Velo3D Inc (VLD) Navigates Strategic Realignment Amidst Challenging Conditions
Revenue: Q4 revenue of $1.8 million, a significant decrease from Q3's $23.8 million and Q4 2022's $29.8 million.
Net Loss: GAAP net loss of $58.2 million in Q4, compared to a net income of $22.6 million in Q4 2022.
Gross Margin: Negative gross margin of over 100% in Q4, a decline from 6.3% in Q3 2023 and 5.9% in Q4 2022.
Operating Expenses: Reduced by over 15% sequentially in Q4, excluding one-time charges.
Cash Position: Ended the quarter with $31 million in cash and investments.
Bookings: As of March 26, 2024, total bookings of $15 million since mid-December 2023; over 50% from existing customers.
Free Cash Flow: Improved by 35% year over year, with the company aiming for cash flow breakeven in the second half of FY 2024.
On March 26, 2024, Velo3D Inc (NYSE:VLD), a leader in additive manufacturing technology for mission-critical metal parts, released its 8-K filing, reporting its financial results for the fourth quarter and fiscal year ended December 31, 2023. The company, known for its comprehensive metal additive manufacturing solution, has faced a challenging period, marked by a significant reduction in system shipments and a strategic realignment of business priorities.
Velo3D Inc's CEO, Brad Kreger, highlighted the transformational year, emphasizing the company's shift from driving revenue growth to focusing on customer success, system reliability, and cost reduction. The strategic realignment appears to be yielding positive results, with a notable reduction in operating expenses and improvements in operational efficiency.
Financial Performance and Strategic Initiatives
The company's revenue for the fourth quarter stood at $1.8 million, a stark contrast to the $23.8 million in the third quarter of 2023 and $29.8 million in the fourth quarter of 2022. The negative gross margin of over 100% reflects the reduced system volume and costs associated with the company's strategic realignment. However, Velo3D Inc has been successful in reducing its quarterly operating expenses by more than 15%, excluding one-time charges, and expects a further reduction of over 30% from Q3 2023 through the end of Q1 2024 in non-GAAP operating expenses.
The company's net loss for the quarter was significant at $58.2 million, which included a gain on the fair value of warrants and other liabilities, as well as a loss on the extinguishment of debt. The non-GAAP net loss, which excludes these items among others, was $61.1 million. Despite these losses, Velo3D Inc has made progress in free cash flow, improving by 35% year over year and positioning itself to potentially achieve cash flow breakeven in the second half of FY 2024.
Outlook and Future Expectations
Looking ahead, Velo3D Inc anticipates sequential improvement in revenue, gross margin, and operating expenses on a quarterly basis in 2024. The company's guidance for fiscal year 2024 includes revenue in the range of $80 million to $95 million and gross margin in the range of 20% to 30%, with the fourth quarter gross margin expected to be approximately 30%, excluding non-recurring charges related to cost reduction initiatives.
The company's strategic review is ongoing, with the Board of Directors in discussions with multiple parties to maximize stockholder value. Velo3D Inc has also expanded its installed base by adding 12 new customers in 2023, including three new defense customers, which is a testament to the company's innovative technology and its potential in the defense sector, especially with the recent Department of Defense funding approval.
Investors and stakeholders will be watching closely to see if Velo3D Inc's strategic realignment and focus on cost reduction, customer satisfaction, and operational efficiency will lead to improved financial performance and a return to profitability in the future.
For more detailed information, interested parties can access the full earnings release and join the company's conference call discussion via the Investor Relations section of Velo3Ds website at ir.velo3d.com.
Velo3D Inc remains committed to leveraging its advanced additive manufacturing solutions to meet the growing industry demand and continue its journey towards financial stability and success.
Explore the complete 8-K earnings release (here) from Velo3D Inc for further details.
This article first appeared on GuruFocus.
