PRLB - Earnings call transcript Q4 2017

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Operator

Greetings and welcome to Proto Labs' Fourth Quarter and Year-End Earnings. At this time, all participants are in a listen only mode. A question-and-answer session will follow the formal presentation. I would now like to turn the conference over to your host, Dan Schumacher. Thank you.

begin. may You

Dan Schumacher

the protolabs.com. and the Vicki operator, company's is and at everyone. me ended its XXXX. morning With Way, a XX, Labs Thank release December quarter press our good on and President available website is announcing before This Officer. Holt, Chief results Officer; release opened, and today the Proto our issued for you, financial Financial morning, market fourth Chief The John year Executive full

Please Before recent would statements that to and considered that I to could any subject we release certain discussion future Report our refer actual made that our may uncertainties Annual and or risks press cause earnings outcomes expectations today. everyone SEC begin, to materially results remind to adversely actual like and Form differ cause many and including will to expectations. be XX-K, information relating and include on our statements differ that from are materially risks forward-looking performance for on statements filings, to from forward-looking could

Additionally, our the section refer website practice. GAAP results. a guidance results our include Investor to past the release complete press within Please of of measures consistent our will non-GAAP to non-GAAP Relations discuss financial and company reconciliation with for we

Officer Proto Vicki? Labs. Now, I'd like and to turn the call of President Chief over to Vicki Executive Holt,

Victoria M. Holt

quarter our then our the full quarter and initiatives in our accomplishments our I'll our evolving outlook in-depth and Then Dan, XXXX. view the call. our XXXX fourth of review out significant fourth on financials key you, good of begin more for Thank and conference of a results. will XXXX. us with you John morning, offer a lay quarter Thank by overview joining I'll everyone. provide followed strategy year of for an for first our and

customers' our first are is invest be demands. discussed like who company meeting, that become a us Analyst our evolving would in to for we we to in happy way your Day. meet more take capabilities how comments, joined his of in to thank those solution. will One In as services December and to Following to which we evolving questions. we're our total I a business continuing

and RAPID of the on example our this of one acquisition to Manufacturing, Metal expands which Our X, fourth Sheet strategy. is service as completed our execution December acquisition was the adds engage portfolio clear expansions in services This to capabilities our more the CNC and of We our complex to these needs. with of Machining addition at allow combined us deeper customers larger envelope developed internally to include their levels feel parts. recent meet

employees. are and employees this excited confident New shareholders add Proto beneficial acquisition Labs' Hampshire to and be our to in RAPID customers, family will the are to the prove to We

addition In on to has utilizing acquisition, to a technology. software acquisition of opportunity in leverage our RAPID the this small the closed we software Proto company and Labs been also excited the in about we're this further manufacturing December.

results quarter over last included revenue. XX% RAPID or accounting quarter of year. $X.X was an from fourth in month The completing $XX a services. pleased all at quarterly saw the where the our across quarter, fourth year of for revenue are high-end We our guidance record fourth we in report performance million million, $XX the one increase quarter strong the acquisition to of million for Revenue the

was the of revenue RAPID, XX%. Excluding impact growth

delivering chain provide driven unprecedented them as strong is to we optimize their speed. help custom reduce solutions customers supply executions by by Our to product at parts risk and revenue development, performance accelerate our

are with We our pleased performance.

a soft XXXX. relatively However, XX% we do rate growth in acknowledge exceptional of this from that QX benefited

Japan increased in revenue grew XX.X%, impact X% growth year, XX% of constant a RAPID. the excluding the XX.X% a by U.S. Europe Revenue basis currency. currency. and over breakdown XX% constant increased in geography, on at in Looking the XX% reported prior in

of service, the or prior XX% CNC grew Molding year. RAPID. year. prior excluding XX%, by the from increased Machining In XX% revenue XD from grew the Printing Injection XX% terms impact of

In from our our our in through revenue partially Sheet had Metal investments The strength we've to can Manufacturing with RAPID acquisition. results $X.X investments. million continued coupled CNC we our advance addition, the attributed benefits in in to R&D be made new from capabilities sales

full traction the marketing all at growth grew services. we we grew XX.X% the As revenue Molding strong leading XX% across our initiatives. double-digits XD and in gaining with Injection Printing growth, are XX.X%. Each and sales results demonstrate grew way grew look the service with at year, XX.X% CNC These

year, significant for the of ratio Fein, our we've Americas added and also force. region Sales in David of to in We've the sales Officer, Europe. the to Revenue allow more Chief added both managers Presidents with During sales improve and and the starting manager sales of and each sales leadership, development rep sales Vice coaching

is calls, in region progressive of constant in our last call drive our our growth Americas returns discussed this previous Japan sales benefit. this initiated approach to we've in We during long-term especially with currency. growth the annual XXXX X% strong annual are We investments in evolution in XX.X%. the As of seeing disappointment an with the in results discussed and of

Pang, sustainable opportunities. to pursue Country reviewed leave performance, of drive we decided other our Manager As to the strategies company to Japan Thomas

market continue are the opportunity in We achieve market potential. looking us Manager to and is Japan new there help this believe significant for Country to for actively a

$X.XX fourth net revenue earnings our record range. On share. $XX.X quarter $X.XX or was share. $XX.X record income also our within quarterly we In guidance GAAP addition million to or non-GAAP in per was produced were net basis, income per that performance, a million the

over non-GAAP EPS XX.X% representing diluted was $X.XX, a For the XXXX. XXXX, full increase year our

strengthen our to and to addition In accelerate our to was XXXX ability development, product optimize position product enable chain. in sales One bring and marketing reduce performance, solid of productivity and the team activities that our more customers number we accomplished and competitive a to drive our in strengthened of financial developers. have further supply sales objective risk objectives increased to

As to grew relationships, in deepen approach this of in area and our XX.X% revenues product excess customer to in XX%. evolving developers we discussed earlier, sales year over the Through demonstrating returns. our our growing leadership investments are while XX,XXX new new

Another injection envelope services QX. parts expand our PolyJet we of continue our area to to as of in was printed and be the HP Jet needs. parts in Multi more a printed was existing focus Fusion molding customers' QX parts XXXX able molded to successful offering in on-demand XD in to our year XD manufacturing fulfill launched and QX, insert of very

These portfolio, solution another CNC capabilities. sales from more as our accomplishment We RAPID acquisition approach our total us and year. our of will with a expansions to service objectives acquisition years we expanded to engage the benefits achieved see to in was overall evolving Our and the Sheet of Metal, quarter our with the the fourth significant combined This strategic a we allow added add and customers. we service come. become in to our our customers marketing differently value provider increase for financial that

in a growth gross Europe taken XD a While few execution printing Japan, we revenue in as improve, was can such areas as XXXX. our margins strong and whole in we still have

on we Now how Analyst can let's solutions At our our as to are provide look Day, them. evolving for December we we the forward to customers discussed priorities XXXX. to a approach our expand our focus company

are revolution to digital on the to market have leader enable We customers trends. are the the a manufacturing our to in capitalize and excited emerging opportunity

and continue We have their will the to our serve expand execute expanding to our established engage customers' coming customers year, needs. of our In that we a problem. business to plan strong model is of to tackle more our capabilities more with on

for by XXXX expanding the customers; our our expanding scale our by our our including Manufacturing. capabilities integration priorities base remains revenue and of services; grow and Our penetrating enhance of operation, fairly consistent: RAPID the existing customer increase

priority. me a minute describe to Let take each

approach our us deepen e-commerce into is customers our priority years relationships to Serving to engagement over with our growth. value customers we This world-class we've evolve will far and requires journey to experience that past continue where effectively continue first it's continue our one the most. resonates future. embarked both the to proposition sales drive and enhance few revenue our on our to is customers a Our and with

our team, will book This leadership, productivity. services to capabilities a and and sellers effectively with marketing by significant align will aligned increase guide Enhancing our and of processes opportunity our improve execution initiative data disciplined analytics. be our efficiency. tools revenue Sales will Our sales automation and of XXXX. sales and sales highest expanding new improve be using services. to use sell in including new a customers to continues Enhanced utilized management all integrated be to tools will

the with our solution This starts customers. we envelope to integration last the and of the more We priority business RAPID services. and will we a continue the both capacity our operations. to North to the to the produce services offer of parts of expanding with scale the of America these Manufacturing increase total provide in our And the is initiative expand objective

and Hampshire integration progress Minnesota alignment measured made have New plans. in gaining teams establishing Our on and

already Kaizen on our go-to-market of expand service, is process manufacturing to being capitalize portfolio. Sheet Excellence expanded Proto Our capacity executed Metal the and held improvement approach complementary teams develop offerings integrate and joint CNC have service events our planning project to

year the With call continue what John. very refine our accomplished to in XXXX. and am turn through plans over the that, to to year. past like to initiatives execute employees of execution and successful I'd look forward the of we these will in go on We as proud I our the

John A. Way

$XX.X the quarter XXXX. XX% you, the same million Thank in was Vicki. or an of Revenue fourth increase million, quarter over $XX.X in

from Manufacturing Vicki quarter growth As of RAPID acquisition. this million from revenue discussed, revenue $X.X benefited our our

items of In was unique quarter margin RAPID. XX% Gross to million from Adjusting a serving XX.X%, developers. represented fourth year and revenue in represented the XXXX. fourth the million year. revenue the grew addition, excluding million, quarter XX% quarter quarter fourth with over was XXXX. increase $XX.X over third of $XX.X the in quarter XXXX. quarter. $X.X the a for increase of generated benefit the in or XX,XXX comparable Gross at the last XX% currency prior XX.X% compares of for a an foreign XX.X% over profit was arrive Fourth comparable basis, This the quarter This quarter product these of

or fourth XX.X% totaled million in total revenue Our gross our of of revenue Operating were the margins impacted quarter XXXX. expenses positively strong by $XX.X growth.

Our couple the non-recurring operating quarter. one-time included of charges in a expenses

million we acquisition our associated with of in First, RAPID. costs incurred $X.X transaction

our a asset also to related operations. $XXX,XXX impairment We recorded charge European

fourth XX.X% million were during by $XX.X revenue in fourth to reduce quarter This was in expenses compared for increase expenses. of As resulted adjusted XX.X% assets, revenue in compared or in costs income we the our in $XX.X to the adjusted acquisition in expectations. gross cost prior offset XXXX million revenue revenue operating and Printing are year. of consistent driven in result of at the prior margins and quarter. Operating and the and the QX our expenses other higher was of earnings identifying year, ongoing an of or an same adjusted with million compared is remained sales $XX.X of increase to non-GAAP income operating our operating to opportunities Adjusting in below prior transaction charge a the growth the percent and of of expense million operations revenue analyzing marketing On expense slightly structure. past, impairment operating the compared amortization, to investments XXXX, our stock-based in have marketing, operating discussed XD QX non-GAAP last in costs, XX.X% and European of the These Sales in compared XX.X% XX% XX.X% quarter in by volume, XX.X% periods. of QX quarter representing basis, relatively compensation $XX.X to the year. as XX% our

by quarter. rate of of from an our totaling was benefit earnings tax the revaluation rate benefit million fourth a deferred foreign as includes liabilities, Tax effective tax effect the of consists million current $X.X the Act in $X.X of benefit estimated Our estimated net This $X.X primarily of XX.X% net repatriation offset tax deemed the a million. result the This in period.

current the effective the impact Tax was Excluding tax XX.X%. of rate period the Act,

for range As $X.XX Vicki our share. per quarter stated, non-GAAP our at guidance EPS was within the

a we over the As increase at million, revenue year look $XXX.X was XXXX. results, full XX.X%

region currency, by constant Europe's X%. XX% XX.X% and the grew grew or RAPID. excluding revenue at was Japan growth XX.X%, U.S. Looking in

XX% income increase or a XX.X% for Our million to This XX.X% $XX.X the On compared in operating income year is $XX.X XXXX. million or from XXXX. was an was basis, million XX.X% adjusted of our revenue $XX.X revenue. of or operating

$XX.X case generated in We capital balance spending under the conjunction do quarter. XXXX. years this to of We use established Acquisitions our of $X million expansions. to This million We financial spend in generally the of the cash provide $XXX with our million the $XX.X below as is in turning resulted Now Capital the is and during credit facility million not which RAPID in line year. cash $XXX flow. line we historical a levels ended from utilized during operations have in in securities flexibility year the with during marketable a acquisition million. cash. cash and was

Now turning guidance. to

XXXX. we Day our During Analyst gave for Meeting December, year in full guidance

revising to U.S. the changes. tax are guidance due that solely We law

our With million will reiterating updated our effective guidance revenue will As $XXX estimate XX% XXXX add non-GAAP to to $XXX we $X.XX result of annual and decrease to $X.XX annual this to share earnings. a share. annual and million tax approximately to $X.XX our we per of per rate information, substantially to the EPS are XX% Tax guidance Act, our increasing

our on to range the XXXX. the in from This of also will currency million $XXX quarter We impact the of Now We RAPID. from $XXX I'd of like to turn foreign following XX%. estimate for our full expectations first expect to guidance an $X a range or in be million have will growth revenue the revenue quarter of revenue to to QX million, approximately XX% QX benefit QX reflects revenues. factors. positive currently

guidance. Moving to earnings

approximately compensation add-backs $X.X will Our non-GAAP cost the include for quarter million. of stock

our first concludes assets to be remarks. Taking our rate with million. formal $X.XX non-GAAP to and $X expect tax consideration intangible XX% estimate acquisitions finalizing the That quarterly We of quarter first approximately We XX% our our approximately the in quarter. into QX. are in be the valuation amortization of expense all between estimate currently associated $X.XX EPS of per process we the and above, our share in currently to

Now we to be would happy questions. take your

Operator

Thank you.

Please is state with Drab Brian Blair. William question Our from first your question.

Brian P. Drab

a Congratulations quarter on morning. Good great year. a and great

Victoria M. Holt

Brian. Thanks,

John A. Way

Brian. Thanks,

Brian P. Drab

Kind of starts with exciting XXX-and-something, to that be congratulations. revenue forecasting quarterly so

John A. Way

It does. definitely

Victoria M. Holt

good. Feels

Brian P. Drab

Yeah.

clarification. quick a just John, So,

You rate rate what? said XXXX for on tax consolidated the tax you're company expecting for the

John A. Way

XX%. to XX%

Brian P. Drab

sure on Okay. XX%. said you XX% or I had to that wasn't U.S. consolidated if

John A. Way

consolidated. that's Yeah,

Brian P. Drab

this don't if quarter of know gave gross terms headwind then of I for And XXXX? Alpha, was on in quarter figure Alpha what you on us the margin type fourth

John A. Way

points. basis XXX under little a was It

the quarters. it's last I think consistent been relatively over that couple

doing of and on look about, looking close write as think, assets. underperforming the I that some we identified talked assets value. an a basically we so, we're taking at to the at those assets in to fair value took And those market operations were charge impairment down

yeah, So, that for be focus area continues us. an of to

Brian P. Drab

Okay.

maybe guess, headwind basis point I point, year? XXX this XXX So, basis

John A. Way

Yeah, right in range. that

Brian P. Drab

party? getting the the level more outside for quality little Okay. you're full I then then, and of you in first at maybe quality of interest detail Can guess, what with side on analysis a in-house Vicki. And interest, what talk third in the type on the analysis digital

Victoria M. Holt

Yeah.

or I more mixed. mean, PPAPs digital more manufacturing with got But inspection to through. valuable orders. inspection for traditional for cost comes first We've as inspections need. digital reports get customers comfortable they that and fairly service lower of orders lot the our the data the a and to kind becoming article quality are really ways report and manufacturing them on-demand it of of We it's come get and continue a as part

us some of seeing having been inspection that. we're pleased response So has We're a pickup good. The services in suite with overall that. for full

Brian P. Drab

way about? the it that it's is or like, percentage orders how early is very we say, should this just – of Okay. you think still There's no what in at can point stages,

Victoria M. Holt

what our to and have the objection early, area helping that the our by be solution And no closes. become drive our part it I provider an sales and more of a It's so able call place provide be team we call expansions It objection in full of been need. key to total what would that able customers had envelope and we a of specification really was a Well, is this is of what because customers try very that. to source didn't possibly. but Yeah. longer really is

Brian P. Drab

Okay. the the probably And CapEx just two timing all John. and the CapEx questions facility But the for plan expansion, and modeling just of then in that? of terms the for year maybe of timing

John A. Way

Yeah.

U.S. So, in occur have expansion will the will in that quarter XXXX, facility Qs we in first the we'll three. through then two that have and a likely build-out of and facility

and on Europe of our because timing That be as we're integration and All also through we growth adding we look approximately going $XX our there. the RAPID are is there, of depending space all, level And there. space regards anticipated to likely just to our at. at capital we'll estimate is We be still with will looking looking expansion at uncertain. looking expansion our to current in expand XXXX in facility in the million planning

Brian P. Drab

margins guess, know, I estimate a don't quarter disruption? as shifting it And, doing or capacity maybe Okay. result that first to second is the might of of reasonable quarter, a in in I tick the, you're down take that some around

John A. Way

So, updating as give you at quarterly yes, keep we it. guidance, we'll we our as look

but looking bit QX I in costs have gave. little a think of the as in guidance is the we'll we're we that at facility, reflected here

Victoria M. Holt

XXXX our the on facilities and timing incur you to the new we'll some you transition as of of part actual probably posted facility, quarterly And equipment keep informed we the start and move in be the that'll costs facility, but we'll which keep as new we'll guidance. up between later

Brian P. Drab

expect XX.X% is is should that for my this model question like non-GAAP XXXX? marketing fourth for the it what that and level for where here quarter, we in numbers, to in a RAPID I'm have XX% trying non-GAAP, selling is, then And here quick new we structure Okay. was on last

John A. Way

range. a No, it's think in I reasonable

a quarter just commissions and be a and year-end bit fourth But quotas just we touch we are forward, some will look it as for higher but that, think within was I range. with probably us accelerators. hitting that than little the as lower

Brian P. Drab

of Okay. I'll Thank get you. again. Congrats, the way. out

John A. Way

Thank you.

Victoria M. Holt

Thanks, Brian.

Operator

your is with Troy question Jaffray. state from question. Jensen next Please Our Piper

Troy D. Jensen

another on great quarter. congrats also Hey,

Victoria M. Holt

Thanks, Troy.

John A. Way

Thanks, Troy.

Troy D. Jensen

Hey, so you a let John, on me here. guidance bit press little

the So, RAPID? million are contribution for from assuming a you about quarter, March $XX

John A. Way

$X the right that, than range. Probably in range. in but That's more that million

Troy D. Jensen

RAPID just the basis here? coming on a So really then sequential on a didn't you but third you with in of QX? can with mean, the – of full be you out in with what help will look thoughts margins the I us quarter quarter fourth if any see margins will dilution any in, kind like where gross quarter

John A. Way

Yeah.

So RAPID one in just did the XX quarter. have basis impact month included. was fourth about of RAPID a That point

we as at quarter, So, margin we're the about points look basis at looking full overall. XXX probably compression

Troy D. Jensen

Maybe because quarter points month one XXX December sequential, and in? had you months right, basis one and in – three

John A. Way

Yeah. higher on margins strong And QX were revenue.

to tends us. quarter, of a When easier higher, stronger kind to of here it's just revenue on your little bit I'll think quarter our for an is March expenses helped revenue little the through projected the things we more staffed month QX as you your months to we a level manage consistent be interesting of comes and for a got remind margins. a, and bit I little month the get flow if bit in always and that planning at a us, are levels. the out do we've

watching be that. will we So

Troy D. Jensen

my December, and was out herein. the midpoint of that I X% very been point, I sequential that you the mean, big guys. part March about If has for a is growth RAPID to organically from second question. Historically, quarter QX And back

in off holiday got the seasons coming the of quarter You're that's it.

historically? in which explain kind can baked of bigger seen seeing kind of growth, not or just why conservatism we're we've sequential is So, there you a

John A. Way

influenced looking what and sequentially much to happens Troy, at by I hard is is guess, predict in QX. it very

a very will harder with strong sequential there. So, the that it's be QX, to say lift

and have and on based it, I quarter in any projections think data a we're month have. there historical the everything We information sit trends the usually biggest is we look and best for the looking number based as is our the the it. points here we quarter – visibility today, give at we at it. as on of don't our we to we March that guidance do

Troy D. Jensen

Great.

Okay, little Vicki, can completely as is going this the talk a type you quarter? about acquisition functionality understand. bit And software to What add? did the you of in for then

Victoria M. Holt

Yeah.

actually is execution into incorporating manufacturing have So been small software time able the several years. some software those this for be our of manufacturing. that the time leverage into And and both to of portfolio that technology relatively actually aspects a manufacturing company was bring continue of engineering us technology right that for systems to software across now our and for we some to that

really that, software also the is more engineers our on flows execution and do role of incorporating So then manufacturing in the We're the up feature our leveraging then software it further. picked be services, engineering which a and a couple recognition excited part about the that more plays in being into both some side. as the through our able that software and the then well, technology to how of frontend CAD of and quoting, of more strong software,

Troy D. Jensen

you strip I Okay. question even CNC the if like me. the for you've in Injection you a business. seems out about RAPID mean, Molding. And just seen big CNC versus inflection talk last Can business,

well. wonder been more growing or acceleration as pushing you've of why focused it I not kind Injection some pushing – more is Molding to CNC Could on been have can't Just Injection imagine see you Molding? start than

Victoria M. Holt

Yeah.

allowed increase of really with Machining. range in provide enhancements suite of investments that about really we I services what the we as think needs place of year us some a other. make in over customers, know, year one we competitiveness we can we and We some the really software have a versus the a ago, push little our did said a don't that put of the you to before, ago some CNC so As meet has

really from pick the Injection rates Molding, our impact America Machining. that seeing of the in they where outside in of available well-positioned the contributors larger we're beyond where services XXXX volume we're America. in you're far, on not it So volume, total is allowing the do And Molding see is to we'll our CNC portion production low really up service large to Injection in manufacturing to that really we case, of strong they our be service but the In that on-demand allows think just manufacturing. begin are in were service. And product does our those growth our Injection cost-effectively. big We'll really in on-demand is market prototyping By XXXX. be what year-over-year service that pleased a Injection to in is launch here have Molding. focused, that in be in for Molding and that use customers very relatively North launching one low In of growth volume North

been us going to rates company step forward that's an for pleased Molding us. a double-digit to move and to going be with maintain that is those and important prototyping Injection Injection strategic So we're more Molding really and than growth allow much just

Troy D. Jensen

work. Yeah. Congrats, keep good up Understood. again, the and

Victoria M. Holt

you. Thank

John A. Way

Thanks, Troy.

Operator

is Palm with Our from your question. next Craig-Hallum. question Greg Please state

Gregory William Palm

echo I'll well. congrats morning. Good as my

Victoria M. Holt

Thanks.

John A. Way

Thanks, Greg.

Gregory William Palm

just it's So digest base, a what's then wanted base? initial customer so from their importantly, there customer to more thoughts to the your couple your and maybe been feedback get RAPID, months

Victoria M. Holt

Yeah.

So closed almost months. December about two on there are X. we exactly We

publicly the a with way first that we make we consistent sure operating in controls And putting approaches of lot privately of a activity, can imagine, a lot bought that's and the traded be had company. held to so, the so in to as a place company, you we're it's a

in So plans our manufacturing Machining picked we've capacity new And on New customers. can lot team, Manufacturing expand on is order Sheet great in other we demands gotten those the a we've our developing piece jointly there we that the accomplished a then Hampshire. meet employees the RAPID We've in our of joint integration of is, for CNC the been focused and Metal of up how really been group capabilities plan. things with to

sure want We got significant on at the because marketing Proto way have guarantees. Labs in any make those place demand yet services to of meet and level we've we not the capacity turned a to sales in of joint brand lot that

those customers, those. So we've our they're working pleased execute to see and lot beginning been to Metal. reaction on on a us Sheet from add plans Early

that that of So trialing that's something customers a XXXX our doing that's in many and were some we service use.

it's we in big the we've place. been but on sides cross-selling positive really until yet So in opened a got been both on the of way the There's positive. haven't capacity customer base, spigot

Gregory William Palm

Maybe the to X, RAPID and to shifting been the us I I guess, growth segment the maybe Printing sort focus that's core on at with gears few last of, feel it. XD Got mean, I competitive the growth the months, segment. the especially a over that's like lost terms changed acquisition. update in the in has ago? XX you But compared can outlook maybe all of and months landscape maybe

John A. Way

and looking Europe. really is to we're two growing the lost and at operations, European look offerings. quarter share Multi a in capture we in the to gets think think Greg, launching place taking you numbers in it dynamics are In of and that the businesses. tale Jet at to that related I some But Europe differentiated have U.S., continue continue be in here Europe, at look landscape we're performing the the harder the And growth is and is just well to come quite Printing the I I partially strong a I what We're that and XD reported and by. think pressures market of the so as peeling Sure. just in provide there. services couple our first we'll is doing expand think the back to we help onion we U.S. competitive quite layers, the well. In Fusion

Victoria M. Holt

really of services new continue lot Yeah. XD in, expansions is for with not Printing. that The the on major one XD our being of should and R&D big we our by John a by investment It's source envelope to Printing word mentioned. deemphasize be us, is, focused focus witnessed a that is service and characterized is

Gregory William Palm

you open Do kind opening that sort this you've applications, gain thinking lately share? know about guess, it think with Does I I somewhat are cases talked, of about new use aggressively of technologies. newer how up you up you And helps these opportunity?

Victoria M. Holt

how believe new the some customers them being Engineers Printing. design yet I Printing. will are that Yes. still with only just It's we're for they very for new do of working are can developed, XD to some do what XD that commercialized, allow expand engineers. now technologies learning of but are with that not to

which early that because sense developing to development technology able that Printing in we're we and continuing ones And broadly kind of technical out position of offer. Labs the by customers there understand of applications. are help that breadth product make very, on Proto that XD But in the very great that provide So we're adoption the for those the partnership a grow technologies understand to this engineers. to which services is with engineers

Gregory William Palm

That's Makes good for Yeah. Thanks and sense. it luck. me.

Victoria M. Holt

Greg. Thanks,

John A. Way

Greg. Thanks,

Operator

Our your next question Please Company. & state is from question. Ethan Potasnick Needham with

Ethan Potasnick

Hi. to could way Potasnick are – This increased think guys quantify early mentioned wondering, of drive Good you any is you go initiative earlier, and Jim in benefits this able morning. to was filling Ricchiuti. efficiency? you I for the Ethan in the back I sales

Victoria M. Holt

our us Proto best new at to and is Labs bring a sales look ability communicate the really around that continued initiatives. metric to of into product publicly drive marketing number we for developers We

in we servicing and bringing as by high product deep from existing within both more wide also developers companies, witnessed that's and more developers customers, new we're So new there. and but go

indicator at think look is in solid impact. are developers investments the we and the that's that the that with good it real new we way product think to the quarter I having growth best an had So a

Ethan Potasnick

was? the United back the Okay, growth organic States and to And U.S. we the activity in repeat then great. go if could just maybe in what

Victoria M. Holt

growth. organic U.S.

John A. Way

For or the the full quarter? year for

Ethan Potasnick

Both.

John A. Way

For was XX.X%, RAPID, and for XX%, the then full was RAPID. okay, it year, XX.X quarter, organic the including excluding

Ethan Potasnick

Okay, great.

Okay. Thank you.

Victoria M. Holt

Thank you.

Operator

Ladies end the reached management gentlemen, to for we question-and-answer and would have the of the back over turn session. to closing remarks. call I like

Victoria M. Holt

again, the today. remain Labs. you, Thank Great. Proto us outlook for for excited about We joining

market strengths that we business are current As our ahead, are our we trends look and confident model. to favorable

competition. digital and has demonstrated products get help companies ability faster Our differentiated to manufacturing technology-enabled platform than entrepreneurs their to market the the

and and interface service our Labs' for with experience. the our employees features support. for to I want want enhance We year over continue our Proto technology their their thank to to the thank past effort to I and customers innovate customers' offerings

revenue forward on reporting growth look progress and are We next to you. Thank the during to term enhancing value driving our greater you shareholder our and call. we longer to committed our over

Operator

concludes today's you. Thank This conference.

You may and this disconnect your participation. time lines you at for thank your

Proto Labs (PRLB) 8 Feb 182017 Q4 Earnings call transcript