Arqit Quantum (NASDAQ:ARQQ) reported higher first-half fiscal 2026 revenue and said it is seeing increased commercial activity as governments, telecom operators and defense-related customers evaluate post-quantum cybersecurity needs.
Chief Executive Officer Andy Leaver told investors that the market has shifted from debating whether organizations need to upgrade cryptographic security to determining how quickly they can do so. He pointed to public comments and research from Google, Cloudflare and IonQ that, in his view, have accelerated the urgency around migration to post-quantum cryptography.
Revenue rises from a low base
Chief Financial Officer Nick Pointon said Arqit generated $623,000 in revenue for the first half of fiscal 2026, compared with $67,000 in the same period of fiscal 2025. He said the increase reflected revenue from a Middle East customer contract that began late in the first half of fiscal 2025, as well as activity under 11 contracts during the latest period, compared with six in the prior-year first half.
Pointon said the latest period represented Arqit’s second consecutive reporting period of revenue growth. “With a small data set, it gives credence to Andy’s comments when we reported in fiscal year 2025 results that our revenue had troughed as of March 2025, and our expectation is for growth going forward,” he said.
Administrative expenses rose to GBP 33.9 million for the six months ended March 31, 2026, from GBP 20.2 million a year earlier. Pointon said the increase was driven by higher employee-related costs and share-based compensation associated with higher headcount, partially offset by lower property costs and lower foreign exchange expenses. The latest period included a GBP 12.7 million non-cash share-based compensation charge, compared with GBP 872,000 in the comparable 2025 period.
Arqit reported an operating loss of GBP 33.7 million, compared with a GBP 20 million loss in the first half of fiscal 2025. Loss before tax from continuing operations was GBP 33.1 million, versus GBP 19.5 million a year earlier.
Management says quantum security timelines are compressing
Leaver framed Arqit’s market opportunity around what he described as a shortening timeline for the arrival of cryptographically relevant quantum computers. He cited Google’s March 23 advice that cryptographic systems migrate by 2029, following research suggesting quantum computers could break elliptic curve cryptography with fewer resources than previously projected. He also cited Cloudflare’s April 7 migration guidance and research from Oratomic concerning the resources needed to execute Shor’s algorithm at cryptographically relevant scale.
Leaver also referred to IonQ CEO Niccolo de Masi’s comments on IonQ’s May 6 earnings call, in which de Masi said IonQ expected to achieve the logical qubit count required to challenge RSA 2048 encryption in the 2028 to 2029 window.
Leaver said the urgency is increased by the risk of “Harvest Now, Decrypt Later” attacks, in which encrypted data stolen today could be decrypted later using quantum computers. He also said migration requires analysis, planning and execution across an organization’s data and communications architecture.
Encryption Intelligence and NetworkSecure gain attention
Arqit said its product set includes tools to assess existing cryptographic risk and software-based post-quantum encryption offerings designed to comply with NIST and NSA standards. Leaver highlighted the company’s Encryption Intelligence risk analysis tool, which he said gives organizations visibility into encryption technologies used across a network and identifies weak points, including vulnerabilities to quantum attacks.
Leaver said Arqit acquired the Encryption Intelligence product in 2025 and announced commercial rollouts in January. A marketing campaign targeting about 450 organizations is underway, and he said engagement has been strong. Arqit executed its first Encryption Intelligence contract supporting post-quantum cryptography migration planning on May 18 and signed its first partnership agreement for the product with a European specialist cybersecurity provider on May 19.
Leaver said Arqit expects additional contract wins during the balance of the fiscal year based on its sales pipeline.
The company also said its NetworkSecure product is gaining traction. Leaver said Sparkle, a tier 1 Italian network operator, licensed Arqit’s product to create a quantum-secure network-as-a-service offering and has seen take-up, including with a financial institution. Sparkle recently announced commercial availability of its Quantum Safe Interconnect, secured by Arqit, across 20 Equinix International Business Exchange data centers in Europe, the Americas and Asia, according to Leaver.
Telecom, defense and partnerships remain focus areas
Leaver said large telecommunications networks represent a significant opportunity for Arqit’s encryption solutions. He said the company is in late-stage dialogue and demonstrations with several operators, including one in the U.S.
Arqit also teamed with Colt Technology Services to deliver a quantum-secure wide-area network for A&K Travel Group, which owns travel brands including Abercrombie & Kent, Crystal and Cox & Kings. Leaver said the project is intended to protect A&K customer data and communications from future quantum risk, including Harvest Now, Decrypt Later threats.
In government and defense, Leaver said Arqit is seeing “tangible progress,” though he noted that contracts in the sector take time to win. He said a renewal and upsizing of Arqit’s largest U.S. defense-related contract is imminent. He also said a partner serving the aerospace and defense industry renewed and upsized its contract with Arqit by almost 90% on May 1.
Arqit also reported several go-to-market partnerships during and shortly after the first half, including:
- A strategic collaboration with 6WIND for quantum-safe encrypted VPN business services.
- A strategic collaboration with RAD for joint quantum-safe encryption solutions for telecom operators.
- Selection to join the Tomorrow Street portfolio, a joint venture between Vodafone Group and Technoport.
- A partnership with a European specialist cybersecurity provider for the Encryption Intelligence product.
Cash position and CFO transition
Pointon said Arqit had cash and cash equivalents of GBP 28.9 million as of March 31. He said the company’s cash balance was GBP 35.9 million as of May 20. Rob Russell, who is assuming the CFO role, said the current cash position represented more than 14 months of runway. Management also said in-the-money warrants expiring in September 2026 are expected to provide approximately GBP 13.5 million of additional liquidity if exercised.
Pointon said he will step down as CFO at the end of the month. Russell began full-time as CFO on May 1 after a two-month part-time transition period. Pointon described Russell as a finance executive with experience in investment banking, private equity and SaaS scale-ups, most recently as Chief Financial and Operating Officer at VirtualStock.
Leaver thanked Pointon for his service and said the company expects to speak with investors again after the close of fiscal 2026.
About Arqit Quantum (NASDAQ:ARQQ)
Arqit Quantum Inc is a UK‐based cybersecurity company specializing in quantum-safe encryption solutions designed to protect sensitive data from current and emerging cyber threats. The company’s core technology leverages principles of quantum physics to generate and distribute encryption keys in a way that remains impervious to attacks, including those enabled by future quantum computers. Arqit’s platform is designed to integrate with existing IT infrastructures without requiring hardware upgrades, offering end‐to‐end data protection for enterprises, governments and critical infrastructure providers.
The company’s flagship QuantumCloud platform uses a patented key distribution architecture to deliver symmetrical keys to endpoints across distributed networks.
