What Quantum (QMCO) Said on Its Q2 Earnings Call

Key Points

• Quantum’s fiscal Q2 revenue rose 43% year over year to $89.6 million, beating guidance, while its backlog approached $100 million amid strong storage demand and supply constraints. Adjusted EBITDA reached $11.1 million, up from $500,000 a year earlier.
• The company reported non-GAAP net income of $9.8 million, but a GAAP net loss of $44.8 million included a $51.5 million non-cash impact from warrant-liability revaluation. Quantum generated about $14 million in operating cash flow and remained debt-free.
• Quantum forecast fiscal Q3 revenue of $89 million to $93 million and adjusted EBITDA of $8.1 million to $10.1 million. Growth is being driven by tape demand and major hyperscaler deals, though component availability may limit shipments.

Quantum NASDAQ: QMCO reported fiscal second-quarter revenue of $89.6 million, up 43% from a year earlier, as demand for its secondary storage products helped push its backlog to nearly $100 million.

The company also posted adjusted EBITDA of $11.1 million for the quarter ended September 30, 2026, compared with $500,000 a year earlier. President and CEO Hugues Meyrath said Quantum generated more EBITDA in the quarter than in the previous seven fiscal years combined.

Revenue rose 11% sequentially and exceeded the high end of the company’s guidance range of $80 million to $84 million, primarily because of price and volume mix, Chief Accounting Officer Hiral Patel said. Demand outpaced available supply in some areas, particularly media and tape, contributing to the record backlog.

Profitability Improves Despite GAAP Loss

Quantum’s GAAP gross margin rose to 41%, up 3.4 percentage points from the year-earlier quarter. Patel attributed the improvement to stronger pricing and cost execution, but cautioned that pricing volatility tied to component shortages would remain a headwind.

GAAP operating income was $6.8 million, while non-GAAP operating income was $9.9 million. The company reported a GAAP net loss of $44.8 million, or $1.14 per share, including a $51.5 million negative impact from the change in fair value of warrant liabilities.

On a non-GAAP basis, Quantum reported net income of $9.8 million, or 25 cents per share, compared with a net loss of $7.1 million in the prior-year quarter. Adjusted EBITDA exceeded the high end of the company’s guidance by $4.1 million.

Operating cash flow was approximately $14 million, up from about $900,000 in the preceding quarter. Patel said the result reflected stronger operating performance and benefited from normal working-capital timing, including accounts payable. Cash, cash equivalents and restricted cash totaled approximately $67.5 million at quarter-end, up from $54.6 million in the prior quarter.

Quantum remained debt-free after repaying all outstanding debt in its fiscal first quarter and incurred no interest expense in the second quarter, Patel said.

Tape Demand and Large Deals Drive Growth

Meyrath said tape remained Quantum’s most consistent growth driver, while demand from hyperscale customers increased more than 2.6 times year over year. Revenue rose across all regions, and the company’s core channel business grew approximately 30% globally.

Quantum secured its largest ActiveScale order to date and closed multiple seven-figure ActiveScale Cold Storage deals, Meyrath said. The company also received a major order from a hyperscaler for its Scalar i7 RAPTOR product following an evaluation lasting more than three years. He said production of the product is expected to ramp significantly in coming quarters.

The CEO said Quantum had an easier time obtaining hard disk drives during the quarter, although at higher prices. He cautioned that it was unclear how quickly IBM would ramp tape drive production. Meyrath also said Fujifilm was investing to expand media capacity, while he expected Sony’s output to be relatively flat next year.

Asked about margins over the next 18 months, Meyrath said the goal was to get closer to 43% as soon as possible, while noting that margins could vary with product mix and customer type.

Third-Quarter Outlook

For the fiscal third quarter, Quantum forecast revenue of $89 million to $93 million, representing approximately 22% year-over-year growth at the midpoint. Patel said near-term revenue upside would depend on the company’s ability to secure components and ship additional orders.

The company projected adjusted EBITDA of $8.1 million to $10.1 million and non-GAAP net income of 10 cents to 30 cents per share. It expects non-GAAP operating expenses of $27 million to $29 million, reflecting sales commissions and a faster pace of research and development hiring.

Meyrath also welcomed Jim Clancy as chief operating officer. Clancy had served on Quantum’s board during the past year.

About Quantum (NASDAQ:QMCO)

Quantum Corporation NASDAQ: QMCO provides data storage, management and protection solutions for organizations that generate and retain large volumes of unstructured data. Its offerings are designed to help customers store, protect, archive and access information across on-premises, cloud and hybrid environments.

The company's product portfolio has included Scalar tape libraries and LTO tape storage products, DXi deduplication and backup appliances, and software-defined storage solutions such as ActiveScale object storage.

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