Adjusted EBITDA was $37 million, down 9% year-over-year, with margin declining 40 basis points to 3.4%.
Education segment revenue grew 5.6% year-over-year (5.3% organically), driven by strong fill rates in K-12 staffing.
ETM segment revenue declined 3.9% reported and 5.1% organically, impacted by large customer demand reductions and federal contractor declines.
Gross profit was $225.5 million with a 20.5% gross profit rate, improving 30 basis points year-over-year, aided by MRP acquisition but offset by organic declines.
Operating cash flow was strong, enabling a $130 million net debt paydown, ending the quarter with $74 million total borrowing and 0.6 adjusted EBITDA leverage ratio.
Reported EPS was $0.52 versus $0.12 in Q2 2024; adjusted EPS was $0.54 versus $0.71 prior year, reflecting lower earnings from operations and higher interest expense.
Revenue for Q2 2025 was $1.1 billion, up 4.2% year-over-year on a reported basis but down 3.3% organically due to macroeconomic pressures and reduced demand from federal contractors and large customers.
SET segment revenue increased 19% reported, driven by MRP acquisition, but organic revenue declined 8.5%, with a 3.2% decline excluding federal contractor impacts.
Adjusted EBITDA was $30.8 million with a margin of 13%.
Backlog increased 23% year-over-year to $360 million, led by longer-cycle project orders offsetting short-cycle softness.
Free cash flow was negative $21.4 million due to working capital seasonality, acquisition payments, higher taxes, and tariff payments.
GAAP loss per share was $0.07; adjusted EPS was $0.50, down $0.12 year-over-year mainly due to tariffs.
Gross margin was 32.7% GAAP and 34.3% adjusted, with adjusted gross margin contracting 370 basis points year-over-year due to tariffs, volume, and mix.
Operating income was $5.5 million GAAP and $18.5 million adjusted, with adjusted operating margin of 7.8%.
Orders grew 2% year-over-year to $259 million, driven by 8% growth in project-related orders and strength in EMEA.
Sales were down 2% year-over-year to $235.9 million, with a 3% decline in short-cycle sales and unchanged project-related sales.
SG&A expenses increased on a GAAP basis due to acquisition and realignment costs but adjusted SG&A decreased 5% excluding these items.
Short-cycle orders declined 4% due to tariff impacts and market digestion of price increases.
Tariffs negatively impacted gross profit by $4.2 million and gross margin by 180 basis points in Q1.
Adjusted EBITDA was $19.7 million or 14.6% of revenue, and non-GAAP EPS was $0.41, above guidance and up $0.03 year-over-year.
Cash from operations was $10.6 million, with $3.1 million returned to shareholders via share repurchases; cash and investments totaled $123.2 million with zero debt.
CNC machining revenue was a company record, growing 20% year-over-year, with U.S. CNC machining up 30%.
Injection molding revenue declined 4% year-over-year, 3D printing revenue was down 1%, and sheet metal revenue grew 9%.
Non-GAAP gross margin was flat sequentially at 44.8%, but down 90 basis points year-over-year due to higher network revenue mix and tariff impacts.
Non-GAAP operating expenses increased 6% year-over-year, mainly due to variable expenses tied to revenue such as incentive compensation and commissions.
Proto Labs reported record second quarter 2025 revenue of $135.1 million, up 6.5% year-over-year in constant currencies and 7% sequentially, exceeding guidance.
Revenue fulfilled through digital factories grew 4% year-over-year, while revenue through the Proto Labs Network increased 16%.
U.S. revenue grew 12% year-over-year, while Europe revenue declined 15% in constant currencies due to contracting manufacturing activity.
Dafinchi
