Xanadu Revenue Rises 32%, Per-Share Loss Exceeds Estimates in Third Quarter
Key Facts
Xanadu Quantum reported third-quarter 2026 results, posting a basic and diluted loss per share of $0.11, compared with consensus estimates for a loss of $0.08, according to company data and TipRanks. Revenue was $1.305 million, versus $987,000 in the same period of 2025. That represented annual growth of 32%, but did not prevent the earnings-per-share result from missing published estimates on the downside. The company said revenue growth came mainly from the DARPA QBI program and its partnerships. It added that this revenue was largely offset by the end of previous contracts.
Net loss widened to $32.2 million for the quarter, from $20.3 million in the third quarter of 2025. Adjusted EBITDA loss was $26.3 million, compared with a loss of $15.4 million a year earlier. The company attributed the deterioration in this metric mainly to year-over-year increases in research and development and general and administrative expenses. The comparison shows that revenue growth coincided with a larger increase in losses. Research and development expenses also rose to $25.6 million, up 67% from the year-earlier period.
The company linked higher research spending to increased compensation costs as its engineering headcount grew, as well as the use of more materials. Capital expenditures totaled $8.4 million during the quarter, driven mainly by purchases of testing equipment for research and development. The chief executive said system losses present an engineering challenge on the path to developing a large-scale quantum computer. He added: "We continue to tackle it from every angle: more chip fabrication cycles, better components, and manufacturing partners." These priorities put spending on engineering and manufacturing at the heart of the company's path to developing its technology.
Cash and cash equivalents totaled $286.5 million as of September 30, 2026. Management said available liquidity, under its current operating plan, was sufficient to fund operations, research and development, and capital expenditures for at least 12 months from the date the financial statements were issued. The company did not draw on its at-the-market financing facility during the quarter, leaving $232.8 million available from the $300 million facility at the end of September. These balances provide resources to fund the spending announced for the period indicated. They come as the company recorded higher losses than in the previous year.
Xanadu announced a definitive agreement with the Canadian government to provide about $140 million to support its Inception facility. It described the funding as a non-dilutive loan, disbursed over time to reimburse eligible research and development investments. The company also received preliminary approval for up to $10 million in funding under DARPA's quantum benchmarking initiative, along with a one-year extension of the contract. The two funding arrangements are tied to research and development projects and the company's facility, according to the earnings announcement. Approval for the DARPA funding remains preliminary, in the company's wording.
Canaccord Genuity analyst Kingsley Crane cut Xanadu's price target to $24 from $34, while maintaining a buy recommendation, on November 12, 2026, according to Investing.com data. The change came after the third-quarter results were announced; the approved information contains no further details on the analyst's rationale. The company held its third-quarter earnings call on November 11, 2026, at 5:30 p.m. Eastern time. It said a recording of the call and the presentation would be available on its investor relations website. The approved information here provided no details on the stock's movement after the results announcement.