Insider Brief
- Quantum Computing Inc. reported third-quarter revenue of $101,000, up from $50,000 last year, but gross margins fell from 52% to 9%, largely due to costs associated with a customized quantum LiDAR prototype.
- The company reduced its net loss to $5.7 million and cut operating expenses by 18%, while total assets rose to $76.8 million, supported by recent financing efforts.
- QCi progressed in commissioning its Tempe-based optical chip foundry, extended research agreements with national labs, and secured a fifth NASA contract for quantum remote sensing technology.
Quantum Computing Inc. (Nasdaq: QUBT) reported third-quarter revenue of $101,000, an increase from $50,000 in the same period last year, according to a company statement on its 3Q 2024 financial report.
Despite the increase in revenue, gross margins fell from 52% to 9%. Usually, a drop in gross margins means the company is earning less profit on each dollar of revenue due to higher expenses. In this case, that drop may be tied to QCi’s ongoing projects due to ongoing project costs, particularly the development of a customized quantum LiDAR prototype under a contract with Johns Hopkins University.
Despite modest revenue growth, the company reported a reduced net loss of $5.7 million, or $(0.06) per share, compared to a $7.1 million loss, or $(0.10) per share, in the previous year, attributing the improvement to cost-cutting measures.
QCi’s operating expenses dropped 18% year-over-year to $5.4 million, reflecting strategic reductions in general and administrative costs, including cuts to employee and consultant expenses. The company’s total assets rose to $76.8 million, up from $74.4 million at the end of 2023. Cash reserves also grew slightly to $3.1 million, supported by $7 million raised through a secured convertible debt financing in the third quarter. In a secured convertible debt financing deal, the company can raise funds by issuing debt that investors can later convert into equity — shares — under certain conditions, typically at a future date or when the company’s valuation reaches a specified level.
In the statement, QCi’s Chief Executive Officer, Dr. William McGann, highlighted key advances, including the final commissioning stage of its proposed foundry in Tempe, Arizona. The foundry positions QCi to enter the high-performance optical chip market, he said. McGann also noted increased interest from potential partners and expressed optimism about upcoming high-performance photonics products.
McGann said in the statement: “Throughout the third quarter of 2024, we continued to make strategic progress across multiple fronts. Our ongoing development of our U.S.-based Thin Film Lithium Niobate (TFLN) foundry in Tempe remains on schedule and we are in the final stage of commissioning, marking a critical step toward scaling our capabilities and expanding into new markets. Our recent sales efforts, led by new leadership, have begun to translate into tangible results as we progress on securing offtake agreements for our chips and orders for our machines. We are excited by the interest we’ve seen from potential partners and customers, and we look forward to delivering on the promise of high-performance photonics technology in early 2025. I remain confident in our team’s ability to execute on our vision of delivering accessible, affordable, and scalable quantum solutions, and I am excited about the opportunities ahead.”
Operational and Strategic Highlights
QCi reported that it extended its Cooperative Research and Development Agreement (CRADA) with Los Alamos National Laboratory, allowing further development of the Dirac-3 quantum optimization machine for applications in energy management, social networks and telecommunications. In addition, QCi continued collaborations with Oak Ridge and Lawrence Berkeley National Laboratories, benchmarking its Dirac-3 platform’s effectiveness in handling complex computational problems.
Further progress came in QCi’s partnership with NASA, which awarded the company a fifth task order for developing spaceborne quantum remote sensing technology aimed at reducing costs in climate monitoring and improving data collection capabilities for NASA’s LiDAR missions.
The company also engaged with industry stakeholders at major events, such as Quantum World Congress 2024 and Quantum.Tech Europe, to showcase its Dirac-3 platform and promote its forthcoming foundry services, attracting government and commercial interest.
