FalconStor: Fiscal 1Q19 Financial Results

FalconStor Software, Inc. announced financial results for its first quarter ended March 31, 2019.

Financial Highlights for 1FQ19:
• Achieved non-GAAP operating income of $0.4 million, marking the seventh consecutive quarter of non-GAAP operating profitability.
• Non-GAAP gross margin increased to 86% from 85% in the first quarter of 2018.
• Achieved 112% year-over-year sales growth in the Americas region.

Product Highlights:
• Completed phase 1 integration of our VTL with Deduplication (VTL) technology into the FalconStor Data Mastery Platform during 1Q19 in order to extend its storage orchestration and ease-of-use capabilities to backup and archive use cases.
• Completed expanded independent testing of our VTL technology by the Evaluator Group, an information management and storage analyst firm. Their findings conclude that the solution delivers up to 6x better price/performance than the leading competitor.
• Completed cloud integrations for Hitachi Content Platform (HPC) and Amazon Web Services (AWS) Glacier long-term archive object storage.

“Our consistent operating profitability has enabled us to devote additional resources to our exciting product roadmap and associated development,” said Todd Brooks, CEO. “I am pleased with the efforts of the team to complete phase 1 integration of our industry leading VTL technology into the FalconStor Data Mastery Platform in order to help our enterprise customers modernize their legacy backup and archive operations. In fact, our customers are able to meet the most stringent backup windows, reduce storage capacity by up to 95%, leverage 100% of their existing investments, and use the public cloud for archive and recovery – all with zero vendor lock-in.”

“Our efforts are beginning to drive growth, especially within our Americas region,” he continued. “Americas billings grew for a third straight quarter, exceeding 2018 billings in the same period by 112%. I am very excited with our start to 2019 and the progress we are making to begin delivering growth across the globe.”

Additional Financial Highlights for 1FQ19

• Non-GAAP operating income was profitable for a seventh straight quarter at $0.4 million. GAAP net loss for the three months ended March 31, 2019, was $0.5 million, a material improvement compared to the GAAP net loss of $2.0 million for the prior year period.
• Overall, total revenue for the three months ended March 31, 2019 was $4.5 million compared to $5.0 million in the prior year period. Despite the yearly revenue decline in 1FQ19, total 2019 bookings through the end of April have increased compared to 2018. 1FQ19 delivered several deal wins, highlighted by one with a large financial entity, which included over $590,000 of billings that will be recognized in 2FQ19.
• After $0.5 million term loan repayment, the company ended the quarter with $2.4 million of cash and cash equivalents, compared to $3.1 million at December 31, 2018. The plan is to be cash flow positive for 2019 and the firm are on track to achieve this plan.