Data Storage (DTST) - 2025 Q2 - Quarterly Results

Press Release Header & Key Announcements 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 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] Second Quarter 2025 Highlights 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] - Proposed $40 million sale of CloudFirst Technologies Corporation, with anticipated net proceeds of approximately $24 million after fees, taxes, and adjustments[2] - 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] - 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] - First half 2025 sales totaled $13.2 million, reflecting strength in recurring revenue despite declines in non-recurring equipment sales[3] 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 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 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] - 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] About Data Storage Corporation 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] - Strives to build shareholder value[11] Tender Offer Disclaimer 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] - 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] - Holders of common stock are urged to read the tender offer documents carefully when they become available[9] - Tender offer materials will be available for free at www.sec.gov or the Company's investor relations website[10] Legal & Forward-Looking Statements 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 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] - Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially[13] - Company assumes no obligation to update or revise any forward-looking statements, except as required by law[13] Contact Information 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] Condensed Consolidated Financial Statements 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 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 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 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] - Investing activities in H1 2025 included $975,000 from the sale of marketable securities, compared to $400,000 in H1 2024[21]