zSpace Announces Strategic Restructuring to Strengthen Financial Foundation

Rhea-AI Summary

zSpace (NASDAQ: ZSPC) announced on December 11, 2025 the completion of a strategic restructuring to optimize costs, improve operational efficiency, and strengthen its financial foundation.

The plan included material headcount reductions primarily within the U.S. and operational realignments that the company says will reduce its run-rate operating expenses by over 30%. Management framed the actions as positioning zSpace for long-term profitability, expanded global footprint, and continued leadership in AR/VR learning for K-12, CTE, and vocational programs.

Positive

• Run-rate operating expenses reduced by over 30%
• Restructuring completed to improve financial stability and focus
• Flagship platforms continue gaining traction in K-12 and CTE deployments

Negative

• Material headcount reductions primarily in the U.S.
• Company performance was impacted by macro headwinds this year

Key Figures

Run-rate opex cut over 30% Expected reduction in operating expenses from restructuring

Q3 2025 revenue $8.8 million Down from $14.2 million a year ago

Prior-year revenue $14.2 million Q3 2024 comparison figure

Q3 2025 net loss $6.2 million Quarter ended September 30, 2025

Nine-month net loss $18.1 million Nine months ended September 30, 2025

Cash balance $4.3 million Cash, cash equivalents and restricted cash as of Sept 30, 2025

Total liabilities $33.1 million As of September 30, 2025

Convertible note proceeds $13.0 million Senior secured convertible note issued April 2025

Market Reality Check

$0.5030 Last Close

Volume Volume 1,290,594 vs 20-day average 1,394,276 (relative volume 0.93x). normal

Technical Shares at $0.50, trading below 200-day MA of $4.20 and 98.13% under the 52-week high.

Peers on Argus

Peers show mixed moves: TACT -0.45%, KTCC +3.14%, BTCT +2.63%, SCKT +4.13%, EBON flat. ZSPC’s -7.36% move appears stock-specific rather than sector-driven.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Dec 09	CTE app expansion	Positive	+1.9%	Expanded CTE AR/VR applications and new AI features for training.
Dec 02	Customer deployment	Positive	-0.9%	Dental assistant program adoption of Inspire 2 and Dental Anatomy app.
Nov 25	K-12 lab rollout	Positive	-15.2%	Standalone zSpace lab deployment for 1,000 middle school students.
Nov 19	New training app	Positive	-20.6%	Launch of Precision Measurement AR/VR training app for CTE programs.
Nov 18	AI stylus launch	Positive	+17.8%	Announcement of patented zStylus One with embedded sensors and ML.

Pattern Detected

Recent operational and product news has produced mixed reactions, with several positive announcements followed by notable downside moves, alongside occasional sharp upside spikes.

Recent Company History

Over the past month, zSpace has focused on expanding its AR/VR education ecosystem, adding new CTE applications, unveiling Precision Measurement for workforce training, and highlighting deployments in K‑12 and dental assistant programs. A patented, AI‑enabled zStylus One was also introduced on Nov. 18, 2025. Market reactions have been inconsistent: some innovation updates saw gains up to 17.81%, while other seemingly positive adoption and product news led to declines as steep as -20.59%. Today’s restructuring update follows this period of intensive product and market activity.

Market Pulse Summary

The stock surged +20.9% in the session following this news. A strong positive reaction aligns with management’s emphasis on restructuring to cut run‑rate operating expenses by over 30%, following prior disclosures of revenue declines and liquidity pressure, including a Q3 net loss of $6.2 million and cash of $4.3 million. Historically, some innovation updates triggered sharp gains up to 17.81%. However, past downside moves after positive news and the company’s stockholders’ deficit of $19.7 million highlight that balance sheet risk could temper or reverse enthusiasm.

Key Terms

augmented reality technical

"a global leader in immersive augmented reality (AR) learning solutions for education"

Augmented reality is technology that layers computer-generated images, information or sounds onto your view of the real world through devices like phones, tablets or smart glasses — like seeing navigation arrows or product labels projected onto what you’re looking at. It matters to investors because it creates new ways to sell hardware, software, services and ads, can change customer engagement and recurring revenue models, and carries adoption and privacy risks that affect company value.

virtual reality technical

"delivering innovative augmented and virtual reality (AR/VR) experiences that drive achievement"

Virtual reality is a computer-created, immersive environment experienced through headsets and related hardware that replaces your view of the real world with sights and sounds, sometimes including motion or touch—like stepping into a digital room. For investors it matters because VR is a platform for new products and services (games, training, virtual meetings, advertising) where hardware sales, software ecosystems and user engagement determine who captures long-term revenue and growth.

run-rate operating expenses financial

"These actions are expected to reduce the company’s run-rate operating expenses by over 30%"

Run-rate operating expenses are an annualized estimate of a company's ongoing day-to-day costs derived from its current spending level, treating a recent month or quarter as if it will continue for a full year. Investors use this to gauge the company’s likely cost base and cash burn going forward—like turning a single month’s utility bill into an expected yearly bill—to judge sustainability, profitability and how much funding may be required.

senior secured convertible note financial

"zSpace entered a senior secured convertible note for gross proceeds of $13.0 million"

A senior secured convertible note is a loan a company takes that is backed by specific assets and has first claim on repayment ahead of other creditors, but can also be exchanged for company shares under agreed conditions. For investors it signals higher priority if the company struggles (like a mortgage holder vs a general creditor) while also creating potential stock dilution if the loan is converted into equity, affecting value and recovery prospects.

equity line of credit financial

"The company also established a $30 million equity line of credit"

An equity line of credit is a loan that allows homeowners to borrow money against the value of their property, similar to having a flexible credit card secured by their home. It matters to investors because it provides a way for property owners to access cash for various needs, which can influence real estate markets and overall economic activity. This type of credit offers ongoing borrowing capacity, making it a valuable financial tool for those with significant property equity.

going concern financial

"Management disclosed “substantial doubt” about the company’s ability to continue as a going concern."

A going concern is a business that is expected to continue its operations and meet its obligations for the foreseeable future, rather than shutting down or selling off assets. This assumption matters to investors because it indicates stability and ongoing profitability, making the business a more reliable investment. Think of it as believing a restaurant will stay open and serve customers, rather than closing down suddenly.

restricted stock unit financial

"taxes following an earlier restricted stock unit vesting"

A restricted stock unit is a promise from a company to give an employee shares of stock after certain conditions are met, like staying with the company for a set amount of time. It’s like earning a bonus that turns into company stock once you’ve proven your commitment, making it a way to motivate and reward employees.

VWAP financial

"reducing the 20‑day minimum VWAP from $1.98 to $0.75"

VWAP, or Volume-Weighted Average Price, is a way to find the average price of a stock throughout the trading day, giving more importance to times when more shares are traded. It helps traders see the typical price and decide whether a stock is expensive or cheap compared to its average, similar to finding the average speed during a trip by giving more weight to times when you traveled faster or slower.

AI-generated analysis. Not financial advice.

SAN JOSE, Calif., Dec. 11, 2025 (GLOBE NEWSWIRE) -- zSpace, Inc. (NASDAQ: ZSPC), a global leader in immersive augmented reality (AR) learning solutions for education, today announced the successful completion of a comprehensive strategic restructuring designed to optimize its cost structure, enhance operational efficiency, and position the company for sustained long-term success. This initiative reflects zSpace’s commitment to adapting to evolving market dynamics while maintaining its focus on delivering innovative augmented and virtual reality (AR/VR) experiences that drive achievement in STEM, CTE, and career readiness programs.

The restructuring included material headcount reductions and targeted operational alignments, primarily within its U.S. business, given the macro headwinds impacting performance this year. These actions are expected to reduce the company’s run-rate operating expenses by over 30%, strengthening its financial profile and creating a more resilient foundation to capitalize on growth opportunities in edtech and immersive learning, both domestically and internationally.

“As we emerge from this restructuring, zSpace is more focused and better equipped to drive value for our customers, partners, and shareholders,” said Paul Kellenberger, CEO of zSpace. “By aligning our resources with our core strengths and market conditions, we’ve not only enhanced our financial stability but also positioned ourselves for future growth. We’re optimistic about the future, with a focus on profitability and continued leadership in transforming how people learn and train through AR/VR experiences.”

zSpace remains dedicated to its mission of making immersive learning accessible and effective. The company’s flagship platforms continue to gain traction in K-12 education and CTE/Vocational training, with recent partnerships and deployments underscoring demand for its solutions. Looking ahead, zSpace is well-positioned to leverage these advancements, expand its global footprint, and deliver enhanced value to stakeholders.

For more information about zSpace and its innovative AR/VR solutions, visit www.zspace.com.

About zSpace
zSpace, Inc. (NASDAQ: ZSPC) delivers innovative augmented and virtual reality (AR/VR) experiences that drive achievement in STEM, CTE, and career readiness programs. Trusted by over 3,500 school districts, technical centers, community colleges, and universities, zSpace enables hands-on "learning by doing" experiences proven to improve engagement and student outcomes. Headquartered in San Jose, California, zSpace holds more than 80 patents, with research published in the Journal of Computer Assisted Learning (2021) validating the impact of 3D virtual reality technologies on student knowledge gains.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding our ability to optimize the Company’s cost structure, enhance operational efficiency and position the company for sustained long-term success, the anticipated reduction in operating expenses, the Company’s expected financial profile and resilience, the Company’s ability to capitalize on growth opportunities in edtech and immersive learning, statements regarding the Company’s future growth, profitability and continued leadership, and the anticipated expansion of the global footprint and enhanced value to stakeholders. These statements are based on current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Factors that could cause such differences include, but are not limited to general economic conditions and other factors discussed in the Risk Factors section of the Company’s filings with the SEC. Any forward-looking statements contained in this press release speak only as of the date hereof, and zSpace, Inc. disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

Press Contact:
Amanda Austin
Senior Marketing Director, zSpace, Inc.
press@zspace.com

Investor Relations Contact:
Gateway Group
Cody Slach, Greg Robles
949.574.3860 | ZSPC@gateway-grp.com

FAQ

What did zSpace (ZSPC) announce on December 11, 2025?

zSpace announced completion of a strategic restructuring including material headcount reductions and operational realignments.

How much will zSpace (ZSPC) reduce operating expenses after the restructuring?

The company announced the actions are expected to reduce run-rate operating expenses by over 30%.

Did zSpace (ZSPC) cut jobs as part of the December 2025 restructuring?

Yes; the restructuring included material headcount reductions, primarily within the U.S.

What is the intended impact of zSpace's (ZSPC) restructuring for investors?

Management says the restructuring strengthens financial stability and positions the company to pursue profitability and growth.

Will zSpace (ZSPC) continue selling AR/VR solutions after the restructuring?

Yes; the company stated its flagship AR/VR learning platforms continue to gain traction in K-12 and CTE/vocational training.

What drove zSpace (ZSPC) to restructure in 2025?

The company cited evolving market dynamics and macro headwinds that impacted performance this year.