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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Arqit Quantum Inc | NASDAQ:ARQQ | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.0125 | -3.34% | 0.3612 | 0.30 | 0.53 | 0.39 | 0.3615 | 0.3776 | 376,295 | 05:00:05 |
Recent Operational Highlights
Arqit intends to launch further applications for specific uses cases in the near term. Arqit’s QuantumCloud™ PaaS product is also generally available for license by systems integrators and developers to incorporate into their own applications and use cases.
Management Commentary
The first half of fiscal year 2023 reflects the pivot that we made at the end of 2022. We believe that early evidence suggests that an all-software tech stack and a go-to-market strategy of integrating with major global technology vendors is the best path to success.
The planned monetization of our satellite division in addition to the recent cost cutting initiative we have undertaken has resulted in a leaner operation, focussed on customer needs with a more nimble orientation.
The launch and positive reception by our initial and prospective customers of our QuantumCloud™ PaaS offering through channel partnerships and the TradeSecure™ and NetworkSecure™ applications gives us confidence that our products have a bright future. The pipeline of business through our channel partnerships for our new applications is encouraging, and we expect them to provide the underpinning of a business which is capable of developing efficient scaling. It is clear from the statements of the White House and others that an upgrade to encryption is now regarded as essential, and Arqit is confident that it has a product which is fit for purpose and is easy to consume. We have given ourselves extra runway to demonstrate our ability to scale. As we now execute a more focussed business plan, we will also prepare for the next phase of growth by continuing to look at best practice governance arrangements of the company, which will include the intention during the next year to separate the role of Chairman and Chief Executive.
Commented David Williams, Arqit Founder, Chairman and Chief Executive Officer, “It has been a tough year in technology markets generally, and Arqit has made some significant pivots. But the reception we have seen for our channel partner offerings and applications convince us that we have the right products at the right moment to solve the evident problems with legacy encryption which the world is finally addressing.”
First Half of Fiscal Year 2023 Financial Highlights
The following is a summary of Arqit’s operating results for the six month period ended 31 March 2023. Comparison is made, where applicable, to the comparable period ended 31 March 2022.
Conference Call Information
Arqit will host a conference call at 11:00 a.m. ET / 8:00 a.m. PT on 17 May 2023 with the Company’s Founder, Chairman and CEO, David Williams, and CFO, Nick Pointon. A live webcast of the call will be available on the “News & Events” page of the Company’s website at ir.arqit.uk. To access the call by phone, please go to this link (registration link) and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time. A replay of the webcast will also be available for a limited time at ir.arqit.uk.
1 Administrative expenses are equivalent to operating expenses.
2 Adjusted loss before tax is a non-IFRS measure. For a discussion of this measure, how its calculated and a reconciliation to the most comparable measure calculated in accordance with IFRS, please see “Use of Non-IFRS Financial Measures” below.
About Arqit
Arqit supplies a unique quantum safe encryption Platform-as-a-Service which makes the communications links or data at rest of any networked device or cloud machine secure against current and future forms of attack – even from a quantum computer. Arqit’s product, QuantumCloud™, enables any device to download a lightweight software agent, which can create encryption keys in partnership with any number of other devices. The keys are computationally secure, optionally one-time use and zero trust. QuantumCloud™ can create limitless volumes of keys in limitless group sizes and can regulate the secure entrance and exit of a device in a group. The addressable market for QuantumCloud™ is every connected device. Arqit was recently awarded the Innovation in Cyber award at the UK National Cyber Awards and Cyber Security Software Company of the Year Award at the UK Cyber Security Awards. www.arqit.uk
Media relations enquiries:Arqit: contactus@arqit.ukGateway: arqit@gatewayir.com
Investor relations enquiries:Arqit: investorrelations@arqit.ukGateway: arqit@gatewayir.com
Use of Non-IFRS Financial Measures
Arqit presents adjusted loss before tax, which is a financial measure not calculated in accordance with IFRS. Although Arqit's management uses this measure as an aid in monitoring Arqit's on-going financial performance, investors should consider adjusted loss before tax in addition to, and not as a substitute for, or superior to, financial performance measures prepared in accordance with IFRS. Adjusted loss before tax is defined as loss before tax excluding change in fair value of warrants, which is non-cash. There are limitations associated with the use of non-IFRS financial measures, including that such measures may not be comparable to similarly titled measures used by other companies due to potential differences among calculation methodologies. There can be no assurance whether (i) items excluded from the non-IFRS financial measures will occur in the future, or (ii) there will be cash costs associated with items excluded from the non-IFRS financial measures. Arqit compensates for these limitations by using adjusted loss before tax as a supplement to IFRS loss before tax and by providing the reconciliation for adjusted loss before tax to IFRS loss before tax, as the most comparable IFRS financial measure.
IFRS and Non-IFRS loss before tax
Arqit presents its consolidated statement of comprehensive income according to IFRS and in line with SEC guidance. Consequently, the changes in warrant values are included within that statement in arriving at loss before tax. The changes in warrant values are non-cash. After this adjustment is made to Arqit’s IFRS loss before tax of $21.8 million, Arqit’s non-IFRS adjusted loss before tax is $34.7 million, as shown in the reconciliation table below.
Six month period ended 31 March 2023$’000 | ||||
Loss before tax on an IFRS basis | $ | (21,836 | ) | |
Change in fair value of warrants | (12,910 | ) | ||
Adjusted loss before tax | $ | (34,746 | ) |
The change in fair value of warrants arises as IFRS requires our outstanding warrants to be carried at fair value within liabilities with the change in value from one reporting date to the next being reflected against profit or loss in the period. It is non-cash and will cease when the warrants are exercised, are redeemed, or expire.
Other Accounting Information
As of 31 March 2023, we had $34.3 million of total liabilities, $0.6 million of which related to our outstanding warrants, which are classified as liabilities rather than equity according to IFRS and SEC guidance. The warrant liability amount reflected in our consolidated statement of financial position is calculated as the fair value of the warrants as of 31 March 2023. Our liabilities other than warrant liabilities were $33.7 million, and we had total assets of $114.5 million including cash of $41.5 million.
Caution About Forward-Looking Statements
This communication includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. These forward-looking statements are based on Arqit’s expectations and beliefs concerning future events and involve risks and uncertainties that may cause actual results to differ materially from current expectations. These factors are difficult to predict accurately and may be beyond Arqit’s control. Forward-looking statements in this communication or elsewhere speak only as of the date made. New uncertainties and risks arise from time to time, and it is impossible for Arqit to predict these events or how they may affect it. Except as required by law, Arqit does not have any duty to, and does not intend to, update or revise the forward-looking statements in this communication or elsewhere after the date this communication is issued. In light of these risks and uncertainties, investors should keep in mind that results, events or developments discussed in any forward-looking statement made in this communication may not occur. Uncertainties and risk factors that could affect Arqit’s future performance and cause results to differ from the forward-looking statements in this release include, but are not limited to: (i) the outcome of any legal proceedings that may be instituted against the Arqit related to the business combination, (ii) the ability to maintain the listing of Arqit’s securities on a national securities exchange, (iii) changes in the competitive and regulated industries in which Arqit operates, variations in operating performance across competitors and changes in laws and regulations affecting Arqit’s business, (iv) the ability to implement business plans, forecasts, and other expectations, and identify and realise additional opportunities, (v) the potential inability of Arqit to convert its pipeline into contracts or orders in backlog into revenue, (vi) the potential inability of Arqit to successfully deliver its operational technology, (vii) the risk of interruption or failure of Arqit’s information technology and communications system, (viii) the enforceability of Arqit’s intellectual property, and (ix) other risks and uncertainties set forth in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in Arqit’s annual report on Form 20-F (the “Form 20-F”), filed with the U.S. Securities and Exchange Commission (the “SEC”) on 14 December 2022 and in subsequent filings with the SEC. While the list of factors discussed above and in the Form 20-F and other SEC filings are considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realisation of forward-looking statements.
Arqit Quantum Inc. | |||||||
Condensed Consolidated Statement of Comprehensive Income | |||||||
For the period ended 31 March 2023 | |||||||
Unaudited six month | Unaudited six month | ||||||
period ended | period ended | ||||||
31 March 2023 | 31 March 2022 | ||||||
$'000 | $'000 | ||||||
Revenue | 19 | 5,293 | |||||
Other operating income | 2,570 | 6,959 | |||||
Administrative expenses | (24,963) | (26,600) | |||||
Impairment loss on trade receivables and contract assets | (12,203) | — | |||||
Operating loss | (34,577) | (14,348) | |||||
Change in fair value of warrants | 12,910 | 72,464 | |||||
Finance costs | (169) | (69) | |||||
Finance income | — | — | |||||
(Loss)/ profit before tax | (21,836) | 58,047 | |||||
Income tax | — | — | |||||
(Loss)/ profit for the financial year attributable to equity holders | (21,836) | 58,047 | |||||
Other comprehensive (loss)/income : | |||||||
Items that may be reclassified to profit or loss | |||||||
Currency translation differences | (2,503) | 258 | |||||
Total comprehensive (loss)/ profit for the year attributable to equity holders | (24,339) | 58,305 | |||||
Earnings per ordinary share from continuing operations attributable to equity holders | |||||||
Basic earnings per share | (0.17409) | 0.48212 | |||||
Diluted earnings per share | (0.17409) | 0.47999 |
Arqit Quantum Inc. | |||||||
Condensed Consolidated Statement of Financial Position | |||||||
As at 31 March 2022 | |||||||
Unaudited | Audited | ||||||
31 March | 30 September | ||||||
2023 | 2022 | ||||||
$'000 | $'000 | ||||||
ASSETS | |||||||
Non-current assets | |||||||
Property, plant and equipment | 2,435 | 2,206 | |||||
Right of use asset | 7,106 | 6,139 | |||||
Intangible assets | 57,221 | 40,291 | |||||
Fixed asset investments | 31 | 28 | |||||
Trade and other receivables | 1,918 | 18,565 | |||||
Total non-current assets | 68,711 | 67,229 | |||||
Current assets | |||||||
Trade and other receivables | 4,252 | 7,677 | |||||
Cash and cash equivalents | 41,504 | 48,966 | |||||
Total current assets | 45,756 | 56,643 | |||||
Total assets | 114,467 | 123,872 | |||||
LIABILITIES | |||||||
Current liabilities | |||||||
Trade and other payables | 19,203 | 22,655 | |||||
Lease liabilities | 1,580 | 1,154 | |||||
Total current liabilities | 20,783 | 23,809 | |||||
Non-current liabilities | |||||||
Trade and other payables | 5,293 | 4,183 | |||||
Lease liabilities | 7,595 | 6,681 | |||||
Warrants liability | 633 | 10,644 | |||||
Total non-current liabilities | 13,521 | 21,508 | |||||
Total liabilities | 34,304 | 45,317 | |||||
Net assets | 80,163 | 78,555 | |||||
EQUITY | |||||||
Share capital | 13 | 12 | |||||
Share premium | 109,195 | 92,306 | |||||
Other reserves | 166,804 | 166,804 | |||||
Foreign currency translation reserve | 854 | 3,357 | |||||
Share-based payment reserve | 32,272 | 23,216 | |||||
Retained earnings | (228,975) | (207,140) | |||||
Total Equity | 80,163 | 78,555 |
Arqit Quantum Inc. | ||||||||
Condensed Consolidated Statement of Cash Flows | ||||||||
For the period ended 31 March 2023 | ||||||||
Unaudited six month period ended | Unaudited six month period ended | |||||||
31 March 2023 | 31 March 2022 | |||||||
$'000 | $'000 | |||||||
Cash flows from operating activities | ||||||||
Cash used in operations | (8,077) | (13,221) | ||||||
Net cash used in operating activities | (8,077) | (13,221) | ||||||
Cash flows from investing activities | ||||||||
Capital expenditure on property, plant and equipment | (207) | (609) | ||||||
Capital expenditure on intangibles | (16,930) | (12,883) | ||||||
Net cash used in investing activities | (17,137) | (13,492) | ||||||
Cash flows from financing activities | ||||||||
Shares issued on exercise of warrants | — | 21,279 | ||||||
Proceeds from issue of shares | 18,509 | — | ||||||
Payments of lease liabilities | (558) | (205) | ||||||
Payments of interest portion of lease liabilities | (99) | (73) | ||||||
Proceeds from government grants | 508 | — | ||||||
Net cash generated from financing activities | 18,360 | 21,001 | ||||||
Net decrease in cash and cash equivalents | (6,854) | (5,712) | ||||||
Cash and cash equivalents at beginning of period | 48,966 | 86,966 | ||||||
Foreign exchange on cash and cash equivalents | (608) | 904 | ||||||
Cash and cash equivalents at end of period | 41,504 | 82,158 |
1 Year Arqit Quantum Chart |
1 Month Arqit Quantum Chart |
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