Quantum Corp. has reported results for the fiscal fourth quarter and full year 2017 ending Friday 31 March 2017.
Quantum is an expert in scale-out tiered storage, archive and data protection, providing intelligent solutions for capturing, sharing and preserving digital assets over the entire data lifecycle.
Fiscal fourth quarter 2017 financial results
(All comparisons are relative to the fiscal fourth quarter 2016 unless otherwise stated.
Total revenue was $120.8 million, up from $120.0 million.
Branded revenue was $103.5 million, a 7 per cent increase.
Scale-out tiered storage revenue was $31.0 million, compared to $33.1 million, primarily reflecting fewer large deals than the same quarter a year earlier.
Total data protection revenue grew 5 per cent to $79.7 million, consisting of $21.5 million in disk backup systems revenue (up 19 per cent), $40.2 million in tape automation revenue (down 10 per cent overall, with OEM revenue down 45 per cent and branded revenue flat) and $18.1 million in devices and media revenue (up 38 per cent).
Royalty revenue was $10.1 million, compared to $11.0 million.
GAAP operating income was $1.1 million, and non-GAAP operating income was $4.2 million, compared to a loss of $50.1 million and income of $8.2 million, respectively. (Fiscal fourth quarter 2016 results included a non-cash goodwill impairment charge of $55.6 million.)
GAAP net loss was $1.9 million, or $0.06 per diluted share, compared to GAAP net loss of $52.9 million, and non-GAAP net income was $1.6 million, or $0.05 per diluted share, compared to non-GAAP net income of $6.2 million.
Fiscal 2017 full year financial results
(All comparisons are relative to the fiscal 2016 full year results unless otherwise stated.)
- Total revenue grew 6 per cent to $505.3 million, up from $476.0 million.
- Branded revenue grew 11 per cent to $432.1 million, up from $388.3 million.
- Scale-out tiered storage revenue grew 17 per cent to $148.4 million, up from $126.5 million.
- Total data protection revenue grew 3 per cent to $318.2 million, consisting of $84.6 million in disk backup systems revenue (up 16 per cent), $172.7 million in tape automation revenue (down 9 per cent overall, with OEM revenue down 27 per cent and branded revenue down 3 per cent) and $60.9 million in devices and media revenue (up 33 per cent).
- Royalty revenue was $38.8 million, compared to $41.2 million.
- GAAP operating income was $12.1 million, and non-GAAP operating income was $23.0 million, compared to a loss of $67.8 million and income of $3.9 million, respectively.
- GAAP net income was $3.6 million, or $0.11 per diluted share, and non-GAAP net income was $15.8 million, or $0.46 per diluted share, compared to a loss of $76.4 million and $3.3 million, respectively.
Leveraging flash technology
"Our solid fourth quarter results closed out a year of strong overall performance and execution"
“Our solid fourth quarter results closed out a year of strong overall performance and execution,” said Jon Gacek, President and CEO of Quantum. “We generated year-over-year growth and significantly improved profitability in a year of ongoing industry disruption. One of the keys to this success was the fact that we grew scale-out tiered storage revenue for the ninth consecutive year, building on our leadership in traditional rich media markets and expanding our footprint in new verticals and use cases. In addition, despite continuing challenges in the data protection market, we turned around this part of our business in fiscal 2017, driving significant growth in disk backup systems and extending our position as the market leader in tape automation.”
“From a product standpoint, we delivered innovative new solutions and features for scale-out tiered storage, disk backup and tape archive, including new ways to leverage flash technology and the cloud. Finally, we secured a large financing package that addresses our November 2017 convertible debt and provides a stable, more flexible capital structure over the next five years. All of this makes us well-positioned for further success in fiscal 2018 and beyond.”
Updating strategic direction for 2018
“We are also excited about the addition of Adalio Sanchez and Marc Rothman to our board of directors and expect to add the final director in our reconstituted board this month. As soon as the new board is fully in place, we will go through a comprehensive strategic review—taking a detailed look at the market and its trends, our product and solution capabilities, our sales model, R&D roadmaps, expenses and areas of investment, and capital structure—and then make decisions on how to take Quantum to the next level and drive increased shareholder value.”
“When that process is complete, we will provide guidance for fiscal 2018 and update our strategic direction for the year and beyond. In the meantime, our current expectation is that we will grow total revenue year-over-year in the fiscal first quarter, driven by growth in scale-out tiered storage revenue.”
Other recent business highlights
Building on its momentum in video surveillance, Quantum closed the highest number of surveillance deals in a quarter to date, which included its first surveillance sales wins in life sciences use cases. Four additional video management software (VMS) partners were also certified to support the company’s full range of scale-out storage tiers, bringing the total number of VMS partners certified for full tiering to 20 and covering 80 per cent of the market. Adding to Quantum’s industry accolades, Milestone Systems—one of the top VMS providers—named Quantum ‘Technology Partner of the Year’ for 2016 in the Americas and, for the second consecutive year, ‘Best Solution Partner’ in the Asia Pacific region.
Quantum announced purpose-built 4K video reference architectures that leverage the company’s StorNext-powered, disk- and flash-based workflow storage systems to maximise 4K stream counts and optimise performance levels in accordance with users’ specific needs. Based on exhaustive testing with real-world metrics, the new reference architectures empower media facilities to make better-informed investments in 4K storage infrastructure.
Quantum announced a strategic relationship with Veritone Inc., a provider of cognitive analytics
Quantum announced a strategic relationship with Veritone Inc., a provider of cognitive analytics. Veritone aiWARE—a hybrid on-premise and cloud version of Veritone’s best-in-class, cloud-based artificial intelligence platform—will be offered as an integrated solution with StorNext. This combination will allow users to leverage the power of Veritone’s cognitive analytics—along with top cognitive engines in areas such as face detection, object recognition and transcription—to extract new value from their on-premise video and audio content without having to move it to the cloud.The company introduced StorNext 6, a major new release of the StorNext platform that provides a unique combination of performance and advanced data management It is designed to help users overcome the challenges of working with growing volumes of higher-resolution content and enable them to capitalise on the opportunities to re-monetise or re-purpose that content. Features include more efficient and cost-effective ways to meet project performance demands, share and access content across geographically distributed teams, and manage and protect archived content.
Quantum’s board of directors approved a 1-for-8 reverse stock split of its common stock, which began trading on a split-adjusted basis on Wednesday, 19 April 2017.
The company appointed Adalio Sanchez and Marc Rothman to its board of directors. Sanchez is a 35-year information technology industry veteran who spent most of his career at IBM Corp., including 16 years in senior executive and global general management roles. He is currently president of S Group Advisory LLC, a firm providing expertise and management consulting services. Rothman is the Executive Vice President and Chief Financial Officer at VeriFone Inc., responsible for leading the company’s finance, information technology, and real estate organisations, and has more than 30 years of global finance and merger and acquisition experience.