Data Storage Corporation reported its third‑quarter 2025 financial results, posting a net income of $16.8 million, a sharp turnaround from the $122,000 net income recorded in the same quarter last year. Continuing‑operations revenue reached $417,000, up 28.2 % year‑over‑year from $325,000 in Q3 2024.
The jump in net income is largely attributable to the sale of the CloudFirst subsidiary, which closed on September 11, 2025. The transaction generated $40 million in gross proceeds and $24 million in net proceeds, creating a gain that drove the positive earnings figure. Management noted that the sale has unlocked significant shareholder value and provided a solid financial foundation for future growth.
Revenue growth was driven by a 28.2 % increase in continuing‑operations sales, supported by stronger demand in the company’s core Nexxis platform and expanding AI‑enabled infrastructure services. The company’s focus on high‑growth sectors such as AI, cybersecurity, and GPU‑based computing has begun to translate into higher top‑line performance.
Operating loss from continuing operations widened to $1.1 million in Q3 2025, compared with a $840,000 loss in the prior year. The increase is largely due to higher selling, general, and administrative expenses as the company invests in talent and technology to support its strategic pivot. Despite the operating loss, the overall net income benefited from the one‑time sale proceeds.
Cash and cash equivalents rose to $45.8 million at the end of the quarter, up from $12.3 million at the end of 2024, giving the company a robust liquidity position to fund planned acquisitions and a share‑buyback program. Management outlined a tender offer and a new website launch, and indicated that the company is targeting a cash balance of $10–$15 million after the tender offer.
CEO Chuck Piluso said the quarter represents a defining period, noting that the CloudFirst sale “unlocked significant shareholder value and provides a solid financial foundation for the future.” He added that the company is pursuing disciplined execution, prudent capital allocation, and strategic acquisitions in emerging areas such as GPU‑based computing, AI‑enabled infrastructure, and cybersecurity. Analysts responded to the results with a mixed view, with Maxim Group downgrading the stock from Buy to Hold, citing concerns about the sustainability of growth and execution risk.
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