Quantum Corporation

Ladies and gentlemen, greetings and welcome to the Quantum Corporation Fiscal Fourth Quarter and Full Year 2026 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow a formal presentation. If anyone should require operator assistance, please press star 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 Ilges. Please go ahead.

Good afternoon and thank you for joining today's conference call to discuss Quantum's fiscal fourth quarter and full fiscal year 2026 financial results. With me on today's call are Hugues Meyrath, Quantum CEO, and William White, our Chief Financial Officer. Following management's prepared remarks, we will open the call up 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 metrics. 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 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 statements 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, Hugues Meyrath.

Thank you, Tara, and good afternoon, everyone. Thank you all for joining us today. I'll start with an overview of our fourth quarter. I'm pleased to report that we delivered a strong close to fiscal 2026. Our fourth quarter revenue of $78 million was $10 million above our guidance midpoint of 5% quarter-over-quarter and 27% year-over-year. Demand was solid across our storage solutions. driven by continued growth in data and increasing AI-related workloads. Our ability to grow faster was limited by supply chain and fulfillment timing, particularly around disk and tape drives, which continues to be a factor for us in the near term. That said, we expect greater backlog conversion heading into the second half of this fiscal year. What we're hearing from our customers is very consistent. They're dealing with much higher data volumes and looking for better ways to manage at scale. Rising primary storage costs and lengthy supply chain for flash and disk are affecting their ability to grow within budget. Our constraints are increasingly putting their growth at risk, especially in AI, HPC, and research protocols. That's where we're seeing increasing demand for our solutions. Our ongoing focus is to support our customers' need to manage the right data for the right workload at the right cost. With our portfolio across Scalar, DXi, ActiveScale, and StoreNext, we can support both high-performance requirements and long-term, lower-cost storage in a single, integrated approach. This is a critical priority as customers look for practical ways to manage both growth and cost in their environments. We're seeing very strong momentum in object storage with revenue from our active-scale solutions tripling year-over-year driven by new use cases around large-scale data management and AI workloads. Adoption of active-scale cold storage solution continues to ramp and we expect ongoing strong demand due to our unique capabilities and performance. We're also seeing more customers actively moving data out of primary storage and adopting tiered storage architectures. That's driving increased interest in tape and object storage, particularly in large scale environments where cost and power really matter. As an example, we recently announced a partnership with Pink Elephant. Pink Elephant is a sovereign MSP in Europe who are using their solutions to deliver cost-effective and energy-efficient data resilience services. The true value of active scale was evident following an incident involving a fire in one of their data centers. And may I say the fire was unrelated to our equipment, but because they have deployed active scale across multiple data centers, while the effect of data center was down, their service remained and many more. Thank you. who will be using active-scale code storage with our integrated tape libraries to post their full content archive. We also continue to see existing customers expand their active-scale environments towards hundreds of petabytes on the way to exabyte scale. I would now like to talk about our sales performance. We ended the quarter with great pipeline momentum and with a record $45 million backlog. which is largely tied to supply availability, particularly around disk and tape components. Tape library sales and funnel are incredibly strong. However, we're currently limited by IBM's ability to deliver more tape drives. We're actively managing the supply chain challenges with our partners and expect to see much better conversion of the backlog as we move through the second half of the fiscal year. We will continue to navigate the industry-wide supply constraints, but expect continued volatility in the coming months. Looking at the full year, fiscal 2026 was a year of clear progress for Quantum. This past year, most of our growth was in the enterprise storage market, delivering a healthier revenue mix for the company. Since I assumed the CEO role in June, we focused on improving execution, Lowering our cost structure and strengthening the balance sheet. Those actions are reflected in our results. We strengthened our balance sheet through a combination of fully paying off our term debt obligations, converting notes into common stock, and increasing our cash balance through a $100 million equity raise. We're particularly proud of the quality of the investors in this latest offering as it validates our strategy and market position. simply said, quantum is in its strongest financial position in decades. With this major financial transformation, plus our sales momentum and innovative products we're developing, I'm feeling very positive for the future. As we move into fiscal 2027, we're in a much stronger position than we were a year ago. Demand continues to grow and we expect this momentum to persist over the next 24 months. We're seeing our pipeline grow as organizations continue to adjust their storage strategies in response to AI, cost, and power constraints. Our priorities remain the same, drive sustained revenue growth, recovery of margin towards 40%, improve operational efficiency, and continue executing with focus and discipline across all functions of the business. Overall, Quantum is operating from a position of renewed strength. I'm very excited about the opportunity we have in front of us as the proliferation of AI-driven data rapidly reshapes the industry and drives demand for our tiered storage solutions. With that, I'll turn it over to Will to go through the financials.