Data Storage Corporation Reports Record Revenue of $25 Million and Achieves Profitability for the 2023 Fiscal Year
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Insights
The reported increase in recurring subscription-based services by 17% is a significant indicator of the company's shifting focus towards building a more predictable and stable revenue stream. This is a common strategy for tech companies aiming to improve valuation metrics, as investors typically value the predictability of subscription models. The growth in gross profit margin to 38.4% is also notable, suggesting improvements in operational efficiency or pricing power. However, it would be essential to compare this margin to industry averages to fully assess its competitiveness.
Furthermore, the company's cash and marketable securities position of over $12.7 million provides a cushion for strategic maneuvers such as M&A activities, which could potentially enhance market share and create additional value for shareholders. However, investors should be aware of the risks associated with such strategies, including integration challenges and potential dilution of shares.
From a market perspective, the emphasis on cyber-security and cloud infrastructure is timely, considering the increasing demand for digital transformation and data protection services. The company's strategic growth initiatives, including the CloudFirst and Flagship merger, suggest an alignment with industry trends towards consolidation to offer comprehensive solutions. The ability to secure new contracts and expand existing ones indicates a robust sales and marketing program, which is important for sustaining growth in a competitive landscape.
However, it's important to monitor the effectiveness of their sales and marketing spend against the revenue it generates. The company's strategic position at an 'inflection point' suggests potential for growth, but it's important to validate this against external market data and competitor performance to gauge the true market opportunity.
The reported contract momentum and the strategic focus on disaster-recovery, cyber-security and IT services are reflective of the industry's growth trajectory. Data Storage Corporation's ability to execute on its growth strategies and maintain a strong balance sheet while becoming profitable is indicative of sound management practices. However, the IT services industry is known for rapid innovation and disruption. Hence, the company's long-term success will depend on its ability to maintain technological relevance and adapt to emerging trends such as artificial intelligence and blockchain within its service offerings.
Additionally, the mention of investigating strategic M&A prospects should be taken as a signal that the company is looking to augment its capabilities or market reach. This could be a double-edged sword, offering potential growth but also introducing integration risks and the need for careful due diligence.
MELVILLE, N.Y., March 28, 2024 (GLOBE NEWSWIRE) -- Data Storage Corporation (Nasdaq: DTST) (“DSC” and the “Company”), a provider of diverse business continuity solutions for disaster-recovery, cloud infrastructure, cyber-security, and IT services, today provided a business update and reported financial results for the year ended December 31, 2023.
Chuck Piluso, CEO of Data Storage Corporation, stated, “We are proud to report record revenue of
“We are witnessing strong contract momentum as evidenced by the several contract announcements made throughout the year. Specifically, we secured contracts with new clients as well as expanded relationships with existing clients, which we believe demonstrates our ability to meet the evolving needs of our clients. Furthermore, our newly implemented sales and marketing program is proving effective and strategically complements our Major Accounts Program, where we are capitalizing on the vast opportunities for upselling and cross-selling of our products and services.”
“We believe that by executing and advancing our growth strategies, including the CloudFirst and Flagship merger, as well as expanding distribution channels, enhancing digital and direct marketing efforts, refining lead generation processes, and investigating strategic M&A prospects, we can sustainably boost revenue and optimize long-term profitability. At the same time, we have preserved a strong balance with over
Conference Call
The Company plans to host a conference call at 11:00 am ET today, to discuss the Company's financial results for the 2023 fiscal year ended December 31, 2023, as well as corporate progress and other developments.
The conference call will be available via telephone by dialing toll-free 877-451-6152 for U.S. callers or for international callers +1-201-389-0879. A webcast of the call may be accessed at https://viavid.webcasts.com/starthere.jsp?ei=1654217&tp_key=1962ffb408, or on the Company’s News & Events section of the website, www.dtst.com/news-events.
A webcast replay of the call will be available on the Company’s website (www.dtst.com/news-events) through March 28, 2025. A telephone replay of the call will be available approximately three hours following the call, through April 4, 2024, and can be accessed by dialing 844-512-2921 for U.S. callers or + 1-412-317-6671 for international callers and entering conference ID: 13744138.
About Data Storage Corporation
Data Storage Corporation (Nasdaq: DTST) is a family of fully integrated cloud-hosting, disaster-recovery, cyber security, and voice & data companies, built around technical asset investments in multiple regions, providing services to a broad range of domestic and global customers, including Fortune 500 clients, across a wide range of industries, such as government, education, and healthcare, with a focus on the rapidly growing, multi-billion-dollar business continuity market. A stable and emerging growth leader in cloud infrastructure support, DTST companies operate regional data center facilities across North America, sustainably servicing clients via recurring subscription agreements. Additional information about the Company is available at: www.dtst.com and on Twitter (@DataStorageCorp).
Safe Harbor Provision
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, that are intended to be covered by the safe harbor created thereby. Forward-looking statements are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. The forward looking statements in this press release include statements such as reporting record revenue of
Contact:
Crescendo Communications, LLC
212-671-1020
DTST@crescendo-ir.com
[Tables to Follow]
| CONSOLIDATED BALANCE SHEETS | ||||||||
| December 31, 2023 | December 31, 2022 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 1,428,730 | $ | 2,286,722 | ||||
| Accounts receivable (less allowance for credit losses of | 1,259,972 | 3,502,836 | ||||||
| Marketable securities | 11,318,196 | 9,010,968 | ||||||
| Prepaid expenses and other current assets | 513,175 | 584,666 | ||||||
| Total Current Assets | 14,520,073 | 15,385,192 | ||||||
| Property and Equipment: | ||||||||
| Property and equipment | 7,838,225 | 7,168,488 | ||||||
| Less—Accumulated depreciation | (5,105,451 | ) | (4,956,698 | ) | ||||
| Net Property and Equipment | 2,732,774 | 2,211,790 | ||||||
| Other Assets: | ||||||||
| Goodwill | 4,238,671 | 4,238,671 | ||||||
| Operating lease right-of-use assets | 62,981 | 226,501 | ||||||
| Other assets | 48,436 | 48,437 | ||||||
| Intangible assets, net | 1,698,084 | 1,975,644 | ||||||
| Total Other Assets | 6,048,172 | 6,489,253 | ||||||
| Total Assets | $ | 23,301,019 | $ | 24,086,235 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 2,608,938 | $ | 3,207,577 | ||||
| Deferred revenue | 336,201 | 281,060 | ||||||
| Finance leases payable | 263,600 | 359,868 | ||||||
| Finance leases payable related party | 235,944 | 520,623 | ||||||
| Operating lease liabilities short term | 63,983 | 160,657 | ||||||
| Total Current Liabilities | 3,508,666 | 4,529,785 | ||||||
| Operating lease liabilities | — | 71,772 | ||||||
| Finance leases payable | 17,641 | 281,242 | ||||||
| Finance leases payable related party | 20,297 | 256,241 | ||||||
| Total Long-Term Liabilities | 37,938 | 609,255 | ||||||
| Total Liabilities | 3,546,604 | 5,139,040 | ||||||
| Commitments and contingencies (Note 7) | ||||||||
| Stockholders’ Equity: | ||||||||
| Preferred stock, Series A par value $.001; 10,000,000 shares authorized;0 shares issued and outstanding in 2023 and 2022 | — | — | ||||||
| Common stock, par value $.001; 250,000,000 shares authorized; 6,880,460 and 6,822,127 shares issued and outstanding in 2023 and 2022, respectively | 6,881 | 6,822 | ||||||
| Additional paid in capital | 39,490,285 | 38,982,440 | ||||||
| Accumulated deficit | (19,505,803 | ) | (19,887,378 | ) | ||||
| Total Data Storage Corp Stockholders’ Equity | 19,991,363 | 19,101,884 | ||||||
| Non-controlling interest in consolidated subsidiary | (236,948 | ) | (154,689 | ) | ||||
| Total Stockholder’s Equity | 19,754,415 | 18,947,195 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 23,301,019 | $ | 24,086,235 | ||||
DATA STORAGE CORPORATION AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| Year Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Sales | $ | 24,959,576 | $ | 23,870,837 | ||||
| Cost of sales | 15,383,251 | 15,787,544 | ||||||
| Gross Profit | 9,576,325 | 8,083,293 | ||||||
| Impairment of goodwill | — | 2,322,000 | ||||||
| Selling, general and administrative | 9,744,736 | 9,837,308 | ||||||
| Loss from Operations | (168,411 | ) | (4,076,015 | ) | ||||
| Other Income (Expense) | ||||||||
| Interest income | 542,229 | 10,969 | ||||||
| Interest expense | (74,502 | ) | (141,056 | ) | ||||
| Impairment of deferred offering costs and financing costs associated with canceled financing efforts | — | (127,343 | ) | |||||
| Other expense | — | (75,418 | ) | |||||
| Total Other Income (Expense) | 467,727 | (332,848 | ) | |||||
| Income (Loss) before provision for income taxes | 299,316 | (4,408,863 | ) | |||||
| Provision from (Benefit from) income taxes | — | — | ||||||
| Net Income (Loss) | 299,316 | (4,408,863 | ) | |||||
| Loss in Non-controlling interest in consolidated subsidiary | 82,259 | 52,061 | ||||||
| Net Income (Loss) Attributable to Common Stockholders | $ | 381,575 | $ | (4,356,802 | ) | |||
| Earnings (loss) per Share – Basic | $ | 0.06 | $ | (0.64 | ) | |||
| Earnings (loss) per Share – Diluted | $ | 0.05 | $ | (0.64 | ) | |||
| Weighted Average Number of Shares – Basic | 6,841,094 | 6,775,140 | ||||||
| Weighted Average Number of Shares – Diluted | 7,215,069 | 6,775,140 | ||||||
| DATA STORAGE CORPORATION AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| Year Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net income (loss) | $ | 299,316 | $ | (4,408,863 | ) | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 1,301,594 | 1,225,911 | ||||||
| Stock based compensation | 506,205 | 734,479 | ||||||
| Impairment of deferred offering costs and financing costs associated with canceled financing efforts | — | 127,343 | ||||||
| Impairment of goodwill | — | 2,322,000 | ||||||
| Changes in Assets and Liabilities: | ||||||||
| Accounts receivable | 2,242,864 | (1,118,469 | ) | |||||
| Other assets | — | 54,788 | ||||||
| Prepaid expenses and other current assets | 71,491 | (48,265 | ) | |||||
| Right of use asset | 163,520 | 195,817 | ||||||
| Accounts payable and accrued expenses | (598,638 | ) | 1,864,188 | |||||
| Deferred revenue | 55,141 | (85,799 | ) | |||||
| Operating lease liability | (168,446 | ) | (199,329 | ) | ||||
| Net Cash Provided by Operating Activities | 3,873,047 | 663,801 | ||||||
| Cash Flows from Investing Activities: | ||||||||
| Capital expenditures | (1,545,017 | ) | (127,257 | ) | ||||
| Purchase of marketable securities | (2,307,228 | ) | (9,010,968 | ) | ||||
| Net Cash Used in Investing Activities | (3,852,245 | ) | (9,138,225 | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Repayments of finance lease obligations related party | (520,624 | ) | (867,741 | ) | ||||
| Repayments of finance lease obligations | (359,869 | ) | (386,509 | ) | ||||
| Payments for deferred offering costs | — | (127,341 | ) | |||||
| Cash received for the exercise of stock options | 1,699 | 6,934 | ||||||
| Net Cash Used in Financing Activities | (878,794 | ) | (1,374,657 | ) | ||||
| Decrease in Cash and Cash Equivalents | (857,992 | ) | (9,849,081 | ) | ||||
| Cash and Cash Equivalents, Beginning of Period | 2,286,722 | 12,135,803 | ||||||
| Cash and Cash Equivalents, End of Period | $ | 1,428,730 | $ | 2,286,722 | ||||
| Supplemental Disclosures: | ||||||||
| Cash paid for interest | $ | 65,057 | $ | 127,871 | ||||
| Cash paid for income taxes | $ | — | $ | — | ||||
| Non-cash investing and financing activities: | ||||||||
| Assets acquired by finance lease | $ | — | $ | 1,094,051 | ||||
FAQ
What was Data Storage 's (DTST) revenue for the 2023 fiscal year?
By how much did DTST's recurring subscription-based services increase in 2023?
What was the growth percentage in DTST's gross profit for 2023?
What was the gross profit margin for DTST in 2023?
Did Data Storage achieve profitability in 2023?
What strategies is DTST implementing to boost revenue and profitability?
How much cash and marketable securities did DTST have as of December 31, 2023?
When is the conference call to discuss DTST's financial results for the 2023 fiscal year?
