Sometimes the best news comes from watching your customers win big. That's exactly what happened Tuesday for Velo3D Inc. (VELO), whose shares soared after one of its key manufacturing partners landed a massive defense contract.
Mears Machine Corporation announced Monday it secured a long-term supply agreement with a major U.S. defense original equipment manufacturer. The deal makes Mears a strategic production supplier for critical hardware on existing products and a new airframe platform. It's a 10-year agreement, which in defense contracting terms means serious commitment.
The contract should generate approximately $100 million in revenue during the first three years alone, with continued production and sustainment opportunities stretching well beyond that initial period. Not bad for a Monday announcement.
Here's why Velo3D investors care: Mears Machine operates four state-of-the-art Velo3D Sapphire XC large platform Laser Powder Bed Printers as part of its advanced manufacturing capabilities. When your technology is being used to fulfill a nine-figure defense contract, that's a pretty solid validation of your product.
Mears is expanding hiring across manufacturing and operations functions to support program execution and planned growth, which suggests they expect this contract to keep them busy for years.
