Good day, ladies and gentlemen. Thank you for standing by. On today's call, we will be referring to the press release issued this morning that details the company's first half of fiscal year end 2023 results, which can be downloaded from the company's website at arqit.uk. At the end of the company's prepared remarks, there will be a question-and-answer period for selected equity research analyst. [Operator Instructions] Finally, a recording of the call will be available on the Investors 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 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 may 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 now, I'll turn the call over to David Williams, the company's Founder, Chairman and Chief Executive Officer. David?

Thank you for joining our earnings call to discuss the first half of fiscal 2023 results. The period was an important phase in the development of Arqit. While the headline revenue result is modest, the evolution in our business model, specifically going to market through major global technology channel partners, which we identified and implemented during the period, sets the foundation for the future of the company. First revenues through one of the channel partnerships that we announced in December were generated, and sales inquiries through these channels subsequently have built well. The key messages from today's call are we believe the pivot in the go-to-market strategy was the correct step for the company. We're pleased with the speed of implementation of that strategy, and we're strongly encouraged by the engagement we're experiencing through these channels with prospective end customers. Importantly, the White House gave a lead to the world in the period by instructing national security organizations to prepare for an upgrade to new encryption and directing them to use symmetric encryption which we believe only Arqit can deliver as a scalable cloud service. It is increasingly recognized by customers that it is necessary to protect data today, well in advance of the emergence of mature quantum computers, there is strong evidence that corporation are now following that lead, and so our addressable market is favorable. The level set Arqit's initial go-to-market strategy was focused on direct sales of QuantumCloud enterprise licenses and the sale of complete tech stack private instances which originally included satellites. As a result of software innovation, we managed to remove the need for satellites from the tech stack of our platform as a service in 2022. The marketing approach which resulted in our target customer base took time to craft, and this had a…

Thank you, David. For the six month period ended March 31, 2023, we generated $2.6 million in revenue and other operating income from new QuantumCloud contracts and other activities. For the comparable period in 2022, we generated $12.3 million. Our QuantumCloud revenue totaled $19,000 for the periods generated by two contracts. While the magnitude of QuantumCloud revenue is not significant, the important fact to note is one of the contracts represents first revenue from our architect NetworkSecure firewall product sold through our new channel partnership. Revenue from the channel was recognized late in the period as the new channel became fully activated .We expect to recognize additional revenue under the contract in the second half of our fiscal year. The other contract in the period was with a major US. Government and defense contractor which licensed to evaluate our symmetric key agreement software for specific use cases. QuantumCloud revenue for the period for the comparable period in 2022 was $5.3 million from two enterprise licenses. As mentioned in our press release and in David's remarks, our pivot in go-to-market strategy resulted in a shift away from direct sales of enterprise licenses to implementing and activating our channel partnerships. This is responsible for the negative variance between reporting periods. Other operating income for the six month period was $2.6 million, primarily resulting from Arqit’s ongoing project contract with the European Space Agency associated with the development of our Arc satellite. Despite the announced innovation in our technology infrastructure, which no longer requires the satellite element, we expect to continue to perform going forward under our contract with ESA realizing future other operating income. Should we sell our satellite business, we will no longer realize other operating income from our contract with ESA. Our administrative expenses equate to operating costs for those…

Thank you, Nick. I noted at the end of our fiscal year earnings call in December, there was a probe in symmetric key agreement product and major global technology vendor channel partners through which to go-to-market. 2023 would be about execution. In the brief three months since we announced the new go-to-market strategy, we've successfully activated our channel partnerships as evidenced by first revenues. We're pleased with the speed with which this was achieved. A significant work and partner coordination was required. We're focused on increasing the momentum of the sales activity through our current and expected new channel partnerships and are currently working with a number of additional channel partners and are encouraged by the engagement we're seeing with prospective end customers. I now hand the call back over to the operator for Q&A.

[Operator Instructions] And our first question coming from the line of Scott Buck with H.C. Wainwright.

Hi. Good afternoon, everyone. Thank you for taking my questions. David, can you give us a little bit more color around how and when you expect some of these channel partners to begin to really ramp revenue?

Yes. Hi, Scott. The channel partners that we announced for the platform as a service in December and others that have subsequently committed have already generated first revenues and the revenues have increased since the period end with multiple purchase orders coming from multiple partners. So momentum is growing and we're pleased with the speed of activation of these channel partnership relationships. I think getting first revenues through a channel partner just three months from signature is a sign that the product is easy to implement. And we're seeing multiple purchase orders coming through from several channel partners. So I feel that there's a good sign of momentum.

Great, that’s helpful. With those additional purchase orders. And what the visibility you do have in revenue. How are you thinking about cash runway here, given the $40 or so million you have on the balance sheet?

I'll let Nick answer that one.

Well, we had $41.5 million of cash on hand at the end of the fiscal period and we've indicated that in our earnings release that our recent monthly cash burn was at $4.6 million. We also indicated that our monthly cash cost should be about $3.2 million from July onwards. So that would suggest that on cost alone, we have operating cash well into 2024. Obviously, revenue generation will only work to extend that. And finally, I guess on this point, the monetization of the satellite business could result in a meaningful additional cash injection. So bringing that all together, I think we have reasonable cash position.

Nick, that's really helpful. On the satellite, how should we think about what the potential value is for that operating unit?

So we're not in a position to know precisely what potential bidders may apply or whether a transaction will close. However, the bidders that have completed data room access may well now consider that we've invested approximately $53 million of cash in the satellite assets under construction. Also, as previously announced, we have binding contracts for the receipt over the lifetime of the project and subject to performance worth tens of millions of dollars from commercial and R&D funding customers. We also think that we've got world leading patented technologies and a very strong engineering team. And a number of governments around the world have finally, a little later than we expected, announced procurements of Quantum Satellite systems. Which includes the European Union IRISS project, which is worth apparently EUR 600 million. So it seems that there is demand for this technology. It'll be better delivered by a company which has got the right balance sheet and resources to serve those government customers. But the value that we've invested is evident to those partners and they themselves see the demand.

Great, David. That's helpful. And a quick follow up there. What is the potential additional cost savings if you're able to sell that satellite operating unit?

The engineering team amounts to 40 people out of the current headcount base, and so it would represent a material reduction further in operating costs were that satellite division to go.

And our next question coming from the line of Jim Shelton with Deutsche Bank.

Hey, guys, thanks for taking my question. Just given the current uncertainty around the satellite business, I mean it's good to see the cost reduction initiatives. But with regards to the satellite CapEx, I'm just trying to help square that up with investors in terms of the kind of ramping top line and I guess cash burn and the potential for further dilution in the future if that top line doesn't pick up as quick as you expect. Thanks.

We don't expect to make any material CapEx on the satellite project. It's our intention to sell the satellite business, and we've been conducting that process now for some months. And you'll see from the appointment of an advisor, which we've announced today, that there are a number of parties who've expressed interest in it. So we have some reasonable reason for optimism in making a sale for value. Even if the sale were not to proceed, we would not expect to make any material CapEx on the satellite business in addition. Therefore, our view, expressed on the cash resources we have, should be considered only in the context of the operational costs that we've announced today that we've reduced to, which is $3.2 million per month.

And I'm sure we have no further questions at this time. Now I'll turn the call back over to David Williams for closing remarks. David?

Thank you very much, operator. And thank you all investors and analysts for following us closely this year. We appreciate your interest in the company and your support as fellow shareholders. Thank you.

Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect.