For those looking to find strong Computer and Technology stocks, it is prudent to search for companies in the group that are outperforming their peers. Has Arqit Quantum Inc. (ARQQ) been one of those stocks this year? By taking a look at the stock's year-to-date performance in comparison to its Computer and Technology peers, we might be able to answer that question.Arqit Quantum Inc. is a member of the Computer and Technology sector. This group includes 613 individual stocks and currently holds a Zacks Sect ...

VANCOUVER, British Columbia, Dec. 16, 2025 (GLOBE NEWSWIRE) -- Equity InsiderNews Commentary – Major cybersecurity agencies warn that adversaries are currently exfiltrating and storing sensitive government data in harvest now, decrypt later attacks, creating immediate pressure on federal agencies to fortify digital infrastructure[1]. Congress reauthorized a billion dollar cybersecurity grant program in November after a 43-day shutdown, signaling bipartisan commitment to upgrading state and federal defenses ...

Core Viewpoint - Arqit Quantum (ARQQ) has been consistently viewed negatively, with a year-to-date decline of over 23% despite the initial hype surrounding the company [1] Company Analysis - The company has faced a significant pullback in its stock price, indicating potential challenges in maintaining investor confidence [1] - The focus on momentum in the technology sector suggests that the company may struggle to regain traction amidst market volatility [1] Industry Context - The technology landscape is currently influenced by various factors, including the AI boom and historical market events such as the dot-com bubble and the credit default crisis of 2008, which may impact investor sentiment towards companies like Arqit [1]

Core Insights - Arqit Quantum Inc. is focused on quantum-safe encryption technology, essential for protecting data from future quantum computing threats [1] Financial Performance - For the earnings report on December 9, 2025, Arqit reported an EPS of -$0.92, matching estimates, with revenue of $470,000, also in line with expectations [1][5] - Anticipated revenue for fiscal year 2026 is projected to be approximately $1.2 million, driven by seven contracts, including multi-year agreements with telecom operators and various organizations [2][5] Valuation Metrics - The company has a negative P/E ratio of approximately -15.64, indicating a lack of profitability [3] - The price-to-sales ratio is extremely high at about 1,320, suggesting a significant premium paid by investors for each dollar of sales [3] - The enterprise value to sales ratio stands at roughly 1,250, reflecting a high valuation relative to sales [3] Financial Health - The enterprise value to operating cash flow ratio is negative at approximately -17.85, indicating financial challenges [4] - The debt-to-equity ratio is low at 0.052, suggesting minimal debt compared to equity [4] - The current ratio is 2.45, indicating that Arqit has more than twice the current assets needed to cover its current liabilities, a positive sign of liquidity [4]

Financial Data and Key Metrics Changes - For fiscal year 2025, the company generated $530,000 in revenue, an increase from $293,000 in fiscal year 2024, primarily due to the commencement of a multi-year contract in the Middle East [17] - Revenue in the second half of fiscal year 2025 was $463,000, significantly higher than the first half's $67,000, indicating a positive revenue trajectory [18] - The company ended fiscal year 2025 with $1.2 million in contractual revenue expected to be recognized in fiscal year 2026 [15][18] - Administrative expenses for fiscal year 2025 were $34.7 million, up from $25.4 million in fiscal year 2024, mainly due to a reduction in foreign exchange gains and increased operational costs [19][21] Business Line Data and Key Metrics Changes - Revenue from the Arqit SKA Platform as a Service and Arqit Network Secure products totaled $476,000 in fiscal year 2025 [18] - Professional services and maintenance revenue was $54,000 for the period, compared to $102,000 in fiscal year 2024 [19] Market Data and Key Metrics Changes - The company has seen increased activity with prospective customers, signing 12 demonstration and test engagements in the first two months of fiscal year 2026, indicating a strong market migration towards post-quantum cybersecurity [6] - The market is experiencing a shift from awareness of quantum threats to action, with organizations increasingly recognizing the need to upgrade their cryptographic posture [4][5] Company Strategy and Development Direction - The company is focused on broadening its product and service offerings, including the acquisition of Amplify's encryption intelligence product to enhance customer engagement [3][7] - Collaborations with Intel and Sparkle aim to expand product solutions into confidential computing and quantum-secure communications [4][9] - The company is targeting the telecom and defense sectors for growth, having secured contracts with major players like Sparkle and RHD Telecom [11][13] Management's Comments on Operating Environment and Future Outlook - Management believes fiscal year 2025 represents a trough year for revenue, with expectations of building upon the momentum into fiscal year 2026 [15] - The company is optimistic about the increasing demand for quantum-safe solutions and its position in the market to capture this demand [15][23] Other Important Information - The company has a cash and cash equivalents balance of $36.9 million as of September 30, 2025 [21] - The company has 91 employees as of September 30, 2025, compared to 82 the previous year, indicating growth in operational capacity [20] Q&A Session Summary Question: What is driving the higher level of demonstrations and activity recently? - Management noted that significant news flow on quantum advancements and regulatory pressures are driving organizations to take action regarding their cryptographic posture [26][27] Question: What does the sales cycle look like for Encryption Intelligence compared to legacy products? - Management indicated that the sales cycle for Encryption Intelligence is shorter, with telco operators showing interest in using the tool on an ongoing basis [30][31] Question: Are there additional acquisition opportunities similar to the Amplify purchase? - Management expressed interest in acquiring companies that align with data sovereignty and confidential computing, particularly those lacking deep intellectual property in quantum-safe technologies [32][33] Question: Should we anticipate any change in operating expenses for fiscal 2026? - The CFO confirmed plans to maintain current operating expense levels, targeting a maximum cash spend of $2.5 million per month [35]

Financial Data and Key Metrics Changes - For fiscal year 2025, the company generated $530,000 in revenue, an increase from $293,000 in fiscal year 2024, primarily due to the commencement of a multi-year contract in the Middle East [17][18] - The first half of fiscal 2025 revenue was $67,000, while the second half saw a significant increase to $463,000, driven by new contracts [18] - Administrative expenses for fiscal year 2025 were $34.7 million, up from $25.4 million in fiscal year 2024, mainly due to reduced foreign exchange gains and increased operational costs [19][20] - The operating loss for the period was $38.5 million compared to a loss of $26.9 million in fiscal year 2024, attributed to higher administrative expenses and an exceptional item related to a class action lawsuit [20][21] Business Line Data and Key Metrics Changes - Revenue from the Arqit SKA Platform as a service and Arqit Network Secure products totaled $476,000 for fiscal year 2025, compared to $191,000 in fiscal year 2024 [18][19] - Professional services and maintenance revenue was $54,000 for the period, down from $102,000 in fiscal year 2024 [19] Market Data and Key Metrics Changes - The company has seen increased activity with prospective customers, signing 12 demonstration and test engagements in the first two months of fiscal year 2026, indicating a strong market migration towards post-quantum cybersecurity [6][16] - The company is experiencing momentum in customer engagements, particularly in the telecom and defense sectors, with significant contract wins [12][14] Company Strategy and Development Direction - The company aims to broaden its product and service offerings, including the acquisition of Amplify's encryption intelligence product to enhance customer engagement in post-quantum cryptography [3][8] - Collaborations with Intel and Sparkle are expected to expand product solutions to include confidential computing and quantum-secure communications [4][10] - The focus remains on building momentum in key markets, particularly telecom and defense, while addressing the increasing need for enhanced cryptography [15][16] Management's Comments on Operating Environment and Future Outlook - Management believes fiscal 2025 represents a trough year for revenue, with expectations of growth in fiscal year 2026 driven by increasing market demand for quantum-safe solutions [16][22] - The company is optimistic about its position in the marketplace, anticipating that organizations will begin their migration journey towards post-quantum encryption [16][22] Other Important Information - The company ended fiscal year 2025 with $1.2 million in executed contracts that could be recognized in fiscal year 2026, indicating a positive revenue trajectory [16][18] - The company has a cash and cash equivalents balance of $36.9 million as of September 30, 2025 [21] Q&A Session Summary Question: What is driving the higher level of demonstrations and activity recently? - Management noted that significant news flow on quantum advancements has increased awareness and urgency among organizations to address quantum threats [24][25] Question: What does the sales cycle look like for Encryption Intelligence compared to legacy products? - The sales cycle for Encryption Intelligence is shorter, with organizations eager to use the tool for ongoing assessments of their cryptographic landscape [27][28] Question: Are there additional acquisition opportunities similar to the recent asset purchase? - Management is exploring tuck-in opportunities related to data sovereignty and confidential computing, which align with the company's strategic focus [30] Question: What is the competitive landscape like for post-quantum security? - Management acknowledged increased competition from traditional security vendors but emphasized the company's unique position and extensive experience in the field [32][33] Question: What industries are showing interest in the company's solutions? - The company is seeing interest from regulated industries, critical infrastructure sectors, and organizations rich in intellectual property, particularly in financial services and life sciences [35][36]

Financial Performance - Arqit generated revenue from its principal business operations in cybersecurity services starting in the fiscal year ended September 30, 2021, but continues to incur net losses consistent with its strategy [241]. - For the year ended September 30, 2025, Arqit reported a net cash used in operating activities of $29.553 million, with a net loss of $35.343 million and adjustments for non-cash items of $5.604 million [249]. - Arqit reported a net cash generated from financing activities of $47.134 million for the year ended September 30, 2025, primarily from share issuances [252]. Capital Raising - The company raised approximately $37.180 million by issuing 1,959,420 shares under its ATM Program in the year ended September 30, 2025 [243]. - In February 2023, Arqit completed a registered direct offering generating proceeds of approximately $20.0 million from the sale of 400,000 ordinary shares and warrants [244]. Cash Flow - Cash flows from investing activities improved to a net cash inflow of $0.683 million for the year ended September 30, 2025, compared to outflows in previous years [251]. Risk Management - Arqit is exposed to foreign exchange risk primarily with respect to British pounds sterling and Euro, and manages this risk by holding bank accounts in multiple currencies [237]. - The company has no significant concentration of credit risk, as it places surplus cash with banks based on a minimum credit rating of A3/A- [235]. Research and Development - The company had no research costs reflected in the statement of comprehensive income for the periods ended September 30, 2025, 2024, and 2023, as the research phase was deemed complete in 2018 [254]. Accounting and Valuation - As of September 30, 2025, the carrying amount of capitalized development costs was $2,112 million, an increase from $1,939 million at September 30, 2024, and a decrease from $3,414 million at September 30, 2023 [259]. - The fair value of share-based compensation is determined using the Black Scholes valuation model, with adjustments based on actual forfeitures during the vesting period [260][261]. - Arqit uses a Binomial Option Pricing Model for estimating the fair value of warrants, with assumptions disclosed in the audited consolidated financial statements [258]. - Deferred tax assets are assessed based on the likelihood of generating sufficient taxable earnings in future periods, impacting the realization of net deferred tax assets recorded at the reporting date [262]. Regulatory Compliance - Arqit is in the process of evaluating the benefits of relying on reduced reporting requirements under the JOBS Act, which may exempt it from certain obligations until September 3, 2026 [240].

Core Insights - Arqit Quantum Inc. reported a successful fiscal year 2025, with a return to revenue growth driven by key market sectors such as telecom, government, and defense [2] - The company has completed its B-2-B-2-B business model through partnerships with technology hardware and services providers [2] - Arqit has acquired Encryption Intelligence tools, enhancing its ability to provide comprehensive visibility into encryption technologies and vulnerabilities [2] Financial Performance - Reported revenue for fiscal year 2025 was $530,000, with a significant increase in the second half generating $463,000 compared to $67,000 in the first half [3] - Revenue was derived from seven contracts, including two multi-year contracts that provide annually recurring revenue [3] - As of September 30, 2025, the company expects to generate approximately $1.2 million in revenue for fiscal year 2026 from executed contracts [3][4] Strategic Outlook - The company anticipates significant growth in fiscal year 2026, supported by a strong pipeline of demonstration and test licenses signed with prospective customers [3] - Arqit has maintained cost discipline, with operating costs averaging $2.5 million per month [3] - The company ended the fiscal year with cash and cash equivalents of approximately $36.9 million [3] Market Engagement - Arqit is actively engaging with telecom network operators and government sectors, with five government or military-related customers [7] - The company is developing its Encryption Intelligence offering to assist organizations in migrating to a quantum-secure cryptographic posture [7] - Arqit is focusing on the confidential computing and data sovereignty markets, which are seen as significant opportunities for its encryption solutions [7]

Core Insights - Arqit Quantum Inc. and Sparkle have successfully demonstrated quantum-resilient data transmission over Sparkle's optical network in Greece, marking a significant advancement in quantum-safe encryption technology [1][2][3] Group 1: Technology Implementation - The proof of concept (POC) was implemented on Sparkle's metropolitan optical ring in Athens, showcasing Arqit's encryption technology embedded directly into the optical transport layer [2] - Sparkle confirmed that sensitive data can be secured at the physical network layer without compromising performance, achieving end-to-end encryption on multi-100G optical links [3] Group 2: Industry Impact - This collaboration represents a major step towards securing next-generation telecom infrastructure, combining Sparkle's QSI leadership with Arqit's quantum-safe encryption [5] - The project demonstrates a scalable solution for quantum-resistant optical networking, laying the groundwork for more resilient data networks globally [5] Group 3: Market Demand - The CEO of Arqit emphasized the need for effective and practical solutions to secure data networks against emerging threats, indicating a demand from telecom operators for low-disruption paths to quantum-safe security [6] - The POC illustrates that quantum-safe encryption can be integrated into existing optical infrastructure, protecting high-capacity data links without operational disruptions [6] Group 4: Product Features - Sparkle's Quantum-Safe over Internet (QSI) solution operates directly on optical transponders, integrating Arqit SKA-Platform™ encryption into the physical layer [9] - The solution supports multi-100G optical links and scales with growing network demands, requiring no physical changes to optical hardware [9]

Core Points - Arqit Quantum Inc. will report its financial results for the fiscal year ending September 30, 2025, on December 9, 2025 [1] - A conference call will be held on the same day at 11:00 a.m. ET / 8:00 a.m. PT, featuring the CEO and CFO [2] Company Overview - Arqit Quantum Inc. specializes in quantum safe encryption, providing a unique encryption software service that secures communications against current and future encryption attacks, including those from quantum computers [3] - The company's Symmetric Key Agreement Platform allows endpoint devices to create encryption keys locally, ensuring computational security and facilitating Zero Trust Network Access [3] - Arqit has received multiple awards for its innovations, including recognition as an IDC Innovator for Post-Quantum Cryptography in 2024 and several GSMA Global Mobile Awards [3] - The company is ISO 27001 Standard certified, indicating its commitment to information security management [3]