Subodh Kulkarni : Certainly. Thanks David, for the question. One thing that has certainly boosted my confidence and our team’s confidence here is the internal deployment of our Ankaa-1 chip. When we talked last more than a month ago, we had not done that. In the month of March, we have successfully deployed our Ankaa-1 chip, which is brand new architecture of a square lattice and tunable couplers. And it is exactly doing what we expected it to do. I mean, we are seeing a significantly better MEDIAN 2-Q FIDELITY, as well as significantly faster gauge speeds. We have some challenges still left to work on in other metrics areas, and we obviously want to continue to improve fidelity and gauge speeds from where we are. But the fact that our first out of-the-gate, brand new architecture is working exactly as planned, and getting us in the right direction has certainly boosted my and our team’s confidence. Hopefully that answers your question.
David Williams : That’s very great color. Thanks so much for that. And then maybe just on the philosophy, clearly you have made some structural changes, I think in the spend. But I think just it’d be great to hear your philosophy and how you’re thinking about the roadmap? And then maybe just if you could touch on the employee morale, just kind of given some the structural changes that have been made within these four years?
Subodh Kulkarni : Yeah, again good question. The employee morale does tie with technical performance as you can imagine. Most of our employees are technical employees. And all of them are seeing the performance that I just reported, which is Ankaa-1 is internally deployed. We are getting better Median 2-Q Fidelities and our Aspen system and faster gates, and all our employees see that. That certainly excites employees, because they see the goal is getting closer and more visible now. As we continue to improve fidelity that will only continue to improve. Regarding your question about roadmap, as I stated, and simply put, right now, we want to focus on fidelity. We want to stay at 84-qubit with our Ankaa-1 chip and continue to improve fidelity to get to 98% Median 2-Q Fidelity by the end of this year, get to 99% sometime next year.
Once we get there, then tile four Ankaa chips to get us the 336-qubit Lyra system, we feel pretty good about our ability to scale, because we have already done that once with our 40-qubit chip. We know exactly what is involved in tiling chips and making them communicate across each other. So we have to repeat that obviously with our 84-qubit chip. But once we get our fidelity to 99%, we think that is the right time to take on that challenge, and through that we can tile four 84-qubit chip into 336 without losing any performance. So roadmap simply is, we have already deployed Ankaa-1 internally. Now the roadmap is to continue to improve the fidelity to get it to 98% by the end of this year, 99% sometime next year, and then tile four Ankaa to get Lyra 336-qubit.
In parallel, we’ll continue to develop our software stack. We have already published some papers to show what kind of potential benefits one can see with QPUs, we’ll continue to work more in that area. And the overall goal obviously, as I said in my statement is to demonstrate narrow quantum advantage, which is significantly better performance or cost compared to classical computers in the next two to three years. So that is the overriding goal right now is to get NQA in the next two to three years.
David Williams : Really great color. And thanks for the clarity there. And maybe just one last one for Jeff, if you kind of think about I guess on the OpEx side, you’ve given a target where you expect your cash balance to be. But can you give us kind of how we should be thinking about OpEx and how that trends, just given some of the restructurings already taking place?
Jeff Bertelsen : Yeah, I mean, great question. I mean, in terms of forward-looking guidance, I think this year, we’re really going to be focused mainly on our year-end cash balance. Obviously, as I’m sure, you know, when we reduced headcount by 50 people, there’ll be certainly be some savings there from the restructuring effort. And also we intend certainly to focus on our expense management and try to reduce expenses wherever possible without impacting our technology roadmap and those plans. But in terms of the forward-looking number, we’re mainly focused on our year-end cash balance range that we gave today.
David Williams : Okay, very helpful. Thanks again. Certainly appreciate it. And best of luck on the quarter.
Subodh Kulkarni : Thank you, David.
Operator: Thank you. One moment, please. Our next question comes from the line of Quinn Bolton with Needham & Company. Your line is open.
Quinn Bolton: Hey, guys. Congratulations on the fourth quarter revenue. I guess, Jeff, you just sort of touched on managing 2023 to that year-ending cash balance. But I guess, could you give us any sort of sense, revenue, do you think that could grow in 2023? I know, it’s going to be lumpy around contract signings and milestone achievements. But with the change in strategy, does that change any of the milestones in previously signed contracts? And then also CapEx, I think you said, is $22.7 million in 2023. Can you give us some sense, what the CapEx might be in your initial plan for the year, understanding that things may change through the year, and you’re going to try to keep that cash and ending balance at $65 million to $75 million? But any thoughts you might have on CapEx would be helpful?
Jeff Bertelsen : Sure. I mean, I don’t know that, given again where we’re at in our evolution and our focus is on the technology roadmap. At the same time, Subodh did touch on partnerships. I don’t know that as of today structurally anything will change significantly with our revenue one way or the other. Obviously, we’re focused on it, and it’s an important source of cash. So we’ll continue to keep eyes on that and try to grow it wherever possible. In terms of CapEx, we did invest $22.7 million in CapEx last year. CapEx certainly is a key for us with our fab operation. Just given the restructuring that we did and the focus on cash, we would expect to see some reduction in CapEx. I think that’s fair. But we haven’t put — we’re not going to put a specific number on it from a guidance perspective. But I think in general, with our focus on cash, having fewer people, directionally that’s what I’d expect to see.
Quinn Bolton: Got it. And I guess, just as you think about the technology roadmap now really prioritizing, improving gate fidelities, do you have some flexibility in either OpEx or CapEx to the extent that revenue does decline — or how much — I guess how much flexibility do you have to managing to that $65 million to $75 million number to the extent you see fluctuations in the revenue line?
Jeff Bertelsen : I mean, certainly, we did — for the full year, we did $13 million in revenue. But so certainly I think if there’s any fluctuation, we certainly have the cash resources and the bandwidth to cover it. Again, our forecast is for $65 million to $75 million in revenue. So I think right now we’re definitely amply funded to derive our goals and objectives for this year. I don’t know, Subodh, if you would add anything?
Subodh Kulkarni : Yeah. I was going to add some color to it, Jeff. So Quinn, I mean, as Jeff just said, and I mentioned in my statements, our focus will be on technical performance, particularly fidelity. Obviously, as Jeff said, if we can get more sales from our existing partners, like the DoE labs or the DoD labs, we will welcome that because that’s very good cash. But my overriding focus for the technical team is let’s — so long as the revenues come consistent with our overall technology goals, those are great revenues. And we will obviously pursue them. However, if the revenues come with strings attached, which are taking us away from our technology goals, so for instance, if somebody from the DoE lab or some other commercial partner comes and wants us to do something that takes us away from employing fidelity, we will say no to those revenues.
Because we don’t want to chase revenues at this point. These are all research contracts. We really want to get our fidelities up. We are playing this game for the long term. We believe getting fidelity up is the most critical thing. Once we get there, then we can tile and get the scale up. So yes, revenues are important. And we will obviously maximize as much as possible, so long as they are consistent with our overall technology goal. Hope that answers that question.
