Aug 13, 2026, 4:31 PM ETConsumer Defensive

KIDZ AI Inc. — Second Quarter 2026 Earnings Summary

KIDZKIDZ AI INC

Financial Performance

Service revenue for the quarter ended June 30, 2026, was approximately $0.48 million, a 34% decrease from $0.73 million in the prior year period.
Net loss narrowed 35% year-over-year to approximately $2.50 million, compared to $3.87 million in the prior year period.
Gross margin remained consistent at 44% compared to the prior year quarter.
Cash and restricted cash totaled approximately $8.88 million at June 30, 2026, more than tripling the $2.75 million held at December 31, 2025.
Total stockholders' equity increased 163% since year-end to approximately $9.95 million, up from $3.78 million at December 31, 2025.
Convertible notes payable decreased 92% since year-end, falling from approximately $8.20 million at December 31, 2025, to approximately $0.67 million at June 30, 2026.
Total liabilities decreased 65.6% from approximately $11.77 million at December 31, 2025, to approximately $4.05 million at June 30, 2026.
The total liabilities-to-equity ratio improved from 3.12x at December 31, 2025, to 0.41x at June 30, 2026.

The Company expects to continue advancing its AI infrastructure strategy through the deployment of initial GPU clusters.
KIDZ AI intends to pursue additional GPU compute partnerships, data center relationships, and strategic transactions to expand compute capacity and strengthen its neocloud model.
In the education vertical, the Company plans to focus on the commercial rollout of KIDZBot and the integration of Physical AI concepts into curriculum offerings.
Management anticipates that AI compute revenue will provide a more scalable and durable foundation for growth as the company transitions away from a purely tutoring-based model.

The Company formally changed its name from Classover Holdings, Inc. to KIDZ AI Inc. on May 26, 2026, signaling a shift toward AI compute infrastructure, GPU cloud services, and embodied AI robotics.
KIDZ AI unveiled KIDZBot, an integrated AI-native robotics platform featuring persistent memory, reasoning, prompt-based interactions, sensor-driven feedback, and adaptive learning.
The Company is developing multiple KIDZBot robotic form factors alongside an AI-powered software platform and companion app, with commercial rollout preparations underway.
Initial GPU cluster deployment is underway as the Company advances toward its first AI compute revenue.
Service revenue decline reflects a deliberate reallocation of capital and management focus away from tutoring customer acquisition toward AI infrastructure build-out.

Management views the global education and enterprise computing sectors as converging on foundational technologies including large-scale AI models, intelligent agents, and physical robotics.
KIDZ AI positions itself on both the demand side (AI-native learning platforms and robotics curricula) and the supply side (secured GPU compute capacity and data center infrastructure).
The Company was named the winner of the 2026 EdTechX Award for the Americas, recognizing innovation and leadership in AI-powered education.

Risks include the ability to execute the business model and obtain market acceptance for products and services.
Uncertainties exist regarding the final technical configuration, capacity, costs, and timing of GPU compute deployments.
The Company faces risks related to obtaining necessary GPUs and equipment to fulfill obligations under a definitive agreement with Canopy Wave.
Potential risks include the ability to maintain Nasdaq listing, attract and retain key personnel, and maintain intellectual property protection.
Actual results may differ materially from forward-looking statements due to economic, business, and competitive factors.

CEO Stephanie Luo described the second quarter as a "defining inflection point," highlighting the transformation of the balance sheet and strategic pivot to AI compute infrastructure.
Management expressed confidence that the AI compute revenue pipeline represents a scalable foundation for growth despite near-term service revenue declines.
The tone emphasized a commitment to education roots while leveraging a strengthened balance sheet and differentiated Physical AI education platform for long-term value creation.

The capital structure simplification involved converting a significant portion of convertible debt to equity, removing a financing overhang.
The strategic repositioning represents a transition from a purely tutoring-based revenue model to AI compute revenue, robotics curricula, and infrastructure partnerships.
The Company is an AI-driven education technology firm developing proprietary learning systems combining AI, AI agents, and robotics, while pursuing opportunities in AI compute infrastructure and GPU cloud platforms.