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Data Storage (DTST) - 2025 Q1 - Earnings Call Transcript
DTSTData Storage (DTST)2025-05-15 16:00
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Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was 8.1million,adecreaseofapproximately28.1 million, a decrease of approximately 2% compared to 8.2 million in Q1 2024, primarily due to a decrease in one-time equipment sales [17][18] - Gross profit was 2.86million,maintainingmarginstability,whileadjustedEBITDAwas2.86 million, maintaining margin stability, while adjusted EBITDA was 497,000, down from 680,000inQ12024[5][19]−Netincomeattributabletocommonshareholderswas680,000 in Q1 2024 [5][19] - Net income attributable to common shareholders was 24,000, compared to 357,000inQ12024[19]−CashandmarketablesecuritiesattheendofQ12025wereapproximately357,000 in Q1 2024 [19] - Cash and marketable securities at the end of Q1 2025 were approximately 11.1 million, down from 12.3millionattheendofQ42024[19]BusinessLineDataandKeyMetricsChanges−Corecloudinfrastructureanddisasterrecoveryservicesgrew1412.3 million at the end of Q4 2024 [19] Business Line Data and Key Metrics Changes - Core cloud infrastructure and disaster recovery services grew 14% year over year, indicating strong performance in these segments [5] Market Data and Key Metrics Changes - The company is expanding its infrastructure footprint and partner ecosystem in the UK, which is expected to enhance its market position [10][12] Company Strategy and Development Direction - The company aims to become a global leader in cloud infrastructure services, focusing on high-margin recurring revenue and expanding its global infrastructure [13][14] - The strategy includes forming strategic partnerships to enhance service delivery and meet client needs in regulated industries [10][12] - The company is not pursuing commodity cloud workloads but is focused on delivering enterprise-grade solutions [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a disconnect between operating fundamentals and current equity valuation, emphasizing the need to unlock shareholder value [12][61] - The company is actively evaluating strategic alternatives to enhance long-term shareholder value [61] Other Important Information - The company remains debt-free, which is viewed as critical for exploring future growth opportunities [6] - The company has established approximately 10 partnerships in the UK and is training local sales teams to promote its services [22][23] Q&A Session Summary Question: Status of European Expansion - The company has invested in the UK and established a team, with expectations for revenue to start in Q4 2025 [22][24] Question: European Market Shift to Cloud Services - Management noted that there is significant migration to cloud services, with security concerns being addressed [26][28] Question: Financial Reporting and Guidance - The company plans to file its Form 10-Q today and expects annual recurring revenue to be slightly over 22 million for the year [37][38] Question: Strategic Alternatives and Valuation Disconnect - Management is considering various strategic alternatives to address the valuation disconnect and has been encouraged to provide financial guidance [50][56]