Proto Labs Inc (PRLB) Q3 2025 Earnings Call Highlights: Record Revenue and Strategic Growth ...

This article first appeared on GuruFocus.

Revenue: $135.4 million, up 7.8% year over year. CNC Machining Revenue: Grew 18.2% year over year. Injection Molding Revenue: Increased by 2% year over year. 3D Printing Revenue: Declined 6.3% year over year. Sheet Metal Revenue: Grew 13.9% year over year. US Revenue Growth: Increased by 10% year over year. European Revenue: Declined 5% in constant currencies. Non-GAAP Gross Margin: 45.9%, up 110 basis points sequentially. Non-GAAP Operating Expenses: $48.6 million, 35.9% of revenue. Adjusted EBITDA: $21.1 million, 15.6% of revenue. Non-GAAP EPS: $0.47, up $0.06 sequentially. Cash from Operations: $29.1 million generated in the third quarter. Shareholder Returns: $12.8 million in repurchases. Cash and Investments: $138.4 million on balance sheet, zero debt. 4th Quarter Revenue Guidance: Between $125 and $133 million. 4th Quarter Non-GAAP EPS Guidance: Between $0.30 and $0.38.

Warning! GuruFocus has detected 7 Warning Signs with PRLB. Is PRLB fairly valued? Test your thesis with our free DCF calculator.

Release Date: October 31, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Proto Labs Inc (NYSE:PRLB) delivered record quarterly revenues of $135.4 million, marking a 7.8% year-over-year growth. The company experienced strong demand in the US, particularly in CNC machining and sheet metal offerings, with CNC machining revenue growing 18.2% year over year. Proto Labs Inc (NYSE:PRLB) has been recognized as one of America's best in-state employers by Forbes, highlighting its strong workplace culture. The company is expanding its CNC machining capacity, indicating confidence in future growth and demand. Proto Labs Inc (NYSE:PRLB) has successfully implemented advanced CNC machining capabilities, enhancing precision and quality, which are now available through its e-commerce platform.

Negative Points

Revenue from 3D printing declined by 6.3% year over year, primarily due to weak demand in Europe. The injection molding segment showed only modest growth of 2% year over year, with weak prototyping demand impacting performance. European revenue declined by 5% in constant currencies, reflecting continued contraction in European manufacturing activity. The number of unique developers using Proto Labs Inc (NYSE:PRLB) services has decreased, reaching a three-year low. Despite improvements, the company still faces challenges with tariffs impacting network gross margins, although adjustments have been made to mitigate this.

Q & A Highlights

Q: Suresh, a lot of your prepared remarks revolved around accelerated growth, but many investors don't see Proto Labs as a growth company. What is the potential growth rate for the company long-term? A: Suresh Krishna, President and CEO: We are focused on driving growth, with the last two quarters showing over 7% growth. We are working on a new strategic plan to be shared in 2026. Our current focus is on understanding and removing customer friction points and delivering products across the product life cycle, which is resonating well with our customers.

Story Continues

Q: Are you seeing growth due to company-specific initiatives or just riding the wave of growth in end markets like aerospace and defense? A: Suresh Krishna, President and CEO: Growth is not limited to aerospace and defense; we serve 50,000 customers annually across various industries. Our advanced machining capabilities, developed from customer feedback, are one example of our initiatives. We are a destination for innovation, serving both small innovators and large Fortune 500 companies.

Q: What is the CapEx requirement for the CNC expansion? Is it just more machines or a new facility? A: Dan Schumacher, CFO: We are fine from a facility perspective and are simply adding mills to expand quickly. Our digital manufacturing model allows us to maintain fast lead times by adding equipment to existing facilities.

Q: The unique developer number is down year over year. How are you addressing the growth of new developers? A: Suresh Krishna, President and CEO: We are focused on growing our customer base and increasing our share of wallet. While we are currently seeing results in growing share of wallet, we are also committed to expanding our overall customer base.

Q: How automated is the new advanced CNC machining capability, especially in evaluating 2D drawings? A: Suresh Krishna, President and CEO: The process is automated through our website, allowing customers to specify requirements digitally. While manual intervention is minimized, application engineers are available for clarifications. The system is designed to handle complex specifications efficiently.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

View Comments