Data Storage Reports Q2 2025 Earnings: Revenue Up 4.8% YoY, EPS Misses Estimate by 233.3%, and Announces $40 Million Sale of CloudFirst Technologies Subsidiary

Data Storage reported Q2 2025 financial results with GAAP earnings per share of $(0.10) and GAAP revenue of $5.1 million, missing analyst expectations. The company announced a proposed sale of its CloudFirst Technologies subsidiary for $40 million, pending shareholder approval. Gross profit margins remained stable, but operating losses accelerated due to rising expenses.

Data Storage Corporation (DTST) reported its second-quarter (Q2) 2025 financial results, which fell short of analyst expectations. The company reported a GAAP earnings per share (EPS) of $(0.10) and GAAP revenue of $5.1 million, a 4.8% increase compared to the same period in 2024 [1].

The company's gross profit totaled $2.5 million, maintaining consistent margin levels. However, operating losses accelerated due to rising expenses, which offset the growth in subscription-based cloud and Nexxis services. The company ended the quarter with $11.1 million in cash and marketable securities, providing a solid liquidity position to fund its strategic growth initiatives [1].

Data Storage Corporation announced a proposed sale of its subsidiary, CloudFirst Technologies Corporation, for $40 million. The sale is subject to shareholder approval and is expected to generate approximately $24 million in net proceeds after fees, taxes, and other adjustments. The company has authorized a tender offer to repurchase up to 85% of its outstanding common stock using 85% of cash on hand at the time the tender offer is commenced, including net proceeds from the proposed transaction [1].

The proposed sale of CloudFirst Technologies is intended to unlock the subsidiary's value, convert it into tangible returns, and allow the company to focus resources on high-growth technology sectors such as artificial intelligence, cybersecurity, and AI vertical SaaS. If the proposed transaction is not approved by shareholders, CloudFirst will remain a core part of the company's operations, and it will continue to invest in its performance while pursuing new strategic opportunities [1].

The company's long-term plan is to evolve Data Storage Corporation into a technology-driven enterprise that capitalizes on market trends and emerging opportunities. As part of this transformation, the company is evaluating a full corporate rebranding to align its identity with its strategic direction. The company's annual meeting to discuss the proposed sale and other strategic initiatives is scheduled for September 10, 2025 [1].

References:
[1] https://finance.yahoo.com/news/dtst-reports-2025-second-quarter-123000091.html