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Proto Labs(PRLB) - 2024 Q4 - Annual Report

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].