Continued Focus on Realignment Priorities

Company Institutes Additional Cost Reduction Programs

Strategic Review Process Remains Ongoing

• Q2 2024 sales update
  • 2024 year to date bookings of $21 million; >40% of orders from existing customers
  • $17 million in backlog exiting Q2 2024
  • Continued defense sector expansion – >20% of 1H’24 shipments
• Reduced quarterly operating expenses
  • Down 37% year over year
  • Instituted additional cost control programs - ~30% headcount reduction
• Improved year over year operating cash flow in Q2 2024
• Operating and financial conditions remain challenging

FREMONT, Calif. — (BUSINESS WIRE) — August 14, 2024 — Velo3D, Inc. (NYSE: VLD), a leading additive manufacturing technology company for mission-critical metal parts, today announced financial results for its second quarter ended June 30, 2024.

“Our second quarter results reflected continued execution on our strategic priorities as we added to our year-to-date bookings, maintained a healthy backlog and reduced our operating expenses,” said Brad Kreger, CEO of Velo3D. “Specifically, we continued to expand our defense and space sector footprint during the quarter and expect to add to our backlog in these important industries in the second half of the year. We also further executed on our re-alignment efforts as we reduced our quarterly operating costs by 37% year over year and improved our manufacturing and operational efficiency. However, while we have made significant financial and operational progress year to date, we have made the difficult decision to right size the business as we expect industry conditions to remain challenging into the second half of 2024.”

“Our second quarter results also reflected the impact of delays in the funding of certain governmental projects with those system orders now expected in the second half of the year. While we still expect to close these transactions, these delays have negatively impacted our revenue forecast for the balance of the year. As a result, we have instituted a number of material cost reduction programs to reduce expenses and manage our liquidity, including a headcount reduction of approximately 30%. We expect these programs to drive significant annual operating savings and we continue to look at various options to support our balance sheet during our ongoing the strategic review process.”

“Looking forward, we believe the continued focus on our key priorities will position us well to capitalize on the increasing industry demand for leading-edge additive manufacturing solutions,” concluded Kreger.

1. Information about Velo3D’s use of non-GAAP information, including a reconciliation to U.S. GAAP, is provided at the end of this release under “Non-GAAP Financial Information”. The non-GAAP financial measures presented in this release should not be considered as the sole measure of the company’s performance and should not be considered in isolation from, or as a substitute for, comparable financial measures calculated in accordance with generally accepted accounting principles accepted in the United States.
2. Non-GAAP net loss and non-GAAP net loss per diluted share exclude stock-based compensation expense, fair value adjustments for the Company’s warrants, and contingent earnout.

Summary of Second Quarter 2024 Results

Revenue for the second quarter was $10.3 million. System revenue increased compared to the first quarter of 2024, primarily driven by a mix shift to the company’s higher priced Sapphire XC systems. Support services and recurring payment revenue declined sequentially compared to the first quarter of 2024 due to the expiration of certain lease contracts as well as a slight reduction in customers with active field service contracts.

Gross margin for the second quarter was negative 28% and primarily reflected the impact of lower fixed cost absorption as certain systems orders were delayed to the second half of 2024.

GAAP operating expenses for the second quarter were $17.6 million compared to $28.2 million in the second quarter of 2023. Non-GAAP operating expenses, excluding stock-based compensation expense of $3.8 million, was $13.8 million, down 37% compared to the second quarter of 2023.

Net loss for the quarter was $0.2 million and reflected a non-cash gain of $27.1 million on the change in the fair value of warrants and contingent earnout liabilities. Non-GAAP net loss was $21.7 million in the three months ended June 30, 2024. Adjusted EBITDA for the quarter, was negative $15.0 million. For more information regarding the company’s non-GAAP financial measures, see “Non-GAAP Financial Information” below.