10-Q: Velo3D Reports Q2 2026 Results, Faces Going Concern Doubt

Velo3D, Inc. filed its Q2 2026 10-Q, showing significant revenue growth but also substantial operating losses and a continued going concern warning, despite recent capital raises.

Summary

• Velo3D, Inc. reported its financial results for the quarter and six months ended June 30, 2026.
• Total revenue increased by 52.3% to $20.7 million for the three months ended June 30, 2026, compared to $13.6 million in the prior year period.
• For the six months ended June 30, 2026, total revenue increased by 50.6% to $34.5 million, up from $22.9 million in the prior year period.
• Despite revenue growth, the company reported a net loss of $11.5 million for the three months ended June 30, 2026, and $18.5 million for the six months ended June 30, 2026.
• The company's cash and cash equivalents stood at $91.1 million as of June 30, 2026.
• Management continues to express substantial doubt about the company's ability to continue as a going concern, requiring additional financing.
• Significant equity financings, including a registered direct offering and ATM program, occurred during the period, raising substantial capital.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as having a negative sentiment due to the continued substantial operating losses, negative cash flows, and the explicit statement of substantial doubt regarding the company's ability to continue as a going concern, despite recent financing activities.

Positives

• Total revenue increased by 52.3% to $20.7 million for the three months ended June 30, 2026, compared to $13.6 million in the prior year period.
• Total revenue for the six months ended June 30, 2026, increased by 50.6% to $34.5 million, up from $22.9 million in the prior year period.
• Gross profit improved significantly to $4.4 million for the three months ended June 30, 2026, compared to a loss of $1.6 million in the prior year period.
• Gross margin improved to 21.5% for the three months ended June 30, 2026, from -11.7% in the prior year period.
• The company raised substantial capital through a registered direct offering ($50 million gross) and an At-the-Market (ATM) equity program ($59.4 million net proceeds as of June 30, 2026).
• Debt was significantly reduced through conversions and repayments, with outstanding debt solely consisting of the 2025 Equipment Loan ($8.2 million as of June 30, 2026).
• Backlog for firm orders stood at $31 million as of June 30, 2026.

Negatives

• The company reported a net loss of $11.5 million for the three months ended June 30, 2026, and $18.5 million for the six months ended June 30, 2026.
• Operating expenses increased significantly, with R&D up 67.3% and Selling & Marketing up 94.1% for the three months ended June 30, 2026.
• General and administrative expenses increased by 39.9% to $8.3 million for the three months ended June 30, 2026.
• Management continues to express substantial doubt about the company's ability to continue as a going concern, indicating a need for further financing.
• Despite significant capital raises, the company expects to require additional financing to fund operations and satisfy obligations.
• Customer concentration remains a risk, with the top three customers accounting for 45.9% of revenue in Q2 2026.
• Material weaknesses in internal control over financial reporting persist, including issues with control environment, inventory, contract assets/liabilities, and financial statement preparation.

Risks

• Substantial doubt exists regarding the company's ability to continue as a going concern, necessitating additional financing.
• The company's ability to secure future financing on acceptable terms is uncertain.
• If additional financing is not obtained, the company may be required to significantly reduce or discontinue operations, sell assets, or restructure obligations.
• Customer concentration poses a risk, as operating results depend on sales to a small group of customers.
• The company faces risks related to macroeconomic conditions, including inflation, interest rates, and geopolitical events, which can impact order timing and supply chains.
• The new Livermore production campus (Forge 1) requires significant capital investment and faces risks of delays, cost overruns, and failure to achieve anticipated production capacity.
• Potential for increasing component costs from suppliers due to international tariffs and the company's current financial situation.

Future Outlook

Management expects revenue to increase in the future due to demand for its printer systems and RPS offerings. Recurring payment revenue is expected to decrease as the focus shifts to system sales and RPS. Support services revenue is expected to increase with the growing installed base. Research and development costs are expected to increase to support a refreshed technology roadmap and enhance AM solutions. Selling and marketing expenses are also expected to increase to support commercial expansion and market participation. General and administrative expenses are expected to increase to support business growth, but the company aims to manage operating costs through efficiency initiatives.

Management Comments

• Management expects the Company will require additional financing to fund operations and satisfy its obligations throughout the assessment period due to continued operating losses, negative operating cash flows, and ongoing working capital requirements.
• Management concluded that substantial doubt about the Company's ability to continue as a going concern continues to exist within one year after the date these unaudited condensed consolidated interim financial statements are issued.
• We expect manufacturing costs to improve as a percentage of revenue as a result of overhead and fixed cost reduction initiatives implemented in late 2025 and increased production volumes leading to economies of scale.
• We expect to accelerate production cycle times and further improve efficiencies on the production floor, which we expect will continue to improve gross profit and gross margin during the second half of 2026.
• We expect general and administrative expenses to increase as we expand our business. However, we also continue to focus on our company-wide initiatives to reduce operating costs in other areas for 2026 as we reduce our general and administrative expenses through reducing our reliance on outside consultants, managing facility costs and negotiating with vendors for improved pricing and enterprise level efficiency improvements.

Industry Context

StockSavvy.ai notes that Velo3D operates in the highly competitive metal additive manufacturing sector. The company's proprietary L-PBF technology aims to differentiate itself by enabling complex, high-value metal parts with reduced need for redesign. The industry is characterized by rapid technological advancement and increasing adoption across aerospace, defense, and automotive sectors, where Velo3D is targeting growth.

Comparison to Industry Standards

• Velo3D's revenue growth of 52.3% in Q2 2026 and 50.6% year-to-date is strong, but the company's gross margin of 21.5% in Q2 2026, while improved, may still be lower than established players in certain segments of the industrial manufacturing sector who benefit from greater economies of scale.
• The company's significant operating losses and ongoing need for financing are common among growth-stage AM companies, but Velo3D's explicit going concern warning highlights a more acute liquidity challenge compared to some competitors who may have stronger balance sheets or more established profitability.
• The company's focus on high-value, complex metal parts aligns with industry trends towards advanced manufacturing for critical applications, but competition from established players like GE Additive, EOS, and SLM Solutions, as well as emerging technologies, remains intense.

Legal Proceedings

• The company may be involved in various lawsuits, claims, and proceedings, including intellectual property, commercial, securities, and employment matters that arise in the normal course of business.
• As of June 30, 2026, the Company is not aware of any litigation, claim or assessment in which the outcome, individually or in the aggregate, would have a material adverse effect on its consolidated financial positions, results of operations, cash flows or future earnings.

Related Party Transactions

• On March 4, 2026, the Company issued 394,517 shares of common stock to Arrayed Notes Acquisition Corp. (controlled by Arun Jeldi, CEO) upon conversion of the January Note, in the principal amount of $5,000,000, together with accrued and unpaid interest.
• On March 4, 2026, the Company issued 1,145,830 shares of common stock to Thieneman Construction, Inc. upon conversion of the February Note, in the principal amount of $10,000,000, together with accrued and unpaid interest.

Stakeholder Impact

• Shareholders face continued dilution risk due to ongoing equity financings and the potential for further capital raises.
• The going concern warning suggests a heightened risk for investors regarding the company's long-term viability.
• Employees may face uncertainty due to the company's financial condition and potential need to reduce operations.
• Suppliers may face challenges due to the company's current financial situation, potentially impacting credit terms and payment schedules.

Next Steps

• Continue pursuing additional sources of capital, including equity and debt financings, and other strategic financing alternatives.
• Focus on ensuring customer success, improving system reliability, and developing new customer networks.
• Expand RPS for printed parts and scale production at the new Livermore facility.
• Continue to focus on reducing material costs through improved purchasing and inventory planning, accelerating production cycle times, and improving efficiencies.
• Implement ongoing measures to remediate material weaknesses in internal control over financial reporting.

Key Dates

Recommendation

While Velo3D shows strong revenue growth and has successfully raised significant capital, the persistent operating losses and explicit going concern warning present substantial risks. The company's ability to execute its expansion plans and secure further funding is critical. For now, a 'hold' recommendation reflects the balance between potential upside from its technology and the significant financial uncertainties.

Keywords

additive manufacturing, 3D printing, metal 3D printers, Sapphire XC, RPS, financial statements, going concern, capital raise