Data Storage Corporation Reports Q2 2025 Revenue Growth but Increased Net Loss

Data Storage Corporation (DSC) reported its financial results for the second quarter of 2025, revealing a total revenue of $5.15 million, a 4.8% increase from $4.91 million in the same period last year. For the first half of 2025, revenue reached $13.23 million, slightly up from $13.15 million in the prior year. However, the company experienced a net loss attributable to common stockholders of $733,049 for the quarter, compared to a loss of $244,240 in the second quarter of 2024. The loss for the first half of 2025 was $708,971, a significant decline from a net income of $112,862 in the same period last year.

The company's financial performance was impacted by increased selling, general, and administrative expenses, which rose by 19.2% to $3.33 million in the second quarter, driven primarily by higher salaries and stock-based compensation. The increase in expenses was attributed to the expansion of operations, particularly in the UK, and annual salary adjustments. Despite the revenue growth, the company's gross profit margin remained stable at 49.3%, reflecting a favorable revenue mix with a higher proportion of sales from cloud infrastructure services.

Operationally, DSC reported a customer base exceeding 425 organizations across various sectors, including government, healthcare, and education. The company has been focusing on expanding its market presence, particularly in the UK and European markets, following the establishment of CloudFirst Europe Ltd. in late 2024. The integration of Flagship Solutions into CloudFirst, completed in January 2024, has also been a strategic move aimed at enhancing operational synergies and cross-selling opportunities.

Looking ahead, DSC announced a significant strategic shift with plans to divest its cloud solutions business, which includes its CloudFirst and CloudFirst Europe subsidiaries, for approximately $40 million. This transaction, pending shareholder approval, is expected to reshape the company's operations, as the cloud solutions business has historically represented about 95% of DSC's total revenue. The company anticipates using a portion of the proceeds from the sale to return capital to shareholders while also pursuing acquisitions in complementary technology sectors. As of June 30, 2025, DSC's working capital stood at $11.24 million, reflecting a decrease from the previous period, primarily due to lower cash and marketable securities.