Datasea 2025 Q3 Earnings Narrowed Losses by 56.9%

Datasea (DTSS) reported its fiscal 2025 Q3 earnings on May 14th, 2025. Datasea's Q3 results showed a significant improvement in financial performance, with narrowed losses and a substantial increase in revenue. The company reported a 648.7% year-over-year increase in total revenue, reaching $10.35 million. This impressive growth was driven by strong performance in its 5G AI multimodal digital business. Despite ongoing financial challenges, the company successfully reduced its net loss by 56.9% compared to the same quarter last year. Datasea's future outlook remains cautiously optimistic, with management focusing on strategic investments and operational efficiencies.

Revenue

Datasea reported a remarkable revenue increase of 648.7% in Q3 2025, totaling $10.35 million, compared to $1.38 million in Q3 2024. The 5G AI Multimodal Digital Business was a major contributor, generating $10.34 million. The multimodal top-up segment followed closely with $10.13 million. The 5G AI digital technical service added $212,928, while the Acoustic Intelligence Business brought in $11,140. Other contributions included $2,627 from Ultrasonic Sound Air Disinfection Equipment, $4,075 from the Upgraded Sonic Sterilization and Purification Guardian, and $4,438 from Sleep Monitor sales. Additionally, software sales accounted for $326,936, and miscellaneous sources added another $498 to the total.

Earnings/Net Income

Datasea significantly improved its financial standing in Q3 2025 by narrowing its loss per share to $0.24, an 84.5% improvement from the $1.55 loss per share in Q3 2024. The net loss was also reduced to $1.78 million, down from $4.14 million in the previous year. The EPS indicates a positive trend in financial recovery.

Price Action

The stock price of Datasea dropped 4.74% during the latest trading day, remained steady over the past week, and experienced a 14.13% increase month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing Datasea shares after its revenue increase on the financial report release date and holding for 30 days has historically underperformed the market over the past five years. This approach yielded an annualized return of -3.56%, significantly lower than the market average of 18.58%. In contrast, Linde (LIN), with a market capitalization of $210.90 billion, achieved an average annual return of 18.58% over the same period, highlighting Linde's superior performance relative to Datasea. This disparity underscores the challenges Datasea faces in delivering consistent shareholder value through its current strategies.

CEO Commentary

Zhixin Liu, CEO of Datasea Inc., emphasized the company's ongoing commitment to leveraging advanced technology to enhance its service offerings. He highlighted recent initiatives that have contributed to a modest revenue increase, despite facing significant market challenges and a competitive landscape. Liu noted the importance of strategic investments in 5G messaging services and smart city solutions, which are crucial for future growth. The CEO maintained a cautious yet optimistic outlook, acknowledging the need for continuous adaptation to market dynamics while reinforcing Datasea's positioning as a key player in the technology sector.

Guidance

For the upcoming fiscal year, Datasea anticipates revenue of approximately $10.35 million, alongside an expected EPS of -0.24. The company aims to navigate current market conditions by focusing on operational efficiencies and strategic partnerships, reinforcing its commitment to long-term growth. Additionally, management expects to enhance its market presence through targeted investments in technology and innovation, while remaining vigilant about potential risks and operational challenges that may arise.

Additional News

Datasea has been actively expanding its market presence through various strategic endeavors. The company announced agreements to place its acoustic high-tech products in an additional 200 beauty stores in Northern China, expecting to generate sales of 120,000 units and $8.2 million in revenue by the end of 2025. Furthermore, Datasea secured new contracts worth approximately $30 million and was selected as a prospective strategic partner by China Mobile Internet. These developments reflect the company's strategic focus on expanding its footprint in both the acoustics high-tech and 5G+AI multimodal digital sectors, aiming to enhance market penetration and drive long-term shareholder value.