Quantum Computing Inc. Reports First Quarter 2024 Financial Results

Rhea-AI Summary

Quantum Computing Inc. (QCi) (Nasdaq: QUBT) reported its preliminary, unaudited financial results for Q1 2024. Revenue was approximately $27,000 with a gross margin of 42%. Operating expenses decreased by 18% YoY to $6.4 million, and net loss reduced to $6.9 million from $8.5 million in Q1 2023. R&D expenses remained stable at $1.4 million. The company saw a decrease in selling, general, and administrative expenses by 25% YoY. Total assets increased to $83.1 million, cash reserves rose to $6.1 million, and total liabilities decreased to $3.8 million. As of March 31, 2024, QCi had a positive stockholders' equity of $79.3 million, an 8.2% increase from December 31, 2023.

Positive

• Revenue for Q1 2024 totaled $27,000 with a 42% gross margin.
• Operating expenses decreased by 18% YoY to $6.4 million.
• Net loss reduced to $6.9 million from $8.5 million in Q1 2023.
• Selling, general, and administrative expenses decreased by 25% YoY.
• Total assets increased to $83.1 million as of March 31, 2024.
• Cash and cash equivalents increased to $6.1 million.
• Total liabilities decreased to $3.8 million.
• Positive stockholders' equity of $79.3 million, an 8.2% increase from December 31, 2023.

Negative

• Revenue for Q1 2024 was only $27,000.
• Net loss of $6.9 million for Q1 2024.
• R&D expenses remained high at $1.4 million, showing no significant reduction.
• Financial results are preliminary and unaudited, subject to change.

Insights

Financial Analyst

The first quarter financial results of Quantum Computing Inc. (QCi) show a mixed bag of financial metrics that require careful consideration by investors. Starting with revenue, the company reported a modest income of $27,000 with a 42% gross margin. These figures are relatively low, signaling that while the company might have high margins, it is still in the early stages of revenue generation primarily from professional services rather than scalable products.

On the expense side, QCi's operating expenses decreased by 18% year-over-year to $6.4 million, which is a positive sign of cost management. Additionally, selling, general and administrative expenses saw a decrease of 25%. Despite these efficiency gains, net loss remains substantial at $6.9 million, although it's an improvement from the previous year's $8.5 million.

One bright spot is the increase in cash and cash equivalents to $6.1 million, up by $4 million from the end of 2023. This increase in liquidity is important for a tech company aiming to sustain R&D and cover operational costs. Another positive aspect is the decrease in total liabilities to $3.8 million, thus improving the company's financial health. Additionally, positive stockholders' equity has grown by 8.2% to $79.3 million, offering a stronger balance sheet.

Overall, while the financials show some improvements, the low revenue generation and ongoing losses raise concerns about future profitability. Investors should monitor subsequent quarters for revenue growth and continued cost management efforts.

Tech Expert

Quantum Computing Inc.'s progress in the field of quantum optics and nanophotonics can be groundbreaking for future technology developments. However, the financial results reveal a critical issue: the company's primary revenue is coming from professional services utilizing Dirac-series computers and other prototype design and configuration services. This indicates that QCi has not yet transitioned to a product-based revenue model, which is essential for scalability and long-term sustainability in the tech sector.

One significant point to note is the company's consistent spending on research and development (R&D), standing at $1.4 million for the quarter, suggesting a continued focus on innovation. The challenge will be converting these R&D efforts into commercially viable products that can generate substantial revenue.

The company’s technology, designed to operate at room temperature and low power, offers a significant advantage over competitors that need specialized environments. This could be a game-changer in sectors like cybersecurity, AI and high-performance computing. However, until these benefits are reflected in revenue growth, the market may remain skeptical.

Investors should keep an eye on the development and release of QCi's products, as well as partnerships that could help commercialize their technology.

HOBOKEN, N.J., June 11, 2024 /PRNewswire/ -- Quantum Computing Inc. ("QCi" or the "Company") (Nasdaq: QUBT), an innovative, quantum optics and nanophotonics technology company, today released in an effort to be transparent its preliminary, unaudited financial results for the three-month period ended March 31, 2024. QCi also announced that it has engaged BPM LLP as the Company's new independent registered public accounting firm. Additional details of the Company's financial results are included in our Current Report on Form 8-K filed with the Securities and Exchange Commission ("SEC") on June 11, 2024, which can be viewed on the investor relations section of QCi's website.     

First quarter 2024 financial highlights:

• First quarter 2024 revenues totaled approximately $27,000 (42% gross margin). Revenues to date have consisted primarily of professional services that utilize the Dirac-series computers and other prototype design and configuration services.
• First quarter 2024 operating expenses totaled $6.4 million, which is an 18% decrease compared to the first quarter of 2023.
• Research and development expenses for the quarter totaled $1.4 million, relatively consistent with the first quarter of 2023.
• Selling, general and administrative expenses decreased 25% compared to the first quarter of 2023.
• The Company reported a net loss of $6.9 million, or $(0.08) per basic share, compared to a net loss of $8.5 million, or $(0.14) per basic share, for the same period of the previous year. 
• As of March 31, 2024, the Company's gross tax net operating loss carryforwards were approximately $15.7 million.
• Total assets as of March 31, 2024, were $83.1 million, an increase of approximately $4.3 million compared to December 31, 2023. 
• As of March 31, 2024, cash and cash equivalents increased $4 million from December 31, 2023 to $6.1 million.
• Total liabilities as of March 31, 2024, were $3.8 million, a decrease of approximately $1.7 million compared to December 31, 2023. 
• As of March 31, 2024, the Company had positive stockholders' equity totaling $79.3 million, an increase of approximately 8.2% compared to December 31, 2023.

The financial information disclosed in this release and the accompanying Current Report on Form 8-K filed with the SEC on June 11, 2024 is preliminary and unreviewed. These estimated results are subject to change upon completion of the Company's quarter-end financial review process.

Quantum Computing Inc. (QCi) (Nasdaq: QUBT) is an innovative, integrated photonics company that provides accessible and affordable quantum machines to the world today. QCi products are designed to operate at room temperature and low power at an affordable cost. The Company's portfolio of core technology and products offer unique capabilities in the areas of high-performance computing, artificial intelligence, cybersecurity as well as remote sensing applications.

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SOURCE Quantum Computing Inc.

FAQ

What were Quantum Computing Inc.'s Q1 2024 revenues?

Quantum Computing Inc. reported Q1 2024 revenues of approximately $27,000 with a gross margin of 42%.

How did Quantum Computing Inc.'s operating expenses change in Q1 2024?

QCi's operating expenses for Q1 2024 were $6.4 million, an 18% decrease compared to Q1 2023.

What was Quantum Computing Inc.'s net loss in Q1 2024?

QCi reported a net loss of $6.9 million for Q1 2024, compared to a net loss of $8.5 million in Q1 2023.

What is the financial status of Quantum Computing Inc. as of March 31, 2024?

As of March 31, 2024, QCi had total assets of $83.1 million, cash reserves of $6.1 million, total liabilities of $3.8 million, and stockholders' equity of $79.3 million.

What changes occurred in Quantum Computing Inc.'s cash and liabilities in Q1 2024?

As of March 31, 2024, QCi's cash and cash equivalents increased to $6.1 million, while total liabilities decreased to $3.8 million.

How did Quantum Computing Inc.'s R&D expenses fare in Q1 2024?

QCi's R&D expenses for Q1 2024 remained relatively consistent with the previous year at $1.4 million.