Company: VLDXW
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001641172-25-022448
Chunk: 61

Company: Velo3D, Inc.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 1
Chunk 61
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. For usage above that level, the customer typically pays an hourly usage fee. Most of our leases have a 12-month term,
though in some instances the lease term is longer.

Under
this model, the customer typically pays a base rent and variable payments based on usage in excess of a defined threshold. Most of our
leases have a 12-month term, though in certain cases the lease term is longer.

Rapid
Production Solutions (“RPS”) - RPS utilizes our deep engineering expertise, cutting-edge technology and a fleet of Sapphire
XC large-format metal 3D printers to manufacture custom metal components in order to accelerate path to production for our customers.
RPS revenue is included under 3D Printer revenue.

Support
Services - are included with most 3D Printer sale transactions and Recurring Payment transactions. Support services consist of field
service engineering, phone and email support, preventative maintenance, and limited on and off-site consulting support. A subsequent
Extended Support Agreement is available for renewal after the initial contract period based on the then-fair value of the service, which
is paid for separately. Support Service revenue is recognized over the contract period beginning with customer performance test acceptance.

Cost
of Revenue

Our
cost of revenue includes the “Cost of 3D Printers,” “Cost of Recurring Payment” and “Cost
of Support Services.”

Cost
of 3D Printers includes the manufacturing cost of our components and subassemblies purchased from vendors for the assembly, as well as
raw materials and assemblies, shipping costs and other directly associated costs. Cost of 3D Printers also includes allocated overhead
costs from headcount-related costs, such as salaries, stock-based compensation, depreciation of manufacturing related equipment and facilities,
and information technology costs.

Cost
of Recurring Payment includes depreciation of the leased equipment over the useful life of five years less the residual value, and an
allocated portion of Cost of Support Services.

Cost
of RPS includes cost of raw materials, typically metal powder feedstock, direct and indirect labor, depreciation of 3D printers and other
related equipment and facilities, utilities such as electricity and specialty gases, shipping costs and other directly associated costs.
Cost of RPS is included under 3D Printer cost of revenue.

Cost
of Support Services includes the cost of spare or replacement parts for preventive maintenance, installation costs, headcount-related
costs such as salaries, stock-based compensation, depreciation of manufacturing related equipment and facilities, and information technology
costs