The sharp decline in revenue, bookings, and retention — even with margin improvements — signals weakening demand and customer churn, not just a temporary government shutdown impact. The capital raises provide short-term liquidity but increase leverage (convertible debt). Traders should watch for further solvency risks given the $22.5M stockholders' deficit and falling cash. The stock’s low market cap ($4M) may already reflect distress, but downside remains if recovery fails.
Price Chart
Executive Summary
zSpace reported sharply declining revenue and widening losses for Q4 and full-year 2025, with revenue down 44% YoY in the quarter and 27% for the year, citing a U.S. federal government shutdown as the primary cause. Despite 840 bps gross margin expansion and cost-cutting efforts, key metrics like bookings, ACV, and net dollar retention deteriorated significantly, while the company raised $7.3M in new capital to stabilize its balance sheet amid a cash burn trend.
Key Financial Metrics
Key Facts
- Q4 2025 revenue was $4.8 million, down from $8.5 million in Q4 2024 (-44% YoY)
- Full-year 2025 revenue was $27.9 million, down from $38.1 million in 2024 (-27% YoY)
- Net loss widened to ($7.3) million in Q4 2025 vs. ($3.6) million in Q4 2024
- Full-year net loss was ($25.4) million vs. ($20.8) million in 2024
- Gross margin improved to 49% in Q4 (+840 bps YoY) due to better hardware costs and more software content
- Annualized Contract Value (ACV) declined 12% YoY to $9.9 million
- Net Dollar Revenue Retention (NDRR) fell to 71% for large customers
- Bookings dropped 21% YoY in Q4 to $3.4 million and 34% for the year to $26.1 million
- Cash balance fell to $1.0 million from $4.9 million in one year
- Company raised $7.3 million in new capital via $3M strategic investment and $4.3M convertible note
Financial Impact
Revenue down $10.2M (-27%) year-over-year, net loss increased by $4.6M, cash balance down $3.9M, with $3.6M backlog indicating limited near-term recovery
Risk Factors
- Continued revenue decline and customer attrition despite restructuring
- Deteriorating balance sheet with negative equity and rising debt
- Dependence on government funding that remains volatile
- Convertible debt increases future dilution risk if not repaid
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 1 press release from GlobeNewswire.
| Document | Accession Number |
|---|---|
| PRESS-RELEASE Data (Synthetic) | press-3265003 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Sep 15, 2026 6w ago | 8-K | $0.2395 $0.2395 | · 0.00% | ▲ +2.06% | $0.0880 (+63.26%) |
Jun 9, 2026 20w ago | Press Release | $0.1430 $0.1501 | ▲ +4.96% | ▲ +3.57% | $0.0880 (−38.46%) |
Jun 1, 2026 21w ago | 8-K | $0.2200 $0.1813 | ▲ +17.59% | ▲ +16.29% | $0.0880 (+60.00%) |
May 14, 2026 23w ago | 8-K | $0.1950 $0.2350 | ▲ +20.51% | ▲ +18.39% | $0.0880 (−54.87%) |
May 1, 2026 25w ago | Press Release | $0.1500 $0.2200 | ▲ +46.67% | ▲ +41.38% | $0.0880 (−41.33%) |
Apr 23, 2026 26w ago | 8-K | $0.5700 $0.1600 | ▲ +71.93% | ▲ +76.56% | $0.0880 (+84.56%) |
Apr 17, 2026 27w ago | 3 | $1.55 $0.1700 | ▼ −89.03% | ▼ −93.23% | $0.0880 (−94.32%) |
Apr 17, 2026 27w ago | 8-K | $1.35 $0.2300 | ▼ −82.96% | ▼ −88.33% | $0.0880 (−93.48%) |
Apr 7, 2026 29w ago | 144 | $2.58 $0.1430 | ▼ −94.45% | ▼ −104.23% | $0.0880 (−96.58%) |
Apr 7, 2026 29w ago | Insider Cluster | $2.58 $0.1430 | ▲ +94.45% | ▲ +104.23% | $0.0880 (+96.58%) |
US Market Status
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