Xanadu Quantum Technologies Ltd (XNDU): Financial results for Q3 2026
Xanadu Quantum Technologies Ltd (XNDU) furnished an SEC Form 6-K — earnings release. Exhibit 99.1 Xanadu Announces Third Quarter 2026 Results The Company is on a Mission to Build Quantum Computers That Are Useful and Available to People Everywhere TORONTO | November 11, 2026 /GLOBE NEWSWIRE/ -- Xanadu Quantum Technologies Limited ("Xanadu" or the "Company") (NASD
How this was made
The 30-second read
Why it matters
The earnings release provides the first public view of the company's latest financial performance and government funding, which may influence short‑term price action.
Market read
Primary disclosure of earnings for a micro‑cap quantum computing firm; modest trading relevance but new data for valuation.
What to watch
The partnership with AMD and progress on optical switch loss could be material catalysts beyond the earnings numbers.
Xanadu reports Q3 2026 revenue of $1,305 thousand (up 32% year over year) and a net loss of $(32,196) thousand, with R&D and G&A both higher year over year and cash of $286,473 thousand at September 30, 2026.
Revenue rose 32% year over year and the balance sheet holds $286,473 thousand of cash, but operating expenses rose much faster than revenue. The Q3 net loss was $(32,196) thousand against $(20,298) thousand a year earlier, and Adjusted EBITDA loss widened to $(26,270) thousand from $(15,446) thousand.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, Q3 2026 (three months ended Sept 30)GAAP | $1.30M | – | 32% |
| Cost of revenue, Q3 2026GAAP | $94K | – | – |
| Research and development expense, Q3 2026GAAP | $25.56M | – | 67% |
| General and administrative expense, Q3 2026GAAP | $9.15M | – | 129% |
| Sales and marketing expense, Q3 2026GAAP | $900K | – | – |
| Depreciation and amortization, Q3 2026GAAP | $1.74M | – | – |
| Other operating (income) expense, net, Q3 2026GAAP | −$1.51M | – | – |
| Total operating expenses, Q3 2026GAAP | $35.93M | – | – |
| Loss from operations, Q3 2026GAAP | −$34.63M | – | – |
| Interest income (expense), net, Q3 2026GAAP | $2.27M | – | – |
| Total other income (expense), net, Q3 2026GAAP | $2.43M | – | – |
| Net loss, Q3 2026GAAP | −$32.20M | – | – |
| Net loss per share, basic and diluted, Q3 2026GAAP | $(0.11) | – | – |
| Adjusted EBITDA, Q3 2026non-GAAP | −$26.27M | – | – |
| Capital expenditures, Q3 2026other | $8.4M | – | – |
| Revenue, nine months ended Sept 30, 2026GAAP | $5.65M | – | – |
| Cost of revenue, nine months ended Sept 30, 2026GAAP | $334K | – | – |
| Research and development expense, nine months ended Sept 30, 2026GAAP | $63.16M | – | – |
| General and administrative expense, nine months ended Sept 30, 2026GAAP | $29.43M | – | – |
| Sales and marketing expense, nine months ended Sept 30, 2026GAAP | $2.85M | – | – |
| Depreciation and amortization, nine months ended Sept 30, 2026GAAP | $5.00M | – | – |
| Other operating (income) expense, net, nine months ended Sept 30, 2026GAAP | −$7.24M | – | – |
| Total operating expenses, nine months ended Sept 30, 2026GAAP | $93.53M | – | – |
| Loss from operations, nine months ended Sept 30, 2026GAAP | −$87.89M | – | – |
| Interest income (expense), net, nine months ended Sept 30, 2026GAAP | $4.40M | – | – |
| Loss on fair value of earn-out share liabilities, net, nine months ended Sept 30, 2026GAAP | −$7.76M | – | – |
| Loss on derivative instruments, net, nine months ended Sept 30, 2026GAAP | −$1.91M | – | – |
| Other income (expense), net, nine months ended Sept 30, 2026GAAP | −$1.70M | – | – |
| Total other income (expense), net, nine months ended Sept 30, 2026GAAP | −$6.97M | – | – |
| Net loss, nine months ended Sept 30, 2026GAAP | −$94.85M | – | – |
| Net loss per share, basic and diluted, nine months ended Sept 30, 2026GAAP | $(0.42) | – | – |
| Adjusted EBITDA, nine months ended Sept 30, 2026non-GAAP | −$61.48M | – | – |
| Purchase of property and equipment (capital expenditures), nine months ended Sept 30, 2026GAAP | −$14.75M | – | – |
Capital returns
- The release reports no share repurchases and no dividends.
- Xanadu did not draw on its synthetic at-the-market equity facility with Yorkville Advisors during Q3 2026.
- The Company raised $67.2 million in net proceeds under the facility in Q2 2026.
- Up to $232.8 million of the $300 million facility remained available as of September 30, 2026.
- Xanadu plans to continue to use the facility opportunistically.
What drove it
- The company states that the revenue increase was primarily driven by DARPA QBI revenue and revenue from partnership engagements, which was largely offset by completion of prior-year contracts.
- The company states that the R&D increase was primarily due to higher compensation related costs from increased engineering headcount and higher material consumption costs.
- The company states that the G&A increase was primarily due to higher compensation related costs, including higher headcount and grants of restricted stock units.
- The company states that the Adjusted EBITDA loss widened primarily due to increased R&D and G&A year over year.
- Stock-based compensation expense in the Adjusted EBITDA reconciliation was $5,530 thousand in Q3 2026 against $950 thousand in Q3 2025.
- Other operating (income) expense, net was income of $(1,512) thousand in Q3 2026 against expense of $358 thousand in Q3 2025. The release does not explain this line.
- Loss on fair value of earn-out share liabilities, net of $(7,764) thousand and loss on derivative instruments, net of $(1,907) thousand appear in the nine-month figures only. The release does not explain them.
- Government funding: a definitive Strategic Response Fund agreement for approximately $140 million and provisional DARPA approval for up to $10 million under QBI were announced as recent milestones.
Concerns
- Net loss widened to $(32,196) thousand in Q3 2026 from $(20,298) thousand in Q3 2025, and to $(94,851) thousand for nine months from $(47,643) thousand.
- R&D expense rose 67% year over year to $25,560 thousand and G&A rose 129% to $9,150 thousand, against revenue of $1,305 thousand.
- Adjusted EBITDA loss was $(26,270) thousand in Q3 2026 against $(15,446) thousand a year earlier.
- Cash of $286,473 thousand at September 30, 2026 is largely the result of financing activity reported in the balance sheet and Q2 equity facility proceeds of $67.2 million. The release does not provide a cash flow statement for the quarter.
- Revenue concentration: the risk factors state that Xanadu relies on government and state-funded programs, and that funding agreements such as the Strategic Response Fund or DARPA QBI may be delayed, altered, conditioned or terminated.
- Dilution: the forward-looking statements cite dilution, market volatility and availability of equity financing from drawing on the Yorkville facility, with $232.8 million still available.
- Long-term debt rose to $33,008 thousand and long-term operating lease liabilities to $26,035 thousand from December 31, 2025.
What to watch
- Progress toward the year-end 2026 system loss target of 10.2, which the company says was outlined at its August Investor Day.
- Whether R&D and G&A growth moderates relative to revenue, given the company's stated headcount and compensation drivers.
- Timing and disbursement of the Strategic Response Fund funding and the DARPA QBI extension, including the share the company expects to allocate to R&D roadmap work.
- Use of the remaining $232.8 million under the Yorkville synthetic at-the-market facility, and the resulting dilution.
- Commercial progress of Backline with AMD, which the release describes as a software and classical computing infrastructure launch, and whether it generates reported revenue.
- Development of the GlobalFoundries, ASML and Bluefors partnerships, which the release describes as aimed at waveguide loss, detector speed and cryogenic footprint.
- Expected cash position trajectory, given capital expenditures of $(14,752) thousand in the nine months and the company's stated plan for Inception facility funding.
Balance sheet and cash flow
- Cash and cash equivalents: $286,473 thousand at September 30, 2026, against $16,164 thousand at December 31, 2025.
- Total assets: $375,789 thousand at September 30, 2026, against $70,604 thousand at December 31, 2025.
- Total liabilities: $85,848 thousand at September 30, 2026, against $46,160 thousand at December 31, 2025.
- Total shareholders' equity: $289,941 thousand at September 30, 2026, against $24,444 thousand at December 31, 2025.
- Long-term debt: $33,008 thousand at September 30, 2026, against $29,998 thousand at December 31, 2025. Current portion of long-term debt: $264 thousand.
- Long-term operating lease liabilities: $26,035 thousand at September 30, 2026, against $7,185 thousand at December 31, 2025.
- Long-term deposits: $9,876 thousand at September 30, 2026 (nil at December 31, 2025, shown as dash).
- Capital expenditures of $8.4 million in Q3 2026, which the release says were mainly driven by the purchase of R&D test equipment.
- Nine-month purchase of property and equipment, including equipment deposits, was $(14,752) thousand, against $(5,539) thousand in the prior-year period.
- The Government of Canada agreement for approximately $140 million is described as a non-dilutive loan, with funds expected over time to reimburse qualifying R&D investments. The release does not state an amount received in the period.
Analysis
Xanadu's Q3 2026 release shows revenue of $1,305 thousand against $987 thousand a year earlier, a 32% increase that the company attributes primarily to DARPA QBI revenue and partnership engagement revenue, partly offset by the completion of prior-year contracts. Revenue is small relative to the cost base. Total operating expenses were $35,932 thousand against $21,683 thousand, and loss from operations was $(34,627) thousand against $(20,696) thousand. R&D expense of $25,560 thousand and G&A expense of $9,150 thousand carry most of the increase, and the release reports year-over-year increases of 67% and 129% for them respectively.
Below the operating line, net interest income was $2,272 thousand, compared with $334 thousand a year earlier, and total other income (expense), net was $2,431 thousand. Net loss was $(32,196) thousand, or $(0.11) per share on a GAAP basis, against $(20,298) thousand, or $(0.36) per share, in Q3 2025. The per-share comparison is affected by the share count change that followed the reverse recapitalization, which the release notes has been applied retroactively. The non-GAAP Adjusted EBITDA loss was $(26,270) thousand against $(15,446) thousand. For the nine months, net loss was $(94,851) thousand against $(47,643) thousand, and the nine-month results include $(7,764) thousand of loss on fair value of earn-out share liabilities and $(1,907) thousand of loss on derivative instruments that had no printed counterpart in the prior-year period.
On the balance sheet, cash and cash equivalents rose to $286,473 thousand at September 30, 2026 from $16,164 thousand at December 31, 2025. Total assets were $375,789 thousand and shareholders' equity was $289,941 thousand, compared with $70,604 thousand and $24,444 thousand at year-end 2025. The release states that no draws were made on the Yorkville synthetic at-the-market facility in Q3, after $67.2 million of net proceeds in Q2, and that $232.8 million of the $300 million facility remains available. Capital expenditures were $8.4 million in Q3, which the company attributes mainly to R&D test equipment, and $(14,752) thousand for the nine months against $(5,539) thousand a year earlier. Long-term debt was $33,008 thousand and long-term operating lease liabilities were $26,035 thousand.
The operating narrative centres on component and manufacturing progress: a 7-millidecibel optical switch the company believes is state of the art, a collaboration with ASML on waveguide loss, a Bluefors cryogenics partnership, a GlobalFoundries partnership announced in October, and the Backline software launch with AMD. The release ties these to a year-end 2026 system loss target of 10.2, but it does not provide financial guidance or quantified milestones with dates beyond the roadmap logical qubit targets for 2029 to 2031. The government funding milestones, a definitive Strategic Response Fund agreement for approximately $140 million structured as a non-dilutive loan and DARPA provisional approval for up to $10 million, are described as funding that reimburses qualifying R&D and supports work already under way. The release does not state how much of either amount has been received.
Management, verbatim
We believe we are investing ahead of the curve, and we added new government support to keep doing it.
Michael Trzupek, Chief Financial Officer
Loss is the engineering challenge between Xanadu and a utility-scale quantum computer, and we continue to go after it from every direction: more tapeouts, better components, and manufacturing partners who can help us push further,
Dr. Christian Weedbrook, Founder and Chief Executive Officer
Our launch of Backline with AMD represents an important step in building the classical computing infrastructure required for utility-scale quantum computing.
Dr. Christian Weedbrook, Founder and Chief Executive Officer
Not in the filing
stated, not guessed- Prior quarter (Q2 2026) results: no prior-quarter figures are printed, so all prior_quarter and qoq_change fields are null.
- Year-over-year percentage changes are printed only for revenue, R&D and G&A, so yoy_change is null for the other lines.
- Segment or geographic revenue breakdown: none is printed, so the segments list is empty.
- Financial guidance: none is printed. The year-end 2026 system loss target of 10.2 is a technical target and not a financial figure. No previous outlook was provided, so vs_prior_guidance is empty.
- Prior-year Q3 capital expenditures and a Q3 2025 cash flow statement are not printed.
- Cash received under the Strategic Response Fund agreement and DARPA QBI funding in the period is not printed.
- Q3 2026 gross margin is not printed, since the release does not show a cost of sales line separate from cost of revenue.
- Dividend and buyback figures are not printed. The release does not say whether any were made.
- Non-GAAP Adjusted EBITDA reconciliation adjustment lines are excluded from key_metrics by design. Stock-based compensation of $5,530 thousand is mentioned in the drivers only.
- The release does not state the reason for the Q3 other operating (income) of $(1,512) thousand, the nine-month loss on earn-out share liabilities, or the nine-month loss on derivative instruments.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Xanadu Quantum Technologies is a photonic quantum computing company listed on NASDAQ, reporting its third‑quarter results via a Form 6‑K filing.
Ticker impact
Xanadu Quantum Technologies disclosed its Q3 2026 earnings, reporting $1.3M revenue and a $32.2M net loss.
likely downward pressure as investors digest widening loss and increased expenses
The company posted a larger net loss YoY and higher R&D/G&A spend, which typically depresses share price in the short term.
Market effects
Highlights ongoing capital intensity in quantum computing, may temper enthusiasm for similar small-cap tech firms.
Canada's quantum sector receives $140M government loan, but the loss may limit immediate investor appetite.
Limited; quantum computing remains niche with modest market impact.
Counterpoint
Despite the loss, the $140M non‑dilutive loan and DARPA funding could support long‑term upside if execution improves.
Key entities
- companyXanadu Quantum Technologies Ltd
NASDAQ‑listed quantum computing firm reporting Q3 2026 results.
- partnerAMD
Collaborated with Xanadu on the Backline platform.