Executive Summary
Datasea Inc (DTSS) reported a challenging QQ3 2024, with revenue of $1.383 million and a continued material net loss. Revenue fell 22.6% year over year and 87.8% quarter over quarter, signaling a fragile top line as the company cycles through costly operating activities. Gross profit was negative at $0.126 million, and EBITDA stood at $(3.97) million, driving an operating loss of $(4.11) million and a net loss of $(4.14) million for the quarter. The company also burned cash, with cash from operations at $(0.34) million and free cash flow at $(0.37) million, ending the period with only about $52.5k in cash and cash equivalents. Management commentary from the QQ3 2024 earnings call is not provided in the data set, limiting qualitative insight into strategic pivots or near-term guidance.
The trailing four-quarter revenue runs roughly in the mid-$20s million, suggesting a small-scale business with outsized overhead relative to current top-line scale. The balance sheet shows limited liquidity (cash ratio ~0.024) and a significant accumulation of negative retained earnings, raising financing risk if operating losses persist. On a relative basis, Datasea’s valuation metrics (negative earnings, P/S and P/B indicating re-rating challenges) contrast sharply with several peers, signaling a high-risk, high-uncertainty investment profile until a clear path to profitability and sustainable cash generation emerges. Investors should monitor revenue acceleration in core security offerings, cost containment, and the potential need for additional capital to fund ongoing losses.
Key Performance Indicators
QoQ: -87.81% | YoY:-22.64%
QoQ: -250.88% | YoY:-230.89%
QoQ: -129.67% | YoY:-214.36%
QoQ: -125.95% | YoY:-385.26%
QoQ: -115.28% | YoY:-192.45%
Key Insights
Revenue: $1.383 million in QQ3 2024, down YoY 22.64% and QoQ 87.81% from QQ2 2024; Gross profit: $(0.126) million with gross margin of (9.14)%; Operating income: $(4.107) million (margin ~(−2.97)%); Net income: $(4.141) million (net margin ~(−3.00)%); EBITDA: $(3.971) million; EPS: $(1.55). YoY and QoQ pressure in revenue and profitability driven by high fixed cost base and ongoing overhead.
Liquidity and cash flow: Net cash provided by operating activities $(0.321) million; capital expend...
Financial Highlights
Revenue: $1.383 million in QQ3 2024, down YoY 22.64% and QoQ 87.81% from QQ2 2024; Gross profit: $(0.126) million with gross margin of (9.14)%; Operating income: $(4.107) million (margin ~(−2.97)%); Net income: $(4.141) million (net margin ~(−3.00)%); EBITDA: $(3.971) million; EPS: $(1.55). YoY and QoQ pressure in revenue and profitability driven by high fixed cost base and ongoing overhead.
Liquidity and cash flow: Net cash provided by operating activities $(0.321) million; capital expenditures $(0.037) million; free cash flow $(0.374) million; net change in cash $(0.385) million; ending cash $(0.052) million; total current liabilities $(2.193) million; current ratio 1.193; cash ratio 0.024; quick ratio 1.110.
Balance sheet and leverage: Total assets $3.3746 million; total liabilities $2.1933 million; total stockholders’ equity $1.2522 million; cash and cash equivalents $0.0525 million; short-term debt $0.5786 million; deferred revenue $0.0541 million; retained earnings $(34.0601) million; intangible assets $0.5683 million; PPE net $0.1323 million; debt to capitalization ~0.316; debt to equity ~0.462; no long-term debt reported.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.38M |
-22.64% |
-87.81% |
| Gross Profit |
-126.35K |
-230.89% |
-250.88% |
| Operating Income |
-4.11M |
-214.36% |
-129.67% |
| Net Income |
-4.14M |
-385.26% |
-125.95% |
| EPS |
-1.55 |
-192.45% |
-115.28% |
Key Financial Ratios
operatingProfitMargin
-297%
operatingCashFlowPerShare
$-0.13
freeCashFlowPerShare
$-0.14
Management Commentary
Note: The earnings transcript is not provided in the dataset. As a result, there are no management quotes or transcript-derived highlights to categorize by themes (strategy, operations, market conditions). Pending availability of the QQ3 2024 call transcript, the analysis relies on reported results and disclosed financial metrics. Investors should seek management commentary on revenue growth initiatives, cost-containment plans, and capital-raising needs in the next disclosed materials.
Forward Guidance
No formal management guidance is present in the provided data. Absent explicit targets, the near-term outlook should be framed around: (1) whether revenue can stabilize and grow from the QQ3 level as core security offerings gain traction in China; (2) ability to constrain operating expenses to achieve a path toward positive operating income; (3) liquidity trajectory and the likelihood of additional funding or financing tied to the company’s cash burn rate. Key monitoring points include quarterly revenue progression, changes in R&D and SG&A spend, any updates on partnerships or product rollouts (e.g., 5G messaging and smart payment solutions), and the timing/size of any new equity or debt financing.