FalconStor Software Announces Fourth Quarter and Full Year 2025 Results
MWN-AI** Summary
FalconStor Software, Inc. (OTC: FALC) reported its financial results for the fourth quarter and full year 2025, showcasing significant progress in its transformation strategy focused on hybrid cloud data protection solutions. The fourth quarter saw a 17% increase in total revenue to $3.3 million compared to the same period in 2024. This growth was fueled by a remarkable 61% year-over-year increase in Hybrid Cloud Annual Recurring Revenue (ARR), highlighting the company's successful shift towards subscription and consumption-based models. Non-GAAP EBITDA doubled to $0.8 million from $0.4 million in Q4 2024, reflecting improved operating efficiency.
Todd Brooks, CEO of FalconStor, emphasized this quarter as a pivotal point in the company’s multi-year transition, as approximately 75% of revenue now comes from recurring sources, positioning FalconStor for sustained growth and stability. Despite full-year revenue remaining consistent at $10.4 million—matching 2024's figures—quarterly growth in Q4 signals a positive trajectory as the firm enters 2026, fueled by robust customer demand and a solid pipeline.
Operating expenses remained steady at $2.1 million for Q4, while the total cost of revenue decreased slightly, further contributing to profitability, evidenced by a GAAP net income of $1.6 million, up from $0.2 million in the previous year. Vincent Sita, CFO, reinforced the company's commitment to disciplined cost management and operational rigor, paving the way for future growth and innovation.
Overall, FalconStor is strategically positioned as it capitalizes on expanding hybrid cloud adoption, creating value for customers and shareholders alike.
MWN-AI** Analysis
FalconStor Software, Inc. (OTC: FALC) has recently reported its fourth quarter and full-year results for 2025, indicating a turning point in its financial narrative. The highlights from the announcement reveal a significant 61% increase in Hybrid Cloud Annual Recurring Revenue (ARR) run-rate year-over-year, alongside a 17% rise in total revenue for Q4 compared to the same period in 2024. Notably, the company’s Non-GAAP EBITDA doubled, a clear sign of improving profitability.
The shift from perpetual license revenue to a subscription and consumption-based model appears to be gaining traction, especially with approximately 75% of revenues now recurring. This model not only enhances revenue visibility and stability but also suggests a healthy operating leverage that can benefit both the company and its shareholders moving forward.
Given these impressive results, FalconStor is positioned well to capitalize on the growing demand for hybrid cloud solutions as enterprises increasingly prioritize data protection and resilience. The strong quarterly revenue growth in Q4 2025 may suggest a positive trend, which could allow for further expansion and potential stock appreciation entering 2026.
Investors should monitor FalconStor closely, particularly in relation to its customer demand and pipeline activity that the CEO alluded to. The company has indicated confidence in maintaining momentum, which could suggest potential stock price increases in conjunction with further growth in ARR.
However, cautious investors should consider the consistency of total revenue for the full year, which remained at $10.4 million—indicative of challenges faced during the transition. It is essential to analyze future quarters for sustained growth.
Overall, FalconStor represents an intriguing opportunity in the data protection sphere, driven by its transformative strategy, recurring revenue stability, and robust market demand for hybrid cloud solutions. Investors should weigh these factors carefully in their portfolio considerations.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
Total Revenue Growth Returns as Hybrid Cloud ARR Expansion Drives Operating Leverage
- 61% increase in Hybrid Cloud ARR Run-Rate year-over-year
- 17% increase in total revenue in Q4 2025 compared to Q4 2024
- Non-GAAP EBITDA doubled to $0.8 million in Q4 2025 compared to Q4 2024
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.
CONTACT US AROUND THE GLOBE
Corporate Headquarters | Europe Headquarters | |
111 Congress Avenue | GERMANY | |
Suite 500 | Landsberger Straße 302 | |
Austin, Texas 78701 | 80687 München, Germany | |
Tel: +1.631.777.5188 | ||
View source version on businesswire.com: https://www.businesswire.com/news/home/20260304309561/en/
For more information, contact:
Vincent Sita
Chief Financial Officer
FalconStor Software Inc.
investorrelations@falconstor.com
FAQ**
What factors contributed to the 6increase in Hybrid Cloud ARR Run-Rate for FalconStor Software Inc. (OTC: FALC) in the fourth quarter of 2025, and how does this align with their long-term growth strategy?
Given the reported increase in total revenue by 17% year-over-year for FalconStor Software Inc. FALC in Q4 2025, what expectations does management have for revenue growth as they continue their transition to subscription-based models?
How does FalconStor Software Inc. (OTC: FALC) plan to address the increase in operating expenses, which rose to $8.5 million in full year 2025 compared to $7.9 million in 2024, without compromising profitability?
With 75% of FalconStor Software Inc. (OTC: FALC) revenue now recurring, what strategies are in place to sustain this momentum and further increase hybrid cloud adoption among enterprise customers in 2026?
**MWN-AI FAQ is based on asking OpenAI questions about Falconstor Software Inc (OTC: FALC).
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