Velo3D(US:VLD)2021-11-16 22:09Revenue and Sales Performance - Total revenue for the three months ended September 30, 2021, was $8.7 million, an increase of $6.4 million, or 283.2%, compared to $2.3 million in the same period of 2020 [251]. - Total revenue for the nine months ended September 30, 2021, was $17.0 million, an increase of $4.8 million or 39.2% compared to $12.2 million in 2020 [289]. - Revenues for the three months ended September 30, 2021, were $8.7 million, a 282.5% increase from $2.3 million in the same period of 2020 [325]. - 3D Printer sales accounted for $7.3 million, representing 83.6% of total revenue, with a significant increase of $5.5 million attributed to five 3D Printer sales compared to one in the prior year [253]. - Recurring payment revenue increased to $0.6 million, up 308.2% from $0.1 million, due to an increase in the number of 3D Printer systems in service from three to nine [254]. - Support service revenue rose to $0.8 million, a 114.4% increase from $0.4 million, driven by an increase in 3D Printer systems in service from 20 to 38 [256]. - Recurring payment revenue increased significantly to $1.2 million for the nine months ended September 30, 2021, compared to $146,000 in 2020, reflecting a growth of 743.2% [288]. Customer and Market Dynamics - Sales to the top three customers accounted for more than 86.2% of revenue for the three months ended September 30, 2021, and 48.0% for the nine months ended September 30, 2021, indicating significant customer concentration risk [227]. - The company has received 14 firm orders and 21 reservations for the Sapphire XC, indicating strong future demand and revenue potential [258]. - The company’s "land and expand" strategy involves initial sales of a single machine followed by additional purchases as customers integrate the technology into their operations [212]. Costs and Expenses - Total cost of revenue for the three months ended September 30, 2021, was $7.2 million, an increase of $5.5 million, or 305.4%, compared to $1.8 million in 2020 [263]. - Cost of 3D Printers was $5.7 million, up from $1.1 million, due to the increase in sales volume and higher factory overhead costs [264]. - Total cost of revenue for the nine months ended September 30, 2021, was $13.8 million, an increase of $5.5 million or 67.0% from $8.2 million in 2020 [296]. - The cost of revenue for 3D Printer sales was $10.2 million, representing 59.7% of total revenue for the nine months ended September 30, 2021 [288]. - Operating expenses for the three months ended September 30, 2021, totaled $16.5 million, which is 189.3% of revenues, compared to $7.5 million or 330.4% of revenues in the same period of 2020 [327]. Research and Development - The company’s research and development expenses are expected to continue increasing, which may adversely affect near-term profitability [228]. - Research and development expenses were $8.0 million, a 97.6% increase from $4.0 million, reflecting the company's commitment to advancing innovative technologies [250]. - Research and development expenses increased to $19.1 million for the nine months ended September 30, 2021, up $8.2 million or 74.8% from $10.9 million in 2020 [288]. - The company expects research and development costs to continue increasing as it invests in enhancing its portfolio of additive manufacturing solutions [272]. - The company expects research and development costs to continue increasing as it invests in enhancing its AM solutions portfolio, particularly for the Sapphire XC system anticipated for delivery in late 2021 [304]. Financial Position and Cash Flow - The company incurred $19.9 million in transaction costs related to the merger, with total net cash proceeds amounting to $278.3 million [215]. - Cash and cash equivalents as of September 30, 2021, were $296.8 million, with an accumulated deficit of $215.4 million [335]. - Net cash used in operating activities for the nine months ended September 30, 2021, was $(31.3) million, an increase of $(11.4) million from $(19.9) million in the same period of 2020 [343]. - Net cash used in investing activities during the nine months ended September 30, 2021, was $8.5 million, consisting of $1.5 million for property and equipment purchases and $6.9 million for production of equipment on lease to customers [347]. - Net cash provided by financing activities during the nine months ended September 30, 2021, was $323.5 million, primarily from net proceeds of $143.2 million from the Merger and $155.0 million from PIPE Financing [349]. Losses and Financial Challenges - Loss from operations for the three months ended September 30, 2021, was $(15.0) million, compared to $(7.0) million in the same period of 2020, representing a 113.9% increase in losses [250]. - Net loss for the three months ended September 30, 2021, was $(66.6) million, compared to $(7.1) million in the same period of 2020, representing a 837.7% increase in loss [325]. - Adjusted EBITDA for the three months ended September 30, 2021, was $(13.0) million, a 107.0% increase in loss from $(6.3) million in the same period of 2020 [325]. - The loss on the convertible note modification was $50.6 million for the three months ended September 30, 2021, with no such loss recorded in the same period in 2020 [281]. - The loss on the convertible note modification was $50.6 million for the nine months ended September 30, 2021, with no such loss recorded in 2020 [313]. Future Outlook and Investments - The company expects the new Sapphire XC system to reduce production costs per part by approximately 65% to 80% compared to the existing Sapphire system, with commercial shipments scheduled for the end of fiscal year 2021 [222]. - The company plans to invest an additional $4.0 million to $7.0 million in factory equipment and leasehold improvements for the Sapphire XC systems [222]. - The company has a contractual obligation of $10.9 million in base rent for a new 80,000+ square foot manufacturing facility [222]. - The company plans to expand its markets through new distributor agreements and expects selling and marketing expenses to rise as it initiates new marketing campaigns [307].