FalconStor Software Announces First Quarter 2022 Results

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

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

“Despite the importance of this breakthrough in our efforts to reinvent FalconStor, our aggressive focus on advancing critical hybrid cloud relationships and our efforts to realign our sales team accordingly has negatively impacted our legacy on-premises extensions. and our on-premises new customer acquisition revenue during the quarter. We don’t view our poor legacy results in the first quarter as a signal of accelerating legacy declines going forward,” Brooks said. “In fact , legacy recurring revenue renewal rates were 86%, and ARR increased 4% year-over-year in the quarter.As we continue to reinvent FalconStor, we must simultaneously focus on growing our business. a new ARR strategic hybrid cloud and on maintaining a strong on-premises revenue base.

First quarter 2022 financial results

  • Annual Recurring Income (ARR): 4% year-over-year growth
  • End species: $3.4 million, compared to $2.0 million in the first quarter of fiscal 2021
  • Total revenue: $2.0 million, compared to $3.8 million in the first quarter of fiscal 2021
  • Total revenue cost: $0.4 million, compared to $0.6 million in the first quarter of fiscal 2021
  • Total operating expenses: $2.7 million, compared to $3.2 million in the first quarter of fiscal 2021
  • Net profit (loss) under GAAP: ($1.1) million, compared to $0.4 million in the first quarter of fiscal 2021

Orientation

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

Orientation 2022

Orientation (millions of dollars)

Low

High

Total revenue

13.0

14.0

Adjusted EBITDA *

2.0

2.7

%

16%

19%

Net revenue

0.8

1.4

%

6%

ten%

Rule of 40 (% revenue growth + % adjusted EBITDA)

7

18

*Adjusted EBITDA adds back non-operating and other expenses and income

Please click here link to see the attached financial tables.

Conference Call and Webcast Information

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

WHEN: Wednesday, May 11, 2022, 4:00 p.m. Central Time; 5:00 p.m. Eastern Time

To register for our call for results, please click on the following link:

FALCONSTOR FIRST QUARTER 2022 CONFERENCE CALL AND FINANCIAL PRESENTATION

You can also copy and paste the following link into your web browser to register:

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

Conference call:

Please dial the following number if you wish to interact and ask questions of FalconStor hosts:

Toll Free: 877-568-4108

Access code: 399-172-649

Non-GAAP Financial Measures

The non-GAAP financial measures used in this press release are not prepared in accordance with generally accepted accounting principles and may differ from non-GAAP financial measures used by other companies. The Company’s management refers to these non-GAAP financial measures in making operating decisions because they provide meaningful supplemental information regarding the Company’s operating performance. In addition, these non-GAAP financial measures facilitate management’s internal comparisons with the Company’s historical operating results and comparisons with the operating results of competitors. We include these non-GAAP financial measures (which should be considered supplemental to and not a substitute for their comparable GAAP measures) in this press release because we believe they are helpful to investors by providing greater transparency in additional information. used by management in financial and operational decisions. Non-GAAP financial measures exclude (i) restructuring costs, (ii) the effects of our Series A convertible redeemable preferred stock and (iii) non-cash stock-based compensation expense and any potential tax effects . For a reconciliation of our GAAP and non-GAAP financial results, please refer to our reconciliation of GAAP and non-GAAP financial measures presented in this release.

About FalconStor Software

FalconStor is the leader in trusted data protection software that modernizes disaster recovery and backup operations for the hybrid cloud world. The company enables enterprise customers and managed service providers to secure, migrate and protect their data while reducing long-term data storage and retention costs by up to 95%. More than 1,000 organizations and managed service providers worldwide are adopting FalconStor as the foundation of their cloud data protection future. Our products are offered and supported by a global network of 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 United States 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 solely for the convenience and information of the reader. FalconStor does not incorporate the information found at such links into this release, and FalconStor does not represent or warrant that the information found at such links is complete or accurate. Use of information obtained by following these links is at the reader’s own risk.

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