Proto Labs, Inc.

At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Jason Frankman, Vice President and Corporate Controller for ProtoLabs. Please go ahead, sir.

Thank you, Melissa. Good morning, everyone, and welcome to ProtoLabs' fourth quarter and full year 2024 earnings conference call. I'm joined today by Rob Bedore, President and Chief Executive Officer, and Dan Schumacher, Chief Financial Officer. This morning, ProtoLabs issued a press release announcing its financial results for the fourth quarter and full year ended December 31, 2024. The release is available on the company's website. In addition, a prepared slide presentation is available online at the web address provided in our press release. Our discussion today will include statements relating to future performance and expectations that are or may be considered forward-looking statements and subject to many risks and uncertainties that could cause actual results to differ materially from expectations. Please refer to our earnings press release and recent SEC filings, including our annual report on Form 10-K for information on certain risks that could cause actual outcomes to differ materially and adversely from any forward-looking statements made today. The results and guidance we will discuss include non-GAAP financial measures consistent with our past practice. Please refer to our press release and the accompanying slide presentation at the investor relations section of our company website for a complete reconciliation of GAAP and non-GAAP results. Now, I'll turn the call over to Rob Bedore. Rob?

Thanks, Jason. Good morning, everyone, and thank you for joining our fourth quarter and full year 2024 earnings call. We closed out the year on a strong note with fourth quarter financial results above our expectations as we continue to generate strong earnings and cash flows while returning capital to shareholders. In 2024, we expanded our consolidated gross margin, increased earnings per share, and generated $78 million of cash from operations. Furthermore, we demonstrated the success of our model in several ways last year. Customers using the combined offer grew 50%, revenue per customer expanded, and revenue from production use cases outgrew prototyping. 2024 was a year of transformation of Protolabs. At the beginning of the year, we explained our strategy of expanding beyond prototyping into production. Then in the middle of the year, we announced the reorganization of the business in order to elevate and empower our go-to-market teams to serve the customer better. As part of the reorganization, we also formed a new global operations org to optimize our manufacturing footprint and ensure our full global capabilities are available to customers in any region. Our progress across the key indicators I just shared demonstrates transformation is working as customers adopt more and more of our production offerings. That said, revenue growth in recent years has not met my expectations. We have the right offer and are organized to deliver at scale. To drive revenue growth in 2025 and beyond, we're making the following investments. First, we are investing significantly in marketing to build our brand as a production manufacturer. We have an unmatched set of capabilities that solve critical customer needs across the lifecycle of their products, and we want to make sure that message is heard. This work includes a new campaign that began in January and creates awareness of Protolabs' expanded offering and capability. Since our founding in 1999 as Protomold and up until recently as Protolabs, the name of our company has been synonymous with prototyping, and we are continuing to shift that narrative. I would encourage you all to check out Manufacture Like a Pro series of videos and other marketing collateral. There's a preview on slide six of our earnings deck. It's really great work by our teams. We will bring this new messaging to market through additional channels focused on production buyers. Second, consistent with our go-to-market reorganization, we are allocating additional resources to improve our sales enablement tools and processes. This will drive growth by enabling our teams to better understand the strategic production needs of our customers and make it easier for customers to interact with Prolabs in this context. Third, we're funding several organizational initiatives to continue to improve and expand our production capabilities. Our production offer has expanded dramatically in recent years. I've been quite pleased with our improvements, and we're leaning in even further. These initiatives include a more streamlined production quoting process, additional inspection reports, industry certifications, refined manufacturing processes, additional robotics, and other proprietary automation in our factories. We will continue to invest to expand our production capabilities to better serve our customers' production needs and to drive growth. These three areas of investment are strong levers to grow the business. We delivered solid results in 2024, a year of evolution for the company. Across the organization, we have been focused on redeploying our resources to grow revenue and expand margins in both factory and network. As discussed last year, we have refocused our regional go-to-market teams to ensure the best possible customer experience from prototype to production. Our teams provide collaborative support for customers across sales, marketing, application engineering, production experts, customer success, and others. This team-based selling approach ensures better targeting and customer penetration, deeper understanding of our customers' needs, faster responses, and better solutions from prototyping through production. To support these efforts, we've established a new revenue operations team led by Greg Forsberg, who joined the company in January. As a member of the executive leadership team, Greg will oversee the systems and process improvements to ensure we serve our customers efficiently and effectively across these use cases. Meanwhile, the newly formed global operations organization has the responsibility to fulfill customer orders in the most efficient manner by a factory or network. They bring our complete global capabilities to every customer in each region. In October, we announced the closure of a manufacturing facility in Germany, an example of how the Global Operations Org has already begun optimizing our global footprint while serving customer needs. A realigned structure went into full effect as we entered 2025 with proper goals and objectives established for our annual planning. We are set up to benefit from the first full year under this new operating structure. Throughout 2024, we continued our journey to serve more production use cases. In a press release in January, we highlighted the expansion of our full-service production manufacturing capabilities. Protolabs offers end-to-end manufacturing services to help serve customers at every stage of their product life cycles. Our production offering includes improved pricing options for larger part orders, enhanced documented quality control, and focused industry certifications that are critical in production. As a manufacturer ourselves, with over 25 years of experience producing parts across a multitude of manufacturing processes and techniques, our deep manufacturing expertise is a differentiator for Protolabs in our industry and is key to the value we provide our customers. And we continue to offer the world's best low-volume, quick-turn prototyping capability. The combination of these two offerings enables Protolabs to serve the customer across the lifecycle of their products, In fact, we are truly the only one-stop shop in our industry, and our sales and marketing teams are actively driving awareness of our expanded capabilities. We are a great partner throughout the product lifecycle, providing immense value to customers that are focused on simplifying and consolidating supply chains while maintaining resilience and agility. As part of our broader production offer, the entire customer experience at ProtoLabs is evolving. In addition to immediate online access to instant quoting, customers have the option to connect directly with a team of production experts for complete program management on projects. We are focused on low to mid volume production in our top five industry verticals, predominantly complex and regulated industries. Protolabs is uniquely positioned to serve these production use cases. We serve over 50,000 customers annually who are used to relying on us for their prototyping and product innovation. We already have strong relationships with these customers. With Protolabs already qualified as a vendor, it's advantageous for them to advance into production with us. In addition, the production work we are winning carries a higher margin than the low-value, high-quantity commodity manufacturing. So Protolabs is truly a single end-to-end manufacturing resource for companies around the world in any macroeconomic environment. In recent years, global supply chain shocks have been a catalyst for our customers to build efficiency and resiliency into their supply chains, and Protolabs has been there and has evolved along with them. With respect to the current global trade policy developments, I'd remind you that we have a proven track record of being a valuable partner to customers during global supply chain disruptions. This period of potential disruption may provide an opportunity for Protolabs as customers look to source parts differently. We have capacity and can deliver reliably across many use cases and through our global manufacturing footprint. In summary, we delivered solid fourth quarter and full year 2024 results while transforming the company for future growth. I've highlighted the transformation and investments made during 2024 and early 2025 to reorganize our structure and better position the company for growth and value creation over the long term. We will continue to drive growth in our key metrics, customers using the combined offer and revenue per customer. Those are metrics that I evaluate as we continue to serve more customer use cases across product life cycles. To that end, our priority in 2025 is to grow revenue, and here's how we plan to do so. 2025 is the first full year under our new organizational structure, and we're leaning in. We have transformed the business to accelerate growth and improve efficiency. As I've said, I believe we can grow much faster, and our internal realignment better positions the business for future success. Second, we will serve more production use cases. I've spoken at length about our expanded production capabilities and the investments they're in. Production is outgrowing prototyping, and we are investing accordingly in go-to-market and fulfillment. We are committed to forging deeper partnerships with our customers, ensuring full production support, and capturing more of this massive production market. Third, we will also reinforce the core by investing in prototyping. Protolabs offers the best prototype service in the world, and we will continue to expand our advantage. We are expanding our high-requirement injection molding and CNC machining capabilities at our fastest lead times, adding additional 3D printing materials and technologies, and further accelerating our already industry-leading speeds. What makes ProLabs unique is the combination of factory and network, which enables us to serve use cases across our customers' product life cycles from prototyping through production to end-of-life. Finally, I want to say thank you to all our employees at ProtoLabs for their commitment and hard work. We have a lot to be excited about in 2025, and I'm grateful for their tireless efforts to advance our mission and expertly serve our customers. We are dedicated to continue to inspire and engage our employees to foster a great working environment and drive the business forward. In 2025, we're committed to driving revenue growth and increasing value for shareholders. Thank you. Now I'll hand it over to Dan to cover the financials.