Adjustments for Non-Cash Items (USD, thousands)

Stock-Based Compensation (USD, thousands)

Changes in Working Capital (USD, thousands)

Capital Expenditures (CapEx) (USD, thousands)

Proceeds from / Repayments of Debt (USD, thousands)

Share Repurchases (USD, thousands)

Dividend Payments (USD, thousands)

Net Change in Cash (USD, thousands)

2869af50ba8789ebbf2b90d6e6733d9b848fe860690832a3608083b42af6cfb8

945f982719f31328db87a52d31f48f87ea614c46200d94569a0ae095d8faf780

de05e4404e4a617d482a48ebadf0c1475017034c205d67e2ccb7dec00c07216c

| Name              | Position                                                                 | Start Date       | Short Bio                                                                                                                                                                                                                     |
|-------------------|--------------------------------------------------------------------------|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Robert Bodor      | President, Chief Executive Officer, and Director                        | **March 1, 2021**| Robert Bodor has served as President, CEO, and Director since March 2021. He previously held roles such as VP/GM - Americas (2015–2021), CTO (2013–2015), and Director of Business Development (2012–2013).  **[0001628280-24-016026_prlb-20240412.htm:23]** **[0001628280-24-005285_prlb-20231231.htm:16]** **[0001437749-23-003930_prlb20221231_10k.htm:17]** **[0001140361-23-016078_ny20005821x1_def14a.htm:24]**        |
| Daniel Schumacher | Chief Financial Officer                                                 | **June 3, 2022** | Daniel Schumacher has been CFO since June 2022. He was Interim CFO from December 2021 and VP of Investor Relations and FP&A (2017–2021). He also held finance roles at Stratasys and Rockwell Automation.  **[0001628280-24-005285_prlb-20231231.htm:16]** **[0001437749-23-003930_prlb20221231_10k.htm:18]**              |
| Oleg Ryaboy       | Chief Technology Officer                                                | **September 9, 2022** | Oleg Ryaboy has been CTO since September 2022. Before joining Proto Labs, he was CTO and SVP at Digital River (2015–2022) and VP of Software Development and Architecture (2011–2015).  **[0001140361-23-016078_ny20005821x1_def14a.htm:51]** **[0001628280-24-005285_prlb-20231231.htm:16]** **[0001437749-23-003930_prlb20221231_10k.htm:18]**                               |
| Michael R. Kenison| Vice President/General Manager - Americas                               | **June 2021**    | Michael R. Kenison has served as VP/GM - Americas since June 2021. He was previously VP of Manufacturing (2013–2021) and held leadership roles at Cardiac Science, Inc..  **[0001628280-24-005285_prlb-20231231.htm:16]** **[0001437749-23-003930_prlb20221231_10k.htm:18]**                                                |
| Bjoern Klaas      | Vice President/General Manager and Managing Director - EMEA             | **December 2017**| Bjoern Klaas has been VP/GM and Managing Director - EMEA since December 2017. He previously worked at PolyOne (2012–2017) as VP/GM for its ColorMatrix Group and at Colorant-Chromatics (2008–2012) as GM.  **[0001628280-24-005285_prlb-20231231.htm:16]** **[0001437749-23-003930_prlb20221231_10k.htm:18]**              |

1bb136546378a40c1ad3c53576e4892d2d4be42854add02531ae0bcf82f09e43

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

1. Given the deceleration in Network growth to 11% year-over-year in Q3 2024 from over 80% in Q3 2023, how do you plan to re-accelerate growth in the Network business, especially considering the ongoing contraction in manufacturing?  **[PRLB_3405447_6]** **[PRLB_3405447_10]** 

2. With the closure of your prototype Injection Molding facility in Germany and discontinuation of DMLS services in Europe, how will these actions impact your European revenue and customer relationships, and what specific measures are you taking to mitigate potential revenue loss?  **[PRLB_3405447_10]** **[PRLB_3405447_2]** **[PRLB_3405447_15]** 

3. Your gross margins have improved partly due to favorable market conditions with excess capacity in manufacturing; how sustainable are these margin improvements if market conditions tighten, and what strategic initiatives are in place to maintain margins in a more competitive environment?  **[PRLB_3405447_14]** **[PRLB_3405447_6]** 

4. Despite efforts to increase revenue per customer, third quarter revenue per customer contact declined 1% year-over-year due to a decline in Injection Molding revenue; what are the underlying causes of this decline, and how do you plan to reverse it to drive growth?  **[PRLB_3405447_4]** 

5. With the continued headwinds in your Sheet Metal service, which declined 13% year-over-year and has not grown for several quarters, what strategic decisions are you considering for this segment, and is there potential to integrate it into the Network model similar to actions taken with other services?  **[PRLB_3405447_12]** **[PRLB_3405447_4]** 

d9c87ccb7b6152cf9326b0248195a23999dccbfde70be0c8466b33184f18954c

Unique Product Developers and Engineers

Unique Customer Contacts

d7e8ecc42aadfba6e426e261c2d0b842443634d82762b77b3ee06b09b240eac7

| Program Details          | Program 1              |
|--------------------------|------------------------|
| **Approval Date**        | February 7, 2023  **[0001628280-24-046196_prlb-20240930.htm:38]**   |
| **End Date/Duration**    | Not explicitly stated  **[0001628280-24-046196_prlb-20240930.htm:38]**  |
| **Total Additional Amount** | $50 million  **[0001628280-24-046196_prlb-20240930.htm:38]**        |
| **Remaining Authorization** | $42.5 million (as of 2024-09-30)  **[0001628280-24-046196_prlb-20240930.htm:38]**  |
| **Details**              | Increased total authorization to $250 million  **[0001628280-24-046196_prlb-20240930.htm:38]**  |

2d0a7ed72dc11e25593f051a31a231d9366fa0bed5cc97897ea50f09d491a095

Proto Labs, Inc. (PRLB) is a leading digital manufacturer specializing in custom prototypes and on-demand production parts. The company leverages advanced manufacturing technologies, including injection molding, CNC machining, 3D printing, and sheet metal fabrication, to produce high-quality plastic, metal, and liquid silicone rubber parts. PRLB serves a diverse customer base of product developers, engineers, and supply chain professionals, offering fast and efficient solutions for bringing new ideas to market.  **[0001628280-24-005285_prlb-20231231.htm:50]** **[0001628280-24-005285_prlb-20231231.htm:43]** 

1. **Injection Molding** - Manufactures custom plastic, metal, and liquid silicone rubber parts using advanced injection molding processes to deliver high-quality prototypes and production parts.  **[0001628280-24-005285_prlb-20231231.htm:50]** **[0001628280-24-005285_prlb-20231231.htm:43]**   
2. **CNC Machining** - Produces precision-machined parts from a variety of materials, offering rapid turnaround for both prototypes and low-volume production.  **[0001628280-24-005285_prlb-20231231.htm:50]** **[0001628280-24-005285_prlb-20231231.htm:43]**   
3. **3D Printing** - Provides additive manufacturing services for creating complex and detailed parts using a range of 3D printing technologies and materials.  **[0001628280-24-005285_prlb-20231231.htm:50]** **[0001628280-24-005285_prlb-20231231.htm:43]**   
4. **Sheet Metal** - Fabricates custom sheet metal parts for prototypes and low-volume production, supporting a variety of applications and industries.  **[0001628280-24-005285_prlb-20231231.htm:50]** **[0001628280-24-005285_prlb-20231231.htm:43]**   
5. **Other Revenue** - Includes additional services and offerings that complement the core manufacturing processes.  **[0001628280-24-005285_prlb-20231231.htm:50]**

dd42ff4004d4377661cd1c8cb2a3d42764e070e16973c290111f77c770081208

Injection Molding

CNC Machining

3D Printing

Sheet Metal

Other Revenue

Total Revenue

1aac242d223bef7f653ae86ed3aa91ff731690866cea2c2a950a2fefff156731

### Q3 2024 Earnings Call
- **Issued Period:** Q3 2024  
- **Guided Period:** Q4 2024  
- **Guidance:**
  1. **Non-GAAP EPS:** Expected to be between **$0.28 and $0.36**.  **[PRLB_3405447_5]** 
  2. **Revenue:** Expected to be between **$115 million and $123 million**.  **[PRLB_3405447_4]** 
  3. **Non-GAAP Effective Tax Rate:** Estimated at **20% plus 50 basis points**.  **[PRLB_3405447_5]** 
  4. **Non-GAAP Add-backs:**
     - Stock-based compensation expense of approximately **$4.4 million**.  **[PRLB_3405447_5]** 
     - Germany closure expenses of **$4 million**.  **[PRLB_3405447_5]** 
     - Amortization expense of **$900,000**.  **[PRLB_3405447_5]** 
  5. **Foreign Currency Impact:** Expected to add approximately **$1 million** favorable impact on revenue compared to Q4 2023.  **[PRLB_3405447_4]** 

---

### Q2 2024 Earnings Call
- **Issued Period:** Q2 2024  
- **Guided Period:** Q3 2024  
- **Guidance:**
  1. **Revenue:** Expected to be between **$117 million and $125 million**.  **[PRLB_3396183_5]** 
  2. **Foreign Currency Impact:** Anticipated to have a **$200,000 favorable impact** on revenue compared to Q3 2023.  **[PRLB_3396183_5]** 
  3. **Non-GAAP EPS:** Expected to be between **$0.29 and $0.37**.  **[PRLB_3396183_5]** 
  4. **One-Time Costs:** Expected to incur **$500,000** of one-time costs associated with a reorganization.  **[PRLB_3396183_5]** 
  5. **Non-GAAP Add-Backs:**
     - Stock-based compensation expense of approximately **$4.4 million**.  **[PRLB_3396183_5]** 
     - Amortization expense of **$900,000**.  **[PRLB_3396183_5]** 
  6. **Non-GAAP Effective Tax Rate:** Estimated to be between **22% and 23%**.  **[PRLB_3396183_5]** 

---

### Q1 2024 Earnings Call
- **Issued Period:** Q1 2024  
- **Guided Period:** Q2 2024  
- **Guidance:**
  1. **Revenue:** Expected to be between **$122 million and $130 million**.  **[PRLB_3382605_3]** 
  2. **Non-GAAP EPS:** Expected to be between **$0.30 and $0.38**.  **[PRLB_3382605_4]** 
  3. **Non-GAAP Addbacks:**
     - Stock-based compensation expense of approximately **$4.5 million**.  **[PRLB_3382605_4]** 
     - Amortization expense of **$1 million**.  **[PRLB_3382605_4]** 
  4. **Non-GAAP Effective Tax Rate:** Estimated to be **24%**, plus or minus 50 basis points.  **[PRLB_3382605_4]** 

---

### Q4 2023 Earnings Call
- **Issued Period:** Q4 2023  
- **Guided Period:** Q1 2024  
- **Guidance:**
  1. **Revenue:** Expected to be between **$120 million and $128 million**.  **[PRLB_3372814_4]** 
  2. **Foreign Currency Impact on Revenue:** Anticipated to have a favorable impact of **$500,000 to $1 million** compared to Q1 2023.  **[PRLB_3372814_4]** 
  3. **Non-GAAP EPS:** Expected to be between **$0.26 and $0.34**.  **[PRLB_3372814_5]** 
  4. **Stock-Based Compensation Expense:** Estimated at approximately **$4.5 million**.  **[PRLB_3372814_4]** 
  5. **Amortization Expense:** Estimated at **$1 million**.  **[PRLB_3372814_4]** 
  6. **Non-GAAP Effective Tax Rate:** Estimated at **21%, plus or minus 50 basis points**.  **[PRLB_3372814_4]** 

3b5cd270db53bf76bdb02195e269b968ff0c6df4c23de08deddeedd4b786dc2e

- **Proto Labs serves over 53,000 customers, including 85% of the Fortune 500 companies in their target industries**, presenting significant opportunities to grow by expanding wallet share with existing clients.  **[PRLB_3372814_2]**
- **The company is experiencing strong growth in the U.S.**, with executives noting this is the strongest growth they've shown in the region for some time, driven by successful implementation of their strategy and gaining traction with customers.  **[PRLB_3372814_10]**
- **Proto Labs is improving gross margins through increased automation and AI-enabled pricing algorithms**, deploying more robotics in their factories and enhancing productivity, which is expected to drive continued profitability improvements.  **[PRLB_3372814_5]**

b7b978736f93ae455f4d8dc9265682249567fce9ef91a104ae4400036c36db92

- **Order rates have not picked up in October, and the market remains uneven, which may impact future revenue.**  **[PRLB_3405447_15]**
- **Closure of European facilities, including the prototype injection molding facility and discontinuation of DMLS manufacturing, will result in lost revenue.**  **[PRLB_3405447_12]**
- **Gross margins are expected to decline in Q4 due to seasonal inefficiencies and use of contractors, potentially affecting profitability.**  **[PRLB_3405447_6]**

a1ddd31559c5bdb1078e37e3b4093bbd1654ecfa5bfcf1a12b419af460a5dbde

- **Expected decline in profitability in Q1 2024 due to lower volumes, lower margins, and higher operating expenses.**  **[PRLB_3372814_15]** **[PRLB_3372814_12]**
- **Demand softness observed in late December and early January may indicate weakening future performance.**  **[PRLB_3372814_8]** **[PRLB_3372814_9]**
- **Shift towards lower-margin network business could pressure overall profitability and margins in 2024.**  **[PRLB_3372814_15]** **[PRLB_3372814_12]** **[PRLB_3372814_13]**

4603ac2771f1147d269fec7de13d46894d6704d210a9dc5d5b805a66ca42aaf1

- **Softening in large orders, particularly in the U.S., with orders weakening in April, indicating potential revenue decline.**  **[PRLB_3382605_11]** **[PRLB_3382605_5]** **[PRLB_3382605_8]**
- **Less than 5% of customers are currently using full services, indicating challenges in cross-selling and expanding customer engagement.**  **[PRLB_3382605_9]** **[PRLB_3382605_10]**
- **Expected increase in operating expenses in Q2, and uncertainty about sustaining high gross margins due to lower volumes and macroeconomic factors, potentially impacting profitability.**  **[PRLB_3382605_6]** **[PRLB_3382605_13]** **[PRLB_3382605_7]**

5bdc8e853f848a040718baaac26b4ef5b1fa4ba29157ecf2585166e0dd35ac15

- **Proto Labs reported significant improvements in gross margins**, with Factory gross margin increasing to **49%** and Network gross margin rising to **35%**, demonstrating strong operational efficiency and profitability.  **[PRLB_3405447_10]** ,  **[PRLB_3405447_6]**
- **The company's strategic realignment is driving growth**, with increased customer adoption of their comprehensive services; currently, less than **5% of customers** use both Factory and Network services, indicating a large potential for future growth.  **[PRLB_3405447_7]** ,  **[PRLB_3405447_8]** ,  **[PRLB_3405447_13]**
- **Proto Labs is leveraging automation and AI-driven pricing algorithms** to enhance margins and efficiency, positioning the company well even in a challenging manufacturing environment.  **[PRLB_3405447_14]** ,  **[PRLB_3405447_10]** ,  **[PRLB_3405447_6]**

00f2cd546693bb15f514604cbdbc9409f332416b6d7749cf331d22637f9e7413

- Proto Labs demonstrated strong profitability in a challenging environment, with **non-GAAP earnings per share increasing by 25% in the first half of 2024** despite only 2% revenue growth, indicating effective cost management and operating leverage.  **[PRLB_3396183_11]**
- The company is financially robust, being **profitable, a strong cash generator, and carrying no debt**, positioning it well to capitalize on growth opportunities when the market improves.  **[PRLB_3396183_12]**
- Organizational changes focused on better serving customers and leveraging global capabilities are expected to **accelerate growth, increase margins, and drive meaningful revenue growth** over time.  **[PRLB_3396183_11]** ,  **[PRLB_3396183_6]**

c81082e9d3d12a795f55609d6f8cea110f347e3efe45c9036bb6e96f89175f84

1. **Gross Margin Outlook**  
   **Q:** Can you sustain higher gross margins into Q4?  
   **A:** Management reported that **gross margins improved** in both the Factory and the Network segments.  **[PRLB_3405447_6]**  Network gross margins are currently **above the 25%-30% range**, reaching **35%**.  **[PRLB_3405447_6]**  They expect to remain **above the range in Q4**, despite typical seasonal inefficiencies due to holidays.  **[PRLB_3405447_6]**  Factory improvements are due to added automation and better labor cost management.  **[PRLB_3405447_6]** 

2. **Network Growth Trends**  
   **Q:** Is Network growth expected to align with overall business growth?  
   **A:** The Network grew **11% year-over-year** in Q3, building upon a prior **80% growth** in the same quarter last year.  **[PRLB_3405447_6]**  Despite a challenging macro environment with manufacturing contraction, management is confident the Network will continue as a strong growth engine.  **[PRLB_3405447_6]** 

3. **Order Trends and Outlook**  
   **Q:** Has order activity improved since August?  
   **A:** After a **lower order rate** in June and July, there was a pickup exceeding normal seasonality in August and September.  **[PRLB_3405447_9]**  This uplift was from a low base, and October has not shown further improvement.  **[PRLB_3405447_9]** **[PRLB_3405447_13]**  The guidance reflects a typical decline from Q3 to Q4.  **[PRLB_3405447_9]** 

4. **Impact of Organizational Realignment**  
   **Q:** Did the realignment boost performance?  
   **A:** The new global structure allows focus on regional customers and reduces redundancies.  **[PRLB_3405447_10]**  Management believes this helped exceed expectations in Q3 and expects continued benefits for growth and profitability.  **[PRLB_3405447_10]** **[PRLB_3405447_13]** 

5. **Closure of German Facilities**  
   **Q:** What's the impact of closing the German facility?  
   **A:** The company is phasing out DMLS fulfillment from Germany, shifting to North Carolina and network partners.  **[PRLB_3405447_11]**  They're closing the precision injection molding facility, which may reduce some revenue but is expected to improve gross margins.  **[PRLB_3405447_12]**  The impact on OpEx is minimal since the savings are chiefly in cost of goods sold.  **[PRLB_3405447_12]** 

6. **Adoption of Comprehensive Offerings**  
   **Q:** How is adoption of blended services progressing?  
   **A:** Adoption is in early stages, with **less than 5%** of customers using both services.  **[PRLB_3405447_7]**  Management sees significant growth opportunity and is pleased with current adoption rates.  **[PRLB_3405447_7]** 

7. **Traction in High-Volume Orders**  
   **Q:** Are higher volume orders increasing revenue per customer?  
   **A:** Enhanced inspection capabilities and production services have led to growth in high-volume orders.  **[PRLB_3405447_8]**  This has driven average revenue per customer to what's believed to be the **highest in the industry**, with continued growth expected.  **[PRLB_3405447_8]** 

8. **Potential Shift of Sheet Metal Service**  
   **Q:** Will you shift Sheet Metal to Network fulfillment?  
   **A:** Sheet Metal is the smallest service and has faced headwinds, especially in the computer electronics segment.  **[PRLB_3405447_13]**  They have rightsized the business and are considering options enabled by the new global structure, including possible changes in fulfillment.  **[PRLB_3405447_13]** 

9. **Network Gross Margin Improvement**  
   **Q:** How are you improving Network gross margins?  
   **A:** Higher margins are due to refined pricing algorithms launched 1.5 years ago and continued incremental improvements.  **[PRLB_3405447_14]**  Excess manufacturing capacity in the market also contributes, allowing competitive pricing with strong close rates.  **[PRLB_3405447_14]** 

fcde8526767d634649aecf79295ea8cae6474b8336a213bd74dd11d52a2feb9e

- **Proto Labs is experiencing a decline in customer count**, with total customer count down due to macroeconomic pressures, and it's uncertain when this trend will reverse.  **[PRLB_3396183_8]**
- **The company is seeing slowing order rates**, with decreased activity in June and July, and expects lower volumes in August and September compared to last year, indicating ongoing demand weakness across most industries they serve.  **[PRLB_3396183_12]** **[PRLB_3396183_13]**
- **Key services like Sheet Metal have been declining every year since acquisition**, and 3D Printing has stagnated in recent quarters, while competitors are growing faster in areas like the Hubs business, suggesting potential structural issues in these segments.  **[PRLB_3396183_15]** **[PRLB_3396183_10]**

357a5ae785af8d4069856a5c34576c64f87f1acf0bfc6b54e93718315e4ecb80

Proto Labs Inc (PRLB)

Financials