Company: VLDXW
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001641172-25-022448
Chunk: 68

Company: Velo3D, Inc.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 1
Chunk 68
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 volume discounts with our suppliers, causing us to pay a premium, in advance, or source from
alternate suppliers at unfavorable terms for our products. This has negatively impacted our cost of revenue and will continue to negatively
impact our cost of revenue until our financial conditions improve and costs associated with tariffs ease.

Gross
Profit and Gross Margin

Total
gross profit (loss) was $(1.6) million and $(2.9) million for the three months ended June 30, 2025 and 2024, respectively. As a percentage
of revenue, the gross margin was (11.7)% and (28.0)% for the three months ended June 30, 2025 and 2024, respectively. The increase in
gross profit for the three months ended June 30, 2025 was primarily attributable to product mix and improvements in the average selling
price of 3D Printers, offset by the historical higher manufacturing cost of systems started in 2024 but sold in 2025 during the three
months ended June 30, 2025, as compared to the three months ended June 30, 2024.

Our
gross profit and gross margin are influenced by a number of factors, including:

    ●
    Product
    mix of Sapphire, and Sapphire XC systems;

    ●
    Average
    selling prices for our systems;

    ●
    Trends
    in materials and shipping costs;

    ●
    Production
    volumes that may impact factory overhead absorption;

    ●
    System
    reliability performance; and

    ●
    Impact
    of product mix changes, including new product introductions, and other factors, on our Cost of Support Services.

Due
to the aforementioned trends in customer orders and component costs, our gross profit and gross margin have been and will continue to
be negatively impacted until our financial conditions improve.

Research
and Development Expenses 

Research
and development expenses were $2.8 million and $4.5 million for the three months ended June 30, 2025 and 2024, respectively, a decrease
of $1.7 million. The decrease in research and development expenses was driven by a $1.0 million decrease in headcount, salaries and employee-related
expenses, a decrease of $0.5 million in stock-based compensation, a decrease of $0.2 million in research and development expenses.

We
expect research and development costs to remain at similar levels for the remainder of 202