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December 08.2025

2 Minutes Read

How Velo3D's Shift to Recurring Revenue Could Transform the 3D Printing Market

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A Turnaround Journey: Velo3D's Shift to Recurring Revenue

Velo3D, Inc. is transitioning from its traditional hardware-based model to a more sustainable, service-oriented approach through its Rapid Production Solutions (RPS). This shift is initiated in a bid to tap into the expansive potential of mission-critical 3D printing markets, specifically targeting sectors that prioritize efficiency and reliability, such as aerospace and defense.

Revenue Growth and Strategic Initiatives

The company is making bold predictions, with management forecasting a remarkable 50% compound annual growth rate (CAGR) in sales through 2027. A recent surge of 200% year-on-year in bookings substantiates this optimism, emphasizing growing acceptance of their service offerings in demanding industries. The intention is to reach EBITDA breakeven by mid-2026, supported by projected gross margins exceeding 30% by Q4 2025.

Challenges on the Horizon

However, it's essential to address the inherent risks tied to Velo3D's transition. With substantial reliance on select clients and ongoing capital constraints, the path forward is fraught with challenges. Customer concentration poses a risk since a few clients can significantly impact financial stability and future growth projections. Yet, the potential 150% upside in company valuation in the next four years is enticing for risk-tolerant investors.

Market Trends & Implications

The greater trend of shifting from hardware to recurring service models in technology reflects a broader movement within the industry toward sustainability and increased predictability in revenue streams. This transition isn't just beneficial for Velo3D; it's indicative of how companies in the US market are reevaluating legacy business models to survive and thrive amid shifting consumer demands. Velo3D's efforts to innovate through RPS could serve as a case study for other firms seeking to adapt to the evolving tech landscape.

Financial Health and Future Outlook

Despite a reported net loss of $25.4 million in the recent quarter, Velo3D is strategically positioning itself for future profitability and growth. As the company continues to solidify its financial standing and reduces operational costs, investors are keenly observing its performance and market share. As of Q2 2025, Velo3D reported a backlog of $13.6 million, indicating stronger revenue visibility and an encouraging outlook.

This transformative journey lays a foundation for Velo3D, marking it as a potential leader in the 3D printing industry amidst the broader trend of service-oriented financial strategies. The coming years will reveal whether the company can capitalize on its strategic initiatives and return to profitability.

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How Velo3D's Shift to Recurring Revenue Could Transform the 3D Printing Market

A Turnaround Journey: Velo3D's Shift to Recurring Revenue

Revenue Growth and Strategic Initiatives

Challenges on the Horizon

Market Trends & Implications

Financial Health and Future Outlook

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