SEALSQ Corp Ordinary Shares 2026 Q2 Earnings Call

Thank you very much, and good morning in the U.S. and good afternoon in Europe. Welcome to SEALSQ first half 2026 earning call. I am joined today by our Chief Financial Officer, John O'Hara. I will begin with our first half financial and operational highlights, followed by an update on the progress we are making in transforming SEALSQ into a global leader in post-quantum and quantum security. John will then review our financial results in greater detail, after which we will discuss our outlook and priorities for the remaining of 2026 and beyond. The first half of 2026 was an important inflection point for SEALSQ. We delivered strong revenue growth, significantly improved gross margins, and advanced our post-quantum semiconductor roadmap, achieved important certification milestones and integrated acquired businesses and expanded our capability across secure semiconductors, trusted digital infrastructure, and quantum technology.

Revenue increased by 131% to $11.2 million, compared to $4.8 million in the first half of 2025. Gross profit increased by 233% to $5.4 million from $1.6 million, while gross margin expanded to approximately 48%. This growth was driven by renewed demand for our VaultIC secure element, expansion in PKI subscription and digital identity services, initial revenue from Quantix Edge Security in Murcia, Spain, and six months of contribution from IC'Alps. IC'Alps contributed approximately $2.5 million of first half revenue. More importantly, the acquisition substantially strengthened our capabilities and capacities in custom ASIC design, secure semiconductor architecture, and advanced engineering services. These capabilities are increasingly important as customers seek integrated hardware-rooted security solution rather than just a standalone cryptographic software. North America generated $5.6 million of revenue, representing 50% of the total.

Europe and the Middle East and Africa generated $3.7 million or 33%, while Asia-Pacific contributed $1.9 million or 17%. We believe this is the right moment to invest decisively in building a global leadership position in post-quantum and quantum security. The quantum transition is no longer a distant research topic. Governments, defense organizations, critical infrastructure operators, financial institutions, and technology companies increasingly recognize that migration to post-quantum security requires much more than a software update. It requires secure semiconductors, hardware root of trust, quantum-resistant algorithms, trusted identities, security provisioning, certified manufacturing, sovereign infrastructure, and control over the complete technology supply chain. SEALSQ is building capability across all these layers. As of June 30, 2026, we had more than $486 million in cash equivalents, and restricted cash.

This strong liquidity position gives us the flexibility to fund research and development, certification, product industrialization, acquisitions, infrastructure, manufacturing, personalization, and other selected strategic opportunities. Our strategy is to convert SEALSQ from a secure semiconductor and digital trust company into a major quantum security platform, developing a sovereign vertical stack, what we call from root to qubit, and increasingly from root to space. At the center of this transformation is what we call the Quantum Highway. The Quantum Highway is an architecture for security connecting the different layers of the emerging quantum economy. It is designed to combine post-quantum semiconductors, quantum computers, quantum photonics, interconnects, quantum secure communications, satellites, PKI, digital identity, trusted provisioning, artificial intelligence, and compliance. The objective is not simply to invest in separate quantum technology, it is to integrate them into a commercially deployable, sovereign, and interoperable infrastructure.

At the silicon and hardware root of trust layer, our QS7001 secure element and QVault TPM remain central to our post-quantum commercialization strategy. During the first half, QS7001 achieved NIST SP 800-90B entropy secure source validation under ESV Certificate E333. Validated entropy is fundamental to secure key generation and cryptographic protection, particularly for systems operating in regulated defense and critical infrastructure environments. QS7001 also completed important Common Criteria, fault injection, and side channel resistance testing. This milestone brings us closer to the formal certification required by government agencies and major industrial customers before high volume deployments. We also continue advancing QVault TPM customer sampling progress and engineering samples of the post-quantum QVault TPM 185 become available. Our objective is to support the next generation of computers, servers, industrial systems, edge devices, and critical infrastructure with hardware-based protection against both classical and quantum-enabled threats.

As of June 30, more than 150 customers and prospects were engaging with our post-quantum technologies, with over 30 actively evaluating or integrating QS7001 and QVault TPM. We expect initial QS7001 and QVault TPM revenue late in the second half of 2026, with more meaningful contributions beginning in 2027 as customers complete integration, qualification, and product planning. The precise timing remains subject to certification, customer validation, and procurement cycles. Since the end of the first half, we have continued to make significant progress. Our VaultIC408 secure element achieved the FIPS 140-3 validation under the NIST certificate number 5463. This is a major commercial and technology milestone. FIPS 140-3 validation is widely required for cryptographic products used by governments, defense organizations, financial institutions, and operators of critical infrastructure.

The certification has strengthened our ability to address highly regulated markets and confirms that SEALSQ is building its quantum security platform on an already validated and trusted foundation. We also achieved ISO/IEC 27001 recertification, reinforcing the security and governance framework supporting our semiconductors, PKI, digital identity, and post-quantum operations. Our active commercial pipeline exceeded $225 million in potential revenue opportunities through 2029 as of September 9, 2026, including more than $100 million associated with post-quantum projects already. This pipeline expands secure element, custom ASIC, PKI, digital identity, trusted provision, post-quantum semiconductor, and critical infrastructure security. It is a management estimate rather than revenue guidance and remains subject to certification, customer validation, commercial negotiation, procurement decision, and execution risk, but nevertheless, it demonstrates the scale and breadth of the opportunity we are pursuing. We are also developing a strategic relation with major semiconductors and technology companies.

Our work with GlobalFoundries supports the migration of future secure and post-quantum designs to advanced manufacturing platforms. Our collaboration with Lattice Semiconductor supports post-quantum security for FPGA-based systems, while our work with Parrot provides access to important drone, robotics, and sovereign technology applications for defense. We are also advancing major commercial opportunities for QVault TPM, VaultIC409, and our broader post-quantum roadmap, including potential applications in computing, industrial systems, connected devices, and critical infrastructure. Beyond our core semiconductor roadmap, we have accelerated the development of our SEALQuantum Sovereign Vertical Stack and its Quantum Highway architecture. At the semiconductor design layer, IC'Alps provides secure ASIC design and engineering capabilities. At the quantum computing layer, our investment in Quobly and EeroQ provides two differentiated semiconductor-based quantum computer architectures. At the quantum interconnect layer, we completed the acquisition of Miraex SA.

Miraex SA brings quantum photonics interconnect technology that can help connect quantum processors, sensors, data centers, and communication systems. This is an essential component of the Quantum Highway because quantum systems must eventually be interconnected, not operated as isolated machines. As the trusted data and compliance layer, we have increased our ownership in Wecan Group to 55.5%, gaining control of the company. Wecan strengthens our capability in AI power compliance, secure data exchange, trusted digital identity, and post-quantum ready financial infrastructure. At the sovereign design, personalization, and provision layer, Quantix Edge Security in Murcia generated initial first half-year revenue. This is approximately a €40 million initiative, is intended to support Europe-based semiconductor design, personalization, and security provision in one centralized location. We are now evaluating an expanded Quantix 2.0 vision that could bring together additional semiconductor, quantum AI, and satellite capability in Murcia.

In India, we advanced the negotiations to build SEALQuantum initiative, which is intended to create localized post-quantum semiconductor capability and give SEALSQ access to one of the world's fastest-growing semiconductor and digital technology market on which sovereignty is important. At the space and quantum communication layer, our relation with the WISeSat supports the development of post-quantum secure satellite and IoT connectivity and communications. The objective is to extend our hardware root of trust from terrestrial devices to satellite infrastructure, creating root-to-space security architecture.

Together, this capability forms the basis of our Quantum Highway, secure ASIC design and engineering through IC'Alps, hardware root of trust through both VaultIC, QS7001, and QVault TPM, post-quantum PKI, digital identity and secure provisioning, quantum computer technology through Quobly and EeroQ, quantum photonics interconnect through Miraex SA, AI power compliance and trusted data through Wecan, sovereign semiconductor infrastructure through Quantix Edge and SEALQuantum, and post-quantum satellite communication through WISeSat. This is what we mean by SEALQuantum Sovereign Vertical Stack. Control over the essential layers required to generate, protect, process, transmit, and authenticate sensitive data in the quantum era. During 2026, we increased the capital allocation to the SEALQuantum Sovereign Vertical Stack to $200 million. More than $60 million has already been committed across IC'Alps, Miraex SA, Quobly, Quantix Edge, ColibriTD, EeroQ, WISeSat, and Wecan.

We are applying this disciplined investment strategy focused on technologies that complement our semiconductor and security roadmap, create commercial synergies, and can ultimately become integrated component on the Quantum Highway. Our participation as a lead investor in Quobly with $150 million Series A financing and our increased commitment to EeroQ reflected our conviction that secure semiconductor, post-quantum cryptography, and quantum computing and quantum communications will increasingly converge among themselves. Our ambition is not to become a passive financial investor in quantum company, obviously. Our objective is to assemble, integrate, and control a strategic technology that can generate products, intellectual property, customer, and require revenue for SEALSQ. We also continue to expand the commercial visibility of this strategy. Our collaboration with the BWT Alpine Formula One Team has progressed beyond the cybersecurity into quantum and multi-physics simulation.