Datasea Reports Second Fiscal Quarter 2026 Results

Rhea-AI Summary

Datasea (Nasdaq: DTSS) reported second fiscal quarter results for the six months ended Dec 31, 2025, showing a strategic shift toward higher‑margin technology businesses.

Revenue was approximately $26.81 million, down 35.46% YoY. Gross profit rose to $2.36 million (+284.4% YoY) and gross margin expanded 730 basis points to 8.8%, driven by cost efficiencies and a move away from low‑margin standardized services. Management highlighted continued investment in 5G+AI multimodal solutions and acoustic high‑tech R&D (acoustic medicine, brain–computer interfaces, intelligent acoustic systems).

Positive

• Gross profit increased 284.4% to $2.36M
• Gross margin expanded 730 bps to 8.8%
• Strategic shift to higher‑margin 5G+AI multimodal solutions
• Ongoing R&D in acoustic high‑tech (medicine, BCI, health robotics)

Negative

• Revenue declined 35.46% YoY to $26.81M
• Top‑line reduction of $14.73M vs prior year due to exiting low‑margin services

News Market Reaction

-7.61%

2 alerts

-7.61% News Effect

+3.5% Peak Tracked

-12.9% Trough Tracked

-$738K Valuation Impact

$9M Market Cap

0.3x Rel. Volume

On the day this news was published, DTSS declined 7.61%, reflecting a notable negative market reaction. Argus tracked a peak move of +3.5% during that session. Argus tracked a trough of -12.9% from its starting point during tracking. Our momentum scanner triggered 2 alerts that day, indicating moderate trading interest and price volatility. This price movement removed approximately $738K 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

Six-month revenue: $26.81 million Prior-year revenue: $41.54 million Revenue decrease: $14.73 million +5 more

8 metrics

Six-month revenue $26.81 million Six months ended Dec 31, 2025; fiscal 2026

Prior-year revenue $41.54 million Same six-month period prior year

Revenue decrease $14.73 million Six-month year-over-year decline

Revenue change 35.46% decrease Six-month year-over-year comparison

Gross profit $2.36 million Six months ended Dec 31, 2025

Prior-year gross profit $0.61 million Same six-month period prior year

Gross profit increase $1.75 million Six-month year-over-year increase

Gross margin 8.8% Six months ended Dec 31, 2025; vs 1.5% prior year

Market Reality Check

Price: $0.9260 Vol: Volume 30,972 is below 20...

low vol

$0.9260 Last Close

Volume Volume 30,972 is below 20-day average 132,233 (relative volume 0.23). low

Technical Price at $1.05, trading below 200-day MA at $1.76 and 63.67% under 52-week high.

Peers on Argus

DTSS was down 6.23% while several close peers such as BLIN, BNAI, FAAS, OLB, and...

2 Up

DTSS was down 6.23% while several close peers such as BLIN, BNAI, FAAS, OLB, and MSAI also traded lower, but momentum scans showed other names like BNAI and DVLT moving up, indicating mixed sector action and a stock-specific move for DTSS.

Historical Context

5 past events · Latest: Jan 21 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Jan 21	Results pre-announcement	Positive	-5.5%	Pre-announced higher gross margin and gross profit on lower revenue base.
Jan 20	Product deployment plan	Positive	+9.0%	18-month commercialization plan for acoustic haircare robots across China.
Jan 12	Technology advancement	Positive	+4.3%	Announced acoustic-driven BCI progress for assistive communication and rehab control.
Jan 5	Strategic collaboration	Positive	+21.3%	Collaboration to apply acoustic tech to non-invasive BCI and healthcare robots.
Dec 17	AI deployment partnership	Positive	-3.1%	Partnership to deploy Acoustics + AI beauty and health intelligence system.

Pattern Detected

DTSS often reacts positively to technology and commercialization updates, but has shown negative reactions around financial disclosures and some AI/acoustics milestones despite constructive narratives.

Recent Company History

Over the last few months, DTSS highlighted a strategic pivot toward higher-margin 5G+AI and acoustics. On Dec 17, 2025, it announced an Acoustics + AI beauty and health system deployment. A Jan 5, 2026 BCI collaboration and Jan 12 acoustic BCI advancements reinforced this focus. Commercialization plans for acoustic haircare robots followed on Jan 20. The Jan 21 pre-announcement foreshadowed today’s results, emphasizing margin expansion over top-line growth.

Market Pulse Summary

The stock moved -7.6% in the session following this news. A negative reaction despite margin improve...

Analysis

The stock moved -7.6% in the session following this news. A negative reaction despite margin improvement fits prior instances where DTSS sold off around results and strategic updates. The six-month revenue decline to $26.81 million, down 35.46%, contrasted with gross profit rising to $2.36 million and margin to 8.8%. Earlier pre-announced figures on Jan 21 and ongoing going-concern language in filings may have kept attention on execution risks and funding needs, increasing sensitivity to any downside surprise.

Key Terms

5g+ai multimodal digitalization, non-invasive acoustic medicine, brain–computer interface technologies, health robotics

4 terms

5g+ai multimodal digitalization technical

"a Nevada-based technology enterprise engaged in acoustic technologies and 5G+AI multimodal digitalization"

A combined approach that uses high-speed 5G wireless networks and artificial intelligence to collect, fuse and act on many types of data at once—such as video, audio, sensor readings and text—to turn physical operations into digital workflows. Think of 5G as a faster highway and AI as a smart traffic manager that routes different vehicles (data types) efficiently; investors watch this because it can unlock new products, cost savings, faster decision-making and scalable revenue opportunities.

non-invasive acoustic medicine medical

"R&D is increasingly centered on non-invasive acoustic medicine, brain–computer interface technologies"

Non-invasive acoustic medicine uses focused sound waves, often ultrasound, to diagnose or treat tissue without cutting the skin or inserting instruments. It can reduce pain, speed healing, or target problems deep in the body by delivering energy from outside, much like using a focused speaker to move something inside a closed box. Investors care because it sits at the intersection of medical devices and therapies: clinical evidence, regulatory clearance, ease of use, and reimbursement determine how quickly such technologies can be adopted and generate revenue.

brain–computer interface technologies medical

"R&D is increasingly centered on non-invasive acoustic medicine, brain–computer interface technologies"

Systems that read and/or write neural signals so a computer can interpret a person’s intentions or the brain can receive digital input, effectively acting like a translator between the mind and a machine. Investors care because these technologies can create new markets — from medical treatments to consumer devices — but they also carry high development costs, long regulatory paths and ethical or safety risks that can strongly affect a company’s value and timeline to profit.

health robotics medical

"non-invasive acoustic medicine, brain–computer interface technologies, intelligent acoustic systems and health robotics."

Health robotics are machines and automated systems designed to perform or assist with medical tasks—ranging from surgical tools and rehabilitation devices to robots that deliver medication or help monitor patients. For investors, they matter because these technologies can change how care is delivered, potentially lowering costs, improving outcomes, and creating new revenue streams; adoption, regulatory approvals, and demonstrated clinical benefits are the key drivers of their financial value, much like a reliable new tool reshaping a trade.

AI-generated analysis. Not financial advice.

Gross Profit Increased 284.4% Year-over-Year and Gross Margin Increases 730 Basis Points to 8.8%

BEIJING, Feb. 12, 2026 /PRNewswire/ -- Datasea Inc. (Nasdaq: DTSS) ("Datasea" or the "Company"), a Nevada-based technology enterprise engaged in acoustic technologies and 5G+AI multimodal digitalization, today announced its unaudited financial results for the second fiscal quarter and the six months ended December 31, 2025. Additional details will be available in the Company's Quarterly Report on Form 10-Q as filed with the SEC.

Six Month Fiscal 2026 Highlights for the Period Ended December 31, 2025

• Revenue: Approximately $26.81 million compared with $41.54 million for the same period last year, representing a decrease of $14.73 million, or 35.46%. This was primarily due to the Company's successful execution of its strategic plan to reduce its low-margin standardized services and optimize its revenue mix toward high-value, technology-driven business lines.
• Gross Profit: $2.36 million, compared with $0.61 million in the same period last year, representing an increase of $1.75 million, or 284.4% year-over-year. This was driven by improved cost efficiencies and the Company's leadership in delivering innovative value-added 5G+AI multimodal solutions.
• Gross Margin: 8.8%, compared with 1.5% in the same period last year, primarily as a result of an optimized revenue mix from high margin value-added 5G+AI multimodal solution.

Management Commentary 

Ms. Zhixin Liu, Chief Executive Officer of Datasea, commented, "The first half of fiscal 2026 reflects our continued execution of a strategic shift away from top-line growth toward higher-quality revenue and improved profitability. While revenue declined year-over-year as a result of our deliberate reduction of low-margin standardized services, both gross profit and gross margin expanded meaningfully, underscoring the effectiveness of our technology-driven, higher-value business mix."

"We continued to advance our 5G+AI multimodal digitalization business with a strategic focus on higher-margin, customized solutions and a more selective customer mix. Through ongoing optimization of our product and service structure, we believe this business segment will remain a key contributor to revenue stability and profitability going forward."

"At the same time, we are advancing our acoustic high-tech initiatives designed to extend our technology leadership and future growth. Our R&D is increasingly centered on non-invasive acoustic medicine, brain–computer interface technologies, intelligent acoustic systems and health robotics. In parallel, we are exploring the technical capabilities and application potential of acoustic technologies in industrial and precision manufacturing environments. Collectively, these initiatives both augment and strengthen our core technology, and broaden our addressable markets, positioning the Company's for future growth beyond its current core businesses."

Operational Highlights

1. 5G+AI Multimodal Digital Business

• Was the Company's primary revenue contributor during the six-month period.
• Continued strategic emphasis on high-margin, customized AI multimodal solutions, including services for SMEs, digital marketing scenarios, and industry-specific applications.
• Ongoing optimization of customer mix and service structure supported improved overall profitability and recurring revenue quality.

2. Acoustic High-Tech Segment

• Continued advancement of R&D initiatives in acoustic medicine, brain–computer interface technologies, intelligent acoustic systems and health robotics, while expanding the exploration of engineering-level application scenarios and engineering validation pathways for acoustic technologies in industrial and precision manufacturing environments;
• The acoustic business direction continues to evolve from single-product exploration toward integrated and system-level development, laying the foundation for subsequent technical validation, application expansion and potential commercialization.

Business Outlook

Looking ahead, Datasea will continue to advance its strategic priorities:

• 5G+AI Multimodal Digitalization: further enhancement of the Company's proprietary AI multimodal platform, expansion of high-margin customized solutions, and exploration of scalable and replicable service models to support stable and recurring cash flows.
• Acoustic High-Tech Innovation: accelerated R&D efforts in acoustic medicine, brain–computer interface technologies, intelligent systems and health robotics, while continuing to explore the technical capabilities and application potential of acoustic technologies in industrial and precision manufacturing application scenarios, with the objective of gradually building long-term, platform-based acoustic technology capabilities.

Through disciplined execution and sustained technological innovation, Datasea aims to further improve its profitability profile, strengthen operational efficiency, and establish a more resilient and sustainable foundation for long-term growth.

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) revenue and gross profit for the six months ended Dec 31, 2025?

Revenue was approximately $26.81 million, and gross profit was $2.36 million. According to the company, revenue fell 35.46% YoY while gross profit rose 284.4% due to an improved revenue mix and cost efficiencies.

Why did Datasea (DTSS) report lower revenue in H1 fiscal 2026?

The company deliberately reduced low‑margin standardized services to shift toward higher‑value offerings. According to the company, this strategic change reduced revenue by $14.73 million year‑over‑year.

How did Datasea's (DTSS) gross margin change in the six months ended Dec 31, 2025?

Gross margin widened to 8.8%, up 730 basis points year‑over‑year. According to the company, the increase reflects an optimized mix toward higher‑margin 5G+AI multimodal solutions and cost improvements.

What are Datasea's (DTSS) main growth priorities after Feb 12, 2026 results?

Datasea plans to expand proprietary 5G+AI multimodal solutions and accelerate acoustic high‑tech R&D. According to the company, focus areas include scalable customized solutions and platform‑level acoustic capabilities.

What acoustic technologies is Datasea (DTSS) developing and why do they matter?

Datasea is advancing acoustic medicine, brain–computer interfaces, intelligent acoustic systems and health robotics. According to the company, these R&D efforts aim to broaden addressable markets and support future commercial opportunities.

Does Datasea (DTSS) expect profitability to improve after the strategic shift?

Management expects improved profitability through higher‑margin services and operational efficiency. According to the company, disciplined execution and tech innovation should strengthen long‑term profitability and recurring cash flows.