FalconStor Software: Fiscal 4Q25 and FY25 Financial Results

Total Revenue Growth Returns as Hybrid Cloud ARR Expansion Drives Operating Leverage

• 61% increase in Hybrid Cloud ARR Run-Rate YoY
• 17% increase in total revenue in Q4 2025 compared to Q4 2024
• Non-GAAP EBITDA doubled to $0.8 million in Q4 2025 compared to Q4 2024

FalconStor Software, Inc., a trusted data protection player modernizing disaster recovery and backup for the hybrid cloud world, announced financial results for its fourth quarter and full year 2025, which ended on December 31, 2025.“Our fourth quarter results represent an important milestone in FalconStor’s multi-year transformation,” said Todd Brooks, CEO, FalconStor Software. “After several years of deliberately transitioning our business from perpetual license revenue to subscription and consumption-based recurring revenue, we are beginning to see the expected outcome, a return to total revenue growth while maintaining strong profitability.”

Hybrid Cloud ARR run-rate increased 61% YoY in the fourth quarter, continuing the momentum we have built and validating our strategy to align FalconStor with how enterprise customers now consume data protection and resilience solutions. Approximately 75% of FalconStor revenue is now recurring, providing greater visibility, stability, and long-term operating leverage for the business.

While full year 2025 revenue remained consistent with 2024 as this transition completed, the return to quarterly revenue growth in Q4 marks a meaningful inflection point for FalconStor. Based on current customer demand and pipeline activity, we believe this momentum positions us well entering 2026.

Today, FalconStor operates with a stronger recurring revenue foundation, expanding hybrid cloud adoption, and continued financial discipline, creating increasing long-term value for customers, partners, and shareholders.

Fourth Quarter 2025 Financial Results

• Hybrid Cloud ARR Run-Rate:  61% increase compared to fourth quarter of fiscal 2024
• Ending Cash:  $2.5 million, compared to $2.5 million in the fourth quarter of fiscal year 2024
• Total Revenue:  $3.3 million, compared to $2.8 million in the fourth quarter of fiscal year 2024
• Total Cost of Revenue:  $0.4 million, compared to $0.5 million in the fourth quarter of fiscal year 2024
• Total Operating Expenses:  $2.1 million, compared to $2.1 million in the fourth quarter of fiscal year 2024
• Non-GAAP EBITDA: $0.8 million, compared to $0.4 million in the fourth quarter of fiscal year 2024
• GAAP Net Income:  $1.6 million, compared to $0.2 million in the fourth quarter of fiscal year 2024

Full Year 2025 Financial Results

• Total Revenue: $10.4 million, compared to $10.4 million during the full year of 2024
• Total Cost of Revenue: $1.7 million, compared to $1.7 million during the full year of 2024
• Total Operating Expenses: $8.5 million, compared to $7.9 million during the full year of 2024
• Non-GAAP EBITDA: $0.6 million, compared to $1.3 million during the full year of 2024
• GAAP Net Income: $1.1 million, compared to $0.7 million during the full year of 2024

“We continue to execute with disciplined cost management and operational rigor, while strategically advancing our growth and innovation initiatives,” said Vincent Sita, CFO, FalconStor.