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• Fourth Quarter Revenue: $121.8 million, down 3.1% year over year in constant currencies.

• Revenue from Proto Labs Network: $26.5 million, up 17.7% in constant currencies.

• Fourth Quarter Non-GAAP Gross Margin: 43.4%, decreased 280 basis points sequentially.

• Fourth Quarter Non-GAAP Earnings Per Share (EPS): $0.38, down $0.09 sequentially.

• Full Year Revenue: $500.9 million, down 1% from 2023 in constant currencies.

• Revenue from Proto Labs Network (Full Year): $100.4 million, up 21.3% year over year.

• Full Year Non-GAAP Gross Margin: 45.2%, increased 50 basis points.

• Factory Gross Margin (Full Year): 48.3%, increased 90 basis points year over year.

• Network Gross Margin (Full Year): 32.9%, increased 230 basis points.

• Full Year Non-GAAP EPS: $1.63, grew 3% year over year.

• Cash from Operations (Full Year): $77.8 million, up from $73.3 million in 2023.

• Shareholder Returns: $60.3 million returned in the form of repurchases, 88% of free cash flow.

• Cash and Investments (End of 2024): $120.9 million, with zero debt.

• First Quarter 2025 Revenue Guidance: $120 to $128 million.

• First Quarter 2025 Non-GAAP EPS Guidance: $0.26 to $0.34.

• Warning! GuruFocus has detected 6 Warning Signs with PRLB.

Release Date: February 07, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Proto Labs Inc (NYSE:PRLB) closed out the year with fourth-quarter financial results above expectations, generating strong earnings and cash flows.

• The company expanded its consolidated gross margin and increased earnings per share in 2024, generating $78 million of cash from operations.

• Customers using the combined offer grew by 50%, and revenue per customer expanded, with production use cases outgrowing prototyping.

• Proto Labs Inc (NYSE:PRLB) is investing significantly in marketing to build its brand as a production manufacturer, aiming to drive revenue growth in 2025 and beyond.

• The company has reorganized its structure to better serve customers, with a new global operations team optimizing the manufacturing footprint and ensuring global capabilities are available to customers.

Negative Points

• Revenue growth in recent years has not met expectations, prompting the company to make strategic investments to drive future growth.

• Fourth-quarter revenue was down 3.1% year over year in constant currencies, with a sequential decline in non-GAAP gross margin.

• The company faced $5.6 million in costs related to the closure of an injection molding facility and discontinuation of select 3D printing operations in Germany.

• Proto Labs Inc (NYSE:PRLB) anticipates higher operating expenses in the first quarter of 2025 due to investments in marketing and sales enablement tools.

• The company is experiencing a prolonged period of manufacturing contraction, impacting prototyping demand and contributing to a cautious revenue outlook for the first quarter of 2025.