Protolabs reports full year 2018 financials with record quarter for 3D printing

Award winning on demand manufacturing provider Protolabs, headquartered in Maple Plain, Minnesota, has announced its financial earnings for the fourth quarter and full year 2018.

Headline revenue for FY2018 was $445.6 million, up 29% on the previous year which was $344.5 million. Revenue for Q4 2018 was reported at $112.8 million, an increase of 20% over Q4 2017 which was $94.2 million.

Of Q4 2018’s revenue, the 3D printing segment accounts for $13.9 million, which Vicki Holt, Protolabs President and CEO has called “a record quarter” for the service, up 23.6% on Q4 2017 3D printing revenue which was $11.3 million.

The results come after our 3D Printing Industry Index provided a similar indication earlier this month.

Overall, Holt maintains, “2018 was a strong year overall for our company. As we enter into our 20th year of operations, it is rewarding to look back at all we have accomplished since our inception. […] Our 2019 priorities are aligned to serving our customers through enhanced relationships, continuously improving the customer experience and increased efficiency in operations,”

“After a strong 2018, these priorities continue our focus on our customers, enabling us to drive growth and deliver long term shareholder returns.”

Vicki Holt, President and Chief Executive Officer of Protolabs. Photo by Thomas Strand, Forbes
Vicki Holt, President and Chief Executive Officer of Protolabs. Photo by Thomas Strand, Forbes

Protolabs revenue by manufacturing service

Protolabs’ services in earnings are represented as five categories: Injection Molding, CNC Machining, 3D Printing, Sheet Metal and Other. As longstanding legacy services, Injection Molding and CNC Machining account for the majority of the company’s revenue.

For the year ended December 31, 2018, Injection Molding reported a revenue of $210.5 million, and increase of $16 million on FY2017 Injection Molding revenue, which was $194.4 million. For the fourth quarter, Injection Molding reported a revenue of $52.9 million, compared to Q4 2017 revenue of $50.2 million.

In CNC Machining, FY2018 revenue was reported at $152.5 million, compared to FY2017 CNC Machining revenue which was $103.7 million. CNC Machining Revenue for the quarter was $38.1 million, compared to Q4 2017’s revenue of $30.4 million.

3D Printing is the third highest revenue for Protolabs. For FY2018, 3D Printing reported $53.3 million in revenue, compared to $43.3 million in FY2017.

Q4 2018 also marks the first time Protolabs has a year on year comparable value for its Sheet Metal service. For Q4 FY2018, Sheet Metal revenue was reported at $6 million, compared to Q4 FY2017 at $1.8 million.

Revenue Q4 FY2018 Q4 FY 2017 Variance $ millions %
Injection Molding 53,913 50,245 3,668 7.30%
CNC Machining 38,157 30,421 7,736 25.43%
3D Printing 13,924 11,268 2,656 23.57%
Sheet Metal 5,996 1767 4,229 239.33%
Other 779 477 302 63.31%
Total revenue 112,769 94,178 18,591 19.74%

Net income for Q4 2018 was $19.3 million, or $0.71 per diluted share. Non-GAAP net income for Q4 2018 was $20.3 million, or $0.74 per diluted share.

Rapid Manufacturing performance

Though FY2018 was a strong year overall for Protolabs in terms of revenue growth, Holt adds that “fourth quarter financial results were below our expectations.” This is attributed to, in part, weak revenues in December, the relocation of its U.S. CNC facility, and the performance of Rapid Manufacturing, a business recently acquired by Protolabs in a deal valued at $120 million.

Holt adds, “The revenue and earnings growth from our acquisition of Rapid Manufacturing is not meeting our expectations. In the quarter, we prepared our customer-facing teams in the U.S. to sell our full suite of products and services, including sheet metal and an expanded CNC offer beginning January 1st,”

“This involved merging all customer accounts, reallocating the accounts to the sales force and training each sales team on the expanded service offering they would sell on January 1st. This disruption had an impact on the revenue from the Rapid services in the quarter.”

Due to the performance of Rapid, and expecting a slow January, Protolabs has set guidance revenue growth of between 5 and 10% for Q1 FY2019.

Protolabs revenue by region – strong in the U.S. and opening up in Japan

In addition to the Rapid acquisition, Protolabs has hit a number of milestones in the past 12 months, including becoming a founding member of  MIT’s Additive and Digital Advanced Production Technologies (ADAPT) consortium, and GE Additive’s Manufacturing Partner Network. The company also entered into partnership with Japanese parts distributor Misumi to cement its brand recognition in the region.

In revenue distributed by region, for Q4 FY2018 Japan saw a 26.7% increase on revenue from Q4 FY2017, up to $4 million from $3.2 million. The U.S. continues to be Protolabs’ most prolific market, accounting for a Q4 FY2018 revenue of $89.3 million, an increase of 23.9% on the same period in 2017, which was $72 million.

Regarding Misumi, Holt adds, “We are pleased with the progress of this partnership as it has continued to accelerate demand and order volume for Protolabs in Japan.

Revenue Q4 FY2018 Q4 FY2017 Variance $ millions %
United States 89,282 72,067 17,215 23.89%
Europe 19,458 18,930 528 2.79%
Japan 4,029 3,181 848 26.66%
Total Revenue 112,769 94,178 18,591 19.74%

Full financial results for Protolabs Q4 and full year 2018 can be found online here.

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Featured image shows MJF 3D printing in progress. Photo via Protolabs