Protolabs surges on record Q4 revenue, CNC machining strength
Digital manufacturer beats earnings estimates with 25% growth in CNC segment as 2026 guidance shows confidence
Protolabs shares rallied in pre-market trading Friday after the digital manufacturing specialist reported better-than-expected fourth-quarter earnings, driven by record revenue and robust performance in its CNC machining business.
The Maple Plain, Minnesota-based company posted adjusted earnings per share of $0.44 for the quarter, beating analyst estimates of $0.392 by 12.2%. Revenue reached $136.5 million, surpassing consensus expectations of $133.8 million and marking a record quarterly performance with 12.1% year-over-year growth.
The standout performer was Protolabs' CNC machining segment, which delivered 25% year-over-year growth in the fourth quarter. This acceleration builds on momentum from earlier in 2025, when global CNC machining revenue surged 18.2% in the third quarter and 20% in the second quarter, with U.S. demand showing particular strength.
"CNC machining has emerged as a key growth driver for Protolabs, reflecting increased demand from aerospace, defense, and industrial customers for precision components," according to analyst reports. The company's proprietary "First Part" software for automated design for manufacturability analysis has helped it maintain competitive advantage in the segment.
Protolabs, which holds an estimated 12% market share in online manufacturing services, has been executing a strategic pivot toward on-demand production and expanded digital capabilities. The company operates an integrated network of more than 75 digitally connected factories, supplemented by the Protolabs Network of over 250 vetted manufacturing partners.
Looking ahead, management provided guidance for fiscal year 2026 revenue growth of 6% to 8%, suggesting confidence in sustained demand despite broader economic uncertainty. The company ended 2025 with a strong cash position of $142.4 million, providing flexibility for continued investment in automation and AI technologies.
For the full year 2025, Protolabs generated $74.5 million in cash and swung to a $6 million profit in the fourth quarter, a notable improvement from earlier periods. The company's diverse service portfolio spans injection molding (42% of revenue), CNC machining (33%), 3D printing (17%), and sheet metal fabrication (8%).
Analysts have maintained a cautiously optimistic outlook on the stock, with an average 12-month price target of $56.67, representing upside from Thursday's closing price of $52.48. Protolabs currently trades at a forward price-to-earnings ratio of 24.69, significantly below its trailing multiple of 86.23, reflecting expectations for earnings acceleration.
The stock's performance in 2025 has been robust, with shares trading near their 52-week high of $56.60 despite recent volatility. Strong institutional ownership of 94% indicates confidence among large investors, though some analysts have flagged potential margin pressures from changing tariff and trade policies as a risk to monitor.
Protolabs' earnings beat comes amid broader strength in the industrial manufacturing sector, as companies increasingly adopt digital production methods to reduce development timelines and improve supply chain resilience. The company's ability to combine rapid prototyping with scalable production positions it to benefit from long-term trends toward manufacturing digitization.
"We remain focused on expanding our capabilities and leveraging our digital platform to serve customers across diverse end markets," the company stated in its earnings materials, highlighting ongoing investments in generative design and predictive manufacturing technologies.
Investors will be watching closely for signs that the CNC machining momentum can be sustained into 2026, and whether improved profitability in the fourth quarter represents the beginning of a more consistent earnings trajectory for the digital manufacturing pioneer.