Title: Subtraction and Addition of Propagating Photons by Two-Level Emitters

Abstract: Coherent manipulation of quantum states of light is key to photonic quantum information processing. In this Letter, we show that a passive two-level nonlinearity suffices to implement non-Gaussian quantum operations on propagating field modes. In particular, the collective light-matter interaction can efficiently extract a single photon from a multi-photon input wave packet to an orthogonal temporal mode. We accurately describe the single-photon subtraction process by elements of an intuitive quantum-trajectory model. By employing this process, quantum information protocols gain orders of magnitude improved efficiency over heralded schemes with linear optics. The reverse process can be used to add photons one-by-one to a single wave-packet mode and compose arbitrarily large Fock states with a finite total success probability $>96.7\%$.