Qualstar: Fiscal 2Q25 Financial Results
Revenue down by 40% Y/Y, gross margin expands to 34% from 22% in Q2 2024
This is a Press Release edited by StorageNewsletter.com on August 13, 2025 at 2:02 pmQualstar Corporation announced financial results for the second quarter ended June 30, 2025.
Qualstar’s second quarter results reflect meaningful gross margin expansion, continued profitability, and a solid cash position. While revenue declined Y/Y due to the previously disclosed loss of a large power-supply customer, the Company remains focused on executing its strategic initiatives and is well-positioned to capitalize on demand for secure, long-term storage solutions.
Second Quarter 2025 Key Highlights
- Gross margin expanded to 34% from 22% in Q2 2024, reflecting improved product and customer mix.
- Net income totaled $204,000, or $0.14 per share, an improvement compared to net loss of $327,000, or ($0.23) per share in Q2 2024.
- Cash and cash equivalents totaled $2.2 million at June 30, 2025, with no debt.
- Actively pursuing acquisitions and strategic alliances aimed at expanding Qualstar’s data management capabilities and adding complementary software to drive recurring revenue, while creating opportunities to enhance the value of its installed base through complementary product offerings.
“Our second quarter results reflect the benefits of a disciplined operating model, with gross margin expansion and positive net income despite lower Y/Y revenue,” said Steven Bronson, CEO and president, Qualstar. “With over 4 decades of experience in magnetic tape storage and a global footprint, Qualstar is a trusted enabler of the growing data economy, well-positioned to capture expanding market opportunities and execute on strategic initiatives that include complementary software offerings and targeted acquisitions to drive recurring revenue, scale the business, and deliver long‑term shareholder value.“
Consolidated Financial Results (Unaudited)
(Amounts in thousands except per share data and percentages)
- Revenue decreased 40% for the 3 months ended June 30, 2025, compared to the same period in 2024, and decreased 34% for the first half of 2025 compared to the first half of 2024. The revenue declines were driven by lower shipments of power supply products, partially offset by higher sales of storage products in the second quarter of 2025.
- Gross margin improved to 34% in Q2 2025, up from 22% in the prior‑year quarter. For the first half of 2025, gross margin rose to 35% from 26% in the first half of 2024, primarily reflecting a more favorable product, service, and customer mix.
- Net income for the 3 ‑ and 6‑month periods ended June 30, 2025, reflected lower revenue and gross profit, reduced operating expenses, and certain non‑routine expenses, credits, and non‑cash items.
- Adjusted EBITDA for the 3 months ended June 30, 2025 and 2024 was $(7,000) and $(19,000), respectively, and for the 6 months ended June 30, 2025 and 2024 was $55,000 and $(163,000), respectively.
- Cash and cash equivalents totaled $2.2 million at the end of the quarter.
Qualstar makes available its annual financial statements, quarterly financial statements, and other significant reports and amendments to such reports, free of charge, on its website as soon as reasonably practicable after such reports are prepared. Please visit www.qualstar.com to view the Company’s financial results in more detail.
Non-GAAP Financial Measure
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with US generally accepted accounting principles (“GAAP”), we use the following non-GAAP financial measure: Adjusted EBITDA. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
We define Adjusted EBITDA for a particular period as net income (loss) before interest, taxes, depreciation and amortization, and as further adjusted for non-routine expenses that may not be indicative of our core business operating results such as severance compensation, provisions (recoveries) for inventory net realizable value, gains/losses on marketable securities, gains/losses on foreign currency transactions, and non-cash expenses such as stock-based compensation expense.
We use this non-GAAP financial measure for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that this non-GAAP financial measure provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our core business operating results. We believe that both management and investors benefit from referring to this non-GAAP financial measure in assessing our performance and when planning, forecasting, and analyzing future periods. This non-GAAP financial measure also facilitates management’s internal comparisons to our historical performance and liquidity as well as comparisons to our competitors’ operating results. We believe this non-GAAP financial measure is useful to investors both because (1) is allows for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) it is used by our investors to help them analyze the health of our business.
There are a number of limitations related to the use of non-GAAP financial measures. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures and evaluating these non-GAAP financial measures together with their relevant financial measures in accordance with GAAP.
The following table reconciles Net Income (Loss) to Adjusted EBITDA for the 3 and 6 months ended June 30, 2025 and 2024: