Financial Data and Key Metrics Changes - For the first half of fiscal year 2025, the company generated $67,000 in revenue compared to $119,000 in the same period of 2024, primarily due to customer delays in contract activities [28] - The operating loss for the period was $17,800,000, compared to a loss of $16,600,000 in the first half of fiscal year 2024, reflecting lower revenue and increased administrative expenses [31][32] - As of March 31, 2025, the company had cash and cash equivalents of $24,800,000 [32] Business Line Data and Key Metrics Changes - Revenue from the ARKit SKA platform as a service and ARKit Network Secure products totaled $52,400, while professional services and maintenance revenue was $14,500 for the period [28] - The company is transitioning from primarily enterprise sales to sales through channel partners, which will recognize revenue over time rather than upfront [28] Market Data and Key Metrics Changes - The market for quantum-safe encryption is growing, with increasing awareness of the need for upgraded cryptography solutions due to the threat posed by quantum computing [5][6] - Significant contracts have been signed in the telecom and defense sectors, indicating a positive market response to the company's offerings [14][23] Company Strategy and Development Direction - The company is focused on delivering its technology to large enterprises and government customers, with a shift towards a subscription licensing model to align interests with customers [10][11] - The collaboration with Intel on confidential computing is a strategic move to enhance the company's offerings and address the emerging quantum threat [19][50] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growing market awareness of quantum-safe encryption and the company's positioning to meet this demand [33][34] - The company anticipates that sales cycles will compress as it builds on existing customer relationships and leverages its technology in complex environments [47][48] Other Important Information - The company has made significant progress in product development and market penetration, with a disciplined approach to cost control [4][21] - The company is actively recruiting sales personnel with industry-specific expertise to capitalize on market opportunities [42][44] Q&A Session Summary Question: Are the deals that closed at or near the end of the fiscal period currently generating revenue? - The contract with the tier one network operator is a three-year contract, and it is expected to grow as it signs up end users. The DOD contract is a one-year contract that could lead to further opportunities [36][37] Question: What types of people are being hired for the sales team? - The company is hiring individuals with experience in specific verticals such as telecom and defense, focusing on those who can effectively communicate with customers in those sectors [42][44] Question: Do you expect any increase in operating expenses to support new contracts? - The company does not foresee significant growth in operating costs over the near term, maintaining a trailing monthly cash burn of around $2.2 to $2.4 million [54]

Core Insights - Arqit Quantum Inc. has introduced a quantum-safe encryption solution enhanced by confidential computing, ensuring that no third party, including cloud providers, can access customers' encryption keys or workloads [1][2][11] - The collaboration with Intel leverages Intel Trust Domain Extensions (TDX) to create a secure environment for managing encryption keys, enhancing data sovereignty and security [1][11][12] Technology Overview - Arqit NetworkSecure operates within a Trusted Domain created by Intel TDX, where encryption keys are generated and managed securely, isolated from both Arqit and Intel [3][4] - The architecture allows for quantum-secure data flows without exposing sensitive information to the underlying infrastructure [4][15] Use Cases - **Network Security for Telcos**: Arqit NetworkSecure can be deployed in Network-as-a-Service (NaaS) or virtual RAN environments, ensuring traffic encryption and key management remain isolated and quantum-safe [5] - **Enterprise Edge & AI Workloads**: Large enterprises can securely move sensitive workloads between on-premises and cloud environments, maintaining strong isolation and secure communication [6] - **Virtual Hardware Security Modules (HSMs)**: Organizations can utilize Arqit's symmetric key platform as a cost-effective virtual HSM, meeting high security standards without the need for physical hardware [7] - **Secure Collaboration Across Domains**: In sectors like defense and finance, organizations can enable secure analytics across trusted domains using Arqit's ephemeral key model [8] Future Outlook - The advancements in confidential computing are expected to enhance security further, with features such as frequent key rotation and quantum-safe symmetric encryption [9][10] - This level of assurance is particularly crucial for regulated industries, emphasizing the importance of data sovereignty and protection [10]