Revenue: As of FY2026 Q1, the actual value is USD 5.251 M, missing the estimate of USD 5.286 M.EPS: As of FY2026 Q1, the actual value is USD -4.7, missing the estimate of USD -1.5.EBIT: As of FY2026 Q1, the actual value is USD -3.588 M.zSpace, Inc. reported a total revenue of $5,251 thousand for the three months ended March 31, 2026, marking a 22% decrease from $6,759 thousand in the prior year period.<h4>Segment Revenue</h4><ul><li>Hardware Revenue: Decreased by 27% to $2,795 thousand for Q1 2026 from $3,829 thousand for Q1 2025, constituting 53% of total revenue in Q1 2026 compared to 57% in Q1 2025.</li><li>Software Revenue: Remained relatively flat at $1,961 thousand for Q1 2026, slightly up from $1,952 thousand for Q1 2025, and accounted for 37% of total revenue in Q1 2026, an increase from 29% in Q1 2025.</li><li>Services Revenue: Decreased by 49% to $495 thousand for Q1 2026 from $978 thousand for Q1 2025, representing 9% of total revenue in Q1 2026, down from 14% in Q1 2025.</li></ul><h4>Operational Metrics</h4><ul><li>Gross Profit: Decreased by 13% to $2,787 thousand for Q1 2026 from $3,206 thousand for Q1 2025.</li><li>Gross Margin: Increased to 53% for Q1 2026 from 47% for Q1 2025, with hardware gross margin at 43% (Q1 2026) vs. 37% (Q1 2025), software gross margin at 70% (Q1 2026) vs. 66% (Q1 2025), and services gross margin at 44% (Q1 2026) vs. 53% (Q1 2025).</li><li>Total Operating Expenses: Decreased by 22% to $6,719 thousand for Q1 2026 from $8,590 thousand for Q1 2025.<ul><li>Research and Development Expenses: Decreased by 9% to $992 thousand for Q1 2026 from $1,095 thousand for Q1 2025.</li><li>Selling and Marketing Expenses: Decreased by 40% to $2,414 thousand for Q1 2026 from $4,002 thousand for Q1 2025.</li><li>General and Administrative Expenses: Decreased by 5% to $3,313 thousand for Q1 2026 from $3,493 thousand for Q1 2025.</li></ul></li><li>Loss from Operations: Improved to - $3,932 thousand for Q1 2026 from - $5,384 thousand for Q1 2025.</li><li>Interest Expense: Decreased by 31% to - $344 thousand for Q1 2026 from - $502 thousand for Q1 2025.</li><li>Net Loss: Increased to - $6,557 thousand for Q1 2026 from - $5,832 thousand for Q1 2025.</li><li>Adjusted EBITDA: Improved to - $2,126 thousand for Q1 2026 from - $4,354 thousand for Q1 2025.</li></ul><h4>Cash Flow</h4><ul><li>Net Cash Used in Operating Activities: - $3,021 thousand for Q1 2026, compared to - $4,641 thousand for Q1 2025.</li><li>Net Cash Used in Investing Activities: - $2 thousand for Q1 2026, remaining immaterial.</li><li>Net Cash Provided by Financing Activities: $4,885 thousand for Q1 2026, compared to $978 thousand for Q1 2025, which included proceeds from convertible debt ($4,000 thousand), other debt issuances ($1,345 thousand), and Series P Preferred Stock ($3,000 thousand), partially offset by debt repayments.</li></ul><h4>Unique Metrics</h4><ul><li>Bookings: Total bookings were $6,121 thousand for Q1 2026, down from $6,659 thousand for Q1 2025.</li><li>US CTE &amp; K-12 Bookings: In Q1 2026, CTE bookings were 43% and K-12 bookings were 57% of total bookings, a shift from 29% CTE and 71% K-12 in Q1 2025.</li><li>International Bookings: International bookings represented 10% of total bookings in Q1 2026, up from 3% in Q1 2025.</li><li>Annualized Contract Value (ACV): Decreased to $10,066 thousand as of March 31, 2026, from $11,621 thousand as of March 31, 2025.</li><li>Net Dollar Retention Rate (NDRR): For customers with at least $50,000 of ACV, the NDRR was 65% for the trailing twelve-month period ended March 31, 2026, a decrease from 97% for the same period ended March 31, 2025.</li></ul><h4>Future Outlook and Strategy</h4>zSpace, Inc. anticipates its software applications revenue to grow faster in absolute dollars and as a percentage of total revenue compared to its product or service revenues. The company plans to accelerate the transition of its revenue mix from hardware to software through improved customer retention and expansion. Management also indicates that current cash on hand may be insufficient for continued operations, necessitating additional funding to sustain the business.

Zspace | 10-Q: FY2026 Q1 Revenue Misses Estimate at USD 5.251 M