FalconStor Software announces first quarter 2022 results

FalconStor Software announces first quarter 2022 results

New hybrid cloud reseller relationship with IBM and continued adoption of managed service providers

  • Developed a new strategic reseller relationship with IBM and created new joint solutions enabling hybrid cloud data migration, backup and recovery for IBM Power Virtual Server Cloud (IBM Power VS) customers and MSPs using IBM Cloud Sales reps and partner channels are resold

  • Added four new MSP partners for StorSafe secure backup-as-a-service solution, while existing MSP partners expanded their business to protect new customers and systems, consistent with FalconStor’s strategic shift to become the MSP to serve community

AUSTIN, TEXAS, May 11, 2022–(BUSINESS WIRE)–FalconStor Software, Inc. (OTCQB: FALC), a trusted leader in data protection modernizing disaster recovery and backup for the hybrid cloud world, today announced its first quarter 2022 financial results , which ended on March 31, 2022.

“Our strategic shift to recurring revenue-based hybrid cloud data protection solutions took a significant step forward during the quarter as we worked aggressively to secure a key reseller relationship with IBM,” said Todd Brooks, CEO of FalconStor. “IBM’s cloud push was a core part of its corporate strategy, as reflected in its first quarter 2022 results. As we announced earlier today, organizations can now take advantage of new hybrid hybrid cloud solutions from FalconStor and IBM. These solutions are especially important to the tens of thousands of businesses around the world using IBM i environments, as they now have the ability to securely backup and restore to the cloud, as well as their IBM i workloads with ongoing secure backup and Restore to IBM Power VS Cloud Migrate Base.

“Despite the importance of this step forward in our effort 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 extensions and legacy on-premises new subscriber revenue from during the quarter. We don’t take our poor first-quarter legacy results as a signal of accelerated legacy decline going forward,” Brooks said. “In fact, renewal rates for legacy recurring revenue were 86% and ARR were up 4% year over year for the quarter. As FalconStor continues to… reinventing, we must simultaneously focus on driving the growth of the new strategic hybrid cloud ARR and maintaining a solid legacy local revenue base.”

Financial results for the first quarter of 2022

  • Annually Recurring Revenue (ARR): 4% YoY growth

  • End Cash: $3.4 million compared to $2.0 million in the first quarter of fiscal 2021

  • Total sales: $2.0 million compared to $3.8 million in the first quarter of fiscal 2021

  • Total cost of earnings: $0.4 million compared to $0.6 million in the first quarter of fiscal 2021

  • Business expenses: $2.7 million compared to $3.2 million in the first quarter of fiscal 2021

  • GAAP Net Income (Loss): $(1.1) million, compared to $0.4 million in the first quarter of fiscal 2021

guidance

Given the results for the first quarter of 2022, we reduce the guidance for the full year as follows:

2022 guide

Guidance (in million US dollars)

Low

High

total revenue

13.0

14.0

Adjusted EBITDA *

2.0

2.7

%

16%

19%

net income

0.8

1.4

%

6%

10%

Rule of 40 (Revenue Growth % + Adjusted EBITDA %)

7

18

*Adjusted EBITDA sums non-operating and other income and expenses

Please click on this link to view the accompanying financial charts.

Information on conference calls and webcasts

WHO: Todd Brooks, Chief Executive Officer, FalconStor, and Vincent Sita, Chief Financial Officer, FalconStor

IF: Wednesday, May 11, 2022 4:00 p.m. Central; 5:00 p.m. East

To register for our Earnings Call, please click on the link below:

FALCONSTOR FIRST QUARTER 2022 FINANCIAL TELECONFERENCE AND PRESENTATION

Alternatively, you can copy and paste the following link into your web browser to register:

https://register.gotowebinar.com/register/4946665852509096204

Telephone conference:
Please select the following if you would like to interact with FalconStor hosts and ask them questions:
Toll Free: 877-568-4108
Access code: 399-172-649

Non-GAAP Financial Measures

The non-GAAP financial measures used in this press release were not prepared in accordance with generally accepted accounting principles and may differ from the non-GAAP financial measures of other companies. The Company’s management relies on these non-GAAP financial measures in making operating decisions because they provide meaningful additional information about the Company’s operating performance. In addition, these non-GAAP financial measures facilitate management’s internal comparisons to the Company’s historical operating results and comparisons to the operating results of its competitors. We are including these non-GAAP financial measures (which are intended to supplement, and not replace, their comparable GAAP measures) in this press release because we believe they are useful to investors as they provide greater transparency into enable the supplemental information to be used by management in making financial and operational decisions. The non-GAAP financial measures exclude (i) restructuring charges, (ii) the impact of our Series A Redeemable Convertible Preferred Stock and (iii) non-cash stock-based compensation fees and potential tax effects. For a reconciliation of our GAAP and non-GAAP financial results, see our GAAP to Non-GAAP Financial Measures Reconciliation presented in this press release.

About FalconStor Software

FalconStor is the trusted leader in data protection software modernizing disaster recovery and backup operations for the hybrid cloud world. The company enables enterprise customers and managed service providers to backup, migrate and protect their data while reducing data storage and long-term retention costs by up to 95%. More than 1,000 organizations and managed service providers worldwide use FalconStor as the foundation for their cloud-first data protection of the future. Our products are offered and supported through a global network of leading managed service providers, system integrators, resellers and original equipment manufacturers.

FalconStor and FalconStor Software are trademarks or registered trademarks of FalconStor Software, Inc. in the US and other countries. All other company and product names contained herein may be trademarks of their respective owners.

Links to websites or pages controlled by parties other than FalconStor are provided for the reader’s convenience and information only. FalconStor does not incorporate the information found at those links into this press release, nor does FalconStor represent or warrant that the information found at those links is complete or accurate. Use of the information obtained by following these links is at the reader’s own risk.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220511005312/en/

contacts

FalconStor Software, Inc.
Vincent Sita
CFO
vincent.sita@falconstor.com
investorrelations@falconstor.com

CONTACT US WORLDWIDE

Corporate Headquarters
501 Congress Avenue
suite 150
Austin, Texas 78701
Tel: +1.631.777.5188
salesinfo@falconstor.com

Europe headquarters
GERMANY
Landsberger Strasse 302
80687 Munich, Germany
salesemea@falconstor.com

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