Revenue and Income - Revenue for the three months ended March 31, 2025, was $126,205, a decrease of 1.3% compared to $127,890 for the same period in 2024[11] - Net income for the three months ended March 31, 2025, was $3,599, a decline of 31.7% from $5,268 in the same period last year[11] - Total revenue for the three months ended March 31, 2025, was $126.205 million, a decrease of 1.3% from $127.890 million in the same period of 2024[60] - Net income for the three months ended March 31, 2025, was $3.6 million, a decrease from $5.3 million in the same period of 2024[26] Gross Profit and Margins - Gross profit for the first quarter of 2025 was $55,698, down from $57,467 in the first quarter of 2024, reflecting a gross margin of 44.1%[11] - Gross profit for the first quarter of 2025 was $55,698 thousand, down 3.1% from $57,467 thousand in Q1 2024[11] Assets and Liabilities - Total current assets as of March 31, 2025, were $194,410, slightly down from $194,854 as of December 31, 2024[9] - Total liabilities increased to $80,649 as of March 31, 2025, compared to $73,361 as of December 31, 2024[9] - Total long-lived assets decreased to $221.207 million as of March 31, 2025, down from $227.263 million at December 31, 2024[61] Cash and Cash Equivalents - Cash and cash equivalents decreased to $82,692 as of March 31, 2025, from $89,071 at the end of 2024[9] - Cash and cash equivalents totaled $81.2 million as of March 31, 2025, down from $86.4 million at the end of 2024[33] Operating Expenses - Operating expenses for the first quarter of 2025 were $51,167, an increase from $50,640 in the same quarter of 2024[11] - Operating expenses for the first quarter of 2025 totaled $51,167 thousand, an increase of 1.0% from $50,640 thousand in Q1 2024[11] Shareholders' Equity - The company’s total shareholders' equity decreased to $656,801 as of March 31, 2025, from $670,151 as of December 31, 2024[9] Stock Options and Compensation - As of March 31, 2025, the company had 499,700 stock options outstanding with a weighted average exercise price of $48.80, an increase from 445,136 options at December 31, 2024[43] - The company granted 77,606 stock options during the three months ended March 31, 2025, with a weighted average grant date fair value of $22.07[44] - Stock-based compensation expense was $4.0 million for the three months ended March 31, 2025, compared to $4.3 million for the same period in 2024[42] Tax and Income Tax Rate - The effective income tax rate for the three months ended March 31, 2025, was 39.9%, an increase of 8.1% compared to 31.8% in the same period of 2024[52] - The company recorded an income tax provision of $2.4 million for the three months ended March 31, 2025, compared to $2.5 million for the same period in 2024[52] Inventory and Allowance for Obsolescence - Total inventory as of March 31, 2025, was $13.9 million, an increase from $12.9 million as of December 31, 2024[38] - The Company reported an allowance for obsolescence of $687,000 as of March 31, 2025, slightly up from $684,000 at the end of 2024[38] Marketable Securities and Intangible Assets - Total marketable securities as of March 31, 2025, were valued at $33.6 million, compared to $31.8 million as of December 31, 2024[34] - The Company has intangible assets with a net value of $20.8 million as of March 31, 2025, compared to $21.4 million as of December 31, 2024[28] Other Comprehensive Income - The company recognized $1.003 million in other comprehensive income for the three months ended March 31, 2025, compared to a loss of $925,000 in the same period of 2024[51] Unrecognized Compensation Expense - The company had $4.8 million of unrecognized compensation expense related to unvested stock options, expected to be recognized over a weighted-average period of 2.9 years[44] - The company had $18.1 million of unrecognized compensation expense related to non-vested restricted stock, expected to be recognized over a weighted-average period of 2.7 years[46] - As of March 31, 2025, there were $7.5 million of unrecognized compensation expense related to non-vested performance stock, expected to be recognized over a weighted-average period of 2.3 years[49] Revenue Breakdown - Revenue from CNC Machining increased to $52.843 million in Q1 2025, up 5.8% from $49.932 million in Q1 2024[61] - Revenue from Injection Molding was $48.723 million, down from $52.663 million, while CNC Machining revenue increased to $52.843 million from $49.932 million[61]

Financial Data and Key Metrics Changes - The company reported revenue of $126 million for Q1 2025, which is down slightly year-over-year but near the upper end of guidance [5][20] - Non-GAAP earnings per share were $0.33, also near the top end of expectations, reflecting solid profitability [5][24] - Free cash flow represented 14% of revenue, indicating continued industry-leading profitability [6] - Non-GAAP gross margin increased by 140 basis points sequentially to 44.8%, although it was down 80 basis points year-over-year [23] Business Line Data and Key Metrics Changes - Revenue from CNC machining grew by 6% year-over-year, driven by strong performance in production [21] - Injection molding revenue declined by 7% year-over-year but increased by 7% compared to the previous quarter [22] - 3D printing revenue was down 6% year-over-year due to lagging order trends [22] - Sheet metal revenue increased by 19% year-over-year, driven by improved offerings [22] Market Data and Key Metrics Changes - U.S. revenue was down 1.2% compared to the prior year, while European revenue was flat in constant currencies [20] - Revenue fulfilled through the Proto Labs Network was $26.3 million, up 11.5% in constant currencies [20] Company Strategy and Development Direction - The company is focused on driving growth through a hybrid model, which has seen customer utilization of combined offerings grow by over 45% [6][7] - Strategic priorities for 2025 include enhancing efficiency, expanding production use cases, and reinforcing the core prototyping business [18] - The company is closely monitoring tariff policies and believes the current situation presents growth opportunities due to its diverse manufacturing footprint [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic headwinds and maintain profitability [6][19] - The current economic uncertainty is causing customers to be cautious about demand forecasting, but the company believes it can adapt quickly [17] - Management anticipates continued growth in Q2 2025, with revenue guidance between $124 million and $132 million [25] Other Important Information - The company has zero debt and $116.3 million in cash and investments on its balance sheet [25] - The company is actively reviewing pricing strategies to offset potential impacts from tariffs [17] Q&A Session Summary Question: Can you elaborate on the sustainability of the recent gross margin improvement? - Management indicated that the improvement was primarily due to increased factory volume, but network margins faced challenges [29][30] Question: Are there concerns regarding the hubs network due to tariffs? - Management reassured that the network is adaptable and has been able to mitigate impacts from tariffs effectively [36][38] Question: What are the trends in order growth and customer behavior in April? - Orders have consistently improved month-to-month, with a higher proportion of revenue going through the network [41][42] Question: Are there any headwinds from materials used due to tariffs? - Management stated that the robust supply chain has mitigated substantial increases in raw material costs due to tariffs [65][66] Question: How does the 3D printing business align with the production parts strategy? - The 3D printing segment is primarily a prototyping service, which has faced headwinds due to a slowdown in new product launches [68][69] Question: Is the company satisfied with its strategy in mature manufacturing markets? - Management expressed confidence in their differentiated offering and the ability to penetrate various industries over time [71]

Financial Data and Key Metrics Changes - The company reported first quarter revenue of $126 million, which is down 1% year-over-year but near the upper end of guidance [4][19] - Non-GAAP earnings per share were $0.33, also within guidance but down $0.05 sequentially due to increased operating expenses and a higher tax rate [23] - Free cash flow represented 14% of revenue, highlighting strong profitability [5] Business Line Data and Key Metrics Changes - Revenue from CNC machining grew 6% year-over-year, driven by strong performance in production and high requirement CNC parts [20] - Injection molding revenue declined 7% year-over-year but increased 7% compared to the fourth quarter [21] - 3D printing revenue was down 6% year-over-year, while sheet metal revenue increased by 19% due to improved offerings [21] Market Data and Key Metrics Changes - Revenue fulfilled through the Proto Labs Network was $26.3 million, up 11.5% in constant currencies [19] - U.S. revenue was down 1.2% compared to the prior year, while European revenue was flat in constant currencies [19] Company Strategy and Development Direction - The company is focused on driving growth through a hybrid model, which has seen customer utilization of combined offerings grow over 45% year-over-year [6] - Strategic priorities for 2025 include enhancing efficiency, expanding production use cases, and reinforcing the core prototyping business [17] - The company is closely monitoring tariff policies and believes its diverse manufacturing footprint provides resilience and flexibility [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic headwinds and maintain profitability [5][18] - The current economic uncertainty is causing customers to be cautious about demand forecasting, but the company believes this environment favors agile players [15] - Management highlighted the importance of adapting to supply chain dynamics and the potential for growth driven by reshoring trends [12][44] Other Important Information - The company generated $18.4 million in cash from operations during the first quarter and returned $20.9 million to shareholders through stock repurchases [23] - As of March 31, 2025, the company had $116.3 million in cash and investments on its balance sheet with zero debt [24] Q&A Session Summary Question: Can you provide more details on the sustainability of the gross margin improvement? - Management indicated that the sequential increase in gross margin was primarily due to higher factory volume, with expectations for flat to slightly down margins moving forward [28][30] Question: What are the current trends in order growth and customer behavior? - Management noted consistent month-over-month improvement in orders and customer engagement, particularly in production offerings [41][43] Question: Are there any concerns regarding the hubs network and tariff impacts? - Management reassured that the network is adaptable and has been able to mitigate impacts from tariffs effectively [36] Question: How does the company view the production parts opportunity in mature markets? - Management expressed confidence in their differentiated offering and the potential for growth in both traditional and emerging markets [72]

Company Performance - Proto Labs (PRLB) reported quarterly earnings of $0.33 per share, exceeding the Zacks Consensus Estimate of $0.28 per share, but down from $0.40 per share a year ago, representing an earnings surprise of 17.86% [1] - The company posted revenues of $126.21 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.61%, although this is a decrease from year-ago revenues of $127.89 million [2] - Over the last four quarters, Proto Labs has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Market Performance - Proto Labs shares have declined approximately 8.4% since the beginning of the year, compared to a decline of 4.7% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $0.37 on revenues of $126.08 million, and for the current fiscal year, it is $1.40 on revenues of $504.62 million [7] Industry Outlook - The Rubber - Plastics industry, to which Proto Labs belongs, is currently ranked in the top 38% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Proto Labs' stock performance [5][6]

Financial Performance - Total revenue for Q1 2025 was $126.2 million, a 1.3% decrease from $127.9 million in Q1 2024[6] - Net income for Q1 2025 was $3.6 million, or $0.15 per diluted share, compared to $5.3 million, or $0.20 per diluted share, in Q1 2024[6] - Non-GAAP net income was $8.1 million, or $0.33 per diluted share, down from $10.4 million, or $0.40 per diluted share, in Q1 2024[6] - Revenue for Q1 2025 was $126,205,000, down 1.3% from $127,890,000 in Q1 2024[28] - Net income for Q1 2025 decreased to $3,599,000 from $5,268,000 in Q1 2024, representing a decline of 31.7%[25] - Non-GAAP net income for Q1 2025 was $8,083,000, compared to $10,414,000 in Q1 2024, a decrease of 22.4%[26] Customer Metrics - Protolabs served 21,627 customer contacts during the quarter, with revenue per customer contact increasing 2.5% year-over-year to $5,836[7] - Customer contacts decreased to 21,627 in Q1 2025 from 22,466 in Q1 2024, a decline of 3.7%[39] - Revenue per customer contact increased to $5,836 in Q1 2025 from $5,693 in Q1 2024, an increase of 2.5%[39] Revenue Outlook - The company expects Q2 2025 revenue to be between $124.0 million and $132.0 million[5] - Non-GAAP diluted net income per share is projected to be between $0.30 and $0.38 for Q2 2025[41] Profitability Metrics - Adjusted EBITDA for Q1 2025 was $17.4 million, or 13.8% of revenue, compared to $20.2 million, or 15.8% of revenue, in Q1 2024[7] - GAAP operating margin for Q1 2025 was 3.6%, down from 5.3% in Q1 2024[30] - Non-GAAP operating margin for Q1 2025 was 7.4%, compared to 9.5% in Q1 2024[30] Cash and Investments - Cash and investments balance was $116.3 million as of March 31, 2025[7] - Total cash and cash equivalents at the end of Q1 2025 were $82,692,000, down from $92,804,000 at the end of Q1 2024[25] - The company reported a net cash used in financing activities of $21,927,000 in Q1 2025, compared to $16,619,000 in Q1 2024[25] Stock and Debt - The company repurchased $20.9 million of common stock during the quarter[3] - The company has zero debt on its balance sheet, positioning it strongly for growth and investment[3] - Revenue fulfilled through the Protolabs Network was $26.3 million, a 10.0% increase compared to Q1 2024[6]

Financial Performance - Proto Labs, Inc. reported revenue of $500.89 million for the year ended December 31, 2024, a decrease of 0.2% compared to $503.88 million in 2023[280]. - The company's gross profit for 2024 was $223.20 million, slightly up from $221.99 million in 2023, resulting in a gross margin of approximately 44.6%[280]. - Net income for 2024 was $16.59 million, compared to $17.22 million in 2023, reflecting a net income margin of approximately 3.3%[280]. - The total assets of Proto Labs, Inc. decreased to $743.51 million as of December 31, 2024, down from $772.35 million in 2023[278]. - Cash and cash equivalents increased to $89.07 million in 2024 from $83.79 million in 2023, indicating improved liquidity[278]. - The accounts receivable decreased to $66.50 million in 2024 from $72.85 million in 2023, reflecting a reduction in outstanding customer payments[278]. - Comprehensive income for 2024 was $16,622,000, a decrease from $23,562,000 in 2023, primarily due to lower net income[284]. - The company reported net cash provided by operating activities of $77,829,000 for 2024, compared to $73,274,000 in 2023, indicating a year-over-year increase of 6.9%[284]. - The company’s total shareholders' equity at the end of 2024 was $670,151,000, a decrease from $695,295,000 in 2023[284]. - Total revenue for the year ended December 31, 2024, was $500.89 million, a decrease of 0.2% from $503.88 million in 2023[318]. Research and Development - Research and development costs were approximately $41.3 million, $40.1 million, and $38.2 million for the years ended December 31, 2024, 2023, and 2022, respectively[105]. - Research and development expenses rose to $41.30 million in 2024, compared to $40.14 million in 2023, highlighting continued investment in innovation[280]. Operational Risks - The company faces risks from emerging technologies such as AI and Machine Learning, which may not guarantee benefits to business operations[106]. - The loss of key management personnel could disrupt operations and delay the achievement of business objectives[112]. - The company does not have long-term supply contracts with suppliers, which may affect customer relationships and financial condition if suppliers become unavailable[113]. - The ability to protect intellectual property is critical for maintaining competitive advantage, but there are risks of infringement claims[115][116]. - The company may require additional capital for growth, which might not be available on acceptable terms, potentially impairing business expansion[124]. - Operating results and financial condition may fluctuate quarterly and annually, affecting market price of common stock[125]. Stock Performance - The company's common stock traded between $25.76 and $45.15 during the year ended December 31, 2024, indicating significant volatility in the stock price[131]. - Basic and diluted net income per share for 2024 was $0.66, consistent with 2023, while in 2022, it was $(3.77)[320]. International Operations - The company recognized a foreign currency translation loss of $3.9 million related to the closure of its Japan business during the year ended December 31, 2023[249]. - The company has established operations in the United States and Europe, and dissolved its Japan operations in December 2023[287]. Expenses and Liabilities - Operating expenses increased to $203.29 million in 2024 from $193.83 million in 2023, primarily driven by higher marketing and sales expenses of $92.07 million[280]. - The company reported a loss on impairment of goodwill of $118,008,000 in 2022, which was not repeated in subsequent years[284]. - The company had liabilities related to unrecognized tax benefits totaling $3.4 million as of December 31, 2024, down from $3.6 million in 2023[377]. Taxation - The effective income tax rate for the year ended December 31, 2024, was 32.7%, a decrease of 5.7% compared to 38.4% in 2023[369]. - The company recorded an income tax provision of $8.1 million for the year ended December 31, 2024, down from $10.7 million in 2023, reflecting a reduction of approximately 24.8%[368]. Shareholder Activities - The company repurchased 1,774,058 shares of common stock in 2024, totaling $60,785,000, compared to $44,303,000 for 1,432,921 shares in 2023[284]. - The total stock-based compensation expense for the year ended December 31, 2024, was $16.999 million, a slight increase from $15.989 million in 2023[348]. Inventory and Assets - The company reported total inventory of $12.989 million as of December 31, 2024, down from $14.319 million in 2023[336]. - Total long-lived assets decreased to $227,263,000 in 2024 from $257,785,000 in 2022, reflecting a decline of approximately 11.8%[388].

Financial Data and Key Metrics Changes - Fourth quarter revenue was $121.8 million, down 3.1% year-over-year in constant currencies [36] - Non-GAAP earnings per share (EPS) for the fourth quarter was $0.38, down $0.09 sequentially [38] - Full-year revenue was $500.9 million, down 1% from 2023 in constant currencies [39] - Consolidated non-GAAP gross margin increased by 50 basis points to 45.2% for the full year [42] - Cash generated from operations was $77.8 million, up from $73.3 million in 2023 [43] Business Line Data and Key Metrics Changes - Revenue from Proto Labs network was $100.4 million, up 21.3% year-over-year [39] - Prototyping accounted for about two-thirds of revenues, while production made up the remaining one-third [57] - Customers using the combined offer grew by 50%, and revenue per customer increased by 3% year-over-year [39][28] Market Data and Key Metrics Changes - The company served 52,000 customer contacts in 2024 [39] - The production business is experiencing healthy growth, with a strong engagement from customers [60] - The aerospace and defense vertical showed significant strength, continuing into the new year [88] Company Strategy and Development Direction - The company is focusing on expanding beyond prototyping into production, with significant investments in marketing and sales enablement tools [12][14] - A new global operations organization was formed to optimize manufacturing and fulfill customer orders efficiently [19] - The company aims to grow revenue by serving more production use cases and reinforcing its core prototyping capabilities [29][31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that revenue growth in recent years has not met expectations but expressed confidence in the transformation strategy [11][27] - The company anticipates a return to growth in the second half of 2025, driven by traction in the production business [100] - There is uncertainty in the macro environment, but management believes they can grow in any economic condition [91] Other Important Information - The company announced a new $100 million share repurchase program [44] - Non-GAAP operating expenses are expected to increase by over $1 million in the first quarter of 2025 due to investments in growth [50] Q&A Session Summary Question: Can you quantify the spending on marketing and sales enablement tools for 2025? - The company expects operating expenses to increase by over $1 million in the first quarter, with non-GAAP operating expenses up about $2.5 million quarter-over-quarter [50][51] Question: What is the current mix of production versus prototyping revenue? - Prototyping accounts for about two-thirds of revenue, while production is one-third and growing well [57][58] Question: What is the outlook for the injection molding business? - The decline in injection molding is not due to the closure of the German plant but rather a result of macroeconomic factors affecting prototyping [61][64] Question: What is the expected gross margin for 2025? - The mix of business will influence gross margins, but automation in factories is expected to improve margins [71][72] Question: What percentage of customers are using both services? - Currently, just over 5% of customers are using both prototyping and production services, indicating significant cross-selling opportunities [75] Question: What is the expected tax rate for 2025? - The estimated tax rate for the first quarter is between 26.5% and 27.5%, which is expected to continue throughout the year [78]

Financial Data and Key Metrics Changes - Proto Labs reported second quarter revenue of $125.6 million, a year-over-year increase of 2.8% in constant currencies [20] - Non-GAAP earnings per share (EPS) for the second quarter was $0.38, down $0.02 compared to the first quarter of 2024, but adjusted EPS for the first half of 2024 increased by 25% year-over-year [22][24] - Non-GAAP gross margin for the second quarter increased by 10 basis points sequentially to 45.7% [22] Business Line Data and Key Metrics Changes - Proto Labs network revenue was $24.7 million, up 22.7% in constant currencies [20] - Injection molding revenue was flat year-over-year, while CNC machining grew by 6% year-over-year [21] - Three-dimensional (3D) printing revenue grew by 1% year-over-year, and sheet metal revenue was flat year-over-year but up 10% compared to the first quarter [21] Market Data and Key Metrics Changes - Manufacturing activity in the U.S. and Europe has contracted, with the U.S. Manufacturing PMI hitting an eight-month low [12][24] - Customer ordering patterns softened in June and continued into July, reflecting broader economic challenges [24][58] Company Strategy and Development Direction - The company is focusing on two strategic initiatives: increasing the number of customers using its comprehensive offer and driving higher revenue per customer through larger orders [6][8] - A reorganization is being implemented to separate revenue generation from operational fulfillment, aiming to enhance customer engagement and streamline operations [14][27] - The leadership changes are expected to drive growth and improve efficiency while managing costs [18][56] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macro environment, including higher interest rates and reduced demand for manufactured goods, but expressed confidence in the company's ability to grow faster [11][39] - The company anticipates a more pronounced challenging operating environment in the third quarter, with revenue guidance between $117 million and $125 million [24][26] - Management remains optimistic about the long-term growth potential, citing a 50% year-over-year increase in customers using the combined offer [8][41] Other Important Information - Cash flow from operations was $14.4 million, with $112.9 million in cash and investments and zero debt as of June 30, 2024 [23] - The company repurchased $10.9 million of common shares in the quarter [23] Q&A Session Summary Question: Can you elaborate on the reorganization and its impact on growth? - The reorganization aims to enhance customer service by creating a unified operations organization, allowing for better customer engagement and productivity [31][32] Question: What is the expected impact on gross margins and operating expenses? - Gross margins are expected to be down slightly quarter-over-quarter, while operating expenses are anticipated to decrease slightly as well [46][47] Question: How do you foresee the trend in customer count? - Management believes they can reverse the decline in customer count by improving service and driving overall growth [40][41] Question: Can you provide additional color on the slowing orders in June and July? - The slowdown was noted across major geographic regions, with increased hesitancy in closing orders due to longer approval cycles [58][60] Question: Will the reorganization lead to additional investments? - The reorganization is primarily about redeploying resources effectively, with a focus on growth and improved customer service [54][55]

Core Insights - Proto Labs (PRLB) reported quarterly earnings of $0.38 per share, exceeding the Zacks Consensus Estimate of $0.34 per share, but down from $0.46 per share a year ago, representing an earnings surprise of 11.76% [1] - The company achieved revenues of $121.75 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.64%, although this is a decrease from $125.05 million year-over-year [2] - Proto Labs has consistently outperformed consensus EPS estimates over the last four quarters, achieving this four times [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.32 on revenues of $125.35 million, and for the current fiscal year, it is $1.45 on revenues of $509.58 million [7] - The estimate revisions trend for Proto Labs is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Rubber - Plastics industry, to which Proto Labs belongs, is currently ranked in the top 16% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Revenue Performance - 2024 revenue was $501 million, a 0.6% decrease compared to $503.9 million in 2023[4] - Fourth quarter 2024 revenue was $121.8 million, a 2.6% decrease from $125.0 million in the fourth quarter of 2023[4] - Revenue fulfilled through the Protolabs Network increased by 21.6% to $100.4 million in 2024 compared to 2023[4] - Total revenue for the three months ended December 31, 2024, was $121.75 million, a decrease of 1.0% from $125.05 million in the same period of 2023[26] - For the twelve months ended December 31, 2024, total revenue was $500,890, a decline of 0.6% from $503,877 in 2023[38] - The CNC Machining service line saw a revenue increase of 4.4% for the twelve months ended December 31, 2024, while Injection Molding revenue decreased by 4.8%[40] - The revenue from the 3D Printing service line decreased by 0.6% for the twelve months ended December 31, 2024, compared to the previous year[40] Earnings and Profitability - Non-GAAP earnings per share for 2024 was $1.63, compared to $1.59 in 2023[4] - Gross margin for 2024 was 44.6%, up from 44.1% in 2023[4] - Non-GAAP net income for the twelve months ended December 31, 2024, was $41.17 million, slightly down from $41.59 million in 2023[30] - The company reported a net loss of $404,000 for the three months ended December 31, 2024, compared to a net income of $6.99 million in the same period of 2023[26] - Non-GAAP operating margin for the three months ended December 31, 2024, was 7.6%, down from 11.2% in the same period of 2023[34] - GAAP net loss for Q4 2024 was $(404), compared to a net income of $6,990 in Q4 2023, resulting in a GAAP net income margin of (0.3%) versus 5.6%[36] - Adjusted EBITDA for Q4 2024 was $16,861, down from $22,298 in Q4 2023, with an adjusted EBITDA margin of 13.8% compared to 17.8%[36] - The company reported a decrease in GAAP net income margin for the twelve months ended December 31, 2024, at 3.3% compared to 3.4% in 2023[36] Cash Flow and Financial Position - Cash flow from operations increased to $77.8 million in 2024, up from $73.3 million in 2023[4] - The company’s cash and cash equivalents at the end of the period were $89.07 million, up from $83.79 million at the beginning of the period[28] Customer Metrics - The number of customers using the combined Factory and Network offer grew by 50% in 2024[3] - Revenue per customer contact increased by 3.1% year-over-year to $9,716, serving 51,552 customer contacts in 2024[14] - Customer contacts decreased to 21,558 in Q4 2024 from 21,879 in Q4 2023, while revenue per customer contact increased to $5,648 from $5,715[44] Future Outlook - The company expects first quarter 2025 revenue to be between $120 million and $128 million[7] - The company expects Q1 2025 GAAP diluted net income per share to range from $0.08 to $0.16, with non-GAAP diluted net income per share projected between $0.26 and $0.34[46] - Total adjustments for non-GAAP guidance in Q1 2025 include stock-based compensation and amortization expenses totaling $0.18[46] Operating Expenses - Operating expenses for the three months ended December 31, 2024, increased to $53.45 million from $47.42 million in the same period of 2023, primarily due to higher marketing and sales expenses[26] - The company incurred costs related to exit and disposal activities amounting to $5.59 million for the three months ended December 31, 2024[30] Segment Performance - The company’s CNC Machining revenue increased by 7.0% to $52.39 million for the three months ended December 31, 2024, compared to $48.91 million in the same period of 2023[26] - The company’s gross margin for the three months ended December 31, 2024, was 42.7%, down from 44.6% in the same period of 2023[32]