Data Storage Corporation (NASDAQ: DTST) Undergoes Strategic Transformation with CloudFirst Divestiture

• Data Storage Corporation completed the $40 million divestiture of its CloudFirst business in September 2025, generating approximately $31.6 million in net proceeds and a $20.1 million net gain on discontinued operations.
• For fiscal year 2025, the company reported record net income of $19.2 million, primarily driven by the gain on the CloudFirst sale, compared to $523,000 in the prior year.
• Following the divestiture and a subsequent tender offer, Data Storage Corporation is now debt-free, holds over $10 million in cash, and maintains a strengthened balance sheet with significant financial flexibility for future growth through acquisitions.

Data Storage Corporation (NASDAQ: DTST) provides data protection, business continuity, and cloud-based solutions to businesses. Its offerings include disaster recovery, cloud infrastructure, and cybersecurity services. The company has completed a major strategic transformation by divesting its CloudFirst cloud hosting business.

On April 14, 2026, Data Storage Corporation reported its fiscal year 2025 results (ended December 31, 2025). The results reflect the impact of the completed sale of CloudFirst, which closed in September 2025 for $40 million in gross proceeds.

The divestiture was accounted for as discontinued operations and generated a net gain of approximately $20.1 million. This one-time gain was the primary driver behind the company’s record net income of $19.2 million for the full year. Continuing operations (now centered on the Nexxis subsidiary) contributed more modest revenue in the low millions.

As highlighted in the GlobeNewswire release, the company also returned $29.3 million to shareholders through a tender offer completed in January 2026. The tender offer allowed shareholders to sell shares at $5.20 per share, resulting in the repurchase of approximately 5.625 million shares — representing about 72% of the shares outstanding at the time. This significantly reduced the share count and concentrated ownership.

Following the divestiture and tender offer, Data Storage Corporation is now debt-free and retains over $10 million in cash. This strengthened capital structure provides the company with substantial liquidity and flexibility to pursue strategic acquisitions and joint ventures in high-growth technology sectors, including areas such as AI, cybersecurity, and recurring-revenue technology services.

The transformation marks a clear shift: Data Storage Corporation has streamlined its operations, returned capital to shareholders, and positioned itself as a leaner entity focused on disciplined growth and long-term shareholder value.