Velo3D's Post-IPO Struggles: A Cautionary Tale for Additive Manufacturing Investors?

The additive manufacturing (AM) industry has long been hailed as a transformative force in industrial production, but for investors, it remains a high-risk, high-reward arena. Velo3D, a leader in AM technology, recently completed its uplisting to Nasdaq under the ticker "VELO," following a $17.5 million public offering in August 2025. While the company's post-IPO financials and strategic moves suggest optimism, a closer look at its financial resilience, market positioning, and capital structure reveals a complex picture. This article evaluates whether Velo3D's trajectory aligns with long-term viability or if its struggles underscore the inherent challenges of scaling in a capital-intensive sector.

Financial Resilience: Growth vs. Burn

Velo3D's Q2 2025 results highlight a 32% year-over-year revenue increase to $13.6 million, driven by system sales and a surge in Rapid Production Services (RPS) bookings. RPS, which accounts for parts production, grew 79% quarter-over-quarter, with 87% of demand coming from space and defense sectors. This shift toward recurring revenue is promising, but the company's profitability remains elusive.

GAAP net losses widened to $13.8 million in Q2 2025, up from $172,000 in the same period in 2024. Adjusted EBITDA of -$8.9 million underscores the company's reliance on external financing. As of June 30, 2025, Velo3D held just $854,000 in cash and cash equivalents—a 30% decline from December 2024. While a $15 million secured convertible note and the recent IPO provided liquidity, the company's burn rate remains alarming. At $13–14 million per quarter, Velo3D's cash reserves could deplete within months without sustained revenue growth or additional funding.

Market Positioning: Strategic Alliances and Sector Focus

Velo3D's focus on high-margin sectors like aerospace and defense has been a strategic differentiator. Partnerships with Amaero ($22 million), Momentus ($15 million), and Vaya Space ($4 million) highlight its ability to secure contracts in niche markets. A Cooperative Research and Development Agreement (CRADA) with NAVAIR further cements its role in government-led AM innovation.

However, these sectors are capital-intensive and cyclical. For example, defense spending is subject to geopolitical shifts, while space industry growth depends on private-sector investment. Velo3D's reliance on these markets exposes it to volatility. Additionally, its RPS business, though growing, still represents a small portion of total revenue. System sales—its primary revenue driver—remain vulnerable to pricing pressures and long sales cycles.

Long-Term Viability: Can Velo3D Turn the Corner?

Management's guidance for 2025 includes $50–60 million in revenue and a gross margin exceeding 30% by Q4 2025. If achieved, this would signal progress toward profitability. However, the company's $15–20 million in annual capital expenditures and $40–50 million in non-GAAP operating expenses pose significant hurdles.

The path to EBITDA positivity by mid-2026 hinges on three factors:
1. RPS Scalability: Can the company sustain RPS growth while managing margins?
2. Operational Efficiency: Will cost reductions offset rising CapEx and R&D expenses?
3. Liquidity Management: Can Velo3D avoid dilutive financing rounds that erode shareholder value?

A critical risk lies in the company's balance sheet. With $1.2 million in cash at year-end 2024 and $854,000 by mid-2025, Velo3D's liquidity buffer is thin. The recent IPO raised $17.5 million, but this may not be sufficient to fund operations through 2026. Investors must assess whether the company's strategic partnerships and RPS expansion can generate cash flow quickly enough to avoid further dilution.

Investment Implications

For investors, Velo3D presents a high-risk, high-reward opportunity. The company's technological leadership in AM and strategic positioning in aerospace/defense are compelling. However, its financials reveal a business still in the "burn phase," with no clear path to profitability in the near term.

Key Considerations:
- Short-Term: Monitor Q3 and Q4 2025 results for signs of gross margin improvement and RPS scalability.
- Long-Term: Evaluate whether Velo3D can achieve EBITDA positivity by 2026 without excessive dilution.
- Sector Dynamics: Assess macroeconomic risks in aerospace and defense, including potential budget cuts or supply chain disruptions.

Investment Advice: Conservative investors may want to avoid Velo3D until it demonstrates consistent cash flow generation. Aggressive investors with a high-risk tolerance could consider a small position, contingent on the company's ability to execute its RPS strategy and secure additional financing.

In conclusion, Velo3D's post-IPO journey is a microcosm of the additive manufacturing industry's challenges. While its innovation and market focus are strengths, its financial resilience remains unproven. For now, this cautionary tale serves as a reminder that even in high-growth sectors, capital discipline and operational execution are paramount.