zSpace, Inc (ZSPC) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #2 (Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.The power of a changing ea ...

Application brings diesel and heavy vehicle systems training to classrooms and workforce programsSAN JOSE, Calif., Dec. 18, 2025 (GLOBE NEWSWIRE) -- zSpace, Inc. (NASDAQ: ZSPC), a leader in immersive augmented reality (AR) learning solutions, today announced the launch of Heavy Vehicle Fundamentals by Labtech, a comprehensive AR-powered training solution designed to help students build foundational knowledge and hands-on skills in diesel, trucking, and heavy vehicle systems. Developed in collaboration with ...

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 in ...

Core Insights - zSpace, Inc. is expanding its Career and Technical Education (CTE) application suite, showcasing new applications in various fields at the ACTE CareerTech VISION event [1][2] - The introduction of the zStylus One enhances the precision of AR learning experiences, supporting hands-on practice across multiple disciplines [7][8] Automotive Technology - The automotive pathway now includes applications focused on electric, hybrid, and heavy vehicle systems, emphasizing high-voltage safety and battery diagnostics [3] - Educators are transforming traditional automotive labs into immersive environments, allowing students to engage with complex systems before working on actual vehicles [4] Health Science - The health science suite features new applications such as Medical Assistant Skills, Virtual ECG for hands-on practice, and BodyViz for interactive anatomy experiences [4] Advanced Manufacturing and Robotics - New simulations in advanced manufacturing and robotics provide students with realistic experiences in materials, tools, automation, and safety, building confidence for real lab environments [5] Career Exploration - The Career Explorer application enables students to investigate high-demand career fields and understand the skills required for various jobs, linking classroom concepts to real-world applications [6] zStylus One - The zStylus One is designed to enhance CTE learning applications with advanced sensors and machine learning, facilitating realistic practice in various technical fields [7] Future of CTE - The CEO of zSpace emphasizes the need for accessible technology in CTE programs that reflects industry standards, aiming to prepare students for high-demand technical careers [8] Company Overview - zSpace, Inc. specializes in AR/VR experiences that enhance STEM and CTE programs, trusted by over 3,500 educational institutions [9]

Core Insights - zSpace, Inc. has enhanced the Dental Assistant Program at the Greater Altoona Career & Technology Center (GACTC) through its AR/VR technology, improving students' understanding of dental anatomy and clinical readiness [1][11] The Challenge - Dental Assisting students at GACTC required a more effective method to comprehend complex dental anatomy beyond what traditional typodonts and textbooks could offer [2] - Traditional tools failed to reveal internal structures such as roots and layers, limiting students' understanding [2] The Solution: zSpace AR/VR for Dental Assisting - GACTC implemented the zSpace Inspire 2, a headset-free AR/VR laptop, enabling students to explore realistic 3D dental models and examine structures not accessible through physical tools [4] A New Level of Understanding - Students reported that zSpace significantly improved their comprehension of dental anatomy, allowing them to visualize and interact with structures like roots that typodonts could not provide [5][6] Support for All Learners - zSpace technology supports diverse learners by allowing them to practice at their own pace, repeat exercises as needed, and build confidence before entering clinical settings [7] Stronger Engagement and Skill Readiness - The use of zSpace has led to increased student engagement and interest, with students eager to explore content more deeply than traditional methods allowed [9][11] - The technology has improved retention and confidence, enabling students to practice skills independently and efficiently [10][11] Results - GACTC students are gaining a clearer understanding of dental structures, practicing skills more independently, and entering clinical environments with increased confidence due to the immersive technology [11]

Core Insights - zSpace, Inc. has established a standalone AR/VR learning lab at Boca Raton Community Middle School, enhancing career exploration and student engagement for 1,000 students [1][2]. Implementation and Impact - Boca Raton Community Middle School is the first in Palm Beach County to implement a full class set of zSpace systems, providing a dedicated immersive learning environment [2]. - The zSpace lab is utilized across various subjects, allowing teachers to reinforce difficult concepts through interactive exploration [3][4]. - The integration of zSpace into after-school programs has engaged students, making learning enjoyable and interactive [5]. Career Exploration - zSpace Career Explorer enables students to simulate real-world skills and understand job responsibilities, fostering career awareness [5][6]. - Students express newfound career interests through zSpace, indicating its effectiveness in broadening their horizons [7][8]. Student Engagement - Feedback from students highlights the fun and interactive nature of zSpace, with many expressing excitement about potential careers they learned about [7][8]. - The program is seen as a tool for developing well-rounded, future-ready learners, aligning with the school's mission [8]. Company Overview - zSpace, Inc. specializes in AR/VR experiences aimed at improving engagement and outcomes in STEM and career readiness programs, trusted by over 3,500 educational institutions [10].

Core Insights - zSpace, Inc. has launched "Precision Measurement," an immersive AR/VR training application aimed at enhancing Career and Technical Education (CTE) programs in manufacturing, machining, and quality assurance [1][5]. Group 1: Product Features - Precision Measurement allows learners to explore measurement concepts and interact with precision tools through hands-on simulations, revolutionizing student engagement with geometric tolerances and mechanical processing fundamentals [2][3]. - The application provides realistic 3D simulations where students can use virtual measuring instruments, evaluate tolerances, and detect errors in real time, creating a safe and engaging learning environment [3][6]. - It is designed for high school and postsecondary CTE programs, offering a scalable and cost-effective alternative to expensive physical equipment [5]. Group 2: Educational Impact - The application enables students to gain hands-on experience in geometric tolerances, precision tools, and error detection, building confidence and accuracy in real-world inspection tasks [6]. - Educators can utilize the application to reinforce lessons, assess student progress, and align learning outcomes with real-world technical standards and certifications [5][6]. Group 3: Market Position and Future Events - Precision Measurement is part of zSpace's expanding portfolio of immersive CTE applications that support pathways in Advanced Manufacturing, Automotive Technology, Health Science, and Engineering, helping schools meet industry demands [7]. - zSpace will showcase Precision Measurement and its full portfolio at ACTE's CareerTech VISION on December 10-11, 2025, in Nashville, Tennessee [8].

Core Insights - zSpace, Inc. has launched the zStylus One, an advanced AI-powered stylus designed for immersive augmented reality (AR) learning solutions in education [1][7] - The new stylus features embedded sensors and machine learning algorithms, eliminating the need for external sensor modules, thus simplifying classroom setup and enhancing usability [2][8] Product Features - The zStylus One connects via USB-C and is compatible with various zSpace systems, including Inspire and Imagine, with a requirement for Inspire V2 starting in November [3][8] - The stylus is designed to provide a natural user experience, allowing learners to interact with virtual content intuitively, mimicking real-world movements [4][8] - The embedded sensors enhance precision and responsiveness, making it suitable for instructional applications [8] Educational Impact - zSpace's approach to AR aims to simplify technology integration in classrooms, fostering confidence among educators [5][8] - The interactive nature of the zStylus One supports deeper understanding and improved retention of information through tactile engagement and active movement [5][8] Company Background - zSpace is recognized for its innovative AR/VR experiences, trusted by over 3,500 educational institutions, and holds more than 80 patents [8][9] - The company emphasizes a "learning by doing" philosophy, which has been validated by research showing the positive impact of 3D virtual reality technologies on student knowledge gains [9]

Financial Data and Key Metrics Changes - Year-to-date revenues were $23 million, down 22% year-over-year [7] - Q3 revenues of $8.8 million were down 38% year-over-year but represented an 18% sequential improvement over Q2 [11] - Gross profit was $10.9 million year-to-date, down 10% against the same period last year [9] - Gross margins for the nine-month period were 47.3%, up 6.4 percentage points versus the prior year period [10] - Adjusted EBITDA losses narrowed to below $2 million for the third quarter [15] Business Line Data and Key Metrics Changes - Software and services revenue comprised over 50% of total revenue, contributing to gross margin expansion of over 640 basis points [3] - Software and services revenues made up 57% of total revenues in Q3, an 11 percentage point mix shift [11] - Annualized contract value of renewable software was $10.2 million, down 10% compared to 12 months ago [8] - Net dollar revenue retention of customers with at least $50,000 of ACV was 77% [8] Market Data and Key Metrics Changes - The company has secured deployments in Italy, Bulgaria, Poland, and additional locations across the Middle East [5] - CTE customers drove 49% of bookings value, up from 41% in the prior year comparable period [12] Company Strategy and Development Direction - The company is focusing on advancing its strategy and controlling internal factors while navigating external headwinds [3] - AI is being leveraged to eliminate language barriers and expand global reach [4] - The company is cautiously optimistic about the long-term growth potential despite ongoing uncertainties in the U.S. education funding environment [6] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the fourth quarter due to ongoing uncertainties related to tariff impacts and education funding [6] - The government shutdown has created delays in purchasing and funding decisions for customers [19] - Management remains confident in the ability to improve the quality of both hardware and software revenues [16] Other Important Information - The integration of Second Avenue Learning has led to the launch of the Career Explorer application [4] - The company is managing stock-based compensation to a target burn rate of less than 7% for the full year [14] Q&A Session Summary Question: Impact of government shutdown on zSpace - The government shutdown has created obstacles for end users in making purchasing and funding decisions, leading to delays in accepting shipments and concluding purchase orders [19][20] Question: Recent wins and deployments - The deployment in Danbury School District is focused on middle and high schools, with potential for broader district-wide implementation [28] Question: Net dollar revenue retention and customer renewals - The decline in net dollar revenue retention is attributed to two large customers who could not fully renew their commitments due to budget constraints [32] Question: International segment contribution and tariff challenges - The international segment is seeing strong demand, with a focus on expanding partnerships in Italy, Bulgaria, and Poland [51] - Tariffs have had a modest impact on gross margins, primarily affecting the sales motion earlier in the year [53] Question: New hardware and margin trends - A new stylus is expected to enhance user experience and simplify logistics, contributing to future margin improvements [60]

Financial Performance - Revenue for Q3 2025 was $8.793 million, a decrease of 38.1% compared to $14.219 million in Q3 2024[17] - Gross profit for Q3 2025 was $4.499 million, down 29.2% from $6.362 million in Q3 2024[17] - Net loss for Q3 2025 was $6.169 million, compared to a net income of $43.370 million in Q3 2024[17] - For the nine months ended September 30, 2025, zSpace reported a net loss of $18,103,000, compared to a net loss of $17,197,000 for the same period in 2024[22] - For the three months ended September 30, 2025, the company reported a net loss of $6,169,000 compared to a net loss of $204,000 for the same period in 2024[134] - Total revenues for the three months ended September 30, 2025, were $8,793,000, a decrease of 38.1% from $14,219,000 in 2024[145] - The gross profit for the three months ended September 30, 2025, was $4,499,000, down from $6,362,000 in 2024, reflecting a gross margin decline[145] - The company incurred total operating expenses of $9,293,000 for the three months ended September 30, 2025, an increase of 46.3% compared to $6,338,000 in 2024[145] Operating Expenses - Total operating expenses increased to $9.293 million in Q3 2025, up 46.4% from $6.338 million in Q3 2024[17] - Selling and marketing expenses increased to $4.340 million in Q3 2025, compared to $3.265 million in Q3 2024[17] - Research and development expenses for Q3 2025 were $1.568 million, up 50.5% from $1.040 million in Q3 2024[17] - The company incurred total operating expenses of $9,293,000 for the three months ended September 30, 2025, an increase of 46.3% compared to $6,338,000 in 2024[145] Assets and Liabilities - Total current assets as of September 30, 2025, were $13.340 million, slightly down from $13.511 million as of December 31, 2024[14] - Total liabilities increased to $33.143 million as of September 30, 2025, compared to $28.220 million as of December 31, 2024[14] - The company reported a significant increase in accounts payable, which rose to $3.965 million from $5.656 million[14] - The company’s accumulated deficit reached $308.503 million as of September 30, 2025, compared to $290.400 million as of December 31, 2024[14] Cash Flow and Financing - The company experienced a net cash used in operating activities of $14,025,000 for the nine months ended September 30, 2025, significantly higher than $3,850,000 for the same period in 2024[22] - zSpace's cash, cash equivalents, and restricted cash at the end of the period were $4,271,000, an increase from $3,204,000 at the end of September 2024[22] - The company raised $13,000,000 from convertible debt in 2025, compared to $5,000,000 in 2024[22] - The company issued common stock under an equity line of credit, generating proceeds of $3,605,000 in 2025[22] - The company raised $13,000,000 from the Senior Secured Convertible Note Financing, which closed on April 11, 2025[81] Revenue Recognition - The Company recognized revenue using a five-step model in accordance with ASC Topic 606, which includes identifying contracts and performance obligations[43] - Revenue is recognized when the obligation under the terms of the Company's contract with its customer is satisfied, reflecting the consideration expected to be received[45] - The Company offers standard warranty coverage on substantially all products, which is accounted for as an assurance warranty and not considered a separate performance obligation[46] Market and Product Information - zSpace's primary product is a mixed reality hardware device aimed at K-12 education, generating revenue from both hardware sales and recurring software revenue[25] - The total addressable market (TAM) for the K-12 market is estimated at approximately $21.4 billion in the United States, $29.0 billion in EMEA, and $5.6 billion in APAC, with a global TAM exceeding $68 billion[160][161] - The company has implemented its platform in over 3,500 U.S. public school districts, representing a significant market penetration[158] Stock and Equity - As of September 30, 2025, a total of 8,692,379 shares were authorized for issuance under the Stock Plans, with 7,473,415 shares granted or issued, leaving 1,218,964 shares available for future awards[121] - The Company granted 724,646 Restricted Stock Units (RSUs) to executive officers and Board members at a fair market value of $12.9 million on February 13, 2025[120] - The intrinsic value of RSUs as of September 30, 2025, was $1.3 million, with total unrecognized stock-based compensation cost for RSUs at approximately $13.4 million expected to be recognized over a weighted average period of 1.7 years[124] Challenges and Risks - The Company has incurred operating losses and negative cash flows from operations since inception, raising substantial doubt about its ability to continue as a going concern for at least twelve months[30] - The company faces potential adverse impacts from U.S. tariffs on imports, particularly from China, which could affect supply chain, pricing, and gross margin[187] Bookings and Retention - Bookings for the three months ended September 30, 2025, were $7.436 million, a decrease from $11.736 million in the same period of 2024; for the nine months ended September 30, 2025, bookings were $35.173 million compared to $22.746 million in 2024[169] - The net dollar revenue retention rate (NDRR) for customers with at least $50,000 of ACV was 77% for the trailing twelve-month period ended September 30, 2025, compared to 102% in 2024[177]