Financial Data and Key Metrics Changes - For Q3 2025, the company reported a GAAP net loss of $346.8 million, or $0.84 per basic and diluted share, reflecting early-stage corporate expenses and non-cash items [16][17] - General and administrative expenses totaled $37.8 million, including $24.8 million in share-based compensation [16] - The company ended the quarter with $183 million in cash and cash equivalents, including $99.3 million of restricted cash [18] Business Line Data and Key Metrics Changes - The company remains pre-revenue while advancing Project Matador, expecting to begin generating revenue in 2026 [16] - The first gigawatt of gross capacity is projected to generate approximately $1.5 billion in annualized revenue and about $1 billion in net operating income [14] Market Data and Key Metrics Changes - The company has secured or placed under letter of intent approximately 2.2 gigawatts of gas-fired generation, including nine industrial turbines [12] - The demand for power is expected to increase, with the company actively discussing additional tenants for future capacity [27][56] Company Strategy and Development Direction - The company aims to build a hypergrid campus integrating nuclear, natural gas, solar, and storage to serve high-density AI compute loads [12] - The strategy includes long-term triple-net leases with investment-grade tenants, providing a stable revenue model [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the execution of Project Matador, highlighting strong partnerships and operational milestones achieved [10][11] - The company views the current geopolitical landscape, particularly the competition in AI and energy, as a significant driver for its business model [6][7] Other Important Information - The company completed its IPO, raising approximately $785 million in gross proceeds, which will fund the initial phase of Project Matador [19][20] - The company has a strong focus on supply chain management and labor availability in the Panhandle region, which is crucial for project execution [39][40] Q&A Session Summary Question: Clarification on the $150 million advance agreement - Management indicated that the $150 million advance is a sign of good faith and commitment from the first tenant, reflecting their seriousness in the negotiations [24][25][26] Question: Timeline for tenant contracts and negotiations - Management confirmed that the next step is to finalize the lease agreement with tenant one and that discussions with other potential tenants are ongoing [26][27] Question: Visibility into supply chain and labor for 2026 - Management expressed confidence in the supply chain and labor availability, emphasizing proactive measures to secure long lead-time items [33][39] Question: Impact of recent government nuclear deals - Management noted that the recent government nuclear deal supports their objectives and positions them favorably within the industry [36][38] Question: Financing for solar and battery energy storage systems (BESS) - Management clarified that the financing for BESS will be part of the overall project finance, with ongoing discussions with tenant one regarding specifications [41][42] Question: Campus expansion plans - Management confirmed that the 2,000-acre campus expansion is under contract and will be recommended to the board for approval, reflecting confidence in future capacity needs [44][45]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $341.1 million, exceeding expectations due to higher average day rates and better utilization, with a gross margin of 48%, which was 200 basis points better than guidance [7][34] - Free cash flow generated in Q3 was $83 million, bringing total free cash flow for the first nine months of 2025 to nearly $275 million [8] - The company ended Q3 with a net debt to EBITDA ratio of 0.4 times, indicating a strong leverage position [18] Business Line Data and Key Metrics Changes - Production support, comprising roughly 50% of the business, remains steady, supported by current commodity prices and the deployment of FPSO units [12] - The EPCI and offshore construction segment is seeing an increase in demand, with backlog converting into vessel demand expected to strengthen in 2026 and 2027 [13] - Average day rates for Q3 were $22,798, which was 2% lower than Q2, while active utilization increased from 76.4% to 78.5% [34] Market Data and Key Metrics Changes - The offshore vessel market is expected to see a recovery in drilling activity towards the end of 2026, with a projected increase in capital expenditures to address hydrocarbon supply deficits [11] - In Europe, day rates faced pressure, particularly in the UK, but utilization improved across the region [26] - The Middle East saw strengthening vessel demand and day rates, driven by EPCI contractors [28] Company Strategy and Development Direction - The company is focused on capital allocation, with a $500 million share repurchase authorization in place, but did not repurchase shares in the last quarter due to competing priorities [8][9] - The strategy includes potential M&A opportunities, with a willingness to add leverage if cash flows allow for quick deleveraging [10][19] - The company remains optimistic about the long-term outlook for the offshore vessel industry and aims to deploy capital effectively to drive shareholder value [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the offshore vessel market's recovery, anticipating an uptick in drilling activity in 2026 and beyond [11][25] - The company noted that macro uncertainties and supply chain bottlenecks have impacted near-term drilling activity but expects a return to stronger demand [11] - Management highlighted the importance of maintaining utilization and day rates in the face of potential softness in the drilling market [14] Other Important Information - The company successfully refinanced its debt, resulting in a charge of $27.1 million related to early extinguishment of debt [41] - Drydock costs for 2025 are projected to be $105 million, with an increase to $124 million expected for 2026 [42][44] - The company is optimistic about the potential recovery in the offshore market, particularly in regions like Africa and the Americas [29][30] Q&A Session Summary Question: Thoughts on the production support market and rig levels needed for pricing leverage - Management expects pricing leverage to return sooner due to increasing activity in FPSOs and EPCI, along with vessel attrition over the past two years [49][50] Question: Insights on capital allocation and M&A opportunities - Management acknowledged having material nonpublic information during the quarter, which influenced the decision not to repurchase shares [52] Question: Guidance for 2026 and regional exposure - Management provided guidance for 2026, indicating confidence in achieving at least the same performance as 2025, with Africa and Asia having more exposure to open capacity [58][59] Question: Impact of maintenance on utilization and revenue expectations - Management indicated that the revenue for 2026 is expected to be fairly even throughout the year, with potential upside if drilling activity strengthens [90]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $85.5 million, down 16.7% from $102.7 million in Q3 2024 [17] - Non-GAAP gross margin was 35%, slightly up from the prior year period [18] - Non-GAAP net income for Q3 2025 was $1.7 million or $0.02 per diluted share, compared to $14.1 million or $0.16 per diluted share in Q3 2024 [22] - Free cash flow generated in Q3 2025 was $3.3 million, reflecting strong cash generation [23] Business Line Data and Key Metrics Changes - North America was the strongest region, contributing $36 million in revenue, while India contributed $24.4 million [17] - Research and development expenses were $6.8 million, down from $8.6 million in Q3 2024 [18] - Sales and marketing expenses increased to $12 million from $10.4 million in Q3 2024, reflecting increased business in North America [19] Market Data and Key Metrics Changes - Visibility improved in North America and India, with renewed order flow from a major carrier in India [14][15] - The company is optimistic about growth in 2026, driven by opportunities in both CSPs and private networks segments [15] Company Strategy and Development Direction - The company is focusing on high-capacity, low-latency connectivity solutions driven by AI and data-intensive applications [8] - Ceragon's E-band and point-to-multipoint offerings are positioned to address network capacity and resiliency challenges [9] - The company is pursuing additional acquisitions to enhance its capabilities and market position [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for Q4 and 2026, citing improved visibility and a strong funnel of opportunities [28][29] - The company is encouraged by the growth in private networks and the demand for higher capacity driven by 5G and AI [31][32] - Management noted that the impact of the U.S. government shutdown has not been significant so far [51] Other Important Information - The company has been awarded contracts for private 5G and Wi-Fi technologies, showcasing its expanding capabilities [12] - The balance sheet remains solid, with cash position increasing to $43 million [22] Q&A Session Summary Question: Outlook for the fourth quarter and 2026 growth - Management is optimistic about Q4, driven by visibility from India and North America, and sees potential for growth in 2026 across all regions [28][29] Question: Drivers of tier one ramp-up in North America - The demand is driven by capacity upgrades, new coverage for mobile, and fixed wireless access [37] Question: Update on E2E and commercial activity - E2E is meeting plans, with significant opportunities expected despite delays due to strikes [39] Question: Supply chain concerns regarding component costs - There has been a slight increase in component costs, but no significant impact on overall costs is expected [40][41] Question: Defense and security business opportunities - The company sees numerous opportunities in defense and security, particularly with its 60 GHz product [56][58]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $33.3 million, a 19% increase from $27.9 million in Q3 2024, primarily driven by $5.5 million in licensing revenue [13][14] - Gross margin improved to 66.1% in Q3 2025 from 58.4% in Q3 2024, attributed to a favorable sales mix and greater scale [14] - Net income for Q3 2025 was $1.3 million, compared to a net loss of $5 million in the same period last year [16] Business Line Data and Key Metrics Changes - The biologics product family, the core business, grew 4% year-over-year, which was below long-term growth expectations [8][9] - Hardware product revenue declined by 6% or $736,000 year-over-year [13] Market Data and Key Metrics Changes - The company anticipates closing the sale of non-core assets for $19.2 million, which will enhance focus on core biologics and strengthen financial position [5][6] - The sale is expected to be neutral to slightly positive for margins and bottom line metrics in 2026 and beyond [7] Company Strategy and Development Direction - The company is focusing on self-sustainability and positive cash flows, with strategic initiatives aimed at higher margin biologics and in-house manufacturing [9] - Investments are being made in the commercial team to maximize the reach of the orthobiologics portfolio [9][10] - New product launches include CollagenX, which is designed for surgical wound closure and complements the existing product line [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving low double-digit growth in the orthobiologics business for 2026, despite not providing full guidance yet [23][24] - The company is optimistic about the impact of new products and the potential for growth in the surgical repair and wound care markets [11][40] Other Important Information - The company has $10.6 million in cash and equivalents, with $25.6 million in net accounts receivable and $40.7 million in inventory as of September 30, 2025 [17] - The anticipated proceeds from the sale of assets will not require additional external capital for operations [5][6] Q&A Session Summary Question: Plans for investment in the commercial organization - Management indicated plans to increase the number of sales representatives from four to eight by the end of the year, with further additions expected in 2026 [22] Question: Growth expectations for the orthobiologics business - Management expects low double-digit growth in orthobiologics for 2026, with ongoing efforts to optimize the product portfolio [23][24] Question: Insights on new product launches at NAS - Management highlighted three key products: a new growth factor product, an advanced DBM called Trivium, and the recently launched CollagenX [24][25] Question: Year-over-year growth in orthobiologics - The 4% growth was supported by the stem cell and amnio product lines, while older demineralized bone products faced declines [30][31] Question: Impact of amnio product pricing changes - The company is well-positioned to benefit from the new pricing structure in the amnio market due to its low production costs [36][38] Question: Plans for distributing CollagenX - Management sees significant potential for CollagenX in various surgical procedures and is excited about its market opportunities [40]

Financial Data and Key Metrics Changes - The company reported record quarterly revenue of $13.5 million for Q3 2025, a 29% increase compared to $10.5 million in the same period last year [5][15] - Gross profit for the quarter was $10.2 million, up from $7.7 million in the prior year, maintaining a gross margin of 75% [16] - Operating profit was approximately $1.3 million, a significant increase from $0.3 million reported in the same period last year [16] - Adjusted EBITDA increased to $2 million from $1.1 million in the prior year [16] - The company raised its revenue guidance for the full year 2025 to a range of $51 million-$52 million, up from the previous guidance of $50 million-$52 million [5][18] Business Line Data and Key Metrics Changes - The company shipped 90 deep TMS systems during the quarter, representing a 43% increase compared to the same period last year, bringing the total install base to over 1,600 systems globally [5][15] - Approximately 70% of recent customer engagements were structured as multi-year lease agreements, indicating a strong transition to this sales model [8] Market Data and Key Metrics Changes - Remaining performance obligations under existing customer agreements grew to $65 million, a 37% year-over-year increase, providing strong visibility into future revenues [17] - The company noted strong demand momentum in various international markets, particularly in Asia-Pacific and Europe, with expectations for significant growth in countries like Japan, China, and South Korea [36][38] Company Strategy and Development Direction - The company focuses on three key pillars for long-term growth: elevating market awareness of Deep TMS, advancing the R&D roadmap, and broadening patient access through global extension and health system integration [9] - The recent FDA approval for an accelerated treatment protocol for major depressive disorder is expected to enhance the appeal of Deep TMS to prospective patients [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing a solid book-to-bill ratio of 1.3x and high customer retention rates [8] - The company anticipates further investments in minority interests in mental health providers to enhance market awareness and expand access to Deep TMS [12][14] Other Important Information - The company ended the quarter with $70.7 million in cash and cash equivalents, reflecting strong collection efficiency despite deploying $7.3 million for minority equity investments [17] - A virtual investor and analyst day is scheduled for December 1 to discuss operational, clinical, regulatory, and financial progress in more detail [15] Q&A Session Summary Question: Can you discuss the accelerated protocol and its current treatments? - Management highlighted that the accelerated protocol shortens the acute phase from four weeks to six days, increasing treatment frequency, which is driving demand for growth [20] Question: What can be expected regarding minority equity investments? - Management indicated a robust pipeline for minority investments, aiming to sign at least one more agreement by year-end, with promising opportunities for 2026 [21] Question: Any updates on Neurolief's activities in Japan and the EU? - Management anticipates FDA clearance for Neurolief by year-end, which would enable marketing and distribution through various channels [22] Question: What are the expectations for system placements from minority partners? - Each minority investment is expected to open 10-15 new clinics annually, with early investments showing over 50% growth in utilization rates [28][29] Question: Will there be changes in metrics reporting going forward? - Management plans to provide more granularity on metrics such as system shipments and performance of minority investments during the analyst day [35] Question: What is the outlook for international growth? - Management expects strong growth in Asia-Pacific and Europe, particularly in Japan, China, and major European countries [36][38]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $33.3 million, a 19% increase from $27.9 million in Q3 2024, primarily driven by $5.5 million in licensing revenue [13][14] - Gross margin improved to 66.1% in Q3 2025 from 58.4% in Q3 2024, attributed to a favorable sales mix and greater scale [14] - Net income for Q3 2025 was $1.3 million, compared to a net loss of $5 million in the same period last year [16] Business Line Data and Key Metrics Changes - The biologics product family, the core business, grew 4% year-over-year, which was below long-term growth expectations [8][9] - Hardware product revenue declined by 6% or $736,000 year-over-year [13] Market Data and Key Metrics Changes - The company anticipates closing the sale of non-core assets for $19.2 million, which will enhance focus on core biologics and strengthen financial position [5][6] - The anticipated revenue from the sold business was approximately $23.5 million, which was modestly unprofitable on a standalone basis [7] Company Strategy and Development Direction - The company is focusing on self-sustainability and positive cash flows, with strategic initiatives aimed at higher margin biologics and in-house manufacturing [9] - Investments are being made in the commercial team to maximize the reach of the orthobiologics portfolio [9][10] - New product launches include CollagenX, which is expected to complement existing offerings and address diverse surgical needs [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving low double-digit growth in the orthobiologics business for 2026, despite not providing specific guidance yet [23][24] - The company is optimistic about the impact of new products and the potential for growth in the surgical repair and wound care markets [11][40] Other Important Information - The company has reiterated its 2025 revenue guidance of $131 million to $135 million, reflecting an 11%-15% growth over 2024 [12] - Cash balance as of September 30, 2025, was $10.6 million, with net accounts receivable at $25.6 million and inventory at $40.7 million [17] Q&A Session Summary Question: Plans for commercial organization investments - Management indicated plans to increase the number of sales representatives from four to eight by the end of the year, with further additions expected in 2026 [22] Question: Growth expectations for orthobiologics business - Management expects low double-digit growth in orthobiologics for 2026, with ongoing efforts to optimize the product portfolio [23][24] Question: Highlights for upcoming NAS event - Management highlighted new products such as a growth factor product, advanced DBM called Trivium, and CollagenX as key offerings to showcase [25] Question: Year-over-year growth in orthobiologics - Management noted a 4% growth in orthobiologics, driven by stem cell and amnio product lines, while older demineralized bone products faced challenges [30][31] Question: Impact of amnio product pricing changes - Management expressed confidence in leveraging robust hospital contracts to capitalize on new pricing structures in the amnio market [36][38] Question: Plans for CollagenX distribution - Management sees significant potential for CollagenX in various markets, leveraging existing platforms and FDA work for future growth [40]

Financial Data and Key Metrics Changes - Revenues in Q3 2025 were $1.9 million, down from $2.4 million in Q3 2024, impacted by the expiration of the National Quantum Initiative [12] - Gross margins in Q3 2025 were 21%, compared to 51% in Q3 2024, due to revenue composition and pricing variability [12][13] - Operating loss for Q3 2025 was $20.5 million, compared to $17.3 million in the prior year [14] - GAAP net loss for Q3 2025 was higher than in Q3 2024, with a non-GAAP net loss of $10.7 million, or $0.03 per share, compared to $13.4 million, or $0.07 per share, in Q3 2024 [15] - As of September 30, 2025, the company had approximately $558.9 million in cash and equivalents, with no debt [15] Business Line Data and Key Metrics Changes - The company announced purchase orders totaling approximately $5.7 million for two 9-qubit Novera quantum computing systems, which are upgradable [6][7] - A three-year, $5.8 million contract from the Air Force Research Laboratory (AFRL) was announced to advance superconducting quantum networking [8] Market Data and Key Metrics Changes - The expiration of the National Quantum Initiative and its pending reauthorization in the U.S. Congress impacted revenue [12] - The company is engaged with various academic and government sectors to enhance quantum computing capabilities [9][10] Company Strategy and Development Direction - The company plans to deliver a 150-plus qubit system by the end of 2026 and a 1,000-plus qubit system by the end of 2027, with anticipated gate fidelity improvements [5][6] - The company is focusing on public-private partnerships to advance quantum technologies [9] - The company intends to open an Italian subsidiary to pursue business opportunities in the region [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future sales driven by recent contracts and collaborations, despite current revenue challenges [12][15] - The company is optimistic about being selected for phase B of the DARPA Quantum Benchmarking Initiative project in the coming months [10][18] Other Important Information - The company is exploring options for a new chip fab facility to enhance capabilities beyond the current 150 mm fab [63][66] - The potential investment for a new quantum fab is expected to be in the hundreds of millions of dollars, significantly less than a CMOS fab [66] Q&A Session Summary Question: Can you discuss the DARPA phase B and the feedback received? - Management noted that while not selected for phase B, constructive feedback was received, focusing on error correction and long-range coupling [17][18] Question: What is the comfort level for achieving 99% fidelity by 2027? - Management is confident in achieving 99.7% fidelity at 150-plus qubits by 2026 and 99.8% at 1,000 qubits by 2027 [21][22] Question: Will the 1,000-qubit system use chiplet-based architecture? - The plan is to use 36-qubit chiplets for the 1,000-qubit system, with confidence in achieving the fidelity targets [27][28] Question: How will revenue recognition work for the Novera system sales? - Revenue for the two Novera systems will be recognized upon shipment, expected in Q1 and Q2 of 2026 [31] Question: What is the expected impact of the National Quantum Initiative funding? - The recent reinstatement of funding to $625 million over five years is seen as a positive step, though discussions for higher funding amounts are ongoing [88][89] Question: What is the company's strategy regarding potential M&A? - The company is open to exploring M&A opportunities to accelerate its roadmap but believes it can execute its plans organically [50][51]

Financial Data and Key Metrics Changes - The company reported record results in Q3, with adjusted EBITDA of $20.8 million, up approximately 15% year-over-year and 6% sequentially [6][14] - Total rental revenue grew 11.1% year-over-year and 4.9% sequentially to $41.5 million, reflecting a 27,000 horsepower increase during the quarter [14] - Net income was $5.8 million or $0.46 per diluted share, an increase of $800,000 year-over-year and $600,000 sequentially [15] Business Line Data and Key Metrics Changes - Rented horsepower ended the quarter at approximately 526,000, an 11% increase year-over-year and 5% sequentially [15] - Fleet utilization reached a record 84.1%, up 204 basis points year-over-year and 45 basis points sequentially [15] - The company added a significant number of large horsepower units under long-term contracts, with roughly half being electric units [5][8] Market Data and Key Metrics Changes - The company is seeing strong demand in oil production, particularly in production efficiency, reliability, and emissions performance [9] - Rising electricity demand and LNG infrastructure buildout are creating durable growth opportunities for compression services [9] - The company is optimistic about continued demand for compression, driven by AI and data center expansion [9] Company Strategy and Development Direction - The company plans to add approximately 90,000 horsepower over 2025 and early 2026, with a significant number of new large horsepower units already under contract [8] - The company aims to maintain a balance between shareholder returns and growth, as evidenced by the inaugural dividend and its increase [7][16] - The focus remains on technology leadership and service excellence to improve competitive positioning [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver improved performance despite global macroeconomic uncertainty [9] - The company raised its full-year 2025 adjusted EBITDA guidance to $78 million-$81 million, reflecting a 2% increase at the midpoint from previous guidance [17] - Preliminary expectations for 2026 growth CapEx are set at $50 million-$70 million, indicating another year of organic growth [17] Other Important Information - The company has improved its income tax receivable and is awaiting payment processing [11] - Capital expenditures totaled $41.9 million, with $39.1 million allocated to growth CapEx [15] - The leverage ratio was 2.5x, remaining the lowest among public compression peers [16] Q&A Session Summary Question: Can you talk about the outlook for 2026 and customer conversations? - Management noted that there is no hesitancy from customers regarding 2026 contracts, with a broad range of interest observed [22][23] Question: What are the opportunities for margin improvement? - Management indicated that margins are expected to remain in the low 60s in the near term, with potential for improvement through a shift to large horsepower [25] Question: Is the majority of demand still for gas lift in the Permian? - Management confirmed that while gas lift remains the majority, there is growing demand for data center natural gas loads [29][30] Question: How is the relationship with Devon Energy developing? - Management highlighted a long-term relationship with Devon, emphasizing technology and service quality as key drivers for expansion [46][47] Question: How does the company balance dividend increases with growth opportunities? - Management stated that while they aim for a growing dividend, it will not impact the ability to grow the business significantly [44][45] Question: What is the outlook for capital expenditures in 2026? - Management indicated that 2026 is expected to be in line with 2024, with significant growth opportunities anticipated [54][55]

KalVista Pharmaceuticals (NasdaqGM:KALV) Q3 2025 Earnings Call November 11, 2025 08:30 AM ET Company ParticipantsBen Palleiko - CEONicole Sweeny - Chief Commercial OfficerBrian Piekos - CFOPaul Audia - CMORyan Baker - Head of Investor RelationsConference Call ParticipantsNone - AnalystNone - AnalystJoe Schwartz - AnalystStacy Ku - AnalystDebanjana Chatterjee - AnalystMaury Raycroft - AnalystNone - AnalystOperatorThank you for standing by. Welcome to KalVista Pharmaceuticals' 2025 third-quarter financial upd ...

Financial Data and Key Metrics Changes - Revenues in Q3 2025 were $1.9 million, down from $2.4 million in Q3 2024, impacted by the expiration of the National Quantum Initiative [12] - Gross margins in Q3 2025 were 21%, compared to 51% in Q3 2024, due to revenue composition and pricing variability [12][13] - Operating loss for Q3 2025 was $20.5 million, compared to $17.3 million in the prior year [14] - GAAP net loss for Q3 2025 was higher than in Q3 2024, primarily due to non-cash changes in fair value of derivative liabilities [15] - As of September 30, 2025, the company had approximately $558.9 million in cash and equivalents, with no debt [15] Business Line Data and Key Metrics Changes - The company announced purchase orders totaling approximately $5.7 million for two 9-qubit Novera quantum computing systems, which are upgradable [6][7] - A three-year, $5.8 million contract from the Air Force Research Laboratory (AFRL) was announced to advance superconducting quantum networking [8] Market Data and Key Metrics Changes - The expiration of the National Quantum Initiative and its pending reauthorization in the U.S. Congress impacted revenue [12] - The company is engaged with various academic and government institutions to advance quantum computing capabilities [9][10] Company Strategy and Development Direction - The company plans to deliver a 100+ qubit chiplet-based quantum system by the end of 2025, with a roadmap to deploy a 150+ qubit system by the end of 2026 and a 1,000+ qubit system by the end of 2027 [5][6] - The company is focusing on public-private partnerships to advance quantum technologies [9] - The company intends to open an Italian subsidiary to pursue business opportunities in the region [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future sales driven by recent contracts and collaborations, despite current revenue challenges [12][15] - The company is focused on achieving quantum advantage within the next three to five years, targeting 1,000 qubits with 99.9% fidelity [18][22] - Management is optimistic about potential funding increases for quantum initiatives from the U.S. government [88][89] Other Important Information - The company is exploring options for a new chip fab facility to enhance capabilities beyond the current 150 mm fab [63][66] - The potential investment for a new quantum fab could be in the hundreds of millions of dollars, significantly less than a traditional CMOS fab [66] Q&A Session Summary Question: Can you talk about DARPA phase B and the feedback received? - Management noted that while not selected for phase B, constructive feedback was received, focusing on error correction and long-range coupling [17][18] Question: What is the comfort level for achieving 99% fidelity by 2027? - Management expressed confidence in achieving 99.7% fidelity at 150+ qubits by 2026 and 99.8% at 1,000 qubits by 2027 [22][23] Question: Will the 1,000-qubit system be chiplet-based? - The plan is to use 36-qubit chiplets for the 1,000-qubit system, with no significant challenges anticipated for long-range coupling [28][30] Question: How will revenue recognition work for the Novera sales? - Revenue for the two Novera systems will be recognized upon shipment, expected in Q1 and Q2 of 2026 [32] Question: What is the expected gross margin profile moving forward? - Management indicated that margins may improve with upcoming sales, particularly from Novera systems [71] Question: What types of applications will the 1,000-qubit system run? - The system is expected to handle complex applications like drug discovery and financial forecasting, which current CPUs and GPUs struggle with [76][77] Question: How does the recent funding from the Energy Department affect the business? - The reinstatement of the National Quantum Initiative funding is seen as a positive step, although discussions for higher funding amounts are ongoing [88][89]