Quantum(QMCO) - 2026 Q1 - Quarterly Results

Fiscal First Quarter 2026 Financial Results Overview This section covers management's strategic initiatives, financial performance highlights, and key metrics for the quarter Management Commentary Quantum's new CEO, Hugues Meyrath, is actively implementing measures to improve the company's cost structure and balance sheet, including strengthening the executive team and prioritizing debt reduction. Despite a challenging fiscal first quarter, the company anticipates improved bottom-line performance in the upcoming September quarter - New CEO Hugues Meyrath is focused on conducting in-depth business reviews, improving the cost structure and balance sheet, and strengthening the executive team with key new hires in sales and marketing[2] - The company has raised approximately $83 million in net proceeds from a standby equity purchase agreement to support debt reduction and working capital requirements[3] - Management expects decisive actions to result in noticeably improved bottom-line performance beginning in the September quarter (fiscal Q2 2026)[3] Key Financial Highlights (Q1 2026 vs. Q1 2025) Quantum reported a decline in revenue and GAAP gross profit for Q1 FY2026 compared to the prior year. However, the company achieved a significant reduction in GAAP operating expenses, leading to a narrower GAAP net loss. Adjusted EBITDA remained negative and worsened year-over-year Q1 FY2026 vs. Q1 FY2025 Financial Highlights | Metric | Q1 FY2026 (Millions) | Q1 FY2025 (Millions) | Change (YoY) | | :------------------------------- | :------------------- | :------------------- | :----------- | | Revenue | $64.3 | $72.3 | -11.1% | | GAAP Gross Profit | $22.7 (35.3% of revenue) | $27.1 (37.4% of revenue) | -16.3% | | Total GAAP Operating Expenses | $35.3 (54.9% of revenue) | $43.9 (60.7% of revenue) | -19.6% | | GAAP Net Loss | ($17.2) | ($19.9) | +13.5% (narrower loss) | | GAAP Net Loss Per Share | ($1.87) | ($4.15) | +54.9% (narrower loss) | | Non-GAAP Adjusted Net Loss | ($14.5) | ($7.6) | -90.8% (wider loss) | | Non-GAAP Adjusted Net Loss Per Share | ($1.58) | ($1.59) | +0.6% (slightly narrower) | | Adjusted EBITDA | ($6.5) | ($2.2) | -195.5% (worsened) | Detailed Financial Statements This section presents Quantum's balance sheets, statements of operations, and cash flows, offering a comprehensive view of its financial position and performance Condensed Consolidated Balance Sheets As of June 30, 2025, Quantum's total assets increased by 8.8% from March 31, 2025, primarily driven by a significant rise in cash and cash equivalents. Total liabilities decreased by 11.4%, largely due to the elimination of outstanding borrowings on its revolving credit facility, resulting in a substantial reduction in stockholders' deficit Condensed Consolidated Balance Sheets Summary | Balance Sheet Item | June 30, 2025 (Thousands) | March 31, 2025 (Thousands) | Change | | :-------------------------------- | :-------------------------- | :------------------------- | :----- | | Cash and cash equivalents | $37,404 | $16,464 | +127.2% | | Total current assets | $118,443 | $102,806 | +15.2% | | Total assets | $169,154 | $155,402 | +8.8% | | Revolving credit facility | $0 | $26,600 | -100% | | Total current liabilities | $223,752 | $257,607 | -13.1% | | Total liabilities | $283,540 | $319,768 | -11.4% | | Total stockholders' deficit | ($114,386) | ($164,366) | +30.4% (reduced deficit) | Condensed Consolidated Statements of Operations and Comprehensive Loss For the three months ended June 30, 2025, Quantum experienced an 11.1% decrease in total revenue compared to the prior year, with declines across product, service, and royalty segments. Despite this, the company successfully reduced total operating expenses by 19.5%, leading to a narrower loss from operations and a 13.5% reduction in net loss Condensed Consolidated Statements of Operations Summary | Metric | Q1 FY2026 (Thousands) | Q1 FY2025 (Thousands) | Change (YoY) | | :-------------------------- | :-------------------- | :-------------------- | :----------- | | Product Revenue | $37,535 | $42,652 | -12.0% | | Service and Subscription Revenue | $24,943 | $26,711 | -6.7% | | Royalty Revenue | $1,808 | $2,902 | -37.7% | | Total Revenue | $64,286 | $72,265 | -11.1% | | Gross Profit | $22,712 | $27,057 | -16.0% | | Total Operating Expenses | $35,308 | $43,860 | -19.5% | | Loss from Operations | ($12,596) | ($16,803) | +25.0% (narrower loss) | | Net Loss | ($17,206) | ($19,898) | +13.5% (narrower loss) | | Net Loss per Share | ($1.87) | ($4.15) | +54.9% (narrower loss) | Condensed Consolidated Statements of Cash Flows In Q1 FY2026, Quantum's net cash used in operating activities significantly increased to ($16.9) million from ($1.9) million in the prior year. However, financing activities provided a substantial net cash inflow of $39.0 million, primarily driven by $67.0 million in net proceeds from shares issued related to the SEPA, resulting in a positive net change in cash, cash equivalents, and restricted cash for the period Condensed Consolidated Statements of Cash Flows Summary | Cash Flow Item | Q1 FY2026 (Thousands) | Q1 FY2025 (Thousands) | Change (YoY) | | :------------------------------------ | :-------------------- | :-------------------- | :----------- | | Net cash used in operating activities | ($16,892) | ($1,896) | -790.9% (more cash used) | | Net cash used in investing activities | ($1,192) | ($1,620) | +26.4% (less cash used) | | Net cash provided by financing activities | $39,028 | ($4,798) | N/A (swing from outflow to inflow) | | Proceeds from shares issued (SEPA), net | $66,994 | $0 | N/A | | Net change in cash, cash equivalents, and restricted cash | $20,944 | ($8,317) | N/A (swing from decrease to increase) | | Cash, cash equivalents, and restricted cash at end of period | $37,547 | $17,543 | +114.0% | Non-GAAP Financial Measures This section defines and reconciles non-GAAP financial metrics, including Adjusted EBITDA and adjusted net loss, to provide insights into core operating performance Non-GAAP Definitions and Rationale Quantum utilizes non-GAAP financial measures, including Adjusted EBITDA and non-GAAP adjusted net income (loss), to offer investors a clearer view of its core operating performance by excluding certain non-recurring or non-cash items. The company acknowledges the inherent limitations of these measures and advises against their sole reliance - Adjusted EBITDA is defined as net income (loss) before interest, taxes, depreciation, amortization, stock-based compensation, restructuring charges, acquisition-related intangible assets, debt extinguishment, non-recurring project costs, and fair value of warrants adjustments[28] - Non-GAAP adjusted net income (loss) excludes restructuring charges, stock-based compensation, acquisition-related intangible assets, debt extinguishment, non-recurring project costs, and fair value of warrants adjustments[29] - These non-GAAP measures are used by management and the board to evaluate core operating performance and trends, and to prepare annual budgets and operating plans[30] Adjusted EBITDA Reconciliation The reconciliation of GAAP net loss to Adjusted EBITDA shows a negative Adjusted EBITDA of ($6.5) million for Q1 FY2026, a significant decline from ($2.2) million in Q1 FY2025, primarily due to changes in non-recurring project costs and gain/loss on debt extinguishment Adjusted EBITDA Reconciliation Table | Item | Q1 FY2026 (Thousands) | Q1 FY2025 (Thousands) | | :------------------------------------ | :-------------------- | :-------------------- | | GAAP net loss | ($17,206) | ($19,897) | | Interest expense, net | $6,516 | $3,905 | | Provision for income taxes | $223 | $235 | | Depreciation expense | $1,277 | $1,318 | | Stock-based compensation expense | ($529) | $925 | | Restructuring charges | $2,532 | $1,192 | | Gain (loss) on debt extinguishment | ($2,559) | $695 | | Amortization of acquisition-related intangible assets | $230 | $462 | | Non-recurring project costs | $3,012 | $10,650 | | Fair value of warrants adjustments | $0 | ($1,666) | | Adjusted EBITDA | ($6,504) | ($2,181) | Non-GAAP Adjusted Net Loss Reconciliation The reconciliation of GAAP net loss to non-GAAP adjusted net loss indicates a wider adjusted net loss of ($14.5) million for Q1 FY2026 compared to ($7.5) million in Q1 FY2025, with adjusted net loss per share at ($1.58) versus ($1.57) in the prior year, reflecting the impact of various adjustments Non-GAAP Adjusted Net Loss Reconciliation Table | Item | Q1 FY2026 (Thousands) | Q1 FY2025 (Thousands) | | :------------------------------------ | :-------------------- | :-------------------- | | GAAP net loss | ($17,206) | ($19,897) | | Stock-based compensation expense | ($529) | $925 | | Restructuring charges | $2,532 | $1,192 | | Loss on debt extinguishment | ($2,559) | $695 | | Amortization of acquisition-related intangible assets | $230 | $462 | | Non-recurring project costs | $3,012 | $10,650 | | Non-recurring interest expense | $0 | $116 | | Fair value of warrants adjustments | $0 | ($1,666) | | Adjusted net loss | ($14,520) | ($7,523) | | Adjusted net loss per share – basic and diluted | ($1.58) | ($1.57) | Business Outlook This section provides Quantum's financial guidance for the upcoming fiscal second quarter of 2026, including revenue and profitability projections Fiscal Second Quarter 2026 Guidance Quantum provides guidance for the fiscal second quarter of 2026, projecting revenue between $59 million and $63 million, non-GAAP adjusted operating expenses around $27 million, and an adjusted EBITDA of approximately breakeven Q2 FY2026 Financial Guidance | Metric | Q2 FY2026 Guidance | | :------------------------------------ | :----------------------------------- | | Revenue | $61 million, plus or minus $2 million | | Non-GAAP adjusted operating expenses | $27 million, plus or minus $2 million | | Non-GAAP adjusted basic net loss per share | ($0.26), plus or minus $0.10 | | Adjusted EBITDA | Approximately breakeven | Company Information and Disclosures This section offers background on Quantum, details for investor communications, and important forward-looking statement disclaimers About Quantum Quantum Corporation, listed on Nasdaq (QMCO), is a company with over four decades of experience, providing end-to-end data management solutions tailored for the AI era. Its platform enables customers to maximize value from unstructured data, supporting high-performance AI applications and data-intensive workloads - Quantum delivers end-to-end data management solutions designed for the AI era, leveraging over four decades of experience[14] - The company's data platform helps customers extract maximum value from their unique, unstructured data, powering AI applications and demanding data-intensive workloads[14] - Quantum serves leading organizations in life sciences, government, media and entertainment, research, and industrial technology[14] Conference Call and Webcast Details Quantum hosted an earnings and business update conference call on September 10, 2025, with details provided for live access and subsequent replay via telephone and webcast, available on the investor relations section of the company's website - Management hosted an earnings and business update conference call on September 10, 2025, at 5:00 p.m. ET (2:00 p.m. PT)[12] - A telephone replay was available through September 17, 2025, and a webcast replay will be accessible on the company's website for at least 90 days[13] Forward-Looking Information This section contains forward-looking statements regarding Quantum's future financial results, anticipated benefits, and strategic goals. These statements are subject to various business, economic, and other known and unknown risks and uncertainties that could cause actual results, levels of activity, performance, or achievements to differ materially from those expressed or implied - The press release includes forward-looking statements related to future financial results, anticipated benefits of the standby equity purchase agreement, and the company's focus, goals, opportunities, and strategy[16] - These statements are subject to business, economic, and other risks and uncertainties, both known and unknown, that may cause actual results to be materially different[17][19] - Risks include macroeconomic and inflationary conditions, competitive pressures, challenges in executing strategy, and the ability to develop new products and meet customer needs[20] Investor Relations Contacts Investor relations inquiries for Quantum Corporation can be directed to Shelton Group, with specific contacts and their information provided - Investor Relations contacts are Leanne K. Sievers and Brett L. Perry of Shelton Group, reachable via phone at 214-272-0070 or email at sheltonir@sheltongroup.com[21]