Live: Quantum Computing (QUBT) Drops 3% After Announcing Q2 Earnings

Well, that was a very light Q&A session! Here’s the questions the company took in their call via S&P Capital IQ:

Troy Jensen Cantor Fitzgerald & Co., Research Division

Congrats on all the traction here. Maybe first off for Yuping. I guess I’d be curious, to me revenues aren’t really important. They won’t be for several years to meet the technical milestone. So could you just kind of lay out what are the 2 or 3 most important milestones that we need to see from you guys over the next 1 to 3 years?

Yuping Huang Chief Executive Officer

Thank you, Troy. Over the next 2 to 3 years, in fact, our focus would be to integrate our Quantum machines with our non-photonic chips. So that has been our technology road map and as you have seen that over the past 3 years, we have really pushed to testing and to demonstrate the Quantum machine using discrete optical components. And then in March of 2025 this year so we have finished our thin-film lithium niobate foundry and now that give us another platform that we will for us to translate our Quantum photonic technology that we have demonstrated with discrete optical components to on-chip. So over the next 2 years, we are going to use our [indiscernible] chips in our direct machine and use it to enhance the performance of our Quantum photonic reservoir system and also to use for our quantum sensing and in particular, the quantum photonic [ wider meter ]. So with the integration of nano-photonic chips, we can expect to significantly reduce size, weight, power and also the cost of our Quantum machines and we will also be able to boost the performance. And in the meanwhile, our foundry can not only support the further development of our quantum machines but also offer services to others. In fact, so we have received preorders and orders for our foundry services. So this is going to a pretty fun ramp-up journey for us over the next 2 years.

Troy Jensen Cantor Fitzgerald & Co., Research Division

Yes. Understood. Maybe a follow-up here for Chris. I’m just curious on OpEx. And obviously, you guys have a much larger balance sheet now, and is there any intentions to accelerate spending or do M&A? Or just kind of maybe give us some color on what you think kind of second half R&D and G&A expenses might look like?

Christopher Roberts Chief Financial Officer

Well, it’s a good question, Troy. We are certainly hiring additional people. You can see from the results we’ve announced that our labor costs have grown quite a bit since last year. We’re bringing on additional engineers and sales staff and moving to accelerate the development of our technology. We do not have anything announced relating to acquisitions but as we previously stated, looking at strategic opportunities is part of the plan, and we’re in the process of talking with bankers and looking for opportunities that will enable us to fill out our technology road map as well as accelerate revenue development — revenue generation, sorry.

Here’s QUBT CEO Yuping Huang on AI opportunities and other new customer wins. Transcription is via S&P Capital IQ:

“This quarter, we saw a new traction in our quantum AI portfolio. During the quarter, a major global automotive manufacturer purchase one of our [ mic ] reservoir computing systems which will be used to explore edge-based machine learning applications such as time series protection and image recognition.

This is an important proof point for real-world use of our reservoir ] computing platform. Subsequent to the quarter in July 2025, we announced a new commercial order from a top 5 U.S. bank, marking the first domestic commercial sale of our Quantum Cybersecurity Solution, underscoring recent demand for Quantum’s secure data protection. We also advanced our work with strategic government partners.

During the quarter, we were awarded a subcontract valued at over 400,000 to support NASA’s Langley Research Center. Under this contract, we are applying our Dirac-3 [ Quanta ] optimization machine to develop a quantum-based technology for removing solar noise from space-based LIDAR data. An issue that has historically limited NASA’s ability to block reliable data atmospheric observations.

This builds on our prior work with NASA and highlights the real-world value of our Quantum systems for scientific applications. Continue to be a significant partner to government institutions remains a key goal for us, and we continue to make progress subsequent to this quarter, announcing [indiscernible] [ equivalent ] contract from the U.S. Department of Commerce National Institute of Standards and Technology last week.”

Quantum shares are still down about 3%.

Revenue came in lighter than expected at $61,000 versus expectations of $100,000. However, with those numbers so small that miss shouldn’t matter too much. 

What might matter more is the company’s reported losses. The company’s press release isn’t hosted on their investor relations site (which, seems like a disservice to the company’s investors).

We have found it and are going through it in more detail.

One note: the company’s loss is mostly from the fair value of derivatives. Overall, operating expenses were $10.2 million. that’s slightly above Wall Street expectations at closer to $9.25 million, but isn’t overly concerning.

The company’s conference call starts at 4:30 and should be the factor that moves the stock the most tomorrow.

As a note, we will post notes from the conference call in this live blog. All you have to do is simply leave it open and new updates will post automatically. 

We still don’t have a press release on Quantum Computing’s Investor Relations site, which is unfortunate.

In particular we want to see more details on that second quarter loss.

Wall Street was expecting a GAAP loss of $9.2 million. If the company reported a loss of $36.5 million, what are the details?

Shares of Quantum are now down about 3.5% after their earnings release.

It looks like $61,000 in revenue last quarter with a net loss of $36.5 million.

We’re going to provide more analysis momentarily but that’s the flash number.

The market is almost closed and we’re waiting for Quantum Computing’s earnings. The stock is down about 3.9% in late trading. Many ‘momentum’ stocks fell today after new data showed wholesale inflation rose by .9% in July, far ahead of expectations.

Consensus Rating:

• 1 Buy
• 1 Hold
• 1 Underperform
  

Price Targets:

• High: $22.00
• Low: $15.00
• Average: $18.50
• Implied Upside: +13.3%