Protolabs (NYSE: PRLB) kicked off 2026 with a strong quarter, showing steady growth, better margins, and improving customer engagement, even though some parts of the business, especially 3D printing in Europe, are still weak. The company is gaining larger customers, but its 3D printing business is still mixed. Metal printing in the U.S. is strong, but demand is weaker in other regions.
In the first quarter, Protolabs reported record quarterly revenue of $139.3 million, up 10.4% year over year. Most of that growth came from CNC machining, which was up 17.6%. Injection molding and sheet metal grew at slower rates of 3.5% and 2.3%, respectively.
Profit also improved. Net income was $8.1 million, or 33 cents per share, compared with $3.6 million, or 15 cents per share, a year earlier. Meanwhile, adjusted EBITDA also rose to $22.8 million, up from $17.4 million, while adjusted earnings per share reached 54 cents, the company’s highest level in more than five years.
Margins improved as well. Gross margin improved to 46.2%, up 1.4 percentage points from both last quarter and a year ago. That was helped by stronger factory usage and some pricing adjustments. Operating expenses rose slightly to $48.9 million, but as a share of revenue, they actually went down, showing the company is running more efficiently as it grows.
3D Printing: Strong in Metal, Flat Overall
Protolabs’ 3D printing revenue was $20.5 million in the first quarter, up slightly from $20.2 million a year ago. The U.S. grew, but Europe declined, leaving overall results mostly flat. Still, one area is clearly working. Metal 3D printing is growing fast, with Direct Metal Laser Sintering (DMLS) up nearly 30% year over year.
That demand is coming mainly from aerospace, defense, and other advanced industries that need complex parts, where metal additive makes sense. These are the same sectors driving growth in the company’s machining business.
On the earnings call, CFO Dan Schumacher told investors that capacity is already being added to support that demand.
“We have around 30% growth in metal 3D printing, so we’re adding DMLS printers as well,” he said.
Protolabs has also added 25 GE Additive Concept Laser Mlab and M2 machines for DMLS. Image courtesy of Protolabs.
Network Business Still Weak
One clear issue this quarter was the network business, which was weaker, especially in 3D printing.
CEO Suresh Krishna admitted, “We did see some weakness in network demand in 3D printing. We are making some changes in our go-to-market areas so that we can work to accelerate network revenue growth in the future.”
Suresh Krishna, President and CEO, Protolabs. Image courtesy of Protolabs.
During the earnings call, the company also talked a lot about moving into production. Historically, Protolabs has been known for prototyping. That is now changing. Management made it clear that customers are asking for more production capabilities, including in 3D printing.
“We are early in our journey to build the capabilities needed for production,” Krishna pointed out. “We see more interest in injection molding, and in 3D printing as well.”
Meanwhile, the U.S. and Europe are still moving in different directions. In the U.S., demand remains strong, especially for metal parts used in aerospace, defense, and robotics. In Europe, however, weaker demand is holding back overall growth.
The company is trying to fix that through what it calls a “strategic reset” in the region.
Krishna detailed, “We have taken deliberate actions to reset the business in Europe, including targeted reductions in the first quarter to align cost structure with current revenue levels and improvements in go-to-market operations. We started some of Europe’s go-to-market work in late 2025, including alignment to core industries and simplified and increased customer engagement. I’m proud to say that these efforts are beginning to yield early results, with the region delivering 11% sequential growth in the first quarter, a sign that our teams are executing with discipline and focus. These early improvements are an important step towards stabilizing performance and positioning Europe to contribute to both growth and margin expansion going forward.”
Bigger Customers, Bigger Opportunities
Another clear trend is the company’s focus on bigger customers. Revenue per customer rose 20% year over year, showing those relationships are getting more serious. Most of these customers are in the aerospace, defense, and medical industries. These are the industries most likely to use advanced manufacturing, including 3D printing.
As Krishna put it, they care about “speed, reliability, and quality,” which plays directly into Protolabs’ strengths.
Looking ahead, the company kept its full-year 2026 guidance at 6% to 8% revenue growth, suggesting a cautious outlook despite the strong start. For the second quarter, Protolabs expects revenue of $140 million to $148 million and earnings per share of 50 to 58 cents.