Slide 1: Earnings Presentation Q4 & FY 2022
Earnings Presentation Q4 & FY 2022 February 10, 2023
Slide 2: Forward-looking Statements and Non-GAAP Measures
Forward-looking Statements and Non-GAAP Measures ▸ These slides may contain forward-looking ▸ Other factors that could materially affect actual ▸ Non-GAAP Financial Measures: Protolabs statements. These statements relate to future results, levels of activity, performance or management believes that
Slide 3: 2022 Highlights
2022 Highlights
Slide 4: Digital Manufacturing
Digital Manufacturing End-to-end digital manufacturing service from quoting to production to shipping Digital Factory Digital Network Our in-house digital manufacturing Our global network of factories in the U.S. and Europe manufacturing partners powered by Hubs Protolabs is the world’s leading digi
Slide 5: Customer Examples
Customer Examples
Slide 6: Customer Value: Supply Chain Simplification
CUSTOMER VALUE Supply Chain Simplification CHALLENGE Quick Stats ▸ Prominent medical company looking to accelerate development of new product with Medical multiple components Industry ▸ Team needed 12 injection molding tools from single manufacturing supplier Injection SOLUTION Molding ▸ Paired digi
Slide 7: Customer Value: Speed x Production
CUSTOMER VALUE Speed x Production CHALLENGE Quick Stats ▸ Global technology company developing advanced energy solutions needed help on fuel-cell project that will both aid in powering and heating transportation Technology ▸ Project had complex part designs with high-requirements and tight deadlines
Slide 8: 2023 Priorities
2023 Priorities
Slide 9: 2023 Priorities
2023 Priorities ▸Focus on Priority Growth Areas – narrow our focus and investments to drive growth in two priority areas ▸ Injection molding ▸ Integrated comprehensive CNC offer powered by the Hubs network ▸Financial Strategy – optimize value creation for shareholders through the following objective
Slide 10: New Offer Launches (2022 and early 2023)
New Offer Launches (2022 and early 2023) ▸ 7-day injection molding offer ▸ Cuts Protolabs’ industry-leading molding lead times in half ▸ Advanced CNC machining ▸ Through the combination of our internal digital factories and our digital network of manufacturing partners ▸ Expanded 5-day domestic offe
Slide 11: Optimize Value Creation for Shareholders
Optimize Value Creation for Shareholders
Slide 12: Optimize Value Creation for Shareholders
Optimize Value Creation for Shareholders ▸ Expand operating margin ▸ Align resources and ensure adequate investment in two priority growth areas; shift investments away from other lower priority areas of our business ▸ Return capital to shareholders through accelerated share repurchase program at cu
Slide 13: Q4 2022 Overview
Q4 2022 Overview
Slide 14: Financial Highlights | Q4 2022 YoY
Financial Highlights | Q4 2022 YoY Revenue ($M) (6.5)% • Revenue of $115.6 million, down 6.5% YoY Down (1.0)% YoY in constant currencies and excluding Japan $123.6 $115.6 Strong growth in CNC machining and 3D printing Working to drive growth in injection molding Hubs contributed $14.8 millio
Slide 15: Revenue by Service | Q4 2022 YoY
Revenue by Service | Q4 2022 YoY Injection Molding - Revenue CNC Machining - Revenue ($M) (14)%* ($M) 6%* $53.9 $44.9 $44.9 $46.6 Q4 2021 Q4 2022 Q4 2021 Q4 2022 3D Printing - Revenue Sheet Metal - Revenue ($M) ($M) 8%* (21)%* $18.7 $19.5 $5.6 $4.4 Q4 2021 Q4 2022 Q4 2021 Q4 2022 *YoY change reflect
Slide 16: Revenue by Region | Q4 2022
Revenue by Region | Q4 2022 YoY Change YoY Change YoY Change Revenue % by Region $M Q4 22 Q4 21 Overall Constant Fx* Constant Fx* Q4 2022 Excl. Japan Americas $92.3 $97.9 (6)% (6)% 20% Europe $23.3 $22.1 5% 20% Japan - $3.5 (100)% (100)% 80% TOTAL $115.6 $123.6 (6)% (4)% (1)% Americas Europe *YoY ch
Slide 17: Q4 2022 Detailed Financial Information
Q4 2022 Detailed Financial Information
Slide 18: Financial Results | Q4 2022
Financial Results | Q4 2022 $M, Except QoQ YoY per share amounts Q4 22 Q3 22 Change Q4 21 Change Revenue $115.6 $121.7 (5.0)% $123.6 (6.5)% Non-GAAP 42.8% 44.8% (200) bps 45.6% (290) bps Gross Margin* Non-GAAP Operating Margin* 6.2% 11.2% (510) bps 10.9% (470) bps Non-GAAP $0.26 $0.40 (35.2)% $0.41
Slide 19: YoY GAAP to Non-GAAP P&L | Q4 2022
YoY GAAP to Non-GAAP P&L | Q4 2022 Three Months Ended Dec. 31, 2022 Three Months Ended Dec. 31, 2021 $ in thousands GAAP Adjustments Non-GAAP* GAAP Adjustments Non-GAAP* Revenue $115,607 - $115,607 $123,582 - $123,582 Cost of Revenue 67,000 (840) 66,160 68,170 (990) 67,180 Gross Profit $48,607 $840
Slide 20: QoQ GAAP to Non-GAAP P&L | Q4 2022
QoQ GAAP to Non-GAAP P&L | Q4 2022 Three Months Ended Dec. 31, 2022 Three Months Ended Sept. 30, 2022 $ in thousands GAAP Adjustments Non-GAAP* GAAP Adjustments Non-GAAP* Revenue $115,607 - $115,607 $121,721 - $121,721 Cost of Revenue 67,000 (840) 66,160 68,089 (902) 67,187 Gross Profit $48,607 $840
Slide 21: Cash Flow and Balance Sheet | Q4 2022
Cash Flow and Balance Sheet | Q4 2022 $M Q4 22 Q3 22 Q4 21 FY 18 Operating Cash Flow $10.5 $20.5 $23.0 Capital Expenditures $5.3 $10.4 $6.3 Share Repurchases $16.6 $7.8 $10.2 Cash and Investments* $106.5 $113.9 $91.8 Debt* $0 $0 $0 *Balance Sheet items as of the end of the period. 21
Slide 22: FY 2022 Overview
FY 2022 Overview
Slide 23: Financial Highlights | FY 2022 YoY
Financial Highlights | FY 2022 YoY Revenue ($M) 0.1% • Revenue of $488.4 million, up 0.1% YoY YoY growth of 3% in constant currencies and excluding Japan $488.1 $488.4 Strong growth in CNC machining and 3D printing Working to drive growth in injection molding Hubs contributed $48.5 million o
Slide 24: Revenue by Service | FY 2022 YoY
Revenue by Service | FY 2022 YoY Injection Molding - Revenue CNC Machining - Revenue ($M) (9)%* ($M) 14%* $226.1 $200.6 $166.8 $188.4 FY 2021 FY 2022 FY 2021 FY 2022 3D Printing - Revenue Sheet Metal - Revenue ($M) ($M) 11%* (5)%* $72.7 $79.0 $20.4 $19.5 FY 2021 FY 2022 FY 2021 FY 2022 *YoY change r
Slide 25: Revenue by Region | FY 2022
Revenue by Region | FY 2022 YoY Change YoY Change YoY Change Revenue % by Region $M FY 22 FY 21 Overall Constant Fx* Constant Fx* FY 2022 Excl. Japan Americas $387.4 $384.5 1% 1% 2% 19% Europe $92.8 $90.4 3% 13% Japan $8.2 $13.2 (38)% (29)% 79% TOTAL $488.4 $488.1 0% 2% 3% Americas Europe Japan *YoY
Slide 26: FY 2022 Detailed Financial Information
FY 2022 Detailed Financial Information
Slide 27: Financial Results | FY 2022
Financial Results | FY 2022 $M, Except per share amounts FY 2022 FY 2021 YoY Change Revenue $488.4 $488.1 0.1% Non-GAAP 44.8% 46.4% (160) bps Gross Margin* Non-GAAP 10.4% 11.3% (90) bps Operating Margin* Non-GAAP $1.50 $1.55 (3.3)% Earnings Per Share* *Non-GAAP: adjusted for stock-based compensation
Slide 28: YoY GAAP to Non-GAAP P&L | FY 2022
YoY GAAP to Non-GAAP P&L | FY 2022 Twelve Months Ended Dec. 31, 2022 Twelve Months Ended Dec. 31, 2021 $ in thousands GAAP Adjustments Non-GAAP* GAAP Adjustments Non-GAAP* Revenue $488,398 - $488,398 $488,098 - $488,098 Cost of Revenue 272,933 (3,541) 269,392 265,407 (3,964) 261,443 Gross Profit $21
Slide 29: Cash Flow and Balance Sheet | FY 2022
Cash Flow and Balance Sheet | FY 2022 $M FY 2022 FY 2021 Operating Cash Flow $62.1 $55.2 Capital Expenditures $21.7 $34.2 Share Repurchases $29.7 $23.3 Cash and Investments* $106.5 $91.8 Debt* $0 $0 *Balance Sheet items as of the end of the period. 29
Slide 30: Q1 2023 Financial Outlook
Q1 2023 Financial Outlook
Slide 31: Outlook | Q1 2023
Outlook | Q1 2023 Q1 2023 Revenue Q1 2023 Non-GAAP* EPS Revenue $114M - $122M Non-GAAP EPS $0.18 - $0.26 % Growth YoY (constant Fx ex. Japan) (3)% - 3% % Growth YoY (53)% - (32)% Q1 2023 Outlook Commentary* ▸ Expect foreign currency to have a ~$2.2 million unfavorable impact on Q1 2023 revenue ▸ Jap
Slide 32: Thank You
Thank You
Slide 33: Appendix
Appendix
Slide 34: GAAP to NON-GAAP Reconciliation | Revenue by Region
GAAP to NON-GAAP Reconciliation | Revenue by Region Proto Labs, Inc. Comparison of GAAP to Non-GAAP Revenue Growth by Region (In thousands) (Unaudited) Three Months Ended Three Months Ended Decem ber 31, 2022 Decem ber 31, 2021 % Foreign Hubs % Change 3 4 GAAP Currency1 Acquisition Non-GAAP GAAP Cha
Slide 35: GAAP to NON-GAAP Reconciliation | Revenue by Service
GAAP to NON-GAAP Reconciliation | Revenue by Service Proto Labs, Inc. Comparison of GAAP to Non-GAAP Revenue Growth by Service Line (In thousands) (Unaudited) Three Months Ended Three Months Ended Decem ber 31, 2022 Decem ber 31, 2021 % Foreign % Change 3 4 GAAP Currency1 Hubs Acquisition Non-GAAP G
Slide 36: GAAP to NON-GAAP Reconciliation | Gross Margin
GAAP to NON-GAAP Reconciliation | Gross Margin Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Gross Margin (In thousands) (Unaudited) Three Months Ended Year Ended Three Months Ended Decem ber 31, Decem ber 31, Septem ber 30, 2022 2021 2022 2021 2022 2021 Revenue $ 115,607 $ 123,582 $ 488,398 $
Slide 37: GAAP to NON-GAAP Reconciliation | Operating Margin
GAAP to NON-GAAP Reconciliation | Operating Margin Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Operating Margin (In thousands) (Unaudited) Three Months Ended Year Ended Decem ber 31, Decem ber 31, 2022 2021 2022 2021 Revenue $ 115,607 $ 123,582 $ 488,398 $ 488,098 (Loss) income from operatio
Slide 38: GAAP to NON-GAAP Reconciliation | EBITDA
GAAP to NON-GAAP Reconciliation | EBITDA Proto Labs, Inc. Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA (In thousands) (Unaudited) Three Months Ended Year Ended Decem ber 31, Decem ber 31, 2022 2021 2022 2021 Revenue $ 115,607 $ 123,582 $ 488,398 $ 488,098 GAAP net (loss) income (1
Slide 39: GAAP to NON-GAAP Reconciliation | EPS
GAAP to NON-GAAP Reconciliation | EPS 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 Year Ended Decem ber 31, Decem ber 31, 2022 2021 2022 2021 Non-GAAP net (loss) income, adjusted for stock-b
Slide 40: GAAP to NON-GAAP Reconciliation | Q1 2023 Outlook
GAAP to NON-GAAP Reconciliation | Q1 2023 Outlook Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Guidance (In thousands, except share and per share amounts) (Unaudited) Q1 2023 Guidance Low High GAAP diluted earnings per share $ (0.02) $ 0.06 Add back: Stock-based compensation expense 0.13 0.13