Quantum: Fiscal 3Q16 Financial Results

Quantum Corp. reported results for the fiscal third quarter 2016 ended December 31, 2015.
Fiscal Third Quarter 2016 Results:
(All comparisons relative to the fiscal third quarter 2015.)

• Revenue was $128.0 million, driven by continued strength in scale-out storage offset by overall weakness in the general storage market and pricing environment of commodity tape media products.
• Scale-out storage and related service revenue grew approximately $8.5 million to an all-time high of $35.7 million, a 31% increase, marking the 18th consecutive quarter of year-over-year growth.
• Royalty revenue increased $0.6 million to $11.3 million.
• Disk backup systems and related service revenue decreased to $19.6 million.
• Branded tape automation and related service revenue decreased to $38.5 million, while OEM tape automation and related service revenue decreased to $12.7 million.
• Devices and media revenue decreased to $10.2 million as a result of a $3.5 million decline in tape media revenue.
• GAAP and non-GAAP operating income of $2.0 million and $7.2 million, respectively.
• GAAP net loss was $0.3 million, or $0.00 per diluted share.
• Non-GAAP net income was $5.3 million, or $0.02 per diluted share.

Based on current market conditions, including tape media pricing dynamics and the difficulty in forecasting large and mega deals given their long sales cycles, Quantum provided the following guidance for the fiscal fourth quarter:

• Revenue of $118 million to $122 million.
• GAAP and non-GAAP gross margin of approximately 43-44%.
• GAAP and non-GAAP operating expenses of approximately $50 million to $51 million and $48 million to $49 million, respectively.
• Interest expense of $1.5 million and taxes of $400,000.
• GAAP and non-GAAP earnings per share of ($0.01) to $0.00 and $0.00 to $0.01, respectively.