Velo3D Q2 2026 earnings: Revenue grows 52% as gross margin turns positive

Velo3D (Nasdaq: VELO) reported Q2 2026 revenue of $20.7 million, up 52.3% from $13.6 million a year earlier, while GAAP diluted EPS improved to a loss of $0.39 from a loss of $0.94. Gross margin turned positive at 21.5%, although higher operating expenses limited the reduction in operating losses. Equity financing lifted quarter-end cash to $91.1 million and reduced debt, but first-half operating cash use increased substantially.

Core financial results

Revenue growth was led by 3D Printer and parts sales, which benefited from higher average selling prices, a more favorable product mix and increased Rapid Production Solution, or RPS, revenue. Gross profit improved by approximately $6.0 million year over year, but operating expenses increased by about $5.5 million.

Consequently, Velo3D remained loss-making despite its revenue growth and gross-margin recovery. The GAAP net loss narrowed by $1.8 million, while adjusted EBITDA improved by approximately $0.8 million.

The company described these quarterly figures as preliminary estimates that may be revised when it files its Form 10-Q.

Business and segment performance

3D Printer and parts revenue reached $19.0 million, up 57.0% from $12.1 million and representing most of the quarter’s revenue. Support services generated $1.5 million, compared with $1.4 million a year earlier, while other revenue was $202,000, up from $61,000.

Management expects system sales to remain the primary revenue driver in 2026, but said the RPS parts-production business should contribute an increasing share under the company’s revised go-to-market strategy. Velo3D recorded $29 million of new bookings during the quarter and ended June with a $31 million backlog.

The company also launched its Livermore Production Campus, which is expected to become operational later in 2026 and triple manufacturing capacity. Velo3D expects the site to become its primary production center, supporting larger programs and shorter delivery times. Separately, Mears Machine ordered its fifth Sapphire XC system and secured options for two additional systems.

Gross-margin recovery was largely absorbed by higher operating expenses

The move from a negative 11.7% gross margin to a positive 21.5% was the quarter’s most important profitability change. Velo3D attributed the improvement to higher selling prices, product mix, increased RPS revenue and manufacturing efficiencies.

However, the company also refined how certain labor and overhead costs are allocated between cost of revenue and operating expenses to align with current activities. This means the reported gross-margin improvement was not solely the result of pricing and manufacturing gains.

Total operating expenses rose to $15.5 million from $10.0 million. Research and development, selling and marketing, and general and administrative expenses all increased. Non-GAAP adjusted operating expenses, which exclude stock-based compensation recorded in operating expenses, also rose to $13.1 million from $8.8 million. The increase therefore extended beyond stock-based compensation and absorbed most of the gross-profit improvement, leaving the operating loss only modestly lower.

Equity financing lifted cash while operating cash burn increased

Cash and cash equivalents reached $91.1 million at June 30, 2026, compared with $39.0 million at the end of 2025. This increase was driven by financing rather than positive operating cash generation.

During the first half of 2026, Velo3D used $39.5 million of cash in operating activities, compared with $13.6 million in the prior-year period. Working-capital outflows included increases in contract assets and prepaid expenses, along with reductions in accounts payable and accrued liabilities. These are six-month figures rather than Q2-only cash-flow data.

Financing activities provided $99.5 million during the first half. The company raised approximately $50 million in gross proceeds through an April registered direct offering and another $59.4 million through its at-the-market program. Together with debt-to-equity conversions and debt repayments, these actions reduced outstanding debt by more than 70% to $8.2 million.

The stronger cash position provides funding for capacity expansion and customer programs, but it came with shareholder dilution. Common shares outstanding increased to approximately 32.15 million at June 30 from 24.61 million at December 31, 2025.

2026 guidance

Velo3D raised its full-year revenue range based on first-half performance, backlog and its current pipeline. Other targets were reaffirmed, including a second-half gross margin above 30% and positive EBITDA during the second half.

With first-half revenue of $34.5 million, the updated range implies approximately $30.5 million to $40.5 million of revenue during the second half.

Risks investors should watch

• Profitability targets require further progress: Adjusted EBITDA remained negative at $8.1 million in Q2, while adjusted operating expenses increased. Achieving positive EBITDA in the second half depends on continued margin gains and tighter expense leverage.
• Cash consumption remains elevated: First-half operating cash use increased to $39.5 million, and planned 2026 capital expenditures of $40 million to $50 million are explicitly subject to sufficient financing.
• Additional financing could create more dilution: Recent equity offerings materially strengthened liquidity, but outstanding shares increased. Further capital raises could dilute existing shareholders.
• Capacity expansion carries execution risk: The Livermore campus is expected to become operational later in 2026 and triple capacity. Delays or higher costs could affect production and delivery objectives.
• Bookings and backlog must convert into revenue: The $31 million backlog supports the outlook, but the timing and ultimate conversion of orders remain uncertain.

Summary

Velo3D’s Q2 2026 results showed faster revenue growth and a return to positive gross margin, driven by pricing, product mix, RPS activity and manufacturing efficiencies. Higher operating expenses absorbed most of the gross-profit improvement, however, and operating cash use remained substantial. The central issues for the second half are whether Velo3D can raise gross margin above 30%, reach positive EBITDA, bring the Livermore campus online and fund expansion without excessive additional dilution.