DTST

This article first appeared on GuruFocus. Revenue (Continuing Operations): $359,000 for Q2 2026, up 9.3% year-over-year from $328,000. Gross Profit: $168,000, an increase of 21.9% compared to $138,000 in the prior-year period. Gross Margin: Improved to 47% from 42.1% in the prior-year period. SG&A Expenses: Increased 33.2% to $1.5 million from $1.1 million, driven by a 99.1% rise in non-cash stock-based compensation and higher professional fees. Net Loss: $1.2 million for Q2 2026, compared to a net loss of $732,000 in Q2 2025. Cash and Marketable Securities: Approximately $9.3 million at June 30, 2026, with no long-term debt. Warning! GuruFocus has detected 6 Warning Signs with DTST. Is DTST fairly valued? Test your thesis with our free DCF calculator. Release Date: August 14, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Revenue from continuing operations increased 9.3% year-over-year, driven by growth in Nexus voice and data solutions. Gross profit margin improved to 47% from 42.1%, reflecting favorable sales mix and operating leverage. Ended the quarter with approximately $9.3 million in cash and marketable securities and no long-term debt, providing financial flexibility. Active M&A pipeline with over 124 companies evaluated, focusing on AI infrastructure, cybersecurity, and telecommunications. Strategic focus on acquiring businesses with recurring revenue, strong customer relations, and capable management teams, with a disciplined approach to valuation. Net loss attributable to common shareholders widened to $1.2 million from $732,000 in the prior year period. SG&A expenses increased 33.2% due to higher non-cash stock-based compensation and professional fees. Company trades below its liquidation value, indicating market undervaluation or lack of investor confidence. M&A environment characterized by unrealistic valuations, with many potential targets having excessive price expectations. No acquisition has been completed yet, and management acknowledges the need to deliver results, not just intentions, to improve shareholder value. Q: What is the biggest hurdle in the current M&A environment, and how are valuations and opportunities changing over time? A: Chuck Piluso, Chairman and CEO, stated that while the company has reviewed over 124 companies, the primary hurdle is unrealistic valuations, particularly from pre-revenue biotech firms and companies with $5-6 million in revenue seeking $500 million valuations. He noted that many reverse merger proposals have been disappointing. The company is instead focusing on distressed companies with valuable IP, particularly in cybersecurity software, and niche plays in Sovereign AI and GPU infrastructure for regulated industries. He emphasized that the management team's quality and a product's deliverability are the most critical factors in their evaluation process. Q: Given the current stock price, how do you view the company's valuation, and does it factor into your M&A outlook? A: Piluso acknowledged that the company is trading below its liquidation value, given its approximately $10 million in cash and marketable securities. He explained that this valuation does factor into their strategy, as they plan to structure any acquisitions with a combination of cash and earn-outs. This approach ensures that sellers prove their business can grow, aligning incentives and protecting shareholder capital. Q: What is the timeline for potential M&A activity, and what should investors expect over the coming quarters? A: Piluso stated that his objective is to sign a non-binding LOI within 45 to 60 days and close a deal by the end of the fourth quarter of 2026, or definitely by the first quarter of 2027. He expressed impatience but emphasized the importance of selecting the right opportunity rather than forcing a transaction. Q: Do you expect companies with currently unrealistic valuations to come back with more reasonable asks in the future? A: Piluso confirmed that this is part of the strategy. He cited an example of a company they looked at over a year ago that has recently come back for discussions. He noted that many of these companies struggle to raise capital independently and are attracted to DTST's NASDAQ listing and capital position. The company utilizes a group of technical advisors to evaluate potential deals, particularly in software and GPU infrastructure. Q: Can you provide more detail on the financial performance of the continuing operations for the second quarter of 2026? A: Christos Panagiotakos, CFO, reported that revenue from continuing operations increased 9.3% year-over-year to $359,000, driven by growth in Nexus voice and data solutions. Gross profit increased 21.9% to $168,000, with gross margin improving to 47% from 42.1%. The net loss attributable to common shareholders was $1.2 million, compared to a loss of $732,000 in the prior year period, primarily due to a $328,000 increase in non-cash stock-based compensation. Q: What is the company's current capital position and how is it being deployed? A: CFO Panagiotakos confirmed the company ended the quarter with approximately $9.3 million in cash and marketable securities and no long-term debt. He noted that $29.5 million of the proceeds from the Cloud First sale were used to repurchase common stock in connection with a tender offer that closed on January 15, 2026. The remaining capital is earmarked for strategic acquisitions and growth initiatives. Q: What are the key strategic focus areas for potential acquisitions? A: CEO Piluso outlined that the company is focused on AI infrastructure, cybersecurity, communications, and software. He specifically mentioned interest in Sovereign AI for regulated industries, niche GPU infrastructure plays, and cybersecurity software companies with valuable IP. The common thread is seeking businesses with recurring revenue, predictable cash flow, strong customer relations, and capable management teams that can benefit from DTST's capital and platform. Q: How does the company plan to structure potential acquisitions to manage risk? A: Piluso explained that the company prefers to buy a company or a majority stake, place it in a new subsidiary, and inject fresh capital to fuel growth. He emphasized the use of earn-outs tied to performance benchmarks, stating that if sellers believe in their business, they should agree to such structures. This approach allows DTST to manage downside risk while providing upside potential for sellers who meet their targets. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. The company has transitioned to a focused operating model following the $40 million sale of CloudFirst, now centered on the Nexxis subsidiary as its core foundation. Nexxis revenue grew 9.3% year-over-year, driven by new customer acquisition and expanded service adoption within the existing enterprise base. Gross profit margins improved to 47% from 42.1%, benefiting from a favorable sales mix and increased operating leverage within the connectivity business. Management is prioritizing capital discipline, utilizing a debt-free balance sheet to evaluate synergistic technology acquisitions rather than pursuing growth for its own sake. The strategic framework focuses on businesses with durable recurring revenue, predictable cash flow, and management teams capable of scaling within a public platform. Operational focus remains on enterprise-grade reliability in voice and data transport, providing a stable cash-flow base while exploring higher-growth technology sectors. Management aims to sign a non-binding Letter of Intent (LOI) within 60 days, with a target to close a transaction by the end of Q4 2026 or early Q1 2027. The acquisition pipeline is actively targeting niche opportunities in GPU infrastructure, sovereign AI for regulated industries, and cybersecurity software. Future deal structures will likely emphasize earn-outs and performance benchmarks to mitigate risk and align management incentives with shareholder value. The company intends to leverage its Nasdaq listing and approximately $9.3 million in liquidity to partner with technology firms that require capital to scale. Strategic interest is specifically directed toward 'sovereign AI' builds for industries restricted from using public cloud infrastructure due to compliance requirements. The company utilized $29.5 million in proceeds from marketable securities to complete a shareholder tender offer in January 2026. Non-cash stock-based compensation increased by 99.1% year-over-year, significantly impacting SG&A expenses during the period. Management highlighted that the stock is currently trading below its liquidation value, which influences their selective approach to using cash versus equity in deals. Professional fees rose 26.2% due to increased legal and consulting services related to the company's ongoing strategic evaluation and M&A activities. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management has reviewed approximately 124 opportunities but cited unrealistic valuations as the primary obstacle, noting firms with $5 million to $6 million in revenue seeking $500 million valuations and pre-revenue biotech firms projecting $1 billion values. The company is specifically looking for 'distressed' opportunities where solid IP or patents exist but the business is hampered by debt or covenant issues. Chuck Piluso emphasized that they are avoiding 'reverse merger' pitches that lack clear strategic synergy or sustainable revenue paths. Because the company is trading below its cash value, management intends to use a mix of cash and stock with heavy emphasis on earn-outs based on profit and revenue targets. They plan to place acquisitions into new subsidiaries and provide fresh capital to drive growth rather than just absorbing assets. Management admitted they are limited by their $10 million cash position and must be 'real careful' to ensure any target has proven 'legs' for growth. The CEO expressed impatience to move forward but reiterated that the right deal is more important than immediate activity. The internal goal is to have a definitive agreement or closed deal by the end of the fourth quarter of 2026.

Conference Call to be Held Today at 11:00 am ET NEW YORK, Aug. 14, 2026 (GLOBE NEWSWIRE) -- Data Storage Corporation (Nasdaq: DTST) (“DTST” and the “Company”), today provided a business update for the second quarter ended June 30, 2026. Business Highlights: Advanced the Company's long-term investment strategy by actively evaluating acquisition opportunities focused on recurring revenue technology businesses. Continued momentum at Nexxis, with revenue from continuing operations increasing 9.3% year over year. Maintained a strong capital position following successful tender offer, to support disciplined capital deployment and future M&A opportunities. Chuck Piluso, Chief Executive Officer of Data Storage Corporation, commented, “The second quarter marked another step forward in our transformation following the successful sale of our CloudFirst business. While Nexxis continued to generate recurring telecommunications revenue and delivered year-over-year growth in both revenue and gross profit, the most important work taking place today is the execution of our long-term capital allocation strategy.” “Our objective is clear—to build shareholder value through disciplined investments and strategic acquisitions of businesses with recurring revenue, predictable cash flows and attractive long-term growth opportunities. We are actively evaluating opportunities across AI infrastructure, cybersecurity, communications, enterprise software and other technology sectors where we believe our experience, public company platform and financial resources can create meaningful value.” “We are focused on acquiring quality businesses that we believe can generate sustainable earnings and complement our long-term investment strategy. We are looking for companies with established customer relationships, recurring revenue models, experienced management teams and opportunities for operational and financial growth.” “At the same time, Nexxis continues to perform well as a stable operating business, reflecting continued demand for reliable enterprise connectivity solutions. We believe this recurring revenue business provides an attractive operating foundation while we pursue acquisition opportunities that have the potential to significantly expand our scale and earnings power.” “With approximately $9.3 million in cash and cash equivalents and marketable securities, no long-term debt and the flexibility provided by our streamlined corporate structure, we believe we are well positioned to act when attractive opportunities arise. Our focus remains on disciplined execution, prudent capital allocation and building long-term value for our shareholders.” Conference Call Management will host a business update call today at 11:00 a.m. Eastern Time, to discuss the Company's financial results for the second quarter of 2026 which ended June 30, 2026, as well as corporate progress and other developments. The conference call will be available via telephone by dialing toll-free 877-407-9219 for U.S. callers or for international callers +1-412-652-1274. A webcast of the call may be accessed at DTST Business Update Call or on the Company’s News & Events section of the website, www.dtst.com/news-events. A webcast replay of the call will be available on the Company’s website (www.dtst.com/news-events) through February 14, 2027. A telephone replay of the call will be available approximately three hours following the call, through August 21, 2026, and can be accessed by dialing 877-660-6853 for U.S. callers or + 1-201-612-7415 for international callers and entering conference ID: 13761587. About Data Storage Corporation Data Storage Corporation (Nasdaq: DTST), through its subsidiary Nexxis Inc., provides VoIP, internet access, SD-WAN, and data transport services as part of its integrated technology solutions platform. The Company is also pursuing strategic initiatives focused on AI continuity infrastructure for regulated industries, including the planned establishment of Sovereign AI Solutions (“SaiS”), which is intended to support recovery, resiliency, and compliance for sovereign AI and AI Factory environments. DTST continues to evaluate strategic opportunities, including potential investments, partnerships, acquisitions, and other transactions focused on AI infrastructure, cybersecurity, telecommunications, and emerging enterprise technology markets. For more information, visit www.dtst.com. Safe Harbor StatementThis press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, that are intended to be covered by the safe harbor created thereby. Forward-looking statements are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to have been correct. These forward-looking statements are based on management’s expectations and assumptions as of the date of this press release and include statements regarding: DTST building shareholder value through disciplined investments and strategic acquisitions of businesses with recurring revenue, predictable cash flows and attractive long-term growth opportunities; DTST’s experience, public company platform and financial resources creating meaningful value for strategic opportunities, DTST acquiring quality businesses that can generate sustainable earnings and complement DTST’s long-term investment strategy; Nexxis continuing to perform well as a stable operating business, reflecting continued demand for reliable enterprise connectivity solutions: the Nexxis recurring revenue business providing an attractive operating foundation while DTST pursues acquisition opportunities that have the potential to significantly expand its scale and earnings power; DTST pursuing acquisition opportunities that have the potential to significantly expand its scale and earnings power; DTST continuing to evaluate strategic opportunities, including potential investments, partnerships, acquisitions, and other transactions focused on AI infrastructure, cybersecurity, telecommunications, and emerging enterprise technology markets While DTST believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to it on the date of this release. These forward-looking statements are subject to a number of risks and uncertainties, many of which are difficult to predict that could cause actual results to differ materially from current expectations and assumptions from those set forth or implied by any forward-looking statements. Important factors that could cause actual results to differ materially from current expectations include, among others, the Company’s ability to identify strategic partnerships, investments, and acquisition opportunities that enhance shareholder value, generate sustainable earnings complement DTST’s long-term investment strategy and significantly expand its scale and earnings power; the ability of Nexxis to continue to generate recurring revenue; and the Company’s ability to advance its strategic initiatives while maintaining operational flexibility. These risks should not be construed as exhaustive and should be read together with the other cautionary statements included in the Company’s most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8- K filed with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it was initially made. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or otherwise. Contact:Crescendo Communications, [email protected]

This article first appeared on GuruFocus. Release Date: May 15, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Data Storage Corp (NASDAQ:DTST) has repositioned itself following the successful sale of its cloud solution business, operating from a position of financial strength and strategic flexibility. The company completed a substantial tender offer, reducing its outstanding shares by approximately 72% while maintaining a debt-free balance sheet and substantial liquidity. DTST plans to establish Sovereign AI Solutions, a subsidiary focused on developing an AI continuity control plane for regulated enterprises, addressing a critical infrastructure gap. Nexus, a subsidiary of DTST, continues to provide a stable recurring revenue base, with sales increasing 10.9% year-over-year and gross profit rising by 32.1%. DTST ended the quarter with cash equivalents and marketable securities of approximately $9.7 million, providing financial flexibility for future strategic initiatives. Net loss attributable to common shareholders for the quarter was $631,000, compared to a net income of $24,000 in the prior year. Selling, general, and administrative expenses increased by 71.8% to $1.5 million, driven by a significant rise in non-cash stock-based compensation and higher professional fees. The company is in the early stages of its AI strategy, with potential expenses and investments not fully defined, which could impact financial performance. There is uncertainty regarding the timeline and costs associated with developing the AI continuity platform, which may affect future profitability. The market for compliance-driven AI recovery is still emerging, and DTST faces potential competition from larger, more established companies in the future. Warning! GuruFocus has detected 6 Warning Signs with DTST. Is DTST fairly valued? Test your thesis with our free DCF calculator. Q: As you pursue the AI strategy, how will you develop technical solutions to support the go-to-market? Will you bring developers in-house or take another approach? A: (Chuck Peluso, CEO) We are currently recruiting someone to run the subsidiary and lining up CTOs who may start on a consulting basis. We are also in discussions with several companies for potential partnerships or subcontracting. Our approach involves multiple companies, each with different disciplines, to develop the necessary software and infrastructure. Q: When will we start to see expenses ramp up for the AI initiative, and how will these investments appear on the P&L? A: (Chuck Peluso, CEO) We have approximately $10 million in the bank, and the board has approved exploring this initiative. Initial expenses might reach $250,000 to $300,000 for the statement of work. Most capital expenses will be depreciated over five years, and we aim to start generating revenue by the first quarter of 2027. Q: Can you elaborate on the market opportunity for Sovereign AI Solutions and why now is the right time to enter the space? A: (Chuck Peluso, CEO) The timing is right as AI is increasingly integrated into business processes. Compliance and regulations will soon become necessary for AI deployments, especially in regulated industries. We see a significant opportunity in providing compliance and recovery solutions for these AI environments. Q: What differentiates Sovereign AI Solutions from traditional disaster recovery or cybersecurity providers? A: (Chuck Peluso, CEO) While similar in concept, no current disaster recovery providers are addressing the compliance and behavioral validation needs of AI environments. We believe we have a head start in this niche, and our background in cloud-first solutions positions us well to capitalize on this emerging market. Q: What is the development timeline and commercialization path for Sovereign AI over the next 12 to 24 months? A: (Chuck Peluso, CEO) We plan a two-stage approach: initially setting up the infrastructure without behavioral validation, then developing the software. We aim to start taking reservations soon and hope to have the system operational within nine months, with software development running concurrently. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Highlights Strategic Expansion into AI Continuity Infrastructure for Regulated Industries Conference Call to be Held Today at 11:00 am ET NEW YORK, May 15, 2026 (GLOBE NEWSWIRE) -- Data Storage Corporation (Nasdaq: DTST) (“DTST” and the “Company”), today provided a business update for the first quarter ended March 31, 2026, highlighting the Company’s strategic initiatives focused on emerging AI infrastructure opportunities and regulated enterprise continuity solutions. Business Highlights: Launching Sovereign AI Solutions (SaiS): Establishing a wholly owned subsidiary, Sovereign AI Solutions (“SaiS”), focused on developing a purpose-built AI Continuity Control Plane for regulated industries designed to support recovery, validation, and compliance for sovereign AI and AI Factory environments across sectors such as healthcare, financial services, and insurance. Strong Financial Position: Maintained strong financial position with no long-term debt and substantial working capital. Stable Nexxis Operations: Continued stable recurring operations through Nexxis Inc.’s telecom, internet access, VoIP, and SD-WAN services. Evaluation of Strategic Opportunities: Continuing to evaluate strategic partnerships, investments, and acquisition opportunities that enhance shareholder value. Chuck Piluso, Chief Executive Officer of Data Storage Corporation, commented, “During the first quarter, we continued executing our strategic transformation following the sale of our cloud solutions business in 2025, with a focus on identifying large-scale infrastructure opportunities where we believe regulatory requirements and enterprise AI adoption are creating meaningful long-term demand. As organizations increasingly deploy sovereign AI and AI Factory environments across healthcare, financial services, and insurance sectors, we believe a significant infrastructure gap is emerging around AI recovery, resiliency, validation, and compliance for mission-critical systems.” “To address this opportunity, we are establishing Sovereign AI Solutions, a wholly owned subsidiary focused on developing a purpose-built AI Continuity Control Plane designed for regulated industries. We believe this initiative positions DTST to participate in a large and rapidly evolving market opportunity while leveraging our experience supporting critical enterprise infrastructure environments.” “At the same time, Nexxis continues to provide a stable recurring revenue base through its telecom, VoIP, direct internet access, SD-WAN, and data transport services. During the first quarter of 2026, sales from Nexxis increased 10.9% year over year, while gross profit increased 32.1% with gross margin expanding to 53.7% from 45.0% in the prior year period. We believe these results reflect continued demand for our connectivity solutions, increased spending from existing customers, and the operational foundation necessary to support our broader strategic initiatives.” “Importantly, we are pursuing this strategy from a position of financial strength. With no long-term debt, substantial working capital, disciplined capital deployment, and stable recurring operations, we believe we are well positioned to advance our strategic initiatives while maintaining operational flexibility.” “Looking ahead, we expect to continue advancing development initiatives associated with SaiS throughout 2026 and anticipate providing additional commercial and operational updates as the platform progresses toward potential customer engagements. We also continue evaluating complementary opportunities, including strategic partnerships, investments, and acquisitions, that we believe may strengthen our long-term positioning while enhancing shareholder value.” Conference Call Management will host a business update call today at 11:00 a.m. Eastern Time, to discuss the Company's financial results for the first quarter of 2026 which ended March 31, 2026, as well as corporate progress and other developments. The conference call will be available via telephone by dialing toll-free 877-407-9219 for U.S. callers or for international callers +1-412-652-1274. A webcast of the call may be accessed at  DTST Business Update Call or on the Company’s News & Events section of the website,  www.dtst.com/news-events. A webcast replay of the call will be available on the Company’s website (www.dtst.com/news-events) through November 15, 2026. A telephone replay of the call will be available approximately three hours following the call, through May 22, 2026, and can be accessed by dialing 877-660-6853 for U.S. callers or + 1-201-612-7415 for international callers and entering conference ID: 13760358. About Data Storage Corporation Data Storage Corporation (Nasdaq: DTST), through its subsidiary Nexxis Inc., provides VoIP, internet access, SD-WAN, and data transport services as part of its integrated technology solutions platform. The Company is also pursuing strategic initiatives focused on AI continuity infrastructure for regulated industries, including the planned establishment of Sovereign AI Solutions (“SaiS”), which is intended to support recovery, resiliency, and compliance for sovereign AI and AI Factory environments. DTST continues to evaluate strategic opportunities, including potential investments, partnerships, acquisitions, and other transactions focused on AI infrastructure, cybersecurity, telecommunications, and emerging enterprise technology markets. For more information, visit www.dtst.com. Safe Harbor StatementThis press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, that are intended to be covered by the safe harbor created thereby. Forward-looking statements are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to have been correct. These forward-looking statements are based on management’s expectations and assumptions as of the date of this press release and include statements regarding establishing SaiS to develop a purpose-built AI Continuity Control Plane for regulated industries to support recovery, validation, and compliance for sovereign AI and AI Factory environments across sectors such as healthcare, financial services, and insurance; continuing to evaluate strategic partnerships, investments, and acquisition opportunities that enhance shareholder value; identifying large-scale infrastructure opportunities where regulatory requirements and enterprise AI adoption will create meaningful long-term demand; a significant infrastructure gap emerging around AI recovery, resiliency, validation, and compliance for mission-critical systems; the SaiS initiative positioning the Company to participate in a large and rapidly evolving market opportunity while leveraging its experience supporting critical enterprise infrastructure environments; Nexxis continuing to provide a stable recurring revenue base through its telecom, VoIP, direct internet access, SD-WAN, and data transport services; first quarter results reflecting continuing demand for the Company’s connectivity solutions and the operational foundation necessary to support its broader strategic initiatives; being positioned to advance the Company’s strategic initiatives while maintaining operational flexibility; continuing advancing development initiatives associated with SaiS throughout 2026; providing additional commercial and operational updates as the platform progresses toward potential customer engagements; continuing to evaluate complementary opportunities, including strategic partnerships, investments, and acquisitions, to strengthen the Company’s long-term positioning while enhancing shareholder value. While DTST believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to it on the date of this release. These forward-looking statements are subject to a number of risks and uncertainties, many of which are difficult to predict that could cause actual results to differ materially from current expectations and assumptions from those set forth or implied by any forward-looking statements. Important factors that could cause actual results to differ materially from current expectations include, among others, the Company’s ability to identify strategic partnerships, investments, and acquisition opportunities that enhance shareholder value; the Company’s ability to identify large-scale infrastructure opportunities where regulatory requirements and enterprise AI adoption will create meaningful long-term demand; the Company’s ability to advance development initiatives associated with SaiS and participate in the AI evolving market opportunity; the Company’s ability to use the demand for its connectivity solutions as the operational foundation necessary to support its broader strategic initiatives; and the Company’s ability to advance its strategic initiatives while maintaining operational flexibility. These risks should not be construed as exhaustive and should be read together with the other cautionary statements included in the Company’s most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8- K filed with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it was initially made. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or otherwise. Contact:Crescendo Communications, [email protected]

Image source: The Motley Fool. Wednesday, November 19, 2025 at 10 a.m. ET Chief Executive Officer — Charles Piluso Chief Financial Officer — Chris Panagiotakos Need a quote from a Motley Fool analyst? Email [email protected] Charles Piluso: Thank you, Alex. We appreciate everyone joining us today. First, I want to acknowledge the delay in the reporting of our financials. We require additional time to finalize the accounting adjustments related to the sale of our CloudFirst subsidiary, and the team worked diligently to complete this as quickly as possible. However, we're happy to be here with you today to discuss our results and our strategy moving forward. This quarter represents a defining period for Data Storage Corporation as we completed the sale of our CloudFirst subsidiary, and repositioning the company for its next phase of disciplined growth, what we call DSC 2.0. The CloudFirst sale completed on September 11, 2025 was a significant milestone for our company. That provided strong financial foundation while simplifying our structure and allowing us to focus on long-term shareholder value creation. In addition, the Board of Directors established a special committee to oversee our tender offer and buyback process, ensuring full transparency and alignment with shareholder interest. Once the tender process is completed, we'll be able to determine our final cash position, which will reflect the balance after completing all buyback transactions. We expect to move forward shortly with the tender and also a plan to launch our new corporate website in the coming weeks to highlight the company's streamlined profile and future direction. Before discussing our broader strategy, I'd like to turn this over to Chris Panagiotakos, our CFO, for a review of our financial results. Chris, take it from here. Chris Panagiotakos: Thank you, Chuck. Good morning, everyone. As Chuck mentioned, on September 11, 2025, we closed the sale of our CloudFirst business for $40 million. At the time of the sale, CloudFirst was projected to generate approximately $25 million in annual revenue and $5.5 million in EBITDA with no debt. As a result of the transaction and in accordance with auditing and reporting standards, our ongoing financial reporting now reflects only our continuing operations, specifically our Nexxis subsidiary. Sales from continuing operations, which consists of our Nexxis subsidiary, were $417,000 for the 3 months ended September 30, 2025. An increase of $92,000 or 28.2% from $325,000 in the same period last year. The increase was primarily driven by the continued expansion of our voice and data telecommunication solutions to new and existing customers. Sales from our continuing operations were $1.1 million for the 9 months ended September 30, 2025, an increase of approximately $159,000 or 17.6% from $900,000 in the same period last year. The increase was primarily driven by an expanding customer base in our Nexxis Voice and Data Solutions business. Selling, general and administrative expenses for the 3 months ended September 30, 2025, increased $313,000 or 31.8% to $1.3 million from $984,000 for the 3 months ended September 30, 2024. The increase was primarily driven by an increase in noncash stock-based compensation, primarily related to the accelerated vesting of equity awards in connection with the divestiture which triggered a fundamental transaction cause in the equity award agreements with employees as well as an increase in salaries and directors' fees due to the annual merit-based adjustments. These increases were partially offset by a decrease in professional service as certain legal and consulting projects from the prior year were completed. Selling, general and administrative expenses for the 9 months ended September 30, 2025, increased $376,000 or 13.1% to $3.2 million from $2.9 million for the 9 months ended September 30, 2024. The increase was primarily driven by an increase in noncash stock-based compensation, primarily related to the accelerated divesting of equity awards in connection with the divestiture, which triggered a fundamental transaction cause in the equity award agreements with employees as well as an increase in salaries and director fees due to the annual merit-based adjustments. These increases were primarily offset by a decrease in professional fees as certain legal and consulting projects from the prior year were completed. Net income attributable to common shareholders for the 3 months ended September 30, 2025, was $16.8 million compared to net income of $122,000 for the 3 months ended September 30, 2024. Net income attributable to common shareholders for the 9 months ended September 30, 2025, was $16.1 million compared to net income of $235,000 for the 9 months ended September 30, 2024. The significant increase in net income for the 2025 3- and 9-month period was primarily driven by the gain recognized on discontinued operations. We ended the quarter with cash, cash equivalents and marketable securities of approximately $45.8 million at September 30, 2025. The compared to $12.3 million at December 31, 2024. However, as Chuck noted, our final cash position will depend on the outcome of the tender offer and share buyback process, which will commence shortly. Thank you, and I will now turn the call back to Chuck. Charles Piluso: Thank you, Chris. The sale of CloudFirst was a transformative event for our company and our shareholders. It allowed us to unlock value, strengthen our financial position and focus on building DSC 2.0, a streamlined company pursuing selective opportunities in high-value markets. Our near-term emphasis is on disciplined execution, prudent capital allocation and operational efficiency. We are currently exploring strategic acquisitions that provide recurring revenue streams within emerging areas, such as GPU-based computing, AI enabled infrastructure, cybersecurity, but we are approaching these opportunities carefully and strategically. They remain areas of active interest, not current commitments. Our Nexxis subsidiary continues to perform well and provides a stable recurring revenue base. We see ongoing opportunities to expand Nexxis organically and through targeted acquisitions that complement our communications and data services offerings. We are also in the process of forming a special advisory group composed of experienced leaders in technology, infrastructure and cybersecurity to help identify and evaluate strategic opportunities that align with our long-term growth objectives. In addition, we are actively engaging strategic consultants to ensure that every potential investment or acquisition supports our long-term vision of profitability and sustainable growth. Looking ahead, our priorities are to complete the tender offer and share buyback process, after which our cash position and capital allocation plans will be finalized. Launched a new corporate website reflecting the company's refined focus. Also to close on an acquisition that will provide recurring revenue and to continue to strengthen Nexxis, our core operating platform today. Our experience and disciplined management philosophy, combined with our NASDAQ listing, a clean balance sheet, no debt positions us to act decisively as we uncover opportunities to invest in while continuously focusing on shareholder value. With that, I'd like to open up the call for questions. Operator? Operator: [Operator Instructions]. Our first question today is coming from Matthew Galinko of Maxim Group. Matthew Galinko: Maybe firstly, can you just remind us on what the possible outcomes of the tender look like for your cash position? Like can you bound what the low end and high end might be? Charles Piluso: Matt, that's difficult. I've run a number of models to see what that would be. And also having calls with some of our larger investors when we first announced the tender. I really cannot guess on that. If we tended all, everything, the lowest end would be approximately, I think, around $5 million. I'm estimating and then at the higher end, it could be between $10 million and $15 million. So I think it's in that range between $5 million and $15 million, but it's really -- it's too hard to really forecast that. There are really guesses with a low confidence level of what it could be. But we also have a $10.8 million ATM that's also there if we find a right opportunity that by spending that money, we're actually increasing shareholder value and not diluting them and not increasing the value. So it would be nice to be left with at least $10 million to $11 million in the company. And then as we find the acquisition cap that ATM or otherwise. But we're not going to just do it to dilute everything. We're going to do it because we have a reason. So we are trying to create a funnel of potential acquisitions that we can get done. I mean, I'm putting the pressure to try to do something by the end of March. But the smaller company sometimes are not ordered it and have to get audited. So we're pushing us to create the funnel. We also found that about sub-$5 million companies or sub-$10 million is a problem. So we need to move upstream a little bit to $10 million to $20 million. We would do more than that if we saw someone that had the right kind of bank debt, not a poisonous debt, but actually not sure. So that was a long answer. If I had to guess, I would say, it would be great to be ending up with between $10 million and $15 million. Matthew Galinko: Got it. No, I appreciate the color. That's very helpful. Maybe as a follow-up, just on a housekeeping question. But I know you mentioned there were fees that were nonrecurring in '24 compared to '25 and SG&A. Was there anything in the third quarter SG&A that for '25, that was nonrecurring. So in other words, should we see SG&A come down in the fourth quarter as we move past the major part of the carve-out of the segment? Or are we still kind of -- is the third quarter SG&A number a good run rate to be thinking about? Charles Piluso: Chris, do you want to answer that, Chris? Chris Panagiotakos: So there were not any nonrecurring charges in the quarter. All the transactions associated with the sale were booked with the sale. So I think the Q3 number is a good number to use going forward. Matthew Galinko: Got it. Very good. And then one more, and then I'll jump back in the queue. But with respect to the direction you go for acquisitions, I think you mentioned in the script that you'd consider doing a tuck-in or something small to bolster Nexxis. I'm wondering if that could end up being with some of the volatility we're seeing around expectations in the AI and infrastructure space and HPC, if kind of data and voice might be a quiet but productive use for deployment. So is there a scenario where you push harder exclusively into Nexxis? Or is that not realistic as a use of capital? Charles Piluso: Let me answer it this way. John Camello does a fantastic job in running Nexxis. And he has a small staff that we continue to add to. The platform and the building that is on makes it very easy for us to go out and let's say, pick up a $5 million VoIP company. Most of the VoIP companies have -- I'm not going to say all of them, but have maybe 40% of their revenue is in Internet access data services. And with that, you can pick that up, I think, at a decent multiple. Frankly, there's not a lot of loyalty with dial tone. So as long as you're doing a good job on customer service and dial tone exists. A lot of times, it's an easy base. I mean, many years ago, we did roll ups in telecommunications. So it's not far and technology has changed. So the multiples are not too high on it, and we are actually looking for VoIP and data access companies that are doing just what John is doing to be able to add to that base on that. And I think it's -- I don't want to use the word easy, but I believe that John can move from his $1.5 million revenue to $5 million rather quickly and $5 million can go to $10 million. It's not sexy on shareholder value, but we have running the pulp company we have some good expenses. I think our run rate in the public company is typically around $2 million a year. So picking up loyal dial tone revenue and data circuits that John does can reduce or eliminate that burn. So yes, it is a good focus. And on the AI side, with GPUs, it's very volatile. You have companies that have $750 million in revenue, and the valuation is $16 billion. So we're watching, we have some ideas on that. We've been talking to folks but as to the Nexxis piece, yes, it's an easy one first because John has a great platform, great billing, and all of that for us to be able to do that. Actually, one of our board members that was in that business that sold that business to Magic Jack for a good amount is actually helping out, trying to line up some of the brokers for us to start talking to those VoIP and data access companies. Operator: [Operator Instructions]. Our next question is coming from [ Sean Lee ] of Private Investor. Unknown Attendee: Yes. Just curious about your position on the tender offer or the one that -- is it likely to happen or the probability of that happening? Charles Piluso: Yes. Well, we stated that in the proxy when we did that. So we need to do the proxy. It's stated in there and we will be doing it. I believe that we have 90 days from close to get that actual done. So yes, that is going on. The special committee is evaluating with the price of that buyback should be for the per share but just that's happening. Unknown Attendee: Thank you. Operator: Thank you. At this time, I would like to turn the floor back over to Mr. Piluso for closing comments. Charles Piluso: Thank you. Thank you for the questions. In closing, this quarter represents a turning point for Data Storage Corporation. The successful sale of CloudFirst provided both capital, strength and strategic clarity. As we advance our M&A growth strategy, we remain focused on disciplined execution, operational excellence and shareholder value creation. We continue to evaluate new technology-driven opportunities that complement our history in enterprise infrastructure while maintaining conservative and focused approach. I'd like to thank our employees, our Board of Directors, advisers and shareholders for their continued confidence and support. We look forward to updating you on our progress in the months ahead. Thank you for joining today. Operator: Ladies and gentlemen, this concludes today's event. You may disconnect your lines or log off the webcast at this time, and enjoy the rest of your day. Before you buy stock in Data Storage, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Data Storage wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $511,411!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,238,736!* Now, it’s worth noting Stock Advisor’s total average return is 986% — a market-crushing outperformance compared to 199% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. 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Image source: The Motley Fool. Tuesday, April 14, 2026 at 11 a.m. ET Chairman and Chief Executive Officer — Charles M. Piluso Chief Financial Officer and Executive Vice President — Christos H. Panagiotakos Need a quote from a Motley Fool analyst? Email [email protected] Charles M. Piluso: Thank you, Alexandra. Good morning, everyone, and thank you for joining us. First, I would like to acknowledge the delay in reporting our fiscal year 2025 results, which was necessary to allow additional time to complete our year-end audit. This was primarily driven by the complexity of several significant transactions during the year, including the sale of our Cloud First subsidiary, the classification and settlement of many of our outstanding warrants, and the completion of a tender offer. However, we are pleased to be here today to discuss our results in more detail. 2025 was the most consequential year for Data Storage Corporation’s 25-year history. It was a year defined not just by strong financial results, but decisive action—action that fundamentally reshaped our company, strengthened our balance sheet, and positioned us for a new phase. Over the past year, we made a deliberate choice to unlock the value we had spent more than two decades building and redirect that value towards what we believe is a significantly larger opportunity ahead. We executed on that strategy in three critical ways. First, we monetized Cloud First for a total transaction value of $40 million. That transaction generated approximately $31.6 million in net proceeds and a $20.1 million gain. We sold a strong asset at full value because we believe that capital could be deployed into opportunities with greater long-term potential. At closing, we had an estimated $41 million in the bank, based on our cash balance of $10 million plus the sale of Cloud First. Second, we returned $29.3 million of that capital directly to shareholders through a tender offer at $5.20 per share, reducing our outstanding share count by approximately 72%. That level of capital return is rare for a company of our size, and it reflects a core principle of ours: capital belongs to the shareholders. When we generate it, we allocate it responsibly, whether that means returning it or investing it for growth. Third, we reset the company. We entered 2026 debt-free with over $10 million in capital, a clean balance sheet, and a simplified operating structure. From a financial standpoint, these actions resulted in record performance. We reported net income of $19.2 million for the year, compared to $500 thousand for 2024. At the same time, I want to be very clear with investors: this level of profitability reflects the Cloud First transaction and other nonrecurring events. It does not yet represent the earnings power of Data Storage Corporation, and we are being intentional and transparent about that. What it does demonstrate is our ability to create value, to recognize when to realize that value, and to act with discipline in how we allocate capital. Today, our core operating business is Nexus, and it is performing. In 2025, Nexus generated $1.4 million in revenue, representing 13.4% year-over-year growth. Gross margins expanded to 44.4%. Importantly, we improved the quality of the business by reducing customer concentration, with no single customer accounting for more than 10% of revenue. Nexus is a lean, subscription-based, recurring revenue business with improving margins and real operating leverage. We have deliberately positioned Data Storage Corporation as a NASDAQ-listed acquisition platform with capital, flexibility, and a clear mandate to identify, acquire, and scale high-quality businesses in large and growing technology markets. We are actively evaluating opportunities in areas where we believe we have both strategic alignment and the ability to add value, including AI-enabled vertical SaaS, GPU infrastructure, cybersecurity and SOC-related services, as well as scalable technology businesses with recurring revenue models. These are not abstract targets. These are markets with significant tailwinds where disciplined capital deployment can drive meaningful long-term returns. In fact, we have already identified and are actively pursuing a number of strategic opportunities within an emerging GPU infrastructure segment in enterprise technology. These areas are being shaped by strong tailwinds, including the rapid adoption of AI-driven workloads, ongoing data architecture modernization, and increasing demand for scalable, resilient digital infrastructure. Our focus remains on large, evolving markets where demand visibility is high and where we believe we can deploy capital in a disciplined, accretive manner, with an emphasis on opportunities that offer compelling risk-adjusted returns and clear avenues for long-term value creation. We are actively advancing these initiatives, positioning ourselves to stay agile and selective as they develop. We expect to provide meaningful updates in the near term as these opportunities evolve. Importantly, we are only pursuing opportunities where we understand the customer behavior and business deeply and where we see a clear and credible path to value creation. At the same time, we are focused internally on improving efficiency. As we move through 2026, expect corporate overhead to decline meaningfully as the Cloud First divestiture is completed. Our objective is to ensure that the earning power of this company is driven by operations, not one-time events. When you step back and look at Data Storage Corporation today, what you see is a company that has undergone a complete transformation. We have moved from a traditional cloud-based managed service model to a streamlined, well-capitalized platform with flexibility to pursue higher-growth, higher-margin opportunities. We have demonstrated that we can build value and that we are willing to realize it when the timing is right. Now we are focused on the next phase: building a company defined by sustainable growth, disciplined execution, and long-term shareholder returns. 2025 was about realizing value. 2026 and beyond will be about seeking opportunities, bringing together synergistic companies, and creating shareholder value. I will now turn the call over to Christos H. Panagiotakos for a review of our financial results. Christos? Christos H. Panagiotakos: Thank you, Charles. Good morning, everyone. As discussed on our last call, on 09/11/2025, we closed the sale of our Cloud First business for $40 million. As a result of the transaction and in accordance with auditing and reporting standards, our ongoing financial reporting now reflects only our continuing operations, specifically our Nexus subsidiary. Sales from continuing operations were $1.4 million for the year ended 12/31/2025, an increase of $164 thousand, or 13.4%, compared to $1.2 million in the prior year. The increase was primarily attributable to continued growth in our Nexus voice and data solutions business, driven by the addition of new customers and increased spending from existing customers. Revenue growth during the period reflects continued demand for our voice and data connectivity solutions and expansion of services within our existing customer base. Selling, general, and administrative expenses for the year ended 12/31/2025 increased $348 thousand, or 9.1%, to $4.2 million from $3.8 million for the year ended 12/31/2024. The increase was primarily driven by a $507 thousand, or 101.6%, increase in non-cash stock-based compensation, primarily related to the accelerated vesting of equity awards in connection with the sale of the Cloud First business, which triggered a fundamental transaction clause in equity award agreements with employees. Salaries and directors’ fees increased $166 thousand, or 9.8%, attributable to annual merit-based salary adjustments and bonuses. These increases were significantly offset by a $301 thousand, or 22.8%, decrease in professional fees, primarily related to lower legal and consulting expenses in the current year. We expect expenses to decrease for the year ended 12/31/2026 as compared to the year ended 12/31/2025, since a significant number of employees are no longer working for us and instead are working for the buyer of the Cloud First business, and we anticipate having lower legal and accounting costs. Net income attributable to common shareholders for the year ended 12/31/2025 was $19.2 million, compared to net income of $523 thousand for the year ended 12/31/2024. The significant increase in net income for the 2025 fiscal year was primarily driven by the gain recognized on discontinued operations. We ended the quarter with cash, cash equivalents, and marketable securities of approximately $41 million at 12/31/2025, compared to $12.3 million at 12/31/2024. Thank you. I will now turn the call back to Charles. Charles M. Piluso: Thanks, Christos. Before we open the call to questions, I want to reinforce that we believe we are entering an exciting new phase. We attended the NVIDIA conference a few weeks ago, which reinforced the magnitude of the opportunity emerging across both technology and business. The pace of innovation and the scale of investment underway are substantial, signaling a transformational shift across industries. At the same time, it sharpened our approach. Rather than competing directly in capital-intensive areas such as the billions being deployed into GPUs and core infrastructure, we are focused on disciplined participation. We have identified several key areas to pursue, and we are advancing them deliberately, allocating capital thoughtfully, and concentrating on opportunities where we see clear differentiation and the potential to drive meaningful long-term value. Now I would like to open it up for questions. Operator? Operator: We will now open the call for questions. Our first question comes from the line of Matthew Evan Galinko with Maxim Group. Please proceed with your question. Matthew Evan Galinko: Hey, good morning. Thanks for taking my questions, and congratulations on getting to this point in the transition. Maybe can you give us some sense of what valuations look like as you look toward some of the AI and HPC opportunities? Is it within reason, or is it overheated at all? Charles M. Piluso: Thanks, Matthew, and it is good to hear your voice. What is going on—especially after attending that conference—is that this is like nuclear energy. Some people are frightened, but most people are very excited. On the equipment side, it is tangible; you can put your hands on it. On the software side, everyone says they are “training” their platforms and software. In terms of valuations, you hear things like teams not even at a beta stage hoping to get $700 million while pre-revenue. For the most part, NVIDIA has paid for everyone at that conference—it was huge in San Jose and amazing. After spending 25 years in disaster recovery and business continuity, I went there with Matt, one of our board members, and we think we have an idea for a potential opportunity in an area we know pretty well. We are still testing the waters and have a lot of research to do over time, but there are parts you can play in so you do not get crushed competing with someone spending $50 billion on GPUs. So there are opportunities, based on our past experience, that we see. Valuations are all over the place. Since September when we closed, we have spoken to 21 companies we either have passed on or are evaluating—everything from SaaS AI offerings to MSPs to VoIP companies. On the MSP side, for the most part, nonrecurring revenue—unless it is software renewals—is trading at about 1.0x revenue, though some are trying to get 2.0x depending on size. On some of the AI stuff, I would say 95% of everyone we spoke to—at the conference and elsewhere—seems to be waiting to go buy their 120-foot yacht. It is not there yet. The excitement is incredible. We potentially have ideas on where we can play that separate us a little bit. But to your question, valuations are all over the place. Some are hoping for $700 million; I was literally sitting next to someone coding on a laptop who was talking about that kind of valuation. Everybody is trying to create water. It is an incredible moment. Matthew Evan Galinko: I appreciate the color. Maybe does having cash in the bank as you look to deploy get counterparties more interested? Is that helping move things along in some of these conversations? Charles M. Piluso: Two of the things we are looking at—well, three things we always laid out. There is the reverse merger path that could create great shareholder value. We are not rushing to that, but people are approaching us, and we ask, why can they build something with a $100 million market cap or more and we cannot? We are not focused on that right now, but we will look at opportunities as they approach us. There is also what I will call “medium tech”—the stuff that is not on fire, where you could get burned. There are some really good MSPs out there, and some have developed AI software. We have been talking to them about separating the “meat and potatoes” MSP from the early-stage software. We could look at doing something there, and on the software side—where everyone is still training and working on it—we might structure a joint venture or an option where we have the opportunity to buy it if it is actually deployed. You need to get creative because most MSPs and VoIP companies are trying to develop software to roll out to their existing customer base. I think that is good, but I do not think we have to give any value yet to that software. It might be a good avenue because organic growth is tough, and there could be meaningful cross-selling. So that is some of what we are looking at: go after medium tech while still evaluating an opportunity we feel could be good in the AI infrastructure/GPU space. Matthew Evan Galinko: Got it. Thank you. And then last one for the existing business: is it possible to give us a sense of what the quarterly run rate or burn would look like operating without a transaction currently? And generally, what are your expectations for Nexus over the next year operating independently? Charles M. Piluso: Sure. I will handle Nexus, and I will turn burn over to Christos. Christos H. Panagiotakos: I think the burn rate for 2026 will be approximately $2 million for the year, being a public company. Charles M. Piluso: We think we can reduce some of that, Matthew, in certain areas. Legal fees were pretty high, and we are still incurring some as we go through items, so consider that a range and an estimate. On Nexus, they are growing. We own 80% of Nexus. John Camilla runs it and does a great job. He has a small staff and is adding some folks. We need to allocate a little more money—not much—to improve inbound leads. He does a great job with agents, shows, and associations. We need to spend a bit to improve SEO. He is profitable and turned a profit. We have not really allocated a lot to growth historically. We have funded as needed but have not said, “Here is $100,000, get a digital marketing agency, get the lead flow going.” We are trying to be disciplined with the cash for the first acquisition. We have approximately 2.1 million shares outstanding, give or take a bit more, and we want to be careful that if we raise capital, it is tied to an increase in value. Matthew Evan Galinko: Got it. Very good. I appreciate the color and look forward to seeing what you do. Charles M. Piluso: Thanks very much, Matthew. Thanks for spending the time. Hope to see you soon. Operator: Thank you. There are no further questions at this time. I will now turn the floor back to Charles M. Piluso for final comments. Charles M. Piluso: Thank you. As we enter this next phase from a position of real strength—with capital on the balance sheet, a clean and simplified structure, and a clear strategic mandate—that combination gives us the ability to be selective, disciplined, and focused only on opportunities that we believe can create meaningful, long-term value for our shareholders. At the same time, we remain grounded in execution. Our priorities are clear: continue improving the performance of Nexus and deploy capital thoughtfully into areas that enhance our scale, expand our margins, and strengthen the overall quality of our earnings. We are building with intention, and we are building for durability. We appreciate the trust and support of our shareholders. We look forward to updating you on our progress as we move through 2026 and execute on the opportunities ahead. Operator: Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation. Before you buy stock in Data Storage, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Data Storage wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $556,335!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,160,572!* Now, it’s worth noting Stock Advisor’s total average return is 975% — a market-crushing outperformance compared to 193% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of April 14, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Data Storage (DTST) Q4 2025 Earnings Transcript was originally published by The Motley Fool

Completed the most consequential year in company history by monetizing the CloudFirst subsidiary for $40 million to unlock long-term value. Executed a significant capital return strategy, distributing $29.3 million to shareholders via a tender offer that reduced outstanding share count by approximately 72%. Transitioned the business model from a traditional managed service provider to a streamlined, NASDAQ-listed acquisition platform with over $10 million in remaining capital. Improved the quality of the core Nexxis operating business by reducing customer concentration, ensuring no single client accounts for more than 10% of revenue. Achieved record net income of $19.2 million, though management clarified this reflects one-time transaction gains rather than the company's baseline earning power. Maintained a debt-free balance sheet to provide maximum flexibility for pursuing high-growth technology markets including AI and cybersecurity. Actively evaluating acquisition targets in AI-enabled vertical SaaS, GPU infrastructure, and cybersecurity with a focus on recurring revenue models. Anticipating a meaningful decline in corporate overhead during 2026 as the transition from the CloudFirst divestiture is finalized. Targeting disciplined participation in the GPU infrastructure segment, focusing on differentiated opportunities rather than competing in capital-intensive core hardware. Planning to provide updates in the near term regarding specific strategic opportunities currently under active pursuit. Focusing on 'medium tech' opportunities where management can leverage 25 years of experience in disaster recovery and business continuity to ensure value creation. Reported a $20.1 million gain from the sale of CloudFirst, which significantly skewed year-over-year net income comparisons. Experienced a 101.6% increase in non-cash stock-based compensation due to accelerated equity vesting triggered by the CloudFirst sale. Acknowledged a delay in reporting fiscal results necessitated by the complexity of the divestiture, warrant settlements, and the tender offer. Identified a $301,000 decrease in professional fees, reflecting lower legal and consulting expenses compared to the prior year. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management noted that valuations are currently 'all over the place,' with some pre-revenue software firms seeking $700 million valuations. The company is avoiding 'overheated' segments, instead looking for opportunities in AI infrastructure where they can apply past expertise in disaster recovery. Confirmed they have evaluated 21 companies since September, passing on many that lacked realistic valuation expectations. Estimated the 2026 annual burn rate will be approximately $2 million as a streamlined public company. Plans to allocate modest capital to Nexxis for digital marketing and SEO to drive inbound leads and organic growth. Management intends to remain disciplined with cash reserves to ensure the first post-transformation acquisition is accretive to shareholder value. Exploring 'medium tech' Managed Service Providers (MSPs) that have developed proprietary AI software as potential targets. Considering creative structures like joint ventures for early-stage software to avoid overpaying for 'training' phases before commercial deployment. Open to reverse merger opportunities if they provide significant stockholder value, though not currently the primary focus. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.