Executive Summary
Datasea Inc (DTSS) delivered a striking revenue uptick in QQ3 2025, with reported revenue of $10.35 million, a YoY surge of 648.7% and QoQ decline of 49.4%. The robust top-line growth likely reflects the company’s ongoing scale in its smart security and big data security platforms, including 3D security, safe campus, and epidemic monitoring systems, alongside expanding 5G messaging and smart payment capabilities. However, the quarter also revealed a pronounced profitability gap: gross profit was only $0.298 million on a revenue base of $10.354 million, yielding a gross margin of 2.9%. Operating income and net income were negative at approximately -$1.77 million, and the EPS stood at -$0.249. These results suggest the company is investing aggressively to capture growth, but the current cost structure far outpaces the near-term revenue run rate.
From a cash-flow perspective, the company reported negative cash flow from operating activities of about -$0.198 million, while capital expenditures were sizable at approximately $3.91 million. Despite a negative operating cash flow, the reported free cash flow appears positive in the data, but this is inconsistent with the negative operating cash flow and high capex, indicating potential non-cash adjustments or data inconsistencies that warrant careful follow-up in the next filing. The liquidity profile shows near-term pressures: the current ratio is 0.515, cash balance is about $0.867 million, and total debt stands around $2.288 million, implying constrained working capital facilities if the revenue trajectory does not improve profitability.
Strategically, Datasea remains positioned in a high-plex fragmented Chinese smart-security market, targeting schools, tourist attractions, public communities, and scenic areas with an integrated suite spanning big data security, 3D platforms, epidemic systems, and related monetization channels (5G messaging and smart payments). The current quarter’s earnings indicate the company is executing on growth initiatives, yet investors should monitor whether improvements in top-line growth translate into sustained margin expansion and cash-generation. The near-term focus for investors should be on a path to profitability, stabilization of working capital, and clarity around forward guidance, if provided by management in future calls.
Key Performance Indicators
QoQ: -49.39% | YoY:648.66%
QoQ: -28.66% | YoY:335.69%
QoQ: -42.89% | YoY:56.92%
QoQ: -56.92% | YoY:56.95%
QoQ: -55.63% | YoY:83.94%
Key Insights
Revenue: $10.353977 million in QQ3 2025, YoY +648.66%, QoQ -49.39%
Gross Profit: $0.297790 million, Gross Margin 2.88%
Operating Income: -$1.769479 million, Operating Margin -17.09%
Net Income: -$1.783092 million, Net Margin -17.22%
EPS (diluted): -$0.2490
EBITDA: -$1.769479 million, EBITDA Margin -17.09%
Weighted Avg Shares (diluted): 7.170852 million
Cash Flow Snapshot: Operating cash flow -$0.198 million; Capital expenditures $3.910007 million; Free Cash Flow (reported): $3.712123 million; Ne...
Financial Highlights
Revenue: $10.353977 million in QQ3 2025, YoY +648.66%, QoQ -49.39%
Gross Profit: $0.297790 million, Gross Margin 2.88%
Operating Income: -$1.769479 million, Operating Margin -17.09%
Net Income: -$1.783092 million, Net Margin -17.22%
EPS (diluted): -$0.2490
EBITDA: -$1.769479 million, EBITDA Margin -17.09%
Weighted Avg Shares (diluted): 7.170852 million
Cash Flow Snapshot: Operating cash flow -$0.198 million; Capital expenditures $3.910007 million; Free Cash Flow (reported): $3.712123 million; Net change in cash: $0.598636 million; Cash at end of period: $0.866737 million
Balance Sheet Highlights: Total assets $6.154373 million; Total liabilities $3.321879 million; Total stockholders’ equity $2.84226 million; Cash and equivalents $0.866737 million; Long-term debt $0.189989 million; Short-term debt $2.09721 million; Net debt $1.420462 million; Current ratio 0.515; Quick ratio 0.412; Inventory $0.316135 million; Intangible assets $3.805383 million; Retained earnings negative at -$44.321587 million
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
10.35M |
648.66% |
-49.39% |
| Gross Profit |
297.79K |
335.69% |
-28.66% |
| Operating Income |
-1.77M |
56.92% |
-42.89% |
| Net Income |
-1.78M |
56.95% |
-56.92% |
| EPS |
-0.25 |
83.94% |
-55.63% |
Key Financial Ratios
operatingProfitMargin
-17.1%
operatingCashFlowPerShare
$-0.03
freeCashFlowPerShare
$0.52
Management Commentary
Transcript highlights are not provided in the dataset. No earnings call transcript or management quotes are available to extract key themes or quotes. Management commentary could potentially address growth investments in security platforms, China market dynamics, and cost-control measures in future releases.
Forward Guidance
No explicit forward guidance is included in the supplied data. Given the current trajectory, investors should await either formal guidance or qualitative commentary in subsequent quarters to assess targets for revenue growth, gross margin expansion, operating leverage, and cash-flow normalization. In the absence of stated targets, the key factors to monitor would include: (1) margin progression as revenue scales, (2) stabilization or improvement in liquidity metrics and working capital, (3) cadence of capital expenditures relative to cash from operations, and (4) any new product or regional initiatives that could meaningfully alter the revenue mix and cost structure.