Quantum (QMCO) investor relations material

Executive summary

• New CEO and key hires in sales and marketing are focused on transformation, operational improvement, and cost structure enhancements.

• Leadership team and Board strengthened with new directors to drive sales and operational execution.

• Emphasis on product-first approach, sales discipline, and channel partner engagement to capture growth in AI, media, and data protection markets.

• Operating expenses decreased 19% year-over-year, driven by cost reduction initiatives.

• The company continues to face a challenging macroeconomic environment, with longer sales cycles and unpredictable demand.

Financial highlights

• Q1 FY26 revenue was $64.3 million (£64.3M), down 11% year-over-year from $72.3 million, but up from the previous quarter.

• GAAP gross margin declined to 35.3% from 37.4% year-over-year, primarily due to inventory provisions and tariffs.

• GAAP net loss was $17.2 million (£17.2M), or ($1.87) per share, improved from $19.9 million loss a year ago but worse than the prior quarter.

• Non-GAAP net loss was $14.5 million (£14.5M), or ($1.58) per share, higher than both prior quarter and year-ago quarter.

• Adjusted EBITDA was negative $6.5 million (£6.5M), down from negative $2.2 million year-over-year.

Outlook and guidance

• Q2 FY26 revenue expected at $61 million (£61M) ± $2 million.

• Non-GAAP operating expenses projected to decline to ~$27 million (£27M) ± $2 million, reflecting cost reduction benefits.

• Non-GAAP adjusted net loss per share anticipated at negative $0.26 (£0.26) ± $0.10; adjusted EBITDA for Q2 expected to be approximately breakeven.

• Management expects to violate the net leverage ratio covenant under its term loan for the quarter ending December 31, 2025, raising substantial doubt about the company's ability to continue as a going concern.

• The company is actively seeking covenant waivers and evaluating restructuring or refinancing options for its debt.