FalconStor: Preliminary Fiscal 1Q10 Financial Results

FalconStor Software, Inc. announced preliminary results for the first quarter ended March 31, 2010.

Based on preliminary financial data, the Company expects first quarter revenue to be in the range of $16.8 to $17.1 million, non-GAAP operating loss to be between $5.8 and $6.0 million, and non-GAAP net loss per share to be between $0.08 and $0.09 per share. Non-GAAP results exclude the effects of stock-based compensation expense net of the related income taxes. The revenue shortfall was a result of lower than expected software license revenue. In particular, international software license revenue was down on a year over year basis.

“Although our results were lower than we anticipated, we are still experiencing a strong pipeline and interest for our innovative solutions which offer a compelling price/performance ratio,” said ReiJane Huai, Chairman and Chief Executive Officer of FalconStor. “In response to the revenue shortfall in the first quarter, we have delayed any additional hiring until we return to year over year revenue growth and we are evaluating other cost saving initiatives. We will not be giving any guidance for the year until our channel business reaches a steady predictable state.”