Core Viewpoint - zSpace reported a revenue decline in Q1 2025 but highlighted growth in its higher-margin software and services business, which increased by 11% year-over-year. The company is optimistic about its strategic initiatives and long-term growth potential despite a challenging macro environment [2][3]. Financial Performance - Revenue for Q1 2025 was $6.8 million, down from $7.8 million in Q1 2024, primarily due to funding uncertainty and order delivery delays [5]. - Gross margin improved to 47.4% from 34.5% in the same period last year, attributed to a shift in revenue from hardware to software and services, and better hardware profitability from the Inspire 2 platform [6]. - Net loss for Q1 2025 was ($5.8) million, an improvement from a net loss of ($12.2) million in Q1 2024 [10]. Business Highlights - The company successfully transitioned to the next-generation Inspire 2 laptop and expanded its software capabilities through acquisitions of BlocksCAD and Second Avenue Learning [2]. - zSpace was included in the Russell 2000 and Russell 3000 Indexes, marking a significant milestone [8]. - The Annualized Contract Value (ACV) of renewable software increased to $11.6 million, a 10% rise from $10.6 million a year ago [7]. Operational Metrics - Bookings in Q1 2025 were $8.3 million, down 6% year-over-year, with a notable 78% decline in international bookings excluding China [9]. - Operating expenses, excluding stock-based compensation, were $7.6 million compared to $7.0 million in Q1 2024 [9]. Capital Structure - zSpace closed a $20 million convertible debt financing facility, with $13 million funded at closing, which will enhance its capital structure [3][8].
zSpace Reports First Quarter 2025 Financial Results