As demand for its digital manufacturing services changes with the pandemic, ecommerce-based Protolabs posts a year-over-year drop in third-quarter revenue. But Q3 sales inched up from Q2, as the company readies the launch of its new online ordering platform.

Proto Labs Inc., a worldwide provider of digital manufacturing services ordered through its ecommerce platform, reported an 8.5% decline in revenue for the third quarter as it absorbed a steep drop in COVID-19-related orders for such things as parts for ventilators, diagnostic equipment and personal protective equipment, CEO Vicki Holt said last week.

VictoriaHolt-ProtoLabs

Vicki Holt, CEO, Proto Labs

“The vast majority of our COVID-related orders were generated in the Americas, and therefore this region saw the greatest impact from the $9 million decline in COVID orders from Q2 to Q3,” she said in prepared remarks.

Total revenue in the Americas, by far Protolabs’s largest market, declined 8% year over year in Q3 to $85.6 million, as sales in Europe fell 13% to $18.9 million and in Japan 22% to $3 million. COVID-19 related revenue in the third quarter was $3 million, down from $12 million in the second quarter.

Aerospace business takes off

But Holt also noted an upside, as total Q3 revenue inched up 1% from the second quarter, and as non-COVID business areas showed growth, Holt said. “Excluding the COVID orders, the underlying business trend in the Americas showed progressive movement,” she said, adding: “From a year-over-year growth perspective, aerospace has been our best-performing customer industry in the Americas this year. Space exploration and satellite projects and funding continue at a rapid pace, and our quick-turn digital manufacturing services continue to be extremely valuable for customers in that industry.”

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Holt added that her company’s 3D printing business “performed very well” in the third quarter, growing 14% sequentially over the prior quarter and 2% over the third quarter of 2019.

In addition, she noted that Protolabs’s plant managers were able to manage staffing at its manufacturing facilities to align them with predicted demand and customer ordering levels, helping the company to increase its gross profit margin to 51.7% from 50.1% a year earlier. Net income for the quarter fell 12.5% year over year to $14.70 million.

Launching Protolabs 2.0

Viewing stronger days ahead, Holt said Protolabs is proceeding with its “Protolabs 2.0” initiative, which she describes as “an evolution of our ecommerce quoting platform and our back-end systems that was initiated by a desire to better serve our customers.”

“The new online quoting platform is more intuitive than our legacy platform, with fewer clicks required to place an order and an overall better buying experience,” she said. “In addition to a modern, user-friendly interface, the new ecommerce platform provides the ability for users to better manage their project requirements, collaborate easier with colleagues, and experience new levels of transparency into their orders.”

The new platform is on track to go live in November, followed by a U.S. debut in the first quarter of next year, she said.

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Protolabs, with manufacturing facilities in the United States, Europe and Japan, sells to customers worldwide several types of custom manufacturing that customers can order online at Protolabs.com. Protolabs says it produces custom parts and assemblies in as fast as one day with automated 3D printing, CNC machining, sheet metal fabrication, and injection molding processes. CNC, or computer numerical control, is a process by which machining or milling tools operate via computer programming. The company’s “digital approach to manufacturing enables accelerated time to market, reduces development and production costs, and minimizes risk throughout the product life cycle,” a spokeswoman says.

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