Total Revenue of $126 Million
GAAP Earnings Per Share of $0.29, Non-GAAP
Earnings Per Share of $0.47
Proto Labs, Inc. ("Protolabs" or the "Company") (NYSE: PRLB),
the world’s leading provider of digital manufacturing services,
today announced financial results for the third quarter ended
September 30, 2024.
Third Quarter 2024 Financial
Highlights:
- Revenue was $125.6 million, a 3.9% decrease compared to record
revenue of $130.7 million in the third quarter of 2023.
- Revenue generated from Protolabs Network was $25.3 million, a
11.6% increase compared to the third quarter of 2023.
- Net income was $7.2 million, or $0.29 per diluted share,
compared to $8.0 million, or $0.31 per diluted share, in the third
quarter of 2023.
- Non-GAAP net income was $11.8 million, or $0.47 per diluted
share, compared to $13.2 million, or $0.51 per diluted share, in
the third quarter of 2023. See “Non-GAAP Financial Measures”
below.
- EBITDA was $17.5 million, or 13.9% of revenue. See “Non-GAAP
Financial Measures” below.
- Adjusted EBITDA was $21.9 million, or 17.4% of revenue,
compared to $23.9 million, or 18.3% of revenue, in the third
quarter of 2023. See “Non-GAAP Financial Measures” below.
"Our disciplined approach and resilient business model drove
solid financial results in the third quarter, despite continued
dynamic challenges in the manufacturing sector," said Rob Bodor,
President and Chief Executive Officer. "We remain committed to
accelerating our growth, as highlighted by the actions we initiated
at the end of the second quarter to reorganize our internal
structure and better position the company for growth and
value-creation over the long-term. We are committed to executing on
our priorities and increasing value for our shareholders."
Dan Schumacher, Chief Financial Officer, commented: "In the
third quarter, our business generated its highest quarterly
operating cash flow since 2020—before the acquisition of 3D Hubs.
This is a testament to the profitability of Protolabs' model
against any macro backdrop, driven by our unique combined factory
and network model. We will continue to invest profits to accelerate
growth and create value for shareholders."
Additional Third Quarter 2024
Highlights:
- Customer contact information
- Protolabs served 22,511 customer contacts during the
quarter.
- Revenue per customer contact decreased 1.5% year-over-year to
$5,580. Year-to-date, revenue per customer contact is up 4.7%.
- Gross margin was 45.6% of revenue, compared to 45.4% of revenue
in the third quarter of 2023.
- Non-GAAP gross margin was 46.2% of revenue, compared to 46.0%
of revenue in the third quarter of 2023. See "Non-GAAP Financial
Measures" below.
- Cash flow from operations was $24.8 million in the third
quarter of 2024.
- Cash and investments balance was $117.6 million as of September
30, 2024.
Fourth Quarter 2024
Outlook
For the fourth quarter of 2024, the Company expects to generate
revenue between $115 million and $123 million.
The Company expects fourth quarter 2024 diluted net income per
share between $0.10 and $0.18, and non-GAAP diluted net income per
share between $0.28 and $0.36. See "Non-GAAP Financial Measures"
below.
Non-GAAP Financial Measures
The Company has included non-GAAP revenue growth by region and
by service line that excludes the impact of changes in foreign
currency exchange rates (collectively, “non-GAAP revenue growth”).
Management believes these metrics, when viewed in conjunction with
the comparable GAAP metrics, are useful in evaluating the
underlying business trends and ongoing operating performance of the
Company.
The Company has included earnings before interest, taxes,
depreciation and amortization (“EBITDA”) and EBITDA, adjusted for
stock-based compensation expense, unrealized (gain) loss on foreign
currency and costs related to the Japan closure activities
(collectively, “Adjusted EBITDA”), in this press release to provide
investors with additional information regarding the Company’s
financial results. The Company has also included earnings before
interest, taxes, depreciation and amortization margin (“EBITDA
margin”) and EBITDA margin, adjusted for stock-based compensation
expense, unrealized (gain) loss on foreign currency and costs
related to the Japan closure activities (collectively, “Adjusted
EBITDA margin”), in this press release to provide investors with
additional information regarding the Company’s financial
results.
The Company has included non-GAAP gross margin, adjusted for
stock-based compensation expense and amortization expense in this
press release to provide investors with additional information
regarding the Company’s financial results.
The Company has included non-GAAP operating margin, adjusted for
stock-based compensation expense, amortization expense and costs
related to the closure of Japan (collectively, “non-GAAP operating
margin”), in this press release to provide investors with
additional information regarding the Company’s financial
results.
The Company has included non-GAAP net income, adjusted for
stock-based compensation expense, amortization expense, unrealized
(gain) loss on foreign currency and costs related to the closure of
Japan (collectively, “non-GAAP net income”), in this press release
to provide investors with additional information regarding the
Company’s financial results.
The Company has provided below reconciliations of GAAP to
non-GAAP net income, non-GAAP gross margin, non-GAAP operating
margin, non-GAAP revenue growth by region and by service, and
Adjusted EBITDA and Adjusted EBITDA margin, the most directly
comparable measures calculated and presented in accordance with
GAAP. These non-GAAP measures are used by the Company’s management
and board of directors to understand and evaluate operating
performance and trends and provide useful measures for
period-to-period comparisons of the Company’s business.
Accordingly, the Company believes that these non-GAAP measures
provide useful information to investors and others in understanding
and evaluating operating results in the same manner as our
management and board of directors.
Conference Call
The Company has scheduled a conference call to discuss its third
quarter 2024 financial results and fourth quarter 2024 outlook
today, November 1, 2024 at 8:30 a.m. EDT. To access the call in the
U.S. please dial 877-709-8150 or outside the U.S. dial 201-689-8354
at least five minutes prior to the 8:30 a.m. EDT start time. No
participant code is required. A simultaneous webcast of the call
and accompanying presentation will be available via the investor
relations section of the Protolabs website and the following link:
https://edge.media-server.com/mmc/p/b94yu8yp/. A replay will be
available for 14 days following the call on the investor relations
section of the Protolabs website.
About Protolabs
Protolabs is the fastest and most comprehensive digital
manufacturing service in the world. Our digital factories produce
low-volume parts in days while Protolabs Network unlocks advanced
capabilities and volume pricing through its highly vetted
manufacturing partners. The result? One manufacturing source—from
prototyping to production—for product developers, engineers, and
supply chain teams across the globe. See what's next at
protolabs.com.
Forward-Looking Statements
Statements contained in this press release regarding matters
that are not historical or current facts are “forward-looking
statements” within the meaning of The Private Securities Litigation
Reform Act of 1995. These statements involve known and unknown
risks, uncertainties and other factors which may cause the results
of Protolabs to be materially different than those expressed or
implied in such statements. Certain of these risk factors and
others are described in the “Risk Factors” section within reports
filed with the SEC. Other unknown or unpredictable factors also
could have material adverse effects on Protolabs’ future results.
The forward-looking statements included in this press release are
made only as of the date hereof. Protolabs cannot guarantee future
results, levels of activity, performance or achievements.
Accordingly, you should not place undue reliance on these
forward-looking statements. Finally, Protolabs expressly disclaims
any intent or obligation to update any forward-looking statements
to reflect subsequent events or circumstances.
Proto Labs, Inc.
Condensed Consolidated Balance
Sheets
(In thousands)
September 30,
2024
December 31,
2023
(Unaudited)
Assets
Current assets
Cash and cash equivalents
$
87,873
$
83,790
Short-term marketable securities
12,638
19,013
Accounts receivable, net
69,464
72,848
Inventory
12,415
13,657
Income taxes receivable
665
2,228
Prepaid expenses and other current
assets
10,019
9,124
Total current assets
193,074
200,660
Property and equipment, net
237,942
253,655
Goodwill
273,991
273,991
Other intangible assets, net
22,890
25,584
Long-term marketable securities
17,120
8,019
Operating lease assets
3,519
4,628
Finance lease assets
759
960
Other long-term assets
4,491
4,856
Total assets
$
753,786
$
772,353
Liabilities and shareholders'
equity
Current liabilities
Accounts payable
$
15,004
$
15,636
Accrued compensation
17,549
15,292
Accrued liabilities and other
18,455
16,872
Current operating lease liabilities
1,450
1,585
Current finance lease liabilities
306
296
Income taxes payable
994
—
Total current liabilities
53,758
49,681
Long-term operating lease liabilities
1,979
3,008
Long-term finance lease liabilities
365
595
Long-term deferred tax liabilities
12,688
18,742
Other long-term liabilities
5,003
5,032
Shareholders' equity
679,993
695,295
Total liabilities and shareholders'
equity
$
753,786
$
772,353
Proto Labs, Inc.
Condensed Consolidated
Statements of Operations
(In thousands, except share
and per share amounts)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Revenue
Injection Molding
$
46,831
$
51,688
$
148,574
$
152,455
CNC Machining
53,327
52,916
154,498
149,317
3D Printing
21,437
21,622
64,300
63,952
Sheet Metal
3,743
4,291
11,218
12,478
Other Revenue
281
188
550
627
Total Revenue
125,619
130,705
379,140
378,829
Cost of revenue
68,389
71,423
207,897
212,648
Gross profit
57,230
59,282
171,243
166,181
Operating expenses
Marketing and sales
22,619
21,682
69,070
65,863
Research and development
9,772
10,105
31,600
30,647
General and administrative
16,259
17,058
49,167
49,713
Closure of Japan business
—
22
—
186
Total operating expenses
48,650
48,867
149,837
146,409
Income from operations
8,580
10,415
21,406
19,772
Other income (loss), net
1,288
320
3,548
(1,758
)
Income before income taxes
9,868
10,735
24,954
18,014
Provision for income taxes
2,679
2,781
7,957
7,784
Net income
$
7,189
$
7,954
$
16,997
$
10,230
Net income per share:
Basic
$
0.29
$
0.31
$
0.67
$
0.39
Diluted
$
0.29
$
0.31
$
0.67
$
0.39
Shares used to compute net income per
share:
Basic
24,980,536
26,023,830
25,304,985
26,296,304
Diluted
25,022,485
26,028,456
25,382,280
26,327,606
Proto Labs, Inc.
Condensed Consolidated
Statements of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
2024
2023
Operating activities
Net income
$
16,997
$
10,230
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
26,984
28,213
Stock-based compensation expense
12,716
11,811
Deferred taxes
(6,140
)
(9,197
)
Interest on finance lease obligations
26
859
Loss on impairment of equipment
256
—
Loss on foreign currency translation
—
3,906
Gain on disposal of property and
equipment
(24
)
(498
)
Other
103
122
Changes in operating assets and
liabilities
9,617
10,600
Net cash provided by operating
activities
60,535
56,046
Investing activities
Purchases of property, equipment and other
capital assets
(8,339
)
(9,935
)
Proceeds from sales of property, equipment
and other capital assets
34
693
Purchases of marketable securities
(18,087
)
—
Proceeds from call redemptions and
maturities of marketable securities
15,709
19,115
Net cash (used in) provided by investing
activities
(10,683
)
9,873
Financing activities
Proceeds from exercises of stock options
and employee stock purchases
2,094
1,986
Purchases of shares withheld for tax
obligations
(1,920
)
(1,436
)
Repurchases of common stock
(45,958
)
(39,053
)
Principal repayments of finance lease
obligations
(220
)
(234
)
Net cash used in financing activities
(46,004
)
(38,737
)
Effect of exchange rate changes on cash
and cash equivalents
235
(244
)
Net increase in cash and cash
equivalents
4,083
26,938
Cash and cash equivalents, beginning of
period
83,790
56,558
Cash and cash equivalents, end of
period
$
87,873
$
83,496
Proto Labs, Inc.
Reconciliation of GAAP to
Non-GAAP Net Income per Share
(In thousands, except share
and per share amounts)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
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 Japan closure
activities
GAAP net income
$
7,189
$
7,954
$
16,997
$
10,230
Add back:
Stock-based compensation expense
4,196
4,441
12,716
11,811
Amortization expense
888
1,461
2,796
4,471
Unrealized (gain) loss on foreign
currency
174
(29
)
323
86
Costs related to Japan closure
activities
—
22
—
4,093
Total adjustments 1
5,258
5,895
15,835
20,461
Income tax benefits on adjustments 2
(627
)
(633
)
(1,066
)
(931
)
Non-GAAP net income
$
11,820
$
13,216
$
31,766
$
29,760
Non-GAAP net income per share:
Basic
$
0.47
$
0.51
$
1.26
$
1.13
Diluted
$
0.47
$
0.51
$
1.25
$
1.13
Shares used to compute non-GAAP net income
per share:
Basic
24,980,536
26,023,830
25,304,985
26,296,304
Diluted
25,022,485
26,028,456
25,382,280
26,327,606
1
Stock-based compensation expense, amortization expense,
unrealized (gain) loss on foreign currency and costs related to
Japan closure activities were included in the following GAAP
consolidated statement of operations categories:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Cost of revenue
$
817
$
805
$
2,428
$
2,416
Marketing and sales
727
961
2,378
2,508
Research and development
671
675
2,031
1,888
General and administrative
2,869
3,461
8,675
9,471
Closure of Japan business
—
22
—
186
Total operating expenses
4,267
5,119
13,084
14,053
Other income (loss), net
174
(29
)
323
3,992
Total adjustments
$
5,258
$
5,895
$
15,835
$
20,461
2
For the three and nine months ended
September 30, 2024 and 2023, income tax effects were calculated
using the effective tax rate for the relevant jurisdictions. The
Company's non-GAAP tax rates differ from its GAAP tax rates due
primarily to the mix of activity incurred in domestic and foreign
tax jurisdictions and removing effective tax rate benefits from
stock-based compensation activity in the quarter.
Proto Labs, Inc.
Reconciliation of GAAP to
Non-GAAP Gross Margin
(In thousands)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Revenue
$
125,619
$
130,705
$
379,140
$
378,829
Gross profit
57,230
59,282
171,243
166,181
GAAP gross margin
45.6
%
45.4
%
45.2
%
43.9
%
Add back:
Stock-based compensation expense
474
462
1,401
1,388
Amortization expense
343
343
1,027
1,028
Total adjustments
817
805
2,428
2,416
Non-GAAP gross profit
$
58,047
$
60,087
$
173,671
$
168,597
Non-GAAP gross margin
46.2
%
46.0
%
45.8
%
44.5
%
Proto Labs, Inc.
Reconciliation of GAAP to
Non-GAAP Operating Margin
(In thousands)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Revenue
$
125,619
$
130,705
$
379,140
$
378,829
Income from operations
8,580
10,415
21,406
19,772
GAAP operating margin
6.8
%
8.0
%
5.6
%
5.2
%
Add back:
Stock-based compensation expense
4,196
4,441
12,716
11,811
Amortization expense
888
1,461
2,796
4,471
Costs related to Japan closure
activities
—
22
—
186
Total adjustments
5,084
5,924
15,512
16,468
Non-GAAP income from operations
$
13,664
$
16,339
$
36,918
$
36,240
Non-GAAP operating margin
10.9
%
12.5
%
9.7
%
9.6
%
Proto Labs, Inc.
Reconciliation of GAAP Net
Income to EBITDA and Adjusted EBITDA
(In thousands)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Revenue
$
125,619
$
130,705
$
379,140
$
378,829
GAAP net income
7,189
7,954
16,997
10,230
GAAP net income margin
5.7
%
6.1
%
4.5
%
2.7
%
Add back:
Amortization expense
$
888
$
1,461
$
2,796
$
4,471
Depreciation expense
8,021
7,869
24,188
23,742
Interest income, net
(1,287
)
(561
)
(3,548
)
(1,283
)
Provision for income taxes
2,679
2,781
7,957
7,784
EBITDA
17,490
19,504
48,390
44,944
EBITDA Margin
13.9
%
14.9
%
12.8
%
11.9
%
Add back:
Stock-based compensation expense
4,196
4,441
12,716
11,811
Unrealized (gain) loss on foreign
currency
174
(29
)
323
86
Costs related to Japan closure
activities
—
22
—
4,093
Total adjustments
4,370
4,434
13,039
15,990
Adjusted EBITDA
$
21,860
$
23,938
$
61,429
$
60,934
Adjusted EBITDA Margin
17.4
%
18.3
%
16.2
%
16.1
%
Proto Labs, Inc.
Comparison of GAAP to Non-GAAP
Revenue Growth by Region
(In thousands)
(Unaudited)
Three Months Ended
September 30, 2024
Three Months Ended
September 30, 2023
%
Change2
% Change
Organic3
GAAP
Foreign
Currency1
Non-GAAP
GAAP
Revenues
United States
$
99,571
$
—
$
99,571
$
103,940
(4.2
%)
(4.2
%)
Europe
26,048
(474
)
25,574
26,765
(2.7
%)
(4.4
%)
Total revenue
$
125,619
$
(474
)
$
125,145
$
130,705
(3.9
%)
(4.3
%)
Nine Months Ended
September 30, 2024
Nine Months Ended
September 30, 2023
%
Change2
% Change
Organic3
GAAP
Foreign
Currency1
Non-GAAP
GAAP
Revenues
United States
$
299,593
$
—
$
299,593
$
298,007
0.5
%
0.5
%
Europe
79,547
(1,357
)
78,190
80,822
(1.6
%)
(3.3
%)
Total revenue
$
379,140
$
(1,357
)
$
377,783
$
378,829
0.1
%
(0.3
%)
1
Revenue for the three and nine months ended September 30, 2024
has been recalculated using 2023 foreign currency exchange rates in
effect during comparable periods to provide information useful in
evaluating the underlying business trends excluding the impact of
changes in foreign currency exchange rates.
2
This column presents the percentage change from GAAP revenue for
the three and nine months ended September 30, 2023 to GAAP revenue
for the three and nine months ended September 30, 2024.
3
This column presents the percentage change from GAAP revenue for
the three and nine months ended September 30, 2023 to non-GAAP
revenue for the three and nine months ended September 30, 2024 (as
recalculated using the foreign currency exchange rates in effect
during the three and nine months ended September 30, 2023) in order
to provide a constant-currency comparison.
Proto Labs, Inc.
Comparison of GAAP to Non-GAAP
Revenue Growth by Service Line
(In thousands)
(Unaudited)
Three Months Ended
September 30, 2024
Three Months Ended
September 30, 2023
%
Change2
% Change
Organic3
GAAP
Foreign
Currency1
Non-GAAP
GAAP
Revenues
Injection Molding
$
46,831
$
(198
)
$
46,633
$
51,688
(9.4
)%
(9.8
)%
CNC Machining
53,327
(160
)
53,167
52,916
0.8
0.5
3D Printing
21,437
(108
)
21,329
21,622
(0.9
)
(1.4
)
Sheet Metal
3,743
(4
)
3,739
4,291
(12.8
)
(12.9
)
Other Revenue
281
(4
)
277
188
49.5
47.3
Total Revenue
$
125,619
$
(474
)
$
125,145
$
130,705
(3.9
%)
(4.3
%)
Nine Months Ended
September 30, 2024
Nine Months Ended
September 30, 2023
%
Change2
% Change
Organic3
GAAP
Foreign
Currency1
Non-GAAP
GAAP
Revenues
Injection Molding
$
148,574
$
(666
)
$
147,908
$
152,455
(2.5
)%
(3.0
)%
CNC Machining
154,498
(378
)
154,120
149,317
3.5
3.2
3D Printing
64,300
(315
)
63,985
63,952
0.5
0.1
Sheet Metal
11,218
9
11,227
12,478
(10.1
)
(10.0
)
Other Revenue
550
(7
)
543
627
(12.3
)
(13.4
)
Total Revenue
$
379,140
$
(1,357
)
$
377,783
$
378,829
0.1
%
(0.3
%)
1
Revenue for the three and nine months ended September 30, 2024
has been recalculated using 2023 foreign currency exchange rates in
effect during comparable periods to provide information useful in
evaluating the underlying business trends excluding the impact of
changes in foreign currency exchange rates.
2
This column presents the percentage change from GAAP revenue for
the three and nine months ended September 30, 2023 to GAAP revenue
for the three and nine months ended September 30, 2024.
3
This column presents the percentage change from GAAP revenue for
the three and nine months ended September 30, 2023 to non-GAAP
revenue for the three and nine months ended September 30, 2024 (as
recalculated using the foreign currency exchange rates in effect
during the three and nine months ended September 30, 2023) in order
to provide a constant-currency comparison.
Proto Labs, Inc.
Customer Contact
Information
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Customer contacts
22,511
23,080
43,671
45,668
Revenue per customer contact
$
5,580
$
5,663
$
8,682
$
8,295
Proto Labs, Inc.
Reconciliation of GAAP to
Non-GAAP Guidance
(In thousands, except per
share and per share amounts)
(Unaudited)
Q4 2024 Outlook
Low
High
GAAP diluted net income per share
$
0.10
$
0.18
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
$
0.28
$
0.36
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241101186790/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
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