Velo3D reiterates $60M-$70M 2026 revenue outlook while targeting gross margins above 30% in 2H (OTCMKTS:VLDXW)

Velo3D's Q1 2026 update delivered a 48% year-over-year revenue jump, a reiterated $60M-$70M full-year revenue outlook, and a concrete target of gross margins above 30% in the second half. The warrants (OTCMKTS: VLDXW) offer a leveraged way to play the margin inflection. The OTC listing demands careful position sizing.

Q1 Revenue Growth and RPS Expansion

Revenue rose 48% from the prior-year period. The company did not disclose the absolute dollar figure in the summary, yet the growth rate signals that demand for its Sapphire XC and large-format metal additive manufacturing systems is accelerating. Revenue per system (RPS) also expanded. This metric matters because it reflects either higher average selling prices or a mix shift toward larger, more complex machines. Both drivers support the margin expansion narrative.

Defense Wins Strengthen Backlog Visibility

Management highlighted defense contract wins during the quarter. Defense customers typically place multi-unit orders with longer qualification cycles, which builds a sticky backlog. These contracts often carry higher margins and generate recurring revenue from service and consumables. The defense vertical adds a layer of revenue visibility that makes the full-year $60M-$70M guidance more credible. For a company that has historically struggled with lumpy order flow, a growing defense backlog reduces execution risk.

Gross Margin Target Above 30% in Second Half

The most consequential forward-looking statement was the target of gross margins above 30% in the second half of 2026. Velo3D's gross margins have been negative or low single-digits in recent quarters. A move above 30% would represent a structural shift in unit economics. The drivers are clear: higher RPS, improved manufacturing efficiency as production volumes scale, and a richer mix of defense and aerospace customers. Hitting that target would validate the operating leverage that bulls have been waiting for. The warrants, which are deeply out-of-the-money or near-the-money depending on the strike, would reprice sharply on any sign that the margin target is achievable.

Reiterated $60M-$70M Full-Year Revenue Outlook

Full-year 2026 revenue guidance of $60M-$70M was reiterated. With Q1 likely contributing a small fraction of that total, the second-half ramp needs to be steep. The company's confidence in the outlook, paired with the margin target, suggests that the pipeline is building and that order conversion is on track. The defense wins and RPS growth provide early evidence that the mix is improving. Historically, Velo3D's revenue has been back-half weighted, and the guidance implies that roughly 70% of the year's revenue will land in the second half.

VLDXW Warrants and the Margin Inflection Trade

VLDXW warrants trade over-the-counter and offer leveraged exposure to Velo3D's common equity. The warrants have a strike price and expiration that make them a high-beta instrument. The next catalyst is the second-quarter print, which should show whether the revenue ramp is materializing and whether gross margins are trending toward the 30% target. For traders, the key is not the absolute Q2 number but the trajectory of RPS and the gross margin line. A sequential improvement in margins would confirm the thesis. A stall would raise questions about the second-half target. The OTC listing means liquidity is thin, so position sizing is critical. The margin inflection story is binary, and the warrants will reflect that.

For a deeper look at how small-cap earnings prints can reshape a stock's trajectory, see our analysis of OptimizeRx Q1 Beat: $19.8M Revenue, $3.3M Adjusted EBITDA. The same discipline of tracking revenue quality and margin inflection applies here. The next concrete marker is the Q2 update, where the gross margin trend will either validate the second-half target or force a reassessment of the $60M-$70M revenue outlook.