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Quantum (QMCO) Q1 Loss Wider Than Expected, Sales Fall Y/Y
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Quantum Corporation (QMCO - Free Report) reported a first-quarter fiscal 2025 non-GAAP loss of 9 cents per share, wider than the Zacks Consensus Estimate of a loss of 2 cents. The company incurred a loss of 4 cents per share in the year-ago quarter.
QMCO generated revenues of $71.3 million, down 23% year over year. The top line missed the consensus mark by 0.9%. The decline in revenues is primarily attributed to lower contributions from hyperscale customers and reduced sales in tape media and royalty business.
Management highlighted a temporary headwind to gross margins due to a shift in product mix and supply constraints that hurt its results during the quarter. These issues have elevated the current order backlog to above-standard levels. However, momentum in its Myriad and ActiveScale products is a plus.
Product revenues declined 30% year over year to $41 million.
Service and subscription revenues totaled $27.5 million compared with $31 million in the previous year's quarter.
Royalty business generated $2.9 million in revenues, down 2% year over year.
Quantum Corporation Price, Consensus and EPS Surprise
Non-GAAP gross profit of $26.3 million decreased 26.7% year over year. Non-GAAP gross margin was down 190 basis points (bps) to 36.9% due to revenue mix shift and supply chain-related expenses.
Total operating expenses of $43.9 million rose 7.5%. Operating loss totaled $17.7 million compared with $5 million in the prior-year quarter.
Non-GAAP operating expenses fell 13.2% year over year to $30.8 million. The downtick was owing to efforts aimed at enhancing productivity
Adjusted EBITDA loss was $3.1 million against income of $1.5 million a year ago. The loss was due to top-line contraction, partially moderated by reduced operating costs.
Adjusted EBITDA margin was down 600 bps to 4.4%.
Cash Flow & Liquidity
In the quarter under review, QMCO used $2.4 million of net cash from operating activities compared with $9.4 million in the year-earlier quarter.
As of Jun 30, 2024, Quantum’s cash, cash equivalents and restricted cash amounted to $17.5 million, down from $25.7 million a year earlier.
Fiscal Q2 Guidance
Net sales are estimated at $73 million (+/-$2 million).
Non-GAAP adjusted basic net loss per share is projected at 6 cents, (+/-2 cents).
Adjusted EBITDA is expected to be roughly breakeven.
The guidance also assumes an effective annual tax rate of negative 14% and an average basic share count of nearly 96 million.
BlackBerry’s (BB - Free Report) first-quarter fiscal 2025 adjusted loss per share of 3 cents was narrower than the company’s estimate of a loss of 4-6 cents. In the year-ago quarter, it reported non-GAAP earnings of 6 cents per share. The Zacks Consensus Estimate was pegged at a loss of 4 cents per share.
Shares of BB have lost 49.3% in the past year.
Badger Meter, Inc (BMI - Free Report) reported earnings per share (EPS) of $1.12 for second-quarter 2024, beating the Zacks Consensus Estimate by 14.3%. Also, the bottom line compared favorably with the year-ago quarter’s EPS of 76 cents.
Shares of BMI have gained 15.6% in the past year.
SAP SE (SAP - Free Report) reported second-quarter 2024 non-IFRS earnings of €1.10 ($1.18) per share, climbing 59% from the year-ago quarter’s levels. The Zacks Consensus Estimate was pegged at $1.01.
In the past year, shares of SAP have gained 53.3%.
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Quantum (QMCO) Q1 Loss Wider Than Expected, Sales Fall Y/Y
Quantum Corporation (QMCO - Free Report) reported a first-quarter fiscal 2025 non-GAAP loss of 9 cents per share, wider than the Zacks Consensus Estimate of a loss of 2 cents. The company incurred a loss of 4 cents per share in the year-ago quarter.
QMCO generated revenues of $71.3 million, down 23% year over year. The top line missed the consensus mark by 0.9%. The decline in revenues is primarily attributed to lower contributions from hyperscale customers and reduced sales in tape media and royalty business.
Management highlighted a temporary headwind to gross margins due to a shift in product mix and supply constraints that hurt its results during the quarter. These issues have elevated the current order backlog to above-standard levels. However, momentum in its Myriad and ActiveScale products is a plus.
Product revenues declined 30% year over year to $41 million.
Service and subscription revenues totaled $27.5 million compared with $31 million in the previous year's quarter.
Royalty business generated $2.9 million in revenues, down 2% year over year.
Quantum Corporation Price, Consensus and EPS Surprise
Quantum Corporation price-consensus-eps-surprise-chart | Quantum Corporation Quote
Margins
Non-GAAP gross profit of $26.3 million decreased 26.7% year over year. Non-GAAP gross margin was down 190 basis points (bps) to 36.9% due to revenue mix shift and supply chain-related expenses.
Total operating expenses of $43.9 million rose 7.5%. Operating loss totaled $17.7 million compared with $5 million in the prior-year quarter.
Non-GAAP operating expenses fell 13.2% year over year to $30.8 million. The downtick was owing to efforts aimed at enhancing productivity
Adjusted EBITDA loss was $3.1 million against income of $1.5 million a year ago. The loss was due to top-line contraction, partially moderated by reduced operating costs.
Adjusted EBITDA margin was down 600 bps to 4.4%.
Cash Flow & Liquidity
In the quarter under review, QMCO used $2.4 million of net cash from operating activities compared with $9.4 million in the year-earlier quarter.
As of Jun 30, 2024, Quantum’s cash, cash equivalents and restricted cash amounted to $17.5 million, down from $25.7 million a year earlier.
Fiscal Q2 Guidance
Net sales are estimated at $73 million (+/-$2 million).
Non-GAAP adjusted basic net loss per share is projected at 6 cents, (+/-2 cents).
Adjusted EBITDA is expected to be roughly breakeven.
The guidance also assumes an effective annual tax rate of negative 14% and an average basic share count of nearly 96 million.
Zacks Rank
QMCO currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Companies
BlackBerry’s (BB - Free Report) first-quarter fiscal 2025 adjusted loss per share of 3 cents was narrower than the company’s estimate of a loss of 4-6 cents. In the year-ago quarter, it reported non-GAAP earnings of 6 cents per share. The Zacks Consensus Estimate was pegged at a loss of 4 cents per share.
Shares of BB have lost 49.3% in the past year.
Badger Meter, Inc (BMI - Free Report) reported earnings per share (EPS) of $1.12 for second-quarter 2024, beating the Zacks Consensus Estimate by 14.3%. Also, the bottom line compared favorably with the year-ago quarter’s EPS of 76 cents.
Shares of BMI have gained 15.6% in the past year.
SAP SE (SAP - Free Report) reported second-quarter 2024 non-IFRS earnings of €1.10 ($1.18) per share, climbing 59% from the year-ago quarter’s levels. The Zacks Consensus Estimate was pegged at $1.01.
In the past year, shares of SAP have gained 53.3%.