3D Printing Financials: Velo3D Revenue Up 120%; Earnings per Share Lag Behind

Velo3D (NYSE: VLD) saw its revenue escalate 120 percent to $26.8 million, falling within the company’s expectations and Wall Street’s consensus. However, as the sequential revenue growth continues, Velo3D reported a net loss of $36.2 million, or 19 cents per share, compared to a net loss of $65.3 million, or 36 cents per share, last year.

The impressive revenue performance was fueled by the successful ramping up of production for the highly sought-after Sapphire XC and Sapphire XC 1MZ products, which were in great demand from both new and existing customers, according to CEO and Founder Benny Buller. This success was attributed to implementing various efficiency initiatives over the last six months, resulting in improved production processes. Furthermore, a 30% sequential increase in bookings, which amounted to $20 million, reflected the strong demand for the company’s technology.

With a first-quarter backlog of $24 million, the company has gained increased confidence in achieving its second-quarter and fiscal year 2023 goals. Thanks to the strong Q1 revenue performance, a healthy backlog, and expected recurring revenue from its expanding installed base, Buller considers that 75% of the forecasted second-quarter revenue is either “booked or recurring.”

Meanwhile, for the full year 2023, the executive pointed out that 50 percent of Velo3D’s forecast is either “recognized recurring or already booked with a record pipeline of opportunities which significantly derisk our 2023 booking gap.” So overall, it appears the company is well-positioned to achieve its 2023 revenue guidance range between $120 million and $130 million.

During an earnings call with investors, Buller provided an update on the firm’s operational initiatives, which resulted in the aforementioned upgraded production processes. Primarily, Velo3D benefited from adding several experienced leaders and standardizing the manufacturing flow in its production facility.

On the supply chain side, Velo3D completed the build-out of its supply chain leadership and improved multiple operational processes to reduce or eliminate shortages in the future. Although Buller said there are plans for further supply chain improvements, the current state provides confidence in managing inventory and avoiding shortages.

Since the company reported a loss in adjusted EBITDA of $16 million, Buller said the primary focus this year will be to “significantly improve EBITDA” to gain higher profitability. According to the executive, this will be achieved through “revenue growth, margin expansion, and expense control.”

“We remain confident in our goal of more than 50% revenue growth this year. Our strong Q1 results increased booking and healthy backlog reflects increasing demand for our industry-leading technology and position us well for the balance of the year. We also made significant progress on expanding gross margin in the first quarter and remain on track for sequential improvements through the end of the year,” said Buller.

During the same earnings call, Velo3D Chief Financial Officer William McCombe concluded that the company has the liquidity to fund the business plan to profitability. The executive anticipates second-quarter revenue to be in the range of $25 million to $29 million and expects bookings of up to $29 million. With the full-year 2023 guidance unchanged, the company expects to finish the year with at least $120 million in revenue.

Buller added that Velo3D’s “path to profitability remains on track as improved operational efficiency enabled us to expand our margins while reducing adjusted operating expenses.”

As a result, the executive remarked that the company “significantly improved” its net cash flow by more than 50 percent sequentially, exceeding the cash forecast for the quarter, and remains committed to “approaching breakeven” in the fourth quarter 2023.

Despite the positive outlook and revenues for the quarter, shares of Velo3D are down more than 9% since the company released its earnings results on May 1, 2023. In addition, the company stock has shown volatility in the last months, falling to an all-time low of $1.55 in December 2022 before gaining some momentum early in 2023. However, the stock has been falling since March, and with stocks, in general, declining on Thursday, May 4, 2023, as Wall Street’s bank fears reignite and indexes slip following a Federal Reserve interest-rate increase, Velo3D stock seems to be following the general stock market trend.