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Protolabs Reports Financial Results for the Fourth Quarter and Full Year 2023

09 February 2024
  • Revenue of $125 Million in the Fourth Quarter of 2023
  • Record Annual Revenue of $504 Million in 2023

MINNEAPOLIS / Feb 09, 2024 / Business Wire / 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

 

 

 

 

 

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