Digital manufacturer Protolabs reorganizes the way it serves customers

With first-half revenue up a modest 2.2%, Proto Labs Inc. is taking several steps to extend growth amongst customers who buy its combined suite of digital manufacturing services.

The corporate, higher often called Protolabs, has reorganized sales operations to serve customers worldwide more holistically through its factory-owned and network digital manufacturing operations, president and CEO Rob Bodor says. He adds that the goal is to drive up customer order volumes for manufacturing of each prototypes and parts utilized in final production, leading to increased revenue per customer.

The Protolabs Network has about 250 manufacturers

Protolabs provides several digital manufacturing services that customers can request through its website and its homegrown digital manufacturing platform for quoting, manufacturing evaluation and ordering. Through its own factories and the worldwide Protolabs Network of about 250 manufacturers, Protolabs offers services including injection molding, CNC manufacturing, and 3D printing of prototypes and production parts.

Protolabs’ company-owned digital factories support low-volume molding services for as much as 100,000 parts, with volume pricing available. The Protolabs Network provides quotes for 100,000+ parts.

Within the second quarter, the Protolabs Network generated a 22.0% increase in revenue to $24.7 million, accounting for half of total revenue, which grew 2.8% to $49.08 million.

Overall, the corporate said it served 22,456 customers overall in Q2, as revenue per customer increased 7.0% to $5,595.

More Protolabs customers buy multiple services

On a Q2 earnings call, Bodor said the second quarter’s higher revenue-per-customer built on the 50% increase over the past 12 months within the number of shoppers using the corporate’s combined manufacturing services for making each prototypes and final parts using in production.

Bodor said that Protolabs has also pushed through additional improvements in Q2. “We’ve improved the efficiency of our AI-enabled pricing algorithms, increased the automation in our digital factories, and managed our costs with volume,” he said on the earnings call, in accordance with a transcript from In search of Alpha.

He added that the central purpose of the reorganization of the corporate’s sales operations “is to actually focus us around serving our customer even higher than we’ve got prior to now and more holistically.”

Protolabs appoints executives in latest global organization

For instance, Protolabs has eliminated regional general manager roles and replacing regional operations across the U.S. and Europe with a “global operations organization.” The brand new global organization will offer customers the corporate’s full manufacturing services for making prototypes and production parts through its factories and the Protolabs Network “in a unified way.”  The brand new approach was designed to induce more customers to handle each their prototype and production part manufacturing through Protolabs.

As a part of the reorganization, Mike Kenison, former general manager of the Americas at Protolabs, has transitioned to a newly created position of head of the Global Operations Organization. Sean Farrell, vice chairman of sales within the Americas, will tackle a brand new role as leader of the Americas Revenue Organization. And Pjotr Horowitz will transition from his role as managing director of the Protolabas Network to steer the Europe Revenue Organization.

For the second quarter ended June 30, Protolabs reported:

• Revenue rose 2.8% yr over yr to $49.08 million.
• Gross profit increased 6.4% to $56.55 million, for a gross profit margin of 45%, up from 43.4%
• Net income was $4.54 million, in comparison with a net lack of $383,000.

For the six months ended June 30, Protolabs reported:

• Revenue increased 2.2% to $253.52 million.
• Net income increased greater than fourfold to $9.8 million.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. [email protected].

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