FalconStor: Fiscal 2Q23 Financial Results

FalconStor Software, Inc. announced financial results for its second quarter 2023, which ended on June 30, 2023.

“Our ARR run-rate growth continued in 2QFQ23 as joint sales with IBM to deliver hybrid cloud data protection solutions to IBM customers expanded,” said Todd Brooks, CEO. “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, and support IBM’s strategic hybrid cloud focus. 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.”

“Total revenue in 2FQ23 increased Q/Q, but was flat Y/Y as we continued our shift from perpetual revenue to annual recurring revenue. However, our hybrid cloud ARR run-rate in 2FQ23 grew by 29% Q/Q,” he added. “In addition, while we materially improved our net income Y/Y, we were not profitable in 2FQ23 and must continue to tightly manage operating expenses to produce consistent quarterly profitability as we ramp our hybrid cloud revenue. As announced in 2FQ23, our strategic decision to deregister from the SEC will allow us to reduce general operating expenses, increase net income, and increase our hybrid cloud growth investments.”

2FQ23 Financial Results

• Hybrid Cloud ARR Run-Rate: 29% increase Q/Q, and 247% increase Y/Y
• Ending Cash: $1.3 million, compared to $1.8 million in 1FQ23, and $1.8 million in 2FQ23
• Total Revenue: $2.4 million, compared to $2.3 million Q/Q, and $2.4 million in 2FQ22
• Total Cost of Revenue: $0.4 million, compared to $0.4 million in 1FQ23, and $0.4 million in 2FQ22
• Total Operating Expenses: $2.2 million, compared to $2.3 million in 1FQ23, and $2.5 million in 2FQ22
• GAAP Net Income (Loss): $(0.5) million, compared to $(0.4) million in 1FQ23, and $(0.9) million in 2FQ23