IonQ, Inc.

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

Good afternoon, everyone, and welcome to INQ's first quarter 2026 earnings call. My name is Hanley D'Onofrio, and I'm the Investor Relations Director here at INQ. I'm pleased to be joined on today's call by Niccolo DeMasi, INQ's Chairman and Chief Executive Officer, and Inder Singh, INQ's Chief Operating Officer and Chief Financial Officer. By now, everyone should have access to the company's first quarter 2026 earnings release issued this afternoon, which is available on the SEC's website and on the investor relations section of our website at investors.inq.com. Please note that on today's call, management will refer to non-GAAP financial measures. While the company believes these non-GAAP financial measures provide useful information to investors, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. You are directed to our earnings release for a reconciliation of adjusted EBITDA and adjusted EPS to the closest comparable GAAP measures. During the call, we will discuss our business outlook and make forward-looking statements, including those regarding our guidance for 2026. These comments are based on our predictions and expectations as of today and are not guarantees of future performance. Actual events or results could differ materially due to a number of risks and uncertainties. Therefore, you should not put undue reliance on those statements. We refer you to our recent SEC filings, including our annual report on Form 10-K for the year ended December 31, 2025, for a more detailed discussion of those risks and uncertainties. WE UNDERTAKE NO OBLIGATION TO REVISE ANY STATEMENTS TO REFLECT CHANGES THAT OCCUR AFTER THIS CALL, EXCEPT AS REQUIRED BY LAW. NOW, I WILL TURN IT OVER TO NICOLA DEMASI, 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 INQ history thus far and our fourth consecutive quarter of record-breaking results. $64.7 million of GAAP revenue in the first quarter of 2026 is more than eight times what we delivered in the same period last year. Our strong momentum is a testament to the demand for our industry-leading quantum computers, as well as the commercial impact of our entire quantum platform. As I outlined on our fourth quarter call in February, a key objective for 2026 is to drive superior financial performance by leveraging our scale and quantum product families combined with increasing geographic breadth and depth. We are executing well and have today raised our full year revenue expectations to $270 million at the high end. Our results were underpinned by accelerating global quantum computing system sales, increasing high margin cloud utilization, and deepening application layer partnerships with our enterprise customers. I am tremendously excited about INQ's ecosystem progress, which was on full display at the New York Stock Exchange when we rang the bell with over 50 customers to celebrate World Quantum Day. INQ is defining the quantum technology market and establishing the leading hardware and software quantum industrial ecosystem. Our organic performance is a direct reflection of this leadership as we architect and deliver the quantum platform for the next century of computation. We continue to widen our lead across commercial and technical frontiers. Our parallel gate architecture with electronic qubit control will allow us to solve problems at a scale and cost that we believe will be unmatchable. On April 14th, we rolled out clear third-party validated benchmarks, showcasing the incredible time to solution and cost to solution advantages that our quantum computers already possess. These metrics represent the speed and economics with which our systems deliver accurate solutions to the world's hardest problems. As you can see on slide six of our investor presentation, we presently enjoy up to 10,000 times faster time to solution on key quantum algorithms, including 1,000 times faster for the quantum Fourier transform. The quantum Fourier transform, in fact, enables many critical use cases, such as cryptography, molecular drug discovery, advanced material synthesis, and unlocking fusion energy, making this time to solution valuable today and into the future. It is not a coincidence that several of the key utility scale applications described by DARPA's quantum benchmarking initiative could take advantage of quantum Fourier transforms under the hood. INQ's time to solution advantage with quantum Fourier transform and other benchmark algorithms today underscores our fidelity and connectivity advantages that we expect to endure throughout the coming decades. I am proud to report that we have pre-sold our first chip-based 256 qubit system in the first quarter. We are moving with conviction to demonstrate this technology by year end with customer systems expected to begin commissioning by the end of the second quarter of 2027. While much of the industry remains in the scientific research phase, INQ has been able to focus on delivering production-ready systems that are shaping the quantum market globally. We remain the first and only quantum company in history to have demonstrated the critical technology components at the performance levels required for full fault tolerance. The next critical frontier in our industry is the efficient use of quantum error correction to convert high-quality physical qubits into even higher-quality logical qubits, unlocking new frontiers of scale and impact. This is the bridge to utility-scale, fault-tolerant quantum computing, and it should be no surprise that INQ is leading here as well. Just last month, we published our complete architectural blueprint for our flexible modular framework that describes how our technology scales through to 2030 objectives of a fully fault-tolerant system with millions of physical qubits and logical error rates as low as one in one trillion. Our walking cat paper described INQ's end-to-end architecture for full fault tolerant quantum computing banning compiler design and error correction to hardware control systems and ion movement. This historic paper outlines in manufacturable detail how we will move from today's INQ commercial systems to deploying and commissioning INQ's utility scale quantum computers to customers. The level of detail and completeness in our blueprint is a global first. and historic milestone for the quantum industry as a whole. Along with the academic community, there has been strong and broad recognition that this is the industry's first clear, detailed, manufacturable path to scaled fault-tolerant systems. For those able to follow along in our investor presentation, please see page seven for details. INQ's specificity sets a new standard and distinguishes INQ with its tangibility, resting on capabilities our hardware has already demonstrated, including 99.99% two-qubit fidelity and reliable ion transport. This historic work demonstrates precisely why INQ is on track to be the first to unlock fully fault-tolerant quantum computers. as we published clearly in June 2025. Our level of transparency is only possible through our 30 years of innovation. Only INQ has the operational maturity and engineering predictability of generations of deployed systems as we now accelerate into a new phase of manufacturing and scale. Moving on now to Skywater and our merchant supplier activities. As most listeners know, in January of 2026, we announced our intent to acquire Skywater in order to accelerate the U.S. quantum industry and deepen our commitment as a merchant supplier. We expect the transaction to close in the second or third quarter of 2026, subject to customary regulatory approvals. Over the past quarter, our commercial collaboration with Skywater has already yielded multiple test iterations for our 256 cubic chip. As we shared in February, we hit the ground running with multiple initial tape outs. Today, I am pleased to report that we have already received some of the first ion trap samples back from Skywater and have demonstrated on these sample chips, the critical performance we need for the complete 256 cubic chips. To design, fabricate, and test these chips with Skywater within a single quarter has been a delight. Our commercial partnership with Skywater is a demonstration of the kind of acceleration we hope our investment will bring for all customers of our quantum merchant supply function. And we expect these benefits to grow even further once the combination is complete. We already act as a merchant supplier with our industry-leading atomic clocks, sensors, and networking products being sold to other quantum companies. When the SkyWater transaction closes, INQ will be the largest quantum merchant supplier in the world, with Thomas Sonderman continuing to lead SkyWater. We view this transaction as not only accelerating INQ's commercialization of fault-tolerant quantum computers, but also using our balance sheets to secure the scalability of the entire US 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 eight. Applications and quantum algorithms are another cornerstone competitive advantage for INQ. We know that for customers, value is measured not just on a machine's architecture, but by how that architecture ultimately delivers customer value and results. We are confident INQ already delivers a potent combination of orders of magnitude faster time to solution, the most accessible cost to solution, reliability and quality that customers cannot find anywhere else. We have more than doubled our quantum algorithm and applications team size in the past few quarters in response to strong demand. We continue to grow internationally, adding both application engineers and field engineers to support customer appetite for implementing INQ's quantum solutions in their organizations. We are deliberately focused on early advantage verticals, pharmaceuticals, financial services, energy, and logistics. Real-world examples from just the past few quarters include the following partnerships. In the financial sector, we ran the world's first large-scale portfolio optimization quantum algorithm using real S&P 500 data. This showcased, along with Kipu Quantum, our systematic improvement in portfolio quality and execution time in a production environment. Our trapped iron hardware has a long-term structural advantage for dense portfolio optimizations such as these because of its all-to-all connectivity and its industry-leading single qubit and two qubit gate fidelities. With Synopsys, we demonstrated accelerated computer-aided engineering workloads through quantum-enhanced graph partitioning. We achieved double-digit percentage advantage in end-to-end time for large-scale structural models such as a Rolls-Royce jet engine and automotive models also. Crucially, this demonstration was integrated into their existing cloud workflow with zero new infrastructure required. Einride is using INQ to optimize shipment allocations and fleet orchestration for electric and autonomous freight. delivering measurable gains in real-world logistics efficiency. We have already demonstrated real-world commercial validation using anonymized logistics data and historical cancellation logs. By achieving an increase in shipments delivered, this work will underpin very significant revenue gains for our partner at fleet scale. With Quantum Basel, we are advancing hybrid quantum classical techniques to optimize large language models and reduce energy consumption. Our results show that INQ quantum computer energy consumption scales approximately linearly with qubit numbers for shallow circuits. By comparison, classical simulation exhibits exponential scaling. We are on track to demonstrate significant energy savings with improved inference performance as we scale these capabilities. These four production-oriented applications are just some of the examples our customers are deploying to actively drive business advantage and growth. We are proud to announce in parallel that our work to positively and powerfully impact humanity itself has this quarter seen a step change. We are now working with participants from the Welcome Leap initiative out of the UK, which is a program designed to accelerate human health, to apply our quantum optimization to improve cancer research. Our work introduces new computational approaches for reconstructing difficult regions of DNA that are often missed or misread by existing methods. This could become a useful foundation for future studies of genetic changes that matter in human disease, including cancer. Last quarter, we also announced a commercial partnership with CCRM, which is one of the world's leading accelerators for advanced therapies. We are very excited about the work we are doing with them, which includes cell and gene therapies for cancer and immune system rebuilding. This work is truly world-changing, offering a powerful new future for human health. We have also begun work on combining our quantum optimization technology with computational methods for gene therapies. That includes optimization of mRNA sequences that get delivered into cells. Long term, we anticipate personalized medicine acceleration. For those following along in our investor presentation, this can be seen on page eight. Let us now turn to the rest of our unique and expanding quantum platform. Building on the momentum of our recent deployments of quantum communication networks in Switzerland, Romania, and Slovakia, INQ has now successfully deployed Poland's first national quantum communications network. This is one of the largest terrestrial quantum key distribution networks in Europe, and it cements our position as the partner of choice for sovereign quantum security. We are similarly expanding our quantum platform leadership domestically by announcing a new statewide quantum networking initiative in the great state of Florida and the first commercial sale of a quantum memory node into the Mid-Atlantic Regional Quantum Internet hosted at the University of Maryland. These partnerships underscore that INQ is proudly playing a central role in the development of our secure national quantum infrastructure. On the technical front, we continue to innovate and lead the market as the only public company with a scaled quantum networking division. Last year in partnership with the Air Force Research Lab, we achieved the first qubit to telecom frequency conversion in a field deployable system, enabling real world quantum networks on existing telecom infrastructure. Last month on World Quantum Day, we announced that in conjunction with AFRL, we connected qubits from two separate systems. This is the first demonstration of connected commercial quantum computers, demonstrating the operationalization opportunity of quantum interconnects and paving the way for distributed quantum computing that will underpin the future of secure global communications. Our contract with DARPA's HARC program is another testament to our leadership in quantum memory, modular quantum computing, and scalable networking architectures using quantum interconnects. INQ is playing a critical role in enabling a new class of networked quantum computers that can combine multiple qubit types into an interconnected high-performance architecture. To our knowledge, we are the only industry player to win a hardware award as part of HARC. This contract is another powerful example of how INQ is already serving as the leading merchant supplier to the entire quantum industry with key IP, including the world's most accurate commercial clocks that matter to any modalities, long-term scaling and manufacturability. Turning now to slide nine in the investor presentation. Momentum remains strong at INQ Federal. We continue to advance through DARPA's quantum benchmarking initiatives and are building out our capabilities to support next generation GPS, alternative PNT, and other mission critical initiatives for our nation. We were awarded a $39 million contract to advance next generation space communications under the Space Development Agency's HALO program. This paves the way for mission ready quantum space systems for national security. Just this week, We expanded our space mission and sensing capabilities with a new product launch delivering persistent change monitoring intelligence from space. We were also awarded a spot on the Missile Defense Agency's SHIELD contract, which is focused on the rapid delivery of innovative capabilities to the warfighter with increased speed and agility. Our technology platform represents a dual use advantage for our nation. and its allies, underpinning both economic growth and national security. We are proud to be the partner of choice for US and allied governments in this geopolitical quantum space race. In order to do this work with US government agencies, high technology readiness levels are an imperative. Our quantum sensors and clocks have reached TRLs for deployment on land, sea, air, and space. At this very moment, we have quantum sensors currently deployed on a Navy ship and in space on the X-37B space plane. Our quantum security products similarly have already reached deployment-ready TRLs across critical infrastructure, telecommunications, and national networks. Providing mature deployable quantum security solutions today is vital to ensuring continuity for communications as quantum computers become ubiquitous. Before I close, I would like to touch on Q Day and talk through page 10 in our quarterly investor deck. Lately, Q Day, the threshold where quantum systems render current RSA encryption obsolete, has dominated industry conversation. We have been transparent in our assessment of Q Day's timeline since publishing our technology roadmap in June 2025. Based on our public roadmap, we expect to achieve the logical cubic counts required to challenge RSA 2048 encryption in the 2028 to 2029 window. China's stated goal is 2029 and their government quantum efforts. It's worth noting that our peers have now recognized this accelerated timeline, with Google very recently bringing forward its expectation for Q Day from the mid 2030s to 2029. As we continue to accelerate the timeline toward Q Day, we view it as a strategic responsibility to also provide the solution. We are not just identifying a future risk. We are delivering mature field deployable hardware and software 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. INQ is uniquely positioned to deliver post quantum security solutions precisely because we're the ones defining the offensive frontier. Our deep understanding of how advanced quantum systems challenge RSA and ECC encryption allows us to build superior defenses. This creates a powerful strategic flywheel Our hardware leadership informs our security innovation, and our security expertise de-risks the quantum transition for our customers. As I said on our full year call in February, 2025 was a strategic and financial inflection point for INQ. Today, I am confident that 2026 is in turn the year we move from platform building blocks to platform execution at scale. We will continue to deliver superior financial performance, unlock exponential value through applications and system-level breakthroughs, and operate with both discipline and speed. INQ's mission is to pioneer and globally commercialize the world's quantum solutions, positively impacting every aspect of applied science while ensuring U.S. and L.A. leadership in this generational and geopolitically vital technology race. I want to thank my colleagues for their extraordinary efforts and the broader quantum industry for their partnership. With our strong capitalization, unmatched talent density, and clear roadmap, INQ is one platform, one team, primed and poised to win. I'm now delighted to hand the call over to Inder Singh, our COO and CFO. Thank you, Niccolo.