LONDON, May 22, 2025 (GLOBE NEWSWIRE) -- Arqit Quantum Inc. (Nasdaq: ARQQ) ("Arqit" or the "Company"), a global leader in quantum-safe encryption, announces financial results for the first half of fiscal year 2025.

   -- Consistent with management's preliminary assessment of the expected range 
      of revenue which was announced 4 April 2025, reported revenue for the 
      first half period ended 31 March 2025 was $67,000. 
 
   -- As previously announced, Arqit was awarded a multi-year enterprise 
      license contract in the EMEA region for a government end user, which was 
      signed prior to the end of the 2024 fiscal year. Revenue generation was 
      expected to commence early in the first half of fiscal year 2025. However, 
      due to end customer delay, revenue generation did not commence until late 
      March, adversely affecting revenue for the period. The original terms of 
      the contract remain in effect and represent a multi-year enterprise 
      license that is expected to result in seven figures in annual recurring 
      revenue in total. 
 
   -- Revenue for the first half of fiscal year 2025 was generated from 6 
      contracts. Two of the contracts which generated revenue during the period 
      are multi-year contracts representing annually recurring revenue. Both 
      contracts only commenced revenue generation immediately before the end of 
      the fiscal period. Generally, Arqit's go-to-market strategy is to sell 
      software licenses to leading network operators, technology vendors and 
      system integrators which in turn are sold to their end customers. Such a 
      strategy is commonly called a B-2-B-2-B business model. Arqit's initial 
      license sale is for a defined use of its Arqit SKA-PlatformTM (symmetric 
      key agreement encryption solution). Arqit expects initial licenses to 
      grow as licensees successfully sell quantum-safe cybersecurity solutions 
      enabled by Arqit to their end customers. 
 
   -- During the first half of fiscal year 2025, Arqit engaged in or completed 
      demonstration and test activity with 6 telecom network operators and 17 
      other commercial enterprises and government related parties. Such 
      activity is the initial step in the process toward potential licensing of 
      the Arqit SKA- PlatformTM solution. 
 
   -- For the six months ended 31 March 2025, Arqit's operating costs averaged 
      $2.4 million per month. 
 
   -- The Company ended the period with cash and cash equivalents of $24.8 
      million as of 31 March 2025. 

Recent Important Developments

At the end of or shortly after the first half of the 2025 fiscal period, important developments occurred which merit highlighting.

   -- On 28 March, Arqit signed a contract associated with Arqit's symmetric 
      key agreement software embedded into a solution sold to the U.S. 
      Department of Defense (DoD) for a funded program of record. The solution 
      is in partnership with a large IT vendor to the DoD and was sold through 
      one of Arqit's established government sales channels. More details 
      regarding the contract will be forthcoming. This is an important 
      milestone for the Company as the contract represents Arqit's first win 
      with the DoD. The U.S. Department of Defense represents a significant 
      market opportunity for Arqit. The Company believes that being compliant 
      with the U.S. National Security Agency's $(NSA)$ Commercial Solutions for 
      Classified (CSfC) program and now on a DoD program of record is 
      validating as Arqit pursues additional opportunities in this critical 
      target market. 
 
   -- On 31 March, the Company signed a contract to integrate Arqit's 
      cryptographic technology into the enterprise and government security 
      solutions of a large IT solutions provider. Arqit's partner will create a 
      sovereign capability securing edge, remote and deployed communications in 
      mission-critical environments. Through our partner, Arqit sees 
      opportunities for penetrating multiple vertical markets and geographies, 
      particularly European government and defence markets. 
 
   -- Arqit announced on 8 April that it had signed shortly before the close of 
      the fiscal period a three year contract with a Tier 1 network operator 
      that operates in 32 countries, providing secure digital infrastructure, 
      with a fibre backbone spanning over 600,000 kilometres. The Company's 
      quantum-safe Arqit NetworkSecure$(TM)$ technology will be deployed as part 
      of the telecom network operator's Network-as-a-Service (NaaS) suite which 
      is now available for order by enterprises and governments. The network 
      operator is already engaged with three significant end customers for the 
      service.The contract validates Arqit's focus on the telecom networking 
      sector as a key vertical market. It also provides a blueprint for the 10 
      telecom network operators with whom Arqit has been or is engaged in 
      demonstration and test activity over the past twelve months. While it 
      took approximately 12 months from initial engagement to commercialization 
      of this contact, Arqit expects subsequent timelines with prospective 
      telecom network operators to compress as a result of the experience. 
   -- On 28 April, Arqit announced that the benefits of its quantum-safe Arqit 
      NetworkSecureTM technology has been delivered to secure confidential 
      computing. In collaboration with Intel, Arqit NetworkSecureTM running 
      inside a Trusted Domain enclave created by Intel TDX brings the benefits 
      of quantum-safe symmetric key security to sensitive workloads at the chip 
      level. For more information regarding Arqit NetworkSecureTM running 
      inside a Trusted Domain created by Intel TDX please visit the following 
      link: 
      https://arqit.uk/resources/press-release/arqit-delivers-quantum-safe-protection-enhanced-by-confidential-computingSymmetric 
      key cryptography securing data within the enclave at the chip level 
      allows quantum-safe security between Intel TDXs. The architecture 
      provides advanced data sovereignty by design. This collaboration opens a 
      new opportunity for Arqit securing confidential computing which is a 
      significant market. Applications include: 
 
          -- Enterprise Edge & AI Workloads 
 
          -- Network Security for Telcos 
 
          -- Virtual Hardware Security Modules (HSMs) for Critical 
             Infrastructure 
 
          -- Secure Collaboration Across Domains 
   -- In collaboration with Equus Compute Solutions and Intel, on 29 April 
      Arqit announced the world's first quantum-safe CSfC-Compliant MACP 
      Architecture for Classified Mobile Communications secured by symmetric 
      key agreement. The companies have worked together to successfully develop, 
      demonstrate and validate a Mobile Access Capability Package (MACP) 
      architecture that is compliant with the NSA's Commercial Solutions for 
      Classified program and resistant to threats from Quantum computing. This 
      innovation introduces a quantum-secure, nested IPsec tunnelling 
      configuration using Arqit SKA-PlatformTM, strongSwan VPN, and the Intel 
      NetSec Accelerator Reference Design with Intel Xeon D processor and Intel 
      Ethernet Controller E810.The announced collaboration further demonstrates 
      Arqit's leadership in developing quantum-safe mobile solutions, building 
      upon Arqit's other announced innovations in secure mobile communications, 
      including Private 5G. Arqit's leadership in mobile communications 
      security innovation has been recognized with industry awards. The 
      collaboration highlights Arqit's compliance with the NSA's CSfC security 
      standards which is essential to address the U.S. National Security and 
      Defence markets. 
   -- The recent announced collaborations with Intel, plus a previously 
      announced collaboration regarding quantum-safe throughput on 4th Gen 
      Intel$(R)$ Xeon(R) Scalable processor-based servers, result in joint 
      efforts across secure mobile communications, confidential computing and 
      server technology. Arqit is working jointly on further development of 
      these integrated technologies and go-to-market strategies. 
 
   -- The Board of Directors approved the following changes to the composition 
      of the board, which were effective as of 20 May: Nick Pointon stepped 
      down from the board but will continue in his role as Chief Financial 
      Officer, Chief Executive Officer Andy Leaver was appointed to the board 
      as a director, and existing director Garth Ritchie was appointed as 
      Chairman of the Board. 
 
   -- As of 22 May, Arqit has signed license contracts for its Arqit 
      SKA-PlatformTM across several of its targeted vertical markets, 
      specifically telecom networks, governments and defence organizations. 
      These markets are key near and medium term opportunities for the Company. 
      The Company has visibility of additional contract opportunities that have 
      or are moving through the demonstration and test cycle. Arqit's contract 
      base includes customers in the United States, Europe and the Middle East. 

Management Commentary

In reporting fiscal year 2024 results, Arqit emphasized messages including increased market awareness of quantum computing and the threat it poses; the Company's focus on the most actionable revenue opportunities, particularly in telecom and defence vertical markets; alignment of internal processes and resources to meet customer fulfilment and control costs. The first half of fiscal year 2025 has seen the realization of these messages.

The pace of development of quantum computing is accelerating. Significant public and private capital has been invested in development of the technology and the result of that investment is manifesting itself. Since late 2024, leading technology firms such as Microsoft, Google and Amazon have, respectively, announced development of quantum computing chips with advanced computational power. Quantum computer developers such as Rigetti, D-wave and IBM are announcing continual increases in computational power and error correction of their respective computers. While timing of a quantum computer at scale is uncertain, there is no doubt about the resources and effort being put toward that end.

The threat which a quantum computer at scale poses to current cryptographic security is increasingly recognized. Arqit is currently experiencing high levels of inquiry about the Arqit SKA-Platform(TM) . Foot traffic at Arqit's stand at the RSA 2025 Conference in May, the world largest cybersecurity conference, was significant. Technology companies, network operators, enterprises and governments are understanding that Q Day is coming and that cybersecurity enhancements are required. The market is moving toward Arqit with increased pace.

Arqit is focused on pursuing the most actionable opportunities, both vertical markets and specific potential customers, to drive growth in revenue. Operating within the Company's finite resources, Arqit has made positive headway in converting demonstration and test engagements with telecom network operators and defence organizations into multi-year contracts, as evidenced by announcements of contracts with a Tier 1 telecom network operator and the U.S. DoD. The Company has multiple additional contract opportunities in these key vertical markets moving through the demonstration and test cycle. The company expect to convert more such opportunities to contracts in this fiscal year.

Beyond telecom networks and defence, other market opportunities include but are not limited to:

   -- Financial services -- security of financial institution infrastructure 
      and trading activity 
 
   -- Pharmaceutical industry -- security of valuable Intellectual property 
 
   -- Data Centres - confidential computing securing workloads and data across 
      multiple domains 

Arqit envisions the application of its symmetric key cryptographic solution across data in process, data in transit and data at rest. The Company has demonstrated capability to provide quantum-safe security for data in all three states. Arqit's goal is to have monetizable solutions addressing data in each of these states. However, it remains focused on converting actionable opportunities which will result in near term revenue growth.

The Company has realigned personnel to meet its current stage of development. Increases in customer fulfilment and support roles have occurred. Likewise, increasing the number of sales roles has been a hiring emphasis. Driving revenue is important but so too is the efficient fulfilment of executed contracts. Despite growth in personnel in these areas, overall headcount of 72 as of 31 March 2025 was below budgeted headcount of 83 employees. Likewise, monthly operating costs averaged $2.4 million, in line with budgeted costs. Prioritizing the utilization of resources and disciplined cost control remain key objectives of management.

Commenting, Andy Leaver, Chief Executive Officer said: "2025 has been designated by the United Nations as the "International Year of Quantum Science and Technology" in recognition of the role quantum mechanics has played and will play in society. We are seeing the impact, positive and potentially the threat, of quantum physics playing out in real time with the development of quantum computing. Q Day is coming and governments and enterprises need to be prepared to embrace the benefits of quantum computing and safeguard against the threat which it poses.

Arqit's symmetric key agreement cryptographic solution is increasingly seen as a leading cybersecurity antidote to the quantum threat. Important contract wins in the telecom and defence markets, and recent joint development with leading technology partners of innovative quantum-safe solutions for data networking, mobile communications and confidential computing demonstrate Arqit is at the forefront of radical cryptographic advancement.

We will continue to be focused on driving opportunities through our sales pipeline to grow revenue. The strength of our technology will lead our success, but prioritization, focus and cost control are key to driving value creation for all our stakeholders."

First Half of Fiscal Year 2025 Financial Highlights

The following is a summary of Arqit's operating results for the six month period ended 31 March 2025. Comparison is made, where applicable, to the comparable period ended 31 March 2024.

   -- Generated $67,000 in revenue for the first half of fiscal year 2025 as 
      compared to $119,000 in revenue for the comparable period in 2024. 
      Revenue for the first half of the fiscal period was adversely affected 
      due to end customer delay in commencing activity under a previously 
      announced multi-year contract in the EMEA region. Revenue generation did 
      not commence until late March. The variance between periods was also due 
      to less revenue being recognized under customer contracts as Arqit 
      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. 
 
   -- Revenue from Arqit SKA-PlatformTM platform as a service and Arqit 
      NetworkSecureTM products totalled $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 2024, Arqit 
      SKA-PlatformTM platform as a service and Arqit NetworkSecureTM contract 
      revenue totalled $65,000 and professional services and maintenance in 
      support of contract activity was $54,000. 
 
   -- Arqit SKA-PlatformTM revenue for the period was generated from contracts 
      with 6 customers. For the six months ended 31 March 2024, revenue was 
      generated from contracts with 9 customers. 
 
          -- Four contracts represented a license for Arqit SKA-PlatformTM as a 
             service. Two such contracts represent multi-year recurring revenue 
             contracts, specifically Arqit's contract in EMEA and its contract 
             with a tier 1 telecom network operator. Arqit only began 
             recognizing revenue under both contracts immediately before the 
             close of the first half period. 
 
          -- Two contracts were for Arqit NetworkSecureTM licenses. 
 
          -- Two contracts for Arqit SKA-PlatformTM as a service have 
             professional services and maintenance contracts attached to them. 
 
   -- Administrative expenses1 for the first half of fiscal year 2025 were $18 
      million versus $16.8 million for the comparable period in fiscal year 
      2024. The variance between periods was due to lower headcount resulting 
      in lower staff expenses and share based compensation and a reduction in 
      property costs as a result of the termination of Arqit's previous office 
      lease arrangement being more than offset by unfavourable changes in 
      foreign exchange. Arqit's headcount as of 31 March 2025 was 72 employees 
      as compared to 125 as of 31 March 2024. Administrative expense for the 
      period includes a $1.3 million credit for a non-cash charge associated 
      with share based compensation versus a $293,000 credit for the comparable 
      period in 2024. 
 
   -- Operating loss for the period was $17.8 million versus a loss of $16.6 
      million for the first half of fiscal year 2024. The variance in operating 
      loss between periods primarily reflects lower revenue and an increase in 
      administration expenses for the period. 
 
   -- Loss before tax from continuing operations for the period was $17.2 
      million. For the first half of fiscal year 2024, loss before tax from 
      continuing operations was $16.1 million. The variance between periods is 
      primarily due to lower revenue, increased administrative expenses, lower 
      finance income partially offset by lower finance costs. 
 
   -- As of 31 March 2025, the Company had cash and cash equivalents of $24.8 
      million. 
 
   -- During the period, 658,321 restricted share units were granted under 
      Arqit's equity incentive plan. A total of 1,065,640 restricted share 
      units and 319,757 options, have been granted to employees, officers and 
      directors under the plan up to 31 March 2025. 
 
   -- In January 2025, Arqit established an at-the-market equity offering 
      program (the "ATM Program") pursuant to which it may issue and sell 
      ordinary shares with an aggregate offering amount of up to $75.0 million. 
      Arqit issued 1,141,687 shares under the ATM Program during the first half 
      of fiscal year 2025. 

Conference Call

Arqit will host a conference call at 11:00 a.m. ET / 8:00 a.m. PT on 22 May, 2025 with the Company's CEO, Andy Leaver, 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.

About Arqit

Arqit Quantum Inc. (Nasdaq: ARQQ, ARQQW) supplies a unique symmetric key agreement encryption software service which makes the communications links of any networked device, cloud machine or data at rest secure against both current and future forms of attack on encryption -- even from a quantum computer. Compatible with NSA CSfC Components and meeting the demands of NSA CSfC Symmetric Key Management Requirements Annexe 1.2. and RFC 8784, the Arqit SKA-Platform(TM) , uses a lightweight software agent that allows end point devices to create encryption keys locally in partnership with any number of other devices. The keys are computationally secure and facilitate Zero Trust Network Access. It can create limitless volumes of keys with any group size and refresh rate and can regulate the secure entrance and exit of a device in a group. The agent is lightweight and will thus run on the smallest of end point devices. The product sits within a growing portfolio of granted patents. It also works in a standards compliant manner which does not oblige customers to make a disruptive rip and replace of their technology. In September 2024, Arqit was named as an IDC Innovator for Post-Quantum Cryptography, 2024. Arqit is winner of two GSMA Global Mobile Awards, The Best Mobile Security Solution and The CTO Choice Award for Outstanding Mobile Technology, at Mobile World Congress 2024, recognised for groundbreaking innovation at the 2023 Institution of Engineering and Technology Awards and winner of the National Cyber Awards' Cyber Defence Product of the Year 2024 and Innovation in Cyber Award 2022, as well as the Cyber Security Awards' Cyber Security Software Company of the Year Award 2022. Arqit is ISO 27001 Standard certified. www.arqit.uk

Media relations enquiries:

Arqit: pr@arqit.uk

Investor relations enquiries:

Arqit: investorrelations@arqit.uk

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 Arqit, (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 successfully deliver its operational technology, (vi) the risk of interruption or failure of Arqit's information technology and communications system, (vii) the enforceability of Arqit's intellectual property, (viii) market and other conditions, 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 5 December 2024 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.

________________________

(1) Administrative expenses are equivalent to operating expenses.

(END) Dow Jones Newswires

May 22, 2025 08:11 ET (12:11 GMT)