Data Storage 2025 Q3 Earnings Record Net Income Surges 13482.8%

Data Storage Corporation (DTST) delivered a historic performance in Q3 2025, driven by the $40 million CloudFirst divestiture. The sale unlocked $16.78 million in net income and fueled a 13482.8% year-over-year increase. Management emphasized disciplined capital reallocation and a strategic pivot to AI, cybersecurity, and GPU infrastructure.

Revenue

Data Storage’s total revenue rose 28.2% year-over-year to $416,956 in Q3 2025, reflecting sustained demand for its core services. The Nexxis subsidiary remained a stable revenue generator, while the company’s focus on high-growth sectors like AI and cybersecurity positioned it for long-term expansion.

Earnings/Net Income

The company’s EPS surged 11400% to $2.30 in Q3 2025, compared to $0.02 in the prior-year period. Net income skyrocketed to $16.78 million, a 13482.8% increase from $123,526 in 2024 Q3, driven by the CloudFirst sale and operational efficiency. The EPS surge and record net income reflect the CloudFirst sale’s impact, signaling strong performance.

Price Action

The stock price of Data Storage rose 3.14% on the latest trading day and gained 3.89% over the past week. However, it edged down 0.70% month-to-date, indicating mixed short-term sentiment despite the earnings beat. While the stock saw a rise during the week, the month-to-date decline suggests cautious market positioning ahead of strategic moves.

CEO Commentary

Charles Piluso, CEO, highlighted the CloudFirst sale as a transformative step, unlocking $40 million in capital to accelerate DSC 2.0. The strategy emphasizes disciplined M&A in GPU computing, AI infrastructure, and cybersecurity, leveraging the company’s debt-free balance sheet and NASDAQ listing. Piluso emphasized operational efficiency and forming an advisory group to evaluate strategic opportunities.

Guidance

The company targets a post-tender cash range of $5 million to $15 million, with a preference to retain $10–$15 million for strategic investments. It aims to finalize the tender offer by early 2026 and prioritize acquisitions in GPU computing and AI infrastructure, targeting $10–$20 million revenue companies to bolster Nexxis.

Additional News

Data Storage’s strategic pivot includes a $40 million CloudFirst sale, shifting focus to AI and cybersecurity. The board plans a tender offer to repurchase up to 85% of outstanding shares, using 85% of cash on hand. Recent institutional activity shows mixed investor sentiment, with some hedge funds reducing positions while others added shares. The company also repurchased warrants exercisable for 858,750 shares, signaling confidence in its capital structure.