Year Over Year Second Quarter Revenue up 28% / 1H23 up 63%

• Q223 revenue of $25 million – 28% year over year increase
• Continued gross margin expansion – 12%, up from 11% in Q123
• Record new customer demand – 90% of bookings in Q223
• Net cash flow in line with forecast – ended Q223 with $47M in cash
• Updated 2023 revenue guidance of $105 to $115M – result of delays in booking certain orders

CAMPBELL, Calif. — (BUSINESS WIRE) — August 10, 2023 — Velo3D, Inc. (NYSE: VLD), a leading additive manufacturing technology company for mission-critical metal parts, today announced financial results for its fiscal second quarter ended June 30, 2023.

“Our second quarter results reflect strong execution as we expanded our global footprint, improved manufacturing cycle times through our efficiency initiatives and prudently managed our costs,” said Benny Buller, CEO of Velo3D. “Demand for our industry leading technology remains strong as we booked a record amount of new customer orders during the quarter and exited Q223 with a growing pipeline across a diverse set of industries. In particular, we continued to expand our presence in the defense vertical while maintaining our leading position as a preferred supplier to the global space industry. However, despite these positive demand trends, second quarter bookings came in below plan, primarily due to delays in booking certain orders, which will impact our second half revenue forecast. As a result, we now expect our fiscal year 2023 revenue to be in the range of $105 million to $115 million. Importantly, our path to profitability remains clear and with the announcement of our registered direct offering of $70 million of senior secured convertible notes, we believe we have strong liquidity to reach our goal of sustained profitability.

“Operationally, manufacturing cycle times continue to improve for our Sapphire XC and Sapphire XC 1MZ systems. As these systems have become the majority of our quarterly shipments, we are now seeing the benefits of scale in our production processes. This scale, combined with the continued improvement in materials costs and manufacturing efficiency, has enabled us to improve our gross margin in the second quarter. We also remain committed to managing our expense structure and expect to materially reduce our operating costs in the second half of the year.

“Finally, we continue to execute on our 2023 strategic priorities and our focus for the balance of the year continues to be on margin expansion, reducing our manufacturing and operating costs and improving cash flow. We are excited about the future as demand for our industry leading technology remains high as customers continue to look to Velo3D to manufacture the critical, high value metal parts they need.”

Information about Velo3D’s use of non-GAAP information, including a reconciliation to U.S. GAAP, is provided at the end of this release.

1. Reconciliations to U.S. generally accepted accounting principles (GAAP) financial measures are presented below under “Non-GAAP Financial Information”.
2. Non-GAAP net loss and non-GAAP net loss per diluted share exclude stock-based compensation expense, and fair value adjustments for the Company’s warrants and earnout liabilities in the three months ended June 30, 2023, March 31, 2023 and June 30, 2022.

Summary of Second Quarter 2023 results

Revenue for the second quarter was $25.1 million, an increase of 28% year over year. Compared to the second quarter of 2022, Year of Sale revenue¹ improvement was driven by a higher average selling price due to higher transaction pricing and a more favorable Sapphire XC system product mix. On a sequential basis, Year of Sale revenue declined slightly due to lower transaction pricing and lower maintenance and other part sales. Support service and recurring payment revenue of $1.9 million was in line with the second quarter of 2022 as the increase in support service revenue resulting from a larger installed base was offset by a decrease in recurring payment revenue due to a one-time charge and expiration and buyouts of system leases.