Protolabs Reports Financial Results for the Fourth Quarter and Full Year 2023

Revenue of $125 Million in the Fourth Quarter of 2023

Record Annual Revenue of $504 Million in 2023

MINNEAPOLIS--(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 fourth quarter and full year ended December 31, 2023.

Fourth Quarter 2023 Financial Highlights:

• Revenue was $125.0 million, an 8.2% increase compared to the fourth quarter of 2022.
• Revenue generated from Protolabs Network was $22.5 million, a 52.0% increase compared to the fourth quarter of 2022.
• Net income was $7.0 million, or $0.27 per diluted share, compared to a net loss of $4.24 per diluted share in the fourth quarter of 2022.
• Non-GAAP net income was $11.8 million, or $0.46 per diluted share, compared to $7.0 million, or $0.26 per diluted share, in the fourth quarter of 2022. See “Non-GAAP Financial Measures” below.
• EBITDA was $18.3 million, or 14.6% of revenue. See “Non-GAAP Financial Measures” below.
• Adjusted EBITDA was $22.3 million, or 17.8% of revenue, compared to $14.5 million, or 12.5% of revenue, in the fourth quarter of 2022. See “Non-GAAP Financial Measures” below.

Full Year 2023 Financial Highlights:

• Revenue was a record $503.9 million, representing a 3.2% increase over 2022.
• Revenue generated from Protolabs Network was $82.6 million in 2023, representing growth of 70.4% over the prior year.
• Net income was $17.2 million, or $0.66 per diluted share, compared to a net loss of $3.77 per diluted share in 2022.
• Non-GAAP net income was $41.6 million, or $1.59 per diluted share, compared to $41.1 million, or $1.50 per diluted share, in 2022. See “Non-GAAP Financial Measures” below.
• EBITDA was $63.2 million, or 12.6% of revenue, in 2023. See “Non-GAAP Financial Measures” below.
• Adjusted EBITDA was $83.2 million, or 16.5% of revenue, in 2023. See “Non-GAAP Financial Measures” below.
• Cash flow from operations was $73.3 million in 2023, compared to $62.1 million in 2022.
• The Company repurchased $44.0 million in common shares during the year.
• Protolabs served 53,464 customer contacts during the year.

"We capped off a record year with strong fourth quarter results, driven by consistent execution against our priorities,” said Rob Bodor, President and Chief Executive Officer. “For the full year, we generated revenue above $500 million for the first time in our 25-year history, while delivering improved earnings, robust cash flow, and substantial capital returned to shareholders. We are encouraged by our strong finish to 2023, and we believe we have the right strategy and priorities in place to continue our momentum throughout 2024. We remain focused on driving positive global impact, maintaining our industry-leading financial model, and increasing value for our shareholders."

Dan Schumacher, Chief Financial Officer, commented, "Along with record revenue in 2023, we significantly improved profitability in both the digital factory and the digital network. We generated an industry-leading $73 million in cash from operations, and we paid 97% of our free cash flows to shareholders through share repurchases."

First Quarter 2024 Outlook

The Company will continue to provide financial guidance on a quarterly basis due to the quick-turn nature of the business and continued uncertainty in global manufacturing.

For the first quarter of 2024, the Company expects to generate revenue between $120 million and $128 million. This guidance reflects a softer start to 2024, due to December 2023 and early January 2024 order levels being lower than historical periods. However, recent performance has been more in line with historical trends, and our guidance assumes that will continue through the end of March.

The Company expects first quarter 2024 diluted net income per share between $0.09 and $0.17, and non-GAAP diluted net income per share between $0.26 and $0.34. See "Non-GAAP Financial Measures" below.

Non-GAAP Financial Measures

The Company has included non-GAAP revenue growth by region and by service 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 (gain) loss on foreign currency, goodwill impairment and costs related to the Japan closure activities (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 (gain) loss on foreign currency, goodwill impairment and costs related to the Japan closure activities (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 and amortization expense 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, goodwill impairment and costs related to the closure of Japan (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 gross margin excluding Japan, adjusted for stock-based compensation expense and amortization expense in this press release to provide investors with additional information regarding the Company’s financial results. The Company has included non-GAAP operating margin excluding Japan, adjusted for stock-based compensation expense, amortization expense, goodwill impairment and costs related to the Japan closure activities (collectively, “non-GAAP operating margin excluding Japan”), 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, goodwill impairment and costs related to the closure of Japan (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 gross margin, non-GAAP gross margin excluding Japan, non-GAAP operating margin, non-GAAP operating margin excluding Japan, non-GAAP revenue growth by region and by service, 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 and provide useful measures for period-to-period comparisons of the Company’s business. Accordingly, the Company believes that these non-GAAP measures provide useful information to investors and others in understanding and evaluating operating results in the same manner as our management and board of directors.

Conference Call

The Company has scheduled a conference call to discuss its fourth quarter and full year 2023 financial results and first quarter 2024 outlook today, February 9, 2024 at 8:30 a.m. EST. To access the call in the U.S. please dial 877-709-8150 or outside the U.S. dial 201-689-8354 at least five minutes prior to the 8:30 a.m. EST start time. No participant code is required. A simultaneous webcast of the call 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/vyeizwtx/. 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 fastest and most comprehensive digital manufacturing service in the world. Our digital factories produce low-volume parts in days while Protolabs Network unlocks advanced capabilities and volume pricing through its highly vetted manufacturing partners. The result? One manufacturing source—from prototyping to production—for product developers, engineers, and supply chain teams across the globe. See what's next 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.

Proto Labs, Inc. Condensed Consolidated Balance Sheets (In thousands)
	December 31, 2023		December 31, 2022
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	83,790	$	56,558
Short-term marketable securities		19,013		23,568
Accounts receivable, net		72,848		76,225
Inventory		13,657		13,578
Income taxes receivable		2,228		4,042
Prepaid expenses and other current assets		9,124		12,597
Total current assets		200,660		186,568
Property and equipment, net		253,655		257,785
Goodwill		273,991		273,991
Other intangible assets, net		25,584		31,250
Long-term marketable securities		8,019		26,419
Operating lease assets		4,628		3,844
Finance lease assets		960		17,532
Other long-term assets		4,856		4,779
Total assets	$	772,353	$	802,168
Liabilities and shareholders' equity
Current liabilities
Accounts payable	$	15,636	$	17,356
Accrued compensation		15,292		12,743
Accrued liabilities and other		16,872		22,384
Current operating lease liabilities		1,585		1,561
Current finance lease liabilities		296		17,537
Total current liabilities		49,681		71,581
Long-term operating lease liabilities		3,008		2,255
Long-term finance lease liabilities		595		—
Long-term deferred tax liabilities		18,742		26,322
Other long-term liabilities		5,032		4,362
Shareholders' equity		695,295		697,648
Total liabilities and shareholders' equity	$	772,353	$	802,168

Proto Labs, Inc. Condensed Consolidated Statements of Operations (In thousands, except share and per share amounts) (Unaudited)
	Three Months Ended December 31,					Twelve Months Ended December 31,
	2023		2022			2023			2022
Revenue
Injection Molding	$	51,486	$	44,885		$	203,941		$	200,578
CNC Machining		48,905		46,563			198,222			188,372
3D Printing		20,339		19,530			84,291			78,988
Sheet Metal		4,062		4,432			16,540			19,498
Other Revenue		256		197			883			962
Total Revenue		125,048		115,607			503,877			488,398
Cost of revenue		69,236		67,000			281,884			272,933
Gross profit		55,812		48,607			221,993			215,465
Operating expenses
Marketing and sales		21,825		20,517			87,688			82,752
Research and development		9,488		8,906			40,135			38,222
General and administrative		16,075		17,774			65,788			67,544
Goodwill impairment		—		118,008			—			118,008
Closure of Japan business		29		534			215			6,922
Total operating expenses		47,417		165,739			193,826			313,448
Income (loss) from operations		8,395		(117,132	)		28,167			(97,983	)
Other income (loss), net		1,543		429			(215	)		106
Income (loss) before income taxes		9,938		(116,703	)		27,952			(97,877	)
Provision for income taxes		2,948		(1,638	)		10,732			5,585
Net income (loss)	$	6,990	$	(115,065	)	$	17,220		$	(103,462	)
Net income (loss) per share:
Basic	$	0.27	$	(4.24	)	$	0.66		$	(3.77	)
Diluted	$	0.27	$	(4.24	)	$	0.66		$	(3.77	)
Shares used to compute net income (loss) per share:
Basic		25,820,802		27,136,821			26,186,533			27,409,838
Diluted		25,889,004		27,136,821			26,223,498			27,409,838

Proto Labs, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited)
	Twelve Months Ended December 31,
	2023			2022
Operating activities
Net income (loss)	$	17,220		$	(103,462	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		37,528			39,425
Stock-based compensation expense		15,989			17,545
Deferred taxes		(7,656	)		(9,499	)
Interest on finance lease obligations		1,055			—
Loss on impairment of goodwill		—			118,008
Loss on foreign currency translation		3,906			—
Impairments related to closure of Japan business		—			2,842
Gain on disposal of property and equipment		(498	)		(1,211	)
Other		154			35
Changes in operating assets and liabilities		5,576			(1,604	)
Net cash provided by operating activities		73,274			62,079
Investing activities
Purchases of property, equipment and other capital assets		(28,116	)		(21,686	)
Proceeds from sales of property, equipment and other capital assets		699			4,108
Purchases of marketable securities		—			(46,872	)
Purchases of other assets and investments		(1,000	)		—
Proceeds from sales of marketable securities		—			1,998
Proceeds from call redemptions and maturities of marketable securities		23,865			19,360
Net cash used in investing activities		(4,552	)		(43,092	)
Financing activities
Proceeds from exercises of stock options		3,835			3,950
Purchases of shares withheld for tax obligations		(1,436	)		(1,682	)
Repurchases of common stock		(43,951	)		(29,659	)
Principal repayments of finance lease obligations		(306	)		(531	)
Net cash used in financing activities		(41,858	)		(27,922	)
Effect of exchange rate changes on cash and cash equivalents		368			(436	)
Net increase (decrease) in cash and cash equivalents		27,232			(9,371	)
Cash and cash equivalents, beginning of period		56,558			65,929
Cash and cash equivalents, end of period	$	83,790		$	56,558

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 December 31,						Twelve Months Ended December 31,
	2023			2022			2023			2022
Non-GAAP net income (loss), adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency, goodwill impairment and costs related to Japan closure activities
GAAP net income (loss)	$	6,990		$	(115,065	)	$	17,220		$	(103,462	)
Add back:
Stock-based compensation expense		4,178			4,210			15,989			17,545
Amortization expense		1,457			1,514			5,928			6,096
Unrealized (gain) loss on foreign currency		(211	)		(490	)		(125	)		252
Goodwill impairment		—			118,008			—			118,008
Costs related to Japan closure activities		29			534			4,122			6,922
Total adjustments ^1		5,453			123,776			25,914			148,823
Income tax benefits on adjustments ^2		(609	)		(1,753	)		(1,540	)		(4,271	)
Non-GAAP net income	$	11,834		$	6,958		$	41,594		$	41,090
Non-GAAP net income per share:
Basic	$	0.46		$	0.26		$	1.59		$	1.50
Diluted	$	0.46		$	0.26		$	1.59		$	1.50
Shares used to compute non-GAAP net income per share:
Basic		25,820,802			27,136,821			26,186,533			27,409,838
Diluted		25,889,004			27,151,991			26,223,498			27,433,257

1	Stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency, goodwill impairment and costs related to Japan closure activities were included in the following GAAP consolidated statement of operations categories:

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2023			2022			2023		2022
Cost of revenue	$	794		$	840		$	3,210	$	3,541
Marketing and sales		916			816			3,424		3,295
Research and development		669			488			2,557		2,190
General and administrative		3,256			3,580			12,727		14,615
Goodwill impairment		-			118,008			-		118,008
Closure of Japan business		29			534			215		6,922
Total operating expenses		4,870			123,426			18,923		145,030
Other income (loss), net		(211	)		(490	)		3,781		252
Total adjustments	$	5,453		$	123,776		$	25,914	$	148,823

2

For the three and twelve months ended December 31, 2023 and 2022, income tax effects were calculated using the effective tax rate for the relevant jurisdictions. The Company's non-GAAP tax rates differ from its 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 Gross Margin (In thousands) (Unaudited)
	Three Months Ended December 31,						Twelve Months Ended December 31,
	2023			2022			2023			2022
Revenue	$	125,048		$	115,607		$	503,877		$	488,398
Gross profit		55,812			48,607			221,993			215,465
GAAP gross margin		44.6	%		42.0	%		44.1	%		44.1	%
Add back:
Stock-based compensation expense		452			498			1,840			2,172
Amortization expense		342			342			1,370			1,369
Total adjustments		794			840			3,210			3,541
Non-GAAP gross profit	$	56,606		$	49,447		$	225,203		$	219,006
Non-GAAP gross margin		45.3	%		42.8	%		44.7	%		44.8	%

Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Gross Margin Excluding Japan (In thousands) (Unaudited)
	Three Months Ended December 31,						Twelve Months Ended December 31,
	2023			2022			2023			2022
Revenue	$	125,048		$	115,607		$	503,877		$	488,398
Revenue excluding Japan	$	125,048		$	115,607		$	503,877		$	480,169
Gross profit		55,812			48,607			221,993			215,465
GAAP gross margin		44.6	%		42.0	%		44.1	%		44.1	%
Less: Japan gross profit		—			(93	)		—			3,057
Gross Profit excluding Japan		55,812			48,700			221,993			212,408
GAAP gross margin excluding Japan		44.6	%		42.1	%		44.1	%		44.2	%
Add back:
Stock-based compensation expense		452			498			1,840			2,172
Amortization expense		342			342			1,370			1,369
Less:
Japan stock-based compensation expense		—			—			—			61
Japan amortization expense		—			—			—			—
Total adjustments		794			840			3,210			3,480
Non-GAAP gross profit excluding Japan	$	56,606		$	49,540		$	225,203		$	215,888
Non-GAAP gross margin excluding Japan		45.3	%		42.9	%		44.7	%		45.0	%

Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Operating Margin (In thousands) (Unaudited)
	Three Months Ended December 31,						Twelve Months Ended December 31,
	2023			2022			2023			2022
Revenue	$	125,048		$	115,607		$	503,877		$	488,398
Income (loss) from operations		8,395			(117,132	)		28,167			(97,983	)
GAAP operating margin		6.7	%		(101.3	%)		5.6	%		(20.1	%)
Add back:
Stock-based compensation expense		4,178			4,210			15,989			17,545
Amortization expense		1,457			1,514			5,928			6,096
Goodwill impairment		—			118,008			—			118,008
Costs related to Japan closure activities		29			534			215			6,922
Total adjustments		5,664			124,266			22,132			148,571
Non-GAAP income from operations	$	14,059		$	7,134		$	50,299		$	50,588
Non-GAAP operating margin		11.2	%		6.2	%		10.0	%		10.4	%

Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Operating Margin Excluding Japan (In thousands) (Unaudited)
	Three Months Ended December 31,						Twelve Months Ended December 31,
	2023			2022			2023			2022
Revenue	$	125,048		$	115,607		$	503,877		$	488,398
Revenue excluding Japan	$	125,048		$	115,607		$	503,877		$	480,169
Income (loss) from operations		8,395			(117,132	)		28,167			(97,983	)
GAAP operating margin		6.7	%		(101.3	%)		5.6	%		(20.1	%)
Less: Japan (loss) income from operations		(18	)		(594	)		(499	)		(1,424	)
Income from operations excluding Japan		8,413			(116,538	)		28,666			(96,559	)
GAAP operating margin excluding Japan		6.7	%		(100.8	%)		5.7	%		(20.1	%)
Add back:
Stock-based compensation expense		4,178			4,210			15,989			17,545
Amortization expense		1,457			1,514			5,928			6,096
Goodwill impairment		—			118,008			—			118,008
Costs related to Japan closure activities		29			534			215			6,922
Less:
Japan stock-based compensation expense		—			20			17			406
Japan amortization expense		—			—			—			—
Total adjustments		5,664			124,246			22,115			148,165
Non-GAAP income from operations excluding Japan	$	14,077		$	7,708		$	50,781		$	51,606
Non-GAAP operating margin excluding Japan		11.3	%		6.7	%		10.1	%		10.7	%

Proto Labs, Inc. Reconciliation of GAAP Net Income (Loss) to EBITDA and Adjusted EBITDA (In thousands) (Unaudited)
	Three Months Ended December 31,						Twelve Months Ended December 31,
	2023			2022			2023			2022
Revenue	$	125,048		$	115,607		$	503,877		$	488,398
GAAP net income (loss)		6,990			(115,065	)		17,220			(103,462	)
GAAP net income margin		5.6	%		(99.5	%)		3.4	%		(21.2	%)
Add back:
Amortization expense	$	1,457		$	1,514		$	5,928		$	6,096
Depreciation expense		7,858			7,930			31,600			33,329
Interest income, net		(951	)		(509	)		(2,234	)		(968	)
Provision for income taxes		2,948			(1,638	)		10,732			5,585
EBITDA		18,302			(107,768	)		63,246			(59,420	)
EBITDA Margin		14.6	%		(93.2	%)		12.6	%		(12.2	%)
Add back:
Stock-based compensation expense		4,178			4,210			15,989			17,545
Unrealized (gain) loss on foreign currency		(211	)		(490	)		(125	)		252
Goodwill impairment		—			118,008			—			118,008
Costs related to Japan closure activities		29			534			4,122			6,922
Total adjustments		3,996			122,262			19,986			142,727
Adjusted EBITDA	$	22,298		$	14,494		$	83,232		$	83,307
Adjusted EBITDA Margin		17.8	%		12.5	%		16.5	%		17.1	%

Proto Labs, Inc. Comparison of GAAP to Non-GAAP Revenue Growth by Region (In thousands) (Unaudited)
	Three Months Ended December 31, 2023							Three Months Ended December 31, 2022		% Change^2		% Change Organic^3
	GAAP		Foreign Currency^1			Non-GAAP		GAAP
Revenues
United States	$	98,814	$	—		$	98,814	$	92,278	7.1	%	7.1	%
Europe		26,234		(1,144	)		25,090		23,329	12.5	%	7.5	%
Total revenue	$	125,048	$	(1,144	)	$	123,904	$	115,607	8.2	%	7.2	%

	Twelve Months Ended December 31, 2023						Twelve Months Ended December 31, 2022		% Change^2		% Change Organic^3
	GAAP		Foreign Currency^1		Non-GAAP		GAAP
Revenues
United States	$	396,821	$	—	$	396,821	$	387,399	2.4	%	2.4	%
Europe		107,056		167		107,223		92,770	15.4	%	15.6	%
Japan		—		—		—		8,229	(100.0	%)	(100.0	%)
Total revenue	$	503,877	$	167	$	504,044	$	488,398	3.2	%	3.2	%

1	Revenue for the three and twelve months ended December 31, 2023 has been recalculated using 2022 foreign currency exchange rates in effect during comparable periods to provide information useful in evaluating the underlying business trends excluding the impact of changes in foreign currency exchange rates.
2	This column presents the percentage change from GAAP revenue for the three and twelve months ended December 31, 2022 to GAAP revenue for the twelve months ended months ended December 31, 2023.
3	This column presents the percentage change from GAAP revenue for the three and twelve months ended December 31, 2022 to non-GAAP revenue for the three and twelve months ended December 31, 2023 (as recalculated using the foreign currency exchange rates in effect during the three and twelve months ended December 31, 2022) in order to provide a constant-currency comparison.

Proto Labs, Inc. Comparison of GAAP to Non-GAAP Revenue Growth by Service Line (In thousands) (Unaudited)
	Three Months Ended December 31, 2023							Three Months Ended December 31, 2022		% Change^2		% Change Organic^3
	GAAP		Foreign Currency^1			Non-GAAP		GAAP
Revenues
Injection Molding	$	51,486	$	(453	)	$	51,033	$	44,885	14.7	%	13.7	%
CNC Machining		48,905		(395	)		48,510		46,563	5.0		4.2
3D Printing		20,339		(268	)		20,071		19,530	4.1		2.8
Sheet Metal		4,062		(1	)		4,061		4,432	(8.3	)	(8.4	)
Other Revenue		256		(27	)		229		197	29.9		16.2
Total Revenue	$	125,048	$	(1,144	)	$	123,904	$	115,607	8.2	%	7.2	%

	Twelve Months Ended December 31, 2023							Twelve Months Ended December 31, 2022		% Change^2		% Change Organic^3
	GAAP		Foreign Currency^1			Non-GAAP		GAAP
Revenues
Injection Molding	$	203,941	$	328		$	204,269	$	200,578	1.7	%	1.8	%
CNC Machining		198,222		(243	)		197,979		188,372	5.2		5.1
3D Printing		84,291		9			84,300		78,988	6.7		6.7
Sheet Metal		16,540		(10	)		16,530		19,498	(15.2	)	(15.2	)
Other Revenue		883		83			966		962	(8.2	)	0.4
Total Revenue	$	503,877	$	167		$	504,044	$	488,398	3.2	%	3.2	%

1	Revenue for the three and twelve months ended December 31, 2023 has been recalculated using 2022 foreign currency exchange rates in effect during comparable periods to provide information useful in evaluating the underlying business trends excluding the impact of changes in foreign currency exchange rates.
2	This column presents the percentage change from GAAP revenue for the three and twelve months ended December 31, 2022 to GAAP revenue for the three and twelve months ended December 31, 2023.
3	This column presents the percentage change from GAAP revenue for the three and twelve months ended December 31, 2022 to non-GAAP revenue for the three and twelve months ended December 31, 2023 (as recalculated using the foreign currency exchange rates in effect during the three and twelve months ended December 31, 2022) in order to provide a constant-currency comparison.

Proto Labs, Inc. Customer Contact Information (Unaudited)
	Three Months Ended December 31,				Twelve Months Ended December 31,
	2023		2022		2023		2022
Customer contacts		21,879		22,205		53,464		56,333
Revenue per customer contact	$	5,715	$	5,206	$	9,425	$	8,670

Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Guidance (In thousands, except per share and per share amounts) (Unaudited)
	Q1 2024 Outlook
	Low		High
GAAP diluted net income per share	$	0.09		0.17
Add back:
Stock-based compensation expense		0.14		0.14
Amortization expense		0.03		0.03
Unrealized (gain) loss on foreign currency		0.00		0.00
Total adjustments		0.18		0.18
Non-GAAP diluted net income per share	$	0.26	$	0.34