Velo3D, Inc.

Greetings and welcome to the Velo3D Fiscal Year 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A 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. It is now my pleasure to introduce Bob Okunski, Vice President, Investor Relations at Velo3D. Please go ahead.

Thank you. I'd like to welcome everyone to our fourth quarter and fiscal year 2024 earnings conference call. On the call today, we will start out with comments from Arun Jaldi, CEO of Velo3D, who will provide an overview of the new Velo3D and our strategic priorities to position the company for profitable growth. Following Arun's comments, Paul Hsu, our CFO, will then review our fourth quarter 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 call, 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 2024 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 reconciliations. We have also posted a set of PowerPoint slides providing additional details on our strategic initiatives and financial performance on the events and presentations page of our investor relations website. With that, I'd like to turn the call over to Arun Jaldi, CEO of Bello3D. Arun?

Good afternoon, and thank you for joining Velo3D's fourth quarter and fiscal year 2024 earnings conference call. Today marks an exciting and transformative milestone for our company. As we discuss the strategic combination with Arrayed Additive Inc., which is the parent company of Arrayed Additive Notes Acquisition Corp., signaling the beginning of Velo3D 2.0. This combination is a cornerstone of our renewed focus on driving sustainable, profitable growth and positioning ourselves for long-term value creation. As an investor, you recognize the importance of growth opportunities that are both impactful and strategic. My decision to invest in Velo3D through Array Additive stems from the immense potential I see in the combining our companies together. Together, we now offer unmatched metal additive manufacturing capabilities, leveraging the best technologies and expertise from both sides. This powerful synergy positions us to capitalize on significant growth opportunities in key sectors, including airspace, defense, automotive, and engineering. We're confident that this strategic integration will not only enhance our competitive edge, but also deliver substantial long-term value for our shareholders. As we move forward, we remain committed to driving innovation and achieving sustainable growth, ensuring that Velo3D is well positioned for our continued success. There are seven key investor highlights from our recent transformation include a high growth, high margin business model, built for profitability. What does that mean to Velo3D? We have shifted from a volume-driven model to a value-driven strategy, focused on maximizing profitability, for example, fewer higher-value system sales. We are emphasizing the sale of advanced systems with significant higher ASPs, enabling better margins and longer-term customer relationships. There is a diverse revenue streams. In addition to system sales, our revenue mix now includes rapid production solutions, a recurring service-oriented offering enabling scalable parts production. And we also are stepping into services and software licensing, a predictable margin SOT revenues. And finally, operational efficiency. Cost control initiatives and supply chain optimization are lowering our break-even point. What is the outcome of doing this? As a result, we are building a resilient business with consistent cash flow potential and clear path to profitability. The second key pilot is strategic synergies, expanding market reach and technological depth. The combination with Arrayed Attitude is accelerating our transformation in powerful ways. We, with a minimal product and customer overlap, this partnership adds complementary capabilities without cannibalizing existing business. We are increasing the material expertise. Arrayed's leadership in magnesium and aluminum 3D printing allows us to address lightweight, high-strength applications in aerospace, defense, and motorsports, and EVs. expanded total addressable market. Our combining offerings significantly broadens the scope of industries and applications we serve, solidifying our position as a technological enabler across sectors. The third key point is strong positioning amid industry tailwinds. We are in the right place at the right time, reshoring momentum. Major U.S. policy initiatives and global supply chain shifts are fueling onshore manufacturing, especially for strategic sectors like defense and aerospace. Velo3D, a US-based leader. As the only US large bed size supplier of high-end laser powder bed fusion systems, we offer mission-critical reliability with local accountability. National security advantage. Our solutions are increasingly aligned with federal priorities around manufacturing independence and technological sovereignty. What are the strategic advantages of this? We are not just riding the wave. We are helping to shape it by reshoring momentum as a U.S. business leader, as a U.S. base leader, and national security advantage. We are actually thriving. The fourth key point I want to address here is trend and financial position for scalable growth. With the close of arrayed additive transaction, we have taken major steps to solidify our balance sheet. We have reduced our debt. We eliminated nearly all senior debt and warrant liabilities, removing financial overhang and reducing interest expense burdens. We had a bridge finance secured for $15 million, secures our runway to execute near-term growth and integration plans. We have focused on capital allocation with proper budgeting. Every dollar now supports initiatives that accelerates revenue, margin expansion, and long-term shareholder value. The fifth key point I want to address here is accelerating revenue growth and backlog momentum. We are seeing tangible commercial transaction. There is a firm $16 million backlog a growth base of commitment system orders, service contracts, and RPS projects. We have a robust pipeline, strong engagement across different primes, aerospace OEMs, semiconductor manufacturers, and energy leaders. There is a high visibility into the future revenue. With long cycle procurement and high switching costs, Our installed base leads to recurring revenue opportunities and high consumer retention. What is that to do with all of this? What that means is our near-term growth is underpinned by real demand, not speculative opportunities with revenue growth of more than 30% in 2025. We have introduced rapid production solution, the future of manufacturing. Now our RPS business is quickly becoming a cornerstone of our strategy. It solves industry pain points of with high mix, low volume production is hard to scale. RPS does it with unmatched speed and repeatability. There is a recurring revenue driver. RPS projects are typically long-term, offering consistent cash flow with high margins. We are vertically integrated strategy. We are expanding our partnerships and capabilities to bring more of the value chain in-house, reducing cost of goods and improving gross margins. Our target, RPS to contribute 40% of total revenue by 2026 with further upside through volume and value add services. It does not mean we are deviating our system sales. it means we're adding more value to Velo as the revenue with RPS solution provider. There's a clear path to profitability by 2026. That is a major key point I want to address here. We are laser focused on achieving EBITDA profitability by first half of 2026, driven by improved ASPs and gross margins from system sales, scalable recurring revenue from RPS and services, operating leverage as we grow revenue with limited cost expansion, a more agile and integrated organization structure. We're not chasing growth at any cost. We're building sustainable, profitable momentum. What does that mean for investors? A transformed high-margin business model, access to rapidly growing markets with limited competition, technological leadership and defense-critical manufacturing, strengthened balance sheet and operational discipline, a credible and visible path to profitability and value creation. Join us at the inflection point. We have done the heavy lifting. The strategic pieces are in place. The momentum is building. We believe Velo3D is no longer a speculative bet. It's a smart, long-term investment opportunity with significant upside potential. We are committed to transparency, disciplined execution, and building enduring value for our shareholders. We hope you will join us as we execute on our strategic vision. Thank you. I now invite Paul Zhu, our CFO, to discuss our detailed financial performance and guidance.