Slide 1: Earnings Presentation Q4 and FY 2020
Earnings Presentation Q4 and FY 2020 February 12, 2021
Slide 2: Safe Harbor
SAFE HARBOR These slides and accompanying oral presentation may contain forward-looking statements. These statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity,
Slide 3: Q4 2020 Overview
y Q4 2020 OVERVIEW
Slide 4: Financial Highlights | Q4 2020
FINANCIAL HIGHLIGHTS | Q4 2020 Revenue ($M) (6.0)% • Revenue of $105.2 million, down (6.0)% YoY $111.9 $105.2 Sequential revenue decrease of (2.1)% 18,157 unique product developers served 2019 2020 Non-GAAP EPS* (21.2)% • Non-GAAP EPS of $0.50, down $(0.13) YoY YoY decline primarily due to: $0
Slide 5: Regional Revenue | Q4 2020
REGIONAL REVENUE | Q4 2020 YoY Revenue % by Region ($M) Q4 20 Q4 19 CHANGE* Q4 2020 3.4% Americas $83.2 $88.3 (6)% 17.5% Europe $18.4 $19.9 (12)% Japan $3.6 $3.7 (5)% 79.1% TOTAL $105.2 $111.9 (7)% Americas Europe Japan *YoY change reflected in constant currency See reconciliation in Appendix. 5
Slide 6: Revenue by Service | Q4 2020
REVENUE BY SERVICE | Q4 2020 Injection Molding - Revenue CNC Machining - Revenue ($M) 1% ($M) (17)% $51.5 $52.1 $38.5 $31.8 2019 2020 2019 2020 3D Printing - Revenue Sheet Metal - Revenue ($M) ($M) 2% (13)% $15.7 $16.0 $5.2 $4.5 2019 2020 2019 2020 6
Slide 7: FY 2020 Overview
y FY 2020 OVERVIEW
Slide 8: Financial Highlights | FY 2020
FINANCIAL HIGHLIGHTS | FY 2020 Revenue ($M) (5.3)% • Revenue of $434.4 million, down (5.3)% YoY Customer demand declined due to the onset of the $458.7 $434.4 COVID-19 pandemic $18 million in COVID-related revenue 2019 2020 Non-GAAP EPS* Over 40,267 unique product developers served (15.2)% • N
Slide 9: Regional Revenue | FY 2020
REGIONAL REVENUE | FY 2020 YoY Revenue % by Region ($M) FY 2020 FY 2019 CHANGE* FY 2020 Americas $345.7 $360.2 (4)% 3.2% 17.2% Europe $74.8 $82.8 (11)% Japan $13.9 $15.7 (14)% 79.6% TOTAL $434.4 $458.7 (6)% Americas Europe Japan *YoY change reflected in constant currency See reconciliation in Append
Slide 10: Revenue by Service | FY 2020
REVENUE BY SERVICE | FY 2020 Injection Molding - Revenue CNC Machining - Revenue ($M) 0% ($M) (15)% $217.4 $218.0 $155.5 $131.6 2019 2020 2019 2020 3D Printing - Revenue Sheet Metal - Revenue ($M) ($M) 2% (10)% $61.4 $62.5 $21.0 $18.8 2019 2020 2019 2020 10
Slide 11: Q4 2020 Detailed Financial Information
Q4 2020 DETAILED FINANCIAL INFORMATION
Slide 12: Financial Results | Q4 2020
FINANCIAL RESULTS | Q4 2020 $M, EXCEPT SEQ. YoY PER SHARE AMOUNTS Q4 20 Q3 20 CHANGE Q4 19 CHANGE Revenue $105.2 $107.5 (2.1)% $111.9 (6.0)% Non-GAAP 51.0% 51.7% (70) bps 51.4% (40) bps Gross Margin* Non-GAAP 15.4% 20.8% (540) bps 19.2% (380) bps Operating Margin* Non-GAAP $0.50 $0.67 (25.3)% $0.63
Slide 13: QoQ GAAP to Non-GAAP P&L | Q4 2020
QoQ GAAP to Non-GAAP P&L | Q4 2020 Three Months Ended Dec. 31, 2020 Three Months Ended Sept. 30, 2020 $ in thousands GAAP Adjustments Non-GAAP* GAAP Adjustments Non-GAAP* Revenue $105,208 - $105,208 $107,504 - $107,504 Cost of Revenue 52,580 (1,032) 51,548 52,861 (989) 51,872 Gross Profit $52,628 $1
Slide 14: Cash Flow and Balance Sheet | Q4 2020
CASH FLOW and BALANCE SHEET | Q4 2020 $M Q4 20 Q3 20 FY 18 Q4 19 Operating Cash Flow $24.6 $29.0 $32.3 Capital Expenditures $6.5 $7.2 $16.1 Share Repurchases $0 $0 $0 Cash and Investments* $221.0 $200.6 $173.6 Debt* $0 $0 $0 *Balance Sheet items as of the end of the period. 14
Slide 15: FY 2020 Detailed Financial Information
FY 2020 DETAILED FINANCIAL INFORMATION
Slide 16: Financial Results | FY 2020
FINANCIAL RESULTS | FY 2020 $M, EXCEPT PER SHARE AMOUNTS FY 2020 FY 2019 YoY CHANGE Revenue $434.4 $458.7 (5.3)% Non-GAAP 51.0% 52.0% (100) bps Gross Margin* Non-GAAP 17.9% 20.5% (260) bps Operating Margin* Non-GAAP $2.36 $2.79 (15.2)% Earnings Per Share* *Non-GAAP: adjusted for stock-based compensa
Slide 17: YoY GAAP to Non-GAAP P&L | FY 2020
YoY GAAP to Non-GAAP P&L | FY 2020 Twelve Months Ended Dec. 31, 2020 Twelve Months Ended Dec. 31, 2019 $ in thousands GAAP Adjustments Non-GAAP* GAAP Adjustments Non-GAAP* Revenue $434,395 - $434,395 $458,728 - $458,728 Cost of Revenue 216,568 (3,820) 212,748 223,438 (3,335) 220,103 Gross Profit $21
Slide 18: Cash Flow and Balance Sheet | FY 2020
CASH FLOW and BALANCE SHEET | FY 2020 $M FY 2020 FY 2019 Operating Cash Flow $107.0 $116.1 Capital Expenditures $47.0 $62.2 Share Repurchases $14.7 $33.5 Cash and Investments* $221.0 $173.6 Debt* $0 $0 *Balance Sheet items as of the end of the period. 18
Slide 19: Long-Term Strategy & 2021 Priorities
Long-Term Strategy & 2021 Priorities
Slide 20: Long-Term Strategy & 2021 Priorities
LONG-TERM STRATEGY & 2021 PRIORITIES Long-Term Strategic Objectives • Achieve and maintain a best-in-class digital manufacturing customer experience • Expand our offer to provide customers the broadest solution for custom parts • Further invest in employees 2021 Priorities • Successfully launch and
Slide 21: Protolabs 2.0 | Overview
PROTOLABS 2.0 | OVERVIEW Background Approach Future Legacy systems evolved Two components: Better support our slowly and incrementally Customer-facing customers and strategy Based on architecture eCommerce platform from early 2000s Back-end systems Enhanced functionality Inefficient to add new from
Slide 22: Protolabs 2.0 | February 2021 Update
PROTOLABS 2.0 | FEBRUARY 2021 UPDATE Protolabs 2.0 is now live in the Americas and Europe • Launch Dates – Americas: February 2021 // Europe: November 2020 22
Slide 23: Acquisition of 3D Hubs
ACQUISITION OF 3D HUBS + • Rapid prototyping • Broad services offer • Best-in-class lead times w/in our o Higher tolerances More complex parts current envelope o o Additional technologies • Focus on reliability & quality o More secondary operations • Expert technical consultation • Wide variety of l
Slide 24: Financial Outlook
y FINANCIAL OUTLOOK
Slide 25: Q1 2021 Outlook
Q1 2021 | OUTLOOK Q1 2021 Revenue Q1 2021 Revenue Details • Includes 3D Hubs revenue of approximately $5 million Revenue $108M - $118M • Expect foreign currency to have a $1 million to $1.5 million positive impact Q1 revenue % Growth YoY (6)% - 3% % Growth QoQ 3% - 12% Additional Q1 2021 Outlook Com
Slide 26: Thank You
THANK YOU PROTOLABS Manufacturing. Accelerated.
Slide 27: Appendix
APPENDIX
Slide 28: GAAP to Non-GAAP Reconciliation | Revenue
GAAP to NON-GAAP RECONCILIATION | Revenue Three Months ($ in thousands) Three Months Ended Ended % Change Decem ber 31, 2020 Dec. 31, 2019 % Constant 2 3 GAAP Adjustm ents 1 Non-GAAP GAAP Change Currencies Revenues United States $ 83,201 $ - $ 83,201 $ 88,329 (5.8%) (5.8%) Europe 18,383 (955) 17,428
Slide 29: GAAP to Non-GAAP Reconciliation | EBITDA
GAAP to NON-GAAP RECONCILIATION | EBITDA ($ in thousands) Three Months Ended Year Ended Decem ber 31, Decem ber 31, 2020 2019 2020 2019 GAAP net income $ 9,579 $ 15,186 $ 50,867 $ 63,655 Amortization expense 754 889 3,016 3,482 Depreciation expense 7,949 7,317 29,578 27,383 Interest income, net (149
Slide 30: GAAP to Non-GAAP Reconciliation | EPS
GAAP to NON-GAAP RECONCILIATION | EPS Three Months Ended Year Ended ($ in thousands, except share and per share amounts) Decem ber 31, Decem ber 31, 2020 2019 2020 2019 Non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currenc