Infleqtion, Inc.

The following discussion and analysis of the financial condition and results of operations of Infleqtion, Inc. (and its predecessor operations, ColdQuanta, Inc. (d/b/a Infleqtion) (“Legacy Infleqtion”), collectively referred to as the “Company,” “we,”“us,” or “our”) should be read together with our unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended December 31, 2025, included in the Current Report on Form 8-K/A, which has been filed with the Securities and Exchange Commission (“SEC”) on March 31, 2026. This discussion contains forward-looking statements, which are subject to a number of risks and uncertainties, including those discussed in the “Risk Factors” and “Special Note Regarding Forward-Looking Statements” sections of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2025.

Overview

Our vision is to harness the power of quantum to expand human potential.

We are developing and commercializing quantum technology products as part of a full-stack platform, which currently includes offerings such as quantum sensing, quantum computing and software. Our quantum-enabled solutions are focused on addressing the world’s most pressing challenges, with technologies actively deployed across a number of sectors today, including defense and security, artificial intelligence (“AI”), energy optimization, space and frontier, materials discovery and cybersecurity. Our approach is grounded in an integrated quantum technology platform, from foundational technology to advanced hardware and proprietary software, all built on neutral atoms, nature’s ideal qubits, which enable an adaptable, scalable and high-fidelity path to quantum advantage across multiple applications.

Today, our high-performance quantum clocks and quantum radio frequency (“RF”) sensors are already delivering quantum advantage, such as sensing the world with superior precision relative to classical state-of-the-art systems and unlocking new classes of national security and commercial applications. We are also pioneering the development of next-generation quantum inertial and gravimetric sensors for navigation in GPS-denied environments, including in space and underwater, subterranean exploration and mapping, and earth science and climate monitoring. Our sensing products are designed to function outside laboratory settings and are targeted for real-world deployment. These products are complemented by our flagship quantum computing system, Sqale, a room-temperature quantum computer with demonstrated high fidelity (99.73% controlled-Z (“CZ”) gate), the industry’s largest neutral atom array outside of a research institution. As of June 30, 2026, the Company has achieved 12 logical qubits. Our quantum sensors and computers are supported by our proprietary software. Our software applications enable customers to develop and execute optimization and quantum computing workloads using quantum and classical computing hardware. Superstaq, which serves as a control panel for future hybrid quantum-classical workflows, compiles and optimizes quantum circuits for multiple quantum computing modalities. Superstaq is currently deployed with a limited number of customers using third-party quantum computing hardware platforms, including platforms not based on neutral atom architectures such as our Sqale processor. In addition, we sell contextual machine learning (“CML”) software, based on quantum physics principles, which provides AI software running on classical graphics processing units (“GPUs”).

We work with a diverse set of customers and strategic partners globally, serving organizations in national security, critical national infrastructure, scientific discovery and advanced computing sectors. Our partners and customers include the U.S. Department of Defense, Defense Advanced Research Projects Agency (“DARPA”), NASA, Lockheed Martin, NVIDIA, Science Applications International Corp, Safran Electronics & Defense (“Safran”) and the U.K. National Quantum Computing Centre. We generate revenue today through multiple channels and are scaling a global pipeline of strategic engagements.

We operate our business as a single operating and reportable segment. This determination is based on how the chief operating decision maker (“CODM”), our Chief Executive Officer, manages the business for the purpose of assessing performance and resource allocation.

Recent Developments

Business Combination

On February 13, 2026 (the “Closing”), the business combination (“Business Combination”) between Churchill Capital Corp X (“CCX”) and Legacy Infleqtion was consummated pursuant to the definitive agreement and plan of merger and reorganization (the “Merger Agreement”), dated September 8, 2025. In connection with the closing of the Business Combination (the “Closing”), CCX changed its name to Infleqtion, Inc. Refer to Note 3 - Business Combination to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further discussion of the Business Combination.

At the Closing, each issued and outstanding share of Legacy Infleqtion common stock, preferred stock and restricted stock was automatically surrendered and exchanged for the right to receive shares of CCX common stock, par value $0.0001 per share, based on a defined exchange ratio (the “Exchange Ratio”) of approximately 0.34740312, representing shares of the Company’s Common Stock after the Closing.

Immediately following the Business Combination, there were 216,471,927 shares of the Company’s Common Stock and 10,424,967 warrants outstanding. The warrants represent CCX warrants that became warrants of the Company, exercisable for shares of the Company’s Common Stock, upon the Closing of the Business Combination.

Our Common Stock and warrants commenced trading on the New York Stock Exchange under the symbols “INFQ” and “INFQ WS”, respectively, on February 17, 2026.

In connection with the Closing, CCX delivered approximately $528.2 million of gross transaction proceeds to Infleqtion, consisting of $401.6 million of proceeds from the trust account and operating cash accounts and $126.5 million of proceeds from a previously announced private investment in public equity (the “PIPE Investment”). The PIPE Investment was completed pursuant to subscription agreements entered into on September 8, 2025, under which the Company issued an aggregate of 12,654,760 shares of common stock at a value of $10.00 per share. Total direct and incremental transaction costs incurred by Legacy Infleqtion and recognized as a reduction of additional paid in capital were approximately $9.3 million of which $1.8 million were paid at the Closing and the remaining $7.5 million were previously incurred and capitalized as deferred offering costs. Certain other costs in the amount of $11.5 million, associated with the Business Combination, did not qualify for capitalization and were expensed as selling, general and administrative expenses in the condensed consolidated statement of operations and comprehensive loss during the three months ended March 31, 2026. Of this amount, $10.7 million was paid at the Closing.

In addition, in connection with the Business Combination, holders of 37,821 CCX Class A ordinary shares exercised their redemption rights, representing approximately 0.09% of the outstanding CCX Class A ordinary shares, resulting in approximately $0.4 million being removed from the trust account.

Although CCX is the legal acquirer in the Business Combination, for financial reporting purposes under U.S. generally accepted accounting principles (“GAAP”), Legacy Infleqtion was the accounting acquirer and CCX was treated as the acquired company. Accordingly, the Business Combination was accounted for as a reverse recapitalization.

At the Closing, Legacy Infleqtion became the accounting acquirer and the successor registrant with the SEC. Accordingly, Legacy Infleqtion’s historical financial statements are presented for all periods in periodic reports filed with the SEC.

Public Company Costs

As a result of the Business Combination, we became a publicly traded company and are subject to ongoing public company reporting, governance and compliance requirements. Accordingly, we expect to incur increased ongoing costs related to public company regulatory requirements and customary practices, including additional personnel, stock-based compensation due to a broader mix of equity-based compensation awards, directors’ and officers’ liability insurance, director compensation, costs associated with implementing and maintaining an effective system of internal control over financial reporting and compliance with the Sarbanes-Oxley Act, and additional internal and external accounting, legal and administrative resources, including increased audit and legal fees. These costs are expected to continue in future periods.

Contract Awards

In August 2026, we announced a customer relationship with Eaton, a global power management industry leader reshaping next-generation power infrastructure for AI. Through private-cloud access to Sqale, our Superstaq compiler, and our quantum software capabilities, Eaton is exploring how quantum computing can be applied to difficult energy problems alongside its work in classical AI.

In July 2026, the Department of Energy selected Infleqtion for three Genesis Mission projects across computing and sensing. Those projects bring our capabilities together with government and commercial partners working across nuclear science, fusion, and power systems.

In July 2026, we announced a signed contract to deploy a fault-tolerant neutral-atom quantum computer at the Illinois Quantum & Microelectronics Park (“IQMP”), with delivery planned in 2027. The system initially targets 50 logical qubits with a roadmap to 100 logical qubits via modular upgrades. The system is based on Infleqtion's Sqale platform, which is already delivering workloads at customer sites. The system is also designed to support hybrid classical-quantum workloads through NVIDIA's NVQLink integration. As part of this initiative, we also established our Chicago Quantum Innovation Center to advance quantum application development and deepen collaboration with industry, government, and academic partners within the Illinois quantum ecosystem.

In February 2026, DARPA awarded us a $2.0 million contract through the Heterogeneous Architectures for Quantum (“HARQ”) program. The award supports the Company’s development of Multistaq, a next-generation platform designed for heterogeneous quantum systems composed of multiple qubit modalities. These heterogeneous quantum systems have the potential to accelerate scientific discovery, enhance national security decision-making, and support the development of more efficient energy, materials, and infrastructure solutions. We were selected to contribute to Technical Area 1, which focuses on breakthrough quantum circuit compilers that maximize the capabilities of heterogeneous qubit platforms. Multistaq builds on the principles behind our industry-leading Superstaq multimodal compiler, implementing cross-modality and cross-layer optimization techniques to support next-generation quantum architectures.

In February 2026, the U.S. Navy awarded us a $1.0 million Phase II contract to advance our Quantum-Inspired Rapid Context (“QuIRC”) machine learning software platform for RF signal processing. This AI application is powered by our patent-pending GPU-hosted CML technology, which applies quantum principles across machine learning models to capture contextual correlations across large datasets while significantly reducing computational and storage requirements. The Phase II award builds on a successful Phase I feasibility demonstration and will expand the effort to develop an integrated prototype for testing and evaluation in operationally relevant Navy environments.

In January 2026, we were awarded a $5.3 million cost-sharing agreement with the U.S. Department of Energy’s Advanced Research Projects Agency-Energy (“ARPA-E”). The Enhancing Neutral-atom Computers for Optimizing Delivery of Energy (“ENCODE”) program intends to optimize energy distribution and utilization across the nation’s electricity grid by developing and validating next-generation computational techniques that employ neutral atom quantum hardware. Via ENCODE, we will advance and upgrade its neutral atom quantum computer hardware and software stack to focus squarely on an end-to-end quantum solution.

Strategic Partnerships

During the quarter, the Company completed a strategic equity investment of approximately $3.0 million in Oratomic, a privately held startup focused on neutral atom quantum computing. Oratomic is a customer of Infleqtion's Quantum Cores products. The investment is intended to strengthen the Company's strategic position and support potential technological and commercial collaboration in the future, however, no collaborative agreements currently exist. The investment does not change the Company's current operating strategy and is not expected to have a material impact on near-term operating results.

In April 2026, we announced an integration of our Sqale neutral atom quantum computer and NVIDIA Ising models for calibration and decoding. This milestone marks continued progress on our mission to achieve high counts of logical qubits for commercial applications through tight integration with classical computing, as well as improving quantity and quality of our neutral-atom qubits and gates.

In December 2025, we announced our strategic partnership with Safran to advance quantum-enabled precision timing solutions for critical global infrastructure. Integrating our Tiqker quantum optical clock technology with Safran’s trusted synchronization systems enables a GPS-independent timing architecture designed to withstand the most challenging environments. Through this partnership, we are advancing quantum innovation to transform mission-critical operations across defense, aerospace and telecommunications, establishing a new benchmark for secure, resilient, and ultra-precise timing capabilities.

In November 2025, we announced our strategic partnership with Voyager Technologies, Inc. to advance dual-use quantum technology in low-Earth orbit and beyond. The collaboration marks a major milestone in the growing convergence of the quantum and aerospace industries. Through this partnership, we are unlocking a completely new class of dual-use capabilities with quantum timing, sensing and computing in space, strengthening the backbone of next-generation space infrastructure and ensuring mission continuity in increasingly contested domains.

In October 2025, we announced a groundbreaking partnership with NVIDIA to deploy a NVQLink-enabled quantum supercomputing system at the Illinois Quantum & Microelectronics Park. Through this partnership, we are integrating our Sqale quantum computers with NVIDIA’s GPU-accelerated systems via NVQLink, creating a unified architecture that enables real-time hybrid quantum–classical computing. This collaboration unlocks new possibilities in materials science, clean energy, secure communications and artificial intelligence, while addressing critical scalability challenges for quantum computing.

In June 2025, we announced a new go-to-market partnership with SAIC, a leading mission integrator that provides advanced technology solutions to solve and support mission-critical needs across military, intelligence and government agencies. Through this partnership, we are expanding the deployment of quantum sensing technologies, including atomic clocks, quantum RF communication and inertial sensing, into defense and aerospace applications.

The Company expects that these strategic partnerships will support future growth by expanding market access, enabling joint development opportunities, and accelerating elements of its product and technology roadmaps. While certain partnerships may create opportunities to generate revenue or enhance commercialization pathways, the timing and ultimate financial impact on the Company’s results of operations, including revenue and gross profit, remain subject to a variety of factors, including customer adoption, program execution and market conditions.

Trends and Key Factors Affecting Performance

Our business has demonstrated continued top-line growth, with revenue increasing to $23.4 million for the six months ended June 30, 2026, compared to $13.5 million for the six months ended June 30, 2025. In February 2026, as discussed above under ‘Business Combination’, the Company completed the Business Combination, which materially strengthened its liquidity position and enhanced its ability to scale operations and support its long-term growth strategy as a public company. Prior private capital raises, including the Company’s Series C convertible redeemable preferred stock financing, supported investment in scaling its quantum computing, sensing, and precision timing platforms and accelerating deployment of field-ready solutions. Management believes the Company’s current capital base enhances our ability to advance product innovation and pursue additional market opportunities, supporting our long-term growth strategy. The following discussion highlights key trends and factors affecting our performance.

Technology Milestones

Many of our contracts with customers are dependent on our ability to demonstrate the technological feasibility of our products and services, as well as research and development of technology for quantum hardware and software, and materials science applications. These milestones include demonstrating materials science applications for high-fidelity quantum simulations, released CML capabilities to optimize hybrid quantum-classical workflows and expanding our portfolio of deployable Tiqker optical clocks for military and enterprise customers. We risk the potential that our technology may become obsolete, as advancements in quantum technologies occur rapidly, necessitating additional investments. Additionally, integrating new technologies into our existing capabilities creates additional risks, such as compatibility with existing systems. Our business depends on our ability to achieve technological milestones while effectively managing risks associated with technological obsolescence, integration of new technologies, cybersecurity threats and our ability to attract and retain qualified technical personnel.

Government Funding

A significant portion of our business is conducted with various governments, including agencies of the U.S., U.K., Australian and Japanese governments. Changes in government spending levels and the timely funding thereof could impact our financial performance. The long-term outlook for our business is influenced by government funding priorities, the diversity of our programs and customers, and our ability to evolve our products and services and successfully execute on our contracts. Strong international demand for our products and services presents opportunities for our business, particularly in the U.K.

During the six months ended June 30, 2026, approximately 74%, 6%, and 3% of total revenue was derived from customers associated with the U.S., U.K. and Australian governments, respectively, compared to approximately 40%, 29%, and 6%, respectively, for the six months ended June 30, 2025. Government contracts are subject to periodic expiration and renewal in the ordinary course of business. The expiration of certain U.K. government contracts resulted in a decrease in revenue, which was more than offset by increased revenue from U.S. government contracts, resulting in a $10.0 million net increase in total revenue during the six months ended June 30, 2026.

Our government contracts typically involve defined phases or fixed terms, and it is common for individual contracts to expire as programs conclude or transition to new phases or follow-on arrangements. Accordingly, our ability to grow revenue in future periods will depend, in part, on our success in securing new government contracts and follow-on awards to replace or expand upon expiring programs.

Partnership Opportunities

Our future growth depends in part on our ability to successfully identify and enter into strategic partnership opportunities. We have historically entered into partnerships with major technology companies and academic organizations to enhance our capabilities through access to intellectual property, improve operational efficiencies, increase supply chain resilience and expand our addressable market. We expect we will continue to explore and enter new academic and commercial partnership opportunities that we believe are complementary to our business.

Impact of the Macroeconomic Climate on Our Business Inflationary factors, interest rates and overhead costs may adversely affect our operating results.

High interest and inflation rates also present a challenge impacting the U.S. economy and could make it more difficult for us to obtain traditional financing on acceptable terms, if at all, in the future. These inflationary effects may be exacerbated by new tariffs and evolving trade policy. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience increases in the future on our operating costs, including due to supply chain constraints, consequences associated with bank failures, trade wars and the effect of recently heightened, scheduled, and threatened tariffs by the U.S. or its trading partners, geopolitical tensions in and around Ukraine, Israel, Iran and other areas of the world, and employee availability and wage increases, which may result in additional stress on our working capital resources.

Components of Results of Operations

Revenue

Our revenue is primarily derived from governmental contracts with the U.S. and allied government agencies and commercial contracts with research institutes and private companies primarily in the U.S. and Europe.

Product revenue

Product revenue from governmental contracts is primarily derived from development projects resulting in product prototypes or projects to custom engineer a completed product to the customer’s specifications. Product revenue from commercial contracts is derived from the sale of products to commercial customers, primarily from selling Tiqker for position navigation and timing (“PNT”) use cases. Revenues under governmental contracts are generally recognized over time as we satisfy our performance obligations based on the extent of progress towards contract completion and product revenue under commercial contracts is generally recognized at a point in time when we satisfy our performance obligations and control of the product transfers to the customer.

Service revenue

Service revenue is derived primarily from governmental contract revenue for research-related projects and commercial service revenue.

Other revenue

Other revenue is comprised primarily of other award revenue.

Cost of revenue

Cost of products

Cost of products primarily consists of labor, including direct labor, third-party specialist subcontractors and stock-based compensation, materials and equipment costs related to delivering our products, warranty expenses and an allocation of information technology costs, occupancy costs, and depreciation and amortization expense. Cost of products is recorded when the control of products is transferred to the customer.

Cost of services

Cost of services primarily consists of labor, including direct labor, third-party specialist subcontractors and stock-based compensation, materials and equipment costs related to delivering our services, and an allocation of information technology costs, occupancy costs, and depreciation and amortization expense. Cost of services is recorded as services are performed.

Research and development expenses primarily consist of personnel-related costs, including salaries, benefits and stock-based compensation, costs of materials, costs of consultants and allocated facility costs associated with the research, engineering, design and development of our quantum computing technologies.

Selling, general and administrative expenses primarily consist of personnel-related costs, including salaries, benefits and stock-based compensation, for employees performing bid, proposal, marketing and sales functions, for executive leadership and employees in legal, finance, accounting, and human resources, changes in contingent obligation, information technology and other administrative functions as well as allocated facility and consulting costs.

Grant income

Grant income includes income recognized from government grants, that are not accounted for as revenue from contracts with customers under ASC 606.

Interest income

Interest income consists primarily of interest earned on interest-bearing cash deposits and money market funds. We also earn interest on available-for-sale securities, including investments in short- and long-term corporate debt securities and U.S. Treasury securities.

Other, net

Other, net consists primarily of income from refundable research and development tax credits, interest expense related to borrowings and gains or losses resulting from fluctuations in exchange rates during the reporting period on unsettled transactions and outstanding balances with foreign subsidiaries, vendors or customers, and adjustments to investments in equity securities without readily determinable fair values, including impairment charges and changes resulting from observable transactions. Our exposure to foreign currency risk reflects our international operations and contracts, which are subject to changes in currency values.

Income tax expense (benefit)

Income tax expense (benefit) consists of income taxes related to federal, state and foreign jurisdictions in which we conduct business.