Velo3D CEO Benny Buller on Impressive Q2 Earnings – AMS Focus

Though Additive Manufacturing Strategies (February 7-9, 2023) takes place just once a year, the verticals showcased at New York’s only 3D printing event are constantly evolving. AMS Focus highlights these developments. Register for AMS 2023 here.

In light of Velo3D’s impressive Q2 earnings report, 3DPrint.com reached out to CEO Benny Buller, who commented on the firm’s 160 percent year-over-year revenue growth and 60 percent increase in revenue as compared to Q1.

Velo3D’s Strategy

Velo3D is a relative newcomer to 3D printing, having been founded in 2014. The California firm has taken a new design and development approach to powder bed fusion (PBF) for metals by directing a great deal of energy on process monitoring. This monitoring, as well as a redesign of many elements of the machine and process itself, allows the company to come up with build strategies and modulations that can outperform other systems for particular geometries.

Furthermore, rather than targeting many different industries and use cases, Velo3D focuses on few: defense, space, aviation, oil and gas, and contract manufacturing. In terms of applications, the company is exploring microturbines, high pressure tanks, turbo pumps, space propulsion systems, and heat exchangers. I love the company’s tight focus on few applications and verticals. This allows it to build up much more specialized knowledge and application development expertise in only the most fruitful areas. It also makes going to market a much more concentrated and driven affair.

Velo3D has been forging ahead lately with its Sapphire printer, the bigger 1MZ, the XC, and now the giant Sapphire XC 1MZ system. Recently, the firm has also crossed over into Europe, opening an office there.

Buller Bullish on Velo3D’s Growth

Buller was upbeat, saying that Velo3D “hopes to be the PBF leader in 2023,” and citing research that showed that the company was closing on previously larger competitors. When asked about the firm’s future plans, he discussed how, so far, the firm has “80 percent of its revenue in only one country, the US, and only from industrial users.” He strives to replicate this success with new customers, with the goal of achieving 20 percent revenue growth quarter-over-quarter for the near term.

With its tight vertical and application focus, Velo3D has always aimed to sell to people who could purchase multiple machines from them. This puts the firm’s fortunes in the hands of relatively few clients. Buller shared that, while Velo3D’s customer base was previously concentrated around 30 businesses, it is now growing. At the same time, only about 15 percent of revenue comes from individual customers. Diversifying away from that is now what the company is undertaking. Buller says that revenue is now “much more distributed than before,” and that “customer concentration is dropping.”

Velo3D’s Vertical Focus

“Aside from aviation, defense, space, oil and gas, we’re seeing growth in production tooling for automotive, as well as expanded bookings from Europe. Customers seek us out because they want quality. And we don’t waste our energies. We focus. We go where we can win. We don’t waste energy on customers that we can not help,” Buller told 3DPrint.com.

“We try to not be up against anyone. If we get into a direct contest that’s just about measuring up, we tend to walk away,” he continued. “We want to find customers who have problems, concerns, and values that only we measure up to. We don’t want to spend our time comparing ourselves to others. We would instead like to spend our time helping to alleviate customers’ concerns, helping to show to them that we’re good enough. The people we work with are sometimes new to additive, sometimes people disappointed with additive, or painfully aware of the limitations of additive. Of our last few new customers in Europe, for example, one was completely new.  Others were experts. Generally, we work with businesses where we can help them win. We want them to make parts that can only be made on our machine. ¨

One very interesting element of Velo3D’s engagements is its focus on contract manufacturing firms. Buller explained the strategy underlying that decision:

“We don’t like the service bureau model, where a company has underutilized capacity. We also don’t want to increase capacity and flood the market or flood one segment. We want to match supply and demand by strategically giving enough supply to help our network. We focus on a much more disciplined environment. We want to have good relationships with contract manufacturers who have good quality systems, a manufacturing mindset, a quality mindset and let them make. We really think that that is a world apart of what others are doing.¨

Given the newcomer’s explosion in growth, it’s interesting to see how Velo3D will continue to fair among a world of established PBF players. According to the “Additive Manufacturing with Metal Powders 2020” report from SmarTech Analysis, this segment is expected to generate some $5 billion by 2029. While metal PBF was previously dominated by EOS, new entrants like Velo3D are beginning to shake things up altogether. To learn more about the company and how it stacks up against the rest, register for Additive Manufacturing Strategies, February 7-9, 2023. where Velo3D is the Diamond Sponsor.