FalconStor Software Announces Fourth Quarter and Full Year 2025 Results

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4:30 PM on Wednesday, March 4

The Associated Press

AUSTIN, Texas--(BUSINESS WIRE)--Mar 4, 2026--

FalconStor Software, Inc. (OTC: FALC), a trusted data protection leader modernizing disaster recovery and backup for the hybrid cloud world, today announced financial results for its fourth quarter and full year 2025, which ended on December 31, 2025.

“Our fourth quarter results represent an important milestone in FalconStor’s multi-year transformation,” said Todd Brooks, CEO of FalconStor Software. “After several years of deliberately transitioning our business from perpetual license revenue to subscription and consumption-based recurring revenue, we are beginning to see the expected outcome, a return to total revenue growth while maintaining strong profitability.

“Hybrid Cloud ARR run-rate increased 61% year-over-year in the fourth quarter, continuing the momentum we have built and validating our strategy to align FalconStor with how enterprise customers now consume data protection and resilience solutions. Approximately 75% of FalconStor revenue is now recurring, providing greater visibility, stability, and long-term operating leverage for the business.

“While full year 2025 revenue remained consistent with 2024 as this transition completed, the return to quarterly revenue growth in Q4 marks a meaningful inflection point for FalconStor. Based on current customer demand and pipeline activity, we believe this momentum positions us well entering 2026.

“Today, FalconStor operates with a stronger recurring revenue foundation, expanding hybrid cloud adoption, and continued financial discipline, creating increasing long-term value for customers, partners, and shareholders.”

Fourth Quarter 2025 Financial Results

Hybrid Cloud ARR Run-Rate: 61% increase compared to fourth quarter of fiscal 2024
Ending Cash: $2.5 million, compared to $2.5 million in the fourth quarter of fiscal year 2024
Total Revenue: $3.3 million, compared to $2.8 million in the fourth quarter of fiscal year 2024
Total Cost of Revenue: $0.4 million, compared to $0.5 million in the fourth quarter of fiscal year 2024
Total Operating Expenses: $2.1 million, compared to $2.1 million in the fourth quarter of fiscal year 2024
Non-GAAP EBITDA: $0.8 million, compared to $0.4 million in the fourth quarter of fiscal year 2024
GAAP Net Income: $1.6 million, compared to $0.2 million in the fourth quarter of fiscal year 2024

Full Year 2025 Financial Results

Total Revenue: $10.4 million, compared to $10.4 million during the full year of 2024
Total Cost of Revenue: $1.7 million, compared to $1.7 million during the full year of 2024
Total Operating Expenses: $8.5 million, compared to $7.9 million during the full year of 2024
Non-GAAP EBITDA: $0.6 million, compared to $1.3 million during the full year of 2024
GAAP Net Income: $1.1 million, compared to $0.7 million during the full year of 2024

“We continue to execute with disciplined cost management and operational rigor, while strategically advancing our growth and innovation initiatives,” said Vincent Sita, FalconStor CFO.

Non-GAAP Financial Measures

The non-GAAP financial measures used in this press release are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. The Company’s management refers to these non-GAAP financial measures in making operating decisions because they provide meaningful supplemental information regarding the Company’s operating performance. In addition, these non-GAAP financial measures facilitate management’s internal comparisons to the Company’s historical operating results and comparisons to competitors’ operating results. We include these non-GAAP financial measures (which should be viewed as a supplement to, and not a substitute for, their comparable GAAP measures) in this press release because we believe they are useful to investors in allowing for greater transparency into the supplemental information used by management in its financial and operational decision-making. The non-GAAP financial measures exclude (i) depreciation, (ii) amortization, (iii) restructuring expenses, (iv) severance expenses, (v) board expenses, (vi) stock based compensation, (vii) non-operating expenses (income) including income taxes and interest & other expenses (income). For a reconciliation of our GAAP and non-GAAP financial results, please refer to our Reconciliation of Net Income (Loss) to Adjusted EBITDA presented in this release.

Please click this link for accompanying financial charts.

About FalconStor Software

FalconStor is the trusted data protection software leader modernizing disaster recovery and backup operations for the hybrid cloud world. The Company enables enterprise customers and managed service providers to secure, migrate, and protect their data while reducing data storage and long-term retention costs by 60% or more, even when necessary additional infrastructure costs are included. Organizations and managed service providers worldwide standardize on FalconStor as the foundation for their cloud first data protection future. Our products are offered through and supported by a worldwide network of leading managed service providers, system integrators, resellers, and original equipment manufacturers.

FalconStor and FalconStor Software are trademarks or registered trademarks of FalconStor Software, Inc., in the U.S. and other countries. All other company and product names contained herein may be trademarks of their respective holders.

Links to websites or pages controlled by parties other than FalconStor are provided for the reader's convenience and information only. FalconStor does not incorporate into this release the information found at those links nor does FalconStor represent or warrant that any information found at those links is complete or accurate. Use of information obtained by following these links is at the reader's own risk.

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