Velo3D(VLD) - 2025 Q1 - Quarterly Results

First Quarter 2025 Financial Results Overview Velo3D's Q1 2025 results show improved gross margin and backlog growth, reaffirming 2025 revenue targets and 2026 EBITDA positive outlook Key Highlights of Q1 2025 Velo3D reported Q1 2025 revenue of $9.3 million, a 7.5% gross margin, and an $18 million backlog, with strong defense sector demand Q1 2025 Financial Metrics | Metric | 1st Quarter 2025 | 1st Quarter 2024 | | :--- | :--- | :--- | | GAAP Revenue | $9.3 million | $9.8 million | | GAAP Gross Margin | 7.5% | (28.8)% | | GAAP Net Loss | ($25.4) million | ($28.3) million | | GAAP Net Loss per Share | ($0.13) | ($3.81) | | Non-GAAP Net Loss | ($8.9) million | ($20.2) million | | Non-GAAP Net Loss per Share | ($0.04) | ($2.71) | - Backlog of $18 million as of March 31, 2025[5] - Reaffirms expectation for 2025 annual revenue growth of more than 30% and to be EBITDA positive in the first half of 2026[5] - RPS backlog increased 3x as compared to year-end 2024, with new customers representing over 75% of 1Q'25 bookings and 50% demand from the defense sector[5] Recent Business Developments and Strategic Initiatives Velo3D is executing strategic initiatives, securing key agreements, and strengthening its leadership to drive sustainable growth and profitability - Momentum is building across the business due to strategic initiatives aimed at sustainable, long-term growth and a return to profitability, with early results from a new go-to-market strategy gaining traction in defense and aerospace[4] - Signed a five-year, $15 million master services agreement (MSA) with Momentus, Inc. and a five-year exclusive supply agreement with Amaero Advanced Materials & Manufacturing, Inc., validating the RPS Offering and expanding Velo3D's role in re-shoring critical manufacturing[4][5] - RPS is designed to address growing demand for scalable, high-quality parts, reducing design cycles and accelerating production, and is believed to account for up to 40% of revenue by 2026[4][6] - Strengthened leadership team with the appointment of Brice Cooper as VP of Defense and Government Relations and welcomed Rear Admiral Jason Lloyd and Kenneth Thieneman to the Board of Directors[5][6] First Quarter 2025 Financial Performance Velo3D's Q1 2025 performance reflects a strategic shift, with improved gross margin and reduced net loss despite a slight revenue decrease Summary of Q1 2025 Results Velo3D's Q1 2025 results show $9.3 million revenue, 7.5% gross margin, and reduced net losses, ending with $3.9 million cash Revenue Analysis Q1 2025 revenue was $9.3 million, a decrease due to fewer printer sales, aligning with a strategy to target high-value customers - Revenue was $9.3 million, a decrease compared to Q1 2024, driven by a modest decrease in printer sales consistent with the strategy of maintaining Average Selling Price (ASP) by targeting high-value customers[7] - System sales are expected to remain the primary revenue driver in 2025, but the RPS parts production business is anticipated to contribute an increasing share of revenue starting in the second half of the year[7] Gross Margin Analysis Q1 2025 gross margin significantly improved to 7.5% from negative 28.8% in Q1 2024, driven by cost reductions - Gross margin for Q1 2025 was 7.5%, a significant improvement from negative 28.8% in Q1 2024, resulting from continued Bill of Materials (BOM) cost reduction and manufacturing process optimization[8] - The company expects gross margin to improve throughout 2025 due to operational efficiencies and an anticipated ramp-up of its Rapid Production Solutions business[8] Operating Expenses and Net Loss Operating expenses decreased, leading to a GAAP net loss of $25.4 million and Non-GAAP net loss of $8.9 million Operating Expenses and Net Loss (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | GAAP Operating Expenses | $12,600 | $18,600 | | Non-GAAP Operating Expenses | $8,800 | $14,100 | | GAAP Net Loss | $25,400 | $28,300 | | Non-GAAP Net Loss | $8,900 | N/A | - Adjusted EBITDA for the quarter was negative $6.9 million[10] Cash and Cash Equivalents Cash and cash equivalents increased to $3.9 million as of March 31, 2025, from $1.2 million at year-end 2024 Cash and Cash Equivalents (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $3,900 | $1,200 | Outlook and Guidance Velo3D projects 2025 revenue between $50 million and $60 million, with improving gross margins and an EBITDA positive target for H1 2026 Full Year 2025 Guidance Velo3D expects 2025 revenue of $50-60 million, targeting over 30% gross margin by Q4, and EBITDA positive in H1 2026 - Management expects full year 2025 revenue in the range of $50 million to $60 million[12] - Anticipates sequential improvement in gross margin, targeting greater than 30% gross margin in the fourth quarter of 2025[12] - Projects Non-GAAP operating expenses in the range of $40 million to $50 million and CapEx between $15 million to $20 million[12] - Expects to be EBITDA positive in the first half of 2026[12] Company Information Velo3D is a metal 3D printing technology company providing integrated solutions for complex, mission-critical parts across various industries About Velo3D Velo3D offers an integrated metal 3D printing solution for complex parts, serving space, aviation, and energy sectors with key partners - Velo3D is a metal 3D printing technology company that has overcome limitations of legacy metal additive manufacturing, enabling engineers to design and print previously impossible mission-critical metal parts[13][14] - The company's fully integrated solution includes Flow print preparation software, the Sapphire family of printers, and the Assure quality control system, powered by Velo3D's Intelligent Fusion manufacturing process[14] - Velo3D serves customers in space exploration, aviation, power generation, energy, and semiconductor industries, with strategic partners including SpaceX, Honeywell, Honda, Chromalloy, and Lam Research[14] Investor and Media Contacts Contact information for investor relations and media is provided, noting that financial results are preliminary and subject to revision - Investor Relations contact: Bob Okunski, VP Investor Relations, investors@velo3d.com[17] - Media Contact: Michelle Sidwell, Chief Revenue Officer, media@velo3d.com[17] - Amounts presented are preliminary estimates as of the earnings release date and may be revised upon filing of the Quarterly Report on Form 10-Q with the SEC[17] Legal and Non-GAAP Disclosures This section outlines forward-looking statements and the use of non-GAAP financial measures, emphasizing their limitations and providing reconciliations Forward-Looking Statements This section contains forward-looking statements subject to risks and uncertainties, and readers are cautioned against undue reliance - The press release includes forward-looking statements regarding fiscal years 2025 and 2026 guidance, profitability expectations, future demand, strategic realignment, liquidity, and operational position[18] - These statements involve significant risks and uncertainties that could cause actual results to differ materially from expectations, as described in the 'Risk Factors' section of the company's Annual Report on Form 10-K for FY 2024 and other SEC filings[18] - The company cautions against undue reliance on forward-looking statements and does not undertake any obligation to publicly release updates or revisions[18][19] Non-GAAP Financial Information Velo3D uses non-GAAP measures to assess performance and core expenses, providing reconciliations to GAAP for transparency - Non-GAAP financial measures are used to identify trends in day-to-day performance and assess core expenses, aiding management in achieving financial goals[20] - These non-GAAP measures (Non-GAAP Net Loss, EBITDA, Adjusted EBITDA, Non-GAAP Operating Expenses) have limitations and should not be considered in isolation or as a substitute for GAAP measures[21] - The company primarily relies on GAAP results and uses non-GAAP measures on a supplemental basis, providing reconciliations to GAAP[21] Non-GAAP Net Loss Reconciliation This table reconciles GAAP Net Loss to Non-GAAP Net Loss for the three months ended March 31, 2025, and prior periods Non-GAAP Net Loss Reconciliation (in thousands) | | Three months ended March 31, 2025 | Three months ended December 31, 2024 | Three months ended March 31, 2024 | | :--- | :--- | :--- | :--- | | Revenue | $9,320 | $12,626 | $9,786 | | Gross Profit | $697 | ($444) | ($2,815) | | Net Loss | ($25,411) | ($21,686) | ($28,314) | | Stock-based compensation | 4,074 | 2,322 | 5,087 | | Gain on exchange of debt for common stock | - | (2,619) | - | | (Gain) loss on fair value of warrants | 1,044 | (184) | 2,620 | | Loss on fair value of contingent earnout liabilities | - | - | 437 | | Loss on warrant cancellation | 11,357 | - | - | | Non-GAAP Net Loss | ($8,936) | ($22,167) | ($20,170) | Non-GAAP Adjusted EBITDA Reconciliation This table reconciles GAAP Net Loss to Adjusted EBITDA for the three months ended March 31, 2025, and prior periods Non-GAAP Adjusted EBITDA Reconciliation (in thousands) | | Three months ended March 31, 2025 | Three months ended December 31, 2024 | Three months ended March 31, 2024 | | :--- | :--- | :--- | :--- | | Revenue | $9,320 | $12,626 | $9,786 | | Net Loss | ($25,411) | ($21,686) | ($28,314) | | Interest expense | 1,070 | 3,048 | 3,897 | | Provision for income taxes | 8 | (20) | 4 | | Depreciation and amortization | 942 | 968 | 1,396 | | EBITDA | ($23,391) | ($17,690) | ($23,017) | | Stock-based compensation | 4,074 | 2,322 | 5,087 | | Gain on exchange of debt for common stock | - | (2,619) | - | | (Gain) loss on fair value of warrants | 1,044 | (184) | 2,620 | | Loss on fair value of contingent earnout liabilities | - | - | 437 | | Loss on warrant cancellation | 11,357 | - | - | | Restructuring expense | - | 3,540 | - | | Adjusted EBITDA | ($6,916) | ($14,631) | ($14,873) | Non-GAAP Adjusted Operating Expenses Reconciliation This table reconciles GAAP Total Operating Expenses to Non-GAAP Adjusted Operating Expenses for the three months ended March 31, 2025, and prior periods Non-GAAP Adjusted Operating Expenses Reconciliation (in thousands) | | Three months ended March 31, 2025 | Three months ended December 31, 2024 | Three months ended March 31, 2024 | | :--- | :--- | :--- | :--- | | Revenue | $9,320 | $12,626 | $9,786 | | Research and development | 1,212 | 3,082 | 5,043 | | Selling and marketing | 2,275 | 1,627 | 4,809 | | General and administrative | 9,131 | 16,348 | 8,783 | | Total operating expenses | $12,618 | $21,057 | $18,635 | | Stock-based compensation in operating expenses | 3,866 | 2,322 | 4,503 | | Adjusted operating expenses | $8,752 | $18,735 | $14,132 | Condensed Consolidated Financial Statements This section presents Velo3D's condensed consolidated financial statements, including statements of operations, balance sheets, and cash flows Condensed Consolidated Statements of Operations This statement details Velo3D's revenues, costs, operating expenses, and net loss for the three months ended March 31, 2025, and 2024 Condensed Consolidated Statements of Operations (in thousands, except per share data) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenue | | | | 3D Printer | $7,523 | $7,660 | | Recurring payment | — | 470 | | Support services | 1,790 | 1,656 | | Other | 7 | — | | Total Revenue | 9,320 | 9,786 | | Cost of revenue | | | | 3D Printer | 7,540 | 9,394 | | Recurring payment | 12 | 315 | | Support services | 1,071 | 2,892 | | Total cost of revenue | 8,623 | 12,601 | | Gross loss | 697 | (2,815) | | Operating expenses | | | | Research and development | 1,212 | 5,043 | | Selling and marketing | 2,275 | 4,809 | | General and administrative | 9,131 | 8,783 | | Total operating expenses | 12,618 | 18,635 | | Loss from operations | (11,921) | (21,450) | | Interest expense | (1,070) | (3,897) | | Loss on fair value of warrants | (1,044) | (2,620) | | Loss on fair value of contingent earnout liabilities | — | (437) | | Loss on warrant cancellation | (11,357) | — | | Other income (expense), net | (11) | 94 | | Loss before provision for income taxes | (25,403) | (28,310) | | Provision for income taxes | (8) | (4) | | Net loss | ($25,411) | ($28,314) | | Net loss per share: | | | | Basic | ($0.13) | ($3.81) | | Diluted | ($0.13) | ($3.81) | Condensed Consolidated Balance Sheets This statement presents Velo3D's assets, liabilities, and stockholders' equity as of March 31, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $3,870 | $1,212 | | Accounts receivable, net | 4,569 | 3,723 | | Inventories, net | 46,133 | 49,953 | | Contract assets | 1,295 | 500 | | Prepaid expenses and other current assets | 5,907 | 2,336 | | Total current assets | 61,774 | 57,724 | | Property and equipment, net | 13,691 | 14,270 | | Equipment on lease, net | 3,673 | 3,673 | | Other assets | 12,261 | 13,513 | | Total assets | $91,399 | $89,180 | | Liabilities and Stockholders' Equity | | | | Accounts payable | $16,365 | $18,538 | | Accrued expenses and other current liabilities | 3,762 | 3,511 | | Debt – current portion | 16,152 | 5,666 | | Contract liabilities | 7,614 | 10,285 | | Total current liabilities | 43,893 | 38,000 | | Long-term debt – less current portion | 5,506 | — | | Contingent earnout liabilities | 11 | 11 | | Warrant liabilities | 13 | 2,167 | | Other noncurrent liabilities | 9,094 | 9,338 | | Total liabilities | 58,517 | 49,516 | | Stockholders' equity: | | | | Common stock | 4 | 4 | | Additional paid-in capital | 488,623 | 469,994 | | Accumulated other comprehensive loss | — | — | | Accumulated deficit | (455,745) | (430,334) | | Total stockholders' equity | 32,882 | 39,664 | | Total liabilities and stockholders' equity | $91,399 | $89,180 | Condensed Consolidated Statements of Cash Flows This statement details cash flows from operating, investing, and financing activities for the three months ended March 31, 2025, and 2024 Condensed Consolidated Statements of Cash Flows (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Cash flows from operating activities | | | | Net loss | ($25,411) | ($28,314) | | Adjustments to reconcile net loss to net cash used in operating activities | | | | Depreciation and amortization | 942 | 1,396 | | Amortization of debt discount and deferred financing costs | 992 | 3,171 | | Stock-based compensation | 4,074 | 5,087 | | Loss on fair value of warrants | 1,044 | 2,620 | | Loss on fair value of contingent earnout liabilities | — | 437 | | Loss on warrant cancellation | 11,357 | — | | Changes in assets and liabilities | | | | Accounts receivable | (846) | (2,070) | | Inventories | 1,989 | 2,645 | | Contract assets | (795) | (2,118) | | Prepaid expenses and other current assets | (3,407) | 1,078 | | Other assets | 1,224 | 396 | | Accounts payable | (860) | (4,199) | | Accrued expenses and other liabilities | 251 | (218) | | Contract liabilities | (2,671) | (416) | | Other noncurrent liabilities | (232) | (18) | | Net cash used in operating activities | (12,349) | (20,523) | | Cash flows from investing activities | | | | Purchase of property and equipment | — | (6) | | Production of equipment for lease to customers | — | (1) | | Proceeds from maturity of available-for-sale investments | — | 3,500 | | Net cash provided by investing activities | — | 3,493 | | Cash flows from financing activities | | | | Proceeds from secured convertible notes | 15,000 | — | | Issuance of common stock upon exercise of stock options | — | 285 | | Net cash provided by financing activities | 15,000 | 285 | | Effect of exchange rate changes on cash and cash equivalents | 7 | 5 | | Net change in cash and cash equivalents | 2,658 | (16,740) | | Cash and cash equivalents and restricted cash at beginning of period | 1,840 | 25,294 | | Cash and cash equivalents and restricted cash at end of period | $4,498 | $8,554 |