Velo3D(US:VLD)2023-08-15 20:36Financial Performance - Revenue for Q2 2023 was $25 million, up 25% from $20 million in Q2 2022[157] - Total revenue for the three months ended June 30, 2023, was $25.1 million, an increase of $5.5 million or 27.9% compared to $19.6 million in 2022[191] - Total revenue for the six months ended June 30, 2023, was $51.9 million, an increase of $20.1 million or 63.0% compared to $31.9 million in 2022[221] - 3D Printer sales increased to $23.2 million in Q2 2023 from $17.6 million in Q2 2022, reflecting a growth of $5.6 million or 31.6%[192] - 3D Printer sales contributed $47.8 million, representing a 71.8% increase from $27.8 million in the same period last year[222] Bookings and Backlog - Bookings for Q2 2023 were $16 million, down 11% from $18 million in Q2 2022, while total bookings for the first half of 2023 remained flat at $36 million compared to the same period in 2022[157] - Backlog as of June 30, 2023, was $15 million, significantly down from $55 million as of June 30, 2022[157] - The company expects demand for the Sapphire family of systems to drive future revenue growth, with a backlog of $15 million for 3D Printers as of June 30, 2023[195] Profitability and Expenses - Gross profit for the three months ended June 30, 2023, was $3.0 million, with a gross margin of 11.9%, compared to a gross profit of $1.2 million and a margin of 6.3% in 2022[204] - Total cost of revenue for Q2 2023 was $22.2 million, an increase of $3.7 million or 20.3% from $18.4 million in Q2 2022[198] - Gross profit for the six months ended June 30, 2023, was $5.9 million, with a gross margin of 11.4%, up from $1.2 million and 3.9% in 2022[231] - Total cost of revenue increased to $46.0 million, a rise of $15.4 million or 50.4% from $30.6 million in 2022[226] - The company reported a net loss of $59.4 million for the six months ended June 30, 2023, compared to a net income of $62.6 million in 2022, reflecting a change of $122.0 million[219] Research and Development - Research and development expenses are expected to increase, which may adversely affect near-term profitability as the company focuses on innovation[161] - Research and development expenses decreased to $12.5 million in Q2 2023 from $13.0 million in Q2 2022, a reduction of $0.5 million[206] - Research and development expenses decreased to $23.0 million, down $2.9 million from $25.9 million in the prior year[232] - Continued investment in product development is seen as crucial for future growth, with a focus on addressing customer needs and enhancing AM solutions[161] Customer Concentration and Diversification - Sales to the top three customers accounted for 47.0% of total sales in Q2 2023, a decrease from 65.1% in Q2 2022, indicating improved customer diversification[159] - The company aims to diversify its customer base but remains susceptible to risks associated with customer concentration[160] Cash Flow and Financing - As of June 30, 2023, the company had $47.3 million in cash and cash equivalents, down from $80.2 million at the end of 2022[240] - The company entered into a securities purchase agreement to issue up to $105 million in senior secured convertible notes, with $70 million issued on August 14, 2023, generating approximately $66 million in net proceeds[241] - Net cash used in operating activities for the six months ended June 30, 2023, was $58.8 million, a decrease of $10.0 million compared to $68.8 million in the same period of 2022[253] - Net cash provided by investing activities for the six months ended June 30, 2023, was $25.6 million, a significant improvement from a net cash outflow of $94.8 million in the same period of 2022[257] - Net cash provided by financing activities during the six months ended June 30, 2023, was $30.1 million, compared to a net cash outflow of $0.5 million in the same period of 2022[260] - The company believes its cash and cash equivalents, along with expected future cash generation, will be sufficient to meet working capital and capital expenditure requirements for at least twelve months[245] Operational Challenges - The company continues to face supply chain challenges that have increased material and shipping costs, impacting gross margins[164] - The timeframe from order to completion of the site acceptance test is expected to be reduced as production scales[169] - The company expects cash used in operating activities to decrease due to stabilizing working capital requirements and cost reduction initiatives for the remainder of 2023[256] - The company anticipates a decrease in capital expenditures for the remainder of 2023, limiting the number of 3D Printer systems for lease to customers[259] Interest and Liabilities - Interest expense increased to $0.3 million in Q2 2023 from $0.1 million in Q2 2022, reflecting the impact of recent financing activities[212] - Interest expense increased to $0.6 million for the six months ended June 30, 2023, compared to $0.2 million in 2022[235] - The gain on fair value of contingent earnout liabilities decreased significantly to $1.8 million in Q2 2023 from $130.2 million in Q2 2022, a decline of 98.6%[189] - The change in fair value of contingent earnout liabilities resulted in a loss of $7.8 million for the six months ended June 30, 2023, compared to a gain of $99.0 million in 2022[237] Regulatory and Compliance - The company is classified as a smaller reporting company under Rule 12b-2 of the Exchange Act, thus exempt from providing certain market risk disclosures[273]