Quantum's Q1 Loss Wider Than Estimated, Revenues Plunge Y/Y

Core Insights - Quantum Corporation reported a first-quarter fiscal 2026 non-GAAP loss of $1.58 per share, significantly wider than the Zacks Consensus Estimate of a loss of 15 cents, and compared to a loss of $1.57 per share in the same quarter last year [1][10] - Revenue for the quarter was $64.3 million, down 11% year over year, missing the consensus mark by 12.8%, primarily due to changes in product mix as the company transitions to a higher-value business model [2][10] - The company is restructuring teams to align with growth trends in AI, media and entertainment, data protection, and long-term archiving, while expanding distribution in South Asia, India, and China [3] Financial Performance - Product revenues declined 12% year over year to $37.5 million, while service and subscription revenues totaled $24.9 million, down from $26.7 million in the previous year [4] - The royalty business generated $1.8 million in revenues, a decrease of 37.7% year over year [5] - Gross margin was 35.3%, down from 37.4% in the prior-year quarter, attributed to higher inventory provisions and increased import tariffs [6] Cash Flow & Liquidity - Quantum used $16.9 million of net cash from operating activities in the quarter, compared to $1.9 million used in the year-earlier quarter [8] - As of June 30, 2025, the company's cash, cash equivalents, and restricted cash amounted to $37.5 million, an increase from $16.6 million as of March 31 [8] Future Outlook - For fiscal Q2, the company expects net sales of approximately $61 million, with non-GAAP operating expenses projected at $27 million, indicating benefits from recent cost-reduction measures [11] - The adjusted EBITDA is expected to be roughly breakeven, with a projected non-GAAP adjusted basic net loss per share of 26 cents [11]