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
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 13 2025
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Should l Buy DTSS?
Source: PRnewswire
Financial Performance: Datasea Inc. reported a revenue of $13.81 million for Q1 fiscal 2026, a 34.5% decrease from the previous year, but achieved a gross profit of $1.17 million, significantly up from $0.02 million, leading to a gross margin increase to 8.46%.
Strategic Shift: The company is transitioning from scale expansion to profitability optimization by restructuring its revenue mix towards high-margin, technology-driven products, particularly in the 5G+AI multimodal digital and acoustic technology sectors.
Operational Highlights: The 5G+AI segment remains the core revenue driver, contributing $13.32 million, while the acoustic high-tech segment is advancing in R&D for health management applications, indicating a focus on integrated solutions.
Future Outlook: Datasea plans to enhance its AI multimodal platform and accelerate R&D in acoustic technologies, aiming for sustainable profitability and solidifying its competitive position in high-tech innovation.
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Analyst Views on DTSS
About DTSS
Datasea Inc is a China-based company principally engaged in the development of digital intelligence technology. The Company's main business is the provision of comprehensive software and hardware solutions for customers in the fields of fifth generation (5G) communication, acoustic intelligence, and smart city management. The Company's main products include 5G technology message marketing cloud platform (5G MMCP), 5G technology comprehensive message marketing cloud platform (5G IMMCP), Smart Push and other information services. The Company also produces ultrasonic sound sterilization and antivirus equipment and smart city systems. The Company mainly conducts its business in the domestic market.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Datasea Reports Q2 Revenue of $26.81 Million
- Significant Revenue Growth: Datasea's Q2 revenue reached $26.81 million, representing a 284.4% increase year-over-year, indicating strong market demand and the company's ability to expand in the 5G+AI multimodal solutions sector.
- Substantial Gross Profit Increase: Gross profit surged from $0.61 million in the same period last year to $2.36 million, an increase of $1.75 million, reflecting significant improvements in cost efficiencies and an optimized high-margin product mix.
- Improved Gross Margin: Gross margin rose to 8.8%, up from 1.5% year-over-year, primarily due to the optimized revenue mix from high-margin 5G+AI solutions, enhancing the company's profitability.
- Innovation-Driven Growth: The company's leadership in delivering innovative value-added 5G+AI multimodal solutions has driven both revenue and gross profit growth, indicating a sustained competitive advantage in the market.
See More
Datasea Reports 284.4% Increase in Gross Profit for Q2
- Significant Gross Profit Increase: Datasea reported a 284.4% year-over-year increase in gross profit for the first half of fiscal 2026, with gross margin rising 730 basis points to 8.8%, indicating successful optimization of its high-value business mix despite a decline in revenue.
- Effective Strategic Shift: CEO Zhixin Liu noted that while revenue decreased due to a deliberate reduction in low-margin standardized services, the substantial growth in gross profit and margin underscores the effectiveness of the company's transition towards higher-quality revenue, with a continued focus on high-margin customized solutions.
- Advancement in Technology Innovation: Datasea is accelerating its 5G+AI multimodal digitalization business, emphasizing high-margin customized solutions while exploring the application potential of acoustic technologies in industrial and precision manufacturing to enhance its technological leadership and broaden market reach.
- Outlook for Future Growth: The company aims to further improve its profitability profile and establish a more resilient and sustainable foundation for long-term growth through disciplined execution and sustained technological innovation, ensuring its competitive edge in a challenging market.
See More
Datasea Reports 284.4% Increase in Gross Profit for Q2
- Significant Gross Profit Growth: Datasea reported a gross profit of $2.36 million for the first half of fiscal 2026, a remarkable increase of 284.4% year-over-year from $0.61 million, indicating the company's successful pivot towards high-value, technology-driven business lines.
- Improved Gross Margin: The gross margin rose from 1.5% to 8.8%, primarily due to the company's strategic optimization of its revenue mix by reducing low-margin standardized services, thereby enhancing overall profitability.
- Effective Strategic Shift: The CEO noted that despite a 35.46% year-over-year revenue decline to approximately $26.81 million, the significant increase in both gross profit and margin underscores the effectiveness of the company's transition towards higher-quality revenue, with a continued focus on high-margin customized solutions.
- Advancement in Technological Innovation: Datasea is advancing its R&D in acoustic high-tech, exploring non-invasive acoustic medicine and brain-computer interface technologies, aiming to expand its market presence and strengthen its technological leadership, laying a solid foundation for future growth.
See More
Datasea Inc. Reports 278% Year-over-Year Gross Profit Increase in Q2
- Significant Profit Growth: Datasea achieved a 278% year-over-year increase in gross profit for Q2 FY2026, with gross margin rising to 8.7%, indicating substantial progress in its strategic shift towards high-value, technology-driven businesses that supports long-term sustainable development.
- Strategic Transition Progress: During the first half of FY2026, the company focused on profitability optimization rather than solely revenue growth, deepening the application of 5G+AI multimodal digital solutions and enhancing the contribution of technology-oriented products within its overall business mix.
- Core Technology Applications: Datasea has made phased progress in core acoustic technologies, steadily advancing product validation and deployment of non-invasive acoustic modulation and acoustic neuromodulation solutions in health management, laying the groundwork for future business expansion.
- Global Expansion Plans: The establishment of Datasea Acoustics LLC in Delaware in July 2023 marks the company's strategic entry into the U.S. market, further advancing its global expansion initiatives.
See More
Datasea Inc. Reports 278% Year-over-Year Gross Profit Increase in Q2
- Revenue Expectations: For the six months ended December 31, 2025, Datasea anticipates revenue of approximately $26.68 million, indicating sustained growth potential amid a strategic transition, despite a moderated pace of revenue expansion.
- Significant Gross Profit Increase: The company expects gross profit to reach approximately $2.32 million, representing a remarkable year-over-year increase of 278%, underscoring the effectiveness of its shift towards high-value, technology-driven businesses and enhancing profitability.
- Improved Gross Margin: The expected gross margin of 8.7% marks a substantial improvement from 1.48% in the prior year, reflecting the successful transition to high-margin customized solutions, thereby strengthening market competitiveness.
- Strategic Transformation Progress: By deliberately reducing low-margin 5G AI communication services and increasing contributions from high-margin 5G+AI customized solutions, the company continues to advance the application of its acoustic high-tech products, demonstrating its strategic commitment to technology-driven value creation.
See More
Datasea Unveils New Acoustic Technologies to Support Brain-Computer Interface Market
- Technological Advancements: Datasea announced significant progress in acoustic-driven technologies for brain-computer interfaces (BCI) and rehabilitation robot control, marking an important extension of its core technology framework that is expected to enhance applications in medical rehabilitation and health robotics.
- Assistive Communication: The newly developed BCI system aims to assist patients with neurological conditions, such as stroke survivors, in intention recognition and system control, addressing practical challenges like variability in neural signal quality, thereby improving patient communication and quality of life.
- Rehabilitation Robot Control: The second initiative focuses on translating neural signals from brain-computer interfaces into control logic for upper-limb rehabilitation training robots, aiming to enhance the effectiveness of rehabilitation training and promote future developments in human-machine collaboration.
- Market Outlook: According to industry reports from 2024, the global brain-computer interface market is experiencing sustained growth, and Datasea believes that increasing demand in rehabilitation medicine and eldercare will provide a favorable environment for the long-term R&D and application expansion of BCI technologies.
See More
Datasea Reports Q2 Revenue of $26.81 Million
- Significant Revenue Growth: Datasea's Q2 revenue reached $26.81 million, representing a 284.4% increase year-over-year, indicating strong market demand and the company's ability to expand in the 5G+AI multimodal solutions sector.
- Substantial Gross Profit Increase: Gross profit surged from $0.61 million in the same period last year to $2.36 million, an increase of $1.75 million, reflecting significant improvements in cost efficiencies and an optimized high-margin product mix.
- Improved Gross Margin: Gross margin rose to 8.8%, up from 1.5% year-over-year, primarily due to the optimized revenue mix from high-margin 5G+AI solutions, enhancing the company's profitability.
- Innovation-Driven Growth: The company's leadership in delivering innovative value-added 5G+AI multimodal solutions has driven both revenue and gross profit growth, indicating a sustained competitive advantage in the market.
See More
Datasea Reports 284.4% Increase in Gross Profit for Q2
- Significant Gross Profit Increase: Datasea reported a 284.4% year-over-year increase in gross profit for the first half of fiscal 2026, with gross margin rising 730 basis points to 8.8%, indicating successful optimization of its high-value business mix despite a decline in revenue.
- Effective Strategic Shift: CEO Zhixin Liu noted that while revenue decreased due to a deliberate reduction in low-margin standardized services, the substantial growth in gross profit and margin underscores the effectiveness of the company's transition towards higher-quality revenue, with a continued focus on high-margin customized solutions.
- Advancement in Technology Innovation: Datasea is accelerating its 5G+AI multimodal digitalization business, emphasizing high-margin customized solutions while exploring the application potential of acoustic technologies in industrial and precision manufacturing to enhance its technological leadership and broaden market reach.
- Outlook for Future Growth: The company aims to further improve its profitability profile and establish a more resilient and sustainable foundation for long-term growth through disciplined execution and sustained technological innovation, ensuring its competitive edge in a challenging market.
See More
Datasea Reports 284.4% Increase in Gross Profit for Q2
- Significant Gross Profit Growth: Datasea reported a gross profit of $2.36 million for the first half of fiscal 2026, a remarkable increase of 284.4% year-over-year from $0.61 million, indicating the company's successful pivot towards high-value, technology-driven business lines.
- Improved Gross Margin: The gross margin rose from 1.5% to 8.8%, primarily due to the company's strategic optimization of its revenue mix by reducing low-margin standardized services, thereby enhancing overall profitability.
- Effective Strategic Shift: The CEO noted that despite a 35.46% year-over-year revenue decline to approximately $26.81 million, the significant increase in both gross profit and margin underscores the effectiveness of the company's transition towards higher-quality revenue, with a continued focus on high-margin customized solutions.
- Advancement in Technological Innovation: Datasea is advancing its R&D in acoustic high-tech, exploring non-invasive acoustic medicine and brain-computer interface technologies, aiming to expand its market presence and strengthen its technological leadership, laying a solid foundation for future growth.
See More
Datasea Inc. Reports 278% Year-over-Year Gross Profit Increase in Q2
- Significant Profit Growth: Datasea achieved a 278% year-over-year increase in gross profit for Q2 FY2026, with gross margin rising to 8.7%, indicating substantial progress in its strategic shift towards high-value, technology-driven businesses that supports long-term sustainable development.
- Strategic Transition Progress: During the first half of FY2026, the company focused on profitability optimization rather than solely revenue growth, deepening the application of 5G+AI multimodal digital solutions and enhancing the contribution of technology-oriented products within its overall business mix.
- Core Technology Applications: Datasea has made phased progress in core acoustic technologies, steadily advancing product validation and deployment of non-invasive acoustic modulation and acoustic neuromodulation solutions in health management, laying the groundwork for future business expansion.
- Global Expansion Plans: The establishment of Datasea Acoustics LLC in Delaware in July 2023 marks the company's strategic entry into the U.S. market, further advancing its global expansion initiatives.
See More
Datasea Inc. Reports 278% Year-over-Year Gross Profit Increase in Q2
- Revenue Expectations: For the six months ended December 31, 2025, Datasea anticipates revenue of approximately $26.68 million, indicating sustained growth potential amid a strategic transition, despite a moderated pace of revenue expansion.
- Significant Gross Profit Increase: The company expects gross profit to reach approximately $2.32 million, representing a remarkable year-over-year increase of 278%, underscoring the effectiveness of its shift towards high-value, technology-driven businesses and enhancing profitability.
- Improved Gross Margin: The expected gross margin of 8.7% marks a substantial improvement from 1.48% in the prior year, reflecting the successful transition to high-margin customized solutions, thereby strengthening market competitiveness.
- Strategic Transformation Progress: By deliberately reducing low-margin 5G AI communication services and increasing contributions from high-margin 5G+AI customized solutions, the company continues to advance the application of its acoustic high-tech products, demonstrating its strategic commitment to technology-driven value creation.
See More
Datasea Unveils New Acoustic Technologies to Support Brain-Computer Interface Market
- Technological Advancements: Datasea announced significant progress in acoustic-driven technologies for brain-computer interfaces (BCI) and rehabilitation robot control, marking an important extension of its core technology framework that is expected to enhance applications in medical rehabilitation and health robotics.
- Assistive Communication: The newly developed BCI system aims to assist patients with neurological conditions, such as stroke survivors, in intention recognition and system control, addressing practical challenges like variability in neural signal quality, thereby improving patient communication and quality of life.
- Rehabilitation Robot Control: The second initiative focuses on translating neural signals from brain-computer interfaces into control logic for upper-limb rehabilitation training robots, aiming to enhance the effectiveness of rehabilitation training and promote future developments in human-machine collaboration.
- Market Outlook: According to industry reports from 2024, the global brain-computer interface market is experiencing sustained growth, and Datasea believes that increasing demand in rehabilitation medicine and eldercare will provide a favorable environment for the long-term R&D and application expansion of BCI technologies.
See More
