Velo3D Announces Bookings Totaling $27 Million Since Mid-December – Backlog Now Totals $23 Million
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Insights
The recent acquisition by Mears Machine of the Sapphire XC systems from Velo3D signifies a strategic expansion in their production capabilities, particularly in the defense and aerospace sectors. This move is likely to enhance Mears Machine's competitive edge in the contract manufacturing market by leveraging Velo3D's advanced additive manufacturing technology. The focus on these high-value industries suggests potential for increased revenue streams and a solidified market position.
However, the projected gross margin for Velo3D in the first quarter of 2024 raises some concerns. A gross margin ranging from negative 25 percent to 10 percent is notably below the industry benchmark for healthy gross margins, typically above 20 percent. This could indicate cost management issues or pricing pressure in the market. The commitment to reach approximately 30 percent by the fourth quarter is ambitious and will require close monitoring of operational efficiency improvements and cost reduction strategies.
Velo3D's announcement of $27 million in purchase orders, including significant repeat business, is a strong indicator of customer loyalty and product satisfaction. The backlog of $23 million, with deliveries slated for Q2 2024, provides a clear revenue stream in the near term. However, investors should be mindful of the timing of these revenues and the potential impact on cash flows, as significant bookings occurred late in Q1.
Investors should also consider the preliminary financial estimates cautiously. The wide revenue range ($6 to $11 million) and the lack of finalized financial statements suggest a degree of uncertainty that could affect the stock's performance. The anticipated operating expenses of $13 to $18 million, when juxtaposed with the revenue estimates, hint at a challenging profitability outlook for the immediate future.
The defense and aerospace industries are known for their rigorous standards and the need for high-precision components. Velo3D's Sapphire XC systems are evidently meeting these requirements, as evidenced by Mears Machine's investment. This technology enables the production of complex geometries that are often required in defense and aerospace applications, potentially leading to increased efficiency and innovation within these sectors.
Moreover, the trend towards additive manufacturing in defense and aerospace is growing, driven by the need for rapid prototyping and reduced lead times. Velo3D's positioning in this market and the endorsement by a contract manufacturer like Mears Machine could signal a broader industry shift towards such technologies. The long-term implications for stakeholders include the potential for increased demand for Velo3D's products and services, provided they maintain technological leadership and manage to scale operations effectively.
Leading Global Contract Manufacturer Mears Machine Acquires 2 Sapphire XC Systems – Systems to be Dedicated to Defense and Aerospace Industries
Additional Orders from Leaders in the Defense and Space Industries
Company Provides Preliminary First Quarter 2024 Revenue, Gross Margin, and Operating Expense Estimates
“These new orders reflect continued customer confidence in our technology and reinforces the success of our new go to market strategy, especially in the Defense and Space industries,” said Brad Kreger, CEO of Velo3D. “We are also very encouraged to see that our renewed focus on system reliability and customer success is yielding results as more than
“Finally, I would like to reiterate that our strong bookings reflect the value of our technology, given its ability to accelerate innovation for customers, meaningfully improve lead time for mission-critical parts, and streamline the process of scaling to volume production when compared to conventional metal 3D printers.”
The company also provided preliminary company estimates for the first quarter of 2024, based on the information and data currently available:
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For the first quarter ended March 31,2024, the company expects revenue in the range of
$6 $11 million - Gross margin (the company's gross profit as a percentage of revenue) for the first quarter will be in the range of (25) percent to 10 percent. The company remains committed to achieving approximately 30 percent gross margin in the fourth quarter of 2024.
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Operating expenses, excluding one-time charges and stock-based compensation expense, will be in the range of
$13 million $18 million
The company has not completed the preparation of its condensed consolidated financial statements as of and for the three months ended March 31, 2024. The preliminary, unaudited results presented in this press release as of and for the first quarter ended March 31, 2024 are based on current expectations and are subject to adjustment, as the company completes the preparation of its condensed consolidated financial statements for the three months ended March 31, 2024. These preliminary, unaudited results are not a comprehensive statement of the company’s financial results for these periods and should not be viewed as a substitute for financial statements prepared in accordance with generally accepted accounting principles. Actual results may differ materially from those disclosed in this press release.
About Velo3D:
Velo3D is a metal 3D printing technology company. 3D printing—also known as additive manufacturing (AM)—has a unique ability to improve the way high-value metal parts are built. However, legacy metal AM has been greatly limited in its capabilities since its invention almost 30 years ago. This has prevented the technology from being used to create the most valuable and impactful parts, restricting its use to specific niches where the limitations were acceptable.
Velo3D has overcome these limitations so engineers can design and print the parts they want. The company’s solution unlocks a wide breadth of design freedom and enables customers in space exploration, aviation, power generation, energy, and semiconductor to innovate the future in their respective industries. Using Velo3D, these customers can now build mission-critical metal parts that were previously impossible to manufacture. The fully integrated solution includes the Flow print preparation software, the Sapphire family of printers, and the Assure quality control system—all of which are powered by Velo3D’s Intelligent Fusion manufacturing process. The company delivered its first Sapphire system in 2018 and has been a strategic partner to innovators such as SpaceX, Aerojet Rocketdyne, Lockheed Martin, Avio, and General Motors. Velo3D has been named as one of Fast Company’s Most Innovative Companies for 2023. For more information, please visit Velo3D.com, or follow the company on LinkedIn or Twitter.
VELO, VELO3D, SAPPHIRE and INTELLIGENT FUSION, are registered trademarks of Velo3D, Inc.; and WITHOUT COMPROMISE, FLOW and ASSURE are trademarks of Velo3D, Inc. All Rights Reserved © Velo3D, Inc.
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, statements regarding the company’s preliminary, unaudited results presented in this press release as of and for the first quarter ended March 31, 2024, the company’s bookings and backlog which may not lead to completed sales, the company’s expectations regarding its gross margin for the fourth quarter of 2024, 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 December 31, 2023 (the “FY 2023 10-K”), which was filed by the company with the SEC on April 3, 2024 and the other documents filed by the company from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Most of these factors are outside the company’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: (1) the inability of the company to execute its business plan, which may be affected by, among other things, competition, the ability of the company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its key employees; (2) the period over which the company anticipates its existing cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements and the company's ability to continue as a going concern; (3) the company's ability to service and comply with its indebtedness; (4) the company's ability to satisfy New York Stock Exchange Listing rules; (5) changes in the applicable laws or regulations; (6) the possibility that the company may be adversely affected by other economic, business, and/or competitive factors; (7) the lingering effects of the global COVID-19 pandemic; and (8) other risks and uncertainties indicated from time to time described in the FY 2023 10-K, including those under “Risk Factors” therein, and in the company’s other filings with the SEC. The company cautions that the foregoing list of factors is not exclusive and not to place undue reliance upon any forward-looking statements, including projections, which speak only as of the date made. The company does not undertake or accept any obligation to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240404551698/en/
Investor Relations:
Velo3D
Bob Okunski, VP Investor Relations
investors@velo3d.com
Media Contact:
Velo3D
Dan Sorensen, Senior Director of PR
press@velo3d.com
Source: Velo3D, Inc.
FAQ
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