Slide 1: Earnings Presentation Q3 2020
Earnings Presentation Q3 2020 October 29, 2020
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: Q3 2020 Overview
y Q3 2020 OVERVIEW
Slide 4: Financial Highlights | Q3
FINANCIAL HIGHLIGHTS | Q3 Revenue ($M) (8.5)% • Revenue of $107.5 million, down (8.5)% YoY $117.5 $107.5 Sequential revenue increase of 0.9% 18,800 unique product developers served 2019 2020 Non-GAAP EPS* (11.8)% • Non-GAAP EPS of $0.67, down $(0.09) YoY YoY decline primarily due to lower volu
Slide 5: Regional Revenue | Q3
REGIONAL REVENUE | Q3 YoY Revenue % by Region ($M) Q3 20 Q3 19 CHANGE* Q3 2020 Americas $85.6 $92.9 (8)% 2.8% 17.6% Europe $18.9 $20.7 (13)% Japan $3.0 $3.8 (22)% 79.6% TOTAL $107.5 $117.5 (9)% Americas Europe Japan *YoY change reflected in constant currency See reconciliation in Appendix. 5
Slide 6: Revenue by Service | Q3
REVENUE BY SERVICE | Q3 Injection Molding - Revenue CNC Machining - Revenue ($M) (3)% ($M) (18)% $55.2 $53.3 $40.2 $33.1 2019 2020 2019 2020 3D Printing - Revenue Sheet Metal - Revenue ($M) ($M) 2% (24)% $15.9 $16.3 $5.3 $4.0 2019 2020 2019 2020 6
Slide 7: Q3 2020 Detailed Financial Information
Q3 2020 DETAILED FINANCIAL INFORMATION
Slide 8: Financial Results | Q3
FINANCIAL RESULTS | Q3 $M, EXCEPT SEQ. YoY PER SHARE AMOUNTS Q3 20 Q2 20 CHANGE Q3 19 CHANGE Revenue $107.5 $106.6 0.9% $117.5 (8.5)% Gross Margin 50.8% 49.2% 160 bps 50.8% 10 bps Non-GAAP 20.8% 17.6% 320 bps 21.6% (80) bps Operating Margin* Non-GAAP $0.67 $0.59 12.5% $0.76 (11.8)% Earnings Per Shar
Slide 9: YoY GAAP to Non-GAAP P&L | Q3
YoY GAAP to Non-GAAP P&L | Q3 Three Months Ended Sept. 30, 2020 Three Months Ended Sept. 30, 2019 $ in thousands GAAP Adjustments Non-GAAP* GAAP Adjustments Non-GAAP* Revenue $107,504 - $107,504 $117,455 - $117,455 Cost of Revenue 52,861 (989) 51,872 57,839 (872) 56,967 Gross Profit $54,643 $989 $55
Slide 10: QoQ GAAP to Non-GAAP P&L | Q3
QoQ GAAP to Non-GAAP P&L | Q3 Three Months Ended Sept. 30, 2020 Three Months Ended June 30, 2020 $ in thousands GAAP Adjustments Non-GAAP* GAAP Adjustments Non-GAAP* Revenue $107,504 - $107,504 $106,575 - $106,575 Cost of Revenue 52,861 (989) 51,872 54,119 (936) 53,183 Gross Profit $54,643 $989 $55,
Slide 11: Cash Flow and Balance Sheet | Q3
CASH FLOW and BALANCE SHEET | Q3 $M Q3 20 Q2 20 FY 18 Q3 19 Operating Cash Flow $29.0 $31.0 $28.9 Capital Expenditures $7.2 $19.9 $12.0 Share Repurchases $0.0 $2.7 $12.1 Cash and Investments* $200.6 $175.3 $155.0 Debt* $0 $0 $0 *Balance Sheet items as of the end of the period. 11
Slide 12: Protolabs 2.0
y PROTOLABS 2.0
Slide 13: 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 14: Protolabs 2.0 | October Update
PROTOLABS 2.0 | OCTOBER UPDATE • Planned Launch Europe: November 2020 Americas: Q1 2021 • Customer Benefits More intuitive interface and easier to understand part configurations Improved workflow and collaboration – parts organized into projects Customer quotes are easier to understand – a
Slide 15: Financial Outlook
y FINANCIAL OUTLOOK
Slide 16: Q4 2020 | Outlook
Q4 2020 | OUTLOOK Q4 2020 Revenue Details Q4 2020 Revenue • Seasonality: Q4 traditionally lower than Q3 Revenue $96M - $106M • Anticipate Q4 COVID-19 related revenue will be lower than Q3 ($3 million) % Growth YoY (14)% - (5)% • Do not expect foreign currency to have a significant impact on Q4 reven
Slide 17: Thank You
THANK YOU PROTOLABS Manufacturing. Accelerated.
Slide 18: Appendix
APPENDIX
Slide 19: GAAP to Non-GAAP Reconciliation | Revenue
GAAP to NON-GAAP RECONCILIATION | Revenue ($ in thousands) Three Months Three Months Ended Ended % Change Septem ber 30, 2020 Sept 30, 2019 % Constant 2 3 GAAP Adjustm ents 1 Non-GAAP GAAP Change Currencies Revenues United States $ 85,608 $ - $ 85,608 $ 92,916 (7.9) (7.9) Europe 18,897 (828) 18,069
Slide 20: GAAP to Non-GAAP Reconciliation | EBITDA
GAAP to NON-GAAP RECONCILIATION | EBITDA ($ in thousands) Three Months Ended Septem ber 30, 2020 2019 GAAP net income $ 14,697 $ 16,792 Amortization expense 754 859 Depreciation expense 7,282 6,820 Interest income, net (255) (489) Tax expense 3,700 4,709 EBITDA 26,178 28,691 Add back: Stock-based co
Slide 21: GAAP to Non-GAAP Reconciliation | EPS
GAAP to NON-GAAP RECONCILIATION | EPS Three Months Ended ($ in thousands, except share and per share amounts) Septem ber 30, 2020 2019 Non-GAAP net income, adjusted for stock-based compensation expense, amortization expense and unrealized (gain) loss on foreign currency GAAP net income $ 14,697 $ 16