Datasea Reports Second Fiscal Quarter 2025 Revenue of $20.5 Million, Up 81.4% Year-over-Year

PR Newswire

BEIJING, Feb. 14, 2025

Datasea's Top Line Growth Fueled by the Expansion of its State-of-the-Art 5G+AI Multimodal Digital Segment in China

BEIJING, Feb. 14, 2025 /PRNewswire/ -- Datasea Inc. $(DTSS)$ ("Datasea", the "Company", "we", "us", or "our"), a Nevada-based technology company specializing in 5G+AI multimodal digital solutions and acoustic high-tech innovations, today announced its financial results for its second fiscal quarter ended December 31, 2024. The Company reported revenue of approximately $20.5 million, an increase of approximately 81.4% compared to revenue of approximately $11.3 million for the same period in the prior year. The increase was driven by the accelerated adoption of its 5G+AI multimodal digital business services in China due to the Company's continued commercialization of acoustic high-tech products.

Ms. Zhixin Liu, CEO of Datasea, commented, "Our strong performance in the second fiscal quarter reflects the successful expansion of our 5G+AI multimodal digital business customer base, where we continue to be an industry leader. We believe the expanding footprint of our 5G+AI customer base and the initial market penetration of our high-margin acoustic products underscore our ability to innovate and capture emerging opportunities. We remain committed to advancing our technological innovation while driving sustainable growth."

Financial Highlights

   -- Revenue: Revenue for the Company's second fiscal quarter of 2025 was 
      approximately $20.5 million, an increase of approximately 81.4% compared 
      to revenue of approximately $11.3 million for the second fiscal quarter 
      of 2024. This increase was primarily driven by the growth of the 
      Company's 5G+AI multimodal digital business in China, especially the 
      continuous enhancement of the effectiveness and efficiency of 5G 
      multimodal digital products and services through AI technology. 
 
   -- Gross Profit: Gross profit for the Company's second fiscal quarter of 
      2025 was approximately $0.4 million, and our gross margin for the second 
      fiscal quarter was approximately 2.0%. This marks an improvement from the 
      same period in the prior year when the Company recorded gross profit of 
      approximately $0.1 million and a gross margin of approximately 0.9%. 
 
   -- Intangible Assets: As of December 31, 2024, and June 30, 2024, the 
      Company's net value of intangible assets was $4,081,544 and $546,001, 
      respectively, reflecting an increase of $3,535,543, or 647%. The increase 
      in intangible assets is crucial to the Company's growth and success. The 
      enhancement of intangible assets, including patents, has simultaneously 
      increased the overall value of the business, promoted sustainable 
      development, and contributed to the Company's long-term success. 
 
   -- Inventory: As of December 31, 2024, the Company's inventory was $319,932, 
      an increase of $166,349 from $153,583 on June 30, 2024, marking an 
      increase of 108.31%. The increase in inventory primarily reflects the 
      continued rise in customer orders within the acoustic high-tech business. 
      Maintaining an appropriate inventory level helps the Company address 
      sudden surges in demand or price hikes, secure discounts through bulk 
      purchases, reduce procurement costs, and ensure timely capture of sales 
      opportunities during promotions or peak seasons. The inventory growth 
      reflects the healthy expansion of the Company's business and strategic 
      preparations for future growth. 

Business Highlights -- 5G+AI Multimodal Digital Business

1. Technological Leadership

   -- The Company's AI multimodal models have made breakthroughs in areas such 
      as sentiment analysis, machine translation, and natural language 
      processing, expanding the boundaries of intelligent system applications. 
      Currently, the Company is integrating DeepSeek's distributed training 
      methods and mixed-precision training techniques, utilizing half-precision 
      (FP16) and single-precision (FP32) floating-point numbers. After fusing 
      multiple sensory inputs, the models are able to enhance data 
      understanding, analysis accuracy, and decision-making reliability. 
 
   -- In line with the Company's business needs, a self-designed Transformer 
      model architecture has been developed, which is capable of processing 
      inputs from multiple modalities in parallel. Datasea's 5G+AI platform 
      incorporates this architecture, utilizing the self-attention mechanism to 
      deeply learn the complex interactions between modalities. This approach 
      excels in applications such as image-text correlation analysis and 
      audio-video synchronization. After integrating DeepSeek's training 
      methods, the platform will further advance in areas such as natural 
      language generation, multilingual processing, code optimization, and 
      logical reasoning, providing more comprehensive and accurate responses. 

2. Key Contracts

   -- The Company's subsidiaries have signed new contracts worth up to an 
      aggregate of approximately $30 million with Qingdao Ruizhi Yixing, Wuhan 
      Xiaoming Technology, and other clients since last quarter, further 
      reinforcing market penetration. 

3. Strategic Collaboration

   -- We were selected as a prospective strategic partner by China Mobile 
      Internet (a subsidiary of China Mobile), which has the potential to 
      expand our opportunities for large-scale 5G infrastructure project 
      collaborations. 
 
   -- Our 5G+AI platform is capable of serving 52 million enterprises and 124 
      million individual businesses in China, facilitating digital 
      transformation across sectors including finance, logistics, and 
      agriculture. 

Business Highlights -- Acoustic High-Tech Business

1. Technological Innovation

   -- We are focused on the research and application of multiple advanced 
      acoustic technologies, including ultrasound, infrasound, and Schumann 
      resonance. By integrating the latest findings in acoustics, mechanical 
      transduction, and vibration dynamics, the Company is developing AI-driven 
      acoustic high-tech products with unique competitive advantages. 
 
   -- We have developed distinct technical expertise in the study and 
      application of non-audible mechanical wave effects, leveraging the 
      cavitation, thermal, and mechanical effects of ultrasound to support a 
      variety of applications such as environmental disinfection, crop pest 
      control, photosynthetic absorption, seed treatment, water purification, 
      safety monitoring, skincare, and healthcare. 

2. Product Development

   -- Our ultrasonic disinfection machine series and the "Star Dream" 
      non-contact sleep aid device utilize Schumann resonance and AI-powered 
      acoustic algorithms to enhance health living and company's product 
      performance. 
 
   -- Our planned calendar year 2025 acoustic product releases include 
      applications in environmental acoustic technology and neurological 
      acoustic technology, such as the development of a pet deodorizing 
      purifier and mechanical wave-based brain cortical cortisol regulation 
      device, both of which target growing consumer markets. 

3. Product Placement and Expansion Plans

   -- In January 2025, the Company reported that it has partnered with a 
      significant number of beauty and health management companies in Tianjin 
      and Hubei Provinces, introducing acoustic high-tech products to 463 
      beauty and personal care stores. By the end of calendar year 2025, the 
      Company expects to sell up to 260,000 units of acoustic air disinfection 
      devices and sleep products, with total projected revenue of approximately 
      $19 million (approximately Yen1.33 billion RMB), achieving significant 
      market penetration in Northern China. 
 
   -- We plan to expand into the U.S. market, including partnerships with U.S. 
      e-commerce platforms and distributors. 
 
   -- We are strengthening our intellectual property $(IP)$ portfolio, enhancing 
      patents covering ultrasound medical imaging, precision acoustic 
      industrial manufacturing, acoustic applications in agriculture, and 
      acoustic IoT (Internet of Things) technologies. 

Operational and Strategic Outlook

   -- Margin Improvement: We intend to drive profitability by scaling 
      high-margin acoustic products (e.g., ultrasonic sterilizers, sleep aids) 
      and offering technical services through the Company's 5G+AI platform, 
      thereby reducing customer acquisition costs for Company's industrial 
      clients. 
 
   -- Global Expansion: We plan to accelerate international market entry into 
      the U.S. and Europe and expand our acoustic high-tech business through 
      strategic partnerships and mergers & acquisitions. 
 
   -- Gross Margin Improvement: We expect to focus on scaling high-margin 
      acoustic products (e.g., ultrasonic sterilizers, sleep aids) and reducing 
      5G+AI customer acquisition costs. 
 
   -- Global Expansion: We aim to accelerate U.S. and European market entry 
      through partnerships and M&A opportunities in acoustic IoT and precision 
      agriculture. 

About Datasea Inc.

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