One swallow doesn’t make a summer but two are encouraging and things are looking up for Quantum as it reports its fourth fiscal quarter 2026 results.
Its second consecutive growth quarter, ended March 31, 2026, saw $78 million in revenues, beating its $68 million guidance and increasing by 27.3 percent year-on-year. There was a GAAP net loss of $9.5 million, deepening from the year-ago $7.7 million loss. Full year revenues of $279.6 million were higher than a year ago's $274.1 million, and the $101 million net loss improved on the year-ago $115.1 million loss.
CEO Hugues Meyrath said: “Quantum delivered strong fourth quarter results with revenue of $78 million, representing 27% growth year-over-year. This performance reflects robust demand for our tiered storage solutions as the proliferation of AI-driven data rapidly reshapes the industry and enterprise storage infrastructure requirements.”
He said in the earnings call: “Demand was solid across our storage solutions, driven by continued growth in data and increasing AI-related workloads. Our ability to grow faster was limited by supply chain and fulfillment timing particularly around disk and tape drives, which continues to be a factor for us in the near term. That said, we expect greater backlog conversion heading into the second half of this fiscal year”.
Meyrath commented on the backlog and said more about Quantum’s supply chain issues: “We ended the quarter with great pipeline momentum and with a record $45 million backlog, which is largely tied to supply availability, particularly around disk and tape components. Tape library sales and funnel are incredibly strong. However, we're currently limited by IBM's ability to deliver more tape drives.”
He said: “IBM is continuing to ramp up production of tape drives throughout the year. Our understanding is still a little tight in this quarter in the June quarter. But as you go into September and December quarter, we should see a lot more tape drives out there, which would allow us to convert the backlog into revenue on the tape driver side.”
Meyrath noted: “We're seeing very strong momentum in object storage with revenue from our ActiveScale [disk+tape] solutions tripling year-over-year driven by new use cases around large-scale data management and AI workloads. Adoption of ActiveScale cold storage solution continues to ramp, and we expect ongoing strong demand due to our unique capabilities and performance.”
And this: “We're also seeing more customers actively moving data out of primary storage and adopting tiered storage architectures. That's driving increased interest in tape and object storage, particularly in large-scale environments where cost and power really matter.”
Another growth pointer: “We recently won a large deployment with a global sports network who will be using ActiveScale cold storage with our integrated tape libraries to host their full content archive. We also continue to see existing customers expand their ActiveScale environments towards hundreds of petabytes on the way to exabyte scale.”
It was a crazy quarter in some ways as disk and tape drive prices shot up again and again, leading to orders having to be requoted. For example, in this quarter, disk drive prices "increased 250 percent. Tape drives have started to increase in Q1 and continue to increase through Q2 with 2 more increases. … So you requote the best you can, but it's been difficult, especially in the March quarter because there were several successive increases that came out of the left field.”
This dynamic of the quarter “was particularly harmful for everybody in the market.” He foresees more price rises coming: “I think it's less volatile than like the March quarter, but we do expect to see continuing price increase across storage for the foreseeable future.”
GAAP operating expenses of $30.4 million, 39 percent of revenue, were down from the year-ago quarter’s $35.8 million, 58.5 percent of revenue.
Quantum’s cash liquidity and debt situation, as of March 31, 2026, has improved. Cash, cash equivalents and restricted cash were $16.2 million, compared to $16.6 million as of March 31, 2025. Total interest expense for the three- and twelve-month periods were $2.9 million and $21.6 million, respectively, compared to $6.8 million and $24.0 million for the same periods a year ago. Outstanding term loan debt, excluding debt issuance costs, was $55.9 million, compared to $102.5 million as of March 31, 2025.
Meyrath stated: “Simply said, Quantum is in its strongest financial position in decades.”
It’s in a much-improved situation and positioned for growth: “As we look to fiscal 2027, Quantum is operating from a position of renewed strength and expanding strategic relevance. Over the past year, we have transformed our business by significantly lowering our cost structure, while also sharpening our sales execution and go-to-market strategy. And more recently, we successfully completed a series of transactions that eliminated our outstanding debt and added cash to the balance sheet in support of our growth initiatives.
Next quarter’s outlook is for revenues of $75 million +/- $2 million, 17 percent up Y/Y at the mid-point.
Comment
The AI boom is causing DRAM, NAND and HDD supply shortages and consequent price rises. These help Quantum's move-older-data-off-flash-onto-disk-and-tape messaging but also hinder it in fulfilling orders due to delivery delays and price rises between order taking and product delivery. Meyrath said things were getting better on this front as a refinanced Quantum had more cash: "Having some capital … allows us to … go place orders a little bit more aggressively in terms of procuring both servers and disk drives and flash drives,” which will help with backlog conversion “as we get into the summer and the second half of the year.”