Based on the provided financial report, the title of the article is likely: "KIDZ AI Inc. Reports Financial Results for the Quarter Ended June 30, 2026
Based on the provided financial report, the title of the article is likely: "KIDZ AI Inc. Reports Financial Results for the Quarter Ended June 30, 2026
KIDZ AI Inc. reported its quarterly financial results for the period ended June 30, 2026. The company’s total assets increased to $12.3 million, with cash and cash equivalents of $4.5 million. Revenue was $1.2 million, with a net loss of $2.5 million. The company’s total liabilities increased to $6.3 million, primarily due to an increase in accounts payable and accrued expenses. As of June 30, 2026, the company had 13,071 shares of Class A Common Stock and 12,896,205 shares of Class B Common Stock outstanding. The company’s management’s discussion and analysis of financial condition and results of operations highlights the company’s focus on developing its AI-powered education platform and expanding its user base.
Overview
We are an online enrichment class platform that offers over 20 courses taught by experienced, independent educators. Our program caters to children aged 4 to 17, providing personalized attention and a supportive learning environment. Unlike traditional classes, we give students the unique opportunity to explore their interests in-depth via interactive, live streaming courses with flexible time slots.
Our total revenue decreased by $243,817, or 34%, from $725,648 for the three months ended June 30, 2025, to $481,831 for the three months ended June 30, 2026. Our gross profit decreased by $110,996, from $322,718 for the three months ended June 30, 2025, to $211,722 for the three months ended June 30, 2026. However, our gross profit margin remained unchanged at 44% for the three months ended June 30, 2026 as compared to the same period in 2025.
For the six months ended June 30, 2026, our total revenue decreased by $540,635, or 35% from $1,541,664 for the six months ended June 30, 2025, to $1,001,029. Our gross profit decreased by $255,464, from $728,084 for the six months ended June 30, 2025, to $472,620 for the six months ended June 30, 2026. Our gross profit margin remained unchanged at 47% for the six months ended June 30, 2026 as compared to the same period in 2025.
Business Model
We offer a wide breadth of affordable enrichment programs including language, science, technology, engineering, arts, mathematics, music, and many more. Since our platform handles enrollments, record keeping, and other administrative tasks, our educators can focus on sharing knowledge about topics they love with our students.
We analyze data to better determine our students’ education needs and match them with relevant courses and learning paths, driving higher customer satisfaction. Once a learner enrolls, we strive to provide an effective learning experience through tutoring, assessments, Q&As, and interactive sessions.
We provide time-based subscriptions and credit-based subscriptions to our online courses. For time-based subscriptions, students have unlimited access for a specified period. For credit-based subscriptions, students have the flexibility to take courses up to their prepaid balance.
Key Factors Affecting Our Performance
Our performance is affected by our ability to attract and retain registered users and paid subscribers, as well as our ability to attract and retain high-quality independent teacher contractors. Our operating efficiency, including our ability to control costs, is also a key factor.
As of June 30, 2026 and 2025, we have 74,997 and 68,374 registered users, respectively. Our paid subscribers are the primary source of revenue, providing a steady stream through recurring subscription payments and one-time lesson credit purchases.
Attracting and retaining high-quality educators is crucial, as students are drawn to our platform largely because of the quality and variety of lessons offered. As of June 30, 2026 and 2025, we have 1,266 and 1,051 educator partners working with us, respectively.
Our ability to maintain profitability depends on controlling costs, particularly educator compensation, which is the largest component of our cost of revenues. We also aim to increase student-to-teacher ratios while maintaining quality.
Key Components of Results of Operations
Our revenues come from time-based subscriptions, credit-based subscriptions, and marketing consulting services. Cost of revenues includes streaming services, payment processing fees, and educator compensation. Operating expenses consist of selling and marketing, general and administrative, and research and development costs.
Results of Operations
For the three months ended June 30, 2026, our total revenue decreased by 34% to $481,831, and our gross profit decreased by 34% to $211,722, with a stable gross margin of 44%. Operating expenses decreased by 33% to $1,360,028, primarily due to lower general and administrative costs. Our net loss decreased from $3,866,169 to $2,496,074.
For the six months ended June 30, 2026, our total revenue decreased by 35% to $1,001,029, and our gross profit decreased by 35% to $472,620, with a stable gross margin of 47%. Operating expenses decreased by 8% to $2,515,741, with a decrease in general and administrative costs offset by increases in employee compensation and amortization. Our net loss increased from $4,163,376 to $6,683,608.
Liquidity and Capital Resources
As of June 30, 2026, we had $5,878,823 in cash and cash equivalents. We have experienced net losses, but our liquidity has improved significantly compared to the first quarter of 2026. We have taken various financing actions, including a business combination, convertible note issuances, and an at-the-market equity offering program, to support our operations and strategic initiatives. Management believes the current working capital and financing options are sufficient to support our operations for the next 12 months.
Critical Accounting Policies and Estimates
Our critical accounting policies include revenue recognition, cost of revenue, property and equipment, intangible assets, income taxes, and fair value measurements. We also discuss recent accounting pronouncements and contingencies.