DSC Holdings reported a dramatic divergence between GAAP and adjusted profitability during the second quarter of 2026 as expenses associated with the company’s Nasdaq listing drove a large reported loss even while underlying operating losses narrowed substantially.
Revenue increased 3.7% year-over-year to RMB167 million, or $24.6 million.
GAAP net loss widened to RMB240.5 million, or $35.4 million, from RMB25 million in the prior-year quarter.
Adjusted net loss, however, narrowed 61.5% to RMB7.4 million, or approximately $1.1 million, from RMB19.2 million.
The majority of the GAAP loss came from costs connected with DSC’s June IPO.
The company recognized RMB227.8 million, or $33.6 million, of share-based compensation upon completion of the offering and related IPO expenses.
Excluding share-based compensation, general and administrative expenses and sales and marketing expenses each declined 14%, while R&D expenses fell 29.2%.
DSC is positioning itself as AI application infrastructure for China’s used-car industry.
Its DaFengChe platform had 65,334 dealership monthly active users and 199,933 total user MAUs during the quarter.
DSC monetized 9,146 used-car dealerships at average revenue per user of RMB6,672 and recorded 214,451 monetized transaction services with average revenue of RMB259 per transaction.
The company is also deploying AI agents trained on its proprietary used-car data into dealer workflows.
Management said early applications are helping dealers make purchasing and selling decisions while simultaneously creating additional monetization opportunities for DSC.
The IPO also strengthened liquidity, with cash and equivalents reaching RMB451.3 million, or $66.5 million, at quarter-end.
KEY QUOTES:
“Notably, our adjusted net loss narrowed by 61.5% to RMB7.4 million, reflecting our unwavering focus on profitability.”
“AI has been a major factor in both reducing our operating expenses and opening up new monetization fronts.”
Qin Zou, Director and Chief Financial Officer of DSC
