Quantum Reports Fiscal Full Year 2024 Financial Results
Fiscal 2024 Financial Summary
-
Revenue was
$311.6 million -
GAAP gross profit was
$124.9 million , or 40% of revenue -
GAAP net loss was
$41.3 million , or ($0.43 ) per share -
Annual recurring revenue was
$145 million -
Subscription ARR was up 33% year-over-year at
$17.8 million -
Adjusted non-GAAP net loss was
$27.5 million , or ($0.29 ) per share -
Adjusted EBITDA was
($5.3) million
“Following the recent completion of our financial re-evaluation process, we are pleased to be back discussing our operations and financials, including results for fiscal 2024,” stated
“Our full year 2024 results reflect a significant reduction of revenue from our largest hyperscale customer, which we had expected would scale down over time but instead stopped placing orders at the end of fiscal Q1 2024. While extremely disappointed with the impact from significantly lower revenue year-over-year, we have been proactively accelerating our business transformation. During this time, our team continues to focus on improving the Company’s capital structure as well as optimizing our overall business operations.”
“These actions include improved focus and retooling of our sales and product initiatives in strategic growth areas; accelerating operational efficiencies and cost reductions to achieve
Fiscal 2024 vs. Prior Year
Revenue of
Total GAAP operating expenses in fiscal 2024 were
GAAP net loss in fiscal 2024 was
Adjusted EBITDA in fiscal 2024 was
For a reconciliation of GAAP to non-GAAP financial results, please see the financial reconciliation tables below.
Liquidity and Debt (as of
-
Cash, cash equivalents and restricted cash were
$25.9 million , compared to$26.2 million as ofMarch 31, 2023 . -
Total interest expense for the three- and twelve-month periods were
$4.1 million and$15.1 million , respectively, compared to$3.0 million and$10.6 million for the same periods a year ago. -
Outstanding term loan debt, excluding debt issuance costs, was
$87.9 million , compared to$74.7 million as ofMarch 31, 2023 . Outstanding borrowings on revolving credit facility was$26.6 million , compared to$16.8 million as ofMarch 31, 2023 .-
Subsequent to quarter end, we paid down
$12.3 million of term loan debt through improved working capital by outsourcing our service inventory logistics and management.
-
Subsequent to quarter end, we paid down
Guidance
For the fiscal first quarter of 2025, the Company expects the following guidance:
-
Revenues of
$72.0 million , plus or minus$2.0 million -
Non-GAAP adjusted basic net loss per share of (
$0.09 ), plus or minus$0.02 -
Adjusted EBITDA of approximately
($2.0) million
For fiscal year 2025, the Company expects the following outlook:
-
Revenues of
$310 million , plus or minus$10.0 million -
Non-GAAP adjusted basic earnings per share of (
$0.10 ), plus or minus$0.05 -
Adjusted EBITDA of
$15.0 million , plus or minus$5.0 million
This assumes an effective annual tax rate of negative 14%; non-GAAP adjusted net loss per share assumes an average basic share count of approximately 96 million in the fiscal first quarter of 2025 and approximately 96.4 million for the fiscal year 2025.
Conference Call and Webcast
Management will host a live conference call today,
A telephone replay of the conference call will be available approximately two hours after the conference call and will be available through
About Quantum
Quantum delivers end-to-end data management solutions designed for the AI era. With over four decades of experience, our data platform has allowed customers to extract the maximum value from their unique, unstructured data. From high-performance ingest that powers AI applications and demanding data-intensive workloads, to massive, durable data lakes to fuel AI models, Quantum delivers the most comprehensive and cost-efficient solutions. Leading organizations in life sciences, government, media and entertainment, research, and industrial technology trust Quantum with their most valuable asset – their data. Quantum is listed on Nasdaq (QMCO). For more information visit www.quantum.com.
Quantum and the Quantum logo are registered trademarks of
Forward-Looking Information
The results reported in this press release are preliminary and unaudited, and are subject to change. As previously disclosed, the Company is in the process of restating its previously issued results for its (i) audited consolidated financial statements for the fiscal years ended
The information provided in this press release may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (“Exchange Act”). These forward-looking statements are largely based on our current expectations and projections about future events and financial trends affecting our business. Such forward-looking statements include, in particular, statements related to future projections of our financial results, including for the first fiscal quarter of 2025 and fiscal year 2025; our focus and our strategy; expected benefits of our restructuring plan, including annualized savings and the timing of payback; and expectations with respect to revenue growth and EBITDA expansion in fiscal year 2025.
These forward-looking statements may be identified by the use of terms and phrases such as “anticipates”, “believes”, “can”, “could”, “estimates”, “expects”, “forecasts”, “intends”, “may”, “plans”, “projects”, “targets”, “will”, and similar expressions or variations of these terms and similar phrases. Additionally, statements concerning future matters and other statements regarding matters that are not historical are forward-looking statements. Investors are cautioned that these forward-looking statements relate to future events or our future performance and are subject to business, economic, and other risks and uncertainties, both known and unknown, that may cause actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements.
These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected, including without limitation, the following: risks related to the need to address the many challenges facing our business; the impact macroeconomic and inflationary conditions on our business, including potential disruptions to our supply chain, employees, operations, sales and overall market conditions; the competitive pressures we face; risks associated with executing our strategy; the distribution of our products and the delivery of our services effectively; the development and transition of new products and services and the enhancement of existing products and services to meet customer needs and respond to emerging technological trends; estimates and assumptions related to the cost (including any possible disruption of our business) and the anticipated benefits of the transformation and restructuring plans; the outcome of any claims and disputes; the ability to meet stock exchange continued listing standards; the possibility that the Nasdaq may delist our common stock; risks related to our ability to implement and maintain effective internal control over financial reporting in the future; and other risks that are described herein, including but not limited to the items discussed in “Risk Factors” in our filings with the
CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts, unaudited) |
|||||||
|
|
||||||
|
2024 |
|
2023 |
||||
|
|
|
Restated |
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
25,692 |
|
|
$ |
25,963 |
|
Restricted cash |
|
168 |
|
|
|
212 |
|
Accounts receivable, net of allowance for doubtful accounts of |
|
67,788 |
|
|
|
72,464 |
|
Manufacturing inventories |
|
17,753 |
|
|
|
19,441 |
|
Service parts inventories |
|
9,783 |
|
|
|
25,304 |
|
Prepaid expenses |
|
2,186 |
|
|
|
4,158 |
|
Other current assets |
|
8,414 |
|
|
|
5,513 |
|
Total current assets |
|
131,784 |
|
|
|
153,055 |
|
|
|
|
|
||||
Property and equipment, net |
|
12,028 |
|
|
|
16,555 |
|
Intangible assets, net |
|
1,669 |
|
|
|
4,941 |
|
|
|
12,969 |
|
|
|
12,969 |
|
Right-of-use assets, net |
|
9,425 |
|
|
|
10,291 |
|
Other long-term assets |
|
19,740 |
|
|
|
15,846 |
|
Total assets |
$ |
187,615 |
|
|
$ |
213,657 |
|
Liabilities and Stockholders’ Deficit |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
26,087 |
|
|
$ |
35,716 |
|
Accrued compensation |
|
18,214 |
|
|
|
15,710 |
|
Deferred revenue, current portion |
|
78,511 |
|
|
|
79,807 |
|
Term debt, current portion |
|
82,496 |
|
|
|
5,000 |
|
Revolving credit facility |
|
26,604 |
|
|
|
16,750 |
|
Warrant liabilities |
|
4,046 |
|
|
|
7,989 |
|
Other accrued liabilities |
|
13,986 |
|
|
|
13,666 |
|
Total current liabilities |
|
249,944 |
|
|
|
157,888 |
|
Deferred revenue, net of current portion |
|
38,176 |
|
|
|
35,495 |
|
Revolving credit facility |
|
— |
|
|
|
16,750 |
|
Term debt, net of current portion |
|
— |
|
|
|
66,354 |
|
Operating lease liabilities |
|
9,621 |
|
|
|
10,169 |
|
Other long-term liabilities |
|
11,372 |
|
|
|
11,370 |
|
Total liabilities |
|
309,113 |
|
|
|
298,026 |
|
|
|
|
|
||||
Stockholders’ deficit |
|
|
|
||||
Preferred stock: |
|
|
|
||||
Preferred stock, 20,000 shares authorized; no shares issued as of |
|
— |
|
|
|
— |
|
Common stock: |
|
|
|
||||
Common stock, |
|
959 |
|
|
|
936 |
|
Additional paid-in capital |
|
707,116 |
|
|
|
702,370 |
|
Accumulated deficit |
|
(827,380 |
) |
|
|
(786,094 |
) |
Accumulated other comprehensive loss |
|
(2,193 |
) |
|
|
(1,581 |
) |
Total stockholders' deficit |
|
(121,498 |
) |
|
|
(84,369 |
) |
Total liabilities and stockholders' deficit |
$ |
187,615 |
|
|
$ |
213,657 |
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands, except per share amounts, unaudited) |
|||||||
|
Year Ended |
||||||
|
2024 |
|
2023 |
||||
|
|
|
Restated |
||||
Revenue |
|
|
|
||||
Product |
$ |
174,879 |
|
|
$ |
274,854 |
|
Service and subscription |
|
126,590 |
|
|
|
133,518 |
|
Royalty |
|
10,131 |
|
|
|
13,705 |
|
Total revenue |
|
311,600 |
|
|
|
422,077 |
|
Cost of revenue |
|
|
|
||||
Product |
|
136,419 |
|
|
|
220,031 |
|
Service and subscription |
|
50,292 |
|
|
|
58,782 |
|
Total cost of revenue |
|
186,711 |
|
|
|
278,813 |
|
Gross profit |
|
124,889 |
|
|
|
143,264 |
|
Operating expenses |
|
|
|
||||
Sales and marketing |
|
60,893 |
|
|
|
66,034 |
|
General and administrative |
|
51,547 |
|
|
|
47,752 |
|
Research and development |
|
38,046 |
|
|
|
44,555 |
|
Restructuring charges |
|
3,280 |
|
|
|
1,605 |
|
Total operating expenses |
|
153,766 |
|
|
|
159,946 |
|
Loss from operations |
|
(28,877 |
) |
|
|
(16,682 |
) |
Other income (expense), net |
|
(1,746 |
) |
|
|
1,956 |
|
Interest expense |
|
(15,089 |
) |
|
|
(10,560 |
) |
Change in fair value of warrant liability |
|
5,137 |
|
|
|
10,250 |
|
Loss on debt extinguishment, net |
|
— |
|
|
|
(1,392 |
) |
Net loss before income taxes |
|
(40,575 |
) |
|
|
(16,428 |
) |
Income tax provision |
|
711 |
|
|
|
1,940 |
|
Net loss |
$ |
(41,286 |
) |
|
$ |
(18,368 |
) |
|
|
|
|
||||
Net loss per share - basic |
$ |
(0.43 |
) |
|
$ |
(0.20 |
) |
Net loss per share - diluted |
$ |
(0.43 |
) |
|
$ |
(0.28 |
) |
Weighted average shares - basic |
|
95,087 |
|
|
|
90,348 |
|
Weighted average shares - diluted |
|
95,087 |
|
|
|
91,188 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, unaudited) |
|||||||
|
Year Ended |
||||||
|
2024 |
|
2023 |
||||
|
|
|
Restated |
||||
Operating activities |
|
|
|
||||
Net loss |
$ |
(41,286 |
) |
|
$ |
(18,368 |
) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
|
|
|
||||
Depreciation and amortization |
|
9,313 |
|
|
|
10,118 |
|
Amortization of debt issuance costs |
|
2,735 |
|
|
|
1,624 |
|
Long-term debt related costs |
|
— |
|
|
|
992 |
|
Provision for manufacturing and service inventories |
|
6,490 |
|
|
|
18,052 |
|
Stock-based compensation |
|
4,721 |
|
|
|
10,750 |
|
Change in fair value of warrant liabilities |
|
(3,943 |
) |
|
|
(10,250 |
) |
Other non-cash |
|
3,304 |
|
|
|
(2,067 |
) |
Changes in assets and liabilities, net of effect of acquisitions: |
|
|
|
||||
Accounts receivable |
|
4,846 |
|
|
|
(2,966 |
) |
Manufacturing inventories |
|
(1,396 |
) |
|
|
(1,839 |
) |
Service parts inventories |
|
11,852 |
|
|
|
(3,503 |
) |
Accounts payable |
|
(11,193 |
) |
|
|
1,158 |
|
Prepaid expenses |
|
1,971 |
|
|
|
3,695 |
|
Deferred revenue |
|
1,386 |
|
|
|
(11,611 |
) |
Accrued compensation |
|
2,504 |
|
|
|
(431 |
) |
Other assets |
|
(2,197 |
) |
|
|
(1,270 |
) |
Other liabilities |
|
737 |
|
|
|
1,022 |
|
Net cash used in operating activities |
|
(10,156 |
) |
|
|
(4,894 |
) |
Investing activities |
|
|
|
||||
Purchases of property and equipment |
|
(5,869 |
) |
|
|
(12,581 |
) |
Business acquisitions |
|
— |
|
|
|
(3,020 |
) |
Net cash used in investing activities |
|
(5,869 |
) |
|
|
(15,601 |
) |
Financing activities |
|
|
|
||||
Borrowings of long-term debt, net of debt issuance costs |
|
12,541 |
|
|
|
— |
|
Repayments of long-term debt |
|
(5,747 |
) |
|
|
(24,596 |
) |
Borrowings of credit facility |
|
421,623 |
|
|
|
497,280 |
|
Repayments of credit facility |
|
(412,704 |
) |
|
|
(498,665 |
) |
Proceeds from issuance of common stock |
|
— |
|
|
|
67,146 |
|
Net cash provided by financing activities |
|
15,713 |
|
|
|
41,165 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
(3 |
) |
|
|
12 |
|
Net change in cash, cash equivalents, and restricted cash |
|
(315 |
) |
|
|
20,682 |
|
Cash, cash equivalents, and restricted cash at beginning of period |
|
26,175 |
|
|
|
5,493 |
|
Cash, cash equivalents, and restricted cash at end of period |
$ |
25,860 |
|
|
$ |
26,175 |
|
Supplemental disclosure of cash flow information |
|
|
|
||||
Cash paid for interest |
$ |
12,314 |
|
|
$ |
8,701 |
|
Cash paid for income taxes, net of refunds |
$ |
1,776 |
|
|
$ |
1,418 |
|
Non-cash transactions |
|
|
|
||||
Purchases of property and equipment included in accounts payable |
$ |
661 |
|
|
$ |
1,049 |
|
Transfer of manufacturing inventory to services inventory |
$ |
341 |
|
|
$ |
4,045 |
|
Transfer of manufacturing inventory to property and equipment |
$ |
264 |
|
|
$ |
343 |
|
Paid-in-kind interest |
$ |
2,314 |
|
|
$ |
319 |
|
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows: |
|||||||
Cash and cash equivalents |
$ |
25,692 |
|
|
$ |
25,963 |
|
Restricted cash, current |
|
168 |
|
|
|
212 |
|
Total cash, cash equivalents and restricted cash at the end of period |
$ |
25,860 |
|
|
$ |
26,175 |
|
NON-GAAP FINANCIAL MEASURES
To provide investors with additional information regarding our financial results, we have presented certain non-GAAP financial measures in this press release, including non-GAAP adjusted net loss, adjusted EBITDA, non-GAAP gross profit and non-GAAP operational expenses.
Adjusted EBITDA is a non-GAAP financial measure defined by us as net loss before interest expense, net, provision for income taxes, depreciation and amortization expense, stock-based compensation expense, restructuring charges, and other non-recurring expenses.
“GAAP net loss” as referred to in this press release represents “Net loss attributable to common stockholders”. Non-GAAP adjusted net income (loss) is a non-GAAP financial measure defined by us as net loss before restructuring charges, stock-based compensation expense, and other non-recurring (income) expenses. We calculate adjusted net income (Loss) per basic and diluted share using the above-referenced definition of adjusted net income (Loss).
We have provided below reconciliations of adjusted EBITDA to adjusted net income (loss), non-GAAP gross profit and non-GAAP operational expenses, to the most directly comparable
Our use of non-GAAP financial measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under
- Although depreciation and amortization expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
- Adjusted EBITDA does not reflect: (1) interest and tax payments that may represent a reduction in cash available to us; (2) capital expenditures, future requirements for capital expenditures or contractual commitments; (3) changes in, or cash requirements for, working capital needs; (4) the potentially dilutive impact of stock-based compensation expense; (5) potential future costs related to our long-term debt; (6) potential future restructuring expenses; (7) potential future costs related to business acquisitions; (8) gain (loss) on debt extinguishment, (9) and acquisition-related amortization of intangibles assets from business combinations, (10) fair market adjustments related to the Company’s warrants, or (11) manufacturing inventory provisions.
- Adjusted net income (loss) does not reflect: (1) potential future restructuring activities; (2) the potentially dilutive impact of stock-based compensation expense; (3) potential future costs related to our long-term debt; (4) potential future costs related to business acquisitions; (5) gain (loss) on debt extinguishment; (6) acquisition-related amortization of intangibles assets from business combinations; (7) fair market adjustments related to the Company’s warrants; or (8) manufacturing inventory provisions.
Other companies, including companies in our industry, may calculate non-GAAP financial measures differently, which reduces its usefulness as a comparative measure. Because of these and other limitations, you should consider adjusted EBITDA and adjusted net income (loss) along with other
In addition, this press release includes non-GAAP adjusted earnings or net loss per share and adjusted EBITDA, each a non-GAAP measure used to describe our expected performance. We have not presented a reconciliation of these non-GAAP measures to our most comparable GAAP financial measures, because the reconciliation could not be prepared without unreasonable effort. The information necessary to prepare the reconciliations is not available on a forward-looking basis and cannot be accurately predicted. The unavailable information could have a significant impact on the calculation of the comparable GAAP financial measure.
The tables below reconcile the non-GAAP financial measures of adjusted EBITDA, net income, diluted EPS, operating expenses and gross margin with the most directly comparable GAAP financial measures (in thousands, unaudited).
Adjusted EBITDA
|
Year Ended |
||||||
(in thousands) |
2024 |
|
2023 |
||||
|
|
|
Restated |
||||
Net loss |
$ |
(41,286 |
) |
|
$ |
(18,368 |
) |
Interest expense, net |
|
15,396 |
|
|
|
10,560 |
|
Provision for income taxes |
|
711 |
|
|
|
1,940 |
|
Depreciation expense |
|
6,103 |
|
|
|
5,475 |
|
Stock-based compensation expense |
|
4,721 |
|
|
|
10,750 |
|
Restructuring charges |
|
4,019 |
|
|
|
2,178 |
|
Loss on extinguishment of Senior Secured Term Loan |
|
— |
|
|
|
1,392 |
|
Amortization of acquisition related intangible assets |
|
3,272 |
|
|
|
4,643 |
|
Acquisition and debt related costs |
|
2,002 |
|
|
|
818 |
|
Non-recurring project costs |
|
4,895 |
|
|
|
— |
|
Fair value of warrants adjustments |
|
(5,137 |
) |
|
|
(10,250 |
) |
Service & Manufacturing inventory provision |
|
— |
|
|
|
12,004 |
|
Adjusted EBITDA |
$ |
(5,304 |
) |
|
$ |
21,142 |
|
Non-GAAP adjusted net income and net income (loss) per share
|
Year Ended |
||||||
(in thousands) |
2024 |
|
2023 |
||||
|
|
|
Restated |
||||
Net loss |
$ |
(41,286 |
) |
|
$ |
(18,368 |
) |
Stock-based compensation expense |
|
4,721 |
|
|
|
10,750 |
|
Restructuring charges |
|
4,019 |
|
|
|
2,178 |
|
Loss on extinguishment of Senior Secured Term Loan |
|
— |
|
|
|
1,392 |
|
Amortization of acquisition related intangible assets |
|
3,272 |
|
|
|
4,643 |
|
Acquisition and debt related costs |
|
2,002 |
|
|
|
818 |
|
Non-recurring project costs |
|
4,895 |
|
|
|
— |
|
Fair value of warrant adjustments |
|
(5,137 |
) |
|
|
(10,250 |
) |
Service & Manufacturing inventory provision |
|
— |
|
|
|
12,004 |
|
Adjusted net income (loss) |
$ |
(27,514 |
) |
|
$ |
3,167 |
|
|
|
|
|
||||
Adjusted net income (loss) per share – basic |
$ |
(0.29 |
) |
|
$ |
0.04 |
|
Adjusted net income (loss) per share - diluted |
$ |
(0.29 |
) |
|
$ |
0.03 |
|
Weighted average shares – basic |
|
95,087 |
|
|
|
90,348 |
|
Weighted average shares - diluted |
|
95,087 |
|
|
|
91,188 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240617465968/en/
Investor Relations Contacts:
P: 214-272-0070
E: sheltonir@sheltongroup.com
Source: