Award winning on demand manufacturing provider Protolabs (NYSE:PRLB) has reported record revenue in its third quarter 2018 financial results. The lastest financial results include a 25% increase in revenue for its segment.
Total revenue for the three months ended September 30, 2018, was $115.4 million, a 31% increase on the same period in 2017, which was $88.1 million. Of that revenue, the segment accounts for $13.8 million in Q3 2018, up from $11.1 million in Q3 2017.
Vicki Holt, President and CEO of Protolabs comments, “We are pleased to deliver another quarter with over 30 percent growth. Protolabs again demonstrated strong performance across all of our geographies and in each of our services. As a result of continued strong operations and growth in each of our individual service offerings, we are becoming more of a total solution for some of our customers,”
“The majority of our top customers have utilized every one of our core services in 2018. With our unique ability to deliver parts at unprecedented speed, we are helping more customers deliver their products to market faster and in new ways.”
Europe drives record 3D printing revenue
Protolabs revenue is reported across five service segments, of which Injection Molding and CNC Machining continue to generate the majority of revenue. For Q3 2018, Injection Molding accounted for $53.6 million in revenue, an increase of 8.4% over the same period in 2017 which turned over $49.5 million. CNC Machining had a revenue of $40.8 million in Q3 2018, compared to $27.2 million for Q3 2017.
Sheet Metal services were recently introduced by the company, and this segment had a revenue of $6.5 million in Q3 2018. A further $607 thousand in revenue for Q3 2018 is listed under “Other.”
| Revenues | Q3 FY2018 | Q3 FY 2017 | Variance $ millions | % |
| Injection Molding | 53,681 | 49,480 | 4,201 | 8.49% |
| CNC Machining | 40,845 | 27,166 | 13,679 | 50.35% |
| "}”> | 13,845 | 11,102 | 2,743 | 24.71% |
| Sheet Metal | 6,452 | – | – | – |
| Other | 607 | 357 | 250 | 70.03% |
| Total revenue | 115,430 | 88,105 | 115,073 | 31.01% |
at Protolabs covers SLA, SLS, Stratasys PolyJet and HP Multi Jet Fusion in polymers, and Concept Laser DMLS for metal additive. Throughout the year, Protolabs has continued to expand its 3D printing services, adding Multi Jet Fusion capabilities to Europe, and introducing metal plating for SLA and SLS 3D printed parts.
Regarding the 25% increase in revenue for , in the Q3 2018 earnings call Holt said that Europe will continue to be a priority area for the company, as “This quarter, we saw significant improvement as Europe was our fastest growing 3D printing region.”
German 3D printing service bureau Alphaform, acquired by Protolabs in 2015, is credited with driving some of this growth, as Holt adds “…we saw improvement in the Alphaform gross margins this quarter – or in Germany really as we look at it.”
Further, responding to a question about the 3D printing market in the U.S. Holt said, “Yeah. I will say that our metal 3D printing business has grown faster than our plastic 3D printing business over this last quarter.”
John A. Way, CFO at Proto Labs, added, “And the same is true in Europe as well as [the] U.S.”
| Revenues | Q3 FY 2018 | Q3 FY2017 | Variance $ millions | % |
| United States | 90,732 | 67,490 | 23,242 | 34.44% |
| Europe | 21,273 | 18,094 | 3,179 | 17.57% |
| Japan | 3,425 | 2,521 | 904 | 35.86% |
| Total Revenue | 115,430 | 88,105 | 27,325 | 31.01% |
Protolabs in 2019
Protolabs’ third quarter financial results follow on from a previous record second quarter for 2018. Within Q3 2018, Protolabs became a founding member of GE Additive’s Manufacturing Partner Network. The results also include revenues from Rapid Manufacturing Group, LLC (RAPID), which was acquired by Protolabs in November 2017.
Other third quarter 2018 highlights for Protolabs include gross margin of 54.1%, compared with 56% third quarter of 2017. During the third quarter 2018, the company generated $25.6 million in cash from operations. The cash and investments balance for the company was $153.4 million at September 30, 2018.
Looking toward 2019, Holt says:
“we continue to expand,”
“As we continue to develop our software and our capabilities, we’ve seen a few things coming out this year as well. They’re not big splashes because they’re expanding our CNC and our injection molding and our 3D printing capabilities. The big new service offering, of course, is sheet metal, which we’ll be having all of our sales team be able to cross-sell that as we go into 2019.”
Full financial results for Protolabs Q3 2018 can be found online here.
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Featured image shows SLS post processing. Photo via Protolabs
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