Datavault AI Reports 147% Revenue Growth but Faces $9.6 Million Net Loss

Datavault AI Inc. reported significant financial developments in its latest 10-Q filing for the quarter ending March 31, 2025. The company generated revenue of $629,000, marking a 147% increase from $255,000 in the same period last year. This growth was primarily driven by increased sales in both Consumer Audio Products and Components, which rose by $333,000 and $41,000, respectively. Despite this revenue growth, Datavault AI recorded a net loss of $9.6 million, compared to a net income of $2.7 million in the prior year, largely due to increased operating expenses.

Total operating expenses surged to $9.5 million for the quarter, up from $4.1 million a year earlier. This increase was attributed to higher research and development costs, which rose by $646,000, and a substantial jump in general and administrative expenses, which increased by $4.2 million. The latter was influenced by amortization of intangible assets acquired from EOS Technology Holdings, as well as increased salaries, benefits, and consulting fees. The gross profit for the quarter was $69,000, a notable improvement from a gross deficit of $83,000 in the previous year, reflecting a gross margin of 11%.

In terms of operational metrics, Datavault AI's cash and cash equivalents decreased significantly to $171,000 from $3.3 million at the end of 2024. The company reported net cash used in operating activities of $6 million, compared to $3.5 million in the same quarter last year. The decline in cash reserves raises concerns about liquidity, especially as the company anticipates continued operating losses due to ongoing investments in research and development and market expansion efforts.

Strategically, Datavault AI has been active in expanding its product offerings and market presence. The company completed an asset purchase from EOS Technology Holdings, acquiring technology assets and patents valued at approximately $92 million. This acquisition is expected to enhance Datavault's capabilities in data management and monetization, aligning with its focus on Web 3.0 solutions. Additionally, the company has initiated a securities purchase agreement to raise further capital, which includes the issuance of convertible notes and warrants.

Looking ahead, Datavault AI's management has expressed the need for additional funding to support its operations and growth initiatives. The company is exploring various financing options, including equity sales and debt instruments, to ensure it can continue its operations and meet its financial obligations. However, the ongoing losses and cash flow challenges present substantial risks to its ability to sustain operations in the long term.