IonQ Aktie

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.

All right. Good morning, everyone. It's so exciting to see so many familiar faces here as well as, hopefully, new friends that we're making for the next decade. We're in for a fantastic show this morning, as I like to call it. You're going to learn about where we've been, where we're going and most importantly, why we have led this market for the last, I would argue as our founder sitting in the audience, I would argue we lead in this market for the better part of 30 years. And we are poised to lead it for the next 30 years.

Today's agenda is going to have about half a dozen sections before we take questions. We will then have lunch once we finish the proceedings. And my colleagues will be taking a number of these sections to deep dive on topics that I will introduce shortly.

So let me start with IonQ's proven quantum leadership. And this is not only on the computing side, but also on the networking side. We're going to hear a fair amount about the networking business today. The last decade, we've accomplished a lot, just like we've accomplished a lot in the last 30 years, and we will accomplish even more in the next decade. I'd like to remind people that we've been thinking about this and working on this longer than anybody else.

And you can see it in the time line. Our machines powered on 8, 9 years ago. Our machines were the first on the public clouds. We were there at our IPO. And as you look forward, in the last five years, we've kept up that incredible momentum. We have demonstrated Quantum Advantage twice this year with partners like NVIDIA, AstraZeneca and Ansys. So what we've been doing in the last decade, 2 decades, 3 decades, it is challenging.

But because of the pathway that Chris Monroe picked for us so long ago, it has really been an engineering challenge that we've been able to prosecute relentlessly.

I'm very proud of what we've done in the last year and what we've done in the last 10 years. Many of you probably saw our press release this morning. We have relatory approval for our Oxford Ionics transaction. You know that we have large partnerships with key government partners such as the Air Force Research Lab. You know that we've been building our patent portfolio since IPO. When I met our friends at IonQ 5, 6 years ago, I think we had about 35 patents. Today, it is 1,060. So it's an impressive mode for us, not just on the computing side, but also the networking side.

Chris Ballance is going to talk a little bit later on about the fact that error correction is only something you do when you don't have good hardware. And it's a great phrase of his and Chris Monroe's for that matter. We hold all the fidelity records. So we haven't had to do a lot of error correction, so we've been able to have machines that work before everybody else.

And this merger with Oxford Ionics has given us a road map to continue to not only lead the industry but extend our lead. You'll hear me say this a few times today, but we believe we have a 5-year lead on our technical road map over any competitor.

In a moment, you're going to hear from my colleague, Dean Kassmann, who'll talk you through the exciting news that we've made great progress on our 100-qubit, a KISTI [ 4 ] system, who's prototype in our lab here in College Park is, believe it or not, 36 quadrillion times larger as a computational space than any system IBM has publicly unveiled.

I thought there was a typo, the first time that came into my inbox because I've never seen a number that large in my professional career. I've done 14 public companies. But that actually is correct. And it's very impressive, and it's a massive testament to our leadership position and how we continue to prosecute it.

Last thing I'll say is we're the best capitalized company in this sector. And we believe that, that capitalization allows us to drive growth vectors in computing, networking and of course, not just on the ground, but up in the heavens, as you've seen us do.

So this transaction has been approved, as I mentioned, it is likely to close relatively soon. There is a state visit upcoming for President Trump to the U.K. next week, and we very much hope to be a meaningful part of it.

What I love about IonQ's technology is that we are the best solution across every unit economic vector. I think some of you have heard me say this probably on analyst callbacks and investor callbacks. We abbreviate Quantum Computing and Quantum networking as our key business product families, QC and QN. We're very clear that computing revolutions are one by lower unit economics, driving mass market penetration and, of course, miniaturization and shrinking the footprint.

We're the only company that has a pathway to only have done that the last decade but to continue to do that. So for us, QC stands for quantum computing. Pretty much everybody else who's in the quantum computing space and say they're a competitor of ours, believes that QC stands for quantum construction. They talk about machines that are the size of the football fields, they cost billions of dollars and that we'll need their own small modular nuclear reactors.

That is never the future of computing. It never has been. It never will be, particularly in a world where sovereign systems are the name of the game and the name of the day. Everybody wants their own. They want to control it. They want it in their basement. They want it near the front lines if that's pertinent. And sovereignty is something which is a positive tailwind for our company. If you think about everything we do here, quantum computing, quantum networking on the ground and the heavens, sovereignty is very much something -- sovereign systems that we are delivering in the geopolitical climate, which favors this globally.

So we're lower power, we're lower footprint. We're definitely much lower cost. And you'll hear more about this from Dean in a moment. We have validated that our cost of goods sold is under $30 million for a fully fault tolerance system that has 2 million physical qubits. There's no one else in the space anywhere near us. They are orders of magnitude, more expensive, less powerful. And my favorite part is they won't get there for probably five years after us.

So one of the largest leads I've seen in the tech industry in my career, which leads me on to this. I will leave my colleagues to deep dive on it. About 36 quadrillion times larger in the computational space is where IonQ is versus IBM.

For those who follow the news, there have been flashy announcements from players like Microsoft and IBM in the last six months. If you read the whole articles, you'll note that they are accurate usually towards the end of the article, when they will say things at Microsoft like we've only really built one prototype qubit, three or four times and the machines never turned on. The machines never turned on, right? Most of our colleagues and founders at IonQ will tell me generously that Microsoft might be where IonQ was in 2001.

But I have other colleagues like Rick Muller, who joined us from IARPA and has worked in the government's Quantum programs for, I think, 26 years, who will tell me that they're not even in 2001.

This is an astonishing leadership position, don't listen to the fake news, I'd like to call it, that's out there, listen to the facts for sure. It's easy to get a splashy press release when you have a $4 trillion market cap. But when you double click on what people are actually doing in the sector, they are all a long way behind us. And the reason they're a long way behind us is they didn't start anywhere near as early as we did. They didn't pick the right path and most importantly, they didn't power on early enough. And by the way, most people haven't powered on really other than IBM or IonQ for that matter.

So here's where we are today, and it's only going to accelerate, hence, forth. And this is something that I think most analysts and investors don't always get their head fully wrapped around. The verticality of advancement for our company's computing power only gets steeper and steeper every generation from here. So as we add logical qubits because of the double exponential nature of this, you will see that the quadrillions become quintillions and septilions and beyond until we'd probably run out of the metric sure for it.

So let me spend a couple of minutes talking about the next decade. As many of you have heard on my last earnings call and most of our earnings calls, I'm a big believer that by forward investing in the world's greatest talent, we are able to not just continue prosecuting our leadership position, but able to very much extend it. So I'm deeply proud of how well we've done on this metric. We've not only added people like Dr. Chris Ballance, Dr. Mihir Bhaskar, Dr. Chris Monroe is spending a lot more time with us, and I hope to get as much of his time as will give me.

We've got Marco Pistoia, who's joined us from JPMorgan, where he previously ran research the largest bank in the world. Rick Muller, I mentioned. You'll hear more from him later on today, as you will, from Robert Cardillo, who served in multiple presidents, administrations last decade running the National Geospatial Intelligence Agency. These fine folks are not only driving technical acceleration for us but also driving commercialization advantages.

And you all have seen earlier in the week, we talked about the launch of the new IonQ Federal Board and our ability to assemble fantastic experts, not only in the engineering and the physics space but also commercially to support driving our nation's national security as well as national economic security. And for that matter, our nation, the Five Eyes, NATO and so on radiates outwards.

So what does the next few years look like on the technical road map? Well, I mentioned that it gets more and more vertical and that's absolutely true. We struggle, honestly, sometimes to think about how we're going to present this in meetings like this because the double exponential nature is very difficult for people to grok, right?

If you think about the compute power as growing effectively related to the exponent of the number of logical qubits, you can see that things get really powerful by '27 if not '28. And they get so powerful that you start to unlock a large number of applications, algorithms that have been postulated in many cases for decades. All of these algorithms have tremendous implications for, of course, national security and national economic security, and of course, quantum machine learning and Quantum AI, which we'll talk more about later this afternoon.

Our acquisition of Lightsynq was important for us strategically. And one of the things I am keen to impress upon everyone in the room today is that not only have we won the last decade and will we win the next decade, but we've also already thought about where we're going further out than that. We're extremely confident that the next five years will be owned by IonQ just like the last five years will be.

But beyond that, in the 2030s, we already have a plan on how we are going to build data center scale quantum computers and how we'll be able to continue driving growth, not just the 80,000 large qubits but beyond. We're not going to stop here, right? There's another 5 years to come after this, where we may end up having as many logical qubits as we have physical qubits, for example, in 2030.

So when players like IBM say, the day after we announced this road map that they will have 2,000 large cubes in 2033, so roughly the same number we have in 2028. You can be darn sure that by 2033, we won't have just 80,000 logical qubits but beyond. We're not going to stop here. right? There's another five years that come after this where we may end up having as many logical qubits as we have physical qubits, for example, in 2030.

So when players like IBM say the day after we announced this road map that they will have 2,000 logical qubits in 2033, so roughly the same number we have in 2028, you can be darn sure that by 2033, we won't have just 80,000 logical qubits, but a bigger number than that.

And we're doing that with Lightsynqs, quantum memories and quantum networking. And you can see when I look at the analog of Mellanox and NVIDIA, how important those data center scale, value creation events, of course, are for companies.

One of the things that runs around our ecosystem and the news is this notion of quantum advantage and when it is happening. We're here proudly to say that IonQ is the first company in the world to delivering quantum advantage and quantum commercial advantage. And we're delivering it already right now. We've delivered it with Ansys back in March at NVIDIA's PTC event. We delivered it again on June 10 at the GTC event in Paris.

And you'll notice the total change that Jensen has had in the last nine months, right? We've driven almost all of that change because they've been a partner of ours, obviously, in making fast progress on things like computational drug design.

When you deliver a 20x speed up and NVIDIA and AstraZeneca are the partners on AWS, they can't claim that, that's not a real thing, right? And turning a month of work into a day is just getting started for us, right?

We ran that on our #AQ 36, systems Forte Enterprise that was really last year's technology. Next year's systems are something like 240 million times more powerful right? 2 to the 64 versus 2 to the 36. so that number is going up, right? Exactly how much, we'll see, but the number is going up. I will point out that if you read Martin Roetteler's blog post after we put out the 20x speedup announcement, I believe the quantum speed up in that partnership with NVIDIA and AstraZeneca was actually something like 648x, and they sort of brought down the average of the classical workflows either side of it. It is not an exaggeration to say that in the next generation of our systems, we may well turn a year of work into a day on a number of problems.

And if that's not true quantum advantage, I don't know what is, quite honestly, right? So IonQ is the only company delivering quantum advantage today. We're doing it in a range of industries, and we will continue to accelerate from here. I'm going to show you a visual here, which some of you might have seen but it's our best stab at showing you the extent of IonQ's lead. This is where we are at the moment. This is where we're going in the next year, where we're going in the next year and where we're going to finish the decade. This is effectively a chart that has been scaled on the Y-axis so that you can at least get some sense of how far ahead everybody is, but we're scaling here, obviously, with the number of logical qubits versus our competitors.

And you can see that it really isn't even close. The reason logical qubits are so important is I think of the analog between a number of metrics that quantum computing venture-backed start-ups like to quote other than logical qubits. And it's really like how high a skyscraper can you build? We build ours with steel supports. So we know we can go to thousands of stories. Everybody else is playing around with wooden frame structures. And it doesn't matter how quickly you can put up a wooden frame structure. As New York has demonstrated over the last century, you are not going higher than 12 stories. So logical qubits are what unlocks applications, unlocks value add. right?

And so our -- effectively, our exclusive advantage here is in our ability to unlock more problems sooner than everyone else, drive that customer ecosystem and drive that longer-term customer lock-in. We'll hear more about applications with some of my colleagues later today. But goodness, we have a lot in the works. And this is a lot in the works that we've already identified and already started working on. As I think everybody knows, most of the value that comes from quantum computing and from computing revolutions in general, tends to be emergent, right? So if you think about where NVIDIA was as a business a few years ago, it was just a gaming company.

They made graphics processing units for the PlayStation 2, right?

Obviously, they figured out they could do some other stuff with that, right? The same thing is likely to happen here. But because our machines powered on eight years ago, because they were on the cloud five years ago, Dr. Chris Ballance, when we announced our merger, told his team something that also made me smile, which is IonQ's machines have been operating in the public cloud longer than we've been incorporated. And it's a serious point, right?

A lot of people have looked at IonQ's leadership and success and gone, I'd like to back a venture company and hope that I can get an exit somehow. And the reality is because we powered on first, we were on the cloud first, because we've delivered early quantum advantage first, we have a software stack and applications that enable us to deliver applications today and last year and the year before and the year before.

And we also are able to manufacture our machines and ship them around the world, and we do that all the time. And so the algorithms we're working on will all drive value for our company. There will be a lot more value, I'm pretty sure that will come from quantum machine learning and Quantum AI. And the sky is limit on that one because we use about 1/10 the power of classical GPU, data center AI setups. I have to believe that due to cost alone, that is going to be extremely compelling aside from the fact that we probably can't have half the grid going on Microsoft recommissioning in Three Mile Island and all that stuff.

That's a practical concern, too. But on cost alone, Quantum AI is going to be really compelling a few years out. I'm going to close this section mentioning our quantum networking business, which I hope everyone in the room gets to spend a lot of time with Jordan Shapiro and Gregoire Ribordy, who are with us today. Marco Pistoia is also a foremost authority on Quantum Key Distribution. And this is what I'd like you to hopefully all reflect and integrate into your thinking.

Quantum distribution and quantum networking is not just something for the future. It's something for today because classical cybersecurity challenges only continue to be nastier, nastier, more pervasive, right? The old adage that there's only two types of cybersecurity issues, right, the ones you know about and the people inside your system that you don't know about, right, continues to be a challenge for corporates and nations alike. There is nobody that wants to get hacked, but there's a lot of hacking going on because people are downloading now to decrypt later.

And they're doing that because nation states know that they will eventually probably have a quantum computer that can decrypt RSA 2048. The beauty of our quantum networking business is that it is not just practically secure, it is theoretically and absolutely secure. As Marco Pistoia likes to say, even in 50 years, you won't be able to crack our quantum networking solutions. And so companies who work with us, you can spot because they are not in the news for data breaches. And governments who work with us, same thing.

And obviously, banks and telcos are realizing that QKD and quantum networking is vital not only for their business next year and the year after, but their business right now. It's also vital to the future of the quantum Internet and vital to the future of quantum network computers. And so what you'll see today is the fantastic synergies amongst our business lines, right? We cannot only do QKD on the ground with terrestrial networks that are now much larger in potential reach because of our Lightsynq acquisition.

We could actually build a nation state sized and even international QKD network and Quantum network when we want to. You're going to see that we're able to do that from ground to space, space to space and space to ground. We follow our customers. It's something that banks and telcos worry about and of course, governments.

And we're already the company that I think it's safe to say, the only company actually that can do quantum computers that are networked together using secure quantum communications. So we are planning for a bold grand future here of not only selling sovereign systems, but being able to quantum network those sovereign systems, being able to allow quantum communications and the quantum internet. And I look forward to taking questions in a few sections here.

But very much, please store them up. We are building a business which is great in its individual capacities, but even more powerful in its whole. Without further ado, I'm going to pass you over to Dr. Dean Kassmann to talk a little bit more about our quantum computing road map.

Good morning, everybody. Thank you for joining us today. I'm super glad to see a lot of familiar faces as well as new faces in the audience. I want to start this morning to dig into a little bit of our technology and talk about our products. And so a big differentiator of IonQ is the fact, as Niccolo said, we have many generations of commercial systems that we've been putting out into the market for some time right?

We've been building them to be enterprise grade, scalable, high performant and solve customer applications. Now we've been doing this since 2019. Our first inaugural system was Harmony. That was followed by our Aria systems. That was the first system that we got on all three major cloud platforms. So that meant software development, integration work and being able to actually start running 24/7.

That was followed by Forte. So Forte became and has become our major workhorse in terms of our early application development. A lot of the early results that we've published have been on our early Forte Enterprise systems -- or sorry, Forte systems. Forte Enterprise, we released that is our data center compatible system. We have multiple instances of Forte Enterprise that we're currently building. We have instances that have been deployed that are currently running customer jobs. A lot of the current research that you see published on IonQ systems is on Forte and Forte Enterprise. Now we have Tempo, which is in active development.

Those systems have been being built for the last year, the design, engineering, all that work. The Tempo system is 100-qubit system, 99.9% fidelity capable of running #AQ 64 benchmarks. That system is going to be deployed next year. Now the tempo system underneath the hood is supporting mid-circuit execution, dynamic -- or mid-circuit measurement, dynamic circuit execution that are needed capabilities to do quantum error correction demonstrations and all of the underlying hardware.

The Tempo system also has a move from our past terbium species to now barium. That barium gives us larger uptimes. It allows us to do many different kind of atomic protocols that at the end of the day, regardless of underlying physics result in more performance for the customer, a higher set of [ 9s ] and so the overall laser system development and everything else that's going into Tempo has been a step change in our underlying technology.

We have our Oxford Iionics 256-qubit system right around the corner. That has been in play for a while, right? We've already started integration work. We'll talk a little bit about some of that a little bit later. But we've been doing this for a while. The muscle and energy that we put into it is significant. Now that energy and muscle, to give you the best analog, if you were to think about like other players in the market that are producing and designing the software stack, the hardware stack.

If any of you have ever -- many of you have taken a plane to get here, how many of you would actually take a vendor? It's the first plane they've ever built and you're going to get on it for the very first time to do something useful, fly somewhere. None of you would do it. It's just not -- it's not realistic. You're going to trust the plane that is flying every day has been put through the wringer because flying is learning, right?

We've been doing learning for a large amount of time. And so our systems over time have been used. We've been kicking the wheels. We've been changing the underlying technology, but we've been delivering across that time frame. So I want to talk a little bit about the software stack as well. So in addition to the hardware development, we have been driving the software from the ground up to the FPGAs, the system on the chip software, all the way up to our cloud integrations, right?

That's pilot circuit optimization, our controlled and scheduling. All of that software stack is built in-house with amazing capabilities. We have back-office capabilities for users, account keys, all of the different infrastructure that's required to be able to run a 24/7 operation. Now that also includes applications. All of the infrastructure required for being able to do session management, being able to drive hybrid workflows is all there as well.

Now that -- and my colleagues will a little bit later talk about networking feeds into our networking capabilities. And so -- we have been driving the software and the hardware for a significant amount of time, and we're going to be continuing to leverage that as we move into the future. I want to shift for just a second into some of the benchmarking work and kind of give you a quick update.

If you remember, we have been anchoring the IonQ road map against a benchmark called algorithmic qubits for a while. That benchmark is intended to measure the number of useful qubits that you can use in the system. Now it is based off of work done by the Quantum Economic Development Consortium, QED-C. It is comprised of six different circuits in across three different large families that include optimization, simulation and machine learning.

And so the measure of the benchmark is intended to be able to kind of measure the width or the number of two-qubit gates you can execute in applications as well as the number of qubits that are actually useful. And it's a measure of hardware and software. And so we have prototype results from one of our development systems for Tempo, and we are able to demonstrate #AQ 64 in that development system. We still have additional work to go to fully check the box, but we have very promising early results.

The plot there on the left is an example of those results. Blue dots represent the ability to not only execute the circuit family, but get meaningful results out of it. If there were red dots or orange dots, that means that the outputs from the quantum computer, one either are not accurate or are close to the quantum noise. And so I want to do a little bit of a comparison.

Over time, as we've run comparison benchmarks across the world, IBM right now on their 150 physical qubit system is seeing roughly 8 to 9 usable qubits. This is the 36 quadrillion times more useful computational space to actually do work, right? And this is on development hardware at the moment. It's going to be even more exciting next year as we continue to drive fidelity and drive hardware.

Now -- we know that AQ is a benchmark. It's been out in the market for a while. We've talked at the early -- in the Q1 earnings call about being able to replace the benchmark, not actually replace, but augment the benchmark with additional items that we're hearing from customers. And so you're going to hear later about the importance of fidelity, the importance of physical qubit count, logical qubit count, error correction rates. And so those physical benchmarks, we're going to start to, I would say, solidify and communicate more broadly.

We're also investing in application benchmarks. You'll hear about that as well. The importance of the application benchmarks are really focused on specific vertical industries, chemistry, logistics. And so you'll hear a little bit about that later. And those metrics are going to be things about what customers care about, which is energy usage, cost dissolution, accuracy. And so you'll hear about that from our leaders of product a little bit later on. Now I want to quickly before I end, talk about road map.

Now we published a technical road map. It is the most aggressive and forward-looking road map that is out there. We have an ability to deliver by the end of the decade, 2 million physical qubits. As Niccolo said, it is literally five years ahead of everybody else. Next year, we'll have 256, the year after 10,000, right? That physical qubit count, logical qubit counts and the error correction rates are better than any other competitor that we have out there.

So I just want to leave you with the fact that if you compare the numbers published by our competitors and others, we are right now literally five years ahead. The early results that we have are showing that we have a system capable of a 36-quadrillion, I would say, more advanced computational space, and we have the best unit economics.

I'm going to hand things over to Dr. Chris Ballance from Oxford Iionics to kind of double-click and go deeper into the unit economics and some of the technical details that are underpinning our road map. So I welcome Chris Ballance to the stage.

Thank you, Dean. So I'm Dr. Chris Ballance. I'm the Co-Founder and CEO of Oxford Ionics. So Dean has just told you how ambitious our road map is. I'm going to tell you the underpinning technology behind it that allows us to achieve this, allows us to achieve it faster than anyone else and allows us to achieve it with better unit economics. So there are two key ingredients to scale quantum computers, size and performance.

So size is the number of qubits in the system. This is a necessary but not sufficient condition to do useful things with quantum computers. Every time you add a qubit, you increase the computational state space. So this is where you get this exponential increase and powerful. But that's not enough. You also need qubit performance to unlock this potential. And if we look at the map of the market, we see that the big differentiator across the market right now is the performance of the qubits. This is where there are orders of magnitude and difference between different players.

Also, what we see if we look at this map of the market is that all of the highest qubit performance players use trapped ions. This is because they're natural qubits. You don't have to manufacture them. And this means that you get better qubit performance potentially and much longer coherence times. You don't have to manufacture them. That makes life a lot easier. The other thing you can see from this is that Oxford Ionics has qubit performance that's substantially better than anything else out there using our electronic qubit control.

Last summer, we demonstrated a qubit fidelity of 99.97% on the most stringent test, the 2-qubit gate fidelity. And as Niccolo said, this is a 1 plus 1 equals 10 kind of deal. And I think this explains in a visual metaphor why that is. Taking Oxford Ionics' electronic qubit control technology, where we have these incredibly high qubit performance and merging this into IonQ's compute platforms allows us to scale faster using the best qubit technology out there, way ahead of everyone else in the market. But why does qubit performance matter so much?

So it matters because it allows us to deliver value to customers sooner. And it matters in two different time scales. The first time scale is right now, improving qubit performance right now allows us to achieve more with the platforms we have. This is why, as Dean was talking about the #AQ 64 work. This is why despite IBM having more qubits, they can't run anything like this size of problem. They have the qubits, they don't have the qubit performance.

But it also matters in the long term as we start using quantum error correction. So this allows us then to achieve and unlock value faster. And let me explain why. So quantum error correction is a software solution to errors. It allows us to take lots of low-performance qubits and make fewer high-performance qubits. But this is not a free lunch. It's a software solution to a hardware problem. If you build better hardware, you need to do less error correction, which means you need way less overhead.

If you look at the long-term scaling of an industry standard process, what you see is that as you add the number of qubits, the computational power increases exponentially. But if you have higher performance qubits, if you have lower error rates and if you have good error correction architectures, you can unlock a lot more compute power with the same size scale of device. Because we have fewer errors to correct, we can get far more useful qubits out. And to put this in context, let's look at our 10,000 physical qubit device.

This is our 2027 road map target. If you take those 10,000 physical qubits and assume they're in a competitor's device with best of the rest qubit performance and you assume they use industry-leading quantum error correction, those 10,000 physical qubits go to something like 41 logical qubits. If you take 10,000 physical qubits in our platform, where we have much better qubit performance and architectures that allow us to very efficiently quantum error correct, that can take us to 8,000 -- sorry, 800 logical qubits.

So this is 20x better on the same hardware platform. So this allows us to unlock value, unlock much more value with the same physical platform. And equivalently, this allows us to unlock value earlier because we unlock certain thresholds of compute power years earlier on our road map. And now I can say that we've broken our own record. In a device like this, which you can see out in the lobby afterwards, we previously demonstrated 99.97% 2-qubit gate fidelity. In our new platform, we've shown that we can achieve over 99.99% 2-qubit gate fidelity.

So better qubit performance is better. I hopefully have convinced you of that. But this is a particularly special threshold since this is a threshold that all of our long-term scaling road map is based off. Now we've achieved 99.99% 2-qubit gate fidelity, which is the most stringent measure of performance in these computational systems. We don't have to make any further improvements to this benchmark all the way to scaling out to millions of qubits.

Everyone else in the industry is still doing basic science, still doing R&D, trying to achieve our long-term road map targets. We have now delivered that. And the technology behind all of this is electronic qubit control. This is our secret sauce. So what this allows us to do is control qubits using electronics rather than lasers. And this is good because it allows us to integrate electronics into the chips. And with that electronics integrate into chips, we have an incredibly scalable platform. We can use a standard semiconductor supply chain. Because electronics allows us to get incredibly well-tolerant signals, this allows us to then get these world-leading fidelities.

At the same time, because we can efficiently parallelize things on individual chips that we build out, this allows us to run our computations fully parallelized. And what this allows us to do is get the fastest time to solution of any platform like this. And finally, because we're leveraging the might of the standard semiconductor supply chain, this is mass manufacturable. We're already producing these devices on standard semiconductor fabs alongside chips for laptops, cell phones, high-performance computers with our manufacturing partner, Infineon.

We produce multiple generations of devices on standard semiconductor fabs. And it's this combination of using the silicon and existing standard semiconductor supply chain that allows us to scale so fast. And it's because we can scale quantum computing the semiconductor way. We build out individual unit cells, elements on chip that allow us to control our qubits. And then we can build out larger and larger platforms by tiling out these elements.

So we can scale by replication rather than by reinvention. And when you put this all together, we can do the same thing. We can just crank the handle and scale all the way from these 256-qubit platforms that are on our technology road map for next year, all the way out to millions of qubits. But of course, having the best qubit performance, having the most scalable technology platform, that's necessary but not sufficient for winning the race.

You also need to have, as Niccolo said, good unit economics. We now have the best-in-class economics across the quantum industry. If we look at the BOM estimates we have, the bill of materials, the parts costs, what we see is that for our 256-qubit product, we expect to use low single-digit millions of dollars of parts. And this doesn't increase fast. As we go out to 2 million physical qubits, we can do this with low tens of millions of dollars in parts.

This is in comparison to our competitors. You need to use incredibly precise foundry fabrication, nonstandard, you need to use incredible cooling power and building things the size of warehouses. The estimates there are billions of dollars. Let me say that again, for low tens of millions of dollars, we can build platforms that competitors' parts costs are measured in the billions.

This combination of cheaper performance, scalability and unit economics is what's going to allow IonQ to maintain its market-leading position across all epochs of the quantum computing revolution. Thank you. I'm now going to hand over to Dr. Chris Monroe.

Good morning. I'm Christopher Monroe. I'm a Co-Founder of IonQ, and I want to spend a few minutes talking about scale, expounding upon what we heard from Dean, Niccolo and Chris -- Chris Ballance. I want to talk from a very low level and also a high level. And at the low level, IonQ technology, the transistor, if you will, of our quantum computers are based on individual atoms. And because an atom of barium 133 is the same in New York as it is in London, the recipes for scale are already at hand.

We don't manufacture our qubits. They're given to us by nature. And it comes down to -- I don't want to simplify and say it's just engineering, but I was -- I've been in this field for 30 years to de-risk the physics of our qubit. We never think about the physics of the qubit. It's there. And it's a question of scale and how you engineer.

And I think when we founded IonQ, the physics had been thoroughly derisked. But I will admit when IonQ started about 10 years ago, we didn't know exactly the technology that we would bear to allow us to scale. And I think we saw one example of a technology that Chris Ballance presented, in Oxford Ionics that will allow us to continue to scale. But I think one thing that's very important, and this we learned in classical non-quantum computing is that -- to scale something, it needs to be modular. That's probably true of any complex system. Everything that's complex needs to be modular.

We don't make a football field chip and call that a computer. We make a bunch of little chiplets and link them together and, say, a data center. And this backs sort of what cloud computing is today. Now IonQ would not be a company if we did not have a vision for a modular way to scale our quantum computers. And while I've been in the field for 30 years, about 20 years ago, we figured out a way to do this using photons, optical connections between quantum computers, very similar to what you see in modern data centers.

And once again, this was very researchy in 2007 or 2006. The research labs at universities were really the state-of-the-art, my lab and also incidentally that of Chris Ballance at Oxford. We sort of knew that this was the vision forward. We didn't know exactly the technology that will come to bear to make optical interconnects fast and high fidelity.

And as a wonderful next example of new technology coming to bear, we -- IonQ merged with Lightsync in order to hasten the speed of optical interconnects and allow us to scale in a modular fashion. And one of the stars in that field is Mihir Bhaskar, who I'll introduce next. He'll tell you a little bit of the story on how we hope to and how we will optically scale our quantum computer chiplets. So Mihir?

Thank you, Chris. So by way of introduction, I'm Mihir Bhaskar. I lead IonQ's distributed computing efforts. And before IonQ, I was CEO and Co-Founder of a start-up company called Lightsync. And before Lightsync, I, for three years, founded and led AWS' quantum networking efforts. And I want to take the analogy that Chris pointed out a little bit further because when I was at AWS, I saw this happen firsthand. In between 2020 and 2023, the data center was being overturned so that the new hardware that was going in could support the AI revolution.

And we all know the company that was really behind a lot of those developments, which was NVIDIA. And as Niccolo mentioned in his opening remarks, their core technology was a GPU, a different type of computer. It was good at solving problems that were hard for CPUs. It was being used by gamers. It was being used for image processing tasks. It was being used by researchers at the time running small-scale early AI workloads.

And Jensen had the foresight to realize that he had to invest in a technology and platform that allowed for mass proliferation of GPUs at data center scale. And so in 2019, NVIDIA acquired a company called Mellanox. Mellanox pioneered a standard for networking called InfiniBand, which was a replacement for Ethernet connectivity, which is just too slow to connect GPUs together in a data center. And so fast forwarding today, we can see that's been a very accretive acquisition for NVIDIA.

And it was really the thesis and the inspiration for me and my co-founders to found the company Lightsync, to take the ideas that Chris Monroe had pioneered in the early 2000s about how to connect quantum computers and how to build new technology to make those connections fast enough to actually scale out in the data center. And so the parallels coming together between IonQ and Lightsync really align with that of NVIDIA and Mellanox. So I want to get a little bit more technical about how this actually works. How do we actually build faster interconnects.

And to do that, we need to think the way that Dr. Monroe originally conceived of doing this, which is by taking two of these ion traps, having them send very, very weak optical signals known as single photons from each trap and combining these signals at an intermediate detector.

And if both of the photons arrive at the detector, then you've established a connection. But in the real world, you have massive amounts of losses in optical systems, which throttle your overall networking speeds. And so that's why it makes it very hard to build a quantum interconnect that's fast enough to actually connect quantum computers together. And so the technology that we've pioneered at Lightsync and have brought to IonQ is based on quantum memory.

It's very simple. It is a buffer that allows each quantum computer to communicate with the network independently. And so it gets rid of this challenge of having to have multiple photons arriving from multiple quantum computers at the same time. And so with the quantum memories that we're bringing to IonQ, we expect we should be able to speed up interconnect rates by up to 50x. So this is the type of generational leap that we see going from a technology like Ethernet to InfiniBand and is more than enough to begin connecting quantum computers together in a data center.

And so it's all great to have these figures in PowerPoint. I do want to emphasize here to those of you in the audience at Analyst Day, this is a real technology. You can see what our chips look like and outside in the hallway. It's a technology that me and my team have been building for many years. We've built multiple iterations of it. And we've already shown that this technology works that when you put this inside of a quantum interconnect channel, you can speed up the rate of this interconnect. So the technology is validated.

And if you get a chance to go look at the technology, what you'll see is a unique confluence of proprietary materials, integrated photonics, optical packaging technologies that are based on over a decade of research that my team has pioneered that exists only at IonQ, nowhere else in any other quantum or non-quantum company. And so to take the 10,000-foot view of how does this bring us closer to actually building quantum data centers, speed is the name of the game. It's the most important thing for connecting GPUs or CPUs in a data center to scale them out.

The interconnect needs to be fast enough to distribute computations across the cluster. And so with our quantum memory technology and with the systems that Dr. Monroe talked about, we actually expect to have the speeds already to start building these first distributed systems. And so I'm very proud and excited to be joining IonQ at this time because I've been in the field of quantum computing and networking for a long time, and we're proud to be the only company that's pushing both computing and networking as we'll hear about next. But these technologies come together in the data center.

Quantum computers and networks really synergize. It is one big network, it is one big computer when you're building a data center. And so with the ability to build and link quantum computers at a fast enough speed, I think coming together between IonQ and Lightsync is really the NVIDIA Mellanox moment that's going to allow us to take the quantum computing technology we heard about in the previous sections and enable it to scale and proliferate really at the large scales that are needed to ensure that we're not just leaders today with the performance that we have, but in every era of quantum computing and networking in the future.

And with that, I mentioned that all of these technologies come together quantum computing and networking in the data center. We'll hear about how we're excited about our quantum networking road map in the next segment.

Thank you, Mihir. Good morning. My name is Jordan Shapiro. I'm the President and General Manager of the Quantum Networking division at IonQ. We are so excited to share a bit of where we are today in the Quantum Networking division and our vision. To start, I'm going to turn it over to Gregoire Ribordy.

Good morning, everyone. As Jordan said, my name is Gregoire Ribordy. I've been in the field of Quantum Technologies for 28 years when I started my PhD at the University of Geneva in Switzerland, and I co-founded IDQ, ID Quantique in 2001. ID Quantique was acquired by IonQ in the first half of this year, and I'm now very proud to bring the solutions, the quantum security solutions that we've been developing with IonQ to a broader market and to make the cyber world a safer place. So there's almost not a day without a major data breach, personal information, government, corporate information is exposed.

Of course, there are several very different attack vectors behind these data breaches, but one thing is certain today. Information cannot be secure without cryptography. You all use cryptography many times a day. When you connect to a website using HTTPS, cryptography is working in the background to protect information. It guarantees data confidentiality and integrity. Now as we see from these breaches, the traditional security is not working. We need to move to a new paradigm in terms of security.

Things are about to get worse. For decades, the security of our national security systems of our global economy has relied on one assumption. The fact that the math that we use in cryptography is too hard to break. However, with advances in the field of quantum computing, this is about to change. With progress in quantum computing, a sufficiently powerful computer, quantum computer, we will be able to break the cryptography that is used today.

And this represents an existential threat to our global economy, to our national security. Try to imagine for a second, a world where state secrets are exposed, online payments, not possible anymore or power grids remote controlled by hackers in foreign countries. It's not exactly clear when this -- such a powerful quantum computer will be available, but it may be as close as a few years. And it's now the time to plan and implement a major quantum-safe migration.

It's all the more important that data could be vulnerable to a so-called harvest now decrypt later type of attack. Hackers could be intercepting encrypted data today, storing it until a quantum computer is available, sufficiently powerful is available and then decrypting information. One solution to address this threat is to rely on physics instead of mathematics. Of course, with mathematics, calculations get faster and faster, but the laws of physics are set in stone.

And quantum key distribution is about using a fundamental principle of quantum physics, the fact that a measurement causes a perturbation to protect information on networks. So on this slide, I'll try to explain the principle of quantum key distribution. Alice -- so there's this convention and cryptography that Alice is talking to Bob and Eve is trying to eavesdrop. Alice sends information in quantum using a stream of individual light particles, so-called photons, and she encodes the bit values on these photons.

Bob will record these photons using single photon detector, special components. And if Eve in the middle is try to intercept this stream, she can do that without leaving a perturbation. And Alice and Bob can then detect this perturbation. It's also important to understand that we don't use this technology to directly protect information because if we did that, we would know that we've lost information after losing it, and that's obviously not the goal.

Instead, we use it to send a key, a sequence of random bits and then we use this key to encrypt information that needs to be protected. We heard already today that quantum is now. And to prove this, we've brought a demo that is in the back of the room, and I really encourage you to come see the demo after this show. On this demo, we'll show you two things. First, the fact that classical communication can be hacked without leaving any trace.

On this screen, you see two PCs on the left and on the right, they send -- one PC sends a stream -- a video stream to the other PC. And in the middle, we'll show you that there is -- if you put an eavesdropper that taps the optical fiber, this eavesdropper can collect the video stream without any detection. Now in a quantum world, things are different. And we're going to zoom now on the monitoring screen of the QKD system.

And on this monitoring screen, you see on the top left, a measurement of the disturbance of the photon stream. And so it's low. It's a few percent now when we start. But if Eve starts to eavesdrop on the communication, a perturbation will be caused, as you can see now, and an alarm will be triggered. Alice and Bob, the emitter and the receiver will be informed of an attack and we'll be able to react. Of course, when the perturbation -- when the interception stops, the system goes back to normal operations. Again, Quantum is now, and we're delivering solutions, Quantum key distribution solutions.

You can see one of our solutions, the 1U rack. This is our fourth-generation system, and it has a high technology readiness. It's manufactured in batches in our ISO 9001 certified facilities and very important. In security, it's always important to have independent testing and evaluation. And we were able with this solution to obtain the world's first security certification from the National Security Research Center in Korea at the beginning of this year.

And we're working with several other regions or countries to extend this certification. This solution is used more and more with the increasing awareness of the quantum threat acceleration is -- adoption, sorry, is accelerating. And the solution is used by Tier 1 banks, telecom operators and government customers worldwide, as an example, to secure data center interconnects.

It is also used in some -- several of the more than 40 quantum networks that are in operation worldwide. For example, in Singapore, Singtel is using it in its quantum safe -- national quantum-safe network to provide quantum security as a service. In Korea, SK Telecom has used it to secure its 5G backbone against advanced attacks.

It's also important to understand that this solution is easy to integrate. IT engineers don't need a PhD in quantum physics to be able to install this kind of solutions. It's typically deployed as an overlay to a conventional network, and it integrates seamlessly with classical telecom equipment vendors such as Nokia, Ciena or Cisco. I will stop here. I'll pass the word to Jordan Shapiro now, but I'd like to remind you one more time to come see the demo after the show. Thank you very much for your attention.

Thank you, Gregoire. As you've heard from Gregoire and Chris and others today, when IonQ was founded, we had the vision of scaling our compute with modular architecture based on photonic interconnects. What we didn't know at the time, but soon realized is that customers came to us wanting to purchase not just quantum computers but also quantum networks. What we thought was at first an anomaly quickly became a trend, which encouraged us to expand our business to quantum networking about two years ago and earlier this year to formally launch the quantum networking division.

So what are we doing at the quantum networking division at IonQ? We deliver commercially ready quantum networks, securing the world's critical infrastructure and setting the groundwork for a vast interoperability between quantum devices. We specifically build production-ready networking hardware and software, which allows IonQ to be uniquely situated to transmit quantum information from point A to point B.

We're also compatible with existing telecom fiber, so we can embed ourselves into current data centers for AI and otherwise and to lay the groundwork for the quantum data centers of the future. So let's talk a little bit about the devices that we build in the quantum networking division and produce today. We have the leading technical, manufacturing and commercial capabilities in the industry here at IonQ, which has allowed us to become the one-stop shop for enterprise-ready quantum networks worldwide.

Here's a quick overview of those products. First, we create photon sources. We're creating the core connection that allows one quantum device to interact with another. We also build quantum frequency converters, allowing different types of devices, any type of quantum device to interact with the same network using commercial fiber. We build quantum detectors to allow us to know when entanglement is happening and to use that to make decisions for applications ranging from computing to networking and communications.

With the addition of the new Lightsynq technology, the quantum memories, we are able to build quantum repeaters. This is relevant for networks that are on the ground because you can now extend that network further than you would otherwise be able to do. We also provide quantum switches so that our customers can choose which devices they want to interact with on their quantum network. And some of those devices might include quantum computers.

So we envision a world in which quantum computers can interact with each other, enabling new use cases everywhere from clustered to distributed quantum computers. Moreover, -- we build and offer timing synchronization devices, which are key for building quantum networks. So we make time controllers and time taggers allowing for precise coordination of different devices that you're connecting. Last but not least, we offer quantum security endpoints.

Today, we offer two types of endpoints, prepare and measure and entanglement-based. Prepare and measure is in production today with leading telco and financial institutions, as Gregoire mentioned. Entanglement distribution is also in production today, offering in some ways, an even higher level of trusted security because you are able to take the same entangled information and distribute that across multiple cores in your network.

Both of these approaches leverage the core principles of quantum mechanics and physics to make data information theoretically secure, meaning that it can't be eavesdropped on without you knowing about it and being able to fix it. So in whole, we are building the full suite of quantum networking products, which is why we're the one-stop shop. That brings all of these devices together to supercharge data centers today and lay the groundwork for quantum data centers of the future.

IonQ is building the infrastructure for how all quantum devices will connect. But our ambitions lie beyond that. While we're pioneer quantum computing on the ground, we have customers coming to us asking to take quantum networking to the next level, space. Our acquisition of Capella gives us components to advance our efforts to take quantum computing to aerial and space-based networks that are truly global. We can leverage technology like the IDQ Solteris platform to build quantum secured networks at ground stations.

Solteris also allows us to combine quantum key distribution or QKD with post-quantum cryptography or PQC, both of which we offer here at IonQ. We like to say PQC everywhere, QKD where it matters the most. Soon, our Quantum offering will be available for communications across coasts, borders and oceans, thanks to our space technology. Beyond the pure communication use case, we are looking at distributing entanglement globally, and we'll also launch space products there.

We envision entangment being generated and distributed across data centers across the globe to connect a variety of quantum devices, be those computers, quantum communication endpoints, sensors, timing devices, you name it, all globally. And importantly, the quantum networking division is breaking boundaries every single day with our customers. Today, I have the honor of sharing two customer announcements that we've been able to produce with the Air Force Research Lab in the U.S.

First is that today, we've been able to show that in a single quantum computer, we can generate two zones for qubits. One that is a computing zone where you're running complex gates and the second is a networking zone, and we can shuttle qubits from one zone to the other. That computing zone allows us, like I said, to run complex algorithms. The networking zone allows us to take that information and transmit it to another quantum computer, core to what we're trying to do in the networking division.

The second announcement with the Air Force Research Lab is that we've achieved a major milestone to connect our quantum telecom wavelengths to classical telecom fiber. So we've been able to demonstrate frequency conversion from 493 nanometers, which is the wavelength for trapped ion into telecom. This is a major accomplishment. It allows us to put quantum computers onto the network and allows IonQ to be the first to do so. Impressively, we're also taking all this technology and using it in production today with customers.

Customers can go work with EPB in Chattanooga, the electric power board there and use today an IonQ-powered commercial quantum entanglement distribution network. So today, customers can get on to this platform and use our technology live for entanglement distribution. World first. Meanwhile, in South Korea, SK Telecom, as Gregoire mentioned, is securing the nation's data through quantum key distribution.

So this is sensitive AI and customer data, securing their 5G traffic with IonQ. The important takeaways from today on the Quantum Networking division are as follows: quantum networks are here. They're already here. They're securing the world's most sensitive data and IonQ is building the foundation for the world's connected data in the future. Thank you very much.

Now we're going to take a moment for some Q&A. So just to repeat, everyone has a QR code in front of you where you can pose any questions for our presenters. So I'm going to start with a question for you, Dean, which is you presented today that we'll get to 2 million qubits in 2030, and IBM hasn't even announced getting to 2 billion. What gives you the confidence that we can perform -- outperform IBM?

It's a great question. And so if you look at our road map, right? 256 next year, 10,000 the year after, 20,000 a year after, 200 to 2 million, right? The basis for those numbers is not just in air, right? If you think about the integration work that we have in front of us, this is in collaboration with Mihir and the Lightsynq team in terms of what does it take to start integrating the photon collection, the quantum memories into our systems. And you look at the technical kind of wickets we need to go through.

Likewise, if you look at the technology for the Oxford Ionics, you saw the unit cells. You saw that we need to -- the scaling strategy relies on replicating that unit cell, and it goes from our current 1D architecture to a 2D architecture. So the size of the unit cells, the ability to grow the unit cell, the ability to tile those relies on a progressive set of technology maturation increases in die side length.

So at the end of the day, we've built our current technical road map based off a very sound technical reasoning and scheduling that is honestly completely doable and based in kind of sound engineering judgment and planning, right? We don't need miracles to happen. As Chris pointed out, right, we are relying on the power of the semiconductor manufacturing and processing industry, to reuse the existing technology that they're already doing for that kind of unit cell replication. And so from an overall perspective, that 2 million at the end of the decade is exactly on target and exactly just a natural scaling of current capabilities that exist in the market.

And then maybe for you, Chris, what will Oxford Ionics' leverage from IonQ's facilities to build the 256 Q chip?

We use these barring qubits. We at Oxford Ionics is exactly the same qubit, down the number of electrons as IonQ does. And actually, when you look at the bill of materials, when you look at the physical system, when you look at the assembly requirements for this, they're 95% the same.

So this means we can essentially directly put these two things together. The teams are already now starting to plan this out, and we just get direct speed up by doing that. We don't have to retool significantly on this. We essentially glibly put these electronic integrated qubit control chips into the same kind of systems that we already have. And then it's just an integration challenge.

How about the fact that since we're increasing qubit capability so quickly at what level will volume production actually targeted?

That's a great question. Ultimately, what we don't want to be doing is hitting -- having to drive our own volume demand. What we can do is rely on things like the standard semiconductor supply chain, where we already have volume drivers that aren't us.

Other people have already paid to solve the pain and we can just use their learnings. And I can't say enough just how much the semiconductor supply chain is like magic. There's trillions of dollars of investment going in to solve miserably hard problems, which we don't have to solve since other people already have. So for example, the semiconductor processes we use have been developed and matured for decades. We're not having to do anything new there. We're having to do designs, but the fabrication from those, there's already massive economies of scale.

Awesome. Maybe we'll turn to the networking side a little bit. We have a question that asks, could you please discuss how your quantum internet product secures information aside from eavesdropper detection?

Yes. So the quantum internet is a network that allows to distribute remotely entanglement across the network. And if you distribute entanglement, you are able to -- you have strong correlations between two photons. You can measure these photons.

You locally get a random number, but it will be the same random number at the other end of the network. And random numbers are a very important resource in cryptography because they are used to form keys. And so by using the quantum internet, you can establish keys in two locations, a sequence of random bits and then use these keys to encrypt valuable information. There's really this two-step process, quantum communication first and then encryption using keys available data.

Awesome. Another question for you, Dean, to take it back. To what extent is the software vision more middleware versus an application layer centric idea? And how will we monetize it via system sales or discretely?

Sorry. Say the question one more time?

To what extent is the software vision more middleware versus application layer centric? And how will we monetize it, system sales or discretely?

So we've had to invest in the software stack, literally the full stack. It's not just the middleware that we've been investing in to date. We've talked about the need for qubit control at a very low level. That has been a software investment since day 1, right? The capabilities that we have in terms of our qubit control differentiate us definitely in the market.

As you move up the stack and start getting to our OS and the capabilities that it has. If you go even beyond the OS in terms of what we need to do in terms of job management, scheduling, all of those are differentiators for us in terms of what we can do with our systems and computers. And then as you go even further up the stack, you'll hear from Ariel Braunstein a little bit later today and we have investments in our application work, right?

We're building out libraries for chemistry. We're building out other capabilities in the overall I think the -- our fireside chat session, you'll hear Martin Roetteler, who runs our solutions team. The team is working with customers, understanding their needs, taking that learning and reinvesting that learning into capabilities that then can be deployed to other customers.

So -- from an overall software perspective, we are trying to build an ecosystem. We're using customers now. They're getting familiar with our development environments. They're getting familiar with our capabilities.

And just we expect overall customer lock-in over time. The ability to take customers, get them familiar with being able to start running small applications, run larger applications. We've seen this with our work with Hyundai and others in terms of their ability to take early work, leverage that, pass it along to other technical teams within the company and then continue to drive and move forward.

Awesome. I'm going to take it back over to you or side of the room, Jordan, Gregoire. We have a question about why use the quantum internet to connect to quantum computers across the world? What value does that provide beyond building 2x right next to each other? And on a related note, how does IonQ quantum networking fit into the satellite Internet?

It's a great question, and thanks for the question, Hanley. There are many reasons that you could conceivably want to connect quantum computers at a broad distance. And today, the first and foremost reason is just availability. Quantum computers are new. They're coming out at new capability levels, new products. And so being able to reach across the border and in a trustworthy manner, use someone else's quantum computer could be a clear use case.

But in the future, we envision that there might be local reasons that you would want to have a quantum computer, for example, next to a local quantum sensor. And so the lower latency of that sensor and computer being next to each other, let's say, in the U.K., allows them to interact more quickly, allows them to process data and then send it over to quantum computer in the U.S.

So there are many different reasons. The other thing I should mention is an application called Blind Quantum Computing or BQC.

This is an application where you can take quantum algorithm and run it in an abstracted hidden way on someone else's system so that you don't necessarily even need to trust the other person's system.

It's a super secure methodology. It's one that's of interest to governments and enterprises worldwide that we're already working on. And it's another good reason why -- you might want to use some one's system across the world and run a secure algorithm, but know that no one's going to see what the work is that you were doing.

Thank you for that. Could you also expand a little bit on entanglement distribution that we have deployed and the work we're doing there?

Yes. So I mentioned one example of the commercial entanglement distribution network that we have at EPB in Chattanooga, Tennessee. And so today, customers can go online on that platform and start working with entanglement from one local data center to another in Chattanooga and demonstrate secure communications, demonstrate different use cases like QKD, but also experiment with new cases -- new use cases on the enterprise side.

So everything from instantaneous transmission of data to parallel processing across multiple systems. We've also announced that we are delivering a quantum computer to EPB and Chattanooga. So that will be the first site to have a commercial quantum computer and entanglement distribution quantum network co-located. You can envision that there are many opportunities there at the intersection of computing and networking once you have an entanglement distribution online.

Thank you. With that, I think we will take it back to the main agenda for the day.

Hello, everyone. My name is Ariel Braunstein. I lead product and application for the computing side of IonQ. And I would like to start today's presentation by acknowledging how confusing quantum computing industry can be from people from the outside. Companies like oursleves are throwing a lot of acronyms at you and technical specs and companies are talking about accomplishments and breakthroughs and it's just confusing because nobody is talking about how all of these things add up eventually to actual value to customers.

And value in quantum computing outside of research comes from applications. That is the expression of value for customers. And today, I want to try and fix that. So the interesting thing about applications in quantum computing is that every little choice affects application. Every component, every architectural choice, every layering the software that my colleague, Dean was talking about in his presentation, they all affect eventually the outcome of these applications, what makes them viable or not viable.

And all of these outcomes come down to four groups of things that you can categorize. One of them is what we call time to solution. How long does it take for an application to get to a solution. The next one is the accuracy of the solution. Then there is the cost to solution or the energy consumed in getting to a solution. And usually, it's a mix of all four, right?

And to help you understand how IonQ's road map impacts these outcomes, we selected four algorithms. These are not random algorithms. These are milestones in quantum computing. These are main algorithms in escalating sort of level of complexity and demand. And what we are going to do is talk to you about how these algorithms will be enabled by IonQ's technology road map and how does it compare to the known road maps of our competitors to give you a scale of actual outcomes of our choices and the choices of our competitors.

So I will start this slide actually with the conclusion. And the conclusion is that it doesn't matter how you look at it with every algorithm that you test, we end up having IonQ technology, enabling in a more accurate result that consumes less energy, get to the result faster and cost less. But let's look at on some specifics. So the first algorithm that I would like to take you through here in this case is at the top, it's-- in AI, it's called multimodal reasoning. So in this algorithm, again, IonQ is performing faster and consuming less energy and end to end. And in this case, it's 40x faster than the closest competitor that we were able to check.

Next one is image change detection. It's used for satellite imaging. So think about intelligence or insurance industry. In this case, IonQ technology enables 20x less energy. And again, still cost less energy consumption is lower, more accurate and so on. Third, portfolio rebalancing in financial services. Again, IonQ technology, 170x less energy consumed. And last, in this example, Source algorithm, which you might have heard the name, it's sort of the measuring stick in quantum computing.

It's like the ultimate evidence that quantum computing delivers on the vision that it was always conceived. In this case, we predict in the next few years, RSA 2048 and that is used for secure web transactions and the ECC 256 used for cryptocurrency like Bitcoin and Ethereum, they will be compromised. And our technology for this type of work will already -- so again, it will be faster, it will be cheaper and 2.5x lower cost, right?

It is worth noting that if you see the Xs, the red Xs, not every system out there will even be able to run these applications simply based on their stated road maps. These are the public road maps. But we still went through the exercise of evaluating to give them the benefit of the doubt, what if they could get to that scale? How will they perform? And what you can see here, it's simply even if they get there, the disadvantage because of their starting point is very significant because we simply built better foundation, which is everything you heard here and from Niccolo in the beginning.

So let's talk about this foundation, and let's talk about today. How do you compare across these foundations? So the industry and IonQ started this like in the beginning, the earliest days of the industry, spent the last decade building this foundation that we're talking about today. So how do you compare between these foundations across companies? How do you know that our projections for the future are actually going to be there?

Well, the best way is to look at some benchmarks. So let's look at some benchmarks. The first benchmarks, and this is actually running today against the top line of our competitors. So the first one is an algorithm called QAOA. It's a very powerful optimization algorithm that we ran with our partners like Airbus and Oak Ridge National Lab and Ansys and others. As you can see here in this graph, the top line is IonQ. IonQ Forte is outperforming IBM's latest system, 34.7% higher quality to solution.

And what's interesting in this example is that the more qubit we give the system, the bigger that advantage becomes. Next, benchmark. The next one is the -- it's called QFD. It's the workhorse of quantum computing. It's already one of the most useful tools in signal processing. And as you can see here, again, at the top line is the orange line is IonQ. IonQ Forte is able to produce here 181% higher quality to solution. I apologize. This is 73%. I'm going to the next one inadvertently.

73% higher than IBM and superconducting. The next one I already led with the conclusion. This is a very interesting, very powerful algorithm search algorithm called FAA. And in this case, you can see that the random dots that you see there are samples of a search performing on random numbers. And the horizontal lines are the average score of the benchmark. And you can see here, this is not even IonQ Forte. This is the older generation. We ran it with IonQ Aria. And Aria is outperforming all other or the top option of the competition with 181% higher quality of solution.

So all these advantages eventually comes down to opportunities. As Niccolo pointed out in his opening, we have been there first. We turn on our systems first. We've been running with customers first. We've been testing these algorithms. We established a foundation that is simply more robust. Therefore, we get opportunities ahead of everybody else. And the opportunities are emerging everywhere.

You can see here examples in pharmaceutical, health care, logistics, service industries, engineering, financial services, security, manufacturing, these opportunities are popping everywhere, and it's up to us to capture them and convert them into actual business, which we are actively pursuing right now. It's all eventually about finding key algorithms, running them on powerful systems that are tuned for these algorithms because of the choices that we're making every day and using them to find the right use cases that address real business needs. Right?

So let's look at one example that we recently did. So this is a partnership between AWS, IonQ, first and foremost, AWS, NVIDIA and AstraZeneca. In this example, we chose to address a step in the drug discovery process. It's a way of scaling up the yield of drug production by using a special purpose catalyst. And the way we did that is use quantum processing to accelerate a classical simulation process.

It's a quite elaborate process within pharma, but that's the level you need to get to, to extract the value. Work very closely with these partners. And the result of it was a 20x improvement of end-to-end time to solution in this. And as Niccolo said in the beginning, if you actually follow the QR code and look at the publication, the claims are actually much greater. The improvement in the steps that we are actually accelerating is more than 6x, 7x faster.

But the end-to-end, we wanted to be conservative. So we're showing you the 20x improvement there. But please, I encourage you to look at the publication around that. And that's a clear evidence of advantage right now. The next example is very interesting. It's a new approach to allow for improving the performance and the cost of large AI models, things like LLM, but not limited just to LLM.

So what allows customers to do is take their existing large models that they invested sometimes $1 billion just to train a large model. add a quantum layer to it and use the quantum layer to retrain the LLM or in this case, the AI model to perform highly specialized tasks with very little additional training and very little data.

It excels the situations where the available data is very limited, and you want to get high accuracy despite the fact that you did not have a lot of data and you did not have to train this model with a lot of money. And as you can see here in the graph at the bottom, our energy measurements demonstrate that IonQ consume energy linearly as the AI model increase, while GPU increases exponentially.

So it's also a way to reduce the energy demand in AI, going back to the same four ideas where we excel. We're making it cheaper, we consume less energy, we make it more accurate, right? And we make it less expensive. So let's watch a little video about this unique new approach before proceeding to customer updates by Rima and Margaret.

[Presentation]

Hello, everyone. I'm Rima Alameddine, Chief Revenue Officer at IonQ. Thank you for being here today. So quantum is no longer a future promise. It is a present reality. Our customers realize that quantum computing and quantum networking will shape the future. So they are acting now.

We have two types of buyers, mission-driven and ROI-driven customers. The mission-driven customers are investing because they are interested in fueling economic growth, attracting world talent and driving innovation. These are the universities, the countries, the states, the cities that are building quantum hubs and ecosystems to be leaders in the quantum economy.

This category also includes governments. As we all know, governments are investing heavily because they know there's a quantum race out there. And the nation that masters quantum first will get to define the global order.

Then the second category are the ROI-driven customers. These customers are investing for a totally different reason. They are investing to solve their hardest problems, problems they're not able to solve today with current technologies.

They care about accelerating growth, leapfrogging their competition and defining industries. These are pharmaceutical companies creating new drugs, manufacturers building new materials, financial services customers building new cutting-edge models.

And also enterprises in general, they are looking to protect their data from intruders. That's where they use quantum security. So our customers know that they need to invest now to be able to shape the future, and we're proud to help them lead the way.

So with that, I'm going to turn it over to my colleague, Margaret Arakawa, who will share with you examples of our success and our momentum.

Good afternoon, everyone. Again, my name is Margaret Arakawa, I'm the Chief Marketing Officer of IonQ. Prior to joining IonQ, I had the privilege and joy of working at Microsoft for 20 years, in the old days and the new days and the mid-days. So I wanted to just step back just real quick, to give you kind of a time line on how and why we feel so confident.

So I've picked the 1970s as a starting point for compute. And -- because I got to work at Microsoft, we cared about this one thing. Remember the PC on every desktop, the PC on every desktop became servers in every data center.

But in the '70s, it all started because PCs were being developed. And we're all of a sudden getting freed from the tyranny of a vac machine, which I coded on or a mainframe. So now you get a computer as you all do on your desktop or in your homes. So that started distributed computing and distributed computers. That then led to something else. And what that was, was the Internet.

I was overjoyed when the Internet launched in the '90s, but it actually launched in 1983, so to speak, when there is this thing, this protocol called TCP/IP, that allowed people to communicate over the Internet or when the World Wide Web was actually delivered as a way to actually communicate.

So on the fact that we had computers in desktops. Because the Internet now had a protocol, at the very beginning of the Internet, as we all might know, if you were around, it was neither fast nor secure. But it got there. It got to the point where Netflix now can actually leverage that incredible speed, and I can have 1 gigabyte downloads at home.

What then did you get with the Internet besides this distribution of these computers and ability to connect and transact. What followed was the cloud. I don't know really when the cloud is born, but I put 2002. The reason I put 2002 is why. What company launched a service that is the largest cloud service in the world? AWS.

2002 is AWS' Hello World. And I decided that's when the cloud started because they leverage wet amazon.com to build, and they are now running the world's largest cloud service. Could you have done that without the Internet? And could you have done it without distributed computing?

And the next phase is AI. Guess why I pick that date, 2022. It's a really odd terrible time to pick because actually, AI was officially discussed in the Dartmouth conference in 1953. But I took 2022 because that was the ChatGPT moment, for people to understand how to be productive as a person. And then they understood now, how do you gain productivity out of the cloud, out of the Internet and out of AI.

So here's a bunch of companies that have been around, Microsoft, AWS, NVIDIA, Google and Oracle, which had a great week earlier this week. The reason I put those down is, all of them invested in this journey. They all had to create the infrastructure, but all of them are actually cloud providers.

They are working with NVIDIA, they're working with each other. Oracle's cloud actually runs on everybody else's cloud, so do we. Because the way I've learned, at least I learned and my continued journey because I also interned at Intel, you have to invest in the infrastructure and then you have to have a benefit for customers.

The benefits for customers for IonQ today, what you can buy or what you can look at right there, we provide the basic things that customers want. They want to make sure that you are high performing.

And Dean actually talked about, we are on path. We will be delivering the world's most powerful quantum computers, and you require that in compute, you need to prove that you have high performance.

When you're networking, you need to actually care that you are doing it at a lower cost, that you're doing it with scale. Chris Ballance talked about the lowest cost per qubit in the industry. Jordan talked about incredible scalability.

Mihir talked about it from a photonic perspective. But when you think about scalability, think about all that infrastructure and all that investment you have to put in.

And then Gregoire also talked about world-class security. I spent 3 years at Microsoft running a security group. I was told that I had to help Bill Gates, prep for his last RSA security conference.

Actually I thought I was going to get fired because I was like, I don't know if I prep Bill Gates. He's like brilliant. He said, "No, you have to tell them everything Microsoft does and sells its security and get him ready to get on stage."

And the thing I learned is you got to work really, really, really hard. You have to keep at it. You have to have the IP and you have people that want to make sure that their security is world-class.

So with that, I will say that those companies did what we're doing. We have world-class sixth generation hardware that we're selling. We sell it with an application layer that allows companies like NVIDIA to partner with us.

When you see NVIDIA and you see quantum, they only can partner with people who have a software layer, hybrid services that allow a classical computer to talk to a quantum computer because it's a symbiotic relationship. That's why NVIDIA loves working with us and why we're able to work on incredible applications together.

And finally, as you've heard, this is the stack that we sell. We sell end-to-end one-stop shop quantum networking, a type of quantum that is applied to networking in a way that, for the first time, you're going to have this belief and knowledge that your network is the strongest, most secure network capable in the world today.

So these are the customers that have bought what we are selling, incredible customers, world-class Fortune 500, Global 1000 customers like Hyundai, like T-Mobile, like Samsung, like Cisco. We also have, as Rima has talked about, we also have incredible ecosystem partners, and it matters. We have to scale our partnerships.

The last job I had at Microsoft, I was running Windows in the United States, a small little business that if I got a cold, Microsoft would be ill. So I made sure that we did well selling Windows.

When I first got to Windows, I was running Windows 8 and all our customers were mad at us. And they should have been mad at us because we delivered a product to them that was a surprise. The UI had changed and we didn't get feedback all along the way like we had traditionally done. By the time we launched Windows 10, we are excited.

And what I focused my entire job at Windows and Microsoft was scaling via partners. Ecosystems are built with partners. If you don't have, we are the only ones that are actively working with Google, Amazon and Microsoft and all our quantum computers, if you have a little credit card right now, you could go start today. You can learn how to code for quantum because we have to democratize it.

And then finally, we have, obviously, our incredible government, national labs, universities. Silicon Valley started because of what, because they had incredible smart people at all of these schools that work local to a lot of innovators and entrepreneurs, and that's how they became Silicon Valley.

We are trying to create quantum innovation hubs all around the world, and we're partnering with universities and government labs and the government to make sure that people don't wait for quantum because quantum is now.

So I'm going to take you to the really quick tour of the last year. The last year for IonQ was a tremendous year. But I wanted to just highlight in 1 year alone, who were these customers, partners and universities, and what was the news that we actually delivered.

Sorry, here we go. The first one is the University of Maryland. We signed a $9 million partnership with them to help them continue to build their quantum capabilities. And again, we have to democratize quantum, and we have to make sure that students learn quantum. If they're working on a CS degree, they should also look at whether or not they should learn how to code for quantum.

One of our largest deals, one of the largest in the United States of America last year in September 2024 with the United State Air Force Research Lab. It was a 55 -- $54.5 million contract. This is an incredible contract. And in fact, we've actually added to that contract and are now over $100 million in our government contracts.

NVIDIA, like I said, we worked on a new chemistry application. We did it with CUDA-Q which is their next platform for co-working, collaborating with the quantum companies. But you must look at quantum companies that invest in that because it's the only way we're going to scale.

In December, we shipped a quantum computer to Europe. A lot of quantum companies have quantum computers in their labs. So that's something that most people don't realize. Amazon, Microsoft and Google, they all have quantum computers. They are not commercially available. So they put our quantum computer on their clouds because we need to be commercially available because quantum is now.

We also have landed as part of an anchor partner to the state of Maryland. You'll notice, search state investment in the United States, country investment in quantum. You'll see that the state of Maryland did a big stake in the ground to say they are building a $1 billion Capital of Quantum, and they chose us as their anchor partner.

We're showcasing quantum applications with Ansys. Who's Ansys? Ansys, which was just recently bought by Synopsys, they are one of the largest companies on earth that work with high-performance computing -- companies that need high-performance computing, and they do computer-aided engineering or computer-aided design. So you need to work with the companies and the partners that have the most complex problems.

AWS, as I said, great partners with them. They were excited when we announced global availability of our latest and greatest quantum computer, Forte Enterprise, at a remarkable #AQ 36.

DARPA, I know that there's questions about what DARPA means and who they are. Obviously, they were pretty much the inventors of the Internet. They are investing because they know quantum is now, and they'd like to get the leaders in quantum to help them standardize and figure out the future of quantum. We were selected as one of the partners that are going to help DARPA and the government do that.

In April, again, we landed a $22 million partnership with an electronic -- electric power company, the EPB company that's in Chattanooga, they, who have often been incredibly world-class and leading, they actually have the first gig fiber to all of their citizens. They are now the first utility in the United States to have a quantum computer and a quantum network, both developed by IonQ.

We, in April, were lucky to be selected as somebody that the Japanese National Institute for Industrial Science. And it matters, right? Because where is the most high-performance computing and compute in the world? It's in the U.S.

I mean there's other foreign entities that we shall not name, but the largest ones that we allied nations, the U.S., the U.K., Germany, France, Japan, Korea, all of those places, Japan selected us because they want to advance quantum and AI in Japan.

Sweden, there's this incredible company Einride. I don't know if you've heard of them, but they actually were creating autonomous vehicles that were electric. So they took two trends and put it together. And these interesting-looking trucks are actually autonomous and electric, and they're working with us because logistics and optimization is very difficult.

We also partnered with AstraZeneca. That was something that Niccolo talked about. Why do we partner with a pharmaceutical company? Because they have brilliant scientists that know how to discover and accelerate drugs using classical and they partner with us because quantum will be able to discover and accelerate the next drugs that could cure cancer.

That's what we all want. We want the cure for cancer. The longest development time is actually in testing and drug development. We have to accelerate that, and we're working with AstraZeneca to do so.

In July, we partnered with KISTI, the Korean National Quantum Center of Excellence. Very excited. We are their primary partner for them to develop their quantum center in Korea.

And then finally, our R&D breakthrough that we just announced. You've heard of De Beers, the diamond company. Turns out they also sell diamonds, synthetic diamonds from materials that can be used to accelerate quantum computers.

Mihir talked about photonic interconnects and talked about all of the things he's doing to make sure that the speed between quantum computers and chips is actually fast. Diamond materials is the next generation that's going to help that.

So I did want to leave you with quantum is now. Although those companies have invested in quantum with us, and we're partnering because it's the time. Like I said in that evolution, we didn't disappear. We've been doing -- I've been doing this for -- I've been in compute for 30 years. It's time now to invest in quantum and partner with those companies.

So with that, I will let my next esteemed speaker come up. He is the Chief Operating Officer of IonQ, Inder Singh. Welcome.

Thank you. It's hard to top that. So thank you for putting me right after you. It's great to be here with all of you.

I get the easier part because you get no forward-looking statements from me today. But I do want to make sure that you appreciate what you heard from my lens, right? I've joined IonQ formally, I was on the Board of Directors, a Lead Independent Director, Head of Audit Committee.

I became many of those things when I was CFO of Arm. Some of you may have heard of Arm, It's a semiconductor design company in the U.K., I was helping it get ready for an IPO. They weren't. Means that then sell it to NVIDIA and than back to IPO again, exciting journey.

To me, it was sort of like the present and past of computing and maybe -- look, I'm not going to diminish it, maybe the future as well. So classical computing is on a track. You heard all of the Jensen Huang statements, you heard of the GPU successes, et cetera, et cetera. That march is on.

But if you think about kind of how these things are coming together over time, what's happening in semiconductor space. You're actually going to smaller and smaller and smaller nodes.

Do some of you follow like semiconductors? I'm guessing some of you do. You don't have to admit if you don't want to. The -- if you look about -- at 5 nanometers going to 3 nanometers going to 18 angstroms, going to 14 angstroms, they're heading down the path where quantum mechanics is.

And quantum computing follows a different set of laws and logic, wave theory versus particle theory and leverages immense more, exponentially more power if you can start to manipulate things at that level.

And I remember when the company approached me to join their Board, first, they wanted me to join us as CFO when I sold it to Arm, I was like I can't do that. And when I did join on the Board, I asked our CEO at that time, I'm thinking of joining this Board. I think quantum is the future of computing.

And I won't name the individual, he's not there now, so it's not [ Rene ]. When he said to me like it will never happen, it will never happen, quantum is never going to happen. He could have been right. He had been doing it for 27 years, he could have been right. At that time, most quantum companies that I was looking at to compare IonQ to, had like no revenue.

They're R&D shops, pre-revenue companies wanting to go public. This was one of them. And when I looked at what this one had and I looked at the leadership team and I looked at the capitalization of the company, I looked at the comfort that this one had the funding, over $0.5 billion of cash to invest, then okay, you increase the chances of success.

You have to have the right scientists and engineers and researchers and marketing people and everything else. And what they've delivered is you'll see on the next graph is kind of that growth trajectory. That's the revenue performance of the company. 2021, when the revenues were $1.6 million, that's when I joined.

And when I looked at the road map that I was hearing from Chris Monroe, Niccolo was on the Board, he had been involved heavily in the company, I got comfort that we have the money to invest. And now the question was, can we actually build. These revenues are by selling machines. I haven't seen another company in quantum have this kind of a trajectory in selling machines.

I'm not trying to brag on this. I'm just saying these are just facts. Also, they're not forward-looking comments. So I'm not saying past is prologue. But our goal is to make sure we do the things on the right-hand side of the page going forward, which is grow our customer adoption. And you've seen, I think, lots of like names and examples of how that is happening.

Why is that happening? Partly because of the reasons that Ariel talked about, the kinds of applications that might be coming, the things around drug discovery, the things around battery chemistry, how can I make an EV go longer.

There are problems that are intractable problems that classical computing might solve one day, but takes years and years. And a machine like this, which can instead of doing serial processing of information, can do simultaneous processing of all the different possible scenarios and tell you what to look at.

And I'm not saying it's the panacea. I'm also not saying you should think of this like if quantum wins, GPU loses. No. I think we end up in a hybrid world where both coexist. There are certain workloads like large-scale matrix multiplication when you're doing LLM training, that's what that is, a table of weights and a table of data and you're smashing them together and multiplying them many times until you get the right answer and the training model.

Maybe quantum is not exactly the best at that. But you saw an example of what you can use quantum for, take that and make it better. So if you think about the intersection of the Venn diagram of AI and Quantum, and that crossover point is where you can really turbocharge models.

I'm not predicting that will happen. I'm not saying that that's kind of what we're investing for. That's what we're enabling. So the diverse business comment there is important for you to understand.

I think you saw a number of speakers present. I've listened to them. So this is, I think, day 5 on the job for me as COO and CFO from the Board into the company. But I did not want to miss this journey. I didn't have to do this. I was on a number of Boards. Niccolo called up and said, "Hey, you become a sounding Board, et cetera, et cetera. You want to join -- want to be part of the excitement?" I couldn't say no.

And so how can you say no? How can you say no when this technology could enable the betterment of humanity. I've always worked for mission-oriented companies in my entire life. I won't go through my history.

But this is one of those where if we deliver, if we scale to the qubits you saw, if Chris Ballance executes on getting us to 2 million qubits, 2 million qubits, and he does it using a semiconductor ecosystem, which is the plan. That means it's going to be the lowest cost solution.

The semiconductor industry has been around for 4 decades, 40 years plus. It's an existing infrastructure. The foundries exist. You don't have to reinvent the wheel.

You also don't have to put in lots and lots of lasers to hold these ions in place, use RF instead of lasers, so it becomes smaller, cheaper. The bill of materials things you saw already, I won't dwell on that. But also, I want to make sure that you understand, this is not easy.

Quantum is the mixture of science, research, engineering, productization, sale, deployment. And in my first few days, what I asked the team was, if you have now been able to create a 64 qubit -- #AQ 64 qubit machine and you can scale it, and then you can go to 2 million eventually, what are the things that will hold you back?

And the answer I got was not what I thought I would get, which was like, well, we need to do more research. We don't know. And I was just, we need more people. We need more people to do deployment. We can sell more if we deploy more.

So I said how many people? I won't tell you how many people they wanted. It was a small number. And so the head of manufacturing reports to me in supply chain, and then Dean, who you saw presenting, I said, go hire him. And this is a no regrets move.

So we have the ability to now start turbocharging things. Again, not a forward-looking comment on guidance. But my hope is that we continue this trajectory. I think our opportunity is if we continue this trajectory to deliver. You can talk to a lot of companies.

I've have tons of respect for IBM. My first job offer after out of engineering at Colombia was at East Fishkill, New York with IBM in a semiconductor factory. I didn't join. Maybe I regret it, maybe I don't. I don't. I have immense respect for the brand and that icon, I will never put a company down. And God bless them.

We have D-Wave. We have other companies that are in this industry, which is a nascent industry. It only becomes a real industry when a number of companies win. So every time I say like a breakthrough from Microsoft, great, a breakthrough from Google, great. It's validating the fact that this works. Customers see those.

We build the machine. We'll keep outpacing the other competitors, frankly. We have about a 2-year lead, in my view, at least on actually commercializing the product and delivering it and having to do something. And I think that the ones who are 2 years behind will try to catch up. By then we'll be another 2 years forward or more. And you'll see that we have the resources to do that.

And Niccolo and I got to work on the cost story here is basically telling you by leveraging the semiconductor supply chain, we have the lowest cost of build. I'm not saying we're going to sell it at lowest prices necessarily all the time.

But we can build it for a 20th of the cost of anything else, like our cost is measured in millions of dollars, and you saw a slide on it earlier. The other costs are measured on billions of dollars. So we still need to do a lot of development work.

And to do that, we need to have a balance sheet that supports it. So again, Niccolo and I and the Board and the team decided we needed to ensure we had enough cash on hand so that, that's not an issue. And earlier this year, we made sure that we raised enough to get us to about almost $1.7 billion of cash.

If we need more, we will raise more. The interest in this space is there. There are proof points of delivery we have shown. People have deployed our machines in Switzerland. Germany is interested. There are countries in the Middle East that are calling Niccolo. I speak Arabic [indiscernible] there. These are things that didn't happen.

So AI is still very hot, will remain hot. I hope it does. But the intersection of AI and quantum, but also quantum alone is incredible. I was -- I'll show you sort of like a hot -- sort of a topic slide later on. But when I look at kind of what we have that no one has, no one in quantum has the computing, the networking and the security.

And people always think about security and they say, well, we need it. People think about security in current terms. I worked at Cisco Systems doing corporate finance. We had a security business. It was great. We thought it was terrific.

There's Palo Alto, CrowdStrike, you can name them all. None of them work. None of them work, right? I mean, look, I've been at companies. You layer on, you layer on firewalls, VPNs, no matter what you do. Intrusion detection, endpoint protection, it's not working anymore.

People are finding a way around it. The bad guys are getting in. Nation states, in particular, are getting in. So then what do you do? You wait for quantum to happen and then put in quantum security, it's too late. They've already taken your data, which is encrypted by our say 2046 -- 2048, sorry, which is the highest level of RSA encryption, and there are different flavors.

There's -- much is like far less than 2048. So you can start working your way up and decrypting if an adversary actually gets their handle on a quantum machine. They're working on it.

Our goal is to be the first country and the first, frankly, company in this country to achieve that. I'd rather not have an adversary get there first. I'd rather have us get there first. We think we can.

And so the -- people think about quantum security and say, well, I'll put it in when I need it. No, no, no, no. You need it now. Encrypt it with quantum, you heard Gregoire. Gregoire wrote the research paper that started this company 2 decades ago. Where are you, Gregoire? There you are. And he has now -- he's too humble. He's too humble.

He won't tell you that there are two companies in the world that are doing this. His, that we now own, thank you, and Toshiba. And I'm not saying it's a duopoly, there's a couple of start-ups too. But in that space, you have a unique ability to secure networks today.

So as a management team, we talk about this and say, what do we focus on. That's what we're going to focus on. This is opportunity for us now while we wait for qubits to grow and the compute. And then the fact that we have Capella allows us to take that same quantum security from terrestrial networks up to a satellite, satellite to satellite and then down again.

There are programs we're working on, the U.S. government is working on, others are working on that want us to sort of build this capability now that is resilient from jamming. You've heard of GPS spoofing, satellites can be interfered with. Quantum secured satellites, not so much, very hard.

So this hardening, the Chinese are actually 10 years ahead in some areas, you know that. I mean I'm not telling you any state secret. You can search it in Google and you'll see it. And so they launched Micius which was a satellite, the first one in 2016 and then they've been just going.

Nothing wrong with it. I'm not aiming at China. I'm saying our infrastructure has to also withstand the onslaught of jamming, interference, all of those things in the same time frame as anyone else. And I think we need -- we have space to make up on time to make up on and now the assets to actually develop those products, demonstrate them, deploy them.

The fact that we are global, partly through our acquisitions, partly because our customers have pulled us there, gives us locations where you see all over the world here and growing. The demand is, I think, more than how much we can actually manufacture in our factory today.

We have a factory in Seattle. We will be looking at expanding our ability to put more into that factory for a building. The product has moved from the Bunsen burner and beaker stage to the let's try something stage to the we're making it safe.

So I joined because I was like, wow, okay, I want to be a part of this as it is turning out to be the future of computing. I hope other quantum computing companies win also. I have no objection to having like other players in there.

But I've seen through working in many industries, AT&T, Cisco, others over time, you always sort of end up with two or three leaders. And 3 to 5 years from now, I'm thinking even sooner than that, you'll see these leaders emerge. And then the others will sort of become niche players with one product.

We don't intend to do that. The one-stop shop that you heard earlier, we're not trying to become a supermarket for everything. We're trying to be the place to go if you want to secure your network, if you want to actually make sure that your communications are encrypted today so that if an adversary builds a computer tomorrow, they cannot decrypt it in the future.

They can decrypt all the other communications that are RSA. I'm not trying to scare you, but I am saying be scared. Blockchain was mentioned. I think maybe Jordan mentioned it. You all know what blockchain is, right? So cryptocurrencies, whether it's stablecoin, at the root of it is blockchain.

The value of blockchain -- any crypto investors in here? I never actually had the courage to buy a cryptocurrency. You don't have to admit if you're not. But that is a similar technology that depends on prime number factoring, is elliptical versus normal sort of prime number factoring, et cetera.

But blockchain itself is valuable because it has the history of every single transaction in that bitcoin, right? You can see who bought this when, all that transaction record exists. So you can see if you have something legitimate or not.

Because it has all that history, it's very difficult to quantum secure, when quantum can break it because you lose all the history. So I don't know that people have wrapped their heads around it. It will make my head hurt if I try to. I'm not going to.

All I'm saying is like we're on the cusp of that. I'm not the only one saying that. On this sort of like top hit slide, the Department of War, now known as the Department of War has said that, has said that. And I'm surprised to have seen that they've admitted it's within 3 years. I think it could happen faster than that.

Any company that puts wood behind that muscle, has the talent that we have in this room and beyond, the founder of the company. Robert Cardillo, where are you? Robert is in here. He ran the NRO office, has Blue Badge access to every top security agency in the country. Access to the Five Eyes, access to the 17 NATO countries, can help us show them what we can bring them.

When you have Rick Muller, Rick ran DARPA, Rick ran IARPA. DARPA is for defense, IARPA is for the intelligence community, he was in that position, and we hired him out of that position, which I've never seen before.

Marco, are you in the room? There he is. Marco ran the quantum and all of their R&D efforts really focusing on quantum for a very large bank. Can I name your bank? Thank you. I didn't name it.

And when I listen to the conferences and listen to [ Jamie ] when I attend some of them, he's proud of the tens of thousands of engineers he has in that bank. And they're investing in these types of things. It turns out they're a customer of Gregoire on IDQ.

So they're putting in sort of the QKD solutions, which is what you protect your crown jewels with, like this cannot be hacked. You use QKD. You use a lesser version called QKC, which has an encryption approach, unlike the entanglement approach and others.

And look, both are good. One is like gold standard, the other is like platinum standard, you decide how you want to deploy. But when start -- commercial institutions realize they need to protect themselves now. They start doing it.

So again, I'm not trying to predict the future here, guys. But what you heard today here was we basically now secure approval for the OI acquisition that we had announced, that is huge, that happened this morning.

That was a government-to-government process between the United States and the United Kingdom, jointly deciding -- I wasn't there, so I wasn't in their head. So this is my interpretation because I did the Arm deal with NVIDIA, so I know kind of how they think of it.

National priority for both countries, they think they're better together than apart, and they have allowed us, a U.S. company, to buy that asset. And Chris Ballance and his team are on board. They understand the semiconductor cycle. They use an existing fab in Europe today.

My team looks at supply chain and resiliency and things like that. So we'll take advantage of those synergies over time. But right now, I want to invest and keep investing in this space.

You can see the other thing along here. The building and deploying the quantum applications today, I wanted to make sure that you all heard. And that is huge. So not only are we kind of like building a machine that can work, we're making sure that we can show the applications that run on it.

And you may have only seen like a small peek into it. I have the longer list from Ariel, where are you Ariel? The longest list from Ariel who is trying to do all of it, and I'm saying, prioritize what you can get to now versus later versus later versus later.

And the next fireside chat that you'll see is with Marco and Martin Roetteler. Martin joined us from Microsoft, he had led a lot of their quantum efforts. What's my message? All those people are under our roof now. This is how you derisk your strategy. This is how you know you can spend $1.7 billion, and you will get something for it.

And we have, now with Niccolo in the seat, taken the approach that we're going to acquire what we need to acquire. If we can build it, we'll build it. If that takes too long, we'll accelerate by acquiring. And we will take a very measured approach.

We've put in place an integration team. If you have questions around that, et cetera, we can address. I ran Cisco's M&A program, and we did one a month. I hope we don't do one a month here. But it's like a machine, and we're trying to make a small machine.

We want to make sure that there's a lot of synergies to that and that the fact that we can deliver an impactful thing for our existing and sort of new customers. So interest is huge. Product is here, team is here. We have a plan. Nothing is ever guaranteed, so like invest wisely, of course, right? But I'm investing my career into this. I didn't need to do this. I wanted to do this.

So with that, I'm going to actually stop so that we can have either Q&A, and we can have a fireside chat come in. But I'm thrilled to be here. The CFO role, I've got $1.7 billion to spend. So I'm just going to try to do the capital allocation part of it correctly.

We have no debt. If we need to, we'll raise more. The capital sources are available. And then our job is to make sure that we prioritize the things that matter most.

And if cryptography can be broken in 3 years, it has to be on our road map. If drug discovery can be accelerated, it has to be on our road map. And the applications are enormous. Each of them takes effort.

The other thing that I think was alluded to and was mentioned, I think I'm going to get a hook here because I'm over time. The other thing I think that was mentioned was there are a number of applications that can be done that have incredible future potential but not immediate commercial value.

I'm a finance guy. We're going to balance those two things. So if we can build applications that we can monetize now on the machines we're building, take that customer and upgrade them to our next-generation machine that can do even more applications and so on, that's how this gets the flywheel effect going.

Okay. Cool. I'm going to go off stage, and let the next team come in over, you'll have questions, I'll be a part of hopefully staying around here. But also afterwards, if you want to follow up, let's do it.

I do have the CFO hat, many of you are in the financial industry. Some of you I've worked with. There you are, [ John ]. Many, many people, I've known; many, I haven't. I want to get to know you better as well. And yes, I hope you get as excited about this as we are.

If you don't understand quantum mechanics, I didn't. It's hard. Einstein called its spooky science. He couldn't understand it. You're in good company.

I'm on the Board of John Wiley, they published a book called Quantum for Dummies. I'm not trying to sell. But like I bought it. It has pictures in it, it doesn't have the calculus and you start to understand that, "Oh, wow, entanglement is real, super position is real. Schrodinger's cat can be dead and alive at the same time." I don't care how but it can.

And what Gregoire said is important, which is the security aspect is with this the minute that somebody tries to hack into your network, they disturb that and you know. And if somebody asked a question, which I think was handled well, that what do you do then?

Well, you reroute traffic. Those of you who have followed telecom and Cisco networking and so on realize that there's a concept called self-healing networks. So if the network is quantum-secured, the nodes decide where to sent it if this one got hacked.

So I hope we get the industry to that level. But this is a level of security that has never existed before. I thought it would take a while, but it's happening now. Okay. Take care.

Excellent. We got a lot of questions. So we're here not to sit on the seats but to answer your questions because there is going to be a fireside chat right after we talk.

Well, let's have Niccolo, if you want to come here, so that all of us are here, and I may have some questions that you guys have been kindly asking us. We appreciate that.

And as a reminder, you can submit questions in the Q&A QR codes. So the first question...

One moment just so they can put the table. All right. We're okay. We don't need the other table. Thank you. Excellent. Let's go, [ Hanley ].

The first question, Rima, is for you, which is why are -- what are the reasons you hear from customers for why they're investing in Quantum now instead of later?

Yes. So let me divide it into 2 parts, quantum networking and quantum computing. So with quantum networking, you just heard a little bit earlier that Q-Day is near. Q-Day is when quantum computers will be able to break RSA-2048, which is what the Internet runs on. So that day is near. So that's why customers are investing now to protect their data. Now let me move to quantum computing. With quantum computing, there are a number of reasons customers are investing now. One, as you heard this morning, you can't simulate applications that run on quantum computers anymore. Our 100-qubit machine cannot be simulated. So to run those applications, you have to run them on our quantum computer. That's one reason.

Another reason is customers have to figure out what problems they can solve on a quantum computer. As we know from the days of when GPUs were introduced, you have to know what you run on a CPU, what you run on a GPU and now what you run on a QPU. Once you understand your workflow and understand what you run on each one of those processors, that's how you can really improve your workflow. So customers are investing now to build a workflow that's optimized and ready to really accelerate their problems and solve their hardest problems. So that's the second reason.

Third is we've shown value today. We're showing value today that can improve their business, and they all know that we're going very soon to broad advantage and then superiority. So now is the time to invest. You can get value today from hybrid applications.

Maybe taking it into the future for Margaret, how do you envision the longer-term quantum application TAM? And how do you view the split between augmenting versus replacing classical computing approaches?

Okay. I have a quick analogy for you. If you go into your kitchen and you have a stove, an oven and you have a toaster, then this magical thing came into your kitchen, it's called a microwave. Most people have no idea how microwaves work. There's a magnet, it excites the molecules and something that's cold becomes incredibly hot. But a microwave right now doesn't solve all of my cooking problems. I don't use it for toast, but I use it for a very quick, very powerful need of hot food. So quantum computing and classical computing are always going to be symbiotic. The TAM for quantum computing is every data center in the world. Every complex problem in the world that cannot be solved today like weather, like RSA encryption, like pharmaceutical speed, none of those can be solved now. So the TAM is every data center in the world and every complex problem that is not being solved today with supercomputers.

Awesome. Well, when we think about maybe for you, Niccolo, our customers and our TAM, what's stopping us from actually selling access to technology giants like Microsoft and Google through an IP segment or something like that since we're so far ahead in the R&D side?

Yes. So I get questions like that frequently as well as will we get acquired as the other related one by hyperscaler. My job, our job at IonQ is to run the company as well as we can and make both of those sorts of conversations, honestly, as expensive as possible. We are focused on being an independent company forever, and we obviously see ourselves as having a fantastic future. When people like Inder Singh join us, formerly the CFO of Arm and people like Paul Dacier join us, formerly the General Counsel of EMC. These are individuals that I obviously enjoy working with and are betting that we are the next $100 billion market cap company, if not next $1 trillion market cap company.

We're also students of history, honestly. And you've heard a lot about our investments in software so far today. We are very clear about the value in the full stack. And we want to make sure that we preserve our ability to capture that value all the way up the stack. So we're careful is the long-winded -- long and short of it. There's a price for everything as they say. But right now, we believe we're leading the pack, not just in the hardware layer, the compiler layer, but also into the application layer as well.

And building on that application layer, Ariel, we've talked about NVIDIA today in a few different contexts, but we have a question about, could you talk -- could you expand on our partnership with NVIDIA and the work we're doing there?

Sure. So NVIDIA is a critical player. Remember that everything in quantum is hybrid. Quantum doesn't exist in isolation outside of research. So a leader in AI and a leader in computing is clearly a partner of ours. Look at the AstraZeneca collaboration we had, right? It's actually a good model for the kind of partnership we have. IonQ brings the expertise in quantum, the hardware and the algorithms. AWS brings the infrastructure, the classical infrastructure, the data center and the knowledge around how to do high-performance computation. AstraZeneca brings the knowledge in pharmaceutical. And NVIDIA brings the connecting tissue. So they have this infrastructure called CUDAQ that allows for the orchestration of complex computation across high-performance computing and quantum. So each player brings something to the table and together, value is created. So we work very closely with them on multiple projects, and we are a key player in giving them feedback on how to make their infrastructure even more powerful.

Thank you. So with that, I think we'd like to invite our Q&A panelists to the stage. Niccolo, you can take a seat, and thank you, everyone.

We have foreshadowed this conversation, I think, for most of the day, and our star-studded cast is here. We're going to talk a little bit about why such fantastic talent is at IonQ and has chosen to be here as well as the synergies between our various product families. Each of our fireside chat participants are well known throughout this industry and have set records for themselves in IP creation. I think my colleague here, Marco, holds as many patents that he's co-authored as most companies do. And Martin Roetteler is well known for being the towering figure in quantum applications worldwide. Rick Muller, you've heard from Inder and I gave up a seeded directorship at IARPA to join us. And Robert Cardillo, of course, has recently been announced as the Chairman of the newly created IonQ Federal.

So I'm going to start with you, Robert, if that's okay. Robert has had a distinguished career in government. He has served in multiple administrations. He was a Director of the National Geospatial Intelligence Agency. Just to show us all what that looks like, I'd love you to chat about the connection between the Oval office and IonQ. And I'm going to show a slide here of all the presidents, vice presidents you briefed and of course, directors of other intelligence agencies that were your colleagues.

Well, thanks, Niccolo. And by the way, I'm glad you pointed out the patents and world records that everyone else holds. My record is, I think -- well, there's no way to prove or disprove it. So you guys are just going to have to take my word for it. Over 400 overbriefs, meaning 400 mornings with President -- most of that with President Obama. I also served for 3 years under President Trump's first term. And what I learned through that experience is you're about as good as your last 5 minutes and perhaps 5 seconds in some cases because you can imagine no more momentous of a person to try to inform their next decision, right, to create some sort of advantage. And for me, Niccolo, as we've well laid out here today, I know of no pursuit as momentous as consequential as the pursuit of Quantum and the -- more than the pursuit of it, the application of it.

And so for me, it was an easy call, even though I'm not going to contribute to the science component of our company. I feel confident that I can take the experience on the stream and contribute to those partnerships and to those mutually beneficial relationships that we're going to need to leverage the science that represents on the stage. So just an honor personally and professionally to be able to join the team.

Wonderful. Rick?

I'm Rick Muller. I've been at IonQ for 2 months now. Before that, as people have mentioned, I was the Director of IARPA. IARPA is -- many are familiar with DARPA. IARPA is the Intelligence Advanced Research Projects Activity, which is a version of DARPA that is intended to serve the intelligence community. So it was stood up after 9/11 to have the same type of high-risk, high payoff research that DARPA delivers for the DoD to the intelligence community. IARPA was one of the kind of foundational funders of quantum information science in the United States. They had a number of programs that funded Chris Monroe and Jungsang Kim's early research in these areas. Well, I guess it's not Chris' early research since he's been doing this since the '90s, but a lot of the work that later went into IonQ was funded at one point by IARPA. And that history in quantum was part of my excitement about going there.

Before that, I was at Sandia National Laboratories. I helped build Quantum Information Science program there. I think Sandia was one of the first national laboratories that realized the combination between quantum information science and national security and a large cleared workforce was something beneficial. And we were fairly early in that space. And Sandia also has a connection to IonQ. Sandia was one of the pioneers of the surface ion trap that's the foundation for all of IonQ's technology.

So I was thrilled to come to IonQ. I think throughout my career, it's been quantum information science that's been the most fun for me to work on. It's just a great field intellectually and as well as culturally. And so when I left government, I wanted to kind of pursue what I think is a unique opportunity to scaling quantum information science. And IonQ, it had the right team in place. It had the right technology, and it had the right vision and leadership, I think, to be the main player in that field.

So I'm transitioning from the fully political to the fully technical, and Rick is a unique addition to the team, which I'm honored and proud with as I am with everyone on the stage. Rick is a modest man, but he has had a front row seat, I think it's safe to say with everything that's going on in this country from a quantum hardware perspective, certainly in the last 26 years. If you got me sharing this, Rick, you told me after you joined that when you thought about whether you might want to be in the commercial sector, there was only one company that you applied to. And that to me speaks volumes and volumes and volumes given the vantage point that Rick is coming from as a scientist with a political connection, if you will. So thank you, Rick, for being here. Marco, tell us about your vantage point.

Thank you. First of all, I'm really honored to be here and to be a member of the IonQ company. So my career has not -- is not so diversified because I only worked for 3 companies, 24 years at IBM Research here in Yorktown Heights, New York; 5.5 years at JPMorgan Chase and now 2 months at IonQ. So at IBM, I was the Global Head of Quantum Algorithms and Applications. And the next chapter of my career was to go into JPMorgan, where I was the Global Head of Applied Research, Quantum Computing and Quantum Key Distribution. And now I am at IonQ, where I am Senior Vice President of Industry Relations. So Niccolo mentioned my patents. So that has been part of my career as a researcher. I have 647 patents. And with my team at JPMorgan, we wrote -- and also with my team at IBM, we wrote a lot of papers, scientific papers as well in nature, science and so on.

So I am really excited to be at IonQ because it's time for me to -- so I experienced working for a quantum provider, IBM and a quantum user, JPMorgan. I really wanted to go back into working for a quantum company where Quantum is really like the mission. And IonQ was my first choice because at JPMorgan, I had, for the first time in my career, the ability to be on top of the entire quantum ecosystem and monitor everything that was happening, meet with all the quantum companies and all the quantum key distribution companies. And IonQ was always at the top. And we were so excited to see the latest developments that were discussed today.

At JPMorgan, we saw the acquisition of ID Quantiq, which was our choice to work with since 2022. The investment in quantum networks and quantum security, which was another thing on which JPMorgan was really -- is really very strong and very determined. So JPMorgan doesn't use just PQC post-quantum cryptography, but also QKD to have security in depth. So the most natural choice for me was to work for IonQ because it's time now to commercialize quantum computing. It's the new wave of this technology commercialization, and I wanted to be part of it here at IonQ.

Thank you. Well, Martin is actually a relative veteran on the stage, and he and his team have actually been delivering the Quantum Advantage that we've been reporting on this year. So we're honored to have you here, Martin. He's got the IonQ SOC, so he's been here longer than a few of us. But please tell us how you've seen your journey.

Thank you, Niccolo. So I'm the VP for Quantum Solutions. You heard about our work in Ariel's presentation, so work with customers like AstraZeneca and others. My own background, my first technical work in quantum computing goes back to the mid-'90s. I did my PhD in quantum computing. I came into IonQ -- coming from Microsoft, where I worked for about 11 years. I've been here for 18 months. Before that, I worked on -- actually going back to IARPA, I was leading a performance team together with Raytheon and a few academics in an early version of the Quantum resource estimation efforts about a decade ago. Before that, I worked for NEC, it's a Japanese large electronics company also in quantum computing. So I guess you could say I've seen all kinds of sausage and how the sausage is made in that space.

Quantum sausage.

Quantum sage. And what excites me about IonQ really like a couple of things, like, first of all, the qubits. You heard about the qubits, what's unique about our qubits, why they're the best in the industry. That definitely was a big factor. There's more though. So we got a battle-tested team. Like the applications team has been working closely with customers for many years. There are many kind of challenges you go through, right? You deliver value, but you also have to debunk a lot of things. and educate the customers. So there's a lot of learning. There's a big factor to have a team that's amazing and to also have the cultural values that behind the team. And the third thing you heard from Dean Kassmann in the morning about our engineering road map.

It's a big factor to make systems and not to make test beds or science experiments. There is a big factor -- a big difference between the science experiment and an actual engineered system. Like coming to IonQ, I knew that the systems are amazing. What just gives me this thrill is like we have access to these very advanced systems. We can test our applications, but we also get always access to the latest version. So you heard about the AQ 64 experiments, right? Those were done on prototype systems. My team last week had first -- like hours after that, we had access to that system. We could play with it and do experiments with it. So that's just amazing. Those are the reasons why I'm here.

Wonderful. So I just have one additional question, which I hope everyone will answer thoroughly, and I'm going to start on this side, we'll go down and finish on Robert. One of the things that makes us unique as a business is not only that we're leading the quantum computing revolution and the quantum networking revolution, and we can do this both terrestrially and up in the heavens. But we're the only business that can actually stitch these pieces together in the world. We're the only publicly traded quantum networking company. We're certainly the only publicly traded quantum all product families business. And so I'd love you each to chat about how you see those synergies because they're wide ranging. It's not only long-term scalability in computing, but it's the quantum Internet. And I think each of you has a really fascinating vantage point on how this connects.

Yes. Okay. Let me get started. So you heard from Chris Monroe and Chris Ballon, both Chris and me here about this kind of unique confluence of ideas that allow us to make larger and larger systems, so networking components and also the unique electronic qubit control. So for an application designer from that vantage point, what's really important, and I'm going to get on my little soapbox for a minute, if I can. So we really care about the scale, right? We do not want to do just toy applications that run onto like 20 qubits and then that's it, right? We really care about the large scale. And so if you're around me, I'm preaching that people probably get tired. But there is this funnel of things that go from just an algorithm and a mathematical idea and you have like 50, 100 of them every day. There are preprint servers, many, many new ideas every day. You go from there and you go to actual applications, which have a use case, that already narrows down the funnel tremendously, right?

But then there's a step that goes from there to things people actually want, practitioners actually want. They usually already have a solution in place for something, right? Otherwise, why would they care? So we tend to call it a workflow, something much more complex than just like an algorithm, something having multiple moving pieces. So those things might have a huge classical component and they need a quantum computer at scale. So the technology you heard about that allows us to scale in the fault tolerant regime to 80,000 logical qubits. So this technology we will use to make workflows and deliver practical advantage and eventually put these workflows into production. So that's what excites me about our future road map.

Wonderful.

Thank you. So I really liked what Martin said. I would like to expand on that to talk about the effects of networking to security. So quantum -- IonQ is not just a quantum computing company anymore. It's at this point, a company that covers all the quantum technology spectrum, quantum computing, but also quantum networking and quantum security. And the reason why we have quantum security as part of our portfolio of products is because as you guys 100% heard also from previous talks today, quantum computers already have the ability to break cryptography. I mean we need a few more qubits. And then unfortunately, this moment called the Q-Day will come. It's the moment in which a quantum computer can be used to take anybody's public key and compute the corresponding private key, allowing an attacker to decrypt data and impersonate users.

So we need to have a solution that is no longer vulnerable to quantum computing attacks. And it's not -- the foundation of this new solution should not just be like mathematical assumptions. So right now, for example, the cryptographic methods that are used rely on the assumption that an attacker doesn't have enough computational power to break cryptography. And this assumption lasted many decades, but it's no longer valid now with quantum computing because we know that with a quantum computer, an attacker will be able to break cryptography in minutes. With a classical computer, it would have taken trillions of years and with a quantum computer, minutes.

So IonQ is the only company in the world that has the entire spectrum of quantum security because we support both prepare and measure QKD and entanglement-based QKD. So QKD has been criticized in the past because they say that the distance between the 2 endpoints is to be below like 175 kilometers. This limitation is completely surpassed. With the Lightsynq technology, we're going to have quantum repeaters. And with Capella's space technology, we're going to have connections using satellites. And we can -- we will be able to have connections using QKD across continents. This is not something new. Like unfortunately, China is already doing that. So it's a good thing to know that somebody has already been able to prove it, but we have to do it also in the United States. And the reason why -- I would say just one more thing, the reason why we need QKD it is because it's the only technology that is mathematically proven to be unbreakable.

So in order for an attacker to break the quantum key exchange implemented by QKD, the attacker will have to break the laws of physics. So it's impossible. And the other very desirable property of QKD is that it is the only technology that allows you to immediately detect the presence of an eavesdropper. No other technology for cryptography has this benefit. So at JPMorgan Chase, as I mentioned, I convinced the company, even Jamie Dimon, I spoke with Jamie Dimon with the entire operating committee many times. I said we cannot rely on classical cryptography anymore. We need to have QKD and we use ID Quantique technology. I think I may be wrong, but I believe that JPMorgan has probably been the largest customer of ID Quantique. And now ID Quantique is IonQ. So it's very exciting to be here and to leverage this entire portfolio of Quantum technologies together.

Thank you, Marco. So we have -- we're moving to the top security clearance bit of the panel. We have a growing number of fantastic contributors that have secret security clearances. Gustin McNaughton is also in the audience for anyone who wants to catch him at lunch and fits into that bucket. But Rick, please transition us from the fully technical to the technical political, if you will.

Yes. So the 2 of the best conversations I had while I was at IARPA were with people who are in the room now. It was with Chris Ballance and Mihir Bhaskar. And it was obvious to me in those conversations that the technologies they had developed -- and this was -- I don't even know if they were -- well, they were almost certainly talking to IonQ at the time. I had no idea, they were talking to IonQ at the time. But it was just obvious to me that both of those technologies took a massive step forward towards making what was Chris Monroe, who's also in the room, original vision to modularize quantum computing. And this brought us much, much closer to having national security relevant quantum computation capabilities. It was always obvious you were going to have to modularize and network quantum technologies together to really get an appreciable amount of computation. And these were really exciting -- I mean, first, they were both incredibly exciting people. I mean you don't have to talk to either one of them long before you realize that they're really remarkable thinkers.

But also, it just moved quantum computation that much further down the road. And it -- in the past, we used to say vaguely, well, it's probably going to come out in 10 years, but we were kind of vague about the steps required. And really, very recently, it's -- and I think the IonQ road map reflects this, we're now seeing Q-Day on the horizon, and we start to understand the technical steps that are required to get us there. And that's incredibly exciting, a little bit scary, but it was certainly something I wanted to be a part of. And the reason I say that in addition to the team and the technology, I was excited by IonQ's vision is that I didn't have to tell anyone that those two technologies were critical to the future.

IonQ figured it out. By the time I started talking to them, I think they had announced the Lightsynq acquisition. But I was hinting broadly in some of my interviews about these electronically controlled gates. And boy, they sure look great. And how are you going to get all those lasers together for 2 million qubits? And little did I know that they were all -- I mean, they were already deep into talks with that technology. So it was just -- it was a remarkable convergence of the technology, the people and I think really pressing national security issues that I think IonQ is well addressed to -- or well posed to address.

Thank you, Rick. All right. Our second former Agency Director, I think Robert's agency has something like 15x the number of employees that IonQ has. So we appreciate the scale and the talent that is at our firm. And Robert, I'll ask you to take us home.

Thanks, Niccolo. I mentioned my time in the Oval. I also testified more than 100 times in front of Congress. And the most important skill I learned there is listen intently, right, to the question, thank them for the question and then answer the question you'd like to answer, right? So if you don't mind, Niccolo, I'm going to do that now. On a more serious note, I am old enough, okay, to be involved in the -- let's call it, the midpoint of our space race in the cold war. This is the 1980s, and we needed to win that race. We as a country. We, as an industry -- and by the way, there was an industry. It was government-owned and operated. It was classified at the top secret level. But we couldn't have done it as a government without our industry partners. And we won that race, and we won that cold war.

We're in a race today. We're in this room. We're live. We're in public, right? We're a public company. We're sharing with you our plan to win the race. And I agree with Inder. I'm thrilled. There's an ecosystem beyond this room that's also involved in winning this race, many of the partners that we showed you here today. But unlike the Olympics, where if you come in second in the race and they give you a silver metal, there's no silver for second here. We must win this race. And that we, yes, as IonQ. I'm here for a reason to help win that race. But we as a country, we as an economy, we as a way of life, have to win this race. It's that critical. It's that consequential.

And so a blessing for me, I've had a life of service. I feel this role here is just a continuation of that service to a mission above self. Yes, we're a company. Yes, we want to impress you with our earnings and our growth, which we are confident we will. But what really generates my passion here is that focus on winning that race for the country, for our way of life. And so very, very proud to be part of the team, Niccolo. Thank you for pulling this team together.

Thank you for joining us, Robert, and thank you all for being on stage with me. And I'm going to move on to close our session here. So I feel that it's important to be a disciplined business when you're a public company, and we're going to finish exactly on time today, which I feel is a real feat. I want to thank our team for organizing a fantastic morning. I'm going to tell you a little bit about why I'm so excited to be here and why I'm so excited about where we're going.

As you just heard from Robert, this is not just about national security, but also national economic security. There is no aspect of applied science that we don't positively impact. This is an amazing company. Our employees love getting up to work in the morning. Our whole team does because no matter what your thing is, whether it's pharmaceuticals through to logistics through to cryptography, through to defense through to material science, through to sustainability, you make a bigger impact here than you will or can anywhere else. We are absolutely in it to win it, as I think you've seen this morning. We have shown this year that we will absolutely spend money to make sure that happens and to move things to the left on our road map because time is everything. It's not time, we're actually not that worried about competitors, as you've heard, a 5-year lead is an astonishing one.

Steve Jobs, '07 launched this thing called the iPhone. Some of you in the room might have it. And he said at the time, I think I have a 2-year lead over Nokia and RIM. And that 2-year lead converged and converted into a $4 trillion market cap difference, right? I think we have a 5-year lead. And we're going to continue to press our advantage by investing appropriately.

The reason the lead matters so much, as I said, is not about commercial competitors, it's about nation states. And nation states are, of course, ferocious competitors. IonQ is tightening our security protocols, if you will, because what we're doing impacts so very much. You've seen today also that the very best talent in the world wants to be here, right? Rick Muller only applied to IonQ. That tells you a lot about what he's seen in the last 26 years, looking at the government's quantum programs and what they've invested in as well as how they've interfaced with other companies.

You've seen that A+s want to work with A+s. And so the Chris Monroes and Chris Balances and Mihir Bhaskars and many, many more that we have in our applications team, Martin, Marco, Rick, et cetera. And there's a whole another layer or 2 below that who don't necessarily report to me directly as they say, but are equally vital in continuing to prevail and advance our lead. Everyone wants to be here because everyone knows that 1 plus 1 equals 30, right? We have all of the world record holders at this company for Fidelity, right?

Chris Monroe used to hold that record until, ironically, the other Chris at our firm stole it away from him. We also have all the world record holders for -- and I never get the exact phrase right, but basically Quantum networking transmission speed was held by Mihir Bhaskar until, guess what, Chris Monroe stole it away from him at his lab at Duke. How amazing is that, right? We have all the world record holders at our firm. And that gives us a darn good chance of holding all the world records for the next 5 years and the next 10 years.

Success begets success in every industry that has this amount of applied science meets fundamental science, meets great engineering, meets commercialization. And you've seen today how extensive our lead is not only in quantum computing, but how extensive it is in quantum networking. Now you heard from Inder and Jordan and Gregoire and Marco about the criticality of quantum key distribution for our nation and for our corporates. Everything I'm saying today applies to the Five Eyes and to NATO and all allies. At the end of the day, the cybersecurity market is truly enormous. It's enormous today. Everybody needs QKD today. It may not be the only thing you need, but it's definitely one of the things that everybody needs.

When I think about who wins computing revolutions, I said at the start of the day that it's all about miniaturization, unit economics and mass market penetration. This is the only firm on the quantum computing, if you will, revolution that is actually leading on all of those vectors. The most logical qubits, the lowest cost for a fully fault tolerant machine, unbelievably low cost per logical qubit. If you look at some of the data we shared today and divide numbers by the numbers of logical qubits we have, you come to 2 orders of magnitude at least as a lead. And this matters, right? Because as we've seen in every revolution, the more people that use things, the more that gets built on top of it, right?

Collaboration matters. Chris Ballance and I will be in the U.K. together next week just as we have been here together because what the U.S. and U.K. do together matters a lot and what the Five Eyes do together matters a lot. And setting IonQ with Oxford Ionics, Lightsynq and our friends at Capella as the opportunity to drive advancements in collaboration and cooperation between nations and between agencies is a dramatic accelerant as well as differentiation. The talent we've assembled is not only about the hardware, the compiler, the cybersecurity or the computing but also the application layer. And I said at the start today that I think quantum machine learning, quantum AI is probably going to drive even more upside than we have demonstrated on our application road map.

When I think about the next 5 years, IonQ is positioned to continue to win, continue to advance our lead and accelerate it. I think it is very likely that we're going to look back on 2025 in 2035, the way we look back on 2015 from today's vantage point. And we're going to say, how crazy was it that we thought that nuclear reactors that are powering data centers, the size of football fields is the future. The future is going to be power saving, cost saving and strong AI models that are perfect for quantum computers, which, by the way, the regulators like, too, right, because quantum computing, despite being about super position actually is pretty deterministic. Like we know what the algorithms that we run actually do.

So EU is going to like that. U.S. probably is going to like that. I think we're going to move into a quantum world. Yes, I agree. CPUs and GPUs are still on our phone. QPUs, CPUs and GPUs will grow the total compute market together. But there's no doubt that every time you move to more powerful machines, the majority of the value capture goes toward the leader in that sector. This is an industry that will have the same network effects of everything else in the tech sector, right? There will not be 45 companies in the CPU space, the GPU space, the QPU space that succeed. There will be one big one. There'll be a second place, and there might be some people fighting over the last 5% of the market share, right? We absolutely believe we're going to be the 800-pound gorilla of the business of quantum. That's quantum computing, quantum networking, quantum sensing, quantum and space, how this connects together. We're the only company that can do it all, can win it all and stitch it all together.

And with that, I'm going to thank you so much for your attention this morning. We look forward to having lunch with everyone and allowing you to attempt to ask us the questions. It would be a Reg FD violation if we answered them. Other than that, thank you so much for your time. I really appreciate it and look forward to working with them. Thank you for your support, and thank you for your trust.

Good day, and welcome to the IonQ Second Quarter 2025 Earnings Call. [Operator Instructions] Please note this event is being recorded.

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

Good afternoon, everyone, and welcome to IonQ's Second Quarter 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; Thomas Kramer, our Chief Financial Officer; Jordan Shapiro, our President and General Manager of Quantum Networking; Frank Backes, President of Capella; and Dean Kassmann, our Senior Vice President of Engineering and Technology. By now, everyone should have access to the company's second quarter 2025 earnings press release issued this afternoon, which is available on the Investor Relations section of our website at investors.ionq.com.

Please note that on today's call, management will refer to adjusted EBITDA, which is a non-GAAP financial measure. While the company believes this non-GAAP financial measure provides 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 to its closest comparable GAAP measure.

During the call, we will discuss our business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in our 10-Q that we have filed with the SEC today. We undertake no obligation to revise any statements to reflect changes that occur after this call, except as required by law.

Now I'll turn it over to Niccolo de Masi, Chairman and CEO of IonQ.

Good afternoon, everyone, and thank you for joining us.

I would like to begin today's call with an update from our Board, which earlier today announced my appointment as Chairman. Peter Chapman, our previous Chairman, has now stepped down from his position at IonQ. I want to thank Peter for his long-time service to IonQ over the last 6 years and wish him the very best in his retirement from IonQ. I'm honored to receive this further vote of confidence in me by the Board as IonQ continues to extend its leadership in Quantum Computing and Quantum Networking. As I take on these additional responsibilities, I'm excited to continue executing on our strategic priorities and extending IonQ's leadership position in the quantum era. IonQ is experiencing incredible momentum, and I've never been more confident in our potential as we have look ahead.

With that, let's get into our latest results. We had an exciting quarter at IonQ. Revenue beat the top end of guidance by 15%, and we completed the largest capital raise from a single institution in the quantum industry, growing our net cash position by $1 billion. While our CFO will detail last month's investment from an affiliate of Susquehanna in greater detail, the $1 billion investment was closed at a premium to the prior market close. It is an endorsement of all we have achieved thus far and are poised to deliver in the coming quarters and years.

This quarter, we significantly expanded our global footprint, solidifying our role as the partner of choice by countries building their quantum economies. We signed an MOU designed to advance quantum computing in Japan with AIST's G-QuAT, the country's premier R&D center for quantum and AI. We were also recently named the primary quantum partner by South Korea's KISTI Institute to build their National Quantum Center of Excellence. In the U.S., we announced a $22 million deal to build the first commercial quantum computing and networking hub in America with EPB, a pioneering power and telecommunications company. Additionally, our partnership with the U.S. government continues with our selection by DARPA to help inform quantum industry standards.

Beyond building these ecosystem partnerships, we are proving our value on critical commercial applications. For example, we launched a world-first collaboration with AstraZeneca, AWS and NVIDIA that demonstrated a 20x performance speed up for a key drug development workflow, showcasing practical quantum advantage. IonQ is also tackling critical national energy issues in partnership with Oak Ridge National Laboratory and the U.S. Department of Energy. We have developed a new hybrid quantum classical computing approach that helps determine the optimal schedule for power generators to meet electricity demand at minimal cost. This accomplishment establishes a clear path for our systems to address the staggering 60% of energy currently lost due to grid inefficiencies.

As we continue shaping the global quantum landscape, my prepared remarks today will focus on 2 key areas: first, our tremendous strategic progress; and second, the strides we're making to attract the world's top quantum talent. I'm pleased to report that our strategy has progressed rapidly and gained considerable momentum this past quarter. By our acquisition of Lightsynq and planned acquisition of Oxford Ionics, we have created the most advanced, accelerated and powerful quantum computing road map in the world. As we outlined on our webinar on June 9, we believe the combination of IonQ hardware and software prowess, Oxford's implementation of an ion trap on a chip provides the team, IP technology momentum to achieve 800 logical qubits in 2027 and 80,000 logical qubits in 2030. We already have a manufacturing center in Seattle and with the anticipated addition of Oxford Ionics in the U.K., we have an additional site to expand both core computing R&D and manufacturing for EMEA.

We also announced the close of our acquisition of Capella in July, representing a significant step forward in recognizing our vision of a space-based quantum key distribution network. Frank Backes, CEO of Capella, will speak to this in more detail shortly. All of my colleagues, both veteran and new, are tremendously excited about the power of our talent density and combined capabilities. There is room for upside in our road map as we continue to integrate and operationalize our technologies. But best of all is a truly fantastic combination of low bill of material costs and near limitless extensibility. These attributes of IonQ's quantum computing approach are protected by over 1,000 patents and patents pending, ensuring winning unit economics at every stage of the quantum revolution.

Our road map assumes Oxford Ionics can reach 2 million qubits per chip. However, our ambitions are to continue increasing ion density and driving down costs on Oxford Ionics chips to someday have 10 million ion traps on a single chip. Then using IonQ's modular scaling approach, we will break the single processor barrier. By connecting 2 quantum processors via Lightsynq photonic interconnect technology, we plan to scale to tens of millions of logical qubits and deliver immense computational power.

IonQ's founders have been working on ion traps since the mid-1990s. We find that many announcements from competitors today reflect the progress our founders had made by 2010 or even as far back as 2001. Our lead enabled us to put our machines on all major hyperscaler public clouds in 2021. Today, we have developed applications aimed at delivering commercial advantage for customers and partners such as NVIDIA, AWS, AstraZeneca, Ansys, General Dynamics, Oak Ridge and many more. We are vertically integrated with decades of engineering improvements under our belt and decades more to come.

The beautiful thing about IonQ's quantum computers is they have worked since before we went public, and we've sold powerful systems for running real-world applications that customers are taking advantage of today. We expect our bill of materials cost to remain in the 8 figures even when we have 80,000 logical qubits and millions of physical qubits. We think constantly about unit economics as the history of computing shows that smaller, energy-efficient, easily operable, low-cost computers always win. It is, of course, also enormously helpful to have the most powerful and useful computers as well, ones that have the highest fidelity and the lowest errors, so the most impactful applications can run on them.

We also made very tangible progress on delivering our #AQ 64 benchmark, the primary technical milestone we set for 2025, and all indications are that will be reached in the near term. Meanwhile, our Quantum Networking vision has expanded considerably this past quarter with the acquisitions of ID Quantique, Capella and Lightsynq. We believe our Quantum Networking solutions will be table stakes, not only in a world where RSA encryption can be cracked by quantum computers, but also today to protect against the best resourced classical cybersecurity boasts.

Capella extends both our quantum computing and Quantum Networking vision into space in a critical race to secure our nation against global bad actors. Our networking products are production grade and are used by some of the world's household name financial services, telecom and government agencies. IonQ Quantum Networking offers the ultimate in communication security. It's based on a simple law of physics, any attempt to ease drop on the quantum channel disturbs the single, guaranteeing immediate detection. This isn't just a better firewall. It's a better paradigm that provides our customers with absolute certainty that their communications lines are secure, something no classical system can offer.

Moving on now to talent. I'll begin with the wonderful news that our Co-Founder, Dr. Chris Monroe, has assumed the role of Chief Scientific Advisor. He holds the current world record for remote entanglement generation and trapped ion technology, an achievement that opens the door to scalable quantum networks. He'll be spending significant time with our other world record holder in this area, Dr. Mihir Bhaskar, former CEO and Co-Founder of Lightsynq. Dr. Monroe, of course, also previously held a world record for qubit fidelity, a record currently held by Dr. Chris Ballance at Oxford Ionics. It's, of course, both exciting and delightful that IonQ now has world record holders in all our key scaling vectors collaborating on a daily basis to accelerate our momentum towards full fault tolerance.

On the networking side, we're also very pleased that ID Quantique's founder, Dr. Gregoire Ribordy, will remain in his role post close to continue building on his 20 years of leadership in Quantum Networking. Based in our Geneva office, Dr. Ribordy is a giant of the QKD space and has been shipping ever more impressive generations of his quantum networking equipment for over a decade now. World-renowned quantum researcher and industry figure, Dr. Marco Pistoia, joined us from JPMorgan Chase, where he previously ran all technology research at the biggest bank in the world. Dr. Pistoia is uniquely able to support our global efforts in financial services from both quantum computing and networking perspectives.

Dr. Rick Muller has joined us to head up Quantum Computing Systems development. As many of you know, Dr. Muller was formerly the Director of IARPA, our nation's Intelligence Advanced Research Projects Activity organization, which is tasked with leading high-risk, high payoff research for the intelligence community. Dr. Muller is also a distinguished researcher originally from Caltech with over 20 years of experience at Sandia National Labs.

Finally, I'm excited that Paul Dacier has joined the company as Chief Legal Officer and Corporate Secretary for IonQ. For over 26 years, Paul was the General Counsel of EMC Corporation, where he was instrumental in driving significant growth for the company. During his tenure, revenue grew from $170 million to $25 billion in 2016. Employees grew from 750 to 68,000, and the company's market cap grew from $100 million to $55 billion.

As I've said before, I believe talent is the proverbial Warren Buffett weighing machine, most relevant to any company's long-term prospects. It's tremendously validating and an outstanding vote of confidence in IonQ's progress to have such towering world-class talent depart from highly respected roles to become our colleagues at IonQ. With the support of our market-making talent, our customer ecosystem continues to grow as we build the world's leading quantum computing and networking offerings. We expect to drive our long-term success from our ability to land and expand with both our computing and networking solutions.

As a final comment, with the strongest balance sheet thus far in IonQ history, we have the ability to continue leading, pioneering and growing our ecosystem in both quantum computing and quantum networking worldwide.

I now hand you over to Jordan Shapiro, President and General Manager of IonQ Quantum Networking, who will touch on our networking highlights this quarter.

Thank you, Niccolo.

I'm excited to share that after announcing the formation of our Quantum Networking division last quarter, we are already making significant progress in positioning IonQ as the leading provider of the quantum Internet. The takeaways for today are as follows: one, Quantum Networking provides the ultimate in cybersecurity today for customers' intent on long-term security for data transmission, protecting against sophisticated classical threats from bad actors worldwide. Quantum Key Distribution or QKD, is the only provably secure protection against potential future hacking attempts made by quantum computers.

Two, IonQ's QKD products are the only ones in the world to have any form of formal security certification. Three, IonQ is the only company offering commercial quantum networks at scale today that leverage quantum entanglement, meaning they can be used to connect quantum computers and other quantum devices. Four, IonQ's quantum computers are the only systems that are being developed with quantum networking built in.

As Niccolo mentioned, our QKD products are already being used in production by leading governments, financial institutions, telecom providers, energy companies and enterprises. Customers buy QKD because it is the only technology that uses the principles of quantum physics to ensure that no one can steal their data. Software techniques like post-quantum cryptography algorithms, while offering some protection are not provably secure. Over time, their security is decreasing and vulnerabilities are rising. Our customers trust IonQ because our QKD products are already manufactured at scale, fit into a 1-unit high rack mountable server and are used every day to protect information across the globe.

Moreover, our cutting-edge Clavis devices produced by ID Quantique received the world's first-ever security certification for QKD earlier this year via South Korea's National Intelligence Service. Meanwhile, IonQ is the only company building the quantum Internet at commercial scale. We are working with customers to bring all forms of quantum edge devices onto our quantum networks from security endpoints to quantum computers. IonQ customers will soon be able to cluster quantum computers for extremely powerful processing, send ultra secure data from one quantum computer to another and seamlessly transmit data from quantum sensors to quantum computers.

A key milestone in this road map is our ability to build quantum networks over standard telecom fiber, which requires technology to convert wavelengths from these quantum devices to wavelengths compatible with classical networks. We are working on that technology with customers today and expect to be the first company in the world to achieve it. Across all dimensions, the infrastructure for the quantum Internet is being built here at IonQ.

Now I'd like to hand the call over to Frank Backes, CEO of Capella.

Thank you, Jordan.

As both Jordan and Niccolo have highlighted, we are witnessing a revolution in the global computing and networking landscape driven by the maturation and deployment of quantum technologies. Today, I'd like to offer the perspective of the space sector on how quantum-enhanced space systems and sensors are poised to transform the future of computing and networking infrastructure, integrating advanced capabilities into everyday applications.

Newly a part of IonQ, Capella is focused on taking quantum technologies into orbit. We design, manufacture, own and operate a proliferated constellation of low earth orbit satellites that we plan to outfit with quantum communication devices, quantum sensors and one day quantum computers. We believe that our quantum-enabled satellites will be highly differentiated in the market, paving the way for a new generation of ultra secure, extremely powerful computing and networking infrastructure with a global footprint.

Capella has already proven we can put production-grade satellites into orbit. Today, we are producing streams of earth observation data with a constellation of satellites that operate day or night through clouds and in other challenging conditions, bringing critical information to leading defense, government and enterprise customers. IonQ will be expanding Capella's proliferated low earth orbit constellation to meet global demand.

The integration of IonQ Technologies means we will be able to collect and process data in never before seen ways and transmit that data in a way that is probably secure even from the threat of quantum computers. We are committed to pioneering the new frontier of quantum technologies in space, providing our customers with an accelerated path to secure, high-performance and resilient solutions for the future.

Now I'd like to hand the call over to Thomas Kramer, IonQ's CFO.

Thank you, Niccolo, Jordan and Frank.

It has been truly an exciting quarter on the commercial front, and our financials are no exception. Let's walk through this quarter's financial results in more detail. As Niccolo mentioned, we had a fantastic quarter, recognizing revenue of $20.7 million, beating the high end of our guidance by 15%. In addition, we are making new investments to accelerate our road map as well as entering new segments of the market, and we expect to continue to invest in the ecosystems that support our customers. Accordingly, we saw an adjusted EBITDA loss for the second quarter of $36.5 million compared to a $23.7 million loss in the prior-year period.

To understand the key drivers behind that number, let's turn to our expenses. Total operating costs for the second quarter were $181.3 million, up 201% from $60.3 million in the prior-year period, but within our plan for the year. To break this down further, our research and development costs for the second quarter were $103.4 million, up 231% from $31.2 million in the prior-year period. Recall that we are investing heavily in R&D and growing our R&D headcount to support our road map and customer commitments.

Our sales and marketing costs in the second quarter were $10.9 million, up 77% from $6.1 million in the prior-year period. This increase was due to us growing both our marketing and sales teams as we continue investing in our commercial efforts. Our general and administrative costs in the second quarter were $48.1 million, up 269% from $13.1 million in the prior-year period. These increases were primarily driven by an increase in professional services and payroll-related expenses.

All of this resulted in a net loss of $177.5 million in the second quarter compared to a $37.6 million net loss in the prior-year period. Accounting for warrants can be confusing, so we have always pointed out the impact they have on our results. This Q2 loss includes a noncash loss of $39.6 million for the second quarter related to the fair value of our warrant liabilities. This is a pure accounting artifact that is not representative of the operating performance of our business. These results also include growth in stock-based compensation expense related to our headcount growth, which was $99.2 million for the second quarter compared to $21 million in the prior-year period. This elevated stock-based compensation expense was due primarily to incentives issued to newly acquired and hired employees.

Turning now to our balance sheet. Cash, cash equivalents and investments as of June 30, 2025, were $656.8 million. As we announced previously, in July, we raised $1 billion in an equity offering priced at a 25% premium above our closing price for the prior trading session. This investment, to our knowledge, is the largest investment by a single investor into quantum computing and networking, and we are honored to be the recipient. The equity offering also included 7-year warrants at $99.88 per share, a strong indication of confidence in IonQ's longer-term prospects. Our pro forma cash balance as of July 9, 2025, was $1.6 billion, making IonQ the most well-capitalized pure-play quantum provider in the market today.

Continuing now to our financial outlook. We are increasing our revenue guidance for the full year 2025 to be between $82 million and $100 million and expect revenue for the third quarter to be between $25 million and $29 million. Last quarter, we projected an adjusted EBITDA loss of $162 million for the full year 2025. Pending the close of the Oxford Ionics acquisition, we anticipate that integration and our continued investments into to accelerate our road map will result in an increase to our cost base for the year. We envision this will widen our adjusted EBITDA loss up to 30% or a total of $211 million.

Now back to you, Niccolo.

Our customer ecosystem now includes not only the winning quantum computing road map, but also the clear global leader in quantum networking. We, in fact, expect our unit economics advantage in the fully fault tolerant era to be 1 to 2 orders of magnitude lower than competitor efforts. IonQ has commercialized considerably faster than start-ups who do not have our 30-year heritage. We were first to operate on all 3 of the Google, Amazon and Microsoft public clouds 5 years ago.

Looking forward, we believe our unit economic advantages will underpin IonQ's long-term market share leadership. IonQ also intends to accelerate its investment in our application road map, which we outlined in our June 9 webinar. Given our unparalleled unit economics at scale, we have a clear opportunity in the coming years to profitably address long hypothesized quantum classics such as the traveling salesperson problem as well as Shor's algorithm.

I'll now turn this over to the operator for Q&A.

[Operator Instructions] First question comes from Quinn Bolton with Needham & Co.

Congratulations on all the progress again this quarter. I guess I wanted to start with the revenue that came in better than expected. That's great to see. You guys are diversifying the revenue stream now with the Quantum Key Distribution, quantum networking efforts. And I was wondering if you could give us some sense how much revenue are you starting to generate from the non-quantum computing efforts in the business? And then I've got a follow-up.

So thank you for those words and a great question. We are continuing to deliver on our plans for the year, and the beat on this quarter was primarily due to 2 projects for existing customers where we've been able to accelerate the pace of implementation.

And were those mostly on the quantum computing side? Or could that include like the Air Force Research Lab on quantum networking? Just some sense on the mix. Is it still predominantly quantum computing?

It's an excellent question. But as we've said in previous quarters, many of these projects, in particular, the AFRL one contains both sides of the coin. It's quantum computing and networking.

Got it. Second question is you guys on the -- I guess, in June, you announced the acquisition of Oxford Ionics, you were selected for the DARP quantum benchmarking program back in early April. And I guess, as you guys have pivoted the road map now or accelerated the road map with Oxford Ionics, can you just sort of address how are you feeling about progressing from Stage A to Stage B in QBI?

Yes. No, I'm happy to take this. It's Niccolo. Well, look, the fantastic thing about the talent density and the technology that we've assembled at IonQ is that Oxford Ionics itself was also put into the DARPA/QBI initiative earlier this year. So IonQ is in a fantastic position overall. Both ourselves and our announced acquisition, obviously, are considered fantastic businesses in their own right. On a combined basis, we think it's, of course, an even stronger offering. So I think it's safe to say that we continue to progress as 2 shots on goal, if you will, until the acquisition closes. But once it closes, we'll be progressing as a single unified road map that we think is extremely powerful when you think about not just how many logical qubits we're going to have pretty soon, but also the unit economics involved, we feel very good about our prospects, both in Phase B and ultimately in Phase C.

Excellent. And maybe last, Niccolo, just any update on the timing of the close on Oxford Ionics. Could you just give us an update where you are on any regulatory approvals that you need? Do you still expect to close that transaction later in calendar '25?

Yes, we absolutely do still expect it to close later. This is, of course, subject to regulatory approval in the U.K. And that is proceeding constructively, but we are not able to give a precise date on this call, although I think it's safe to say that both Oxford and IonQ, of course, look forward to a closing as soon as possible.

The next question comes from Troy Jensen from Cantor Fitzgerald.

Gentlemen, congrats on all the progress and milestones here.

Thank you.

So Niccolo, maybe for you, first of all, 80,000 logical qubits by 2030. At that level, can you just talk about what type of encryption are you guys crashing? Or how advanced is the quantum computer at that point?

Yes. I mean, Troy, I think we have the leading logical qubit road map bar none on a global basis. And I say that not only because of the sheer number of logical qubits, but also the cost of a machine of that size, which is very low compared to competitors you might run into, Troy, that probably will have machines that will cost 10 or 100x more for a similar number of logical qubits. We published an application road map on June 9 at our webinar, and we showed you every year on our road map, what we can do from an applications perspective. So we're showing you what we can do even at 1,500 logical qubits. We're showing we can do at 10,000 logical qubits, and we're showing you can do, of course, at 8,000.

What I think I would highlight is these are just the known application areas that we've identified that we already are working on. As you've seen throughout the compute space, Troy, from CPUs to GPUs to now our QPUs, much of the upside and value comes from problems that you haven't thought of addressing yet. And it comes -- it kind of emerges, if you will, as an emerging phenomenon as you start solving problems with ever more doubly exponentially powerful machines as IonQ has. So I think there's tremendous upside in the app road map from quantum AI and quantum machine learning in particular. We've already made some industrial AI applications as far back as World Quantum Day on April 13, 14 earlier this year. We're continuing to make progress with a number of partners, not just in the AI space, but of course, in the drug discovery space. You saw announcements from us on protein folding as well as, of course, with AstraZeneca.

You've seen announcements with partners looking at the energy grid and optimizations there. And of course, we work closely with the Electric Power Board of Tennessee and Oak Ridge National Labs already. So I think it's safe to say that we've got a commanding lead in solving useful applications today even on just 36 qubit systems. Imagine where we're going to be in the next year, 1.5 years, 2 years as we move to 256 qubits and at some point soon, 10,000 physical qubits in combination with our friends at Oxford Ionics. It unlocks a whole world, frankly, of value add for every industry category we're in already today.

We think that you can start to do useful Shor's algorithm work probably in the 2027 time horizon, if you look at our road map, low thousands of logical qubits starts to become interesting for us on the encryption cracking front. The traveling sales sourcing problem, I believe, is about 1,000 logical qubits as well. And so a lot of work in logistics optimizations will get unlocked in the next 18 months or so. And obviously, I think if you see it before, Troy, our app team is growing as quickly as we can find the talent. We recognize that it's a unique set of skills to be able to run quantum applications on our machines and then translate those for each of the verticals that have slightly different problems that we've gone after. But as I mentioned in my prepared remarks, it's a key investment area for us. So we recognize that the path for growth for us goes right through our applications in all these different areas.

Great answers. Just like a follow-up and kind of a couple of things together here. Just can you talk about just the acquisitions you've done? I think it's like 6 now, integrating all these businesses. I've seen companies struggle doing 1 or 2 acquisitions, you guys doing a lot at the same time here. You got a lot of money on your balance sheet. Thoughts on kind of more consolidation? Or if you could just address that topic, that would be great.

Yes. I mean, look, we have a couple of things. So I've made more than 50 acquisitions in my career as a public company leader across over a dozen public companies. And so I'd like to think we get better at these things over time. You heard from Frank Backes, who is actually on this call. Frank and I were very focused on cultural fit early on. We're all professional managers of our firm. We both want to make the industrial logic work. It's the same with Oxford Ionics and Lightsynq and our friends at Qubitech and Entangled Networks from earlier this year and last year.

And what we're finding actually is 1 plus 1 doesn't just equal 3, it equals 13 or 30. And there is mutual curiosity when we merge with new entities. Everyone is aligned and, of course, taking stock in an enlarged IonQ. And so everyone is able to both work together to rally on our biggest revenue opportunities, but also to continue growing their business in its own right. So we're investing in the infrastructure we need to make sure integrations go well. We've got experience on it, whether it's IT through to the actual technical road maps and of course, the soft side, if you will, of making sure that people have similar cultural definitions and understandings of success.

But honestly, we don't lose any sleep about this because there is so much to gain together. The teams are proactively excited and reaching out to one another and doing the integration, honestly, on their own in a lot of ways. So yes, I mean, look, we will continue to monitor the landscape. We now have 2 big growth vectors for our business, right, computing and networking. Networking, we're doing both on the ground, but also ground to space, space to space and space to ground, the most vulnerable pieces of our communications infrastructure.

And I think we're finding that new opportunities are unlocking themselves, frankly, every week. We have put together a unique asset and business here, right? No one else in the world can do networking on the ground, in space and computing. And right now, sovereign nations in the friendly world want more of everything that IonQ has to offer. And so we're supply limited, not demand limited, if that makes sense.

The next question comes from Joe Moore with Morgan Stanley.

I wanted to ask about Chris Monroe coming back. I am getting kind of questions about it. It seems like it's great news. He's obviously -- you characterized his capabilities, but it caused some consternation when he left. And just maybe if you could address, is there anything to sort of read into the fact that he left and then came back now?

Well, I like -- look, it's Niccolo. I'd like to say that there's something to be read into all of the tremendous talent that's joined IonQ in the past quarter. So whether it's Rick Muller or Marco Pistoia, Chris Monroe, Paul Dacier, we've also added a long list actually of VPs to the business in the last quarter in areas from business development through to actually acquisition integrations. And so I think everyone is recognizing that -- As want to work with As and talent success helps attract yet more of it.

I think, Chris, spending more time with us is a tremendous vote of confidence, not just in our computing road map, but also our networking road map. I think it speaks very highly of what he thinks about Chris Ballance and Mihir Bhaskar as well. And I think you're seeing that you've got 4 world records, if you will, held by individuals who are all at IonQ, both on the fidelity side as well as the networking side. And they want to continue pioneering the future together right here at IonQ, right?

So we're excited to have everyone. We welcome ever more world-class talent. I think we've attracted some in the organization that haven't been announced today, but continue to join us from nation's finest laboratories. And on a global basis, we're always on the lookout for the very best, most experienced everywhere from networking to computing to applications. So I'd say, look, in summary, it is, I think, a vindication of our strategy. We're excited to have Chris here, and we're excited to have everyone else that we've announced today all working together because we recognize that we're at the intersection of pioneering technology that has never done what we've done in the last decade or 2. And the next 5 years, 10 years has even more to be built together.

The next question comes from Richard Shannon with Craig-Hallum.

This is Tyler on for Richard Shannon. I was wondering, can Lightsynq be ran at room temperature for compute or sensing purposes? And if so, what is the plan for those? And I'll let you go from there. I have a follow-up.

This is Dean. So the overall technology that Lightsynq has in their quantum memories does require cryogenic kind of mild cryogenic temperatures to be able to achieve. And so they're similar to the cryogenic enhanced vacuum systems that are used in other trapped ion systems. And so it's not super exotic, but it does require lower temperatures to be able to realize that quantum memory.

We're always developing the next generation of all of our hardware. So as Dean put it, mild cryogenic, we hope becomes milder, and we hope the size also of these repeaters shrinks and it should every generation also.

Yes. And then just for you and everybody else, I do understand that diamond memories tend to be cryogenically cooled. I was just wondering if it wasn't cooled, would it be used for compute or sensing or if it always had to be. Okay. And then when you're considering the combination of Oxford Ionics and IonQ, what is the plan with these 2 different processors? Is this -- are we keeping these separate? Or are we putting these together? And then what are the goalposts for emergence? And if you can comment on Iceberg Quantum and how that relates to QBA?

So Tyler, on the 2 different technology stacks, we are absolutely integrating them together. As we look at our integration plans moving forward, right, being able to what Niccolo indicated is putting more qubits on a chip as well as the technology for the quantum memory and doing photon capture on those chips to be able to network them together. That is absolutely coupled technology on the computing side as we kind of scale out. Those different pieces come in at different parts of our road map as we move out to thousands and millions of qubits, but they're definitely intertwined as we move forward.

The next question comes from David Williams with Benchmark.

Congrats on all the really great progress. And I guess maybe first, Niccolo, can you kind of run through just kind of given how much progress you've had, all the exciting things that's going on at IonQ? Is there a way you kind of rank order what gets you most energized and maybe where you're most excited?

There's so much goodness going on in the last 6 months. I don't actually think of it that way. I think that we're in the business of quantum in every sense. And quantum for us is both on the compute side and the networking side. And we care about having the leading technical road map on both sides of the house. We also care about being the leading commercialization player or partner, if you will, on both sides of the house. And we believe that the interconnection of the 2 provides a moat that is very difficult to counteract or amount if you are a competitor of ours. The fact that we can build the world's best quantum networks, quantum computers and we can build the repeaters and we can maintain information security as it's transmitted between quantum computers gives us a phenomenal range of solutions to sell to nations and Fortune 100 companies.

If you look at the acquisitions we made and the talent we've attracted, you can see that we are investing on both sides of the house to do exactly what I said. We want to make sure we always have the leading technical road map, the best unit economics and to make sure we continue to win market share. And we'll continue to invest to achieve all 3 or 4 of those objectives. I've been delighted with every acquisition that we've consummated since I assumed this position, and I've been really delighted with the acceleration in global technical talent and talent in general that we've been able to attract. And we're just getting started here, right? I've been in this role for 6, 7 months on a full-time basis. And so I think it bodes very well for the future. We want to carry on doing what we've done in the last 2 or 3 quarters -- in the next 2 or 3 quarters and the next 20 or 30 quarters.

The reality is, I think people tend to underestimate how much progress we are making on a monthly, quarterly and annual basis. They tend to underestimate the progress that quantum computing at IonQ is making because of the double exponential nature of improvements in every generation. And they underestimate the need for quantum networking because of the threats, if you will, from not just bad state actors in a classical sense, but because there are bad state actors that are working on so-called Q-Day and cracking RSA2048. And so both sides of our business on the ground and up in space are poised, I think, to have inflection points in the coming quarters and years.

Great. Fantastic color there. And then maybe just for you, Thomas. Given these acquisitions, how should we think about the OpEx trends and maybe the breakeven point there? Is there a potential maybe to accelerate the path to profitability maybe faster than what you thought previously, just kind of given the different revenue bases and opportunities you have in front of you?

I think that our primary objective is to accelerate the road map and also to find and delight customers because this is a giant space and whoever gets there first, and we are the leading contender will reap huge rewards. We obviously will take great care when we decide what to spend on. But right now, we've been able to contract our road map so much that this will save us a lot of money in the long term.

Yes. Look, I'd add to that. I think Thomas is spot on, right? I mean when you look at competitor announcements that have come out subsequent to our June 9 webinar. You've seen big companies putting out announcements about being 5 years behind us. And I think they're the closer competitors, honestly, in the quantum computing space. It is a commanding lead that we have been able to build in the last 6 or 7 months.

The next question is from the line of Kevin Garrigan with Rosenblatt Securities.

Let me echo my congrats on all the progress. Going off of Troy's acquisition question, any other areas of the business you can point out where you might still be missing a piece the puzzle?

Well, look, I mean, I always like to jokingly say that although I'm a physicist, I never finished the PhD. And so our superpower here is I'm not trying to defend my PhD dissertation at any point of the week. I'm happy to defend the PhD dissertations of our fantastic engineering leadership and physicists that we've both hired and acquired, right? And so we're in the early ages and era, if you will, of the quantum revolution, which is the biggest revolution in computing and networking, I think, since computer networking got going, frankly, 80 years ago.

And so as we become a bigger business, as Thomas rightly pointed out, where we see opportunities to bring road maps in and move things from -- moving things to the left effectively in our road maps, we'll always look at that. We have a fully-fledged vision, obviously, for the quantum Internet that we talked about in the last couple of calls. The quantum Internet someday will be not only quantum sensors that are capturing information, but quantum computers that are processing that information, performing calculations and quantum networks that allow you to transmit that information and keep it safe throughout the whole system. And so that overall vision is a North Star, if you will, for us. And we intend to be the leader in the quantum Internet and all of its components as that plays out and as there's an acceleration in spend, not just from governments, but from Fortune 100 and Fortune 1000 companies ultimately.

Okay. I appreciate that color. And then as a follow-up, I'm still getting a lot of investor questions regarding the intersection of quantum and AI. So wondering if you can give some details on the collaboration with AIST that is focusing on real-world quantum AI applications and what some of those applications are?

Well, let me talk more generally than just on AIST, right? So if you think about what we announced back in April at World Quantum Day, we showed real-world industrial AI examples in categories like reducing defects in steel and, of course, training generative adversarial networks to learn faster. And we're continuing to see great progress there, right? I mean you can actually look at most of our application successes this year through the lens of machine learning, whether you want to call that AI or branded AI, it depends both up to you and on the specific application.

But I would argue that when you have 20x speedups in computational drug design with NVIDIA, AWS, AstraZeneca, you're very much demonstrating machine learning and AI through our quantum systems. The pieces of problems that we're able to take down today and deliver quantum advantage on continue to expand. They are still pieces of problems and workflows as opposed to a one-stop shop for a workflow from soup to nuts from start to finish. And so you can see that we're collaborating with hyperscalers and the world's biggest GPU makers because we realize that together, we can deliver the one-stop shop, soup to nuts solution for companies in many verticals, right?

And I think you'll continue to see that, frankly. So you'll see us partnering with industry expertise. You'll see us partnering with GPU and cloud leaders. And you're also going to see us expand the lens of subsectors that we were going to work in from logistics to a fair amount of pharma into areas like financial services. We hired Marco Pistoia, who we're honored is working with us not only because he's generated a lot of IP himself, but also because, of course, he knows more about the financial services industry in quantum computing and quantum networking than probably anybody on the planet, right?

And the great thing about financial services is that ultimately, you don't need a lot of infrastructure to address really valuable problems really quickly. I talked back at the IPO about financial services and the fact that there's whole chunks of it that have been postulated for a decade or 2 to be perfect for quantum computers. We are now at the point whereby our quantum computers are big enough to start delivering that quantum advantage at scale and at speed, frankly. And so we are investing across the verticals that you've seen in our investor deck, and we've talked on prior calls, but we continue to look for new verticals.

And the delightful thing about our quantum computers is we're finding they can deliver better answers earlier every time we approach a new vertical than was previously forecast, right? And that will continue to be a trend here. I think early achievements, early signal detection, if you will, in every area, I think, is going to be a hallmark of what you see in the coming quarters from us.

[Operator Instructions] The next question is from the line of Richard Shannon from Craig-Hallum.

So how many QPU deployments are there between IonQ and Oxford Ionics worldwide? And considering you're securing data in flight, is there any plan to secure stationary data as well?

Yes. So I think the short answer is we have sold all the systems that we've ever made at IonQ, and we continue to do that. Oxford, I think, has sold a system that has been publicly disclosed. I think it's safe to say that there is incredible demand for our 256-qubit system that's around the corner and our 10,000 qubit systems on a combined basis.

The quantum networking question you're asking about securing data on the ground, absolutely, right? I'll turn this over to my colleague, Jordan, but we're obviously selling entangled quantum networking solutions and Q gate solutions every day, and we've announced a number of the larger ones. But our businesses have already got quantum networks deployed in places like Tennessee and Korea, and we continue to see incredible demand from household name financial services and telecoms organizations that recognize, as I jokingly like to put it, our quantum networking solution customers are the ones that are not in the news for data breaches. And so I think as people recognize that increasingly, we will see the demand and market penetration skyrocket, honestly. And as soon as there is a whiff of a bad state actor, if you will, making any progress whatsoever on RSA2048 cracking, I think you're going to see orders of magnitude step changes in networking demand.

That's right. And that's data in transit, not data at rest, but that's where QKD offers a massively powerful advantage for our customers in defending. And it's a particularly weak point in their security architectures today and one that we can help them shore up.

Awesome. And then with the combined companies between Oxford Ionics and IonQ, is there a way to run all of these gates in parallel? And how many of these could you effectively run the whole system in parallel using the electrical control? And what does that effectively do to your gate speed? And then also, I just want to say, I'll get off after this, but congratulations on the road map with the logical qubit counts. That's definitely not able to sustain.

Awesome. Well, I'm going to turn this over to Dean. But I think the good news is the short answer is gate speeds are going up considerably as part of this road map and acquisition and merger. But Dean, over to you on the electrical control.

Yes. Thanks, Tyler. So overall, the electronic gate control and the overall move from kind of the 1D architecture to the 2D and just the inherent way those electronic gates work allows for just a massive, I would say, increase in parallelism that can occur as you execute 2 qubit gates. And so you can expect overall throughput to really go through a step change as you go and introduce high-density kind of 2-qubit electronic gate control. And this is coupled with what Niccolo was saying is that there -- it's also just inherently faster from a gate speed perspective. And so when you're working with the qubits in those qubit-based traps, they're just simply faster. And so those 2 coupled together represent just a massive, I would say, overall throughput increase that really just drives also the unit economics that Niccolo was also mentioning before.

All right. Well, I'm going to wrap up by saying that we're pleased to have announced another quarter of progress here at IonQ. Just to recap a couple of our highlights. Firstly, we closed our quantum networking acquisitions of Lightsynq and Capella and announced the pending acquisition of Oxford Ionics, which accelerates our expected compute road map. We will achieve 800 logical qubits in 2027, 80,000 logical qubits in 2030 and expect hundreds of thousands, if not millions of logical qubits beyond that.

Secondly, we're attracting and hiring world-class talent from all walks of expertise, which we believe is the greatest indicator of long-term success that we can provide. Thirdly, we raised $1 billion in additional capital to enable IonQ to maintain its decisive lead as a full stack quantum computing and quantum networking company. Fourth, we expanded our global footprint with key government and commercial partnerships, including MOUs with Japan's AIST, G-QuAT, and South Korea's KISTI and a world-first partnership with AstraZeneca, AWS and NVIDIA, delivering a 20x drug development speed up. We're investing to proliferate our satellite constellation with a road map to quantum networking and computing in space.

And last but not least, we beat the high end of revenue guidance for Q2 by 15%. We believe the steps we have taken in 2025 to date will ultimately set the stage for IonQ's long-term leadership in both quantum computing and networking, both of which we believe to be crucially important to the future of our country's national security and national economic security.

With our closed and proposed acquisition and well-fortified balance sheet, we believe we have a clear path to millions and eventually tens of millions of qubits, leading to computing power previously unimaginable from a classical standpoint. Join us now and be the first to gain commercial advantage in your industry by leveraging the massive power of our quantum networks and computers. Thank you all for your time today, and have a great week.

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

Welcome, and thank you for joining us for today's live webinar, IonQ's Path to Large-scale Fault-tolerant Quantum Computing. We really appreciate you taking time out of your day to listen to us live. I'm Trevor Chaloux, Senior Director of Product Marketing here at IonQ, and I will be kicking us off.

Before we get started, here's a few housekeeping items. Time permitting, we're going to take a few questions at the end of the webinar. [Operator Instructions] At the end of this session, you will get a short 2- to 3-minute survey. We greatly appreciate your feedback. A recording of this webinar will be available after the presentation on our website, and registrants will be notified when it is available. Today's presentation contains forward-looking statements. We advise you to please review this language, which will be posted on the website and to review similar cautionary notes, especially in advance of making an investment decision in IonQ.

With that, I will hand it over to IonQ's CEO, Niccolo de Masi.

Thanks, Trevor, and a warm welcome to today's live viewers from across the globe. We have an exciting 45 minutes ahead. IonQ was founded with the goal of developing and delivering the world's first large-scale fault-tolerant quantum computer. Today, we are excited to share a significant update on progress towards that goal, the intent to acquire Oxford Ionics. Together with the recently closed acquisition of Lightsynq and IonQ's existing technology, Oxford Ionics technology is expected to accelerate our development road map.

Peter Chapman, IonQ's Exec Chair, laid out IonQ's position on the value of near-term quantum computers in our 2023 letter to stockholders. The near-term commercial era in quantum computing, typically 50 to 1,000 physical qubits, does not yet need fault tolerance. At IonQ, due to the very high quality of our qubits and systems, this number of qubits is more than enough to perform useful computations. This morning's announcement with AstraZeneca is a prime example of our machines' capabilities with only 36 qubits.

The hardware goals for this era are to unlock access to near-term commercially valuable applications and get to very low error levels on physical qubits to limit the amount of error correction needed later. With IonQ and Oxford Ionics technology, we achieved 99.99% average fidelity on our 2 qubit gates. This 2-qubit gate fidelity is best-in-class commercially and exceeds the highest fidelity achieved using any qubit, physical or logical across the industry.

IonQ's technology is built on exceptional quality physical qubits. With this, we can build the best logical qubits in the industry and scale to much larger numbers of logical qubits and faster because we have fewer errors to correct. At the end of the day, error correction and logical qubits are just tools for achieving higher fidelity or lower noise during computation. The full value from quantum computing comes from useful applications and large-scale usage, and that depends on 3 simple things.

Firstly, how many qubits are available for computation. Secondly, how much noise can they tolerate? And thirdly, how accurately and quickly do applications run? As we will show here today, we believe IonQ currently does lead and expect IonQ to continue to lead the market on quantity, quality and time to quality solutions for many years to come.

We, as such, expect to solve an unparalleled number of valuable enterprise applications each year. IonQ remains firmly committed to enabling our customers and unlocking value from quantum computing investments now in the initial commercial era and increasing this value exponentially every year. Since becoming the first publicly traded pure-play quantum computing company in the world in 2021, we have built a commanding lead within the industry based on our strong financials, technology and focus on commercialization. Our technology has been pioneering for over 3 decades, going all the way back to the first quantum gate operation demonstrated by IonQ Co-Founder, Dr. Chris Monroe at NIST in the 1990s. Built on that pioneering foundation, IonQ's quantum computers have consistently led the industry in performance and scale.

Thanks to our focus on innovation, we have deepened our technological moat with nearly 1,000 patents that span all areas of our core technology. Our leadership in the commercialization of our technology has afforded us a unique position and the ability to learn directly from customers about the current and future needs within the quantum market. This is true for both our pioneering quantum networking and computing road maps. Our global innovation in both of these key quantum ecosystems provides an enduring and compelling decision for our customers to work with IonQ.

We have scaled our customer-facing teams globally with both sales and customer success organizations and have successfully engaged with enterprises, governments, research labs and the academic world. Our world-class applications team has co-developed groundbreaking quantum applications to help our customers invent novel approaches to their hardest mission-critical problems. Today, we announced a 20x speed up of key pharmaceutical computation work with AstraZeneca on our fourth-generation 36-qubit IonQ Forte Enterprise quantum computer. Our next-generation computer temple will deliver vastly more compute power. With future generations of systems, we will deliver billions of times more compute power.

As I've said before, the era of narrow commercial advantage is indeed here, and the era of broad quantum advantage is just around the corner. With the opening of our Seattle facility in 2024, IonQ commissioned the first dedicated quantum computing manufacturing facility in the world, priming us to scale our production to meet current and future demand. Together, IonQ's leadership across financials, technology and commercialization places us at the forefront of a rapidly evolving market and positions us to accelerate and extend our market leadership.

In 2024 and 2025, we have grown our total addressable market, expanding further into the quantum networking market and accelerating our quantum computing road map through the acquisition of technologies and teams. Last week, we announced the completion of our acquisition of Lightsynq, a company founded by a world-leading scientists from Harvard and Amazon AWS. Lightsynq's core technology is chip-based quantum memory. We will talk more about why you need quantum memory later in this presentation.

This morning, we announced our intent to acquire Oxford Ionics. A spinout from Oxford University in the U.K., Oxford Ionics has developed a unique architecture with all electronic gate control integrated on a chip. Oxford's integrated qubit control has crucial advantages for scaling qubit counts. We will spend most of today's webinar on how the combination of technology from IonQ, Lightsynq and Oxford Ionics will create the winning quantum computer in each year and every era of quantum computing. IonQ's ecosystem stands for pioneering innovation and leadership from today through full fault tolerance with the most compelling unit economics, groundbreaking performance from applications and manufacturing simplicity and scalability.

To discuss how these acquisitions will integrate into our existing architecture, it's my pleasure to hand off to Dr. Dean Kassmann, our SVP of Engineering and Technology.

Thanks, Niccolo, and welcome, everyone. The acquisition of Lightsynq and the planned acquisition of Oxford Ionics represent a significant acceleration of our planned development work to realize our vision: to build the world's best quantum computers to solve the world's most impactful and complex problems. Now the great thing is the component technology from both companies will fit right into our existing systems, architecture and road map. IonQ has had the same basic design since we started. It's been a winning approach for almost 10 years. We're confident it's going to be a winning approach for the next 10 as well. At the heart of our strategy, we use ions as our qubits. We chose ions for a couple of really good reasons.

First, every single ion is a perfect identical copy of every other one. You can think of it another way. Our manufacturing yield is 100%. They're manufactured perfectly by nature. The second thing we liked about ions is that they have an electrical charge. So it's easy to use that charge to hold and transport the qubit right where we want it. Trapped ions have the longest coherent times in the industry as well, thanks to their natural abilities and the fact that we can build traps around them. The whole idea of ion traps isn't brand new either. It's based on decades of work in atomic clocks and leverages semiconductor manufacturing techniques. And you don't have to take our word for it. It's pretty much undisputed even by our competitors that ions have the best native physical gate fidelity of any qubit that works today.

The team at Oxford Ionics has actually set a world record on this, achieving a 2-qubit gate fidelity of 99.99%. Our whole approach has always been to use these super high-quality qubits and connect small groups of them within a single trap. Then we can connect those groups to other groups and other traps using photons or light. It's -- how today's most powerful supercomputers work. They use a distributed approach. This has been central to our scaling strategy from the very beginning. Ions give us a unique advantage here. Because we understand really well how photons and ions interact, it makes it easy to link them up.

Now our system design prioritizes making sure all of our qubits are highly connected. When they are, you get a ton of downstream benefits like compilation efficiencies and algorithmic design flexibility. Those things let us squeeze more performance out of our qubits that we have even while they might still be a bit noisy. But it also means we can use all kinds of error correction methods, both ones we all know about today as well as new ones that haven't even been invented yet.

So looking at the big picture, our long-term goal has always been to develop a fault-tolerant quantum computer. We believe our design will get us there with low overhead due to those extremely high-quality gates and high connectivity. When you combine that with constantly improving gate speeds and increasing parallel operations, we expect our approach will deliver practical solutions to big commercially valuable problems with practical time to solution.

Finally, since we're a company that's 100% focused on quantum, we've always developed hardware and software together. By working on the full stack, we can maximize the performance of our systems while making sure they're easy for customers to access and use through our cloud platforms. We've been investing heavily in these areas for years to push our technology forward. Today's news is just the next step. These investments are going to create a massive leap in both our qubit count and how fast we can scale, bringing that horizon of our first commercially available interconnected quantum computer much, much closer.

Now the acquisitions of Lightsynq and Oxford Ionics not only bring new technologies and patents to IonQ, they also deepen our bench of scientific leadership. Dr. Chris Ballance from Oxford Ionics and Dr. Mihir Bhaskar from Lightsynq and their entire teams are leaders in the field. They bring tremendous expertise, coupled with a proven entrepreneurial grit. That helps us continue innovating at a high rate. We're thrilled to bring them on board and their talented teams. I'll have them introduce themselves in just a moment.

Next, though, I want to touch on how the technologies -- how these new technologies support our existing road map. First, Oxford Ionics trap technology accelerates the qubit counts that we can put in a single trap. By moving from linear 1D architectures to a 2D qubit fabric, we expect to increase our trap densities 50 to 300x over time. That exciting scale increase comes with the same high performance, same parallel operations and features like mid-circuit measurement that are expected in all of today's quantum systems and computers.

Second, the Lightsynq memory-based photonic interconnects enable substantial improvements versus previous best-in-class approaches. Their technology increases the rate of photon-mediated and ion entanglement by up to 50x, which means higher throughput. I'll turn things over to Chris here in just a moment to explain more deeply how the technology works.

First, though, I want to explain like really where the rubber meets the road. What does all of this mean for our road map moving forward? Now historically, we've always used a metric called AQ to mark our progress. For example, our current Forte Enterprise system is at #AQ 36 with 36 physical qubits. With today's announcement, we're making a change. We're no longer going to anchor our road map against AQ. Moving forward, we'll be talking about both physical and logical qubits. And don't worry, when it comes to benchmarking, we're still on track to introduce our new approach later this year when we hit #AQ 64, just like we talked about on the last earnings call.

Now with the combined strength of IonQ, Lightsynq and Oxford Ionics, we're now projecting that we'll have 10,000 physical qubits on a single chip by 2027. A year later in 2028, we expect to have 2 of these chips interconnected for a total of 20,000 physical qubits in one system. Our path to getting these big numbers has always been about printing qubits on chips without needing anything exotic. The chips don't need to be chilled to absolute 0. We don't need some new yet to be discovered material. We just use relatively standard off-the-shelf technology that many fab houses already have today.

The technology from Lightsynq is what allows us to connect these chips together, letting us run computations across multiple quantum processors at once. The connections are made with standard fiber optics, the kind that you'd find in data centers today. A good way to think about the acquisition of Lightsynq is to compare it to when NVIDIA bought Mellanox. That move helped NVIDIA go from building single GPUs for individual PCs to creating entire data centers full of interconnected GPUs for AI. We're doing something very similar for quantum.

Now just 2 years after that, our architecture, which scales up incredibly fast by connecting these 2D chips will allow us to build a system with over 2 million physical qubits. And those 2 million physical qubits will translate up to 80,000 logical qubits. That is leagues ahead of where our competitors are projecting, especially when you consider some of their approaches haven't even run a real-world application yet. The values are based off of resource estimates using the latest error correction codes.

Importantly, by 2030, we expect these logical qubits to be incredibly accurate, capable of reaching logical error rates of better than 1 part in a trillion. And that is what you need to unlock the most powerful fault-tolerant applications. Also, the flexibility of our designs means we can tune and update the error correction codes that we use over time. So what does this all mean? It means we're likely to have, by far, the most logical qubits in every era and lowest manufacturing cost for commercial systems. Our economics are already compelling today, and they're going to get exponentially better with every new generation we ship.

We're really looking forward to unpacking this road map in more detail over the coming months as we integrate the Lightsynq team and technology and as we finalize the acquisition of Oxford Ionics and begin to integrate their powerful technology.

And so now to learn a little bit more about the Oxford Ionics technology and how it will enable scale and performance acceleration, I want to please introduce Dr. Chris Ballance, the CEO of Oxford Ionics.

Thanks, Dean. It's a pleasure to be joining you and the IonQ team on today's call. By way of introduction, I've worked at the forefront of the quantum computing industry since 2009. I did my PhD in trapped ion quantum computing at the University of Oxford, where I set multiple world records in quantum computing performance, including the highest performance quantum logic gates and the longest memory coherence time. In 2019, I founded Oxford Ionics alongside my Co-Founder, Tom Harty, and I currently serve as its CEO.

As you mentioned earlier, we share a common vision to bring the most powerful and useful quantum computers to the market. At Oxford Ionics, we spent the last 5 years tackling what we believe are the major bottlenecks to scaling this technology head on. Firstly, by pushing the limits of qubit performance; and secondly, by developing a unique integrated qubit control that allows us to control ion qubits using electronic chips and then mass manufacture them through the might of the existing semiconductor industry.

As of today, Oxford Ionics technology has demonstrated the world's highest gate fidelities with 2 qubit gate fidelities that are whopping 99.99%. This means that the fidelity of our physical qubits is better than the best logical qubits ever demonstrated. As part of IonQ, we'll have a chance to significantly accelerate the development of our road map and make our shared vision a reality.

But let's start with an important question. Why do we believe qubit performance is so critical? On one hand, it allows us to tackle commercially relevant use cases much earlier than anticipated, unlocking significant business value much sooner before we even need to turn on error correction. And then on the other hand, the moment we do turn on error correction, the overheads we require are dramatically reduced, making our systems overall less complex and ultimately requiring fewer resources to extract value. Better qubit performance gives you a near-term win and a long-term win. This is always IonQ's approach and Oxford Ionics technology accelerates that plan.

Aside from benefiting from the perfect identical nature of ions, our unique integrated all-electronic qubit control technology enables us to engineer the performance of our qubits. So how does that work? We took our inspiration from classical computer chips, the intrinsic simplicity that is at the core of the miniaturization and ever-increasing power. What we figured out is that the only way to achieve this simplicity and scale within trapped ions is to integrate everything needed to both trap and control the qubits into a classical chip built in a standard fab. Not only would this leverage existing technology, it would also allow us to leverage the power of the well-established $1 trillion semiconductor industry to manufacture and scale our quantum chips.

The architecture leverages electronics to control qubits through a technology called electronic qubit control. At the core of this architecture is an integrated antenna built into a silicon chip. When an oscillating current is applied to that antenna, the qubits experience oscillating magnetic fields that drive the quantum gates, allowing us to implement all quantum operations using electronics instead of the conventional lasers.

There are several crucial advantages to this approach. First, we can scale our architecture more easily. Electronics are easier to chip integrate than lasers, allowing us to distribute qubits on 2D grids with the ability to easily control each qubit individually. We can also run quantum operations in parallel across larger devices, reducing the run time and resources required. And finally, and this is an important one, we are the only established technology to build these chips, meaning we can leverage the tried and tested standard semiconductor manufacturing process, reducing both time to market and time to solution. Being able to leverage existing semiconductor foundries and supply chains is a massive advantage.

As we scale quantum computers to ever larger and more complex machines, it's crucial to be able to do so with high yield and that as lower cost as possible. Dean, you said it well earlier. I simply don't think that many of the other technologies out there are cost effective or production-ready. Our unique technology gives us an edge. Our architecture is incredibly scalable. Again, following in the footsteps of the classical computing industry, we've always engineered our systems as small individual unit cells can be tiled across to create larger and larger devices. This gives us the ability to increase capabilities by replicating, not reinventing designs.

We have a clear path to applying this to systems with tens of thousands of qubits in a single chip, and we've been actively working on our 256 qubit quantum processor units to date. We're incredibly excited to leverage IonQ's expertise in accelerating this technology forward. Our technology allows us to scale devices to millions of qubits by building bigger and bigger chips. But what's more, these chips can be networked by photonic interconnects to allow for distributed computing. This is where the technology from Lightsynq becomes critical to IonQ's rapid scaling strategy.

To discuss that technology, I'll hand off to Dr. Mihir Bhaskar, Senior Director of Quantum Interconnects at IonQ.

Thank you, Chris. As a brief introduction, I've been working in quantum technologies for over a decade, most recently as CEO and Co-Founder of Lightsynq Technologies. Before Lightsynq, I built and led AWS' Center for Quantum networking. And prior to that, at Harvard, my co-founders and I built the first ever quantum memory capable of speeding up a quantum network link.

Now as Dean mentioned, photonic interconnects have been a linchpin of IonQ's architecture since the very beginning. And now with the integration of Lightsynq's technology, the time horizon for commercially available distributed quantum computers exceeding 10,000 physical qubits has moved forward to 2028. The photonic interconnects we have brought to IonQ have 3 game-changing advantages. First, and most importantly, our interconnects leverage the world's best heralded quantum memories. These memories are based on photonic integrated circuits and diamond. Each nanoscale circuit element contains a quantum memory that can efficiently store quantum information carried by optical photons. I'll dive deeper on how this helps us achieve higher entanglement rates between multiple QPUs in a moment.

A second key advantage of our platform is that our memories can be fabricated by the thousands using standard fabrication processes already widely in use at professional foundries. Just as Chris explained, this unlocks cost-effective scaling of our chips to support distributed architectures carrying millions of physical qubits across multiple QPUs by the end of the decade.

And finally, photonic integrated circuits are important for everyone doing quantum computing, but they just aren't useful unless you can interface them efficiently with optical fibers. This is a major challenge across the photonics industry. Lightsynq has developed a proprietary fiber-to-chip packaging technology that reaches losses lower by about a factor of 10 than the industry standard. This low loss gives us an inherent advantage in attaining the most efficient and fastest possible networking speeds at scale.

So let's take a look at how these all comes together. The previous best-in-class approach to photonics interconnects required us to detect entangled photons coming from 2 separate QPU nodes simultaneously. This means if a photon is loss on route from 1 of the QPUs to the detection hub, the entire connection fails. And the entire system has to reset and try again and again and again. This really throttles the overall networking speed.

Lightsynq's quantum memories change everything. They completely eliminate the requirement for simultaneous photon arrival. Our memory can store photon sent by 1 QPU, while waiting to receive a photon from the second QPU, completing the link asynchronously. So you can think of our memories as the quantum analog to network buffers that are found in virtually every classical network today. It's this buffering that makes our system resilient to unavoidable losses. When you plug in realistic values for these losses, the memory that Lightsynq has brought to IonQ can provide up to a 50x boost in the overall rate of entanglement between QPUs compared to the previous best-in-class approach.

A key design choice from the very beginning is that these quantum memories don't require us to reengineer the ion trap at all or redesign our architecture. The technology drops directly into IonQ's existing photonic interconnect architecture and works with our existing and planned ion traps. The speed boost that they provide brings forward the time line for the first commercially available distributed quantum computer to 2028.

I want to emphasize that this speed boost isn't just a theoretical projection, it's proven. It's based on over a decade of research that the Lightsynq co-founders and I carried out. In 2020, we actually showed that this works. We showed a quantum networking speed up of over 50x using our memory. And in 2024, together with our colleagues at Harvard, we showed that our memory works with real telecommunications fibers like those deployed under the streets of Boston and in data centers around the globe. Our memories allow quantum computers to interconnect both inside the data center and outside into wide area networks as a key building block of the quantum Internet.

Now today, I'm beyond excited to be a part of IonQ and have Oxford Ionics joining our company. We've known for a long time that trapped ions are the leading platform for scaling out QPUs using photonic interconnects. In fact, IonQ's Co-Founder, Professor Chris Monroe, practically invented the concept of networking QPUs over a decade ago. But what most people don't realize is that over the past 5 years, the world record for high rate, high fidelity entanglement between QPUs has either been held by Chris Monroe himself or Chris Ballance and the Oxford Ionics team. That's what gets me so excited for the future of quantum computing at IonQ. The union of Lightsynq's team and technology with IonQ and Oxford Ionics represents a new best-in-class for quantum interconnects. And together, we're going to accelerate and grow our lead over the rest of the field. Ultimately, all of this underlying technology is designed with a singular focus in mind, which is to deliver systems and access to our customers, which are capable of solving their hardest and highest value problems.

To discuss how the application space for these larger fault tolerance systems will evolve, I'll pass it over to Ariel Braunstein, SVP of Product and Applications at IonQ.

Thank you, Mihir. IonQ is incredibly focused on delivering near-term value to our customers. Our partnership with Ansys is a great example. Ansys is a global leader in computer-aided engineering and their simulation program products are used across the industry. For this collaboration, we developed a new algorithm that plugs directly into one of their leading products called the LS-DYNA. We use a quantum computer to preprocess a 3D model with over 2.6 million vertices and 40 million edges. It's a large model. We then fed the quantum optimized data back into LS-DYNA. The result was an improvement in simulation performance of up to 12% on their production software workflow. More importantly, it is the trend that appear in these results that matter.

Per the slide on the screen, when comparing quantum to classic preprocessing with varying number of nodes, quantum shows an increase in simulation efficiency with every additional qubit. The hybrid workflow outperformed the current classical approach even when given thousands of times fewer nodes to work with. These simulation speedups also translate into energy and cost savings for related simulation workloads. This is an immediate value that we can deliver today on Forte Enterprise, and we expect transformative results with larger systems. Similar implementations could unlock commercial value across many industries like automotive, aerospace, supply chain, manufacturing, financial services and more.

For another powerful example of near-term application, we turn to our collaboration with NVIDIA, AstraZeneca and Amazon's AWS. Together, we tackled one of the toughest R&D challenges around accelerating drug synthesis. This collaboration focused on building a quantum accelerated computational chemistry workflow. In one of the largest quantum chemistry simulation ever executed in quantum hardware, we modeled a key step in a nickel catalyze chemical reaction used in the synthesis of small molecule drugs. The workflow integrated IonQ's Forte QPU, NVIDIA's CUDA-Q and Amazon Braket. The resulting hybrid process demonstrated at least 20x speed up in the time to solution compared to the previous state-of-the-art implementation. In an industry where development cycles can stretch over a decade and cost billions, these are meaningful results. And just note that this is again with only 36 qubits. For more details on the observed speedups, I highly encourage everybody to follow the QR code on the screen.

As our next example, let's look at AI. As LLMs grow more powerful, their computational needs are skyrocketing. Classical hardware and energy infrastructure are starting to hit a limit, a wall, and IonQ technology can help push through these limits. We developed a hybrid fine-tuning framework that combines classical AI with quantum layers, and the results are really exciting. We took a standard sentence transformer like common AI tool we all use and paired it with a quantum circuit that acts as the classification head, giving the model new quantum capabilities. The result when using common benchmarks show that this hybrid approach with as few as 18 high-quality qubits is already outperforming classical fine-tuning methods in accuracy.

This architecture brings the best of both worlds. It allows us to repurpose extremely large, extremely expensive LLM models while training them for new tasks with minimal new data. Again, this can be done today and the commercial impact will only grow with each system generation on our road map. The newly accelerated road map that we unveiled today will have a direct impact on what will become possible over the next 5 years.

What you see on this slide is only a small sample of the many categories of quantum applications that get unlocked at various stages along our road map. All of these applications unlock real commercial value over the next 3 years. In 2029, as the number of logical qubits increase and error rates continue to decrease, even more value gets unlocked from computational chemistry in pharma to material design and manufacturing, medical imaging in health care, simulation in engineering, commercial value from these applications compound and the market opportunity is vast.

As an example, one exciting application gets unlocked in multiple stages. Catalyst redesign as a use case, begins with around 2,000 logical qubits and touches so many industries from oil refining to pharma, agriculture and green energy. Today, the process of designing new catalysts is still largely trial and error as classical computers struggle to model the chemical interactions with precision. By 2028, '29, with about 2,000 logical qubits, we begin tackling a global challenge, designing a more energy-efficient fertilizer making process, which currently accounts for almost 2% of global energy use. With about 3,000 logical qubits, we expect to be able to redesign existing catalysts to use cheaper, safer and higher-performing materials, especially in pharma, refineries and automotive.

By 2029, with 4,000 logical qubits, we begin to engineer next-generation catalyst for carbon capture technology, vital for building a resilient planet. For our customers, this means faster design cycle, cheaper materials, less waste, greener processes and most importantly, less dependence on precious material, very valuable benefits. This all adds up to a very promising market opportunity for IonQ just from a single use case and new use cases will get unlocked on IonQ systems continuously, not only by IonQ, but by the entire Quantum ecosystem.

To close the presentation portion of the webinar, I will hand it back to Niccolo.

Thanks, Ariel. Before I open this up to Q&A, I wanted to talk about the fault-tolerant quantum computing era. Each era we have discussed builds upon the prior one. Like building a house, one starts with a solid foundation as the first step. We began decades ago with ions because of the numerous technical advantages we discussed today. Widely known in the industry, trapped ions have led commercialization because of their amazingly low error rates. As we move towards the early commercial fault tolerant era and ultimately very large-scale fault tolerant systems, IonQ has established itself as the clear leader, allowing it to compete with the largest tech companies on earth and win.

Let's open this up to some questions now for the team.

So thank you to everybody who submitted questions throughout this presentation. We don't have time to get to all of them, but we have worked to try to synthesize them down into a couple of core themes that many of you are very curious about. So first question, Dean, we will direct to you. The question is many questions came in about what are the commonalities between Oxford Ionics and IonQ's technologies? And how will these be integrated together?

It's a great question. So there are a lot more similarities than differences between our 2 technologies, right? We obviously are both a trapped ion quantum computing platform, right? So we rely on ions as our qubit source. We're both using barium in terms of the species for those qubits. We both have high native gate performance, high coherence times, right? There's -- because of some of those similarities, that means we also have similar technologies for our qubit state preparation and measurement. So that means our laser systems and everything are also the same. Both architectures have high connectivity in them. Our traps operate in similar vacuum environments. And our control electronics all have to both do the same kind of ion transport on comparable time scale. So all in, there's actually a tremendous number of commonalities between the 2 technologies.

Great. Thank you. And Chris, maybe we'll move to you next as we just touched on what are the commonalities here. A lot of folks are curious about the electronic qubit control that you discussed in your section of the presentation. And specifically, how is that different from the way that IonQ is controlling and operating on qubits today?

Well, the big difference is that electronics is far easier to integrate into chips than lasers. So this means that the subsystems you need to trap and control the qubits can be integrated together into a single chip that can be built in a semiconductor fab. Ultimately, the semiconductor industry has been integrating electronics into chips for a tremendously long time. It's much easier to do that than highly precise coherent control lasers. And what's interesting is that there's a really high barrier to entry to get electronic qubit control working. But once you have it working, there's a much, much lower cost of scaling. You're ultimately just building out classical chips on a standard semiconductor fab, and you can do these things without any new production facilities. We can really print these things off at scale.

Great. Thank you. Let's move to find a question for you, Mihir. So the intent to acquire Lightsynq was already announced, and there was discussions around how Lightsynq would integrate into IonQ's existing technology. With bringing Oxford Ionics on board as well, will the Lightsynq technology need to be further developed to support this combined architecture in the future?

Thanks, Trevor. No, the quantum memory was designed with qubit modality interoperability in mind. That was actually a fundamental design choice we took when we founded Lightsynq. And really, there are 2 key features of our technology, which enable us to do this. So first, we have a proven technology for photon wavelength conversion. This allows us to convert the wavelength of a single photon from one wavelength or color to another wavelength or color. And we've shown that this works in the past that we can make our memory compatible, for example, with the wavelengths that are already used in telecommunications infrastructure.

And second, unlike competing memory technologies, our memories are very broadband. And I mean that in the same way as we think of bandwidth in networking today. If you have a gigabit connection, you try and plug it into a megabit router, you're going to have a problem. And our memory, our interconnect is much more broadband than either of the QPU technologies. And so it's compatible now and for many future generations to come. So together, these 2 features really allow us to seamlessly integrate IonQ and Oxford Ionic systems. And as an added bonus, we're actually able to support cross-modal networking as well for use cases like we're delivering to the Air Force Research Lab.

Lots of questions came in on the application section, Ariel. So maybe we'll take a pivot to you here. Specifically, there was a lot of applications listed on both the last slide and the slides in your section. Folks are curious, what are those applications? And what is it that makes them great or ideal for how we've mapped them against our road map?

Thank you. So this has been the focus of our attention for the last 4 years, really focusing on understanding what makes great application for quantum computers. And at IonQ, we designed the hardware in service of the applications, in service of the commercial value. So I'd say, at large, we can divide quantum application in 2 large categories. One category is things that we can do better with quantum and better can be faster, cheaper, higher precision, any access, less energy consumption, so better. And the second category is things that are just not possible in classical computing, where you enable something that was previously impossible to do.

A few things that are important is that quantum applications never live by themselves. It's always part of a larger workflow that quantum needs to integrate with. So having domain expertise in both quantum and in the specific business, the domain that you're trying to innovate and the integration in that workflow is critical. So partnership, as you can see, we always emphasize the quality of our partnerships because those matter the most.

Other things that matter is the best challenges for -- that quantum can solve are those problems that grow exponentially in complexity. Therefore, classical computing can never catch up. And those are the best opportunity to start opening the door for quantum and start showing things that start with doing something better and end up being things that you could not do later on. The size of the impact matter. Nobody wants to invest a large amount of efforts in building new infrastructure unless it is worth it at the end of the day. So finding those opportunities that have big returns at the end of them.

And I think that, as I said in the example about catalyst redesign, things that progress, things that scale as quantum gets larger and more powerful are better opportunities than things that just get unlocked and stay constant. So these, I would say, are the best characteristics of what makes a good quantum application.

Yes. Makes sense. Thank you, Ariel. Unsurprisingly, lots and lots of questions came in on the road map, Dean. So there were some new numbers shared. Folks are noting that this is the first time IonQ has started talking about logical qubit targets as well as performance. And so I think there's other road maps that are out there from our competitive set and people are just trying to digest how does what we have shared today compare with the road maps that exist out in market from other modalities?

So right, what we've talked about today, what I presented in terms of our technical capabilities and kind of numbers going forward is based off of our proposed thinking and integration plan over the next 5 years, right, with the Lightsynq technology, the Oxford Ionics technology, it's what gets us to 2 million qubits by the end of the decade with roughly 80,000 logical qubits, right? And that's based off of resource estimation techniques with the latest codes, right? To my knowledge, these are the highest numbers for both physical and logical qubits that have been announced by any commercial system, right, with any company in the world, right? So IBM, for instance, their road map is trying to develop a 2,000 qubit quantum computer by 2033, right? And so that gives you a feel for what we're proposing and what we've kind of laid out compared to others.

Great. And you noted in your presentation, we will continue to unpack this road map in the coming months. And for all of you watching live, please keep your eye on our website as we will continue to update with the road map that you saw today and follow-on information.

Okay. I think we have time for maybe 2 more questions here. And so while we're on the road map theme, maybe, Chris, we will ask you a question. Specifically, you had a road map come out fairly recently at Oxford Ionics that talked about some targets. How does the acquisition from IonQ potentially impact that road map? Does it impact that road map?

Well, the combination of IonQ, Lightsynq and Oxford Ionics technology significantly accelerates scaling and productization. So this is not 1 plus 1 equals 2 or even 1 plus 1 equals 3. This is 1 plus 1 equals 10. By tapping into IonQ's existing engineering and production capabilities, we believe we can not only deliver significantly -- deliver the previously announced road map targets, but significantly extend our road map going forward. And particularly, the inclusion of quantum memory enables photonic networks that will drive scale sooner than we would have been able to do independently all the way through to supporting the 2 million qubit target by 2030.

Great. That's exciting, the extension of what you were building already. Great. All right. So why don't we do one last question? And Mihir, folks, I think as you were answering your first questions, there were some follow-ups that came in. There's a lot of talk about how Lightsynq is going to improve upon the work that is best-in-class and the work that IonQ has done before. So can you talk a little bit about kind of where those improvements are coming from? Like what is it that this is bringing?

Yes. So here, I'm referring to best-in-class -- our previous best-in-class as the academic work that's been going on. So for example, Chris Monroe's lab at Duke. Just a few months ago, he's lab set the world record for high fidelity high rate between a trapped ion using a photonic interconnect. And actually prior to that, since about 2020, the record had been held by Chris Ballance in the Oxford team. So these type of work represents, [ bleeding edge ] research, but it still needs to be faster in order to connect QPUs so that we can actually use them in a distributed computing contacts.

And this is where the memory comes in. And so -- how does that work? Well, the way that both Chris Monroe and Chris Ballance and everyone has been doing this is by having 2 QPUs in [indiscernible] entangled photons and by taking this 2 entangled photons and combining them at a detection hub. And if and only if these photons arrive simultaneously, do you have a successful generation of entanglement between the processors. If you have losses in your system, which you always do in any optical system, you just cannot get rid of all of the losses, and you have to try and try again until you have that simultaneous arrival.

And so this is where the memory comes in. If you replace that detection hub or you actually add to that detection hub a memory that's capable of storing a photon, so the first photon that arrives gets loaded in memory while you wait for the second photon, then you have a big speed up in the rate of entanglement generation. And so that is how our solution kind of improves upon the previous best-in-class.

Great. And I think with that, we will wrap up the webinar. Again, thank you to everybody who submitted questions. Unfortunately, we didn't have the time to get to everything. We will try our best to follow up with additional resources to help answer what many of you are curious about. At the end of the day, this is a very exciting moment for IonQ, and we appreciate you all taking the time out of your day to join us live. We will notify you when a recording of this is made available. Thank you again.

Thank you, everyone.