Tyler Anderson

Tyler Anderson of Craig-Hallum Capital Group, on for Richard Shannon, asked for updates on the DARPA and NQCC programs, learnings from the chiplet approach, and whether this technology was attracting more interest for on-premise systems.

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CEO Subodh Kulkarni reported ongoing projects with the UK's NQCC, including system upgrades, and expressed optimism about advancing to Phase 2 of the DARPA program. He noted that learnings from the chiplet approach are being captured in the company's growing patent portfolio. He confirmed that government customers view the chiplet architecture as the only viable path to scalable, fault-tolerant quantum computing, which drives significant interest.

Tyler Anderson, on behalf of Richard Shannon from Craig-Hallum Capital Group LLC, asked for more details on the new developer tools and their application in classical machine learning problems.

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CEO Alan Baratz explained that the new AI developer toolkit integrates PyTorch and uses a D-Wave-developed discrete variational autoencoder. This approach maps data into a discrete latent space, which is native to their annealing quantum computers, potentially leading to better, faster, and more energy-efficient machine learning models. He framed it as a key step in their quantum AI strategy.

Tyler Anderson from Craig-Hallum Capital Group asked for reasons behind the slowdown in gallium arsenide export licenses as indium phosphide licenses began, and whether customers are placing advanced orders to build inventory.

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Tim Bettles, VP of Business Development, noted it was difficult to speculate on the government's process but confirmed the slowdown was industry-wide and that the pace of approvals appeared to be improving in July. CEO Dr. Morris Young added that China might be using the restrictions as a negotiating tool related to rare earth policies. Regarding inventory, Dr. Young stated that while customers have expressed a desire to place large inventory orders, AXT is currently focused on fulfilling existing urgent orders and has not yet reached the stage of building customer inventory.

Tyler Anderson, on behalf of Richard Shannon at Craig-Hallum Capital Group, asked about the reasons for the slowdown in gallium arsenide export licenses, whether the same agency handles both gallium arsenide and indium phosphide permits, and if customers are placing advanced orders to build inventory.

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Tim Bettles, VP of Business Development, stated it's difficult to speculate but noted the slowdown was industry-wide and that the approval pace seemed to be improving in July. CEO Dr. Morris Young added that the restrictions are likely part of China's broader negotiating strategy regarding rare earth materials. Regarding inventory, Dr. Young explained that while customers are anxious to place large orders to build stock, they are currently focused on receiving their initial, long-overdue orders first.

Tyler Anderson asked for technical details on the Lightsynq acquisition, including connectable modalities and error correction capabilities, and inquired about how the Capella acquisition enhances IonQ's platform and the potential size of the space-based networking market. He also followed up on the IDQ acquisition's impact on guidance and the specifics of the EPB deal.

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SVP of Engineering and Technology Dean Kassmann detailed that Lightsynq's technology uses diamond silicon vacancies and mature frequency conversion, making it compatible with any photon-based modality. Regarding Capella, Executive Chairman Peter Chapman and President Jordan Shapiro explained it provides a real-world environment and an initial revenue-generating application to develop secure space communications. On the follow-ups, executives confirmed the EPB deal was for half a system's capacity, creating the need for a second networked computer, and that the IDQ acquisition timing was in line with internal planning for full-year guidance.

Tyler Anderson, on behalf of Richard Shannon at Craig-Hallum, asked a series of technical and financial questions regarding the Qubitekk acquisition, the imec partnership's role in the AFRL contract, the government spending opportunity, and the company's revenue focus.

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SVP of Engineering and Technology, Dr. Dean Kassmann, addressed the technical points, stating Qubitekk's technology has parallels but is distinct from IonQ's core interconnect needs, and the imec work is a long-term project not for the current AFRL contract. CFO Thomas Kramer disclosed the Qubitekk acquisition price as $22 million in cash. CEO Peter Chapman added that the company is shifting its focus from near-term government contracts towards enterprise commercial revenue, driven by the new application development initiatives, which aligns with the strategy outlined since the IPO.

Tyler Anderson, on for Richard Shan, asked for more details on the new top-10 OEM, including its headquarters' general location, operating geographies ex-China, and the potential size and cadence of model ramps. He also questioned if the planned manufacturing capacity is sufficient for the next few years.

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CEO Soroush Dardashti described the partner as a well-known global OEM and a leader in introducing new technology, without naming it. He stated the opportunity is massive, covering multiple vehicle lines, and could be worth at least $1 billion-plus in revenue, similar to the Daimler Truck program. Regarding manufacturing, he confirmed the plan to install capacity for over 100,000 units this year, noting the line is designed to be expandable and benefits from Aeva's simplified, low-component system architecture.

Tyler Anderson, on for Richard Shannon, asked about the qualitative differences between Aeva's indoor and outdoor applications and the strategic reasoning behind pulling forward the first shipments of the Atlas sensor.

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CEO Soroush Dardashti clarified that the Atlas product is used for both indoor and outdoor applications, such as monitoring people inside airport terminals and tracking airplanes outside. He stated the pull-forward of Atlas shipments by nearly six months was a strategic decision to capitalize on a sharp uptick in market interest following the Daimler Truck win. This acceleration allows Aeva to support new production wins like The Indoor Lab, which do not require immediate full automotive-grade certification, while continuing progress on automotive programs.

Tyler Anderson, on for Richard Shannon, asked about the number of films needed to create a tipping point for streaming services to adopt TrueCut Motion, the nature of engagements with post-production houses, and the timeline for the consolidated company to reach breakeven.

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CEO Todd DeBonis explained that the tipping point for TrueCut adoption depends more on securing tentpole titles and simultaneous commitment from device makers and streaming services, rather than just a specific quantity of films. He confirmed discussions are with very large post-production companies. Regarding breakeven, DeBonis stated the Shanghai subsidiary is expected to be profitable in 2025, but the parent company's profitability depends on the strategic review's outcome, though he expects to be 'close' by year-end.