Data Storage Corp Sells CloudFirst for $40M, Becomes Debt-Free with $10M Cash
Data Storage Corporation sold its CloudFirst unit for $40 million in September 2025, yielding $31.6 million net proceeds and a $20.1 million gain that propelled a record $19.2 million fiscal-2025 net income. A subsequent $29.3 million tender offer repurchased 5.625 million shares, leaving the company debt-free with over $10 million cash.
1. CloudFirst Divestiture Completed
Data Storage Corporation closed the sale of its CloudFirst cloud hosting business in September 2025 for $40 million in gross proceeds, generating approximately $31.6 million in net proceeds and recording a $20.1 million net gain on discontinued operations.
2. Record Fiscal 2025 Earnings
The one-time gain drove a record net income of $19.2 million for fiscal 2025, up from $523,000 the prior year, while continuing operations under the Nexxis subsidiary contributed modest revenue in the low millions.
3. Shareholder Tender Offer
In January 2026, the company returned $29.3 million to shareholders through a $5.20-per-share tender offer, repurchasing 5.625 million shares (about 72% of outstanding shares), significantly reducing the share count and consolidating ownership.
4. Strengthened Balance Sheet and Growth Plan
Following the divestiture and repurchase, Data Storage Corporation is debt-free with over $10 million in cash and improved financial flexibility to pursue strategic acquisitions and joint ventures in high-growth areas such as AI, cybersecurity and recurring-revenue technology services.