IonQ Stock

Wow, what a turnout. Amazing. Thank you all. We appreciate your interest. We appreciate your attending this session today. We appreciate your -- if you're investors and your trust in what we're trying to execute here as a company. And if you're an analyst, we appreciate you following us as well. My name is Inder Singh. I joined Niccolo, our CEO, in the journey of making IonQ not only the pacesetter of the industry that he's made it, but also the only platform company in our space.

My job today is to show this slide, which is a legal slide. There'll be a test but also really to show you the agenda. We have an exciting day planned really afternoon plan for you. It's in 2 parts. On the left-hand side, you'll hear from a number of the leaders of the company about how we're doing and how we're executing, what our plans are, what our priorities are and how we plan to keep on innovating in each of these areas, whether it's in computing, in the security area and a number of things, frankly, that 3 years ago, people thought they're like 3 decades away.

And here we are, it's real. And when we say quantum is now, we mean it. You have customers that will be joining on the right-hand side, as you see, a number of panels to tell you what they're focused on, how they're using either the security solution from us or the computing solution from us or imaging from space using AI. Amazing things are actually happening. I moved from the Board into the company a year ago, actually this month, and the first Analyst Day was 1 week after I joined. This is the second Analyst Day. We have so much more to tell.

Let me tell you that members of our Board are also here in this row, kindly raise your hand. And we're thrilled to have them. It shows you the engagement of the company. It shows you the engagement of the Board and the importance that we place on making sure that every one of our constituencies, customers, investors, partners, Board are all involved. And so I'm not going to give a long speech here.

Essentially, all I want to do is tell you, we think we have a lot of excitement to hear about there will be opportunities for networking at the end of the day. Your tags have a certain color on them. It will determine which of the 2 rooms you'll be going to. And some of you may be actually going to help ring the bell as well. I've done that a number of times. I may or may not join you in that endeavor. Some analysts have asked me to do some Q&A with them instead. So welcome. Thank you. If you have questions, of course, we'll have a Q&A.

[Presentation]

It took us 7 months to get that deal closed, and it is hugely historic, and I'm excited about the fact that we are not only the largest quantum company in history, but we're the first one that is vertically integrated. And so I'm going to start my bit of this presentation talking about the phases of IonQ's growth. I'd be remiss, however, before doing so, if I don't thank everyone that's worked so hard to make today possible. Whether or not you're in our IR function or comms function, our events team, our product marketing team. This is slated to be easily our most exciting corporate event to date. It's our biggest one. And if you're watching at home, it's a packed house where we had to turn people away in all seriousness. And so next year, if you get a seat, you can probably scalp it and make a fortune out front the NYSE.

We have a hugely distinguished and eclectic and frankly, powerful group in the audience today, and I'm really honored by everybody who traveled today. We have not only distinguished university professors, and we'll hear from some of them later on. We have our founder in the audience, but we also have our friends from overseas who've traveled quite some ways to make it here. We have founders of public companies whose market caps are larger than ours at the moment. We have a hereditary prince from Europe. We also have a former ambassador and a former governor.

And of course, we are honored that Senator [Indiscernible] is here with us, and we'll be hearing some more from him later this afternoon. So let's talk about the era that IonQ is announcing as having entered today. You've heard me in prior events talk about the fact that we built the world's first and biggest quantum platform over the last couple of years. And you can see how our revenue has grown on an annual basis approximately.

This year, even before SkyWater closed, we were on track to do the better part of $300 million of Quantum platform revenue. And SkyWater's merger with us marks the beginning of a historic era for IonQ and for our industry. Not only are we investing in driving merchant supply to accelerate the U.S. industry and our allies, but we're also speeding up our own road map because of this vertical integration.

We are focused as a company on these 4 areas in our platform: computing, security, sensing and of course, also our foundry, which is a new part of the family. You're going to hear a lot about our foundry capabilities this afternoon from my colleagues, not just me here Bhaskar, but Tom Sonderman, who runs SkyWater to this day. And you're going to hear about application progress, not just from ourselves, but from our customers. We have done what we said we were going to do in the last year, and we continue to deliver not just technical milestones, but commercial milestones that unlock applications that are hugely exciting.

Now this page, I have to be honest, it's my favorite one. And I'm hugely proud of the fact that over the last 2 years, we have worked as a team to scale our company and deliver a quantum platform that has a unique depth, breadth and scale advantage not seen anywhere else in the industry. We do about -- before SkyWater, we did about twice the revenue of the whole rest of the sector that's public in Q2. And we're obviously not stopping here.

Inder is going to talk a bit later about our guidance uplift for the day. And you can see that IonQ will continue to outperform quarter-on-quarter as we have done since our IPO. A lot of work goes into revenue, and I don't want to underplay this because we're an industry that's always pioneering, always delivering technical milestones, but that's just the beginning of it, right?

To have revenue, you've got to have a technical milestone that's hit a product that works, a customer that buys it and of course, machines that are delivered that do useful things. We've been doing that longer than anyone in our sector. We continue to do it, and we're doing it, of course, at an accelerating rate.

For those of you who haven't seen it, it was a big news day for us. We put out 6 press releases. Now during the course of the day, you're going to hear about each one of them. Some of the things I'm proudest on is not just the fact that we've quintupled our revenue year-on-year and not just the fact that we launched the world's first fault tolerant architecture, the shovel-ready, our Walking Cat paper in April and not just that we're in 3 DARPA programs, HARQ, It's About Time and, of course, QBI. But we've done exciting things on the interconnect and the networking front also. And we'll touch on that, just like we'll touch on what we're doing with error correction Fidelity when Dr. Ballance speaks just after me.

Now I'm going to talk for a second about our security organization and then move on to computing. We've been passionate believers in the need for quantum security for years now. And we have the largest security practice. My colleague, Jordan Shapiro, will talk a bit later about this. But things are accelerating here and not just accelerating because of the industry as a whole, they're accelerating because, of course, what IonQ has done and announced this morning.

I said this a year ago, Q-Day is coming, and it's coming sooner than people think, and it's coming inside the planning horizon of a CISO, whether or not you are in a government position, federal position or enterprise one. Classical AI is accelerating this trend and playing into it. So some of you might have seen that Anthropic had a lab leak, OpenAI has had a lab leak and Claude is going to town on some of the recommended PQC algorithms that are out there.

This is not going to slow down as a theme. So if you are a CISO and you're watching today, you got to get ahead of this. IonQ offers defense in depth. We offer hardware and software solutions. We think this is going to be a race that accelerates and one that demands ever more investment to stay ahead of because the combination of what quantum computers in the wrong hands and classical LLMs in the wrong hands can do is only going to make this trickier, frankly.

So please call us. As we always say, you want a safe cracker to be the one who builds your safe. We've delivered this morning some news on the safe breaking front, if you will. You want to be working with us on the safe making front, and we offer unique defense in depth advantages for that.

Moving now to our computing business. It's been a big year. You can just see how many systems we have deployed on-premise. You can see how many hours of uptime and computing that we've delivered through the cloud and how many customers we now have around the world. And this is a map that we are delivering to servicing customers on and of course, doing better every generation to deliver customer satisfaction. That's now a big part of the Lexicon just like manufacturing upgradability and accessibility is. We've been on the cloud since 2020, Amazon, Google, Microsoft. We are generally the biggest cloud partners in the quantum space. And we expect this business to remain exciting, high margin, growing quickly.

Now Chris is going to talk a lot more about our road map. And hopefully, you all had a chance to walk by our models out front, models or actual chips out front of our generations of systems. What makes IonQ different is that we've been running for over 5 years in the cloud. We've been shipping systems for over 5 years, and our machines turned on in 2017. And so we have real applications in production today. We have more of them rolling out continually. And we, of course, were the first company to publish a complete fall-tolerant shovel-ready blueprint in April, which we're building upon today.

My colleague, Mihir, is going to talk in a few minutes about progress that we've made also in the networking space. And we think not just about the next 2 or 3 quarters, next 2 or 3 years at IonQ, we talk about the next 5 years, 7 years. And we see a huge opportunity for not just our machines to become more powerful in their own right, but an opportunity for us to deliver data center scale quantum computers. And we're doing this through progress on our photonic are yet and progress through our Quantum networking and Quantum memory business that we acquired with Lightsynq last year.

This quantum application road map, we rolled out last June. And I'm excited to announce that we continue to march right along. We are unlocking all the applications that we said we would last year. And you've seen these announcements, whether it's computational engineering, whether it's logistics, whether or not it's image change detection, whether it's in the pharmaceutical space, we continue marching right up the curve year after year. And we believe we're just scratching the tip of the iceberg here. There will be far more applications than we can think of in advance as our machines roll out. And far more exciting applications, we hope will be created by people building businesses and doing research with our machines at arm's length.

Special callout for our life sciences colleagues. This is something near and dear to our heart at IonQ. We care about oncology. We care about predictive medicine. We care about personalized medicine, and we'll be talking a little bit more about that later on today. But obviously, in terms of what quantum computers are great at, modeling quantum mechanical things like materials and pharma is something that is a super power of ours.

In April, we rolled out our walking cat architecture, and we're proud of the fact that it was shovel-ready and done down to level of detail the world had never seen before. This morning, we announced that IonQ system with about 20,000 physical qubits could recover a 256-bit elliptical curve key. We didn't approximate. We've done this down to a level of detail that is historic. We've done it in a responsible way in partnership with our nation's government. And we've done it because we want to show people that the blocking and tackling belt and braces approach we've taken for 30 years now since our company was founded, continues to deliver results that are real, on schedule and with huge implications for sectors like chemistry, material science and of course, the life sciences.

I don't know about you guys, but for most of my time in the quantum computing space, I remember a lecture of mine when I was at university, and I read Chris Monroe paper in '95, '94, the first Quantum logic gate. And physicist tend to talk about superpowers. We talk about the superpowers that quantum computing can deliver. Those superpowers are beginning to roll out. And IonQ has a super team, and they've done super work with our super ions this year.

And so without further ado, I'm going to close on our final announcement from this morning, which is we've rolled out our new quantum computing platform line of products, which we've aptly named Superion systems and the Superion line. And we believe that that's appropriate because they are going to be the world's most powerful machines pretty much every generation. I think will be more powerful per unit dollar per unit energy consumption per unit space, probably in some cases, by orders of magnitude that you'll find anywhere else in the world. It's a system that is upgradable, a system that's accessible to the cloud and through sovereign systems.

And best of all, it's a system that's all been accelerated and all gone on to the SkyWater chips that we now vertically integrate with and our friend, Tom Sonderman, runs. So I'm going to show you this quick little video on Superion, and I'm going to hand this off to Dr. Chris Ballance to tell you a bit more about it.

[Presentation]

We are here to make these machines mass market. So we're focused on building our ecosystem, expanding our ecosystem and delivering these machines at an access point, price point, power consumption point, manufacturable space consumption point that hopefully, every company, every government in the world can invest in because of the fact that we do what we say we're going to do at IonQ. And we tell you the next generation of systems will roll out and we'll go from 236 to 10,000 to 20,000 to 200,000 -- we will do that. And we have done it for the last 30 years. We've done it for the last 10 years as a private company, and we're doing the last 5 or 6 years as a public company.

So put your hands together for Dr. Chris Ballance, who's now going to tell us a lot more about this road map. Thank you for your time.

Good afternoon, and welcome to the 2026 IonQ Investor Day. We've got some incredibly exciting announcements to share with you today. You've heard from Niccolo about the Superion platform. I'm going to tell you how we came up with this, the core technologies inside of it, how this is changing the way we innovate in quantum computing and how this platform is going to scale from hundreds to thousands to millions of qubits.

IonQ was founded to put quantum computers into the hands of users. And over the last 10 years, we've executed on that mission, over 5 generations of quantum computers. And this has taught us a tremendous amount. We've learned how to work alongside customers to tailor solutions to generate real build value. We've learned about operational excellence and the good pain it's taken to build out these quantum computers, build out the supply chain, manufacturing and operational teams required to get quantum computers online and on the cloud.

There's now not an hour goes by without a job running on the cloud on the IonQ quantum computer fleet, and we've deployed quantum computers around the world. This has taught us a tremendous amount. These are hard-won lessons, unique insights that can't be learned any other way. And it's also taught us the challenges we still need to overcome to get to large-scale full tolerant quantum computers.

One, we need to radically simplify the platform. If we want to build out systems with orders of magnitude more qubits and deploy orders of magnitude more of them, which we definitely do, we need to radically simplify the platform. At the same time, we need to learn faster. We need to go from learning over your product cycles of years to product cycles of months. And thirdly, we need to demonstrate scale. We need to build platforms, which generation after generation build on each other to allow us to tackle problems that can't be tackled any other way. These are daunting challenges. And these are the challenges that the Superion platform is designed to tackle.

First, radical simplification. On the simple scales. We need to make our platform as manufacturable, as deployable as possible to get out to the true scale we want, both in number of systems deployed and the number of qubits in those systems. Natural qubits, ions and atoms have historically been controlled with lasers. This is a great technology for the 0 to 1 phase, getting the first hardware built in the lab. It's challenging to mass manufacture.

In the Superion platform, we replace these lasers for qubit control with electronics built into the chip, electronic qubit control. This allows us to take out this whole middle layer of laser control, directly connecting our classical control electronics to our quantum chip and allows us to build out these quantum chips in standard semiconductor ways. It also makes our systems more reliable. By stripping out this complexity, we can manufacture these things at scale. And eventually, we can drive up the reliability and the deployability.

But this electronic qubit control alone is not enough. In the same way as there's a tremendous amount of technology that goes from a single LED to an LED pixel array, a TV display. There's a tremendous amount of technology we've developed to go from single unit cells to unit cell arrays. This technology we called Quantum multiplexed I/O. We built out an incredible unique patent portfolio, IP around how we do this.

What this is allowing us to do is to take these unit cells of electronic qubit control. These unit cells we've achieved over 4 9s on a critical performance metric, 2 qubit gate fidelity and take these into scaled-out arrays of qubits. This is one of the core technologies between Superion and is what allows us to control dense arrays of qubits at scale.

And I'm pleased to say this is the picture of the first Superion 256 chip. We're already producing these devices at scale at SkyWater by the wafer. And in parallel, we're doing that, we're building these devices into quantum processes just like this that sit at the core of our Superion 256 quantum computers.

In parallel, we've been building out the physical footprint of these systems, the infrastructure that these quantum processes plug into. These are designed to be data center deployable to be mass manufacturable. Over the last year, we've gone from these basic technology demonstrations, implementing this electronic qubit control with incredibly high fidelity, designing prototype chips that derisk different aspects of fab, different aspects of the technology, building the first prototype systems, the first prototype chips.

Today, I'm pleased to announce that we now have on ion qubits in these first prototype systems. Over the coming months, as we prepare to enter into production, we're doing a tremendous amount of work to put these and make these things real. I'm proud to say that we expect to have the first systems starting deployments on customer sites in early 2027.

Over the last year, we've made some big strategic bets. We want to take the innovation cycles that are typical in the industry of years, and we're striving to turn these into months. We think this needs to happen to hit the pace of innovation we want to achieve. We've made big operational changes to how we run the company, how we structure, how we develop our technology, how we run our teams to allow us to achieve this. And this is paying off.

Over the last 6 months, we've built more ion-trapped chips, ion-trapped quantum processes than we have in the history of the company to date. The numbers speak for themselves. We are learning faster, we're iterating faster, and we're doing this over multiple generations in parallel. You're going to hear more details about this from Tom Sonderman next. To get out to true scale to millions of qubits deployed around millions of data centers, we need to build out a core platform that allows us to hit this scale that allows us to tackle applications that can't be tackled any other way and where each generation of the system teaches us about the next.

The Superion 256 is the foundation of the Superion family and contains the core technology that gets us all the way out to scale. In parallel with this, over the last 6 months, we published our walking Cat quantum error correction architecture. This is the most detailed full stack quantum computing architecture out there, and this carries on our theme of radical simplification. This paper shows from the hardware level to the quantum error correction level to the compiler and application level across the full stack, how we can significantly simplify everything involved in our quantum computers.

For example, going from using multiple different types of quantum error correction code to one unified code, simplifying our architecture, simplifying our compute fabric, allowing us to scale faster. This Walking Cat architecture and the compute fabric we show in the 256 system takes us to our 10,000 qubit system. The big addition to this is integrated cryogenic CMOS to implement our quantum multiplex diode. We already have the derisking of this CMOS built right now in SkyWater, and you can see some of the first wafers over in the display case.

To get to the next scaling node, we tile 2 dies together in 2.5D integration. And we carry on to hundreds of thousands of qubits by tiling out to more dies and by increasing the density of qubits on each die. This scaling pathway takes us from hundreds of qubits through thousand to millions and millions of qubits. This is a Superion product family. It's simple, it's scalable, it's mass manufacturable, and we're building this in our sovereign fab today.

At IonQ, we work across the full stack of quantum computing. This gives us value that's well worth more than the sum of its parts. We work from silicon all the way through to solutions, and we're world-class innovators at every level of the stack. We've talked about the quantum processes. We've talked about the walking cat architecture. In parallel with all of this, in the last 6 months, we've demonstrated customized quantum error correction codes running on real hardware with breakeven performance.

At the same time as this, we're innovating across the classical software layers, too. In the last couple of weeks, we put out the first mega quantum operation real-time decoding stack tailored for our 10,000 qubit device, showing we can run this using efficient classical computation in parallel with our quantum hardware. And at the same time as doing all of this, we're working across the quantum solution stack. You're going to hear more about this from Chad in half an hour or so.

But we've demonstrated time to solution speedups on pure-play quantum algorithms. We've demonstrated speedups of hybrid quantum computing stacks, tailoring quantum processes, GPUs and CPUs working together to be better than each part individually. Working across this full stack gives us a virtuous cycle of innovation. It allows us to learn from every different stage. It allows us to see around corners. We can tailor our quantum solutions to our hardware.

At the same time, we can tailor our hardware and our software to see around the corner because we know what's going to come in the next generation of quantum solutions. This gives us a virtuous flywheel of innovation that we can only get through working across the entire quantum compute stack. There's no better example of this than the result we've made public today.

For the last 30 years, Shor's algorithm has been the benchmark for scaled full-tolerant quantum computing. People have spent careers optimizing, understanding, finding the nuances in how you approach these problems. Today, we've made public the first full end-to-end compilation of Shor's algorithm. This is not an estimate. We know exactly how many qubits we need for this. We know exactly the software we need to run this. We have the full model implemented down to every single physical operation we need to play on the device.

In doing this, we've learned a tremendous amount. We've made improvements across the stack. For example, over a 30x improvement in our core error correction modules like CCZ factories. A result like this shows the IonQ full stack innovation flywheel playing out. Working at levels such as this, where we've made significant innovations across the stack shows on the benchmark problem like Shor's been so well studied, shows that we can make innovations across the entire stack of full tolerant quantum computing. This shows the IonQ machine in action, the organizational machine we've built. This shows the big strategic bets we've made over the last year paying off. This is the IonQ innovation flywheel in action.

Thank you. I'm now going to pass over to Tom Sonderman to tell you more about what we do.

Good afternoon, everyone. It's an exciting time to be in the quantum industry and certainly an exciting time to be at SkyWater. Our industry has a long history of working with brilliant physicists like Chris and turning their ideas into reality. And one thing that has happened recently with the partnership between SkyWater and IonQ is we've moved out of the physics demonstration realm to now manufacturing at scale in a highly developed operation that will allow us to not only deliver the speed required to get the cycles of learning necessary to drive the road map that Chris just showed, but also the scale.

Today, we have thousands, literally thousands of quantum wafers running in our fab, 1/3 of those are tied to IonQ. What that means is we're designing for manufacturability. When it's time to run at scale, we will be ready. Now the challenge in our industry has always been how do you get from the lab to the fab. And SkyWater was literally created to solve this problem. We came up with this concept called a technology foundry and a business model called Technology as a Service that allows us to create the bridge over what's known as the valley of death, where lots of great technologies start out in the lab, but they just never make it to the fab. And that's because in a lab, you have ultimate degrees of freedom. You can experiment, try many different aspects in terms of what you want to accomplish. In a fab, it's a little bit more restricted.

So SkyWater was literally created to solve that problem. Instead of mimicking other foundries, today, there's really only one conventional foundry, that's TSMC and the specialty foundries, which were foundries that basically couldn't keep up with TSMC. So they chose to make other products. But again, products that required a lot of standardization, we took the opposite approach. We embraced customization. We embraced the idea that innovators needed an environment where they could have their ideas not only created in a volume environment but also run at scale.

So today, with the speed, accuracy and agility that we bring together, coupled with front-end manufacturing and advanced packaging, we now have a capability that doesn't exist anywhere in the world, and we've been doing it for over 10 years. Today, SkyWater is the capital THE, the only Quantum foundry. There are others that are talking about it, but recognize that what we put in place has been part of a strategy to not only create the environment but create the security that protects those innovations because our focus around Quantum isn't just as a commercial business, but also it's tied to national security.

Quantum is sovereign infrastructure, and it's absolutely critical that SkyWater, IonQ and the Quantum Foundry model that we created protects the IP for our customers and more importantly, protects our national security for things tied to the defense of our country. Now as Chris said, we have delivered exceptional performance since we began our partnership.

And it's all about, again, speed and scale, the speed in terms of the cycles of learning that we deliver, how fast we do them, but also the scale. Those thousands of wafers allow you to do things in parallel. It allows you to do rapid learning. And what that will continue to do is move the projections that Chris has provided to the left. That is our goal to continue to move the road map to the left. And we believe that we are well on our way to doing that.

So in the end, it's all about speed, agility and expertise. SkyWater has created something unique in our business model. And again, I'll point out our first customer as part of our Technology as a Service was a quantum company. So we literally have decades, a decade plus of experience doing this type of fabrication. And when we couple that with our advanced packaging solutions, the ability to scale in a post-Moore's Law realm is right in front of us. We have the capabilities in the front end in Minnesota, the capabilities in Florida.

And as Chris has alluded to, it's all about scaling and tiling, which is heterogeneous integration. So we are ready to execute. The other thing is that SkyWater is a Quantum foundry. We have 9 as of the announcement today with Qolab, 9 different Quantum customers that are all working in SkyWater. So we aren't just driving IonQ's road map. We're literally creating an industry, a quantum foundry industry that will be foundational through the rest of this decade and beyond. So when you think about SkyWater, you think about IonQ, just remember that all roads for Quantum lead through SkyWater.

With that, I'll turn it over to Jordan for the next portion of our presentation.

Good afternoon. Thank you, Tom. On behalf of all of IonQ, I know we are so thrilled to have you and the SkyWater team joining our ranks. The advancements you heard today from Chris and from Tom in our quantum computing side have implications not just for quantum computing, but also for quantum security. And today, we are seeing the convergence of 2 trends. The first is that the analysis of how many qubits you need to reach Q-Day or the day when a quantum computer will pose a threat to our critical infrastructure is coming down precipitously.

Today, we announced 19,397 qubits is our requirement at IonQ. And it's this advantage of quantum hardware and quantum software working together that are bringing that QD threat closer than ever before. At the same time, we're seeing another trend, which is that governments are pulling in their migration requirements for companies and organizations and leaders worldwide to be much sooner than originally expected.

Most recently, in June, the U.S. executive order pulled in the migration time line for the U.S. from 2035 to 2030. The result is that leaders today need to transition to quantum security now. And if they're not transitioning now, they're already too late. There's already risk today with what we call Harvest Now, Decrypt Later, where adversaries are collecting encrypted data with the hope of decrypting that at a future date with quantum computers.

So today, we already have exposure, but we also have the looming threat of Q-Day that is coming sooner and sooner. So today truly is the time to transition. The good news is that IonQ is providing that full stack quantum security platform or as Niccolo called it, we're the safe breakers and the safe makers. How do we do this today?

Well, we offer customers Quantum Security Posture Management or QSPM, which gives them visibility into their full infrastructure to determine where they are vulnerable to potential quantum attacks. Then we offer a CNSA 2.0 and NIST compliant solution that allows you to continue to update your infrastructure to be quantum secure, whether that be using PQC or post-quantum cryptography and injecting that throughout your infrastructure or doing quantum key distribution, a physical solution that can span your entire network, but especially where it matters the most.

And that uses the same core underlying quantum physics, quantum mechanics to protect your data sets from potential ease dropping. We then help you to orchestrate and manage those keys and evolve your solution architecture over time to what will be a changing standard of quantum security.

We are not just building this technology, but deploying it today with customers. I'm so proud to announce today that we have signed a major agreement with Congruity360 for the enterprise rollout of quantum security in the U.S. To our knowledge, this is the largest deal of its kind in the United States, bringing quantum security to leading enterprises. But it's not just enterprises. It's leading health care systems, financial institutions, government organizations and telcos.

Take, for example, Singtel and SK Broadband, where we've rolled out our Quantum security solutions. This makes IonQ not just the most robust platform, but also the most deployed platform when it comes to commercializing quantum security and providing a solution to the looming threat of Q-Day and HNDL.

All of this is just one example of IonQ's quantum platform at work. And it truly is a platform of different quantum technologies that converge to provide solutions that otherwise you would never have available. In the case of quantum security, we understand the threats better than our competitors because we also have quantum computing as part of our business.

Meanwhile, in the case of quantum computing, we offer the solution to the problem that we are also creating with having larger and more powerful quantum computers. And so this is a true example of IonQ's quantum platform coming together. And you see this across the company in different areas as our technologies converge. Take, for example, what we're doing in quantum networking. We previously announced that we were the first company in an enterprise setting to interconnect 2 different quantum computers together, 2 IonQ trapped ion systems with our partners at Air Force Research Lab, or AFRL.

We then have announced that we are providing AFRL with a quantum network for entanglement distribution that allows us to experiment with different modalities of quantum computers on the same network and different quantum devices that can be connected together.

Now we are working on the next step, which is to take our networks, which are fiber-based today and leverage IonQ's optical communication technology to get off the fiber, in other words, to operate in free space. That's interesting because it unlocks the capability of quantum connections that are airborne and in the future, space-based. This is just one way in which we're leveraging IonQ's quantum platform to expand our quantum computing technology. But we're also seeing this happen the other way around. We're using our quantum computers to advance technology throughout the company.

Today, for the first time, I'm able to share that we are using our quantum computers with our remote sensing part of the organization as well. IonQ captures on a daily basis, data from across the globe, synthetic aperture radar data or SAR data. And when we look at those images, we can use classical conventions to try to understand what's happening in those -- in the data, but we can also use quantum computers to do an even better job of that.

Today, you're seeing what is the first example to our knowledge of a hybrid quantum classical workflow with SAR data, where we're taking IonQ's quantum computer, we're putting it in the loop, and we're processing data from our SAR platform. You'll see in the orange circle here, an image of Miramar Air Base, where there's a structure changing between the first 2 images. The ground truth represents the actual change between the 2 images, the insight that you're looking for as an analyst. The last 3 images represent different models that are trying to assess that data.

The first is run on an IonQ quantum computer, and you can tell it's the best because it identifies the structural change. It looks closest to the ground truth image, and it doesn't have all the noise and the fuzziness of the classical models. This model is working better than classical and enables us to have a level of insight that no other SAR platform has today. Meanwhile, we're the only quantum computing company that has this great level of access to SAR data to run our quantum computers on.

Every day, we're looking at what technology is next for IonQ's Quantum platform and what continues to distinguish ourselves as a company. Take, for example, the quantum sensing technology that we brought to IonQ. We produce, for example, the world's most accurate commercial clocks at IonQ. These are quantum optical clocks. We also produce time transfer devices, atomic gravimeters that can measure the specific gravity at any point on the earth, gyroscopes that measure inertial movement.

And so we have a precise level of sensing that uses the same underlying quantum physics to build new devices and new capabilities, especially in the field of positioning, navigation and timing or PNT, that is relevant in many enterprise and defense use cases. This technology is not just available at IonQ, it's world-leading. Our quantum clocks are 1,000x more accurate than the classical equivalent, best-in-class classical equivalent. And they lead the entire field in NIST ensemble of clocks that they're the best performing clocks that NIST has available today in this form factor. We are seeing the deployment of this technology as well. It's not just in a lab somewhere. We're able to deploy our quantum sensors at sea, in space on the X-37B space plane, on land, in the air, et cetera. And so we're truly deploying our technology everywhere. Don't just take it from IonQ, you're seeing this from our partners across the entire quantum platform.

Our U.S. government customers are validating our technologies, whether they be our quantum computing platform with DARPA QBI, our Quantum sensors, most recently, the $58 million agreement for the It's About Time program, but also our networks and our space technology, a recent contract with NRO as well on the space side. What this validates is that IonQ is not only leading in each individual technology, which we are, but also that these technologies are converging, are coming together to offer unique solutions that only IonQ can deliver. That is the power of a platform that is stronger together. Thank you.

Thank you very, very much, Jordan. I spent several years of my career being a Wall Street analyst. And I remember the things that I used to look at. I used to look at the company's technology, does it have a road map? Does it have the investment dollars? Does it have staying power? Does it have positioning? But also, I used to look at the management team. Do I believe, do I trust they can execute? Do they have a track record of execution? And I hope what you saw here today was a management team that has that.

When I joined Niccolo in this mission to help make this platform company into the pacesetter that he's made it, I take no credit for that. And also how much more we can accomplish here together as a team, he's pulled together an amazing team. And I'm hoping that through the day, the rest of the day, you'll see more and more of that. And I think the investor confidence that you will see will inspire you as well. When I joined the Board of this company and some of the Board members are here, we used to be a one-product company.

We were in quantum computing. It's a wonderful market. It's not my TAM number, but $148 billion TAM according to third parties. So every other quantum company that you are looking at virtually every other quantum company is in that TAM. It's an attractive TAM. We are already the pacesetter. You've heard from Chris Ballance earlier about how we continue to innovate. We talked about the 256K chip and the 10K chip, and it doesn't stop there.

So we're happy to be in that market. We are the pacesetter in that market. We don't intend to stop. We spent $1 billion roughly on Oxford Ionics and another $2 billion almost on SkyWater. So we've put in more than many governments have put into Quantum to actually make it happen and make it real. I'm thrilled to say also, though, we are in many other TAMs. And I think you heard that from the speakers today. In quantum networking, which Jordan just talked about, we had a wonderful customer in Air Force Research Laboratory. They benefited from us in terms of what we created for them, and then we learned from them, as you said, how to network 2 machines together, either next to each other or a distance.

We also realized that as a responsible company, if we are creating machines that are so powerful that they go beyond what humanity has ever seen before. And by the way, when I joined, I never thought we'd be here this fast. But if you're creating machines that can, as you heard, break encryption, you have to be responsible. You have to actually make sure that you're also providing security. So Niccolo and his vision of creating the mission of the company and the vision for the company as you saw it when he became CEO beginning of last year, decided it was important to have quantum, quantum cybersecurity, very different game than any cybersecurity you've seen so far, protecting against a quantum computer.

We got into sensing. Certain government customers value the fact that you have sensing that doesn't get jammed. You've all heard about GPS getting jammed. You've all heard about how planes are walked off and land in the wrong place, bad things happen. That technology has become available broadly and is being used in conflicts more and more. So having things that are very accurate and precise, as you just heard, but also that cannot be jammed, we wanted to bring that to the table, too. And then as I look at kind of the most important part that we just announced recently, which is making it all secure, manufacturing it in a way where the quantum products we create and over time, we'll do more and more with SkyWater, but computing to begin with, make it secure from design to engineering to manufacturing to delivery to the customer.

They need to be able to trust it. And that's what a trusted fab brings for us. That's why it's worth having Tom and his entire team who've done this over years and years and have done it well and know how to scale, help us build the most powerful devices in every one of these categories. I haven't put a TAM up there for SkyWater. It's new. It's a huge TAM. You see -- and you heard Tom describe it, the only quantum foundry at scale in the world, in the world. And so we're glad we use it. We're glad that others in the industry are using it as well. We don't talk about it much, but we sell our components to other quantum computing companies that depend on us already to help them make what they're trying to make. In addition, we also manufacture some of what they need in the SkyWater Quantum foundry.

So we intend to keep doing that. The adversary for us is not another company. It's a nation state probably or more nation states, right, protecting against what quantum can do, whether good and bad. As I think about the track record, and I remember I said a real important part is does the team execute? Do they say something and then do it? Do they beat what they said they would do? And this company has a track record of doing that. I joined when it was -- had $2 million in revenue and one machine and 30 people and a dream. And over the years that you see here through 2024, you can see the results for yourselves. It's not big numbers yet, right? But it's actually demonstrating customers are buying what this company is creating.

Last year, when Niccolo became CEO, we accelerated that. Yes, we acquired some companies. They brought some revenue. But as we've said every earnings call, we keep investing in the computing as well and make sure that stays our fastest-growing engine, and we're thrilled that it is still driving a lot of our growth, and we're thrilled that we have actually a portfolio of things that we can sell to a customer. And now we have SkyWater.

This morning, we issued guidance for what we think SkyWater will add to our P&L for the rest of this year. It's a stub year. We got approval on July 31, a couple of days before earnings. And so we were thrilled and it happened in the time line we said it would happen. We were thrilled to have that. We did not provide guidance at that time on our earnings call because it was just too recent. Today, we gave you some more color on it, and I'll share some additional color now.

The point is end-to-end quantum everything. Think of this company as the one-stop shop for quantum, not just computing. Yes, computing, of course. But when we talk to customers, sometimes they start with, I need your security first. And more and more, I'm hearing that. More and more, Niccolo is hearing that. More and more Chad in the back is hearing that. And you'll hear from some customers that talk about that, too. But we have a strategy to land and expand.

So it doesn't matter where the discussion starts. It's a question of how many of your products they use. When we think about quantum computing, I think of 2 things. One is the computing power. I came from Arm. Arm makes efficient processors and computers. We are increasing from the Aria to the Superion 10K, our qubit system count, 400x. This is not taking it out to the 2 million machine one day, right? That's further out. I told my team to stop.

Let's go with a couple of years of actuals of what we've done. You can see those there, 3 years of machines that we've put into the market and 2 that are about to come into the market. And on the right-hand side, equally important, we can deliver the lowest cost per qubit. So the most amount of compute power at the lowest power. Anyone remember Moore's Law? This is Quantum's Moore's Law. We also have machines that don't require a grid. It's not on the chart. It plugs into the wall.

So you don't have to buy a nuclear power reactor to run the machine. We are privileged and proud now to have SkyWater and IonQ come together as one company called IonQ.

Welcome to Tom and the entire team, some of you are in the back there, thrilled to have you here. This team now can go end-to-end secure, trusted fab. And SkyWater is the only trusted fab of scale in the United States. Others will follow. There have been announcements, others will do it, too. Those others have said they'll get it done by 2029, perhaps, maybe a year earlier, I don't know. But I think where we are and our goal is just to keep running faster and faster and faster and have the capital to do that.

We think we continue to pace set the market, as I said at the beginning. We will give you color below those 2 categories. We will provide you on the left-hand side, as you can see, what we're doing in quantum hardware and in Quantum services. What's on the left in quantum hardware is the computers we sell on-premises to a customer, and we're selling more and more of those. I'm seeing those happen in hybrid deployments, an AI factory with a QPU next to it.

On the right is quantum services. What's in there? The applications, the things that run on the quantum computers in there as well as QCaaS. So if someone doesn't want a machine, they just want to have a cloud access to the machine, we do that too. And that's actually growing faster than the computing business even and is even more profitable than many of the things we do. I'm thrilled to have that business. I'm thrilled to see the growth that's happening in that business.

To the right, we'll provide some color on SkyWater going forward in that 2 buckets that you see there. CMOS semiconductor foundry, think of what SkyWater used to call its Texas foundry. That is principally the Texas foundry. And the Quantum foundry and advanced technologies is where we manufacture our quantum computing devices and the chips that you saw that are around the room there as well as some of the most advanced things that only SkyWater can do for government customers over time that are clear to work on secure projects, things that you don't have a clearance to now, things that go boom and other things that I'm not going to get into.

This gives you a sense of the things that are in there. I'm not going to break out this level of granularity on our earnings calls. But I want you to have a slide that shows you where is your computer, where is your QCaaS and on the right, where is the Quantum Foundry, where is the advanced packaging that SkyWater used to talk about.

I'm simplifying the number of categories that SkyWater had to a few. Just as on the left, I've given you color in terms of how we're doing internationally, commercially, et cetera, et cetera. We might do that on the SkyWater side. It's early days still. But the point is to have a limited number of things that you all can follow that make sense to you and you can hold us accountable for.

It's also important for us to demonstrate what happens when you take the consensus numbers for SkyWater, which is on the left, the $608 million -- that is the consensus that existed on July 30, the day before the closing. And then on our second quarter earnings call, for those of you who listened, I said of their revenue, $120 million comes from us. You see that on that left-hand chart.

The bar in the middle is the results that SkyWater already reported for the first quarter and the second quarter and frankly, an estimate for July still. They did not report their third quarter clearly. So $368 from the $608 million is what they've delivered by our estimation. These are unaudited results, so take them with that appropriate caveat.

On the right, therefore, is what's left. So for the 5 months that we will have owned them this year, they'll have delivered $240 million of revenue to us, of which, by the way, $70 million is from us, right? So I have to eliminate that at the appropriate level. I think you all understand that. But the bridge was important for you to see that, again, they have not guided for the year, so I used Street consensus. Results delivered what we will see in our P&L.

When I take that $240 million and then I add it to the guidance we've already given you for in IonQ previously, the $280 million to $290 million range, which we reaffirmed this morning -- and as you know, there's color we gave under that around organic growth and other things like that when we had our Q2 call. You can refer back to the Q2 transcript. I'm not reaffirming all the granular details, of course. But in the press release this morning, we affirmed the $280 million to $290 million plus the $240 million from SkyWater that I just showed you, minus the $70 million elimination of revenue because we now own them, gives you the $450 million to $460 million range.

I want to make sure that you had that granularity a month into basically our having gone through it. There are still some purchase price types of adjustments we'll be doing, some noise level things. But as I look at the business and I look at this, this gives us a solid foundation for all of the things we have to do in our strategy and the financials that, well, SkyWater's delivering in terms of revenue and we're delivering legacy on -- I don't want to call it legacy. It's actually the future. IonQ is pretty amazing, both sides of it. And we're happy to have them as part of the fold.

Over time, we will focus on other things like EBITDA, and we'll give you more color on EBITDA. One month in, I can't give you that level of color. When we report earnings and the auditors have gone through all the numbers, we'll be sharing more on EBITDA for you.

We will continue to invest. Why? Because we are the pacesetter in quantum. We are the pacesetter. The industry is moving. We're happy they're moving. We need the industry to emerge. One company does not an industry make. So we want the others to also succeed in their endeavors. They're still in that first TAM I was talking about, remember? We're the only one roof provider. Some have called it Amazon of this. I'd like to think of it as Cisco of quantum. I worked at Cisco. It's like put the things together that work together.

We are also addressing multiple markets, important for you to remember. As you think about us, you can pigeonhole us into a one product company, but you'll be missing a big chunk of actually what we're delivering. The value to customers sometimes can be security. And security can open the door to a conversation that leads to compute use cases. Not everybody will buy sensing, mind you. That's a national security customer probably. But we're catering for everyone.

We are also -- and I put it here in products that -- some of which have really attractive margins. And our goal as a company and Niccolo and I as leaders is to ensure that, over time, we drive margins, EBITDA margins higher. Gross margin, some of you asked me about, and gross margin sometimes doesn't always capture that. So we talk about revenue and EBITDA margin because that captures R&D and a bunch of other things. We spend more on R&D probably than most of our peers. I won't say combined but most of our peers.

We're also delivering quantum solutions, and you heard that a little bit from Jordan as well. Over the last couple of quarters and earnings calls, both Niccolo and I have talked to you about, we don't just sell products. We actually make products work together and sell a solution. A Vector Atomic clock on a space platform is one of those solutions. Using quantum computing to improve the imaging from a SAR satellite is another one. And there are many more. So the proof points of the strategy that we had are now starting to flow in announcements. And the companies that I followed over the years and worked over the years turned us into revenues and customers over time.

We do have the strongest balance sheet. Our intent is to keep the balance sheet, the strongest balance sheet required for success, not too strong, certainly not too weak. I told you, like we spend most -- more on quantum computing alone than entire governments. Think about our entire portfolio. We'll be investing in all of that.

So Niccolo and I and the leadership team and the Board, we'll make sure that we have the ability to fund our innovation for many years to come. Like I want to make sure that we have cash flow available to us to be able to invest for multiple years, so we don't have to worry about that. That's how you make long-term strategy come alive and deliver short-term results.

And with our partners at SkyWater, we now have the only trusted fab and the only quantum fab in the world. Others are following our strategy, and they will follow us. We won't stop running. We're going to be the pacesetter. We have been the pacesetter. And the management team that you have, and you saw here, are very focused on that.

In each category, everything that they talked about, they intend to keep investing, failing fast if it's not working. Like having SkyWater allows us to do multiple prototypes at one time. Others can't do that. So we find out which one works and which one doesn't much more quickly.

So a number of things come together under this platform. I'm not going to say that it's all easy. Lots of execution is required, technology innovation at the frontier of technology is not easy. But if you're asking yourself what comes after AI, quantum comes after AI. If you're thinking can quantum work with AI, we're making it happen today in hybrid solutions.

So the thing that was -- Niccolo said this at the beginning. The thing that was out in the 2030s or beyond in people's minds is here, almost as close to your nose, not quite, almost. So we will keep investing to make sure this works. I remember studying quantum mechanics in engineering school, and like I'm not sure I understood everything, and I was in good company. Even Einstein said he couldn't understand everything. It's okay. I understand how time space curvature happens, that gravity exists. Elon Musk has built a rocket to overcome gravity. We're building machines that use quantum mechanics. And you don't have to be a quantum physicist to invest in a quantum company.

We wanted to have some Q&A. I probably went a few minutes over, but if my colleagues can join me, that would be great. Now if we run out of time, during the bell ringing ceremony, if you still have questions, I'll be available to answer detailed questions as well.

All right. Okay. I think this is the first victim.

Do I let you guys sit down or should I just shoot?

Charge.

John McPeake at Rosenblatt Securities. At what number of physical qubits does photonic quantum interconnect become important in your road map?

I will take that. So in our core compute road map, we can scale out well beyond millions of qubits. This is looking on a 5-year view. So right now, we don't believe we need photonic interconnects in the near term for that. The customers that like photonic interconnects are typically not the customers who just want one big computer. They're doing things more than just that. They're connecting quantum computers with quantum networks. They're trying to work out how they posh themselves so they can build out a fleet of quantum computers and then work out how to expand this unto other problems. Right now, on the core compute road map, we don't need photonic networking. It's a tremendously valuable thing to sell alongside our core quantum compute products.

Nehal Chokshi from Northland Capital Markets. Probably for Thomas, maybe for Chris, but the reduction in cycle time from 8 months to 2 months is absolutely astounding. I would love to get more insight on how you guys have achieved that. And I'm thinking one element maybe, which lithography node, IonQ is working SkyWater with and what range of lithography nodes of SkyWater work with as well.

So perhaps, I will start to tell you what I've seen of SkyWater, and then Thomas can say how he actually makes this happen. So to me, a lot of this is the culture, how the business works, semiconductors historically are low margin, incredibly high volume. I myself have spent a lot of time talking to foundries trying to explain that actually if they make fewer parts, they make a lot more money on them, you can multiply the numbers together and actually get a good value. That's a really difficult thing to get into the DNA of fab.

What I saw, and I'll get technical briefly, back tail end of last year, it makes an example of this. We had 2 different foundries we're working with at the time, a major industrial foundry and SkyWater. The major industrial foundry is pushing out the delivery time lines for some hardware by a couple of months, 6 months out since they had challenges with supply chain getting in particular chemicals to put in particular machines to deposit particular layers.

SkyWater had the same challenge. We spoke to the SkyWater team on a Tuesday, and they said our supplier is quoting us a month, that's nonsense. In fact, they didn't say nonsense. They used a slightly fruitier word. But their passion was clear.

By 2 days after that, by the Thursday, they had found out a supplier in Korea had one in stock and worked out how to horse trade is what was that. And by Sunday, this was installed in a machine yielding results from us. Our other partner at the time was still giving us the 2-month slip on a 6-month time line. So to me, this is just an indicator of the cultural differences at play, the amount of hustle and the appreciation that innovation cycles at learning speeds really are the critical thing when you're trying to innovate at the frontier of technology like this.

Well said, Chris. I'll just add, and I think that's a very astute question. We do this on 90-nanometer technology. You hear others talk about, oh, you need 28 and below and some people even talking about 2 nanometer. That's ridiculous. The kinds of fabrication that we're doing in a 200-millimeter fab, very mature environment is very nicely adaptable to the kinds of innovations that Chris has. So I think the cost per qubit you will see from SkyWater and IonQ continue to be industry leading.

And Chris and I, when we did the Oxford acquisition, will remember this, but there were other foundries that were trying to be quantum foundries also, and we talked to one of them. I won't name them. And they couldn't move fast enough. They didn't quite understand what we needed. They didn't have a learning curve on quantum, hadn't done Quantum before. They asked -- they told us if -- they were blown away by the volume numbers we were talking about into the future years, and they needed permission from the mother ship. And they just moved too slowly. So one is like rapid prototyping and getting things done in months. The other is no one else can really match it right now.

Great. Right here. I'm not sure if my mic's on yet. Can you hear me okay?

We can hear you.

Gary Mobley with StoneX. I had a couple of questions for Tom if I can. So I think you mentioned in your presentation, you have 9 quantum compute companies. I presume one of them is IonQ. So from those other 8, what have the conversations been like with respect to their comfort in dealing with you as a foundry partner to making sure that you won't essentially handicap their road map? And how much of a time lead do you think you have vis-a-vis IBM Anderon or GlobalFoundries QTS before they hit their milestones and become a real alternative to SkyWater?

Yes. So the whole quantum foundry model is really based on the foundry model, which is you manufacture parts for other companies and protecting IP is foundational to that. So the way we treat any customer as we compartmentalize the information, we do not cross-contaminate. And all of our customers, Qolab, Alan's in the audience here, should be 100% confident that their road map will not be impeded by the needs of IonQ. The ability for us to move fast with IonQ, who is our largest quantum company, allows those capabilities to be populated out across our other quantum customers.

So it's very much what's the rising tide lifts all boats. And we are creating a quantum industry. We're going to move very fast with IonQ. But all of our customers should have confidence that they're going to be able to take advantage of the capabilities we put in place.

Regarding the competition, you never talked about the competition, but I will because, frankly, it's a little bit -- it's marketing hype, frankly. The ability to have a quantum foundry was exactly why SkyWater was created because the other foundry models really weren't creating the innovation capability that many of the companies we wanted to work with were talking about.

So Anderon is out there. They bought HRL. But again, IBM sold their microelectronics business to GlobalFoundries back in 2015. So if they want to get back into it, so be it. GlobalFoundries, who I used to work at, but they have capabilities, but they are not an innovation engine. They are a scaled specialty foundry. They love standardization. We embrace customization. So it's just a different model. We're going to run -- so TSMC started the semiconductor foundry business. They're still the leader. We started the quantum foundry business, and we will be the leader, no questions asked. So we're going to run very fast, and I hope they can stay in step.

Okay. Whoever's got the microphone goes next.

I have 2 simple questions. I have no doubt of scale-up and the fabrications. But I'm just wondering if you guys have scale-out road map for the photonic interconnect Phase 3 and 4. From understanding, photonic interconnect Phase 4 is really, really complicated to make it. And also, the other thing, so as we have the fabrications and short-term cycles, I believe we need to -- you need to have capabilities of pore-fill manufacturing capabilities. So do you have any plan or kind of the capabilities prospective?

Do I take that? So I mean the capabilities we have between our Minnesota and Florida operations have more than enough capacity to deliver what we believe is required from Chris and his team on the compute side as well as Jordan and his team on the broader quantum platform side.

So again, these don't require the same scale as like a smartphone or even AI data centers, but they require lots of iterations. Eventually, products will go into volume manufacturing, and we will continue to innovate in parallel. When I was at AMD competing against Intel, we were always running 3 nodes in parallel. You heard today, we're running 5 devices in parallel. The ability to move with faster iteration just closes the gap between ideation and commercialization. And it's all about time to market. And I keep going back to that's why we created the Technology-as-a-Service model, to innovate at scale and to create a model where companies could innovate. And it was great to see both Inder and Chris say we looked at all the other foundries, and we chose SkyWater because it validates the model.

There's a section on quantum foundry and networking actually when we're done here. So you'll get more today shortly.

And we intend to keep investing, obviously, in the quantum foundry. Yes, Mihir will talk about it a lot more. But from a capital standpoint, we bring capital to the table that SkyWater needs to grow its quantum foundry. The -- again, I don't think of the others as competitors that are in that foundry. They're part of the industry and the ecosystem that's going to exist in the future. They already are customers in some ways. And this is about accelerating our road map and our learning curve helps, frankly, the other players as well.

Quinn Bolton with Needham. One for Chris and then one for Tom. Chris, you mentioned you're starting to load the 256 QPU with Ion. So I guess can you talk about when will you have enough data to talk about the fidelity, median gate fidelity across the 256 qubits in that QPU? How confident are you in hitting the fidelity? You talked about crosstalk being a technology that you've developed, some technology that reduce crosstalks. Maybe expand on that.

And then for Tom, just can you just discuss plans for Fab 25? Does that stay sort of in quasi-independent CMOS high-volume fab for non-quantum customers? Or do you see a time where you might start to run some of the quantum wafers at Fab 25?

Okay. There's a lot of questions there, so I will try and answer them in order.

I'll take the last.

The net-net of this is that a tremendous amount of the work we've been doing over the last 12 months and that SkyWater has been assisting us with is building out lots of very fast turn prototype devices to derisk each one of these different elements faster. This is what we call short loops. We want to learn each individual element. We want to decouple them. The way we accelerate our road map is by working across many different aspects of the technology in parallel, then integrating more and more of this. And in fact, over to the side here, you can see a lot of the different short loops that derisk different parts of the technology.

So the result of all of that is that we feel very confident in achieving the ultimate integrated performance on these systems. A lot of the work now we're doing is on that integration and iteration. It's about building out and validating a production scale for these devices. And that's the work that's going on right now as we lead up to production and the start of deployment of the first systems in early '27.

I'll hand over to Tom for that.

Yes. So think of Fab 25 as part of our foundry ecosystem, and that gives us significant purchasing power, supply chain optimization. In many cases, we synergize between the different sites. And it's what Inder showed, is our CMOS semiconductor foundry business, which we will continue to move forward. The complement of having a secure manufacturing facility and advanced packaging facility is important because that allows us to focus on the innovation side and also have a place where customers can migrate out of the Minnesota fab into, say, a Texas fab.

But from a quantum perspective, think of that being Minnesota and Florida. It's very conducive to the types of work that we're doing. And -- but it's -- semiconductor manufacturing is an expensive business and having the economies of scale that you get by having a buying facility as a nice balance to that. And again, it's all about lowering the cost per qubit.

And for us, it's a great -- I mean, we have not had to go into the Texas fab to do quantum, but there's optionality that one gets. When Niccolo and I were looking at the acquisitions, this is one of the things that went into the calculus of like do we need to have more than one fab. Right now, it's being done in Minnesota. And Florida may be the next logical area to do the advanced packaging. I think Fab 25, to your question, is like optionality that if you needed to use it for something else, you could. Of course, you'd have to retool it. So far, we have not.

Craig Ellis, B. Riley Securities. I want to start with a question for Chris and then jump to one for Jordan. So Chris, as we look out to the end of the decade at your road map and we see the scale-up to billions of qubits, tiling gets really important. Can you help us understand the technology, competencies you'll need to have to execute? In that part of the road map, where are we today and what we need to accomplish?

And then, Jordan, you wrapped up by stating that in the technology areas you focused on, there's more and more interest across those 3 areas. Tell us more about how customers are engaging? Are you seeing it across geos? Is it more as a result of executive orders that hit in the U.S.? Just more insight on that would be helpful.

So the question I heard was on tiling. What are the technologies needed to do that? How do we derisk that? So first of all, I should say, and this is something, I mean, is a point of pride. It's not a quantum problem. It's an integration problem. When we look at what we need to do to tile these devices together, it's about die bonding with tight enough tolerances and then designing the transfer, which is an electrostatic phenomena, right? You're pushing, physically pushing the qubits over the junction, designing the tolerances and like that.

Where are at now? We have done thorough studies of industry standard tolerances, and we're comfortably within that. So we're not pushing the limit of any one thing we need to do. The challenge here is a classic technology system integration problem. How do we push up yields? How do we make the packaging boring? And how do we look at the value-added steps and order them such that we don't add a lot of value to the hardware before we go into low yield step. These are classic semiconductor industry problems. And these are the kind of things that SkyWater has put a lot of focus and understanding how to do.

So the stuff that worries me on that is not any one technology risk. It's operational excellence. How do we properly understand the risks? And how do we execute against doing enough in parallel to make that boring? Right now, that is not a particularly exciting problem for us, and that, again, is high praise for me.

Jordan?

So Craig, I would say, the story of IonQ is that we are greater than the sum of our parts. And that's really what you're seeing happen on stage today, in part, through the conversations between Chris and Tom, between SkyWater and IonQ but also across the platform. And you're right. Customers are approaching us and asking not just for one part of the platform but for integrated solutions. And that is virtually global in every country around the globe and virtually in every area, every industry that we're seeing customers come to us asking about integrated technologies and solutions.

Take for example, just on the global side, we offer an incredibly compelling set of solutions to any sovereign nation that might want everything from advanced PNT to operate in GPS-denied environments, increasingly important in today's geopolitical landscape, to the computing power that will change their economy for better in the future. And so sovereigns are interested, of course, in all forms of technology across quantum, but also in every industry, you have enterprises that are coming to us asking for joint solutions.

So financial companies, for example, any financial services firm, we're in the heart -- financial heart here in New York. We are having conversations about financial applications of quantum computing. And then we're hopping over to the security team to talk to the CISO about quantum security; or in oil and gas, we're talking about quantum chemistry solutions and also using PNT for finding new oil wells and at the same time, working on quantum security as well for critical infrastructure that oil and gas has.

So very frequently, we're seeing that IonQ is differentiated from any other company and that we offer the most robust set of quantum technologies in the world, and people come to us looking for joint solutions across that stack.

So we probably have time for about one more question.

Vijay at Mizuho. Just a quick question. You had made an acquisition of Nexus Photonics. Just wondering how that fits into the IonQ and SkyWater road map.

And also for Inder, I guess, how do you look at the 256 qubits systems? What are the pricing on that? And if you can give us some idea on how to look at fiscal '27, I guess, between the core IonQ and the SkyWater side.

Let's have Mihir answer the Nexus question because he's the next presenter, and he's going to answer a little more of these questions in depth. That was his baby.

All right. Can you -- okay. Mic is active. So the Nexus Photonics acquisition is really another 1 of these 1 plus 1 equals 30 stories with SkyWater, right? SkyWater has the ability to manufacture and Nexus brings a proven pedigree intellectual property capability for design and integration of integrated photonic solutions.

So combining them together means we can take, in particular, photonics solutions, which are required for most -- many modalities of quantum computing, quantum network and quantum sensing, whether it's ions, atoms, photonics, networks, sensors and take the complexity of hand-assembled systems and integrate those components on a chip. And I'll have a little bit more to say about that in my presentation as well.

So Nexus really allows us -- where it has the first impact for us is really in our quantum sensing devices. Already, we're manufacturing more and more of these clocks and inertial navigation sensors. Right now, a lot of these components are discrete. We're packaging them basically at the level that you can package these discrete elements, but there are still wires and things coming out. They're still hand assembled. Taking the most complex parts and putting them on a chip is what Nexus allows us to do.

And we have an example of one such photonic integrated circuit for our sensing unit. That's in the showcase over here as well.

So on pricing, obviously, I'm not going to go into a lot of detail, Vijay, in terms of pricing, but you could think about it as a candy jar of opportunity for us, right? We are lowering our own cost, starting with the lowest cost to begin with. And over the next few years, we need to make strategic decisions about how much of that margin we're going to keep and share with our customers, right?

At the moment, by the time that Niccolo and I or any of the focus on the floor or around the room get to a customer, it's not a competitive situation most of the time. They have picked their modality already. They're going to choose this or this. It starts to become like a value story. What can you do for me? Use cases. And we forward deploy engineers, forward deploy app developers to go from their cost side of their equation to the revenue side of their equation. When you do that, it stops being a price discussion.

We also meet the customer where they are. If they don't want to buy the computer and the entire computer, we sell them QCaaS if that's what they want. There's things you can do with one that you can't do with the other.

So I know I'm avoiding your question. There is no other company with a [ 256 K ] chip out there, period. For sure, there's nothing known with 10,000. And the number of logical qubits that will be delivered because of the ion trap technology, this gives us an inherent advantage. So as we map out our next 5 years and think about investing for the next 5 years, absolutely. We're laser focused on ensuring that we deliver total cost of ownership advantage for the customer and then margin expansion for us. Did I successfully dodge that pricing question?

All right. So Inder will be around during the bell-ringing ceremony, and we'll be back for a reception right afterwards, and I'll be there also.

So thank you all for your questions. I'm sure there's many more to come later on, and we'll make sure we answer those. I'd like to move on now to Mihir Bhaskar, who's going to talk about our quantum foundry and more on integrated photonics.

Yes. Thank you, Niccolo and thank you, rest of the management team. While we wait for this to change over, I swear I didn't plant some of those questions in the audience. I am going to talk about what I'm obsessed about right now, which is scaling quantum systems, right? And we heard about scaling out, right, in the data center. And we also heard about integrated technologies. How do you scale up the chips and move the complexity in today's quantum computers, networks and sensors into integrated circuits that can be manufactured? Those are the 2 things that I'm going to talk about.

Last year, Dr. Monroe and I took the stage and talked about our photonic interconnects. This has been part of IonQ's story about how we envision building large-scale, really data center scale systems. And the reason it's part of the story is because it's how we build large-scale hyperscale technologies today. It's not just a mainframe. It's a network of modular interconnected systems.

And really, the elephant in the room when it comes to quantum interconnects is that quantum interconnects are very slow. So to give you a sense, historically, we have benchmarks, quantum interconnects and units of hertz; whereas the requirements for actually connecting quantum computers together to enable this vision is kilohertz.

And so today, I'm very, very excited and very proud of the team to announce that we have met the milestone of building a photonic-based quantum interconnect that is above a kilohertz. And so this isn't just an incremental advance. This is really a step change, right? This means we can now connect quantum systems together fast enough to sustain distributed computation. So we can actually think about addressing the scale-out problem and building not just technologies in the R&D lab but technologies that will actually enable quantum data centers.

The second reason this is exciting is we didn't just reach this result by turning some knobs and making incremental advances. We actually took a fundamentally new approach, which we talked about last year through the acquisition and integration of Lightsynq's technology, which is a quantum memory. We took our quantum computing system, our trapped ions, and we connected it to this quantum memory in order to really use a new architecture, a heterogeneous architecture, a device optimized for computing and a device optimized for networking, working together to create a system that's better than the sum of its individual parts.

And this is really special for me. It may take a moment to sink in for everyone else. I mean many of you are sitting on your laptops. Like we take this for granted every single day. We have technologies that are designed for certain things, CPUs, GPUs and networking cards. All talking together, all working together. But when we think about designing quantum systems, to date, we have not yet, until this moment, successfully combined 2 different types of systems and got an improved performance.

So this really marks maturity in being able to create heterogeneous technologies. It's why we're proud to be a DARPA HARQ performer. It's exactly the subject of the HARQ program. And we think this milestone applies not just to trapped ion systems. We're excited to truly build heterogeneous systems and think this will be the leading interconnect solution for all modalities, so trapped ions, trapped atoms, superconductors and more.

So that's about scaling out, but there's also a lot that you've seen today about scaling up on chip. And I'm very, very excited to be stepping into a role working directly with Tom Sonderman at SkyWater, where we announced today that we are launching the industry's first dedicated quantum foundry platforms. And so while others have talked about a quantum foundry, Tom told you about how SkyWater has been actually delivering wafers for over a decade. You can see some of those wafers both here on the screen and also in the galley.

But what we're launching here is -- goes far beyond that. These are scalable and reproducible platforms that create an open ecosystem for quantum computing companies. Whether they're building atom, ion, superconducting photonic or spin-based processors, they need semiconductor solutions that are tailored to and designed for quantum signals.

And so I want to unpack the 2 sides of this platform. There are really 2 distinct technology elements, and you only need 2. There are only 2 physics ways to route quantum signals. It's light and it's superconducting electronics just like there's copper and fiber in the data center. There's really a quantum analog, and we have the world's only quantum platforms for semiconductor manufacturing.

So the first one on integrated photonics. There was a question about how Nexus Photonics really fits in here. So I'm really honored and thrilled to be joined by a luminary in the field of integrated photonics, Professor John Bowers. He pioneered the development of putting laser systems on a chip. And without that, we really wouldn't have the massive scale-out of today's AI data centers, the optical interconnects that are connecting GPUs and computing devices.

And the way to understand how this applies to quantum is that Nexus has pioneered that same technology for putting quantum lasers on chip. And so on the left side of the screen here is one of our quantum sensing devices. As you can see, it's discrete components. They're integrated about as tightly as you can, but you can still see a jumble of wires connecting everything together.

So the Nexus technology, the designs, the intellectual property, the integration know-how is what allows you to take that complexity and put it on a single chip at a fraction of the size, weight, power, cost and with much higher manufacturability and yield and reliability. And so Nexus brings the know-how, the expertise, and SkyWater brings the prowess of being able to manufacture this all on U.S. soil.

So this is the photonics side of the story. SkyWater also serves a number of customers that build superconducting technology, and we're very, very excited today to also announce a partnership with a leading superconducting qubit company, Qolab, which is cofounded by -- and CTO of this company, is Nobel Laureate, Dr. John Martinis. So instead of hearing it from me about how this works, we'd like you to hear a little segment from Dr. Martinis.

I'm John Martinis. I'm the Chief Technology Officer and Co-Founder of Qolab. I've been working on superconducting quantum bits way back in an inception. I was a codeveloper of qubits technology in the 1980s, and I've been excited to see the transition from a fundamental physics experiment to something that we want to make useful in the next few years.

I think we're entering a new phase of quantum computing. We have most of the science understood, but I think right now, what we're trying to do is figure out how to go from that to build a manufacturable system and a system that works better, scaled up, build a useful quantum computer. And I think that transition is going to happen if scientists like myself, people in Qolab start collaborating with people in the manufacturing space, especially those who are doing semiconductor kind of fabrication. In particular, we're really happy working with SkyWater because they're used to doing specialized fabrication and working to develop these new processes to overcome with all the materials demands and processing demands.

We're very excited that IonQ has acquired SkyWater and are helping with the extra focus to work on quantum computing. And we think that that's a very good partnership and acquisition, and it helps SkyWater be able to focus, build new capabilities in their fabrication to properly scale up quantum computers and build them properly. So I very much look forward to working with the SkyWater team to not just simply build a better and bigger quantum computer but lay the industrial foundation for a new era of computing. So thank you very much.

As a physicist, it's personally very exciting to get to work with Dr. Martinis, but I think strategically, you should ask yourself when you think about the quantum foundry, where are the leaders and luminaries in the field choosing to build their quantum technologies. So whether it's Dr. Bowers in the audience, who I encourage you to meet later, or whether it's Dr. Martinis, it's happening at SkyWater. And really, to unpack this further, I'm thrilled to invite CEO of Qolab, Alan Ho, to the stage.

So I want to contextualize what we're trying to build. If you look at the computers in the '60s, it looks kind of like this. You have all these jumbled wires, all these discrete components, et cetera. And the big innovation that was invented by Nobel Laureate J St. Kilby and the CEO of Intel, first CEO of Intel, Robert Noyce, is the concept of the semiconductor integrated circuit. That's what they did. They took that good, discrete complexity and brought it down into an integrated circuit.

Now if you look at all the superconducting qubit quantum computer from IBM, from Google, et cetera, it kind of looks like our computers in our '60s. And what we're doing at Qolab is that we're taking all those crazy wires, all those large amplifiers, all those filters and integrating it into a single package, what I would call a quantum superconducting integrated circuit.

And I'm very proud to work with SkyWater to create -- to be their first customer for the SC250 process. SkyWater not only provides us a predictable unit economics for manufacturing, which is required for us to underwrite -- investors to underwrite manufacturing at scale, but moreover, it's also located in the Heartland. People talk about Silicon Valley. People don't really talk about the Silicon Heartland too much.

And to give you a little bit of understanding about that, Qolab does all its design, packaging and cryogenic testing in Madison, Wisconsin, also in the Midwest. Now the reason why I'm so proud of this is because having a quantum manufacturing ecosystem in the Midwest is a resilient quantum manufacturing ecosystem for America.

Thank you, Alan. And just to conclude and move on to the next section, I hope you can see how -- whether it's through the scale-out solutions or the scale-up semiconductor ecosystem, all of the roads to scaling quantum are running through the team in this room. And so very proud and excited to next hear from Chad about what applications this is going to and currently enable.

Thank you so much, Mihir. Thank you very much. How's everyone doing? All right. We're getting close to the next phase and the end of this, so I'm going to change up the energy here in the room a little bit. This is going to be something a little bit different. If you couldn't tell from the suit change, I represent the go-to-market part of IonQ. So you've heard from the scientists. I'm an engineer who also spends a lot of time with customers. So what I want to share with you is a little bit of what we're seeing, what we're doing, and I'm going to start with a little bit of a story to change the way we're thinking about this.

In the Renaissance era, Leonardo da Vinci had a dream. Humans can fly like a bird. It was crazy. Nothing came of it. It was invention. Fast forward, December 17, 1903. The Wright Brothers create the first human-powered flight, a glorious 12 seconds with a plane where there was only 1 manufactured in the world. They built it themselves with whatever the 1903 version was of duct tape and bubble gum.

This is kind of like the early days of quantum computing, and some are still figuring out how to get out of this phase, and it's the next phase. What did humans do? We iterate it. We turned into how do we productionize this. How do we make it manufacturable? How do we make it safe, reliable, deployable? And companies like Boeing emerged and the Boeing 737 is still widely used today, basically brought flights to the masses. And where do we as humans find ourselves today? Stuck in Atlanta Airport in a very dense situation like this. But of course, this is scale.

At this point, airlines aren't about airplanes anymore. They're about changing how the world works, how can societies function. And I call this the building the machine that makes the machine. And I'm not talking about the quantum computer machine. I'm talking about the organization, the people, the process. But how do you take these things to scale?

I think that we are now in the iterate phase and in the scaling phase of IonQ's life. You saw and heard that multiple examples throughout this. And I'd love to hear Alan's comment about how we're doing it not just for ourselves with trapped ion systems but also with superconducting modalities. How awesome is that?

So let's talk about this a little bit briefly. In April, I was on this stage, and I was talking about time to solution. And the reason that we wanted to bring this up is there was this disconnect about what was happening in the analysts and marketing and didn't match kind of the conversations we're having with customers.

Customers very rarely ask about 2 qubit gate fidelity. They very rarely ask about coherence time. They very rarely ask about all sorts of things. What they do ask about is how long will it take to get to a solution that's valuable for me, my workload. What are the economics of getting to that solution -- time to solution, economics to solution?

And we shared that our advantage in the market today is that we are like a sniper. Our ability to get to answers very quickly, very efficiently with a very small number of shots relative to kind of a shotgun spray manifests itself in a better time to solution overall. So the architecture matters but really in the form of the outcome as opposed to the individual feature.

And yes, we shared workloads. Sometimes we're about the same. Sometimes we're 10x better. Sometimes we're 100x better, 1,000x better, 10,000x better. Those are nice hero numbers. I think what's more interesting is that we published the repo where anyone could duplicate the results. We published third-party validation. We've showed up with receipts. Showing up with receipts is important. It's kind of moving out of the hype phase and into the put up or shut up phase of what's happening in our industry that you can see occurring now. And again, yes, it's rooted in the fundamental architecture of our systems today and tomorrow.

And that was a little bit of an Easter egg that I left in April and now I can pull the thread on a little bit more, where I said today and tomorrow are connected. I talked about how 1 of those workloads where we're about 10,000x -- or 1,000x faster is a quantum Fourier transform, which shows up in Shor's algorithm. The quantum phase estimation algorithm shows up in all sorts of chemistry and bio life sciences use cases. And every single day, every single month, every single quarter, we are doing rapid iterations with our customers with solutions by industry vertical.

In the spirit of time, originally I had every vertical represented, financial services, manufacturing, logistics, and we said, "You know what, let's focus in on bio life sciences and pharma." But trust me, there's examples for this for every single one of those industries. And this is actually how we engage with our customers. We tell them about Superion. We tell them about what we're doing around quantum platforms. What the customers really want to know is how does this apply to me. I'll give you a couple of examples.

Our groundbreaking work that we did with AstraZeneca, we continue to advance the bar on that. We -- every year, we iterate. We've done 3 iterations on that so far, and we continue to work with them on the next one.

Together with Kipu, we did some incredible work around protein folding. So this is going to be a little bit -- I'm going to pull the audience for some interaction here. Has anyone had a baby? Show of hands. One. Has anyone loved someone who's had a baby? Are you guys all just going to fail to procreate? Come on, show of hands. Does anyone who's raised their hand know what oxytocin is? You bet you do. It's pretty important. It has 9 amino acids. So these relatively small enzymes are really, really important.

Is anyone here on a GLP-1 drug? You can see the before and after in April. I'm about 10 pounds lighter. Oh, come on, you're lying. GLP-1s are roughly 30 to 50 amino acids in length. In other words, we're already able to use Forte Enterprise and Tempo generation hardware to work on problems that are important in the real world today. We did this for 12 and then 14 amino acids.

We've taken the work that we did with Einride and previous examples around logistics and optimization, and we're bringing it with CCRM to health care use cases. People are like, "What does that have to do with logistics?" Precursor chemicals are very expensive, sensitive to light, temperature. How do they get from point A to point B? When you go into a wet lab, you see all sorts of stations. Scientists have to move from one to the other in a complex process. That's one of these optimization class problems.

And lastly, the example that you heard from Jordan about using quantum algorithms to find patterns can be used not just for satellite photos. It can be used to look at fMRI images to find early onset brain cancer, early onset dementia. And again, this can be applied in many, many places. This is the world of AI and ML with quantum together.

In every industry, there are stories that we bring to our customers like this and say, "We want to partner with you. Bring your workflows to us." And it's not just us that's saying this. Is anyone here going to be at IEEE Quantum Week? That's a joke. None of you will be there. No one there wears a suit because it's a premier event for scientists. For quantum engineers, I shouldn't have said that. Is anyone going to be there? That would be really awkward. Okay. Phew, dodged a bullet on that one.

At IEEE Quantum Week, there were 857 papers submitted by everybody in the world. Of those 857, 20 got selected for best papers. We submitted 13. 10 of ours were selected to enter, and 4 of our 10 won best in show. That's a 3.7 Sigma event. In terms of other people who are in our industry, the luminaries recognizing, this is groundbreaking work.

An example, AI plus quantum using quantum algorithms to improve how LLMs behave for 24% better accuracy, lower time for solution, better energy efficiency overall. What industry does that apply in? Every single one of our customers. Won a gold. The work that we've done with Synopsys, which we've advanced, we did an update in August of this year. That protein folding thing I was telling you about before, we've now done it on a Tempo generation system and went from 14 to 16 amino acids, starting to close in on that GLP-1 kind of category. And then we did this amazing paper together with NVIDIA and with Oak Ridge National Labs around how do you actually use LLMs to improve quantum algorithms, the other way around, super interesting. And by the way, notice how many of these workloads drove clusters of GPUs and QPUs working hand in hand, all of them. Again, super interesting scenarios.

But now I'm going to give you one more little fast-forward view into things. Zoom out a little bit further. This is a problem that is not solvable today. That crazy, beautiful-looking molecule is cytochrome P450. It is used in almost every metabolic process in our bodies. About 50% of the entire drug ecosystem either accelerates or modifies the metabolism rate of this particular enzyme. We have 12 genes in our bodies that make about 12 variations, about half of which do something.

This ecosystem is about $2 billion to $3 billion a year of research into how do you model this. And no one's been able to do it exactly right classically. The authoritative research on this was done in 2025 by Google and Caltech and many other great universities, which is that paper right there. And it's at a scale that is more than a Superion 20,000 system could do. We could do it with 100,000, which highlights an important idea. What you heard from Chris is we are going to accelerate and scale up faster than anyone else and be able to tackle these problems.

However, there's another interesting thing that a lot of people don't get immediately, which is you couldn't do it with 1 20,000 system but you could do it with [ 5 ]. What is the economic value of being able to take a workload and pull it forward 2 years? If you do a net present value calculation on this, it's hundreds and hundreds and hundreds of millions of dollars. And that's through the cost lens basically solving how much does it take to cost model this stuff versus the benefit lens about what is the economic value of being able to do a new drug discovery. And again, I've only used bio life sciences as one example of many in our industries that we're talking about here.

So the possibility to increase the scale at which we are manufacturing these things is a differentiator. Our ability to paralyze work streams is a differentiator. Our ability for some workloads potentially to network them to actually create a distributed computation is a differentiator. Some of you asked the question is it a prerequisite. No, it's not. But if you can pull forward a workload by 2 years, that has immense economic value.

So the last little bit on this that I'm going to provide is a little bit of insight into my life. I can tell that you're very interested in this. My life is about how do we complete the stack. How do we make it so that we engage with our customers. It's as important as the systems themselves. In the last first half of this year, we've more than doubled the team that engages with our customers around how do we do training, enablement; how do we roll out systems, deploy them, customer success personnel in every theater, our applications experts.

It's about 70 people around the world now that are part of our forward deployed engineering team, my team, customer solutions team. Those are the people that also are on my team that work with customers over long periods of time and our apps R&D team. That team of 70 people are almost entirely PhDs. It is possibly the single largest concentration of this skill set in the industry, which is critical about how do we scale. How do we build the machine that builds the machine?

And we're seeing this show up and others are as well. BCG did this study. You might have heard of Wall Street Journal study about growth inside the enterprise. It's occurring in every single industry. I did a fun little exercise, a little unofficial. I asked an AI model, "Hey, what customers have we visited in the last little while?" And then I said, you know what, let's broaden it out. Let's say they're not necessarily just customers. They're enterprises. They're public sector companies. They're people we're meeting for the very first time. One of them was the NYSE team, so the NYSE ICE team, was great talking with you.

These are customers that a subset that we visited in the last couple of months and talked to them about these solutions and these problems and these workflows. They show up in every theater, every industry, every vertical. And anyone here who has been in a go-to-market role knows one rule of being go to market is activity beats almost everything. Every time that we engage with a customer or a prospect, we learn. We learn about their problems. We learn about how to engage with them. We're doing this more and more, and I'll give one last little example about a customer scenario.

We hired somebody who didn't know much about quantum but knew everything about the oil and gas and energy industry. Within his first month, he had a meeting with an oil -- 2 of the largest energy companies in the United States. And what was fascinating to me is they didn't ask us what's quantum. They said here's our quantum science team. They've been working on these computational problems for the last 4 years. They've tested on these different modalities. Here, all of the scenarios we're trying. We're thinking about how do we take gravimeters and integrate them with our seismography. And they're like we want to know how you could help.

This is a change in kind that is occurring in the markets. And again, this is someone who can get that meeting in a month. That ability to have activity and volume matters.

Closing this out, I've also learned in the last year customers like choice. They love the fact that we support whatever programming language you want. We support 3 -- more than this 3. In fact, we support all 7 IDEs and software stacks that are out there that are open source projects. Others actually ask customers to write programs in their particular language. That seems weird to me.

Customers also like the choice of where. You heard from Inder a huge acceleration of, you know what, I just want to get started on the cloud. Some customers say, no, I want to have it in my data center for data sovereignty or because I want GPU clusters to be co-resident with my QPUs for all of the reasons that we described earlier. You're going to be hearing about some of those from the people who are on the panel. The AI and quantum discussion has lots of applicabilities. You'll be hearing about that from Matt Rabinowitz.

The other thing is some of them, and again, you heard this from Inder, come to us and say, "We're an allied nation state. We want to have a full-blown sovereign solution." That's occurred in multiple countries around the world and is everything inside the portfolio. And customers also like to grow with their trusted vendors. We have customers that have started with us on Aria and Forte generation, have bought Tempo systems. And when they bought -- when they updated their contract for the Tempo system, they also said, "You know what, I want access in the cloud to the Superion system as soon as it's available."

We have other customers like EPB that started in one domain, networking, and have expanded to quantum computing. Their system is being commissioned right now hot off the presses. And they're now expanding into quantum memories, really forming a nexus there in Chattanooga for the quantum ecosystem. And what I love about that EPB story is we trained and enabled their team to have some critical expertise, and now they're writing their own papers, their own analysis around these energy grid distribution use cases.

The net of all of this is that we're accelerating. We're in the iterate and scale phase, not only in the hardware but also in the go to market. How are we engaging with customers around the world?

And so with that, it's a great segue to hearing from a panel of customers, users and partners. Thank you.

Okay. This is going to be insightful. We've got some wonderful panelists who are making their way up the stage here. John Licata is the Futures Director of ServiceNow, a friend at the end. Robert Long is the President of Strategic Initiatives at EPB. And Matthew Rabinowitz -- Dr. Rabinowitz probably doesn't need an introduction. He is not only a very successful serial entrepreneur in the aeronautics space, but also in the AI space and the pharmaceutical biotech sector. He's the Founder and Executive Chairman of Natera. Most of us in the room, if you had children, probably use their product.

So we're going to have a pretty exciting discussion here. And I'd love to start with maybe each of you giving us your perspectives on which part of the IonQ platform is most relevant to your business, is most exciting, because there's a range of time horizons that you've each been working on and you are working on. EPB is one of our largest, closest and most historic partners. You guys have a computer, you have a network, you're running your own applications, your own algorithms, as you just heard from Chad. ServiceNow, you're thinking about what the next year or 2 brings, and you and I had a fascinating conversation before we started today. And of course, Dr. Rabinowitz is smack in the middle of the kinds of things that I talked about in my opening segments and that Chad added on around how can quantum computing actually make a difference for humanity and for the human condition.

So you might want to start with Mr. John, you go down the line.

Yes. Good afternoon, everybody. I think it's really important to note that the way we're looking at this is looking at 2 lanes. So we look at security. So clearly, the opportunity around QKD is quite fascinating. ServiceNow has been leading with security. We've acquired Armis and Veza. We are innately becoming more focused on the role of security into the future of workflows which dovetails into the second opportunity that I believe is worth calling out, is optimization. And I think there are no longer could be 2 different lanes of security and optimization. I think secure optimization is the really interesting path. So for us, we're looking at quantum plus AI, and it's been wonderful to be on the journey of exploration with the team at IonQ.

Robert Long with EPB. We are, as Niccolo said, we have a quantum network. We've had our network in place for about 10 years now. We have our full fiber network in the Chattanooga area. And as I also said, we are peeking around the corner when our IonQ Forte Enterprise system will be fully commissioned. And so we have the first nationwide or the first national available quantum network as well as the first commercially available quantum computer. So we're making our systems available. And we are approaching different business aspects with those in the community and nationally and really focusing on the energy grid, energy grid optimization and energy security and really utilizing pretty much the full stack of IonQ services. As Chad mentioned, we have 8 fellows via NIST grant, and we leverage the IonQ training platform to train our fellows, and we are running our own algorithms and running our own programs to service the energy needs of the industry.

Hello, everyone. Matthew Rabinowitz. I'll just kind of give an anecdote for why I'm so excited about what IonQ is presenting today. There are problems in AI where we still don't really understand whether we are limited by the data that's available or we're limited by the architectures and finding the global minimum of those architectures. And if you take a sort of cartoon example of a protein folding problem that was spoken about earlier. Imagine you've got 100 amino acids and amino acids 1 and 2 can rotate relative to one another and the configuration will be optimal for those 2. But whatever they decide will be relevant to all of the energy configurations of the other amino acids, including 100. So if you assume as IonQ did in one of their papers that you've got 4 different permutations between each amino acid, you've got 4 to the power of 100 hypotheses that you've got to evaluate is computationally non-tractable.

Now we've been able to solve this kind of problem classically with systems like AlphaFold, et cetera, but it doesn't really solve those problems robustly. What's incredible is that in nature, you always find that global minimum. When you make a protein in a cell from a DNA sequence, somehow by a combination of quantum tunneling and jiggering, that protein always finds that global minimal folded structure and doesn't get stuck kind of local minimum the way the AI algorithms of today do. Now that's an incredibly powerful concept. If you can apply that concept to the challenges that we have in AI architectures today, there's huge applications in health care.

So obviously, there's applications in protein binding. There are things that Natera is potentially interested in with neoantigen prediction for personal cancer vaccines. The AI problems that we're addressing for predicting how patients will respond to certain therapies, prognostic applications. And then MyOme, which is a private company, is trying to solve healthcare in the United States based on whole genome analysis and AI modeling of electronic medical records. And we've built these models with the leaders in the field that suggest that we can save over $200 billion to the United States healthcare system by predicting susceptibility to common and also rare diseases where we can catch these diseases much earlier when they're much cheaper to treat and delay or stop the onset of these expensive diseases by intervening early.

And the application of AI to tease out the signals in these genetic data sets where you've got DNA and very noisy gene expression data, very noisy clinical data to find those connections and correlations is a problem that, obviously, AI has got a huge role to play in, and we believe that quantum AI will play a role in the future as well.

So each of you has been a visionary and leader in this sector. And of course, Janet at EPB and her predecessor, I think used to analogize being early to quantum the same way you guys thought about being early to the fastest fiber network in the country. Dr. Rabinowitz, I think, almost grabbed my lapel at an event we were both at and said, "I want to be 5 years ahead of all my competitors in all of these areas he mentioned." It was very memorable because I thought like this is a man who is not only a polymath and R&D researcher of the year actually in '24, but also a capitalist. And I always like to say that IonQ, that's who we are. We are physicists, but we are capitalists.

So I'd love to understand how you've each thought and John, same thing, you led the quantum initiative of ServiceNow, I think, across the board for quite some time. How are you thinking about extending your leadership positions in your sectors because you can see that things are just inflecting, but whether it's security or computing, this is really just a race that's in its first inning.

I'll go. So thanks, Niccolo. So with our Quantum network and thinking of what we're trying to build in Chattanooga by adding the quantum computer, we really want to have an ecosystem that builds within Chattanooga centered around, obviously, Quantum, our network and our computer. We are the local power utility and generally, maybe not think about Quantum with the power utility, but to be able to leverage our full fiber network, like I mentioned, 10 years ago, we partnered with Oak Ridge National Lab, Los Alamos National Lab as well as Qubitekk, now in the IonQ family and worked on and successfully tested QKD across a 21-kilometer span on our fiber network.

We took that as continued drive to fully build out our fiber network with Quantum as well as add the quantum computer. And now with IonQ forming an office -- landing an office in Chattanooga, an R&D facility, Vanderbilt is coming to Chattanooga to -- over the next 3 to 5 years, they've announced a satellite office with 250 faculty staff. We have partnerships with UT Chattanooga and other entities are looking to come and continue to build out the ecosystem around Quantum. And so that first mover, continuing that momentum I'm a strong believer in that momentum gets momentum.

We're continuing to invest. We're continuing to pull investors into Chattanooga to have a residence as well as to work on our network. We'll make our computer available physically in our Quantum center that we have there in Chattanooga or available via the cloud. So we really just want to keep the momentum. We have a very supportive city and county as well as a state government that is very much continuing our momentum and want to invest behind Quantum to make Chattanooga and Tennessee a leader, and we're very proud of what we're doing to help the broader community and just help Quantum continue to grow in the Chattanooga area and across the state.

And I think for us, I think the word trust is very subjective, and we're trying to see what we can do to redefine the very definition of hybrid work. For most people, hybrid work is working from home and working in the office. But what if you can imagine working across classical and quantum systems?

So quantum will not help every problem. And I think sometimes people look at quantum as a very fast, speedy solution when, in fact, several days is fine for the right strategic solution that you could deliver. So I think understanding the great American rock and roll band Aerosmith had a quote that, "You need to know how to lose before you can win." And I think to Matt's point, you need to know where AI stops.

You need to know where the complexities become far great, and we need to start thinking outside the box to see what we can do to deliver the future of workflows, hybrid workflows, quantum plus AI. I think we are hearing from some folks a little bit too much of keeping those 2 words mutually exclusive, but we see the convergence.

And to deliver that, we need to redefine how the workflows are actually delivered. It's process management, it's workflows of the future. But as we start to become more future-ready, we need to look beyond the letters PQC. And PQC is largely classical anyway. But nevertheless, we need to understand how to lead with security and how we can drive opportunities that absolutely make sense for modern-day GPUs.

But when you need the QPUs there, you need the plumbing that can integrate between today and tomorrow. And picking up on a point that Chad made about today and tomorrow, too much of the focus is on using quantum to solve today's challenges, where we, as from the futures team actually look at where the problems could evolve. There will be several billion agents coming online over the next several years. How can you orchestrate that? How can you actually leverage the probabilistic intelligence to deliver a true deterministic workflow.

So for us, we're looking at bringing this together to really become ready because no company could become future-proof. So we believe quantum plus AI, you could do a lot more to become future-ready, and that's the focus of what we're trying to accomplish.

Well, I just grabbed you by the lapels because you're always so fancily dressed. I just wanted to ruffle you up a bit. So that was the motivation. And I'm not so much a capitalist these days. I just -- I like to work on really hard interesting problems that are going to be very important for mankind. And I think that the kind of things that IonQ is enabling are down that vector. So I'll give you a little anecdote. In 2010, I had a patent on training multilayer nonlinear dynamic systems with embedded memory.

We all have one of those, Matthew.

And the Stanford let the patent expire because they didn't want to pay the $1,000 annual licensing fee for this patent, and they couldn't get hold of me. And this is the year before Google Brain started to work intensively on training multilayer, nonlinear perceptrons with memory. And who knows whether that would have had any effect.

But the point is I never dreamed at the time that you could do these incredible things with deep learning neural network architectures if you trained them these transformer and convolutional network architectures on the entire Internet of information to just predict the next word in a sentence. And with that amount of data, you could use all these stochastic training algorithms where you could basically get an incredible extraction of insight from this huge amount of data. So I am trying, besides ruffling up the very well-dressed CEO, I'm trying to be ahead of these possibilities. And I think that we are seeing some light where those possibilities are starting to look very exciting.

So Natera, for example, has incredible amount of oncology data. We have this technology, which most of you probably know, where we can catch the recurrence of cancers years or months before you see clinical symptoms. We can see how you're responding to therapy better than imaging. We can see in the adjuvant setting after surgery, whether all the cancer's has been cleared and who will and won't benefit from chemotherapy. And this is all about sort of seeing single molecules from the tumor in the blood, incredible levels of sensitivity and specificity where you need to do a personalized workup of every patient in order to get to that level of performance.

With that capability, we have a huge amount of data where we have -- we curate the clinical data with AI models. We have the upfront tumor sequence and RNA sequence most of the time, we have the outcomes, and we can use this incredible wealth of data to train models. For example, we can train models on neoantigen prediction to target particular mutations that will be relevant for personal cancer vaccines. And less than 1% of the mutations in the tumor will be good neoantigens. In other words, we'll generate an explosive immune reaction that will be great for a PCV.

The problems that we are addressing there are the kind of problems that I was alluding to earlier where there is hope that with these quantum algorithms, you can be selecting your neoantigens more effectively. So that's an example where we just want to be aware of what's possible and a little bit ahead of the curve. And then in the context of the MyOme work where we're looking at predicting disease more generally, common and rare diseases, there's a bunch of stuff that we are starting to play with now, which is looking very promising in a collaboration that MyOme has with IonQ. We are looking, for example, at the fine-tuning of LLMs.

And it's a beautiful application of qubit architectures because right now, when you train a big deep learning neural network, you've got to put a lot of data in at every training iteration. And if you try to do that with a quantum architecture, that's going to be challenging for a while. And also to see where you're at in the training iterations, you've got to have multiple shots to see the expectation value of your quantum circuit. So training a whole LLM is still on the come.

But if you do the fine-tuning with a quantum architecture, you take the embedding from this deep learning architecture where it sort of extracted the essence of your information. And there was a beautiful paper that came out of IonQ in May, where they were looking at fine-tuning a large language model to look at text and basically see whether reviews were positive and negative. And we emulated a very similar architecture to that on a sort of similar embedding structure where we had about an 800-length vector, which was the embedding out of a standardized large language model. And then we tested with 6 qubits on the quantum output layer as the sort of fine-tuning head. And then we tested with 14 qubits to test whether the additional qubits were giving us that additional performance.

And it was quite amazing what we saw. This is a simulation of the quantum hardware, but we saw that the power of this model was going from 0.7 AUC, the area under the receiver operating curve, which gives you a sense of the power of the model to discriminate. It went from 0.7 to 0.83. And so as we're able to add more qubits on the fine-tuning quantum head of these existing large models, I think there's a lot of opportunity there. And so that's the path that we're exploring to build these various disease predictive models, and I can talk more about the details if you're interested.

Okay. Wonderful. Well, I appreciate the partnership, gentlemen. Any final remarks?

I would just say that operational resiliency is a term not used a lot in this discussion. And I think that we need -- this is a partner ecosystem where coming together is mutually beneficial. So I look forward to building upon the conversations with the group and the industry in general. But I think that we need to look more long term and understand that the longevity is also operational resiliency, not just compliance.

I'll just add that I believe that the future will need an unbelievable amount of teamwork and connectivity to work together to solve these problems and to have these connections and cooperation across various organizations and the government, having the support and coordinating those efforts will absolutely pull forward the technology and continue to push the U.S. to leadership positions of Quantum.

Thank you so much, gentlemen. Appreciate the partnership. Many more great moments and events.

Okay. So we're going to move on, and I'm going to introduce our guest keynote speaker for today. It is a truly great honor to welcome Undersecretary Alessio Butti. He has been one of the leading voices behind Italy's digital and technological transformation under Giorgia Meloni's leadership, the longest-serving government, I think Italy has had since the war. Under his leadership, the Department of Digital Transformation has played a central role in advancing Italy's national quantum strategy and supporting Italy's ambition to become a leading hub in Europe for quantum innovation.

Undersecretary Butti has been an important bridge between the U.S. and Italy, fostering stronger transatlantic ties and technology innovation and investment. He's been a strong advocate of collaboration between government, industry and the research community. And he has brought together Italian scientific excellence and American technological leadership. It's therefore particularly fitting to welcome him here today to the New York Stock Exchange as we look forward to a new chapter of technological cooperation between our 2 countries. Please join me in welcoming Italy's Undersecretary of State for Technological Innovation, Senator Alessio Butti.

Thank you. I took some notes. Good afternoon, Niccolo, members of the IonQ leadership team, distinguished guests and colleagues. Bear with me because I have a terrible jet lag. It's a privilege to join you today at the New York Stock Exchange on behalf of the Italian government. Thank you for the invitation.

Three very challenging questions. And Investor Day is naturally about performance, strategy and growth. My responsibility is to look at the broader question: How can government, industry and science work together so that transformative technology creates lasting economic and social value? Quantum is at a turning point where scientific breakthroughs are beginning to translate into real-world applications with growing economic, social and strategic significance. Our ambition is very clear. Italy intends to become one of the Europe's leading centers for quantum technologies. That is why I have personally focused on this area and why under my direction, Italy adopted its first national strategy for quantum technology.

We issued it last year in July at the same time Europe did. The strategy goes beyond computing. It encompasses quantum communication and security, sensing, research, skills and the development of a strong industrial ecosystem. Italy's National Quantum Forum brought government, researchers, universities and industry together to begin turning strategy into action. We don't want Italy simply to use quantum technology developed elsewhere. We want to help create them. This is where international cooperation is vital. The United States brings technological leadership and entrepreneurial strength. Italy brings scientific excellence, engineering talent, universities and industrial capabilities.

Together, we can create opportunities, that neither country could achieve alone. Niccolo, you spoke about the quantum renaissance. I was pleased when I first heard you mention this when we met in Rome last year because it is a concept that I have also been discussing for some time. I believe in Italy's quantum renaissance. Italy has an extraordinary scientific tradition. The renaissance was not about looking backward. It was about moving forward, and Quantum can help us do exactly that. It can become a catalyst for innovation across manufacturing, aerospace and defense, life sciences, energy, cybersecurity, telecommunication, finance and advanced materials.

We welcome companies such as IonQ Italia led by Marco Pistoia, bringing global quantum expertise to Italy and investing in talent, research and universities. IonQ's decision to establish IonQ Italia reflects this collaborative approach. Niccolo de Masi, Marco Pistoia, it seems like an Italian company. The Q-Alliance, of which IonQ is a founding member is another important part of this vision. It connects companies, universities and research institutions and provides researchers with access to advanced computer quantum system. But the technology alone is not enough. We must invest in people, skills and trust and connect research to real economic and social needs.

Quantum technology will be measured by the problems it solves, the productivity it creates, the knowledge it expands and the opportunities it gives our citizens. That is why Italy wants an open, competitive and technology-neutral ecosystem in line with the European Union. No country, company or university can build the quantum future alone.

Thank you to IonQ for this invitation and for its continuing engagement with Italy. Niccolo and Marco, I look forward to seeing you next month in Cernobbio on Lake Como at the ComoLake Digital Innovation Forum, where we signed an important MOU last year to develop quantum in Italy and Europe.

To the entire IonQ team, I wish you every success for Investor Day and look forward to the next chapter of our cooperation. Thank you so much.

Okay. So we've got an exciting announcement now that follows on the Under Secretary's kind welcome and attendance today. Marco Pistoia runs IonQ Italia. And over the last few weeks and months, we've struck up a fantastic partnership with a business called Lutech that is run by our friend, Giuseppe here. And we're announcing today, this will go out in the news, I think, tomorrow morning before market open, that there is now a partnership between IonQ Italia and Lutech for the nation's go-to-market of all of IonQ's Quantum platform. So we thank Under Secretary for his sponsorship. We thank Giuseppe for his incredible partnership. And we thank, of course, Marco for being the gel in all of this. Congratulations, gentlemen. Thank you so much.

Okay. We're on to our final panel here, which is in the national security space. So I'd love to invite my colleagues up. So General Raymond is -- my left. He serves on the Board of IonQ and other public companies, institutions. He is the founder of the Space Force under the First Trump administration and the only four-star general to be a four-star in two services since the Air Force was founded in 1947 by a gentleman that probably was a visionary as he was last century. So we're honored to have General Raymond on our Board, and he's been a tremendous supporter of our mission.

Robert Cardillo, also a Board member and now Board observer at IonQ. He was the former Director of the National Geospatial-Intelligence Agency and he has been a vital supporter of our insights in that community.

Rick Muller led the quantum program at Sandia National Labs for, I think, 22 years, but you'll correct me.

Slightly fewer, 21.

And then he became the Director of IARPA before he joined IonQ about 12, 18 months ago.

So we're closing the day discussing our nation's government and our allies and the perspective of these 3 gentlemen who have served our nation to a tremendous extent at a very high level to discuss everything from quantum security through to the relevance of quantum computing on the continuation of your mission. Maybe we'll start with General Raymond.

Would love each of you to tell us how we fit into your life service as well as obviously, what drew you to IonQ.

Well, thank you, Niccolo, and what a wonderful day this is. It's a real privilege to be part of the IonQ team and to be here this afternoon.

As Niccolo said, I served about 35.5 years in the Air Force and then transitioned over to the Space Force in 2019. As I reflect on the environment in 2019 as it relates to space, it was becoming -- our nation was becoming much more reliant on space. There was a sense of national urgency associated with moving at speed. And there was a thought that you had to have an organization that was -- came to work every day and focused on it.

As I think through that and what we see in -- with quantum today, I think we're kind of in the same spot. Quantum has moved -- as we've heard today, quantum has moved out of laboratory into real-world applications in the hands of national security. That's absolutely critical. You see a sense of urgency is codified in the EOs, the 2 quantum EOs that just came out. You see technology moving at a speed that probably people didn't think initially was going to happen as fast. And then the other thing is you see, and we've heard this from Tom about scaling.

So all of this comes together. And as I look back to my life service in the Space Force, and I look at why we stood up the Space Force was to ensure our access to space. Space allows us to see with clarity. It allows us to navigate with precision and allows us to communicate over great distances with surety. That's only if an adversary lets us because the domain now has become much more contested. And what Quantum brings to this, in my opinion, is the ability to see even more clearly, the ability to communicate with the surety and to be more precise and to take the adversaries vote out of the equation because the security is inherent in Quantum.

So I'm privileged to be part of this team. I see the great benefit that Quantum is going to provide to our nation's security, and I'm happy to do my small part. Thanks.

Thank you, sir.

So thank you. I had the privilege to serve almost 4 decades in the U.S. government, all of that in our intelligence community, most of it in the geospatial intelligence world, I was privileged to lead at the end of my career. But that service crossed 7 presidents. I had the privilege in that time period to spend 4 years in the Oval Office, providing that intelligence service to important customers at critical moments. And if I learned anything from all of that, I learned that strategic surprise doesn't come from not expecting what's coming over the next horizon. Sometimes you know it's coming and yet you don't prepare. And so I would actually call that strategic failure.

What got me to this company was it was the only company that I saw bringing together all of the pieces that you've seen today. Obviously, we wouldn't had a foundation to build upon without Dr. Monroe's founding and without Chris Ballance's carrying forward the compute piece. But what really excites me about the IonQ response to that strategic challenge are the applications and the customers and the missions that you heard about because one thing I -- the other thing, I guess, I learned about as an intelligence professional, in many ways, what we do doesn't matter unless it affects a better decision on those we serve.

And I feel that same way about IonQ, right? We know we're in a critical race. Jay, you talked about the national security implications of it. But what compels me about this team is that it comes together in a way that reflects that outcome, that mission satisfaction, that drug discovery, that application of science and service of humanity and security that brought me here to IonQ.

I'm Rick Muller. So I spent a lot of my career doing technical development with the government as some sort of customer, either as a funding agency or ultimately, when I was at IARPA as a destination, as a transition partner for what we're developing. And what you learn in that is that the government doesn't want a qubit. They want mission solutions to their hardest problems. And what IonQ brings to that is an amazing set of technologies and a broad platform of different capabilities that can be combined together to address the nation's hardest mission challenges.

The other side of that, though, is that the technologies alone don't get you very far. And you learn that especially as a tech person. I can tell you whether a qubit is going to work or whether a clock can work or not, but it takes people that understand the mission well to understand what the value of those solutions are. And I think one of the things that IonQ builds is the team. I mean, you see who's sharing the stage with me. I'll complain that for the second year in a row, I was completely upstaged by the people at Analyst Day that I shared a stage with.

But the point is that we've built a team that can take the best science and combine it with people that understand the mission well and create really important solutions that are targeted at the hardest problems. And for someone who does this kind of work, that's just an amazingly -- that's a personally gratifying place to be. And as a company, I think that's a very solid business model.

Well, Rick is the only one of the 4 of us that has a PhD in ion trapping. But Robert and Jay have run much larger organizations, both of us. And I've appreciated their counsel and mentoring on how to do a good job of that as we continue scaling.

I'd love, General, if you'd share some team building examples, if you have a moment, as it pertains to where you think quantum is and where quantum is going.

Yes, I'll be happy to. As I look at the IonQ team, you asked me what attracted me to come to IonQ. It was the team. And if you look at -- and it was a team that was -- that operated, in my opinion, with the same integrity that I saw when I was in the Space Force or military service. It was a team that was as mission-focused, as Robert said, as we were when we were in the military. And to me, it felt like it was a good fit.

It's also a team that's grown significantly over the last few years. And if you look at what we did in establishing the Space Force, we took the vast majority were like me that came out of the Air Force. But we also brought together people from the Army and the Navy and the Marines, and we brought people from off the street and out of colleges and out of the academies, and we had to integrate these people all together into one high-functioning team that our nation required. And I see that in IonQ as well. I mean as you've built this whole platform, it's required the integration of all of those. And I'm hopeful that I've been able to share a thought or two as it relates to how to do that and how to do that well to advance the mission and not slow down.

As I look at what our nation is going to require, it's going to require speed to meet this national security environment that we're in. It's going to require trust. It's going to require security and it's going to require scale. And if you look at what you've heard throughout the entire afternoon, those are the things that really have resonated with me. And I think they're perfectly fit for the security environment that we find ourselves in today.

Thank you. Robert?

If I could, Niccolo, I'd like to pivot just a little bit off of the team question because I just can't help myself. I want to build on something that Jordan talked about earlier as a way to explain what I think is the magic of the company.

Jordan showed you some examples of how our applications are creating new insights in something called synthetic aperture radar, which, by the way, was a central theme of the business I used to run inside the government. We used to apply synthetic aperture radar against our adversaries to create more information about their capabilities and their intentions so that we could be better prepared in the worst case.

And what I love about that model, though, is that it tells me -- it shows me what the value of IonQ is because what we're really doing there is we're taking an overwhelming, and I mean that word purposefully, amount of data and information. It's kind of silly to tell an audience in the lower Manhattan that we live in a noisy world. We do. And it's more and more difficult to do that synthesis between the noise and the signal. And what we're now able to do through applications is to do that synthesis for you and with you so that you can find signal. Ultimately, you can find answers.

And so to me, what's most exciting here about what the team is doing is essentially providing what I call a coherence from chaos service, just again, finding the right info at the right time to make that better decision. And to finish on where your question was going, though, with -- just if you think over the past 12 months since we were here last year, the teammates that we've invited, many of which you've seen today, have not just complemented, but they've truly scaled. And the executive order that Jay mentioned actually demands that piece, a scaled ecosystem and couldn't be prouder to be part of a team that's responding to that call.

Well, thank you. So look, just on that theme, and we got time for our last question here. Sovereignty, trust, zero trust. Obviously, domestic supply chains, executive orders. Rick, do you have any comments on that? And then, of course, Robert and Jay would love you to take us home with your closing thoughts as well.

Yes. So I think there's something -- so getting back to why ions in this context. Ions are quantum particles. This is -- I've had the pleasure of knowing Chris Monroe, Professor Monroe for many years. And one of the reason -- one of the ways that he argued for ions was that they're just naturally identical qubits and they're naturally quantum particles. And that gives us -- and because they are natural quantum particles that we can control classically, we can do a lot of the things that people have talked about today. That means we can build low-cost solutions that consume low power, that can be scaled very rapidly.

And what that gives you is not just some anonymous quantum service that you log into some anonymous host, but that gives you a solution that can be deployed locally or deployed remotely that is your own solution to a lot of these technical problems. And I think that's what -- that's the oldest technology that IonQ has. And I think it is uniquely capable of delivering high-trust solutions to the sovereign nations and the companies and ultimately individuals who need to be able to use that capability.

If I could just finish with a quick comment about the paper that was released today about the advances that our scientific team has developed along the lines of Shor's algorithm. IonQ is a responsible, credible partner, obviously, to our customers, but also to the governments that we work with. And I want to credit the whole IonQ team for the conversations ensued, Rick led many of them with the senior most levels of our government because, one, we didn't want to surprise our partners in government. And two, we wanted to be responsible going forward on the safe cracking part of it. And to me, that is the essence of being a good partner. And I know we've raised our reputational credibility with our most important customers, and we commit to that going forward.

Yes. I am not the smart guy. That's why they sat me down on this end and put the smart guy way down there. I went to Clemson University, otherwise known as the Harvard of the South, I guess. But what I do know is that to take the brains of the folks that you heard and to be able to translate those into real capabilities and put them in the hands of the warfighter is nationally critical. That's what IonQ does really, really well. And I will tell you, when you're talking about national security, coming in second place doesn't work. And this company is committed to making sure that we come in first place, and we've got the team to be able to do it.

Thank you, sir. Well said. And I'm going to close here for 90 seconds. I want to transition to our bell-ringing ceremony because we're only 30, 40 minutes out here at this point.

You've heard from the leadership team of IonQ today, and you've heard from some of our Board members and many of our ecosystem partners as well. It has been an overwhelming privilege to watch our team grow, watch our team perform and watch our company, not just scale, but hit technical milestones as we promised. And as importantly, I would argue, even more importantly, hit our commercial milestones time and time again.

You have seen us now for 20, 25 quarters in a row be able to do that. I always jokingly say we can chew gum and walk at the same time. We can hit our technical milestones, hit our commercial milestones. And you've seen us build very thoughtfully the world's first quantum platform. You've seen us become vertically integrated.

You've seen us grow our merchant supply business decisively this year. We not only supply to the leading players in the quantum ecosystem in the friendly world, things like our atomic clocks, which are the most accurate in the world. You can see we've built multimodal networking, and we've led that for a long time. Chris Monroe has been at it a long time. Mihir Bhaskar has been a long time. And together, we have a leading team that I believe will underwrite not just our success in the data center world of quantum computing, but in a world where scale beyond our current concept of it will be demanded because humans, like Dr. Rabinowitz, they will be demanding the very best that we can come up with for decades, not just many months to come.

You've seen us add a quantum foundry and be very deliberate about how we expand integrated photonics so we can provide more value to our nation's quantum ecosystem, to our allies' quantum ecosystem so that they can go faster. And you've heard clearly from Thomas and myself since we announced the SkyWater merger that our commitment to supporting existing SkyWater customers as well as new ones when it comes to everything from the best members of the team as well as, of course, unparalleled IP protections is absolute.

We look forward to growing our merchant supply business with only more participants amongst the U.S., the Five Eyes and the allied world. We look forward to remaining the largest quantum company in history and the leader, not just in quantum computing, but also quantum networking, quantum sensing, quantum security and of course, our foundry business.

I'm grateful for everyone's support. There are many friendly faces in the audience. There are many new faces in the audience. And we're excited by the breadth of demand that we've had for today and the depth that you've been able to see in not just the R&D team, but also the go-to-market team. And the federal team is as much part of our go-to-market muscle as you've heard from the enterprise side of the house with our friends, Chad. Board of Directors has been hugely supportive of our aggressive agenda, both technically and commercially. And you should expect to see only more of that in the coming 12 months.

So I look forward to seeing you all at the podium downstairs soon. We'll start up here with the remarks by our partners at the NYSE. I look forward to seeing all of you at World Quantum Day when we will be back here on April 14, '27. And of course, I look forward to being able to proudly say a year from today, the next time we have an Analyst Day, we have done what we said we would do and IonQ's say-do ratio is sky high and unparalleled despite the fact that we are pioneering before anyone else in the world, I would argue, so many different aspects of this unique quantum platform.

Thank you so much for a great day and thank you for your attention. We'll talk to you soon.

Good afternoon, and welcome to IonQ Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Note, this event is being recorded. I would now like to turn the conference over to Hanley Donofrio, please go Director of Investor Relations. Please go ahead.

Thank you. Good afternoon, everyone, and welcome to IonQ's Second Quarter 2026 Earnings Call. My name is Hanley Donofrio, and I am the Investor Relations Director here at IQ. I'm pleased to be joined on today's call by Niccolo de Masi, IonQ's Chairman and Chief Executive Officer; and Inder Singh, IonQ's Chief Operating Officer and Chief Financial Officer.

By now, everyone should have access to the company's second 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 for 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 SEC filings, including our annual report on Form 10-K for the year ended December 31, 2025, and our quarterly report on Form 10-Q for the quarter ended June 30, 2026, and 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 de Masi, Chairman and CEO of IonQ.

Thank you all for joining us today. I am pleased to report that IonQ Q delivered second quarter revenue of $80.1 million, representing 287% year-on-year growth. This means Q2 2026 is the strongest quarter in IonQ history and our fifth consecutive quarter of record results. As shown on Slide 4 of this quarter's investor presentation, this performance reflects momentum across our entire quantum platform, spanning quantum computing, quantum networking, Quantum Security and Quantum sensing.

Following the successful close of our acquisition of Highwater, our platform now also includes quantum semiconductor manufacturing. Inder will take you through the financial results and outlook in more detail. I want to center my remarks today on 3 key areas defining our progress. First, manufacturing our industry-leading quantum systems on a semiconductor road map with Sky water. Second, expanding our role as a merchant supplier to the U.S. and Allied Quantum ecosystem; and third, delivering defense in depth via a complete quantum-safe cybersecurity stack as we accelerate the time line for full fall tolerant quantum computing.

Beginning now on our quantum computing achievements and the production of Quantum systems with semiconductor manufacturing. One year ago, we announced that IonQ would move our pioneering and commercially successful trapped ion architecture from laser-based control to electronic cubic control. This is a globally unique and powerful control approach, allowing us to rapidly scale our Trapped Ion systems into the millions of cubits using well-established semiconductor pathways.

For our customers, electronic control facilitates more seamless standard enterprise workflows while delivering the lowest cost and lowest energy footprint for logical cubit on the market. IonQ has been consistently executing against this major initiative over the past year. Let me recap that progress because the pace has been extraordinary. For those following along in our investor presentation, please see Slide 5. Last September, we closed our acquisition of Oxford Ionics, bringing the pioneers of electronic cubic control into IonQ.

In October last year, we published results setting the new world record and 2 Cuba gate fidelities, demonstrating 99.99% fidelity without ground stay cooling. These results proved that electronic Cuba control enables world-leading performance via a scalable and production-ready semiconductor manufacturing process. In February 2026, we announced that we had progressed through 3 rounds of tape-outs for our first semiconductor-based quantum chip, and we're preparing to hand those designs to the foundry for production.

In May 2026, we reported that we had received our first chip prototype back. These prototypes demonstrated the critical quality metrics required for our production-grade 256 cubic chips. , while also approaching those required for our 10,000 cubic chips, each milestone has reduced execution risk and positioned IonQ to create value for our customers and shareholders. I am proud to report that this quarter, we received our first fully featured, fully integrated QPUs back from Sky water, and they are now undergoing testing in our College Park facility.

These chips consolidate all the individual capabilities validated by our last few months of prototyping into a single unified chip architecture. Having a full QPU prototype like this is what enables us to start testing integrated systems. These QPUs represent a pivotal milestone in our compute road map and a powerful testament to what IonQ and SkyWater can achieve together. We have moved with conviction to demonstrate our 256 cube technology and plan to begin commissioning systems in 2027.

We are also advancing our control software and system architecture. For those following along in our investor presentation, please turn to Slide 6. In April of this year, we released our walking cat architecture, which is the industry's first end-to-end detailed manufactural blueprint of a fall tolerant quantum computer. This historic paper shows how full-tolerant IonQ systems will execute operations while actively correcting errors. Importantly, this is an architecture that will scale with us as we grow our systems to millions of cubes.

This quarter, we validated key elements of our walking cat architecture on our hardware. IonQ achieved a major milestone by demonstrating breakeven quantum error correction using 2 LDPC codes on a tempo engineering test system. Our published results this quarter are a major validation of our quantum error correction capabilities, which IonQ is proud to continue pioneering. These technical accomplishments demonstrate IonQ industry-leading position, rapid commercial advancement and tangible value creation potential.

Now let me turn to SkyWater, and IonQ expanding role as a merchant supplier to the U.S. and Allied Quantum ecosystem. Last week, we closed our $1.8 billion acquisition of SkyWater, creating the only vertically integrated full stack Quantum platform company. Together, IonQ SkyWater own the design, fabrication, packaging and deployment of our systems, entirely onshore entirely entrusted U.S. facilities. For IonQ and our partners, this has a profound impact, as seen on Slide 7. This is a transformational combination that enables IonQ to materially accelerate our quantum computing road map and our ability to design, test and iterate on QPUs at speed.

Oxford Ionics brought us proprietary world-leading electronic tube control technology to scale cubic counts on standard Tiligon. SkyWater brings a world-class semiconductor foundry under our own roof to fabricate those designs. This past quarter, we closed the loop. QPUs designed with electronic Cubic control, built at skywater and return to us as our first fully featured chips. IonQ and SkyWater have together carried a design from concept to fabrication, proof that our strategy is translating into results.

As you can see on Slide 8, with Sky water, we're also pleased to expand our role as the leading merchant supplier to the broader quantum ecosystem. Even before the [indiscernible] IonQ served as an important merchant supplier with our industry-leading atomic clocks, sensors and networking products being sold to other leading quantum companies. With SkyWater semiconductor technology supporting multiple GPU modalities, IonQ is now the world's largest quantum merchant supplier, delivering the critical technologies every quantum company needs.

Our goal is to accelerate all quantum companies working with us, ions, Adams, superconductors, photonics, sensors and networks. I'm also pleased to share that we are further expanding our merchant supplier capabilities in Q2 through our acquisition of UC Santa Barbara spin-off Nexus Photonics. NEXUS brings foundational technologies that enable chip scale integration of lasers, modulators and optical subsystems for the miniaturization and mass manufacture of quantum systems.

We have already begun integrating these solutions into our next-generation atomic clocks and gravimitors. For Quantum networking, these integrated photonics capabilities move us closer to data center scale distributed quantum systems. We plan to supply these critical integrated components to the broader quantum ecosystem, as part of the industry's first dedicated Quantum Photonics foundry offering at SkyWater, As the cornerstone Quantum merchant supplier across the U.S. and allied landscape, we have the procedures in place to protect our customers' IP and can assure our customers a partnership focused on accelerating their road maps.

Turning to Slide 9. I want to now address Quantum Security and QDa, a topic rapidly moving to the forefront of boardrooms and defense agencies around the world. Quantum computing is a paradigm shift, not only for every aspect of Applied Science, but also for cybersecurity. As I foretold a year ago, the time line for cryptographically relevant machines the threatened RSA encryption is rapidly compressing.

Over the past 15 years, the estimated number of cubits needed to break encryption has dropped by 4 orders of magnitude. Simultaneously, IonQ accelerating our path to 10,000 cubics in 2027, positioning us at the forefront of this security reality. As you can see on Slide 10, IonQ uniquely provides defense and depth via our complete quantum safe cybersecurity stack. Post Quantum's cryptography, is a critical first step in protecting existing infrastructure at scale. Longer-term resilience, however, will increasingly rely on advanced quantum communications technologies, including Quantum Key Distribution.

To meet those needs, this quarter, we launched a new QKD product that allows customers to send multiple data types across existing municipal fiber networks, making enterprise-grade quantum security practical, deployable and cheaper to operate. We welcome the U.S. administration's June 22, Quantum executive orders. which recognize that Quantum technologies are inflecting. Quantum leadership is emerging as the defining technological competition of not only our lifetimes, but I expect of the 21st Century itself.

We enter the second half of this year as a clear technology leader, critical merchant supplier and vital ecosystem enabler for the entire quantum industry. With Sky water now a part of IonQ, we are derisking and accelerating multiple engineering pathways for our next-generation quantum chips. In parallel, we are also helping to create the manufacturing and supply chain foundation required to accelerate and scale the entire U.S. and allied Quantum industry.

In closing, I will say that our conviction is that Quantum light classical before it ultimately scales on a semiconductor foundation. That is why we have built a manufacturable silicon-based platform and why we are increasingly focused on the measures that determine real-world value. Cost and energy for logical Cubic and the cost and time to solution. Those are the metrics that allow quantum computing to serve industry and government dependently and at scale.

Around all of it sits in interoperable software and enablement stack with an access strategy that spans on-prem deployments and every major public cloud. This is what defining an industry looks like. I'm now delighted to hand over the call to Inder.

Thank you very much, Nicolas. Very, very excited to be reporting our strongest quarter ever in the history of the company. And as Nicolas said, delivering $80.1 million in GAAP revenue, which is 287% growth year-on-year. Not only was it our strongest quarter ever, it also exceeded our own expectations by 20%. We continue to be pleased by our progress in the market and that progress is being validated by the financial outcomes we are seeing and reporting to you today.

As I cover our financials in greater detail, you can also see some of this in our investor presentation starting on Page 12. The largest driver of our revenue outperformance this quarter was the continued momentum of deploying our fifth-generation quantum computing systems. This quarter, we began shipments of subsystems to the Korea Institute of Science and Technology Information [indiscernible] and those systems are currently being delivered and assembled in Korea at the customer site. Similarly, with Quantum Basel in Switzerland, our fifth-generation machine is now in final assembly on site, right next to the fourth generation machine they had previously purchased from us.

I believe this represents the world's first deployment of 2 consecutive generations of quantum computers next to each other in a commercial setting ever. Recall that we had told you previously, we were ramping production to do exactly this, deliver multiple global systems at 1 and at scale. The bottom line is that we continue to innovate in ways no 1 else has done so far and at a velocity that we also think is incomparable.

Speaking of organic growth within that, our Q2 organic revenues grew 132% year-over-year based on these global quantum computer deployments that I mentioned and others, I would remind you, for the full year, we are still expecting organic revenue to grow 100%, as we guided at the very start of the year. I'm delighted to see that the acceleration at least in the current quarter is showing the strength of that business. This year, tempo quantum computing revenues are the principal driver. And next year, we expect our semiconductor-based computers at Nicolas just mentioned, to become the main driver and the future in our road map as we should from laser-based to electronic-based control of cubes.

We also have made excellent progress across our space-based products. And recently, we reported that we now have 84 Sky loom optical communication terminals deployed on Orbit, which is double the number from just a year ago. We also began work during the quarter for the U.S.-based development agency with the Halo Europa contract, completing key design milestones on the path to delivering functioning satellites into orbit to support a multimodal constellation, prime for Quantum solutions. All of these achievements show the progress that we're making across our product portfolio.

As we've done in recent quarters, let me now provide some metrics related to the drivers of our revenue. And these will be around geography, commercial and multi-product. I would remind you that we are sharing these in the spirit of transparency and as color. But as you can imagine, these can vary in any particular quarter. Together, Nicola and I when we focus on the business, focus on the trends of these, and we're very encouraged by what we're seeing.

Let me start by talking about geography first. Approximately 50% of our revenue in the quarter was derived from international customers, spanning countries such as Australia, South Korea, Portugal, India, Denmark, Germany, Israel, Japan, just to name some. This quarter was especially strong for the international metric due to our quantum computing deployments, as I mentioned, in Kist and Quantum bottle.

We are delivering solutions in over 50 countries around the world, and we have inbound increase from anymore. We may not turn all those into customers, of course, because pipelines are very, very large and also require effort. And we believe we can win in the majority of those, but the breadth of countries we are looking at also we want to make sure we remain focused on our best investments for the best ROI.

The second revenue metric is commercial resin. In the quarter, we once again saw 60% of our revenue come from commercial meaning non-U.S. government customers. This tells us that our customers are putting our solutions to work in real-world applications, not just in funding research. We, of course, expect government to grow and of course, this could skew the metric and become more government in any given quarter. Of course, I'll take that happily.

Third, we continue to be excited about the multiproduct dimension of our revenues and we believe there's a lot more we can be doing in Europe. As an example, 1 very obvious example is to drive both sales of quantum computing and quantum security which are 2 things we're really starting to see in high demand among our portfolio. To me, this is low-hanging fruit, and the sales team are working to create the incentives to make things happen and turn it to revenue. even more than we're seeing.

On a year-over-year basis, our multiproduct sales grew by 40% and now comprise about 25% of this quarter's revenue. This represents strong growth year-on-year of force. A priority for us remains diligently driving our cross-selling opportunity even higher. Having more than 1 product means we can sell more things at 1 time.

Let me now discuss our remaining performance obligations, or RPO, a widely used measure of forward revenue visibility. We ended Q2 with $485 million in reported RPOs, up from $470 million in Q1 and up from $122 million 1 year ago. This is even though we had 1 of the strongest quarters. So we drew down RPOs into revenue, as you know, happens and we replenished it and then some as well. [indiscernible] can vary from quarter-to-quarter. But at any 1 point in time, they provide visibility into revenues that will turn -- that will appear in more than one year. So we'd like to have that visibility as we try to grow this business and continue growing it, this will remain a focus for us.

Turning now to operating expenses. GAAP operating expenses for the quarter were $417.3 million or $201.2 million on a non-GAAP basis. Our largest area of OpEx continues to be R&D as we pioneer transformational quantum technologies and fuel our innovation engine, $160.6 million of our GAAP OpEx consisted of R&D. In addition to R&D, as we've told you last quarter, we are also investing in go-to-market resources as the enterprise opportunities, enterprise-wide opportunities for us continue to emerge.

Overall, our investment approach is to focus on execution and to creating operating leverage over time. By ramping our manufacturing to meet demand, an effort that Sky water will help us with further. We are now already delivering multiple global compute systems simultaneously, and we're preparing to do even more next year. Moving forward, we will continue to strengthen operations by optimizing our supply chain and consolidating operations across the company. And we'll maintain a tight discipline on all things, quantum and investments in those areas and through vertical integration with SkyWater, as Nicolas noted, we expect to be able to lower IonQ's total development costs for Quantum hardware over time, delivering industry-leading cost per cubic and create further structural cost advantage.

Our focus on long-term investment allows us to attract industry-leading talent density, create innovation velocity and drive operating performance. Our capital strength also allows us to invest for the long term, which is essential of force in quantum even as we execute quarter-to-quarter-to-quarter. Moving on to adjusted EBITDA. We reported negative $120.3 million for the second quarter.

As we reported last quarter, our spending with Sky water increased as we found success accelerating our technology road map. This quarter, that higher spend resulted in about $20 million of additional spending included in that number. Additionally, we had approximately $10 million of higher investment related to preintegration costs, scaling the business, really in anticipation of Sky orders closed and also to securing our supply chain.

As most of you already know, our GAAP net income is volatile from quarter-to-quarter and depends on warrant valuations. We reported a GAAP net loss of negative $1.9 billion for the second quarter, primarily due to a roughly $1.6 billion noncash impact from the mark-to-market valuation of warrants as required by accounting conventions. Needless to say, this accounting impact does not reflect the operating fundamentals of our business.

Let me say we are very excited to welcome SkyWater IonQ. I'm pleased to welcome Tom and his team to execute on our world-leading technology road map and work together with us as we deliver our solutions for our customers. As a reminder, because IMP and SkyWater operated as separate public companies throughout the second quarter, today's results and any guidance we provide only includes financials from IonQ. Sky water is expected to file its own 10-Q for the second quarter in the coming days.

Now turning to guidance. We had a tremendous quarter, outperforming even our own expectations, and we are raising our full year guidance for IQ to a range of $280 million to $290 million in revenue. This guidance range applies only to IonQ, as I mentioned. Because we have operated as a combined company for less than a week, we need to integrate our operations before providing combined company revenue or EBITDA guidance. A number of things will be looked at, for example, we estimate that our full year spending with Sky water under our commercial agreement would have been approximately $120 million of spending for us converting into revenue for them in fiscal year 2026.

Following the close, we will be looking at eliminating some of this intercompany revenue and other costs as well. There are additional accounting adjustments that are acquired as our company's mark, such as, of course, purchase price accounting treatment and some contracts we have to look at as well. So we will come back to you with combined guidance down the road. But for today, we're talking principally about IonQ.

In summary, we delivered a fact quarter of phenomenal growth, and we could not be more bullish on the long term and the potential for our company. We recognize, as with any company, execution is always key. And there are always risks that we must work to mitigate, and we are laser-focused on ensuring we do that. We continue to expect approximately 100% growth in our organic business and 100% growth in our Quantum platform strategy as well.

With that, I'd like to turn the call over to the operator for Q&A.

Operator?

[Operator Instructions] The first question comes from Kevin Garrigan with Jefferies.

Yes. team, congrats on the great results. Just to start, regarding the Andra and Sandia MOUs, what are kind of the next steps for converting these into development contracts or system deployments? And are there any dollars that are currently included in RPO or the 2026 revenue outlook from these?

I'll take the second part of the question, for sure. I think there are no dollars that we included in RPOs from future business coming from that relationship. We are incredibly excited about that relationship -- it brings together sort of the best of passive solutions we have and the solutions they have as well. So we think there's a lot of potential going forward. But no, we have not included anything in RPOs for what we might get from now.

Yes. Look, all I would add is, obviously, the White House has issued a couple of important executive orders, right, 1 on quantum security and 1 on a computing sensing and networking. Taking them together, -- it's a great reflection of IonQ total platform strategy, right? I think we're the only quantum company in the world, probably the only company in the world that can say we actually embody all aspects of both executive orders in their totality.

And so these MOUs are obviously very much a recognition of the fact that we have a lot to bring to bear to help not just our nation's government labs, and some of the most historic and important ones out there, but also, of course, support the Department of War with a range of applications, which obviously we haven't fully enumerated because not only of the confidentiality involved in these projects, but also, as you rightly pointed out and Inder rightly addressed, this is not yet in our numbers because it is still in an early stage.

We'll report more on these as they develop. Not only is there an earnings call, but we have an Analyst Day coming up also Investor Day coming up on September 8.

Yes. Okay. Got it. Perfect. And then as a follow-up, so the 25% of customers that are now utilizing multiple products -- what products are most frequently bundled together? And are those engagements generating larger contracts or higher renewals that you're seeing?

Well, I think they're creating a stickiness environment for us, most importantly, -- and having a one-stop shop where customers can come and get what they need now and then get what they need next. Those are good validators. I've seen that, and Nicolas seen that in the dozen plus companies that he's been in as well. So it's an important indicator for us that we have the right solutions under 1 roof. And also, to your point, like the most natural thing that we're seeing happen are groupings of products, for example, in the sensing and space environment, which we mentioned earlier, but also the demand for computing, which continues to just be -- I'll use the loose word and forego for us is also now causing a lot of companies, especially with the executive order that came out recently around preparing for a post-quantum QDa type of environment for security, frankly, to become more of a topic.

So more and more customers are talking about security. And in many cases, they're also saying, let's look at your computer use cases. We're happy to see all that happening. Networking obviously comes in as the next thing in terms of connecting nodes together and also connecting compute devices together. And I think it's a matter of time when we start to see sensing perhaps play into this in some way as well. But we're looking across the portfolio. We're happy to see multiple TAMs available to us, and we're happy to see some of the world-leading and if not the world leading products in each 1 of those TAMs in our roof and allowing the sales team to take a land and expand approach and whatever makes sense for the customer, basically meeting the customer where they are.

Operator, could we move to the next question, please?

Our next question comes from Craig Ellis with B. Riley Securities.

It's Craig S. It seemed like there were 2 analysts called there, but go ahead. So one, congratulations on closing the SkyWater deal, and congratulations to Tom and his team. The first question I wanted to follow up on was on the road map comments that you provided on Nicolo. What I want to understand is greater detail on what you're hoping to accomplish with the end progress systems test. What are the key milestones that you want to be able to check off.

And as we look at customer commissioning in the first half of the year. Can you help us understand what the key execute pulse are as you go from the system test to customer commissioning?

Sure. Well, look, INQhas had systems in the marketplace that have been able to run applications for the better part of a decade. -- we've been on all 3 public clouds, as I mentioned, since 2020 and early 2021. So we're no stranger to moving from prototypes to systems. We already have a compiler that works. We already know how to obviously run algorithms, and we've got a full stack software team and control team, as I mentioned.

The key shift for us from tempo and where we've been building machines the last few years to today's Oxford Ionics and SkyWater, electronic cubic control is, of course, that we are putting on Traps on semiconductor chip, and we're scaling from there from not just 236 chips, but to 10,000 and obviously, higher numbers, 100,000 and 1 million in the coming generations. Now -- we're doing a number of things in parallel here. So we are working on these 3 generations of those chips at the same time. And so as I mentioned, we're making progress on the 10,000 cubic chip at the same time as we have taped out and nearly finalized prototypes of the 256 chip.

You can imagine that there are then other components to getting a fully commissioned system into the marketplace. So it's a chip plus, of course, an enclosure and the rest of the kit and caboodle here. The chip was the hard part, candidly, which is why we have provided a lot of granularity in the last 6 months -- last 9 months on the progress from closing Astronics in September last year to our February earnings call, our May earnings call and now our August call.

So we're feeling great about the translation of a 30-year R&D base building full systems that we've been selling and putting in the marketplace and changing kind of the guts of the system, if you will, from bulk optics and lasers to the semiconductor electronic [indiscernible] control system. SkyWater has been delivering great as a commercial partner. Tom has been a great partner of ours in the last year. And we expect that closing this transaction will help, obviously, on the margins, not only accelerate the entire industry, but of course, IonQ of that industry with our iron trap chips.

So you'll get an update from us in every earnings call and between that, if we have other REG FD-compliant events and conference calls and so on. But I think the -- the bulk of the challenge here is now under our belt. Once we have chip prototypes that are coming off the line, the rest of this is a solid problem for us that we've done for many years. And so you're correct. We expect to be commissioning systems and deploying systems and getting the manufacturing lines pulled up in the first half of next year. And that remains all on track.

That's helpful. Then the follow-up is for Inder. It's on the topic of the executives orders? And just clarifying some of the interaction that you're seeing or check since those runout suggest that government agencies have been very active, accelerating their activity with quantum entities. And you certainly have the broadest platform out there a long time in the market with relevant capabilities. And so the question is the engagement that you're seeing post executive order, really government entities? Or is it also enterprise customers and to what extent would one of those groups be greater than the other?

Yes. Look, I think the nation writ large is moving towards now adopting and implementing what the -- not just the spirit of what the EO is trying to do, but also trying to get there earlier. I think there's a realization that didn't exist a year, 1.5 years ago that the evolution of quantum computing will be so rapid that IonQ will be able to generate computers at the rate we're generating them now, I'd say, generating because we're almost like a producing them and not quite yet. But each one is exponentially more powerful than the previous one. So as you go there much more quickly, the sense of urgency is rising.

I would say that's happening not only in government as you mentioned, but also importantly, in data heavy industries. So financial services is definitely waking up to the cold, hard reality that at some point, RSA 2048 and other encryption protocols such as ECC-236, may all be broken. And the debate is around it in 2 years, 3 years, less or more. I think you've heard from many companies now that, that is getting very, very close. In addition, the nation itself is thinking about an adversary or 2 or more around the world, frankly, who are also trying to get to the same outcome.

And I think that did not exist as a dynamic. So we've had a number of calls Nikolai CEOs all the time. Our sales team does. I join many of those. And in each one, security now enters into the discussion. A year ago, it was about computing. Now it's about computing. How do I, of course, create more revenue? How can I use your solutions to do things that classical can't do, but equally, how can you protect me from the inevitable. And if the inevitable is 2 years ago, or 3 years away, it doesn't really matter. It's not 20 years away.

So it's pretty broad based. In parts of Asia, where we already have a very strong presence with our QKD solutions. That's been evident for a number of years. They live in a geopolitical environment where it's risky, and every country is considering what to do. But we're seeing demand from around the world. And importantly, now we're seeing demand from the United States. I think that there's an understanding that you have to basically batten down the hatches, not just at the software level but also at the hardware level, things that will protect your crown jewels and allow you to have data in motion be secured end-to-end in a post pontoon world.

So I think it's pretty broad-based. Some will move faster, others will lag. That's just natural. But those that are data-intensive industries, I think, are realizing that they need to protect for something that they have never seen before. I mean, Mitas is, frankly, just the beginning. We're talking about a post-quantum environment in which everything that Mythos is able to exploit actually is rendered even less protective and Quantum will eclipse a lot of the things that Mythos is bringing to light today.

Our next question comes from Quinn Bolton with Needham & Company.

When we -- if you can hear us, we're ready for your questions. Operator, maybe Quinn is trying to unmute himself. Should we move to the next 1 -- Yes. Quinn, just get back in queue, we'll come to your question.

Our next question comes from Joe Moore with Morgan Stanley.

This is Elaichinski on for Joe. So now that Sky water is going to be part of IQ. Can you talk about how you see the foundry business evolving over time? Do you expect it to operate mainly in support of IQ's own road map, serve the broader Quantum ecosystem or both? And then how do you think about Sky water's competitive positioning as more companies invest in quantum focused manufacturing capabilities?

Sure. I'll take those. So I think we've been very clear since we announced this transaction in January and again today on this call that we are a merchant supplier. We are the leading merchant supplier to the sector, and we have every intention of continuing both that posture and reality. And so as we've said the last 6 months, I reiterate here, we are very focused on ensuring maximal IP protection for all customers. Sky water comes with the pedigree doing that and a track record doing that and has been very successful as the only Quantum foundry in the United States in the last few years.

On a go-forward basis, just to be clear, for everyone listening, when we say merchant supplier, by definition, we mean we are supporting the industry, and we're doing so with the highest degrees of physical and digital IP protections and physical and digital security. And so we are selling, of course, as I said, our TomacClocks, our Integrated Photonics, our Quantum Networking solutions and now also our Quantum foundry solutions, all under the umbrella of SkyWater as a merchant supplier.

This will not change. We are a reliable partner. This is a key part of our commitment to our industry and to our nation. We think it's important for both national security purposes and national economic security. And to answer your second question, SkyWater is the only canamfoundry that operates today. They also operate at a price point in the 200-millimeter segment that we think is going to remain incredibly compelling for the foreseeable, if not even distant future for the quantity.

So we have no doubt that our sector is growing. We have no doubt that Art will have more quantum foundries over time. But obviously, it takes time to build new foundries, and SkyWater has been at this for the last date. So we expect to be very busy, both busy supporting IonQ, vertically integrated ambitions and Oconics ambitions for electronic Huber control, but also as I mentioned, supporting every player in our sector who works with us presently or would like to begin working with us. And we're beginning those conversations now and finding everyone very receptive to it, whether or not you are in the superconducting modality or in photonics, ions, Adams, et cetera.

Our next question comes from Troy Jensen with Cantor for Gerald.

Congrats on the great results. Michel, just to start with you, I'd just be curious if you could provide any kind of a dark QDI update. Obviously, you guys made Stage B, and I'm assuming there will be a broader state announcement soon.

Yes. I mean I don't think that we are able to announce anything before DARPA does, and they've been, I think, pretty clear on that all the way through this program. So we will all have to watch this space at the same time. I think, Troy, we have invested, obviously, aggressively not just the last Three quarters with the last 30 years to ensure that IonQ continues to lead this industry that we created. We built the world's first Quantum Logic gate in 1995.

We've published the world's first shovel-ready blueprint for full tolerance quantum computing. And crucially, these are manufacturable, right? They're manufacturable at scale. They are at a compelling price point. They're a very compelling energy consumption and let's just say, space requirement perspective as well. So you can see half a dozen of these systems and Three of our offices at this point as we're assembling prototypes and moving forward, not just on a 256 chip but also a 10,000 chip and generations beyond that are on the design phase as well. So we are -- we're learning every quarter as we report these milestones.

And we've been very focused since I became the CEO of this company on ensuring that carnocomputing is a mass market reality not a niche phenomenon, right? So we keep an eye on how we can make these machines robust, how we can make sure that they are affordable, not just to the government and to nation-state buyers who want sovereign systems, which are important, and we will supply those and we do supply those. But we also foresee a day where enterprise can afford these in their entirety in their facilities and where multiple branches of governments can afford them in their facilities and control the data and the algorithms and the operation of these machines, which are really no larger than the machines we've been shipping the last half a decade or more.

So we have a lot of experience and making this manufacturable. We think our approach obviously is commendable, both for national security and national economic security perspectives. We continue to work closely with DARPA and we will update the market following DARPA any mentor makes. I think we've been clear to announce things, Troy, on earnings calls, we're able to, and you've seen our other DARPA releases, right? So the DARPA HARC program, makes, we announced earlier in the year.

There are a number of DARPA programs that we're involved in when you look at the broader IonQ platform. So it's not just computing, but of course, it's networking. And it's other aspects of what we're up to that I think you can assume that we are proudly involved in.

Great. answer, Nicola. Maybe a follow-up for Ander. On the commercial side, I guess, I'm assuming most of the commercial may be security and maybe some other stuff, too. But I guess I'm most curious if there's going to be software in that. I know you guys talk a lot about software applications and working with partners. -- would you guys actually own the software IP? Or are you just kind of partnering on the hardware that the IP drives?

Yes, great question. We're delivering the full stack. So exactly as you noted, when we talk about total revenues, the work commercial revenues for that matter. It includes the hardware solutions that we have around catacomputing and the applications that may run on top of it. you can also actually ask for Qi service for us. So we talk about the delivery of machines, but we also provide quantum computing as a service. And we don't often spend a lot of time talking through that, but what we're finding is incredible growth, even faster than organic growth in computing in Q guys at the same time. That's a very high margin business for us. So we're happy to see that developing.

What owning the machine and owning a sovereign system allows you to do is create your own applications. And in many cases, -- the customers that we work with will ask for our help in creating some of those quantum solutions. In some of those cases, we may own the IP for generalized development of algorithms that we can apply elsewhere. In some cases, the customer will say they want to own it. So it meet the customer where they are. But yes, very much so. We have probably under our roof, one of the largest, if not the largest, algorithm development team in Quantum in particular, and we're going to continue investing in building out that team.

We've deployed it in 2 ways. One is centrally to create algorithms that work across many different end markets for many different customers. And we've also deployed it directly with our sales team in technical sales in helping the customer understand the application, build it for them forward deploy engineers. Remember, we are building an ecosystem all around this. I think yes, we're supporting other sponsor beauty players as well in their endeavors. This industry needs to grow together.

We are the pacesetter. We deliver the hardware, we deliver the software, we deliver the security, we connect an chanmachine. It's a philosophy, I think, that is a very scalable but also very long-term resilience. So absolutely. high-margin software through application development, high-margin CCAS services, even computing services where the customer prefers that.

Our next question comes from Gary Mobley with Stonex.

You're effectively raising your full year outlook by $20 million at the top line. I think as well, you're also reiterating 100% organic revenue growth, same as last quarter. So help me reconcile what's changed in the last 90 days? Is it more contribution from some of the acquisitions that's driving the upside? And then what really drove the upside in the just reported June quarter?

Well, as I mentioned, I think that -- and thank you for the question. As I mentioned, our organic business actually grew 132%. And more than we thought it would be growing for the full year actually. So we had a very strong quarter in organic, which essentially, if you think about computing, that's really what organic was 2 -- and we've seen that grow 80% in that '24 to '25 period. We've talked about 100% growth this year happened to be 132. So you could argue that computing actually drove the largest portion of our growth. At the same time, as I mentioned, we had sales happening across the other product lines as well.

So all of those cylinders are firing. They don't always fire at the same time in the same way, of course. So we don't draw a straight line up into the right from any 1 of the data points. But we have a portfolio of products. We're no longer a 1 trick pony. And I do think that we will see growth happening in the other areas like security, like networking, like sensing, like the things that we were talking about around putting high-bandwidth gigabit speed bandwidth laser terminals into space, delivering solutions for sovereign either nations or sovereign enterprises that are looking for bandwidth and connectivity.

So everything I'm pleased to say it's really starting to show factors of growth for us. And yes, computing organic grew the fastest.

Okay. Great. And as a follow-up, I wanted to ask about Sky Waters business. Prior to you closing the acquisition, I believe the consensus revenue view is about $610 million -- and are you saying in consideration of the close, you have to figure out what intercompany revenue gets eliminated from that? And can you speak to how Sky waters business has been trending, I would assume maybe there's some upside to that just given industry conditions out there in the semiconductor space.

Yes. Look, I'd love to be to tell you that we've spent 3 months looking under the hood at Sky water, we have it, right? And that thing just received approval and we closed quickly on it, as you know, very, very recently. So it's days. The thing that I wanted to point out is the same thing we pointed out last quarter. We have had a commercial relationship with Sky water to help us create the semiconductor road map and accelerate that road map. Nicola pointed to the success we're seeing there.

We fund SkyWater under that relationship and the $120 million number I gave you is our view of what our forecast was for this year, which, by the way, was higher than what we thought at the beginning of the year because we are seeing more success in spending more with them. And when we combine the 2 companies, intercompany revenues always get eliminated as you know. So 120 going out the door from our side in theory 120 coming into their side, would be at your company at that point.

So what I am saying is I'm not commenting on their number. They'll find their queue tomorrow or the day after, perhaps, probably Friday, I'm guessing. And you'll see more details in there. as we come back to you and give us a few weeks, if not a month or so to come back to you with what those eliminations are, I've given you a hint already. I think there are some other things we have to look at within their contract with their customers, et cetera, just fine-tune things. But we are very, very excited about having the ability to leverage their knowledge base. They are foundries, help them expand their own service to the other quantum players.

We bring capital to the table that, frankly, they did not have, right? So this is a very symbiotic combination of companies that's going to help the entire industry. But yes, there's some revenues on their side that we are proud of their Pantene ecosystem as well. I think we're their biggest customer already. That revenue has to be eliminated on consolidation.

Our next question comes from John McPeake with Rosenblatt Securities.

Slow on the trigger on the STAR 1, I guess, high teen, Nicolo Inder, nice upside to 2Q and guidance. Congrats on closing the deal and the organic growth. I like to end Fego Inder, you have 256 high-quality physical cubits. -- commissioning in the first half of next year a path to 10,000. I would think this would be attracting serious interest from new customers. Is there any color you can give us there on interest. You guys do have the most aggressive time line now. You have the fab, you're iterating?

Yes. So look, I'll hand this to Inder as well. But I would just stand back and say what we have been executing on the last 6, 7 quarters, has taken this company from being, I think, a quantum computing company that's been around a long time, so I would argue strongly the leading quantum computing company, but we don't stop there. We're doing a lot more quotum computing than we've ever done. We're doing it a lot faster. And we're obviously doing it in a manufacturable and robust way that has a path to full data center solutions at price points, energy consumption ratios and space that allowed us to be an industrial solution for governments and enterprise. But we actually don't stop there, right?

We're also leading the defense and depth of quantum cybersecurity income security. We have, I think, all of the patents that matter for Quantum networking so that you can build not just quantum memory and distributed quantum computing, but also distribute entanglement. We've talked about our atomic clocks and our quantum sensors, Those are grivimitors inertial sensors, the most accurate atomic clocks in the world. And when you combine that with the fact that we're a full theater full or fighting domain platform, We have quantum solutions on submarines through the satellites, and we are advancing and investing in all of those growth factors.

None of these are on ore. They are all in hand, and we've reported the last few quarters on how many of our products are being taken revenue is coming from multiple product customers and partners. So I think the proof is in the numbers, right? We are probably about half of, I would say, the revenue in the whole sector, if not to make sure the revenue in the entire public sector -- and we're also probably the majority of the R&D spend as well. And so we're pleased with the fact that customer recognition is very much showing up quarter-on-quarter when you hear numbers like 287% growth year-on-year. And Andrew just said in the prior call, it was mostly organic, growing faster than we expected quarter-on-quarter. It's not the first time we've said that.

So -- we think the White House executive orders are a nice reflection of the fact that Quantum is inflecting. You can see the quantum is inflecting in our numbers. And you can see that there is -- the scale difference between what we are doing here across our Quantum platform to deliver real-world solutions and revenue relative to any other company on the planet. So it's not just the technical road map, that we are medium beating, but we're medium beating on the commercialization of Quantum. And as Inder rightly said a few minutes ago, we are the pacesetter for this sector. And the scale center for the sector. And we have every intention of continuing to be both of those as we continue to invest to bring Quantum to now and make quantum happen in weeks and months, not in years, right?

And so -- we don't intend to take the pedal off -- foot off the paddling point and put up the gas. We will continue investing to ensure that we are making things happen sooner than we thought. And we see great signs that all of that is achievable, possible and the customers for a variety of reasons are realizing that as we invest, things happen sooner, things move to the left on our road map, as I've said before, right? A year ago, people thought that QDa was the something happened in the 2030s. They now understand it's something happened in the 2020s. And the same thing has happened with our demonstrations of Quantum Advantage and higher what's called TRL levels, technology readiness levels on our quantum sensors for deployment on submarine satellites.

Andrew, do you want to add to that?

I think Nolan. I think the only thing I would add is just to underscore kind of what Nicolas said. Two things matter One is, do you have a path to getting to fall tolerant computing? Do you have the architecture? Have you been able to sort of lay out all of the implications of what that entails? Can you put it all together? That's 1 thing. The other thing that customers really care about, can you actually build it and will you be the first to go. And where we're seeing difference is an increasing belief that we can actually build and deliver on it because guess what? -- fifth-generation machine being deployed now, sixth generation being deployed next year, seventh generation the year after that in there is fall tower and computing also being delivered.

So we're not just talking about a design that might come to life 5 years from now. We're talking about a full tolerant computing device that is in the foreseeable future. And we think with this pie water acquisition, the Oxford Dionic acquisition and by the way, between those 2, just to remind investors, we spent $3 billion to make this happen. More than most countries. So as a company, we believe that we will deliver on it. And speaking with Tom, he inspires incredible confidence in saying, hey, I can do that, CMOS scaling, I can do that. substrate, we got it. Give us the blueprint.

So having both companies under 1 roof, I think, unleash has a lot of potential for us. And frankly, I think the rest of the industry benefits also because, again, not to belabor it, but like the capital we bring to Sky water is equally important to the rest of the industry. So we can talk about a Blueprint, we think we can deliver the blueprint and where customers are now showing that is by talking to us and saying, okay, we'll take your tempo, but I want to be first in line for your [indiscernible] or first in line for your 10,000 cubic machine. And we're saying, yes, by the tempo and you'll be first in line.

That makes a lot of sense. If I could just have 1 follow-up quickly away from compute. I've been having some conversations with people about PQC -- and basically, the message is that it's not probably safe from quantum hacking. And you guys obviously have some great QKD assets. Curious if you're seeing any momentum there? Any thoughts about the reaction to the threat from these machines, which I think is starting to happen.

So I'll say a couple of things here. I think Andrew will add as well. We've obviously been early and we are the largest player in the QKD sector for a reason. And you covered a lot of that reason in your opening question, which is Nis asked for submissions of PQC algorithms almost a decade ago foreseeing this moment would arise. And I think it was something like 81 out of 83 submissions they received last decade. -- we're shown within 90 days to be something which a quant could probably track. Now there's 1 or 2 that are left. But if you're following what's been going on with Mythos like activity, and LLM like activity.

These capabilities are already looking at PQC and pointing out that a number of the PTC algorithms will not be nearly as uncrackable as people thought weeks ago. We've always believed that the code making code-breaking race will be a continual one. And it will happen at the software level, of course, because you need PQC everywhere and that race between code makers and code-breakers has been going for at least back to Julius Caesar, it's probably a 10,000-year old process. But at least a 2,000 process, and it will keep going.

But at the same time, I think there is increasing recognition by both governments and industry that the investment in QKD that you've seen in Europe just in the last year, where we've run out a number of Quantum distribution network in limitations in Europe and the investments that, of course, were made in Asia. In Korea, we've got a vibrant QKD network and of course, China has made the largest investment in QKD in the last decade, both on the ground and space.

And I think it's extremely likely, if not almost a certainty that the Western world in its entirety, not just Europe, is going to recognize that it's unlikely that billions of other people haven't thought through this problem. [indiscernible] is something that is -- requires a violation of laws of physics to hack and crack. And that has huge advantages not only in a quantum era in a world of quantum computing let's just say, industrialization and mass market scale, but it also, of course, helps you today in the era of Mythos.

And so yes, absolutely. We like our position in quantum computing. We also love our position in Quantum Security where we're the only coming in the world that offers defense and depth, and we've been at this for over a decade. We also like our position, of course, in quantum sensing in networking. But all these technologies work together. The fact that we have a big position in tangible distribution quantum networking means we understand how to deploy security and networks. And the fact that we've been commercially deploying sooner than everybody else, not just in computing, but also in networking security means we simply have a workforce that has more practice, right? This is kind of akin to where our wonderful military is right now, where other people are trying to build navies and aircraft carriers, but no one's actually deployed.

And how to combat situation before with merely with their submarines, satellites and aircraft carriers. And so that advantage is a real one. And I always like to remind people that from the day that your computer turns on, which for us was 2017, you begin a multiyear arguably decade process of building compilers, making algorithms run, deploying your computers, showing you can solve useful problems. The same thing is true in the security space, the same thing is true in the sensing space. And so we're really proud of our technical teams, but we're also proud of the fact that as the joke goes with the chief job said, true artist ship we ship and we deploy it.

And so I think this is -- in short, what you started in your question was is it spot on, which is we are seeing inbound and we are seeing huge upticks in receptivity now that the White House has effectively issued an order that all U.S. infrastructure needs these protections.

And look, I think that covers the basis in terms of the things that we can bring to the table. I think 1 other thing I would just add for you our calculus is we're going to be living in this hybrid world for a long time. even when it comes to security. We'll have classical security infrastructure employed, quantum security being deployed. We now are putting together the solutions to be able to scan networks and look for vulnerabilities that customers have on their networks against quantum. Others are doing it for plastic. We can now do it for Quanta and actually help CTOs, -- some of these discussions start actually as a CEO.

And they want to know, am I vulnerable? Vulnerable where. So we can provide that math on day 1 for them. help them understand where the worst polities are and protect those now, whether they choose to use PQC or QKD or another flavor. We intend to be the one-stop shop for all of us. The point is we can check them on day 1 and then continuously monitor them over periods of time to say, are you still safe? Or are you still safe? At some point, when we are even closer to Q2 and almost everyone has deployed, I can see a world where there will be compliance requirements saying, have you secured your network against quantum attacks, not just classical attacks.

So who rolls that out, which regulatory agency, et cetera, yet to be seen. But we are now preparing our customers for here's where our network is vulnerable, software layer, hardware layer, and we can help you today. And then as we've invested in computing, of course, we're going to invest in security as well. So what's the space? I think it's our next growth vector.

Our next question comes from Tyler Anderson with Craig Hallum.

Everybody -- this is Tyler Anderson on for Richard. So with the Tennessee Quantum Communications Research Center, is the memory that is going to be installed there used for QKD or entanglement distribution? And then any color on what you guys are doing with SNL with either -- I don't know if it's your linear trap or your CCD or any 1 of your other products? I'd love to hear more detail about that and noting that they did build the Roadrunner, which is a long history between you guys?

Absolutely. So quantum memory is 1 of the things that, as a company, we're able to bring to the table today, but also we're investing in, to your point, -- so yes, we've announced that we're opening an R&D center actually close to our customer EPV in Chattanooga because there's a lot of quantum initiatives, innovation happening there. Vanderbilt University is opening a quantum campus there as well. So lots of R&D happening, lots of deployments happening. And that's where we've chosen to invest for our Quantum memory development. That will be over many years.

It will be generations of products in quantum memory, either used for cashing or other purposes, either used by us or frankly, part of our merchant supplier strategy as well. those quantum memory modules may be sold to other players that are building quantum computers and need them as well. So we'll serve a lot of different areas. We could have put this anywhere. We decided to put it in Chattanooga because of the ecosystem and quantum that is already developing there.

Will we open another one? Who knows? I think at this point, that is where we see the tip of the sphere happening around quantum memory. And we're 1 of the unique sort of players in the industry, maybe if not the only 1 that can actually allow for cashing like photons for photonics as well. So I think it's another important milestone for us -- and we took it very seriously, Nikola and I and the entire management team in ensuring that we're putting wood behind the arrow and delivering quantum memory, which is an integral part of networking.

But you're correct, though, the EPB now has a computer. They have a network. They now have memory. So they're a nice example of a customer that has always been forward-thinking built the world's fastest, I think, fiber optic network a decade or more ago. And they continue to be at the forefront. And of course, we're showing that, that fiber that was the fastest in the nation can now be both Quantum Secure, Quantum and TanglconaReady and, of course, have a quantum computer on-site. EPB is doing really important work with us on energy grid optimization.

And obviously, Tennessee and a portion of sense geographically neuroreg has a wonderful talent, and it has some wonderful research going on and, of course, the national labs as well as in Chattanooga. So we're proud to be a partner of theirs. We're proud to be doing cutting-edge quantum computing and algorithm work research with them, but it has implications not only for the state but also federally. And of course, Sandra Blackburn has been a big supporter of the National Quantum Bill as well as, of course, of what we're doing in the state. So for sure, we'll keep you updated on this threat as well.

And then for SNL, any of the work that you're doing there?

I mean we -- look, we kind of covered this on the first question, which is it is obviously at an MOU stage. And there is a lot of connectivity between Sandia ourself because of the fact that Dr. Rick Muller used to run the Quantum program there before he was the Director of IARPA and then joined months or so ago. So it has been in a lot of ways, 1 of the most active, not kind of the home of a lot of U.S. national lab work over not just years, but double-digit years in the quantum space. I think this is a really exciting validation and endorsement of the fact that, as Inder and I have said throughout this Q&A, we are making quantum real. We're making quantum affordable. We're making it robust. We're making it deployable.

And this is a team that understands what I mean when I say we are running the Manhattan project of our era. New Metro obviously has had an outsized role in that always. And the Manhattan prosper, as I said in my prepared remarks, matter not just for us, but our children or grandchildren, and I believe the entire 21st century. We're really setting up this nation, built from a SkyWater foundry perspective as well as from IonQ direct road map to prevail from a national security perspective and from a national economic growth perspective, right?

So this partnership -- the last thing I'll say on this partnership business, there's obviously key aspects of scientific research in the energy sector as well. which we believe we can have short- to medium-term impact was. And Sadia's bringing domain expertise that we don't have. We're bringing Quantum power expertise and commercial rugged systems, which they can benefit from as well.

Our next question comes from Nihal Tokki with Northland Capital Markets.

Congrats on another stellar quarter financially. Ander, your implicit guidance of 2H is $135 million to $145 million. Can you give us some thoughts on how we should think about distributing that through Q3 and Q4. And I think pretty much any way we distribute it at probably this says that there's going to be a decline in revenue Q-over-Q, albeit incredibly impressive level, but help us understand that as well.

Yes. We don't plan for a revenue decline and we plan for revenue growth. I mean thank you for your question. I mean, I think there are 2 things happening that we want to just be respectful of. One is the close of SkyWater means that an exporter would be guiding for the combined company and the quarter after that as well. Maybe we'll give you color at Analyst Day perhaps, but certainly at the close of the quarter. And the eliminations I was talking about have over those same 2 quarters. So we decided not to actually try to finesse for you and say, here's what Q3 looks like. Here's going therefore, Q4 by default looks like.

We'd rather give those combined company numbers, if you could bear with us. realize they're a company that has more revenue than we do today, right? So we want to make sure that we do that in the right way. We wanted to give you the IMP side of it so that you understood the momentum continues. Absolutely. I mean we have a track record over 5 years of setting the bar and meeting or easily jumping over that bar and you intend to continue doing that.

This was mainly to acknowledge the fact that the deal was approved simply days before this earnings call and allow us the time to look at that $120 million of spend out was talking about and how that distributes also when we give you a combined company performance, do not read into it that we're thinking of declining quarters.

Okay. All right. And then just real quickly, the 256 cubic ship from Sky water that does not include integration of technology from Lighting right? It's just the Oxford ionics microwave expectation sources?

Yes. So this is Nicole. I'll tackle some of that. So -- the EPV research center has lighting technology in the quantum memory, right? They're mostly a quantum memory and networking IP based in our Boston office, which is growing nicely. And that point of memory, is important, right, not only for extending secure communications with QD across huge distances, but it allows you to build any size quantum data center that you would like on the ground, frankly, or in space, right? And we have a space position with our quantum sensing and signals business, right?

So we are thinking about our Quantum platform and what we can deploy in each domain. And we are -- and you're seeing the benefits of not just our ability to cross-sell solutions to customers, but also sales create solutions you couldn't create any other way. But yes, you're correct that Sky water is building systems with ever more cubits on the chip -- that is even before we start networking, right? So we believe we can get to millions of physical cubits on a single chip. We're currently going to -- we're working and showing milestones on the 26, which is at a full prototype CPU stage the 10k chip is also beginning to get taped out. We'll then move up to bigger Cubic numbers in the next generation and the generation after that.

We've been a commercial partner with Sky water. Things have been going faster as you've seen from prior quarterly earnings reports in terms of tell milestones with that partnership. They've been a great partner commercially. They're obviously going to be, we believe, a great partner as our wholly owned subsidiary, One thing I do want to point out, just to pick up on the general theme of cubics and IonQ on a chip is SkyWater took the majority of their consideration in this transaction in IonQ stock. It was mostly a stock swap transaction. And they had great advice, a great board, experienced Board, did a lot of reverse diligence on us.

And obviously, part of their board's deliberation was around getting comfortable that I'd like to put it, 11 equals 30. And you're seeing some of that 130 half on the 236. But I think you're going to see more acceleration, the further out we look on the road map because we can, of course, collaborate increasingly, effectively now on a go-forward basis.

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

Thank you, operator. Our mission is to solve the world's hardest problems and to create tremendous national security, societal and commercial value. Delivering on that mission takes more than a computer. It takes an entire quantum value chain and ecosystem. With Sky water now closed, IonQ is the only vertically integrated full stack quantum platform and the largest merchant supplier to the U.S. and Allied Quantum ecosystem.

We are already leveraging SkyWater to accelerate and derisk our fault-tolerant quantum computers via our published walking cat architecture. I want to thank our colleagues for their extraordinary efforts and our shareholders for their continued trust. We look forward to welcoming you at our Investor Day on September 8 at the New York Stock Exchange. We will be sharing exciting updates on our progress across the entire IQ Quantum platform.

Thank you for joining us today and for your questions. Have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Okay. Good morning, and welcome to JPMorgan's 54th Annual Technology, Media and Communications Conference. My name is Harlan Sur. I'm the U.S. semiconductor and semiconductor capital equipment analyst for the firm. Also with me today is Mayur Ramdhani. He helps us cover our small to mid-cap semiconductor franchise.

Very pleased to have Inder Singh, Chief Financial Officer, Chief Operating Officer of IonQ here with us today. Inder will kick us off with a brief overview of IonQ. It's been a pretty earnings season. So I've asked him to also give us just a brief overview of the March quarter, June quarter outlook, and then we can go ahead and kick off the Q&A.

So Inder, thank you for joining us today. Let me turn it over to you.

Thank you, Harlan. Pleasure to be with you today, and Mayur, thanks as well. I've been with IonQ as a Board member originally when I was still CFO of ARM and had sold ARM to NVIDIA, and we were in the waiting period for approvals, which, of course, never came. But during that period, I joined the company's Board as the first independent director and then basically watched it grow from almost 0 revenue to last year's $130 million and then joined late last year around September, once we had appointed a new CEO to help them execute on a platform strategy.

And it's been a pleasure to watch the company go from being a lab experiment maybe in 2021 to being commercially deployed more and more. As Harlan noted, we had a strong year last year, $130 million, strong growth year-on-year. Guided this year for a top limit of $270 million in revenue. And the company has a track record of beating and/or raising over the last 5 years, and we hope to keep that model going over time. We provided the guidance to indicate that we were going to again double year-on-year at the midpoint of the guidance this year with strong organic growth, meaning our computing business, which was really the primary driver for the first few years, continues to power the top line.

And in the coming years, we're going to roll out the rest of our platform business, which includes sensing. It includes atomic clocks. It includes the ability to secure networks against quantum, et cetera, et cetera. So a portfolio story very much. And we also indicated that we have strong RPOs, which are a measure of future revenue of $470 million.

So feeling pretty good about where we are and looking really to invest in the ecosystem around us to make sure that Quantum can continue growing. And with my CFO hat on, it's obvious things with a COO hat on, it's making sure we have the manufacturing, the supply chain, the IT, the procurement, the supply chain, security as well, all of the things that are needed to scale the company. So those are sort of the opening comments. I know you have a number of questions you may want to try to get into here. Happy to try to address as many of those.

Yes. No, I appreciate you participating today. So the team has advocated that trapped ion systems, your architecture of choice offer superior fidelity, connectivity versus other alternatives, and there are 3 or 4 other alternatives out there, as most of you probably know. As the industry moves towards what we call more fault-tolerant quantum computing platforms, like how confident is the team that trapped ion will remain competitive from a scaling, manufacturability and overall simplicity relative to the complexity, simplicity of the platform itself?

Yes, that's a terrific question. So as we looked at the company about 2 years ago, the company was still using lasers to control these ion traps. Ion traps have a natural advantage over other modalities. They begin with less errors, they begin with higher fidelity, they begin with higher coherence. These are all some of the drivers of compute power over time. And also, they enable computing at scale if you can get the right number of logical qubits.

So about 2 years ago, we learned that using lasers is great up to a point. You can scale up to a point. You can scale up to maybe 100, 200 qubits before the machine becomes too big, too expensive, too bulky, requires too much maintenance, too much downtime. So that learning curve that we went through, and we now have our fifth generation machine rolling out is what was behind our acquisition of Oxford Ionics, which puts us on to a semiconductor road map, a much more proven modality that exists today, 30 years of history, 30 years of scaling, 30 years of knowing how to scale something from a few bits to 1 billion bits and more. AMD, NVIDIA, obviously, all of them leverage that. Now we are also.

So going forward, our intent is to use a semiconductor road map, beginning with our 256-qubit machine, which we are developing already and our 10,000 qubit machine, which we've begun to turn our attention to. So as we look at the ability to deliver what we call time to solution, which is really what matters, how quickly can you get to useful answers. We've proven through a paper that we published on our website that you can all see that for many practical things, ion traps offer you the best path to that. And if you have enough qubits, logical qubits, you can do some pretty amazing things.

So we sit at a crossroads here where we are now moving from laser-based systems and Tempo, which we're in the market with right now, it's our last laser-based system. It's 100 qubits. The 256, we started development on already. On the last quarter, we announced we had successfully gone through developing a prototype, and now we're building the system around it. So we have a clear path, I think, to being able to scale to 10,000, 20,000 and even 1,000,000,000 by 2030.

So -- and we'll get into the -- I do think it is a big differentiator for the IonQ team, the optical/laser-based control approach to your, I think, innovative electronics/RF control-based opportunity. We'll get into that a little bit later. But going back to the earlier -- my earlier comment, which is that there's multi sort of modalities that exist now for enabling sort of quantum computing architectures. Do you expect a future where there will be multiple modalities that exist superconducting, trapped ion, photonic-based quantum computing for different workloads? Or do you think that the industry consolidates to sort of 1 or 2 sort of modalities given the compute-related applications that are required?

Yes, terrific question. I think there are a number of modalities in the market already. There are a number of companies that are either using ion trap, as you mentioned. Superconducting is another very popular one. There's photonics, there's neutral atom and so on. So multiple modalities. Usually, what you find is over time in industry, and I've lived through a few industries in technology, you end up consolidating around a few. So I expect there'll be a few. I don't think there's one, right?

I think ion trap definitely starts within vantage is there. I think superconducting with names like IBM and others behind it, probably is also there. As for the others, I think they have more development work to do. These two are furthest along. Ion trap for sure, because we've been investing in it for 5 years now. and then superconducting, as I say, as well. So we are preparing for a multimodal world in the future. So 5 years from now, absolutely, there should be a heterogeneous environment.

Our networking capability, which we're unique in being able to connect quantum with quantum, connect an ion trap to another modality. Our ability to secure against quantum is also agnostic of the platform itself. So we're preparing for that. We think ion trap will play a key role. The other modalities may play a different role.

As we -- going back to the differentiation that you guys have brought into the portfolio with the acquisition of Oxford Ionics and this whole notion of how do we control the qubits, right? Trapped ion historically, you've used sort of light/laser-based techniques to control the qubits. You guys have with Oxford Ionics have brought this very elegant, I think very simplified sort of electronic means to control the qubits where, like you said, you're leveraging like classical semiconductor based like existing like very, very mature like semiconductor technologies, right?

And so as you move from your current platform, which is Tempo, which is still optical-based laser-based to your next-generation 256 physical qubit platform where you will be integrating your new electronic control architecture. What are the key milestones that we should look for between now and expected sort of 2020 time frame for your next-generation solution? What are some of the milestones? What are some of the key sort of KPIs that we should be -- what are you looking for in terms of bringing this solution to the market, gate fidelity, reliability, uptime, calibration, packaging yield manufacturability? What are some of these metrics?

Yes, fantastic question. So we've begun to reveal some of those milestones already. So the last two earnings calls, we've talked about the fact that even while we're putting the Tempo system into the market, and that's going to drive the majority of our revenue in computing this year, we've already developed the 256,000 chip prototype already developed. So it's gone through takeout A, B and C. And B is now complete as well. So it's that feature-rich ability at this point. We are now surrounding it with the rest of the system. The chip is about the size of your thumbnail. The machine itself is much bigger, of course. So all of it has to come together and work together. There's a compiler that has to be part of it. There's other electronics that have to be part of it.

All of that is now being put together into multiple prototypes for the rest of this year. Each quarter, we'll be telling you how we're doing. Last two quarters, we've been ahead of schedule. What we thought we would take 9 months to do has been done in just a few. We're working with a fab here in the United States, that allows us to accelerate our road map unlike some of the fabs we were looking at overseas previously. Not only is it secure from a U.S. government standpoint in terms of supply chain and the government feels comfortable with it, potentially being a customer in the future, but also it gives us the ability to do parallel prototyping, not just one at a time.

So to your point, the ability to get from 100-qubit laser-based system to a 256-qubit electronic control system is already there. It's already on a chip and to go from 256 to 10,000 is the next milestone that we'll be talking more and more about. The ability to have electronic control means fewer lasers. Fewer lasers means lower cost. Fewer laser means less complexity, less downtime, less bill of materials cost. So as the machine becomes more powerful, it becomes simpler and potentially cheaper. And over time, our strategy with our 5-year road map that we've also laid out is to make our machines modular so that after the 10,000 qubit machine, which we've already started to work on, you start to do modular upgrades. You don't have to replace the machine anymore. You do swap outs of a few modules within the machine and the system stays intact.

So you get customer stickiness that way. Our customers benefit from lower total cost of ownership. Our machines don't require being operated at 0 degrees Kelvin or close to that. We don't have to have dilution refrigerators, helium access, et cetera, et cetera. So there's some advantages. So the cost of buying the machine and then operating the machine which is really what a customer looks at, TCO, much, much lower. And then modular upgrade strategy makes it stickier with the customer because we forward deploy engineers and app developers to make our machine become part of the customer's revenue stream, not just their cost equation.

Yes. Before we go into some of the forward road maps, you have already gone through one transition, right? You're focusing on your fifth generation Tempo platform, moving to -- we've been talking about your next-generation 256-qubit platform. But going from fifth generation to sixth generation, just help us understand like the scale of -- from your customers' perspective, the scale of applications and complexities that you've been able to unlock for your customers in making that move from fifth generation to sixth generation.

Yes, terrific question. I mean in terms of classical computing, when we think about increasing the number of bits in a processor, for example, the amount of Level 1 cache, things like that, there are a few things that actually drive up computing power, but it's still Moore's Law. It's basically doubling over time and lowering cost over time. With quantum, it's exponential growth in computing power. It's 2 to the power of N, not 2x N. So when you go from 100 to 256, you basically have exponential increases in computing power. You just have to make sure that you are able to do that in a manufacturable way, sustainable way, which we're doing. But also, you have to make sure there are algorithms and applications ready to take advantage of it.

So we've already done a lot of proof of concepts with our older generation machines, things around life sciences like protein folding, things around drug discovery, accelerating drug discovery, for example, in partnership with NVIDIA. A number of things that you can do with fewer qubits. With 256, you unlock so much more. And you can just think with 10,000 qubits, it's a leap up in the ability to get to full tolerance.

Beyond your 256 sixth-generation system, I think on the last earnings call, you guys said you guys are already preselling some of these platforms right now. Your next shift would be -- the team is already starting to focus its sites, executing on your next-generation platform, which is your 10,000 qubit solution. That's a pretty significant jump. What underpins the team's convictions you can deliver that step change -- and which are sort of the leading indicators, KPIs that would signal to us that the team continues to be on track to execute that?

Yes, absolutely. So as we have turned our eye to the 10,000, we've not taken our eye off [ 256 ], of course. As we've turned our eye to that, it's around multiplexing. So something that the semiconductor industry knows how to do very well. It's leveraging a CMOS environment to actually scale from 256 up to 10,000. And so very proven path over decades, we're following that path.

And to your point earlier, which was really important, we're using mature nodes. We don't have to be 3-nanometer or 2-nanometer ever. We're talking about things that are 128, maybe going to have that as we go to shrinking die size over time, never having to need those advanced nodes, which means fully depreciated plant and therefore, lower cost for us over time as well. So the milestones will be very similar. It will be the ability to demonstrate that we can have a prototype of a 10,000 that will be step one, to have multiple iterations of that to work out the yield over time, of course, and then to build a system around that, just as we're doing with 5 generations of experience of building systems.

Yes. So from our -- I think the way that you described it is 256 to 10,000, that's classical leveraging semiconductor expertise. And as we all know, covering semiconductor companies, the circuit complexity will become more -- it's probably still monolithic kind of chip focused -- if we think about your road map now to 2 million physical qubits in that sort of 2030 time frame, I think you guys have articulated a number of different potential strategies, right? It could be multichip. It could be still kind of very much monolithic chip sort of focused.

And so help us understand for the 2 million physical qubits 2030 time frame, how much of what remains is still sort of fundamental science/innovation versus engineering and scaling work that's largely derisked that can take advantage of either your semiconductor expertise or your optical networking expertise. What are the additional technologies or breakthroughs that are still required to achieve that and so on?

Yes. A lot of the science breakthroughs that were needed are behind us at this point. Now it's about engineering and manufacturability. The last remaining milestone in the science breakthroughs was getting to 99.99%. And we did that, 99.99% fidelity, which means the lowest possible error rate, which means basically it's on par with classical computing at that point. So we have to maintain something close to that as we scale.

The engineering part of it is around the triplet strategy, moving beyond multiplex things, scaling up. And at some point, maybe even going beyond 2 million physical qubits, we would use interconnects and things like that if we needed. The team feels very confident about even getting to the 2 million. To be candid, that 2 million with 80,000 logical qubits you can do some really, really impossible things in very, very short periods of time.

So we feel confident that we are executing the road map. What I like is that we're ahead of schedule. We're ahead of schedule on the 256 development, and now we're ahead of schedule and actually starting to think about the engineering design of the 10,000 qubit system. I'm not predicting anything yet. There's always things to do, but working with SkyWater, which is our foundry here in the U.S., we've had very good success in being able to demonstrate that you can make a chip-based ion trap system and scale it. And 256 is far more than anyone else has been able to do so far. For sure, using electronic controls, we're unique. And we think that over time, that will be a natural advantage in terms of cost coming either further down and either we pass that to our customers or keep some of that ourselves, that's a decision still to be made.

This sector is somewhat very highly technical. We hear terms often being used highest fidelity sort of physical qubit, physical gates. We hear about things like error correction and so on. The bottom line is the end game is to build a compute system that is fully fault tolerant, right? And the team did put out a blueprint for that, right? You call that your walking cat architecture. And so spend a few minutes sort of talking about fault-tolerant quantum computing and what it means for IonQ. And then it also appears that as a part of this fault tolerance sort of road map, right, you are potentially moving towards what we call a QCCD like architecture, shutting ions into dedicated zones for computation. Maybe you can also sort of talk a little bit about that as well.

Yes. The ability to do any-to-any connections is also quite unique to ion trapped. It's harder to do with the other modalities. So if you have 10,000 or 20,000 or 200,000, being able to entangle ions that are not physically next to each other and being able to do that in this cat state that you talked about, which is part of our walking cat architecture is unique because that operates in a way where you can not disturb the quantum entanglement, still be able to look for errors and be able to correct those errors. That's a fault tolerant machine.

We think when we are at the 10,000 and beyond, we can start thinking about fault tolerance, which is why we published this paper called the walking cat architecture. It's a cute name. It's named after schrodinger cat. It's about 100 pages, so it's not a light read. You can have an AI agent summarize it for you and make it easier to understand. But essentially, it's -- it involves modularity. It involves making sure that we have manufacturability as we do this. It involves making sure that we have a compiler system and a micro architecture, all that comes together. It's all published.

So not only are we talking about the ion trap, not only are we talking about the number of qubits going to 10,000, we're talking about a fault tolerant machine, which essentially, if you think what that is, it's a self-filling machine. If it finds an error, it corrects the error itself without intervention, and that's what you need for industrial scale.

Just kind of pivoting to business strategy. You're pursuing computing, networking and sensing simultaneously, often with different technologies. How are you integrating these into a unified platform from a hardware, software and go-to-market perspective? And can you share perhaps a few concrete examples of applications where these capabilities work together?

Yes. Great question. So again, the company is unique in terms of the platform it's put together, which includes the ability to network machines together. So going back to my days at Cisco Systems and learning that you need to be platform-agnostic, connect everything to everything. Our approach to networking is exactly that. We've demonstrated from a technology standpoint and now from a deployment standpoint in a number of countries we've announced that we can deploy the network irrespective of the compute platform. And even if you don't have a compute platform.

We've also demonstrated the ability to secure against what quantum computers will be able to do one day, which everyone calls Q-Day. The ability to break encryption, which is you probably have been reading and I've been obviously tracking is getting closer and closer and closer. Even a year ago, people were saying it's 20 years away. Now Google and others are saying it's a few years away. So it's a question of whether it's a few years or less.

So we're preparing for our customers to be quantum secure and have quantum computing at the same time. We're also preparing for the ability to provide networks and sensing PNT networks that are jam-proof in an environment where you have GPS being spoofed and jammed every day as we've seen. So that platform or that suite of products that we bring -- some people start with one thing and go to another. Some people start with two things, some people start with more than one thing. But we have the ability under one roof now to have a customer start their journey by buying the network first and then the computer or vice versa or in the case of like a customer of QuantumBasel, buy a computer and the next generation and the next generation and the next generation.

That's a huge lock-in for us over time. And it gives us visibility through the RPOs that we've talked about to be able to serve those customers over time and having $3 billion of cash available also helps us well in terms of our ability to invest for the long term.

Before we -- I want to make sure that we address any questions in the audience. If you do have a question, feel free to raise your hand. We'll get a mic -- please wait for the mic to come to you if you have any questions. We've got a question right here in the middle here.

Thank you. Putting your COO hat on, in the topic of supply chain vulnerability and quantum technologies as a sovereign technology, how are you building your road map for a shifting regulatory landscape?

Yes, terrific question. Thank you for that. The fact that we are developing a road map that I think is without parallel with all the humility, the ability to have 10,000 and have 20,000 in the time frame we're talking about means that you will create machines that can do amazingly great things, things that classical just can't do and amazingly bad things potentially at the same time as well. It's important for us to have, therefore, to your point, not only a secure supply chain in terms of availability, right, but also in terms of provenance of the components, the manufacturing being secure itself. So we were asked by certain national security customers to have that in place before they start to even think about deploying some of the things that we have for those types of applications.

We were looking just like every other company in Quantum is like which foundry do you use? How do you scale? Can they move fast enough? Is it secure? And I'm not going to name any particular ones, you can probably figure those out yourself. Most of the foundries that are out there are for semiconductors. They don't have experience with Quantum. And what I was finding with my CEO hat on as I negotiated with some of these foundries was they were amazed by how much volume we were predicting we would need and how quickly we would need it. And they were struggling with their own parent company to be able to justify funding that part for Quantum alone.

So they're asking for things like revenue share in Stockholm I said, over my dead body. So we started looking at a U.S. foundry at that time as an alternative and it turned out to be SkyWater. SkyWater brings with it the highest level of military security for many of the applications that they already do for the government. We felt comfortable having them manufacture for us because we could look at provenance, we could look at making sure that the people that would work on our machines in terms of developing the chip itself, we would have clear line of sight that there's no embedded malware. As you know, in semiconductors, there are things called secure enclaves. They're not always secure.

So those are the things that we can now focus on. So surety of supply and security of supply for our compute platform, in particular, is something that we took very seriously because we figured might as well do that now rather than having to do that later. It will be very hard to change foundries 2 years from now versus today. So we're starting our chip road map entirely in the SkyWater foundry, to your point.

The need for sovereign ownership of machines is something also we're seeing. Every country that I've spoken with, that Niccolo, our CEO, has spoken with or our sales team is looking for a machine to be owned by them, right, which is why we're selling more and more systems. They're happy to get cloud access to learn, to understand how quantum works, to train people. But for hybrid workloads, which we're seeing more and more of, every country is saying, next to my AI factory, next to my GPU cluster, I want a QPU. And I want to be able to do hybrid computing. And for that, I need access to the machine itself, not cloud access.

There are certain things you can do just fine on the cloud. There are many more things you can do if you own the machine. So we've moved very much into providing those machines. To your question, though, which is a good one, I come from semiconductors most recently in other areas. We recognize that when we have a 10,000, 20,000 and beyond, we may be not allowed to sell those machines to certain countries. We're operating already as if we have export controls even without them being in place today. So I wouldn't want to promise something to a customer and say, buy our 236 and not be able to sell them a 10,000 next or 20,000 next. Thank you for the question.

Any other questions? I've got one up here.

Could you give us a sense of how important software and algorithms are for your competitive moat here?

Hugely important. Obviously, the question around algorithms and software. And that's not lost on us for sure. So we have one of the largest application development teams, if not the largest in the world that we've built and are building. We've identified about half a dozen areas, end markets like life sciences, material science, financial services that we will develop algorithms for ourselves. And then others that we will do it through partnerships. So protein folding, things like that, we will do with someone else perhaps. Drug discovery, we will do for someone else perhaps. Whereas in material science and battery chemistry and things like that, we might develop that ourselves.

So you can't do everything. But we are investing in the ecosystem at the same time as we're investing in our products. So one of the stats I read just this morning actually was a research study that came out today, and I was like really surprised. In the world, it said there are only 5,000 quantum engineers. It sounds like a lot, but not really. There are a lot of quantum physicists, not many quantum engineers. What do we need at this stage? Both physicists, of course, but much more quantum engineers. So we started investing in universities, certain universities, not everyone, right, where quantum engineering, we think, can be something really big, where they can have our machine, train engineers on our machine, you can see the benefit and then graduate as quantum engineers.

And so 5,000 hopefully becomes 10,000 and much more. If you think of all the companies in this space and you think about even the Googles and the Microsoft all having quantum folks, they all need engineers at some point. Fortunately, they're not building machines. That's not their business model. IBM is, of course. So we want to do something that helps the entire industry and us. And one way to do that is to have people able to develop quantum algorithms. And so if you think about the iPhone and the App Store is the example that I tried to use, if we're building more and more powerful iPhones, we're building the App Store that goes with it at the same time. Some that we will have ourselves, some that we will curate that to work on our machine. Thanks for the question.

Any other questions? We got one right there.

Great insights. Two questions. First of all, in terms of -- obviously, you've heard Quantinuum is going public. They're also in the trapped ion modality. Would love to understand from your perspective where you think IonQ is going to be differentiating. And then you were talking about various modalities. Google a couple of months ago, announced that they were working on, I wouldn't say necessarily abandoning their superconducting program, but moving towards neutral atoms as an alternative. And obviously, scalability was one part of that. Would love to get your comments and perspectives on those two points.

Yes. I mean, look, as I mentioned earlier, I think I would love for all these modalities to really have a market in the future, let's say, 5 years out, right? I'd love for all of them to coexist. I think the reality is probably some of them have more science breakthroughs to do than others. That will just take a little bit longer to get there. That's not a knock on any modality. I mean every engineering -- I'm an engineer, so like every engineer thinks they're doing the best thing at the right time, and all of them are as well.

To your point, Quantinuum is also an ion trap company. In the U.S., I know ourselves and them. And I wish them well. I do think that we need to have a number of really successful companies 3 to 5 years out for this to become an industry. And I'd love for them to do the same investments we're doing in the ecosystem. We're just ahead in terms of the fifth generation, the sixth generation, seventh generation and then selling at scale and manufacturing at scale. And we'd love to see all of these actually take off.

As I said earlier, I think two are already on the trajectory, superconducting, yes, ion trap, yes. Mutual atom has certain advantages, and I'll let those companies speak for themselves. Some of them are here today. And of course, photonics over long distances offers lots of promise, still has some science breakthroughs. Having light travel and being tangled over very long distances is a nontrivial matter.

So we -- the networking that we have, the security that we have, the sensing that we have is meeting customer needs today, which is flowing through our revenue stream right now. And as I said, we are investing in making sure there's actually an ecosystem. And that's how companies always need that ecosystem for success. This is a nascent industry. We draw AI engineers from the trillion-dollar tech companies. They choose to come to work with us because they think they're going to build the most cutting-edge, bleeding-edge applications that can't be simulated in a classical environment.

I'm not saying QPUs will replace GPUs. People would love for me to say that. I'm not saying that. I think it will be a hybrid world. I can come from a CPU company ARM. There are still more CPUs and GPUs, believe it or not, but they all coexist together. I think that every modality begins with some benefits and some disadvantages. Ion traps begin with probably more advantages. And our founder 30 years ago, whether lucky or smart, chose ion trap, allowing us to be able to be where we are today.

And we are a merchant supplier. In fact, we sell components to the other quantum computing companies. They don't talk about it. We don't talk about it. Some of the things that they require for their machines, not all of them, some of them, their machines wouldn't work with our components. So we want all of them to see it actually. The competition to me is not any of them, candidly. I think the competition is probably a sovereign nation on the other side of the planet, maybe a few of them trying to get to the same Q-Day that this country is racing to as well.

Great. Well, we are just about out of time. Inder, thank you for your participation today. Look forward to monitoring the progress of the team as the year unfolds. Thank you very much.

Thanks for having us.

Welcome to the IonQ First Quarter 2026 Earnings Conference Call. [Operator Instructions]. Please note this event is being recorded.

I would now like to turn the conference over to Hanley Donofrio, Director of Investor Relations. Please go ahead.

Good afternoon, everyone, and welcome to IonQ's First Quarter 2026 Earnings Call. My name is Hanley Donofrio, and I am the Investor Relations Director here at IonQ. I'm pleased to be joined on today's call by Niccolo de Masi, IonQ's Chairman and Chief Executive Officer; and Inder Singh, IonQ'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.ionq.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 for 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 de Masi, Chairman and CEO of IonQ.

Thank you all for joining us today. 2026 is off to a strong start at IonQ, 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 IonQ 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 8x 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 IonQ'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.

IonQ 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 14, 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 6 of our investor presentation, we presently enjoy up to 10,000x faster time to solution on key quantum algorithms, including 1,000x faster for the Quantum [ Ferrer ] transform. The Quantum [indiscernible] 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 farer transforms under the hood.

IonQ's time to solution advantage with Quantum ferrer 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 presold 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, IonQ 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 IonQ 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 fall tolerant system with millions of physical qubits and logical error rates as low as 1 in 1 trillion.

Our walking cat paper described IonQ's end-to-end architecture for full fall 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 IonQ 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 fall tolerance systems.

For those able to follow along in our investor presentation, please see Page 7 for details.

IonQ's specificity sets a new standard and distinguishes IonQ with its tangibility resting on capabilities our hardware has already demonstrated including 99.99% 2-qubit fidelity and reliable ion transport. This historic work demonstrates precisely why IonQ is on track to be the first to unlock fully full-tolerant quantum computers as we published clearly in June 2025.

Our level of transparency is only possible through our 30 years of innovation. Only IonQ 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-qubit chip. As we shared in February, we hit the ground running with multiple initial tapeouts. 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 the sample chips the critical performance we need for the complete 256-qubit 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, IonQ will be the largest quantum merchant supplier in the world, but [ Thomas Sanderman ] continuing to lead SkyWater. We view this transaction as not only accelerating IonQ's commercialization of fall 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 IonQ. We know that for customers, value is measured not just on a machines architecture, but by how that architecture ultimately delivers customer value and results.

We are confident IonQ already delivers a potent combination of orders of magnitude faster time to solution. The most accessible cost 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 IonQ'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 [indiscernible] Quantum, our systematic improvement in portfolio quality and execution time in a production environment.

Our trapped ion hardware has a long-term structural advantage for dense portfolio optimization such as these, because of its all-to-all connectivity industry-leading single qubit and 2-qubit gate fidelities.

With Synopsis, we demonstrated accelerated computer-aided engineering workloads through quantum enhanced graft partitioning. We achieved double-digit percentage advantage in end-to-end time for large-scale structural models such as the Rolls-Royce jet engine and automotive models also. Trucially, this demonstration was integrated into their existing cloud workflow with 0 new infrastructure required.

Ion Ride is using IonQ 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 IonQ 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 4 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 U.K., 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 and which is 1 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, IonQ has now successfully deployed Poland's first national quantum communications network. This is 1 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 IonQ 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 2 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. IonQ 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 [ HARC ]. This contract is another powerful example of how IonQ 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 modality's long-term scaling and manufacturability.

Turning now to Slide 9 in the investor presentation. Momentum remains strong at IonQ Federal. We continue to advance through DARPA's quantum benchmarking initiatives and are building out our capabilities to support next-generation GPS, alternative PMT and other mission-critical initiatives for our nation.

We were awarded a $39 million contract to advance next-generation space communications on 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 war fighter 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 spaceplane.

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 [indiscernible] 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 time line since publishing our technology road map in June 2025. Based on our public road map, 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 time line with Google very recently bringing forward its expectation for Q-Day from the mid-2030s to 2029. As we continue to accelerate the time line toward Q-Day, we view it as a strategic responsibility to also provide the solution. We are not just identifying the future risk we are delivering mature field deployable hardware and software cybersecurity solutions that allow global governments and enterprises to both enhance cybersecurity today and ensure our nation's protection in the age of Quantum ubiquity.

IonQ 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 and innovation and our security expertise derisks the quantum transition for our customers.

As I said in our full year call in February, 2025 was a strategic and financial inflection point for IonQ. 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.

IonQ'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 ally 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 road map, IonQ is 1 platform, 1 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 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 quarter regarding the different areas of our revenue and the composition of our revenue I'm going to touch on 4 key aspects: One, is commercial. Two will be geography. Third, we're introducing a metric around multiproduct sales, and of course, I'll again talk about remaining performance obligation, 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 deployment, 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 multiproduct sales. Multiproduct sales means what percent of our revenue came from customers who have now bought more than 1 product from us, for example, computing, networking, sensing, security, et cetera. I'm pleased to report that in Q1, over 1/3 of our revenue came from multiproduct 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 Quanta. Under the leadership of [ Scott Mallard ] who head 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, our land and can 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 color that will help you look at our business. You should know that we are investing in growing our revenues across our entire suite of products. It was Niccolo vision a year ago to develop this Quantum platform company, and we are seeing that play through our financials now. This multiproduct 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 31, 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 recognized, we added roughly $2.5 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 organic growth.

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 GAAP 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 them 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 sixth generation system, and we are starting to turn our focus also on the seventh 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 trap. This commercial agreement remains in place until the approval and close of SkyWater. Excluding the SkyWater, commercial agreement end 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 noncash 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 [indiscernible] as a company. Cash cash equivalents and investments as of March 31, 2026, were $3.1 billion. This provides us with the visibility in financial firepower to accelerate our R&D road map, 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 stickier relationships with top-tier customers who want to align with our multiyear road map.

With my COO hat on, let me highlight a few areas we are driving towards excellence in our execution. As Niccolo shared last quarter, that is 1 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 1 small example, we have more than doubled our manufacturing over the Tempo to meet the demand that we are seeing.

Looking into the future for our 256-qubit system. Last quarter, I shared that we had completed tapeouts A, B and C and have started working on tapeout D. This quarter, I'm pleased to update you that tapeout 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 intra 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 to our 10,000 qubit device and beyond.

This is an important milestone, it means we're proving out the path for the 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 are 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 cubic count system is the integration of active CMOS design where SpyWater really helps. By moving control functions directly on to 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 IonQ in 2026. With that in mind, we are 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 IonQ is well positioned with the talent density, the processes, the technology and the innovation investment to remain the trail basing and quantum leader that we're establishing and have established already.

With that, operator, please open the call for Q&A.

[Operator Instructions] Our first question comes from John McPeake of Rosenblatt Securities.

Thanks. Nice work. So I think you've got 3 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 the -- how we should think about the revenues coming in from these? And then I just have a quick follow-up.

Yes. 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 customers that I can share today. You mentioned if you a few important, 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 [indiscernible]. 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 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 multiyear view, not having to shift direction 12 months from now. 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 solutions, yes, but also the long-term conviction to remain with us over multiple years.

Quantum Basel is an excellent example of that. And there are many more we'll be announcing. Our focus is to make sure that 2026, we deliver on the guidance we've provided you and hopefully see and Tempo will be a big driver of that as well as the rest of our platform. But also 256 is just around the corner, looking into 2027 and beyond. So hope both of that addresses your question?

It does. I just have a quick follow-up. The road map has 12 logical very respectable 10 to negative 7 2-qubit 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 that's a very low error rate, but it's lower logical as a result.

Yes. So I said in my script, 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 road map that we published last June in terms of physical and large low qubit counts, accelerating a bit further, at least on the logical front. But as we've said consistently for the last year 2, if not 5, frankly, the advantage of our architecture is we have the highest fidelity qubits naturally. And that makes everything easier, right? It makes the ratio of physically lower as it starts out lower even before we start trying to optimize it.

And it means their rates are lower, right? And you can see, particularly the advantages in having lower error rates on things like Page 6 in the investor deck, right, where we're talking about time to solution and the high fidelity 2-qubit parallel gate architecture we've developed. Time to solution is obviously a product of how many times you got to take what's called a shot and a certain algorithm and of course, how accurate the shops 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 architecture. And we're already obviously demonstrating 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.

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

Congratulations on the momentum to start with your guys. I wanted to go back to the point that you made, Nicolo on the April 14 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 road map as we look at that advancement in technology.

Well, we're not going to give you a precise guidance on the revenue impact in out quarters. But I will say that the beauty of our lead in quantum networking and photonic interconnects, is threefold, right? So one, we think we can push our systems a long way vis-a-vis getting 2 million physical qubits on a single chip. At some point though, we may want even bigger systems. And so data center opportunities arise 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 ship. 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, and 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 does is it builds us 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 multiple modalities to potentially connect together in a pretty seamless fashion and work together.

And I think that's exciting vis-a-vis again, where the world will be in the coming years and decades. 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. Air Force Research Lab is obviously the first of those, and that continues to be a large contract that we prove out every quarter every year. My colleague, Inder mentioned a few other customers, both last quarter and this quarter is taking Quantum network computers.

So in summary, there's really 3 great lever points for us, and we continue to invest and of course, protecting our Quantum networking and photonic interconnects because it's something that we've been working on, including from our founder, Chris Monroe early on. And believe it or not, Chris Monroe continues to work on that. 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 15 months ago, 18 months ago from computing into networking.

Yes. And I'll just add, what Niccolo, I 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 needs the rest of the company 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 narrow our computers together, the ability to deliver hybrid compute. Those are the things that we are uniquely positioned. We can compute -- we can connect an ion tract 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 the 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 all constantly getting calls in for, 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 strategy, become the first quantum platform company, and you will establish basically a critical mass that allows the industry to scale but also all set innovate and scale.

So strong first quarter across every product line, a strong year. I think you can sort of do the math around the growth of the other products, not discontinued.

That's really helpful, guys. And Inder, I'll ask a follow-up question that relates to the COO hat that you also were and it's directed that 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. You would seem to have just an ideal background for that. But how does go-to-market change as we think of the next few years in the company pursuing the road map that you laid out at Analyst Day?

Yes. Look, becoming a successful technology company is a team sport. You have to have the legal professional to do the commercial negotiations. So [indiscernible] you're seeing deployed around the world, working in partnership with Scott, my teams in the finance area, helping to Scott succeed at force. Scott himself developing a methodical pursuit and capture. 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 not touch eventually, it will touch everything.

Some will be early 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 competitive and they're trying to solve some of the most intractable problems that humanity faces and others. So we're happy to be the 1 that actually brings all that together, whether it's connecting our machine to someone else's or our's with interconnects, 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 offline as well.

Our next question comes from Troy Jensen of Cantor Fitzgerald.

Congrats on the results and all the technical milestones. Maybe to start here with Niccolo. I agree 100% around the cusp of all 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?

Yes. So look, we obviously are innovating business models at the same time as we are building the Quantum ecosystem here. Inder as eloquently talked in the last few quarters about the platform strategy translating into real momentum. And so obviously, we are pricing things differently when there's a network 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 in this year really is that the market continues to come towards us. And Inder mentioned the fact that, at times, there is greater short-term demand and able to supply it.

So we're very focused on improving manufacturing capacity at IonQ in total across the entire platform. We are working on both individual customer sales that can at times be multiproduct, but we're also working on some very large initiatives at the national scale. And I think it's safe to say that -- there is a fair amount of 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 3 things at IonQ across the company, right? We meet and beat financial expectations. We meet and beat 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 very much at 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 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, 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 rack prices on our website.

I think 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 and frankly, can afford, and so cloud access is obviously cheaper than buying a computer device. So not everyone will buy a computer, not everyone will be happy with a [indiscernible].

Easy follow-up for you, Inder, did you report a number of 10% customers in size at all?

We did not in this quarter, Troy.

Our next question comes from Quinn Bolton of Needham.

This is Shadi Mitwalli for Quinn. Congrats on the progress. I guess as IonQ 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 IonQ driven or customer-driven?

Yes. Great question. The customer journey in Quantum is not very dissimilar than the customer journey in traditional networking and compute. I mean sometimes customers start in 1 area and expand it to another or vice versa. So we have claimed 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 the 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 LLM runs on the GPU. But where you need simultaneous analysis of all possible outcomes in a fraction of the time you need to give.

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 1 of the really important parts to consider here is there's a Quantum Advantage Q-Day coming up and whether have as 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 multiproduct 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 1 product. And I think that's the network effect.

Our next question comes from Richard Shannon of Craig-Hallum.

This is Tyler on for Richard Shannon. I just wanted to first understand -- when does the architecture that you had recently published intersect into your road map? Like when do you have a -- what size QPU would that architecture be implemented?

You're talking about the semiconductor road map, right?

So yes, the most recent paper.

Walking cat architecture, I think, is your question, right, for full fault tolerance?

Yes.

Yes. So I mean, look, we're going from 256 to 10,000 qubits out to 1 million, right? So this full-fault tolerant architecture kicks in every generation but obviously, 10,000 qubits is when you start to see all of the full benefits of the fault tolerant architecture. So next year and beyond.

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

So we're working on like 3 generations of systems at the same time, right? So we're trying to obviously continue to accelerate here, as I said, 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 the 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. We have a constellation of satellite is what I can say. I think that 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 customers' 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.

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 or it's also important for things like the future of autonomous driving and more precision and more reliability and robustness in GPSs, 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 clock. So there's a good amount of I think both U.S. and allied enthusiasm for different configurations of what we're opting we'll update the market, obviously, as we can and as we make progress.

Our next question comes from Antoine Legault of Wedbush Securities.

Congratulations on the results as well. With regards the time line 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 industrial customers before. We are seeing customers wake up to the fact not just because we're saying it, but Google 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 time line. And if you look at our road map, our road map 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 conversations 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. So 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 national conversation when you have the compute power that creates enormous amounts of exponential amount of compute, energy and power and then solutions that help guard us today so you can deploy the compute solutions you want and secure what matters to you. We're very unique in that mission.

And just a quick follow-up. On the recent Florida [indiscernible] announcement, can you give us a sense of the scope of 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.

Yes. So it's a phased contract. And obviously, it will connect 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-Days coming earlier, the need to secure critical infrastructure for the state continues to climb. And it's now inside the planning horizon for both enterprise and government partners when we're talking about something that is 2 or 3 years away, not a decade away, right?

And so all of a sudden, and there's broad agreements, we were the early mover and leader on this last summer, but there's now a very broad agreement, right, between geopolitical competitors through to large enterprise, non-Quantum enterprise and, of course, ourselves and Quantum enterprise that this is very much something that if you're a CIO, CTO, a CISO, you now need to plan in because the chances of your job, life expectancy running right through this have just skyrocketed, right, in the last year.

So it has been a nice piece of momentum uptick for sure, Inder mentioned landing and expanding. And I think this is, for sure, 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. We talk about security as a key tenet 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 the leading player here, obviously, as we are today.

Our next question comes from [ Nehal Koski ] from Northland Capital Markets.

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.

Yes, it's more R&D tooling and things like that.

Okay. So then can you talk to the driver of gross margin being down about 600 basis points Q-on-Q.

Yes. I mean I've said this on prior calls, and I want to make sure that I make this very, very clear. This is a nascent industry. This industry in which scale will build over time. We are very focused on gross margin, obviously. We start with a huge advantage. Niccolo mentioned this earlier. We have a bill of material 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 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 sell to others, is EBITDA, and that's why we guide EBITDA because R&D is a big component as much as you're focused on COGS, yes, I am, too. But R&D is an important ingredient in our recipe right now, to maintain and accelerate into our road map. So that's what we look at.

Yes, as our revenues are doubling this year and maybe more than doubling this year for the guidance, and continue to grow, we have the ability to then drive a cost margin across the 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 assess 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. Niccolo, the walking cat architecture, can you discuss what you see as the advantages relative to some other new relatively qubit architectures, specifically qubit architecture, specifically?

Yes. I mean, look, the main advantage is ours is shop 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 on a single chip, right?

So we'll be able to tackle problems in the fault tolerant era that simply will not be tackleable by other architectures because they won't have enough logical qubits. 100 large qubits will not do, what, 1,000 or 10,000 large 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 if you go through our BOM, or bill of materials, we announced last September, our Analyst Day at the NYC that our bill of materials in 2025 was under $30 million. That's truly astonishing.

It's manufacturable. It is low. It is modest energy consumption. It is modest BOM. 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 BOM 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, 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. My friend Inder here mentioned hybrid workflows, hybrid data centers are coming. There's a recognition of that need. And IonQ, 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 work on that, whether it's AFRL and others as early as last year, that's going to accelerate, obviously, an 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, manufacturing techniques that are well proven, so we can move quickly and we can move at global scale.

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 road map that you guys had laid out a year ago where when you're talking about a 200,000 physical qubits, you're at 8,000 logical qubits, that basically implies 25 to 1 -- is that -- 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?

Yes, for sure. I mean this is -- 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, 49s because we've proven ion transport and ion 49s and we -- yes, we've been working with architecture for a long time. I mean it's a multiyear effort, not a multi-week effort type thing.

So yes, I mean, when we publish things in our road map, we have a very high, what I would call, do say or say do ratio, right? So end of the day, 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 team very much prides himself on delivering step 1 and then overdelivering against 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. 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 the RPO.

I mean -- but you can imagine that it's multiyear. In our [indiscernible] that will be filed, 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 1 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 next 5 years. And you asked a really go question. And by the way, congratulations on launching coverage on 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 3 decades ago, [ victor ] modalities that have highest coherence, best fidelity, lowest error rate. 3 of the 4 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 U.S. questions around 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 NOC. But then you have the operating costs after day 1. 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 Niccolo talked about a lot. And 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. That's really important. Keep that in mind just as much as we think about the power of the machine. That's number one. Number two, we're not just a maker of machines anymore. We are 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 to [indiscernible].

Our next question comes from Peter Pang of JPMorgan.

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 a 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 here?

We're exercising proven look, it's a nascent 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 you saw. We beat that by $15 million. Not that we expect it to be the -- $15 million, but we knew we would work towards what we've been doing for 4-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 1 is really talking about yet. The fact that we can deliver the 10,000 machines and then the 20,000 beyond. And to someone's question earlier, it becomes a modular upgrades, modular upgrades, not a machine replacement at that point. So you get a sticky, very, very sticky relationship with the customer and the mutual dependence.

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 last 4, 5 years would suggest we can actually even beat them.

Great. And then just for your next -- the 10,000 qubit chip, can you update us on the time line? Is that a calendar '27? Or is it calendar '28? Maybe just update on timing of that?

Yes. Look, I think we are focused this year on the Tempo, right? So 2026 when we last spoke, 2026, Tempo, 2027 in market 256 year after that in market 10K. Now because we have a team that is integrated across our compute now under leadership unified leadership, I would say, Matt, 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 road map to the left. You've seen us do that twice. When we bought Oxford ionics, we moved our 5-year road map 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 will be able to perhaps move, as you saw in our announcement, the road map 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 this year, Tempo, next year, the 256 year after that 10k, my colleague, [ Chris Balance ] at Oxford who obsesses over this 24/7 and his entire team are 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 1, work, and provide the compute power that they need and the application development.

So it's a continuing dialogue. We're happy to have it with you, Peter. It's an interesting evolving area. And when Niccolo and I joined the board 5 plus years ago, we didn't think the industry would be where it is perhaps 5 years from now, we'll look back and say, wow, so $3 billion 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.

Our next question comes from Vijay Rakesh of Mizu.

Great to see solid guidance. Just 2 quick questions, 1 on short term and 1 on longer term. On the short term, as you look at that mix of hardware and platform services, should that mix be about the same going forward? Or do you expect 1 to accelerate?

Again, I think it depends on where the customer begins their journey with us, right? So again, #1 rule in business meets the customer where they are, meet their current need, understand what they need before they try to sell them something, and then do the land and expand and anything else in cross-selling that you want to do. So rather than worrying about which part, which product of our doesn't would be growing more than others. I look at the whole company -- that's how Niccolo looks at it, we look at it as 1 P&L, and we're trying to drive outcomes for our customers.

The good news is the multiproduct sales that we just talked about, are demonstrating that customers are maybe starting with 1 and then adding more than one. And I hope that number will continue to grow over time. Our focus on 1 P&L, 1 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 and create innovation to happen faster and faster. This is not about Moore's Law. This is way faster than Moore's law, right? You know. So that's how we look at it, Vijay.

Got it. And then on your 2027 you have the ambitious plan of getting to 10,000 physical and 800 logical, how is that looking, I guess?

Yes. Early indicators, as we said in the prepared remarks on the 256, last quarter, we said we had already started to make progress on the tape-out. This quarter, we started to do system-level testing on 256. 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. Niccolo well. There's always an curve, but there's also a learning curve. And each learning curve helps you with the next one. Niccolo, I don't know if you want to add something.

Well, no, I want to add to this is we're working on 3 generations in parallel. Obviously, we've talked in my prepared remarks about our success in the first quarter on the 256 tape-out with SkyWater. We expect continued progress, momentum, success there. Obviously, 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.

And ultimately, it's got subroutines with dedicated components tiled in the hierarchy on each chip. And so going from 10,000 to 100,000 to 1 million is not a particularly demanding leap. I think if you looked at what has been driven between generations of classical GPU architecture, I would argue that we are on parallel or simpler, right? And so we look at this scaling now, as we've said repeatedly last year as really an engineering challenge. Everything in our blueprint is extremely realistic in terms of the constraints and the specific details on the competitive design, the error correction, the hardware control systems, ion movement, parallel gates, the fidelities that we're acquiring 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 some things that sort of crop up when you move from a few systems to dozens or hundreds or even someday 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, it becomes yet more proven out. We sell more systems, and we prove out another generation. But the hard work has 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 Longi gate in '95. And today, we have the highest 2-qubit gate fidelity. And of course, we also have the first shovel ready blueprint because we're not resting on our laurels. We can continue to put the pedal to metal and we keep pushing this. And we keep investing, and we will continue to do that.

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

Thank you, operator. As I shared in our annual letter to shareholders last week, my personal journey with IonQ dates back to reading our founders seminal paper on the world's first phonologic 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, 1 year into my role as Chairman and CEO, IonQ 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.

IonQ is 1 platform, 1 team, primed and poised to win. I want to thank our shareholders for their continued trust and our colleagues for their extraordinary efforts. 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.

All right. Thanks, everybody, for making it. I'm Troy Jensen. I'm one of the analysts at Cantor. I follow the quantum computing space, luckily. It's going to be a good year for -- good decade, right, for the quantum sector.

But lucky enough to have Inder Singh, CEO -- excuse me, CFO/COO of IonQ.

I know Inder has got a few slides he wants to go through first. And then I've got some queued-up questions. But if anybody has questions in the audience, just raise your hand, try to get my attention and we'll definitely open it up for Q&A.

It might be hard to see anybody with these bright lights.

I know, right? Yes.

So thanks, everybody, for joining us today. It's great to be with you. And thank you, Troy, for having us here at the company, at your event. And our company is, of course, a close follower of your points of view and what you put out there in terms of what the future holds.

So I thought I'd just share a few slides, for those of you who don't know the company, to explain the company. Because it's changed dramatically from what it was just a year ago. And I've been with the company now formally for about 2 quarters, and I was on the Board of Directors of the company when it first went public back in 2021, I was CFO of Arm, and we were working on sale of that company at that time.

This slide that I wanted to share with you is only 3 slides, I promise. One of them just sets the, I'll call it, sort of baseline for where we are today versus where we were a year ago and, frankly, where most of the industry still is. So this slide shows you, on the bottom left-hand corner, quantum computing.

So if you follow quantum, you'll first come across computing, of course. So most of the companies that are trying to create a computer or have one or deploying one are in that bottom left-hand tile on this page. That's the TAM, if you will, that we were part of also 1 year ago.

And we had built, at that time, the fourth-generation quantum computer, and we're deploying it. We have now built the fifth-generation quantum computer. Later this year, we'll be finalizing our sixth-generation quantum computer for next year customer deployments. Seventh-generation will be on the books already later this year, et cetera, et cetera.

So a lot of innovation for us in the bottom left-hand corner of this page alone. A very large market, a vibrant market. Lots of companies, some private, some public, some about to go public. But we are innovators in that area in a way where we think we have a sustainable advantage and a road map that goes out 5 years, which we intend to execute to, which will keep our machines in the leading-edge of what the world has to offer in terms of quantum computing capability.

We appointed our new CEO, Niccolo De Masi, at the beginning of last year. And as he took the helm, he took the company that has succeeded in that first quadrant already and started expanding it to the right, and creating basically the first and only, so far, quantum platform company that now has the other elements of what you see.

So quantum networking is about connecting quantum computers to each other, whether it's our quantum computer to someone else's, or ours to ours, but building the connectivity that, for example, a Cisco built in its early days as well.

Quantum cybersecurity was a reflection on the fact that quantum machines, as they become more capable, will be doing things that I think will start to threaten quantum -- traditional cybersecurity. And we will need -- the world will need quantum cybersecurity at that point in time. And that future state is getting closer and closer. So we acquired a company in Switzerland that is the #2 company in the world in quantum key distribution, and started announcing, as you've seen in the last 12 months, a number of wins with customers around the world.

Quantum sensing reflects on the fact that, if you are building quantum solutions, they need to be in space as well because quantum solutions that are deployed by other countries, in some cases, adversaries, are jam-proof. GPS can be jammed. Quantum offers an opportunity to have something that is either impossible or very, very difficult to interfere with. And then quantum in space gives you the platform to actually deploy some of those solutions in space.

So we are, still at our heart, a quantum computing company, of course, but we can now bring together solutions for different kinds of customers, and I'll show you in a minute what sort of applications, that take advantage of the entire platform.

This just shows you some of the key things that happened over the course of the last year. Some of the customer names up on top there are partners that we've worked with together. Our CEO is shown here as well. But year after year, and I've watched it from the Board for the first 4 years and then from the company for the last 2 quarters at least, we continue to execute on what we say, and have the balance sheet that we need behind us to be able to invest for the long term and not worry about where the next investment dollar is going to be coming from.

So a very strong cash position. No debt. My philosophy is always have like multiyear financial firepower to be able to do anything that you need to do for your customers, frankly, and then for your shareholders, of course.

And then I also get the question around, okay, so what are these being used for? And what we wanted to do was to demonstrate to you and show you on one page, candidly, all the different kinds of applications that exist today. Some of these we build ourselves, and we'll continue building ourselves. Some of them we do it in partnership with our customers.

But you see the use cases in the middle around life sciences, around energy, logistics, finance, cybersecurity. There are about 7 areas we're going to focus on ourselves as a company. So in addition to building the quantum computers that power the future of quantum, we're building the applications that run on top. It's nice to have the iPhone; it's better to have the App Store with it. It's nice to have the iPod; it's nice to have the music store with it. So we're making sure that at every generation of the computing journey, that we are building the applications that are most needed, and then allow others to build on top, of course, as well.

And then the customers that you see there are names of the customers that we've announced. There are many that we haven't announced that we're working with as well, of course, and applications we can't announce yet. But we are building the road map for all things quantum, whether it's on the ground in terms of computing, in space in terms of sensing, under the water in terms of helping underwater vehicles navigate more effectively, et cetera, et cetera, et cetera.

Those are the 3 slides I thought I would share. And then we can have a dialogue, if that makes sense.

Perfect. All right. So I'm going to start with a quick audience participation question. Who in the audience thinks quantum will be commercialized in the next 3 years?

How about 5 years? Inder, you don't believe it? I didn't see your hand go up.

Well, I voted with my career decision. I was happy being on the Board of this company and watching it for actually over the last 4 years become a market leader or the market leader and then watching it do these things that are up on the slide.

These are things happening today. These aren't like 5 years from now. These are things today. Five years from now, there'll be a much, much longer list, I think, of what this technology can do, right? I joined when I was at Arm, having sold Arm to NVIDIA, by the way. That transaction, obviously, didn't go through, and then we announced the IPO of Arm. But to me, this was the future of computing. And that's why I joined this company's Board.

So I'm a big believer too within the next couple of years we will see applications and problems getting solved with quantum, maybe hybrid networks, hybrid kind of computers solve them. So what I'm getting to is if we're that close, why is post-quantum security not like accelerating right now? If you're a bank or any type of government agency, do you have to be worried about quantum cracking your security systems?

Yes. And I think it's happening already, right? And I think it started with -- outside the U.S. initially, to be candid, with countries starting to sort of batten down the hatches, realizing that, at some point, encryption, which underlies all things that we know, can be broken. And you don't have to like break everything instantly, but you start chipping away at the different RSA protocols or the ECC protocols, which is not hard to do. It's getting closer. It's not like 20 years away, which everyone thought.

And so I think I would encourage everyone to put like a $0.01 notification on your bank accounts as well. But we're starting to see financial institutions get ready for it. We're starting to see governments get ready for it. We're starting to see more and more commercial customers realize that if their business model depends on anything digital, they want to be protected now.

There are a few flavors of quantum cybersecurity that people can choose, and we offer it all. One of the advantages that I think IonQ has established is we'll meet you where you are if you're a customer. So if you want PQM, we're there for you. If you want QKD and really want to have physical security that is very difficult even for a cyber -- future sort of quantum computers to break, we can deliver that now.

But I think more and more people realize you need application-level software security and hardware security at the same time.

Yes. So I'm going to go back to your slide, this one right here. So when I think about kind of the cycles of deployment of your platform, I mean, I think the systems to me are 3 to 5 years out, there's a lot of development names, can you talk about do you expect to see inflection in other areas of the business first, like we talked about post-quantum security, or like atomic sensors -- to me, atomic clocks and sensors make a ton of sense right now. We don't have to wait for development. So do you see different parts of your business inflecting at different rates?

Yes. Look, when I see this chart, I remember my days at Cisco Systems where we became sort of the one-stop shop for all things networking. And we were agnostic. We were willing to connect anything to anything. That's what this company is doing at the same time as well.

So you'll see that at any point in time, any one of these levers that we have, product families, if you will, can be firing, and others can be firing as well. It gives you the ability to leverage different revenue streams, of course. But also it gives you different entry points. So in some cases, our customers may want the network before they want the computer. And there's been cases of that. In other cases, they buy the computer first and they say, "Well, what good is this if it doesn't connect to anything? Help us do that."

This morning, we announced an investment, with Cambridge University actually, which involves a quantum computer and a network, connecting 2 rival universities, Oxford and Cambridge, which I thought would never be bridged, but they are. So more and more we're starting to see people starting maybe with cybersecurity, to your point, and saying, "If that's going to be broken first, I want that," and then running the network as well.

So look, I think the quantum computer heritage that we have and future road map that we have that we're executing to is without compare, absolutely without compare. And so the 100-qubit machine that is being deployed this year, the 256-qubit machine being deployed next year, the 10,000 machine after that, the 20,000 after that and so on, that road map is unmatched. And it becomes a question of execution and leveraging that semiconductor ecosystem, which we're doing more and more of.

All right. Since you brought it up, I did want to talk a little bit about Oxford Ionics and that product road map, or the road map, the technical milestones you expect to hit. So Oxford Ionics is at what qubit count now? Is it...

Well, 256 is going to be our first Oxford Ionics based system.

Yes. And that comes out when exactly?

It's in development right now. The chip has gone through, I said on the earnings call, tape-outs A, B and C, D doing well. So customer deployment should begin, the CEO of that business will tell me, early next year. I think it can be done perhaps even sooner. But yes.

And is your confidence on the road map, for a company that's at 256 qubits today to talk publicly about 200,000 and higher, and can you just -- the conviction that you guys have on hitting that road map?

Yes, I think it's a big step-function change from where we were 2 years ago, and frankly, where a lot of other quantum companies that are trying to do trapped ion, still are, which is using lasers to control the ions. And you can imagine that as you use more ions, you need more lasers. So the more powerful the machine, the bigger the machine potentially, the more energy consumption, et cetera.

With Oxford Ionics, we're able to switch to electronic control of trapped ions rather than lasers for doing that. And that allows us to use an ecosystem that already exists, foundries that already exist, a chiplet strategy for -- starting with 1 chip and scaling it up that already exists, but use it in a quantum sense. And that's what gives us the confidence to go from the 100 we are today, the 256 that we're going to be delivering and the 10,000 beyond.

Yes. Okay. Perfect. How about just a little bit more on how about networking, right? When I think you guys -- I guess, my Cisco legacy, I think about switches and routers. Is it going to be different equipment? And how come the existing networking guys aren't talking about this yet?

Look, I think we're happy to be the evangelist of it. My former company, Cisco, is waking up to it as well, as you can imagine. It's an opportunity that people maybe didn't think about a year ago and are thinking about it now. So some of our customers actually wanted the quantum network first, but to use it over existing fiber, dark fiber, high-quality fiber, but light it up and then set up a quantum communications network. And we did that.

And then more and more, we're seeing people starting with computing and saying, "Okay, I want to connect it to things." As I said, we will meet the customer where they are. And across Europe, we've announced at least 3 deployments already of networking. And in some cases, networking with post-quantum cybersecurity.

Perfect. Okay. One thing I forgot to say on the Oxford Ionics, I know that was part of the -- like a short thesis on you guys, right? To me, I think what you said was so critical. You guys were previously trying to control the qubits with lasers, and that's extremely hard to scale, correct? And moving to more of an electronic approach is going to provide better scalability for you guys? So the Oxford Ionics I could see more of a catalyst, a positive, not as much as negative.

Well, I mean, I'm not sure what the short thesis. I mean for me, sort of like this industry was nascent and didn't exist when I joined the Board of this company, candidly. And 4 years later, we have the world's largest quantum computing company in this company.

The guidance we've given for this year has a midpoint of $235 million. So the upper end is almost $0.25 billion, rounds to, whereas it was like less than $2 million 4 years ago. So the numbers speak for themselves.

Once you start having repeat wins, once you start having a customer say, "Okay, I own your fourth-generation, I want your fifth-generation computer, and by the way, I want access to your sixth-generation when it's ready," that's the flywheel effect that Cisco probably experienced 25 years ago, 30 years ago. Early days, right?

And so I think you start to see a customer that buys your road map on computing and then says, "I want the other things as well." And having like dozens of products instead of one product -- like in that bottom left-hand corner, we had a product, a product with a great trajectory, but a product. When you have the rest of this, you can now build a solution.

To your point earlier, sensing is a solution. Having a sensor alone isn't enough. Having a platform to put the sensor into, having the atomic clock that's considered the most accurate in the world to add to that, that's what creates a solution for a, let's call it, national security concern.

Yes. Perfect. All right. So now IonQ has consistently argued that trapped ions offer superior fidelity and conductivity compared to superconducting approaches, probably most approaches. From a scaling perspective, how confident are you that that architecture will remain competitive as these systems move towards fully fault-tolerant?

Yes. We feel very confident with the decision made, I guess, 30 years ago, by the original founders of the company, right? So whether lucky or smart or some combination thereof, they picked a modality that doesn't require that you cool things down to like absolute 0, at which point like everything stops moving, so you have to go just a notch above that.

Maintaining -- I'm not knocking any technology, mind you, but like maintaining absolute 0 degrees Kelvin or like less than 0.2 degrees Kelvin is hard. Creating material that operates like a circuit at that temperature is hard. Scaling that is hard.

It's kind of like the laser thing I was talking about. The more powerful a superconducting thing becomes over time, the more cooling needs, the more difficult it is to maintain in that steady state, the harder it is to connect any-to-any qubit to each other.

So there are a number of things that, I'm not saying it can't be overcome over time, sure, they can be probably. But if trapped ion gets you there first, and it's cheaper by orders of magnitude, then I think you start to see customers choosing actually.

Yes. Just for the audience, so there are kind of 2 technologies, photonics and trapped ion, that you don't need refrigeration, I guess maybe [ neutral atoms ] too. But superconducting, you need these dilution refrigerators that are like millions of dollars. So arguably, if trapped ion can scale, it will be a much cheaper solution than superconducting from the grand scheme of things.

So I guess a question for you, do you think we're headed towards one dominant architecture technology? Are there going to be heterogeneous ecosystems or hybrid deployments or?

Yes. I mean look, I'm an engineer also. So I believe many can coexist over time. But frankly, a few, 1 or 2 maybe, become most relevant over time, right? And I think those are -- and I'm not going to try to say which ones they are. I think trapped ion is of course of them. And whether the other one is photonic or superconducting or something else, it really just depends.

A lot of quantum depends still on science and scientific breakthroughs. And with trapped ion, for us, at least, those are behind us. Starting with a natural advantage of having few errors to correct, higher fidelity, longer coherence times, gives you the ability to get to fault-tolerant computing more easily. And I think that's the holy grail for this industry, is to get to fault-tolerant computing.

We announced recently that we've achieved 99.99% fidelity, which is like the last thing that we needed to have, candidly. Oxford Ionics helped us get that, of course. And now we're leveraging Oxford Ionics road map to actually scale the machine to logical qubits. You can pound your chest and say we have millions of qubits 1 day, et cetera, cetera. That's great. But if you're using like 99% for error correction and like 1% are actually usable, that's not that helpful. In our case, we're starting with fewer errors to correct, and therefore, it's a question of now just scaling the machine to get the logical qubits.

Yes. So ions are natural, right, so they're more pure. Fidelity is better...

Bingo.

Using the ion. All right. Can we talk about your software strategy, right? I mean you guys have tons of hardware, obviously, there's software embedded. But like compiler applications. Do you have a platform approach to the software side of it?

Yes, it's a great question. I think this again -- again, this is one of the smallest companies -- actually, the smallest company I've been part of directly. Most of them have been very large companies that know how to do this at scale. And what we're doing is making sure that this company also establishes that scale.

One thing that you need is software scale, to your point, the ability to have compilers that work with the machines that you create at the same time. And for IonQ, what I watched from the Board at least, was 4 years, 4 generations of creating compilers that work with each successive generation of quantum computer. With the acquisition of Oxford Ionics, we get the chip expertise, and then we use our compiler experts who've built this over time already, combine with that team to go execute on the overall solution.

The solution of a quantum computer involves software that manages the machine itself. Compiler is part of that. So we have that at scale. It involves physicists who understand how to make this work and to integrate the systems together. And then it involves, importantly, application developers. And almost no other company that I've seen is even talking about the applications themselves.

We are not just talking about it. We have, I think, one of the world's largest, if not largest, application development team. So the machine and the application that runs on it, like the ones you saw, that's the capability we're building right now. And so we will scale that, and having more than $3 billion of cash allows us to have comfort to be able to scale the software expertise just as much as the hardware.

Yes. Okay. And so for IonQ, is the focus for you guys really on the U.S. government and their allies? Because I know you -- there's a lot of talk about U.S. supply chain. You look at your acquisition history. Is that the focus of you guys, would be this U.S. supply, selling to U.S. administration and our allies?

Look, I think we've rapidly become a very global company. So I mean, of course, we love our U.S. customers and value them over time. On the earnings call, I mentioned that more than 30% of revenues are actually outside of the United States now, 60% are nongovernment as of last year.

And as we think about further investment, yes, as you develop machines that become more capable and more powerful, governments start to take notice. And that's where 4 years ago, it was mainly labs looking at things. Even 3 years ago, probably labs looking at things. For us now, it's starting to be what you were seeing at the very beginning, which is actually deployment at scale.

And so what I'm -- the trend I'm starting to see, customers that we're starting to see, is data center operators, they actually are saying, "We have the GPUs. We love those. You need a TPU next to them to do different types of things that GPUs just can't do." And so that's when you start to get, again, this adoption effect happening.

Will the U.S. government be an important customer? Of course. Will they want us to help sell similar solutions to allies? Of course. But that's an and. What I'm seeing right now is like financial services institutions and others say we need to look at the ability for what quantum can do.

We're starting to see life sciences companies say, help us with drug discovery. How can we do that earlier? We're starting to see some early attempts at trying to understand protein folding, which we demonstrated last year. So great applications outside of government, great applications outside of what you would normally think.

Yes. Exactly. That's a good point, a lot of commercial applications. I do think those will happen first.

So let me see, is there any questions in the audience? If I can see hands? All right. Right here.

[Technical Difficulty]

Yes. Look, I think I'm not going to compare-and-contrast very, very different companies, right? I think I respect IBM for everything they've done over the past decades and they will do in the future decades. So putting aside kind of what their strategy may or may not be, this is a pure-play quantum company. And so for us, like this isn't -- quantum isn't in our other category of revenue. This is like our revenue.

And so what we're trying to do is make sure that we have the strongest ability to invest in a 5-year road map of technology solutions. Others will be in the market also. That's what makes the market.

One really good thing about this industry and is very different than any other industry I've been in, prior to this, which is in other technologies, you're trying to displace somebody else. At Cisco, we were trying to win against Ericsson and Lucent and Nortel. And we did. But it's hard because you're dislodging an incumbent and they don't want to be dislodged usually, right?

In quantum, there isn't an incumbent. And so like people ask me, like, do you think about your competition? No, not really. They actually use components from us in some cases. I'm not naming anyone. But we make components that other quantum companies use today. It's in our interest for the industry to actually grow. It's not a zero-sum game. We're not taking food out of somebody else's mouth. This is about creating a capability that simply doesn't exist.

And so the more companies that succeed at it, the higher the odds that this becomes an industry at scale itself. But we're not standing still, right? On this slide, you see at the very bottom the quantum application layer. That's really important.

So having all the products is important, having the software, the hardware integration, expertise, the best physicists in the world, and even creating the ecosystem by investing in some universities that will create graduates of quantum, that don't exist today in some cases, right? So having all of that knowledge base, having an ecosystem is important, applications are very, very important. You have to have not just like proof-of-concept things, but application development at scale.

Imagine like a quantum hedge fund one day against a classical machine. Which one do you think you'll bet for or against, right? I think I know which one I would bet in favor of, right? Those are the types of things we want to build, the cutting-edge applications that simply don't exist.

Any other questions? All right. How about one more for you here. When investors look at IonQ over the next 5 years, what are the 2 to 3 milestones that will define whether your company has truly been successful?

Well, I think that, to me, putting up the numbers, right? Showing the revenue growth, showing the repeat customer, showing the adoption, showing the globalization, showing the entire solution. And it's nice to have a machine that's much better to have like a road map.

Most technology customers lock into our road map. So any company that has a road map that says, "I'm going to sell you this today, this next year, this 3 years from now, this 4 years from now," you have to execute, of course, right? And now customers can lock in and say, okay, so how easy will you make it for me if I commit to be with you on a journey?

And so I think what we have to do now is keep executing on that road map that I talked about: The road map in quantum computing, the road map in networking, the road map in sensing, and not just be a one-trick pony. So super important for this company to execute that.

And you're starting to see that flow through our P&L. You're starting to hopefully see that in the confidence in which we describe our business, because our customers are not labs-only anymore, we can actually see it being deployed in the real world.

The second thing I think is establishing scale within the company, the ability to, yes, acquire some things, but quickly integrate them. And so like 2 quarters ago, I mentioned that was going to be a focus for us. I reported recently that we have now successfully integrated the things that we acquired, at least from sort of a common denominator standpoint. And then the engineering integration begins after that to create those solutions.

So I think those 2 things we have to execute on, for sure. It's also an industry in which we have to maintain very sharp focus. And it's a technology that can do amazingly powerful good things and amazingly powerful not-so-good things, just like AI. And so we have to be very conscious of how we balance for our customers, protecting against the inevitable misuses of technology versus just the use of it. And so having quantum cybersecurity today is one way for us to show that responsibility.

I'm glad you brought up the integration comment because, to me, I've seen companies struggle doing one acquisition. You guys have done about 8 now or so, right? So I'm glad to hear you guys are focused on the integration.

But I would just end it, we got 30 seconds left, when do you think IonQ will crack encryption codes, if you had to put a time line on that?

Well, the only thing I can say publicly is what the Department of War has said themselves, which is they expect it to happen in less than 3 years. So it ain't 20 years away, for sure. As these machines become, in logical qubits, useful qubits, much more powerful, and this is public, like, sure, the algorithm takes 4,000-ish plus or minus qubits, for RSA-2048, you can look at our road map and do your own math on how many years away that might be.

Okay. 4,000 logical to crack...

Well, that -- you can Google it and you'll see that that's roughly what it is, plus or minus, right? And like you do it rapidly or you do it over a year, that makes a difference, of course. But we think as these machines become more powerful, and you have quantum cybersecurity -- or regular cybersecurity companies here, just want to be respectful for everyone, but I think you need to have an awareness that encryption is at risk.

Awesome. We're out of time, Inder. Thank you so much.

Thank you.

Appreciate you coming here.

I think we are live. Welcome, everybody. I'm Joe Moore, Morgan Stanley Semiconductor Research. Very happy to have Inder Singh, CFO of IonQ. So thank you for coming. Appreciate you being here.

Of course. Thanks for having me.

I think we haven't had you since the Arm Day. So good to see you.

So you've been in the CFO seat, I guess, a little less than a year, but you were on the board before that. What drew you to the IonQ opportunity?

Well, I mean, like I said, I was on the Board, I actually joined the Board when the company first went public and quantum computing 4 years ago, like no one was really talking about it, and it seemed like it had promise but you never know for sure. Over the 4 years that I was on the board, I got to see the company actually scale the ability to make us a more powerful computing device year after year after year. Peter Chapman, who was the prior CEO, took it from basically almost 0 revenue and created a product that was more powerful each time in the market and then other companies that have gone public around the same time also. And being an Arm, I was like, okay, this could be the future of computing. And wouldn't it be great to have like a front row seat as part of it.

So i was still CFO. We had sold Arm to NVIDIA, who was in that holding period waiting for approval. And this became an interesting company, the more I watched it scale. It had the right engineering talent. It had -- didn't need go-to-market much because, frankly, sales were still pretty small.

And mostly, it was like research laboratories in the first few years or so. But to see it come out of the research laboratories. And then importantly, when Peter announced his intent to retire and move on to other things, we faced a CEO succession and I was Lead Director at that time. I was on the Audit Committee. And we were looking at internal and external candidates. And it was hard to find somebody with 10 years of public company quantum company experience like there were none. And so we looked at all of the other candidates and sure enough, among our choices, we had a really good CEO, who I thought physics major, Cambridge, multidimensional thinker. So early last year, we appointed Niccolo de Masi, as CEO of the company; and today he is permanent CEO.

And so he very rapidly lived up to my best expectations as someone who is not just going to be like a linear executor, but looks at the market more broadly and says like, what are all the different things, quantum or quantum related that we need to have and kind of like Cisco, if you think about Cisco, the way they became the company, let's try to be that and look at the networking of quantum computers, the security that you need after a quantum computer breaks encryption. The space-based assets you might need to quantum secure, et cetera, et cetera.

And so in September, I moved from the Board to the company as COO and CFO. And it's been pretty amazing. It's been like, I don't know, 5, 6 months, it feels longer than that for sure. But watching the company not only build a machine that each year was faster or had more qubits, but also a company that is building the applications that go with it, because what good is the iPhone without the App Store, et cetera.

And then you have a portfolio of products. A year ago, we had 1 product, and now we have a dozen or more. So many vectors of growth. And yes, as a Board member, you know, you get to see sort of like snapshots of the movie, but never the movie and I wanted to be part of it.

So maybe as a relative newcomer perspective to the company, can you talk about why investors should care about Quantum? And we're not at the point yet where we're doing things that can't be done classically, but it's coming. What types of applications do you think will happen there? And should we think about the market cap of AI as being the territory you're going after? Just why should we care about quantum? Obviously, code-breaking and things like that we get. But the sort of broader use cases.

Yes, those are great questions. I mean I think the promise of quantum is around doing things that classical computer can't do, right? And so there's this thing called Quantum Advantage and at some point, you reach that where classical computing just cannot do that many number of calculations or that any number of simulations of things before giving you the best answer. And forever, that's been like a bit of a moving target, frankly, right? So NVIDIA isn't standing still. I mean they keep innovating. So classical computing moves as well. But at some point, you cannot simulate a calculation on a classical computer that a quantum computer could do. We're closer to that than we were 3, 4 years ago for sure. It's a humble opinion, maybe a year or 2 away before you get to that point.

The power of Quantum, as most people may know or not know, is the fact that it's like 2 to the n power versus 2 times n. So the number of qubits that you add have an exponentially more powerful impact potentially. Quantum computers are right now still of different modalities, right? They're superconducting and there's photonic and there's annealing. And yes, there's ion trap which is what we have. So some start with more errors, some error-corrected, so start with less errors. The point of the industry though is that there'll be 1 or 2 modalities probably that will succeed in the longer term, to be decided which ones. Ion traps begin with fewer -- and I look carefully at as much as I know. I mean a couple of engineering degrees, but enough to make it maybe dangerous to look at the different modalities and realize that there'll be some applications that work better on one and some better on the other.

For investors, I think right now, there are a lot of companies that are private that want to go public, some that are private, they want to stay private, that are public already and available in the market. For me, it's a question of is there a company that is building not just the iPhone, if you will, but the iPhone and the app store at the same time. The ability to do the application that runs on that computer each successive generation and what we've tried to do with IonQ is to be that, build enough applications ourselves to make it relevant either in life sciences or the acceleration of drug discovery or [indiscernible] science, not everything. And then also be able to keep that going. So each successive generation with a road map that you can invest behind.

So if we are only in quantum computing as we were a year ago, that would be interesting itself. But what Niccolo has done quite rapidly is add the networking piece, as I said, the quantum security piece, as I said, the sensing piece and the other elements that you may need for different kinds of solutions for different types of customers.

Okay. Those time frames of maybe being a year or 2 away, I feel like a lot of your quantum competitors seem to point more to several years away. I guess, is that -- would you make the case that your technology is just going to be ready sooner? Or is there just a different -- are we different definitional things about readiness, just on how do we think about that.

Yes. Joe, that's a great question. I think there are a couple of sort of like leading indicators I always look at, right? So when something moves from the lab to a commercial deployment, that's a good sign. When something is a repeat purchase by a customer that says, I'll buy your last generation, this generation and the next generation potentially, that's a validation. When you start demonstrating, for example, as we did with AstraZeneca, the ability -- and by the way, that was in partnership with NVIDIA, right? So -- and you can argue which was the accelerator to the other. And I think it was a QPU, probably the accelerators over GPU. There are things you can do in the QPU that you cannot do as efficiently on GPUs and vice versa.

So that kind of hybrid computing beginning to be deployed more and more is what I'm seeing. And to me, that's another litmus test for has something reached the ability for it to be deployed in more places. I'm seeing more AI factory and data center operators say we want QPU in there too. And so those kinds of patterns, along with the use cases that I mentioned around AstraZeneca, protein folding with [indiscernible] and then applications that we will build for an energy grid operator, for example, that is one of our customers who bought our network first and then the computer and wanted us to help them build an application to optimize the electric grid.

So data center operators come on and maybe you saw recently, data centers are falling off the grid just as fast because they sense the electrical current being -- imbalance of some sort and they go to a backup power. So grids are having to deal with sudden drop-off loads as much as well. If you're a grid operator, you've got to keep it up no matter what. So those are the kinds of things that I think are real applications today. And for us, like every successive generation, which is 1 a year, the road map that we've built now with a semiconductor base going forward versus lasers in the past, allows us to maintain the cost advantage, I think, of the promise of quantum computing and also introduce more things in a more predictable way using a foundry system that's been built over years and years and years now.

Okay. And then the kind of world-changing applications that you talked about on the earnings call, would that be AstraZeneca? Would that be -- like what are those?

I think those are good examples of them, right? And when I say world changing is a very big thing, right? But like looking for the causes of chronic diseases, trying to find how protein folding either affects disease of the brain or memory or not. These are real life things that have already begun to be tried. Some of them get more capable, the more qubits you have, as you know. And then others become enabled by more qubits down the road. So our road map that we've published is a 5-year road map. It goes from 100 qubits, which is the next-generation machine rolling out now. It's our fifth generation machine, the sixth generation moves to semiconductors. And that's where we think that you now start to get economies of scale, lower cost potentially. And then the energy consumption, as you all know, and you know this from all the work that you do on semis. GPU clusters, AI factories use a lot of energy. Quantum computers of the kind, like ion-traps that we build, don't.

Yes. Maybe talk about the modalities and why ion-trap -- I mean it's always seemed to be aesthetically appealing to have something that can just sit in a box on my desk and do stuff rather than build low-temperature superconductors. But obviously, there's success on all modalities at this point. Like it's -- for a technology that's getting relatively far along, there still doesn't seem a clear-cut consensus on which modality is best.

Yes. I think -- and that's fair. I think that there are some who are choosing superconducting, and that's great. I think that it requires, as you say, not just cooling, but like down to 0.2 degrees Kelvin. I'm told that it sometimes takes a month to turn a machine like that on and get it a temperature down. The -- but again, it could be something that is a long-term solution. There are others that are like still require scientific breakthroughs, photonics tend to be 1 of the hardest ones, for example. In the case of ion-trap whether lucky or smart, the founders of this company like 30 years ago, whenever they thought of this, and wrote the paper on. It started with ions which exist naturally in nature and don't have to be created. Have a charge to them so you can actually say to an ion, do this, do that, so make it dance, if you will, entangle it, use it for computation.

It naturally has fewer errors to correct to begin with. And then -- so you don't have the overhead of error correction as much. And then you have the ability to build applications that as we're doing ourselves as a company, scale with the qubit count that you've developed. And it's the logical qubits or not the physical qubits that companies talk about often, I think. Joe, you know this, it takes standards sometimes for everyone to talk the same language. Those standards don't exist currently. And I think that makes it easy for investors, companies, customers who get confused which one is better? This 1 says they have more physical qubits. This one says I have that. To me, in the end, it's all right, which application can you run first on which machine? And that's kind of what we're trying to do, do both, build the machine, build the application.

And how does having that full suite of networking sensing software that you've acquired, how does that help you to get there?

Yes. It's -- so I worked at Cisco. And one of the things that I've learned is obviously like be agnostic, like connect anything to everything. And number two, make sure that you have everything in 1 roof and then you can start with a customer buying 1 aspect of your portfolio moving to another. So we already have examples of that. We have a customer that is an electric grid operator that had built a dark fiber network, high-quality infrastructure and said, I want to actually put a quantum network on top of this and provide more connectivity to my growing list of enterprise customers in my region. And then said, we now want to buy a quantum computer, so I can deliver more services and applications to them as an additional revenue source.

And we've had others that start with quantum computing and stay with quantum computing and don't need the networking. We have in Chicago, for example, a computing device deployment, leading to, okay, I need to connect to this other place as well. Our networking solution, which we're selling today globally connects our computer to anyone else's computer. So it's agnostic. And a lot of the work we did over the last 4 or 5 years was learning how you do that? How do you take a quantum computer, put it onto a telecom network, same signal being carried as DWDM and other things and then translate it back to the frequency that you need to have for quantum computing.

The other elements around sensing, which is around making sure that GPS, which can be jammed, it has a replacement of some kind in certain environments where, for example, the U.S. can depend on PNT, position navigation timing and not face the same jamming, that was an idea that came to us from a customer, and -- maybe more than 1 customer who actually said, "Well, if you had that capability, we'd look at you, too." So they may start in 1 place and end up in another place. The cross-selling opportunity, I think, those things, when they start to flow through your P&L and your revenue start to grow, and we just reported, as you know, $130 million we guided for this year as well. And then organic growth continues to be 80% or better and I indicated 2016 (sic) [ 2026 ] could be even 100% perhaps. That means your core business is growing and these other businesses are driving more opportunities for growth.

And maybe talk about that 80% organic growth. And I guess, how much should we even be focused on revenue as kind of the real value of the company? I mean, obviously, this technology is kind of at a development stage. It seems most important to hit the proof points but you have a lot of revenue as well and the fact that you broke out organic revenue growth is helpful to understand how much came from acquisitions. So what's driving the organic growth rates that you have? And how much should we care about it?

Well, look, as usual, product cycles drive revenue growth, right? So the fact that we keep investing in R&D, which for also like a mantra, we have to stick to. For my arm days, 1 of the learnings was like 80% of every dollar you spend should be on R&D. We're not there yet at IonQ. We're trying to get there. But the idea is keep investing in innovation, and you know this better than anyone. And that's how you maintain your advantage for customers. Ultimately, that's what we're trying to deliver. And then hopefully, of course, for investors. The organic growth -- some of the metrics that I provided on the earnings call was actually from listening to investors Okay. So it was my second quarter reporting earnings. In the first quarter, I did sort of like a listening session around what else would you like to hear? And the questions were around, like, are you buying things because your organic revenue isn't growing? Or are you still selling mainly to labs? Are you still U.S., et cetera, et cetera.

So each of the data points was designed to like provide transparency into the revenue sources, and we talked about commercial, we talked about international growth, and we talked about organic growth. I'll add more metrics as we go along. If it feels like -- help investors understand like how are you getting all of this growth.

Because I hear both the positives and the negatives, but you're kind of like -- it's like judging too much -- being too judgmental about revenue when we're sort of -- nobody's claiming that we're doing something yet that's a breakthrough, like we're kind of getting there. but like that's when you get paid really. And so everything up until that point is going to be development. And it's going to be -- there's some related party and all that, that goes into any kind of development relationships. But I feel like it's really the technology proof points that I mostly would care about.

Yes, you're absolutely right. And I think that the fact that we have now put most of the scientific breakthroughs behind us, achieved for 49 Fidelity, for example. So other modalities still have some more work to do. I think what we now have to do is ensure that we can get from where we are today, which is our fifth generation machine with 100 qubits to 256 qubits at the end of this year, 10,000 qubits next year, 20,000 qubits, up to 2 million qubits. And I think that is a road map that we have been working hard to derisk and execute, if not accelerate.

So some of the things we've done are to ensure that we can achieve those sooner and move things to the left. The more you move stuff to the left, the earlier you can deploy some of the game-changing applications you're talking about.

Yes. And I don't mean any of that critically. It's just at this point, it feels like really, this is a technology that isn't really that economic yet. And so the development is going to be what drives the revenue. I guess in that context, you're going to be at GTC later this month at NVIDIA's developer conference. And obviously, NVIDIA, I've sort of seen this evolution from sort of being dismissive of quantum to actually embracing it and potentially making a lot of money from it because he's got a lot of coprocessors that sit in these quantum systems. How do you think about that relationship? How do you think about the advances that they're making? And is that something that will help you guys move forward?

Yes. We've been working very, very closely with them, as you can imagine. I mean our customers also want us to work very closely with them, right? So they may start with an AI cluster, AI factory data center. And then some of the customers are saying, "I want to put the GPU next to it." And so we work closely with them to make sure interoperates with CUDA-Q, of course, but also like AstraZeneca was done jointly with them, right? And it was an effort that AstraZeneca benefited from. It allows us to take that and replicate it with other pharma companies also. So I see like a QPU, GPU environment where some things are done best forever on GPUs, perhaps, other things better done or best done on QPUs. And so I don't think one is replacing the other for sure. I think one is going to be augmenting the other.

There may be quantum only deployments. I can see those happening as well. But like more and more data centers around the world, we announced KISTI in Korea, for example, and they have a GPU supercomputer that they've deployed. They wanted the quantum computer to work with it, sit next to it. And that's what we're deploying there. So yes, we're going to be at GTC. You'll hear more about what we're doing with them. But I see that as a long-term partnership.

Okay. Helpful. Speaking of long-term partnerships, can you talk about the role of the U.S. government and obviously a big federal priority in quantum? How is that helping you guys?

Yes. Look, I think there are many dimensions to that question for sure. So I'm going to take it one at a time. I think one that you're referring to is what DARPA is doing right now in terms of A, B and C sort of like I call the good housekeeping seal of approval process to say this modality, this technology is ready to be deployed. There are customers that, I think, in the government that depend on that and look at that for validation of the technology. We work very closely with DARPA, of course. And we've gone through A and B and C lies ahead. What we're starting to see -- I'm starting to see is customer engagement already start to happen with government customers because they've seen you go through A and B. They will continue to look at it, of course, and whenever C happens, they'll either have waited for that decision that to happen or maybe made up their choices even earlier.

It's good to see that. And it's good to be frankly among that process. The other is the QBI,and certainly, that allows multiple agencies to also coordinate and makes it easier. I think that -- and you may see this as well in what you look at, virtually every country that we have met with, I have met with is putting quantum up there among their top 5, if not top 10 priorities as a nation. And yes, they want AI. Yes, they want the ability to do genomics and other things. And yes, they want quantum also.

So it's not just the U.S. It's like virtually every government in the Middle East and Asia. We've hired a new CRO, Scott Millard, he comes from Dell. He worked directly with Michael Dell and helped scale their AI business from like nothing to $20 billion-ish and more. You follow them even more closely, I'm sure. And he's bringing this very disciplined scientific approach to say, pursuit and capture, target the right customer, right employee. But I love about one thing he said was like, follow the AI money, follow the AI money because that's where you're going to need a quantum computer either now or in the future. And he was right. We're starting to see that play out.

Okay. There's a lot of AI money.

Evidently, yes.

Seems to me. Okay. And then any other countries to highlight? You said other countries outside the U.S. are critical.

Yes. I mean there isn't a country in the world that probably doesn't want to have something. As these machines become more powerful, and I mean like beyond 100 qubits, probably 256 qubits, maybe 10,000 qubits. At some point, I think we start seeing similar export control questions that we need to deal with. So we are starting from the get-go and saying, let's assume that regime is in place already. Let's ensure that we're selling a computer to a country where we would be able to like support that customer over a long period of time. So there are some countries we will just not do business in, as you can imagine. There are many countries, however, that are wanting it. We can do it. But even then, we'll check with the U.S. to make sure that this is going to be something that we can support for multiple generations of machines over time.

Okay. You talked on the earnings call about demand exceeding supply. Can you talk about that a little bit and how you think about the supply chain to serve that demand?

So like there is no manufacturing foundry process for classical computer machines. So we had to build our own factory. -- right? So all of the generation -- the 5 generations that I've talked about, including the current one, we build in Seattle. And so we design between College Park and Seattle and build and then deploy at a customer site. So we're a manufacturing company as it is. The demand we're seeing for the 100 qubit machine that's rolling out this year, is higher than we had anticipated based on prior demand projections for earlier-generation machines. I think the applications and the machine may be hitting the spot for many and more customers because they want them to do that.

So I started on September 5, I think, by September 10, we had already started deciding what we need to debottleneck either in our ability to manufacture or in our ability to deploy. Both are equally important. And again, the COO focuses a lot on that to make sure that we can meet the demand. And yes, absolutely, the demand for them for more tempo machines than arguably we can manufacture today. Thankfully, that facility in Seattle does have an extra floor that we also own with plenty of real estate if we had to expand. However, as we move from laser-based machines, which are prominent these days, to semiconductor and electronically controlled ion-traps, we can start moving into a classical semiconductor foundry with older nodes, not our own factory. So at some point, the manufacturing can be stopped in Seattle and moved over to an existing foundry.

That's helpful. So I just have 1 more question and then we can open it to the audience, if there are any. Your cash balance, $3.3 billion. How do you feel about that? Do you want to raise more? The company does continue to be acquisitive. Just how do you think about the cash balance and the uses of that cash?

Yes. Look, I think having a strong balance sheet, having cash gives you a line of sight to being able to invest for the longer term. One of the pitfalls of all public companies is the 90-day cycle and the obsession with this year's financials. And like what will the world think if I spend more on R&D, et cetera, et cetera? The ability to have enough cash to think like multiple years not just for acquisition or even just organic investment in R&D infrastructure and so on, gives you the confidence, but also it gives your customers the confidence that if they purchase something for you, you're going to be around for a while. In my experience, probably in yours, that's very, very important to have.

And you are competing with IBM, Honeywell, people like that, that have a lot of resources as well?

They do. Of course, they do. I respect IBM in everything that they do, right? And I want them to keep investing in this area. I hope they'll keep investing in this area because we need to have an industry. You can't just have an industry with 1 company. So IBM, of course, superconducting, their solution, of course, what's not to like. The -- again, like what we're focusing on is a bill of materials that is less than $30 million. As the machine gets more powerful, we start making it on semiconductor base, it should get cheaper, not more expensive. Ours plugs into the wall. Superconducting needs a little bit of a grid.

That is cool. Yes, I have to say, I just seen them facilitate. So it looks like it just plugs in just set right next to my desk.

But the point is that when you think about a customer who wants to invest for the longer term and thinks they're getting the 100 now, the 256 then and 2 million eventually, they're going to be living with that investment choice for a long time. And with Quantum or as with anything, it's not just about the initial cost of the machine that you buy, it's also the running cost once you have it. And the cooling alone, keeping everything low temperature, helium 3, et cetera, et cetera, et cetera, TCO compare -- for an intra type thing to an equivalent like I call it, generic superconducting is not even in comparison in terms of TCO. Not everyone is thinking of a TCO always. But I do think that over time, that will become a compelling argument for why doing really, really high-end computing with lower energy consumption and lower cost, frankly, becomes an advantage.

Okay. Great. Let me see if we have questions from the audience. Okay. If not, we can wrap it up there. Inder, thank you very much.

Awesome. Thanks for having us. Really appreciate it.

Thank you.

Welcome to the IonQ Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Hanley Donofrio, Director of Investor Relations. Please go ahead.

Good afternoon, everyone, and welcome to IonQ's Fourth Quarter and Full Year 2025 Earnings Call. My name is Hanley Donofrio, and I am the Investor Relations Director here at IonQ. I'm pleased to be joined on today's call by Niccolo de Masi, IonQ's Chairman and Chief Executive Officer; and Inder Singh, IonQ's Chief Financial Officer and Chief Operating Officer.

By now, everyone should have access to the company's fourth quarter and full year 2025 earnings release issued this afternoon, which is available on the SEC's website and on the Investor Relations section of our website at investors.ionq.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 for 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 de Masi, Chairman and CEO of IonQ.

Thank you all for joining us on today's historic call. 2025 was a highly successful and transformational year for IonQ, both strategically and financially. Strategically, we expanded our business from leadership in quantum computing to become the world's leading Quantum platform solution and merchant supplier.

We are the first company in history capable of delivering integrated quantum solutions across computing, networking, sensing and security in all major and allied geographies. IonQ is the world's only full stacked quantum platform company, operating in all domains. This strategic expansion is powered by an unmatched intellectual engine, as we continue to attract the world's best and brightest quantum leaders as well as the leading Quantum IP portfolio. IonQ benefits from approximately 300 PhDs and 800 talented colleagues with advanced degrees, many of whom are household names in their fields.

Financially, we delivered a record year, not only for IonQ, but a historic 1 for the entire quantum industry. In the third quarter of 2025, we delivered nearly as much revenue as we did in all of 2024.

In the fourth quarter of 2025, we surpassed this by growing more than 50% quarter-over-quarter. After becoming the first public quantum company to achieve 8 figures of revenue in 2024, we grew to deliver substantially more revenue in the fourth quarter of 2025 than in the entire calendar year of 2024. Strong organic growth powered our full year 2025 revenue to be over 3x that of 2024.

Commensurately strong investor interest allowed us to fortify our balance sheet with the 2 largest capital raises from a single investor in quantum history. Quantum is indeed now and IonQ is confidently leading this revolution by every measure.

As most listeners know, late last month, we announced the largest acquisition agreement in quantum history and the first public to public planned Quantum transaction ever. Dry water is the leading quantum foundry in the world, commercially supporting not only IonQ, but also more than a dozen other Quantum and DOW programs. By leveraging Skywater's unique expertise and pioneering quantum semiconductor scaling within secure trusted environments, we will be positioned to accelerate manufacturability of IonQ's entire Quantum platform road map. However, our mission extends beyond IonQ to power the broader U.S. quantum industry and all our global allies.

We aim to ensure our nation's entire Quantum ecosystem moves forward with speed and security. In our joint IonQ SkyWater webinar last month, we laid out the fact that IonQ is already a leading merchant supplier to the broader quantum industry. Our precision atomic clocks power a number of quantum computing businesses and government contractors, and we already sell our Quantum networking solutions and sensors broadly.

Our modality-agnostic networking components are, in fact, designed to integrate diverse Quantum devices, ensuring seamless connectivity across the quantum industry. Once Sky water is part of the IonQ family, we will become the largest quantum merchant supplier in the world with Thomas Sanderman continuing to lead SkyWater.

Our focus is accelerating our nation's quantum industry, and we will continue investing to ensure the United States prevails in this geopolitical race. SkyWater has already created the compartmentalization, the protocols and the IP protections that will allow customers to continue to operate within our foundry model. We are kindred spirits with everyone supporting our nation and our allies in this quantum space race of our era. Our combined company will have the capacity and capital to grow not only U.S. quantum R&D initiatives across quantum computing, quantum networking, quantum sensing and quantum security but also to ensure the U.S. Quantum manufacturing scaling.

SkyWater helps us build an IonQ platform that customers especially government and other mission-driven buyers, can trust and plan around irrespective of geopolitics. Together, we intend to ensure the entire U.S. quantum industry will deliver, scale and do so onshore with trusted processes for the good of the nation.

Returning to 2025. It has been a year of tremendous accomplishments across our product families, both technically and commercially. In quantum computing, IonQ demonstrated the highest performance quantum Gates, entity system platform and by a wide margin. 99.99% Cuba gate fidelity means we can concentrate on system architecture and scaling in order to make smaller and cheaper systems even as they become more powerful. While other quantum computing companies are still working on perfecting their underlying Cubis and gate operations, ours are based on physics that was settled 25 years ago. Our Fidelity advantage translates into a powerful and enduring error correction advantage.

I want to highlight today that our quantum computers deliver the best time to solution on the market. For commercially relevant applications. Time to solution is how fast a customer running an algorithm gets to accurate answers that actually solve their problem. For example, when we look at a common quantum algorithm used for signal processing, search and factoring, IonQ is up to 1,000x faster than the leading superconducting system on reaching the solution.

We also see a massive speed advantage in signal processing and optimization tasks with up to a 10,000x faster solution on IonQ systems compared to superconducting. We aren't just doing theoretical work. We are solving real-world problems at a speed that creates commercial utility. This is how IonQ is delivering in today's competitive landscape, and we're just getting started. Our near-term road map builds to 1,600 fault-tolerant logical cubics a year before our competitors even get to 200.

We believe we will continue to outpace competitors on commercial utility. To an accelerating extent as we unlock our application road map announced last fall. First of all, we deliver these advantages at a far more accessible cost for both commercial and government customers. At our Analyst Day in September, we shared third-party validated estimates of IonQ's full-scale system cost, which is 2 orders of magnitude below superconducting competitors.

As students of history, we all know that the best economics occasionally beat the best technology, but best economics and best technology is what makes markets and builds an irresistible ecosystem. This is what IonQ is poised and focused on delivering.

In Q4 2026, we are targeting to demonstrate an operational 256 qubits system, which will be our sixth generation machine in the market. With our world-leading 2 qubits gate fidelity, we expect to unlock substantial value for our customers and explore world-changing applications this year. Last year, we worked closely with dozens of customers around the world. who use our quantum computers to run complex applications.

A prime example is our continuing work with Ansys and Synopsys as we pursue a mutual goal of commercializing quantum in the engineering space. To paraphrase the CEO of Synopsys on my Quantum panel at the World Economic Forum in Davos last month. The key driver of innovation is complexity. Customers do not adopt new technology because they're curious, but because they need to solve a problem in a more affordable way. We help customers around the world do just that. running applications from pharmaceuticals and automotive to chemistry and AI with the fastest, most energy-efficient and cost-effective approach.

In quantum networking, among numerous deployments, we partnered with the U.S. Air Force Research Lab to achieve the first Cuba to photon frequency conversion and a field deployable system. This ensures real-world Quantum networks on existing standard fiber optic commercial infrastructure. We also won the contracts to deliver multiple international quantum networks. -- including the world's first citywide dedicated quantum network in Geneva, Switzerland. Slovakia's first national Quantum Communication Network and 1 of Europe's largest operational QKD networks to date in Romania. In Quantum Sensing, our atomic clocks and inertial sensors are the highest performing fielded devices for their form factors. Our quantum sensors already operates in domains from under the ocean to up in the air. This technology leadership is translating directly into high-value defense partnerships. -- including U.S. Navy contracts for miniature ultra-stable atomic clocks and U.S. Army contracts to provide resilient timing systems for GPS-denied environments.

Our clocks are the highest performing in the marketplace, and they are shrinking in size. Most recently, in partnership with DARPA, we successfully reduced our clock size by 6x, while maintaining similar performance a breakthrough that paves the way for integration into satellite payloads.

Together, IonQ's market-leading quantum sensing technologies complement our quantum computing and quantum networking infrastructure to position IonQ as the partner of choice for the mission-critical needs of defense, aerospace and sovereign nation customers. We bolstered our IonQ federal team with the appointment of Katie Arrington as our CIO, until recently the acting CIO of the Department of War and adding John Raymond to our Board, the first Chief of Space Operations the United States Space Force. Rick Miller joined last year also having until then been the Director of IARPA. Being a costic joining to run communications and government relations, having previously held the same role at Lockheed Martin. The collective expertise of these leaders uniquely positions IonQ to navigate the complexities of the federal landscape and win large-scale mission-critical federal contracts.

Geographically, we deepened momentum in South Korea through our QKD National Security Accreditation and Christi system sale win, where IonQ is now anchoring the country's largest quantum classical compute platform.

We also expanded our agreement with Quantum Basel in Switzerland to over $60 million, spanning 4 years and 4 generations of IonQ systems. In the EU, we struck a partnership with leading autonomous vehicle company in right of Sweden and incorporated IonQ Italy under the leadership of Dr. Marco Pastora, the former Head of Quantum at JPMorgan.

In Canada and Sweden, we struck a partnership with CCRM, to accelerate the development of advanced therapeutics, reinforcing the transformative impact of Quantum in the pharmaceutical sector and building on the proven results of our work with AstraZeneca last year.

[indiscernible] joined us to lead our global commercial efforts, having previously led the AI team at Dell. Chad Saka joined us to run field engineering and presales following his distinguished career doing the same at EMC and Dell. Under their leadership, our expanded commercial team is positioned to accelerate our global go-to-market strategy, delivering our full stack Quantum solutions to meet the evolving needs of our global enterprise customers.

Moving now on to 2026. As our team knows, we have 3 key objectives. First, to drive superior financial performance by leveraging our scale and our complete platform to further accelerate our commercial execution. Our strategic evolution into the world's only full stack Quantum platform company, positions us with continued momentum to achieve $235 million in revenue in 2026 at our current guidance midpoint.

Second, to answer the key strategic questions that unlock exponential value in our product families and across our global Quantum platform. DARPA qubits Phase I and the next-generation GPS that is orders of magnitude more accurate are examples of our ambitions here. Third, to hone our internal operating system for efficiency, speed and talent density as we scale. We continue to make smart, disciplined organic investments to move technical progress earlier in all our product families.

We will also continue to consider value-enhancing acquisitions to further deepen our product and service offerings and accelerate our long-term path to profitability. You will hear us talk more about both time to solution and cost to solution. areas where IonQ has and will always excel. And we will unlock utility for Fortune 500 companies, U.S. and allied governments alike.

Our [indiscernible] is to positively impact all aspects of Applied Science by pioneering and globally commercializing the world's Quantum solutions. 2026, I believe, begins the era of truly showing IonQ's Quantum platform in action, and all it forms in domains, Quantum applications, quantum computers, quantum networks, quantum security and quantum sensors, IonQ is one platform, one team, primed and poised to win.

As we advance our strategy and deliver on our objectives, we are confident we will drive significant value creation for shareholders. As I conclude, allow me to thank my colleagues for their tremendous efforts in 2025 on the entire U.S. quantum industry for their trust. We are here to speed up all of our nation's quantum initiatives and players using our merchant supplier capabilities. IonQ is here to support all initiatives at the White House, DOW, DOC, DOE and Capitol Hill Advance to ensure our country allies benefit from U.S. quantum leadership in the 21st century.

We look forward to 2026 and beyond with confidence as IonQ's technical road map is delivered across all product families and our operating momentum continues to build.

I am delighted now to hand you over to Inder Singh, IonQ's CFO and COO.

Thank you very much, Niccolo. It really has been an amazing IonQ. I'm extremely pleased that 2025 has been such a transformative and record-setting year for us from virtually every lens that I can see from record-setting financial results to exceptionally strong commercial sales globally, to unmatched technology breakthroughs like the [indiscernible] fidelity you mentioned. It was the year in which we transformed the company from a single product quantum computing company in 2024 and to a full stack quantum platform company, able to deliver not as quantum computing. But as you said, quantum networking, quantum security, quantum sensing, Intermex laser-based communications, the world's most precise P&T and on and on.

In short, from 1 amazing product to the world's most comprehensive quantum product portfolio. In the process, we also became the quanta industry merchant supplier. Yes, as Niccolo noted, we provide components to our preagreed companies in the Quantum space. And as you heard from Niccolo, we're not stopping there. We've announced our intent to acquire SkyWater technologies already recognized as the most secure fab in the United States.

With SkyWater, once it receives regulatory approval, we would have both surety of supply and security in our solutions with more than $3 billion of cash among our financial firepower, we intend to bring that surety and security in the most advanced and secure products to our customers around the world. Let me highlight our financial results, which helped really punctuate what you and I just talked about. IonQ ended 2025 with an exceptional fourth quarter, following a record-setting third quarter.

Fourth quarter revenues were $61.9 million, even exceeding our own expectations and growing 429% year-over-year. This brought our full year 2025 revenues to $130 million, comprising 202% year-on-year growth. These historically high results mean that IonQ has outperformed our revenue guidance once again, exceeding the midpoint by 55% for the fourth quarter and 20% for the full year.

Our full year revenues now exceed the Street expectations for 2025 revenues of the other pure-play quantum players combined. Let me take a moment to talk about some key drivers of what the performance we saw this quarter and this year. First, we saw tremendous demand from customers for our latest fifth-generation 100-cubic tempo system. In fourth quarter, we welcomed City of South Korea as a new customer of our fifth generation system. This sale highlights IonQ's distinct value and the ability for us to win even against competitors that may be larger than us or more entrenched or with bigger marketing dollars.

The value and the strength of our product clearly shine through. Customers are choosing to partner with IonQ because of our industry-leading tech road map today and the tech road map we have announced for the next 5 years as well. We also welcomed another new customer, CCRM, one of the world's leading advanced therapeutics accelerators, which plan to use IonQ's tempo cloud-based solution to do bioprocess optimization, disease modeling and the design and manufacturing of advanced therapy for many health conditions.

Yet another commercial success story is with Quantum Basel, which demonstrates our land and expand strategy, but also that we treat our customers as partners in a journey, combining theirs with ours. Quantum Basel, who already owns our prior fourth generation Forte quantum computer, agreed in the fourth quarter to purchase our fifth-generation Tempo computer, and also obtained access to our future sixth-generation computer, which is still in development, and this is a 256 qubits semiconductor-based computing device we expect to deliver in 2027. This multiyear relationship now is not expected to spend 7 years from the years we've been with them in the past and the 4 years that Niccolo mentioned with this new arrangement we have with them. It also demonstrates how 1 compute device can lead to the adoption of an entire road map.

Quantum Basel is a testament to how customer relationships turn into enduring partnerships. Beyond computing, we are seeing similar demand and adoption for our networking and post-quantum cybersecurity solutions. As you also heard from Niccolo, we saw quantum networking adoption in Geneva, in Slovakia. And in Romania, I MQs deploying 1 of the largest and most complex operationally post-quantum cybersecurity networks in Europe. These national partnerships represent significantly larger networks than in the past and are indicative of the growing adoption of our Quantum networking, and our Quantum security solutions.

Turning now to the mix of revenues we saw. For the full year 2025, over 60% of revenue came from commercial customers marking strong sales in the commercial sector and reflecting the customers some of the [indiscernible] before. And anecdotally, our international sales comprised more than 30% of revenue for the first time, reflecting how our Quantum platform solutions are now resonating worldwide.

Because of the breadth of Quantum products we are now delivering, our customers' list includes Singtel, SK Broadband, Solis, SERM, IIT was a very long list. Importantly, this broadening customer base presents us with a golden opportunity to cross-sell more things to more customers.

As we move ahead, we continue focusing on new customer opportunities around the world, including in places like Australia, Italy, Greece, India, Japan, Vietnam, Argentina and many others. Our new CRO and the sales team are taking a very methodical approach to identifying the most compelling opportunities and taking a disciplined pursuit and capture approach.

Importantly, our 2025 results included nearly 80% year-on-year organic growth, and I expect this to be even healthier in 2026.

We are very pleased to see solid organic growth, of course, even as we have broadened our product portfolio with our Quantum platform.

With my second successive quarter now in this role, we are continuing our focus on building strong backlog, plus developing a very targeted view of our pipeline in order to make sure that we continuously strengthen our visibility for our financial planning, and also that we match demand and supply.

As a demonstration of this focus in our 2025 10-K being filed today, we disclosed that our remaining performance obligations or RPO, which provides 1 metric to gauge visibility over several quarters, stood at $370 million at the end of 2025 compared to just $77 million at the end of 2024, which is almost a fivefold increase.

Turning now to EBITDA. We reported an adjusted EBITDA of negative $67.4 million for the quarter and negative $186.8 million for the year. I wanted to note that even this adjusted EBITDA is better than the full year adjusted EBITDA guidance that we had provided at the time of our third quarter earnings call.

The adjusted EBITDA reflects the fact that we are making investments. We are investing in our business and our key investment area, as you'd expect, continues to be R&D. R&D comprised $96.1 million in Q4 and for the year, it was $305.7 million. That's 123% annual increase. We will continue to invest in R&D as this helps maintain the technological advantage that we deliver for our customers and also creates new IP to extend the value for our customers in the future.

We are doubling down on investments in our computing platform, which is already leading the market by multiple years, by both investing in our fifth generation tempo deployments, which are in progress this year, which are already beginning really the build-out of our sixth generation 256 qubits computing platform, as Niccolo mentioned, and then we have our sights on our seventh generation system beyond that. Unlike other market players, we are also investing in building our own quantum application. In many cases, in partnership with our customers, and also on our own. We are focusing on applications with the highest potential impact with the intent to build once and sold many times. Just a few examples of high-impact applications we might build include Quantum high-frequency trading, energy grid optimization, life sciences acceleration and even the design of semiconductor chips in a more effective way. There are many others.

To sum it up, our investments in R&D are not just lab experiments. We are bringing quantum to life and delivering to our customers today.

Turning to net income. For the fourth quarter, we reported a positive $753.7 million of GAAP net income, which was mainly due to an approximately $950 million mark-to-market valuation of warrants as required by accounting conventions.

Needless to say, the mark-to-market impact warrants are noncash items, and valuations are more related to our stock price at any given point and do not represent the operating fundamentals of our business.

For the full year 2025, we reported a negative $510 million GAAP net income, which included warrants valuation impact of $66.7 million. Cash, cash equivalents and investments as of December 31, 2025, or $3.3 billion. The strength of our balance sheet provides us with what we consider unprecedented financial firepower to continue to invest in R&D, to build out even more new products, to invest in go-to-market resources and yes, to also acquire for critical new capabilities or to accelerate our roadmap.

IonQ is uniquely positioned with the resources, talent and differentiation, so we can focus on cementing our market leadership and delivering the world's most advanced motif technology in every sector. As for operational excellence, which is so critical for establishing the foundation of future success. This will be one of the top priorities for Niccolo and the leadership team in 2026. And as you said, and as we reported last quarter, we've already turned our focus through this very important area to prove for the future.

Deploying organizational clarity and accountability is 1 essential meridian. Manufacturing under a clear leadership, customer deployment under a single leader, sales under a single leader, supply chain under a single leader and application development order all of these things comprise the building blocks of what you need to be able to ensure that there's accountability and planning.

Last quarter, we mentioned we have established a dedicated M&A integration team. And I'm very pleased to report that since then, we have successfully integrated key functions like HR and finance and are making strong progress on IT consolidation under our new CIO.

In short, we have moved to rapidly integrate our acquisitions, increase our execution velocity and deliver on key priorities. I'm pleased to report that our IT cybersecurity teams are now unified under the leadership of our new CIO, that Niccolo mentioned, Katie Arrington, who recently joined the team from the Department of Waran our CSO who also brings years of experience with many agencies and also other companies, including through other agencies and report to Katie. Our goal is to create our product and a highly secure posture as possible.

Last quarter, we also spoke about IonQ's unique ability to now leverage the established semiconductor manufacturing process for our next-generation computer. In January of 2026, as Niccolo noted, we announced our intent to acquire Sky Water in order to strengthen our supply chain all the way through to manufacturing.

On the close of that transaction, which, of course, must go through a regulatory process, we would acquire SkyWater's trusted fab, U.S.-based Tier 1 foundry, enabling us to ensure we would have the availability, security and quality to scale our chip-based road map, bringing us both CMOS as well as advanced packaging capability.

This acquisition also builds on our already existing merchant supplier business model in which we currently serve other Quantum players today. As the pace setter of the quantum industry, we do see it as a key responsibility to also help ensure in the overall development of our ecosystem. Let me turn now to fiscal year 2026 guidance.

On the shoulders of the amazing 2025 numbers that we saw, we feel we have built a strong foundation for yet another year of strength in 2026. With that in mind, we are pleased to offer the following financial guidance for full year 2026 as well as for the first quarter.

For 2026, we are projecting revenues of between $225 million to $245 million for full year and $48 million to $51 million for the first quarter. Our projected revenue growth is anchored by a continued expansion of our customer base, both in terms of number of customers, number of offerings that we bring to the market. And as I mentioned earlier, our guidance today is based on visibility stemming from a healthy backlog and an attractive pipeline that we will work methodically to convert.

We are projecting adjusted EBITDA to be between negative $310 million and negative $330 million for the full year 2026. And as I discussed today, this range represents our continued investment in critical R&D to help drive the next generation of Quantum solutions across our portfolio.

It goes without saying that since we announced SkyWater transaction has not closed, our guidance metrics do not reflect SkyWater. We continue to operate as separate publicly traded companies until such time as approvals are in hand. As Niccolo mentioned at the beginning of his comments, IonQ has rapidly established itself with the world's most unique set of products and capabilities, and we are for sure not stopping there.

Compared to any other quantum pure play one might look at, our product suite is unmatched. Our talent density is exceptional. Our business is global. We are actively selling into commercial deployment, not just lab, and critically for the future of Quantum, we possess a merchant supplier business model that enables the entire quantum ecosystem to develop and succeed over time as we press. And yes, while we do now and then take a moment to celebrate our progress like today, and I must say it does feel good.

Tomorrow, the entire IonQ team will get up and continue to dash towards delivering the world's most advanced, innovative and complete quantum solutions for our customers. With that, operator, can you please open the call for Q&A.

[Operator Instructions] The first question comes from John McPeake with Rosenblat Securities.

Guys, can you hear me?

We can, yes.

Okay. Great. I think last time I was on mute, and I don't want to repeat that. So congratulations. -- on the numbers and guide. I just have a question about the Shield release that came out a couple of days ago. Now that you guys have a pretty broad portfolio of quantum assets, you talked in the release about the $151 billion opportunity. How should we think about what you might be able to address relative to that number?

We'd love to get all of it. No, I'm kidding, John. Of course. We are very pleased to be included among the players that might participate in that. We intend to ensure that we deliver based on what we've built on -- and you know that 1 of the things that we're trying to make sure we are very clear on, maybe do a better job of is explain how we're actually a solution company, we're a platform company. And I think some -- in some cases, we're still being compared against a single product company. And when you look at opportunities like Shield or, frankly, any other opportunity that we may be looking at and we are looking at others, too, you need a solution.

You need to integrate things together. It's not enough to have a quantum computer that may work 1 day. it's not enough to have a quantum computer that even works today. You need to be able to link things together. You need networking, you need to be able to bring the quantum of security up to industrial scale. You need to ensure that you're able to provide secured communication you need to be able to make sure that you're also deliver today, not promise something in 2029. So we're happy to be included in that, John. I mean, I thank you for your question. Yes, we'd love to have our unfair share of it. But I think that we will deliver on the things that we promised, and we think we can do things in a more effective and more complete way than many of the other players that I think we are looked at again. That said, we do these things with humility. We ensure that we have the engineering. We ensure that we have the software. We ensure that we have all the connections that are required. It's a solution sale, right, when you look at something like that, John.

Okay. Niccolo, do you want to add anything to that?

No, absolutely. Look, I mean, credit to the team for an outstanding year. We did a lot, obviously, in 2025. And as I said, we're just getting started. So we expect to continue momentum here, and it's not just momentum in each product family, but it's, of course, a under real points out between the product families where we really are inventing the future in multiple dimensions, right? And I think that's what's appreciated to a grand extent by our nation's Shield initiative, amongst many other appreciators at the moment.

The next question comes from Kevin Garrigan with Jefferies.

Congrats on the great results and reaching over $100 million in revenue. on Sky water, can you just update us on the status of the regulatory approval process? And over the last 30 days since you made the announcement, have there been any unexpected developments, either positive or negative that could impact the timing?

We're still looking at it in the same way that we talked about it last time, and I appreciate your question, and thanks for your comments. It's a regulatory process. It's well defined. It's not that we try to predict how we may go or not go. We think that the model that brings together a merchant player in Quantum platform, which is us any merchant provider of manufacturing services as Sky water is in the interest of the nation, the industry and all the players in it. And as I said, and Niccolo that. We were already a merchant supplier. We supply product components to others that you may call our competitors. We don't see them that way. We think that all players need to succeed, and that's what creates an ecosystem and an industry.

This industry needs the same. So we are the pacesetter, yes. We will remain the pacesetter, yes. There's a responsibility that comes with that, and we will live up to that.

Yes. Got it. Got it. Okay. That makes sense. And just a quick follow-up, continuing on the acquisition front. You guys had acquired seed integrations at the end of January. Can you just talk about how this company fits strategically within your portfolio and what gaps it fills?

Sure. So seed is a software classified mission control business, that really is quite unique. Because almost all of their work is classified, I'm not going to go into huge details for you. But you can assume that it is stitching together not just component solutions that we have at IonQ, but it's also helping 3 letter agencies and portions of our DOW do the same even before IonQ came along. So it is a unique opportunity for Quantum, not just in the hardware sense but also in the application sense to be part of what we're doing in programs like Shield for the prior question. as well as the rest of the broader Quantum platform of sensing security networking, which we have put together in every theater of operation from under the ocean to on top of the ocean to on land, in the air and up in the heavens. There's a lot going on for the battlefield the future and IonQ very much as well positioned to have, hopefully, our fair share and maybe even a bit more.

And just to add, I mean, the DevSecOps capability and software development that seed brings to us is actually relevant for all of -- and so we intend to take part in ensuring that seed is succeeding in everything they're signing up for directly externally, but also frankly, leveraging their unique capability to help us accelerate in device across the company as well.

The next question comes from Craig Ellis with B. Riley Securities.

Congratulations on the really strong results and the big ARPU number, $370 million is quite substantial. I wanted to follow up on the guidance for calendar 6 revenue at the midpoint $235 million. Can you help give us some color on some of the things that are driving revenues to that level, whether it be the international versus domestic mix of business or whether it be particular programs within your compute, networking or sensing capability. And then just a sense Inder, given the first quarter's guide on the linearity through the year, it would seem to be that there is implied growth, but any color would be helpful there.

Sure. Yes, thanks for the question. Look, I think not to provide a lot of color under test guidance itself, but you can expect that we will continue to globalize the company. So that's also in there. I mentioned a number of countries that was not by accident. I mean we are looking at some amazing opportunities. Frankly, demand is exceeding supply, I'm allowed to say. And we're trying to ramp up our resources to make sure that we can deliver the fifth generation machine to as many customers as wanted. We're already starting to see demand for our next-generation machine, the 256 and beyond that. So what gives us confidence, first of all just in general on the compute platform. is the road map that we put out there is resonating. The fact that we are taking our customers on the journey with us is working. The fact that we are forward deploying engineers and application developers with those customers invest this with them.

So we feel very comfortable that organic growth of our compute platform will be very strong in 2026, as I mentioned earlier, I wouldn't be surprised if it exceeds 100% growth year-on-year, but that's the direction of travel. The other parts of our portfolio are also performing. The need for and the sense urgency, frankly, to deploy post-quantum security is taking on a different level of importance. That didn't exist a year ago. In fact, we are agnostic as to the type of application that our customers want, whether it's PPC, QKD, what your acronyms off of the top, I won't go through all of that, you know that. We do not have religion around it. We deliver everything. We know that 2 to 3 years from now, you will need all of it.

Classical cybersecurity probably at some point doesn't work. So I think those that recognize that in some largest banks, largest governments, the countries I name, like cities we named, I think this is just the beginning. So underlying our assumption of guidance for the year also is that we will see healthy demand, which is what we're seeing for security solutions, networking solutions, and then sensing I think is at the very beginning of something very exciting. Niccolo talked about GPS interference and how you get around things like that. That is on the minds of virtually every country at this point, as you probably heard, right? And so to have the world's most precise P&T solution, most of our size atomic clock, the ability to deploy that in different modalities under the water and the sky, et cetera. That's the opportunity that we have ahead of us, which, of course, we have to execute on that, but the demand is there. And we intend to make sure that we deliver on elements of that for sure in '26, but that is a multiyear journey. So that's like years of potential opportunity for us.

And then lastly, I think I mentioned to you that commercial is becoming bigger. Like 3 years ago and 4 years ago, when Niccolo and I joined the Board of this company, it was mainly labs, right? Of course, it would be labs, research institutions, et cetera. That's where they would first be just want the quantum work. Now the quantum works, you're starting to see at least from our machines, people say, we want this one, we want the next 1 and the 1 after that. And so I think as long as we are also investing in applications, which is really key, Think about the iPhone with no apps. It wouldn't be as exciting, but the iPhone with the app is what we're trying to do in the quantum site.

That's the thing that I think resonates well. And I think that once you have that ecosystem going, and you built some of the applications yourself and you build others will, of course, build apps perhaps on top. But we'll focus on the most important thing. And again, we do have this sort of industry-neutral merchant philosophy. Our machines, our system can plug into NVIDIA system, Microsoft Cloud, the Google Cloud, et cetera.

We want to make sure that we become ubiquitous, and then we also drive the highest value things ourselves. So there's a bunch of things around confidence from customers now telling us, okay, I'm ready the one that you haven't built yet. I think I might win that one, too. We're not putting that in our guidance, obviously, you know that. But to have line of sight, that's kind of what we're looking at.

Yes. Sorry to jump in on you, Inder, but there was mentioned in the transcript of a 256 qubits system by year-end. What should we keep in mind with the notable engineering milestones from here to bring that to market?

Yes. Look, I think that you realize that a fourth and you know this. the 256 system and beyond that entire road map for the next 5 years that we've talked about is a semiconductor-based red band, is the ability to use mature node manufacturing, that exist today to build out and scale from 256 to 10-K and beyond. So we are in the process already -- and we said this when we announced the SkyWater transaction, we're already looking at them to be a supplier to us, even prior to the acquisition announcement and other foundries also. These existing foundries enable us to, with some confidence, drive the development of the '26 into the 10-K and beyond. As for the 256 itself, I'm happy to report that we've done the tape-outs of AB&C and as you know, from semiconductors, those are the most important ones in the beginning. And then the feature-rich future driver, fourth detains called is in progress. So not to give you an exact time line that you'll then say, you told me it's going to be March 31 or April 1 or whatever. We are very comfortable with the way the development of the 256 is going.

It is following the road map that other semiconductor development follows. And then beyond that, it's entailing, it's since scaling. And we also have the engineering teams already beginning to think about the 10-K, not just the 256. Does that help?

The next question comes from Vijay Rakesh with Mizuho.

Niccolo and the pretty impressive guide and growth for the year. Just a couple of questions. Just wondering, as you look at the fiscal '26 number here, any way to think about and the forward quarter, I guess any way to think about the hardware software split?

I mean we will provide, obviously, when we report the usual breakout that we do, which is kind of along the lines of what you just ride I think it is less as hardware software. I think -- remember what I said, like harder without the software doesn't do much and vice versa. So solution thinking is really what's important. We're trying to think of our business as the only company, frankly, that can deliver entire solutions. The compute, the ability to connect 1 compute device to another, the ability to connect 1 city to another, the ability to connect ground space and back to ground again, the ability to provide security across those links, the ability to use Sky Looms OCT terminals to provide secure, high-speed transport for data and secure transport and on and on and on.

I remember Cisco, and you'll remember Cisco as well. And I think of other companies that have done this in the past that have not asked for permission. So when Niccolo became CEO exactly 1 year ago, by the way, I think is anniversary is tomorrow. In one short year, we've gone from being a 1 product company to a platform company. We now have to execute and with responsibility, deliver for our customers what they are now wanting from us.

They're saying, "We will buy your road map, we will buy your solution. You're bringing the secure solutions together. So it's a unique opportunity for us to actually just go and execute, and that's why this is the year of execution. And yes, also continuing to innovate. So watch the space. More intent, more things. We're not stopping.

Yes. Very impressive. And just 1 other question. And obviously, you're growing your team pretty nicely here. Any thoughts on when this national quantum initiative and QI funding starts to open up. I know you have some pretty solid engagements with the Golden Dome field, et cetera. But any thoughts on when that national QI funding starts to open up for the space?

Yes. I mean, thanks for the question. Look, I think that 3 years ago, probably that would have been top of mind for us. Like when does the funding unlock. But with more than $3 billion of cash available to us today and the ability to raise more if we need in the future, the ability to invest ourselves organically to be candid. I think other companies might be looking for funding to unlock we're looking for the ability to drive customer value today without the need for like additional funding. I'll let Niccolo add to my comments here, but -- it is -- it's an opportunity, obviously, for the whole industry to benefit if more and more countries focus on quantum in general.

I'm starting to see a Niccolo as tip of the sphere on this for us. But like virtually every government in any country in the world is now including Quantum, very close to whenever they say AI. Maybe not as many times as the AI, but almost. So quantum is rising in relevance because it is becoming more real. We are making it more real. And we're making sure that we are -- we have the capital we need, we have the financial firepower that we needed to keep investing. For the foreseeable future and beyond. And we're fortunate to have investors that are saying to us, they're our partners in that journey.

Our job is to execute on that opportunity. And so yes, I mean, I think that funding things were important. I think for now, it's more about taking the engineering building one, selling many times. So we're now getting into the very sort of commercial deployment of everything quantum. less worried about what funding comes when Yes. I mean, look, we, of course, value our government customers. We value them from all of our allies, and we're growing our IonQ federal team to capture that. But I think Inder said well in his prepared remarks as well as our press release today, our customers are commercial -- that's the primary reason why we're not waiting with bated breath on government unlocks, if you will. That having been said, I do want to point out that we have a very bullish administration in the U.S. vis-a-vis growth in the budget of the Department of War.

And within that, there's a considerable allocation to building the future of all things quantum sensing, networking computing in every war-fighting domain. And so IonQ uniquely operates in all of the war-fighting domains. And we're uniquely able to sell those complete solutions that we believe the nation and all friendly nations absolutely must need.

So watch this space, but we are growing headcount aggressively because we are growing the business aggressively along all of these vectors.

The next question comes from Quinn Bolton with Needham.

This is Shadi Mitwalli. As a question on strong results. In the prepared remarks, you guys talked about making smaller and cheaper quantum systems. I believe the acquisition of Sky water is going to help accelerate that. But just curious to hear the puts and takes of how much it cost to make a system today and how you expect that cost trajectory to evolve over the next few years?

All right. So I mean, look, what we said at our Analyst Day on September 12, is that our full full-tolerant machine machines with hundreds of thousands to millions of physical qubits and thousands to tens of thousands of logical qubits and someday, hundreds of thousands of large qubits. We'll have a 2025 BOM cost, bill of materials cost under $30 million. Obviously, there is inflation each year. And the reality is, what we said under $30 million, was materially under $30 million to enable us to ensure that gross margin will be compelling as the years roll by, and of course, our ability to drive ecosystem expansion will be the most powerful, we believe, in the quantum world, whether that's in the U.S. or our allies.

We are -- look, we are cheering for everyone with the Sky water acquisition, right? So it's really important to note that we already supply our clocks and sensors and QKD switches to a wide breadth of customers. With Sky water, we are not only going to be supporting their existing customers but we're going to be investing in Sky water, which means that with our improved capital base on a combined basis, those customers will see tremendous benefits. And we expect additional customers in the fullness of time to want to be on that acceleration platform.

The ability for us to maintain costs as we grow our computer power is almost unparalleled. And the reason for that is the electronic cube controls that we have of our [indiscernible] on a semiconductor basis and platform. So as we add more cubes, we're not really changing the cost of goods sold much. A little bit, the ships get a little bit bigger, and the machines got marginally larger, but it's single-digit percent kind of thing, not even double-digit percent, I think, in most instances, and that means with manufacturing volumes, as I said in my prepared remarks, we actually expect the size and the cost of build material perspective to actually go down over time, even as the machine goes from 256 qubits to 100,000 and 1 million and 2 million qubits by 2030.

That is obviously a cost curve that everyone is familiar with in the semiconductor industry. And we believe it's vital because it's what enables our ecosystem to prevail in the commercial market at the same time is prevailing, of course, with our nation and Allied Nations federal customers. In the history of technology, as I said, sometimes you get cases where just economics alone prevail. But in our case, we have the most powerful machines soonest. And we have them at the lowest most accessible unit economics. And so when you're doing something in a number of cases that were -- they're 5 years ahead, technically, and you might be 10 or even 100x cheaper, you can see why we are bullish on our ability to be the mass market platform of choice in the fullness of time for.

The next question comes from David Williams with Benchmark.

And let me also add my congratulations on the really solid results here. So I guess, maybe firstly, thinking about your capacity. And Inder, you talked earlier about the demand outstripping your ability to supply. If you kind of think about what your capacity is today, maybe on the tempo solution, what would that look like if you could ship everything that you could build in maybe '26 from a unit perspective?

Yes. I mean, look, we are raising our ability to meet the demand to make sure that we satisfy what the customers are looking for, of course, and we will do that. And it's not always about manufacturing. Of course, as you know, it's also about having the deployment engineers. The people that go on site, prepare the location, deploy a machine, turn it on show the customer, et cetera, and then stay with the customer practice. So we've been investing in all of those. And over the last 6 months, we've invested in, I would say, all of that. As far as like when you go from Tempo in 2026, to the 256 in 2027. The chip road map allows us to then begin leveraging that semiconductor base, which is, frankly, available, fully depreciated, low cost, not so capital-intensive.

So to the cost question earlier also, you can benefit over time from bringing costs down by leveraging that. So we don't have to necessarily build our own factory. But the tempo in prior generations, we manufacture them in our factory in TL. So we think we have enough capacity right now to be able to meet demand. I did say the demand is exceeding supply is, yes, it's true. We might have to be somewhat selective. That's a good problem to have. And so if that continues, we absolutely will surge our ability to deploy, build and ensure that we service the tempo.

But importantly, the question to be asking is, once you have the chip based system out there. Now we have with -- well, SkyWater closing, of course, or even the commercial relationship we already have with SkyWater, the ability to leverage their highly secure in U.S. trust and fat. The ability to make computing solutions that we can sell to national security customers, we can sell to the most discriminating bank in the world. We can sell them to any customer that says, "Yes, I know the power of quantum. It is both amazingly powerful in a good way, and it could do some really dangerous things too, much as AI can". So we are making sure that we deploy it in a way where it has the level of surety of supply to us so that no geopolitics enters into the ability for us to get components and then have a product that our customers can trust.

So I think that it's less about capacity in terms of manufacturing this time next year. But for this year, absolutely. We began investing in the third quarter. We talked about the third quarter call, and we've hired the deployment engineers and we feel pretty good actually right now.

Yes. And I'll just add, obviously, that all of those secure trusted fab capabilities and manufacturing scale we are providing to the entire U.S. industry and all of our allies. So we look forward to working with everyone because I think it's time to put the pedal to metal for the industry.

Yes. Great color. Just 1 last quick 1 for me. Just as you kind of think about that fab and the capabilities there today and then looking out beyond '27 maybe, are there major step function potential investments that need to be made in order to hit that road map? Or are things you feel like they have the appropriate maybe abilities today that the investment isn't as big a heavy lift as it might otherwise be?

Well, look, I think that I won't speak for SkyWater they're independent company, obviously, right? So from our land, when we look at the capacities that they have in Texas, in Florida and in Minnesota, it's more than what we need actually right now. So I don't see that other than sort of like maybe some tooling and things like that. I don't see where we need to necessarily build the fab capacity as much as ensure that it has the type of, I'll call it, sort of quantum ready ability to be in a clean room environment, right? So they have clean rooms everywhere, but quantum is like 1 level higher than the clean room. That's the investment. So it's not like move-out on many, many dollars. It's more like ensuring that we provide them what they need, of course, but they have the engineering talent. They have the people that are experienced, they have the ability to do advanced packaging, which is really important. It's not just fab is packaging. So we are looking forward to the deal closing, and we're looking forward to leveraging them of course. And in the meanwhile, we have a commercial relationship, and we hope that we're able to continue providing for the needs of '26 and beyond.

Yes. So I think just to add on to that, there is plenty of capacity at Sky water today for the whole U.S. corn industry as the U.S. and Allied Quantity grows, we are confident we will meet that demand at Sky water. The tooling absolutely is bespoke for program and per customer, but it's typically actually part of the commercial relationship, speaking from experience that's usually part of the total conversation you'll have on a multiyear basis. And so that won't that won't come off of IonQ's balance sheet so much as to be part of each customer's commercial agreement. I think the last thing I'll add is probably the biggest investment we're making in the next few years in SkyWater is we are we're obviously assuming some debt which we're going to be paying off on transaction close. And I think that will be the largest chunk of a believer or not. The rest of it, I think, will be growing with the operations in a fairly modest way.

And their CapEx to revenue, as you probably saw, is like low single digits. They're not very capital-intensive, neither are we. So I don't think that model changes much candidly, might be a surgery or there, but I don't think it's a big shift.

And due to time constraints, the last question will be Troy Jensen with Cantor.

Congrats on the great results. Maybe just a quick one for Niccolo. I get the partnership for applications and software. But what's your thoughts on IonQ controlling the controller specifically? And can you touch on your investment in horizon?

So look, we like to think about our cost in the following way. We are the -- an open interoperable stack, but we're students of history, and we want to make sure that we capture value from the hardware to the compiler to the application layer. It's been well known since our IPO that we've been public on the Google, Amazon, Microsoft clouds. And we want to interoperate with everyone because I think it's in the nation's interest, and of course, IonQ shareholder interest to have everyone learn on the IonQ systems and sensing and networking hardware. And of course, flourish and build on top of that, right? So we like to work with software partners. We like to work with the so-called hyperscaler partners. We work, of course, with everyone from NVIDIA through to ANSYS that those computational engineering is a leader of that in classical and the same in the pharmaceutical space. And so we see this all really as an end, right?

We want as much more ease as possible to be interoperable with everyone. And to that extent, we will partner consistently both across our stack and up and down our stack. But we're not handing the keys over to someone else, nor are we trying to be a vertical play where you have to use all of our stuff or none of it works with our stuff, which we think is a limiting approach to life. And there are companies that attempts that, but I think history shows that you want to be open with the right posture and be clear on what you need to maintain control of to make sure that not just your ecosystem works well, but also that it works well and that you continue to be able to accrete long-term value at a pace that grows faster than your cost, of course.

This concludes our question-and-answer session. I would like to turn the conference back over to Niccolo de Masi, Chairman and CEO, for closing remarks.

Thank you. In closing 2025, I am confident the year will be remembered as the year IonQ moved beyond the laboratory and into the bedrock of global infrastructure. We didn't just meet our goals, we redefine the ceiling for the entire industry. becoming the first public quantum company to cross the $100 million revenue threshold, while tripling our revenue scale year-on-year. And we did this while demonstrating unprecedented technical excellence, demonstrating 99.99% to Cuba Gate fidelity and becoming the first company in history to can proudly say that all of our key technical milestones have been achieved on the path to fall tolerant quantum computers.

We are no longer just building quantum computers, however. We are supplying the high-precision atomic clocks Secure Quantum Networks and advanced Quantum cybersecurity, hardware and software that will serve as a nervous system for the next era of computing, modeling and sovereign security. And by acquiring SkyWater, we will effectively onshore the future of quantum manufacturing, transforming IonQ into the quantum Industries merchant supplier for the U.S. and our allies and this important geopolitical race.

We enter 2026 with a fortified balance sheet and an unmatched intellectual engine of approximately 1,500 professionals, having continued growing strongly even beyond our reported end of year total.

Our focus remains clear: to lead the geopolitical space race of quantum for our generation by delivering a unified all-domain Quantum platform and to help customers solve the world's most complex problems. The era of quantum utility is not on the horizon. It is here and IonQ is the one team, one platform primed and poised to win. Thank you for your continued trust in our journey, and we'll see you next time.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good morning, everyone. Welcome to today's conference call to discuss IonQ's transaction with SkyWater Technology. Presenters on today's call include Niccolo de Masi, Chairman and CEO of IonQ; and Thomas Sonderman, CEO of SkyWater. Also on today's call is Hanley Donofrio, Head of Investor Relations at IonQ.

As a reminder, this call is being recorded, and a press release and slide presentation regarding today's news are available on the Investor Relations section of each companies' website.

I would now like to hand the conference over to Niccolo de Masi, Chairman and CEO of IonQ. Please go ahead.

Thank you, and welcome to the call. I'm excited to be here today to talk about this transformational transaction. Following our presentation, we will answer some questions that have been submitted in advance. Today, we'll be discussing the rationale and benefits of this truly historic transaction. We will address forward-looking financial matters as we get closer to approvals and closing.

To begin with, I do want to highlight that IonQ expects to deliver revenue results at the high end or above the range of our previously announced full year guidance. More to come when we announce earnings. Today, our focus is the SkyWater transaction, which we believe will accelerate fault-tolerant quantum computing and further cement IonQ as the leading provider of this critical technology.

Page 2. You can read the content of our forward-looking statements. They are also available on our website, where this presentation has been posted.

Turning now to Slide 3. I am joined today by Thomas Sonderman, CEO of SkyWater Technology. For those of you who are new to IonQ, we are the world's leading quantum platform company. IonQ delivers solutions for quantum computing, quantum networking, quantum sensing and quantum security, which makes us the only full stack quantum platform company in the world. We work each day to advance our technology to solve the world's most complex problems for global customers, all powered by our highly talented engineering team.

We're excited about becoming vertically integrated with SkyWater, bringing end-to-end innovation, engineering, manufacturing and deployment of our quantum solutions. This is the beginning of an exciting new chapter as we continue to deliver for our customers while unlocking long-term shareholder value.

I'll turn it over to Thomas to introduce himself and SkyWater.

Thanks, Niccolo. Great to be here with you today. As mentioned, I'm Thomas Sonderman, CEO at SkyWater Technology. SkyWater is the largest U.S.-based pure-play semiconductor foundry. A Category 1A trusted foundry with DMEA accreditation, we specialize in foundational nodes and advanced packaging to support the nation's critical infrastructure and emerging quantum technologies.

Joining forces with IonQ will accelerate multiple engineering pathways for next-generation quantum chips, and I'm excited to be here today to discuss this transformational transaction that marks a pivotal moment in SkyWater's evolution.

I'll hand it back over to Niccolo to talk more about the transaction.

All right. Moving to Slide 4. As I mentioned, acquiring SkyWater will create a fully vertically integrated U.S.-based quantum platform. It will accelerate innovation and ensure we have the secure manufacturing capacity that will be required by our customers. SkyWater's world-class onshore engineering and manufacturing strengths will enhance U.S. security and competitiveness while creating long-term shareholder value.

The transaction is valued at $1.8 billion, a mix of cash and stock consideration subject to a collar and cap. SkyWater will operate as a wholly owned subsidiary, meaning that in addition to integrating with IonQ, SkyWater will continue to work as a merchant supplier to the industry, ensuring they continue to deliver for both new and existing customers. Thomas will tell you more about that later.

To answer the question why this transaction, we have to look at where IonQ is today. Our business has evolved quickly from just quantum computing to today's full stack platform of quantum computing, quantum networking, quantum sensing and quantum security. We are now at the stage where we have line of sight to scaling to millions of qubits based on a semiconductor architecture and electronics qubit control, which means achieving those goals is primarily a matter of semiconductor engineering.

As the reality of a quantum world sets in, these technologies are increasingly viewed as critical strategic infrastructure to commercial enterprises and nation states. This means for the next leg of growth, there's need for not only rapid innovation, but doing so at the highest levels of security. SkyWater is a unique company built exactly around these principles, rapid innovation and production with the highest level of securities.

SkyWater brings IonQ highly specialized technology-driven foundry capacity that meets the needs of quantum more than any other fab out there. It brings us the ability to do advanced semiconductor development through rapid iteration, experimentation and parallelization. And SkyWater brings onshore accredited semiconductor fabrication and packaging facilities that meet the highest security requirements of customers like the U.S. government, our allies and partners.

I've said many times before and I'll say it again today. The future of quantum is now, and this deal brings it into focus. As the only vertically integrated full stack quantum platform company, we expect to significantly advance our strategic initiatives and support our partners worldwide. I'll dive into the points you see on the screen in just a moment. But the main takeaway is that with SkyWater, we'll be able to accelerate our fault-tolerant quantum computing road map and solidify our position at the forefront of commercial quantum advantage with practical, scalable quantum solutions and applications.

To make this happen, we'll be bringing together our two incredibly talented teams and leveraging our shared capabilities. I'll hand it over to Thomas to share his perspective now.

Thanks, Niccolo. This is a transformational transaction for our industry that will benefit our teams and customers, both companies' shareholders and our other stakeholders. Under IonQ, SkyWater will build on its standing as the largest exclusively U.S.-based quantum native foundry. What I want to emphasize is how we fit into IonQ and why this is a match.

SkyWater isn't just a foundry. What differentiates us is our Technology as a Service operating model. It supports volume production and high mix, advanced technologies as well as foundational node wafer manufacturing, emerging technology co-innovation and advanced packaging. In addition, this model enables massive parallel development, enriching learning and compounding innovation across chip generations.

We expect to apply this distinctive model to IonQ's leading quantum technologies and deliver heightened speed, precision and scale for next-generation quantum chips. By embedding IonQ's engineering with SkyWater's leading capabilities in parallel innovation and manufacturing, we can achieve greater learning per design, build and test cycle and be the leader of quantum advantage in the U.S.

Our DOW trusted accreditation also brings immense strategic relevance to IonQ's federal business, and we look forward to continuing to support national security matters in an even larger and more impactful way.

I'd like to highlight that this transaction is incredibly beneficial to our shareholders. Longer term, the combined company has the potential to unlock broader synergies across multiple product categories requiring both custom and commodity semiconductors. Given the equity consideration, shareholders will have the opportunity to participate in the combined company's upside potential through ownership of IonQ shares.

And last but certainly not least is the why IonQ story. This transaction delivers all these benefits while also allowing us to continue meeting and exceeding the needs of our existing customers. As Niccolo noted before, with IonQ, SkyWater remains fully committed to all of our semiconductor foundry customers and will continue as the quantum merchant supplier of choice as a wholly owned subsidiary with open access. We have a broad customer base across aerospace and defense, auto and quantum. Foundry integrity will remain the same. There will be no changes to customer access or IP protections.

So to sum up, SkyWater and IonQ together will drive the ability to deploy quantum technology for mission-critical applications in business, government and society. I'd like to thank the talented teams at both SkyWater and IonQ for all they have done to get us here. What we have done separately is incredible and what we will do together is even more powerful.

I'll turn the call back over to Niccolo.

Thank you, Thomas. Turning now to Slide 8 and how SkyWater fits into IonQ. What's truly unique about IonQ is that we're the only quantum company that has already achieved our target fidelity. This means there is no more resource breakthroughs required to scale up to fault tolerance. It's just engineering and, in our case, it's semiconductor engineering.

Our path to scale runs cleanly through semiconductor engineering, which is a result of our electronic qubit control technology. Because our path to scale is based primarily on semiconductor engineering, IonQ is at the stage where embedded access to a trusted foundry is necessary to continue on our rapid path forward. Bringing SkyWater closer will accelerate our already industry-leading road map. We will unlock increased wafer runs, meaning faster iteration cycles. We can also start running multiple generational prototypes in parallel, applying new learnings immediately to improve future milestones.

As a result of this, we expect to see a very significant reduction in total cycle times from design to production. For example, we will reduce the time from design completion to first samples on our 256 qubit chip from 9 months to 2 months. And more importantly, we will now be able to functionally test the first 200,000 qubit chip samples in 2028, which enable 8,000 ultra-high fidelity logical qubits and pull forward our previously communicated timelines. With this transformational acquisition, IonQ will be able to increase both the frequency and velocity of its R&D wafer spins in parallel.

On Slide 10, you can see our existing public road map. Starting with our 200,000 qubit chip, you can see the materially positive impact we expect SkyWater to have in our timelines. We now expect to have the first 200,000 qubit chips back from the fab in 2028. This means we can start running real functional tests and producing data of real performance. At this point, there will be little doubt left that full fault-tolerant computing is here and that IonQ leads the pack both in time and cost. This transaction will also enable us to pull forward our 2 million qubit chip by up to a year.

One of the key components of this combination is the full integration of the quantum life cycle. We've spoken before about how our architecture enables lower cost per unit. With SkyWater, we expect to have industry-leading costs at scale. We will continue to lead the market not only in terms of performance but also in price. History shows how computing battles are won along vectors of miniaturization and cost per unit output. We will now also have the full product life cycle under one roof from design and prototype, manufacture and package to deployment and service updates.

There are many examples across the industry of such vertical integration leading to a sustained advantage in innovation and economics. Tesla is perhaps the most powerful example of this over the past decade.

With facilities entirely within the U.S., the combined company will be an end-to-end U.S. supplier of mission-critical quantum infrastructure. SkyWater adds the final piece, semiconductors, to IonQ's existing U.S.-based manufacturing. We believe we will be the only completely U.S.-owned and U.S.-operated provider of these quantum technologies so critical to our nation's future. Each phase of the manufacturing process is represented by the combined company facilities in Maryland, Washington State, Minnesota, Florida, Texas and Colorado.

We believe deeply in the future of U.S. critical infrastructure and sovereign supply chains. The combined company will support current and future critical initiatives of the U.S., our allies and partners. We have a world-class team of experts and are excited to add Thomas and his team to IonQ. All of this bolsters the initiatives we began when we introduced IonQ Federal last year, and we expect IonQ will be positioned as a central quantum computing, quantum networking, quantum security and quantum sensing provider for the U.S. government, our allies and partners.

On Page 14, you can see this transaction builds on those we've done to date. Over the last few years, we have deliberately and strategically added capabilities to our platform. Our acquisition of SkyWater gives IonQ true vertical integration across quantum computing, quantum networking, quantum security and quantum sensing technologies for land, sea, air and space. We are confident that uniting our revolutionary quantum platform with SkyWater's leading capabilities, particularly in parallel innovation, engineering and manufacturing, will accelerate America's ability to deploy quantum technologies where they're needed most, keeping our focus on advancing the frontiers of quantum technology for business, government and society while creating enduring value for our shareholders.

So on Page 15, to sum up for today. Our goal remains to serve the market as the preeminent global quantum platform leader, supported by our integrated product lifestyle and end-to-end design, manufacturing and delivery of secure quantum solutions. As we look ahead, we remain focused on revenue growth and capturing additional market share, which we are confident will drive our margin expansion over the long term. Together, we truly will be the winning quantum platform.

We'll now take some time to answer the questions you've submitted.

Great. Thank you, Niccolo, and thank you to everyone who has submitted questions today. As a reminder, we can only answer strategic and nonfinancial questions on this call. We look forward to sharing our financial results at our upcoming full year 2025 earnings call.

The first question comes from Troy Jensen at Cantor Fitzgerald. Niccolo, can you explain how this acquisition accelerates your product development road map by an entire year?

Absolutely. So let's have a look at Slide 9. We talked through this during our prepared remarks. But fundamentally, we are at the stage whereby the more we can do in parallel across our product life cycles and generations, the faster we can move forward that innovation. And so we talked about reducing cycle time on our 256 qubit chip, for example, from 9 months to 2 months. The same thing will philosophically occur for every life cycle product beyond the 256 chip, the 10,000 chip, the 100,000, the 200,000, the 1 million and the 2 million.

And so when I talked about greater velocity and greater frequency of wafer spins, what we're talking about is doing more in parallel with more lines and getting through each exploration of engineering pathway faster. And so we're able to explore more in parallel and actually make sure that the cycle of each exploration is faster. As a result, you can see quite powerfully on Page 10 that we can bring in innovation more actually the further out that it was on our initial road map.

So initially, we assumed last year when we rolled out this road map that we would be merely a commercial partner of industry-leading fabs such as SkyWater. With this tight integration we're able to move faster, which benefits what we're doing in '27, '28, '29 and '30 even more than what we can achieve in '26. Thomas, please feel free to chime in if you'd like to add anything from your perspective.

No. You did well. Thank you.

Thank you. We have a follow-up question from Troy for Thomas. Can you update us on SkyWater's vertical exposure? Do you have any 10% customers or customer concentration?

So Infineon Technologies is our largest customer, and that resulted from the transaction we did last year, acquiring their fab in Austin, Texas. They will continue to be a critical customer for SkyWater going forward as we operate as a full-service foundry. So other than that, we are pretty much operating our normal foundry business with many customers, and again, Infineon being the largest of those customers.

Thank you. We have a question from John McPeake of Rosenblatt. What parts can be made by SkyWater for the IonQ quantum computer machine? Will that be just the foundry or packaging? Can you elaborate on that?

Yes. It will be everything -- well, let's both tackle this one, Thomas. And we covered, I think, on a number of our slides what we're doing. But it's absolutely not just accelerating design work for us and implementation. But as we mentioned, it's packaging, it's manufacturing and it's really the speed up of, I'd say, the translation from prototype into mass manufacturing throughout our whole road map. But, Thomas, please do provide some details from your perspective.

Yes. I mean one of the benefits of SkyWater's model is that we embed developments into our high-volume manufacturing operation, and that creates an outcome where the technology is enabled by the design in a way that could be highly manufacturable. And so this unique model that we created is very much aligned with IonQ's needs as they build up their quantum technology portfolio. And the ability to do the rapid hyper innovation that Niccolo referenced is really one of the outcomes we get from this partnership.

Thank you. Next question comes from Krish Sankar of TD Securities. Do you plan on being a merchant supplier to other quantum companies? How will the deals with existing quantum customers at SkyWater evolve?

All right. I think we can both tackle that one.

Yes, go ahead. You start.

I'll just say, look, IonQ already is a merchant supplier. It's not that well known but we've talked about it on prior earnings calls. We supply the world's most accurate atomic clocks to a number of quantum computing and quantum industry players.

Also our quantum networking business, which is obviously focused on both long distance communication but also photonic interconnects to tightly couple quantum computers as they scale to full fault tolerance, that architecture has also been designed for all firms to take advantage. So it will be multimodal, and it's obviously industry-leading and based out of our Lightsynq office in Boston.

So as Tom and I started talking about synergies and vision, this is very much at the core of what we're looking to accentuate and make 1 plus 1 equal 30, as I like to say.

Yes. And just to add. One of the things that is unique about this combination is that SkyWater has an existing foundry business. We have created the compartmentalization, the protocols, the IP protections that will allow our customers to continue to operate within our foundry model.

This combination doesn't detract from that, it enhances it because now we will have an ability to drive the very close interaction that this stage of quantum technology evolution requires at a pace that will be very important for our country, our allies and our partners but, at the same time, offer the capabilities that we've established as a pure-play foundry to our existing customers and we hope many other new customers to come.

That capability of a highly functional foundry model is something that we're very proud of at SkyWater. And IP and IP protection is essential to a foundry business. And none of that will be jeopardized as we go forward.

Thank you. The next question comes from Quinn Bolton of Needham & Co. Is IonQ an existing customer of SkyWater? And will IonQ move its manufacturing to SkyWater after the transaction close? Who approached whom and how did this deal come about?

Well, I'm happy to start and then, Thomas, please chime in.

Yes.

Since we closed our acquisition of Oxford Ionics, obviously, top of mind for IonQ has been how do we actually accelerate and scale our electronic qubit control. There have been plenty of explorations with a number of partners on a global basis. However, it became very obvious to our team last fall that SkyWater's capabilities, as Tom just outlined, are a perfect fit.

It's not just that they have the 200-millimeter wafer leadership, but it's that they specifically focus on R&D and packaging-intensive partnerships, which may not have yet the volume of some chips out there but nevertheless are extremely pioneering forward-looking and incredibly security sensitive. Tom and I started talking about a commercial partnership last fall that evolved over time to a strategic partnership in various forms. And as we shared our combined visions of where we wanted to take our companies, we realized that there were more and more synergies than we perhaps initially thought.

And so we're delighted with this merger and partnership. It brings us not only acceleration of our computing road map but actually brings this acceleration of our full quantum platform because we have needs from SkyWater across our quantum networking, sensing, security operations under the ocean, on top of the ocean, on land, sea, air. And SkyWater will support and accelerate all of that. It also allows us, as Tom just eloquently laid out, to grow our merchant supplier business, which is already in existence at IonQ. And Tom will be leading the charge on a combined basis for all of our merchant supplier activities.

Last but not least, we are a proud U.S. company, based here, listed here. And our supply chain is now the most secure in the world both physically from a cyber perspective. And it's entirely domestic. And we're deeply proud of that. We're deeply proud of our ability to support the U.S. quantum industry and what we believe is the most important "space race" of our generation. Tom, what do you think?

Yes. I just absolutely agree with everything you just said. The one thing that became apparent as our team started engaging is the ability to move faster. When you think about the fabless foundry model that's evolved really over the last 30 years, it's come at a stage where we're in kind of, we'll call it, the classical computing realm.

We're now moving into the AI/quantum computing realm, and the quantum computing capability is something that requires that very tight interaction between design, process and development and the ability to get that development going in a way where you can get those technologies to be highly manufacturable.

So as we worked through what was going to be the best path to achieve the outcome that IonQ was looking for as well as continue to grow and scale SkyWater's pure-play foundry business, linking us together in an integrated fashion as one company became the obvious choice. And we're just super excited that our teams came together, our Boards came together. And we're going to transform what this country is doing in the quantum space as a result of this combination.

Thank you. The last question before we close out the call is for Niccolo. Can you talk a bit more about how you'll be integrating the businesses and what that timeline looks like?

Sure. So upon close, SkyWater will operate as a wholly owned subsidiary under the SkyWater name. Thomas Sonderman will lead the subsidiary and report to me, which will ensure the continued delivery of industry-leading Advanced Technology Services, Wafer Services and Advanced Packaging Services as well as the atomic clocks and quantum interconnects to all SkyWater customers.

Integration will be phased and pragmatic, ensuring continuity and deepening technical integration in the areas that matter most for road map acceleration. We have a proven playbook for integration and are confident that our dedicated integration teams will execute well to create value through this transaction.

Beyond that, it would be premature to provide more information about integration plans or a timeline, but I want to once again say that we are very focused on providing the same fantastic service and the level of focus that SkyWater has to all of their existing customers. And this transaction will enhance not only the merchant supplier capabilities on a combined basis, but enhance our ability to accelerate the entire U.S. quantum industry.

This concludes the Q&A portion of the call. Thank you to everyone for joining today. I will now pass it back to the operator to close out the call.

Thanks, everyone.

Thanks.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good afternoon, and welcome to the IonQ Third Quarter 2025 Earnings Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Henley Donofrio, Head of Investor Relations. Please go ahead.

Good afternoon, everyone, and welcome to IonQ's Third Quarter 2025 Earnings Call. My name is Henley Donofrio, and I'm Head of Investor Relations here at IonQ. I'm pleased to be joined on today's call by Niccolo de Masi, IonQ's Chairman and Chief Executive Officer; Inder Singh, our Chief Financial Officer and Chief Operating Officer; Jordan Shapiro, our President of Quantum Networking, Sensing and Security; Chris Balance, our President of Quantum Computing; and Dean Kassmann, our Executive Vice President of Global Engineering and Technology.

By now, everyone should have access to the company's third quarter 2025 earnings press release issued this afternoon, which is available on the SEC's website and on the Investor Relations section of our website at investors.ionq.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 for 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 press 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 2025. 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, 2024, and our quarterly reports on Form 10-Q for the quarters ended March 31, 2025, June 30, 2025, and September 30, 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 de Masi, Chairman and CEO of IonQ.

Thank you all for joining us. Q3 2025 will be remembered as a transformative quarter for IonQ, not only because we so significantly exceeded the high end of our revenue guidance, but because of our tremendous symphony of technical progress, talent attraction and successful expansion of our vision to lead globally in the business of Quantum.

I will leave my colleague, Inder, to provide details. However, as most listeners will have seen in our earnings press release a few minutes ago, IonQ delivered its largest quarterly revenue beat ever, delivering results 37% above the high end of our guidance. Putting this in perspective, we grew revenue year-on-year by 222%, a truly impressive number that demonstrates our commercial traction. Our company's growth trajectory is clear, and we have only just scratched the surface of the enormous opportunities we are pursuing.

During the quarter, we announced that our #AQ 64 Tempo system was up and running 3 months ahead of schedule, fulfilling our technical goal for the year. We closed our acquisition of Oxford Ionics and raised $1 billion at a 25% premium to the previous day's closing price. We created IonQ Federal and appointed a leadership team consisting of senior security cleared personnel, including Executive Chairman, Robert Cardillo, former Director of the National Geospatial Intelligence Agency for President Trump.

We are truly honored that General J. Raymond joined our Board of Directors. General Raymond is the only 4-star General since 1947 to have served as a 4-star in 2 services and was the founder of the Space Force at President Trump's direction in his first term. These leaders are emblematic of the incredible talent we are attracting across the organization, and their decision to join us is a testament to our commanding market position and bright future.

I'm proud of our clear quantum advantage use cases so far this year. We demonstrated faster computational engineering work with ANSYS in March and hybrid quantum AI applications in April. In June, in partnership with NVIDIA, Amazon and AstraZeneca, we demonstrated the world's first 20x quantum speed up in computational drug development. Our Forte System has routinely demonstrated quantum advantage and in this case, performed nearly a month of classical computational work in just 36 hours.

Our newest system, which we unveiled at our Analyst Day on September 12 is called Tempo. Public benchmarks show Tempo has a compute space 36 quadrillion times larger than the leading commercial superconducting system in the market. We are proud that Tempo is scheduled to ship in 2026 and has a computational space approximately 260 million times larger than our current fully commercialized Forte system.

Following our expansion to networking in the second half of 2024 and the first half of 2025, we acquired the world-leading quantum sensing company, Vector Atomic. Vector Atomic has been a fantastic addition to our capabilities for golden dome like projects and vital commercial solutions such as next-generation GPS. Our new colleagues led by CEO, Dr. Jamil Abo-Shaeer, are a wonderful cultural fit and already have multiple program of record contracts with important U.S. government agencies. Quantum sensing is relevant to our networking, cybersecurity and computing product families, and we are confident it will accelerate growth for IonQ around the world.

I'm pleased to report that we're proving out synergies as expected across many of our product families globally. IonQ has a truly unique ability to land and expand in quantum computing, quantum networking, quantum sensing and quantum cybersecurity. Our strategy is to expand our technical lead in each Quantum product family and connect our products together to provide unique solutions to allied sovereigns and major multinationals alike. We are investing in our ecosystem's breadth and depth via partnerships that we believe will underpin long-term annuity-like customer relationships.

As we have demonstrated and as I said in our Analyst Day, we are in it to win it, and we keep our commitments. We are continually on the lookout for talent and IP that will allow us to accelerate the progress we make on our technical road maps. Time matters, and we view ourselves as an increasingly indispensable partner in defense and economic security for the U.S. and NATO in the coming years.

With over 1,100 patents pending and granted, we are proud of how our IP moat has expanded 30x since our first IPO. Our team has put in tremendous effort this quarter and year as we have deepened our commitments to both fundamental research and commercial leadership.

After the quarter ended, we delivered 3 exciting milestones, strengthening our balance sheet by selling $2 billion of common stock at $93 per share, demonstrating the world record 2 cubic gate fidelity of 99.99% or 4 9s and closing our acquisition of Vector Atomic. Our 4 9s fidelity for 2 cubic gates is a particularly momentous and historic achievement. We are the first company in history that can proudly say that all of our key technical milestones have been achieved, and we are now focused on only engineering scaling to achieve full fault tolerance.

With our well-established semiconductor fabrication approach, the course is clear for us to deliver each generation of our systems. You'll hear more on this from my colleague, Chris Balance, in a couple of minutes.

It is clear that IonQ has begun to enjoy compounding benefits from our scale and momentum advantages, entrenching our position as the dominant force in quantum and the only complete quantum platform solution.

Before I close, allow me to clarify for stakeholders new and old, what true quantum computing actually is. While numerous companies, public and private, have added the word quantum to their corporate name for decades, we can confidently state that in almost every case beyond IonQ, this is just a branding attempt. Terms like quantum-inspired, quantum annealing or analog quantum simulators all represent toy machines compared to the real deal, which is universal fully entangled gate-based quantum computing.

Our co-founder, Chris Monroe, kicked off the field of gate-based quantum computing with the demonstration of the world's first quantum gate in 1995. And our team has been at the forefront of quantum computing ever since. Only a universal quantum computer, like those we have shipped and continue to accelerate building at IonQ, offers actual commercial quantum advantage.

Plenty of analog quantum simulators exist in one form or another. They are quite easy to build compared with a true entangled general-purpose gate model quantum computer. However, to fully simulate the complexity and range of possibilities enabled by 100 truly entangled qubits in our Tempo system would require billions of high-end GPUs and consume more power than all of the world's power stations combined.

Indeed, as we showed at our Analyst Day in September, Tempo has 36 quadrillion times more computational space than our closest competitors' best machines. The volume of simulation equivalent GPUs can be expected to become even more astronomical as we release our 256 qubit and 10,000 qubit systems in subsequent generations. Looking beyond that, as we laid out on June 9, IonQ is targeting 1,600 longle qubits in 2028 and 80,000 in 2030. As a point of comparison, a leading competitor's road map released 1 day after ours targets only 2,000 module qubits by 2033. This is 5 years behind us and with an architecture that will cost 1 to 2 orders of magnitude more for equivalent compute power 5 years later.

We showcased our industry-leading bill of materials for our 80,000 module qubit machines on September 12. Global supply chain experts, A.C. Karney, have validated our bill of materials for our 2 million qubit machines to be sub-$30 million in 2025 dollars. No other company will be able to come close to these unit economics. Anyone can say they're doing something quantum when they absolutely are not. For the avoidance of doubt, software running on simulators or any classical machines can always be branded with the word quantum. However, doing so, of course, does not mean true entanglement and quantum advantage is an operation.

No one can come close to approaching what IonQ software running on our universal gate-based true entanglement generating tempo quantum computers can offer. The hardware needs to be quantum and the software needs to be quantum in order for the results to be quantum.

We believe we're the clear leader in quantum computing, further differentiated by our capabilities in quantum networking, quantum sensing and quantum cybersecurity. This leadership enables IonQ to offer quantum computing far sooner and at a far lower cost than others. Our focus now is on translating our clear technical advantages and differentiated capabilities into value for shareholders.

Quantum is now. As you have seen, Q3 was another strong pioneering and record-breaking quarter at IonQ. We look forward to Q4 and 2026 with confidence.

I am delighted with how our leadership team is evolving. Inder Singh hit the ground running as COO and CFO, benefiting from his knowledge of the company gained in his prior role as our Lead Independent Director and Audit Committee Chair. Dr. Chris Ballance, Founder of Oxford Ionics has become IonQ's first President of Quantum Computing. Dr. Marco Pistoia, who until last quarter was Global Head of Quantum Computing at JPMorgan, has assumed the role of CEO of IonQ Italia as we continue to deepen our investments in EMEA. And Dean Acosta was appointed as Chief Corporate Affairs and Government Relations Officer, bringing more than 3 decades of experience in technology, defense and public service.

I am delighted to introduce everyone now to Dr. Chris Ballance, President of Quantum Computing, to provide more detail on our quantum computing milestones this quarter.

Thank you, Niccolo. Let me begin by saying it's a privilege to be part of IonQ at this critical inflection point. Since closing the Oxford Ionics acquisition, our priority has been swift and purposeful integration. We've already unified our world-class engineering teams and are now executing as a single focused entity to deliver on our technology road map. As outlined at our Analyst Day in September, the Oxford Ionics Electronic Cubic Control, ETC architecture is actively being integrated into the IonQ 256 qubit machine and will be demonstrated in 2026. In parallel, our scheduled system deliveries for Forte Enterprise and Tempo remain on track as planned.

The beautiful thing about electronic qubit control is that it fits seamlessly with classical computing workflows and our present electronic world. EQC uniquely underpins our ability to become the world's first mass market quantum computing company in history.

As Niccolo highlighted, we're proud to have delivered a record-breaking algorithmic qubit score, AQ of 64 on Tempo, our fifth-generation quantum computer, which expanded our computational space by approximately 260 million times. Hand-in-hand with that announcement, we're also very excited to have achieved a historic world record 99.99% 2 qubit gate performance this quarter. We're rapidly building on that performance to execute our road map out to 2 million physical qubits in 2030, making us the only company who has hit their qubit performance target, the full -- full tolerance scale quantum compute platform.

What's even more exciting is that we achieved this performance in a chip-based platform that can be scaled by the existing semiconductor industry supply chains, which enables our rapid scaling. With 99.99% 2-qubit gate performance, we realized fewer errors for operation and therefore, require fewer physical qubits to operate large-scale commercial systems.

With these high-performing qubits, we also unlock more complex algorithms that simply will never be tackled by lower performance systems. What drew me to IonQ is our comprehensive full stack approach. Our unique ability to network systems together is, in the long run, the key to true scalability in quantum computing.

To expand on the progress we're making in our critical capability, I'll turn it over to Jordan Shapiro, President of Quantum Networking, Sensing and Security.

Thank you, Chris. Just as our acquisition of Oxford Ionics has greatly accelerated the time line of our computing milestones, the integration of Vector Atomic has vastly expanded the potential and TAM of our networking, sensing and security product family. Uniting world-class sensing capabilities with our pioneering infrastructure for long-range quantum connectivity allows IonQ to bid on some of the most important cybersecurity infrastructure projects of the future. Indeed, we have more than $1 billion of proposals in progress that leverage the strength of our unique quantum platform offering.

Vector Atomics precision inertial sensors and clocks have demonstrated state-of-the-art performance on land, at sea, in the air and in space with equipment having been deployed on the U.S. Department of War's X-37B Orbital test vehicle. We are now working to integrate this positioning, navigation and timing technology onto our own satellites and will soon fly more products from the IonQ portfolio, including quantum key distribution systems to pioneer global quantum secure communications networks.

We are also making QKD, post-quantum cryptography and secure networking advancements on the ground. We are proud to be collaborating on the first citywide dedicated quantum network in Geneva, Switzerland, as part of a landmark public-private initiative, which includes Rolex, the Swiss government and academic institutions. The network will securely link institutions across the region and deploy IonQ's Quantum key distribution and quantum detection systems, demonstrating our security capabilities in action while also leveraging hundreds of miles of existing fiber optic infrastructure. This is just another example of IonQ driving awareness of Quantum's potential while enabling real-world quantum secure communications today.

Now I'd like to hand the call over to Inder Singh, IonQ's CFO and COO.

Thank you to Niccolo and the entire team here. Let me just begin by saying that my first 2 months as CFO and COO have really been incredibly exciting. Of course, before this role, I was involved with IonQ on the Board, as Niccolo mentioned, but it's an entirely different experience being part of this amazing leadership team at a critical point in the industry as well as the platform that we have established.

Niccolo's strategy of building the world's first quantum platform company is what we are now reporting on and executing towards. A year ago, we were proud to be speaking with you about our breakthroughs in quantum computing in which we still maintain a 5-plus year lead over others and have just announced our fifth generation machine. To remind you, our competitors seem to still be working on their second-generation machine.

Today, we're proud to be speaking with you as the world's first quantum platform company. And today, the results we're going to be sharing demonstrate execution of that strategy. We are the market's only full stack quantum platform company.

On our financial results for the third quarter, I'm very pleased to say that we had a very strong quarter, as Niccolo mentioned. We achieved record revenues of $39.9 million, representing year-on-year growth of 222%. These revenues exceeded even the high end of our own guidance by 37%. We achieved this by continuing the leadership in quantum computing and rapidly expanding into quantum networking, quantum sensing and quantum cybersecurity. We have led and continue to lead in quantum computing with our record-breaking 4 9s fidelity and 64 algorithmic qubits.

We have now added world-class quantum cybersecurity as well as the world's best quantum atomic clocks and the world's most advanced quantum sensing technologies. As a result, our commercial opportunities have also grown alongside the platform we have built, as Niccolo mentioned. We can now capture larger solutions-based contracts and continue our land and expand strategy. As Niccolo puts it, we are the 800-pound gorilla of Quantum, able to address the opportunities that require a quantum solution. This lies at the heart of the work we announced with the U.S. Department of Energy in Q3 and the future solutions we can now develop in partnership with them.

It also uniquely positions IonQ to pursue large-scale contract opportunities like the U.S. government's Golden Dome initiative. The capability we have, in our opinion, uniquely differentiates us in the quantum market with the ability to now pursue potentially 3-digit million dollar opportunities.

I'm also pleased to report that our business is increasingly international. In the most recent quarter, our business was approximately 70% U.S. and 30% international, contrasted with a year ago when it was almost all U.S.-based. We expect to continue to expand our global footprint. And as we move ahead, we are looking at potential opportunities around the world, including in example, countries, Australia, Italy, the Nordics, South Korea, India, Japan and many others.

In Q3, we had an adjusted EBITDA loss of $48.9 million. On this non-GAAP basis, our biggest spend continues to be on research and development, which lies at the heart of our solutions. This nearly doubled on a year-on-year basis, and we will continue to invest to maintain and expand our innovation leadership. These investments allow us to hire and retain the world's best quantum talent in IonQ period. We are investing in engineering, in research, in production and in go-to-market. We believe we can both land and expand by embedding ourselves and our solutions with our customers as well as take on the obvious opportunity to address cross-sell opportunities of our products across our customer base.

In Q3 2025, GAAP operating expenses were $208.7 million, including research and development spend of $66.3 million. Sales and marketing spend of $14.4 million and G&A of $82.5 million accounted for the rest. The GAAP spend includes nonoperational items such as acquisition-related costs as well as some noncash costs such as SBC, stock-based compensation. For the quarter, stock-based compensation accounted for $72.9 million, driven primarily by incentives to attract and retain the world-class talent we are putting together. The details for this are also available in our press release and will be available in our 10-Q will be filed -- which will be filed shortly.

GAAP EPS in the quarter was a loss of $3.58. The biggest item in the GAAP EPS is related to the mark-to-market we are required to do each quarter. This is associated with the warrants outstanding. And for context, in Q3, this cost alone amounted to an EPS impact of minus $2.99. Again, for context, our stock price -- as our stock price rises, so do these noncash nonoperating warrant expenses. Other onetime expenses such as the previously mentioned acquisition costs accounted for the remainder. And if you adjust for the sort of nonoperating expenses, our adjusted EPS was a loss of $0.17. We believe this latter adjusted EPS number is more representative of the business' ongoing operating performance, and therefore, we have introduced this metric.

Turning now to our balance sheet. Cash, cash equivalents and investments as of September 30, 2025, were $1.5 billion. In October, we closed an additional $2 billion capital raise which brings our pro forma cash balance to $3.5 billion as of October 14, with no debt on our balance sheet and this $3.5 billion solidifies IonQ as the most well-capitalized pure-play quantum provider in the world. This financial firepower provides us with the ability to continue to invest in our market-leading position, and we intend to keep doing that.

Turning to my role as Chief Operating Officer. I'm also working very closely with Niccolo and the rest of the leadership team on ensuring that our company infrastructure and processes also scale as our unique quantum platform delivers for our customers. We are committed to operational excellence across the business. And just as an example, we are rapidly developing a unified procurement strategy to tighten lead times, bring us resiliency and generate cost benefits as we scale.

With our investment in Oxford Ionics and starting in particular with our 256-qubit quantum chip that Chris talked about, we can now begin to leverage the existing semiconductor ecosystem and the silicon design capabilities. By doing this, we can benefit from established foundries and mature nodes at these foundries, which also provides us with supply chain resilience as well as lower cost infrastructure. Our Quantum platform helps deliver the best price, the most miniaturization, the easiest deployability and the lowest energy requirements. In our view, this platform approach, combined with our world-class engineering deployment teams, enables us to deeply embed our solutions into the most critical workflows at our customers. We believe this approach creates a stickiness with our customers, which further deepens as we build quantum applications in partnership with them to solve their most difficult challenges. To net it all out for you, we are creating a quantum ecosystem and we'll continue investing to grow our lead and deepen our competitive moat.

Let me conclude my comments with our financial guidance for FY 2025. As I mentioned earlier, we achieved a record-breaking quarter in Q3. And as I said earlier also, we are investing in the business. So I'm happy to say that we now expect our Q4 revenues to be even stronger than Q3. This breaks the seasonality we have seen in this company in prior years. With that, I'm pleased to say that we are increasing our full year 2025 revenue guidance to a new range of $106 million to $110 million. We are also reaffirming our projections for EBITDA to be in the range of minus $206 million to minus $216 million, which has a midpoint consistent with what we said last quarter. As Niccolo began in his opening remarks, we are vertically integrated with decades of engineering breakthroughs behind us, and we believe decades more to come.

With that, operator, you can please now open up for Q&A.

[Operator Instructions] Our first question comes from Craig Ellis of B. Riley Securities.

Operator, maybe we can move to the next caller while Craig dials back in again.

Our next question comes from Quinn Bolton of Needham & Co.

Congratulations on the nice results and the significant upside to guidance. I guess I wanted to start there with the revenue upside in the quarter. Inder and Niccolo, can you give us some sense how much of that came from the core quantum computing business? How much might have been spread across the security, sensing and networking business? Just trying to get a sense for how the business may be diversifying under your Quantum platform strategy?

Yes. I wouldn't say sort of diversifying. I mean, thank you for your question, of course. I would say that we are now getting into the capability of selling solutions. That's really important. That lies at the heart of what the future of this company is. And that's largely with what Niccolo started putting in place earlier this year. So all of the products being under one roof allows us to be a one-stop shop with integrated solutions all the way from sensing to network security. I mean, think about quantum security and the relevance of something like that today when potentially encryption could be at risk a few years down the road. So what's resonating for us, to be honest, which is what you're seeing in the results is the cumulative effect of having the solutions around security, which are here and now, the solutions around recurring revenue streams and subscription-type revenues that we didn't have in the past, frankly, and we now enjoy in the platform. And also, to your point, building on the continuing momentum in quantum computing. I'm happy to say that quantum computing's momentum continues in the same way that it has for the last 4 years.

So we have a very ambitious but also very focused and targeted and incrisive team resourced effort to maintain our technological computing leadership. The point you should take away is every other company is talking about computing. They're talking about how many qubits and we wish them well, of course. At the same time, we have our fifth-generation machine available now, our sixth generation machine coming next year. So we're not standing still on that. The momentum continues, and we are now benefiting from sort of all of these things coming together in a platform company that no other company can match. And so I think the results that you're seeing reflect our ability to actually open more doors, talk about solutions instead of selling an individual product. Talk about selling security to protect networks today when every network is threatened by hackers. Virtually everything that is classical from a security standpoint, and you know this, is really not enough anymore. Jordan talked about our capabilities here. The sensing businesses that we have are super relevant because you've heard of GPS spoofing, no doubt. And you think about atomic clocks, PNT, position navigation timing, the ability for us to put that in place with incredible accuracy is something that we believe no other company can offer. So I think you're seeing the results of everything. But yes, to answer your question directly, we've got great momentum in our computing business. We're not stopping. We're going to have the most number of qubits next year and in 5 years from now.

Excellent. And then a follow-up question, just it looks like the DARPA/QBI program should be getting close to announcing the Stage B selection. I think many investors view that as a potential point of validation for those companies selected. Just wondering if you could make general comments how are you feeling about that down selection process and your level of confidence going into that process.

Thanks, Quinn. This is Dean Kassmann. So the IonQ team, which was a performer under QBI as well as the Oger team have both gotten immensely positive feedback from the DARPA team. And we can't say anything yet until the DARPA leadership announces kind of the performers that are moving to Stage B, but we're very happy with the technical work, and we've gotten very positive technical feedback.

Okay. So we're going to try Craig Ellis.

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

Hopefully, things are working. Congratulations team on the execution. Niccolo, I wanted to start with a question for you. Very clear that you've established a strong platform. The question is, as you work with your government partners, as you work with your commercial customers, what application areas are you seeing being most popular presently? And what looks most descendant for people that are just starting to get engaged or maybe going on to the second or third round of work with your quantum capability as we look out to 2026?

Yes. So I'm going to answer that probably more broadly than simply what the government is focused on because there's a lot of overlap between customers in the commercial space and, of course, the government space, right? We've talked about things like power grid optimization. We've talked about programs like Golden Dome, where we have a number of products, and as Inder rightly put it, solutions that are hugely relevant. There's obviously a stronger IonQ federal team, both on the Board and the management team, which includes people like Rick Muller, the former DARPA Director. So there's a fair amount that's obviously in the classified space given that we have a lot of classified personnel deliberately in the team and in the strategy. In the defense sector, if you will, you can imagine that everything from logistics to maintenance to AFRL, we have a contract with of size where it's quantum networking of 2 computers, and that's obviously been running for about a year's time. I think it's safe to say that there is more that we're able to offer in the quantum realm for more agencies in other company on the planet. And we have a deliberate strategy for not just the U.S., but what's called the 5 Is and of course, NATO beyond that. We're proud of the fact that we're making considerable inroads in our investments in Europe. And of course, we have our President of Quantum Computing in the U.K. I was the only Quantum CEO at the Checkers Technology Prosperity deal last month, right, between President Trump and Prime Minister Starmer. So I think it is safe to take away from that, that we have fantastic momentum with, let's just say, the classified space and ministers of many friendly and allied nations. But I think that the applications we're working on have much broader application in the commercial sector, right? There's overlap for companies of scale in the commercial space with what the government is interested in. In fact, I'd say there's overlap anyone that has any scale, right? Nobody wants to get hacked, honestly, Craig, right? And things like Quantum Cybersecurity and QKD, they're hugely relevant today because people are getting hacked today.

You've heard me say in the past, you can spot our Quantum security customers because they're typically not in the news for data breaches. And nobody really wants to be in the news for data breaches, right? So we're an integral part of not just national security, but national economic security as we see it. And we're an integral part of where the Fortune 500 is planning out their road maps in the next few years, frankly, across our business.

That's real helpful. And then the follow-up is for Inder. Inder, in your prepared remarks, I think you mentioned that there were multiple 3-digit millions deals that the company was working on. I think Jordan mentioned something that might be in the $1 billion range. Can you just talk about the timing with which the company might be able to realize those? Is that something that's possible later in 2025? Is it 2026 or longer term?

Thanks for the question. I think that you caught the gist of what I think we want to make sure that you all understand. A solution is measured in very different ways than a single product set. So what we are now able to do is deliver an integrated solution. To your point, how do these develop, how do they get announced. Clearly, we will be sharing with you more once we are ready to. And also, as we get into early 2026, we can start talking about guidance for '26. I'm not suggesting this to be put into guidance into your financial model for tomorrow, for sure, of course, right? You need to understand, though, that the nature of the game has changed. And I think gone are the days when it's sort of like butting heads to sell a single product and maybe our competitors are still doing that, and we wish them well. That's what makes an industry happen actually. We're not standing still. We're just putting together the platform that solves real-world solutions. And if you look at the DOE announcement that I referenced earlier, that's a great evidence point for you. If you think about the vision of what Golden Dome is trying to achieve, classical computing cannot address it.

And the products that we've developed that are both terrestrial, that are space-based as well, the sensing, these components have come together with a strategy and reason. And we are now able to provide that, as Niccolo said, not only for one type of a customer and one type of a solution, such as Golden Dome, but also to other countries that have similar needs. So watch this space. I think 2 quarters into this role, I'm feeling great about where we are. The sort of performance that is flowing through the financials today gives me real confidence. The fact that, as I mentioned, we have more of our revenue that is of a repeatable nature now as well. That gives me near-term visibility. And then as these -- what you called it, 300 or 3-digit million opportunities emerge, develop, they take a few years, obviously, to execute. But at the same time, if you have a few of those layering on and ahead of you, and you're the only company positioned to strike now, then it's a terrific opportunity for us. But I don't want you to put that into your model just yet. Let us take you through there. Let us show you the evidence of that as we go forward. But we are looking at these very types of opportunities.

Our next question comes from Troy Jensen of Cantor Fitzgerald.

Congrats on nice results. Chris or Niccolo, a question for you. I just want to make sure I understand the time line of the Oxford Ionics acquisition. Will the Oxford chip be in the sixth generation computer that you're launching in '26? And can you tell us just the technical stats if you're going to have the 256 cubic count and 4 9s fidelity?

Thank you. This is Chris Ballance. Yes, that's right. In the 2026 technology development road map, we have the 256 qubit device that's based on electronic qubit control. And it's precisely in this electronic qubit control architecture that we demonstrated in a technology prototype earlier on this quarter, the 4 9s 2 qubit gate fidelity.

All right. Perfect. And then just maybe a quick one for Andre. Can you help us out at all on just kind of OpEx trends and which deals haven't closed? And I mean, obviously, it's up and to the right. I get it on the OpEx, but also share count number would be helpful for us.

Yes. Look, I think that we feel very good about where we are with our products today and then now the solutions that we've been talking about. I would say that we are intending to continue to increase what you would want us to increase, which is R&D and innovation. That's number one. Number two, we're going to invest in our go-to-market. We have multiple opportunities to do that. There's the land and expand, and we've demonstrated that customer after customer after customer. We have long-term relationships, as you know, with AFRL and others who are using successive generations of our capabilities. And as I think about where we are in terms of R&D and SG&A, I think that we are also ensuring that we have the right supply chain in place, the right manufacturing capability in place, the right foundries for Chris' business in place because he's using existing foundries, which is amazing from a cost standpoint. We're ensuring that our IT infrastructure scales. So you will see us also investing in SG&A, but that's to make sure that those don't become bottlenecks to the incredible opportunity we have to actually create solutions for our customers. And one thing that I think shouldn't get lost, and I want to -- I know I said it and Niccolo has as well, we are also building applications. It's not just the solution itself or the infrastructure, but it's how you use it and what do you use it for. So you'll see those expenses be our investments. And I think we have the war chest that we need. We'll be prudent, of course, as you would expect us to be about how we invest and where we invest more versus less. But I've given you a flavor for where we need to drive innovation to maintain the competitive moat that we already have and maybe even deepen it. You asked about share count. No, I would say that directionally, share count by year-end is probably in the range of 350 million shares, plus or minus. And so I think that, that reflects the investments that we've made, of course, in people and in the technologies that we have. I hope that answers your question.

Our next question comes from Richard Shannon of Craig-Hallum.

This is Tyler Anderson on for Richard Shannon. Congrats on the quarter, the acquisitions and the 4 9s. I'm wondering, to what degree has the government shutdown impacted you for upcoming deals? Has this pushed anything out? And then could you double-click on what you're doing with QNext and whether or not the scope of your work has changed since you've made all of these acquisitions?

Yes. So let me take the first one, and I'll pass it to my colleague, Jordan, on the Look, the good news is, as I said in my prepared remarks, we are increasingly part of the fabric of what matters to our nation's national security and national economic security. And I would say that's the case more broadly. I think there's strong support, obviously, in the United Kingdom for this company, given that we acquired, I would argue, the greatest quantum company that the U.K. has produced in history. And so the allied nations of the Western world are obviously determined to prevail in the quantum space race, if you will, that is playing out on a weekly, monthly, quarterly basis here. And so we haven't seen any impact bottom line from the government shutdown in the U.S. that has at least been material. We are highly confident that we'll be continued as a priority partner on both sides of the Atlantic. And we're highly confident, as you heard from Inder, that engagement in the systematic importance of IonQ continues to be up and to the right. Jordan, over to you on the QNext.

Yes. I'll just comment first on the government side. We're tremendously confident for our current projects, we're funded and continue to work and invoice and get paid on all of our projects. Not to mention, you look at what's happening today, just yesterday, the National Security Space Association came out with a paper specifically talking about Golden dome and how programs of record are going to need to incorporate better GPS. And so we are feeling very confident that our solutions on the quantum sensing side speak specifically to those government programs now and for the long-term future. With respect to we do not have a significant relationship with that company, but we are rapidly expanding the number of quantum networks that we are engaged in. And for example, the Geneva Quantum Network that we mentioned this afternoon is just the latest and greatest of quantum networks that we're able to provide.

Jordan, if I may. So I'm sorry, I may have gotten muffled. I meant QNext the government lab from the announcement yesterday for the $625 million?

Got you. Tyler, we'll follow up with you on that one perhaps offline.

Yes. Let's take that offline and go into detail question, if that's okay?

Yes, that's absolutely. And so then has there been any shift in customer demographic since you guys have been going out and talking about your 256 cubic quantum computer?

There is incredible interest in customers in seeing the road map that we've laid out and our ability to then execute against it. What we're finding is what's resonating with them is that the BOM that we have, the bill of materials that we have in terms of delivering a lower cost solution, as I mentioned earlier, with greater compute power and lower energy consumption, that is the right level of thing of mix of things that customers are looking for in terms of TCO. My colleague, Chris can speak more specifically about the early indicators of 256 and then 10,000. And remember, our journey goes all the way up to 2 million qubits. Chris?

Thanks, Inder. Yes, what I'd add on to that is with this electronic cubic control platform, of which the 256 qubit product is the first, we can scale far more rapidly than other technologies because we're using existing foundries. So we really are using these existing semiconductor supply chains, and we're at nodes that are multiple generations old. Everyone else in the quantum space is having to build their own supply chains out of this. And this really is a differentiator that customers see, especially in how fast we can deliver on our long-term road map.

Yes. So look, the only thing I'd add to that is you heard from Inder in his prepared remarks that obviously, we're growing nicely on both sides of the Atlantic now. So you can assume there's more global interest due to our scale and the fact that we are the largest quantum company in history by any measure at this point. As you heard from Inder and Chris, winning every computing revolution comes down to as much power at an effectively affordable, accessible price as little energy requirement and space requirements as possible, right? And so everything you hear out of IonQ is about driving those metrics in the right direction, right? We want the most powerful machines at the most accessible price points. with the lowest energy consumption and the smallest space consumption required. We also spend a lot of time on robustness, right? And one of the things we're proud at with IonQ across the board, from sensing, networking and computing is that we ship and we commercialize and we have a lot of equipment and customers in the field, right?

So technology readiness levels are fantastically high relative to anything else you can find on planet Earth. And it's a feedback loop that benefits our ecosystem constantly, right? So you've heard me talk in the past about our ecosystem. And at the end of the day, the platform strategy for IonQ is about winning the quantum computing race, the quantum sensing, quantum networking and stitching that all together so that our ecosystem is unmatched. And our ecosystem is not just hardware and entangled hardware, as you heard me talk in my remarks, but it's the software and applications on top of that. And the more of it that we have in the field with customers, of course, the more feedback we get and the more embedding in critical workflows, as Indra mentioned, that occurs, right? So we're viewing this as a market share land grab opportunity of customers choosing our ecosystem because not only we're winning today, and we've won for the last 5 or 10 years, but they see a clear path to us being the prevailing ecosystem, right?

We're not just the pound gorilla of quantum. We see ourselves as the NVIDIA of the quantum space. And I've said that before publicly. And all signs are there, if you look at what we have published between June 9 with our webinar, September 12 Analyst Day and of course, today's earnings call, that we are the technical leader in our space and also the commercializing commercial leader in the space. And we're very focused on the mass market commercialization of all things Quantum and making the future happen sooner, if not today.

Our next question comes from John McPeak of Rosenblatt Securities.

Why don't we come back to John, operator.

[Operator Instructions] Our next question comes from David Williams of Benchmark.

Congrats on the solid execution here. Maybe first, just a point of clarification. Jordan, did you mention earlier that you all were working on your own satellite and putting some of the technology that you've acquired on that satellite? Is that -- did I hear that correctly?

That's correct.

Okay. Excellent. And when do you expect that to be in service?

We haven't put out specific time lines for the serviceability. But what I'll say is at this moment, you have flying a quantum gravimeter -- and that is orbiting the earth. So these technologies that we're talking about are near term for us. They are productized. They are space tested, and we are rapidly deploying technology as quickly as possible, making it available for our customers globally.

Okay. Fantastic. And maybe the next one for Dean or the doctor there. If you kind of think about what the Quantenium announcement and the release of their Helio system, this is still quite a ways away from what you all have talked about, especially your road map, but there was some nice error correction or logical qubit ratios there. I'm just kind of curious how you see that and maybe any thoughts there that you might provide just on that the Helios system.

Thanks. This is Chris Ballance. So what matters for application performance is effective error rate. So our physical qubits are now substantially higher performance than anyone else's logical qubits. So in the short term, for the near-term road map, you can take our physical qubit count as you look at other people's logical qubit counts. But what's also important is things like scalability, reliability, deployability, as Niccolo said. So our systems have been on the cloud for a very long time now, and we have a lot of battle-tested experiences of landing these systems in the field. And with our new electronic quubit control technology on which we've hit this record high cubit performance. We also end up using standard chip-based semiconductor fab, which allows us to make things more reliable at the same time as reducing the cost and taking things from having knobs that need to be tuned like in competitor systems, the things that are baked into a semiconductor chip, which allows us to mass manufacture these things while improving reliability.

David, this is Jordan. Sorry, I misspoke earlier. I meant to say we have a quantum gyroscope testing, not a quantum groupimeter.

Our next question comes from John McPeak of Rosenblatt Securities.

Niccolo, Inder and team, congratulations. This is kind of a longer-term question. Your road map has you surpassing the most powerful supercomputers on planet Earth by multiples within the next year or 2. And I'm just trying to get a sense qualitatively at least, what could that do to revenue growth at the company? And then I have a mundane near-term question after that.

This is Dean Kassmann. Just from a technical and capability perspective, that it generates a hockey stick, right? Our double exponential growth that we have in our scaling creates an absolute blossoming of applications and use cases that is basically unbound. And so that's the simplicity. I mean the capabilities that will be unlocked for entrepreneurs for corporations for the promise of Quantum is now. It's right around the corner. We have the road map to drive it and the technology that Chris talked about that underpins it, and we're executing on it.

Yes, go ahead. I'm sorry, go ahead.

I was just going to add on to that, just how far past the best supercomputers these systems go. If we look at our 2026 256 qubits product to match that in terms of raw horsepower, you need about 10 to power 20 H100 NVIDIA GPUs. And the power consumption for that will be about 1 billion terawatts, which is about 1 billion times Planet Earth's total power generation capability. So these 2026 systems aren't just going to be more powerful than the world's largest supercomputers. They're going to be more powerful than the largest supercomputing humanity will ever build, even assuming hundreds or thousands of years of classical technology progress.

Yes. The exciting thing is our bill of materials grows very, very modestly between where we are in '26 and where we are in 2030. So look, to answer your question on revenue growth, as Inder mentioned, I think at the full year results, we'll be talking about '26 guidance, and we'll give you maybe updates to the long-term model. But we're obviously on the precipice of history here, and we're very excited about that as a company because there are many of us that have worked at this for entire careers in the case of our founder, obviously, 30 years. But we are delivering on the vision, and we're doing it in a practical, robust, shippable, deliverable and frankly, affordable manner, which is what it takes for this to become a real revolution, the likes of which we've seen only in the 1980s and the early days of computing, what you saw in the 2010s with mobile applications. I mean you're going to see a flourishing of applications ideas. And as Dean rightly said, our application road map that we published on June 9 on our webinar on September 12, our Analyst Day is just some examples of the applications we're working on. There's going to be many more ideas that our developer partners and networks create, particularly around, I think, the quantum AI space.

Sorry, you had a second question, John?

That's helpful. Yes, the language in the Q on the year-over-year revenue growth mentioned the acquisition of Oxford Ionics as a cause. Is that just the lawyers saying you have to say that? Or is it substantive?

No, we are required to, and we do disclose the acquisitions as we have. I think that if you recall, John -- and by the way, John, congrats on your new role.

Yes, thank you. I've known you for, what, 3 decades. So the thing is that the acquisition of IonQ of Oxford accelerated our road map by 2 years plus. And for us, this was getting our solutions to market faster, of course, but also leveraging the semiconductor ecosystem, and that should not be underestimated. The ability to actually leverage 128-nanometer type nodes, which are mature nodes, lower cost available. So we're not fighting for capacity at TSMC, for example, allows us to get things done faster, scaled more quickly at lower cost. So yes, I mean, the disclosure is there for all the right reasons. The point is it's already integrated. This is our road map. And to be clear, as you're thinking about 2026 revenues, our fifth-generation machine is at the heart of our 2026 as we think about it. And the 256-qubit machine, as soon as that's ready to deploy in the market, we will do so as well. So we are doing this in a way where the transition from our organic sort of development of the quantum machine that we have been perfecting up to the fifth generation seamlessly moves to the 256. And yes, the amazing stats that Chris just went through and what the potential is to unlock protein folding, sources of other chronic diseases, battery chemistry, it's limitless. And we will make sure that we maintain our focus on the most important of those applications ourselves and then work with other partners to deliver the rest. That's the ecosystem comment that we were making earlier.

This concludes the question-and-answer session. I would now like to turn the conference back over to Niccolo de Masi, Chairman and CEO, for closing remarks.

As you heard, we are confident IonQ is head and shoulders the leading player in quantum computing, not only because of our existing tempo systems, but our historic 99.99% fidelity and clear path to full fault tolerance, electronic qubit control systems and record low unit economics. IonQ stands alone as the only quantum platform with the breadth and depth of integrated solutions across quantum computing, quantum networking, quantum sensing and quantum security. We are on a clear trajectory to deliver critical quantum cybersecurity infrastructure, ultra-precise quantum navigation and quantum timing solutions. The mass market commercialization of previously unimaginable quantum computing power will always be at the heart of our mission.

Our relentless focus is on manufacturability and driving mass market adoption of our quantum ecosystem. Software is also an increasing focus for us as we expand beyond the hardware and aim to make our leading quantum solutions the most accessible and practical for customers worldwide. Real-world advantage via commercial applications, combined with urgent national security needs are catapulting IonQ's Quantum solutions into the foreground with our nation and allies. We are the largest pure-play quantum company by any measure, revenue, patents, PhDs, balance sheet, market capitalization. As IonQ scales to 2 million physical qubits, we expect to ignite growth in new application ideas, use cases and software creativity that has not been seen since the dawn of personal computing in the 1980s and '90s or mobile computing in the 2010s. We are tremendously excited to be leading the Quantum age. Thank you all for your time today, and have a great week.

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