Earnings Call Insights: Quantum Computing Inc. (QUBT) Q3 2025
Management View
- Yuping Huang, CEO, President, Chief Quantum Officer & Chairman, described the third quarter as a pivotal period marked by a strengthened balance sheet, a growing portfolio of commercial relationships, and a disciplined scaling strategy. He stated, “To date, in 2025, we have raised over $1.5 billion in capital, and we now have the resources to execute thoughtfully on our long-term vision, putting quantum technology into the hands of people.”
- The company raised $500 million in the third quarter and subsequently $750 million, positioning itself for investments in engineering, manufacturing, and sales. Huang emphasized, “Our long-term goal is to move from prototype and small batch manufacturing towards volume production.”
- Key commercial developments included revenue from the NASA LiDAR initiative using the DIRAC-3 quantum optimization machine and a transaction with a major U.S. financial institution validating QCi’s quantum AI and security platforms. The Tempe, Arizona Fab 1 foundry advanced process qualification, while early-stage planning for Fab 2 began, targeting higher volume manufacturing.
- The company increased hiring to support expansion and joined several industry consortia to raise its profile. Huang noted, “We are already in the early stage of planning for Fab 2, which we expect to begin developing over the next 3 years.”
- Christopher Roberts, CFO & General Counsel, reported, “Revenue during our third quarter totaled approximately $384,000 compared to $101,000 in the same period last year. The increase in revenue was primarily due to increases in the number of size and level of effort on research and development services contracts and custom hardware contracts.”
- Roberts added, “We ended the third quarter with cash and cash equivalents of $352 million and investments of $460 million on our balance sheet at the end of the quarter. After the end of the third quarter, we also closed on an additional $750 million financing in October.”
Outlook
- The company outlined a current 3-year roadmap focused on refining processes, scaling small batch production, and expanding team and facilities to position for industry-scale output. Management emphasized, “Over the next 3 years, our road map priority is small-scale, high-value manufacturing as we refine processes, demonstrate performance across customer applications and established supply chain and design partnerships.”
- No explicit guidance figures or analyst estimate comparisons were provided.
Financial Results
- Quantum Computing Inc. reported revenue of $384,000 for Q3 2025 and a gross margin of 33%. Cash and cash equivalents totaled $352 million, with investments of $460 million at quarter end. Operating expenses for the quarter were $10.5 million, reflecting growth in personnel and scaling efforts.
- The company recorded net income of $2.4 million for the quarter, or $0.01 per share, attributed to a $9.2 million gain from the mark-to-market of a derivative liability and $3.5 million in interest income. Total assets reached $898 million, and total liabilities were $20 million, down $26 million from year-end 2024.
- Stockholders’ equity rose to $878 million at the end of the quarter.
Q&A
- Maxwell Michaelis, Lake Street Capital Markets: Asked for detail on the POET Technologies partnership and other similar pipeline opportunities. Huang responded that the collaboration leverages thin-film lithium niobate for next-generation high-speed transceiver technology, highlighting industry recognition and plans to explore additional telecom and datacom applications.
- Michaelis inquired about broader use cases for the quantum security solution in the financial sector. Huang explained ongoing discussions with firms in wireless, internet, and aerospace sectors about integrating quantum communication technology into photonic integrated chips, targeting long-term quantum internet applications.
- Michaelis asked about M&A strategy. Roberts said, “We are looking actively for acquisition candidates and evaluating them as they come up…we’re looking at M&A as a way of doing 2 things. One is to acquire customers and revenue and product lines that can be moved forward and migrated forward with our technologies. And we’re also looking to fill in some key aspects of our own technology road map.”
- Troy Jensen, Cantor Fitzgerald: Asked about remaining CapEx for Fab 1 and Fab 2. Huang stated Fab 1 is fully operational with plans for an additional $2 million in high-speed testing equipment. Fab 2 is scoped to support both QCi’s needs and external demand, with a goal to produce hundreds of millions of chips per year.
- Jensen asked for share count projections. Roberts confirmed 224 million shares outstanding for Q4, with some potential increase depending on option exercises.
- Jensen requested stats on QPU performance and near-term opportunity focus. Huang discussed upgrades to the DIRAC-3 system, progress on a new architecture, and sales in quantum sensing, communication, AI, and foundry services.
- John McPeake, Rosenblatt Securities, questioned quantum security pipeline growth amid advances in Shor’s algorithm. Huang stressed the urgency of quantum-secured internet and QCi’s compatibility with existing fiber infrastructure.
- McPeake also asked about DIRAC-3 optimization market trends. Huang identified three commercialization hurdles: customer awareness, integration with existing systems, and lowering entry barriers through user-friendly, compatible, and affordable devices.
- Edward Woo, Ascendiant Capital, asked about international opportunities. Huang cited sales to TU Delft in Europe, partnerships in South Korea, and users in Singapore.
Sentiment Analysis
- Analysts posed detailed, forward-looking questions, with a neutral to slightly positive tone, expressing interest in partnerships, pipeline expansion, and international opportunities.
- Management maintained a confident and constructive tone throughout, emphasizing operational progress and strategic clarity. Huang stated, “The quantum era is unfolding faster than most predicted, and our team is determined to ensure QCi remains at the center of transformation.”
- Compared to the previous quarter, both management and analysts appeared more focused on scaling, commercialization, and strategic partnerships, with increased confidence reflected in management’s responses.
Quarter-over-Quarter Comparison
- Guidance language evolved from highlighting technology integration and initial commercial wins in Q2 to a sharper focus in Q3 on scaling manufacturing, expanding foundry operations, and advancing strategic partnerships (e.g., POET Technologies).
- Key metrics improved, with revenue rising from $61,000 in Q2 to $384,000 in Q3, and a move from a net loss of $36 million in Q2 to net income of $2.4 million in Q3, largely due to one-time gains and increased capital.
- Operating expenses increased in line with expansion plans. The tone of management shifted from cautious optimism to greater confidence in scaling and execution.
- Analysts’ questions shifted from technical milestones and OpEx to commercialization, M&A, and global opportunities.
Risks and Concerns
- Management noted that gross margin remains variable due to the small number of active contracts and custom work.
- Roberts cautioned, “with a small number of active contracts, some of which involve custom design work, gross margin is likely to be variable from one period to the next.”
- Analyst concerns centered on the scalability of current technology, the pace of international expansion, and the pipeline for commercial quantum security solutions.
- No formal M&A announcements, with Roberts acknowledging ongoing market volatility and uncertainty in valuations.
Final Takeaway
Quantum Computing Inc. enters the final stretch of 2025 with a strengthened financial position and a clear roadmap focused on scaling manufacturing and deepening commercial partnerships. The company reported significant capital raises, operational progress at its foundry, and early traction with major commercial and government clients. Management emphasized its readiness to transition from prototype to volume production over the next three years, supported by a growing team and expanding industry presence, positioning QCi as a first-mover in practical, scalable quantum and photonic solutions.