PRLB - Earnings call transcript Q4 2020

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Operator

Greetings. Welcome to Proto Labs Fourth Quarter and Year-End 2020 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]. conference recorded. today's that note is being Please I'll Director of the conference Daniel Schumacher, over to Investor now turn Relations. Mr. Schumacher, you may begin.

Daniel Schumacher

Thank full-year XXXX. and Vicki results morning, Proto General Rob you, everyone. With Executive and and press release Americas, Bodor; a release the me good Rob, and Proto Labs Officer, today Manager for Incoming of fourth Labs Chief Vice on website. Holt; Chief the President issued Officer, Executive President and the Chief and President Financial XX, Officer, John Way. ended quarter available is and its The morning, financial December This company's announcing are

is provided addition, prepared release. press In at the available in slide our web address presentation a online

GAAP on certain differ forward-looking section and to and to made past actual risks our cause any financial results discuss and discussion non-GAAP that from statements Please and our company subject guidance press from risks Before future our information with to slide earnings a could performance release Relations and or differ will are XX-K today. Form reconciliation The will to include our our uncertainties the outcomes to statements release materially to SEC results for we we adversely forward-looking I that that practice. include many of Investor of refer like cause begin, to relating statements refer Report expectations non-GAAP presentation would actual be materially on website Please and the to recent may consistent filings, that considered at remind expectations. and our could accompanying everyone press complete for measures results. Annual including

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

Vicki Holt

us our call. today Thanks, good quarter joining full-year XXXX you conference morning, everyone. fourth earnings and for Dan, for and Thank

year financial moment performance of ahead reflect on our through to a a take and XXXX, and I wanted Before to we look change. go XXXX XXXX,

As the quarter. many began unforeseen challenges Proto we to the brought first very all I'm of due that how pandemic in responded. COVID-XX proud know, XXXX suddenly Labs

these customers. employees opportunities our Our our values challenges employees, adaptability customers achievement. Labs to customers the Proto displayed took to and employees of turned better teamwork, been them by priority the our incredible top the to and keep fight and pandemic. core Throughout guided while pandemic, safe, trust serve and against delight communities continuing our contribute has into to our

and our equipment parts components digital for market-leading grateful healthcare Our the including manufacturing fight help allowed providers. that and as to we well customer generated We're against as protective projects. revenue $XX In COVID-XX turnaround related us to of assist trusted personal COVID-XX, to for us humbled total, diagnostic ventilators customers at customers produce in to COVID-XX. million equipment, respond model times from

the to to the addition for launch accomplished the priority innovate future entering our Labs throughout number helping we of actions In pandemic, the successful Most XXXX, one transform fight Proto to world also Protolabs notably, XXXX. X.X. took

as environments. demonstrated amidst outstanding we diligently launch through new productivity dates Our worked employees working

November. as leader as in digital will extend in Europe as I'm hypercare initial Protolabs and customer and experience successfully very we monitoring positive. the that Americas expected, X.X live been X. much in improved to X.X internal the system our Protolabs in And Today, February went refreshed went our the is launch. we with a response feedback launches to customer launched improvements we've us on to offers know, Both happy make to you system and phase in feedback position had manufacturing. any continue As maintain customary report as allow remain user and in customer

our incredible Proto result recovery, we our new the growth our marks serve a of moving and customers. year to XXXX effort will tirelessly for have new retention the forward. inspire accomplish who be platform beginning This and we transformative higher economy continue to the as innovate and employees Labs expect priority and its of chapter. a satisfaction top of worked is As continues exciting gradual the customer multiyear

launch progress XXXX We and strategic positioning have the early Hubs, already this us serve significant the year, made X.X including beyond. as market Protolabs of realize and customers to recovers our the XD acquiring in Americas, in growth and

ends. the of last begins, is President lead of hear role earnings X, long-term will last from Rob that this one of in great may an the another As as team this Officer organization. will my Rob I'm and proud a he strategic And years. Chief overview later great to I'm to seven employees call our confident Proto success. President Labs XXXX Executive serve this you and chapter for Officer as Chief and you as him the company of know, Bodor March call, wonderful and And will provides alongside priorities. assume Executive objectives at on

fourth represents year-over-year levels remains results report and the pleased of to quarter a year-ago. X%, of our global a as revenue our million now for to $XXX of to within from We're quarter Revenue Turning financial low expectations. decline fourth earnings XXXX. activity economic

X% customer on our X% Our revenue highlighted to same-period quarter a compared overall and quarter declined fourth demand by trend. sequentially third with XX% currency X% Americas third X% to declined X% with earnings quarter Similarly, and constant Europe's XXXX X declined year-ago, fourth revenues In XX% results. in year-over-year currencies for consistent in the quarter presentation. sequentially. consistent year-over-year, line in is only Japan, revenue Revenues constant revenue recent improved the declined fourth geography of with X% seasonality Slide of quarter compared patterns. the

fourth we expectations per with $X.XX for earnings in earnings, quarter. Turning share diluted share of non-GAAP line our reported quarter per to the

down primarily launch of Our earnings November quarter seasonal sequentially lower Protolabs to and volumes. in the were impact fourth the of X.X due anticipated, in as

information X in our or XXXX currencies. a XXXX Our fourth revenue a in X% of full-year performance. see XXXX additional million, X% quarter constant Slides representing performance resulted compared revenue for XX of decline on Please to $XXX through

as XXXX, emergence the the a responded we pandemic, business sudden well economic health long-term substantial global opportunities. challenges servicing of other drop and very global our a in employees, our our focused of on we in and unforeseen customers, activity, well as as Given

non-GAAP XXXX, $X.XX in costs our results. a of form diluted Protolabs provide project as we share earnings XXXX view year. X.X continue John? to detailed the Our the future compared appropriate in into invest financial manage $X.XX our per will and where John more were now to in our throughout

John Way

you, Thank Vicki.

financial detailed our of begin XX presentation. on fourth Our quarter Page results

XX,XXX in the down business. sequential represents As X% Vicki mentioned, fourth product X% fourth decline with patterns We the unique a sequentially. developers quarter, served revenue $XXX.X million seasonality of consistent of quarter our

in Slide third holidays our decline our XX%, quarter. margin margin in by fourth primarily sequential gross the non-GAAP to to the The detailed and Turning the in XX, quarter. was to due increased driven income XX.X% quarter compared was statement, compensation the gross

our total in operating majority quarter operating in $XX.X million expenses, in directly in to to third the operating third compared our sequential Turning expense quarter. X.X, non-GAAP of call. totaled was increase The the guidance quarter million the tied expenses described as during Protolabs the $XX.X to

capitalizing to resources going were we prior reminder, working project the a live. of on cost the As

were costs R&D approximately the service, expense As these million. sequential in of placed representing increase expensed $X system was a in

level incurred going will and million increase will in quarter that in placed during to assets depreciation depreciation we QX from Quarterly service the approximately at remain each the mid-quarter, quarter. $X.X With forward. $XXX,XXX fourth

the responding to remaining change was represented the now product by from to to a unrealized GAAP margin after-tax income greater margin, our size year-over-year The over of of mix cost for ongoing reporting primarily XXXX volume costs, mix non-GAAP our net and in non-GAAP negative in while XXXX, the gross of CNC absorb basis, was currency $X.XX decline of revenue not the Protolabs to gross were due expenses earnings was foreign our Slide on a earnings lower full-year Transitioning totaled of XXXX. per lower changes XD to Total compared begin compared transaction number was representing the of sequential per million molding per XX% share sequential that financial down XX% intangibles, to injection which not driven GAAP X% stock million per COVID-XX non-GAAP for XXXX. decrease to adjusted a to of due compensation, share. the sequential amortization share acquisition The diluted million XXXX operating of developers $X.XX was operating operating developers various totaled to was of share earnings of gross a to a prior-year, than the $X.XX per $X.X expenses share non-recurring prior-year. and correlated results, The business to Breaking $X.XX per of XX.X% and in XX,XXX in XXXX, and changes order $X.XX expenses On a per transaction gains, compared impact million Additionally, of share. in Adjusting non-GAAP $XXX.X the fixed We income. volume quarter resulting with included declined challenges launch and margin increased did XXXX. The X.X the $XXX.X in in lower quarter share. of $XXX.X $X.XX expenses impact machining. to further, in expenses related the purposes. pandemic. average decrease and related diluted compared driven served revenues relate Hubs, $X.XX. the the costs out product business during decline in by other $XXX,XXX that operating to XX, been served operations had

to the future manage to continue X.X. were XXXX, During we expense able in levels through invest below prior-year and Protolabs our

EPS, other This innovative of in quarter and the Shows the GAAP spend of virtual Our during per as year, and increase to expenses lower system management activities discussed. resulting R&D board expense reduced XXXX including after-tax in of year-over-year fourth investment expenses well previously in share. related diluted equated with of share representing global the to to per support earnings was cost $X.XX. expense for unrealized the on reduction from as with organizational related in our travel during maintaining offset the in $X.XX the customers, $X.XX per a to our to non-GAAP to down for impact. evolving the non-recurring a engage and associated impact of converting transaction Trade by costs due opportunities recorded associated share stock Breaking cost business. the sales decrease marketing increased long-term share the and structure $X.XX Adjusting net launch foreign driven executive change to was XXXX. represented in marketing was to due currency $X.X volumes as the Protolabs impact was share $X.XX diluted Lower XXXX the our $X.XX, intangibles, by and per year-over-year other principally earnings gains, to was million pandemic X.X income per year a million, per The $XX.X margin of remainder per and adapting year-over-year amortization reductions. compensation environment share share. The compensation, tactics the lower non-GAAP work gross earnings the the

to December turn from to allow to acquire with new in January, Hubs to flow X.X, of and operations, balance CNC Protolabs the produced On XD and the consideration Kingdom. completion due facility to $XX our most strategy marketable cash the on business XXXX cash difficult our cash debt of X.X, million adapted, was hand. million. Yet very to during Slide in businesses the of strong strong in sheet. business, in flow million closing the very continued in longer-term face. and to we securities operations funded million our expansion of molding year, operations. These $XXX Germany Rob the facility cash support Even our challenging our balance Protolabs acquisition have generated progress the $XXX We of digital strong and growth on manufacturing and Capital on business, strong Hubs. our in us the we the XXXX recent XX. was call growth injection In continue an overview XX, invest cash XXXX. spend Now nature and cash our in of XXXX future $XXX.X XD including during including printing flows turning XXXX compared cash a million, the consolidate of the operations free I'll $XXX over generation, United backdrop proceeded for cash our to XXXX, was portion to flow free XD a our long-term priorities. now with investments our

Rob Bodor

thank wish Proto Labs, Thanks, of to have us John, the these we primary all us on ahead to Chief all I'm you our you drive have capture want for today. a leadership seven will priorities role of thank employees of opportunity, that for all over long-term three and look and XXXX strategic behalf On into very step we miss excited I with and long-term we being in March opportunity to our X. the to Labs best. tremendous To Vicki At and employees, President success. objectives. all the Executive with passionate we Proto and Officer her years, forward of partnering you I our into three fit objectives past

ever delivering positioned a assisting customer broadest to business unprecedented customers We on companies has further manufacturing; quality parts accelerating built a set serve new of third, services their adding our by better our by additional we world-class needs of serve to always Years-ago, and innovation expand envelope of to in of have our offerings our capabilities began parts been custom to today meet for history. First, broader Serving needs; objective invest customers. at product in for our these and create set than expanding been with employees. to our to customers our high second, in order the experience focus, our manufacture digital our portfolio of we speeds. we're the to customer and customer

create future, and this the expanded continually customers We the Hubs. recently milestones announced Our Protolabs X.X of important of even value services the successful more capabilities. capabilities provide and that acquisition us ask the two into our for XD launch foundation to and

platform both that the the to support building our the of long-term business. earlier, how of serve expand of and we we're in and As foundation delight initiatives Vicki the cornerstones are stated customers growth these

is world-class objective first Our customer digital to experience create manufacturing. a for

feedback successful X.X objective. multiyear through efficient. upon weeks systems been this with on live Our back-end experience X.X launch has of roadmap ago front-end a the architecture more build positive. that with priority Protolabs refreshed Americas to strong user platform, from system achieved modern first The and base The the provide we went in Protolabs the can the represents the of project combined couple a the customers

live While experience. the we're customer in done now, and we're both Europe investing the not in Americas

continue of to XXXX. will seamless We the make of service platform. XD unify Hubs we'll to Furthermore, we prior begin our one was customer X.X our experience customer modern architecture to additional improve look learn that the have our continue features faster to capabilities customers the it available recent from acquisition of incorporate improvements system. those in and throughout our and also sheet-metal customers into further backlog all the We'll capabilities and to easier have our environment. experience and than the a be We'll develop Protolabs with bringing improvements and process release the making in to and

to customers step our addition is expand premium may two the of XD our strategic it and to XD in provide as serve been a important XD offerings, Hubs in R&D inception, of customers digital expand speed. Labs most has efforts we focus to have These access a parts strategic highly Proto provide in expansions second will our comprehensive acquisition we expansion manufacturing of allow an manufacturing Hubs for in-house been Our much Hubs us complementary envelope is major to objective of network our continue driven offer our the brings need. by capabilities, and obsessive manufacturing The to digital to virtually expansion to with custom world. the as our is an reinvent with From growth ways. capabilities offerings. that partners of existing shift. dedication of customers improvement any the manufacturing the The our represents of our how the

manufacturing offering capabilities the vision very and through lead digital to serve by the offer ability described meet a First, increase and variety second, pricing of manufacturing time the with will and options. make I breadth complementary pricing delivery our broader our we premium and right and customers. network will expanding partners; find we of of make exciting times customer by a manufacturing. If to is we partner cases. for This use range needs our to market-leading you vision ultimate for it it, truly of it can't just a options

vision. to that to do realize have We work

integration We to together and develop manufacturing customers. robust that we offer provide a allow the independently thoughtful will serve single together a in two bring of to be as plan us while continue In working Labs to each our complete continue our build-out Hubs the customer will experience. Proto organizations services near-term, unified operate and best XD the to to will

fortunate strong we market capitalize We'll seamless, continue to we strategy, and Hubs customer to R&D this our offer at our services. first XD the We're experience capabilities area. with that experience working thread possible, eventual as the to customer to and develop drive digital best is in by us experience reinvent brings platform long-term customer XD as XD of our and allowing combined is The the opportunity long-term. our massive expansions continue plan. provides be invest Hubs the element build-out We'll on the to the Hubs expertise colleagues a ensure envelope across manufacturing organic in over expanding broadening the critical

priority XXXX personal and to employees and growth. drive third to our and strategic Our is professional support continue objectives for

adaptability ensuring long-term of ways efficient and goals. long-term evolve achieve employees our instrumental and in XXXX, our objectives. continue showcase strategic we in more work Our new are workforce, our XXXX to the embrace to we'll towards and

Proto educate, important make XXXX. advocate diversity, to all continue a team Labs of stronger In to celebrate at are and us in to very equity us addition, and we'll inclusivity and

and must team team and As provide The our work tremendous investor and analyst our as there's later a us company a will the to I our Labs regarding this objectives detail I together and virtual long-term evolution year. of success. strategic leadership it during the further capture shared conference and Proto mentioned, drive ahead executive opportunity

John Now, XXXX. first outlook quarter I of will for the to for turn the call our over

John Way

Rob. outlined Consistent in on Slide past including quarterly expectations formal first revenue summary as our XX. with XXXX, quarter guidance the Thanks, practice, and range will of we cost qualitative provide of

As we levels. quarter, has activity we to not to look improvement business, yet the our in experienced returned pre-pandemic first have however

expect in a $XXX million million $XXX.X first be in quarter. to result, of the we to As $XXX revenues million to compared fourth range the quarter

we'll of during quarter With XD the Hubs partial of record of quarter, million. approximately the a closing the acquisition $X revenue

currency revenue, assuming million to expect rates currency levels. have on foreign $X.X at favorable We to $X impact million foreign remain current

guidance macro the revenue uncertainty Our continued in reflects environment.

Our be Europe business demand in by February trends fairly slows. and quarter flat January. the with challenges January impacted December will in likely remained creating first recovery and as particular new the relatively lockdown have revenue was Brexit consistent early with measures

quarter As we've relatively challenging. of addition the soft This March, we to for visibility pattern typical a comparatively with starts reminder, a January, activity Hubs our with year, XD business. learned that an challenge of added the patterns have with seasonality strong increasing a making as

turning structure as revenue the we'll did our XXXX, in levels services to response we of in our throughout to our business. overall expenses, each continue manage to Now cost and across

mentioned front As comments, long-term us. on of backlog in to the Rob projects of a investing that the be integration of XD in, have ultimate opportunities Hubs including in we his we'll capitalize

We minus points. expect first XX quarter approximately XX% be margin our non-GAAP basis plus to gross or

lower lower points. of due a than and Hubs, addition basis is to of Proto the approximately in at operates the of XXXX business fourth gross XXX forecast result slightly currently the quarter headwind XD will margin a Legacy Our Labs margin gross than which

for our working inefficiencies systems, with and costs increased We benefit higher factored in compensation. also potential slightly incentive costs as increase, combined compensation begin new we merit in have

of we up of resources related are system projected the expense to of include incur expense, approximately will first fourth additional the to between We'll over that related XX% payroll also for an final to compensation were increased to increases non-GAAP addition $X.X increase, of quarter approximately the result quarter. expected to of total of of in of anticipated administrative The million. capitalized first and expenses our million, incentive fourth Protolabs the taxes increased for benefit the an in resulting the These of $XX incremental key our in $X.X We'll million. operating quarter, in quarter, million. portion of be related employee Turning that depreciation costs million a $XXX,XXX annual $X expense increase X.X expense XD driver increase a a costs and the full-quarter $X.X is to fourth to following And the representing expenses first be timing quarter and approximately million from full-quarter merit $XX in $XX.X $XXX,XXX selling, $X expensing Protolabs to of general Hubs million operating million compensation. components quarter. X.X

increase We and currently impacted with associated rate XXXX. in our update tax Additionally, be to the expense costs anticipated one-time in compensation also our of quarter Hubs, our want an amortization tangible XD to acquisition and GAAP I non-GAAP will expense results equity quarter. CEO provide XX% transaction estimate beyond by with a first of first and transition. the on associated R&D be between XX% the our

have we in Rob opportunity. a of As on this R&D capitalize us, to roadmap opportunity have and comments, a projects help ahead of us tremendous described we that

comparison the roll-off, have to as for Protolabs the some over to now with of to been quarterly R&D the progress X.X slightly quarter contractors will the Rob we decrease call the expenses levels, project shift first comments. projects. turn employees final the dedicated in contractors from remaining through I'll that while As and year, external other

Rob Bodor

continuing in John. XXXX I'm Thanks, responded. performance invest and while midst achieved how our and financial a to team in pandemic, global our of long-term future success. sudden We most challenges many of the declines customer importantly, in Proto faced Labs proud in demand, strong very

become We'll we'll maintain manage the digital continuing strategic formal manufacturing. enter short-term, strong concludes us the remarks. our in to custom leader. broadest our in offer objectives to go-to and custom our prudently as parts. will digital invest while to position As execution manufacturing we a the best-in-class continue These and manufacturing That performance experience XXXX, business two digital manufacturing working supplier continue customer the allow toward for

I Vicki, can John line questions. for your and take Q&A? open Rob, Now the gladly will you please

Operator

Thank you. time, this now Thank Instructions]. [Operator you. At be Sure. a question-and-answer conducting we'll session.

Our with Please your from Drab today Brian question. proceed line William the comes first with of Blair. question

Brian Drab

Hi, good for and questions. morning, everyone, thanks taking my

Vicki Holt

Brian. morning, Good

Rob Bodor

Brian. Good morning,

Brian Drab

with Good it's luck chapter. Vicki, And you. miss here Blair. next in working the great we'll at you William been And

Vicki Holt

Thanks, Brian.

Brian Drab

And, think by parts; John, I I'm this saying the to thought wanted that have to no I line is? the is wondering guidance EPS there's the guess the in I'm just guidance. you just thinking quarter. what's helpful there guidance, given missed curious, start And in what process particular been moving have I so would your EPS just many

John Way

the over Yes, given Brian, better, expense I range actually then lines. that revenue really my the move and we've quarter few modeling that the in I don't when now qualitative on out right do bit, the the particularly past works pretty actually, swing because range with the information the can EPS materially a and And revenue think through in expense, tight range whereas first operating revenue. a that are expense quite from levels, quarters, range, our

find when that better modeling better actually to information doing qualitative providing range. works a EPS I get actually that the out you So I'm

Brian Drab

fourth looking a that when when in We'll has year. the take quarter, get that looking that. quarter seasonality at the just just one XX% I here, terms this quarter the saw with one is more first your unique was in But about developer typically better from down wasn't count, or the why in XX% little in it's wondering the normal to the thing look And quarter. seems fourth I'm down this this, about fourth from from of a year, looking thing first a on same developer why seasonality the quarter at thanks. And not at Okay, sequentially we at and I'm product little a third third X%, light the sequentially. then, I'm metric bit And count work yes, fourth up I the the was is you quarter, move year, developers. quarter quarter, in want

level. make to there was up lower of some it's that So seemed relative gains still to have some and like room that for

you're Just wondering, do seeing are think we more sequentially rebound as you concerned the the depths from you And not pandemic? why of about emerge a of that?

John Way

look to think at it we correlated. Yes, individual and services, we they it. are Brian, that at I at as look perspective, the And from it, the when to related got look performance you

the than look And COVID-related So million business at order size has most we did CNC the experienced have orders the a down been average order when historically. we as look and I in full-year, at service. revenue And mean our lower that those hit molding. is of $XX than injection we we've hardest it, CNC of the that is the to orders, tended be larger of

few larger orders So from relatively product developers.

be looking into as quarters and we it. CNC makes seeing we're So the by impacted market, as we'll in expected that's the the Yes, of at the sense kind us change as to go the we're the looking was through pandemic recover combination is we and that full-year XXXX. to or look what business, as of even where progress COVID, and the we mix with of a bit at little relatively

Brian Drab

I'll that indicators rollout one like the of sounds bright in in you Are then it great. like and you more Okay, line, And back there any but X.X ask this leading planned terms spots went get in for as seeing Protolabs Europe. we material and of there's from have as out on I the retention, interaction, just it you is customer in can glean that impact customer try wonder the if anything impact as project that will a roll-it Americas? the too you late? level

Rob Bodor

Sure. Rob. This is

things a good, that have The us which great and mitigate in the really ago. of and U.S. we orders, as or little went strong. we've February few fact and weeks there number in the to were U.S. discover, we to best of and we positive feedback a in customers. So And new very live any went been Europe customers gotten coming challenges just the And we to we X, a is counts of have hiccups went we from the uploads customer very lot November website live live in initial that able that all so customer in helped went Europe, first indicators

here a U.S., still it's into launch early. the indications few the are So in weeks We're only good. but initial

Operator

Our & next with with your proceed Company. Ricchiuti Jim Please question of the from is line question. Needham

Jim Ricchiuti

just your Hi, just had some normal is briefly, about respect Or that's consistent to that But to color moment? I'm but there with to January, some just comment any I'm this it sounds you good. I in flatness at it February. provide with can I potential just morning. seasonal tell like heard too some end-markets? patterns. jump-off really Good wondering of you in of And the tough is wondering, recovery

Vicki Holt

take I'll Yes, that.

you look was slow it at month, begin the developers in from holidays, pretty December. starts January, pretty January normally total, it when But did that's very pretty that to picks as it's as And flat get and best, emerge work. product to back the December, this So year. normally it was normal. up with flat with throughout

happening global economic of the kind in be with bulk of growth uncertainty complexity quarter and exactly, what's the occurs. year is that going the as we occurs, fully well. forecast historically, the another difficult degree for is a adds the it stronger big expect happen to February the where to then because really to -- starts recovery, this in so huge with us of determining slow, have this a we that very in ramp March And quarter But and March,

So of move performed for -- it's it be but signs and kind we through normally we'll has quarter. watching expected it to as and as be we it's that recovery basically the we as say basically

Jim Ricchiuti

I covered cost layering the XXXX you John, of we as But whether be have be XXXX as the and apologize potential just to that, as that is of to you might a it's year? any like or over meaningful relates expense the do, as question have Show about And to it anything think travel-related balance there is or could operating the that on whether at saw we to or it. provide that benefits going COVID Got Trade about back if may might think that some you you Again, you you. this. for actions temporary in color all

John Way

Yes.

we I levels be think can forward-looking in But the maybe continuing operating and as down our place manage to we R&D I you think at be We'll coming those I those come at will in first the and is what right kind in provide also from to that quarter expense be QX. levels. you’ll is it where as see said, as at for of adjust item we'll trying levels, little costs and looking bit the project continue color But, start. where volume line will probably that adjust volumes. to we invest a to and

bit we'll So as now. little a I then use your go the right be and It'll I guidance levels would XD of to full-quarter quarter I for would modeling provide include use first volume Hubs, think dependent. along. purposes those adjusted we

Jim Ricchiuti

Got you.

you, and Vicki Okay, thank best of luck.

Vicki Holt

Jim. Thanks,

Operator

Thank is Kenny your Please [Operator Instructions]. you. with next Berenberg. question with the Vallace The from proceed of line question.

Kenny Vallace

is of about, growth expectations that over So your revenue could how demand to XXXX question for to of of prototyping some geared year course your of XD and kind just that towards business? kind just my revenue Hubs. And that first XD in that trends there's in is And just the that you in the impact terms could COVID-related whether talk more Hubs, related in related you business. business saw obviously,

the thinking year? the throughout will just of business look cadence in about revenue So kind that of how

John Way

think a see Yes, opportunity. new Kenny is business our the diligence, We've for I us well. we as it done

off we looking and acquiring our of, customers As serve in build it, really we broader to were were platform manner. a at the

looked was I business for million expect and we revenue we that about it, growth that at XXXX. off of talked about we number into As XXXX think $XX

how on we just growth, depend related economy the also business global an of few factors. being well perform our how together as -- capitalize to is think pace but the a One, as come going that and opportunities I things can Legacy organization. Now, we when to as there,

it. think, through quarterly guidance as progress So I provide and related we to that year, the updates we'll

we from were expect XXXX. levels the picture, in big operating growth they think I at

Rob Bodor

great holistically. of a the I result exciting for a that to much about Yes, comprehensively more is that our for add customers long-term platform us. to This And growth really and excited just around that. we're John's would is as the platform serve point us

And asked prototyping four a across terms little about they do characterize business, the of of the those. it right. the to play and all of In of they you nature bit production, services, both in

opportunities So CNC maximize and over now. to doing synergy capitalize for and we course on But as what those right that's this between planning work with there, synergies. of lot there's we'll the largest year a of commonality the teams, being integration with our together the be two that

Kenny Vallace

there on type you'd material as And somewhere in of there the follow-up, Labs terms any to, a customer type in Proto impact of Labs have you kind end roughly will out to the expect exposed Proto is going forward? that similar they're today, anything any, base of of terms point markets, Great. of then

Rob Bodor

Well, of bring the broader broader services so terms of the benefit points. types range opportunities, the offer. are aligned very the we talked they produce four as as about, of of said, of that services, in again, we I a They envelope highly products price and

small So overlap the actually relatively that of is individual serve. we in customer terms the customers

an for synergy. that's So opportunity

Vicki Holt

would The have percentage of similar. revenue also I a end-markets that will Europe. they in are larger say their

So gives a does larger that it the so percentage a Proto us Labs European much America, core complement in presence. it North stronger business actually has

Kenny Vallace

queue Thank Awesome. I'll now. the hop you. back in

Vicki Holt

Thanks.

Operator

Thank back this for floor the time, remarks. At closing you. turn to Rob Bodor I'll

Rob Bodor

providing Proto shareholders their I proven all we I Well, thank conditions. priorities thank drive continued well challenging we our that support throughout our we Labs any in and forward. for I'm can execution for economic as year. you perform employees Proto continued extraordinary a in pleased want time a morning. also to want XXXX efforts in our perform to year Labs their for for challenging very with well can your XXXX, thank of and efforts their this

information Over for creating offerings, seven the long-term, thank And providing over and our significant to and and strategy once our conference you tremendous value the I additional the Thanks. to on want virtual committed forward years. customer along investor later way. this year. again, we're her shareholder to past long-term We Vicki experience manufacturing analyst look improving leadership XXXX our priorities our at services

Operator

you. Thank conference. concludes This today's

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

Proto Labs (PRLB) 12 Feb 212020 Q4 Earnings call transcript