Company: VLDXW
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001641172-25-022448
Chunk: 16

Company: Velo3D, Inc.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 1
Chunk 16
---
 expected impact would only be to the financial statement disclosures. The Company is currently evaluating the impact
of this accounting standard update on the Company’s condensed consolidated interim financial statements and related disclosures.

Licensing
Revenue

Our
revenue is partially derived from the licensing of computer software products and from their related maintenance contracts. We enter
into contracts that include combinations of products, maintenance and services, which are accounted for as separate performance obligations
with differing revenue recognition patterns.

Revenue
from perpetual licenses is classified as software license revenue. Software license revenue is recognized up front upon delivery of the
licensed product and/or the utility that enables the customer to access authorization keys, provided that an enforceable contract has
been received. Typically, our perpetual licenses are sold with post-contract support (“PCS”), which includes unspecified technical
enhancements and customer support. We allocate value in bundled perpetual and PCS arrangements based on the standalone selling prices
of the perpetual license and PCS. Revenue from PCS is classified as maintenance revenue and is recognized either (i) ratably over the
term of the contract or (ii) as the customer support is used at a specified hourly rate, as we satisfy the PCS performance obligation.

    9

In
addition to perpetual licenses, we sell time-based subscription licenses. Subscription licenses may be sold as a bundled arrangement
that includes the rights to a term software license and PCS. Utilizing observable inputs, we determine a certain percentage of the estimated
standalone selling price of the subscription lease license is attributable to the term license and the remainder is attributable
to the PCS, based on factors pursuant to each arrangement. This determination considered the value relationship for our products between
PCS and time-based subscription lease licenses, the value relationship between PCS and perpetual licenses, the average economic life
of our products, software renewal rates and the price of the bundled arrangement in relation to the perpetual licensing approach. Consistent
with the perpetual sales, the license component is classified as software license revenue and recognized as revenue up front upon delivery
of the licensed product and/or utility that enables the customer to access authorization keys. The PCS is classified as maintenance revenue
and is recognized ratably over the term of the contract, as we satisfy the PCS performance obligation.

Product
Warranties

Our
3D printers are sold with a warranty period of typically one year from installation. After the warranty period, we generally offer service
contracts that enable our customers to continue service and maintenance coverage. These service contracts are offered with various levels