Company: VLDXW
Filing Date: 2025-08-07
Form Type: S-1
Source: 0001641172-25-022475
Chunk: 86

Company: Velo3D, Inc.
Filing Date: 2025-08-07
Form: S-1
Chunk 86
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 six months ended June 30, 2025 and 2024, respectively. The increase
of $1.4 million was due to the higher overhead and labor absorption to manufacture the systems which were started in 2024 and sold in
2025, offset by the product mix and decrease in the number of systems sold, for the six months ended June 30, 2025, compared to the six
months ended June 30, 2024. The Cost of 3D Printer also included cost for printed parts and consumables.

Cost of Recurring Payment was less than $0.1
million and $0.5 million for the six months ended June 30, 2025 and 2024, respectively. This decrease of $0.5 million was primarily due
to a decrease in depreciation of the equipment subject to operating lease and allocable Cost of Support Services as a result of fewer
3D Printers in service in the six months ended June 30, 2025, compared to the six months June 30, 2024.

Cost of Support Services was $2.2 million
and $5.2 million for the six months ended June 30, 2025 and 2024, respectively. Cost of Support Services decreased by $2.9 million, due
to reliability improvement efforts that the Company undertook in 2024 leading to lower field service engineering labor and overhead in
June 30, 2025, compared to June 30, 2024. We expect this to decrease on a per unit basis as the Sapphire XC, Sapphire 1MZ and Sapphire
XC 1MZ system reliability 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 103.9% 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