Arqit Quantum Inc. (ARQQ)
NASDAQ:ARQQ
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Arqit Quantum
(NASDAQ:ARQQ)
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Rating:42Neutral
Price Target:
$11.50
▼(-38.14% Downside)
Action:Reiterated
Date:06/06/26
The score is held down primarily by weak financial performance (losses, negative margins, and cash burn) and a clear downtrend versus key moving averages. Earnings call commentary adds some offset from improving commercial momentum and stated liquidity runway, but valuation remains constrained by unprofitability and no dividend support.
Positive Factors
Revenue Growth
Sharp multi-period top-line growth and 11 executed contracts demonstrate early product-market fit in post-quantum security. Durable revenue momentum from recurring licenses and contract wins creates a foundation to scale subscription ARR if conversion and retention continue.
Negative Factors
Negative Margins
Persistent negative gross and operating margins indicate the business currently cannot cover costs from revenue. Until Arqit materially improves unit economics and controls rising administrative and share-based compensation, sustained profitability and ROE recovery remain a structural challenge.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue Growth
Sharp multi-period top-line growth and 11 executed contracts demonstrate early product-market fit in post-quantum security. Durable revenue momentum from recurring licenses and contract wins creates a foundation to scale subscription ARR if conversion and retention continue.
Read all positive factors
Arqit Quantum (ARQQ) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$222.57M
Dividend YieldN/A
Average Volume (3M)574.00K
Price to Earnings (P/E)―
Beta (1Y)3.03
Revenue Growth350.62%
EPS Growth-69.92%
CountryUS
Employees82
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)-3.18
Shares Outstanding15,651,859
10 Day Avg. Volume978,822
30 Day Avg. Volume574,001
Financial Highlights & Ratios
PEG Ratio0.20
Price to Book (P/B)19.62
Price to Sales (P/S)1008.10
P/FCF Ratio-18.06
Enterprise Value/Market Cap1.04
Enterprise Value/Revenue213.37
Enterprise Value/Gross Profit2.29K
Enterprise Value/Ebitda-4.61
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)-1.52
Revenue Forecast (FY)$2.50M
Arqit Quantum Business Overview & Revenue Model
Company Description
Arqit Quantum Inc. provides cybersecurity services through satellite and terrestrial platforms in the United Kingdom. It offers QuantumCloud that enables any device to download a lightweight software agent, which can create encryption keys in part...
How the Company Makes Money
Arqit primarily makes money by licensing and selling subscriptions to its quantum-safe cybersecurity software and related services. Revenue is typically generated through recurring software fees (e.g., subscription or term-based licenses) for acce...
Arqit Quantum Earnings Call Summary
Earnings Call Date:May 21, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Dec 16, 2026
Earnings Call Sentiment Neutral
The call presents meaningful commercial momentum: rapid percentage revenue growth, multiple new contracts, product rollout wins (encryption intelligence), and expanding strategic partnerships and customer deployments (Sparkle, COLT, Equinix presence). Liquidity improved with cash on hand and in-the-money warrants, giving management confidence in runway. However, the company remains in an early revenue phase with modest absolute sales, large and growing operating losses driven by higher administrative costs and a substantial increase in share-based compensation. Adoption in key markets (government/defense/telco) involves long sales cycles, and near-term funding partly depends on warrant exercises. Overall the positives around product-market fit and partnerships are balanced by significant near-term financial burdens and execution/timing risks.Positive Updates
Strong Revenue Growth (YoY)
Revenue for H1 FY2026 was $623k versus $67k in the comparable period last year, an increase of approximately 830%, representing the second consecutive reporting period of growth and multiple new contract wins.
Negative Updates
Large and Growing Operating Loss
Operating loss for H1 FY2026 was $33.7M versus $20.0M in the prior period, an increase of approximately 68.5%, driven by higher administrative expenses despite revenue growth.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Revenue Growth (YoY)
Revenue for H1 FY2026 was $623k versus $67k in the comparable period last year, an increase of approximately 830%, representing the second consecutive reporting period of growth and multiple new contract wins.
Read all positive updates
Company Guidance
Management reiterated guidance that momentum will continue into H2 FY2026 with additional contract wins, renewals and upsizings expected and revenue opportunities to come through partnerships and a marketing campaign targeting ~450 organizations; they cited H1 FY2026 revenue of $623k (vs $67k H1 FY2025), 11 contracts executed in the period (3 telecom, 8 government/defense/enterprise versus ~6–7 in the prior period), and said further wins are likely during the balance of the year. Key cost and profitability metrics: administrative expenses $33.9M (up from $20.2M) including $12.7M of share‑based compensation (vs $0.872M), operating loss $33.7M (vs $20.0M) and loss before tax $33.1M (vs $19.5M). Liquidity was reported at $28.9M cash at 31‑Mar‑2026 and $35.9M as of 20‑May‑2026 (management said this provides >14 months runway), plus in‑the‑money warrants that could provide ~$13.5M if exercised (one tranche noted as 5.4M shares and other warrants expiring through 2028). They pointed to commercial traction—first encryption intelligence contract signed May 18, a partner deal signed May 19, a ~90% upsized partner contract on May 1, Sparkle’s Quantum Safe Interconnect across 20 Equinix IBX data centers—and reiterated expectations for further revenue and contract progress in H2.Arqit Quantum Financial Statement Overview
Summary
Income Statement
30
Negative
Balance Sheet
40
Negative
Cash Flow
35
Negative
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.09M | 530.00K | 293.00K | 640.00K | 7.21M | 47.91K |
| Gross Profit | 101.00K | -230.00K | -1.59M | -1.65M | 5.92M | -139.00K |
| EBITDA | -50.26M | -36.81M | -20.19M | -41.20M | 54.92M | -270.60M |
| Net Income | -51.21M | -35.34M | -54.58M | -70.39M | 65.08M | -271.73M |
Balance Sheet | ||||||
| Total Assets | 36.24M | 42.85M | 26.72M | 99.78M | 123.87M | 113.73M |
| Cash, Cash Equivalents and Short-Term Investments | 28.86M | 36.98M | 18.70M | 44.45M | 48.97M | 86.97M |
| Total Debt | 2.17M | 719.00K | 990.00K | 8.40M | 7.83M | 0.00 |
| Total Liabilities | 7.73M | 15.62M | 14.90M | 33.13M | 45.32M | 147.57M |
| Stockholders Equity | 28.50M | 27.24M | 11.82M | 66.65M | 78.56M | -33.84M |
Cash Flow | ||||||
| Free Cash Flow | -41.70M | -29.59M | -37.45M | -48.95M | -51.35M | -33.34M |
| Operating Cash Flow | -41.67M | -29.55M | -34.13M | -32.83M | -26.92M | -24.03M |
| Investing Cash Flow | -327.00K | 683.00K | -2.40M | -16.08M | -24.43M | -9.31M |
| Financing Cash Flow | 46.31M | 47.13M | 11.19M | 44.85M | 22.37M | 120.11M |
Arqit Quantum Technical Analysis
Negative
18.59
Price Trends
14.41
Negative
16.32
Negative
24.93
Negative
Market Momentum
0.02
Positive
37.40
Neutral
8.55
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARQQ, the sentiment is Negative. The current price of 18.59 is above the 20-day moving average (MA) of 14.88, above the 50-day MA of 14.41, and below the 200-day MA of 24.93, indicating a bearish trend. The MACD of 0.02 indicates Positive momentum. The RSI at 37.40 is Neutral, neither overbought nor oversold. The STOCH value of 8.55 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARQQ.
Arqit Quantum Risk Analysis
Arqit Quantum disclosed 36 risk factors in its most recent earnings report. Arqit Quantum reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Arqit Quantum Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $10.19B | ― | -44.05% | ― | -41.75% | -87.41% | |
60 Neutral | $25.47B | 85.03 | 9.08% | ― | 334.58% | ― | |
59 Neutral | $8.01B | ― | -43.94% | ― | 8.75% | -4.39% | |
58 Neutral | $2.53B | ― | -3.55% | ― | 1025.71% | 42.03% | |
54 Neutral | $796.74M | ― | -11.80% | ― | 79.31% | 57.71% | |
42 Neutral | $222.57M | -3.93 | -183.74% | ― | 350.62% | -69.92% |
* Technology Sector Average
ARQQ
Arqit Quantum
12.14
-13.41
-52.49%
QUBT
Quantum Computing
9.96
-3.74
-27.34%
IONQ
IonQ
56.78
17.76
45.52%
QBTS
D-Wave Quantum
23.85
5.23
28.09%
RGTI
Rigetti Computing
20.68
9.40
83.33%
LAES
SEALSQ Corp
3.20
-0.26
-7.51%
Arqit Quantum Corporate Events
Arqit Quantum Posts Strong H1 2026 Revenue Growth and Expands Post‑Quantum Security Footprint
May 21, 2026
On 21 May 2026, Arqit Quantum reported first-half fiscal 2026 revenue of $623,000 to 31 March 2026, a sharp increase from $67,000 a year earlier and $463,000 in the second half of 2025, driven by eleven contracts across telecom, government, defenc...
Arqit Quantum Adds Experienced Independent Director to Audit Committee
May 1, 2026
On May 1, 2026, Arqit Quantum appointed Cristina Levis as a Class I independent director and member of its Audit Committee, strengthening the board’s financial and governance expertise. Levis brings a track record spanning European financial...
Arqit Quantum Posts Sharp Preliminary Revenue Growth for First Half of Fiscal 2026
Apr 13, 2026
Arqit Quantum Inc., a London-based specialist in quantum-safe encryption software for governments and enterprises, offers Encryption Intelligence to identify cryptographic vulnerabilities and NetworkSecure™ to protect data in transit with po...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.