10-Q · May 15, 2026
Classover Holdings, Inc. reported a substantial decrease in revenue and a significant net loss for Q1 2026, continuing its trend of financial challenges from the previous year. Revenue fell by 36% compared to Q1 2025,…
Earnings analysis · 10-Q
KIDZ earnings analysis
Filed August 13, 2026 · Our reading of the company's report
The latest report
KIDZ delivered a weak operating quarter, with Q2 revenue down 34% to $481,831 and six-month revenue down 35% to $1,001,029, although gross margin held at 44% and the quarterly net loss improved to $2,496,074. Liquidity…
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KIDZ delivered a weak operating quarter, with Q2 revenue down 34% to $481,831 and six-month revenue down 35% to $1,001,029, although gross margin held at 44% and the quarterly net loss improved to $2,496,074. Liquidity strengthened through financing, crypto sales and debt conversions, with cash and restricted cash of $8,882,360 and total liabilities reduced to $4,053,203, but operating cash flow and free cash flow remained negative. Management continues to cite substantial doubt about going-concern status, while the business is pivoting toward AI initiatives, including a subsequent $44.6 million GPU compute services contract.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Reported figures
- Earnings per share
- $-2.0
- Segment
- One reportable segment: online enrichment platform; Q2 2026 revenue $481,831, down 34% from $725,648. Time-based subscriptions generated $120,022, down 45% from $217,604; credit-based subscriptions generated $361,809, down 29% from $508,044.
What stood out
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Gross margin held despite 34% revenue decline
Q2 2026 revenue declined 34% year over year to $481,831 from $725,648, while gross profit fell 34% to $211,722 from $322,718. Gross margin was stable at 44% in both periods.
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Operating expenses were reduced
Operating expenses decreased 33% to $1,360,028 from $2,021,751, led by a $621,228 reduction in general and administrative expenses and a $55,559 reduction in selling and marketing costs.
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Quarterly loss and EPS improved
Q2 net loss improved 35% to $2,496,074 from $3,866,169, and EPS improved to $(2.00) from $(4.00). The improvement was aided by a $1,607,699 favorable year-over-year change in warrant fair value and elimination of $473,500 of financing cost.
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Liquidity improved materially
Cash, cash equivalents and restricted cash increased to $8,882,360 at June 30, 2026 from $2,751,594 at December 31, 2025. Current liabilities were $2,294,787, producing reported working capital of $6,624,850.
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Debt burden fell through conversions
Convertible note fair value declined to $667,413 from $8,201,746 at December 31, 2025, following $8,932,500 of note conversions during the first half of 2026. Total liabilities declined to $4,053,203 from $11,767,443.
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AI compute initiative gained a contract
Subsequent to quarter-end, Catalyst Compute entered a GPU Compute Services Agreement on July 17, 2026 with an aggregate contract value of approximately $44.6 million, expanding the company’s stated AI compute strategy.
What to watch
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Continuing losses create going-concern risk
Management stated that continuing losses raise substantial doubt about going-concern status. The company reported a six-month net loss of $6,683,608 versus $4,163,376 in the prior year and operating cash use of $1,451,648.
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Weak engagement is pressuring revenue
Core education demand weakened: six-month revenue fell 35% to $1,001,029 from $1,541,664, which management attributed to reduced customer traffic and lower user engagement. Registered users increased to 74,997 from 68,374, but revenue still declined.
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Financing needs may dilute shareholders
The company remains dependent on external financing and potential dilution. The ATM facility was increased to $12,455,000, the ChEF facility permits up to $100 million of new shares, and July-August ATM sales totaled $7,066,522 gross proceeds from 8,182,307 shares.
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Crypto exposure increased earnings volatility
Crypto volatility materially affected earnings: the company recorded a $3,389,376 unfavorable change in crypto-asset fair value during the first half of 2026, leaving investment accounts at only $21,773 versus $7,304,760 at December 31, 2025.
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Negative free cash flow persists
Cash generation remained negative despite reported liquidity: six-month operating cash flow was $(1,451,648), and capital expenditures were $32,583, implying free cash flow of approximately $(1,484,231).
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Large uninsured cash balance
The company disclosed concentration of uninsured cash risk: $4,836,511 held with three financial institutions was uninsured as of June 30, 2026, against total cash and cash equivalents of $5,878,823.
Management's outlook
No explicit numeric revenue or EPS guidance was provided. Management stated that AI-related projects and the broader AI-driven strategic transformation may support long-term growth; subsequent to quarter-end, the company disclosed a GPU Compute Services Agreement with an aggregate contract value of approximately $44.6 million.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.