Business Wire | Jul 29, 2021 06:00AM EDT

Protolabs Reports Financial Results for the Second Quarter of 2021

Jul. 29, 2021

MAPLE PLAIN, Minn.--(BUSINESS WIRE)--Jul. 29, 2021--Proto Labs, Inc. (NYSE: PRLB), the world's largest ecommerce manufacturer and supplier of on-demand prototype and production parts, today announced financial results for the second quarter ended June 30, 2021.

Second Quarter 2021 Highlights include:

* Revenue for the second quarter of 2021 was $123.0 million, representing a 15.5 percent increase compared to revenue of $106.6 million in the second quarter of 2020. * Hubs generated $8.9 million of revenue in the second quarter, representing growth of 45.6 percent over the second quarter of 2020. * Net income for the second quarter of 2021 was $12.9 million, or $0.47 per diluted share. * Non-GAAP net income was $10.7 million, or $0.39 per diluted share. See "Non-GAAP Financial Measures" below.

"During the second quarter of 2021, we experienced strong demand, and delivered record revenues despite the challenges of labor availability in the US. We are emerging from the pandemic stronger than ever in the custom parts space," said Rob Bodor, President and Chief Executive Officer. "I want to thank the employees of Protolabs for all that they did in the quarter, and we are confident that the best is yet to come."

Additional Second Quarter 2021 Highlights include:

* Protolabs served 23,253 unique product developers during the quarter, representing a 36.5 percent increase over the second quarter of 2020. * Gross margin in the second quarter of 2021 was 46.0 percent of revenue; Non-GAAP gross margin was 46.8 percent of revenue. See "Non-GAAP Financial Measures" below. * EBITDA margin was 21.3 percent of revenue in the second quarter of 2021; adjusted EBITDA margin was 18.8 percent of revenue in the second quarter of 2021. See "Non-GAAP Financial Measures" below. * Cash and investments balance was $89.0 million as of June 30, 2021.

"The environment is ripe for growth and our digital manufacturing model is leading the way," added John Way, Chief Financial Officer. "Our profitable business model drives a healthy balance sheet with $89 million in cash and investments and no debt, giving us the flexibility to continue to invest in future growth and lead the digital custom parts space."

Non-GAAP Financial Measures

The company has included non-GAAP revenue growth that excludes the impact of changes in foreign currency exchange rates and revenue earned from our acquisition of Hubs (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 second quarter 2021 financial results and third quarter 2021 outlook today, July 29, 2021 at 8:30 a.m. EDT. 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. EDT start time. No participant code is required. A simultaneous webcast of the call and accompanying presentation will be available via the investor relations section of the Protolabs website and the following link: https://edge.media-server.com/mmc/p/4ugs54z8. 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 digital manufacturing source for rapid prototyping and on-demand production. 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) June 30, December 31,

2021 2020

(Unaudited)

AssetsCurrent assetsCash and cash equivalents $ 41,909 $ 127,603

Short-term marketable securities 18,341 34,088

Accounts receivable, net 83,470 57,877

Inventory 9,111 10,862

Income taxes receivable 4,575 540

Prepaid expenses and other current assets 10,107 11,032

Total current assets 167,513 242,002

Property and equipment, net 288,495 282,666

Goodwill 407,191 128,752

Other intangible assets, net 41,674 14,350

Long-term marketable securities 28,700 59,357

Operating lease assets 8,801 9,855

Finance lease assets 2,147 2,396

Other long-term assets 4,769 4,826

Total assets $ 949,290 $ 744,204

Liabilities and shareholders' equityCurrent liabilitiesAccounts payable $ 26,038 $ 18,248

Accrued compensation 14,930 11,989

Accrued liabilities and other 15,072 16,193

Current contingent consideration 2,936 -

Current operating lease liabilities 2,847 3,272

Current finance lease liabilities 554 552

Income taxes payable 40 -

Total current liabilities 62,417 50,254

Long-term contingent consideration 2,693 -

Long-term operating lease liabilities 7,097 7,586

Long-term finance lease liabilities 1,639 1,919

Long-term deferred tax liabilities 36,898 33,854

Other long-term liabilities 6,569 6,235

Shareholders' equity 831,977 644,356

Total liabilities and shareholders' equity $ 949,290 $ 744,204

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

Six Months Ended

June 30,

June 30,

2021

2020

2021

2020

RevenueInjection Molding$

58,168

$

57,894

$

114,527

$

112,670

CNC Machining41,592

28,760

78,295

66,645

3D Printing18,170

14,236

35,405

30,184

Sheet Metal4,717

4,669

9,936

10,318

Other401

1,016

1,011

1,866

Total revenue123,048

106,575

239,174

221,683

Cost of revenue66,423

54,119

127,219

111,127

Gross profit56,625

52,456

111,955

110,556

Operating expensesMarketing and sales21,044

16,936

40,524

35,116

Research and development11,060

8,648

23,241

17,635

General and administrative8,417

12,521

27,825

26,629

Total operating expenses40,521

38,105

91,590

79,380

Income from operations16,104

14,351

20,365

31,176

Other income (loss), net137

767

(176

)

1,821

Income before income taxes16,241

15,118

20,189

32,997

Provision for income taxes3,326

2,511

3,562

6,406

Net income$

12,915

$

12,607

$

16,627

$

26,591

Net income per share:Basic$

0.47

$

0.47

$

0.60

$

1.00

Diluted$

0.47

$

0.47

$

0.60

$

0.99

Shares used to compute net income per share:Basic27,735,732

26,660,498

27,600,684

26,718,652

Diluted27,744,870

26,760,866

27,741,464

26,837,938

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

June 30, June 30,

2021 2020 2021 2020

RevenueInjection Molding $ 58,168 $ 57,894 $ 114,527 $ 112,670

CNC Machining 41,592 28,760 78,295 66,645

3D Printing 18,170 14,236 35,405 30,184

Sheet Metal 4,717 4,669 9,936 10,318

Other 401 1,016 1,011 1,866

Total revenue 123,048 106,575 239,174 221,683

Cost of revenue 66,423 54,119 127,219 111,127

Gross profit 56,625 52,456 111,955 110,556

Operating expensesMarketing and sales 21,044 16,936 40,524 35,116

Research and 11,060 8,648 23,241 17,635developmentGeneral and 8,417 12,521 27,825 26,629administrativeTotal operating 40,521 38,105 91,590 79,380expensesIncome from operations 16,104 14,351 20,365 31,176

Other income (loss), 137 767 (176 ) 1,821netIncome before income 16,241 15,118 20,189 32,997taxesProvision for income 3,326 2,511 3,562 6,406taxesNet income $ 12,915 $ 12,607 $ 16,627 $ 26,591

Net income per share:Basic $ 0.47 $ 0.47 $ 0.60 $ 1.00

Diluted $ 0.47 $ 0.47 $ 0.60 $ 0.99

Shares used to computenet income per share:Basic 27,735,732 26,660,498 27,600,684 26,718,652

Diluted 27,744,870 26,760,866 27,741,464 26,837,938

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

June 30,

2021

2020

Operating activitiesNet income$

16,627

$

26,591

Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization20,127

15,855

Stock-based compensation expense10,561

6,672

Deferred taxes419

5,651

Amortization of marketable securities261

129

Realized gain on available-for-sale securities(117

)

-

Other125

(854

)

Changes in operating assets and liabilities(19,511

)

(627

)

Changes in fair value of contingent consideration(7,763

)

-

Net cash provided by operating activities20,729

53,417

Investing activitiesPurchases of property, equipment and other capital assets(23,929

)

(33,305

)

Cash used for acquisitions, net of cash acquired(127,413

)

-

Purchases of other assets and investments-

(3,000

)

Purchases of marketable securities(15,159

)

(57,212

)

Proceeds from sales of marketable securities47,694

-

Proceeds from maturities of marketable securities13,725

28,225

Net cash used in investing activities(105,082

)

(65,292

)

Financing activitiesProceeds from exercises of stock options and other3,838

2,855

Purchases of shares withheld for tax obligations(4,209

)

(3,367

)

Repurchases of common stock(1,210

)

(14,686

)

Principal repayments of finance lease obligations(275

)

-

Net cash used in financing activities(1,856

)

(15,198

)

Effect of exchange rate changes on cash and cash equivalents515

(149

)

Net decrease in cash and cash equivalents(85,694

)

(27,222

)

Cash and cash equivalents, beginning of period127,603

125,225

Cash and cash equivalents, end of period$

41,909

$

98,003

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

June 30,

2021 2020

Operating activitiesNet income $ 16,627 $ 26,591

Adjustments to reconcile net income to net cashprovided by operating activities:Depreciation and amortization 20,127 15,855

Stock-based compensation expense 10,561 6,672

Deferred taxes 419 5,651

Amortization of marketable securities 261 129

Realized gain on available-for-sale securities (117 ) -

Other 125 (854 )

Changes in operating assets and liabilities (19,511 ) (627 )

Changes in fair value of contingent consideration (7,763 ) -

Net cash provided by operating activities 20,729 53,417

Investing activitiesPurchases of property, equipment and other capital (23,929 ) (33,305 )assetsCash used for acquisitions, net of cash acquired (127,413 ) -

Purchases of other assets and investments - (3,000 )

Purchases of marketable securities (15,159 ) (57,212 )

Proceeds from sales of marketable securities 47,694 -

Proceeds from maturities of marketable securities 13,725 28,225

Net cash used in investing activities (105,082 ) (65,292 )

Financing activitiesProceeds from exercises of stock options and other 3,838 2,855

Purchases of shares withheld for tax obligations (4,209 ) (3,367 )

Repurchases of common stock (1,210 ) (14,686 )

Principal repayments of finance lease obligations (275 ) -

Net cash used in financing activities (1,856 ) (15,198 )

Effect of exchange rate changes on cash and cash 515 (149 )equivalentsNet decrease in cash and cash equivalents (85,694 ) (27,222 )

Cash and cash equivalents, beginning of period 127,603 125,225

Cash and cash equivalents, end of period $ 41,909 $ 98,003

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

Six Months Ended

June 30,

June 30,

2021

2020

2021

2020

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

12,915

$

12,607

$

16,627

$

26,591

Add back:Stock-based compensation expense4,941

3,639

10,561

6,672

Amortization expense1,490

754

3,033

1,508

Unrealized (gain) loss on foreign currency(402

)

(139

)

220

(936

)

Transaction costs 1(7,655

)

-

(5,140

)

-

Total adjustments 2(1,626

)

4,254

8,674

7,244

Income tax benefits on adjustments 3(575

)

(987

)

(3,576

)

(1,662

)

Non-GAAP net income$

10,714

$

15,874

$

21,725

$

32,173

Non-GAAP net income per share:Basic$

0.39

$

0.60

$

0.79

$

1.20

Diluted$

0.39

$

0.59

$

0.78

$

1.20

Shares used to compute non-GAAP net income per share:Basic27,735,732

26,660,498

27,600,684

26,718,652

Diluted27,744,870

26,760,866

27,741,464

26,837,938

1 Transaction costs include direct costs incurred in our acquisition of Hubs, Inc. and the impact of changes in the fair value of acquisition-related contingent consideration obligations.2 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

Six Months Ended

June 30,

June 30,

2021

2020

2021

2020

Cost of revenue$

1,011

$

936

$

1,988

$

1,799

Marketing and sales929

750

1,782

1,368

Research and development744

607

1,368

1,128

General and administrative(3,908

)

2,100

3,316

3,885

Total operating expenses(2,235

)

3,457

6,466

6,381

Other (income) loss, net(402

)

(139

)

220

(936

)

Total adjustments$

(1,626

)

$

4,254

$

8,674

$

7,244

3 For the three and six-month periods ended June 30, 2021 and 2020, 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 Six Months Ended

June 30, June 30,

2021 2020 2021 2020

Non-GAAP netincome,adjusted forstock-basedcompensationexpense,amortizationexpense,unrealized(gain) loss onforeigncurrency andtransactioncostsGAAP net income $ 12,915 $ 12,607 $ 16,627 $ 26,591

Add back:Stock-based 4,941 3,639 10,561 6,672 compensationexpenseAmortization 1,490 754 3,033 1,508 expenseUnrealized(gain) loss on (402 ) (139 ) 220 (936 )foreigncurrencyTransaction (7,655 ) - (5,140 ) - costs ^1Total (1,626 ) 4,254 8,674 7,244 adjustments ^2Income tax (575 ) (987 ) (3,576 ) (1,662 )benefits onadjustments ^3Non-GAAP net $ 10,714 $ 15,874 $ 21,725 $ 32,173 income Non-GAAP netincome pershare:Basic $ 0.39 $ 0.60 $ 0.79 $ 1.20

Diluted $ 0.39 $ 0.59 $ 0.78 $ 1.20

Shares used tocomputenon-GAAP netincome pershare:Basic 27,735,732 26,660,498 27,600,684 26,718,652

Diluted 27,744,870 26,760,866 27,741,464 26,837,938

^1 Transaction costs include direct costs incurred in our acquisition of Hubs,Inc. and the impact of changes in the fair value of acquisition-relatedcontingent consideration obligations.^2 Stock-based compensation expense, amortization expense, unrealized (gain)loss on foreign currency and transaction costs were included in the followingGAAP consolidated statement of operations categories: Three Months Ended Six Months Ended

June 30, June 30,

2021 2020 2021 2020

Cost of revenue $ 1,011 $ 936 $ 1,988 $ 1,799

Marketing and 929 750 1,782 1,368 salesResearch and 744 607 1,368 1,128 developmentGeneral and (3,908 ) 2,100 3,316 3,885 administrativeTotal operating (2,235 ) 3,457 6,466 6,381 expenses Other (income) (402 ) (139 ) 220 (936 )loss, netTotal $ (1,626 ) $ 4,254 $ 8,674 $ 7,244 adjustments ^3 For the three and six-month periods ended June 30, 2021 and 2020, income taxeffects were calculated using the effective tax rate for the relevantjurisdictions. Our non-GAAP tax rates differ from our GAAP tax rates dueprimarily to the mix of activity incurred in domestic and foreign taxjurisdictions and removing effective tax rate benefits from stock-basedcompensation activity in the quarter. Proto Labs, Inc.Reconciliation of GAAP to Non-GAAP Operating Margin(In thousands)(Unaudited)Three Months Ended

Six Months Ended

June 30,

June 30,

2021

2020

2021

2020

Revenue$

123,048

$

106,575

$

239,174

$

221,683

Income from operations16,104

14,351

20,365

31,176

GAAP operating margin13.1

%

13.5

%

8.5

%

14.1

%

Add back:Stock-based compensation expense4,941

3,639

10,561

6,672

Amortization expense1,490

754

3,033

1,508

Transaction costs 1(7,655

)

-

(5,140

)

-

Total adjustments(1,224

)

4,393

8,454

8,180

Non-GAAP income from operations$

14,880

$

18,744

$

28,819

$

39,356

Non-GAAP operating margin12.1

%

17.6

%

12.0

%

17.8

%

1 Transaction costs include direct costs incurred in our acquisition of Hubs, Inc. and the impact of changes in the fair value of acquisition-related contingent consideration obligations.

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

June 30, June 30,

2021 2020 2021 2020

Revenue $ 123,048 $ 106,575 $ 239,174 $ 221,683

Income from operations 16,104 14,351 20,365 31,176

GAAP operating margin 13.1 % 13.5 % 8.5 % 14.1 %

Add back:Stock-based compensation 4,941 3,639 10,561 6,672 expenseAmortization expense 1,490 754 3,033 1,508

Transaction costs^ 1 (7,655 ) - (5,140 ) -

Total adjustments (1,224 ) 4,393 8,454 8,180

Non-GAAP income from $ 14,880 $ 18,744 $ 28,819 $ 39,356 operationsNon-GAAP operating margin 12.1 % 17.6 % 12.0 % 17.8 %

^1 Transaction costs include direct costs incurred in our acquisition of Hubs,Inc. and the impact of changes in the fair value of acquisition-relatedcontingent consideration obligations.

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

Six Months Ended

June 30,

June 30,

2021

2020

2021

2020

GAAP net income$

12,915

$

12,607

$

16,627

$

26,591

Amortization expense1,490

754

3,033

1,508

Depreciation expense8,578

7,143

17,094

14,347

Interest income, net(65

)

(368

)

(152

)

(928

)

Tax expense3,326

2,511

3,562

6,406

EBITDA26,244

22,647

40,164

47,924

Add back:Stock-based compensation expense4,941

3,639

10,561

6,672

Unrealized (gain) loss on foreign currency(402

)

(139

)

220

(936

)

Transaction costs 1(7,655

)

-

(5,140

)

-

Total adjustments(3,116

)

3,500

5,641

5,736

Adjusted EBITDA$

23,128

$

26,147

$

45,805

$

53,660

1 Transaction costs include direct costs incurred in our acquisition of Hubs, Inc. and the impact of changes in the fair value of acquisition-related contingent consideration obligations. Proto Labs, Inc.Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA(In thousands)(Unaudited) Three Months Ended Six Months Ended

June 30, June 30,

2021 2020 2021 2020

GAAP net income $ 12,915 $ 12,607 $ 16,627 $ 26,591

Amortization expense 1,490 754 3,033 1,508

Depreciation expense 8,578 7,143 17,094 14,347

Interest income, net (65 ) (368 ) (152 ) (928 )

Tax expense 3,326 2,511 3,562 6,406

EBITDA 26,244 22,647 40,164 47,924

Add back:Stock-based compensation 4,941 3,639 10,561 6,672 expenseUnrealized (gain) loss on (402 ) (139 ) 220 (936 )foreign currencyTransaction costs^ 1 (7,655 ) - (5,140 ) -

Total adjustments (3,116 ) 3,500 5,641 5,736

Adjusted EBITDA $ 23,128 $ 26,147 $ 45,805 $ 53,660

^1 Transaction costs include direct costs incurred in our acquisition of Hubs,Inc. and the impact of changes in the fair value of acquisition-relatedcontingent consideration obligations. Proto Labs, Inc.Comparison of GAAP to Non-GAAP Revenue Growth(In thousands)(Unaudited)Three Months Ended June 30, 2021

Three Months Ended June 30, 2020

%

GAAP

Foreign Currency1

Hubs Acquisition2

Non-GAAP

GAAP

Change3

% Change Organic4

RevenuesUnited States$

95,344

$

-

$

(4,626

)

$

90,718

$

86,823

9.8

%

4.5

%

Europe24,655

(1,913

)

(4,314

)

18,428

16,729

47.4

10.2

Japan3,049

54

-

3,103

3,023

0.9

2.6

Total Revenue$

123,048

$

(1,859

)

$

(8,940

)

$

112,249

$

106,575

15.5

%

5.3

%

Six Months Ended June 30, 2021

Six Months Ended June 30, 2020

%

GAAP

Foreign Currency1

Hubs Acquisition2

Non-GAAP

GAAP

Change3

% Change Organic4

RevenuesUnited States$

186,397

$

-

$

(7,783

)

$

178,614

$

176,899

5.4

%

1.0

%

Europe46,104

(3,473

)

(6,920

)

35,711

37,516

22.9

(4.8

)

Japan6,673

(31

)

-

6,642

7,268

(8.2

)

(8.6

)

Total Revenue$

239,174

$

(3,504

)

$

(14,703

)

$

220,967

$

221,683

7.9

%

(0.3

)%

1 Revenue for the three and six-month periods ended June 30, 2021 has been recalculated using 2020 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 Revenue for the three and six-month periods ended June 30, 2021 has been recalculated to exclude revenue earned from our acquisition of Hubs, Inc. to provide information useful in evaluating the underlying business trends excluding the impact of acquisitions.3 This column presents the percentage change from GAAP revenue for the three and six-month periods ended June 30, 2020 to GAAP revenue for the three and six-month periods ended June 30, 2021.4 This column presents the percentage change from GAAP revenue for the three and six-month periods ended June 30, 2020 to non-GAAP revenue for the three and six-month periods ended June 30, 2021 (as recalculated using the foreign currency exchange rates in effect during the three- and six-month periods ended June 30, 2020, excluding the impact of Hubs, Inc. acquisition) 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 June 30, 2021 Ended % June 30, 2020

Foreign Hubs Change^ % Change GAAP Currency^1 Acquisition^2 Non-GAAP GAAP 3 Organic^ 4

RevenuesUnited $ 95,344 $ - $ (4,626 ) $ 90,718 $ 86,823 9.8 % 4.5 %StatesEurope 24,655 (1,913 ) (4,314 ) 18,428 16,729 47.4 10.2

Japan 3,049 54 - 3,103 3,023 0.9 2.6

Total $ 123,048 $ (1,859 ) $ (8,940 ) $ 112,249 $ 106,575 15.5 % 5.3 %Revenue Six Six Months Ended Months June 30, 2021 Ended % June 30, 2020

Foreign Hubs Change^ % Change GAAP Currency^1 Acquisition^2 Non-GAAP GAAP 3 Organic^ 4

RevenuesUnited $ 186,397 $ - $ (7,783 ) $ 178,614 $ 176,899 5.4 % 1.0 %StatesEurope 46,104 (3,473 ) (6,920 ) 35,711 37,516 22.9 (4.8 )

Japan 6,673 (31 ) - 6,642 7,268 (8.2 ) (8.6 )

Total $ 239,174 $ (3,504 ) $ (14,703 ) $ 220,967 $ 221,683 7.9 % (0.3 )%Revenue ^1 Revenue for the three and six-month periods ended June 30, 2021 has beenrecalculated using 2020 foreign currency exchange rates in effect duringcomparable periods to provide information useful in evaluating the underlyingbusiness trends excluding the impact of changes in foreign currency exchangerates.^2 Revenue for the three and six-month periods ended June 30, 2021 has beenrecalculated to exclude revenue earned from our acquisition of Hubs, Inc. toprovide information useful in evaluating the underlying business trendsexcluding the impact of acquisitions.^3 This column presents the percentage change from GAAP revenue for the threeand six-month periods ended June 30, 2020 to GAAP revenue for the three andsix-month periods ended June 30, 2021.4 This column presents the percentage change from GAAP revenue for the threeand six-month periods ended June 30, 2020 to non-GAAP revenue for the three andsix-month periods ended June 30, 2021 (as recalculated using the foreigncurrency exchange rates in effect during the three- and six-month periods endedJune 30, 2020, excluding the impact of Hubs, Inc. acquisition) in order toprovide a constant-currency comparison.Proto Labs, Inc.Product Developer Information(Unaudited)Three Months Ended

Six Months Ended

June 30,

June 30,

2021

2020

2021

2020

Unique product developers and engineers served23,253

17,037

37,501

29,703

View source version on businesswire.com: https://www.businesswire.com/news/home/20210729005120/en/

CONTACT: Investor Relations Contact Protolabs Dan Schumacher, 763-479-7240 Vice President of Investor Relations daniel.schumacher@protolabs.com Media Contact Protolabs Brent Renneke, 763-479-7704 PR & Media Strategist brent.renneke@protolabs.com