Velo3D Reports 64.4% Revenue Decline and $22.9 Million Net Loss in Latest Quarter

Velo3D, Inc. reported significant financial challenges in its latest quarterly filing, revealing a total revenue of $8.2 million for the three months ended September 30, 2024, a decrease of 64.4% compared to $23.2 million in the same period last year. The decline was primarily driven by a substantial drop in 3D printer sales, which fell to $1.0 million from $20.8 million, reflecting a 95% decrease. The company attributed this downturn to fewer systems sold and ongoing customer order delays, which have also impacted its backlog, now standing at $21 million, up from $13 million at the end of 2023.

In terms of profitability, Velo3D reported a net loss of $22.9 million for the third quarter of 2024, compared to a loss of $19.5 million in the prior year. The company's gross profit was $4.1 million, a significant improvement from a gross profit of only $163,000 in the same quarter of 2023, largely due to a reduction in costs associated with licensing revenue. However, total operating expenses decreased by 12.3% to $22.8 million, driven by cuts in research and development and selling and marketing expenses, as part of a strategic realignment aimed at optimizing cash flow and operational efficiency.

The company has also faced liquidity challenges, with cash and cash equivalents dropping to approximately $1.6 million as of September 30, 2024, down from $24.5 million at the end of 2023. This decline raises concerns about Velo3D's ability to meet its short-term obligations, including $17.7 million in accounts payable and $29.6 million in secured notes. The company has indicated that it may need to engage in additional financing to sustain operations, which could include equity or debt offerings.

Strategically, Velo3D has initiated a series of cost-cutting measures, including a reduction in workforce that affected approximately 32% of its employees. This move is part of a broader effort to streamline operations and improve financial stability. The company is also exploring new go-to-market strategies to enhance customer engagement and rebuild its order backlog. Despite these efforts, Velo3D's management has expressed substantial doubt about the company's ability to continue as a going concern over the next 12 months without securing additional funding.

Looking ahead, Velo3D remains focused on its core technology and product offerings, particularly the Sapphire family of 3D printers, which it believes will drive future revenue growth. However, the company acknowledges that ongoing macroeconomic conditions, including interest rate fluctuations and supply chain challenges, may continue to impact its performance. The management's outlook emphasizes the need for strategic realignment and operational improvements to navigate the current financial landscape effectively.