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Quantum grows scale-out storage revenue despite weak market

Quantum Corp has reported its results for the fiscal first quarter 2016, ended June 30 2015

Quantum Corp has reported its results for the fiscal first quarter 2016, ended June 30 2015. Revenue was $110.9 million, a decrease of approximately $17 million, primarily driven by overall weakness in the general storage market. Scale-out storage and related service revenue grew approximately $10 million to $27.8 million, a 54 per cent increase, marking the fourth consecutive quarter of 50-plus per cent growth and 16th consecutive quarter of year-over-year growth.

Disk backup systems and related service revenue was relatively flat at $17.3 million. Branded tape automation and related service revenue decreased approximately $15 million to $35.1 million, while OEM tape automation and related service revenue was down approximately $6 million to $9.5 million. Devices and media revenue was $10.9 million, a decline of approximately $7 million.

“Like other companies, we were impacted by overall weakness in the general storage market, which was most notable for Quantum in tape-based data protection but impacted all product lines, including scale-out storage,” said Jon Gacek, president and CEO of Quantum. “Nevertheless, we continued to generate strong revenue growth in scale-out storage — 54 percent year-over-year — with higher sales across our StorNext workflow storage solutions and Lattus extended online storage. Our scale-out storage results reflect our success in expanding our leadership in media and entertainment while growing our footprint in other vertical markets and use cases such as video surveillance.

“Moving forward, we plan to build on this scale-out storage strategy, capitalising on our unique ability to deliver integrated solutions that provide both unmatched performance and low total cost of ownership through a tiered storage approach encompassing flash, spinning disk, object storage, tape and the cloud. In doing so, we will continue to use dedicated resources in select verticals as well as our broader sales force for greater market coverage.

“For our data protection products, we will continue leveraging our technology leadership, extensive customer base, and strong channel and technology partnerships to generate profit and cash. In addition, we will closely monitor how the general storage market evolves and take this into account in our spending and investment decisions.”

Quantum said it is taking a balanced approach to operating the company in the fiscal second quarter. For fiscal 2016, the company reiterated its year-over-year revenue growth target of 50 per cent in scale-out storage and said that it will continue to make investments to capitalise on the market opportunities in this part of its business. In addition, considering both the challenging general storage environment and the potential for scale-out storage opportunities to exceed current expectations, the company stated that it is not providing annual guidance.