Earnings Labs

Arqit Quantum Inc. (ARQQ)

Q4 2021 Earnings Call· Thu, Dec 16, 2021

$13.97

-4.18%

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Transcript

Operator

Operator

On today's call we will be referring to the Forum 20F and press release filed this morning that detail the Company's Fiscal Year End 2021 Results, which can be downloaded from the Company's website at arqit.uk. You'll also find the latest earnings presentation that supplements the information discussed on today's call. Please note that listeners that would like to ask a question in the Q&A session will need to dial-in to the call rather than joining through the webcast link. Finally, a recording of the call will be available on the Investor Section of the Company's website later today. Please note, that this webcast includes forward-looking statements, statements about the Company's beliefs and expectations containing words such as may, will, could, believe, expect, anticipate, and similar expressions are forward-looking statements and are based on assumptions and beliefs as of today. The company encourages you to review the Safe Harbor statements, risk factors and other disclaimers contained on this slide, and in today's press release, as well as in the Company's filings with the Securities and Exchange Commission, which identifies specific risk factors that may cause actual results or events to differ materially from those described in our forward-looking statements. The company does not undertake to publicly update or revise any forward-looking statements after this webcast. The company also notes that on this call, it will be discussing non-IFRS financial information. The company is providing that information as a supplement to information prepared in accordance with International Financial Reporting Standards or IFRS. You can find a reconciliation of these metrics to the Company's reported IFRS results in the reconciliation tables provided in today's earnings release and presentation. And now, I'll turn the call over to David Williams, the Company's Founder, Chairman and Chief Executive Officer. David?

David Williams

Analyst

Thank you very much. Hello, and welcome to Arqit Quantum Inc.'s debut fiscal year-end conference call. It was a transformational year for Arqit, and we're very excited to discuss our performance and notable achievements with you. Since our year-end of September coincided with the completion of our NASDAQ listing, and customer billings only began with commercial launch in the fourth quarter of the year, there is not a lot of new information; so I want to leave plenty of time for Q&A on business model and outlook. Before I begin, I would like to acknowledge a number of constituents who are instrumental in bringing our important product to the market. First, I'd like to acknowledge and thank the employees of Arqit, those that have been with us from the very beginning and recent joiners alike. We've assembled a team of hardworking and brilliant individuals who share our vision. Next, I'd like to acknowledge and thank Centricus Acquisition Corp., and the leaders of that organization, [indiscernible] for supporting the Arqit opportunity so strongly. Manfrevian [ph], in particular, has not only been an excellent and supportive long-term investor, but has also already put his considerable network in play, introducing many new potential customers, some of whom we've already converted into projects. He's also kindly agreed to serve as Vice Chairman and Senior Independent Director. On a spec [ph] journey, one could not hope for a better partner. Finally, I would like to thank the many public shareholders who've chosen to invest in Arqit. We're all striving to build a business that will deliver through operating successes, very significant value creation for all of Arqit stakeholders. Arqit's mission is to use our world's leading quantum encryption platform to keep safe the data of our governments, enterprises and citizens. The world needs stronger, simpler…

Nick Pointon

Analyst

Thank you, David. And good morning or afternoon, everyone. As David noted, we are pleased to hold our first call as a publicly traded company. Arqit commenced full commercialization of it's QuantumCloud product in September, shortly before the close of our 2021 fiscal year-end. As a result, our revenues for fiscal year 2021 were not material. Post fiscal year-end, billings have continued associated with our contracts and agreements. We ended the fiscal year with an adjusted net loss of $15.6 million. Importantly, as a result of the transaction with Centricus and our NASDAQ listing, we raised a net $96 million in capital and finished the fiscal year with cash on hand of $87 million. We believe our fiscal resources to be sufficient to meet our current business plan. We expect to have a more fulsome discussion regarding revenue generation and key performance indicators when we meet next to discuss our half year results. And now, I'll turn back to David for additional comments. David?

David Williams

Analyst

Thanks, Nick. Fiscal year 2022 will see the continuation of the trends which call for Arqit's quantum encryption solution. Specifically, continued weakness in PKI; one major attack was reported just this morning, increased cyber-attack surface and accelerating technological development of quantum computers. Arqit's target customers are increasingly aware of the threats and we're focused on driving home the message that our solution is the only end-to-end quantum safe products that can address the issues of today, and the significant threat of quantum computers at scale, and at low cost and low friction for our customers. We're already seeing the success of our focused marketing efforts in recent announcements of agreements post financial year-end, in smart cities with NEOM [ph], and in defense with Blue Bird [ph]. We're expecting to announce further contracts which have been awarded and contracted but not yet announced the coming weeks. The company will further refine it's product capability and delivery through the subsequent releases of QuantumCloud during 2022. We continue to see growth in identified and existing contract opportunities across all of our target markets, and we are seeing previously identified opportunities escalating through the pipeline very quickly. We're certainly observing that the sales cycle has compressed very greatly, and we're typically moving customers to contract much faster than we observed prior to the NASDAQ listing. We now have the certainty that our product is in a class of it's own, proven by some of the most important government and enterprise actors [ph] across our marketplace. We have a clear pathway to the near-term achievement of our expected forecasts as a result of the urgency that these customers are exhibiting to solve those problems. Again, thank you all for your support. We look forward to sharing additional news with you as we move forward. So, I now turn the call back to the operator to open the lines for questions. Operator?

Operator

Operator

David Williams

Analyst

Well, operator, I'm delighted if we've presented clearly. As I said at the outset, the financial year-end coincided with the NASDAQ listing, there's not too much to report in terms of financials. We will expect to be in a position to give much more detail on revenue composition and KPI breakdowns at our next report for these six months to March 2022, and I'm looking forward to that. So, if there are no questions for us to address, I'll thank everyone for attending. Wish everyone a very Merry Christmas, and hope that everyone keeps safe. We'll close the call here. Thank you.

Operator

Operator

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.