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zSpace Inc(ZSPC) - 2025 Q2 - Quarterly Results
zSpace InczSpace Inc(US:ZSPC)2025-08-14 20:09

Press Release Introduction zSpace announced its financial results for Q2 and H1 2025, highlighting its position as a leader in AR/VR education solutions Company Announcement zSpace, a leader in augmented and virtual reality solutions for education, announced its financial results for the three and six months ended June 30, 2025 - zSpace (NASDAQ: ZSPC), a leader in augmented and virtual reality solutions for education, announced its financial results for the three and six months ended June 30, 20251 CEO's Strategic and Operational Review CEO reviewed strategic progress, new products, and customer engagement despite macroeconomic headwinds CEO Commentary CEO Paul Kellenberger highlighted strategic progress including the launch of Career Explorer, expanded customer engagement, and accelerated AI Assistant development. Despite macroeconomic challenges and shifting education funding, zSpace believes its solutions align with state-level autonomy and workforce development, positioning it for sustained momentum and long-term growth - zSpace successfully launched its new Career Explorer application, expanded customer engagement with major deployments in New York and California, and accelerated development of its AI Assistant2 - Despite macroeconomic conditions and shifting U.S. education funding policies, zSpace believes it is uniquely positioned to sustain momentum, aligning with growing state-level autonomy and workforce development priorities2 Second Quarter 2025 Highlights Q2 2025 highlights: flat revenue, increased gross margin, higher net loss, and product achievements Financial Summary Highlights For Q2 2025, zSpace reported flat revenue year-over-year at $7.5 million, an increase in gross margin to 43% (up 213 basis points), and an increased net loss of ($6.1) million compared to ($4.7) million in the prior year period Q2 2025 Financial Summary Highlights | Metric | Q2 2025 | Q2 2024 | Change | | :---------------- | :------ | :------ | :----- | | Revenue | $7.5 million | $7.5 million | 0% | | Gross margin | 43% | 40% | +213 bps | | Net loss | ($6.1) million | ($4.7) million | (29.8%) | Recent Business Achievements In Q2 2025, zSpace received the Future's Best of Show Award for its zSpace Imagine headset-free AR/VR laptop, unveiled the Career Explorer™ application with Career Coach AI™, and recognized Upper Bucks County Technical School as a zSpace School of Distinction for integrating AR/VR technology in CTE - zSpace Imagine headset-free AR/VR laptop solution won the Future's Best of Show Award at ISTELive 25, marking the second consecutive year for this recognition4 - Unveiled Career Explorer™ application at ISTELive 25, an innovative AR/VR tool for grades 5–8 to explore high-demand careers, featuring Career Coach AI™ for personalized guidance4 - Upper Bucks County Technical School (UBCTS) was named a zSpace School of Distinction for leadership in integrating immersive AR/VR technology into Career and Technical Education (CTE)4 Detailed Second Quarter 2025 Financial Results Detailed Q2 2025 financial results analyze revenue, gross margin, operational metrics, expenses, and balance sheet Revenue and Gross Margin Performance Q2 2025 revenue remained flat at $7.5 million due to funding uncertainty and delivery delays. Gross margins increased to 43% (up 213 basis points) driven by improved hardware cost profiles and more Company-owned software content. Excluding specific shipping costs and software license write-offs, the gross margin would have been 46% - Revenue in the second quarter of 2025 was $7.5 million, flat compared to the second quarter of 2024, primarily due to funding uncertainty and delays in committed order delivery5 - Gross margins increased by 213 basis points to 43% in Q2 2025, driven by improvements in hardware cost profiles and more Company-owned software content5 - Excluding $0.1 million of shipping costs and $0.2 million of software license write-offs, the gross margin for Q2 2025 would have been 46%7 Key Operational Metrics Analysis Annualized Contract Value (ACV) of renewable software grew 11% year-over-year to $10.9 million. Net Dollar Revenue Retention (NDRR) for customers with over $50,000 ACV was 131%. However, bookings significantly decreased by 54% year-over-year to $7.2 million Key Operational Metrics | Metric | Value (June 30, 2025) | YoY Change | | :-------------------------- | :-------------------- | :--------- | | Annualized Contract Value (ACV) | $10.9 million | +11% | | Net Dollar Revenue Retention (NDRR) | 131% | N/A | | Bookings (Q2 2025) | $7.2 million | -54% | Operating Expenses and Net Loss Operating expenses, excluding stock-based compensation, increased to $7.7 million in Q2 2025 from $6.5 million in Q2 2024. This contributed to an increased net loss of ($6.1) million in Q2 2025, compared to ($4.7) million in the prior year Operating Expenses and Net Loss | Metric | Q2 2025 | Q2 2024 | | :------------------------------------ | :---------- | :---------- | | Operating expenses (excl. stock-based comp) | $7.7 million | $6.5 million | | Net loss | ($6.1) million | ($4.7) million | Balance Sheet Overview As of June 30, 2025, zSpace held $1.4 million in cash, cash equivalents, and restricted cash, a decrease from $3.0 million as of June 30, 2024 Cash Position | Metric | June 30, 2025 | June 30, 2024 | | :------------------------------------ | :-------------- | :-------------- | | Cash, cash equivalents and restricted cash | $1.4 million | $3.0 million | Corporate Information and Disclosures Corporate information details conference call, company profile, metric definitions, forward-looking statements, and contacts Conference Call Details zSpace will host a conference call on Thursday, August 14, 2025, at 5:00 p.m. ET / 2:00 p.m. PT with its CEO and CFO to discuss the financial results. A live webcast and replay will be available on the investor relations website - A conference call will be hosted on Thursday, August 14, 2025, at 5:00 p.m. ET / 2:00 p.m. PT11 - The call will feature CEO Paul Kellenberger and CFO Erick DeOliveira11 - A live webcast and replay will be available on the Events and Presentations section of zSpace's investor relations website1112 About zSpace, Inc. zSpace, Inc. (NASDAQ: ZSPC) provides innovative AR/VR experiences for STEM, CTE, and career readiness programs, trusted by over 3,500 educational institutions. Headquartered in San Jose, California, the company holds over 70 patents and its "learning by doing" solutions have been shown to enhance learning and student test scores - zSpace, Inc. (NASDAQ: ZSPC) delivers innovative augmented and virtual reality (AR/VR) experiences for STEM, CTE, and career readiness programs13 - The company is trusted by over 3,500 school districts, technical centers, community colleges, and universities13 - zSpace holds over 70 patents, and its hands-on 'learning by doing' solutions have been shown to enhance learning and drive higher student test scores13 Key Metric Definitions (Non-GAAP) This section defines key operational metrics used by zSpace to evaluate its business: Bookings (customer orders indicating future revenue), Annualized Contract Value (ACV) of active renewable software licenses, and Net Dollar Revenue Retention (NDRR) for customers with over $50,000 ACV. These are non-GAAP measures, provided as supplemental information for investors - Bookings: An internal operational measure representing customer orders with hardware, software, and service components, indicating future revenue15 - Annualized Contract Value (ACV): An internal operational measure used to monitor the ability to retain and grow the customer base for renewable software licenses16 - Net Dollar Revenue Retention (NDRR): An internal operational measure calculated by comparing current period ACV from prior period customers (with at least $50,000 ACV) to their prior period ACV, including upsells and net of contraction/attrition