What are the margin trends (gross, operating, EBITDA) in this quarter and what are the drivers of any changes?

Answer

The press‑release you quoted does not give the actual gross‑margin, operating‑margin, or EBITDA‑margin numbers for the second quarter of 2025. It only provides a high‑level view of the company’s top‑line performance (revenue and backlog) and forward‑looking guidance (> 30 % annual revenue growth and a target to be EBITDA‑positive in the first half of 2026).

Because of that, any discussion of margin trends for this quarter has to be framed around the information that is available, combined with what is typically driving margin changes for a company in Velo3D’s growth phase.

Below is a structured assessment that pulls together the disclosed data, the company’s stated expectations, and the likely underlying drivers of margin movement in this quarter.

1. What the release tells us about margins

Bottom line: The release does not present the actual margin percentages for the quarter, so we cannot quote a specific trend (e.g., “gross margin fell from 45 % to 42 %”). However, the narrative around the upcoming EBITDA‑positive milestone gives clues about the direction of each margin component.

2. Reasonable inference of margin direction

2.1 Gross Margin

• Typical drivers for a high‑growth additive‑manufacturing firm:
  
  • Cost of goods sold (COGS) – material and labor: As Velo3D scales production, it can negotiate better pricing on raw metal powders and amortize capital‑equipment costs over more units, which generally improves gross margin*.
    
  • Product mix: Introducing higher‑value, higher‑price‑point machines or services (e.g., post‑processing, software subscriptions) can lift the gross margin.
    
• What the data suggest:
  
  • The company is still relatively early in its revenue trajectory (Q2 2025 revenue of $13.6 M).
    
  • The “backlog” is expanding, indicating that future sales will be higher‑volume.
    
  • Inference: Gross margin is likely stable or modestly improving versus prior quarters, as the firm leverages its existing production capacity and begins to benefit from economies of scale.

2.2 Operating Margin (EBIT)

• Operating expenses for a fast‑growing tech‑hardware firm typically include:
  
  • R&D (product development, software integration).
    
  • Sales & marketing (customer acquisition, field service expansion).
    
  • General & administrative (head‑count growth, corporate overhead).
    
• What the release suggests:
  
  • The firm is still negative EBITDA and is targeting a positive EBITDA in H1 2026.
    
  • This implies that operating expenses are currently outpacing the incremental revenue, keeping the operating margin compressed (i.e., a larger operating loss relative to revenue).
    
• Inference: Operating margin is still negative and likely stable or slightly deteriorating in the short term, as the company invests heavily to capture the projected > 30 % YoY revenue growth. The “EBITDA‑positive” target indicates that the firm expects operating leverage to improve once the revenue base is large enough to absorb the fixed cost base.

2.3 EBITDA Margin

• Current status: The press‑release explicitly states the company has not yet reached EBITDA positivity.
  
• Drivers of the current negative EBITDA margin:
  
  • High fixed costs (manufacturing equipment, R&D, sales & marketing) relative to modest revenue.
    
  • Working‑capital intensity (growing backlog, inventory build‑up) that can depress cash‑flow‑related margins.
    
• Future trajectory: The reaffirmed guidance to be EBITDA positive in the first half of 2026 signals that management expects the EBITDA margin to improve sharply as revenue scales faster than the cost base. The primary drivers of that improvement will be:
  
  • Revenue acceleration from the expanding backlog (backlog grew from $15.9 M to $17.8 M within a month).
    
  • Operating leverage – fixed costs (e.g., factory overhead, R&D) will be spread over a larger sales volume.
    
  • Potential cost‑optimization initiatives (e.g., supply‑chain efficiencies, lower material waste, automation of post‑processing).
    

3. Key drivers behind any observed or expected margin changes

4. Summary of the margin picture for Q2 2025

5. What to watch for in the next disclosures

1. Quarterly margin percentages – future earnings releases (e.g., Q3 2025) should start reporting gross, operating, and EBITDA margins, allowing a direct comparison to the inferences above.
   
2. R&D and SG&A spend trends – a breakdown of these line items will clarify whether operating expenses are indeed plateauing relative to revenue.
   
3. Backlog conversion rate – the speed at which the $17.8 M backlog is realized will be a leading indicator of margin improvement.
   
4. Capital‑expenditure updates – any new manufacturing line or automation investment could temporarily depress margins but may accelerate long‑term gross‑margin gains.

Bottom line

• The press‑release does not provide explicit margin figures for Q2 2025, so we cannot quote exact percentages.
  
• Gross margin is likely stable or modestly improving due to scaling and product‑mix effects.
  
• Operating margin remains negative, reflecting heavy R&D and sales‑and‑marketing spend needed to sustain the > 30 % revenue growth target.
  
• EBITDA margin is still negative, but management’s reaffirmed guidance to be EBITDA positive in the first half of 2026 indicates a clear plan to lift the EBITDA margin through revenue acceleration and cost‑efficiency measures.
  

When the next earnings release provides the actual margin numbers, you can replace the qualitative assessment above with precise trend data. Until then, the drivers outlined here should help you understand the direction and underlying forces shaping Velo3D’s margin performance in this quarter.