Protolabs Reports Financial Results for the Fourth Quarter and Full Year 2022

Rhea-AI Summary

Proto Labs reported fourth quarter 2022 revenue of $115.6 million, a decline of 6.5% from $123.6 million in Q4 2021. The full year 2022 revenue reached a record $488.4 million. A net loss of $115.1 million was attributed to a goodwill impairment charge of $118 million, translating to a loss of $4.24 per diluted share. Despite challenges, revenue from the digital network powered by Hubs grew 49.6% year-over-year. The board authorized an increase in the share repurchase program to $250 million, with $132.3 million remaining for repurchases. CEO Rob Bodor highlighted ongoing strategic investments for growth in 2023.

Positive

• Record annual revenue of $488.4 million in 2022.
• 49.6% growth in revenue from the digital network powered by Hubs in Q4 2022.
• Share repurchase authorization increased to $250 million.

Negative

• Q4 2022 revenue declined 6.5% year-over-year.
• Net loss of $115.1 million in Q4 2022 due to goodwill impairment.
• Gross margin decreased to 44.1% in 2022 from 45.6% in 2021.

Revenue of $115.6 million in the Fourth Quarter of 2022

Record Annual Revenue of $488.4 million in 2022

Increases share repurchase authorization to $250 million

MAPLE PLAIN, Minn.--(BUSINESS WIRE)-- Proto Labs, Inc. (the "Company" or "Protolabs") (NYSE: PRLB), the world’s leading provider of digital manufacturing services, today announced financial results for the fourth quarter and full year ended December 31, 2022.

Fourth Quarter 2022 Highlights include:

• Revenue for the fourth quarter of 2022 was $115.6 million, representing a 6.5 percent decrease compared to revenue of $123.6 million in the fourth quarter of 2021.
• Revenue generated from our digital network powered by Hubs was $14.8 million in the fourth quarter, representing growth of 49.6 percent over the fourth quarter of 2021 and 22.2 percent sequential growth compared to the third quarter of 2022.
• Net loss for the fourth quarter of 2022 was $115.1 million, or ($4.24) per diluted share, driven by a goodwill impairment charge of $118.0 million.
• Non-GAAP net income was $7.0 million, or $0.26 per diluted share. See “Non-GAAP Financial Measures” below.

Expanded Share Repurchase Program:

• On February 7, 2023, Protolabs' Board of Directors approved $50 million increase to existing Share Repurchase Program, bringing the total amount authorized under the program to $250 million.
• As of December 31, 2022, the Company has purchased $117.7 million under the program, which expires December 31, 2024.
• With the increased authorization, the Company has $132.3 million remaining to repurchase shares under the expanded program.

“In a challenging economic environment, impacted by inflation, slowing growth and continued supply chain challenges, our Protolabs and Hubs teams continued to delight our customers as together we build the most comprehensive digital manufacturing capabilities in the world,” said Rob Bodor, President and Chief Executive Officer. “Following the launch of several new offers in 2022 and early 2023, we are well-positioned to extend our market differentiation with quality internal manufacturing at speed and the expansive breadth and depth afforded by our curated network of manufacturing partners.”

Full Year 2022 Highlights include:

• Record annual revenue of $488.4 million in 2022.
• Protolabs served 56,333 unique product developers during the year.
• Gross margin was 44.1 percent of revenue in 2022, compared to 45.6 percent in 2021.
• EBITDA margin was (12.2 percent) of revenue in 2022 driven by a fourth quarter goodwill impairment charge of $118.0 million, compared to 16.5 percent in 2021.
• Adjusted EBITDA margin was 17.1 percent of revenue in 2022, compared to 18.3 percent in 2021. See “Non-GAAP Financial Measures” below.
• Net loss for 2022 was $103.5 million, or ($3.77) per diluted share.
• Non-GAAP net income was $41.1 million, or $1.50 per diluted share. See “Non-GAAP Financial Measures” below.
• Cash and investments balance was $106.5 million as of December 31, 2022.

“As we narrow our focus in 2023 on growth of our Injection Molding business and accelerating growth from the integrated Protolabs and Hubs CNC offer, we are managing expenses to enable continued strategic investments which we expect to drive profitable revenue growth,” said Dan Schumacher, Chief Financial Officer. “Combined with a healthy financial position and strong cash balance, disciplined cost management will help fuel growth of the business while returning capital to our shareholders.”

Expanded Share Repurchase Program

Under the expanded $250 million Share Repurchase Program, shares of the Company’s common stock may be repurchased periodically, including in the open market or privately negotiated transactions. The actual timing, manner, number, and value of shares repurchased under the program will be determined by management at its discretion and will depend on several factors, including the market price of Proto Labs’ common stock, general market and economic conditions, applicable requirements, and other business considerations. The Share Repurchase Program does not obligate the Company to acquire any particular amount of shares of the Company’s stock.

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 and revenue earned from our acquisition of Hubs (collectively, “non-GAAP revenue growth”). Management believes these 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 goodwill impairment charges, stock-based compensation expense, unrealized (gain) loss on foreign currency, costs related to the Japan closure activities and transaction costs (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 goodwill impairment charges, stock-based compensation expense, unrealized (gain) loss on foreign currency, costs related to the Japan closure activities and transaction costs (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 goodwill impairment charges, stock-based compensation expense, amortization expense, costs related to the closure of Japan, and transaction costs (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 gross margin excluding Japan, 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 excluding Japan, adjusted for goodwill impairment charges, stock-based compensation expense, amortization expense, costs related to the Japan closure activities and transaction costs (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 goodwill impairment charges, stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency, costs related to the closure of Japan, and transaction costs (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 gross margin excluding Japan, non-GAAP operating margin, non-GAAP operating margin excluding Japan, 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 fourth quarter and full year 2022 financial results and first quarter 2023 outlook today, February 10, 2023 at 8:30 a.m. EST. 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. EST 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/d3nzbm3z. 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 our supply network powered by Hubs unlocks advanced capabilities and volume pricing at higher quantities. 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 Securities and Exchange Commission. 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.

Proto Labs, Inc. Condensed Consolidated Balance Sheets (In thousands)
		December 31,				December 31,
		2022				2021
		(Unaudited)
Assets
Current assets
Cash and cash equivalents		$	56,558			$	65,929
Short-term marketable securities			23,568				11,580
Accounts receivable, net			76,225				80,051
Inventory			13,578				13,161
Income taxes receivable			4,042				1,321
Prepaid expenses and other current assets			12,597				11,450
Total current assets			186,568				183,492
Property and equipment, net			257,785				280,346
Goodwill			273,991				400,610
Other intangible assets, net			31,250				37,998
Long-term marketable securities			26,419				14,340
Operating lease assets			3,844				5,578
Finance lease assets			17,532				1,898
Other long-term assets			4,779				4,320
Total assets		$	802,168			$	928,582
Liabilities and shareholders' equity
Current liabilities
Accounts payable		$	17,356			$	25,364
Accrued compensation			12,743				13,704
Accrued liabilities and other			22,384				11,980
Current operating lease liabilities			1,561				3,298
Current finance lease liabilities			17,537				550
Total current liabilities			71,581				54,896
Long-term operating lease liabilities			2,255				2,245
Long-term finance lease liabilities			-				1,351
Long-term deferred tax liabilities			26,322				35,892
Other long-term liabilities			4,362				5,705
Shareholders' equity			697,648				828,493
Total liabilities and shareholders' equity		$	802,168			$	928,582

Proto Labs, Inc. Condensed Consolidated Statements of Operations (In thousands, except share and per share amounts) (Unaudited)
		Three Months Ended								Year Ended
		December 31,								December 31,
		2022				2021				2022				2021
Revenue
Injection Molding		$	44,885			$	53,905			$	200,578			$	226,117
CNC Machining			46,563				44,858				188,372				166,811
3D Printing			19,530				18,727				78,988				72,721
Sheet Metal			4,432				5,607				19,498				20,397
Other			197				485				962				2,052
Total revenue			115,607				123,582				488,398				488,098
Cost of revenue			67,000				68,170				272,933				265,407
Gross profit			48,607				55,412				215,465				222,691
Operating expenses
Marketing and sales			20,517				20,229				82,752				82,175
Research and development			8,906				10,386				38,222				44,241
General and administrative			17,774				11,747				67,544				55,933
Goodwill impairment			118,008				-				118,008				-
Closure of Japan business			534				-				6,922				-
Total operating expenses			165,739				42,362				313,448				182,349
(Loss) income from operations			(117,132	)			13,050				(97,983	)			40,342
Other income (expense), net			429				(118	)			106				(158	)
(Loss) income before income taxes			(116,703	)			12,932				(97,877	)			40,184
Provision for income taxes			(1,638	)			1,022				5,585				6,812
Net (loss) income		$	(115,065	)		$	11,910			$	(103,462	)		$	33,372
Net (loss) income per share:
Basic		$	(4.24	)		$	0.43			$	(3.77	)		$	1.21
Diluted		$	(4.24	)		$	0.43			$	(3.77	)		$	1.21
Shares used to compute net (loss) income per share:
Basic			27,136,821				27,555,357				27,409,838				27,617,627
Diluted			27,136,821				27,562,694				27,409,838				27,653,099

Proto Labs, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited)
		Year Ended
		December 31,
		2022				2021
Operating activities
Net (loss) income		$	(103,462	)		$	33,372
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			39,425				40,488
Stock-based compensation expense			17,545				19,095
Deferred taxes			(9,499	)			339
Changes in fair value of contingent consideration			-				(13,253	)
Loss on impairment of goodwill			118,008				-
Impairments related to closure of Japan business			2,842				-
Gain on disposal of property and equipment			(1,211	)			-
Other			35				842
Changes in operating assets and liabilities			(1,604	)			(25,641	)
Net cash provided by operating activities			62,079				55,242
Investing activities
Purchases of property, equipment and other capital assets			(21,686	)			(34,209	)
Proceeds from sales of property, equipment and other capital assets			4,108				-
Cash used for acquisitions, net of cash acquired			-				(127,413	)
Purchases of marketable securities			(46,872	)			(16,159	)
Proceeds from sales of marketable securities			1,998				64,913
Proceeds from call redemptions and maturities of marketable securities			19,360				18,204
Net cash used in investing activities			(43,092	)			(94,664	)
Financing activities
Proceeds from exercises of stock options and other			3,950				5,862
Purchases of shares withheld for tax obligations			(1,682	)			(4,225	)
Repurchases of common stock			(29,659	)			(23,279	)
Principal repayments of finance lease obligations			(531	)			(552	)
Other			-				(4	)
Net cash used in financing activities			(27,922	)			(22,198	)
Effect of exchange rate changes on cash and cash equivalents			(436	)			(54	)
Net decrease in cash and cash equivalents			(9,371	)			(61,674	)
Cash and cash equivalents, beginning of period			65,929				127,603
Cash and cash equivalents, end of period		$	56,558			$	65,929

Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Net Income per Share (In thousands, except share and per share amounts) (Unaudited)
		Three Months Ended								Year Ended
		December 31,								December 31,
		2022				2021				2022				2021
Non-GAAP net (loss) income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency, goodwill impairment, costs related to Japan closure activities and transaction costs
GAAP net (loss) income		$	(115,065	)		$	11,910			$	(103,462	)		$	33,372
Add back:
Stock-based compensation expense			4,210				3,556				17,545				19,095
Amortization expense			1,514				1,552				6,096				6,153
Unrealized (gain) loss on foreign currency			(490	)			215				252				556
Goodwill impairment			118,008				-				118,008				-
Costs related to Japan closure activities			534				-				6,922				-
Transaction costs 1			-				(4,705	)			-				(10,575	)
Total adjustments 2			123,776				618				148,823				15,229
Income tax benefits on adjustments 3			(1,753	)			(1,150	)			(4,271	)			(5,789	)
Non-GAAP net income		$	6,958			$	11,378			$	41,090			$	42,812
Non-GAAP net income per share:
Basic		$	0.26			$	0.41			$	1.50			$	1.55
Diluted		$	0.26			$	0.41			$	1.50			$	1.55
Shares used to compute non-GAAP net income per share:
Basic			27,136,821				27,555,357				27,409,838				27,617,627
Diluted			27,151,991				27,562,694				27,433,257				27,653,099

1	Transaction costs include direct costs incurred in the Company's acquisition of Hubs, Inc. and the impact of changes in the fair value of acquisition-related contingent consideration obligations.
2	Stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency, goodwill impairment, costs related to Japan closure activities and transaction costs were included in the following GAAP consolidated statement of operations categories:

		Three Months Ended								Year Ended
		December 31,								December 31,
		2022				2021				2022				2021
Cost of revenue		$	840			$	990			$	3,541			$	3,964
Marketing and sales			816				895				3,295				3,736
Research and development			488				689				2,190				2,833
General and administrative			3,580				(2,171	)			14,615				4,140
Goodwill impairment			118,008				-				118,008				-
Closure of Japan business			534				-				6,922				-
Total operating expenses			123,426				(587	)			145,030				10,709
Other (income) expense, net			(490	)			215				252				556
Total adjustments		$	123,776			$	618			$	148,823			$	15,229

3

For the three-month and year-ended periods ended December 31, 2022 and 2021, income tax effects were calculated using the effective tax rate for the relevant jurisdictions. The Company's non-GAAP tax rates differ from its GAAP tax rates due primarily to the mix of activity incurred in domestic and foreign tax jurisdictions and removing effective tax rate benefits from stock-based compensation activity in the quarter.

Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Gross Margin (In thousands) (Unaudited)
		Three Months Ended								Year Ended								Three Months Ended
		December 31,								December 31,								September 30,
		2022				2021				2022				2021				2022				2021
Revenue		$	115,607			$	123,582			$	488,398			$	488,098			$	121,721			$	125,342
Gross Profit			48,607				55,412				215,465				222,691				53,632				55,324
GAAP gross margin			42.0	%			44.8	%			44.1	%			45.6	%			44.1	%			44.1	%
Add back:
Stock-based compensation expense			498				648				2,172				2,595				560				644
Amortization expense			342				342				1,369				1,369				342				342
Total adjustments			840				990				3,541				3,964				902				986
Non-GAAP gross profit		$	49,447			$	56,402			$	219,006			$	226,655			$	54,534			$	56,310
Non-GAAP gross margin			42.8	%			45.6	%			44.8	%			46.4	%			44.8	%			44.9	%

Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Gross Margin Excluding Japan (In thousands) (Unaudited)
		Three Months Ended								Year Ended
		December 31,								December 31,
		2022				2021				2022				2021
Revenue		$	115,607			$	123,582			$	488,398			$	488,098
Revenue excluding Japan		$	115,607			$	120,074			$	480,169			$	474,857
Gross Profit			48,607				55,412				215,465				222,691
GAAP gross margin			42.0	%			44.8	%			44.1	%			45.6	%
Less: Japan gross (loss) profit			(93	)			1,568				3,057				5,413
Gross Profit excluding Japan			48,700				53,844				212,408				217,278
GAAP gross margin excluding Japan			42.1	%			44.8	%			44.2	%			45.8	%
Add back:
Stock-based compensation expense			498				648				2,172				2,595
Amortization expense			342				342				1,369				1,369
Less:
Japan stock-based compensation expense			-				26				61				96
Japan amortization expense			-				-				-				-
Total adjustments			840				964				3,480				3,868
Non-GAAP gross profit excluding Japan		$	49,540			$	54,808			$	215,888			$	221,146
Non-GAAP gross margin excluding Japan			42.9	%			45.6	%			45.0	%			46.6	%

Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Operating Margin (In thousands) (Unaudited)
		Three Months Ended								Year Ended
		December 31,								December 31,
		2022				2021				2022				2021
Revenue		$	115,607			$	123,582			$	488,398			$	488,098
(Loss) income from operations			(117,132	)			13,050				(97,983	)			40,342
GAAP operating margin			(101.3	)%			10.6	%			(20.1	)%			8.3	%
Add back:
Stock-based compensation expense			4,210				3,556				17,545				19,095
Amortization expense			1,514				1,552				6,096				6,153
Transaction costs 1			-				(4,705	)			-				(10,575	)
Goodwill impairment			118,008				-				118,008				-
Costs related to Japan closure activities			534				-				6,922				-
Total adjustments			124,266				403				148,571				14,673
Non-GAAP income from operations		$	7,134			$	13,453			$	50,588			$	55,015
Non-GAAP operating margin			6.2	%			10.9	%			10.4	%			11.3	%

1	Transaction costs include direct costs incurred in the Company's acquisition of Hubs, Inc. and the impact of changes in the fair value of acquisition-related contingent consideration obligations.

Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Operating Margin Excluding Japan (In thousands) (Unaudited)
		Three Months Ended								Year Ended
		December 31,								December 31,
		2022				2021				2022				2021
Revenue		$	115,607			$	123,582			$	488,398			$	488,098
Revenue excluding Japan		$	115,607			$	120,074			$	480,169			$	474,857
(Loss) income from operations			(117,132	)			13,050				(97,983	)			40,342
GAAP operating margin			(101.3	)%			10.6	%			(20.1	)%			8.3	%
Less: Japan (loss) income from operations			(594	)			154				(1,424	)			(1,020	)
(Loss) income from operations excluding Japan			(116,538	)			12,896				(96,559	)			41,362
GAAP operating margin excluding Japan			(100.8	)%			10.7	%			(20.1	)%			8.7	%
Add back:
Stock-based compensation expense			4,210				3,556				17,545				19,095
Amortization expense			1,514				1,552				6,096				6,153
Transaction costs 1			-				(4,705	)			-				(10,575	)
Goodwill impairment			118,008				-				118,008				-
Costs related to Japan closure activities			534				-				6,922				-
Less:
Japan stock-based compensation expense			20				163				406				626
Japan amortization expense			-				-				-				-
Total adjustments			124,246				240				148,165				14,047
Non-GAAP income from operations excluding Japan		$	7,708			$	13,136			$	51,606			$	55,409
Non-GAAP operating margin excluding Japan			6.7	%			10.9	%			10.7	%			11.7	%

1	Transaction costs include direct costs incurred in the Company's acquisition of Hubs, Inc. and the impact of changes in the fair value of acquisition-related contingent consideration obligations.

Proto Labs, Inc. Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA (In thousands) (Unaudited)
		Three Months Ended								Year Ended
		December 31,								December 31,
		2022				2021				2022				2021
Revenue		$	115,607			$	123,582			$	488,398			$	488,098
GAAP net (loss) income			(115,065	)			11,910				(103,462	)			33,372
GAAP net (loss) income margin			(99.5	)%			9.6	%			(21.2	)%			6.8	%
Add back:
Amortization expense		$	1,514			$	1,552			$	6,096			$	6,153
Depreciation expense			7,930				8,705				33,329				34,335
Interest income, net			(509	)			(23	)			(968	)			(230	)
Tax expense			(1,638	)			1,022				5,585				6,812
EBITDA			(107,768	)			23,166				(59,420	)			80,442
EBITDA Margin			(93.2	)%			18.7	%			(12.2	)%			16.5	%
Add back:
Stock-based compensation expense			4,210				3,556				17,545				19,095
Unrealized (gain) loss on foreign currency			(490	)			215				252				556
Costs related to Japan closure activities			534				-				6,922				-
Goodwill impairment			118,008				-				118,008				-
Transaction costs 1			-				(4,705	)			-				(10,575	)
Total adjustments			122,262				(934	)			142,727				9,076
Adjusted EBITDA		$	14,494			$	22,232			$	83,307			$	89,518
Adjusted EBITDA Margin			12.5	%			18.0	%			17.1	%			18.3	%

1	Transaction costs include direct costs incurred in the Company's acquisition of Hubs, Inc. and the impact of changes in the fair value of acquisition-related contingent consideration obligations.

Proto Labs, Inc. Comparison of GAAP to Non-GAAP Revenue Growth by Region (In thousands) (Unaudited)
		Three Months Ended December 31, 2022																Three Months Ended December 31, 2021
		GAAP				Foreign Currency1				Hubs Acquisition				Non-GAAP				GAAP				% Change3				% Change Organic4
Revenues
United States		$	92,278			$	-			$	-			$	92,278			$	97,934				(5.8)	%			(5.8	)%
Europe			23,329				3,216				-				26,545				22,140				5.4				19.9
Japan			-				-				-				-				3,508				(100.0	)			(100.0	)
Total Revenue		$	115,607			$	3,216			$	-			$	118,823			$	123,582				(6.5	)%			(3.9	)%

		Year Ended December 31, 2022																Year Ended December 31, 2021
		GAAP				Foreign Currency1				Hubs Acquisition2				Non-GAAP				GAAP				% Change3				% Change Organic4
Revenues
United States		$	387,399			$	-			$	(1,049	)		$	386,350			$	384,458				0.8	%			0.5	%
Europe			92,770				10,381				(1,279	)			101,872				90,399				2.6				12.7
Japan			8,229				1,226				-				9,455				13,241				(37.9	)			(28.6	)
Total Revenue		$	488,398			$	11,607			$	(2,328	)		$	497,677			$	488,098				0.1	%			2.0	%

1 Revenue for the three-month and year-ended periods ended December 31, 2022 has been recalculated using 2021 foreign currency exchange rates in effect during comparable periods to provide information useful in evaluating the underlying business trends excluding the impact of changes in foreign currency exchange rates.
2 Revenue for the year-ended period ended December 31, 2022 has been recalculated to exclude revenue earned from the Company's acquisition of Hubs, Inc. for the period from January 1, 2022 to January 21, 2022 to provide information useful in evaluating the underlying business trends excluding the impact of acquisitions. The Hubs, Inc. acquisition occurred on January 22, 2021 and was included in 2021 revenue after that date.
3 This column presents the percentage change from GAAP revenue for the three-month and year-ended periods ended December 31, 2021 to GAAP revenue for the three-month and year-ended periods ended December 31, 2022.
4 This column presents the percentage change from GAAP revenue for the three-month and year-ended periods ended December 31, 2021 to non-GAAP revenue for the three-month and year-ended periods ended December 31, 2022 (as recalculated using the foreign currency exchange rates in effect during the three-month and year-ended periods ended December 31, 2021, excluding the impact of Hubs, Inc. acquisition) in order to provide a constant-currency comparison.

Proto Labs, Inc. Comparison of GAAP to Non-GAAP Revenue Growth by Service Line (In thousands) (Unaudited)
		Three Months Ended December 31, 2022																Three Months Ended December 31, 2021
		GAAP				Foreign Currency1				Hubs Acquisition				Non-GAAP				GAAP				% Change3				% Change Organic4
Revenues
Injection Molding		$	44,885			$	1,383			$	-			$	46,268			$	53,905				(16.7	)%			(14.2	)%
CNC Machining			46,563				1,083				-				47,646				44,858				3.8				6.2
3D Printing			19,530				726				-				20,256				18,727				4.3				8.2
Sheet Metal			4,432				24				-				4,456				5,607				(21.0	)			(20.5	)
Other			197				-				-				197				485				(59.4	)			(59.4	)
Total Revenue		$	115,607			$	3,216			$	-			$	118,823			$	123,582				(6.5	)%			(3.9	)%

		Year Ended December 31, 2022																Year Ended December 31, 2021
		GAAP				Foreign Currency1				Hubs Acquisition2				Non-GAAP				GAAP				% Change3				% Change Organic4
Revenues
Injection Molding		$	200,578			$	5,485			$	(189	)		$	205,874			$	226,117				(11.3	)%			(9.0	)%
CNC Machining			188,372				3,776				(1,637	)			190,511				166,811				12.9				14.2
3D Printing			78,988				2,279				(408	)			80,859				72,721				8.6				11.2
Sheet Metal			19,498				63				(84	)			19,477				20,397				(4.4	)			(4.5	)
Other			962				4				(10	)			956				2,052				(53.1	)			(53.4	)
Total Revenue		$	488,398			$	11,607			$	(2,328	)		$	497,677			$	488,098				0.1	%			2.0	%

1 Revenue for the three-month and year-ended periods ended December 31, 2022 has been recalculated using 2021 foreign currency exchange rates in effect during comparable periods to provide information useful in evaluating the underlying business trends excluding the impact of changes in foreign currency exchange rates.
2 Revenue for the year-ended period ended December 31, 2022 has been recalculated to exclude revenue earned from the Company's acquisition of Hubs, Inc. for the period from January 1, 2022 to January 21, 2022 to provide information useful in evaluating the underlying business trends excluding the impact of acquisitions. The Hubs, Inc. acquisition occurred on January 22, 2021 and was included in 2021 revenue after that date.
3 This column presents the percentage change from GAAP revenue for the three-month and year-ended periods ended December 31, 2021 to GAAP revenue for the three-month and year-ended periods ended December 31, 2022.
4 This column presents the percentage change from GAAP revenue for the three-month and year-ended periods ended December 31, 2021 to non-GAAP revenue for the three-month and year-ended periods ended December 31, 2022 (as recalculated using the foreign currency exchange rates in effect during the three-month and year-ended periods ended December 31, 2021, excluding the impact of Hubs, Inc. acquisition) in order to provide a constant-currency comparison.

Proto Labs, Inc. Product Developer Information (Unaudited)
		Three Months Ended								Year Ended
		December 31,								December 31,
		2022				2021				2022				2021
Unique product developers and engineers served			22,205				23,376				56,333				55,330

 

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Investor Relations Contact

Protolabs

Ryan Johnsrud, 612-225-4873

Manager – Investor Relations and FP&A

ryan.johnsrud@protolabs.com



Media Contact

Protolabs

Brent Renneke, 763-479-7704

PR & Media Strategist

brent.renneke@protolabs.com

Source: Proto Labs, Inc.

FAQ

What were Proto Labs' fourth quarter 2022 financial results?

Proto Labs reported revenue of $115.6 million, a 6.5% decrease from $123.6 million in Q4 2021, with a net loss of $115.1 million.

What is the record revenue for Proto Labs for the year 2022?

Proto Labs achieved a record annual revenue of $488.4 million in 2022.

What is the updated share repurchase program for Proto Labs?

The share repurchase program has been increased to $250 million, with $132.3 million remaining for repurchases as of December 31, 2022.

How did the digital network powered by Hubs perform in Q4 2022?

Revenue from the digital network powered by Hubs was $14.8 million, reflecting a 49.6% year-over-year growth.

What was the impact of the goodwill impairment on Proto Labs' financials?

The goodwill impairment charge of $118 million significantly contributed to a net loss of $115.1 million in Q4 2022.