Data Storage Corporation

Good day, ladies and gentlemen, and welcome to the Data Storage Corporation Fiscal Year 2021 Earnings Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, David Waldman, Investor Relations. Sir, the floor is yours.

Thank you, Holly, and good morning, everyone, and welcome to Data Storage Corporation's fourth quarter and year-end 2021 business update conference call. On the call with us this morning are Chuck Beluso, Chairman and CEO, and Chris Panagiotakis, Chief Financial Officer. The company issued a press release this morning containing 2021 financial results, which is also posted on the company's website. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020. Before we begin, I'd like to remind listeners that this conference call 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 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. Important factors that could cause actual results differ materially from the company's expectations include but are not limited to the company's ability to leverage the scalability and performance of flagship solutions, the company's ability to benefit from the IBM cloud migration underway, the company's ability to position itself for future profitability, and the company's ability to maintain its NASDAQ listing. These risks should not be construed as exhaustive and should be read together with other cautionary statements included in the company's annual report on Form 10-K for the year ended December 31, 2021, and quarterly reports on Form 10-Q and current reports on Form 8-K, followed with the Securities and Exchange Commission. Any forward-looking statement speaks only of the date on which it was initially made and 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. I'd now like to turn the call over to Chuck Peluso. Please go ahead, Chuck.

Thank you, David. Good morning, everyone. I'm pleased to report that 2021 was a transformational year for the company. Among the accomplishments, we uplisted to NASDAQ, completed the acquisition of Flagship, grew our customer base, and expanded both domestically and internationally. I'm pleased to report we achieved revenue growth of approximately 97%, 60% for the fourth quarter and full year, respectively. We also achieved positive adjusted EBITDA for both the fourth quarter and the full year. As a result, we are well positioned heading into 2022. We are already realizing the synergies of the flagship acquisition, which complements our overall business strategy and expands our offerings with an impressive roster of Tier 1 customers. Since closing the acquisition, we are already witnessing increased cross-selling activity and were awarded a multimillion-dollar contract with one of the nation's premier professional sports teams. We expect to recognize this sale as revenue in the first quarter of 2022. We have increased our outstanding proposals to over $20 million in total contract value, which is an historic high for the company. Our contract renewal rate is 94%, which further validates the quality of our services and customer loyalty. We have placed a heavy emphasis on growing subscription sales. which provide long-term, high-margin revenue streams. In particular, we are seeing increased interest in our digital infrastructure, data integrity, and disaster recovery services. It is clear that these services are more important than ever, given the heightened risk with cybersecurity from foreign nations and rogue actors. It's important to point out that we're protecting our clients' data and providing secure hosting environments for over 15 years. This is not new to us, but current events are only heightening awareness of the need for these services, and we can offer our customers a complete end-to-end security and data recovery offering. As I have always stated, not all attacks or national disasters can be avoided, and it's crucial that organizations are prepared. Even though companies have firewalls and other protective measures, just like having a smoke detector in your home, what do you do when the fire starts? You need to have a fire extinguisher for rapid response. Companies need to back up data off-site so information can be recovered, restored, and available within an hour or hours. Additionally, we provide critical security features that protect information, data privacy, and adhere to compliance standards. As an example, we recently partnered with Precisely, a global leader in data integrity and cybersecurity software solutions. the addition of precisely expanded solutions within a cloud environment that allows us to offer an even more robust full-feature offering that addresses the most common IT security exposure issues, including ransomware. Our customer base now includes more than 400 customers and 30 active distribution companies. Without question, we are successfully executing on our strategy to establish data storage as a leading provider of business continuity solutions, ranging from managed cloud infrastructure to cybersecurity, to direct internet access, VoIP integrated with Microsoft Teams, and an array of managed services. And with the acquisition of flagship solutions, we are positioned as a leading one-stop provider for multi-cloud IT solutions. The time is now. The IBM on-premise service market has only begun to transition to the cloud in the last few years. Over 1 million plus virtual IBM power servers, only 50% of these servers have begun to migrate to the cloud. We believe this represents a multi-billion dollar global addressable market, and we are ideally positioned to capitalize on this trend. We are also expanding domestically and internationally with the opening of operations in Austin, Texas earlier this year as well as in Canada through the addition of two new data centers that went live in our partnership with AbleOne. The partnership with AbleOne fills an important need for cloud services in Canada among businesses that run IBM power systems on IBM i, AIX, and Linux operating systems. So to wrap up, we are growing rapidly. We have completed meaningful acquisitions, entered into strategic partnerships that provide a more inclusive feature and services to our clients, demonstrating our commitment to offering customers the most cutting edge and comprehensive technologies. We are also boosting our infrastructure, increasing sales, our marketing initiatives, as well as investing in personnel and infrastructure to support our continued growth. As an example, we added business development team members as well as a director of marketing. We are already seeing the benefits from these additions. We have also added technical personnel to support our anticipated growth. In addition to personnel, we've invested in expanding our cloud infrastructure, storage, network equipment, and computer power with IBM Power Service. We have a strong balance sheet with over $12 million of cash as of December 31st 2021, enabling us to execute on our growth strategy, as well as explore opportunistic creative acquisitions that will further enhance our offering and geographic presence. As a result of our strong balance sheet, we have no need to raise capital, and would not do so at the current levels. We are also very proud of our accomplishments we achieved in 2021, and we believe the outlook for business is brighter than ever. We have a strong team. robust contract pipeline with upselling and cross-selling opportunities with limited competition. To date, we have completed many acquisitions and entered into strategic partnerships that provide us with more inclusive features and services for our clients. As a result, we believe we are well positioned for growth and improved profitability, given our highly scalable business model, which we expect to drive significant value for shareholders in the years to come. I'd like to turn the call over to Chris Panagiotakis, our CFO, to discuss the year-end financials. Please go ahead, Chris.