Quantum Q1 Earnings Call Highlights

Quantum (NASDAQ:QMCO) reported fiscal first-quarter 2027 revenue above its guidance range, citing demand for its ActiveScale and tape storage offerings, while supply constraints continued to limit its ability to fulfill orders.

Revenue for the quarter ended June 30, 2026, was $80.8 million, up 4% sequentially from $78 million and 25.7% from $64.3 million a year earlier. The result exceeded the company’s guidance of $75 million, plus or minus $2 million.

President and Chief Executive Officer Hugues Meyrath said the company’s results reflected strong enterprise demand, though opportunities with hyperscale customers remain constrained primarily by supply-chain conditions.

“Customers’ demand remains stronger than our ability to fulfill it,” Meyrath said, pointing to continuing constraints in tape-drive availability and certain disk drives. He said the company expects supply conditions to improve over the course of the year, but component availability and pricing remain areas of focus.

Margins and operating performance improve

GAAP gross margin reached 39.3%, rising 360 basis points sequentially and nearly 400 basis points year over year. Chief Financial Officer William White said the company’s gross profit increased 40% from the prior-year period, supported by stronger pricing, cost controls, favorable standard-cost and inventory performance, and leverage on fixed costs.

GAAP operating expenses were $26.7 million, down from $30.4 million in the prior quarter and $35.3 million a year earlier. Non-GAAP operating expenses were $25.1 million, below the company’s guided range of $27 million, plus or minus $1 million.

Quantum recorded GAAP operating income of $5 million, compared with a GAAP operating loss of $12.6 million in the year-earlier quarter. Non-GAAP operating income was $6.6 million, compared with a non-GAAP operating loss of $7.4 million a year earlier.

The company generated approximately $0.9 million of operating cash flow during the quarter and reported adjusted EBITDA of $8 million, exceeding its guidance range. Adjusted EBITDA was $1 million in the preceding quarter and negative $6.5 million in the prior-year period.

Despite the operational improvement, Quantum reported a GAAP net loss of $155.3 million, or $7.06 per share. White said the loss included $157.7 million in one-time, non-cash debt-related items, including losses associated with changes in the fair value of convertible notes and warrant liabilities, as well as debt extinguishment.

On a non-GAAP basis, the company reported net income of $4 million, or $0.18 per share, compared with a non-GAAP loss of $3.1 million in the prior quarter and a non-GAAP loss of $14.5 million a year earlier.

Backlog grows as larger opportunities increase

Meyrath said Quantum’s backlog increased significantly during the quarter, although the company did not disclose an updated dollar figure. In response to an analyst question, he said the backlog was “significantly higher” than the $45 million reported in the prior quarter.

The company reported sequential revenue growth of more than 20% in the Americas and more than 50% in APAC. Service revenue increased approximately 10% from the prior quarter, which Meyrath described as a stabilization after multiple years of decline.

Quantum also cited continued strength in tape-related royalty revenue. Meyrath said recent LTO shipment data showed capacity shipments rising 15% sequentially, reflecting increased industry adoption of tape technology for storage economics, lower power consumption and cyber resilience.

The company said its tape opportunity funnel reached its highest level in years and that it saw a “dramatic increase” in deals valued above $1 million, with most of those opportunities exceeding $3 million.

• Quantum secured a renewal and expansion of an ActiveScale deployment with a European biometrics institution.
• The company won a hyperscaler deployment in APAC centered on its Scalar i7 tape library, a transaction valued at more than eight figures, according to Meyrath.
• Management said ActiveScale is gaining traction among enterprise customers and is generating more seven-digit deals and customer expansions.

Meyrath said the company does not provide a product-level breakdown of bookings or pipeline, but described ActiveScale as a growing portion of Quantum’s business and an offering that is attracting large enterprises, hyperscalers and neoscalers seeking turnkey storage solutions.

Debt eliminated following private placement

Cash, cash equivalents and restricted cash totaled approximately $54.6 million at quarter-end, compared with $16.2 million at the end of fiscal 2026. During the quarter, Quantum generated approximately $94.6 million of net proceeds from a private placement and used $56.8 million to repay debt as of June 30.

Total outstanding debt was zero at quarter-end, compared with $144.8 million of term debt and convertible notes as of March 31. White said the company expects interest expense to be minimal going forward after reporting $2.1 million of interest expense for the first quarter.

Second-quarter outlook reflects supply limitations

For fiscal second-quarter 2027, Quantum forecast revenue of approximately $82 million, plus or minus $2 million. At the midpoint, the outlook would represent roughly 31% year-over-year growth.

The company expects non-GAAP adjusted operating expenses of about $27 million, plus or minus $1 million, with the sequential increase reflecting higher sales commissions tied to performance and an increased pace of research-and-development hiring.

Quantum projected non-GAAP adjusted net income of $0.12 per share, plus or minus $0.10, based on estimated weighted average basic shares outstanding of 39.4 million. It forecast adjusted EBITDA of $6 million, plus or minus $1 million.

White said the lower EBITDA outlook relative to the first quarter reflects anticipated higher operating expenses and a conservative view of gross margins amid uncertainty around large deals and component shortages. Meyrath said tape-drive supply had remained largely flat through August, despite expectations from IBM for increased production later in the year.

About Quantum (NASDAQ:QMCO)

Quantum Corporation (NASDAQ: QMCO) is a technology company that develops and delivers data management and storage solutions for businesses and organizations worldwide. The company's product portfolio includes hardware, software and cloud-based offerings designed to address backup, archive, primary storage and long-term retention needs. Quantum's solutions are geared toward data-intensive environments such as media and entertainment, surveillance, government, education and healthcare, where large volumes of digital content must be reliably stored, managed and accessed.

Quantum's flagship products include the StorNext® data management platform, which provides high-performance shared file storage and workflow acceleration, and the DXi® series of deduplication appliances, which optimize backup and recovery by reducing storage footprints and data transfer times.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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