3D Printing Financials: Protolabs’ Q1 3D Printing Revenue is Flat, Company Advances in Technology Push

Protolabs (NYSE: PRLB) has kicked off 2024 with a mild boost in revenue, revealing how the Minnesota-based company manages to adapt and thrive even in uncertain market conditions. While the company offers a range of services, the 3D printing operations are the ones that hold particular interest here. Despite the technology’s ongoing advances, 3D printing revenue has not changed much year-over-year.

This level of performance suggests that while steady, 3D printing has not seen significant expansion. It’s somewhat surprising, given the technological progress and potential in the sector, but it could suggest that while 3D printing is established within Protolabs’ offerings, it hasn’t yet achieved the rapid growth or wider adoption that might bring its revenues closer to the more traditional services like CNC machining or injection molding.

During the first quarter, Protolabs reported a slight increase in its first-quarter revenue, reaching $127.9 million up from $125.9 million the previous year. Protolabs saw a pretty stable performance across its traditional service segments. The injection molding and CNC machining sectors delivered increases, contributing $52.7 million and $49.9 million, respectively, to the total revenue.

In contrast, the 3D printing segment recorded revenue of $21.6 million, only a slight increase from $21.3 million year over year. The sheet metal sector experienced some decline, dropping to $3.6 million from $4.2 million, while other minor revenue contributions amounted to $160,000, decreasing from the previous year’s $234,000.

In terms of revenue contribution, 3D printing accounted for roughly 17% of Protolabs’ total revenue this quarter, a slight increase from the previous year. Compared to other segments like CNC machining and injection molding, which contributed around 39% and 41%, respectively, it’s clear that 3D printing, while stable, still plays a smaller role in the company’s revenue stream.

Protolabs demonstrated the power of 3D printing in a recent collaboration with NASA, explained CEO Rob Bodor during an earnings call with investors. At last February’s’ 2024 Power Source Global Summit in Orlando, Protolabs manufactured and delivered custom metal components for NASA within only 48 hours of design.

“Our unique, highly automated digital factory enables us to serve NASA’s needs faster than anyone else in the world. Over the years, our digital manufacturing offer has propelled NASA’s design evolution and accelerated their innovations,” remarked Bodor.

At the summit, NASA sought to develop a tool for capturing gases on the moon’s surface. Using generative design software, summit attendees created specifications for metal components ideal for lightweight applications—components that Protolabs was prepared to manufacture using its 3D printing and CNC machining technologies.

The process was swift: Protolabs manufactured these parts in less than 24 hours, and within two days, the finished components were delivered to NASA at the conference. This rapid turnaround not only allowed NASA to move forward with their project quickly but also highlighted the efficiency and reliability of Protolabs’ manufacturing processes, which, according to Bodor, can “propel the most innovative ideas into reality and move science forward.”

Despite Protolabs’ impressive capabilities in 3D printing, as proven in their rapid execution for NASA, the overall revenue from this sector remains “flat,” as CFO Dan Schumacher told investors during the call. This suggests that the demand for 3D printing has not increased as quickly as other services like injection molding or CNC machining. Perhaps this steady revenue highlights the broader adoption challenges that the 3D printing industry faces. It will be interesting to envision a time when Protolabs’ 3D printing revenue surpasses the other manufacturing techniques. However, injection molding and CNC machining are tried-and-true methods with a wide range of industrial uses, making them reliable sources of revenue.

Instead, 3D printing is still establishing itself in mainstream markets. Opting for 3D printing can require significant investments, which might deter some companies, especially when traditional methods continue to meet their demands quite well. Protolabs is actively exploring these issues. At the 2024 NPE: The Plastics Show on May 6, Protolabs engineer Chloe Vollaro will explore the process and perks of injection molding versus 3D printing. The goal is not only to help attendees make informed decisions about their projects but also to show Protolabs’ commitment to increasing the knowledge and adoption of these critical manufacturing technologies.

Despite the high expectations surrounding this technology, without clear cost advantages and breakthroughs, 3D printing at Protolabs might continue to grow at this cautious rate, accounting for less than 20% of total revenue. The next quarter could help determine whether this segment can contribute more significantly to Protolabs’ overall growth trajectory.