Velo3D Inc (NASDAQ: VELO) shares surged in early Wednesday trading after the metal additive manufacturing company reported a strong second quarter and raised its full-year revenue outlook. The company posted second-quarter revenue of $20.7 million, up 52.3% year-over-year, significantly beating consensus estimates of $13.52 million. Adjusted earnings per share came in at a loss of $0.30, which topped analyst expectations for a $0.31 loss.

The results were driven by robust demand from aerospace and defense clients, including Space Exploration Technologies Corp. CEO Arun Jaldi stated that the company has exited its stabilization period and entered a growth phase, citing higher margins and operational efficiencies. He noted that existing space-related customers are accelerating production, pushing the limits on current capacity.

Operational Highlights

Gross margin expanded significantly to 21.5% from negative 11.7% in the prior-year period, reflecting improved product mix, higher average selling prices, and manufacturing efficiencies. Velo3D secured $29 million in new bookings during the quarter, bringing its total backlog to $31 million. As of June 30, the company held $91.1 million in cash and cash equivalents, while debt fell more than 70% to $8.2 million. CFO Jim Suva added that the strong cash position provides greater financial flexibility to execute the growth strategy and support capacity expansion.

Guidance and Expansion

Encouraged by the demand surge, management raised its full-year 2026 sales outlook to $65 million-$75 million, up from the previous range of $60 million-$70 million and above Wall Street estimates of $64.16 million. The company also reiterated its expectation for positive adjusted EBITDA in the second half of 2026.

Jaldi emphasized that the past 18 months were focused on stabilizing the business. He stated, "We absolutely need 100 machines as of today to actually run all the programs on the demand we have," adding that the company expects to have half that capacity in place by next year. The launch of the Livermore Production Campus in the second quarter is expected to triple manufacturing capacity, supporting this expansion. With a market capitalization of approximately $407.98 million, Velo3D’s stock had closed at $13.69 during regular trading on Tuesday before rising 11.91% to $15.33 in Wednesday morning trading.

What the Numbers Show

The shift from a negative gross margin of 11.7% to a positive 21.5%, combined with a revenue beat of over 50% against estimates, signals a fundamental operational turnaround rather than just top-line growth. The raised full-year guidance, now exceeding Wall Street’s $64.16 million estimate, reflects management’s confidence in sustaining this momentum despite current capacity constraints highlighted by the backlog of $31 million.

Needham analyst Austin Bohlig reiterated a Buy rating on Velo3D (NASDAQ: VELO) while maintaining a price target of $33. The analyst’s action signals continued confidence in the industrial technology firm’s market position.

Analyst Action

Bohlig’s decision to maintain the Buy rating reflects the broker’s assessment of Velo3D’s valuation relative to its growth prospects. The $33 target remains unchanged from previous coverage, indicating stability in the firm’s outlook for the stock.