We finished Q3 ’25 with $72.6 million in revenue, GAAP gross margin of 43.8%, up 230 basis points quarter-over-quarter and adjusted EBITDA of positive $4.7 million, an increase of $5 million quarter-over-quarter.
— Jamie Lerner
03Detailed Report
QMCO
Company QMCO
Period
Q3 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedMay 29, 2026
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Executive Summary
Quantum’s QQ3 2025 results demonstrate meaningful operating improvement and a strategic pivot toward higher-margin, recurring revenue. Revenue came in at $72.6 million, GAAP gross margin expanded to 43.8% (up 230 bps QoQ), and non-GAAP operating expenses declined about 6% YoY, delivering a positive adjusted EBITDA of $4.7 million. Annual recurring revenue (ARR) reached $21.3 million in the quarter, up 29% YoY and ~9% sequentially, with subscription-based revenue comprising over 90% of new unit sales, underscoring the company’s transition to a more predictable revenue model. Backlog normalized near $9.3 million, signaling improved revenue visibility as supply-chain constraints ease. Management attributed much of the progress to self-help actions, a higher-margin product mix, and a large U.S. federal deal, while continuing to emphasize debt reduction and balance-sheet strengthening via a standby equity purchase agreement with Yorkville Advisors.
Key Performance Indicators
Revenue
Increasing
72.55M
QoQ: 2.95% | YoY: 1.69%
Gross Profit
Increasing
31.76M
43.77% margin
QoQ: 8.50% | YoY: 21.50%
Operating Income
Increasing
-3.86M
QoQ: 44.33% | YoY: 78.22%
Net Income
Decreasing
-71.43M
QoQ: -428.08% | YoY: -243.10%
EPS
Decreasing
-14.56
QoQ: -416.31% | YoY: -235.48%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue: $72.6M; YoY +~1.7%, QoQ +~3% (Q3 2025). Gross Profit: $31.76M; Gross Margin 43.8% (vs 40.6% YoY, 41.5% QoQ). Operating Income: -$3.86M; Operating Margin -5.32% (YoY improvement but negative due to mix). EBITDA: -$63.43M (GAAP); Adjusted EBITDA: +$4.7M (QoQ swing to profit). Net Income: -$71.43M; Net Income Margin -98.46% (driven by a large non-cash warrant liability related charge). EPS: -$14.56; EPS Diluted: -$14.56. OpEx (Non-GAAP): $30.1M; YoY -6% (cost containment). ARR (trailing 12 months): $141M; ARR as % of revenue: ~49%. Q3 ARR: $21.3M, +29% YoY and +9% QoQ; Subscription mix: >90% of new unit sales in the quarter. Cash & liquidity: Cash & equivalents end of period $20.6M; Net debt ~$133M; Total debt $146.4M. Free Cash Flow: -$4.25M; Operating Cash Flow: -$3.15M.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
72.55M
1.69%
2.95%
Gross Profit
31.76M
21.50%
8.50%
Operating Income
-3.86M
78.22%
44.33%
Net Income
-71.43M
-243.10%
-428.08%
EPS
-14.56
-235.48%
-416.31%
Key Financial Ratios
Gross Profit Margin
Good
43.80%
Gross profit margin is healthy and competitive within industry standards
Operating Profit Margin
Weak
-0.05%
Operating margin is below industry norms, profitability concerns
Net Profit Margin
Weak
-0.99%
Net profit margin is below industry norms, profitability concerns
Return on Assets
Weak
-0.43%
Return on assets suggests inefficient capital allocation
Return on Equity
Strong
36.60%
Return on equity demonstrates excellent capital efficiency and value creation
Current Ratio
Concern
0.37
Current ratio below safe levels, potential liquidity risk
Debt to Equity
Conservative
-0.75
Debt-to-equity shows conservative leverage and low financial risk
P/E Ratio
Negative
-0.93x
Negative earnings make P/E ratio not meaningful
Price to Book
Undervalued
-1.36x
Trading below book value, potential value opportunity or distressed
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