UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Commission File Number: 001-35384 DATA STORAGE CORPORATION (Exact name of registrant as specified in its charter) | Nevada | 98-0530147 | | --- | --- | | (State or other jurisdiction of | (I.R.S. Employer | | incorporation or organization) | Identification No.) | | 225 Broadhollow Road, Suite 307 | | | Melville, NY | 11747 | | (Address of principal executive offices) | (Zip Code) | FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SEC ...

Data Storage (DTST) Q1 2025 Earnings Call May 15, 2025 11:00 AM ET Speaker0 and welcome to the Data Storage Corporation First Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Alexandra Schultz, Investor Relations for Data Storage Corporation. Thank you. You may begin. Speaker1 Thank you. Go ...

Financial Performance - Total revenue for Q1 2025 was $8.1 million, reflecting a 14% year-over-year growth in Cloud Infrastructure and Disaster Recovery services[4] - Adjusted EBITDA for the quarter reached $497,000, demonstrating the company's commitment to operational efficiency and margin discipline[4] - Gross profit totaled $2.86 million, maintaining consistent margin levels compared to previous periods[4] - Net income attributable to common stockholders for Q1 2025 was $24,078, compared to $357,102 in Q1 2024[18] - Net income for the three months ended March 31, 2025, was $26,388, a decrease of 92.4% compared to $345,904 in the same period of 2024[20] - Adjusted EBITDA for the total company was $497,135 for the three months ended March 31, 2025, compared to $680,318 for the same period in 2024, reflecting a decline of 26.9%[22][24] Cash Flow and Assets - Cash and marketable securities amounted to $11.1 million, with no long-term debt reported[4] - Cash used in operating activities was $(1,099,807) for Q1 2025, significantly higher than $(318,624) in Q1 2024, indicating increased cash outflow[20] - Total cash at the end of the period was $705,557, up from $640,742 at the end of Q1 2024, showing a year-over-year increase of 10.5%[20] - The company reported a total asset value of $26.93 million as of March 31, 2025, an increase from $25.28 million at the end of 2024[16] - The company experienced a net decrease in cash of $(364,540) in Q1 2025, compared to a net decrease of $(787,988) in Q1 2024, showing improved cash management[20] Expenditures and Liabilities - Capital expenditures for Q1 2025 were $(67,519), a decrease of 81.2% compared to $(358,637) in Q1 2024, indicating reduced investment in capital assets[20] - The company reported a significant increase in accounts payable and accrued expenses, totaling $1,373,552 in Q1 2025, compared to $2,226,932 in Q1 2024, reflecting a decrease of 38.3%[20] - Cash paid for interest in Q1 2025 was $489, a substantial decrease from $8,855 in Q1 2024, indicating lower interest expenses[20] Operational Highlights - The company experienced a modest decline in total revenue due to reduced equipment sales, aligning with its strategic focus on building a stable high-margin, recurring revenue client base[3] - CloudFirst Technologies continues to operate profitably on a standalone basis, serving as a scalable, recurring revenue engine[3] - The partnership with Pulsant enables the company to extend its IBM Power-based cloud offerings across the U.K. and Europe, enhancing its market presence[3] Depreciation and Credit Quality - The company recorded depreciation and amortization of $363,379 in Q1 2025, an increase of 22.9% from $295,198 in Q1 2024, reflecting higher asset depreciation[20] - The company reported a change in expected credit losses of $(6,995) in Q1 2025, indicating a potential improvement in credit quality compared to no losses reported in Q1 2024[20]

First Quarter 2025 Highlights "We are pleased to report our first quarter results, which reflect both solid financial performance and strategic progress," said Chuck Piluso, CEO of Data Storage Corporation. "Specifically, CloudFirst Technologies continues to operate profitably on a standalone basis and serves as a scalable, recurring revenue engine. To support our international strategy, we recently partnered with Pulsant, a leading U.K. edge data center provider, enabling us to extend our IBM Power-based c ...

MELVILLE, N.Y., May 01, 2025 (GLOBE NEWSWIRE) -- Data Storage Corporation (Nasdaq: DTST) (“DSC” and the “Company”), a leading provider of multi-cloud hosting, managed cloud services, disaster recovery, cybersecurity, and IT automation, integrating seamlessly with AWS, Microsoft Azure, and Google Cloud, today announced plans to host a conference call at 11:00 a.m. Eastern Time on Thursday, May 15, 2025, to discuss the Company's progress and the financial results for the first quarter of 2025, which ended Mar ...

Financial Performance - Total revenue for the fiscal year 2024 was $25.4 million, a 2% increase from $25 million in 2023, reflecting a transition towards subscription-based recurring revenue [10][28] - Net income improved significantly to $513,000, up nearly 71% from $299,000 in 2023, indicating margin expansion and a more efficient cost structure [12][32] - Adjusted EBITDA reached $2.37 million, compared to $1.64 million last year, showcasing the ability to scale while maintaining profitability [12][31] - Cash and marketable securities at year-end were approximately $12.3 million, compared to $12.75 million at the end of 2023, with no debt [13][32] Business Segment Performance - The Cloud Infrastructure and Disaster Recovery Service segment saw revenue climb 27% year-over-year to $12.3 million, making up 51% of total revenue [11] - A decline in one-time hardware and a slight decrease in managed service revenue were noted, aligning with the strategy to prioritize sustainable recurring revenue streams [14] Market and Strategic Developments - The company expanded internationally into the U.K. with the launch of CloudFirst Europe Limited, establishing a regional presence and deploying three Tier 3 data centers [17][18] - Partnerships with Brightsolid and Pulsant facilitated this expansion, allowing compliance with strict regulatory requirements [18] - The merger of Flagship and CloudFirst in January 2024 enhanced internal efficiency and created a stronger go-to-market engine [20] Management Commentary - Management expressed confidence in the company's strategic direction, emphasizing the importance of cybersecurity and compliance in attracting clients from regulated markets [52][54] - The company aims to leverage its strong financial foundation and high-retention recurring revenue model to capitalize on growing demand in regulated and global enterprise markets [26] Other Important Information - Selling, general, and administrative expenses increased by 13% to $11 million, primarily due to professional fees and international expansion efforts [27][30] - The company reported a compounded annual growth rate of 18% for organic growth in its cloud services, with a higher rate of 30% when including the merger with Flagship [15][58] Q&A Summary Question: What are the spending plans for 2025? - Management indicated that they expect some CapEx spending but do not anticipate significant increases, with $575,000 invested in the U.K. and $1.2 million in the U.S. for 2024 [36][41] Question: How comprehensive is the coverage of cloud migration opportunities in the U.K. and Europe? - Management acknowledged that while they are making progress, there is always room for improvement in capturing migration opportunities [45][46] Question: What is driving success in regulated markets? - Management highlighted the importance of cybersecurity and compliance, noting that their reputation in data migration is a key factor in attracting large accounts [54][52] Question: What is the organic growth rate excluding hardware sales? - Management reported an organic growth rate of 17.8% for subscription-based services, with a higher rate of 30% when including the Flagship merger [58][59] Question: Is the company comfortable being free cash flow neutral or positive in 2025? - Management expressed confidence in achieving free cash flow neutrality or positivity in 2025 without relying on equipment sales, supported by a strong recurring revenue model [73][72]

Revenue and Financial Performance - In 2024, the Company reported total revenue of $25.4 million, with over 80% derived from recurring sources such as cloud-based hosting and disaster recovery solutions[36]. - Revenue for the year ended December 31, 2024, increased by approximately 2% to $25,371,303 compared to $24,959,576 for the year ended December 31, 2023[166]. - The Company derived approximately 51% of revenue from infrastructure & disaster recovery/cloud services, 31% from equipment and software sales, 12% from managed services, and 5% from Nexxis VoIP services for the year ended December 31, 2024[166]. - The Company reported net income attributable to common shareholders of $523,214 for the year ended December 31, 2024, compared to $381,575 for 2023, indicating a year-over-year increase of approximately 37%[52]. - Adjusted EBITDA for the year ended December 31, 2024, was $2,365,238, compared to $1,639,388 for 2023, reflecting an increase in operational performance[191]. - Cash provided by operating activities for the year ended December 31, 2024, was $1,740,089, a decrease from $3,873,047 in 2023, primarily due to an increase in accounts receivable of $1,010,880[185]. - The company's working capital increased to $11,869,914 on December 31, 2024, up by $858,507 from $11,011,407 at the end of 2023[182]. Customer Base and Retention - The Company has a contract renewal rate exceeding 90%, positioning it to maintain and expand its customer base[36]. - The Company ended the year with a $21.5 million Annual Recurring Revenue (ARR) run rate[36]. - The Company has historically maintained over 90% annual subscription renewal rates, reflecting strong customer retention[164]. - For the year ended December 31, 2024, two customers each accounted for 12% of the Company's revenue, while in 2023, two customers accounted for 12% and 10% respectively, highlighting dependency on a limited customer base[69]. - The Company’s client base exceeds 425 organizations across diverse sectors, indicating broad market demand for its services[164]. Operational and Strategic Developments - The integration of Flagship Solutions into CloudFirst was completed in January 2024, enhancing operational synergies and cross-selling opportunities[23]. - The Company is focused on expanding its cloud footprint and cross-selling its full suite of solutions to meet evolving client needs[34]. - The Company plans to continue acquiring complementary solutions and services, which may divert management's attention and increase operating costs[58]. - The Company anticipates ongoing international expansion, which will require substantial investment in marketing and localized services[106]. Risks and Challenges - The competitive landscape for cloud solutions is intense, with significant competition from established players like IBM, Microsoft, Google, and AWS, which may impact the Company's market position[70]. - The Company is exposed to risks related to cybersecurity, as breaches could disrupt its data protection services and harm its reputation[76]. - The Company faces challenges in retaining existing customers, and a significant decrease in retention rates could necessitate higher marketing expenses to maintain revenue[89]. - The Company must maintain effective advertising and marketing strategies to attract new customers, as failure to do so could lead to increased expenses and reduced operating results[55]. - The Company is subject to evolving privacy regulations, and any failure to comply could result in legal actions and loss of customer trust[97]. - The Company faces risks associated with international operations, including economic and political instability, currency fluctuations, and differing legal environments[107]. - The Company is exposed to risks from fluctuations in foreign currency exchange rates, which could adversely affect reported earnings[109]. Financial Position and Capital Management - As of December 31, 2024, the Company had cash of $1,070,097 and marketable securities totaling $11,261,006, with working capital amounting to $11,869,914[52]. - The Company does not expect to declare any cash dividends in the foreseeable future, meaning shareholders may need to rely on share price appreciation for returns[138]. - The Company may face challenges in raising additional capital due to market conditions and the potential dilution from outstanding securities[136]. - The Company has received a Notification Letter from Nasdaq confirming compliance with audit committee requirements, thus maintaining its listing on The Nasdaq Capital Market[134]. Compliance and Regulatory Matters - The Company must comply with HIPAA and HITECH regulations, which include privacy standards that protect individual health information[99]. - The Company may face penalties for non-compliance with federal and state standards regarding patient privacy, which could adversely affect its business[100]. - The Company maintains a cyber risk management program that includes annual risk assessments to identify and mitigate cybersecurity threats[142]. Market and Economic Conditions - The Company's revenue is heavily concentrated in the U.S., making it vulnerable to fluctuations in demand within this market[91]. - The Company's operations could be negatively impacted by changes in trade policies and economic conditions, affecting its financial results[119].

Data Storage Corporation (NASDAQ:DTST) Q4 2024 Earnings Conference Call March 31, 2025 11:00 AM ET Company Participants Alexandra Schilt - Crescendo Communications Charles Piluso - Chairman and CEO Chris Panagiotakos - Chief Financial Officer Conference Call Participants Matthew Galinko - Maxim Adam Waldo - Lismore Partners Operator Greetings, and welcome to the Data Storage Corporation Fiscal Year 2024 Earnings Call. [Operator Instructions] Please note that this conference is being recorded. I will now tur ...

Financial Performance - Total revenue for 2024 increased to $25.4 million, a 2% gain from 2023, with over 80% of revenue being recurring[3] - Net income rose approximately 71% to $513 thousand, while Adjusted EBITDA increased to $2.37 million, indicating improved margins and operational efficiency[3][4] - Net income attributable to common stockholders was $523,214, with earnings per share increasing to $0.08 for basic and $0.07 for diluted[19] - Net income for the year ended December 31, 2024, increased to $513,072 from $299,316 in 2023, representing a growth of 71.5%[21] - Adjusted EBITDA for 2024 was $2,365,238, compared to $1,639,388 in 2023, reflecting an increase of 44.3%[23][25] Cash Flow and Investments - Cash flows from operating activities decreased to $1,740,089 in 2024 from $3,873,047 in 2023, a decline of 55.1%[21] - The company reported a net cash used in investing activities of $1,743,174 in 2024, compared to $3,852,245 in 2023, a reduction of 54.8%[21] - The company experienced a decrease in cash of $358,633 in 2024, compared to a decrease of $857,992 in 2023, showing an improvement of 58.3%[21] - Cash and marketable securities totaled $12.3 million with no long-term debt, positioning the company well for future growth investments[4] Operational Developments - The CloudFirst platform expanded with 4 new Tier III data centers, bringing the total to 10 globally, enhancing services across North America and Europe[4][5] - The integration of Flagship Solutions Group into CloudFirst improved operational efficiency and cross-sell potential, securing major contracts in various sectors[4][5] - The company launched CloudFirst Europe Ltd. with three Tier III data centers in the UK, aiming to serve clients across the U.S., Canada, and the UK[5] - Key new contracts in 2024 included engagements with a major motorsports manufacturer, a billion-dollar insurance provider, and a U.S. medical center[5] Asset Management - The total assets increased to $25.28 million in 2024, up from $23.30 million in 2023[17] - Accounts receivable showed a significant change, with a decrease of $1,010,880 in 2024 compared to an increase of $2,123,340 in 2023[21] Expenditures and Compensation - Capital expenditures rose to $1,800,364 in 2024, up from $1,545,017 in 2023, indicating an increase of 16.5%[21] - Stock-based compensation increased significantly to $794,687 in 2024 from $506,205 in 2023, a rise of 56.8%[21] - The company reported cash paid for interest of $23,549 in 2024, down from $65,057 in 2023, a decrease of 63.8%[21] Other Financial Metrics - The company ended 2024 with an estimated $22 million Annual Recurring Revenue run rate, reflecting the scalability of its subscription-based model[3] - Non-cash investing and financing activities included assets acquired by operating lease valued at $647,958 in 2024[21]

"We made consistent progress in 2024 — both financially and strategically," said Chuck Piluso, CEO of Data Storage Corporation. "To start, total revenue for the year increased to $25.4 million, a modest 2% gain from 2023, reflecting a shift from lower-margin, one-time equipment sales toward long term, recurring subscription revenue streams. This strategy builds on our already $39.2 million remaining contract value with disaster recovery and cloud hosting solutions. Importantly, we ended the year with an est ...