Company: VLDXW
Filing Date: 2025-08-07
Form Type: S-1
Source: 0001641172-25-022475
Chunk: 87

Company: Velo3D, Inc.
Filing Date: 2025-08-07
Form: S-1
Chunk 87
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 our cost of revenue until our
financial conditions improve and costs associated with tariffs ease.

Gross Profit and Gross Margin

Total gross profit (loss) was $(0.9) million
and $(5.7) million for the six months ended June 30, 2025 and 2024, respectively. As a percentage of revenue, the gross margin was (3.9)%
and (28.4)% for the six months ended June 30, 2025 and 2024, respectively. The increase in gross profit for the six months ended June
30, 2025 was primarily attributable to product mix and improvements in the average selling price of 3D Printers, offset by the historical
higher manufacturing cost of systems started in 2024 but sold in 2025 during the six months ended June 30, 2025, as compared to the six
months ended June 30, 2024.

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

| ● | Product mix of Sapphire, and Sapphire XC systems; |
| ● | Average selling prices for our systems;           |

| 56 |

| ● | Trends in materials and shipping costs;                                                       |
| ● | Production volumes that may impact factory overhead absorption;                               |
| ● | System reliability performance; and                                                           |
| ● | Impact of product mix changes, including new product introductions, and other factors, on our 
 Cost of Support Services.                                                                     |

Due to the aforementioned trends in customer
orders and component costs, our gross profit and gross margin have been and will continue to be negatively impacted until our financial
conditions improve.

Research and Development Expenses

Research and development expenses were $5.1
million and $9.6 million for the six months ended June 30, 2025 and 2024, respectively, a decrease of $4.5 million. The decrease in research
and development expenses was driven by a $2.5 million decrease in headcount, salaries and employee-related expenses, a decrease of $1.4
million in stock-based compensation, a decrease of $0.6 million in other research and development expenses.

We expect research and development costs to
remain at similar levels for the remainder of 2025 due to the maturation of our Sapphire family of systems and certain investments in
improvements current product line and to increase in the long term as we continue to invest in enhancing and advancing our portfolio
of AM solutions.

Selling