3D Printing Financials: Protolabs’ 3D Printing Revenue Slips, Margins Hold Steady

Protolabs (NYSE: PRLB) reported its financial results for 2024, showing a slight drop in total revenue and mixed performance across its service lines. While the company remained profitable, revenue from its 3D printing segment declined compared to the previous year. The company indicated that its transformation strategy, including expanding its digital network and production capabilities, played a key role in steadying its margins and keeping cash flow strong. What’s more, Protolabs also introduced a $100 million stock repurchase program, which will buy back shares and return funds to investors.

Protolabs’ total revenue for 2024 was $500.9 million. Its 3D printing segment brought in $83.8 million in 2024, slightly down from $84.3 million in 2023, which accounted for 16.7% of total revenue. The fourth quarter alone saw $19.5 million in revenue from 3D printing, marking a 4.3% decline year-over-year. Despite the drop, the company kept a steady gross margin, helped by increased adoption of digital manufacturing processes and greater reliance on the Protolabs Network, which connects customers with a wider pool of production partners.

While 3D printing revenue slipped, Protolabs saw growth in CNC machining, which brought in $206.9 million, a 4.4% increase compared to 2023. Injection molding, however, saw a decline, reflecting shifting demand within the digital manufacturing space. The company has pointed out the integration of its internal production with its global network, which saw a 21.6% revenue boost, reaching $100.4 million in 2024.

The company has pointed out that integrating its in-house manufacturing facilities with its global network of external partners gives it a more flexible and scalable production system. This approach allows Protolabs to efficiently fulfill a wider range of customer orders while optimizing costs. The global network segment, which connects customers to vetted third-party manufacturers, saw a 21.6% revenue boost, reaching $100.4 million in 2024.

Protolabs reported a full-year net income of $16.6 million, or 66 cents per share, in 2024, close to last year’s $17.2 million, showing that the company remains profitable. The adjusted net income was $41.2 million, with earnings per share of $1.63.

However, in the fourth quarter, the company recorded a net loss of $400,000, a sharp contrast to the $7 million net income reported in the same period of 2023. This was mainly the result of restructuring costs and strategic investments in expanding production capabilities. Still, the adjusted net income for the quarter was $9.4 million, showing steady operations aside from these one-time costs.

Despite lower revenue in some areas, the company increased its gross margin to 44.6% from 44.1% in 2023. This gain was mainly driven by cost savings, a stronger focus on digital production, and better use of its manufacturing network. The company states that optimizing operations and integrating more automation could maintain profitability even with shifting demand.

Protolabs continues to push toward a production-focused business model, moving beyond its traditional role as a prototyping service provider. The company mentioned a 50% increase in customers using its combined factory and network services, pointing to the growing adoption of its hybrid manufacturing approach. To support this shift, Protolabs says it is making targeted investments in sales, marketing, and infrastructure.

Looking ahead, the business projects first-quarter 2025 revenue to be between $120 million and $128 million. The company expects net income per share to range from 8 cents to 16 cents, while adjusted earnings per share are forecasted between 26 cents and 34 cents. Also, Protolabs reported a cash flow of $77.8 million for the year, providing resources to support its operations and future investments. Additionally, to boost shareholder value, Protolabs’ board approved a $100 million stock repurchase program.

“We will continue to invest to expand our production capabilities to better serve our customers’ production needs and to drive growth,” said Protolabs CEO Robert Bodor during an earnings call with investors. “We delivered solid results in 2024, a year of evolution for the company. Across the organization, we have been focused on redeploying our resources to grow revenue and expand margins in both factory and network.”

The executive also explained that Protolabs has refocused its regional go-to-market teams to ensure the best possible customer experience from prototype to production, serving customers across the life cycle of their products. In fact, Bodor concludes that Protolabs has truly become “the only one-stop-shop in our industry.”

While the company faces ongoing market fluctuations, its focus on production-grade manufacturing and an expanded digital network could help strengthen its role in the 3D printing space.