Horizon reported a $33 million profit without sales. Here is why.
A noncash gain on warrants turned Horizon Quantum’s quarterly result positive. Its new report shows why accounting profit, customer revenue and cash need separate checks.
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Horizon Quantum reported $33.4 million of net income for the third quarter on November 10, despite recording no revenue. The explanation is a $43.1 million noncash gain from revaluing warrants, not a sudden surge in sales of its quantum software.[1]
The company disclosed the mechanism directly: a decline in its share price reduced the fair value of warrant liabilities, creating an accounting gain. Meanwhile, its operating loss widened to $10.5 million from $4.9 million a year earlier. A positive bottom line and a loss-making operation can therefore appear in the same set of results.[1]
How a falling share price can create a gain
A warrant can give its holder the right to buy shares on specified terms. Some warrants are treated as liabilities in company accounts and must be valued again as conditions change. When that liability becomes smaller, the reduction can appear as income, even though no customer has paid for a product.[1]
Horizon attributed this quarter’s $43,099,876 gain to the lower fair value of its warrant liabilities following a share-price decline. This is an accounting effect, not evidence that shareholders benefited from the decline. It also does not put an equivalent amount of cash into the company’s bank account.[1]
A simple calculation helps isolate its scale. Subtracting that single gain from reported net income of $33,411,396 leaves a loss of $9,688,480, or about $9.7 million, with everything else unchanged. This is QubitWire’s arithmetic, not an official adjusted net-loss measure or a forecast of the next quarter.[1]
Horizon’s own adjusted EBITDA measure makes additional adjustments. It reported a $6.3 million loss on that basis, compared with $3.0 million a year earlier. That non-GAAP measure excludes specified accounting and other items; it is not operating cash flow and does not replace results under standard U.S. accounting rules.[1]
What the business still has to demonstrate
Horizon develops software intended to make quantum computers easier to program and control. Its report describes technical progress, including the pulse-level integration of its Triple Alpha environment with an OQC processor, which QubitWire covered separately. That integration is a different milestone from generating customer revenue.[1]
The company recorded no revenue in either the third quarter of 2026 or the comparable 2025 quarter. Research and development expense rose to approximately $4.5 million from $2.0 million. These figures show the scale of ongoing development; zero sales alone does not establish whether a particular technical result works.[1]
Horizon also reported approximately $102.8 million of cash and cash equivalents at September 30, down from $113.3 million at June 30. That change in the cash balance is a separate figure from both the accounting profit and the adjusted EBITDA loss. The release’s cash-flow statement covers nine months, so it should not be read as a quarterly cash-burn table.[1]
Warrant revaluations can move in either direction. Horizon’s first nine months still showed an $85.4 million net loss, including a $62.2 million derivative fair-value loss, even after the third-quarter gain. The quarter and year-to-date figures cover different periods; neither should be silently substituted for the other.[1]
The useful follow-up
The next commercial evidence is customer revenue and the terms on which it is earned. The next financial checks are operating costs, cash-flow periods and any further warrant revaluations. Keeping those separate lets a reader assess software progress without mistaking a noncash accounting gain for a working sales engine.