Quantum Corporation (QMCO) Q2 2025 earnings summary

Executive summary

• Q2 FY25 revenue was $70.5 million, down 7% year-over-year, with a GAAP gross margin of 41.5% and break-even adjusted EBITDA; net loss widened to $13.5 million, or $2.82 per share, due to lower revenues and non-recurring costs.

• Operational improvements and restructuring have resulted in nearly $40 million in total savings since FY23, with positive free cash flow expected in the back half of FY25 and into FY26.

• The company is focusing on high-priority growth initiatives, particularly Myriad and ActiveScale, and evolving its sales model to drive growth.

• Subscription ARR grew 28% year-over-year to $19.6 million, reflecting traction in recurring revenue and a shift to subscription-based offerings.

• The company completed a 1-for-20 reverse stock split in August 2024, reducing outstanding shares to approximately 4.8 million.

Financial highlights

• Q2 revenue was $70.5 million, a 7% decrease year-over-year, with GAAP gross margin at 41.5%, up 490 basis points sequentially but down from 43.3% a year ago.

• Non-GAAP operating expenses were $30.4 million, down 9% year-over-year; total GAAP operating expenses were $36.2 million, flat year-over-year.

• Adjusted EBITDA was -$0.3 million, improved from -$3.1 million in the prior quarter.

• Net loss per share (basic and diluted) was $(2.82) for Q2 2024, compared to $(0.70) in Q2 2023.

• Interest expense rose to $6.1 million due to higher effective rates on term loans.

Outlook and guidance

• Q3 FY25 revenue expected to be $72 million ± $2 million; non-GAAP operating expense $31 million ± $1 million.

• Q3 adjusted net loss per share expected at -$0.75 ± $0.05; adjusted EBITDA expected at $2 million.

• FY25 revenue guidance updated to $280 million ± $5 million, with adjusted EBITDA of $3 million ± $2 million.

• Positive free cash flow anticipated in the second half of FY25 and for FY26.