Quantum Corporation — Fiscal Second Quarter 2027 Earnings Summary

Financial Performance:

• Revenue increased 42.9% year-over-year to $89.6 million and 11% sequentially.
• GAAP gross margin expanded to 41.0%, an increase of 170 basis points sequentially and 340 basis points year-over-year.
• GAAP operating expenses were $29.9 million (33.4% of revenue), down from $31.7 million (50.6% of revenue) in the prior year period.
• Non-GAAP adjusted operating expenses were $26.9 million, up from $24.8 million in the prior year period.
• GAAP net loss was $44.8 million ($1.14 per share), compared to a net loss of $46.5 million ($3.49 per share) in the prior year; the current quarter included a $51.6 million non-cash charge for the change in fair value of warrant liabilities.
• Non-GAAP adjusted net income was $9.8 million ($0.25 per share), compared to a non-GAAP adjusted net loss of $7.1 million ($0.54 per share) in the prior year.
• Non-GAAP adjusted EBITDA was $11.1 million, compared to $0.5 million in the prior year.
• Cash, cash equivalents, and restricted cash increased to $67.5 million as of September 30, 2026, from $16.2 million as of March 31, 2026.
• The Company had no outstanding debt at quarter-end, compared to $55.9 million in outstanding term loan debt (excluding debt issuance costs) in the prior fiscal fourth quarter.
• Deferred revenue totaled $117.5 million ($75.2 million current, $42.3 million non-current) as of September 30, 2026, compared to $114.7 million ($75.7 million current, $39.0 million non-current) as of March 31, 2026.
• Warrant liabilities increased to $83.3 million as of September 30, 2026, from $14.1 million as of March 31, 2026.

Guidance and Future Outlook:

• Fiscal third quarter 2027 revenue guidance is $91.0 million, plus or minus $2 million.
• Fiscal third quarter 2027 non-GAAP adjusted operating expenses guidance is $28 million, plus or minus $1 million.
• Fiscal third quarter 2027 non-GAAP adjusted basic net income per share guidance is $0.20, plus or minus $0.10.
• Fiscal third quarter 2027 non-GAAP adjusted EBITDA guidance is $9.1 million, plus or minus $1 million.
• Guidance assumes an effective annual tax rate of 3% and an average basic share count of approximately 39.5 million.
• The Company cannot reconcile non-GAAP guidance to GAAP measures due to the inability to reliably predict warrant fair value changes, restructuring charges, special project costs, and stock-based compensation.

Business Segments and Product Lines:

• Tape remained the most consistent growth driver, with hyperscale demand increasing more than 2.6 times year-over-year.
• The Company secured a major hyperscale deployment of its Scalar i7 Raptor following a multi-year evaluation.
• The Company closed its largest ActiveScale Cold Storage order in company history, nearly doubling the number of core transactions above $500,000.
• Quantum Autonomous Data Management (ADM) was introduced, combining intelligence with action and integrating with ActiveScale and the tape portfolio.
• Supply constraints continued to affect shipment timing in certain areas, though the ability to secure disk drives has improved.
• Demand remains ahead of available supply across hyperscale, enterprise, government, and critical-infrastructure customers.

Market and Competitive Landscape:

• Strong customer demand contributed to a record order backlog of nearly $100 million.
• Customers recognize tape's strategic role in addressing AI-driven infrastructure strain.
• Opportunities are expanding across hyperscale, enterprise, government, and critical-infrastructure sectors driven by AI, analytics, compliance, and cyber-resilience requirements.

Risks and Challenges:

• Forward-looking statements are subject to risks including macroeconomic and inflationary conditions, supply chain disruptions, and competitive pressures.
• Dependence on a limited number of large customers, including hyperscale customers, and the timing of their orders.
• Fluctuations in the fair value of warrant liabilities may materially affect GAAP results.
• Backlog is not necessarily indicative of future revenue as orders may be delayed, modified, reduced, or canceled.
• Risks related to the execution of cost reduction and restructuring initiatives and the timing of revenue recognition.

Management Commentary and Tone:

• CEO Hugues Meyrath stated the quarter marked the fourth consecutive quarter of sequential revenue growth and the second quarter of non-GAAP profitability.
• Management highlighted meaningful progress in strengthening execution, improving the financial position, and positioning the company for sustainable growth.
• Management noted the company is well-positioned to capitalize on accelerating data growth driven by AI and other factors.

Other Key Points:

• The Company converted a convertible note into approximately 14.1 million shares of common stock during the six months ended September 30, 2026.
• The Company raised $94.3 million from a private placement of common stock during the six months ended September 30, 2026.
• The Company repaid $56.8 million of long-term debt, net, during the six months ended September 30, 2026.
• The Company issued $1.3 million in warrants in connection with debt amendments during the six months ended September 30, 2026.
• The Company recorded a $51.6 million non-cash adjustment related to the change in fair value of warrant liabilities in the second quarter of 2027.
• The Company recorded a $129.7 million non-cash adjustment related to the change in fair value of a convertible note during the six months ended September 30, 2026.