0001731122-26-000732
SEC filingQ1 2026 results reflect sharp revenue decline to $346.7K (-95.7% YoY) following divestiture, with gross margin expanding to 53.7% on favorable sales mix while operating loss widened to -$1.3M due to higher non-cash stock compensation.
Operating income swung deeper into loss at -$1.3M from -$92.5K prior year (-1290.2% YoY), as the higher loss was primarily driven by an increase in non-cash stock-based compensation expense. This dynamic eroded profitability despite gross margin gains, resulting in net income of -$619.3K versus $24.1K profit last year and diluted EPS of -$0.20 from $0.05 (-500.0% YoY). The operating margin stood at -370.9%, underscoring the disproportionate impact of overhead costs relative to reduced revenue base.
Looking forward, current liquidity together with anticipated cash flows is expected to support operational needs. The company will monitor macroeconomic conditions and capital market trends, potentially pursuing additional liquidity sources. These factors position Data Storage to navigate post-Tender Offer dynamics, leveraging Nexxis growth potential while addressing compensation and cash burn implications.