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Velo3D releases first-quarter 2024 financial results

Booking $17 million in new orders during the quarter, and entering the second quarter with $22 million in backlog

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Velo3D, an additive manufacturing technology company for mission-critical metal parts, has released its financial results for the first quarter ended March 31, 2024.

“We were pleased with our first quarter performance as we continued to successfully execute on our strategic priorities,” said Brad Kreger, CEO of Velo3D. “Specifically, we are now just starting to see the benefit of our new go-to-market initiatives as we booked $17 million in new orders during the quarter. Additionally, we entered the second quarter with $22 million in backlog. We believe this strength reflects the continued customer confidence in our technology as well as our success in expanding our footprint in our core markets, including the defense sector, as we added 3 new defense customers in the first quarter. Our re-alignment efforts are also showing progress as we further reduced our quarterly costs and improved our operational efficiency. We also executed on our initiatives to improve system reliability which is reflected in the fact that approximately 50% of first-quarter bookings were from existing customers. Finally, we remain committed to achieving cash flow breakeven in the second half of the year.”

Key highlights related to the company’s strategic initiatives include ensuring customer success/system reliability – resolving 100% of high-priority tickets in Q124; increasing revenue 1H24 visibility through bookings growth – booking $17 million in new orders in Q124 – $27 million since mid-December with approximately 50% of orders from existing customers; improving Sapphire printer quality – increasing sequential Sapphire XC installation efficiency – >40% reduction in install days and labor; improving cash flow and cost structure – successfully reducing year-over-year operating expenses by 30%, expect sequential quarterly improvement in operating cash flow for FY 2024.

“Looking forward, we believe the focus on our key priorities, as well as further executing on our margin and cash flow initiatives, will position us to profitably capitalize on the increasing industry demand for leading-edge additive manufacturing solutions,” said Kreger.

Velo3D releases first-quarter 2024 financial results - booking $17 million in new orders during the quarter.
1. Information about Velo3D’s use of non-GAAP information, including a reconciliation to U.S. GAAP, is provided at the end of this release under “Non-GAAP Financial Information”. The non-GAAP financial measures presented in this release should not be considered as the sole measure of the company’s performance and should not be considered in isolation from, or as a substitute for, comparable financial measures calculated in accordance with generally accepted accounting principles accepted in the United States. 2. Non-GAAP net loss and non-GAAP net loss per diluted share exclude stock-based compensation expense, fair value adjustments for the Company’s warrants, contingent earnout and debt derivative liabilities, and loss on extinguishment of debt.

Summary of Q1 2024 results

Revenue for the first quarter was $10 million. Revenue increased compared to the fourth quarter of 2023, primarily driven by an increase in shipments. Given its strong backlog and shipping forecast exiting the first quarter, the company expects revenue growth of more than 30% in the second quarter of 2024. Support services and recurring payment revenue increased sequentially due to a higher number of systems in operation.

Gross margin for the first quarter was negative 29%. While shipments increased sequentially, gross margin primarily reflected the impact of lower fixed cost absorption. The company expects a positive gross margin in the second quarter of 2024 as a result of increased system shipments, improvements in its system balance of material costs, benefits from its new long-term supply contracts, and higher operating and manufacturing efficiency.

GAAP operating expenses for the first quarter were $18.6 million compared to $25.9 million in the fourth quarter of 2023. Non-GAAP operating expenses, excluding re-alignment charges and stock-based compensation expense of $4.5 million, were $14.1 million, down 15% sequentially from the fourth quarter of 2023. The company expects non-GAAP quarterly operating expenses to decline by more than 10% in the second quarter of 2024 compared to the first quarter of 2024 as the company continues to execute its cost initiatives.

Net loss for the quarter was $28.3 million and reflected a non-cash loss of $3.1 million on the change in the fair value of warrants and contingent earnout liabilities. Non-GAAP net loss was $20.2 million in the three months ended March 31, 2024. Adjusted EBITDA for the quarter, was a loss of $11.7 million. For more information regarding the company’s non-GAAP financial measures, see “Non-GAAP Financial Information” below.

Velo3D ended the quarter with $11 million in cash, cash equivalents, and investments. First quarter cash flow, excluding financing activities, was in line company’s forecasts and improved more than 35% on a year-over-year basis. The company continues to expect sequential quarterly improvement in cash flow in 2024.

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