Datasea Inc. reported significant financial developments in its latest 10-Q filing for the quarter ending September 30, 2024. The company achieved revenues of $21.08 million, marking a remarkable 206.4% increase from $6.88 million in the same period of 2023. This growth is primarily attributed to the rapid expansion of its 5G AI multimodal digital business, which generated $21.08 million in revenue, compared to $6.88 million from its 5G messaging business in the prior year.
Despite the revenue surge, Datasea reported a net loss of approximately $1.96 million for the quarter, a significant increase from a net loss of $22,056 in Q3 2023. The loss from operations also widened to $(2.03 million) from $(857,776) year-over-year. The gross profit for the quarter was $196,981, reflecting a gross margin of 0.9%, down from 1.1% in the previous year, indicating challenges in maintaining profitability amidst aggressive market expansion.
Total current assets rose dramatically to $7.18 million from $2.65 million as of June 30, 2024, driven by increased cash reserves, which grew to $937,606 from $181,262. The company’s total assets also increased to $7.96 million, up from $3.29 million. The additional paid-in capital rose to $45.27 million, up from $38.96 million, reflecting successful equity financing efforts.
Datasea's operational expenses for the quarter totaled $2.23 million, compared to $932,511 in the same period last year, largely due to increased marketing and sales efforts. Selling expenses surged to $996,049, a 1,079.5% increase from $84,447 in Q3 2023, driven by heightened advertising costs.
The company has been actively pursuing strategic financing, including a recent subscription agreement on September 27, 2024, to sell 1,932,224 shares at $2.06 per share, raising approximately $4 million. This funding is intended to support ongoing business operations, including product design and market expansion.
Datasea's accumulated deficit as of September 30, 2024, stood at approximately $41.40 million, up from $39.44 million at the end of the previous quarter. The company continues to face challenges related to its cash flow, although net cash used in operating activities improved significantly to $(732,655) from $(6.74 million) in Q3 2023.
Overall, Datasea Inc. is navigating a period of rapid growth in its 5G AI multimodal digital business while managing increasing operational losses and seeking additional funding to support its strategic initiatives.
About DATASEA INC.
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