Velo3D(VLD) - 2024 Q1 - Quarterly Results

First Quarter 2024 Financial Results Overview Velo3D's first quarter 2024 results demonstrate strong commercial momentum and significant progress in operational efficiency Executive Summary & Key Highlights Velo3D reported strong demand in Q1 2024, with $17 million in new bookings and a $22 million backlog, driven by expansion in the defense sector. The company is executing its realignment plan, achieving a 30% year-over-year reduction in operating expenses and a 35% improvement in operating cash flow, positioning it to target cash flow breakeven in the second half of 2024 - The company is seeing strong commercial momentum with significant new orders and a solid backlog, particularly noting expansion in the defense sector with 3 new customers[2][3] Q1 2024 Commercial and Operational Highlights | Metric | Value | Note | | :--- | :--- | :--- | | Bookings | $17 million | $27 million since mid-December 2023 | | Backlog | $22 million | Exiting Q1 2024 | | Operating Expenses | Down 30% YoY | Down 15% sequentially (excl. one-time charges) | | Operating Cash Flow | 35% YoY improvement | On track for H2 2024 breakeven | | Q2 Revenue Outlook | >30% sequential growth | - | - Strategic realignment efforts are showing progress through significant cost reductions and improved operational efficiency, including a more than 40% reduction in installation days and labor for Sapphire XC printers[2][6] - Customer confidence is reflected in the fact that approximately 50% of Q1 bookings were from existing customers, supported by improved system reliability and resolution of 100% of high-priority service tickets[4][6] Financial Performance Analysis This section details Velo3D's Q1 2024 financial performance, including revenue, profitability, and cash flow metrics First Quarter 2024 Financial Summary For Q1 2024, Velo3D generated $9.8 million in GAAP revenue, a significant increase from Q4 2023 but a decrease from Q1 2023. The company reported a GAAP net loss of $28.3 million, or ($0.11) per share, and a non-GAAP net loss of $20.2 million. Gross margin was negative 28.8% due to lower fixed cost absorption. The company ended the quarter with $11 million in cash and investments Q1 2024 Key Financial Metrics | Metric ($ in Millions, except per-share data) | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | GAAP Revenue | $9.8 | $2.5 | $26.7 | | GAAP Gross Margin | (28.8)% | (>100)% | 9.5% | | GAAP Net Loss | $(28.3) | $(56.1) | $(36.3) | | GAAP Net Loss per Share | $(0.11) | $(0.27) | $(0.19) | | Non-GAAP Net Loss | $(20.2) | $(58.6) | $(17.9) | | Non-GAAP Net Loss per Share | $(0.08) | $(0.28) | $(0.09) | | Cash and Investments | $11 | $31 | $64 | Revenue Q1 2024 revenue increased sequentially, with continued growth expected in Q2 2024 - Revenue for Q1 was $10 million, showing a significant sequential increase from Q4 2023 driven by a rise in shipments[8] - The company anticipates continued momentum with expected revenue growth of more than 30% in the second quarter of 2024[8] Gross Margin Q1 2024 gross margin was negative due to fixed costs, with positive margin anticipated in Q2 2024 - Gross margin was negative 29% for the quarter, primarily due to the impact of lower fixed cost absorption despite increased shipments[9] - The company expects to achieve a positive gross margin in Q2 2024, driven by higher system shipments, improved material costs, and greater manufacturing efficiency[9] Operating Expenses Operating expenses saw significant sequential and year-over-year reductions, with further declines projected for Q2 2024 Q1 2024 Operating Expenses | Expense Type | Amount ($M) | Sequential Change | | :--- | :--- | :--- | | GAAP Operating Expenses | $18.6 | Down from $25.9 in Q4 2023 | | Non-GAAP Operating Expenses | $14.1 | Down 15% from Q4 2023 | - The company expects non-GAAP quarterly operating expenses to decline by more than 10% in Q2 2024 compared to Q1 2024[10] Net Loss and EBITDA The company reported GAAP and non-GAAP net losses, alongside an adjusted EBITDA loss for Q1 2024 Q1 2024 Profitability Metrics | Metric | Amount ($M) | | :--- | :--- | | Net Loss (GAAP) | $(28.3) | | Non-GAAP Net Loss | $(20.2) | | Adjusted EBITDA | $(11.7) | Cash Position and Cash Flow Velo3D ended Q1 with $11 million in cash, showing improved cash flow year-over-year and expected sequential improvements - The company ended Q1 with $11 million in cash, cash equivalents, and investments[12] - First quarter cash flow (excluding financing) improved by more than 35% year-over-year and the company expects sequential quarterly improvement in cash flow throughout 2024[12] Business Outlook and Guidance Velo3D provides its financial projections and strategic goals for 2024, including revenue and profitability targets 2024 Financial Guidance Velo3D maintains its full-year 2024 guidance, projecting revenue between $80 million and $95 million and non-GAAP operating expenses of $40 million to $50 million. The company anticipates over 30% sequential revenue growth in Q2 and expects to achieve a gross margin of approximately 30% by Q4 2024, while reiterating its goal of reaching free cash flow breakeven in the second half of the year 2024 Financial Guidance | Metric | Guidance | | :--- | :--- | | Q2 2024 Revenue Growth | > 30% (sequential) | | FY 2024 Revenue | $80 million to $95 million | | Q4 2024 Gross Margin | Approx. 30% | | FY 2024 Non-GAAP OpEx | $40 million to $50 million | - The company reaffirms its goal to achieve free cash flow breakeven in the second half of 2024[13] Financial Statements and Reconciliations This section presents Velo3D's unaudited consolidated financial statements and reconciliations of GAAP to non-GAAP measures Non-GAAP Reconciliations This section provides detailed reconciliations of GAAP to non-GAAP financial measures. It includes tables for Non-GAAP Net Loss, which adjusts for items like stock-based compensation and fair value changes; Non-GAAP Adjusted EBITDA, which further excludes interest, taxes, and depreciation; and Non-GAAP Operating Expenses, which excludes stock-based compensation - Non-GAAP Net Loss for Q1 2024 was $(20.2) million, reconciled from a GAAP Net Loss of $(28.3) million by excluding items such as $5.1 million in stock-based compensation and a $3.1 million combined loss on fair value of warrants and contingent earnout liabilities[25] - Adjusted EBITDA for Q1 2024 was a loss of $(11.7) million, compared to a loss of $(16.1) million in Q1 2023[27] - Adjusted Operating Expenses for Q1 2024 were $14.1 million, reconciled from GAAP operating expenses of $18.6 million primarily by excluding $4.5 million in stock-based compensation[29] Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements for the period ended March 31, 2024. It includes the Statement of Operations, which details revenues, costs, and net loss; the Balance Sheet, showing assets of $136.1 million and liabilities of $90.7 million; and the Statement of Cash Flows, which indicates a net cash usage of $20.5 million in operating activities Q1 2024 Statement of Operations Summary (in thousands) | Line Item | Q1 2024 | | :--- | :--- | | Total Revenue | $9,786 | | Gross Profit (Loss) | $(2,815) | | Loss from Operations | $(21,450) | | Net Loss | $(28,314) | Balance Sheet Summary as of March 31, 2024 (in thousands) | Line Item | Amount | | :--- | :--- | | Total Current Assets | $98,345 | | Total Assets | $136,148 | | Total Current Liabilities | $60,858 | | Total Liabilities | $90,698 | | Total Stockholders' Equity | $45,450 | - Net cash used in operating activities was $(20.5) million for the three months ended March 31, 2024, an improvement from $(30.8) million in the prior year period[34] Appendix This section provides background information on Velo3D and important disclaimers regarding forward-looking statements and non-GAAP financial measures About Velo3D Velo3D is a metal 3D printing technology company specializing in additive manufacturing (AM) for mission-critical parts. Their integrated solution, including Flow software, Sapphire printers, and Assure quality control, enables innovation in industries like space exploration, aviation, and energy. Key partners include SpaceX, Honeywell, and Lam Research - Velo3D is a metal 3D printing technology company focused on additive manufacturing for high-value metal parts, overcoming limitations of legacy AM technology[16] - The company's fully integrated solution includes Flow print preparation software, the Sapphire family of printers, and the Assure quality control system[17] - Velo3D serves customers in space exploration, aviation, power generation, energy, and semiconductor industries, with strategic partners like SpaceX, Honeywell, and Lam Research[17] Forward-Looking Statements and Non-GAAP Information This section contains standard legal disclaimers. It cautions investors that the press release includes "forward-looking statements" subject to significant risks and uncertainties, and that actual results may differ materially. It also explains the company's use of non-GAAP financial measures like Adjusted EBITDA and Non-GAAP Net Loss, stating they are supplemental to GAAP results and providing a rationale for their use - The press release contains forward-looking statements regarding guidance, performance, and strategic initiatives, which are subject to significant risks and uncertainties that could cause actual results to differ materially[20] - The company uses non-GAAP financial measures such as Non-GAAP Net Loss, EBITDA, and Adjusted EBITDA as supplemental information and advises that they should not be considered in isolation from, or as a substitute for, GAAP measures[22]