Executive Summary

Q3 revenue of $0.384M, up sharply sequentially from $0.061M in Q2 and up 280% YoY, with 33% gross margin as the company began recognizing cloud revenue from Dirac-3 and increased R&D services/custom hardware deliveries .
GAAP net income was $2.4M (basic EPS $0.01) versus $(5.7)M a year ago, driven by a $9.2M non‑cash gain on derivative liability revaluation and $3.5M interest income; operating loss remained sizable at $(10.4)M as OpEx scaled to $10.5M .
Balance sheet transformed by equity financings: cash $352M and investments $461M at 9/30; total assets $898M, liabilities $20M, equity $878M; subsequent $750M raise in Oct reinforces >$1.5B liquidity to fund foundry scale-up, product roadmap, and potential M&A .
Against S&P Global consensus, Q3 beat on EPS and revenue: EPS est. −$0.06 vs actual $0.01; revenue est. $0.117M vs actual $0.384M; only three estimates, highlighting low coverage and potential volatility in expectations (see Estimates Context) .

What Went Well and What Went Wrong

What Went Well
- Liquidity and capital access: Raised $500M in Sept and $750M post‑quarter; ended Q3 with $352M cash and $461M investments, positioning QUBT to fund Fab 2 planning, hiring, and product programs .
- Commercial traction milestones: First U.S. commercial sale of quantum cybersecurity to a top‑5 U.S. bank; recognition of Dirac‑3 cloud revenue; continued NASA work applying Dirac‑3 to LiDAR noise removal .
- Non‑cash items supported profitability: $9.2M derivative liability gain and $3.5M interest income swung GAAP bottom line positive for the quarter .
- Quote: “Revenues increased 280% year-over-year… including a recent sale to a top 5 U.S. bank.” – Dr. Yuping Huang, Interim CEO .
What Went Wrong
- Core operating performance still deeply negative: Operating loss $(10.4)M on $0.384M revenue; OpEx nearly doubled YoY to $10.5M as the company scales R&D, engineering, and manufacturing .
- Gross margin volatility at low revenue base (33% vs 43% in Q2, 9% YoY), with management cautioning variability given custom work and few active contracts .
- Limited disclosure of forward financial guidance; no explicit revenue/margin outlook provided, which may challenge near‑term modeling; growth depends on manufacturing execution, customer adoption, and potential M&A timelines .

Financial Results

P&L and Margins (chronological: YoY → prior qtr → current)

Metric	Q3 2024	Q2 2025	Q3 2025
Revenue ($USD)	$101,000	$61,000	$384,000
Gross Margin (%)	9%	43%	33%
R&D Expense ($USD)	$2,244,000	$5,975,000	$4,509,000
Sales & Marketing ($USD)	$363,000	$680,000	$787,000
G&A ($USD)	$2,840,000	$3,542,000	$5,234,000
Total OpEx ($USD)	$5,447,000	$10,197,000	$10,530,000
Operating Income ($USD)	$(5,438,000)	$(10,171,000)	$(10,404,000)
Interest & Other Income ($USD)	$70,000	$1,843,000	$3,544,000
Derivative Liability Fair Value (gain+/loss−)	—	$(28,096,000)	$9,246,000
Net Income ($USD)	$(5,675,000)	$(36,482,000)	$2,382,000
Basic EPS ($)	$(0.06)	$(0.26)	$0.01

Notes: Sequential revenue increased from $0.061M to $0.384M as Dirac‑3 cloud revenue commenced and services/custom hardware scaled . GAAP profitability in Q3 was driven by non‑operating items (derivative revaluation and interest income) .

Balance Sheet (prior qtr → current)

Metric	Q2 2025 (6/30)	Q3 2025 (9/30)
Cash & Equivalents ($USD)	$348,758,000	$352,436,000
Short‑Term Investments ($USD)	—	$203,136,000
Long‑Term Investments ($USD)	—	$257,473,000
Total Assets ($USD)	$426,084,000	$898,170,000
Total Liabilities ($USD)	$30,102,000	$20,320,000
Derivative Liability ($USD)	$24,594,000	$14,743,000
Shareholders’ Equity ($USD)	$395,982,000	$877,850,000

Actual vs. Estimates (Q3 2025)

Metric	S&P Global Consensus	Actual Reported
Revenue ($USD)	$116,670*	$384,000
EPS (Primary EPS)	−$0.0567*	$0.01 (GAAP basic)

Values with asterisk (*) retrieved from S&P Global.

Segment/KPI notes: No formal segment reporting. Revenue drivers cited: R&D services, custom hardware, and Dirac‑3 cloud access; margin variability expected at current scale . Foundry (Fab 1) operational with 10+ service orders; planning for Fab 2 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Formal financial guidance (revenue/margins)	FY/Q4 2025	None disclosed	None disclosed	Maintained lack of formal guidance
Capex – Fab 1 high‑speed test equipment	2025–2026	N/A	~ $2M planned for measurement gear	New operational detail
Share count (basic shares outstanding)	Q4 2025 exit	N/A	~224M outstanding post‑Oct offering	New detail
Financing outlook	Near term	N/A	“Not expecting to do another financing”	Qualitative color

Management provided operational details but no numeric revenue/margin/tax/OpEx guidance.

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1–Q2 2025)	Current Period (Q3 2025)	Trend
Capital and liquidity	Q1 raised $93.6M; Q2 net $188M; cash $349M	Q3: cash $352M, investments $461M; $500M Sept raise; $750M in Oct	Stronger balance sheet
Product commercialization (Dirac‑3, reservoir computing)	Q1: Dirac‑3 collaboration in biomed; Q2: EmuCore sold to global OEM	Started recognizing Dirac‑3 cloud revenue; unveiling Neurawave PCIe photonic reservoir computer	Expanding products/use cases
Foundry scale‑up (TFLN)	Q1: Fab completed; 5 initial orders; Q2: Fab operational	Fab 1 fulfilling 10+ service orders; planning Fab 2 for higher volume	Advancing toward volume
Government programs (NASA)	Q1–Q2: NASA Langley subcontract (~$406k)	Continued progress on NASA LiDAR noise removal using Dirac‑3	Ongoing execution
Cybersecurity/comms	Q2: first U.S. commercial order announced (top‑5 bank)	Bank order reiterated; discussions on photonic IC shrink of comms stack	Early traction
Partnerships/ecosystem	—	Strategic collaboration with POET on 400G/lane TFLN modulators; target H2’26	Broadening ecosystem
M&A roadmap	Q2: evaluating opportunities	Active evaluation; no announcements	Monitoring/opportunistic
International reach	Q2: Delft vibrometer; Korea entangled photon source	Q3: references to TU Delft, Singapore, Korea users	Building globally

Management Commentary

Strategic focus: “The challenge ahead is one of engineering and manufacturing execution… move from prototype and small-batch manufacturing towards volume production… planning for Fab 2” – Dr. Yuping Huang .
Capital deployment: “We now have substantial resources to implement our TFLN fabrication and quantum machine development initiatives… evaluating acquisition opportunities” – CFO Chris Roberts .
Commercial validation: “The first U.S. commercial sale of its quantum cybersecurity solutions… purchase order from a top 5 U.S. bank” – Press release .
Product roadmap: “Upgrading our current Dirac‑3… building the next version… increased speed by orders of magnitude… roadmap to gate-based machines” – Dr. Huang .

Q&A Highlights

Foundry capex and capacity: Fab 1 largely built out; plan ~$2M for high‑speed test equipment; Fab 2 scoped to support both internal quantum systems and external TFLN demand targeting hundreds‑to‑millions chips/year .
Share count modeling: ~224M shares outstanding post‑Oct offering; 250M authorized; options/warrants outstanding but timing uncertain .
Cybersecurity demand: Management sees rising urgency given advances in quantum threat models; advocates quantum‑secured internet compatible with existing fiber .
M&A: Pursuing targets to add customers/revenue and fill roadmap gaps; no specifics disclosed .
Partnerships: POET collaboration validates Fab 1’s role in advanced TFLN prototyping ahead of Fab 2 scaling .

Estimates Context

Coverage is thin (3 estimates). Q3 consensus: Revenue $0.117M*, EPS −$0.0567*; Actuals: Revenue $0.384M and GAAP basic EPS $0.01, resulting in headline beats on both lines .
Given non‑operating drivers (derivative liability revaluation, interest income), we expect models to adjust OpEx run‑rate higher and incorporate higher interest income while treating the derivative mark‑to‑market as non‑core .