Protolabs reports Q3 2019 financials, 3D printing continues to grow

On demand digital manufacturing provider Protolabs (NYSE:PRLB) has reported its financial earnings for the third quarter of fiscal 2019. Revenue for the period ended September 30, 2019 was reported at $117.5 million, delivering a gross margin of 50.8 percent. This can be compared to a revenue of $115.4 million in Q3 2018, with a gross margin of 52.0 percent. Net income for Q3 2019 was $16.8 million compared to $21 million in Q3 2018.

Citing “a weakening macroeconomic environment” Protolabs CEO Vicki Holt said that the company’s 2019 year over year growth rates were “lower than historical levels,” and so a “disciplined approach” would be taken to expenses management going forward. Nevertheless, Holt maintained the intention is to continue to invest in the company for future growth. For 3D printing, which continues to perform well for the company, this includes an ‘aggressive pursuit’ of “new and differentiated 3D printing technologies” to serve customers as “the 3D printing market continues to evolve and expand.”

“We have built a leadership position in the digital manufacturing space by focusing on the needs of our customers and we remain steadfast in our mission,”  Holt summarized.

“I’m very confident and excited about the long-term prospects for Protolabs.”

Metal and MJF drive 3D Printing venue 

Protolabs reports its earnings under four areas of operations relating to its service offerings of Injection Molding, CNC Machining, 3D Printing and Sheet Metal. CNC Machining and Injection Molding each bring in the highest share of revenue. For Q3 2019, Injection Molding revenue was reported at $55.2 million compared to $53.7 million in Q3 2018. CNC Machining in Q3 2019 reported a revenue of $40.2 million, compared to $40.8 million in Q3 2018.

3D Printing typically delivers the third largest portion of overall company revenue. In Q3 2019 3D Printing revenue was reported at $15.9 million, a record 14.8 percent increase compared to $13.8 million in revenue from Q3 2018. The technologies credited with driving the recent growth in this operation are the company’s metal additive manufacturing offering and HP Multi Jet Fusion. Both methods feed into a strategy which sees 3D printing at Protolabs move away from prototyping to deliver more “production ready” components. As Holt comments, “These technologies expand our ability to deliver production solutions. Our offerings continue to provide exceptional value to customers as industry demand for metal 3D printing and Multi Jet Fusion parts grows.” 

Sheet Metal is the fourth service offering reported by Protolabs. In Q3 2019, Sheet Metal services from the company delivered $5.3 million in revenue, compared to $6.5 million in Q3 2018. A further $891 thousand in revenue for Q3 2019 is attributed to Other.

Revenues Q3 2019 Q3 2018 Variance $ millions %
Injection Molding 55,167 53,681 1,486 2.77%
CNC Machining 40,219 40,845 -626 -1.53%
3D Printing 15,898 13,845 2,053 14.83%
Sheet Metal 5,280 6,452 -1,172 -18.16%
Other 891 607 284 46.79%
Total revenue 117,455 115,430 2,025 1.75%

Geographically, the U.S. remains Protolabs’ strongest region for revenue. For Q3 2019, revenue from the U.S. was reported at $92.9 million, compared to $90.7 million in Q3 2018. Though previous quarters proved optimistic for a rebounded growth in Europe, Q3 2019 revenue decreased 2.6 percent to $20.7 million compared to $21.3 million in Q3 2019. Japan continues to perform well, experiencing an 11.5 percent increase in Q3 2019 to $3.8 million, compared to $3.4 million in Q3 2018.

Revenues Q3 2019 Q3 2018 Variance $ millions %
United States 92,916 90,732 2,184 2.41%
Europe 20,721 21,273 -552 -2.59%
Japan 3,818 3,678 140 3.81%
Total Revenue 117,455 115,683 1,772 1.53%

Growing the 3D printing service

Though, as Holt stated 3D printing on the call to investors, a “disciplined approach” will be taken to expenses in the current macroeconomic environment, 3D Printing is one of the services that the company continues to grow. In recent months, Protolabs has expanded its services with polypropylene (PP) 3D printing and the introduction of  Carbon’s Digital Light Synthesis (DLS) platform.

Commenting generally on Q3 2019’s results and looking toward Q4, Holt concluded “Our business grew year-over-year in the third quarter in an industrial environment that has continued to soften throughout 2019.

“Despite a weaker macro climate, our customer retention rate remains high as we continue to delight our customers by expanding and improving our industry-leading digital manufacturing offer.”

Protolabs Third Quarter 2019 Financial Results can be accessed in full here.

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Featured image shows an SLA 3D printing facility at Protolabs. Photo via Protolabs.