Quantum has reported a 12.7 percent drop on revenues to $62.7 million and widening net losses of $46.45 million for Q2 of its fiscal 2026 ended September 30, according to recently filed financial results.
CEO Hugues Meyrath said: “Revenue for the quarter was at the high end of the expected range, which we believe reflects the initial traction from our decisive actions to refresh and reinvigorate our sales organization.”
The company also went into cost control mode to improve margins, wiping more than $4.5 million from operating expenses in the quarter, reducing the total to $31.7 million. “Additionally, we are making progress on our ongoing restructuring efforts aimed at right-sizing the business.”
Quantum spent $3.3 million on restructuring charges versus $383,000 a year ago, with the bulk of the cuts happening in Q2. The product revenue segment results were:
Primary storage systems revenue dropped 10.1 percent on the year, secondary storage systems fell 15.2 percent, device and media dipped 3.5 percent, services shrank 13.1 percent, and royalties plunged 26.9 percent. The secondary storage systems, such as DXi deduping appliances, Scalar tape and ActiveScale, made up almost a third of Quantum’s revenues.
During the earnings call, Meyrath said: “These results demonstrate the initial benefits of the restructuring we implemented in June. Although there is still more work to be done, I believe this puts the company on the right track and sets the stage for continued progress in the quarters ahead.”
Fixing Quantum’s debt problem has been a main priority: “We reached a key milestone toward our goal of becoming debt-free by entering into a definitive agreement with Dialectic to convert approximately $52 million in term debt to senior secured convertible notes subject to shareholder approval. At the same time, we also eliminated the existing leverage and minimum liquidity requirements and agreed that $15 million of proceeds from our standby equity purchase agreement can be used for additional working capital if required.”
He claimed this is the “best financial position that Quantum has been in for some time,” and assuming shareholder approval for reference debt exchange is granted, Quantum will have eliminated $140 million in total debt from the balance sheet since debts peaked in 2020.
Meyrath said: “We closed the quarter with one of the largest backlogs in recent history, over $25 million compared to our historical target range of $8 million to $10 million, underscoring strong sales traction and customer confidence.”
New chief product officer Geoff Barrall is reviewing product developments. Meyrath talked about StorNext, saying it is in the midst of updating the roadmap and “realigning resources” to “put more energy into our core StorNext customers.”
The fresh faces in the senior sales team, together with a revamped go-to-market strategy and a strengthened financial structure, means Quantum has the “foundation in place to grow the business,” the CEO claimed.
The revenue outlook for Quantum’s Q3 is $67 million ± $2 million, a 2.5 percent year-on-year decrease at the midpoint, which is a much reduced decline in revenues from the double digits Blocks and Files come to expect. Could revenues rebound upwards in a quarter or two?
