IonQ, Inc.

Welcome to the IonQ fourth quarter 2025 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touchtone phone. To withdraw your question, please press star, then two. please note this event is being recorded. I would now like to turn the conference over to Hanley D'Onofrio, Director of Investor Relations. Please go ahead.

Good afternoon, everyone, and welcome to INQ's fourth quarter and full year 2025 earnings call. My name is Hanley D'Onofrio, and I'm the Investor Relations Director here at INQ. I'm pleased to be joined on today's call by Niccolo DeMasi, INQ's Chairman and Chief Executive Officer, and Inder Singh, INQ'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.inq.com. Please note that on today's call, management will refer to non-GAAP financial measures. While the company believes these non-GAAP financial measures provide useful information for investors, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. You are directed to our earnings release for a reconciliation of adjusted EBITDA and adjusted EPS to the closest comparable GAAP measures. During the call, we will discuss our business outlook and make forward-looking statements, including those regarding our guidance for 2026. These comments are based on our predictions and expectations as of today and are not guarantees of future performance. Actual events or results could differ materially due to a number of risks and uncertainties. Therefore, we 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 DeMasi, 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 allied geographies. INQ is the world's only full-stack 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. INQ 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 INQ but a historic one 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 eight 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 three times that of 2024. Commensurately strong investor interest allowed us to fortify our balance sheet with the two largest capital raises from a single investor in quantum history. Quantum is indeed now, and INQ 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. Skywater is the leading quantum foundry in the world, commercially supporting not only INQ, but also more than a dozen other quantum and DOW programs. By leveraging Skywater's unique expertise in pioneering quantum semiconductor scaling within secure, trusted environments, we will be positioned to accelerate manufacturability of INQ's entire quantum platform roadmap. However, our mission extends beyond INQ 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 INQ Skywater webinar last month, we laid out the fact that INQ 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 Skywater is part of the INQ family, we will become the largest quantum merchant supplier in the world, with Thomas Sonderman 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 I&Q 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, INQ demonstrated the highest performance quantum gates in any system platform and by a wide margin. 99.99% two-qubit 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 qubits and gate operations, ours are based on physics that was settled 25 years ago. Our fidelity advantage translates into a powerful and an 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, INQ is up to 1,000 times faster than the leading superconducting system on reaching the solution. We also see a massive speed advantage and signal processing and optimization tasks with up to a 10,000 times faster solution on INQ 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 INQ is delivering in today's competitive landscape, and we're just getting started. Our near-term roadmap builds to 1,600 fault-tolerant logical qubits 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 roadmap announced last fall. Best 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 INQ's full-scale system cost, which is two 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 INQ is poised and focused on delivering. In Q4, 2026, we are targeting to demonstrate an operational 256 qubit system, which will be our sixth generation machine in the market. With our world leading two qubit 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 qubit-to-photon frequency conversion in 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 one 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 operate 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've successfully reduced our clock size by 6x while maintaining similar performance, a breakthrough that paves the way for integration into satellite payloads. Together, INQ's market-leading quantum sensing technologies complement our quantum computing and quantum networking infrastructure to position INQ as the partner of choice for the mission-critical needs of defense, aerospace, and sovereign nation customers. We bolstered our INQ federal team with the appointment of Katie Arrington as our CIO, until recently the acting CIO of the Department of War, and adding General John Raymond to our board, the first chief of space operations for the United States Space Force. Rick Muller joined last year also, having until then been the director of IARPA, Dean Acostic joined to run communications and government relations, having previously held the same role at Lockheed Martin. The collective expertise of these leaders uniquely positions INQ to navigate the complexities of the federal landscape and win large-scale, mission-critical federal contracts. Geographically, we deepen momentum in South Korea through our QKD national security accreditation and KISD system sale win. where INQ 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 four years and four generations of INQ systems. In the EU, we struck a partnership with leading autonomous vehicle company Einride of Sweden and incorporated INQ Italy under the leadership of Dr. Marco Pistoia, the former head of quantum at J.P. Morgan. 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. Scott Malarik joined us to lead our global commercial efforts, having previously led the AI team at Dell. Chad Sackack joined us to run field engineering and pre-sales, 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 three 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 QPI Phase C 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 INQ has and will always excel. And we will unlock utility for Fortune 500 companies, US and allied governments alike. Our North Star 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 INQ's quantum platform in action, in all its forms and domains. Quantum applications, quantum computers, quantum networks, quantum security, and quantum sensors. INQ 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 and 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. INQ is here to support all initiatives that the White House, DOW, DOC, DOE, and Capitol Hill advance to ensure our country and its allies benefit from U.S. quantum leadership in the 21st century. We look forward to 2026 and beyond with confidence as INQ's technical roadmap is delivered across all product families, and our operating momentum continues to build. I am delighted now to hand you over to Inder Singh, INQ's CFO and COO.