Release Date: December 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Arqit Quantum Inc (ARQQ, Financial) has a unique and purpose-built Metric Key Agreement software product.
- The company is experiencing accelerated engagement with OEMs, network operators, governments, and end users.
- Arqit Quantum Inc (ARQQ) has been recognized as a 2024 IDC Innovator for post-quantum cryptography.
- The company executed 13 contracts in 2024, nearly doubling from the previous year.
- Arqit Quantum Inc (ARQQ) has reduced its monthly operating costs and headcount, focusing resources on sales, engineering, and customer fulfillment.
Negative Points
- Revenue for fiscal year 2024 was $293,000, down from $640,000 the previous year.
- The company did not sell any significant perpetual enterprise licenses in fiscal year 2024.
- Arqit Quantum Inc (ARQQ) is transitioning from perpetual licenses to operational licenses, resulting in lower upfront revenue.
- The company ended fiscal year 2024 with a reduced cash balance of $18.7 million, down from $44.5 million the previous year.
- Despite progress, the company acknowledges that significant work is needed to drive revenue to scale.
Q & A Highlights
Q: Can you discuss the revenue cadence for the seven-figure Middle East deal? Does it ramp over time or remain steady?
A: The deal is steady and will start being reflected in our results during this reporting period. It doesn't ramp up over time.
Q: Could you provide more details on additional government enterprise contract opportunities in the Middle East region?
A: We are seeing strong interest from governmental bodies and larger enterprises in the Middle East, partly due to proactive legislation on post-quantum encryption. Our strong local partnerships position us well to capitalize on these opportunities.
Q: How is AI impacting the use of your quantum-safe technology?
A: We are exploring AI's role in our technology roadmap, particularly in remediation. AI could help identify vulnerabilities and suggest solutions, making the technology more accessible to non-experts.
Q: Outside of government, telecom, and defense, which other verticals are you focusing on in 2025?
A: We are seeing interest from financial services and IP-rich industries concerned about "harvest now, decrypt later" threats. These sectors are looking to secure their data against future quantum threats.
Q: With revenue expected to ramp in 2025 and 2026, how quickly will you need to add back infrastructure costs?
A: For fiscal year 2025, we expect to deliver all anticipated revenue with our current cost base, indicating minimal need for additional leverage this year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
