The average for the first exam is 61 %. That’s D-. I know personally one person who fails this course and end up with a B the next semester after retaking it. As for if everyone is doing badly, from what I can see, the gap of skill is wide in this course (125 students). Some kids are doing fine, while others are struggling and complaining ( I talked to three of them). It is a big lecture after all in a very diverse university. So a gap of skill is expected.
May I ask how can 40 % be an A? That would be an F according to the U.S. university system. Does your school follow this GPA style?
https://www.rapidtables.com/calc/grade/gpa-to-letter-grade-calculator.html