Arqit Quantum (ARQQ) H2 2024 earnings summary

Executive summary

• Fiscal year 2024 revenue was $293,000, down from $640,000 in 2023, reflecting a shift from perpetual to operational licenses and a focus on recurring revenue.

• New CEO and Director appointed after a strategic review, with a focus on operational discipline, revenue growth, and scaling software businesses.

• Signed a seven-figure, multi-year SKA-Platform enterprise license contract with a government end user in EMEA, expected to drive annual recurring revenue starting fiscal 2025.

• Engaged in demonstration and integration activities with 13 customers, including eight telecom network operators, indicating growing market traction.

• Board and key stakeholders demonstrated confidence by investing additional capital, with a $13.6 million raise and a 25:1 reverse share split to regain Nasdaq compliance.

Financial highlights

• Revenue for fiscal 2024 was $293,000, compared to $640,000 in 2023, due to no significant perpetual licenses sold in 2024.

• Operating loss reduced to $24.6 million from $54.5 million year-over-year, mainly due to lower administrative expenses.

• Administrative expenses dropped to $23.5 million from $55.2 million, with significant reductions in share-based compensation and headcount.

• Cash and cash equivalents at year-end were $18.7 million, with an additional $1.8 million received just after the period.

• Adjusted loss before tax for 2024 was $23.9 million, compared to $54.7 million in 2023.

Outlook and guidance

• Entering fiscal 2025 with an annual recurring revenue backlog and positive momentum from new contracts.

• Focus on converting technical engagements into recurring revenue contracts, especially in telecom, government, and military sectors.

• Cost base for fiscal 2025 is expected to support all planned revenue without significant additional leverage, with budgeted monthly operating costs at $2.15 million.

• Anticipates further opportunities in financial services and IP-rich industries as quantum adoption broadens.