| Metric | Value ($ M) | Q1 FY25 |
|---|---|---|
| Revenue | 5.25 | 22.3% |
| Total Income | 5.25 | 22.3% |
| Expenditure | 9.18 | 24.4% |
| PBT | -6.56 | 12.5% |
| Net Profit | -6.56 | 12.5% |
| OPM | -74.88% | 4.78pp |
| NPM | — | |
| EPS | -4.70 | 1707.7% |
zSpace Reports Q1 2026 Financial Results
15 May 2026 · 15 May, 2:03 am
Summary
zSpace announced its financial results for the first quarter ended March 31, 2026. Revenue was $5.3 million, down from $6.8 million in the same period last year, impacted by delayed EMEA orders due to geopolitical events. Gross margins improved significantly to 53%, driven by better hardware costs and increased software revenue. The company's Board of Directors has initiated a formal review of strategic alternatives to maximize shareholder value. Bookings decreased by 8% year-over-year to $6.1 million.
Key Highlights
- 1
zSpace reported revenue of $5.3 million for the first quarter of 2026, compared to $6.8 million in the first quarter of 2025.
- 2
Gross margins increased by 570 basis points to 53% compared to the first quarter of 2025.
- 3
Annualized Contract Value of renewable software was $10.1 million as of March 31, 2026, a 13% decrease year-over-year.
- 4
Net Dollar Revenue Retention was 65% for customers with over $50,000 of ACV.
- 5
Bookings in the first quarter of 2026 were $6.1 million, down 8% year-over-year.
- 6
The backlog of unfulfilled orders as of March 31, 2026, was $3.8 million.
- 7
Adjusted EBITDA loss was ($2.1) million compared to ($4.4) million in the first quarter of 2025.
Management Comments
Paul Kellenberger
Our first quarter results reflect solid execution and early signs of stabilization across the education market following a disruptive 2025, as customers continue to recognize the value of our platform through both new wins and strong software renewals. First quarter bookings increased over 80% sequentially following a soft fourth quarter driven by the U.S. federal government shutdown. Additionally, revenue grew 8% sequentially, even as late-quarter bookings shifted into the second quarter and geopolitical events tied to the Iran war delayed key international deals in the Middle East. Gross margins also expanded 570 basis points compared to last year, supported by the continued mix shift toward higher software and services revenue as we increased company-owned software content. While macro and funding dynamics remain fluid, we’re encouraged by the momentum we are seeing and remain confident in the long-term potential of our business, our ability to continue executing with discipline, and our commitment to controlling what we can control. At the same time, we recognize that our current valuation does not fully reflect the strength of our platform, which is why the Board has initiated a formal review of strategic alternatives to ensure we are doing everything we can to maximize long-term value for our shareholders.”
Informational and educational content only. Not investment advice.