Episode Details

Quantum Computing, Inc. (QUBT) Q2 2026 — Revenue $5.551M vs $61K a year ago (about 91x) and $3.691M in March, beating a $5.1515M bar by 7.8%. GAAP EPS -$0.05 vs a -$0.0345 bar, a miss. The 8-K was accepted 4:23pm ET Mon Aug 10 (AMC), so Tuesday Aug 11 IS the reaction: $8.93 to $8.95, up 0.22%, after gapping up to $9.16 - which was also the high - and fading to close at $8.95 on 0.67x average volume. The headline is revenue up from $61 thousand to $5.551 million - about 91 times. But the company's own pro-forma table in Note 3 of the 10-Q restates both years as if the three businesses QCi bought in 2026 had always been owned, and like-for-like combined revenue FELL from $15.755M to $9.076M - down 42.4%. Every dollar was sold below cost, at a -21% gross margin, while interest income of $12.954M was 2.33x the revenue of the actual business. THE CALL: SELL (3/5, PRICE CALL, NOT A BUSINESS-QUALITY CALL) — base-case value ~$7.25 vs ~$8.95 today. KEY METRICS: - CALL: SELL 3/5, fair value $7.25 vs the $8.95 close - about 19% below, and 58% under the $17.33 Street consensus. H1 free cash flow -$27.785M, so we use a sum-of-the-parts, not a DCF. Bull $11.50 / base $6.75 / bear $5.00. Conviction 3 not 5 because $5.85 a share of Treasuries is a hard floor. - THE PRINT: revenue $5.551M vs $61K (about 91x), +50.4% on March's $3.691M, beating a $5.1515M bar by 7.8%. But cost of revenue was $6.717M - a GROSS LOSS of $1.166M, a -21.0% margin, against +43% a year ago. Opex $21.847M (+114%) including $7.3M of deal costs. Operating loss $23.013M. - EPS BASIS PROVEN: -$11,753k / 224,727k shares = -$0.0523 GAAP. There is NO non-GAAP EPS in the release, so the -$0.0345 bar is GAAP and the miss is real. Quarters tie: March -$0.02 + June -$0.05 = the filed H1 -$0.07. Revenue ties: $3.691M + $5.551M = $9.242M. All 6,308k dilutive shares are antidilutive. - THE ANGLE - THE PRO-FORMA: Note 3 of the 10-Q restates both years as if LSI, NuCrypt and NHanced had always been owned. June-quarter revenue went $15.755M to $9.076M - DOWN 42.4%. Six months: $30.504M to $18.879M, -38.1%. NHanced alone fell $10.399M to $3.525M (-66.1%) and went from +$2.398M to a -$3.229M loss. - WHAT $186.812M BOUGHT: LSI closed Feb 2 for $108.499M ($97.499M cash) on $32.638M of identifiable net assets - goodwill $75.861M, 70% of the price. NuCrypt Mar 4, $4.529M. NHanced Jun 22, $73.784M plus up to $72.0M earnout. Goodwill went $55.573M to $181.455M - $125.882M new, 67% of the spend. - BALANCE SHEET: cash $189.150M, short-term investments $765.020M, long-term $369.284M = $1.3235B, against $47.165M of total liabilities and NO debt. The book is $546.593M of Treasuries and $577.815M of corporate debt. Interest income $12.954M is 2.33x revenue and covers ~93% of the ~$55.6M burn. - VALUATION AND STREET: 226.346M shares at $8.95 = $2.026B; less $1.3235B cash, EV is about $702M - 19.3x pro-forma annualised sales at a -21% gross margin. RUN BACKWARDS: at 4x sales that EV needs ~$176M of revenue, 4.8x the $36.3M run rate, while the run rate SHRINKS 42%. Street: Buy, $17.33, every target predates this filing. What to watch: UP: $1.3235B of cash and securities ($5.85 a share, 65% of the price), NO debt, and total liabilities of just $47.165M; interest income covers ~93% of the cash burn, so there is no funding cliff; backlog $42.5M, 7.7x quarterly revenue; a real room-temperature photonic architecture and two fabs. DOWN: the company's own pro-forma says combined revenue fell 42.4%; gross margin is -21%, so growth destroys gross profit; NHanced fell 66.1% and flipped to a -$3.229M loss; $125.882M of new goodwill is 67% of the spend. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision. Learn investing free in the Charged Alpha app: https://chargedalpha.com/app?source=youtube&ref=video Educational only. Not financial advice.