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. (NASDAQ: 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 ¥1.33 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.

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 

            sunhezhi@shuhaixinxi.com 

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

IMPORTANT NOTICE TO USERS

The information provided is a summary only, please refer to the Form 10-Q for the full text of this notice. All information is unaudited unless otherwise noted or accompanied by an audit opinion and is subject to the more comprehensive information contained in our SEC reports and filings. We do not endorse third-party information All information speaks as of the last fiscal quarter or year for which we have filed a Form 10-K or 10-Q, or for historical information the date or period expressly indicated in or with such information. We undertake no duty to update the information. Forward-looking statements are subject to risks and uncertainties described in our Forms 10-Q and 10-K.

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