Protolabs Reports Financial Results for the Fourth Quarter and Full Year 2024

MINNEAPOLIS--(BUSINESS WIRE)--Proto Labs, Inc. ("Protolabs" or the "Company") (NYSE: PRLB), the world’s leading provider of digital manufacturing services, today announced financial results for the fourth quarter and full year ended December 31, 2024. Fourth Quarter 2024 Financial Highlights: Revenue was $121.8 million, a 2.6% decrease compared to revenue of $125.0 million in the fourth quarter of 2023. Revenue fulfilled through the Protolabs Network was $26.5 million, a 17.9% increase compared to the fourth quarter of 2023. Net loss was $(0.4) million, or $(0.02) per diluted share, compared to $7.0 million, or $0.27 per diluted share, in the fourth quarter of 2023. Non-GAAP net income was $9.4 million, or $0.38 per diluted share, compared to $11.8 million, or $0.46 per diluted share, in the fourth quarter of 2023. See “Non-GAAP Financial Measures” below. Full Year 2024 Financial Highlights: Revenue was $500.9 million, a 0.6% decrease compared to revenue of $503.9 million in 2023. Revenue fulfilled through the Protolabs Network was $100.4 million, a 21.6% increase compared to 2023. Net income was $16.6 million, or $0.66 per diluted share, compared to $17.2 million, or $0.66 per diluted share, in 2023. Non-GAAP net income was $41.2 million, or $1.63 per diluted share, compared to $41.6 million, or $1.59 per diluted share, in 2023. See “Non-GAAP Financial Measures” below. Gross margin was 44.6% of revenue, compared to 44.1% of revenue in 2023. Non-GAAP gross margin was 45.2% of revenue, compared to 44.7% of revenue in 2023. See "Non-GAAP Financial Measures" below. Cash flow from operations was $77.8 million in 2024, up from $73.3 million in 2023. “2024 was a transformational year for Protolabs, and we delivered strong financial results, including expanded gross margins, increased earnings per share, and grew our industry-leading cash flow,” said Rob Bodor, President and Chief Executive Officer. “During 2024, we continued the evolution of Protolabs beyond prototyping into production, and we reorganized our internal structure, creating regional go-to-market teams and a new global operations organization. Go-to-market teams are refocused to ensure the best possible customer experience from prototype to production, while the operations organization efficiently brings our global fulfillment capabilities to every customer.” “Our transformation is gaining traction. In 2024, the number of customers using our combined Factory and Network offer grew by 50% and revenue per customer increased over 2023,” continued Bodor. “In 2025, our objective is to deliver revenue growth. We are making pointed investments to drive growth, including: additional marketing to build our brand as a production manufacturer, allocating resources to improve our sales enablement tools and processes, and continuing to expand our production manufacturing capabilities.” Dan Schumacher, Chief Financial Officer, commented: “We delivered solid fourth quarter and fiscal year 2024 cash flow and returned capital to shareholders while transforming the Company for future growth. The margin profile of Protolabs’ combined Factory and Network model is unparalleled in the digital manufacturing services space, and we will continue to invest across the business which we believe will drive growth in 2025 and sustain our industry-leading cash flow and profitability advantages.” Additional Full Year 2024 Highlights: Customer contact information Protolabs served 51,552 customer contacts during the year. Revenue per customer contact increased 3.1% year-over-year to $9,716. EBITDA was $55.7 million. See “Non-GAAP Financial Measures” below. Adjusted EBITDA was $78.3 million, or 15.6% of revenue, compared to $83.2 million, or 16.5% of revenue, in 2023. See “Non-GAAP Financial Measures” below. Cash and investments balance was $120.9 million as of December 31, 2024. First Quarter 2025 Outlook In the first quarter of 2025, the Company expects to generate revenue between $120 million and $128 million. The Company expects first quarter 2025 diluted net income per share between $0.08 and $0.16, and non-GAAP diluted net income per share between $0.26 and $0.34. See "Non-GAAP Financial Measures" below. New Stock Repurchase Program On February 4, 2025, Protolabs' board of directors approved a new $100 million stock repurchase program. Under the stock repurchase program, shares of the Company’s common stock may be repurchased periodically, including in the open market or privately negotiated transactions. The actual timing, manner, number, and value of shares repurchased under the program will be determined by management at its discretion and will depend on several factors, including the market price of Protolabs’ common stock, general market and economic conditions, applicable requirements, and other business considerations. The stock repurchase program does not obligate the Company to acquire any particular amount of shares of the Company’s common stock. The new program is open-ended and remains in effect until the total authorized amount is expended or until further action by the board of directors. 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 exit and disposal 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 exit and disposal 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 exit and disposal activities (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 exit and disposal activities (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, provide useful measures for period-to-period comparisons of the Company’s business, and in determining executive and senior management incentive compensation. 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. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. These non-GAAP financial measures exclude significant expenses and income that are required by GAAP to be recorded in our condensed consolidated financial statements and are subject to inherent limitations. Investors should review the reconciliations of non-GAAP financial measures to the comparable GAAP financial measures that are included in this press release. Conference Call The Company has scheduled a conference call to discuss its fourth quarter and full year 2024 financial results and first quarter 2025 outlook today, February 7, 2025 at 8:30 a.m. EST. 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. EST 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 manufacturing service from prototyping to production. 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 digital manufacturing source 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. Proto Labs, Inc. Condensed Consolidated Balance Sheets (In thousands) December 31, 2024 December 31, 2023 (Unaudited) Assets Current assets Cash and cash equivalents $ 89,071 $ 83,790 Short-term marketable securities 14,019 19,013 Accounts receivable, net 66,504 72,848 Inventory 12,305 13,657 Income taxes receivable 2,906 2,228 Prepaid expenses and other current assets 10,049 9,124 Total current assets 194,854 200,660 Property and equipment, net 227,263 253,655 Goodwill 273,991 273,991 Other intangible assets, net 21,422 25,584 Long-term marketable securities 17,773 8,019 Operating lease assets 2,993 4,628 Finance lease assets 692 960 Other long-term assets 4,524 4,856 Total assets $ 743,512 $ 772,353 Liabilities and shareholders' equity Current liabilities Accounts payable $ 15,504 $ 15,636 Accrued compensation 16,550 15,292 Accrued liabilities and other 19,621 16,872 Current operating lease liabilities 1,287 1,585 Current finance lease liabilities 309 296 Total current liabilities 53,271 49,681 Long-term operating lease liabilities 1,633 3,008 Long-term finance lease liabilities 287 595 Long-term deferred tax liabilities 13,565 18,742 Other long-term liabilities 4,605 5,032 Shareholders' equity 670,151 695,295 Total liabilities and shareholders' equity $ 743,512 $ 772,353 Proto Labs, Inc. Condensed Consolidated Statements of Operations (In thousands, except share and per share amounts) (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2024 2023 2024 2023 Revenue Injection Molding $ 45,641 $ 51,486 $ 194,215 $ 203,941 CNC Machining 52,389 48,905 206,887 198,222 3D Printing 19,467 20,339 83,767 84,291 Sheet Metal 4,047 4,062 15,265 16,540 Other Revenue 206 256 756 883 Total Revenue 121,750 125,048 500,890 503,877 Cost of revenue 69,793 69,236 277,690 281,884 Gross profit 51,957 55,812 223,200 221,993 Operating expenses Marketing and sales 23,003 21,825 92,073 87,688 Research and development 9,698 9,488 41,298 40,135 General and administrative 15,166 16,075 64,333 65,788 Costs related to exit and disposal activities 5,585 29 5,585 215 Total operating expenses 53,452 47,417 203,289 193,826 (Loss) income from operations (1,495 ) 8,395 19,911 28,167 Other income (loss), net 1,213 1,543 4,761 (215 ) (Loss) income before income taxes (282 ) 9,938 24,672 27,952 Provision for income taxes 122 2,948 8,079 10,732 Net (loss) income $ (404 ) $ 6,990 $ 16,593 $ 17,220 Net (loss) income per share: Basic $ (0.02 ) $ 0.27 $ 0.66 $ 0.66 Diluted $ (0.02 ) $ 0.27 $ 0.66 $ 0.66 Shares used to compute net income per share: Basic 24,474,051 25,820,802 25,096,117 26,186,533 Diluted 24,474,051 25,889,004 25,212,178 26,223,498 Proto Labs, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Twelve Months Ended December 31, 2024 2023 Operating activities Net income $ 16,593 $ 17,220 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 35,808 37,528 Stock-based compensation expense 16,999 15,989 Deferred taxes (5,153 ) (7,656 ) Interest on finance lease obligations 33 1,055 Loss on impairment of equipment 256 — Loss on foreign currency translation — 3,906 Impairments related to exit and closure of Germany and Japan businesses 2,333 — Gain on disposal of property and equipment (13 ) (498 ) Other 1 154 Changes in operating assets and liabilities 10,972 5,576 Net cash provided by operating activities 77,829 73,274 Investing activities Purchases of property, equipment and other capital assets (9,169 ) (28,116 ) Proceeds from sales of property, equipment and other capital assets 34 699 Purchases of marketable securities (25,070 ) — Purchases of other assets and investments — (1,000 ) Proceeds from sales of marketable securities 1,416 — Proceeds from call redemptions and maturities of marketable securities 19,209 23,865 Net cash used in investing activities (13,580 ) (4,552 ) Financing activities Proceeds from exercises of stock options and employee stock purchases 4,019 3,835 Purchases of shares withheld for tax obligations (1,995 ) (1,436 ) Repurchases of common stock (60,278 ) (43,951 ) Principal repayments of finance lease obligations (296 ) (306 ) Net cash used in financing activities (58,550 ) (41,858 ) Effect of exchange rate changes on cash and cash equivalents (418 ) 368 Net increase in cash and cash equivalents 5,281 27,232 Cash and cash equivalents, beginning of period 83,790 56,558 Cash and cash equivalents, end of period $ 89,071 $ 83,790 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 December 31, Twelve Months Ended December 31, 2024 2023 2024 2023 Non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and costs related to exit and disposal activities GAAP net (loss) income $ (404 ) $ 6,990 $ 16,593 $ 17,220 Add back: Stock-based compensation expense 4,283 4,178 16,999 15,989 Amortization expense 911 1,457 3,707 5,928 Unrealized (gain) loss on foreign currency (324 ) (211 ) (1 ) (125 ) Costs related to exit and disposal activities 5,585 29 5,585 4,122 Total adjustments 1 10,455 5,453 26,290 25,914 Income tax benefits on adjustments 2 (649 ) (609 ) (1,715 ) (1,540 ) Non-GAAP net income $ 9,402 $ 11,834 $ 41,168 $ 41,594 Non-GAAP net income per share: Basic $ 0.38 $ 0.46 $ 1.64 $ 1.59 Diluted $ 0.38 $ 0.46 $ 1.63 $ 1.59 Shares used to compute non-GAAP net income per share: Basic 24,474,051 25,820,802 25,096,117 26,186,533 Diluted 24,689,181 25,889,004 25,212,178 26,223,498 1 Stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and costs related to exit and disposal activities were included in the following GAAP consolidated statement of operations categories: Three Months Ended December 31, Twelve Months Ended December 31, 2024 2023 2024 2023 Cost of revenue $ 876 $ 794 $ 3,304 $ 3,210 Marketing and sales 734 916 3,112 3,424 Research and development 690 669 2,721 2,557 General and administrative 2,894 3,256 11,569 12,727 Costs related to exit and disposal activities 5,585 29 5,585 215 Total operating expenses 9,903 4,870 22,987 18,923 Other income (loss), net (324 ) (211 ) (1 ) 3,781 Total adjustments $ 10,455 $ 5,453 $ 26,290 $ 25,914 2 For the three and twelve months ended December 31, 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 December 31, Twelve Months Ended December 31, 2024 2023 2024 2023 Revenue $ 121,750 $ 125,048 $ 500,890 $ 503,877 Gross profit 51,957 55,812 223,200 221,993 GAAP gross margin 42.7 % 44.6 % 44.6 % 44.1 % Add back: Stock-based compensation expense 534 452 1,935 1,840 Amortization expense 342 342 1,369 1,370 Total adjustments 876 794 3,304 3,210 Non-GAAP gross profit $ 52,833 $ 56,606 $ 226,504 $ 225,203 Non-GAAP gross margin 43.4 % 45.3 % 45.2 % 44.7 % Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Operating Margin (In thousands) (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2024 2023 2024 2023 Revenue $ 121,750 $ 125,048 $ 500,890 $ 503,877 (Loss) income from operations (1,495 ) 8,395 19,911 28,167 GAAP operating margin (1.2 %) 6.7 % 4.0 % 5.6 % Add back: Stock-based compensation expense 4,283 4,178 16,999 15,989 Amortization expense 911 1,457 3,707 5,928 Costs related to exit and disposal activities 5,585 29 5,585 215 Total adjustments 10,779 5,664 26,291 22,132 Non-GAAP income from operations $ 9,284 $ 14,059 $ 46,202 $ 50,299 Non-GAAP operating margin 7.6 % 11.2 % 9.2 % 10.0 % Proto Labs, Inc. Reconciliation of GAAP Net (Loss) Income to EBITDA and Adjusted EBITDA (In thousands) (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2024 2023 2024 2023 Revenue $ 121,750 $ 125,048 $ 500,890 $ 503,877 GAAP net (loss) income (404 ) 6,990 16,593 17,220 GAAP net (loss) income margin (0.3 %) 5.6 % 3.3 % 3.4 % Add back: Amortization expense $ 911 $ 1,457 $ 3,707 $ 5,928 Depreciation expense 7,913 7,858 32,101 31,600 Interest income, net (1,225 ) (951 ) (4,749 ) (2,234 ) Provision for income taxes 122 2,948 8,079 10,732 EBITDA 7,317 18,302 55,731 63,246 EBITDA Margin 6.0 % 14.6 % 11.1 % 12.6 % Add back: Stock-based compensation expense 4,283 4,178 16,999 15,989 Unrealized (gain) loss on foreign currency (324 ) (211 ) (1 ) (125 ) Costs related to exit and disposal activities 5,585 29 5,585 4,122 Total adjustments 9,544 3,996 22,583 19,986 Adjusted EBITDA $ 16,861 $ 22,298 $ 78,314 $ 83,232 Adjusted EBITDA Margin 13.8 % 17.8 % 15.6 % 16.5 % Proto Labs, Inc. Comparison of GAAP to Non-GAAP Revenue Growth by Region (In thousands) (Unaudited) Three Months Ended December 31, 2024 Three Months Ended December 31, 2023 % Change2 % Change Organic3 GAAP Foreign Currency1 Non-GAAP GAAP Revenues United States $ 96,599 $ — $ 96,599 $ 98,814 (2.2 %) (2.2 %) Europe 25,151 (519 ) 24,632 26,234 (4.1 %) (6.1 %) Total revenue $ 121,750 $ (519 ) $ 121,231 $ 125,048 (2.6 %) (3.1 %) Twelve Months Ended December 31, 2024 Twelve Months Ended December 31, 2023 % Change2 % Change Organic3 GAAP Foreign Currency1 Non-GAAP GAAP Revenues United States $ 396,192 $ — $ 396,192 $ 396,821 (0.2 %) (0.2 %) Europe 104,698 (1,876 ) 102,822 107,056 (2.2 %) (4.0 %) Total revenue $ 500,890 $ (1,876 ) $ 499,014 $ 503,877 (0.6 %) (1.0 %) 1 Revenue for the three and twelve months ended December 31, 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. 2 This column presents the percentage change from GAAP revenue for the three and twelve months ended December 31, 2023 to GAAP revenue for the three and twelve months ended December 31, 2024. 3 This column presents the percentage change from GAAP revenue for the three and twelve months ended December 31, 2023 to non-GAAP revenue for the three and twelve months ended December 31, 2024 (as recalculated using the foreign currency exchange rates in effect during the three and twelve months ended December 31, 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 December 31, 2024 Three Months Ended December 31, 2023 % Change2 % Change Organic3 GAAP Foreign Currency1 Non-GAAP GAAP Revenues Injection Molding $ 45,641 $ (265 ) $ 45,376 $ 51,486 (11.4 )% (11.9 )% CNC Machining 52,389 (140 ) 52,249 48,905 7.1 6.8 3D Printing 19,467 (112 ) 19,355 20,339 (4.3 ) (4.8 ) Sheet Metal 4,047 (1 ) 4,046 4,062 (0.4 ) (0.4 ) Other Revenue 206 (1 ) 205 256 (19.5 ) (19.9 ) Total Revenue $ 121,750 $ (519 ) $ 121,231 $ 125,048 (2.6 %) (3.1 %) Twelve Months Ended December 31, 2024 Twelve Months Ended December 31, 2023 % Change2 % Change Organic3 GAAP Foreign Currency1 Non-GAAP GAAP Revenues Injection Molding $ 194,215 $ (931 ) $ 193,284 $ 203,941 (4.8 )% (5.2 )% CNC Machining 206,887 (518 ) 206,369 198,222 4.4 4.1 3D Printing 83,767 (427 ) 83,340 84,291 (0.6 ) (1.1 ) Sheet Metal 15,265 8 15,273 16,540 (7.7 ) (7.7 ) Other Revenue 756 (8 ) 748 883 (14.4 ) (15.3 ) Total Revenue $ 500,890 $ (1,876 ) $ 499,014 $ 503,877 (0.6 %) (1.0 %) 1 Revenue for the three and twelve months ended December 31, 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. 2 This column presents the percentage change from GAAP revenue for the three and twelve months ended December 31, 2023 to GAAP revenue for the three and twelve months ended December 31, 2024. 3 This column presents the percentage change from GAAP revenue for the three and twelve months ended December 31, 2023 to non-GAAP revenue for the three and twelve months ended December 31, 2024 (as recalculated using the foreign currency exchange rates in effect during the three and twelve months ended December 31, 2023) in order to provide a constant-currency comparison. Proto Labs, Inc. Customer Contact Information (In thousands, except customer contacts and per customer contact amounts) (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2024 2023 2024 2023 Revenue $ 121,750 $ 125,048 $ 500,890 $ 503,877 Customer contacts 21,558 21,879 51,552 53,464 Revenue per customer contact1 $ 5,648 $ 5,715 $ 9,716 $ 9,425 1 Revenue per customer contact is calculated using the revenue recognized during the respective period divided by the actual number of customer contacts served during the same period. Customer contacts are product developers, engineers, procurement and supply chain professionals and other individuals who place an order, and that order is shipped and invoiced during the period. The Company believes revenue per customer contact is useful to investors in evaluating the underlying business trends and ongoing operating performance of the Company. Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Guidance (In thousands, except per share and per share amounts) (Unaudited) Q1 2025 Outlook Low High GAAP diluted net income per share $ 0.08 $ 0.16 Add back: Stock-based compensation expense 0.15 0.15 Amortization expense 0.03 0.03 Unrealized (gain) loss on foreign currency 0.00 0.00 Total adjustments 0.18 0.18 Non-GAAP diluted net income per share $ 0.26 $ 0.34

Protolabs Reports Financial Results for the Fourth Quarter and Full Year 2024

FAQ

Why Bullish?

How important is it?

Why Long Term?

Related Companies

Related News