Quantum (QMCO) 6 Jun 232023 Q4 Earnings call transcript

Greetings. Welcome to Quantum’s fourth quarter and fiscal year 2023 financial results conference call.

At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require Operator assistance during the conference, please press star, zero on your telephone keypad. is conference this note being recorded. Please

now Quantum’s Chief will turn you the Cabrera, Brian to over Administrative begin. conference may I Officer. you, Thank

call quarter and discuss Quantum’s results. Chief morning thank for Cabrera, today’s Good Officer. you I’m Brian Quantum’s fiscal and conference fourth Administrative XXXX financial joining to

our is call followed to from and analysts. by then Ken first today Chairman We’ll the Speaking Gianella, open Jamie Lerner, CEO, our CFO. questions

statements statements. comments projections may cash our today flows the historical to All differ our viewed statements, be from involve uncertainties statements during risks actual our than or expenses, of adjusted These materially and any forward-looking of Some forecast. EBITDA, income, may other as other factors adjusted financial, call of we refer margins, performance risk including cause to fact, topics. and as unknown net include or forward-looking, results known to revenue, operational Risk factors.

information, refer are not events and Commission. of and we update with or please our alter new are descriptions issued XX-Q otherwise, our Securities or to XX-K detailed factors information, Factors in Risk Exchange and risk more the the additional For section the these do We required we filed about provide whether by as intend applicable course result of statements as once except a forward-looking to they future law. under

items today’s press we GAAP during our GAAP We we in non-GAAP in during make measures. definitions make and will financial statements management release release. financial reconciliations note include that our statements and our of non-GAAP press Please today’s call include to and the and information call certain

Lerner. CEO, to would like I to Now over the call Jamie? our and Chairman Jamie turn

all and today. us Brian, thank for joining you Thank you

end fiscal our guidance. fourth Earlier of exceeded results XXXX high the for full our today, revenue results we that with and quarter announced

improve XXXX line with do we’re we adjusted we I we fiscal about year strengthen work will the are walk and release. to in million, have bottom actions We the and in and chain, delivered of press results. launches, EBITDA least our excited described feel product through revenue to to $XX taken results, about our company we supply have good recent at but pleased Ken Today, our as

here and year-over-year, non-GAAP improved of gross of Slide the the guidance of year $XXX,XXX the million finished $X to is the of performance. driven end and results higher ago, fiscal X, an with XX.X% in the brief from year. EBITDA to adjusted full XX.X%, compared quarter revenue, margin revenue high a overview by increase quarter and $XXX.X million Turning above We of a operating

driven full the low revenue, our customers delivered demand revenue was in Adjusted For fiscal video year-over-year supply surveillance by XX.X% XXXX primarily primarily growth $XXX hyperscaler million. driven strong in hyperscale year cost along an was XXXX, gross inflationary with of XX.X% million margin chain. of and higher $XX.X fiscal EBITDA our fiscal or of by mix we business. Non-GAAP million, XXXX $XXX.X business profit of increase a from pressures in in

the from I to to quarter. share insights turning some Slide X, like operational Now would

two of revenue an had in execution. a year guidance strong another exceeded year. increase hyperscale We incredible sequential prior QX and of royalty operational We and quarter versus hyperscale EBITDA sales on improved based revenue revenue, fiscal in with growth the sales, times

business hyperscale and by mix profile. our influence characterized is segment that margin discussed, generally has on margins, strong had we revenue a lower As so the

our business and pleased In our improving video sales, addition efforts are seeing of to progress the we strong the full are portfolio sell to surveillance we products. hyperscale in with

the Americas. of work, results internationally especially We starting continue are to the transformation see in improving we and realize conditions our to

pipeline. seeing a component the revenue bigger becoming mix As deals of large a our an volume in example, are higher we of

enterprise larger of part of transformation, As the directly back in premise in sales areas cloud are data from of repatriation providers. deals, engaging on especially we

AIML traction scale of are gaining deal We in expanding our the products financial a we at projects closed of other XXX illustration largest large encouraged extremely sector portfolio Asia is end-to-end that also deeper the banks and one this a company. An in to of Fortune supporting was verticals. and

working opportunities are several also We on global technology partnership OEM providers. with

customer, analytics is accounts at Just AI-driven fiscal global selected add strategy. we will ARR This and is quarter, with and StorNext QX, notable example broader content team storing data at video better outcomes. year we them are an solution scale OEM our we a a catalog, us were XXXX. in It drive their engagement League drive and is enrich perfect to content. drive end-to-end subscription fan to a in strategy existing team of solutions represents Baseball to this our their past move fiscal Expanding to also secured coast Quantum our video to from them in a analyze Major existing that of win that active of it enriching managing engagement. analyzing, to help improved This an to to and our is provider able and streaming key front for of by provide part the west footprint coming image business together opportunity

an just our of These sales sales strategy. highlights are example transformation

recurring this revenue. revenue execution our growing mix, total to focus we annual As includes improve

market. grew all-flash subscription $XX.X the Another to in anticipate our year-over-year we We that subscription by in as subscription over future was us, will million XX% continued into ARR markets new innovation accelerate indicator in year million $XX positive of bookings. growth ARR high such TCB ARR, fiscal for XXXX storage growth and the

part improved efficiency Driving transformation. another is of operational our

lower to and our and and availability Also, year working further our this carry cost, improve company. chain expect to that efforts will XXXX. positive decrease at results strengthen supply forward improve into yielded greater with fiscal and stabilize we focused to inventory parts Our capital continues

global efficiency strategy, additional during securing lenders our an his drive prepared liquidity plan a flexibility that implemented Ken operate profitable our and remarks. we our existing more discuss important will improve execute strategic upsizing growth. company these items worked we we our through end, with detail As that by it recently of our in debt. To is to to

Slide X, to innovation you an our progress. to like give update product Turning would on I

On X, with reception company all-flash milestone platform and storage This announced industry April a software a the design a enterprise. coverage incredible, we the been initial huge segments phenomenal in introduces right experts. and one The modern totally from now. and has for reception highest analysts for is the positive growth new Myriad, to press of starting storage

customers to NAB The customers reception show opportunity with an has and showcased the been this from then trade trade We outstanding. show, the Myriad for in world, partners space. is our in blown with address Show space, able has of recognized that away to the largest meet frankly and our storage year’s the broadcast software-defined including at the which Product Year. been They us were by all-new this innovation industry an was awards, Myriad NAB develop this Quantum with winning industry to the three platform

be been also our video on our of any the achieved Pivot year. hardware. software us West unified introduced platform build for the recognized business ISC software run a March. We will surveillance on to can The the totally version from awards surveillance this X modern trade innovation with key also combine the our The best that in and in unified latest platform with the has opportunity surveillance a success multiple strategy industry surveillance show at software culmination is to platform of platform unified we

digital video for learning, the with unified including corporate and the and data platform, and AI protection. and Myriad software AI-enabled now Only and and data the cataloging video for machine workloads, Quantum With end-to-end data preservation, ingest monitoring unstructured data archiving introduction entire for and cover world’s speed from lakes branding surveillance, communications, managing along of Quantum offers for the lifecycle, data solutions unstructured surveillance high solutions forever enriching data. offers massive biggest archiving, data through entertainment, processing and that

Now over turn in to Ken walk it to financial through more our results I’d Ken? to detail. like

I’ll Thank fourth our results, Jamie. financial turn starting the to X of an you overview and provide with Please fiscal quarter. Slide

for X,XXX drove in year-over-year, fourth by Jamie since high XXXX. another year-over-year secondary accounting up was execution $XXX.X quarter points of fourth revenue the above our in led million on of EBITDA highlighted, was XX% revenue. of year higher XX% Adjusted times fiscal guidance strong driven hyperscalers. of $XXX,XXX This our representing our operational above fourth primarily quarter by in million. X.X basis quarter, the total quarter As fiscal represents and the strong revenue, an end compared of was a continued XXXX storage previously the growth prior with This strong increase $X sales approximately guidance. strongest quarter This at improvement

and results breakdown Now this trends. turning X, provide revenue to a of Slide the year-over-year I’ll quarter’s

Services of Quantum only and performance of better license revenue been on storage is perpetual our to subscription as and highlighted services does has the both systems subscription. this presentation traditional our show enhanced delivery. include slide not secondary Our from and primary

storage million, approximately sequentially. was and Primary year-on-year revenue X% $XX.X both down

storage increased XX% million, Secondary of XX% to sequentially approximately revenue. decreased and year-over-year total or revenue $XX XX% systems

down in XX% sales continued the traction achieved were hyperscale with hyperscale to While have customers our significant the sequentially, vertical year-over-year we growth.

of down driven by a off older revenue the in Looking in year-over-year quarter begin level service renewal this product year. due at continued our approximately tape anticipate to revenue revenue our life was X% the We $XX.X fiscal end lines. service half first business, in the to million, services decline fourth in support on decline of to

Next some in $XXX,XXX devices and X% there was approximately or year-over-year. sequential improvement, down was while media, revenue

and the in year-over-year to increased million. sequentially royalties Finally, quarter $X

revenue to X, I Moving review a metrics. our subscription provide to want annual recurring of Slide and

XXXX margin our being revenue for XX%. the Total the million, ARR approximately combined business full at $XXX.X was annual year gross of a with or recurring approximately revenue, XX% on total

ARR our by on partners via both subscriptions. we our software shift customers company, a globally, service focused solutions strategic combined to our improving delivering more to our our As service with and of opportunities are Quantum and total maximizing

approximately is new success business of of portion approximately offering subscription XX% in our of total a subscription we active sequentially subscription, the to only XX% of transition up increased and point fourth The over our have ARR in strong the year-over-year million. with efforts. from proof $XX.X XX% Our sales XXX cumulative year. being the customers XX% prior over quarter Today, our software

subscriptions seeing Quantum with early tape, we initial plus encouraged are span our of XXXX. in are the fiscal offerings the progress renewal we portfolio, reminder, full has very exception the by a of As now subscription in that

Slide results. XX, to turning GAAP let’s our fourth review Now quarter

the that expenses. operating margin we GAAP reserve obsolescence by was share per well gross was increase inventory as the pandemic-driven due loss certain XX.X%, mix or GAAP the gross primarily adjustment of million non-recurring per $X.XX $X.X a and, inventory product was in to and as quarter anticipated, fourth discontinued. as last of margin which quarter loss quarter for excess reflected discussed higher previously The unique to legacy being loss fourth products due $XX.X mentioned a million in net the caused share.

Now turning in margin non-GAAP sequentially. quarter XX% to compared gross the year quarter Slide XX.X% non-GAAP the prior for XX.X% metrics, and XX for was with fourth

million increase end As a $XX.X investment long million grow per but quarter was net term. previously operating taxes, and life mentioned, marketing of quarter. in last we fourth million fourth deal share, adjusted The $X.XX a above increased $X for the the expected and account year-over-year higher million flat in finally sequential fourth was and year had commissions, adjusted Europe in due dilutive to that the was quarter $XX guidance. quarter, and payroll a to loss in was were strategic was EBITDA an loss gross initiatives. us increase our to margin in or Non-GAAP the an expenses science $X.X and which Non-GAAP seasonally sales large from

XXXX to results. Slide fiscal XX, brief highlights provide I’ll Now of turning our

$XX XXXX million. our XX% or Full with hyperscale increased strong secondary $XXX.X performance driven systems million was by year Growth revenues in total to storage customers. by approximately

subsiding, with $XX.X year supply business the reflection half headwinds higher was at This began this latter a largely the part and a gross the fiscal of and million. fiscal we mix the cost trend adjusted EBITDA year, full was For headwinds the On of supply flat margins. year, note, in XXXX. positive hyperscale during and pressured chain-related of inflationary essentially of into chain to continue anticipate a year XXXX, pressures first prior the which

million year. year forward going teams. fiscal are market primary recovery we our investment international signs seeing due to the our systems year of year Myriad XXXX, to was of historical introduction sales of million platform, our associated $XX.X full of positive our and storage multiple demand, increased to year revenue compared U.S. primary the the XXXX results prior for trends, the fiscal in Moving Slide $XX.X a and XX Exiting for breakdown storage revenue and in

Secondary storage significant business systems years. of see our XXXX continued two $XXX.X over the revenue we million for growth the increased XX% last hyperscale or year to full as

our solutions scale XXXX their levels, accelerate. to and to anticipate revenue tape secondary affordable with our margin fiscal all enterprise continues solution cloud-based higher from DXI, active solutions we of a we in more come While seeking storage down storage large gain from storage, traction environments data expect scaler object to as repatriation companies

services Next XXXX. totaled subscriptions business looking traditional without at million our Quantum in $XXX.X

approximately Total on business an going stabilize were latest of million over impacted million, higher products the While million $XX.X of to we generation full LTO-X stabilizing life royalty the $XX for services We media and and to rate older this for end to tape few of anticipate revenue decreased node. device fiscal to royalties services the have primarily last forward. the first this our total $XX year capacity finally and year XXXX. transition million, years, the annualized in XXXX to reflecting half $XX.X anticipate

to turn the of debt XX liquidity the for end overview an please and Slide of Now at quarter.

million term cash improve Cash, our and and cash year cash continue by pleased the split between was management the quarter of and our anticipate net ago, Outstanding cash end at million metrics. equivalents to and and on strong million quarter were $XX overall with are million. the $XX.X progress approximately collections. revolver We driven we position capital fourth compared end working a $X.X debt debt was will conversion with $XX.X restricted proactive our of our

fiscal is we taken turning Slide greater actions of flexibility create I’d strategic it to important in like to end start XXXX; for subsequent the clear with a Heading to year, believe quarter. plan have profitability and we year into as improved have of an to next overview the such, XX,

company proactively flexibility to additional we received recent of bring greater $XX better as liquidity lenders covenant secured Recently the product our innovations an million current and from market. our we position to

execution margin expanding only and our mix markets primary our revenue earnings. on existing with verticals Improving profitability lever improved in to new global our storage our focused and includes into back not is but growth discussed, solution. Myriad As in key gross path getting to systems a efficiencies. is Jamie driving expanding improving revenue mix our to This enterprise

of We are programs. enterprise in repatriation increase of and from opportunities, machine learning pipeline and large AI data including enterprise seeing cloud the expansion

our driving Equally the important revenue is operations. improved to mix of streamlining

last end, is are there we While have not done. with global self-help initiatives share several you. year, work to made that the progress our undertaking are efficiency To over we that I’d like

actively improving First, value executing couple years clawing last and focus are improved - engineering logistics efforts from impacts and a spend. including travel efficiency operational combined of reduced inflationary with on several manufacturing we continued the on productivity, projects, discretionary with back

goal our more deeper a Kuala Bangalore and will is both move We our forward in an locations processes, operation as as costs, leveraging presence is create in domestically internationally, organization. believe Second more drive effective Lumpur, we collaboration, lower global our and and The investing facility including to more and footprint. international focus centers Guadalajara. effective expand focused areas growing

new reduction is cost Third initiative. a

these Turning provide let XX, to some Slide on me efforts. insight

savings run $X our exiting P&L an result fiscal of a million approximately year QX fiscal XXXX these our over than our reduction annualized execute our actions strategy, it workforce. impact begun six months, realized company savings in will a important profitable in global To we ’XX that action year anticipate operate million rate. and $XX We is anticipate end, net With drive that of less As we from XX% cost initially our we growth. ’XX. we to approximately a have of that exit vision payback fully non-GAAP will

move take and will we balancing our forward, to customer. continue measured we as continue evaluate and service our quality to strong a actions customer of performance, innovation experience while ensures As that level necessary support we high to deliver of

full first out, for Page XXXX. I’ll Now the please guidance review year to quarter close and to and company’s turn the XX fiscal

revenue total in $XX plus be minus or million $X anticipate quarter first we to First, million. the

per the on breakeven the be based non-GAAP shares expected to estimated We minus EBITDA be is loss plus outstanding. Adjusted share, million. $XX.X $X.XX first net an share adjusted approximately expect or quarter to first for per for $X quarter million

the are $XXX minus or plus or minus year million introducing plus full to with $X.XX non-GAAP million, for revenue be also guidance XXXX of We adjusted expected $XX EPS

adjusted and $X.XX, EBITDA full expected be least is at for year. to $XX the million

hyperscale our To earlier, add decline a year-on-year guidance, our declining in some due anticipate secondary do to color to mentioned as I we business. systems

inflationary those decreasing a with chain our foresee our secondary initiatives anticipate being drives combined margin also a year-over-year We declines supply with an higher mix minimum, and We and global environment revenue stabilizing efficiency at replaced improving systems. improvement. primary that, of

the higher outlook. be business expectation team’s management earnings significantly return performance To the clear, current to is our than to

have accelerate execution efficiencies, path to scale footprint, working creating through cost efforts We achieving leveraging and reductions. mix, are growth and on our global driving sales our a by operational revenue targeted improved and our synergies and improved

hand lot before at with company, and our excited to my up I’d it are the super here. team We you about today, covered future. optimistic say months I to our after Jamie, catching back focused be we a to The I is our in to and quarter and Quantum, weeks transformation, look I’m forward and here about extremely ahead. excited first like

the hand With back closing that, to I’ll call remarks. for now Jamie

Thanks Ken.

momentum finished see in for We’re the and growth We excited and year enterprise subsiding. stabilizing product and with major pricing truly inflationary a sales laid in We chain future. introduction We foundation positive Americas the supply new the the about the Myriad. end-to-end internationally.

the and strategic capital executing our We of with flexibility subscription we to ARR to on our and transition business. on increased the execute are growth company strengthened have

earnings allow year back global and improvements kind this potential plan’s to journey cost developments efficiency of elevating growth increase continuing to to the will significantly and these this expect our expect. our We us shareholders we earnings with the combined company

for With that, it up Operator? let’s open questions.

instructions] you. Thank [Operator

Iwanyc Oppenheimer question & George Please first from with is Company. Our proceed.

Thank you you’re you can maybe from environment a for question. my perspective. a macro about little what seeing taking Jamie, expand bit

there verticals, If you look you’re and spots at are any through? weakness the regions various of managing that still

answer drastically. let thing almost that Probably I in couple of Yes, supply all-clear different has the and across environment mean, the most everything is changed me an first availability, obvious a that Parts dimensions. chain state. is

we’re materials loaded cases inventory. have people and up-charges in We’re get parts to discounted seeing to quickly up not move them to paying more as some and things, even incentivize getting

The the I our other slow levels I’m things but seeing would think from and bringing the re-think rate’s they I’m data certain cloud I’m amounts seeing seeing, for business, down about large bit a that a that. also as bit. I customers seeing buying, a am which back hyperscale of the trend, adjust them seeing a inventory down outlook of for is say still or their slowing their newer I’m organizations reasons. variety

Some cost of pure savings. them are just

that for don’t to control. at number back security own looking greater that doing from also paying of and they people variety think large they’re or or a use projects models plan control looking company’s leave and do and years think to data, for cloud seeing I’m a bringing under in over important have just bill they’re reasons of data involve that XX outsourced a bringing XX other to so data at a seeing years, to I very their and XX ways for IT if archive I monthly I’m XX, resources data that. own

movie-making down. buying segments large But and in a not normal In seeing in the seeing I’m the we the seeing clip. share--that a and terms am slowdowns. I not entertainment, serve, of healthy back. I’m lot most not at enterprises slowing not business, Sports seeing of pull I’m macro, I’m seeing we

that’s enterprises think I IT very I strategic, something protecting large they’re and think most those budgets. as view

looking AI to those because and data if Cutting investments and IT, with think costs. an in data. think people their gain they other cut of are be their to with area think compete and efficiency compete people to I as people are investments have I strategic, at companies looking areas access most so protect analysis IT, and more to are data. I They at I more think trying more

kind just Thank level? through seeing, state with hyperscale you shippable Maybe the to for are your point, you you’re that. worked clear, have demand side you and steady backlog of at this be at fully on backlog a on the the

due working you giving stated it’s that Yes, chain million tell backlog year-over-year. I level, before, mostly levels we was somewhere constraints we’re that that about we supply normalized super to for back be $XX normalized last the $XX would we’ve through that but the million The between going, was were of, that more off the over so large worked couple not quarters, can where exact backlog to it’s we to range.

with that you, cost up Okay, finishing and Ken, after over the months get going be and being you is that next last planning, first that year? just with level to see the quarter one taking to sustainable for question reduction you’re mostly of the as the you opex activity place several an

next couple international to we’re going coming going through happen really then back another over of the and the it’s weeks, half towards slug see as in to regulatory majority work we of some year the locations. it, and the Yes,

of fiscal we of it about rate, to a FYXX. opex should I of savings in we’re this think other when in XXXX coming see end by half coming million you then it, QX see about of year $X profile the think and off going of in, that the the exit based

you. Thank

Ellis Please Craig Riley. with B. Our from next question is proceed.

taking in very for say just question. - the the thanks want thanks Yes, deck helpful. transparency I really Guys, for the to granular

takes starting to on seeing secondary the we moderating fiscal quarter? before in first guidance, business? we do I’ll down we out just if dynamic time different see overall purchase mean look play beyond gives weigh that one Does for the revenue the intensity, that more looking the up. does question. could Clear that revenue start pick second you’re Not how fiscal or start storage re-accelerate, but trajectory how and pace in we step to hyperscale with the with customers explicit at of their primary level quarter, a

we’re mean, based I up, our Yes, what We margins our up do, and sell to. the bring to segments bring somewhat need I to hope on trying margins it’s obvious. we we

If about sales range. sale, that’s so be could as federal hyperscale as low look be a pretty whereas XX%, a you at high margin margins XX%, big think you as could government that as

revenue down to we’re can We’re emphasis business, the putting or enterprise we’re some that while lot areas up bringing a high sales sales, doing of but revenues plan, to doing down large the North our hyperscaler compensation I low down trying sales, parts keep through the you to our things products. of solution that to on while software on a bring we’re trying and trying margin the business, marketing significantly margin sales, our kind. do flat the which our - our year we’re sales, be through turn efforts, volume margin of doing of certain see--we’re upheaval, this of our is bit our bringing throughout what OEM and sales, sales, up that sales we’re American higher you’re avoid it changes, bring lower high tape kind see incentives, margin through think to going any where and in media, don’t channel margin massive trying

that higher coming our certainly than more--I are completely see down nourishing enterprise things margin call see we as them business. of our calories, wouldn’t some XX%, XX% up but XX% bring less as up like sales you our the You sales to coming they’re primary empty high larger pieces storage of as

see We’re drops, really services. manage mix any trying margin towards higher so to shifting that but the and won’t products you big

over about margin, years, has the that team--you ways seen, Yes, and life, up, of you first year. the our product stabilizing team going the the this add ARR business service know, so of by see subsiding runoff high Jamie, our that and had anywhere we half, last in service we think part half a the life--product is second business, should services preserving back the just of carries great the business, from some We you few extend end if about cases, done then life strategy. over that that just some growing and a again that these legacy I’ll and that, low in and back there, with onto the of change key half a do we’ve XXs Quantum is into total see to of or services the the potentially finding to going there XXs and stemming that job runoff think when so

helpful, and the the services. real one That’s nailed on anticipated second question first

we Moving $X million on, levers talking this to million, would mostly seeing a it company Ken, that fiscal like XQ? of we’ll half the get Is it the that the opex, early different year has, sounds little be with year. benefit the bit on further or some that in see to back of $X of as as fiscal

quarter, get our ourselves this so order can lot things on from release, as to you and in back of productivity a we healthy see going now, started--we ongoing right had It’s mode. in

and the seeing rest of to the up million. now, elements expect of $X end pick back We to of then the benefit have QX that right we the going on year, and those would start so into heading in

going the of and rest little see through in you’re think coming of bit help I to in a that QX QX. coming

products. One more model question and then--on

On taking operational mean side, that give $XX the another for and Ken? What million you’ve model some does with flexibility. to up helpful interest see quarterly you it what expense, done to debt

bump expect it little bit. a up to We

for we lenders were get at basis. the we deal with Looking favorable very that on where today, at think to what’s existing worked in a blended I our a marketplace

deal debt Our goes so BPs, XX really up overall. only a good I think it’s

more little see payment interest the in to a We’re only year. bit expecting

we are at as ’XX, basis, we thinking potential late quantitative on qualitative announced, perhaps, move Myriad when business, you Got a What fiscal more it was on it, this you and noted. point? uptake ’XX, through Jamie, impacts and to excited richly sales it, very to as and were is then you, Myriad then NAB, at hearing finally awarded back about how team the and spoke revenue in potential than or ’XX your fiscal of you was about either fiscal

said, put it gotten you the praise and announced as product. analysts around Yes, of lot front we a in have of product, we the

in customers, starting run It’s testing extremely to use We certain and and with to ML that products it make has benchmark pitching so learning are capabilities competing unique now is many and against, encouraged. install for and very we’re it we’re much AI more has tagging, especially, features modern the we’re is encouraged. pretty customers capabilities and AI more than and case It unique. ML we’re it What including that and use are very testing, run product modern the cases. it metadata it, certain integrated different very

active where of develop. metadata we’re would of that’s see secondary we that a time or tagging, every and to and so analyzed to also speed really sell so has high it where storage is analytics sale drive a we to the cold speed an be back, we’re a drive been and data platform, moving scale into from or sell really then scale lake like active ecosystem form lake analytic data doing that’s underestimated, storage would every Myriad, lake, we seeing likely and It’s evolve with really storage analysis, scale about, with then that and it data high sell, thing sell is expect almost doing would resides, that as doing sell other that we data active CATdb. the and waiting analytics Myriad also encouraging we we’re typically that cold data as speed time as it excited that classification, it area usually different management forms software a seeing may high The into have Myriad data and the

market. my to get time, best and forward, through pipeline think its at we see launch, watching the market it same of as so it you now, we’re get the in it’s view other would is the the pipeline it’s initial have it by It’s looking a all pipeline, get moving by into I products, growing growth through so trials say and we pretty and its and the fastest of I it can we’ve terms the its got product encouraged then suspected. growing but inside fastest new storage relative in right company In that to it’s

but revenue have fiscal, we POs very in be sure. will conservatively to revenue start We’ve will for it this year. it yes, this in, modeled But see impact coming there impact until

really thanks Ken. That’s Thanks Jamie, helpful.

from Our Markets. Lake Eric proceed. Martinuzzi next with Capital Please Street is question

given from a Hey normal cadence of January, numbers, things played QX, in that the March kind up out? business up saw Jamie, how the February. February and Was of on the from would anticipate success you that I

buying very build slow March especially March, and January to the in and really supply season we Yes. it--slow are accelerated Typically of ship for and that’s really pressure March. that lot in hit you us, always then rapid us. chain yes, really January Things what February for in quickly, saw. puts the on and very but Europe, That a

also, the ship-- that it, to on this since improving supply that add came the in, March, coming to And at chain these just had so through, lot historically numbers was fiscal and was QX it look were had that to in when by best we sit we’ve of back aided a things the you XXXX,

backlog. to They’d go

that with right the to operational quarter, the so Yes, our loosening and were to it this of backlog, improved door, why beat. chain out and higher that’s you this end we the able and get saw goes supply performance

a network big server, product could mean, Yes, to be--a it we’d product it and card. get and that simple a months was ago, a be like order I would difference. a year a

in weeks. get can to and days. server customer can we site it be in, the a thinkable a shipping two order like--a a that in off an normalized. big lot a more the We servers had even week order shelf, and just products impact. but are ago, ship wasn’t two That now cases, It’s a Now a just lot and year not all like, very--and at

it. side was below a you Got Anything year I we from the ago? that May tough bit a little or for normal April here? hyperscaler Then QX saw regarding outlook, modeling. the it’s a seasonality comp the where maybe have on Did in

of see year company Yes, a our pressures, offer hyperscalers sharing it’s to so sourcing companies happening. big manage were us, want be two well. think hyperscalers hyperscaler two we’re players supply ago I the part we tape The probably slowing a down and it’s that’s and that something revenue are--you imagine bit, other whereas the had similar a load and you years to where things know, only a through you as their the vendors some can chain risk, of to with multiple offer, now to that now other from

is the verticals Yes, at at pressure talked that how go line, Obviously less it. more give quarters, as would we on we’ve some improve but total when to look Hyperscaler but mix year. going color to little about, we at to going for that. of we the we of expect near to that’s tried bit helps be be fiscal in the the margins to investor offset you a the rotation this margin, online, deck when the a with look to top

Okay. QX. rising year Then you What margin the by from gross about was the you are margins targeting gross in talked XX.X%, non-GAAP end?

this for to gross margins. see XX% in Well, the in love XX% mix, year I’d full us to between somewhere total

Eric services, that’s things are a goods as dramatically, running is saw our saying, to you to expect and we I finding great total the bring One that the manufacturing. manufacturing down the is know, two, we ways finding costs think that of and that, expediting and we efficiencies that. come at but the number If inflationary look from that mix pricing increased for a also cost done within Jamie pretty improved from of and low that he’s really the was number have; pressures overhead driving our organization--you org down job

really margin those we’re positive this combine I the rotation year. together, feeling three about think you

isn’t action. want this these just within a didn’t do an that within I in on and it. our really runoff some down that specifically and We let profile, business drop we’re business. services pace revenue opex our piece, with margins the don’t we that the X-handle a of second to job good of discount put keeping to The things we’re margin There’s actions taking, of doing it,

leadership regions you we and cost a with I uplift. with think that be these the moving an help service he’s and what us the that, and org Ross what going doing doing That maintain will again to services with excited that synergies but globalization about forward. Ross much at mix change the the get to Jamie the really put position to - customers for is products to better offering in going that product also to team, with look from and to and lower we’re then there, margin service sets, help can org get that’s going

balance last a as of sheet. borrowing the close move of Then the the on you out? balance, you is Do of year. cash Obviously made question after end loan whenever or took the the May pro have forma fiscal the you and maybe debt

probably do right what now, forward, I public. but this we don’t of we it’s make a down, dollars million. another can think actually have The because plus carry the that you or did give want I quarter, we but way walk to about taken $XX during that didn’t if minus to probably

Thanks questions. great. my taking Okay, for

Markets. question is next Our from Capital proceed. Northland with Please Chokshi Nehal

down secondary storage so I about down be to your for you guidance, seasonally, respect With but expect guys June of you the to think as you talked fair to how year-over-year as is also component being be well, it say Q-over-Q expecting hyperscalers down that thank is you. which to Yes, for the Q? you’re main the characterized then

services It’s be But - the more we going end But little towards think some of which in the also bit it’s a coming improvement to the is the Listen, QX we’re secondary, that secondary that within portion going we help too. if categorize you’re business do today, in going primarily secondary so down be be this it said. you’re the to of yes to going primary stabilizing, to to quarter, see way cause, see that out I and that, the but down with expecting the decrease. hyperscaler slightly, as is to is I down hyperscaler of see segment the to that quarter going it that’s Q-on-Q. going

hyperscaler calorie, a guidance is the dilutive from bit that the that is given the negative Can and then--and flattish to deal, us surprised effectively dynamics little there? that relatively why Q-over-Q. March the Okay, also portion those had impact lighthouse through you I’m walk Q see given this low

we’re of we’re in, to Well, have apologize, there I higher we around and selling opex I an XX little that purely that is still these expenses--in see a then XXX that going we we’re down sales when margin, from XX% little XX% the on, mix in two numbers. anticipating. is think actions that into two add in down. on movement you mean, so bit bit this first those including in to them I’m the months again start going of quarter, to to but hyperscaler the revenue impact until have still didn’t and be some first that things these months, come to first two gross all carrying in higher there the on that that a number looking some We two first It’s a quarters, the lower just week, range that somewhere I dragging months, marketing higher is

guys your terms is you in size year-over-year for of for the Can what fiscal okay. expectation see, I decline hyperscalers ’XX? year

significant it’s pretty versus can in but you be number-wise ’XX to piece we specific the drop want don’t towards a be more probably to little of We going did going It’s give in normalizing bit tell to what did I what ’XX. it, year-over-year. we

for. a about - Got as--you a Then detail you to you from gave products that it, but great didn’t the that seeing little very bit more as actually that. did helpful. that’s mention increase Can hear workload, far that’s talk enterprises you you’re really you large seeing are pipeline give

putting on things. a we’re which de-duplication is Yes, compression product, a is target. emphasis lot back-up and we’re couple One back-up and DXI our of seeing a

We’re seeing a there. of lot large deals

Fortune bank so north that remarks, XX a $XX come those we It’s large we with margin deal kind seeing is business. I good together highest said in of DXI, probably see prepared did product. in a to our deals our think with million of

seeing autonomous for time, of people data amounts that we’re business who has repositories, footage, that long that accelerating periods very probably for is XX surveillance is pipeline keep quickly in product, usually the this and so large, to want just over really bit store so enormous offer XXX have use film just large other our very which The storing a vehicle has and long scale of million, of video enormous north time, active storage unexpectedly seeing often movie storing deals sums of petabytes petabyte, XXX periods and north of accelerating large, for footage, labs, $X data anyone are that and data--the is national people we’re they’re data, cold they so. footage, little begun for we over of essentially

a entertainment traction, for high for and of also is non-media analyzing placing in part really scale, That media data, unstructured the of being key lot products analytic a amounts file data, cases, of StorNext then speed strength also and its we’re in unstructured traditional but and - product are active that, entertainment. the large use enterprise cases, StorNext, use just gaining StorNext is a and system area, and those DXI.

color. that for you thank Awesome,

Please John from is question proceed. Capital. next Dialectic Our with Fichthorn

guys. taking Thanks Yes, question. for the hey

in A yet out of lot of of numbers. things kind some that here, hard it’s sound we good to your parse and as sit

now a in got is A parts reversing forward. you’ve growing, business things different that going bad with things with lot moving your were of - and that weren’t some good margins that lot think got I margins in some it’s you’ve of because theory growing.

know this said was storage year XX% growth or revenues. XX% - I XX% things could be of whether primary like You’ve some that didn’t

Twenty-five percent growth.

a a guys break it that over I the necessarily so you on ways out you’re could now factoring it what on driving effectively, that kind you’re be to line, the could large think segment about in measure the of you for level it’s and top Great. and degree. it you quarter so very question, kind year, is at assume my it’d analyze can looking comment, know can now if of or isn’t to like the EBITDA because percent really look you you’re a next sounds succeeding are we that, when be growth? which focused I not, or what numbers are on this you’re you Twenty-five goals, conservatively. year, at at to you’re Myriad comment if whether intended guidance business, can great but into that maybe to is first difficult accomplishing so if is your whether guess next we

specifically--yes, go ahead? margin On the side gross

heard that and to I our feedback talking and that that investor we about we deck top of I folks the to you it, this just to rotational and were encourage there bit at of put with I help others little on a a out want comment more our from when look verticals earnings segments color doing give breakout quarter a detail deck. We what of that do view. the little of in bit we’re

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your here. Cool. I I have not at seen was deck looking earnings it -

would gross end, can on wrong I margins hear is anemic? period? the to is so, mentioned what what why that time so over I further, XX%. the kind target think Then XX% where it do and quarter and and little get if margin improvement. or you more you for bit is, gross of you’re Did coming to gross expected kind XX% year But into of to a have XX%, at margin you that

talking in work up time still parts. and moving out happening as you going those we’re the lot we’re Yes, business comments, hyperscale take nice have at rotation it, we and it’s Jamie we said We of the of half way. in that sets you that the the was hyperscale of secondary positive a the through. is same was services the back rotating to to around we’re year moving the three your there, cost part back and all earlier, that this, so there still and have about of action with parts so it have that rotating a back slug that top There’s that at looking primary a of savings the this going declining the into product rotating in

see that come get mix higher as of that up rotating the the back and the start matter a we if guidance rotation maybe we the secondary end, was range rotate giving up can rotating higher get start get more we as primary just starting higher and the to of more rotation. because to midpoint levels, to it’s and into peak expect think on so towards more on I the towards anticipate, we I XX% to we to end and XX%, numbers of that XX% more would was at as those we I

I what just at and you’re XX, to make So you saying want said is-- peak sure

XX. Peaking at

this see XX end of can what is you the for? year, start So fiscal you’re hoping to at

get absolutely. to higher primary we starts with picking of rotation end up, Myriad If and the the

on--I out, margin? Then building yourself do but looking of not for you specific see I’m the Myriad FYXX, term? focused margin longer longer what the you is for towards mean, this term, opposed guidance looking XX with as kind curious, to you’re is do gross into, just like? margin to you’re Like growing where What see from, moving and gross away could that things gross getting business look

on, you line want we traditionally business into high put what margins XXs. investor rotation restated the think that are coming want that going that that more those We low in about we’re this Myriad rotation Well, In for goals. when alone, gross to deck XXs, XXs. product Myriad XX%-plus the in see continuing we there, we margin. with out business primary With see to the the

Those healthy we products, pretty that too. especially XXs, underlying into can also. be our high be. out healthy one a mid-XXs, mid-XXs down services it business, XXs type into products the carrying the can dipping want That secondary out have - not with it’s business, to business to of it, The you largest it’s up once DXI hyperscale, margin margin pull where services that - gross of Getting we there. be

we we how talk amount lot, didn’t about subscription the of are really, we’re piece, stressing really that and other a there. but The really rotating

and from being sales is traction seeing. that sales ago a XX% over an being of and at that of we’re subscription great subscription the rotation looking now, to that’s our XX% sales that, new with year team awesome a Going XX%-plus based doing there the margin

say having mid-XXs that subscription to points why getting in one-time get the of can that proof we’re the sale, versus being back then to portion driving confident primary trying I’m what we the John, guess, back, we driving a feel is the I and of rotation all and is those up get the coming the going of feel we XXs. the cost confident why the in that’s ’XX and again production, help ’XX, into we three self Those that of into lower with be can that back things healthy elements combined XXs-plus. out of trends the services etc., of ’XX, the

you’ve concept. me, revenue Look, quarterly example? I small digit so seen the would So question, seem for drill go can XX% on what flesh attach a not that getting call would. it’s that help number, revenue if Maybe revenue to just great, last it, year-over-year. still jump us, like is number else bit a call from sale, if that, double of a little a software software to to don’t it I see XXs rate, this of you why am a It I for have I sales all the sudden though, XXs, Where growth know down I’m get my attaching that a higher seeing out than subscription if would to?

to get a and a think to was sales, the new I have of XX/XX for they add-on already very legacy got out. in. were rotation well customers, - side, sales it subscription, were We a perpetual, coming customers perpetual, XX% lot tend add to Right, to the coming break so want want new to on split as in that into John. the sales new the on where of that legacy those that legacy a two are through I we’ve to so specific still being new subscription both

if point. that question, data but answers know don’t I that’s your the

Got that, drive versus new in and a growth? you, that the it’s customers increases high the the legacy succeeding as rate, so sales, new that is and legacy, have so will that now very opposed to they sales you’re as attach new blend

Spot John. on,

All thanks right, guys.

would closing I session. over back turn and concludes to to conference question comments. the for management This our like answer

right, Ken I further I’d you for today, everyone speak like and Thank thank attending want are us and to to have always All to questions you directly, or if everyone. available.

Thank you. today’s This conference. will conclude

for disconnect this your at participation. your you thank time, may You lines and