Key Financial Measures and Trends

• expanding the breadth and scope of our products by adding more sizes and

• the introduction of our 3D Printing product line through our acquisition of

• expanding 3D printing to Europe through our acquisition of Alphaform in

• the introduction of our Sheet Metal product line through our acquisition of

• providing customers with on-demand access to a global network of premium

During 2022, we served 56,333 unique product developers and engineers who purchased our products through our web-based customer interface, an increase of 1.8% over the same period in 2021.

Cost of Revenue, Gross Profit and Gross Margin

Operating expenses consist of marketing and sales, research and development and general and administrative expenses. Personnel-related costs are the most significant component in each of these categories.

General and administrative. General and administrative expense consists primarily of employee compensation, benefits, stock-based compensation, professional service fees related to accounting, tax and legal and other related overhead, which includes an allocation of information technology expense including amortization of PL 2.0 software assets. We expect general and administrative expense to increase in the future as we continue to grow and expand as a global organization.

Changes in fair value of contingent consideration. Our contingent consideration liability is related to our acquisition of Hubs in 2021 and is evaluated quarterly for changes in fair value.

Stock-based compensation expense included in the statements of comprehensive income data above is as follows:

Comparison of Years Ended December 31, 2022 and 2021

Revenue by reportable segment and the related changes for 2022 and 2021 is summarized as follows:

Revenue by product line and the related changes for 2022 and 2021 is summarized as follows:

By product line, our revenue increase was driven by a 12.9% increase in CNC Machining revenue and an 8.6% increase in 3D Printing revenue, which was partially offset by an 11.3% decrease in Injection Molding revenue, a 4.4% decrease in Sheet Metal revenue, and a 53.1% decrease in Other Revenue, in each case for 2022 compared with 2021.

Cost of Revenue, Gross Profit and Gross Margin

Other (Expense) Income, Net and Provision for Income Taxes

Comparison of Years Ended December 31, 2021 and 2020

The following table summarizes our cash flows for the years ended December 31, 2022, 2021 and 2020:

Cash Flows from Operating Activities

Cash Flows from Investing Activities

Cash used in investing activities was $43.1 million for the year ended December 31, 2022, consisting of $17.6 million for the net purchases of property, equipment and other capital assets and $25.5 million of net purchases of marketable securities.

Cash Flows from Financing Activities

Operating and Capital Expenditure Requirements

Our future capital requirements will depend on many factors, including the following:

• the revenue growth in Injection Molding, CNC Machining, 3D Printing and Sheet

• costs of operations, including costs relating to expansion and growth;

• the emergence of competing or complementary technological developments;

• the costs of filing, prosecuting, defending and enforcing any patent claims

and other intellectual product rights, or participating in litigation-related

• the acquisition of businesses, products and technologies, although we

currently have no commitments or agreements relating to any of these types of

As of December 31, 2022, our contractual obligations are $21.4 million related to current and long-term operating and finance lease liabilities.

We had no financing arrangements as of December 31, 2022 and 2021.

The fair value of each offering period was estimated using the Black-Scholes option pricing model with the following assumptions:

We did not recently adopt any accounting pronouncements that had a material impact on our Consolidated Financial Statements. There are no pending accounting pronouncements that are expected to have a material impact on our Consolidated Financial Statements.

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