Name: Velo3D, Inc. Q1 2024 Earnings Call
Start: 2024-05-15T21:01:03.000Z

Executive Summary

Q1 2024 revenue was $9.8M (management also described “$10M”), with gross margin at -28.8% and GAAP diluted EPS of $(0.11), reflecting improved shipments but continued underabsorption of fixed costs .
Bookings were $17M in Q1 and $27M since mid-December; backlog exited Q1 at $22M, providing visibility to >30% sequential revenue growth in Q2 2024; FY2024 revenue guidance maintained at $80–$95M and Q4 gross margin ~30% .
Cost realignment drove GAAP opex down to $18.6M and non-GAAP opex to $14.1M (down 15% sequentially); adjusted EBITDA loss improved to $(11.7)M from $(47.7)M in Q4 2023 .
Strategic focus areas include defense sector expansion (3 new defense customers), reliability improvements (100% resolution of high-priority tickets), and installation efficiency (>40% reduction in Sapphire XC install days), supporting bookings from existing customers (~50%) .
Stock-relevant catalysts: defense wins and backlog/booking momentum, cost reductions and Q2 >30% sequential revenue growth expectation, and reiterated path to Q4 gross margin ~30% despite current negative margins .

What Went Well and What Went Wrong

What Went Well

“We booked $17 million in new orders during the quarter” with roughly 50% from existing customers, underscoring reliability and customer satisfaction; backlog exited Q1 at $22M to support >30% sequential revenue growth in Q2 .
Defense-sector traction: “we added 3 new defense customers in the first quarter,” supporting bookings and backlog visibility .
Cost discipline and cash flow trajectory: non-GAAP opex fell to $14.1M (down 15% sequentially), and operating cash flow improved >35% year over year; management reiterated cash flow breakeven in H2 2024 .

What Went Wrong

Gross margin remained negative (-28.8%), primarily due to lower fixed cost absorption despite higher shipments; positive GM expected in Q2 on volume and cost improvements .
GAAP net loss remained substantial at $(28.3)M; non-GAAP net loss was $(20.2)M despite cost reductions and reliability gains .
Sequential improvement from Q4 was off a very weak base (Q4 revenue $2.5M, GM far below zero), highlighting ongoing sensitivity to bookings timing, mix, and manufacturing efficiency .

Financial Results

Metric	Q1 2023	Q4 2023	Q1 2024
Revenue ($USD Millions)	$26.687	$2.455	$9.786
Gross Margin %	9.5%	(1283.0)%	(28.8)%
GAAP Diluted EPS ($)	$(0.19)	$(0.27)	$(0.11)
Non-GAAP Net Loss ($USD Millions)	$(17.883)	$(58.590)	$(20.170)
Adjusted EBITDA ($USD Millions)	$(16.103)	$(47.656)	$(11.701)
GAAP Operating Expenses ($USD Millions)	$26.782	$25.938	$18.635
Non-GAAP Operating Expenses ($USD Millions)	$20.812	$21.158	$14.132

Segment revenue breakdown

Segment	Q1 2023	Q4 2023	Q1 2024
3D Printer ($USD Millions)	$24.448	$0.513	$7.660
Recurring payment ($USD Millions)	$0.575	$0.535	$0.470
Support services ($USD Millions)	$1.664	$1.407	$1.656
Total Revenue ($USD Millions)	$26.687	$2.455	$9.786

KPIs and balance sheet/cash flow

KPI	Q1 2023	Q4 2023	Q1 2024
Bookings ($USD Millions)	—	>$15 since mid-Dec (as of Mar 26, 2024)	$17 in Q1; $27 since mid-Dec
Backlog ($USD Millions)	—	—	$22 exiting Q1
% Q1 bookings from existing customers	—	—	~50%
Sapphire XC install efficiency	—	—	>40% reduction in install days
Cash and Investments ($USD Millions)	$64	$31	$11
Net cash used in operating activities ($USD Millions)	$(30.834)	—	$(20.523)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue growth (sequential)	Q2 2024	—	>30% sequential growth	New
Revenue ($USD Millions)	FY 2024	$80–$95	$80–$95	Maintained
Gross margin (%)	FY 2024/Q4 2024	FY GM: 20–30%; Q4 ~30% (excl. non-recurring)	Sequential quarterly improvement; Q4 ~30% (excl. non-recurring)	Maintained Q4 target
Non-GAAP Operating Expenses ($USD Millions)	FY 2024	—	$40–$50	New
Preliminary Q1 ranges (context)	Q1 2024	—	Revenue $6–$11; GM -25% to 10%; opex ex one-time & SBC $13–$18	Informational (prelim → actual)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2: Q3 2023)	Previous Mentions (Q-1: Q4 2023)	Current Period (Q1 2024)	Trend
Customer success/system reliability	Realignment to prioritize customer success; bookings below plan; plan to resume growth	Reduced issue resolution time >45% and improved uptime 10%	100% of high-priority tickets resolved; ~50% bookings from existing customers	Improving reliability/customer satisfaction
Defense sector focus	Strategy pivot underway; no explicit defense adds in Q3 release	Added Kratos Defense and Bechtel Plant Machinery; strong defense end-market	Added 3 new defense customers; bookings momentum in defense	Strengthening exposure/traction
Cost structure/opex discipline	Target ~40% opex reduction by Q1’24; non-GAAP opex $20.0M in Q3	Non-GAAP opex $16.5M; >15% sequential opex cut; RIF charges	Non-GAAP opex $14.1M; >10% decline guided for Q2	Sequential reductions continuing
Gross margin trajectory	GM 7.2%; expected rise dependent on ASP/mix/costs	Q4 GM deeply negative; expected positive GM in Q1 on costs/contracts/efficiency	GM -28.8%; expect positive GM in Q2 on shipments/materials/supply contracts/efficiency	Moving toward positive with volume/efficiency
Bookings/backlog visibility	Q4 transition expected; 2023 guidance cut on bookings delays	>$15M bookings since mid-Dec; FY2024 revenue guide set	$17M Q1 bookings; $22M backlog; >30% Q2 sequential revenue growth expected	Visibility increasing
Cash flow breakeven	Target 2024 profitability/free cash flow breakeven discussed	H2 2024 free cash flow breakeven targeted	Reiterated H2 2024 free cash flow breakeven target	On track per plan

Management Commentary

“We booked $17 million in new orders during the quarter… We entered the second quarter with $22 million in backlog.” — Brad Kreger, CEO .
“We further reduced our quarterly costs and improved our operational efficiency… we remain committed to achieving cash flow breakeven in the second half of the year.” — Brad Kreger, CEO .
“Resolved 100% of high priority tickets in Q1’24… increased sequential Sapphire XC installation efficiency — >40% reduction in install days and labor.” .
“We expect positive gross margin in the second quarter of 2024 as a result of increased system shipments, improvements in system balance of material costs, benefits from new long term supply contracts and higher operating and manufacturing efficiency.” .

Q&A Highlights

Defense demand tailwind: management emphasized strong traction and new defense customers, noting defense is “clearly ramping up” and a tailwind through 2024; discussion highlighted contract manufacturers guided by primes/government programs .
Call logistics and forward-looking framework referenced in the transcript source (SA), with CFO providing guidance and operational updates .
Transcript availability corroborated across outlets (Marketscreener/SA/MLQ.ai) for deeper review of prepared remarks and Q&A .

Note: Our internal document reader encountered an inconsistency for the earnings-call-transcript file; we used trusted public transcript sources for Q&A highlights and attribution as above .

Estimates Context

Wall Street consensus via S&P Global was unavailable for VLD due to a missing CIQ mapping; thus, we cannot quantify beats/misses versus SPGI consensus for Q1/Q2/FY at this time (attempted retrieval failed) [GetEstimates error: Missing CIQ mapping for ticker 'VLD'].
Company guidance anchors expectations: Q2 revenue growth >30% sequentially; FY 2024 revenue $80–$95M; Q4 2024 GM ~30%; FY non-GAAP opex $40–$50M .
As estimates are unavailable, we recommend monitoring sell-side revisions post-Q1 given bookings/backlog momentum and margin-improvement narrative .

Key Takeaways for Investors

Sequential rebound underway: shipments and bookings improved, pointing to >30% sequential revenue growth in Q2; backlog supports near-term visibility .
Margin inflection plan: despite Q1 GM -28.8%, management expects positive GM in Q2 and ~30% GM in Q4 on higher volume, material-cost balance, supply contracts, and manufacturing efficiency .
Cost discipline sticks: non-GAAP opex reduced to $14.1M with further declines guided; adjusted EBITDA loss improved meaningfully vs Q4 .
Defense as a structural tailwind: three new defense customers and bookings from existing accounts (~50%) imply strengthening end-market fit and reliability recognition .
Liquidity watch: cash/investments fell to $11M; operating cash outflow improved YoY but remains sizable—execution on backlog conversion and cost programs is critical for H2 breakeven .
Narrative likely drives stock: catalysts include defense wins, backlog/booking disclosures, cost-down milestones, and evidence of Q2 GM turn to positive; any divergence from the Q4 GM ~30% path could be a negative surprise .
Actionable: position around Q2 shipment cadence and margin prints; monitor order timing, ASP/mix, and long-term supply contract benefits to validate Q4 GM target .

Velo3D, Inc. (VLD)·Q1 2024 Earnings Summary