Velo3D, Inc., a leading additive manufacturing technology company for mission-critical metal parts, announced financial results for its fourth quarter and fiscal year ended December 31, 2022.
“We exited the year with a strong fourth quarter performance as we exceeded our revenue forecast, added to our diversified customer base and maintained our technology leadership with the continued, successful ramp up of our Sapphire XC system,” said Benny Buller, CEO of Velo3D. “Overall, 2022 was another important and successful year for Velo3D. Despite a number of challenges, we were able to triple our annual revenue and demonstrate our commitment to innovation by further expanding our range of industry leading products. This success reflects strong execution as well as our ability to capitalize on customer’s increasing deployment of additive manufacturing solutions to produce the high value metal parts they need.”
“Specifically, we continue to see strong demand for our Sapphire family of printers as we shipped a record number of Sapphire XC systems during the quarter and commenced initial volume shipments of our next generation Sapphire XC 1MZ product. We also expanded our installed base with annual new customer growth in excess of 50% for the year. Finally, we booked $15 million in new orders in the fourth quarter and our backlog now totals $43 million. This provides significant revenue visibility for the first half of this year and positions us well to achieve 2023 revenue growth of more than 50%.”
“Looking forward, we remain very excited about the future given the significant market opportunity and the increasing adoption of our industry leading technology. We are confident that we have a clear path to profitability and our key initiatives for 2023 reflect this focus. These initiatives include programs for continued gross margin improvement, a 20% reduction in quarterly non-GAAP operating expenses by the end of 2023 as well as the benefits from the further execution of our previously announced supply chain and manufacturing efficiency improvements. Given our positive momentum coming into this year and the further ramp up of our new products, we believe we are well positioned to capitalize on the rapidly expanding market for mission critical, high value metal parts,” concluded Buller.
|
($ in Millions, except percentages and per-share data) |
4th Quarter |
3rd Quarter |
4th Quarter |
FY2022 |
FY2021 |
|
GAAP revenue |
$29.8 |
$19.1 |
$10.4 |
$80.8 |
$27.4 |
|
GAAP gross margin |
5.9% |
(0.6%) |
16.2% |
3.6% |
18.1% |
|
GAAP net income (loss)1 |
$22.6 |
($75.2) |
($14.4) |
$10.0 |
($107.1) |
|
GAAP net income (loss) per diluted share |
$0.11 |
($0.41) |
($0.08) |
$0.05 |
($1.82) |
|
Non-GAAP net loss2 |
($16.4) |
($22.5) |
($17.5) |
($83.0) |
($51.9) |
|
Non-GAAP net loss per diluted share2 |
($0.08) |
($0.12) |
($0.10) |
($0.41) |
($0.88) |
|
Cash and Investments |
$80 |
$113 |
$223 |
$80 |
$223 |
Information about Velo3D’s use of non-GAAP information, including a reconciliation to U.S. GAAP, is provided at the end of this release.
- Reconciliations to U.S. generally accepted accounting principles (GAAP) financial measures are presented below under “Non-GAAP Financial Information”.
- 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 and years ended December 31, 2022 and 2021, and transaction costs related to the JAWS Spitfire merger transaction and charge related to the loss on fair value on the convertible note modification in conjunction with the merger transaction for the three months and year ended December 31, 2021.
Summary of Fourth Quarter 2022 results
Revenue for the fourth quarter was $30 million, an increase of 56% compared to the third quarter of 2022. For fiscal year 2022, revenue rose 194% to $81 million compared to fiscal year 2021. Sequential Year of Sale revenue1 improvement was driven by an increase in system volume, a higher average selling price due to a more favorable transaction mix resulting from record Sapphire XC shipments and an increase in deferred payment transactions compared to the third quarter of 2022. On a year over year basis, revenue growth reflected higher annual system sales, specifically a significant increase in the sales of the company’s Sapphire XC system compared to fiscal year 2021, as well as the growth in support service and recurring payment revenue resulting from an increase in the company’s installed base.
Gross margin for the fourth quarter was 5.9%, up sequentially, as the company benefited from higher average selling prices, a reduced number of shipments of Sapphire XC systems at launch customer pricing compared to the third quarter of 2022 and lower service and recurring revenue costs. The company completed its final shipment under its launch customer pricing contract during the fourth quarter. Labor and overhead costs for the fourth quarter were in line with forecasts and the company expects further improvement in its material costs through the first half of 2023.
Operating expenses for the fourth quarter declined 15% to $23.7 million. The decline was driven by $3.4 million of non-recurring expense reductions, primarily in research and development. Research and development costs also declined due to the completion of major development projects and improved expense control. General and administrative costs were in line with the third quarter while sales and marketing expenses rose slightly. Non-GAAP operating expenses, which excludes, among other items, stock-based compensation expense of $5.1 million, was $18.6 million in the three months ended December 31, 2022.
Net income for the quarter was $22.6 million and reflected a gain of $44.1 million on the fair value of warrants and contingent earnout liabilities. Non-GAAP net loss, which excludes, among other items, the gain on fair value of warrants and contingent earnout liabilities as well as stock-based compensation expense, was $16.4 million in the three months ended December 31, 2022. Adjusted EBITDA for the quarter, excluding the same metrics, was a loss of $14.4 million. For more information regarding the company’s non-GAAP financial measures, see “Non-GAAP Financial Information” below.
The company ended the quarter with a strong balance sheet with $80 million in cash and investments. As a result, the company believes given its current liquidity and its recently established “at-the-market” equity offering program, it has the liquidity to fund its operations including its technology investments and growth plans.
Guidance
Given strong demand trends, current backlog and fourth quarter bookings, the company is confident in achieving its 2023 financial forecasts.
For the first quarter of 2023, the company expects the following:
- Revenue in the range of $25 million to $28 million
- Gross margin in the range of 9% to 11%, assuming no impact from potential non-recurring charges
For the fiscal year 2023, the company expects the following:
- Revenue in the range of $120 million to $130 million
- Gross margin in the range of 19% to 21%, assuming no impact from potential non-recurring charges – with gross margin of approximately 30% in the fourth quarter of 2023
The company will host a conference call for investors this afternoon to discuss its fourth quarter and fiscal year 2022 performance at 2:00 p.m. Pacific Time. The call will be webcast and can be accessed from the Events page of the Investor Relations section of Velo3D’s website at https://ir.velo3d.com/.
