Company: MVIS
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021931
Chunk: 4

Company: MICROVISION, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 2
Chunk 4
---
, 
    $957  
     397.1  
    $583  
     306.8  
    $374  
     64.2 
  
    Nine Months Ended September 30, 
     2,223  
     225.7  
     3,414  
     112.1  
     (1,191) 
     (34.9)

Cost
of revenue includes both direct and allocated indirect costs of products and services sold to customers. Direct costs include labor,
materials, reserves for estimated warranty expenses, and other costs incurred directly, or charged to us by our contract manufacturers,
in the manufacture of these products. Indirect costs include labor, overhead, and other costs associated with operating our manufacturing
capabilities and our research and development department. Overhead includes the costs of procuring, inspecting and storing material,
facility and other costs, and is allocated to cost of revenue based on the proportion of indirect labor which supported revenue activities.

Cost
of revenue can fluctuate significantly from period to period, depending on the product mix and volume, the level of overhead expense
and the volume of direct material purchased. The decrease in cost of revenue for the three and nine months ended September 30, 2025 compared
to the same periods in 2024 was primarily due to decreased revenue and the revenue mix.

Research
and Development Expense

    (in thousands) 
    2025  
    2024  
    $
    change  
    %
    change 
  
    Three Months Ended September 30, 
    $7,978  
    $8,736  
    $(758) 
     (8.7)
  
    Nine Months Ended September 30, 
     23,039  
     40,251  
     (17,212) 
     (42.8)

Research
and development expense consists of compensation related costs of employees and contractors engaged in internal research and product
development activities, direct material to support development programs, laboratory operations, outsourced development and processing
work, and other operating expenses. We assign our research and development resources based on the business opportunity of the available
projects, the skill mix of the resources available and the contractual commitments we have made to our customers. We believe that a substantial
level of continuing research and development expense will be required to further develop our scanning technology.

The
decrease in research and development expense during the three