Datasea Reports Second Fiscal Quarter 2026 Results
MWN-AI** Summary
Datasea Inc. (Nasdaq: DTSS), a technology enterprise focusing on acoustic technologies and 5G+AI digitalization, has released its unaudited financial results for the second fiscal quarter and the first half of fiscal 2026, ending December 31, 2025. Despite a revenue decrease of 35.46% year-over-year to approximately $26.81 million, the company significantly improved its gross profit, which soared 284.4% to $2.36 million, compared to $0.61 million in the previous year. This remarkable gross profit increase was largely attributed to a strategic pivot towards high-margin, innovative solutions, particularly in the areas of 5G+AI technologies.
The gross margin also experienced a substantial rise to 8.8%, up from 1.5% a year prior, showcasing Datasea’s effective optimization of its revenue mix. CEO Ms. Zhixin Liu emphasized this shift was a deliberate strategy to prioritize revenue quality over top-line growth by eliminating low-margin standardized services. As the company progresses, its emphasis remains on delivering customized, high-margin solutions designed to cater to specific digital marketing and industry needs, enhancing both profitability and recurring revenue.
In addition to its 5G+AI sector, Datasea continues to make strides in the acoustic high-tech domain, focusing on research and development for applications like non-invasive acoustic medicine and brain-computer interfaces, while exploring industrial uses of acoustic technologies. Looking ahead, Datasea aims to reinforce its technological foundation and market competitiveness through sustained innovation and a disciplined approach to operational efficiency, laying the groundwork for its long-term growth ambitions.
MWN-AI** Analysis
**Market Advice: Evaluating Datasea's Q2 Fiscal 2026 Results**
Datasea Inc. (Nasdaq: DTSS) has made noteworthy progress in its second fiscal quarter results for 2026, despite facing a year-over-year decline in revenue. This decrease of 35.46%, down to approximately $26.81 million, can be attributed to a strategic shift away from low-margin services. Instead, the company is emphasizing higher-margin, technology-driven services, particularly in its 5G+AI multimodal digitalization segment.
The significant increase in gross profit—up 284.4% to $2.36 million—and gross margin improvement from 1.5% to 8.8% indicates a successful transition in their business model. The leadership's focus on optimizing product offerings and enhancing service structure is paying off. As a result, while total revenue has declined, the quality of revenue and profitability are on the rise, a positive indicator for long-term investors.
Investors should pay attention to Datasea's strategic direction. With ongoing R&D investments in innovative areas like acoustic medicine and brain-computer interface technologies, coupled with plans to enhance its AI multimodal platform, the company's future revenues could stabilize and potentially grow as these higher-margin sectors develop.
Moreover, the strategic focus on customized solutions and selective customer engagement positions Datasea well against competitors. The advancement in acoustic high-tech initiatives also expands its market opportunities, paving the way for diversified income streams.
However, risks remain, including fluctuating demand in the technology sector and potential operational challenges associated with transitioning business models. Investors should monitor these developments closely. Given Datasea's commitment to improved profitability and a resilient growth foundation, it may present a compelling investment opportunity for those willing to weather short-term volatility for potential long-term gains.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
PR Newswire
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
[email protected]
Precept Investor Relations LLC
David Rudnick
+1 646-694-8538
[email protected]
SOURCE Datasea Inc.
FAQ**
How does Datasea Inc. DTSS plan to sustain its gross profit growth of 284.4% year-over-year while facing a significant revenue decline of 35.46% due to the reduction of low-margin services in fiscal Q2 2026?
What specific measures is Datasea Inc. DTSS implementing to enhance the profitability of its 5G+AI multimodal digital solutions and ensure a more selective customer mix moving forward?
Can management elaborate on the potential commercialization pathways for Datasea Inc. DTSS's R&D initiatives in acoustic technologies and how they will support future revenue growth?
How does Datasea Inc. DTSS intend to balance its focus on higher-margin, technology-driven business lines with the risks associated with ongoing strategic shifts in its operational model?
**MWN-AI FAQ is based on asking OpenAI questions about Datasea Inc. (NASDAQ: DTSS).
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