Financial Data and Key Metrics Changes - The group revenue grew 8.1% year-over-year to RMB 7 billion in Q3 2025, surpassing previous guidance [19][64] - Adjusted EBITDA rose by 18.9% year-over-year to RMB 2.5 billion, with a margin improvement of 3.3 percentage points to 36.1% [19][64] - The monetized and franchised business revenue increased by 27.2% year-over-year to RMB 3.3 billion, with gross operating profit rising by 28.6% to RMB 2.2 billion [12][20] Business Line Data and Key Metrics Changes - The number of rooms in operation increased by 17.3% year-over-year, contributing to a group hotel GMV growth of 17.5% to RMB 30.6 billion [11][53] - Membership base exceeded 300 million, up 17.3% year-over-year, with room nights sold to members rising 19.7% [11][53] - The upper-midscale segment saw a 25.3% year-over-year increase in the number of hotels in operation and pipeline, exceeding 1,600 [14][58] Market Data and Key Metrics Changes - Domestic travel demand continues to grow steadily, particularly during the National Day and Mid-Autumn Festivals [8][49] - Supply growth has stabilized, with year-over-year growth rates moderating [8][50] - The demand for leisure travel is shifting from discretionary to necessity, driven by improved infrastructure and changing consumer preferences [6][46] Company Strategy and Development Direction - The company aims to deepen its roots in the China market, focusing on high-quality growth and service excellence [7][47] - Strategic focus remains on the economy and midscale segments to serve the mass market, with plans to achieve 20,000 hotels in 2,000 cities [13][56] - The launch of the new upper-midscale brand, Ji Icons, aims to meet growing consumer demand for quality living and unique experiences [14][58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of China's hotel industry, citing a shortage of high-quality supply [4][47] - The company anticipates a flattish to slightly positive RevPAR for Q4 2025, with uncertainties in business demand but strong leisure demand [25][72] - Future growth will focus on enhancing membership benefits and exploring cross-industry partnerships to strengthen member engagement [17][61] Other Important Information - The company generated RMB 1.7 billion in operating cash flow, with RMB 13.3 billion in cash and cash equivalents at the end of the quarter [20][66] - Guidance for Q4 2025 expects group revenue growth of 2%-6% and monetized and franchised revenue growth of 17%-21% [21][67] Q&A Session Summary Question: What is the implied RevPAR assumption for Q4 2025? - Management indicated that RevPAR is stabilizing, driven by leisure travel demand, with a flattish to slightly positive outlook for Q4 [69][72] Question: What are the reasons behind the recent ADR performance? - The increase in ADR is attributed to enhanced revenue management, product upgrades, and service excellence, leading to improved pricing power [75][76] Question: What are the plans for the newly launched Ji Icons brand? - The Ji Icons brand aims to penetrate the upper midscale segment, with plans for store openings and a focus on cultural preferences [31][78] Question: What is the outlook on cost control and margins? - Management highlighted ongoing efforts in cost control and margin improvement through supply chain optimization and strategic investments [35][38]

Financial Data and Key Metrics Changes - Total revenues reached RMB 3.36 billion, representing a year-over-year increase of 10.8% [9][21] - Transaction service revenues grew 39.0% year-over-year to RMB 1.46 billion, accounting for 43% of total revenues [9][19] - Non-GAAP adjusted operating income was RMB 849.1 million, while non-GAAP adjusted net income was RMB 988.1 million [21][22] Business Line Data and Key Metrics Changes - Total fulfilled orders reached 63.4 million, a year-over-year increase of 22.3% [4][12] - Average monthly active shippers increased to 3.35 million, up 17.6% year-over-year [6][14] - Fulfilled orders contributed by direct shippers increased to 54% [6][13] - Active truckers fulfilling orders over the past 12 months reached 4.48 million, marking a historical high [7][14] Market Data and Key Metrics Changes - The overall fulfillment rate reached 40.6%, increasing by more than 6 percentage points from the prior year [12][13] - The monetized order penetration rate reached 88.6%, up nearly 6 percentage points from the prior year [15] Company Strategy and Development Direction - The company aims to penetrate the road freight market and cultivate a resilient ecosystem for shippers and truckers through continuous technological innovation [10][16] - Focus on enhancing user protection mechanisms and optimizing the user structure to drive growth [4][6] - The acquisition of Giga AI is expected to bolster AI capabilities and technological foundation [8] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining order growth momentum despite macro uncertainties [29] - The company plans to continue optimizing its user ecosystem and enhancing user trust and operational efficiency [49] Other Important Information - The company had cash and cash equivalents totaling RMB 31.1 billion as of September 30, 2025, compared to RMB 29.2 billion as of December 31, 2024 [22] Q&A Session Summary Question: What were the main growth drivers for fulfilled orders? - Management identified solid user acquisition, higher engagement from existing users, and the growth of new business segments as key drivers [25][26][28] Question: What are the major drivers behind the growth in monthly active shippers? - Growth was supported by efficient multi-channel user acquisition and strong word-of-mouth referrals [32][34][36] Question: Can you provide an update on trucker membership developments? - Active trucker members reached almost 1 million, with membership programs enhancing fulfillment efficiency [40][41] Question: How has the company aligned with current policy objectives? - The company focuses on enhancing ecosystem integrity and user protection while promoting healthy competition [45][46][48] Question: What is the latest progress of the freight brokerage business? - The business performed better than expected, with user retention rates remaining stable among small and medium-sized shippers [51][53] Question: What were the main growth drivers for freight listing revenue? - Growth was driven by an increase in paying users and optimization of the membership structure [57][58][60]

Financial Data and Key Metrics Changes - Total revenues reached RMB 3.36 billion, representing a year-over-year increase of 10.8% [9][17] - Transaction Service revenues grew 39% year-over-year to RMB 1.46 billion, accounting for 43% of total revenues [9][19] - Non-GAAP adjusted operating income was RMB 849.1 million, while non-GAAP adjusted net income was RMB 988.1 million [21][22] Business Line Data and Key Metrics Changes - Total fulfilled orders reached 63.4 million, a year-over-year increase of 22.3% [4][12] - Average monthly active shippers increased to 3.35 million, up 17.6% year-over-year [6][14] - Fulfillment rate improved to 40.6%, an increase of approximately 6 percentage points year-over-year [7][13] Market Data and Key Metrics Changes - The number of active truckers fulfilling orders over the past 12 months reached 4.48 million, marking a historical high [7][14] - The monetized order penetration rate reached 88.6%, up nearly 6 percentage points from the prior year [15][19] Company Strategy and Development Direction - The company aims to penetrate the road freight market and cultivate a resilient ecosystem for shippers and truckers [10] - Focus on continuous technological innovation to drive digital and intelligent transformation in logistics [10][16] - Emphasis on enhancing user protection mechanisms and optimizing the user structure for better engagement [6][7] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining order volume growth despite macro uncertainties [28][29] - The company plans to continue optimizing its user ecosystem and enhancing service quality to support long-term growth [46][49] Other Important Information - The company completed the acquisition of Giga.AI, enhancing its AI capabilities and technological foundation [8][10] - Cash and cash equivalents totaled RMB 31.1 billion as of September 30, 2025, compared to RMB 29.2 billion at the end of 2024 [22] Q&A Session Summary Question: What were the main growth drivers for fulfilled orders? - Management identified solid user acquisition, higher engagement from existing users, and growth from new business lines as key drivers [25][26][28] Question: What are the major drivers behind the growth in monthly active shippers? - Growth was supported by efficient multi-channel user acquisition and strong word-of-mouth referrals [32][34][36] Question: Can you provide an update on trucker membership developments? - Active trucker members reached nearly 1 million, with a focus on enhancing membership benefits and fulfillment efficiency [40][41][42] Question: How has the company aligned with current policy objectives? - The company is enhancing ecosystem integrity and user protection while promoting healthy competition on its platform [45][46][48] Question: What is the latest progress of the Freight Brokerage business? - The business performed better than expected, with user retention rates remaining stable among small and medium-sized shippers [51][53][54] Question: What were the main growth drivers for the Freight Listing Service? - Growth was primarily driven by an increase in paying users and the optimization of the membership structure [57][58][60]

Financial Data and Key Metrics Changes - The group revenue grew 8.1% year-over-year to RMB 7 billion in Q3 2025, surpassing previous guidance [42] - Adjusted EBITDA rose by 18.9% year-over-year to RMB 2.5 billion, with a margin improvement of 3.3 percentage points to 36.1% [42][43] - Operating cash flow generated in Q3 was RMB 1.7 billion, with cash and cash equivalents at RMB 13.3 billion [43] Business Line Data and Key Metrics Changes - The monetized and franchised business revenue increased by 27.2% year-over-year to RMB 3.3 billion, contributing over 70% of the group's total gross operating profit [37][43] - The number of rooms in operation grew by 17.3% year-over-year, with group hotel GMV rising 17.5% to RMB 30.6 billion [36] - Membership base exceeded 300 million, up 17.3% year-over-year, with room nights sold to members increasing by 19.7% [36][41] Market Data and Key Metrics Changes - Domestic travel demand continues to grow steadily, particularly during the National Day and Mid-Autumn Festivals [35] - Supply growth has stabilized, with year-over-year growth rates moderating [35] Company Strategy and Development Direction - The company aims to deepen its roots in the China market, focusing on high-quality growth and service excellence [34] - Strategic focus remains on the economy and midscale segments to serve the mass market, with plans to achieve 20,000 hotels in 2,000 cities [38][39] - The launch of the new upper-midscale brand, Ji Icons, aims to meet growing consumer demand for quality living and unique experiences [39][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of China's hotel industry, driven by a shift in consumer demand from discretionary to necessity [34][35] - The outlook for Q4 2025 anticipates revenue growth of 2%-6%, with monetized and franchised revenue expected to grow by 17%-21% [44] Other Important Information - The company has made significant improvements in revenue management and pricing strategies, contributing to better performance metrics [48] - The membership program is a core strategy for sustainable growth, with plans to enhance member benefits and engagement [41] Q&A Session Summary Question: What is the implied RevPAR assumption for the fourth quarter guidance? - Management indicated that RevPAR is stabilizing, driven by leisure travel demand, with expectations for flattish to slightly positive RevPAR in Q4 [46][48] Question: What are the reasons behind the recent ADR performance? - The increase in ADR is attributed to enhanced revenue management, product upgrades, and service excellence, leading to improved pricing power [50] Question: What are the plans for the newly launched Ji Icons brand? - The Ji Icons brand aims to become a core player in the upper-midscale segment, with further details to be shared after the first hotels open [27] Question: What is the outlook on cost control and margins? - Management highlighted ongoing efforts in cost control and margin improvement through supply chain optimization and strategic investments [27]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was RMB 387 million, up 305% year-over-year and approximately 8% above the high end of guidance [3][17] - Net loss attributable to So-Young increased to RMB 64.3 million compared to a net income of RMB 20.3 million in the same period last year [21] - Non-GAAP net loss was RMB 61.6 million compared to a non-GAAP net income of RMB 22.2 million during the same period of 2024 [21] Business Line Data and Key Metrics Changes - Revenue from the aesthetic center business reached RMB 184 million, up 305% year-over-year and 26% quarter-to-quarter [3][5] - Information and reservation services revenues were RMB 117.2 million, down 34.5% year-over-year [17] - Revenues from sales of medical products and maintenance services were RMB 67 million, down 25% year-over-year [17] Market Data and Key Metrics Changes - Total number of active users of So-Young Clinic exceeded 130,000, with verified treatment visits surpassing 89,800, up 33% quarter-to-quarter and 280% year-over-year [6][8] - The proportion of new customers acquired via referrals rose to 46% [7] - Customer satisfaction score remained high at 4.99 out of 5 [8] Company Strategy and Development Direction - The company aims to reach 1,000 centers in the long term, focusing on disciplined expansion in core cities and commercial hubs [15][22] - The strategy includes enhancing standardized and digital management to improve service delivery and user experience [15] - The company is shifting from marketing-driven to trust-driven operations, emphasizing transparency and compliance [12] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in stabilizing revenues from non-aesthetic center businesses in Q4 [3] - The outlook for Q4 2025 expects aesthetic treatment services revenues to be between RMB 216 million and RMB 226 million, representing a 165.8%-178.1% increase from the same period in 2024 [22] - The company plans to continue optimizing customer acquisition costs and enhancing profitability as the operating model matures [50][52] Other Important Information - The company upgraded its quality control framework, implementing a six-tier compliance system to ensure service quality [10][44] - The launch of Miracle PLLA 3.0 was successful, with over 1,300 orders completed within two days [9][36] - The company completed 55 center inspections and emergency drills in Q3 [10] Q&A Session Summary Question: Plans for next year's clinic openings - Management plans to open no less than 35 new centers next year, focusing on first-tier cities and gradually expanding into second-tier cities [26][27] Question: Membership system operations - The membership system is tiered, with core members contributing significantly to revenue and having a high repurchase rate [30][31] Question: Miracle PLLA 3.0 performance - Miracle PLLA 3.0 has received high attention, with a successful launch and strong market feedback [36][37] Question: Ensuring safety and compliance - The company has established a six-pillar compliance framework and conducts regular inspections to maintain high service standards [43][44] Question: Improving profitability of the aesthetic center business - Management believes profitability will improve as the user base expands and operational efficiencies are realized [50][52]

Financial Data and Key Metrics Changes - Total revenues reached RMB 3.36 billion, a year-over-year increase of 10.8% [9][20] - Transaction service revenues grew 39.0% year-over-year to RMB 1.46 billion, accounting for 43% of total revenues [9][18] - Non-GAAP adjusted operating income was RMB 849.1 million, while non-GAAP adjusted net income was RMB 988.1 million [20][21] Business Line Data and Key Metrics Changes - Total fulfilled orders reached 63.4 million, a year-over-year increase of 22.3% [4][11] - Average monthly active shippers increased to 3.35 million, up 17.6% year-over-year [5][13] - Fulfillment rate improved to 40.6%, an increase of approximately 6 percentage points year-over-year [7][12] Market Data and Key Metrics Changes - The number of active truckers fulfilling orders over the past 12 months reached 4.48 million, marking a historical high [7][14] - The monetized order penetration rate reached 88.6%, up nearly 6 percentage points from the prior year [15] Company Strategy and Development Direction - The company aims to penetrate the road freight market and cultivate a resilient ecosystem for shippers and truckers through continuous technological innovation [10][16] - Focus on enhancing user protection mechanisms and optimizing the user structure to drive engagement and fulfillment [5][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining order growth momentum despite macro uncertainties, emphasizing the importance of digitalization and user engagement [26][27] - The company plans to continue optimizing its user ecosystem and enhancing service quality to support long-term growth [30][36] Other Important Information - The company completed the acquisition of Giga AI, enhancing its AI capabilities and technological foundation [8] - Cash and cash equivalents totaled RMB 31.1 billion as of September 30, 2025, compared to RMB 29.2 billion at the end of 2024 [21] Q&A Session Summary Question: What were the main growth drivers for fulfilled orders? - Management identified solid user acquisition, higher engagement from existing users, and the growth of new business lines as key drivers [23][24][25] Question: What are the major drivers behind the growth in monthly active shippers? - Growth was supported by efficient multi-channel user acquisition and strong word-of-mouth referrals [28][29] Question: Can you provide an update on trucker membership developments? - Active trucker members reached almost 1 million, with a focus on cost reduction, fulfillment enhancement, and risk protection [31][32] Question: How has the company aligned with current policy objectives? - The company is enhancing ecosystem integrity and focusing on fair pricing and healthy competition to promote sustainable growth [33][34] Question: What is the latest progress of the freight brokerage business? - The business performed better than expected, with user retention rates remaining stable among small and medium-sized shippers [37][38] Question: What were the main growth drivers for freight listing revenue? - Growth was driven by an increase in paying users and the optimization of the membership structure [39][40]

Financial Data and Key Metrics Changes - Total revenue for the first nine months of 2025 was approximately $2.8 million, a decrease of about $1 million or 27% compared to $3.8 million in the same period in 2024, reflecting a strategic shift away from legacy contract work [18] - Cost of revenue rose to approximately $2.8 million, a 48% increase from $1.9 million during the first nine months of 2024 [18] - Gross loss for the period was approximately $4 million, compared to a loss of about $719,000 in the same period last year [19] - Selling general and administrative expenses totaled $13 million, compared to $9.9 million in the prior year, reflecting key growth initiatives [20] - Net loss for Q3 2025 was $6 million compared to $3.9 million in the same period of the prior year [24] Business Line Data and Key Metrics Changes - The company is transitioning from legacy high-margin contracts to higher-value commercial space-based and AI-driven solutions, which is expected to generate more sustainable recurring revenue in future periods [18] - The gross loss increase was primarily due to higher depreciation from recently capitalized assets and reduced contributions from legacy services [23] Market Data and Key Metrics Changes - The company is seeing strong momentum internationally, especially among allies seeking sovereign U.S. origin multi-domain capabilities [31] - Greater budget clarity within the U.S. is helping stabilize and improve program timelines, which is viewed as an upside [31] Company Strategy and Development Direction - The company is evolving into a diversified space and defense innovator, focusing on full-spectrum solutions from design and manufacturing to on-orbit operations and data services [5] - The vertically integrated model enables scalability and efficiency, allowing rapid entry into new markets and development of recurring revenue streams [10] - The company is strategically investing in infrastructure, technology, and team to build capabilities comparable to larger competitors with less capital [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and adaptability regardless of external landscape challenges, including government funding uncertainties [7] - The company is positioned to meet rising global demand for resilient, secure, and cost-effective space capabilities [11] - The recent capital raises are intended to fund product commercialization, LISIS-AT scaling, and AI development [32] Other Important Information - The company completed two successful capital raises, receiving approximately $15.5 million of net proceeds [24] - The LISIS-AT platform is increasingly software-defined, enabling rapid in-orbit reconfiguration and performance optimization [11] Q&A Session Summary Question: What is the commercialization timeline for Fortis VPX? - The first three VPX products remain on track for release to production in January of 2026, with customer integrations and revenue contributions expected shortly thereafter [29] Question: Can you update on the commissioning timeline for LISIS-AT 3? - The commissioning is progressing well, with multiple payloads and sensors, and additional satellites in production will expand hosted payload capability and data availability [30] Question: Are customers already evaluating Fortis VPX or FeatherEdge? - Active early access programs are in place with both government and commercial customers, with several transitioning toward multi-year hardware agreements [31] Question: What does your geographic revenue mix look like going forward? - Strong momentum is seen internationally, especially among allies, with greater budget clarity in the U.S. improving program timelines [31] Question: How does the recent capital raise position the company? - The capital raise funds a significant portion of near-term product commercialization, LISIS-AT scaling, and AI development [32] Question: Can you expand on alignment with the DOD's Golden Dome vision? - The company's technology roadmap aligns directly with the DOD's Golden Dome vision, focusing on resilient, distributed, multi-layered sensing and communications architecture [32] Question: What is the potential market for your lunar-capable LISIS-AT Lunar platform? - The company believes its early mover position creates a strategic opportunity in the expanding lunar exploration and infrastructure programs [33]

Financial Data and Key Metrics Changes - The company reported revenues of $303,000 for the quarter, representing a 51% increase compared to the same quarter last year [8] - For the first half of the fiscal year, revenues increased by 85% to over $600,000, marking the best first half ever for the company [5][8] - Gross profit totaled $220,000, or 72.6% of revenues, which was a 23% increase from $180,000, or 89.5% of revenues in the same quarter a year ago [9] - Net loss totaled $3 million, or $0.11 per share, compared to a net loss of $2.2 million in the same quarter last year [10] - Available cash increased to $768,000 from $220,000 at the end of the previous fiscal year [11] Business Line Data and Key Metrics Changes - The U.S. distributor network increased sales by 35% year-over-year, contributing $237,000, or 75% of total revenues for the quarter [4][8] - The new product, Precise PRP, generated increased revenue during the quarter, with 42% of revenue attributed to PRP and 58% to Spring [34] Market Data and Key Metrics Changes - The veterinary healthcare market in Mexico is projected to grow at a CAGR of 11%, reaching approximately $2.4 billion in six years [3] - The European animal market is estimated at over $16.56 billion and is projected to grow at a CAGR of 8.6% [3] - The U.K. market exceeds $2.6 billion and is growing at a 7.8% CAGR [4] Company Strategy and Development Direction - The company aims to expand the use of its flagship product, Spring, and increase awareness of Precise PRP for treating osteoarthritis in animals [13] - The company is exploring the introduction of products to human markets and has formed partnerships to enhance its market presence [7][18] - A strategic collaboration with Digital Landia aims to integrate AI technology into the company's platform, enhancing diagnostic capabilities [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong sales momentum and market penetration for the remainder of fiscal 2026 [27] - The company anticipates another year of record growth and improving bottom line as it expands the use of Spring and Precise PRP [27] - The third and fourth quarters are expected to be particularly strong due to increased industry events driving product awareness [28] Other Important Information - The company qualified to begin trading on the OTCQX best market, enhancing visibility and liquidity for investors [12] - The appointment of Josh Rubin to the board of directors is expected to provide valuable insights into growth-stage companies [6] Q&A Session Summary Question: How many clinics are heavy users of the product? - The learning curve for veterinarians to adopt the product ranges from six months to a year, with anecdotal evidence showing continued growth in adoption [32] Question: Can you break down the revenue between Spring and PRP? - Approximately 42% of revenue was from PRP and 58% from Spring, with the PRP revenue only reflecting the canine version as equine shipments just began [34][35] Question: Do you have any corporate clinics that have adopted your product corporate-wide? - No corporate-wide adoption has occurred yet, as each corporate clinic allows veterinarians to make their own decisions [37] Question: Can you provide a breakdown between companion versus equine revenue? - The company tracks these markets separately and plans to provide more detailed segment reporting in the future [39]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 totaled approximately $384,000, a significant increase from $101,000 in the same period last year, primarily due to growth in research and development services contracts and custom hardware contracts [13] - Gross margin improved to 33% compared to 9% in Q3 2024, although variability is expected due to a small number of active contracts [14] - Net income for Q3 2025 was $2.4 million, or approximately $0.01 per share, compared to a net loss of $5.7 million in Q3 2024 [16] - Total assets increased to $898 million as of September 30, 2025, up from $154 million at year-end 2024 [17] Business Line Data and Key Metrics Changes - The company recorded revenue from the NASA LIDAR initiative and completed a transaction with a major U.S. financial institution, validating its quantum AI and security platforms [7] - Revenue recognition began for cloud-based access to the Direct3 quantum optimization system during Q3 [14] Market Data and Key Metrics Changes - The company is seeing growing adoption of quantum and photonic solutions across research, enterprise, and government sectors, indicating a positive trend in market demand [7] - The integrated photonics platform is positioned to address global energy constraints and computational demands, making it relevant for various sectors [11] Company Strategy and Development Direction - The company aims to transition from prototype and small-batch manufacturing to volume production by the end of the decade, focusing on refining processes and expanding facilities [5][12] - The long-term strategy includes evaluating acquisition opportunities to accelerate the vision of making quantum technology accessible [15] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of scaling engineering and manufacturing capabilities and strengthening relationships across government, industry, and academia [19] - The company is positioned to deliver energy-efficient room-temperature quantum devices, which are critical for the next generation of computing [11] Other Important Information - The company raised $500 million in Q3 and an additional $750 million post-quarter, significantly strengthening its balance sheet [3][15] - Operating expenses increased to $10.5 million in Q3 2025, reflecting growth in personnel across various departments [16] Q&A Session Summary Question: Details on Poet Technologies partnership - Management discussed active talks with multiple parties on using thin-film lithium niobate technology for high-speed transceiver technology, highlighting the collaboration with Poet Technologies [22] Question: Use cases for quantum security solutions - Management mentioned discussions with firms to apply quantum communication technology to aerospace platforms and the potential for smaller quantum communication systems [23][24] Question: M&A opportunities and market conditions - Management acknowledged the volatile M&A market and is actively evaluating acquisition candidates to enhance customer revenue and technology roadmap [26][27] Question: CapEx for Fab 1 and plans for Fab 2 - Fab 1 is fully operational with an additional CapEx of about $2 million planned for high-speed testing equipment, while Fab 2 is being scoped for both internal needs and external demand [35][36] Question: International opportunities - Management confirmed active discussions for international partnerships and sales, including projects in Europe and South Korea [57]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 totaled approximately $384,000, a significant increase from $101,000 in the same period last year, primarily due to growth in research and development services contracts and custom hardware contracts [13] - Gross margin improved to 33% in Q3 2025, compared to 9% in Q3 2024, although variability is expected due to a small number of active contracts [14] - Net income for Q3 2025 was $2.4 million, or approximately $0.01 per share, compared to a net loss of $5.7 million in Q3 2024 [16] - Total assets increased to $898 million as of September 30, 2025, up from $154 million at year-end 2024 [17] Business Line Data and Key Metrics Changes - The company recorded revenue from its NASA LiDAR initiative, showcasing the practical application of its quantum technology [7] - Revenue recognition began for cloud-based access to the Dirac-3 quantum optimization system during Q3 [14] - Significant commercial engagements included a transaction with a major U.S. financial institution, validating the company's quantum AI and security platforms [7] Market Data and Key Metrics Changes - The company is actively engaging with various sectors, including aerospace, defense, telecommunications, finance, and data security, to expand the adoption of its quantum solutions [4] - The integrated photonics approach allows for room temperature operation, making the technology more accessible and scalable across industries [4][11] Company Strategy and Development Direction - The long-term goal is to transition from prototype and small-batch manufacturing to volume production by the end of the decade [5] - The current three-year roadmap focuses on refining processes, scaling production, and expanding the team and facilities to support industrial-scale output [5][12] - The company aims to leverage its thin-film lithium niobate technology for next-generation high-speed transceiver technology, indicating a strategic focus on telecommunications [22] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of scaling engineering and manufacturing capabilities to meet growing demand and drive future growth [19] - The company is positioned to deliver energy-efficient room-temperature quantum devices, which are critical for the next generation of computing [11] - Management expressed confidence in the company's ability to navigate the evolving landscape of quantum technology and maintain a competitive edge [19] Other Important Information - The company raised $500 million in Q3 2025 and an additional $750 million post-quarter, significantly strengthening its balance sheet [3][15] - Operating expenses increased to $10.5 million in Q3 2025, reflecting growth in personnel across various functions to support expansion [16] Q&A Session Summary Question: Details on partnership with POET Technologies - Management confirmed active discussions with multiple parties regarding the use of thin-film lithium niobate technology for high-speed transceiver applications, highlighting the collaboration with POET as a significant opportunity [21][22] Question: Use cases for quantum security solutions - Management discussed ongoing discussions with firms to apply quantum communication technology in various sectors, including aerospace, indicating a broad interest beyond security solutions [23][24] Question: M&A opportunities and market conditions - Management acknowledged the volatility in the M&A market but confirmed active evaluation of acquisition candidates to accelerate commercialization and fill technology gaps [25][26] Question: CapEx for Fab 1 and plans for Fab 2 - Management indicated that Fab 1 is fully operational with plans for additional CapEx of about $2 million for high-speed testing equipment, while Fab 2 is being scoped for both internal needs and external demand [34][36] Question: International opportunities - Management confirmed ongoing efforts to explore international markets, including sales to institutions in Europe and partnerships in South Korea [58]