Revenue Performance - Total revenue for the three months ended September 30, 2024, was $70,469 thousand, a decrease of $5,211 thousand or 7% compared to $75,680 thousand for the same period in 2023[108]. - For the six months ended September 30, 2024, total revenue decreased by $26.4 million, or 16%, to $141.8 million compared to $168.2 million in the same period in 2023[123]. Product and Service Revenue - Product revenue decreased by $6,162 thousand, or 14%, to $36,785 thousand, primarily due to customers transitioning to subscription-based offerings[109]. - Service and subscription revenue increased by $816 thousand, or 3%, to $31,321 thousand, driven by new support bookings[109]. - Product revenue decreased by $23.7 million, or 23%, primarily due to a $20 million decrease in demand from large hyperscale customers[124]. - Service and subscription revenue decreased by $2.7 million, or 4%, driven by certain long-lived products reaching their end-of-service-life[125]. - The transition to subscription-based offerings is expected to continue affecting product revenue, particularly in Primary and Secondary storage systems[109]. Profitability and Expenses - Gross profit for the three months ended September 30, 2024, was $29,268 thousand, down $3,468 thousand or 11% from $32,736 thousand in the same period in 2023[111]. - Gross profit for the six months ended September 30, 2024, was $55.4 million, representing a gross margin of 39.1%, down from 40.7% in the same period in 2023[127]. - Operating expenses totaled $36,202 thousand, a slight decrease of $246 thousand or 1% compared to $36,448 thousand in the prior year[115]. - Operating expenses increased by $2.8 million, or 4%, to $80.1 million, with general and administrative expenses rising by $12.1 million, or 53%[130]. - General and administrative expenses rose by $3,736 thousand, or 36%, to $13,977 thousand, primarily due to non-recurring costs related to financial statement restatements[115]. - Research and development expenses decreased by $888 thousand, or 10%, to $8,264 thousand, reflecting improved organizational efficiencies[115]. Interest and Taxation - Interest expense increased by $2,276 thousand, or 59%, to $6,131 thousand due to a higher effective interest rate on the Term Loan[118]. - Interest expense increased by $2.9 million, or 41%, due to a higher effective interest rate on the Term Loan[134]. - The income tax provision for the six months ended September 30, 2024, was $605,000, a decrease of $458,000, or 43%, compared to $1.1 million in 2023[138]. Cash Flow and Debt - Net cash used in operating activities was $17.2 million for the six months ended September 30, 2024, compared to $11.3 million for the same period in 2023, primarily due to lower earnings[144]. - Net cash used in investing activities was $3.2 million for the six months ended September 30, 2024, down from $3.9 million in the same period in 2023, attributed to capital expenditures[145][147]. - Net cash provided by financing activities was $11.5 million for the six months ended September 30, 2024, compared to $14.8 million for the same period in 2023, primarily related to borrowings on the Term Loan[147][148]. - The net increase in cash and cash equivalents was a decrease of $8.9 million for the six months ended September 30, 2024, compared to a decrease of $421,000 in the same period in 2023[146]. - As of September 30, 2024, the company had cash and cash equivalents of $16.7 million, with total outstanding Term Loan debt of $104.7 million and PNC Credit Facility borrowings of $28.4 million[141]. Risks and Liabilities - The company continues to face longer sales cycles and an unpredictable macro environment, impacting future performance[103]. - The company is subject to various debt covenants, and failure to comply could adversely affect its financial condition and ability to service obligations[142]. - The company has contingent liabilities primarily related to product liability and potential intellectual property infringement, with little historical cost associated with such indemnifications[149]. - There have been no material changes to the company's quantitative and qualitative disclosures about market risk from those described in the Form 10-K[155]. Other Financial Metrics - The change in fair value of warrant liabilities increased by $0.1 million, or 2%, to $5.2 million for the six months ended September 30, 2024[135]. - Loss on debt extinguishment was $3.0 million for the six months ended September 30, 2024, related to the prepayment of the Term Loan[136]. - Other income (expense) was $(1.4) million, a decrease of $745,000, or 118%, primarily due to fluctuations in foreign currency exchange rates[133].

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $70.5 million, a decrease of approximately 7% year-over-year and down about 1% from the prior quarter [14] - GAAP gross margin was 41.5%, compared to 43.3% in the same quarter last year and 36.6% in the prior quarter [16] - GAAP net loss for the quarter was $13.5 million, or a loss of $2.82 per share, including approximately $4.7 million of one-time expenses related to debt and restructuring activities [17] - Adjusted EBITDA was essentially breakeven at a negative $300,000, compared to a positive $1.7 million in the prior year and a negative $3.1 million in the prior quarter [19] - Non-GAAP operating expenses were $30.4 million, a reduction of approximately 9% year-over-year [18] Business Line Data and Key Metrics Changes - Sales bookings were consistent with overall business expectations, despite operational headwinds related to the supply chain [15] - Backlog remained elevated at approximately $14 million, above the target run rate of $8 million to $10 million [16] - Subscription portion of total annual recurring revenue (ARR) increased approximately 28% year-over-year to $19.6 million, with over 88% of new unit sales being subscription-based [24] Market Data and Key Metrics Changes - The company is experiencing longer lead times for high-speed all-flash systems, which have increased from about 2-3 weeks to up to 10 weeks [37] - The transition to a new manufacturing partner is expected to impact operations in the upcoming quarter [27][50] Company Strategy and Development Direction - The company is focusing on reallocating resources towards high-priority growth initiatives, particularly Myriad and ActiveScale [34] - The go-to-market strategy is evolving to enhance sales resources dedicated to select product lines [34] - The company anticipates that operational improvements and new product introductions will drive revenue growth and profitability in the second half of FY 2025 and beyond [33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing operational headwinds, particularly related to supply chain issues, but expressed confidence in the bookings and backlog [37][40] - The company expects to return to positive cash flow in the back half of FY 2025 and anticipates FY 2026 to be cash flow positive for the first time in five years [9][26] - The updated fiscal year FY 2025 outlook is set at a target of $280 million in revenue, with adjusted EBITDA expected to be $3 million [31] Other Important Information - The company has achieved almost $40 million in total savings as of the end of FY 2025 compared to FY 2023 [9] - Cash, cash equivalents, and restricted cash at the end of Q2 were approximately $17 million, with outstanding debt totaling $104.7 million [25] Q&A Session Summary Question: Revenue shortfall and supply chain issues - Management indicated that the sales team brought in the necessary purchase orders, but longer lead times for high-speed all-flash systems impacted fulfillment [37][38] Question: Metrics around Myriad and ActiveScale - Management reported significant pipeline growth and over 1,000 customers on subscription software [41] Question: Cash usage and future cash flow - Management discussed the anticipated return to positive cash flow in the back half of FY 2025, with significant one-time expenses expected to subside [42][43] Question: Conversion rates needed for breakeven cash flow - Management noted that while win rates are slightly down, the focus on recurring revenue and operational efficiency is key to achieving breakeven cash flow [46] Question: Elevated backlog persistence - Management acknowledged that elevated backlog may persist due to ongoing operational headwinds and a factory transition [50]

Revenue and Profit - Revenue for fiscal Q2 2025 was $70.5 million, compared to $75.7 million in the prior year quarter, reflecting lower revenue from primary storage[3] - Total revenue for the three months ended September 30, 2024, was $70.469 million, a decrease from $75.680 million in the same period in 2023[17] - GAAP gross profit for Q2 2025 was $29.3 million, or 41.5% of revenue, compared to $32.7 million, or 43.3% of revenue in Q2 2024[3] - Gross profit for the three months ended September 30, 2024, was $29.268 million, down from $32.736 million in the same period in 2023[17] Net Loss and Adjusted EBITDA - GAAP net loss for Q2 2025 was $13.5 million, or ($2.82) per share, compared to a net loss of $3.3 million, or ($0.70) per share in Q2 2024[5] - Net loss for the three months ended September 30, 2024, was $13.527 million, compared to a net loss of $3.331 million in the same period in 2023[17] - Adjusted EBITDA for Q2 2025 was approximately breakeven at ($0.3) million, a $3.0 million improvement sequentially[6] - Adjusted EBITDA for the six months ended September 30, 2024, was $(3.391) million, compared to $3.164 million in the same period in 2023[27] - Net loss for the six months ended September 30, 2024, was $34.347 million, compared to $12.473 million in the same period in 2023[18] - GAAP net loss for the three months ended September 30, 2024, was $13.53 million, compared to $3.33 million in the same period in 2023[28] - GAAP net loss for the six months ended September 30, 2024, was $34.35 million, compared to $12.47 million in the same period in 2023[28] Subscription ARR - Subscription ARR increased 28% year-over-year to $19.6 million[1] Interest Expense and Debt - Total interest expense for Q2 2025 was $6.1 million, compared to $3.9 million in the same period last year[6] - Outstanding term loan debt as of September 30, 2024, was $104.7 million, compared to $87.9 million as of September 30, 2023[6] - Borrowings of long-term debt, net of debt issuance costs for the six months ended September 30, 2024, were $24.655 million, compared to $14.083 million in the same period in 2023[18] Cash and Cash Equivalents - Cash, cash equivalents, and restricted cash as of September 30, 2024, were $17.0 million, compared to $25.8 million as of September 30, 2023[6] - Cash and cash equivalents decreased to $16.719 million as of September 30, 2024, from $25.692 million as of March 31, 2024[16] - Cash, cash equivalents, and restricted cash at the end of the period for the six months ended September 30, 2024, were $16.960 million, compared to $25.754 million in the same period in 2023[18] Assets and Liabilities - Total assets as of September 30, 2024, were $163.146 million, down from $187.615 million as of March 31, 2024[16] - Accounts receivable decreased to $51.073 million as of September 30, 2024, from $67.788 million as of March 31, 2024[16] - Total current liabilities decreased to $134.601 million as of September 30, 2024, from $249.944 million as of March 31, 2024[16] - Deferred revenue, current portion, decreased to $69.369 million as of September 30, 2024, from $78.511 million as of March 31, 2024[16] Research and Development Expenses - Research and development expenses for the three months ended September 30, 2024, were $8.264 million, down from $9.152 million in the same period in 2023[17] Comprehensive Loss - Total comprehensive loss for the three months ended September 30, 2024, was $12.868 million, compared to $4.051 million in the same period in 2023[17] Operating Activities and Cash Flow - Net cash used in operating activities for the six months ended September 30, 2024, was $17.194 million, compared to $11.345 million in the same period in 2023[18] Stock-Based Compensation - Stock-based compensation expense for the six months ended September 30, 2024, was $1.641 million, compared to $2.831 million in the same period in 2023[18] - Stock-based compensation expense for the three months ended September 30, 2024, was $716 thousand, compared to $939 thousand in the same period in 2023[28] Depreciation and Amortization - Depreciation and amortization expense for the six months ended September 30, 2024, was $3.347 million, compared to $5.295 million in the same period in 2023[18] Loss on Debt Extinguishment - Loss on debt extinguishment for the six months ended September 30, 2024, was $3.003 million, compared to $0 in the same period in 2023[18] Non-Recurring Project Costs - Non-recurring project costs for the six months ended September 30, 2024, were $12.728 million, compared to $1.853 million in the same period in 2023[27] Adjusted Net Income (Loss) - Adjusted net income (loss) is a non-GAAP financial measure defined by the company as net loss before restructuring charges, stock-based compensation expense, amortization of acquisition-related intangible assets, loss on debt extinguishment, non-recurring project costs, and fair value of warrants adjustments[21] - Non-GAAP adjusted net loss for the three months ended September 30, 2024, was $8.74 million, compared to $4.38 million in the same period in 2023[28] - Non-GAAP adjusted net loss for the six months ended September 30, 2024, was $17.19 million, compared to $8.53 million in the same period in 2023[28] Adjusted Net Loss Per Share - Adjusted net loss per share – basic and diluted for the three months ended September 30, 2024, was $1.82, compared to $0.93 in the same period in 2023[28] - Adjusted net loss per share – basic and diluted for the six months ended September 30, 2024, was $3.59, compared to $1.81 in the same period in 2023[28] Restructuring Charges - Restructuring charges for the three months ended September 30, 2024, were $1.42 million, compared to $1.34 million in the same period in 2023[28] Fair Value of Warrants Adjustments - Fair value of warrants adjustments for the three months ended September 30, 2024, was a gain of $3.55 million, compared to a gain of $4.40 million in the same period in 2023[28] Weighted Average Shares - Weighted average shares – basic and diluted for the three months ended September 30, 2024, were 4.79 million, compared to 4.75 million in the same period in 2023[28] Future Expectations - For fiscal Q3 2025, the company expects revenue of $72.0 million, plus or minus $2.0 million, and adjusted EBITDA of approximately $2.0 million[7] - Non-GAAP adjusted basic net loss per share for Q3 2025 is expected to be ($0.75), plus or minus $0.05[7]

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Quantum eMotion Corp. Featured in Prominent Korean Business Newspaper for Leading IoT Security SolutionsOctober 31, 2024 9:41 AM EDT | Source: Quantum eMotion Corp.Montreal, Quebec--(Newsfile Corp. - October 31, 2024) - Quantum eMotion Corp. (TSXV: QNC) (OTCQB: QNCCF) ("QeM" or the "Company") proudly announces its feature in the latest column of the Korea Business Herald, one of Asia's most influential business publications. The article, written by Arthur Herman, senior fellow at the Hudson In ...

The UK's National Quantum Computing Centre (NQCC) officially opened the doors of its landmark facility on Harwell Campus on October 25. The state-of-the-art facility includes a fully operational 24-qubit Ankaa™-class Rigetti system, which will be made available to NQCC researchers for testing, benchmarking, and exploratory applications development. LONDON, Oct. 30, 2024 (GLOBE NEWSWIRE) -- Rigetti UK Limited, a wholly owned subsidiary of Rigetti Computing, Inc. (Nasdaq: RGTI) ("Rigetti" or the "Company"), a ...

HOBOKEN, N.J., Oct. 30, 2024 /PRNewswire/ -- Quantum Computing Inc. ("QCi" or the "Company") (Nasdaq: QUBT), an innovative, integrated photonics and quantum optics technology company, is pleased to announce significant progress as it approaches the final commissioning of its quantum photonic chip foundry, set to open in Q1 2025. In September, QCi launched a pilot program aimed at securing sales orders from early adopters for its thin film lithium niobate (TFLN) foundry services and establishing a unified ec ...