DZS Inc. (DZSI): Business Model Canvas [Dec-2025 Updated]

You're digging into DZS Inc. after the March 2025 Chapter 7 filing, and let's be frank: the business model isn't what it was; it's now defined by the strategic acquisition of its core assets by Zhone Technologies. As an analyst who's seen a few turnarounds, I see the immediate focus shifting to integrating that valuable IP-think Velocity fiber and Xtreme software-while aggressively working to convert approximately $79 million of existing inventory into cash. This new canvas maps out the continuing operations, showing you exactly how the remaining pieces are being re-aligned to support multi-gigabit access and 5G transport, so you'll defintely want to review the nine building blocks below to understand the post-acquisition reality.

DZS Inc. (DZSI) - Canvas Business Model: Key Partnerships

You're looking at the post-restructuring reality for the assets formerly under DZS Inc. (DZSI) as of late 2025. The key partnerships now revolve around the May 1, 2025, acquisition by Zhone Technologies, Inc., which is focused on reestablishing the supply chain for these acquired technologies.

Third-party development (ODM) and contract manufacturers for silicon

Zhone, following the asset purchase, stated a commitment to reestablish and renew forward-looking partnerships with key third-party development (ODM) and contract manufacturers. These relationships are deemed critical for securing vital silicon chip technology and globally established manufacturing facilities.

Prior to the asset sale, DZS had a relationship with manufacturing partner Fabrinet, with whom they were building Build America Buy America (BABA) compliant fiber optic equipment in the U.S. as of October 2024.

The acquired DZS product lines, such as the DZS Helix Gateways and Access Points, featured integrated Wi-Fi 6/7 capabilities, which rely heavily on these manufacturing and ODM relationships.

Strategic sourcing partners like Digicomm International for distribution

Specific data on a distribution partner named Digicomm International was not found in the latest reports. However, the asset purchase agreement completed on May 1, 2025, included certain customer and supplier contracts, and Zhone committed to maintaining continuity of service for valued customers.

The acquisition by Zhone included international subsidiaries, such as DZS International Inc., DZS Canada Inc., and DZS Solutions India Private Limited, which represent existing channel structures that Zhone is now integrating or managing.

The former DZS entity had a business presence across the Americas, Europe, the Middle East, Africa, Australia, and New Zealand.

Technology partners for integrated solutions (e.g., Wi-Fi 6/7, OpenSync)

Technology partnerships are central to the value of the acquired DZS intellectual property, particularly around in-home connectivity. The DZS product portfolio leverages standards that were current or emerging in 2025.

The DZS 1764WC Extender was specifically noted as OpenSync Certified, running on OpenSync Version 3.2 - End of Life, and supporting the WiFi 6 standard (802.11ax).

The industry trend in 2025 pointed toward Wi-Fi 7 replacing Wi-Fi 6 as the market mainstream, with Qualcomm seeing Wi-Fi 7 adoption increase to become mainstream by the second half of 2025.

Here are some specifics on the technology standards embedded in the acquired DZS hardware:

Key suppliers for securing vital silicon chip technology

Securing vital silicon chip technology is a stated priority for Zhone in managing the acquired DZS assets. The DZS product line includes Optical Line Terminals (OLTs) and Optical Network Terminals (ONTs) that require specialized silicon.

DZS manufactured BABA-certified components, including OLTs, OLT line cards, Optics pluggables, and standalone ONTs, which implies established supplier relationships for these core components.

The financial health context for the assets being managed shows a Trailing Twelve Months (TTM) Current Ratio of 1.22 as of November 2025, indicating a tight liquidity position that makes securing favorable terms with key suppliers a high-stakes activity.

The aggressive revenue forecast for the 2025 fiscal year for the combined entity was stated as $529 million, up from $120.1 million for the year ended December 31, 2024, which underscores the need for reliable silicon supply to meet that projection.

The key supplier dependencies can be summarized by the product types that require them:

• Fiber Access: DZS Velocity OLT Systems requiring high-density silicon.
• Connected Home: DZS Helix ONTs/Gateways needing Wi-Fi 6/7 chipsets.
• Optical Transport: DZS Saber Optical Transport Systems needing high-lambda components.

DZS Inc. (DZSI) - Canvas Business Model: Key Activities

You're looking at the Key Activities for DZS Inc. (DZSI) business model as of late 2025, which is really about the realization and integration of its assets following the Chapter 7 bankruptcy filing in March 2025 and the subsequent asset acquisition by Zhone Technologies on May 1, 2025. The focus shifts from ongoing operations to asset conversion and platform integration.

The core activities revolve around the transition of technology and the management of legacy liabilities, specifically inventory conversion.

• R&D on next-generation fiber and 5G/optical edge solutions.
• Restoring and renewing the global supply chain and manufacturing.
• Integration and advancement of acquired DZS technology platforms.
• Converting the approximately $79 million of inventory to cash.

For Research & Development, the last reported figures from the legacy DZS Inc. show a continued investment in innovation, which is now being absorbed by the new entity.

This R&D focus supports the inherited technology portfolio, which includes market-leading systems like the DZS Velocity Optical Line Terminal (OLT) Systems and DZS Saber Optical Transport Systems, capable of upgrades to 50G/100G technologies.

Restoring the supply chain was an immediate priority for the acquirer, Zhone, to fulfill committed backlogs. The legacy DZS had already taken steps toward supply chain renewal, securing a U.S. BEAD Program "Build America Buy America" Manufacturing Readiness Certification in October 2024. The overall goal was to reestablish partnerships for vital silicon chip technology and manufacturing.

Integration is centered on combining the acquired DZS technology with Zhone's existing offerings. The acquired assets included substantial technology, intellectual property, lab facilities, and IT systems.

• Acquired DZS International Subsidiaries: DZS International Inc., DZS Canada Inc., DZS Solutions India Private Limited, and NetComm Wireless Pty Ltd.
• Key Technology Platforms for Advancement: DZS Helix Optical Network Terminals (ONTs), Gateways, and Access Points.
• Software Portfolio: DZS Xtreme Network Management, Automation, and Orchestration Software.

The most pressing financial activity, as explicitly outlined, is inventory conversion. As of Q3 2024, the inventory level stood at $79 million, which management committed to converting to cash. This conversion effort is critical for liquidity, especially given the low cash balance reported at $5.7 million at the end of Q3 2024. The Trailing Twelve Month (TTM) Current Ratio as of late 2025 was reported at 1.22.

The company's last reported revenue before the March 2025 filing was $120.1 million for the year ended December 31, 2024.

Finance: review the final asset realization report from the Trustee by next Tuesday.

DZS Inc. (DZSI) - Canvas Business Model: Key Resources

You're looking at the core assets DZS Inc. held, which were largely transferred following the May 1, 2025 acquisition by Zhone Technologies. These are the tangible and intangible things DZS used to create value right before that transition.

Intellectual Property (IP) for Velocity, Saber, Helix, and Xtreme software

The core of DZS Inc.'s technology stack, which was part of the assets acquired, included the software platforms that enabled its service provider and enterprise offerings. This IP covers the architecture for high-speed access and network management.

The specific software portfolios involved in the asset transfer included:

• DZS Velocity for multi-gigabit broadband access systems.
• DZS Saber for Optical Transport Systems.
• DZS Helix for connected home and enterprise solutions.
• DZS Xtreme for Network Management, Automation, and Orchestration Software.

To give you some context on the value of some of this software, DZS Inc. had previously finalized the sale of its Network Assurance and WiFi Management software portfolio to Axon Networks Inc. for $34 million in October 2024.

International subsidiaries (Canada, India, NetComm Australia)

DZS Inc. maintained a global footprint through several key international entities, all of which Zhone exercised an option to acquire as part of the May 2025 transaction. These subsidiaries were crucial for localized support, engineering, and market access.

The specific subsidiaries acquired included:

Before the divestiture, DZS Inc. reported a total of 660 full-time employees.

Key customer and supplier contracts acquired in the May 2025 sale

The asset purchase agreement dated April 22, 2025, explicitly included 'certain customer and supplier contracts'. These contracts were essential for maintaining service continuity and realizing future revenue from the existing DZS customer base.

The DZS customer base, prior to the bankruptcy proceedings, served over 200 active customers globally, including more than half of the top 25 telecom providers. The immediate focus post-acquisition was to fulfill the committed backlog associated with these contracts.

Global network of engineering and support centers

DZS Inc. operated a network of R&D and support centers designed to facilitate localized sales and technical assistance across its global markets in the Americas, Europe/Middle East/Africa (EMEA), and Australia/New Zealand (ANZ).

Key locations identified for R&D and operational support included:

• Plano, Texas, US (Headquarters).
• Ottawa, Canada (R&D center added in 2021).
• Bangalore, India (R&D center added in 2021).
• Offices in Australia (Sydney and Melbourne areas).
• Offices in Europe (Hanover, Germany).

These centers supported the company's operations serving customers across the Americas, Asia-Pacific, Europe, the Middle East, and Africa.

DZS Inc. (DZSI) - Canvas Business Model: Value Propositions

For you, the value DZS Inc. delivers centers on future-proofing network infrastructure while optimizing operational expenditure. This is grounded in specific technology capabilities and recent financial/market context.

Multi-gigabit fiber access systems (Velocity OLT) for future-proof networks.

DZS Inc. provides the Velocity OLT portfolio, which is Build America, Buy America (BABA) ready, directly addressing government stimulus program requirements. This technology supports the industry's move toward higher speeds, as the broader GPON OLT Market size was valued at $\text{\$2,760}$ Million in 2024 and is projected to reach $\text{\$3,000}$ Million in 2025. For instance, in October 2023, Orange, the largest Fiber To The Home (FTTH) service provider in Europe with over $\text{13}$ million residential subscribers, piloted the flagship Velocity fiber access portfolio in Poland.

Cloud-native network management and orchestration software (Zhone Xtreme).

The Zhone Xtreme orchestration and automation software platform is a key value driver, recognized with an 'Excellent' score of $\text{4.5}$ by the 2024 Lightwave Innovation Review. This software portfolio, resulting from acquisitions like RIFT, is positioned to increase the percentage of total revenue from recurring licenses, which is a strategic goal following the Asia business divestiture. The company aims for a higher percentage of its total revenue resulting from recurring and reoccurring licenses related to its software-centric solutions.

High-performance 5G mobile xHaul and optical edge transport (Saber DWDM).

The Saber Optical EDGE systems deliver high-capacity transport, with the Saber 4400 platform offering up to $\text{400 Gbps}$ per wavelength in a hardened form factor. Deploying these compact solutions can result in savings of up to $\text{\$200k}$ per location versus traditional solutions, which is critical as 5G mobile transport adoption accelerates. The DZS Saber RDM-4400 module is noted as the industry's smallest form factor CDC FlexGrid Reconfigurable Optical Add-Drop Multiplexer (ROADM).

Fixed Wireless Access (FWA) and Fiber Extension Distribution Point Unit (DPU) solutions.

DZS Inc. bolstered its FWA and fiber extension capabilities by acquiring NetComm's fixed wireless, fiber extension, IoT, and broadband connectivity business on June 1, 2024. This acquisition aligns with the focus on the Americas, EMEA, and ANZ regions, where the company is advancing its fixed wireless broadband portfolio. The company is executing on a strategy to convert paid inventory, which stood at $\text{\$75}$ million at year-end 2023 (exclusive of NetComm as of March 31, 2024, was $\text{\$31.8}$ million), to cash, which is a priority alongside capitalizing on the sales pipeline.

Here's a quick look at the product differentiation points:

• Saber 4400: Delivers up to $\text{400 Gbps}$ per wavelength.
• Zhone Xtreme: Received a $\text{4.5}$ score in the 2024 Lightwave Innovation Review.
• Velocity OLT: BABA ready, piloted by Orange in Poland (October 2023).
• Post-Divestiture Debt: Total long-term debt reduced to $\text{\$15}$ million after eliminating $\text{~\$43}$ million of debt.

The following table contrasts key product capabilities with relevant market context data available:

The company's focus on improving margins is evident in its operational results; for Q3 2024, GAAP gross margin reached $\text{29.4}\%$, up from $\text{-4.6}\%$ in Q3 2023. The stated goal is to achieve break-even Adjusted EBITDA in 2025. You should note that Q3 2024 Net revenue was $\text{\$38.1}$ million, showing a $\text{22.8}\%$ sequential quarterly increase.

DZS Inc. (DZSI) - Canvas Business Model: Customer Relationships

The customer relationships for the assets formerly comprising DZS Inc. are now managed under the umbrella of Zhone Technologies following the asset acquisition completed on May 1, 2025.

Dedicated support continuity for existing customers post-acquisition

Zhone Technologies immediately prioritized the restoration of technical support services, branded as the Zhone Customer Care & Success Programs, for the inherited customer base. This commitment was directed toward a legacy spanning over 25+ years of customer engagement. A key operational metric was the immediate focus on fulfilling the committed purchase order backlog to maintain trust with valuable customers and channel partners who remained patient throughout the sale process.

• Restoration of technical support channels: Immediate post-acquisition priority.
• Fulfillment of committed purchase order backlog: Critical for continuity.
• Inherited customer base longevity: 25+ years.

High-touch, consultative sales for large network deployment projects

The consultative approach continues, leveraging the integrated portfolio that includes DZS's Velocity Optical Line Terminal Systems and Zhone Xtreme Cloud Management software. The scale of the existing relationship base is significant; Zhone solutions are relied upon by over half of the top 25 telecom operators across the Americas, EMEA, and ANZ regions. Furthermore, the inherited customer base services over 200 active service provider and enterprise customers globally.

Professional services for system installation and network optimization

The service offering structure, now under Zhone, explicitly includes Professional Services, Architecture & Design, Project Management & Consulting, and Managed SaaS Delivery. This structure supports the complex installation and optimization required for large-scale broadband rollouts. For context on the scale of these projects, Zhone has a history of partnering with incumbent telcos, such as Consolidated Communications (CCI), to bring multi-gigabit services to more than 1.6 Million Locations.

Cultivating enduring partnerships with network operators globally

The relationships are geographically diverse, spanning the Americas, Europe, Middle East, Africa, Australia, and New Zealand, aligning with the strategic focus areas of the acquired DZS assets. The last reported net revenue for the DZS entity before the cessation of US operations was $38.1 million in Q3 2024, reflecting a quarter-over-quarter increase of 22.8%. The non-GAAP adjusted gross margin for that period stood at 36.7%, indicating the value captured from the existing customer base prior to the transition.

DZS Inc. (DZSI) - Canvas Business Model: Channels

You're looking at how DZS Inc. (DZSI) gets its technology-the fiber, fixed wireless, and AI-driven cloud software-into the hands of service providers and enterprises across the globe. The channel strategy is clearly segmented by geography, reflecting the post-Asia divestiture focus.

Direct sales force targeting Tier 1 and regional service providers.

The direct team focuses on securing large, strategic accounts. This is where the high-touch engagement happens, especially for complex deployments. As of the last reported figures, DZS Inc. serves over 200 active customers across its target regions. Furthermore, the company notes that more than half of the top 25 telecom providers in the markets they serve rely on their solutions for access and cloud automation. The acquisition of NetComm in 2024 specifically enhanced this direct channel by bringing in 8 marquee service providers across the United States, Europe, and Australia. The latest reported quarterly revenue, from Q3 2024, stood at $38.1 million, which is the result of these direct and indirect sales efforts converting trials to design wins.

Global partner ecosystem and distributors for regional reach.

The partner ecosystem is critical for scaling beyond the direct sales team's capacity, especially in handling the inventory normalization expected throughout 2025 among distributors. This network helps push products like the Velocity OLT and Saber DWDM platforms into broader markets. The company is actively focused on reestablishing renewed partnerships with global channel partners as part of its post-acquisition strategy.

International subsidiaries for sales in EMEA and ANZ regions.

DZS Inc.'s go-to-market strategy is explicitly refined to focus on the Americas, Europe, Middle East, Africa (EMEA), and Australia/New Zealand (ANZ) following the Asia business sale. The structure supports this by maintaining a presence in these key growth areas. The company's structure includes international subsidiaries, such as those acquired by Zhone Technologies in the May 2025 asset transaction, which bolster this international sales structure.

Here's a look at the geographic focus and some key financial context that underpins the channel strategy's execution:

Online support and training portals for technical assistance.

Technical assistance and customer success are channeled through online resources, which is key for supporting the installed base of hardware and driving recurring software revenue. The portfolio includes advanced AI-driven orchestration, automation, and network assurance software, which necessitates robust digital support channels. The company is focused on accelerating the conversion of technology trials, which are often supported by these digital resources, into revenue streams expected in 2025.

The channel strategy relies on a focused geographic footprint supported by a mix of direct enterprise sales and a partner network. The company's financial structure, with a Debt / Equity ratio of 190.43, shows the leverage used to support this market push.

• Focus on open, standards-based broadband access solutions.
• Accelerating active trials with service providers in key regions.
• Expectation for inventory normalization among distributors in 2025.
• Portfolio includes software-centric solutions expected to yield higher margins.

Finance: finalize the 2025 channel revenue attribution model by next Tuesday.

DZS Inc. (DZSI) - Canvas Business Model: Customer Segments

You're looking at the customer base DZS Inc. served right before its operational status changed in early 2025. The company's stated focus, based on its Q2 2024 divestiture of the Asia business, was on the North America, Europe, Middle East, Australia and New Zealand regions.

The core of the business historically targeted large-scale network deployments, which directly relates to the segments you outlined. For instance, the company served over 200 communications service providers worldwide. The last reported full fiscal year revenue, for the year ended December 31, 2024, was $120.1 million.

Here is a breakdown of the segments and associated figures from the last operational reporting periods:

The company's offerings enabled telecommunications service providers, cable operators, and enterprises to deploy high-speed connectivity. The Q3 2024 revenue of $38.1 million represented a 23% quarter-over-quarter increase. The last reported market capitalization as of December 2025 was $0.81 Million USD.

You should note the strategic focus areas mentioned in late 2024 earnings calls regarding future spending patterns:

• Service providers were anticipated to return to pre-COVID spend levels in 2025.
• The company anticipated positive sales and inventory conversion results in the second half of 2024 and 2025 following the NetComm acquisition in June 2024.

The last full-year GAAP net revenue reported was $120.1 million for the year ended December 31, 2024.

DZS Inc. (DZSI) - Canvas Business Model: Cost Structure

You're looking at the cost base for DZS Inc. (DZSI) as the company navigated significant structural changes leading into and through 2025. The cost structure is heavily influenced by the prior year's operational optimization efforts and the major restructuring event that occurred in early 2025.

Significant R&D investment in next-gen fiber and software platforms was a continuous drain on cash, even as the company focused on cost discipline. While specific R&D dollar amounts for 2025 aren't public, the operational expense base reflects this ongoing commitment alongside integration costs.

Cost of Goods Sold (COGS) for hardware manufacturing and inventory is directly tied to the company's ability to convert its large inventory position into recognized revenue. The GAAP Gross Margin for the third quarter of 2024 stood at 29.4%. This margin performance is critical as the company aimed to convert $79 million in inventory to cash by the end of 2024.

Sales, General, and Administrative (SG&A) expenses, including restructuring costs, saw a major one-time impact in 2025. The company had an expected restructuring charge of $50 million related to its 2025 Restructuring Plan, which included Employee Related Costs. Prior to this, for the first nine months of 2024, adjusted operating expenses were $57.8 million, representing a decrease of $17.2% year-over-year from the $69.8 million reported in the first nine months of 2023.

The following table summarizes the latest available operational cost metrics and key 2025 financial events:

Costs for re-engaging former DZS employees and integrating IT systems were a direct consequence of the March 2025 Chapter 7 filing and the subsequent May 2025 asset acquisition by Zhone Technologies. The acquisition agreement included substantially all of the assets of DZS Inc., including all technology, lab facilities, and IT systems. The completion of the international transactions by Zhone was stated to facilitate the reengagement of former DZS employees.

The overarching financial goal for the original DZS Inc. (DZSI) for 2025 was to achieve break-even Adjusted EBITDA. This target was set against a backdrop of lower annual operating expenses by more than $20 million compared to prior periods.

• Expected 2025 Financial Goal: Break-even Adjusted EBITDA.
• Cost Reduction Initiative: Annual operating expenses lower by more than $20 million.
• Acquisition Synergy Focus: Executing sales and cost synergies from the NetComm business.
• Asset Monetization: Focus on converting $79 million of inventory to cash.

The cost structure in the immediate pre-liquidation period was characterized by efforts to manage working capital, with DPO (Days Payable Outstanding) lagging at 242 days at the end of Q3 2024. The company was focused on improving this metric into the fourth quarter of 2024 and the first quarter of 2025.

DZS Inc. (DZSI) - Canvas Business Model: Revenue Streams

You're looking at the revenue structure of DZS Inc. (DZSI) right before the reported operational cessation in March 2025. The last confirmed, full-year financial performance you have is for 2024. Last reported full-year net revenue for 2024 was $120.1 million.

The core revenue streams, as defined by the business model before the reported Chapter 7 filing in March 2025, centered on hardware sales and recurring software/service elements. To be fair, the latest quarterly data available before that event shows the scale of the business. For the third quarter of 2024, net revenue from continuing operations was $38.1 million.

Here's how the revenue streams were structured, though specific 2025 figures are not available due to the reported operational status:

• Product sales from network access, optical transport, and edge solutions.
• Software subscription and licensing fees (e.g., Zhone Xtreme, CloudCheck).
• Technical support, professional services, and after-sales services.

The year-over-year comparison for the first half of 2024 (1H 2024) showed a net revenue of $59 million, down from $75 million in 1H 2023, reflecting a decrease of 21% (net of the Asia business divestiture). The company was actively working to monetize inventory, with $75 million of paid inventory mentioned as a key focus in September 2024. The Q3 2024 revenue of $38.1 million represented a 23% increase quarter-over-quarter from Q2 2024's $31 million.

You can see the revenue trend leading up to the end of 2024 in this snapshot. Note that the TTM revenue as of November 2025 is reported in conflicting figures, such as $0.16 Billion USD, which contrasts sharply with the reported March 2025 Chapter 7 filing.

The focus for 2025, prior to the reported operational halt, was achieving break-even Adjusted EBITDA, building on the Q3 2024 Adjusted EBITDA loss of $9.3 million. The company also noted a total debt of $49.2 million. Finance: draft 13-week cash view by Friday.