Earnings call transcript: Xanadu Quantum falls after Q3 2026 revenue growth

Xanadu Quantum Technologies released its Q3 2026 earnings report, revealing a $1.3 million revenue figure, marking a 30% increase from the previous year but a 30% drop from the prior quarter. The company incurred an EPS loss of $0.11 and a net loss of $32.2 million, down from $42.1 million in Q2. This improvement stemmed from the absence of one-time accounting charges.

After-hours trading saw shares decline by 7.14%, settling at $2.60 following a regular session close at $2.80. Despite the revenue growth, investors were more concerned about the company's cash burn and lengthy commercialization timeline than its technological advancements. R&D spending surged to $25.6 million, driven by increased wafer runs and hiring.

Net loss narrowed to $32.2 million, though adjusted EBITDA loss expanded. Xanadu highlighted a world-record low-loss optical switch as a hardware advancement, but its stock reacted poorly after-hours, reflecting cautious investor sentiment. The company is investing heavily in research and manufacturing while prioritizing its hardware roadmap, including photonic chips, loss reduction, packaging, and manufacturing partnerships.

This strategy sets Xanadu apart from software-first companies, implying longer wait times for meaningful revenue growth. The stock has lost 77.72% over the past year and 81% in the last six months, raising questions about its valuation.