Proto Labs Q4 Earnings Call Highlights

Core Insights - The company reported a record fourth-quarter revenue of $136.5 million, marking an 11% year-over-year increase in constant currencies, and the first sequential revenue growth in Q4 since 2017 [2][3][6] - The CEO highlighted strong demand in CNC machining and sheet metal, contributing to double-digit growth, while U.S. CNC revenue grew 25% year-over-year [7][8] - The company ended 2025 with a healthy cash position of $142.4 million and zero debt, while guiding for 2026 revenue growth of 6% to 8% [5][20] Financial Performance - Fourth-quarter non-GAAP gross margin was 44.8%, up 140 basis points year-over-year, driven by higher volume and improved margins in U.S. factories [9] - Full-year 2025 revenue reached $533.1 million, a 5.7% increase in constant currencies, with U.S. revenue up 9.1% while Europe declined 7% [10] - Non-GAAP operating expenses for 2025 were $193.3 million, or 36.3% of revenue, slightly above the previous year [12] Demand Drivers - Exceptional demand for CNC machining and sheet metal was noted, with U.S. CNC revenue growing 35% in Q4 and 25% for the year [6][8] - Injection molding and plastic 3D printing experienced modest declines, attributed to weakness in medical devices and lower prototyping demand [8] Strategic Initiatives - The company is focusing on a strategy to serve customers from prototype through production, anchored by four pillars aimed at enhancing customer experience and operational efficiency [13][16] - Plans for a reorganization of the technology group and the launch of "ProDesk" as a customer-facing experience were outlined, aimed at simplifying processes and accelerating innovation [15][18] 2026 Outlook - Management expects full-year 2026 GAAP revenue growth of 6% to 8%, with first-quarter revenue guidance of $130 million to $138 million [20] - The company plans to reallocate resources to fund transformation efforts without broadly expanding spending, indicating a focus on cost management [21]