Business Wire | Feb 12, 2021 06:00AM EST

Protolabs Reports Financial Results for the Fourth Quarter and Full Year 2020

Feb. 12, 2021

MAPLE PLAIN, Minn.--(BUSINESS WIRE)--Feb. 12, 2021--Proto Labs, Inc. (NYSE: PRLB), a leading online and technology-enabled, quick-turn on-demand manufacturer, today announced financial results for the fourth quarter and full year ended December 31, 2020.

Fourth Quarter 2020 Highlights include:

* Revenue for the fourth quarter of 2020 was $105.2 million, representing a 2.1 percent decline compared to revenue of $107.5 million in the third quarter of 2020. * EBITDA margin was 19.1 percent of revenue in the fourth quarter of 2020, compared to 24.4 percent in the third quarter of 2020. * Adjusted EBITDA margin was 23.0 percent of revenue in the fourth quarter of 2020, compared to 27.9 percent in the third quarter of 2020. See "Non-GAAP Financial Measures" below. * Net income for the fourth quarter of 2020 was $9.6 million, or $0.36 per diluted share. * Non-GAAP net income was $13.5 million, or $0.50 per diluted share. See "Non-GAAP Financial Measures" below.

"Protolabs responded very well in the face of unforeseen challenges driven by the emergence of the global pandemic and the ensuing substantial decline in global economic activity during 2020. As an organization, we prioritized the health of our employees, while continuing to serve our customers and advance our long-term business opportunities. As a result, we further enhanced our leadership in the digital manufacturing space," said Vicki Holt, President and Chief Executive Officer.

"2020 showcased the adaptability of our workforce and our ability to further expand and improve our digital model," said Rob Bodor, Vice President and General Manager of the Americas and incoming President and Chief Executive Officer. "There is tremendous opportunity ahead of us, and we have clear strategic objectives for 2021 and beyond: create a world-class customer experience, expand our digital manufacturing offer, and further invest in our employees. With the successful go-live of Protolabs 2.0 and the addition of 3D Hubs, we are uniquely positioned to capitalize on that opportunity. I look forward to partnering with all employees to drive the long-term success of Protolabs."

Full Year 2020 Highlights include:

* 2020 revenue of $434.4 million, compared to $458.7 million in 2019. * Protolabs served 40,267 product developers during the year. * Gross margin was 50.1 percent of revenue in 2020, compared to 51.3 percent in 2019. * EBITDA margin was 21.7 percent of revenue in 2020, compared to 24.0 percent in 2019. * Adjusted EBITDA margin was 24.8 percent of revenue in 2020, compared to 26.5 percent in 2019. See "Non-GAAP Financial Measures" below. * Net income for 2020 was $50.9 million, or $1.89 per diluted share. * Non-GAAP net income was $63.6 million, or $2.36 per diluted share. * The company generated $107.0 million in cash from operations in 2020. * Cash and investments balance was $221.0 million at December 31, 2020.

"2020 was the most difficult backdrop our business has ever faced, yet our digital manufacturing model continued its strong cash flow generation, allowing us to proceed with investments to support the long-term growth of the business, while maintaining our financial strength and flexibility," added John Way, Chief Financial Officer.

Non-GAAP Financial Measures

The company has included non-GAAP revenue growth that excludes the impact of changes in foreign currency exchange rates (collectively, "non-GAAP revenue growth"). Management believes these metrics are useful in evaluating the underlying business trends and ongoing operating performance of the company.

The company has included earnings before interest, taxes, depreciation and amortization ("EBITDA") and EBITDA, adjusted for stock-based compensation expense, unrealized (gain) loss on foreign currency, and transaction costs (collectively, "Adjusted EBITDA"), in this press release to provide investors with additional information regarding the company's financial results.

The company has included non-GAAP operating margin, adjusted for stock-based compensation expense, amortization expense, and transaction costs (collectively, "non-GAAP operating margin"), in this press release to provide investors with additional information regarding the company's financial results.

The company has included non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency, and transaction costs (collectively, "non-GAAP net income"), in this press release to provide investors with additional information regarding the company's financial results.

The company has provided below reconciliations of GAAP to non-GAAP net income, non-GAAP operating margin, non-GAAP revenue growth and Adjusted EBITDA, the most directly comparable measures calculated and presented in accordance with GAAP. These non-GAAP measures are used by the company's management and board of directors to understand and evaluate operating performance and trends and provide useful measures for period-to-period comparisons of the company's business. Accordingly, the company believes that these non-GAAP measures provide useful information to investors and others in understanding and evaluating operating results in the same manner as our management and board of directors.

Conference Call

The company has scheduled a conference call to discuss its fourth quarter and full year 2020 financial results today, February 12, 2021 at 8:30 a.m. EST. To access the call in the U.S. please dial 877-709-8150 or outside the U.S. dial 201-689-8354 at least five minutes prior to the 8:30 a.m. EST start time. No participant code is required. A simultaneous webcast of the call will be available via the investor relations section of the Protolabs website and the following link: https://edge.media-server.com/mmc/p/7ayaedkz. A replay will be available for 14 days following the call on the investor relations section of the Protolabs website.

About Protolabs

Protolabs is the world's leading source for digital manufacturing services. The technology-enabled company produces custom components in as fast as 1 day with automated 3D printing, CNC machining, sheet metal fabrication, and injection molding processes. Its digital approach to manufacturing enables accelerated time to market, reduces manufacturing costs, and enables supply chain agility throughout the product life cycle. Visit protolabs.com for more information.

Forward-Looking Statements

Statements contained in this press release regarding matters that are not historical or current facts are "forward-looking statements" within the meaning of The Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors which may cause the results of Protolabs to be materially different than those expressed or implied in such statements. Certain of these risk factors and others are described in the "Risk Factors" section within reports filed with the SEC. Other unknown or unpredictable factors also could have material adverse effects on Protolabs' future results. The forward-looking statements included in this press release are made only as of the date hereof. Protolabs cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Protolabs expressly disclaims any intent or obligation to update any forward-looking statements to reflect subsequent events or circumstances.

Proto Labs, Inc.Condensed Consolidated Balance Sheets(In thousands) December 31, December 31,

2020 2019

(Unaudited)

Assets Current assets Cash and cash equivalents $ 127,603 $ 125,225

Short-term marketable securities 34,088 35,437

Accounts receivable, net 57,877 57,450

Inventory 10,862 10,075

Income taxes receivable 540 -

Prepaid expenses and other current assets 11,032 8,232

Total current assets 242,002 236,419

Property and equipment, net 282,666 263,712

Goodwill 128,752 128,752

Other intangible assets, net 14,350 17,369

Long-term marketable securities 59,357 12,960

Operating lease assets 9,855 11,425

Finance lease assets 2,396 -

Other long-term assets 4,826 3,030

Total assets $ 744,204 $ 673,667

Liabilities and shareholders' equity Current liabilities Accounts payable $ 18,248 $ 16,804

Accrued compensation 11,989 15,058

Accrued liabilities and other 16,193 11,057

Current operating lease liabilities 3,272 3,340

Current finance lease liabilities 552 -

Income taxes payable - 1,322

Total current liabilities 50,254 47,581

Long-term operating lease liabilities 7,586 8,565

Long-term finance lease liabilities 1,919 -

Long-term deferred tax liabilities 33,854 26,283

Other long-term liabilities 6,235 5,448

Shareholders' equity 644,356 585,790

Total liabilities and shareholders' equity $ 744,204 $ 673,667

Proto Labs, Inc.Condensed Consolidated Statements of Operations(In thousands, except share and per share amounts)(Unaudited)Three Months Ended

Year Ended

December 31,

December 31,

2020

2019

2020

2019

RevenueInjection Molding$ 52,065

$ 51,480

$ 217,992

$ 217,415

CNC Machining31,827

38,494

131,587

155,473

3D Printing16,024

15,708

62,502

61,352

Sheet Metal4,532

5,223

18,838

21,000

Other760

984

3,476

3,488

Total revenue105,208

111,889

434,395

458,728

Cost of revenue52,580

55,311

216,568

223,438

Gross profit52,628

56,578

217,827

235,290

Operating expensesMarketing and sales17,488

17,510

69,309

72,976

Research and development11,390

8,151

36,940

32,692

General and administrative12,759

11,355

51,742

49,766

Total operating expenses41,637

37,016

157,991

155,434

Income from operations10,991

19,562

59,836

79,856

Other income, net560

(229)

3,109

1,337

Income before income taxes11,551

19,333

62,945

81,193

Provision for income taxes1,972

4,147

12,078

17,538

Net income$ 9,579

$ 15,186

$ 50,867

$ 63,655

Net income per share:Basic$ 0.36

$ 0.57

$ 1.90

$ 2.37

Diluted$ 0.36

$ 0.56

$ 1.89

$ 2.35

Shares used to compute net income per share:Basic26,775,279

26,777,536

26,737,425

26,866,985

Diluted26,976,582

26,945,927

26,896,357

27,049,423

Proto Labs, Inc.Condensed Consolidated Statements of Operations(In thousands, except share and per share amounts)(Unaudited) Three Months Ended Year Ended

December 31, December 31,

2020 2019 2020 2019

Revenue Injection Molding $ 52,065 $ 51,480 $ 217,992 $ 217,415

CNC Machining 31,827 38,494 131,587 155,473

3D Printing 16,024 15,708 62,502 61,352

Sheet Metal 4,532 5,223 18,838 21,000

Other 760 984 3,476 3,488

Total revenue 105,208 111,889 434,395 458,728

Cost of revenue 52,580 55,311 216,568 223,438

Gross profit 52,628 56,578 217,827 235,290

Operating expenses Marketing and sales 17,488 17,510 69,309 72,976

Research and development 11,390 8,151 36,940 32,692

General and administrative 12,759 11,355 51,742 49,766

Total operating expenses 41,637 37,016 157,991 155,434

Income from operations 10,991 19,562 59,836 79,856

Other income, net 560 (229) 3,109 1,337

Income before income taxes 11,551 19,333 62,945 81,193

Provision for income taxes 1,972 4,147 12,078 17,538

Net income $ 9,579 $ 15,186 $ 50,867 $ 63,655

Net income per share: Basic $ 0.36 $ 0.57 $ 1.90 $ 2.37

Diluted $ 0.36 $ 0.56 $ 1.89 $ 2.35

Shares used to compute net income per share: Basic 26,775,279 26,777,536 26,737,425 26,866,985

Diluted 26,976,582 26,945,927 26,896,357 27,049,423

Proto Labs, Inc.Condensed Consolidated Statements of Cash Flows(In thousands)(Unaudited)Year Ended

December 31,

2020

2019

Operating activitiesNet income$ 50,867

$ 63,655

Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization32,594

30,864

Stock-based compensation expense14,673

10,781

Deferred taxes7,577

6,106

Amortization of held-to-maturity securities415

5

Other(336)

391

Changes in operating assets and liabilities1,179

4,250

Net cash provided by operating activities106,969

116,052

Investing activitiesPurchases of property, equipment and other capital assets(47,010)

(62,230)

Purchases of other assets and investments(3,000)

(4,000)

Purchases of marketable securities(113,200)

(46,403)

Proceeds from maturities of marketable securities67,737

68,330

Net cash used in investing activities(95,473)

(44,303)

Financing activitiesPrincipal repayments of finance lease obligations(154)

-

Proceeds from exercises of stock options7,557

4,391

Purchases of shares withheld for tax obligations(3,443)

(2,487)

Repurchases of common stock(14,686)

(33,521)

Net cash used in financing activities(10,726)

(31,617)

Effect of exchange rate changes on cash and cash equivalents1,608

47

Net increase in cash and cash equivalents2,378

40,179

Cash and cash equivalents, beginning of period125,225

85,046

Cash and cash equivalents, end of period$ 127,603

$ 125,225

Proto Labs, Inc.Condensed Consolidated Statements of Cash Flows(In thousands)(Unaudited) Year Ended

December 31,

2020 2019

Operating activities Net income $ 50,867 $ 63,655

Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 32,594 30,864

Stock-based compensation 14,673 10,781 expense Deferred taxes 7,577 6,106

Amortization of 415 5 held-to-maturity securities Other (336) 391

Changes in operating assets 1,179 4,250 and liabilities Net cash provided by operating activities 106,969 116,052

Investing activities Purchases of property, equipment and other (47,010) (62,230) capital assets Purchases of other assets and investments (3,000) (4,000)

Purchases of marketable securities (113,200) (46,403)

Proceeds from maturities of marketable 67,737 68,330 securities Net cash used in investing activities (95,473) (44,303)

Financing activities Principal repayments of finance lease (154) - obligations Proceeds from exercises of stock options 7,557 4,391

Purchases of shares withheld for tax (3,443) (2,487) obligations Repurchases of common stock (14,686) (33,521)

Net cash used in financing activities (10,726) (31,617)

Effect of exchange rate changes on cash and cash 1,608 47 equivalents Net increase in cash and cash equivalents 2,378 40,179

Cash and cash equivalents, beginning of period 125,225 85,046

Cash and cash equivalents, end of period $ 127,603 $ 125,225

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

December 31,

December 31,

2020

2019

2020

2019

Non-GAAP net income, adjusted for stock-based compensation expense,amortization expense, unrealized (gain) loss on foreign currency andtransaction costsGAAP net income$

9,579

$

15,186

$

50,867

$

63,655

Add back:Stock-based compensation expense4,056

1,043

14,673

10,781

Amortization expense754

889

3,016

3,482

Unrealized (gain) loss on foreign currency(353

)

286

(1,373

)

677

Transaction costs427

-

427

-

Total adjustments 14,884

2,218

16,743

14,940

Income tax benefits on adjustments 2(1,013

)

(350

)

(4,043

)

(3,225

)

Non-GAAP net income$

13,450

$

17,054

$

63,567

$

75,370

Non-GAAP net income per share:Basic$

0.50

$

0.64

$

2.38

$

2.81

Diluted$

0.50

$

0.63

$

2.36

$

2.79

*

*

*

*

Shares used to compute non-GAAP net income per share:Basic26,775,279

26,777,536

26,737,425

26,866,985

Diluted26,976,582

26,945,927

26,896,357

27,049,423

1 Stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and transaction costs were included in the following GAAP consolidated statement of operations categories:Three Months Ended

Year Ended

December 31,

December 31,

2020

2019

2020

2019

Cost of revenue$

1,032

$

933

$

3,820

$

3,335

Marketing and sales888

708

3,121

2,631

Research and development675

365

2,441

1,851

General and administrative2,642

(74

)

8,734

6,446

Total operating expenses4,205

999

14,296

10,928

Other income, net(353

)

286

(1,373

)

677

Total adjustments$

4,884

$

2,218

$

16,743

$

14,940

2 For the three-month and year-ended periods ended December 31, 2020 and 2019, income tax effects were calculated using the effective tax rate for the relevant jurisdictions. Our non-GAAP tax rates differ from our GAAP tax rates due primarily to the mix of activity incurred in domestic and foreign tax jurisdictions and removing effective tax rate benefits from stock-based compensation activity in the quarter.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

December 31, December 31,

2020 2019 2020 2019

Non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and transaction costs GAAP net $ 9,579 $ 15,186 $ 50,867 $ 63,655 income Add back: Stock-based 4,056 1,043 14,673 10,781 compensation expense Amortization 754 889 3,016 3,482 expense Unrealized (gain) loss on (353 ) 286 (1,373 ) 677 foreign currency Transaction 427 - 427 - costs Total 4,884 2,218 16,743 14,940 adjustments ^1 Income tax (1,013 ) (350 ) (4,043 ) (3,225 ) benefits on adjustments ^2 Non-GAAP net $ 13,450 $ 17,054 $ 63,567 $ 75,370 income Non-GAAP net income per share: Basic $ 0.50 $ 0.64 $ 2.38 $ 2.81

Diluted $ 0.50 $ 0.63 $ 2.36 $ 2.79

* * * *

Shares used to compute non-GAAP net income per share: Basic 26,775,279 26,777,536 26,737,425 26,866,985

Diluted 26,976,582 26,945,927 26,896,357 27,049,423

^1 Stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and transaction costs were included in the following GAAP consolidated statement of operations categories: Three Months Ended Year Ended

December 31, December 31,

2020 2019 2020 2019

Cost of $ 1,032 $ 933 $ 3,820 $ 3,335 revenue Marketing and 888 708 3,121 2,631 sales Research and 675 365 2,441 1,851 development General and 2,642 (74 ) 8,734 6,446 administrative Total 4,205 999 14,296 10,928 operating expenses Other income, (353 ) 286 (1,373 ) 677 net Total $ 4,884 $ 2,218 $ 16,743 $ 14,940 adjustments ^2 For the three-month and year-ended periods ended December 31, 2020 and 2019, income tax effects were calculated using the effective tax rate for the relevant jurisdictions. Our non-GAAP tax rates differ from our GAAP tax rates due primarily to the mix of activity incurred in domestic and foreign tax jurisdictions and removing effective tax rate benefits from stock-based compensation activity in the quarter. Proto Labs, Inc.Reconciliation of GAAP to Non-GAAP Operating Margin(In thousands)(Unaudited)Three Months Ended

Year Ended

December 31,

December 31,

2020

2019

2020

2019

Revenue$

105,208

$

111,889

$

434,395

$

458,728

Income from operations10,991

19,562

59,836

79,856

GAAP operating margin10.4

%

17.5

%

13.8

%

17.4

%

Add back:Stock-based compensation expense4,056

1,043

14,673

10,781

Amortization expense754

889

3,016

3,482

Transaction costs427

-

427

-

Total adjustments5,237

1,932

18,116

14,263

Non-GAAP income from operations$

16,228

$

21,494

$

77,952

$

94,119

Non-GAAP operating margin15.4

%

19.2

%

17.9

%

20.5

%

Proto Labs, Inc.Reconciliation of GAAP to Non-GAAP Operating Margin(In thousands)(Unaudited) Three Months Ended Year Ended

December 31, December 31,

2020 2019 2020 2019

Revenue $ 105,208 $ 111,889 $ 434,395 $ 458,728

Income from operations 10,991 19,562 59,836 79,856

GAAP operating margin 10.4 % 17.5 % 13.8 % 17.4 %

Add back: Stock-based compensation 4,056 1,043 14,673 10,781 expense Amortization expense 754 889 3,016 3,482

Transaction costs 427 - 427 -

Total adjustments 5,237 1,932 18,116 14,263

Non-GAAP income from $ 16,228 $ 21,494 $ 77,952 $ 94,119 operations Non-GAAP operating margin 15.4 % 19.2 % 17.9 % 20.5 %

Proto Labs, Inc.Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA(In thousands)(Unaudited)Three Months Ended

Year Ended

December 31,

December 31,

2020

2019

2020

2019

GAAP net income$

9,579

$

15,186

$

50,867

$

63,655

Amortization expense754

889

3,016

3,482

Depreciation expense7,949

7,317

29,578

27,383

Interest income, net(149

)

(560

)

(1,332

)

(2,095

)

Tax expense1,972

4,147

12,078

17,538

EBITDA20,105

26,979

94,207

109,963

Add back:Stock-based compensation expense4,056

1,043

14,673

10,781

Unrealized (gain) loss on foreign currency(353

)

286

(1,373

)

677

Transaction costs427

-

427

-

Total adjustments4,130

1,329

13,727

11,458

Adjusted EBITDA$

24,235

$

28,308

$

107,934

$

121,421

Proto Labs, Inc.Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA(In thousands)(Unaudited) Three Months Ended Year Ended

December 31, December 31,

2020 2019 2020 2019

GAAP net income $ 9,579 $ 15,186 $ 50,867 $ 63,655

Amortization expense 754 889 3,016 3,482

Depreciation expense 7,949 7,317 29,578 27,383

Interest income, net (149 ) (560 ) (1,332 ) (2,095 )

Tax expense 1,972 4,147 12,078 17,538

EBITDA 20,105 26,979 94,207 109,963

Add back: Stock-based compensation 4,056 1,043 14,673 10,781 expense Unrealized (gain) loss on (353 ) 286 (1,373 ) 677 foreign currency Transaction costs 427 - 427 -

Total adjustments 4,130 1,329 13,727 11,458

Adjusted EBITDA $ 24,235 $ 28,308 $ 107,934 $ 121,421

Proto Labs, Inc.Comparison of GAAP to Non-GAAP Revenue Growth(In thousands)(Unaudited)Three Months Ended December 31, 2020

Three Months Ended December 31, 2019

%

% Change Constant

GAAP

Adjustments1

Non-GAAP

GAAP

Change2Currencies3

RevenuesUnited States$

83,201

$

-

$

83,201

$

88,329

(5.8

%)

(5.8

%)

Europe18,383

(955

)

17,428

19,889

(7.6

%)

(12.4

%)

Japan3,624

(145

)

3,479

3,671

(1.3

%)

(5.2

%)

Total Revenue$

105,208

$

(1,100

)

$

104,108

$

111,889

(6.0

%)

(7.0

%)

Year EndedDecember 31, 2020Year EndedDecember 31, 2019%% ChangeConstantGAAPAdjustments1Non-GAAPGAAPChange2

Currencies3

RevenuesUnited States$

345,708

$

-

$

345,708

$

360,205

(4.0

%)

(4.0

%)

Europe74,796

(718

)

74,078

82,805

(9.7

%)

(10.5

%)

Japan13,891

(298

)

13,593

15,718

(11.6

%)

(13.5

%)

Total Revenue$

434,395

$

(1,016

)

$

433,379

$

458,728

(5.3

%)

(5.5

%)

1 Revenue growth for the three-month and year-ended periods ended December 31, 2020 has been recalculated using 2019 foreign currency exchange rates in effect during comparable periods to provide information useful in evaluating the underlying business trends excluding the impact of changes in foreign currency exchange rates.2 This column presents the percentage change from GAAP revenue growth for the three-month and year-ended periods ended December 31, 2019 to GAAP revenue growth for the three-month and year-ended periods ended December 31, 2020.3 This column presents the percentage change from GAAP revenue for the three-month and year-ended periods ended December 31, 2019 to non-GAAP revenue for the three-month and year-ended periods ended December 31, 2020 (as recalculated using the foreign currency exchange rates in effect during the three-month and year-ended periods ended December 31, 2019) in order to provide a constant currency comparison.Proto Labs, Inc.Comparison of GAAP to Non-GAAP Revenue Growth(In thousands)(Unaudited) Three Three Months Ended Months % Change December 31, 2020 Ended % Constant December 31, 2019

GAAP Adjustments^ Non-GAAP GAAP Currencies^ 1 Change^2 3

Revenues United $ 83,201 $ - $ 83,201 $ 88,329 (5.8 %) (5.8 %) States Europe 18,383 (955 ) 17,428 19,889 (7.6 %) (12.4 %)

Japan 3,624 (145 ) 3,479 3,671 (1.3 %) (5.2 %)

Total $ 105,208 $ (1,100 ) $ 104,108 $ 111,889 (6.0 %) (7.0 %) Revenue Year Year Ended Ended % % Change December 31, 2020 December Constant 31, 2019 Adjustments^ Change^2 Currencies^ GAAP 1 Non-GAAP GAAP 3

Revenues United $ 345,708 $ - $ 345,708 $ 360,205 (4.0 %) (4.0 %) States Europe 74,796 (718 ) 74,078 82,805 (9.7 %) (10.5 %)

Japan 13,891 (298 ) 13,593 15,718 (11.6 %) (13.5 %)

Total $ 434,395 $ (1,016 ) $ 433,379 $ 458,728 (5.3 %) (5.5 %) Revenue ^1 Revenue growth for the three-month and year-ended periods ended December 31,2020 has been recalculated using 2019 foreign currency exchange rates in effectduring comparable periods to provide information useful in evaluating theunderlying business trends excluding the impact of changes in foreign currencyexchange rates.^2 This column presents the percentage change from GAAP revenue growth for thethree-month and year-ended periods ended December 31, 2019 to GAAP revenuegrowth for the three-month and year-ended periods ended December 31, 2020.^3 This column presents the percentage change from GAAP revenue for thethree-month and year-ended periods ended December 31, 2019 to non-GAAP revenuefor the three-month and year-ended periods ended December 31, 2020 (asrecalculated using the foreign currency exchange rates in effect during thethree-month and year-ended periods ended December 31, 2019) in order to providea constant currency comparison. Proto Labs, Inc.Product Developer Information(Unaudited)Three Months Ended

Year Ended

December 31,

December 31,

2020

2019

2020

2019

Unique product developers and engineers served18,157

20,595

40,267

47,774

View source version on businesswire.com: https://www.businesswire.com/news/home/20210212005075/en/

CONTACT: Investor Relations Contact Protolabs Dan Schumacher, 763-479-7240 Director of Investor Relations daniel.schumacher@protolabs.com

CONTACT: Media Contact Protolabs Will Martin, 763-479-7719 Sr. Marketing Communications Manager will.martin@protolabs.com