Quantum Corporation (QMCO) reported Q3 2024 results that underscored a challenging but stabilizing operating backdrop for a hardware-focused storage company transitioning to more software-enabled revenue. Revenue for the quarter stood at $71.93 million, down 21.64% year-over-year and down 4.96% quarter-over-quarter, with gross profit of $29.18 million (gross margin 40.57%). The company posted a net loss of $9.87 million and negative earnings per share of $2.06 for the quarter. EBITDA was negative at $3.12 million, and operating income was negative $5.72 million, reflecting persistent fixed cost absorption amid weaker top-line throughput. Free cash flow was negative at $10.48 million, and operating cash flow was also negative at $9.38 million for the period, highlighting ongoing cash burn. Quantum ended the period with $24.55 million in cash and cash equivalents and a total debt load of $125.67 million, yielding net debt of $101.12 million and a negative book value of equity (-$101.93 million). Liquidity and balance-sheet leverage remain the principal investor concerns, as current ratio sits at 0.59 and total liabilities exceed assets by a wide margin.
From a margin and profitability perspective, the gross margin remains a relative strength at approximately 40.6%, but operating and net margins remain negative (operating margin around -7.95%; net margin around -13.72%). The year-over-year revenue decline is consistent with the cyclical nature of storage hardware and the transition to higher-margin software-enabled offerings that Quantum has pursued (e.g., CatDV, StorNext, Scalar tape systems, and associated services). Management commentary, where available, has emphasized advancing recurring software and subscription-based revenue streams, cost discipline, and leveraging deferred revenue as a lever to improve gross-to-operating leverage over time. The near-term investment thesis remains high-risk/high-reward: debt refinancing and cash-burn containment are prerequisites to a durable upside, while continued pressure on hardware demand or execution risk in software monetization could extend the negative earnings trajectory.