Datasea Pre-Announces Fiscal Year 2026 Second Quarter Results

Rhea-AI Summary

Datasea (NASDAQ: DTSS) pre-announced unaudited results for the six months ended December 31, 2025. Revenue is expected to be approximately $26.68 million. Gross profit is expected to be approximately $2.32 million, up about 278% year-over-year, and gross margin expanded to 8.70% from 1.48% a year earlier. Management attributes the margin improvement to a reduction in low-margin standardized 5G AI services, higher contribution from customized 5G+AI solutions, advancement of acoustic high-tech products, and stricter cost controls. The company says it is shifting toward profitability optimization and exploring acoustic health-management and neuromodulation applications for future commercialization.

Positive

• Gross profit +278% year-over-year (six months ended Dec 31, 2025)
• Gross margin expanded to 8.70% from 1.48% year-over-year
• Revenue of approximately $26.68 million for the six-month period
• Increased contribution from higher-margin 5G+AI customized solutions

Negative

• Company intentionally moderated revenue expansion, potentially limiting near-term topline growth

News Market Reaction – DTSS

-5.50%

5 alerts

-5.50% News Effect

-15.0% Trough in 6 hr 11 min

-$544K Valuation Impact

$9M Market Cap

1.0x Rel. Volume

On the day this news was published, DTSS declined 5.50%, reflecting a notable negative market reaction. Argus tracked a trough of -15.0% from its starting point during tracking. Our momentum scanner triggered 5 alerts that day, indicating moderate trading interest and price volatility. This price movement removed approximately $544K from the company's valuation, bringing the market cap to $9M at that time.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Revenue: $26.68 million Gross profit: $2.32 million Gross profit YoY change: 278% +5 more

8 metrics

Revenue $26.68 million Six months ended Dec 31, 2025 (expected)

Gross profit $2.32 million Six months ended Dec 31, 2025 (expected)

Gross profit YoY change 278% Increase vs. same period fiscal 2025 (expected)

Gross margin 8.70% Six months ended Dec 31, 2025 (expected)

Prior-year gross margin 1.48% Same six-month period fiscal 2025

Price change 9% Move prior to/around this news

52-week high $3.10 Pre-news 52-week range reference

52-week low $0.64 Pre-news 52-week range reference

Market Reality Check

Price: $0.9101 Vol: Volume 716,695 is about 6...

high vol

$0.9101 Last Close

Volume Volume 716,695 is about 6x the 20-day average of 119,522, indicating elevated interest ahead of the pre-announcement. high

Technical Price at $1.09 is trading below the 200-day MA of $1.82, despite the positive profitability update.

Peers on Argus

DTSS gained about 9% while peers were mixed: BLIN up 4.88%, BNAI up 0.99%, and o...

DTSS gained about 9% while peers were mixed: BLIN up 4.88%, BNAI up 0.99%, and others like FAAS (-8.3%) and MSAI (-3.47%) declined, pointing to a stock-specific reaction to the earnings pre-announcement.

Historical Context

5 past events · Latest: Jan 20 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Jan 20	Channel rollout plan	Positive	+9.0%	18‑month execution plan for acoustic haircare robots across China.
Jan 12	BCI tech advancement	Positive	+4.3%	Progress on acoustic-driven brain–computer interface initiatives and collaborations.
Jan 05	BCI collaboration	Positive	+21.3%	Strategic collaboration to apply acoustic enhancement to BCI and healthcare robots.
Dec 17	Beauty & health system	Positive	-3.1%	Acoustics + AI beauty & health system partnership with detailed fee structure.
Dec 11	BCI breakthroughs	Positive	+14.6%	Engineering-stage completion of two acoustic-driven BCI systems.

Pattern Detected

Recent news tied to acoustic/AI tech progress and commercialization has generally seen positive price reactions, suggesting sensitivity to execution and commercialization updates.

Recent Company History

Over the last few months, Datasea has reported several technology and commercialization milestones. On Dec 11, 2025 and Jan 12, 2026, it announced breakthroughs and advancements in acoustic-driven brain–computer interface technologies, both followed by positive price moves. Commercial deployment efforts in beauty and health robotics, including an 18‑month channel plan and a nationwide partnership targeting thousands of venues, further emphasized execution. Today’s pre-announced FY2026 Q2 results, highlighting a 278% gross profit increase and margin expansion to 8.7%, build on this shift toward higher-value, technology-driven revenue.

Market Pulse Summary

The stock moved -5.5% in the session following this news. A negative reaction despite improved gross...

Analysis

The stock moved -5.5% in the session following this news. A negative reaction despite improved gross profit and margins would fit a pattern where balance-sheet and going-concern risks remain a concern even as operations show progress. The company previously noted recurring losses and reliance on external funding in its filings. In that context, traders might have focused on longer-term sustainability rather than near-term margin gains, and any sharp downside move could reflect skepticism about the durability of the profitability shift.

Key Terms

acoustic neuromodulation, non-invasive acoustic modulation

2 terms

acoustic neuromodulation medical

"focused on non-invasive acoustic modulation, acoustic neuromodulation, and related health robot solutions"

A noninvasive treatment that uses focused sound waves or vibrations to change the activity of nerves in the brain or body, aiming to reduce symptoms such as pain or ringing in the ears. Think of it like using a remote control or fine-tuning a radio to shift nervous system signals without surgery. Investors care because clinical results, regulatory approval, and insurance coverage determine whether devices using this approach can win customers and generate revenue.

non-invasive acoustic modulation medical

"focused on non-invasive acoustic modulation, acoustic neuromodulation, and related health robot solutions"

Non-invasive acoustic modulation uses focused sound waves to change how cells, nerves or tissues behave without cutting the body or implanting devices. Think of it as a remote control using sound to nudge biological activity—like turning a dial on a speaker instead of opening the appliance—and it matters to investors because it promises therapies with lower surgical risk, simpler delivery, and potentially faster clinical and regulatory pathways that can expand market reach and reduce treatment costs.

AI-generated analysis. Not financial advice.

Gross Profit Increased 278% Year-over-Year with Significant Improvement in Gross Margin

BEIJING, Jan. 21, 2026 /PRNewswire/ -- Datasea Inc. (NASDAQ: DTSS) ("Datasea" or the "Company"), a Nevada-based technology company specializing in acoustic high-tech solutions and 5G+AI multimodal digitalization, today pre-announced its unaudited financial results for the second quarter of fiscal year 2026, ended December 31, 2025.

The financial highlights below are presented on a six-month basis for the period ended December 31, 2025.

Fiscal Year 2026 Second Quarter Financial Highlights

(Unaudited, Six Months Ended December 31, 2025)

• Revenue for the six months ended December 31, 2025 is expected to be approximately $26.68 million.
• Gross profit is expected to be approximately $2.32 million, representing an increase of approximately 278% year-over-year compared to the same period of fiscal year 2025.
• Gross margin is expected to be approximately 8.70%, a significant improvement from 1.48% in the prior-year period.

Strategic and Operational Review

The Company's performance during the first six months of fiscal year 2026 reflects the continued execution of its strategic transition toward profitability optimization and technology-driven value creation, moving away from a growth model primarily focused on revenue scale.

During the period, the Company achieved a substantial improvement in gross profit and gross margin through the following initiatives:

• A deliberate reduction of standardized, low-margin 5G AI communication services;
• An increased contribution from high-margin 5G+AI customized solutions;
• Continued advancement and application of the Company's acoustic high-tech products and integrated solutions; and
• Ongoing enhancement of cost controls and operational efficiency.

Management Commentary

Ms. Zhixin Liu, Chief Executive Officer of Datasea, commented:

"The six-month period ended December 31, 2025 represents an important milestone in the Company's strategic transformation. While we intentionally moderated the pace of revenue expansion, our gross profit increased by 278% year-over-year and gross margin expanded to 8.7%, underscoring the effectiveness of our shift toward high-value, technology-driven businesses.

We believe that the significant improvement in profit quality helps support the Company's long-term sustainable development strategy. In line with this objective, we continue to deepen the application of high-margin 5G+AI multimodal digital solutions and increase the contribution of technology-oriented, solution-based offerings within our overall business mix.

At the same time, building on our recent phased progress in core acoustic technologies, we are steadily advancing the application exploration of our acoustic high-tech innovations in health management and intelligent device scenarios. This includes product validation and solution deployment efforts focused on non-invasive acoustic modulation, acoustic neuromodulation, and related health robot solutions across healthcare, wellness, and professional application environments, laying the groundwork for future business expansion and value realization."

About Datasea Inc.

Datasea Inc. ("Datasea") is a leading provider of products, services, and solutions for enterprise and retail customers in two innovative industries, acoustic high tech and 5G-AI multimodal digitalization. The Company's advanced R&D technology serves as the core infrastructure and backbone for its products. Its 5G multimodal digital segment operates on a cloud platform based on AI. Datasea leverages cutting-edge technologies, precision manufacturing, and ultrasonic, infrasound and directional sound technology in its acoustics business to combat viruses and prevent human infections, and it is also developing applications in medical ultrasonic cosmetology. In July 2023, Datasea established a wholly-owned subsidiary, Datasea Acoustics LLC, in Delaware, in a strategic move to enter the U.S. markets and to mark its global expansion plan. For additional information, please visit www.dataseainc.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will", "expects", "anticipates", "future", "intends", "plans", "believes", "estimates", "target", "going forward", "outlook," "objective" and similar terms. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and which are beyond Datasea's control, which may cause Datasea's actual results, performance or achievements (including the RMB/USD value of its anticipated benefit to Datasea as described herein) to differ materially and in an adverse manner from anticipated results contained or implied in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in Datasea's filings with the SEC, which are available at www.sec.gov. Datasea does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.

Investor and Media Contact: 

Datasea Investor Relations
Email:  
investorrelations@shuhaixinxi.com            
sunhezhi@shuhaixinxi.com 

Precept Investor Relations LLC
David Rudnick
+1 646-694-8538
david.rudnick@preceptir.com

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SOURCE Datasea Inc.

FAQ

What did Datasea (DTSS) report for revenue in the six months ended December 31, 2025?

Datasea reported expected revenue of approximately $26.68 million for the six-month period ended December 31, 2025.

How much did Datasea's gross profit change in the six months ended December 31, 2025?

Datasea's gross profit is expected to be approximately $2.32 million, an increase of about 278% year-over-year.

What gross margin did Datasea (DTSS) announce for the six months ended December 31, 2025?

Gross margin is expected to be approximately 8.70%, up from 1.48% in the prior-year period.

Why did Datasea say gross margin improved in fiscal 2026 Q2 pre-announcement?

Management cited reduced low-margin standardized 5G AI services, more high-margin customized 5G+AI solutions, acoustic product advancement, and cost controls.

Does Datasea (DTSS) expect near-term revenue growth after the strategic shift announced January 21, 2026?

The company said it intentionally moderated revenue expansion to prioritize profit quality, which may limit near-term topline growth.

What new application areas is Datasea exploring for its acoustic technology?

Datasea is advancing acoustic innovations toward health management, non-invasive acoustic modulation, acoustic neuromodulation, and health-robot solutions.