Quantum Computing Inc. (QUBT)·Q1 2024 Earnings Summary

Executive Summary

• Q1 2024 results were preliminary and unaudited; revenue was $27,325 with 42% gross margin, operating expenses were $6.44M, and net loss narrowed to $6.91M (EPS $(0.08)), while BPM LLP was appointed as the new auditor and the company plans to file the 10‑Q after completion of the 2023 audit .
• Liquidity improved: cash increased to $6.10M and working capital swung to a $4.33M surplus; however management disclosed substantial doubt about going concern absent additional financing and continued to utilize the ATM equity program .
• Revenue declined sharply versus prior quarter and YoY given a services-only mix and variability in contract size/effort; management emphasized swings in gross margin due to lack of scaled, distributed revenue channels .
• Compliance and governance were notable headlines: delayed Q1 10‑Q filing led to a Nasdaq non‑compliance notice; BPM was engaged following the SEC’s order against the former auditor .
• Commercial momentum points included an underwater LiDAR prototype sale to Johns Hopkins ($200,000) and the appointment of Dr. Javad Shabani to the Board, supporting the nanophotonic chips roadmap .

What Went Well and What Went Wrong

What Went Well

• Operating discipline: OpEx fell 9% YoY to $6.44M; net loss improved 11% YoY; SG&A decreased 25% YoY; R&D was roughly flat .
• Liquidity/working capital: Cash rose to $6.10M; working capital improved by $5.77M versus year‑end, driven by ATM proceeds and debt repayment .
• Strategic talent and commercialization: “We are truly honored to have Dr. Shabani join the Board… [his expertise] will provide strong support for our nanophotonic chips development using thin film lithium niobate (TFLN)” – CEO Dr. William McGann . On LiDAR: “We are thrilled to receive this order… delivery of our new LiDAR‑based remote sensing system to Johns Hopkins researchers” – CEO Dr. McGann .
• Technology roadmap confidence: “We anticipate that our core technologies will enable us to develop and produce multiple generations of quantum machines… at room temperature and low power” .

What Went Wrong

• Top‑line pressure: Q1 revenue fell to $27K from $50K in Q3 2023 and $112K in Q2 2023; services‑only mix and contract variability drove a 77% YoY decline .
• Margin compression and variability: Gross margin declined to 42% (from 53% in Q3 and 54% in Q2); management noted “lack of a scaled and distributed base of revenue generation… can result in large swings in gross margin” .
• Going concern and compliance risk: Management disclosed substantial doubt about going concern without new financing; delayed Q1 10‑Q prompted Nasdaq non‑compliance notice; change of auditor followed SEC sanctions on the prior auditor .

Financial Results

Summary versus prior quarters

Revenue composition

KPIs and balance indicators

Guidance Changes

Earnings Call Themes & Trends

(Note: No Q1 2024 earnings call transcript was available in our document set.)

Management Commentary

• Strategy and differentiation: “Quantum Computing Inc. is… utilizing non‑linear quantum optics… products are designed to operate at room temperature and use low power… [we] expect these systems to deliver performance advantages over classical computational machines” .
• Commercial approach: “In addition to cloud‑based access… we offer on premises installation… rack‑mountable… no need for special cooling, shielding, or power considerations… provides a substantial competitive edge” .
• Margin variability: “Our lack of a scaled and distributed base of revenue generation by product and sales channel can result in large swings in gross margin between reporting periods” .
• Liquidity stance: “Additional financing will be required… and our ability to continue as a going concern is dependent upon obtaining additional capital and financing” .
• Governance update: “Effective June 6, 2024, the Audit Committee… appointed BPM LLP as the… auditor… [to] re‑audit 2022 and 2023 and audit 2024” .

Q&A Highlights

No Q1 2024 earnings call transcript was found; key clarifications from filings:

• The company furnished unaudited interim financials via 8‑K due to auditor transition, cautioning investors not to place undue reliance on unaudited information .
• Filing plan: Q1 10‑Q will be filed after BPM completes the 2023 audit .
• Liquidity actions: Continued ATM issuance and debt repayments; cash at $6.10M; working capital improved to $4.33M .

Estimates Context

• S&P Global Wall Street consensus EPS and revenue estimates for Q1 2024 were unavailable at the time of retrieval; therefore, a comparison to consensus could not be provided. If/when available, we will benchmark actual revenue ($27,325) and EPS ($(0.08)) against consensus for recalibration of expectations .
• Given the micro‑revenue base and unaudited status, expect limited sell‑side coverage and potential estimate volatility.

Key Takeaways for Investors

• Liquidity improved quarter‑over‑quarter, but the going concern disclosure and reliance on external financing (ATM) remain central risks; monitor BPM audit completion, Q1 10‑Q filing, and the company’s compliance plan submitted to Nasdaq .
• Revenue trajectory is constrained by a services‑only mix and contract variability; scaling product sales (EQC subscriptions, vibrometer, LiDAR, QRNG) is critical to reduce margin volatility and broaden gross profit contribution .
• Headline sensitivity persists (auditor change, Nasdaq notice); near‑term trading likely reacts to filing progress and any additional commercialization milestones or government orders .
• Strategic assets (TFLN chip foundry buildout, integrated photonics at room temperature) and board talent (Dr. Shabani) support the medium‑term thesis of differentiated quantum hardware and sensing solutions .
• Watch cash burn and dilution: track ATM activity, operating cash flow, and any non‑dilutive funding (DOE Title 17, CHIPS Act) the company may secure .
• Catalysts: Q1 10‑Q filing, additional product orders (LiDAR/vibrometer), federal contract awards via QI Solutions, and updates on the Tempe foundry commissioning .