Quantum Computing Q1 Earnings Call Highlights

Key Points

• Revenue surged to $3.7 million in Q1 from just $39,000 a year earlier, largely because the recently completed acquisitions of Luminar Semiconductor and NuCrypt began contributing to results. Excluding those deals, revenue was still modest at $204,000.
• Expenses jumped sharply as the company expanded headcount and incurred about $6 million in M&A-related costs, leading to a $4.1 million net loss versus a profit in the prior-year quarter. Despite that, Quantum Computing ended the period with about $1.4 billion in cash and investments and a $16 million backlog.
• Management is focused on scaling manufacturing and commercialization, with Fab 1 already generating early revenue and Fab 2 under evaluation for higher-volume production. The company also highlighted the Dirac-3 deployment with Quantum Corridor and continued work toward next-generation quantum photonics and gate-based systems.

Quantum Computing NASDAQ: QUBT reported a sharp year-over-year increase in first-quarter revenue as recent acquisitions began contributing to results, while management outlined plans to expand manufacturing capabilities and advance its quantum photonics product roadmap.

On the company’s first-quarter 2026 shareholder update call, Chief Executive Officer and Chairman Dr. Yuping Huang said Quantum Computing made “meaningful progress” during the quarter, including the completion of two acquisitions: Luminar Semiconductor, Inc., referred to on the call as LSI, and NuCrypt, LLC.

Acquisitions Expand Photonics and Quantum Communications Capabilities

Huang described the LSI acquisition as a significant step in Quantum Computing’s plan to build a vertically integrated photonics and quantum technology platform. He said LSI adds capabilities in lasers, detectors, advanced packaging and testing, along with an established photonics customer base and broader research, development and manufacturing capacity.

LSI includes three subsidiaries: Freedom Photonics, EM4 and Optogration. Huang said Freedom Photonics brings semiconductor laser technology and approximately 25 issued and pending patents. EM4 operates a Class 10,000 certified humidity-controlled clean room facility and supplies several U.S. government programs as well as European defense and space markets. Optogration specializes in chip manufacturing, device assembly, testing and low-volume component production.

Quantum Computing also completed its acquisition of NuCrypt during the quarter. Huang said NuCrypt’s patent portfolio covers quantum optics, RF photonics and photonic signal processing, including systems that can generate, measure and distribute entangled photons over fiber optic cables. He said organizations including NASA, the U.S. Army Research Lab and major research universities have used NuCrypt’s technology.

In response to an analyst question about integration, Huang said LSI’s capabilities are being used in several initiatives to advance Quantum Computing’s quantum device and systems development. He added that NuCrypt’s quantum communications systems are complementary to Quantum Computing’s existing approach and help create “a complete toolbox” for customers.

Chief Financial Officer Chris Roberts said he does not expect major direct cost savings from eliminating redundancies, noting that the acquired companies operated with lean back-office teams. However, he said the larger organization, now close to 200 people, should benefit from scale in areas such as employee benefits and insurance, and from combined business development opportunities.

First-Quarter Revenue Rises, Expenses Increase

Roberts said first-quarter revenue totaled $3.7 million, compared with $39,000 in the prior-year quarter. He said the increase was driven primarily by the LSI acquisition in early February and, to a lesser extent, NuCrypt, which was acquired in early March.

Excluding contributions from LSI and NuCrypt, Quantum Computing generated $204,000 in revenue during the quarter, primarily from foundry order deliveries and work on a NASA research and development subcontract.

Operating expenses rose to $19.8 million from $8.3 million in the same quarter last year. Roberts said the increase reflected a substantial increase in staff, including administrative, technician, engineering and scientific personnel, as well as higher research and development, product development, and sales and marketing expenses.

Sales and marketing expenses were $1.6 million, up from $700,000 a year earlier, due to employee compensation, lead generation, trade show participation, advertising and other selling costs. General and administrative expenses increased to $11.3 million from $4.6 million, primarily due to M&A transaction expenses tied to the NuCrypt and LSI deals. Roberts later said those M&A-related costs were close to $6 million in the quarter.

The company reported a net loss of $4.1 million, or $0.02 per share, compared with net income of $17 million, or $0.13 per share, in the first quarter of 2025. Roberts said the prior-year profit was mainly due to a $23.6 million non-cash gain related to the mark-to-market of the company’s derivative liability connected to warrants issued in its 2022 merger with QPhoton.

Quantum Computing ended the quarter with cash equivalents and investments of $1.4 billion, compared with $1.5 billion at the end of 2025. Interest income increased to $13.5 million from $1.7 million in the prior-year period. Roberts said total assets and stockholders’ equity were each approximately $1.6 billion as of March 31, and the company’s contract backlog was $16 million.

Fab 1 Generates Early Revenue as Fab 2 Planning Continues

Huang said Quantum Computing’s thin-film chip R&D and manufacturing facility in Tempe, Arizona, known as Fab 1, has been ramping small-batch manufacturing and has begun generating early revenue. He emphasized that Fab 1 is primarily intended as a research and development facility.

Roberts said foundry-related sales were a little more than $120,000 in the quarter, representing a four- to five-fold increase from the fourth quarter of 2025. He said the contribution from Fab 1 remains “several orders of magnitude” below the revenue contribution from Luminar and is expected to remain considerably smaller, though management expects it to grow as the company improves its processing of advanced circuit designs.

Huang said Fab 1 is intended to support innovation and chip production validation, helping the company develop know-how that can later be transferred to a larger Fab 2 facility. He said Quantum Computing is assessing options for Fab 2, which is intended to support higher-volume production and long-term manufacturing capacity.

Technology Roadmap and Commercial Deployment

Huang highlighted a partnership with Quantum Corridor, which placed a Quantum Computing Dirac-3 quantum optimization machine on Quantum Corridor’s network. He said the installation is intended to provide secure, on-demand Dirac-3 access for institutions and commercial customers on the network, and described it as the first data center installation of a Dirac-3 machine and the first such installation in a commercial data center environment.

During the question-and-answer session, Huang said the next version of the Dirac machine is in internal testing and that the company hopes to put it in front of early users after completing final steps.

On gate-based quantum computing, Huang said Quantum Computing continues to work on engineering designs and photonic integrated circuits. He said the company has not yet started building prototypes. Huang described the remaining challenge as an engineering hurdle involving the quality factor of micro-ring resonators. He said the company has reached about 2 million and needs to consistently exceed 10 million to support scalable photon-photon interaction gates.

Roberts said gross margins were low in the quarter because of underutilization at both Fab 1 and Luminar as production volumes remained below levels needed to absorb costs. He said margins could return to the 20% to 30% range as volume improves, but he did not provide a timeline.

Looking ahead, Huang said the company is focused on investing in engineering, research and production, converting commercial and government engagements into recurring revenue, strengthening fabrication capabilities and pursuing organic and inorganic growth opportunities.

About Quantum Computing NASDAQ: QUBT

Quantum Computing Inc NASDAQ: QUBT is a provider of quantum computing and quantum-inspired algorithm solutions, headquartered in the United States with research and development operations in Europe. Originally incorporated as Unigrid Software in 2019, the company rebranded in 2021 to reflect its strategic focus on commercializing emerging quantum technologies for enterprise and government customers.

The company's flagship product, Qatalyst, is a quantum-inspired optimization platform that applies advanced heuristic solvers to address complex combinatorial problems in logistics, supply chain management, finance and other data-intensive fields.

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