Velo3D, Inc.

Good afternoon. Welcome to the Velo3D first quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. As a reminder, today's conference call is being recorded. I'll now turn the call over to Mr. Bob Okonski, Vice President of Investor Relations at Velo3D Corporation. Thank you, sir. You may begin.

Thank you. I'd like to welcome everyone to our first quarter 2024 earnings conference call. On the call today, we will start out with comments from Brad Krieger, CEO of LO3D, who will provide a summary of the quarter as well as an update on certain key strategic priorities for 2024. Following Brad's comments, Paul Hsu, our CFO, will then review our first quarter 2024 financial results and provide our guidance. As a reminder, a replay of this call will be available later today on the investor relations page of our website. During today's calls, we will make forward-looking statements that are subject to various risks and uncertainties that are described in the Safe Harbor slide of today's presentation, today's press release, as well as our 2023 10-K and additional 2024 SEC filings. Please see those documents for additional information regarding those factors that may affect these forward-looking statements. Also, we will reference certain non-GAAP metrics during today's call. Please refer to the appendix of our presentation as well as today's earnings press release for the appropriate GAAP to non-GAAP reconciliation. We've also posted a set of PowerPoint slides which we'll reference during the call on the events and presentations page of our investor relations website. Before we get started, I would like to provide some brief comments related to the strategic review we announced in the fourth quarter. This comprehensive process remains ongoing, and the Board of Directors is in discussions with multiple parties related to maximizing stockholder value. As we announced previously, we do not intend to disclose further developments on the strategic review process until we determine that such a disclosure is appropriate or necessary. As a result, we will not be answering questions on the status of the review during this call. With that, I'd like to turn the call over to Brad Krieger, CEO of Vela3D. Brad?

Thanks, Bob. I'd like to welcome everyone to our first quarter earnings call. As we mentioned last quarter, we initiated company realignment to reduce costs, rebuild our bookings pipeline, and recommit ourselves to ensuring our customers are successful while instituting a culture of quality, efficiency, and profitability. Our Q1 results reflect the continued execution on these priorities as we made significant progress in several key areas with more to come this quarter. our goal of achieving sustainable profitability by year-end remains unchanged. With that in mind, I'd like to discuss the specifics of our first quarter. Please turn to slide three. Overall, we met our revenue guidance for the quarter and are now seeing the benefits from the new go-to-market strategy we implemented last year. Q1 bookings improved measurably on a sequential basis, and this momentum is carrying over into the second quarter, giving us significant visibility for this quarter. On the expense side, the successful implementation of our aggressive cost reduction programs over the last six months is yielding results as OPEX declined by 15% versus Q4 and 30% year over year. We remain focused on prudently managing cash and expect quarterly OPEX to continue to trend down for the balance of the year. We completed our shift to a customer-driven model in both sales and support, and we continue to make material progress on improving system reliability in the field. More on that topic later. Finally, we further expanded our pipeline during the quarter with a particular emphasis on our core verticals of defense, space, and aerospace. We were pleased to see such a strong rebound in our Q1 bookings as our value-based selling approach is gaining traction. Given this success, we believe we have significant visibility to Q2 revenue, achievement, and shipment goals. Specifically, we continue to see a recovery in existing customer orders, given our reliability initiatives with approximately 50% of Q1 bookings coming from our current customers. Additionally, on the new customer front, we increased our footprint in defense with the addition of three new customers in the sector during the quarter. We exited the quarter with $22 million in systems backlog, with Q1 bookings totaling $17 million, the majority of which came from our core end markets. As a result of this visibility, we see sequential revenue growth of more than 30% for the second quarter. Our cost control programs are working well and remain on track to achieve our cost reduction goals for the second quarter. Finally, given the success of our realignment initiatives, Along with our rebound in bookings, we remain well positioned to achieve our goal of cash flow breakeven by the end of the year. As we discussed last quarter, we instituted a new go-to-market strategy over the last six months in order to rebuild our bookings momentum. I would now like to highlight some of our completed initiatives that have led to our recent successes, as well as a few initiatives we plan on implementing to sustain this momentum. Please turn to slide four. to our historical pattern. While this mix can fluctuate due to timing, we expect this split to remain consistent for the balance of the year. As part of our new strategy, we instituted several programs to simplify and improve our fundamental sales processes. This includes initiatives focused on improving pipeline qualification, along with leveraging our value-based approach versus a pure technology sell. As a result, we saw significant improvement in our win rate for the first quarter. Additionally, we've also narrowed our customer focus to those markets where we've had significant success. These include the space and aerospace sectors, but more importantly, increasing our footprint in defense, a market that we remain very excited about. Again, we see a huge opportunity in defense in areas such as hypersonics and legacy part production. We have been and continue to be in discussions with the DoD leadership about how we can be a leader in their transition to AM. Looking forward, we are investing the resources required to fuel new market expansion by leveraging our experience in sectors such as space to open new application areas in both aerospace and defense. We are also exploring new pricing and packaging models to drive growth while reducing overall production costs by improving our manufacturing and installation efficiency. Finally, we started a program working directly with the supply chain of key defense primes to better position long-term trusted partner to our defense customers. This has already paid off as we continue to receive orders related to the $825 billion defense spending bill, which was approved in late March. While we're excited about the growth potential given our go-to-market changes, these efforts will not come to fruition without executing on our internal realignment initiatives to position the company for success. I'd like to briefly provide an update on the 2024 strategic priorities we laid out. Please turn to slide five. We continue to execute on our quality enhancements as we saw 40% sequential improvement in both days to install and labor related to our XC installation efforts. This was made possible through the success of key initiatives that we launched in the second half of last year, focused on improving the quality of our printers and streamlining installation processes. We are most proud of the customer experience and success improvements we've accomplished in the first quarter. We accelerated the rollout of reliability upgrades to the field and established a regular cadence of providing reliability improvement updates to our customers. Additionally, our pipeline continues to fill with qualified leads as we've started to rebuild our backlog exiting the first quarter at 22 million. This success demonstrates our customers' value our technology, and that we are successfully addressing the reliability issues in the field. Finally, to reiterate, we further reduced our cost structure by 30% year over year and remain confident that we see a clear, executable path to cash flow breakeven in the second half of 2024. Before turning the call over to Hole for financials, I wanted to highlight some of the recent manufacturing and customer successes we've had and why customers continue to choose Velo3D's technology for their AM needs. Please turn to slide six. On the left, we internally designed and built a turbofan for demonstration purposes to highlight our ability to print parts with significant low angles and overhangs without supports, something our competitors have a difficult time matching. This part was built on a Sapphire XC in aluminum and is one of the largest CP1 AM parts ever built in this material. This part was done as a single piece in less than three days as compared to traditional casting processes that could take weeks or months while also requiring significant upfront investment and typically yielding lower results. In the middle, we are highlighting our leading position in heat exchanger production as our technology is particularly well-suited for the complex nature of these parts. For example, one of our partners, a large semiconductor equipment company, is using our technology to produce heat exchangers for use in next generation AI chip production. Finally, on the right, we went head to head with other AM companies in a surfacing trial for a hypersonic ramjet. By printing this part at our system, the customer was able to reduce the cost by $20,000 and significantly reduce their lead time from six weeks to just days. On the competitive front, we were able to achieve this result three times faster than our closest competitor, and with the highest surface quality across all participants in the trial. In closing, I'm very encouraged with the progress we've achieved so far and remain excited about our future opportunity. While there's still a lot of work to be done, we firmly believe we have turned the corner and we are in a much stronger position to achieve our 2024 goals. With that, I would like to turn the call over to Hull to discuss our financials and provide our guidance. Hull?