zSpace shares fall 12.10% intraday amid Q3 revenue drop 38% year-on-year and ongoing financial challenges.

zSpace (ZSPC) fell 12.10% intraday trading following the release of its Q3 2025 earnings report, which revealed a 38% year-over-year revenue decline to $8.8 million and negative operating and net margins (-61.09% and -68.88%, respectively). Despite improved gross margins, the earnings highlighted ongoing financial strain, including liquidity challenges (current ratio of 0.68) and a high risk of insolvency (Altman Z-Score of -34.81). While the company announced the launch of its Precision Measurement AR/VR application for CTE programs—a product positioned as a scalable, cost-effective training tool—this positive development was overshadowed by weak financial results. The market’s bearish reaction suggests investors prioritized deteriorating fundamentals over near-term product innovation.