zSpace, Inc. Revenue Disclosure
3. | REVENUE |
Disaggregation of Revenue
The Company earns revenue through the sale of products and services. Product and service revenue are the disaggregation of revenue primarily used by management, as this disaggregation allows for the evaluation of market trends and certain product lines and services vary in renewing versus non-renewing nature.
The following table disaggregates revenue by recognition method for the years ended December 31, 2025 and 2024 (in thousands):
| Year Ended December 31, | ||||||
| 2025 | | 2024 | ||||
Point in time | $ | 26,518 | $ | 36,414 | |||
Over time | 1,340 | 1,684 | |||||
Total | $ | 27,858 | $ | 38,098 | |||
The following table disaggregates revenue by type of products and services for the years ended December 31, 2025 and 2024 (in thousands):
Years Ended December 31, | ||||||
2025 | | 2024 | ||||
Hardware | $ | 14,208 | $ | 21,991 | ||
Software |
| 10,558 |
| 12,857 | ||
Services |
| 3,092 | 3,250 | |||
Total | $ | 27,858 | $ | 38,098 |
The following table disaggregates revenue by geographic area for the years ended December 31, 2025 and 2024 (in thousands):
| Year Ended December 31, | ||||||
2025 | | 2024 | |||||
United States | $ | 23,641 | $ | 33,496 | |||
International |
| 4,217 |
| 4,602 | |||
Total | $ | 27,858 | $ | 38,098 | |||
The amount of deferred revenue as of December 31, 2025 and December 31, 2024 reflects the revenue expected to be recognized in future periods related to remaining performance obligations as the Company collects payment in advance of satisfaction of performance obligations. Because a majority of the Company’s performance obligations are satisfied at a point in time soon after the contract is formed or within one year after the contract is formed, revenue recognized in the following year related to remaining performance obligations is expected to equal deferred revenue, current portion at the beginning of the year.
As of December 31, 2025 and 2024, the Company has $2.2 million and $3.6 million, respectively, in deferred revenue, and as of January 1, 2024, the Company had $3.0 million in deferred revenue. As of December 31, 2025 approximately $1.9 million of the balance is expected to be earned within the next 12 months and $0.3 million to be earned within the next 13 to .
As of December 31, 2024, approximately $3.3 million was expected to be earned within the next 12 months, with $0.2 million to be earned within the next 13 to and $0.1 million to be earned with the next 25 to .
As of December 31, 2025 and 2024, the Company had no contract assets.
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.