Velo3D (NYSE: VELO) saw its shares climb sharply in after-hours trading Tuesday, following the release of first-quarter financial results that beat analyst expectations on both top and bottom lines. The stock jumped 24.7% to $17.53, reversing a decline in regular trading and reflecting renewed investor optimism.
The company reported revenue of $13.8 million for the quarter ended March 31, 2026, a 48% increase compared to the same period last year. Gross margin expanded significantly to 17.2%, up from 7.5% in the prior-year quarter, while net loss narrowed to $7.0 million from $25.0 million. On a per-share basis, the loss came in at $0.20, well below the $0.48 loss analysts had forecast.
CEO Arun Jeldi described the positive gross margin as a key inflection point, highlighting robust demand from defense and aerospace customers. The company's backlog stood at approximately $30 million, with repeat orders accounting for over 70% of total orders, indicating strong customer retention and recurring revenue potential.
Velo3D's Rapid Production Solutions (RPS) service arm, which prints parts for clients rather than just selling machines, is gaining traction. Management noted that RPS is building longer-term production relationships and encouraging repeat business across different projects. Printer and parts revenue surged 60% year-over-year, while operating expenses declined to $9.3 million from $12.2 million. Adjusted EBITDA loss narrowed to $3.6 million from $6.9 million.
Despite the positive earnings surprise, the company still faces significant challenges. Velo3D remains unprofitable, burned through $18.0 million in operating cash during the quarter, and ended March with $16.6 million in cash, down from $39.0 million at the end of 2025. An April equity raise added approximately $50 million but diluted existing shareholders with 3.57 million new shares.
The company's auditor flagged a going-concern issue in late March, warning that Velo3D could run out of options without a turnaround or additional capital. The company still expects to spend $40 million to $50 million on capital expenditures in 2026 for RPS expansion, contingent on securing further funding.
Velo3D competes with larger peers such as 3D Systems (NYSE: DDD), which posted Q1 revenue of $95.5 million and adjusted EBITDA of $2.1 million, and Stratasys (NASDAQ: SSYS), which reported $132.7 million in revenue and positive operating cash flow. Nano Dimension (NASDAQ: NNDM) recently completed its acquisition of Desktop Metal, consolidating the additive manufacturing landscape.
Looking ahead, Velo3D maintains its 2026 revenue guidance of $60 million to $70 million, targets gross margins above 30% in the second half, and aims for positive EBITDA by year-end. The company's ability to convert its backlog into deliveries, maintain high RPS utilization, and avoid further dilutive capital raises will be critical to sustaining investor confidence.
