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IonQ(IONQ) - 2024 Q3 - Quarterly Report
IONQIonQ(IONQ)2024-11-06 21:10
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Financial Performance and Expenses - The company reported net losses of 129.6millionfortheninemonthsendedSeptember30,2024,comparedto129.6 million for the nine months ended September 30, 2024, compared to 115.9 million for the same period in 2023, with an accumulated deficit of 481.7millionasofSeptember30,2024[145]−Revenueincreasedby481.7 million as of September 30, 2024[145] - Revenue increased by 6.3 million, or 102%, to 12.4millionforthethreemonthsendedSeptember30,2024,drivenbyprogressinspecializedquantumcomputinghardwareandnewrevenuecontracts[169]−Costofrevenueincreasedby12.4 million for the three months ended September 30, 2024, driven by progress in specialized quantum computing hardware and new revenue contracts[169] - Cost of revenue increased by 4.5 million, or 224%, to 6.5millionforthethreemonthsendedSeptember30,2024,duetohigherhardwareandlaborcosts[170]−Researchanddevelopmentexpensesincreasedby6.5 million for the three months ended September 30, 2024, due to higher hardware and labor costs[170] - Research and development expenses increased by 8.6 million, or 35%, to 33.2millionforthethreemonthsendedSeptember30,2024,primarilyduetohigherpayroll−relatedexpensesandstock−basedcompensation[171]−Salesandmarketingexpensesincreasedby33.2 million for the three months ended September 30, 2024, primarily due to higher payroll-related expenses and stock-based compensation[171] - Sales and marketing expenses increased by 1.6 million, or 31%, to 6.6millionforthethreemonthsendedSeptember30,2024,drivenbyhigherpayroll−relatedexpenses[172]−Generalandadministrativeexpensesincreasedby6.6 million for the three months ended September 30, 2024, driven by higher payroll-related expenses[172] - General and administrative expenses increased by 0.4 million, or 3%, to 14.3millionforthethreemonthsendedSeptember30,2024,duetohigherpayroll−relatedexpenses[173]−Depreciationandamortizationexpensesincreasedby14.3 million for the three months ended September 30, 2024, due to higher payroll-related expenses[173] - Depreciation and amortization expenses increased by 2.1 million, or 78%, to 4.9millionforthethreemonthsendedSeptember30,2024,drivenbyhigherdepreciationandamortizationcosts[174]−Revenueincreasedby4.9 million for the three months ended September 30, 2024, driven by higher depreciation and amortization costs[174] - Revenue increased by 15.4 million, or 97%, to 31.4millionfortheninemonthsendedSeptember30,2024,drivenbyprogressinspecializedquantumcomputinghardwareandnewrevenuecontracts[177]−Costofrevenueincreasedby31.4 million for the nine months ended September 30, 2024, driven by progress in specialized quantum computing hardware and new revenue contracts[177] - Cost of revenue increased by 10.6 million, or 214%, to 15.6millionfortheninemonthsendedSeptember30,2024,duetohigherhardwareandlaborcosts[178]−ResearchanddevelopmentexpensesforthethreemonthsendedSeptember30,2024,included15.6 million for the nine months ended September 30, 2024, due to higher hardware and labor costs[178] - Research and development expenses for the three months ended September 30, 2024, included 13.9 million in stock-based compensation, up from 9.5millioninthesameperiodin2023[168]−SalesandmarketingexpensesforthethreemonthsendedSeptember30,2024,included9.5 million in the same period in 2023[168] - Sales and marketing expenses for the three months ended September 30, 2024, included 2.9 million in stock-based compensation, up from 2.0millioninthesameperiodin2023[168]−Researchanddevelopmentexpensesincreasedby2.0 million in the same period in 2023[168] - Research and development expenses increased by 36.0 million, or 59%, to 96.8millionfortheninemonthsendedSeptember30,2024,drivenbypayroll−relatedexpensesandincreasedheadcount[180]−Salesandmarketingexpensesincreasedby96.8 million for the nine months ended September 30, 2024, driven by payroll-related expenses and increased headcount[180] - Sales and marketing expenses increased by 8.2 million, or 72%, to 19.5millionfortheninemonthsendedSeptember30,2024,primarilyduetopayroll−relatedexpenses[181]−Generalandadministrativeexpensesincreasedby19.5 million for the nine months ended September 30, 2024, primarily due to payroll-related expenses[181] - General and administrative expenses increased by 6.0 million, or 17%, to 41.4millionfortheninemonthsendedSeptember30,2024,drivenbypayroll−relatedexpenses[182]−Depreciationandamortizationexpensesincreasedby41.4 million for the nine months ended September 30, 2024, driven by payroll-related expenses[182] - Depreciation and amortization expenses increased by 6.3 million, or 91%, to 13.2millionfortheninemonthsendedSeptember30,2024,duetocapitalizedquantumcomputingsystemcostsandotherpropertyandequipment[183]−Thechangeinfairvalueofwarrantliabilitiesincreasedby13.2 million for the nine months ended September 30, 2024, due to capitalized quantum computing system costs and other property and equipment[183] - The change in fair value of warrant liabilities increased by 38.2 million, or 143%, to a gain of 11.4millionfortheninemonthsendedSeptember30,2024,duetomark−to−marketadjustments[184]−AsofSeptember30,2024,thecompanyhadcash,cashequivalents,andavailable−for−salesecuritiesof11.4 million for the nine months ended September 30, 2024, due to mark-to-market adjustments[184] - As of September 30, 2024, the company had cash, cash equivalents, and available-for-sale securities of 382.8 million, with an accumulated deficit of 481.7million[186]−NetcashusedinoperatingactivitiesduringtheninemonthsendedSeptember30,2024,was481.7 million[186] - Net cash used in operating activities during the nine months ended September 30, 2024, was 66.3 million, primarily due to a net loss of 129.6million[191]−NetcashprovidedbyinvestingactivitiesduringtheninemonthsendedSeptember30,2024,was129.6 million[191] - Net cash provided by investing activities during the nine months ended September 30, 2024, was 58.4 million, primarily from maturities of available-for-sale securities[193] - Net cash provided by financing activities during the nine months ended September 30, 2024, was 2.4million,primarilyfromproceedsfromstockoptionsexercised[195]−Thecompanyexpectstoincursignificantlossesandhigheroperatingexpensesfortheforeseeablefuture,withfuturecapitalrequirementsdependentongrowthandtechnologyinvestments[186][187]PartnershipsandCollaborations−ThecompanyannouncedapartnershipwithAstraZenecatoestablishaquantumapplicationdevelopmentcenterinGothenburg,Sweden[147]−ApartnershipwithAnsyswasformedtoacceleratesimulationandreduceproductdevelopmenttimelines,integratingAnsyssoftwarewithIonQcomputers[147]−ApartnershipwithNKTPhotonicswasannouncedtodevelopnext−generationlasersystemsforfuturequantumcomputers,withprototypesexpectedin2025[147]−Thecompanypartneredwithimectodevelopphotonicintegratedcircuitsandchip−scaleiontraptechnology,aimingtoreducehardwaresizeandcostwhileincreasingqubitcount[147]ContractsandAgreements−Thecompanysecureda2.4 million, primarily from proceeds from stock options exercised[195] - The company expects to incur significant losses and higher operating expenses for the foreseeable future, with future capital requirements dependent on growth and technology investments[186][187] Partnerships and Collaborations - The company announced a partnership with AstraZeneca to establish a quantum application development center in Gothenburg, Sweden[147] - A partnership with Ansys was formed to accelerate simulation and reduce product development timelines, integrating Ansys software with IonQ computers[147] - A partnership with NKT Photonics was announced to develop next-generation laser systems for future quantum computers, with prototypes expected in 2025[147] - The company partnered with imec to develop photonic integrated circuits and chip-scale ion trap technology, aiming to reduce hardware size and cost while increasing qubit count[147] Contracts and Agreements - The company secured a 54.5 million contract with the United States Air Force Research Lab (AFRL) to advance quantum networking compatibility and deployability over four years[146] - A 9millionagreementwassignedwiththeUniversityofMarylandtoexpandquantumcomputingaccessattheNationalQuantumLabatMaryland(QLab)[146]Acquisitions−ThecompanyenteredintoadefinitiveagreementtoacquiresubstantiallyallassetsofQubitekk,Inc.for9 million agreement was signed with the University of Maryland to expand quantum computing access at the National Quantum Lab at Maryland (QLab)[146] Acquisitions - The company entered into a definitive agreement to acquire substantially all assets of Qubitekk, Inc. for 22.0 million in an all-cash transaction, expected to close within six months[139] Technological Milestones - The company demonstrated remote ion-ion entanglement, a critical milestone for scaling quantum systems[147] Operational Risks and Challenges - The company faces potential increases in operating costs due to inflation, supply chain constraints, geopolitical tensions, and wage increases, which may stress working capital resources[148]