Pasqal Holding SA Ordinary Share 2026 H1 Earnings Call

Please go ahead. Welcome to Pasqal's first half 2026 earnings conference call.

Joining us are Pasqal CEO, Wasiq Bokhari, and CFO, Stéphane Rougeot. Before we begin, I'd like to remind everyone that today's discussion will include forward-looking statements, including, among others, statements about our expectations for our future financial performance, growth opportunities, business strategy, market trends, and capital allocation plans. These statements are based on our current views and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. We direct you to our recent SEC filings for a full description of these risks. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. We will also reference certain non-GAAP financial measures. These measures should be considered only as supplements to their comparable GAAP measures.

Additional information, including reconciliations of the non-GAAP measures to their most comparable GAAP measures, can be found in our earnings release at investors.pasqal.com. Finally, I would like to remind everyone that this call will be recorded and made available for replay via a link available in the investor relations section of the company's website at investors.pasqal.com. With that, I'll now turn the call over to Wasiq.

Thank you. Good morning, and thank you for joining us for Pasqal's first earnings call as a public company. The first half of 2026 was an important period for Pasqal. We advanced our technology roadmap, expanded our commercial activity, delivered a major customer system, strengthened our manufacturing and organizational capabilities, and prepared the company for its next phase of growth as a Nasdaq-listed company. Before stepping back and discussing the broader Pasqal story, I want to briefly highlight a few accomplishments from the first half. We delivered revenue growth of 14% year-over-year, with QPU-related services revenue increasing 34%, reflecting growing customer demand for our systems and expertise. We continued advancing customer deployments, expanded strategic relationships across our priority industries, and executed against our product roadmap. I would like to spend a few minutes now providing context for investors who may be newer to the Pasqal story.

At its core, Pasqal is building a high-value, high-scale quantum computing business. We are not a research project. We are not a lab experiment. We are focused on building commercially relevant computing systems that solve important problems for customers today while creating the foundation for fault-tolerant quantum computing tomorrow. Today, we believe Pasqal operates the world's second-largest fleet of high-complexity quantum computers after IBM. We have seven systems deployed across three continents, with three additional systems in production. These systems operate in real-world environments, support customers and researchers globally, and are designed to function as practical computational infrastructure rather than lab equipment. What differentiates Pasqal is the combination of scientific leadership, engineering discipline, and commercial focus. We were founded by pioneers of neutral atom quantum computing, including Nobel laureate Alain Aspect and Professor Antoine Browaeys.

We have deep technical expertise, a substantial intellectual property portfolio, and a full-stack platform spanning hardware, software, and applications. Just as importantly, we have spent years industrializing our technology and learning what it takes to build, deploy, operate, and upgrade reliable quantum computing systems at scale. Pasqal is genuinely a global company. Our customers, scientific talent, engineering capabilities, and intellectual property span Europe, North America, the Middle East, and Asia. Through our Nasdaq listing, investors now have access to a global quantum computing platform with established systems, customer relationships, and technical capabilities across multiple innovation ecosystems. While quantum technologies include several important fields, quantum computing represents the most significant long-term opportunity for Pasqal. Focus matters. Concentrating our talent, capital, and engineering resources on computing allows us to pursue excellence in the area where we believe we can create the greatest customer and shareholder value.

That focus leads directly to our commercial strategy. In quantum computing, it is easy to become consumed by architectures, modalities, and individual technical benchmarks. Those metrics matter to us as engineers, but they are not where the customer conversation begins. Customers care about value. Can we solve an important problem? Can we solve it better than existing approaches? If we can, what is the economic value of that improvement? That philosophy has become the foundation of our commercial strategy. We organize the company around what we call the problems worth solving. Rather than pursuing every possible quantum opportunity, we deliberately concentrate on applications where we believe quantum computing can generate significant and measurable value, a meaningful benefit compared to traditional computing. Today, our highest priority verticals are energy, financial services, and high-value material.

Within each vertical, we seek to develop deep domain knowledge, identify valuable applications, validate them with leading reference customers, and then make the resulting expertise, software, and solutions repeatable across additional customers. This creates a stronger foundation for a scalable business than building a large collection of disconnected proofs of concept. A broad pipeline can become large without becoming repeatable. Our objective is to create customer relationships and intellectual property that compound over time. The foundation of this strategy is our neutral-atom architecture. Our qubits are individual rubidium atoms. Every rubidium atom is fundamentally identical to every other rubidium atom. Our qubits therefore start identical by nature and behave in highly predictable ways. They also connect spontaneously to each other without requiring wiring. Our public roadmaps share our ability to scale to tens of thousands of high-quality qubits by 2030. We believe this creates a fundamental scaling advantage.

Unlike quantum architectures that require increasingly complex fabrication of specialized semiconductor or superconducting devices, we do not need to manufacture new chips for each qubit or to connect them to make complex systems. Nature manufactures our qubits. It creates a capital efficiency advantage for us as a business. We do not need the massive fabrication infrastructure that some other approaches ultimately require as they scale. We believe all this provides meaningful advantages in uniformity, manufacturability, scalability, and long-term economics. Our current QPUs consume approximately 3.5 kilowatts of power and are designed to operate inside conventional data center environments. This results in lower CapEx and OpEx. For our customers, we believe all these advantages ultimately translate into a highly capital-efficient form of quantum computation that we expect to become amongst the lowest capital cost per useful quantum operation as the technology scales.

We believe scalability must be viewed much more broadly than simply increasing qubit count. True scalability means increasing computational capability while also manufacturing systems efficiently, deploying them reliably, minimizing infrastructure and energy requirements, and maintaining attractive economics as systems grow larger. We also operate facilities in France and Canada that provide the infrastructure to build and deliver systems as demand develops. For Pasqal, this means lower capital requirements as we scale. Those characteristics matter because quantum computing ultimately must become practical infrastructure, not an isolated lab capability. We believe Pasqal's architecture and industrial approach position us well for that transition. One of the most important differences between Pasqal and many others in the quantum industry is that we do not believe customers should have to wait for fault-tolerant quantum computing before deriving value from quantum systems.

There is a common assumption that useful quantum computing only begins when large-scale fault-tolerance arrives. We disagree. Our neutral-atom platform enables analog quantum computing today while securing a path towards digital fault-tolerant quantum computing on the same underlying hardware architecture. That creates a bridge rather than a waiting period. Customers can begin developing applications, workflows, integrations, and expertise today while remaining on a platform that we believe can continue evolving toward large-scale fault-tolerant quantum computing. This is why we describe our strategy as analog today, and fault-tolerant tomorrow. Analog is not a detour on the road to fault-tolerant. It is the first stage of the same journey. The applications we develop today, the customer relationships we establish today, and the software capabilities we build today all contribute to the foundation for future fault-tolerant systems.

We believe this approach shortens the path to commercial adoption and allows us to create customer value while we continue advancing our long-term technology roadmap. This gives Pasqal a major competitive edge in the industry. Turning now to the first half, our focused commercial strategy continued to gain traction. We made progress across strategic accounts, expanded the range of applications being pursued with leading customers, and continued concentrating our resources on problems that quantum computing can provide meaningful business value. Aramco is an important example. In May, we commissioned the QPU under our Aramco contract, moving the system into its operational phase. Our work spans several potential applications, including reservoir simulation, well placement optimization Rig scheduling and demurrage prediction. The progression of this relationship illustrates our model. One engagement helps us learn more about the customer's operations, which helps us identify the next problem worth solving.

As our relationship has deepened, the number of use cases and opportunities has expanded. In August, we also announced a memorandum of understanding with Eleven Ventures to establish a commercial joint venture intended to deploy, commercialize, and scale Pasqal systems across Saudi Arabia and the broader region. The parties have not yet entered definitive agreement, but the initiative reflects the broader opportunity we see to build our presence and customer engagement in the region. We see a similar progression with Crédit Agricole. After multiple years of collaboration in portfolio optimization and credit risk modeling, the relationship has advanced toward production-oriented applications involving capital reserve consumption and risk-weighted assets. That progression from experimentation toward implementation is exactly the outcome we are working to create. In high-value materials, we continue building on our work in quantum material simulation and on the domain expertise generated through those efforts.