v3.26.1
Business Combinations
 6 Months Ended
Jun. 30, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Business Combinations

3. BUSINESS COMBINATIONS

2026 Acquisitions

During 2026, the Company completed multiple acquisitions, for which each of the purchase price allocations are based on preliminary information and subject to change. Upon completion of the final purchase price allocations, the final fair values of assets acquired and liabilities assumed and resulting goodwill may differ materially from the preliminary assessment. The Company has estimated the preliminary fair values of assets acquired and liabilities assumed in each acquisition based on information currently

available and will continue to adjust those estimates as additional information pertaining to events or circumstances present at the acquisition date becomes available during the measurement period.

The Company incurred approximately $10.5 million and $22.2 million in transaction costs for the three and six months ended June 30, 2026, respectively, which were primarily related to fees associated with financial and legal advisors, related to closed and pending acquisitions. Transactions costs were recorded in general and administrative expenses in the condensed consolidated statements of operations.

The Company has included the revenue and expenses of each acquisition in its condensed consolidated statements of operations from the date of acquisition.

Nexus Photonics, Inc.

On June 30, 2026, the Company acquired Nexus Photonics, Inc. (“Nexus”) for approximately $76.0 million of total consideration (the “Nexus Acquisition”). The Nexus Acquisition was accounted for as a business combination. The acquisition supports scaling Company’s quantum computing, networking, and sensing capabilities through photonics integration capability.

The following table summarizes the components of the purchase consideration to acquire Nexus (in thousands):

 

Fair value of common stock issued(1)

 

$

65,493

 

Fair value of equity awards(2)

 

 

10,552

 

Total purchase consideration

 

$

76,045

 

 

(1)
Reflects 1,229,698 shares of the Company’s common stock issued in the acquisition, multiplied by the closing price of the Company’s common stock on the closing date. These shares are inclusive of 285,000 shares held in escrow and 41,177 shares withheld to cover employee tax obligations. The escrowed shares are expected to be released within 24 months after the close of the Nexus Acquisition, subject to reductions for working capital adjustments and indemnity claims.
(2)
Reflects the issuance of certain equity awards, including restricted stock. Refer to Note 16 for further details on the Company’s share-based compensation awards, including awards issued in connection with acquisitions.

The following table summarizes the preliminary fair values of Nexus’s assets acquired and liabilities assumed as of the acquisition date (in thousands):

 

 

 

Preliminary Fair Value

 

Cash and cash equivalents

 

$

1,492

 

Accounts receivable

 

 

2,051

 

Prepaid expenses and other current assets

 

 

3,411

 

Property and equipment

 

 

1,002

 

Operating lease right-of-use assets

 

 

334

 

Other noncurrent assets

 

 

12

 

Intangible assets

 

 

25,900

 

Goodwill

 

 

52,432

 

Accounts payable

 

 

(90

)

Accrued expenses and other current liabilities

 

 

(4,979

)

Operating lease liabilities

 

 

(334

)

Unearned revenue

 

 

(262

)

Deferred tax liabilities

 

 

(4,924

)

Total fair value of net assets acquired

 

$

76,045

 

The goodwill of $52.4 million is primarily attributable to Nexus’s specialized assembled workforce and expected future synergies from combining operations. The Company does not expect the goodwill from this acquisition to be deductible for income tax purposes. Identifiable intangibles recognized primarily consist of $18.5 million in developed technology and $7.4 million in customer relationships, each with an estimated useful life of 4 years. Fair values of intangible assets were determined using a benchmarking approach based on comparable transactions within the Company's industry peer group.

Nexus’s revenue since the acquisition date to June 30, 2026, included in the Company’s condensed consolidated statements of operations, was not material.

Skyloom Global Corp.

On January 26, 2026, the Company acquired Skyloom Global Corp. (“Skyloom”) for approximately $188.5 million of total consideration (the “Skyloom Acquisition”). The Skyloom Acquisition was accounted for as a business combination. The acquisition supports the Company’s quantum platform roadmap by adding free-space optical communications, photonic systems engineering, and secure data transmission capabilities to the Company’s existing quantum products.

The following table summarizes the components of the purchase consideration to acquire Skyloom (in thousands):

 

Cash

 

$

36,020

 

Fair value of common stock issued(1)

 

 

119,774

 

Contingent consideration

 

 

32,680

 

Total purchase consideration

 

$

188,474

 

 

(1)
Reflects 2,761,679 shares of the Company’s common stock issued in the acquisition, multiplied by the closing price of the Company’s common stock on the closing date. These shares are inclusive of 325,235 shares held in escrow and 75,504 shares withheld to cover employee tax obligations. The escrowed shares are expected to be released within 18 months after the close of the Skyloom Acquisition, subject to reductions for working capital adjustments and indemnity claims.

The preliminary purchase consideration includes contingent consideration related to revenue milestones and technical milestones, which have a future maximum payout of $53.4 million and $22.8 million, respectively. The revenue milestone contingent consideration is classified as a liability and had a fair value of $24.5 million as of the acquisition date, of which approximately $1.2 million was recognized as post-combination stock-based compensation expense and is recorded in operating expenses in the condensed consolidated statements of operations. The technical milestone contingent consideration is classified as equity and had a fair value of $9.9 million as of the acquisition date, of which approximately $0.5 million was recognized as post-combination stock-based compensation expense and is recorded in operating expenses in the condensed consolidated statements of operations. If the revenue and technical milestones are achieved, the Company may issue up to 737,479 and 314,807 shares of common stock, respectively.

The following table summarizes the preliminary fair values of Skyloom’s assets acquired and liabilities assumed, including measurement period adjustments, as of the acquisition date (in thousands):

 

 

 

Preliminary Fair Value

 

 

Measurement Period Adjustments

 

 

Adjusted Fair Value

 

Cash and cash equivalents

 

$

1,034

 

 

$

—

 

 

$

1,034

 

Accounts receivable

 

 

5,339

 

 

 

—

 

 

 

5,339

 

Prepaid expenses and other current assets

 

 

6,135

 

 

 

—

 

 

 

6,135

 

Property and equipment

 

 

3,509

 

 

 

—

 

 

 

3,509

 

Operating lease right-of-use assets

 

 

1,083

 

 

 

—

 

 

 

1,083

 

Intangible assets

 

 

34,600

 

 

 

—

 

 

 

34,600

 

Goodwill

 

 

166,328

 

 

 

(1,539

)

 

 

164,789

 

Other noncurrent assets

 

 

767

 

 

 

—

 

 

 

767

 

Accounts payable

 

 

(2,332

)

 

 

—

 

 

 

(2,332

)

Accrued expenses and other current liabilities

 

 

(15,483

)

 

 

—

 

 

 

(15,483

)

Operating lease liabilities

 

 

(1,083

)

 

 

—

 

 

 

(1,083

)

Unearned revenue

 

 

(9,407

)

 

 

—

 

 

 

(9,407

)

Deferred tax liabilities

 

 

(459

)

 

 

—

 

 

 

(459

)

Other noncurrent liabilities

 

 

(18

)

 

 

—

 

 

 

(18

)

Total fair value of net assets acquired

 

$

190,013

 

 

$

(1,539

)

 

$

188,474

 

The goodwill of $164.8 million is primarily attributable to growth opportunities from the expansion of the Company’s quantum platform offerings, Skyloom’s specialized assembled workforce, and expected future synergies from combining operations. The Company does not expect the goodwill from this acquisition to be deductible for income tax purposes. Identifiable intangibles

recognized primarily consist of $30.5 million in developed technology with an estimated useful life of six years, $3.4 million in trade names with an estimated useful life of five years, and $0.7 million in customer relationships with an estimated useful life of three years. Fair values of intangible assets were determined using income approaches, including the relief from royalty methods.

Skyloom’s revenue since the acquisition date to June 30, 2026, included in the Company’s condensed consolidated statements of operations, was not material.

Seed Innovations, LLC

On January 30, 2026, the Company acquired Seed Innovations, LLC (“Seed”) for approximately $30.1 million of total consideration (the “Seed Acquisition”). The Seed Acquisition was accounted for as a business combination. The acquisition expands the Company’s software capabilities and its expertise in machine learning, advanced software architecture, and cloud migration will support managing and scaling complex quantum workloads.

The following table summarizes the components of the purchase consideration to acquire Seed (in thousands):

 

Fair value of common stock issued(1)

 

$

30,076

 

Total purchase consideration

 

$

30,076

 
(1)
Reflects 752,264 shares of the Company’s common stock issued in the acquisition, multiplied by the closing price of the Company’s common stock on the closing date. These shares are inclusive of 234,990 shares held in escrow. The escrowed shares are expected to be released within 24 months after the close of the Seed Acquisition, subject to reductions for working capital adjustments and indemnity claims.

The following table summarizes the preliminary fair values of Seed’s assets acquired and liabilities assumed, including measurement period adjustments, as of the acquisition date (in thousands):

 

 

 

Preliminary Fair Value

 

 

Measurement Period Adjustments

 

 

Adjusted Fair Value

 

Cash and cash equivalents

 

$

1,080

 

 

$

—

 

 

$

1,080

 

Accounts receivable

 

 

3,481

 

 

 

543

 

 

 

4,024

 

Prepaid expenses and other current assets

 

 

22

 

 

 

—

 

 

 

22

 

Operating lease right-of-use assets

 

 

1,327

 

 

 

—

 

 

 

1,327

 

Intangible assets

 

 

2,000

 

 

 

—

 

 

 

2,000

 

Goodwill

 

 

25,889

 

 

 

(543

)

 

 

25,346

 

Accounts payable

 

 

(765

)

 

 

—

 

 

 

(765

)

Accrued expenses and other current liabilities

 

 

(1,632

)

 

 

—

 

 

 

(1,632

)

Operating lease liabilities

 

 

(1,326

)

 

 

—

 

 

 

(1,326

)

Total fair value of net assets acquired

 

$

30,076

 

 

$

—

 

 

$

30,076

 

The goodwill of $25.3 million is primarily attributable to the expansion of the Company’s quantum platform offerings, Seed’s specialized assembled workforce and expected future synergies from combining operations. The Company expects the goodwill from this acquisition to be deductible for income tax purposes. Identifiable intangibles recognized primarily consist of customer relationships with an estimated useful life of five years. Fair values of intangible assets were determined using income approaches, including the multi-period excess earnings.

Seed’s revenue since the acquisition date to June 30, 2026, included in the Company’s condensed consolidated statements of operations was $14.0 million.

Pro Forma Results of Operations

The following table summarizes the unaudited pro forma consolidated revenue of the Company as if each of the 2026 acquisitions described above had been completed on January 1, 2025 (in thousands):

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Revenue

 

$

81,851

 

 

$

39,360

 

 

$

154,022

 

 

$

69,391

 

 

The pro forma information is not necessarily indicative of the results of operations that would have occurred had the acquisitions been made at the beginning of the periods presented or the future results of the combined operations. Unaudited pro forma consolidated net loss is not presented as the impacts are not significant to our condensed consolidated financial statements.

2025 Acquisitions

During 2025, the Company completed six acquisitions, including the acquisitions of 100% of the outstanding shares of Vector Atomic, Inc. on October 2, 2025, 100% of the outstanding shares of Oxford Ionics Limited on September 16, 2025, 100% of the outstanding shares of Capella Space Corp. on July 11, 2025, 100% of the outstanding shares of Lightsynq Technologies Inc. on May 30, 2025, approximately 86% of the outstanding shares of id Quantique SA on April 30, 2025, and 100% of the outstanding shares of a market intelligence business on June 9, 2025. The total purchase price of these acquisitions was $2,660.6 million, including $2,538.0 million of stock consideration, $58.4 million of cash consideration, $59.8 million of equity awards, and $4.4 million of contingent consideration. Each of these acquisitions was accounted as a business combination.

The stock consideration includes 2,386,869 shares held in escrow and 69,879 shares withheld to cover employee tax obligations. The escrowed shares are expected to be released within 12 to 18 months of the respective acquisition, subject to adjustments for indemnity claims and working capital adjustments.

The following table summarizes the purchase price allocation for the 2025 acquisitions based on the estimated fair value of the acquired assets and assumed liabilities (in thousands):

 

 

 

Purchase Price Allocation as of December 31, 2025

 

 

Measurement Period Adjustments

 

 

Purchase Price Allocation as of June 30, 2026

 

Cash and cash equivalents

 

$

56,145

 

 

$

—

 

 

$

56,145

 

Accounts receivable

 

 

19,039

 

 

 

—

 

 

 

19,039

 

Prepaid expenses and other current assets

 

 

49,646

 

 

 

124

 

 

 

49,770

 

Property and equipment

 

 

65,361

 

 

 

—

 

 

 

65,361

 

Operating lease right-of-use assets

 

 

16,912

 

 

 

—

 

 

 

16,912

 

Intangible assets

 

 

740,432

 

 

 

—

 

 

 

740,432

 

Goodwill

 

 

1,965,546

 

 

 

1,271

 

 

 

1,966,817

 

Other noncurrent assets

 

 

4,859

 

 

 

(137

)

 

 

4,722

 

Accounts payable

 

 

(28,582

)

 

 

—

 

 

 

(28,582

)

Accrued expenses and other current liabilities

 

 

(35,335

)

 

 

(64

)

 

 

(35,399

)

Operating lease liabilities

 

 

(16,828

)

 

 

—

 

 

 

(16,828

)

Unearned revenue

 

 

(23,373

)

 

 

—

 

 

 

(23,373

)

Deferred tax liabilities

 

 

(131,870

)

 

 

340

 

 

 

(131,530

)

Other noncurrent liabilities

 

 

(6,000

)

 

 

—

 

 

 

(6,000

)

Noncontrolling interest

 

 

(16,918

)

 

 

—

 

 

 

(16,918

)

Total fair value of net assets acquired

 

$

2,659,034

 

 

$

1,534

 

 

$

2,660,568

 

 

The following table summarizes the purchase price allocation for the 2025 acquisitions based on the estimated fair value of the identifiable intangible assets (in thousands):

 

 

 

Fair Value

 

 

Useful Life

Developed technology

 

$

657,816

 

 

5 – 8 years

Customer relationships

 

 

36,835

 

 

2 – 10 years

In-process research and development

 

 

18,800

 

 

In-definite

Tradenames

 

 

18,504

 

 

1 – 5 years

Non-compete agreements

 

 

8,477

 

 

2 years

Total intangible assets

 

$

740,432

 

 

 

The Company has estimated the preliminary fair values of assets acquired and liabilities assumed in each acquisition based on information currently available and will continue to adjust those estimates as additional information pertaining to events or circumstances present at the acquisition date becomes available during the measurement period. The purchase price allocations for

Vector Atomic, Inc., Oxford Ionics Limited, and Capella Space Corp. are preliminary as of June 30, 2026. The purchase price allocations for Lightsynq Technologies Inc., id Quantique SA, and the market intelligence business are complete.

In July 2025, the Company acquired additional shares of id Quantique SA, increasing the Company’s total ownership to approximately 91%. The acquisition was accounted for as an equity transaction as there was no change in control.