Liquidity remains a critical concern as the firm maintains a cash position of only $608,500 against a current ratio of 0.60, highlighting potential difficulties in funding ongoing operations.
| Cash from Operations | 753.89K | -2.37M | -6.4M | -3.14M | -5.14M | -3.95M | -4.57M | 75.95K | -1.48M | -1.15M | -1.14M | -469.64K |
| Operating CF Margin % | - | -3.32% | -26.69% | -86.14% | -30.09% | -2254.42% | -323.26% | - | -14045.31% | -816.94% | - | - |
| Operating CF Growth % | 406.1% | 62.89% | -104.04% | 38.98% | -30.17% | 13.67% | -6121.37% | 105.12% | -29.1% | -1.15% | -142.1% | - |
| Net Income | -2.73M | -5.09M | -12.21M | -9.7M | -7.11M | -4.88M | -1.86M | -1.43M | -1.6M | -1.19M | -1.12M | -486.58K |
| Depreciation & Amortization | 1.86M | 1.14M | 494.48K | 701.43K | 577.82K | 199.23K | 110.32K | 36.31K | 32.69K | 50.1K | 29.82K | 4.72K |
| Stock-Based Compensation | 2.55M | 1.89M | 6.75M | 4.38M | 642K | 21K | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 0 | 0 | 0 | -47.98K | 0 | 298.17K | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Non-Cash Items | -5.32M | 377.39K | 216.33K | 620.7K | 1.15M | -8.38K | -466 | 72.33K | 9K | 157.24K | 297.01K | 0 |
| Working Capital Changes | -1.24M | -698.05K | -1.65M | 908.9K | -397.42K | 425.94K | -2.82M | 1.46M | 77.72K | -6.92K | -41.96K | 12.21K |
| Change in Receivables | -952.06K | -557.66K | -717.22K | -15.39K | -267.77K | -613 | -1.13K | 0 | 225 | -221 | -237.36K | 0 |
| Change in Inventory | 74.25K | -153.18K | 91.08K | -46.92K | -25.32K | 33.17K | -78.64K | 279 | 27.2K | -90.12K | -237.36K | 0 |
| Change in Payables | 19.84K | -651.89K | 597.74K | 839.74K | 26.24K | 122.64K | 34.57K | 0 | -994.13K | -180.02K | 204.75K | 0 |
| Cash from Investing | -2.96M | -4.09M | -167.96K | -113.13K | -1.13M | -168.69K | -306.81K | -566.38K | -27.45K | -10.68K | -87.29K | -127.39K |
| Capital Expenditures | -886 | -8.13K | -6.87K | -84.32K | -1.1M | -168.69K | -295.47K | -566.38K | -27.45K | -10.68K | -58.96K | -127.39K |
| CapEx % of Revenue | 0% | 0.01% | 0.03% | 2.32% | 6.45% | 96.32% | 20.88% | - | 259.71% | 7.58% | - | - |
| Acquisitions | 0 | 0 | -35 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 12.62K | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -2.96M | -4.08M | -161.05K | 0 | 0 | 0 | -11.35K | -47.47K | -1.54K | -10.68K | -40.95K | 0 |
| Cash from Financing | 2.62M | 6.95M | 6.84M | 3.11M | 6.38M | 2.45M | -84.84K | 5.61M | 1.24M | 2.32M | 1.23M | 611.16K |
| Debt Issued (Net) | 1.68M | 1.21M | -1.58M | 2M | -1.4M | 1.45M | -84.84K | 60.87K | -123.85K | 0 | 0 | 0 |
| Equity Issued (Net) | -41.87K | 5.94M | 8.06M | 0 | 7.68M | 931K | 0 | 0 | 1.43M | 1.69M | 0 | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 195.88K |
| Other Financing | 978.36K | -203.22K | 360.8K | 1.11M | 99.84K | 68.54K | 0 | 5.55M | -72.41K | 628.66K | 1.23M | 611.16K |
| Net Change in Cash | 403.68K | 439.55K | 161.53K | -144.49K | 114.54K | -1.62M | -5.01M | 5.04M | -143.46K | 1.16M | 5.9K | 5.91K |
| Free Cash Flow | 4.62M | -6.46M | -6.57M | -3.22M | -6.24M | -4.12M | -4.88M | -490.43K | -1.51M | -1.16M | -1.2M | -597.02K |
| FCF Margin % | 8.13% | -9.02% | -27.39% | -88.46% | -36.54% | -2350.74% | -344.94% | - | -14305.02% | -824.52% | - | - |
| FCF Growth % | 172.39% | 1.63% | -103.91% | 48.41% | -51.62% | 15.64% | -895.07% | 67.57% | -30.28% | 2.95% | -100.32% | - |
| FCF per Share | 0.51 | -0.98 | -2.53 | -1.94 | -3.91 | -2.90 | -3.50 | -0.37 | -1.19 | -0.94 | -1.23 | -1.34 |
| FCF Conversion (FCF/Net Income) | -1.69x | 0.47x | 0.56x | 0.33x | 0.79x | 0.85x | 2.45x | -0.05x | 0.93x | 0.96x | 1.01x | 0.97x |
| Interest Paid | 12.04K | 38.21K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 5.16K | 0 | 0 | 0 | 0 | 0 |
Liquidity and solvency constraints
According to recent financial disclosures, the relationship between net income and operating cash flow remains highly erratic, with OCF/NI ratios fluctuating wildly, such as the 305.79x observed in 2024Q1, suggesting that reported earnings provide little insight into the company's actual ability to generate cash from operations.
The persistent divergence between accounting losses and operating cash flow indicates that accruals and non-cash adjustments are heavily distorting the company's financial narrative. Investors should monitor this volatility, as it suggests that the business model relies on timing-sensitive project accounting rather than consistent, cash-generative operational performance.
As reported in quarterly filings, Datasea's free cash flow trajectory is characterized by extreme instability, swinging from a $6.7 million outflow in 2024Q1 to a $3.7 million inflow in 2025Q3, which underscores the precarious nature of its project-based revenue model and limited cash-generating capacity.
The inability to maintain positive free cash flow across consecutive periods suggests that the company's growth initiatives are not yet self-funding. This trajectory warrants further investigation into whether the recent cash inflows are sustainable or merely the result of temporary working capital fluctuations rather than core operational improvements.
Based on the company's reported figures, working capital changes have been a significant source of cash flow volatility, including a $6.0 million outflow in 2024Q1, indicating that the firm struggles to align its collection cycles with the high costs of project delivery and hardware procurement.
The erratic nature of these working capital swings suggests that Datasea faces significant friction in its cash conversion cycle, likely due to delayed payments from municipal clients. This dependency on timing creates a structural liquidity risk that could force the company to seek external financing to bridge operational gaps.
As evidenced by the provided cash flow statements, stock-based compensation, such as the $3.9 million charge in 2024Q4, frequently masks the underlying cash burn, suggesting that the company's reported operational metrics may overstate its true economic health and ability to sustain its current business model.
The reliance on non-cash compensation to manage expenses appears to be a strategy to preserve limited cash reserves, yet it dilutes existing shareholders without addressing the core issue of negative operating margins. Analysts should interpret these adjustments as a signal that the company is prioritizing survival over long-term value creation.
Quick answers to the most common questions about buying DTSS stock.
Datasea Inc. (DTSS) generated $-2.4M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Datasea Inc. (DTSS) reported negative free cash flow of $6.5M in 2025, indicating capital requirements exceeded cash from operations.
Datasea Inc. (DTSS) spent $0.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.