Quantum Corporation

Greetings and welcome to the Quantens Corporation Second Quarter Fiscal 2026 Financial Results Conference Call. At this time, all participants are in listen-only mode. A brief question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please signal the operator by pressing star and zero on your telephone keypad. As a reminder, this conference is being recorded for replay purposes. It is now my pleasure to introduce your host, Quantum's Vice President, Corporate Affairs and Corporate Secretary, Tara Ilgis. Please go ahead.

Good afternoon, and thank you for joining today's conference call to discuss Quantum's second quarter fiscal 2026 financial results. With me on today's call are Hughes Mayref, Quantum CEO, and Laura Nash, Chief Accounting Officer. Following management's prepared remarks, we will open the call to questions from analysts. Before we begin, I would like to remind you that comments made on today's call may include forward-looking statements. All statements, other than statements of historical fact, should be viewed as forward-looking, including any projections of revenue, margins, expenses, adjusted EBITDA, adjusted net income, cash flows, or other financial, operational, or performance topics. These statements involve known and unknown risks and uncertainties that we refer to as risk factors. Risk factors may cause our actual results to differ materially from our forecast. For more information, please refer to the detailed descriptions we provide about these and additional risk factors under the risk factors section in our 10-K and 10-Qs filed with the Securities and Exchange Commission. The company does not intend to update or alter forward-looking statements once they are issued, whether as a result of new information, future events, or otherwise, except where required by applicable law. Please note that today's press release and management statement during today's call will include certain financial information in GAAP and non-GAAP measures. We will include definitions and reconciliations of GAAP to non-GAAP items in our press release. With that, it's my pleasure to turn the call over to Quantum CEO, Yuzme Rath.

Thank you, Tara, and good afternoon, everyone. Thank you for joining us for our second quarter earnings conference call. As announced earlier this afternoon, we made solid progress during the quarter with revenue at the high end of our guidance range, non-GAAP operating expenses $5 million lower from the prior quarter, and positive adjusted EBITDA. These results demonstrate the initial benefits of the restructuring we implemented in June. Although there is still more work to be done, I believe this puts the company on the right track and sets the stage for continued progress in the quarters ahead. Also notable during the quarter, we reached a key milestone toward our goal of becoming debt-free by entering into a definitive agreement with Dialectic to convert approximately $52 million in term debt to senior secured convertible notes subject to shareholder approval. At the same time, we also eliminated the existing leverage and minimum liquidity requirements and agreed that $15 million of proceeds from our standby equity purchase agreement can be used for additional working capital if required. This important milestone in our financial transformation provides increased financial flexibility to execute on our operating initiatives and revitalize go-to-market strategy. To underscore this point, I can confidently say that this is the best financial position that Quantum has been in for some time. Assuming we receive shareholder approval for the prior reference debt exchange, The company will have eliminated $140 million in total debt from the balance sheet since the peak debt in 2020. As I discussed last quarter, since taking on the CEO role, I focused on building a leadership team and board of directors that combine deep market expertise with operational excellence. Most recently, we added Jeff Beryl as Chief Product Officer, who is highly respected technology innovator and leader with decades-long track record across the enterprise storage industry. He founded BlueArk, served as CTO of Hitachi Venterra, and most recently was CTO at Index Engines, where he led product and engineering strategies that shaped several categories defining storage and data management platforms. At Quantum, Jeff is conducting a comprehensive review of our product portfolio and pipeline. identifying along with sales where we can deliver the greatest value, sharpen roadmap priorities, and align engineering investments directly with customer needs and market opportunities. His leadership is ensuring that our innovation engine is tightly focused on the solutions and use cases where Quantum can lead and win. This alignment across product, sales, and customer success is already fostering a faster, more data-driven decision cycle, one that's anchored in real-world customer feedback and measurable return on investment. As part of our revitalized go-to-market strategy, our CRO and I met with more than 60 customers and partners this quarter. What this confirmed is that Quantum has a very loyal customer and partner install base, as well as a very solid sales team. Our customers believe in the value we provide and they want us to succeed. Regionally, we're seeing strong execution across the globe. EMEA continues to execute and perform well. APAC revenue more than doubled quarter over quarter following our shift to a new distribution model. As a reminder, we nominated new exclusive distributors after ending our relationship with Quantum Storage Asia, also known as QSA. QSA is an unrelated and unaffiliated entity and is not authorized to use our name, sell our products, or sell our support. Under Greg Pugmire's leadership, the Americas business rebounded and outperformed other regions, reflecting the tighter structure and coordination between inside and field sales teams. I would also like to point out that we closed the quarter with one of the largest backlogs in recent history, over $25 million, compared to our historical target range of $8 to $10 million, underscoring strong sales traction and customer confidence. Ultimately, our focus remains on the customer experience, aligning more deeply with trusted long-term partners to deliver transformative data solutions at scale across industries and borders. One of the most meaningful proof points this quarter was winning the Library of Congress 100-Year Archive Project. After a rigorous two-year evaluation, they moved away from a competing platform and selected Quantum's active-scale code storage and scale our i7 Raptor to preserve the nation's most valuable digital archive for generations to come. This wasn't just a competitive win. It was validation of the architecture we've been building. ActiveScale isn't like anything else on the market. It's an end-to-end object storage platform with intelligent tiering across flash, disk, and tape so customers can get the right performance at the right cost as data ages from hot to cold. Our patented two-dimensional erasure coding delivers a high level of durability, efficiency, and cyber resilience that traditional object stores can't match, which is exactly why an organization like the Library of Congress chose Quantum. Scalar i7 Raptor is the backbone of the solution. It's the industry's densest tape system, delivering up to 200% more capacity per rack outstanding power efficiency, and an automated cyber resilient architecture. It's built for true hyperscale archiving and customers see that. It recently achieved Veeam Ready status and won Best of Show at IBC, Europe's largest media and entertainment conference, reaffirming our leadership and secure high density storage for markets like government, research, and media. And we're building on that leadership. Last week, we introduced new capabilities in active scale that fundamentally changed what cold data can do. With industry-first ranged restore and more than five times faster access to small objects, customers can now pull back only the data they need instead of rehydrating entire files. That means long-term archives and AI data lakes can behave like active query-ready datasets. Cold data becomes live data, instantly usable for AI training, inference, analytics, compliance, you name it. No other vendor can do that. On the innovation front, I also want to highlight our strategic partnership with Entanglement. They chose Quantum as the storage fabric for the next generation AI and HPC data centers. The future of AI isn't just about faster compute. It's about secure, scalable, high durability data infrastructure that can feed those compute engines continuously and efficiently. Our solutions give them exactly that, tiered sovereign cyber resilient storage with the scale and performance AI requires. Together, we're enabling a new class of regionalized AI infrastructure, one that brings compute to the data, protects the data with post-quantum encryption, and supports massive AI and HPC workloads at scale. This partnership underscores something we're seeing across the market. The next era of AI depends on intelligent data platform and Quantum is becoming the platform of choice. With that, let me turn the call over to Laura Nash, our Chief Accounting Officer, to review our second fiscal quarter results in more detail and our third fiscal quarter outlook. Laura, please go ahead.