Executive Summary

Q1 2025 revenue was $126.2M, up 4% sequentially and down 1.3% year over year; non-GAAP diluted EPS was $0.33, near the top of guidance, and GAAP diluted EPS was $0.15 .
Versus S&P Global consensus, PRLB delivered a beat on revenue ($126.2M vs $123.7M*) and non-GAAP EPS ($0.33 vs $0.292*), while EBITDA came in below consensus ($13.57M vs $16.47M*) — a mixed quality beat with lower EBITDA driven by higher OpEx and mix shift toward Network fulfillment (Values retrieved from S&P Global).
Q2 2025 guidance: revenue $124–$132M; GAAP diluted EPS $0.11–$0.19; non-GAAP diluted EPS $0.30–$0.38; non-GAAP tax rate 25–27% — indicating modest YoY growth at the midpoint and flat-to-slightly down margins due to higher Network mix .
Management emphasized accelerating production-led growth, strong cash generation (CFO $18.4M), and $20.9M share repurchases, citing agility amid evolving tariffs and supply chain dynamics as a potential tailwind and catalyst .

What Went Well and What Went Wrong

What Went Well

Production momentum and marketing traction: “Customers utilizing our combined offer grew more than 45%... revenue per customer in Q1 increased by 3% year-over-year” and production revenue “exceeded our expectations” .
Sequential margin and cash generation improvement: non-GAAP gross margin rose 140 bps sequentially to 44.8%; cash from operations was $18.4M in Q1, reinforcing industry-leading cash flow .
Network fulfillment growth and resiliency: Protolabs Network revenue rose to $26.3M; management highlighted adaptable AI-driven pricing/sourcing and diversified footprint to mitigate tariff/sourcing risks .

What Went Wrong

Year-over-year decline and service-line pressure: revenue down 1.3% YoY; Injection Molding (-7.5% YoY) and 3D Printing (-6.4% YoY) declined amid macro headwinds and slower prototyping demand .
EBITDA down YoY and below consensus: Q1 EBITDA was $13.57M vs consensus $16.47M*, reflecting higher incentive comp and demand generation spend and mix shift to Network .
Non-GAAP operating margin compression YoY: non-GAAP operating margin fell to 7.4% from 9.5% a year ago; management noted margins Q1→Q2 likely flat-to-slightly down on higher Network mix .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$125.619	$121.750	$126.205
GAAP Diluted EPS ($)	$0.29	$(0.02)	$0.15
Non-GAAP Diluted EPS ($)	$0.47	$0.38	$0.33
GAAP Gross Margin (%)	45.6%	42.7%	44.1%
Non-GAAP Gross Margin (%)	46.2%	43.4%	44.8%
GAAP Operating Margin (%)	6.8%	(1.2%)	3.6%
Non-GAAP Operating Margin (%)	10.9%	7.6%	7.4%
EBITDA ($USD Millions)	$17.490	$7.317	$13.571
Adjusted EBITDA ($USD Millions)	$21.860	$16.861	$17.389

Segment breakdown by service line ($USD Thousands):

Service Line	Q3 2024	Q4 2024	Q1 2025
Injection Molding	$46,831	$45,641	$48,723
CNC Machining	$53,327	$52,389	$52,843
3D Printing	$21,437	$19,467	$20,194
Sheet Metal	$3,743	$4,047	$4,211
Other Revenue	$281	$206	$234
Total Revenue	$125,619	$121,750	$126,205

KPIs and Network:

KPI	Q3 2024	Q4 2024	Q1 2025
Protolabs Network Revenue ($USD Millions)	$25.3	$26.5	$26.3
Customer Contacts (count)	22,511	21,558	21,627
Revenue per Customer Contact ($)	$5,580	$5,648	$5,836

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	Q1 2025	$120–$128	N/A	Maintained (as of Feb)
GAAP Diluted EPS ($)	Q1 2025	$0.08–$0.16	N/A	Maintained (as of Feb)
Non-GAAP Diluted EPS ($)	Q1 2025	$0.26–$0.34	N/A	Maintained (as of Feb)
Revenue ($USD Millions)	Q2 2025	N/A	$124–$132	New
GAAP Diluted EPS ($)	Q2 2025	N/A	$0.11–$0.19	New
Non-GAAP Diluted EPS ($)	Q2 2025	N/A	$0.30–$0.38	New
Non-GAAP Tax Rate (%)	Q2 2025	N/A	25–27	New
FX impact on revenue ($USD)	Q2 2025	N/A	+$0.3M favorable	New

Earnings Call Themes & Trends

Topic	Q3 2024 (Q-2)	Q4 2024 (Q-1)	Q1 2025 (Current)	Trend
AI/Technology (pricing/sourcing)	Network margins above range on AI pricing; Network +11% YoY; continuous algorithm improvements	Focus on automation and AI-enabled pricing to improve margins; factory automation investments	AI-driven pricing/routing; adaptable fulfillment amid tariffs; continued algorithmic enhancements	Improving profitability via AI
Supply Chain/Tariffs/Macro	Operational reshaping: Germany closures to optimize footprint; macro manufacturing contraction	Prepared for global trade policy developments; resilient footprint	Tariffs seen as growth opportunity; 90% of Americas revenue fulfilled in Americas; minimal raw material cost headwinds	From risk to potential tailwind
Product performance (services)	IM -10% YoY; CNC flat; 3DP -1%; Sheet Metal -13%	IM down YoY; production outgrowing prototyping overall	CNC +6% YoY; IM -7% YoY (nonrecurring prior-year orders); 3DP -6% YoY; Sheet Metal +19% YoY	Mixed with CNC and Sheet Metal strength
Regional trends	US -4.2% YoY; Europe -2.7% YoY (GAAP)	US -2.2% YoY; Europe -4.1% YoY (GAAP)	US -1.2% YoY; Europe flat CC, small FX tailwind	Slight improvement
Production strategy	Early innings: <5% customers using combined offer; production wins in medical/clean energy	Production 1/3 of revenue; customers using combined offer grew 50%	Production revenue exceeded expectations; combined offer customers +45% TTM; marketing traction	Accelerating adoption
Network margins	35% in Q3; above guided range	~32% in Q4; down on factory volume decline	“A little over 31%” in Q1; expected flat-to-down margins Q1→Q2 on higher Network mix	Slight pressure from mix
R&D/Capabilities	Inspection and quality enabling higher-value orders	Expanded production certifications/automation; end-to-end program management	Further investments in capabilities and marketing; aerospace/defense examples	Building production moat

Management Commentary

“We started the year strong, delivering revenue of $126 million, near the upper end of our guidance range... Profitability was solid as well, with earnings per share of $0.33... We also delivered sequential gross margin expansion and strong free cash flow.” — Rob Bodor, CEO .
“Our pricing models... and routing platforms are highly adaptable and driven by artificial intelligence... we consistently generate strong free cash flow...” — Rob Bodor .
“First quarter consolidated non-GAAP gross margin increased 140 basis points sequentially to 44.8%, mainly due to higher volume and margin improvements on the factory side.” — Dan Schumacher, CFO .
“We continued to return capital to shareholders during the quarter by repurchasing $20.9 million of common stock.” — Dan Schumacher .
“As the tariff landscape evolves, we believe we are well positioned... through our geographically diverse factory and network fulfillment model.” — Rob Bodor .

Q&A Highlights

Gross margin sustainability: sequential improvement driven by factory volume; guidance implies flat-to-slightly down margins into Q2 due to higher Network mix .
Network margin disclosure: “a little over 31%” in Q1; adaptable sourcing mitigated tariff impacts .
Seasonality and demand: orders improved month-to-month into Q1; normal Q2 seasonality expected; April reflected higher Network proportion .
Tariffs/materials: robust raw material supply chain with no substantial cost increases; diversified global operations support reshoring demand .
3D Printing headwinds: prototyping-oriented service pressured by fewer new product launches amid macro; production use cases in metals additive remain attractive (e.g., aerospace/space) .

Estimates Context

Metric	Consensus (Q1 2025)	Actual (Q1 2025)	Surprise
Revenue ($USD)	$123,710,200*	$126,205,000*	+$2,494,800*
Primary EPS ($)	$0.292*	$0.33*	+$0.038*
EBITDA ($USD)	$16,468,500*	$13,186,000*	−$3,282,500*
# of EPS Estimates	5*	—	—
# of Revenue Estimates	5*	—	—

Values retrieved from S&P Global.
Bolded implications: Revenue and EPS beats; EBITDA miss.
Note: Reported EBITDA from company press release was $13.57M ; S&P’s “actual” reflects their standardized figure.

Key Takeaways for Investors

Q1 print was broadly solid with revenue and non-GAAP EPS near the top of guidance and beats vs consensus; EBITDA miss stems from higher OpEx and Network mix — watch mix shift’s margin impact into Q2 .
Production-led strategy is gaining traction (combined offer adoption, revenue per customer rising); this is the core driver for returning to YoY revenue growth in H2, per management .
Guidance implies modest YoY revenue growth at the midpoint in Q2 and flat-to-down margins; monitor Network share, factory volume, and execution on marketing-driven demand generation .
Cash generation remains a support for shareholders ($18.4M CFO in Q1; $20.9M repurchases); balance sheet carries no debt, enabling continued investment and buybacks .
Tariff/supply chain shifts may be a tailwind given PRLB’s diversified fulfillment and automation; management positioning could catalyze U.S. reshoring demand .
Near-term trading: positive reaction possible on revenue/EPS beat and confident production narrative; risk is margin pressure from higher Network mix and macro sensitivity in prototyping (3DP, IM) .
Medium-term thesis: if production growth continues, margin profile can improve via factory automation and AI pricing; sustained share repurchases add support to EPS growth .

Proto Labs Inc (PRLB)·Q1 2025 Earnings Summary