Quantum Corporation (NASDAQ:QMCO) Q3 2023 Earnings Call Transcript

Jamie Lerner: Yes. We look for a couple signs. One is, are there multiple product families on a single quote versus €“ instead of just selling moviemaking or just selling video surveillance, are you able to sell multiple product families, high-speed storage, archive storage, surveillance storage all part of a single deal. So multiple product families. The second thing you’d expect with multiple product families is a larger ASP. And lastly, because you’re solving a business problem versus selling terabytes capacity or terabytes, you’d expect to get a higher margin when you’re solving a business problem. So that’s really the trifecta is multiple product families on one quote, higher ASP and higher margins.

Ken Gianella: Which I’ll just add in, Jamie, that goes to the higher contribution per rep. So you have the body out there that is up-selling multiple products and solutions, and you’re getting more yield per rep.

Jamie Lerner: And with that, a lot of that run rate business where we sell a single product, we’re not walking away from that business. But instead of having an outside sales rep with a very high comp plan, selling a run rate product, we’re pushing more of that to the channel and more of that to our inside sales organization. So, the transactional part of our business, we’re doing that more cost effectively and focusing the most skilled, experienced and expensive part of our selling engine to a multiproduct family sale versus a transactional sale.

Nehal Chokshi: That’s a great color. What are — what is the actual uplift you’re seeing in terms of ASP and margin in the small geos?

Jamie Lerner: Yes. I mean, we’re not putting those metrics into our package of metrics at this time, but we are seeing ASPs going up. We are seeing relevance go up. And I would measure that in the number of CIOs that are meeting with us, when we’re a transactional vendor versus you’re helping them solve one of their top initiatives, I just think we’re seeing more relevance. We’re getting more time. We’re getting more mind share. And I have visibility into the quotes that we’re putting out in the future and I’m seeing the quotes get bigger. And another sign of it working is when you’re solving a business problem, you can’t win with a quote. You have to write a proposal and describe what you’re doing, describe how you’re going to change their business or help their business.

And it’s amazing how many more proposals we’re putting out than where we used to just kind of drop a quote and you’re basically winning on price or winning on availability of materials. Now, we’re winning on the merits of the solution and the uniqueness of the solution. And that’s — it’s taken a number of years to get here, but we really have the portfolio now where we can assemble highly differentiated proposals versus cost-effective quotes.

Nehal Chokshi : Okay. Great. And then, Ken, this is a much tighter range of revenue guidance and what I think we’ve typically been seeing over the past four or six quarters. Is this one of the philosophies that you’re bringing to the table or is this just simply a reflection of better visibility?