Deeper 2025 loss as zSpace (NASDAQ: ZSPC) revenue declines

Filing Impact

(Moderate)

Filing Sentiment

(Neutral)

Form Type

8-K

Rhea-AI Filing Summary

zSpace, Inc. reported weaker fourth quarter and full-year 2025 results, with both revenue and losses moving in an unfavorable direction. Fourth quarter revenue fell to $4.8 million from $8.5 million a year earlier, while full-year revenue declined to $27.9 million from $38.1 million.

Despite the revenue drop, profitability on each dollar of sales improved. Fourth quarter gross margin rose to 49.1% from 40.7%, and full-year gross margin increased to 47.6% from 40.9%, helped by better hardware costs and a higher mix of company-owned software. However, operating expenses grew, and net loss widened to ($7.3) million in the quarter and ($25.4) million for the year.

The balance sheet shows pressure, with cash, cash equivalents and restricted cash at $1.0 million as of December 31, 2025, down from $4.9 million a year earlier, while total liabilities rose to $30.1 million. Software-focused metrics were also soft: Annualized Contract Value of renewable software fell to $9.9 million, Net Dollar Revenue Retention was 71% for larger customers, and 2025 bookings declined, leaving a backlog of $3.6 million at year-end.

Positive

None.

Negative

Sharp revenue and bookings declines: 2025 revenue fell to $27.9 million from $38.1 million and bookings dropped to $26.1 million from $39.7 million, signaling weaker demand.
Widening losses and weak liquidity: Full-year net loss increased to $25.4 million, year-end cash fell to $1.0 million, while total liabilities rose to $30.1 million and stockholders’ deficit deepened.

Insights

zSpace shows margin gains but faces revenue declines and tight liquidity.

zSpace delivered better gross margins, with 2025 gross margin at 47.6% versus 40.9% in 2024, driven by improved hardware costs and a richer software mix. Software and services represented 53% of fourth quarter revenue, supporting this shift toward higher-margin offerings.

At the same time, top-line and demand indicators weakened. Revenue fell to $27.9M from $38.1M, bookings dropped to $26.1M, and Annualized Contract Value slipped to $9.9M. Net Dollar Revenue Retention of 71% for larger customers indicates contraction in existing accounts.

Liquidity and leverage are key concerns. Year-end cash was only $1.0M against total liabilities of $30.1M and a stockholders’ deficit of $(22.5)M. Management notes new capital commitments and refinanced debt, but the reported figures highlight ongoing balance sheet risk until further capital or improved cash generation is evident.

8-K Event Classification

3 items: 2.02, 7.01, 9.01

3 items

Item 2.02 Results of Operations and Financial Condition Financial

Disclosure of earnings results, typically an earnings press release or preliminary financials.

Item 7.01 Regulation FD Disclosure Disclosure

Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, and exhibit attachments filed with this report.

Key Figures

Q4 2025 revenue: $4.847M Full-year 2025 revenue: $27.858M Full-year 2025 net loss: ($25.388M) +5 more

8 metrics

Q4 2025 revenue $4.847M Three months ended December 31, 2025

Full-year 2025 revenue $27.858M Year ended December 31, 2025

Full-year 2025 net loss ($25.388M) Year ended December 31, 2025

Full-year 2025 gross margin 47.6% Up from 40.9% in 2024

Cash, cash equivalents and restricted cash $1.021M As of December 31, 2025

Total liabilities $30.094M As of December 31, 2025

Annualized Contract Value $9.9M Renewable software ACV at December 31, 2025

Net Dollar Revenue Retention 71% Customers with over $50,000 of ACV at December 31, 2025

Key Terms

Annualized Contract Value, Net Dollar Revenue Retention, bookings, non-GAAP financial measures, +2 more

6 terms

Annualized Contract Value financial

"Annualized Contract Value (“ACV”) of renewable software at December 31, 2025, was $9.9 million"

Annualized contract value (ACV) is the amount of revenue a company expects to earn from a contract in one year, expressed as a yearly figure even when the deal spans multiple years or starts partway through a year. It matters to investors because it converts varied contracts into a common annual measure—like turning different-length subscriptions into a single yearly price—so revenue trends, sales performance, and valuation comparisons are easier to see.

Net Dollar Revenue Retention financial

"Net Dollar Revenue Retention (NDRR) at December 31, 2025, was 71% for customers with over $50,000 of ACV"

Net dollar revenue retention measures how much revenue a company keeps from its existing customer base over a set period after accounting for expansions, downgrades and cancellations. Expressed as a percentage, it compares current revenue from the same customers to their prior-period revenue; a number above 100% means existing customers are, on net, spending more than before. Investors use it like a health check—higher retention signals durable, growing revenue from customers and less reliance on constantly finding new buyers.

bookings financial

"Bookings in the fourth quarter of 2025 were $3.4 million, down 21% year-over-year"

"Bookings" refer to the total value of new sales or agreements a company secures during a specific period. It shows how much business the company has signed up for, even if the products or services haven't been delivered yet. This figure helps investors understand the company's future growth potential.

non-GAAP financial measures financial

"Bookings, ACV, and NDRR are non-GAAP financial measures (U.S. generally accepted accounting principles)."

Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.

forward-looking statements regulatory

"may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995."

Forward-looking statements are predictions or plans that companies share about what they expect to happen in the future, like estimating sales or profits. They matter because they help investors understand a company's outlook, but since they are based on guesses and assumptions, they can sometimes be wrong.

loss on change in fair value of convertible debt financial

"Loss on change in fair value of convertible debt | | (1,322) | | | —"

Earnings Snapshot

Q4 2025 revenue: $4.847M

Q4 and FY 2025

Q4 2025 revenue $4.847M down from $8.535M in Q4 2024

Full-year 2025 revenue $27.858M down from $38.098M in 2024

Full-year 2025 net loss ($25.388M) wider than ($20.823M) in 2024

Full-year 2025 gross margin 47.6% up from 40.9% in 2024

Cash at year-end 2025 $1.021M down from $4.864M at year-end 2024

Understanding 8-K Material Events →

03/30/2026 - 05:30 PM

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 30, 2026

zSpace, Inc.

(Exact name of registrant as specified in charter)


Delaware	001-42431	35-2284050
(State or other Jurisdiction of Incorporation or Organization)	(Commission File Number)	(IRS Employer Identification No.)

55 Nicholson Lane

San Jose, California

95134

(Address of Principal Executive Offices)

(zip code)


	(408) 498-4050

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of registrant under any of the following provisions:


☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐	Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))


☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.00001 per share	ZSPC	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02Results of Operations and Financial Condition.

On March 30, 2026, zSpace, Inc. (the “Company”) issued a press release announcing its financial results for the fiscal quarter and year ended December 31, 2025. A copy of this press release entitled “zSpace Reports Fourth Quarter and Full Year 2025 Financial Results” is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information furnished in this report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01Regulation FD Disclosure.

The Company will host a conference call on Monday, March 30, 2026, at 5:00 p.m. ET / 2:00 p.m. PT to review the Company’s financial results for the fiscal quarter ended December 31, 2025. A live webcast of the call will be available on the Events and Presentations section of zSpace’s investor relations website located at https://investor.zspace.com/.

Item 9.01Financial Statements and Exhibits.

(d) Exhibits

The following exhibit is filed herewith:


Exhibit No.		Exhibit Description

99.1		Press release dated March 30, 2026 entitled “zSpace Reports Fourth Quarter and Full Year 2025 Financial Results”

104		Cover Page Interactive Data File (embedded within the inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: March 30, 2026	zSpace, Inc.

	By:	/s/ Erick DeOliveira
		Erick DeOliveira
		Chief Financial Officer

Exhibit 99.1

zSpace Reports Fourth Quarter and Full Year 2025 Financial Results

SAN JOSE, Calif., March 30, 2026 – 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 53% of revenue, a 10ppts increase from a year ago, contributing to gross margin expansion of over 840 basis points. This performance was driven by strong customer renewals, deeper adoption of our software offerings and meaningful customer wins across K-12, CTE and workforce pathways. We expanded our platform capabilities with the launch of zStylus One, and saw continued momentum from districts including Greater Altoona CTC, Bellflower’s Mayfair High School and Atlanta Public Schools, each demonstrating how immersive, AI-enabled learning is strengthening both academic and career-readiness outcomes.”

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 $4.8 million compared to $8.5 million in the fourth quarter of 2024. For the full year 2025, revenue was $27.9 million compared to $38.1 million in 2024. The decreases were driven by a freeze in both orders and shipments during the U.S. Federal Government shutdown.

Gross margins increased 840 basis points to 49% compared to the fourth quarter of 2024. For the full year 2025, gross margin increased 670 basis points to 48% compared to 2024. The increases were driven by improvements in hardware cost profiles and more Company-owned software content.

Annualized Contract Value (“ACV”) of renewable software at December 31, 2025, was $9.9 million, representing a 12% decrease compared to a year ago.

Net Dollar Revenue Retention (NDRR) at December 31, 2025, was 71% for customers with over $50,000 of ACV, compared with the same customers as of December 31, 2024.

Bookings in the fourth quarter of 2025 were $3.4 million, down 21% year-over-year. For the full year 2025, bookings were $26.1 million, down 34% year-over-year. The backlog of unfulfilled orders as of December 31, 2025 was $3.6 million.

Operating expenses, excluding stock-based compensation expense, in the fourth quarter of 2025 were $6.5 million compared to $5.9 million in the fourth quarter of 2024. For the full year 2025, operating expenses, excluding stock-based compensation expense, were $28.3 million compared to $25.5 million in 2024.

Net loss in the fourth quarter of 2025 was ($7.3) million compared to ($3.6) million in the fourth quarter of 2024. For the full year 2025, net loss was ($25.4) million compared to ($20.8) million in 2024.

Balance Sheet

As of December 31, 2025, zSpace had approximately $1.0 million in cash, cash equivalents and restricted cash, compared to $4.9 million in cash, cash equivalents and restricted cash as of December 31, 2024.

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 $50,000 of ACV as of 12 months prior to such period end (“Prior Period ACV”) and calculating the ACV from these same customers as of the current period end (“Current Period ACV”). Current Period ACV includes any upsells and is net of contraction or attrition over the trailing 12 months but excludes revenue from new customers in the current period. We then divide the total Current Period ACV by the total Prior Period ACV to arrive at our NDRR.

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

Source: View Original Filing on SEC EDGAR

FAQ

How did zSpace (ZSPC) perform financially in Q4 2025?

zSpace generated $4.8 million in revenue in Q4 2025, down from $8.5 million a year earlier. Gross margin improved to 49.1%, but the company reported a net loss of $7.3 million, compared with a $3.6 million loss in Q4 2024.

What were zSpace’s full-year 2025 revenue and net loss?

For full-year 2025, zSpace reported revenue of $27.9 million, down from $38.1 million in 2024. The company recorded a net loss of $25.4 million, wider than the $20.8 million net loss it reported for full-year 2024.

How did zSpace’s gross margins change in 2025?

zSpace’s profitability per dollar of sales improved in 2025. Full-year gross margin increased to 47.6% from 40.9% in 2024, and fourth quarter gross margin rose to 49.1% from 40.7%, helped by better hardware cost profiles and more company-owned software content.

What do zSpace’s software metrics show for 2025?

Annualized Contract Value of renewable software at December 31, 2025, was $9.9 million, a 12% decrease year-over-year. Net Dollar Revenue Retention for customers with over $50,000 of ACV was 71%, indicating contraction among these larger software customers over the prior 12 months.

What is the state of zSpace’s balance sheet at year-end 2025?

As of December 31, 2025, zSpace held $1.0 million in cash, cash equivalents and restricted cash, down from $4.9 million a year earlier. Total assets were $7.6 million, total liabilities $30.1 million, and stockholders’ deficit stood at $22.5 million.

How did bookings and backlog trend for zSpace in 2025?

Bookings in Q4 2025 were $3.4 million, down 21% year-over-year, and full-year 2025 bookings were $26.1 million, down 34% from 2024. The backlog of unfulfilled orders at December 31, 2025, was $3.6 million, representing future potential revenue.

Filing Exhibits & Attachments

4 documents

Press Releases

EX-99.1 EX-99.1 134.7 KB