Company: XCH
Filing Date: 2025-04-23
Form Type: 20-F
Source: 0000950170-25-056976
Chunk: 103

Company: XCHG Ltd
Filing Date: 2025-04-23
Form: 20-F
Item: Item 5
Chunk 103
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  Cost of revenues              (in thousands, except for percentages)                                                                    
 ──────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
  Cost of products sold                                                     16,723      56.8      18,143      47.1      18,038      42.7  
  Shipping costs                                                             1,257       4.3         964       2.5         855       2.0  
  Share based compensation                                                       —         —           —         —         549       1.3  
  Others (1)                                                                   739       2.5       1,831       4.8       1,539       3.7  
  Total                                                                     18,719      63.6      20,938      54.4      20,981      49.7  

Note:

(1)

Primarily consist of warranty costs, write-downs of inventories and other costs.

We expect our cost of revenues to increase in absolute amount in line with our expansion of business and customer base growth, and to decrease as a percentage of our revenues in the long run through economies of scale and improvement of operating efficiency.

Gross Profit

Gross profit is equal to our total revenues less cost of revenues. Gross profit as a percentage of our total revenues is referred to as gross margin. In 2022, 2023 and 2024, our gross profit was US$10.7 million, US$17.6 million and US$21.2 million, respectively, and our gross margin was 36.4%, 45.6% and 50.3%, respectively.

Operating Expenses

Our operating expenses consist of selling and marketing expenses, research and development expenses, general and administrative expenses. In 2022, 2023 and 2024, our operating expenses amounted to US$9.1 million, US$24.5 million and US$33.3 million, respectively, representing 30.9%, 63.7% and 78.9% of our revenues in the same periods, respectively. The following table sets forth a breakdown of our operating expenses, in absolute amounts and as percentages of our total revenues, for the periods indicated.

                                           For the Year Ended December 31,                                                                          
                                           2022                                                                                                     
                                           US$                                                                                                      
  Operating expenses                       (in thousands, except for percentages)