Business Wire | Oct 28, 2021 06:00AM EDT

Protolabs Reports Financial Results for the Third Quarter of 2021

Oct. 28, 2021

MAPLE PLAIN, Minn.--(BUSINESS WIRE)--Oct. 28, 2021--Proto Labs, Inc. (NYSE: PRLB), the world's leading provider of digital manufacturing services, today announced financial results for the third quarter ended September 30, 2021.

Third Quarter 2021 Highlights include:

* Revenue for the third quarter of 2021 was $125.3 million, representing a 16.6 percent increase compared to revenue of $107.5 million in the third quarter of 2020. * Hubs generated $8.8 million of revenue in the third quarter. * Net income for the third quarter of 2021 was $4.8 million, or $0.17 per diluted share. * Non-GAAP net income was $9.7 million, or $0.35 per diluted share. See "Non-GAAP Financial Measures" below.

"We achieved record revenue in the third quarter amidst a difficult backdrop of global supply chain issues and labor and materials constraints. During the quarter, we also received external recognition of our best-in-class digital manufacturing capabilities as the World Economic Forum announced our induction into their Global Lighthouse Network, recognizing our industry leading efforts to implement Fourth Industrial Revolution technologies," noted Rob Bodor, President and Chief Executive Officer. "We continue to focus on the long-term market opportunities and invest in the business to serve the evolving needs of our customers."

Additional Third Quarter 2021 Highlights include:

* Protolabs served 23,457 unique product developers during the quarter, representing a 24.8 percent increase over the third quarter of 2020. * Gross margin in the third quarter of 2021 was 44.1 percent of revenue; Non-GAAP gross margin was 44.9 percent of revenue. See "Non-GAAP Financial Measures" below. * EBITDA margin was 13.7 percent of revenue in the third quarter of 2021; adjusted EBITDA margin was 17.1 percent of revenue in the third quarter of 2021. See "Non-GAAP Financial Measures" below. * Cash and investments balance was $83.9 million as of September 30, 2021.

"Our earnings in the third quarter were impacted by post pandemic-related cost inflation, as well as continued investments in our systems and product offering in order to maintain our position as the largest and fastest provider of digital manufacturing services," added John Way, Chief Financial Officer. "We have a very strong balance sheet with $84 million in cash and investments and no debt, allowing us to continue to invest in future growth and return capital to our shareholders."

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 third quarter 2021 financial results and fourth quarter 2021 outlook today, October 28, 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/kff4bprd. 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 provider of digital manufacturing services. The e-commerce-based company offers injection molding, CNC machining, 3D printing, and sheet metal fabrication to product developers, engineers, and supply chain teams across the globe. Protolabs serves customers using in-house production capabilities that bring unprecedented speed in tandem with Hubs, a Protolabs Company, which serves customers through its network of premium manufacturing partners. Together, they help companies bring new ideas to market with the fastest and most comprehensive digital manufacturing service in the world. 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) September 30, December 31, 2021 2020

(Unaudited) Assets Current assets Cash and cash equivalents $ 47,802 $ 127,603

Short-term marketable securities 16,542 34,088

Accounts receivable, net 85,629 57,877

Inventory 9,813 10,862

Income taxes receivable 1,766 540

Prepaid expenses and other current assets 10,571 11,032

Total current assets 172,123 242,002

Property and equipment, net 283,019 282,666

Goodwill 404,240 128,752

Other intangible assets, net 39,816 14,350

Long-term marketable securities 19,557 59,357

Operating lease assets 5,197 9,855

Finance lease assets 2,022 2,396

Other long-term assets 4,337 4,826

Total assets $ 930,311 $ 744,204

Liabilities and shareholders' equity Current liabilities Accounts payable $ 22,735 $ 18,248

Accrued compensation 15,269 11,989

Accrued liabilities and other 12,636 16,193

Current contingent consideration 2,506 -

Current operating lease liabilities 2,362 3,272

Current finance lease liabilities 555 552

Total current liabilities 56,063 50,254

Long-term contingent consideration 2,294 -

Long-term operating lease liabilities 2,792 7,586

Long-term finance lease liabilities 1,498 1,919

Long-term deferred tax liabilities 36,331 33,854

Other long-term liabilities 6,712 6,235

Shareholders' equity 824,621 644,356

Total liabilities and shareholders' equity $ 930,311 $ 744,204

Proto Labs, Inc.

Condensed Consolidated Statements of Operations(In thousands, except share and per share amounts)(Unaudited)Three Months EndedNine Months EndedSeptember 30,September 30,2021

2020

2021

2020

RevenueInjection Molding$

57,685

$

53,257

$

172,212

$

165,927

CNC Machining43,658

33,115

121,953

99,760

3D Printing18,589

16,294

53,994

46,478

Sheet Metal4,854

3,988

14,790

14,306

Other556

850

1,567

2,716

Total revenue125,342

107,504

364,516

329,187

Cost of revenue70,018

52,861

197,237

163,988

Gross profit55,324

54,643

167,279

165,199

Operating expensesMarketing and sales21,422

16,705

61,946

51,821

Research and development10,614

7,915

33,855

25,550

General and administrative16,361

12,354

44,186

38,983

Total operating expenses48,397

36,974

139,987

116,354

Income from operations6,927

17,669

27,292

48,845

Other income (expense), net136

728

(40)

2,549

Income before income taxes7,063

18,397

27,252

51,394

Provision for income taxes2,228

3,700

5,790

10,106

Net income$

4,835

$

14,697

$

21,462

$

41,288

Net income per share:Basic$

0.17

$

0.55

$

0.78

$

1.54

Diluted$

0.17

$

0.55

$

0.77

$

1.54

Shares used to compute net income per share:Basic27,713,229

26,736,709

27,638,611

26,724,715

Diluted27,730,105

26,886,433

27,707,784

26,861,647

Proto Labs, Inc.

Condensed Consolidated Statements of Operations(In thousands, except share and per share amounts)(Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020

Revenue Injection Molding $ 57,685 $ 53,257 $ 172,212 $ 165,927

CNC Machining 43,658 33,115 121,953 99,760

3D Printing 18,589 16,294 53,994 46,478

Sheet Metal 4,854 3,988 14,790 14,306

Other 556 850 1,567 2,716

Total revenue 125,342 107,504 364,516 329,187

Cost of revenue 70,018 52,861 197,237 163,988

Gross profit 55,324 54,643 167,279 165,199

Operating expenses Marketing and 21,422 16,705 61,946 51,821 sales Research and 10,614 7,915 33,855 25,550 development General and 16,361 12,354 44,186 38,983 administrative Total operating 48,397 36,974 139,987 116,354 expenses Income from 6,927 17,669 27,292 48,845 operations Other income 136 728 (40) 2,549 (expense), net Income before 7,063 18,397 27,252 51,394 income taxes Provision for 2,228 3,700 5,790 10,106 income taxes Net income $ 4,835 $ 14,697 $ 21,462 $ 41,288

Net income per share: Basic $ 0.17 $ 0.55 $ 0.78 $ 1.54

Diluted $ 0.17 $ 0.55 $ 0.77 $ 1.54

Shares used to compute net income per share: Basic 27,713,229 26,736,709 27,638,611 26,724,715

Diluted 27,730,105 26,886,433 27,707,784 26,861,647

Proto Labs, Inc.Condensed Consolidated Statements of Cash Flows(In thousands)(Unaudited)Nine Months EndedSeptember 30,2021

2020

Operating activitiesNet income$

21,462

$

41,288

Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization30,231

23,891

Stock-based compensation expense15,539

10,617

Deferred taxes(139)

6,578

Amortization of marketable securities374

202

Realized gain on available-for-sale securities(72)

-

Changes in fair value of contingent consideration(8,513)

-

Other140

(865)

Changes in operating assets and liabilities(26,797)

664

Net cash provided by operating activities32,225

82,375

Investing activitiesPurchases of property, equipment and other capital assets(27,956)

(40,489)

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

-

Purchases of other assets and investments-

(3,000)

Purchases of marketable securities(15,159)

(90,596)

Proceeds from sales of marketable securities57,089

-

Proceeds from maturities of marketable securities15,114

56,428

Net cash used in investing activities(98,325)

(77,657)

Financing activitiesProceeds from exercises of stock options and other3,838

5,674

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

(3,367)

Repurchases of common stock(13,036)

(14,686)

Principal repayments of finance lease obligations(413)

-

Net cash used in financing activities(13,820)

(12,379)

Effect of exchange rate changes on cash and cash equivalents119

690

Net decrease in cash and cash equivalents(79,801)

(6,971)

Cash and cash equivalents, beginning of period127,603

125,225

Cash and cash equivalents, end of period$

47,802

$

118,254

Proto Labs, Inc.Condensed Consolidated Statements of Cash Flows(In thousands)(Unaudited) Nine Months Ended September 30, 2021 2020

Operating activities Net income $ 21,462 $ 41,288

Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 30,231 23,891

Stock-based compensation 15,539 10,617 expense Deferred taxes (139) 6,578

Amortization of marketable 374 202 securities Realized gain on (72) - available-for-sale securities Changes in fair value of (8,513) - contingent consideration Other 140 (865)

Changes in operating assets (26,797) 664 and liabilities Net cash provided by operating activities 32,225 82,375

Investing activities Purchases of property, equipment and other (27,956) (40,489) capital assets Cash used for acquisitions, net of cash (127,413) - acquired Purchases of other assets and investments - (3,000)

Purchases of marketable securities (15,159) (90,596)

Proceeds from sales of marketable securities 57,089 -

Proceeds from maturities of marketable 15,114 56,428 securities Net cash used in investing activities (98,325) (77,657)

Financing activities Proceeds from exercises of stock options and 3,838 5,674 other Purchases of shares withheld for tax (4,209) (3,367) obligations Repurchases of common stock (13,036) (14,686)

Principal repayments of finance lease (413) - obligations Net cash used in financing activities (13,820) (12,379)

Effect of exchange rate changes on cash and cash 119 690 equivalents Net decrease in cash and cash equivalents (79,801) (6,971)

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

Cash and cash equivalents, end of period $ 47,802 $ 118,254

Proto Labs, Inc.Reconciliation of GAAP to Non-GAAP Net Income per Share(In thousands, except share and per share amounts)(Unaudited)Three Months EndedNine Months EndedSeptember 30,September 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$

4,835

$

14,697

$

21,462

$

41,288

Add back:Stock-based compensation expense4,978

3,945

15,539

10,617

Amortization expense1,568

754

4,601

2,262

Unrealized (gain) loss on foreign currency121

(84)

341

(1,020)

Transaction costs 1(730)

-

(5,870)

-

Total adjustments 25,937

4,615

14,611

11,859

Income tax benefits on adjustments 3(1,063)

(1,368)

(4,639)

(3,030)

Non-GAAP net income$

9,709

$

17,944

$

31,434

$

50,117

Non-GAAP net income per share:Basic$

0.35

$

0.67

$

1.14

$

1.88

Diluted$

0.35

$

0.67

$

1.13

$

1.87

Shares used to compute non-GAAP net income per share:Basic27,713,229

26,736,709

27,638,611

26,724,715

Diluted27,730,105

26,886,433

27,707,784

26,861,647

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 EndedNine Months EndedSeptember 30,September 30,2021

2020

2021

2020

Cost of revenue$

986

$

989

$

2,974

$

2,788

Marketing and sales1,059

865

2,841

2,233

Research and development776

638

2,144

1,766

General and administrative2,995

2,207

6,311

6,092

Total operating expenses4,830

3,710

11,296

10,091

Other (income) loss, net121

(84)

341

(1,020)

Total adjustments$

5,937

$

4,615

$

14,611

$

11,859

3 For the three and nine-month periods ended September 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 Nine Months Ended September 30, September 30, 2021 2020 2021 2020

Non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and transaction costs GAAP net income $ 4,835 $ 14,697 $ 21,462 $ 41,288

Add back: Stock-based 4,978 3,945 15,539 10,617 compensation expense Amortization expense 1,568 754 4,601 2,262

Unrealized (gain) 121 (84) 341 (1,020) loss on foreign currency Transaction costs ^1 (730) - (5,870) -

Total adjustments ^2 5,937 4,615 14,611 11,859

Income tax benefits (1,063) (1,368) (4,639) (3,030) on adjustments ^3 Non-GAAP net income $ 9,709 $ 17,944 $ 31,434 $ 50,117

Non-GAAP net income per share: Basic $ 0.35 $ 0.67 $ 1.14 $ 1.88

Diluted $ 0.35 $ 0.67 $ 1.13 $ 1.87

Shares used to compute non-GAAP net income per share: Basic 27,713,229 26,736,709 27,638,611 26,724,715

Diluted 27,730,105 26,886,433 27,707,784 26,861,647

^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 Nine Months Ended September 30, September 30, 2021 2020 2021 2020

Cost of revenue $ 986 $ 989 $ 2,974 $ 2,788

Marketing and sales 1,059 865 2,841 2,233

Research and 776 638 2,144 1,766 development General and 2,995 2,207 6,311 6,092 administrative Total operating 4,830 3,710 11,296 10,091 expenses Other (income) loss, 121 (84) 341 (1,020) net Total adjustments $ 5,937 $ 4,615 $ 14,611 $ 11,859

^3 For the three and nine-month periods ended September 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 Operating Margin(In thousands)(Unaudited)Three Months EndedNine Months EndedSeptember 30,September 30,2021

2020

2021

2020

Revenue$

125,342

$

107,504

$

364,516

$

329,187

Income from operations6,927

17,669

27,292

48,845

GAAP operating margin5.5%

16.4%

7.5%

14.8%

Add back:Stock-based compensation expense4,978

3,945

15,539

10,617

Amortization expense1,568

754

4,601

2,262

Transaction costs 1(730)

-

(5,870)

-

Total adjustments5,816

4,699

14,270

12,879

Non-GAAP income from operations$

12,743

$

22,368

$

41,562

$

61,724

Non-GAAP operating margin10.2%

20.8%

11.4%

18.8%

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 Nine Months Ended September 30, September 30, 2021 2020 2021 2020

Revenue $ 125,342 $ 107,504 $ 364,516 $ 329,187

Income from 6,927 17,669 27,292 48,845 operations GAAP 5.5% 16.4% 7.5% 14.8% operating margin Add back: Stock-based 4,978 3,945 15,539 10,617 compensation expense Amortization 1,568 754 4,601 2,262 expense Transaction (730) - (5,870) - costs^ 1 Total 5,816 4,699 14,270 12,879 adjustments Non-GAAP $ 12,743 $ 22,368 $ 41,562 $ 61,724 income from operations Non-GAAP 10.2% 20.8% 11.4% 18.8% operating margin ^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 EndedNine Months EndedSeptember 30,September 30,2021

2020

2021

2020

GAAP net income$

4,835

$

14,697

$

21,462

$

41,288

Amortization expense1,568

754

4,601

2,262

Depreciation expense8,536

7,282

25,630

21,629

Interest income, net(55)

(255)

(207)

(1,183)

Tax expense2,228

3,700

5,790

10,106

EBITDA17,112

26,178

57,276

74,102

Add back:Stock-based compensation expense4,978

3,945

15,539

10,617

Unrealized (gain) loss on foreign currency121

(84)

341

(1,020)

Transaction costs 1(730)

-

(5,870)

-

Total adjustments4,369

3,861

10,010

9,597

Adjusted EBITDA$

21,481

$

30,039

$

67,286

$

83,699

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 Nine Months Ended September 30, September 30, 2021 2020 2021 2020

GAAP net income $ 4,835 $ 14,697 $ 21,462 $ 41,288

Amortization expense 1,568 754 4,601 2,262

Depreciation expense 8,536 7,282 25,630 21,629

Interest income, net (55) (255) (207) (1,183)

Tax expense 2,228 3,700 5,790 10,106

EBITDA 17,112 26,178 57,276 74,102

Add back: Stock-based compensation expense 4,978 3,945 15,539 10,617

Unrealized (gain) loss on foreign 121 (84) 341 (1,020) currency Transaction costs^ 1 (730) - (5,870) -

Total adjustments 4,369 3,861 10,010 9,597

Adjusted EBITDA $ 21,481 $ 30,039 $ 67,286 $ 83,699

^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.Comparison of GAAP to Non-GAAP Revenue Growth(In thousands)(Unaudited)Three Months EndedSeptember 30, 2021Three Months EndedSeptember 30, 2020%GAAPForeign

Currency1

Hubs

Acquisition2

Non-GAAPGAAPChange3%

Change

Organic4

RevenuesUnited States$

100,127

$

-

$

(4,729)

$

95,398

$

85,608

17.0

%11.4

%Europe22,155

(513)

(4,022)

17,620

18,897

17.2

(6.8)

Japan3,060

114

-

3,174

2,999

2.0

5.8

Total Revenue$

125,342

$

(399)

$

(8,751)

$

116,192

$

107,504

16.6

%8.1

%Nine Months EndedSeptember 30, 2021Nine Months EndedSeptember 30, 2020%GAAPForeign

Currency1

Hubs

Acquisition2

Non-GAAPGAAPChange3%

Change

Organic4

RevenuesUnited States$

286,524

$

-

$

(12,512)

$

274,012

$

262,507

9.1

%4.4

%Europe68,259

(3,986)

(10,942)

53,331

56,413

21.0

(5.5)

Japan9,733

83

-

9,816

10,267

(5.2)

(4.4)

Total Revenue$

364,516

$

(3,903)

$

(23,454)

$

337,159

$

329,187

10.7

%2.4

%1 Revenue for the three and nine-month periods ended September 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 nine-month periods ended September 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 nine-month periods ended September 30, 2020 to GAAP revenue for the three and nine-month periods ended September 30, 2021.4 This column presents the percentage change from GAAP revenue for the three and nine-month periods ended September 30, 2020 to non-GAAP revenue for the three and nine-month periods ended September 30, 2021 (as recalculated using the foreign currency exchange rates in effect during the three- and nine-month periods ended September 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 September 30, 2021 Ended % September 30, 2020 % Foreign Hubs Change^ Change GAAP Currency^ Acquisition^ Non-GAAP GAAP 3 1 2 Organic^ 4

Revenues United $ 100,127 $ - $ (4,729) $ 95,398 $ 85,608 17.0 % 11.4 % States Europe 22,155 (513) (4,022) 17,620 18,897 17.2 (6.8)

Japan 3,060 114 - 3,174 2,999 2.0 5.8

Total $ 125,342 $ (399) $ (8,751) $ 116,192 $ 107,504 16.6 % 8.1 % Revenue Nine Nine Months Ended Months September 30, 2021 Ended % September 30, 2020 % Foreign Hubs Change^ Change GAAP Currency^ Acquisition^ Non-GAAP GAAP 3 1 2 Organic^ 4

Revenues United $ 286,524 $ - $ (12,512) $ 274,012 $ 262,507 9.1 % 4.4 % States Europe 68,259 (3,986) (10,942) 53,331 56,413 21.0 (5.5)

Japan 9,733 83 - 9,816 10,267 (5.2) (4.4)

Total $ 364,516 $ (3,903) $ (23,454) $ 337,159 $ 329,187 10.7 % 2.4 % Revenue ^1 Revenue for the three and nine-month periods ended September 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 nine-month periods ended September 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 nine-month periods ended September 30, 2020 to GAAP revenue for the three and nine-month periods ended September 30, 2021. 4 This column presents the percentage change from GAAP revenue for the three and nine-month periods ended September 30, 2020 to non-GAAP revenue for the three and nine-month periods ended September 30, 2021 (as recalculated using the foreign currency exchange rates in effect during the three- and nine-month periods ended September 30, 2020, excluding the impact of Hubs, Inc. acquisition) in order to provide a constant-currency comparison.Proto Labs, Inc.Product Developer Information(Unaudited)Three Months EndedNine Months EndedSeptember 30,September 30,2021

2020

2021

2020

Unique product developers and engineers served23,457

18,796

49,300

37,504

View source version on businesswire.com: https://www.businesswire.com/news/home/20211028005220/en/

CONTACT: Investor Relations Contact Protolabs Dan Schumacher, 763-479-7240 Vice President of Investor Relations and FP&A daniel.schumacher@protolabs.com

CONTACT: Media Contact Protolabs Brent Renneke, 763-479-7704 PR & Media Strategist brent.renneke@protolabs.com