Quantum Reports Fiscal First Quarter 2025 Financial Results
Quantum Corporation (Nasdaq: QMCO) ("Quantum" or the "Company"), a leader in solutions for AI and unstructured data, announced today financial results for its fiscal first quarter 2025 ended June 30, ...
SAN JOSE, Calif.: Quantum Corporation (Nasdaq: QMCO) ("Quantum" or the "Company"), a leader in solutions for AI and unstructured data, announced today financial results for its fiscal first quarter 2025 ended June 30, 2024.
Fiscal First Quarter 2025 Financial Summary
- Revenue was $71.3 million
- GAAP gross profit was $26.1 million, or 36.6% of revenue
- GAAP net loss was $20.8 million, or ($0.22) per share
- Subscription ARR was up 29% year-over-year at $18.8 million
- Adjusted non-GAAP net loss was $8.4 million, or ($0.09) per share
- Adjusted EBITDA was ($3.1) million
“Results for the quarter were largely in-line with our expectations, reflecting further rotation of our business toward our long-term initiatives,” stated Jamie Lerner, Chairman and CEO of Quantum. “We are also seeing improving traction for Myriad and ActiveScale products. However, during the quarter we experienced a temporary headwind to gross margin caused by product mix and supply constraints of certain hardware that prevented us from shipping a portion of our higher margin deals. This also resulted in an increase to our current order backlog to above normal levels.”
“As part of our ongoing strategic and financial initiatives, we have reached an agreement with our current lenders that significantly improves our liquidity, allows us to take action on improving our operational initiatives and focus on driving Myriad, ActiveScale and the rest of our businesses to the next level. With this newly restructured financing in place, we have improved our overall capital structure and balance sheet. Additionally, we continue to maintain strong cost and discretionary spending controls as we execute toward profitable growth.”
“We are fully dedicated to executing on our business initiatives toward achieving sustainable operating performance that is driven by tangible proof points, including accelerated growth of new products, divestment of non-core products and assets, and restructuring our organization to become a more focused and operationally efficient business.”
Fiscal First Quarter 2025 vs. Prior Year Quarter
Revenue for the fiscal first quarter of 2025 was $71.3 million, compared to $92.5 million in the fiscal first quarter of 2024, primarily reflecting lower revenue contribution from hyperscale customers combined with lower tape media and royalty business. GAAP gross profit in the first quarter of 2025 was $26.1 million, or 36.6% of revenue, compared to $35.6 million, or 38.5% of revenue, in the prior fiscal year quarter. Non-GAAP gross profit in the first quarter 2025 was $26.3 million, or 36.9% of revenue, compared to $35.9 million, or 38.8% of revenue, in the first quarter of fiscal 2024.
Total GAAP operating expenses in the fiscal first quarter of 2025 were $43.9 million, or 61.5% of revenue, compared to $40.8 million, or 44.1% of revenue, in the fiscal first quarter of 2024. Selling, general and administrative expenses were $34.4 million, compared to $28.5 million in the prior fiscal year. Research and development expenses in the fiscal first quarter of 2025 were $8.3 million, compared to $10.9 million in the prior fiscal year quarter. Non-GAAP operating expenses in the first quarter of 2025 were $30.8 million, compared to $35.5 million in the fiscal first quarter of 2024.
GAAP net loss in the first quarter of fiscal 2025 was $20.8 million, or ($0.22) per share, compared to a net loss of $9.1 million, or ($0.10) per share in the prior fiscal year quarter. Excluding the income statement impact of the warrants, stock compensation, restructuring charges, and other non-recurring costs, non-GAAP adjusted net loss in the quarter was $8.4 million, or ($0.09) per share, compared to an adjusted net loss of $4.1 million, or ($0.04) per share in the fiscal first quarter of 2024.
Adjusted EBITDA in fiscal first quarter 2025 was ($3.1) million, compared to $1.5 million in the first quarter of fiscal year 2024.
For a reconciliation of GAAP to non-GAAP financial results, please see the financial reconciliation tables below.
Liquidity and Debt (as of June 30, 2024)
- Cash, cash equivalents and restricted cash were $17.5 million, compared to $25.7 million as of June 30, 2023.
- Total interest expense for the first quarter was $3.8 million, compared to $3.2 million for the same period a year ago.
- Outstanding term loan debt, excluding debt issuance costs, was $75.8 million, compared to $88.6 million as of June 30, 2023. Outstanding borrowings on revolving credit facility was $35.8 million, compared to $17.8 million as of June 30, 2023.
- During the quarter, the Company paid down $12.3 million of term loan debt through improved working capital by outsourcing service inventory logistics and management.
Guidance
For the fiscal second quarter of 2025, the Company expects the following guidance:
- Revenues of $73.0 million, plus or minus $2.0 million
- Non-GAAP adjusted basic net loss per share of ($0.06), plus or minus $0.02
- Adjusted EBITDA of approximately breakeven
This assumes an effective annual tax rate of negative 14%; non-GAAP adjusted net loss per share assumes an average basic share count of approximately 96 million in the fiscal second quarter of 2025.
Conference Call and Webcast
Management will host a live conference call today, August 13, 2024, at 5:00 p.m. ET (2:00 p.m. PT) to discuss these results. The conference call will be accessible by dialing 866-424-3436 (U.S. Toll-Free) or +1-201-689-8058 (International) and entering conference ID 13748092. This conference call will be broadcast live over the Internet with a slide presentation and can be accessed by all interested parties on the investor relations section of the Company's website at investors.quantum.com under the events and presentations tab.
A telephone replay of the conference call will be available approximately two hours after the conference call and will be available through August 20, 2024. To access the replay dial 1-877-660-6853 and enter the conference ID 13748092 at the prompt. International callers should dial +1-201-612-7415 and enter the same conference ID. Following the conclusion of the live call, a replay of the webcast will be available on the Company's website at www.quantum.com for at least 90 days.
About Quantum
Quantum delivers end-to-end data management solutions designed for the AI era. With over four decades of experience, our data platform has allowed customers to extract the maximum value from their unique, unstructured data. From high-performance ingest that powers AI applications and demanding data-intensive workloads, to massive, durable data lakes to fuel AI models, Quantum delivers the most comprehensive and cost-efficient solutions. Leading organizations in life sciences, government, media and entertainment, research, and industrial technology trust Quantum with their most valuable asset – their data. Quantum is listed on Nasdaq (QMCO). For more information visit www.quantum.com.
Quantum and the Quantum logo are registered trademarks of Quantum Corporation and its affiliates in the United States and/or other countries. All other trademarks are the property of their respective owners.
Forward-Looking Information
The results reported in this press release are preliminary and unaudited, and are subject to change. As the Company completes its financial close process and finalizes its financial statements for the fiscal 2025 first quarter, and as its independent auditors complete their review of the Company’s financial statements for the fiscal 2025 first quarter, it is possible the Company may identify items that require adjustments to the preliminary financial information set forth in this earnings report, and those changes could be material. The Company does not intend to update such financial information prior to the filing of its Quarterly Report on Form 10-Q with the Securities and Exchange Commission for the fiscal 2025 first quarter, except as otherwise required by law.
The information provided in this press release may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (“Exchange Act”). These forward-looking statements are largely based on our current expectations and projections about future events and financial trends affecting our business. Such forward-looking statements include, in particular, statements related to future projections of our financial results, including for the second fiscal quarter of 2025; improving traction on securing new deals for Myriad and ActiveScale products; the anticipated benefits of our restructured financing and our restructuring plans; and our focus and our strategy.
These forward-looking statements may be identified by the use of terms and phrases such as “anticipates”, “believes”, “can”, “could”, “estimates”, “expects”, “forecasts”, “intends”, “may”, “plans”, “projects”, “targets”, “will”, and similar expressions or variations of these terms and similar phrases. Additionally, statements concerning future matters and other statements regarding matters that are not historical are forward-looking statements. Investors are cautioned that these forward-looking statements relate to future events or our future performance and are subject to business, economic, and other risks and uncertainties, both known and unknown, that may cause actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements.
These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected, including without limitation, the following: risks related to the need to address the many challenges facing our business; the impact macroeconomic and inflationary conditions on our business, including potential disruptions to our supply chain, employees, operations, sales and overall market conditions; the competitive pressures we face; risks associated with executing our strategy; the distribution of our products and the delivery of our services effectively; the development and transition of new products and services and the enhancement of existing products and services to meet customer needs and respond to emerging technological trends; estimates and assumptions related to the cost (including any possible disruption of our business) and the anticipated benefits of the transformation and restructuring plans; the outcome of any claims and disputes; the ability to meet stock exchange continued listing standards; the possibility that the Nasdaq may delist our common stock; risks related to our ability to implement and maintain effective internal control over financial reporting in the future; and other risks that are described herein, including but not limited to the items discussed in “Risk Factors” in our filings with the Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K filed with the Securities and Exchange Committee on June 28, 2024, and any subsequent reports filed with the SEC. We do not intend to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
QUANTUM CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts, unaudited) | |||||||
| June 30, 2024 |
| March 31, 2024 | ||||
Assets |
|
|
| ||||
Current assets: |
|
|
| ||||
Cash and cash equivalents | $ | 17,287 |
|
| $ | 25,692 |
|
Restricted cash |
| 256 |
|
|
| 168 |
|
Accounts receivable, net of allowance for credit losses of $99 and $22, respectively |
| 61,364 |
|
|
| 67,788 |
|
Manufacturing inventories |
| 18,467 |
|
|
| 17,753 |
|
Service parts inventories |
| 8,513 |
|
|
| 9,783 |
|
Prepaid expenses |
| 3,880 |
|
|
| 2,186 |
|
Other current assets |
| 8,965 |
|
|
| 8,414 |
|
Total current assets |
| 118,732 |
|
|
| 131,784 |
|
Property and equipment, net |
| 10,988 |
|
|
| 12,028 |
|
Intangible assets, net |
| 1,207 |
|
|
| 1,669 |
|
Goodwill |
| 12,969 |
|
|
| 12,969 |
|
Right-of-use assets, net |
| 9,344 |
|
|
| 9,425 |
|
Other long-term assets |
| 19,849 |
|
|
| 19,740 |
|
Total assets | $ | 173,089 |
|
| $ | 187,615 |
|
Liabilities and Stockholders’ Deficit |
|
|
| ||||
Current liabilities: |
|
|
| ||||
Accounts payable | $ | 31,509 |
|
| $ | 26,087 |
|
Accrued compensation |
| 16,091 |
|
|
| 18,214 |
|
Deferred revenue, current portion |
| 74,802 |
|
|
| 78,511 |
|
Term debt, current portion |
| 5,000 |
|
|
| 82,496 |
|
Revolving credit facility |
| — |
|
|
| 26,604 |
|
Other accrued liabilities |
| 25,043 |
|
|
| 13,986 |
|
Total current liabilities |
| 152,445 |
|
|
| 245,898 |
|
Deferred revenue, net of current portion |
| 36,759 |
|
|
| 38,176 |
|
Revolving credit facility |
| 35,800 |
|
|
| — |
|
Long-term debt, net of current portion |
| 65,132 |
|
|
| — |
|
Warrant liabilities |
| 3,163 |
|
|
| 4,046 |
|
Operating lease liabilities |
| 9,464 |
|
|
| 9,621 |
|
Other long-term liabilities |
| 11,577 |
|
|
| 11,372 |
|
Total liabilities |
| 314,340 |
|
|
| 309,113 |
|
|
|
|
| ||||
Stockholders' deficit |
|
|
| ||||
Preferred stock, 20,000 shares authorized; no shares issued and outstanding |
| — |
|
|
| — |
|
Common stock, $0.01 par value; 225,000 shares authorized; 95,850 and 95,850 shares issued and outstanding |
| 959 |
|
|
| 959 |
|
Additional paid-in capital |
| 708,041 |
|
|
| 707,116 |
|
Accumulated deficit |
| (848,200 | ) |
|
| (827,380 | ) |
Accumulated other comprehensive loss |
| (2,051 | ) |
|
| (2,193 | ) |
Total stockholders’ deficit |
| (141,251 | ) |
|
| (121,498 | ) |
Total liabilities and stockholders’ deficit | $ | 173,089 |
|
| $ | 187,615 |
|
QUANTUM CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands, except per share amounts, unaudited) | |||||||
| Three Months Ended June 30, | ||||||
|
| 2024 |
|
|
| 2023 |
|
|
|
| Restated | ||||
Revenue: |
|
|
| ||||
Product | $ | 40,994 |
|
| $ | 58,577 |
|
Service and subscription |
| 27,447 |
|
|
| 30,953 |
|
Royalty |
| 2,902 |
|
|
| 2,965 |
|
Total revenue |
| 71,343 |
|
|
| 92,495 |
|
Cost of revenue: |
|
|
| ||||
Product |
| 32,555 |
|
|
| 44,451 |
|
Service and subscription |
| 12,653 |
|
|
| 12,403 |
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