zSpace Reports Fourth Quarter and Full Year 2025 Financial Results
Rhea-AI Summary
zSpace (NASDAQ: ZSPC) reported fourth-quarter and full-year 2025 results showing meaningful margin improvement but sizable revenue and cash declines. Q4 revenue was $4.8M (vs. $8.5M year-ago); full-year revenue was $27.9M (vs. $38.1M). Gross margin expanded to 49% in Q4, driven by lower hardware costs and more company-owned software. Annualized Contract Value of renewable software was $9.9M and net loss widened to $7.3M in Q4 and $25.4M for the year. Recent financing actions include a $3.0M strategic investment and a $4.3M senior secured convertible note.
Positive
- Gross margin expanded +840 bps to 49% (Q4)
- Software & services mix increased to 53% of revenue in Q4 (+10 ppts)
- Restructuring cut run-rate operating expenses by more than 30%
- $7.3M of new committed capital ( $3.0M equity + $4.3M convertible note )
Negative
- Q4 revenue down ~43% to $4.8M year-over-year
- Full-year revenue down ~27% to $27.9M year-over-year
- Cash and equivalents fell to $1.0M from $4.9M year-over-year
- Annualized Contract Value decreased 12% and NDRR was 71%
Market Reaction – ZSPC
Following this news, ZSPC has declined 2.64%, reflecting a moderate negative market reaction. Our momentum scanner has triggered 3 alerts so far, indicating moderate trading interest and price volatility. The stock is currently trading at $0.11. This price movement has removed approximately $110K from the company's valuation.
Data tracked by StockTitan Argus (15 min delayed). Upgrade to Silver for real-time data.
Key Figures
Market Reality Check
Peers on Argus
ZSPC fell 12.29% while key peers showed mixed moves: TACT, KTCC, EBON and BTCT were down, but SCKT was up. Only one peer appeared in the momentum scanner, supporting a stock-specific reaction.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Nov 13 | Q3 2025 earnings | Neutral | +3.3% | Revenue decline but stronger gross margin and stable ACV metrics in Q3 2025. |
| Aug 14 | Q2 2025 earnings | Negative | -11.8% | Flat revenue, wider net loss and steep bookings decline amid funding pressures. |
| May 14 | Q1 2025 earnings | Positive | -10.1% | Improved margins and smaller loss despite year-over-year revenue decline. |
| Mar 27 | FY 2024 earnings | Negative | -19.6% | Lower full-year revenue and a wider net loss following IPO debut quarter. |
Earnings releases have generally coincided with share price declines, especially when highlighting revenue pressure despite margin gains.
Over the past year, zSpace’s earnings reports have shown a consistent pattern of revenue pressure alongside improving gross margins. Q1–Q3 2025 results highlighted declining or flat revenue but rising margins and ongoing net losses, while the 2024 full-year report similarly noted lower sales and a wider loss. Market reactions were often negative, with three of four earnings events seeing post-news declines, framing today’s report of lower 2025 revenue and a larger net loss against a backdrop of persistent financial strain.
Historical Comparison
In the last four earnings releases, ZSPC’s average move was -9.55%, mostly negative. Today’s -12.29% reaction to weaker 2025 revenue and a larger net loss is slightly more severe but directionally consistent.
Across recent earnings, zSpace has reported declining or flat revenue, improving gross margins, and persistent net losses. ACV has fluctuated, while backlog and funding uncertainty remained recurring themes, framing 2025’s lower revenue but higher margins and wider loss as a continuation of these trends.
Market Pulse Summary
This announcement details a challenging 2025, with revenue down to $27.9M and the net loss widening to $25.4M, but also highlights gross margin gains to 48–49% and a richer software mix. ACV slipped to $9.9M and bookings declined, while year-end cash fell to $1.0M, underscoring funding risk. Investors may watch future earnings, renewal metrics, booking trends, and capital-raising developments to gauge whether margin improvements can offset top-line and balance sheet pressure.
Key Terms
annualized contract value financial
net dollar revenue retention financial
adjusted ebitda financial
backlog financial
AI-generated analysis. Not financial advice.
SAN JOSE, Calif., March 30, 2026 (GLOBE NEWSWIRE) -- zSpace, Inc. (NASDAQ: ZSPC) (“zSpace” or the “Company”), a leading provider of augmented and virtual reality (AR/VR) solutions for education, is announcing its financial results for the three and twelve months ended December 31, 2025.
“Our fourth quarter results reflect continued progress against our strategic priorities and our focus on controlling what we can control,” said Paul Kellenberger, CEO of zSpace. “In the quarter, software and services comprised
Mr. Kellenberger continued, “We remain confident in the long-term potential of our business and our ability to execute with discipline, despite persistent macroeconomic and funding uncertainties. We’ve taken structural actions to align the company to the market environment – we’ve strengthened our balance sheet through new capital commitments, refinanced debt facilities, and continued to invest in innovation that positions zSpace for scalable, global growth. As federal education policy and funding mechanisms become more predictable, and as international opportunities normalize, we believe zSpace is well positioned to deliver sustainable value for our customers and shareholders over the long-term.”
Fourth Quarter 2025 Financial Summary vs. Same Year-Ago Period
- Revenue of
$4.8 million vs.$8.5 million - Software and services comprised
53% of revenue vs.43% - Gross margin of
49% vs.41% - Net loss of (
$7.3) million vs. ($3.6) million - Adjusted EBITDA of (
$3.7) million vs. ($2.4) million
Full Year 2025 Financial Summary vs. Same Year-Ago Period
- Revenue of
$27.9 million vs.$38.1 million - Software and services comprised
49% of revenue vs.42% - Gross margin of
48% vs.41% - Net loss of (
$25.4) million vs. ($20.8) million - Adjusted EBITDA of (
$14.8) million vs. ($9.9) million
Recent Business Highlights
- On November 18, 2025, zSpace announced the zStylus One, a next-generation AI-enabled stylus featuring patented embedded sensors and machine-learning-powered tracking, eliminating external modules and simplifying AR deployment across the Inspire and Imagine product lines.
- On December 11, 2025, zSpace completed a strategic restructuring initiative, reducing run-rate operating expenses by more than
30% and strengthening its financial foundation while maintaining focus on delivering innovative AR/VR solutions across STEM and CTE programs. - On January 29, 2026, zSpace announced a
$3 million strategic investment from Planet One Education, enhancing liquidity, supporting working capital, and establishing a foundation for potential international collaboration to expand STEM and vocational programs in key global markets. - On February 17, 2026, zSpace highlighted its expanding footprint across Italy, with new school deployments, educator-led training initiatives, university-level research in workforce safety, and national visibility through a featured demonstration during an official visit by the President of Italy.
- On March 17, 2026, zSpace announced an additional
$4.3 million senior secured convertible note, providing the Company with enhanced working capital, supporting general corporate purposes and enabling partial repayment of existing debt under its ongoing capital structure optimization efforts. - On March 18, 2026, Bellflower Unified School District expanded its use of zSpace AR/VR technology at Mayfair High School, opening a 36-station zSpace Inspire lab to support immersive career exploration and CTE-focused instruction.
- On March 25, 2026, zSpace and Atlanta Public Schools celebrated nearly a decade of impact using immersive AR/VR, showcasing district-wide STEM integration, nationally recognized innovation and expanded career-focused learning supported by 24 zSpace workstations at the Atlanta College and Career Academy.
Fourth Quarter and Full Year 2025 Financial Results
Revenue in the fourth quarter of 2025 was
Gross margins increased 840 basis points to
Annualized Contract Value (“ACV”) of renewable software at December 31, 2025, was
Net Dollar Revenue Retention (NDRR) at December 31, 2025, was
Bookings in the fourth quarter of 2025 were
Operating expenses, excluding stock-based compensation expense, in the fourth quarter of 2025 were
Net loss in the fourth quarter of 2025 was (
Balance Sheet
As of December 31, 2025, zSpace had approximately
Conference Call
zSpace will host a conference call at 5:00 p.m. ET / 2:00 p.m. PT on Monday, March 30, 2026, with the Company’s Chief Executive Officer, Paul Kellenberger, and the Company’s Chief Financial Officer, Erick DeOliveira. A live webcast of the call will be available on the Events and Presentations section of zSpace’s investor relations website.
To access the call by phone, please use this registration link and you will be provided with dial-in details.
To avoid delays, participants are encouraged to dial into the conference call 15 minutes ahead of the scheduled start time. A replay of the webcast will also be available for a limited time on the Company’s website.
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.
Key Metric Definitions
We monitor the following key metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. The calculation of the key metrics discussed below may differ significantly from other similarly titled metrics used by other companies, analysts, investors and other industry participants.
We reference bookings in this press release, which is an internal operational measure of the business. Bookings represent customer orders that have hardware, software and service components. Bookings indicate future revenue, which lags based on product shipping date, monthly recognition of certain subscription revenue and service delivery completion.
We reference Annualized Contract Value (ACV) in this press release, which is an internal operational measure of the business. To monitor our ability to retain and grow our customer base for our software we monitor the annualized contract value of active renewable software licenses.
We reference Net Dollar Revenue Retention (NDRR) in this press release, which is an internal operational measure of the business. We calculate our NDRR as of a given period end by starting with the ACV from all customers with contracts of at least
Bookings, ACV, and NDRR are non-GAAP financial measures (U.S. generally accepted accounting principles). These non-GAAP measures may not be comparable to similarly titled measures being disclosed by other companies. Management believes that presenting these non-GAAP financial measures provide investors with additional analytical tools which are useful in evaluating our operating results and the ongoing performance of our underlying businesses because they (i) provide meaningful supplemental information regarding financial performance by excluding impact of one-time items and other items affecting comparability between periods, (ii) permit investors to view performance using the same tools that management uses to budget, make operating and strategic decisions, and evaluate our core operating performance across periods, and (iii) otherwise provide supplemental information that may be useful to investors in evaluating our financial results. We do not, nor do we suggest that investors, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
Forward-Looking Statements
Certain statements contained in this press release about future expectations, plans and prospects, as well as any other statements regarding matters that are not historical facts, may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements relating to the long-term potential of our business, ability to execute with discipline, our positioning for scalable, global growth and delivering sustainable value for our customers and shareholders. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including the uncertainties related to market conditions and other factors discussed in the "Risk Factors" section of the Company's filings with the SEC. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Any forward-looking statements contained in this press release speak only as of the date hereof, and zSpace, Inc. specifically 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.
FINANCIAL TABLES – STATEMENTS OF OPERATIONS AND BALANCE SHEETS
| STATEMENTS OF OPERATIONS | |||||||||||||||||
| 3 Months Ended December 31, | Year Ended December 31, | ||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||
| Revenue | $ | 4,847 | $ | 8,535 | $ | 27,858 | $ | 38,098 | |||||||||
| Cost of goods sold | 2,465 | 5,063 | 14,597 | 22,529 | |||||||||||||
| Gross profit | 2,382 | 3,472 | 13,261 | 15,569 | |||||||||||||
| Gross profit % | 49.1 | % | 40.7 | % | 47.6 | % | 40.9 | % | |||||||||
| Operating expenses: | |||||||||||||||||
| Research and development | 1,361 | 805 | 5,298 | 4,893 | |||||||||||||
| Selling and marketing | 3,942 | 3,783 | 16,232 | 15,915 | |||||||||||||
| General and administrative | 2,713 | 1,648 | 13,872 | 12,419 | |||||||||||||
| Total operating expenses | 8,016 | 6,236 | 35,402 | 33,227 | |||||||||||||
| Loss from operations | (5,634 | ) | (2,764 | ) | (22,141 | ) | (17,658 | ) | |||||||||
| Other (expense) income: | |||||||||||||||||
| Interest expense | (369 | ) | (580 | ) | (1,478 | ) | (2,815 | ) | |||||||||
| Other income, net | 42 | 25 | 190 | 43 | |||||||||||||
| Loss on extinguishment of debt | — | (307 | ) | — | (359 | ) | |||||||||||
| Loss on change in fair value of convertible debt | (1,322 | ) | — | (1,945 | ) | — | |||||||||||
| Loss before income taxes | (7,283 | ) | (3,626 | ) | (25,374 | ) | (20,789 | ) | |||||||||
| Income tax expense | 2 | — | 14 | 34 | |||||||||||||
| Net loss | $ | (7,285 | ) | $ | (3,626 | ) | $ | (25,388 | ) | $ | (20,823 | ) | |||||
| BALANCE SHEET | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Selected Balance Sheet Information: | ||||||||
| Cash, cash equivalents and restricted cash | $ | 1,021 | $ | 4,864 | ||||
| Accounts receivable, net | $ | 1,438 | $ | 3,176 | ||||
| Inventory, net | $ | 2,404 | $ | 3,238 | ||||
| Total Assets | $ | 7,586 | $ | 13,532 | ||||
| Accounts payable & accrued expenses | $ | 7,784 | $ | 11,021 | ||||
| Convertible, other debt and accrued interest | $ | 20,079 | $ | 13,557 | ||||
| Total liabilities | $ | 30,094 | $ | 28,220 | ||||
| Stockholders' deficit | $ | (22,508 | ) | $ | (14,688 | ) | ||
| Total Liabilities and Stockholders' Deficit | $ | 7,586 | $ | 13,532 | ||||
Contacts
Press Contact:
Amanda Austin
press@zspace.com
408-498-4050
Investor Relations Contact:
Gateway Group
Cody Slach, Greg Robles
949.574.3860
ZSPC@gateway-grp.com
FAQ
What were zSpace (ZSPC) revenue and gross margin in Q4 2025?
How did zSpace (ZSPC) perform for full-year 2025 compared to 2024?
What is zSpace’s software Annualized Contract Value (ACV) and retention at year-end 2025?
How much new capital did zSpace (ZSPC) secure around early 2026 and why does it matter?
What operational cost actions did zSpace announce in 2025?
What is zSpace’s reported cash position at December 31, 2025 and its significance?
