Financial News

Protolabs Reports Financial Results for the Third Quarter of 2023

Record Revenue of $130.7 million in the Third Quarter

Record Network Revenue of $22.6 million; an 87% YoY increase

GAAP Earnings Per Share of $0.31; Non-GAAP Earnings Per Share of $0.51

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, 2023.

Third Quarter 2023 Highlights:

  • Revenue for the third quarter of 2023 was a record $130.7 million, representing a 7.4% increase over the third quarter of 2022.
  • Revenue generated from the digital network, powered by Hubs, was $22.6 million in the third quarter, representing growth of 86.9% over the third quarter of the prior year.
  • Net income for the third quarter of 2023 was $8.0 million, or $0.31 per diluted share.
  • Non-GAAP net income was $13.2 million, or $0.51 per diluted share. See “Non-GAAP Financial Measures” below.

"Protolabs produced third quarter financial results that surpassed our expectations on the top and bottom line. We generated record revenue, improved profitability, generated substantial cash flow, and returned capital to shareholders." said Rob Bodor, President and Chief Executive Officer. "This excellent financial performance demonstrates the success of our strategy; Protolabs' unique hybrid model combining the digital factory and the digital network is the best way to grow profitably in our industry. We experienced increased demand for our comprehensive digitally-enabled manufacturing capabilities in the quarter. The model is winning and customers are delighted."

Additional Third Quarter 2023 Highlights:

  • Protolabs served 23,080 unique product developers during the quarter.
  • Gross margin was 45.4% in the third quarter of 2023, up sequentially from 43.4% in the second quarter of 2023.
  • Non-GAAP gross margin was 46.0% in the third quarter of 2023, representing a sequential increase of 190 basis points. See “Non-GAAP Financial Measures” below.
  • EBITDA was $19.5 million, or 14.9% of revenue, in the third quarter of 2023, compared to $11.4 million, or 9.3% of revenue, in the second quarter of 2023. See “Non-GAAP Financial Measures” below.
  • Adjusted EBITDA was $23.9 million, or 18.3% of revenue, in the third quarter of 2023, compared to $19.2 million, or 15.7% of revenue, in the second quarter of 2023. See “Non-GAAP Financial Measures” below.
  • Cash flow from operations was $24.2 million in the third quarter of 2023, compared to $9.3 million in the second quarter of 2023.
  • The Company repurchased $9.0 million of shares during the quarter.
  • Cash and investments balance was $114.9 million as of September 30, 2023.

"Along with record revenue in the third quarter, we made substantial progress on our priority to improve profitability in both the digital factory and the digital network," said Dan Schumacher, Chief Financial Officer. "Through a challenging macro environment, Protolabs has demonstrated the industry-leading earnings power and cash flow generation of our business model, enabling us to continue to invest in future growth and return capital to shareholders."

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 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, 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 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 third quarter 2023 financial results and fourth quarter 2023 outlook today, November 3, 2023 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/ic4eziw6. 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 our digital network of manufacturing partners powered by Hubs unlocks advanced capabilities and volume pricing at higher quantities. 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,

2023

 

December 31,

2022

 

(Unaudited)

 

 

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

83,496

 

$

56,558

Short-term marketable securities

 

19,204

 

 

23,568

Accounts receivable, net

 

78,395

 

 

76,225

Inventory

 

13,803

 

 

13,578

Income taxes receivable

 

891

 

 

4,042

Prepaid expenses and other current assets

 

8,722

 

 

12,597

Total current assets

 

204,511

 

 

186,568

 

 

 

 

Property and equipment, net

 

243,022

 

 

257,785

Goodwill

 

273,991

 

 

273,991

Other intangible assets, net

 

26,668

 

 

31,250

Long-term marketable securities

 

12,212

 

 

26,419

Operating lease assets

 

2,737

 

 

3,844

Finance lease assets

 

16,763

 

 

17,532

Other long-term assets

 

4,341

 

 

4,779

Total assets

$

784,245

 

$

802,168

 

 

 

 

Liabilities and shareholders' equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

17,922

 

$

17,356

Accrued compensation

 

16,337

 

 

12,743

Accrued liabilities and other

 

21,027

 

 

22,384

Current operating lease liabilities

 

1,568

 

 

1,561

Current finance lease liabilities

 

16,630

 

 

17,537

Income taxes payable

 

1,144

 

 

Total current liabilities

 

74,628

 

 

71,581

 

 

 

 

Long-term operating lease liabilities

 

1,545

 

 

2,255

Long-term finance lease liabilities

 

671

 

 

Long-term deferred tax liabilities

 

17,138

 

 

26,322

Other long-term liabilities

 

5,341

 

 

4,362

 

 

 

 

Shareholders' equity

 

684,922

 

 

697,648

Total liabilities and shareholders' equity

$

784,245

 

$

802,168

 

 

 

 

 

 

 

 

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,

 

 

2023

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue

 

 

 

 

 

 

 

Injection Molding

$

51,688

 

$

48,940

 

 

$

152,455

 

 

$

155,693

 

CNC Machining

 

52,916

 

 

47,489

 

 

 

149,317

 

 

 

141,809

 

3D Printing

 

21,622

 

 

19,823

 

 

 

63,952

 

 

 

59,458

 

Sheet Metal

 

4,291

 

 

5,219

 

 

 

12,478

 

 

 

15,066

 

Other Revenue

 

188

 

 

250

 

 

 

627

 

 

 

765

 

Total Revenue

 

130,705

 

 

121,721

 

 

 

378,829

 

 

 

372,791

 

 

 

 

 

 

 

 

 

Cost of revenue

 

71,423

 

 

68,089

 

 

 

212,648

 

 

 

205,933

 

Gross profit

 

59,282

 

 

53,632

 

 

 

166,181

 

 

 

166,858

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

Marketing and sales

 

21,682

 

 

20,594

 

 

 

65,863

 

 

 

62,235

 

Research and development

 

10,105

 

 

9,309

 

 

 

30,647

 

 

 

29,316

 

General and administrative

 

17,058

 

 

16,477

 

 

 

49,713

 

 

 

49,770

 

Closure of Japan business

 

22

 

 

1,194

 

 

 

186

 

 

 

6,388

 

Total operating expenses

 

48,867

 

 

47,574

 

 

 

146,409

 

 

 

147,709

 

Income from operations

 

10,415

 

 

6,058

 

 

 

19,772

 

 

 

19,149

 

Other income (loss), net

 

320

 

 

(24

)

 

 

(1,758

)

 

 

(323

)

Income before income taxes

 

10,735

 

 

6,034

 

 

 

18,014

 

 

 

18,826

 

Provision for income taxes

 

2,781

 

 

2,083

 

 

 

7,784

 

 

 

7,223

 

Net income

$

7,954

 

$

3,951

 

 

$

10,230

 

 

$

11,603

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

Basic

$

0.31

 

$

0.14

 

 

$

0.39

 

 

$

0.42

 

Diluted

$

0.31

 

$

0.14

 

 

$

0.39

 

 

$

0.42

 

 

 

 

 

 

 

 

 

Shares used to compute net income per share:

 

 

 

 

 

 

 

Basic

 

26,023,830

 

 

27,505,097

 

 

 

26,296,304

 

 

 

27,512,057

 

Diluted

 

26,028,456

 

 

27,508,217

 

 

 

26,327,606

 

 

 

27,522,734

 

 

 

 

 

 

 

 

 

Proto Labs, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

 

 

 

Nine Months Ended

September 30,

 

 

2023

 

 

 

2022

 

Operating activities

 

 

 

Net income

$

10,230

 

 

$

11,603

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

28,213

 

 

 

29,981

 

Stock-based compensation expense

 

11,811

 

 

 

13,335

 

Deferred taxes

 

(9,197

)

 

 

(8,920

)

Interest on finance lease obligations

 

859

 

 

 

-

 

Loss on foreign currency translation

 

3,906

 

 

 

-

 

Impairments related to closure of Japan business

 

-

 

 

 

2,842

 

Gain on disposal of property and equipment

 

(498

)

 

 

(1,174

)

Other

 

122

 

 

 

11

 

Changes in operating assets and liabilities:

 

10,600

 

 

 

3,886

 

Net cash provided by operating activities

 

56,046

 

 

 

51,564

 

 

 

 

 

Investing activities

 

 

 

Purchases of property, equipment and other capital assets

 

(9,935

)

 

 

(16,414

)

Proceeds from sales of property, equipment and other capital assets

 

693

 

 

 

3,227

 

Purchases of marketable securities

 

-

 

 

 

(45,872

)

Proceeds from sales of marketable securities

 

-

 

 

 

1,998

 

Proceeds from call redemptions and maturities of marketable securities

 

19,115

 

 

 

13,696

 

Net cash provided by (used in) investing activities

 

9,873

 

 

 

(43,365

)

 

 

 

 

Financing activities

 

 

 

Proceeds from exercises of stock options

 

1,986

 

 

 

2,311

 

Purchases of shares withheld for tax obligations

 

(1,436

)

 

 

(1,615

)

Repurchases of common stock

 

(39,053

)

 

 

(13,074

)

Principal repayments of finance lease obligations

 

(234

)

 

 

(417

)

Net cash used in financing activities

 

(38,737

)

 

 

(12,795

)

Effect of exchange rate changes on cash and cash equivalents

 

(244

)

 

 

(1,972

)

Net increase (decrease) in cash and cash equivalents

 

26,938

 

 

 

(6,568

)

Cash and cash equivalents, beginning of period

 

56,558

 

 

 

65,929

 

Cash and cash equivalents, end of period

$

83,496

 

 

$

59,361

 

 

 

 

 

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,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

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

$

7,954

 

 

$

3,951

 

 

$

10,230

 

 

$

11,603

 

Add back:

 

 

 

 

 

 

 

Stock-based compensation expense

 

4,441

 

 

 

4,907

 

 

 

11,811

 

 

 

13,335

 

Amortization expense

 

1,461

 

 

 

1,510

 

 

 

4,471

 

 

 

4,582

 

Unrealized (gain) loss on foreign currency

 

(29

)

 

 

382

 

 

 

86

 

 

 

742

 

Costs related to Japan closure activities

 

22

 

 

 

1,194

 

 

 

4,093

 

 

 

6,388

 

Total adjustments 1

 

5,895

 

 

 

7,993

 

 

 

20,461

 

 

 

25,047

 

Income tax benefits on adjustments 2

 

(633

)

 

 

(1,060

)

 

 

(931

)

 

 

(2,518

)

Non-GAAP net income

$

13,216

 

 

$

10,884

 

 

$

29,760

 

 

$

34,132

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income per share:

 

 

 

 

 

 

 

Basic

$

0.51

 

 

$

0.40

 

 

$

1.13

 

 

$

1.24

 

Diluted

$

0.51

 

 

$

0.40

 

 

$

1.13

 

 

$

1.24

 

 

 

 

 

 

 

 

 

Shares used to compute non-GAAP net income per share:

 

 

 

 

 

 

 

Basic

 

26,023,830

 

 

 

27,505,097

 

 

 

26,296,304

 

 

 

27,512,057

 

Diluted

 

26,028,456

 

 

 

27,508,217

 

 

 

26,327,606

 

 

 

27,522,734

 

 

 

 

 

 

 

 

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,

 

 

2023

 

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

Cost of revenue

$

805

 

 

$

902

 

$

2,416

 

$

2,701

 

 

 

 

 

 

 

 

Marketing and sales

 

961

 

 

 

929

 

 

2,508

 

 

2,479

Research and development

 

675

 

 

 

602

 

 

1,888

 

 

1,702

General and administrative

 

3,461

 

 

 

3,984

 

 

9,471

 

 

11,035

Closure of Japan business

 

22

 

 

 

1,194

 

 

186

 

 

6,388

Total operating expenses

 

5,119

 

 

 

6,709

 

 

14,053

 

 

21,604

 

 

 

 

 

 

 

 

Other income (loss), net

 

(29

)

 

 

382

 

 

3,992

 

 

742

Total adjustments

$

5,895

 

 

$

7,993

 

$

20,461

 

$

25,047

2

For the three and nine months ended September 30, 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

September 30,

 

Nine Months Ended

September 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue

$

130,705

 

 

$

121,721

 

 

$

378,829

 

 

$

372,791

 

Gross profit

 

59,282

 

 

 

53,632

 

 

 

166,181

 

 

 

166,858

 

GAAP gross margin

 

45.4

%

 

 

44.1

%

 

 

43.9

%

 

 

44.8

%

Add back:

 

 

 

 

 

 

 

Stock-based compensation expense

 

462

 

 

 

560

 

 

 

1,388

 

 

 

1,674

 

Amortization expense

 

343

 

 

 

342

 

 

 

1,028

 

 

 

1,027

 

Total adjustments

 

805

 

 

 

902

 

 

 

2,416

 

 

 

2,701

 

Non-GAAP gross profit

$

60,087

 

 

$

54,534

 

 

$

168,597

 

 

$

169,559

 

Non-GAAP gross margin

 

46.0

%

 

 

44.8

%

 

 

44.5

%

 

 

45.5

%

 

 

 

 

 

 

 

 

Proto Labs, Inc.

Reconciliation of GAAP to Non-GAAP Gross Margin Excluding Japan

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue

$

130,705

 

 

$

121,721

 

 

$

378,829

 

 

$

372,791

 

Revenue excluding Japan

$

130,705

 

 

$

120,434

 

 

$

378,829

 

 

$

364,562

 

Gross profit

 

59,282

 

 

 

53,632

 

 

 

166,181

 

 

 

166,858

 

GAAP gross margin

 

45.4

%

 

 

44.1

%

 

 

43.9

%

 

 

44.8

%

Less: Japan gross profit

 

-

 

 

 

47

 

 

 

-

 

 

 

3,150

 

Gross Profit excluding Japan

 

59,282

 

 

 

53,585

 

 

 

166,181

 

 

 

163,708

 

GAAP gross margin excluding Japan

 

45.4

%

 

 

44.5

%

 

 

43.9

%

 

 

44.9

%

Add back:

 

 

 

 

 

 

 

Stock-based compensation expense

 

462

 

 

 

560

 

 

 

1,388

 

 

 

1,674

 

Amortization expense

 

343

 

 

 

342

 

 

 

1,028

 

 

 

1,027

 

Less:

 

 

 

 

 

 

 

Japan stock-based compensation expense

 

-

 

 

 

13

 

 

 

-

 

 

 

61

 

Japan amortization expense

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total adjustments

 

805

 

 

 

889

 

 

 

2,416

 

 

 

2,640

 

Non-GAAP gross profit excluding Japan

$

60,087

 

 

$

54,474

 

 

$

168,597

 

 

$

166,348

 

Non-GAAP gross margin excluding Japan

 

46.0

%

 

 

45.2

%

 

 

44.5

%

 

 

45.6

%

 

 

 

 

 

 

 

 

Proto Labs, Inc.

Reconciliation of GAAP to Non-GAAP Operating Margin

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue

$

130,705

 

 

$

121,721

 

 

$

378,829

 

 

$

372,791

 

Income from operations

 

10,415

 

 

 

6,058

 

 

 

19,772

 

 

 

19,149

 

GAAP operating margin

 

8.0

%

 

 

5.0

%

 

 

5.2

%

 

 

5.1

%

Add back:

 

 

 

 

 

 

 

Stock-based compensation expense

 

4,441

 

 

 

4,907

 

 

 

11,811

 

 

 

13,335

 

Amortization expense

 

1,461

 

 

 

1,510

 

 

 

4,471

 

 

 

4,582

 

Costs related to Japan closure activities

 

22

 

 

 

1,194

 

 

 

186

 

 

 

6,388

 

Total adjustments

 

5,924

 

 

 

7,611

 

 

 

16,468

 

 

 

24,305

 

Non-GAAP income from operations

$

16,339

 

 

$

13,669

 

 

$

36,240

 

 

$

43,454

 

Non-GAAP operating margin

 

12.5

%

 

 

11.2

%

 

 

9.6

%

 

 

11.7

%

 

 

 

 

 

 

 

 

Proto Labs, Inc.

Reconciliation of GAAP to Non-GAAP Operating Margin Excluding Japan

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue

$

130,705

 

 

$

121,721

 

 

$

378,829

 

 

$

372,791

 

Revenue excluding Japan

$

130,705

 

 

$

120,434

 

 

$

378,829

 

 

$

364,562

 

Income from operations

 

10,415

 

 

 

6,058

 

 

 

19,772

 

 

 

19,149

 

GAAP operating margin

 

8.0

%

 

 

5.0

%

 

 

5.2

%

 

 

5.1

%

Less: Japan (loss) income from operations

 

(7

)

 

 

(724

)

 

 

(481

)

 

 

(720

)

Income from operations excluding Japan

 

10,422

 

 

 

6,782

 

 

 

20,253

 

 

 

19,869

 

GAAP operating margin excluding Japan

 

8.0

%

 

 

5.6

%

 

 

5.3

%

 

 

5.5

%

Add back:

 

 

 

 

 

 

 

Stock-based compensation expense

 

4,441

 

 

 

4,907

 

 

 

11,811

 

 

 

13,335

 

Amortization expense

 

1,461

 

 

 

1,510

 

 

 

4,471

 

 

 

4,582

 

Costs related to Japan closure activities

 

22

 

 

 

1,194

 

 

 

186

 

 

 

6,388

 

Less:

 

 

 

 

 

 

 

Japan stock-based compensation expense

 

-

 

 

 

89

 

 

 

17

 

 

 

386

 

Japan amortization expense

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total adjustments

 

5,924

 

 

 

7,522

 

 

 

16,451

 

 

 

23,919

 

Non-GAAP income from operations excluding Japan

$

16,346

 

 

$

14,304

 

 

$

36,704

 

 

$

43,788

 

Non-GAAP operating margin excluding Japan

 

12.5

%

 

 

11.9

%

 

 

9.7

%

 

 

12.0

%

 

 

 

 

 

 

 

 

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,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue

$

130,705

 

 

$

121,721

 

 

$

378,829

 

 

$

372,791

 

GAAP net income

 

7,954

 

 

 

3,951

 

 

 

10,230

 

 

 

11,603

 

GAAP net income margin

 

6.1

%

 

 

3.2

%

 

 

2.7

%

 

 

3.1

%

Add back:

 

 

 

 

 

 

 

Amortization expense

$

1,461

 

 

$

1,510

 

 

$

4,471

 

 

$

4,582

 

Depreciation expense

 

7,869

 

 

 

8,197

 

 

 

23,742

 

 

 

25,399

 

Interest income, net

 

(561

)

 

 

(265

)

 

 

(1,283

)

 

 

(459

)

Provision for income taxes

 

2,781

 

 

 

2,083

 

 

 

7,784

 

 

 

7,223

 

EBITDA

 

19,504

 

 

 

15,476

 

 

 

44,944

 

 

 

48,348

 

EBITDA Margin

 

14.9

%

 

 

12.7

%

 

 

11.9

%

 

 

13.0

%

Add back:

 

 

 

 

 

 

 

Stock-based compensation expense

 

4,441

 

 

 

4,907

 

 

 

11,811

 

 

 

13,335

 

Unrealized (gain) loss on foreign currency

 

(29

)

 

 

382

 

 

 

86

 

 

 

742

 

Costs related to Japan closure activities

 

22

 

 

 

1,194

 

 

 

4,093

 

 

 

6,388

 

Total adjustments

 

4,434

 

 

 

6,483

 

 

 

15,990

 

 

 

20,465

 

Adjusted EBITDA

$

23,938

 

 

$

21,959

 

 

$

60,934

 

 

$

68,813

 

Adjusted EBITDA Margin

 

18.3

%

 

 

18.0

%

 

 

16.1

%

 

 

18.5

%

 

 

 

 

 

 

 

 

Proto Labs, Inc.

Comparison of GAAP to Non-GAAP Revenue Growth by Region

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

September 30, 2023

 

Three Months Ended

September 30, 2022

 

%

Change2

 

% Change

Organic3

 

GAAP

 

Foreign

Currency1

 

Non-GAAP

 

GAAP

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

United States

$

103,940

 

$

-

 

 

$

103,940

 

$

98,970

 

5.0

%

 

5.0

%

Europe

 

26,765

 

 

(1,666

)

 

 

25,099

 

 

21,464

 

24.7

%

 

16.9

%

Japan

 

-

 

 

-

 

 

 

-

 

 

1,287

 

(100.0

%)

 

(100.0

%)

Total revenue

$

130,705

 

$

(1,666

)

 

$

129,039

 

$

121,721

 

7.4

%

 

6.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

September 30, 2023

 

Nine Months Ended

September 30, 2022

 

%

Change2

 

% Change

Organic3

 

GAAP

 

Foreign

Currency1

 

Non-GAAP

 

GAAP

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

United States

$

298,007

 

$

-

 

$

298,007

 

$

295,121

 

1.0

%

 

1.0

%

Europe

 

80,822

 

 

1,311

 

 

82,133

 

 

69,441

 

16.4

%

 

18.3

%

Japan

 

-

 

 

-

 

 

-

 

 

8,229

 

(100.0

%)

 

(100.0

%)

Total revenue

$

378,829

 

$

1,311

 

$

380,140

 

$

372,791

 

1.6

%

 

2.0

%

 

 

 

 

 

 

 

 

 

 

 

 

1

Revenue for the three and nine months ended September 30, 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 nine months ended September 30, 2022 to GAAP revenue for the three and nine months ended September 30, 2023.

 

3

This column presents the percentage change from GAAP revenue for the three and nine months ended September 30, 2022 to non-GAAP revenue for the three and nine months ended September 30, 2023 (as recalculated using the foreign currency exchange rates in effect during the three and nine months ended September 30, 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

September 30, 2023

 

Three Months Ended

September 30, 2022

 

%

Change2

 

% Change

Organic3

 

GAAP

 

Foreign

Currency1

 

Non-GAAP

 

GAAP

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

Injection Molding

$

51,688

 

$

(655

)

 

$

51,033

 

$

48,940

 

5.6

%

 

4.3

%

CNC Machining

 

52,916

 

 

(708

)

 

 

52,208

 

 

47,489

 

11.4

 

 

9.9

 

3D Printing

 

21,622

 

 

(390

)

 

 

21,232

 

 

19,823

 

9.1

 

 

7.1

 

Sheet Metal

 

4,291

 

 

(20

)

 

 

4,271

 

 

5,219

 

(17.8

)

 

(18.2

)

Other Revenue

 

188

 

 

107

 

 

 

295

 

 

250

 

(24.8

)

 

18.0

 

Total Revenue

$

130,705

 

$

(1,666

)

 

$

129,039

 

$

121,721

 

7.4

%

 

6.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

September 30, 2023

 

Nine Months Ended

September 30, 2022

 

%

Change2

 

% Change

Organic3

 

GAAP

 

Foreign

Currency1

 

Non-GAAP

 

GAAP

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

Injection Molding

$

152,455

 

$

781

 

 

$

153,236

 

$

155,693

 

(2.1

)%

 

(1.6

)%

CNC Machining

 

149,317

 

 

152

 

 

 

149,469

 

 

141,809

 

5.3

 

 

5.4

 

3D Printing

 

63,952

 

 

277

 

 

 

64,229

 

 

59,458

 

7.6

 

 

8.0

 

Sheet Metal

 

12,478

 

 

(9

)

 

 

12,469

 

 

15,066

 

(17.2

)

 

(17.2

)

Other Revenue

 

627

 

 

110

 

 

 

737

 

 

765

 

(18.0

)

 

(3.7

)

Total Revenue

$

378,829

 

$

1,311

 

 

$

380,140

 

$

372,791

 

1.6

%

 

2.0

%

 

 

 

 

 

 

 

 

 

 

 

 

1

Revenue for the three and nine months ended September 30, 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 nine months ended September 30, 2022 to GAAP revenue for the three and nine months ended September 30, 2023.

 

 

3

This column presents the percentage change from GAAP revenue for the three and nine months ended September 30, 2022 to non-GAAP revenue for the three and nine months ended September 30, 2023 (as recalculated using the foreign currency exchange rates in effect during the three and nine months ended September 30, 2022) in order to provide a constant-currency comparison.

 

 

 

Proto Labs, Inc.

Product Developer Information

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

2023

 

2022

 

2023

 

2022

Unique product developers and engineers served

23,080

 

23,816

 

45,668

 

47,793

 

 

 

 

 

 

 

 

 

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