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QMCO Q2 Earnings Call Centers on Tape Demand and Supply Limits
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Key Takeaways
Quantum's hyperscale tape demand rose over 2.6 times as its backlog approached a record $100 million.
Four hyperscalers provide multi-quarter demand plans, while Scalar i7 RAPTOR secured a major order.
QMCO expects Q3 revenues of $91 million, plus or minus $2 million, but tape-drive supply remains uncertain.
Quantum Corporation (QMCO - Free Report) is seeing growing demand for tape-based storage, but component availability remains central to how quickly orders translate into shipments. Management highlighted major hyperscale wins and a record backlog on its second-quarter fiscal 2027 earnings call.
The discussion also exposed uneven supply recovery, contrasting customer trends and a margin target that depends partly on business mix.
QMCO's Q3 Outlook Hinges on Component Availability
Chief accounting officer Hiral Patel guided fiscal third-quarter revenues to $91 million, plus or minus $2 million. At the midpoint, that represents approximately 22% year-over-year growth.
Patel projected non-GAAP earnings of $0.20 per share, plus or minus $0.10, and adjusted EBITDA of $9.1 million, plus or minus $1 million. Expected non-GAAP operating expenses are $28 million, plus or minus $1 million.
CEO Hugues Meyrath emphasized that demand and bookings remain strong, while component availability governs near-term revenue upside. QMCO finished the quarter with a record backlog approaching $100 million.
Quantum Builds on Hyperscale Tape Momentum
Meyrath said that hyperscale demand rose more than 2.6 times year over year. Four customers now provide multi-quarter demand plans, strengthening visibility.
He highlighted a major Scalar i7 RAPTOR order after a hyperscaler evaluation lasting over three years. Reliability, density and infrastructure efficiency differentiated the system.
Meyrath expects i7 RAPTOR production to ramp in coming quarters. He linked tape adoption to customers' need to control infrastructure costs amid AI-driven data growth.
QMCO Faces an Uneven Supply Recovery
A Lake Street Capital Markets analyst questioned supply capacity. Meyrath replied that better hard disk drive availability helped QMCO fulfill delayed orders, although prices remained elevated.
Tape drives were less predictable. Meyrath noted IBM's stated direction to double production year over year, but said that the timing of supply increases across upcoming calendar quarters remained uncertain.
Regarding tape media, Meyrath expects Sony's capacity to remain roughly flat next year, while Fujifilm is investing to quintuple production. He expects benefits from that expansion next year or so.
Quantum Describes Divergent Customer Trends
Asked by a Cantor Fitzgerald analyst about customer mix, Meyrath characterized mid-market revenue as flat to slightly higher. Elevated drive prices complicate smaller-customer sales.
Enterprise demand remained robust, while Meyrath expects hyperscalers to contribute a greater revenue share going forward, rather than reflecting a share increase in the just-reported quarter.
Quantum's global core channel business grew approximately 30% year over year. Management also cited record North American bookings and nearly twice as many core transactions above $500,000.
QMCO Expands Its Cold Storage Offering
Meyrath reported that Quantum's largest ActiveScale Cold Storage order and several seven-figure deals. Enterprise customers lead adoption, with potential expansion into managed service providers and neoscalers.
The platform combines storage technologies to balance accessibility, power consumption and cost. A Lake Street Capital Markets analyst asked about its ramp, prompting Meyrath to emphasize steady enterprise progress.
Management also introduced Autonomous Data Management, which connects analytics with automated data placement across ActiveScale and tape. Meyrath said the approach optimizes where information resides according to value, risk and cost.
Quantum Focuses on Margin Quality and Liquidity
GAAP gross margin increased to 41%, aided by pricing and cost execution. Chief Accounting Officer Hiral Patel reported adjusted earnings of $0.25 per share, above the Zacks Consensus Estimate of $0.13. Revenues rose 42.9% year over year to $89.6 million, beating the $82 million estimate.
Quantum Corporation Price, Consensus and EPS Surprise
In response to Lake Street Capital Markets, Meyrath reiterated a 43% gross margin goal over the next 18 months, while cautioning that customer and product mix create variability.
Patel reported approximately $14 million in quarterly operating cash flow, aided partly by working capital timing. With $67.5 million in cash and restricted cash, Quantum remained debt-free following its earlier repayments.
QMCO Keeps Execution and Supply in Focus
Meyrath credited better procurement and manufacturing execution for Quantum's progress. The priority is fulfilling orders and expanding customer relationships.
He balanced confidence in secondary storage demand with caution over component shortages and margin variability.
Zacks Rank and Style Scores Present Mixed Signals
QMCO carries a Zacks Rank #3 (Hold) at present, indicating a more neutral near-term outlook than the top-ranked stocks. Its Growth Score of A is stronger than its Value Score of F and Momentum Score of D. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The stock's VGM Score of C reflects a mixed combination of value, growth and momentum characteristics. The Zacks Rank may change as analysts revise earnings estimates following the reported results.
View the Zacks #1 Rank List
Image: Bigstock
QMCO Q2 Earnings Call Centers on Tape Demand and Supply Limits
Key Takeaways
Quantum Corporation (QMCO - Free Report) is seeing growing demand for tape-based storage, but component availability remains central to how quickly orders translate into shipments. Management highlighted major hyperscale wins and a record backlog on its second-quarter fiscal 2027 earnings call.
The discussion also exposed uneven supply recovery, contrasting customer trends and a margin target that depends partly on business mix.
QMCO's Q3 Outlook Hinges on Component Availability
Chief accounting officer Hiral Patel guided fiscal third-quarter revenues to $91 million, plus or minus $2 million. At the midpoint, that represents approximately 22% year-over-year growth.
Patel projected non-GAAP earnings of $0.20 per share, plus or minus $0.10, and adjusted EBITDA of $9.1 million, plus or minus $1 million. Expected non-GAAP operating expenses are $28 million, plus or minus $1 million.
CEO Hugues Meyrath emphasized that demand and bookings remain strong, while component availability governs near-term revenue upside. QMCO finished the quarter with a record backlog approaching $100 million.
Quantum Builds on Hyperscale Tape Momentum
Meyrath said that hyperscale demand rose more than 2.6 times year over year. Four customers now provide multi-quarter demand plans, strengthening visibility.
He highlighted a major Scalar i7 RAPTOR order after a hyperscaler evaluation lasting over three years. Reliability, density and infrastructure efficiency differentiated the system.
Meyrath expects i7 RAPTOR production to ramp in coming quarters. He linked tape adoption to customers' need to control infrastructure costs amid AI-driven data growth.
QMCO Faces an Uneven Supply Recovery
A Lake Street Capital Markets analyst questioned supply capacity. Meyrath replied that better hard disk drive availability helped QMCO fulfill delayed orders, although prices remained elevated.
Tape drives were less predictable. Meyrath noted IBM's stated direction to double production year over year, but said that the timing of supply increases across upcoming calendar quarters remained uncertain.
Regarding tape media, Meyrath expects Sony's capacity to remain roughly flat next year, while Fujifilm is investing to quintuple production. He expects benefits from that expansion next year or so.
Quantum Describes Divergent Customer Trends
Asked by a Cantor Fitzgerald analyst about customer mix, Meyrath characterized mid-market revenue as flat to slightly higher. Elevated drive prices complicate smaller-customer sales.
Enterprise demand remained robust, while Meyrath expects hyperscalers to contribute a greater revenue share going forward, rather than reflecting a share increase in the just-reported quarter.
Quantum's global core channel business grew approximately 30% year over year. Management also cited record North American bookings and nearly twice as many core transactions above $500,000.
QMCO Expands Its Cold Storage Offering
Meyrath reported that Quantum's largest ActiveScale Cold Storage order and several seven-figure deals. Enterprise customers lead adoption, with potential expansion into managed service providers and neoscalers.
The platform combines storage technologies to balance accessibility, power consumption and cost. A Lake Street Capital Markets analyst asked about its ramp, prompting Meyrath to emphasize steady enterprise progress.
Management also introduced Autonomous Data Management, which connects analytics with automated data placement across ActiveScale and tape. Meyrath said the approach optimizes where information resides according to value, risk and cost.
Quantum Focuses on Margin Quality and Liquidity
GAAP gross margin increased to 41%, aided by pricing and cost execution. Chief Accounting Officer Hiral Patel reported adjusted earnings of $0.25 per share, above the Zacks Consensus Estimate of $0.13. Revenues rose 42.9% year over year to $89.6 million, beating the $82 million estimate.
Quantum Corporation Price, Consensus and EPS Surprise
Quantum Corporation price-consensus-eps-surprise-chart | Quantum Corporation Quote
In response to Lake Street Capital Markets, Meyrath reiterated a 43% gross margin goal over the next 18 months, while cautioning that customer and product mix create variability.
Patel reported approximately $14 million in quarterly operating cash flow, aided partly by working capital timing. With $67.5 million in cash and restricted cash, Quantum remained debt-free following its earlier repayments.
QMCO Keeps Execution and Supply in Focus
Meyrath credited better procurement and manufacturing execution for Quantum's progress. The priority is fulfilling orders and expanding customer relationships.
He balanced confidence in secondary storage demand with caution over component shortages and margin variability.
Zacks Rank and Style Scores Present Mixed Signals
QMCO carries a Zacks Rank #3 (Hold) at present, indicating a more neutral near-term outlook than the top-ranked stocks. Its Growth Score of A is stronger than its Value Score of F and Momentum Score of D. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The stock's VGM Score of C reflects a mixed combination of value, growth and momentum characteristics. The Zacks Rank may change as analysts revise earnings estimates following the reported results.