Datasea Reports First Quarter Gross Profit of $1.2 Million, a 4.9x Increase Year-Over-Year in its Strategy to Achieve High-Tech Product Profitability

Rhea-AI Summary

Datasea (Nasdaq: DTSS) reported unaudited results for the quarter ended September 30, 2025. Revenue was $13.81 million, down 34.5% year‑over‑year as the company restructured toward higher‑margin technology services. Gross profit rose to $1.17 million (about 5.9x prior year) and gross margin improved to 8.46% from 0.93%, driven by higher contribution from 5G+AI multimodal digital solutions and acoustic products. The 5G+AI segment generated $13.32 million, with new vertical solutions contributing RMB 6.53 million (~USD 0.92 million). Management emphasized a strategic pivot from scale to profitability and continued R&D in acoustic AI and neuro‑regulation.

Positive

• Gross profit of $1.17M, a 5.9x increase year‑over‑year
• Gross margin improved to 8.46%, +753 basis points
• 5G+AI segment revenue of $13.32M sustained core sales

Negative

• Total revenue declined 34.5% to $13.81M
• Revenue concentration: $13.32M from 5G+AI segment

Gross Margin Rose to 8.5% through High-Tech Products Mix and Cost Efficiencies

BEIJING, Nov. 13, 2025 /PRNewswire/ -- Datasea Inc. (Nasdaq: DTSS) ("Datasea" or the "Company"), a Nevada-based high-tech enterprise engaged in acoustic technologies and AI multimodal digitalization, today announces its unaudited financial results for its first fiscal quarter ended September 30, 2025.

Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2025.

First Quarter Fiscal 2026 Highlights

• Revenue: $13.81 million as compared to $21.08 million for the first quarter of 2025, a decrease of 34.5%, due to the Company's strategic optimization of its high technology business and a reduction of its low margin operations.
• Gross Profit: $1.17 million as compared to $0.02 million, an increase of 5.9x as compared to the first quarter of 2025, reflecting cost rationalization and operational efficiencies, and a strategic focus on bottom line profitability, driven by high-tech product expansion.
• Gross Margin: 8.46% as compared to 0.93% for the first quarter of 2025, an improvement of 753 basis points, attributable to a higher contribution from high-margin 5G+AI multimodal digital solutions and acoustic technology products.

Management Commentary

Ms. Zhixin Liu, Chief Executive Officer of Datasea, commented, "The first quarter of fiscal 2026 marks a strategic transition for Datasea as we pivot from scale expansion to profitability optimization. Our revenue decreased due to our plan to deliberately restructure our revenue mix toward technology-driven, high value-added businesses, and implement a reduction in standardized low margin 5G AI multimodal top up services. As a result, our gross margin rose sharply to 8.46%, reflecting the success of this structural transformation and the growing contribution from our high-margin AI multimodal and acoustic technology solutions. For example, during the quarter, Shuhai Beijing provided customized 5G+AI multimodal digital services for Yuxiang Zhiyang (Tianjin) Innovation Technology Co., Ltd. and several other clients, focusing on Douyin live-streaming and smart home marketing scenarios, generating total revenue of approximately RMB 6.53 million (around USD0.92 million). Such high-margin, technology-driven solutions have proven the effectiveness of our strategic shift and further enhanced overall profitability."

"The phased decline in revenue is a purposeful and tactical choice that during our optimization process, signals a shift from pursuing scale to emphasizing value creation and sustainable profitability. Looking ahead, the Company will continue to strengthen cost controls and operational efficiency while focusing on technology-driven, high-quality growth. Datasea will advance its 'dual-engine strategy', leveraging both 5G+AI multimodal digitalization and acoustic high-tech innovations to enhance profitability and advance our market leadership."              

Operational Highlights

1. 5G+AI Multimodal Digital Business

• The core revenue driver, contributing $13.32 million during the quarter.
• Benefited from China's rapidly expanding 5G+AI multimodal industry, where Datasea continues to hold a leading position.
• Customer base continued to grow, supporting stable business performance and recurring revenue.
• New vertical solutions achieved revenue realization of RMB 6.53 million ($0.92 million), including:
• AI multimodal services for SMEs
• AI multimodal digital rural services
• AI multimodal new media marketing services
• These high-margin solutions have significantly elevated the Company's overall profitability and confirmed the scalability of its multimodal digitalization business model.

2. Acoustic High-Tech Segment

• Continued R&D progress in 'Acoustics + AI + Neuro-Regulation', focusing on applications in non-invasive health management and acoustic intelligent wearables.
• Expanded retail and cooperative presence in Medical, healthcare, and industrial scenarios, with the product line shifting from single hardware devices to integrated acoustic solution systems.

Business Outlook

Looking ahead, Datasea will continue to:

• The 5G+AI multimodal digital segment: The Company will further upgrade its proprietary AI multimodal platform, expand high-margin customized solutions and SaaS-based subscription services, and drive deeper penetration across SME digitalization, new media marketing, and digital rural development to generate more stable and recurring cash flows.
• The acoustic high-tech segment: The Company will accelerate R&D in 'Acoustics + AI + Neuro-Regulation', promoting the integration of low-intensity focused ultrasound and brain-computer interface technologies to establish a 'Detection–Analysis–Intervention" closed-loop system. The Company will prioritize applications in healthcare, beauty, and intelligent wearable devices, creating new growth opportunities in non-pharmacological health management.

With continuous innovation and the synergistic development of its two core businesses, Datasea aims to achieve sustainable profitability, enhance its gross margin profile, and solidify its position as a competitive global player in high-tech innovation.

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 were Datasea's (DTSS) Q1 fiscal 2026 revenue and gross profit on September 30, 2025?

Datasea reported $13.81 million in revenue and $1.17 million in gross profit for Q1 fiscal 2026.

Why did Datasea (DTSS) revenue fall 34.5% in Q1 2026?

Management said the decline reflects a deliberate shift away from low‑margin operations toward higher‑margin technology businesses.

How much did Datasea (DTSS) improve gross margin in Q1 2026?

Gross margin rose to 8.46% in Q1 2026 from 0.93% in the prior year, a 753 bps improvement.

How much revenue did Datasea (DTSS) generate from its 5G+AI multimodal business in Q1 2026?

The 5G+AI multimodal digital segment contributed $13.32 million during the quarter.

What was the revenue contribution from Datasea's new vertical AI solutions in Q1 2026?

New vertical solutions generated approximately RMB 6.53 million (about USD 0.92 million) in the quarter.

What strategic priorities did Datasea (DTSS) outline after Q1 2026 results?

The company plans to prioritize cost controls, expand high‑margin customized 5G+AI solutions and accelerate R&D in acoustic AI and neuro‑regulation.