Qualstar Corporation Reports Second Quarter 2025 Results
Gross Margin Expands to 34% With Positive Net Income and Solid Cash Position; Company Advances Strategic Growth Initiatives in Data Storage and Power Solutions
IRVINE, Calif., Aug. 07, 2025 (GLOBE NEWSWIRE) -- Qualstar Corporation (OTC: QBAK), a trusted provider of scalable data storage and high-efficiency power solutions, today 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 year-over-year 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 data 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.
Management Commentary
“Our second quarter results reflect the benefits of a disciplined operating model, with gross margin expansion and positive net income despite lower year‑over‑year revenue,” said Steven Bronson, CEO and President of Qualstar. “With over four 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)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||
| 2025 | 2024 | $ ∆ | % ∆ | 2025 | 2024 | $ ∆ | % ∆ | |||||||||||||||||||||||
| Revenues | $ | 1,430 | $ | 2,366 | $ | (936 | ) | (39.6 | )% | $ | 3,089 | $ | 4,653 | $ | (1,564 | ) | (33.6 | )% | ||||||||||||
| Gross profit | $ | 482 | $ | 523 | $ | (41 | ) | (7.8 | )% | $ | 1,091 | $ | 1,223 | $ | (132 | ) | (10.8 | )% | ||||||||||||
| Gross margin | 33.7 | % | 22.1 | % | 35.3 | % | 26.3 | % | ||||||||||||||||||||||
| Income (loss) from operations | $ | 5 | $ | (292 | ) | $ | 140 | $ | (488 | ) | ||||||||||||||||||||
| Net income (loss) | $ | 204 | $ | (327 | ) | $ | 387 | $ | (427 | ) | ||||||||||||||||||||
| Earnings (loss) per share | $ | 0.14 | $ | (0.23 | ) | $ | 0.27 | $ | (0.30 | ) | ||||||||||||||||||||
| Adjusted EBITDA | $ | (7 | ) | $ | (19 | ) | $ | 55 | $ | (163 | ) | |||||||||||||||||||
- Revenue decreased 40% for the three 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 data 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 three‑ and six‑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 three months ended June 30, 2025 and 2024 was $(7,000) and $(19,000), respectively, and for the six 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 to view the Company’s financial results in more detail.
About Qualstar Corporation
Qualstar Corporation, founded in 1984, manufactures and markets data storage system products and compact, high efficiency power solutions.
Our data storage systems are marketed under the Qualstar™ brand and include highly scalable automated magnetic tape libraries used to store, retrieve and manage electronic data primarily in the network computing environment. Our products, sold through resellers, system integrators and OEMs, range from entry-level to enterprise and are a cost-effective solution for organizations requiring backup, recovery and archival storage of critical electronic information.
The Company’s power solutions, marketed under the N2Power™ brand, include standard, semi-custom and custom versions and provide OEM designers with increased functionality while reducing thermal loads and cooling requirements and lowering operating costs. These products are sold to OEMs in a wide range of markets, including telecom/networking equipment, audio/visual, industrial, gaming and medical.
More information is available at and or by phone at 805-583-7744.
Non-GAAP Financial Measure
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with United States 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 three and six months ended June 30, 2025 and 2024:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| (in thousands) | ||||||||||||||||
| Net income (loss) | $ | 204 | $ | (327 | ) | $ | 387 | $ | (427 | ) | ||||||
| Adjustments to arrive at earnings before interest, taxes, depreciation, and amortization (EBITDA): | ||||||||||||||||
| Interest income | (35 | ) | (19 | ) | (75 | ) | (36 | ) | ||||||||
| Depreciation and amortization expense | 2 | 9 | 4 | 19 | ||||||||||||
| EBITDA | 171 | (337 | ) | 315 | (444 | ) | ||||||||||
| Adjustments to arrive at Adjusted EBITDA: | ||||||||||||||||
| Employee Retention Credits | (94 | ) | — | (239 | ) | — | ||||||||||
| Provisions for inventory net realizable value | 33 | 218 | 57 | 229 | ||||||||||||
| (Gains) losses on marketable securities, net | (156 | ) | 46 | (145 | ) | (40 | ) | |||||||||
| (Gains) losses on foreign currency transactions, net | (8 | ) | 8 | (27 | ) | 15 | ||||||||||
| Stock-based compensation expense | 47 | 46 | 93 | 77 | ||||||||||||
| Adjusted EBITDA | $ | (7 | ) | $ | (19 | ) | $ | 55 | $ | (163 | ) | |||||
Contact Information: Steven N. Bronson Chief Executive Officer Qualstar Corporation 805-617-4419
