Growing acceptance of Arqit cloud-based services

Arqit has developed secure encryption based on the cloud-based agreement of pairs of symmetric keys at end points, a solution to the limitations and frailties of Public Key Infrastructure (PKI), the basis of current encryption processes. Having successfully demonstrated secure key agreement across cloud-based facilities and a wide range of OEM applications, Arqit has now recorded a number of adoptions of its Symmetric Key Agreement Platform (SKAP) amongst telecoms service providers and in the financial services sector.

The group’s current positioning and the increasing interest it is reporting from vendors, partners and distributors can be traced to it having declared compliance with the National Security Agency Commercial Solutions for the Classified Symmetric Key Management Requirements. Encouragingly, the NSA sits at the heart of US security interests and has far-reaching influence.

For the year to 30 September 2023, Arqit reported QuantumCloud^TM revenue of US$0.69m from 7 contracts, with US$4.96m from discontinued operations (FY22: US$7.21m and US$12.84m from discontinued operations). Market demand for data encryption and network and data security continues to grow, having reached US$169bn by 2022 and estimated to be US$262bn by 2026 (Gartner Group).

Examining sector market valuations in order to address the question of valuation, we suggest a hypothetical future benchmark Arqit revenue base of US$100m which, if achieved, would cross-refence with market EV/Revenue to indicate an equity Fair Value of US$9.2 per share.