Velo3D delivered the kind of top-line growth that would usually anchor a constructive quarter, but the more consequential news sat in the guidance table. The metal additive manufacturer posted a non-GAAP loss of $0.34 per share on revenue of $20.45 million for the September quarter. Earnings improved 50.7% year over year from a $0.54 loss, and revenue grew 49.9%. No consensus estimate was available to frame a surprise. Management also abandoned the two profitability targets it had defended all year: a greater-than-30% gross margin in the second half of 2026 and positive EBITDA in the same period. EBITDA breakeven is now expected in 2028. That is the central tension. Demand indicators improved, but the timeline for turning that demand into profits slipped by roughly 18 months.
The quality of the headline improvement deserves scrutiny. The narrower per-share loss owes much to dilution, with basic share count nearly doubling to 32.2 million from 17.1 million a year ago. In dollar terms, the non-GAAP net loss widened to $10.8 million from $9.3 million, and the GAAP loss grew to $16.7 million from $11.2 million. Gross margin of 26.5% compares with 3.2% a year earlier and 21.5% in the second quarter. The release, however, attributes part of the gain to a net release of excess and obsolete inventory reserves and to a second-quarter reallocation of labor and overhead from cost of revenue into operating expenses. The company also revised its first- and second-quarter statements to correct errors in that same inventory reserve. Taken together, those adjustments make the underlying margin trajectory harder to read than the headline suggests.
Cost growth is the other problem. GAAP operating expenses more than doubled to $22.7 million. General and administrative expense jumped to $14.1 million from $5.9 million, and stock-based compensation rose to $5.9 million from $1.9 million. Adjusted EBITDA deteriorated to -$9.8 million from -$8.1 million in the second quarter and -$3.6 million in the first, moving in the wrong direction for a company that had been guiding to breakeven within months.
The demand story held up better. Bookings of $28.9 million implied a book-to-bill of roughly 1.4x, and backlog climbed to $40.1 million from about $31 million, where it had hovered for three quarters. Mears Machine ordered a sixth Sapphire XC system dedicated to copper-nickel printing for marine applications. The CEO said defense programs are ramping faster, and two 2027 product launches are planned: a removable build module and production-automation software. Revenue, however, was flat sequentially at $20.5 million versus $20.7 million, despite second-quarter commentary pointing to a quarter-over-quarter ramp. Nine-month revenue already totals $54.9 million, so the reaffirmed $65-$75 million full-year range implies fourth-quarter revenue below the third quarter at the midpoint. Investors should treat "reaffirmed" with that context in mind, particularly because the range was raised on the prior call. Management's tone also cooled noticeably, moving from second-quarter language about demand superseding capacity to more cautious, disciplined framing.
The balance sheet has improved, and that matters. Debt fell 76% to $7.4 million, cash stands at $75.7 million, and management removed the going-concern doubt. That progress was funded by roughly $109 million in gross equity raises this year, and cash still declined from $91.1 million at the end of June. Capex guidance was cut to $10-$20 million from $40-$50 million, but most of that spending moves into 2027. The roughly 40 printers planned for next year, an estimated $60-$70 million investment, raise legitimate questions about further capital needs. A sharp rise in contract assets to $16.3 million also signals revenue recognized ahead of billing. Add the CFO's departure and an interim replacement, and bears have ample ammunition.
The market had largely priced in disappointment before the release. Shares closed at $6.23 the day before the report, down 63.5% from the $17.05 open following the August report and 52.3% below the 200-day moving average of $13.06. The stock peaked at $17.61 the morning after the second-quarter report and fell to an inter-earnings low of $4.71 on November 5, so it entered the print modestly off its lows but deep in the bottom of its range. Investor sentiment swung decisively from modestly positive (0.20) to negative (-0.25), a meaningful reversal in expectations. Shorter-term momentum readings have turned positive, while AVWAP remains negative.
The bottom line is that Velo3D now has more customer demand and a sturdier balance sheet than it did a quarter ago, but less credibility on profitability. Rising bookings and backlog support the growth thesis. The withdrawn margin and EBITDA targets, flat sequential revenue, surging operating costs, and a deferred-but-unfunded 2027 capex program shift the burden of proof firmly onto execution at Forge 1.