Company: VLDXW
Filing Date: 2025-06-25
Form Type: DRS
Source: 0001641172-25-016496
Chunk: 83

Company: Velo3D, Inc.
Filing Date: 2025-06-25
Form: DRS
Chunk 83
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 decrease in depreciation of the equipment on lease and allocable Cost of Support Services as a result of fewer 3D Printers in service in the three months ended March 31, 2025, compared to the three months March 31, 2024.

Cost of Support Services was $1.1 million and $2.9 million for the three months ended March 31, 2025 and 2024, respectively. Cost of Support Services decreased by $1.8 million, due to the fixed costs associated with field service engineering labor and overhead in March 31, 2025, compared to March 31, 2024.

In addition, field service engineering support cost has increased specifically with regard to increasing sales 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 92.5% and 128.8% for the three months ended March 31, 2025 and 2024, respectively. The decrease in the cost of revenue as a percentage of revenue was primarily driven by lower cost associated with raw materials and direct labor efficiency improvements.

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.

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<div align='center'>Confidential Treatment Requested by Velo3D, Inc.

Pursuant to 17 CFR 200.83</div>

Gross Profit and Gross Margin

Total gross profit (loss) was $0.7 million and $(2.8) million for the three months ended March 31, 2025 and 2024, respectively. As a percentage of revenue, the gross margin was 7.5% and (28.8)% for the three months ended March 31, 2025 and 2024, respectively. The increase in gross profit for the three months ended March 31,