Proto Labs, Inc. (NYSE:PRLB) Q1 2024 Earnings Conference Call May 3, 2024 8:30 AM ET Company Participants Jason Frankman - Vice President & Corporate Controller Rob Bodor - President & Chief Executive Officer Dan Schumacher - Chief Financial Officer Conference Call Participants Brian Drab - William Blair Greg Palm - Craig Hallum Capital James Ricchiuti - Needham & Company Operator Greetings. Welcome to Proto Labs First Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A q ...

First Quarter 2024 Financial Highlights: Exhibit 99.1 Protolabs Reports Financial Results for the First Quarter of 2024 Total Revenue of $128 Million; Protolabs Network Revenue up 39% YoY to $24 Million GAAP Earnings Per Share of $0.20, Non-GAAP Earnings Per Share of $0.40 MINNEAPOLIS – May 3, 2024 – Proto Labs, Inc. ("Protolabs" or the "Company") (NYSE: PRLB), the world's leading provider of digital manufacturing services, today announced financial results for the first quarter ended March 31, 2024. "We de ...

Financial Performance - Revenue for the year ended December 31, 2023, was $503.877 million, an increase of 3.0% compared to $488.398 million in 2022[273]. - Gross profit for 2023 was $221.993 million, up from $215.465 million in 2022, reflecting a gross margin of approximately 44.0%[273]. - Net income for 2023 was $17.220 million, compared to a net loss of $103.462 million in 2022, resulting in a net income per share of $0.66[273]. - The company reported a comprehensive income of $23.562 million for 2023, compared to a comprehensive loss of $121.000 million in 2022[273]. - Total current assets increased to $200.660 million in 2023 from $186.568 million in 2022, primarily driven by an increase in cash and cash equivalents[271]. - Total liabilities decreased significantly to $77.058 million in 2023 from $104.520 million in 2022, indicating improved financial health[271]. - Shareholders' equity remained stable at $695.295 million in 2023, slightly down from $697.648 million in 2022[271]. - Operating expenses for 2023 totaled $193.826 million, a decrease from $313.448 million in 2022, largely due to the absence of goodwill impairment charges[273]. - Net cash provided by operating activities increased to $73.27 million in 2023, up from $62.08 million in 2022, reflecting a 17.5% growth[279]. - Cash and cash equivalents increased to $83.790 million in 2023 from $56.558 million in 2022, reflecting improved liquidity[271]. Research and Development - Research and development costs were approximately $40.1 million, $38.2 million, and $44.2 million for the years ended December 31, 2023, 2022, and 2021, respectively[105]. - Research and development expenses for 2023 were approximately $40.1 million, compared to $38.2 million in 2022, reflecting a 5.0% increase[308]. Market and Competitive Factors - The company emphasizes the importance of quick turnaround times for custom parts to meet customer expectations, which is critical for business performance[106]. - Competitive pricing is a significant factor in demand for the company's product lines, and any failure to meet price expectations could negatively impact revenue[107]. - The ability to meet specific quality specifications is crucial for maintaining demand for the company's products, and failure in this area could adversely affect operations[108]. - The volume of new part designs processed and the diversity of the customer base are essential for identifying business opportunities and meeting customer needs[110]. Risks and Challenges - The company faces risks related to the loss of key management personnel, which could disrupt operations and hinder business growth[111]. - Supply chain risks exist due to reliance on single or limited source suppliers, which could adversely affect customer relationships and financial condition[112]. - The company may face challenges in protecting its intellectual property, which is critical for maintaining a competitive position in the market[114]. - Fluctuations in operating results and financial condition may occur on a quarterly and annual basis, impacting stock market performance[124]. - The company is subject to payment-related risks, including potential increases in interchange fees that could lower profitability[128]. - The company has not used forward contracts or currency borrowings to hedge foreign currency risk, which could materially impact results of operations[241]. Stock and Dividends - The company has never declared or paid any cash dividends and does not anticipate doing so in the foreseeable future[135]. - The common stock traded between $40.47 and $23.01 during the year ended December 31, 2023, indicating significant volatility[129]. - The company’s stock price may decline if analysts publish unfavorable research or downgrade the stock[131]. Compliance and Internal Controls - The company’s internal controls over financial reporting must comply with the Sarbanes-Oxley Act, and failure to do so could harm the business and stock price[132]. - The company maintained effective internal control over financial reporting as of December 31, 2023, according to the COSO criteria[262]. 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[241]. - The company has ceased operations in Japan as of December 2023, following the closure of its manufacturing facility in May 2022[283]. Investments and Assets - The company’s investment policy focuses on capital preservation and liquidity, maintaining a portfolio of debt securities with maturities ranging from one to three years[238]. - Total long-lived assets decreased to $253.7 million as of December 31, 2023, from $257.8 million in 2022[378]. - Expenditures for additions to long-lived assets totaled $28.1 million in 2023, compared to $21.7 million in 2022[378]. Taxation - The company recorded an income tax provision of $10.7 million for the year ended December 31, 2023, with an effective income tax rate of 38.4%[365]. - The effective tax rate increased to 38.4% for the year ended December 31, 2023, compared to a negative 5.7% in 2022, primarily due to the impact of goodwill impairment and a shift from a loss to income position[366][367].

Forward-looking Statements and Non-GAAP Measures • Non-GAAP Financial Measures: Protolabs management believes that presenting certain nonGAAP financial measures provides meaningful information to investors in understanding operating results and may enhance investors' ability to analyze financial and business trends. Non-GAAP measures are not a substitute for GAAP measures and should be considered together with the GAAP financial measures. As calculated, our non-GAAP measures may not be comparable to other s ...

Financial Data and Key Metrics - Revenue for 2023 exceeded $500 million for the first time in the company's history, marking a record year [7] - Q4 2023 revenue grew 7.2% year-over-year in constant currencies, reaching $125 million [38] - ProtoLabs Network revenue in Q4 2023 was $22.5 million, up 49% year-over-year in constant currencies [38] - Full-year 2023 ProtoLabs Network revenue grew 69% year-over-year to $82.6 million, with a gross margin of 30.6% [24] - Q4 2023 non-GAAP diluted net income per share was $0.46, exceeding the guidance midpoint of $0.30 [22] - Cash flow from operations in Q4 2023 was $17.2 million, with $110.8 million in cash and investments and zero debt on the balance sheet [23] - Full-year 2023 non-GAAP earnings per share increased 6% to $1.59, with adjusted EBITDA of $83.2 million [54] Business Line Performance - Injection molding revenue grew 14% year-over-year in Q4 2023, driven by larger parts orders [21] - CNC machining revenue fulfilled by the ProtoLabs Network grew 80% in 2023, driven by lower part prices, improved tolerances, and broader finishing options [15] - 3D printing revenue grew 3% year-over-year in Q4 2023, while sheet metal revenue declined 8% [51] - The combined factory and network strategy drove 70% growth in the ProtoLabs Network in 2023 [12] Market Performance - The company served 53,464 customer contacts in 2023, with revenue per contact increasing 9% over 2022 [24] - Strong performance in aerospace and automotive sectors, with continued growth in medical applications [50] - The U.S. market showed significant growth, particularly in production-oriented business [65] Strategic Direction and Industry Competition - The company's strategy focuses on combining factory and network offerings, which has proven successful with 70% growth in the ProtoLabs Network [12] - Investments in digital quality, competitive pricing, and consultative design services have transformed the injection molding business [13] - The company aims to increase revenue per customer by driving larger orders and expanding the use of combined factory and network offerings [16][17] - ProtoLabs is shifting from prototyping to production, targeting a larger market and higher average order values [36] Management Commentary on Operating Environment and Future Outlook - Management highlighted the challenging global manufacturing demand environment in 2023 but noted the company's ability to take market share [12] - The company expects revenue growth in 2024, driven by increased customer adoption of combined factory and network offerings [16] - Management emphasized the importance of investing in employees and improving the employee experience to sustain innovation [37] - The company anticipates a softer start to 2024 due to lower order levels in December and early January but expects performance to align with historical trends by the end of Q1 [39] Other Important Information - The company repurchased 4.9 million common shares in Q4 2023, returning substantial capital to shareholders [23] - ProtoLabs introduced a refreshed set of company values for the first time in over 10 years to guide future operations [37] - The company expects Q1 2024 revenue between $120 million and $128 million, with foreign currency having a favorable impact of $500,000 to $1 million [39] Q&A Session Summary Question: What is driving the increase in revenue per customer? - The increase in revenue per customer is attributed to the company's success in transitioning customers from prototyping to production, particularly with larger strategic customers [42][72] Question: How is the company managing the shift from prototyping to production? - The company is leveraging its combined factory and network offerings to serve customers throughout the product lifecycle, from prototyping to production [36][72] Question: What are the expectations for Q1 2024 profitability? - Q1 2024 profitability is expected to be lower due to a higher mix of network business, lower factory volume, and increased SG&A expenses [68][82] Question: Which verticals are showing the most traction in production business? - Aerospace, automotive, and medical sectors are showing strong traction in production business [50][66] Question: What metrics are being tracked to measure the success of the combined offering strategy? - The company is tracking metrics such as the number of customers using combined offerings, average revenue per customer, and customer wallet share [72][89] Question: How is the company addressing the softer start to 2024? - The company expects order levels to align with historical trends by the end of Q1 2024, despite a slower start in December and January [39][59]

Table of Contents Commission File Number: 001-35435 Proto Labs, Inc. (Exact name of registrant as specified in its charter) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________ FORM 10-Q (Mark One) þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __ ...

Proto Labs, Inc. (NYSE:PRLB) Q3 2023 Earnings Conference Call November 3, 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 James Ricchiuti - Needham and Company Greg Palm - Craig Hallum Capital Group Brian Drab - William Blair Ben Rose - Battle Road Research Operator Greetings and welcome to Proto Labs Third Quarter Fiscal Year 2023 Earnings Cal ...

| --- | --- | --- | --- | |-----------------------|-------|-------|-------| | | | | | | | | | | | Earnings Presentation | | | | | Q3 2023 | | | | | November 3, 2023 | | | | Global Digital Manufacturing Locations . Digital Factory @ Manufacturer in Digital Network Forward-looking Statements and Non-GAAP Measures • 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 factor ...

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 ...

Washington, D.C. 20549 ___________________________ FORM 10-Q (Mark One) þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Commission File Number: 001-35435 Proto Labs, Inc. (Exact name of registrant as specif ...