Cost of Revenue Gross Profit N/A N/A $19,229 | --- | --- | --- | |----------|----------------------------------------------|-----------| | GAAP | Three Months Ended Jun. 30, 2022 Adjustments | Non-GAAP* | | $126,902 | - | $126,902 | | 69,480 | (870) | 68,610 | | $57,422 | $870 | $58,292 | | 21,055 | (813) | 20,242 | | 9,450 | (471) | 8,979 | | 16,522 | (3,404) | 13,118 | | 5,194 | (5,194) | - | | 52,221 | (9,882) | 42,339 | | $5,201 | $10,752 | $15,953 | | N/A | N/A | $24,591 | 15,822 (2,861) 12,961 Disposa ...

Financial Performance - Total revenue for the second quarter of 2023 was $122.265 million, a decrease of 3.1% compared to $126.902 million in the same period of 2022[11] - Gross profit for the second quarter of 2023 was $53.123 million, down 7.9% from $57.422 million year-over-year[11] - Net loss for the second quarter of 2023 was $0.383 million, compared to a net income of $2.557 million in the same quarter of 2022[11] - Net income for the six months ended June 30, 2023, was $2,276 million, a decrease of 70.3% compared to $7,652 million in the same period of 2022[16] - Total revenue for the six months ended June 30, 2023, was $248.1 million, a decrease of $2.9 million or 1.2% compared to $251.1 million for the same period in 2022[100] - The company reported a net loss of $0.4 million for the three months ended June 30, 2023, compared to a net income of $2.6 million in the same period in 2022[11] Assets and Liabilities - Total assets decreased to $777.210 million as of June 30, 2023, down from $802.168 million at the end of 2022[9] - Total liabilities decreased to $94.525 million as of June 30, 2023, compared to $104.520 million at the end of 2022[9] - Shareholders' equity decreased to $682.685 million as of June 30, 2023, down from $697.648 million at the end of 2022[9] - Cash and cash equivalents at the end of the period were $66,493 million, up from $54,666 million at the end of the previous year[16] - Total long-lived assets as of June 30, 2023, were $248.614 million, down from $257.785 million as of December 31, 2022[60] Operating Expenses - Operating expenses for the second quarter of 2023 were $47.515 million, a decrease of 9.4% from $52.221 million in the same quarter of 2022[11] - Operating expenses totaled $47.5 million for the three months ended June 30, 2023, a decrease of $4.7 million or 9.0% compared to $52.2 million in the same period of 2022[93] - Marketing and sales expenses increased by $0.7 million or 3.2% during Q2 2023, primarily due to higher personnel costs[93] - General and administrative expenses decreased by $0.7 million or 4.2% in Q2 2023, attributed to lower stock-based compensation and personnel costs[95] Research and Development - Research and development expenses increased slightly to $9.865 million in Q2 2023, compared to $9.450 million in Q2 2022[11] - Research and development expenses are anticipated to increase as the company seeks to enhance its e-commerce interface technology and expand product lines[81] - Research and development expenses rose by $0.5 million or 2.7%, primarily due to personnel cost increases[106] Stock and Compensation - The company repurchased $30,064 million in common stock during the financing activities, significantly higher than $5,239 million in the previous year[16] - Stock-based compensation expense for the three months ended June 30, 2023, was $3.7 million, a decrease from $4.0 million in the same period of 2022[41] - The total number of outstanding stock options increased to 399,246 as of June 30, 2023, from 263,992 at the end of 2022, reflecting a growth of approximately 51.1%[43] - The company granted 406,150 restricted stock units during the six months ended June 30, 2023, with a weighted average grant date fair value of $32.50 per share[47] Foreign Currency and Market Conditions - The company recognized a foreign currency translation loss of $3.9 million during the three and six months ended June 30, 2023, due to the closure of its Japan business[52] - The company reported foreign currency losses related to intangible assets of $1.5 million as of June 30, 2023[26] - The effective income tax rate for the three months ended June 30, 2023, was 117.1%, significantly higher than 50.8% for the same period in 2022, an increase of 66.3%[54] Market Performance - The company served 23,377 unique product developers and engineers during the three months ended June 30, 2023, a decrease of 2.8% from the same period in 2022[74] - Revenue in the United States decreased by $4.3 million or 4.3%, while revenue in Europe increased by $2.6 million or 10.9%[89] - The company expects an increase in personnel-related costs to retain and attract top talent, which will contribute to a rise in the cost of revenue[76] Future Outlook - The company plans to continue substantial investments in technology and personnel, leading to increased operating expenses in the future[79] - The company expects that changes in foreign currency exchange rates will increasingly affect its results as it expands internationally[126]

Proto Labs, Inc. (NYSE:PRLB) Q2 2023 Earnings Conference Call August 4, 2023 8:30 AM ET Company Participants Jason Frankman - Vice President and Corporate Controller Rob Bodor - President and Chief Executive Officer Dan Schumacher - Chief Financial Officer Conference Call Participants Jim Ricchiuti - Needham and Company Greg Palm - Craig Hallum Capital Group Ben Rose - Battle Road Research Operator Greetings and welcome to the Proto Labs’ Q2 2023 Earnings Call. At this time, all participants are in a listen ...

▸ These slides may contain forward-looking statements. These statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the us ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Table of Contents FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-35435 Proto Labs, Inc. (Exact name of registrant as specified in its charter) Minnesota 41-1939628 (State or ...

Financial Data and Key Metrics Changes - First quarter revenue reached $125.9 million, a 6.9% year-over-year increase in constant currencies, and an 8.9% sequential growth [37][66] - Non-GAAP diluted net income per share was $0.30, up from $0.26 in the previous quarter, driven by higher volume and other income [41] - First quarter non-GAAP gross margin increased 60 basis points sequentially to 43.4% [68] Business Line Data and Key Metrics Changes - Injection molding revenue grew approximately 3% year-over-year in constant currencies [38] - 3D printing revenue increased by 11% year-over-year in constant currencies, with strong growth in Europe [39] - Sheet metal revenue declined by 9% year-over-year in constant currencies, impacted by slowing demand in the computer and electronics industry [39] Market Data and Key Metrics Changes - Revenue in the Americas increased by 2.4% year-over-year, while Europe saw a 24.4% growth in constant currencies [66] - The Hubs network generated $17.2 million in revenue, representing a year-over-year growth of 67.3% [37] Company Strategy and Development Direction - The company aims to drive revenue growth in injection molding and CNC machining, focusing on expanding profitability in both areas [30][33] - The strategy includes reducing costs in areas with lower demand while continuing to invest in high-growth areas [34] - The company is enhancing its digital manufacturing capabilities to capture additional market share and meet customer needs [64] Management's Comments on Operating Environment and Future Outlook - Management noted macroeconomic uncertainty, with the ISM Manufacturing PMI indicating contraction [63] - The company expects continued pressure on operating margins due to a shift towards longer lead time, lower-priced offerings [36] - Despite challenges, the company remains confident in its ability to deliver value and maintain profitability [64] Other Important Information - The company repurchased $21.1 million worth of common shares during the first quarter, indicating a strong balance sheet with $104.7 million in cash and zero debt [42] - The non-GAAP effective tax rate for the first quarter was 23.2%, a normalized rate compared to the previous quarter [69] Q&A Session Summary Question: Growth rates in Europe vs. Americas - Management indicated stronger growth in Europe due to larger orders and demand, while the Americas faced slower growth in certain sectors like computer electronics [5][6] Question: Competitive landscape in the Americas - Management acknowledged a more competitive environment in longer lead time offerings but noted exceptional growth in the network business at 70% [7][20] Question: Injection molding growth expectations - Management expressed optimism about injection molding growth, driven by a strong customer base and increased orders [81][102] Question: Integration of Hubs and Proto Labs - Management confirmed ongoing efforts to integrate the two platforms, enhancing customer access to services [84][104] Question: Gross margin trends - Management explained that gross margins are expected to improve due to cost management and operational efficiencies [47][68]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________ FORM 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-35435 Proto Labs, Inc. (Exact name of Registrant as specified in its charter) (State or other jur ...

Financial Data and Key Metrics Changes - Fourth quarter revenue was $115.6 million, representing a 1% decrease year-over-year in constant currencies and excluding Japan [27] - Non-GAAP gross margin decreased by 200 basis points sequentially to 42.8% due to lower volume and growth in longer lead time offerings [32] - Full year 2022 non-GAAP diluted net income per share was $1.50 compared to $1.55 in 2021, reflecting lower gross margin partially offset by lower operating expenses [37] Business Line Data and Key Metrics Changes - Injection Molding revenue declined approximately 12% year-over-year at constant currencies and excluding Japan [31] - CNC Machining revenue grew double digits year-over-year at constant currencies and excluding Japan, driven by outperformance in longer lead time offerings [31] - Hubs revenue in the fourth quarter was $14.8 million, representing year-over-year growth of 49.6% or 56.5% in constant currencies [27] Market Data and Key Metrics Changes - In the Americas, fourth quarter revenue decreased 5.8% year-over-year, primarily due to weakness in Injection Molding parts orders [30] - In Europe, fourth quarter revenue grew 19.9% year-over-year in constant currencies, driven by strong growth in CNC Machining and 3D Printing services [30] Company Strategy and Development Direction - The company is focusing on two priority areas for growth: Injection Molding and CNC services, aiming to drive growth through a sharper focus on fewer priorities [7][15] - The strategy includes accelerating the innovation pipeline and launching new offerings at a faster pace [9][20] - The company plans to return capital to shareholders at an accelerated rate through stock repurchases, reflecting confidence in the long-term outlook [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2023, citing focused investments and positive momentum in key areas [9][24] - The company acknowledged challenges in 2022 due to macroeconomic factors and internal issues but is committed to improving earnings and operating margins [8][21] - Management highlighted the importance of addressing customer needs and enhancing service offerings to drive growth [14][58] Other Important Information - The company incurred $534,000 in GAAP operating expenses related to the closure of its Japan business during the fourth quarter [28] - A noncash goodwill impairment charge of $118 million was recorded due to rising interest rates and macroeconomic challenges, which does not impact cash position [35] Q&A Session Summary Question: Comments on revenue guidance and January performance - Management noted solid customer return in January, reflecting in the revenue guidance [45] Question: Turnaround for Injection Molding business - Management discussed the cyclical nature of the Injection Molding business and the need to drive growth through molds and new capabilities [46][49] Question: Impact of lower priority areas on profitability - Management clarified that while investments are being made in other services, the focus is on higher-margin areas to drive overall business growth [51][53] Question: Progress on customer understanding of longer lead time orders - Management indicated that sales teams are actively promoting the ability to compete for longer lead time orders, with traction expected to increase [79] Question: Outlook for gross margins and Hubs business - Management expects flat to slightly up margins in Q1, with potential risks from a mix shift towards lower margin areas [60][71]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-35435 Proto Labs, Inc. (Exact name of registrant as specified in its charter) Minnesota 41-1939628 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or (State ...

Financial Data and Key Metrics Changes - Total revenue for Q3 2022 was $121.7 million, a decrease of 2.9% year-over-year, and near the bottom end of guidance [33] - Non-GAAP gross margin decreased by 110 basis points sequentially to 44.8%, primarily due to lower volume in injection molding [37] - Non-GAAP diluted net income per share was $0.40, down from $0.46 in the prior quarter, attributed to overall volume and lower internal manufacturing gross margin [41] Business Line Data and Key Metrics Changes - Injection molding revenue declined by 12.3% year-over-year in constant currencies, significantly impacting overall revenue [36] - CNC machining revenue grew by 12.4% year-over-year, while 3D printing revenue increased by 11% year-over-year in constant currencies [36] - Hubs generated $12.1 million in revenue, representing a growth of 38.5% year-over-year, with constant currency growth at 50.1% [34] Market Data and Key Metrics Changes - Revenue in the Americas decreased by 1.2% year-over-year, while Europe saw a growth of 14% year-over-year in constant currencies [35] - The closure of the Japan business is expected to have a $3.5 million negative year-over-year impact on revenue growth [43] Company Strategy and Development Direction - The company is focusing on accelerating revenue growth, particularly in injection molding and expanding integrated offerings [26] - Plans include enhancing go-to-market strategies and improving e-commerce capabilities to drive growth in injection molding [12][63] - The company aims to be a global leader at scale by launching enhancements to digital manufacturing technology and increasing automation [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term strategy despite near-term disruptions and macroeconomic uncertainty [31] - The company anticipates continued pressure on gross margins due to lower revenue in the fourth quarter [48] - Feedback from customers indicates uncertainty in demand levels, with some projects being put on hold due to budget constraints [56][57] Other Important Information - Oleg Ryaboy was appointed as Chief Technology Officer, expected to positively impact the business [23] - The U.S. injection molding facility was named the 2022 best plant by Industry Week, highlighting competitiveness and customer satisfaction [25] Q&A Session Summary Question: What do you see in the near term in terms of gross profit margin? - Management expects more pressure on gross profit margin in Q4 due to lower revenue [48] Question: Can you provide insights on the integration of Proto Labs 2.0? - The first component of the integrated offer was launched, enabling customers to see parts fulfilled through both digital factory and network [50] Question: What are you seeing in October that gives you caution for Q4 guidance? - Management noted softness in injection molding continuing into Q4, with shorter lead time services experiencing additional softening [56][58] Question: What sectors are seeing caution from key customers? - Management identified automotive and medical sectors as experiencing softness, with some projects being put on hold [70] Question: How is the company addressing the weakness in injection molding? - The company is implementing aggressive sales actions and expanding offerings to include longer lead times [62][63] Question: Are CNC machining and 3D printing taking share from injection molding? - Management does not believe CNC and 3D printing are taking share from injection molding, as their applications are different [79] Question: What opportunities exist in the EV product development pipeline? - Management sees growing opportunities in EV product development for prototyping and advancing technologies [81]