Infleqtion, Inc. (INFQ) Earnings

Management highlights

### Market and Government Progress - The global quantum market is accelerating, with governments moving from basic science funding to prioritizing commercialization and concrete deployment timelines. The U.S. signed a new quantum executive order accelerating commercial use, and the UK announced up to 2 billion pounds in government quantum investment; Australia named quantum a top defense innovation priority. - Inflection was selected for an up to $100 million proposed Department of Commerce award to advance neutral atom quantum commercialization, and three Department of Energy Genesis mission projects spanning quantum computing, AI, nuclear applications, and quantum sensing. - Inflection delivered the UK's first and only operational 100 physical qubit quantum computer to the UK National Quantum Computing Center, building on its 10+ year local presence. ### Technical Progress: Quantum Computing - Inflection remains on track to demonstrate 30 logical qubits on its scale quantum computer by the end of 2026, with three end customers (finance, energy, precision medicine) lined up for the demonstration. - The company set a new experimental record for two-qubit gate fidelity with dual species, and a newly published technique paves the path to exceeding 99.9% two-qubit gate fidelities. - A new neutral atom quantum computer with NVIDIA NVQ Link integration will be deployed at the Illinois Quantum and Microelectronics Park by 2027, designed to scale to over 50 logical qubits and be made available to end customers via the cloud. - Global power management leader Eaton is partnering with Inflection to explore quantum applications for energy problems via private cloud access to Inflection's QPU. - AI tooling (OpenAI GPT 5.6 Sol and Codex) is accelerating development, enabling discovery of new more efficient circuit conversion techniques and boosting team productivity. ### Technical Progress: Quantum Sensing - The NASA JPL quantum gravity gradiometer Pathfinder program is progressing toward prototype testing in microgravity conditions at Germany's Einstein Elevator, with growing customer interest in terrestrial critical mineral mapping. - Inflection launched the America's Quantum Space Initiative to accelerate space-based quantum capability deployment, with broad industry and research interest. - The company introduced a new quantum RF spectrum sensing architecture, with growing demand from defense customers and emerging commercial interest; related AI contextual processing technology is being deployed for the U.S. Navy, U.S. Army, and European Space Agency. - Precision timing product Ticker is commercially available via Saffron's global sales channel, has secured a satellite design win, and a next-generation version will launch before the end of 2026. ### Operational and Team Expansion - Year-to-date 2026 headcount has grown by 25%, with most new hires in technical roles, increasing overall talent density. Dr. Joe Buck, a 23-year neutral atom and photonic systems veteran previously at Lockheed Martin, joined as Senior Vice President of Quantum Computing Systems. - Inflection is expanding facilities in Chicago, Oxford, and Louisville, adding new research, development, and manufacturing capacity. - Inflection made a $3 million strategic equity investment in Oratomic, a private neutral-atom quantum startup and customer of Inflection's quantum cores business, to enable future technical and commercial collaboration.

Guidance

- Full year 2026 revenue guidance has been raised upward from prior levels to approximately $43 million, driven by stronger-than-expected Q2 performance and increased booking visibility across both quantum computing and sensing segments. - 2026 capital expenditure guidance is maintained, with a measured step-up planned as the company completes build-out of its expanded facilities. - 2026 cash burn guidance is maintained, with a modest uptick expected that remains low relative to industry peers. - Management reconfirmed the existing target of demonstrating 30 logical qubits on its scale quantum computer by the end of 2026. - Management expects a measured increase in annual cash burn to support continued investment ahead of expected 2027 revenue growth; more detailed 2027 revenue guidance will be provided when Q3 2026 results are reported. - Long-term guidance remains unchanged: as commercial quantum computing systems scale and sensing business grows, revenue is expected to outpace operating cost growth, generating meaningful operating leverage.

Segment performance

Inflection operates two core product segments: Quantum Computing and Quantum Sensing. Total company revenue for Q2 2026 was a record $12.6 million, representing 116% year-over-year growth. QGG (quantum gravity gradiometer, a quantum sensing program) was explicitly called out as the key driver of Q2 revenue strength. Remaining performance is split between the two segments: 1. **Quantum Computing**: Revenue is growing from customer POCs, government program awards, and system deployments. The three end-customer 30 logical qubit demonstrations (finance, energy, precision medicine) are all revenue-generating, and the segment is seeing faster-than-expected growth in customer demand. 2. **Quantum Sensing**: This segment includes gravity gradiometers, quantum spectrum sensing, precision timing (Ticker), and space-based quantum systems. Key commercial progress includes a secured satellite design win for Ticker via the Saffron sales channel, growing customer engagement for terrestrial critical mineral mapping with quantum gravity sensors, and ongoing development of the JPL quantum gravity gradiometer Pathfinder program for orbital deployment. Geographically, 92% of Q2 2026 revenue came from the United States, up 10 percentage points year-over-year, with a more normalized geographic mix expected in the second half of 2026. Remaining performance percentage split was not disclosed.

Risks & headwinds

No explicit discussion of material operational risks, current operational failures, or new unpriced risk factors was provided during the call. Management noted that all forward-looking statements are subject to general risks and uncertainties that could cause actual results to differ materially from expectations, with detailed risk factors disclosed in the company's SEC filings (including the 2025 Form 10-K) and earnings press release.

Analyst Q&A

• Q: What are the relative strengths and weaknesses of neutral atom quantum technology compared to competing modalities like superconducting and trapped ion systems, and how do neutral atoms overcome slower per-gate processing speeds? /

  A: Pranav Gokhale, who has worked on all three major modalities, explained that neutral atom's core advantage is far superior scalability: Inflection holds the commercial record for a 1,600 atom array, far outpacing other modalities. While per-gate speeds are slower than superconducting systems, the number of total qubits and lower required gate count for customer applications offset this difference, resulting in comparable overall time to solution. Management does not rule out success for other modalities, but is prioritizing neutral atoms for its near-term commercialization path due to its attractive scalability profile.

• Q: What is the nature of Inflection's modular upgrade capability for quantum systems, and can multiple components be upgraded over time? /

  A: Modular upgrades allow Inflection to add new capabilities to existing systems by swapping only specific control components rather than replacing the entire base system. A concrete example is the 2025 upgrade that added in-computation atom reconfiguration capability by only adding new laser systems, retaining 99% of the underlying base system. Because neutral atom systems have pre-existing spare qubit sites (the qubits are naturally occurring), many upgrades only require swapping control components (like lower-noise lasers or photonics) to unlock more usable qubits and new capabilities, creating long-term upgradeability for customers.

• Q: How does AI accelerate Inflection's innovation, and what is Inflection's unique positioning to leverage AI for quantum development? /

  A: AI tooling has already dramatically accelerated development: the company recently discovered a method to cut logical qubit operation complexity in half that was generated with GPT 5.6 Sol. AI removes bottlenecks around mathematical theorem proving and circuit design, allowing human quantum physicists to compound their productivity. Inflection's key advantage is its large library of proprietary experimental data from its existing quantum systems, which is the critical bottleneck for AI to generate accurate, real-world improvements to quantum hardware and design; AI cannot generate useful progress without experimental data, giving Inflection a disproportionate advantage from AI tools.

• Q: Are the 30 logical qubit customer engagements revenue-generating, and how does current growth compare between quantum computing and sensing? /

  A: All three customer 30 logical qubit demonstration engagements are revenue-generating. Management is seeing strong accelerating growth across both quantum computing and quantum sensing, but has been surprised by faster-than-expected momentum in quantum computing opportunities, which will become more visible in future revenue results. RPO (remaining performance obligation) as of Q2 2026 was $21 million, a slight increase from Q1 2026.