Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Protolabs Reports Financial Results for the Fourth Quarter and Full Year 2023 By: Proto Labs, Inc. via Business Wire February 09, 2024 at 06:00 AM EST Revenue of $125 Million in the Fourth Quarter of 2023 Record Annual Revenue of $504 Million in 2023 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, 2023. Fourth Quarter 2023 Financial Highlights: Revenue was $125.0 million, an 8.2% increase compared to the fourth quarter of 2022. Revenue generated from Protolabs Network was $22.5 million, a 52.0% increase compared to the fourth quarter of 2022. Net income was $7.0 million, or $0.27 per diluted share, compared to a net loss of $4.24 per diluted share in the fourth quarter of 2022. Non-GAAP net income was $11.8 million, or $0.46 per diluted share, compared to $7.0 million, or $0.26 per diluted share, in the fourth quarter of 2022. See “Non-GAAP Financial Measures” below. EBITDA was $18.3 million, or 14.6% of revenue. See “Non-GAAP Financial Measures” below. Adjusted EBITDA was $22.3 million, or 17.8% of revenue, compared to $14.5 million, or 12.5% of revenue, in the fourth quarter of 2022. See “Non-GAAP Financial Measures” below. Full Year 2023 Financial Highlights: Revenue was a record $503.9 million, representing a 3.2% increase over 2022. Revenue generated from Protolabs Network was $82.6 million in 2023, representing growth of 70.4% over the prior year. Net income was $17.2 million, or $0.66 per diluted share, compared to a net loss of $3.77 per diluted share in 2022. Non-GAAP net income was $41.6 million, or $1.59 per diluted share, compared to $41.1 million, or $1.50 per diluted share, in 2022. See “Non-GAAP Financial Measures” below. EBITDA was $63.2 million, or 12.6% of revenue, in 2023. See “Non-GAAP Financial Measures” below. Adjusted EBITDA was $83.2 million, or 16.5% of revenue, in 2023. See “Non-GAAP Financial Measures” below. Cash flow from operations was $73.3 million in 2023, compared to $62.1 million in 2022. The Company repurchased $44.0 million in common shares during the year. Protolabs served 53,464 customer contacts during the year. "We capped off a record year with strong fourth quarter results, driven by consistent execution against our priorities,” said Rob Bodor, President and Chief Executive Officer. “For the full year, we generated revenue above $500 million for the first time in our 25-year history, while delivering improved earnings, robust cash flow, and substantial capital returned to shareholders. We are encouraged by our strong finish to 2023, and we believe we have the right strategy and priorities in place to continue our momentum throughout 2024. We remain focused on driving positive global impact, maintaining our industry-leading financial model, and increasing value for our shareholders." Dan Schumacher, Chief Financial Officer, commented, "Along with record revenue in 2023, we significantly improved profitability in both the digital factory and the digital network. We generated an industry-leading $73 million in cash from operations, and we paid 97% of our free cash flows to shareholders through share repurchases." First Quarter 2024 Outlook The Company will continue to provide financial guidance on a quarterly basis due to the quick-turn nature of the business and continued uncertainty in global manufacturing. For the first quarter of 2024, the Company expects to generate revenue between $120 million and $128 million. This guidance reflects a softer start to 2024, due to December 2023 and early January 2024 order levels being lower than historical periods. However, recent performance has been more in line with historical trends, and our guidance assumes that will continue through the end of March. The Company expects first quarter 2024 diluted net income per share between $0.09 and $0.17, and non-GAAP diluted net income per share between $0.26 and $0.34. 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, goodwill impairment 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, goodwill impairment 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, goodwill impairment 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 gross margin excluding Japan, 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 excluding Japan, adjusted for stock-based compensation expense, amortization expense, goodwill impairment and costs related to the Japan closure activities (collectively, “non-GAAP operating margin excluding Japan”), 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, goodwill impairment 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 gross margin excluding Japan, non-GAAP operating margin, non-GAAP operating margin excluding Japan, 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 fourth quarter and full year 2023 financial results and first quarter 2024 outlook today, February 9, 2024 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/vyeizwtx/. 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. Proto Labs, Inc. Condensed Consolidated Balance Sheets (In thousands) December 31, 2023 December 31, 2022 (Unaudited) Assets Current assets Cash and cash equivalents $ 83,790 $ 56,558 Short-term marketable securities 19,013 23,568 Accounts receivable, net 72,848 76,225 Inventory 13,657 13,578 Income taxes receivable 2,228 4,042 Prepaid expenses and other current assets 9,124 12,597 Total current assets 200,660 186,568 Property and equipment, net 253,655 257,785 Goodwill 273,991 273,991 Other intangible assets, net 25,584 31,250 Long-term marketable securities 8,019 26,419 Operating lease assets 4,628 3,844 Finance lease assets 960 17,532 Other long-term assets 4,856 4,779 Total assets $ 772,353 $ 802,168 Liabilities and shareholders' equity Current liabilities Accounts payable $ 15,636 $ 17,356 Accrued compensation 15,292 12,743 Accrued liabilities and other 16,872 22,384 Current operating lease liabilities 1,585 1,561 Current finance lease liabilities 296 17,537 Total current liabilities 49,681 71,581 Long-term operating lease liabilities 3,008 2,255 Long-term finance lease liabilities 595 — Long-term deferred tax liabilities 18,742 26,322 Other long-term liabilities 5,032 4,362 Shareholders' equity 695,295 697,648 Total liabilities and shareholders' equity $ 772,353 $ 802,168 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, 2023 2022 2023 2022 Revenue Injection Molding $ 51,486 $ 44,885 $ 203,941 $ 200,578 CNC Machining 48,905 46,563 198,222 188,372 3D Printing 20,339 19,530 84,291 78,988 Sheet Metal 4,062 4,432 16,540 19,498 Other Revenue 256 197 883 962 Total Revenue 125,048 115,607 503,877 488,398 Cost of revenue 69,236 67,000 281,884 272,933 Gross profit 55,812 48,607 221,993 215,465 Operating expenses Marketing and sales 21,825 20,517 87,688 82,752 Research and development 9,488 8,906 40,135 38,222 General and administrative 16,075 17,774 65,788 67,544 Goodwill impairment — 118,008 — 118,008 Closure of Japan business 29 534 215 6,922 Total operating expenses 47,417 165,739 193,826 313,448 Income (loss) from operations 8,395 (117,132 ) 28,167 (97,983 ) Other income (loss), net 1,543 429 (215 ) 106 Income (loss) before income taxes 9,938 (116,703 ) 27,952 (97,877 ) Provision for income taxes 2,948 (1,638 ) 10,732 5,585 Net income (loss) $ 6,990 $ (115,065 ) $ 17,220 $ (103,462 ) Net income (loss) per share: Basic $ 0.27 $ (4.24 ) $ 0.66 $ (3.77 ) Diluted $ 0.27 $ (4.24 ) $ 0.66 $ (3.77 ) Shares used to compute net income (loss) per share: Basic 25,820,802 27,136,821 26,186,533 27,409,838 Diluted 25,889,004 27,136,821 26,223,498 27,409,838 Proto Labs, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Twelve Months Ended December 31, 2023 2022 Operating activities Net income (loss) $ 17,220 $ (103,462 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 37,528 39,425 Stock-based compensation expense 15,989 17,545 Deferred taxes (7,656 ) (9,499 ) Interest on finance lease obligations 1,055 — Loss on impairment of goodwill — 118,008 Loss on foreign currency translation 3,906 — Impairments related to closure of Japan business — 2,842 Gain on disposal of property and equipment (498 ) (1,211 ) Other 154 35 Changes in operating assets and liabilities 5,576 (1,604 ) Net cash provided by operating activities 73,274 62,079 Investing activities Purchases of property, equipment and other capital assets (28,116 ) (21,686 ) Proceeds from sales of property, equipment and other capital assets 699 4,108 Purchases of marketable securities — (46,872 ) Purchases of other assets and investments (1,000 ) — Proceeds from sales of marketable securities — 1,998 Proceeds from call redemptions and maturities of marketable securities 23,865 19,360 Net cash used in investing activities (4,552 ) (43,092 ) Financing activities Proceeds from exercises of stock options 3,835 3,950 Purchases of shares withheld for tax obligations (1,436 ) (1,682 ) Repurchases of common stock (43,951 ) (29,659 ) Principal repayments of finance lease obligations (306 ) (531 ) Net cash used in financing activities (41,858 ) (27,922 ) Effect of exchange rate changes on cash and cash equivalents 368 (436 ) Net increase (decrease) in cash and cash equivalents 27,232 (9,371 ) Cash and cash equivalents, beginning of period 56,558 65,929 Cash and cash equivalents, end of period $ 83,790 $ 56,558 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, 2023 2022 2023 2022 Non-GAAP net income (loss), adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency, goodwill impairment and costs related to Japan closure activities GAAP net income (loss) $ 6,990 $ (115,065 ) $ 17,220 $ (103,462 ) Add back: Stock-based compensation expense 4,178 4,210 15,989 17,545 Amortization expense 1,457 1,514 5,928 6,096 Unrealized (gain) loss on foreign currency (211 ) (490 ) (125 ) 252 Goodwill impairment — 118,008 — 118,008 Costs related to Japan closure activities 29 534 4,122 6,922 Total adjustments 1 5,453 123,776 25,914 148,823 Income tax benefits on adjustments 2 (609 ) (1,753 ) (1,540 ) (4,271 ) Non-GAAP net income $ 11,834 $ 6,958 $ 41,594 $ 41,090 Non-GAAP net income per share: Basic $ 0.46 $ 0.26 $ 1.59 $ 1.50 Diluted $ 0.46 $ 0.26 $ 1.59 $ 1.50 Shares used to compute non-GAAP net income per share: Basic 25,820,802 27,136,821 26,186,533 27,409,838 Diluted 25,889,004 27,151,991 26,223,498 27,433,257 1 Stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency, goodwill impairment and costs related to Japan closure activities were included in the following GAAP consolidated statement of operations categories: Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Cost of revenue $ 794 $ 840 $ 3,210 $ 3,541 Marketing and sales 916 816 3,424 3,295 Research and development 669 488 2,557 2,190 General and administrative 3,256 3,580 12,727 14,615 Goodwill impairment - 118,008 - 118,008 Closure of Japan business 29 534 215 6,922 Total operating expenses 4,870 123,426 18,923 145,030 Other income (loss), net (211 ) (490 ) 3,781 252 Total adjustments $ 5,453 $ 123,776 $ 25,914 $ 148,823 2 For the three and twelve months ended December 31, 2023 and 2022, 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, 2023 2022 2023 2022 Revenue $ 125,048 $ 115,607 $ 503,877 $ 488,398 Gross profit 55,812 48,607 221,993 215,465 GAAP gross margin 44.6 % 42.0 % 44.1 % 44.1 % Add back: Stock-based compensation expense 452 498 1,840 2,172 Amortization expense 342 342 1,370 1,369 Total adjustments 794 840 3,210 3,541 Non-GAAP gross profit $ 56,606 $ 49,447 $ 225,203 $ 219,006 Non-GAAP gross margin 45.3 % 42.8 % 44.7 % 44.8 % Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Gross Margin Excluding Japan (In thousands) (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Revenue $ 125,048 $ 115,607 $ 503,877 $ 488,398 Revenue excluding Japan $ 125,048 $ 115,607 $ 503,877 $ 480,169 Gross profit 55,812 48,607 221,993 215,465 GAAP gross margin 44.6 % 42.0 % 44.1 % 44.1 % Less: Japan gross profit — (93 ) — 3,057 Gross Profit excluding Japan 55,812 48,700 221,993 212,408 GAAP gross margin excluding Japan 44.6 % 42.1 % 44.1 % 44.2 % Add back: Stock-based compensation expense 452 498 1,840 2,172 Amortization expense 342 342 1,370 1,369 Less: Japan stock-based compensation expense — — — 61 Japan amortization expense — — — — Total adjustments 794 840 3,210 3,480 Non-GAAP gross profit excluding Japan $ 56,606 $ 49,540 $ 225,203 $ 215,888 Non-GAAP gross margin excluding Japan 45.3 % 42.9 % 44.7 % 45.0 % Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Operating Margin (In thousands) (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Revenue $ 125,048 $ 115,607 $ 503,877 $ 488,398 Income (loss) from operations 8,395 (117,132 ) 28,167 (97,983 ) GAAP operating margin 6.7 % (101.3 %) 5.6 % (20.1 %) Add back: Stock-based compensation expense 4,178 4,210 15,989 17,545 Amortization expense 1,457 1,514 5,928 6,096 Goodwill impairment — 118,008 — 118,008 Costs related to Japan closure activities 29 534 215 6,922 Total adjustments 5,664 124,266 22,132 148,571 Non-GAAP income from operations $ 14,059 $ 7,134 $ 50,299 $ 50,588 Non-GAAP operating margin 11.2 % 6.2 % 10.0 % 10.4 % Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Operating Margin Excluding Japan (In thousands) (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Revenue $ 125,048 $ 115,607 $ 503,877 $ 488,398 Revenue excluding Japan $ 125,048 $ 115,607 $ 503,877 $ 480,169 Income (loss) from operations 8,395 (117,132 ) 28,167 (97,983 ) GAAP operating margin 6.7 % (101.3 %) 5.6 % (20.1 %) Less: Japan (loss) income from operations (18 ) (594 ) (499 ) (1,424 ) Income from operations excluding Japan 8,413 (116,538 ) 28,666 (96,559 ) GAAP operating margin excluding Japan 6.7 % (100.8 %) 5.7 % (20.1 %) Add back: Stock-based compensation expense 4,178 4,210 15,989 17,545 Amortization expense 1,457 1,514 5,928 6,096 Goodwill impairment — 118,008 — 118,008 Costs related to Japan closure activities 29 534 215 6,922 Less: Japan stock-based compensation expense — 20 17 406 Japan amortization expense — — — — Total adjustments 5,664 124,246 22,115 148,165 Non-GAAP income from operations excluding Japan $ 14,077 $ 7,708 $ 50,781 $ 51,606 Non-GAAP operating margin excluding Japan 11.3 % 6.7 % 10.1 % 10.7 % Proto Labs, Inc. Reconciliation of GAAP Net Income (Loss) to EBITDA and Adjusted EBITDA (In thousands) (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Revenue $ 125,048 $ 115,607 $ 503,877 $ 488,398 GAAP net income (loss) 6,990 (115,065 ) 17,220 (103,462 ) GAAP net income margin 5.6 % (99.5 %) 3.4 % (21.2 %) Add back: Amortization expense $ 1,457 $ 1,514 $ 5,928 $ 6,096 Depreciation expense 7,858 7,930 31,600 33,329 Interest income, net (951 ) (509 ) (2,234 ) (968 ) Provision for income taxes 2,948 (1,638 ) 10,732 5,585 EBITDA 18,302 (107,768 ) 63,246 (59,420 ) EBITDA Margin 14.6 % (93.2 %) 12.6 % (12.2 %) Add back: Stock-based compensation expense 4,178 4,210 15,989 17,545 Unrealized (gain) loss on foreign currency (211 ) (490 ) (125 ) 252 Goodwill impairment — 118,008 — 118,008 Costs related to Japan closure activities 29 534 4,122 6,922 Total adjustments 3,996 122,262 19,986 142,727 Adjusted EBITDA $ 22,298 $ 14,494 $ 83,232 $ 83,307 Adjusted EBITDA Margin 17.8 % 12.5 % 16.5 % 17.1 % Proto Labs, Inc. Comparison of GAAP to Non-GAAP Revenue Growth by Region (In thousands) (Unaudited) Three Months Ended December 31, 2023 Three Months Ended December 31, 2022 % Change2 % Change Organic3 GAAP Foreign Currency1 Non-GAAP GAAP Revenues United States $ 98,814 $ — $ 98,814 $ 92,278 7.1 % 7.1 % Europe 26,234 (1,144 ) 25,090 23,329 12.5 % 7.5 % Total revenue $ 125,048 $ (1,144 ) $ 123,904 $ 115,607 8.2 % 7.2 % Twelve Months Ended December 31, 2023 Twelve Months Ended December 31, 2022 % Change2 % Change Organic3 GAAP Foreign Currency1 Non-GAAP GAAP Revenues United States $ 396,821 $ — $ 396,821 $ 387,399 2.4 % 2.4 % Europe 107,056 167 107,223 92,770 15.4 % 15.6 % Japan — — — 8,229 (100.0 %) (100.0 %) Total revenue $ 503,877 $ 167 $ 504,044 $ 488,398 3.2 % 3.2 % 1 Revenue for the three and twelve months ended December 31, 2023 has been recalculated using 2022 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, 2022 to GAAP revenue for the twelve months ended months ended December 31, 2023. 3 This column presents the percentage change from GAAP revenue for the three and twelve months ended December 31, 2022 to non-GAAP revenue for the three and twelve months ended December 31, 2023 (as recalculated using the foreign currency exchange rates in effect during the three and twelve months ended December 31, 2022) 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, 2023 Three Months Ended December 31, 2022 % Change2 % Change Organic3 GAAP Foreign Currency1 Non-GAAP GAAP Revenues Injection Molding $ 51,486 $ (453 ) $ 51,033 $ 44,885 14.7 % 13.7 % CNC Machining 48,905 (395 ) 48,510 46,563 5.0 4.2 3D Printing 20,339 (268 ) 20,071 19,530 4.1 2.8 Sheet Metal 4,062 (1 ) 4,061 4,432 (8.3 ) (8.4 ) Other Revenue 256 (27 ) 229 197 29.9 16.2 Total Revenue $ 125,048 $ (1,144 ) $ 123,904 $ 115,607 8.2 % 7.2 % Twelve Months Ended December 31, 2023 Twelve Months Ended December 31, 2022 % Change2 % Change Organic3 GAAP Foreign Currency1 Non-GAAP GAAP Revenues Injection Molding $ 203,941 $ 328 $ 204,269 $ 200,578 1.7 % 1.8 % CNC Machining 198,222 (243 ) 197,979 188,372 5.2 5.1 3D Printing 84,291 9 84,300 78,988 6.7 6.7 Sheet Metal 16,540 (10 ) 16,530 19,498 (15.2 ) (15.2 ) Other Revenue 883 83 966 962 (8.2 ) 0.4 Total Revenue $ 503,877 $ 167 $ 504,044 $ 488,398 3.2 % 3.2 % 1 Revenue for the three and twelve months ended December 31, 2023 has been recalculated using 2022 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, 2022 to GAAP revenue for the three and twelve months ended December 31, 2023. 3 This column presents the percentage change from GAAP revenue for the three and twelve months ended December 31, 2022 to non-GAAP revenue for the three and twelve months ended December 31, 2023 (as recalculated using the foreign currency exchange rates in effect during the three and twelve months ended December 31, 2022) in order to provide a constant-currency comparison. Proto Labs, Inc. Customer Contact Information (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Customer contacts 21,879 22,205 53,464 56,333 Revenue per customer contact $ 5,715 $ 5,206 $ 9,425 $ 8,670 Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Guidance (In thousands, except per share and per share amounts) (Unaudited) Q1 2024 Outlook Low High GAAP diluted net income per share $ 0.09 0.17 Add back: Stock-based compensation expense 0.14 0.14 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 View source version on businesswire.com: https://www.businesswire.com/news/home/20240209777634/en/Contacts 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 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Protolabs Reports Financial Results for the Fourth Quarter and Full Year 2023 By: Proto Labs, Inc. via Business Wire February 09, 2024 at 06:00 AM EST Revenue of $125 Million in the Fourth Quarter of 2023 Record Annual Revenue of $504 Million in 2023 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, 2023. Fourth Quarter 2023 Financial Highlights: Revenue was $125.0 million, an 8.2% increase compared to the fourth quarter of 2022. Revenue generated from Protolabs Network was $22.5 million, a 52.0% increase compared to the fourth quarter of 2022. Net income was $7.0 million, or $0.27 per diluted share, compared to a net loss of $4.24 per diluted share in the fourth quarter of 2022. Non-GAAP net income was $11.8 million, or $0.46 per diluted share, compared to $7.0 million, or $0.26 per diluted share, in the fourth quarter of 2022. See “Non-GAAP Financial Measures” below. EBITDA was $18.3 million, or 14.6% of revenue. See “Non-GAAP Financial Measures” below. Adjusted EBITDA was $22.3 million, or 17.8% of revenue, compared to $14.5 million, or 12.5% of revenue, in the fourth quarter of 2022. See “Non-GAAP Financial Measures” below. Full Year 2023 Financial Highlights: Revenue was a record $503.9 million, representing a 3.2% increase over 2022. Revenue generated from Protolabs Network was $82.6 million in 2023, representing growth of 70.4% over the prior year. Net income was $17.2 million, or $0.66 per diluted share, compared to a net loss of $3.77 per diluted share in 2022. Non-GAAP net income was $41.6 million, or $1.59 per diluted share, compared to $41.1 million, or $1.50 per diluted share, in 2022. See “Non-GAAP Financial Measures” below. EBITDA was $63.2 million, or 12.6% of revenue, in 2023. See “Non-GAAP Financial Measures” below. Adjusted EBITDA was $83.2 million, or 16.5% of revenue, in 2023. See “Non-GAAP Financial Measures” below. Cash flow from operations was $73.3 million in 2023, compared to $62.1 million in 2022. The Company repurchased $44.0 million in common shares during the year. Protolabs served 53,464 customer contacts during the year. "We capped off a record year with strong fourth quarter results, driven by consistent execution against our priorities,” said Rob Bodor, President and Chief Executive Officer. “For the full year, we generated revenue above $500 million for the first time in our 25-year history, while delivering improved earnings, robust cash flow, and substantial capital returned to shareholders. We are encouraged by our strong finish to 2023, and we believe we have the right strategy and priorities in place to continue our momentum throughout 2024. We remain focused on driving positive global impact, maintaining our industry-leading financial model, and increasing value for our shareholders." Dan Schumacher, Chief Financial Officer, commented, "Along with record revenue in 2023, we significantly improved profitability in both the digital factory and the digital network. We generated an industry-leading $73 million in cash from operations, and we paid 97% of our free cash flows to shareholders through share repurchases." First Quarter 2024 Outlook The Company will continue to provide financial guidance on a quarterly basis due to the quick-turn nature of the business and continued uncertainty in global manufacturing. For the first quarter of 2024, the Company expects to generate revenue between $120 million and $128 million. This guidance reflects a softer start to 2024, due to December 2023 and early January 2024 order levels being lower than historical periods. However, recent performance has been more in line with historical trends, and our guidance assumes that will continue through the end of March. The Company expects first quarter 2024 diluted net income per share between $0.09 and $0.17, and non-GAAP diluted net income per share between $0.26 and $0.34. 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, goodwill impairment 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, goodwill impairment 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, goodwill impairment 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 gross margin excluding Japan, 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 excluding Japan, adjusted for stock-based compensation expense, amortization expense, goodwill impairment and costs related to the Japan closure activities (collectively, “non-GAAP operating margin excluding Japan”), 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, goodwill impairment 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 gross margin excluding Japan, non-GAAP operating margin, non-GAAP operating margin excluding Japan, 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 fourth quarter and full year 2023 financial results and first quarter 2024 outlook today, February 9, 2024 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/vyeizwtx/. 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. Proto Labs, Inc. Condensed Consolidated Balance Sheets (In thousands) December 31, 2023 December 31, 2022 (Unaudited) Assets Current assets Cash and cash equivalents $ 83,790 $ 56,558 Short-term marketable securities 19,013 23,568 Accounts receivable, net 72,848 76,225 Inventory 13,657 13,578 Income taxes receivable 2,228 4,042 Prepaid expenses and other current assets 9,124 12,597 Total current assets 200,660 186,568 Property and equipment, net 253,655 257,785 Goodwill 273,991 273,991 Other intangible assets, net 25,584 31,250 Long-term marketable securities 8,019 26,419 Operating lease assets 4,628 3,844 Finance lease assets 960 17,532 Other long-term assets 4,856 4,779 Total assets $ 772,353 $ 802,168 Liabilities and shareholders' equity Current liabilities Accounts payable $ 15,636 $ 17,356 Accrued compensation 15,292 12,743 Accrued liabilities and other 16,872 22,384 Current operating lease liabilities 1,585 1,561 Current finance lease liabilities 296 17,537 Total current liabilities 49,681 71,581 Long-term operating lease liabilities 3,008 2,255 Long-term finance lease liabilities 595 — Long-term deferred tax liabilities 18,742 26,322 Other long-term liabilities 5,032 4,362 Shareholders' equity 695,295 697,648 Total liabilities and shareholders' equity $ 772,353 $ 802,168 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, 2023 2022 2023 2022 Revenue Injection Molding $ 51,486 $ 44,885 $ 203,941 $ 200,578 CNC Machining 48,905 46,563 198,222 188,372 3D Printing 20,339 19,530 84,291 78,988 Sheet Metal 4,062 4,432 16,540 19,498 Other Revenue 256 197 883 962 Total Revenue 125,048 115,607 503,877 488,398 Cost of revenue 69,236 67,000 281,884 272,933 Gross profit 55,812 48,607 221,993 215,465 Operating expenses Marketing and sales 21,825 20,517 87,688 82,752 Research and development 9,488 8,906 40,135 38,222 General and administrative 16,075 17,774 65,788 67,544 Goodwill impairment — 118,008 — 118,008 Closure of Japan business 29 534 215 6,922 Total operating expenses 47,417 165,739 193,826 313,448 Income (loss) from operations 8,395 (117,132 ) 28,167 (97,983 ) Other income (loss), net 1,543 429 (215 ) 106 Income (loss) before income taxes 9,938 (116,703 ) 27,952 (97,877 ) Provision for income taxes 2,948 (1,638 ) 10,732 5,585 Net income (loss) $ 6,990 $ (115,065 ) $ 17,220 $ (103,462 ) Net income (loss) per share: Basic $ 0.27 $ (4.24 ) $ 0.66 $ (3.77 ) Diluted $ 0.27 $ (4.24 ) $ 0.66 $ (3.77 ) Shares used to compute net income (loss) per share: Basic 25,820,802 27,136,821 26,186,533 27,409,838 Diluted 25,889,004 27,136,821 26,223,498 27,409,838 Proto Labs, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Twelve Months Ended December 31, 2023 2022 Operating activities Net income (loss) $ 17,220 $ (103,462 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 37,528 39,425 Stock-based compensation expense 15,989 17,545 Deferred taxes (7,656 ) (9,499 ) Interest on finance lease obligations 1,055 — Loss on impairment of goodwill — 118,008 Loss on foreign currency translation 3,906 — Impairments related to closure of Japan business — 2,842 Gain on disposal of property and equipment (498 ) (1,211 ) Other 154 35 Changes in operating assets and liabilities 5,576 (1,604 ) Net cash provided by operating activities 73,274 62,079 Investing activities Purchases of property, equipment and other capital assets (28,116 ) (21,686 ) Proceeds from sales of property, equipment and other capital assets 699 4,108 Purchases of marketable securities — (46,872 ) Purchases of other assets and investments (1,000 ) — Proceeds from sales of marketable securities — 1,998 Proceeds from call redemptions and maturities of marketable securities 23,865 19,360 Net cash used in investing activities (4,552 ) (43,092 ) Financing activities Proceeds from exercises of stock options 3,835 3,950 Purchases of shares withheld for tax obligations (1,436 ) (1,682 ) Repurchases of common stock (43,951 ) (29,659 ) Principal repayments of finance lease obligations (306 ) (531 ) Net cash used in financing activities (41,858 ) (27,922 ) Effect of exchange rate changes on cash and cash equivalents 368 (436 ) Net increase (decrease) in cash and cash equivalents 27,232 (9,371 ) Cash and cash equivalents, beginning of period 56,558 65,929 Cash and cash equivalents, end of period $ 83,790 $ 56,558 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, 2023 2022 2023 2022 Non-GAAP net income (loss), adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency, goodwill impairment and costs related to Japan closure activities GAAP net income (loss) $ 6,990 $ (115,065 ) $ 17,220 $ (103,462 ) Add back: Stock-based compensation expense 4,178 4,210 15,989 17,545 Amortization expense 1,457 1,514 5,928 6,096 Unrealized (gain) loss on foreign currency (211 ) (490 ) (125 ) 252 Goodwill impairment — 118,008 — 118,008 Costs related to Japan closure activities 29 534 4,122 6,922 Total adjustments 1 5,453 123,776 25,914 148,823 Income tax benefits on adjustments 2 (609 ) (1,753 ) (1,540 ) (4,271 ) Non-GAAP net income $ 11,834 $ 6,958 $ 41,594 $ 41,090 Non-GAAP net income per share: Basic $ 0.46 $ 0.26 $ 1.59 $ 1.50 Diluted $ 0.46 $ 0.26 $ 1.59 $ 1.50 Shares used to compute non-GAAP net income per share: Basic 25,820,802 27,136,821 26,186,533 27,409,838 Diluted 25,889,004 27,151,991 26,223,498 27,433,257 1 Stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency, goodwill impairment and costs related to Japan closure activities were included in the following GAAP consolidated statement of operations categories: Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Cost of revenue $ 794 $ 840 $ 3,210 $ 3,541 Marketing and sales 916 816 3,424 3,295 Research and development 669 488 2,557 2,190 General and administrative 3,256 3,580 12,727 14,615 Goodwill impairment - 118,008 - 118,008 Closure of Japan business 29 534 215 6,922 Total operating expenses 4,870 123,426 18,923 145,030 Other income (loss), net (211 ) (490 ) 3,781 252 Total adjustments $ 5,453 $ 123,776 $ 25,914 $ 148,823 2 For the three and twelve months ended December 31, 2023 and 2022, 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, 2023 2022 2023 2022 Revenue $ 125,048 $ 115,607 $ 503,877 $ 488,398 Gross profit 55,812 48,607 221,993 215,465 GAAP gross margin 44.6 % 42.0 % 44.1 % 44.1 % Add back: Stock-based compensation expense 452 498 1,840 2,172 Amortization expense 342 342 1,370 1,369 Total adjustments 794 840 3,210 3,541 Non-GAAP gross profit $ 56,606 $ 49,447 $ 225,203 $ 219,006 Non-GAAP gross margin 45.3 % 42.8 % 44.7 % 44.8 % Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Gross Margin Excluding Japan (In thousands) (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Revenue $ 125,048 $ 115,607 $ 503,877 $ 488,398 Revenue excluding Japan $ 125,048 $ 115,607 $ 503,877 $ 480,169 Gross profit 55,812 48,607 221,993 215,465 GAAP gross margin 44.6 % 42.0 % 44.1 % 44.1 % Less: Japan gross profit — (93 ) — 3,057 Gross Profit excluding Japan 55,812 48,700 221,993 212,408 GAAP gross margin excluding Japan 44.6 % 42.1 % 44.1 % 44.2 % Add back: Stock-based compensation expense 452 498 1,840 2,172 Amortization expense 342 342 1,370 1,369 Less: Japan stock-based compensation expense — — — 61 Japan amortization expense — — — — Total adjustments 794 840 3,210 3,480 Non-GAAP gross profit excluding Japan $ 56,606 $ 49,540 $ 225,203 $ 215,888 Non-GAAP gross margin excluding Japan 45.3 % 42.9 % 44.7 % 45.0 % Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Operating Margin (In thousands) (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Revenue $ 125,048 $ 115,607 $ 503,877 $ 488,398 Income (loss) from operations 8,395 (117,132 ) 28,167 (97,983 ) GAAP operating margin 6.7 % (101.3 %) 5.6 % (20.1 %) Add back: Stock-based compensation expense 4,178 4,210 15,989 17,545 Amortization expense 1,457 1,514 5,928 6,096 Goodwill impairment — 118,008 — 118,008 Costs related to Japan closure activities 29 534 215 6,922 Total adjustments 5,664 124,266 22,132 148,571 Non-GAAP income from operations $ 14,059 $ 7,134 $ 50,299 $ 50,588 Non-GAAP operating margin 11.2 % 6.2 % 10.0 % 10.4 % Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Operating Margin Excluding Japan (In thousands) (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Revenue $ 125,048 $ 115,607 $ 503,877 $ 488,398 Revenue excluding Japan $ 125,048 $ 115,607 $ 503,877 $ 480,169 Income (loss) from operations 8,395 (117,132 ) 28,167 (97,983 ) GAAP operating margin 6.7 % (101.3 %) 5.6 % (20.1 %) Less: Japan (loss) income from operations (18 ) (594 ) (499 ) (1,424 ) Income from operations excluding Japan 8,413 (116,538 ) 28,666 (96,559 ) GAAP operating margin excluding Japan 6.7 % (100.8 %) 5.7 % (20.1 %) Add back: Stock-based compensation expense 4,178 4,210 15,989 17,545 Amortization expense 1,457 1,514 5,928 6,096 Goodwill impairment — 118,008 — 118,008 Costs related to Japan closure activities 29 534 215 6,922 Less: Japan stock-based compensation expense — 20 17 406 Japan amortization expense — — — — Total adjustments 5,664 124,246 22,115 148,165 Non-GAAP income from operations excluding Japan $ 14,077 $ 7,708 $ 50,781 $ 51,606 Non-GAAP operating margin excluding Japan 11.3 % 6.7 % 10.1 % 10.7 % Proto Labs, Inc. Reconciliation of GAAP Net Income (Loss) to EBITDA and Adjusted EBITDA (In thousands) (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Revenue $ 125,048 $ 115,607 $ 503,877 $ 488,398 GAAP net income (loss) 6,990 (115,065 ) 17,220 (103,462 ) GAAP net income margin 5.6 % (99.5 %) 3.4 % (21.2 %) Add back: Amortization expense $ 1,457 $ 1,514 $ 5,928 $ 6,096 Depreciation expense 7,858 7,930 31,600 33,329 Interest income, net (951 ) (509 ) (2,234 ) (968 ) Provision for income taxes 2,948 (1,638 ) 10,732 5,585 EBITDA 18,302 (107,768 ) 63,246 (59,420 ) EBITDA Margin 14.6 % (93.2 %) 12.6 % (12.2 %) Add back: Stock-based compensation expense 4,178 4,210 15,989 17,545 Unrealized (gain) loss on foreign currency (211 ) (490 ) (125 ) 252 Goodwill impairment — 118,008 — 118,008 Costs related to Japan closure activities 29 534 4,122 6,922 Total adjustments 3,996 122,262 19,986 142,727 Adjusted EBITDA $ 22,298 $ 14,494 $ 83,232 $ 83,307 Adjusted EBITDA Margin 17.8 % 12.5 % 16.5 % 17.1 % Proto Labs, Inc. Comparison of GAAP to Non-GAAP Revenue Growth by Region (In thousands) (Unaudited) Three Months Ended December 31, 2023 Three Months Ended December 31, 2022 % Change2 % Change Organic3 GAAP Foreign Currency1 Non-GAAP GAAP Revenues United States $ 98,814 $ — $ 98,814 $ 92,278 7.1 % 7.1 % Europe 26,234 (1,144 ) 25,090 23,329 12.5 % 7.5 % Total revenue $ 125,048 $ (1,144 ) $ 123,904 $ 115,607 8.2 % 7.2 % Twelve Months Ended December 31, 2023 Twelve Months Ended December 31, 2022 % Change2 % Change Organic3 GAAP Foreign Currency1 Non-GAAP GAAP Revenues United States $ 396,821 $ — $ 396,821 $ 387,399 2.4 % 2.4 % Europe 107,056 167 107,223 92,770 15.4 % 15.6 % Japan — — — 8,229 (100.0 %) (100.0 %) Total revenue $ 503,877 $ 167 $ 504,044 $ 488,398 3.2 % 3.2 % 1 Revenue for the three and twelve months ended December 31, 2023 has been recalculated using 2022 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, 2022 to GAAP revenue for the twelve months ended months ended December 31, 2023. 3 This column presents the percentage change from GAAP revenue for the three and twelve months ended December 31, 2022 to non-GAAP revenue for the three and twelve months ended December 31, 2023 (as recalculated using the foreign currency exchange rates in effect during the three and twelve months ended December 31, 2022) 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, 2023 Three Months Ended December 31, 2022 % Change2 % Change Organic3 GAAP Foreign Currency1 Non-GAAP GAAP Revenues Injection Molding $ 51,486 $ (453 ) $ 51,033 $ 44,885 14.7 % 13.7 % CNC Machining 48,905 (395 ) 48,510 46,563 5.0 4.2 3D Printing 20,339 (268 ) 20,071 19,530 4.1 2.8 Sheet Metal 4,062 (1 ) 4,061 4,432 (8.3 ) (8.4 ) Other Revenue 256 (27 ) 229 197 29.9 16.2 Total Revenue $ 125,048 $ (1,144 ) $ 123,904 $ 115,607 8.2 % 7.2 % Twelve Months Ended December 31, 2023 Twelve Months Ended December 31, 2022 % Change2 % Change Organic3 GAAP Foreign Currency1 Non-GAAP GAAP Revenues Injection Molding $ 203,941 $ 328 $ 204,269 $ 200,578 1.7 % 1.8 % CNC Machining 198,222 (243 ) 197,979 188,372 5.2 5.1 3D Printing 84,291 9 84,300 78,988 6.7 6.7 Sheet Metal 16,540 (10 ) 16,530 19,498 (15.2 ) (15.2 ) Other Revenue 883 83 966 962 (8.2 ) 0.4 Total Revenue $ 503,877 $ 167 $ 504,044 $ 488,398 3.2 % 3.2 % 1 Revenue for the three and twelve months ended December 31, 2023 has been recalculated using 2022 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, 2022 to GAAP revenue for the three and twelve months ended December 31, 2023. 3 This column presents the percentage change from GAAP revenue for the three and twelve months ended December 31, 2022 to non-GAAP revenue for the three and twelve months ended December 31, 2023 (as recalculated using the foreign currency exchange rates in effect during the three and twelve months ended December 31, 2022) in order to provide a constant-currency comparison. Proto Labs, Inc. Customer Contact Information (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Customer contacts 21,879 22,205 53,464 56,333 Revenue per customer contact $ 5,715 $ 5,206 $ 9,425 $ 8,670 Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Guidance (In thousands, except per share and per share amounts) (Unaudited) Q1 2024 Outlook Low High GAAP diluted net income per share $ 0.09 0.17 Add back: Stock-based compensation expense 0.14 0.14 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 View source version on businesswire.com: https://www.businesswire.com/news/home/20240209777634/en/Contacts 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. ("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, 2023. Fourth Quarter 2023 Financial Highlights: Revenue was $125.0 million, an 8.2% increase compared to the fourth quarter of 2022. Revenue generated from Protolabs Network was $22.5 million, a 52.0% increase compared to the fourth quarter of 2022. Net income was $7.0 million, or $0.27 per diluted share, compared to a net loss of $4.24 per diluted share in the fourth quarter of 2022. Non-GAAP net income was $11.8 million, or $0.46 per diluted share, compared to $7.0 million, or $0.26 per diluted share, in the fourth quarter of 2022. See “Non-GAAP Financial Measures” below. EBITDA was $18.3 million, or 14.6% of revenue. See “Non-GAAP Financial Measures” below. Adjusted EBITDA was $22.3 million, or 17.8% of revenue, compared to $14.5 million, or 12.5% of revenue, in the fourth quarter of 2022. See “Non-GAAP Financial Measures” below. Full Year 2023 Financial Highlights: Revenue was a record $503.9 million, representing a 3.2% increase over 2022. Revenue generated from Protolabs Network was $82.6 million in 2023, representing growth of 70.4% over the prior year. Net income was $17.2 million, or $0.66 per diluted share, compared to a net loss of $3.77 per diluted share in 2022. Non-GAAP net income was $41.6 million, or $1.59 per diluted share, compared to $41.1 million, or $1.50 per diluted share, in 2022. See “Non-GAAP Financial Measures” below. EBITDA was $63.2 million, or 12.6% of revenue, in 2023. See “Non-GAAP Financial Measures” below. Adjusted EBITDA was $83.2 million, or 16.5% of revenue, in 2023. See “Non-GAAP Financial Measures” below. Cash flow from operations was $73.3 million in 2023, compared to $62.1 million in 2022. The Company repurchased $44.0 million in common shares during the year. Protolabs served 53,464 customer contacts during the year. "We capped off a record year with strong fourth quarter results, driven by consistent execution against our priorities,” said Rob Bodor, President and Chief Executive Officer. “For the full year, we generated revenue above $500 million for the first time in our 25-year history, while delivering improved earnings, robust cash flow, and substantial capital returned to shareholders. We are encouraged by our strong finish to 2023, and we believe we have the right strategy and priorities in place to continue our momentum throughout 2024. We remain focused on driving positive global impact, maintaining our industry-leading financial model, and increasing value for our shareholders." Dan Schumacher, Chief Financial Officer, commented, "Along with record revenue in 2023, we significantly improved profitability in both the digital factory and the digital network. We generated an industry-leading $73 million in cash from operations, and we paid 97% of our free cash flows to shareholders through share repurchases." First Quarter 2024 Outlook The Company will continue to provide financial guidance on a quarterly basis due to the quick-turn nature of the business and continued uncertainty in global manufacturing. For the first quarter of 2024, the Company expects to generate revenue between $120 million and $128 million. This guidance reflects a softer start to 2024, due to December 2023 and early January 2024 order levels being lower than historical periods. However, recent performance has been more in line with historical trends, and our guidance assumes that will continue through the end of March. The Company expects first quarter 2024 diluted net income per share between $0.09 and $0.17, and non-GAAP diluted net income per share between $0.26 and $0.34. 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, goodwill impairment 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, goodwill impairment 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, goodwill impairment 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 gross margin excluding Japan, 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 excluding Japan, adjusted for stock-based compensation expense, amortization expense, goodwill impairment and costs related to the Japan closure activities (collectively, “non-GAAP operating margin excluding Japan”), 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, goodwill impairment 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 gross margin excluding Japan, non-GAAP operating margin, non-GAAP operating margin excluding Japan, 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 fourth quarter and full year 2023 financial results and first quarter 2024 outlook today, February 9, 2024 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/vyeizwtx/. 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. Proto Labs, Inc. Condensed Consolidated Balance Sheets (In thousands) December 31, 2023 December 31, 2022 (Unaudited) Assets Current assets Cash and cash equivalents $ 83,790 $ 56,558 Short-term marketable securities 19,013 23,568 Accounts receivable, net 72,848 76,225 Inventory 13,657 13,578 Income taxes receivable 2,228 4,042 Prepaid expenses and other current assets 9,124 12,597 Total current assets 200,660 186,568 Property and equipment, net 253,655 257,785 Goodwill 273,991 273,991 Other intangible assets, net 25,584 31,250 Long-term marketable securities 8,019 26,419 Operating lease assets 4,628 3,844 Finance lease assets 960 17,532 Other long-term assets 4,856 4,779 Total assets $ 772,353 $ 802,168 Liabilities and shareholders' equity Current liabilities Accounts payable $ 15,636 $ 17,356 Accrued compensation 15,292 12,743 Accrued liabilities and other 16,872 22,384 Current operating lease liabilities 1,585 1,561 Current finance lease liabilities 296 17,537 Total current liabilities 49,681 71,581 Long-term operating lease liabilities 3,008 2,255 Long-term finance lease liabilities 595 — Long-term deferred tax liabilities 18,742 26,322 Other long-term liabilities 5,032 4,362 Shareholders' equity 695,295 697,648 Total liabilities and shareholders' equity $ 772,353 $ 802,168 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, 2023 2022 2023 2022 Revenue Injection Molding $ 51,486 $ 44,885 $ 203,941 $ 200,578 CNC Machining 48,905 46,563 198,222 188,372 3D Printing 20,339 19,530 84,291 78,988 Sheet Metal 4,062 4,432 16,540 19,498 Other Revenue 256 197 883 962 Total Revenue 125,048 115,607 503,877 488,398 Cost of revenue 69,236 67,000 281,884 272,933 Gross profit 55,812 48,607 221,993 215,465 Operating expenses Marketing and sales 21,825 20,517 87,688 82,752 Research and development 9,488 8,906 40,135 38,222 General and administrative 16,075 17,774 65,788 67,544 Goodwill impairment — 118,008 — 118,008 Closure of Japan business 29 534 215 6,922 Total operating expenses 47,417 165,739 193,826 313,448 Income (loss) from operations 8,395 (117,132 ) 28,167 (97,983 ) Other income (loss), net 1,543 429 (215 ) 106 Income (loss) before income taxes 9,938 (116,703 ) 27,952 (97,877 ) Provision for income taxes 2,948 (1,638 ) 10,732 5,585 Net income (loss) $ 6,990 $ (115,065 ) $ 17,220 $ (103,462 ) Net income (loss) per share: Basic $ 0.27 $ (4.24 ) $ 0.66 $ (3.77 ) Diluted $ 0.27 $ (4.24 ) $ 0.66 $ (3.77 ) Shares used to compute net income (loss) per share: Basic 25,820,802 27,136,821 26,186,533 27,409,838 Diluted 25,889,004 27,136,821 26,223,498 27,409,838 Proto Labs, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Twelve Months Ended December 31, 2023 2022 Operating activities Net income (loss) $ 17,220 $ (103,462 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 37,528 39,425 Stock-based compensation expense 15,989 17,545 Deferred taxes (7,656 ) (9,499 ) Interest on finance lease obligations 1,055 — Loss on impairment of goodwill — 118,008 Loss on foreign currency translation 3,906 — Impairments related to closure of Japan business — 2,842 Gain on disposal of property and equipment (498 ) (1,211 ) Other 154 35 Changes in operating assets and liabilities 5,576 (1,604 ) Net cash provided by operating activities 73,274 62,079 Investing activities Purchases of property, equipment and other capital assets (28,116 ) (21,686 ) Proceeds from sales of property, equipment and other capital assets 699 4,108 Purchases of marketable securities — (46,872 ) Purchases of other assets and investments (1,000 ) — Proceeds from sales of marketable securities — 1,998 Proceeds from call redemptions and maturities of marketable securities 23,865 19,360 Net cash used in investing activities (4,552 ) (43,092 ) Financing activities Proceeds from exercises of stock options 3,835 3,950 Purchases of shares withheld for tax obligations (1,436 ) (1,682 ) Repurchases of common stock (43,951 ) (29,659 ) Principal repayments of finance lease obligations (306 ) (531 ) Net cash used in financing activities (41,858 ) (27,922 ) Effect of exchange rate changes on cash and cash equivalents 368 (436 ) Net increase (decrease) in cash and cash equivalents 27,232 (9,371 ) Cash and cash equivalents, beginning of period 56,558 65,929 Cash and cash equivalents, end of period $ 83,790 $ 56,558 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, 2023 2022 2023 2022 Non-GAAP net income (loss), adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency, goodwill impairment and costs related to Japan closure activities GAAP net income (loss) $ 6,990 $ (115,065 ) $ 17,220 $ (103,462 ) Add back: Stock-based compensation expense 4,178 4,210 15,989 17,545 Amortization expense 1,457 1,514 5,928 6,096 Unrealized (gain) loss on foreign currency (211 ) (490 ) (125 ) 252 Goodwill impairment — 118,008 — 118,008 Costs related to Japan closure activities 29 534 4,122 6,922 Total adjustments 1 5,453 123,776 25,914 148,823 Income tax benefits on adjustments 2 (609 ) (1,753 ) (1,540 ) (4,271 ) Non-GAAP net income $ 11,834 $ 6,958 $ 41,594 $ 41,090 Non-GAAP net income per share: Basic $ 0.46 $ 0.26 $ 1.59 $ 1.50 Diluted $ 0.46 $ 0.26 $ 1.59 $ 1.50 Shares used to compute non-GAAP net income per share: Basic 25,820,802 27,136,821 26,186,533 27,409,838 Diluted 25,889,004 27,151,991 26,223,498 27,433,257 1 Stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency, goodwill impairment and costs related to Japan closure activities were included in the following GAAP consolidated statement of operations categories: Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Cost of revenue $ 794 $ 840 $ 3,210 $ 3,541 Marketing and sales 916 816 3,424 3,295 Research and development 669 488 2,557 2,190 General and administrative 3,256 3,580 12,727 14,615 Goodwill impairment - 118,008 - 118,008 Closure of Japan business 29 534 215 6,922 Total operating expenses 4,870 123,426 18,923 145,030 Other income (loss), net (211 ) (490 ) 3,781 252 Total adjustments $ 5,453 $ 123,776 $ 25,914 $ 148,823 2 For the three and twelve months ended December 31, 2023 and 2022, 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, 2023 2022 2023 2022 Revenue $ 125,048 $ 115,607 $ 503,877 $ 488,398 Gross profit 55,812 48,607 221,993 215,465 GAAP gross margin 44.6 % 42.0 % 44.1 % 44.1 % Add back: Stock-based compensation expense 452 498 1,840 2,172 Amortization expense 342 342 1,370 1,369 Total adjustments 794 840 3,210 3,541 Non-GAAP gross profit $ 56,606 $ 49,447 $ 225,203 $ 219,006 Non-GAAP gross margin 45.3 % 42.8 % 44.7 % 44.8 % Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Gross Margin Excluding Japan (In thousands) (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Revenue $ 125,048 $ 115,607 $ 503,877 $ 488,398 Revenue excluding Japan $ 125,048 $ 115,607 $ 503,877 $ 480,169 Gross profit 55,812 48,607 221,993 215,465 GAAP gross margin 44.6 % 42.0 % 44.1 % 44.1 % Less: Japan gross profit — (93 ) — 3,057 Gross Profit excluding Japan 55,812 48,700 221,993 212,408 GAAP gross margin excluding Japan 44.6 % 42.1 % 44.1 % 44.2 % Add back: Stock-based compensation expense 452 498 1,840 2,172 Amortization expense 342 342 1,370 1,369 Less: Japan stock-based compensation expense — — — 61 Japan amortization expense — — — — Total adjustments 794 840 3,210 3,480 Non-GAAP gross profit excluding Japan $ 56,606 $ 49,540 $ 225,203 $ 215,888 Non-GAAP gross margin excluding Japan 45.3 % 42.9 % 44.7 % 45.0 % Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Operating Margin (In thousands) (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Revenue $ 125,048 $ 115,607 $ 503,877 $ 488,398 Income (loss) from operations 8,395 (117,132 ) 28,167 (97,983 ) GAAP operating margin 6.7 % (101.3 %) 5.6 % (20.1 %) Add back: Stock-based compensation expense 4,178 4,210 15,989 17,545 Amortization expense 1,457 1,514 5,928 6,096 Goodwill impairment — 118,008 — 118,008 Costs related to Japan closure activities 29 534 215 6,922 Total adjustments 5,664 124,266 22,132 148,571 Non-GAAP income from operations $ 14,059 $ 7,134 $ 50,299 $ 50,588 Non-GAAP operating margin 11.2 % 6.2 % 10.0 % 10.4 % Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Operating Margin Excluding Japan (In thousands) (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Revenue $ 125,048 $ 115,607 $ 503,877 $ 488,398 Revenue excluding Japan $ 125,048 $ 115,607 $ 503,877 $ 480,169 Income (loss) from operations 8,395 (117,132 ) 28,167 (97,983 ) GAAP operating margin 6.7 % (101.3 %) 5.6 % (20.1 %) Less: Japan (loss) income from operations (18 ) (594 ) (499 ) (1,424 ) Income from operations excluding Japan 8,413 (116,538 ) 28,666 (96,559 ) GAAP operating margin excluding Japan 6.7 % (100.8 %) 5.7 % (20.1 %) Add back: Stock-based compensation expense 4,178 4,210 15,989 17,545 Amortization expense 1,457 1,514 5,928 6,096 Goodwill impairment — 118,008 — 118,008 Costs related to Japan closure activities 29 534 215 6,922 Less: Japan stock-based compensation expense — 20 17 406 Japan amortization expense — — — — Total adjustments 5,664 124,246 22,115 148,165 Non-GAAP income from operations excluding Japan $ 14,077 $ 7,708 $ 50,781 $ 51,606 Non-GAAP operating margin excluding Japan 11.3 % 6.7 % 10.1 % 10.7 % Proto Labs, Inc. Reconciliation of GAAP Net Income (Loss) to EBITDA and Adjusted EBITDA (In thousands) (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Revenue $ 125,048 $ 115,607 $ 503,877 $ 488,398 GAAP net income (loss) 6,990 (115,065 ) 17,220 (103,462 ) GAAP net income margin 5.6 % (99.5 %) 3.4 % (21.2 %) Add back: Amortization expense $ 1,457 $ 1,514 $ 5,928 $ 6,096 Depreciation expense 7,858 7,930 31,600 33,329 Interest income, net (951 ) (509 ) (2,234 ) (968 ) Provision for income taxes 2,948 (1,638 ) 10,732 5,585 EBITDA 18,302 (107,768 ) 63,246 (59,420 ) EBITDA Margin 14.6 % (93.2 %) 12.6 % (12.2 %) Add back: Stock-based compensation expense 4,178 4,210 15,989 17,545 Unrealized (gain) loss on foreign currency (211 ) (490 ) (125 ) 252 Goodwill impairment — 118,008 — 118,008 Costs related to Japan closure activities 29 534 4,122 6,922 Total adjustments 3,996 122,262 19,986 142,727 Adjusted EBITDA $ 22,298 $ 14,494 $ 83,232 $ 83,307 Adjusted EBITDA Margin 17.8 % 12.5 % 16.5 % 17.1 % Proto Labs, Inc. Comparison of GAAP to Non-GAAP Revenue Growth by Region (In thousands) (Unaudited) Three Months Ended December 31, 2023 Three Months Ended December 31, 2022 % Change2 % Change Organic3 GAAP Foreign Currency1 Non-GAAP GAAP Revenues United States $ 98,814 $ — $ 98,814 $ 92,278 7.1 % 7.1 % Europe 26,234 (1,144 ) 25,090 23,329 12.5 % 7.5 % Total revenue $ 125,048 $ (1,144 ) $ 123,904 $ 115,607 8.2 % 7.2 % Twelve Months Ended December 31, 2023 Twelve Months Ended December 31, 2022 % Change2 % Change Organic3 GAAP Foreign Currency1 Non-GAAP GAAP Revenues United States $ 396,821 $ — $ 396,821 $ 387,399 2.4 % 2.4 % Europe 107,056 167 107,223 92,770 15.4 % 15.6 % Japan — — — 8,229 (100.0 %) (100.0 %) Total revenue $ 503,877 $ 167 $ 504,044 $ 488,398 3.2 % 3.2 % 1 Revenue for the three and twelve months ended December 31, 2023 has been recalculated using 2022 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, 2022 to GAAP revenue for the twelve months ended months ended December 31, 2023. 3 This column presents the percentage change from GAAP revenue for the three and twelve months ended December 31, 2022 to non-GAAP revenue for the three and twelve months ended December 31, 2023 (as recalculated using the foreign currency exchange rates in effect during the three and twelve months ended December 31, 2022) 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, 2023 Three Months Ended December 31, 2022 % Change2 % Change Organic3 GAAP Foreign Currency1 Non-GAAP GAAP Revenues Injection Molding $ 51,486 $ (453 ) $ 51,033 $ 44,885 14.7 % 13.7 % CNC Machining 48,905 (395 ) 48,510 46,563 5.0 4.2 3D Printing 20,339 (268 ) 20,071 19,530 4.1 2.8 Sheet Metal 4,062 (1 ) 4,061 4,432 (8.3 ) (8.4 ) Other Revenue 256 (27 ) 229 197 29.9 16.2 Total Revenue $ 125,048 $ (1,144 ) $ 123,904 $ 115,607 8.2 % 7.2 % Twelve Months Ended December 31, 2023 Twelve Months Ended December 31, 2022 % Change2 % Change Organic3 GAAP Foreign Currency1 Non-GAAP GAAP Revenues Injection Molding $ 203,941 $ 328 $ 204,269 $ 200,578 1.7 % 1.8 % CNC Machining 198,222 (243 ) 197,979 188,372 5.2 5.1 3D Printing 84,291 9 84,300 78,988 6.7 6.7 Sheet Metal 16,540 (10 ) 16,530 19,498 (15.2 ) (15.2 ) Other Revenue 883 83 966 962 (8.2 ) 0.4 Total Revenue $ 503,877 $ 167 $ 504,044 $ 488,398 3.2 % 3.2 % 1 Revenue for the three and twelve months ended December 31, 2023 has been recalculated using 2022 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, 2022 to GAAP revenue for the three and twelve months ended December 31, 2023. 3 This column presents the percentage change from GAAP revenue for the three and twelve months ended December 31, 2022 to non-GAAP revenue for the three and twelve months ended December 31, 2023 (as recalculated using the foreign currency exchange rates in effect during the three and twelve months ended December 31, 2022) in order to provide a constant-currency comparison. Proto Labs, Inc. Customer Contact Information (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Customer contacts 21,879 22,205 53,464 56,333 Revenue per customer contact $ 5,715 $ 5,206 $ 9,425 $ 8,670 Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Guidance (In thousands, except per share and per share amounts) (Unaudited) Q1 2024 Outlook Low High GAAP diluted net income per share $ 0.09 0.17 Add back: Stock-based compensation expense 0.14 0.14 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 View source version on businesswire.com: https://www.businesswire.com/news/home/20240209777634/en/
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