Quantum Computing, Inc. (QUBT) Q3 2026 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen. And welcome to the Quantum Computing Inc. Third Quarter 26 Shareholder Conference Call. At this time, all participants are in a listen-only mode. Following today's prepared remarks, the line will be open for questions. It is now my pleasure to introduce you to your host, David Moskowitz. Head of investor relations at QCI. David, please go ahead.

Thank you, operator, and welcome to QCI's third quarter 26 financial results and business update conference call. Before we begin, please note that today's remarks include forward looking statements including statements about our expected results, plans, strategy and market opportunities. These statements are based on current expectations and involve risks and uncertainties that could cause actual results to differ materially. These risks are described in today's press release and in our SEC filings including our most recent Forms 10-K and 10-Q. These statements speak only as of today, and we undertake no obligation to update them except as required by law. On the call today, we have Dr. Yuping Huang, QCI's Chairman, Chief Executive Officer and Christopher Bruce Roberts, our CFO. The team will provide an update on the business followed by a question-and-answer session. I will now turn the call over to Yuping. Please go ahead.

Thank you, David. Good afternoon, everyone, and thank you for joining us. Looking at our third quarter and the year so far, I believe QCI is entering an important new stage. We have spent years building photonic based quantum technology designed for the real world. Now we are beginning to see our investments come together and our attention is shifting from what we can build to what we can put to work for customers. That means getting our technologies into customers' hands. Delivering on our commitments and building a business that can grow sustainably. Execution matters. More than ever. Our third quarter results reflect progress in that direction. In Q3, we generated a record revenue of $9.5 million led primarily by our expanded photonics business which serves customers across a range of established markets. The acquisitions completed this year added established products and customer relationships. As well as manufacturing capabilities, essential to our quantum road map. That gives us commercial opportunities to grow revenue today while supporting the technologies we are developing for the future. During the quarter, we provided cloud access to our Directory system to Hamed Khalifa University in Qatar. Supporting the research education and adoption of quantum computing and networking. That builds early progress including the installation of a directory optimization system at a leading global consulting firm and the agreement with Planck Dynamics for our neural wave reservoir computer in defense applications. More recently, we announced our next generation Dirac-3 quantum optimization machine which is designed to solve optimization problems with up to 9.98 thousand variables, an important step. In our quantum computing road map. We expect the first customer shipment during the fourth quarter. As a part of the announcement, we published the benchmarking results involving problems with up to 9.98 thousand variables, comparing the system's performance with leading classical optimization solvers. We are encouraged by these results and what they tell us about the progress in developing increasingly capable quantum systems. This is still work to do as we evaluate performance across different applications. But advances like these bring us closer to solving larger more complex problems for customers. These are encouraging developments for sure. But what matters most is what customers can ultimately do with our quantum technology. Our recently announced collaboration with ImmuBio is a good example. Our collaboration with ImmuBio is exploring how direct optimization AI and the conventional analytics could potentially identify new insights for clinical research data. It is early work, but it reflects what matters most to me. That the true measure of innovation is not just what a technology can do, but what it enables others to achieve. that is exactly the thinking behind the broader platform we are building. Our quantum photonics platform, extends beyond computing into sensing and communications. as well. Some applications are commercial today while others need further development and validation. Our manufacturing capabilities connect these opportunities. By combining photonic design, chip manufacturing, and advanced packaging at our North Carolina facility and our thin film lithium niobate facility in Arizona. We gain greater control over development and production. This infrastructure serves 2 important purposes. Supporting our proprietary quantum systems and serving established photonics markets. The task now is to integrate it effectively and deliver for customers. With that in mind, we are focused on 3 priorities over the next, 12 to 24 months. The first is growing our commercial business. We have an opportunity to build on the established businesses and customer relationships we have added. While expanding the market for our quantum and advanced photonics systems. Our photonics and advanced packaging businesses provide a commercial foundation we can grow today. While supporting the development of our quantum technologies. As those technologies mature, we see opportunities to introduce them to a broader range of customers. Our goal is to turn growing interest in QCI into orders. a stronger backlog, deployments, and the lasting customer relationships. Second is to scale manufacturing. We are bringing operations together expanding capacity and improving efficiency. Reliable repeatable production matters as our quantum technologies mature. Our third priority is advancing our quantum portfolio. We have achieved all the objective outlined in our 24 to 26 portfolio road map. So we are moving into the new phase to scale our manufacturing and product lines. Our goal is to make quantum systems smaller more capable, and easier to deploy. A major part of that work involves integrating more of our technology onto photonics chips. Which brings us closer to the compact practical systems we envision for the future. These 3 priorities are closely connected. Our quantum road map guides the technologies we develop our manufacturing capabilities, help us bring those technologies into production. And our commercial efforts helped us understand where customers see value and where we should focus our resources. It is how we move from building the technology to build a sustainable business around it. That brings me back to something fundamental about QSAR and why we have chosen photonics as our approach. I believe for many years, that light offers 1 of the most promising path to making quantum technology practical and accessible. There are several approaches to quantum computing. As we all know, each with its own strength and challenges. We choose photonics because we believe it offers important advantages in bringing quantum technology into broad real world use. Our direct systems, for example, operate at room temperature, with relatively low power requirements and without the specialized cryogenic infrastructure. Required by many other approaches. That can make a meaningful difference in terms of cost. And the complexity. Photonics also allows us to build on decades of advances in optical technology and the semiconductor manufacturing. And with the capabilities we have assembled at QSI, we are bringing more of that process under our own control. This is still considerable work ahead. But I believe this approach gives us a strong foundation for the future. My ambition has always been to make quantum technology useful and accessible on the much broader scale. And I believe Light offers a practical near term path toward that goal. When you are taking the journey 1 step at a time. And I am encouraged by the progress we have made. With our solid Q3 results as evidence. With that, I will turn the call over Christopher to review our third quarter financial results and how we are managing our resources to support the work ahead. Christopher?

You, Yuping, and good afternoon, everyone. I will now review our third quarter financial performance our balance sheet and how we are approaching capital allocation as we move into the next phase of QCI's development. Starting with revenue, we generated $9.5 million in the third quarter up from $384 thousand in the same period last year. To put that growth in perspective, our third quarter revenue exceeded the $9.2 million of revenue generated during the entire first half of 26. Revenue was primarily driven by sales of photonic products serving aerospace, government and industrial applications. The businesses we acquired earlier this year have expanded our commercial foundation and are contributing to our financial performance. While also supporting our longer term quantum technology road map. We generated $428 thousand in gross profit during the quarter, for a gross margin of 4.5%. While margins remain modest, we are encouraged by the progress. As revenue grows, we see opportunities to improve manufacturing utilization increase operating efficiency, and expand margins over time. Turning now to expenses. Our operating expenses totaled $29 million during the quarter compared with $10.5 million in the same period last year. The increase is largely due to higher personnel and related costs associated with our expanded R&D sales, and marketing activity as well as approximately $1 million in acquisition related expenses. Interest and other income totaled $13 million during the third quarter, compared with $3.5 million a year ago. Primarily reflecting interest earned on our larger cash and investment balances. For the third quarter, we reported a net loss of $15.1 million or $0.07 per basic share. Compared with net income of $2.4 million or $0.01 per basic share in the prior year period. The change from net income to net loss is largely due to higher operating expenses as we have expanded the business and smaller mark to market gains on a warrant derivative. Partially offset by increased revenue and interest income. Turning now to the balance sheet. We ended the third quarter with approximately $1.3 billion in cash, cash equivalents, and investments. Consistent with our position at the end of Q2. Total assets were approximately $1.6 billion at quarter end while total liabilities were $47.7 million We also ended the quarter with approximately $39.1 million in contract backlog. Providing a foundation of business contracts as we expand customer relationships and convert opportunities into revenue. As of 9/30/2026, we had approximately $174.3 million in cash and cash equivalents. Approximately $1.1 billion in investments approximately $916.9 million in working capital. As a result, we believe our liquidity is efficient to fund our operations for at least the next 12 months giving us flexibility to support both our current operations and our longer term technology development plans. At the same time, mindful of financial discipline as we move from building our capabilities to scaling the business. The acquisitions completed earlier this year were designed to strengthen our technology and manufacturing foundation while adding established commercial operations. Our focus now is on integrating those businesses effectively investing where we see opportunities for growth, and improving operating efficiency over time. We will continue to evaluate opportunities including potential acquisitions, that can advance our strategy, but any future investment must support our priorities and make sound financial sense. We believe we have the resources and capabilities to execute on our plans and the responsibility to deploy our capital thoughtfully to drive sustainable growth and long term shareholder value. With that, I will turn the call back to Yuping.

Thank you, Christopher. Before we go to questions, I wanted to return to an important point. How we are moving from building our capabilities to putting them to work in the real world. I believe quantum technologies offers tremendous potential. But it is a yacht industry. And adoption will develop differently across markets and applications. Some customers need photonic technologies today while others are exploring what quantum systems can enable as they become more capable and practical. We need to understand these differences and be thoughtful about where we invest. As Chris outlined, our financial position gives us considerable flexibility particularly in the industry where technology takes time, to mature. But having the resources to invest does not change our responsibility to use them wisely. We need to focus on where our technology can have the greatest impact. Where customers see value and where we can build a business that performs over time. I am proud of what our team has accomplished. We have brought together a remarkable group of people and their capabilities, and I believe we are in a much stronger position today than we were just 1 year ago. But there is a lot of work ahead. I have always believed that being early creates opportunity. But execution is what makes the opportunity last. For us, that means advancing the science while building products customers can depend on. It means growing commercial relationships improving manufacturing, and following through on our road map. And it means being ambitious about what we can achieve while remaining realistic about what it takes to get there. I believe we are moving in the right direction. We are starting to see the results of our investments. And we have clear understanding of where QCI can create value. Thank you for your continued interest. We are ready to take questions.

Certainly. The floor is now open for questions. If you wish to join the queue to ask a question at this time, please press 1. We do ask if listening on a speakerphone that you please pick up your handset while asking your question to provide optimal sound quality. Once again, please press 1 on your phone at this time to join the queue to ask a question. Please hold for just a few moments while we poll for questions. Your first question is coming from John McPeake with Rosenblatt. Please post your question. Your line is live.

Thank you. Thanks, Yuping, Christopher, and Dave. Good work getting the company scaled here. You have some real revenues. Yes, now. I have a few. The first 1 on the Dirac-3, congrats on the first customer shipment in Q4. Can you comment at all or elaborate more on what the reception of the product has been like? Any initial feedback from potential users here with the 10x variable count? Yeah.

We received some very positive feedback not only in the largely expanded capacity of the variables that the machine can support, but also in the quality of the solutions. In fact, John, as you probably have seen that published result and we actually got very good result. Benchmarking results comparing with best-in-class solvers using the classical methods. And our online customers have also started to see the performance that actually some feel pleasantly surprised. So I am very pleased with that, of course. Our development, we are not stopping here. So. And immediately after we release our Dirac-3, actually, so the team has started to further improve it. Our goal is always that we want to develop the quantum value. To give our customers the high return on investment and I am very happy with the first steps we have taken and, look forward to reporting our continued progress.

Great. And I have 1 for Christopher, if I could just have a quick follow-up. The backlog was down just slightly from the June quarter. Any view as to how that might develop And related there is, you know, the flip in Washington. I should not say Washington. Some of the jobs were in Washington, but in the midterm states, do you think that might change the outlook for the pipeline at all? And affect your backlog going forward, or how should I think about that, guys?

that is a really good question. there is a lot to unpack in there. Let me take it 1 piece at a time. In our business revenue and contract awards tend to be lumpy. So I do not think there is much you can read into. In fact, our backlog was down like $2 million from where we were. $3 million from where we were in the last quarter. I am confident that we will, you know, over the next few months, as we continue to bring in additional work, the backlog is going to fluctuate and backlog is essentially the difference between contracted orders and revenue. So I think it is a good sign that backlog continues to be high, but we certainly generate a lot of revenue out of the backlog that we had at the end of last quarter. In terms of the impact of the political environment, it is a little early to really know where the majority new majority wants to go. I do not think they figured that out themselves. 1 thing that seems to be a consensus target is AI and particularly data centers. And I think it actually presents an opportunity for QCI because we have done some analysis on our own looking at the application of Dirac optimization to improving the efficiency of the utilization of compute resources in data centers. And we think we can provide some advantages and some improvements. If that bears out, then we may have a real market on the existing data centers because we can provide more compute resource without building new data centers. There again, we will have to see. But initial research internally has been rather encouraging. So I think this will present some opportunities. It may also present some challenges. But it is a little early to make any predictions and you know, I will leave the predictions to Kalshi.

Uh-huh. All right. Thanks, team.

Thank you, Joe.

Your next question is coming from Max Michaelis with Lake Street Capital Markets. Please pose your question. Your line is live.

Hey, guys. Thanks for taking my questions, and congrats on the solid quarter. Question for me kind of on your priorities going forward. Around commercial growth and manufacturing scale. I mean, kind of milestones are we what kind of milestones should we be looking for on the commercial growth side, maybe over the next 24 months? And then I guess what are some of the bigger hurdles on the manufacturing scale side of the priority list here that we should be paying attention to?

Thanks, Max. I will take a first cut, and Christopher will chime in later. Over the next 12-18 months, our priorities, as I outlined in the call, right, So we continue to grow our business opportunities and revenue continue to expand our manufacturing Right? And also we will continue to push our tech. As I said last time in the earnings call, QSI is really transitioning from a tech innovation company to a scalable manufacturing con. Company. It is very interesting, and it is the pathway that we had to take for us to grow big. And the entire team is undertaking this challenge And, also, there is a lot of opportunities there. But the acquisitions that we have made so far in this year. have been going very well for us and the integration is progressing has been very well, so we are actually developing high synergy on a very deep engineering level. As of now. So I am very confident on delivering on those priorities over the next 12 to 18 months. Christopher, do you have anything to add?

Yeah. Sure. Max, appreciate the question. And to pick up where Yuping was saying, as we transition from the technology innovation phase to commercialization, you are going to see some lumpiness there. We are not giving guidance at this time because timing of orders and deliveries is just difficult to predict. So quarter over quarter, we are likely to see some lumpiness and bumpiness But over say, 12-15 months, we are confident that we will have a strong finish to this year and you know, we will have a solid backlog going on leading into 2027. And I think that in terms of maybe not milestones, but signs of progress. Growing our backlog and bringing in additional orders from a broader range of customers is something that you know, you should be looking for. That will be signs that the market is validating our technology and that we are on the right track.

All right. Perfect, guys. Okay. Thanks for taking my question.

Yeah. Yeah. Thanks, Max.

Your next question is coming from Scott Buck with Milan Partners. Please post your question. Your line is live.

Hi. Good afternoon, guys. Appreciate the time. I just want to follow-up on backlog. How much does that converts over the next 12 months? And how does it split between, you know, kind of government, aerospace and commercial?

Okay. A good question, Scott. The backlog typically will burn off over between 12 to 18 months. So most of that will be used up or is likely to be converted to revenue. In the next 12 months, but there is there is a bunch that will take longer to materialize and deliver. That is just the nature of the business when you are building small numbers of technologically very complex products It. it is hard to know whether it is gonna be ready this week or know, a couple of weeks from now. And that can that can change when you recognize the revenue. Forgot the second part of your question. Oh, the split there between, I mean, government aerospace and commercial space. Yes. We are still, largely aerospace, and government probably 70-ish percent most of that subcontracts. Over time, we are expecting that to balance out, be closer to 50%. But the near term, a lot of the advanced products in photonics and quantum have a market as a, you know, government R&D ish. So the. Over time, we expect to see as the technologies mature and the market develops, or confidence in the return on investment that you will you will see more sales. Commercial sales. Right now, we think that the mix is gonna be predominantly government, and this is consistent with what every other company in the quantum sector. Great. that is helpful. And then I want to ask the release refers to a bringing manufacturing operations together. Does that mean consolidating sites or just kind of moving work between fabs? I think it has more to do with the integration of the company. Although, defer to Yuping on exactly how to rephrase that. We have operations, as you know, in 8 states. 11 facilities. So we are a bit spread out, and we are working on the integration of our accounting and manufacturing backbones so that we can move people, technology, subsystems smoothly between facilities. For example, we do a lot of the chip fabrication and design work in Tempe, but we do a lot of the advanced testing in Hoboken. And, you know, that is the way we are integrating the teams. And we have some. You know, we invest in having people travel to other sites to make sure that. With all the new people that come into the company, over the last year, that there are good working relationships between the teams. I think that is really what we are referring to. We are not looking to consolidate facilities. We are really trying to make sure that the team we have thinks and acts with a broad envelope that goes coast to coast and includes all of the sites and all the resources And the best way to get people to understand what resources are available within the organization to have people move around and coordinate and get to know each other.

Yes, Scott, just as Christopher said, there is a no need or no plan and no plan for consolidation. In fact, from the beginning, we have very strategic acquired those sites so that each would fill in a gap that we need. For our scalable manufacturing and each side actually brings pretty complementary expertise and the capabilities to our quantum road map. So instead of consolidating just as Christopher said, what we are doing now is to build a very strong synergy from bottom to top. Right? So on all levels. For example, so 1 project that our team has been working on is that we fabricate some parts in our Santa Barbara site and some parts, in our in our Boston site, and so then we bring them to our prison site, and then the prison site is actually working with our North Carolina site. So it is such the teamwork. It is such the synergy that we are building up very quickly.

Okay. I appreciate the added color, guys. that is that is very helpful. And if I could squeeze 1 last quick 1 in.

Absent additional M&A, the current level of OpEx, is that a fair run rate moving forward, Christopher? Or are there some material OpEx increases expected into 2027? The current run rate, I think, is a reasonable number. We are continuing to hire. I think at the end of the second quarter, we had a little over 300 310 to 320 people. We are 330-plus right now. So we are continuing to hire. But that OpEx level is a pretty good estimate of where we are right now. there is about $1 million of trailing M&A type costs that are in there, but if you take that out, that number is about where we are in terms of burn rate. The main cost, main driver is payroll. And, you know, followed by supplies, parts, labs. Laboratory stuff. And then facilities, you know, rent. So as we increase our headcount, we can expect that there will be some increase in the OpEx run rate, but not dramatic. So I think we were that a pretty-- the third quarter number is probably a pretty good predictor for the next quarter. Okay. Perfect. Sounds like a more natural increase than any kind of step function coming, so that is great. I appreciate the time, guys. This has been very helpful. Thank you. Sure. Thank you, Scott.

Once again, if you do have any questions or comments, please press 1 on your phone now. Your next question is coming from Nehal Chokshi with Northland Capital Markets.

Great. Thank you. Fantastic to see the Dirac-3 be released. Could you compare that to other analog based quantum computing systems out there? you know, from a performance perspective, basically?

We compare that with the best solvers that we can possibly find as offered by the industry, by the market. So as you know, most other quantum platforms, they do not provide comparable or close to comparable performance than the best classical solvers. So we have focus only on comparing with the best solvers and. Which is currently by the by the nonquantum method. So my short answer to you is no because we compare with the best.

Understood. I am and I am sorry. What is the classical solver that you compared to?

what is the best classical solver algorithm that you compared to? Christopher, I think do you think that we can we can provide the name? I think we can.

We have. You know, it is it is a commercial product that we can certainly say we tested it. I am sorry. I cannot hear you. Yes, yeah, sorry. We can.

We can disclose Okay. Yeah. what we are benchmarking against. Okay. Sure. Sure. Yes. And we compared with Hexalay and. Which is a very well known specialized optimization software company. And in the meanwhile, for the specific benchmark problems that we have tested, We dug into the literature results, and, we compared with those best algorithms that our team could find in the literature.

And how did it actually compare to actually you know, in terms of the actual performance? And how are the benchmarks done in terms of performance?

As we reported, in our paper that actually we posted online, So the overall performance we are better And there are, of course, some problems that our machines either comparable or less optimal in terms of getting the solutions.

But for most problems, we do see a key advantage of our machine in terms of both the time to solution and the quality of solution. Got it. that is really helpful. And then given this differentiation even relative to a classical solver, Could you give some details around the pipeline that you are seeing for the Dirac-3?

either, you know, as a cloud computing instance or as, you know, on-premise orders Yep. We will support both. And as reported, in the call earlier, we are shipping out our first Direct 3 s. To a customer And in the meanwhile, so we also have partners across the country. And so we are looking at opportunities of upgrading the existing system with this Dirac-3. And in the meanwhile, so we continue to provide cloud access so that people can access our directory from anywhere they like. And, it looks like customers are pretty happy with the performance and the because it is indeed a much more powerful machine and with performance that oftentimes we can see better than the classical solvers. And this is I do not want to make a broad claim that we now have achieved the quantum supremacy, and it is not a good word. Anyway, but I think as of now, with Dirac-3, there is certainly a quantum advantages that customers can access today.

And can you take compare maybe this pipeline relative to the prior generation of the direct? Yep.

So Dirac-3 has just been released Right? So we are still in the process of finding out how the pipeline. How big the pipeline can grow But I think a lot of customers that use Dirac-2 would be very happy to switch to Dirac-3. And then because of the much higher capacity and much higher performance in the quality of solutions. We should we should be expecting some significant growth in the in the pipeline and the turn those into revenue in the future.

Okay. So to be clear, the like the majority of the pipeline is coming from Dirac-2 customers, existing Dirac-2 customers.

So as I said, that I think it is natural for the Dirac-3 customers to switch to Dirac-3. But because of the much higher performance and much larger capacities, we should be able to attract more and more customers and probably in other application areas that we had not seen in Dirac-2. Got it.

Okay. Thank you for that clarification. Thank you.

Your next question is coming from Kieran McCabe with Cantor.

it is Kieran McCabe on for Troy Jensen.

My first question is on the ImmuBio announcement. Mentioned that it was the first customer in the pharma and biotech. Industry. And I noticed last quarter, you had announced a new chief revenue officer, Susan G. Hunt. And so I was just kind of wondering, what is the strategy going forward. Are you looking at other industries outside of your traditional aerospace and defense areas? Like biotech and pharma. To expand into. And then when you kind of get into areas like biotech and pharma, are you looking to get deeper within organizations or kind of spread within the those vertical markets? And I have a follow-up. Yes, definitely. So in the past before working with ImmuBio, we have already found applications in the areas of drug discovery and the patient scheduling. And now, with ImmuBio, so we actually realized that our direct 3 or Dirac-3 can also significantly contribute to clinical trial studies and as you know, drug discovery itself is complex, and trial studies, even more so. And there is a lot of data linking to biomarkers for example, and their Phase 1, Phase 2, Phase 3 studies. And I am excited, and also curious to see what the Dirac-3 can contribute to the biotech sector from the clinical trial study angle. Thank you.

And my follow-up is on the enhanced semiconductor acquisition. I believe the rationale for that was really to accelerate the time line for Fab 2. Can you provide any more details on sort of the integration of enhanced and sort of you know, the acceleration of that timeline. You know, how's that proceeding? You know, any kind of color you can provide on that?

Yes. And that is a very good question. If you recall, last year when we first published our road map. Right? So our initial plan for fab 2 was to use a greenfield approach And in that approach, actually, we expected to complete our step 2 maybe at the end of 2028. And now with enhanced and so we have accelerated that road map quite a lot. And enhance really launched our fab 2. But we will not stop here. And so what we are going to do is to build upon Enhanced's very unique and leading edge capabilities in advanced packaging. And expand that to increase the manufacturing capacity while turning some of those capabilities to directly support of our quantum products. And to that end, our internal PIC engineering team has worked with the enhanced manufacturing team, very closely and to give a heterogeneously integrated photonic circuits for our quantum technology, and we have been making very fast progress. On that front.

Great. Thank you so much for the color. Thank you.

Your next question is coming from Ed Woo with Ascendiant Capital. Please pose your question. Your line is live.

Yeah. Congratulations on the quarter. My question is on the pipeline. How much of that is US business versus international? And what do you think the long term revenue potential, pipeline potential could be for your business? Thank you.

Okay. Thank you for the question. At the present time, bulk of our sales are domestic. We are certainly looking at international opportunities. We have made a few small sales overseas. We are continuing to market there, but the bulk of the backlog and our revenue is still really domestic In terms of. If you are asking how big is the potential market I am not sure that was quite your question.

I do. We will have to refer you to a number of well-written market studies by some big. Some big firms that we are really not in the business of doing market studies of that sort. What I meant was like, right now, it is mainly domestic, but going forward, do you see yourself as maybe a 50-50 type business, or do you see yourself focused on domestic for the next several years?

I think we are going to be we are certainly trying to generate sales you know, around the world. As a practical matter, it is easier to sell domestically than it is overseas. And with the geopolitical climate, and the fact that we are dealing with-- our technology is very advanced. And arguably cutting edge There is a possibility that there could be export restrictions later on. ITAR and other things that could complicate the process of doing international sales. So I want to stay away from making precise predictions of where the where our revenue could come from in the future when I do not know what the rules are gonna be. 50 sounds aggressive, certainly in the near term. But we are certainly looking to expand our international footprint as much as possible. And the extent that we are able to support the customers that we sell to.

Great. that is a great answer to my question. I wish you guys good luck. Thank you.

Thanks, Ed. Good to hear from you.

Your next question is coming from Jesse Sockler with BTIG. Please pose your question. Your line is live.

Hi, everyone. Thanks for taking my questions this afternoon. A lot's been run through, but I do think maybe the bigger picture here, I think most of the investment world still sees the various acquisitions across LSI, Enhanced, NuCrypt, alongside the core business. I think a lot of investors see them as 4 separate businesses. But you discussed integrating the teams on the back end, but can you help investors understand what, like, the first wave of maybe flagship products or first integrated system on the road map is and what potential timeline there is to combining these technologies and providing an update for investors there?

Thank you, Jesse. Yes. And those acquired facilities, and so they actually serve 2 important purposes here. So 1 is, of course, to support our quantum roadmap. And this is well underway, and our team actually has been working closely together across all the sites and to make some prototypes that are only possible after we have acquired and integrated those facilities. And on that front, we do hope that we can demonstrate some heterogeneous integrated circuits in the timeframe of 12 to 18 months, and it could be shorter. And we will report the progress on that front. The second, important contribution of the sites are to contribute to our near term revenue based on those quantum enabling circuits and services. This is important because we believe that a sizable number of customers of our quantum technology in the future will come from our existing customers, already using our for example, photonic components, foundry services, and we do hope to say that we will be able to tap onto the existing pipelines not directly in the field of quantum. But eventually, we will turn those into. Turn at least some of those into our quantum technology and the product pipeline. And that is also happening. And I think the third important point is that, as I said earlier, we are really looking to volume production of our quantum devices. And we have already spent over 20 years in the quantum R&D, and now it is really the time for us to solve the scalable manufacturing challenge. So that we can mass produce quantum product and to put quantum into the hands of many, many customers. And to create a broad impact in multiple application fields. Jess, I am not sure if I answer your question.

Okay, you did. Yeah.

I mean, it sounds like there is a lot underway to enhance the quantum computers that you offer today with the technology you have acquired.

Sounds like we can expect an update over the next 12 to 18 months. And then, I mean, yeah, maybe just to wrap up here, you mentioned on the next phase of capital allocation with over, you know, a billion in cash. If there is any idea on if you could, disclose. Is there a timeline for spending that or guidance on how you are going to spend it, or at least, is there a timeline for explaining to investors what the plan is going to be in the near future.

Let me quickly tell you our strategy and then I will turn it over to Christopher for some details. Our strategy has always been that we make acquisitions to accelerate our quantum road map. And this is a very disciplined approach that we have followed. For all the acquisitions that we have made. And in the meanwhile, so we understand that this is a competitive industry, and we have to move really fast. So we will always be optimistically looking at opportunities. But all would need to pass our fundamental test. Which is to accelerate our quantum road map with that. So, Christopher, please chime in.

Yes. Jesse, you are asking a really good question, and as I said in previous calls, we earmarked several hundred million dollars for capital, CapEx, and the investment we are planning to make in the enhanced Fab 2, if you want to call it that, it is in the ballpark of $70 million to $80 million. We have already begun ordering equipment. A lot of that spend will take place between now and March 31 of next year, end of the second quarter. We are continuing to evaluate capital or equipment needs. And as do things-- we are constantly reviewing deal flow and acquisition opportunities. Recognizing that this is a capital intensive business. And while we are very much, interested in growing, we want to grow in a focused manner. And make sure we have sufficient working capital to ride through any periods of time when raising capital would be highly dilutive when our stock price is down. So we are looking to protect the investors and deploy the capital wisely. We have already done 3 acquisitions, and like, just the last 8 months. So I think we are doing a pretty good job of putting the money to work. And you know, we are gonna continue to follow this path.

All right. Thank you. Thank you, Jesse. You are welcome. Thanks for your interest, Jesse.

There are no questions in queue at this time. I would now like to turn the floor back over to management for any closing remarks.

Thank you, operator, and thanks to everyone who joined us today. I appreciate your interest in QCI, and look forward to updating you again next quarter. Thank you, and have a great day.

Thank you, everyone.

This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.