Quantum announced that revenue for the third quarter of its 2015 fiscal year, which ended December 31, 2014, was $142.1m, down 3% versus the same period last year, and up 5% versus the previous quarter.
GAAP net income for the quarter was $6.9m, or $0.03 per diluted share, versus a net loss of $2.5m million (or $0.01 per diluted share) last year, and net income of $1.2m last quarter.
The results were below the low-end of previously issued guidance ($145 million to $150 million). The company attributed the sales decline to a 31% year-over-year drop in the revenue from its OEM tape automation partners.
Despite the drop in OEM revenue, Quantum’s scale-out storage business, which includes its StorNext product line, continued to experience significant growth.
During the earnings conference call with equity analysts, Quantum president and CEO Jon Gacek said that “since StorNext 5 became generally available early last year, StorNext and Lattus combined solutions have been adopted in some of the largest most demanding workflows around the world, and was one of the key contributors to our overall media and entertainment product revenue growing more than 150% year-over-year in Q3 and our mid-market media and entertainment product sales nearly tripling.”
Highlighting the success of the StorNext and Lattus product lines, Gacek said Quantum closed a $4m deal during the quarter for managing video in one of the world’s largest consumer electronics companies. Other significant M&E wins in the quarter include a sale of nearly $300,000 to a large media production company, and StorNext sales of more than $300,000 each to two of the top U.S. broadcast networks and a major international radio broadcaster.
On an overall basis, Quantum’s scale-out storage and related service revenue was $27m in the third quarter, up 55% from the year-earlier period and up 6% from the preceding quarter. Year-todate, the company’s scale-out storage products have seen growth of nearly 60% versus the first three quarters of fiscal 2014 year.
In a November 2014 press release, Quantum said its scale-out storage revenue had increased by nearly 60% during the first six months of its fiscal 2015, and with an annualized run-rate of more than $100m. At that time, the company attributed this growth to demand for its StorNext 5 high-performance shared storage and Lattus extended online storage solutions, from M&E customers including BBC Sport, MLB Network and UFC, who have deployed a suite of scale-out storage systems managed by StorNext 5. Quantum SVP Geoff Stedman, called StorNext a ‘hidden gem’ in Quantum’s portfolio, and said “an increasingly broad range of customers is recognizing the unique benefits it provides, including in conjunction with Lattus. To a great extent, this represents the triumph of specialized workflow-intelligent storage over general-purpose storage that simply can’t handle the complexities of effectively managing and protecting modern digital assets.”
The company ended the quarter with cash and cash equivalents of approximately $110m.
Quantum says it expects to post a GAAP net loss of $0.8m to $1.8m in its fiscal Q4, with revenue in the range of $130m to $135m, and GAAP and non-GAAP gross margin of approximately 43-45 percent.
Press Release: Quantum Corporation Reports Fiscal Third Quarter 2015 Results
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