Welcome to the IonQ First Quarter 2026 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there'll be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Hanley D'Onofrio, Director of Investor Relations. Please go ahead.

Good afternoon everyone and welcome to INQ's first quarter 2026 earnings call. My name is Hanley D'Onofrio and I'm the Investor Relations Director here at INQ. I'm pleased to be joined on today's call by Nicola DeMossi, INQ's Chairman and Chief Executive Officer, and Inder Singh, INQ's Chief Operating Officer and Chief Financial Officer. By now, everyone should have access to the company's first quarter 2026 earnings release issued this afternoon, which is available on the SEC's website and on the Investor Relations section of our website at investors.inq.com. Please note that on today's call, management will refer to non-GAAP financial measures. While the company believes these non-GAAP financial measures provide useful information to investors. The presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. You are directed to our earnings release for a reconciliation of adjusted EBITDA and adjusted EPS to the closest comparable GAAP measures. During the call, we will discuss our business outlook and make forward-looking statements, including those regarding our guidance for 2026. These comments are based on our predictions and expectations as of today and are not guarantees of future performance. Actual events or results could differ materially due to a number of risks and uncertainties. Therefore, you should not put undue reliance on those statements. We refer you to our recent SEC filings, including our annual report on Form 10-K for the year ended December 31, 2025, for a more detailed discussion of those risks and uncertainties. We undertake no obligation to revise any statements to reflect changes that occur after this call, except as required by law. Now, I will turn it over to Niccolo DeMossi, Chairman and CEO of INQ.

Thank you all for joining us today. 2026 is off to a strong start at INQ, and our results this quarter serve as a powerful validation of what we built throughout our transformational 2025. Financially, we have delivered the biggest quarter in INQ history thus far, and our fourth consecutive quarter of record-breaking results. $64.7 million of GAAP revenue in the first quarter of 2026 is more than eight times what we delivered in the same period last year. Our strong momentum is a testament to the demand for our industry-leading quantum computers as well as the commercial impact of our entire quantum platform. As I outlined on our fourth quarter call in February, a key objective for 2026 is to drive superior financial performance by leveraging our scale and quantum product families, combined with increasing geographic breadth and depth. We are executing well and have today raised our full-year revenue expectations to $270 million at the high end. Our results were underpinned by accelerating global quantum computing system sales, increasing high-margin cloud utilization, and deepening application-layer partnerships with our enterprise customers. I am tremendously excited about INQ's ecosystem progress, which was on full display at the New York Stock Exchange when we rang the bell with over 50 customers to celebrate World Quantum Day. INQ is defining the quantum technology market and establishing the leading hardware and software quantum industrial ecosystem. Our organic performance is a direct reflection of this leadership as we architect and deliver the quantum platform for the next century of computation. We continue to widen our lead across commercial and technical frontiers. Our parallel gate architecture with electronic qubit control will allow us to solve problems at a scale and cost that we believe will be unmatchable. On April 14th, we rolled out clear third-party validated benchmarks, showcasing the incredible time to solution and cost to solution advantages that our quantum computers already possess. These metrics represent the speed and economics with which our systems deliver accurate solutions to the world's hardest problems. As you can see on slide six of our investor presentation, we presently enjoy up to 10,000 times faster time to solution on key quantum algorithms, including 1,000 times faster for the quantum Fourier transform. The quantum Fourier transform, in fact, enables many critical use cases, such as cryptography, molecular drug discovery, advanced material synthesis, and unlocking fusion energy, making this timely solution valuable today and into the future. It is not a coincidence that several of the key utility-scale applications described by DARPA's quantum benchmarking initiative could take advantage of quantum Fourier transforms under the hood. INQ's time to solution advantage with quantum Fourier transform and other benchmark algorithms today underscores our fidelity and connectivity advantages that we expect to endure throughout the coming decades. I am proud to report that we have pre-sold our first chip-based 256-qubit system in the first quarter. We are moving with conviction to demonstrate this technology by year-end with customer systems expected to begin commissioning by the end of the second quarter of 2027. While much of the industry remains in the scientific research phase, INQ has been able to focus on delivering production-ready systems that are shaping the quantum market globally. We remain the first and only quantum company in history to have demonstrated the critical technology components at the performance levels required for full fault tolerance. The next critical frontier in our industry is the efficient use of quantum error correction to convert high-quality physical qubits into even higher-quality logical qubits, unlocking new frontiers of scale and impact. This is the bridge to utility-scale fault-tolerant quantum computing, and it should be no surprise that INQ is leading here as well. Just last month, we published our complete architectural blueprint for our flexible modular framework that describes how our technology scales through to 2030 objectives of a fully fault-tolerant system with millions of physical qubits and logical error rates as low as one in one trillion. Our walking cat paper described INQ's end-to-end architecture for full fault-tolerant quantum computing, spanning compiler design and error correction to hardware, control systems, and ion movement. This historic paper outlines in manufacturable detail how we will move from today's INQ commercial systems to deploying and commissioning INQ's utility-scale quantum computers to customers. The level of detail and completeness in our blueprint is a global first and historic milestone for the quantum industry as a whole. Along with the academic community, there has been strong and broad recognition that this is the industry's first clear, detailed, manufacturable path to scaled fault-tolerant systems. For those able to follow along in our investor presentation, please see page 7 for details. INQ's specificity sets a new standard and distinguishes INQ with its tangibility resting on capabilities our hardware has already demonstrated, including 99.99% two-qubit fidelity and reliable ion transport. This historic work demonstrates precisely why INQ is on track to be the first to unlock fully fault-tolerant quantum computers, as we published clearly in June 2025. Our level of transparency is only possible through our 30 years of innovation. Only INQ has the operational maturity and engineering predictability of generations of deployed systems, as we now accelerate into a new phase of manufacturing and scale. Moving on now to Skywater and our merchant supplier activities. As most listeners know, in January of 2026, we announced our intent to acquire SkyWater in order to accelerate the U.S. quantum industry and deepen our commitment as a merchant supplier. We expect the transaction to close in the second or third quarter of 2026, subject to customary regulatory approvals. Over the past quarter, our commercial collaboration with SkyWater has already yielded multiple test iterations for our 256-cubic chip. As we shared in February, we hit the ground running with multiple initial tape-outs. Today, I am pleased to report that we have already received some of the first ion-trap samples back from Skywater and have demonstrated on these sample chips the critical performance we need for the complete 256-cubic chips. to design, fabricate, and test these chips with Skywater within a single quarter has been a delight. Our commercial partnership with Skywater is a demonstration of the kind of acceleration we hope our investment will bring for all customers of our quantum merchant supply function. And we expect these benefits to grow even further once the combination is complete. We already act as a merchant supplier with our industry-leading atomic clocks, sensors, and networking products being sold to other quantum companies. When the Skywater transaction closes, INQ will be the largest quantum merchant supplier in the world, with Thomas Sonderman continuing to lead Skywater. We view this transaction as not only accelerating INQ's commercialization of fault-tolerant quantum computers, but also using our balance sheet to secure the scalability of the entire U.S. and allied quantum market. As it is a frequent question from our community, I will now walk through our application and quantum algorithm momentum in a bit more granularity than in prior quarterly calls. This work can be seen in our investor presentation on page 8. Applications and quantum algorithms are another cornerstone competitive advantage for INQ. We know that for customers, value is measured not just on a machine's architecture, but by how that architecture ultimately delivers customer value and results. We are confident INQ already delivers a potent combination of orders of magnitude faster time dissolution. The most accessible cost to solution, reliability, and quality that customers cannot find anywhere else. We have more than doubled our quantum algorithm and applications team size in the past few quarters in response to strong demand. We continue to grow internationally, adding both application engineers and field engineers to support customer appetite for implementing INQ's quantum solutions in their organizations. We are deliberately focused on early advantage verticals, pharmaceuticals, financial services, energy, and logistics. Real-world examples from just the past few quarters include the following partnerships. In the financial sector, we ran the world's first large-scale portfolio optimization quantum algorithm using real S&P 500 data. This showcased, along with Kipu Quantum, our systematic improvement in portfolio quality and execution time in a production environment. Our trapped iron hardware has a long-term structural advantage for dense portfolio optimizations such as these because of its all-to-all connectivity and its industry-leading single-qubit and two-qubit gate fidelities. With Synopsys, we demonstrated accelerated computer-aided engineering workloads through quantum-enhanced graph partitioning. We achieved double-digit percentage advantage in end-to-end time for large-scale structural models, such as a Rolls-Royce jet engine and automotive models also. Crucially, this demonstration was integrated into their existing cloud workflow, with zero new infrastructure required. Einride is using INQ to optimize shipment allocations and fleet orchestration for electric and autonomous freight, delivering measurable gains in real-world logistics efficiency. We have already demonstrated real-world commercial validation using anonymized logistics data and historical cancellation logs. By achieving an increase in shipments delivered, this work will underpin very significant revenue gains for our partner at fleet scale. With Quantum Basel, we are advancing hybrid quantum classical techniques to optimize large language models and reduce energy consumption. Our results show that INQ quantum computer energy consumption scales approximately linearly with qubit numbers for shallow circuits. By comparison, classical simulation exhibits exponential scaling. We are on track to demonstrate significant energy savings with improved inference performance as we scale these capabilities. These four production-oriented applications are just some of the examples our customers are deploying to actively drive business advantage and growth. We are proud to announce in parallel that our work to positively and powerfully impact humanity itself has this quarter seen a step change. We are now working with participants from the Welcome Leap initiative out of the UK, which is a program designed to accelerate human health, to apply our quantum optimization to improve cancer research. Our work introduces new computational approaches for reconstructing difficult regions of DNA that are often missed or misread by existing methods. This could become a useful foundation for future studies of genetic changes that matter in human disease, including cancer. Last quarter, we also announced a commercial partnership with CCRM, which is one of the world's leading accelerators for advanced therapies. We are very excited about the work we are doing with them, which includes cell and gene therapies for cancer and immune system rebuilding. This work is truly world-changing, offering a powerful new future for human health. We have also begun work on combining our quantum optimization technology with computational methods for gene therapies. That includes optimization of mRNA sequences that get delivered into cells. Long term, we anticipate personalized medicine acceleration. For those following along in our investor presentation, this can be seen on page 8. Let us now turn to the rest of our unique and expanding quantum platform. Building on the momentum of our recent deployments of quantum communication networks in Switzerland, Romania, and Slovakia, INQ has now successfully deployed Poland's first national quantum communications network. This is one of the largest terrestrial quantum key distribution networks in Europe, and it cements our position as the partner of choice for sovereign quantum security. We are similarly expanding our quantum platform leadership domestically by announcing a new statewide quantum networking initiative in the great state of Florida and the first commercial sale of a quantum memory node into the mid-Atlantic regional quantum internet hosted at the University of Maryland. These partnerships underscore that INQ is proudly playing a central role in the development of our secure national quantum infrastructure. On the technical front, we continue to innovate and lead the market as the only public company with a Scaled Quantum Networking Division. Last year, in partnership with the Air Force Research Lab, we achieved the first qubit to telecom frequency conversion in a field deployable system, enabling real-world quantum networks on existing telecom infrastructure. Last month, on World Quantum Day, we announced that in conjunction with AFRL, we connected qubits from two separate systems. This is the first demonstration of connected commercial quantum computers, demonstrating the operationalization opportunity of quantum interconnects and paving the way for distributed quantum computing that will underpin the future of secure global communications. Our contract with DARPA's HARC program is another testament to our leadership in quantum memory modular quantum computing and scalable networking architectures using quantum interconnects INQ is playing a critical role in enabling a new class of networked quantum computers that can combine multiple qubit types into an interconnected high performance architecture to our knowledge We are the only industry player to win a hardware award as part of HARQ. This contract is another powerful example of how INQ is already serving as the leading merchant supplier to the entire quantum industry, with key IP, including the world's most accurate commercial clocks, that matter to any modalities, long-term scaling, and manufacturability. Turning now to slide 9 in the investor presentation, momentum remains strong at INQ Federal. We continue to advance through DARPA's quantum benchmarking initiative and are building out our capabilities to support next-generation GPS, alternative PNT, and other mission-critical initiatives for our nation. We were awarded a $39 million contract to advance next-generation space communications under the Space Development Agency's HALO program. This paves the way for mission-ready quantum space systems for national security. Just this week, we expanded our space mission and sensing capabilities with a new product launch delivering persistent change monitoring intelligence from space. We were also awarded a spot on the Missile Defense Agency's SHIELD contract, which is focused on the rapid delivery of innovative capabilities to the warfighter with increased speed and agility. Our technology platform represents a dual-use advantage for our nation and its allies, underpinning both economic growth and national security. We are proud to be the partner of choice for U.S. and allied governments in this geopolitical quantum space race. In order to do this work with U.S. government agencies, high technology readiness levels are an imperative. Our quantum sensors and clocks have reached TRLs for deployment on land, sea, air, and space. At this very moment, we have quantum sensors currently deployed on a Navy ship and in space on the X-37B space plane. Our quantum security products similarly have already reached deployment-ready TRLs across critical infrastructure, telecommunications, and national networks. Providing mature, deployable quantum security solutions today is vital to ensuring continuity for communications as quantum computers become ubiquitous. Before I close, I would like to touch on Q-Day and talk through page 10 in our quarterly investor deck. Lately, Q-Day, the threshold where quantum systems render current RSA encryption obsolete, has dominated industry conversation. We have been transparent in our assessment of Q-Day's timeline since publishing our technology roadmap in June 2025. Based on our public roadmap, we expect to achieve the logical qubit count required to challenge RSA 2048 encryption in the 2028 to 2029 window. China's stated goal is 2029 and their government quantum efforts. It's worth noting that our peers have now recognized this accelerated timeline, with Google very recently bringing forward its expectation for Q-Day from the mid-2030s. to 2029 as we continue to accelerate the timeline toward q day we view it as a strategic responsibility to also provide the solution we are not just identifying a future risk we are delivering mature field deployable hardware and software cyber security solutions that allow global governments and enterprises to both enhance cyber security today and ensure our nation's protection in the age of quantum ubiquity. INQ is uniquely positioned to deliver post-quantum security solutions precisely because we're the ones defining the offensive frontier. Our deep understanding of how advanced quantum systems challenge RSA and ECC encryption allows us to build superior defenses. This creates a powerful strategic flywheel. Our hardware leadership informs our security innovation, and our security expertise de-risks the quantum transition for our customers. As I said on our full-year call in February, 2025 was a strategic and financial inflection point for INQ. Today, I am confident that 2026 is in turn the year we move from platform building blocks to platform execution at scale. We will continue to deliver superior financial performance, unlock exponential value through applications and system-level breakthroughs, and operate with both discipline and speed. INQ's mission is to pioneer and globally commercialize the world's quantum solutions, positively impacting every aspect of applied science while ensuring U.S. and L.A. leadership in this generational and geopolitically vital technology race. I want to thank my colleagues for their extraordinary efforts and the broader quantum industry for their partnership. With our strong capitalization, unmatched talent density, and clear roadmap, INQ is one platform, one team, primed and poised to win. I'm now delighted to hand the call over to Inder Singh, our COO and CFO. Thank you, Niccolo.

We are very proud to report our strongest quarter in the company's history. delivering $64.7 million in GAAP revenue, which is 755% year-on-year growth. This is now our third straight quarter of record-setting revenue growth. These results exceeded our revenue guidance by over 30% and our own expectations. Importantly, our results are underpinned by strong organic growth, which we expect will continue through the remainder of the year. In fact, as we indicated last quarter, we are expecting organic revenue growth to be 100% for the full year, even exceeding the 80% that we reported for 2025. I'll now cover our financials in more detail, which you can also see in our investor presentation on pages 12 through 18. Consistent with the additional color we started to provide you last order, regarding the different areas of our revenue and the composition of our revenue, I'm going to touch on four key aspects. One is commercial, two will be geography, third we're introducing a metric around multi-product sales, and of course, I'll again talk about remaining performance obligations, also known as RPOs. Number one, let me address our commercial revenue. I'm pleased to report that approximately 60% of our revenue came from commercial customers this quarter, similar to what we reported for all of full year 2025. This demonstrates that we are firmly entering the commercialization of our quantum technologies. Commercial revenues consist of quantum platform contracts with non-U.S. government customers. We are happy to see this metric remain high as our revenues grow. We are happy that our commercial sales have now become a major part of the business And importantly, a takeaway for us is that our quantum solutions have moved well away from the lab and squarely into real-world applications and deployments, as Niccolo described. Number two, our global revenue mix. I'm also pleased to report that we are seeing demand for our products come from around the world and from more countries than ever before. In Q1, approximately 35% of our revenue came from international markets. We've now sold solutions in over 30 countries, compared to a year ago when we had customers in just a few. As I said last quarter, we're working on pursuit and capture in a very methodical way, and it is now starting to pay off as we begin to see revenues come from many more parts of the world. Number three, we are providing you with an additional metric, a new view into our revenues, which you look at, and I would best describe it as multi-product sales. Multi-product sales means what percent of our revenue came from customers who have now bought more than one product from us, for example, computing, networking, sensing, security, et cetera. I'm pleased to report that in Q1, over one-third of our revenue came from multi-product sales. The reason this is important is consistent with the strategy that Niccolo laid out last year. We have become the go-to place for all things quantum. Under the leadership of Scott Millard, who heads global sales for us, we have created a methodical approach to our go-to-market strategy. This includes cross-selling across our business, very disciplined pipeline development and conversion, a land and cross-strategy, and yes, an amazing group of sales leaders that we are deploying around the world. While we may or may not always share all metrics every single quarter, we want to provide you a color that will help you look at our business. You should know that we are investing and growing our revenues across our entire suite products. It was Nikola's vision a year ago to develop this quantum platform company, and we are seeing that play through our financials now. This multi-product metric represents how that platform strategy has turned into financial outcomes. Number four, let me spend a moment on our remaining performance obligations, or RPOs, which is a widely accepted measure that companies use to gauge their visibility over several quarters. As of March 31st, 2026, our reported performance, the remaining performance obligations or RPOs stood at $470 million compared to approximately $72 million a year ago. That represents a growth of 554% year over year. From our lens, RPOs help us get context around the continuing growth of our company, as well as provide visibility potentially beyond the next few quarters. As all of you know, RPOs turn into revenue as performance obligations are met, and RPOs get replenished with TCV from new sales. In Q1, to give you some context, for every $1 of revenue we recognize, We added roughly $2.50 in RPOs, and again, some use this as a proxy for backlog. To summarize my revenue comments, this first quarter of 2026 was another record-setting quarter with a revenue profile of 60% commercial, 35% international, 35% multiproduct, and RPOs grew 554% year-on-year. And yes, we expect 100% year-on-year. Let me turn to our investments and profitability metrics now. First, let me talk to you about R&D. As of last quarter, our biggest investment area continues to be R&D, and Gap R&D in Q1 grew 215% year-over-year to $125.7 million. For some context, last year, our R&D exceeded the entire reported R&D in the quantum industry. Our strategy is to accelerate our innovation, deliver the most powerful quantum computing solutions to the market, connect all things quantum, and secure our customers in a post-quantum world, as Niccolo described. As a prime example of our innovation leadership and the compute power we intend to deliver and are delivering, today we're deploying our fifth-generation compute system called Tempo. We are now well on our way to the 256-qubit 6th generation system, and we are starting to turn our focus also on the 7th generation 10,000-qubit solution. We will maintain this relentless focus on innovation, and our financial firepower allows us to do so. Turning now to adjusted EBITDA, we recorded a loss of $96.8 million for the first quarter. In this quarter, adjusted EBITDA included approximately $12 million of expenses related to our commercial agreement with SkyWater for the fabrication of our industry-leading ion trash. This commercial agreement remains in place until the approval and close of SkyWater. Excluding the SkyWater commercial agreement spend of $12 million adjusted EBITDA would have been $85 million. Turning now to net income, in Q1, we reported a positive $805.4 million in GAAP net income, which was mainly due to an approximately $1.1 billion mark-to-market warrant valuation. As in prior quarters, let me remind you again that this warrant mark-to-market is a non-cash item and depends on the stock price at any given time. Therefore, this net income, including the volatility, does not represent the operating performance of our business. Let me now turn to our financial firepower as a company. Cash equivalents and investments, as of March 31, 2026, were at $3.1 billion. This provides us with the visibility and financial firepower to accelerate our R&D roadmap, invest in new product development, scale our go-to-market engine, and also to acquire critical capabilities. In addition to supporting our investment capabilities, our financial firepower provides comfort to our customers as well that we will be there for them, not just today, but in the coming years. This helps us create secure relationships with top-tier customers who want align with our multi-year roadmap. With my COO hat on, let me highlight a few areas we are driving towards excellence in our execution. As Nicola shared last quarter, that is one of our prime objectives for 2026. Last quarter, I noted that near-term demand for some of our products in Compute was outpacing our ability to perhaps meet that demand. And so this quarter, I'm happy to report, we've addressed that and already strategically accelerated our ability to address the demand by growing our deployment teams, forward deployed engineers, manufacturing capacity, and field operations. For one small example, we have more than doubled our manufacturing over the tempo to meet the demand that we're seeing. Looking into the future for our 256 Qubit system. Last quarter, I shared that we had completed tape outs A, B, and C, and have started working on tape out D. This quarter, I'm pleased to update you that tape out D has been completed, the designs have been handed over to the foundry, and their chips are now progressing well through the fabrication process. As part of this process, we received the first fully-fabricated ion-trap prototypes, I'm happy to share that they're already beyond the critical-quality metrics needed for 256-qubit devices. Not only that, but also these metrics are approaching what we will eventually need for our 10,000-qubit device and beyond. This is an important milestone. It means we're proving out the path for the full 256-qubit chips that are in fab at this time, as well as the generations beyond. Building on our progress at the chip level, I'm pleased to share that we're also now wrapping the first engineering prototype for the full 256-qubit computer. This means that we're now moving from component-level testing to system-level testing. These are very important strides towards delivering the full 256-qubit system to the market in the future. And we're not stopping there. As I mentioned, our team is already starting stride towards our seventh generation, 10,000-qubit chips. The key to scaling into our 10K high-qubit count system is the integration of active CMOS design, where SkyWater really helps. By moving control functions directly onto the silicon with CMOS, we are taking advantage of the scaling techniques of the existing global semiconductor industry. In a nutshell, we're executing on our strategy. Let me now turn to financial guidance. As you have heard today, we have built a strong foundation for what we expect will be another historic year for INQ in 2026. With that in mind, we're pleased to raise our revenue guidance for the full year, 2026, to be between $260 million and $270 million. For context, even the lower end of that guidance doubles the company's year-over-year revenues. For the second quarter, we are projecting revenues of between $65 million and $68 million. We are also reaffirming our projections for full year 2026 adjusted EBITDA to be in the range of negative $310 million to negative $330 million. We look forward to the remainder of 2026 with confidence and believe that INQ is well-positioned with the talent density, the processes, the technology, and the innovation investment to remain the trailblazing and quantum leader that we're establishing and have established already. With that, operator, please open the call for Q&A.

Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing any keys. We would like to ask you to limit yourself to one question and one follow up to ensure everyone has a chance to queue. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from John McPeak of Rosenblatt Securities. Please go ahead.

Thanks, guys. Nice work. So I think you've got three customers now for the 256. You just called out Cambridge. I think last call you talked about Quantum Basel, and also there's Horizon Quantum out there. Could you talk a little bit about the likely delivery schedule and how we should think about the revenues coming in from these? And then I just have a quick follow-up.

Yeah, thanks, John. Thank you for the comments as well. Look, we are laser-focused on our fifth-generation machine because customers are laser-focused on it. The demand that we're seeing is actually for many more countries that I can share today. You mentioned a few, of course, but as I look at the demand for our fifth-generation machine, and, in fact, customers will look at it and say, well, we might also want to look at your next and your next and your next. That remains very, very strong. So we will continue to announce new wins. I mean, first quarter is obviously just the beginning. As I look at it through the rest of the year, the demand is strong. The need for us to have the manufacturing and deployment capabilities was necessary, as I mentioned, last quarter. And we've made those investments by bringing on board and deploying, frankly, folks that will be building these. You'll see many more announcements coming in the future. I mentioned Scott and team are busy responding to some of the demand signals that we're seeing for Tempo. And importantly, early demand signals also for our 256. Remember, when customers buy something as unique as a computing platform, they're buying the platform, meaning a multi-year view, not having to shift direction. So we're ensuring that we are in the right places with the right customers who not only have the desire and interest in our view, but remain with us over multiple years. Yes, Quantum Basel is open.

It does. Let us have a quick follow-up. The roadmap has 12 logicals, a very respectable, you know, 10 to the negative 7 two-cubic gate error rate. Will that be calibratable? In other words, could you have more logicals with slightly higher error rates? Is that in the cards? Because, you know, that's a very low error rate. but it's lower logicals as a result.

Yeah, so I said in my script, hi, this is Niccolo, that we're expecting 10 to the minus 12 error rates as our architecture matures. And so you're going to see even lower error rates in the coming generations of systems. The other thing that we are making progress on is reducing the ratio still further between the physical and logical qubit ratio. So I think there's probably some modest upside in the public roadmap that we published last June in terms of physical and logical qubit counts accelerating a bit further, at least on the logical front. But as we've said consistently for the last year two if not five frankly the advantage of our architecture is we have the highest fidelity qubits naturally and that makes everything easier right makes the the ratio of physical lower as starts out lower even before you start trying to optimize it and it means error rates are lower right and you can see particularly the advantages in having lower error rates on things like page six in the investor deck, right, where we're talking about time-to-solution and the high-fidelity two-qubit parallel gate architecture we've developed. You know, time-to-solution is obviously a product of how many times you've got to take what's called a shot in a certain algorithm and, of course, how accurate the shots are. Our shots are all very accurate, so we don't have to take very many of them, right? And that's an advantage that we expect is going to endure throughout our entire, you know, architecture. And we're already obviously demonstrating it in grand style now. And obviously with the walking cat architecture now all publicly available, you can see how we're going to hold that all the way through 2030.

All right. Well, thank you.

Thank you.

Our next question comes from Craig Ellis of B. Riley Securities. Please go ahead.

Yeah, thanks for taking the question, and congratulations on the momentum to start the year, guys. I wanted to go back to the point that you made, Niccolo, on the April 14th Photonic Interconnect announcement, and it's great to see something that I think some people are calling an Ethernet moment. But the question is, as you look at what that means and how customers are engaging, what are the revenue implications of that either later this year or out on the roadmap as we look at that advancement in technology?

Well, we're not going to give you precise guidance on the revenue impact, you know, in out quarters, but I will say that the beauty of our lead in quantum networking and photonic interconnects is threefold, right? So, one, you know, we think we can push our systems a long way vis-a-vis getting, you know, 2 million physical qubits on a single chip. At some point, though, we may want even bigger systems. And so data center opportunities arise, you know, at some point in our architecture, whether it's 2 million per chip or it's 4 million per chip or even 10 million per chip. At some point, we may want 100 million qubits, right? I mean, I'm very bullish on humanity's ability to take advantage of more compute power, particularly more quantum computing power. And I think at some point in the future, generations of quantum computers themselves will help us figure out how to optimize and take advantage of even bigger quantum computers. The second thing that it does is it builds us, you know, an expanded merchant supplier capability, right? So I talked in my prepared remarks about the fact that our quantum memory solutions and IP actually will allow, you know, multiple modalities to potentially connect together in a pretty seamless fashion and work together. And I think that's, you know, exciting vis-a-vis, again, where the world will be in the coming years and decade. And then, of course, thirdly, we've talked a couple of times about the fact that we have multiple customers in the networked quantum computer category. The Air Force Research Lab is obviously the first of those, and that continues to be a large, you know, contract that we prove out every quarter of a year. My colleague Inder mentioned a few other customers both last quarter and this quarter as taking quantum network computers. So in summary, there's really three great lever points for us. And we continue to invest in, of course, protecting our quantum networking and photonic interconnects because it's something that we've been working on, you know, including from our founder, Chris Monroe, early on. And believe it or not, Chris Monroe continues to work on that. You know, so we're very excited that our lead there, we believe, to be as prodigious as the computing one. The world is going to need, obviously, protected communications between quantum computers. And this is precisely why we expanded the vision of the company, you know, 15 months ago, 18 months ago, from computing into networking.

Yeah, and I'll just add, to what Nicholas said, agree with everything you just said. So in Q1, we saw growth in every product line, Craig, year on year. And if you look at our guidance for the year without commenting on individual quarters, just look at the math. The company is doubling. Organic will be doubling. Therefore, it means the rest of the company's other product lines that we have also have a doubling effect on the company in total to get to the guidance that we've provided you. The interconnects, the ability to network computers together, the ability to deliver hybrid compute, those are the things that we are uniquely positioned to do. We can connect an ion trap type of quantum machine with someone else's. So we are, in that way, being very agnostic. We want the whole industry to grow. We want to become the networking and the compute leader in many ways in terms of our own innovation, and we want the rest of the industry to succeed as well because that's how you make it a successful, durable industry. We have moved ourselves out of the lab into the commercial market. We want everyone else to do that as well, and that's how we grow. We are happy to see the results that we're delivering. We keep investing, and Niccolo is constantly getting calls in for, you know, would you like some more investment and things like that. So I think there are ideas always that are in front of us. We are very happy with the portfolio we have. It was put together about a year ago by Niccolo in strategy. become the first quantum platform company and you will establish basically a critical mass that allows the industry to scale but also yourself to innovate and scale. So strong first quarter across every product line, strong year. I think you can sort of do the math around the growth of the other product not just competing.

That's really helpful guys and Inder I'll ask a follow up question that relates to the COO hat that you also wear, and it's directed at how go-to-market changes as you bring Scott Millard in from Dell, and you talked about wanting to be a service provider and span a range of solutions. He would seem to have just an ideal background for that, but how does go-to-market at change as we think of the next few years and the company pursuing the roadmap that you laid

out at Analyst State. Thank you. Yeah, look, becoming a successful technology company is a team sport. You have to have the legal professional to do the commercial negotiations, so Paul Davis has seen, deployed around the world, working in partnership with Scott, my teams in the finance area, helping Scott succeed, of course. Scott himself, developing a methodical pursuit and capture. You know, these are not things companies do until they have critical mass. We think we're there, right? So that's where we're now investing, not just R&D, but go to market. And some of the leaders that have joined the company would amaze you in terms of their knowledge of the market, the mindset of the customer. There's not a vertical that I think Quantum will not touch eventually. It will touch everything. Some will be earlier adopters. Some will lag. Areas like financial services, which needs protection now to the Q-Day comments that Niccolo made. Life sciences companies that need faster innovation because they're and they're trying to solve some of the most intractable problems that humanity faces and others. So we're happy to be the one that actually brings all that together, whether it's connecting our machine to someone else's or ours to ours with InterConnect. as you mentioned, but I'm happy to see kind of the flywheel effect starting to take over, Craig. Happy to follow up with you.

Thanks, guys. Our next question comes from Troy Jensen of Cantor Fitzgerald. Please go ahead.

Hey, gentlemen, congrats on the results and all the technical milestones. Maybe to start here with Niccolo, I agree 100% we're on the cusp of your guys' quantum advantage, really helping to solve some commercial applications that we haven't done previously. But I was just curious, how do you think about, like, pricing the value that you guys are creating? Because if you are enabling, like, new drug discovery and new material science, I mean, there are huge market opportunities. So can you just talk about how you kind of price and think through the value you're delivering here?

Yeah, so, look, we obviously are innovating business models at the same time as we are building the quantum ecosystem here. You know, Ender has eloquently talked in the last few quarters about the platform strategy translating into real momentum. And so obviously we're, you know, we are pricing things differently when there's a networked quantum computer and we're providing more value there than obviously just a single system that's not quantum networks. And there's going to be a fair amount of price exploration, frankly, on a global basis as our quantum platform continues to mature. What I am excited about this quarter in particular and this year really is that, you know, the market continues to come towards us. And, you know, Inder mentioned the fact that at times there is, you know, greater short-term demand than our ability to supply it. So we're very focused on, you know, improving, you know, manufacturing capacity at INQ and total across the entire platform. We, you know, we are working on both, you know, individual customer sales that can at times be multiproduct, but we're also working on some very large, you know, initiatives at the national scale. And I think it's safe to say that there is a fair amount of, you know, bespoke consultative selling that's going on. If you think about the breadth and depth of our product families, as well as the geographies that we now have traction in. Now, obviously, because of our cost advantages and because of the fact that we have always tried to forward invest in manufacturing capacities. I mean, we did that, obviously, on both coasts in the U.S. years ago, for example. We have, we believe, the greatest power per unit dollar that's on offer in the marketplace. And that's, of course, our goal. I have talked in prior quarters about the fact that we do three things at INQ across the company, right? We meet and beat financial expectations. we meet and meet technical expectations, and we continually refine our internal operating system. So as we see how market demand evolves, we will get more efficient about what we're bundling and how we're deploying, configuring, and delivering that. But right now, we're at very much the start of that S-curve, if you will. And I think there's orders of magnitude of growth to be had here and orders of magnitude, you know, of maturation to be had in our sales, ops, manufacturing, deployment organization. We're proud of the fact that we believe we lead the industry right now in maturity, but we recognize that as revenue continues to grow, you know, this organization will have to keep getting standardized and keep growing up. So we'll keep you posted as we standardize, but we're not quite at the point whereby we're listing, you know, rack prices on our website.

it's less about pricing to me it's more about meeting the customer where they are so a customer can choose to buy a system they can choose to access it via the cloud they can choose to ask us to provide them an edge device that connects them to something so we meet them where they are it's less about competing with price it's more about ensuring that we give them what they want frankly can afford and so cloud access is obviously cheaper than buying a compute device so not everyone will buy a computer not everyone will be happy with a cloud delivered experience

easy follow-up for you Andrew just uh did you report a number of 10 customers in size at all

uh we did not in this quarter Troy okay thanks and I keep up the good work

our next question comes from Quinn Bolton of Needham please go ahead

Hey, this is Shadi Millwallion for Quinn. Thanks for taking our questions and congrats on all the progress. I guess as INQ transforms into a quantum platform company, can you just talk about some of the solutions you've been bundling for customers? And then has the bundling been more INQ driven or customer driven? Thanks.

yeah great question you know it the customer journey in quantum is not very dissimilar than the customer journey in traditional networking or compute genetically i mean sometimes customers start in one area and expand into another or vice versa so we have plenty of examples where we can say a customer started with buying a network from us and then saying okay please add a computer now and then maybe saying add security. On the other hand, somebody may start with a compute device sitting next to a GPU cluster or an AI factory, and what they want is to have hybrid workloads. The types of sort of like large-scale matrix multiplication that is required for LLMs runs on the GPU, but where you need simultaneous analysis of all possible outcomes in a fraction of the time, you need the GPU. So we're seeing both. And I think over time, you'll see the industry evolving into something that resembles, frankly, networking. And I do think that we want to be in every part of that. And I think one of the really important parts to consider here is there's a quantum advantage Q-Day coming up. And whether it happens rapidly, whether we do it as a nation or someone else does it, there's a protection angle that has to be pursued as well. So we're finding some customers say, well, protect me first, lock down my crown jewels, help me understand how I can protect what I value most, and then go from there. So all those conversations are happening. They're starting from different places, maybe ending in other places. That multi-product thing that we introduced and Niccolo and I introduced this quarter is around how many customers or what percentage of our revenue at least is now employing more than one product. And I think that's the network of that.

Great. Thanks for all the color and congrats on all the progress.

Our next question comes from Richard Shannon of Craig Hallam. Please go ahead.

Hi, this is Tyler Zeron for Richard Shannon. Thank you for taking my questions. I just wanted to first understand, when does the architecture that you had recently published intersect into your roadmap? And when do you have a – what size QPU would that architecture be implemented?

So you're talking about the semiconductor roadmap, right?

Yeah, the motion-scent paper.

Yeah, well, walking cat architecture, I think, is your question, right, for full fault tolerance?

Yes.

Yeah, so, I mean, look, we're going from 256 to 10,000 qubits, you know, out to a million, right? So this full fault-tolerant architecture, you know, kicks in every generation. But, obviously, 10,000 qubits is when you start to see all of the full benefits of default-tolerant architecture. So, next year and beyond.

Basically, you use that as a jumping-off point to go from 10 to 20 to 200,000, 2 million. And that just leverages a semiconductor ecosystem that is well-tested, developed, and we can just take advantage of it.

So we're working on, like, three generations of systems at the same time, right? So we're trying to obviously continue to accelerate here, as I say, every quarter. If we can find ways to go faster, we will.

And then could you level set on how many satellites you have up in space right now? And if you could, what you think you would have exiting the year, and whether or not you have a quantum memory in a satellite. And I presume that would be connecting Florida and Maryland, but any information on that would be helpful.

Look, I think some aspects of our business are highly classified. You know, we have a constellation of satellites, is what I can say. I think that, you know, we look at the ability to connect things on the ground, from ground to space, space to space, space to ground, under the water even. So we want to make sure that we can meet the customer's needs, and not everyone needs everything. To your point, we're very uniquely positioned that we have the most accurate atomic blocks, the most accurate sensing, and yes, we have satellites too. So I look at it as that platform story. Not everybody needs everything, but some of the things that we invest in are ground-based, and to your point, some are not.

Yeah, all I'd add to that is I think it's safe to say, I said in my script, that we're focused on next generation PNT, positioning, navigation, and time. This is obviously dual use. It's important for our Department of War. It's also important for things like the future of autonomous driving and more precision and more reliability and robustness in GPS is obviously vital. We're a very unique company in the sense that we have obviously a leadership position in QKD. We have a leadership position in optical interconnection space and also leadership position in quantum sensing and space and atomic clocks. So there's a good amount of, I think, both U.S. and allied enthusiasm for different configurations of what we're up to. And we'll update the market, obviously, as we can and as we make progress.

Unique indeed. Thank you. Appreciate the time.

Our next question comes from Antoine Ligo of Wedbush Securities. Please go ahead.

Thanks for taking my question, and congratulations on the results as well. With regards to the timeline compression for Q-Day, I think, Inder, you mentioned it briefly, but are you seeing a shortening of the sales cycles within enterprise customers or put differently? Is there more impetus for enterprises to migrate to PQC standards, and has that driven any acceleration in revenue growth recently?

Look, I can't comment on Inder's or customers before. We are seeing customers wake up to the fact, not just because we're saying it, but Google is saying it, others are saying it, right? I mean, there's an acceptance now that things are about to change in a very radical way in a very short timeline. And if you look at our roadmap, our roadmap probably gets us there before many other companies. So when we look at the need for creating solutions that solve chemistry problems or, to your point, encryption as well, we also have to ensure that we are ready to secure our customers. And we're starting to see the conversation start around let's talk about security. So as I said earlier to a prior question, that has become more prevalent now than it was a year ago for sure. I'm not going to tell you that everyone is thinking, oh, I need to do something for tomorrow. I think people are realizing it's not 20 years away. Because that's what they were hearing from some others in tech. We were saying quite the opposite, right? We were saying we're going to build the most powerful computing devices on the planet, and we are. So I think that the natural conversation, when you have the compute power that creates enormous amounts of, well exponential amounts of compute energy and power and then solutions that help guard you today so you can deploy the compute solutions you want and secure what matters to you we're very unique

in that thank you and just a quick follow-up you on the recent florida land the rail announcement can you give us a sense of the scope that engagement what it means for the company or just more broadly do you see that as a replicable model in other states or jurisdictions and thank

Yeah, so it's a phased contract, and obviously it'll connect, you know, a limited geography to start with, but there's ambitions from Florida's Secretary of Commerce to expand that to be a statewide initiative. Universities are leaning in, obviously, in Florida. The state is also leaning in, and I think they recognize that as Q-Day is coming earlier, The need to secure critical infrastructure for the state, you know, continues to climb. And it's now inside the planning horizon for both, you know, enterprise and government partners when we're talking about something that is two or three years away, not, you know, a decade away, right? And so all of a sudden, and there's broad agreement, we were the early mover and leader on this last summer, but there's now very broad agreement, right, between geopolitical competitors through to, you know, large enterprise, you know, non-quantum enterprise, and, of course, ourselves in quantum enterprise, that this is, you know, very much something that if you're a CIO, a CTO, a CISO, you now need to plan in because, you know, the chances of your job, you know, life expectancy running right through this have just skyrocketed, right, in the last year. So, it has been a nice, you know, piece of momentum uptick for sure. Ender mentioned landing and expanding, and I think this is for sure, you know, part of that precise strategy. I think we're just getting started here, obviously, and so we will be growing in sophistication. As you can see in our presentation, you know, we talk about security as a key tenant of what it is that we provide, and we've been investing in this as well. So, I'm looking at page 10, in particular, when I talk about the full stack of cyber for the quantum era, right? And that stack is going to get deeper and broader itself also. And we intend to be, you know, the leading player here, obviously, as we are today. Thank you.

Our next question comes from Nehal Koshki, if you could please, from Northland Capital Markets, please go ahead.

Yeah, great. Thank you. The $12 million impact from Skywater, is that 100% realized in COGS? Would that have been 100% realized in COGS?

The expenses I talked about?

Yes.

Yeah, it's more R&D. Tooling and things like that.

Ah, okay. So then can you talk to the driver of gross margin being down about 1600 basis

response to Q&A? Yeah, I mean, I said this on prior calls, and I want to make sure that I make this very, very clear. This is an Asian industry. This is an industry in which scale will build over time. We are very focused on gross margin, obviously. We start with a huge advantage. Nicola mentioned this earlier. We have a bill of materials that is a fraction of the cost of any other modality. So you start with that, and then you add capabilities on top of it. The best, the better way to think about a business like this, or frankly, any other high-tech business on the cutting edge, whether it's AI companies or sales or others, is EBITDA. And that's why we guide EBITDA, because R&D is a big component. Just as much as you're focused on COG, yes, I am too. But R&D is an important ingredient in our recipe right now to maintain and accelerate into our roadmap. So that's what we look at. Yes, as our revenues are doubling this year, maybe more than doubling this year in part of the guidance, and continue to grow, we have the ability to then drive a cost margin, a cost of goods sold focus as well. At the moment, it's a mix of things. It depends on what you sell more of in any given quarter. So I would not have stepped on the gross margin. I'd urge you to think more about a more fulsome view, which is EBITDA margin.

Okay, great. two more questions please um nicholo the walk-in cat architecture can you discuss what you see as the advantages relative to some other new relatively qubit architectures specifically

gkp architecture yeah i mean look the the main advantage is ours is shovel ready and we're ready to go and we've gotten there first as we have with everything else in more detail and more constructability, right? It is simple. It is all-to-all communication. It is parallel gate, okay? And we're going to have a lot more physical qubits, which means more logical qubits given our error correction ratio is very low, you know, on a single chip, right? So we'll be able to tackle problems in the fault-tolerant era that simply will not be tacklable by other architectures is they won't have enough logical qubits. You know, 100 logical qubits will not do what 1,000 or 10,000 logical qubits can do on a single chip where it can communicate quickly to each other and seamlessly to each other. The parallel gate aspect I'll highlight because that's really quite unique. And I would also say that, you know, if you go through our BOM, our Bill of Materials, We announced last September, our Analyst Day at the NYC, that our bill of materials in 2025 dollars was, you know, under $30 million. That's truly astonishing. It's manufacturable. It is low. It is modest energy consumption. It is modest bomb. And because of the way architecture is built, it's really quite robust, right? We don't have a bunch of dilution refrigerator requirements that drives energy, cost, space, and bomb up a long way quickly. What we have is something that can fit near the front line, can fit in your basement type thing, can fit in a normal data center, right, a section of an office or a building. And because we also control a lot of the IP, I would argue all the best IP for networking and memory, we have extensibility to full data center offerings already being worked on, already being built in. And, you know, my friend Ender here mentioned hybrid workflows. You know, hybrid data centers are coming. There's a recognition of that need. And INQ, because we're networking forward and always have been, has thought about, obviously, how that component will fit into our architecture as and when we would like to roll out. You see customers beginning to, obviously, you know, work on that, whether it's AFRL and others as early as last year. That's going to accelerate, obviously, in enthusiasm is my prediction. So built for scalability is really my summary here, right? It's modular, it's simpler, it's regular, and it uses, of course, you know, manufacturing techniques that are well-proven so we can move quickly and we can move at global scale. Thanks.

One of the things that jumps out to me from the explanation that you just gave was the scalability. And I think that you're intimating towards a better error correction capability, lower physical to logical qubit ratios. Is that contemplated in the long-term roadmap that you guys had laid out a year ago where when you're talking about 200,000 physical qubits, you're at 8,000 logical qubits? That basically implies a 25 to 1. Was that already contemplated that you were going to be moving forward with a walking cat architecture that enables the relatively low physical to logical qubit ratios?

Yeah, for sure. I mean, we've been very clear on this, I think, in every meeting, call, and presentation we've done, right? Because we have the highest fidelity, you know, four nines, and because we've proven ion transport and four nines, and yes, we've been working this architecture for a long time. I mean, it's a, you know, it's a multi-year effort, not a multi-week effort type thing. So, yes, I mean, when we publish things in our roadmap, we have a very high, you know, what I would call, you know, do-say or say-do ratio, right? So, end of the day, you know, we do what we say we're going to do both technically and, of course, financially each quarter and each year. And we're proud of that. And these are the goals that our entire, you know, team very much prides themselves on delivering, step one, and then over-delivering against, you know, thereafter. So, yes, I mean, I'm very proud of the team. We're proud to be there first yet again. I'm not surprised because I said that we would get there last summer, you know, first, and we continue to march right up this curve right on schedule.

Okay, great. And real quickly, do you have the average duration on that RPO?

No, I mean, you can imagine that it's multi-year. In our queue that will be filed, you'll see we'll break out for you what percent of that will turn into revenue in this year, and then the rest of it turns into future years. What I like about it is we're talking years, right? I'm not talking about one quarter visibility. You start to look beyond a quarter, you can now focus on the long term. You can talk about R&D investment for the five years. And you asked some really good questions. And by the way, congratulations on launching coverage of the quantum sector and welcome to the party and the enlightened side. The thing that I would urge you to keep in mind, though, and I know you know this, modalities that have lots of errors to start with talk about error correction. Modalities that have very few errors do not talk about error correction. Whether lucky or smart, the founders of this company three decades ago picked a modality that has highest coherence, best fidelity, lowest error rate. Three of the four ingredients that you absolutely must have. The fourth, speed. So we are now trying to build the fastest, most powerful computing devices on, I think, the market today and probably in the coming years. We talk a lot about, you ask questions on cost of goods and things like that. Customers think about total cost of ownership. Think about what it means to buy a superconducting-based solution, which is great, no knock, but then you have the operating costs after day one. So we don't suffer from that. We don't suffer from the bill of materials issue. We are more around creating the best and most, I'll call it app and app store and iPhone analogy, which Nicola talked about a lot. And, you know, if you think about that, as we build the next computing device, i.e. the next iPhone, we're also at the same time building the applications that can run on it. That's really important. Keep that in mind just as much as you think about the power of the machine. That's number one. Number two, we're not just a maker of machines anymore. We're a maker of solutions, entire solutions end-to-end. So it's a platform company. And I think customers are starting to talk more around that and saying, let's talk about that other side of your portfolio, and then we'll come back.

Great. Thank you. Appreciate the answers. Our next question comes from Peter Peng of JP Morgan.

Please go ahead. Hey, guys. Thanks for taking my question. Just on the near term question, you guys gave an updated annual revenue guidance. And just based on your second quarter guidance, it would imply pretty flattish revenue through the remainder of the year. I know you guys talked about expanding capacity to accelerate the demand. To what extent are you still constrained as we look out in the back half of the year?

Look, we're exercising prudence. Look, you know, it's a nation industry, right, Peter? I mean, thank you for the question, by the way. It's a good one. Look, when we guided for Q1 a quarter ago, we guided for a number, as you saw. We beat that by 15 million. Now, not that we expected to beat it by 15 million, but we knew we would work towards what we've been doing for four-plus years, providing guidance on technology and financials, and trying to either meet or exceed on both. So I think stay with us on the journey. As we look at this company and the potential it brings, the total cost of ownership differentiation, which no one is really talking about yet, the fact that we can deliver the 10,000 machine and then the 20,000 beyond, and to someone's question earlier, it becomes modular upgrade. Modular upgrade, not a machine replacement at some point. So you get a sticky, very, very sticky relationship with a customer and a mutual dependent. So thank you. I appreciate your question. We are trying to be responsible stewards of investment, capital, and what we say to investors with the hope that we can at least meet those expectations that we set out there. And the last four or five years would suggest we can actually even meet them.

And then just for your next, the 10,000 qubit chip, can you update us on the timeline? Is that a calendar 27 or is it a calendar 28? Maybe just update on timing of that.

Yeah, look, I think we are focused this year on the tempo, right? So 2026, when we last spoke, 2026 tempo, 2027 in market 256. The year after that, in market 10K. Now, you know, because we have a team that is integrated across our compute now, under leadership, unified leadership, I would say, perhaps we can do things differently. Perhaps we can do things more efficiently, maybe even faster. So we will invest in continuing to move our roadmap to the left. You've seen us do that twice. When we bought Oxford Ionics, we moved our five-year roadmap to the left. And when we announced the proposed acquisition of Skywater, and we'll wait for the right approvals to happen, of course, and all that, we'll be able to perhaps move, as you saw in our announcement, the roadmap yet again to the left. So the investment dollars that we have and the capacity to keep putting money into this business and delivering solutions faster, and yes, financial outcomes also perhaps earlier and better, is what we're focused on. So, 10K and, you know, this year, Tempo, next year, the 256 year for that 10K. My colleague, Chris Balance in Oxford, who obsesses over this 24-7, and his entire team are, you know, making sure that they can execute with precision for more and more demanding customers. Our devices are not in the labs anymore, remember. Our devices are deployed in hybrid compute environments around the world, and those folks expect machines to work, like turn on day one, work, and provide the compute power that they need in the application development. So it's a continuing dialogue. We're happy to have it with you, Peter. You know, it's an interesting, evolving area. And, you know, when Niccolo and I joined this board five-ish years ago, we didn't think the industry would be where it is, perhaps. you know five years from now we'll look back and say wow so three billion dollars of investment power perhaps more singular focus on meeting the customer where they are not trying to outcompete anyone else except ourselves compete against ourselves that's how you win and that's our focus

perfect thank you yeah our next question comes from vijay rakesh of mizu please go ahead

Yeah, Nicole and Inder, great to see a solid guy. Congratulations. Just two quick questions, one a short term and one a longer term. On the short term, I should look at that mix of hardware and platform services. Should that mix be about the same going forward or do you expect one to

accelerate? Again, I think it depends on where the customer begins their journey with us, right? So again, number one goal in business, meet the customer where they are. Meet their current need, understand what they need before you try to sell them something and then do the land and expand and anything else and cross selling that you want to do so rather than worrying about which part which product of our dozens would be growing more than others I look at the whole company that's how Niccolo looks at it we look at it as one P&L and we're trying to drive out them for our customers the good news is the multi-product sales that we just talked about are demonstrating that customers are maybe starting with one and then adding more than one. And I hope that number will continue to grow over time. Our focus, one P&L, one R&D capability across the company, teams focused on the best efforts in terms of driving innovation. And our job is basically making sure that they succeed in creating innovation happen faster and faster. This is not about Moore's Law. This is way faster than Moore's Law, right? You

know that yeah so that's that's how we look at it. Got it and then on year 2027 you have the ambitious ambitious plan of getting to 10,000 physical and 800 logical is how is that looking

I guess thanks. Early indicators as we said in the in the prepared remarks on the 256 you know last quarter we said we had uh already started to make progress on the tape out this quarter we We started to do system-level testing on the 236. So when you get comfort with that generation of product, you can now turn your focus to the next, right? And it's always like a learning curve. Nicola said as well. There's always an S curve, but there's also a learning curve. And each learning curve helps you with the next one. Nicola, I don't know if you want to add something.

Well, no, all I want to add to this is we're working on three generations, you know, in parallel. Obviously, we've talked in my prepared remarks about our success in the first quarter. on the 256 tape out with with Skywater we expect you know continued progress momentum success there you know obviously the the difference between our architecture and what you might see in the marketplace is we've published the shovel ready blueprints right we've been working on that for quite some time we've published it and our architecture is very scalable very unique very modular and ultimately it is something which is fully proven already in terms of what the components need to be right it's simple it's regular it has unified error correction it's got parallel gates and execution um and ultimately it's got subroutines with you know dedicated components tiled you know in the hierarchy on each chip and so um going from ten thousand to to 100,000, to a million is not a particularly, you know, demanding leap. I think if you looked at, you know, what is being driven between generations of classical GPU architecture, you know, I would argue that we are on parallel or simpler, right? And so we look at this scaling now, as we've said repeatedly the last year, as really, you know, an engineering challenge. Everything in our blueprint is extremely realistic in terms of the constraints and the specific details on the compiler design, the error correction, the hardware control systems, ion movements, parallel gates, the fidelities that we're requiring are all less than what we've proven in the lab already. Right. So I'm not saying that it's not hard. I'm not saying that there won't always be, you know, some things that sort of crop up when you move from, you know, a few systems to dozens or hundreds or even someday, you know, thousands or millions of systems. I mean, that's all possible with this architecture. But nevertheless, it is all very digestible and it's been done many times in the history of humanity. Right. So I think every, of course, every year, you know, it becomes yet more proven out. We sell more systems and we prove out another generation. But the hard work's been done on this architecture, on the components of the architecture that have all been demonstrated in the last year and years, for that matter. This is really the culmination of 30 years of work. And the reason we're ahead is we've been thinking about it longer than everybody else. We built the first quantum logic gate in 1995, and today we have the highest two-cubit gate fidelity. And, of course, we also have the first travel-ready blueprint because we're not resting on our laurels. We continue to put the pedal to metal, and we keep pushing this, and we keep investing, and we will continue to do that.

Thank you.

This concludes the question and answer session. I would like to turn the conference back over to Niccolo DiMasi for any closing remarks.

Thank you, Operator. As I shared in our annual letter to shareholders last week, my personal journey with INQ dates back to reading our Founders' seminal paper on the world's first quantum logic gate as an undergraduate physics student in the 1990s. That moment was a shot heard around the world for anyone passionate about quantum mechanics, and it cemented my commitment to this company's mission. Today, one year into my role as Chairman and CEO, INQ has evolved from a quantum computing pioneer into the world's preeminent full-stack quantum platform and U.S. merchant supplier. We're the only company delivering integrated solutions across quantum computing, networking, sensing, and security in all major and allied geographies, and in all domains from submarines to satellites for the warfighter. We believe passionately in the importance of our merchant supply mission for the U.S. and allied quantum industry. We are investing and building a foundation to support the acceleration and commercialization of the entire quantum ecosystem, as we have already done with our atomic clocks, sensors, and quantum networks. Our North Star is the pioneer of quantum solutions and quantum applications that create durable value across global industries. And we are poised to transform sectors spanning pharma, finance, energy, defense, materials, logistics, GPS, cybersecurity, and far beyond. Our revenue momentum underscores how we are already positively our global customers in these domains. We have 1,500 world-class professionals comprised of over 300 PhDs and the deepest IP portfolio in the industry. With over $3 billion of cash on the balance sheet, we are now moving from quantum platform building blocks to quantum platform execution at scale. INQ is one platform, one team, primed and poised to win. I want to thank our shareholders for their continued trust and our colleagues for their extraordinary effort. Thank you again for joining our call. We look forward to 2026 with confidence.

Thank you. This call has now concluded. Thank you for attending today's presentation. You may now disconnect.