FalconStor: Fiscal 4Q22 Financial Results
Poor performance despite joint sales with IBM
This is a Press Release edited by StorageNewsletter.com on March 21, 2023 at 2:02 pm| (in $ million) | 4Q21 | 4Q22 | FY21 | FY22 |
| Revenue | 3.7 | 2.5 | 13.9 | 10.1 |
| Growth | -31% | -28% | ||
| Net income (loss) | (0.3) | 0.0 | (0.0) | (1.8) |
FalconStor Software, Inc. announced financial results for its fourth quarter and full year 2022, which ended on December 31, 2022.
“We are pleased with the progress we made in the 2022, especially in 4Q22 and the last half of the year, as our joint sales with IBM to deliver hybrid cloud data protection solutions to IBM customers formally launched in the second half and began to increase,” said Todd Brooks, CEO. “IBM’s hybrid cloud focus is a key element of its growth strategy, as detailed in each of their earnings announcements in 2022. 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 declined by 30% Y/Y in 2022, as we continued our shift from legacy perpetual revenue to annual recurring revenue, total revenue increased by 26% in 2FH22 compared to the first half of the year. This increase is a good early validation of our expanding partner sales since the formal launch of our IBM relationship at the beginning of the second half of 2022,” he stated. “In addition, we continued to maintain tight control of our operating expenses, resulting in positive net income in 2FH22. We are excited by the progress we made in 2022 and believe we have created a strong foundation from which to build in 2023 and beyond.”
4FQ22 Financial Results
• Hybrid Cloud ARR Run-Rate: 20% increase compared to 3FQ22, and 222% increase Y/Y
• Ending Cash: $2.0 million, compared to $1.7 million in the previous quarter, and $3.2 million in 4FQ21
• Total Revenue: $2.5 million, compared to $3.1 million in 3FQ22, and $3.7 million in 4FQ21
• Total Cost of Revenue: $0.4 million, compared to $0.4 million in 3FQ22, and $0.4 million in 4FQ21
• Total Operating Expenses: $2.2 million, compared to $2.3 million in 3FQ22, and $3.0 million in 4FQ21
• GAAP Net Income (Loss): $20 thousand, compared to $0.2 million in 3FQ22, and ($0.3) million in 4FQ21
2FH22 Financial Results
• Total Revenue: $5.6 million, compared to $4.4 million during 1FH22
• Total Cost of Revenue: $0.8 million, compared to $0.8 million during 1FH22
• Total Operating Expenses: $4.5 million, compared to $5.3 million during 1FH22
• GAAP Net Income (Loss): $0.2 million, compared to ($2.0) million during 1FH22
FY22 Financial Results
• Total Revenue: $10.1 million, compared to $13.9 million during FY21
• Total Cost of Revenue: $1.6 million, compared to $2.0 million during FY21
• Total Operating Expenses: $9.7 million, compared to $11.6 million during FY21
• GAAP Net Income (Loss): ($1.8) million, compared to ($42) thousand during FY21
Comments
4FQ22 revenue reached $2.5 million, down 19% Q/Q and 31% Y/Y, with $2.2 million in gross profit. Sales decreased each quarter of FY22.
Operating expenses were also $2.2 million, so therefore net operating income was essentially breakeven or net operating loss of $19,000 and net income was positive at $20,000.
So having launched the sales with IBM and IBM Partners in 2H22, FalconStor closed 2FH222 with $5.6 million in revenues compared to $4.4 million in 1FH22, an increase of 26%.
While total GAAP revenue for FY22 declined compared to 2021, total GAAP revenue for 2FH22 increased 26% as compared to 1FH22. Within that total GAAP revenue, the ARR run rate of hybrid cloud business increased by 48%. Within the cloud, hybrid cloud revenue piece, ARR run rate increased by 36% in 2FH22 compared to 1FH22.
Storage capacity used by installed based customers increased by 3.3% on average each month.
At the end of 3FQ22, FY22 guidance was revenue between $10.0 million and $12.0 million, the reality being at the low end at $10.1 million, historically the lowest figure for company's fiscal year.
| FY | Revenue in $ million |
Growth |
| 2004 | 28.7 | NA |
| 2005 | 41.0 | 43% |
| 2006 | 55.1 | 34% |
| 2007 | 77.4 | 41% |
| 2008 | 87.0 | 12% |
| 2009 | 89.5 | 3% |
| 2010 | 82.8 | -7% |
| 2011 | 82.9 | 0% |
| 2012 | 75.4 | -9% |
| 2013 | 58.6 | -32% |
| 2014 | 46.3 | -21% |
| 2015 | 48.6 | 5% |
| 2016 | 30.3 | -38% |
| 2017 | 25.2 | -17% |
| 2018 | 17.8 | -29% |
| 2019 | 16.5 | -7% |
| 2020 | 14.8 | -10% |
| 1FQ21 | 3.8 | 20% |
| 2FQ21 | 3.3 | -7% |
| 3FQ21 | 3.3 | -25% |
| 4FQ21 | 3.8 | 4% |
| FY21 | 14.2 | -4% |
| 1FQ22 | 2.0 | -47% |
| 2FQ22 | 2.4 | -27% |
| 3FQ22 | 3.1 | -7% |
| 4FQ22 | 2.5 | -31% |
| FY22 | 10.1 | -28% |
Subscribe to our free daily newsletter
