Ladies and gentlemen, greetings and welcome to the Quantum Computing Inc. second quarter 2026 shareholder update call. At this time, all participants are in a listen-only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Following management's remarks, the call line will be opened for questions. It is now my pleasure to introduce your host, John Nesbitt, with IMS Investor relations.

Thank you, and I want to welcome everyone to Quantum Computing, Inc.'s second quarter 2026 shareholder update call. Before we begin, please note that today's remarks may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding expected results, operational plans, strategy, and market opportunities. These statements are made pursuant to the Safe Harbor provision of Section 27A of the Securities Act and Section 21E of the Exchange Act and are based on current assumptions and expectations. Forward-looking statements are neither promises nor guarantees and involve risks and uncertainties that could cause actual results to differ materially. Important risk factors are discussed in our annual report on Form 10-K for the year ended December 31, 2025, and in subsequent SEC filings, including a quarterly report on Form 10-Q for the quarter ended June 30, 2026. We undertake no obligation to update these statements, except as required by law. On the call today, we have Dr. Yiping Huang, Chief Executive Officer and Chairman, and Chris Roberts, Chief Financial Officer. The team will provide an update on the business, followed by a question and answer session. With that, I will now turn the call over to management. Please go ahead, Yupin.

Good afternoon, and thank you for joining us for Quantum Computing Inc.'s second quarter 2026 earnings call. During the second quarter, we continued to build on the momentum established in the first quarter, executing on our quantum roadmap while expanding the technologies and manufacturing capabilities that enable both our quantum systems and a growing portfolio of commercial products and services. We also made meaningful progress in our transition toward scalable, cost-effective production of miniaturized quantum products based on nanophotonics and advanced packaging. As I have said before, our goal is simple, to put quantum products and the technologies into the hands of everybody. Everything we do at QCI is focused on making quantum systems smaller, more practical, more affordable, and ultimately more accessible. At our core, QCI is a quantum technology company. Our long-term vision is to develop quantum systems built on nanophotonics and advanced packaging that can be manufactured at scale and deployed across real-world applications. Supporting this strategy is the expansion of our portfolio of photonic components, lasers, detectors, photonic integrated circuits, thin film lithium-ion technologies, optical packaging, advanced packaging, and U.S.-based semiconductor manufacturing and foundry services. These products and services address growing commercial markets today while providing the core technologies and manufacturing capabilities that will enable our current customers access to the next generation quantum systems. This integrated approach is central to our strategy. By investing in commercially relevant photonics and semiconductor technologies, we are creating value today while building the engineering activities, manufacturing scale, and the production infrastructure needed to enable our long-term quantum roadmap. During the first half of the year, we completed three strategic acquisitions that significantly expanded our commercialization efforts, technical capabilities, manufacturing capacities, and engineering talent. Together, these acquisitions have strengthened our ability to execute across multiple high-growth markets while creating a more integrated company serving customers in photonics, semiconductor manufacturing, AI, defense, aerospace, telecommunications, and quantum technologies. Each acquisition contributes unique technologies and accurities that strengthens our portfolio of intellectual property, and we are already seeing the benefits of integrating these organizations. Just as importantly, we have welcomed some of the industry's leading engineers and scientists who are now focused on advancing our mission to deliver practical, scalable, and accessible quantum solutions. During the second quarter, we completed the strategic acquisition of Enhanced Semiconductors, Inc., allowing us to launch our FAB2 initiative ahead of schedule to advance key roadmap development goals and expand manufacturing capabilities. Enhanced is the leading independent U.S.-based advanced package foundry with deep accurities in integration, hybrid bonding, chiplet architectures, silicon interposers, photonic device integration, and advanced semiconductor packaging and manufacturing. The enhanced acquisition immediately expands our advanced packaging and semiconductor manufacturing capabilities in core nanophotonics area and beyond, while strengthening the production infrastructure supporting our thin-field design-based platform and future quantum products. Importantly, it also adds to our customer base, production capacity, operational flexibility, and brings an experienced engineering team positioning us to better serve both commercial and government customers today while accelerating commercial development of next-generation photonic and quantum technologies. In April, we announced that NeuralWave, our next-generation photonic reservoir computing platform, reached commercial readiness. NeuralWave combines photonic and digital computing to deliver fast, energy-efficient AI inference and advanced signal processing at the edge. It is designed to support a broad range of applications across defense, telecommunications, autonomous vehicles, robotics, healthcare, industry monitoring, and other markets where real-time intelligence and low-power operations are critical. Neural Wave also demonstrates the versatility of our photonics platform. The technologies we are developing extend well beyond quantum computing, enabling differentiated solutions across AI communications, sensing, and edge computing. This allows us to participate in large and growing commercial markets while continuing to advance our quantum roadmap. In June, we successfully delivered and installed our Direct3 quantum optimization machine at a global consulting firm, marking another important commercial milestone for QCI. The directory system is being deployed to support our customers' engagements with their enterprise customers on complex optimization challenges, including portfolio optimization. This cell demonstrates the growing interest in practical quantum optimization solutions and reflects our continued progress in bringing commercially relevant quantum technologies into real-world customer environments. Also in June, we reached a framework agreement with Planck Dynamics that included an initial purchase order for five of our neural wave photonic reservoir computing systems. Beyond this initial order, the agreement provides a pathway for the potential deployment of multiple dozens of neural wave systems as customer milestones are achieved, representing a potential aggregate program value of more than 10 million. We view this as an important validation of our photonic computing technology, its commercial readiness, and its ability to address emerging AI infrastructure requirement on a commercial scale. We also expanded the commercial reach of our quantum communication portfolio with a purchase order from a world-leading university for our quantum secure communications system. The university plans to evaluate our technology as part of its broader research and development efforts focused on quantum secure networking for next-generation communication infrastructure. We believe this order reflects continued commercial traction for our quantum communications solution and a growing recognition of the role quantum secure communications will play in the networks of the future. During the second quarter, we attended eight industry conferences to broaden our visibility and strengthen our strategic partnerships across the quantum ecosystem. These engagements, including the 5th Annual Economist Commercializing Quantum Global 2026 Conference, the Quantum Tech World Conference, and the Optical Quantum Industry Summit, gave us the opportunity to connect with customers, government stakeholders, and prospective partners while showcasing our expanding photonics and quantum optics capabilities. Looking ahead, we remain focused on two complementary growth engines. First, we will continue to move aggressively along our quantum technology roadmap, leveraging our differentiated room temperature photonic architecture to develop quantum systems that are smaller, more scalable, and more practical for real-world deployment. As these technologies become commercially viable, it allows us to better serve our existing customer base who will be exploring use cases for these systems. Second, we will continue to grow our commercial portfolio of photonic components, lasers, detectors, photonic integrated circuits, thin-field lithium-ion technologies, optical packaging, advanced packaging, semiconductor manufacturing, and other foundry services. These products and services generate revenue and address attractive market opportunities today while providing technologies, manufacturing activities, and a production scale that directly support and enable our long-term quantum strategy. Our scalable manufacturing strategy has accelerated significantly with the expansion from our FAB1 facility in Tempe, Arizona, to the launch of FAB2 through enhanced acquisition. Together, these facilities strengthen our ability to serve commercial customers across multiple industries, support government programs, expand U.S.-based manufacturing services, and scale production as demand grows. We continue to see encouraging commercial validation through new customer engagements, strategic partnerships, and government programs across both our commercial photonic business and our quantum products. We believe our unique combination of photonics, innovation, semiconductor manufacturing, advanced packaging, and quantum technology positions QCI to create sustainable long-term value by serving customers across a broad and expanding set of high-growth markets while continuing to build technologies that will define the future of quantum computing. As we execute on our roadmap, our focus remains unchanged, putting quantum into the hands of everybody. We are moving quantum out of laboratory and into business, government agencies, critical infrastructure, and ultimately, everyday applications. Our room temperature, chip-scale photonic architecture is a key differentiator, dramatically reducing system complexity, power consumption, and cost while enabling practical deployment in real-world environments. We believe the combination of our quantum technology leadership expanding photonics, portfolio, and growing manufacturing capabilities positions, QCI, to help shape the next generation of information processing while creating long-term value for our customers and shareholders. Now I'm going to turn the call over to Chris Roberts, who is going to review financials.

Thank you, Yuping. It's my pleasure to review QCI's financial performance for the second quarter. Revenue for the second quarter of 2026 totaled $5.6 million compared to $61,000 in the second quarter of 2025 and $3.7 million in the first quarter of this year. All business units of the company contributed to the second quarter revenue, which derives from a broad cross-section of government, educational, and commercial customers. Second quarter revenue came mainly from the sales of various photonics products that are critical to our quantum roadmap and a wide range of existing industrial applications. Operating expenses for the second quarter totaled $21.8 million, compared to $10.2 million in the second quarter of 2025, an increase of 114%. The year-over-year increase was largely due to increase in personnel and related payroll costs for R&D efforts, sales and marketing, as well as acquisition-related transaction expenses of approximately $7.3 million. Interest and other income for the quarter totaled $13 million, compared to $1.8 million in the second quarter of 2025. The increase in interest income was due to interest generated from the company's larger cash position compared with last year. The company reported a net loss of $11.8 million, or a loss of $0.05 per share for the second quarter of 2026, compared to a net loss of $36.5 million, or $0.26 per basic share, for the prior year period. The main reason for the decrease in net loss was the change in the fair value of a derivative liability. To give you some detail, in the second quarter of 2025, the company recognized a $28 million non-cash loss on the mark-to-market valuation of the company's warrant derivative liability compared to a mark-to-market loss of only $1.7 million in the second quarter of 2026. I want to emphasize these are non-cash losses, and as previously disclosed, the derivative liability we're talking about is related to the merger with Q-Photon in June of 22 and the warrants issued with that transaction. Our balance sheet continues to be strong. Total assets as of June 30, 2026 were approximately $1.6 billion, relatively unchanged compared to December 31 of 25. Cash, cash equivalents, and investments totaled approximately $1.3 billion as of June 30, 2026, compared to approximately $1.5 billion at year-end 2025. The cash balance reported at the end of the second quarter reflects expenditures for our acquisitions of Luminar Semiconductor, NuCrypt, and Enhanced Semiconductors, for which we used approximately $180 million in cash including transaction expenses. Total liabilities as of June 30, 2026 were $47.2 million, an increase of $26.5 million compared to year-end 2025. As of June 30, the company had stockholders' equity of $1.6 billion. Our contract backlog as of June 30, 2026 was approximately $42.5 million. And now, I'll turn the call back over to you, Peng.

Thank you, Chris. As we look ahead to the second half of 2026, we remain focused on integrating our recent acquisitions and unlocking the full value of talent, technology, and manufacturing capabilities they bring to QCI. We continue to advance our transition from research-driven innovation and prototyping toward scalable commercial manufacturing, positioning us to meet growing demand across our target markets. We are encouraged by the momentum in our commercial and government contract pipeline and remain committed to executing on the partnerships that extend our reach and credibility in the marketplace. As always, we will continue to evaluate targeted acquisition opportunities that strategically strengthen our organization and drive our path to scale. All of this is underpinned by a strong balance sheet, which gives us the financial flexibility to invest in our organization and strategically pursue those opportunities from a position of strength. We remain guided by our core principle of practicality first, scalability by design and innovation with a purpose as we build the future of quantum for everyone. Our strategy is straightforward. Move aggressively to commercialize quantum technologies while continuing to expand the photonics, semiconductor, and advanced manufacturing capabilities that create value today and provide the foundation for the quantum industry of tomorrow. Thank you for your time today and your continued support of Quanta Computing, Inc. We look forward to updating you on our continued progress throughout the rest of the year. Operator, please open up the call for questions.

Thank you. At this time, we'll be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. And the first question today is coming from John McPeak from Rosenblatt Securities. John, your line is live.

Thank you. Congrats to you, Ping and Chris, on closing Enhanced and the progress here.

Thank you.

And no problem. And the question, I have a few. The first one is on Dirac 3, the enhancements that we've been talking about relative to additional variables being enabled in the system. Anything you can talk about there, Yuping?

Yeah, thanks John. Certainly on Direct3, in the past as we reported, we have already seen clear advantages of using quantum effects. But we also realized that for wide adoption, we needed to provide more functionality and be able to support more and more variables I'm very happy to report that John so we have made pretty good progress on that so I would I would advise you to watch out for some news coming out in the coming months. So personally, I'm very happy and excited about the progress that we have made.

Okay, so that could unlock some additional markets with more variables is the way I would think about it, I guess, yeah?

Yeah, I'm pretty confident on that.

All right, great. And then if I just one follow-up, You know, with the enhanced acquisition, have your CapEx needs changed relative to Fab 2 because they are, you know, bringing some nice packaging and other capabilities to you guys?

That's a really good question. We're looking closely at what we need to do to upgrade the capability at the enhanced facility. They can currently do roughly 60,000 wafers a year, so it's a substantial increase over our fab one. But there are some features we'd like to have. We're looking at less than we would take to build out a whole new facility, so probably in the 50 to 100 million range, probably closer to 75 is what we're looking at, but we don't have that. It's still in the planning stages, and we're probably not going to spend anywhere near that this year. Okay. Great.

Thanks. I'll get back in the queue. Thanks, guys. Thank you, Joe.

The next question is coming from Max Michaelis from Lake Street Capital Markets. Max, your line is live.

Yeah, guys. Hey, a few questions from me. I want to touch on the backlog. Thanks for giving that data. $42.5 million at the end of June. Just curious to know how that's trended in the past month or two.

Certainly with the acquisition, are you talking about up to June 30th or after June 30th?

Well, after June 30th, yeah, $42.5 is up until June 30th. So how has that kind of trended in the past month and a half or so? Just curious.

Well, the kind of contracts we're dealing with, the backlog tends to move in fits and spurts. There'll be a quiet week, and then there'll be a very big week. So there hasn't been a lot of change in the last 40 days. As you can imagine, a lot of that increase from the backlog we reported at the end of Q1 is related to enhanced, but we also had a pretty good run of business development success across the company. One way to think about the backlog is that these are not quick-turn contracts. These are contracts that will be performed over a period of 12 to 18 months. So we're not expecting to burn the backlog up between now and December. This is really, if nothing else came in, this would keep us going until the third quarter of next year, maybe a little bit longer. Perfect.

And then just going off of the Q2 revenue, you touched on the range of government, educational, and commercial customers. Just curious to know which end market you feel like you're having the best headway with right now in terms of customer conversations and potential orders. Just kind of maybe stack rank those end markets that you guys shared in the press release today.

Right now, we are primarily a provider to government agencies, whether it's mainly through subcontracts. So commercial would be a second. Educational is a distant third in terms of just markets, and that's true across the entire company. The large portion of the work that we're doing is in subcontracts to primes, both the civil side as well as aerospace and defense. And we expect that that's probably going to continue for a while. But we're seeing a lot of interest in commercial markets for quantum and other products. So we think that the balance is going to gradually shift over time. But right now, roughly 70%, 80% of our business comes from government contracting, mainly as a subcontracting. Yep. All right, guys.

That's it for me. Thanks for taking my questions.

Thank you. The next question will be from Troy Jensen from Cantor Fitzgerald. Troy, your line is live.

Hey, John. Congrats on all the progress here. Maybe I'll start with you, Ping. I just got a question on Dirac.

I guess I've seen a couple of optimization examples, and there was always a quantum computer in the background kind of driving it. So is this an app? Is this going to help you with creating the compute?

Troy, you're breaking up a little bit.

Yeah, Troy, I could not hear you well.

All right, I'll try it again. I was just curious. Can you hear me, guys? Can you hear me now?

Troy, your voice still breaks up a bit.

Yep, I'm going to try one more time. Can you hear me now, guys?

I can hear you now.

Denlon, can you hear me?

Yeah, I can hear you. Okay, perfect.

You have to step outside. but um so I guess I've seen a couple of these optimization examples in the past and it seems like they're always being driven by a quantum computer in the background so I'm just curious is this the rock is this like an application that's working with other systems are just explain a little bit more that'd be great yep so as you know Troy direct three machines were designed specifically to solve some very complex and NP-hard optimization problems the purpose of the luxury is really there to look at it how to utilize the quantum effects to better solve those NP-hard problems that is that very challenging challenging to solve on the classical machines usually trapped in what people usually call local minimum and what we have found is that the quantum effects that we utilize in the direct missions can indeed help us hop off the local minimum so from that perspective and so the advantage stands similarly from the say quantum annealing but with the distinction that it is not a quantum annealing machine is that it is room temperature and we use photonics and as as i just reported in the past as both our own engineers and the outside users they have really benchmark our machine against other optimization machines using quantum effects and they have reported pretty actually advantage our both classical approaches and our other quantum machines that they can access in the market on other hand we also understand that for our technology to be widely adopted is we needed to continue to reduce the swap C parameters while supporting more and more variables and improve the quality of the solutions this is what our team has been focused on and recently we ended we have made some very exciting progress and that would help us to to connect with more customers be able to give more and more quantum values to customers for the practical applications right okay and And then maybe just a follow-up for Chris.

Could you give us any help on like a revenue or an OPEX contribution from the enhanced acquisition?

We're still not giving formal guidance, Troy. But I want to point you to the pro formas in the most recent queue that was filed this afternoon. I think it's footnote 4. And those pro formas, which go back, I see footnote 3. What you'll see is the breakout by company of the revenue by quarter the first six months of this year and the first six months of last year. And the thing that leaps out is how variable the year-over-year revenue is. This is a business that tends to be lumpy. And in the first half of last year, Enhanced did about $16 million, but we're hoping or the earn-out goals for 27 are predicated on a $35 million revenue target. But if you look at the pro formas, their numbers have gone down a bit more recently as some of the business mix has shifted. Some funding on a big Navy contract has been pushed off to the next year. So we're going to answer this in two parts. We're sitting by what we said before, which is that the models that we've seen that showed QCI before Enhanced doing $20 million to $25 million for this year. We stand by that. The estimate that Enhanced will contribute is somewhere in between the $7 million and $16 million that they've done in the past. And it's really going to be depending on how quickly some of these projects are delivered and accepted by their customers. And frankly, it's hard to predict when you're doing cutting-edge development work for a customer. Sometimes you get it done on the schedule, and sometimes it just takes a little bit longer. So we're trying to be cautious and not get over our skis on this. I hope that helps. Yeah, it helps. Thank you, Chris. We have a growing backlog, but due to the inherent challenges of technical completion and delivery, it's really hard to predict on a quarter-by-quarter basis, a little easier in the aggregate for a full year. I would caution to err on the backloading if you're doing a model.

I will be CFO-friendly, I promise.

I appreciate it, Troy. Thanks. Thank you, Troy.

Thank you. The next question will be from Nehal Chokshi from Northland Capital Markets. Nehal, your line is live.

Thank you. And you mentioned that Directory has been benchmarked against other optimization machines, and you're seeing significant advantage is this data that has already been published and freely available to everybody else or is this just information that you have received from the customer so far I believe at least a portion of the data have been published in journals and And I have also watched some of our customers reporting the findings in their presentations.

And most of our internal benchmark, on the other hand, we have not published. and also I can ask the team to provide you a collection of the papers presentations either by our own engineers or by the external users that would be great would love to see that all right and in the analog quantum computing space i think you have two primary competitors with two different modalities do you see one of those two competitors being a particularly stronger competitor in that space i would like to answer this question in this way i think we all have our own understanding or our own design of quantum computers but at the end of the day it's going to be the customers it's going to be the applications that define the value of any quantum machine including quantum computers that can create as of now according to many market researchers and also according to our conversations with customers it looks like optimization problems have perhaps the largest market potential this is one reason that we started our business focusing on optimization using quantum effects down the road I believe that gate based machines will find more and more applications in factors this has also been a part of a roadmap as well so we started with the quantum optimization machine without having to use engage but we have been working on the basis for the quantum gate based machines of course using photonics it's much harder but once we overcome the engineering challenges we can be looking at optimum opportunity to mass produce such quantum photonic based machines that will support volume production and reduce the unit price because at QSI our mission is really to democratize quantum we our mission the North Star guiding everything what we do is to put quantum into the hands of people I'm not talking about a small group of people I'm talking about large population this is why we have chosen this path again it is much much harder to construct the gates quantum gates using single photons but once we overcome this difficulty the manufacturer would be much easier think we are climbing the last half mile of mountain and I am happy with the

progress our team has been making on the gate based machine as well so don't take me wrong so we currently we don't have gate based machine yet but we have been making very good progress that's awesome thank you and just to follow up on the quantum gate you say once overcoming the engineering challenges and you did mention single photon as being a key element here are there other elements other engineering challenges other than managing photon optical loss to the

point of where you can basically maintain the integrity of a single photon throughout the quantum computer path that's a great question and i was expecting you to ask this in-depth question anyhow uh to the gate based quantum machine using single photons yes photon photo induction is most critical and it's also most challenging because this is the basis for the logic but in the meanwhile so we're talking about building a machine right so we're not talking about demonstrating the gate fidelity to construct a complete machine that function at the room temperature and be able to integrate it into say other computing platforms such as GPU CPU so we needed to have a self-contained system that will require us to have the lasers the single photon detectors controlling electronics all integrated on a single chip this is actually the fundamental reasons why we have acquired luminosity me conductor ink have acquired enhanced because we are looking at developing those heterogeneous integrated chips to support our quantum computing platform and all the other quantum technologies including the sensing, including the communications and the photonic AI.

Great, thank you very much.

Thank you, Nihal.

Thank you and the next question is coming from Ed Wu from Ascendian Capital. Ed, your line is live.

Yeah, congratulations on all the progress and congratulations on your increasing commercial scale. Will you help invest significantly in the sales force as to expand your commercial opportunities?

Thank you. Actually, yes. We announced, I guess it was two weeks ago, that we hired Susan Hunt as our new chief Revenue Officer, and our previous CRO is now in charge of products, product management, and Susan has an aggressive plan, including hiring some key people in both commercial and government sales.

So while we do have a reasonable-sized sales force today, we are very much going to emphasize sales going forward and try and build that backlog up as fast as we can yeah indeed is so that I also wanted to add that so the reason that we have made this change is because our technology and the manufacturing capabilities have reach a inflection point we are now really ready to embrace the market at sizable scale and we are ready to bring our technology and product into a much larger market because we are ready on the technology side, also on the manufacturing readiness level.

Great. Thanks for answering my question, and I wish you guys good luck. Thank you.

Thanks, Ed.

Thank you. That does conclude today's Q&A session. I would now like to hand the call back over to management for closing remarks.

Thank you, everybody, for joining our earnings call. And if you have any further questions, feel free to reach out to our investment relations. I wish everybody have a nice rest of the day.

Thank you. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.