Xanadu Quantum Technologies Limited Class B Subordinate Voting Shares 2026 Q2 Earnings Call

Please proceed. Thank you, good afternoon, everyone.

Welcome to Xanadu's second quarter earnings conference call. Joining me today are Dr. Christian Weedbrook, Founder and Chief Executive Officer, Michael Trzupek, Chief Financial Officer, and Rafal Janik, our Chief Operating Officer. This call is being webcast live and will be made available on Xanadu's investor relations website. This call contains time-sensitive information accurate only as of the date of this live webcast on this call, August 5th, 2026. This call may include forward-looking statements and information which are based on current expectations. These statements and information are subject to significant risks and uncertainties. Actual results may differ materially from the conclusions, forecasts, and projections in the forward-looking statements and information. Certain material factors and assumptions were applied in drawing the conclusions and making the forecasts and projections reflected in the forward-looking statements and information.

These risks, factors, and assumptions are discussed in our periodic filings with the SEC and applicable Canadian securities regulators, including our most recent quarterly and annual reports, and should be reviewed by anyone considering an investment in our securities. Management disclaims any obligation to update these forward-looking statements and information except as required by law. Now I'd like to turn the call over to Dr. Christian Weedbrook, Founder and CEO of Xanadu.

Christian? Thank you, Brett, good afternoon, everyone.

At Xanadu, every decision we make is guided by a single mission: to build quantum computers that are useful and available to people everywhere. That means building a fault-tolerant quantum computer that can solve real-world problems. It's been an eventful few months, with steady progress on the technology, partnership, and fundraising fronts. I'll walk you through where things stand on our hardware, our software, and our partnerships, and then Michael will take you through the financials. On the hardware side, we made further progress on optical loss. This is one of the most important engineering challenges in photonic quantum computing and a critical driver of system performance on the path to fault tolerance. Specifically, this quarter brought a new milestone in ultra-low-loss photonic chip packaging, an average edge coupling loss of just 0.085 dB per facet.

That's a meaningful step forward in our ability to deliver high-efficient, scalable quantum hardware. That's the product of several things coming together at once. Our internal advanced photonic chip packaging facility, which we brought online last year, a close collaboration with Corning on customized fiber and fiber array solutions, and with DISCO on wafer singulation. Behind that packaging work, we accelerated the pace of fabrication itself. Working alongside our foundry partners, we increased fabrication runs on our two core material platforms, thin-film lithium niobate, up roughly 75%, and silicon nitride, up roughly 50%. Higher tapeouts volume means we can iterate faster on the chip designs that feed directly into our qubit factory development and improve fabrication processes more quickly. At the same time, we continue investing in the infrastructure that will accelerate our development.

In July, we announced a significant expansion of our U.S. operations, anchored by our growing presence in Albany, N.Y. Albany has become a real hub for quantum computing and semiconductor research, giving us a strategic base close to key partners and closer collaboration across teams. This is part of a broader U.S. build-out. Our workforce here has grown more than fivefold since 2023. We expect that headcount to grow significantly again by year-end. Albany also gives us direct access to established U.S. semiconductor and photonics supply chains. That's a real advantage of our photonic approach, and we believe it will help accelerate both our R&D and manufacturing timelines. On the software side, we continue finding ways to improve efficiency within the quantum computing stack.

Our research team published an algorithmic breakthrough in quantum read-only memory, or QROM, the common subroutine found across algorithms that loads classical data onto a quantum computer, and it's a bottleneck that has not seen meaningful improvement in about seven years. By replacing iterative qubit swapping with more efficient copying methods and cutting unnecessary data unlocking steps, our approach cuts the Toffoli gate operations needed by roughly half, making quantum algorithms more efficient today or reducing the resource requirements on the fault-tolerant hardware of tomorrow. This breakthrough is protected by a patent filing as proprietary Xanadu IP. It's available today inside PennyLane. We're also pushing the boundaries of quantum machine learning. Our team published new work using Fourier-based methods to train a quantum model with over one million parameters.

It's large enough to accurately learn the distribution of ribosomal RNA and serves as an example of quantum techniques scaling the problems of real scientific interest. We ship PennyLane version 0.45 and Catalyst version 0.15, which together make it easier for our users to assemble full quantum algorithms end to end. The foundational PennyLane white paper surpassed 2,000 citations, cementing a new industry standard. Every new researcher and developer who builds on PennyLane deepens both our commercial and our community mode. As we like to say, the people learning and building on PennyLane today are the partners and customers of 2029 and 2030. With Lockheed Martin, we're building on our existing research relationship with a joint initiative in quantum machine learning, tackling a key bottleneck across the industry, talent.

We announced a new effort to scale quantum training through their quantum talent pipeline, giving engineers across the organization access to PennyLane, our educational resources, and dedicated workshops from our team. Together, these are building practical quantum skills for aerospace, defense, and advanced engineering. It's a case study in how a leading organization can build quantum readiness from within. We also deepened our work with Los Alamos National Laboratory, where we're engaged with their 2026 summer school in co-supervising student projects. We've joined the Unitary Fund as a member, formalizing a longstanding collaborative relationship in support of open source quantum software and PennyLane. On the high-performance computing front, we partnered with Oak Ridge National Laboratory to bring PennyLane onto the Frontier exascale supercomputer, one of the most advanced classical computing systems in the world.

We added distributed computing support, our Lightning simulator, enabling multi-node quantum simulation across Frontier's AMD-powered hardware, and ran a hands-on workshop for Oak Ridge Leadership Computing Facility community. We continue to strengthen relationships across our partner ecosystem, renewing several longstanding collaborations while expanding our engagement with the financial services industry. We re-signed a multi-year collaboration with Rolls-Royce focused on quantum algorithms for computational fluid dynamics and aerodynamics to problems that sit at the core of their engineering work. This is a great example of where quantum computing can be transformative, because these are exactly the kinds of challenges that are central to modern aerospace design. We're also seeing growing opportunity in the financial sector. Our ongoing research collaboration with the Fidelity Center for Applied Technology, FCAT, has included jointly published work adapting the hidden subgroup problem for practical data analysis.

Beyond FCAT, we're in advanced stage engagements with several major banks on quantum algorithms, and we continue to scout actively across the sector for high-value applications for modeling systematic risk, capturing multi-input correlations with quantum methods. With that, let me hand it to Michael to walk through the financials.

Thanks, Michael. Thanks, Christian. I'll cover our financial position, the capital actions we took this quarter, and our operating results.