Can you provide an update on the backlog number, given it was $45 million last quarter and you mentioned 'record levels'?

Management did not disclose the specific number but confirmed it is 'significantly higher' than the previous quarter. “We didn't give the number, Jacob, but it's significantly higher.”

How should we think about the trend of larger deals (over $3 million) for the rest of the year, and will the pipeline continue to grow from these larger deals?

Many of the large deals were enterprise deals, with one hyperscaler. As ActiveScale gains traction, it drives very large deals. The company expects the trend of larger deals to continue as it grows. “Yes, good question. A lot of those large deals were actually enterprise deals. There was one hyperscaler there, but a lot of them are also large enterprise deals. So as an active scale gains a stronger and stronger for the whole enterprise, these are typically very large deals as well. Yes. As the company's growing, I think you can expect most of those, yes.”

QMCO

Quantum (QMCO) Q1 FY27 earnings call: guidance and Q&A

Q: With IBM projecting easing in Q2/Q3 (calendar 2027), how does that align with current supply constraints, especially for tape drives?

Supply of tape drives remains inadequate and flat for the past several months, limiting revenue upside. While IBM mentioned increased production towards the back half of the year, the company has not yet seen an inflection point as of August. “Right now, the reason we're getting to around 82, which is mildly up, is because we're still not getting adequate supply of tape drives. So it's looking right now, it's continuing to be flat for the past handful of months. So I'm hoping to get a further update from IBM in the next week when I go there, but they've mentioned that they would increase production towards the back half of the year, but right now, as of the latest month, which is August. We're still not seeing the inflection point.”

Earnings call· Jun 2026 (Q1 FY27)· Information Technology· Aug 10, 2026

Source: earnings call transcript

Executive summary

Quantum Q1 FY27 — Strong Revenue Beat, Debt-Free, and Positive Non-GAAP Income

Quantum delivered a robust Q1 FY27, surpassing revenue and profitability expectations while achieving a debt-free balance sheet. The company is experiencing strong enterprise and hyperscaler demand, particularly for ActiveScale and Scalar i7 tape libraries, despite ongoing supply chain limitations. Management is focused on maintaining cost discipline and generating consistent positive cash flow amidst strategic investments in R&D and sales.

Highlights

Revenue of $80.8 million significantly exceeded guidance of $75 million.
Non-GAAP adjusted net income of $4 million ($0.18 per share) marked the first positive result since 2023.
Adjusted EBITDA reached $8 million, $5.5 million above the high end of guidance.
The company achieved a debt-free balance sheet with $54.6 million in cash, following a private placement and debt repayment.
GAAP gross margin improved to 39.3%, the highest level in five quarters, up 360 basis points sequentially and nearly 400 basis points year-over-year.

Concerns

Supply chain constraints, particularly for tape drives and certain disk drives, continue to limit the company's ability to fulfill strong customer demand.
Despite strong Q1 EBITDA, Q2 EBITDA guidance of $6 million reflects anticipated increases in OpEx due to sales commissions and R&D hiring, and conservative margin assumptions.
GAAP net loss was $155.3 million ($7.06 per share) due to one-time, non-cash items related to debt extinguishment and convertible notes.

Guidance & targets

Category	Target	Timeline	Confidence
Revenue	$82 million +/- $2 million high materiality	Q2 · FY27	High
Non-GAAP Adjusted Operating Expenses	$27 million +/- $1 million medium materiality	Q2 · FY27	High
Non-GAAP Adjusted Net Income per share	$0.10 +/- $0.10 per share high materiality	Q2 · FY27	High
Adjusted EBITDA	$6 million +/- $1 million high materiality	Q2 · FY27	High

Orderbook & backlog

Backlog Significantly higher Q1 FY27 end

increased significantly

Previous quarter backlog was $45 million. Management confirmed current backlog is 'significantly higher' but did not provide a specific number.

Deals & partnerships

European biometrics institution Renewal and expansion of ActiveScale deployment

Secured a significant renewal and expansion of an ActiveScale deployment. Once customers implement ActiveScale and experience its resilience, performance, and power efficiency, they typically see continued capacity extensions and footprint growth.

Hyperscaler (in APAC) Deployment of Scalar i7 tape library well over eight figures

Secured a significant hyperscaler deployment in APAC centered around our Scalar i7 tape library. This transaction was valued at well over eight figures. The I-7's unmatched density and power efficiency enabled this important technical win.

Risks & headwinds

Supply chain constraints Ongoing, expected to improve over the course of the year, but currently flat for tape drives as of August.

Demand remains stronger than our ability to fulfill it. Constraints around tape drive availability and certain disk drives.

Mitigation:Operations and supply chain did an outstanding job; partnership with Avnet for support and navigation.

Component availability and pricing pressures Ongoing.

Areas of focus, not quantified.

Mitigation:Stronger pricing and disciplined cost execution.

Uncertainty in Q2 gross margin Q2 FY27

Management being conservative in Q2 margin guidance.

Mitigation:Conservative guidance due to large deals in the pipeline and ongoing uncertainty.

What to watch in Q2 FY27

Tape drive supply improvement from IBM

Back half of the year (calendar 2027)

Current Still not seeing the inflection point as of August

Target Increased production from IBM

Why it matters

Critical for fulfilling strong customer demand and realizing revenue upside, as current supply constraints limit growth.

Right now, the reason we're getting to around 82, which is mildly up, is because we're still not getting adequate supply of tape drives. So it's looking right now, it's continuing to be flat for the past handful of months. So I'm hoping to get a further update from IBM in the next week when I go there, but they've mentioned that they would increase production towards the back half of the year, but right now, as of the latest month, which is August. We're still not seeing the inflection point.

Find out whether QMCO delivers this. Inve re-checks your case every morning.

Q&A highlights

Why is Q2 EBITDA guidance ($6M) lower than Q1 actual ($8M) despite similar revenue guidance?

The step down is primarily OpEx related, driven by increased sales commissions due to stronger performance and a higher pace of R&D hiring. Management is also being conservative on margins for Q2 due to uncertainty and large deals in the pipeline.

“So two parts. One, it is related to OpEx. As I mentioned, there are two main drivers there. I previously said that we're investing in R&D. That's our main growth area from an OpEx standpoint. We're also given the B2B, the B2B, the B2B, the B2B, the B2B, the B2B, the B2B. each we've had on revenue, we're anticipating conditions to be higher. So that's factoring it off X. From a margin standpoint, as mentioned, we're just simply, We're honestly looking and saying that we have some large deals coming in the pipe. We still have a lot of uncertainty, so we're being conservative in how we're doing margin going into Q2.”

asked by Jacob Stephan · answered by William White

2 min read 5 chapters

Detailed narrative

Strategic Execution and Market Demand

Quantum continues to execute its strategy, addressing customer challenges related to data growth, infrastructure costs, and power consumption. The company is seeing consistent demand for solutions that optimize storage economics, improve efficiency, reduce power consumption, and enable scalable data infrastructures. This quarter's performance reflects strong enterprise demand across the business and significant hyperscaler opportunities, despite ongoing supply chain limitations.

Geographic and Product Momentum

Revenue in the Americas increased over 20% sequentially, and APAC revenue grew over 50% sequentially, indicating broad customer demand. Service revenue increased approximately 10% quarter-over-quarter, stabilizing after years of decline. Tape-related royalty revenue also showed continued strength, supported by a 15% sequential increase in LTO capacity shipments, reinforcing the growing adoption of tape technologies for storage economics, power reduction, and cyber resilience.

Large Deal Wins and Product Adoption

The company experienced a dramatic increase in deals valued at over $1 million, with most exceeding $3 million. ActiveScale combined with tape remains a cornerstone offering, securing a significant renewal and expansion with a European biometrics institution. A notable hyperscaler deployment in APAC for the Scalar i7 tape library, valued at well over eight figures, highlights the product's density and power efficiency in hyperscale environments.

Financial Strength and Capital Structure

Quantum is now debt-free, cashflow positive, and profitable on a non-GAAP basis for the first time since 2023. This was achieved through $94.6 million in net proceeds from a private placement, with $56.8 million used for debt repayment, eliminating $144.8 million in prior debt. The company ended the quarter with $54.6 million in cash, significantly strengthening its balance sheet.

Operational Discipline and Cost Structure

The company's GAAP gross margins reached 39.3%, the highest in five quarters, driven by stronger pricing, disciplined cost execution, favorable standard costs, and inventory performance. Non-GAAP operating expenses were $25.1 million, below guidance, reflecting lower sales and marketing expenses and continued savings from prior restructuring actions. Management emphasized holding the cost discipline built and generating consistent positive cash flow.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.