Arqit Quantum H1 2025 Earnings Report

Arqit Quantum EPS Results

• Actual EPS: -$1.35
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Arqit Quantum Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Arqit Quantum Announcement Details

• Quarter: H1 2025
• Date: 5/22/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, May 22, 2025
• Conference Call Time: 11:00AM ET

Arqit Quantum (NASDAQ:ARQQ) 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 maintenance and support, and professional services. Arqit Quantum Inc. is based in London, the United Kingdom.

Arqit Quantum H1 2025 Earnings Call Transcript

Key Takeaways

• The three-year contract with a tier-one telecom network operator for ARKET Network Secure allows resale to end customers and is expected to scale with demand, validating the company’s subscription licensing model and go-to-market strategy.
• The first U.S. Department of Defense win embeds ARKET SKA software in a funded program of record, confirming NSA compliance via the Commercial Solutions for Classified program and opening doors to further defense opportunities.
• The collaboration with Intel integrates ARKET encryption into Intel TDX enclaves for confidential computing, enabling quantum-safe protection of data at rest, in transit, and in process across cloud and AI workloads.
• First-half fiscal 2025 revenue fell to $67,000 from $119,000 a year earlier due to end-customer deployment delays and the shift from upfront enterprise sales to subscription-recognized-over-time models, though delayed revenues are expected in H2.
• The company reduced headcount by 43% to 72 employees, exercised disciplined cost control with administrative expenses near budget, and maintains a cash balance of $24.8 million with an approximate $2.2–2.4 million monthly burn rate.

Presentation

[Operator]

Thank you for standing by. On today's call, we will be referring to the press release issued this morning that details the company's first half fiscal year twenty twenty five results, which can be downloaded from the company's website at arket.uk. At the end of the company's prepared remarks, there will be a question and answer period for selected equity research analysts. Please note that those selected equity research analysts that would like to ask a question in the Q and A session will need to dial into the call rather than joining through the webcast link. Finally, a recording of the call will be available on the Investors section of the company's website later today.

[Operator]

Please note that this webcast includes forward looking statements. Statements about the company's beliefs and expectations contain words such as may, will, could, believe, expect, anticipate and similar expressions are forward looking statements and are based on assumptions and beliefs as of today. The company encourages you to review the Safe Harbor statements, risk factors, and other disclaimers contained in today's press release as well as in the company's filings with the Securities and Exchange Commission, which identify specific risk factors that may cause actual results or events to differ materially from those described in our forward looking statements. The company does not undertake to publicly update or revise any forward looking statements after this webcast. And now, I'll turn the call over to Andy Lieber, the company's Chief Executive Officer. Andy?

[Andy Leaver, CEO at Arqit Quantum]

Thank you, and thank you for joining our first half of fiscal year twenty twenty five earnings call. I'm pleased by ARKit's performance for the first half of fiscal year twenty twenty five and by recently announced developments in the business. If one looks at our results solely through the lens of first half revenue, my comment may leave you slightly confused, but please bear with me for a moment. Harket has developed a transformational technology for addressing significant weaknesses in today's encryption technology, weaknesses which will be magnified by the arrival of quantum computing. We believe that our Symmetric Key Agreement encryption software is the most secure, standards compliance, and implementation flexible solution to meet the threat to data and communications.

[Andy Leaver, CEO at Arqit Quantum]

We are building a company to deliver our technology to sophisticated large enterprises and government customers. This is an ambitious objective, one with significant obstacles to overcome and timelines, which often seem elastic. However, I am pleased that we're making significant progress towards realizing our objective. Circling back to our first half performance and recent announcements, I'm delighted because Arke has made significant progress in product development, penetration of key identified markets, sales pipeline growth, shift in business model, and cost and business process discipline. Tangible progress along all of these vectors are additional courses of BRIC which build towards long term success.

[Andy Leaver, CEO at Arqit Quantum]

Before I discuss ARKit's performance for the first half, let me briefly outline the market environment for our Symmetric Key Agreement encryption software. The current weaknesses of today's public key cryptography, which safeguards much of the world's data, remain largely unmitigated. The pace of investment in and the development of quantum computers, which pose an existential threat to current encryption, is accelerating. Google, Amazon, and Microsoft all announced quantum computing chips during the last six months. Last week, Continuum, which is majority owned by Honeywell, signed a $1,000,000,000 deal with Qatar, which furthers developments of its quantum computing technology.

[Andy Leaver, CEO at Arqit Quantum]

And this week, D Wave announced its 4,400 qubit sixth generation quantum computer, a major leap forwarding capability which surprised the financial markets. There is little doubt that quantum computing at scale, known as Q Day, is coming. When Q Day arrives, it's uncertain, but I would predict it will be sooner than most expect given the players developing the technology and the vast sums being invested. And when it does, data that has not been safeguarded with quantum safe encryption is at risk as quantum computers will render existing public key cryptography obsolete. Awareness of the need to upgrade to post quantum cryptography is growing and the call to action increasingly urgent.

[Andy Leaver, CEO at Arqit Quantum]

Last week, Japan's final services financial services agency instructed Japanese banks to take immediate action to begin shifting to post quantum cryptography. This is just the latest example of influential government bodies, including the White House and the NSA, sounding the alarm. ARKit was early in identifying the risk of current cryptography and early in identifying a market opportunity for a solution. We've developed Symmetric Key Cryptography software, which is quantum safe and easily adopted as it is compliant with many of the most widely used communication standards. Put simply, we as a company have heavily invested in the right products for the current quantum threat at the right time.

[Andy Leaver, CEO at Arqit Quantum]

We feel uniquely positioned to take on the coming threats in the commercial, federal, and defense sectors. The market for our product keeps moving towards us. We're beginning to feel the market bow wave pushing us forward and is evident in our recent developments prospective customer interactions. We talked much about our collaboration with a leading tier one telecom network operator during our fiscal year twenty twenty four results. Our partner integrated our ARKit Network Secure encryption product into its network as a service and announced in 2024, it will be rolling the product out to market.

[Andy Leaver, CEO at Arqit Quantum]

Importantly, shortly before the close of our first half, to enable commercial rollout, the network operator signed a three year contract licensing Network Secure for resale to its end customers as part of its network as a service offering. Alkip NetworkSecure enhances and differentiates its offering. It sees a market need which we can address. The signing was the culmination of a fourteen month journey from testing to business care development to go to market strategizing. The contract highlights a number of important points.

[Andy Leaver, CEO at Arqit Quantum]

One, our focus targeting of large value vertical markets, particularly telecom networks and government defense was the right decision. Two, our shift to a go to market strategy through leading hardware and technology vendors and network operators is the correct approach. Integrating with and enhancing products and services which end users already consume is an easier sale, and our partners are a field Salesforce multiplier. Three, our shift to a subscription licensing model properly aligns our interest with those of our customers. Our arrangement with a network operator is a b to b to b model.

[Andy Leaver, CEO at Arqit Quantum]

The initial license is for a defined amount of capacity of our products and can grow as end customer demand increases. This style of contract encourages the initial commitment to our product by our customer at a pay as you grow approach as end customers take up the offering. Our customer succeeds, we succeed. Our interests are aligned. Four, and most importantly, there is end user demand.

[Andy Leaver, CEO at Arqit Quantum]

The network operator is already engaged with three significant end user customers for its network as a service secured by ARKit Network Secure. I expect that book of business will continue to grow, and we will be scaling up the contract to meet demand. And a final thought on this contract. It was a fourteen month journey from a standing start to a signed contract. It's a blueprint which we are replicating with a significant number of other large brand name network operators with whom we are engaged.

[Andy Leaver, CEO at Arqit Quantum]

We expect cycle times to compress for these opportunities. In addition to the telecom network vertical market, the defense sector is another key market on which we are focused. Cybersecurity is a critical focus for defense and intelligence organizations. The battlefield from the warfighter to drones and finally command and control is increasingly being digitalized. The digital battlefield requires the highest levels of data security.

[Andy Leaver, CEO at Arqit Quantum]

We have spent significant time and resources in our effort to penetrate the defense market. Shortly before the close of our first half, we signed a contract which has ARCHET Symmetric Key Agreement software embedded into a solution sold to the US Department of Defense for a funded program of record. This is our first win with the DOD. The solution is in partnership with perhaps the largest IT vendor to the DOD and was sold through one of our established government sales channels. More details will be forthcoming.

[Andy Leaver, CEO at Arqit Quantum]

The importance of this contract win cannot be underestimated. It is a significant break in building the future success of the company. The contract confirms our technology is compliant with the National Security Agency's Commercial Solution for Classified program. Compliance with the program is critical to being considered for such contracts. Being able to reference this contract and the DOD program of record makes the pursuit of additional DOD opportunities easier as well as proves our bona fide to other military organizations around the world.

[Andy Leaver, CEO at Arqit Quantum]

We have our foot now in the door of the large DOD market. It has taken longer than we expected to get to this point. We have arrived, and we'll push to capitalize on this success with additional defense contract wins. An additional area of tangible success has been the continued development of further applications and use cases for our symmetric key agreement encryption software. Currently, our sales and contract activity is focused largely on our ARKit Network Secure product, which enables quantum secure VPN connectivity, effectively securing data in transit.

[Andy Leaver, CEO at Arqit Quantum]

Ultimately, we want to develop applications of our core technology for securing data in transit, data in process, and data at rest. Perhaps the most exciting application development has been in securing data in process, otherwise known as confidential computing. Confidential computing protects data by encrypting it while it is being processed by a computer, which is particularly important when processing sensitive data on shared infrastructure like a public cloud. For instance, confidential computing would allow AI to train and run on sensitive data without exposing the data to cloud providers, systems administrators, or data center hosts. We announced in collaboration with Intel the integration of ARKit Network Secure running inside a trusted domain enclave created by Intel TDX.

[Andy Leaver, CEO at Arqit Quantum]

What this means is that together with Intel, ARKit can protect both data, both on the cloud server, and while it's moving between cloud servers in a way that makes it completely hidden from any would be hackers as well as the hosting provider themselves. It provides data sovereignty across domains as information is processed, moved through data centers, and sent to or from cloud repositories. Confidential computing is a focus for large enterprises and is a is a significant addressable market with use cases that include AI training and inference, processing of regulated data, and the enforcement of zero trust. Our collaboration with Intel delivers a highly secure, differentiated solution to the market. The collaboration takes ARKit a significant step closer to having additional applications for data in transit, process, and at rest.

[Andy Leaver, CEO at Arqit Quantum]

This is our third collaboration with Intel. We now have joint efforts across secure mobile communications, confidential computing, and server technology. Arkin is working jointly with Intel on further developments of these integrated technologies and go to market strategies. We are excited about where our efforts with Intel may lead. We stated on our fiscal year twenty twenty four earnings call that focus was an important watchword for fiscal year twenty twenty five.

[Andy Leaver, CEO at Arqit Quantum]

'1 area of focus has been cost control, be it headcount, infrastructure, real estate, or travel. Nick Point and our CFO will touch on these shortly. We've been disciplined doing more with less and yet making substantial progress. Our performance compared to budgeted cost has been strong. I'm pleased by the discipline we have exercised, and we'll continue to do so going forward.

[Andy Leaver, CEO at Arqit Quantum]

Despite positive momentum in the market's understanding of our proposition and product adoption, some revenues were slower to be recognized than expected. We previously announced a multiyear contract with 7 figure total contract value for a customer in The Middle East. Revenue under the contract was expected to commence in early twenty twenty five. Due to unforeseen delays on part of the end customer, revenue did not commence until very late in March just before the close of the financial period. As our contract base is still modest and not able to readily absorb changes in timing, any unforeseen delays in contracts closing or revenue recognition can have an adverse effect on our results.

[Andy Leaver, CEO at Arqit Quantum]

Fortunately, the full terms of our Middle East contract remain in effect, and we expect to be recognizing revenue during the second half. I'm pleased with the progress we've made since the beginning of the first half of fiscal year twenty twenty five, With contractual wins in our two key vertical markets, telecom networking and defense, with additional visible opportunities to come. We have paying customers in The US, Europe, and The Middle East. We have exciting developments regarding additional applications in mobile communications and confidential computing, plus others that I have not yet discussed. We remain disciplined in our cost control and internal processes.

[Andy Leaver, CEO at Arqit Quantum]

For the balance of this fiscal year, the key focus points for the company will be conversion of concluded test and evaluation engagements into licenses. I see near term opportunities, particularly in the telecom network space. Also, the commencement and hopefully completion of an end to end test and evaluation collaboration, which brings together a leading data center operator, leading telecom network operator, an AI company, and leading network and server technology vendors. Finally, cost control will remain a priority. We have laid many additional courses of brick to support our success going forward.

[Andy Leaver, CEO at Arqit Quantum]

Our progress is being recognized in the marketplace, and brand and product awareness is driving sales inquiries. The level of foot traffic at our stand at the recent RSA cybersecurity conference and the sales leads generated were substantial, higher than we've experienced at prior conferences. The positive inquiry generated from leading IT vendors and network operators resulting from our tech and contract and partnership announcements was exciting. The sales leads generated created grants for continued and increased optimism for the company's prospects. I believe revenue will ramp.

[Andy Leaver, CEO at Arqit Quantum]

Our encryption software is proven and unique. The market is moving towards us. We are well positioned to meet the rapidly growing quantum threat and address the results the resulting market opportunity. Thank you. Before I turn over the floor to Nick and discuss the financials, a quick housekeeping note.

[Andy Leaver, CEO at Arqit Quantum]

As of May 20, Nick has stepped down from the board of directors. I have joined the board in his stead. I and the board want to thank Nick for his service on the board during these formative years of the company. He will continue in his role as our chief financial officer. With that, now over to you, Nick.

[Nick Pointon, CFO at Arqit Quantum]

Thank you, Andy. For the first half of fiscal year twenty twenty five, Arkit generated $67,000 in revenue as compared to $119,000 in revenue for the comparable period in 2024. As discussed earlier, revenue for the first half of the fiscal period was adversely affected due to end customer delays in commencing activity under a previously announced multi year contract in the EMEA region. The variance between periods was also due to less revenue being recognized under customer contracts as ARKIT continues to transition from primarily enterprise sales for which revenue is recognized upfront to sales through channel partners for which revenue is recognized over time as services are provided under the contract. Going forward, we expect less further impact from the transition from enterprise sales to SaaS sales as the shift is now largely complete.

[Nick Pointon, CFO at Arqit Quantum]

Revenue from the ARKit SKA platform as a service and ARKit network secure products totaled $52,400 Professional services and maintenance revenue in support of contract activity was $14,500 for the period. For the comparable period in fiscal year twenty twenty four, ARKET SKA platform as a service and ARKET network secure contract revenue totaled $65,000 and professional services and maintenance in support of contracts activity was $54,000 ARCHET SKA platform revenue for the period was generated from contracts with six customers. For the six months ended thirty one March twenty twenty four, the revenue was generated from contracts with nine customers. Four contracts represent a license for SKA platform as a service. Two such contracts represent multi year recurring revenue contracts, specifically our contract in EMEA and our contract with a tier one telecom network operator.

[Nick Pointon, CFO at Arqit Quantum]

We began recognizing revenue under both contracts immediately before the close of the first half period. Two of our six revenue generating contracts were for ARKit network secure licenses. Two contracts for ARKit SKA platform as a service are professional services and maintenance contracts attached to them. It is our expectation that future SKA platform as a service contracts will similarly have professional services and maintenance contracts attached. Our administrative expenses equates to operating costs for those more familiar with US GAAP.

[Nick Pointon, CFO at Arqit Quantum]

Administrative expenses for the first half of fiscal year twenty twenty five were $18,000,000 versus $16,800,000 for the comparable period in fiscal year twenty twenty four. The variance between periods was due to a lower headcount resulting in lower staff expenses and share based compensation and a reduction in property costs as a result of the termination of Arcot's previous office lease arrangements being more than offset by unfavorable changes in foreign exchange. ARKET's headcount as of thirty one March twenty twenty five was 72 employees as compared to 125 as of thirty one October twenty twenty thirty one March, twenty twenty four. Administrative expenses for the period include a $1,300,000 credit for a non cash charge associated with share based compensation versus the $293,000 credit for the comparable period in 2024. Operating loss for the period was $17,800,000 versus a loss of $16,600,000 for the first half of fiscal year twenty twenty four.

[Nick Pointon, CFO at Arqit Quantum]

The variance in operating losses, an operating loss between the periods, primarily reflects lower revenue and an increase in administrative expenses for the period. For the period, loss before tax from continuing operations was $17,200,000 For the first half of fiscal year twenty twenty four, loss before tax from continuing operations was $16,100,000 The variance between periods is primarily due to lower revenue, increased administrative expenses, lower finance income offset by lower finance costs. As of thirty one March twenty twenty five, the company had cash and cash equivalents to hand of $24,800,000 And with that, I turn the call back to Andy.

[Andy Leaver, CEO at Arqit Quantum]

Thank you, Nick. I want to thank you for joining us today. My final comment is that we believe momentum is building for ARCHET. Market awareness of the need for quantum safe encryption is growing. Awareness of our product is growing as well.

[Andy Leaver, CEO at Arqit Quantum]

Partners are selling ARKET enabled solutions to their customers. Leading technology players are actively integrating our encryption software into applications to address market needs. The breadth and depth of discussions with additional potential partners is significant. All indicators are pointing in a positive direction for the company. Thank you again.

[Andy Leaver, CEO at Arqit Quantum]

And with that, I hand the call back over to the operator for Q and A.

[Operator]

Thank you. We will now begin the question and answer session. Session. first question comes from Scott Buck with H. C. Wainwright. Your line is open.

[Scott Buck, Managing Director & Senior Technology Analyst at H.C. Wainwright & Co., LLC]

Hi, good morning, guys. Thanks for taking my questions. Andy, there's a lot to digest there. The deals that closed at or near the end of the fiscal period, are they currently generating revenue today? And are these under multi year contracts for the most part or shorter periods?

[Andy Leaver, CEO at Arqit Quantum]

Hey, Scott. Appreciate the question. Thank you. Let me tackle that. So as we mentioned in the earnings release, the contract with the tier one network operators for three years, the initial size of the contract minimizes its risk.

[Andy Leaver, CEO at Arqit Quantum]

We expect the contract will grow materially as it signs up end users. We noted that it's already engaged with three significant end users, as I mentioned, and we expect to revisit the contract relatively soon. As for the DOD contract, it's a one year contract. Successful completion of the contract could lead to Unity.

[Scott Buck, Managing Director & Senior Technology Analyst at H.C. Wainwright & Co., LLC]

Great. And then I was curious on the sales team. It sounds like you guys have been doing some hiring there. What type of folks are you hiring? What industries are they coming from?

[Scott Buck, Managing Director & Senior Technology Analyst at H.C. Wainwright & Co., LLC]

And generally, how long does it take to get a new sales hire up to speed? Hello?

[Nick Pointon, CFO at Arqit Quantum]

This is Nick Pointon. It's I feared Andy may have lost reception. Just bear with us, please, Scott.

[Scott Buck, Managing Director & Senior Technology Analyst at H.C. Wainwright & Co., LLC]

Of course, Nick. Thank you.

[Nick Pointon, CFO at Arqit Quantum]

I see he's trying to get back in. He's back on, I think. Andy, are you there now?

[Andy Leaver, CEO at Arqit Quantum]

I am. I'm not even sure where I cut off. Apologies. My line dropped.

[Nick Pointon, CFO at Arqit Quantum]

It dropped at the end of last Scott's first question your answer to your first question. So Scott, will you please repeat the second question regarding the salespeople?

[Scott Buck, Managing Director & Senior Technology Analyst at H.C. Wainwright & Co., LLC]

Yeah. Yeah. Of course. Andy, it sounds like you guys have been active in in hiring on the sales side. I'm curious, what types of people have you been hiring?

[Scott Buck, Managing Director & Senior Technology Analyst at H.C. Wainwright & Co., LLC]

What industries are they coming from? And generally, how long does it take to get a new hire up to speed?

[Andy Leaver, CEO at Arqit Quantum]

Yeah. Hey. Great question, Scott. So if you think to what I just talked to in the release there is the early salespeople are the people that have really proved out a lot of these use cases. So I said that, for instance, the telco operator was a fourteen month cycle from start to end.

[Andy Leaver, CEO at Arqit Quantum]

So these people have really had to roll their sleeves up and get to work in figuring a lot of things out. Now that the majority of that is done, we can hire more commercially available salespeople because we have a blueprint in the sales book for that. So the first of type operators for for each space in each region and each vertical, They, of course, they need to figure out the the use cases and everything around compliance, how it fits in the infrastructure, etcetera, etcetera. Behind that then, we're starting to hire people that know that vertical very well so they can talk the language So for instance, in The US now, we're looking at filling roles around telco, and we'll be looking to fill roles more around defense.

[Andy Leaver, CEO at Arqit Quantum]

So these are people that are well versed and deep operators in those sectors. But we have a number of open roles which we're actively recruiting for within our operating plan to start capitalizing all that inbound that we saw at the RSA show recently in San Francisco. Hopefully, helps.

[Scott Buck, Managing Director & Senior Technology Analyst at H.C. Wainwright & Co., LLC]

Yeah. Abs absolutely. So as you guys start stacking these contract wins, you know, it sounds like the sales cycle is is starting to compress a little bit. How much of that do you attribute to your ability to sell versus kind of broader market interest and maybe even a little bit of fear of missing out by some of the folks that are not as quick to move?

[Andy Leaver, CEO at Arqit Quantum]

Yeah. So I I think for us, we we talked about earlier a a kind of pay as you grow model. And I think it really aligns the the two of us as in the the customer. But then it also allows them in this b to b to b model to align with their end customer, particularly in telco. So we spent a lot of time trying to remove the friction in the sales model, such that incremental contracts, particularly around consumption of our services.

[Andy Leaver, CEO at Arqit Quantum]

So you think about things such as endpoints of the number of keys generated, make it as easy as possible for them to incrementally sign up and absorb incremental capacity under the existing contracts. And again, for renewal upsizing, we make it as easy as possible. So once we're in the estate of an existing customer, broaden our footprint, we think we're making it as easy as possible. And we have technical familiarity with the customer's architecture, so implementation becomes more of a blueprint. And again, you know, I want to stress we're a software company, another professional services company.

[Andy Leaver, CEO at Arqit Quantum]

So we want want to make that implementation as smooth and as simple as possible. And we really believe we are probably one of the best in the market at that in terms of just embedding our tech into into more complex customer environments. As for new customers being able to point to existing customers and having precedent implementation blueprints makes the initial sale easier than in the past. As I just talked about for the for the new salespeople, that should compress sales cycles substantially from the from the first to type fourteen month in telco, for instance. That being said, any new customer will still want to feel comfortable that they're whether adopting new technology particularly into their critical infrastructure that the new technology is properly tested before it's adopted.

[Andy Leaver, CEO at Arqit Quantum]

So all that said, we do believe the bigger picture is we're gonna see shorter sales cycles as we as we move forward, which means it speeds up that that adoption and rev rec cycle. And I I talked to I called it a course of breaks, and I kind of think of subscription revenue recognition that way as you layer it on the course of bricks, especially if they're multi year agreements, because then you've got the out years and that deferred revenue to take as well. So it just builds and builds and builds rather than the older world, which we've moved away from, which is these very big one off perpetual licenses, which had a lot of friction commercially and had a lot of friction to adopt and were just causing us slowdown in the market. So we believe this new model is really to the benefit of us and the customers.

[Scott Buck, Managing Director & Senior Technology Analyst at H.C. Wainwright & Co., LLC]

No, that makes a lot of sense. And your Intel partnership on confidential computing, how should investors think about how that that can be monetized?

[Andy Leaver, CEO at Arqit Quantum]

So we we're working on a number of different use cases, and I mentioned some of them in the in the earlier part of the call, which is really for us, if you think about any large enterprise and even in federal defense as well, they have substantial investments in cloud infrastructure. And now they have substantial investments in AI as well. And we feel with a common thread and common wrapper that enables them to take advantage of those existing investments, but basically protect themselves from the emerging quantum threat. Intel is a fabulous partner for us, and I cannot speak more highly of the work we're doing with them. We feel like we've really clicked into a great rhythm with them.

[Andy Leaver, CEO at Arqit Quantum]

And we have a very common view of kind of this emerging confidential compute space. They believe it's going to be a big additive for their business. And we believe that as well. But now being able to adopt the new public cloud infrastructures, multi cloud infrastructures, AI, LLNs, etcetera, and not have to worry about that threat of quantum is a big weight off their shoulders. And again, we make this as easy to consume as possible and running on chip in the TDX enclave, which Intel have provided in the new generation of devices means that we're exactly where it's needed as well.

[Andy Leaver, CEO at Arqit Quantum]

And you can see the footprint of our technology is small enough to fit in there, but powerful enough to protect against all of those different variables I talked about. So we're thrilled with the work we do with Intel.

[Scott Buck, Managing Director & Senior Technology Analyst at H.C. Wainwright & Co., LLC]

That's perfect. And then last one, I can squeeze in. Nick, given the momentum in the business on the sales side, do you expect any increase in OpEx, you know, to support some of these new contracts you signed towards the end of the period? Just want to understand what the operating leverage could look like here as the business scales.

[Nick Pointon, CFO at Arqit Quantum]

Okay. So, I think the main thing is to mention is that, you know, our headcount is down materially from a year ago. And we kind of repositioned our employee base to increase the focus on customer fulfillment as we have been winning customer contracts and expect more to come. We are currently sufficiently staffed for the near term. We do have a handful of budgeted open positions, as Andy mentioned earlier, that we are looking to fill, but we have no plans for meaningful growth in headcount at this time.

[Nick Pointon, CFO at Arqit Quantum]

In terms of other operating costs, we do not see significant growth over the near term. Our trailing monthly cash burn has been around $2.2.0.2 to $2,400,000 ish. And we expect that to stay around that level, for the meaningful amount of time. Does that give you what you need?

[Scott Buck, Managing Director & Senior Technology Analyst at H.C. Wainwright & Co., LLC]

Yeah. No. It's very helpful.

[Nick Pointon, CFO at Arqit Quantum]

Okay.

[Scott Buck, Managing Director & Senior Technology Analyst at H.C. Wainwright & Co., LLC]

Well, I appreciate the added color, guys. Thank you very much, and and congrats on all the momentum in the business.

[Andy Leaver, CEO at Arqit Quantum]

Thank you, Scott. Appreciate the questions.

[Operator]

Thank you. We have no further questions at this time. Now I'll turn the call back over to Andy Lieber for closing remarks. Andy?

[Andy Leaver, CEO at Arqit Quantum]

Thank you. Again, thank you for joining us today. We look forward to speaking with you again following the close of our first half fiscal twenty twenty five results. That said, we will find additional forums in which to engage with you in the coming year in an effort to be more timely in providing updates to investors. We appreciate your interest in the company. Thank you again.

[Operator]

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect. Speakers, please stand by for your debrief.

Participants

Executives

• Andy Leaver, CEO
• Nick Pointon, CFO

Analysts

• Scott Buck, Managing Director & Senior Technology Analyst at H.C. Wainwright & Co., LLC