Data Storage (DTST) investor relations material

Executive summary

• Completed strategic shift with the sale of CloudFirst/Cloud Solutions Business in September 2025, focusing ongoing operations on Nexxis, which provides managed voice and data solutions.

• Engaged in a significant tender offer in January 2026, repurchasing 72% of outstanding shares, funded by proceeds from the CloudFirst sale.

• Advanced transformation and long-term investment strategy by evaluating acquisition opportunities in recurring revenue technology businesses, including AI infrastructure, cybersecurity, communications, and software.

• Maintained strong capital position post-tender offer, supporting disciplined capital deployment and future M&A, with no long-term debt.

• Focused on building shareholder value through disciplined investments, selective acquisitions, and organic growth initiatives.

Financial highlights

• Revenue from continuing operations (Nexxis) was $359,000 for Q2 2026, up 9.3% from $328,000 in Q2 2025; for the six months ended June 30, 2026, revenue was $705,237, up 10.1% year-over-year.

• Gross profit increased 21.9% year-over-year to $168,481 for Q2 2026, with gross margin improving to 47% from 42.1%.

• Net loss attributable to common shareholders was $1.23 million for Q2 2026, compared to $732,000 in Q2 2025.

• Cash and marketable securities totaled $10.3 million as of June 30, 2026, with $1 million in escrow funds receivable.

• $29.5 million used to repurchase common stock via tender offer in January 2026.

Outlook and guidance

• Actively evaluating M&A opportunities in AI infrastructure, cybersecurity, communications, and enterprise software, with a goal to sign a non-binding LOI within 45–60 days and close a deal by year-end or early next year.

• Focus remains on quality businesses with recurring revenue, strong management, and sustainable earnings potential.

• Management expects current liquidity and anticipated cash flows to support operational needs for at least the next 12 months.

• Ongoing focus on expense management, capital preservation, and disciplined deal valuation and structure.