Company: VLDXW
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0000950170-25-047760
Chunk: 15

Company: Velo3D, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 7
Chunk 15
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 31, 2024 and 2023, respectively. This increase of $0.1 million was primarily attributable to the costs for preventative maintenance, costs incurred to enhance system reliability performance, and field service engineering labor costs due to more 3D Printers in service in 2024 compared to 2023. 

In addition, field service engineering support cost has increased specifically with the ramp of Sapphire XC systems and introduction of the Sapphire 1MZ and Sapphire XC 1MZ systems in the field. We expect this to decrease on a per unit basis as the Sapphire XC, Sapphire 1MZ and Sapphire XC 1MZ system performance improves. We also expect our Cost of Support Services will increase with the delivery of more 3D Printer systems to customers. 

Cost of revenue as a percentage of revenue was 105.1% and 133.9% for the years ended December 31, 2024 and 2023, respectively. The decrease in the cost of revenue as a percentage was primarily due to the change in our product mix towards more Sapphire XC, and Sapphire XC 1MZ systems compared to Sapphire systems. Additionally, the decrease was also driven by changes in our business strategy due to our Strategic Realignment to improve efficiency and reduce overhead.

We continue to focus on reducing our material costs through improved purchasing and inventory planning, accelerating production cycle times and improving efficiencies on the production floor to lower our cost of revenue.

We expect our cost of revenue to improve as we address the challenges that impact our production.

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Gross (Loss) and Gross Margin

Total gross loss was $(2.1) million and $(26.3) million for the years ended December 31, 2024 and 2023, respectively. As a percentage of revenue, the gross margin was (5.1)% and (33.9)% for the years ended December 31, 2024 and 2023, respectively. The higher gross loss for the year ended December 31, 2024 was primarily attributable to the change in the mix of Sapphire and Sapphire XC system sales, the operational and overhead improvement as a result of the Strategic Realignment offset by a decreased number of systems sold in 2024, as compared to 2023.

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

•Product mix of Sapphire, Sapphire XC, Sapphire 1MZ and Sapphire XC 1MZ systems;

•Average selling prices for our systems;

•Trends in materials and