Data Storage Corporation

Ladies and gentlemen, good morning and welcome to the Data Storage Corporation first quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Alexandra Schultz, Investor Relations. Please go ahead.

Thank you. Good morning, everyone, and welcome to Data Storage Corporation's 2024 First Quarter Business Update Conference Call. On the call with us this morning are Chuck Peluso, Chairman and Chief Executive Officer, and Chris Patagiotakos, Chief Financial Officer. The company issued a press release this morning containing its 2024 first quarter 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 Security Litigation Reform Act of 1995 and 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 believed, expects, anticipates, intends, projects, estimates, plans, or 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. Important factors that could cause actual results to differ materially from the company's expectations include but are not limited to 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 questionary statements included in the company's quarterly report on Form 10-Q for the quarter and in March 31, 2024, annual reports on Form 10-K and current reports on Form 8-K filed with the Securities and Exchange Commission. Any forward-looking statements speak 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. I'd now like to turn the call over to Chuck Peluso. Please go ahead, Chuck.

Thank you, Allie, and good morning, everyone. We continue to execute on our business growth strategy, including securing new contracts with high-profile clients as well as streamlining our operations for efficiency. As a result of our efforts, we witnessed a 20% increase in revenue to $8.2 million for the first quarter of 2024. Additionally, our gross profit increased 42% with the gross profit margin increasing to 36% from 30%, demonstrating the success and scalability of our business model. Importantly, we achieved profitability for the first quarter and believe as we continue to execute our strategic initiatives, we will continue to grow revenue and increase profitability. We began the year by consolidating our flagship subsidiary, InterCloud First. This strategic decision combines the unique strengths and expertise of the respective business units. positioning us to optimize operations, leverage technical teams, realize greater efficiencies, and improve internal resource allocation. As a result, we expect to enhance our cross-selling and up-selling opportunities among our customer networks, ensuring continued delivery of outstanding value. With the experienced leadership teams and combined organizations of both cloud-first and flagship, We are confident in our ability to establish a scalable organization primed for accelerated growth. Let's discuss these contracts that occurred in the first quarter. First, we expanded our contract with an existing multinational telecommunications company. This is a six-figure contract. We are very proud of our successful collaboration with this multinational corporation, spanning over 12 years. Beyond our existing equipment and services, we developed a custom solution. We are now implementing an innovative disaster recovery backup solution boasting advanced technology. This solution enhances their storage capacity while reducing tape usage and ensuring compliance across multiple countries. With installation moving smoothly, we eagerly anticipate the continued expansion of our collaboration with this organization. Furthermore, one of the largest insurance companies in the United States has chosen to migrate its data center to the cloud for one of its divisions. Alongside the cloud migration, we will be delivering hosting and managed services, incorporating a comprehensive suite of advanced security solutions to uphold the utmost standards of data protection and compliance. Following an assessment of numerous providers, the insurance company opted for our services for its critical undertaking. The decision was influenced by our company's exceptional reliable data circuits and proven track record in delivering data management and cloud services to Fortune 500 companies and top-tier financial firms. We believe this contract underscores our ability to address the requirements of prominent enterprises. and our commitment to advancing technology that fosters our clients' growth. Being selected illustrates the significance of our offering and the importance of robust security measures in today's digitally driven and risk-laden business landscape. We are confident that our solutions will deliver exceptional results and pave the way for expanding our solutions across additional divisions and geographies in the future. As I discussed in the last call, part of our strategy is international expansion. There is demand for our solutions globally, and we are proud to report the opening of Cloud First London office in the second quarter of this year. This strategic expansion marks a significant milestone in our strategy to serve a global clientele and further Cloud First presence in key global markets while increasing our international footprint and further supporting our current multinational clients. In addition, we recently moved to new and expanded headquarters in Melville, New York. We're excited about our new space, which we increased square footage by nearly 40 percent without a substantial rise in expenses. These new offices are designed to bolster our growth, encompassing accounting, technical teams, sales, and marketing initiatives. Further validation of the demand for our solutions is the continued increase in visitors to our website, which was over 43,000 in the first quarter of this year. We also continue to support our nurture list, which contains thousands of organizations interested in potential implementation and education of our services. We intend to take advantage of these avenues to secure new contracts and increase our footprint within the markets. Currently, we serve more than 450 companies and strive to expand this impressive client base. Data center firms specializing in window-based infrastructure platforms rely on us for our expertise in the IBM platform. Partnering with these infrastructure firms offer a chance to broaden our distribution channels, leverage our talented staff, and optimize our deployed assets. And before I turn this over to Chris for review of our financials, I'd like to discuss our new board members. First, Cliff Stein returned to our board of directors. Cliff is a seasoned entrepreneur, adept executive with over 30 years' experience in establishing and managing a thriving real estate advisory firm. His background as a skilled attorney further enriches his expertise. We are confident that Cliff's skill set will provide invaluable guidance to the company as we pursue growth, whether through organic means or strategic acquisitions. Having previously served on the board and contributed to numerous strategic growth initiatives, we are excited about his renewed engagement. In addition, we appointed Nancy Stallone and Ewayne Mitchell. Nancy's impressive background in corporate finance, auditing, accounting will be instrumental as we pursue strategic growth initiatives, including international expansion and exploring potential acquisitions. Duane Mitchell's legal proficiency, combined with his expertise in data privacy, cybersecurity, and technology, will greatly enhance our board and support our growth. We remain committed to upholding the highest standards of corporate governance and look forward to their contributions as we advance our business model. Overall, with continued execution of our strategic plan, we achieved profitability for the first quarter, secured new and expanded contracts, increased our penetration with the domestic market, and actively expanded into international markets. We are also exploring potential acquisitions that would assist and support our growth, and more importantly, complement and improve our current operations. We believe that our company has reached a pivotal moment. We are exceptionally well positioned to enter key international markets, leverage upselling and cross-selling potentials for our offerings, and secure additional subscription-based contracts. These strategic initiatives set the stage for long-term profitability. At the same time, we've carefully managed our expenses and have preserved a strong balance sheet with over $11.9 million in cash and marketable securities. No long-term debt as of the end of the quarter, which provides us the flexibility to deploy capital efficiently and effectively to support our long-term growth and drive value to our shareholders. With that, I'd like to turn this over to Chris Panagiotakos, our CFO to discuss our financials. Please go ahead, Chris.