FalconStor Software Announces First Quarter of 2023 Results

FalconStor Software, Inc. (OTCQB: FALC), a trusted data protection leader modernizing disaster recovery and backup for the hybrid cloud world, today announced financial results for its first quarter of 2023, which ended on March 31, 2023.

“We are encouraged with the progress we made in Q1, as our joint sales with IBM to deliver hybrid cloud data protection solutions to IBM customers continued to grow,” said Todd Brooks, FalconStor CEO. “IBM’s hybrid cloud focus is a key element of its growth strategy, as detailed in each of their earnings announcements over the last several quarters. Our joint solutions enable IBM customers across the globe to optimize data protection within each of their operating environments, whether those environments run on-premises or in the cloud. In addition, our partnership with IBM is enabling MSPs to expand the backup-as-a-service offerings they provide to IBM and non-IBM customers alike, as more and more enterprises entrust MSPs to manage their IT environments.”

“While total revenue in Q1 increased year over year by 11%, total revenue decreased by 11% compared to the previous quarter, as we continued our shift from perpetual revenue to annual recurring revenue within our legacy business and continued to ramp our hybrid cloud revenue. Our 81% increase in hybrid cloud ARR run-rate in Q1 compared to the previous quarter continues to demonstrate early validation of our expanding partner sales since the formal launch of our IBM relationship at the beginning of the second half of 2022, stated Brooks. “In addition, while we materially improved our net income compared to the first quarter of 2022, we were not profitable in Q1 and must continue to tightly manage operating expenses to produce consistent quarterly profitability as we ramp our hybrid cloud revenue.”

First Quarter 2023 Financial Results

• Hybrid Cloud ARR Run-Rate: 81% increase compared to the previous quarter, and 394% increase year over year
• Ending Cash: $1.8 million, compared to $2.0 million in the previous quarter, and $3.4 million in the first quarter of fiscal year 2022
• Total Revenue: $2.3 million, compared to $2.5 million in the previous quarter, and $2.0 million in the first quarter of fiscal year 2022
• Total Cost of Revenue: $0.4 million, compared to $0.4 million in the previous quarter, and $0.4 million in the first quarter of fiscal year 2022
• Total Operating Expenses: $2.3 million, compared to $2.2 million in the previous quarter, and $2.7 million in the first quarter of fiscal year 2022
• GAAP Net Income (Loss): ($0.4) million, compared to $20 thousand in the previous quarter, and ($1.1) million in the first quarter of fiscal year 2022

Please click this link to see the accompanying financial charts.