Infleqtion, Inc. (INFQ) Earnings

Management highlights

- Company and Platform Strategy * Inflection is a quantum technology company built on a single shared neutral atom platform that supports multiple product lines across quantum computing, sensing, and timing, enabling a capital-efficient, leveraged operating model unmatched by other quantum firms. Management compares this strategy to NVIDIA's, which leveraged a core GPU platform across multiple markets while progressing toward large language model opportunity; Inflection leverages its neutral atom core for near-term revenue from timing and sensing while progressing toward fault-tolerant quantum computing, its long-term core goal. * Neutral atom technology operates at room temperature, offers superior scalability and system economics compared to other quantum modalities, and technological progress in one product line benefits all other lines via the shared platform. - Technical Milestones * Quantum Computing: Demonstrated a 1,600-atom physical qubit array with 99.73% two-qubit gate fidelity, a commercial record for neutral atom technology. Advanced from 2 logical qubits in 2024 to 12 logical qubits in 2025, ahead of the original roadmap, and remains on track to deliver 30 logical qubits in 2026 and 100 logical qubits by 2028. Delivered the UK's first operational 100-physical qubit quantum system, meeting the UK government's 2025 target. Demonstrated 12-logical-qubit applications for biomarker discovery and Shor's algorithm for post-quantum encryption research. * Quantum Sensing & Timing: Demonstrated TICKR optical atomic clock on the Royal Navy's Excalibur autonomous submarine, delivered a technology upgrade to NASA's Cold Atom Lab on the ISS, and won a NASA JPL contract to deploy the first quantum gravity sensor in space for the QGG mission. Demonstrated a 40X timing improvement over GPS for fiber networks between Indiana and Illinois, relevant for AI data center synchronization. Secured a contract under the U.S. Missile Defense Agency's SHIELD Golden Dome program, the first time quantum technology has been included in the program's solution set. * Software: Released open-source Resource SuperStack for modeling 100-logical-qubit quantum systems to prepare developers for 2028 hardware. Selected as the only quantum hardware developer for DARPA's HARC cross-modality quantum software program. CML quantum-inspired AI software for GPUs is now deployed on multiple government customer contracts for low-latency sensor data processing. - Commercial and Partnership Progress * Established a go-to-market partnership with Saffron for TICKR Prime timing systems to expand global commercial market access. Partnered closely with NVIDIA: exhibited at NVIDIA's GTC conference, adopted NVIDIA's iSing AI models to improve quantum computer calibration and error correction, and integrated with NVIDIA's NBQ link stack to enable hybrid GPU-quantum co-processing. Won multiple new government contracts across computing, sensing, and software, including from DARPA, ARPA-E, U.S. Navy, U.S. Army, and European Space Agency. Expanded manufacturing and development capabilities with three new quantum innovation centers in Colorado, Oxford, and Chicago. - Financial Performance * GAAP operating loss was $33.6 million in Q1 2026, up from $6.9 million in Q1 2025, primarily due to higher stock-based compensation, going-public transaction costs, and planned increased investment. Non-GAAP operating loss was $13.2 million, up from $5.8 million year-over-year. Cash used in operations was $19 million, with $11 million of the $12 million year-over-year increase attributable to going-public transaction costs. Ended the quarter with $569 million in cash, cash equivalents, and available-for-sale securities, with no debt outstanding.

Guidance

- Full-year 2026 revenue guidance was updated upward from prior levels to at least $40 million, implying revenue acceleration through the remaining three quarters of the year. The upward revision is supported by broad-based increased customer demand and pipeline growth across all business lines, not just the NASA QGG contract. - The 2026 target of delivering 30 logical qubits for quantum computing is reaffirmed, with the 2028 target of 100 logical qubits maintained. - Capital expenditures for 2026 are expected to rise modestly to support investment in the new innovation centers and property, plant, and equipment needed to scale operations in the U.S. and UK. - 2026 cash burn is expected to see a modest increase from 2025 levels, aligned with planned strategic investment ahead of growing market momentum. Even with the increase, Inflection's cash burn remains low relative to industry peers.

Segment performance

Total company Q1 2026 revenue hit a first-quarter record of $9.5 million, a 14% year-over-year increase, with 100% of revenue coming from quantum solutions. 70% of Q1 2026 revenue came from U.S. customers, consistent with 2025 levels. - Quantum Sensing: This was the strongest growth driver in the quarter. The NASA JPL QGG mission contract was the single largest revenue contributor, and quantum spectrum solutions continued to gain customer traction. No separate absolute revenue or percentage contribution was disclosed for individual sensing sub-segments beyond the QGG contribution. - Quantum Computing: The segment delivered two scale QPUs (to the UK QCC and a Japanese customer), and announced a planned delivery of a 50+ logical qubit scale QPU to the IQMP hub in Illinois. It won multiple new application-focused contracts from ARPA-E and other research bodies, contributing to overall quarterly revenue. - Quantum Software & AI: The segment secured multiple new government contracts for its quantum-inspired Contextual Machine Learning (CML) technology, including contracts with the U.S. Navy, U.S. Army, and European Space Agency. Its SuperStack middleware platform was selected for DARPA's HARC program, adding new contracted revenue. - Quantum Cores: This small but strategic segment had its best ever quarter in terms of order and revenue performance, signaling growing industry adoption of neutral atom technology.

Risks & headwinds

Management did not explicitly discuss material operational failures or new, unanticipated risks during the call. The only risk referenced was the standard forward-looking statement disclaimer noting that actual results could differ materially from forward-looking statements due to various undisclosed risks detailed in the company's SEC filings.

Analyst Q&A

• Q: The updated full-year revenue guide implies acceleration from Q1 levels. What underpins this acceleration, is it just the NASA QGG contract, and what can we expect for revenue linearity through the rest of the year? /

  A: Management states the upward guidance change is driven by broad-based increased demand across all business lines, not just the NASA QGG contract, which gives the company confidence to raise the full-year outlook. No additional details on quarterly revenue linearity were provided.

• Q: You are ahead of your roadmap for logical qubit delivery, with 12 delivered in 2025 against a target of 8. Can you update your current progress toward the 2026 30-logical-qubit target, and what are the key remaining milestones? /

  A: Management confirms the company remains fully on track to hit the 30-logical-qubit target by the end of 2026. Progress is driven by ongoing simultaneous improvements in the number of physical qubits, gate fidelities, and software stack efficiency that all work together to deliver more useful logical qubits.

• Q: What is Quantum Spectrum, how does it relate to the earlier Skywire product, and what capabilities does terahertz frequency operation unlock? /

  A: Quantum Spectrum is an expanded grouping of the company's earlier quantum RF Skywire technology, created to reflect accelerating customer demand for these solutions. The technology breaks the traditional correlation between antenna size and signal wavelength, allowing reception of signals from ultra-low frequencies to terahertz in a much smaller, stealthy, non-emitting form factor than classical technologies. Key near-term demand is centered on low-frequency applications for communications and sensing, with terahertz enabling new capabilities in defect detection and biological imaging.

• Q: What is the nature of your relationship with NVIDIA around the iSing AI models, and what does this collaboration mean for Inflection? /

  A: NVIDIA is one of Inflection's strongest ongoing partners. Inflection adopted both of NVIDIA's new iSing AI models: one improves quantum computer calibration to boost performance and uptime, the other improves error decoding for logical qubits. This collaboration reflects Inflection's strategy of embracing AI-led workflows to accelerate progress on quantum technology development, and Inflection expects more collaboration opportunities with NVIDIA in the future. Inflection was the only neutral atom company, and one of only two total companies, selected to adopt both iSing models.

• Q: Does your multi-product platform strategy actually drive cross-selling opportunities, and can you share examples? /

  A: Yes, cross-selling is already active. Lower-price products like TICKR clocks, quantum cores, or CML software act as a foot in the door to expand into other product lines with the same customer. For example, position, navigation, and timing customers need a TICKR clock (for timing), quantum spectrum (to receive timing and other signals), inertial gravity sensors (for dead reckoning in GPS-denied environments), and CML software (to process sensor data), creating natural pull-through across the portfolio. Many Inflection products also rely on other internal Inflection components — for example, quantum computing and spectrum devices use TICKR clocks to improve laser stability — creating inherent bundling opportunities.