Data Storage Corporation (DTST): Business Model Canvas [Dec-2025 Updated]

You're looking at a company that just hit the reset button, and honestly, it's a smart move given the current tech landscape. After selling CloudFirst for about $40 million, the management at Data Storage Corporation is pivoting hard into the hot areas: GPU Infrastructure-as-a-Service, AI, and cybersecurity. They are sitting on roughly $45.8 million in cash as of Q3 2025, which is the fuel for their strategic acquisitions and growing the existing Nexxis telecom business. This Business Model Canvas lays out exactly how they plan to balance that stable recurring revenue from Nexxis with the massive capital expenditure needed for this new high-performance infrastructure. Dive in below to see the nine blocks that define this post-divestiture strategy.

Data Storage Corporation (DTST) - Canvas Business Model: Key Partnerships

You're looking at Data Storage Corporation (DTST) post-divestiture, which means the partnership landscape is actively shifting toward new strategic investments as of late 2025. The key event driving this is the completed sale of the CloudFirst subsidiary on September 11, 2025, which generated approximately $40 million in gross proceeds, resulting in estimated net proceeds of $24 million after fees, taxes, and adjustments. This cash position, bolstered by the $45.8 million in cash and marketable securities as of September 30, 2025, is now earmarked for new partnerships and acquisitions in high-growth areas.

The existing operational partnerships, though tied to the divested CloudFirst entity, provide a template for the connectivity and infrastructure backbone Data Storage Corporation will continue to rely on or replicate for its new focus areas.

Strategic alliances for GPU IaaS and AI-driven software

Following the CloudFirst sale, Data Storage Corporation is explicitly repositioning to invest in and support businesses focused on GPU Infrastructure-as-a-Service (IaaS) and AI-driven software applications. While specific new alliances for these verticals weren't detailed in the Q3 2025 updates, the strategic intent is clear: to build durable competitive advantages in these sectors. The company's mission is to build sustainable, recurring revenue streams in these areas.

Megaport for private cloud connectivity to hyperscalers

CloudFirst Europe had expanded its partnership with Megaport into the UK prior to the sale, leveraging Megaport's Network as a Service platform, 'Direct Connect.' This partnership was critical for ensuring network traffic never touches the public internet, eliminating bottlenecks for their IBMi Power Hosting and Infrastructure as a Service offerings. This established a model for secure, high-performance connectivity to hyperscalers like AWS, Microsoft Azure, and Google Cloud, which is foundational for any future GPU IaaS strategy.

Pulsant for UK edge data center infrastructure

The strategic collaboration with Pulsant, described as the most geographically diverse UK provider of edge infrastructure and data centers, was key to CloudFirst's international strategy. This partnership extended the CloudFirst platform across Pulsant facilities in the UK, aiming to serve regulated and enterprise clients. Before the sale, the CloudFirst platform operated across 6 data centers in 3 countries, serving over 400 clients.

Here's a look at the financial context surrounding the strategic shift that dictates future partnership needs:

Metric	Value (as of late 2025)	Context
CloudFirst Gross Sale Proceeds	$40,000,000	Transaction price for the subsidiary sale.
Estimated Net Proceeds from Sale	$24,000,000	Amount remaining after fees, taxes, and commissions.
Cash & Marketable Securities (Q3 End)	$45,800,000	Total liquidity post-sale closing (September 30, 2025).
Q3 2025 Continuing Operations Revenue	$417,000	Revenue from the remaining Nexxis subsidiary for the quarter ended September 30, 2025.
CloudFirst Q2 2025 EBITDA	$1,000,000	Earnings generated by the divested business in Q2 2025.

Technology partners for cybersecurity solutions

Data Storage Corporation maintains a focus on cybersecurity as a core area for future investment and support post-divestiture. While specific new technology partners for this are not quantified, the company's existing portfolio includes Endpoint Protection and Security Intelligence. The need for secure and resilient IT infrastructure remains a priority for their remaining clients.

Investment banks for M&A pipeline defintely

The M&A pipeline is now a primary focus for capital deployment, with 15% of the cash on hand (post-tender offer) earmarked for acquisitions and expansion. The role of investment banks is confirmed by the fact that commissions were paid out from the CloudFirst sale proceeds. The company is establishing a special committee to oversee the tender offer and buyback process, aiming for full transparency in capital allocation. The strategy is to leverage the financial strength from the sale to execute targeted acquisitions in the identified high-growth sectors.

• Focus areas for future M&A investment: GPU IaaS, AI-driven software, and cybersecurity.
• The company plans to maintain a disciplined approach to capital allocation.
• The remaining Nexxis subsidiary provides a stable, recurring revenue base to support strategic objectives.

Data Storage Corporation (DTST) - Canvas Business Model: Key Activities

You're looking at Data Storage Corporation (DTST) right after a major pivot, so the key activities reflect a clear shift in focus following a significant transaction. The numbers we have are from the third quarter of 2025, which really sets the stage for what they are doing now.

Identifying and executing strategic acquisitions (M&A)

A primary activity is deploying capital from the recent divestiture into new, high-growth areas. Data Storage Corporation (DTST) completed the sale of its CloudFirst subsidiary for $40 million. This sale was transformative, providing a solid financial foundation to redeploy capital. The company is actively exploring strategic acquisitions in emerging sectors like GPU-based computing, AI-enabled infrastructure, and cybersecurity.

Operating and growing the Nexxis telecommunications subsidiary

The Nexxis subsidiary is now the core of the continuing operations, providing a stable, recurring revenue base. You can see its direct financial contribution in the latest figures:

Metric	Period Ended September 30, 2025	Change YoY
Sales from Continuing Operations (3 Months)	$417,000	Up 28.2% (or $92,000)
Sales from Continuing Operations (9 Months)	$1.1 million	Up 17.6% (or approximately $159,000)

The growth in this segment is directly attributed to an expanding customer base for its voice and data solutions.

Developing and deploying GPU Infrastructure-as-a-Service

While specific revenue figures for this area aren't yet public, a key activity is the strategic investment into GPU Infrastructure-as-a-Service (IaaS). This is a planned deployment area, leveraging the financial strength gained from the CloudFirst sale to build durable competitive advantages in this high-growth sector.

Prudent capital allocation and shareholder tender offer

Capital management is critical post-sale. Data Storage Corporation (DTST) ended Q3 2025 with cash, cash equivalents, and marketable securities totaling approximately $45.8 million, a significant increase from $12.3 million at December 31, 2024. The Board authorized a tender offer to repurchase up to 85% of outstanding common stock, using 85% of the cash on hand at the commencement of the offer. This leaves 15% of the cash reserved specifically for acquisitions, innovation, and expansion efforts. The company reported net income attributable to common shareholders of $16.8 million for the three months ended September 30, 2025, largely due to the gain on discontinued operations from the sale.

Building AI-driven software applications

Alongside GPU IaaS, Data Storage Corporation (DTST) is focused on building AI-driven software applications as part of its repositioning. This activity is part of the plan to redeploy capital toward initiatives offering higher returns and long-term sustainability. The operational expenses supporting this shift are visible in the SG&A figures:

• Selling, general and administrative expenses for the three months ended September 30, 2025, were $1.3 million.
• Selling, general and administrative expenses for the nine months ended September 30, 2025, were $3.2 million.

The company is committed to sound execution and thoughtful innovation in these new technology verticals.

Finance: draft 13-week cash view by Friday.

Data Storage Corporation (DTST) - Canvas Business Model: Key Resources

You're looking at the core assets Data Storage Corporation (DTST) is relying on as it executes its post-divestiture strategy, which management calls DSC 2.0. This is the foundation they are using to pivot into high-growth areas like GPU IaaS, AI software, and cybersecurity.

Financial Strength and Liquidity

The most immediate and tangible resource is the balance sheet strength following the sale of the CloudFirst subsidiary on September 11, 2025. This transaction provided a solid financial base for the next phase.

Financial Metric	Value as of September 30, 2025	Comparison Point
Cash and Marketable Securities (Approximate)	$45.8 million	$12.3 million at December 31, 2024
Marketable Securities (Specific)	$45,471,979	$11,261,006 (Marketable securities) at prior period
Net Income (Q3 2025)	$16.8 million	Primarily driven by the gain on discontinued operations

The company ended Q3 2025 with approximately $45.8 million in cash, cash equivalents, and marketable securities. This is a significant jump from the $12.3 million held at the end of 2024.

Nexxis Subsidiary's Stable Recurring Revenue Base

The Nexxis subsidiary represents the continuing operations and the source of the company's current recurring revenue stream, which management intends to support its broader objectives.

• Q3 2025 Sales from Continuing Operations (Nexxis): $417,000
• Year-over-Year Q3 Sales Increase: 28.2%
• Sales for 9 Months Ended September 30, 2025: $1.1 million
• Q3 2025 Gross Profit: $198,499
• Q3 2025 Gross Margin: 47.6%

To be fair, this continuing business segment posted a loss from operations of $1,098,475 for the third quarter of 2025, so the current financial strength is heavily weighted by the divestiture proceeds.

Technical Expertise and Infrastructure Competencies

Data Storage Corporation (DTST) maintains specific technical knowledge that underpins its past and future service offerings. This expertise is crucial for any new investments in high-growth technology sectors.

• Core Competency in IBM Power systems, including IBMi and AIX, historically.
• Expertise in cloud infrastructure, IT modernization, and data migration services.
• Multi-cloud interoperability knowledge across AWS, Microsoft Azure, and Google Cloud platforms.
• The former CloudFirst platform was built on IBM Power Cloud infrastructure.

Management and Governance

The retained leadership team is positioned to execute the strategic pivot, referred to as DSC 2.0. You have Chairman and CEO Chuck Piluso, and CFO and Treasurer Chris Panagiotakos, guiding the redeployment of capital. Furthermore, the Board of Directors established a special committee to oversee the planned tender offer and buyback process, ensuring alignment with shareholder interest.

Public Listing and Capital Markets Access

The company's status as a publicly traded entity on the Nasdaq exchange (Nasdaq: DTST) provides inherent access to public capital markets, which is now being leveraged through a planned capital return event. The Board authorized a tender offer to repurchase up to 85% of outstanding common stock, using 85% of the cash on hand post-sale, which is a direct action utilizing this capital market access and financial strength.

Finance: draft 13-week cash view by Friday.

Data Storage Corporation (DTST) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose Data Storage Corporation (DTST) right now, especially after the big strategic shift late in 2025. These are the tangible benefits we deliver.

Access to high-performance GPU IaaS for AI workloads

The value here is enabling next-generation computing. Data Storage Corporation is actively planning to redeploy capital into this area following the CloudFirst divestiture. The focus is on infrastructure supporting artificial intelligence-enabled software and graphics processing unit technologies. This is a key area for future investment post-September 2025.

Mission-critical data protection and disaster recovery

This value proposition centers on continuity and security for essential systems. The company has historically operated in this space, maintaining expertise in complex, regulated enterprise IT environments. This capability remains a core competency alongside the ongoing Nexxis operations.

Stable, recurring voice/data telecommunications services (Nexxis)

The Nexxis subsidiary provides a base of stable, recurring revenue. For the three months ended September 30, 2025, sales from continuing operations, which includes Nexxis, were $417,000. This segment showed growth, with sales from continuing operations for the nine months ended September 30, 2025, reaching $1.1 million, an increase of approximately 17.6% from the prior year period's $900,000. The company continues to operate Nexxis, Inc. as a source of recurring revenue.

Expertise in complex, regulated enterprise IT environments

This speaks to the trust built by managing sensitive infrastructure. The value is the reduced operational risk for clients operating under strict compliance mandates. This expertise supports the remaining core business functions.

Unlocking shareholder value via the $40 million CloudFirst sale

The sale of the CloudFirst business, which closed on September 11, 2025, was a defining transaction. This move was explicitly designed to unlock shareholder value and simplify the structure. The transaction generated approximately $40 million in gross proceeds, with estimated net proceeds of $24 million after fees and adjustments. This provided a solid financial foundation for the future.

Here's the quick math on the financial positioning around the time of the Q3 2025 reporting:

Financial Metric	Amount/Value	Date/Period
CloudFirst Gross Sale Proceeds	$40 million	September 2025
CloudFirst Estimated Net Proceeds	$24 million	September 2025
Net Income Attributable to Common Shareholders	$16.8 million	3 Months Ended Sep 30, 2025
Cash and Marketable Securities	Approx. $45.8 million	September 30, 2025
Revenue from Continuing Operations (Nexxis)	$417,000	3 Months Ended Sep 30, 2025
DTST Market Capitalization (Post-Announcement)	Approx. $29.5 million	November 2025

The company plans to use these net proceeds to support targeted acquisitions and investments in AI-enabled software, GPU technologies, and cybersecurity. The Q3 2025 Earnings Per Share (EPS) was -$0.02, which Beat the analyst expectation of -$0.14 by 85.71%.

The core value drivers remaining for Data Storage Corporation as of late 2025 include:

• Access to capital for AI and GPU infrastructure investment.
• Stable, recurring revenue from the Nexxis subsidiary.
• A strong liquidity position with cash and marketable securities of approximately $45.8 million as of September 30, 2025.
• The strategic benefit of the completed divestiture, which simplified the structure.

Finance: draft 13-week cash view by Friday.

Data Storage Corporation (DTST) - Canvas Business Model: Customer Relationships

You're looking at how Data Storage Corporation (DTST) manages its connections with clients as of late 2025, right after a major strategic shift. The numbers tell a story of a core business that is sticky, even as the company pivots its future focus.

Dedicated account management for enterprise clients

The foundation of Data Storage Corporation (DTST)'s relationship strategy centers on its established enterprise base. This segment is characterized by deep, long-standing engagements, evidenced by the fact that the company serves over 400 clients and manages more than 600 contracts across its operations. These relationships include major entities like Fortune 500 companies, government agencies, educational institutions, and healthcare organizations. The growth in the Nexxis Voice and Data Solutions business, which saw a 17.6% increase in sales for the nine months ended September 30, 2025, suggests that account managers are successfully expanding service penetration within these existing, high-value accounts.

Metric	Value (as of 9M 2025 / Q2 2025)
Total Clients Served	Over 400
Total Contracts Managed	Over 600
Nexxis Voice & Data Sales Growth (9M 2025 YoY)	17.6%
Q2 2025 Total Revenue	$5.1 million

Long-term infrastructure partnerships for mission-critical systems

Data Storage Corporation (DTST) builds relationships on the criticality of the systems it supports, focusing on business continuity and modernization. The core Cloud Infrastructure and Disaster Recovery services, which grew 14% year-over-year in Q1 2025, underscore the mission-critical nature of these partnerships. Furthermore, the company recently completed a major infrastructure upgrade for a long-time enterprise client in the food distribution sector, migrating legacy systems to high-performance IBM processors. The geographic expansion, including a strategic partnership with Pulsant in the U.K., is explicitly aimed at serving regulated and enterprise clients more effectively throughout the U.K. and Europe.

High-touch, 24x7 technical support for cloud services

The operational commitment supporting these infrastructure partnerships is a high-touch service model. Data Storage Corporation (DTST) owns its cloud platform, built on IBM Power servers, and manages this platform with the Company's 24x7 technical team. This direct management capability is key to maintaining service levels for clients relying on multi-cloud hosting and disaster recovery solutions connected to AWS, Microsoft Azure, and Google Cloud.

Direct sales team for Nexxis and new technology offerings

The push into new technology and specific solution lines is managed through a dedicated sales approach. The growth in Nexxis Voice and Data Solutions is cited as a primary driver for revenue increases in the nine months ended September 30, 2025. Post-divestiture, the strategic direction is to redeploy capital toward high-growth areas, which will require direct engagement from the sales force. These new target areas include:

• GPU Infrastructure-as-a-Service (IaaS)
• AI-driven software applications
• Cybersecurity
• Voice/data telecommunications

Investor relations focused on transparency post-divestiture

Following the transformative sale of its CloudFirst subsidiary, investor relationships are centered on communicating a clear, refocused strategy and capital allocation plan. The completion of the CloudFirst sale unlocked significant shareholder value, providing a solid financial foundation. The cash position as of September 30, 2025, stood at approximately $45.8 million. The immediate plan involved a tender offer to repurchase up to 85% of outstanding common stock using 85% of cash on hand, including the net proceeds of approximately $24 million from the sale. The management team communicating this strategy post-transaction included the Chairman and CEO, Chuck Piluso, the CFO, Chris Panagiotakos, and the Chief Administrative Officer, Wendy Schmitzi, supported by a newly forming Board of Advisors.

The net income for the three months ended September 30, 2025, was $16.8 million, a figure heavily influenced by the gain recognized on discontinued operations from the divestiture.

Data Storage Corporation (DTST) - Canvas Business Model: Channels

You're looking at how Data Storage Corporation (DTST) gets its value proposition to customers as of late 2025, post-CloudFirst divestiture. The channels are clearly shifting to support the new focus on high-growth tech like AI and cybersecurity, while keeping the stable revenue from the remaining infrastructure assets.

Direct sales force targeting enterprise and regulated sectors

The direct sales effort, post-CloudFirst sale, is now heavily concentrated on the continuing operations, which management has highlighted as supporting high-growth areas. The company's Q3 2025 results show that sales from continuing operations, which includes the Nexxis subsidiary, were $417,000 for the three months ended September 30, 2025. This represents a significant focus area for the remaining direct sales team, targeting enterprise needs in areas like GPU Infrastructure-as-a-Service (IaaS), AI-driven software applications, and cybersecurity. The company is aiming for disciplined execution in these new verticals. The sales team is also responsible for driving growth in the voice and data telecommunications solutions under the Nexxis umbrella. For the nine months ended September 30, 2025, sales from continuing operations reached $1.1 million, an increase of 17.6% over the same period last year, primarily driven by an expanding customer base in those Nexus voice and data solutions. This growth suggests the direct sales force is successfully penetrating its target segments within the continuing business.

Partner ecosystem (e.g., Megaport) for hybrid cloud delivery

While specific Data Storage Corporation partner revenue isn't broken out, the strategic pivot toward hybrid cloud delivery, AI infrastructure, and cybersecurity suggests reliance on established connectivity partners. To give you a sense of the environment Data Storage Corporation is operating in, a key connectivity partner like Megaport reported record Annual Recurring Revenue (ARR) of $243.8M in their fiscal year ending June 2025, which was up 20% year-over-year. Furthermore, partner commissions represented 12% of Megaport's total revenue in FY25, indicating a mature and important channel for infrastructure providers. Data Storage Corporation's focus on IaaS and hybrid cloud means leveraging these ecosystems for predictable, low-latency access to hyperscalers like AWS, Azure, and Google Cloud is a critical channel strategy. You can bet they are building out private paths for their enterprise clients.

Corporate website and investor communications for new strategy

The corporate website, www.dtst.com, is now the primary channel for communicating the company's transformation, which is arguably more important than ever given the recent strategic overhaul. The channel for investor relations is currently dominated by the narrative surrounding the transformative sale of CloudFirst Technologies Corporation, which closed on September 11, 2025. The company ended Q3 2025 with cash, cash equivalents, and marketable securities of approximately $45.8 million, a massive increase from $12.3 million at December 31, 2024, largely due to the sale. The Board authorized a tender offer to repurchase up to 85% of outstanding common stock using 85% of available cash, including the net proceeds of approximately $24 million from the sale. The website is the distribution point for the tender offer documents and the new strategic direction, which includes a planned corporate rebranding to align with the focus on AI and cybersecurity. The net income for the three months ended September 30, 2025, was $16.8 million, a huge jump from $122,000 the prior year, almost entirely due to the gain on discontinued operations from this channel of communication and execution.

Telecommunications network infrastructure (Nexxis)

The Nexxis subsidiary remains a core asset, providing a stable, recurring revenue base that supports the broader strategic objectives. Sales from this continuing operation grew its revenue by 28.2% year-over-year for the three months ending September 30, 2025, bringing in $417,000. For the nine-month period ending September 30, 2025, Nexxis-related sales contributed to the $1.1 million in continuing operations revenue. This segment is explicitly mentioned as a focus for future leveraging of expertise in data and communications infrastructure. The broader Telecom Network Infrastructure Market size is projected to reach $102.93 billion in 2025, signaling a healthy market for Data Storage Corporation's voice/data solutions. Here's the quick math: the 17.6% growth in continuing operations revenue over nine months shows this channel is performing well as a foundation.

Targeted M&A outreach for new platform acquisitions

This channel is currently focused on deployment of capital rather than immediate revenue generation, but it is a key future growth driver. Management stated they are exploring strategic acquisitions in emerging areas like GPU-based computing, AI-enabled infrastructure, and cybersecurity. The financial strength post-CloudFirst sale provides the necessary war chest; the company retained 15% of the cash post-buyback for acquisitions, innovation, and expansion. The Q3 2025 cash position of approximately $45.8 million is the resource base for this outreach. What this estimate hides is the specific deal flow or valuation multiples Data Storage Corporation is targeting, but the intent is clear: use financial strength to buy recurring revenue streams in high-growth tech. The company ended Q3 2025 with $16.1 million in net income for the nine-month period, which, excluding the sale gain, provides a baseline for sustainable investment capacity.

Channel Metric/Activity	Data Point (Latest Available 2025)	Period/Context
Sales from Continuing Operations (Nexxis)	$417,000	3 Months Ended September 30, 2025
Sales from Continuing Operations (Nexus)	$1.1 million	9 Months Ended September 30, 2025
Growth in Nexus Sales (YoY)	17.6%	9 Months Ended September 30, 2025
Cash & Marketable Securities (Post-Sale)	$45.8 million	September 30, 2025
Net Proceeds from CloudFirst Sale	Approx. $24 million	Used for Capital Return/M&A
Capital Allocation for Acquisitions	15% of cash retained post-buyback	Post-Transaction Strategy

The shift is defintely toward high-value, recurring revenue channels, using the balance sheet strength gained from the asset sale to fuel the M&A outreach. Finance: draft 13-week cash view by Friday.

Data Storage Corporation (DTST) - Canvas Business Model: Customer Segments

You're looking at the core groups Data Storage Corporation (DTST) targets for its recurring revenue services, which is key given the shift away from one-time equipment sales. The company ended the first half of 2025 with total sales of $13.2 million, showing a strategic pivot toward stable, high-margin services.

Enterprise clients with mission-critical systems

Data Storage Corporation (DTST) serves a base of over 400+ clients across its global footprint of 10 data centers as of the first quarter of 2025. These clients are typically enterprises whose operations cannot tolerate downtime, making disaster recovery and robust cloud infrastructure essential value propositions. The company highlights its expertise in complex IT transformations for these large entities, such as a recent infrastructure upgrade for a food distribution sector client involving migration to high-performance IBM processors.

Financial services, healthcare, and public sector organizations

While Data Storage Corporation (DTST) does not break out revenue by these specific verticals in the latest reports, these sectors are inherently heavy users of the resilient infrastructure Data Storage Corporation (DTST) provides. For context in the broader market, organizations in finance, healthcare, and government are known to commonly use IBM Power servers, which Data Storage Corporation (DTST) specializes in hosting.

Companies requiring specialized IBM Power cloud hosting

A specific focus is on clients needing specialized hosting for their IBM Power workloads. Data Storage Corporation (DTST) extended its IBM Power-based cloud offerings across the U.K. and Europe through a partnership with Pulsant, a U.K. edge data center provider, to better serve regulated and enterprise clients. In the broader ecosystem, as of 2025, there are 426 verified companies using IBM Power servers, which represents the potential market for this specialized service. The company's second quarter of 2025 revenue growth was supported by these subscription-based cloud services.

Businesses needing voice/data telecommunications (Nexxis)

The Nexxis services are a distinct customer segment driving growth. In the second quarter of 2025, revenue from Nexxis services increased by approximately $48,000, which translated to a year-over-year growth rate of about 17.3% for that specific service line. This segment, along with core cloud infrastructure, was a primary driver of the 4.8% year-over-year revenue increase to $5.1 million in Q2 2025.

High-growth AI and cybersecurity technology targets for M&A

This segment is defined by Data Storage Corporation (DTST)'s strategic intent rather than current revenue attribution. Following the proposed sale of CloudFirst Technologies Corporation, management explicitly stated plans to focus resources and capital on high-growth technology sectors, specifically naming AI, cybersecurity, and AI vertical SaaS. The Board authorized a tender offer to return capital to shareholders while retaining 15% of cash for acquisitions and expansion, signaling an active search for targets in these areas.

Here's a quick look at the service line performance that supports these customer segments in the first half of 2025:

Service/Segment Driver	Q2 2025 Revenue Change (YoY)	Q2 2025 Dollar Change
Cloud Infrastructure & Disaster Recovery	6.1% increase	Approx. $193,000 increase
Nexxis Services	17.3% increase	Approx. $48,000 increase
Total Company Revenue	4.8% increase	Approx. $236,000 increase

What this estimate hides is that the overall revenue stability for the first six months of 2025 (totaling $13.2 million) was achieved despite a decline in non-recurring equipment sales of approximately $615,000 or 12.6%.

You should track the rebranding announcement, as it will officially signal the new emphasis on these technology-focused customer segments. Finance: draft 13-week cash view by Friday.

Data Storage Corporation (DTST) - Canvas Business Model: Cost Structure

You're looking at the cost side of Data Storage Corporation (DTST) as they pivot following the CloudFirst Technologies Corporation divestiture. The cost structure is clearly shifting, moving away from the legacy business and focusing on the core Nexxis operations and future strategic investments.

The Selling, General, and Administrative (SG&A) expenses for the three months ended September 30, 2025, hit $1.3 million. That's a significant jump, up 31.8% from the $984,000 reported for the same three months in 2024. For the nine months ended September 30, 2025, total SG&A reached $3.2 million, marking a 13.1% increase year-over-year.

Metric	3 Months Ended Sep 30, 2025	3 Months Ended Sep 30, 2024	9 Months Ended Sep 30, 2025
SG&A Expense	$1.3 million	$984,000	$3.2 million
Q3 Increase (YoY)	31.8%	N/A	13.1% (9-month increase)

The primary drivers behind this SG&A escalation are clear. You see increased spending on personnel and equity compensation, which makes sense given the strategic shift.

• Increased noncash stock-based compensation, largely tied to the accelerated vesting of equity awards triggered by the divestiture.
• Higher salaries and directors' fees resulting from annual merit-based adjustments.
• These increases were partially offset by a decrease in professional fees as certain legal and consulting projects from the prior year concluded.

Costs associated with the shareholder tender offer process are currently reflected in the capital allocation plan rather than as an immediate operating expense, but they represent a major planned cash outflow. The Board authorized a tender offer to repurchase up to 85% of the company's outstanding common stock, utilizing 85% of the cash on hand as of the commencement date, which is expected in Q4 2025. This is a direct return of capital, not an operating cost, but it dictates the near-term cash burn rate.

Regarding capital expenditures for new GPU and AI infrastructure, Data Storage Corporation is actively exploring strategic acquisitions in these emerging areas, such as GPU-based computing and AI enabled infrastructure. While specific Q3 2025 CapEx figures for this are not detailed, the intent is to use the remaining cash post-tender offer for such investments to strengthen the core operating platform.

The costs of operating the Nexxis telecommunications platform, which is now the core continuing operation, are visible through its operational results. For the three months ended September 30, 2025, the Nexxis subsidiary recorded a loss from operations of $1.1 million. For the nine months ended September 30, 2025, the loss from continuing operations, net of tax, was $1.3 million. Still, the revenue from this segment is growing:

• Sales from continuing operations (Nexxis) for Q3 2025 were $417,000, up 28.2% from $325,000 in Q3 2024.
• For the nine months ended September 30, 2025, sales from continuing operations totaled $1.1 million, an increase of approximately $159,000 or 17.6% from $900,000 in the same period last year.

Finance: draft 13-week cash view incorporating the planned tender offer cash usage by Friday.

Data Storage Corporation (DTST) - Canvas Business Model: Revenue Streams

You're looking at the revenue picture for Data Storage Corporation (DTST) after a major strategic shift, so the numbers tell a story of two distinct parts: the small, core recurring business and the large, one-time gain from a sale. Honestly, the focus now is on what's left after shedding the CloudFirst division.

Recurring revenue from Nexxis telecommunications services forms the foundation of the continuing operations. This segment, which includes voice and data telecommunications solutions, showed growth even as the larger business was being restructured. For the three months ended September 30, 2025, this core business generated sales of $417,000. That represented a year-over-year increase of 28.2%.

Sales from continuing operations of $417,000 (Q3 2025) are the clearest metric for the current, smaller operating base. Here's a quick look at how the continuing operations performed for the nine months ending September 30, 2025, compared to the prior year period:

Metric	Period Ended Sep 30, 2025	Period Ended Sep 30, 2024	Change
Sales from Continuing Operations (3 Months)	$417,000	$325,000	Up 28.2%
Sales from Continuing Operations (9 Months)	$1.1 million	$900,000	Up 17.6%
Loss from Operations (3 Months)	$1.1 million	Not explicitly stated	Higher due to stock-based compensation
Gross Margin (3 Months)	47.6%	Not explicitly stated	Improving

Future subscription revenue from GPU IaaS and AI software is currently an area of active exploration rather than booked revenue. Management is clearly signaling a pivot toward high-value, emerging technology sectors to build the next iteration of the business, which they call DSC 2.0. What this estimate hides is that these are not yet contracted revenue streams; they are strategic targets.

Revenue from cybersecurity and voice/data telecommunications is anchored by the Nexxis subsidiary. The growth in the 9-month period, up $159,000 or 17.6%, was primarily driven by an expanding customer base in the Nexxis Voice and Data Solutions business. The company is looking to build on this recurring base with new, strategic investments. The core revenue streams Data Storage Corporation (DTST) is focusing on for future growth include:

• GPU-based computing services.
• AI enabled infrastructure solutions.
• Cybersecurity offerings.

Potential gains from future strategic divestitures or asset sales are currently realized through the recent transaction, not projected future sales. The completed sale of the Cloud Solutions business in Q3 2025 generated a pre-tax gain of $24.8 million and a net gain of about $17.5 million. This one-time event dramatically reshaped the balance sheet, resulting in marketable securities of $45.5 million as of September 30, 2025. The Board plans to use a significant portion of this new cash position for shareholder return via a tender offer, expecting to use 85% of cash on hand to repurchase up to 85% of outstanding common shares in Q4 2025. The remaining proceeds are earmarked for disciplined acquisitions in those high-growth technology sectors you see listed above.

Finance: draft 13-week cash view by Friday.