Financial Data and Key Metrics Changes - Total sales for Q2 2025 were $5.1 million, an increase of approximately $236,000 or 4.8% compared to Q2 2024, driven by growth in subscription-based services [6][8] - Total sales for the first half of 2025 were $13.2 million, an increase of approximately $84,000 or 0.6% compared to the first half of 2024, with a significant shift in revenue mix [8][12] - Net loss attributable to common shareholders for Q2 2025 was $733,000 compared to a net loss of $244,000 for Q2 2024 [12] - Cash, cash equivalents, and marketable securities at the end of Q2 2025 were approximately $11.1 million, down from $12.3 million at the end of Q2 2024 [13] Business Line Data and Key Metrics Changes - Cloud infrastructure and disaster recovery revenue increased by approximately $193,000 or 6.1% in Q2 2025 due to new subscription clients and expanded services [6] - Nexus services saw an increase of approximately $48,000 or 17.3% [7] - Equipment and software sales decreased by approximately $95,000 or 12.1% due to non-recurring sales in the prior year [7] Market Data and Key Metrics Changes - The company reported a significant shift in revenue mix, with a $600,000 or 9.8% increase in core cloud infrastructure and disaster recovery services for the first half of 2025 [8] - The company is seeing a three-to-one ratio of ads to existing customers, indicating strong lead generation and customer acquisition [30] Company Strategy and Development Direction - The proposed sale of Cloud First Technologies is a key strategic move, with a potential net amount of $24 million to be returned to shareholders and reinvested in growth [15][16] - The company plans to allocate 15% of cash for acquisitions, innovation, and expansion, regardless of the sale outcome [17][21] - A full rebranding of the company is underway to reflect its new direction, focusing on high-growth markets such as AI and cybersecurity [20][21] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of unlocking hidden value through the sale of Cloud First, which has been a cash-generating business [40] - The company is committed to pursuing growth opportunities in AI and other verticals, regardless of the sale outcome [22][24] - Management expressed confidence in the company's ability to transform and adapt to market changes, focusing on delivering shareholder value [49][50] Other Important Information - The proposed transaction is subject to shareholder approval at the annual meeting on September 10, 2025 [22] - The company is exploring strategic partnerships and technology extensions to support its growth agenda [18][19] Q&A Session Summary Question: What will your cash position be roughly following the transaction? - Management indicated that post-transaction cash could be approximately $35 million, including $24 million from the sale and $11 million in cash [27] Question: How is the visibility into the cloud pipeline for the balance of the year? - Management noted a consistent pipeline of around $10 million in opportunities, with a strong ratio of new customer acquisitions [30] Question: Any update on the growth opportunity in Europe? - Management reported that operations in Europe are progressing well, with partnerships established and a growing sales team to support expansion [32][34] Question: What is the rationale behind selling Cloud First, given it represents about 95% of revenue? - Management explained that the sale aims to unlock value that is not being recognized in the public market, allowing for better capital allocation [40][41] Question: What will the company's operations look like post-divestiture? - Post-sale, the company will focus on AI and other growth areas, with a leaner operational structure and plans for strategic investments [43][44]

[Press Release Header & Key Announcements](index=1&type=section&id=EXHIBIT%2099.1%20DTST%20Reports%202025%20Second%20Quarter%20Financial%20Results%20and%20Provides%20Business%20Update) Data Storage Corporation reports strong Q2 2025 financial results, driven by subscription services, and announces a strategic sale and tender offer to return capital to shareholders [Report Title & Date](index=1&type=section&id=Report%20Title%20%26%20Date) Data Storage Corporation announced its financial results for the second quarter and first six months ended June 30, 2025, along with a business update - Data Storage Corporation (Nasdaq: DTST) reported financial results for the three and six months ended June 30, 2025, and provided a business update[1](index=1&type=chunk) [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Data Storage Corporation reported strong Q2 2025 results with revenue growth driven by subscription-based services, maintaining consistent gross profit margins, and a solid liquidity position, while announcing a proposed strategic sale of CloudFirst Technologies Corporation to return capital to shareholders and refocus on high-growth technology sectors - CEO Chuck Piluso highlighted strong growth in core business, particularly higher-margin, recurring subscription sales[2](index=2&type=chunk) - Proposed **$40 million** sale of CloudFirst Technologies Corporation, with anticipated net proceeds of approximately **$24 million** after fees, taxes, and adjustments[2](index=2&type=chunk) - Board authorized a tender offer to repurchase up to **85%** of outstanding common stock using **85%** of cash on hand (including net proceeds), retaining **15%** for acquisitions, innovation, and expansion into high-growth technology sectors like AI and cybersecurity[2](index=2&type=chunk) - CFO Chris Panagiotakos reported Q2 2025 total sales of **$5.1 million**, up **4.8% YoY**, driven by subscription-based cloud and Nexxis services[3](index=3&type=chunk) - First half 2025 sales totaled **$13.2 million**, reflecting strength in recurring revenue despite declines in non-recurring equipment sales[3](index=3&type=chunk) Q2 2025 Key Financial Metrics | Metric | Q2 2025 (USD) | | :-------------------------- | :------ | | Revenue | $5.1 million | | Gross profit | $2.5 million | | Cash and marketable securities | $11.1 million | [Corporate Information & Investor Resources](index=2&type=section&id=Corporate%20Information%20%26%20Investor%20Resources) This section provides details for the Q2 2025 earnings conference call, an overview of Data Storage Corporation, and a disclaimer regarding the proposed tender offer [Conference Call Information](index=2&type=section&id=Conference%20Call) Management will host a conference call on August 14, 2025, at 11:00 a.m. Eastern Time to discuss the Q2 2025 financial results, with access available via telephone and webcast, including replays - Conference call scheduled for August 14, 2025, at 11:00 a.m. ET[5](index=5&type=chunk) - Access via toll-free telephone (877-407-9219 for U.S.) or webcast (DSC Q2 2025 Earnings Call or www.dtst.com/news-events)[6](index=6&type=chunk) - Webcast replay available until February 14, 2026; telephone replay until August 21, 2025[7](index=7&type=chunk) [About Data Storage Corporation](index=2&type=section&id=About%20Data%20Storage%20Corporation) Data Storage Corporation focuses on providing solutions that ensure business continuity, improve business processes, and enhance efficiency through its subsidiaries, with a strategic goal of building shareholder value - Company focuses on providing solutions for business continuity, process improvement, and efficiency[11](index=11&type=chunk) - Strives to build shareholder value[11](index=11&type=chunk) [Tender Offer Disclaimer](index=2&type=section&id=Tender%20Offer%20Disclaimer) This section clarifies that the press release is not an offer to purchase or sell securities, and the proposed tender offer for common stock has not yet commenced, advising shareholders to carefully review the important tender offer materials that will be filed with the SEC - The press release is neither an offer to purchase nor a solicitation of an offer to sell securities[8](index=8&type=chunk) - The tender offer for shares of Common Stock has not commenced; the Company will file a Schedule TO with the SEC when it begins[8](index=8&type=chunk) - Holders of common stock are urged to read the tender offer documents carefully when they become available[9](index=9&type=chunk) - Tender offer materials will be available for free at www.sec.gov or the Company's investor relations website[10](index=10&type=chunk) [Legal & Forward-Looking Statements](index=3&type=section&id=Legal%20%26%20Forward-Looking%20Statements) The company includes a safe harbor provision for forward-looking statements, outlining inherent risks and disclaiming any obligation to update them, along with investor contact information [Safe Harbor Provision](index=3&type=section&id=Safe%20Harbor%20Provision) This section outlines the company's safe harbor provision for forward-looking statements, emphasizing that such statements are subject to risks and uncertainties that could cause actual results to differ materially, and explicitly states it assumes no obligation to update these statements unless legally required - Press release contains 'forward-looking statements' under the Private Securities Litigation Reform Act of 1995[13](index=13&type=chunk) - Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially[13](index=13&type=chunk) - Company assumes no obligation to update or revise any forward-looking statements, except as required by law[13](index=13&type=chunk) [Contact Information](index=3&type=section&id=Contact) Contact details for investor relations are provided for inquiries regarding Data Storage Corporation - Contact for investor relations: Crescendo Communications, LLC, 212-671-1020, DTST@crescendo-ir.com[14](index=14&type=chunk) [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the company's financial performance and position through condensed balance sheets, statements of operations, and cash flows for Q2 and H1 2025 [Condensed Consolidated Balance Sheets](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) The balance sheet provides a snapshot of the company's financial position at June 30, 2025, compared to December 31, 2024, showing a decrease in total assets and liabilities, while stockholders' equity remained relatively stable Condensed Consolidated Balance Sheet Highlights | Metric | June 30, 2025 (USD) | December 31, 2024 (USD) | Change (USD) | | :-------------------------- | :------------ | :---------------- | :----- | | Total Assets | $24,421,146 | $25,280,215 | -$859,069 | | Total Liabilities | $3,190,416 | $4,108,250 | -$917,834 | | Total Stockholders' Equity | $21,230,730 | $21,171,965 | +$58,765 | | Cash and cash equivalents | $611,323 | $1,070,097 | -$458,774 | | Marketable securities | $10,510,179 | $11,261,006 | -$750,827 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The statements of operations show an increase in sales for both the second quarter and first half of 2025 compared to the prior year, but also a significant increase in selling, general, and administrative expenses, leading to increased operating and net losses Condensed Consolidated Statements of Operations Highlights | Metric | Q2 2025 (USD) | Q2 2024 (USD) | Change (YoY) | H1 2025 (USD) | H1 2024 (USD) | Change (YoY) | | :-------------------------------- | :-------- | :-------- | :----------- | :-------- | :-------- | :----------- | | Sales | $5,146,922 | $4,910,492 | +4.8% | $13,230,678 | $13,146,239 | +0.6% | | Gross profit | $2,536,754 | $2,407,893 | +5.3% | $5,396,650 | $5,374,365 | +0.4% | | Selling, general and administrative | $3,332,421 | $2,796,679 | +19.1% | $6,284,826 | $5,549,356 | +13.3% | | Loss from operations | $(795,667) | $(388,786) | -104.6% | $(888,176) | $(174,991) | -407.6% | | Net income (loss) | $(731,963) | $(246,605) | -196.8% | $(705,575) | $99,299 | N/A (loss from income) | | Basic EPS | $(0.10) | $(0.04) | -150.0% | $(0.10) | $0.02 | N/A (loss from income) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the first six months of 2025, the company experienced a shift to net cash used in operating activities, while investing activities provided cash, primarily due to marketable securities sales, resulting in an overall decrease in cash and cash equivalents during the period Condensed Consolidated Statements of Cash Flows Highlights | Cash Flow Activity | H1 2025 (USD) | H1 2024 (USD) | Change (USD) | | :-------------------------------------- | :-------- | :-------- | :------- | | Net cash (used in) provided by operating activities | $(727,487) | $354,791 | -$1,082,278 | | Net cash provided by (used in) investing activities | $272,016 | $(798,381) | +$1,070,397 | | Net cash used in financing activities | $(13,253) | $(205,154) | +$191,901 | | Decrease in cash and cash equivalents | $(458,774) | $(648,744) | +$189,970 | | Cash and cash equivalents, end of period | $611,323 | $779,986 | -$168,663 | - Stock-based compensation increased significantly from **$379,172** in H1 2024 to **$638,844** in H1 2025[21](index=21&type=chunk) - Investing activities in H1 2025 included **$975,000** from the sale of marketable securities, compared to **$400,000** in H1 2024[21](index=21&type=chunk)

Core Insights - Data Storage Corporation reported strong growth in its core business, particularly in higher-margin, recurring subscription sales, with total sales of $5.1 million in Q2 2025, up 4.8% year-over-year [2][3] - The company proposed a $40 million sale of CloudFirst Technologies Corporation, which would yield approximately $24 million in net proceeds, subject to shareholder approval [2][3] - A tender offer to repurchase up to 85% of outstanding common stock has been authorized, aimed at returning capital to shareholders while retaining funds for future growth initiatives [2][3] Financial Performance - For the second quarter of 2025, total sales reached $5.1 million, reflecting a 4.8% increase from $4.9 million in Q2 2024 [3][15] - Gross profit for the quarter was $2.5 million, maintaining consistent margin levels [3][15] - The company ended the quarter with $11.1 million in cash and marketable securities, indicating a solid liquidity position [3][15] Strategic Initiatives - The proposed sale of CloudFirst is intended to unlock value and allow the company to focus on high-growth sectors such as artificial intelligence and cybersecurity [2][3] - Regardless of the sale's outcome, the company plans to evolve into a technology-driven enterprise and may pursue a corporate rebranding [2][3] - The annual meeting for shareholder approval of the proposed transaction is scheduled for September 10, 2025 [2][3]

Core Points - Data Storage Corporation (DSC) plans to host a conference call on August 14, 2025, at 11:00 a.m. Eastern Time to discuss its progress and financial results for Q2 2025, which ended on June 30, 2025 [1] - The conference call will be accessible via telephone and webcast, with specific dialing instructions provided for both U.S. and international callers [2] - A replay of the conference call will be available on the company's website until February 14, 2026, and a telephone replay will be accessible for a limited time following the call [3] Company Overview - Data Storage Corporation, listed on Nasdaq as DTST, focuses on providing solutions that ensure business continuity, improve business processes, and enhance efficiency while aiming to build shareholder value [4]

Core Viewpoint - Data Storage Corporation has entered into a definitive agreement to sell its subsidiary, CloudFirst Technologies Corporation, to Performive, aiming to enhance CloudFirst's growth and explore strategic opportunities for shareholder value [1][2][4]. Group 1: Transaction Details - The sale of CloudFirst is subject to customary closing conditions and requires approval from Data Storage Corporation's shareholders at the annual meeting scheduled for September 10, 2025 [1][3]. - CloudFirst will continue to operate under its established brand, with its leadership team and support staff remaining unchanged [2][4]. - The transaction is expected to provide CloudFirst with strategic backing for continued growth in a private setting [4][7]. Group 2: Financial Implications - If approved, Data Storage Corporation plans to use the proceeds from the sale, along with existing cash, to repurchase up to 85% of its outstanding shares through a tender offer [3][7]. - Remaining funds after the tender offer will be allocated towards strategic growth through acquisitions in high-growth sectors such as AI-enabled SaaS, cybersecurity, and healthcare automation [3][7]. Group 3: Management Commentary - The CEO of Data Storage Corporation emphasized the long-term value created by CloudFirst and expressed confidence in the future, highlighting that operations at CloudFirst will remain unchanged during the approval process [4][7]. - The CEO also noted that the public markets have not adequately reflected CloudFirst's value, and the transaction is seen as a way to return value to shareholders while pursuing growth opportunities [4][7].

Financial Performance - Sales for the three months ended March 31, 2025, decreased by approximately 2% to $8,083,756 compared to $8,235,747 for the same period in 2024[109] - For the three months ended March 31, 2025, the total net income was $26,388, with CloudFirst Technologies reporting a net income of $1,077,591[134] - Adjusted EBITDA for the same period was $497,135, with CloudFirst Technologies contributing $1,502,880[134] - For the three months ended March 31, 2024, the total net income was $345,904, with CloudFirst Technologies reporting a net income of $914,372[136] - Adjusted EBITDA for the same period was $680,318, with CloudFirst Technologies contributing $1,273,394[136] Revenue Breakdown - Revenue breakdown for Q1 2025: 44% from equipment and software sales, 42% from cloud infrastructure & disaster recovery services, 10% from managed services, and 4% from Nexxis VoIP services[109] Expenses - Cost of sales for Q1 2025 was $5,223,860, a decrease of $45,415 or 1% compared to $5,269,275 in Q1 2024[112] - Selling, general and administrative expenses increased by $199,728 or 2% to $2,952,405 in Q1 2025, primarily due to higher salaries and professional fees[113] Cash Flow - Cash used in operating activities for Q1 2025 was $1,099,807, compared to $318,624 in Q1 2024, primarily due to a decrease in net income[127] - Net cash provided by investing activities totaled $786,575 in Q1 2025, compared to net cash used of $302,006 in Q1 2024, reflecting a significant increase[128] Working Capital - The Company's working capital increased to $12,440,644 on March 31, 2025, up by $570,730 from $11,869,914 at December 31, 2024[125] Non-GAAP Measures - Non-GAAP adjustments for the three months ended March 31, 2025, included $363,379 for depreciation and amortization and $226,265 for stock-based compensation[134] - Non-GAAP adjustments for the three months ended March 31, 2024, included $295,198 for depreciation and amortization and $171,235 for stock-based compensation[136] - The company emphasizes that Adjusted EBITDA should not be considered in isolation from GAAP results, as it may differ from other companies' measures[132] - The company plans to disclose different non-GAAP financial measures in the future to help investors evaluate its results more meaningfully[132] Strategic Initiatives - The integration of Flagship Solutions into CloudFirst was completed in January 2024, enhancing operational synergies and cross-selling opportunities[107] - Data Storage Corporation expanded into the UK and European markets in October 2024, investing in regional operations and partner recruitment[108] Interest Income - Interest income for the three months ended March 31, 2025, was $(120,906), while for the same period in 2024, it was $(143,369)[134][136] Off-Balance Sheet Arrangements - The company does not have any off-balance sheet arrangements or relationships with unconsolidated entities[131] Recurring Revenue Potential - The Company believes its total contract value of subscription contracts exceeds $10 million, indicating strong recurring revenue potential[123]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $8.1 million, a decrease of approximately 2% compared to $8.2 million in Q1 2024, primarily due to a decrease in one-time equipment sales [16][17] - Gross profit was $2.86 million, maintaining margin stability, while adjusted EBITDA was $497,000, down from $680,000 in the previous year [6][18] - Net income attributable to common shareholders was $24,000, compared to $357,000 in Q1 2024 [18] - Cash and marketable securities at the end of Q1 2025 were approximately $11.1 million, down from $12.3 million at the end of 2024 [18] Business Line Data and Key Metrics Changes - Core cloud infrastructure and disaster recovery services grew by 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] 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][60] - The company is actively evaluating strategic alternatives to enhance long-term shareholder value [60] Other Important Information - The company remains debt-free, which is viewed as critical for exploring future growth opportunities [7] - The ongoing migration to cloud services is seen as a significant opportunity, with IBM estimating $90 million in annual revenue migration [26] Q&A Session Summary Question: Status of European Expansion - The company has established approximately 10 partnerships in the UK and is training local sales teams to promote their services, with revenue expected to start in Q4 2025 [21][22][24] Question: European Market Shift to Cloud Services - Management noted that security concerns are being overcome, and there is a significant migration to cloud services, positioning the company well in the market [27][28] Question: Financial Reporting and Guidance - The company plans to file its Form 10-Q today, with annual recurring revenue estimated to be over $22 million for the year [36] - The total contract value is over $41 million, with a high renewal rate expected [37][41] Question: Strategic Alternatives and Shareholder Value - Management is considering various strategic alternatives to address the valuation disconnect, including potential share buybacks and other measures to enhance shareholder value [51][60]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $8.1 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 $2.86 million, maintaining margin stability, while adjusted EBITDA was $497,000, down from $680,000 in Q1 2024 [5][19] - Net income attributable to common shareholders was $24,000, compared to $357,000 in Q1 2024 [19] - Cash and marketable securities at the end of Q1 2025 were approximately $11.1 million, down from $12.3 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]

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]

Core Insights - Data Storage Corporation (DSC) reported solid financial performance for Q1 2025, with a focus on strategic growth and international expansion [2][6][7] - The company achieved a 14% year-over-year revenue growth in its core cloud infrastructure and disaster recovery services, despite a slight decline in total revenue due to reduced equipment sales [2][7] - DSC's adjusted EBITDA for the quarter was $497,000, reflecting operational efficiency and a commitment to margin discipline [2][7] Financial Performance - Total revenue for Q1 2025 was $8.1 million, with a gross profit of $2.86 million, maintaining consistent margin levels [7][17] - The company reported a net income of $26,388 for the quarter, a decrease from $345,904 in the same period last year [17][18] - Cash and marketable securities stood at $11.1 million, with no long-term debt, indicating a strong balance sheet [7][19] Strategic Developments - DSC's subsidiary, CloudFirst Technologies, continues to operate profitably and serves as a scalable, recurring revenue engine [2][6] - A strategic partnership with Pulsant, a U.K. edge data center provider, aims to enhance DSC's service offerings across the U.K. and Europe [2][6] - The company completed a major infrastructure upgrade for a client in the food distribution sector, migrating to high-performance IBM processors [2][6] Market Position - DSC is recognized as a leader in the multi-billion-dollar cloud hosting and business continuity market, providing comprehensive migration services to facilitate transitions to cloud infrastructure [8][11] - The company serves a diverse clientele, including Fortune 500 companies, government agencies, and healthcare organizations, highlighting its broad market reach [10][11]