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What changed in Proto Labs Inc's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Proto Labs Inc's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+224 added−222 removedSource: 10-K (2026-02-20) vs 10-K (2025-02-21)

Top changes in Proto Labs Inc's 2025 10-K

224 paragraphs added · 222 removed · 185 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

62 edited+26 added−12 removed38 unchanged
Biggest changeCustomer Order The customer order process begins when the customer uploads one or more 3D CAD models representing the desired part geometry through our web-based customer interfaces. Our websites provide a straightforward means for our customers to submit 3D CAD part designs, including managing projects with multi-part orders, across multiple services and capabilities.
Biggest changeOur websites provide a straightforward means for our customers to submit 3D CAD part designs, including managing projects with multi-part orders, across multiple services and capabilities. Our proprietary software uses complex algorithms to analyze the 3D CAD geometry, analyze its DFM and support the creation of an interactive, web-based quotation containing pricing and manufacturability information.
Our goal is to be the fastest, most reliable, and most comprehensive provider of custom parts in our four services. Combining our unprecedented in-house manufacturing with the broad capabilities and wide variety of price and lead time options through our manufacturing network expands our ability to provide value to our customers and differentiates us from competitors.
Our goal is to be the fastest, most reliable, and most comprehensive provider of custom parts in our four manufacturing services. Combining our unprecedented in-house manufacturing with the broad capabilities and wide variety of price and lead time options through our manufacturing network expands our ability to provide value to our customers and differentiates us from competitors.
There are an increasing number of digital brokers that offer a network of manufacturers, generally a subset of the other custom parts manufacturers described above, that can offer a diverse range of capabilities, capacity, competitive pricing and desired lead times to meet customer demand. • Captive in-house product manufacturing.
There are an increasing number of digital brokers that offer a network of manufacturers, generally a subset of the other custom parts manufacturers described above, that can offer a diverse range of capabilities, capacity, competitive pricing and desired lead times to meet customer demand. • Captive in-house manufacturing.
In 2024, we again hosted InspirON in Europe, an online knowledge sharing event to focus on what design engineers need to consider when developing sustainable products for manufacturing. The event was designed to provide insight into designing more sustainable products and to explore how design can help make the manufacturing process greener and more efficient.
In 2025, we again hosted InspirON in Europe, an online knowledge sharing event to focus on what design engineers need to consider when developing sustainable products for manufacturing. The event was designed to provide insight into designing more sustainable products and to explore how design can help make the manufacturing process greener and more efficient.
Finally, the Green Team, an employee-led organization, educates our employees on how they can positively impact the environment, 9 Table of Contents both at work and at home. The Green Team also provides opportunities for employees to positively impact the environment, including activities like roadside cleanup and tree planting.
Finally, the Green Team, an employee-led organization, educates our employees on how they can positively impact the environment, 10 Table of Contents both at work and at home. The Green Team also provides opportunities for employees to positively impact the environment, including activities like roadside cleanup and tree planting.
We're successful when we work together, challenge one and other, and make decisions that support our common goals. We are authentic in our interactions. 8 Table of Contents • We are Kind – We are clear with our words and actions. We seek and give thoughtful and constructive feedback delivered with respect.
We're successful when we work together, challenge one and other, and make decisions that support our common goals. We are authentic in our interactions. 9 Table of Contents • We are Kind – We are clear with our words and actions. We seek and give thoughtful and constructive feedback delivered with respect.
Many larger companies undertaking product development have established additive rapid prototyping (3D printing), CNC machining, injection molding or sheet metal capabilities internally to support prototyping or manufacturing requirements of their product developers and engineers.
Many larger companies undertaking product development have established 3D printing, CNC machining, injection molding, or sheet metal capabilities internally to support prototyping or manufacturing requirements of their product developers and engineers.
Kenison served in several leadership roles within the industry, including as Vice President of Manufacturing at Cardiac Science, Inc. - a medical device provider of defibrillator technology. 13 Table of Contents
Kenison served in several leadership roles within the industry, including as Vice President of Manufacturing at Cardiac Science, Inc. - a medical device provider of defibrillator technology. 14 Table of Contents
We support several charitable causes with our Employee Matching, Good Ideas Grants, and Major Gifts Programs. The Foundation’s efforts serve as a sustaining investment in the future of the communities where our employees live and work, and a commitment to build talent to support the future employment needs of the manufacturing industry.
We support several charitable causes with our Employee Matching, Community Grants, and Major Gifts Programs. The Foundation’s efforts serve as a sustaining investment in the future of the communities where our employees live and work, and a commitment to build talent to support the future employment needs of the manufacturing industry.
In 2024, we devoted resources to manage increasing costs of energy, particularly in the European region, and sought opportunities to reduce our consumption of energy resources. We also embraced opportunities to shift our energy consumption to renewable resources.
We have devoted resources to manage increasing costs of energy, particularly in the European region, and sought opportunities to reduce our consumption of energy resources. We also embraced opportunities to shift our energy consumption to renewable resources.
Our customers typically partner with us for a variety of reasons, including: • they need a prototype to confirm the form, fit and function of one or more components of a product under development; • they need an initial supply of parts to support pilot production for testing of a product; • they need an initial supply of parts to support production while their tools for a high-volume production mold are prepared; • they need to meet their customers' variable demand for parts in a competitive timeframe; • their product will only be produced in a limited quantity and/or is highly customized; • they need to support end-of-life production in a cost-effective manner; • they want to avoid minimum order quantities or costs related to storing excess inventory; • they need access to diverse, cost competitive manufacturing capabilities and value the convenience of working with a single supplier to match parts to the best producer; or • they need low- to mid-volumes of parts on an irregular schedule and prefer to order on-demand.
Our customers typically partner with us for a variety of reasons, including: • they need a prototype to confirm the form, fit and function of one or more components of a product under development; • they need an initial supply of parts to support pilot production for testing of a product; • they need an initial supply of parts to support production while their tools for a high-volume production mold are prepared; • they need to meet their customers' variable demand for parts in a competitive timeframe; • they need production parts for a product that will only be produced in a limited quantity and/or is highly customized; • they need to support end-of-life production in a cost-effective manner; • they want to avoid minimum order quantities or costs related to storing excess inventory; • they need access to diverse, cost competitive manufacturing capabilities and value the convenience of working with a single supplier to match parts to the best producer; • they need low- to mid-volumes of parts on an irregular schedule and prefer to order on-demand; or • they want to consolidate vendors (even to one single-source supplier) of custom parts across their engineering and procurement functions.
In each of these instances, we believe our solution provides product developers, engineers, production buyers and other customers with an exceptional combination of speed, quality, competitive pricing, ease of use and reliability that they typically cannot find among conventional custom parts manufacturers or other competitors in our industry.
In each of these instances, we believe our solution provides product developers, engineers, production buyers and other customers with an exceptional combination of speed, quality, competitive pricing, ease of use and reliability that they typically cannot find among conventional custom parts manufacturers, small and mid-sized regional/local manufacturers, or other competitors in our industry.
Since our inception, we have focused on areas where we could automate the manufacturing process via our digital model and we positioned ourselves to avoid routine, low margin, high-volume commoditized manufacturing. Our initial focus was on prototypes and simple parts and have added complexity over time.
Since our inception, we have focused on areas where we could automate the manufacturing process via our digital model and we positioned ourselves to avoid routine, low margin, high-volume commoditized manufacturing. Our initial focus was on prototypes and simple parts and have added complexity over time, as well as adding production to our offer.
We have added product lines and expanded those product lines to meet the needs of our customers, which has ultimately driven our growth. Initially, we focused on speed, reliability and quality as key components of our differentiation, and customers used us for production where there was a good fit.
We have added additional manufacturing services and expanded those services to meet the needs of our customers, which has ultimately driven our growth. Initially, we focused on speed, reliability and quality as key components of our differentiation, and customers used us for production where there was a good fit.
With the addition of the Protolabs Network in 2021, our global network of premium manufacturing partners significantly expands the breadth and depth of our manufacturing capabilities, enabling us to offer customers a wider variety of lead times and pricing options, and an expanded envelope of parts (complexity, size, etc.).
With the addition of the Protolabs Network in 2021, our global network of premium MPs significantly expands the breadth and depth of our manufacturing capabilities, enabling us to offer customers a wider variety of lead times and pricing options, and an expanded envelope of parts (manufacturing process, complexity, size, material, finishing options, etc.).
Through the acquisition of Hubs (formerly 3D Hubs, Inc.) (Hubs) in 2021, we provide our customers access to a global network of premium manufacturing partners who reside across North America, Europe and Asia.
Through the acquisition of Hubs (formerly 3D Hubs, Inc., recently rebranded to Protolabs Network) in 2021, we provide customers access to a global network of premium manufacturing partners who reside across North America, Europe and Asia.
All overtime is performed and compensated in accordance with the law and the individual’s employment contract or other applicable contract or collective agreement. • Education We firmly believe that investing in the education of our employees is critical to our success.
Overtime is performed and compensated in accordance with applicable law and the terms of the individual’s employment contract or other applicable contract or agreement. • Education We believe that investing in the education of our employees is critical to our success.
Competition The market for custom parts manufacturing is fragmented, highly competitive and subject to rapid and significant technological change. Our potential competitors include: • Other custom parts manufacturers. There are thousands of alternative manufacturing machine shops, injection molding suppliers, sheet metal fabricators, and 3D printing service bureaus and vendors worldwide.
Competition The domestic and global markets for custom parts manufacturing are highly fragmented and subject to rapid and significant technological change. Our potential competitors include: • Other custom parts manufacturers. There are thousands of alternative manufacturing machine shops, injection molding suppliers, sheet metal fabricators, and 3D printing service bureaus and vendors worldwide.
Through our factories, we manufacture prototype and low volume production parts for companies worldwide, who are under increasing pressure to bring their finished products to market faster than their competition. We utilize injection molding, computer numerical control (CNC) machining, 3D printing and sheet metal fabrication to manufacture custom parts for our customers.
Through our Factory operations, we manufacture prototype and low volume production parts for companies worldwide, who are under increasing pressure to bring their finished products to market faster than their competition. We utilize injection molding, CNC machining, 3D printing and sheet metal fabrication to manufacture custom parts for our customers.
Since our inception, we have manufactured over 617 million parts for customers. For most of our offerings, our proprietary technology eliminates most of the time-consuming and expensive skilled labor conventionally required to quote and manufacture parts. Using our technology, we have analyzed over 16 million unique part designs since inception.
For most of our offerings, our proprietary technology eliminates most of the time-consuming and expensive skilled labor conventionally required to quote and manufacture parts. Using our technology, we have analyzed over 18 million unique part designs since inception.
Our digital thread makes us ideally suited to solve these challenges for many manufacturing companies by offering world-class speed, low upfront investment, no minimum order quantities, broad manufacturing capabilities, and flexibility to adapt to demand volatility.
Protolabs’ digital thread makes us ideally suited to solve these challenges for many manufacturing companies by offering world‑class speed, no minimum order quantities, broad manufacturing capabilities, and flexibility to adapt to demand volatility.
We believe that our employees are our most valuable asset, and their safety and health is among our top priorities. In addition to concentrating on employee safety in the workplace, we also focus on the overall wellbeing of our employees.
We believe this program is the basis for our excellent safety compliance record. We believe that our employees are our most valuable asset, and their safety and health is among our top priorities. In addition to concentrating on employee safety in the workplace, we also focus on the overall wellbeing of our employees.
We register our patents, trademarks and service marks in the United States and other jurisdictions as we deem 11 Table of Contents appropriate.
We register our patents, trademarks and service marks in the United States and other jurisdictions as we deem appropriate.
We believe that the key competitive factors in our industry include: • Quality: dimensional accuracy, surface finish, color and cleanliness; • Speed: turnaround time for quotations and parts; • Reliability: highly reliable delivery with predictable lead times; • Service: overall customer experience, from web interface to post-sales support; • Capability: range of part sizes and dimensional complexities supported, variety of manufacturing processes offered, materials supported and post-processing provided; • Scale: ability to support thousands of part designs in parallel; • Capacity: ability to manage peaks in demand with very short lead times and no minimum order quantities; and • Price: competitive mold and part pricing, including total cost of ownership.
We believe that the key competitive factors in our industry include: • Speed: turnaround time for quotations and parts; • Reliability: reliable delivery and predictable lead times; • Quality: dimensional accuracy, surface finish, color and cleanliness; • Service: overall customer experience, from web interface to post-sales support; • Capability: range of part sizes and dimensional complexities/tolerances supported, variety of manufacturing processes offered, materials supported and post-processing provided; • Scale: ability to support thousands of part designs in parallel and increase production volumes while maintaining efficiency, quality, and cost-effectiveness; • Capacity: ability to manage peaks in demand with no or very little disruption to lead times and quality, no minimum order quantity requirements; and • Price: competitive part pricing, considering total cost of ownership.
We also believe that there are a multitude of factors that are valuable to our customers that our offer uniquely provides, including speed to market, supply chain stability, access to a broad range of 5 Table of Contents manufacturing capabilities, reduced supply chain waste, and efficient sourcing of custom parts.
We also believe that there are a multitude of factors that are valuable to our customers that our offer uniquely provides, including speed to market, supply chain flexibility, access to a broad range of manufacturing capabilities and price & lead time options, reduced supply chain waste, and efficient sourcing of custom parts.
Our employees are provided access to a robust learning management system that offers hundreds of courses on various topics ranging from compliance to leadership to job-specific skills. In 2024 and 2023, employees spent an average of 35 hours per employee in training sessions.
We provide our employees with access to a robust learning management system that offers hundreds of courses on various topics ranging from compliance to leadership to job-specific skills. In 2025 , employees spent an average of 35 hours per employee in training sessions.
In 2024, we updated our value statements to: We are one Team, We are Kind, We are Makers, We Win or We Learn and We Take Ownership.
Our value statements are: We are one Team, We are Kind, We are Makers, We Win or We Learn and We Take Ownership.
As of December 31, 2024, we owned and had applications pending for patents relating to various aspects of our quoting and manufacturing processes as follows: Jurisdiction Issued Patents Applications Pending United States 56 10 United Kingdom 3 0 Netherlands 1 0 Our patents have expiration dates ranging from 2025 to 2044.
As of December 31, 2025, we owned and had applications pending for patents relating to various aspects of our quoting and manufacturing processes as follows: Jurisdiction Issued Patents Applications Pending United States 60 6 United Kingdom 3 0 Netherlands 1 0 European Union 0 3 Our patents have expiration dates ranging from 2026 to 2045.
We also owned approximately 26 registered United States trademarks or service marks as of December 31, 2024, with corresponding registered protection in Europe and Japan for the most important of these marks such as PROTO LABS, HUBS, PROTOMOLD, FIRSTCUT, PROTOQUOTE, FIRSTQUOTE, PROTOFLOW and FINELINE, corresponding approved protection in Canada for PROTO LABS, FIRSTCUT and FINELINE, and corresponding registered protection in Australia, Canada and Mexico for PROTOMOLD.
We also owned approximately 17 registered United States trademarks or service marks as of December 31, 2025, with corresponding registered protection in Europe for the most important of these marks such as PROTO LABS, HUBS, PROTOLABS NETWORK, FIRSTCUT, PROTOMOLD, PROTOQUOTE, MANUFACTURING ACCELERATED, PROTOFLOW, MICROFINE and MICROFINE GREEN, corresponding approved protection in Canada for PROTO LABS, FIRSTCUT and FINELINE, and corresponding registered protection in Australia, Canada and Mexico for PROTOMOLD.
Intellectual Property We regard our patents, trademarks, service marks, trade dress, trade secrets, copyrights, domain names and other intellectual property as valuable to our business and rely on patent, trademark and copyright law, trade secret protection and confidentiality and/or license agreements with our employees, customers, vendors and others to protect our proprietary rights.
Our full policy is available on the Investor Relations section of our website. 12 Table of Contents Intellectual Property We regard our patents, trademarks, service marks, trade dress, trade secrets, copyrights, domain names and other intellectual property as valuable to our business and rely on patent, trademark and copyright law, trade secret protection and confidentiality and/or license agreements with our employees, customers, vendors and others to protect our proprietary rights.
Our technology enables us to ship parts not only with industry-leading speed as soon as the same day after receipt of a customer’s design submission, but also provides the flexibility to produce for our customers custom parts in the manufacturing processes and materials they want, with the flexible lead time they choose, at competitive prices.
Our technology enables us to ship parts not only with industry-leading speed as soon as the same day after receipt of a customer’s design submission, but also provides the flexibility to produce for our customers custom parts in the manufacturing processes and materials they want, with the flexible lead time they choose, at competitive prices. 6 Table of Contents Our primary manufacturing service lines are Injection Molding, CNC Machining, 3D Printing, and Sheet Metal.
We have established a Vendor Code of Conduct Policy, including guidance on anti-bribery, privacy, and data protection; responsible sourcing of materials; environmental standards; labor and human rights and anti-tax evasion. Our full policy is available on the Investor Relations section of our website.
We have established a Vendor Code of Conduct Policy, including guidance on anti-bribery, privacy, and data protection; responsible sourcing of materials; environmental standards; labor and human rights and anti-tax evasion.
We strive to be the partner of choice for our customers, to meet them in their times of need with a vast array of manufacturing solutions.
We strive to be the partner of choice for our customers, with a vast array of manufacturing solutions.
We have further expanded our offering through the 7 Table of Contents Protolabs Network to be able to serve our customers more holistically, augmenting our in-house manufacturing capabilities with a network of premium manufacturing partners to serve our customer needs that currently reside outside of our internal manufacturing capabilities.
We have further expanded our offering through Protolabs Network to be able to serve our customers more holistically, augmenting our Factory manufacturing capabilities with a network of premium manufacturing partners to serve customer needs outside of our internal manufacturing capabilities.
Through our Foundation and employee led community involvement team, a wide variety of charitable activities are organized, including blood drives, working for Habitat for Humanity projects, volunteering for Feed My Starving Children, and making financial contributions to charitable causes, many of which are matched through the Protolabs Foundation Employee Giving Program.
Through our Foundation and employee led community involvement team, a wide variety of charitable activities are organized, including supporting Girls Who Code, packing meal boxes for Matter Box, and volunteering for Feed My Starving Children, and making financial contributions to charitable causes, many of which are matched through the Protolabs Foundation Employee Giving Program.
Item 1. Business Overview Proto Labs, Inc. was incorporated in Minnesota in 1999. The terms “Proto Labs,” the “Company,” “we,” “us,” and “our” as used herein refer to the business and operations of Proto Labs, Inc. and its subsidiaries. We are one of the world’s largest, fastest, and most comprehensive digital manufacturers of custom parts.
Item 1. Business Overview Proto Labs, Inc. was incorporated in Minnesota in 1999. The terms “Proto Labs,” "Protolabs," the “Company,” “we,” “us,” and “our” as used herein refer to the business and operations of Proto Labs, Inc. and its subsidiaries.
We are committed to providing comprehensive benefits plans including, but not limited to, paid leave, retirement savings, health benefits, dental benefits, maternity leave, parental leave, family care leave, and childcare benefits.
Our benefits programs include, but are not limited to, paid leave, retirement savings plans, health and dental coverage, and family related benefits including maternity , parental, family care, and childcare benefits.
When the analysis is complete, a link to the quotation is then e-mailed to the customer, who can access the quotation, change a variety of order parameters, and instantly see the effect on price before finalizing the order.
The artificial intelligence and machine learning provided by each analysis allows us to continually improve our DFM technology. When the analysis is complete, a link to the quotation is then e-mailed to the customer, who can access the quotation, change a variety of order parameters, and instantly see the effect on price before finalizing the order.
Social • Leadership In 2024, our global human resources leadership advanced our initiatives to identify untapped talent as we continue to integrate operations of the factory and network. This work includes engaging employees throughout the global organization to define our values and culture, which we deployed in 2024.
Social • Leadership In 2025, our global human resources leadership advanced our initiatives to identify untapped talent as we continue to integrate operations of the factory and network. This work includes engaging employees throughout the global organization and rewarding those who are living our values through quarterly recognition of individuals and teams.
We create time for our customers by providing an efficient way for them to procure high-quality custom parts at competitive prices. We believe prototype and low volume custom parts manufacturing has historically been an underserved market due to the inefficiencies inherent in the quotation, equipment set-up and non-recurring engineering processes required to produce custom parts.
We believe low-volume custom parts manufacturing has historically been an underserved market due to the inefficiencies inherent in the quotation, equipment set-up and non-recurring engineering processes required to produce custom parts.
There are no family relationships between or among any of the executive officers or directors of the Company. There are no arrangements or understandings between any of the executive officers and any other persons pursuant to which they were selected as an officer. Robert Bodor . Dr. Bodor has served as our President and Chief Executive Officer since March 2021.
There are no family relationships between or among any of the executive officers or directors of the Company. There are no arrangements or 13 Table of Contents understandings between any of the executive officers and any other persons pursuant to which they were selected as an officer. Suresh Krishna . Mr.
The manufacturing partner network, complements our in-house manufacturing, enabling us to significantly increase the size, complexity, breadth of manufacturing processes, lead times and prices of the parts we produce. In January 2024, we rebranded Hubs to the Protolabs Network by Hubs (Protolabs Network). Our customers conduct nearly all their business with us over the Internet.
The manufacturing partner network, complements our in-house manufacturing, enabling us to significantly increase the size, complexity, breadth of manufacturing processes, lead times and prices of the parts we produce.
Digital manufacturing, and the addition of the digital thread, results in automation that reduces manufacturing and labor costs and increases throughput, enabling us to differentiate ourselves as one of the world’s fastest and most effective solutions for prototype and low volume production use cases.
Digital manufacturing, and the addition of the digital thread, results in automation that reduces manufacturing and labor costs and increases throughput, enabling us to differentiate ourselves as one of the world’s fastest and most effective solutions for prototype and low volume production use cases. 7 Table of Contents Our technology allows us to manufacture a broad range of parts and products, across multiple industries and processes and enables us to serve a diverse set of customers.
Schumacher served as our Interim Chief Financial Officer since December 2021. Mr. Schumacher also led investor communication, forecasting and planning, and business intelligence for the Company as Vice President of Investor Relations and FP&A from April 2017 to December 2021. From 2015 to 2017, Mr.
Schumacher also led investor communication, forecasting and planning, and business intelligence for the Company as Vice President of Investor Relations and FP&A from April 2017 to December 2021. From 2015 to 2017, Mr. Schumacher served as finance director in the Americas Finance & Operations organization of Stratasys, Inc, a 3D Printing OEM. From 2001 to 2015, Mr.
The size and scale of these businesses range from very small specialty shops to large, high-volume production manufacturers. • Brokers.
While most of these manufacturers are local and regional small and mid-sized businesses, they range from very small specialty shops to large, high-volume production manufacturers. • Brokers.
We believe our use of advanced technology enables us to offer significant advantages at competitive prices to many customers and is the primary reason we have become a leading supplier of custom parts. We have established our operations in the United States and Europe.
We serve over 48,000 customers annually, ranging from the largest and most innovative organizations in the world, to entrepreneurs and small business owners. We believe our use of advanced technology enables us to offer significant advantages at competitive prices to many customers and is the primary reason we have become a leading supplier of custom parts.
Name Age Position Robert Bodor 52 President, Chief Executive Officer and Director Daniel Schumacher 50 Chief Financial Officer Oleg Ryaboy 49 Chief Technology Officer Michael R. Kenison 53 Chief Operations Officer Executive officers of the Company are elected at the discretion of the board of directors with no fixed terms.
Name Age Position Suresh Krishna 57 President, Chief Executive Officer and Director Daniel Schumacher 51 Chief Financial Officer Marc Kermisch 52 Chief Technology & AI Officer Michael R. Kenison 54 Chief Operations Officer Executive officers of the Company are elected at the discretion of the board of directors.
Our technology-enabled digital engineering and manufacturing applications enable us to produce commercial-grade plastic, metal, and liquid silicone rubber parts in as fast as one day. Our customers engage with us throughout the lifecycle of their product, from early-stage prototyping through end-use production to end-of-life replacement and other parts needs that we fulfill through a combination of factories and manufacturing partners.
Our customers engage with us throughout the lifecycle of their product, from early-stage prototyping through end-use production to end-of-life replacement and other parts needs that we fulfill through a combination of factories and MPs.
Through the Protolabs Foundation, we provide STEM education grants to eligible organizations. In addition, we partner with schools, colleges, and universities to provide various outreach opportunities and sponsorships. • Health, Safety and Wellness We are committed to providing a safe and healthy working environment that minimizes health and safety risks.
In addition, we partner with schools, colleges, and universities to provide various outreach opportunities and sponsorships. • Health, Safety and Wellness We are committed to providing a safe and healthy working environment that minimizes health and safety risks. Our processes support accident prevention and prioritizes the health and safety of all our employees and all others affected by their activities.
From the time they upload their design, we maintain a continuous digital thread of the part, which enables us to be nimble and adapt to the changing needs of our customer.
From the time they upload their design, we maintain a continuous digital thread of the part, which enables us to be nimble and adapt to the changing needs of our customer. We believe there are trends disrupting the manufacturing industry today, including: • Labor Shortages – Ongoing workforce shortages in manufacturing are accelerating investment in automation and smart-factory technologies.
On October 21, 2024, the Company's board of directors approved a plan related to the Company's manufacturing facilities in Germany. The plan includes the closure of the Company's prototype injection molding manufacturing facility in Eschenlohe, Germany, and the discontinuation of Direct Metal Laser Sintering 3D printing services through its 3D printing facility in Putzbrunn, Germany.
The plan included the closure of the Company's prototype injection molding manufacturing facility in Eschenlohe, Germany, and the discontinuation of Direct Metal Laser Sintering 3D printing services through its 3D printing facility in Putzbrunn, Germany. The Company substantially completed the plan in the fourth quarter of 2025.
We also regularly use independent contractors and other temporary employees across the organization to augment our regular staff. We believe that our future success will depend in part on our continued ability to attract, hire and retain qualified, diverse and inclusive personnel. We believe our employees are critical to our success and continually seek employee feedback to enhance employee engagement.
We believe that our future success will depend in part on our continued ability to attract, hire and retain qualified personnel. We believe our employees are critical to our success and continually seek employee feedback to enhance employee engagement. In 2025 our attrition rates were 13.6% in both the United States and Europe.
We strive to continuously improve our employees’ health, safety, and wellness. Our “I Am” safety program teaches that safety is the responsibility of every individual in our organization. We believe this program is the basis for our excellent safety compliance record.
We provide and require our employees to use personal protective equipment at all times. To ensure our employees understand the importance of safety, we provide regular, mandatory training. We strive to continuously improve our employees’ health, safety, and wellness. Our “I Am” safety program teaches that safety is the responsibility of every individual in our organization.
We also award long-term equity-based compensation to high performing employees and managers who have the greatest impact on the creation of shareholder value to further align the interests of our employees and shareholders. We provide employee benefits that meet or exceed the requirements of local law.
Annually, our executive leadership team reviews recommendations form managers regarding compensation levels based on an employee’s job performance, skills, experience, qualifications, and role within the organization. We also award long-term equity-based compensation to certain high performing employees and managers whose roles have significant impact on the creation of shareholder value. We provide employee benefits that meet or exceed legal requirements.
Schumacher served as finance director in the Americas Finance & Operations organization of Stratasys, Inc, a 3D Printing OEM. From 2001 to 2015, Mr. Schumacher was in finance leadership roles of increasing responsibility for Rockwell Automation, an industrial automation company. Oleg Ryaboy . Mr. Ryaboy has served as our Chief Technology Officer since September 2022.
Schumacher was in finance leadership roles of increasing responsibility for Rockwell Automation, an industrial automation company. Marc Kermisch . Mr. Kermisch has served as our Chief Technology & AI Officer since October 2025. Prior to joining Proto Labs, Mr.
In determining employee compensation, our executive leadership team reviews and considers several factors, including individual and corporate performance, input from managers, competitive market data from third party compensation surveys, our compensation philosophy and key principles, and the leadership’s collective experience and knowledge.
To support this objective, we maintain a competitive compensation program designed to align employee performance with company results. In determining employee compensation, our executive leadership team considers a number of factors, including individual and company performance, manager input, competitive market data from third party compensation surveys, our compensation philosophy and leadership experience.
Our vision is accelerating innovation by revolutionizing manufacturing. Our mission is to empower companies to bring new ideas to market by offering the fastest and most comprehensive digital manufacturing service in the world. We accomplish this by offering a variety of manufacturing capabilities fulfilled through a combination of owned manufacturing factories and a worldwide network of premium manufacturing partners.
We accomplish this by offering a variety of manufacturing capabilities fulfilled through a combination of owned manufacturing factories ("Factory") and a worldwide network of premium manufacturing partners ("Network").
In 2024, we completed the second year of our mentorship program to provide opportunity for mentors and mentees to accelerate their personal and professional development through a one-on-one guided relationship. 10 Table of Contents To ensure our industry remains robust, we are committed to supporting Science, Technology, Engineering and Mathematics (STEM) programs in the cities where we have facilities.
The program provides training on topics that are aligned with our Leadership Principles and our Core Values. In 2025, we completed the third year of our 11 Table of Contents mentorship program to provide opportunities for mentors and mentees to accelerate their personal and professional development through a one-on-one guided relationship.
Prior to joining Proto Labs, from January 2011 to December 2012, Dr. Bodor held several roles at Honeywell, most recently leading SaaS business offerings for Honeywell’s Life Safety Division. Daniel Schumacher . Mr. Schumacher has served as our Chief Financial Officer and principal financial and accounting officer since June 2022. Prior to his current role, Mr.
Krishna held operations and leadership roles at companies such as Sleep Number Corporation, Polaris Industries and UTC Fire & Security. Daniel Schumacher . Mr. Schumacher has served as our Chief Financial Officer and principal financial and accounting officer since June 2022. Prior to his current role, Mr. Schumacher served as our Interim Chief Financial Officer since December 2021. Mr.
The Company expects to substantially complete the plan within fiscal year 2025. The Company intends to continue offering all of its manufacturing services to customers across Europe, including injection molding and metal 3D printing. These services will be fulfilled through internal manufacturing facilities and a network of manufacturing partners. Previously, we had established operations in Japan.
The Company continues to offer all of its manufacturing services to customers across Europe, including injection molding and metal 3D printing through internal manufacturing facilities and a network of manufacturing partners. We help customers accelerate product development and innovation by providing an efficient way for them to procure high-quality custom parts at competitive prices.
We periodically conduct employee engagement surveys to identify and drive improvements in the Protolabs work place where employees are engaged and can do their best work. • Workforce Demographics As of December 31, 2024, we had 2,357 full-time employees, including 1,643 full-time employees in the United States and 714 full-time employees in Europe.
We periodically conduct employee engagement surveys to identify and drive improvements in the Protolabs workplace where employee feedback is used to drive action plans to create an environment where our employees can do their best work. We strive to create a culture of accountability, ethical conduct, and operational excellence.
Our technology allows us to manufacture a broad range of parts and products, across multiple industries and processes and enables us to serve a diverse set of customers. We currently serve all manufacturing industry verticals, with our top industries being medical and healthcare, computer electronics, industrial machinery and equipment, aerospace and automotive.
We currently serve all manufacturing industry verticals, with our top industries being medical and healthcare, computer electronics, industrial machinery and equipment, aerospace and automotive. Customer Order The customer order process begins when the customer uploads one or more 3D CAD models representing the desired part geometry through our web-based customer interfaces.
Removed
On May 27, 2022, the Company's board of directors approved a plan for the closure of the Company's manufacturing facility in Japan and announced an intention to cease operations in the region. The Company dissolved its Japan operations in December 2023.
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We are 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.
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Our primary manufacturing product lines currently include Injection Molding, CNC Machining, 3D Printing and Sheet Metal.
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Founded in 1999, we radically reduced the time needed to produce injection molding prototypes through complex software that automated the manufacturing process. Over the next two decades, we added computer numerical control ("CNC") machining, 3D printing, and sheet metal fabrication, and later acquired 3D Hubs, Inc ("Hubs") and launched the Protolabs Network, our global network of manufacturing partners (“MPs”).
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We believe there are three significant trends disrupting the manufacturing industry today: • SKU Proliferation – The increase in the number of products launched has been dramatic across many sectors. • Shorter Product Life Cycles – New products are launching faster and more frequently than ever before, partially driven by the "internet of things" and other connected device trends, resulting in shorter lives in the market. • Shift to E-commerce Sourcing – The first two trends, SKU proliferation and shorter product life cycles, put pressure on traditional supply chains causing many to adopt digital solutions and begin to invest in digital supply ecosystems. 6 Table of Contents The impacts of these trends include increased volatility, reduced development time, increased variety to manage, higher pressure on development costs, shorter payback period in the market and reduced capital investment per product.
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Our 25+ years of growth while expanding capabilities provide customers with the best digital manufacturing experience in the industry. Our vision is accelerating innovation by revolutionizing manufacturing. Our mission is to shape the future by bringing customer ideas to life across every stage of the product life cycle.
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Our proprietary software uses complex algorithms to analyze the 3D CAD geometry, analyze its DFM and support the creation of an interactive, web-based quotation containing pricing and manufacturability information. The artificial intelligence and machine learning provided by each analysis allows us to continually improve our DFM technology.
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Protolabs uses artificial intelligence (“AI”) in a number of different ways to improve our efficiency and the value we offer to customers, including: intelligent pricing and sourcing algorithms, automated quality inspection in injection molding, toolpath verification in CNC machining, software development, and various other AI end use cases.
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In 2024, our attrition rates were 12.2% and 12.9% in the United States and Europe, respectively, a decline from 2023.
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In the age of AI, we are well-positioned with our long history of leveraging technology to solve legacy manufacturing challenges and are deploying AI to power how we drive innovation to better serve our customers. AI is enabling us to move faster than ever before and continue to scale our business efficiently.
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Our 2024 attrition rates were impacted by actions we took during the year to reduce our workforce in areas of the business that experienced lower volumes. • Compensation and Benefits We believe our success depends in large measure on our ability to attract, retain and motivate a broad range of employees to be successful in a dynamic and changing business environment, and that a competitive compensation program is essential.
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Our highly differentiated manufacturing offerings are backed by an intellectual property portfolio of 60 patents, and over 60 additional trade secrets. Our patents are in the areas of methods of manufacturing (both subtractive and additive), software supporting methods of manufacturing, and pricing of parts.
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Annually, our executive leadership team reviews input from managers throughout our organization, including recommendations as to compensation levels that the managers believe are commensurate with an individual’s job performance, skills, experience, qualifications, criticality to our company and development/career opportunities.
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Our technology-enabled digital engineering and manufacturing applications enable us to produce commercial-grade prototype and production plastic, metal, and liquid silicone rubber parts in as fast as one day. Since our inception, we have manufactured over 700 million parts, and served over 300,000 customers, including 95% of Fortune 100 companies in key industries.
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The program provides training on topics that are aligned with our Leadership Principles and our Core Values.
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Our hybrid manufacturing model (Factory and Network) integrates the speed, quality, and reliability of our in‑house manufacturing capabilities with the expanded capacity, specialized processes, and broader price and lead‑time flexibility offered by our MP network.
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Our processes support accident prevention and prioritizes the health and safety of all our employees and all others affected by their activities. We provide and require our employees to use personal protective equipment at all times. To ensure our employees understand the importance of safety, we provide regular, mandatory training.
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This combined model enhances the value we deliver to customers and serves as a meaningful competitive differentiator in the digital manufacturing market. 5 Table of Contents Our customers conduct nearly all their business with us over the Internet.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSuch transactions may be complex, time consuming and expensive, and may present numerous challenges and risks including: • an acquired company, asset or technology not furthering our business strategy as anticipated; • difficulties entering and competing in new product or geographic markets and increased competition, including price competition; • integration challenges; • challenges in working with strategic partners and resolving any related disagreements or disputes; • high valuation for a company, asset or technology, or changes in the economic or market conditions or assumptions underlying our decision to acquire; • significant problems or liabilities associated with acquired businesses, assets or technologies, including increased intellectual property and employment related litigation exposure; • an acquisition that results in a significant amount of goodwill being recognized, which could result in future impairment charges that would reduce our earnings; and • requirements to record substantial charges and amortization expenses related to certain purchased intangible assets, deferred stock compensation and other items, as well as other charges or expenses. 18 Table of Contents Any one of these challenges or risks could impair our ability to realize any benefit from our acquisitions, strategic relationships, joint ventures or investments after we have expended resources on them, as well as divert our management’s attention.
Biggest changeSuch transactions may be complex, time consuming and expensive, and may present numerous challenges and risks including: • an acquired company, asset or technology not furthering our business strategy as anticipated; • difficulties entering and competing in new product or geographic markets and increased competition, including price competition; • integration challenges; • retaining key talent; • challenges in working with strategic partners and resolving any related disagreements or disputes; • high valuation for a company, asset or technology, or changes in the economic or market conditions or assumptions underlying our decision to acquire; • significant problems or liabilities associated with acquired businesses, assets or technologies, including increased intellectual property and employment related litigation exposure; • an acquisition that results in a significant amount of goodwill being recognized, which could result in future impairment charges that would reduce our earnings; and 19 Table of Contents • requirements to record substantial charges and amortization expenses related to certain purchased intangible assets, deferred stock compensation and other items, as well as other charges or expenses.
Many of the following factors have adversely affected our international operations and sales to customers located outside of the United States and may again in the future: • difficulties in staffing and managing foreign operations, particularly in new geographic locations; • challenges in providing solutions across a significant distance, in different languages and among different cultures; • rapid changes in government, economic and political policies and conditions, political or civil unrest or instability, terrorism or epidemics, and other similar outbreaks or events; • fluctuations in foreign currency exchange rates; 16 Table of Contents • compliance with and changes in foreign laws and regulations, as well as U.S. laws affecting the activities of U.S. companies abroad, including those associated with export controls, tariffs and embargoes, other trade restrictions and antitrust and data privacy concerns; • different, complex and changing laws governing intellectual property rights, sometimes affording companies lesser protection in certain areas; • seasonal reductions in business activity in certain parts of the world, particularly during the summer months in Europe and holiday season; • higher costs of doing business internationally; • interruptions resulting from any events affecting raw material supply or manufacturing capabilities abroad; • protectionist laws and business practices that favor local producers and service providers; • taxation; • energy costs; • restrictions imposed by local labor practices and laws on our business and operations; • workforce uncertainty in countries where labor unrest is more common than in the United States; • transportation delays; and • increased payment risk and higher levels of payment fraud.
Many of the following factors have adversely affected our international operations and sales to customers located outside of the United States and may again in the future: • difficulties in staffing and managing foreign operations, particularly in new geographic locations; • challenges in providing solutions across a significant distance, in different languages and among different cultures; • rapid changes in government, economic and political policies and conditions, political or civil unrest or instability, terrorism or epidemics, and other similar outbreaks or events; • fluctuations in foreign currency exchange rates; 17 Table of Contents • compliance with and changes in foreign laws and regulations, as well as U.S. laws affecting the activities of U.S. companies abroad, including those associated with export controls, tariffs and embargoes, other trade restrictions and antitrust and data privacy concerns; • different, complex and changing laws governing intellectual property rights, sometimes affording companies lesser protection in certain areas; • seasonal reductions in business activity in certain parts of the world, particularly during the summer months in Europe and holiday season; • higher costs of doing business internationally; • interruptions resulting from any events affecting raw material supply or manufacturing capabilities abroad; • protectionist laws and business practices that favor local producers and service providers; • taxation; • energy costs; • restrictions imposed by local labor practices and laws on our business and operations; • workforce uncertainty in countries where labor unrest is more common than in the United States; • transportation delays; and • increased payment risk and higher levels of payment fraud.
Moreover, the business interruption insurance that we carry may not be sufficient to compensate us for the potentially significant losses, including the potential harm to the future growth of our business that may result from interruptions in our product lines as a result of system failures. 15 Table of Contents We store confidential customer information in our systems that, if breached or otherwise subjected to unauthorized access, may harm our reputation or brand or expose us to liability.
Moreover, the business interruption insurance that we carry may not be sufficient to compensate us for the potentially significant losses, including the potential harm to the future growth of our business that may result from interruptions in our product lines as a result of system failures. 16 Table of Contents We store confidential customer information in our systems that, if breached or otherwise subjected to unauthorized access, may harm our reputation or brand or expose us to liability.
Any failure in our ability to timely and effectively scale and adapt our existing technology, processes and infrastructure could negatively impact our ability to retain existing customers and attract new customers, damage our reputation and brand, result in lost revenue, and otherwise substantially harm our business and results of operations. 14 Table of Contents Numerous factors may cause us not to maintain the revenue growth that we have historically experienced.
Any failure in our ability to timely and effectively scale and adapt our existing technology, processes and infrastructure could negatively impact our ability to retain existing customers and attract new customers, damage our reputation and brand, result in lost revenue, and otherwise substantially harm our business and results of operations. 15 Table of Contents Numerous factors may cause us not to maintain the revenue growth that we have historically experienced.
The ISO standards to which we comply include the following: Location 9001:2015 AS9100D 14001:2015 45001:2018 Headquarters, Minnesota, USA Yes Yes No No Injection Molding, Minnesota, USA Yes No No No CNC Machining, Minnesota, USA Yes Yes No No 3D Printing, North Carolina, USA Yes Yes No No Sheet Metal, New Hampshire, USA Yes No No No CNC Machining, New Hampshire, USA Yes Yes No No Putzbrunn, DE Yes No Yes No Eschenlohe, DE Yes No No No Telford, UK Yes No Yes Yes Protolabs Network, Chicago, USA and Amsterdam, NL Yes No No No If any system inspection reveals that we are not in compliance with applicable standards, registrars may take action against us, including issuing a corrective action request or discontinuing our certifications.
The ISO standards to which we comply include the following: Location 9001:2015 AS9100D 13485:2016 14001:2015 45001:2018 Headquarters, Minnesota, USA Yes Yes No No No Injection Molding, Minnesota, USA Yes No No No No CNC Machining, Minnesota, USA Yes Yes No No No 3D Printing, North Carolina, USA Yes Yes Yes No No Sheet Metal, New Hampshire, USA Yes No No No No CNC Machining, New Hampshire, USA Yes Yes No No No Putzbrunn, DE Yes No No Yes No Telford, UK Yes No No Yes Yes Protolabs Network, Chicago, USA and Amsterdam, NL Yes Yes No No No If any system inspection reveals that we are not in compliance with applicable standards, registrars may take action against us, including issuing a corrective action request or discontinuing our certifications.
This could result in claims from customers or others, damage to our business and reputation and brand, or significant costs to correct the defect or error. 21 Table of Contents We attempt to include provisions in our agreements with customers that are designed to limit our exposure to potential liability for damages arising from defects or errors in our products.
This could result in claims from customers or others, damage to our business and reputation and brand, or significant costs to correct the defect or error. 22 Table of Contents We attempt to include provisions in our agreements with customers that are designed to limit our exposure to potential liability for damages arising from defects or errors in our products.
If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business may be harmed. 22 Table of Contents Our operating results and financial condition may fluctuate on a quarterly and annual basis.
If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business may be harmed. 23 Table of Contents Our operating results and financial condition may fluctuate on a quarterly and annual basis.
These facilities and the 17 Table of Contents manufacturing equipment we use would be costly to replace and could require substantial lead time to repair or replace. Our facilities may be harmed by natural or man-made disasters, including, without limitation, earthquakes, floods, tornadoes, fires, hurricanes and nuclear disasters.
These facilities and the manufacturing equipment we use 18 Table of Contents would be costly to replace and could require substantial lead time to repair or replace. Our facilities may be harmed by natural or man-made disasters, including, without limitation, earthquakes, floods, tornadoes, fires, hurricanes and nuclear disasters.
In particular, we are required to perform annual system and process evaluation and 24 Table of Contents testing of our internal control over financial reporting to allow management and our independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act.
In particular, we are required to perform annual system and process evaluation and testing of our internal control over financial reporting to allow management and our independent registered public 25 Table of Contents accounting firm to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act.
If we fail to meet our customers’ price expectations in any given period, demand for our products and product lines could be negatively impacted and our business and results of operations could suffer. 19 Table of Contents Our failure to meet our customers' quality specifications would adversely affect our business and results of operations.
If we fail to meet our customers’ price expectations in 20 Table of Contents any given period, demand for our products and product lines could be negatively impacted and our business and results of operations could suffer. Our failure to meet our customers' quality specifications would adversely affect our business and results of operations.
Should any of our present single or limited source suppliers for manufacturing equipment or materials become unavailable 20 Table of Contents or inadequate, or impose terms unacceptable to us such as increased pricing terms, we could be required to spend a significant amount of time and expense to develop alternate sources of supply, and we may not be successful in doing so on terms acceptable to us, or at all.
Should any of our present single or limited source suppliers for manufacturing equipment or materials become unavailable or inadequate, or impose terms unacceptable to us such as increased pricing terms, we could be required to spend a significant amount of time and expense to develop alternate sources of supply, and we may not be successful in doing so on terms acceptable to us, or at all.
We rely on third parties 23 Table of Contents to provide payment processing services, including the processing of credit cards, debit cards or electronic checks, and it could disrupt our business if these companies become unwilling or unable to provide these services to us.
We rely on third parties to provide payment processing services, including the processing of credit cards, debit cards or electronic checks, and it 24 Table of Contents could disrupt our business if these companies become unwilling or unable to provide these services to us.
We do not have long-term supply contracts with any of our suppliers and operate on a purchase-order basis. While most manufacturing equipment and materials for our products are available from multiple suppliers, certain of those items are only available from single or limited sources.
We do not have long-term supply contracts 21 Table of Contents with any of our suppliers and operate on a purchase-order basis. While most manufacturing equipment and materials for our products are available from multiple suppliers, certain of those items are only available from single or limited sources.
All of our in-house manufacturing products are produced in 10 manufacturing facilities, located in Rosemount, Minnesota; Plymouth, Minnesota; Brooklyn Park, Minnesota; Cary, North Carolina (2 facilities); Nashua, New Hampshire (2 facilities); Telford, United Kingdom; Putzbrunn, Germany; and Eschenlohe, Germany.
All of our in-house manufacturing products are produced in 9 manufacturing facilities, located in Rosemount, Minnesota; Plymouth, Minnesota; Brooklyn Park, Minnesota; Cary, North Carolina (2 facilities); Nashua, New Hampshire (2 facilities); Telford, United Kingdom; and Putzbrunn, Germany.
We believe that our continued revenue growth will depend on many factors, a number of which are out of our control, including among others, our ability to: • retain and further penetrate existing customer companies, as well as attract new customer companies; • consistently execute on custom part orders in a manner that satisfies product developers’ and engineers’ needs and provides them with a superior experience; • develop new technologies or manufacturing processes and broaden the range of parts we offer; • successfully execute on our international strategy and expand into new geographic markets; • capitalize on customer expectations for access to comprehensive, user-friendly e-commerce capabilities 24 hours per day, 7 days per week; • increase the strength and awareness of our brand across geographic regions; • respond to changes in customer needs, technology and our industry; • successfully integrate operations and offerings of acquisitions; • react to challenges from existing and new competitors; • continue to attract and retain R&D professionals who will continue to expand our technologies; and • respond to an economic recession which negatively impacts manufacturers' ability to innovate and bring new products to market.
We believe that our continued revenue growth will depend on many factors, a number of which are out of our control, including among others, our ability to: • retain and expand share of wallet in existing customer companies, as well as attract new customer companies; • consistently execute on custom part orders in a consistent and timely manner that satisfies product developers’ and engineers’ needs and provides them with a superior experience; • develop new technologies or manufacturing processes and broaden the range of parts we offer; • successfully execute on our international strategy and expand into new geographic markets; • capitalize on customer expectations for access to comprehensive, user-friendly e-commerce capabilities 24 hours per day, 7 days per week; • increase the strength and awareness of our brand across geographic regions; • respond to changes in customer needs, technology and our industry; • successfully integrate operations and offerings of acquisitions; • react to challenges from existing and new competitors; • continue to attract and retain R&D professionals who will continue to expand our technologies; and • respond to changing economic conditions which may negatively impact manufacturers' ability to innovate and bring new products to market.
We have established our operations in the United States and Europe and are seeking to further expand our international operations. Our international revenue accounted for approximately 21% of our total revenue in each of the years ended December 31, 2024, 2023 and 2022.
We have established our operations in the United States and Europe and are seeking to further expand our international operations. Our international revenue accounted for approximately 19%, 21% and 21% of our total revenue in each of the years ended December 31, 2025, 2024 and 2023, respectively.
Our research and development costs were approximately $41.3 million, $40.1 million and $38.2 million for the years ended December 31, 2024, 2023 and 2022, respectively, and there is no guarantee that these costs will enable us to maintain or grow our revenue profitability. Refer to Item 7.
Our research and development costs were approximately $42.8 million, $41.3 million and $40.1 million for the years ended December 31, 2025, 2024 and 2023, respectively, and there is no guarantee that these costs will enable us to maintain or grow our revenue profitability. Refer to Item 7.
Our future effective tax rates could be adversely affected by changes in statutory tax rates or interpretation of tax rules, and regulations in jurisdictions in which we do business, changes in the amount of revenue or earnings in the countries with varying statutory tax rates, or by changes in the valuation of deferred tax assets and liabilities.
Our future effective tax rates could be adversely affected by changes in statutory tax rates or interpretation of tax rules, including those set forth in the One Big Beautiful Bill Act enacted in 2025, and regulations in jurisdictions in which we do business, changes in the amount of revenue or earnings in the countries with varying statutory tax rates, or by changes in the valuation of deferred tax assets and liabilities.
Risks Relating to Ownership of Our Common Stock Our stock price has been and may continue to be volatile. In the year ended December 31, 2024, our common stock traded as high as $45.15 and as low as $25.76.
Risks Relating to Ownership of Our Common Stock Our stock price has been and may continue to be volatile. In the year ended December 31, 2025, our common stock traded as high as $55.90 and as low as $29.59.
These negotiations could result in significant diversion of management time, as well as substantial out-of-pocket costs. Our success depends on our ability to deliver products and product lines that meet the needs of customers and to effectively respond to changes in our industry.
Our success depends on our ability to deliver products and product lines that meet the needs of customers and to effectively respond to changes in our industry.
Any failure to successfully address these challenges or risks could disrupt our business and harm our operating results and financial condition. Moreover, any such transaction may not be viewed favorably by investors or stakeholders. In addition, from time to time we may enter into negotiations for acquisitions, relationships, joint ventures or investments that are not ultimately consummated.
Moreover, any such transaction may not be viewed favorably by investors or stakeholders. In addition, from time to time we may enter into negotiations for acquisitions, relationships, joint ventures or investments that are not ultimately consummated. These negotiations could result in significant diversion of management time, as well as substantial out-of-pocket costs.
Added
Any one of these challenges or risks could impair our ability to realize any benefit from our acquisitions, strategic relationships, joint ventures or investments after we have expended resources on them, as well as divert our management’s attention. Any failure to successfully address these challenges or risks could disrupt our business and harm our operating results and financial condition.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeTo protect our information systems from cybersecurity threats, we use various security tools that help prevent, identify, escalate, investigate, resolve and recover from identified 25 Table of Contents vulnerabilities and security incidents in a timely manner.
Biggest changeItem 1C. Cybersecurity We have an enterprise-wide information security program designed to identify, protect, detect and respond to and manage reasonably foreseeable cybersecurity risks and threats. To protect our information systems from cybersecurity threats, we use various security tools that help prevent, identify, escalate, investigate, resolve and recover from identified vulnerabilities and security incidents in a timely manner.
Our information security activities are overseen by our Chief Technology Officer, who has over 25 years of experience in information technology, including security, encryption, system design, programming and compliance, and leaders from Information Technology, Legal and Finance teams, who have an average of 20 years of experience in information technology, security, compliance and auditing.
Our information security activities are overseen by our Chief Technology & AI Officer, who has over 25 years of experience in information technology, including security, encryption, system design, programming and compliance, and leaders from Information Technology, Legal and Finance teams, who have an average of 20 years of experience in information technology, security, compliance and auditing.
Our business strategy, results of operations and financial condition have not been materially affected by risks from cybersecurity threats, including as a result of previously identified cybersecurity incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks or any future material incidents.
Our business strategy, results of operations and financial condition have not been materially affected by, and are not reasonably likely to be materially affected by, risks from cybersecurity threats, including as a result of previously identified cybersecurity incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks or any future material incidents.
These include, but are not limited to, internal reporting, and monitoring and detection tools to allow our information security team members to assist us in identifying vulnerabilities in our systems before they are exploited by malicious threat actors.
These include, but are not limited to, internal reporting, and 26 Table of Contents monitoring and detection tools to allow our information security team members to assist us in identifying vulnerabilities in our systems before they are exploited by malicious threat actors.
Removed
Item 1C. Cybersecurity We have an enterprise-wide information security program designed to identify, protect, detect and respond to and manage reasonably foreseeable cybersecurity risks and threats.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also lease office space in Mosbach, Germany; Le Bourget du Lac, France; Novara, Italy and Nacka, Sweden for sales, customer service and technical support staff. The leases expire at various times from 2024 to 2025. We also lease a manufacturing and office facility encompassing approximately 21,000 square feet in Eschenlohe, Germany. The lease expires in 2029.
Biggest changeWe own a facility in Putzbrunn, Germany which encompasses approximately 70,000 square feet of office and manufacturing space. 27 Table of Contents We also leased office space in Mosbach, Germany; Le Bourget du Lac, France; Novara, Italy and Nacka, Sweden for sales, customer service and technical support staff. The leases expired at various times from 2024 to 2025.
We lease a facility in Amsterdam, Netherlands that encompasses approximately 12,000 square feet of office space utilized to support our outsourced manufacturing operations. The lease expires in 2025.
We lease a facility in Amsterdam, Netherlands that encompasses approximately 12,000 square feet of office space utilized to support our outsourced manufacturing operations. In 2025, we exercised an option to extend the lease for 36 months. The lease expires in 2028.
Europe Our European operations are headquartered in Telford, United Kingdom in a facility we own encompassing approximately 163,000 square feet of office and manufacturing space. 26 Table of Contents We own a facility in Putzbrunn, Germany which encompasses approximately 70,000 square feet of office and manufacturing space.
Europe Our European operations are headquartered in Telford, United Kingdom in a facility we own encompassing approximately 163,000 square feet of office and manufacturing space.
Japan In December 2023, we dissolved our Japan operations headquartered in Zama, Kanagawa, Japan (southwest of Tokyo), where we operated in a leased facility which encompassed approximately 88,000 square feet of office and manufacturing space. The lease expired in 2023.
In December 2025, the Company substantially completed the planned closure of the Eschenlohe, Germany location, where we leased a manufacturing and office facility encompassing approximately 21,000 square feet. The lease expires in 2029.
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We lease a facility in Chicago, Illinois that encompasses approximately 10,000 square feet of office space utilized to support our outsourced manufacturing operations. The lease expires in 2026.
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On October 21, 2024, the Company's board of directors approved a plan related to the Company's manufacturing facilities in Germany. The plan includes the closure of the Company's prototype injection molding manufacturing facility in Eschenlohe, Germany, and the discontinuation of Direct Metal Laser Sintering 3D printing services through its 3D printing facility in Putzbrunn, Germany.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIndex 12/31/2019 6/30/2020 12/31/2020 6/30/2021 12/31/2021 6/30/2022 12/31/2022 6/30/2023 12/31/2023 6/30/2024 12/31/2024 Proto Labs, Inc. 100.00 110.75 151.06 90.40 50.57 47.11 25.14 34.43 38.37 30.42 38.49 S&P 500 100.00 95.96 116.26 133.02 147.52 117.17 118.84 137.75 147.64 169.01 182.83 Russell 2000 100.00 86.39 118.36 138.48 134.57 102.37 105.56 113.20 121.49 122.73 133.66 Unregistered Sales of Equity Securities and Issuer Purchases of Equity Securities On February 7, 2023, our board of directors approved a $50 million increase to our previously authorized stock repurchase program, which increased the total stock repurchase authorized to up to $250 million.
Biggest changeIndex 12/31/2020 6/30/2021 12/31/2021 6/30/2022 12/31/2022 6/30/2023 12/31/2023 6/30/2024 12/31/2024 6/30/2025 12/31/2025 Proto Labs, Inc. 100.00 59.84 33.47 31.19 16.64 22.79 25.40 20.14 25.48 26.10 32.98 S&P 500 100.00 114.41 126.89 100.78 102.22 118.49 126.99 145.38 156.59 165.20 182.25 Russell 2000 100.00 117.00 113.69 86.49 89.18 95.64 102.64 103.69 112.93 110.14 125.68 Unregistered Sales of Equity Securities and Issuer Purchases of Equity Securities On February 4, 2025, our board of directors authorized a share repurchase program (February 2025 Program).
We have selected the Russell 2000 Index because the Russell 2000 Index measures the performance of the small market capitalization segment of U.S. equity instruments and we are a member company included in the Russell 2000 Index. Such returns are based on historical results and are not intended to suggest future performance.
We have selected the Russell 2000 Index because the Russell 2000 Index measures the performance of the small market capitalization segment of U.S. equity instruments and we are a member company included in the Russell 2000 Index. Such returns are based on historical results 28 Table of Contents and are not intended to suggest future performance.
As of February 5, 2025 we had 11 holders of record of our common stock. The actual number of shareholders is greater than this number of record holders, and includes shareholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
As of February 17 , 2026 we had 24 holders of record of our common stock. The actual number of shareholders is greater than this number of record holders, and includes shareholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
The February 2025 Program is open-ended and authorizes repurchases of shares of our common stock from time to time on the open market or in privately negotiated purchases, with a total stock repurchase authorized of up to $100 million.
The February 2025 Program is open-ended and authorizes repurchases of shares of our common stock from time to time on the open market or in privately negotiated purchases, with a total stock repurchase authorized of up to $100 million. We have $57.1 million remaining under this authorization.
The actual timing, manner, number and value of shares repurchased under the February 2025 Program will be determined by our management in its discretion and will depend on several factors, including the market price of the Company's common stock, general market and economic conditions, applicable requirements, and other considerations. 28 Table of Contents During the year ended December 31, 2024, we repurchased 1,774,058 shares at an average price of $33.95 per share for an aggregate purchase price of $60.2 million under the Prior Repurchase Program.
The actual timing, manner, number and value of shares repurchased under the February 2025 Program will be determined by our management in its discretion and will depend on several factors, including the market price of the Company's common stock, general market and economic conditions, applicable requirements, and other considerations. 29 Table of Contents During the year ended December 31, 2025, we repurchased 974,025 shares at an average price of $44.08 per share for an aggregate purchase price of $42.9 million under the February 2025 Program.
Any future determination related to our dividend policy will be made at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant. 27 Table of Contents Performance Graph The following graph shows a comparison from December 31, 2019 through December 31, 2024 of the cumulative total return for our common stock, the S&P 500 Index and the Russell 2000 Index.
Any future determination related to our dividend policy will be made at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) October 1, 2024 through October 31, 2024 — $ — — $ 42,450 November 1, 2024 through November 30, 2024 243,034 $ 39.30 243,034 $ 32,898 December 1, 2024 through December 31, 2024 112,389 $ 46.76 112,389 $ 27,643 355,423 $ 41.66 355,423 $ 27,643 Item 6. [Reserved]
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) October 1, 2025 through October 31, 2025 — $ — — $ 63,307 November 1, 2025 through November 30, 2025 93,905 $ 48.81 93,905 $ 58,723 December 1, 2025 through December 31, 2025 32,495 $ 50.99 32,495 $ 57,066 126,400 $ 49.37 126,400 $ 57,066 Item 6. [Reserved]
Removed
Our stock repurchase program was first approved on February 9, 2017 and was extended from time to time at the discretion of our board of directors and expired on December 31, 2024 (the Prior Repurchase Program). On February 4, 2025, our board of directors authorized a new share repurchase program (February 2025 Program).
Added
Performance Graph The following graph shows a comparison from December 31, 2020 through December 31, 2025 of the cumulative total return for our common stock, the S&P 500 Index and the Russell 2000 Index.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

85 edited+11 added−21 removed52 unchanged
Biggest changeYear Ended December 31, Change Year Ended December 31, Change (dollars in thousands) 2024 2023 $ % 2023 2022 $ % Revenue $ 500,890 100.0 % $ 503,877 100.0 % $ (2,987) (0.6) $ 503,877 100.0 % $ 488,398 100.0 % $ 15,479 3.2 Cost of revenue 277,690 55.4 281,884 55.9 (4,194) (1.5) 281,884 55.9 272,933 55.9 8,951 3.3 Gross profit 223,200 44.6 221,993 44.1 1,207 0.5 221,993 44.1 215,465 44.1 6,528 3.0 Operating expenses: Marketing and sales 92,073 18.4 87,688 17.4 4,385 5.0 87,688 17.4 82,752 17.0 4,936 6.0 Research and development 41,298 8.2 40,135 8.0 1,163 2.9 40,135 8.0 38,222 7.8 1,913 5.0 General and administrative 64,333 12.8 65,788 13.1 (1,455) (2.2) 65,788 13.1 67,544 13.8 (1,756) (2.6) Goodwill impairment - - - - - - - - 118,008 24.2 (118,008) * Costs related to disposal and exit activities 5,585 1.1 215 - 5,370 * 215 - 6,922 1.4 (6,707) * Total operating expenses 203,289 40.6 193,826 38.5 9,463 4.9 193,826 38.5 313,448 64.2 (119,622) (38.2) Income (loss) from operations 19,911 4.0 28,167 5.6 (8,256) (29.3) 28,167 5.6 (97,983) (20.1) 126,150 128.7 Other (expense) income, net 4,761 0.9 (215) (0.1) 4,976 * (215) (0.1) 106 - (321) (302.8) Income (loss) before income taxes 24,672 4.9 27,952 5.5 (3,280) (11.7) 27,952 5.5 (97,877) (20.1) 125,829 128.6 Provision for income taxes 8,079 1.6 10,732 2.1 (2,653) (24.7) 10,732 2.1 5,585 1.1 5,147 92.2 Net income (loss) $ 16,593 3.3 % $ 17,220 3.4 % $ (627) (3.6 %) $ 17,220 3.4 % $ (103,462) (21.2 %) $ 120,682 116.6 % * Percentage change not meaningful 33 Table of Contents Stock-based compensation expense included in the statements of comprehensive income data above is as follows: Year Ended December 31, (in thousands) 2024 2023 2022 Stock options and other $ 15,691 $ 14,550 $ 16,103 Employee stock purchase plan 1,308 1,439 1,442 Total stock-based compensation expense $ 16,999 $ 15,989 $ 17,545 Cost of revenue $ 1,935 $ 1,840 $ 2,172 Operating expenses: Marketing and sales 3,112 3,426 3,295 Research and development 2,721 2,556 2,189 General and administrative 9,231 8,167 9,889 Total stock-based compensation expense $ 16,999 $ 15,989 $ 17,545 Comparison of Years Ended December 31, 2024 and 2023 Revenue Revenue by reportable segment and the related changes for 2024 and 2023 is summarized as follows: Year Ended December 31, 2024 2023 Change (dollars in thousands) $ % of Total Revenue $ % of Total Revenue $ % Revenue United States $ 396,192 79.1 % $ 396,821 78.8 % $ (629) (0.2 %) Europe 104,698 20.9 107,056 21.2 (2,358) (2.2) Total revenue $ 500,890 100.0 % $ 503,877 100.0 % $ (2,987) (0.6 %) Our revenue decreased $3.0 million, or 0.6%, for 2024 compared with 2023.
Biggest changeYear Ended December 31, Change Year Ended December 31, Change (dollars in thousands) 2025 2024 $ % 2024 2023 $ % Revenue $ 533,127 100.0 % $ 500,890 100.0 % $ 32,237 6.4 $ 500,890 100.0 % $ 503,877 100.0 % $ (2,987) (0.6) Cost of revenue 295,990 55.5 277,690 55.4 18,300 6.6 277,690 55.4 281,884 55.9 (4,194) (1.5) Gross profit 237,137 44.5 223,200 44.6 13,937 6.2 223,200 44.6 221,993 44.1 1,207 0.5 Operating expenses: Marketing and sales 98,315 18.4 92,073 18.4 6,242 6.8 92,073 18.4 87,688 17.4 4,385 5.0 Research and development 42,808 8.0 41,298 8.2 1,510 3.7 41,298 8.2 40,135 8.0 1,163 2.9 General and administrative 69,813 13.1 64,333 12.8 5,480 8.5 64,333 12.8 65,788 13.1 (1,455) (2.2) Restructuring and transformation costs 749 0.1 — — 749 * — — — — — — Costs related to disposal and exit activities 342 0.1 5,585 1.1 (5,243) * 5,585 1.1 215 — 5,370 * Total operating expenses 212,027 39.8 203,289 40.6 8,738 4.3 203,289 40.6 193,826 38.5 9,463 4.9 Income from operations 25,110 4.7 19,911 4.0 5,199 26.1 19,911 4.0 28,167 5.6 (8,256) 29.3 Other income (expense), net 5,952 1.1 4,761 0.9 1,191 25.0 4,761 0.9 (215) (0.1) 4,976 * Income before income taxes 31,062 5.8 24,672 4.9 6,390 25.9 24,672 4.9 27,952 5.5 (3,280) (11.7) Provision for income taxes 9,821 1.8 8,079 1.6 1,742 21.6 8,079 1.6 10,732 2.1 (2,653) (24.7) Net income $ 21,241 4.0 % $ 16,593 3.3 % $ 4,648 28.0 % $ 16,593 3.3 % $ 17,220 3.4 % $ (627) 3.6 % * Percentage change not meaningful Stock-based compensation expense included in the statements of comprehensive income data above is as follows: Year Ended December 31, (in thousands) 2025 2024 2023 Stock options and other $ 14,376 $ 15,691 $ 14,550 Employee stock purchase plan 1,353 1,308 1,439 Total stock-based compensation expense $ 15,729 $ 16,999 $ 15,989 Cost of revenue $ 1,792 $ 1,935 $ 1,840 Operating expenses: Marketing and sales 3,317 3,112 3,426 Research and development 2,826 2,721 2,556 General and administrative 7,794 9,231 8,167 Total stock-based compensation expense $ 15,729 $ 16,999 $ 15,989 34 Table of Contents Comparison of Years Ended December 31, 2025 and 2024 Revenue Revenue by reportable segment and the related changes for 2025 and 2024 is summarized as follows: Year Ended December 31, 2025 2024 Change (dollars in thousands) $ % of Total Revenue $ % of Total Revenue $ % Revenue United States $ 432,326 81.1 % $ 396,192 79.1 % $ 36,134 9.1 % Europe 100,801 18.9 104,698 20.9 (3,897) (3.7) Total revenue $ 533,127 100.0 % $ 500,890 100.0 % $ 32,237 6.4 % Our revenue increased $32.2 million, or 6.4%, for 2025 compared with 2024.
The cash flow from operating activities during 2024 compared to 2023 increased $4.6 million primarily due to changes in operating assets and liabilities of $5.4 million, non-cash fixed impairment charges primarily related to certain operations in Germany of $2.6 million, increases in deferred taxes of $2.5 million, increases in stock-based compensation of $1.0 million and other items of $0.3 million, which were partially offset by decreases in foreign currency translation losses of $3.9 million, depreciation and amortization of $1.7 million, interest on finance lease obligations of $1.0 million and net income of $0.6 million.
The cash flow from operating activities during 2024 compared to 2023 increased $4.6 million primarily due to changes in operating assets and liabilities of $5.4 million, non-cash fixed asset impairment charges primarily related to certain operations in Germany of $2.6 million, increases in deferred taxes of $2.5 million, increases in stock-based compensation of $1.0 million and other items of $0.3 million, which were partially offset by decreases in foreign currency translation losses of $3.9 million, depreciation and amortization of $1.7 million, interest on finance lease obligations of $1.0 million and net income $0.6 million.
Cash Flows from Financing Activities Cash used in financing activities was $58.6 million for the year ended December 31, 2024, consisting of $60.3 million in repurchases of common stock, $2.0 million in shares withheld for tax obligations associated with equity transactions, and $0.3 million for repayments of finance lease obligations, which were partially offset by $4.0 million in proceeds from issuance of common stock from equity plans.
Cash used in financing activities was $58.6 million for the year ended December 31, 2024, consisting of $60.3 million in repurchases of common stock, $2.0 million in shares withheld for tax obligations associated with equity transactions, and $0.3 million for repayments of finance lease obligations, which were partially offset by $4.0 million in proceeds from issuance of common stock from equity plans.
Cash Flows from Operating Activities Cash flow from operating activities of $77.8 million during 2024 primarily consisted of net income of $16.6 million, adjusted for certain non-cash items, including depreciation and amortization of $35.8 million, stock-based compensation expense of $17.0 million, changes in operating assets and liabilities and other items totaling $11.0 million and non-cash fixed asset impairment charges primarily related to the exit of certain operations in Germany $2.6 million, which were partially offset by changes in deferred taxes of $5.2 million.
Cash flow from operating activities of $77.8 million during 2024 primarily consisted of net income of $16.6 million, adjusted for certain non-cash items, including depreciation and amortization of $35.8 million, stock-based compensation expense of $17.0 million, changes in operating asset and liabilities and other items totaling $11.0 million and non-cash fixed asset impairment charges related to the exit of certain operations in Germany of $2.6 million, which were partially offset by changes in deferred taxes of $5.2 million.
Our revenue is generated from a diverse customer base and our historical and current efforts to increase revenue have been directed at gaining new customers and selling to our existing customer base by increasing marketing and selling activities, including: • expanding the breadth and scope of our products by adding more sizes and materials to our offerings; • the introduction of our 3D Printing product line through our acquisition of FineLine in 2014; • expanding 3D printing to Europe through our acquisition of Alphaform in October 2015; • the introduction of our Sheet Metal product line through our acquisition of RAPID in 2017; • continuously improving the usability of our product lines such as our web-centric applications; and • providing customers with on-demand access to a global network of premium manufacturing partners through our acquisition of Hubs in January 2021.
Our revenue is generated from a diverse customer base and our historical and current efforts to increase revenue have been directed at gaining new customers and selling to our existing customer base by increasing marketing and selling activities, including: • expanding the breadth and scope of our products by adding more sizes and materials to our offerings; • the introduction of our 3D Printing product line through our acquisition of FineLine in 2014; 31 Table of Contents • expanding 3D printing to Europe through our acquisition of Alphaform in October 2015; • the introduction of our Sheet Metal product line through our acquisition of RAPID in 2017; • continuously improving the usability of our product lines such as our web-centric applications; and • providing customers with on-demand access to a global network of premium manufacturing partners through our acquisition of Hubs in January 2021.
Our actual results may differ materially from those anticipated in these forward- looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this Annual Report on Form 10-K. This Management's Discussion and Analysis (MD&A) generally discusses fiscal years 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
Our actual results may differ materially from those anticipated in these forward- looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this Annual Report on Form 10-K. This Management's Discussion and Analysis (MD&A) generally discusses fiscal years 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
We target our products at the millions of product developers and engineers who use three-dimensional computer-aided design (3D CAD) software to design products across a diverse range of end-markets, to the procurement and supply chain professionals seeking to easily and efficiently source custom parts on-demand, and to a wide variety of customers seeking to purchase low-volume custom parts.
We target our products at the millions of product developers and engineers who use three-dimensional computer-aided design (3D CAD) software to design products across a diverse range of end-markets, to the procurement and supply chain professionals seeking to easily and efficiently source custom parts on-demand, and to a wide variety of customers seeking to purchase custom parts.
In addition, we believe that a number of trends affecting our industry have impacted our results of operations, which have increased our revenue and our operating expenses, and may continue to do so. For example, we believe that many of our target customers are facing three mega trends, which are disrupting long-term product growth models.
In addition, we believe that a number of trends affecting our industry have impacted our results of operations, which have increased our revenue and our operating expenses, and may continue to do so. For example, we believe that many of our target customers are facing trends, which are disrupting long-term product growth models.
This was primarily due to our mix of customers served in 2024 as compared to 2023 and our strategic focus to earn larger orders from our customers as we strive to be their supplier of choice by serving their custom parts needs through the comprehensive offer of our factory and the Protolabs Network.
This was primarily due to our mix of customers served in 2025 as compared to 2024 and our strategic focus to earn larger orders from our customers as we strive to be their supplier of choice by serving their custom parts needs through the comprehensive offer of our factory and the Protolabs Network.
This was primarily due to our mix of customers served in 2024 as compared to 2023 and our strategic focus to earn larger orders from our customers as we strive to be their supplier of choice by serving their custom parts needs through the comprehensive offer of our factory and the Protolabs Network.
This was primarily due to our mix of customers served in 2025 as compared to 2024 and our strategic focus to earn larger orders from our customers as we strive to be their supplier of choice by serving their custom parts needs through the comprehensive offer of our factory and the Protolabs Network.
The increase in our cash was primarily due to cash generated through operations of $77.8 million, which was partially offset by cash used in investing activities of $13.6 million, consisting primarily of net purchases of property, equipment and other capital 36 Table of Contents assets of $9.1 million and net purchases of marketable securities of $4.4 million, and cash used in financing activities of $58.6 million, primarily for repurchases of common stock of $60.3 million and purchases of shares withheld for tax obligations of $2.0 million, which was partially offset by cash proceeds from the issuance of common stock from equity plans of $4.0 million.
The increase in our cash was primarily due to cash generated through operations of $77.8 million, which was partially offset by cash used in investing activities of $13.6 million, consisting primarily of net purchases of property, equipment and other capital assets of $9.1 million and net purchases of marketable securities of $4.4 million, and cash used in financing activities of $58.6 million, primarily for repurchases of common stock of $60.3 million and purchases of shares withheld for tax obligations of $2.0 million, which was partially offset by cash proceeds from the issuance of common stock from equity plans of $4.0 million.
The Protolabs Network complements our in-house manufacturing, enabling us to significantly increase the size, complexity, breadth of manufacturing processes, lead times and prices of the parts we produce. Our customers conduct nearly all their business with us over the Internet.
The manufacturing partner network, complements our in-house manufacturing, enabling us to significantly increase the size, complexity, breadth of manufacturing processes, lead times and prices of the parts we produce. Our customers conduct nearly all their business with us over the Internet.
The Company recognizes the effect of income tax positions only if 41 Table of Contents sustaining those positions is more likely than not. The Company records penalties and interest related to unrecognized tax benefits in income taxes in the Company’s Consolidated Statements of Income.
The Company recognizes the effect of income tax positions only if 42 Table of Contents sustaining those positions is more likely than not. The Company records penalties and interest related to unrecognized tax benefits in income taxes in the Company’s Consolidated Statements of Income.
Cash Flows from Investing Activities Cash used in investing activities was $13.6 million for the year ended December 31, 2024, consisting of $9.1 million for the net purchases of property, equipment and other capital assets and $4.4 million in net purchases of marketable securities.
Cash used in investing activities was $13.6 million for the year ended December 31, 2024, consisting of $9.1 million for the net purchases of property, equipment and other capital assets and $4.4 million of net purchases of marketable securities.
The significant assumptions used to estimate the value of the software platform included forecasted annual revenue growth, gross margin rates, operating expenses as a percentage of sales and the weighted- 39 Table of Contents average cost of capital, which are affected by our business plans and expectations about future market or economic conditions.
The significant assumptions used to estimate the value of the software platform included forecasted annual revenue growth, gross margin rates, operating expenses as a percentage of sales and the weighted-average cost of capital, which are affected by our business plans and expectations about future market or economic conditions.
Our actual results may differ significantly from these estimates under different assumptions or conditions. 38 Table of Contents We believe the following critical accounting policies and estimates affect our more significant judgments used in the preparation of our consolidated financial statements. See the Notes to Consolidated Financial Statements included in Item 8.
Our actual results may differ significantly from these estimates under different assumptions or conditions. We believe the following critical accounting policies and estimates affect our more significant judgments used in the preparation of our consolidated financial statements. See the Notes to Consolidated Financial Statements included in Item 8.
Discussions of fiscal year 2022 items and year-to-year comparisons between 2023 and 2022 are generally not included in this MD&A, and can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7. of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 16, 2024.
Discussions of fiscal year 2023 items and year-to-year comparisons between 2024 and 2023 are generally not included in this MD&A, and can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7. of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 21, 2025.
Our interest income will vary each reporting period depending on our average cash balances during the period, composition of our marketable security portfolio and the current level of interest rates. 32 Table of Contents Provision for Income Taxes Provision for income taxes is comprised of federal, state, local and foreign taxes based on pre-tax income.
Our interest income will vary each reporting period depending on our average cash balances during the period, composition of our marketable security portfolio and the current level of interest rates. Provision for Income Taxes Provision for income taxes is comprised of federal, state, local and foreign taxes based on pre-tax income.
We determine the fair value stock-based compensation related to our ESPP in accordance with ASC 718 using the component measurement approach and the Black-Scholes standard option pricing model. 40 Table of Contents The fair value of each offering period was estimated using the Black-Scholes option pricing model with the following assumptions: Year Ended December 31, 2024 2023 2022 Risk-free interest rate 4.29 - 5.16% 4.60 - 5.16% 0.17 - 4.60% Expected life (months) 6.00 6.00 6.00 Expected volatility 30.97 - 65.60% 47.38 - 67.84% 47.05 - 67.84% Expected dividend yield 0% 0% 0% There are significant differences among option valuation models, and this may result in a lack of comparability with other companies that use different models, methods and assumptions.
We determine the fair value stock-based compensation related to our ESPP in accordance with ASC 718 using the component measurement approach and the Black-Scholes standard option pricing model. 41 Table of Contents The fair value of each offering period was estimated using the Black-Scholes option pricing model with the following assumptions: Year Ended December 31, 2025 2024 2023 Risk-free interest rate 3.67 - 4.29% 4.29 - 5.16% 4.60 - 5.16% Expected life (months) 6.00 6.00 6.00 Expected volatility 39.13 - 65.60% 30.97 - 65.60% 47.38 - 67.84% Expected dividend yield 0% 0% 0% There are significant differences among option valuation models, and this may result in a lack of comparability with other companies that use different models, methods and assumptions.
Comparison of Years Ended December 31, 2023 and 2022 For a comparison of our results of operations for fiscal years ended December 31, 2023 and December 31, 2022, see Part II, Item 7.
Comparison of Years Ended December 31, 2024 and 2023 For a comparison of our results of operations for fiscal years ended December 31, 2024 and December 31, 2023, see Part II, Item 7.
Through the acquisition of Hubs (formerly 3D Hubs, Inc.) (Hubs) in 2021, we provide our customers access to a global network of premium manufacturing partners who reside across North America, Europe and Asia. In January 2024, we rebranded Hubs to the Protolabs Network by Hubs (Protolabs Network).
Through the acquisition of Hubs (formerly 3D Hubs, Inc., recently rebranded to Protolabs Network) in 2021, we provide our customers access to a global network of premium manufacturing partners who reside across North America, Europe and Asia.
We recognize stock-based compensation expense on a straight-line basis over the requisite service period. We recorded stock-based compensation expense relating to stock options, restricted stock awards, performance stock units and our ESPP of $17.0 million, $16.0 million and $17.5 million during the years ended December 31, 2024, 2023 and 2022, respectively.
We recognize stock-based compensation expense on a straight-line basis over the requisite service period. We recorded stock-based compensation expense relating to stock options, restricted stock awards, performance stock units and our ESPP of $15.7 million, $17.0 million and $16.0 million during the years ended December 31, 2025, 2024 and 2023, respectively.
In performing the impairment test, we determined the fair value of our reporting units through the income approach by using discounted cash flow (DCF) analyses. Determining fair value requires us to make judgments about appropriate discount rates, perpetual growth rates and the amount and timing of expected future cash flows.
If performing the impairment test, we would determine the fair value of our reporting units through the income approach by using discounted cash flow (DCF) analyses. Determining fair value requires us to make judgments about appropriate discount rates, perpetual growth rates and the amount and timing of expected future cash flows.
Since our inception, we have focused on areas where we could automate the manufacturing process via our digital model and we positioned ourselves to avoid routine, low margin, high-volume commoditized manufacturing. Our initial focus was on prototypes and simple parts and have added complexity over time.
Since our inception, we have focused on areas where we could automate the manufacturing process via our digital model and we positioned ourselves to avoid routine, low margin, high-volume commoditized manufacturing. Our initial focus was on prototypes and simple parts and have added complexity over time, as well as adding production to our offer.
Our revenue outside of the United States accounted for approximately 21% of our consolidated revenue in each of the years ended December 31, 2024 and 2023. We intend to continue to expand our international sales efforts and believe opportunities exist to serve the needs of customers in select new geographic regions.
Our revenue outside of the United States accounted for approximately 19% and 21% of our consolidated revenue in the years ended December 31, 2025 and 2024, respectively. We intend to continue to expand our international sales efforts and believe opportunities exist to serve the needs of customers in select new geographic regions.
General and administrative expense consists primarily of employee compensation, benefits, stock-based compensation, professional service fees related to accounting, tax and legal and other related overhead. We expect general and administrative expense to increase in the future as we continue to grow and expand as a global organization. Goodwill impairment.
General and administrative expense consists primarily of employee compensation, benefits, stock-based compensation, professional service fees related to accounting, tax and legal and other related overhead. We expect general and administrative expense to increase in the future as we continue to grow and expand as a global organization. Restructuring and transformation costs.
"Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 16, 2024.
"Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 21, 2025.
As of December 31, 2024, the amount of cash and cash equivalents held by foreign subsidiaries was $12.1 million. Our intent is to continue to reinvest these funds outside the U.S. and our current plans do not demonstrate a need to repatriate them to fund our domestic operations.
As of December 31, 2025, the amount of cash and cash equivalents held by foreign subsidiaries was $9.3 million. Our intent is to continue to reinvest these funds outside the U.S. and our current plans do not demonstrate a need to repatriate them to fund our domestic operations.
The fair value of each new employee option awarded was estimated on the date of grant for the periods below using the Black-Scholes option pricing model with the following assumptions: Year Ended December 31, 2024 2023 2022 Risk-free interest rate 4.28 - 4.30% 3.55 - 4.55% 1.94 - 3.40% Expected life (years) 6.25 2.00 - 6.25 6.25 Expected volatility 50.62 -53.17% 49.23 -55.92% 45.95 - 46.03% Expected dividend yield 0% 0% 0% Weighted average grant date fair value $18.17 $16.36 $23.11 Our 2012 Employee Stock Purchase Plan (ESPP) allows eligible employees to purchase a variable number of shares of our common stock during each offering period at a discount through payroll deductions of up to 15% of their eligible compensation, subject to plan limitations.
The fair value of each new employee option awarded was estimated on the date of grant for the periods below using the Black-Scholes option pricing model with the following assumptions: Year Ended December 31, 2025 2024 2023 Risk-free interest rate 3.80 - 4.17% 4.28 - 4.30% 3.55 - 4.55% Expected life (years) 6.25 6.25 2.00 - 6.25 Expected volatility 52.05 -52.99% 50.62 -53.17% 49.23 -55.92% Expected dividend yield 0% 0% 0% Weighted average grant date fair value $22.01 $18.17 $16.36 Our 2012 Employee Stock Purchase Plan (ESPP) allows eligible employees to purchase a variable number of shares of our common stock during each offering period at a discount through payroll deductions of up to 15% of their eligible compensation, subject to plan limitations.
International revenue w as positively impacted by $1.9 million during 2024 compared to the same period in 2023 as a result of foreign currency movements, primarily the strengthening of the British Pound and Euro relative to the United States Dollar. During 2024, we served 51,552 unique customer contacts, a decrease of 3.6% over 2023.
International revenue w as positively impacted by $3.5 million during 2025 compared to the same period in 2024 as a result of foreign currency movements, primarily the strengthening of the British Pound and Euro relative to the United States Dollar. During 2025, we served 48,415 unique customer contacts, a decrease of 6.1% over 2024.
Contractual Obligations As of December 31, 2024, our contractual obligations are $3.5 million related to current and long-term operating and finance lease liabilities and $8.7 million related to unsatisfied performance obligations for revenue generating contracts with an original expected length of one year or less. Financing Arrangements We had no financing arrangements as of December 31, 2024 and 2023.
Contractual Obligations As of December 31, 2025, our contractual obligations are $3.0 million related to current and long-term operating and finance lease liabilities and $9.6 million related to unsatisfied performance obligations for revenue generating contracts with an original expected length of one year or less. Financing Arrangements We had no financing arrangements as of December 31, 2025 and 2024.
Other (Expense) Income, Net and Provision for Income Taxes Other (Expense) Income, Net. We recognized other expense, net of $4.8 million in 2024, an increase of $5.0 million compared to other income, n et of $0.2 million for 2023.
Other Income (Expense), Net and Provision for Income Taxes Other Income (Expense), Net. We recognized other income, net of $6.0 million in 2025, an increase of $1.2 million compared to other income, n et of $4.8 million for 2024.
Including interest and penalties, we have established a liability for uncertain tax positions of $4.6 million as of December 31, 2024.
Including interest and penalties, we have established a liability for uncertain tax positions of $4.3 million as of December 31, 2025.
As of December 31, 2024, we had $18.4 million of unrecognized stock-based compensation costs related to unvested restricted stock, which is expected to be recognized over a weighted average period of 2.6 years. We issued restricted stock awards of 377,961, 410,682 and 315,432 shares of our common stock during the years ended December 31, 2024, 2023 and 2022, respectively.
As of December 31, 2025, we had $16.6 million of unrecognized stock-based compensation costs related to unvested restricted stock, which is expected to be recognized over a weighted average period of 2.7 years. We issued restricted stock awards of 312,953, 377,961 and 410,682 shares of our common stock during the years ended December 31, 2025, 2024 and 2023, respectively.
Our future capital requirements will depend on many factors, including the following: • the revenue growth in Injection Molding, CNC Machining, 3D Printing and Sheet Metal product lines; • costs of operations, including costs relating to expansion and growth; • the emergence of competing or complementary technological developments; • the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual product rights, or participating in litigation-related activities; and • the acquisition of businesses, products and technologies, although we currently have no commitments or agreements relating to any of these types of transactions.
Any such required additional capital may not be available on terms acceptable to us, or at all. 38 Table of Contents Our future capital requirements will depend on many factors, including the following: • the revenue growth in Injection Molding, CNC Machining, 3D Printing and Sheet Metal product lines; • costs of operations, including costs relating to expansion and growth; • the emergence of competing or complementary technological developments; • the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual product rights, or participating in litigation-related activities; and • the acquisition of businesses, products and technologies, although we currently have no commitments or agreements relating to any of these types of transactions.
Other intangible assets include software technology, customer relationships and other intangible assets acquired from independent parties. We used a multi-period excess earnings method under the income approach to measure the software platform when acquired through an acquisition.
Other Intangible Assets We recognize other intangibles assets in accordance with ASC 350, Intangibles—Goodwill and Other . Other intangible assets include software technology, customer relationships and other intangible assets acquired from independent parties. We used a multi-period excess earnings method under the income approach to measure the software platform when acquired through an acquisition.
As of December 31, 2024, we had $3.6 million of unrecognized stock-based compensation costs related to unvested stock options that are expected to be recognized over a weighted average period of 2.5 years. We issued options to purchase 140,405, 186,804 and 118,434 shares of our common stock during the years ended December 31, 2024, 2023 and 2022, respectively.
As of December 31, 2025, we had $2.7 million of unrecognized stock-based compensation costs related to unvested stock options that are expected to be recognized over a weighted average period of 2.8 years. We issued options to purchase 147,664, 140,405 and 186,804 shares of our common stock during the years ended December 31, 2025, 2024 and 2023, respectively.
As of December 31, 2024, we had $4.2 million of unrecognized stock-based compensation costs related to unvested performance stock, which is expected to be recognized over a weighted average period of 1.7 years. We issued performance stock awards of 79,436, 71,295 and 35,697 shares of our common stock during the years ended December 31, 2024, 2023 and 2022, respectively.
As of December 31, 2025, we had $6.6 million of unrecognized stock-based compensation costs related to unvested performance stock, which is expected to be recognized over a weighted average period of 2.0 years. We issued performance stock awards of 160,939, 79,436 and 71,295 shares of our common stock during the years ended December 31, 2025, 2024 and 2023, respectively.
Our reporting units are the United States and Europe. Goodwill is not amortized. Goodwill is tested for impairment annually as of the first day of the fourth quarter, and is tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired.
Goodwill is tested for impairment annually as of the first day of the fourth quarter, and is tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired.
Liquidity and Capital Resources Cash Flows The following table summarizes our cash flows for the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, (dollars in thousands) 2024 2023 2022 Net cash provided by operating activities $ 77,829 $ 73,274 $ 62,079 Net cash used in investing activities (13,580) (4,552) (43,092) Net cash used in financing activities (58,550) (41,858) (27,922) Effect of exchange rates on cash and cash equivalents (418) 368 (436) Net (decrease) increase in cash and cash equivalents $ 5,281 $ 27,232 $ (9,371) Sources of Liquidity We finance our operations and capital expenditures through cash flow from operations.
Liquidity and Capital Resources Cash Flows The following table summarizes our cash flows for the years ended December 31, 2025, 2024 and 2023: Year Ended December 31, (dollars in thousands) 2025 2024 2023 Net cash provided by operating activities $ 74,504 $ 77,829 $ 73,274 Net cash used in investing activities (13,410) (13,580) (4,552) Net cash used in financing activities (40,366) (58,550) (41,858) Effect of exchange rates on cash and cash equivalents 1,027 (418) 368 Net (decrease) increase in cash and cash equivalents $ 21,755 $ 5,281 $ 27,232 Sources of Liquidity We finance our operations and capital expenditures through cash flow from operations.
Overall, our effective tax rate for 2024 and beyond may differ from historical effective tax rates due to changes in losses in foreign operations that are not eligible for tax benefits on account of valuation allowances, as well as any future tax law changes that may impact the effective tax rate.
Overall, our effective tax rate for 2025 and beyond may differ from historical effective tax rates due to changes in losses in foreign operations that are not eligible for tax benefits on account of valuation allowances, as well as any future tax law changes that may impact the effective tax rate. 33 Table of Contents Results of Operations The following table summarizes our results of operations and the related changes for the periods indicated.
The following table summarizes our unique customer contacts and revenue per customer contact: Year Ended December 31, 2024 2023 2022 Revenue (in thousands) $ 500,890 $ 503,877 $ 488,398 Customer contacts 51,552 53,464 56,333 Revenue per customer contact 1 $ 9,716 $ 9,425 $ 8,670 1 Revenue per customer contact is calculated using the revenue recognized during the respective period divided by the actual number of customer contacts served during the same period.
The following table summarizes our unique customer contacts and revenue per customer contact: Year Ended December 31, 2025 2024 2023 Revenue (in thousands) $ 533,127 $ 500,890 $ 503,877 Customer contacts 48,415 51,552 53,464 Revenue per customer contact 1 $ 11,012 $ 9,716 $ 9,425 1 Revenue per customer contact is calculated using the revenue recognized during the respective period divided by the actual number of customer contacts served during the same period.
Our revenue per customer contact grew 3.1% as compared to 2023. During 2023, we served 53,464 unique customer contacts who purchased our products through our web-based customer interface, a decrease of 5.1% over the same period in 2022.
Our revenue per customer contact grew 13.3% as compared to 2024. During 2024, we served 51,552 unique customer contacts who purchased our products through our web-based customer interface, a decrease of 3.6% over the same period in 2023.
Loss from operations for Europe increased $3.0 million for 2024 compared with 2023, which was primarily driven by $5.6 million in operating expenses associated with our decision to exit and close certain operations in Germany. Loss from operations included in Corporate Unallocated and Japan increased $8.9 million for 2024 compared with 2023.
Loss from operations for Europe increased $1.6 million for 2025 compared with 2024, which was primarily driven by lower revenue volumes, negative operating leverage and $0.3 million in operating expenses associated with our decision to exit and close certain operations in Germany. Loss from operations included in Corporate Unallocated increased $5.6 million for 2025 compared with 2024.
Cash used in investing activities was $4.6 million for the year ended December 31, 2023, consisting of $27.4 million for the net purchases of property, equipment and other capital assets, $1.0 million in other investing activities, which were partially offset by $23.9 million of net proceeds from maturities of marketable securities.
Cash Flows from Investing Activities Cash used in investing activities was $13.4 million for the year ended December 31, 2025, consisting of $14.0 million for the net purchases of property, equipment and other capital assets, partially offset by $0.6 million in net proceeds from maturities of marketable securities.
Cash used in financing activities was $41.9 million for the year ended December 31, 2023, consisting of $44.0 million in repurchases of common stock, $1.4 million in shares withheld for tax obligations associated with equity 37 Table of Contents transactions, and $0.3 million for repayments of finance lease obligations, which were partially offset by $3.8 million in proceeds from issuance of common stock from equity plans.
Cash Flows from Financing Activities Cash used in financing activities was $40.4 million for the year ended December 31, 2025, consisting of $43.0 million in repurchases of common stock, $3.4 million in shares withheld for tax obligations associated with equity transactions, and $0.3 million for repayments of finance lease obligations, which were partially offset by $6.3 million in proceeds from issuance of common stock from equity plans.
The plan includes the closure of the Company's prototype injection molding manufacturing facility in Eschenlohe, Germany, and the discontinuation of Direct Metal Laser Sintering 3D printing services through its 3D printing facility in Putzbrunn, Germany. The Company expects to substantially complete the plan within fiscal year 2025.
The plan includes the closure of the Company's prototype injection molding manufacturing facility in Eschenlohe, Germany, and the discontinuation of Direct Metal Laser Sintering 3D printing services through its 3D printing facility in Putzbrunn, Germany.
Revenue is recognized over time using the input method based on time in production as a percentage of total estimated production time to measure progress toward satisfying performance obligations using the estimated total time necessary to complete the parts per the customer's order and an estimate of inventory and production costs incurred to date.
Revenue is recognized over time using the input method based on time in production as a percentage of total estimated production time to measure progress toward satisfying performance obligations using the estimated total time necessary to complete the parts per the customer's order and an estimate of inventory and production costs incurred to date. 39 Table of Contents The majority of our CNC machining, 3D printing, and sheet metal contracts have a single performance obligation.
Injection Molding revenue consists of sales of custom injection molds and injection-molded parts. CNC Machining 30 Table of Contents revenue consists of sales of CNC-machined custom parts. 3D Printing revenue consists of sales of custom 3D-printed parts. Sheet Metal revenue consists of sales of fabricated sheet metal custom parts and assemblies.
CNC Machining revenue consists of sales of CNC-machined custom parts. 3D Printing revenue consists of sales of custom 3D-printed parts. Sheet Metal revenue consists of sales of fabricated sheet metal custom parts and assemblies.
Our gross profit and gross margin are affected by many factors, including our mix of revenue by product line, pricing, sales volume, manufacturing costs, the costs associated with increasing production capacity, the mix between domestic and foreign revenue sources, the mix between revenue produced in our internal manufacturing operations and outsourced to our external manufacturing partners, and foreign exchange rates.
Our gross profit and gross margin are affected by many factors, including our mix of revenue by product line, pricing, sales volume, manufacturing costs, the costs associated with increasing production capacity, the mix between domestic and foreign revenue sources, the mix between revenue produced in our internal manufacturing operations and outsourced to our external manufacturing partners, and foreign exchange rates. 32 Table of Contents Operating Expenses Operating expenses consist of marketing and sales, research and development, general and administrative expenses, restructuring and transformation costs and costs related to disposal and exit activities.
Stock-Based Compensation We determine our stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation (ASC 718), which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and non-employee directors based on the grant date fair value of the award.
As of December 31, 2025, no impairment charges for intangible assets have been recognized. 40 Table of Contents Stock-Based Compensation We determine our stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation (ASC 718), which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and non-employee directors based on the grant date fair value of the award.
We expect that these additional costs for factory and equipment expansion can be absorbed by revenue growth, and allow gross margins by product line to remain relatively consistent over time.
We expect to continue to grow in future periods, which will result in the need for additional investments in factory space and equipment. We expect that these additional costs for factory and equipment expansion can be absorbed by revenue growth, and allow gross margins by product line to remain relatively consistent over time.
The increase in our cash was primarily due to cash generated through operations of $73.3 million, which was partially offset by cash used in investing activities $4.6 million, consisting primarily of net purchases of property, equipment and other capital assets of $27.4 million, partially offset by proceeds from the maturity of marketable securities of $23.9 million, and cash used in financing activities of $41.9 million, primarily for repurchases of common stock of $44.0 million.
The increase in our cash was primarily due to cash generated through operations of $74.5 million, which was partially offset by cash used in financing activities of $40.4 million, primarily for repurchases of common stock of $43.0 million and purchases of shares withheld for tax obligations of $3.4 million, which was partially offset by cash proceeds from the issuance of common stock from equity plans of $6.3 million and cash used in investing activities of $13.4 million, consisting primarily of net purchases of property, equipment and other capital assets of $14.0 million, partially offset by net proceeds from marketable securities of $0.6 million.
The Company will continue offering all its manufacturing services to customers across Europe, including injection molding and metal 3D printing. These services will be fulfilled through internal manufacturing facilities and a network of manufacturing partners. Previously we had established operations in Japan.
The Company substantially completed the plan during the fourth quarter of 2025.The Company continues to offer all its manufacturing services to customers across Europe, including injection molding and metal 3D printing through internal manufacturing facilities and a network of manufacturing partners. Previously we had established operations in Japan.
During 2024, we served 51,552 unique customer contacts who purchased our products through our web-based customer interface, a decrease of 3.6% over the same period in 2023. Our customer contacts served decreased at a rate greater than our decrease in revenue.
During 2025, we served 48,415 unique customer contacts who purchased our products through our web-based customer interface, a decrease of 6.1% over the same period in 2024. Our customer contacts served decreased while our revenue increased.
As a result of the factors described above, many of our customers tend to return to Proto Labs to meet their ongoing needs. We have established our operations in the United States and Europe. On October 21, 2024, the Company's board of directors approved a plan related to the Company's manufacturing facilities in Germany.
We have established our operations in the United States and Europe. On October 21, 2024, the Company's board of directors approved a plan related to the Company's manufacturing facilities in Germany.
Other expense, net for 2024 primarily consisted of $5.4 million of interest income on investments and other income, partially offset by $0.4 million of foreign currency losses and $0.2 million of interest expense and other expenses.
Other expense, net for 2025 primarily consisted of $5.4 million of interest income on investments and other income and $0.6 million of foreign currency and other gains.
Our researc h and development expense increased $1.2 million, or 2.9%, for 2024 compared to 2023 p rimarily due to increases of $1.1 million in other operating costs, $0.4 million in professional services and $0.3 million in administrative costs, partially offset by decreases in personnel and related costs of $0.6 million for 2024 compared with 2023. General and Administrative.
Our researc h and development expense increased $1.5 million, or 3.7%, for 2025 compared to 2024 p rimarily due to personnel and related cost increases of $2.2 million, primarily related to incentive compensation related to our annual short-term incentive compensation plan and merit increases, partially offset by decreases of $0.4 million in operating costs and $0.3 million in professional services.
Our quick-turn factory business model requires that we invest in our capacity well in advance of demand to ensure we can fulfill the expectations for quick delivery of products manufactured in house to our customers.
Our quick-turn factory business model requires that we invest in our capacity well in advance of demand to ensure we can fulfill the expectations for quick delivery of products manufactured in house to our customers. Therefore, over the last several years, we have made significant investments in additional factory space, equipment and infrastructure across our geographic segments.
An impairment loss is recognized when the carrying amount of an asset exceeds the estimated undiscounted cash flows generated by the asset. As of December 31, 2024, no impairment charges for intangible assets have been recognized.
An impairment loss is recognized when the carrying amount of an asset exceeds the estimated undiscounted cash flows generated by the asset.
The effective tax rate decreased by 5.7% for the year ended December 31, 2024 when compared to 2023 primarily due to a release of tax reserves arising from a successful audit closure, and a reduction in deferred tax liabilities from being revalued at a lower state tax rate, partially offset by an increase in losses in foreign operations that are not eligible for tax benefits on account of valuation allowances.
The effective tax rate decreased by 1.1% for the year ended December 31, 2025 when compared to 2024 primarily due to a decrease in losses in foreign operations that are not eligible for tax benefits on account of valuation allowances, as well as a decrease in tax expense from the vesting of restricted stock and the exercise of stock options, partially offset by 2024 including a one-time reduction in deferred tax liabilities from being revalued at a lower state tax rate, that did not repeat in 2025.
We had cash and cash equivalents of $83.8 million as of December 31, 2023, an increase of $27.2 million from December 31, 2022.
We had cash and cash equivalents of $110.8 million as of December 31, 2025, an increase of $21.8 million from December 31, 2024.
Overview We are one of the world’s largest, fastest, and most comprehensive digital manufacturers of custom parts. We manufacture prototypes and low-volume production parts for companies worldwide that are under increasing pressure to bring their finished products to market faster than their competition.
Overview We are the world’s fastest manufacturing service enabling companies across every industry to streamline production of quality parts throughout the entire product life cycle. We manufacture prototypes and low-volume production parts for companies worldwide that are under increasing pressure to bring their finished products to market faster than their competition.
Our effective tax rate of 32.7% for 2024 decreased 5.7% compared to 38.4% for the same period in 2023, primarily due to a release of tax reserves arising from a successful audit closure, and a reduction in deferred tax liabilities from being revalued at a lower state tax rate, partially offset by an increase in losses in foreign operations that are not eligible for tax benefits on account of valuation allowances.
Our effective tax rate of 31.6% for 2025 decreased 1.1% compared to 32.7% for the same period in 2024, primarily due to a decrease in losses in foreign operations that are not eligible for tax benefits on account of valuation allowances, as well as a decrease in tax expense from the vesting of restricted stock and the exercise of stock options, partially offset by 2024 including a one-time reduction in deferred tax liabilities from being revalued at a lower state tax rate, that did not repeat in 2025.
Our revenue per customer grew 3.1% as compared to 2023. 34 Table of Contents Revenue by product line and the related changes for 2024 and 2023 is summarized as follows: Year Ended December 31, 2024 2023 Change (dollars in thousands) $ % of Total Revenue $ % of Total Revenue $ % Revenue Injection Molding $ 194,215 38.8 % $ 203,941 40.5 % $ (9,726) (4.8 %) CNC Machining 206,887 41.3 198,222 39.3 8,665 4.4 3D Printing 83,767 16.7 84,291 16.7 (524) (0.6) Sheet Metal 15,265 3.0 16,540 3.3 (1,275) (7.7) Other Revenue 756 0.2 883 0.2 (127) (14.4) Total revenue $ 500,890 100.0 % $ 503,877 100.0 % $ (2,987) (0.6 %) By product line, our revenue decrease was driven by a 4.8% decrease in Injection Molding revenue, a 7.7% decrease in Sheet Metal revenue, a 0.6% decrease in 3D Printing revenue and a 14.4% decrease in Other Revenue, which was partially offset by a 4.4% increase in CNC Machining revenue, in each case for 2024 compared with 2023.
Revenue by product line and the related changes for 2025 and 2024 is summarized as follows: Year Ended December 31, 2025 2024 Change (dollars in thousands) $ % of Total Revenue $ % of Total Revenue $ % Revenue Injection Molding $ 191,521 35.9 % $ 194,215 38.8 % $ (2,694) (1.4 %) CNC Machining 243,327 45.6 206,887 41.3 36,440 17.6 3D Printing 80,298 15.1 83,767 16.7 (3,469) (4.1) Sheet Metal 17,160 3.2 15,265 3.0 1,895 12.4 Other Revenue 821 0.2 756 0.2 65 8.6 Total revenue $ 533,127 100.0 % $ 500,890 100.0 % $ 32,237 6.4 % By product line, our revenue increase was driven by a 17.6% increase in CNC Machining revenue, a 12.4% increase in Sheet Metal revenue, and a 8.6% increase in Other Revenue, which was partially offset by a 4.1% decrease in 3D Printing revenue, and 1.4% decrease in Injection Molding revenue, in each case for 2025 compared with 2024. 35 Table of Contents Cost of Revenue, Gross Profit and Gross Margin Cost of Revenue.
In order to achieve our goals, we anticipate continued substantial investments in technology and personnel, resulting in increased operating expenses in the future. Marketing and sales. Marketing and sales expense consists primarily of employee compensation, benefits, commissions, stock-based compensation, marketing programs such as electronic, print and pay-per-click advertising, trade shows and other related overhead.
Marketing and sales expense consists primarily of employee compensation, benefits, commissions, stock-based compensation, marketing programs such as electronic, print and pay-per-click advertising, trade shows and other related overhead.
For injection molding contracts with multiple performance obligations, we allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling price based on the price charged to customers. Goodwill We recognize goodwill in accordance with ASC 350, Intangibles—Goodwill and Other .
The majority of our injection molding contracts have multiple performance obligations including one obligation to produce the mold and a second obligation to produce parts. For injection molding contracts with multiple performance obligations, we allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling price based on the price charged to customers.
Our general and administrative expense decreased $1.5 million, or 2.2%, for 2024 compared to 2023 primarily due to a decrease in intangible amortization costs of $2.2 million, other operating costs of $1.7 million and administrative costs of $0.3 million, which were partially offset by an increase in stock-based compensation of $1.1 million, personnel and related costs of $1.0 million and professional services of $0.6 million.
Our general and administrative expense increased $5.5 million, or 8.5%, for 2025 compared to 2024 primarily due to increases of $3.6 million in personnel and related costs, primarily related to the previously disclosed CEO transition that occurred in 2025, and incentive compensation related to our annual short-term incentive compensation plan, $2.3 million of administrative costs, $1.0 million of professional services, which were partially offset by a decrease $1.4 million in stock-based compensation.
By reportable segment, revenue in the United States decreased $0.6 million, or 0.2%, for 2024 compared with 2023. Revenue in Europe decreased $2.4 million, or 2.2%, for 2024 compared with 2023.
By reportable segment, revenue in the United States increased $36.1 million, or 9.1%, for 2025 compared with 2024. Revenue in Europe decreased $3.9 million, or 3.7%, for 2025 compared with 2024.
Results of Operations The following table summarizes our results of operations and the related changes for the periods indicated. The results below are not necessarily indicative of the results for future periods.
The results below are not necessarily indicative of the results for future periods.
The cash flow from operating activities during 2023 compared to 2022 increased $11.2 million primarily due to changes in operating assets and liabilities and other items of $7.2 million, increases in deferred taxes of $1.8 million, increases in interest on finance lease obligations of $1.1 million and increases in net income of $120.7 million, which were partially offset by decreases in stock-based compensation of $1.6 million and loss on impairment of goodwill of $118.0 million.
The cash flow from operating activities during 2025 compared to 2024 decreased $3.3 million primarily due to changes in operating assets and liabilities and other of $10.6 million, a decrease in non-cash fixed impairment charges primarily related to certain operations in Germany during 2024 of $2.1 million, a decrease in depreciation and amortization of $2.0 million, decreases in stock-based compensation of $1.3 million, which were partially offset by increases in deferred taxes of $8.1 million and net income of $4.6 million.
Goodwill is the excess of cost of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is allocated to our reporting units, which are determined by the discrete financial information available for the component and whether it is regularly reviewed by segment management.
Goodwill is allocated to our reporting units, which are determined by the discrete financial information available for the component and whether it is regularly reviewed by segment management. Our reporting units are the United States and Europe. Goodwill is not amortized.
Marketing and sales expense increased $4.4 million, or 5.0%, for 2024 compared to 2023, primarily due to increases in personnel and related c osts of $2.7 million, marketing demand generation costs increases of $0.7 million and other operating costs of $1.0 million for 2024 compared with 2023. Research and Development.
Marketing and sales expense increased $6.2 million, or 6.8%, for 2025 compared to 2024, primarily due to increases in personnel and related c osts of $5.0 million, primarily due to incentive compensation related to commissions and our annual short-term incentive compensation plan and merit increases, and marketing program cost increases of $1.2 million. Research and Development.
Costs related to disposal and exit activities. Our decision to exit and close certain operations in Germany resulted in $5.6 million in operating expenses during 2024. Operating expenses included $3.3 million of employee severance and $2.3 million related to the write-down of fixed assets.
Our decision to exit and close certain operations in Germany resulted in $0.3 million in operating expenses during 2025 primarily related to the write down of fixed assets and other related costs. These items are the result of changes from the estimated amounts accrued in 2024 and the timing of employee separation payments.
Cost of Revenue, Gross Profit and Gross Margin Cost of Revenue. Cost of revenue decreased $4.2 million, or 1.5%, for 2024 compared to 2023, which was more than the rate of revenue decrease of 0.6% for 2024 compared to 2023.
Cost of revenue increased $18.3 million, or 6.6%, for 2025 compared to 2024, which was more than the rate of revenue increase of 6.4% for 2025 compared to 2024.
Total revenue decreased to $500.9 million in the year December 31, 2024 from $503.9 million in the year ended December 31, 2023.
Total revenue increased to $533.1 million in the year December 31, 2025 from $500.9 million in the year ended December 31, 2024. During this period, our operating expenses increased to $212.0 million in the year ended December 31, 2025 from $203.3 million in the year ended December 31, 2024.
Gross margin increased to 44.6% of revenue in 2024 from 44.1% in 2023, primarily due to focused management of resources aligned to order volumes, partially supported by increased automation . Operating Expenses Marketing and Sales.
Gross Profit and Gross Margin. Gross profit increased to $237.1 million in 2025 from $223.2 million in 2024. Gross margin decreased to 44.5% of revenue in 2025 from 44.6% in 2024. Operating Expenses Marketing and Sales.
We have added product lines and expanded those product lines to meet the needs of our customers, which has historically driven our growth. In 2022, we launched the first iteration of our integrated offer in Europe and followed with the launch in the United States in early 2023.
We have added additional manufacturing services and expanded those services to meet the needs of our customers, which has ultimately driven our growth.
Other income, net for 2023 primarily consisted of $3.9 million foreign currency translation loss from the completion on the closure of our Japan business and $1.1 million of interest expense, which was partially offset by a $3.3 million of interest income on investments and $1.5 of other income and gains on foreign currency. Provision for Income Taxes.
Other income, net for 2024 primarily consisted of $5.4 million of interest income on investments and other income, partially offset by $0.4 million of foreign currency losses and $0.2 million of interest expense and other expenses. 36 Table of Contents Provision for Income Taxes. Our income tax provision increased by $1.7 million for 2025 when compared to 2024.
We may require additional capital beyond our currently forecasted amounts. Any such required additional capital may not be available on terms acceptable to us, or at all.
We may require additional capital beyond our currently forecasted amounts.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed5 unchanged
Biggest changeDuring the year ended December 31, 2023, we recognized a foreign currency translation loss of $3.9 million in connection with completing the closure of our Japan business. We recognized net foreign currency losses of $0.4 million and gains of $0.2 million for the years ended December 31, 2024 and 2023, respectively. 43 Table of Contents
Biggest changeDuring the year ended December 31, 2023, we recognized a foreign currency translation loss of $3.9 million in connection with completing the closure of our Japan business. We recognized net foreign currency gains of $0.6 million and losses of $0.4 million for the years ended December 31, 2025 and 2024, respectively. 44 Table of Contents
In future periods, we will continue to evaluate our investment policy in order to continue our overall goals. Foreign Currency Risk As a result of our foreign operations, we have revenue, expenses, assets and liabilities that are denominated in foreign currencies. We generate revenue and incur production costs and operating expenses in British Pound, Euro and Japanese Yen.
In future periods, we will continue to evaluate our investment policy in order to continue our overall goals. Foreign Currency Risk As a result of our foreign operations, we have revenue, expenses, assets and liabilities that are denominated in foreign currencies. We generate revenue and incur production costs and operating expenses in British Pound and Euro.

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