Proto Labs, Inc. Q4 FY2025 earnings call

• Strategic pillars: elevate customer experience (removing friction, improving e-commerce), accelerate innovation (returning to rapid innovation, expanding offerings), expand production (strengthening production capabilities, achieving ISO 13485 certification for medical device production), drive operational efficiency (improving productivity, cost discipline). - 2026 changes: reorganizing technology group, expanding Proto Excellence across the organization, establishing a global capability center in India, resetting Europe operations to reaccelerate growth and improve efficiency.

Fourth quarter revenue was a company record of $136.5 million, up 11% year over year in constant currencies. Full year 2025 revenue was $533.1 million, up 5.7% in constant currencies. CNC machining revenue grew 16.7% in constant currencies in 2025, with US CNC growing 25%. Sheet metal grew 12% in 2025. Injection molding declined 1.9% in 2025. 3D printing declined 4.7% in 2025 but metal 3D printing grew double digits in the US. Factory non-GAAP gross margin was 49% in 2025, up 70 basis points; network non-GAAP gross margin was 31%, down 190 basis points year over year largely due to inefficiencies related to tariffs. Revenue per customer grew 13% in 2025.

Proto Labs expects 2026 GAAP revenue growth of 6 to 8%, with revenue between $130 million and $138 million (midpoint implies 6% growth). Foreign currency is expected to have a $2.1 million favorable impact on revenue compared to 2025. Non-GAAP EPS guidance for Q1 2026 is between $0.36 and $0.44. Non-GAAP add-backs include stock-based compensation, amortization, and transformation/restructuring costs, with a non-GAAP effective tax rate between 24-25%.

Q: Greg Palm asked about Q4 revenue growth, sequential growth, and Q1 midpoint.

A: Dan Schumacher said Q4 had good order volumes driven by key industries, and January started more normalized but order rates improved.

Q: Troy Jensen asked about UDPs and defense supply chains.

A: Suresh Krishna talked about focus on revenue per contact and good exposure to aerospace/defense growth areas.

Q: Brian Drab asked about injection molding growth, advanced CNC capabilities, and India.

A: Suresh Krishna discussed pilot programs in medical device injection molding, advanced CNC performing well, and India center to support global business.

Q: Jim Ricchiuti asked about full year growth targets and investments.

A: Dan Schumacher said it's a year of transformational change, reallocation of resources, and network margin in Q4 was 30.3%.