WISeKey International Holding AG ($WIHN)

Ladies and gentlemen, thank you for your patience, and welcome to WISeKey International Holdings Full Year 2025 Financial Results Conference Call. As a reminder, this conference contains forward-looking statements. Such statements involve certain known and unknown risks, uncertainties and other factors that could cause actual results, financial condition, performance or achievement of WiKey International Holdings Limited to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. WISeKey is providing this communication as of this date and does not undertake to update any forward-looking statements contained herein as a result of new information, future events or otherwise. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Carlos Moreira, Founder and Chief Executive Officer of WISeKey. Thank you, sir. You may begin.

Good morning. Thank you very much to every -- and good morning to everybody. So 2025 was a defining year for WISeKey and the early weeks of 2026 have already validated the strategic decision we made over the last 24 months. We delivered audited full year revenue of $19.3 million, representing a 62% growth year-over-year with a subsidiary SEALSQ contributing $18.3 million and growing 66% over the prior year. Q4 alone produced $8 million of that revenue. More importantly, we ended 2025 with a fundamentally transformed balance sheet. We have over $429 million in cash and short-term investments at year-end, growing to more than $535 million as of April 30, following our March capital raise for CLS. This strong and well-capitalized balance sheet give us the ability to execute our strategy without compromise. I want to frame today discussions around 3 important messages. First, the transition from a sampling to commercial revenue is now underway and the data points are concrete. Second, our strategy architecture, what we call the year of convergence is integrating 5 technology pillars into a single vertical integrated Quantum Secure platform. And third, the regulatory and geopolitical environment is moving decisively in our favor. So starting with commercial inflation at SEALSQ. The 66% revenue growth SEALSQ delivered in 2025 reflects 2 distinct things happening simultaneously. One, our legacy semiconductor and PKI product line saw a renewed demand cycle as customers work through their inventory positions. On the other hand, we generated our first revenue from sampling or post-quantum products, which is the leading indicator that matters more for the -- what comes next. Today, our commercial pipeline at SEALSQ exceeds $200 million, covering potential revenue opportunities from 2026 through 2029. With that, more than $60 million is directly tied to QS7001 and QVault TPM programs, growing more than fivefold year-over-year from approximately $11 million. On the certification side, QS7001 has now passed fault injection on side-channel attack resistance evaluation at the EAL5+level, and we have completed the NIST validation. First production revenues are on track for 2026, late in 2026. This is again a gating event that converts pipeline into recurring hardware revenue, and we are tracking on excel. Moving the year of conversion for WISeKey. We are calling 2026 a year of conversion because our 5 technology pillars; SEALSQ, WISeSaT, SEALCOIN, WISeID/INeS and WISe.ART are now operating as a single integrated stack rather than as a Genta business as it was the case until now. What this means in practice is that our team -- our team in sharing knowledge and resources to create virtually integrated solutions for our customers. Our SEALSQ which developed post Quantum Secure chip design to generate ASIC design services revenue, hardware revenue and recurring income through outsourced semiconductor personalization and test OSPT Center has now entered in commercial acceleration phase or WISeSaT we have made significant progress we have launched 21 satellites to date with 14 currently operational in low earth orbit, and we remain on track towards the 100 satellite constellation. The definitive business combination agreement we signed in November with Columbus Acquisition Corporation is expected to close in the second half of 2026, very likely around the month of September, which will result in wise space holding listing on the NASDAQ with a wise Key and SEALSQ together receiving 25 million shares at $10 per share, representing a $250 million of equity value while retaining majority ownership. This listing is the structural enabler of our Quantum special Orbital cloud, what we call the QSOC initiative. Under the QSOC WISeSaT operates the space infrastructure and SEALSQ owns and operates the Quantum cloud as a managed subscription service. The full operational capability target is 2033, and WISeSaT is expected to operate a constellation provided a dedicated QSOC capability for SEALSQ and SEALSQ is aiming to deliver a contractual guarantee 99.9% in uptime service agreement to its customer. The CEO quantum fund. I want to spend a moment on capital deployment to date. The SEALSQ Quantum fund grew from $20 million at lounge in 2025 to $200 million of available capital resources as of April 30, 2026. Through the end of April, we have deployed approximately $23.2 million across 5 portfolio position, which are, we invested $40 million in IC -- the acquisition added more than 100 ASIC engineers in Grenoble in France, and we are now developing our quantum resistance secured element optimized for Crystal as Cyber, which are the standards for post quantum technology. We deployed $4.2 million in Quantix add security project in Murcia, Spain, which is building one of the European first sovereign post-quantum semiconductor personalization center and Trenter co-founded by the Spanish sett.eas, which is the glove agency in charge of investment in critical infrastructure in Spain, program with $20 million that has been contributed by the Spanish government. We invest another $4 million in weekend, which integrates our PQC secure digital identity into financial KYC. We made 2 rounds of investment, eroc or Anchor U.S. Quantum hardware investment in a company in Chicago, which brings electrons on Helion Quantum architecture, which is CMOS compatible with our chip processes. So CMOS is the technology that we are investing on because it totally is aligned and fits with our semiconductor capabilities, we plan to demonstrate a joint Quantum security stack at or send Geneva Quantum Center of Excellence currently in preparation to be inaugurated in October this year. Additionally, we made an initial a small investment in Colibri TD, our French Quantum solver partner, which is working on improving sub wafer yields from 50% to 80% and which directly reduces our cheap manufacturing costs. Each of these investments reinforce the underlying business -- they are not adjusted debt. They are vertical integration required to move the company technology to the next level. Finally, on the regulatory environment, the U.S. NSA CSA 2.0 mandate by the U.S. government requires CNSA 2.0 compliant for all new national security system acquisitions by January 1, 2027 in the United States. This is now 8 months away. Federal agencies in the U.S. are required to identify and remediate quantum vulnerable system and the iSPQC standards were finalized in 2024. Our products are designed to comply with all these standards, and we are seeing this translate directly into pipeline activity in areas such as defense, smart meters, ecosystem through the Wison and U.S. federal procurement through the or trusted semiconductor solution alliance partner. With that strategic context, let me hand the call over to John to walk you through the financials in details.

Thank you, Carlos, and good morning, everyone. So full year revenue for 2025, as Carlos has said, was $19.3 million, an increase of 63% versus $11.9 million in 2024. Fourth quarter revenue was $8 million, which doubled from $4 million in the fourth quarter of 2024. Approximately $3.5 million of the full year increase relates to 5 months of revenue contribution from ICs, which we acquired through SEALSQ on August 4, 2025, and consolidated from that date forward. Organic growth was driven by a recovery in our core secure microcontroller and PKI product families plus initial sampling revenue from our post-quantum platforms. I want to be transparent about how to think about 2025. As Carlos has already said, it is the year that paved the way for our convergence strategy. The 2025 numbers continue to reflect the transitional period between the traditional product offerings and next-generation post-quantum semiconductor platforms and included the first revenues from sampling and with the transitions expected to enter its commercialization phase with the first production revenues anticipated in the latter part of 2026. The full year 2025 net loss was $38.2 million, which was due in a large part to $ 8.3 million of noncash share-based compensation, consolidation following the acquisition of IC Alps, materially increased R&D investment we made to accelerate the post-quantum semiconductor product range and the expanded sales and marketing-related expenses made has brought the expected commercial ramp, which then were partially offset by a one-off credit on the settlement of the ex work flow and by interest income on cash deposits. On the balance sheet side, as of December 31, 2025, WISeKey had $429 million in cash and short-term investments, up from $91 million at the end of 2024, an increase of 70%. And -- this was achieved while deploying $ 23 million during the year towards strategic investments in weekend IC alps, Quantic edge security and others that Carlos has already touched on. In March 2026, raised a further $ 125 million in additional capital. As of April 30, the WISeKey Group had over $535 million in cash and short-term investments. This strong cash position allows us to fund post-quantum R&D scale our manufacturing capacity, pursue selective M&A and continue to deploy through the CLS Q quantum fund. Moving on to guidance. We are reaffirming our full year 2026 revenue guidance, which calls for growth of 50% to 100% year-over-year driven primarily by SEALSQ. We have some significant projects in relatively advanced phases of negotiation. And we therefore hope to be able to positively reinforce and upgrade our guidance in the coming months. The drivers of this are full year consolidation of IC ALPS, broader entry into the trusted platform module market by QVault-TPM, the launch of Q ASIC custome post-quantum ASIC engagements, initial QS7001 production revenues following the EAL5+certification in late 2026. Initial revenue is expected from the Quantix Edge Security personalization center development in Spain and continued expansion of recurring PKI subscription and OSPT personalization revenues. With that, I'll hand back to Carlos for closing remarks before we open the line for questions.

So thank you, John. And before we move into our Q&A, let me close with a brief view on what we expect to see through the remaining of 2026, that has not been yet disclosed during the first part of this meeting. So as we say, the QS 7001, the EA-L5 plus certification is on track. We expect to generate the first production revenue in the latest part of this year. It is important to note that this is the first type for a chip then they are certified with that level of security. And although this is not a requirement to sell because we can sell them without that certification will help to increase the revenue, especially in government contracts and critical infrastructure projects. Second, we expect the WISeSaT business combination of Columbus Acquisition Corporation to close in the second half of 2026, creating an independent listed company in WISeSat Space Holding Corporation, as you all know, with the IPO of the space, space is becoming a very important infrastructure as many of the current earth based infrastructure such as data centers, nodes are moving to the space and it's critical for a company like WISeKey, for its subsidiary WISeSaT to have an early presence in that ecosystem, which will be a very important growth consisting in the future, everything is moving to what we call Quantum Internet. And we're having assets related to satellite, launching capabilities in cooperation with the Space X, cryptographic capabilities to store at the satellite and the future possibility to do quantum key distribution for space are strategic components for companies like WISeKey and WISeSaT. There, we said continued capital deployment from the CLSQ Quantum fund into vertical integrated R&D partnership as the company is setting a very important cash position it is essential that we use this unique opportunity to build up infrastructure both in the United States and Europe, and that will include investments, important investments in areas such as personalization center, which are capital intensive -- and this is 1 of the main reasons why the company has raised important funding during 2020 -- last year and this year, with a total incremental cash position of $500 million, over $500 million, which $200 million are allocated for this quantum fund. Fourth we expect to report concrete commercial milestone from several partnerships we have established with reputable customer and business partner that will accelerate our revenue, particularly in the United States in announcements that they will be made during the second half of the year. And fifth, the reallocation of WISeKey and SEALSQ to Pont-Rouge Lance facility in Geneva should be completed in the second half of 2026, which is a much larger facility than the 1 we have now, and will allow us to establish the Geneva Quantum Center of Excellence in cooperation with leading organizations in Geneva, such as Sean, the United Nations, the Geneva government and others, then they are all working in accelerating the adaptation of quantum technologies into sectors such as financial sectors and others. The Quantum threat to today encrypted infrastructure is mathematically certain and approaching rapidly as the latest announcements made by Google and other NVIDIA and others that they are confirming that acute day could be as near as 2028, 2030. The companies that will lead the post-quantum era will be those and combine server and silicon trusted identity secure satellite key distribution and quantum resistant transaction infrastructure into a single integrated platform. That is what Wiki is building and it's all about. That is what we are now monetizing -- so I give now the operator to open the Q&A part of this call. Thank you very much for your attention.

[Operator Instructions] Our first question is from Matthew Galinko with Maxim Group.

Maybe to start with of the pipeline you're seeing for quantum chips I think you said it's about $60 million from $26 million to $29 million. How much of that would you say is driven by regulation and how much is just independent of regulatory-driven requirements. .

So maybe I'll let John to further its planning, but thank you, Matt, by the way, and I see back to you again. So the regulation, obviously, the CNSA 2.0 is of concern to anyone that is conducting critical infrastructure in matching, hyperscaler imagine data centers, imagine space satellite. I mean everything will be compromisable in terms of security because quantum computer will be breaking RSA keys. Obviously, we are not yet there quantum computers will need something like 10 million QBECS to do that. But the new is a lot of R&D and a lot of innovation in the Quantum where companies are already in the process of being able to generate Tanqui And the new thing is that you can put those cubits also in a serial process, so you can combine cubits from different companies and bring them into a data center and use them in a scaling process to generate enough QBits to make a substantial usage of those decentralized quantum computers. It's something like we call Quantum as a service. So that growth of compute capability and possibility of using Quantum computers to break RSA. Obviously, that's not the -- the main focus of quantum computer, Quantum computer can do many good things, but this is a bad thing that they could do, right? This is making a lot of companies conscious about the risk. This is also increasing their potential insurance policies. So they know that they need to be ready to that date. So we are working with integrators, for instance, that they are now adding PQC security as part of the contracts and they have with thousands of companies and they want to expand the current security services and they get from those. So professional service companies to add both PQC defense capability and also, in some cases, also a space security as many of these companies are now launching satellites and they want to use satellite constellations to access their data. So there is a trend that is moved both by innovation in the market. It also moves by government regulatory and this is not only in America. We have the similar regulations now in Europe and also going to be the same thing in Asia, in Singapore and India. And I think by the year 2030, anyone that runs a critical infrastructure will be PQC compliance. So they will have to buy the chips that allow them at the object level to defend a quantum attack. There is also PQC software, which is at the back-end level. So those are -- we are working with partners to provide that technology that will allow, for instance, to assess the vulnerabilities of a financial institution if a quantum computer arrives. So those are also partnership with a professional services company, that they will work with us to teach potential risk to those companies if they don't apply post quantum capabilities as soon as possible. So it is a trend. I mean, it's like putting the air back in the car, right? You needed a time, now it's compulsory. -- nobody thinks about it. That's happening the same from the year 2030, you will not conceive the possibility of developing anything, which is potentially breakable through a Quantum attack.

That's great color. And I think you sort of started on this, but maybe beyond kind of the regulation you referenced, where else regionally are you seeing movement towards those sorts of requirements for Quantum or PQC capable chips and security. .

So sorry, if you don't mind asking the question again. I didn't get the first part?

Sure. So I'm curious where else in the world that you're seeing regulation emerge to mandate quantum secure technology on critical infrastructure. .

So as I mentioned, the CNSA 2.0 is the reference. This is a U.S. government, right? -- that says that 2028, you need to be protected against Quantum attack through a post-quantum capability. Otherwise, your technology might be considered legacy. So imagine anyone selling anything to the U.S. government, they will need to be PC compliant. Otherwise, they will not just buy your product. That will also affect import products. So imagine a video camera, imagine cars, imagine drones, imaging satellite equipment, imagine Cisco routers, all that with our PCC capabilities will not be able to be deployed on critical infrastructure and critical infrastructure, obviously, airports, smart cities, government entities are the first 1 that needs to be secure. So this is a must to have type of first line of defense. Then you have obviously the commercial opportunities of this. I mean if you have we just announced a deal with Parrot. Parrot is one of the leading drone companies in the world, one of the first one, by the way, and Parrot is being used now in many battlefield type of activities. As you know, the drone industry has evolved enormously and the founder of Parrot recognized that he wanted to be the first drawn company. to have all QS 7001 installed physically into the drone. So we did it. And obviously, we announced it. And this is now being used as a case study any other drone company, and they want to have their drone compliant. Imagine the consequence of having a drone that is not secured to that level, right? So that will be in industries like the health industry, where we have, for instance, deployments with connected devices than they are using hospital you can ensure that your pump insulin and connects to the Internet cannot be breakable through an externa attack. So the quantum computers are so powerful that they could make a massive attack into billions of devices in 1 shot. And they will detect the vulnerability of those devices. As it is the case now with AI, right? I mean there's a lot of discussions about what is happening with the Sony AI companies without mentioning them. that they have now capabilities to identify cybersecurity vulnerabilities very easily. And imagine if that is used in the wrong hands, right? So we are in a very similar situation with quantum computer. So PQC is the line of Defense of Quantum, but also the company because we are investing in Quantum companies like we invested in Iraq, which is a Chicago-based company, where we are working very closely with them. to develop semiconductors, then they will be able to basically create a quantum computer. So we are also learning from innovation in Quantum in order to create basically what we call a suberin quantum computer, a quantum computer then will be able not to be used to destroy the security of critical infrastructure, but it could be used to solve major province like discovering a new medical product, for instance, with less than 10 cubics, we can now work with pharmaceutical companies to develop a new drug. And put that into the market much faster than without having that compute capability. So it is a very emerging market where you will see a combination between Quantum security, quantum computer deployment, hybrid combinations where you are using quantum computers and supercomputers at the same time as supercomputers are not going to disappear, right? It will take a time between now on maybe 10 years where Quantum computers will totally display supercomputers, but this is -- we have still a few years to go, where you might have a hybrid platform solutions. So the big opportunity to WISeKey is that WISeKey has all those critical assets SEALSQ, what concerns chips in WISeSaT, what concerns the space constellation with operational satellite in is, what confirms identity management and the possibility of injecting digital identity into the silicon directly with a cryptographic route of trust, so all these ecosystem of companies that have been created under the WISeKey is making WISeKey very unique company, very hard to replicate it and extraordinary important for the next generation of quantum computing that is going to emerge. As you will need to have an end to end. And then at the same time, you need to provide a sovereign structure. Another important aspect here is that many companies will prefer to buy a solution of SEALSQ in the U.S.A. because they don't want to buy a Chinese quantum computer, for instance, because there will be concerned about what is the process of that quantum computer. And who has done it and what is the cryptographic capabilities, what is the trust model and so on. So quantum computing industry is becoming sovereign -- and this is a big opportunity for us.

And just 1 final question for me, particularly on the satellite business. I'm wondering if you could share anything about where you're hearing or seeing demand for services delivered through the constellation that you're building. Is there a pull on the services that you're demonstrating now? And -- or do you -- is it a push or kind of talk about how that is developing commercially. .

Yes. So the constellation, we -- SA, which is a company owned by initially invested in sending with SpaceX 2021 satellites with those are pico satellites, that's the measure that basically were tested to IoT projects. So let the satellite track and trace anything on earth that has a chip, not necessarily PQC chip can be a traditional Volt AC secured element. So you can track and trace from the space object. And this is a big market, right? Because 90% on earth is not connectable. So you cannot track an object in the middle of the sea or in the middle of the desert or in rural areas where connectivity is not available. So there is a very big demand on companies and they are running logistics, cargo companies on their trucks, a company than they are containers in the middle of the sea, military applications, they need to have that connectivity. And that's why we proved during the first 21 launches, this was obviously an important investment because of the company. Those launches are expensive. One satellite is a $300,000 to $500,000 to launch and produce, but we were 1 of the first ever PQC compliance constellation in the space with satellite than they are in orbit. Now we are moving into the next level of that with the last launch of the satellite we did in June, included already the latest version of the QS 7001. So we started to test -- we also added new things like a crypto wallet for CL coin, which is another company of the group, WISeKey of 80% of SEAL Coin in cooperation with Hedera. Hedera is 1 of the largest blockchain companies in the world. And with them, what we did is to embed our wallet into the satellite itself. So the satellite can change crypto tuck-ins with another satellite or with an earth station or with an object that will require a payment. So imagine 1 satellite collecting pictures for another satellite and paying for that service with tuck-ins and those tuck-ins are automatically exchanged between the wallets, and they are located in each of the satellite. This is a breakthrough technology. We are now working on this is -- I cannot say names now because we are still in the process of finalization. But you will see agreements with strategic professional service company and others, and they will resell that capability that we have already to their clients because their clients are, as I mentioned before, they want to add a space into the cybersecurity contracts that they have with those professional integrators. So the -- we are launching this space with the SpaceX IPO is going to boom, because SpaceX has already announced that they cannot even cope with the demand of sending rockets. So we will need to send rockets all over the world with different companies. We have established relations with ISRO in India with PLD space in Spain, those are new companies and they are sending rockets. Our preference, obviously, is to do it as much as we can with the SpaceX and we have a very good relation with them. And I'm sure that something there will be very soon possible in a more integrated way because as we need to send more satellite, the objective is to send 100 satellites in the next month, we will need, obviously, to be able to scale up the launching capability. So the final objective of those satellites is to act as some nodes in the space. So let's say that SpaceX sends creates a data center. And that data center needs to be connected to earth station those earth stations by the way, we have already 2 operational earthstation, 1 in the southern part of Spain and another in Switzerland, in lusan. Those earth stations, they are now triangulated with the nodes in the space, encrypting the data using PQC chips on it on both ends. And that data then is made it available to data centers, both in the space in the future data centers then SpaceX is very focused to build, but also data centers on earth. So end users can get a combination, a hybrid combination of access to data centers in the space using those nodes. Without the node, the communication is not secure. I mean StarLink is not a secure satellite. They need a layer of security to talking to non-StarLink or SpaceX assets. And this is WISeSaT positions. It's an interconnector of existing constellations using those very sophisticated, high secure satellites that we are manufacturing and launch into this space. So it's a very -- I mean the clients are there. We are working -- has been announced with the Swiss Army is 1 important client. We are working with several financial institutions and they are saying, we will actually prefer to connect to the space to even organize to the Internet as what they call the Quantum Internet space Internet and CLS has launched an initiative we call QSOC, which is I mentioned that on my brief, is a quantum space, Constellation cloud. So in the future, you will be asking the space like you access Amazon Cloud or any of those cloud -- and this is the positioning of the company. The fact that we own the critical infrastructure is a very strategic asset for WISeKey, not only in terms of the valuation because, obviously, the listing of the company on the NASDAQ is going to increase substantially the value because we are aiming at $250 million initial listing, and this company WISeKey is the majority shareholders. So all that hopefully will be reflected on the increased valuation of WISeKey plus the fact that WISeKey that has been also announced is planning, hopefully, by the end of this year, to move directly to the NASDAQ as a way to simplify the processes. Currently, we are listed in Switzerland, which is a very small market, not at all specialized in this type of technology. And this is obviously detrimental to the valuation of the company.

Great. Good luck with the convergence.

[Operator Instructions] With no further questions at this time. I would like to turn the conference back over to Carlos for closing remarks. .

So thank you very much for your attention to this call. The company obviously is available. This information will be provided to the investor side. the company, myself and John, we are fully available for any further questions. I'd like to thank the moderator for the organizing to Lina, the IR company, and also for the questions and the analysts present on this call. Thank you very much

Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your patience.

Thank you very much.