zSpace 2025 Q2 Earnings Narrowed Loss Per Share but Worsening Net Loss

zSpace(ZSPC) reported its fiscal 2025 Q2 earnings on Aug 14th, 2025. The results reflect mixed performance, with a narrowed per-share loss but an overall widening net loss. The company also highlighted strategic progress in key product and market initiatives.

zSpace’s Q2 2025 results narrowly met expectations in terms of per-share losses, as the company reduced its per-share loss to $0.27 from $27.73 in the same period last year, representing a 99% improvement. However, the company’s net loss increased to $-6.10 million from $-4.75 million a year ago, marking a 28.6% deterioration. The results continue to reflect financial challenges, with the company posting losses for the third consecutive year in this quarter.

Revenue

Total revenue for Q2 2025 declined slightly by 0.6% year-over-year, settling at $7.46 million compared to $7.50 million in Q2 2024. The company’s hardware segment accounted for the largest portion of revenue, bringing in $4.31 million, followed by the software segment with $2.40 million. Services generated $752,000, rounding out the total revenue.

Earnings/Net Income

The company reported a significant improvement in per-share losses, narrowing from $27.73 in Q2 2024 to $0.27 in Q2 2025. However, the net loss worsened to $-6.10 million in Q2 2025 from $-4.75 million a year ago, reflecting the company’s ongoing financial challenges despite operational improvements. This indicates a negative earnings trend, with the company continuing to post losses for the third consecutive year in this quarter.

Price Action

The stock price of zSpace experienced mixed performance in recent trading periods. On the latest trading day, shares dipped by 0.78%. Over the past full trading week, the stock rallied 27.00%, but for the month-to-date, it has fallen 6.96%.

Post Earnings Price Action Review

The strategy of purchasing zSpace shares following a quarterly revenue increase and holding for 30 days proved highly detrimental over the past three years. It returned -84.98%, significantly underperforming the benchmark by 87.73%. The strategy is marked by a maximum drawdown of 0% and a Sharpe ratio of -0.54, illustrating both poor returns and high risk.

CEO Commentary

Paul Kellenberger, CEO of zSpace, emphasized strategic and operational progress during Q2 2025, including the launch of the Career Explorer application following the acquisition of Second Avenue Learning, major deployments in New York and California, and continued development of an AI Assistant. Despite macroeconomic challenges and shifting education funding policies, Kellenberger expressed confidence in executing the company’s long-term strategy, citing customer momentum and market interest in K-12 and career and technical education (CTE). He reaffirmed the company’s commitment to growth and delivering long-term value to shareholders.

Guidance

zSpace did not provide forward-looking revenue, EPS, or financial guidance for future periods in its Q2 2025 SEC 8-K filing. The CEO reiterated the company’s focus on long-term strategy, operational execution, and customer engagement but did not offer specific numerical targets or expectations.

Additional News

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