DTSTW · Data Storage Corporation

Data Storage Corporation's FY2025 results reflect a transformative year marked by the completion of a $40 million divestiture of its CloudFirst business, which generated $31.6 million in net proceeds and a $20.1 million gain on discontinued operations, driving record net income of $19.2 million attributable to common stockholders. This one-time gain overshadowed ongoing operating losses from continuing operations, where sales reached $1.4 million (up 13.4% YoY) but resulted in a $866 thousand net loss due to elevated SG&A expenses of $4.2 million. Nexxis, now the core business, demonstrated resilience with revenue growth, gross margin expansion to 44.4%, and improved customer diversification—no single customer over 10% of revenue—providing a stable foundation amid strategic repositioning. The tender offer returned $29.3 million to shareholders at $5.20 per share, slashing shares outstanding by 72% and enhancing per-share metrics, with diluted EPS jumping to $2.64 from $0.08. Balance sheet strength is evident: debt-free with cash at $2.0 million (up from $1.1 million), bolstered by $39 million in marketable securities and total assets of $43 million. Management, led by CEO Chuck Piluso, emphasized deploying over $10 million in capital into high-growth areas like AI-enabled SaaS, GPU infrastructure, cybersecurity, and recurring revenue tech services, signaling active M&A pursuit. A conference call was held on April 14, 2026, at 11:00 am ET to discuss these developments, underscoring near-term strategic updates.