Rapid manufacturer Proto Labs (NYSE:PRLB) on Thursday reported another round of record earnings for its first quarter.

During the quarter, Proto Labs generated $58.5 million in revenue, representing a 27% increase over 2014 results, which included a 4-percentage-point impact from currency headwinds brought on by continued strength of the U.S. dollar. In total, Proto Labs took home $10.5 million in net income -- $0.40 per share on a generally accepted accounting principles basis, or $0.45 per share on an adjusted basis.

All told, Proto Labs met Wall Street expectations for the quick-turn manufacturer to generate $58.2 million in sales and earn $0.45 per share. Digging into the report, Proto Labs continues to execute well across all of its rapid manufacturing and 3D printing services -- which appear to be gaining in popularity in the engineering and design community.

Key drivers
The following table shows how Proto Labs performed by business segment after accounting for currency headwinds:


First-Quarter Revenue (thousands)

Annual Change 

Protomold (injection molding)



Firstcut (machining)



Fineline (3D printing)



Source: Proto Labs.

Overall, Proto Labs' revenue growth was largely driven by the number of unique product developers it served in the quarter, which increased by 44% year over year to 11,009.

A large portion of this increase could likely be attributed to Proto Labs' acquisition of the FineLine 3D printing service, which wasn't included in its "unique product developer served" tally during the first quarter of 2014. Unfortunately, Proto Labs no longer breaks out what each of its business segments contributed in terms of unique product developers served, making it difficult for investors to understand which segments are contributing to (or detracting from) overall product developer growth.

On a constant currency basis, Proto Labs experienced revenue growth in all of its geographic segments, with Japan growing by 44% annually and Europe growing by 10%. However, after accounting for strength in the U.S. dollar, Japan's growth was reduced to 23% year over year, and Europe's growth turned into a decline of 5%. Overall, about 23% of Proto Labs' revenue came from abroad, which was small enough to insulate the company from currency headwinds becoming a large problem.

Proto Labs' first-quarter gross profit margin decreased from 63% to 60.2% year over year, and increased by 30 basis points sequentially. The annual decline can be attributed to a 110-basis-point reduction from Proto Labs' 3D printing business, which tends to carry lower profitability than its other segments, and a 220-basis-point impact from foreign currencies on its international revenue.

The bigger picture
In the first quarter, Proto Labs generated more than $15.4 million in cash from profit-making activities, and it ended with more than $137 million in cash and zero long-term debt. Between the underlying strength of its business across all segments and its strong financial positioning, Proto Labs' business appears to be in great working order.