Quantum Computing Inc. Q2 FY2025 earnings call

• Two revenue streams: quantum machines (tackling complex challenges in areas like biomedical research, etc.) and niobate photonic components (for next-gen communication, AI, quantum apps).
• Milestones: Secured quantum photonic vibrometer order from Delft University; shipped first commercial entangled photon source; Quanti AI portfolio had a major automotive manufacturer purchase; secured government subcontracts; foundry facility in Tempe, AZ completed and operational; key leadership appointments; added to 3,000 and 2,000 indices.

Revenue during the second quarter totaled approximately $61,000 compared to $183,000 in the prior year second quarter. Gross margin for the second quarter increased to 43% from 32% in 2024. The foundry is expected to have revenue slowly grow, targeting a significant revenue contribution in the next twelve to eighteen months as it ramps up. The quantum machines segment contributes to solving complex challenges in various sectors, while the niobate photonic components segment provides essential parts for next-generation applications. Revenue contribution details aren't broken down further in terms of exact percentages but the focus is on growth of the foundry and the two main segments.

• Foundry revenue is expected to slowly grow, targeting significant contribution in 12-18 months as it ramps.
• Intention to accelerate spending by hiring additional engineers and sales staff to move forward with technology development.

Q: Hey, gentlemen. Congrats on all the traction here. Maybe first off for Yuping. I'd be curious to know what are the two or three most important milestones that we need to see from you guys over the next one to three years?

A: Thank you, Troy. Over the next two to three years, focus is on integrating quantum machines with nanophotonic chips. Have been pushing testing and demonstration of quantum machine with discrete optical components. In 2025, finished foundry template and now translating quantum photonic technology from discrete components to on-chip. Over next two years, use bay nine bay nanophotonic chips in direct machine to enhance photonic reservoir system, quantum sensing system, and quantum photonic vibrometer. Integration will reduce size, weight, power, cost and boost performance. Foundry can support quantum machine development and offer services to others with preorders/orders.

Q: Just curious on OpEx. I mean, obviously, you guys have a much larger balance sheet now. And is there any intention to accelerate spending or do M&A, or just kind of maybe give us some color on what you think the second half R&D and G&A expenses might look like?

A: Well, it's a good question, Troy. We are certainly hiring additional people. Labor costs have grown quite a bit since last year. Bringing on additional engineers and sales staff and moving to accelerate the development of our technology. Do not have anything to announce relating to acquisitions, but looking at strategic opportunities is part of the plan, and we're in the process of talking with bankers and looking for opportunities that will enable us to fill out our technology roadmap, as well as accelerate revenue generation.