Datasea(US:DTSS)2025-09-26 17:01Financial Performance - For the fiscal year ended June 30, 2025, the Company reported revenue of $71,616,820, an increase of $47,640,953, or 198.70% compared to the previous fiscal year[374]. - The primary revenue source was from 5G AI multimodal digital business, generating $70,682,408, which contributed to the overall revenue growth[446]. - The Company recorded a gross profit of $2,443,948, an increase of $1,969,843, or 415.49%, compared to the same period of the prior year[375]. - The company achieved a gross profit margin of 3.41%, up from 1.98% in the previous year, driven by a strategic increase in high-margin product sales[499]. - The company incurred a net loss of $5,085,694 for the year ended June 30, 2025, an improvement from a net loss of $11,377,064 in the prior year[444]. - Operating expenses decreased by $5,000,829, a reduction of 39.69% from $12,599,492 in the prior year[490]. - The company had a negative cash flow from operating activities of approximately $2.37 million for the year ended June 30, 2025[430]. - As of June 30, 2025, the company had an accumulated deficit of approximately $44.53 million[430]. - Net loss from continuing operations decreased by $7,124,916 or 58.4% to $5,085,694 for the year ended June 30, 2025, due to increased gross profit and reduced operating expenses[465]. - Cash balance increased by $439,545, or 242.49%, from $181,262 in 2024 to $620,807 in 2025[492]. Revenue Growth - The AI Multimodal Digitalization Business segment generated revenue of $70.68 million, a 199.49% increase from $23.60 million last year, driven by rapid expansion of core clients[376]. - Revenue from technical solutions related to AI multimodal services reached RMB 8.9 million (approximately USD 1.24 million), indicating successful implementation of the company's digital business[426]. - Revenue from Qingdao Ruizhi Yixing reached RMB 392,182,085.13 (approximately USD 54,775,147) from July 1, 2024, to June 30, 2025, through the sale of 5G+AI multimodal data recharge cards[405]. - From July 1, 2024, to June 30, 2025, revenue from Shuhun Network reached RMB 10,981,054.18 (approximately USD 1,533,698) through the sale of 5G+AI multimodal data cards[406]. Customer Base and Market Expansion - The Company expanded its customer base significantly, adding 14 beauty service companies and deploying products into 463 beauty and personal care salons across Northern China[378]. - The number of AI multimodal clients increased from 8 to 15, with leading clients contributing revenue exceeding $10 million each, indicating strong customer retention[384]. - Datasea serves over 52 million businesses and households across China, with more than 99% being SMEs, providing digital and intelligent services[467]. - The company aims to leverage its dual operational bases in China and the United States to pursue international opportunities and expand its market presence[382]. - The company aims to scale international markets over the next three to five years, particularly in North America, Europe, and Asia-Pacific, supported by acquisitions and localized market strategies[513]. Research and Development - The company has established a three-tier R&D system to ensure effective resource allocation and project progress[392]. - Research and development expenses rose by $555,654 or 154.6% to $914,996 for the year ended June 30, 2025, reflecting a focus on expanding 5G-related applications[457]. - The company plans to increase R&D investment, particularly in integrating acoustic technologies with AI, to drive future growth[502]. - The company plans to focus on R&D in neuro-regulation, brain-computer interfaces, and ultrasonic precision machining, promoting commercialization of new technologies[513]. Strategic Initiatives - Datasea's strategic objective includes establishing differentiated advantages in acoustic and digitalization technologies through continuous innovation and high-efficiency solutions[383]. - The M&A strategy focuses on technology enhancement, market synergy, and ecosystem improvement to accelerate technological breakthroughs and market expansion[396]. - The company is targeting innovative companies with core acoustic modules and sensor technologies for acquisitions to enhance its technological capabilities[401]. - The company aims to expand into the European market, promoting acoustic medical and intelligent manufacturing products through local collaborations[409]. - Strategic priorities include market expansion, M&A opportunities, and optimizing the product mix to enhance margins and profitability[506][508]. Operational Efficiency - The company operates 463 offline beauty salon locations and utilizes online live-streaming e-commerce channels to enhance market penetration for its "Datasea Tian Ear" disinfection series[389]. - The company is establishing localized operational systems in key overseas markets to enhance market responsiveness and reduce operational costs[403]. - The company reported allowances for slow-moving and obsolete inventory of $152,907 and $53,650 as of June 30, 2025, and 2024, respectively[519]. - The company maintains a $0 bad debt allowance for credit losses as of June 30, 2025, and 2024[518]. Environmental and Social Governance - The company is committed to integrating ESG principles into its operations, with initiatives leading to a 10% reduction in energy consumption per production line[433]. - The company emphasizes innovation-driven, green development, and aims to promote environmentally friendly technologies and products[511]. Financial Position - The company had a working capital deficit of $704,978 as of June 30, 2025, with a current ratio of 0.81:1, improving from a deficit of $952,090 and a current ratio of 0.74:1 in 2024[470]. - Net cash provided by financing activities was $6,945,370 for the year ended June 30, 2025, primarily from the sale of common stock[477]. - Outstanding bank loans rose to $2,374,767, reflecting a 102.92% increase from $1,170,298 in 2024[498]. - The company adopted the current expected credit loss (CECL) methodology effective July 1, 2023, with no transition adjustment required[516]. - The company has no off-balance sheet arrangements that could affect its financial condition or results of operations[512].