Protolabs Announces Fourth Quarter and Full-Year 2024 Financial Results
Proto Labs, Inc. (“Protolabs” or the “Company”), a global leader in digital manufacturing services, has released its financial results for the fourth quarter and full year ending December 31, 2024. Despite facing economic headwinds, the company continued to demonstrate resilience by maintaining strong operational efficiencies, expanding its revenue streams, and enhancing shareholder value.
Fourth Quarter 2024 Financial Performance
During the fourth quarter of 2024, Protolabs reported a total revenue of $121.8 million, representing a 2.6% decline compared to the $125.0 million achieved in the fourth quarter of 2023. Despite this overall decline, the revenue generated through the Protolabs Network increased significantly, reaching $26.5 million, a 17.9% increase from the same quarter in 2023. This growth highlights the increasing reliance on and success of the company’s digital manufacturing network.
The company posted a net loss of $0.4 million, or $(0.02) per diluted share, a notable improvement compared to the net loss of $7.0 million, or $0.27 per diluted share, in the fourth quarter of 2023. However, on a non-GAAP basis, Protolabs achieved a net income of $9.4 million, or $0.38 per diluted share, slightly lower than the $11.8 million, or $0.46 per diluted share, recorded in the same quarter of the previous year.
Full-Year 2024 Financial Performance
For the full year 2024, Protolabs generated total revenue of $500.9 million, representing a modest 0.6% decrease from the $503.9 million recorded in 2023. The revenue generated through the Protolabs Network continued its upward trajectory, reaching $100.4 million, a significant 21.6% increase compared to 2023. This increase underscores the company’s continued expansion into network-driven digital manufacturing solutions.
The company’s full-year net income was reported at $16.6 million, or $0.66 per diluted share, compared to $17.2 million, or $0.66 per diluted share, in the prior year. On a non-GAAP basis, net income stood at $41.2 million, or $1.63 per diluted share, slightly lower than the $41.6 million, or $1.59 per diluted share, recorded in 2023.
Protolabs maintained strong gross margins throughout 2024, with a reported gross margin of 44.6% of revenue, compared to 44.1% in 2023. On a non-GAAP basis, the company’s gross margin improved to 45.2%, up from 44.7% in the prior year. These results highlight Protolabs’ operational efficiency and ability to sustain profitability despite external market challenges.
The company’s cash flow from operations was $77.8 million for the year, a solid increase from $73.3 million in 2023. This improved cash flow provides the company with significant financial flexibility to pursue strategic investments and shareholder value initiatives.
Strategic Business Initiatives and Operational Enhancements
Protolabs’ President and Chief Executive Officer, Rob Bodor, described 2024 as a “transformational year” for the company. “We delivered strong financial results, including expanded gross margins, increased earnings per share, and grew our industry-leading cash flow,” said Bodor.
The company made significant strides in evolving beyond prototyping and into full-scale production manufacturing. As part of this transformation, Protolabs reorganized its internal structure by establishing regional go-to-market teams and a new global operations organization. The go-to-market teams are dedicated to optimizing the customer experience, from initial prototyping to full-scale production, while the operations organization ensures seamless and efficient global fulfillment capabilities.
The company’s strategic shift is beginning to yield positive results. In 2024, the number of customers utilizing both the Factory and Network services increased by 50%, and revenue per customer also grew compared to 2023. These indicators suggest that Protolabs’ hybrid manufacturing approach is resonating with its customer base and driving sustainable growth.
Looking ahead to 2025, Protolabs is committed to driving revenue growth through targeted investments. These include increasing marketing efforts to strengthen the company’s positioning as a production manufacturer, enhancing sales enablement tools and processes, and continuing to expand its production manufacturing capabilities.
Financial Commentary from CFO
Dan Schumacher, Chief Financial Officer of Protolabs, emphasized the company’s solid financial position and ability to return value to shareholders while simultaneously executing its long-term transformation strategy. “We delivered solid fourth quarter and fiscal year 2024 cash flow and returned capital to shareholders while transforming the Company for future growth. The margin profile of Protolabs’ combined Factory and Network model is unparalleled in the digital manufacturing services space,” said Schumacher. “We will continue to invest across the business, which we believe will drive growth in 2025 and sustain our industry-leading cash flow and profitability advantages.”
Additional Full-Year 2024 Highlights
- The company served 51,552 customer contacts throughout the year.
- Revenue per customer contact increased 3.1% year-over-year to $9,716.
- EBITDA was $55.7 million.
- Adjusted EBITDA was $78.3 million, representing 15.6% of revenue, compared to $83.2 million, or 16.5% of revenue, in 2023.
- Cash and investment balances stood at $120.9 million as of December 31, 2024.
First Quarter 2025 Outlook
For the first quarter of 2025, Protolabs expects to generate revenue in the range of $120 million to $128 million. The company projects first-quarter 2025 diluted net income per share to be between $0.08 and $0.16, with non-GAAP diluted net income per share estimated to be between $0.26 and $0.34.
Stock Repurchase Program
On February 4, 2025, Protolabs’ board of directors approved a new $100 million stock repurchase program. Under this program, the company may repurchase shares of its common stock periodically, either through open-market transactions or privately negotiated deals. The actual timing and execution of repurchases will depend on various factors, including stock price, market conditions, and strategic business considerations. The stock repurchase program reflects the company’s confidence in its long-term growth trajectory and commitment to enhancing shareholder value.
Non-GAAP Financial Measures
Protolabs has included several non-GAAP financial measures in its earnings report to provide investors with additional insights into its financial performance. These measures include adjusted EBITDA, non-GAAP net income, non-GAAP operating margin, and non-GAAP revenue growth by region and service. The company believes these metrics offer a clearer picture of its underlying business trends and operational efficiencies.
A reconciliation of GAAP to non-GAAP financial metrics is available in the earnings press release, offering transparency to investors and facilitating a comprehensive understanding of the company’s financial health.
Conference Call Details
Protolabs has scheduled a conference call to discuss its fourth quarter and full-year 2024 financial results, as well as its first-quarter 2025 outlook. The call will take place on February 7, 2025, at 8:30 a.m. EST. Investors and analysts can access the call by dialing 877-709-8150 (U.S.) or 201-689-8354 (International). A simultaneous webcast and presentation will be available via the investor relations section of the Protolabs website. A replay of the call will be accessible for 14 days following the event.
Despite a challenging economic environment, Protolabs remains well-positioned for future growth. With a strategic focus on expanding its digital manufacturing capabilities, enhancing operational efficiencies, and returning value to shareholders, the company is poised for a strong 2025. As Protolabs continues to execute its transformation strategy, investors can look forward to sustained profitability and industry leadership in digital manufacturing services.
