the Company’s business. Accordingly, the Company believes that these non-GAAP measures provide useful information to investors and others in understanding and evaluating operating results in the same manner as our management and board of directors.
Conference Call
The Company has scheduled a conference call to discuss its third quarter 2024 financial results and fourth quarter 2024 outlook today, November 1, 2024 at 8:30 a.m. EDT. To access the call in the U.S. please dial 877-709-8150 or outside the U.S. dial 201-689-8354 at least five minutes prior to the 8:30 a.m. EDT start time. No participant code is required. A simultaneous webcast of the call and accompanying presentation will be available via the investor relations section of the Protolabs website and the following link: https://edge.media-server.com/mmc/p/b94yu8yp/. A replay will be available for 14 days following the call on the investor relations section of the Protolabs website.
About Protolabs
Protolabs is the fastest and most comprehensive digital manufacturing service in the world. Our digital factories produce low-volume parts in days while Protolabs Network unlocks advanced capabilities and volume pricing through its highly vetted manufacturing partners. The result? One manufacturing source—from prototyping to production—for product developers, engineers, and supply chain teams across the globe. See what's next at protolabs.com.
Forward-Looking Statements
Statements contained in this press release regarding matters that are not historical or current facts are “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. These statements involve known


and unknown risks, uncertainties and other factors which may cause the results of Protolabs to be materially different than those expressed or implied in such statements. Certain of these risk factors and others are described in the “Risk Factors” section within reports filed with the SEC. Other unknown or unpredictable factors also could have material adverse effects on Protolabs’ future results. The forward-looking statements included in this press release are made only as of the date hereof. Protolabs cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Protolabs expressly disclaims any intent or obligation to update any forward-looking statements to reflect subsequent events or circumstances.
Source: Proto Labs, Inc.
Investor Relations Contacts:
Protolabs
Ryan Johnsrud, 612-225-4873
Manager – Investor Relations and FP&A
ryan.johnsrud@protolabs.com

Gateway Group, Inc.
949-574-3860
PRLB@gateway-grp.com
Media Contact:
Protolabs
Brent Renneke, 763-479-7704
Marketing Communications Manager
brent.renneke@protolabs.com


Proto Labs, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
September 30,
2024		December 31,
2023
(Unaudited)
Assets
Current assets
Cash and cash equivalents$87,873 $83,790 
Short-term marketable securities12,638 19,013 
Accounts receivable, net69,464 72,848 
Inventory12,415 13,657 
Income taxes receivable665 2,228 
Prepaid expenses and other current assets10,019 9,124 
Total current assets193,074 200,660 
Property and equipment, net237,942 253,655 
Goodwill273,991 273,991 
Other intangible assets, net22,890 25,584 
Long-term marketable securities17,120 8,019 
Operating lease assets3,519 4,628 
Finance lease assets759 960 
Other long-term assets4,491 4,856 
Total assets$753,786 $772,353 
Liabilities and shareholders' equity  
Current liabilities  
Accounts payable$15,004 $15,636 
Accrued compensation17,549 15,292 
Accrued liabilities and other18,455 16,872 
Current operating lease liabilities1,450 1,585 
Current finance lease liabilities306 296 
Income taxes payable994 — 
Total current liabilities53,758 49,681 
Long-term operating lease liabilities1,979 3,008 
Long-term finance lease liabilities365 595 
Long-term deferred tax liabilities12,688 18,742 
Other long-term liabilities5,003 5,032 
Shareholders' equity679,993 695,295 
Total liabilities and shareholders' equity$753,786 $772,353 


Proto Labs, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Revenue
Injection Molding$46,831 $51,688 $148,574 $152,455 
CNC Machining53,327 52,916 154,498 149,317 
3D Printing21,437 21,622 64,300 63,952 
Sheet Metal3,743 4,291 11,218 12,478 
Other Revenue281 188 550 627 
Total Revenue125,619 130,705 379,140 378,829 
Cost of revenue68,389 71,423 207,897 212,648 
Gross profit57,230 59,282 171,243 166,181 
Operating expenses
Marketing and sales22,619 21,682 69,070 65,863 
Research and development9,772 10,105 31,600 30,647 
General and administrative16,259 17,058 49,167 49,713 
Closure of Japan business— 22 — 186 
Total operating expenses48,650 48,867 149,837 146,409 
Income from operations8,580 10,415 21,406 19,772 
Other income (loss), net1,288 320 3,548 (1,758)
Income before income taxes9,868 10,735 24,954 18,014 
Provision for income taxes2,679 2,781 7,957 7,784 
Net income$7,189 $7,954 $16,997 $10,230 
Net income per share:
Basic$0.29 $0.31 $0.67 $0.39 
Diluted$0.29 $0.31 $0.67 $0.39 
Shares used to compute net income per share:
Basic24,980,53626,023,83025,304,98526,296,304
Diluted25,022,48526,028,45625,382,28026,327,606


Proto Labs, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
20242023
Operating activities
Net income$16,997 $10,230 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization26,984 28,213 
Stock-based compensation expense12,716 11,811 
Deferred taxes(6,140)(9,197)
Interest on finance lease obligations26 859 
Loss on impairment of equipment256 — 
Loss on foreign currency translation— 3,906 
Gain on disposal of property and equipment(24)(498)
Other103 122 
Changes in operating assets and liabilities9,617 10,600 
Net cash provided by operating activities60,535 56,046 
Investing activities
Purchases of property, equipment and other capital assets(8,339)(9,935)
Proceeds from sales of property, equipment and other capital assets34 693 
Purchases of marketable securities(18,087)— 
Proceeds from call redemptions and maturities of marketable securities15,709 19,115 
Net cash (used in) provided by investing activities(10,683)9,873 
Financing activities
Proceeds from exercises of stock options and employee stock purchases2,094 1,986 
Purchases of shares withheld for tax obligations(1,920)(1,436)
Repurchases of common stock(45,958)(39,053)
Principal repayments of finance lease obligations(220)(234)
Net cash used in financing activities(46,004)(38,737)
Effect of exchange rate changes on cash and cash equivalents235 (244)
Net increase in cash and cash equivalents4,083 26,938 
Cash and cash equivalents, beginning of period83,790 56,558 
Cash and cash equivalents, end of period$87,873 $83,496 


Proto Labs, Inc.
Reconciliation of GAAP to Non-GAAP Net Income per Share
(In thousands, except share and per share amounts)
(Unaudited)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and costs related to Japan closure activities
GAAP net income$7,189 $7,954 $16,997 $10,230 
Add back:
Stock-based compensation expense4,196 4,441 12,716 11,811 
Amortization expense888 1,461 2,796 4,471 
Unrealized (gain) loss on foreign currency174 (29)323 86 
Costs related to Japan closure activities— 22 — 4,093 
Total adjustments 1
5,258 5,895 15,835 20,461 
Income tax benefits on adjustments 2
(627)(633)(1,066)(931)
Non-GAAP net income$11,820 $13,216 $31,766 $29,760 
Non-GAAP net income per share:
Basic$0.47 $0.51 $1.26 $1.13 
Diluted$0.47 $0.51 $1.25 $1.13 
Shares used to compute non-GAAP net income per share:
Basic24,980,53626,023,83025,304,98526,296,304
Diluted25,022,48526,028,45625,382,28026,327,606
1Stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and costs related to Japan closure activities were included in the following GAAP consolidated statement of operations categories:
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Cost of revenue$817 $805 $2,428 $2,416 
Marketing and sales727 961 2,378 2,508 
Research and development671 675 2,031 1,888 
General and administrative2,869 3,461 8,675 9,471 
Closure of Japan business— 22 — 186 
Total operating expenses4,267 5,119 13,084 14,053 
Other income (loss), net174 (29)323 3,992 
Total adjustments$5,258 $5,895 $15,835 $20,461 
2For the three and nine months ended September 30, 2024 and 2023, income tax effects were calculated using the effective tax rate for the relevant jurisdictions. The Company's non-GAAP tax rates differ from its GAAP tax rates due primarily to the mix of activity incurred in domestic and foreign tax jurisdictions and removing effective tax rate benefits from stock-based compensation activity in the quarter.


Proto Labs, Inc.
Reconciliation of GAAP to Non-GAAP Gross Margin
(In thousands)
(Unaudited)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Revenue$125,619 $130,705 $379,140 $378,829 
Gross profit57,230 59,282 171,243 166,181 
GAAP gross margin45.6 %45.4 %45.2 %43.9 %
Add back:  
Stock-based compensation expense474 462 1,401 1,388 
Amortization expense343 343 1,027 1,028 
Total adjustments817 805 2,428 2,416 
Non-GAAP gross profit$58,047 $60,087 $173,671 $168,597 
Non-GAAP gross margin46.2 %46.0 %45.8 %44.5 %


Proto Labs, Inc.
Reconciliation of GAAP to Non-GAAP Operating Margin
(In thousands)
(Unaudited)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Revenue$125,619 $130,705 $379,140 $378,829 
Income from operations8,580 10,415 21,406 19,772 
GAAP operating margin6.8 %8.0 %5.6 %5.2 %
Add back:
Stock-based compensation expense4,196 4,441 12,716 11,811 
Amortization expense888 1,461 2,796 4,471 
Costs related to Japan closure activities— 22 — 186 
Total adjustments5,084 5,924 15,512 16,468 
Non-GAAP income from operations$13,664 $16,339 $36,918 $36,240 
Non-GAAP operating margin10.9 %12.5 %9.7 %9.6 %


Proto Labs, Inc.
Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA
(In thousands)
(Unaudited)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Revenue$125,619 $130,705 $379,140 $378,829 
GAAP net income7,189 7,954 16,997 10,230 
GAAP net income margin5.7 %6.1 %4.5 %2.7 %
Add back:
Amortization expense$888 $1,461 $2,796 $4,471 
Depreciation expense8,021 7,869 24,188 23,742 
Interest income, net(1,287)(561)(3,548)(1,283)
Provision for income taxes2,679 2,781 7,957 7,784 
EBITDA17,490 19,504 48,390 44,944 
EBITDA Margin13.9 %14.9 %12.8 %11.9 %
Add back:
Stock-based compensation expense4,196 4,441 12,716 11,811 
Unrealized (gain) loss on foreign currency174 (29)323 86 
Costs related to Japan closure activities— 22 — 4,093 
Total adjustments4,370 4,434 13,039 15,990 
Adjusted EBITDA$21,860 $23,938 $61,429 $60,934 
Adjusted EBITDA Margin17.4 %18.3 %16.2 %16.1 %


Proto Labs, Inc.
Comparison of GAAP to Non-GAAP Revenue Growth by Region
(In thousands)
(Unaudited)
Three Months Ended
September 30, 2024		Three Months Ended
September 30, 2023
%
Change2
% Change
Organic3
GAAP
Foreign
Currency1
Non-GAAPGAAP
Revenues
United States$99,571 $— $99,571 $103,940 (4.2 %)(4.2 %)
Europe26,048 (474)25,574 26,765 (2.7 %)(4.4 %)
Total revenue$125,619 $(474)$125,145 $130,705 (3.9 %)(4.3 %)
Nine Months Ended
September 30, 2024		Nine Months Ended
September 30, 2023
%
Change2
% Change
Organic3
GAAP
Foreign
Currency1
Non-GAAPGAAP
Revenues
United States$299,593 $— $299,593 $298,007 0.5 %0.5 %
Europe79,547 (1,357)78,190 80,822 (1.6 %)(3.3 %)
Total revenue$379,140 $(1,357)$377,783 $378,829 0.1 %(0.3 %)

1Revenue for the three and nine months ended September 30, 2024 has been recalculated using 2023 foreign currency exchange rates in effect during comparable periods to provide information useful in evaluating the underlying business trends excluding the impact of changes in foreign currency exchange rates.
2This column presents the percentage change from GAAP revenue for the three and nine months ended September 30, 2023 to GAAP revenue for the three and nine months ended September 30, 2024.
3This column presents the percentage change from GAAP revenue for the three and nine months ended September 30, 2023 to non-GAAP revenue for the three and nine months ended September 30, 2024 (as recalculated using the foreign currency exchange rates in effect during the three and nine months ended September 30, 2023) in order to provide a constant-currency comparison.


Proto Labs, Inc.
Comparison of GAAP to Non-GAAP Revenue Growth by Service Line
(In thousands)
(Unaudited)
Three Months Ended
September 30, 2024		Three Months Ended
September 30, 2023
%
Change2
% Change
Organic3
GAAP
Foreign
Currency1
Non-GAAPGAAP
Revenues
Injection Molding$46,831 $(198)$46,633 $51,688 (9.4)%(9.8)%
CNC Machining53,327 (160)53,167 52,916 0.8 0.5 
3D Printing21,437 (108)21,329 21,622 (0.9)(1.4)
Sheet Metal3,743 (4)3,739 4,291 (12.8)(12.9)
Other Revenue281 (4)277 188 49.5 47.3 
Total Revenue$125,619 $(474)$125,145 $130,705 (3.9 %)(4.3 %)
Nine Months Ended
September 30, 2024		Nine Months Ended
September 30, 2023
%
Change2
% Change
Organic3
GAAP
Foreign
Currency1
Non-GAAPGAAP
Revenues
Injection Molding$148,574 $(666)$147,908 $152,455 (2.5)%(3.0)%
CNC Machining154,498 (378)154,120 149,317 3.5 3.2 
3D Printing64,300 (315)63,985 63,952 0.5 0.1 
Sheet Metal11,218 9 11,227 12,478 (10.1)(10.0)
Other Revenue550 (7)543 627 (12.3)(13.4)
Total Revenue$379,140 $(1,357)$377,783 $378,829 0.1 %(0.3 %)

1Revenue for the three and nine months ended September 30, 2024 has been recalculated using 2023 foreign currency exchange rates in effect during comparable periods to provide information useful in evaluating the underlying business trends excluding the impact of changes in foreign currency exchange rates.
2This column presents the percentage change from GAAP revenue for the three and nine months ended September 30, 2023 to GAAP revenue for the three and nine months ended September 30, 2024.
3This column presents the percentage change from GAAP revenue for the three and nine months ended September 30, 2023 to non-GAAP revenue for the three and nine months ended September 30, 2024 (as recalculated using the foreign currency exchange rates in effect during the three and nine months ended September 30, 2023) in order to provide a constant-currency comparison.


Proto Labs, Inc.
Customer Contact Information
(Unaudited)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Customer contacts22,51123,08043,67145,668
Revenue per customer contact$5,580 $5,663 $8,682 $8,295 
Proto Labs, Inc.
Reconciliation of GAAP to Non-GAAP Guidance
(In thousands, except per share and per share amounts)
(Unaudited)

Q4 2024 Outlook
LowHigh
GAAP diluted net income per share$0.10 $0.18 
Add back:
Stock-based compensation expense0.15 0.15 
Amortization expense0.03 0.03 
Unrealized (gain) loss on foreign currency0.00 0.00 
Total adjustments0.18 0.18 
Non-GAAP diluted net income per share$0.28 $0.36