Q3 2021 IONQ Inc Earnings Call
[music].
Good day and welcome to the ion Q third quarter 2021 earnings call all participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing Star then zero.
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After todays presentation, there will be an opportunity to ask questions.
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Please note this event is being recorded.
I would now like to turn the conference over to Mr. Jordan Shapiro, Vice President of financial planning and analysis head of Investor Relations.
Please go ahead.
Good afternoon, everyone and welcome to Inq's third quarter 2021 earnings call my.
My name is Jordan Shapiro, and I am the vice President of financial planning and analysis and head of Investor Relations here at I N Q.
I am pleased to be joined on today's call by Peter Chapman I think he is president and Chief Executive Officer, and Thomas Kramer, Our Chief Financial Officer.
By now everyone should have access to the company's third quarter 2021 earnings press release issued this afternoon, which is available on the Investor Relations section of our website at.
Investors don't Inq dotcom.
Before we begin a quick reminder, to our listeners through the course of this call management will make forward looking statements within the meaning of the federal Securities laws.
These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward looking statements.
Actual results and the timing of certain events may differ materially from the results or timing predicted or implied by such forward looking statements.
And reported results should not be considered as an indication of future performance.
Please note that these forward looking statements made during this conference call speak only as of today's date and the company undertakes no obligation to update them to reflect subsequent events or circumstances other than to the extent required by law.
Please refer to today's press release and the company's quarterly report on Form 10-Q for the quarter ended September 32021, which was also filed with the SEC earlier today.
As long as other filings with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward looking statements made today.
Please note that on today's call management will refer to adjusted EBITDA, which is a non-GAAP financial measure while.
While the company believes this non-GAAP financial measure provides useful information for investors. The presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP.
Please refer to our earnings press release for a reconciliation of adjusted EBITDA to its most comparable measure prepared in accordance with GAAP.
Now I will turn it over to Peter Chapman, President and CEO of Inq Peter.
Thanks, Jordan and thank you all for tuning in to our first earnings call as a public company.
Before I jump into the results in the event of the quarter.
I wanted to give you some background for those who are new to the <unk> story.
I think who makes the world's most powerful quantum computers and we differ from most of our competitors by using a unique trapped ion approach.
We employ some of the world's foremost talent in our space, including our co founders Dr. Junk sang Kim and Doctor Chris Munro.
Both have been trailblazers and the world of quantum computing for decades and sit on the White house's National Quantum initiative Advisory Committee.
They are some of the most sided quantum computing researchers in the industry.
With complementary skill sets and electronics and experimental physics.
In the six years since I accuse founding we've made significant strides in taking our revolutionary trapped ion technology out of the lab and putting it into the hands of our customers as a commercial grade readily available quantum computer.
I am choose hardware is being used by companies and partners to push the boundaries in areas like machine learning financial modeling logistics optimization, and even quantum video games.
At a high level I am pleased to announce that I N. Q is tracking at or ahead of schedule on all critical path items underpinning our business.
We manufacture and operate the best quantum computers in the world.
And our mission is to make our quantum computers, even more accessible and to.
And nurture a global developer ecosystem.
And the next few minutes I'll take you through.
Thank you strong progress against its technical milestones, we outlined earlier in the year.
How we are continuing to broaden and deepen our ecosystem.
And how we are accelerating and scaling and.
In commercialization.
Let's begin with the impressive progress we have made on scaling our hardware.
Quantum computing is a next generation form of computation similar to how would you view differs from a C. P O.
There were several approaches to quantum computing.
The accused technology use trapped ion for our cubits.
Or the quantum bits underlying our systems, we chose trapped ion it's because we believe they exhibit qualities, they're well suited for stability and their ability to scale.
It can be hard to evaluate the relative merits of various quantum compute platforms in the market.
However, the recent publication of the benchmarking study of all commercially available quantum computers by the QE D. C. A third party industry group confirm that I accused computers are best in class along key dimensions, such as their accuracy, while running algorithms with high circuit with <unk>.
Circuit depth.
I am choose hardware outperformed the field outpacing entities from I B M Honeywell and righetti.
For additional details we refer you to the original paper in our blog post on our website.
Got you to the value of the algorithm based benchmarks the specific tests performed and the conclusions of the paper.
Broadly speaking every quantum computing company is working to increase the number of kubitz in their systems and at the same time reduce the prevalence of errors in order to improve the capacity of their platforms.
For our quantum processing unit or Q P. U. So it is designed to allow us to increase the number of Cubans in our system, while maintaining stability.
We believe this creates a path to scale that could allow us to place hundreds of kubitz on a single chip up from the dozens we have on chips today.
In early October researchers from Inq, and the University of Maryland published results and a prominent peer reviewed journal the documented best in class error correction technology.
This joint study with Duke University, the University of Maryland, and the Georgia Institute of technology, whereas the first and so far the only one on any quantum computing system to show fault tolerant error correction working in practice.
Solving error correction is critical to creating quantum computers large enough to deal with the complex problems the governments businesses and societies face today.
In summary, we are confident that our technical progress to date will allow <unk> to continue its leadership in the quantum industry.
Next I'm excited to update you on how we are bringing quantum out of the lab and into the real world.
Our goal is to enable every developer to use inq's quantum hardware and create applications to take advantage of the unique strengths of our quantum computers.
Year to date, we've accomplished what we believe to be the two most important steps in making inq's quantum hardware widely accessible.
Broad cloud partnerships and broad software support.
First I N Q as the only provider of quantum computing hardware available on all three major public clouds.
We already have two quantum systems available for our customers through every major U S cloud provider, including Amazon Web services, Microsoft Azure and Google Cloud.
We've also completed the construction of our third more powerful system, which we announced at our second quarter business update call on September 22nd this year.
This is now available as a private beta for a flight customers via our dedicated cloud.
We are the only provider of quantum computing hardware available on all three major public clouds.
And second we use integrated Inq's hardware with every major quantum software development kit, including platforms like Ibm's Kitkat and Google search.
This simplifies access to our hardware for hundreds of thousands of developers already on those platforms.
Lastly, I will discuss the great progress we've made on the commercial side of the business and then building the company.
We are proud to announce that we've tripled our bookings expectations for fiscal year 2021.
This past quarter, we announced partnerships and collaborations with world class companies, including Goldman Sachs.
Fidelity Center for applied technology, Accenture, and GE research as well as with educational institutions like the University of Maryland.
We continue to make progress towards new and exciting applications and customer wins.
We have also fortified I think he was balance sheet in recent months, having completed our business combination with D. M Y technology group three on September 30th 2021 and two is now the first publicly traded pure play quantum computing company in the world.
We are fortunate to have Hyundai Motor Company <unk> Corporation.
Over like M. S D partners breakthrough energy ventures anyway.
T V and Fidelity management and research company.
Stockholders of Inq.
As a result of this transaction, we received net proceeds of $575 million, which will fund our commercialization efforts and accelerate the development of future generations of quantum computers.
We achieved all of these milestones through Q3 2021 with comparatively modest funding. We are now one of the best funded quantum computing companies in the world.
Part of scaling the business is growing the team, including recent key hires we brought in aerial Brian as senior Vice President of product management aerials background is truly impressive with extensive experience across diverse roles in technology areas working in companies ranging from early startups to fortune.
100.
In addition to co founding pure digital technology, which generated over $1 billion in revenue with the flip video camcorder.
Ariel led cisco's consumer product portfolio as well as Google's E. R N V our product management.
We hired Jim Cashman, as Vice President of research and development prior to joining US He was senior director of advanced technology for Blue origin.
They are dean established and led the team responsible for company wide applied research in the support of their launch vehicle engines and in space product lines Deane.
<unk> has over 25 years of leadership in software hardware and technology development, including advanced modeling and planning roles at both Aspen technology and Amazon.
We are thrilled to welcome Ariel and deemed to the <unk> family and look forward to working with him as we continue to build out a world class team.
We are beyond excited to begin our life as a public company.
And I want to thank all our board members advisors investors employees, and everyone, who make our public listing possible.
And with that I'd like to turn over the call to our CFO Thomas Kramer Tommy.
Thomas.
Thank you Peter and good afternoon, everyone I would like to start off by quickly going through some of our financial results in more detail.
Earlier in Q3, we raised our full year 2021 forecasted bookings expectations from $5 million to $15 million today I'm happy to announce that as of the end of Q3, our total bookings for the year have already exceeded our increased expectations for the full year ending up at $15 $1 million.
We believe this is a recognition of the promise our customers see in our platform and we're starting from customers buying more and also earlier than we had expected.
Given that we are still at the beginning of our commercialization phase and that in addition to transactional based cloud revenue, we saw large contracts where customers pay for reserve compute taxes, you should expect bookings to continue to be lumpy for quite some time.
On the top line, we had $233000 of revenue in the third quarter of 2021 for a total of $451000 year to date, we had no revenue in the prior year period.
Moving down the income statement, our total operating costs and expenses for the quarter were $10 $8 million up from $3 $6 million in the prior year period.
Breaking this down a bit our research and development costs in the third quarter was 2021 were $6 $2 million compared to $2 $3 million in the prior year period as we continue to invest in building our technology advantage.
Our selling and marketing costs in the quarter were $1 $3 million compared to 81000 in the prior year period.
This is due to the ramp up in our commercialization efforts and focus on sales and partnerships.
Our general and administrative costs were $2 $5 million compared to $727000 in the prior year period due to increased headcount and overhead associated with scaling.
We expect our general and administrative expenses to increase for the foreseeable future as we scale head count with the growth of our business and that's a result of operating as a public company.
You May also note the $4 3 million dollar non operating cost on our P&L, which is a portion of the transaction cost allocated to the liability classified warrants from the original D. M Y three IPO. This is a onetime noncash expense that will not be a recurring charge.
This resulted in net loss of $14 $8 million compared to a net loss of $3 $6 million in the prior year period.
Our adjusted EBITDA loss for the quarter was $7 9 million compared to the $3 million in the comparable.
Prior period.
As a reminder, due to the nature of our business and technology.
To continue to build our investment in our business for the immediate future.
On our balance sheet cash and cash equivalents were $587 million as of September 30th 2021.
This was largely a result of the close of a transaction with Dean why three.
The transaction closed on September 30th and provided us with net proceeds of $575 million.
Intend to use these funds to bring new generations of hardware with higher capacity to market and to build out our commercial capabilities.
In addition to investing into quantum computer.
Ecosystem.
We are well capitalized and well positioned to benefit from Capitol Hill's interest in quantum as shown by the infrastructure Bill.
Turning briefly to our fourth quarter and full year guidance, we continue to see strong demand for our compute platform.
In the third quarter, we benefited from some contract bookings closing sooner than anticipated.
Still in the fourth quarter, we expect an additional six to $800000 in new total contract value bookings.
As a result, we anticipate that we will end the year between $15 $7 million and $59 million in bookings.
This is well above our original 2021 estimate of $500 and also significantly above our updated full year target of $15 million.
The closing of bookings in Q3 will have a direct impact on recognized revenue and accordingly, we anticipate our top line for Q4 to end up between $1 million or one $2 million for the full year revenue of $1.5 million to $1.7 million for 2021.
Now I'd like to touch on two topics that we felt were important dimension outside of our financial results.
First the redemption rate observed during our D spec process was notably low at approximately two 5% of the outstanding shares of BMI free.
We take this as an indication of our investor confidence in our long term prospects, which can be further some mines for the fact that 71% of our investor base agreed to lock up periods ranging between six to 18 months.
Second I want to mention that we expect a large number of one time transaction related expenses. In addition to cost of being public to be paid out in the fourth quarter of 2021.
The largest of these is a D&O insurance policy, which will be approximately $2 million.
Finally, I'd like to move on to some of the partnerships that we announced in the quarter.
As Peter touched upon earlier in Q3, we announced a partnership with the University of Maryland to create the national quantum lab at Maryland <unk> lab.
The QLED will serve as an important conduit for some of the rising stars of quantum and for the scientific community as a whole to pursue world leading research through hands on access to commercial grade quantum computer.
Access to the facility will be opened to U M. D affiliated students faculty researches staff and partner suppress the country, allowing collaborations with our own scientists and engineers.
We will be the exclusive provider of quantum computers to the QLED and as such the University of Maryland is an important customers.
We could not be more excited about this partnership and look forward to future projects with the University of Maryland, which has made a name for itself as an international powerhouse for quantum research.
Next in collaboration with Goldman Sachs, and QC, where we demonstrated how our quantum computers are powerful enough.
To run an algorithm that lays the foundation for speeding up Monte Carlo simulations.
As many of you know Monte Carlo simulation is an important analytical tool for a variety of industries, including financial services.
Drug discovery robotics and climate science.
We are working to design the number of quantum algorithms intended to let firms the value at risk and similar prices for a variety of financial instruments much faster than classical computers are capable of doing today.
In a similar vein. We also released a paper in collaboration with a adult day center for applied technology.
Demonstrating how our quantum computers can outperform classical computers in the direct generation of high quality data used in testing financial models.
We believe the new technique is a significant step in developing applications for quantum finance.
It is also applicable to a broad set of other industries.
Obviously, we are very encouraged by these results and their potential.
Additionally, we announced a multiyear strategic relationship with Accenture intended to accelerate the development of quantum computer business applications.
Accenture is experiencing quantum it's worked with companies across a wide range of industries and its ability to design customers industry solutions tailored to our hardware was enabled us to have more companies become quantum ready in the future.
Okay.
Lastly, we announced a partnership with GE research to explore how our quantum computers can be used in the field of risk analysis.
[noise] analysis was which is common in the finance industry can applied to a wide set of complex systems, such as supply chains, environmental systems and cyber security networks.
We are encouraged by our financial performance this quarter and look forward to continuing to execute on our roadmap.
And with that operator, you may now open the line for questions.
We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad. If you were using a speaker phone. Please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to withdraw your question.
Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Our first question comes from.
Katy Huberty with Morgan Stanley. Please go ahead.
Thank you good afternoon, and congratulations on the public listing in many product announcements and milestones in the quarter I have a couple of questions. The first is about the bookings and mix of bookings year to date, what can you tell us about the number of customers or deals within that 15.
Bookings and about the mix of customers and end use cases that you've seen this year.
Hi, Katy thanks for calling in and excellent questions. What we have seen to date is that we've seen.
<unk> of customers running projects on our machines with billions of shocks in terms of running there.
Computations.
We continue to see a mix of customers coming in through our public cloud, where we actually don't know who all of the customers are because that fits with the public cloud provider and we have customers on a private cloud as well.
We are to date not going to break out the individual customer names because many of these actually covered by a confidentiality clauses.
Yep, Okay, and then as it relates to the cost structure. The fact that G&A today is greater than sales and marketing just speaks to how early you are in the commercialization phase how should we think about sales and marketing expense scaling long longer term should we model that as a percentage.
As bookings and then just remind us at what revenue scale would you expect the business to be profitable on a non-GAAP basis.
So excellent question, we look forward to providing updates on our future cost structure as well as earnings on the Q4 call. However, you are absolutely right and that we anticipate our commercialization to ramp up and sales and marketing should grow as a percentage.
Our total cost basis.
Okay, and then just just lastly, the high level thoughts I know, it's early to be specific but you've outperformed the bookings target by three acts in 2020. One your original target for 'twenty 'twenty. Two was 15 million so flat with what you've executed to this year I imagine that there's some up.
Word pressure potentially on next year outlook, just any thoughts as to how the outperformance year to date influences qualitatively your view of next year.
Thank you absolutely.
Absolutely we're extremely happy to have seen how many customers have been willing to invest in us early on in our lifecycle as a commercial company that is offering products for sale and we anticipate that this will continue to happen and we look forward to updating the market on our expectations for.
For 2022 sales on our Q4 earnings call.
Thank you.
The next question comes from David Williams with Benchmark. Please go ahead.
Hey, good afternoon. Thanks for letting me ask the question and congrats on the solid progress here.
Thank you.
I wanted to maybe ask maybe on the competitive environment and you spent some time talking about this has clearly made a lot of progress here, but when you think about some of the competitors within the space. What are the key Differentiators, you think and I on Q that you'd not be able to exploit or maybe I realize we're still in the early days of quantum technology, but beyond the metrics. How do you think about the competitive.
The landscape.
Well.
Hi, This is Peter and thanks for the call.
The you know in general there's a lot of noise about total number of cubits from competitors and as we've said before we don't think that that by itself is going to foretell who's going to win the quantum of space race. Other factors such as average two to vacate fidelity the error correction overhead.
Cubic connectivity.
And eventually the price for Cuba are going to be the kind of need to be considered as well.
And all all quantum companies know this even though they don't talk about it.
We continue to believe ours will lead to the best quantum computer in the future.
Okay Fantastic. Thank you and then maybe as I understand some of the aspects around the differing approaches or models, maybe gate versus annealing. It seems optimization type problems or less tolerant or maybe have a little a little more overhead than maybe.
And approach.
Can you maybe just talk about that a little bit in terms of the applications. You think island Q systems will have the best advantage, maybe any specific areas. You think you can capture here.
Hi, Good question. This is Chris Boerner, our chief scientist.
So the annealing model of quantum computing is highly experimental now it's not clear that quantum even plays a role in what's going on there.
It is not.
It's really apples and oranges comparing that to the gate model, which is the type of computing mode, We and most of the others in our in the industrial space work work on and the benefit of the gate model is that it's proven to be universal.
Can perform any quantum algorithm with a gate machine. It's not clear you can do that with Neil and although you may be able to do interesting things with listed and the other I think that's left to research.
So with the gate model again, we can we can characterize the number of kubitz the number of gates, even perform and compare the different technologies.
Okay very helpful. Thanks, and one last one maybe if you can maybe talk a little bit about the new chip that you have announced and just curious maybe you can walk through the timing and when we should expect to have maybe some some early performance data and then is this a fundamental change in and maybe you have a tactical process or maybe its target architecture or is this just maybe a refinery.
Of your existing approach.
Chris Monroe here again.
The new chip we demonstrated.
Allowed us.
And intermediate way to scale up our system by multiplexing several cores of of ion trap.
Collections of cubits now the chip itself.
It's made of a different material than we had used previously but theres nothing quantum about the chip it's more of the support structure. It's part of the control system and we anticipate in the future probably changing that around two as need be the main point of that chip is scaling and allowing us to get algorithmic qubit numbers. So.
We can hit useful applications.
Fantastic. Thanks, so much I look forward to seeing the four key results.
Yeah.
The next question.
Comes from Ruben Roy with West Park Capital. Please go ahead.
Yeah. Thank you and thanks for taking my questions I guess, the other Peter or Chris just to kind of follow up on that last question sing saying that the bookings are moving higher which is great. I'm. Just wondering if you can give us an update on systems manufacturing progress our U I think Peter mentioned, you're ahead of schedule on most of your met.
Tricks, but maybe a little bit of an update on where you stand with systems. At this point how are you looking for next year would be helpful.
Hi, Robin I'm happy to answer so at the current time, we have two systems, which are servicing jobs out on the cloud for all three cloud partners and internal for our private cloud and then there's an additional system, which is the what we call. The 32 qubit system we tried.
Now as in private beta and we have customers and in fact actually Goldman Sachs and fidelity are have been running jobs on that system as well as other customers.
So that one we haven't put out into the cloud yet.
We would expect to do that in 'twenty 2022, and then in addition, there is three additional systems under construction in various phases of development that we're building right now that you know we'll be talking about in the future.
Great. Thank you Peter to follow up on that I guess and following up on a question from earlier just around expenses I guess, Thomas maybe we could talk a little bit about how you're thinking about the R&D I don't think you you really talked.
Talked about the scaling that.
And how that might.
In fact, the model near term as the bookings go up and you are working on these new systems.
Yeah, I would imagine that's more of a development and research at this point, but if you can give us a little bit of how you're thinking about R&D that'd be helpful.
Absolutely.
Good to hear your ribbon I D.
I think you covered it very nicely, we will absolutely continue to scale up our R&D investment, but it's mostly on the D and not on the or most of the technology that we are utilizing has already been laid out and document that through 25 years.
Research from Doctor Chairman, Dr. Munroe and what we are doing is executing on this roadmap that I've already laid out.
Fully most of our parts are standard off the rack, we like to joke that we can buy them Amazon but in reality.
While we do of course by some things and Amazon we buy these from a standardized makers of traditional parts and some untraditional ones that we won't cover on this call, but that's our secret sauce of course, but these parts are neither a very unique or.
Very expensive, which allows us to have a much lower cost base than what you would expect from an early stage hardware manufacturer.
And.
We are very happy to see that we've been able to do this with a limited investment and already were seeing quite some pick up in the market.
Great. Thanks, Thomas last question since we do have document or on the call are wondering you started to talk a little bit about the the chip and scalability are the Reconfigurable Reconfigurable chip what are what are sort of the milestones that you're looking for Nexstar, you know when you're talking about scale ability.
I think you guys have talked about using an optical interconnect.
You know to scale.
And to.
Systems that have higher kubitz is that sort of the next milestone or what should we be thinking about in terms of you know moving forward towards commercialization of that new technology.
Yeah. Thanks. Thanks for the question that that's certainly one of the milestones I would say one aspect that sets our company apart from the entire market is we have a very deliberate path to scale on several fronts. One of them is the multi core architecture that we demonstrated.
The basic does on this recent chip where we on a single chip can have many cores of individual.
Call it local quantum computers, and Ah is reconfigured bullet allows us to move kubitz back and forth between the cores and then as you correctly noted our outgain is to move the information off chip to another chip.
And here, we envisioned something like a datacenter where each chip would be in its own stone device connected by optical fiber to another device and then it comes down to you know how are how much land do you have to to to put put racks in and scale up your quantum computer Accordingly, now again we.
We have a we have very concrete plans to do that and we understand as we scale that we will have we will that we will have full connectivity any cubit in the entire system can directly talk to any other cubit and so this is one advantage the scale that they you know that we were going to pull away even even.
More notably compared today as we scale so you're right. The photonic interconnect is a key part of our of our scaling strategy going forward.
It's not the only one.
Excellent I appreciate all the detail and congrats guys on the continued execution.
Thank you. Thank you.
Yeah.
The next question comes from Richard Shannon with Craig Hallum. Please go ahead.
Oh, great. Thanks for taking my questions as well guys, maybe a quick financial question for Oh.
For Thomas gross margins I think in your spec presentation deck, you talked about kind of our forties percentage or a percent or so gross margins. We're seeing it so far this year at a kind of a round zero here.
When do we get up to the levels that we're talking about here like 40 years or even higher here. So it's something that you expect in the fourth quarter or soon thereafter.
So the the gross margins that we spoke of earlier was on a unit lifecycle basis.
And we think that we are actually delivering towards those already.
We will continue obviously to see very modest gross margin as we are so early on in the commercialization phase and we look forward to updating you on the expectations for gross margins in 2022 on our Q4 call.
Okay Fair.
Fair enough second question on bookings.
Thomas you get in your prepared remarks, you talked about your bookings and your outlook for next year and I think in response to a question as well, but you also talked about it being lumpy I think you had a you know a.
Small number of contracts that provided most of the upside to your your 'twenty 'twenty. One number here can you give us a sense of what you're looking at in terms of the bookings pipeline today, whether it hits that 15 million goal or whatever it ends up being next year like what is the 80 is there like an 80 20 rule to this or even a more extreme version of that that helps you.
Get to that 15 million number or whatever it becomes next year can you give us some color as to how that will develop.
Absolutely. So we have been basically talking to potential customers and partners for probably two years now and it's only been recently that we've been able to come to the market with an actual product that we can sell and what we have seen is that the reception in the market was.
Larger and faster than we had anticipated and that refers to the lumpiness and.
As you know when you look at recognize revenue that pain tends to straighten itself out, particularly when you have a contract that you can straight line, which most of US ours are however, the actual timeline. It comes in can create spikes, where youll see that it goes up and one quarter it might be higher than the next like Q3 was higher than.
We are anticipating Q4 being so.
So that is just the nature of the Beast when you sell large deals and we can we anticipate that this will continue.
For quite some time, although we anticipate our recognized revenue to be much smoother.
We are busily working away on our our next year.
Sales of course, and we look forward to updating you on our expectations on the Q4 earnings call.
Okay. We look forward to hearing about that a couple more questions for me one for Peter.
The paper you put out a number of weeks ago regarding the benchmarking organization and the data, which I will read the paper and it seems a very complementary to each other in Q in general here, maybe can you tell us about the reactions you're hearing from customers researchers and even competitors in the market.
Well. This this validates what we've been saying you know kind of all along that now having an industry.
Association be doing kind of independent benchmarking, ensuring that our quantum computers are the best.
If you know and in part to you you'll also hear it from customers when they say we've tried this on various other platforms well it only run on Inq's hardware.
And so you know you're hearing it now both kind of customer voices and also now in our industry kind of industry benchmark.
And so we do think that these industry benchmarks are the way kind of going forward.
To be able to compare systems in the future. We hope everyone else will join kind of.
So are you benchmarking effort. So that we can compare these systems fairly from one vendor to the next.
Obviously at the current time, we're doing quite well on that.
Kind of a leading vendor in this space.
Okay. Thanks for that feedback and my last question I guess I'd love to hear from both Peter and Chris on this one as you think about the industry developing over the medium to long term.
To what degree do you see this market being a winner take all kind of opportunity.
Well.
No the.
The Tam for quantum is is huge so it's hard to imagine one company taking it all.
That would be like saying somehow like Intel most the one that was going to take all over in the entire.
Physical computing market. So we do think that there will be a space for multiple players.
B space for multiple approaches to quantum and who's winning and we think those things will be good things for customers.
Competition makes us better.
Okay, Great that is all for me. Thank you.
Again, if you have a question. Please press Star then one.
The next question comes from Jack Andrews with Needham.
Please go ahead.
Good afternoon, and congratulations on the results I was wondering if you could speak to the overall hiring environment just given your efforts to scale your organization, how hard is it to find out.
Relevant people with the requisite quantum computing skills or are there similar backgrounds that you think are appropriate and you can leverage.
In terms of building your organization.
Okay.
It's a great question. Thanks Jack.
Well the the quantum talent worst is indeed heating up.
But we found that those with the quantum skill sets are drawn to work on the most advanced technology in the world at IAA in Q.
And we were lucky to have our two co founders who are the brightest minds in the field and often people are are drawn to them.
To come work with us So I think that makes all the difference.
We are working to create a quantum silicon Valley in College Park and it was a symbiotic relationship with the University of Maryland.
And that continues to also.
Giving us a pipeline of new talent as they come out of the universities.
We do think kind of internationally as well that and often talent isn't just focused in the United States and so sometimes it's overseas. So what we can as a country can do to help us.
Kind of.
Make that talent available here is also important.
That's probably outside of our control.
Yeah.
Well, thanks for the perspective, and just as a follow up question I was wondering if you could just drill down a little bit into the traction with the public cloud vendors in particular is there any one of the of the three major hyperscale or is that you are particularly optimistic about that.
That can help move the needle for you here in the near term.
The answer the answer is we unfortunately can't.
Can't tell you you know due to agree.
Agreements with them as to what the sales are for one versus the other.
Got it I appreciate that thank you.
This concludes our question and answer session I would like to turn the conference back over to Peter Chapman for any closing remarks.
Thanks, everyone for attending today.
Any company is for some of its employees and we would not be here without the incredible dedication of the eye and Q team.
I'd like to thank each and every one of our employees for their contribution.
We continue to be focused on our long term goals of investing in building the business to make <unk> the clear market leader in quantum computing.
We will use these calls as a forum to highlight the key milestones along our journey and we look forward to updating the entire investment community on our current risk going forward.
Thank you everyone for taking the time to listen today.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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