Proto Labs, Inc (NYSE: PRLB) is a 3D printing and manufacturing company that focuses on providing both rapid prototyping and on-demand production services. With the ability to produce parts using 3D printing technologies for clients worldwide in as little as 24 hours, the company has staked a claim to being the largest and fastest manufacturing source in the sector. With over two decades of experience, Proto Labs has become one of the most trusted names, and has built a very loyal customer base along the way.
What is Proto Labs, Inc (PRLB)?
Proto Labs, originally known as Proto Mold, was founded in 1999 by entrepreneur Larry Lukis. The company started by developing injection molding plastic parts and received recognition from clients for its quick turnaround time. Headquartered in Minnesota, the company used their early success to expand its offers into additional 3D printing processes. Currently, the company offers additional printing services such as CNC machining and sheet metal fabrication, which use a variety of different materials. In total, the company employs over 2,500 employees across several continents. The company focuses on providing services for clients who are looking for both early prototyping or low-volume production. This is in contrast to other companies in the space that focus on high volume production, but have longer lead times and less customization options.
Through Proto Lab’s Digital Manufacturing platform, clients are able to easily upload files, receive analysis and feedback, and reach production in a matter of days. The amount of time varies, depending on the technology used. For example, CNC machining can take as little as 1-3 days from file upload to shipped final products, while sheet metal fabrication and injection molding can take up to 15 days. This end-to-end digital approach has several benefits, allowing for a user-friendly experience, unprecedented speed, and ensures that all products meet customer expectations. Since its inception, the company has already received over 4,000,000 files from 48,000 developers on the Digital Platform. A main selling point of the Digital Platform is scalability, as the automated process is well developed and can handle additional demand as necessary, which a manual process could not.
Why does Proto Labs, Inc (PRLB) Matter?
Proto Labs stands out from the competition by marketing its rapid and on-demand service model. With a total of 12 manufacturing centers across North America, Europe, as well as Japan, the company is able to assist companies who are looking to produce custom parts urgently. Proto Labs takes advantage of an automated process to expedite the manufacturing process. Customers who upload designs to Proto Labs platform receive a quote within hours. This is made possible by an automated program that reviews the geometry and shape of the part in order to identify any potential issues that may come during the manufacturing process. The design is then optimized and sent back to the client for review, often within a few hours time. With a very large manufacturing footprint, the company is able to scale quickly in response to increased demand. Together, these factors have allowed clients to use Proto Lab services as a way to quickly and reliably maintain a supply chain of products. Due to the speed of production, companies are able to benefit from a “virtual inventory”, where products that have yet to be printed are accounted for in their supply chain decisions.
The company’s client base is diverse, with orders coming in from businesses all around the world. The top industries that Proto Labs services are the medical and healthcare industry, which accounts for 25% of their client base, the computer electronics industry, which accounts for 20% of their client base, the industrial machinery industry, which accounts for 10% of their client base, and the aerospace and automotive industries, which each account for each 5% of their client base respectively.
Proto Labs, Inc (PRLB) Prospects
The company has built out an impressive ecosystem that allows clients to have quick and easy access to a variety of different services. A key part of building on this success in the future will be through the newly acquired manufacturing platform 3D Hubs. Acquired by Proto Labs in early 2021 for $280 million in cash, stock, and incentives, the 3D Hubs platform will provide even quicker and more reliable access to manufacturing around the world for the company’s customers. By bringing 3D Hubs into the fold, Proto Labs will now be able to provide customers with an additional 240 manufacturing partners which use a variety of technologies including CNC machining, 3D printing, injection molding, and sheet metal fabrication. Since being founded in 2013, 3D Hubs has printed over 6 million 3D parts using these methods.
The acquisition will bring together two highly complementary companies, and broaden the appeal to clients who looking for a range of materials, technologies, and price ranges. Another aspect of this acquisition that will be key to future prospects is the ability to expand geographically. With these additional trusted manufacturing partners, Proto Labs will be able to both expand its customer base and also increase sales to existing customers. Another benefit of the deal will be to lower costs to Proto Labs, as new orders may be outsourced to partner manufacturers through 3D Hubs, thus reducing the potential overhead costs of in-house manufacturing.
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Proto Labs has created both hardware and software innovations that have resulted in a seamless, end-to-end customer experience. With their in-house Digital Platform and their newly acquired 3D Hubs platform, the company has given itself the ability to scale up as necessary. For any companies looking for a fast source of prototyping or low-volume production parts, Proto Labs has become one of the top choices in the sector. A combination of global reach and a variety of product offerings has made Proto Labs one of the top companies in the 3D printing space.