Velo3D(VLD) - 2022 Q2 - Quarterly Report

Revenue and Sales Performance - Revenue for the three months ended June 30, 2022, was $20 million, compared to $7 million for the same period in 2021, representing a 185.7% increase[187] - Bookings for the three months ended June 30, 2022, were $18 million, up from $6 million in the same period in 2021, marking a 200% increase[187] - Total revenue for the three months ended June 30, 2022, was $19.6 million, an increase of $12.5 million or 174.9% compared to $7.1 million in the same period of 2021[219] - 3D Printer sales reached $17.6 million for the three months ended June 30, 2022, up 189.8% from $6.1 million in 2021, primarily due to the launch of the Sapphire® XC system[220] - Total revenue for the six months ended June 30, 2022, was $31.9 million, an increase of $23.6 million or 283.0% compared to $8.3 million in 2021[249] - 3D Printer sales reached $27.8 million, up 340.3% from $6.3 million in the same period of 2021, primarily due to the launch of the Sapphire® XC system[250] Cost and Profitability - Total cost of revenue for the three months ended June 30, 2022, was $18.4 million, an increase of $13.5 million or 271% compared to $5.0 million in 2021[226] - Gross profit for the three months ended June 30, 2022, was $1.2 million, with a gross margin of 6.3%, down from $2.2 million and 30.6% in 2021[231] - Total cost of revenue for the six months ended June 30, 2022, was $30.6 million, an increase of $24.1 million or 369% compared to $6.5 million in 2021[254] - Gross profit for the six months ended June 30, 2022, was $1.2 million, with a gross margin of 3.9%, down from $1.8 million and 21.6% in 2021[260] Expenses - Research and development expenses increased to $13.0 million for the three months ended June 30, 2022, up $6.6 million from $6.4 million in 2021, driven by the development of the Sapphire® XC system[233] - Selling and marketing expenses rose to $6.2 million for the three months ended June 30, 2022, an increase of $3.9 million from $2.3 million in 2021[236] - General and administrative expenses were $8.3 million for the three months ended June 30, 2022, up $3.0 million from $5.2 million in 2021[238] - Research and development expenses increased to $25.9 million, up $14.8 million from $11.1 million in 2021, driven by the development of the Sapphire® XC system[261] - Selling and marketing expenses rose to $12.2 million, an increase of $7.8 million from $4.4 million in 2021, attributed to higher headcount and marketing initiatives[263] - General and administrative expenses were $17.5 million, up $7.5 million from $10.0 million in 2021, primarily due to increased headcount and employee-related expenses[264] Customer and Market Dynamics - Backlog as of June 30, 2022, stood at $55 million, unchanged from the previous year, indicating stable demand[188] - Sales to the top three customers accounted for 65.1% of revenue for the three months ended June 30, 2022, slightly up from 64.7% in 2021, highlighting customer concentration risks[189] - The company has shifted its customer mix towards existing customers, resulting in higher recurring purchasing rates[186] - The company expects to continue its "land and expand" strategy, initially selling one machine to validate technology before increasing sales to key customers[183] Financial Position and Cash Flow - As of June 30, 2022, the company had $141.8 million in cash and cash equivalents, down from $223.1 million at the end of 2021[270] - The company maintained a full valuation allowance on deferred tax assets as of June 30, 2022, due to projected losses[269] - The company may require additional funds for working capital, product enhancement, and potential acquisitions, which could involve equity or debt financing[272] - Cash and cash equivalents, along with funds from the Merger and PIPE Financing, are expected to meet working capital and capital expenditure needs for at least twelve months[273] - As of June 30, 2022, the company had $3.0 million outstanding on its revolving credit line, with a variable interest rate[276] - Net cash provided by operating activities for the six months ended June 30, 2022, was $68.8 million, a change of $81.8 million from a net cash used of $13.0 million in the same period of 2021[281] - Net cash used in investing activities for the six months ended June 30, 2022, was $94.8 million, primarily due to purchases of available-for-sale investments totaling $87.7 million[286] - The company expects an increase in cash used in operating activities for the remainder of 2022 due to working capital requirements and operating expenses[285] - Net cash used in financing activities during the six months ended June 30, 2022, was $0.5 million, consisting mainly of equipment loan repayments[288] - The company anticipates providing cash through financing activities by issuing new equity or incurring new debt to support operations[290] - As of June 30, 2022, the company had no off-balance sheet arrangements[291] Other Notable Events - The impact of COVID-19 has led to longer lead times for sales and marketing, affecting order timing and supply chain constraints[192] - The company’s technology allows for the production of complex high-value metal parts without redesign, differentiating it from competitors[182] - The change in fair value of warrants resulted in a gain of $23.7 million for the three months ended June 30, 2022, related to the non-cash fair value change driven by stock price fluctuations[241] - The company reported a net income of $62.6 million for the six months ended June 30, 2022, compared to a net loss of $26.1 million in 2021[270] - The company invested $12 million in lab equipment and leasehold improvements for the Sapphire® XC manufacturing facility, with an additional $2.0 million to $3.0 million expected for completion[280]