FalconStor Software Announces Fourth Quarter and Fiscal Year 2020 Results

Rhea-AI Summary

FalconStor Software, Inc. (OTCQB: FALC) reported fourth quarter and fiscal year 2020 results, showing a 10% year-over-year revenue decline to $3.7 million for Q4, while total fiscal year revenue was $14.8 million, down from $16.5 million in 2019. Despite the revenue drop, the company achieved a GAAP operating income of $1.8 million, compared to a loss in the previous year. New customer bookings increased by 26% year-over-year. Management remains optimistic about future revenue stabilization and growth driven by their cloud-based data protection solutions.

Positive

• GAAP operating income of $1.8 million for fiscal year 2020, compared to a loss in 2019.
• New customer bookings increased 26% year-over-year to $3.1 million.
• Total operating expenses decreased from $14.3 million in 2019 to $11.1 million in 2020.

Negative

• Total revenue decreased 10% year-over-year in Q4 2020 to $3.7 million.
• Total revenue for fiscal year 2020 was $14.8 million, down from $16.5 million in 2019.
• GAAP operating income was $0.0 million in Q4 2020, down from $0.6 million in Q4 2019.

FalconStor Software, Inc. (OTCQB: FALC) today announced financial results for its fourth quarter and fiscal year 2020, which ended on December 31, 2020.

“We continue to make good progress against our strategic plans to reinvent FalconStor, enhance the value we deliver to our customers, and innovate within the cloud-based data protection market,” said Todd Brooks, CEO FalconStor. “While our revenue in the fourth quarter of fiscal year 2020 decreased year-over-year by 10 percent and did not repeat the 11.7 percent year-over-year increase we delivered in the third quarter of 2020, we remained profitable and ended fiscal year 2020 with $1.8 million in GAAP operating income. We believe we have created a scalable foundation from which to build. Over the next year, we expect our year-over-year revenue growth to become more stable as our sales pipeline becomes more predictable, and our shift to subscription revenue continues. Our third quarter performance and new customer bookings in fiscal year 2020, which increased year-over-year by 26 percent, are encouraging signals.”

“As we move forward, we will continue our maniacal focus in our core mission to modernize backup and archival for the multi-cloud world with our innovative, patent-pending solution, StorSafe^TM, which enables our enterprise customers to more efficiently exploit public-cloud data storage and reduce associated costs, while improving data portability, accessibility, and security – including ransomware protection,” added Brooks. “Movement to the cloud can be inhibited by many factors, but dealing with the complexity of legacy environments and the costs of data storage in the cloud are two areas where we provide differentiated capability built over many years of customer engagement and innovation. We believe for larger enterprise clients that this represents a significant portion of the available market.”

Fiscal Year 2020 Financial Results

• New Customer Bookings: $3.1 million, compared to $2.4 million in fiscal year 2019
• Total Revenue: $14.8 million, compared to $16.5 million in fiscal year 2019
• Total Cost of Revenue: $1.8 million, compared to $2.9 million in fiscal year 2019
• Total Operating Expenses: $11.1 million, compared to $14.3 million in fiscal year 2019
• GAAP Operating Income (loss): $1.8 million, compared to $(0.7) million in fiscal year 2019
• Ending Cash: $1.9 million, compared to $1.5 million in fiscal year 2019

Fourth Quarter of Fiscal Year 2020 Financial Results

• Total Revenue: $3.7 million, compared to $4.1 million in the fourth quarter of 2019
• Total Cost of Revenue: $0.5 million, compared to $0.2 million in the fourth quarter of 2019
• Total Operating Expenses: $3.2 million, compared to $3.3 million in the fourth quarter of 2019
• GAAP Operating Income: $0.0 million, compared to $0.6 million in the fourth quarter of 2019

Fiscal Year 2020 Business Highlights

• Delivered the next-generation of our industry-leading long-term data retention and recovery technology in StorSafe, built with a bridge to all industry-leading public clouds for long-term archival optimization, including AWS, Microsoft Azure, IBM Cloud, and challenger Wasabi
• Continued to demonstrate large enterprise scalability, achieving a 20 petabyte deployment across four cross-border data centers for a large transportation and logistics company
• Collaborated with Hitachi Vantara to deliver a new hybrid cloud data protection architecture powered by StorSafe
• Expanded our integration with AWS archive storage services to expand cloud data storage optimization and lower the cost of long-term data retention, including S3 Glacier and S3 Glacier Deep Archive tiers
• Accelerated replacements of end-of-life IBM ProtecTIER installations with StorSafe
• Delivered multi-tenant capabilities to enable managed service providers to better serve their clients. A prime example is Blue Chip, a leading IBM-focused UK MSP, which now counts over 300 customers and 70 petabytes of data under management running on Blue Chip Backup Cloud, powered by FalconStor

Conference Call and Webcast Information

WHO: Todd Brooks, Chief Executive Officer, FalconStor Brad Wolfe, Chief Financial Officer, FalconStor

WHEN: Wednesday, March 10, 2021 4:00 P.M. CDT

To register for our earnings call, please click the following link:

FALCONSTOR FOURTH QUARTER 2020 FINANCIAL TELECONFERENCE AND PRESENTATION

As an alternative, you can copy and paste the following link into your web browser to register:

https://attendee.gotowebinar.com/register/5432588410003492877

Conference Call:

Please dial the following if you would like to interact with and ask questions to FalconStor’s hosts:
Toll Free: 1-866-901-6455
Access Code: 314-782-185

Non-GAAP Financial Measures

The non-GAAP financial measures used in this press release are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. The Company’s management refers to these non-GAAP financial measures in making operating decisions because they provide meaningful supplemental information regarding the Company’s operating performance. In addition, these non-GAAP financial measures facilitate management’s internal comparisons to the Company’s historical operating results and comparisons to competitors’ operating results. We include these non-GAAP financial measures (which should be viewed as a supplement to, and not a substitute for, their comparable GAAP measures) in this press release because we believe they are useful to investors in allowing for greater transparency into the supplemental information used by management in its financial and operational decision-making. The non-GAAP financial measures exclude (i) restructuring costs, (ii) effects of our Series A redeemable convertible preferred stock, and (iii) non-cash stock-based compensation charges and any potential tax effects. For a reconciliation of our GAAP and non-GAAP financial results, please refer to our Non-GAAP Operating Data GAAP Reconciliation, presented in this release.

About FalconStor Software

FalconStor (OTCQB: FALC) is a data protection leader that enables enterprises to modernize their data backup and archival operations across data centers and public clouds, delivering increased data security and providing the fastest recovery from ransomware attacks while driving down costs by up to 90 percent. A proven technology leader with more than 40 patents, FalconStor has over an exabyte of data under management and is trusted by more than 1,000 enterprise customers and an ecosystem of managed service providers and resellers worldwide. To learn more, visit www.falconstor.com and stay connected with us on YouTube, Twitter, and LinkedIn.

FalconStor and FalconStor Software are trademarks or registered trademarks of FalconStor Software, Inc., in the U.S. and other countries. All other company and product names contained herein may be trademarks of their respective holders.

Links to websites or pages controlled by parties other than FalconStor are provided for the reader's convenience and information only. FalconStor does not incorporate into this release the information found at those links nor does FalconStor represent or warrant that any information found at those links is complete or accurate. Use of information obtained by following these links is at the reader's own risk.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210310005878/en/

FAQ

What were FalconStor's total revenues for fiscal year 2020?

FalconStor's total revenues for fiscal year 2020 were $14.8 million, down from $16.5 million in 2019.

How did FalconStor's new customer bookings perform in fiscal year 2020?

New customer bookings for FalconStor increased by 26% year-over-year to $3.1 million.

What was FalconStor's GAAP operating income for fiscal year 2020?

FalconStor reported a GAAP operating income of $1.8 million for fiscal year 2020.

When is FalconStor's next conference call?

FalconStor's next conference call is scheduled for March 10, 2021, at 4:00 PM CDT.