Logical qubits start outperforming physical qubits
Quantinuum closes in on breakeven point in quantum error correction
Broomfield, Colorado, August 4th, 2022 — Quantinuum researchers have hit a significant milestone by entangling logical qubits in a fault-tolerant circuit using real-time quantum error correction. The research, published in a new scientific paper that was released on August 3rd, is the first experimental comparison study of different quantum error correction codes in similar environments and presents a collection of several different experiments. These experiments include:
- The first demonstration of entangling gates between two logical qubits done in a fully fault-tolerant manner using real-time error correction
- The first demonstration of a logical entangling circuit that has higher fidelity than the corresponding physical circuit.
This milestone achievement is important because it marks the first time that logical qubits have been shown to outperform physical qubits — a critical step towards fault-tolerant quantum computers.
“Quantinuum’s trapped-ion quantum computing roadmap is designed around continuous upgrades, enabled our flexible architecture and our precision control capabilities. This combination provides for outstanding, first-of-its-kind achievements that help accelerate the entire industry,” said Tony Uttley, President and COO of Quantinuum.
David Hayes, a Theory and Architecture Technical Manager at Quantinuum and co-author of the new research paper, said the research moves quantum computing closer to the point where encoded circuits outperform more primitive operations.
“People have worked with error corrected qubits before, but they haven't reached this sort of special point where the encoded operation is working better than the primitive operation,” Hayes said. “The other thing that's new here is that in other experiments we're doing the error correction while we're doing the operations. An important next step for us is to get the error rate induced by the error correction itself down further."
The findings are described in the new research paper, “Implementing Fault-tolerant Entangling Gates on the Five-Qubit code and the Color Code”. The paper was recently published on the arXiv. Scientists used both the H1-1 and the H1-2 quantum computers, Powered by Honeywell, to compare the Five-Qubit error code and the Distance Three Color Code in these tests.
Quantum researchers are in the early days of experimental quantum error correction with a multitude of codes to test. Quantinuum researchers can explore a wider range of quantum error codes, compared to other quantum hardware designs, due to the architecture of the machine.
The System Model H1 uses a trapped-ion design and a quantum charged coupled device architecture (QCCD). Along with the inherent flexibility of this design, another strength is all-to-all connectivity. All the qubits are connected to each other which makes it easy to move information through chains of ions without creating multiple errors along the way.
“Instead of having to build a new machine every time we want to try a new code, we can just program the machine to run a different code, make the measurements and weigh the different pros and cons,” Hayes said.
Advancing quantum error correction
All forms of technology need error correction including servers in data centers and space probes sending transmissions back to Earth. For Quantinuum and other companies in the quantum computing sector, quantum error correction is one of the most important pillars of progress. Errors prevent quantum computers from producing reliable results before they are overwhelmed. Quantinuum’s researchers are working toward the milestone of fault tolerance, meaning the errors can be suppressed to arbitrarily low levels.
Natalie Brown, another co-author of the paper and an Advanced Physicist at Quantinuum, said that most classical error correction principles fail with quantum computers because of the basic nature of quantum mechanics.
“It becomes very difficult to suppress noise to very small levels, and that becomes a problem in quantum computing,” she said. “The most promising candidate was this quantum error correction, where we take the physical qubits, make a logical qubit.”
Logical qubits are groups of physical qubits working together to perform a computation. For each physical qubit used in a computation, other ancillary qubits perform a range of tasks such as spotting and correcting errors as they occur.
Ciaran Ryan-Anderson, a Senior Advanced Physicist at Quantinuum and also a co-author of the new paper, said the newest research paper builds on research performed in 2021 and published in Physical Review X. That work explained how researchers at Honeywell Quantum Solutions applied multiple rounds of quantum error correction to a single logical qubit.
“One of the first really important things to demonstrate was these repeated rounds of quantum error correction cycles,” he said.
That is one of several milestones on Ryan-Anderson’s quantum error correction checklist:
- Conduct repeated rounds of fault tolerant quantum error correction
- Feed forward and conditionally apply syndrome extraction
- Enable real-time determination of correction for a quantum error correction code
- Demonstrate general algorithmic real-time decoding
- Scale up quantum error correction with two logical qubits
- Hit the breakeven point when logical quantum computing starts to outperform physical quantum computing
“Quantinuum has achieved some of the milestones required to accomplish this now,” Ryan-Anderson said.
Five-Qubit Code vs. Color Code
Building upon the 2021 research involving one logical qubit, the newest research illustrates the Quantinuum team’s progress with quantum error correction and two logical qubits. The team tested two error codes familiar to quantum experts: the Five-Qubit Code and the Color Code. The Five-Qubit Code does not allow for a fault tolerant transversal gate using only two logical qubits. Researchers used “pieceable” fault tolerance to decompose an initially non-fault tolerant logical gate operation into pieces that are individually fault-tolerant. The Color Code, however, does allow the use of a transversal CNOT gate which is naturally fault-tolerant.
How the experiment worked
H1-2 can use up to 12 qubits and H1-1 can use up to 20. The Five-Qubit Code tested on H1-2 while the Color Code tested on H1-1. Both computers use the same surface electrode ion trap to control ytterbium ions as qubits. Ion transport to isolated gate zones with focused laser beams provides low crosstalk gate and mid-circuit measurement operations.
The researchers ran five experiments with different combinations of circuit elements to test the Five-Qubit Code and to understand the impact of fault tolerant design and circuit depth. The team found that the extra circuitry designed to increase fault tolerance had a negative impact on the overall fidelity of the logical operation, due to the large number of CNOT operations required.
The Color Code showed much better results due in part to the ability to use a transversal CNOT gate. The team ran seven experiments to investigate the fault tolerant potential of these codes. With the Color Code, the researchers found that the State Preparation and Measurement circuits benefitted from the addition of fault tolerant circuitry with a significant reduction of error rates: 99.94% for the logical qubits compared to 99.68% for the physical qubits. This was the only additional circuitry required to make the circuit fault tolerant from end-to-end, since the logical CNOT is transversal and naturally fault tolerant.
The researchers concluded that the “relatively economical fault tolerant circuitry of the Color Code will provide a better platform for computation than the qubit efficient five-qubit code.” Also, the researchers found that the Five-Qubit Code would be useful only in systems with far lower physical error rates than quantum computers have at this point in time.
Hayes said the team’s next step will be to surpass the breakeven point and provide proof of the work. “We are getting evidence that we're really darn close to that point, but there's a lot of work that needs to be done to actually prove it,” he said. “Just getting right there is not good enough, you have to actually get past it.”
A new classical+quantum connection
Another advance from this experiment is a new classical processor with enhanced capabilities which will be essential to scalable algorithmic decoders. The data from the classical functions were used to dictate the control flow and operations executed in the quantum program.
The decoders used in these experiments were partially written in Rust and compiled to WebAssembly (Wasm). The choice of Wasm provides an efficient, safe, and portable classical language to have functions that are callable from quantum programs.
The decoder implemented in Rust uses many high-level program constructs. The support for these features means that various scalable algorithmic decoders can be ergonomically implemented in various high-level languages that compile to Wasm (such as Rust, C, and C++) and called from quantum programs.
“It was pretty enabling for this particular experiment, and it'll be even more important for future experiments as these things get more and more complicated,” Hayes said.
Another advantage of the trapped ion architecture is the ability to do real-time decision making during the execution of the quantum circuit thanks to long coherence times and the ability to do mid-circuit measurement and reset qubits as needed.
“Our systems have very long coherence times which is super advantageous when integrating in the classical compute real-time decision making,” Hayes said.
The Honeywell Trademark is used under license from Honeywell International Inc. Honeywell International Inc. makes no representations or warranties with respect to this product. This product is produced by Quantinuum.
About Quantinuum
Quantinuum, the world’s largest integrated quantum company, pioneers powerful quantum computers and advanced software solutions. Quantinuum’s technology drives breakthroughs in materials discovery, cybersecurity, and next-gen quantum AI. With over 500 employees, including 370+ scientists and engineers, Quantinuum leads the quantum computing revolution across continents.
- Completed upgrade of Quantinuum’s Reimei quantum computer to its H2 system establishes RIKEN’s hybrid quantum-supercomputing platform as the most capable of its kind in the world and creates a pathway to expand research across electronics, energy and life sciences.
- Quantinuum and RIKEN will build upon this pioneering computing architecture to develop a fault-tolerant “Made with Japan” quantum computer to extend Japan’s long-term quantum leadership.
- To further accelerate commercial adoption of quantum-AI hybrid supercomputing in Japan, the partners will collaborate with SoftBank Corp. to develop a path to connect quantum computers directly with AI data centers.
TOKYO — November 10, 2026 — Quantinuum (NASDAQ: QNT), a leading full-stack quantum computing company, and RIKEN, Japan’s leading national comprehensive research institute, today announced an expanded partnership to advance quantum-AI hybrid supercomputing in Japan. Following a significant upgrade to Quantinuum’s Reimei quantum computer at RIKEN, the partners will pursue more advanced scientific and industrial applications, work with Japanese universities and suppliers toward the development of a “Made with Japan” fault-tolerant quantum computer, and collaborate with SoftBank Corp. to explore the connection of quantum computer with AI data centers in Japan.
Quantinuum’s quantum computer, Reimei, installed at RIKEN, has successfully completed its upgrade to System Model H2. Reimei is operated as part of the JHPC-quantum project, funded by NEDO. This upgrade further enhances the capabilities of the project's quantum–HPC hybrid computing platform and enables researchers to investigate more complex quantum systems that are increasingly difficult to simulate using classical computing alone, broadening the scientific problems they can explore.
Quantinuum and RIKEN will use the upgraded platform to combine quantum computing, supercomputing and AI in support of use case development across electronics, energy and life sciences. Building on their years-long collaboration, the partners will also draw on their experience integrating and operating Reimei to inform the development of a fault-tolerant “Made with Japan” quantum computer.
“Japan’s quantum ambitions require advanced capabilities today and a sustained commitment to developing what comes next,” said Dr. Rajeeb Hazra, Quantinuum CEO. “The upgrade to Reimei expands what we can explore with RIKEN across electronics, energy and life sciences. Together, we are building on this work to develop a fault-tolerant quantum computer with Japanese universities and suppliers, while exploring with SoftBank how these capabilities can become accessible to industry through Japan’s AI data centers.”
Two research projects that have begun operations on Reimei before the public launch of its services illustrate how Quantinuum and RIKEN are leveraging the hybrid platforms upgraded capabilities to push the frontiers of scientific discovery:
- Quantum-AI for materials simulation: The partners are using RIKEN’s JHPC-quantum GPU supercomputer, ROQUO, to train an AI model on Reimei-generated quantum data for magnetism simulations. Preliminary results suggest the model can make more accurate predictions than AI models trained on classical simulations alone and more precise predictions than the quantum computer itself. Understanding magnetism at the atomic level could inform the development of materials for next-generation technologies such as ultra-high-field MRI and smart power grids.
- Quantum-AI for biomolecular simulation: The partners are combining Reimei, RIKEN’s Fugaku supercomputer, and NVIDIA’s evolutionary AI agent running on ROQUO to simulate a complex photoactive biomolecule, targeting unprecedented scale and detail. Better understanding of how biomolecules respond to light could inform the design of more efficient solar cells among other industrial opportunities that could arise from advances in biomolecular engineering.
This research supports RIKEN’s AI for Science initiative and aligns with U.S.-Japan efforts to advance AI-driven discovery, including a planned $1 billion partnership under the U.S. Genesis Mission.
“With the upgraded Reimei quantum computer, we will be able to tackle more complex and larger-scale scientific problems that were difficult to address with the previous H1 system, further advancing quantum–HPC hybrid computing through our ongoing JHPC-quantum project,” said Dr. Mitsuhisa Sato, Division Director, Quantum-HPC Hybrid Platform Division, RIKEN Center for Computational Science (R-CCS). “Furthermore, the newly signed Memorandum of Understanding will pave the way for expanding our research into the use of quantum computing for AI for Science, a key initiative being promoted by RIKEN.”
The partners’ joint research and development toward a “Made with Japan” fault-tolerant quantum computer will involve Japanese universities and domestic components suppliers. This “Made with Japan” effort will combine Quantinuum’s quantum technology with domestic research and manufacturing expertise, drawing on lessons from integrating and operating Reimei at RIKEN.
Under a separate agreement, Quantinuum, RIKEN and SoftBank will explore how quantum computing can be connected directly with AI data centers in Japan. The partners will assess infrastructure readiness and examine how connected systems could support commercial quantum-AI hybrid computing services, broadening access beyond the research community.
“Japan has established a strong foundation for hybrid quantum-HPC computing through the NEDO-supported JHPC-quantum project,” said Takenori Kobayashi, Vice President, Head of Product Research & Development Division at SoftBank Corp. “Our responsibility is to turn these achievements into industrial value. Together with RIKEN and Quantinuum, we aim to advance a Quantum AI Datacenter that connects quantum computing with AI and HPC, making these capabilities accessible to businesses across Japan.”
Learn more about the expanded joint Quantinuum-RIKEN research available here.
Research Support
This project is supported by New Energy and Industrial Technology Development Organization (NEDO), an organization under the jurisdiction of Japan's Ministry of Economy, Trade and Industry (METI)'s "Research and Development of Quantum-Supercomputers Hybrid Platform for Exploration of Uncharted Computable Capabilities" (Project Leader: Mitsuhisa Sato) as part of the "Project for Research and Development of Enhanced Infrastructures for Post 5G Information and Communications Systems (JPNP20017)."
About RIKEN
RIKEN, a National Research and Development Agency, is Japan’s leading national comprehensive research institution renowned for high-quality research in a diverse range of scientific disciplines. Founded in 1917, initially as a private research foundation, RIKEN has grown rapidly in size and scope, today encompassing a network of world-class research centers and institutes across Japan. To learn more, please visit https://www.riken.jp/en
About SoftBank Corp.
Guided by the SoftBank Group’s corporate philosophy, “Information Revolution – Happiness for everyone,” SoftBank Corp. (TOKYO: 9434) operates telecommunications and IT businesses in Japan and globally. Building on its strong business foundation, SoftBank Corp. is aiming to activate the potential of AI across its businesses and drive implementation in line with its “Activate AI for Society” growth strategy. While further growing its telecom business, SoftBank is expanding its AI computing infrastructure and AI and Cloud service businesses with the aim of becoming a provider of Next-generation Social Infrastructure. To learn more, please visit https://www.softbank.jp/en/corp.
About Quantinuum
Quantinuum (NASDAQ: QNT) is a leading quantum computing company offering a full-stack platform designed to make quantum computing deployable in real-world environments. The company has commercially deployed multiple generations of trapped-ion based quantum systems built on the well-established QCCD architecture, which it has implemented with novel designs and capabilities to achieve the industry’s highest accuracy levels based on average two-qubit gate fidelity. Quantinuum has active engagements with market leaders across pharmaceuticals, material science, financial services, and government and industrial markets, as well as academic and research institutions globally. The company has a global workforce of approximately 800 employees, including top scientists and researchers. Over 70% of its technology team holds PhDs or Master’s degrees. Quantinuum’s headquarters is in Broomfield, Colorado, with additional facilities across the United States, United Kingdom, Germany, Japan, Qatar, and Singapore. For more information, please visit www.quantinuum.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements, including statements about the expected scope, benefits and outcomes of Quantinuum's expanded partnership with RIKEN and Memorandum of Understanding; expected capabilities and research applications of the upgraded Reimei quantum computer and RIKEN's hybrid quantum supercomputing platform; the planned joint research and development toward a "Made with Japan" fault-tolerant computer, including the participation of Japanese universities and domestic suppliers; the planned collaboration with SoftBank Corp. to connect quantum computers with AI data centers in Japan and potential development of commercial quantum-AI hybrid computing services; the expected results of ongoing research projects in Reimei, including preliminary results; Quantinuum's ability to help customers prepare for and realize commercial value from quantum computing; and the potential impact of quantum computing on sectors including electronics, energy and life sciences. Words such as "aim," "anticipate," "believe," "confidence," "could," "expect," "explore," "intend," "may," "path," "pathway," "plan," "potential," "seek," "suggest," "target," "will," "would" and similar expressions identify forward-looking statements, although not all forward-looking statements contain these words.
Forward-looking statements are based on Quantinuum's current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. These risks include, among others: the Memorandum of Understanding with RIKEN and the agreement with RIKEN and SoftBank Corp. may not result in definitive agreements, joint development or commercial services on the expected terms or timeline, or at all; Quantinuum's dependence on RIKEN, SoftBank Corp., NEDO, universities, suppliers and other third parties to perform their anticipated roles; the research results described in this press release are preliminary, were achieved in experimental settings and may not be confirmed or replicated at a larger scale, in logical computation, or in commercial use; Quantinuum may be unable to scale its systems, increase qubit counts or integrate its hardware, error-correction framework and software as planned; Quantinuum may not achieve its technology roadmap, including the development of a fault-tolerant quantum computer, on the expected timeline or at all; the pace of technical progress in quantum computing; Quantinuum's ability to maintain the availability and performance of its systems, including Reimei; competition, including advances by companies using other quantum computing modalities or architectures; the availability of funding, personnel and government support, including continued Japanese government funding of the JHPC-quantum project; risks related to international operations and collaborations, including compliance with export control laws and regulations; and the other risks described under "Risk Factors" in Quantinuum's Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 and its subsequent filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date of this press release. Quantinuum undertakes no obligation to update any forward-looking statement, except as required by law.
BROOMFIELD, Colo., November 9, 2026 - Quantinuum Inc. (Nasdaq: QNT) (the “Company”), a leading quantum computing company, today announced that members of its management team will participate in the Cantor Convergence 4th Annual Crypto, FinTech, AI & Energy Infrastructure Conference, taking place November 10-12, 2026, in Miami, Florida.
Quantinuum will participate in a fireside chat and host one-on-one meetings with investors during the conference.
About Quantinuum
Quantinuum is a leading quantum computing company offering a full-stack platform designed to make quantum computing deployable in real-world environments. The company has commercially deployed multiple generations of trapped-ion based quantum systems built on the well-established QCCD architecture, which it has implemented with novel designs and capabilities to achieve the industry’s highest accuracy levels based on average two-qubit gate fidelity. Quantinuum has active engagements with market leaders across pharmaceuticals, material science, financial services, and government and industrial markets, as well as academic and research institutions globally.
The company has a global workforce of approximately over 850 employees, including top scientists and researchers. Over 70% of its technology team holds PhDs or Master’s degrees. Quantinuum’s headquarters is in Broomfield, Colorado, with additional facilities across the United States, United Kingdom, Germany, Japan, Qatar, and Singapore.
Contacts
Investor & Media Contact
Shub Mukherjee - Investor Contact - investors@quantinuum.com
Aaron Sorenson - Media Contact - press@quantinuum.com
- Third-Quarter Revenue Grew 233% Year-Over-Year; Raised FY2026 Revenue Outlook
- Extended Fault-Tolerance Industry Leadership with Back-to-Back World Records, Validating Most Credible Path to Universal, Fault-Tolerant Quantum Computing
- Announced Nexus Roadmap Through Apollo; Platform Adoption Grew Nearly 20% Quarter-Over-Quarter and Job Submissions Increased Tenfold Year-Over-Year for the 12 Months Ended August 2026
- Secured Largest Cloud Agreement in Company History, Including Multi-Year Committed Full-Stack Access Through Apollo
- Expanded Enterprise Reach Through Leading Hyperscaler Agreement and Oracle Beta Launch
Quantinuum Inc. (Nasdaq: QNT) (the “Company”), a leading full-stack quantum computing company, today announced financial results for the third quarter ended September 30, 2026.
“In the third-quarter, we extended our technology leadership in the critical area of fault-tolerance, added to our customer base, and expanded our routes to market,” said Rajeeb Hazra, President and Chief Executive Officer of Quantinuum. “This accelerated momentum is supporting our raised revenue outlook for 2026 and giving us more confidence than ever in the opportunity in front of us.”
Third Quarter 2026 Financial Highlights
- Revenue was $9.1 million, an increase of 233% year-over-year, compared with $2.7 million in the prior-year period.
- GAAP gross margin was 33.3%, compared with (43.5%) the prior-year period.
- Adjusted gross margin was 74.6%, up 853 basis points versus the prior-year period.
- Adjusted EBITDA loss was $80 million, compared with a loss of $45 million in the prior-year period.
- GAAP net loss was $118 million, compared with a net loss of $52 million in the prior-year period.
- GAAP net loss per share attributable to Class A common stockholders was $0.46.
- Adjusted net loss per share was $0.29.
- Cash & cash equivalents were $1.94 billion as of September 30, 2026.
Adjusted EBITDA, Adjusted Gross Margin and Adjusted net loss per share are non-GAAP financial measures defined under “Non-GAAP Financial Measures.” For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, refer to the Appendix tables at the end of this press release.
Third Quarter and Recent Business Highlights
Commercial Highlights:
- Signed the largest cloud agreement in Company history, securing a multi-year extension with a leading global financial institution that includes committed access through Apollo and Nexus.
- Signed with another top 5 global pharmaceuticals company on applying quantum computing and AI to cancer-therapy materials that offer the potential to accelerate drug development and enable more effective treatments.
- Signed agreement with GE Vernova to advance application development in superconducting materials.
- Signed deal with Abu Dhabi Maritime Academy and Quincus for research and applications in maritime logistics.
- Expanded cloud distribution through a new agreement with a leading hyperscaler serving millions of developers and advanced Oracle partnership by launching a joint beta program for hybrid quantum-AI applications.
- Deepened U.S. government commitments by continuing to execute on DARPA QBI Stage B contract, actively discussing a Stage C scope of work, and participating in four winning proposals under Phase 1 of the Department of Energy’s Genesis Mission
- Advanced international deployments, with Helios assembly underway in Singapore ahead of spring 2027 commissioning and a Reimei system upgrade at RIKEN in Japan scheduled for completion this month.
Product Technology & Supply Chain:
- Validated the Company’s leading path to universal, fully fault-tolerant quantum computing by 2029 with back-to-back accuracy world records on Helios using two codes within the same scalable, end-to-end logical architecture. Reached 99.9995% logical fidelity in October—within Apollo’s target range—with an error rate ten times lower than September’s record and 100 times lower than the best published result across other hardware modalities. Results also demonstrate Quantinuum’s significant overhead and scalability advantage.
- Sol remains on track for 2H 2027, with full-scale control-system validation complete and integration and assembly targeted for Q1 2027, ahead of validation and tuning toward 100 logical qubits at a target logical error rate of 10⁻⁵.
- Apollo remains on track for 2029, supported by design milestones, including validating that our cryogenic system can be deployed at the required scale.
- Strengthened the manufacturing foundation for future systems through partnerships with GlobalFoundries, Infineon, Honeywell Aerospace and Monarch Quantum, and finalized the CHIPS R&D award as the only trapped-ion company selected.
Software:
- Announced a multi-generational Nexus roadmap through Apollo, aligning application development and hybrid deployment with successive hardware generations to build what the Company believes will be the first developer platform designed for the fault-tolerant era.
- Expanded fault-tolerant capabilities through a September Nexus release that extends Guppy tools for logical-qubit programming and supported error-correction encoding, reducing the need to rewrite applications for specific codes. Planned December release will expand responsive hybrid quantum-classical workflows, supported error-correction codes, and execution analytics for application optimization.
- Accelerated Nexus adoption and usage, with adoption growing nearly 20% quarter-over-quarter to 215 organizations; total job submissions increased tenfold in the 12 months through August 2026 compared with the preceding 12-month period.
Ecosystem:
- Introduced QUOPS with Sandia National Laboratories and NVIDIA, benchmarking useful computational scale and speed. Quantinuum is building industry-wide alignment toward a common standard that supports customer comparisons and purchasing decisions.
- Expanded the quantum user ecosystem, growing Q-Net to more than 800 members, adding eight startup partners and partnering with Singapore’s National Quantum Office to organize a global quantum challenge that attracted more than 200 submissions.
Financial Outlook
- Raising full-year 2026 revenue outlook to $31 to $34 million, up from $28 to $32 million previously.
Third Quarter 2026 Conference Call
Quantinuum will host a conference call at 5 PM Eastern time on Thursday, November 5, 2026, to discuss its results for the third quarter ended September 30, 2026, and provide a business update. The call will be available live via webcast here.
An archive replay of the webcast will be made available on the Quantinuum Investor Relations website following the call and will remain available for one year.
Non-GAAP Financial Measures
To supplement Quantinuum’s condensed consolidated financial statements presented in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company uses the following non-GAAP financial measures presented in this release: Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Net Loss, fully distributed, Adjusted EBITDA, and Adjusted Net Loss Per Share, fully distributed.
Adjusted Gross Profit starts with GAAP gross profit and adds back equity compensation and related employer taxes attributable to cost of revenue and depreciation and amortization attributable to cost of revenue.
Adjusted Gross Margin is calculated as Adjusted Gross Profit divided by revenue, net.
Adjusted Net Loss, fully distributed starts with GAAP net loss on an as-converted basis, adjusts for equity compensation and related employer taxes, costs of the initial public offering and the transition to public company reporting, severance expense, the change in fair value of liability-classified warrants, and loss on disposal and write down of assets, and then applies an assumed statutory tax rate to the resulting adjusted pre-tax loss. No tax benefit is recognized in respect of losses subject to a full valuation allowance, and accordingly no tax benefit is reflected in the periods presented.
Adjusted EBITDA starts with Adjusted Net Loss, fully distributed, and further excludes income tax expense, interest income, net, depreciation, and amortization of acquired intangibles.
Adjusted Net Loss Per Share, fully distributed is calculated as Adjusted Net Loss, fully distributed, divided by adjusted shares, fully distributed, basic and diluted, comprising weighted-average Class A common shares outstanding and Common Units of Quantinuum Holdings.
Management believes these measures provide investors with additional information useful in evaluating the Company’s operating performance and trends across periods. Quantinuum’s results include large non-cash charges that management does not consider indicative of ongoing operating performance, principally stock-based compensation recognized on completion of the Reorganization and remeasurement of liability-classified warrants. Both are driven by accounting triggers and external inputs rather than operating activity. As an early commercial-stage business, Quantinuum’s period-to-period results also are affected by the timing of individual contracts. Measures that isolate underlying operating performance from non-cash and transition items help investors assess trends across periods.
Quantinuum’s Up-C structure means that GAAP net loss attributable to Quantinuum Inc. reflects only the Class A share of the economics. Presenting adjusted results on an as-converted, fully distributed basis describes the whole economic enterprise, which is how management assesses performance and how the business is managed. Management uses these measures for internal planning and forecasting, evaluating operating performance, and preparing budgets.
These non-GAAP financial measures are supplemental and are not prepared in accordance with GAAP. They are not intended to be considered in isolation or as a substitute for the most directly comparable financial information prepared in accordance with GAAP. Quantinuum’s non-GAAP measures may differ from similarly titled measures used by other companies and, therefore, may not be comparable. Investors should review the reconciliations and should not rely on any single financial measure to evaluate the Company’s business.
Each non-GAAP financial measure is reconciled to its most directly comparable GAAP financial measure in the tables at the end of this release.
About Quantinuum
Quantinuum is a leading quantum computing company offering a full-stack platform designed to make quantum computing deployable in real-world environments. The company has commercially deployed multiple generations of trapped-ion based quantum systems built on the well-established QCCD architecture, which it has implemented with novel designs and capabilities to achieve the industry’s highest accuracy levels based on average two-qubit gate fidelity. Quantinuum has active engagements with market leaders across pharmaceuticals, material science, financial services, and government and industrial markets, as well as academic and research institutions globally.
The company has a global workforce of approximately over 850 employees, including top scientists and researchers. Over 70% of its technology team holds PhDs or Master’s degrees. Quantinuum’s headquarters is in Broomfield, Colorado, with additional facilities across the United States, United Kingdom, Germany, Japan, Qatar, and Singapore.
Availability of Information on Quantinuum’s Website
Investors and others should note that Quantinuum routinely announces material information to investors and the marketplace using SEC filings, press releases, public conference calls, webcasts, and the Quantinuum Investor Relations website. While not all of the information that the Company posts to the Quantinuum Investor Relations website is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media, and others interested in Quantinuum to review the information that it shares on ir.quantinuum.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of Quantinuum’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those described in the forward-looking statements. Any statements made in this press release that are not statements of historical fact, including statements about our beliefs, expectations and outlook are forward-looking statements. Forward-looking statements include information concerning possible or assumed future results of operations, including our guidance and descriptions of our business plans and strategies. These statements often include words such as “anticipate,” “expect,” “guidance,” “suggest,” “plan,” “believe,” “intend,” “estimate,” “target,” “project,” “should,” “could,” “would,” “may,” “will,” “forecast,” “outlook,” “potential,” “continues,” “seeks,” “predicts,” or the negatives of these words and other similar expressions.
Factors that could cause actual results to differ materially from those described in forward-looking statements include, but are not limited to: our ability to develop, commercialize and achieve market acceptance of our quantum computing hardware and software products; the pace of development of the quantum computing industry and the timing of commercial quantum advantage; our ability to attract and retain customers for our quantum computing systems and quantum computing as a service offerings; the risk of technological obsolescence or the emergence of competing quantum computing approaches, including superconducting, photonic, or other modalities; our dependence on key suppliers and manufacturers of specialized components, including those necessary for our trapped-ion quantum systems; our ability to scale production of our quantum computers and related systems; our ability to protect our intellectual property and proprietary technology; the significant research and development costs inherent in developing next-generation quantum computing capabilities; our ability to attract and retain highly skilled scientists, engineers and other personnel in a competitive labor market; changes in government funding, export controls, or regulations affecting quantum technologies; uncertainty regarding the timing and extent of commercial applications; cybersecurity risks and the protection of sensitive customer data; and macroeconomic conditions, geopolitical instability and their potential effects on our business and operations. For additional information on these and other risks that could affect the Company's forward-looking statements, see the Company's risk factors discussed in its filings with the U.S. Securities and Exchange Commission, including its most recent Quarterly Report on Form 10-Q, as such risk factors may be updated from time to time. You should evaluate all forward-looking statements made in this press release in the context of these risks and uncertainties. The Company disclaims any intent or obligation to update, revise or withdraw any forward-looking statement in this press release, except as required by applicable law or regulation.
Contacts
Investor & Media Contact
Shub Mukherjee - Investor Contact - investors@quantinuum.com
Aaron Sorenson - Media Contact - press@quantinuum.com
