Revenue Decline and Widening Losses Raise Concerns for QUBT

Quantum Computing Inc. QUBT or QCi’s second-quarter 2025 revenues totaled $61,000, down from $183,000 a year earlier. Despite customer traction across research institutions, government agencies and enterprises, current sales are not yet meaningful relative to QUBT’s operating scale or long-term market potential. Management has indicated that meaningful contributions from its photonic chip foundry may still be 12 to18 months away.

Meanwhile, second-quarter net loss widened to $36 million from $5 million a year ago. Per management, the sharp increase in net loss was primarily due to a $28 million non-cash loss related to the company’s warrant derivative liability stemming from its 2022 merger with QPhoton. 

Additionally, operating expenses rose to $10.2 million from $5.3 million a year earlier, largely due to higher employee-related costs and increased R&D expenses. The results underscore ongoing financial strain despite progress in product and technology development.

Despite the revenue drop, gross margin improved to 43% from 32% in the prior year, though management cautioned that margins remain volatile at the current revenue scale. 

Peer Update

Rigetti Computing, Inc. RGTI reported an approximately 41.6% revenue decline for the second quarter of 2025. Revenues totaled $1.8 million, down from $3.1 million a year ago. This deterioration was due to the expiration and delayed reauthorization of the U.S. National Quantum Initiative, which affected government contracts. 

Operating expenses rose to $20.4 million from $18.1 million, mainly due to higher R&D spending, new hires, and consulting costs. The net loss widened to $39.7 million from $12.4 million, reflecting a $22.8 million unfavorable noncash impact from derivative warrants and earn-out liabilities versus a $3.4 million favorable impact last year. 

Quantum Corporation QMCO reported first-quarter fiscal 2026 revenues of $64.3 million, down from $72.3 million in the prior-year quarter. This reflects an 11.1% year-over-year decline. The revenue shortfall can be attributed to a shift in product mix as the company continues transitioning toward higher-value offerings, along with softer sales execution. Gross margins also contracted to 35.3% from 37.4% a year ago. 

The decline stemmed largely from higher inventory provisions on end-of-life products and import tariffs, partially offset by service efficiency gains. Adjusted EBITDA for the fiscal first quarter fell further into negative territory at $6.5 million compared with negative $2.2 million in the prior-year quarter. 

QUBT’s Price Performance

Year to date, QCi’s shares have gained 35%, outperforming the industry’s 17.1% growth. The S&P 500 composite has grown 15% in the same period.

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Expensive Valuation

QUBT currently trades at a forward 12-month Price-to-Sales (P/S) of 3275.20X compared with the industry average of 5.53X.

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QUBT Stock Estimate Trend

In the past 30 days, its loss per share estimate for 2025 has remained unchanged at 17 cents.

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QUBT stock currently has a Zacks Rank #4 (Sell).

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This article originally published on Zacks Investment Research (zacks.com).

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