Protolabs Reports Financial Results for the Third Quarter of 2022

Rhea-AI Summary

Proto Labs (NYSE: PRLB) reported a revenue of $121.7 million for Q3 2022, down 2.9% year-over-year from $125.3 million in Q3 2021. GAAP EPS was $0.14, while Non-GAAP EPS reached $0.40. The Hubs segment grew by 38.5% to $12.1 million. Despite a gross margin decline from 45.2% to 44.1%, cash from operations was strong at $20.5 million. The company acknowledges challenges in its Injection Molding business but remains optimistic about long-term growth and profitability.

Positive

• Hubs revenue increased by 38.5% YoY to $12.1 million.
• Generated $20.5 million in cash from operations in Q3 2022.
• Non-GAAP EPS of $0.40 exceeds GAAP EPS of $0.14, indicating strong underlying performance.

Negative

• Overall revenue decreased by 2.9% compared to Q3 2021.
• Gross margin fell from 45.2% to 44.1%, reflecting operational challenges.

Revenue of $121.7 million in the Third Quarter of 2022;

GAAP Earnings Per Share of $0.14, Non-GAAP Earnings Per Share of $0.40

MAPLE PLAIN, Minn.--(BUSINESS WIRE)-- Proto Labs, Inc. (NYSE: PRLB), the world’s leading provider of digital manufacturing services, today announced financial results for the third quarter ended September 30, 2022.

Third Quarter 2022 Highlights include:

• Revenue for the third quarter of 2022 was $121.7 million, representing a 2.9 percent decrease compared to revenue of $125.3 million in the third quarter of 2021.
• Hubs generated $12.1 million of revenue in the third quarter, representing year-over-year growth of 38.5 percent.
• On a GAAP basis, costs related to the closure of Japan operations were $1.2 million in the quarter. Total costs year to date are $6.4 million. These costs have been excluded from our Non-GAAP results. See “Non-GAAP Financial Measures” below.
• Net income was $4.0 million, or $0.14 per diluted share.
• Non-GAAP net income was $10.9 million, or $0.40 per diluted share.

“We experienced continued softening of our Injection Molding business, however, we are pleased with the continued growth of our other digital manufacturing services and Hubs business,” said Rob Bodor, President and Chief Executive Officer. “As we face an uncertain economic environment ahead, I am confident in our strategy and the value we bring to market, and the ability of our team to deliver long term revenue growth and profitability.”

Additional Third Quarter 2022 Highlights include:

• Protolabs served 23,816 unique product developers during the third quarter of 2022.
• Gross margin was 44.1 percent of revenue, compared to 45.2 percent of revenue in the second quarter of 2022.
• Non-GAAP gross margin was 44.8 percent of revenue, compared to 45.9 percent of revenue in the second quarter of 2022.
• EBITDA was $15.5 million, or 12.7 percent of revenue.
• Adjusted EBITDA was $22.0 million, or 18.0 percent of revenue.
• Cash and investments balance was $113.9 million as of September 30, 2022.

“Our financial position remains strong as we produced $20.5 million in cash from operations in the quarter,” said Dan Schumacher, Chief Financial Officer. “As we monitor the economy, we are tightening our cost controls and will continue to focus investments to fuel the execution of our strategy.”

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 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 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 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 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 stock-based compensation expense, amortization expense, costs related to the Japan closure activities and transaction costs (collectively, “non-GAAP operating margin excluding Japan”), 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, costs related to Japan closure activities 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 third quarter 2022 financial results and fourth quarter 2022 outlook today, November 4, 2022 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/gfmzxbyg. 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 world’s leading provider of digital manufacturing services. The e-commerce-based company offers injection molding, CNC machining, 3D printing, and sheet metal fabrication to product developers, engineers, and supply chain teams across the globe. Protolabs serves customers using in-house production capabilities that bring unprecedented speed in tandem with Hubs, a Protolabs Company, which serves customers through its network of premium manufacturing partners. Together, they help companies bring new ideas to market with the fastest and most comprehensive digital manufacturing service in the world. Visit protolabs.com for more information.

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.

Proto Labs, Inc.
Condensed Consolidated Balance Sheets
(In thousands)

		September 30,			December 31,
		2022			2021
		(Unaudited)
Assets
Current assets
Cash and cash equivalents		$	59,361		$	65,929
Short-term marketable securities			25,253			11,580
Accounts receivable, net			80,611			80,051
Inventory			14,617			13,161
Income taxes receivable			763			1,321
Prepaid expenses and other current assets			11,752			11,450
Total current assets			192,357			183,492
Property and equipment, net			259,856			280,346
Goodwill			383,558			400,610
Other intangible assets, net			31,907			37,998
Long-term marketable securities			29,257			14,340
Operating lease assets			4,293			5,578
Finance lease assets			1,524			1,898
Other long-term assets			4,186			4,320
Total assets		$	906,938		$	928,582
Liabilities and shareholders' equity
Current liabilities
Accounts payable		$	16,893		$	25,364
Accrued compensation			15,087			13,704
Accrued liabilities and other			25,478			11,980
Current operating lease liabilities			1,773			3,298
Current finance lease liabilities			1,484			550
Income taxes payable			5			-
Total current liabilities			60,720			54,896
Long-term operating lease liabilities			2,477			2,245
Long-term finance lease liabilities			-			1,351
Long-term deferred tax liabilities			26,864			35,892
Other long-term liabilities			6,031			5,705
Shareholders' equity			810,846			828,493
Total liabilities and shareholders' equity		$	906,938		$	928,582

Proto Labs, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except share and per share amounts)

(Unaudited)

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2022			2021			2022				2021
Revenue
Injection Molding		$	48,940		$	57,685		$	155,693			$	172,212
CNC Machining			47,489			43,658			141,809				121,953
3D Printing			19,823			18,589			59,458				53,994
Sheet Metal			5,219			4,854			15,066				14,790
Other			250			556			765				1,567
Total revenue			121,721			125,342			372,791				364,516
Cost of revenue			68,089			70,018			205,933				197,237
Gross profit			53,632			55,324			166,858				167,279
Operating expenses
Marketing and sales			20,594			21,422			62,235				61,946
Research and development			9,309			10,614			29,316				33,855
General and administrative			16,477			16,361			49,770				44,186
Closure of Japan business			1,194			-			6,388				-
Total operating expenses			47,574			48,397			147,709				139,987
Income from operations			6,058			6,927			19,149				27,292
Other income (loss), net			(24)			136			(323	)			(40)
Income before income taxes			6,034			7,063			18,826				27,252
Provision for income taxes			2,083			2,228			7,223				5,790
Net income		$	3,951		$	4,835		$	11,603			$	21,462
Net income per share:
Basic		$	0.14		$	0.17		$	0.42			$	0.78
Diluted		$	0.14		$	0.17		$	0.42			$	0.77
Shares used to compute net income per share:
Basic			27,505,097			27,713,229			27,512,057				27,638,611
Diluted			27,508,217			27,730,105			27,522,734				27,707,784

Proto Labs, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

		Nine Months Ended
		September 30,
		2022				2021
Operating activities
Net income		$	11,603			$	21,462
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			29,981				30,231
Stock-based compensation expense			13,335				15,539
Deferred taxes			(8,920	)			(139	)
Changes in fair value of contingent consideration			-				(8,513	)
Impairments related to closure of Japan business			2,842				-
Gain on disposal of property and equipment			(1,174	)			-
Other			11				442
Changes in operating assets and liabilities			3,886				(26,797	)
Net cash provided by operating activities			51,564				32,225
Investing activities
Purchases of property, equipment and other capital assets			(16,414	)			(27,956	)
Proceeds from sales of property, equipment and other capital assets			3,227				-
Cash used for acquisitions, net of cash acquired			-				(127,413	)
Purchases of marketable securities			(45,872	)			(15,159	)
Proceeds from sales of marketable securities			1,998				57,089
Proceeds from call redemptions and maturities of marketable securities			13,696				15,114
Net cash used in investing activities			(43,365	)			(98,325	)
Financing activities
Proceeds from exercises of stock options and other			2,311				3,838
Purchases of shares withheld for tax obligations			(1,615	)			(4,209	)
Repurchases of common stock			(13,074	)			(13,036	)
Principal repayments of finance lease obligations			(417	)			(413	)
Net cash used in financing activities			(12,795	)			(13,820	)
Effect of exchange rate changes on cash and cash equivalents			(1,972	)			119
Net decrease in cash and cash equivalents			(6,568	)			(79,801	)
Cash and cash equivalents, beginning of period			65,929				127,603
Cash and cash equivalents, end of period		$	59,361			$	47,802

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								Nine Months Ended
		September 30,								September 30,
		2022				2021				2022				2021
Non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency, costs related to Japan closure activities and transaction costs
GAAP net income		$	3,951			$	4,835			$	11,603			$	21,462
Add back:
Stock-based compensation expense			4,907				4,978				13,335				15,539
Amortization expense			1,510				1,568				4,582				4,601
Unrealized (gain) loss on foreign currency			382				121				742				341
Costs related to Japan closure activities			1,194				-				6,388				-
Transaction costs 1			-				(730	)			-				(5,870	)
Total adjustments 2			7,993				5,937				25,047				14,611
Income tax benefits on adjustments 3			(1,060	)			(1,063	)			(2,518	)			(4,639	)
Non-GAAP net income		$	10,884			$	9,709			$	34,132			$	31,434
Non-GAAP net income per share:
Basic		$	0.40			$	0.35			$	1.24			$	1.14
Diluted		$	0.40			$	0.35			$	1.24			$	1.13
Shares used to compute non-GAAP net income per share:
Basic			27,505,097				27,713,229				27,512,057				27,638,611
Diluted			27,508,217				27,730,105				27,522,734				27,707,784

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, costs related to Japan closure activities and transaction costs were included in the following GAAP consolidated statement of operations categories:

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2022			2021			2022			2021
Cost of revenue		$	902		$	986		$	2,701		$	2,974
Marketing and sales			929			1,059			2,479			2,841
Research and development			602			776			1,702			2,144
General and administrative			3,984			2,995			11,035			6,311
Closure of Japan business			1,194			-			6,388			-
Total operating expenses			6,709			4,830			21,604			11,296
Other (income) expense, net			382			121			742			341
Total adjustments		$	7,993		$	5,937		$	25,047		$	14,611

3 For the three- and nine-month periods ended September 30, 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								Nine Months Ended								Three Months Ended
		September 30,								September 30,								June 30,
		2022				2021				2022				2021				2022				2021
Revenue		$	121,721			$	125,342			$	372,791			$	364,516			$	126,902			$	123,048
Gross Profit			53,632				55,324				166,858				167,279				57,422				56,625
GAAP gross margin			44.1	%			44.1	%			44.8	%			45.9	%			45.2	%			46.0	%
Add back:
Stock-based compensation expense			560				644				1,674				1,947				528				668
Amortization expense			342				342				1,027				1,027				342				343
Total adjustments			902				986				2,701				2,974				870				1,011
Non-GAAP gross profit		$	54,534			$	56,310			$	169,559			$	170,253			$	58,292			$	57,636
Non-GAAP gross margin			44.8	%			44.9	%			45.5	%			46.7	%			45.9	%			46.8	%

Proto Labs, Inc.

Reconciliation of GAAP to Non-GAAP Gross Margin Excluding Japan

(In thousands)

(Unaudited)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2022				2021				2022				2021
Revenue		$	121,721			$	125,342			$	372,791			$	364,516
Revenue excluding Japan		$	120,434			$	122,282			$	364,562			$	354,783
Gross Profit			53,632				55,324				166,858				167,279
GAAP gross margin			44.1	%			44.1	%			44.8	%			45.9	%
Less: Japan gross profit			47				1,151				3,150				3,845
Gross Profit excluding Japan			53,585				54,173				163,708				163,434
GAAP gross margin excluding Japan			44.5	%			44.3	%			44.9	%			46.1	%
Add back:
Stock-based compensation expense			560				644				1,674				1,947
Amortization expense			342				342				1,027				1,027
Less:
Japan stock-based compensation expense			13				26				61				70
Japan amortization expense			-				-				-				-
Total adjustments			889				960				2,640				2,904
Non-GAAP gross profit excluding Japan		$	54,474			$	55,133			$	166,348			$	166,338
Non-GAAP gross margin excluding Japan			45.2	%			45.1	%			45.6	%			46.9	%

Proto Labs, Inc.

Reconciliation of GAAP to Non-GAAP Operating Margin

(In thousands)

(Unaudited)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2022				2021				2022				2021
Revenue		$	121,721			$	125,342			$	372,791			$	364,516
Income from operations			6,058				6,927				19,149				27,292
GAAP operating margin			5.0	%			5.5	%			5.1	%			7.5	%
Add back:
Stock-based compensation expense			4,907				4,978				13,335				15,539
Amortization expense			1,510				1,568				4,582				4,601
Transaction costs 1			-				(730	)			-				(5,870	)
Costs related to Japan closure activities			1,194				-				6,388				-
Total adjustments			7,611				5,816				24,305				14,270
Non-GAAP income from operations		$	13,669			$	12,743			$	43,454			$	41,562
Non-GAAP operating margin			11.2	%			10.2	%			11.7	%			11.4	%

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								Nine Months Ended
		September 30,								September 30,
		2022				2021				2022				2021
Revenue		$	121,721			$	125,342			$	372,791			$	364,516
Revenue excluding Japan		$	120,434			$	122,282			$	364,562			$	354,783
Income from operations			6,058				6,927				19,149				27,292
GAAP operating margin			5.0	%			5.5	%			5.1	%			7.5	%
Less: Japan income from operations			(724	)			(521	)			(720	)			(1,174	)
Income from operations excluding Japan			6,782				7,448				19,869				28,466
GAAP operating margin excluding Japan			5.6	%			6.1	%			5.5	%			8.0	%
Add back:
Stock-based compensation expense			4,907				4,978				13,335				15,539
Amortization expense			1,510				1,568				4,582				4,601
Transaction costs 1			-				(730	)			-				(5,870	)
Costs related to Japan closure activities			1,194				-				6,388				-
Less:
Japan stock-based compensation expense			89				160				386				464
Japan amortization expense			-				-				-				-
Total adjustments			7,522				5,656				23,919				13,806
Non-GAAP income from operations excluding Japan		$	14,304			$	13,104			$	43,788			$	42,272
Non-GAAP operating margin excluding Japan			11.9	%			10.7	%			12.0	%			11.9	%

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								Nine Months Ended
		September 30,								September 30,
		2022				2021				2022				2021
Revenue		$	121,721			$	125,342			$	372,791			$	364,516
GAAP net income			3,951				4,835				11,603				21,462
GAAP net income margin			3.2	%			3.9	%			3.1	%			5.9	%
Add back:
Amortization expense		$	1,510			$	1,568			$	4,582			$	4,601
Depreciation expense			8,197				8,536				25,399				25,630
Interest income, net			(265	)			(55	)			(459	)			(207	)
Tax expense			2,083				2,228				7,223				5,790
EBITDA			15,476				17,112				48,348				57,276
EBITDA Margin			12.7	%			13.7	%			13.0	%			15.7	%
Add back:
Stock-based compensation expense			4,907				4,978				13,335				15,539
Unrealized (gain) loss on foreign currency			382				121				742				341
Costs related to Japan closure activities			1,194				-				6,388				-
Transaction costs 1			-				(730	)			-				(5,870	)
Total adjustments			6,483				4,369				20,465				10,010
Adjusted EBITDA		$	21,959			$	21,481			$	68,813			$	67,286
Adjusted EBITDA Margin			18.0	%			17.1	%			18.5	%			18.5	%

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 September 30, 2022												Three Months Ended September 30, 2021			%				%
		GAAP			Foreign Currency1			Hubs Acquisition			Non-GAAP			GAAP			Change3				Change Organic4
Revenues
United States		$	98,970		$	-		$	-		$	98,970		$	100,127			(1.2	)%			(1.2	)%
Europe			21,464			3,789			-			25,253			22,155			(3.1	)			14.0
Japan			1,287			310			-			1,597			3,060			(57.9	)			(47.8	)
Total Revenue		$	121,721		$	4,099		$	-		$	125,820		$	125,342			(2.9	)%			0.4	%

		Nine Months Ended September 30, 2022													Nine Months Ended September 30, 2021			%				%
		GAAP			Foreign Currency1			Hubs Acquisition2				Non-GAAP			GAAP			Change3				Change Organic4
Revenues
United States		$	295,121		$	-		$	(1,049	)		$	294,072		$	286,524			3.0	%			2.6	%
Europe			69,441			7,165			(1,279	)			75,327			68,259			1.7				10.4
Japan			8,229			1,226			-				9,455			9,733			(15.5	)			(2.9	)
Total Revenue		$	372,791		$	8,391		$	(2,328	)		$	378,854		$	364,516			2.3	%			3.9	%

1 Revenue for the three- and nine-month periods ended September 30, 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 nine-month period ended September 30, 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- and nine-month periods ended September 30, 2021 to GAAP revenue for the three- and nine-month periods ended September 30, 2022.
4 This column presents the percentage change from GAAP revenue for the three- and nine-month periods ended September 30, 2021 to non-GAAP revenue for the three- and nine-month periods ended September 30, 2022 (as recalculated using the foreign currency exchange rates in effect during the three- and nine-month periods ended September 30, 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 September 30, 2022												Three Months Ended September 30, 2021			%				%
		GAAP			Foreign Currency1			Hubs Acquisition			Non-GAAP			GAAP			Change3				Change Organic4
Revenues
Injection Molding		$	48,940		$	1,677		$	-		$	50,617		$	57,685			(15.2	)%			(12.3	)%
CNC Machining			47,489			1,580			-			49,069			43,658			8.8				12.4
3D Printing			19,823			803			-			20,626			18,589			6.6				11.0
Sheet Metal			5,219			39			-			5,258			4,854			7.5				8.3
Other			250			-			-			250			556			(55.0	)			(55.0	)
Total Revenue		$	121,721		$	4,099		$	-		$	125,820		$	125,342			(2.9	)%			0.4	%

		Nine Months Ended September 30, 2022													Nine Months Ended September 30, 2021			%				%
		GAAP			Foreign Currency1			Hubs Acquisition2				Non-GAAP			GAAP			Change3				Change Organic4
Revenues
Injection Molding		$	155,693		$	4,102		$	(189	)		$	159,606		$	172,212			(9.6	)%			(7.3	)%
CNC Machining			141,809			2,693			(1,637	)			142,865			121,953			16.3				17.1
3D Printing			59,458			1,553			(408	)			60,603			53,994			10.1				12.2
Sheet Metal			15,066			39			(84	)			15,021			14,790			1.9				1.6
Other			765			4			(10	)			759			1,567			(51.2	)			(51.6	)
Total Revenue		$	372,791		$	8,391		$	(2,328	)		$	378,854		$	364,516			2.3	%			3.9	%

1 Revenue for the three- and nine-month periods ended September 30, 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 nine-month period ended September 30, 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- and nine-month periods ended September 30, 2021 to GAAP revenue for the three- and nine-month periods ended September 30, 2022.
4 This column presents the percentage change from GAAP revenue for the three- and nine-month periods ended September 30, 2021 to non-GAAP revenue for the three- and nine-month periods ended September 30, 2022 (as recalculated using the foreign currency exchange rates in effect during the three- and nine-month periods ended September 30, 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						Nine Months Ended
		September 30,						September 30,
		2022			2021			2022			2021
Unique product developers and engineers served			23,816			23,457			47,793			46,687

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221104005157/en/

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' financial results for Q3 2022?

Proto Labs reported Q3 2022 revenue of $121.7 million, a 2.9% decrease from the previous year, with a GAAP EPS of $0.14 and a Non-GAAP EPS of $0.40.

How did the Hubs segment perform in Q3 2022?

The Hubs segment generated $12.1 million in revenue, indicating a year-over-year growth of 38.5%.

What are the key financial metrics for Proto Labs in Q3 2022?

Key metrics include revenue of $121.7 million, GAAP EPS of $0.14, Non-GAAP EPS of $0.40, and cash from operations of $20.5 million.

Did Proto Labs face any significant challenges in Q3 2022?

Yes, the company experienced a decline in its Injection Molding business and a fall in gross margin from 45.2% to 44.1%.