Data Storage Corporation (NASDAQ:DTST) Q3 2022 Earnings Call Transcript

Chuck Piluso: Well, companies are recycling, they’re on the, you know, three to five year recycle mode. So some of those very large accounts that we have, that are related to equipment sales, and software renewals, that continues with the existing accounts with the proposals that we have outstanding, hopefully, to close in this quarter. So the folks that buy equipment, they’ll continue to buy equipment based on their cycle. And as to leads coming in, on subscription based – that just continues as a steady flow. I don’t think that the end of the year accelerates that at all, for the most part. Because it takes several months to migrate someone’s cloud infrastructure onto – our cloud infrastructure from on premise, disaster recovery is a lot faster.

So it’s really when the company is ready to kind of do that. There’s no race, that someone’s going to say, I need to do this immediately, unless something went on, unusual in their environment. We hope to close out some equipment sales that folks may have budgets this quarter, to be able to do that.

Matthew Galinko: Got it, thank you. Maybe just last one on the cost side, I saw that your SG&A line was lower sequentially and sort of lower than a one over the last three quarters in the third quarter. What changes – were there any specific changes that resulted in the lower SG&A expenses quarter? And is that a number that you’ll reinvest into or how should we think about that number?

Chuck Piluso: I’m not sure, are you saying because SG&A went up is that what you’re referring to?

Matthew Galinko: So it went down sequentially at least if my model is correct. I think you were at about $2.6 million in the June quarter and $2.1 million in the September quarter. So I was just curious, you know, why the dip sequentially?

Chuck Piluso: Well, a lot has to do with commissions, the commission, when you when you start seeing that when you have more new sales come in, you’ll see that or software renewals, you know, the account executives are paid commission when a software renews on that. And if you see equipment sales, you’re going to see commissions being up. And that’s because also the sales engineers, and the account executive or the channel partner has commissioned that relates to that. So if there’s less potential sales that are tied to, an account executive, a sales engineer, it could vary with that, Matt. So commission, but as to the salaries I would say, we did have, I don’t believe in the second quarter, we had any reductions there. I would say that that would be more in the third quarter that we had some reductions in headcount from some folks that are project management, things like that.

But I would say commissions, and minor when it comes to – when it comes to headcount reduction.

Matthew Galinko: Okay thank you.

Chuck Piluso: I have to look at it a little closer to give you an exact answer, but typically, it relates to either some reductions we did in headcount or commissions, and commissions, it’s more likely a larger part of that.

Matthew Galinko: All right, that makes sense. Thank you.