Proto Labs(PRLB) - 2025 Q2 - Quarterly Results

Executive Summary Second Quarter 2025 Performance Overview Protolabs achieved record quarterly revenue in Q2 2025, driven by growth in both Factory and Network fulfillment, with non-GAAP EPS also increasing year-over-year Second Quarter 2025 Financial Highlights (YoY Change) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :-------------------------------- | :---------- | :---------- | :--------- | | Total Revenue | $135.1M | $125.6M | 7.5% | | Factory Revenue | $105.8M | N/A | 4.8% | | Network Revenue | $29.3M | N/A | 18.6% | | GAAP Net Income | $4.4M | $4.5M | (2.2%) | | GAAP Diluted EPS | $0.18 | $0.18 | 0.0% | | Non-GAAP Net Income | $10.0M | $9.5M | 5.3% | | Non-GAAP Diluted EPS | $0.41 | $0.38 | 7.9% | | Adjusted EBITDA | $19.7M | $19.3M | 2.1% | | Adjusted EBITDA Margin | 14.6% | 15.4% | (0.8) pp | - Protolabs served 21,775 customer contacts during the quarter, with revenue per customer contact increasing 10.9% year-over-year to $6,203[8] - Cash and investments balance stood at $123.2 million as of June 30, 2025[8] Third Quarter 2025 Outlook For the third quarter of 2025, Protolabs anticipates revenue between $130.0 million and $138.0 million, with diluted net income per share projected between $0.17 and $0.25 Third Quarter 2025 Outlook | Metric | Low End | High End | | :-------------------------- | :-------- | :------- | | Revenue | $130.0M | $138.0M | | GAAP Diluted EPS | $0.17 | $0.25 | | Non-GAAP Diluted EPS | $0.35 | $0.43 | Non-GAAP Financial Measures Explanation Non-GAAP Definitions and Rationale Protolabs uses various non-GAAP financial measures, adjusted for items like stock-based compensation and amortization, to provide insights into underlying business trends and operating performance - Non-GAAP revenue growth excludes the impact of changes in foreign currency exchange rates to evaluate underlying business trends[9] - EBITDA and Adjusted EBITDA are used to provide additional information on financial results, adjusted for stock-based compensation, foreign currency, CEO transition, and exit/disposal costs[10] - Non-GAAP measures are considered useful by management and the board for evaluating operating performance and executive compensation, but should not replace GAAP measures[14] Financial Statements Condensed Consolidated Balance Sheets Total assets slightly decreased from December 2024 to June 2025, driven by reduced property and equipment, while current assets and total liabilities increased Condensed Consolidated Balance Sheets (Key Figures, in thousands) | Account | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total current assets | $205,506 | $194,854 | | Property and equipment, net | $215,777 | $227,263 | | Total assets | $743,252 | $743,512 | | Total current liabilities | $62,164 | $53,271 | | Shareholders' equity | $664,707 | $670,151 | | Total liabilities and shareholders' equity | $743,252 | $743,512 | - Cash and cash equivalents increased from $89,071 thousand at December 31, 2024, to $90,382 thousand at June 30, 2025[21] - Accounts receivable, net, increased from $66,504 thousand to $78,011 thousand[21] Condensed Consolidated Statements of Operations Q2 2025 total revenue grew 7.5% year-over-year, driven by CNC Machining, but GAAP net income slightly decreased due to higher operating expenses Condensed Consolidated Statements of Operations (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change (%) | | :-------------------------- | :----- | :----- | :--------- | | Total Revenue | $135,063 | $125,631 | 7.5% | | Cost of revenue | $75,289 | $69,085 | 9.0% | | Gross profit | $59,774 | $56,546 | 5.7% | | Income from operations | $4,969 | $5,999 | (17.2%) | | Net income | $4,427 | $4,540 | (2.5%) | | Diluted EPS | $0.18 | $0.18 | 0.0% | Revenue by Service Line (Three Months Ended June 30, in thousands) | Service Line | 2025 | 2024 | Change (%) | | :---------------- | :----- | :----- | :--------- | | Injection Molding | $47,415 | $49,080 | (3.4%) | | CNC Machining | $61,945 | $51,239 | 20.9% | | 3D Printing | $21,215 | $21,281 | (0.3%) | | Sheet Metal | $4,303 | $3,922 | 9.7% | - Total operating expenses increased from $50,547 thousand in Q2 2024 to $54,805 thousand in Q2 2025, contributing to the decrease in income from operations[23] Condensed Consolidated Statements of Cash Flows Net cash from operating activities decreased for the six months ended June 30, 2025, while financing activities used significant cash due to stock repurchases Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | | :------------------------------------ | :----- | :----- | | Net cash provided by operating activities | $28,963 | $35,781 | | Net cash (used in) provided by investing activities | $(3,552) | $3,665 | | Net cash used in financing activities | $(25,169) | $(26,912) | | Net increase in cash and cash equivalents | $1,311 | $12,359 | | Cash and cash equivalents, end of period | $90,382 | $96,149 | - Purchases of marketable securities amounted to $11,052 thousand in the first six months of 2025, compared to none in the same period of 2024[25] - Repurchases of common stock totaled $23,980 thousand for the six months ended June 30, 2025[25] Reconciliations of GAAP to Non-GAAP Measures Net Income and EPS Reconciliation Non-GAAP net income and diluted EPS for Q2 2025 exceeded GAAP figures, mainly due to adjustments for stock-based compensation, amortization, and CEO transition costs GAAP to Non-GAAP Net Income and Diluted EPS (Three Months Ended June 30, in thousands, except per share) | Metric | GAAP 2025 | Non-GAAP 2025 | GAAP 2024 | Non-GAAP 2024 | | :-------------------------- | :-------- | :------------ | :-------- | :------------ | | Net income | $4,427 | $9,987 | $4,540 | $9,532 | | Diluted EPS | $0.18 | $0.41 | $0.18 | $0.38 | - Total adjustments to GAAP net income for Q2 2025 amounted to $6,518 thousand, including $4,259 thousand for stock-based compensation and $1,362 thousand for CEO transition costs[26] Gross Margin Reconciliation Non-GAAP gross margin for Q2 2025 was 44.8%, slightly higher than GAAP, primarily due to adjustments for stock-based compensation and amortization GAAP to Non-GAAP Gross Margin (Three Months Ended June 30) | Metric | GAAP 2025 | Non-GAAP 2025 | GAAP 2024 | Non-GAAP 2024 | | :---------------------- | :-------- | :------------ | :-------- | :------------ | | Gross margin | 44.3% | 44.8% | 45.0% | 45.7% | - Adjustments to gross profit for Q2 2025 totaled $767 thousand, comprising $424 thousand for stock-based compensation and $343 thousand for amortization expense[29] Operating Margin Reconciliation Non-GAAP operating margin for Q2 2025 was 8.6%, significantly higher than GAAP, primarily due to adjustments for stock-based compensation and CEO transition costs GAAP to Non-GAAP Operating Margin (Three Months Ended June 30) | Metric | GAAP 2025 | Non-GAAP 2025 | GAAP 2024 | Non-GAAP 2024 | | :---------------------- | :-------- | :------------ | :-------- | :------------ | | Operating margin | 3.7% | 8.6% | 4.8% | 8.9% | - Total adjustments to income from operations for Q2 2025 were $6,697 thousand, including $4,259 thousand for stock-based compensation and $1,362 thousand for CEO transition costs[31] EBITDA and Adjusted EBITDA Reconciliation Adjusted EBITDA for Q2 2025 increased to $19.7 million, providing a clearer view of operational profitability by excluding non-cash and non-recurring expenses GAAP Net Income to EBITDA and Adjusted EBITDA (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :------------------ | :----- | :----- | | GAAP net income | $4,427 | $4,540 | | EBITDA | $14,101 | $15,183 | | EBITDA Margin | 10.4% | 12.1% | | Adjusted EBITDA | $19,692 | $19,339 | | Adjusted EBITDA Margin | 14.6% | 15.4% | - Key adjustments from EBITDA to Adjusted EBITDA for Q2 2025 included $4,259 thousand for stock-based compensation and $1,362 thousand for CEO transition costs[33] Revenue Growth by Region Reconciliation Q2 2025 GAAP revenue grew 7.5% year-over-year, driven by strong US growth, while Europe saw a decline, with foreign currency impacting overall non-GAAP organic growth GAAP to Non-GAAP Revenue Growth by Region (Three Months Ended June 30, in thousands) | Region | GAAP 2025 | GAAP 2024 | GAAP Change (%) | Non-GAAP Organic Change (%) | | :------------ | :-------- | :-------- | :-------------- | :-------------------------- | | United States | $110,712 | $98,541 | 12.4% | 12.4% | | Europe | $24,351 | $27,090 | (10.1%) | (14.9%) | | Total revenue | $135,063 | $125,631 | 7.5% | 6.5% | - Foreign currency impact for Q2 2025 was a negative $1,292 thousand on total revenue, primarily affecting Europe[35] Revenue Growth by Service Line Reconciliation Q2 2025 saw significant growth in CNC Machining revenue (20.9% GAAP), while Injection Molding and 3D Printing declined, contributing to overall revenue increase GAAP to Non-GAAP Revenue Growth by Service Line (Three Months Ended June 30, in thousands) | Service Line | GAAP 2025 | GAAP 2024 | GAAP Change (%) | Non-GAAP Organic Change (%) | | :---------------- | :-------- | :-------- | :-------------- | :-------------------------- | | Injection Molding | $47,415 | $49,080 | (3.4%) | (4.3%) | | CNC Machining | $61,945 | $51,239 | 20.9% | 19.7% | | 3D Printing | $21,215 | $21,281 | (0.3%) | (1.4%) | | Sheet Metal | $4,303 | $3,922 | 9.7% | 9.3% | | Other Revenue | $185 | $109 | 69.7% | 68.8% | | Total revenue | $135,063 | $125,631 | 7.5% | 6.5% | - Foreign currency impact for Q2 2025 was a negative $1,292 thousand on total revenue, with CNC Machining and Injection Molding most affected[37] Q3 2025 Guidance Reconciliation The company reconciles GAAP to non-GAAP diluted net income per share guidance for Q3 2025, with non-GAAP being higher due to stock-based compensation and amortization adjustments Q3 2025 GAAP to Non-GAAP Diluted EPS Outlook | Metric | Low End | High End | | :-------------------------- | :-------- | :------- | | GAAP diluted net income per share | $0.17 | $0.25 | | Total adjustments | $0.18 | $0.18 | | Non-GAAP diluted net income per share | $0.35 | $0.43 | - Adjustments for Q3 2025 guidance include $0.15 for stock-based compensation expense and $0.03 for amortization expense[43] Operational Metrics Customer Contact Information Protolabs served 21,775 customer contacts in Q2 2025, with revenue per contact increasing 10.9% year-over-year, indicating higher value per customer engagement Customer Contact Information (Three Months Ended June 30) | Metric | 2025 | 2024 | Change (%) | | :-------------------------- | :------- | :------- | :--------- | | Revenue | $135,063 | $125,631 | 7.5% | | Customer contacts | 21,775 | 22,456 | (3.0%) | | Revenue per customer contact | $6,203 | $5,595 | 10.9% | - Customer contacts are defined as product developers, engineers, procurement and supply chain professionals, and other individuals who place an order that is shipped and invoiced during the period[41] Company Information & Disclosures Conference Call Details Protolabs scheduled a conference call for July 31, 2025, to discuss Q2 2025 financial results and Q3 2025 outlook, accessible via dial-in and webcast - The conference call was scheduled for July 31, 2025, at 8:30 a.m. EDT[15] - A simultaneous webcast and accompanying presentation were available via the investor relations section of the Protolabs website[15] About Protolabs Protolabs is a leading digital manufacturing services provider, offering rapid prototyping to production through its digital factories and partner network - Protolabs is described as the world's leading provider of digital manufacturing services[2] - The company's digital factories produce low-volume parts quickly, while the Protolabs Network provides advanced capabilities and volume pricing through partners[16] Forward-Looking Statements The press release includes forward-looking statements subject to risks and uncertainties that may cause actual results to differ, with no obligation for Protolabs to update them - Statements in the press release that are not historical facts are considered "forward-looking statements" under The Private Securities Litigation Reform Act of 1995[17] - These statements involve known and unknown risks, uncertainties, and other factors that could cause material differences in Protolabs' results[17] - Protolabs expressly disclaims any intent or obligation to update any forward-looking statements[17] Investor and Media Contacts Contact information for investor relations and media inquiries, including specific personnel and their contact details, is provided - Investor Relations contact: Ryan Johnsrud, Manager – Investor Relations and Corporate Development, ryan.johnsrud@protolabs.com[19] - Media Contact: Brent Renneke, Marketing Communications Manager, brent.renneke@protolabs.com[19]