Company: VLDXW
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001641172-25-022448
Chunk: 75

Company: Velo3D, Inc.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 1
Chunk 75
---
 and 128.4% for the six months ended June 30, 2025 and 2024, respectively. The decrease
in the cost of revenue as a percentage of revenue was primarily driven by product mix and improvements in the average selling price of
3D Printers.

We
may experience increasing component costs from our suppliers due to international tariffs and our current financial situation. We are
currently unable to secure credit terms and 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.

39

Gross
Profit and Gross Margin

Total
gross profit (loss) was $(0.9) million and $(5.7) million for the six months ended June 30, 2025 and 2024, respectively. As a percentage
of revenue, the gross margin was (3.9)% and (28.4)% for the six months ended June 30, 2025 and 2024, respectively. The increase in gross
profit for the six 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 six months
ended June 30, 2025, as compared to the six 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 $5.1 million and $9.6 million for the six months ended June 30, 2025