Good afternoon, and welcome to Infleqtion's Full Year 2025 Financial Results and Business Update Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference call over to Marcus Kupferschmidt, Head of Investor Relations and Strategic Finance. Please go ahead.

Good afternoon, and welcome to Infleqtion's Full Year 2025 Fiscal Results and Business Update Conference Call. Thank you for joining us today. My name is Marcus Kupferschmidt, Head of Investor Relations and Strategic Finance. Before we begin, I would like to remind you that this conference call may include forward-looking statements. These statements are subject to various risks, uncertainties and assumptions that could cause actual results to differ materially. These factors are detailed in our Form 8-K and other filings with the SEC, which are available on our website at ir.infleqtion.com. We undertake no obligation to revise or update any forward-looking statements, except as required by law. During today's call, we will also reference certain non-GAAP financial measures. We use these measures because we believe they provide additional insight into the underlying operating performance of the business. This non-GAAP financial information should not be considered in isolation or as a substitute for GAAP results. Reconciliations between GAAP and non-GAAP measures can be found in today's press release and in our SEC filings. Joining me today are Matt Kinsella, our Chief Executive Officer; Ilan Hart, our Chief Financial Officer; and Pranav Gokhale, our Chief Technology Officer and General Manager of our Quantum Computing business. Following our prepared remarks, we will open the call for questions. As a reminder, a replay of this call will be posted on our IR website, along with our Form 8-K and presentation materials. And with that, I'll turn the call over to Matt Kinsella, our Chief Executive Officer.

Thank you, Marcus, and good afternoon, everyone. Thanks very much for joining us for Infleqtion's first business update as a public company. We appreciate your time today and your interest in Infleqtion. We're excited to work with all of you over the coming years and hopefully, decades to continue building a deeper understanding of Infleqtion, our platform and the opportunity ahead. Today, we'll have a slightly different agenda than a typical earnings call. Since we're new to the public markets, I think it will be beneficial to spend a little time describing Infleqtion's strategy, our technology and our business model. So with that in mind, we'll spend maybe the first 15 minutes or so giving an overview of Infleqtion and then we'll move to a walk-through of our 2025 financials. Then we'll provide 2026 guidance and open it up for questions. One quick public service announcement. For those who did not join our March 11 inaugural Analyst Day, I'd highly recommend you watch it and use it as a resource going forward. A recording can be found in the Investors section of our website. So with that said, Infleqtion is a quantum technology company with a very differentiated approach. From day 1, we have been building a broad platform across computing, sensing and timing, all tied together with software. This approach is possible because our underlying quantum modality, neutral atoms, is highly flexible. Everything we do is done at room temperature, allowing us to build a range of products that can be deployed in real-world settings. We have followed a tried and true strategy of commercialization and market adoption by pointing this powerful neutral atom core at markets like timekeeping and sensing, where we have true quantum advantage today, monetizing there and all the while building towards the crown jewel,…

Thanks, Matt. We made strong computing progress in 2025 in the first few months of 2026, and we remain on track toward our key milestone of 100 logical qubits in 2028. We are very proud of the milestones we published, record commercial neutral atom gate fidelity, the first-ever material science application powered by logical qubits is the world's first execution of shores algorithm for decryption using logical qubits, which helps inform enterprise on the urgency of transition to quantum-safe encryption. Our work reflects the deep technical progress required to turn fault-tolerant quantum computing from aspiration into demonstrated capability. The recent attention generated across our field only reinforces why we are investing so deeply in this work. In March, we took our prior 12 logical qubit work to the next level of sophistication by executing a biomarker discovery application on our Sqale quantum computer for our Wellcome Leap Q4Bio customer. Importantly, this work highlights the hybrid interplay between GPU and QPU, where the GPU can serve as a training engine for new AI models and the QPU can serve as the inference engine, much as we are seeing specialized training and inference chips emerge in [ classical ] AI. We were also pleased to be featured at NVIDIA's GTC conference last month, where NVIDIA's booth showcased Infleqtion Sqale quantum computing hardware and our approach to hybrid quantum flexible computing using NVQLink. Within our software team, we are gaining experience in bolstering market credibility through customer engagements across both quantum and classical domains with important use cases, including AI for sensor data fusion and RF spectrum awareness. Our IP portfolio continues to grow, including new proprietary methods that translate into differentiated system performance. Our March 2026 paper on dual species gates demonstrates one example of that work. More broadly, these advances are…

Thanks, Pranav. A recent example that brings together the breadth of our platform is Golden Dome, where Infleqtion was selected as one of only a few quantum technology companies eligible to compete for work under the Missile Defense Agency's SHIELD program. SHIELD is an IDIQ for an indefinite delivery indefinite quantity contract vehicle with targeted spend up to $151 billion. Our proposed solution reflects multiple parts of our platform applied to a mission-critical defense problem, including ticker for enhanced radar capabilities, distributed timing in GPS-denied environments and extreme precision in synchronization across the entire system. QRF for hypersonic threat detection and contextual machine learning and quantum computing for predictive threat tracking and decision-making. In a Golden Dome-style missile defense architecture, picosecond level synchronization is critical because distributed sensing and fire control nodes must calculate the speed and trajectory of hypersonic threats with extreme precision to support coordinated detection, tracking and intercept decision, and that is not something legacy timing solutions can reliably provide. We believe this highlights the growing applicability of Quantum technologies to mission-critical national security threats. Space remains a particularly important market for us and a major area of growth. Infleqtion has partnered with NASA for over a decade and first put our Quantum technology in space on the ISS back in 2018. That deep foundation and history helped lead to our selection by NASA's Jet Propulsion Lab to develop the Quantum core for the Quantum Gravity Gradiometer Pathfinder mission. This mission will place the world's first quantum gravity sensor in space to measure changes in earth's gravitational field with high precision, allowing for the detection of important activity on or below the earth surface. More broadly, we see space as a particularly strong application area for quantum sensing and mission-critical infrastructure. The U.K. is emerging as one…

Thanks, Matt, and good afternoon, everyone. I will now walk you through highlights of our GAAP and non-GAAP results for 2025 compared with 2024. As Matt noted, we delivered revenue of $32.5 million in 2025, 100% organic and entirely from Quantum. Our business continues to be anchored by national security use cases. Approximately 70% of 2025 revenue came from U.S., [ 30% ] from the U.K., 11% from APAC and 4% for the rest of the world. Year-over-year performance was driven by strong execution across key U.S. programs. Looking ahead, you should expect some variability in our geographic revenue mix from year-to-year as the number, size and timing of program wins continue to evolve across geographies. Our GAAP loss from operations narrowed to $35.3 million in 2025 compared with $53 million in 2024. On a non-GAAP basis, operating loss improved to $28.1 million in 2025 compared with $35.7 million in 2024. Our 2025 non-GAAP results exclude stock-based compensation of $3.1 million and a onetime noncash accrual of $4.1 million related to contingent payout from a 2024 acquisition. Our 2024 non-GAAP results exclude stock-based compensation of $3.7 million and a onetime impairment of assets and goodwill of $13.5 million. The improvement in non-GAAP operating loss reflects higher revenue and improved operating leverage. Cash burn was approximately $36 million in 2025. Net cash used in operating activity was $24.1 million in 2025 compared with $32.5 million in 2024, representing an improvement of $8.4 million year-over-year. Capital expenditure in 2025 remained relatively modest at a few million dollars. We continue to expense R&D as incurred with no capitalization of R&D or development costs. We exited 2025 with $63 million of cash and cash equivalents and no debt. Including net proceeds from the February 2026 financing, we have a pro forma cash balance in excess of $550 million. Looking to 2026, we expect a modest increase in cash burn from 2025 levels as market signals give us more confidence to invest ahead of accelerating market momentum. We're deploying capital selectively and strategically across R&D and go-to-market with clear return thresholds and specific objectives, partially offset by higher net interest income. Even with this step-up in spending, our cash burn remained low relative to peers. I will now turn the call back to Matt.

Thanks, Ilan. And with that, let's turn to guidance. For 2026, we are guiding to revenue of approximately $40 million. That outlook reflects continued momentum across the business, building on the programs and partnerships we established in 2025. And as Pranav noted earlier, we remain on track to deliver 30 logical qubits in 2026. We view that milestone as an important indicator of our technical progress. Infleqtion is entering 2026 as a stronger company with a differentiated platform across computing and sensing, growing customer traction and a much deeper capital base to support execution. And with that, we will open up the line for questions.

[Operator Instructions] Our first question comes from the line of Tyler Anderson with Craig-Hallum.

First and foremost, I was wondering what is the first thing that a quantum computing IT person asks you when you're having issues with your quantum computer?

Oh boy, I don't know, Tyler, what is it?

Have you tried turning it off and on at the same time. Back to the real questions. So within the sales guidance for 2026, how should we think about the balance between products and service revenues and the gross margin either from that perspective or an overall for 2026?

The way I would take that, Tyler, is I wouldn't focus too much on the product versus services split. That's really more of an accounting standard. I don't really look at the business that way. And so I think -- and there's all sorts of intricacies on how you classify one thing versus the other. So I would just think of it as revenue going forward. I'm not trying to punt the question. It is actually how I think about the business. And I wouldn't say there's much gross margin differential between the way those 2 things are classified. So I would think about you're looking at our historical gross margins and probably think about them in the ballpark like going forward. Ilan, do you add anything to that?

Yes. All I can say, thanks, Matt, is that if you think about our long-term business model, you think about it, we believe that it's really best-in-class semiconductor gross margin. That's what you need to think about long term. But as mentioned in the short term, it's going to be based on historical gross margins.

Okay. And then is there any cadence to this revenue or seasonality?

I would say that it's more about -- in our business is how we win contracts with both government and commercial. And you might see some variability quarter-over-quarter, but we don't have the seasonality like a traditional semiconductor business at this point.

Yes, I wouldn't think about too much seasonality. I think relatively even across quarters, Tyler.

Our next question comes from the line of Jesse Sobelson with BTIG.

Just following up on this $40 million guide here. I know you just mentioned not splitting between services and products. But maybe could we ask how much is expected from the sensing business versus computing or potentially how much comes from software versus hardware?

I can give you a couple of nuggets to maybe help you think about that one. And historically, call it, 2/3 of our revenue has come from sensing, 1/3 from computing roughly. And I'd anticipate it to look probably reasonably similar to that going forward with some pretty wide error bars, especially around computing because those can be lumpy when you land a computing sale. And so I think for the near term, though, you should think about it being roughly in that range with computing sometimes flexing up to more depending on if we sold a quantum computer or multiple quantum computers. As we get closer and closer to commercial advantage with computing, I believe you'll see the mix shift to compute being the majority and possibly the super majority.

Okay. Great. A quick follow-up here, maybe not so quick. But what do you make of the recent [indiscernible] work suggesting lower resource requirements for breaking ECC and potentially a faster path for arriving at [ CUDA ]. Does this -- have you seen this change how customers are thinking about the urgency of adopting quantum computing and migrating to a post-quantum encryption protocol?

Pranav, why don't you take a crack and I've got a couple of thoughts, too.

Sure. We are excited about these developments. We think they reinforce the promise of neutral atoms. I'd say this from personal background to having done a lot of my PhD work in superconducting qubits and now having shifted into neutral atom qubits. We celebrate Google doing in many ways the same, and we feel very strong and committed about the pathway for neutral atoms. With Shor's algorithm for decryption in particular, we put out a paper in September 2025, which is under review for publication right now. And it shows the first ever demonstration of Shor's algorithm with logical qubits. So we have been raising the alarm bell that there is urgency of migration that this technology is coming very fast. And we've been working with enterprise to make sure that they're prepared for this migration to post-quantum cryptography. So there's a with the Shor's algorithm piece, I think there's a changing evolution of how fast it's approaching, and it is one-to-one connected with the progress of neutral atom quantum computing in our view.

And the only thing I'd add is just -- I've said this before, but looking back on when I first invested in Infleqtion and comparing that to today, and that was back in 2018, it's just been astounding the progress that neutral atoms have made on the quantum computing front. And I think [indiscernible] Starting to work in neutral atoms and the [indiscernible] paper being on neutral atoms as well are 2 proof points to that. And then I'll just reiterate what Pranav said that we showcased Shor's algorithm on logical qubits last year, and the number of logical qubits needed to crack Shor's algorithm are just getting -- or to run Shor's algorithm are getting smaller and smaller and smaller. And if you look back a couple of years ago, it was without millions of logical qubits, so it's come down by orders of magnitude. So [ CUDA ] is getting closer.

Our next question comes from the line of Antoine Legault with Wedbush Securities.

Ilan, clearly on your presentation earlier, much lower cash burn than peers. Is there an opportunity to maybe step up R&D spend or sales and marketing, particularly now that you're a public company? Maybe tell us a bit more about your disciplined approach to OpEx? Or maybe put differently, are you able to do more with less?

So as we mentioned earlier, both in the Analyst Day in our remarks, we are -- intend to increase our investment modestly this year and really look at the momentum in the market. So yes, we are going to continue to invest in R&D and CapEx in those areas where it's going to advance our technology and give us competitive advantage. So that's been our philosophy. We continue to be disciplined with some clear KPIs, but we do intend to increase our cash burn this year.

And Antoine, what I'd add to that is just the biggest takeaway is we're not going to make any decisions without really running the numbers to make sure we see a great return on those investments. And it is highly possible we'll see that be the case. And so we've left the investment somewhat nonspecific for a reason because we might see those opportunities to invest more aggressively. But at the highest level, R&D is going to drive both our creation of high-quality logical qubits on the computing side and then also the shrinking and costing down of our sensing products to get them out into the field in greater numbers, and we'll be very focused on doing both of those things. We do have inherent advantages. The neutral atom modality is just capital efficient to begin with because we're working with atoms. They're given to us effectively for free for the nature. But we understand that investment is going to drive our forward progress. So -- but we will be disciplined as we make those decisions.

Understood. And last one for me. I know Matt, you've talked about sort of an upcoming radar upgrade cycle. The recent geopolitical events accelerated any of those discussions that you might have been having with customers? Or are you seeing kind of an increase in interest for your products?

So the way I would answer that question is the events of -- from the geopolitical perspective have definitely increased the awareness of a need for Quantum's capabilities as it relates to those types of equipment like radar. And a great example is traditional radar emits a signal. And so therefore, it can be detected. If you were utilizing Quantum RF, it could be receiving signals without emitting and therefore, not be detected. And so there's already been a lot of conversations going on about this, Antoine. And so I do think it's raised things and accelerated them a bit. But honestly, like we've been having these conversations for a long time about this type of stuff. Pranav, would you add anything to that?

No, I think that covered it.

Our next question comes from the line of Atif Malik with Citi.

Just have a question on the customer pipeline. If you can talk about the mix of that pipeline between compute and sensing. And also if there is some sort of a point that you can give on the annual conversion of that $300 million-plus customer pipeline you talked about at your Investor Day, given the mix of several government and university multiyear contracts.

Ilan, do you want to take a crack?

Yes. So I would say, as Matt mentioned before, we expect the majority of our revenue and booking to come from sensing, at least this year. Matt mentioned 2/3, 1/3 that continue to be the trend. And that's until we reach the point that Pranav mentioned in 2028 when we reach 100 [indiscernible] logical qubits, that's the point that you'll start to see a significant shift toward compute revenue versus sensing. So that's how you think about our business between the next 2, 3 years between sensing and compute.

And then if I just try to isolate that into the pipeline, I'd say the pipeline probably is actually maybe even a little more skewed to compute only because they are very large numbers. The compute sale could be tens and tens of millions of dollars. And so to the extent that there's some of those in the pipeline, that does skew to compute. But I still think it's in that -- it's roughly in the 2/3, 1/3 bucket. So the pipeline roughly tracks our bookings and revenue as well. And then in terms of conversion, there's all sorts of lengths of contracts in that pipeline. And so it's hard to really infer like what the conversion rate of that pipeline would be or how that would matriculate from bookings to revenue.

Our next question comes from the line of Troy Jensen with Cantor Fitzgerald.

Congrats on all the momentum and success here recently. Pranav, for you, can you talk about the fidelity level of the 12 qubits and the 30 that you'll be introducing this year?

Yes, sure. So in our previous demonstration of 12 logical qubits, which we put out into paper in September of 2025, we showed that the logical performance, the logical fidelity for state preparation was significantly improved by a multiple over the underlying physical fidelity. So we're already at a point on this iceberg code, it's called where we're getting better logical than physical performance. It is our desire to get the same out of 30 logical qubits this year. And we recently showed a block post about 2 weeks back that again showed 12 logical qubits, but as they referenced during this call in a more sophisticated fashion. And one of the really neat things there is that our logical qubit and [ codings ] are capable of running circuits much, much more efficiently than our physical qubits can. So whenever we're talking about logical qubits, we are referring to significant suppression of the logical error rate with respect to the physical rate. And as I'm sure you'll appreciate, that is critical to actually getting useful customer performance for logical qubit systems.

Yes. Yes, exactly. And then how about your physical to logical ratio now and where you think it could be a couple of years out?

Great. This is one of the beautiful benefits of neutral atom quantum computing. We see a path where even with known architectures, there's 24:1 ratios of physical qubits to logical qubits, and that would belong in something called a quantum memory hierarchy. There's recent work, which we and others have been pioneering using a software package that we released recently called QLDPC, which shows the pathway to even as few as 3 to 4 to 5 physical qubits per logical qubit. And this is all possible because our neutral atom systems feature all-to-all connectivity and the ability to bias our errors in a direction that is easily fixable -- getting a little [indiscernible] here, but it's called a [indiscernible] and it's one of the approaches that we can further reduce the ratio between physical qubits to logical qubits. Just going back to one of the previous questions on Shor's algorithm. This is why the resource requirements for a lot of quantum applications have come down dramatically in the last couple of years, and we expect the same to happen for other applications like material science, like chemistry, like AI.

Our next question comes from the line of Peter Peng with JPMorgan.

Just on KPIs, what are some of the metrics that you guys want us to focus on that things are on track? I think from a technical side, whether it be logical qubits, gate performance and so forth or customer counts. Maybe just help us think about what are some of the key KPIs we should be focused on.

Sure, Peter. I would focus you on really just on 2. I think you should focus in on our ability to execute against our guidance from a revenue perspective, and that should show you that we can run a tight ship and that the opportunity is real to monetize on the sensing side of things. And then to us, the metric that matters the most that really encompasses all the other metrics that are out there for quantum computing is logical qubits. So I would just keep you focused on that one. There's a number of other things that are going on below the surface, whether it's physical qubits or the quality of those qubits to Troy's question, but I think the logical qubits is really the number that encompasses. It brings it all into one metric. So those are the 2, I'd keep you focused on.

Got it. Okay. And then just on thinking about longer-term revenue trajectory. I think 2028 sounds like it's going to be a pretty big Infleqtion point for you guys with the 100 logical qubits and then you're really scaling 2030. Maybe talk about some of the TAM that you can unlock with these new systems? And how should we think about either market share or revenue trajectory as you unlock these new markets?

So at the highest level, the way I think about the opportunity from a TAM perspective is we have really an upgrade cycle that we can run on the sensing side of the business. And so we can create clocks, we can create RF antenna and we can create inertial sensors that can do things that classical versions of those types of products just can't do. So truly 10 to 1,000x improvement in performance. And so there's good data out there about the market sizes for those types of traditional technologies. But then you also are creating brand-new markets by having the ability to have better than GPS precision timing locally. So I think take that for what it's worth and how you're trying to build the market opportunity for sensing. On computing, it's a little harder to predict because in many ways, we're blazing new trails and creating new brand-new compute paradigms. But the markets will start knocking down once we get to commercial advantage in computing are first, the material science world, so helping people build new materials by combining molecules together in a much, much faster iteration cycle and then the drug discovery world and then ultimately, new capabilities will be unlocked. And those are absolutely massive markets. And in many ways, I feel like the quantum industry does itself a disservice by using terms like material science because it sounds nichey. But in reality, it's some absolutely massive percentage of GDP. It's truly anything we build. So absolutely massive markets to unlock. And then between now and then on compute, there is a great opportunity to continue to sell compute systems into the market, even though they're not yet commercially useful. And so you're right, after we get to commercial usefulness in 2028, I think we'll see that compute opportunity grow exponentially.

Our next question comes from the line of Troy Jensen with Cantor Fitzgerald.

I dropped off there, but I did have a follow-up. I want to get in for Matt. Is the Golden Dome comments, I guess, to my knowledge, I didn't think the administration had really flushed out their plans for Golden Dome. So can you just dive into what you were mentioning on Golden Dome a little bit?

Sure. So what they've done is they've funded an IDIQ, an indefinite quantity, indefinite delivery contract vehicle, which is a very flexible way for the government to deploy capital. And so it's a much more quick and efficient way to get the system up and running. And they've already started to host events to get the word out as to what it is they're looking for. And then they're starting to let approved vendors into this IDIQ, which is called SHIELD, and I forget what that acronym stands for. So they're moving actually at quite a rapid pace to start to attempt to deploy this, and it will be multiple years in the making, and they won't be deploying the $151 billion all at once. But I've actually been pretty surprised at how rapidly they started to put the infrastructure in place, meaning the contract vehicles, the dollars to start to actually deploy this type of technology. And what we know at the highest level is it will be a system that will cover the nation that will be a number of sensors that have to be integrated together from a timing perspective so they can communicate with each other. And then really, ultimately, the goal is to intercept incoming threats and take them out as fast as possible. So they have been moving more rapidly than I would have thought, honestly, Troy.

Our next question comes from the line of Jesse Sobelson with BTIG. Jesse you seem to be still muted on your end.

Guys to jump back in the queue here. I just had 2 follow-ups. It's clear that the industry is moving on from focusing on physical qubit count and shifting towards more of a logical qubits and application level performance analysis. How do you think about the trade-off of investing R&D and scaling the qubit count with your platform versus improving error rates?

Pranav?

One of the great things about this climate error correction technology is that it allows us to trade quality with quantity. So for instance, if we have a lot of qubits, we can use those to virtualize a small amount of very, very high-quality qubits or medium amount, et cetera. So in general, where we've seen across modalities, the bottleneck so far has been on quantity. It's generally accepted that one needs a few thousand as many as 100,000 physical qubits to get to sufficient logical qubits. If we have 99.99% physical fidelities, the number of physical qubits that we need is less. But it's quite easy on neutral atoms to Sqale two thousands of physical qubits. So I guess the direct answer to your question is that our preferred path is to focus now that we have good enough qubit fidelity to focus on the quantity. And we have right now the commercial neutral atom record for a number of qubits, 1,600. And we have a lot of conviction that we're going to keep getting into the multiple thousands of physical qubits, that gives us a very natural path to suppress our error rates to very, very low levels so we can run applications without needing to perfect every bit of physics to get to higher fidelities. And then the last thing I'll add is because we can have a certain tolerance always for errors, that creates a path that's quite unique for us to get to eventually field deploying our quantum computers, not today our first order priority, but there is a world where we would want to take our quantum computers to real field deployed settings the same way our clock used to live on a dinner table size device. Now it has been put on SUVs, shipped to data centers, it's subject to vibrations, et cetera. So prioritizing quantity over quality for our next development path enables us to expand these market domains.

Said another way, we're at the quality levels where you can actually start to solve quality from a logical qubit perspective with quantity.

That concludes the Q&A session. I would like to pass the call back over to Matt for any closing remarks.

Thank you, everybody, for joining the call, and thanks so much for all the great questions and for everyone's continued interest in Infleqtion. As I said at the beginning, I'm really excited to work with all of you over the coming years, and I really do appreciate your partnership. 2025 was an important year for the company. We strengthened the business, we advanced the platform, and we enter 2026 with great momentum and a strong capital base. As we said before, we remain committed to disciplined investment, customer and program expansion and continued technical leadership across computing, sensing and software.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you, everyone, for your participation.