Data Storage CEO issues letter to shareholders

Data Storage (DTST) provided a letter to shareholders from its CEO, Chuck Piluso. “We are excited to share significant updates on the transformative progress at our wholly owned subsidiary, CloudFirst Technologies. This year we have witnessed fundamental growth, driven by our commitment to establishing CloudFirst as an industry leader in cloud hosting, disaster recovery, and cyber-security. By focusing on these high-demand areas, we are positioning the company for sustainable long-term profitability, global expansion, and heightened operational efficiency. Below, we outline key highlights, strategic initiatives, and our outlook for the future. As of June 30, 2024, CloudFirst is proud to report the following: We serve over 425 companies, representing diverse industries and a growing client base. For 2025, the baseline billing in annual recurring revenue baseline, given all annual services renew, is expected to reach over $20.0 million, while our typical agreement for our enterprise cloud is 36 months, underscores our robust financial trajectory and confidence in CloudFirst’s market positioning. CloudFirst today has over $31.0 million in remaining contract value for our enterprise subscription cloud hosting infrastructure, disaster recovery and cyber security solutions. Additionally, we are pleased to report a contract renewal rate, for over a decade, greater than 90%, highlighting the strength of our customer relationships and the ongoing satisfaction with our team and our services. These achievements reflect our strategic focus on cloud infrastructure, disaster recovery and cyber security services, which continue to deliver sustainable, high-margin growth. In line with our growth strategy, we are pleased to announce our entry into the UK market where we expect to begin offering services in the first quarter of 2025. This expansion is key to our plan to increase CloudFirst’s global footprint. We are partnering with Intel-based data centers to establish CloudFirst’s technical infrastructure across multiple data centers. These partnerships will allow us to leverage our enterprise IBM Power platform while Intel-based providers manage client referrals and billing. Our expansion into the rapidly growing European market is expected to enable us to capture new demand for cloud services, disaster recovery, and cybersecurity while positioning us as a key player in the region. These steps mark major milestones in CloudFirst’s goal of becoming a global leader in enterprise cloud-based services and offers us the opportunity to grow our client base and increase revenue in a growing market. We are also reporting the successful integration of Flagship Solutions Group into CloudFirst on January 1, 2024. Acquired in 2021, Flagship has undergone a transformation over the past few years: Flagship moved from a negative EBITDA for the year ended December 31, 2022, to a positive result in EBITDA for the year ended December 31, 2023, a testament to our ability to streamline operations and create synergies across the two organizations. A key driver of this turnaround has been our efforts to consolidate technical teams under CloudFirst’s CTO, unify our monitoring systems, and integrate various platforms, thereby optimizing the efficiency of our service delivery. This strategic integration enhances CloudFirst’s operational efficiency and positions us to capitalize on new revenue opportunities by offering our full suite of cloud and recovery services to Flagship’s established client base. Looking ahead, we believe CloudFirst is well-positioned for continued success. Our expansion into the UK, the operational efficiencies we have achieved through the Flagship Solutions Group integration, and our strong financial performance are all expected to provide a solid foundation for sustained growth and shareholder value creation. As we continue to execute our growth strategy, we remain focused on our core mission: to provide reliable, scalable, and high-margin cloud infrastructure, disaster recovery, and cybersecurity solutions. We are committed to driving innovation, delivering excellent customer experiences, and pursuing new market opportunities. We sincerely thank you for your continued support and look forward to sharing more updates as we reach new milestones.”