Total Revenue of $126 Million

GAAP Earnings Per Share of $0.18, Non-GAAP Earnings Per Share of $0.38

MINNEAPOLIS — (BUSINESS WIRE) — August 2, 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 second quarter ended June 30, 2024.

Second Quarter 2024 Financial Highlights:

• Revenue was $125.6 million, a 2.8% increase compared to the second quarter of 2023.
• Revenue generated from Protolabs Network was $24.7 million, a 22.0% increase compared to the second quarter of 2023.
• Net income was $4.5 million, or $0.18 per diluted share, compared to net loss of $0.4 million, or $0.01 per diluted share, in the second quarter of 2023.
• Non-GAAP net income was $9.5 million, or $0.38 per diluted share, compared to $8.7 million, or $0.33 per diluted share, in the second quarter of 2023. See “Non-GAAP Financial Measures” below.
• EBITDA was $15.2 million, or 12.1% of revenue. See “Non-GAAP Financial Measures” below.
• Adjusted EBITDA was $19.3 million, or 15.4% of revenue, compared to $19.2 million, or 15.7% of revenue, in the second quarter of 2023. See “Non-GAAP Financial Measures” below.

"We executed well through the first half of 2024 despite operating in a challenging macroeconomic environment,” said Rob Bodor, President and Chief Executive Officer. "We continue to make progress on driving customer adoption of our combined offer fulfilled through both Factory and Network, while also increasing our revenue per customer. We have aligned our organization to support our initiatives, accelerate our next phase of growth, and improve our efficiency."

Dan Schumacher, Chief Financial Officer, commented, "Our results were driven by strong performance in our Network business and gross margin improvement across both Factory and Network. We remain committed to returning capital to shareholders as we repurchased $10.9 million of common stock in the quarter."

Additional Second Quarter 2024 Highlights:

• Customer contact information
  • Protolabs served 22,456 customer contacts during the quarter.
  • Revenue per customer contact increased 7.0% year-over-year to $5,595.
• Gross margin was 45.0% of revenue, compared to 43.4% of revenue in the second quarter of 2023.
• Non-GAAP gross margin was 45.7% of revenue, compared to 44.1% of revenue in the second quarter of 2023. See "Non-GAAP Financial Measures" below.
• Cash flow from operations was $14.4 million in the second quarter of 2024.
• Cash and investments balance was $112.9 million as of June 30, 2024.

Third Quarter 2024 Outlook

For the third quarter of 2024, the Company expects to generate revenue between $117 million and $125 million.

The Company expects third quarter 2024 diluted net income per share between $0.10 and $0.18, and non-GAAP diluted net income per share between $0.29 and $0.37. See "Non-GAAP Financial Measures" below.

Non-GAAP Financial Measures

The Company has included non-GAAP revenue growth by region and by service line that excludes the impact of changes in foreign currency exchange rates (collectively, “non-GAAP revenue growth”). Management believes these metrics, when viewed in conjunction with the comparable GAAP metrics, are useful in evaluating the underlying business trends and ongoing operating performance of the Company.

The Company has included earnings before interest, taxes, depreciation and amortization (“EBITDA”) and EBITDA, adjusted for stock-based compensation expense, unrealized (gain) loss on foreign currency and costs related to the Japan closure activities (collectively, “Adjusted EBITDA”), in this press release to provide investors with additional information regarding the Company’s financial results. The Company has also included earnings before interest, taxes, depreciation and amortization margin (“EBITDA margin”) and EBITDA margin, adjusted for stock-based compensation expense, unrealized (gain) loss on foreign currency and costs related to the Japan closure activities (collectively, “Adjusted EBITDA margin”), in this press release to provide investors with additional information regarding the Company’s financial results.

The Company has included non-GAAP gross margin, adjusted for stock-based compensation expense and amortization expense in this press release to provide investors with additional information regarding the Company’s financial results.

The Company has included non-GAAP operating margin, adjusted for stock-based compensation expense, amortization expense and costs related to the closure of Japan (collectively, “non-GAAP operating margin”), in this press release to provide investors with additional information regarding the Company’s financial results.

The Company has included non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and costs related to the closure of Japan (collectively, “non-GAAP net income”), in this press release to provide investors with additional information regarding the Company’s financial results.

The Company has provided below reconciliations of GAAP to non-GAAP net income, non-GAAP gross margin, non-GAAP operating margin, non-GAAP revenue growth by region and by service, and Adjusted EBITDA and Adjusted EBITDA margin, the most directly comparable measures calculated and presented in accordance with GAAP. These non-GAAP measures are used by the Company’s management and board of directors to understand and evaluate operating performance and trends and provide useful measures for period-to-period comparisons of the Company’s business. Accordingly, the Company believes that these non-GAAP measures provide useful information to investors and others in understanding and evaluating operating results in the same manner as our management and board of directors.

Conference Call

The Company has scheduled a conference call to discuss its second quarter 2024 financial results and third quarter 2024 outlook today, August 2, 2024 at 8:30 a.m. EDT. To access the call in the U.S. please dial 877-709-8150 or outside the U.S. dial 201-689-8354 at least five minutes prior to the 8:30 a.m. EDT start time. No participant code is required. A simultaneous webcast of the call and accompanying presentation will be available via the investor relations section of the Protolabs website and the following link: https://edge.media-server.com/mmc/p/b94yu8yp/. A replay will be available for 14 days following the call on the investor relations section of the Protolabs website.

About Protolabs

Protolabs is the fastest and most comprehensive digital manufacturing service in the world. Our digital factories produce low-volume parts in days while Protolabs Network unlocks advanced capabilities and volume pricing through its highly vetted manufacturing partners. The result? One manufacturing source—from prototyping to production—for product developers, engineers, and supply chain teams across the globe. See what's next at protolabs.com.

Forward-Looking Statements

Statements contained in this press release regarding matters that are not historical or current facts are “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors which may cause the results of Protolabs to be materially different than those expressed or implied in such statements. Certain of these risk factors and others are described in the “Risk Factors” section within reports filed with the SEC. Other unknown or unpredictable factors also could have material adverse effects on Protolabs’ future results. The forward-looking statements included in this press release are made only as of the date hereof. Protolabs cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Protolabs expressly disclaims any intent or obligation to update any forward-looking statements to reflect subsequent events or circumstances.