AMS Spring 2023

3D Printing Financials: VELO3D Reports Strong Revenue and Names New Board of Directors Member

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VELO3D (NYSE: VLD) beat analysts’ revenue estimates in its fiscal fourth-quarter and full-year 2021 earnings report Wednesday, March 2, 2022. According to a statement, the 3D printer manufacturer surpassed its bookings target and achieved a key strategic milestone after shipping a record number of systems, including its eight-laser Sapphire XC metal 3D printer, released over a year ago. Along with its earnings report announcement, the 3D printer manufacturer revealed the appointment of U.S. Air Force General Ellen Pawlikowski to its board of directors.

VELO3D Sapphire XC Metal 3D Printer

VELO3D Sapphire XC Metal 3D Printer. Image courtesy of VELO3D.

One of the company’s financial highlights was the revenue from the quarter ended December 31, 2021, which rose 20% sequentially and 64% year-over-year to $10.4 million, both ahead of company guidance. This was driven primarily by higher sales of VELO3D’s Sapphire system and support services and following the shipment of a record eight systems in the fourth quarter. On the other hand, net losses reached $14.4 million, or 10 cents per share, in Q4, and operating expenses rose 26% sequentially to $20.8 million, primarily steered by an increase in headcount and other general and administrative costs to fund the company’s global expansion plans.

Commenting on the final quarter of 2021, CEO Benny Buller said that in addition to shipping a record number of systems, strong bookings reflected increasing demand across several verticals.

“For the year, shipments increased more than 75% and we continued to add new customers, including our first customer in Europe, which is a significant market opportunity we are looking to capitalize on this year. Also, we believe we remain well-positioned to achieve our 2022 goals given our fourth quarter execution as well as the strong revenue visibility provided by our current backlog,” continued Buller.

The VELO3D management at the NYSE on October 7, 2021.

The VELO3D management at the NYSE on October 7, 2021. Image courtesy of VELO3D.

Since going public in September 2021, the California-based manufacturer has witnessed an increase in demand, particularly for large build volume machines. In 2021, it shipped a total of 23 systems compared to 13 systems in 2020, an increase of 77%, including shipments to ten new customers. Finally, with the booking of 34 systems in 2021, VELO3D has increasing confidence in its ability to reach its 2022 revenue goals of $89 million.

Current company forecasts estimate that there will be 24 new customers in 2022 and a shipment scenario with bookings in the range of 47 to 49 systems. Delving more into the specifics of the 2022 guidance, CFO Bill McCombe said he predicts the first half of the year will account for between 37% to 43% of VELO3D’s annual revenue target.

In summary, he said, “given our continued sales momentum, large backlog, strong demand for our Sapphire XC systems and solid balance sheet, we’re well-positioned to capitalize on what we see as significant growth opportunities in AM market in the years ahead.”

This positive outlook was reflected in the earnings statement as revenue for the entire year was $27.4 million, a 45% increase compared to 2020, which had $18.9 million in revenue. On the other hand, the company also reported $107 million in net losses for 2021, a sharp 390% increase compared to 2020. This was, however, mostly tied to expenses from VELO3D’s public debut, such as merger-related transactional costs.

“Overall, 2021 was an important and successful year for Velo3D, and I’m enormously proud of everything we achieved. Customer demand for our industry-leading Sapphire systems remains high as we help some of the world’s most innovative companies create the future using our advanced additive manufacturing technology,” highlighted Buller.

Rocket engines being 3D printed.

VELO3D is one of the biggest suppliers of 3D printers for the space industry. Image courtesy of VELO3D.

VELO3D ended the quarter with a strong balance sheet with $223 million in cash and investments, reflecting the repayment of $20.8 million in debt. As a result, the company believes it has the liquidity for ongoing technology investments and provides the resources needed to fund its growth plans.

Focused on broadening its customer footprint, VELO3D has incorporated new verticals, such as energy, aviation, and defense, into its portfolio. During an earnings call with investors after market closing on March 2, 2022, Buller explained that most of the business’ customers were historically in the space segment. Instead, this new wave of segments proves that the technology is being broadly adopted throughout other vital industries.

“We expect this trend to continue in 2022 as we look to capitalize on increasing demand in these verticals, as well as new market segments (…) We are also benefiting from our land and expand strategy, as we continue to see existing customers add to their VELO3D footprint with additional systems as repeat orders totaled about 60% of shipments last year. As a result, our largest customer accounted for approximately 27% of revenue in 2021, down from 74% in 2019, and reflects the success of our new customer acquisition initiatives. We expect this trend to continue over the long term and are investing in our infrastructure to drive new customer growth.”

Headshot of VELO3D CEO Benny Buller.

VELO3D Founder and CEO Benny Buller. Image courtesy of VELO3D.

It wasn’t all financial news for VELO3D today, as the company also revealed that General Pawlikowski had been appointed to the firm’s board of directors, which has gone from 12 people to nine. Not only has Pawlikowski served for 36 years in the U.S. Air Force and retired as a 4-star general, but she is also an engineer, and her last assignment was as commander of the Air Force Materiel Command.

Discussing her new role, Pawlikowski says VELO3D is a critical tool for innovation in the aerospace, aviation, and defense industries. “I strongly believe that its technology can be transformative to its customers. While it’s amazing to see how VELO3D is empowering customers to solve their biggest challenges today, I think that it’s additive manufacturing technology will be even more impactful on innovation in the future.”

Ellen Pawlikowski joins VELO3D's board of directors.

General Ellen Pawlikowski joins VELO3D’s board of directors. Image courtesy of Business Wire.

Looking forward, Buller described that the team’s strategic priorities in 2022 will focus on expanding new and existing customer footprints in both the U.S and Europe, reflecting the increasing demand for the Sapphire XC system. Additionally, they will continue building a new manufacturing facility that will double the annual shipments in 2022 and the future, supporting the production of up to 400 systems every year.

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