VI
Velo3D, Inc. (VLDX)·Q1 2025 Earnings Summary
Executive Summary
- Q1 2025 revenue was $9.3M with a positive GAAP gross margin of 7.5% (from -28.8% a year ago), while GAAP net loss improved to $25.4M; non-GAAP net loss was $8.9M and adjusted EBITDA was -$6.9M .
- Backlog rose to $18M at quarter-end, with management highlighting a demand mix shift to Rapid Production Services (RPS); new customers were >75% of Q1 bookings and ~50% of demand came from defense .
- Guidance reaffirmed: FY25 revenue $50–$60M, sequential gross margin improvement to >30% in Q4 2025, non-GAAP OpEx $40–$50M, CapEx $15–$20M; target EBITDA profitability in H1 2026 .
- Strategic catalysts: launch of RPS in March; $15M five-year MSA with Momentus; exclusive supply agreement with Amaero; additional Sapphire XC printer order to Mears; Ohio Ordnance Works RPS agreement; leadership and board additions .
What Went Well and What Went Wrong
What Went Well
- RPS launch and traction: “Backlog for this offering has tripled compared to the prior quarter…more than 75% of first quarter bookings were from new customers” and ~50% of demand from defense .
- Gross margin inflection: GAAP gross margin reached 7.5% vs -28.8% YoY, driven by BOM cost reductions and manufacturing optimization; management expects continued improvement through 2025 as RPS ramps .
- Strengthened commercial pipeline with strategic agreements (Momentus $15M MSA; Amaero exclusive supply; Ohio Ordnance Works agreement; Mears’ fourth Sapphire XC), positioning for higher-margin recurring revenue .
Quote: “Momentum is building across our business…particularly in the defense and aerospace industries where domestic supply chain resiliency is a priority” — CEO Arun Jeldi .
What Went Wrong
- System revenue decreased YoY (strategy shift to maintain ASPs while targeting high-value customers) and overall revenue declined sequentially from Q4 2024’s $12.6M to $9.3M .
- Continued losses: GAAP net loss of $25.4M; adjusted EBITDA remained negative (-$6.9M), though improved vs Q4 2024 (-$14.6M) .
- Cash constrained but improved: cash & equivalents $3.9M at Q1-end (up from $1.2M at FY-end), supported by $15M secured convertible notes; warrant cancellation reduced future liabilities but underscores capital structure complexity .
Financial Results
Core P&L vs prior periods and consensus
Note: Wall Street consensus estimates from S&P Global were unavailable for VLDX at this time.
Segment Revenue Breakdown
KPIs and Balance Sheet Highlights
Guidance Changes
Earnings Call Themes & Trends
Management Commentary
- “Momentum is building across our business…gaining significant traction with both new and existing customers, particularly in the defense and aerospace industries where domestic supply chain resiliency is a priority.” — CEO Arun Jeldi .
- “We believe RPS could account for up to 40% of our revenue by 2026.” — CEO Arun Jeldi .
- “We are reiterating our 2025 full-year guidance…revenue $50–$60M…gross margin…exiting 2025 at or above 30%…non-GAAP operating expenses $40–$50M…and capital expenditure of $15–$20M.” — CFO Hull Xu .
- On margin drivers: “The improvement is a result of continued BOM cost reduction as well as manufacturing process optimization.” — Company press release .
Q&A Highlights
- No analyst questions were received; management closed with reiteration of guidance and strategic focus on RPS and margin improvement . In Q4 2024, similarly, there were no questions .
- Clarifications emphasized sequential gross margin improvement and the path to EBITDA profitability in H1 2026 .
Estimates Context
- Wall Street consensus estimates from S&P Global for revenue and EPS were unavailable for VLDX for Q1 2025, Q4 2024, and FY 2025 at the time of this analysis. As a result, we cannot benchmark beats/misses versus consensus for this quarter [Values retrieved from S&P Global]*.
Key Takeaways for Investors
- RPS is the core growth narrative: triple backlog, strong defense demand, and recurring revenue potential; look for conversion of backlog to revenue starting 2H 2025 .
- Margin inflection has begun; continued BOM and process optimization plus RPS mix should drive sequential gross margin gains toward >30% exiting 2025 .
- Revenue trajectory depends on system sales plus RPS ramp; Q1 decline vs Q4 reflects sales timing and ASP-focused strategy; monitor Q2/Q3 order flow .
- Balance sheet actions reduce overhang (warrant cancellation; bridge financing), but cash remains tight, making execution on RPS ramp and cost discipline critical near-term .
- Strategic partnerships (Momentus, Amaero, OOW) and XC fleet expansion at customers are tangible validations of market demand in aerospace/defense; watch for additional multi-year agreements .
- Guidance credibility improving: management maintained FY25 targets; next few quarters will test margin and RPS scalability narrative .
- Trading lens: stock narrative likely pivots on evidence of RPS revenue conversion, backlog growth sustainability, and gross margin trajectory; absence of consensus may limit “beat/miss” trading catalysts in near term, shifting focus to qualitative execution milestones .