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Emoji sadFalconStor: Fiscal 1Q22 Financial Results

Sales decreasing at $2 million and $1.1 million net loss

(in $ million) 1Q21 1Q22 Growth
Revenue
3.8 2.0 -47%
Net income (loss) 0.4 (1.1)  

FalconStor Software, Inc. announced financial results for its first quarter 2022, which ended on March 31, 2022.

Our strategic shift to recurring revenue-based hybrid cloud data protection solutions took a material step forward in the quarter as we worked aggressively to secure an important reseller relationship with IBM,” said Todd Brooks, CEO. “IBM’s cloud push has been a centerpiece of its corporate strategy, as highlighted in its first quarter 2022 results. As we announced earlier today, enterprises can now leverage new joint hybrid cloud solutions from FalconStor and IBM. These solutions are especially important to the tens of thousands of companies around the globe that leverage IBM i environments, as they now have the ability to securely backup and restore to the cloud as well as migrate their IBM i workloads to IBM Power VS Cloud with secure backup and recovery on an on-going basis.”

Despite the importance of this step forward in our efforts to reinvent FalconStor, our aggressive focus on advancing critical hybrid cloud relationships and our efforts to realign our sales team accordingly negatively impacted our legacy on-premises expansions and legacy on-premises new customer acquisition revenue during the quarter. We don’t view our poor legacy results in Q1 as being a signal of accelerated legacy decline in the future,” he stated. “In fact, legacy recurring revenue renewal rates were 86% and ARR increased 4% Y/Y during the quarter. As we continue to reinvent FalconStor, we must simultaneously focus on driving new strategic hybrid cloud ARR growth and maintaining a solid legacy on-premises revenue base.”

1FQ22 Financial Results
• Annual Recurring Revenue (ARR): 4% Y/Y growth
• Ending Cash: $3.4 million, compared to $2.0 million in 1FQ21
• Total Revenue: $2.0 million, compared to $3.8 million in 1FQ21
• Total Cost of Revenue: $0.4 million, compared to $0.6 million in 1FQ21
• Total Operating Expenses: $2.7 million, compared to $3.2 million in 1FQ21
• GAAP Net Income (Loss): $(1.1) million, compared to $0.4 million in 1FQ21

Guidance
Given 1FQ22 results, the company is reducing FY22 guidance as follows:

  • Revenue between $13.0 and 14.0 million
  • Net Income between $0.8 and $1.4 million

 

 

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