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Velo3D Announces First Quarter 2024 Financial Results

By: via Business Wire

Successfully Executing on Realignment Priorities

Strong Demand Provides Significant Second Quarter Visibility

Strategic Review Process to Maximize Shareholder Value Remains Ongoing

  • Continued sales execution in Q1 2024
    • Bookings of $17 million; 50% of orders from existing customers - $27 million in bookings since mid-December 2023
    • $22 million in backlog exiting Q124
    • Continued defense sector expansion – added 3 new customers in Q124
    • Q2 revenue visibility – expect >30% sequential revenue growth
  • Successfully reduced quarterly operating expenses
    • Down 30% year over year – down 15% sequentially (excluding one-time charges)
    • On track for Q224 cost reduction goals
  • Operating cash flow – 35% year over year improvement, well positioned to achieve cash flow breakeven in the second half of FY 2024

Velo3D, Inc. (NYSE: VLD), a leading additive manufacturing technology company for mission-critical metal parts, today announced financial results for its first quarter ended March 31, 2024.

“We were pleased with our first quarter performance as we continued to successfully execute on our strategic priorities,” said Brad Kreger, CEO of Velo3D. “Specifically, we are now just starting to see the benefit of our new go to market initiatives as we booked $17 million in new orders during the quarter. Additionally, we entered the second quarter with $22 million in backlog. We believe this strength reflects the continued customer confidence in our technology as well as our success in expanding our footprint in our core markets, including the defense sector, as we added 3 new defense customers in the first quarter. Our re-alignment efforts are also showing progress as we further reduced our quarterly costs and improved our operational efficiency. We also executed on our initiatives to improve system reliability which is reflected in the fact that approximately 50% of first quarter bookings were from existing customers. Finally, we remain committed to achieving cash flow breakeven in the second half of the year.”

Key highlights related to the company’s strategic initiatives:

  • Ensuring customer success / system reliability – resolved 100% of high priority tickets in Q124
  • Increased revenue 1H24 visibility through bookings growth – booked $17 million in new orders in Q124 - $27 million since mid-December with approximately 50% of orders from existing customers
  • Improved Sapphire printer quality – increased sequential Sapphire XC installation efficiency - >40% reduction in install days and labor
  • Improving cash flow and cost structure – successfully reduced year over year operating expenses by 30%, expect sequential quarterly improvement in operating cash flow for FY 2024

“Looking forward, we believe the focus on our key priorities, as well as further executing on our margin and cash flow initiatives, will position us to profitably capitalize on the increasing industry demand for leading-edge additive manufacturing solutions,” concluded Kreger.

($ in Millions, except percentages and per-share data)

1st Quarter 2024

4th Quarter 2023

1st Quarter 2023

GAAP revenue

$9.8

$2.5

$26.7

GAAP gross margin

(28.8)%

(>100)%

9.5%

GAAP net loss1

$(28.3)

$(56.1)

$36.3

GAAP net loss per diluted share

$(0.11)

$(0.27)

$0.19

 

 

 

 

Non-GAAP net loss2

$(20.2)

$(58.6)

$17.9

Non-GAAP net loss per diluted share2

$(0.08)

($0.28)

$0.09

Cash and Investments

$11

$31

$64

  1. Information about Velo3D’s use of non-GAAP information, including a reconciliation to U.S. GAAP, is provided at the end of this release under “Non-GAAP Financial Information”. The non-GAAP financial measures presented in this release should not be considered as the sole measure of the company’s performance and should not be considered in isolation from, or as a substitute for, comparable financial measures calculated in accordance with generally accepted accounting principles accepted in the United States.
  2. Non-GAAP net loss and non-GAAP net loss per diluted share exclude stock-based compensation expense, fair value adjustments for the Company’s warrants, contingent earnout and debt derivative liabilities, and loss on extinguishment of debt.

Summary of First Quarter 2024 Results

Revenue for the first quarter was $10 million. Revenue increased compared to the fourth quarter of 2023, primarily driven by an increase in shipments. Given its strong backlog and shipping forecast exiting the first quarter, the company expects revenue growth of more than 30% in the second quarter of 2024. Support services and recurring payment revenue increased sequentially due to a higher number of systems in operation.

Gross margin for the first quarter was negative 29%. While shipments increased sequentially, gross margin primarily reflected the impact of lower fixed cost absorption. The company expects positive gross margin in the second quarter of 2024 as a result of increased system shipments, improvements in its system balance of material costs, benefits from its new long term supply contracts and higher operating and manufacturing efficiency.

GAAP operating expenses for the first quarter were $18.6 million compared to $25.9 million in the fourth quarter of 2023. Non-GAAP operating expenses, excluding re-alignment charges and stock-based compensation expense of $4.5 million, was $14.1 million, down 15% sequentially from the fourth quarter of 2023. The company expects non-GAAP quarterly operating expenses to decline by more than 10% in the second quarter of 2024 compared to the first quarter of 2024 as the company continues to execute on its cost initiatives.

Net loss for the quarter was $28.3 million and reflected a non-cash loss of $3.1 million on the change in the fair value of warrants and contingent earnout liabilities. Non-GAAP net loss, was $20.2 million in the three months ended March 31, 2024. Adjusted EBITDA for the quarter, was a loss of $11.7 million. For more information regarding the company’s non-GAAP financial measures, see “Non-GAAP Financial Information” below.

The company ended the quarter with $11 million in cash, cash equivalents and investments. First quarter cash flow, excluding financing activities, was in line company's forecasts and improved more than 35% on a year over year basis. The company continues to expect sequential quarterly improvement in cash flow in 2024.

Guidance

The company continues to expect sequential improvement in revenue, gross margin and operating expenses in the second quarter of 2024. The company also believes the continued execution of its realignment strategy will enable it to reach its goal of free cash flow breakeven in the second half of 2024.

The company’s 2024 guidance is unchanged and is as follows:

  • Q2 2024 revenue growth of more than 30%
  • FY 2024 revenue in the range of $80 million to $95 million
  • Sequential quarterly improvement in gross margin with fourth quarter 2024 gross margin of approximately 30%, excluding non-recurring charges related to its cost reduction initiatives
  • Non-GAAP operating expenses of $40 to $50 million

The company will host a conference call for investors this afternoon to discuss its first quarter 2024 financial results at 2:00 p.m. Pacific Time. The call will be webcast and can be accessed from the Events page of the Investor Relations section of Velo3D’s website at ir.velo3d.com.

About Velo3D:

Velo3D is a metal 3D printing technology company. 3D printing—also known as additive manufacturing (AM)—has a unique ability to improve the way high-value metal parts are built. However, legacy metal AM has been greatly limited in its capabilities since its invention almost 30 years ago. This has prevented the technology from being used to create the most valuable and impactful parts, restricting its use to specific niches where the limitations were acceptable.

Velo3D has overcome these limitations so engineers can design and print the parts they want. The company’s solution unlocks a wide breadth of design freedom and enables customers in space exploration, aviation, power generation, energy, and semiconductor to innovate the future in their respective industries. Using Velo3D, these customers can now build mission-critical metal parts that were previously impossible to manufacture. The fully integrated solution includes the Flow print preparation software, the Sapphire family of printers, and the Assure quality control system—all of which are powered by Velo3D’s Intelligent Fusion manufacturing process. The company delivered its first Sapphire system in 2018 and has been a strategic partner to innovators such as SpaceX, Honeywell, Honda, Chromalloy, and Lam Research. Velo3D has been named as one of Fast Company’s Most Innovative Companies for 2023. For more information, please visit Velo3D.com, or follow the company on LinkedIn or X (formerly known as Twitter).

VELO, VELO3D, SAPPHIRE and INTELLIGENT FUSION, are registered trademarks of Velo3D, Inc.; and WITHOUT COMPROMISE, FLOW and ASSURE are trademarks of Velo3D, Inc. All Rights Reserved © Velo3D, Inc.

Amounts herein pertaining to March 31, 2024 represent a preliminary estimate as of the date of this earnings release and may be revised upon filing our Quarterly Report on Form 10-Q with the Securities and Exchange Commission (the “SEC”). More information on our results of operations for the three months ended March 31, 2024 will be provided upon filing our Quarterly Report on Form 10-Q with the SEC.

Forward-Looking Statements:

This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1996. The company’s actual results may differ from its expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect”, “estimate”, “project”, “budget”, “forecast”, “anticipate”, “intend”, “plan”, “may”, “will”, “could”, “should”, “believes”, “predicts”, “potential”, “continue”, and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the company’s guidance for the second quarter and full year 2024 (including the company’s estimates for revenue, gross margin and non-GAAP operating expenses), the company's expectations regarding its performance during 2024, the company's strategic realignment and initiatives, the company’s expectations regarding its liquidity and capital requirements, and the company’s other expectations, hopes, beliefs, intentions or strategies for the future. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. You should carefully consider the risks and uncertainties described in the “Risk Factors” section of the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “FY 2023 10-K”), which was filed by the company with the SEC on April 4, 2024 and the other documents filed by the company from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Most of these factors are outside the company’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: (1) the inability of the company to execute its business plan, which may be affected by, among other things, competition, the ability of the company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its key employees; (2) the company’s ability to continue as a going concern; (3) the company’s ability to maintain its listing on the New York Stock Exchange; (4) the company’s ability to service and comply with its indebtedness; (5) the company’s ability to raise additional capital in the future; (6) the possibility that the company may be adversely affected by other economic, business, and/or competitive factors; and (7) other risks and uncertainties indicated from time to time described in the FY 2023 10-K, including those under “Risk Factors” therein, and in the company’s other filings with the SEC. The company cautions that the foregoing list of factors is not exclusive and not to place undue reliance upon any forward-looking statements, including projections, which speak only as of the date made. The company does not undertake or accept any obligation to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.

The information in the table below sets forth the non-GAAP financial measures that the company uses in this release. Because of the limitations associated with these non-GAAP financial measures, “Non-GAAP Net Loss”, “EBITDA”, “Adjusted EBITDA” and “Non-GAAP Operating Expenses”, should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. The company compensates for these limitations by relying primarily on its GAAP results and using Non-GAAP Net Loss, EBITDA, Adjusted EBITDA, and Non-GAAP Operating Expenses on a supplemental basis. You should review the reconciliation of the non-GAAP financial measures below and not rely on any single financial measure to evaluate the company's business.

The following tables reconcile Net income (loss) to Non-GAAP Net Loss, EBITDA, and Adjusted EBITDA and Total Operating Expenses to Non-GAAP Operating Expenses during the periods below:

Velo3D, Inc.

NON-GAAP Net Income (Loss) Reconciliation

(Unaudited)

 
Three months ended
March 31,

2024		 December 31,

2023		 March 31,

2023
(In thousands, except for percentages)
% of Rev % of Rev % of Rev
Revenue

$

9,786

 

100.0

%

$

2,455

 

100.0

%

$

26,687

 

100.0

%

Gross Profit

 

(2,815

)

(28.8

)%

 

(31,498

)

(1283.0

)%

 

2,532

 

9.5

%

Net Income (Loss)

$

(28,314

)

(289.3

)%

$

(56,149

)

(2287.1

)%

$

(36,325

)

(136.1

)%

Stock-based compensation

 

5,087

 

52.0

%

 

5,445

 

221.8

%

 

6,236

 

23.4

%

(Gain) Loss on fair value of warrants

 

2,620

 

26.8

%

 

(2,476

)

(100.9

)%

 

2,553

 

9.6

%

(Gain) Loss on fair value of contingent earnout liabilities

 

437

 

4.5

%

 

(12,958

)

(527.8

)%

 

9,653

 

36.2

%

Gain on fair value of debt derivative

 

—

 

—

%

 

(11,649

)

(474.5

)%

 

—

 

—

%

Loss on extinguishment of debt

 

—

 

—

%

 

19,197

 

782.0

%

 

—

 

—

%

Non-GAAP Net Loss

$

(20,170

)

(206.1

)%

$

(58,590

)

(2386.6

)%

$

(17,883

)

(67.0

)%

Velo3D, Inc.

NON-GAAP Adjusted EBITDA Reconciliation

(Unaudited)

 
Three months ended
March 31,

2024		 December 31,

2023		 March 31,

2023
(In thousands, except for percentages)
% of Rev % of Rev % of Rev
Revenue

$

9,786

 

100.0

%

$

2,455

 

100.0

%

$

26,687

 

100.0

%

Net Income (Loss)

 

(28,314

)

(289.3

)%

 

(56,149

)

(2287.1

)%

 

(36,325

)

(136.1

)%

Interest expense

 

3,897

 

39.8

%

 

6,140

 

250.1

%

 

220

 

0.8

%

Tax expense

 

4

 

0.0

%

 

—

 

—

%

 

—

 

—

%

Depreciation and amortization

 

4,567

 

46.7

%

 

4,794

 

195.3

%

 

1,560

 

5.8

%

EBITDA

$

(19,846

)

(202.8

)%

$

(45,215

)

(1841.8

)%

$

(34,545

)

(129.4

)%

Stock-based compensation

 

5,087

 

52.0

%

 

5,445

 

221.8

%

 

6,236

 

23.4

%

(Gain) Loss on fair value of warrants

 

2,620

 

26.8

%

 

(2,476

)

(100.9

)%

 

2,553

 

9.6

%

(Gain) Loss on fair value of contingent earnout liabilities

 

437

 

4.5

%

 

(12,958

)

(527.8

)%

 

9,653

 

36.2

%

Gain on fair value of debt derivative

 

—

 

—

%

 

(11,649

)

(474.5

)%

 

—

 

—

%

Loss on extinguishment of debt

 

—

 

—

%

 

19,197

 

782.0

%

 

—

 

—

%

Adjusted EBITDA

$

(11,702

)

(119.6

)%

$

(47,656

)

(1941.2

)%

$

(16,103

)

(60.3

)%

Velo3D, Inc.

NON-GAAP Adjusted Operating Expenses Reconciliation

(Unaudited)

 
Three months ended
March 31,

2024		 December 31,

2023		 March 31,

2023
(In thousands, except for percentages)
% of Rev % of Rev % of Rev
Revenue

$

9,786

100.0

%

$

2,455

100.0

%

$

26,687

100.0

%

Operating expenses
Research and development

 

5,043

51.5

%

 

9,886

402.7

%

 

10,417

39.0

%

Selling and marketing

 

4,809

49.1

%

 

5,175

210.8

%

 

6,174

23.1

%

General and administrative

 

8,783

89.8

%

 

10,877

443.1

%

 

10,191

38.2

%

Total operating expenses

 

18,635

190.4

%

 

25,938

1056.5

%

 

26,782

100.4

%

Stock-based compensation in operating expenses

 

4,503

46.0

%

 

4,780

194.7

%

 

5,970

22.4

%

Adjusted operating expenses

$

14,132

144.4

%

$

21,158

861.8

%

$

20,812

78.0

%

Velo3D, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(in thousands, except share and per share data)
 
Three months ended
March 31, 2024 December 31, 2023 March 31, 2023
 
Revenue
3D Printer

$

7,660

 

$

513

 

$

24,448

 

Recurring payment

 

470

 

 

535

 

 

575

 

Support services

 

1,656

 

 

1,407

 

 

1,664

 

Total Revenue

 

9,786

 

 

2,455

 

 

26,687

 

Cost of revenue
Cost of 3D Printer

 

9,394

 

 

31,455

 

 

22,168

 

Cost of Recurring Payment

 

315

 

 

398

 

 

447

 

Cost of Support Services

 

2,892

 

 

2,100

 

 

1,540

 

Total cost of revenue

 

12,601

 

 

33,953

 

 

24,155

 

Gross profit (loss)

 

(2,815

)

 

(31,498

)

 

2,532

 

Operating expenses
Research and development

 

5,043

 

 

9,886

 

 

10,417

 

Selling and marketing

 

4,809

 

 

5,175

 

 

6,174

 

General and administrative

 

8,783

 

 

10,877

 

 

10,191

 

Total operating expenses

 

18,635

 

 

25,938

 

 

26,782

 

Loss from operations

 

(21,450

)

 

(57,436

)

 

(24,250

)

Interest expense

 

(3,897

)

 

(6,140

)

 

(220

)

Gain (loss) on fair value of warrants

 

(2,620

)

 

2,476

 

 

(2,553

)

Gain (loss) on fair value of contingent earnout liabilities

 

(437

)

 

12,958

 

 

(9,653

)

Gain on fair value of debt derivative

 

—

 

 

11,649

 

 

—

 

Loss on extinguishment of debt

 

—

 

 

(19,197

)

 

—

 

Other income, net

 

94

 

 

(459

)

 

351

 

Loss before provision for income taxes

 

(28,310

)

 

(56,149

)

 

(36,325

)

Provision for income taxes

 

(4

)

 

—

 

 

—

 

Net loss

 

(28,314

)

 

(56,149

)

 

(36,325

)

 
Net loss per share:
Basic

$

(0.11

)

$

(0.27

)

$

(0.19

)

Diluted

$

(0.11

)

$

(0.27

)

$

(0.19

)

 
Shares used in computing net loss per share:
Basic

 

260,294,161

 

 

207,869,092

 

 

189,609,021

 

Diluted

 

260,294,161

 

 

207,869,092

 

 

189,609,021

 

 
Net loss

$

(28,314

)

$

(56,149

)

$

(36,325

)

Net unrealized holding gain (loss) on available-for-sale investments

 

52

 

 

156

 

 

288

 

Total comprehensive loss

$

(28,262

)

$

(55,993

)

$

(36,037

)

Velo3D, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share and per share data)
 
March 31, December 31,

2024

2023

(in thousands, except share and per share data)
Assets
Current assets:
Cash and cash equivalents

$

7,754

 

$

24,494

 

Short-term investments

 

3,151

 

 

6,621

 

Accounts receivable, net

 

11,653

 

 

9,583

 

Inventories

 

62,799

 

 

60,816

 

Contract assets

 

9,906

 

 

7,510

 

Prepaid expenses and other current assets

 

3,082

 

 

4,000

 

Total current assets

 

98,345

 

 

113,024

 

Property and equipment, net

 

15,253

 

 

16,326

 

Equipment on lease, net

 

5,482

 

 

6,667

 

Other assets

 

17,068

 

 

17,782

 

Total assets

$

136,148

 

$

153,799

 

 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable

$

15,595

 

$

15,854

 

Accrued expenses and other current liabilities

 

6,244

 

 

6,491

 

Debt - current portion

 

34,300

 

 

21,191

 

Contract liabilities

 

4,719

 

 

5,135

 

Total current liabilities

 

60,858

 

 

48,671

 

Long-term debt - less current portion

 

2,003

 

 

11,941

 

Contingent earnout liabilities

 

1,893

 

 

1,456

 

Warrant liabilities

 

14,455

 

 

11,835

 

Other noncurrent liabilities

 

11,489

 

 

11,556

 

Total liabilities

$

90,698

 

$

85,459

 

 
Commitments and contingencies
 
Stockholders’ equity:
Common stock, $0.00001 par value - 500,000,000 shares authorized at March 31, 2024 and December 31, 2023, 261,704,589 and 258,418,695 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

 

2

 

 

2

 

Additional paid-in capital

 

430,843

 

 

425,471

 

Accumulated other comprehensive income

 

(44

)

 

(96

)

Accumulated deficit

 

(385,351

)

 

(357,037

)

Total stockholders’ equity

$

45,450

 

$

68,340

 

Total liabilities and stockholders’ equity

$

136,148

 

$

153,799

 

Velo3D, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
 
Three Months Ended
March 31,

2024		 March 31,

2023
Cash flows from operating activities
Net loss

 

(28,314

)

 

(36,325

)

Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization

 

4,567

 

 

1,560

 

Stock-based compensation

 

5,087

 

 

6,236

 

Loss on fair value of warrants

 

2,620

 

 

2,553

 

Loss on fair value of contingent earnout liabilities

 

437

 

 

9,653

 

Changes in assets and liabilities
Accounts receivable

 

(2,070

)

 

(5,162

)

Inventories

 

2,645

 

 

(1,425

)

Contract assets

 

(2,118

)

 

(1,124

)

Prepaid expenses and other current assets

 

1,078

 

 

2,776

 

Other assets

 

396

 

 

247

 

Accounts payable

 

(4,199

)

 

(2,694

)

Accrued expenses and other liabilities

 

(218

)

 

(1,848

)

Contract liabilities

 

(416

)

 

(4,583

)

Other noncurrent liabilities

 

(18

)

 

(698

)

Net cash used in operating activities

 

(20,523

)

 

(30,834

)

Cash flows from investing activities
Purchase of property and equipment

 

(6

)

 

(403

)

Production of equipment for lease to customers

 

(1

)

 

(135

)

Proceeds from maturities of available-for-sale investments

 

3,500

 

 

21,500

 

Net cash provided by investing activities

 

3,493

 

 

20,962

 

Cash flows from financing activities
Proceeds from ATM offering, net of issuance costs

 

—

 

 

10,458

 

Proceeds from revolver facility

 

—

 

 

5,000

 

Repayment of equipment loans

 

—

 

 

(734

)

Issuance of common stock upon exercise of stock options

 

285

 

 

310

 

Net cash provided by financing activities

 

285

 

 

15,034

 

Effect of exchange rate changes on cash and cash equivalents

 

5

 

 

(6

)

Net change in cash and cash equivalents

 

(16,740

)

 

5,156

 

Cash and cash equivalents and restricted cash at beginning of period

 

25,294

 

 

32,783

 

Cash and cash equivalents and restricted cash at end of period

$

8,554

 

$

37,939

 

 
Supplemental disclosure of cash flow information
Cash paid for interest

$

556

 

$

220

 

Supplemental disclosure of non-cash information
Unpaid liabilities related to property and equipment

 

(59

)

 

(16

)

Equipment for lease to customers returned to inventory

 

912

 

 

—

 

 

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the total of such amounts shown on the condensed consolidated statements of cash flows:

 
Three Months Ended
March 31,

2024		 March 31,

2023
Cash and cash equivalents

$

7,754

 

$

37,139

 

Restricted cash (Other assets)

 

800

 

 

800

 

Total cash and cash equivalents, and restricted cash

$

8,554

 

$

37,939

 

 

Contacts

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