Velo3D announces plans to reduce workforce due to delays in government funding
August 23, 2024
Velo3D, based in Fremont, California, USA, has reported plans to reduce its workforce by around 30%, citing delays in the funding of certain governmental projects that have negatively impacted its revenue forecast. The announcement came in the company’s financial results for the second quarter 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,” sstated Brad Kreger, CEO of Velo3D. “Specifically, we continued to expand our defence 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 capitalise on the increasing industry demand for leading-edge Additive Manufacturing solutions,” concluded Kreger.
System revenue increased compared to the first quarter of 2024. This was reportedly primarily driven by a 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 and a reduction in customers with active field service contracts.
The company announced 2024 year-to-date bookings of $21 million, with $17 million in backlog exiting Q2 2024.
Gross margin for the second quarter was negative 28% and reportedly 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 million.
Second quarter cash flow, excluding financing activities, was in line with the company’s forecast and improved more than 70% on a year over year basis. The company ended the quarter with $3 million in cash and cash equivalents.
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