Velo3D, Inc. Earnings Call Highlights Growth and Challenges

Velo3d, Inc. ((VLDX)) has held its Q1 earnings call. Read on for the main highlights of the call.

Velo3D, Inc. Navigates Transformative Growth Amidst Challenges

The recent earnings call for Velo3D, Inc. paints a picture of a company in a transformative growth phase. The sentiment expressed during the call was cautiously optimistic, highlighting positive developments such as the launch of Rapid Production Services (RPS), improved financial discipline, and a clear path to profitability. Despite facing challenges like a slight revenue decline and ongoing net losses, the strategic initiatives in place suggest a promising future.

Positive Gross Margin Achieved

Velo3D reported a positive gross margin of 7.5% in Q1 2025, marking a significant turnaround from the negative gross margin experienced in the previous year. This improvement is attributed to effective cost optimization and pricing strategies, showcasing the company’s efforts to enhance financial performance.

RPS Launch and Customer Contracts

The successful launch of Rapid Production Services (RPS) was a highlight of the earnings call, with strong customer response and multiple new agreements. Notably, a five-year $15 million master service agreement with Momentus underscores the strategic growth potential of RPS, positioning Velo3D for future expansion.

Revenue Visibility and Backlog

Velo3D ended the first quarter with a firm backlog of $18 million, reflecting committed orders that enhance revenue visibility. This backlog is a positive indicator of future growth prospects, providing a solid foundation for the company’s financial outlook.

Improved Financial Position

The company has strengthened its financial position by reducing debt and securing $15 million in bridge financing. By removing nearly all senior debt and warrant liabilities, Velo3D has substantially lowered interest expenses, improving its financial health.

Path to Profitability

Velo3D outlined a clear path to EBITDA profitability by the first half of 2026. This goal is expected to be achieved through revenue growth, improved average selling prices, and operational efficiencies, demonstrating the company’s commitment to achieving financial stability.

Revenue Decline

The first quarter revenue was reported at $9.3 million, a 4.8% decrease compared to the same quarter in the previous year. This decline is attributed to a strategic focus on high-value customers, indicating a shift in the company’s sales strategy.

GAAP Net Loss

Velo3D reported a GAAP net loss of $25.4 million for the quarter, highlighting ongoing financial challenges. Despite improvements in other areas, this loss underscores the need for continued strategic efforts to achieve profitability.

Low Cash Reserves

As of March 31, 2025, Velo3D had cash and cash equivalents of $3.9 million. This level of cash reserves may be considered low given the scale of operations and future investment needs, indicating a potential area of concern for the company.

Forward-Looking Guidance

During the earnings call, Velo3D provided forward-looking guidance, projecting 2025 full-year revenue between $50 million and $60 million, with gross margins expected to exceed 30% by year-end. The company aims for EBITDA profitability by the first half of 2026, leveraging improved average selling prices and operational efficiency. These projections reflect Velo3D’s strategic focus on growth and profitability.

In summary, Velo3D, Inc. is navigating a transformative growth phase with a cautiously optimistic outlook. The earnings call highlighted key developments such as the successful launch of RPS, improved financial discipline, and a clear path to profitability. While challenges like revenue decline and net losses persist, the strategic initiatives in place suggest a promising future for the company.