Please stand by. The conference will be starting soon. and many more. Thank you for watching. Thank you for watching. Greetings and welcome to the Velo3D third quarter 2026 financial results. At this time, all participants are in a listen-only mode. Any question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I'll now turn the conference over to James Carbonaro, Investor Relations. Thank you, James. You may begin.

Thank you, operator. Good afternoon, everyone, and welcome to Velo3D's third quarter 2026 earnings call. Before we begin, please note that today's call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Please refer to our press release issued earlier today as well as our filings with the SEC, including our Form 10-K, for discussion of these risks. We will also reference certain non-GAAP financial measures during the call. Reconciliations between GAAP and non-GAAP results can be found in today's press release, which is available on the Investor Relations section of our website. A replay of this call will also be available shortly after its conclusion. With that, I will turn the call over to our CEO, Arun Jeldi.

Good afternoon, everyone, and thank you for joining Velo3D's third quarter 2026 earnings call. The third quarter represented another important period of execution for Velo3D. As we continue building on the momentum established throughout the year, We delivered strong year-over-year revenue growth, generated bookings that exceeds quarterly revenue, and made further progress in preparing our manufacturing infrastructure to support the next phase of our growth. At the same time, we continued investing in the people, technology, and operational capabilities necessary to scale our business. and serve an expanding base of customers across aerospace, defense, space, energy and other strategically important industrial markets. Our financial performance during the quarter reflected continued demand for our metal additive manufacturing technology. Revenues increased 50% year over year to $20.5 million. while new bookings reached $28.9 million, exceeding revenue for the quarter. We believe these results reflect the growing adoption of Velo3D's differentiated manufacturing platform and the continued transition of additive manufacturing from specialized applications and qualifications program toward broader production deployments. Bookings exceeding revenue is an encouraging indicator of demand, although the timing of converting bookings into revenue will continue to depend on customer requirements, production schedules, and system delivery timings. Our focus remains on converting this demand into consistent execution, strengthening customer relationships, and building a business that can support larger and more complex production programs over time. From a gross margin standpoint, we made progress during the quarter. Gross margin increased to 26.5% compared with 3.2% in the prior year period. This improvement reflected higher average selling prices, a more favorable product mix, increased production volumes, improved manufacturing efficiencies, and better absorption of fixed manufacturing costs. Results also benefited from adjustments to our excess and obsolete inventory reserve attributable to the current period, as well as the cost allocation changes implemented during the second quarter. Operating expenses increased compared with the prior year period as we continued investing in the capabilities required to support our next phase of growth. The largest portion of this increase reflected continued investment in our Livermore production campus as we prepare the facility for expanded production. These investments are an important part of our strategy to significantly increase manufacturing capacity and position Velo3D to support larger production programs and growing customer demand. We also continued investing in our technology platform, manufacturing readiness and operational capabilities to support We recognize the importance of balancing these investments with financial discipline and we remain focused on aligning our spending and capital allocation with our expected growth opportunities and long-term operating objectives. Our liquidity position remains an important foundation for executing this strategy. We entered the quarter with $75.7 million in cash and cash equivalents, compared with $39 million at the end of 2025. We have also substantially reduced our outstanding debt, which stood at $7.4 million at September 30th. Our improved balance sheet provides additional flexibility as we continue investing in manufacturing infrastructure Technology Development, and the operational capabilities needed to support our customers. As a result, our strengthened liquidity position, successfully financing activities, and substantial debt protection, we have determined that there is no longer substantial doubt regarding our ability to continue as a going concern, making an important milestone in stabilizing our financial foundation. At the same time, we're taking a disciplined approach to capital deployment. We now expect a substantial portion of the capital expenditures originally planned for 2026 to shift into 2027 as certain investments associated with our expansion are timed to align with our manufacturing ramp. The adjustment reflects a change in timing of these investments within our expansion plan rather than a change in our long-term commitment to expanding production capabilities. One of the most significant elements of our strategy remains our Livermore Production Campus, Forge One, which we opened in July, 2026. The campus has commenced operations in phases and is not yet operating at scale. As we have discussed previously, Forge One is expected to significantly expand Velo3D's manufacturing production capacity as it is brought to full operation. And we expect it to serve as our primary production and manufacturing center. We're continuing to bring the campus to full operation with the objective of establishing a more scalable, efficient, and integrated production environment capable of supporting Demand from aerospace, defense, space, and energy customers. Livermore represents much more than an expansion of our physical manufacturing footprint. It is a foundational investment in the evolution of Velo3D into a digital manufacturing company. By consolidating production activities within a highly capable manufacturing environment, we expect to improve process consistency, and then quality control and increased production web visibility. Every production build also tells us a great deal about how our own systems perform machine reliability, uptime and process stability. As production volumes increase at Forge One, we believe applying what we learn about our own equipment and processes can help us improve system performance Shorten qualification timelines and strengthen our software consistent with our customer agreements and the confidentiality our customers expect of these programs. Our long-term vision is to connect digital design, manufacturing software, machine performance, and production intelligence into an integrated platform that enables customers to manufacture complex mission-critical components We believe this approach can help reduce traditional manufacturing constraints, improve supply chain flexibility, and enable customers to move more quickly from design and qualification into production. Livermore is an important step towards realizing that vision while building the capacity and operating foundation needed to support our growth. We also continued expanding the capabilities of our distributed manufacturing network through our strategic partnership with Mears Machine Corporation. During the quarter, Mears ordered its sixth Sapphire XC system, dedicated to copper nickel additive manufacturing. This investment expands our production platform into a material system that is important for shipbuilding and offshore applications, where corrosion resistance and component performance are critical. We believe this expansion demonstrates the versatility of our technology and the opportunity to apply our manufacturing capabilities across a broader range of strategically important markets. Copernical components can support demanding marine and offshore environments, and domestic production capabilities can contribute to stronger supply chain resilience for these applications. A partnership with Mears continues to demonstrate how qualified manufacturing partners can extend the reach of our technology while helping customers access advanced production capabilities. Beyond our commercial partnerships, we continued strengthening our position within the defense manufacturing ecosystem. Through our participation in the Government Industry Data Exchange Program, or GIDP, access to critical, technically, Technical, quality, and reliability information supports risk management and health- Okay, I'm making a turn around. Okay, I'm looking. Serving U.S. defense programs. We believe participation in this program complements our focus on manufacturing quality, reliability, and execution as customers increasingly evaluate additive manufacturing for mission-critical applications. These capabilities are particularly important as defense and aerospace customers place greater emphasis on domestic manufacturing, supply chain security, component availability, and the ability to produce complex parts with consistent quality. Our technology is designed to address many of the manufacturing challenges associated with complex geometries and demanding performance requirements. By combining our differentiated printing capabilities with improved production infrastructure and disciplined quality process, we believe Velo3D is well positioned to pursue opportunities as these industries expand their use of advanced manufacturing. We also strengthened our technology and operational leadership during the quarter with the appointments of Vic Fryzel as Executive Vice President of Technology and Robert Purnell as Senior Director of Operations. These appointments reflect our continued focus on improved platform reliability, manufacturing readiness, quality, and delivery performance as we prepare Forge One for expanded production. As we scale our business, execution becomes increasingly important. Our ability to deliver consistently, maintain high quality standards, support customer qualification requirements, and manage Production schedules will be central to converting customer demand into sustainable growth. Strengthening our technology and operations leadership will help us build organizational capabilities necessary to meet these requirements and support our rapid production solutions offering. In 2027, we plan to introduce two products designed to increase productivity and reduce costs. The first is a removable build module that allows printers to return to production within hours instead of days, which we expect to increase output per printer without adding machines on the floor space. While reducing downtime, labor costs, and material waste, the second is a software platform designed to improve build success, simplify manufacturing, and automate production. Together, these are intended to increase production capacity and create opportunities to grow our rapid production solutions revenues through higher parts for output. Looking more broadly at our commercial pipeline, we continue to see opportunities across aerospace, defense, space, energy, and other industrial markets. Customers are increasingly evaluating additive manufacturing, not only for prototyping and specialized components. but also for production applications where design flexibility. Part consolidation, supply chain resilience, and manufacturing performance can provide meaningful advantages. We believe this transition creates substantial long-term opportunities for Velo3D. Our platform is designed to address applications where conventional manufacturing methods can impose limitations on component geometry Development Timelines, or Production Flexibilities. As customers seek to modernize their manufacturing operations and strengthen their domestic supply chains, we believe our combination of technology, production capabilities, and growing manufacturing infrastructure can help address these needs. From a financial outlook perspective, we are reaffirming our full year 2025 revenue guidance of $65 million to $75 million. and our non-GAAP adjusted operating expense guidance of $45 million to $55 million. We are revising our gross margin guidance and now expect sequential improvement in gross margin in fourth quarter of 2026, compared with our prior expectation of greater than 30% gross margin in the second half of 2026. We are updating our expected capital expenditure range to $10 million to $20 million, compared with our previous range of $40 million to $50 million, primarily reflecting the shift of a substantial portion of planned capital expenditures into 2027. As we look beyond 2026, we now expect our investments in production infrastructure, technology, and operation execution to position Velo3D to achieve EBITDA and positive net cash provided by operating activities in 2028, devised from our prior expectation of positive EBITDA in the second half of 2026. Reaching that objective requires continued revenue growth, improved underlying manufacturing margins, disciplined expense management and effective utilization of expanded production capabilities. We recognize that achieving sustainable profitability requires consistent execution across each of these areas, and they remain central to our operating priorities. Overall, the third quarter represented another meaningful step forward in Velo3D's evolution. We delivered strong year-over-year revenue growth, generated bookings in excess of quarterly revenue, expanded gross margin compared with the prior year period, and maintained a strong balance sheet. The opportunities ahead is significant. We are committed to investing with discipline, scaling in line with customer demand, and building a business capable of delivering sustainable growth and improving profitability over time. Thank you to our employees, customers, and manufacturing partners and shareholders for your continued support. We appreciate the dedication of our team as we continue advancing Velo3D's mission to transform the way complex mission-critical components are designed and manufactured. With that, I'll turn the call over to our interim CFO, Terence Wynn, who will walk through our third quarter financial performance in greater detail.

Thanks, Arun, and good afternoon, everyone. We delivered solid results in the third quarter, continuing to demonstrate strong revenue growth and meaningful improvement in gross margins compared with the prior year period. We also generated $28.9 million in new bookings, exceeding quarterly revenue while continuing to invest in our manufacturing infrastructure and the capabilities required to support our next phase of growth. At the same time, we ended the quarter with $75.7 million in cash and cash equivalents and reduced our outstanding debt by approximately 76% since year end as we continue to bring our Livermore Production Campus to full operation. Third quarter 2026 revenue was $20.5 million, up 50% compared to $13.6 million in the year-ago quarter. Revenue from 3D printers and parts was $18.8 million, an increase of 57% compared to $12 million in the third quarter of 2025. The increase was driven by a higher number of 3D printer systems sold, higher average selling prices and product mix, as well as an increase in rapid production solutions, or RPS, revenue resulting from higher production volumes. We are encouraged by the continued strength in revenue across our business. Our results reflect ongoing demand for our systems and production capabilities, as well as progress in expanding our RPS offerings. We believe the combination of system sales and production-related revenue provides a foundation for continued growth as customers increasingly adopt metal additive manufacturing for more demanding applications. Gross margin for the third quarter was 26.5% compared to 3.2% in the year-ago quarter. The improvement reflected higher average selling prices, a more favorable product mix, improved manufacturing efficiencies and increased production volumes that improved the absorption of fixed manufacturing costs. Results also benefited from adjustments to our excess and obsolete inventory reserve attributable to the current period, as well as the changes implemented in the second quarter to the allocation of certain labor and overhead costs between cost of revenue and operating expenses. Looking forward, We believe continued improvements in manufacturing utilization, production efficiencies, product mix, and the scaling of RPS will support gross margin performance. Operating expenses for the third quarter were $22.7 million compared to $10.4 million in the third quarter of 2025. The increase primarily reflects our continued investment in the Livermore Production Campus as we prepare the facility for expanded production along with investments in technology, manufacturing readiness, and the operational capabilities required to support our growth strategy. On a non-GAAP basis, excluding stock-based compensation recorded in operating expenses of $5.7 million, adjusted operating expenses were $17 million compared to $9.1 million in the prior year quarter. Gap net loss for the third quarter was $16.7 million, or $0.52 per basic and diluted share, compared to a net loss of $11.2 million, or $0.65 per basic and diluted share, in the year-ago quarter. The increase in net loss reflects, in part, the higher operating expenses associated with our continued investments in the business. Non-gap net loss for the third quarter was $10.8 million, compared to a non-GAAP net loss of $9.3 million in the third quarter of 2025. These non-GAAP results exclude stock-based compensation and other specified items as detailed in our earnings release. Non-GAAP adjusted EBITDA for the third quarter was a negative $9.8 million compared to negative $7.3 million in the third quarter of 2025. As we continue investing in our production infrastructure and operational capabilities, our focus remains on balancing these investments with revenue growth, improved gross margins, and disciplined expense management. These efforts are important as we work towards our objective of achieving positive EBITDA and positive net cash provided by operating activities in 2028. Turning to bookings and backlog, We generated $28.9 million in new bookings during the third quarter and ended the period with a backlog of $40.1 million. Moving on to the balance sheet, we ended the third quarter with $75.7 million in cash and cash equivalents compared to $39 million at the end of 2025. Our cash position reflects the financing activities completed earlier in the year. Partially offset by cash used to fund our operations and investments in the business. At September 30th, 2026, total outstanding debt was $7.4 million compared to $31 million at the end of 2025. The combination of our cash position and reduced debt provides additional flexibility as we continue executing our strategic priorities. Overall, the third quarter reflected continued progress across the business. We delivered strong year-over-year revenue growth, improved gross margin compared with the prior year period, generated bookings in excess of revenue and strengthened our balance sheet. We also continued investing in the manufacturing infrastructure and operational capabilities needed to support our long-term growth strategy. With that, I'll turn the call back over to Arun.

Thank you, Terry. We are encouraged by the continued demand for our technology. The growth in our business and the progress we are making in strengthening our manufacturing capabilities, we believe Velo3D is well positioned to capitalize on the growing adoption of metal additive manufacturing. And our priorities remain clear. Execute with discipline, strengthen customer relationships and partnerships, Scale our production capabilities and build a business that delivers sustainable long-term growth and profitability. Thank you.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

One moment, please, while we poll for questions.

Thank you. Our first question comes from the line of Greg Palm with Craig Hallam Capital Group. Please proceed.

Hi, this is Jackson Trader on for Greg Palm. I appreciate you taking the questions. I want to start out with a reiterated revenue guidance. It implies kind of a pretty wide Q4 range. Can you talk a little bit about what might drive you to the top versus the low end of that? And then also just midpointing and being sequentially down. So is there any seasonality that we need to know about or anything that's driving that as well? Thank you.

So the sequential growth on, like, you're talking about specifically for revenue? Yep, on revenue. Revenue range, yeah. So I think we're almost three quarters of the guidance, and the revenue for the fourth quarter seems to be promising to achieve our guidance. So we're super confident about actually achieving the guidance.

Okay, and is there anything that would be driving the sequential possible step down? Or is that just work seasonality that would affect that?

So one of the main things is the growing demand on various sectors and fast-forwarding some of the production timelines, what the customers want. and the other part is the sequential growth of the gross margin is, well, controlling our BOM cost and increasing the sale cost of the machine and increasing the gross margin levels at that point. So we just want to have that sequential growth and continue to growth, not just stop at 30%. That continues to be much better in 27, 28 and beyond. Okay.

And with the CapEx guidance being pushed out a little bit, can you talk about, I believe last quarter, the original expectations were kind of for 35 to 40 operational days or printers by the end of the year and then like another 40 next year, I believe, exiting the year. Can you kind of talk about what the outlook is for the install base for printers as that relates to this CapEx being pushed out?

In some ways, what we mentioned for 26 is accurate. for 27 is also 40 machines, that's what we're building. The most of the CapEx is pushed on the base timeline of the payments of those. It doesn't mean that we are actually slowing down on any of the, I mean, facilitation. Livermore are getting manufacturing done in first quarter. So it didn't, so there is a timeline gap of how the payments go and so the capital expenditure went down. it will probably pick up in 27 and we because it's a two and a half year project so there's a deviation of moving the capex year after year based on the payment terms and everything so we expected higher than what is needed on the capex side so we're glad that we're not spending that much.

Okay oh so you're expecting the same number of printers I guess and like the install base should be the same base compared to what you said last quarter? It's just a capex payment.

You're talking about 27. We guided about 40 machines to be installed. And this quarter, I can't give a forward statement on Q4, but we pretty much basically can say that we will achieve our guidance on revenue.

Okay, and maybe last one for me. Can you talk a little bit about the CFO search process, where you're at there, and a potential timeline?

So we have solid candidates right now. We are in the final phases of finalizing somebody, and we'll announce somebody before end of the year.

Perfect. I'll leave it there. Thank you. Thank you.

Thank you. As a reminder, it is star one to ask a question. Our next question comes from the line of Troy Jensen with Cantor Fitzgerald. Please proceed.

Hey, gentlemen. Congrats on the success here. Maybe just a quick question for you, Arun. If you think about 40 printers next year, I mean COGS on those 40 printers, probably one and a half to two million. So it seems like you're going to need about 70 million of capital for the 40 printers alone. Can you juxtapose that just to your balance sheet right now? You're kind of at $70 million right now, but burning it for a bit quarterly. So talk about how you plan on deploying all 40 of those.

So, I mean, it's just like this year. I mean, we raised a substantial capital, but if you see our balance sheet, we maintain the substantial capital within our books, not barring that. These are asset-backed. There is always an option of funding those through debt, which we already have one in place for the equipment loan. So that's one way to do it. And also the sale of the machine, each sale of the machine with the gross profit increase, you can actually build down the machine. So that's how we are planning on the CapEx to control the outflow of the cash and improve the operational efficiencies. So there is a BOM cost, which I think we talked about, Try, about reducing that BOM cost not to have that much anymore and reducing that to at least another 20% of BOM cost or 30% of BOM cost will help us to get that capital needed to execute all those.

Okay, that's fair. And I think you said it's like about 1.5 to 1.7 is the CapEx per printer?

Is that about correct?

Right, yeah. Okay, and maybe a question for Clarence. I'm trying to get to the revenue level needed to hit adjusted EBITDA breakeven. If you look at Q3 here, you guys had a negative, call it $10 million EBITDA of 20 million in revenues. So to me, to cover almost 10 million in negative of EBITDA, we're going to need about 25 to 30 million of incremental revenues above and beyond the 20 million in the quarter. to help us. So to me, my math based on this current expense base would be like 45 to 50 million in revenues is needed quarterly to reach an adjusted breakeven.

Yeah, Terence is here, yeah. 45 to 50 on a quarterly basis is a little high. We think we can certainly be less than that.

So that would be taking some cogs?

It would be taking a lot of optics out of the model then to get there? Well, certainly improving our gross margins is a primary goal, and that will help in certainly moving more toward the RPS revenue stream will also help. But, yeah, it's just a matter of managing smartly the operating expense as it grows as a relationship to gross revenues. So we don't think it's that high, but certainly as we get closer to year-end, we'll probably have a better feel for that break-even point.

Okay. All right. Maybe one more for you guys, just on the RPS revenues. Looks like you guys had four printer sales in the quarter based on your 10Q, and that was about 60% of revenues, or call it 12 million. I think printer sales were like 18.8. There's some printer parts in there, or spare parts, excuse me. So is RPS about 5 million again this quarter?

So if you see, like, there's a 12.1 million on the printer sales, and the rest is RPS. So it's actually more than 5 million.

12.1 million, but I thought you have spare parts, too, though, Arun, in that printer category.

So the total revenue is 20.4, right? So if you see printer parts and machines, it's 18.7, if I'm looking at right. Just the printer sales is about 12 plus million, and the rest is all RPS.

So it's about more than... Don't you have like a million of spare parts in that number, too, outside of printed parts?

No, that is outside. So there is a $2 million of spare consumables apart from that $18 million. Okay.

All right. Thank you, sir. Yeah. Yeah, I was looking at just a printer of this 18.8, tried to back into it, but done. All right, thank you. Good luck going forward. Yep, thank you.

Thank you. Our next question comes from the line of Austin Bulick with Needham & Company. Please proceed.

Hey guys, thanks for taking my question. More just wanted to see if you have any color. I know it's very fresh, but with the turnout of the midterm elections, like How do you feel like that may have changed the outlook in your defense business at all or how should we be thinking about that as we go into 27?

That didn't change much on our end. Basically, actually, we're ramping up faster than what we thought on several different contracts because we've been working from last two years on various prototyping and those programs are going to production levels now. There were more facility and physicalization became absolute a ramp up for us and we are investing on the people and also they could be needed to get that wrapped up so that we can have more production on RPS. I don't see any impact or slowing down on that aspect actually.

Okay, okay. And then I'm just curious like with securing all the key components to building systems like How is the supply chain looking? Are there any like key bottlenecks that may hinder you guys from hitting some of these system targets next year?

So the supply chain we have robustly worked in the last nine months. I think I mentioned about the last call also, like diversifying a single point failure to a three layer supply chain. That's what we worked from January, 2026 to till today. and we are very successful in doing that. We are more confident that our supply chain is now more shifting towards U.S. supply chain than other countries' supply chain and we have quite a bit of solid backups to have a diversified portfolio of supply chain. That is a big win for Velo actually, like the terms of the suppliers and the speed of the suppliers, we are in a better position than ever before in the last six, seven quarters.

Okay, okay. And then maybe just a quick last one. Just thinking about your guys' OpEx for 2027, just given the CapEx push out, but like with the ramp in production, like how should we be thinking about the absolute increase in OpEx next year off of this? 45 to 55 target you have in 26.

Right. We will provide the guidance once we close out for Q4, probably in the first quarter of 2027. So I don't want to mislead anything. Just want to give an absolute numbers.

Okay. Fair enough. Thanks for taking the questions. All right.

Thank you so much.

Thank you. There are no further questions at this time. I'd like to turn the floor back over to management for any closing remarks.

We believe that Velo3D is absolutely for a win moving forward beyond the 2026. And I appreciate the support from our employees, customers, and vendors. especially our stockholders. There is a complete trajectory and the inflection point is getting real and the digitization of Livermore and starting the production there will change the financial results of Velo3D quite tremendously because of expanded capabilities it will create in 27. The opportunity is huge and thank you for your support.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.