Quantum Corporation reported a decline in financial performance for the three and six months ended September 30, 2024, compared to the same periods in 2023. Total revenue for the third quarter was $70.5 million, down 7% from $75.7 million, while revenue for the first half of the fiscal year decreased by 16% to $141.8 million from $168.2 million. The decline in revenue was primarily attributed to a significant drop in product sales, particularly a 23% decrease in product revenue for the six-month period, largely due to reduced demand from large hyperscale customers and a downturn in the tape market.

Gross profit also fell, with the third quarter gross profit at $29.3 million, a 10.6% decrease from $32.7 million in the prior year. For the first half, gross profit was $55.4 million, down from $68.4 million. The gross margin for the six months ended September 30, 2024, was 39.1%, a decline from 40.7% in the previous year, reflecting a less favorable revenue mix.

The company reported a net loss of $13.5 million for the third quarter, compared to a loss of $3.3 million in the same quarter of 2023. For the first half, the net loss increased to $34.3 million from $12.5 million. The loss per share attributable to common stockholders for the third quarter was $(2.82), significantly higher than $(0.70) in the prior year.

Operating expenses showed mixed results; total operating expenses for the third quarter were slightly lower at $36.2 million compared to $36.4 million in 2023. However, general and administrative expenses surged by 36% due to non-recurring costs related to the restatement of historical financial statements.

In terms of strategic developments, Quantum executed a 1-for-20 reverse stock split on August 26, 2024, reducing outstanding shares from approximately 95.9 million to about 4.8 million. The company also amended its credit agreements, which included waivers for net leverage ratio and minimum liquidity covenants, providing additional liquidity. As of September 30, 2024, total liabilities increased to $316.5 million from $309.1 million, while total current liabilities decreased significantly from $249.9 million to $134.6 million.

Cash and cash equivalents decreased to $16.7 million from $25.7 million as of March 31, 2024. The company reported net cash used in operating activities of $17.2 million for the first half of 2024, compared to $11.3 million in the same period of 2023.