Proto Labs NYSE: PRLB reported record first-quarter 2026 revenue and said the year is off to a “strong start,” driven by double-digit growth, expanding margins, and rising engagement with larger strategic customers.
Record Q1 revenue and five-year high for adjusted EPS
President and CEO Suresh Krishna said first-quarter revenue increased 10% year-over-year, marking “another record revenue quarter.” He added that the company delivered “double-digit revenue growth, significant gross margin expansion, and improved operating leverage,” and noted that Proto Labs posted its highest non-GAAP earnings per share in more than five years.
Dan Schumacher, chief financial officer, said first-quarter revenue was a company record $139.3 million, up 10.4% year-over-year, or 8.7% on a constant-currency basis. U.S. revenue rose 11.8%, while Europe declined 3.4% in constant currencies.
Non-GAAP gross margin was 46.2%, up 140 basis points both sequentially and year-over-year, which Schumacher attributed to higher factory gross margins from volume improvements and pricing increases, plus favorable mix as factory revenue grew faster than network revenue.
Adjusted EBITDA was $22.8 million, or 16.3% of revenue, compared with $17.4 million, or 13.8%, in the year-ago quarter. Non-GAAP EPS was $0.54, up $0.21 year-over-year. Schumacher said the result was driven by volume, factory gross margin expansion, and operating expense leverage, and called it the highest adjusted EPS since the third quarter of 2020.
The company generated $17.5 million in cash from operations and ended the quarter with $158 million in cash and investments and zero debt, Schumacher said.
Machining strength led results; injection molding and metal 3D printing also highlighted
Management repeatedly pointed to strong demand in CNC machining. Schumacher said first-quarter CNC machining revenue grew 17.6% year-over-year in constant currencies, while U.S. CNC machining revenue rose 23%. Krishna said U.S. CNC machining grew “over 20%” year-over-year and cited strength in aerospace and defense—“including space exploration, satellites, and drones”—as well as growth in robotics.
Schumacher said the company also executed “targeted pricing actions” during the quarter that were “in line with machining market dynamics.”
Other service lines showed more modest changes:
- Injection molding grew 3.5% in constant currencies, which Schumacher said was supported by “strong performance in large orders with strategic customers.” In Q&A, he described increased traction with larger customers and said the business is shifting toward more production work over time.
- 3D printing revenue was flat year-over-year in constant currencies, as U.S. growth was offset by “weak demand in Europe,” Schumacher said. He added that U.S. demand for metal 3D parts remained strong, with DMLS revenue up nearly 30% year-over-year.
- Sheet metal grew 2.3% year-over-year in constant currencies, driven by aerospace and defense and industrial tech, according to Schumacher.
Asked about network performance, Krishna said the company saw “some weakness in network demand in 3D printing” and that management is making go-to-market changes “to accelerate network revenue growth in the future.” Later, Schumacher provided a 31% network gross margin figure in response to an analyst question.
Customer engagement and production focus
Krishna emphasized increased traction with larger strategic accounts. He said revenue per customer grew 20% year-over-year, which he described as evidence of momentum with enterprise customers. He also highlighted U.S. performance, noting the region grew 12%, the fourth straight quarter of double-digit growth.
On the company’s longer-term direction, Krishna reiterated Proto Labs’ strategy of supporting customers “across the product life cycle” and said the company remains focused on four pillars:
- Elevating the customer experience
- Accelerating innovation
- Expanding production
- Driving operational efficiency
In response to a question on production versus prototyping exposure, Krishna said the company is “early in our journey to build the capabilities needed for production” and has not provided a specific percentage. He added that larger strategic customers want Proto Labs to “get into production,” and said the company is seeing interest in longer runs, including in injection molding and 3D printing.
Krishna also said Proto Labs achieved AS9100 certification in its European operations during the quarter, which he said expands its ability to support aerospace and defense customers globally and helps customers regionalize supply chains.
Operational changes: leadership alignment, quality focus, India center, and Europe reset
Krishna said 2026 will be a “year of transformation and acceleration” aimed at improving customer experience and building scalable systems. He outlined several organizational and operational actions discussed on the prior quarter’s call and updated progress in Q1.
Among the changes, Krishna said the company combined product and technology teams under its CTAIO, Marc Kermisch, to align product and technology as the company accelerates its innovation roadmap.
Krishna also announced that Jonathan Blasdell joined in April as head of Protolabs Business Excellence Systems. Krishna said Blasdell brings more than 30 years of continuous improvement experience, including at Danaher, and will focus on strengthening management systems, operating rhythms, and problem-solving capabilities to improve execution and productivity.
Krishna said the company is “already seeing tangible quality improvements” in injection molding and made investments during the quarter to “drastically improve quality” with its largest strategic injection molding customers, which management expects to reduce friction and support production expansion.
In addition, Krishna said Proto Labs established a Global Capability Center (GCC) in India and is building out its team and presence there, calling it a “critical enabler” of its long-term strategy.
On Europe, Krishna said the company took “deliberate actions to reset the business,” including targeted reductions in the first quarter to align costs with revenue levels and improvements in go-to-market operations. He said early results included 11% sequential growth in the first quarter. In Q&A, Krishna said the company is aligning sales and marketing around core industries—specifically aerospace and defense and medical—and increasing targeted customer engagement.
Guidance: Q2 outlook raised sequentially; full-year view unchanged
Schumacher reiterated the company’s expectation for full-year 2026 revenue growth of 6% to 8%. For the second quarter, Proto Labs expects revenue of $140 million to $148 million, which at the midpoint implies about 7% year-over-year growth. The company expects foreign exchange to be a $500,000 favorable revenue impact versus the second quarter of 2025.
For the second quarter, Schumacher said non-GAAP add-backs are expected to include approximately $4 million of stock-based compensation, $900,000 of amortization expense, and $600,000 of restructuring and transformation costs, with a non-GAAP effective tax rate of 25% to 26%. The company guided to second-quarter non-GAAP EPS of $0.50 to $0.58.
In Q&A, Schumacher said the company chose not to raise full-year guidance despite the strong first quarter due to macro uncertainty and limited longer-term visibility, adding that the outlook assumes typical seasonality: sequential growth from Q1 to Q2, flat to slightly up in Q3, and a decline in Q4 due to holidays.
Schumacher also said operating expenses are expected to rise through 2026 as the company invests in strategic initiatives, including R&D and software development, after targeted cost reductions—particularly in Europe—helped lower adjusted operating expenses as a percentage of revenue in the first quarter.
About Proto Labs NYSE: PRLB
Proto Labs, Inc is a digital manufacturing company that offers on-demand production services for custom parts and prototypes. Utilizing technologies such as 3D printing (additive manufacturing), CNC machining and injection molding, the company transforms digital CAD designs into functional parts on accelerated timelines. Its platform-driven process combines automated quoting, rapid tool generation and manufacturing execution to serve product developers, engineers and small- to medium-sized production runs.
Founded in 1999 by Larry Lukis, Proto Labs has championed the application of digital workflows to traditional manufacturing methods.
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