Arqit and Sparkle achieve quantum-resistant encryption at the speed of light

Rhea-AI Summary

Arqit (NASDAQ: ARQQ) and Sparkle announced on December 3, 2025 a successful proof of concept demonstrating quantum-resistant encryption embedded at the optical transport layer across Sparkle’s metropolitan ring in Athens.

The POC applied Arqit SKA-Platform™ encryption directly on optical transponders (L1), secured multi-100G optical links end-to-end, and required no physical changes to optical hardware. Keys were injected from VM and universal CPE appliances via an ETSI14 interface and managed through an orchestration platform. The companies present the result as a scalable, low-disruption approach to protect high-capacity networks against future quantum threats.

Positive

• Demonstrated optical-layer (L1) quantum-safe encryption on live network
• Secured multi-100G optical links end-to-end
• Deployed without physical changes to optical hardware

Negative

• None.

Key Figures

FY 2025 revenue $530,000 Fiscal year 2025 revenue reported Dec 9, 2025

H2 2025 revenue $463,000 Second half of fiscal 2025

H1 2025 revenue $67,000 First half of fiscal 2025

Expected FY 2026 contracts $1.2 million Executed contracts expected for fiscal 2026

Operating costs $2.5 million per month Average operating costs in fiscal 2025

Cash and equivalents $36.9 million As of September 30, 2025

Class action settlement $7 million Term sheet to settle U.S. federal putative class action

Shares outstanding 11,545,354 shares Reported in multiple Form 144 filings

Market Reality Check

$0.2715 Last Close

Volume Volume 210,880 is 0.51x the 20-day average 409,566, indicating subdued trading. low

Technical Price $29.70 sits modestly above the 200-day MA at $28.90.

Peers on Argus

Peers show mixed moves: ALLT +0.79%, GRRR +3.69%, TLS +4.96% versus XNET -3.71% and BLZE -1.61%. With ARQQ down 2.23% pre‑news and no momentum or same‑day headlines in peers, the move appears stock-specific rather than a broad software/infra shift.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Dec 09	Full-year earnings	Positive	+0.0%	Reported FY 2025 revenue growth, seven contracts, cash of $36.9M.
Dec 03	Technology partnership	Positive	+7.1%	Sparkle POC embedding quantum‑resistant encryption in optical layer.
Dec 01	Conference call setup	Neutral	-7.3%	Scheduled FY 2025 earnings call and webcast logistics details.
Nov 11	Product launch	Positive	-2.4%	Launched SKA Central Controller for quantum‑safe key management.
Oct 09	Prelim results	Positive	-0.6%	Issued preliminary H2 and FY 2025 revenue and cash figures.

Pattern Detected

Recent product and financial updates often saw flat or negative reactions, while this Sparkle proof‑of‑concept previously coincided with a notable positive move.

Recent Company History

Over the last few months, Arqit reported fiscal 2025 revenue of $530,000 from seven contracts and highlighted contracts expected to generate about $1.2 million in fiscal 2026, with cash of $36.9 million as of Sep 30, 2025. Product news such as the Nov 11, 2025 SKA Central Controller launch and this Dec 3, 2025 Sparkle optical-layer proof of concept position the company around quantum‑safe networking. A class‑action settlement term sheet for $7 million also featured in recent filings, framing legal overhang alongside commercialization efforts.

Market Pulse Summary

The stock surged +14.5% in the session following this news. A strong positive reaction aligns with prior enthusiasm around this Sparkle proof of concept, which previously coincided with a 7.11% move after its last appearance in the news flow. The validation of quantum‑resistant encryption at the optical layer builds on earlier product launches and contract wins. However, past patterns show some positive milestones followed by muted or negative follow‑through, and recent regulatory settlements add another factor that could influence how durable any outsized move becomes.

Key Terms

quantum-safe encryption technical

"Arqit Quantum Inc. … a global leader in quantum-safe encryption, and Sparkle…"

Quantum-safe encryption is a set of cryptographic methods designed to protect digital information from being broken by powerful quantum computers that can defeat many current encryption schemes. For investors, it matters because companies that adopt these future-proof “locks” reduce the risk of data breaches, regulatory penalties and loss of customer trust, and may gain a competitive edge as regulators and partners require stronger data protections.

optical transport layer technical

"embedded directly into the optical transport layer, protecting high-capacity networks…"

The optical transport layer is the part of a communication network that moves large volumes of data as light across fiber cables and ensures those data streams arrive intact and on time. Think of it as the highways, bridges and traffic controls for digital information; its capacity, cost and reliability determine how fast and cheaply services can be delivered, so changes to it can affect revenue growth, capital costs and competitive position for companies in telecom and cloud infrastructure.

optical transponders technical

"QSI solution operates directly on optical transponders, integrating Arqit SKA-Platform…"

Optical transponders are hardware modules that convert electronic data from servers and network equipment into light pulses for fiber‑optic cables, and turn incoming light back into electronic signals — like a translator or adapter between electronic devices and long‑distance fiber. Investors watch them because they are essential to building high‑speed networks and data centers; demand, supply constraints, or price changes for transponders can affect revenue, capital spending, and profitability across telecom and cloud hardware suppliers.

physical layer (L1) technical

"integrating Arqit SKA-Platform encryption into the physical layer (L1)."

The physical layer (L1) is the hardware foundation of a communications system — the cables, antennas, connectors and electrical or radio signals that carry raw bits between devices. Like the roads and bridges of a transport network, L1 determines basic speed, reliability and reach; investors care because upgrades, failures or capacity limits at this layer drive capital spending, service quality, competitive positioning and potential revenue growth or risk.

orchestration platform technical

"managed via the Orchestration platform."

An orchestration platform is software that coordinates and automates how different applications, servers, or services work together, like a conductor directing musicians so each part starts and stops at the right time. For investors, it matters because it can cut labor and error costs, speed product updates, and let a business scale reliably—factors that directly affect profitability, operational risk, and growth potential.

cpe appliances technical

"injected from VM and universal CPE appliances, connected to ETSI14 Interface…"

CPE appliances are physical devices—like modems, routers, set‑top boxes or security gateways—installed at a customer’s location to connect them to a service provider’s network. For investors, CPE sales and deployment trends signal demand for a company’s services, recurring revenue potential, and supply‑chain or margin pressures much like how the number of cash registers sold can indicate retail growth and ongoing service needs.

AI-generated analysis. Not financial advice.

LONDON, Dec. 03, 2025 (GLOBE NEWSWIRE) -- Arqit Quantum Inc. (NASDAQ: ARQQ, “Arqit”), a global leader in quantum-safe encryption, and Sparkle, a Tier 1 global telecoms operator, have successfully demonstrated quantum-resilient data transmission across Sparkle’s optical network in Greece.

The proof of concept (POC), implemented over Sparkle metropolitan optical ring in Athens, shows how Arqit’s encryption technology can be embedded directly into the optical transport layer, protecting high-capacity networks against future quantum threats without impacting performance.

Sparkle validated that sensitive data can be secured at the physical network layer without compromising performance. Following the deployment of Arqit’s technology, end-to-end encryption was successfully applied to multi-100G optical links. This demonstrated that quantum-resistant protection can be delivered at the speed of light, ensuring ultra-secure data transmission without compromising performance.

Key Highlights:

• Optical-Layer Quantum-Safe Encryption: Sparkle’s Quantum-Safe over Internet (QSI) solution operates directly on optical transponders, integrating Arqit SKA-Platform™ encryption into the physical layer (L1).
• High-Capacity and Scalable: supports multi-100G optical links and scales with growing network demands.
• No physical changes to optical hardware: offers a practical, ready-to-deploy solution that doesn’t require expensive optical hardware changes. The quantum-safe symmetric encryption key was injected from VM and universal CPE appliances, connected to ETSI14 Interface and managed via the Orchestration platform.
  

Advancing Quantum-Safe Network Innovations:
This collaboration marks a significant step toward securing next-generation telecoms infrastructure. By combining Sparkle’s QSI leadership, Arqit’s quantum-safe encryption, and high-performance optical capabilities, the project demonstrates a scalable, real-world solution for quantum-resistant optical networking. This lays the groundwork for more resilient data networks worldwide.

“Securing the world’s data networks against emerging threats requires solutions that are both effective and practical,” said Andy Leaver, CEO of Arqit. “Telecom operators are looking for proven, low-disruption paths to quantum-safe security, and this POC demonstrates a ready-now path. It shows that quantum-safe encryption can be embedded directly into existing optical infrastructure, protecting high-capacity data links without disrupting performance or operations.”

For more details on Arqit’s quantum-safe networking technology, visit www.arqitgroup.com.  

Notes to Editors

About Sparkle

Sparkle is TIM Group’s global operator, first international service provider in Italy and among the top worldwide, offering a full range of infrastructure and global connectivity services – capacity, IP, SD-WAN, colocation, IoT connectivity, roaming and voice - to national and international Carriers, OTTs, ISPs, Media/Content Providers, and multinational enterprises. As a leading player in the submarine cable industry, Sparkle owns and manages a network of more than 600,000 km of fiber stretching across Europe, Africa, the Middle East, the Americas, and Asia. Sparkle’s sales team has a global presence, with representatives in 32 countries.

Find out more about Sparkle following its X and LinkedIn profiles or visiting the website tisparkle.com

Media Contacts:

sparkle.communication@tisparkle.com
X: @TISparkle

About Arqit

Arqit Quantum Inc. (Nasdaq: ARQQ, ARQQW) supplies a unique encryption software service which makes the communications links of any networked device or cloud machine secure against both current and future forms of attack on encryption – even from a quantum computer. Compatible with NSA CSfC Components and meeting the demands of NSA CSfC Symmetric Key Management Requirements Annexe 1.2. and RFC 8784, Arqit’s Symmetric Key Agreement Platform uses a lightweight software agent that allows end point devices to create encryption keys locally in partnership with any number of other devices. The keys are computationally secure and facilitate Zero Trust Network Access. It can create limitless volumes of keys with any group size and refresh rate and can regulate the secure entrance and exit of a device in a group. The agent is lightweight and will thus run on the smallest of end point devices. The product sits within a growing portfolio of granted patents. It also works in a standards compliant manner which does not oblige customers to make a disruptive rip and replace of their technology. Arqit has been recognised as an IDC Innovator for Post Quantum Cryptography (2024) and is a multi-award-winning leader in quantum-safe security, including two GSMA Global Mobile Awards. For more information, visit www.arqitgroup.com.

Media relations enquiries:
Arqit: pr@arqit.uk

Investor relations enquiries:
Arqit: investorrelations@arqit.uk

Caution About Forward-Looking Statements

This communication includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. These forward-looking statements are based on Arqit’s expectations and beliefs concerning future events and involve risks and uncertainties that may cause actual results to differ materially from current expectations. These factors are difficult to predict accurately and may be beyond Arqit’s control. Forward-looking statements in this communication or elsewhere speak only as of the date made. New uncertainties and risks arise from time to time, and it is impossible for Arqit to predict these events or how they may affect it. Except as required by law, Arqit does not have any duty to, and does not intend to, update or revise the forward-looking statements in this communication or elsewhere after the date this communication is issued. In light of these risks and uncertainties, investors should keep in mind that results, events or developments discussed in any forward-looking statement made in this communication may not occur. Uncertainties and risk factors that could affect Arqit’s future performance and cause results to differ from the forward-looking statements in this release include, but are not limited to: (i) the outcome of any legal proceedings that may be instituted against Arqit, (ii) the ability to maintain the listing of Arqit’s securities on a national securities exchange, (iii) changes in the competitive and regulated industries in which Arqit operates, variations in operating performance across competitors and changes in laws and regulations affecting Arqit’s business, (iv) the ability to implement business plans, forecasts, and other expectations, and identify and realise additional opportunities, (v) the potential inability of Arqit to successfully deliver its operational technology, (vi) the risk of interruption or failure of Arqit’s information technology and communications system, (vii) the enforceability of Arqit’s intellectual property, (viii) market and other conditions, and (ix) other risks and uncertainties set forth in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in Arqit’s annual report on Form 20-F (the “Form 20-F”), filed with the U.S. Securities and Exchange Commission (the “SEC”) on 5 December 2024 and in subsequent filings with the SEC. While the list of factors discussed above and in the Form 20-F and other SEC filings are considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realisation of forward-looking statements.

FAQ

What did Arqit (ARQQ) and Sparkle announce on December 3, 2025?

They announced a POC showing quantum-resistant encryption embedded at the optical transport layer securing multi-100G links in Athens.

Does Arqit’s solution (ARQQ) require changes to existing optical hardware?

No — the POC states the solution operates on optical transponders and requires no physical hardware changes.

What network capacity did the Arqit and Sparkle test support?

The demonstration applied end-to-end encryption on multi-100G optical links.

How is the quantum-safe key delivered in the Arqit (ARQQ) deployment?

The quantum-safe symmetric key was injected from VMs and universal CPE appliances via an ETSI14 interface and managed by an orchestration platform.

What does the ARQQ–Sparkle POC mean for telecom operators?

It shows a potential ready-now, low-disruption path to embed quantum-safe encryption into existing optical networks.

Where was the Arqit (ARQQ) quantum-safe optical test conducted?

The proof of concept was implemented over Sparkle’s metropolitan optical ring in Athens, Greece.