Data Storage Corporation Provides Second Quarter 2026 Business Update
Rhea-AI Summary
Data Storage Corporation (Nasdaq: DTST) reported second quarter 2026 sales from continuing operations of $358,530, up about 9.3% year over year, driven by its Nexxis telecommunications business, with gross profit of $168,481. However, loss from continuing operations widened to $1,175,376, and net loss attributable to common stockholders was $1,225,515, or $(0.55) per basic and diluted share.
As of June 30, 2026, the company reported $270,691 in cash and cash equivalents, $9,008,914 in marketable securities and no long‑term debt, following a tender offer that repurchased about 5.6 million shares for approximately $29.5 million. Management highlighted its strategy to deploy capital into recurring‑revenue technology acquisitions, including AI infrastructure, cybersecurity, communications and enterprise software, while Nexxis remains a recurring revenue platform. A business update call is scheduled for 11:00 a.m. ET on August 14, 2026.
Positive
- Nexxis revenue from continuing operations up about 9.3% YoY
- Quarterly sales from continuing operations reached $358,530
- Gross profit from continuing operations increased to $168,481
- Cash and marketable securities total about $9.3 million with no long‑term debt
- Returned approximately $29.5 million via share repurchase tender offer
Negative
- Loss from continuing operations widened to $1,175,376 in Q2 2026
- Net loss attributable to stockholders grew to $1,225,515 for the quarter
- Six‑month net loss attributable to stockholders rose to $1,856,787
- Net cash used in operating activities increased to $2,644,827 for six months
- Common equity decreased from $40.9 million to $10.3 million versus year‑end 2025
News Explained
The post-tender share structure is newly quantified, while six-month operating cash use and ATM issuance details remain open mechanics.
The DTST quarter-end update reports
The company presents the
The six-month cash-flow statement reports
An at-the-market program allows an issuer to sell new shares gradually at prevailing prices; the six-month cash-flow statement lists
Market reaction after 2Q26 earnings report: DTST -11.73%
Following this news, DTST has declined 11.73%, reflecting a significant negative market reaction. Our momentum scanner has triggered 2 alerts so far, indicating moderate trading interest and price volatility. The stock is currently trading at $3.16. Trading volume is elevated at 2.0x the average, suggesting increased selling activity.
Data tracked by StockTitan Argus (15 min delayed). Upgrade to Gold for real-time data.
Key Figures
Historical Context
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Aug 06 | Business update scheduling | Neutral | +5.1% | Company scheduled its second-quarter business update call for August 14 |
| Jul 07 | Strategic advisor appointment | Positive | -1.2% | Appointed AI and cybersecurity veteran Jerome Naidoo as strategic advisor |
| May 21 | Public warrant expiration | Positive | -3.2% | Public warrants covering 1,464,610 shares expired and were delisted |
| May 15 | First-quarter business update | Positive | -6.9% | Nexxis sales and gross profit increased year over year |
| May 12 | AI strategy announcement | Positive | +8.2% | Company announced AI continuity infrastructure strategy for regulated industries |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Four of five selected prior events diverged from their stated announcement sentiment; only the May 12 AI strategy announcement aligned with a positive 24-hour move.
Key Terms
discontinued operations financial
non-controlling interest financial
at-the-market offering financial
voip technical
sd-wan technical
AI-generated analysis. How Rhea-AI works. Not financial advice.
Conference Call to be Held Today at 11:00 am ET
NEW YORK, Aug. 14, 2026 (GLOBE NEWSWIRE) -- Data Storage Corporation (Nasdaq: DTST) (“DTST” and the “Company”), today provided a business update for the second quarter ended June 30, 2026.
Business Highlights:
- Advanced the Company's long-term investment strategy by actively evaluating acquisition opportunities focused on recurring revenue technology businesses.
- Continued momentum at Nexxis, with revenue from continuing operations increasing
9.3% year over year. - Maintained a strong capital position following successful tender offer, to support disciplined capital deployment and future M&A opportunities.
Chuck Piluso, Chief Executive Officer of Data Storage Corporation, commented, “The second quarter marked another step forward in our transformation following the successful sale of our CloudFirst business. While Nexxis continued to generate recurring telecommunications revenue and delivered year-over-year growth in both revenue and gross profit, the most important work taking place today is the execution of our long-term capital allocation strategy.”
“Our objective is clear—to build shareholder value through disciplined investments and strategic acquisitions of businesses with recurring revenue, predictable cash flows and attractive long-term growth opportunities. We are actively evaluating opportunities across AI infrastructure, cybersecurity, communications, enterprise software and other technology sectors where we believe our experience, public company platform and financial resources can create meaningful value.”
“We are focused on acquiring quality businesses that we believe can generate sustainable earnings and complement our long-term investment strategy. We are looking for companies with established customer relationships, recurring revenue models, experienced management teams and opportunities for operational and financial growth.”
“At the same time, Nexxis continues to perform well as a stable operating business, reflecting continued demand for reliable enterprise connectivity solutions. We believe this recurring revenue business provides an attractive operating foundation while we pursue acquisition opportunities that have the potential to significantly expand our scale and earnings power.”
“With approximately
Conference Call
Management will host a business update call today at 11:00 a.m. Eastern Time, to discuss the Company's financial results for the second quarter of 2026 which ended June 30, 2026, as well as corporate progress and other developments.
The conference call will be available via telephone by dialing toll-free 877-407-9219 for U.S. callers or for international callers +1-412-652-1274. A webcast of the call may be accessed at DTST Business Update Call or on the Company’s News & Events section of the website, www.dtst.com/news-events.
A webcast replay of the call will be available on the Company’s website (www.dtst.com/news-events) through February 14, 2027. A telephone replay of the call will be available approximately three hours following the call, through August 21, 2026, and can be accessed by dialing 877-660-6853 for U.S. callers or + 1-201-612-7415 for international callers and entering conference ID: 13761587.
About Data Storage Corporation
Data Storage Corporation (Nasdaq: DTST), through its subsidiary Nexxis Inc., provides VoIP, internet access, SD-WAN, and data transport services as part of its integrated technology solutions platform. The Company is also pursuing strategic initiatives focused on AI continuity infrastructure for regulated industries, including the planned establishment of Sovereign AI Solutions (“SaiS”), which is intended to support recovery, resiliency, and compliance for sovereign AI and AI Factory environments.
DTST continues to evaluate strategic opportunities, including potential investments, partnerships, acquisitions, and other transactions focused on AI infrastructure, cybersecurity, telecommunications, and emerging enterprise technology markets. For more information, visit www.dtst.com.
Safe Harbor Statement
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, that are intended to be covered by the safe harbor created thereby. Forward-looking statements are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to have been correct. These forward-looking statements are based on management’s expectations and assumptions as of the date of this press release and include statements regarding: DTST building shareholder value through disciplined investments and strategic acquisitions of businesses with recurring revenue, predictable cash flows and attractive long-term growth opportunities; DTST’s experience, public company platform and financial resources creating meaningful value for strategic opportunities, DTST acquiring quality businesses that can generate sustainable earnings and complement DTST’s long-term investment strategy; Nexxis continuing to perform well as a stable operating business, reflecting continued demand for reliable enterprise connectivity solutions: the Nexxis recurring revenue business providing an attractive operating foundation while DTST pursues acquisition opportunities that have the potential to significantly expand its scale and earnings power; DTST pursuing acquisition opportunities that have the potential to significantly expand its scale and earnings power; DTST continuing to evaluate strategic opportunities, including potential investments, partnerships, acquisitions, and other transactions focused on AI infrastructure, cybersecurity, telecommunications, and emerging enterprise technology markets While DTST believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to it on the date of this release. These forward-looking statements are subject to a number of risks and uncertainties, many of which are difficult to predict that could cause actual results to differ materially from current expectations and assumptions from those set forth or implied by any forward-looking statements. Important factors that could cause actual results to differ materially from current expectations include, among others, the Company’s ability to identify strategic partnerships, investments, and acquisition opportunities that enhance shareholder value, generate sustainable earnings complement DTST’s long-term investment strategy and significantly expand its scale and earnings power; the ability of Nexxis to continue to generate recurring revenue; and the Company’s ability to advance its strategic initiatives while maintaining operational flexibility. These risks should not be construed as exhaustive and should be read together with the other cautionary statements included in the Company’s most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8- K filed with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it was initially made. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or otherwise.
Contact:
Crescendo Communications, LLC
212-671-1020
DTST@crescendo-ir.com
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| June 30, 2026 (Unaudited) | December 31, 2025 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 270,691 | $ | 1,989,354 | ||||
| Accounts receivable, net of allowance for expected credit losses of | 45,929 | 34,605 | ||||||
| Escrow funds receivable | 1,000,000 | 1,500,000 | ||||||
| Marketable securities | 9,008,914 | 39,004,124 | ||||||
| Income taxes receivable | 545,472 | — | ||||||
| Prepaid expenses and other current assets | 126,816 | 98,843 | ||||||
| Total current assets | 10,997,822 | 42,626,926 | ||||||
| Property and equipment, net | 15,432 | 16,866 | ||||||
| Other long-term assets | 120,467 | 378,682 | ||||||
| Total assets | $ | 11,133,721 | $ | 43,022,474 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 736,516 | $ | 842,473 | ||||
| Payable to purchaser of discontinued operations | — | 15,889 | ||||||
| Excise taxes payable | 292,507 | 1,166,315 | ||||||
| Total current liabilities | 1,029,023 | 2,024,677 | ||||||
| Deferred tax liability - non-current | — | 312,334 | ||||||
| Total long-term liabilities | — | 312,334 | ||||||
| Total liabilities | 1,029,023 | 2,337,011 | ||||||
| Commitments and contingencies (Note 8) | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, par value | — | — | ||||||
| Common stock, par value | 7,963 | 7,793 | ||||||
| Treasury stock, at cost; 5,625,129 and 0 shares as of June 30, 2026 and December 31, 2025, respectively | (29,821,464 | ) | — | |||||
| Additional paid-in capital | 41,777,237 | 40,706,616 | ||||||
| (Accumulated deficit) retained earnings | (1,634,676 | ) | 222,111 | |||||
| Accumulated other comprehensive loss | — | (14,235 | ) | |||||
| Total Data Storage Corporation stockholders’ equity | 10,329,060 | 40,922,285 | ||||||
| Non-controlling interest in consolidated subsidiary | (224,362 | ) | (236,822 | ) | ||||
| Total stockholders’ equity | 10,104,698 | 40,685,463 | ||||||
| Total liabilities and stockholders’ equity | $ | 11,133,721 | $ | 43,022,474 | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Sales | $ | 358,530 | $ | 327,951 | $ | 705,237 | $ | 640,695 | ||||||||
| Cost of sales | 190,049 | 189,769 | 350,737 | 361,736 | ||||||||||||
| Gross profit | 168,481 | 138,182 | 354,500 | 278,959 | ||||||||||||
| Selling, general and administrative | 1,450,551 | 1,088,944 | 2,922,664 | 1,945,859 | ||||||||||||
| Loss from operations | (1,282,070 | ) | (950,762 | ) | (2,568,164 | ) | (1,666,900 | ) | ||||||||
| Interest income | 81,415 | 103,267 | 199,800 | 224,173 | ||||||||||||
| Other (expense) income | (38,358 | ) | — | 80,857 | — | |||||||||||
| Loss from continuing operations before income taxes | (1,239,013 | ) | (847,495 | ) | (2,287,507 | ) | (1,442,727 | ) | ||||||||
| Benefit from income taxes | (63,637 | ) | — | (343,873 | ) | — | ||||||||||
| Loss from continuing operations, net of tax | (1,175,376 | ) | (847,495 | ) | (1,943,634 | ) | (1,442,727 | ) | ||||||||
| Income from discontinued operations, net of tax | 115,532 | 737,152 | ||||||||||||||
| (Loss) gain on sale of discontinued operations, net of tax | (49,684 | ) | — | 99,307 | — | |||||||||||
| (Loss) income from discontinued operations, net of tax | (49,684 | ) | 115,532 | 99,307 | 737,152 | |||||||||||
| Net loss | (1,225,060 | ) | (731,963 | ) | (1,844,327 | ) | (705,575 | ) | ||||||||
| Less: net income attributable to non-controlling interest of consolidated subsidiary | 455 | 1,086 | 12,460 | 3,396 | ||||||||||||
| Net loss attributable to common stockholders | $ | (1,225,515 | ) | $ | (733,049 | ) | $ | (1,856,787 | ) | $ | (708,971 | ) | ||||
| Loss per share from continuing operations – basic | $ | (0.52 | ) | $ | (0.12 | ) | $ | (0.73 | ) | $ | (0.20 | ) | ||||
| Loss per share from continuing operations – diluted | $ | (0.52 | ) | $ | (0.12 | ) | $ | (0.73 | ) | $ | (0.20 | ) | ||||
| (Loss) earnings per share from discontinued operations – basic | $ | (0.02 | ) | $ | 0.02 | $ | 0.04 | $ | 0.10 | |||||||
| (Loss) earnings per share from discontinued operations – diluted | $ | (0.02 | ) | $ | 0.02 | $ | 0.04 | $ | 0.10 | |||||||
| Loss per share attributable to common stockholders – basic (1) | $ | (0.55 | ) | $ | (0.10 | ) | $ | (0.69 | ) | $ | (0.10 | ) | ||||
| Loss per share attributable to common stockholders – diluted (1) | $ | (0.55 | ) | $ | (0.10 | ) | $ | (0.69 | ) | $ | (0.10 | ) | ||||
| Weighted average number of shares – basic | 2,244,002 | 7,155,464 | 2,671,953 | 7,119,102 | ||||||||||||
| Weighted average number of shares – diluted | 2,244,002 | 7,155,464 | 2,671,953 | 7,119,102 | ||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||||||||
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Loss from continuing operations, net of tax | $ | (1,943,634 | ) | $ | (1,442,727 | ) | ||
| Income from discontinued operations, net of tax | 99,307 | 737,152 | ||||||
| Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 1,434 | 1,098 | ||||||
| Stock based compensation | 1,221,249 | 468,012 | ||||||
| Change in fair value of warrant liability | (150,458 | ) | — | |||||
| Change in fair value of investment | 69,601 | — | ||||||
| Deferred taxes | (312,334 | ) | — | |||||
| Provision for credit losses | — | 6,512 | ||||||
| Changes in Assets and Liabilities: | ||||||||
| Accounts receivable | (11,324 | ) | (39,255 | ) | ||||
| Prepaid expenses and other assets | 200,730 | (954,925 | ) | |||||
| Income taxes receivable | (545,472 | ) | — | |||||
| Accounts payable and accrued expenses | (107,611 | ) | 1,448,519 | |||||
| Income taxes payable | (1,166,315 | ) | — | |||||
| Changes in assets and liabilities of discontinued operations | — | (951,873 | ) | |||||
| Net cash used in operating activities | (2,644,827 | ) | (727,487 | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Capital expenditures | — | (1,156 | ) | |||||
| Purchase of marketable securities | (210,210 | ) | (224,173 | ) | ||||
| Sale of marketable securities | 30,205,420 | 975,000 | ||||||
| Cash used in investing activities of discontinued operations | — | (477,655 | ) | |||||
| Net cash provided by investing activities | 29,995,210 | 272,016 | ||||||
| Cash Flows from Financing Activities: | ||||||||
| Share repurchases in connection with Tender Offer | (29,528,957 | ) | — | |||||
| Costs paid in connection with at-the-market offering | (87,568 | ) | — | |||||
| Other | 47,479 | — | ||||||
| Proceeds from stock option exercises | — | 38,267 | ||||||
| Cash used in financing activities of discontinued operations | — | (51,520 | ) | |||||
| Net cash used in financing activities | (29,569,046 | ) | (13,253 | ) | ||||
| Effect of exchange rates on cash | — | 9,950 | ||||||
| Decrease in cash, cash equivalents, and restricted cash | (2,218,663 | ) | (458,774 | ) | ||||
| Cash, cash equivalents, and restricted cash, beginning of period | 3,489,354 | 1,070,097 | ||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | 1,270,691 | $ | 611,323 | ||||
| Reconciliation to consolidated balance sheets: | ||||||||
| Cash and cash equivalents | $ | 270,691 | $ | 611,323 | ||||
| Escrow funds receivable | 1,000,000 | — | ||||||
| Cash, cash equivalents, and restricted cash | $ | 1,270,691 | $ | 611,323 | ||||
| Supplemental cash flow disclosures: | ||||||||
| Cash paid for interest | $ | — | $ | 17,239 | ||||
| Cash paid for income taxes | $ | 1,711,787 | $ | — | ||||
| Non-cash investing and financing activities: | ||||||||
| Reclassification of warrants from equity to liability | $ | 300,533 | $ | — | ||||
| Tender offer costs included in excise taxes payable | $ | 292,507 | $ | — | ||||
