Rohit Kulkarni's questions to zSpace (ZSPC) leadership • Q2 2025
Question
Rohit Kulkarni inquired about early Q3 trends following the release of federal funding, the integration of AI into new products like Career Explorer, the drivers of gross margin improvement, the reasons for the surge in Net Dollar Retention (NDRR), and the go-to-market strategy in China.
Answer
CEO Paul Kellenberger expressed cautious optimism about Q3, detailed the use of AI and ML in the new zSpace AI assistant and next-gen stylus, and explained that the uptick in China was from partner success, not direct investment. CFO Erick DeOliveira attributed the 7.5-point gross margin expansion primarily to structural improvements from new hardware and more first-party software. DeOliveira also clarified that the high NDRR was driven by large existing customers significantly expanding their software license footprint.