PRLB

Proto Labs’ second quarter was marked by expanding relationships with large enterprise customers and robust growth in both Injection Molding and CNC Machining services. Management credited the company’s focus on its four strategic pillars—elevating customer experience, reigniting innovation, expanding into production, and operational efficiency—as key contributors to the quarter’s success. CEO Suresh Krishna highlighted that “second quarter revenue per customer grew 17% year-over-year,” reflecting deeper engagement, particularly among customers in aerospace, defense, and telecommunications. This operational momentum helped drive margin expansion and improve leverage on selling, general, and administrative expenses. Is now the time to buy PRLB? Find out in our full research report (it’s free). Revenue: $149.3 million vs analyst estimates of $144.1 million (10.6% year-on-year growth, 3.6% beat) Adjusted EPS: $0.60 vs analyst estimates of $0.54 (11.5% beat) Adjusted EBITDA: $25.12 million vs analyst estimates of $23.53 million (16.8% margin, 6.8% beat) Revenue Guidance for Q3 CY2026 is $149 million at the midpoint, above analyst estimates of $145.7 million Adjusted EPS guidance for Q3 CY2026 is $0.60 at the midpoint, above analyst estimates of $0.52 Operating Margin: 7.6%, up from 3.7% in the same quarter last year Market Capitalization: $2.10 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Greg Palm (Craig-Hallum) asked about the factory versus network revenue split and margin differences. CEO Suresh Krishna explained the company’s goal is to drive growth in both, while CFO Dan Schumacher provided network margin details and noted overall customer choice in fulfillment models. Troy Jensen (Cantor Fitzgerald) inquired about specific AI applications in manufacturing. Krishna described leveraging AI for quoting, design for manufacturability, and matching customer needs, highlighting proprietary manufacturing execution software and connected factory systems. Troy Jensen (Cantor Fitzgerald) also questioned the sustainability of recent SG&A expense levels. Schumacher responded that current expenses are likely to be sustained near-term, as investments are being made in strategic priorities, but efficiency initiatives could moderate these costs over time. Brian Drab (William Blair) pressed for details on inorganic growth plans. Schumacher said potential acquisitions would expand production capabilities and reinforce strategic pillars, focusing on services aligned with existing strengths and industry certifications. James Ricchiuti (Needham & Company) sought color on the strength in core verticals and Europe’s outlook. Krishna and Schumacher cited broad-based growth in aerospace and defense and described Europe as a “transformation story,” with recent go-to-market changes starting to yield results but profitability still a work in progress. In the coming quarters, the StockStory team will closely watch (1) further expansion of enterprise relationships in high-growth sectors like aerospace and robotics, (2) the pace and impact of operational improvements in Europe—including cost optimization and customer experience enhancements, and (3) measurable progress from Proto Labs’ AI-driven manufacturing initiatives. Execution on new leadership hires and potential M&A activity will also be key signposts for continued transformation. Proto Labs currently trades at $87.94, up from $75.14 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members). ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies. Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Friday, July 31, 2026 at 8:30 a.m. ET President and Chief Executive Officer - Suresh Krishna Chief Financial Officer - Dan Schumacher Investor Relations - Ryan Johnsrud Operator: Greetings, and welcome to the Proto Labs Q2 Fiscal Year 2026 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ryan Johnsrud, Investor Relations. Thank you. You may begin. Ryan Johnsrud: Thank you. Good morning, everyone, and welcome to Proto Labs' Second Quarter 2026 Earnings Conference Call. I am joined today by Suresh Krishna, President and Chief Executive Officer; and Dan Schumacher, Chief Financial Officer. This morning, Proto Labs issued a press release announcing its financial results for the second quarter ended June 30, 2026. The release is available on the company's website as well as an accompanying slide presentation. Our discussion today will include statements relating to future performance and expectations that are or may be considered forward-looking statements and subject to many risks and uncertainties that could cause actual results to differ materially from expectations. Please refer to our earnings press release and recent SEC filings, including our annual report on Form 10-K for information on certain risks that could cause actual outcomes to differ materially and adversely from any forward-looking statements made today. The results and guidance we will discuss include non-GAAP financial measures consistent with our past practice. Please refer to our press release and the accompanying slide presentation at the Investor Relations section of our company website for a complete reconciliation of GAAP to non-GAAP results. And now, I will turn the call over to Suresh Krishna. Suresh? Suresh Krishna: Thank you, Ryan. Good morning, everyone, and thank you for joining our earnings call. We delivered another record quarter with record revenue and strong profitability. As we did in the first quarter, we achieved double-digit revenue growth, gross margin expansion and operating cost leverage. Importantly, our results show that our strategy is beginning to translate into broader business momentum with expanding relationships among larger customers, sustained strength in CNC Machining, meaningful acceleration in Injection Molding and early progress from the changes we are making in Europe. Second quarter revenue per customer grew 17% year-over-year, reflecting continued momentum as we deepen engagement with enterprise accounts. More and more customers are innovating at the speed of software and Proto Labs is the perfect partner to help them rapidly iterate and move from design into production. Strong performance across our factory business reinforces our belief that the investments we are making are gaining traction in the areas where we have our strongest long-term competitive advantages. Injection Molding was a standout performer in the second quarter, growing 13% year-over-year, with strength in telecommunications, driven by data center demand and aerospace and defense. This meaningful acceleration is important because it reflects the impact of the work we have been doing to improve quality, strengthen customer engagement and drive larger orders. Injection Molding remains one of Proto Labs' key differentiated capabilities and its accelerated growth is an encouraging proof point in our broader expansion strategy. CNC Machining continued its strong performance with 20% year-over-year growth in our factory operation, driven by sustained strength in aerospace and defense, including drones, satellites and robotics. Our results this quarter also reinforce an important trend we are seeing across the business. Larger, more strategic customers are expanding both the breadth and the depth of their relationships with Proto Labs. Let me provide you with some examples. AeroVironment, a customer for over 10 years relies on us for both prototyping and production. Lockheed Martin has expanded its use of our 3D printing capabilities as they build out a network of strategic partners in additive production, a critical capability per space flight. And with companies such as Anduril, Meta, Medtronic, Edwards Life Sciences, Boston Dynamics and many others, we continue to build credibility as a partner that can support rapid innovation and increasingly complex production needs. The common thread is that our customers are asking Proto Labs to support more of their product life cycle. This is exactly the strategy we laid out earlier this year and it is why our teams remain focused on our 4 strategic pillars: number one, elevating the customer experience; number two, reigniting innovation; number three, expanding into production; and number four, driving operational efficiency. As it relates to elevating the customer experience, we made significant progress in the quarter with the rollout of our new European commercial structure on July 1, an important milestone in the broader transformation we have discussed over the past few quarters. Previously, customers often worked with multiple regional entities to access our services while we operated across several ERP systems. By aligning our European operations into a single existing ERP platform and legal entity, our European customers with operations across multiple countries can now access our full manufacturing footprint through a single point of engagement. This simplifies how customers do business with Proto Labs reduces friction and makes it easier to leverage the full breadth of our capabilities. At the same time, it reduces internal complexity and supports greater operational efficiency in Europe going forward. While we are making progress on our 4 strategic pillars, we also continue to drive organizational and operational changes to position Proto Labs for faster growth and improved profitability. To strengthen our commercial organization and better support our next phase of growth, we hired Bernardo Parlange as our Chief Commercial Officer in May. Bernardo brings a wealth of enterprise B2B commercial experience. He now leads sales, marketing and customer success, bringing these functions together under a unified strategy to improve commercial execution and build a more scalable model. Manufacturing excellence also remains a key focus. To that end, in May, we hired Micah Roberts as Senior Director of Global Quality to help strengthen quality outcomes, production consistency and customer satisfaction. This work is especially important as we support larger production programs where repeatability, inspection, documentation and quality systems become increasingly critical to earning more share with customers. Separately, we announced the planned retirement of Mike Kenison, former Chief Operations Officer, effective July 1st. Mike was with Proto Labs for nearly 20 years, and he played a significant role in building and scaling our world-class global operations and positioning the company for continued success. We are grateful for his exceptional leadership and dedication. We have initiated a search for a new Chief Operations Officer and expect to name a successor in the coming months. Returning to Europe and the transformation we outlined in February, we are pleased with the early progress we've made as revenue in the region grew 9% year-over-year, building on the momentum we saw in the first quarter. This reflects early results from go-to-market changes we began implementing late last year, including alignment to core industries and increased yet simplified customer engagement. I want to recognize Peter Horowitz, our VP of Sales and Customer Success in Europe and the go-to-market team for their strong leadership and execution as they drive the changes. At the same time, Europe remains a transformation story. While the commercial initiatives we implemented are beginning to gain traction and recent demand trends are encouraging, profitability is still a work in process. Overall, Europe remains a mid- to long-term effort. Our objective is to turn what has been an earnings headwind into a contributor to future growth and profitability, and the second quarter was an encouraging step in that direction. In closing, we are pleased with our execution across the business, which led to another record revenue quarter and another important proof point in our transformation. We delivered double-digit top line growth, a 340 basis point operating margin improvement and further expansion with larger strategic customers. The investments we are making are driving solid momentum. Injection Molding accelerated, CNC Machining remained strong, Europe grew nicely, and our teams are continuing to improve the way we serve the customers and operate the business. We continue to invest in AI to improve how we serve customers and operate internally. Proto Labs is at the forefront of what is called physical AI, the application of AI to the physical world, in our case, manufacturing. While much of today's AI discussion focuses on software. Physical AI in manufacturing requires a deep understanding of processes, materials, machines and quality, combined with sophisticated software and data sets. It is a materially harder problem requiring deep expertise in both software and manufacturing. We invented digital manufacturing in 1999 and with nearly 3 decades of experience building digital manufacturing systems, our richest manufacturing data sets and the ability to translate designs into physical parts via true digital thread, we believe we are uniquely positioned to lead in this emerging category. The market recognizes the value that we deliver and the type of company we are becoming. In July, Proto Labs was recognized by Time Magazine as one of America's best companies of 2026. This recognition is a testament to the dedication of our teams as we work to build a stronger, more innovative and more resilient company. At the start of this year, we began a significant transformation designed to position our business for faster growth and stronger long-term profitability. We are in the early stages of that work. But through the first half of 2026, we have demonstrated that Proto Labs can produce strong financial outcomes and transform the business for the future. This is the foundation for profitable growth and long-term value creation for customers and shareholders. With that, I'll turn the call over to Dan to walk through our financial performance and outlook in more detail. Dan Schumacher: Thanks, Suresh, and good morning. I'll start with a brief overview of our second quarter results, followed by our outlook for the rest of 2026. Second quarter revenue was a company record $149.3 million, up 10.2% year-over-year in constant currencies. By region, revenue in the U.S. grew 10.9%, while Europe grew 7.3% in constant currencies. Second quarter CNC Machining revenue grew 13.1% year-over-year in constant currencies. Our largest service continues to see strong growth, driven by both volume and pricing. Demand remains exceptionally strong in aerospace and defense, most notably space exploration, satellites and drones. Injection Molding grew 12.9% in constant currencies. As Suresh stated, this is a meaningful acceleration and reflects the work we have been doing to drive growth in Injection Molding. We saw notable strength across end markets as well as in larger orders. 3D printing revenue declined 2.7% year-over-year in constant currencies, mainly due to a 6.7% decline in Europe. We continue to see strength in DMLS and MJF technologies in the U.S., driven by aerospace and defense and electronics, and we are investing to add capacity in those areas. Sheet metal grew 3.5% year-over-year in constant currencies. On to profitability. Non-GAAP gross margin was 46.8% in the second quarter, 60 basis points higher than the first quarter and up 200 basis points year-over-year. These increases were driven by higher margins in both factory and network fulfillment as well as a mix shift. Second quarter non-GAAP operating expenses were $52 million, up $3.1 million compared to the prior year, primarily reflecting increased investment in demand generation, and higher contractor and professional services costs as we continue to invest in our strategic pillars. On a percent of revenue basis, adjusted operating expenses were 34.8% of revenue, approximately flat sequentially and down 140 basis points year-over-year. This lower level of operating expenses is primarily due to targeted cost reductions we made earlier in the year in Europe as a part of our strategic reset, along with reductions in the U.S. as we reallocated resources to fund our strategic projects. We continue to ramp hiring for strategic project work. In addition, as a part of our drive operational efficiency pillar, we are in the early innings of finding savings and efficiencies that will allow us to invest more in growth areas. Adjusted EBITDA was $25.1 million or 16.8% of revenue, up from $19.7 million or 14.6% of revenue in the second quarter of 2025. Second quarter non-GAAP earnings per share were $0.60, up $0.19 or 45% year-over-year, driven by revenue growth, gross margin improvements and significant leverage on our SG&A expenses. $0.60 is the highest adjusted EPS figure we've reported since the third quarter of 2020. We generated $15.4 million in cash from operations during the second quarter, and we repurchased $5 million of common stock. On June 30, we had $162.9 million of cash and investments on our balance sheet and 0 debt. Our outlook for the third quarter and full year 2026 is outlined on Slide 13. For the third quarter, we expect revenue between $145 million and $153 million. At the midpoint, this implies 10% revenue growth year-over-year. Revenue grew 10% year-over-year in the first half of 2026. Supported by our first half performance, our third quarter revenue guidance and our typical sequential revenue decline from the third to fourth quarter, we are raising our full year 2026 revenue growth outlook to 8% to 10% year-over-year. We expect foreign currency to have a $400,000 unfavorable impact on revenue compared to the third quarter of 2025. Our third quarter earnings guidance incorporates the following assumptions: non-GAAP add-backs will include stock-based compensation expense of approximately $4.2 million and amortization expense of $900,000, a non-GAAP effective tax rate between 23% and 24%. In summary, we expect third quarter 2026 non-GAAP earnings per share between $0.56 and $0.64. That concludes our prepared remarks. Please open the line for questions. Operator: The first question is from Greg Palm from Craig-Hallum. Greg Palm: Congrats on the results. Maybe just start with a sort of a differentiation between factory and network. I did not hear what factory network revenue actually was. It sounded based on your commentary, that factory was well led, but can you give us that? And then do you have the network margin as well? Suresh Krishna: Greg, thanks for the question. We are really excited with the 10% growth that we are driving, and we've driven this now 3 quarters in a row. The choice between factory and network is really a customer's choice. We fulfill the demand the way they want it to be fulfilled. We saw flat network revenues in Q2 A.s we continue to execute our strategic pillars and drive growth, we would be looking to drive growth in both the factory and the network. Overall goal is to continue to drive double-digit growth in the long term in any macro cycle. And we've done that for the past 3 quarters, and we're really thrilled with how we are performing right now on our strategic pillars. Dan Schumacher: Greg, the gross margin in the quarter for the network was 33.6%. That's both up sequentially and year-over-year. Greg Palm: Okay. I appreciate that. And then I think there was a couple of things that stood out across the revenue line. CNC remains strong. Injection Molding was really good to stand out, as you talked about. But even your new contacts, your new customers jumped up pretty nicely sequentially, and that's been kind of in a sequential decline for, I don't know, how many years. So I guess the question is, are you doing anything differently? Where are these customers coming from? What services are they using? And I know we're focusing a lot on revenue per customer and wallet share. But underneath the surface, is there also an increasing focus on going after new customers as well? Suresh Krishna: Yes. Greg, great question. As you think about our 4 strategic pillars, the first one is elevating customer experience, which is resulting in us removing friction for our customers that allows us to cater to our customers in a better way than we've done before. So that is really the focus that allows us to grow customers while retaining the customers and growing our wallet share with our customers. Dan Schumacher: And one example, Greg, of that in the quarter, we talked about it is we simplified the experience for the customers within Europe by moving to one legal entity as well as consolidating to our one ERP system, which means in Europe, customers have just one entity that they're interacting with, which simplifies a lot of things for them. We did that with our normal run rate of R&D expenses, and we will continue to make investments to make the experience for customers easier. Operator: The next question is from Troy Jensen from Cantor Fitzgerald. Troy Jensen: I also want to say congrats on the great results here. Suresh, if you could just maybe go through your counts about AI and how you're adopting it in the manufacturing organization. Can you just kind of help us -- I guess I assume you guys were using more AI to kind of reduce costs at the organization. But can you just help us with some of the applications that AI is benefiting on the manufacturing side? Suresh Krishna: Yes. Great question. We have been in the forefront of digital manufacturing. We invented it back in 1999 and have been improving it ever since. So what we have is a unique library of over 15 million CAD growing that allows us to actually use AI to make our offerings better. And our offerings are better in instant coating, our design for manufacturability, our sourcing and all of the aspects of how we run the business. So from a front-end side for the customer, we are making improvements in pricing. We are making improvements in instant coating, design for manufacturability and how we are sourcing and matching them with the right offering within our platforms. And to take it further, when we talked about physical AI, that requires deep knowledge of all manufacturing processes. As you know, our manufacturing execution software, MES, is not off-the-shelf software like what other companies have. It's homegrown. We have patents on it. It's part of our trade secret. And that is what is allowing us to continue to innovate and build on and drive the connectivity between quality systems and sensors that we have in our factories all the way to how we can drive speed for our customers and speed is how we are winning in this marketplace. And AI applied to the physical world is allowing us to win with our customers with speed and accelerating their innovation. Troy Jensen: We'll congrats to [ Mark and Mitch ] for all the work there. Have a quick question for Dan. Just G&A at the expense in the quarter gapped up a lot, can you -- is that a onetime event? Is that going to go back down here in Q3? Or is that going to be more sustained at this level? Dan Schumacher: Yes, I would say it's more sustained at this level. I think we talked about in the first quarter, we made a number of reductions, both in Europe and in the Americas to fund our strategic investment. And so what I would look at -- what I think you should model is our SG&A expense will be down slightly Q2 to Q3 to get into that earnings guidance range. Also, gross margin will be down slightly Q2 to Q3, and that kind of gets you in that earnings range. But Troy, we're focused on making the right investment with strong ROI moving forward. And so over the long term, I wouldn't necessarily peg where we are Q1 and Q2 as a percent of revenue from a dollar perspective is where we're going to be over the long term. We're making investments there. Troy Jensen: Great. Well clearly, the investments are paying off. So keep it up. Maybe just one last question. I think I asked this a lot, but is there any way you guys can kind of help us with production as a percentage of sales? And I guess we'd love to see if it's growing for you guys. I'm sure it is, but is there any way you guys can kind of help parse that out for us? Dan Schumacher: Yes. We don't -- I'm not going to help you. We don't specifically measure as it relates to that. We're focused very specifically on winning a larger wallet share of our customers. As that happens, what comes with that is more frequent and larger orders over the longer term. And that really needs to get into sustainable results. Now that being said, I think there is a big opportunity for us, both organically and inorganically, to expand our capabilities in terms of what we do for production. And so over the longer term, we're going to continue to move into that area. Operator: The next question is from Brian Drab from William Blair. Brian Drab: Sure feels different at Proto Labs the last few quarters. So congratulations on the very strong organic revenue growth that you guys are sustaining. I was wondering, Dan, you just mentioned inorganic. Can you elaborate on that? What you guys have in your minds in terms of what you would do inorganically to augment what you're doing for production? Dan Schumacher: Yes. It's all centers around the customer. So we want to make sure that we're meeting more and more of our customer needs, especially our larger customers, especially in areas in which we're seeing higher growth. And I think there's an opportunity -- we feel there's an opportunity to expand our capability of what we do. Troy just mentioned production. So there is a capability there that I think other companies may have that are attractive to us and attractive to some of our larger customers. So yes, we have a healthy pipeline of M&A opportunities, and the focus needs to be the return that we would get from those. And the highest return is going to come from serving our customers' needs, and that's our focus. Brian Drab: Okay. What I'm hearing is that you don't really want to tell me, which I get. But is it more -- you know what I mean, like do you not want to -- like is it another service? Or is it an automation of current services? Or just curious if it's like a completely different manufacturing process that you're thinking of adding? Dan Schumacher: No, it's not going to be outside any of the services that we do. But it's going to be -- I mean the opportunities we're looking at is to be able to do more production type applications for our customers in our key industries. Brian Drab: So do certifications and quality steps and metrology and... Dan Schumacher: All of those things, Brian. Brian Drab: Yes. Okay. Suresh Krishna: Just to be clear, Brian, we have certifications as well. We have AS9100. We got ITAR. We are working on [ CMMC ]. We've got ISO 13485 for medical. We have those certifications as well. As we think about expanding through acquisitions, it is going to be helping us to reinforce our strategic pillars. Moving into production is important for us and having companies that are actually doing that versus just doing prototyping and production will help us get focused and drive deeper share of wallet with the customers that we already serve. Brian Drab: Okay. Great. And then just specifically on Injection Molding and CNC, both saw this really strong step up sequentially from -- I mean, they've been doing great for the last 6 quarters generally. CNC 6 quarters ago was at $52 million, now you're doing $70 million. So on CNC, then you have the $7 million step-up sequentially. Is this kind of sequential growth, do you think, sustainable in either CNC or Injection Molding? Was there anything specific big orders from a big customer that resulted in such a strong sequential step up in the second quarter? Dan Schumacher: Yes. What I would tell you is the long-term growth is sustainable, and I think we're going to have larger pickups in certain quarters than we have in other quarters, right? But I think the long-term growth -- the long-term growth in these areas is sustainable. Maybe Suresh, if you want to talk about. Suresh Krishna: Yes. Let me give you Injection Molding as an example. It's a significant differentiator of what we have versus anybody else in the marketplace. And we've been methodically working on getting certifications. You mentioned that, Brian. So ISO 13485, traceability, process validation, first article inspection, PPAPs, all those capabilities we've built, so it allows us to serve our customer into the entire life cycle from prototyping all the way to production. We've got a handful of customers who are really pulling for us to be able to offer them more services, it's resonating. Our strategy, which is to say we want to be from prototype all the way to production is resonating in med devices. It's resonating in drones. It's resonating in satellites. There are a lot of customers who want us to go down this path. And we see that the growth we saw in this quarter is very sustainable in the future. We are early cycle in these industries to get into production and provide a full life cycle of parts. Brian Drab: Okay. And then the last thing I just want to ask is that stands out to me is that the network revenue was flat, as you said. But the factory revenue was up 14%, if my model is correct here. So that tells me -- and you said people want speed. Are we getting back to an environment given the ISM Index is showing and other signs are showing that the manufacturing environment is more healthy. The people are not choosing the standard lead time but are more paying up for speed like the good old days at Proto Labs. That's what those data points are telling me. Dan Schumacher: And we're seeing that, Brian. So we are seeing that people are paying more for speed, whether that be in expedites or in our standard lead times, which, as you know, are faster than anything that's in the industry. So we are seeing strength in those areas. Suresh Krishna: Just think of us -- I mean, we are absolutely in the front end of innovation, and there is more innovation activity, and we're in the early cycle of a lot of industries which are early in innovation. You think about drones, robotics, data centers, satellites, rockets, all of those are early cycle and with a long tail ahead of us. So what we offer is a unique proposition. And we are, again, early in this cycle of the next several years of a lot of innovation that is waiting to happen in these sectors. Brian Drab: Yes. It feels like you're right at that intersection of all those end markets that are moving fast. And a manufacturing environment that is getting healthier and will generally probably move faster as they have more money and more competition picks up and the activity picks up. That all sounds very good. Operator: The next question is from Jim Ricchiuti from Needham & Company. James Ricchiuti: I was hoping to get a little bit more color, if we can, on the strength you're seeing in some of the key verticals. I mean it sounds like you had a strong quarter in A&D. But I wonder if you could talk a little bit about the various growth vectors as it relates to the increase in the full year growth rate. Suresh Krishna: Jim, thanks for your question. We absolutely see a lot of strength in aerospace and defense. That sector grew almost 20% for us in Q2 and that is pretty broad for us. We don't break it out, but it includes satellites. It includes drones. It includes rockets, space exploration, satellites and a few other high-growth industries in there. As we indicated in the last question, we are in the early innings of a multiyear innovation cycle in all of these areas. And the focus there is from this present administration on increasing speed in defense innovation, in particular, absolutely plays to our advantage. So a lot of the defense majors and also the newer primes, they are very, very interested in what we are able to offer and partner with us to take not just into prototyping, but all the way into production. Particularly, if you think about drones, many of them as if they work in sending their products into theater, they get feedback from the market right away. And the next iteration, in fact, next batch of production is an innovation or something changes, and it really suits us because we innovate at the speed of software as do these companies. We are able to partner with them to get it all the way from prototype to production. Dan Schumacher: And then Jim, some of the numbers. Aerospace and defense is about 25% of our total revenue right now. And I would also say that the other innovative areas outside of aerospace and defense, we're seeing growth in supporting data centers and the build-out of data centers as well as the innovation that's happening in robotics. So it's not necessarily just one player. There are multiple companies that we're working with in each of those industries and helping them innovate. James Ricchiuti: Got it. Nice acceleration in Europe and wondering if you feel like you have perhaps turned the corner there. It sounds like this is more operational or maybe the market -- the overall market demand has picked up. So I was hoping you could elaborate on that and maybe shed more light, Suresh, on what you highlighted, the drag on profitability in Europe and how much of that -- what that represents and how we should be thinking about improvements in this area over the medium term? Suresh Krishna: Yes. I think Dan and I will tag team on this. We made some changes in our go-to-market approaches in Europe end of last year, and we are seeing the fruits of that. So we have focused our sales and marketing efforts into industries that are meaningful for us, both A&D and medical, like in the U.S. are strong for Europe. And our sales teams are able to focus on a handful of customers and drive deeper relationships, and that is allowing us to start to accelerate our revenues. As we've said in the past, it's a multifold transformation. We need revenue growth, but we also need to be able to optimize costs, both our operating costs and our factory costs. So it is a medium-term effort for us to be able to get Europe back to profitability. Dan Schumacher: And we continue to make progress in terms of improving the customer experience in Europe. I talked about it earlier, but we're going to make improvements in that customer experience. In Europe, we -- customers now can order through one legal entity. It makes it simpler for them to do transactions across our entire suite of businesses, and that will help us grow with greater operational efficiency into the future. Operator: This concludes the question-and-answer session as well as today's teleconference. You may disconnect your lines at this time. Thank you for your participation. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends Proto Labs. The Motley Fool has a disclosure policy. Proto Labs (PRLB) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Proto Labs, Inc.? Here are five stocks we like better. Record revenue and stronger profitability: Proto Labs reported Q2 revenue of $149.3 million, up 10.2% year over year in constant currency. Adjusted EBITDA increased to $25.1 million, while non-GAAP EPS rose 45% to $0.60. CNC machining and injection molding led growth: CNC revenue rose 13.1% and injection molding increased 12.9%, driven by aerospace, defense, telecommunications and larger customer orders. 3D-printing revenue declined 2.7%, primarily because of weakness in Europe. Full-year outlook raised: Management now expects 2026 revenue growth of 8% to 10% and projects Q3 revenue of $145 million to $153 million. The company also highlighted its European commercial transformation and continued evaluation of acquisitions. If There's a Domestic Manufacturing Boom, These 3 Stocks Could Win Proto Labs (NYSE:PRLB) reported record second-quarter revenue as demand strengthened in CNC machining and injection molding, while management raised its full-year growth outlook and highlighted progress in its European commercial transformation. Revenue for the quarter ended June 30 was $149.3 million, up 10.2% year over year in constant currency, Chief Financial Officer Dan Schumacher said. U.S. revenue rose 10.9% in constant currency, while European revenue increased 7.3%. The company said revenue per customer climbed 17% from a year earlier, reflecting deeper engagement with larger accounts. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now “We delivered another record quarter with record revenue and strong profitability,” President and Chief Executive Officer Suresh Krishna said. He said the company generated double-digit revenue growth for the second consecutive quarter, alongside gross-margin expansion and operating-cost leverage. CNC machining, Proto Labs’ largest service line, generated 13.1% year-over-year growth in constant currency. Schumacher said the performance was driven by both volume and pricing, with particularly strong demand from aerospace and defense customers involved in space exploration, satellites and drones. → Microsoft Just Flipped the AI Spending Narrative Overnight Injection molding revenue increased 12.9% in constant currency, an acceleration that management attributed to broader end-market strength and larger orders. Krishna cited telecommunications demand related to data centers as well as aerospace and defense activity. He said the company’s efforts to improve quality, customer engagement and production-oriented capabilities were supporting growth in the service. Management said customers are increasingly using Proto Labs for a broader portion of their product lifecycle, from prototyping through production. Krishna named AeroVironment, Lockheed Martin, Anduril, Meta, Medtronic, Edwards Lifesciences and Boston Dynamics among companies with which Proto Labs has expanded or continued relationships. → Carrier Earnings Could Send the Stock to a New All-Time High 3D printing revenue declined 2.7% year over year in constant currency, largely due to a 6.7% decline in Europe. However, Schumacher said U.S. demand remained strong for direct metal laser sintering, or DMLS, and multi-jet fusion, or MJF, technologies in aerospace, defense and electronics. The company is investing to add capacity in those areas. Sheet metal revenue increased 3.5% in constant currency. During the question-and-answer session, management said network revenue was flat during the quarter. The network’s gross margin was 33.6%, improving both sequentially and year over year, Schumacher said. He added that the company aims to grow both factory and network revenue over time, based on customers’ fulfillment preferences. Second-quarter non-GAAP gross margin was 46.8%, up 60 basis points sequentially and 200 basis points from the prior-year quarter. Schumacher attributed the improvement to higher margins in factory and network fulfillment as well as a favorable mix shift. Non-GAAP operating expenses totaled $52 million, an increase of $3.1 million from a year earlier, primarily reflecting demand-generation investments and higher contractor and professional-services costs. As a percentage of revenue, adjusted operating expenses were 34.8%, approximately flat sequentially and down 140 basis points year over year. Adjusted EBITDA rose to $25.1 million, or 16.8% of revenue, from $19.7 million, or 14.6% of revenue, in the year-earlier period. Non-GAAP earnings per share increased 45% year over year to $0.60, which Schumacher said was the company’s highest adjusted EPS since the third quarter of 2020. Proto Labs generated $15.4 million in operating cash flow and repurchased $5 million of common stock during the quarter. It ended June with $162.9 million in cash and investments and no debt. Krishna said Proto Labs rolled out a new European commercial structure on July 1. The company consolidated European operations into a single existing enterprise resource planning platform and legal entity, allowing customers operating in multiple countries to access its manufacturing footprint through one point of engagement. European revenue grew 9% year over year, according to Krishna’s remarks, building on first-quarter momentum. Management said commercial changes begun late last year, including a greater focus on core industries and simplified customer engagement, were beginning to gain traction. Still, Krishna said Europe remains a “mid-to-long-term effort” and that profitability in the region is still a work in progress. The company is seeking to improve both operating and factory costs while continuing to grow revenue. Proto Labs hired Bernardo Parlange as chief commercial officer in May to lead sales, marketing and customer success. It also appointed Micah Roberts as senior director of global quality. The company is searching for a new chief operating officer following the July 1 retirement of former COO Mike Kenison. For the third quarter, Proto Labs expects revenue of $145 million to $153 million, with the midpoint representing approximately 10% year-over-year growth. The forecast assumes a $400,000 unfavorable foreign-exchange impact compared with the third quarter of 2025. The company raised its full-year 2026 revenue growth outlook to 8% to 10% year over year, supported by first-half results and third-quarter guidance. It expects third-quarter non-GAAP EPS of $0.56 to $0.64, based on anticipated stock-based compensation of approximately $4.2 million, amortization expense of $900,000 and a non-GAAP tax rate of 23% to 24%. Management also said it continues to evaluate acquisition opportunities that could expand its production-oriented capabilities within its existing service areas. Schumacher said the company has a “healthy pipeline” of potential transactions, with the focus on returns and serving larger customers’ needs. Proto Labs, Inc is a digital manufacturing company that offers on-demand production services for custom parts and prototypes. Utilizing technologies such as 3D printing (additive manufacturing), CNC machining and injection molding, the company transforms digital CAD designs into functional parts on accelerated timelines. Its platform-driven process combines automated quoting, rapid tool generation and manufacturing execution to serve product developers, engineers and small- to medium-sized production runs. Founded in 1999 by Larry Lukis, Proto Labs has championed the application of digital workflows to traditional manufacturing methods. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Proto Labs Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

This article first appeared on GuruFocus. Release Date: July 31, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record revenue of $149.3 million, up 10.2% year-over-year in constant currencies, with double-digit growth for the third consecutive quarter. Gross margin expanded 200 basis points year-over-year to 46.8%, driven by higher margins in both factory and network fulfillment. Injection molding revenue accelerated 12.9% year-over-year, with strength in telecommunications, aerospace, and defense. CNC machining revenue grew 13.1% year-over-year, driven by sustained demand in aerospace and defense, including drones, satellites, and robotics. Adjusted EPS of $0.60 was the highest since Q3 2020, up 45% year-over-year, with adjusted EBITDA margin improving to 16.8%. Europe revenue grew 9% year-over-year, showing early progress from go-to-market changes and a simplified customer experience. Revenue per customer grew 17% year-over-year, reflecting deeper engagement with larger, more strategic customers. Company raised full-year 2026 revenue growth outlook to 8-10% year-over-year. Strong cash generation of $15.4 million from operations, with a debt-free balance sheet and $62.9 million in cash and investments. Investments in AI and digital manufacturing capabilities are enhancing customer experience and operational efficiency. 3D printing revenue declined 2.7% year-over-year, with a 6.7% drop in Europe, despite strength in the US. Europe remains a transformation story with profitability still a work in process, and it continues to be a mid-to-long-term effort. Network revenue was flat year-over-year, indicating slower growth in that fulfillment channel. Operating expenses increased $3.1 million year-over-year, driven by higher demand generation and contractor costs. Third-quarter revenue guidance implies a typical sequential decline from Q2, with a midpoint of $149 million, down from Q2's $149.3 million. Foreign currency is expected to have a $400,000 unfavorable impact on revenue in Q3. Gross margin is expected to decline slightly in Q3 compared to Q2. The company is still in the early innings of finding operational efficiencies, suggesting more work needed to drive cost leverage. Dependence on aerospace and defense (25% of revenue) exposes the company to sector-specific cyclicality. The planned retirement of the COO and ongoing organizational changes could create short-term execution risks. Warning! GuruFocus has detected 7 Warning Signs with PRLB. Is PRLB fairly valued? Test your thesis with our free DCF calculator. Q: Can you elaborate on the strength you're seeing in key verticals, particularly aerospace and defense, and how that relates to the increased full-year growth rate? A: Suresh Krishna (President and CEO): Aerospace and defense grew almost 20% for us in Q2 and is now about 25% of total revenue. This growth is broad-based, including satellites, drones, rockets, and space exploration. We are in the early innings of a multi-year innovation cycle in these areas, and the current administration's focus on increasing defense innovation speed plays to our advantage. We are also seeing growth in data center build-out and robotics, with multiple companies in each industry. Q: Can you provide a differentiation between factory and network revenue, and what were the network margins? A: Dan Schumacher (CFO): We saw flat network revenues in Q2, while factory revenue grew 14%. The choice between factory and network is really a customer's choice, and we fulfill demand the way they want it fulfilled. The network gross margin was 33.6%, which is up both sequentially and year over year. Our overall goal is to continue driving double-digit growth in the long-term, which we've done for the past three quarters. Q: New customer contacts jumped up pretty nicely sequentially after being in decline for years. Are you doing anything differently to attract these customers? A: Suresh Krishna (President and CEO): Our first strategic pillar is elevating customer experience, which removes friction for customers and allows us to grow while retaining customers and expanding wallet share. A key example is simplifying the European experience by moving to one legal entity and consolidating to one ERP system, making it easier for customers to interact with us across our entire suite of businesses. Q: Can you help us understand how you're adopting AI in the manufacturing organization and some of the applications benefiting from it? A: Suresh Krishna (President and CEO): We have a unique library of over 150 million CAD drawings that allows us to use AI to improve our offerings, including instant quoting, design for manufacturability, and sourcing. Our homegrown manufacturing execution software (MES) is patented and part of our trade secret, allowing us to connect quality systems and sensors in our factories to drive speed for customers. AI applied to the physical world is allowing us to win customers with speed and accelerate their innovation. Q: G&A expenses gapped up a lot in the quarter. Is that a one-time event or more sustained? A: Dan Schumacher (CFO): It's more sustained at this level. We made a number of reductions both in Europe and the Americas to fund our strategic investments. You should model SG&A expense down slightly from Q2 to Q3, with gross margin also down slightly, which gets you into the earnings guidance range. Over the long-term, we're focused on making the right investments with strong ROI. Q: Can you help us with production as a percentage of sales and whether it's growing? A: Dan Schumacher (CFO): We don't specifically measure that. We're focused on winning a larger wallet share of our customers, which results in more frequent and larger orders over the long-term. There is a big opportunity for us both organically and inorganically to expand our capabilities for production, and we'll continue to move into that area over the longer-term. Q: You mentioned inorganic opportunities. Can you elaborate on what you would do to augment production capabilities? A: Suresh Krishna (President and CEO): It all centers around the customer. We want to meet more of our larger customers' needs in high-growth areas. We have a healthy pipeline of M&A opportunities focused on expanding production-type applications in our key industries. We already have certifications like AS9100, ITAR, and ISO 13485, and we're working on CMMC. Acquisitions would help reinforce our strategic pillars and drive deeper wallet share with existing customers. Q: Both CNC machining and injection molding saw strong sequential step-ups. Is this kind of growth sustainable, or were there specific large orders? A: Suresh Krishna (President and CEO): The long-term growth is sustainable, though we'll have larger pickups in certain quarters. For injection molding, we've methodically built capabilities like ISO 13485, traceability, process validation, and post-article inspection, allowing us to serve customers from prototyping to production. This strategy is resonating in med devices, drones, and satellites. We are early cycle in these industries, and the growth we saw this quarter is very sustainable. Q: Network revenue was flat while factory revenue was up 14%. Does this indicate people are choosing faster lead times as the manufacturing environment improves? A: Suresh Krishna (President and CEO): Yes, we are seeing people pay more for speed, whether through expedites or our standard lead times, which are faster than anything in the industry. We are at the front end of innovation with more activity in drones, robotics, data centers, satellites, and rocketsall early cycle with a long tail ahead. We are early in this cycle of innovation that will span the next several years. Q: Can you elaborate on the acceleration in Europe and whether you've turned the corner there, plus how we should think about profitability improvements? A: Suresh Krishna (President and CEO): We made changes to our go-to-market approach in Europe at the end of last year, focusing sales and marketing efforts on meaningful industries like A&D and medical. This is allowing us to accelerate revenue. However, it's a multi-fold transformation requiring revenue growth and cost optimization. It's a medium-term effort to return Europe to profitability. We're improving the customer experience by allowing customers to order through one legal entity, which simplifies transactions and will help us grow with greater operational efficiency. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Manufacturing services provider Proto Labs (NYSE:PRLB) reported Q2 CY2026 results exceeding the market’s revenue expectations , with sales up 10.6% year on year to $149.3 million. Guidance for next quarter’s revenue was optimistic at $149 million at the midpoint, 2.2% above analysts’ estimates. Its non-GAAP profit of $0.60 per share was 11.5% above analysts’ consensus estimates. Is now the time to buy Proto Labs? Find out in our full research report. Revenue: $149.3 million vs analyst estimates of $144.1 million (10.6% year-on-year growth, 3.6% beat) Adjusted EPS: $0.60 vs analyst estimates of $0.54 (11.5% beat) Adjusted EBITDA: $25.12 million vs analyst estimates of $23.53 million (16.8% margin, 6.8% beat) Revenue Guidance for Q3 CY2026 is $149 million at the midpoint, above analyst estimates of $145.7 million Adjusted EPS guidance for Q3 CY2026 is $0.60 at the midpoint, above analyst estimates of $0.51 Operating Margin: 7.6%, up from 3.7% in the same quarter last year Free Cash Flow Margin: 6.2%, similar to the same quarter last year Market Capitalization: $1.79 billion "Through the first half of 2026, we have demonstrated that Protolabs can deliver strong financial performance while simultaneously transforming the business for the future," said President and Chief Executive Officer Suresh Krishna. Pioneering the concept of online quoting and manufacturing for custom prototypes and low-volume production parts, Proto Labs (NYSE:PRLB) offers injection molding, 3D printing, and sheet metal fabrication for manufacturers in various industries. A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Regrettably, Proto Labs’s sales grew at a sluggish 4.4% compounded annual growth rate over the last five years. This was below our standard for the industrials sector and is a poor baseline for our analysis. Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Proto Labs’s annualized revenue growth of 4.9% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak. We can dig further into the company’s revenue dynamics by analyzing its three most important segments: Injection Molding , CNC Machining , and 3D Printing, which are 35.9%, 47.1%, and 13.8% of revenue. Over the last two years, Proto Labs’s Injection Molding (injection molds and parts) and CNC Machining (custom CNC-machined parts) revenues averaged year-on-year growth of 2.2% and 17.2% while its 3D Printing revenue (custom 3D-printed parts) averaged 2.3% declines. This quarter, Proto Labs reported year-on-year revenue growth of 10.6%, and its $149.3 million of revenue exceeded Wall Street’s estimates by 3.6%. Company management is currently guiding for a 10.1% year-on-year increase in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 5.5% over the next 12 months, similar to its two-year rate. This projection is underwhelming and indicates its newer products and services will not accelerate its top-line performance yet. ALSO WORTH WATCHING: Nvidia’s Quiet Partner. Nvidia’s chips cost a hundred grand. The connectors that make them work cost even more. One company makes them all. Every AI server needs specialized infrastructure the chip companies don’t make. High-speed cables. Power connectors. Thermal sensors. This 90-year-old company built a monopoly on it. The AI boom just started. This stock is still flying under the radar. Claim The Stock Ticker Here for FREE. Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development. Proto Labs’s operating margin has been trending up over the last 12 months, leading to break even profits over the last five years. However, its large expense base and inefficient cost structure mean it still sports inadequate profitability for an industrials business. This result is surprising given its high gross margin as a starting point. Analyzing the trend in its profitability, Proto Labs’s operating margin might have fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. This quarter, Proto Labs generated an operating margin profit margin of 7.6%, up 3.9 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead. We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable. Proto Labs’s flat EPS over the last five years was below its 4.4% annualized revenue growth. However, its operating margin didn’t change during this time, telling us that non-fundamental factors such as interest and taxes affected its ultimate earnings. Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business. For Proto Labs, its two-year annual EPS growth of 8.2% was higher than its five-year trend. Accelerating earnings growth is almost always an encouraging data point. In Q2, Proto Labs reported adjusted EPS of $0.60, up from $0.41 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Proto Labs’s full-year EPS to stay about the same, moving from $2.05 to $2.06. We were impressed by Proto Labs’s optimistic EPS guidance for next quarter, which blew past analysts’ expectations. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a solid print. The stock traded up 2.8% to $77.28 immediately following the results. Proto Labs had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.

Record Quarterly Revenue of $149.3 Million, a 10.6% Increase Year-Over-Year GAAP Earnings Per Share of $0.37, Non-GAAP Earnings Per Share of $0.60 Raising Full Year 2026 Revenue Growth Guidance from 6% - 8% to 8% - 10% MINNEAPOLIS, July 31, 2026--(BUSINESS WIRE)--Proto Labs, Inc. ("Protolabs" or the "Company") (NYSE: PRLB), the world’s leading provider of digital manufacturing services, today announced financial results for the second quarter ended June 30, 2026. Second Quarter 2026 Financial Highlights: Revenue was a record $149.3 million, a 10.6% increase over the second quarter of 2025. GAAP gross margin was 46.4%, up from 44.3% in the second quarter of 2025. Non-GAAP gross margin was 46.8%, up 200 bps from 44.8% in the second quarter of 2025. GAAP operating margin was 7.6%, up from 3.7% in the second quarter of 2025. Non-GAAP operating margin was 12.0%, up 340 bps from 8.6% in the second quarter of 2025. GAAP net income was $0.37 per diluted share, compared to $0.18 per diluted share in the second quarter of 2025. Non-GAAP net income was $0.60 per diluted share, compared to $0.41 per diluted share in the second quarter of 2025.Note: See "Non-GAAP Financial Measures" below. "We delivered another strong quarter with record revenue, double-digit revenue growth, and both gross and operating margin expansion. More importantly, we are seeing increasing evidence that our strategy is gaining traction across the business, with larger strategic customers expanding their relationships with Protolabs," said President and Chief Executive Officer Suresh Krishna. "Through the first half of 2026, we have demonstrated that Protolabs can deliver strong financial performance while simultaneously transforming the business for the future. We are encouraged by the momentum we are seeing across customers, services, and regions." Additional Second Quarter 2026 Financial Highlights: Adjusted EBITDA was $25.1 million, or 16.8% of revenue, compared to $19.7 million, or 14.6% of revenue, in the second quarter of 2025. See "Non-GAAP Financial Measures" below. Cash generated from operations was $15.4 million. Cash and investments balance was $162.9 million as of June 30, 2026. "Record revenue and meaningful margin expansion in the second quarter highlight the strength and scalability of our business model," said Chief Financial Officer Dan Schumacher. "We continue to generate strong cash flow while investing in strategic growth initiatives, and we remain focused on balancing profitable growth with disciplined execution to drive value for customers and shareholders." Financial Guidance and Outlook: For full year 2026, Protolabs is raising its guidance and now expects to generate revenue growth between 8% and 10%. For the third quarter of 2026, the Company expects revenue between $145.0 million and $153.0 million. For the third quarter of 2026, the Company expects GAAP diluted net income per share between $0.34 and $0.42, and non-GAAP diluted net income per share between $0.56 and $0.64. See "Non-GAAP Financial Measures" below. Non-GAAP Financial Measures The Company has included non-GAAP revenue growth by region and by product line that excludes the impact of changes in foreign currency exchange rates (collectively, "non-GAAP revenue growth"). Management believes these metrics, when viewed in conjunction with the comparable GAAP 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 loss (gain) on foreign currency, trade refunds and charges, net, restructuring and transformation costs, costs related to exit and disposal activities and CEO transition costs (collectively, "Adjusted EBITDA"), in this press release to provide investors with additional information regarding the Company’s financial results. The Company has also included earnings before interest, taxes, depreciation and amortization margin ("EBITDA margin") and EBITDA margin, adjusted for stock-based compensation expense, unrealized loss (gain) on foreign currency, trade refunds and charges, net, restructuring and transformation costs, costs related to exit and disposal activities and CEO transition costs (collectively, "Adjusted EBITDA margin"), in this press release to provide investors with additional information regarding the Company’s financial results. The Company has included non-GAAP gross margin, adjusted for stock-based compensation expense, amortization expense and trade refunds and charges, net, 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, trade refunds and charges, net, restructuring and transformation costs, costs related to exit and disposal activities and CEO transition 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 and non-GAAP net income per share, in each case, adjusted for stock-based compensation expense, amortization expense, unrealized loss (gain) on foreign currency, trade refunds and charges, net, restructuring and transformation costs, costs related to exit and disposal activities and CEO transition 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 net income per share, non-GAAP gross margin, non-GAAP operating margin, non-GAAP revenue growth by region and by product line, and Adjusted EBITDA and Adjusted EBITDA margin, 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, provide useful measures for period-to-period comparisons of the Company’s business, and in determining executive and senior management incentive compensation. 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. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. These non-GAAP financial measures exclude significant expenses and income that are required by GAAP to be recorded in our condensed consolidated financial statements and are subject to inherent limitations. Investors should review the reconciliations of non-GAAP financial measures to the comparable GAAP financial measures that are included in this press release. Conference Call The Company has scheduled a conference call to discuss its second quarter 2026 financial results and third quarter 2026 outlook today, July 31, 2026, 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/9bgsjeh5/. 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 fastest manufacturing service enabling companies across every industry to streamline production of quality parts throughout the entire product life cycle. From custom prototyping to end-use production, we support product developers, engineers, and supply chain teams along every phase of their manufacturing journey. Get started now at protolabs.com. 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20260731266719/en/ Contacts Investor Relations ContactsProtolabsRyan Johnsrud, 612-225-4873Sr. Manager – Investor Relations and Corporate [email protected] Gateway Group, [email protected] Media ContactProtolabsBrent Renneke, 763-479-7704Corporate Communications [email protected]

Proto Labs (PRLB) came out with quarterly earnings of $0.6 per share, beating the Zacks Consensus Estimate of $0.54 per share. This compares to earnings of $0.41 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +11.11%. A quarter ago, it was expected that this custom parts manufacturer would post earnings of $0.4 per share when it actually produced earnings of $0.54, delivering a surprise of +35%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Proto Labs, which belongs to the Zacks Rubber - Plastics industry, posted revenues of $149.34 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.74%. This compares to year-ago revenues of $135.06 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Proto Labs shares have added about 48.5% since the beginning of the year versus the S&P 500's gain of 8.7%. While Proto Labs has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Proto Labs was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.51 on $147.39 million in revenues for the coming quarter and $2.07 on $576.01 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Rubber - Plastics is currently in the top 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Core Molding Technologies (CMT), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 4. This maker of fiber reinforced plastics is expected to post quarterly earnings of $0.21 per share in its upcoming report, which represents a year-over-year change of -55.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Core Molding Technologies' revenues are expected to be $60.05 million, down 24.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Proto Labs, Inc. (PRLB) : Free Stock Analysis Report Core Molding Technologies Inc (CMT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Manufacturing services provider Proto Labs (NYSE:PRLB) will be reporting results this Friday before the bell. Here’s what to expect. Proto Labs beat analysts’ revenue expectations last quarter, reporting revenues of $139.3 million, up 10.4% year on year. It was an exceptional quarter for the company, with EPS guidance for next quarter exceeding analysts’ expectations and a beat of analysts’ EPS estimates. Is Proto Labs a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members. This quarter, the market is expecting Proto Labs’s revenue to grow 6.7% year on year, in line with the 7.5% increase it recorded in the same quarter last year. Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Proto Labs rarely misses Wall Street’s revenue estimates. Looking at Proto Labs’s peers in the industrial machinery segment, some have already reported their Q2 results, giving us a hint as to what we can expect. GE Aerospace delivered year-on-year revenue growth of 24.5%, beating analysts’ expectations by 6%, and Stanley Black & Decker reported flat revenue, in line with consensus estimates. GE Aerospace traded down 3.2% following the results. Read our full analysis of GE Aerospace’s results here and Stanley Black & Decker’s results here. In the last year or so, investors have shifted their focus from one macro dynamic to the next (AI disintermediation and AI investment to geopolitical conflict, interest rates, and the health of the wider economy). While some of the industrial machinery stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 8.1% on average over the last month. Proto Labs is down 12.4% during the same time and is heading into earnings with an average analyst price target of $88 (compared to the current share price of $71.38). WHILE YOU’RE HERE: The Next Palantir? One satellite company captures images of every point on Earth. Every single day. The Pentagon wants it. Hedge funds are using it to beat earnings. You’ve probably never heard of it. This is what the early days of Palantir looked like before it became a giant. Same playbook. Different technology. If you missed Palantir, you need to see this. Claim The Stock Ticker for Free HERE.