Xanadu Quantum Technologies Limited Class B Subordinate Voting Shares Q1 Earnings Call Highlights

Key Points

• Xanadu used its first quarterly earnings call after going public to highlight its long-term goal of building a scalable, fault-tolerant photonic quantum computer and a quantum data center by 2029 to 2030. Management said the $302 million from its business combination, plus potential government funding, should help fund that roadmap.
• The company said its Aurora system demonstrated modular, networked photonic computing, and it is now focused on reducing optical loss and scaling toward a “qubit factory” in 2026 to 2027 and fault-tolerant operations by 2028.
• Financial results showed revenue rose to CAD 2.8 million from CAD 700,000 a year earlier, largely from DARPA-related work, while adjusted EBITDA loss widened to CAD 13.9 million. Xanadu also said its PennyLane software platform remains central to commercialization efforts, with more than 35,000 active users and multiple possible future revenue streams under review.

Xanadu Quantum Technologies Limited Class B Subordinate Voting Shares NASDAQ: XNDU used its inaugural quarterly earnings call to outline its post-listing financial position, technology roadmap and commercialization strategy, with management emphasizing that the company remains focused on building a scalable, fault-tolerant photonic quantum computer.

Founder and Chief Executive Officer Dr. Christian Weedbrook said Xanadu’s March 27 public listing on Nasdaq and the Toronto Stock Exchange under the ticker XNDU marked “more than a capital event,” describing it as a signal that photonic quantum computing is moving from experimental research toward scaling and engineering execution.

The company completed its business combination with Crane Harbor Acquisition Corp., generating $302 million in gross proceeds. Weedbrook said those proceeds, together with anticipated Canadian and Ontario government funding currently under negotiation, are intended to accelerate Xanadu’s path toward building a quantum data center in the 2029 to 2030 timeframe.

Management Highlights Photonic Roadmap

Weedbrook described Xanadu as a full-stack quantum computing company that develops both photonic hardware and software. He said the company’s approach, which uses photons, offers several advantages, including modular networking, use of existing semiconductor and photonic supply chains, room-temperature computation after initialization, flexible error correction and high gate speeds.

According to Weedbrook, Xanadu’s Aurora system, which was demonstrated in Nature, is the “world’s first modular, scalable, and networked photonic quantum computer.” He said the system featured 12 logical qubits across 35 photonic chips and 13 kilometers of fiber optics, operating at room temperature with real-time error correction decoding.

Weedbrook said the company has “put the networking challenge behind us” and is now focused on improving the performance of its photonic chips by reducing optical loss. He said Xanadu reduced optical loss by 60% year over year in 2025 and is targeting a “qubit factory” in 2026 to 2027, fault-tolerant operations by 2028 and a quantum data center in 2029 to 2030. The company is also aiming to scale toward up to 500 logical qubits in the 2029 to 2030 period.

PennyLane Remains Central to Software Strategy

Weedbrook also highlighted PennyLane, Xanadu’s open-source quantum software platform, as a key part of the company’s long-term strategy. He said PennyLane is used by developers, researchers and enterprises to access and explore quantum computing and prepare for future fault-tolerant hardware.

As of the company’s Analyst Day, Weedbrook said PennyLane had more than 35,000 active users and 200,000 monthly downloads. He also pointed to 150 university partners, including the University of Toronto, Johns Hopkins University and the University of Maryland.

During the question-and-answer session, Weedbrook said PennyLane and IBM’s Qiskit are among the top quantum software platforms. He described PennyLane as highly hardware-agnostic, while characterizing Qiskit as predominantly tied to IBM’s superconducting qubit ecosystem, though available on some other platforms.

Revenue Rises on DARPA Participation

Chief Financial Officer Michael Trzupek said Xanadu ended the quarter with CAD 272 million in cash. He said the company’s capital base gives it flexibility to pursue both technical and commercial priorities, while noting that anticipated Canadian government funding would not appear on the balance sheet upfront and would instead be received over time as qualifying R&D investments occur.

Revenue increased to CAD 2.8 million from CAD 700,000 in the prior-year quarter, primarily due to revenue recognized from Xanadu’s participation in DARPA’s Quantum Benchmarking Initiative Stage B. The company also recognized approximately CAD 5 million of grant income related to the Canadian Quantum Champions Program and other operating income.

Research and development expense rose to approximately CAD 17 million from CAD 10 million a year earlier, reflecting investments in engineering talent, wafer iterations with foundry partners and process development. General and administrative expense was approximately CAD 10 million, including about CAD 5.5 million of non-recurring costs tied to the SPAC transaction and public listings.

Adjusted EBITDA loss was CAD 13.9 million, compared with a loss of CAD 10.6 million in the prior-year quarter. Trzupek said spending is expected to increase in subsequent quarters as the company adds engineering talent and accelerates investment in wafer and chip production.

Trzupek also said Xanadu plans to establish a CAD 300 million synthetic at-the-market facility. He described the structure as a primary issuance in which proceeds would flow directly to Xanadu’s balance sheet, adding that any capital raised would support development and scaling of the company’s quantum computing platform and roadmap.

As of March 31, Xanadu had 298 million shares outstanding, including 255 million Class A shares and 43 million Class B shares. Trzupek said more than 250 million issued shares are held by legacy Xanadu shareholders and remain subject to 180-day lock-up provisions connected to the SPAC transaction, meaning they will not be freely tradable until September.

Partnerships and Government Funding in Focus

Weedbrook said Xanadu announced new partnerships during the quarter with AMD, Lockheed Martin, TELUS and Fidelity Center for Applied Technology. He said those partnerships expand work across defense, finance and telecommunications and build on earlier partnerships with Mitsubishi Chemical, Rolls-Royce, Riverlane, Corning and Applied Materials.

With AMD, Weedbrook said Xanadu is advancing hybrid quantum-classical computing for aerospace and engineering simulations using GPUs to run 20-qubit, 35 million-gate quantum computational fluid dynamics simulations, accelerating workflows by 25 times compared with CPUs.

Management also discussed negotiations with the governments of Canada and Ontario for funding tied to Project OPTIMISM, which Weedbrook said is intended to support advanced semiconductor and photonic manufacturing infrastructure for Canada’s quantum supply chain. He said the company was not yet able to provide milestones for the program because negotiations remain ongoing, but said the program aligns with Xanadu’s broader roadmap.

Analysts Press on Loss Reduction, DARPA and Monetization

Analysts asked management about the path to reducing optical loss, the timing of DARPA Stage C decisions and potential monetization of PennyLane. Weedbrook said optical loss reduction depends heavily on repeated chip runs, which can take two to five months, as well as improvements in areas such as fiber-to-chip coupling. He said Xanadu works with multiple foundries and materials, including silicon nitride and lithium niobate.

On DARPA, Weedbrook said Stage B is a year-long phase and that the company expects to know more toward the end of the year, with Xanadu’s year up around November. He said the team still has several months of deliverables remaining.

Asked about PennyLane monetization, Weedbrook said the company is evaluating commercialization options for the open-source platform and told investors to “stay tuned.” Trzupek said potential future revenue models include quantum computing as a service, enterprise-grade PennyLane software, on-premise system sales, IP licensing of photonic subsystems and monetization of strategic partnerships.

About Xanadu Quantum Technologies Limited Class B Subordinate Voting Shares NASDAQ: XNDU

Xanadu Quantum Technologies Limited is a quantum computing company headquartered in Toronto, Canada, that develops photonics-based quantum hardware and software. The company focuses on building programmable photonic quantum processors that use light rather than superconducting qubits, and it provides cloud-based access to its systems for researchers and commercial users. Xanadu is publicly listed under the ticker XNDU on both Nasdaq and the Toronto Stock Exchange.

Its technology stack combines integrated photonic hardware, control systems, and software designed to support quantum algorithms and applications in areas such as optimization, simulation, and quantum machine learning.

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