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SAN JOSE, CA – zSpace , Inc. (NASDAQ:ZSPC), a Delaware-incorporated company specializing in prepackaged software services with a market capitalization of $178.8 million, disclosed the establishment of a short-term incentive plan for its executive officers, according to a recent SEC 8-K filing. The announcement comes as the company’s stock has declined over 64% in the past six months, according to InvestingPro data.
On May 7, 2025, the company’s Board of Directors, following the recommendation of the Compensation Committee, approved the 2025 Short-Term Incentive Plan (2025 STI Plan). This plan outlines the framework for annual bonuses for the company’s executive officers, which are contingent on achieving specific performance objectives.
The annual bonus for each executive officer is set as a percentage of their annual base salary, with the potential to earn between 33% and 50% of their salary, referred to as the " Target (NYSE:TGT) Bonus." The 2025 STI Plan is structured with two main components dictating the payout: the Company Component, accounting for 67% of the Target Bonus, and the Individual Component, making up the remaining 33%.
The Company Component’s payout is linked to zSpace’s financial performance, specifically its revenue and EBITDA targets. With current revenue at $38.1 million and EBITDA at -$17.65 million, the company faces challenges meeting these targets. According to InvestingPro analysis, net income is expected to decline this year, with analysts not anticipating profitability in the current fiscal year. However, achieving threshold, target, and high goals can result in payouts of 85%, 100%, and 115% of the Target Bonus, respectively, with pro-rata payments for performance between the threshold and high goals.
The Individual Component is based on each executive’s accomplishment of personal performance objectives, as evaluated by the Board.
To be eligible for any awards under the 2025 STI Plan, the executive officers must remain employed with the company through the payment date, unless the Board decides otherwise.
This information is based on a press release statement and is intended to provide investors with an understanding of zSpace’s new executive compensation strategy as reported in the company’s SEC filing. For deeper insights into zSpace’s financial health and performance metrics, InvestingPro subscribers can access comprehensive analysis, including 10 additional ProTips and detailed financial metrics in the Pro Research Report, which transforms complex Wall Street data into actionable intelligence for smarter investing decisions.
In other recent news, zSpace Inc. reported a significant decline in their fourth-quarter 2024 revenue, down 29% year-on-year to $8.54 million, with a full-year revenue decrease of 13% to $38 million. Despite these challenges, the company managed to improve its gross margins by 240 basis points to 40.9% and slightly increased bookings by 1% to $41.5 million. zSpace also launched two new products, Inspire Two and Imagine, and acquired BlocksCAD to enhance its offerings in the education technology sector. The company projects first-quarter 2025 revenue slightly above $5 million, focusing on expanding its presence in the K-12 and CTE markets.
In a related development, Northland analysts upgraded zSpace’s stock rating from Market Perform to Outperform, despite lowering the price target from $20 to $10. This decision was influenced by a mix of challenges and positive projections, with analysts expressing confidence in zSpace’s ability to maintain a strong growth trajectory in its software segment. They have adjusted their estimates, projecting a sustained 25% growth rate, down from a previous estimate of 30%. The upgrade reflects a favorable risk/reward balance for zSpace, with a potential 50% upside implied by the new price target. These developments highlight zSpace’s strategic initiatives and the ongoing confidence of analysts in its long-term growth prospects.
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