TLDR
- QMCO beat Q1 EPS estimates with $0.18 per share vs. a consensus loss of $0.17, a +205.88% earnings surprise
- Revenue hit $80.8 million, topping estimates by 7.74% and up 26% year-over-year from $64.29 million
- Supply chain constraints on tape drives are limiting revenue upside despite strong customer demand
- Quantum is now debt-free, cash flow positive, and profitable for the first time since 2023
- Q2 revenue guidance set at approximately $82 million, with EBITDA expected at $6 million
Quantum Corporation (QMCO) stock jumped over 53% after the company reported fiscal Q1 2027 results that blew past Wall Street expectations on both the top and bottom lines.
The stock has now gained roughly 86.7% year-to-date, compared to the S&P 500’s 13.3% gain over the same period.
Non-GAAP EPS came in at $0.18, crushing the Zacks consensus estimate of a loss of $0.17 per share. That marks an earnings surprise of +205.88%.
Revenue for the quarter was $80.8 million, up approximately 4% sequentially and 26% from the $64.29 million reported a year ago. It also beat the consensus revenue estimate by 7.74%.
CEO Hugues Meyrath called it “another strong quarter,” noting that the result came in “well above” the company’s own guidance of $75 million.
GAAP gross margin came in at 39.3%, with GAAP operating income of $5 million. The company also generated positive operating cash flow of approximately $0.9 million.
On a GAAP basis, the net loss was $155.3 million, or $7.06 per share. However, that figure was driven almost entirely by $157.7 million in one-time, non-cash charges related to debt extinguishment, including a $129.7 million loss on convertible notes.
Excluding those items, non-GAAP net income was $4 million, or $0.18 per share, and adjusted EBITDA was $8 million.
Supply Chain Still the Biggest Obstacle
Despite the strong numbers, management was direct about the main challenge: tape drive supply is not keeping up with demand.
“Simply put, customers’ demand remains stronger than our ability to fulfill it,” Meyrath said on the earnings call. He added that the company is “still not getting adequate supply of tape drives.”
The company highlighted a large hyperscaler win in the Asia-Pacific region, centered on its Scalar i7 tape library. The deal was valued at “well over eight figures.”
Americas revenue rose more than 20% sequentially, while APAC revenue climbed more than 50%. Service revenue also picked up, rising approximately 10% quarter-over-quarter.
Debt-Free for the First Time Since 2023
One of the more notable developments: Quantum is now debt-free. Following its most recent fundraising, the company is also cash flow positive and profitable, Meyrath confirmed, calling it a first since 2023.
Backlog has increased and management expects it to remain strong through Q2.
Q2 Outlook
For fiscal Q2 2027, Quantum is guiding for revenue of approximately $82 million, plus or minus $2 million. Non-GAAP adjusted operating expenses are expected to be around $27 million, with adjusted EPS of $0.12 per share and adjusted EBITDA of $6 million.
CFO William White noted that near-term revenue upside will “largely depend on the extent to which we can fulfill and ship orders in a supply-constrained market.”
The company holds a Zacks Rank of #2 (Buy) heading into Q2.
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