Release Date: August 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Quantum Corp (QMCO, Financial) finished Q1 2025 with $71.3 million in revenue, aligning with expectations.
- The company secured an agreement with lenders, increasing liquidity by over $25 million and restructuring existing debt.
- Momentum in deploying all-flash options across the portfolio, with notable deals closed shortly after launch.
- Several notable active scale wins, including a significant deal with an NBA team for over 10 petabytes of storage.
- Subscription ARR increased approximately 29% year over year, demonstrating progress in business transformation.
Negative Points
- Revenue decreased approximately 23% year over year, primarily due to the loss of the largest hyperscaler customer.
- GAAP net loss for the quarter was $20.8 million, significantly higher than the $9.1 million loss in the same quarter last year.
- Supply constraints impacted the ability to ship higher-margin products, resulting in increased order backlog.
- Non-GAAP gross margin decreased to 36.9% from 38.8% in the prior year, affected by lower-margin revenue mix and higher manufacturing costs.
- Elevated levels of one-time expenses, over $10.7 million, are expected to persist into Q2 2025.
Q & A Highlights
Q: The subscription bookings were down to $3.2 million from $4.5 million a year ago. Is there a narrative behind that?
A: Kenneth Gianella, CFO: The decrease is mostly due to delays, particularly with some supply chain elements. We were anticipating higher shipments this quarter, which impacted the bookings.
Q: On the gross margin, the service gross margin went down 600 basis points both Q-on-Q and year over year. Why is that?
A: Kenneth Gianella, CFO: This was due to operational inefficiencies in some regions, particularly North America and Europe, and higher operating costs. It was not related to selling the receivable on the services business.
Q: Can you comment on the Q-on-Q bookings trend for Myriad active scale?
A: Jamies Lerner, CEO: We don't disclose specific numbers, but we are encouraged by the adoption of active scale, which stands out due to its ease of install and use, and its unique ability to support flash, disc, and tape simultaneously. Myriad is also performing well in trials and converting into sales.
Q: What went into stepping away from the fiscal year '25 guide provided last quarter?
A: Kenneth Gianella, CFO: We traditionally give the full-year outlook at the beginning of the fiscal year and do not reiterate it. Q1 was slightly down, but we anticipate catching up in the back half of the year despite some headwinds.
Q: Can you provide an update on the $16 million of operational efficiencies?
A: Kenneth Gianella, CFO: We are on track to achieve the $16 million in operational efficiencies by the end of the calendar year. Our OpEx last quarter was over $35 million, and this quarter it was $30.8 million, showing significant progress.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
