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Arqit Quantum
(NASDAQ:ARQQ)
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Rating:47Neutral
Price Target:
$14.00
▼(-31.44% Downside)
Action:Reiterated
Date:10/09/26
ARQQ scores below average primarily due to weak financial performance—ongoing losses, negative margins, and cash burn outweigh strong revenue growth. Technicals are also soft with the stock trading below key moving averages, despite neutral-to-mixed momentum signals. The earnings call adds some support via improving contract traction and reiterated guidance, but valuation remains constrained by negative earnings and no stated dividend yield.
Positive Factors
Strategic defense partnership expansion
The Sirius investment deepens Arqit's role in secure defense networking while expanding joint go-to-market activity across NATO and allied countries. This can strengthen distribution, improve access to government customers, and create a broader platform for recurring security software adoption.
Negative Factors
Persistent losses and cash burn
Negative operating and free cash flow show that current revenue does not yet cover the cost of running and expanding the business. Continued losses can consume liquidity, constrain investment flexibility, and increase the need for future financing before the platform reaches sustainable scale.
Read all positive and negative factors
Positive Factors
Negative Factors
Strategic defense partnership expansion
The Sirius investment deepens Arqit's role in secure defense networking while expanding joint go-to-market activity across NATO and allied countries. This can strengthen distribution, improve access to government customers, and create a broader platform for recurring security software adoption.
Read all positive factors
Arqit Quantum (ARQQ) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$266.43M
Dividend YieldN/A
Average Volume (3M)369.80K
Price to Earnings (P/E)―
Beta (1Y)3.62
Revenue Growth350.62%
EPS Growth-69.92%
CountryUS
Employees87
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)-3.18
Shares Outstanding17,402,410
10 Day Avg. Volume393,752
30 Day Avg. Volume369,801
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 Cap0.72
Enterprise Value/Revenue177.72
Enterprise Value/Gross Profit1.91K
Enterprise Value/Ebitda-3.84
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)-1.06
Revenue Forecast (FY)$7.80M
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, a Platform as a Service that creates unbreakable software encryption keys. The company also provides main...
How the Company Makes Money
Arqit primarily makes money by selling access to its software-based security offerings as recurring services and through commercialization of its encryption technology.
Key revenue streams include:
1) Software and platform subscriptions (recurrin...
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 | -20.22M | -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 | -51.15M | -33.34M |
| Operating Cash Flow | -41.67M | -29.55M | -34.13M | -32.83M | -26.72M | -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 | 22.18M | 120.11M |
Arqit Quantum Technical Analysis
Negative
20.42
Price Trends
20.47
Negative
20.12
Negative
18.47
Negative
Market Momentum
-1.76
Positive
38.41
Neutral
41.63
Neutral
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 20.42 is above the 20-day moving average (MA) of 19.58, below the 50-day MA of 20.47, and above the 200-day MA of 18.47, indicating a bearish trend. The MACD of -1.76 indicates Positive momentum. The RSI at 38.41 is Neutral, neither overbought nor oversold. The STOCH value of 41.63 is Neutral, 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% | |
53 Neutral | $13.42B | -7.52 | -39.34% | ― | 370.64% | -112.64% | |
53 Neutral | $3.89B | -16.39 | -46.82% | ― | 68.49% | 0.83% | |
52 Neutral | $1.47B | -105.41 | -1.06% | ― | 3635.36% | 90.58% | |
51 Neutral | $378.72M | -6.58 | -8.04% | ― | 144.68% | 47.76% | |
49 Neutral | $4.47B | -17.04 | -26.67% | ― | -44.22% | 32.82% | |
47 Neutral | $266.43M | -5.16 | -183.74% | ― | 350.62% | -69.92% |
* Technology Sector Average
ARQQ
Arqit Quantum
15.81
-23.22
-59.49%
QUBT
Quantum Computing
6.59
-9.35
-58.66%
IONQ
IonQ
31.16
-28.21
-47.52%
QBTS
D-Wave Quantum
11.63
-19.43
-62.56%
RGTI
Rigetti Computing
11.48
-28.12
-71.01%
LAES
SEALSQ Corp
1.55
-4.17
-72.90%
Arqit Quantum Corporate Events
Arqit Quantum Posts Mixed Preliminary 2026 Results and Wins NATO Secure Networking Deal
Oct 8, 2026
On 8 October 2026, Arqit Quantum reported select preliminary unaudited financial results for the six months and full fiscal year ended 30 September 2026. Management expects second-half revenue of $355,000 to $380,000, down from $463,000 a year ear...
Arqit Quantum Shareholders Approve All Proposals at 2026 AGM
Sep 9, 2026
On September 8, 2026, Arqit Quantum Inc. held its 2026 annual general meeting of shareholders, with 9,421,171 ordinary shares represented in person or by proxy, constituting a quorum. Shareholders approved all proposals presented at the meeting, i...
Arqit Quantum Sets September AGM and Confirms Expiry, Delisting of Nasdaq-Listed Warrants
Aug 19, 2026
Arqit Quantum Inc., a London-based quantum encryption specialist listed on Nasdaq as a foreign private issuer, has called its 2026 Annual General Meeting of shareholders for September 8, 2026, in London and via webcast. Shareholders of record as o...
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.