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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM 10-Q
(Mark One)
þQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2026
or
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number: 001-35435
Proto Labs, Inc.
(Exact name of registrant as specified in its charter)
Minnesota41-1939628
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
5540 Pioneer Creek Drive
Maple Plain, Minnesota
55359
(Address of principal executive offices)(Zip Code)
(763) 479-3680
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, Par Value $0.001 Per SharePRLBNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þYes oNo
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). þYes oNo
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerþAccelerated filer o
Non-accelerated filero
Smaller reporting companyoEmerging growth companyo
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). oYes þNo
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 23,794,045 shares of Common Stock, par value $0.001 per share, were outstanding at April 28, 2026.

Table of Contents
Proto Labs, Inc.
TABLE OF CONTENTS
ItemDescriptionPage
1
Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Proto Labs, Inc.
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
March 31,
2026		December 31,
2025
(Unaudited)
Assets
Current assets
Cash and cash equivalents$123,973 $110,826 
Short-term marketable securities12,307 17,297 
Accounts receivable, net of allowance for credit losses of $2,844 and $2,668 as of March 31, 2026, and December 31, 2025, respectively
85,553 78,962 
Inventory14,871 14,401 
Prepaid expenses and other current assets10,698 9,590 
Income taxes receivable1,175 2,465 
Total current assets248,577 233,541 
Property and equipment, net209,463 215,261 
Goodwill273,991 273,991 
Other intangible assets, net17,527 18,612 
Long-term marketable securities21,721 14,308 
Operating lease assets2,490 2,836 
Finance lease assets357 424 
Other long-term assets4,442 4,442 
Total assets$778,568 $763,415 
Liabilities and shareholders' equity
Current liabilities  
Accounts payable$19,625 $15,104 
Accrued compensation17,258 23,674 
Accrued liabilities and other32,595 26,783 
Current operating lease liabilities1,037 1,155 
Current finance lease liabilities207 286 
Total current liabilities70,722 67,002 
Long-term operating lease liabilities1,377 1,606 
Long-term deferred tax liabilities18,949 16,598 
Other long-term liabilities4,394 4,277 
Total liabilities95,442 89,483 
Shareholders' equity  
Preferred stock, $0.001 par value, authorized 10,000,000 shares; issued and outstanding 0 shares as of March 31, 2026, and December 31, 2025, respectively
— — 
Common stock, $0.001 par value, authorized 150,000,000 shares; issued and outstanding 23,792,488 and 23,627,422 shares as of March 31, 2026, and December 31, 2025, respectively
24 24 
Additional paid-in capital457,714 454,120 
Retained earnings248,875 240,764 
Accumulated other comprehensive loss(23,487)(20,976)
Total shareholders' equity683,126 673,932 
Total liabilities and shareholders' equity$778,568 $763,415 
The accompanying notes are an integral part of these consolidated financial statements.
2
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Proto Labs, Inc.
Consolidated Statements of Comprehensive Income
(In thousands, except share and per share amounts)
(Unaudited)
Three Months Ended
March 31,
20262025
Statements of Operations:
Revenue$139,336 $126,205 
Cost of revenue75,744 70,507 
Gross profit63,592 55,698 
Operating expenses  
Marketing and sales24,780 23,749 
Research and development10,540 10,609 
General and administrative17,012 16,848 
Restructuring and transformation costs1,421 — 
Benefits related to exit and disposal activities— (39)
Total operating expenses53,753 51,167 
Income from operations9,839 4,531 
Other income, net1,478 1,454 
Income before income taxes11,317 5,985 
Provision for income taxes3,206 2,386 
Net income$8,111 $3,599 
Net income per share:
Basic$0.34 $0.15 
Diluted$0.33 $0.15 
Shares used to compute net income per share:
Basic23,835,61224,135,320
Diluted24,287,26024,435,844
Comprehensive Income (net of tax)
Comprehensive income$5,600 $4,692 
The accompanying notes are an integral part of these consolidated financial statements.
3
Table of Contents
Proto Labs, Inc.
Consolidated Statements of Shareholders' Equity
(In thousands, except share amounts)
Common StockAdditional
Paid-In
Capital		Retained
Earnings		Accumulated Other
Comprehensive
Loss		Total
SharesAmount
Balance at December 31, 202523,627,422$24 $454,120 $240,764 $(20,976)$673,932 
Common shares issued on exercise of options and other, net of shares withheld for tax obligations165,066 — 375 — — 375 
Stock-based compensation expense— — 3,219 — — 3,219 
 Net income— — — 8,111 — 8,111 
Other comprehensive income
Foreign currency translation adjustment— — — — (2,382)(2,382)
Net unrealized loss on investments in securities— — — — (129)(129)
 Comprehensive income    5,600 
Balance at March 31, 202623,792,488$24 $457,714 $248,875 $(23,487)$683,126 

Common StockAdditional
Paid-In
Capital		Retained
Earnings		Accumulated Other
Comprehensive
Loss		Total
SharesAmount
Balance at December 31, 202424,226,088$24 $453,705 $244,406 $(27,984)$670,151 
Common shares issued on exercise of options and other, net of shares withheld for tax obligations58,291— (961)— — (961)
Stock-based compensation expense— — 3,992 — — 3,992 
Repurchases of common stock(513,739)(1)(9,621)(11,451)— (21,073)
 Net income— — — 3,599 — 3,599 
Other comprehensive income
Foreign currency translation adjustment— — — — 1,003 1,003 
Net unrealized gains on investments in securities— — — — 90 90 
 Comprehensive income4,692 
Balance at March 31, 202523,770,640$23 $447,115 $236,554 $(26,891)$656,801 
The accompanying notes are an integral part of these consolidated financial statements.
4
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Proto Labs, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
March 31,
20262025
Operating activities
Net income$8,111 $3,599 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization8,073 8,694 
Stock-based compensation expense3,219 3,992 
Deferred taxes2,390 (1,552)
Interest on finance lease obligations3 6 
Impairments related to exit and closure of facilities— 219 
Gain on disposal of property and equipment(139)— 
Other(172)43 
Changes in operating assets and liabilities:  
Accounts receivable(6,858)(7,405)
Inventories(585)(698)
Prepaid expenses and other(1,165)517 
Income taxes1,263 3,702 
Accounts payable3,947 758 
Accrued liabilities and other(551)6,504 
Net cash provided by operating activities17,536 18,379 
Investing activities
Purchases of property, equipment and other capital assets(3,540)(1,262)
Proceeds from sales of property, equipment and other capital assets1,279 — 
Purchases of marketable securities(9,007)(6,552)
Proceeds from maturities of marketable securities6,500 4,905 
Net cash used in investing activities(4,768)(2,909)
Financing activities
Proceeds from issuance of common stock from equity plans3,608 287 
Purchases of shares withheld for tax obligations(2,871)(1,248)
Repurchases of common stock— (20,890)
Principal repayments of finance lease obligations(79)(76)
Net cash provided by (used in) financing activities658 (21,927)
Effect of exchange rate changes on cash and cash equivalents(279)78 
Net increase (decrease) in cash and cash equivalents13,147 (6,379)
Cash and cash equivalents, beginning of period110,826 89,071 
Cash and cash equivalents, end of period$123,973 $82,692 
The accompanying notes are an integral part of these consolidated financial statements.
5
Table of Contents
Notes to Consolidated Financial Statements
Note 1 – Basis of Presentation
The unaudited interim Consolidated Financial Statements of Proto Labs, Inc. (Protolabs, the Company, we, us or our) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, the accompanying financial statements reflect all adjustments necessary for a fair presentation of the Company’s statements of financial position, results of operations and cash flows for the periods presented. Except as otherwise disclosed herein, these adjustments consist of normal, recurring items. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole.
The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. For further information, refer to the audited Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission (SEC) on February 20, 2026.
The accompanying Consolidated Balance Sheet as of December 31, 2025 was derived from the audited Consolidated Financial Statements but does not include all disclosures required by U.S. GAAP for a full set of financial statements. This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Consolidated Financial Statements and Notes included in the Company's Annual Report on Form 10-K filed on February 20, 2026 as referenced above.
Note 2 – Recent Accounting Pronouncements
The Company did not recently adopt any accounting pronouncements that had a material impact on the Company's Consolidated Financial Statements.
Apart from the items discussed in our Annual Report on Form 10-K for the year ended December 31, 2025, there are no other new accounting pronouncements that are expected to have a significant impact on the Company’s consolidated financial statements or related disclosures.
Note 3 – Net Income per Common Share
Basic net income per share is computed based on the weighted-average number of common shares outstanding. Diluted net income per share is computed based on the weighted-average number of common shares outstanding, increased by the number of additional shares that would have been outstanding had potentially dilutive common shares been issued and reduced by the number of shares the Company could have repurchased from the proceeds from issuance of the potentially dilutive shares. Potentially dilutive shares of common stock include stock options and other stock-based awards granted under stock-based compensation plans and shares committed to be purchased under the employee stock purchase plan. Performance stock units are excluded from the calculation of dilutive potential common shares until the performance conditions have been satisfied. Anti-dilutive options were excluded from the calculation of diluted weighted average shares outstanding and were 120,716 and 436,669 for the three months ended March 31, 2026 and 2025, respectively.
6
The table below sets forth the computation of basic and diluted net income per share:
Three Months Ended
March 31,
(in thousands, except share and per share amounts)20262025
Net income$8,111 $3,599 
Basic - weighted-average shares outstanding:23,835,61224,135,320
Effect of dilutive securities:
Employee stock options and other451,648300,524
Diluted - weighted-average shares outstanding:24,287,26024,435,844
Net income per share:
Basic$0.34 $0.15 
Diluted$0.33 $0.15 
Note 4 – Goodwill and Other Intangible Assets
There were no changes in the carrying amount of goodwill during the three months ended March 31, 2026.
Intangible assets other than goodwill at March 31, 2026 and December 31, 2025 were as follows:
March 31, 2026December 31, 2025Useful
Life (in years)		Weighted Average
Useful Life Remaining
(in years)
(in thousands)GrossAccumulated
Amortization		NetGrossAccumulated
Amortization		Net
Intangible assets with finite lives:
Non-compete agreement$844 $(844)$— $850 $(843)$7 
2.0 - 5.0
0
Software technology13,229 (10,835)2,394 13,229 (10,493)2,736 10.01.8
Software platform26,807 (11,674)15,133 27,110 (11,241)15,869 12.06.8
Total intangible assets$40,880 $(23,353)$17,527 $41,189 $(22,577)$18,612 
Intangible assets allocated to the Protolabs Network entities consisted of intangible assets of €11.6 million in Europe and $16.6 million in the United States as of the date of the acquisition. The Euro denominated intangible assets are translated at the end of each period using the current exchange rates resulting in a foreign currency translation adjustment that is recorded as a component of Other Comprehensive Income. Foreign currency unrealized losses related to intangible assets were $0.8 million and $0.5 million as of March 31, 2026 and December 31, 2025, respectively. Amortization expense for intangible assets was $0.9 million for each of the three months ended March 31, 2026 and 2025.
7
Estimated aggregated amortization expense based on the current carrying value of the amortizable intangible assets and current exchange rates is as follows:
(in thousands)Estimated Amortization Expense
Remaining 2026$2,688
20273,581
20282,215
20292,215
20302,215
Thereafter4,613
Total estimated amortization expense$17,527
Note 5 – Fair Value Measurements
Accounting Standards Codification, Fair Value Measurement (ASC 820), defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that requires classification based on observable and unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:
Level 1—Quoted prices in active markets for identical assets or liabilities.
Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The Company's assets and liabilities that are required to be measured or disclosed at fair value on a recurring basis include cash and cash equivalents and marketable securities. The Company’s cash consists of bank deposits and cash equivalents consist primarily of money market mutual funds. The Company determines the fair value of these investments using Level 1 inputs. The Company's marketable securities consist of short-term and long-term agency, municipal, corporate and other debt securities. Fair value for the corporate debt securities is primarily determined based on quoted market prices (Level 1). Fair values for the U.S. municipal securities, U.S. government agency securities, certificates of deposit and U.S. treasury securities are primarily determined using dealer quotes or quoted market prices for similar securities (Level 2).
The following table summarizes financial assets as of March 31, 2026 and December 31, 2025 measured at fair value on a recurring basis:
March 31, 2026December 31, 2025
(in thousands)Level 1Level 2Level 3Level 1Level 2Level 3
Financial Assets:
Cash$122,839 $— $— $107,462 $— $— 
Money market mutual fund1,134 — — 3,364 — — 
Marketable securities17,381 16,647 — 18,301 13,304 — 
Total$141,354 $16,647 $— $129,127 $13,304 $— 
8
Note 6 – Marketable Securities
The Company invests in short-term and long-term agency, municipal, corporate and other debt securities. The securities are categorized as available-for-sale and are recorded at fair value. The following table summarizes information regarding the Company’s short-term and long-term marketable securities as of March 31, 2026 and December 31, 2025:
March 31, 2026
(in thousands)CostUnrealized GainsUnrealized LossesFair Value
U.S. government agency securities$10,500 $4 $(35)$10,469 
Corporate debt securities14,951 5 (72)14,884 
U.S. municipal securities7,656 17 — 7,673 
U.S. treasury bonds1,000 2 — 1,002 
Total marketable securities$34,107 $28 $(107)$34,028 
December 31, 2025
(in thousands)CostUnrealized GainsUnrealized LossesFair Value
U.S. government agency securities$7,500 $9 $(4)$7,505 
Corporate debt securities14,424 9 (7)14,426 
U.S. municipal securities8,631 39 — 8,670 
U.S. treasury bonds1,000 4 — 1,004 
Total marketable securities$31,555 $61 $(11)$31,605 
Fair values for the corporate debt securities are primarily determined based on quoted market prices (Level 1). Fair values for the U.S. municipal securities, U.S. government agency securities, certificates of deposit and U.S. treasury securities are primarily determined using dealer quotes or quoted market prices for similar securities (Level 2).
Classification of marketable securities as current or non-current is based upon the security’s maturity date as of the date of these financial statements.
The March 31, 2026 balance of available-for-sale debt securities by contractual maturity is shown in the following table at fair value. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.
(in thousands)March 31,
2026
Due in one year or less$12,307 
Due after one year through five years21,721 
Total marketable securities$34,028 
Note 7 – Inventory
Inventory consists primarily of raw materials, which are recorded at the lower of cost and net realizable value using the standard cost method, which approximates first-in, first-out (FIFO) cost. The Company periodically reviews its inventory for slow-moving, damaged and discontinued items and provides allowances to reduce such items identified to their recoverable amounts.
9
The Company’s inventory consisted of the following as of the dates indicated:
(in thousands)March 31,
2026		December 31,
2025
Total inventory$15,925 $15,441 
Allowance for obsolescence(1,054)(1,040)
Inventory, net of allowance$14,871 $14,401 
Note 8 – Stock-Based Compensation
On July 8, 2022, the board of directors approved the Proto Labs, Inc. 2022 Long-Term Incentive Plan, which was approved by the Company's shareholders at a Special Meeting of Shareholders on August 29, 2022, and subsequently amended and restated by the Company's shareholders at the Annual Meeting of Shareholders on May 23, 2024 (as amended and restated, and subsequently further amended, the 2022 Plan) to increase the number of shares available for issuance pursuant to awards under the 2022 Plan by an additional 430,000 shares, add a minimum vesting requirement, and extend the expiration date so that the term of the 2022 Plan runs for ten years from the date of the shareholder approval. On May 20, 2025, the Company's shareholders approved an amendment to the 2022 Plan to increase the number of shares available for issuance pursuant to awards under the 2022 Plan by an additional 296,000 shares. Under the 2022 Plan, the Company has the ability to grant stock options, stock appreciation rights (SARs), restricted stock, restricted stock units, other stock-based awards and cash incentive awards. Awards under the 2022 Plan have a maximum term of ten years from the date of grant. The compensation and talent committee may provide that the vesting or payment of any award will be subject to the attainment of specified performance measures in addition to the satisfaction of any continued service requirements and the compensation and talent committee will determine whether such measures have been achieved. The per-share exercise price of stock options and SARs granted under the 2022 Plan generally may not be less than the fair market value of a share of our common stock on the date of the grant.
The Company also has outstanding awards under the 2012 Long-Term Incentive Plan, as amended (the 2012 Plan), although the plan expired in February 2022 and no additional awards have since been or will be made under the 2012 Plan. The 2012 Plan provided the Company the ability to grant stock options, SARs, restricted stock, restricted stock units, other stock-based awards and cash incentive awards. Awards under the 2012 Plan that subsequently expired, were forfeited or cancelled, or settled in cash after August 29, 2022 became available for awards under the 2022 Plan.
In addition, the Company has outstanding awards that were not granted under the 2022 Plan or the 2012 Plan. These awards were granted as inducement awards to the Company’s new Chief Executive Officer in May 2025.
Employee Stock Purchase Plan
The Company’s 2012 Employee Stock Purchase Plan (ESPP) allows eligible employees to purchase a variable number of shares of the Company’s common stock each offering period at a discount through payroll deductions of up to 15 percent of their eligible compensation, subject to plan limitations. The ESPP provides for six-month offering periods with a single purchase period ending May 15 and November 15, respectively. At the end of each offering period, employees are able to purchase shares at 85 percent of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the last trading day of the offering period.
Stock-Based Compensation Expense
Stock-based compensation expense was $3.2 million and $4.0 million for the three months ended March 31, 2026 and 2025, respectively.
10
Stock Options
The following table summarizes stock option activity during the three months ended March 31, 2026:
Stock OptionsWeighted-
Average
Exercise Price
Options outstanding at December 31, 2025360,214$52.94 
Granted51,13562.63 
Exercised(72,234)44.94 
Forfeited(14,732)57.12 
Expired(24,853)119.35 
Options outstanding at March 31, 2026299,530$51.01 
Exercisable at March 31, 2026110,231$62.95 
The outstanding options generally have a term of ten years. For employees, options granted become exercisable ratably over the vesting period, which is generally a period of four years, beginning on the first anniversary of the grant date, subject to the employee’s continuing service to the Company.
The weighted-average grant date fair value of options that were granted during the three months ended March 31, 2026 was $34.35.
The following table provides the assumptions used in the Black-Scholes pricing model valuation of options during the three months ended March 31, 2026 and 2025:
Three Months Ended
March 31,
20262025
Risk-free interest rate
3.71%
4.13%
Expected life (years)
6.25
6.25
Expected volatility
52.69%
52.99%
Expected dividend yield0%0%
As of March 31, 2026, there was $4.0 million of unrecognized compensation expense related to unvested stock options, which is expected to be recognized over a weighted-average period of 3.2 years.
Restricted Stock Units
Restricted stock unit (RSU) awards are share-settled awards and restrictions lapse ratably over the vesting period, which is generally a period from three to four years, beginning on the first anniversary of the grant date, subject to the employee's continuing service to the Company. For the board of directors, restrictions generally lapse in full on the first anniversary of the grant date.
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The following table summarizes restricted stock units activity during the three months ended March 31, 2026:
Restricted
Stock Units		Weighted-
Average
Grant Date
Fair Value
Per Share
Restricted stock units at December 31, 2025696,076$39.07 
Granted30,52162.63 
Restrictions lapsed(23,587)38.06 
Forfeited(39,770)36.72 
Restricted stock units at March 31, 2026663,240$40.38 
As of March 31, 2026, there was $15.4 million of unrecognized compensation expense related to non-vested restricted stock units, which is expected to be recognized over a weighted-average period of 2.7 years.
Performance Stock Units
Performance stock units (PSUs) are expressed in terms of a target number of PSUs, with anywhere between 0 percent and 200 percent of that target number capable of being earned and vesting at the end of a three-year performance period depending on the Company’s three-year cumulative total shareholder return performance relative to an index and the award recipient’s continued employment. The Company’s PSUs are based on market conditions and the related compensation cost is based on the fair value at grant date calculated using a Monte Carlo pricing model.
The following table summarizes performance stock units activity during the three months ended March 31, 2026:
Performance
Stock Units		Weighted-
Average
Grant Date
Fair Value
Per Share
Performance stock units at December 31, 2025231,959$56.21 
Granted59,999105.67 
Restrictions lapsed(121,334)57.79
Performance change60,66757.79 
Performance stock units at March 31, 2026231,291$68.63 
The following table provides the assumptions used in the Monte Carlo pricing model valuation of PSUs during the three months ended March 31, 2026 and 2025:
Three Months Ended
March 31,
20262025
Risk-free interest rate
3.48%
4.08%
Expected life (years)
2.85
2.85
Expected volatility
47.40%
52.40%
Expected dividend yield0%0%
As of March 31, 2026, there was $11.7 million of unrecognized compensation expense related to non-vested performance stock units, which is expected to be recognized over a weighted-average period of 2.4 years.
12
Employee Stock Purchase Plan
The following table presents the assumptions used to estimate the fair value of the ESPP during the three months ended March 31, 2026 and 2025:
Three Months Ended
March 31,
20262025
Risk-free interest rate
3.67%
4.29%
Expected life (months)6.006.00
Expected volatility
39.13%
65.60%
Expected dividend yield0%0%
Note 9 – Accumulated Other Comprehensive (Loss) Income
Other comprehensive income (loss) is comprised of foreign currency translation adjustments and net unrealized gains (losses) on investments in securities.
The following table presents the changes in accumulated other comprehensive (loss) income balances during the three months ended March 31, 2026 and 2025:
Three Months Ended
March 31,
(in thousands)20262025
Balance at beginning of period$(20,976)$(27,984)
Foreign currency translation adjustments
Other comprehensive (loss) income before reclassifications(2,382)1,003 
Amounts reclassified from accumulated other comprehensive loss— — 
Net current-period other comprehensive (loss) income(2,382)1,003 
Net unrealized (losses) gains on investments in securities
Other comprehensive (loss) income before reclassifications(129)90 
Amounts reclassified from accumulated other comprehensive loss— — 
Net current-period other comprehensive (loss) income(129)90 
Balance at end of period$(23,487)$(26,891)
Note 10 – Income Taxes
The Company is subject to income tax in multiple jurisdictions and the use of estimates is required to determine the provision for income taxes. For the three months ended March 31, 2026 and 2025, the Company recorded an income tax provision of $3.2 million and $2.4 million, respectively. The income tax provision is based on the estimated annual effective tax rate for the year applied to pre-tax income. The effective income tax rate for the three months ended March 31, 2026 was 28.3 percent compared to 39.9 percent in the same period of the prior year. The effective tax rate decreased by 11.6 percent for the three months ended March 31, 2026 when compared to the same period in 2025, primarily due to an increase in tax benefits from the vesting of restricted stock and the exercise of stock options, as well as a one-time tax benefit related to the successful closure of a state income tax audit.
The effective income tax rate for the three months ended March 31, 2026 differs from the U.S. federal statutory rate of 21.0 percent due to various factors, including operating in multiple state and foreign jurisdictions partially offset by tax credits for which the Company qualifies.
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The Company had unrecognized tax benefits totaling $3.1 million as of March 31, 2026 and December 31, 2025, respectively, that if recognized would result in a reduction of the Company’s effective tax rate. The liabilities are classified as other long-term liabilities in the accompanying consolidated balance sheets. The Company recognizes interest and penalties related to income tax matters in income tax expense and reports the liability in current or long-term income taxes payable as appropriate.
Note 11 – Segment Reporting
The Company’s reportable segments are based on the internal reporting used by the Company’s CEO, who is the chief operating decision maker (CODM), to assess operating performance and make decisions about the allocation of resources. The CODM's primary profit measure for purposes of resource allocation and performance assessment is income (loss) from operations at the segment level. This measure is used to evaluate current-period performance, develop forecasts and budgets, and make decisions about capital and other resource allocations between segments. The Company’s reportable segments are based upon geographic region, consisting of the United States and Europe. The Corporate Unallocated category includes non-reportable segments, as well as research and development and general and administrative costs that the Company does not allocate directly to its operating segments.
Revenue in the United States and Europe is derived primarily from Injection Molding, CNC Machining, 3D Printing and Sheet Metal product lines. Injection Molding revenue consists of sales of custom injection molds and injection-molded parts. CNC Machining revenue consists of sales of CNC-machined and lathe-turned customer parts. 3D Printing revenue consists of sales of 3D-printed parts. Sheet Metal revenue consists of sales of fabricated sheet metal parts.
Intercompany transactions primarily relate to intercontinental activity and have been eliminated and are excluded from the reported amounts. The difference between income (loss) from operations and pre-tax income relates to foreign currency-related gains and losses and interest income on cash balances and investments, which are not allocated to business segments.
The following table summarizes selected financial information by reportable segments:
Three Months Ended March 31, 2026
(in thousands)
United StatesEuropeCorporate UnallocatedTotal
Revenue$112,127 $27,209 $— $139,336 
Segment expenses1
79,158 31,048 17,870 128,076 
Restructuring and transformation costs— 1,090 331 1,421 
Income (Loss) from Operations$32,969 $(4,929)$(18,201)$9,839 
Three Months Ended March 31, 2025
(in thousands)
United StatesEuropeCorporate UnallocatedTotal
Revenue$100,267 $25,938 $— $126,205 
Segment expenses1
74,770 29,800 17,143 121,713 
Benefits related to exit and disposal activities— (39)— (39)
Income (Loss) from Operations$25,497 $(3,823)$(17,143)$4,531 
1 Segment expenses consist primarily of raw materials, equipment depreciation, employee compensation including benefits, commissions and stock-based compensation, facilities costs and overhead allocations associated with the manufacturing process for molds and custom parts, marketing programs such as electronic, print and pay-per-click advertising and trade shows and other related costs for our United States and Europe reportable segments. Segment expenses for our Corporate Unallocated reportable segment consist primarily of personnel and outside
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service costs related to the development of new processes and product lines, enhancements of existing product lines, software developed for internal use, maintenance of internally developed software, quality assurance and testing, employee compensation including benefits and stock-based compensation, severance, professional service fees related to accounting, tax and legal, and other related overhead costs.
Total long-lived assets, expenditures for additions to long-lived assets, and depreciation and amortization expense were as follows:
(in thousands)March 31,
2026		December 31,
2025
Total long-lived assets:
United States$166,318 $170,228 
Europe43,145 45,033 
Total Long-lived Assets$209,463 $215,261 
Three Months Ended
March 31,
(in thousands)20262025
Expenditures for additions to long-lived assets:
United States$3,201 $1,168 
Europe339 94 
Total expenditures for additions to long-lived assets$3,540 $1,262 
Three Months Ended
March 31,
(in thousands)20262025
Depreciation and Amortization:
United States$6,611 $7,009 
Europe1,435 1,606 
Corporate Unallocated27 79 
Total depreciation and amortization$8,073 $8,694 
Revenue by product line the three months ended March 31, 2026 and 2025 were as follows:
Three Months Ended
March 31,
(dollars in thousands)20262025
Revenue:
Injection Molding$51,068 $48,723 
CNC Machining63,245 52,843 
3D Printing20,465 20,194 
Sheet Metal4,351 4,211 
Other Revenue207 234 
Total Revenue$139,336 $126,205 
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2025.
Forward-Looking Statements
Statements contained in this report regarding matters that are not historical or current facts are “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve known and unknown risks, uncertainties and other factors that may cause our results to be materially different than those expressed or implied in such statements. Certain of these risk factors and others are described in Item 1A. “Risk Factors” of this Quarterly Report on Form 10-Q, as well as our most recent Annual Report on Form 10-K as filed with the Securities and Exchange Commission (SEC). Other unknown or unpredictable factors also could have material adverse effects on our future results. We cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, we expressly disclaim any intent or obligation to update any forward-looking statements to reflect subsequent events or circumstances.
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. 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 their product cycle. 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. Our automated quoting and manufacturing systems are highly integrated with our manufacturing and fulfillment systems, which allow us to offer a vast array of manufacturing technologies in a variety of materials across a continuum of lead times and prices. 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. 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. 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.
Our customers conduct nearly all of their business with us over the Internet. We target our products to 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. We believe our use of advanced technologies enable 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.
Our primary manufacturing product lines currently include Injection Molding, CNC Machining, 3D Printing and Sheet Metal. We continually seek to expand the range of sizes and geometric complexity of the parts we can make with these processes, to extend the variety of materials we are able to support, and to identify additional manufacturing processes to which we can apply our technology or incorporate into our manufacturing network in order to better serve the evolving preferences and needs of our customers.
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Table of Contents
Key Financial Measures and Trends
Revenue
Our operations are comprised of two geographic operating segments in the United States and Europe.
Revenue is derived from the sale or parts fulfilled through our owned manufacturing factories and worldwide network of premium manufacturing partners. Our product lines consist of Injection Molding, CNC Machining, 3D Printing and Sheet Metal. Injection Molding revenue consists of sales of custom injection molds and injection-molded parts. CNC Machining revenue consists of sales of CNC-machined custom parts. 3D Printing revenue consists of sales of 3D-printed parts. Sheet Metal revenue consists of sales of fabricated sheet metal custom parts.
Protolabs’ long-term strategy is to serve customers across the entire lifecycle of a part—from prototype through production. To support this long-term strategy, we have aligned the organization around four strategic pillars:
•Elevate Customer Experience – remove friction across the customer journey to deliver a best-in-class experience and increase revenue per customer. Enable employees to serve customers more efficiently, driving faster growth.
•Accelerate Innovation – reaccelerate innovation across core manufacturing services to drive outsized growth and an accelerated pace of new releases. Leverage differentiated IP and deep manufacturing & engineering talent.
•Expand Production – take a deliberate, customer-led approach—prioritizing the right customers, applications, and capabilities. Begin with most strategic customers and scale over time.
•Drive Operational Efficiency – expand our factory and Protolabs network gross margins and capture operating expense leverage via efficiencies and productivity. Reallocate resources and funds to invest in the highest-priority growth initiatives.
The following table summarizes our unique customer contacts and revenue per customer contact:
Three Months Ended March 31,
20262025
Revenue (in thousands)$139,336 $126,205 
Customer contacts19,82621,627
Revenue per customer contact1
$7,028$5,836
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. Customer contacts are product developers, engineers, procurement and supply chain professionals and other individuals who place an order, and that order is shipped and invoiced during the period. The Company believes revenue per customer contact is useful to investors in evaluating the underlying business trends and ongoing operating performance of the Company.
Cost of Revenue, Gross Profit and Gross Margin
Cost of revenue consists primarily of raw materials, equipment depreciation, employee compensation including benefits and stock-based compensation, facilities costs, overhead allocations associated with the manufacturing process for molds and custom parts, and costs to procure parts through our network of premium manufacturing partners. We expect our personnel-related costs to increase in order to retain and attract top talent and remain competitive in the market. Overall, we expect cost of revenue to increase in absolute dollars.
We define gross profit as our revenue less our cost of revenue, and we define gross margin as gross profit expressed as a percentage of revenue. Our gross profit and gross margin are affected by many factors, including our mix of revenue produced in our internal manufacturing operations and outsourced to our external manufacturing partners, pricing, sales volume, manufacturing costs, the costs associated with increasing production capacity, the mix between domestic and foreign revenue sources, the mix of revenue by product line, and foreign currency exchange rates.
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Table of Contents
Operating Expenses
Operating expenses consist of marketing and sales, research and development and general and administrative expenses. Personnel-related costs are the most significant component in each of these categories.
Our business strategy is to continue to be a leading online and technology-enabled manufacturer of quick-turn, on-demand injection-molded, CNC-machined, 3D-printed and fabricated sheet metal custom parts for prototyping and low-volume production. 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 demand generation costs such as electronic, print and pay-per-click advertising, trade shows and other related overhead. We expect sales and marketing expense to increase in the future as we increase the number of marketing and sales professionals and marketing demand generation costs targeted to increase our customer base and grow revenue.
Research and development. Research and development expense consists primarily of personnel and outside service costs related to the development of new processes and product lines, enhancement of existing product lines, development of software for internal use, maintenance of internally developed software, quality assurance and testing. Costs for internal use software are evaluated by project and capitalized where appropriate under ASC 350-40, Intangibles — Goodwill and Other, Internal-Use Software. We expect research and development expense to increase in the future as we seek to enhance our e-commerce interface technology, internal software and supporting business systems, and continue to expand our product lines.
General and administrative. 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. Costs related to actions taken to improve operational efficiency and streamline the organization. Such costs include employee severance and related benefits, professional fees, and other charges in connection with organizational realignments. Cost savings generated from these restructuring and transformation initiatives are being redeployed primarily into technology investments, including enhancements to core systems, automation, and digital capabilities, to support growth in the Company's core business and further drive scale and efficiency.
Costs related to disposal and exit activities. Costs related to disposal and exit activities is driven by our decision to close certain manufacturing facilities in Germany. The expenses consist primarily of operating expenses, including employee severance, write-down of fixed assets and facility-related charges. Benefits may result from adjustments to initial estimates regarding the nature and timing of disposal and exit activities.
Other Income, net
Other income, net primarily consists of foreign currency-related gains and losses and interest income on cash balances and investments. Our foreign currency-related gains and losses will vary depending upon movements in underlying foreign currency exchange rates. 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. Overall, our effective tax rate for 2026 and beyond may differ from historical effective tax rates due to increases 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 our effective tax rate.
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Table of Contents
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.
Three Months Ended March 31,Change
(dollars in thousands)20262025$%
Revenue$139,336 100.0$126,205 100.0$13,131 10.4
Cost of revenue75,744 54.470,507 55.95,237 7.4
Gross profit63,592 45.655,698 44.17,894 14.2
Operating expenses
Marketing and sales24,780 17.823,749 18.81,031 4.3
Research and development10,540 7.610,609 8.4(69)(0.7)
General and administrative17,012 12.216,848 13.4164 1.0
Restructuring and transformation costs1,421 1.0— —1,421 *
Benefits related to exit and disposal activities— —(39)—39 (100.0)
Total operating expenses53,753 38.651,167 40.52,586 5.1
Income from operations9,839 7.14,531 3.65,308 117.1
Other income, net1,478 1.11,454 1.224 1.7
Income before income taxes11,317 8.15,985 4.75,332 89.1
Provision for income taxes3,206 2.32,386 1.9820 34.4
Net income$8,111 5.8%$3,599 2.9%$4,512 125.4 %
* Percentage change not meaningful
Stock-based compensation expense included in the statements of operations data above for the three months ended March 31, 2026 and 2025 were as follows:
Three Months Ended March 31,
(dollars in thousands)20262025
Stock options, RSUs and PSUs$2,942 $3,661 
Employee stock purchase plan277 331 
Total stock-based compensation expense$3,219 $3,992 
Cost of revenue$394 $460 
Operating expenses:
  Marketing and sales705 778 
  Research and development428 625 
  General and administrative1,692 2,129 
Total stock-based compensation expense$3,219 $3,992 
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Comparison of Three Months Ended March 31, 2026 and 2025
Revenue
Revenue by reportable segment and the related changes for the three months ended March 31, 2026 and 2025 were as follows:
Three Months Ended March 31,
20262025Change
(dollars in thousands)$% of Total Revenue$% of Total Revenue$%
Revenue:
United States$112,127 80.5 %$100,267 79.4 %$11,860 11.8 %
Europe27,209 19.5 %25,938 20.6 %1,271 4.9 
Total revenue$139,336 100.0%$126,205 100.0%$13,131 10.4%
Our revenue increased $13.1 million, or 10.4%, for the three months ended March 31, 2026 compared to the same period in 2025. The growth in revenue was primarily driven by an increase in CNC revenue in the United States from key growth industries, primarily aerospace and defense, and market dynamics that have driven increases in price. By reportable segment, revenue in the United States increased $11.9 million, or 11.8%, for the three months ended March 31, 2026 compared to the same period in 2025. Revenue in Europe increased $1.3 million, or 4.9%, for the three months ended March 31, 2026 compared to the same period in 2025. International revenue was favorably impacted by $2.2 million during the three months ended March 31, 2026 compared to the same period in 2025 as a result of foreign currency movements, primarily due to the strengthening of the British Pound and Euro relative to the United States Dollar.
During the three months ended March 31, 2026, we served 19,826 unique customer contacts, which is a decrease of 8.3% from the same period in 2025. During the three months ended March 31, 2026, our customer contacts served decreased while our revenue grew. This was primarily due to our mix of customers served in the quarter as compared to the same period in 2025 and our focus on larger, more strategic customers as we strive to be their supplier of choice by serving their custom parts needs through our comprehensive offer. Our revenue per customer contact grew 20.4% for the three months ended March 31, 2026 compared to the same period in 2025.
Revenue by product line and the related changes for the three months ended March 31, 2026 and 2025 were as follows:
Three Months Ended March 31,
20262025Change
(dollars in thousands)$% of Total Revenue$% of Total Revenue$%
Revenue:
Injection Molding$51,068 36.7 %$48,723 38.6 %$2,345 4.8 %
CNC Machining63,245 45.4 52,843 41.9 10,402 19.7 
3D Printing20,465 14.7 20,194 16.0 271 1.3 
Sheet Metal4,351 3.1 4,211 3.3 140 3.3 
Other Revenue207 0.1 234 0.2 (27)(11.5)
Total Revenue$139,336 100.0 %$126,205 100.0 %$13,131 10.4 %
By product line, our revenue increase was driven by a 19.7% increase in CNC Machining revenue, a 4.8% increase in Injection Molding revenue, a 1.3% increase in 3D Printing revenue, and a 3.3% increase in Sheet Metal revenue, in each case for the three months ended March 31, 2026 compared to the same period in 2025.
Cost of Revenue, Gross Profit and Gross Margin
20
Cost of Revenue. Cost of revenue increased $5.2 million, or 7.4%, for the three months ended March 31, 2026 compared to the same period in 2025, while revenue increased 10.4% for the three months ended March 31, 2026 compared to the same period in 2025. The increase in the cost of revenue of $5.2 million was primarily driven by higher revenue volumes resulting in increases of $3.9 million in raw material and production and fulfillment related costs, and $1.7 million in personnel and related costs, primarily due to increases in head count and overtime costs and contract labor to meet increased order volume, during the three months ended March 31, 2026 compared to the same period in 2025, partially offset by decreases in equipment and facility-related costs of $0.4 million.
Gross Profit and Gross Margin. Gross profit increased $7.9 million, or 14.2%, for the three months ended March 31, 2026 compared to the same period in 2025. Gross margin increased to 45.6% in the three months ended March 31, 2026 from 44.1% in the same period in 2025.
Operating Expenses, Other Income, net and Provision for Income Taxes
Marketing and Sales. Our marketing and sales expenses increased $1.0 million during the three months ended March 31, 2026 compared to the same period in 2025 primarily due to increases in personnel and related costs of $0.7 million and $0.3 million in marketing program costs.
Research and Development. Our research and development expenses decreased $0.1 million, or 0.7%, during the three months ended March 31, 2026 compared to the same period in 2025 primarily due to decreases in personnel and related costs of $0.3 million and $0.1 million in professional services, partially offset by increases of $0.3 million in operating costs.
General and Administrative. Our general and administrative expenses increased $0.2 million, or 1.0%, during the three months ended March 31, 2026 compared to the same period in 2025 primarily due to increases in personnel and related costs of $0.5 million and $0.4 million in professional services, partially offset by decreases of $0.4 million in stock-based compensation, and $0.3 million in administrative costs.
Restructuring and transformation costs. Restructuring and transformation costs include expenses related to actions taken to improve operational efficiency and streamline the organization and resulted in $1.4 million in operating expenses during 2026 primarily related to severance and related benefit costs, and professional services. We had no restructuring and transformation costs for the same period in 2025.
Costs related to exit and disposal. We had no costs related to exit and disposal activities during the three months ended March 31, 2026. Our decision to exit and close certain operations in Germany resulted in less than a $0.1 million in personnel and related cost benefits during the three months ended March 31, 2025.
Other income, net. We recognized other income, net of $1.5 million for the three months ended March 31, 2026 and the same period in 2025. Other income, net for the three months ended March 31, 2026 primarily consisted of $1.2 million in interest income on investments and $0.3 million of other income. Other income, net for the three months ended March 31, 2025 primarily consisted of $1.4 million in interest income on investments and other income.
Provision for Income Taxes. Our effective tax rate of 28.3% for the three months ended March 31, 2026 decreased 11.6% compared to 39.9% for the same period in 2025. The decrease in the effective tax rate was primarily due to an increase in tax benefits from the vesting of restricted stock and the exercise of stock options, as well as a one-time tax benefit related to the successful closure of a state income tax audit. Our income tax provision of $3.2 million for the three months ended March 31, 2026 increased $0.8 million as compared to our income tax provision of $2.4 million for the same period in 2025.
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Liquidity and Capital Resources
Cash Flows
The following table summarizes our cash flows during the three months ended March 31, 2026 and 2025:
Three Months Ended
March 31,
(dollars in thousands)20262025
Net cash provided by operating activities$17,536 $18,379 
Net cash used in investing activities(4,768)(2,909)
Net cash provided by (used in) financing activities658 (21,927)
Effect of exchange rate changes on cash and cash equivalents(279)78 
Net increase (decrease) in cash and cash equivalents$13,147 $(6,379)
Sources of Liquidity
Historically, we have primarily financed our operations and capital expenditures through cash flow from operations. We had cash and cash equivalents of $124.0 million as of March 31, 2026, an increase of $13.1 million from December 31, 2025. The increase in our cash was primarily due to cash provided by operating activities of $17.5 million, which were partially offset by net purchases of marketable securities of $2.5 million and net purchases of property, equipment and other capital assets of $2.3 million.
We believe that our existing cash and cash equivalents together with cash generated from operations will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months.
Cash Flows from Operating Activities
Cash flows from operating activities were $17.5 million during the three months ended March 31, 2026 and primarily consisted of net income of $8.1 million, adjusted for certain non-cash items, including depreciation and amortization of $8.1 million, stock-based compensation expense of $3.2 million and increases in deferred taxes of $2.4 million, which were partially offset by changes in operating assets and liabilities and other items totaling $4.1 million, and a gain on disposal of property and equipment of $0.1 million. Cash flows from operating activities were $18.4 million during the three months ended March 31, 2025 and primarily consisted of net income of $3.6 million, adjusted for certain non-cash items, including depreciation and amortization of $8.7 million, stock-based compensation expense of $4.0 million and changes in operating assets and liabilities and other items totaling $3.4 million and an impairment of leased facility of $0.2 million, which were partially offset by deferred taxes of $1.6 million.
Cash flows from operating activities decreased $0.8 million during the three months ended March 31, 2026 compared to the same period in 2025, primarily due to changes in operating assets and liabilities and other items totaling $7.9 million, decreases in stock-based compensation of $0.8 million, and decreases in depreciation and amortization of $0.6 million, which were partially offset by increases in net income of $4.5 million and increases in deferred taxes of $3.9 million.
Cash Flows from Investing Activities
Cash used in investing activities was $4.8 million during the three months ended March 31, 2026, consisting of $2.5 million of net purchases of marketable securities and $2.3 million for net purchases of property, equipment and other capital assets.
Cash used in investing activities was $2.9 million during the three months ended March 31, 2025, consisting of $1.3 million for net purchases of property, equipment and other capital assets and $1.6 million of purchases of marketable securities, net of proceeds from call redemptions and maturities.
22
Cash Flows from Financing Activities
Cash provided by financing activities was $0.7 million during the three months ended March 31, 2026, consisting of $3.6 million in proceeds related to equity plans, which were partially offset by $2.9 million in purchases of shares withheld for tax obligations associated with equity transactions and $0.1 million for repayments of finance lease obligations.
Cash used in financing activities was $21.9 million during the three months ended March 31, 2025, consisting of $20.9 million in repurchases of common stock, $1.2 million in purchases of shares withheld for tax obligations associated with equity transactions and $0.1 million for repayments of finance lease obligations, which were partially offset by $0.3 million in proceeds related to the exercise of non-qualified stock options.
Critical Accounting Estimates
We have adopted various accounting policies to prepare the Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The preparation of these financial statements requires us to make estimates, judgments and assumptions. Our significant accounting policies and estimates are disclosed in Note 2 to the Consolidated Financial Statements included Part II, Item 8 in our Annual Report on Form 10-K for the year ended December 31, 2025. There were no material changes to our critical accounting policies and estimates during the three months ended March 31, 2026.
Recent Accounting Pronouncements
For information on recent accounting pronouncements, see Note 2 to the Consolidated Financial Statements appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
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 and sourcing costs and operating expenses in British Pounds and Euros.
Our operating results and cash flows are adversely impacted when the United States Dollar appreciates relative to foreign currencies. Additionally, our operating results and cash flows are adversely impacted when the British Pound appreciates relative to the Euro. As we expand internationally, our results of operations and cash flows will become increasingly subject to changes in foreign currency exchange rates.
We have not used forward contracts or currency borrowings to hedge our exposure to foreign currency risk. Foreign currency risk can be assessed by estimating the change in results of operations or financial position resulting from a hypothetical 10% adverse change in foreign exchange rates. We believe such a change would generally not have a material impact on our financial position, but could have a material impact on our results of operations. We recognized foreign currency gains of less than $0.1 million and foreign currency losses of $0.1 million for the three months ended March 31, 2026 and 2025, respectively. The changes in foreign exchange rates had a favorable impact on consolidated revenue of $2.2 million for the three months ended March 31, 2026 compared to the same period in 2025.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures are effective and provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported accurately and within the time frames specified in the SEC’s rules and forms and accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
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Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we are subject to various legal proceedings and claims that arise in the ordinary course of our business activities. Although the results of litigation and claims cannot be predicted with certainty, as of the date of these financial statements, we do not believe we are party to any litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business.
Item 1A. Risk Factors
Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 includes a discussion of our risk factors. There have been no material changes from the risk factors described in our Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On February 4, 2025, our board of directors authorized a share repurchase program (the February 2025 Program). 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 $63.3 million remaining under this authorization. The February 2025 Program does not obligate us to acquire any particular amount of shares of our common stock and remains in effect until the total authorized amount is expended or until further action by our board of directors. 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.
We did not repurchase any shares of our common stock during the three months ended March 31, 2026 under the February 2025 program.
Item 3. Defaults Upon Senior Securities
No matters to disclose.
Item 4. Mine Safety Disclosures
No matters to disclose.
Item 5. Other Information
During the three months ended March 31, 2026, no directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or any non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).
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Item 6. Exhibits
The following documents are filed or furnished, as applicable, as part of this Quarterly Report on Form 10-Q:
Exhibit NumberDescription of Exhibit
3.1
3.2
3.3
10.1
31.1
31.2
32.1
101.INSInline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)*
101.SCHInline XBRL Taxonomy Extension Schema Document*
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document*
101.LABInline XBRL Taxonomy Extension Label Linkbase Document*
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document*
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*
*Filed herewith.
**Furnished herewith.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Proto Labs, Inc.
Date: May 1, 2026
/s/ Suresh Krishna
Suresh Krishna
President and Chief Executive Officer
(Principal Executive Officer)
Date: May 1, 2026
/s/ Daniel Schumacher
Daniel Schumacher
Chief Financial Officer
(Duly Authorized Officer, Principal Financial Officer and Principal Accounting Officer)
26

Exhibit 31.1
CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Suresh Krishna, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Proto Labs, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 1, 2026
By:/s/ Suresh Krishna
Suresh Krishna
President and Chief Executive Officer
(Principal Executive Officer)

Exhibit 31.2
CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Daniel Schumacher, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Proto Labs, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 1, 2026
By:/s/ Daniel Schumacher
Daniel Schumacher
Chief Financial Officer
(Principal Financial Officer)

Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Suresh Krishna, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Proto Labs, Inc. on Form 10-Q for the fiscal quarter ended March 31, 2026 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Proto Labs, Inc.
Date: May 1, 2026
By:/s/ Suresh Krishna
Name:Suresh Krishna
Title:President and Chief Executive Officer
I, Daniel Schumacher, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Proto Labs, Inc. on Form 10-Q for the fiscal quarter ended March 31, 2026 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Proto Labs, Inc.
Date: May 1, 2026
By:/s/ Daniel Schumacher
Name:Daniel Schumacher
Title:Chief Financial Officer