Proto Labs, Inc. (“Protolabs” or the “Company”) (NYSE: PRLB), the world’s leading provider of digital manufacturing services, today announced financial results for the third quarter ended September 30, 2024.
Third Quarter 2024 Financial Highlights:
- Revenue was $125.6 million, a 3.9% decrease compared to record revenue of $130.7 million in the third quarter of 2023.
- Revenue generated from Protolabs Network was $25.3 million, a 11.6% increase compared to the third quarter of 2023.
- Net income was $7.2 million, or $0.29 per diluted share, compared to $8.0 million, or $0.31 per diluted share, in the third quarter of 2023.
- Non-GAAP net income was $11.8 million, or $0.47 per diluted share, compared to $13.2 million, or $0.51 per diluted share, in the third quarter of 2023. See “Non-GAAP Financial Measures” below.
- EBITDA was $17.5 million, or 13.9% of revenue. See “Non-GAAP Financial Measures” below.
- Adjusted EBITDA was $21.9 million, or 17.4% of revenue, compared to $23.9 million, or 18.3% of revenue, in the third quarter of 2023. See “Non-GAAP Financial Measures” below.
“Our disciplined approach and resilient business model drove solid financial results in the third quarter, despite continued dynamic challenges in the manufacturing sector,” said Rob Bodor, President and Chief Executive Officer. “We remain committed to accelerating our growth, as highlighted by the actions we initiated at the end of the second quarter to reorganize our internal structure and better position the company for growth and value-creation over the long-term. We are committed to executing on our priorities and increasing value for our shareholders.”
Dan Schumacher, Chief Financial Officer, commented: “In the third quarter, our business generated its highest quarterly operating cash flow since 2020—before the acquisition of 3D Hubs. This is a testament to the profitability of Protolabs’ model against any macro backdrop, driven by our unique combined factory and network model. We will continue to invest profits to accelerate growth and create value for shareholders.”
Additional Third Quarter 2024 Highlights:
- Customer contact information
- Protolabs served 22,511 customer contacts during the quarter.
- Revenue per customer contact decreased 1.5% year-over-year to $5,580. Year-to-date, revenue per customer contact is up 4.7%.
- Gross margin was 45.6% of revenue, compared to 45.4% of revenue in the third quarter of 2023.
- Non-GAAP gross margin was 46.2% of revenue, compared to 46.0% of revenue in the third quarter of 2023. See “Non-GAAP Financial Measures” below.
- Cash flow from operations was $24.8 million in the third quarter of 2024.
- Cash and investments balance was $117.6 million as of September 30, 2024.
Fourth Quarter 2024 Outlook
For the fourth quarter of 2024, the Company expects to generate revenue between $115 million and $123 million.
The Company expects fourth quarter 2024 diluted net income per share between $0.10 and $0.18, and non-GAAP diluted net income per share between $0.28 and $0.36. See “Non-GAAP Financial Measures” below.
Non-GAAP Financial Measures
The Company has included non-GAAP revenue growth by region and by service line that excludes the impact of changes in foreign currency exchange rates (collectively, “non-GAAP revenue growth”). Management believes these metrics, when viewed in conjunction with the comparable GAAP metrics, are useful in evaluating the underlying business trends and ongoing operating performance of the Company.
The Company has included earnings before interest, taxes, depreciation and amortization (“EBITDA”) and EBITDA, adjusted for stock-based compensation expense, unrealized (gain) loss on foreign currency and costs related to the Japan closure activities (collectively, “Adjusted EBITDA”), in this press release to provide investors with additional information regarding the Company’s financial results. The Company has also included earnings before interest, taxes, depreciation and amortization margin (“EBITDA margin”) and EBITDA margin, adjusted for stock-based compensation expense, unrealized (gain) loss on foreign currency and costs related to the Japan closure activities (collectively, “Adjusted EBITDA margin”), in this press release to provide investors with additional information regarding the Company’s financial results.
The Company has included non-GAAP gross margin, adjusted for stock-based compensation expense and amortization expense in this press release to provide investors with additional information regarding the Company’s financial results.
The Company has included non-GAAP operating margin, adjusted for stock-based compensation expense, amortization expense and costs related to the closure of Japan (collectively, “non-GAAP operating margin”), in this press release to provide investors with additional information regarding the Company’s financial results.
The Company has included non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and costs related to the closure of Japan (collectively, “non-GAAP net income”), in this press release to provide investors with additional information regarding the Company’s financial results.
The Company has provided below reconciliations of GAAP to non-GAAP net income, non-GAAP gross margin, non-GAAP operating margin, non-GAAP revenue growth by region and by service, and Adjusted EBITDA and Adjusted EBITDA margin, the most directly comparable measures calculated and presented in accordance with GAAP. These non-GAAP measures are used by the Company’s management and board of directors to understand and evaluate operating performance and trends and provide useful measures for period-to-period comparisons of the Company’s business. Accordingly, the Company believes that these non-GAAP measures provide useful information to investors and others in understanding and evaluating operating results in the same manner as our management and board of directors.
