A year ago, Velo3D, Inc. (NASDAQ: VELO) was trading on OTC markets after going through a significant restructuring. The Fremont, California company, which makes industrial metal 3D printing systems for aerospace, defense, space, and energy applications, had seen its stock become nearly worthless and its future as a public company was genuinely in question. Today, it carries a market cap of roughly $766 million and has been one of the more notable small-cap stories in the industrial sector over the past six months, with its stock up approximately 380% in that period. The question worth asking is whether the recent financial results justify any of that rerating. The Q1 2026 numbers offer a reasonable case that at least some of it does.
Revenue for the first quarter came in at $13.8 million, up 48% year-over-year from $9.3 million in the same period of 2025. More importantly, the company posted a gross margin of 17.2% for the quarter, compared to 7.5% in Q1 2025. That marks the first time Velo3D has reported a positive gross margin as a public company, and it is the metric that matters most at this stage. A company can grow its top line in many ways, but turning gross-margin positive means the core business of making and selling its Sapphire® 3D printing systems and providing manufacturing services is no longer consuming more cash than it generates at the product level. Management attributed the improvement to higher average selling prices on its Sapphire XC systems and increased volume in its Rapid Production Solutions (RPS) services business.
The company also disclosed an award of a five-year Indefinite Delivery Indefinite Quantity (IDIQ) contract from the Defense Logistics Agency (DLA), valued at up to $9.8 million. It is worth noting that IDIQ contracts set a ceiling on potential value rather than guaranteeing the full amount will be spent. The award is tied to the DLA’s Joint Additive Manufacturing Acceptability Pilot Parts Program, which is focused on expanding the use of additively manufactured components in U.S. Department of Defense sustainment operations. For a company of Velo3D’s size, entry into a formal government program of this kind is a meaningful signal about where additive manufacturing is heading in the defense supply chain.
The capital structure also changed considerably. In April 2026, the company closed a $50 million equity offering, giving it additional liquidity to invest in talent and operational infrastructure, particularly for its RPS expansion. During Q1, the company also converted $15 million in debt to equity and fully repaid its secured notes, reducing total outstanding debt by roughly 70% to approximately $9 million. That kind of balance sheet cleanup, while dilutive to existing shareholders, removes a significant source of uncertainty.
Looking ahead, management reaffirmed full-year 2026 revenue guidance of between $60 million and $70 million and expects gross margin to improve sequentially throughout the year, targeting above 30% in the second half of 2026. The company also guided for positive EBITDA in the second half of the year. None of this is guaranteed, and Velo3D is still generating a GAAP net loss. For Q1, that loss was $7.0 million. The path from here to consistent profitability requires continued execution on a fairly aggressive expansion plan, particularly around RPS, which is capital-intensive.
The broader context matters too. Investor appetite for aerospace and defense manufacturing companies has grown considerably, driven in part by enthusiasm around next-generation space and defense programs. Velo3D’s customer base includes companies working on mission-critical parts for both commercial space and U.S. military programs, putting it squarely in the middle of a sector that is attracting renewed interest. The stock’s 380% move in six months reflects some degree of that enthusiasm. The Q1 results suggest there is at least a real operational story underneath it.
