Thank you, and I want to welcome everyone to the Quantum Computing Inc. first quarter 2026 shareholder update call.

Before we begin, please note that today's remarks may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding expected results, operational plans, strategy, and market opportunities. These statements are made pursuant to the safe harbor provisions of Section 27A of the Securities Act and Section 21E of the Exchange Act, and are based on current assumptions and expectations.

Forward-looking statements are neither promises nor guarantees, and involve risks and uncertainties that could cause actual results to differ materially. Important factors are discussed in our annual report on Form 10-K for the year ended December 31st, 2025, and in subsequent SEC filings, including the quarterly report on Form 10-Q for the quarter ended March 31st, 2026.

We undertake no obligation to update these statements except as required by law. On the call today, we have Dr.

Yuping Huang, Chief Executive Officer and Chairman, and Chris Roberts, Chief Financial Officer. The team will provide an update on the business, followed by a question-and-answer session.

With that, I would now like to turn the call over to management. Please go ahead, Yuping.

Good afternoon, and thank you for joining us for Quantum Computing Inc.' s first quarter 2026 earnings call.

We made meaningful progress in the first quarter of 2026, executing on our strategic initiatives and furthering our mission of delivering accessible, scalable, and cost-effective quantum machines and photonic solutions for practical use across high-growth markets that include high-performance computing, artificial intelligence, cybersecurity, aerospace and defense, and advanced sensing and imaging. We completed two key transactions during the quarter, closing the acquisitions of Luminar Semiconductor, Inc.

and Nucrypt LLC. Luminar Semiconductor, which I will refer to as LSI going forward, represents a significant milestone in QCI's strategy to build a vertically integrated product-driven photonics and quantum technology platform.

LSI brings established capabilities in lasers, detectors, advanced packaging, and testing, has a strong photonics customer base, and has broad R&D and manufacturing capabilities that we believe strengthen our ability to move from small batch to higher-volume production. Included in LSI's portfolio are three key subsidiaries.

The first is Freedom Photonics. Freedom Photonics is a leading-edge R&D and manufacturing facility that provides unique photonic components, modules, and systems, and is recognized for world-class semiconductor laser technology, with approximately 25 issued and pending patents.

The second is EM4. EM4 is a Class 10,000 certified, humidity-controlled cleanroom facility and a leading provider of subsystem design and manufacturing, offering comprehensive photonic and fiber-optic module solutions.

The EM4 facility is a major supplier to several US government programs and the European defense and space markets. Finally, OptoGration has a chip manufacturing facility and a device assembly and testing facility specialized in design, assembly, testing, and low-volume component production.

We are currently integrating LSI, and we are excited to onboard their experienced team of operators, engineers, and scientists to expand our depth of talent and execution capacity. We are focused on serving and expanding LSI's existing client base and utilizing their technology and the products to drive quantum commercialization in our target markets.

The second acquisition completed in the quarter is Nucrypt. Nucrypt's primary patent portfolio spans quantum optics, RF photonics, and photonic signal processing, which can generate, measure, and distribute entangled photons over fiber-optic cables.

Organizations such as NASA, the US Army Research Lab, and major global research universities and customers have used Nucrypt's technology. Nucrypt's suite of quantum communications systems and the products will enable us to further advance our technology roadmap while bolstering our product and solutions portfolio, with a goal of further improving the performance, robustness, and scalability of our technology.

We announced a key partnership with Quantum Corridor, which placed a QCI Dirac 3 quantum optimization machine on Quantum Corridor's network, an interstate quantum-safe commercial communication network in North America. The optimization machine is intended to provide enhanced, secure, and on-demand Dirac 3 access for institutions and commercial customers on Quantum Corridor's network.

We believe this is the first data center installation of a Dirac 3 machine and the first installation of its kind in a commercial data center environment. This collaboration marked a significant step forward in our commercial deployment strategy, expanding practical access to a quantum infrastructure for both academic and enterprise users, and reflecting our commercial strategy to make high-performance quantum solutions readily available in IT ecosystems.

On the foundry front, our thin-film chip R&D and manufacturing facility in Tempe, Arizona, also known as our Fab 1, has been ramping up small-batch manufacturing. The foundry's capabilities include nanofabrication and inspection, multiphysics simulation, in-house design and dicing, and prototype packaging.

While the facility has begun generating early revenue, it's important to note that its primary use is as a research and development facility. We are actively in the planning phase and assessing options for a Fab 2 facility, a second, much larger foundry which can support higher-volume production to extend our long-term manufacturing capacity and enable widespread deployment of quantum-powered hardware.

It is our intent that a Fab 2 facility will be where quantum manufacturing becomes scalable. We look forward to keeping you apprised concerning our Fab 2 strategy and timelines as it progresses.

We have made progress on our technology roadmap as we work toward our commercial strategy of bringing quantum products to a broad market by evolving from a technology innovator into a full-scale manufacturer capable of delivering quantum-enabled systems at industry scale. It is becoming increasingly clear that we are well-positioned in the marketplace.

We believe we have strong quantum optics and integrated photonics foundation that enables affordable and deployable quantum hardware. By focusing on quantum photonics, our technology has the ability to operate at room temperature, dramatically reducing system footprint, complexity, cost, and power requirements.

We are following a strategy focused on manufacturing built for scale as we further refine our Fab 1 facility and advance planning on Fab 2. Finally, we believe we are gaining traction across strategic partnerships and government collaboration.

Our guiding principles of practicality first, scalability by design, accessibility for all, and innovation with a purpose remain at the core of everything we do as we build the future of quantum for everyone. I will now turn the call over to Chris Roberts, our Chief Financial Officer, to discuss our first quarter 2026 financials.

Thank you, Yuping. I'm pleased to announce that revenue for the first quarter totaled $3.7 million, compared to $39,000 in the prior-year quarter.

The year-over-year increase in revenue was driven primarily by the acquisition of Luminar Semiconductor in early February, and to a lesser extent, revenue from the acquisition of Nucrypt in early March. Excluding the LSI and Nucrypt contributions, QCI revenue for the first quarter totaled $204,000, consisting primarily of deliveries of foundry orders and work on an R&D subcontract for NASA.

Operating expenses for the first quarter totaled $19.8 million, compared to $8.3 million in the same quarter last year. The increase in operating expenses was due to a substantial increase in staff, including administrative, technicians, engineering, and scientific, which resulted in increased R&D expenses, product development, and sales and marketing expenses.

Sales and marketing expenses for the quarter were $1.6 million, compared to $0.7 million in the prior year, increasing primarily as a result of employee compensation costs, customer lead generation activities, tradeshow participation, advertising, and other marketing and selling costs. General and administrative expenses for the quarter were $11.3 million, compared to $4.6 million in the prior year, increasing primarily due to substantial M&A transaction expenses in the quarter for the Nucrypt and LSI transactions.

We reported a net loss of $4.1 million for the first quarter, or 2 cents per share, compared to net income of $17 million in the first quarter of 2025, or 13 cents per share. To put this change in the proper context, as previously reported, the $17 million net income in the first quarter of 2025 was primarily attributable to a $23.6 million non-cash gain on the mark-to-market of the company's derivative liability, which relates to warrants issued for our merger with QPhoton in June of 2022.

Our balance sheet continues to be strong. We reported cash, cash equivalents, and investments of $1.4 billion at March 31, 2026, compared to $1.5 billion at December 31, 2025.

Interest income in the first quarter of '26 was $13.5 million, up from $1.7 million in the prior-year period. At March 31, 2026, total assets were $1.6 billion, relatively unchanged compared to December 31 of 2025.

Stockholders' equity was also $1.6 billion at March 31, 2026, again, essentially unchanged compared to year-end 2025. Our contract backlog as of March 31 was strong at $16 million.

Now I'll turn the call back over to Yuping.

Thank you, Chris. As we move through the remainder of the year, we are intently focused on investing in our team across engineering, research, and production, converting a growing pipeline of commercial and government engagement into recurrent revenue, strengthening our fabrication capabilities, and executing on both organic and inorganic growth opportunities to drive long-term value creation.

We have a very strong balance sheet and healthy backlog, and we are energized by the path in front of us as we continue advancing our mission of putting quantum-enabled solutions into the hands of people. As always, thank you for your ongoing support.

We look forward to keeping you apprised of our progress as we continue to move through the year. With that, we will now open the call for the questions.

Operator, please go ahead.

Oh, thank you. Congrats on completing the acquisitions, Chris and Yuping.

Thank you. Thank you, John.

One question kind of forks into two. Where are we with the R&D effort on the next Dirac, and then also your gate-based quantum computer?

Maybe you could just talk a little bit about that, Yuping.

Yep, we have made very good progress on the next version of the Dirac machine. In fact, we are in the phase of internal testing.

The fact every day, when I come to the lab, people are telling me some exciting new results. I hope that we will be able to complete the last steps and put this in front of some early users.

This is on the Dirac machines. For the gate-based, we are making good progress on two fronts.

One front is that we continue our engineering designs so that we can push up our gate fidelity on the theoretical front. Now, as we talked before, John, we actually have spent quite a few years on this, and we believe that we figured everything out on the theoretical and engineering side to construct gate-based machine.

On the other hand, to realize photon-photon interaction gates, it's crucial for us to get extremely high-quality photonic circuits in thin-film lithium niobate based on our patented technology. On the fab side, we have made good progress in optimizing our recipe so that we can meet those very high requirements for the photons to interact strongly with each other.

Yep, on the gate-based machines, we have made good progress, but there's still some way for us some way some way ahead of us for us to to test our prototypes. We have not started to make the prototypes yet.

Instead, we are testing our photonic integrated circuits at this time.

The other companies that are attempting to produce gate-based photonic computers, they're talking a fair ways out, right? Because of the technology issues you're talking about.

Do you feel like you'll be in the mix when other companies are starting to deliver theirs?

Let me put it—

Like 2029ish, yeah? Go ahead.

Let me put it as this way, John. We chose our gate-based approach to be scalable.

Instead of trying to demonstrate some proof of concept, from the very beginning, we have designed our gate-based machines so that once we can test the principle on the prototype, we can quickly scale up in terms both of the gate circuit depth and the number of qubits. Right now, we are looking at overcoming the last final hurdle on the engineering side, and with that overcome, we should be able to quickly ramp up.

This is why although we started relatively later than some other players on this gate-based machine, but I'm confident that as we figure out the final steps of engineering, we can quickly catch up. Remember that the advantage of our approach is that it's very scalable, and it runs at room temperature, and everything is chip-integrated.

All right. I look forward to hearing more in the future.

Thank you. I'll get back in the queue.

Thank you, John.

Hey, guys. Thanks for taking my questions.

Just a few. Thanks for sharing some of the data around backlog, so that was $16 million at the end of the quarter.

Is there any way you can give us sort of any insight on how that's trended now that we're a little deeper into Q2, knowing you guys aren't giving specific guidance, but maybe a little bit help on how that backlog's trended throughout the past couple of weeks?

What we're finding, Max, is that the customer community is very pleased with the combination of the companies. Some of the risk that was associated with the Luminar bankruptcy has dissipated.

There's nothing I can specifically announce today, but what I will say is that we are seeing a pickup in our business development activity and the pipeline, and I think we'll have a lot more going forward. Yes, the reaction of the market has been positive, and our sales activity reflects that.

Awesome. Then last one for me.

Luminar and then Nucrypt were the two acquisitions. Give us an idea on what's some of the areas you guys are probably headed towards next, probably can't share a lot, but give us sort of an idea on what's kind of at the top of mind for you guys in terms of importance and filling out your platform.

I can answer this question, Max. I have announced that over the next few years, we focus on transition from a tech innovation company to a volume production company.

We have been very happy with the acquisition of Luminar Semi and Nucrypt. They really enhanced our depth and also the breadth of the technology, engineering, and manufacturing capabilities.

Going forward, we will continue to execute our roadmap as we published on our website last year. We are looking to execute our Fab 2 plan.

I did make a promise that we will get our Fab 2 started, and this is what we are focusing on now. It looks like we have some pretty exciting development on that front as well.

We hope to keep the community updated on that as we make progress.

All right. Thanks, guys.

Thank you, and thanks for taking my questions. I wanted to add on to what Max was asking about LSI and Nucrypt.

Just on those integrations, you mentioned that these companies will bring established capabilities in lasers, detectors, advanced packaging, and broad R&D and manufacturing capabilities. Can you give us a sense of the financial synergies and, more importantly, I guess, the technical synergies that you expect to realize with these two recent acquisitions?

Just how are the integrations coming along, if you can share a bit more on that? Thank you.

Sure, let me answer the question on the tech synergy, and Chris can answer the financial synergy. On the tech side, as we discussed in the past, our goal is to develop complete quantum product and solutions, and for such, we will need to have not only our core quantum nonlinear optical technology and circuits, but also photonics products and the controlling electronics, for example.

With Luminar Semi, they have very strong team on the lasers, on photodiodes, and on optical packaging and testing. We, in fact, have launched a handful of initiatives leveraging their team and manufacturing capabilities to advance our quantum device and the systems development.

In the meanwhile, now we are working with them to develop and commercialize photonics for quantum. As many of quantum technology requires some specialty photonic component and circuits.

Now we have a team who understand both photonics and quantum, I think we are in a very unique position to provide solutions and become a supply for photonics for quantum. This is on that tech synergy side with Luminar Semiconductor.

Nucrypt, actually, we already have very high synergy in the areas of quantum communications technology and systems. In fact, our approach to quantum communication are complementary to each other.

With Nucrypt, we offer a complete toolbox and a whole suite of quantum communications technology that should be able to meet the needs of the majority of the customers. Chris, would you talk about the synergy on the other side?

Sure. It's a really good question, and the short answer is that companies are all small, there's not like there's a big back-office processing center that we can consolidate with another one.

However, now that we are close to 200 people, we're able to get better bids on things like employee benefits. Insurance is a little bit more cost-effective.

There are some things that benefit from scale. The other part that sort of touches on finance, but also rolls into what Yuping was talking about, is that there's some synergies in the business development area where, as a combined entity, we're able to go after some very interesting opportunities by combining either the core QCI technology with the Nucrypt technology or with the LSI technology or some combination of those, and we're able to go after more business than we were before.

There is a synergy there. I don't anticipate a lot of direct cost savings from redundancies, if that's really what you're driving at.

All the companies were operating with a fairly lean back-office staff. We are finding that there's some synergistic activity between the different teams, and it's going to help us grow and integrate the skill sets of the financial and legal and contract staff of the different companies are complementary.

They work well together, and they're making us more effective. I hope that answers your question.

It does, and thank you both for the very comprehensive answers. Last quick one for me, on Fab 1, you mentioned you're ramping small-batch manufacturing and it's begun to generate early revenue.

Can you give us a sense of the expected ramp in revenue from here through the rest of the year and into 2026? Can you just compare and contrast that compared to the revenue you expect to generate from the LSI acquisition, which I believe you had pointed to $20 to $25 million in annual run rate.

Beyond that, is there any other contribution from your Fab 1 manufacturing revenue? Thank you.

Yuping, let me take that one. As we disclose in the press release and the 10-Q, of our 200 and some odd thousand revenue, 120 some odd thousand was directly from foundry-related sales, which is a four- or five-fold increase over fourth quarter of '25.

As we get better at processing these advanced circuit designs, we're confident that that is going to continue to grow, probably not at a dramatic pace, but we're getting better at it. Putting together a chip fabrication facility is something that is not just a matter of plugging in the machines and turning them on.

There's a lot of know-how and skill that goes into putting together these advanced prototype chipsets. The contribution of the fab is several orders of magnitude below what we're seeing from Luminar, and it probably will remain considerably smaller, but we are expecting that to grow as we're able to successfully deliver these prototype chips and interact with the customers, hopefully get follow-on orders, and take it from there.

I just wanted to add that we did not plan for Fab 1 to become the engine of revenue. Instead, it's in our strategic plan, we are looking at Fab 1 as our engine for innovation and chip production validation as a necessary and very helpful step to our Fab 2.

We are using Fab 1 to understand better what it takes for us to get to the volume production of the chips because we need to first develop and stabilize lots of recipe, as Chris said. It is not just to turn on the machine and you will automatically get a lot of chips.

The lots of work to do to develop the know-how, and later transfer this know-how to our Fab 2.

Understood. Thank you so much.

Thank you, Antoine.

Hey, gentlemen. Thanks for sneaking me in here.

A couple questions for Chris. Just gross margins.

I'm just thinking there may have been some one-time stuff in the March quarter. Kind of going forward as LSI is more fully integrated and we have a full quarter, are gross margins more in the 25% to 30%, 35% range or any help on that would be great.

Sure. Appreciate your picking up on that.

Gross margins came in pretty low, and what's driving that is underutilization. As you probably understand, the chip business is very capital-intensive, and the capital equipment, once you turn it on and start using it, you have to amortize that.

When the utilization of the facility falls below a certain point, you just have a lot of costs with relatively little revenue to offset it. That was what affected the gross margins in Q1.

We started recognizing revenue in Fab 1, but that required us to recognize a lot of the production overhead costs, which just part of accounting. Same thing with Luminar.

They're coming out of the Luminar Technology bankruptcy, going through a phase where the production volume was a little on the low side, there's a lot of unabsorbed costs that hit the gross margins. We should be able to get back to 20%, 30% as volume picks up, but I can't really tell you exactly how long it's going to take to get there.

Understood. That was helpful enough.

How about also, can you just give us a little color on the OpEx lines? You mentioned a lot of M&A-related expense in G&A, if you strip that out and think of kind of a normal G&A quarter, and on the flip side, I think R&D should go up because we've got a full quarter of Luminar or LSI here.

Just thoughts on kind of OpEx sequentially here.

Okay. M&A costs were close to $6 million just in the first quarter, a lot of legal fees and due diligence fees and banker fees.

It's just an expensive process, and that did cause a spike in the G&A. In terms of other run rate, keep in mind that in the first quarter, we added the management costs, G&A costs of Luminar and LSI and Nucrypt to this total, there's just more people and more G&A-related expenses.

The increase was in line with what we would expect, given that QCI's core staff was 75 people and brought on another 100 people in the first quarter. Most of the costs other than the M&A-related external costs really are driven by the increase in headcount.

Got it. All right, guys.

Thanks. Good luck going forward.

Thank you. Appreciate your joining the call.

Thank you, Troy.

Thank you, and congrats on the acquisitions, especially the Luminar one. Really like that one, very nice.

Just to put a point on it, can you just explicitly say what is the new quarterly OpEx run rate with these acquisitions now folded in?

I don't really have that number at this point. I'm going to dodge that question for the moment.

All right, that's fine. Yuping, can you describe the final engineering hurdle in more detail that's being currently worked on in response to one of the questions that was asked earlier today here?

Are you talking about the Dirac 3 capability hurdle or the gate model hurdle?

Gate model hurdle.

Okay.

Yep. Okay.

Gate model hurdle. Very good question, Nehal.

That I've been thinking about this question of how to build a room-temperature quantum computer for over 10 years, in fact, it's close to 15 years. I have, I believe, figured out everything on the technology and the physics side, but the last remaining hurdle is really on the engineering side.

In fact, through our validated simulation and based on many of our proof-of-concept experiments, we have identified that we have to achieve five pretty extreme conditions for the photons to interact strongly with each other. That is really to bring the nonlinear optics to the single-photon level.

Far, we have achieved four and a half. The other half is that we needed to increase the quality factor of our microring resonators to be above 10 million.

I can tell you that right now, we are at a mark of 2 million. Of course, we have the recipe, and we also have done a lot of tests to have found a way to get it to the 10 million.

Think right now, this is something that I'm pretty confident that we can achieve, but just needed to get our engineers in our Fab 1 a little bit more time so that they can consistently achieve over 10 million on the chips that we make because eventually, it is not that we need just one gate. We need to integrate tens or hundreds of gates on a single integrated circuit chip.

This is the last engineering hurdle.

Okay. That's great.

Thank you for that detail. Then you also mentioned that there are some specialty photonics components for quantum.

Which particular components are you talking about that's specific to quantum? Yep.

For example, the way that we create quantum entanglement in photonics is by using a laser to drive what people call spontaneous parametric down-conversion process. In order to have very high purity in the generated entangled photon pairs, you have to start with very high-quality laser with narrow linewidth and with almost zero of phase noise, especially in the wavelength channels of the entangled photons.

You have to make sure that the laser itself is very clean. This requirement is very strong.

Often times, say it is only pertaining to such quantum entanglement generation process. Another is that, as for quantum, we have to minimize the losses.

Because if a photon is lost, it's lost, and then the game is over. We really need to minimize the loss all the way through the transmission line.

This is hard, and this is also a unique requirement for quantum. There are other special requirements for photonic devices suitable for quantum applications.

Okay. Thank you very much for that explanation.

Thank you, Nehal.

Congratulations on all the progress. My question is, Quantum typically focused on domestic opportunities.

Now with the acquisition of Nucrypt and LSI, does that diversify your potential revenue and geographic reach?

Yes. In fact, Nucrypt was one of the very first companies in the US to have started commercializing quantum communication technology.

They have sold the product to quite a few countries in the world, and we certainly plan to tap on their successes and use a pipeline to expand our overseas commercial presence. EM4, they already have strong base in the defense and aerospace not only in the US, but also in Europe.

This is also an area that we will continue to support and potentially grow, and also utilize those pipelines to quickly expand our quantum product market.

Thanks for answering my questions, and I wish you guys good luck. Thank you.

Thank you so much, Ed.

Thank you for your time. Really appreciate your joining our call and those questions.

Should you have any further questions, please feel free to reach out to our investor relations. I wish everybody a great rest of your day.

Thank you.