Velo3D Announces First Quarter 2024 Financial Results
Successfully Executing on Realignment Priorities
Strong Demand Provides Significant Second Quarter Visibility
Strategic Review Process to Maximize Shareholder Value Remains Ongoing
-
Continued sales execution in Q1 2024
-
Bookings of
$17 million ; 50% of orders from existing customers -$27 million in bookings sincemid-December 2023 -
$22 million in backlog exiting Q124 - Continued defense sector expansion – added 3 new customers in Q124
- Q2 revenue visibility – expect >30% sequential revenue growth
-
Bookings of
-
Successfully reduced quarterly operating expenses
- Down 30% year over year – down 15% sequentially (excluding one-time charges)
- On track for Q224 cost reduction goals
- Operating cash flow – 35% year over year improvement, well positioned to achieve cash flow breakeven in the second half of FY 2024
“We were pleased with our first quarter performance as we continued to successfully execute on our strategic priorities,” said
Key highlights related to the company’s strategic initiatives:
- Ensuring customer success / system reliability – resolved 100% of high priority tickets in Q124
-
Increased revenue 1H24 visibility through bookings growth – booked
$17 million in new orders in Q124 -$27 million since mid-December with approximately 50% of orders from existing customers - Improved Sapphire printer quality – increased sequential Sapphire XC installation efficiency - >40% reduction in install days and labor
- Improving cash flow and cost structure – successfully reduced year over year operating expenses by 30%, expect sequential quarterly improvement in operating cash flow for FY 2024
“Looking forward, we believe the focus on our key priorities, as well as further executing on our margin and cash flow initiatives, will position us to profitably capitalize on the increasing industry demand for leading-edge additive manufacturing solutions,” concluded Kreger.
($ in Millions, except percentages and per-share data) |
1st Quarter 2024 |
4th Quarter 2023 |
1st Quarter 2023 |
GAAP revenue |
|
|
|
GAAP gross margin |
(28.8)% |
(>100)% |
9.5% |
GAAP net loss1 |
|
|
|
GAAP net loss per diluted share |
|
|
|
|
|
|
|
Non-GAAP net loss2 |
|
|
|
Non-GAAP net loss per diluted share2 |
|
( |
|
Cash and Investments |
|
|
|
-
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 inthe United States . - 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 First Quarter 2024 Results
Revenue for the first quarter was
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 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
Net loss for the quarter was
The company ended the quarter with
Guidance
The company continues to expect sequential improvement in revenue, gross margin and operating expenses in the second quarter of 2024. The company also believes the continued execution of its realignment strategy will enable it to reach its goal of free cash flow breakeven in the second half of 2024.
The company’s 2024 guidance is unchanged and is as follows:
- Q2 2024 revenue growth of more than 30%
-
FY 2024 revenue in the range of
$80 million to$95 million - Sequential quarterly improvement in gross margin with fourth quarter 2024 gross margin of approximately 30%, excluding non-recurring charges related to its cost reduction initiatives
-
Non-GAAP operating expenses of
$40 to$50 million
The company will host a conference call for investors this afternoon to discuss its first quarter 2024 financial results at
About
VELO,
Amounts herein pertaining to
Forward-Looking Statements:
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1996. The company’s actual results may differ from its expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect”, “estimate”, “project”, “budget”, “forecast”, “anticipate”, “intend”, “plan”, “may”, “will”, “could”, “should”, “believes”, “predicts”, “potential”, “continue”, and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the company’s guidance for the second quarter and full year 2024 (including the company’s estimates for revenue, gross margin and non-GAAP operating expenses), the company's expectations regarding its performance during 2024, the company's strategic realignment and initiatives, the company’s expectations regarding its liquidity and capital requirements, and the company’s other expectations, hopes, beliefs, intentions or strategies for the future. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. You should carefully consider the risks and uncertainties described in the “Risk Factors” section of the company’s Annual Report on Form 10-K for the fiscal year ended
The information in the table below sets forth the non-GAAP financial measures that the company uses in this release. Because of the limitations associated with these non-GAAP financial measures, “Non-GAAP Net Loss”, “EBITDA”, “Adjusted EBITDA” and “Non-GAAP Operating Expenses”, should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. The company compensates for these limitations by relying primarily on its GAAP results and using Non-GAAP Net Loss, EBITDA, Adjusted EBITDA, and Non-GAAP Operating Expenses on a supplemental basis. You should review the reconciliation of the non-GAAP financial measures below and not rely on any single financial measure to evaluate the company's business.
The following tables reconcile Net income (loss) to Non-GAAP Net Loss, EBITDA, and Adjusted EBITDA and Total Operating Expenses to Non-GAAP Operating Expenses during the periods below:
|
|||||||||||||||||
NON-GAAP Net Income (Loss) Reconciliation |
|||||||||||||||||
(Unaudited) |
|||||||||||||||||
Three months ended | |||||||||||||||||
2024 |
2023 |
2023 |
|||||||||||||||
(In thousands, except for percentages) | |||||||||||||||||
% of Rev | % of Rev | % of Rev | |||||||||||||||
Revenue |
$ |
9,786 |
|
100.0 |
% |
$ |
2,455 |
|
100.0 |
% |
$ |
26,687 |
|
100.0 |
% |
||
Gross Profit |
|
(2,815 |
) |
(28.8 |
)% |
|
(31,498 |
) |
(1283.0 |
)% |
|
2,532 |
|
9.5 |
% |
||
Net Income (Loss) |
$ |
(28,314 |
) |
(289.3 |
)% |
$ |
(56,149 |
) |
(2287.1 |
)% |
$ |
(36,325 |
) |
(136.1 |
)% |
||
Stock-based compensation |
|
5,087 |
|
52.0 |
% |
|
5,445 |
|
221.8 |
% |
|
6,236 |
|
23.4 |
% |
||
(Gain) Loss on fair value of warrants |
|
2,620 |
|
26.8 |
% |
|
(2,476 |
) |
(100.9 |
)% |
|
2,553 |
|
9.6 |
% |
||
(Gain) Loss on fair value of contingent earnout liabilities |
|
437 |
|
4.5 |
% |
|
(12,958 |
) |
(527.8 |
)% |
|
9,653 |
|
36.2 |
% |
||
Gain on fair value of debt derivative |
|
— |
|
— |
% |
|
(11,649 |
) |
(474.5 |
)% |
|
— |
|
— |
% |
||
Loss on extinguishment of debt |
|
— |
|
— |
% |
|
19,197 |
|
782.0 |
% |
|
— |
|
— |
% |
||
Non-GAAP Net Loss |
$ |
(20,170 |
) |
(206.1 |
)% |
$ |
(58,590 |
) |
(2386.6 |
)% |
$ |
(17,883 |
) |
(67.0 |
)% |
|
|||||||||||||||||
NON-GAAP Adjusted EBITDA Reconciliation |
|||||||||||||||||
(Unaudited) |
|||||||||||||||||
Three months ended | |||||||||||||||||
2024 |
2023 |
2023 |
|||||||||||||||
(In thousands, except for percentages) | |||||||||||||||||
% of Rev | % of Rev | % of Rev | |||||||||||||||
Revenue |
$ |
9,786 |
|
100.0 |
% |
$ |
2,455 |
|
100.0 |
% |
$ |
26,687 |
|
100.0 |
% |
||
Net Income (Loss) |
|
(28,314 |
) |
(289.3 |
)% |
|
(56,149 |
) |
(2287.1 |
)% |
|
(36,325 |
) |
(136.1 |
)% |
||
Interest expense |
|
3,897 |
|
39.8 |
% |
|
6,140 |
|
250.1 |
% |
|
220 |
|
0.8 |
% |
||
Tax expense |
|
4 |
|
0.0 |
% |
|
— |
|
— |
% |
|
— |
|
— |
% |
||
Depreciation and amortization |
|
4,567 |
|
46.7 |
% |
|
4,794 |
|
195.3 |
% |
|
1,560 |
|
5.8 |
% |
||
EBITDA |
$ |
(19,846 |
) |
(202.8 |
)% |
$ |
(45,215 |
) |
(1841.8 |
)% |
$ |
(34,545 |
) |
(129.4 |
)% |
||
Stock-based compensation |
|
5,087 |
|
52.0 |
% |
|
5,445 |
|
221.8 |
% |
|
6,236 |
|
23.4 |
% |
||
(Gain) Loss on fair value of warrants |
|
2,620 |
|
26.8 |
% |
|
(2,476 |
) |
(100.9 |
)% |
|
2,553 |
|
9.6 |
% |
||
(Gain) Loss on fair value of contingent earnout liabilities |
|
437 |
|
4.5 |
% |
|
(12,958 |
) |
(527.8 |
)% |
|
9,653 |
|
36.2 |
% |
||
Gain on fair value of debt derivative |
|
— |
|
— |
% |
|
(11,649 |
) |
(474.5 |
)% |
|
— |
|
— |
% |
||
Loss on extinguishment of debt |
|
— |
|
— |
% |
|
19,197 |
|
782.0 |
% |
|
— |
|
— |
% |
||
Adjusted EBITDA |
$ |
(11,702 |
) |
(119.6 |
)% |
$ |
(47,656 |
) |
(1941.2 |
)% |
$ |
(16,103 |
) |
(60.3 |
)% |
|
||||||||||||||
NON-GAAP Adjusted Operating Expenses Reconciliation |
||||||||||||||
(Unaudited) |
||||||||||||||
Three months ended | ||||||||||||||
2024 |
2023 |
2023 |
||||||||||||
(In thousands, except for percentages) | ||||||||||||||
% of Rev | % of Rev | % of Rev | ||||||||||||
Revenue |
$ |
9,786 |
100.0 |
% |
$ |
2,455 |
100.0 |
% |
$ |
26,687 |
100.0 |
% |
||
Operating expenses | ||||||||||||||
Research and development |
|
5,043 |
51.5 |
% |
|
9,886 |
402.7 |
% |
|
10,417 |
39.0 |
% |
||
Selling and marketing |
|
4,809 |
49.1 |
% |
|
5,175 |
210.8 |
% |
|
6,174 |
23.1 |
% |
||
General and administrative |
|
8,783 |
89.8 |
% |
|
10,877 |
443.1 |
% |
|
10,191 |
38.2 |
% |
||
Total operating expenses |
|
18,635 |
190.4 |
% |
|
25,938 |
1056.5 |
% |
|
26,782 |
100.4 |
% |
||
Stock-based compensation in operating expenses |
|
4,503 |
46.0 |
% |
|
4,780 |
194.7 |
% |
|
5,970 |
22.4 |
% |
||
Adjusted operating expenses |
$ |
14,132 |
144.4 |
% |
$ |
21,158 |
861.8 |
% |
$ |
20,812 |
78.0 |
% |
|
||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | ||||||||||||
(Unaudited) | ||||||||||||
(in thousands, except share and per share data) | ||||||||||||
Three months ended | ||||||||||||
|
|
|
||||||||||
Revenue | ||||||||||||
3D Printer |
$ |
7,660 |
|
$ |
513 |
|
$ |
24,448 |
|
|||
Recurring payment |
|
470 |
|
|
535 |
|
|
575 |
|
|||
Support services |
|
1,656 |
|
|
1,407 |
|
|
1,664 |
|
|||
Total Revenue |
|
9,786 |
|
|
2,455 |
|
|
26,687 |
|
|||
Cost of revenue | ||||||||||||
Cost of 3D Printer |
|
9,394 |
|
|
31,455 |
|
|
22,168 |
|
|||
Cost of Recurring Payment |
|
315 |
|
|
398 |
|
|
447 |
|
|||
Cost of Support Services |
|
2,892 |
|
|
2,100 |
|
|
1,540 |
|
|||
Total cost of revenue |
|
12,601 |
|
|
33,953 |
|
|
24,155 |
|
|||
Gross profit (loss) |
|
(2,815 |
) |
|
(31,498 |
) |
|
2,532 |
|
|||
Operating expenses | ||||||||||||
Research and development |
|
5,043 |
|
|
9,886 |
|
|
10,417 |
|
|||
Selling and marketing |
|
4,809 |
|
|
5,175 |
|
|
6,174 |
|
|||
General and administrative |
|
8,783 |
|
|
10,877 |
|
|
10,191 |
|
|||
Total operating expenses |
|
18,635 |
|
|
25,938 |
|
|
26,782 |
|
|||
Loss from operations |
|
(21,450 |
) |
|
(57,436 |
) |
|
(24,250 |
) |
|||
Interest expense |
|
(3,897 |
) |
|
(6,140 |
) |
|
(220 |
) |
|||
Gain (loss) on fair value of warrants |
|
(2,620 |
) |
|
2,476 |
|
|
(2,553 |
) |
|||
Gain (loss) on fair value of contingent earnout liabilities |
|
(437 |
) |
|
12,958 |
|
|
(9,653 |
) |
|||
Gain on fair value of debt derivative |
|
— |
|
|
11,649 |
|
|
— |
|
|||
Loss on extinguishment of debt |
|
— |
|
|
(19,197 |
) |
|
— |
|
|||
Other income, net |
|
94 |
|
|
(459 |
) |
|
351 |
|
|||
Loss before provision for income taxes |
|
(28,310 |
) |
|
(56,149 |
) |
|
(36,325 |
) |
|||
Provision for income taxes |
|
(4 |
) |
|
— |
|
|
— |
|
|||
Net loss |
|
(28,314 |
) |
|
(56,149 |
) |
|
(36,325 |
) |
|||
Net loss per share: | ||||||||||||
Basic |
$ |
(0.11 |
) |
$ |
(0.27 |
) |
$ |
(0.19 |
) |
|||
Diluted |
$ |
(0.11 |
) |
$ |
(0.27 |
) |
$ |
(0.19 |
) |
|||
Shares used in computing net loss per share: | ||||||||||||
Basic |
|
260,294,161 |
|
|
207,869,092 |
|
|
189,609,021 |
|
|||
Diluted |
|
260,294,161 |
|
|
207,869,092 |
|
|
189,609,021 |
|
|||
Net loss |
$ |
(28,314 |
) |
$ |
(56,149 |
) |
$ |
(36,325 |
) |
|||
Net unrealized holding gain (loss) on available-for-sale investments |
|
52 |
|
|
156 |
|
|
288 |
|
|||
Total comprehensive loss |
$ |
(28,262 |
) |
$ |
(55,993 |
) |
$ |
(36,037 |
) |
|
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(Unaudited) | |||||||
(In thousands, except share and per share data) | |||||||
|
|
||||||
2024 |
2023 |
||||||
(in thousands, except share and per share data) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents |
$ |
7,754 |
|
$ |
24,494 |
|
|
Short-term investments |
|
3,151 |
|
|
6,621 |
|
|
Accounts receivable, net |
|
11,653 |
|
|
9,583 |
|
|
Inventories |
|
62,799 |
|
|
60,816 |
|
|
Contract assets |
|
9,906 |
|
|
7,510 |
|
|
Prepaid expenses and other current assets |
|
3,082 |
|
|
4,000 |
|
|
Total current assets |
|
98,345 |
|
|
113,024 |
|
|
Property and equipment, net |
|
15,253 |
|
|
16,326 |
|
|
Equipment on lease, net |
|
5,482 |
|
|
6,667 |
|
|
Other assets |
|
17,068 |
|
|
17,782 |
|
|
Total assets |
$ |
136,148 |
|
$ |
153,799 |
|
|
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable |
$ |
15,595 |
|
$ |
15,854 |
|
|
Accrued expenses and other current liabilities |
|
6,244 |
|
|
6,491 |
|
|
Debt - current portion |
|
34,300 |
|
|
21,191 |
|
|
Contract liabilities |
|
4,719 |
|
|
5,135 |
|
|
Total current liabilities |
|
60,858 |
|
|
48,671 |
|
|
Long-term debt - less current portion |
|
2,003 |
|
|
11,941 |
|
|
Contingent earnout liabilities |
|
1,893 |
|
|
1,456 |
|
|
Warrant liabilities |
|
14,455 |
|
|
11,835 |
|
|
Other noncurrent liabilities |
|
11,489 |
|
|
11,556 |
|
|
Total liabilities |
$ |
90,698 |
|
$ |
85,459 |
|
|
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Common stock, |
|
2 |
|
|
2 |
|
|
Additional paid-in capital |
|
430,843 |
|
|
425,471 |
|
|
Accumulated other comprehensive income |
|
(44 |
) |
|
(96 |
) |
|
Accumulated deficit |
|
(385,351 |
) |
|
(357,037 |
) |
|
Total stockholders’ equity |
$ |
45,450 |
|
$ |
68,340 |
|
|
Total liabilities and stockholders’ equity |
$ |
136,148 |
|
$ |
153,799 |
|
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
Three Months Ended | ||||||||
2024 |
2023 |
|||||||
Cash flows from operating activities | ||||||||
Net loss |
|
(28,314 |
) |
|
(36,325 |
) |
||
Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
Depreciation and amortization |
|
4,567 |
|
|
1,560 |
|
||
Stock-based compensation |
|
5,087 |
|
|
6,236 |
|
||
Loss on fair value of warrants |
|
2,620 |
|
|
2,553 |
|
||
Loss on fair value of contingent earnout liabilities |
|
437 |
|
|
9,653 |
|
||
Changes in assets and liabilities | ||||||||
Accounts receivable |
|
(2,070 |
) |
|
(5,162 |
) |
||
Inventories |
|
2,645 |
|
|
(1,425 |
) |
||
Contract assets |
|
(2,118 |
) |
|
(1,124 |
) |
||
Prepaid expenses and other current assets |
|
1,078 |
|
|
2,776 |
|
||
Other assets |
|
396 |
|
|
247 |
|
||
Accounts payable |
|
(4,199 |
) |
|
(2,694 |
) |
||
Accrued expenses and other liabilities |
|
(218 |
) |
|
(1,848 |
) |
||
Contract liabilities |
|
(416 |
) |
|
(4,583 |
) |
||
Other noncurrent liabilities |
|
(18 |
) |
|
(698 |
) |
||
Net cash used in operating activities |
|
(20,523 |
) |
|
(30,834 |
) |
||
Cash flows from investing activities | ||||||||
Purchase of property and equipment |
|
(6 |
) |
|
(403 |
) |
||
Production of equipment for lease to customers |
|
(1 |
) |
|
(135 |
) |
||
Proceeds from maturities of available-for-sale investments |
|
3,500 |
|
|
21,500 |
|
||
Net cash provided by investing activities |
|
3,493 |
|
|
20,962 |
|
||
Cash flows from financing activities | ||||||||
Proceeds from ATM offering, net of issuance costs |
|
— |
|
|
10,458 |
|
||
Proceeds from revolver facility |
|
— |
|
|
5,000 |
|
||
Repayment of equipment loans |
|
— |
|
|
(734 |
) |
||
Issuance of common stock upon exercise of stock options |
|
285 |
|
|
310 |
|
||
Net cash provided by financing activities |
|
285 |
|
|
15,034 |
|
||
Effect of exchange rate changes on cash and cash equivalents |
|
5 |
|
|
(6 |
) |
||
Net change in cash and cash equivalents |
|
(16,740 |
) |
|
5,156 |
|
||
Cash and cash equivalents and restricted cash at beginning of period |
|
25,294 |
|
|
32,783 |
|
||
Cash and cash equivalents and restricted cash at end of period |
$ |
8,554 |
|
$ |
37,939 |
|
||
Supplemental disclosure of cash flow information | ||||||||
Cash paid for interest |
$ |
556 |
|
$ |
220 |
|
||
Supplemental disclosure of non-cash information | ||||||||
Unpaid liabilities related to property and equipment |
|
(59 |
) |
|
(16 |
) |
||
Equipment for lease to customers returned to inventory |
|
912 |
|
|
— |
|
||
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the total of such amounts shown on the condensed consolidated statements of cash flows: |
||||||||
Three Months Ended | ||||||||
2024 |
2023 |
|||||||
Cash and cash equivalents |
$ |
7,754 |
|
$ |
37,139 |
|
||
Restricted cash (Other assets) |
|
800 |
|
|
800 |
|
||
Total cash and cash equivalents, and restricted cash |
$ |
8,554 |
|
$ |
37,939 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240515971294/en/
Investor Relations:
Bob Okunski, VP Investor Relations
investors@velo3d.com
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