Thomas Kramer: Yes, absolutely. So, if you think about what we said about the QuantumBasel deal, these are two systems that will be delivered on-prem in Switzerland. And the customer will be running their jobs there for a period of roughly five years. We will start recognizing revenue on the system part of that itself once first system is up and running until the end of the contract. We will swap out the machine in between. But that is essentially a system deal. We are retaining part of the capacity of those systems, so that we will use it pretty much as a beachhead into Europe. And that is a super exciting deal. And it shows our first series entry into Europe. And also, it shows people actually buying up two future generations of our systems in one go.
So super exciting. We are also very excited about the AFRL deal, but it’s a very different deal. It is for us deliver much smaller systems, which will be network nodes that AFRL can conduct research on network, sorry, quantum networking on. Now once we deliver those nodes to AFRL up in Rome, New York, the entire revenue recognition will be finished. That will take us 18 months to do. And the reason why the revenue recognition is different here is that, it is a different part of the gap rules for recognizing revenue and is based on percentage of complete as opposed to usage. And so, we complete more of the systems, we recognize more of that revenue, and we will finish recognizing all of it when they are up and running in AFRL’s Roam facility, which we anticipate will take 18 months since contract signing.
Operator: [Operator Instructions]. The next question comes from Trevor Janoskie with Goldman Sachs. I’m sorry. Please go ahead.
Trevor Janoskie: Hi. This is Trevor on for Toshiya, and thanks for letting me hop on here. So real quick on your bookings. There was the $25.5 million from Air Force Research Lab, $28 million from Basel for a total of $53.5 million. Could you provide us with some information on the remaining $5 million in bookings? And when would you expect this X systems portion of bookings to accelerate?
Thomas Kramer: I’m sorry. Could you repeat the question? I apologize.
Trevor Janoskie: Can you hear me?
Thomas Kramer: Yes.
Trevor Janoskie: Okay. So, on your bookings where you had $25.5 million with the Air Force Research Lab, $28 million from QuantumBasel for a total of $53.5 million. But your total was $58.5 million. Can you provide us with some more information on the remaining, on that remaining $5 million in bookings? And when would you expect that at systems portion of bookings to really accelerate?
Thomas Kramer: So, I mean, the difference is just that we have other contracts and other sales. We also have a small portion that we can upsell to the — and then I was just a little bit confused, but that hasn’t happened yet, and we will come back to you and tell you when that is. And I mean, it’s not a monumental number, but it would be great. We can point you to the other deal announcements we met made in prior queues, and that should be enable you to just like, add them all up together.
Trevor Janoskie: And a more longer-term question, but in your high-volume manufacturing roadmap, would you be able to quantify how many systems you believe you would be able to build within a year, let’s say 2025 or 2026?
Thomas Kramer: So, we have — that is a great question. It’s also a great problem to have. The reality is that we will be able to expand our facilities so that we can scale to any amount of demand. And we would love to be, have to worry about where can we find enough facility, but we can do that. Right now, we are planning to build a number of machines at our own facilities, but we are also planning to build some machines actually on-prem at the customer’s facilities. The Switzerland machines, for instance, will be built in Switzerland, so.
Trevor Janoskie: Understood, thank you. And just one more for — sorry. Go ahead Peter.
Peter Chapman: Just add one thing though. You should get your orders in early if you would like to get the first off, the line, so to speak. So, we encourage customers to order early.
Trevor Janoskie: Understood. And one more on the quantum networking deal, it seems like, well, and you said it that these systems are different from your actual quantum computers. I guess could you provide some more color on that difference on what the difference is, maybe the how long it takes to manufacture these? Is there an AQ score that you provide for these? What, I guess anything would be helpful?
Peter Chapman: Yeah, they’re kind of — there’s two different purposes. One of them, which is the Forte enterprise and tempo systems. Those ones are people are worried about uptime and they’re looking for as high an AQ number as they can possibly get. And so, they’re building applications with those things. The networking is more on the R&D side, and so, what they’re looking to do is to get quantum computers and then add in their own hardware to be able to do quantum networking. And so sometimes they’re asking for us to make modifications so it’s compatible with their hardware. It is — they don’t care about so much about the number of qubits or the AQ. That’s not really their focus. And they’re more workbench systems. They care more about can we share technical information so that they can figure out how to integrate their hardware in.
So, it’s kind of two different, and as far as uptime concerned, I mean, that’s not really the goal of networking systems in the short term. It’s not really about total uptime. It’s more like, well, can we get the basics to work or can we get it to work over maybe starting at a mile and then over 10 miles and a hundred miles and hopefully eventually thousands of miles. So, it’s much more of a R&D phase than what you see in the other systems, which are really production systems. Obviously, sometime in the future we hope that quantum networking is a thing and it will drive tremendous demand for production systems. Because if you’re going to build a quantum internet, you’re going to need a lot of these things. And but that’s obvious. We’re not selling that yet today.
It’s mostly in R&D. I don’t know if Dean, you would have, so to give you a little bit of color in terms of just the differences between the hardware and the machines, the software stacks can change based off of the customer needs, for example. And so, some of the research customer software stack, we need to tailor to AFRL’s needs. On the hardware side the hardware is a lower qubit system to be able to support the networking. Similar atomic species, they’re both barium systems. It’s like our tempo systems and the systems for AFRL, the optical system design has a lot of leverage from our existing systems. A lot of the mechanical design has carryover. There’s some of the readout and everything is different based off of the needs of our networking.
And so, while there are many common components, there are some distinct pieces, networking being one piece of it, but just part of it is just the needs of the research community versus the needs of a commercial installation.
Trevor Janoskie: Understood. Thank you. And it seems like these quantum networking systems have a high price tag and a quicker rev rec. Could we expect more announcements like this over the next 18 months maybe?
