Data Storage 2025 Q3 Earnings Record $16.78M Net Income, 13482.8% Surge

Data Storage Corporation (DTST) reported a transformative quarter, driven by the $40M CloudFirst divestiture and strategic refocusing on AI and cybersecurity. The company exceeded expectations with a 28.2% revenue increase to $416,956 and a net income surge of $16.78M, up 13482.8% year-over-year. CEO Charles Piluso outlined a disciplined capital allocation strategy and $10–$15M cash target post-tender, positioning DTST for high-growth M&A.

Revenue

Total revenue rose 28.2% to $416,956 in Q3 2025, compared to $325,299 in the prior-year period, reflecting robust performance across operations.

Earnings/Net Income

DTST’s EPS skyrocketed 11400% to $2.30 in Q3 2025 from $0.02 in 2024 Q3, while net income surged to $16.78M, a 13482.8% increase from $123,526. The EPS growth outperformed net income, signaling improved operational efficiency and cost management.

Price Action

Post-earnings, DTST’s stock edged up 3.14% on the day, 3.89% for the week, but declined 0.70% month-to-date.

Post-Earnings Price Action Review

The stock’s mixed performance reflects investor optimism about the company’s strategic pivot and divestiture gains, tempered by cautious sentiment toward AI/GPU market volatility. While the 3.14% daily gain suggests short-term confidence, the month-to-date decline hints at lingering uncertainties. The 3.89% weekly rally underscores market validation of DTST’s disciplined capital return and M&A focus, though broader sector risks in AI and cybersecurity could temper momentum.

CEO Commentary

Charles Piluso emphasized the CloudFirst divestiture’s role in unlocking $40M in capital and simplifying operations, enabling a focus on DSC 2.0. Nexxis’ stable recurring revenue growth and strategic priorities—disciplined capital allocation, operational efficiency, and targeted acquisitions in AI and cybersecurity—were highlighted. Piluso also outlined a $10–$15M cash target post-tender to fund strategic opportunities.

Guidance

The company aims to complete the tender offer and share buyback process, retaining $10–$15M for acquisitions. Piluso outlined plans to explore GPU computing, AI infrastructure, and cybersecurity opportunities, with a $10.8M ATM facility for capital deployment.

Additional News

1. M&A Activity: DTST finalized the $40M CloudFirst sale, freeing capital for high-growth sectors like AI and cybersecurity. The company plans to launch a new corporate website and close a recurring-revenue acquisition by March 2026.

2. Capital Allocation: A $10.8M ATM facility was activated for strategic deployments, with $10–$15M in cash reserves targeted post-tender.

3. Buyback Strategy: DTST repurchased warrants exercisable for 858,750 shares, spending $2.05M under the fundamental transaction provision.

Financial Flexibility

DTST’s $10.8M ATM facility and $45.8M in cash and marketable securities as of September 30, 2025, underscore its liquidity. The company’s focus on disciplined M&A and operational efficiency aims to drive long-term value despite sector volatility.